NCI Building Systems Reports First Quarter 2015 Fiscal Year Results

HOUSTON, March 10, 2015 /PRNewswire/ -- NCI Building Systems, Inc. (NYSE: NCS) today reported financial results for the first fiscal quarter ended February 1, 2015. 

First Quarter 2015 Financial and Operational Highlights:

• Sales rose 3.9% to $322.9 million, compared to last year's first quarter
• Gross profit margin expanded 320 basis points year-over-year to 22.3%
• First quarter operating income increased to $4.6 million from a loss of $3.2 million in last year's first quarter
• Net loss per diluted common share was $(0.00) and adjusted net income per diluted common share was $0.03
• Adjusted EBITDA rose 145.3% to $19.6 million, compared to $8.0 million in the prior year's first quarter
• Buildings backlog grew 10% year-over-year and consolidated backlog increased 7% to $333 million
• CENTRIA acquisition closed on January 16, 2015 funded with $250 million in Senior Notes

Norman C. Chambers, Chairman, President and Chief Executive, commented, "Our first quarter financial performance marks the third consecutive quarter of year-over-year improvement in Adjusted EBITDA growth and the best first quarter performance since 2008. Our streamlined manufacturing organization, commercial discipline and supply chain management continue to drive improved financial results. Modest revenue growth was accompanied by a $7.7 million year-over-year improvement in operating income, demonstrating the Company's operating leverage, which is consistent with achieving our mid-cycle recovery goal.  We expect our simplified organizational structure will continue to support greater efficiency and improved execution as market growth continues."  

First Quarter 2015 Results First quarter sales increased 4% to $322.9 million from $310.7 million in last year's first quarter, driven primarily by higher volumes in our legacy single skin business and the partial month contribution of the CENTRIA acquisition that closed on January 16, 2015.

Gross profit increased 22% to $72.1 million from $59.2 million in the first quarter of 2014, and gross profit margin expanded 320 basis points to 22.3%, compared to 19.1% in the prior year's period. Contributing to the higher margins were improved manufacturing efficiencies and supply chain management combined with the benefit of higher margin product mix and continued commercial discipline.

Operating income increased meaningfully to $4.6 million in the current quarter from a loss of $3.2 million in the first quarter 2014 due to the expansion in gross profit margin.

As noted above, Adjusted EBITDA, a non-GAAP measure, defined as earnings before interest, taxes, depreciation and amortization, and cash and other non-cash items, in accordance with the Company's term loan credit agreement was $19.6 million, up 145% from $8.0 million in the prior year's period.   Please see the reconciliation of Adjusted EBITDA to net income (loss) in the accompanying financial tables.

The Company reported a net loss of $0.3 million, or $(0.00) per diluted common share in the first quarter of 2015, which included $1.7 million of strategic development and acquisition related costs, $1.5 million of restructuring charges primarily related to the announced closure of the Caryville, Tennessee manufacturing facility and other severance costs and $1.0 million of short lived acquisition method fair value adjustments. Excluding the impact of these three special charges, the Company reported adjusted net income, a non-GAAP measure of $2.3 million, or $0.03 per diluted common share compared to an adjusted net loss of $4.0 million, or $(0.05) per diluted common share, in the first quarter of 2014.

Cash and cash equivalents ended at $50.7 million compared to $16.6 million in the comparable period in fiscal 2014.  In addition, the Company's $150.0 million ABL facility remains undrawn as of February 1, 2015.

Fiscal First Quarter 2015 Segment Performance  Third party sales in the Coatings group were $24.4 million and relatively flat with last year's first quarter.  Total sales, including intercompany activity, increased $1.3 million, or 2%, to $55.6 million from $54.3 million when compared to the same quarter in 2014.  Operating income declined to $4.0 million in the first quarter of fiscal 2015 compared to $6.5 million reported in the same period last year, which included a $1.0 million benefit for insurance recovery related to the August 2013 fire at the Jackson, Mississippi facility.  The Coatings segment continues to pursue product and end-market diversification as well as operational efficiencies to drive profitable growth.

The Components group generated a $14.7 million, or 11%, increase in third-party sales during the quarter.  Total sales, including internal activity, increased $14.6 million, or 9%, to $172.8 million from $158.2 million in the prior year quarter.  Operating income increased 103% to $8.3 million compared to $4.1 million in the same quarter in 2014.  Every brand in the Components group achieved year-over-year improvement as our organic sales and service growth initiatives continued to enhance performance.  CENTRIA contributed $8.5 million in sales (reflecting approximately 2 weeks of results included in the quarter), and we expect the CENTRIA business to be substantially integrated into NCI's operations by the end of our fiscal third quarter.

Third party sales in the Buildings group decreased 2% to $144.5 million in the fiscal first quarter from $146.7 million in the prior year's quarter, primarily due to slightly lower volumes.  Total sales, including intercompany activity, were $149.8 million, a decrease of $2.4 million, or 2%, from $152.2 million in the same period in 2014.  Operating income increased significantly to $8.7 million in the current quarter when compared to $1.6 million in the prior year's quarter.  Despite the decline in volumes, the Buildings group continued to benefit from strong margins and backlog growth during the quarter and expects to maintain operational momentum supported by the commercial discipline and manufacturing efficiencies now in place.  

