10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended January 27, 2013

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                     to                    

Commission file number: 1-14315

NCI BUILDING SYSTEMS, INC.

(Exact name of registrant as specified in its charter)

Delaware	76-0127701
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
10943 N. Sam Houston Parkway W. Houston, TX	77064
(Address of principal executive offices)	(Zip Code)

(281) 897-7788

(Registrant’s telephone number, including area code)

(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 period 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  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   x  Yes    ¨  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. 

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   ¨  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 practicable date.

Common Stock, $.01 par value - 20,699,203 shares as of March 1, 2013

TABLE OF CONTENTS

	PAGE
Part — Financial Information
Item 1.    Unaudited Consolidated Financial Statements.	3
Consolidated Balance Sheets as of January 27, 2013 and October 28, 2012.	3
Consolidated Statements of Operations for the Fiscal Three Month Periods Ended January 27, 2013 and January 29, 2012.	4
Consolidated Statements of Comprehensive Income (Loss) for the Fiscal Three Month Periods Ended January 27, 2013 and January 29, 2012.	5
Consolidated Statements of Stockholders’ Equity (Deficit) for the Fiscal Three Month Periods Ended January 27, 2013.	6
Consolidated Statements of Cash Flows for the Fiscal Three Month Periods Ended January 27, 2013 and January 29, 2012.	7
Notes to Consolidated Financial Statements.	8
Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations.	22
Item 3.    Quantitative and Qualitative Disclosures About Market Risk.	34
Item 4.    Controls and Procedures.	36
Part II — Other Information
Item 1.    Legal Proceedings.	37
Item 1A. Risk Factors.	37
Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds.	37
Item 6.    Exhibits.	38

2

PART I— FINANCIAL INFORMATION

Item 1. Unaudited Consolidated Financial Statements.

NCI BUILDING SYSTEMS, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

	January 27, 2013			October 28, 2012
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	25,827		$	55,158
Restricted cash		1,376			1,375
Accounts receivable, net		108,953			133,475
Inventories, net		113,770			106,015
Deferred income taxes		25,941			21,926
Income tax receivable		964			549
Investments in debt and equity securities, at market		4,118			4,076
Prepaid expenses and other		17,189			16,864
Assets held for sale		2,397			2,397
Total current assets		300,535			341,835
Property, plant and equipment, net		266,812			268,875
Goodwill		76,856			76,746
Intangible assets, net		52,015			53,028
Other assets, net		10,505			11,000
Total assets	$	706,723		$	751,484
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Current portion of long-term debt	$	2,500		$	2,500
Note payable		—			515
Accounts payable		84,208			113,177
Accrued compensation and benefits		37,571			43,066
Accrued interest		3,535			345
Other accrued expenses		55,620			60,455
Total current liabilities		183,434			220,058
Long-term debt, net		226,215			234,444
Deferred income taxes		36,579			35,565
Other long-term liabilities		12,013			11,995
Total long-term liabilities		274,807			282,004
Series B cumulative convertible participating preferred stock		619,950			619,950
Stockholders’ deficit:
Common stock, $.01 par value, 100,000,000 shares authorized; 20,691,829 and 20,357,183 shares issued at January 27, 2013 and October 28, 2012, respectively; 20,691,829 and 20,354,217 shares outstanding at January 27, 2013 and October 28, 2012, respectively		925			925
Additional paid-in capital		7,676			4,991
Accumulated deficit		(373,477	)		(369,850	)
Accumulated other comprehensive loss		(6,592	)		(6,568	)
Treasury stock, at cost (2,966 shares at October 28, 2012)		—			(26	)
Total stockholders’ deficit		(371,468	)		(370,528	)
Total liabilities and stockholders’ deficit	$	706,723		$	751,484

See accompanying notes to consolidated financial statements.

3

 NCI BUILDING SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

	Fiscal Three Months Ended
	January 27, 2013			January 29, 2012
Sales	$	297,584		$	243,603
Cost of sales		236,715			189,981
Gross profit		60,869			53,622
Engineering, selling, general and administrative expenses		60,471			48,941
Acquisition-related costs		—			396
Income from operations		398			4,285
Interest income		30			28
Interest expense		(6,274	)		(3,324	)
Other income, net		394			26
Income (loss) before income taxes		(5,452	)		1,015
Provision (benefit) from income taxes		(1,825	)		426
Net income (loss)	$	(3,627	)	$	589
Convertible preferred stock dividends and accretion		—			6,608
Convertible preferred stock beneficial conversion feature		—			4,020
Net loss applicable to common shares	$	(3,627	)	$	(10,039	)
Loss per common share:
Basic	$	(0.19	)	$	(0.54	)
Diluted	$	(0.19	)	$	(0.54	)
Weighted average number of common shares outstanding:
Basic		19,237			18,693
Diluted		19,237			18,693

See accompanying notes to consolidated financial statements.

4

NCI BUILDING SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

(Unaudited)

	Fiscal Three Months Ended
	January 27, 2013			January 29, 2012
Comprehensive income (loss):
Net income (loss)	$	(3,627	)	$	589
Other comprehensive loss, net of tax:
Foreign exchange translation loss and other (net of income tax of $0 in 2013 and 2012)		(24	)		(5	)
Loss in value of foreign currency derivative (net of income tax of $56 in 2012)		—			(89	)
Other comprehensive loss		(24	)		(94	)
Comprehensive income (loss)	$	(3,651	)	$	495

See accompanying notes to the consolidated financial statements.

5

NCI BUILDING SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(In thousands, except share data)

(Unaudited)

	Common Stock					Additional Paid-In			Retained			Accumulated Other Comprehensive			Treasury Stock						Stockholders’
	Shares			Amount		Capital			Deficit			Loss			Shares			Amount			Deficit
Balance, October 28, 2012		20,357,183		$	925	$	4,991		$	(369,850	)	$	(6,568	)		(2,966	)	$	(26	)	$	(370,528	)
Treasury stock purchases		—			—		(17	)		—			—			(167,521	)		(2,329	)		(2,346	)
Retirement of treasury shares		(170,487	)		—		(2,355	)		—			—			170,487			2,355			—
Issuance of restricted stock		428,991			—		—			—			—			—			—			—
Shares issued for stock options		76,142			—		674			—			—			—			—			674
Tax adjustments for equity-based awards		—			—		941			—			—			—			—			941
Foreign exchange translation gain (loss) and other		—			—		—			—			(24	)		—			—			(24	)
Share-based compensation		—			—		3,442			—			—			—			—			3,442
Net loss		—			—		—			(3,627	)		—			—			—			(3,627	)
Balance, January 27, 2013		20,691,829		$	925	$	7,676		$	(373,477	)	$	(6,592	)		—		$	—		$	(371,468	)

See accompanying notes to the consolidated financial statements.

6

NCI BUILDING SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Fiscal Three Months Ended
	January 27, 2013			January 29, 2012
Cash flows from operating activities:
Net income (loss)	$	(3,627	)	$	589
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization		10,206			7,371
Share-based compensation expense		3,442			1,972
Loss on sale of property, plant and equipment		—			2
Provision for doubtful accounts		1,305			(6	)
Provision (benefit) from deferred income taxes		(1,990	)		292
Changes in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable		23,217			15,204
Inventories		(7,755	)		(13,524	)
Income tax receivable		(415	)		174
Prepaid expenses and other		(615	)		591
Accounts payable		(28,969	)		(8,836	)
Accrued expenses		(7,181	)		(7,987	)
Other, net		(790	)		(47	)
Net cash used in operating activities		(13,172	)		(4,205	)
Cash flows from investing activities:
Capital expenditures		(6,071	)		(5,770	)
Proceeds from sale of property, plant and equipment		—			25
Net cash used in investing activities		(6,071	)		(5,745	)
Cash flows from financing activities:
Proceeds from stock options exercised		674			—
Increase in restricted cash		(1	)		(1	)
Proceeds from Amended ABL Facility		5,001			—
Payments on Amended ABL Facility		(5,000	)		—
Payments on term loan		(8,750	)		(500	)
Payments on note payable		(515	)		(292	)
Payment of financing costs		(68	)		(25	)
Excess tax benefits from share-based compensation arrangements		941			—
Purchase of treasury stock		(2,346	)		(1,503	)
Net cash used in financing activities		(10,064	)		(2,321	)
Effect of exchange rate changes on cash and cash equivalents		(24	)		(5	)
Net decrease in cash and cash equivalents		(29,331	)		(12,276	)
Cash and cash equivalents at beginning of period		55,158			78,982
Cash and cash equivalents at end of period	$	25,827		$	66,706

See accompanying notes to consolidated financial statements.

7

NCI BUILDING SYSTEMS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 27, 2013

(Unaudited)

NOTE 1 — BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements for NCI Building Systems, Inc. (together with its subsidiaries, unless otherwise indicated, the “Company,” “NCI,” “we,” “us,” or “our”) 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 and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, the unaudited consolidated financial statements included herein contain all adjustments necessary to fairly present our financial position, results of operations and cash flows for the periods indicated. Such adjustments are of a normal, recurring nature. Operating results for the fiscal three month period ended January 27, 2013 are not necessarily indicative of the results that may be expected for the fiscal year ending November 3, 2013. Our sales and earnings are subject to both seasonal and cyclical trends and are influenced by general economic conditions, interest rates, the price of steel relative to other building materials, the level of nonresidential construction activity, roof repair and retrofit demand and the availability and cost of financing for construction projects.

We use a four-four-five week calendar each quarter with our year end being on the Sunday closest to October 31. The year end for fiscal 2013 is November 3, 2013.

Certain reclassifications of acquisition-related costs have been made to prior period amounts to conform to the current presentation. The net effect of these reclassifications was not material to our consolidated financial statements.

For further information, refer to the consolidated financial statements and footnotes thereto included in our Annual Report on Form 10-K for the fiscal year ended October 28, 2012 filed with the Securities and Exchange Commission (the “SEC”) on December 24, 2012.

NOTE 2 — ACQUISITION

On June 22, 2012, we completed the acquisition of Metl-Span LLC, a Texas limited liability company (“Metl-Span”). Pursuant to the terms of the Equity Purchase Agreement, dated as of May 2, 2012, as amended (the “Equity Purchase Agreement”), among VSMA, Inc., Metl-Span, NCI Group, Inc. and BlueScope Steel North America Corporation, NCI Group, Inc. acquired all of the outstanding membership interests of Metl-Span for approximately $145.7 million in cash (the “Acquisition”), which includes $4.7 million of cash acquired. The purchase price is also subject to a post-closing adjustment based on Metl-Span’s cash, working capital, indebtedness, transaction expenses and accrued employee bonuses at closing. Upon the closing of the Acquisition, Metl-Span became a direct, wholly-owned subsidiary of NCI Group, Inc. Effective October 29, 2012, Metl-Span merged with and into NCI Group, Inc., with NCI Group, Inc. being the lone survivor. Metl-Span’s operations are now conducted through NCI Group, Inc.

Accordingly, the results of Metl-Span’s operations from June 22, 2012 are included in our consolidated financial statements. For the period from October 29, 2012 to January 27, 2013, Metl-Span contributed revenue and operating income of $46.1 million and $3.0 million, respectively. Metl-Span assets acquired through the Acquisition include five manufacturing facilities in the United States serving the nonresidential building products market with cost-effective and energy efficient insulated metal wall and roof panels. The Acquisition resulted in goodwill of $71.7 million as it has strengthened our position as a leading fully integrated supplier to the nonresidential building products industry in North America, providing our customers a comprehensive suite of building products. During the three months ended January 29, 2012, we recognized $0.4 million in acquisition-related costs.

We report on a fiscal year that ends the Sunday closest to October 31. Metl-Span previously reported on a calendar year that ended on June 30. The unaudited pro forma financial information in the fiscal three months ended January 29, 2012 in the table below was prepared based on financial information for Metl-Span for the calendar months of October through December. The unaudited pro forma financial information for the fiscal three months ended January 27, 2013 and January 29, 2012 give effect to the transaction as if it had occurred at the beginning of the earliest fiscal period presented.

This unaudited pro forma financial information does not necessarily represent what would have occurred if the transaction had taken place on the dates presented and should not be taken as representative of our future consolidated results of operations. We have not finalized our integration plans. Accordingly, this pro forma information does not include all costs related to the integration. We also expect to realize operating synergies from consolidating procurement activities. The pro forma information does not reflect these potential synergies or expense reductions.

8

	Unaudited Pro Forma Fiscal Three Months Ended
(In thousands, except per share amounts)	January 27, 2013			January 29, 2012
Sales	$	297,584		$	288,964
Net income (loss)	$	398		$	(528	)
Net loss applicable to common shares	$	(3,627	)	$	(11,156	)
Earnings per share:
Basic	$	(0.19	)	$	(0.60	)
Diluted	$	(0.19	)	$	(0.60	)

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as part of the Acquisition. The fair value of certain assets acquired and liabilities assumed are preliminary and the final determination of any required purchase accounting adjustments will be made upon the finalization of the post-closing adjustment in the Equity Purchase Agreement and finalization of certain contingent assets and liabilities. We are currently completing our plans to functionally integrate the newly acquired operations into our existing operations. Additionally, as these plans are finalized, we may identify integration charges that are required to be recognized.

(In thousands)	June 22, 2012
Current assets	$	35,233
Current deferred income taxes		2,182
Property, plant and equipment		57,572
Intangible assets		32,760
Assets acquired	$	127,747
Current liabilities	$	24,924
Deferred income taxes		27,404
Lease liability		1,392
Liabilities assumed	$	53,720
Fair value of net assets acquired	$	74,027
Total consideration paid		145,682
Goodwill	$	71,655

The long-term deferred tax liability primarily relates to differences between the book basis and tax basis of property, plant and equipment and intangible assets, which were written up to fair market value for book purposes when accounting for the Acquisition and are not deductible for tax purposes.

The amount allocated to intangible assets was attributed to the following categories (in thousands):

			Lives
Trade names	$	9,600		15 years
Backlog		1,410		3 months
Supplier relationships		150		3 years
Customer lists and relationships		21,600		12 years
	$	32,760

These intangible assets are amortized on a basis consistent with the expected future cash flows.

The excess of the purchase price over the fair values of assets acquired and liabilities assumed was allocated to goodwill. Goodwill of $71.7 million was recorded in our metal components segment. None of the goodwill recorded as a result of this transaction is expected to be deductible for tax purposes.  

9

NOTE 3 —ACCOUNTING PRONOUNCEMENTS

Adopted Accounting Pronouncements

In June 2011, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income (“ASU 2011-05”) which amends its guidance on the presentation of comprehensive income to increase the prominence of items reported in other comprehensive income. The new guidance requires that all components of comprehensive income in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The guidance required entities to present reclassification adjustments out of accumulated other comprehensive income by component in both the statement in which net income is presented and the statement in which other comprehensive income is presented. In December 2011, the FASB issued ASU 2011-12, Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05 (“ASU 2011-12”) which indefinitely deferred the guidance related to the presentation on the face of the financial statements of the effects of reclassifications out of accumulated other comprehensive income on the components of net income and other comprehensive income. These amendments are to be applied retrospectively. We adopted ASU 2011-05 and ASU 2011-12 in our first quarter of fiscal 2013. The adoption of ASU 2011-05 and ASU 2011-12 did not have any impact on our consolidated financial statements.

Recent Accounting Pronouncements

In February 2013, the FASB issued ASU 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, which requires that companies present, either in a single note or parenthetically on the face of the financial statements, the effect of significant amounts reclassified from each component of accumulated other comprehensive income based on its source and the income statement line items affected by the reclassification. This accounting guidance is effective for our first quarter in fiscal 2014 and is only expected to impact the presentation of our consolidated financial statements and related notes.

NOTE 4 — RESTRICTED CASH

We have entered into a cash collateral agreement with our agent bank to secure letters of credit. The restricted cash is invested in a bank account securing our agent bank. As of January 27, 2013, we had restricted cash in the amount of $1.4 million as collateral related to our $1.4 million of letters of credit for certain insurance policies, exclusive of letters of credit under our Amended ABL Facility. See Note 9 — Long-Term Debt to the consolidated financial statements for more information on the material terms of our Amended ABL Facility. As of October 28, 2012, we had restricted cash in the amount of $1.4 million as collateral related to our $1.4 million of letters of credit for certain insurance policies, exclusive of letters of credit under our Amended ABL Facility. Restricted cash as of both January 27, 2013 and October 28, 2012 is classified as current as the underlying letters of credit expire within one year of the respective balance sheet date. The letters of credit will be renewed upon expiration.

