Form 8-K NCI BUILDING SYSTEMS For: Jun 05
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________
FORM 8-K
________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 5, 2018
________________
NCI BUILDING SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
________________
Delaware | 1-14315 | 76-0127701 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) |
10943 North Sam Houston Parkway West Houston, Texas | 77064 |
(Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (281) 897-7788
________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:
£ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
£ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
£ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
£ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company £
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. £
Item 2.02. Results of Operations and Financial Condition.
On June 5, 2018, NCI issued a press release (the “Press Release”) announcing NCI’s financial results for the second fiscal quarter ended April 29, 2018. A copy of the Press Release is attached as Exhibit 99.1.
Additionally, attached hereto as Exhibit 99.2 is a supplemental operational and financial presentation with the results for the second quarter ended April 29, 2018 and forward-looking statements relating to the third fiscal quarter and the fiscal year ending October 28, 2018 (the “Supplemental Presentation”). The Supplemental Presentation will be posted on the company’s website, www.ncibuildingsystems.com, on June 5, 2018.
NCI’s Press Release and Supplemental Presentation include Adjusted EBITDA, Adjusted Operating Income (Loss), Adjusted Net Income Applicable to Common Shares, Adjusted Net Income Per Diluted Common Share and Backlog, which are non-GAAP financial measures. Adjusted EBITDA excludes restructuring and impairment charges, strategic development and acquisition related costs, loss on disposition of business, acceleration of CEO retirement benefits, gain (loss) on sale of assets and asset recovery, share-based compensation, gain on insurance recovery, unreimbursed business interruption costs, and goodwill impairment. Adjusted Operating Income (Loss) excludes restructuring and impairment charges, strategic development and acquisition related costs, loss on disposition of business, acceleration of CEO retirement benefits, gain (loss) on sale of assets and asset recovery, gain on insurance recovery, unreimbursed business interruption costs, and goodwill impairment. Adjusted Net Income Applicable to Common Shares and Adjusted Net Income Per Diluted Common Share exclude loss on extinguishment of debt, loss on disposition of business, restructuring and impairment charges, strategic development and acquisition related costs, Acceleration of CEO retirement benefits, gain on insurance recovery, discrete tax effects of U.S. Tax Reform, and the tax effect of the applicable non-GAAP adjustments. Adjusted EBITDA is calculated based on the terms contained in NCI’s term loan credit agreement. Backlog represents the estimated amounts under contractual agreements for products expected to be delivered to our customers under the contractual terms.
Adjusted EBITDA, Adjusted Operating Income (Loss), Adjusted Net Income Applicable to Common Shares, Adjusted Net Income Per Diluted Common Share and Backlog are measures used by management and, therefore, provided to investors to provide comparability between periods of underlying operational results. Adjusted EBITDA, Adjusted Operating Income (Loss), Adjusted Net Income Applicable to Common Shares, Adjusted Net Income Per Diluted Common Share and Backlog should not be considered in isolation or as substitutes for net income, operating income (loss), net income applicable to common shares, net income per diluted common share or revenue determined in accordance with generally accepted accounting principles in the United States. The non-GAAP financial measures and reconciliations thereof to the most directly comparable measures prepared in accordance with generally accepted accounting principles are included in the Press Release furnished as Exhibit 99.1 hereto and the Supplemental Presentation attached hereto as Exhibit 99.2.
The information in this Item 2.02, and in Exhibit 99.1 and Exhibit 99.2 which are attached to this Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that Section, nor shall they be deemed incorporated by reference in any registration statement or other filing under the Securities Act of 1933, as amended, or the Exchange Act, except in the event that NCI expressly states that such information is to be considered “filed” under the Exchange Act or incorporates it by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) | Exhibits. | |
Exhibit Number | Description | |
99.1 | ||
99.2 | ||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
NCI BUILDING SYSTEMS, INC. | |||
By: | /s/ Mark E. Johnson | ||
Name: | Mark E. Johnson | ||
Title: | Executive Vice President, Chief Financial Officer and Treasurer | ||
Date: June 5, 2018
Exhibit 99.1
NEWS RELEASE
NCI Building Systems Reports
Second Quarter 2018 Results
HOUSTON, TX, June 5, 2018 - NCI Building Systems, Inc. (NYSE: NCS) (“NCI” or the “Company”) today reported financial results for its second fiscal quarter ended April 29, 2018.
Second Quarter 2018 Financial and Operational Highlights:
• | Sales rose 8.7% to $457.1 million for the quarter, compared to $420.5 million in the prior year’s second quarter |
• | Gross profit was $104.1 million or 22.8% of sales, compared to $100.8 million or 24.0% of sales in the second quarter of 2017 |
• | The Company improved and replaced its debt structure, reducing its current effective cash interest rate from approximately 7.0% to 3.6% and extending the term to 2025 |
• | Net income was a loss of $5.7 million for the quarter, compared to net income of $17.0 million in the prior year’s second quarter. Adjusted Net Income was $16.4 million this quarter, compared to $11.5 million in the prior year’s second quarter |
• | Net income per diluted common share for the quarter was a loss of $0.09, compared to income of $0.24 in the second quarter of fiscal 2017. There were several previously announced special items, which while positive for future operations including the debt refinancing and the sale of CENTRIA’s China operations, resulted in charges during the quarter. Adjusted Net Income was $0.25 per diluted common share, an increase of 56.3%, compared to $0.16 in the prior year’s second quarter |
Fiscal Three Months Ended | |||||||
April 29, 2018 | April 30, 2017 | ||||||
Net income (loss) per diluted common share, GAAP basis | $ | (0.09 | ) | $ | 0.24 | ||
Loss on extinguishment of debt | 0.33 | 0.00 | |||||
Loss on disposition of a business | 0.10 | 0.00 | |||||
Gain on insurance recovery | 0.00 | (0.13 | ) | ||||
Other items and related tax effect of adjustments | (0.09 | ) | 0.05 | ||||
Adjusted net income per diluted common share | $ | 0.25 | $ | 0.16 | |||
• | Adjusted EBITDA was $39.7 million, or 8.7% of revenues, for the quarter, compared to $37.0 million, or 8.8% of revenues, in the prior year’s second quarter |
• | Total consolidated backlog increased to $631.6 million at quarter end, up 10.8% year-over-year |
“We are pleased with the strong second quarter performance of all our business segments, as we successfully maintained our commercial discipline in a rising cost environment,” said Donald R. Riley, President and Chief Executive Officer. “NCI’s solid backlog and bookings continue to support our favorable outlook for 2018, and our key economic indicators continue to track to our expectations for year-over-year growth.
We are making good progress executing on our advanced manufacturing and continuous improvement initiatives. We believe the successful execution of these initiatives and the visibility provided by our backlog will position NCI well for the remainder of this fiscal year. Additionally during the quarter, we executed on two key priorities for the Company in improving our capital structure and completing the sale of our CENTRIA China business. These actions have simplified our operations, reduced risk and strengthened our balance sheet.”
Second Quarter 2018 Results
Second quarter of fiscal 2018 sales increased to $457.1 million, up 8.7%, from $420.5 million in last year's second fiscal quarter, primarily due to continued commercial discipline in the pass-through of higher material costs across our segments, combined with volume growth in both the Metal Components and Insulated Metal Panel segments and growth in package volumes in the Metal Coil Coating segment.
Gross profit increased 3.2% to $104.1 million this quarter, compared to $100.8 million in the second quarter of fiscal 2017 and was up sequentially from $91.9 million in the first quarter of fiscal 2018. Gross profit margins were 22.8% for the second quarter of fiscal 2018, compared to 24.0% in the second quarter of fiscal 2017 and was up sequentially 100 basis points from 21.8% in the first quarter of fiscal 2018. Gross margins in the second quarter were lower than the second quarter of the prior year primarily as a result of less favorable product mix in the IMP segment and incremental manufacturing costs in the Metal Coil Coating segment related to ramping-up additional shifts in preparation for higher volumes expected in the second half of fiscal 2018.
Engineering, selling, general and administrative (“ESG&A”) expenses were $74.4 million for the quarter, compared to $75.1 million in the prior year’s second fiscal quarter. As a percentage of revenues, ESG&A expenses were 16.3% in the fiscal 2018 second quarter compared to 17.9% in the prior year’s second fiscal quarter. The year-over-year decline in ESG&A expenses reflected the Company’s ongoing cost reduction initiatives, partially offset by the impact of wage and information technology cost increases.
Operating income for the quarter was $19.0 million, including a previously disclosed $6.7 million charge related to the sale of CENTRIA’s manufacturing facility in China, compared to $32.5 million in the second quarter 2017. Adjusted Operating Income, a non-GAAP financial measure which excludes certain special items, increased 15.3% to $27.3 million in the current quarter, compared to $23.6 million in the same period last year.
Net loss applicable to common shares in the quarter was $5.7 million, or $0.09 per diluted common share, compared to net income of $16.9 million, or $0.24 per diluted common share in the prior year’s second quarter. Income was impacted by the following special items: a $21.9 million charge related to the extinguishment and refinancing of a portion of the Company’s debt; a $6.7 million charge on the disposition of CENTRIA’s China operations; a $1.1 million charge for strategic development and acquisition related costs and $0.5 million of restructuring and impairment charges, partially offset by the associated tax effect of these items. The second quarter of fiscal 2017 included a $9.6 million special gain on an insurance recovery, partially offset by the related tax effects. Excluding the impact of these special items, second quarter 2018 Adjusted Net Income, a non-GAAP measure, was $16.4 million, or $0.25 per diluted common share, compared to $11.5 million, or $0.16 per diluted common share, in the prior year’s second quarter.
Adjusted EBITDA, a non-GAAP measure, defined in accordance with the Company's credit agreement as earnings before interest, taxes, depreciation and amortization, and certain other cash and non-cash items, was $39.7 million this quarter, compared to $37.0 million in the prior year’s second quarter. Please see the reconciliation of Adjusted Operating Income, Adjusted Net Income and Adjusted EBITDA in the accompanying financial tables.
Cash and cash equivalents at the end of the second quarter were $35.3 million, compared to $49.7 million at the end of the second quarter of fiscal 2017. Cash and cash equivalents increased sequentially $22.9 million from $12.4 million at the end of the first quarter of fiscal 2018 due to operating earnings and improved utilization of accounts payable. NCI’s net debt leverage ratio (net debt/EBITDA) at the end of the second quarter was 2.2x. As of April 29, 2018, the Company’s $150.0 million asset based lending (ABL) facility remained undrawn.
Second Quarter 2018 Segment Performance
Sales in the Engineered Building Systems segment were $167.2 million in the second quarter of fiscal 2018, compared to $162.6 million in the prior year period, primarily as a result of commercial discipline passing through higher input costs, partially offset by lower tonnage volumes. Operating income increased 34.5% to $9.3 million this quarter, compared to $6.9 million in the prior year’s second quarter. Adjusted Operating Income, a non-GAAP measure, increased 32.3% to $9.6 million this quarter, compared to $7.2 million in the second quarter 2017. Operating margins increased as a result of reduced ESG&A costs and an emphasis on order profitability over volumes.
The Metal Components segment generated $168.5 million in sales during the quarter, an increase of 8.8% from $154.9 million in the prior year’s second quarter, led by higher external volumes across the segment and the disciplined pass-through of increasing input costs, despite a less favorable mix in the overhead doors product lines. Operating income was $22.1 million in the second fiscal quarter of 2018 compared to $20.0 million in the same period last year. Adjusted Operating Income was $22.2 million in the quarter, compared to $19.7 million in the prior year’s second quarter. The Metal Components segment’s operating margins increased as a result of improved operating leverage on higher volumes.
The Insulated Metal Panels segment generated $113.4 million in sales during the quarter, an increase of 10.2% from $102.9 million in the prior year’s second quarter, as a result of commercial discipline emphasizing project profitability over volume in a period
of increasing input costs. Operating income was $1.5 million for the quarter compared to $19.4 million in the second quarter of 2017. The second quarter of fiscal 2018 had a $6.7 million special charge for the disposition of the CENTRIA’s China business and the second quarter of fiscal 2017 had a special gain of $9.2 million for an insurance recovery. Adjusted Operating Income was $8.4 million, compared to $10.4 million in the same period last year. The IMP segment’s operating margins decreased from the prior year as a result of the special items noted above and a change in product mix. The reduction in year-over-year margins was expected due to the unusually large amount of higher margin architectural panels shipped in the prior year quarter.
