8-K

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): March 8, 2016

________________

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 communication 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))

Item 2.02. Results of Operations and Financial Condition.

On March 8, 2016, NCI Building Systems, Inc. (“NCI”) issued a press release (the “Press Release”) announcing NCI’s financial results for the fiscal first quarter ended January 31, 2016. A copy of the Press Release is attached as Exhibit 99.1.

NCI’s Press Release includes Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Operating Income (Loss), Adjusted Net Income Applicable to Common Shares and Adjusted Net Income Per Diluted Common Share, which are non-GAAP financial measures. Adjusted EBITDA excludes restructuring and impairment charges, strategic development and acquisition related costs, gain on legal settlements, gain from bargain purchase, asset recovery, fair value adjustment of acquired inventory, share-based compensation, gain on insurance recovery and secondary offering costs. Adjusted Operating Income (Loss) excludes restructuring and impairment charges, strategic development and acquisition related costs, asset recovery and short lived acquisition method fair value adjustments. Adjusted Net Income Applicable to Common Shares and Adjusted Net Income Per Diluted Common Share exclude restructuring and impairment charges, net of taxes; strategic development and acquisition related costs, net of taxes; short lived acquisition method fair value adjustments, net of taxes; asset recovery, net of taxes; and gain from bargain purchase. Adjusted EBITDA is calculated based on the terms contained in NCI’s term loan credit agreement. Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by sales. Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Operating Income (Loss), Adjusted Net Income Applicable to Common Shares and Adjusted Net Income Per Diluted Common Share are measures used by management and, therefore, provided to investors to provide comparability between periods of underlying operational results. Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Operating Income (Loss), Adjusted Net Income Applicable to Common Shares and Adjusted Net Income Per Diluted Common Share should not be considered in isolation or as substitutes for net income (loss), operating income (loss), net income (loss) applicable to common shares or net income (loss) per diluted common share 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.

Attached hereto as Exhibit 99.2 is financial information and commentary by Mark E. Johnson, Executive Vice President, Chief Financial Officer and Treasurer of NCI, regarding results for the fiscal first quarter ended January 31, 2016 and forward-looking statements relating to the fiscal second quarter ending May 1, 2016 (the “CFO Commentary”). The CFO Commentary will be posted on the company’s website, www.ncibuildingsystems.com, on March 8, 2016.

The CFO Commentary includes Adjusted EBITDA and Adjusted Operating Income (Loss), which are non-GAAP financial measures. Adjusted EBITDA excludes restructuring and impairment charges, strategic development and acquisition related costs, gain on legal settlements, gain from bargain purchase, asset recovery, fair value adjustment of acquired inventory, share-based compensation, gain on insurance recovery and secondary offering costs. Adjusted Operating Income (Loss) excludes restructuring and impairment charges, strategic development and acquisition related costs, asset recovery and short lived acquisition method fair value adjustments. Adjusted EBITDA and Adjusted Operating Income (Loss) are measures used by management and, therefore, provided to investors to provide comparability between periods of underlying operational results. Adjusted EBITDA and Adjusted Operating Income (Loss) should not be considered in isolation or as a substitute for net income (loss) or operating income (loss) 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 CFO Commentary furnished as Exhibit 99.2 hereto.

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	Press Release dated March 8, 2016
99.2	CFO Commentary dated March 8, 2016

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

Dated: March 8, 2016

EXHIBIT INDEX

Exhibit Number	Description
99.1	Press Release dated March 8, 2016
99.2	CFO Commentary dated March 8, 2016

EX-99.1

Exhibit 99.1

NEWS RELEASE

NCI Building Systems Reports Strong

First Quarter 2016 Fiscal Year Results

HOUSTON, March 8, 2016 – NCI Building Systems, Inc. (NYSE: NCS) (“NCI” or the “Company”) today reported financial results for its first fiscal quarter ended January 31, 2016.

First Quarter 2016 Financial and Operational Highlights:

• Sales rose 14.6% to $370.0 million, compared to $322.9 million in last year’s first quarter, primarily driven by the acquisition of CENTRIA that closed in January 2015.

• Gross profit increased 24.4% to $89.7 million and gross margin expanded 190 basis points year-over-year to 24.2%.

• Net income per diluted common share was $0.08, which included several offsetting special items that had a $0.01 favorable net impact on results.

• Adjusted EBITDA increased 48.4% to $29.1 million and Adjusted EBITDA margin expanded 180 basis points to 7.9% compared to the prior year’s first quarter.

• Buildings segment backlog grew 6% year-over-year and the consolidated backlog increased to $477.8 million, which now includes CENTRIA’s backlog of $117.8 million.

Norman C. Chambers, Chairman and Chief Executive Officer, commented, “Our first quarter results reflect the improvements we expected, as we continue to enhance our ability to manage our businesses despite market headwinds. We are pleased to have achieved both gross margin expansion and adjusted EBITDA growth, marking the seventh consecutive quarter of year-over-year improvement. Our solid financial and operational performance helped us deliver our best first quarter results since 2008.

