8-K

UNITED STATES

SECEURITIES 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: November 7, 2016

Continental Building Products, Inc.

(Exact name of registrant as specified in its charter)

Delaware	1-36293	61-1718923
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S Employer Identification No.)

12950 Worldgate Drive, Suite 700, Herndon, VA	20170
(Address of principal executive offices)	(Zip Code)

(703) 480-3800

(Registrant's telephone number, including the area code)

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 (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operation and Financial Condition.

On November 7, 2016, Continental Building Products, Inc. (the “Company”) issued a press release to announce its financial results for the quarter ended September 30, 2016. A copy of the press release is attached as Exhibit 99.1. The information included or incorporated in Item 2.02 of this current report, including Exhibit 99.1, is being furnished to the Securities and Exchange Commission and shall not be deemed "filed" for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended (the "Exchange Act") or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Exchange Act or the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits. Press Release issued by Continental Building Products, Inc. dated November 7, 2016.

Number	Description
99.1	Press Release issued by Continental Building Products, Inc. dated November 7, 2016.

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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 hereunto duly authorized.

	Continental Building Products, Inc.
November 7, 2016	/s/ Timothy A. Power
Date	Timothy A. Power
	Senior Vice President and General Counsel

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Exhibit Index

Number	Description
99.1	Press Release issued by Continental Building Products, Inc. dated November 7, 2016.

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EX-99.1

Continental Building Products Reports Third Quarter 2016 Results

Herndon, Virginia, November 7, 2016. Continental Building Products, Inc. (NYSE: CBPX) (the Company), a leading manufacturer of wallboard and gypsum-based products, announced today results for the third quarter ended September 30, 2016.

Highlights of Third Quarter 2016 as Compared to Third Quarter 2015

• Net sales of $114.6 million rose by 5.9%

• Cash flow from operations increased to $35.6 million, up 25.3%

• Net income improved to $6.2 million compared to $4.2 million

• Adjusted EBITDA¹ of $30.4 million down from $33.7 million

• Earnings per share increased 50.0% to $0.15; Adjusted earnings per share¹ remained constant at $0.25

• Deployed $11.4 million to repurchase 520,843 shares of common stock

• Extended debt maturity and reduced interest rate through successful refinancing

“We are pleased to achieve another quarter of revenue growth and significant cash flow generation reflecting the strength of our highly efficient, low cost operations,” stated Jay Bachmann, Continental’s Chief Executive Officer. “For the third consecutive quarter, we experienced stronger demand in our markets east of the Mississippi which drove the 6% net sales growth versus last year. We converted all of our adjusted EBITDA into operating cash flow and deployed over $11 million for share repurchases to enhance shareholder returns. As we look to the remainder of 2016, we remain committed to executing our operational initiatives and taking advantage of value-enhancing opportunities.”

Third Quarter 2016 Results vs. Third Quarter 2015

Wallboard volumes increased to 634 million square feet (MMSF), compared to 567 MMSF in the prior year quarter, helped by continued stronger demand in the construction markets, specifically new residential and overall in the Southeast. Net sales were up 5.9% to $114.6 million on higher volumes, compared to $108.2 million in the prior year quarter, partially offset by lower average mill net price² of $144.34, compared to $153.05 in the prior year quarter. Average mill net pricewas essentially flat on a sequential quarter basis when compared to $144.86 in the second quarter 2016.

Gross profit was $27.8 million, compared to $30.0 million in the prior year quarter. Gross margin declined to 24.3% compared to 27.7% in the prior year quarter, primarily as a result of higher raw material and maintenance costs.

¹ See the financial schedules at the end of this press release for a reconciliation of adjusted EBITDA, adjusted EBITDA margin, adjusted net income and adjusted earnings per share, which are non-GAAP financial measures, to relevant GAAP financial measures.

² Mill net price represents average selling price per thousand square feet (MSF), net of freight and delivery costs.

SG&A expense was $9.2 million compared to $9.0 million in the prior year quarter, or 8.1% as a percentage of net sales compared to 8.3% in the prior year quarter.

Operating income was $18.6 million, compared to $11.1 million in the prior year quarter.

Other expenses, net was $5.9 million which primarily consists of $5.8 million of debt refinancing expenses which includes non-cash write-off of debt issuance costs related to the first lien credit agreement.

Interest expense decreased24.3% to $3.1 million, compared to $4.2 million in the prior year quarter, reflecting our continued reduction of long-term debt throughout the past twelve months and our debt refinancing in August 2016.

