NCI Building Systems Inc.
) reported adjusted profit of 8 cents in the fourth quarter of
2012, ending October 28, 2012, in line with the Zacks Consensus
Estimate and improved considerably from the year-ago quarter
adjusted loss of 11 cents a share.
Sales increased 28% year over year to $361.7 million in the
quarter, outpacing the Zacks Consensus Estimate of $357 million,
driven by a 21% increase in volume. The year-over-year growth was
driven mainly by the Metal Components segment followed by the
Engineered Building systems segment.
Cost of sales during the quarter increased 28% to $283
million. Adjusted gross profit increased 30% to $78.8 million
with gross margin expanding 40 basis points to 21.8% in the
Engineering, selling, general and administrative expenses
increased 24% to $63.2 million. Adjusted operating income of
$15.6 million in the reported quarter was the highest in the last
12 quarters and improved 68% from the year-ago quarter's
operating income of $9.3 million. Operating margin expanded 100
basis points to 4.3% in the quarter.
Revenue at Engineered Building Systems increased 17% year over
year to $190 million in the quarter. The segment reported
operating income of $14 million in the quarter, up 19% from the
year-ago quarter's adjusted income of $11.9 million. Operating
income benefited from higher plant utilization and improved
Revenue from the Metal Coil Coating segment increased 2% year
over year to $57.7 million. Operating profit was $7 million in
the quarter, up 43% from the prior-year quarter.
The Metal Component segment generated revenues of $180
million, up 41% year over year. Operating profit for the segment
surged 61% to $10.2 million in the quarter. The segment benefited
from the contribution from the company's recent Metl-Span
As of fiscal 2012 end, NCI Building Systems had cash and cash
equivalents of $55 million, down from $78 million at the end of
the fiscal 2011. Long-term debt increased to $234 million from
$130.7 million at the end of the fiscal 2011. Cash flow from
operating activities for fiscal 2012 was $47.7 million compared
with $41.4 million in the prior year.
Fiscal 2012 Performance
NCI Building reported adjusted loss of 23 cents in fiscal 2012
compared with a loss per share of $1.96 in the prior fiscal. The
reported loss per share compared unfavorably with the Zacks
Consensus Estimate of a profit per share of 8 cents. Including
special items, the company reported a loss per share of $3.81
versus a loss per share of $2.58 in the prior year. Sales
increased 20% year over year to $1.15 billion.
Management did not provide any specific guidance for fiscal
2013. However, the company expects revenues, adjusted EBITDA,
operating income and net income to post solid year-over-year
growth in fiscal 2013, despite the near-term effects of Hurricane
Sandy, higher costs in the Coatings group related to the ramp-up
of production at Middletown and a temporary mix shift on the
seasonally slowest first quarter performance.
NCI Building Systems has acquired Metl-Span LLC for $145
million. Metl-Span is a leader in the advancement of insulated
panel technology and serves the architectural, commercial,
industrial and cold Storage industries (non-residential building
products market) with energy efficient and cost effective
insulated metal wall and roof panels.
The acquisition will position NCI Building as a leader in the
insulated metal panel business by diversifying and expanding its
existing product range. In addition, NCI Building will also be
benefited by a growing customer base as well as distribution
network in North America.
During the fourth quarter, bookings increased 6% in dollars
and 11% in volume annually. Backlog at the end of the year stood
at $262.2 million, up 22% from 2011 levels. Both indicate toward
a better performance in the upcoming quarters.
NCI Building Systems has expanded its product portfolio in the
Coating segment to industries outside the non-residential
construction market and has been providing competent services to
a wider customer base. It has plans to increase toll and package
sales of the coating segment. This initiative will reduce the
dependence of the coating segment on the weaker construction
Even though in the quarter, new starts in the non-residential
construction market, measured in square footage, declined 2%, for
2013, McGraw Hill predicts that non-residential construction
activity will be 744 million in calendar 2013, up from 703
million in calendar 2012. This includes commercial and industrial
sector growth of 11%.
Based in Texas, NCI Building Systems is one of the largest
integrated manufacturers of metal products for the North American
non-residential construction industry. It competes with privately
held companies like American Buildings Company, Butler
Manufacturing Company and Varco Pruden Buildings. Currently, the
shares of NCI Building Systems retain a short-term Zacks #3 Rank
NCI BLDG SYSTEM (NCS): Free Stock Analysis
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