Sales in the Metal Coil Coating segment were $95.2 million during the second quarter of fiscal 2018, an increase of 9.8% from $86.7 million in the prior year’s second quarter, as a result of higher volumes in package sales and the pass-through of rising material costs. Operating income and Adjusted Operating Income were both $7.1 million in the second quarter of fiscal 2018 compared to $6.2 million in the second quarter of fiscal 2017, respectively. Operating margins in the Metal Coil Coating segment improved as a result of lower ESG&A costs, partially offset by lower manufacturing efficiency due to ramping-up additional shifts to support increasing activity levels.
Market Commentary
The key leading indicators that NCI follows and that typically have the most meaningful correlation to nonresidential low-rise construction starts are the American Institute of Architects’ (“AIA”) Architecture Mixed Use Index, the Dodge Residential single family starts and the Conference Board Leading Economic Index (“LEI”). Historically, there has been a very high correlation to the volume of nonresidential low-rise construction starts when the three leading indicators are combined and then seasonally adjusted. Based on the combined forward projection of these metrics, and assuming a 9- to 14-month historical lag for each metric, the Company continues to expect new nonresidential low-rise construction starts in the Company’s addressable market for its legacy businesses to grow 2.0% to 4.0% in fiscal 2018.
Guidance
Looking ahead, NCI’s key economic indicators are tracking to expectation and year-over-year growth in both bookings and backlog support the Company’s favorable outlook for fiscal 2018. For the third quarter of fiscal 2018, NCI expects revenues to be in the range of $525 to $545 million and Adjusted EBITDA to be in the range of $56 to $66 million.
The Company has provided additional detailed financial guidance in the quarterly supplemental presentation that can be found at www.ncibuildingsystems.com under the “Investors” section.
Conference Call Information
The NCI Building Systems, Inc. second quarter fiscal 2018 conference call is scheduled for Wednesday, June 6, 2018, at 9:00 a.m. ET (8:00 a.m. CT). Please dial 1-412-902-0003 or 1-877-407-0672 (toll-free) 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 telephone replay, please dial 1-201-612-7415 or 1-877-660-6853 (toll-free) and the passcode 13680060# when prompted. The taped replay will be available two hours after the call through June 20, 2018. A replay of the webcast will be available on the Company’s website under the Event Calendar, Calls & Webcast section of the Investor Relations page of the NCI website for approximately 90 days.
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, Canada and Mexico with additional sales and distribution offices throughout the United States and Canada. For more information visit www.ncibuildingsystems.com.
Contact:
K. Darcey Matthews
Vice President, Investor Relations
281-897-7785
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," "anticipate," "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. Such forward-looking statements may include, but are not limited to, statements concerning our market commentary and expectations for new nonresidential low-rise construction starts in fiscal 2018
and our financial outlook and guidance, including our third quarter fiscal 2018 forecasted revenues and Adjusted EBITDA and other consolidated financial performance guidance. Among the factors that could cause actual results to differ materially include, but are not limited to, industry cyclicality and seasonality; adverse weather conditions; challenging economic conditions affecting the nonresidential construction industry; volatility in the U.S. economy and abroad, generally, and in the credit markets; our substantial indebtedness and our ability to incur substantially more indebtedness; our ability to generate the significant cash flow required to service our existing debt, including our secured term loan facility, and obtain future financing; our ability to comply with the financial tests and covenants in our existing and future debt obligations; operational limitations or restrictions in connection with our debt; increases in interest rates; recognition of asset impairment charges; commodity price increases and/or limited availability of raw materials, including steel; interruptions in our supply chain; our ability to make strategic acquisitions accretive to earnings; retention and replacement of management and other key personnel; enforcement and obsolescence of intellectual property rights; fluctuations in customer demand; costs related to environmental clean-ups and liabilities; competitive activity and pricing pressure; increases in energy prices; volatility of the Company's stock price; effect on the price of the Company's common stock of future sales of the Company's common stock held by our sponsor; substantial governance and other rights held by our sponsor; 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 us to liabilities and possible losses, which may not be covered by insurance; changes in laws or regulations, including the Dodd-Frank Act; the timing and amount of our stock repurchases; and costs and other effects of legal and administrative proceedings, settlements, investigations, claims and other matters. See also the “Risk Factors” in the Company's Annual Report on Form 10-K for the fiscal year ended October 29, 2017, and other risks described in documents subsequently filed by the Company from time to time with the SEC, which 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. The Company expressly disclaims any obligation to release publicly any updates or revisions to these forward-looking statements, whether as a result of new information, future events, or otherwise.
NCI BUILDING SYSTEMS, INC. |
CONSOLIDATED STATEMENTS OF OPERATIONS |
(In thousands, except per share data) |
(Unaudited) |
Fiscal Three Months Ended | Fiscal Six Months Ended | ||||||||||||||
April 29, 2018 | April 30, 2017 | April 29, 2018 | April 30, 2017 | ||||||||||||
Sales | $ | 457,069 | $ | 420,464 | $ | 878,418 | $ | 812,167 | |||||||
Cost of sales | 352,986 | 319,625 | 682,418 | 627,377 | |||||||||||
Gross profit | 104,083 | 100,839 | 196,000 | 184,790 | |||||||||||
22.8 | % | 24.0 | % | 22.3 | % | 22.8 | % | ||||||||
Engineering, selling, general and administrative expenses | 74,406 | 75,124 | 149,192 | 144,164 | |||||||||||
Intangible asset amortization | 2,413 | 2,405 | 4,825 | 4,810 | |||||||||||
Restructuring and impairment charges | 488 | 315 | 1,582 | 2,578 | |||||||||||
Strategic development and acquisition related costs | 1,134 | 124 | 1,861 | 481 | |||||||||||
Loss on disposition of business | 6,686 | — | 6,686 | — | |||||||||||
Gain on insurance recovery | — | (9,601 | ) | — | (9,601 | ) | |||||||||
Income from operations | 18,956 | 32,472 | 31,854 | 42,358 | |||||||||||
Interest income | 37 | 138 | 70 | 144 | |||||||||||
Interest expense | (4,849 | ) | (7,479 | ) | (12,341 | ) | (14,365 | ) | |||||||
Foreign exchange (loss) gain | (305 | ) | 127 | 166 | 50 | ||||||||||
Loss on extinguishment of debt | (21,875 | ) | — | (21,875 | ) | — | |||||||||
Other income, net | 270 | 322 | 727 | 708 | |||||||||||
Income (loss) before income taxes | (7,766 | ) | 25,580 | (1,399 | ) | 28,895 | |||||||||
(Benefit) provision for income taxes | (2,082 | ) | 8,606 | (964 | ) | 9,882 | |||||||||
26.8 | % | 33.6 | % | 68.9 | % | 34.2 | % | ||||||||
Net income (loss) | $ | (5,684 | ) | $ | 16,974 | $ | (435 | ) | $ | 19,013 | |||||
Net income allocated to participating securities | — | (115 | ) | — | (131 | ) | |||||||||
Net income (loss) applicable to common shares | $ | (5,684 | ) | $ | 16,859 | $ | (435 | ) | $ | 18,882 | |||||
Income (loss) per common share: | |||||||||||||||
Basic | $ | (0.09 | ) | $ | 0.24 | $ | (0.01 | ) | $ | 0.27 | |||||
Diluted | $ | (0.09 | ) | $ | 0.24 | $ | (0.01 | ) | $ | 0.27 | |||||
Weighted average number of common shares outstanding: | |||||||||||||||
Basic | 66,210 | 70,988 | 66,311 | 70,933 | |||||||||||
Diluted | 66,210 | 71,122 | 66,311 | 71,107 | |||||||||||
Increase in sales | 8.7 | % | 13.0 | % | 8.2 | % | 9.4 | % | |||||||
Engineering, selling, general and administrative expenses percentage | 16.3 | % | 17.9 | % | 17.0 | % | 17.8 | % | |||||||
NCI BUILDING SYSTEMS, INC. |
CONSOLIDATED BALANCE SHEETS |
(In thousands) |
(Unaudited) |
April 29, 2018 | October 29, 2017 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 35,335 | $ | 65,658 | |||
Restricted cash | 177 | 136 | |||||
Accounts receivable, net | 180,393 | 199,897 | |||||
Inventories, net | 221,369 | 198,296 | |||||
Income taxes receivable | 6,439 | 3,617 | |||||
Investments in debt and equity securities, at market | 6,332 | 6,481 | |||||
Prepaid expenses and other | 36,551 | 31,359 | |||||
Assets held for sale | 10,102 | 5,582 | |||||
Total current assets | 496,698 | 511,026 | |||||
Property, plant and equipment, net | 221,398 | 226,995 | |||||
Goodwill | 148,291 | 148,291 | |||||
Intangible assets, net | 132,338 | 137,148 | |||||
Deferred income taxes | 2,513 | 2,544 | |||||
Other assets, net | 5,369 | 5,108 | |||||
Total assets | $ | 1,006,607 | $ | 1,031,112 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Note payable | $ | 1,656 | $ | 440 | |||
Accounts payable | 157,819 | 147,772 | |||||
Accrued compensation and benefits | 49,850 | 59,189 | |||||
Accrued interest | 1,464 | 6,414 | |||||
Other accrued expenses | 104,475 | 102,233 | |||||
Total current liabilities | 315,264 | 316,048 | |||||
Long-term debt, net of deferred financing costs of $6,043 and $6,857 | 408,957 | 387,290 | |||||
Deferred income taxes | 1,928 | 4,297 | |||||
Other long-term liabilities | 18,134 | 18,230 | |||||
Total long-term liabilities | 429,019 | 409,817 | |||||
Common stock | 663 | 687 | |||||
Additional paid-in capital | 521,190 | 562,277 | |||||
Accumulated deficit | (249,832 | ) | (248,046 | ) | |||
Accumulated other comprehensive loss, net | (7,555 | ) | (7,531 | ) | |||
Treasury stock, at cost | (2,142 | ) | (2,140 | ) | |||
Total stockholders’ equity | 262,324 | 305,247 | |||||
Total liabilities and stockholders’ equity | $ | 1,006,607 | $ | 1,031,112 | |||
NCI BUILDING SYSTEMS, INC. |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
(In thousands) |
(Unaudited) |
Fiscal Six Months Ended | |||||||
April 29, 2018 | April 30, 2017 | ||||||
Cash flows from operating activities: | |||||||
Net income (loss) | $ | (435 | ) | $ | 19,013 | ||