Net income for the third quarter 2016 grew to $6.2 million, or $0.15 per share, compared to $4.2 million, or $0.10 per share, in the third quarter 2015. Adjusted net income¹ decreased slightly to $10.1 million, compared to $10.7 million in the prior year quarter. Adjusted earnings per share¹ remained constant at $0.25 per share for the third quarter 2016 compared to the prior year quarter. Adjusted EBITDA¹ was $30.4 million, compared to $33.7 million in the prior year quarter.

Balance Sheet and Cash Flow

In August, 2016, the Company closed the refinancing of its entire outstanding long term debt. The new borrowings consist of a $275.0 million senior secured term loan facility and a $75.0 million senior secured revolving credit facility. Borrowings under the new term loan bear interest at a floating rate based on LIBOR, with a 0.75% floor, plus 2.75%, compared to the previous term loan which had a floating rate based on LIBOR, with a 1.00% floor, plus 3.00%. Additionally, the new term loan has a final maturity in 2023, compared to the prior term loan which was due in 2020.

As of September 30, 2016, the Company had cash of $34.8 million and total outstanding borrowing under the credit agreement of $274.3 million. During the three months ended September 30, 2016, the Company generated cash flows from operations of $35.6 million and incurred $3.1 million of capital expenditures and software development costs.

During the third quarter of 2016, the Company repurchased 520,843 shares of its common stock at an aggregate purchase price of $11.4 million as part of its $100.0 million share repurchase program. For the nine months ended September 30, 2016, the Company repurchased a total of 1,803,982 shares of its common stock at an aggregate purchase price of $33.4 million, representing 4.3% of its outstanding shares as of December 31, 2015.

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Investor Conference Webcast and Conference Call:

The Company will host a webcast and conference call on Monday, November 7, 2016 at 5:00 p.m. Eastern time to review third quarter 2016 financial results and discuss recent events and conduct a question-and-answer period. The live webcast will be available on the Investor Relations section of the Company’s website at www.continental-bp.com. To participate in the call, please dial 877-407-3982 (domestic) or 201-493-6780 (international). A replay of the conference call will be available through December 7, 2016, by dialing 877-870-5176 (domestic) or 858-384-5517 (international) and entering the passcode 13634638.

About Continental Building Products

Continental Building Products is a leading North American manufacturer of gypsum wallboard and complementary finishing products. The Company is headquartered in Herndon, Virginia with operations serving the residential, commercial and repair and remodel construction markets primarily in the eastern United States and eastern Canada. For additional information, visit www.continental-bp.com.

Forward-Looking Statements

This press release contains forward-looking statements. Forward-looking statements may be identified by the use of words such as “anticipate”, “believe”, “expect”, “estimate”, “plan”, “outlook”, and “project” and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on historical information available at the time the statements are made and are based on management’s reasonable belief or expectations with respect to future events, and are subject to risks and uncertainties, many of which are beyond the Company’s control, that could cause actual performance or results to differ materially from the belief or expectations expressed in or suggested by the forward-looking statements. Forward-looking statements speak only as of the date on which they are made and the Company undertakes no obligation to update any forward-looking statement to reflect future events, developments or otherwise, except as may be required by applicable law. Investors are referred to the Company’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year 2015 and its Quarterly Reports on Form 10-Q for additional information regarding the risks and uncertainties that may cause actual results to differ materially from those expressed in any forward-looking statement.

Contact Information:

Investor Relations:

Tel.: 703-480-3980

Investorrelations@continental-bp.com

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Continental Building Products, Inc.

Consolidated Statements of Operations

(unaudited)

	For the Three Months Ended						For the Nine Months Ended
	September 30, 2016			September 30, 2015			September 30, 2016			September 30, 2015
	(in thousands, except share data and per share amounts)
Net sales	$	114,558		$	108,150		$	343,158		$	311,322
Costs, expenses and other income:
Cost of goods sold	86,756			78,151			250,455			231,342
Selling and administrative	9,241			9,008			28,364			26,799
Long Term Incentive Plan funded by Lone Star	—			9,933			—			29,946
Total costs and operating expenses	95,997			97,092			278,819			288,087
Operating income	18,561			11,058			64,339			23,235
Other expense, net	(5,900		)	(283		)	(5,740		)	(700		)
Interest expense, net	(3,146		)	(4,154		)	(10,492		)	(12,559		)
Income before losses from equity method investment and provision for income tax	9,515			6,621			48,107			9,976
Losses from equity method investment	(291		)	(278		)	(726		)	(530		)
Income before provision for income taxes	9,224			6,343			47,381			9,446
Provision for income taxes	(3,014		)	(2,104		)	(15,948		)	(3,313		)
Net income	$	6,210		$	4,239		$	31,433		$	6,133
Net income per share:
Basic	$	0.15		$	0.10		$	0.77		$	0.14
Diluted	$	0.15		$	0.10		$	0.77		$	0.14
Weighted average shares outstanding:
Basic	40,318,741			42,999,654			40,836,000			43,556,876
Diluted	40,388,185			43,057,749			40,879,809			43,596,978

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Continental Building Products, Inc.

