-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DTcw0qD6RN+QDzPPmy3+oCPrIAFJwQRk7OyY4T35N2daDc9RTc0i4NBtxDCsZjUL vWxmGMHS1JH30fgI+uuC1g== 0000950134-97-001812.txt : 19970317 0000950134-97-001812.hdr.sgml : 19970317 ACCESSION NUMBER: 0000950134-97-001812 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970131 FILED AS OF DATE: 19970314 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: NCI BUILDING SYSTEMS INC CENTRAL INDEX KEY: 0000883902 STANDARD INDUSTRIAL CLASSIFICATION: PREFABRICATED METAL BUILDINGS & COMPONENTS [3448] IRS NUMBER: 760127701 STATE OF INCORPORATION: DE FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-19885 FILM NUMBER: 97556787 BUSINESS ADDRESS: STREET 1: P O BOX 40220 CITY: HOUSTON TEXAS STATE: TX ZIP: 77240-0220 BUSINESS PHONE: 7134667788 MAIL ADDRESS: STREET 2: P O BOX 40220 CITY: HOUSTON STATE: TX ZIP: 77240-0220 FORMER COMPANY: FORMER CONFORMED NAME: NATIONAL COMPONENTS INCORPORATED DATE OF NAME CHANGE: 19600201 10-Q 1 FORM 10-Q FOR QUARTER ENDING JANUARY 31, 1997 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended: January 31, 1997 ----------------- Commission file number: 0-19885 ------- NCI BUILDING SYSTEMS, INC. - ------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 76-0127701 - ----------------------------------- ----------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization Identification No.) 7301 Fairview Houston, Texas 77041 - ---------------------------------------- ----------------------------- (Address of principal executive offices) (Zip Code) (713) 466-7788 - ------------------------------------------------------------------------------- Registrant's telephone number, including area code Not Applicable - ------------------------------------------------------------------------------- Former name, former address and former fiscal year, if changed since last report. Indicate by check mark whether the registrant (1) has filed all reports, required to be filed, by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months. (Or for such shorter periods, that the registrant was required to file such reports). And (2) has been subject to such filing requirements for the past 90 days. Yes X No ---- ---- APPLICABLE ONLY TO CORPORATE ISSUERS Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practical date. Common Stock, $.01 Par Value--8,049,002 shares as of January 31, 1997 - ------------------------------------------------------------------------------- 2 NCI BUILDING SYSTEMS, INC. INDEX
PART 1. FINANCIAL STATEMENTS PAGE NO. - ------- -------------------- -------- Item 1. Financial Statements (unaudited) Condensed consolidated balance sheets 1 January 31, 1997 and October 31, 1996. Condensed consolidated statements of income 2 Three months ended January 31, 1997 and 1996. Condensed consolidated statements of cash flows 3 Three months ended January 31, 1997 and 1996. Notes to condensed consolidated financial 4-5 Statements January 31, 1997. Item 2. Management's Discussion and Analysis of Financial 6-7 Condition and Results of Operations. PART 2. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 8
3 NCI BUILDING SYSTEMS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS
JANUARY 31, OCTOBER 31, 1997 1996 ------------- ------------- (UNAUDITED) (NOTE) ASSETS CURRENT ASSETS: CASH AND CASH EQUIVALENTS $ 22,145,000 $ 20,944,000 ACCOUNTS RECEIVABLE 31,105,000 37,749,000 INVENTORIES 32,339,000 28,693,000 OTHER CURRENT ASSETS 3,419,000 3,224,000 ------------- ------------- 89,008,000 90,610,000 PROPERTY, PLANT AND EQUIPMENT 57,930,000 56,243,000 LESS-ACCUMULATED DEPRECIATION (14,776,000) (13,491,000) ------------- ------------- 43,154,000 42,752,000 ------------- ------------- OTHER ASSETS 24,527,000 24,964,000 ------------- ------------- $ 156,689,000 $ 158,326,000 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: NOTES PAYABLE AND CURRENT PORTION OF LONG-TERM DEBT $ 47,000 $ 47,000 ACCOUNTS PAYABLE 15,187,000 21,527,000 OTHER CURRENT LIABILITIES 14,307,000 17,077,000 ------------- ------------- 29,541,000 38,651,000 ------------- ------------- LONG-TERM DEBT, NONCURRENT PORTION, AND DEFERRED INCOME TAXES 3,472,000 3,500,000 ------------- ------------- SHAREHOLDERS' EQUITY: COMMON STOCK 81,000 80,000 PAID IN CAPITAL 49,707,000 47,359,000 RETAINED EARNINGS 73,888,000 68,736,000 ------------- ------------- 123,676,000 116,175,000 ------------- ------------- $ 156,689,000 $ 158,326,000 ============= =============