Adjustments to reconcile net income (loss) to net cash from operating activities: | |||||||
Depreciation and amortization | 20,800 | 20,378 | |||||
Amortization of deferred financing costs | 781 | 954 | |||||
Loss on extinguishment of debt | 21,875 | — | |||||
Share-based compensation expense | 7,868 | 5,862 | |||||
Gain on insurance recovery | — | (9,601 | ) | ||||
Loss on disposition of business | 6,192 | — | |||||
(Gains) losses on assets, net | (250 | ) | 262 | ||||
Provision for doubtful accounts | (44 | ) | 1,406 | ||||
Benefit for deferred income taxes | (1,676 | ) | (113 | ) | |||
Changes in operating assets and liabilities, net of effect of acquisitions: | |||||||
Accounts receivable | 17,060 | 12,232 | |||||
Inventories | (24,920 | ) | (8,617 | ) | |||
Income taxes | (2,822 | ) | 982 | ||||
Prepaid expenses and other | (4,182 | ) | (1,875 | ) | |||
Accounts payable | 12,686 | (21,737 | ) | ||||
Accrued expenses | (12,016 | ) | (11,068 | ) | |||
Other, net | (931 | ) | (189 | ) | |||
Net cash provided by operating activities | 39,986 | 7,889 | |||||
Cash flows from investing activities: | |||||||
Capital expenditures | (16,897 | ) | (11,556 | ) | |||
Proceeds from sale of property, plant and equipment | 2,678 | 2,533 | |||||
Business disposition, net | (4,415 | ) | — | ||||
Proceeds from insurance | — | 420 | |||||
Net cash used in investing activities | (18,634 | ) | (8,603 | ) | |||
Cash flows from financing activities: | |||||||
(Deposit) refund of restricted cash | (41 | ) | 240 | ||||
Proceeds from stock options exercised | 1,040 | 1,196 | |||||
Proceeds from ABL facility | 65,000 | 35,000 | |||||
Payments on ABL facility | (65,000 | ) | (35,000 | ) | |||
Proceeds from term loan | 415,000 | — | |||||
Payments on term loan | (144,147 | ) | (10,000 | ) | |||
Payments on senior notes | (265,470 | ) | — | ||||
Payments on note payable | (441 | ) | (458 | ) | |||
Payments of financing costs | (6,275 | ) | — | ||||
Payments related to tax withholding for share-based compensation | (4,612 | ) | (2,389 | ) | |||
Purchases of treasury stock | (46,705 | ) | (3,533 | ) | |||
Net cash used in financing activities | (51,651 | ) | (14,944 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | (24 | ) | (63 | ) | |||
Net decrease in cash and cash equivalents | (30,323 | ) | (15,721 | ) | |||
Cash and cash equivalents at beginning of period | 65,658 | 65,403 | |||||
Cash and cash equivalents at end of period | $ | 35,335 | $ | 49,682 | |||
NCI BUILDING SYSTEMS, INC. |
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS |
ADJUSTED NET INCOME PER DILUTED COMMON SHARE AND NET INCOME (LOSS) COMPARISON |
(In thousands, except per share data) |
(Unaudited) |
Fiscal Three Months Ended | Fiscal Six Months Ended | ||||||||||||||
April 29, 2018 | April 30, 2017 | April 29, 2018 | April 30, 2017 | ||||||||||||
Net income (loss) per diluted common share, GAAP basis | $ | (0.09 | ) | $ | 0.24 | $ | (0.01 | ) | $ | 0.27 | |||||
Loss on extinguishment of debt | 0.33 | — | 0.33 | — | |||||||||||
Loss on disposition of business | 0.10 | — | 0.10 | — | |||||||||||
Restructuring and impairment charges | 0.01 | 0.00 | 0.02 | 0.04 | |||||||||||
Strategic development and acquisition related costs | 0.02 | 0.00 | 0.03 | 0.01 | |||||||||||
Acceleration of CEO retirement benefits | — | — | 0.07 | — | |||||||||||
Gain on insurance recovery | — | (0.13 | ) | — | (0.14 | ) | |||||||||
Tax effect of applicable non-GAAP adjustments(1) | (0.12 | ) | 0.05 | (0.15 | ) | 0.03 | |||||||||
Adjusted net income per diluted common share(2) | $ | 0.25 | $ | 0.16 | $ | 0.39 | $ | 0.21 | |||||||
Fiscal Three Months Ended | Fiscal Six Months Ended | ||||||||||||||
April 29, 2018 | April 30, 2017 | April 29, 2018 | April 30, 2017 | ||||||||||||
Net income (loss) applicable to common shares, GAAP basis | $ | (5,684 | ) | $ | 16,859 | $ | (435 | ) | $ | 18,882 | |||||
Loss on extinguishment of debt | 21,875 | — | 21,875 | — | |||||||||||
Loss on disposition of business | 6,686 | — | 6,686 | — | |||||||||||
Restructuring and impairment charges | 488 | 315 | 1,582 | 2,578 | |||||||||||
Strategic development and acquisition related costs | 1,134 | 124 | 1,861 | 481 | |||||||||||
Acceleration of CEO retirement benefits | — | — | 4,600 | — | |||||||||||
Gain on insurance recovery | — | (9,601 | ) | — | (9,601 | ) | |||||||||
Other, net | — | 328 | (323 | ) | 328 | ||||||||||
Tax effect of applicable non-GAAP adjustments(1) | (8,059 | ) | 3,445 | (9,883 | ) | 2,423 | |||||||||
Adjusted net income applicable to common shares(2) | $ | 16,440 | $ | 11,470 | $ | 25,963 | $ | 15,091 | |||||||
(1) | The Company calculated the tax effect of non-GAAP adjustments by applying the applicable statutory tax rate for the period to each applicable non-GAAP item. |
(2) | The Company discloses a tabular comparison of Adjusted net income per diluted common share and Adjusted net income applicable to common shares, which are non-GAAP measures, because they are referred to in the text of our press releases and are instrumental in comparing the results from period to period. Adjusted net income per diluted common share and Adjusted net income applicable to common shares should not be considered in isolation or as a substitute for net income per diluted common share and net income applicable to common shares as reported on the face of our consolidated statements of operations. |
NCI Building Systems, Inc. | |||||||||||||||||||||||||
Business Segments | |||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||
Fiscal Three Months Ended | Fiscal Six Months Ended | ||||||||||||||||||||||||
April 29, 2018 | April 30, 2017 | April 29, 2018 | April 30, 2017 | ||||||||||||||||||||||
% of Total Sales | % of Total Sales | % Change | % of Total Sales | % of Total Sales | % Change | ||||||||||||||||||||
Total Sales | |||||||||||||||||||||||||
Engineered Building Systems | $ | 167,240 | 31 | $ | 162,624 | 32 | 2.8 | % | $ | 324,204 | 31 | $ | 313,887 | 32 | 3.3 | % | |||||||||
Metal Components | 168,456 | 31 | 154,895 | 31 | 8.8 | % | 315,288 | 30 | 289,068 | 30 | 9.1 | % | |||||||||||||
Insulated Metal Panels | 113,413 | 21 | 102,937 | 20 | 10.2 | % | 224,207 | 21 | 198,132 | 20 | 13.2 | % | |||||||||||||
Metal Coil Coating | 95,190 | 17 | 86,729 | 17 | 9.8 | % | 183,533 | 18 | 175,069 | 18 | 4.8 | % | |||||||||||||
Total sales | 544,299 | 100 | 507,185 | 100 | 7.3 | % | 1,047,232 | 100 | 976,156 | 100 | 7.3 | % | |||||||||||||
Less: Intersegment sales | (87,230 | ) | 16 | (86,721 | ) | 17 | 0.6 | % | (168,814 | ) | 16 | (163,989 | ) | 17 | 2.9 | % | |||||||||
Total net sales | $ | 457,069 | 84 | $ | 420,464 | 83 | 8.7 | % | $ | 878,418 | 84 | $ | 812,167 | 83 | 8.2 | % | |||||||||
% of Sales | % of Sales | % of Sales | % of Sales | ||||||||||||||||||||||
External Sales | |||||||||||||||||||||||||
Engineered Building Systems | $ | 157,136 | 34 | $ | 154,456 | 37 | 1.7 | % | $ | 305,424 | 35 | $ | 299,477 | 37 | 2.0 | % | |||||||||
Metal Components | 147,661 | 32 | 133,290 | 31 | 10.8 | % | 275,189 | 31 | 248,847 | 30 | 10.6 | % | |||||||||||||
Insulated Metal Panels | 99,792 | 22 | 86,773 | 21 | 15.0 | % | 197,305 | 23 | 169,214 | 21 | 16.6 | % | |||||||||||||
Metal Coil Coating | 52,480 | 12 | 45,945 | 11 | 14.2 | % | 100,500 | 11 | 94,629 | 12 | 6.2 | % | |||||||||||||
Total external sales | $ | 457,069 | 100 | $ | 420,464 | 100 | 8.7 | % | $ | 878,418 | 100 | $ | 812,167 | 100 | 8.2 | % | |||||||||
Operating Income | |||||||||||||||||||||||||
Engineered Building Systems | $ | 9,271 | 6 | $ | 6,894 | 4 | 34.5 | % | $ | 17,534 | 5 | $ | 13,397 | 4 | 30.9 | % | |||||||||
Metal Components | 22,082 | 13 | 19,997 | 13 | 10.4 | % | 39,171 | 12 | 32,373 | 11 | 21.0 | % | |||||||||||||
Insulated Metal Panels | 1,540 | 1 | 19,377 | 19 | -92.1 | % | 8,611 | 4 | 21,569 | 11 | -60.1 | % | |||||||||||||
Metal Coil Coating | 7,129 | 7 | 6,227 | 7 | 14.5 | % | 12,505 | 7 | 12,933 | 7 | -3.3 | % | |||||||||||||
Corporate | (21,066 | ) | - | (20,023 | ) | - | 5.2 | % | (45,967 | ) | - | (37,914 | ) | - | 21.2 | % | |||||||||
Total operating income | $ | 18,956 | 4 | $ | 32,472 | 8 | -41.6 | % | $ | 31,854 | 4 | $ | 42,358 | 5 | -24.8 | % | |||||||||
Adjusted Operating Income (1) | |||||||||||||||||||||||||
Engineered Building Systems | $ | 9,551 | 6 | $ | 7,217 | 4 | 32.3 | % | $ | 19,123 | 6 | $ | 15,630 | 5 | 22.3 | % | |||||||||
Metal Components | 22,202 | 13 | 19,706 | 13 | 12.7 | % | 37,888 | 12 | 32,387 | 11 | 17.0 | % | |||||||||||||
Insulated Metal Panels | 8,375 | 7 | 10,387 | 10 | -19.4 | % | 17,030 | 8 | 12,579 | 6 | 35.4 | % | |||||||||||||
Metal Coil Coating | 7,129 | 7 | 6,227 | 7 | 14.5 | % | 12,505 | 7 | 12,933 | 7 | -3.3 | % | |||||||||||||
Corporate | (19,993 | ) | - | (19,899 | ) | - | 0.5 | % | (39,963 | ) | - | (37,384 | ) | - | 6.9 | % | |||||||||
Total adjusted operating income | $ | 27,264 | 6 | $ | 23,638 | 6 | 15.3 | % | $ | 46,583 | 5 | $ | 36,145 | 4 | 28.9 | % | |||||||||
Adjusted EBITDA (2) | |||||||||||||||||||||||||
Engineered Building Systems | $ | 11,786 | 7 | $ | 9,377 | 6 | 25.7 | % | $ | 24,168 | 7 | $ | 20,025 | 6 | 20.7 | % | |||||||||
Metal Components | 23,713 | 14 | 21,060 | 14 | 12.6 | % | 41,028 | 13 | 35,103 | 12 | 16.9 | % | |||||||||||||
Insulated Metal Panels | 12,933 | 11 | 14,985 | 15 | -13.7 | % | 25,703 | 11 | 21,604 | 11 | 19.0 | % | |||||||||||||
Metal Coil Coating | 9,214 | 10 | 8,236 | 9 | 11.9 | % | 16,648 | 9 | 17,079 | 10 | -2.5 | % | |||||||||||||
Corporate | (17,976 | ) | - | (16,689 | ) | - | 7.7 | % | (35,002 | ) | - | (30,669 | ) | - | 14.1 | % | |||||||||
Total adjusted EBIDTA | $ | 39,670 | 9 | $ | 36,969 | 9 | 7.3 | % | $ | 72,545 | 8 | $ | 63,142 | 8 | 14.9 | % | |||||||||
(1) | The Company discloses a tabular comparison of Adjusted operating income (loss), which is a non-GAAP measure, because it is instrumental in comparing the results from period to period. Adjusted operating income (loss) should not be considered in isolation or as a substitute for operating income (loss) as reported on the face of our statements of operations. |
(2) | The Company's Term Loan Credit Agreement defines Adjusted EBITDA. Adjusted EBITDA excludes non-cash charges for goodwill and other asset impairments and stock compensation as well as certain special charges. As such, the historical information is presented in accordance with the definition above. The Company's Asset-Based Lending facility has substantially the same definition of Adjusted EBITDA. The Company is disclosing Adjusted EBITDA, which is a non-GAAP measure, because it is used by management and provided to investors to provide comparability of underlying operational results. |