NOTE 5 — INVENTORIES

The components of inventory are as follows (in thousands):

	January 27, 2013		October 28, 2012
Raw materials	$	82,825	$	77,459
Work in process and finished goods		30,945		28,556
	$	113,770	$	106,015

NOTE 6 — SHARE-BASED COMPENSATION

Our 2003 Long-Term Stock Incentive Plan (“Incentive Plan”) is an equity-based compensation plan that allows us to grant a variety of types of awards, including stock options, restricted stock, restricted stock units, stock appreciation rights, performance share units (“PSUs”), phantom stock awards and cash awards. As of January 27, 2013 and January 29, 2012, and for all periods presented, our share-based awards under this plan have consisted of restricted stock grants, PSUs and stock option grants, none of which can be settled through cash payments. Both our stock options and restricted stock awards are subject only to vesting requirements based on continued employment at the end of a specified time period and typically vest over four years or earlier upon death, disability or a change of control. However, our annual restricted stock awards also vest upon retirement and, only in the case of certain special one-time restricted stock awards, a portion vest on termination without cause or for good reason, as defined by the agreements governing such awards.

Our PSUs vest pro rata if an executive’s employment terminates prior to a three-year performance period ending on June 30, 2015 due to death, disability, or termination by NCI without cause or by the executive with good reason. If the executive’s employment terminates for any other reason prior to the end of the performance period, all PSUs are forfeited. If a change in control of NCI occurs prior to the end of the performance period, the performance period will immediately end at the time of the change in control and an executive will earn a percentage of the target number of PSUs based on the total shareholder return achieved determined by reference to the value of NCI common stock at the time of the change in control.

10

During the three month periods ended January 27, 2013 and January 29, 2012, we granted 2,101 and 92,832 stock options, respectively, and the grant-date fair value of options granted during the three month periods ended January 27, 2013 and January 29, 2012 was $7.22 and $5.12, respectively. Cash received from option exercises from a retired executive due to expiration in accordance with the terms of the agreement was $0.7 million during the three months ended January 27, 2013. The actual tax benefit realized for the tax deductions from option exercises totaled $0.2 million for the three months ended January 27, 2013.

The fair value of restricted stock awards classified as equity awards is based on the Company’s stock price as of the date of grant. During the three months ended January 27, 2013 and January 29, 2012, we granted restricted stock awards with a fair value of $6.3 million or 442,198 shares and $6.8 million or 663,929 shares, respectively.

NOTE 7 — LOSS PER COMMON SHARE

Basic loss per common share is computed by dividing net loss allocated to common shares by the weighted average number of common shares outstanding. Diluted income per common share, if applicable, considers the dilutive effect of common stock equivalents. The reconciliation of the numerator and denominator used for the computation of basic and diluted loss per common share is as follows (in thousands, except per share data):  

	Fiscal Three Months Ended
	January 27, 2013			January 29, 2012
Numerator for Basic and Diluted Loss Per Common Share
Net loss allocated to common shares (1)	$	(3,627	)	$	(10,039	)
Denominator for Basic and Diluted Loss Per Common Share
Weighted average common shares outstanding for basic and diluted loss per share		19,237			18,693
Basic and Diluted loss per common share	$	(0.19	)	$	(0.54	)

(1) Participating securities consist of the holders of the Convertible Preferred Stock, as defined below, and the unvested restricted Common Stock related to our Incentive Plan. These participating securities do not have a contractual obligation to share in losses; therefore, no losses were allocated in any periods presented above. These participating securities will be allocated earnings when applicable.

We calculate earnings per share using the “two-class” method, whereby unvested share-based payment awards and Series B Cumulative Convertible Participating Preferred Stock (the “Convertible Preferred Stock,” and shares thereof, “Preferred Shares”) that contain non-forfeitable rights to dividends or dividend equivalents are “participating securities” and, therefore, these participating securities are treated as a separate class in computing earnings per share. The calculation of earnings per share for Common Stock presented here excludes the income, if any, attributable to the unvested restricted stock awards and our Preferred Shares from the numerator and excludes the dilutive impact of those shares from the denominator. There was no income amount attributable to unvested restricted stock or Preferred Shares for the three month periods ended January 27, 2013 and January 29, 2012 as the unvested restricted stock and Preferred Shares do not share in the net losses. However, in periods of net income allocated to common shares, a portion of this income will be allocable to the unvested restricted stock and Preferred Shares. As of both January 27, 2013 and October 28, 2012, the Preferred Shares were convertible into 54.1 million shares of Common Stock.

For both the three month periods ended January 27, 2013 and January 29, 2012, all options, unvested restricted shares and PSUs were anti-dilutive and, therefore, not included in the diluted loss per common share calculation.

NOTE 8 — WARRANTY

We sell weathertightness warranties to our customers for protection from leaks in our roofing systems related to weather. These warranties range from two years to 20 years. We sell two types of warranties, standard and Single Source™, and three grades of coverage for each. The type and grade of coverage determines the price to the customer. For standard warranties, our responsibility for leaks in a roofing system begins after 24 consecutive leak-free months. For Single Source™ warranties, the roofing system must pass our inspection before warranty coverage will be issued. Inspections are typically performed at three stages of the roofing project: (i) at the project start-up; (ii) at the project mid-point; and (iii) at the project completion. These inspections are included in the cost of the warranty. If the project requires or the customer requests additional inspections, those inspections are billed to the customer. Upon the sale of a warranty, we record the resulting revenue as deferred warranty revenue, which is included in other accrued expenses in our Consolidated Balance Sheets. We recognize deferred warranty revenue over the warranty coverage period in a manner that matches our estimated expenses relating to the warranty. In addition, on June 22, 2012, we completed the acquisition of Metl-Span which offers weathertightness warranties on its wall and roof panels. We maintain an accrued warranty at Metl-Span in which the balance was $3.7 million at both January 27, 2013 and October 28, 2012. Weathertightness warranties are offered in various configurations for terms from five to 20 years, prorated or non-prorated and on a no dollar limit basis, as required by the buyer. These warranties are available only if certain conditions, some of which related to installation, are met. Additionally, we maintain an accrued warranty at our Robertson-Ceco II Corporation (“RCC”) subsidiary in which the balance was $3.0 million at both January 27, 2013 and October 28, 2012. RCC’s accrued warranty programs have similar terms and characteristics to our other warranty programs although these warranties are not amortized in the same manner as our other warranty programs.

11

The following table represents the rollforward of our acquired accrued warranty obligation and deferred warranty revenue activity for each of the fiscal three months ended (in thousands):

	Fiscal Three Months Ended
	January 27, 2013			January 29, 2012
Beginning balance	$	23,236		$	17,941
Warranties sold		646			631
Revenue recognized		(490	)		(431	)
Ending balance	$	23,392		$	18,141

NOTE 9 — LONG-TERM DEBT

Debt is comprised of the following (in thousands):

	January 27, 2013			October 28, 2012
Credit Agreement, due May 2018 (variable interest, at 8.0% on January 27, 2013 and October 28, 2012)	$	240,000		$	248,750
Unamortized discount, net		(11,285	)		(11,806	)
Current portion of long-term debt		(2,500	)		(2,500	)
Total long-term debt, less current portion	$	226,215		$	234,444

Credit Agreement

On June 22, 2012, in connection with the Acquisition, the Company entered into a Credit Agreement (the “Credit Agreement”) among the Company, as Borrower, Credit Suisse AG, Cayman Islands Branch, as Administrative Agent and Collateral Agent (the “Term Agent”), and the lenders party thereto. The Credit Agreement provides for a term loan credit facility in an aggregate principal amount of $250.0 million. Proceeds from borrowings under the Credit Agreement were used, together with cash on hand, (i) to finance the Acquisition, (ii) to extinguish the existing amended and restated credit agreement, due April 2014 (the “Refinancing”), and (iii) to pay fees and expenses incurred in connection with the Acquisition and the Refinancing.

The term loan under the Credit Agreement will mature on May 2, 2018 and, prior to such date, will amortize in nominal quarterly installments equal to one percent of the aggregate initial principal amount thereof per annum. The Credit Agreement was issued at 95% of face value, which resulted in a note discount of $12.5 million. The note discount will be amortized over the life of the loan through May 2, 2018 using the effective interest method.

The term loan under the Credit Agreement will be prepayable at the Company’s option at any time. Prepayments in connection with a repricing transaction (as defined in the Credit Agreement) during the first two years after the closing of the Credit Agreement will be subject to a prepayment premium equal to 2% of the principal amount of the term loan so prepaid during the first year after the closing of the Credit Agreement and 1% of the principal amount of the term loan so prepaid during the second year after the closing of the Credit Agreement. Prepayments may otherwise be made without premium or penalty (other than customary breakage costs).

Subject to certain exceptions, the term loan under the Credit Agreement will be subject to mandatory prepayment in an amount equal to:

• the net cash proceeds of (1) certain asset sales, (2) certain debt offerings, and (3) certain insurance recovery and condemnation events; and

• 75% of annual excess cash flow (as defined in the Credit Agreement) for any fiscal year ending on or after November 3, 2013, subject to reduction to 50%, 25% or 0% if specified leverage ratio targets are met.

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At the Company’s election, the interest rates applicable to the term loan under the Credit Agreement will be based on a fluctuating rate of interest measured by reference to either (1) an adjusted London Interbank Offered Rate, or “LIBOR,” or (2) an alternate base rate, in each case, plus a borrowing margin. Overdue amounts will bear interest at a rate that is 2% higher than the rate otherwise applicable.

The Credit Agreement contains a number of covenants that, among other things, will limit or restrict the ability of the Company and its subsidiaries to dispose of assets, incur additional indebtedness, make dividends and other restricted payments, create liens securing indebtedness, engage in mergers and other fundamental transactions, enter into restrictive agreements, amend certain documents in respect of other indebtedness, change the nature of their business and engage in certain transactions with affiliates.

In addition, under the Credit Agreement the Company will be subject to a financial covenant that requires the Company to maintain a specified consolidated total net debt to EBITDA leverage ratio for specified periods. The consolidated total net debt to EBITDA leverage ratio must be no more than 3.75:1.00 each quarter. The ratio steps down by 0.5 to 3.25:1.00 beginning with the quarter ending November 3, 2013. This ratio steps down by another 0.5 to 2.75:1.00 beginning with the quarter ending November 2, 2014. Our consolidated total net debt to EBITDA leverage ratio as of January 27, 2013 and October 28, 2012 was 2.46:1.00 and 2.23:1.00, respectively.

During our third quarter of fiscal 2012, we recognized a non-cash debt extinguishment charge of $5.1 million, related to the deferred financing costs of the amended and restated credit agreement, due April 2014.

ABL Facility

On May 2, 2012, we entered into the Amended ABL Facility to (i) permit the Acquisition, the entry by the Company into the Credit Agreement and the incurrence of debt thereunder and the repayment of existing indebtedness under NCI’s existing term loan, (ii) increase the amount available for borrowing thereunder to $150 million (subject to a borrowing base), (iii) increase the amount available for letters of credit thereunder to $30 million, and (iv) extend the final maturity thereunder to May 2, 2017.

As a result of the ABL Facility Amendment, in our third quarter of fiscal 2012, we recognized a non-cash charge of $1.3 million, related to the deferred financing costs.

Borrowing availability under the Amended ABL Facility is determined by a monthly borrowing base collateral calculation that is based on specified percentages of the value of qualified cash, eligible inventory and eligible accounts receivable, less certain reserves and subject to certain other adjustments. At January 27, 2013 and October 28, 2012, our excess availability under the Amended ABL Facility was $97.7 million and $111.1 million, respectively. Under the Amended ABL Facility, there were no amounts of borrowings outstanding as of January 27, 2013 and October 28, 2012. In addition, at both January 27, 2013 and October 28, 2012, standby letters of credit totaling approximately $8.5 million were outstanding but undrawn under the Amended ABL Facility related to certain insurance policies.

The Amended ABL Facility contains a number of covenants that, among other things, limit or restrict our ability to dispose of assets, incur additional indebtedness, incur guarantee obligations, engage in sale and leaseback transactions, prepay other indebtedness, modify organizational documents and certain other agreements, create restrictions affecting subsidiaries, make dividends and other restricted payments, create liens, make investments, make acquisitions, engage in mergers, change the nature of our business and engage in certain transactions with affiliates.

The Amended ABL Facility includes a minimum fixed charge coverage ratio of one to one, which will apply if we fail to maintain at least $15 million of minimum borrowing capacity. The minimum level of borrowing capacity as of both January 27, 2013 and October 28, 2012 was $15.0 million. Although our Amended ABL Facility did not require any financial covenant compliance, at January 27, 2013 and October 28, 2012, our fixed charge coverage ratio as of those dates, which is calculated on a trailing twelve month basis, was 3.07:1.00 and 4.09:1.00, respectively.

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Loans under the Amended ABL Facility bear interest, at our option, as follows: 

(1) Base Rate loans at the Base Rate plus a margin. The margin ranges from 1.50% to 2.00% depending on the quarterly average excess availability under such facility, and

(2) LIBOR loans at LIBOR plus a margin. The margin ranges from 2.50% to 3.00% depending on the quarterly average excess availability under such facility.

At both January 27, 2013 and October 28, 2012, the interest rate on our Amended ABL Facility was 4.75%. During an event of default, loans under the Amended ABL Facility will bear interest at a rate that is 2% higher than the rate otherwise applicable. “Base Rate” is defined as the higher of the Wells Fargo Bank, N.A. prime rate and the overnight Federal Funds rate plus 0.5% and “LIBOR” is defined as the applicable London Interbank Offered Rate adjusted for reserves.

Deferred Financing Costs

At January 27, 2013 and October 28, 2012, the unamortized balance in deferred financing costs was $10.5 million and $11.0 million, respectively.

NOTE 10 — SERIES B CUMULATIVE CONVERTIBLE PARTICIPATING PREFERRED STOCK

The CD&R Equity Investment

On August 14, 2009, the Company entered into an Investment Agreement (as amended, the “Investment Agreement”), by and between the Company and Clayton, Dubilier & Rice Fund VIII, L.P. (“CD&R Fund VIII”), pursuant to which the Company agreed to issue and sell to CD&R Fund VIII, and CD&R Fund VIII agreed to purchase from the Company, for an aggregate purchase price of $250 million (less reimbursement to CD&R Fund VIII or direct payment to its service providers of up to $14.5 million in the aggregate of transaction expenses and a deal fee, paid to Clayton, Dubilier & Rice, Inc., the manager of CD&R Fund VIII, of $8.25 million), 250,000 shares of Convertible Preferred Stock. Pursuant to the Investment Agreement, on October 20, 2009 (the “Closing Date”), the Company issued and sold to CD&R Fund VIII and CD&R Friends & Family Fund VIII, L.P. (the “CD&R Funds”), and the CD&R Funds purchased from the Company, an aggregate of 250,000 Preferred Shares, representing approximately 39.2 million shares of Common Stock or 68.4% of the voting power and Common Stock of the Company on an as-converted basis as of the Closing Date (such purchase and sale, the “CD&R Equity Investment”). At January 27, 2013 and October 28, 2012, the CD&R Funds own 72.3% and 72.7%, respectively, of the voting power and Common Stock of the Company on an as-converted basis.

Under the terms of the Certificate of Designations of the Convertible Preferred Stock (the “Certificate of Designations”), we were contractually obligated to pay quarterly dividends to the holders of the Preferred Shares from October 20, 2009, through October 20, 2019, subject to certain dividend “knock-out” provisions. The dividend “knock-out” provision provided that if, at any time after the 30-month anniversary of the Closing Date of October 20, 2009 (i.e., March 20, 2012), the trading price of the Common Stock exceeds $12.75, which is 200% of the initial conversion price of the Convertible Preferred Stock ($6.374), for each of 20 consecutive trading days, the dividend rate (excluding any applicable adjustments as a result of a default) will become 0.00%.