NOTE: THE BALANCE SHEET AT OCTOBER 31, 1996 HAS BEEN DERIVED FROM THE AUDITED FINANCIAL STATEMENTS AT THAT DATE SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1 4 NCI BUILDING SYSTEMS, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
THREE MONTHS ENDED JAN. 31, 1997 1996 ------------ ------------ SALES $ 82,875,000 $ 67,350,000 COST OF SALES 60,465,000 49,966,000 ------------ ------------ GROSS PROFIT 22,410,000 17,384,000 OPERATING EXPENSES 14,537,000 11,277,000 ------------ ------------ OPERATING INCOME 7,873,000 6,107,000 INTEREST EXPENSE 37,000 4,000 OTHER (INCOME) EXPENSE (414,000) (382,000) ------------ ------------ (377,000) (378,000) ------------ ------------ INCOME BEFORE INCOME TAXES 8,250,000 6,485,000 PROVISION FOR INCOME TAXES 3,098,000 2,465,000 ------------ ------------ NET INCOME $ 5,152,000 $ 4,020,000 ============ ============ NET INCOME PER SHARE $ .61 $ .53 ============ ============
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 2 5 NCI BUILDING SYSTEMS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
THREE MONTHS ENDED JAN. 31 1997 1996 ------------ ------------ CASH FROM OPERATIONS $ 2,475,000 $ 1,281,000 ------------ ------------ INVESTING ACTIVITIES: PURCHASE OF PROPERTY, PLANT (1,709,000) (1,538,000) AND EQUIPMENT ACQUISITION OF DBCI -- (11,000,000) OTHER (75,000) 71,000 ------------ ------------ (1,784,000) (12,467,000) ------------ ------------ FINANCING ACTIVITIES: NET PROCEEDS FROM SALE OF STOCK -- 24,778,000 PROCEEDS FROM STOCK OPTIONS EXERCISE 522,000 378,000 REPAYMENT OF DEBT (12,000) (12,000) ------------ ------------ 510,000 25,144,000 ------------ ------------ INCREASE IN CASH $ 1,201,000 $ 13,958,000 ============ ============
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 3 6 NCI BUILDING SYSTEMS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) JANUARY 31, 1997 NOTE 1 -- BASIS OF PRESENTATION The accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month period ended January 31, 1997, are not necessarily indicative of the results that may be expected for the year ended October 31, 1997. For further information, refer to the financial statements and footnotes thereto included in the Company's Annual Report to Shareholders for the year ended October 31, 1996. NOTE 2 -- INVENTORIES The components of inventory consist of the following:
January 31, October 31, 1997 1996 ----------- ----------- Raw materials $25,758,000 $21,515,000 Work-in-process and finished goods 6,581,000 7,178,000 ----------- ----------- $32,339,000 $28,693,000 =========== ===========
NOTE 3 -- NET INCOME PER SHARE Net income per common share is computed by dividing net income after income taxes by the weighted average number of common shares outstanding, after giving effect to common stock equivalents. The number of shares used in the computation for the three months ended January 31, 1997 and 1996 was 8,437,049 and 7,631,608, respectively. 4 7 NOTE 4 -- ACQUISITION In April 1996, the Company acquired substantially all the assets and assumed certain liabilities of Mesco Metal Buildings, a division of Anderson Industries, Inc. (Mesco) a manufacturer of metal building systems and components, for approximately $22.3 million, including a cash consideration of $20.8 million and the issuance of a $1.5 million, 7% convertible subordinated debenture due April 1, 2001. The excess of cost over the fair value of the acquired net assets was approximately $10.9 million. Assuming the acquisition of Mesco had been consummated November 1, 1995, the pro forma unaudited results of operations for the three months ended January 31, 1996 are as follows. (in thousands, except per share data.) Sales $75,965 Net income $ 4,805 Net income per share $ 0.63
NOTE 5 - SUBSEQUENT EVENTS In February 1997, the Company purchased substantially all of the real estate, machinery, equipment and inventories and a plant facility located in Jemison, Alabama of Carlisle Engineered Metals, Incorporated for approximately $6.2 million. As a part of the transaction, the Company also leased two plant facilities located in Houston, Texas. 