NCI BUILDING SYSTEMS, INC. | |||||||||||||||||||||
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS | |||||||||||||||||||||
(In thousands) | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
Consolidated | |||||||||||||||||||||
Fiscal Three Months Ended | Fiscal Six Months Ended | Trailing Twelve Months | |||||||||||||||||||
July 30, 2017 | October 29, 2017 | January 28, 2018 | April 29, 2018 | April 29, 2018 | April 29, 2018 | ||||||||||||||||
Total Net Sales | $ | 469,385 | $ | 488,726 | $ | 421,349 | $ | 457,069 | $ | 878,418 | $ | 1,836,529 | |||||||||
Operating Income, GAAP | 34,097 | 33,325 | 12,898 | 18,956 | 31,854 | 99,276 | |||||||||||||||
Restructuring and impairment | 1,009 | 1,709 | 1,094 | 488 | 1,582 | 4,300 | |||||||||||||||
Strategic development and acquisition related costs | 1,297 | 193 | 727 | 1,134 | 1,861 | 3,351 | |||||||||||||||
Loss on disposition of business | — | — | — | 6,686 | 6,686 | 6,686 | |||||||||||||||
Acceleration of CEO retirement benefits | — | — | 4,600 | — | 4,600 | 4,600 | |||||||||||||||
Gain on insurance recovery | (148 | ) | — | — | — | — | (148 | ) | |||||||||||||
Unreimbursed business interruption costs | 235 | 28 | — | — | — | 263 | |||||||||||||||
Goodwill impairment | — | 6,000 | — | — | — | 6,000 | |||||||||||||||
Adjusted Operating Income | 36,490 | 41,255 | 19,319 | 27,264 | 46,583 | 124,328 | |||||||||||||||
Other income and expense | 1,322 | (62 | ) | 928 | (34 | ) | 894 | 2,154 | |||||||||||||
Depreciation and amortization | 10,278 | 10,664 | 10,358 | 10,442 | 20,800 | 41,742 | |||||||||||||||
Share-based compensation expense | 2,284 | 2,084 | 2,270 | 1,998 | 4,268 | 8,636 | |||||||||||||||
Adjusted EBITDA | $ | 50,374 | $ | 53,941 | $ | 32,875 | $ | 39,670 | $ | 72,545 | $ | 176,860 | |||||||||
Year over year growth, Total Net Sales | 1.5 | % | 1.8 | % | 7.6 | % | 8.7 | % | 8.2 | % | 4.7 | % | |||||||||
Operating Income Margin | 7.3 | % | 6.8 | % | 3.1 | % | 4.1 | % | 3.6 | % | 5.4 | % | |||||||||
Adjusted Operating Income Margin | 7.8 | % | 8.4 | % | 4.6 | % | 6.0 | % | 5.3 | % | 6.8 | % | |||||||||
Adjusted EBITDA Margin | 10.7 | % | 11.0 | % | 7.8 | % | 8.7 | % | 8.3 | % | 9.6 | % | |||||||||
Fiscal Three Months Ended | Fiscal Six Months Ended | Trailing Twelve Months | |||||||||||||||||||
July 31, 2016 | October 30, 2016 | January 29, 2017 | April 30, 2017 | April 30, 2017 | April 30, 2017 | ||||||||||||||||
Total Net Sales | $ | 462,353 | $ | 480,314 | $ | 391,703 | $ | 420,464 | $ | 812,167 | $ | 1,754,834 | |||||||||
Operating Income, GAAP | 43,535 | 39,391 | 9,886 | 32,472 | 42,358 | 125,284 | |||||||||||||||
Restructuring and impairment | 778 | 815 | 2,264 | 315 | 2,579 | 4,172 | |||||||||||||||
Strategic development and acquisition related costs | 819 | 590 | 357 | 124 | 481 | 1,890 | |||||||||||||||
(Gain) loss on sale of assets and asset recovery | (52 | ) | 62 | — | 137 | 137 | 147 | ||||||||||||||
Gain on insurance recovery | — | — | — | (9,601 | ) | (9,601 | ) | (9,601 | ) | ||||||||||||
Unreimbursed business interruption costs | — | — | — | 191 | 191 | 191 | |||||||||||||||
Adjusted Operating Income | 45,080 | 40,858 | 12,507 | 23,638 | 36,145 | 122,083 | |||||||||||||||
Other income and expense | (508 | ) | (192 | ) | 309 | 449 | 758 | 58 | |||||||||||||
Depreciation and amortization | 10,595 | 9,815 | 10,315 | 10,062 | 20,377 | 40,787 | |||||||||||||||
Share-based compensation expense | 2,661 | 3,181 | 3,042 | 2,820 | 5,862 | 11,704 | |||||||||||||||
Adjusted EBITDA | $ | 57,828 | $ | 53,662 | $ | 26,173 | $ | 36,969 | $ | 63,142 | $ | 174,632 | |||||||||
Operating Income Margin | 9.4 | % | 8.2 | % | 2.5 | % | 7.7 | % | 5.2 | % | 7.1 | % | |||||||||
Adjusted Operating Income Margin | 9.8 | % | 8.5 | % | 3.2 | % | 5.6 | % | 4.5 | % | 7.0 | % | |||||||||
Adjusted EBITDA Margin | 12.5 | % | 11.2 | % | 6.7 | % | 8.8 | % | 7.8 | % | 10.0 | % | |||||||||
NCI BUILDING SYSTEMS, INC. | |||||||||||||||||||||
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS | |||||||||||||||||||||
(In thousands) | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
Engineered Building Systems | |||||||||||||||||||||
Fiscal Three Months Ended | Fiscal Six Months Ended | Trailing Twelve Months | |||||||||||||||||||
July 30, 2017 | October 29, 2017 | January 28, 2018 | April 29, 2018 | April 29, 2018 | April 29, 2018 | ||||||||||||||||
Total Sales | $ | 191,910 | $ | 188,183 | $ | 156,964 | $ | 167,240 | $ | 324,204 | $ | 704,297 | |||||||||
External Sales | 182,164 | 178,222 | 148,288 | 157,136 | 305,424 | 665,810 | |||||||||||||||
Operating Income, GAAP | 14,948 | 13,043 | 8,263 | 9,271 | 17,534 | 45,525 | |||||||||||||||
Restructuring and impairment | 941 | 695 | 1,136 | 280 | 1,416 | 3,052 | |||||||||||||||
Strategic development and acquisition related costs | — | — | 173 | — | 173 | 173 | |||||||||||||||
Adjusted Operating Income | 15,889 | 13,738 | 9,572 | 9,551 | 19,123 | 48,750 | |||||||||||||||
Other income and expense | 1,291 | (694 | ) | 733 | (88 | ) | 645 | 1,242 | |||||||||||||
Depreciation and amortization | 2,255 | 2,198 | 2,077 | 2,323 | 4,400 | 8,853 | |||||||||||||||
Adjusted EBITDA | $ | 19,435 | $ | 15,242 | $ | 12,382 | $ | 11,786 | $ | 24,168 | $ | 58,845 | |||||||||
Year over year growth, Total sales | 6.0 | % | (7.8 | )% | 3.8 | % | 2.8 | % | 3.3 | % | 0.7 | % | |||||||||
Year over year growth, External Sales | 3.8 | % | (9.3 | )% | 2.3 | % | 1.7 | % | 2.0 | % | (0.9 | )% | |||||||||
Operating Income Margin | 7.8 | % | 6.9 | % | 5.3 | % | 5.5 | % | 5.4 | % | 6.5 | % | |||||||||
Adjusted Operating Income Margin | 8.3 | % | 7.3 | % | 6.1 | % | 5.7 | % | 5.9 | % | 6.9 | % | |||||||||
Adjusted EBITDA Margin | 10.1 | % | 8.1 | % | 7.9 | % | 7.0 | % | 7.5 | % | 8.4 | % | |||||||||
Fiscal Three Months Ended | Fiscal Six Months Ended | Trailing Twelve Months | |||||||||||||||||||
July 31, 2016 | October 30, 2016 | January 29, 2017 | April 30, 2017 | April 30, 2017 | April 30, 2017 | ||||||||||||||||
Total Sales | $ | 181,029 | $ | 204,208 | $ | 151,263 | $ | 162,624 | $ | 313,887 | $ | 699,124 | |||||||||
External Sales | 175,471 | 196,596 | 145,021 | 154,456 | 299,477 | 671,544 | |||||||||||||||
Operating Income, GAAP | 19,561 | 22,830 | 6,503 | 6,894 | 13,397 | 55,788 | |||||||||||||||
Restructuring and impairment | 106 | 211 | 1,910 | 186 | 2,096 | 2,413 | |||||||||||||||
(Gain) loss on sale of assets and asset recovery | (52 | ) | 62 | — | 137 | 137 | 147 | ||||||||||||||
Adjusted Operating Income | 19,615 | 23,103 | 8,413 | 7,217 | 15,630 | 58,348 | |||||||||||||||
Other income and expense | (931 | ) | (362 | ) | (41 | ) | (125 | ) | (166 | ) | (1,459 | ) | |||||||||
Depreciation and amortization | 2,438 | 2,399 | 2,276 | 2,285 | 4,561 | 9,398 | |||||||||||||||
Adjusted EBITDA | $ | 21,122 | $ | 25,140 | $ | 10,648 | $ | 9,377 | $ | 20,025 | $ | 66,287 | |||||||||
Operating Income Margin | 10.8 | % | 11.2 | % | 4.3 | % | 4.2 | % | 4.3 | % | 8.0 | % | |||||||||
Adjusted Operating Income Margin | 10.8 | % | 11.3 | % | 5.6 | % | 4.4 | % | 5.0 | % | 8.3 | % | |||||||||
Adjusted EBITDA Margin | 11.7 | % | 12.3 | % | 7.0 | % | 5.8 | % | 6.4 | % | 9.5 | % | |||||||||
NCI BUILDING SYSTEMS, INC. | |||||||||||||||||||||
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS | |||||||||||||||||||||
(In thousands) | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
Metal Components | |||||||||||||||||||||
Fiscal Three Months Ended | Fiscal Six Months Ended | Trailing Twelve Months | |||||||||||||||||||
July 30, 2017 | October 29, 2017 | January 28, 2018 | April 29, 2018 | April 29, 2018 | April 29, 2018 | ||||||||||||||||
Total Sales | $ | 166,305 | $ | 181,288 | $ | 146,832 | $ | 168,456 | $ | 315,288 | $ | 662,881 | |||||||||
External Sales | 140,639 | 155,183 | 127,528 | 147,661 | 275,189 | 571,011 | |||||||||||||||
Operating Income, GAAP | 23,276 | 23,119 | 17,089 | 22,082 | 39,171 | 85,566 | |||||||||||||||
Restructuring and impairment | 60 | 69 | (1,403 | ) | 120 | (1,283 | ) | (1,154 | ) | ||||||||||||
Gain on insurance recovery | (148 | ) | — | — | — | — | (148 | ) | |||||||||||||
Adjusted Operating Income | 23,188 | 23,188 | 15,686 | 22,202 | 37,888 | 84,264 | |||||||||||||||
Other income and expense | 55 | 84 | 53 | 67 | 120 | 259 | |||||||||||||||
Depreciation and amortization | 1,266 | 1,422 | 1,576 | 1,444 | 3,020 | 5,708 | |||||||||||||||
Adjusted EBITDA | $ | 24,509 | $ | 24,694 | $ | 17,315 | $ | 23,713 | $ | 41,028 | $ | 90,231 | |||||||||
Year over year growth, Total sales | (0.1 | )% | 8.9 | % | 9.4 | % | 8.8 | % | 9.1 | % | 6.6 | % | |||||||||
Year over year growth, External Sales | 0.1 | % | 10.9 | % | 10.4 | % | 10.8 | % | 10.6 | % | 7.9 | % | |||||||||
Operating Income Margin | 14.0 | % | 12.8 | % | 11.6 | % | 13.1 | % | 12.4 | % | 12.9 | % | |||||||||
Adjusted Operating Income Margin | 13.9 | % | 12.8 | % | 10.7 | % | 13.2 | % | 12.0 | % | 12.7 | % | |||||||||
Adjusted EBITDA Margin | 14.7 | % | 13.6 | % | 11.8 | % | 14.1 | % | 13.0 | % | 13.6 | % | |||||||||
Fiscal Three Months Ended | Fiscal Six Months Ended | Trailing Twelve Months | |||||||||||||||||||
July 31, 2016 | October 30, 2016 | January 29, 2017 | April 30, 2017 | April 30, 2017 | April 30, 2017 | ||||||||||||||||
Total Sales | $ | 166,512 | $ | 166,532 | $ | 134,173 | $ | 154,895 | $ | 289,068 | $ | 622,112 | |||||||||
External Sales | 140,560 | 139,968 | 115,557 | 133,290 | 248,847 | 529,375 | |||||||||||||||
Operating Income, GAAP | 26,803 | 21,254 | 12,376 | 19,997 | 32,373 | 80,430 | |||||||||||||||
Restructuring and impairment | 202 | 103 | 305 | 129 | 434 | 739 | |||||||||||||||
Gain on insurance recovery | — | — | — | (420 | ) | (420 | ) | (420 | ) | ||||||||||||
Adjusted Operating Income | 27,005 | 21,357 | 12,681 | 19,706 | 32,387 | 80,749 | |||||||||||||||
Other income and expense | 92 | (27 | ) | 28 | 52 | 80 | 145 | ||||||||||||||
Depreciation and amortization | 1,365 | 1,406 | 1,334 | 1,302 | 2,636 | 5,407 | |||||||||||||||
Adjusted EBITDA | $ | 28,462 | $ | 22,736 | $ | 14,043 | $ | 21,060 | $ | 35,103 | $ | 86,301 | |||||||||
Operating Income Margin | 16.1 | % | 12.8 | % | 9.2 | % | 12.9 | % | 11.2 | % | 12.9 | % | |||||||||
Adjusted Operating Income Margin | 16.2 | % | 12.8 | % | 9.5 | % | 12.7 | % | 11.2 | % | 13.0 | % | |||||||||
Adjusted EBITDA Margin | 17.1 | % | 13.7 | % | 10.5 | % | 13.6 | % | 12.1 | % | 13.9 | % | |||||||||
NCI BUILDING SYSTEMS, INC. | |||||||||||||||||||||
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS | |||||||||||||||||||||
(In thousands) | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