NCI’s improved performance over fiscal 2015, which took place against a backdrop of choppy nonresidential markets and declining steel prices, is a direct result of our focused execution across our commercial, manufacturing, and supply chain initiatives. Our simplified organizational structure in both our manufacturing and commercial operations has enabled us to achieve an improved level of integration and productivity that continues to drive meaningful earnings growth.”

First Quarter 2016 Results

First quarter 2016 sales increased to $370.0 million, or 14.6%, from $322.9 million in last year's first quarter, due mainly to increased volumes across all three segments and the impact of the CENTRIA acquisition. While maintaining commercial discipline across each brand, revenue growth was lower than the underlying increase in volumes due to the pass-through of lower steel costs of approximately $15.0 million, compared to the year ago quarter. Each of the three operating segments produced year-over-year growth in operating income, with particularly strong results in the Components and Buildings group segments.

Gross profit increased 24.4% to $89.7 million from $72.1 million in the first quarter of 2015, while gross profit margin expanded 190 basis points to 24.2%, compared to 22.3% in the prior year period. The improved margin performance was driven largely by a combination of commercial discipline, effective supply chain initiatives and an improved product portfolio mix, including the investments in insulated metal panels (IMPs).

Engineering, selling, general and administrative (ESG&A) expenses increased 11.1% to $69.8 million from $62.9 million in the first quarter of 2015 due largely to the inclusion of CENTRIA. As a percentage of revenues, ESG&A expenses decreased approximately 60 basis points to 18.9% in the 2016 first quarter compared to 19.5% in the prior year’s period.

Adjusted operating income, a non-GAAP measure, increased 91.2% to $16.7 million in the current quarter from $8.7 million in the first quarter of 2015 due to the expansion in gross profit margin. On a GAAP basis, operating income increased to $15.3 million, or 233.8%, compared to $4.6 million in the prior year’s first quarter. Please see the reconciliation of Adjusted Operating Income, Adjusted EBITDA and Adjusted Net Income in the accompanying financial tables.

1

Adjusted EBITDA, a non-GAAP measure, defined in accordance with the Company's term loan credit agreement as earnings before interest, taxes, depreciation and amortization, and other cash and non-cash items, was $29.1 million, up 48.4% from $19.6 million in the prior year’s first quarter. This performance marks a continuation from the fourth quarter 2015, in which Adjusted EBITDA increased 55.6% year-over-year and the first 2016 quarter marks the 7^th consecutive quarter of year-over-year growth in adjusted EBITDA.

First quarter 2016 net income was $5.9 million, or $0.08 per diluted common share, which included $1.3 million of one-time after tax charges related to $0.9 million of restructuring and severance charges and $0.4 million of strategic development and acquisition related costs pertaining to acquisitions that have been completed. Offsetting these charges was an after tax gain of $0.4 million, reflecting the asset recovery on the sale of an industrial facility in California, as well as a $1.9 million non-taxable bargain purchase gain recorded in association with the purchase of a Canadian IMP facility during the first quarter of fiscal 2016.

Interest expense increased to $7.9 million in the first quarter of 2016, compared to $4.0 million in last year’s first quarter as a result of the $250 million 8.25% senior notes issued to finance the CENTRIA acquisition.

Cash and cash equivalents at quarter’s end was $73.8 million compared to $50.7 million at the comparable period in fiscal 2015 and sequentially was $99.7 million at the end of the fourth quarter of fiscal 2015. The Company paid down an additional $10 million under its term loan in the first quarter of fiscal 2016, and expects to make total debt repayments of $40 million during the current fiscal year. NCI’s net debt leverage ratio at the end of the first fiscal quarter improved to 2.6x, moving closer to the pre- CENTRIA acquisition net leverage of 2.2x. In addition, the Company’s $150.0 million asset base lending facility remained undrawn as of January 31, 2016.

First Quarter 2016 Segment Performance

Third party sales in the Buildings group increased slightly to $146.0 million in the first quarter from $144.5 million in the prior year quarter, primarily due to higher volumes offset by lower steel cost pass-through. Adjusted operating income increased 27.6% to $12.2 million in the current quarter, compared to $9.6 million in the first quarter of fiscal 2015. The improved margins in the Buildings segment were driven by improvements in commercial discipline, supply chain management and manufacturing efficiencies.

The Components group generated $202.9 million in third-party sales during the quarter, an increase of 31.7% from $154.0 million in the first quarter of fiscal 2015, led by CENTRIA’s contribution, as well as continued strength of the legacy single skin and roll-up door product lines. Adjusted operating income increased to $16.8 million from $9.9 million in the same quarter last fiscal year. The Components segment’s profitability benefited from CENTRIA’s contribution, an improved product mix favoring insulated metal panels and manufacturing efficiencies. During the first quarter of fiscal 2016, CENTRIA contributed an incremental $45.4 million to the growth in sales and $1.5 million to the growth in Adjusted Operating Income.