On May 8, 2012, we entered into an Amendment Agreement (the “Amendment Agreement”) with the CD&R Funds, the holders of our Preferred Shares, to eliminate our quarterly dividend obligation on the Preferred Shares. The Amendment Agreement provided for the Certificate of Designations to be amended to terminate the dividend obligation from and after March 15, 2012 (the “Dividend Knock-out”). However, this does not preclude the payment of contingent default dividends, if applicable.

As consideration for the Dividend Knock-out, the CD&R Funds received a total of 37,834 additional shares of Convertible Preferred Stock, representing (i) approximately $6.5 million of dividends accrued from March 15, 2012 through May 18, 2012 (20 trading days after April 20, 2012, on which date the dividend “knock-out” measurement period commenced) and (ii) approximately $31.4 million in additional liquidation preference of Convertible Preferred Stock, or 10% of the approximate total $313.7 million of accreted value as of May 18, 2012. Upon the closing of the transactions in the Amendment Agreement, the CD&R Funds held Convertible Preferred Stock with an aggregate liquidation preference and accrued dividends of approximately $345 million. The Convertible Preferred Stock and accrued dividends entitle the CD&R Funds to receive approximately 54.1 million shares of common stock, representing 72.3% of the voting power and common stock of the Company on an as-converted basis as of January 27, 2013.

The dividend rate will increase from 0% to 6% per annum during certain defaults specified in the Certificate of Designations involving the Company’s failure to have a number of authorized and unissued shares of Common Stock reserved and available sufficient for the conversion of all outstanding Preferred Shares. The Company currently has sufficient authorized, unissued and reserved shares of Common Stock to effect the conversion.

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On March 15, 2012, the Company paid to the holders of Convertible Preferred Stock, the CD&R Funds, a dividend of 8,924.762 shares of Convertible Preferred Stock for the period from December 16, 2011 to March 15, 2012. On December 15, 2011, the Company paid to the holders of Convertible Preferred Stock, the CD&R Funds, a dividend of 5,833.491 shares of Convertible Preferred Stock for the period from September 16, 2010 to December 15, 2011.

Accounting for Convertible Preferred Stock

In accordance with Accounting Standards Codification (“ASC”) Topic 815, Derivatives and Hedging, and ASC Topic 480, Distinguishing Liabilities from Equity, we classified the Convertible Preferred Stock as mezzanine equity because the Convertible Preferred Stock (1) can be settled in cash or shares of our Common Stock, (2) contains change of control rights allowing for early redemption, and (3) contains certain milestone redemption rights which allow the Convertible Preferred Stock to remain outstanding without a stated maturity date.

In addition, the Certificate of Designations, which is the underlying contract of the Convertible Preferred Stock, includes features that are required to be bifurcated and recorded at fair value. We classified the Convertible Preferred Stock as an equity host contract because of (1) the voting rights, (2) the participating dividends on Common Stock and mandatory, cumulative preferred stock dividends, and (3) the milestone redemption right which allows the Convertible Preferred Stock to remain outstanding without a stated maturity date. We then determined that the conditions resulting in the application of the default dividend rate are not clearly and closely related to this equity host contract and we bifurcated and separately recorded these features at fair value. As of both January 27, 2013 and October 28, 2012, the fair value carrying amount of the embedded derivative was immaterial.

Because the dividends accrued and accumulated on a daily basis and the amount payable upon redemption of the Convertible Preferred Stock is the liquidation preference plus accrued and unpaid dividends, accrued dividends were recorded into Convertible Preferred Stock. Prior to the Amendment Agreement, our policy was to recognize beneficial conversion feature charges on paid-in-kind dividends based on a daily dividend recognition and the daily closing stock price of our Common Stock.

In accordance with ASC Subtopic 470-20, Debt with Conversion and Other Options, the Convertible Preferred Stock contains a beneficial conversion feature because it was issued with an initial conversion price of $6.3740 and the closing stock price per share of Common Stock just prior to the execution of the CD&R Equity Investment was $12.55. The intrinsic value of the beneficial conversion feature cannot exceed the issuance proceeds of the Convertible Preferred Stock less the cash paid for the deal fee paid to the CD&R Funds manager in connection with the CD&R Equity Investment, and thus was $241.4 million as of October 20, 2009. At both January 27, 2013 and October 28, 2012, all of the potentially 54.1 million shares of Common Stock issuable upon conversion of the Preferred Shares, which includes paid-in-kind dividends, were authorized and unissued.

To determine if the Amendment Agreement resulted in a modification or extinguishment of the Convertible Preferred Stock, we evaluated the significance in the change to the substantive contractual terms in relation to both the economic characteristics of the Convertible Preferred Stock and the business purpose of the Amendment Agreement. Based on certain qualitative considerations, we determined an extinguishment and reissuance had occurred and we recorded the Convertible Preferred Stock at fair value as of May 8, 2012. As such, on May 8, 2012, the value of the Convertible Preferred Stock increased from a book value of $290.3 million to a fair value of $620.0 million. The increase in fair value reduced Additional Paid In Capital to zero on May 8, 2012, a $222.9 million decrease, and increased Accumulated Deficit by $106.7 million in the Consolidated Balance Sheet. In addition, the increase in fair value was offset by prior recognized beneficial conversion feature charges of $282.1 million since the issuance of the Convertible Preferred Stock which results in a $48.8 million Convertible Preferred Stock charge in the consolidated statement of operations. As of both January 27, 2013 and October 28, 2012, the Preferred Shares were convertible into 54.1 million shares of Common Stock at an initial conversion price of $6.3740.

During the three months ended January 29, 2012, the Company recorded accretion and accrued dividends of $0.7 million and $5.9 million, respectively. In the first quarter of fiscal 2012, we recorded a net $4.0 million beneficial conversion feature charge related to dividends that have accrued and are convertible into shares of Common Stock.

The Company’s aggregate liquidation preference plus accrued dividends of the Convertible Preferred Stock at January 27, 2013 and October 28, 2012 are as follows (in thousands):

	January 27, 2013		October 28, 2012
Liquidation preference	$	339,293	$	339,293
Accrued dividends		5,775		5,775
Aggregate liquidation preference	$	345,068	$	345,068

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At both January 27, 2013 and October 28, 2012, we had 339,293 Preferred Shares outstanding.

NOTE 11 — FAIR VALUE OF FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

Fair Value of Financial Instruments

The carrying amounts of cash and cash equivalents, restricted cash, trade accounts receivable and accounts payable approximate fair value as of January 27, 2013 and October 28, 2012 because of the relatively short maturity of these instruments. The fair values of the remaining financial instruments not currently recognized at fair value on our Consolidated Balance Sheets at the respective fiscal period ends were (in thousands):

	January 27, 2013				October 28, 2012
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Credit Agreement (1)	$	228,715	$	241,200	$	236,944	$	248,750

(1) Carrying amount of Credit Agreement includes an unamortized discount of $11.3 million and $11.8 million at January 27, 2013 and October 28, 2012, respectively.

The fair value of the Credit Agreement was based on recent trading activities of comparable market instruments which are level 2 inputs.

Fair Value Measurements

ASC Subtopic 820-10, Fair Value Measurements and Disclosures, requires us to use valuation techniques to measure fair value that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized as follows:

Level 1: Observable inputs such as quoted prices for identical assets or liabilities in active markets.

Level 2: Other inputs that are observable directly or indirectly, such as quoted prices for similar assets or liabilities or market-corroborated inputs.

Level 3: Unobservable inputs for which there is little or no market data and which require us to develop our own assumptions about how market participants would price the assets or liabilities.

The following is a description of the valuation methodologies used for assets and liabilities measured at fair value. There have been no changes in the methodologies used at January 27, 2013 and October 28, 2012.

Money market: Money market funds have original maturities of three months or less. The original cost of these assets approximates fair value due to their short-term maturity.

Mutual funds: Mutual funds are valued at the closing price reported in the active market in which the mutual fund is traded.

Stocks, options and ETF’s: Stocks, options and ETF’s are valued at the closing price reported in the active market in which the fund is traded.

Foreign currency contracts: The fair value of the foreign currency derivatives are based on a market approach and take into consideration current foreign currency exchange rates and current creditworthiness of us or the counterparty, as applicable.

Assets held for sale: Assets held for sale are valued based on current market conditions, prices of similar assets in similar condition and expected proceeds from the sale of the assets.

Deferred compensation plan liability: Deferred compensation plan liability is comprised of phantom investments in the deferred compensation plan and is valued at the closing price reported in the active market in which the money market, mutual fund or NCI stock phantom investments are traded.

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The following table summarizes information regarding our financial assets and liabilities that are measured at fair value on a recurring basis as of January 27, 2013, segregated by level of the valuation inputs within the fair value hierarchy utilized to measure fair value (in thousands):

	Level 1		Level 2			Level 3		Total
Assets:
Short-term investments in deferred compensation plan(1):
Money market	$	273	$	—		$	—	$	273
Mutual funds — Growth		638		—			—		638
Mutual funds — Blend		1,992		—			—		1,992
Mutual funds — Foreign blend		646		—			—		646
Mutual funds — Fixed income		—		569			—		569
Total short-term investments in deferred compensation plan		3,549		569			—		4,118
Total assets	$	3,549	$	569		$	—	$	4,118
Liabilities:
Deferred compensation plan liability	$	—	$	(4,615	)	$	—	$	(4,615	)
Total liabilities	$	—	$	(4,615	)	$	—	$	(4,615	)

(1) Unrealized holding gains (losses) for the three months ended January 27, 2013 was $0.2 million and for the three months ended January 29, 2012 was insignificant. These unrealized holding gains (losses) are primarily offset by changes in the deferred compensation plan liability.

The following table summarizes information regarding our financial assets that are measured at fair value on a nonrecurring basis as of January 27, 2013, segregated by level of the valuation inputs within the fair value hierarchy utilized to measure fair value (in thousands):

	Level 1		Level 2		Level 3		Total
Assets:
Assets held for sale (1)	$	—	$	—	$	2,397	$	2,397
Total assets	$	—	$	—	$	2,397	$	2,397

(1) Certain assets held for sale are valued at fair value and are measured at fair value on a nonrecurring basis. Assets held for sale are reported at fair value, if, on an individual basis, the fair value of the asset is less than cost. The fair value of assets held for sale is estimated using Level 3 inputs, such as broker quotes for like-kind assets or other market indications of a potential selling value which approximates fair value.

The following table summarizes information regarding our financial assets and liabilities that are measured at fair value on a recurring basis as of October 28, 2012, segregated by level of the valuation inputs within the fair value hierarchy utilized to measure fair value (in thousands):

	Level 1		Level 2			Level 3		Total
Assets:
Short-term investments in deferred compensation plan(1):
Money market	$	320	$	—		$	—	$	320
Mutual funds — Growth		594		—			—		594
Mutual funds — Blend		1,918		—			—		1,918
Mutual funds — Foreign blend		669		—			—		669
Mutual funds — Fixed income		—		575			—		575
Total short-term investments in deferred compensation plan	$	3,501	$	575		$	—	$	4,076
Total assets	$	3,501	$	575		$	—	$	4,076
Liabilities:
Deferred compensation plan liability	$	—	$	(4,146	)	$	—	$	(4,146	)
Total liabilities	$	—	$	(4,146	)	$	—	$	(4,146	)

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The following table summarizes information regarding our financial assets that are measured at fair value on a nonrecurring basis as of October 28, 2012, segregated by level of the valuation inputs within the fair value hierarchy utilized to measure fair value (in thousands):

	Level 1		Level 2		Level 3		Total
Assets:
Assets held for sale(1)	$	—	$	—	$	2,397	$	2,397
Total assets	$	—	$	—	$	2,397	$	2,397

(1) Certain assets held for sale are valued at fair value and are measured at fair value on a nonrecurring basis. Assets held for sale are reported at fair value, if, on an individual basis, the fair value of the asset is less than cost. The fair value of assets held for sale is estimated using Level 3 inputs, such as broker quotes for like-kind assets or other market indications of a potential selling value which approximates fair value.

The tables above exclude assets and liabilities measured on a one-time non-recurring basis that were acquired as part of the Acquisition. See Note 2 — Acquisition for more information on our acquisition of Metl-Span. These assets and liabilities were recorded at their fair value upon acquisition in accordance with generally-accepted accounting principles. Acquisition date fair values represent either level 2 fair value measurements (current assets and liabilities, property, plant and equipment) or Level 3 fair value measurements (goodwill and intangible assets). On May 8, 2012, we entered into an Amendment Agreement with the CD&R Funds to eliminate our quarterly dividend obligation with respect to the Preferred Shares, which does not preclude the payment of contingent default dividends. To determine if the Amendment Agreement resulted in a modification or extinguishment of the Convertible Preferred Stock, we evaluated the significance in the change to the substantive contractual terms in relation to both the economic characteristics of the Convertible Preferred Stock and the business purpose of the Amendment Agreement. See Note 10 — Series B Cumulative Convertible Participating Stock for more information on the Convertible Preferred Stock. Based on certain qualitative considerations, we determined an extinguishment and reissuance had occurred and we recorded the Convertible Preferred Stock was determined using a binomial lattice model and is a level 3 in the fair value hierarchy.

NOTE 12 — INCOME TAXES

The reconciliation of income tax computed at the statutory tax rate to the effective income tax rate is as follows:

	Fiscal Three Months Ended
	January 27, 2013			January 29, 2012
Statutory federal income tax rate		35.0	%		35.0	%
State income taxes		3.7			4.4
Domestic production activities deduction		(2.5	)		—
Canada valuation allowance		(3.3	)		—
Non-deductible expenses		1.3			1.8
Other		(0.7	)		0.8
Effective tax rate		33.5	%		42.0	%

The total amount of unrecognized tax benefit at both January 29, 2013 and October 28, 2012 was $0.3 million, all of which would impact our effective tax rate, if recognized. We do not anticipate any material change in the total amount of unrecognized tax benefits to occur within the next twelve months.

NOTE 13 — BUSINESS SEGMENTS

Operating segments are defined as components of an enterprise that engage in business activities and by which discrete financial information is available that is evaluated on a regular basis by the chief operating decision maker to make decisions about how to allocate resources to the segment and assess the performance of the segment. We have three operating segments: (i) metal coil coating; (ii) metal components; and (iii) engineered building systems. All operating segments operate primarily in the nonresidential construction market. Sales and earnings are influenced by general economic conditions, the level of nonresidential construction activity, metal roof repair and retrofit demand and the availability and terms of financing available for construction. Products of our operating segments use similar basic raw materials. The metal coil coating segment consists of cleaning, treating, painting and slitting continuous steel coils before the steel is fabricated for use by construction and industrial users. The metal components segment products include metal roof and wall panels, doors, metal partitions, metal trim, insulated panels and other related accessories. Metl-Span is included in the metal components segment. See Note 2 – Acquisition. The engineered building systems segment includes the manufacturing of main frames, Long Bay ^® Systems and value-added engineering and drafting, which are typically not part of metal components or metal coil coating products or services. The operating segments follow the same accounting policies used for our consolidated financial statements.

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We evaluate a segment’s performance based primarily upon operating income before corporate expenses. Intersegment sales are recorded based on standard material costs plus a standard markup to cover labor and overhead and consist of: (i) hot-rolled, light gauge painted and slit material and other services provided by the metal coil coating segment to both the engineered building systems and metal components segments; (ii) building components provided by the metal components segment to the engineered building systems segment; and (iii) structural framing provided by the engineered building systems segment to the metal components segment.

Corporate assets consist primarily of cash but also include deferred financing costs, deferred taxes and property, plant and equipment associated with our headquarters in Houston, Texas. These items (and income and expenses related to these items) are not allocated to the business segments. Corporate unallocated expenses include executive, legal, finance, tax, treasury, human resources, information technology, purchasing, marketing and corporate travel expenses. Additional unallocated expenses include interest income, interest expense and other (expense) income.

