NCI Building Systems Inc.
) reported a loss per share of 28 cents in the second quarter of
2013, ending Apr 28, 2013, compared with the prior-year loss of
44 cents a share. The loss per share was wider than the Zacks
Consensus Estimate of a loss per share of 23 cents.
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Including on time items, on a GAAP basis, net loss per share 86
cents in the year ago quarter. NCI Building did not incur any
special charges during the reported quarter.
Sales increased 17% year over year to $293.4 million in the
quarter, missing the Zacks Consensus Estimate of $306 million.
The year-over-year growth was driven mainly by contribution from
the Metl-Span acquisition and the success of its cross-selling
Cost of sales during the quarter increased 21% to $232 million.
Gross profit increased 4.9% to $60.8 million. However, gross
margin contracted 250 basis points to 20.7% in the quarter. This
was due to the escalated costs related to investments,
integration costs associated with the conversion of some of NCI's
existing plants and additional costs related to the ramp-up of
its refurbished coating facility and insulated metal panel
Engineering, selling, general and administrative expenses
increased 21.7% to $62.8 million, mainly due to the additional
cost related to the acquisition of Metl-Span and higher non-cash
stock compensation expense. Operating loss was $1.9 million in
the second quarter compared with an adjusted operating profit of
$5 million in the prior-year quarter.
Revenue at Engineered Building Systems remained flat year over
year at $148 million. The segment reported an operating income of
$4.2 million in the quarter, down 38% from the year-ago quarter's
income of $6.7 million, mainly due to investments made in
additional manufacturing personnel.
Revenue from the Metal Coil Coating segment increased 2% year
over year to $49.8 million. Operating profit was $4.8 million in
the quarter, down 3% from the prior-year quarter, due to start-up
costs related to the new plant.
The Metal Component segment generated revenues of $147 million,
up 38% year over year. The segment benefited from the
contribution from the company's recent Metl-Span acquisition.
Operating profit for the segment decreased 27.5% to $5.1 million
in the quarter due to increased pricing pressure, integration
costs, ramp-up cost and investments for acquisition.
As of Apr 28, 2013, NCI Building Systems had cash and cash
equivalents of $27.5 million, down from $55 million as of Oct 28,
2012. Long-term debt decreased to $227 million as of Apr 28, 2013
from $236 million as of Oct 28, 2012. Cash used in operating
activities was $4.4 million in the quarter compared with cash
provided by operating activities of $9.9 million in the
Management did not provide any specific guidance for fiscal 2013.
However, the company expects the second half of 2013 to benefit
from strong backlog, current demand and shipping schedules. The
company also expects to grow based on improving market
conditions, strong operating leverage and anticipated recovery in
NCI Building Systems has acquired Metl-Span LLC for $145 million.
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 a distribution
network in North America.
In the second quarter, low-rise non-residential construction
activity, measured in square feet, increased 1.6% from the
comparable period in fiscal 2012. The American Institute of
Architect's Architectural Billing Index published for April 2013
was 49 and the commercial and industrial component of the Index
remained above 50 for the six consecutive month.
According to the current forecast,
) nonresidential construction activity measured in square feet
will be 8% higher in calendar 2013 compared with calendar 2012.
The non-residential construction is showing signs of a
turnaround, which will benefit NCI Building Systems.
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 Rank #5 (Strong Sell). Other companies in the building and
construction industry with favorable Zacks Ranks are
). Each of them holds a Zacks Rank #2 (Buy).