Third party sales in the Coatings group were $21.2 million, a 13.3% decline from $24.4 million in last year’s first quarter. Adjusted operating income increased 21.2% to $4.8 million in the first quarter of fiscal 2016, compared to $4.0 million reported in the same period last year. The Coatings segment’s adjusted operating income profitability was driven primarily by increased operating leverage on higher total volumes processed, combined with cost reductions from restructuring efforts.

Market Commentary

Current market data continues to show subdued activity in nonresidential markets. According to Dodge Data & Analytics, low rise nonresidential new construction starts (0-5 stories), as measured in square feet reported to date, were down as much as 10% for the first quarter of our fiscal 2016 as compared to the first quarter of fiscal 2015. Based on expected subsequent revisions, we would expect that the final reported starts will be revised upward to range between slightly down to flat for the first quarter. However, leading indicators for low-rise, nonresidential construction activity continue to indicate positive momentum for fiscal year 2016, as discussed below.

The American Institute of Architects’ (AIA) Architecture Mixed Use Index has been a 9 to 11 month leading indicator for low rise nonresidential starts. Index readings over 50 are an indicator of year-over-year growth. Over the last 23 months, the Mixed Use Index has been above 50 in 14 of those months. Recently, this index decreased from 49.2 in November to 46.6 in December but increased 2.4 points to 49.0 in January 2016.

The Dodge Residential single family starts measured in square feet, which has been a 12 to 14 month leading indicator for square footage of nonresidential low rise starts, has shown year-over-year growth in 23 of the last 27 months.

Outlook

NCI expects to deliver the eighth consecutive quarter of year-over-year improvement in gross profit margin and Adjusted EBITDA in the second quarter of fiscal 2016. For the full year, NCI continues to expect 2016 to be a better year than 2015 in terms of both gross margin and Adjusted EBITDA. Similar to past years’ seasonal trends, the Company expects the second half performance in fiscal 2016 to be stronger than the first half.

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For additional information and a more detailed outlook on the second quarter, please see the CFO Commentary at www.ncibuildingsystems.com under the “Investors” section.

Conference Call Information

The NCI Building Systems, Inc. first quarter 2016 conference call is scheduled for Wednesday, March 9, 2016, 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 replay, please dial 1-201-612-7415 or 1-877-660-6853 (toll-free) and the passcode 13630696# when prompted. The taped replay will be available two hours after the call through March 16, 2016.

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, Mexico and China with additional sales and distribution offices throughout the United States and Canada. For more information visit www.ncibuildingsystems.com.

Contact:

Darcey Matthews

Vice President, Investor Relations

281-897-7710

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 include, but are not limited to, the Company’s expectation of improvement in gross profit margin and Adjusted EBITDA, the Company’s expectation to generate significant cash from operating activities in fiscal 2016, the outlook for both operating performance and the nonresidential markets for fiscal 2016, the Company’s expectation of year-over-year improvement in gross profit margin and Adjusted EBITDA, and the Company’s expectation to reduce its debt by $40 million in fiscal 2016. 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 or refinance our existing debt, including the 8.25% senior notes due 2023, 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; our ability to make strategic acquisitions accretive to earnings; retention and replacement of 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; our ability to integrate the acquisition of CENTRIA with our business and to realize the anticipated benefits of such acquisition; 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 November 1, 2015, which identifies 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.

###

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NCI BUILDING SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

	Fiscal Three Months Ended
	January 31, 2016			February 1, 2015
Sales	$	370,014		$	322,926
Cost of sales	281,023			250,787
Asset recovery	(725		)	—
Gross profit	89,716			72,139
	24.2		%	22.3		%
Engineering, selling, general and administrative expenses	69,850			62,869
Intangible asset amortization	2,416			1,493
Strategic development and acquisition related costs	681			1,729
Restructuring and impairment charges	1,510			1,477
Income from operations	15,259			4,571
Gain from bargain purchase	1,864			—
Interest income	22			7
Interest expense	(7,869		)	(3,987		)
Foreign exchange loss	(742		)	(1,401		)
Other expense, net	(189		)	—
Income (loss) before income taxes	8,345			(810		)
Provision (benefit) from income taxes	2,453			(490		)
	29.4		%	60.4		%
Net income (loss)	$	5,892		$	(320	)
Net income allocated to participating securities	(57		)	—
Net income (loss) applicable to common shares	$	5,835		$	(320	)
Income (loss) per common share:
Basic	$	0.08		$	(0.00	)
Diluted	$	0.08		$	(0.00	)
Weighted average number of common shares outstanding:
Basic	73,261			73,070
Diluted	73,771			73,070
Increase in sales	14.6		%	3.9		%
Engineering, selling, general and administrative expenses percentage	18.9		%	19.5		%

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NCI BUILDING SYSTEMS, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands)