5 8 NCI BUILDING SYSTEMS, INC. Item 2. -- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations THREE MONTHS ENDED JANUARY 31, 1997 COMPARED TO THREE MONTHS ENDED JANUARY 31, 1996. Sales in the first quarter of fiscal year 1997 increased by $15.5 million, or 23%, compared to the first quarter of fiscal year 1996. Approximately $8.4 million of this increase resulted from the acquisition of Mesco Metal Buildings (MESCO) in April 1996. The remaining increase of $7 million, or 11%, was due primarily to the increase in market penetration of building system sales and higher sales in the component division, enabled in part by the increased capacity provided by the new manufacturing facility in Atwater, California which was not open in the prior years' first quarter. Gross profit in the first quarter increased $5.0 million, or 29%, compared to the prior year's first quarter. Gross margin percentage improved from 25.8% last year to 27.0% in the current quarter. The inclusion of Mesco in the results of operations and improved operations of the Company's door division accounted for the increase in gross margin percentage. Operating expenses, which consist of engineering, selling and administrative costs increased by $3.3 million, or 29%, in the current quarter compared to the same period last year. As a percent of sales, operating expenses were 17.5% compared to 16.7% a year ago. This increase was comprised primarily of salaries and commissions for additional employees hired to support the increased volume of orders and sales over the prior year and the inclusion of Mesco for the first time. These percentage increases resulted primarily from the inclusion of Mesco and somewhat lower sales than expected due to adverse weather in the first quarter, which delayed the shipment of customer orders. Interest expense increased by $33,000 in the current quarter compared to the prior year's first quarter due to $1.5 million in debt related to the acquisition of Mesco. Other income increased by $32,000 in the current quarter due to a higher level of investable cash during the quarter compared to last year. Income before income taxes increased by $1.8 million, or 27%, as a result of the increased sales volume and improved gross margins. As a percent of sales, income before taxes was 10.0% in the current quarter compared to 9.6% in the same quarter a year ago. 6 9 LIQUIDITY AND CAPITAL RESOURCES The Company has historically funded its operations from cash flow from operations, the sale of equity and bank borrowing. It maintains a revolving credit facility with a bank lender that provides for a maximum credit on an unsecured basis of $6.0 million, which matures in March 1997. The Company also has a six-year reducing line of credit with a current borrowing limit of $1.0 million. The Company has no outstanding balance under either of these credit facilities and has not borrowed any funds in the current quarter. During the quarter, the Company spent $1.7 million in capital additions for its manufacturing facilities and for management information systems enhancements. All of these additions were funded from internally generated cash. At January 31, 1997, the ratio of current assets to current liabilities was 3.0 to 1 compared to 2.3 to 1 at October 31, 1996. Working capital generated from operations before changes in current assets and liabilities was $7.0 million. Liquidity in future periods will be dependent on internally generated cash flows, the ability to obtain adequate external financing for expansion, when needed, and the amount of increased working capital necessary to support expected growth. Based on current capitalization, it is expected future cash flows from operations and the availability of alternative sources of external financing should be sufficient to provide adequate liquidity in future periods. 7 10 NCI BUILDING SYSTEMS, INC. PART II. OTHER INFORMATION Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) None (b) There were no reports filed under Form 8-K for the quarter ended January 31,1997 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. -------------------------- (Registrant) Date: March 10, 1997 /s/ ROBERT J. MEDLOCK ------------------- -------------------------- Robert J. Medlock Vice President and Chief Financial Officer 8 11 INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION - ------- ----------- 27 - Financial Data Schedule
EX-27 2 FINANCIAL DATA SCHEDULE
5 3-MOS OCT-31-1996 NOV-01-1996 JAN-31-1997 22,145,000 0 32,739,000 1,634,000 32,339,000 89,008,000 57,930,000 14,776,000 156,689,000 29,541,000 0 0 0 81,000 123,595,000 156,689,000 82,875,000 82,875,000 60,465,000 14,537,000 (414,000) 294,000 37,000 8,250,000 3,098,000 0 0 0 0 5,152,000 .61 .0
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