Market Commentary Leading indicators for nonresidential construction activity continue to indicate positive momentum into fiscal year 2015, the fifth year of nonresidential recovery.  The most recently available CBRE Econometric Advisors data reflects a continuation of increasing demand for the industrial property sector.  We expect that declining vacancy rates will sustain new construction starts especially in the higher volume sectors of warehousing through the current calendar year.

The American Institute of Architects' (AIA) Architecture Mixed Use Index declined from 47.8 in December 2014 to 46.9 in January 2015.  The Architectural Billings Index expanded in December from November by 1.3 points but softened in January to 49.9. Prior to the January 2015 reading, the Architectural Billings Index had been above 50 for the previous eight months and was above 50 in ten of the twelve months in 2014.  Due to the leading nature of the Architectural Billings Index, the reported index values in the last eight months of 2014 suggest increasing levels of U.S. nonresidential construction spending in 2015.  Further, the New Projects Inquiry Index registered 59.1 in December 2014 and 58.7 in January, signaling continued positive momentum for near-term architectural billings. 

The January 2015 Federal Reserve's Senior Loan Officer Survey indicated modest easing of lending standards for commercial and industrial loans.  Over the past three months, banks have experienced slightly increased demand for nonresidential investment loans for commercial and industrial projects.

Summary/Outlook Mr. Chambers remarked, "Our first quarter 2015 financial results reflect the positive momentum in NCI's business performance that began in the second half of last year.  Our strategic investments have focused on developing quality processes, simplifying our organizational structure, expanding product offerings and creating centers of manufacturing excellence, all of which are anchored by commercial discipline. As these initiatives continue to mature, we expect to sustain the benefit of improving margins and increasing profitability despite the choppy, slow-growth recovery."

"We are encouraged that our bookings and backlog trends continue to indicate a nonresidential recovery, especially in the commercial and institutional end markets.  The increased level of higher-complexity bookings we achieved during the first quarter suggests the continuation of strong margins in our Buildings group.  Our objective is to achieve year-over-year improvement throughout fiscal 2015, excluding the effects of unusual or special items, as we continue to seek opportunities to improve our efficiencies." Mr. Chambers concluded.

For additional information, please see the CFO Commentary at www.ncibuildingsystems.com under the tab Quarterly Earnings and Transcripts.

Conference Call Information The NCI Building Systems, Inc. first quarter 2015 conference call is scheduled for Wednesday, March 11, 2015, at 9:00 AM ET. Please dial 1-888-407-0672 (toll free) or 412-902-0003 to participate in the call. To listen to a live broadcast of the call over the Internet or to review the archived call, please visit the Company's website at www.ncibuildingsystems.com. To access the taped replay, please dial 1-888-660-6853 (toll free) or 201-612-7415 and the passcode 13600785# when prompted. The taped replay will be available two hours after the call through March 18, 2015.

About NCI Building Systems

NCI Building Systems, Inc. is one of North America's largest integrated manufacturers of metal products for the nonresidential building industry. NCI is comprised of a family of companies operating manufacturing facilities across the United States, Mexico and China with additional sales and distribution offices throughout the United States and Canada. For more information visit www.ncibuildingsystems.com.

Contact: Layne de Alvarez Vice President, Investor Relations 281-897-7710

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "believe," "guidance," "plan", "potential," "expect," "should," "will," "forecast" and similar expressions are forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our current expectations, assumptions and/or beliefs concerning future events. As a result, these forward-looking statements rely on a number of assumptions, forecasts, and estimates and, therefore, these forward-looking statements are subject to a number of risks and uncertainties that may cause the Company's actual performance to differ materially from that projected in such statements. Among the factors that could cause actual results to differ materially include, but are not limited to, the Company's ability to integrate CENTRIA with the Company's business and realize anticipated benefits of such acquisition, industry cyclicality and seasonality and adverse weather conditions; ability to service or refinance the Company's debt and obtain future financing; the Company's ability to comply with the financial tests and covenants in its existing and future debt obligations; operational limitations or restrictions in connection with our debt; recognition of asset impairment charges; the ability to make strategic acquisitions accretive to earnings; retention and replacement of key personnel; enforcement and obsolescence of intellectual property rights; fluctuations in customer demand; commodity price increases and/or limited availability of raw materials, including steel; increases in energy prices, competitive activity and pricing pressure; challenging economic conditions affecting the non-residential construction industry; volatility in the U.S. economy and abroad generally, and in the credit markets; costs related to environmental clean-ups and liabilities; changes in laws or regulations, including the Dodd-Frank Act; the dilutive effect on the Company's common stockholders of potential future sales of the Company's common stock held by the selling stockholders; substantial governance and other rights held by the selling stockholders; breaches of our information system security measures and damage to our major information management systems; hazards that may cause personal injury or property damage, thereby subjecting the Company to liabilities and possible losses, which may not be covered by  insurance; costs and other effects of legal and administrative proceedings, settlements, investigations, claims and other matters; and the volatility of the Company's stock price. The Company's SEC filings, including our most recent reports on Form 10-K, particularly under Item 1A "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended November 2, 2014 and in the Company's Quarterly Report on Form 10-Q for the quarter period ended February 1, 2015, identify other important factors, though not necessarily all such factors, that could cause future outcomes to differ materially from those set forth in the forward-looking statements. NCI expressly disclaims any obligation to release publicly any updates or revisions to these forward-looking statements to reflect any changes in its expectations.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/nci-building-systems-reports-first-quarter-2015-fiscal-year-results-300048347.html

SOURCE NCI Building Systems, Inc.