	January 31, 2016			November 1, 2015
	(Unaudited)
ASSETS
Cash and cash equivalents	$	73,849		$	99,662
Restricted cash	775			682
Accounts receivable, net	141,664			166,800
Inventories, net	150,563			157,828
Deferred income taxes	27,176			27,390
Prepaid expenses and other	29,996			31,834
Investments in debt and equity securities, at market	5,454			5,890
Assets held for sale	3,982			6,261
Total current assets	433,459			496,347
Property, plant and equipment, net	260,203			257,892
Goodwill	158,106			158,026
Intangible assets, net	153,991			156,395
Other assets	11,083			11,069
Total assets	$	1,016,842		$	1,079,729
LIABILITIES AND STOCKHOLDERS' EQUITY
Note payable	$	—		$	513
Accounts payable	110,298			145,917
Accrued compensation and benefits	56,007			62,200
Accrued interest	1,359			6,389
Accrued Income taxes	231			9,296
Other accrued expenses	94,966			97,309
Total current liabilities	262,861			321,624
Long-term debt, net	434,147			444,147
Deferred income taxes	23,647			20,807
Other long-term liabilities	20,966			21,175
Total long-term liabilities	478,760			486,129
Common stock	737			745
Additional paid-in capital	633,220			640,767
Accumulated deficit	(347,841		)	(353,733		)
Accumulated other comprehensive loss	(8,621		)	(8,280		)
Treasury stock, at cost	(2,274		)	(7,523		)
Total stockholders' equity	275,221			271,976
Total liabilities and stockholders' equity	$	1,016,842		$	1,079,729

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NCI BUILDING SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Fiscal Three Months Ended
	January 31, 2016			February 1, 2015
Cash flows from operating activities:
Net income (loss)	$	5,892		$	(320	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization	10,747			9,731
Deferred financing cost amortization	477			113
Share-based compensation expense	2,582			2,933
Gain from bargain purchase	(1,864		)	—
Asset recovery	(725		)	—
(Recovery of) provision for doubtful accounts	1,467			(149		)
Provision for deferred income taxes	1,992			5,602
Excess tax benefits (shortfalls) from share-based compensation arrangements	261			(394		)
Changes in operating assets and liabilities:
Accounts receivable	23,669			28,395
Inventories	7,469			(6,021		)
Income tax receivable	—			(1,374		)
Prepaid expenses and other	1,899			(264		)
Accounts payable	(35,619		)	(17,949		)
Accrued expenses	(22,100		)	(22,521		)
Other, net	(347		)	7
Net cash used in operating activities	(4,200		)	(2,211		)
Cash flows from investing activities:
Acquisitions, net of cash required	(3,071		)	(247,123		)
Capital expenditures	(5,772		)	(5,002		)
Proceeds from sale of property, plant and equipment	3,066			—
Net cash used in investing activities	(5,777		)	(252,125		)
Cash flows from financing activities:
Proceeds from stock options exercised	—			353
Deposit of restricted cash	(93		)	—
Issuance of debt	—			250,000
Payments on term loan	(10,000		)	(596		)
Payments on note payable	(514		)	(417		)
Payment of financing costs	—			(9,218		)
Purchases of treasury stock	(4,627		)	(1,517		)
Excess tax benefits (shortfalls) from share-based compensation arrangements	(261		)	394
Net cash provided by (used in) financing activities	(15,495		)	238,999
Effect of exchange rate changes on cash and cash equivalents	(341		)	(598		)
Net decrease in cash and cash equivalents	(25,813		)	(15,935		)
Cash and cash equivalents at beginning of period	99,662			66,651
Cash and cash equivalents at end of period	$	73,849		$	50,716

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NCI Building Systems, Inc.

Business Segments

(In thousands)

(Unaudited)

	Fiscal Three Months Ended January 31, 2016				Fiscal Three Months Ended February 1, 2015				$ Inc/(Dec)			% Change
				% of Total				% of Total
Sales:				Sales				Sales
Engineered building systems	$	148,975		34	$	149,799		39	$	(824	)	(0.6	)%
Metal components	230,456			54	172,789			46	57,667			33.4	%
Metal coil coating	51,206			12	55,610			15	(4,404		)	(7.9	)%
Total sales	430,637			100	378,198			100	52,439			13.9	%
Less: Intersegment sales	60,623			14	55,272			15	5,351			9.7	%
Total net sales	$	370,014		86	$	322,926		85	$	47,088		14.6	%
				% of				% of
Operating income (loss):				Sales				Sales
Engineered building systems	$	12,462		8	$	8,718		6	$	3,744		42.9	%
Metal components	16,104			7	8,336			5	7,768			93.2	%
Metal coil coating	4,819			9	3,977			7	842			21.2	%
Corporate	(18,126		)	—	(16,460		)	—	(1,666		)	(10.1	)%
Total operating income (% of sales)	$	15,259		4	$	4,571		1	$	10,688		233.8	%

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NCI BUILDING SYSTEMS, INC.