The following table represents sales, operating income and total assets attributable to these operating segments for the periods indicated (in thousands):

	Fiscal Three Months Ended
	January 27, 2013			January 29, 2012
Total sales:
Metal coil coating	$	49,271		$	49,083
Metal components		153,904			105,752
Engineered building systems		147,566			140,298
Intersegment sales		(53,157	)		(51,530	)
Total sales	$	297,584		$	243,603
External sales:
Metal coil coating	$	19,221		$	20,238
Metal components		136,528			87,296
Engineered building systems		141,835			136,069
Total sales	$	297,584		$	243,603
Operating income (loss):
Metal coil coating	$	5,542		$	5,302
Metal components		6,072			5,541
Engineered building systems		4,041			7,596
Corporate		(15,257	)		(14,154	)
Total operating income (loss)	$	398		$	4,285
Unallocated other expense		(5,850	)		(3,270	)
Income (loss) before income taxes	$	(5,452	)	$	1,015

	January 27, 2013		October 28, 2012
Total assets:
Metal coil coating	$	66,133	$	60,169
Metal components		372,552		381,028
Engineered building systems		202,068		214,227
Corporate		65,970		96,060
Total assets	$	706,723	$	751,484

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NOTE 14 — CONTINGENCIES

As a manufacturer of products primarily for use in nonresidential building construction, we are inherently exposed to various types of contingent claims, both asserted and unasserted, in the ordinary course of business. As a result, from time to time, we and/or our subsidiaries become involved in various legal proceedings or other contingent matters arising from claims, or potential claims. We insure against these risks to the extent deemed prudent by our management and to the extent insurance is available. Many of these insurance policies contain deductibles or self-insured retentions in amounts we deem prudent and for which we are responsible for payment. In determining the amount of self-insurance, it is our policy to self-insure those losses that are predictable, measurable and recurring in nature, such as claims for automobile liability and general liability. The Company regularly reviews the status of on-going proceedings and other contingent matters along with legal counsel. Liabilities for such items are recorded when it is probable that the liability has been incurred and when the amount of the liability can be reasonably estimated. Liabilities are adjusted when additional information becomes available. Management believes that the ultimate disposition of these matters will not have a material adverse effect on the Company’s results of operations, financial position or cash flows. However, such matters are subject to many uncertainties and outcomes are not predictable with assurance.

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NCI BUILDING SYSTEMS, INC.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following information should be read in conjunction with the unaudited consolidated financial statements included herein under “Item 1. Unaudited Consolidated Financial Statements” and the audited consolidated financial statements and the notes thereto and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the fiscal year ended October 28, 2012.

FORWARD LOOKING STATEMENTS

This Quarterly Report includes statements concerning our expectations, beliefs, plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements that are not historical facts. These statements are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those expressed or implied by these statements. In some cases, our forward-looking statements can be identified by the words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “goal,” “intend,” “may,” “objective,” “plan,” “potential,” “predict,” “projection,” “should,” “will” or other similar words. We have based our forward-looking statements on our management’s beliefs and assumptions based on information available to our management at the time the statements are made. We caution you that assumptions, beliefs, expectations, intentions and projections about future events may and often do vary materially from actual results. Therefore, we cannot assure you that actual results will not differ materially from those expressed or implied by our forward-looking statements. Accordingly, investors are cautioned not to place undue reliance on any forward-looking information, including any earnings guidance, if applicable. Although we believe that the expectations reflected in the forward-looking statements are reasonable, these expectations and the related statements are subject to risks, uncertainties, and other factors that could cause the actual results to differ materially from those projected. These risks, uncertainties, and other factors 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;

• ability to service or refinance our debt and obtain future financing;

• the Company’s ability to comply with the financial tests and covenants in its existing and future debt obligations;

• operational limitations or restrictions in connection with our debt;

• recognition of asset impairment charges;

• commodity price increases and/or limited availability of raw materials, including steel;

• the 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;

• the volatility of the Company’s stock price;

• the substantial rights, seniority and dilutive effect on our common stockholders of the Convertible Preferred Stock issued to the investment funds affiliated with Clayton, Dubilier & Rice, LLC (the “CD&R Funds”);

• breaches of our information security system security measures;

• 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;

• our ability to integrate Metl-Span LLC with our business and to realize the anticipated benefits of such acquisition (the “Acquisition”);

• costs and other effects of legal and administrative proceedings, settlements, investigations, claims and other matters; and

• other risks detailed under the caption “Risk Factors” in Part II, Item 1A of this report and in our most recent Annual Report on Form 10-K as filed with the SEC.

A forward-looking statement may include a statement of the assumptions or bases underlying the forward-looking statement. We believe that we have chosen these assumptions or bases in good faith and that they are reasonable. However, we caution you that assumed facts or bases almost always vary from actual results, and the differences between assumed facts or bases and actual results can be material, depending on the circumstances. When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements in this report, including those described under the caption “Risk Factors” in our most recent Annual Report on Form 10-K as filed with the SEC. We expressly disclaim any obligations to release publicly any updates or revisions to these forward-looking statements to reflect any changes in our expectations unless the securities laws require us to do so.

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OVERVIEW

NCI Building Systems, Inc. (together with its subsidiaries, unless the context requires otherwise, the “Company,” “NCI,” “we,” “us” or “our”) is one of North America’s largest integrated manufacturers and marketers of metal products for the nonresidential construction industry. We provide metal coil coating services and design, engineer, manufacture and market metal components and engineered building systems primarily for nonresidential construction use. We manufacture and distribute extensive lines of metal products for the nonresidential construction market under multiple brand names through a nationwide network of plants and distribution centers. We sell our products for both new construction and repair and retrofit applications.

Metal components offer builders, designers, architects and end-users several advantages, including lower long-term costs, longer life, attractive aesthetics and design flexibility. Similarly, engineered building systems offer a number of advantages over traditional construction alternatives, including shorter construction time, more efficient use of materials, lower construction costs, greater ease of expansion and lower maintenance costs.

We use a 52/53 week year with our fiscal year end on the Sunday closest to October 31. In fiscal 2013, our year end will be November 3, 2013 which is the Sunday closest to October 31. As a result, the fourth quarter of fiscal 2013 will include an additional week of operating activity.

We assess performance across our business segments by analyzing and evaluating (i) gross profit, operating income and whether or not each segment has achieved its projected sales goals, and (ii) non-financial efficiency indicators such as gross profit per employee, man hours per ton of steel produced and shipped tons per day. In assessing our overall financial performance, we regard return on adjusted operating assets, as well as growth in earnings, as key indicators of shareholder value.

First Fiscal Quarter

Our strongest performing segment during the first quarter of fiscal 2013 was the metal components segment. This segment produced a 56% increase in third-party revenues driven by the acquisition of Metl-Span and modest organic growth. Operating income increased 10% in the first quarter of fiscal 2013 compared to the same period in the prior year as higher margin insulated metal products offset some integration costs, the impact of pricing pressure in the core commercial and industrial components business, and higher operating expenses to support growth in the second half of fiscal 2013.

The metal coil coating segment reported a 4% increase in operating income in the first quarter of fiscal 2013 compared to the first quarter of fiscal 2012 on flat sales, as higher internal revenue enabled manufacturing efficiencies which were partially offset by new plant start-up costs and the impact of weather-related shipment delays. In January 2013, the new metal coil coating plant in Middletown, Ohio was officially opened and is expected to benefit all three of our business segments and provide the Company with both additional capacity and broader geographic reach. The new facility is expected to increase the metal coil coating segment’s revenues progressively in fiscal 2013, and be incremental to profits in the fourth quarter of this fiscal year.

The engineered building systems segment’s third-party revenues increased 4% in the first quarter of fiscal 2013 compared to the first quarter of fiscal 2012. However, operating profit declined to $4.0 million in the first quarter of fiscal 2013 from $7.6 million in the same period in the prior year due to the combination of less favorable project mix and higher labor costs incurred in anticipation of higher volumes in the seasonally stronger second half of the fiscal year.

Industry Conditions

Our sales and earnings are subject to both seasonal and cyclical trends and are influenced by general economic conditions, interest rates, the price of steel relative to other building materials, the level of nonresidential construction activity, roof repair and retrofit demand and the availability and cost of financing for construction projects. Our sales normally are lower in the first half of each fiscal year compared to the second half because of unfavorable weather conditions for construction and typical business planning cycles affecting construction.

The nonresidential construction industry is highly sensitive to national and regional macroeconomic conditions. One of the primary challenges we face is that the United States economy is slowly recovering from a recession and is in a period of historically low nonresidential construction activity, which began in the third quarter of 2008 and reduced demand for our products, adversely affected our business. In addition, the tightening of credit in financial markets over the same period adversely affected the ability of our customers to obtain financing for construction projects. As a result, we have experienced decreases in orders and cancellations of orders for our products in previous fiscal quarters, and the ability of our customers to make payments has been adversely affected. Similar factors could cause our suppliers to experience financial distress or bankruptcy, resulting in temporary raw material shortages. The lack of credit also adversely affects nonresidential construction, which is the focus of our business. While economic growth has either resumed or remains flat, the nonresidential construction industry continues to face significant challenges. The graph below shows the annual nonresidential new construction starts, measured in square feet, since 1968 as compiled and reported by McGraw-Hill: 

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 Source: McGraw-Hill

When assessing the state of the metal construction market, we review information from various industry associations, third-party research, and various government reports such as industrial production and capacity utilization. One such industry association is the Metal Building Manufacturers Association, which provides summary member sales information and promotes the design and construction of metal buildings and metal roofing systems. Another is McGraw-Hill Construction Information Group (“McGraw-Hill Construction”), which we review for information regarding actual and forecasted growth in various construction related industries, including the overall nonresidential construction market. McGraw-Hill Construction’s nonresidential construction forecast for calendar 2013, published in January 2013, indicates an expected increase of 8% in square footage and an increase of 6% in dollar value as compared to the prior calendar year. In calendar 2014, activity is expected to increase compared to calendar 2013, with an expected increase of 15% in square footage and an increase of 13% in dollar value. Additionally, we review the American Institute of Architects’ (“AIA”) survey for inquiry and billing activity for the industrial, commercial and institutional sectors. The AIA’s architecture billings index (“ABI”) is a closely watched metric, as billings growth for architecture services generally leads to construction spending growth 9 to 12 months forward. We have historically experienced a shorter lag period of 6 – 9 months when comparing the commercial and industrial ABI trends to our volume trends. An ABI reading above 50 indicates an increase in month-to-month seasonally adjusted billings and a reading below 50 indicates a decrease in month-to-month seasonally adjusted billings. AIA’s ABI published for January 2013 was above 50 at 54.2 and the commercial and industrial component of the index was at 52.0 for January 2013.

Another challenge we face both short and long term is the volatility in the price of steel. Our business is heavily dependent on the supply of steel and is significantly impacted by steel prices. For the fiscal three months ended January 27, 2013, steel represented approximately 70% of our cost of goods sold. The steel industry is highly cyclical in nature, and steel prices have been volatile in recent years and may remain volatile in the future. Steel prices are influenced by numerous factors beyond our control, including general economic conditions domestically and internationally, the availability of raw materials, competition, labor costs, freight and transportation costs, production costs, import duties and other trade restrictions. The monthly CRU North American Steel Price Index, published by the CRU Group, has increased 3.0% from October 2012 to January 2013 and was 11.2% lower in January 2013 compared to January 2012.

We normally do not maintain an inventory of steel in excess of our current production requirements. However, from time to time, we may purchase steel in advance of announced steel price increases. We can give no assurance that steel will be readily available or that prices will not continue to be volatile. While most of our sales contracts have escalation clauses that allow us, under certain circumstances, to pass along all or a portion of increases in the price of steel after the date of the contract but prior to delivery, for competitive or other reasons we may not be able to pass such price increases along. If the available supply of steel declines, we could experience price increases that we are not able to pass on to the end users, a deterioration of service from our suppliers or interruptions or delays that may cause us not to meet delivery schedules to our customers. Any of these problems could adversely affect our results of operations and financial condition. For additional discussion please see “Item 3. Quantitative and Qualitative Disclosures About Market Risk—Steel Prices.”

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RESULTS OF OPERATIONS

Operating segments are defined as components of an enterprise that engage in business activities and by which discrete financial information is available that is evaluated on a regular basis by the chief operating decision maker to make decisions about how to allocate resources to the segment and assess the performance of the segment. We have three operating segments: (i) metal coil coating; (ii) metal components; and (iii) engineered building systems. All operating segments operate primarily in the nonresidential construction market. Sales and earnings are influenced by general economic conditions, the level of nonresidential construction activity, metal roof repair and retrofit demand and the availability and terms of financing available for construction. Products of all operating segments use similar basic raw materials. The metal coil coating segment consists of cleaning, treating, painting and slitting continuous steel coils before the steel is fabricated for use by construction and industrial users. The metal components segment products include metal roof and wall panels, doors, metal partitions, metal trim, insulated panels and other related accessories. Metl-Span is included in the metal components segment. The engineered building systems segment includes the manufacturing of main frames, Long Bay ^® Systems and value-added engineering and drafting, which are typically not part of metal components or metal coil coating products or services. The operating segments follow the same accounting policies used for our consolidated financial statements.

We evaluate a segment’s performance based primarily upon operating income before corporate expenses. Intersegment sales are recorded based on standard material costs plus a standard markup to cover labor and overhead and consist of: (i) hot-rolled, light gauge painted, and slit material and other services provided by the metal coil coating segment to both the metal components and engineered building systems segments; (ii) building components provided by the metal components segment to the engineered building systems segment; and (iii) structural framing provided by the engineered building systems segment to the metal components segment.

Corporate assets consist primarily of cash but also include deferred financing costs, deferred taxes and property, plant and equipment associated with our headquarters in Houston, Texas. These items (and income and expenses related to these items) are not allocated to the business segments. Corporate unallocated expenses include share-based compensation expenses, and executive, legal, finance, tax, treasury, human resources, information technology, purchasing, marketing and corporate travel expenses. Additional unallocated expenses include interest income, interest expense, debt extinguishment costs and other (expense) income. See Note 13 — Business Segments to the consolidated financial statements for more information on our segments.

The following table represents sales and operating income attributable to these operating segments for the periods indicated (in thousands, except percentages):

	Fiscal Three Months Ended
	January 27, 2013			January 29, 2012
Total sales:
Metal coil coating	$	49,271		$	49,083
Metal components		153,904			105,752
Engineered building systems		147,566			140,298
Intersegment sales		(53,157	)		(51,530	)
Total sales	$	297,584		$	243,603
External sales:
Metal coil coating	$	19,221		$	20,238
Metal components		136,528			87,296
Engineered building systems		141,835			136,069
Total sales	$	297,584		$	243,603
Operating income (loss):
Metal coil coating	$	5,542		$	5,302
Metal components		6,072			5,541
Engineered building systems		4,041			7,596
Corporate		(15,257	)		(14,154	)
Total operating income (loss)	$	398		$	4,285
Unallocated other expense		(5,850	)		(3,270	)
Income (loss) before income taxes	$	(5,452	)	$	1,015

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FISCAL THREE MONTHS ENDED JANUARY 27, 2013 COMPARED TO FISCAL THREE MONTHS ENDED JANUARY 29, 2012

Consolidated sales increased by 22.2%, or $54.0 million for the three months ended January 27, 2013, compared to the three months ended January 29, 2012. This increase resulted from higher tonnage volumes in our metal components and engineered building systems segments for the three months ended January 27, 2013 compared to the same period in 2012 which was driven by the inclusion of Metl-Span in the current period and improved demand in the end use sectors we serve compared to the prior year. These increases were partially offset by weather-related shipment delays and lower sales prices related to lower input costs in the current period.

Consolidated cost of sales increased by 24.6%, or $46.7 million for the three months ended January 27, 2013, compared to the three months ended January 29, 2012. Gross margins were 20.5% for the three months ended January 27, 2013 compared to 22.0% for the same period in the prior year. The decrease in gross margins was the result of a less favorable product mix in our engineered metal buildings segment, which included a large portion of lower-margin structural products, the additional costs associated with the ramp-up of the new Middletown facility, integration cost for our Metl-Span acquisition, and our decision to retain and train skilled manufacturing workers in order to capture additional efficiencies in the seasonally stronger second half of our fiscal year. The decrease was partially offset by higher tonnage volumes in our metal components and engineered building systems segments which increased our operating leverage for the three months ended January 27, 2013 compared to the same period in 2012 as noted above.

