NCI Building Systems Inc.
) went up 2.25% as the company reported a 25% increase in
adjusted earnings per share to 10 cents in the fourth quarter
ended Nov 3, 2013, ahead of the Zacks Consensus Estimate of 7
cents a share.
Including one-time items, the company reported earnings per share
of 11 cents in the reported quarter, compared with 8 cents in the
Sales climbed 11% year over year to $400 million in the quarter,
surpassing the Zacks Consensus Estimate of $347 million. The
improvement was driven by higher volumes in each of the operating
segments, as well as the contribution from an extra week in the
quarter. Backlog at year-end was $322.2 million, up 6% from
$303.6 million a year ago.
Cost of sales during the quarter increased 11% to $313 million.
Adjusted gross profit rose 9% to $86 million. However, gross
margin contracted 20 basis points to 21.6% in the quarter.
Engineering, selling, general and administrative expenses
increased 12% to $71 million. The increment was mainly due to an
extra week in the quarter, higher non-cash stock compensation
charges, distribution channels improvement expenses,
manufacturing capabilities and customer responsiveness, and
variable costs from increased activity levels. Operating profit
edged up 2% to $15.9 million in the quarter from $15.6 million
the prior year.
Revenues at Engineered Building Systems increased 6% year over
year to $201 million. The segment reported an adjusted operating
income of $9 million in the quarter, down from the year-ago
quarter's income of $14.2 million. This was mainly due to higher
manufacturing costs and shipments of lower margin projects
resulting from pricing pressure earlier in the fiscal year.
Revenues from the Metal Coil Coating segment climbed 15% year
over year to $66.5 million led by HVAC, lighting fixtures, and
appliance sales and strong shipments of heavy gauge packages to
construction markets. Operating profit was $7.7 million in the
quarter, up 10% from the prior-year quarter.
The Metal Component segment generated revenues of $201 million,
up 11% year over year. Operating profit for the segment hiked 65%
to $16.9 million due to higher volumes of legacy products and
improving sales margins.
Fiscal 2013 Performance
NCI Building Systems reported break-even earnings in fiscal 2013
versus the year ago loss of 25 cents. Including special items,
the company reported a loss per share of 29 cents narrowed from
the loss of $3.81 in fiscal 2012. Revenues increased 13.4% to
$1.3 billion from $1.1 billion in the prior year.
As of Nov 3, 2013, the company had cash and cash equivalents of
$77.4 million, up from $55.1 million as of Oct 28, 2012.
Long-term debt increased marginally to $235 million as of Nov 3,
2013 from $234 million as of Oct 28, 2012. Cash flow from
operating activities was $64 million in fiscal 2013 compared with
$47.7 million in the prior year.
Management did not provide any specific guidance for fiscal 2014.
Leading indicators for non-residential construction activity
continue to trend positive. The company noted that business
conditions at architectural firms have steadily improved in the
past several quarters, which points toward an upper single-digit
year-over-year growth in nonresidential new construction in
Furthermore, the recent booking trends seem to support this
momentum. The company anticipates improved margins in fiscal 2014
driven by greater commercial discipline, manufacturing
efficiencies and volume-driven operating leverage. The company
also believes that the benefit of improved pricing from its
August performance will be reflected in orders shipped in the
first half of 2014.
The Coatings group continues to be positively impacted by higher
volumes and expanding margin. Further, the Middletown, Ohio-based
light gauge paint line has ramped up production and was
profitable in the fourth quarter of 2013. The company also
witnessed a pick-up in demand mainly from the commercial,
industrial and agricultural sectors starting August.
The recent additions to the Buildings backlog in the period
continue to reflect a number of larger projects and projects with
higher margins. This bodes well for the company going ahead.
Headquartered in Texas, NCI Building Systems is one of the
leading integrated manufacturers of metal products for the North
American non-residential construction industry. Currently, the
shares of NCI Building Systems carry a Zacks Rank #3
Some better-ranked stocks in the same sector are
CaesarStone Sdot-Yam Ltd.
James Hardie Industries plc
Simpson Manufacturing Co., Inc.
). While CaesarStone and James Hardie hold a Zacks Rank #1
(Strong Buy), Simpson Manufacturing has a Zacks Rank #2
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