BUSINESS SEGMENTS

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

RECONCILIATION OF OPERATING INCOME (LOSS) TO ADJUSTED OPERATING INCOME (LOSS) EXCLUDING SPECIAL CHARGES

FISCAL THREE MONTHS ENDED JANUARY 31, 2016 AND FEBRUARY 1, 2015

(In thousands)

(Unaudited)

	Fiscal Three Months Ended January 31, 2016
	Engineered Building Systems			Metal Components		Metal Coil Coating		Corporate			Consolidated
Operating income (loss), GAAP basis	$	12,462		$	16,104	$	4,819	$	(18,126	)	$	15,259
Restructuring and impairment charges	500			285		—		725			1,510
Strategic development and acquisition related costs	—			366		—		315			681
Asset recovery	(725		)	—		—		—			(725		)
Adjusted operating income (loss)(1)	$	12,237		$	16,755	$	4,819	$	(17,086	)	$	16,725

	Fiscal Three Months Ended February 1, 2015
	Engineered Building Systems		Metal Components		Metal Coil Coating		Corporate			Consolidated
Operating income (loss), GAAP basis	$	8,718	$	8,336	$	3,977	$	(16,460	)	$	4,571
Restructuring and impairment charges	871		606		—		—			1,477
Strategic development and acquisition related costs	—		—		—		1,729			1,729
Short lived acquisition method fair value adjustments	—		972		—		—			972
Adjusted operating income (loss)(1)	$	9,589	$	9,914	$	3,977	$	(14,731	)	$	8,749

(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 statement of operations.

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NCI BUILDING SYSTEMS, INC.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

COMPUTATION OF EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION,

AMORTIZATION AND OTHER ITEMS (ADJUSTED EBITDA)

(In thousands)

(Unaudited)

	2nd Qtr May 3, 2015				3rd Qtr August 2, 2015		4th Qtr November 1, 2015			1st Qtr January 31, 2016			Trailing 12 Months January 31, 2016
Net income (loss)	$	(7,488	)		$	7,220	$	18,407		$	5,892		$	24,031
Add:
Depreciation and amortization	13,766				14,541		13,354			10,747			52,408
Consolidated interest expense, net	8,280				8,135		7,993			7,847			32,255
Provision (benefit) for income taxes	(4,087		)		3,520		10,029			2,453			11,915
Restructuring and impairment charges	1,759				504		7,611			1,510			11,384
Gain from bargain purchase	—				—		—			(1,864		)	(1,864		)
Strategic development and acquisition related costs	628				701		1,143			681			3,153
Gain on legal settlements	—			—	—		(3,765		)	—			(3,765		)
Fair value adjustments of acquired inventory	775				1,000		—			—			1,775
Share-based compensation	2,201				2,568		1,677			2,582			9,028
Asset recovery	—				—		—			(725		)	(725		)
Adjusted EBITDA(1)	$	15,834			$	38,189	$	56,449		$	29,123		$	139,595

	2nd Qtr May 4, 2014				3rd Qtr August 3, 2014			4th Qtr November 2, 2014		1st Qtr February 1, 2015			Trailing 12 Months February 1, 2015
Net income (loss)	$	(4,905	)		$	6,089		$	14,259	$	(320	)	$	15,123
Add:													—
Depreciation and amortization	8,941				8,994			9,220		9,731			36,886
Consolidated interest expense, net	3,035				3,142			3,053		3,980			13,210
Provision (benefit) for income taxes	(3,057		)		2,837			4,215		(490		)	3,505
Restructuring and impairment charges	—				—			—		1,477			1,477
Gain on insurance recovery	(324		)		—			—		—			(324		)
Secondary offering costs	50				—		—	—		—			50
Strategic development and acquisition related costs	—			—	1,486		1,486	3,512		1,729			6,727
Fair value adjustments of acquired inventory	—				—			—		583			583
Share-based compensation	2,563				2,404			2,022		2,933			9,922
Adjusted EBITDA(1)	$	6,303			$	24,952		$	36,281	$	19,623		$	87,159

(1) The Company's Credit Agreement defines Adjusted EBITDA. Adjusted EBITDA excludes non-cash charges for goodwill and other asset impairments and stock compensation as well as certain non-recurring charges. As such, the historical information is presented in accordance with the definition above. Concurrent with the amendment and restatement of the Term Loan Facility, the Company entered into an Asset-Based Lending facility which has substantially the same definition of Adjusted EBITDA except that the ABL facility caps certain non-recurring charges. 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.