Metal coil coating sales increased by 0.4%, or $0.2 million to $49.3 million in the three months ended January 27, 2013, compared to $49.1 million in the same period in the prior year. Sales to third parties for the three months ended January 27, 2013 decreased by 5.0% to $19.2 million from $20.2 million in the same period in the prior year, primarily as a result of a 4.0% decrease in external tons shipped as a result of our decision to curtail certain lower margin products. The remaining $1.2 million represents an increase in intersegment sales for the three months ended January 27, 2013 compared to the same period in the prior year. Metal coil coating third-party sales accounted for 6.5% of total consolidated third-party sales in the three months ended January 27, 2013 compared to 8.3% in the three months ended January 29, 2012.

Operating income of the metal coil coating segment increased to $5.5 million in the three months ended January 27, 2013, compared to $5.3 million in the same period in the prior year. The $0.2 million increase resulted primarily from a $0.6 million increase in gross profit due to higher leverage on increased intersegment volume, partially offset by startup manufacturing costs in Ohio. This increase in operating income was partially offset by a $0.4 million increase in selling and administrative expenses related to a $0.5 million one-time insurance recovery in the same period in the prior year.

Metal components sales increased 45.5%, or $48.2 million to $153.9 million in the three months ended January 27, 2013, compared to $105.8 million in the same period in the prior year. This increase was primarily due to a 39.6% increase in external tons shipped, partially offset by a 10.9% reduction in internal volume and lower sales prices driven by lower input costs. The volume increase was driven by the inclusion of Metl-Span in the current period and improved demand in the end use sectors we serve in the three months ended January 27, 2013. Metl-Span was acquired on June 22, 2012 and contributed $46.1 million of sales in the first quarter of fiscal 2013. Sales to third parties for the three months ended January 27, 2013 increased $49.2 million to $136.5 million from $87.3 million in the same period in the prior year. The remaining $1.1 million represents a decrease in intersegment sales. Metal components third-party sales accounted for 45.9% of total consolidated third-party sales in the three months ended January 27, 2013 compared to 35.8% in the three months ended January 29, 2012.

Operating income of the metal components segment increased to $6.1 million in the three months ended January 27, 2013, compared to $5.6 million in the same period in the prior year. The $0.5 million increase resulted from an increase in external tons shipped as noted above and the inclusion of Metl-Span which contributed $3.0 million of operating income during the first quarter of fiscal 2013. These increases were partially offset by a $7.6 million increase in selling and administrative expenses related to $6.1 million in Metl-Span operating expenses as a result of the inclusion of Metl-Span in the current period, $1.0 million of integration related costs related to an insulated panel plant conversion, $0.5 million in wages and commissions and $0.5 million in bad debt expense.

Engineered building systems sales increased 5.2%, or $7.3 million to $147.6 million in the three months ended January 27, 2013, compared to $140.3 million in the same period in the prior year. This increase resulted from a 8.9% increase in external tons shipped. These results were driven by improved demand in the end use sectors we serve in the three months ended January 27, 2013. This increase was partially offset by lower sales prices due to a less favorable product mix shipped and lower input costs in the three months ended January 27, 2013 compared to the same period in the prior year. Sales to third parties for the three months ended January 27, 2013 increased $5.7 million to $141.8 million from $136.1 million in the same period in the prior year. The remaining $1.5 million represents an increase in intersegment sales. Engineered building systems third-party sales accounted for 47.7% of total consolidated third-party sales in the three months ended January 27, 2013 compared to 55.9% in the three months ended January 29, 2012.

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Operating income of the engineered building systems segment decreased to income of $4.0 million in the three months ended January 27, 2013 compared to income of $7.6 million in the same period in the prior year. This $3.6 million decline resulted from a $1.5 million decrease in gross profit due to a less favorable product mix, increased labor costs incurred in anticipation of higher volumes in the seasonally stronger second half of our fiscal year, and a $2.1 million increase in engineering, selling and administrative expenses primarily due to a $1.5 million increase in wages, commissions and benefit costs which was mainly the result of higher volume and $0.8 million in bad debt expense.

Consolidated engineering, selling, general and administrative expenses, consisting of engineering, drafting, selling and administrative costs, increased to $60.5 million in the three months ended January 27, 2013, compared to $48.9 million in the same period in the prior year. The $11.7 million increase in engineering, selling and administrative expenses was primarily due to a $6.1 million increase in operating expenses as a result of the Acquisition, a $2.8 million increase in wages, commissions and benefit costs which was mainly the result of higher volume, a $1.3 million increase in share-based compensation expense and a $1.3 million increase in bad debt expense. As a percentage of sales, engineering, selling, general and administrative expenses were 20.3% for the three months ended January 27, 2013 as compared to 20.1% for the three months ended January 29, 2012.

Consolidated interest expense increased to $6.3 million for the three months ended January 27, 2013, compared to $3.3 million for the same period of the prior year. Interest expense increased due to a higher term loan balance which increased from $128.5 million to $250.0 million on June 22, 2012 as a result of and in connection with the Metl-Span acquisition and the Company entering into a Credit Agreement which provided for a term loan credit facility in an aggregate principal amount of $250.0 million. Additionally, interest rates on the Credit Agreement increased from 6.5% to 8% on June 22, 2012.

Consolidated provision (benefit) for income taxes was a $1.8 million benefit for the three months ended January 27, 2013, compared to a $0.4 million provision for the same period in the prior year. The effective tax rate for the three months ended January 27, 2013 was 33.5% compared to 42.0% for the same period in the prior year. The decrease in the effective tax rate for the three months ended January 27, 2013 compared to the same period in the prior year was the result of the utilization during this fiscal year of certain Canadian net operating loss carry forwards which have been previously reserved and the availability of the domestic production activities deduction which was not available to us in the prior year.

Consolidated Convertible Preferred Stock dividends and accretion was $6.6 million for the three months ended January 29, 2012. There was no amount recorded for the three months ended January 27, 2013. The $6.6 million related primarily to our paying accrued dividends on our Series B Cumulative Convertible Participating Preferred Stock, par value $1.00 per share (“Convertible Preferred Stock,” and shares thereof, “Preferred Shares”), which prior to May 18, 2012 accrued and accumulated on a daily basis at 12% per annum. We do not expect to pay dividends on the Preferred Shares in future periods as a result of amending the terms of our Convertible Preferred Stock. See “—Convertible Preferred Stock.”

Consolidated Convertible Preferred Stock beneficial conversion feature charge was $4.0 million for the three months ended January 29, 2012. There was no amount recorded for the three months ended January 27, 2013. The $4.0 million related to dividends that have accrued on our Convertible Preferred Stock and are convertible into shares of Common Stock at a conversion price below the prevailing market price of Common Stock during the accrual period. The decrease was the result of  an Amendment Agreement with the CD&R Funds, the holders of our Convertible Preferred Stock on May 8, 2012 to eliminate our quarterly dividend obligation on the Preferred Shares. See “—Convertible Preferred Stock.”

Diluted loss per common share declined to a loss of $(0.19) per diluted common share for the three months ended January 27, 2013, compared to a loss of $(0.54) per diluted common share for the same period in the prior year. The decline in the diluted loss per common share was primarily due to the $6.4 million decline in net loss applicable to shares of our Common Stock resulting from the factors described above in this section. At January 27, 2013, the Preferred Shares were convertible into 54.1 million shares of Common Stock. The Convertible Preferred Stock and the unvested restricted Common Stock related to our Incentive Plan do not have a contractual obligation to share in losses; therefore, no losses were allocated to these shares in both periods presented. These participating securities will be allocated earnings when applicable.

LIQUIDITY AND CAPITAL RESOURCES

General

Our cash and cash equivalents declined from $55.2 million to $25.8 million during the three months ended January 27, 2013. The following table summarizes our consolidated cash flows for the three months then ended January 27, 2013 and January 29, 2012 (dollars in thousands):

	Fiscal Three Months Ended
	January 27, 2013			January 29, 2012
Net cash used in operating activities		(13,172	)		(4,205	)
Net cash used in investing activities		(6,071	)		(5,745	)
Net cash used in financing activities		(10,064	)		(2,321	)
Effect of exchange rate changes on cash and cash equivalents		(24	)		(5	)
Net decrease in cash and cash equivalents		(29,331	)		(12,276	)
Cash and cash equivalents at beginning of period		55,158			78,982
Cash and cash equivalents at end of period	$	25,827		$	66,706

Operating Activities

Our business is both seasonal and cyclical and cash flows from operating activities may fluctuate during the year and from year to year due to economic conditions. We rely on cash and short-term borrowings to meet cyclical and seasonal increases in working capital needs. These needs generally rise during periods of increased economic activity or increasing raw material prices due to higher levels of inventory and accounts receivable. During economic slowdowns, or periods of decreasing raw material costs, working capital needs generally decrease as a result of the reduction of inventories and accounts receivable.

Net cash used in operating activities was $13.2 million during the three months ended January 27, 2013 compared to $4.2 million in the comparable period of fiscal 2012. This difference was largely driven by changes in working capital over the comparable period of the prior year.

The primary driver for our increased use of cash for working capital needs was a $20.1 million increase in our cash used for accounts payable over the comparable period of the prior year. Our vendor payments during the current quarter were significantly higher due to the fact that the fourth quarter of the prior year had shown significant year-over-year revenue growth requiring an increase in raw material used. A significant portion of that year-over-year growth was driven by the acquisition of Metl-Span on June 22, 2012. In addition, our days payable outstanding (“DPO”) as of January 27, 2013 decreased to 32 days from 36 days in the prior year. Beyond the seasonally higher payments, we increased the speed with which we paid our suppliers during the current period to take advantage of discounts offered, which increased the amount of cash used for accounts payable as compared to the prior year period.

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Cash generated from accounts receivable was $8.0 million higher in the current three month period than the comparable period of the prior year. This increase was also driven by the significant year-over-year revenue growth in the fourth fiscal quarter of 2012. This growth was offset by an increase in days sales outstanding (“DSO”) to 38 days at January 27, 2013 from 32 days in the prior year. The increase in days outstanding is partially due to the inclusion of Metl-Span in the current period, which has historically had a slower customer payment cycle. In addition, we experienced slower customer payments as our customers are beginning to experience growth in their businesses after several years of decline, putting additional pressure on the customers’ working capital needs and timeliness of payments. The slower customer payments have resulted in additional provision for doubtful accounts accordingly.

Cash used during the period to invest in inventory was $7.8 million for the three months ended January 27, 2013 which was lower than the $13.5 million invested in the comparable period of the prior year. The reduction was driven by a decrease in our days inventory on-hand (“DIO”), as our DIO was 43 days at January 27, 2013 as compared to 46 days in the comparable period last year.

Investing Activities

Investing activities of $6.1 million during the three months ended January 27, 2013 were similar to the $5.8 million in the comparable period of the prior year and relate predominantly to capital expenditures.

Financing Activities

Cash used in financing activities increased to $10.1 million from $2.3 million in the comparable prior year period. This increase results primarily from the $8.8 million payments made to reduce our outstanding term loan during the three months ended January 27, 2013.

We invest our excess cash in various overnight investments which are issued or guaranteed by the federal government.

Convertible Preferred Stock

On October 20, 2009, we closed the $250.0 million equity investment by the CD&R Funds in the Company. As a result of that equity investment, the CD&R Funds acquired 250,000 shares of Convertible Preferred Stock (such purchase and sale, the “CD&R Equity Investment”), which represented 68.4% of the then voting power and Common Stock of the Company on an as-converted basis. As of both January 27, 2013 and October 28, 2012, the Preferred Shares, including shares issued as in-kind dividends on the CD&R Equity Investment, were convertible into approximately 54.1 million shares of Common Stock at an initial conversion price of $6.3740.

At both January 27, 2013 and October 28, 2012, we had 339,293 Preferred Shares outstanding. In addition, at both January 27, 2013 and October 28, 2012, we had accrued but unpaid cash and in-kind dividends on the Preferred Shares with a value of $5.8 million. As of both January 27, 2013 and October 28, 2012, the aggregate liquidation preference plus aggregate accrued dividends of the Convertible Preferred Stock was $345.1 million.

Under the terms of the Certificate of Designations, we were contractually obligated to pay quarterly dividends to the holders of the convertible preferred shares from October 20, 2009, through October 20, 2019, subject to certain dividend “knock-out” provisions. The dividend “knock-out” provision provided that if, at any time after the 30-month anniversary of the Closing Date of October 20, 2009 (i.e., March 20, 2012), the trading price of the Common Stock exceeds $12.75, which is 200% of the initial conversion price of the Convertible Preferred Stock ($6.374), for each of 20 consecutive trading days, the dividend rate (excluding any applicable adjustments as a result of a default) will become 0.00%

On May 8, 2012, we entered into an Amendment Agreement (the “Amendment Agreement”) with the CD&R Funds, the holders of our convertible preferred shares, to eliminate our quarterly dividend obligation on the Preferred Shares. The Amendment Agreement provided for the Certificate of Designations to be amended to terminate the dividend obligation from and after March 15, 2012 (the “Dividend Knock-out”). However, this does not preclude the payment of contingent default dividends, if applicable. On July 5, 2012, the Company filed an Amended and Restated Certificate of Designations with the Secretary of State for the state of Delaware effecting the elimination of the quarterly dividend obligation on the Preferred Shares.

As consideration for the Dividend Knock-out, the CD&R Funds received a total of 37,834 additional shares of Convertible Preferred Stock, representing (i) approximately $6.5 million of dividends accrued from March 15, 2012 through May 18, 2012 (20 trading days after April 20, 2012, on which date the dividend “knock-out” measurement period commenced) and (ii) approximately $31.4 million in additional liquidation preference of Convertible Preferred Stock, or 10% of the approximate total $313.7 million of accreted value as of May 18, 2012. Upon the closing of the transactions in the Amendment Agreement, the CD&R Funds held Convertible Preferred Stock with an aggregate liquidation preference and accrued dividends of approximately $345 million. The Convertible Preferred Stock and accrued dividends entitle the CD&R Funds to receive approximately 54.1 million shares of common stock, representing 72.3% of the voting power and common stock of the Company on an as-converted basis as of January 27, 2013.

The Amendment Agreement with the CD&R Funds has been approved by the Company’s independent directors, as “independence” is defined by the rules and regulations of the Securities and Exchange Commission and the listing standards of the New York Stock Exchange, as well as by all of the Company’s directors who are independent of and not affiliated with the CD&R Funds.

On March 15, 2012, the Company paid to the holders of Convertible Preferred Stock, the CD&R Funds, a dividend of 8,924.762 shares of Convertible Preferred Stock for the period from December 16, 2011 to March 15, 2012. On December 15, 2011, the Company paid to the holders of Convertible Preferred Stock, the CD&R Funds, a dividend of 5,833.491 shares of Convertible Preferred Stock for the period from September 16, 2010 to December 15, 2011.

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During the three months ended January 29, 2012, the Company recorded accretion and accrued dividends of $0.7 million and $5.9 million, respectively. In the first quarter of fiscal 2012, we recorded a net $4.0 million beneficial conversion feature charge related to dividends that have accrued and are convertible into shares of Common Stock.

See Note 10 — Series B Cumulative Convertible Participating Preferred Stock to the consolidated financial statements for more information on the material terms of our Amendment Agreement.

Debt

We have a Credit Agreement, (the “Credit Agreement”) which includes an initial $250 million term loan. The term loan under the Credit Agreement will mature on May 2, 2018 and, prior to that date, will amortize in nominal quarterly installments equal to one percent of the aggregate initial principal amount thereof per annum. At January 27, 2013 and October 28, 2012, amounts outstanding under the Credit Agreement were $240.0 million and $248.8 million, respectively.

In addition to our Credit Agreement we have an Amended Asset-Based Lending Facility (the “Amended ABL Facility”) which allows aggregate maximum borrowings of up to $150.0 million. Borrowing availability on the Amended ABL Facility is determined by a monthly borrowing base collateral calculation that is based on specified percentages of the value of qualified cash, eligible inventory and eligible accounts receivable, less certain reserves and subject to certain other adjustments. The Amended ABL Facility has a maturity of May 2, 2017 and includes borrowing capacity of up to $30 million for letters of credit and up to $10 million for swingline borrowings. At January 27, 2013 and October 28, 2012, our excess availability under the Amended ABL Facility was $97.7 million and $111.1 million, respectively. There were no amounts outstanding under the Amended ABL Facility at both January 27, 2013 and October 28, 2012. In addition, at both January 27, 2013 and October 28, 2012, letters of credit totaling approximately $8.5 million were outstanding but undrawn under the Amended ABL Facility.

