11-K 1 d97964e11vk.txt FORM 11-K FOR FISCAL YEAR END DECEMBER 31, 2001 ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------- FORM 11-K [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2001 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ---------- Commission file number: 1-14315 A. Full title of the plan and the address of the plan, if different from that of the issuer named below: NCI 401(k) PROFIT SHARING PLAN B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: NCI BUILDING SYSTEMS, INC. 10943 NORTH SAM HOUSTON PARKWAY WEST HOUSTON, TEXAS 77064 ================================================================================ NCI 401(K) PROFIT SHARING PLAN Table of Contents Independent Auditors' Report.............................................................................1 Statement of Net Assets Available for Benefits...........................................................2 Statement of Changes in Net Assets Available for Benefits................................................3 Notes to Financial Statements..........................................................................4-8 Supplemental Schedules:..................................................................................9 Schedule of Assets Held for Investment Purposes................................................10
i INDEPENDENT AUDITORS' REPORT Board of Trustees NCI 401(k) Profit Sharing Plan Houston, Texas We have audited the accompanying statements of net assets available for benefits of NCI 401 (k) Profit Sharing Plan as of December 31, 2001 and 2000, and the related statement of changes in net assets available for benefits for the year ended December 31, 2001. These financial statements are the responsibility of Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2001 and 2000, and the changes in net assets available for benefits for the year ended December 31, 2001, in conformity with accounting principles generally accepted in the United States of America. Our audit was made for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying Supplemental Schedule of Assets Held for Investment Purposes is presented to comply with the Department of Labor Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 and is not a required part of the financial statements. The supplemental schedule has been subjected to the same auditing procedures applied in our audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. /s/ KOLKHORST & KOLKHORST Kolkhorst & Kolkhorst Houston, Texas June 11, 2002 1 NCI 401(k) PROFIT SHARING PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS December 31, 2001 and 2000 ASSETS
December 31, ---------------------------------- 2001 2000 ------------ ------------ INVESTMENTS - at fair value $ 65,818,640 $ 63,620,377 CONTRIBUTIONS RECEIVABLE Employer Contribution 871,211 1,925,101 Participant Contribution 184,425 209,677 ------------ ------------ 1,055,636 2,134,778 CASH AND CASH EQUIVALENTS 109 (361,689) ------------ ------------ TOTAL ASSETS 66,874,385 65,393,466 LIABILITIES Accounts Payable -- -- ------------ ------------ NET ASSETS AVAILABLE FOR BENEFITS $ 66,874,385 $ 65,393,466 ============ ============
See independent auditors' report and accompanying notes to the financial statements. 2 NCI 401(k) PROFIT SHARING PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS Year Ended December 31, 2001 ADDITIONS TO NET ASSETS Contributions Employer $ 3,387,235 Participant 6,268,059 Rollovers 214,777 ------------ Total contributions 9,870,071 ------------ Interest and dividend income 745,855 Net unrealized appreciation (depreciation) of investments and net realized gain on sale of investments (4,981,380) ------------ Total earnings (loss) (4,235,525) ------------ TOTAL ADDITIONS 5,634,546 ------------ DEDUCTIONS FROM NET ASSETS Benefits paid to terminated participants (5,349,187) Administrative/other expenses (149,131) ------------ TOTAL DEDUCTIONS (5,498,318) ------------ NET INCREASE 136,228 Transfer from merged plans 1,344,691 NET ASSETS AVAILABLE FOR BENEFITS Beginning of year 65,393,466 ------------ End of year $ 66,874,385 ============
See independent auditors' report and accompanying notes to the financial statements 3 NCI 401(k) PROFIT SHARING PLAN NOTES TO FINANCIAL STATEMENTS December 31, 2001 NOTE A - DESCRIPTION OF PLAN The following description of the NCI 401(k) Profit Sharing Plan (Plan) provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plan's provisions. General The Plan is a defined contribution plan covering all employees of NCI Building Systems, Inc. and its affiliates (Company) who have completed three months of service, and have attained the age of 18. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA) and subsequent related amendments and revisions. Allocation Provision Qualified participants may elect to defer a percentage of their salary at each pay period. The amount of deferral may not exceed 15% of compensation for the plan year and must equal at least 1% of compensation. Elective deferrals may not exceed the amount determined by the IRS for the plan year. Participants may direct that their contributions be invested in any of the Plan investment options. Contributions The Plan provides for a matching contribution on an equal basis to all participants, with a maximum Company contribution. For the years ended December 31, 2001 and 2000, the Company made a matching contribution equal to 66.67 percent for 2001 and 83.33 percent for 2000 of each participant's contribution, up to 6 percent of the participant's eligible compensation. The employer contribution totaled $ 3,387,235 and $4,267,294 for the years ended December 31, 2001 and 2000, respectively. The Company contribution is made entirely in Company stock. Participant Accounts Each participant's account is credited with the participant's contribution and allocation of (a) the Company's contribution, if any, and (b) Plan earnings (loss), and (c) forfeitures of terminated participants' nonvested accounts in excess of expenses. Allocations are based on participant earnings or account balances. The benefit to which a participant is entitled is the benefit that can be provided from the participant's account. 4 NCI 401(k) PROFIT SHARING PLAN NOTES TO FINANCIAL STATEMENTS December 31, 2001 NOTE A - DESCRIPTION OF PLAN (CONTINUED) Vesting Participants are immediately vested in their voluntary contributions, plus actual earnings thereon. Vesting in the remainder of their accounts is based on years of continuous service as follows:
Years of Service Vested Percentage ------------------------------------------- -------------------------------- Less than one year 0% One year 10% Two years 20% Three years 30% Four years 40% Five years 60% Six years 80% Seven or more years 100%
Expenses The Company has paid a premium to acquire a $10,000,000 fidelity bond and incurs expenses for administration, audit and tax return preparation for the Plan. The Plan may reimburse the Company for these expenses through the allocation of forfeitures. Payment of Benefits Subsequent to termination of service, a participant may request to receive payment either in a lump sum amount equal to the value of his or her vested account balance or to continue in the trust in such a manner as though the employee had not terminated his eligibility if the participant's account balance is greater than $5,000. Disposition of Forfeitures The Plan stipulates that forfeitures are used to reduce the Plan's normal administrative fees, and then should be treated as additional discretionary matching contributions for the plan year in which the forfeitures occur. Investment Options The Plan offers eleven investment options in which the employees may elect to participate. Ten of the options are mutual funds, and the eleventh option is the NCI Company Stock Fund. The Company's matching contribution is made in NCI Company Stock. 5 NCI 401(k) PROFIT SHARING PLAN NOTES TO FINANCIAL STATEMENTS December 31, 2001 NOTE B - SUMMARY OF ACCOUNTING POLICIES Plan assets are stated at fair market value. If available, quoted market prices are used to value investments. Participant Loans Participants may borrow from their fund accounts a minimum of $1,000 up to a maximum of $50,000 or 50 percent of their account balance, whichever is less. The loans are secured by the balance in the participants' account and bear interest at prevailing market rates. Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires the plan administrator to make estimates and assumptions that affect the reported amounts and disclosures. Accordingly, actual results may differ from those estimates. NOTE C - INVESTMENTS The Plan's investments are held by a financial services company-administered trust fund. The following table presents the fair values of investments. Investments that represent 5 percent or more of the Plan's net assets are separately identified. Investments at fair value as determined by quoted market price:
December 31, ----------------------------------- 2001 2000 ------------ ------------ American Express Trust Income Fund II $ 9,985,299 7,936,050 AXP Bond Fund 2,893,042 1,981,500 Founders Balanced Fund -- 1,555,482 American Express Trust Horizon Short-term 67,104 -- American Express Trust Horizon Medium-term 1,568,815 -- American Express Trust Horizon Long-term 137,579 -- AXP Blue Chip Advantage Fund 6,797,470 7,632,640 Janus Worldwide Fund 3,645,802 3,966,021 Neuberger & Berman Partners Trust 917,713 576,039 Baron Asset Fund 1,434,082 1,254,730 AXP Growth Fund 5,694,973 8,150,464 NCI Common Stock Fund 20,966,854 20,265,371 Money Market Fund 388,154 1,679 Loan Fund 4,318,233 4,016,371 Investment Contract with Aetna, # 014241, matures 2/17/04 6,634,752* 6,284,030 Investment Contract with Aetna, # 014174, matures 1/4/05 368,768* -- ------------ ------------ $ 65,818,640 63,620,377 ============ ============