9

NCI BUILDING SYSTEMS, INC.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

ADJUSTED NET INCOME PER DILUTED COMMON SHARE AND NET INCOME (LOSS) COMPARISON

(Unaudited)

	Fiscal Three Months Ended
	January 31, 2016			February 1, 2015
Net income (loss) per diluted common share, GAAP basis	$	0.08		$	(0.00	)
Restructuring and impairment charges, net of taxes	0.01			0.01
Strategic development and acquisition related costs, net of taxes	0.01			0.01
Asset recovery, net of taxes	(0.00		)	—
Gain from bargain purchase	(0.03		)	—
Short lived acquisition method fair value adjustments, net of taxes	—			0.01
Adjusted net income per diluted common shares(1)	$	0.07		$	0.03

	Fiscal Three Months Ended
	January 31, 2016			February 1, 2015
Net income (loss) applicable to common shares, GAAP basis	$	5,835		$	(320	)
Restructuring and impairment charges, net of taxes	921			910
Strategic development and acquisition related costs, net of taxes	415			1,065
Asset recovery, net of taxes	(442		)	—
Gain from bargain purchase	(1,864		)	—
Short lived acquisition method fair value adjustments, net of taxes	—			599
Adjusted net income applicable to common shares(1)	$	4,865		$	2,254

(1) 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 (loss) per diluted common share and net income (loss) applicable to common shares as reported on the face of our consolidated statement of operations.

10

NCI Building Systems, Inc.

Reconciliation of Segment Sales to Third Party Segment Sales

(In thousands)

(Unaudited)

	Fiscal 1st Qtr 2016			Fiscal 1st Qtr 2015			Inc/(Dec)		% Change
Engineered Building Systems
Total Sales	$	148,975	35%	$	149,799	40%	(824	)	(0.6)%
Less: Intersegment sales	3,025			5,305			(2,280	)	(43.0)%
Third Party Sales	$	145,950	39%	$	144,494	45%	1,456		1.0%
Operating Income	$	12,462	9%	$	8,718	6%	3,744		42.9%
Metal Components
Total Sales	$	230,456	54%	$	172,789	46%	57,667		33.4%
Less: Intersegment sales	27,555			18,761			8,794		46.9%
Third Party Sales	$	202,901	55%	$	154,028	48%	48,873		31.7%
Operating Income	$	16,104	8%	$	8,336	5%	7,768		93.2%
Metal Coil Coating
Total Sales	$	51,206	12%	$	55,610	15%	(4,404	)	(7.9)%
Less: Intersegment sales	30,043			31,206			(1,163	)	(3.7)%
Third Party Sales	$	21,163	6%	$	24,404	8%	(3,241	)	(13.3)%
Operating Income	$	4,819	23%	$	3,977	16%	842		21.2%
Consolidated
Total Sales	$	430,637	100%	$	378,198	100%	52,439		13.9%
Less: Intersegment	60,623			55,272			5,351		9.7%
Third Party Sales	$	370,014	100%	$	322,926	100%	47,088		14.6%
Operating Income	$	15,259	4%	$	4,571	1%	10,688		233.8%

11

EX-99.2

Exhibit 99.2

NCI Building Systems

CFO Commentary on First Quarter 2016 Fiscal Year Results

Summary

The 2016 first quarter results compared to last year’s first quarter were as follows:

• Revenue of $370.0 million increased 14.6% from $322.9 million, primarily driven by the acquisition of CENTRIA

• Gross profit margin of 24.2% increased over the comparable prior year period by 190 basis points

• Operating income was $15.3 million compared to $4.6 million in the prior year period

*Adjusted for special items, operating income was $16.7 million compared to $8.7 million in the prior year period

• Net income was $5.9 million compared to the prior year period’s loss of $0.3 million

• *Adjusted EBITDA grew 48.4% to $29.1 million from $19.6 million in the prior year

* Reconciliations of non-GAAP financial measures to the nearest GAAP measure are included in the Company’s financial tables accompanying this CFO Commentary.

Revenue

Revenue of $370.0 million was up by 14.6% from a year ago. This quarter includes the full quarter results of operations for CENTRIA versus only approximately two weeks in the first quarter of 2015. CENTRIA produced revenue during the current period of $53.9 million vs. $8.5 million in the prior year’s first quarter. The performance of our three operating segments was as follows:

• Building’s revenue of $149.0 million decreased by 0.6%, with underlying volumes up by 3.5% versus last year’s first quarter. For the period, third party revenue increased 1.0% with volumes up by 6.2%.

• Component’s revenue of $230.5 million increased by 33.4% versus last year’s first quarter. On a pro forma basis adjusted to include CENTRIA in all periods, total revenue increased by 5.1% and total volumes increased by 12.5% over last year’s first quarter. Similarly adjusted for the period, third party revenue increased 1.7% with volumes up by 8.1%.

• Coater’s revenue of $51.2 million decreased by 7.9%, however total volume processed increased by 5.8% versus last year’s first quarter results. For the period, third party revenue decreased 13.3% with volumes down by 3.0%.

As discussed in the prior quarter, steel costs decreased during the last half of fiscal 2015. While commercial discipline continues to be a fundamental focus, the market-driven pass-through of these lower input costs to our customers reduced our revenue in all three segments and, along with shifting product mix, accounts for the divergence between underlying volumes and revenue. While it is not possible to precisely measure this impact, we estimate that declining steel costs reduced our first quarter reported revenue by approximately $15 million as compared to the same period of the prior year.