Insulated Metal Panels | |||||||||||||||||||||
Fiscal Three Months Ended | Fiscal Six Months Ended | Trailing Twelve Months | |||||||||||||||||||
July 30, 2017 | October 29, 2017 | January 28, 2018 | April 29, 2018 | April 29, 2018 | April 29, 2018 | ||||||||||||||||
Total Sales | $ | 119,730 | $ | 123,542 | $ | 110,794 | $ | 113,413 | $ | 224,207 | $ | 467,479 | |||||||||
External Sales | 98,026 | 105,064 | 97,513 | 99,792 | 197,305 | 400,395 | |||||||||||||||
Operating Income, GAAP | 11,468 | 14,895 | 7,071 | 1,540 | 8,611 | 34,974 | |||||||||||||||
Restructuring and impairment | 8 | 683 | 1,284 | 88 | 1,372 | 2,063 | |||||||||||||||
Strategic development and acquisition related costs | — | 90 | 300 | 61 | 361 | 451 | |||||||||||||||
Loss on disposition of business | — | — | — | 6,686 | 6,686 | 6,686 | |||||||||||||||
Unreimbursed business interruption costs | 235 | 28 | — | — | — | 263 | |||||||||||||||
Adjusted Operating Income | 11,711 | 15,696 | 8,655 | 8,375 | 17,030 | 44,437 | |||||||||||||||
Other income and expense | (211 | ) | 356 | (273 | ) | 223 | (50 | ) | 95 | ||||||||||||
Depreciation and amortization | 4,516 | 4,742 | 4,388 | 4,335 | 8,723 | 17,981 | |||||||||||||||
Adjusted EBITDA | $ | 16,016 | $ | 20,794 | $ | 12,770 | $ | 12,933 | $ | 25,703 | $ | 62,513 | |||||||||
Year over year growth, Total sales | 13.3 | % | 12.3 | % | 16.4 | % | 10.2 | % | 13.2 | % | 13.0 | % | |||||||||
Year over year growth, External Sales | 4.2 | % | 13.4 | % | 18.3 | % | 15.0 | % | 16.6 | % | 12.5 | % | |||||||||
Operating Income Margin | 9.6 | % | 12.1 | % | 6.4 | % | 1.4 | % | 3.8 | % | 7.5 | % | |||||||||
Adjusted Operating Income Margin | 9.8 | % | 12.7 | % | 7.8 | % | 7.4 | % | 7.6 | % | 9.5 | % | |||||||||
Adjusted EBITDA Margin | 13.4 | % | 16.8 | % | 11.5 | % | 11.4 | % | 11.5 | % | 13.4 | % | |||||||||
Fiscal Three Months Ended | Fiscal Six Months Ended | Trailing Twelve Months | |||||||||||||||||||
July 31, 2016 | October 30, 2016 | January 29, 2017 | April 30, 2017 | April 30, 2017 | April 30, 2017 | ||||||||||||||||
Total Sales | $ | 105,694 | $ | 110,001 | $ | 95,195 | $ | 102,937 | $ | 198,132 | $ | 413,827 | |||||||||
External Sales | 94,059 | 92,648 | 82,441 | 86,773 | 169,214 | 355,921 | |||||||||||||||
— | |||||||||||||||||||||
Operating Income, GAAP | 8,911 | 7,513 | 2,192 | 19,377 | 21,569 | 37,993 | |||||||||||||||
Restructuring and impairment | 59 | 404 | — | — | — | 463 | |||||||||||||||
Strategic development and acquisition related costs | 9 | — | — | — | — | 9 | |||||||||||||||
Gain on insurance recovery | — | — | — | (9,181 | ) | (9,181 | ) | (9,181 | ) | ||||||||||||
Unreimbursed business interruption costs | — | — | — | 191 | 191 | 191 | |||||||||||||||
Adjusted Operating Income | 8,979 | 7,917 | 2,192 | 10,387 | 12,579 | 29,475 | |||||||||||||||
Other income and expense | 32 | 270 | 35 | 340 | 375 | 677 | |||||||||||||||
Depreciation and amortization | 4,357 | 3,926 | 4,392 | 4,258 | 8,650 | 16,933 | |||||||||||||||
Adjusted EBITDA | $ | 13,368 | $ | 12,113 | $ | 6,619 | $ | 14,985 | $ | 21,604 | $ | 47,085 | |||||||||
Operating Income Margin | 8.4 | % | 6.8 | % | 2.3 | % | 18.8 | % | 10.9 | % | 9.2 | % | |||||||||
Adjusted Operating Income Margin | 8.5 | % | 7.2 | % | 2.3 | % | 10.1 | % | 6.3 | % | 7.1 | % | |||||||||
Adjusted EBITDA Margin | 12.6 | % | 11.0 | % | 7.0 | % | 14.6 | % | 10.9 | % | 11.4 | % | |||||||||
NCI BUILDING SYSTEMS, INC. | |||||||||||||||||||||
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS | |||||||||||||||||||||
(In thousands) | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
Metal Coil Coating | |||||||||||||||||||||
Fiscal Three Months Ended | Fiscal Six Months Ended | Trailing Twelve Months | |||||||||||||||||||
July 30, 2017 | October 29, 2017 | January 28, 2018 | April 29, 2018 | April 29, 2018 | April 29, 2018 | ||||||||||||||||
Total Sales | $ | 95,261 | $ | 98,550 | $ | 88,343 | $ | 95,190 | $ | 183,533 | $ | 377,344 | |||||||||
External Sales | 48,556 | 50,257 | 48,020 | 52,480 | 100,500 | 199,313 | |||||||||||||||
Operating Income, GAAP | 7,107 | 1,419 | 5,376 | 7,129 | 12,505 | 21,031 | |||||||||||||||
Goodwill impairment | — | 6,000 | — | — | — | 6,000 | |||||||||||||||
Adjusted Operating Income | 7,107 | 7,419 | 5,376 | 7,129 | 12,505 | 27,031 | |||||||||||||||
Depreciation and amortization | 2,063 | 2,065 | 2,058 | 2,085 | 4,143 | 8,271 | |||||||||||||||
Adjusted EBITDA | $ | 9,170 | $ | 9,484 | $ | 7,434 | $ | 9,214 | $ | 16,648 | $ | 35,302 | |||||||||
Year over year growth, Total sales | (1.5 | )% | 2.7 | % | 0.0 | % | 9.8 | % | 4.8 | % | 2.6 | % | |||||||||
Year over year growth, External Sales | (7.1 | )% | (1.7 | )% | (1.4 | )% | 14.2 | % | 6.2 | % | 0.7 | % | |||||||||
Operating Income Margin | 7.5 | % | 1.4 | % | 6.1 | % | 7.5 | % | 6.8 | % | 5.6 | % | |||||||||
Adjusted Operating Income Margin | 7.5 | % | 7.5 | % | 6.1 | % | 7.5 | % | 6.8 | % | 7.2 | % | |||||||||
Adjusted EBITDA Margin | 9.6 | % | 9.6 | % | 8.4 | % | 9.7 | % | 9.1 | % | 9.4 | % | |||||||||
Fiscal Three Months Ended | Fiscal Six Months Ended | Trailing Twelve Months | |||||||||||||||||||
July 31, 2016 | October 30, 2016 | January 29, 2017 | April 30, 2017 | April 30, 2017 | April 30, 2017 | ||||||||||||||||
Total Sales | $ | 96,684 | $ | 95,987 | $ | 88,340 | $ | 86,729 | $ | 175,069 | $ | 367,740 | |||||||||
External Sales | 52,263 | 51,102 | 48,684 | 45,945 | 94,629 | 197,994 | |||||||||||||||
Operating Income, GAAP | 10,531 | 9,310 | 6,706 | 6,227 | 12,933 | 32,774 | |||||||||||||||
Adjusted Operating Income | 10,531 | 9,310 | 6,706 | 6,227 | 12,933 | 32,774 | |||||||||||||||
Other income and expense | 2 | — | 31 | — | 31 | 33 | |||||||||||||||
Depreciation and amortization | 2,214 | 1,849 | 2,106 | 2,009 | 4,115 | 8,178 | |||||||||||||||
Adjusted EBITDA | $ | 12,747 | $ | 11,159 | $ | 8,843 | $ | 8,236 | $ | 17,079 | $ | 40,985 | |||||||||
Operating Income Margin | 10.9 | % | 9.7 | % | 7.6 | % | 7.2 | % | 7.4 | % | 8.9 | % | |||||||||
Adjusted Operating Income Margin | 10.9 | % | 9.7 | % | 7.6 | % | 7.2 | % | 7.4 | % | 8.9 | % | |||||||||
Adjusted EBITDA Margin | 13.2 | % | 11.6 | % | 10.0 | % | 9.5 | % | 9.8 | % | 11.1 | % | |||||||||
NCI BUILDING SYSTEMS, INC. | |||||||||||||||||||||
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS | |||||||||||||||||||||
(In thousands) | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
Corporate | |||||||||||||||||||||
Fiscal Three Months Ended | Fiscal Six Months Ended | Trailing Twelve Months | |||||||||||||||||||
July 30, 2017 | October 29, 2017 | January 28, 2018 | April 29, 2018 | April 29, 2018 | April 29, 2018 | ||||||||||||||||
Operating Loss, GAAP | $ | (22,702 | ) | $ | (19,151 | ) | $ | (24,901 | ) | $ | (21,066 | ) | $ | (45,967 | ) | $ | (87,820 | ) | |||
Restructuring and impairment | — | 262 | 77 | — | 77 | 339 | |||||||||||||||
Strategic development and acquisition related costs | 1,297 | 103 | 254 | 1,073 | 1,327 | 2,727 | |||||||||||||||
Acceleration of CEO retirement benefits | — | — | 4,600 | — | 4,600 | 4,600 | |||||||||||||||
Adjusted Operating Loss | (21,405 | ) | (18,786 | ) | (19,970 | ) | (19,993 | ) | (39,963 | ) | (80,154 | ) | |||||||||
Other income and expense | 187 | 192 | 415 | (236 | ) | 179 | 558 | ||||||||||||||
Depreciation and amortization | 178 | 237 | 259 | 255 | 514 | 929 | |||||||||||||||
Share-based compensation expense | 2,284 | 2,084 | 2,270 | 1,998 | 4,268 | 8,636 | |||||||||||||||
Adjusted EBITDA | $ | (18,756 | ) | $ | (16,273 | ) | $ | (17,026 | ) | $ | (17,976 | ) | $ | (35,002 | ) | $ | (70,031 | ) | |||
Fiscal Three Months Ended | Fiscal Six Months Ended | Trailing Twelve Months | |||||||||||||||||||
July 31, 2016 | October 30, 2016 | January 29, 2017 | April 30, 2017 | April 30, 2017 | April 30, 2017 | ||||||||||||||||
Operating Loss, GAAP | $ | (22,271 | ) | $ | (21,516 | ) | $ | (17,891 | ) | $ | (20,023 | ) | $ | (37,914 | ) | $ | (81,701 | ) | |||
Restructuring and impairment | 411 | 97 | 49 | — | 49 | 557 | |||||||||||||||
Strategic development and acquisition related costs | 810 | 590 | 357 | 124 | 481 | 1,881 | |||||||||||||||
Adjusted Operating Loss | (21,050 | ) | (20,829 | ) | (17,485 | ) | (19,899 | ) | (37,384 | ) | (79,263 | ) | |||||||||
Other income and expense | 297 | (73 | ) | 256 | 182 | 438 | 662 | ||||||||||||||
Depreciation and amortization | 221 | 235 | 207 | 208 | 415 | 871 | |||||||||||||||
Share-based compensation expense | 2,661 | 3,181 | 3,042 | 2,820 | 5,862 | 11,704 | |||||||||||||||
Adjusted EBITDA | $ | (17,871 | ) | $ | (17,486 | ) | $ | (13,980 | ) | $ | (16,689 | ) | $ | (30,669 | ) | $ | (66,026 | ) | |||
Our Mission & Vision 2Q Supplemental Presentation June 5, 2018
Forward-looking Statements Certain statements and information in this presentation may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words “believe,” “anticipate,” “plan,” “intend,” “foresee,” “guidance,” “potential,” “expect,” “should,”Our“will” Mission“continue,” “could,” “estimate,” & Vision“forecast,” “goal,” “may,” “objective,” “predict,” “projection,” or similar expressions are intended to identify forward-looking statements (including those contained in certain visual depictions) in this presentation. These forward-looking statements reflect the Company's current expectations and/or beliefs concerning future events. The Company believes the information, estimates, forecasts and assumptions on which these statements are based are current, reasonable and complete. Our expectations with respect to the third quarter of fiscal 2018 that are contained in this presentation are forward looking statements based on management’s best estimates, as of the date of this presentation. These estimates are unaudited, and reflect management’s current views with respect to future results. However, the forward-looking statements in this presentation 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, industry cyclicality and seasonality and adverse weather conditions; challenging economic conditions affecting the nonresidential construction industry; volatility in the U.S. economy and abroad, generally, and in the credit markets; substantial indebtedness and our ability to incur substantially more indebtedness; our ability to generate significant cash flow required to service our existing debt, including our secured term loan facility, and obtain future financing; our ability to comply with the financial tests and covenants in our existing and future debt obligations; operational limitations or restrictions in connection with our debt; increases in interest rates; recognition of asset impairment charges; commodity price increases and/or limited availability of raw materials, including steel; interruptions in our supply chain; our ability to make strategic acquisitions accretive to earnings; retention and replacement of management and other key personnel; enforcement and obsolescence of intellectual property rights; fluctuations in customer demand; costs related to environmental clean-ups and liabilities; competitive activity and pricing pressure; increases in energy prices; volatility of the Company's stock price; dilutive effect on the Company's common stockholders of potential future sales of the Company's common stock held by our sponsor; substantial governance and other rights held by our sponsor; 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 us to liabilities and possible losses, which may not be covered by insurance; changes in laws or regulations, including the Dodd–Frank Act; the timing and amount of our stock repurchases; and costs and other effects of legal and administrative proceedings, settlements, investigations, claims and other matters. See also the “Risk Factors” in the Company's Annual Report on Form 10-K for the fiscal year ended October 29, 2017, and other risks described in documents subsequently filed by the Company from time to time with the SEC, which 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. The Company expressly disclaims any obligation to release publicly any updates or revisions to these forward-looking statements, whether as a result of new information, future events, or otherwise. 2