*Includes accrued income of $761,283 6 NCI 401(k) PROFIT SHARING PLAN NOTES TO FINANCIAL STATEMENTS December 31, 2001 NOTE C - INVESTMENTS (CONTINUED) Investments in the NCI Common Stock Fund are both participant and nonparticipant directed. Changes in the NCI Common Stock Fund for the year ended December 31, 2001 are as follows: Contributions received $ 4,893,370 Benefits paid to participants (1,655,662) Transfers to participant directed investments (849,924) Participant loan activity (207,388) Participant forfeitures (163,091) Net depreciation (567,214) ------------ $ 1,450,091 ============
NOTE D - PLAN TERMINATION Although the Company has expressed no such intention, the Plan can be terminated at the Company's election. In the event of Plan termination, all Plan benefits would become 100 percent vested and payable to the participants. NOTE E- TAX STATUS The Plan obtained its latest determination letter on December 28, 1998, in which the Internal Revenue Service stated that the Plan, as then designed, was in compliance with the applicable requirements of the Internal Revenue Code. The Plan has been amended since receiving the determination letter. However, the Plan administrator believes that the Plan is currently designed and being operated in compliance with the applicable requirements of the Internal Revenue Code. 7 NCI 401(k) PROFIT SHARING PLAN NOTES TO FINANCIAL STATEMENTS December 31, 2001 NOTE F - MERGED PLAN AND INVESTMENT CONTRACT WITH INSURANCE COMPANY During the year ended December 31, 2001, the assets of two profit sharing plans for companies purchased by NCI Building Systems, Inc were merged into the Company's Plan. The net assets transferred to the Plan totaled $1,344,691. The Plan has two benefit-responsive investment contracts with Aetna Insurance Company. Aetna maintains the contributions in a general account. The account is credited with earnings on the underlying investments and charged for participant withdrawals and administrative expenses. The contracts are included in the financial statements at contract value as reported to the Plan by Aetna. Contract value represents contributions made under the contracts, plus earnings, less participant withdrawals and administrative expenses. Participants may ordinarily direct the withdrawals or transfer of all or a portion of their investment at contract value. There are no reserves against contract value for credit risk of the contract issuer or otherwise. The contracts have a fixed, guaranteed net interest rate of 5.55% and 5.97%. The Plan does not allow participants to make any additional contributions to these investment contracts. 8 SUPPLEMENTAL SCHEDULE 9 NCI 401(k) PROFIT SHARING PLAN FINANCIAL STATEMENTS December 31, 2001 Schedule of Assets Held for Investment Purposes for the Year Ended December 31, 2001
(a) (b) (c) (d) (e) -------- --------------------------------------------- -------------------------------------- ------------ ----------- Description of investment Identity of issue, Including maturity date, rate borrower, lessor, Of interest, collateral, par Current or similar party or maturity value Cost Value -------- --------------------------------------------- -------------------------------------- ------------ ----------- American Express Trust Income Fund II Mutual Fund $ 9,585,237 $ 9,985,299 AXP Bond Fund Mutual Fund 2,886,364 2,893,042 AET Horizon Short-term Mutual Fund 65,425 67,104 AET Horizon Medium-term Mutual Fund 1,566,176 1,568,815 AET Horizon Long-term Mutual Fund 128,169 137,579 AXP Blue Chip Advantage Fund Mutual Fund 9,180,291 6,797,470 Janus Worldwide Fund Mutual Fund 4,970,043 3,645,802 Neuberger & Berman Partners Trust Mutual Fund 954,133 917,713 Baron Asset Fund Mutual Fund 1,688,139 1,434,082 AXP Growth Fund Mutual Fund 8,767,314 5,694,973 Loan Fund Participant Promissory notes 4,318,233 4,318,233 NCI Common Stock Fund Qualified Employer Securities 21,172,642 20,966,854 Investment Contract with Aetna, #005417 Investment Contract, matures 2/17/04 6,634,752* 6,634,752* Investment Contract with Aetna, #014174 Investment Contract, matures 1/04/05 368,768* 368,768* Money Market Fund Mutual Fund 388,154 388,154 ------------ ----------- $ 72,673,840 $65,818,640 ============ ===========
*Includes accrued income of $761,283 10 SIGNATURES The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, NCI Building Systems Inc., as administrator for the NCI 401(k) Profit Sharing Plan, has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. NCI BUILDING SYSTEMS INC. (AS ADMINISTRATOR OF THE NCI 401(k) PROFIT SHARING PLAN) DATE: June 26, 2002 By: /s/ Robert J. Medlock --------------------------------------- Robert J. Medlock Executive Vice President and Chief Financial Officer 11 INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION ------ ----------- 23.1 Consent of Independent Auditors