Credit Agreement. On June 22, 2012, in connection with the Acquisition, the Company entered into the Credit Agreement with Credit Suisse AG, Cayman Islands Branch, as Administrative Agent and Collateral Agent (the “Term Agent”), and the lenders party thereto. The Credit Agreement provides for a term loan credit facility in an aggregate principal amount of $250.0 million. Proceeds from borrowings under the Credit Agreement were used, together with cash on hand, (i) to finance the Acquisition, (ii) to extinguish the existing amended and restated credit agreement, due April 2014 (the “Refinancing”), and (iii) to pay fees and expenses incurred in connection with the Acquisition and the Refinancing. At January 27, 2013 and October 28, 2012, amounts outstanding under the Credit Agreement were $240.0 million and $248.8 million, respectively.

The term loan under the Credit Agreement will mature on May 2, 2018 and, prior to such date, will amortize in nominal quarterly installments equal to one percent of the aggregate initial principal amount thereof per annum. The Credit Agreement was issued at 95% of face value, which resulted in a note discount of $12.5 million. The note discount will be amortized over the life of the loan through May 2, 2018 using the effective interest method.

The term loan under the Credit Agreement will be prepayable at the Company’s option at any time. Prepayments in connection with a repricing transaction (as defined in the Credit Agreement) during the first two years after the closing of the Credit Agreement will be subject to a prepayment premium equal to 2% of the principal amount of the term loan so prepaid during the first year after the closing of the Credit Agreement and 1% of the principal amount of the term loan so prepaid during the second year after the closing of the Credit Agreement. Prepayments may otherwise be made without premium or penalty (other than customary breakage costs).

Subject to certain exceptions, the term loan under the Credit Agreement will be subject to mandatory prepayment in an amount equal to:

• the net cash proceeds of (1) certain asset sales, (2) certain debt offerings, and (3) certain insurance recovery and condemnation events; and

• 75% of annual excess cash flow (as defined in the Credit Agreement) for any fiscal year ending on or after November 3, 2013, subject to reduction to 50%, 25% or 0% if specified leverage ratio targets are met.

The Company’s obligations under the Credit Agreement and designated cash management arrangements and hedging agreements, if any, will be irrevocably and unconditionally guaranteed on a joint and several basis by each direct and indirect wholly owned domestic subsidiary of the Company (other than any domestic subsidiary that is a foreign subsidiary holding company or a subsidiary of a foreign subsidiary and certain other excluded subsidiaries).

The obligations under the Credit Agreement and the designated cash management arrangements and hedging agreements, if any, and the guarantees thereof are secured pursuant to a guarantee and collateral agreement, dated as of June 22, 2012 (the “Guarantee and Collateral Agreement”), made by the Company and other Grantors (as defined therein), in favor of the Term Agent, by (i) all of the capital stock of all direct domestic subsidiaries owned by the Company and the guarantors, (ii) up to 65% of the capital stock of certain direct foreign subsidiaries owned by the Company or any guarantor (it being understood that a foreign subsidiary holding company or a domestic subsidiary of a foreign subsidiary will be deemed a foreign subsidiary), and (iii) substantially all other tangible and intangible assets owned by the Company and each guarantor, in each case to the extent permitted by applicable law and subject to certain exceptions.

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At the Company’s election, the interest rates applicable to the term loan under the Credit Agreement will be based on a fluctuating rate of interest measured by reference to either (1) an adjusted London Interbank Offered Rate, or “LIBOR,” or (2) an alternate base rate, in each case, plus a borrowing margin. Overdue amounts will bear interest at a rate that is 2% higher than the rate otherwise applicable.

The Credit Agreement contains a number of covenants that, among other things, will limit or restrict the ability of the Company and its subsidiaries to dispose of assets, incur additional indebtedness, make dividends and other restricted payments, create liens securing indebtedness, engage in mergers and other fundamental transactions, enter into restrictive agreements, amend certain documents in respect of other indebtedness, change the nature of their business and engage in certain transactions with affiliates.

In addition, under the Credit Agreement the Company will be subject to a financial covenant that requires the Company to maintain a specified consolidated total net debt to EBITDA leverage ratio for specified periods. The consolidated total net debt to EBITDA leverage ratio must be no more than 3.75:1.00 each quarter. The ratio steps down by 0.5 to 3.25:1.00 beginning with the quarter ending November 3, 2013. This ratio steps down by another 0.5 to 2.75:1.00 beginning with the quarter ending November 2, 2014. Our consolidated total net debt to EBITDA leverage ratio as of January 27, 2013 and October 28, 2012 was 2.46:1.00 and 2.23:1.00, respectively.

The Credit Agreement contains customary events of default, including non-payment of principal, interest or fees, violation of covenants, material inaccuracy of representations or warranties, cross default and cross acceleration to certain other material indebtedness, certain bankruptcy events, certain ERISA events, material invalidity of security interest, material judgments, and change of control.

The Credit Agreement also provides that the Company has the right at any time to request incremental commitments under one or more incremental term loan facilities or incremental revolving loan facilities, subject to compliance with a pro forma consolidated secured net debt to EBITDA leverage ratio. The lenders under the Credit Agreement will not be under any obligation to provide any such incremental commitments, and any such addition of or increase in commitments will be subject to pro forma compliance with customary conditions.

In connection with the execution of the Credit Agreement the Company, certain of the Company’s subsidiaries, Wells Fargo Capital Finance, LLC, as administrative agent (the “ABL Agent”) under the Company’s Amended ABL Facility, and the Term Agent entered into an amendment (the “Intercreditor Agreement Amendment”) to the Company’s existing Intercreditor Agreement, dated as of October 20, 2009, providing for, among other things, the obligations under the Credit Agreement to become subject to the provisions of the Intercreditor Agreement. In addition, in connection with the Acquisition, Metl-Span became a borrower under the ABL Facility, and the Company, certain subsidiaries of the Company, and the ABL Agent entered into an amendment (the “ABL Guaranty Amendment”) to the Company’s existing Guaranty Agreement, dated as of October 20, 2009, providing for, among other things, the guarantee of the obligations of Metl-Span under the ABL Facility.

ABL Facility. On May 2, 2012, we entered into the Amended ABL Facility to (i) permit the Acquisition, the entry by the Company into the Credit Agreement and the incurrence of debt thereunder and the repayment of existing indebtedness under NCI’s existing term loan, (ii) increase the amount available for borrowing thereunder to $150 million (subject to a borrowing base), (iii) increase the amount available for letters of credit thereunder to $30 million, and (iv) extend the final maturity thereunder to May 2, 2017.

The Amended ABL Facility provides for an asset-based revolving credit facility which allows aggregate maximum borrowings by NCI Group, Inc. and Robertson-Ceco II Corporation of up to $150.0 million. Borrowing availability under the Amended ABL Facility is determined by a monthly borrowing base collateral calculation that is based on specified percentages of the value of qualified cash, eligible inventory and eligible accounts receivable, less certain reserves and subject to certain other adjustments. At January 27, 2013 and October 28, 2012, our excess availability under the Amended ABL Facility was $97.7 million and $111.1 million, respectively. Under the Amended ABL Facility, there were no amounts of borrowings outstanding at both January 27, 2013 and October 28, 2012. In addition, at both January 27, 2013 and October 28, 2012, letters of credit totaling approximately $8.5 million were outstanding but undrawn under the Amended ABL Facility.

An unused commitment fee is paid monthly on the Amended ABL Facility at an annual rate of 0.50% based on the amount by which the maximum credit exceeds the average daily principal balance of outstanding loans and letter of credit obligations. Additional customary fees in connection with the Amended ABL Facility also apply.

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The obligations of the borrowers under the Amended ABL Facility are guaranteed by the Company and each direct and indirect domestic subsidiary of the Company (other than any domestic subsidiary that is a foreign subsidiary holding company or a subsidiary of a foreign subsidiary that is insignificant) that is not a borrower under the Amended ABL Facility. The obligations of the Company under certain specified bank products agreements are guaranteed by each borrower and each other direct and indirect domestic subsidiary of the Company and the other guarantors. These guarantees are made pursuant to a guarantee agreement, dated as of October 20, 2009, entered into by the Company and each other guarantor with Wells Fargo Capital Finance, LLC (formerly known as Wells Fargo Foothill, LLC), as administrative agent.

The obligations under the Amended ABL Facility, and the guarantees thereof, are secured by a first priority lien on our accounts receivable, inventory, certain deposit accounts, associated intangibles and certain other specified assets of the Company and a second priority lien on the assets securing the term loan under the Credit Agreement on a first-lien basis, in each case subject to certain exceptions.

The Amended ABL Facility contains a number of covenants that, among other things, limit or restrict our ability to dispose of assets, incur additional indebtedness, incur guarantee obligations, engage in sale and leaseback transactions, prepay other indebtedness, modify organizational documents and certain other agreements, create restrictions affecting subsidiaries, make dividends and other restricted payments, create liens, make investments, make acquisitions, engage in mergers, change the nature of our business and engage in certain transactions with affiliates.

Under the Amended ABL Facility, a “Dominion Event” occurs if either an event of default is continuing or excess availability falls below certain levels, during which period, and for certain periods thereafter, the administrative agent may apply all amounts in the Company’s, the borrowers’ and the other guarantors’ concentration accounts to the repayment of the loans outstanding under the Amended ABL Facility, subject to the Intercreditor Agreement and certain specified exceptions. In addition, during such Dominion Event, we are required to make mandatory payments on our Amended ABL Facility upon the occurrence of certain events, including the sale of assets and the issuance of debt, in each case subject to certain limitations and conditions set forth in the Amended ABL Facility.

The Amended ABL Facility includes a minimum fixed charge coverage ratio of one to one, which will apply if we fail to maintain at least $15.0 million of borrowing capacity. Although our Amended ABL Facility did not require any financial covenant compliance, at January 27, 2013 and October 28, 2012, our fixed charge coverage ratio as of those dates, which is calculated on a trailing twelve month basis, was 3.07:1:00 and 4.09:1:00, respectively.

Loans under the Amended ABL Facility bear interest, at our option, as follows:

(1)	Base Rate loans at the Base Rate plus a margin. The margin ranges from 1.50% to 2.00% depending on the quarterly average excess availability under such facility, and
(2)	LIBOR loans at LIBOR plus a margin. The margin ranges from 2.50% to 3.00% depending on the quarterly average excess availability under such facility.

At both January 27, 2013 and October 28, 2012, the interest rate on our Amended ABL Facility was 4.75%. During an event of default, loans under the Amended ABL Facility will bear interest at a rate that is 2% higher than the rate otherwise applicable. “Base Rate” is defined as the higher of the Wells Fargo Bank, N.A. prime rate and the overnight Federal Funds rate plus 0.5% and “LIBOR” is defined as the applicable London Interbank Offered Rate adjusted for reserves.

Cash Flow

We periodically evaluate our liquidity requirements, capital needs and availability of resources in view of inventory levels, expansion plans, debt service requirements and other operating cash needs. To meet our short- and long-term liquidity requirements, including payment of operating expenses and repaying debt, we rely primarily on cash from operations. Beyond cash generated from operations, we have an undrawn Amended ABL Facility with $97.7 million available at January 27, 2013 and $25.8 million of unrestricted cash at January 27, 2013. However, we have in the past, sought to raise additional capital.

We expect that, for the next 12 months, cash generated from operations will be sufficient to provide us the ability to fund our operations, provide the increased working capital necessary to support our strategy and fund planned capital expenditures of between approximately $21 million and $24 million for the remainder of fiscal 2013 and expansion when needed.

In the past, we have used available funds to repurchase shares of our Common Stock under our stock repurchase program though we have no intention to repurchase shares in the near-term. Although we did not purchase any Common Stock during the three months ended January 27, 2013 under the stock repurchase program, we did withhold shares of restricted stock to satisfy minimum tax withholding obligations arising in connection with the vesting of awards of restricted stock related to our 2003 Long-Term Stock Incentive Plan.

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Our corporate strategy seeks potential acquisitions which provide additional synergies in our metal coil coating, metal components and engineered building systems segments. From time to time, we may enter into letters of intent or agreements to acquire assets or companies in these business lines. The consummation of these transactions could require substantial cash payments and/or issuance of additional debt. See “— Acquisition of Metl-Span LLC” below.

The Company may from time to time repurchase or otherwise retire the Company’s debt and take other steps to reduce the Company’s debt or otherwise improve the Company’s financial position. These actions may include open market debt repurchases, negotiated repurchases, other retirements of outstanding debt and opportunistic refinancing of debt. The amount of debt that may be repurchased or otherwise retired, if any, will depend on market conditions, trading levels of the Company’s debt, the Company’s cash position, compliance with debt covenants and other considerations. Affiliates of the Company may also purchase the Company’s debt from time to time, through open market purchases or other transactions. In such cases, the Company’s debt may not be retired, in which case the Company would continue to pay interest in accordance with the terms of the debt, and the Company would continue to reflect the debt as outstanding in it is Consolidated Balance Sheets.

Acquisition of Metl-Span LLC

On June 22, 2012, we completed the acquisition of Metl-Span LLC, a Texas limited liability company, pursuant to the terms of the Equity Purchase Agreement, dated as of May 2, 2012, as amended (the “Equity Purchase Agreement”), among VSMA, Inc., Metl-Span, NCI Group, Inc. and BlueScope Steel North America Corporation. Pursuant to the terms of the Equity Purchase Agreement, NCI Group, Inc. acquired all of the outstanding membership interests of Metl-Span for approximately $145.7 million in cash. The purchase price is also subject to a post-closing adjustment based on Metl-Span’s cash, working capital, indebtedness, transaction expenses and accrued employee bonuses at closing. Upon the closing of the Acquisition, Metl-Span became a direct, wholly-owned subsidiary of NCI Group, Inc. Effective October 29, 2012, Metl-Span merged with and into NCI Group, Inc., with NCI Group, Inc. being the lone survivor. Metl-Span’s operations are now conducted through NCI Group, Inc.

Accordingly, the results of Metl-Span’s operations from June 22, 2012 are included in our consolidated financial statements. Metl-Span assets acquired through the Acquisition include five manufacturing facilities in the United States serving the nonresidential building products market with cost-effective and energy efficient insulated metal wall and roof panels.

See Note 2 — Acquisition to the consolidated financial statements for more information on the Acquisition.

NON-GAAP MEASURES

Set forth below are certain non-GAAP measures which include adjusted operating income (loss), adjusted diluted earnings (loss) per common share and adjusted EBITDA. Such measurements are not prepared in accordance with U.S. GAAP and should not be construed as an alternative to reported results determined in accordance with U.S. GAAP. Management believes the use of such non-GAAP measures on a consolidated and business segment basis assists investors in understanding the ongoing operating performance by presenting the financial results between periods on a more comparable basis. In addition, certain financial covenants related to our Credit Agreement and Amended ABL Facility are based on similar non-GAAP measures. The non-GAAP information provided is unique to the Company and may not be consistent with the methodologies used by other companies.