2Q 2018 Financial Overview (Page 1 of 2) Our. Sales Mission were $457.1 million, & Vision an increase of $36.6 million or 8.7% from $420.5 million in the prior year’s second quarter • Revenues for the quarter benefited from continued commercial discipline in the pass- through of higher material costs across the segments, combined with volume growth in both Metal Components and the Insulated Metal Panels (“IMP”) segments, as well as growth in package volumes in the Metal Coil Coating segment . Gross profit margins for the quarter were 22.8% compared to 24.0% in the prior year period and up 100 basis points sequentially from the first quarter of 2018. Gross margins were lower primarily as a result of: • The strong mix of higher margin architectural products that shipped in the IMP segment during the second quarter of fiscal 2017 • Lower manufacturing leverage as the Company began adding incremental shifts to manage expected demand during the second half of fiscal 2018 . ESG&A Costs decreased to $74.4 million (16.3% of sales) from $75.1 million (17.9% of sales) in the prior year’s second quarter . Operating income was $19.0 million, compared to $32.5 million in the prior year period • The second quarter of fiscal 2018 included a $6.7 million charge related to the sale of CENTRIA’s China operations 3
2Q 2018 Financial Overview (Page 2 of 2) Our. Adjusted Mission Operating & Income Vision(1) was $27.3 million, compared to $23.6 million in the prior year’s second quarter . Net loss applicable to common shares was $5.7 million, or $0.09 per diluted common share this quarter compared to net income of $16.9 million, or $0.24 per diluted common share in the second quarter of fiscal 2017. On an adjusted basis(1), diluted earnings were $0.25 per share this quarter compared to $0.16 in the prior year’s second quarter • Net Income for the quarter was impacted by several special items including a $21.9 million charge related to the extinguishment and refinancing of a portion of the Company’s debt and a $6.7 million charge related to the disposition of CENTRIA’s China operations . Adjusted EBITDA (1) was $39.7 million compared to $37.0 million in the prior year period . Consolidated backlog grew 10.8% year-over-year to $631.6 million (1) Reconciliations of non-GAAP financial measures to the nearest GAAP measure are included in the Company’s financial tables beginning on Slide 15 4
2Q 2018 Operational Overview Our. Commercial Mission & Vision • Backlog in the Engineered Building Systems segment at the end of the quarter increased 14.3% to $421.5 million • Engineered Building Systems backlog for IMP orders are up 21% year-over-year • Total door sales increased 63.3% year-over-year . Steel Costs • Steel costs continue to be elevated and recent announcements regarding possible tariffs is likely to lead to continued price increases • The Company has successfully navigated similar events in fiscal 2002, 2004 and 2008 . Manufacturing • There were lower volumes in the Engineered Building Systems segment and incremental manufacturing costs in the Metal Coil Coating segment related to ramping-up of additional shifts in preparation for higher volumes expected in the second half of fiscal 2018, both of which reduced manufacturing utilization during the period 5
2Q 2018 Segment Overview (1) . Engineered Building Systems Our• MissionRevenues increased & 2.8% Vision to $167.2 million from $162.6 million in the prior year period, primarily as a result of commercial discipline passing through higher input costs, partially offset by lower tonnage volumes • Operating margin improved to 5.5% in the quarter as a result of lower ESG&A costs and an emphasis on order profitability over volumes . Metal Components • Revenue grew 8.8% to $168.5 million from $154.9 million in the prior year period, primarily as a result of higher external volumes and the disciplined pass-through of increasing input costs • Operating margins improved to 13.1% in the quarter, as a result of improved operating leverage on higher volumes . Insulated Metal Panels (IMP) • Revenue increased 10.2% to $113.4 million from $102.9 million in the prior year period, primarily as a result of commercial discipline in emphasizing project profitability over volume in a period of increasing input costs • Operating margins decreased as a result of the change in product mix, which was expected due to the unusually large amount of higher margin architectural panels shipped in the prior year period and a special charge of $6.7 million for the disposition of CENTRIA’s China operations . Metal Coil Coating • Revenues were $95.2 million, an increase of 9.8%, from $86.7 million in the prior year period. Operating margins improved as a result of lower ESG&A costs, partially offset by lower manufacturing efficiency due to ramping-up additional shifts in advance of anticipated increases in activity levels in the second half of fiscal 2018 (1) Segment revenue includes intersegment sales 6
2Q 2018 Financial Summary Our Mission & Vision (Dollars in millions, except per share amounts) Fiscal Three Months Ended Six Months Ended April 29, April 30, April 29, April 30, 2018 2017 % Chg. 2018 2017 % Chg. Sales $ 457.1 $ 420.5 8.7% $ 878.4 $ 812.2 8.2% Gross Profit $ 104.1 $ 100.8 3.2% $ 196.0 $ 184.8 6.1% Gross Profit Margin 22.8% 24.0% -5.0% 22.3% 22.8% -2.2% Income from Operations $ 19.0 $ 32.5 -41.6% $ 31.9 $ 42.4 -24.8% Net Income (Loss) $ (5.7) $ 17.0 -133.5% $ (0.4) $ 19.0 -102.3% Diluted EPS $ (0.09) $ 0.24 -137.5% $ (0.01) $ 0.27 -103.7% Adjusted Operating Income1 $ 27.3 $ 23.6 15.3% $ 46.6 $ 36.1 28.9% Adjusted EBITDA1 $ 39.7 $ 37.0 7.3% $ 72.5 $ 63.1 14.9% 1 Adjusted Diluted EPS $ 0.25 $ 0.16 56.3% $ 0.39 $ 0.21 85.7% (1) Reconciliations of non-GAAP financial measures to the nearest GAAP measure are included in the Company’s financial tables beginning on Slide 15 7
2Q 2018 Revenues and Volumes – by Segment ($ in millions) EngineeredOur Building Mission Systems &Metal Vision Components Insulated Metal Panels Metal Coil Coating % Vol. % Vol. % Vol. 1 1 1 2Q-'18 2Q-'17 % Chg. Chg. 2Q-'18 2Q-'17 % Chg. Chg. 2Q-'18 2Q-'17 % Chg. 2Q-'18 2Q-'17 % Chg. Chg. Third-Party $ 157.1 $ 154.5 1.7% -4.4% Third-Party $ 147.7 $ 133.3 10.8% 4.5% Third-Party $ 99.8 $ 86.8 15.0% Third-Party $ 52.5 $ 45.9 14.2% -10.2% Internal 10.1 8.2 23.7% 21.7% Internal 20.8 21.6 -3.7% -13.2% Internal 13.6 16.2 -15.7% Internal 42.7 40.8 4.7% 2.9% Total Sales $ 167.2 $ 162.6 2.8% -2.4% Total Sales $ 168.5 $ 154.9 8.8% 1.0% Total Sales $ 113.4 $ 102.9 10.2% Total Sales $ 95.2 $ 86.7 9.8% -4.1% Engineered Building Metal Components Insulated Metal Panels Metal Coil Coating Systems $180.0 $180.0 $120.0 $100.0 $160.0 $160.0 $90.0 $100.0 $140.0 $140.0 $80.0 $70.0 $120.0 $120.0 $80.0 $60.0 $100.0 $100.0 $60.0 $50.0 $80.0 $80.0 $40.0 $60.0 $60.0 $40.0 $30.0 $40.0 $40.0 $20.0 $20.0 $20.0 $20.0 $10.0 $- $- $- $- 2Q-'18 2Q-'17 2Q-'18 2Q-'17 2Q-'18 2Q-'17 2Q-'18 2Q-'17 Third-Party Internal Third-Party Internal Third-Party Internal Third-Party Internal Consolidated 3rd Party Revenue Consolidated 3rd Party Revenue 2Q 2018 2Q 2017 Metal Coil Metal Coil Coating Coating 12% 11% Insulated Insulated Metal Panels Metal Panels 22% 20% Engineered Building Systems Engineered Building Syste ms 34% Metal Metal 37% Components Components 32% 32% (1) Calculated as the year-over-year change in the tonnage volumes shipped. 8
2Q 2018 Business Segment Results (Dollars in millions) OurThird Party Revenue Operating Income Mission & Vision$457.1 $420.5 $32.5 $22.1 $20.0 $19.4 $19.0 $157.1 $154.5 $147.7 $133.3 $9.3 $99.8 $86.8 $7.1 $6.9 $6.2 $45.9 $52.5 $1.5 Buildings Components IMP Coatings Consolidated Buildings Components IMP Coatings Consolidated 2017 Adjusted Operating Income(1) Adjusted EBITDA(1) 2018 $27.3 $39.7 $37.0 $23.6 $22.2 $19.7 $23.7 $21.1 $10.4 $9.6 $15.0 $8.4 $12.9 $7.2 $7.1 $11.8 $6.2 $9.4 $8.2 $9.2 Buildings Components IMP Coatings Consolidated Buildings Components IMP Coatings Consolidated (1) Reconciliation of non-GAAP financial measures to the nearest GAAP measure are included in the Company’s financial tables beginning on Slide 15 9
Gross Margin Reconciliation OurGross Mission Margin 2Q 2017 & Vision 24.0% Commercial sales discipline 0.30% Lower plant utilization (0.60%) Product Mix, IMP (0.50%) Freight, predominately IMP (0.40%) Gross Margin 2Q 2018 22.8% Note: Basis point attributions in the above tables are approximate . For the second quarter, gross profit was $104.1 million compared to $100.8 million in the second quarter of fiscal 2017 . The favorable commercial sales discipline was executed across all the business segments . Lower volumes in the Engineered Building Systems segment and incremental manufacturing costs in the Metal Coil Coating segment related to ramping-up additional shifts in preparation for higher volumes expected in the second half of fiscal 2018 led to lower plant utilization . The reduction in year-over-year margins in the IMP product mix was expected due to the unusually large amount of higher margin architectural panels shipped in the prior year period 10