Consolidated Balance Sheets

	September 30, 2016			December 31, 2015
	(unaudited)
	(in thousands)
Assets:
Cash and cash equivalents	$	34,758		$	14,729
Receivables, net	34,531			35,812
Inventories	26,965			27,080
Prepaid and other current assets	3,090			6,448
Total current assets	99,344			84,069
Property, plant and equipment, net	307,443			326,407
Customer relationships and other intangibles, net	85,105			94,835
Goodwill	119,945			119,945
Equity method investment	8,297			9,262
Debt issuance costs	704			450
Total Assets	$	620,838		$	634,968
Liabilities and Shareholders' Equity:
Liabilities:
Accounts payable	$	27,190		$	22,788
Accrued and other liabilities	12,626			12,334
Notes payable, current portion	1,746			—
Total current liabilities	41,562			35,122
Deferred taxes and other long-term liabilities	12,466			12,537
Notes payable, non-current portion	265,053			286,543
Total Liabilities	319,081			334,202
Equity:
Undesignated preferred stock, par value $0.001 per share; 10,000,000 shares authorized, no shares issued and outstanding at September 30, 2016 and December 31, 2015	—			—
Common stock, $0.001 par value per share; 190,000,000 shares authorized; 44,191,370 and 44,145,080 shares issued at September 30, 2016 and December 31, 2015, respectively; 39,992,339 and 41,750,031 shares outstanding at September 30, 2016 and December 31, 2015, respectively	44			44
Additional paid-in capital	321,865			319,817
Less: Treasury stock	(81,906		)	(48,479		)
Accumulated other comprehensive loss	(4,403		)	(5,341		)
Accumulated earnings	66,157			34,725
Total Equity	301,757			300,766
Total Liabilities and Equity	$	620,838		$	634,968

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Continental Building Products, Inc.

Consolidated Statements of Cash Flows

(unaudited)

	For the Nine Months Ended
	September 30, 2016			September 30, 2015
	(in thousands)
Cash flows from operating activities:
Net income	$	31,433		$	6,133
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	35,656			38,931
Bad debt expense/(recovery)	15			(250		)
Amortization of debt issuance costs and debt discount	1,651			1,742
Loss on disposal of property, plant and equipment	41			—
Losses from equity method investment	726			530
Loss on debt extinguishment	5,802			—
Stock-based compensation	1,769			730
Deferred taxes	340			(491		)
Change in assets and liabilities:
Receivables	1,303			2,654
Inventories	242			(2,401		)
Prepaid expenses and other current assets	3,147			1,178
Accounts payable	2,942			1,955
Accrued and other current liabilities	502			275
Other long term liabilities	(477		)	(142		)
Net cash provided by operating activities	85,092			50,844
Cash flows from investing activities:
Capital expenditures	(4,797		)	(2,851		)
Software purchased or developed	(386		)	(880		)
Capital contributions to equity method investment	(259		)	(4		)
Distributions from equity method investment	498			797
Net cash used in investing activities	(4,944		)	(2,938		)
Cash flows from financing activities:
Capital contribution from Lone Star Funds	—			29,750
Proceeds from exercise of stock options	20			—
Proceeds from debt refinancing	275,000			—
Disbursements for debt refinancing	(271,988		)	—
Payments of financing costs	(4,424		)	—
Principal payments for First Lien Credit Agreement	(25,688		)	(35,000		)
Payments to repurchase common stock	(33,427		)	(40,035		)
Net cash used in financing activities	(60,507		)	(45,285		)
Effect of foreign exchange rates on cash and cash equivalents	388			(990		)
Net change in cash and cash equivalents	20,029			1,631
Cash, beginning of period	14,729			15,627
Cash, end of period	$	34,758		$	17,258

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Reconciliation of Non-GAAP Measures

EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, and Adjusted Earnings Per Share have been presented in this press release as supplemental measures of financial performance that are not required by, or presented in accordance with, Generally Accepted Accounting Principles (GAAP). This release presents EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, and Adjusted Earnings Per Share, as supplemental performance measures because management believes that they facilitate a comparative assessment of the Company’s operating performance relative to its performance based on results under GAAP while isolating the effects of some items that vary from period to period without any correlation to core operating performance and eliminate certain charges that management believes do not reflect the Company’s operations and underlying operational performance. Furthermore, the Company's Board of Director compensation committee uses non-GAAP EBITDA to evaluate management's compensation. Management also believes that EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, and Adjusted Earnings Per Share are useful to investors because they allow investors to view the business through the eyes of management and the Board of Directors, facilitating comparison of results across historical periods.

EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, and Adjusted Earnings Per Share may not be comparable to similarly titled measures of other companies because other companies may not calculate EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, and Adjusted Earnings Per Share in the same manner. EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, and Adjusted Earnings Per Share are not measurements of the Company’s financial performance under GAAP and should not be considered in isolation or as alternatives to net income or earnings per share determined in accordance with GAAP or any other financial statement data presented as indicators of financial performance or liquidity, each as calculated and presented in accordance with GAAP.

Reconciliation of GAAP Net Income to Non-GAAP EBITDA and Adjusted EBITDA
	For the Three Months Ended						For the Nine Months Ended
	September 30, 2016			September 30, 2015			September 30, 2016			September 30, 2015
	(in thousands)
Net income	$	6,210		$	4,239		$	31,433		$	6,133
Adjustments:
Other expense, net	5,900			283			5,740			700
Interest expense, net	3,146			4,154			10,492			12,559
Losses from equity method investment	291			278			726			530
Provision for income taxes	3,014			2,104			15,948			3,313
Depreciation and amortization	11,868			12,661			35,656			38,931
EBITDA—Non-GAAP Measure	30,429			23,719			99,995			62,166
Long Term Incentive Plan Funded by Lone Star (a)	—			9,933			—			29,946
Adjusted EBITDA—Non-GAAP Measure	$	30,429		$	33,652		$	99,995		$	92,112
Adjusted EBITDA Margin - Adjusted EBITDA as a percentage of net sales - Non-GAAP Measure	26.6		%	31.1		%	29.1		%	29.6		%

(a) Represents expense recognized pursuant to the Long Term Incentive Plan sponsored by an affiliate of Lone Star Funds. The amounts were funded by the affiliate of Lone Star Funds.

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Reconciliation of GAAP Net Income and Earnings Per Share (EPS) to Non-GAAP Adjusted Net Income and Adjusted EPS
	For the Three Months Ended				For the Nine Months Ended
	September 30, 2016		September 30, 2015		September 30, 2016		September 30, 2015
	(dollars in thousands, except per share amounts)
Net income - GAAP Measure	$	6,210	$	4,239	$	31,433	$	6,133
Expense of original issue discount and deferred financing fees for debt refinancing, after tax	3,842		—		3,842		—
Long Term Incentive Plan funded by Lone Star, after tax (a)	—		6,456		—		19,465
Adjusted net income - non-GAAP measure	$	10,052	$	10,695	$	35,275	$	25,598
Earnings per share - GAAP measure	$	0.15	$	0.10	$	0.77	$	0.14
Expense of original issue discount and deferred financing fees for debt refinancing, after tax (b)	0.10		—		0.09		—
Long Term Incentive Plan funded by Lone Star, after tax	—		0.15		—		0.45
Adjusted earnings per share - non-GAAP measure	$	0.25	$	0.25	$	0.86	$	0.59

(a) Represents expense recognized pursuant to the LTIP. All amounts were funded by an affiliate of Lone Star Funds.

(b) The earnings per share for the three months and nine month ended September 30, 2016 differ due to the required method of computing the weighted average shares outstanding in interim periods.

Other Financial and Operating Data:
	For the Three Months Ended				For the Nine Months Ended
	September 30, 2016		September 30, 2015		September 30, 2016		September 30, 2015
	(dollars in thousands, except mill net)
Capital expenditures and software purchased or developed	$	3,062	$	1,444	$	5,183	$	3,731
Wallboard sales volume (million square feet)	634		567		1,894		1,603
Mill net sales price (a)	$	144.34	$	153.05	$	144.61	$	155.68

(a) Mill net sales price represents average selling price per thousand square feet net of freight and delivery costs.

Interim Volumes and Mill Net Prices (Unaudited)
	For the Three Months Ended
	September 30, 2015		December 31, 2015		March 31, 2016		June 30, 2016		September 30, 2016
Volumes (million square feet)	567		596		617		643		634
Mill net Price per MSF - Total	$	153.05	$	148.37	$	144.62	$	144.86	$	144.34
Mill net Price per MSF - U.S. only	$	157.05	$	151.74	$	147.54	$	148.15	$	147.96

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