Gross Margin

Gross margin increased to $89.7 million, up $17.6 million from last year’s first quarter. Our investments to expand our insulated metal panel offering, improve our manufacturing responsiveness, and our focus on value oriented commercial discipline combined with effective supply chain management are reflected in our improving gross margins. During the first quarter of 2016, we acquired an insulated panel plant in Canada which is currently being refurbished. In addition, as noted on the face of our statement of operations, we recorded an asset recovery benefit of $0.7 million related to the sale of an idled facility in California.

Gross Margin Reconciliation: Q1’15 to Q1’16 (22.3% to 24.2%, up 190 basis points)

[note: point attributions are approximate]

• +    115 bps:    Supply chain effectiveness and commercial discipline

• +    40 bps:    Production and logistic efficiency improvements

• +    30 bps:    Improving product and segment mix, including increased insulated metal panels

• +    20 bps:    Asset recoveries

• -    30 bps:    New plant acquisition and ramp-up costs

1

• +    15 bps:     Other

ESG&A Expenses

ESG&A expenses were $69.8 million, up $7.0 million from the prior year first quarter. ESG&A expenses as a percent of revenues decreased from 19.5% last year to 18.9% in the current quarter. The net increase in ESG&A expenses over the prior year is attributable primarily to the following:

• approximately $6.4 million increase due to the full quarter inclusion of CENTRIA in the current period versus only approximately two weeks in the prior year’s period

ESG&A expenses were below our previous guidance range of $73.0 million to $76.0 million primarily due to the acceleration of cost reductions related to our on-going restructuring programs and the elimination of certain planned expenditures.

Intangible Asset Amortization

Intangible asset amortization costs were $2.4 million compared to $1.5 million in the prior year first quarter. The increase in amortization cost over the prior year relates to the amortization of intangibles from the acquisition of CENTRIA at the end of the first quarter of 2015.

*Adjusted EBITDA

Adjusted EBITDA increased $9.5 million from $19.6 million in last year’s first quarter to $29.1 million in the current quarter. The increase in Adjusted EBITDA is attributable to the following:

• +    $4.1 million net effect of higher volumes in our Components and Buildings segments

• +    $2.9 million margin expansion from improvements in product mix, production and logistic efficiencies, commercial discipline and supply chain effectiveness

• +    $3.0 million net incremental contribution from recently acquired CENTRIA offset by costs incurred in ramping up the newly acquired Canadian facility

• -    $0.5 million from other items

Working Capital

Our annualized average days sales outstanding for the quarter increased to 36.8 days, compared to 38.3 days in the prior year same period. Our average days in inventory outstanding decreased to 50.5 days, compared to 52.7 days in the prior year. And finally, our average days in payables outstanding increased to 37.2 days compared to 35.4 days from the same period of the prior year.

Q2 2016 Outlook

The following are our current expectations for certain financial items for our second fiscal quarter of 2016.

Revenue

We expect our consolidated revenue to range between $350 million and $370 million. This range takes into consideration the seasonally slower time of year, the estimated year-over-year decline in steel prices as well as the typical range of disruptions that can occur from seasonal weather conditions.

Gross Profit Margin

We expect our consolidated gross profit margin to range between 22.5% and 24.0%. This range takes into consideration the seasonally lower operating leverage that typically occurs in the second quarter as well as the disruptions that occur from normal seasonal weather conditions.

ESG&A Expenses

We expect our ESG&A expenses to range between $73 million and $75 million. This amount excludes the amortization of intangible assets, which are shown on a separate line item on the statement of operations and discussed below. We typically incur higher ESG&A costs in the second quarter versus the first quarter due to the timing of certain sales and marketing expenditures.

Intangible Asset Amortization

We expect our intangible asset amortization to range between $2.3 million and $2.7 million.

Total Depreciation and Amortization

We expect our total depreciation and amortization expense (including the intangible amortization discussed above) to range between $11 million and $12 million. These amounts are reported on our statement of operations within Cost of Goods Sold, ESG&A Expenses, and Intangible Asset Amortization.

2

Interest Expense

We expect our consolidated interest expense, including the amortization of deferred financing costs, to range between $7.6 million and $8.0 million.

Effective Tax Rate

We expect our tax rate for the upcoming quarter to range between 35% and 37%. However, we continue to expect volatility in our quarterly tax rate as slight changes in earnings will have an outsized impact on the effective tax rate given the seasonal variation in earning levels that typically occur. Our quarterly effective tax rate percentage can and has varied significantly from expectations as a result.

Diluted Shares

We expect our weighted average diluted common share count used in calculating our earnings per share to be approximately 72.9 million for the second quarter of 2016 and 73.4 million for fiscal 2016. These estimates do not give effect to any potential share repurchases occurring after the date of this release.

Balance Sheet and Cash Flow Items

We expect our total capital expenditures in fiscal 2016 to range between $27 million and $30 million.