2Q 2018 Net Income(Loss) and Adjusted EBITDA Net Income: OurNet loss Mission was $5.7 million in& the Visionsecond quarter of fiscal 2018 compared to net income of $17.0 million in the prior year’s second quarter Adjusted EBITDA(1): (Dollars in millions) $41.0 $0.4 $3.3 $40.0 $(0.5) $39.7 $(0.5) $39.0 $38.0 $37.0 $37.0 $36.0 $35.0 Adjusted EBITDA 2Q Volume Net Other Product Mix and Margin ESG&A Costs Adjusted EBITDA 2Q 2017 Contraction 2018 (1) Reconciliations of non-GAAP financial measures to the nearest GAAP measure are included in the Company’s financial tables beginning on Slide 15 11
2Q 2018 Cash Flow Summary (Dollars in thousands) CashOurand Mission Cash Equivalents, & asVision of 2Q 2018 1Q 2018 4Q 2017 3Q 2017 2Q 2017 Beginning balance $ 12,420 $ 65,658 $ 45,923 $ 49,682 $ 15,789 Cash provided by (used in) operating activities 46,566 (6,580) 63,277 (7,294) 38,254 Cash provided by (used in) investing activities (12,774) (5,860) (5,781) 4,100 (4,483) Cash provided by (used in) financing activities (10,616) (41,035) (37,622) (961) 271 Exchange rate effects (261) 237 (139) 396 (149) Ending balance $ 35,335 $ 12,420 $ 65,658 $ 45,923 $ 49,682 . Financing Activities • During the second quarter, the Company entered into a new $415 million secured term loan facility and used the proceeds, together with cash on hand, to redeem and repay the Company’s existing 8.25% senior notes and refinance its existing term loan credit facility. This included the payment of related premiums, fees and expenses, including accrued and unpaid interest 12
2Q 2018 Results Compared to Guidance Range Our($ inMissionmillions) & Vision Low High 2Q Actuals Revenues $430.0 $450.0 $457.1 Gross Profit Margin 21.0% 24.0% 22.8% ESG&A Expenses $74.0 $78.0 $74.4 Intangible Asset Amortization $2.3 $2.5 $2.4 Total Depreciation & Amortization $10.2 $10.8 $10.4 (inclusive of Intangible amortization above) Interest Expense $5.1 $5.6 $4.8 Effective Tax Rate 25.5% 27.5% 26.8% Adjusted EBITDA (1) $29.0 $39.0 $39.7 . Revenues for the second quarter reflect strong commercial discipline across the business segments in the pass-through of higher inflationary costs . Gross profit margins were lower year-over-year, primarily as a result of less favorable product mix in the IMP segment and incremental manufacturing costs in the Metal Coil Coating segment related to ramping-up additional shifts in preparation for higher volumes expected in the second half of fiscal 2018. Sequentially, margins were up 100 basis points from the first quarter of fiscal 2018 (1) Reconciliation of non-GAAP financial measures to the nearest GAAP measure are included in the Company’s financial tables beginning on Slide 15 13
3Q 2018 Guidance (1) 3Q Range ($ in million) Our Mission & Vision Low High Revenues $525.0 $545.0 Gross Profit Margin 23.3% 25.5% ESG&A Expenses $77.0 $82.0 Intangible Asset Amortization $2.3 $2.5 Total Depreciation & Amortization $10.0 $10.5 (inclusive of Intangible Asset Amortization above) Interest Expense $4.7 $5.2 Effective Tax Rate 25.5% 27.5% Adjusted EBITDA $56.0 $66.0 . Guidance for ESG&A excludes the amortization of intangible assets, which is shown as a separate line item above . Total Depreciation & Amortization includes the intangible amortization and is reported on the Company’s Statements of Operations within Cost of Goods Sold, ESG&A Expense and Intangible Asset Amortization . Weighted average diluted common shares is expected to be 66.4 million for 3Q 2018 . Total capital expenditures for fiscal 2018 are expected to be in the range of $45.0 million to $55.0 million. Year-to-date spend, as of end of the second quarter 2018, is $16.9 million (1) See “Forward Looking Statements” on Slide 2 14
Reconciliation of Net Income (Loss) and Adjusted Net Income (Loss) per Diluted Common Share (Dollars in thousands, except per share amounts) Our Mission & Vision Fiscal Three Months Ended Fiscal Six Months Ended April 29, April 30, April 29, April 30, 2018 2017 2018 2017 Net income (loss) per diluted common share, GAAP basis $ (0.09) $ 0.24 $ (0.01) $ 0.27 Loss on extinguishment of debt 0.33 0.00 0.33 - Loss on disposition of business 0.10 0.00 0.10 - Restructuring and impairment charges 0.01 0.00 0.02 0.04 Strategic development and acquisition related costs 0.02 0.00 0.03 0.01 Acceleration of CEO retirement benefits - - 0.07 - Gain on insurance recovery - (0.13) - (0.14) (1) Tax effect of applicable non-GAAP adjustments (0.12) 0.05 (0.15) 0.03 (2) Adjusted net income per diluted common share $ 0.25 $ 0.16 $ 0.39 $ 0.21 Fiscal Three Months Ended Fiscal Six Months Ended April 29, April 30, April 29, April 30, 2018 2017 2018 2017 Net income (loss) applicable to common shares, GAAP basis $ (5,684) $ 16,859 $ (435) $ 18,882 Loss on extinguishment of debt 21,875 - 21,875 - Loss on disposition of business 6,686 - 6,686 - Restructuring and impairment charges 488 315 1,582 2,578 Strategic development and acquisition related costs 1,134 124 1,861 481 Acceleration of CEO retirement benefits - - 4,600 - Gain on insurance recovery - (9,601) - (9,601) Other, net - 328 (323) 328 Tax effect of applicable non-GAAP adjustments (1) (8,059) 3,445 (9,883) 2,423 (2) Adjusted net income applicable to common shares $ 16,440 $ 11,470 $ 25,963 $ 15,091 #DIV/0! #DIV/0! (1) The Company calculated the tax effect of non-GAAP adjustments by applying the applicable statutory tax rate for the period to each applicable non-GAAP item. (2) The Company discloses a tabular comparison of Adjusted net income per diluted common share and Adjusted net income applicable to common shares, which are non-GAAP measures, because they are referred to in the text of our press releases and are instrumental in comparing the results from period to period. Adjusted net income per diluted common share and Adjusted net income applicable to common shares should not be considered in isolation or as a substitute for net income per diluted common share and net income applicable to common shares as reported on the face of our consolidated statements of operations. 15
Business Segments (Page 1 of 2) (Dollars in thousands) Our MissionFiscal Three& MonthsVision Ended Fiscal Six Months Ended April 29, April 30, April 29, April 30, 2018 2017 2018 2017 % of % of % of % of Total Total % Total Total % Sales Sales Change Sales Sales Change Total Sales Engineered Building Systems $ 167,240 31 $ 162,624 32 2.8% $ 324,204 31 $ 313,887 32 3.3% Metal Components 168,456 31 154,895 31 8.8% 315,288 30 289,068 30 9.1% Insulated Metal Panels 113,413 21 102,937 20 10.2% 224,207 21 198,132 20 13.2% Metal Coil Coating 95,190 17 86,729 17 9.8% 183,533 18 175,069 18 4.8% Total sales 544,299 100 507,185 100 7.3% 1,047,232 100 976,156 100 7.3% Less: Intersegment sales (87,230) 16 (86,721) 17 0.6% (168,814) 16 (163,989) 17 2.9% Total net sales $ 457,069 84 $ 420,464 83 8.7% $ 878,418 84 $ 812,167 83 8.2% % of % of % of % of External Sales Sales Sales Sales Sales Engineered Building Systems $ 157,136 34 $ 154,456 37 1.7% $ 305,424 35 $ 299,477 37 2.0% Metal Components 147,661 32 133,290 31 10.8% 275,189 31 248,847 30 10.6% Insulated Metal Panels 99,792 22 86,773 21 15.0% 197,305 23 169,214 21 16.6% Metal Coil Coating 52,480 12 45,945 11 14.2% 100,500 11 94,629 12 6.2% Total extermal sales $ 457,069 100 $ 420,464 100 8.7% $ 878,418 100 $ 812,167 100 8.2% % of % of % of % of Operating Income Sales Sales Sales Sales Engineered Building Systems $ 9,271 6 $ 6,894 4 34.5% $ 17,534 5 $ 13,397 4 30.9% Metal Components 22,082 13 19,997 13 10.4% 39,171 12 32,373 11 21.0% Insulated Metal Panels 1,540 1 19,377 19 -92.1% 8,611 4 21,569 11 -60.1% Metal Coil Coating 7,129 7 6,227 7 14.5% 12,505 7 12,933 7 -3.3% Corporate (21,066) - (20,023) - 5.2% (45,967) - (37,914) - 21.2% Total operating income $ 18,956 4 $ 32,472 8 -41.6% $ 31,854 4 $ 42,358 5 -24.8% 16
Business Segments (Page 2 of 2) (Dollars in thousands) Our MissionFiscal Three& MonthsVision Ended Fiscal Six Months Ended April 29, April 30, April 29, April 30, 2018 2017 2018 2017 % of % of % of % of Adjusted Operating Income (1) Sales Sales Sales Sales Engineered Building Systems $ 9,551 6 $ 7,217 4 32.3% $ 19,123 6 $ 15,630 5 22.3% Metal Components 22,202 13 19,706 13 12.7% 37,888 12 32,387 11 17.0% Insulated Metal Panels 8,375 7 10,387 10 -19.4% 17,030 8 12,579 6 35.4% Metal Coil Coating 7,129 7 6,227 7 14.5% 12,505 7 12,933 7 -3.3% Corporate (19,993) - (19,899) - 0.5% (39,963) - (37,384) - 6.9% Total adjusted operating income $ 27,264 6 $ 23,638 6 15.3% $ 46,583 5 $ 36,145 4 28.9% % of % of % of % of Adjusted EBITDA (2) Sales Sales Sales Sales Engineered Building Systems $ 11,786 7 $ 9,377 6 25.7% $ 24,168 7 $ 20,025 6 20.7% Metal Components 23,713 14 21,060 14 12.6% 41,028 13 35,103 12 16.9% Insulated Metal Panels 12,933 11 14,985 15 -13.7% 25,703 11 21,604 11 19.0% Metal Coil Coating 9,214 10 8,236 9 11.9% 16,648 9 17,079 10 -2.5% Corporate (17,976) - (16,689) - 7.7% (35,002) - (30,669) - 14.1% Total adjusted EBITDA $ 39,670 9 $ 36,969 9 7.3% $ 72,545 8 $ 63,142 8 14.9% (1) The Company discloses a tabular comparison of Adjusted operating income (loss), which is a non-GAAP measure, because it is instrumental in comparing the results from period to period. Adjusted operating income (loss) should not be considered in isolation or as a substitute for operating income (loss) as reported on the face of our statements of operations. (2) The Company's Term Loan Credit Agreement defines Adjusted EBITDA. Adjusted EBITDA excludes non-cash charges for goodwill and other asset impairments and stock compensation as well as certain special charges. As such, the historical information is presented in accordance with the definition above. The Company's Asset-Based Lending facility has substantially the same definition of Adjusted EBITDA. The Company is disclosing Adjusted EBITDA, which is a non-GAAP measure, because it is used by management and provided to investors to provide comparability of underlying operational results. 17