The following tables reconcile adjusted operating income (loss) to operating income (loss) for the periods indicated (in thousands):

	For the Three Months Ended January 27, 2013
	Metal Coil Coating		Metal Components		Engineered Building Systems		Corporate			Consolidated
Operating income (loss), GAAP basis	$	5,542	$	6,072	$	4,041	$	(15,257	)	$	398
Acquisition-related costs		—		—		—		—			—
“Adjusted” operating income (loss)	$	5,542	$	6,072	$	4,041	$	(15,257	)	$	398

	For the Three Months Ended January 29, 2012
	Metal Coil Coating		Metal Components		Engineered Building Systems		Corporate			Consolidated
Operating income (loss), GAAP basis	$	5,302	$	5,541	$	7,596	$	(14,154	)	$	4,285
Acquisition-related costs		—		—		—		396			396
“Adjusted” operating income (loss)	$	5,302	$	5,541	$	7,596	$	(13,758	)	$	4,681

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The following tables reconcile adjusted EBITDA to Net Income (Loss) for the periods indicated (in thousands):

	2 nd  Quarter April 29, 2012			3 rd  Quarter July 29, 2012			4 th Quarter October 28, 2012			1 st Quarter January 27, 2013			Trailing 12 Months January 27, 2013
Net income (loss)	$	1,321		$	(3,267	)	$	6,270		$	(3,627	)	$	697
Add:
Depreciation and amortization		5,841			7,248			10,355			9,122			32,566
Consolidated interest expense, net		3,034			4,159			6,226			6,244			19,663
Provision (benefit) for income taxes		942			(663	)		3,379			(1,825	)		1,833
Acquisition-related costs		1,494			2,946			153			—			4,593
Transaction costs		—			6,437			—			—			6,437
Executive retirement		508			—			—			—			508
Non-cash charges:
Stock-based compensation		2,119			2,090			3,116			3,442			10,767
Asset impairments (recoveries)		—			(22	)		13			—			(9	)
Embedded derivative		(6	)		(5	)		(5	)		(5	)		(21	)
Adjusted EBITDA	$	15,253		$	18,923		$	29,507		$	13,351		$	77,034

	2 nd  Quarter May 1, 2011			3 rd  Quarter July 31, 2011			4 th Quarter October 30, 2011			1 st Quarter January 29, 2012			Trailing 12 Months January 29, 2012
Net income (loss)	$	(3,229	)	$	2,593		$	3,411		$	589		$	3,364
Add:
Depreciation and amortization		7,187			7,187			6,753			6,158			27,285
Consolidated interest expense, net		3,870			3,864			3,685			3,296			14,715
Provision (benefit) for income taxes		(1,786	)		—			398			426			(962	)
Acquisition-related costs		—			—			—			396			396
Cash restructuring charges (recovery)		—			(575	)		283			—			(292	)
Non-cash charges:
Stock-based compensation		1,671			1,776			1,776			1,972			7,195
Asset impairments (recoveries)		—			(93	)		1,214			—			1,121
Embedded derivative		(6	)		(6	)		(6	)		(5	)		(23	)
Adjusted EBITDA	$	7,707		$	14,746		$	17,514		$	12,832		$	52,799

The following tables reconcile adjusted diluted loss per common share to loss per diluted common share and adjusted loss applicable to common shares to loss applicable to common shares for the periods indicated (in thousands): 

	Fiscal Three Months Ended
	January 27, 2013			January 29, 2012
Net loss per diluted common share, GAAP basis	$	(0.19	)	$	(0.54	)
Convertible preferred stock beneficial conversion feature		—			0.22
Acquisition-related costs, net of taxes		—			0.01
“Adjusted” diluted loss per common share	$	(0.19	)	$	(0.31	)

	Fiscal Three Months Ended
	January 27, 2013			January 29, 2012
Net loss applicable to common shares, GAAP basis	$	(3,627	)	$	(10,039	)
Convertible preferred stock beneficial conversion feature		—			4,020
Acquisition-related costs, net of taxes		—			244
“Adjusted” net loss applicable to common shares	$	(3,627	)	$	(5,775	)

OFF-BALANCE SHEET ARRANGEMENTS

As part of our ongoing business, we do not participate in transactions that generate relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities (“SPEs”), which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. As of January 27, 2013, we were not involved in any unconsolidated SPE transactions.

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CONTRACTUAL OBLIGATIONS

In general, purchase orders issued in the normal course of business can be terminated in whole or in part for any reason without liability until the product is received.

There have been no material changes in our future contractual obligations since the end of fiscal 2012 other than the normal expiration of existing contractual obligations. See Item 7 of our Annual Report on Form 10-K for the fiscal year ended October 28, 2012 for more information on contractual obligations. See Note 2 — Acquisition for more information on the material terms of our Equity Purchase Agreement. See Note 9 — Long-Term Debt to the consolidated financial statements for more information on the material terms of our Credit Agreement and Amended ABL Facility.

CRITICAL ACCOUNTING POLICIES

Critical accounting policies are those that are most important to the portrayal of our financial position and results of operations. These policies require our most subjective judgments, often employing the use of estimates about the effect of matters that are inherently uncertain. Our most critical accounting policies include those that pertain to revenue recognition, insurance accruals, share-based compensation, income taxes, accounting for acquisitions, intangible assets and goodwill, allowance for doubtful accounts, inventory valuation, property, plant and equipment valuation, contingencies and beneficial conversion features and dividend policy, which are described in Item 7 of our Annual Report on Form 10-K for the year ended October 28, 2012.

RECENT ACCOUNTING PRONOUNCEMENTS

In February 2013, the FASB issued ASU 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, which requires that companies present, either in a single note or parenthetically on the face of the financial statements, the effect of significant amounts reclassified from each component of accumulated other comprehensive income based on its source and the income statement line items affected by the reclassification. This accounting guidance is effective for our first quarter in fiscal 2014 and is only expected to impact the presentation of our consolidated financial statements and related notes.

DISCLOSURE UNDER SECTION 13(R) OF THE EXCHANGE ACT

Under Section 13(r) of the Exchange Act as added by the Iran Threat Reduction and Syrian Human Rights Act of 2012, we are required to include certain disclosures in our periodic reports if we or any of our "affiliates" (as defined in Rule 12b-2 thereunder) knowingly engage in certain activities specified in Section 13(r) during the period covered by the report. Because the SEC defines the term "affiliate" broadly, it includes any entity that controls us or is under common control with us (“control” is also construed broadly by the SEC). Our affiliate, Clayton, Dublier & Rice, LLC (“CD&R”), has informed us that an indirect subsidiary of SPIE S.A. ("SPIE"), an affiliate of CD&R based in France, maintained bank accounts during 2012 at Bank Melli, an Iranian bank designated under Executive Order No. 13382. We had no knowledge of or control over the activities of SPIE or its subsidiaries. CD&R has informed us that in 2012, an indirect subsidiary of SPIE received payments into the Bank Melli accounts for €2,497,733 from PetroIran Development Company (“PEDCO”) and €11,063 from Iran Oil Pipelines & Telecommunication Group (“IOPTC”), in partial payment of amounts that were owed to certain indirect subsidiaries of SPIE for goods and services delivered in prior years, indirectly transferred approximately €430,000 from the accounts to France through the use of an intermediary, indirectly transferred approximately €360,000 from the accounts to the U.A.E. through other intermediaries (part of which has not yet been received), and used the accounts to pay office rent, the salary of one employee and other administrative expenses. SPIE understands that PEDCO and IOPTC are companies owned or controlled by the Government of Iran. CD&R has informed us that the relevant SPIE entities received authorization from the French Ministry of the Economy, Finances and Industry for the receipt of the funds and the transfer to France, that SPIE and its subsidiaries obtained no revenue or profit from these transactions, apart from payment of the two receivables described above, that CD&R and SPIE have disclosed these matters to the Office of Foreign Assets Control in the U.S. Treasury Department (“OFAC”), and that SPIE and its subsidiaries do not intend to conduct any transaction or dealing with Bank Melli, PEDCO or IOPTC in the future other than any transactions that may be authorized by the applicable French governmental authority and OFAC.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Steel Prices

We are subject to market risk exposure related to volatility in the price of steel. For the fiscal three months ended January 27, 2013, steel constituted approximately 70% of our cost of sales. Our business is heavily dependent on the price and supply of steel. Our various products are fabricated from steel produced by mills to forms including bars, plates, structural shapes, sheets, hot-rolled coils and galvanized or Galvalume ^® -coated coils. The steel industry is highly cyclical in nature, and steel prices have been volatile in recent years and may remain volatile in the future. Steel prices are influenced by numerous factors beyond our control, including general economic conditions, domestically and internationally, the availability of raw materials, competition, labor costs, freight and transportation costs, production costs, import duties and other trade restrictions. Given the level of steel industry consolidation, the expanded capacity on the Gulf Coast and slow economic recovery, we believe steel prices will continue to be volatile.

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Although we have the ability to purchase steel from a number of suppliers, a production cutback by one or more of our current suppliers could create challenges in meeting delivery schedules to our customers. Because we have periodically adjusted our contract prices, particularly in the engineered building systems segment, we have generally been able to pass increases in our raw material costs through to our customers. The graph below shows the monthly CRU index data for the North American Steel Price Index over the historical five-year period. The CRU North American Steel Price Index has been published by the CRU Group since 1994 and we believe this index appropriately depicts the volatility we have experienced in steel prices. The index, based on a CRU survey of industry participants, is now commonly used in the settlement of physical and financial contracts in the steel industry. The prices surveyed are purchases for forward delivery, according to lead time, which will vary. For example, the January index would likely approximate our March or April steel purchase deliveries based on current lead-times. Due to current market conditions, the most recent CRU prices have been based on a lower than normal trading volume.

Source: www.crugroup.com

We normally do not maintain an inventory of steel in excess of our current production requirements. However, from time to time, we may purchase steel in advance of announced steel price increases. In addition, it is our current practice to purchase all steel consignment inventory that remains in consignment after an agreed term. Therefore, our inventory may increase if demand for our products declines. We can give no assurance that steel will remain available or that prices will not continue to be volatile.

We rely on a few major suppliers for our supply of steel and may be adversely affected by bankruptcy, change in control, financial condition or other factors affecting those suppliers. During the first three months of fiscal 2013, we purchased approximately 29% of our steel requirements from two vendors in the United States. No other vendor accounted for over 10% of our steel requirements during the first three months of fiscal 2013. Due to unfavorable market conditions and our inventory supply requirements, during the first three months of fiscal 2013, we purchased less than 10% of our steel from foreign suppliers. Limiting purchases to domestic suppliers further reduces our available steel supply base.

With steel accounting for approximately 70% of our cost of sales for the fiscal three months ended January 27, 2013, a one percent change in the cost of steel would have resulted in a pre-tax impact on cost of sales of approximately $1.7 million for the three months ended January 27, 2013, if such costs were not passed on to our customers. The impact to our financial results of operations would be significantly dependent on the competitive environment and the costs of other alternative building products, which could impact our ability to pass on these higher costs.

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Interest Rates

We are subject to market risk exposure related to changes in interest rates on our Credit Agreement and the Amended ABL Facility. These instruments bear interest at an agreed upon percentage point spread from either the prime interest rate or LIBOR. Under our Credit Agreement, we may, at our option, fix the interest rate for certain borrowings based on a spread over LIBOR for 30 days to six months. At January 27, 2013, we had $240.0 million outstanding under our Credit Agreement, before the applicable debt discount. Based on this balance, an immediate change of one percent in the interest rate would cause a change in interest expense of approximately $2.4 million on an annual basis. The fair value of our Credit Agreement at January 27, 2013 was approximately $241.2 million compared to the face value of $228.7 million, net of the unamortized discount of $11.3 million. The fair value of our Credit Agreement at October 28, 2012 was approximately $248.8 million compared to the face value of $236.9 million, net of the unamortized discount of $11.8 million.

See Note 9 — Long-Term Debt to the consolidated financial statements for more information on the material terms of our long-term debt.

Foreign Currency Exchange Rates

We are exposed to the effect of exchange rate fluctuations on the U.S. dollar value of foreign currency denominated operating revenue and expenses. The functional currency for our Mexico operations is the U.S. dollar. Adjustments resulting from the re-measurement of the local currency financial statements into the U.S. dollar functional currency, which uses a combination of current and historical exchange rates, are included in net income in the current period. Net foreign currency re-measurement gains (losses) for both the three month periods ended January 27, 2013 and January 29, 2012 was insignificant.

The functional currency for our Canada operations is the Canadian dollar. Translation adjustments resulting from translating the functional currency financial statements into U.S. dollar equivalents are reported separately in accumulated other comprehensive income in stockholders’ equity. The net foreign currency exchange gains (losses) included in net income for the three month periods ended January 27, 2013 and January 29, 2012 was $0.1 million and $(0.1) million, respectively. The net foreign currency translation adjustment, net of tax, and included in other comprehensive income (loss) for both the three month periods ended January 27, 2013 and January 29, 2012 was insignificant.

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as of January 27, 2013. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding the required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Management believes that our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives and based on the evaluation of our disclosure controls and procedures as of January 27, 2013, our chief executive officer and chief financial officer concluded that, as of such date, our disclosure controls and procedures were effective at such reasonable assurance level.

Internal Control over Financial Reporting

The SEC’s rules permit the exclusion of an assessment of the effectiveness of a registrant’s disclosure controls and procedures as they relate to its internal controls over financial reporting for an acquired business during the first year following such acquisition, if among other circumstances and factors there is not adequate time between the acquisition date and the date of assessment. As previously noted in this Form 10-Q, we completed the acquisition of Metl-Span, on June 22, 2012. Metl-Span represents approximately 27.8% of our total assets as of January 27, 2013 and 15.5% and 12.7% of revenues and net income (loss), respectively, for the three month period then ended. The Acquisition had a material impact on internal control over financial reporting. Management’s assessment and conclusion on the effectiveness of the Company’s disclosure controls and procedures as of January 27, 2013 excluded an assessment of the internal control over financial reporting of Metl-Span.

We are now in the process of integrating Metl-Span’s operations including internal controls and processes. We are in the process of extending to Metl-Span our Section 404 compliance program under the Sarbanes-Oxley Act of 2002 and the applicable rules and regulations under such Act.

35

Other than changes resulting from the Metl-Span acquisition discussed above, there have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

NCI BUILDING SYSTEMS, INC.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings.

See Part I, Item 1, “Unaudited Consolidated Financial Statements”, Note 14, which is incorporated herein by reference.

Item 1A. Risk Factors.

In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors discussed in Part 1, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended October 28, 2012. The risks disclosed in our Annual Report on Form 10-K and information provided elsewhere in this report, could materially adversely affect our business, financial condition or results of operations. Additional risks and uncertainties not currently known or we currently deem to be immaterial may materially adversely affect our business, financial condition or results of operations. We are providing the following information regarding changes that have occurred to previously disclosed risk factors from our Annual Report on Form 10-K for the year ended October 28, 2012. Except for such additional information, we believe there have been no material changes in our risk factors from those disclosed in our Annual Report on Form 10-K for the fiscal year ended October 28, 2012.

Transactions engaged in by the CD&R Funds or our directors or executives involving our Common Stock or Preferred Stock may have an adverse effect on the price of our stock.

Our officers, directors and the CD&R Funds collectively control approximately 76% of our issued and outstanding Common Stock, accounting for the CD&R Funds’ ownership of Common Stock on an as-converted basis. As of January 27, 2013 the CD&R Funds own 72.3% of the voting power and Common Stock of the Company on an as-converted basis. See Note 10 — Series B Cumulative Convertible Participating Preferred Stock to the consolidated financial statements for more information on the CD&R Equity Investment. Future sales of our shares by these stockholders could have the effect of lowering our stock price. The perceived risk associated with the possible sale of a large number of shares by these stockholders could cause some of our stockholders to sell their stock, thus causing the price of our stock to decline. In addition, actual or anticipated downward pressure on our stock price due to actual or anticipated sales of stock by our directors or officers could cause other institutions or individuals to engage in short sales of our Common Stock, which may further cause the price of our stock to decline.

From time to time our directors, executive officers, or the CD&R Funds may sell shares of our Common Stock on the open market or otherwise, for a variety of reasons, which may be related or unrelated to the performance of our business. These sales will be publicly disclosed in filings made with the SEC. Our stockholders may perceive these sales as a reflection on management's view of the business which may result in a drop in the price of our stock or cause some stockholders to sell their shares of our Common Stock.

36

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

The following table shows our purchases of our Common Stock during the first quarter of fiscal 2013:

ISSUER PURCHASES OF EQUITY SECURITIES

Period	(a) Total Number of Shares Purchased (1)		(b) Average Price Paid per Share (or Unit)		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		(d) Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs(2)
October 29, 2012 to November 25, 2012		746	$	10.54		—		129,218
November 26, 2012 to December 23, 2012		167,953	$	13.92		—		129,218
December 24, 2012 to January 27, 2013		—		—		—		129,218
Total		168,699	$	13.91		—		129,218

(1) These shares were shares of restricted stock that were withheld to satisfy minimum tax withholding obligations arising in connection with the vesting of awards of restricted stock. The required withholding is calculated using the closing sales price on the previous business day prior to the vesting date as reported by the NYSE.