Forward-Looking Statements

Certain statements and information in this CFO Commentary 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,” “will” “continue,” “could,” “estimate,” “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 CFO Commentary. These forward-looking statements reflect the Company's current expectations and/or beliefs concerning future events. The Company has made every reasonable effort to ensure that the information, estimates, forecasts and assumptions on which these statements are based are current, reasonable and complete. However, 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. 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 or refinance our existing debt, including the 8.25% senior notes due 2023, 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; our ability to make strategic acquisitions accretive to earnings; retention and replacement of 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; our ability to integrate the acquisition of CENTRIA with our business and to realize the anticipated benefits of such acquisition; 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 November 1, 2015, which identifies 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.

3

NCI BUILDING SYSTEMS, INC.

BUSINESS SEGMENTS

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

RECONCILIATION OF OPERATING INCOME (LOSS) TO ADJUSTED OPERATING INCOME (LOSS) EXCLUDING SPECIAL CHARGES

FISCAL THREE MONTHS ENDED JANUARY 31, 2016 AND FEBRUARY 1, 2015

(In thousands)

(Unaudited)

	Three Months Ended January 31, 2016
	Engineered Building Systems			Metal Components		Metal Coil Coating		Corporate			Consolidated
Operating income (loss), GAAP basis	$	12,462		$	16,104	$	4,819	$	(18,126	)	$	15,259
Restructuring and impairment charges	500			285		—		725			1,510
Strategic development and acquisition related costs	—			366		—		315			681
Asset recovery	(725		)	—		—		—			(725		)
Adjusted operating income (loss)(1)	$	12,237		$	16,755	$	4,819	$	(17,086	)	$	16,725

	Three Months Ended February 1, 2015
	Engineered Building Systems		Metal Components		Metal Coil Coating		Corporate			Consolidated
Operating income (loss), GAAP basis	$	8,718	$	8,336	$	3,977	$	(16,460	)	$	4,571
Restructuring and impairment charges	871		606		—					1,477
Strategic development and acquisition related costs	—		—		—		1,729			1,729
Short lived acquisition method fair value adjustments	—		972		—		—			972
Adjusted operating income (loss)(1)	$	9,589	$	9,914	$	3,977	$	(14,731	)	$	8,749

(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 unaudited consolidated statements of operations.

4

NCI BUILDING SYSTEMS, INC.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

COMPUTATION OF EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION,

AMORTIZATION AND OTHER ITEMS (ADJUSTED EBITDA)

(In thousands)

(Unaudited)

	2nd Quarter May 3, 2015			3rd Quarter August 2, 2015		4th Quarter  November 1, 2015			1st Quarter  January 31, 2016			Trailing  12 Months  January 31,  2016
Net income (loss)	$	(7,488	)	$	7,220	$	18,407		$	5,892		$	24,031
Add:
Depreciation and amortization	13,766			14,541		13,354			10,747			52,408
Consolidated interest expense, net	8,280			8,135		7,993			7,847			32,255
Provision (benefit) for income taxes	(4,087		)	3,520		10,029			2,453			11,915
Restructuring and impairment charges	1,759			504		7,611			1,510			11,384
Gain from bargain purchase	—			—		—			(1,864		)	(1,864		)
Strategic development and acquisition related costs	628			701		1,143			681			3,153
Gain on legal settlements	—			—		(3,765		)	—			(3,765		)
Fair value adjustment of acquired inventory	775			1,000		—			—			1,775
Share-based compensation	2,201			2,568		1,677			2,582			9,028
Asset recovery	—			—		—			(725		)	(725		)
Adjusted EBITDA(1)	$	15,834		$	38,189	$	56,449		$	29,848		$	140,320

	2nd Quarter  May 4, 2014			3rd Quarter  August 3, 2014		4th Quarter  November 2, 2014		1st Quarter  February 1, 2015			Trailing 12 Months February 1, 2015
Net income (loss)	$	(4,905	)	$	6,089	$	14,259	$	(320	)	$	15,123
Add:
Depreciation and amortization	8,941			8,994		9,220		9,731			36,886
Consolidated interest expense, net	3,035			3,142		3,053		3,980			13,210
Provision (benefit) for income taxes	(3,057		)	2,837		4,215		(490		)	3,505
Restructuring and impairment charges	—			—		—		1,477			1,477
Gain on insurance recovery	(324		)	—		—		—			(324		)
Secondary offering costs	50			—		—		—			50
Strategic development and acquisition related costs	—			1,486		3,512		1,729			6,727
Fair value adjustments of acquired inventory	—			—		—		583			583
Share-based compensation	2,563			2,404		2,022		2,933			9,922
Adjusted EBITDA(1)	$	6,303		$	24,952	$	36,281	$	19,623		$	87,159

(1) The Company's Credit Agreement defines Adjusted EBITDA. Adjusted EBITDA excludes non-cash charges for goodwill and other asset impairments and stock compensation as well as certain non-recurring charges. As such, the historical information is presented in accordance with the definition above. Concurrent with the amendment and restatement of the Term Loan facility, the Company entered into an Asset-Based Lending facility which has substantially the same definition of Adjusted EBITDA except that the ABL Facility caps certain non-recurring charges. 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.

5