Consolidated – Non-GAAP Financial Measures and Reconciliations (Dollars in thousands) Fiscal Six Trailing Fiscal Three Months Ended Months Ended Twelve Months Our Mission & VisionJuly 30, October 29, January 28, April 29, April 29, April 29, 2017 2017 2018 2018 2018 2018 Total Net Sales $ 469,385 $ 488,726 $ 421,349 $ 457,069 $ 878,418 $ 1,836,529 Operating Income, GAAP 34,097 33,325 12,898 18,956 31,854 99,276 Restructuring and impairment 1,009 1,709 1,094 488 1,582 4,300 Strategic development and acquisition related costs 1,297 193 727 1,134 1,861 3,351 Loss on disposition of business - - - 6,686 6,686 6,686 Acceleration of CEO retirement benefits - - 4,600 - 4,600 4,600 Gain on insurance recovery (148) - - - - (148) Unreimbursed business interruption costs 235 28 - - - 263 Goodwill impairment - 6,000 - - - 6,000 Adjusted Operating Income 36,490 41,255 19,319 27,264 46,583 124,328 Other income and expense 1,322 (62) 928 (34) 894 2,154 Depreciation and amortization 10,278 10,664 10,358 10,442 20,800 41,742 Share-based compensation expense 2,284 2,084 2,270 1,998 4,268 8,636 Adjusted EBITDA $ 50,374 $ 53,941 $ 32,875 $ 39,670 $ 72,545 $ 176,860 Year over year growth, Total Net Sales 1.5 % 1.8 % 7.6 % 8.7 % 8.2 % 4.7 % Operating Income Margin 7.3 % 6.8 % 3.1 % 4.1 % 3.6 % 5.4 % Adjusted Operating Income Margin 7.8 % 8.4 % 4.6 % 6.0 % 5.3 % 6.8 % Adjusted EBITDA Margin 10.7 % 11.0 % 7.8 % 8.7 % 8.3 % 9.6 % Fiscal Six Trailing Fiscal Three Months Ended Months Ended Twelve Months July 31, October 30, January 29, April 30, April 30, April 30, 2016 2016 2017 2017 2017 2017 Total Net Sales $ 462,353 $ 480,314 $ 391,703 $ 420,464 $ 812,167 $ 1,754,834 Operating Income, GAAP 43,535 39,391 9,886 32,472 42,358 125,284 Restructuring and impairment 778 815 2,264 315 2,579 4,172 Strategic development and acquisition related costs 819 590 357 124 481 1,890 (Gain) loss on sale of assets and asset recovery (52) 62 - 137 137 147 Gain on insurance recovery - - - (9,601) (9,601) (9,601) Unreimbursed business interruption costs - - - 191 191 191 Adjusted Operating Income 45,080 40,858 12,507 23,638 36,145 122,083 Other income and expense (508) (192) 309 449 758 58 Depreciation and amortization 10,595 9,815 10,315 10,062 20,377 40,787 Share-based compensation expense 2,661 3,181 3,042 2,820 5,862 11,704 Adjusted EBITDA $ 57,828 $ 53,662 $ 26,173 $ 36,969 $ 63,142 $ 174,632 Operating Income Margin 9.4 % 8.2 % 2.5 % 7.7 % 5.2 % 7.1 % Adjusted Operating Income Margin 9.8 % 8.5 % 3.2 % 5.6 % 4.5 % 7.0 % Adjusted EBITDA Margin 12.5 % 11.2 % 6.7 % 8.8 % 7.8 % 10.0 % 18
Engineered Building Systems – Non-GAAP Financial Measures and Reconciliations (Dollars in thousands) Fiscal Six Trailing Our Mission & VisionFiscal Three Months Ended Months Ended Twelve Months July 30, October 29, January 28, April 29, April 29, April 29, 2017 2017 2018 2018 2018 2018 Total Sales $ 191,910 $ 188,183 $ 156,964 $ 167,240 $ 324,204 $ 704,297 External Sales 182,164 178,222 148,288 157,136 305,424 665,810 Operating Income, GAAP 14,948 13,043 8,263 9,271 17,534 45,525 Restructuring and impairment 941 695 1,136 280 1,416 3,052 Strategic development and acquisition related costs - - 173 - 173 173 Adjusted Operating Income 15,889 13,738 9,572 9,551 19,123 48,750 Other income and expense 1,291 (694) 733 (88) 645 1,242 Depreciation and amortization 2,255 2,198 2,077 2,323 4,400 8,853 Adjusted EBITDA $ 19,435 $ 15,242 $ 12,382 $ 11,786 $ 24,168 $ 58,845 Year over year growth, Total sales 6.0 % (7.8)% 3.8 % 2.8 % 3.3 % 0.7 % Year over year growth, External Sales 3.8 % (9.3)% 2.3 % 1.7 % 2.0 % (0.9)% Operating Income Margin 7.8 % 6.9 % 5.3 % 5.5 % 5.4 % 6.5 % Adjusted Operating Income Margin 8.3 % 7.3 % 6.1 % 5.7 % 5.9 % 6.9 % Adjusted EBITDA Margin 10.1 % 8.1 % 7.9 % 7.0 % 7.5 % 8.4 % Fiscal Six Trailing Fiscal Three Months Ended Months Ended Twelve Months July 31, October 30, January 29, April 30, April 30, April 30, 2016 2016 2017 2017 2017 2017 Total Sales $ 181,029 $ 204,208 $ 151,263 $ 162,624 313,887 $ 699,124 External Sales 175,471 196,596 145,021 154,456 299,477 671,544 Operating Income, GAAP 19,561 22,830 6,503 6,894 13,397 55,788 Restructuring and impairment 106 211 1,910 186 2,096 2,413 (Gain) loss on sale of assets and asset recovery (52) 62 - 137 137 147 Adjusted Operating Income 19,615 23,103 8,413 7,217 15,630 58,348 Other income and expense (931) (362) (41) (125) (166) (1,459) Depreciation and amortization 2,438 2,399 2,276 2,285 4,561 9,398 Adjusted EBITDA $ 21,122 $ 25,140 $ 10,648 $ 9,377 $ 20,025 $ 66,287 Operating Income Margin 10.8 % 11.2 % 4.3 % 4.2 % 4.3 % 8.0 % Adjusted Operating Income Margin 10.8 % 11.3 % 5.6 % 4.4 % 5.0 % 8.3 % Adjusted EBITDA Margin 11.7 % 12.3 % 7.0 % 5.8 % 6.4 % 9.5 % 19
Metal Components– Non-GAAP Financial Measures and Reconciliations (Dollars in thousands) Fiscal Six Trailing Our Fiscal Three Months Ended Months Ended Twelve Months Mission & VisionJuly 30, October 29, January 28, April 29, April 29, April 29, 2017 2017 2018 2018 2018 2018 Total Sales $ 166,305 $ 181,288 $ 146,832 $ 168,456 $ 315,288 $ 662,881 External Sales 140,639 155,183 127,528 147,661 275,189 571,011 Operating Income, GAAP 23,276 23,119 17,089 22,082 39,171 85,566 Restructuring and impairment 60 69 (1,403) 120 (1,283) (1,154) Gain on insurance recovery (148) - - - - (148) Adjusted Operating Income 23,188 23,188 15,686 22,202 37,888 84,264 Other income and expense 55 84 53 67 120 259 Depreciation and amortization 1,266 1,422 1,576 1,444 3,020 5,708 Adjusted EBITDA $ 24,509 $ 24,694 $ 17,315 $ 23,713 $ 41,028 $ 90,231 Year over year growth, Total sales (0.1)% 8.9 % 9.4 % 8.8 % 9.1 % 6.6 % Year over year growth, External Sales 0.1 % 10.9 % 10.4 % 10.8 % 10.6 % 7.9 % Operating Income Margin 14.0 % 12.8 % 11.6 % 13.1 % 12.4 % 12.9 % Adjusted Operating Income Margin 13.9 % 12.8 % 10.7 % 13.2 % 12.0 % 12.7 % Adjusted EBITDA Margin 14.7 % 13.6 % 11.8 % 14.1 % 13.0 % 13.6 % Fiscal Six Trailing Fiscal Three Months Ended Months Ended Twelve Months July 31, October 30, January 29, April 30, April 30, April 30, 2016 2016 2017 2017 2017 2017 Total Sales $ 166,512 $ 166,532 $ 134,173 $ 154,895 $ 289,068 $ 622,112 External Sales 140,560 139,968 115,557 133,290 248,847 529,375 Operating Income, GAAP 26,803 21,254 12,376 19,997 32,373 80,430 Restructuring and impairment 202 103 305 129 434 739 Gain on insurance recovery - - - (420) (420) (420) Adjusted Operating Income 27,005 21,357 12,681 19,706 32,387 80,749 Other income and expense 92 (27) 28 52 80 145 Depreciation and amortization 1,365 1,406 1,334 1,302 2,636 5,407 Adjusted EBITDA $ 28,462 $ 22,736 $ 14,043 $ 21,060 $ 35,103 $ 86,301 Operating Income Margin 16.1 % 12.8 % 9.2 % 12.9 % 11.2 % 12.9 % Adjusted Operating Income Margin 16.2 % 12.8 % 9.5 % 12.7 % 11.2 % 13.0 % Adjusted EBITDA Margin 17.1 % 13.7 % 10.5 % 13.6 % 12.1 % 13.9 % 20
Insulated Metal Panels – Non-GAAP Financial Measures and Reconciliations (Dollars in thousands) Fiscal Six Trailing Fiscal Three Months Ended Months Ended Twelve Months Our Mission & VisionJuly 30, October 29, January 28, April 29, April 29, April 29, 2017 2017 2018 2018 2018 2018 Total Sales $ 119,730 $ 123,542 $ 110,794 $ 113,413 $ 224,207 $ 467,479 External Sales 98,026 105,064 97,513 99,792 197,305 400,395 Operating Income, GAAP 11,468 14,895 7,071 1,540 8,611 34,974 Restructuring and impairment 8 683 1,284 88 1,372 2,063 Strategic development and acquisition related costs - 90 300 61 361 451 Loss on disposition of business - - - 6,686 6,686 6,686 Unreimbursed business interruption costs 235 28 - - - 263 Adjusted Operating Income 11,711 15,696 8,655 8,375 17,030 44,437 Other income and expense (211) 356 (273) 223 (50) 95 Depreciation and amortization 4,516 4,742 4,388 4,335 8,723 17,981 Adjusted EBITDA $ 16,016 $ 20,794 $ 12,770 $ 12,933 $ 25,703 $ 62,513 Year over year growth, Total sales 13.3 % 12.3 % 16.4 % 10.2 % 13.2 % 13.0 % Year over year growth, External Sales 4.2 % 13.4 % 18.3 % 15.0 % 16.6 % 12.5 % Operating Income Margin 9.6 % 12.1 % 6.4 % 1.4 % 3.8 % 7.5 % Adjusted Operating Income Margin 9.8 % 12.7 % 7.8 % 7.4 % 7.6 % 9.5 % Adjusted EBITDA Margin 13.4 % 16.8 % 11.5 % 11.4 % 11.5 % 13.4 % Fiscal Six Trailing Fiscal Three Months Ended Months Ended Twelve Months July 31, October 30, January 29, April 30, April 30, April 30, 2016 2016 2017 2017 2017 2017 Total Sales $ 105,694 $ 110,001 $ 95,195 $ 102,937 $ 198,132 $ 413,827 External Sales 94,059 92,648 82,441 86,773 169,214 355,921 Operating Income, GAAP 8,911 7,513 2,192 19,377 21,569 37,993 Restructuring and impairment 59 404 - - - 463 Strategic development and acquisition related costs 9 - - - - 9 Gain on insurance recovery - - - (9,181) (9,181) (9,181) Unreimbursed business interruption costs - - - 191 191 191 Adjusted Operating Income 8,979 7,917 2,192 10,387 12,579 29,475 Other income and expense 32 270 35 340 375 677 Depreciation and amortization 4,357 3,926 4,392 4,258 8,650 16,933 Adjusted EBITDA $ 13,368 $ 12,113 $ 6,619 $ 14,985 $ 21,604 $ 47,085 Operating Income Margin 8.4 % 6.8 % 2.3 % 18.8 % 10.9 % 9.2 % Adjusted Operating Income Margin 8.5 % 7.2 % 2.3 % 10.1 % 6.3 % 7.1 % Adjusted EBITDA Margin 12.6 % 11.0 % 7.0 % 14.6 % 10.9 % 11.4 % 21
Metal Coil Coating– Non-GAAP Financial Measures and Reconciliations (Dollars in thousands) Fiscal Six Trailing Our Mission & VisionFiscal Three Months Ended Months Ended Twelve Months July 30, October 29, January 28, April 29, April 29, April 29, 2017 2017 2018 2018 2018 2018 Total Sales $ 95,261 $ 98,550 $ 88,343 $ 95,190 $ 183,533 $ 377,344 External Sales 48,556 50,257 48,020 52,480 100,500 199,313 Operating Income, GAAP 7,107 1,419 5,376 7,129 12,505 21,031 Goodwill impairment - 6,000 - - - 6,000 Adjusted Operating Income 7,107 7,419 5,376 7,129 12,505 27,031 Depreciation and amortization 2,063 2,065 2,058 2,085 4,143 8,271 Adjusted EBITDA $ 9,170 $ 9,484 $ 7,434 $ 9,214 $ 16,648 $ 35,302 Year over year growth, Total sales (1.5)% 2.7 % 0.0% 9.8 % 4.8 % 2.6 % Year over year growth, External Sales (7.1)% (1.7)% (1.4)% 14.2 % 6.2 % 0.7 % Operating Income Margin 7.5 % 1.4 % 6.1 % 7.5 % 6.8 % 5.6 % Adjusted Operating Income Margin 7.5 % 7.5 % 6.1 % 7.5 % 6.8 % 7.2 % Adjusted EBITDA Margin 9.6 % 9.6 % 8.4 % 9.7 % 9.1 % 9.4 % Fiscal Six Trailing Fiscal Three Months Ended Months Ended Twelve Months July 31, October 30, January 29, April 30, April 30, April 30, 2016 2016 2017 2017 2017 2017 Total Sales $ 96,684 $ 95,987 $ 88,340 $ 86,729 $ 175,069 $ 367,740 External Sales 52,263 51,102 48,684 45,945 94,629 197,994 Operating Income, GAAP 10,531 9,310 6,706 6,227 12,933 32,774 Adjusted Operating Income 10,531 9,310 6,706 6,227 12,933 32,774 Other income and expense 2 - 31 - 31 33 Depreciation and amortization 2,214 1,849 2,106 2,009 4,115 8,178 Adjusted EBITDA $ 12,747 $ 11,159 $ 8,843 $ 8,236 $ 17,079 $ 40,985 Operating Income Margin 10.9 % 9.7 % 7.6 % 7.2 % 7.4 % 8.9 % Adjusted Operating Income Margin 10.9 % 9.7 % 7.6 % 7.2 % 7.4 % 8.9 % Adjusted EBITDA Margin 13.2 % 11.6 % 10.0 % 9.5 % 9.8 % 11.1 % 22
Our Mission & Vision K. DARCEY MATTHEWS Vice President, Investor Relations E: [email protected] 281.897.7785 ncibuildingsystems.com