(2) Our board of directors has authorized a stock repurchase program. Subject to applicable federal securities law and the Certificate of Designations of our Convertible Preferred Stock, such purchases may occur, if at all, at times and in amounts that we deem appropriate. Shares repurchased are usually retired. On February 28, 2007, we publicly announced that our board of directors authorized the repurchase of an additional 0.2 million shares of our Common Stock. There is no time limit on the duration of the program. During the first quarter of fiscal 2013, we did not repurchase any shares of Common Stock. At January 27, 2013, there were 129,218 shares of Common Stock remaining authorized for repurchase under the program.

Item 6. Exhibits.

Exhibits

Those exhibits required to be filed by Item 601 of Regulation S-K are listed in the Index to Exhibits immediately preceding the exhibits filed herewith and such listing is incorporated herein by reference.

37

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 6, 2013	By:	/s/ Mark E. Johnson
		Mark E. Johnson Executive Vice President, Chief Financial Officer and Treasurer

38

Index to Exhibits

2.1	Equity Purchase Agreement, dated as of May 2, 2012, by and among VSMA, Inc., Metl-Span LLC, NCI Group, Inc. and BlueScope Steel North America Corporation (filed as Exhibit 2.1 to NCI’s Current Report on Form 8-K dated May 8, 2012 and incorporated by reference herein)
3.1	Restated Certificate of Incorporation, as amended through September 30, 1998 (filed as Exhibit 3.1 to NCI’s Annual Report on Form 10-K for the fiscal year ended November 2, 2002 and incorporated by reference herein)
3.2	Certificate of Amendment to Restated Certificate of Incorporation, effective as of March 12, 2007 (filed as Exhibit 3.2 to NCI’s Quarterly Report on Form 10-Q for the quarter ended April 29, 2007 and incorporated by reference herein)
3.3	Certificate of Amendment to the Restated Certificate of Incorporation, effective as of March 4, 2010 (filed as Exhibit 4.3 to NCI’s registration statement on Form S-8 filed with the SEC on April 23, 2010 and incorporated by reference herein)
3.4	Third Amended and Restated By-laws, effective as of February 19, 2010 (filed as Exhibit 3.1 to NCI’s Current Report on Form 8-K dated February 24, 2010 and incorporated by reference herein)
3.5	Amendment Agreement, dated as of May 8, 2012 (filed as Exhibit 4.1 to NCI’s Current Report on Form 8-K dated May 14, 2012 and incorporated by reference herein)
3.6	Amended and Restated Certificate of Designations, preferences and rights of Series B Cumulative Convertible Participating Preferred Stock of the Company (filed as Annex B to Schedule 14C dated June 15, 2012 and incorporated by reference herein)
*31.1	Rule 13a-14(a)/15d-14(a) Certifications (Section 302 of the Sarbanes-Oxley Act of 2002)
*31.2	Rule 13a-14(a)/15d-14(a) Certifications (Section 302 of the Sarbanes-Oxley Act of 2002)
**32.1	Certifications pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code (Section 906 of the Sarbanes-Oxley Act of 2002)
**32.2	Certifications pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code (Section 906 of the Sarbanes-Oxley Act of 2002)

**101.INS	XBRL Instance Document
**101.SCH	XBRL Taxonomy Extension Schema Document
**101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
**101.DEF	XBRL Taxonomy Definition Linkbase Document
**101.LAB	XBRL Taxonomy Extension Label Linkbase Document
**101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

*	Filed herewith
**	Furnished herewith

39

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO RULE 13a-14(b)/15d-14(a)

I, Norman C. Chambers, certify that:

1. I have reviewed this quarterly report on Form 10-Q of NCI Building Systems, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 6, 2013

/s/ Norman C. Chambers

Norman C. Chambers

Chairman of the Board,

President and Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO RULE 13a-14(b)/15d-14(a)

I, Mark E. Johnson, certify that:

1. I have reviewed this quarterly report on Form 10-Q of NCI Building Systems, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 6, 2013

/s/ Mark E. Johnson

Mark E. Johnson

Executive Vice President,

Chief Financial Officer and Treasurer

(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT

In connection with the quarterly report of NCI Building Systems, Inc. (the “Company”) for the quarter ended January 27, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Norman C. Chambers, Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.	I have reviewed this Report of the Company;
2.	This Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
3.	The information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: March 6, 2013

/s/ Norman C. Chambers

Norman C. Chambers

Chairman of the Board,

President and Chief Executive Officer

(Principal Executive Officer)

A signed original of this written statement required by Section 906 has been provided to NCI Building Systems, Inc. and will be retained by NCI Building Systems, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

This Certification shall not be deemed to be “filed” or part of the Report or incorporated by reference into any of the registrant’s filings with the Securities and Exchange Commission by implication or by any reference in any such filing to the Report.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT

In connection with the quarterly report of NCI Building Systems, Inc. (the “Company”) for the quarter ended January 27, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Mark E. Johnson, Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.	I have reviewed this Report of the Company;
2.	This Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
3.	The information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: March 6, 2013

/s/ Mark E. Johnson

Mark E. Johnson

Executive Vice President,

Chief Financial Officer and Treasurer

 (Principal Financial Officer)

A signed original of this written statement required by Section 906 has been provided to NCI Building Systems, Inc. and will be retained by NCI Building Systems, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

This Certification shall not be deemed to be “filed” or part of the Report or incorporated by reference into any of the registrant’s filings with the Securities and Exchange Commission by implication or by any reference in any such filing to the Report.

XML

SHARE-BASED COMPENSATION (Details Textual) (USD $)	3 Months Ended
	Jan. 27, 2013	Jan. 29, 2012
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures	2,101	92,832
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 7.22	$ 5.12
Stock Issued During Period, Value, Restricted Stock Award, Net of Forfeitures	$ 6,300,000	$ 6,800,000
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures	442,198	663,929
Proceeds from stock options exercised	674,000	0
Proceeds and Excess Tax Benefit from Share-based Compensation	200,000
Incentive Plan [Member]
Proceeds from stock options exercised	$ 700,000

XML

BUSINESS SEGMENTS (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Jan. 27, 2013	Jan. 29, 2012	Oct. 28, 2012
Total sales	$ 297,584	$ 243,603
External sales:	297,584	243,603
Total operating income (loss)	398	4,285
Unallocated other expense	(5,850)	(3,270)
Income (loss) before income taxes	(5,452)	1,015
Total assets	706,723		751,484
Metal Coil Coating [Member]
Total sales	49,271	49,083
External sales:	19,221	20,238
Total operating income (loss)	5,542	5,302
Total assets	66,133		60,169
Metal Components [Member]
Total sales	153,904	105,752
External sales:	136,528	87,296
Total operating income (loss)	6,072	5,541
Total assets	372,552		381,028
Engineered Building Systems [Member]
Total sales	147,566	140,298
External sales:	141,835	136,069
Total operating income (loss)	4,041	7,596
Total assets	202,068		214,227
Intersegment Sales [Member]
Total sales	(53,157)	(51,530)
Corporate [Member]
Total operating income (loss)	(15,257)	(14,154)
Total assets	$ 65,970		$ 96,060

XML

FAIR VALUE OF FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Details) (Credit Agreement [Member], USD $) In Thousands, unless otherwise specified	Jan. 27, 2013		Oct. 28, 2012
Credit Agreement [Member]
Long Term Debt, Carrying Value	$ 228,715	[1]	$ 236,944	[1]
Long-term Debt, Fair Value	$ 241,200	[1]	$ 248,750	[1]

[1] Carrying amount of Credit Agreement includes an unamortized discount of $11.3 million and $11.8 million at January 27, 2013 and October 28, 2012, respectively.

XML

SERIES B CUMULATIVE CONVERTIBLE PARTICIPATING PREFERRED STOCK (Details) (USD $) In Thousands, unless otherwise specified	Jan. 27, 2013	Oct. 28, 2012
Liquidation preference	$ 339,293	$ 339,293
Accrued dividends	5,775	5,775
Aggregate liquidation preference	$ 345,068	$ 345,068

XML

ACQUISITION (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Jan. 27, 2013	Jan. 29, 2012
Sales	$ 297,584	$ 288,964
Net income (loss)	398	(528)
Net loss applicable to common shares	$ (3,627)	$ (11,156)
Earnings per share:
Basic (in dollars per share)	$ (0.19)	$ (0.60)
Diluted (in dollars per share)	$ (0.19)	$ (0.60)

XML

INVENTORIES (Tables)

3 Months Ended

Jan. 27, 2013

Inventory Disclosure [Abstract]

Schedule of Inventory, Current [Table Text Block]

The components of inventory are as follows (in thousands):

	January 27, 2013		October 28, 2012
Raw materials	$	82,825	$	77,459
Work in process and finished goods		30,945		28,556
	$	113,770	$	106,015

XML

FAIR VALUE OF FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Details 2) (USD $) In Thousands, unless otherwise specified	Jan. 27, 2013		Oct. 28, 2012
Assets, Fair Value Disclosure, Nonrecurring	$ 2,397		$ 2,397
Fair Value, Inputs, Level 1 [Member]
Assets, Fair Value Disclosure, Nonrecurring	0		0
Fair Value, Inputs, Level 2 [Member]
Assets, Fair Value Disclosure, Nonrecurring	0		0
Fair Value, Inputs, Level 3 [Member]
Assets, Fair Value Disclosure, Nonrecurring	2,397		2,397
Assets Held-For-Sale [Member]
Assets, Fair Value Disclosure, Nonrecurring	2,397	[1]	2,397	[1]
Assets Held-For-Sale [Member] | Fair Value, Inputs, Level 1 [Member]
Assets, Fair Value Disclosure, Nonrecurring	0	[1]	0	[1]
Assets Held-For-Sale [Member] | Fair Value, Inputs, Level 2 [Member]
Assets, Fair Value Disclosure, Nonrecurring	0	[1]	0	[1]
Assets Held-For-Sale [Member] | Fair Value, Inputs, Level 3 [Member]
Assets, Fair Value Disclosure, Nonrecurring	$ 2,397	[1]	$ 2,397	[1]

[1] Certain assets held for sale are valued at fair value and are measured at fair value on a nonrecurring basis. Assets held for sale are reported at fair value, if, on an individual basis, the fair value of the asset is less than cost. The fair value of assets held for sale is estimated using Level 3 inputs, such as broker quotes for like-kind assets or other market indications of a potential selling value which approximates fair value.

XML

WARRANTY (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Jan. 27, 2013	Jan. 29, 2012
Beginning balance	$ 23,236	$ 17,941
Warranties sold	646	631
Revenue recognized	(490)	(431)
Ending balance	$ 23,392	$ 18,141

XML

RESTRICTED CASH (Details Textual) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Jan. 27, 2013	Oct. 28, 2012
Restricted Cash and Cash Equivalents	$ 1.4	$ 1.4
Letters of Credit Outstanding, Amount	$ 1.4	$ 1.4
Letter Of Credit Expiration Date Description	Underlying letters of credit expire within one year of the respective balance sheet date

XML

INCOME TAXES (Details)	3 Months Ended
	Jan. 27, 2013	Jan. 29, 2012
Statutory federal income tax rate	35.00%	35.00%
State income taxes	3.70%	4.40%
Domestic production activities deduction	(2.50%)	0.00%
Canada valuation allowance	(3.30%)	0.00%
Non-deductible expenses	1.30%	1.80%
Other	(0.70%)	0.80%
Effective tax rate	33.50%	42.00%

XML

SERIES B CUMULATIVE CONVERTIBLE PARTICIPATING PREFERRED STOCK (Details Textual) (USD $)	0 Months Ended	3 Months Ended			14 Months Ended		3 Months Ended	1 Months Ended	0 Months Ended		2 Months Ended	3 Months Ended
	May 08, 2012	Jan. 27, 2013	Oct. 28, 2012	Jan. 29, 2012	Dec. 15, 2011	Jul. 29, 2012	Jan. 27, 2013 Dividend Knock Out [Member]	Oct. 20, 2009 Cd and R Fund Eight [Member]	Aug. 14, 2009 Cd and R Fund Eight [Member]	Aug. 14, 2009 Cd and R Fund [Member]	May 18, 2012 Cd and R Fund [Member]	Mar. 15, 2012 Cd and R Fund [Member]	Jan. 27, 2013 Cd and R Fund [Member]	Oct. 28, 2012 Cd and R Fund [Member]	Oct. 20, 2009 Cd and R Fund [Member]
Investment Agreement Aggregate Purchase Price									$ 250,000,000
Transaction Costs Preferred Stock										14,500,000
Deal Fee Preferred Stock										8,250,000
Initial proceeds								250,000	250,000		37,834
Convertible Preferred Stock Shares Issuable Upon Conversion		54,100,000						39,200,000
Voting Rights Percentage Attributable Upon Conversion Of Convertible Preferred Stock								68.40%
Voting Percentage													72.30%	72.70%
Preferred Stock Dividend Accrual Percentage											10.00%
Accrued Dividends On Preferred Stock Issued											6,500,000
Incremental Dividend Payment Percentage On Default		0 to 6 percent
Aggregate Value Of Preference Stock and Liquidation Preference and Accrued Dividend Issued											345,000,000		0
Preferred Stock, Value, Outstanding	290,300,000	619,950,000	619,950,000			619,950,000
Closing Price Per Share															$ 12.55
Beneficial Conversion Feature Intrinsic Value															241,400,000
Preferred Stock Accreted Value											313,700,000
Adjustments to Additional Paid in Capital, Increase in Carrying Amount of Redeemable Preferred Stock	222,900,000
Increase In Accumulated Deficit, Fair Value Preferred Stock Increased	106,700,000
Debt Instrument, Convertible, Beneficial Conversion Feature	282,100,000			4,000,000
Convertible Preferred Stock Issuance Cost	48,800,000
Liquidation preference		339,293,000	339,293,000								31,400,000
Stockholders' Equity, Reverse Stock Split		The initial conversion price of the Convertible Preferred Stock was equal to $6.3740.
Incremental Common Shares Attributable to Conversion of Preferred Stock		54,100,000	54,100,000
Increase Decrease In Fair Value Of Preferred Stock	620,000,000
Dividends, Convertible Preferred Stock, Stock					5,833,491							8,924,762
Preferred Stock, Shares Outstanding		339,293	339,293
Temporary Equity, Accretion of Dividends				700,000
Dividends				$ 5,900,000
Dividend Payment Restrictions Schedule, Description							The dividend "knock-out" provision provided that if, at any time after the 30-month anniversary of the Closing Date of October 20, 2009 (i.e., March 20, 2012), the trading price of the Common Stock exceeds $12.75, which is 200% of the initial conversion price of the Convertible Preferred Stock ($6.374), for each of 20 consecutive trading days, the dividend rate (excluding any applicable adjustments as a result of a default) will become 0.00%.

XML

BASIS OF PRESENTATION

3 Months Ended

Jan. 27, 2013

Organization, Consolidation and Presentation Of Financial Statements [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

NOTE 1 — BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements for NCI Building Systems, Inc. (together with its subsidiaries, unless otherwise indicated, the “Company,” “NCI,” “we,” “us,” or “our”) 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 and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, the unaudited consolidated financial statements included herein contain all adjustments necessary to fairly present our financial position, results of operations and cash flows for the periods indicated. Such adjustments are of a normal, recurring nature. Operating results for the fiscal three month period ended January 27, 2013 are not necessarily indicative of the results that may be expected for the fiscal year ending November 3, 2013. Our sales and earnings are subject to both seasonal and cyclical trends and are influenced by general economic conditions, interest rates, the price of steel relative to other building materials, the level of nonresidential construction activity, roof repair and retrofit demand and the availability and cost of financing for construction projects.

We use a four-four-five week calendar each quarter with our year end being on the Sunday closest to October 31. The year end for fiscal 2013 is November 3, 2013.

Certain reclassifications of acquisition-related costs have been made to prior period amounts to conform to the current presentation. The net effect of these reclassifications was not material to our consolidated financial statements.

For further information, refer to the consolidated financial statements and footnotes thereto included in our Annual Report on Form 10-K for the fiscal year ended October 28, 2012 filed with the Securities and Exchange Commission (the “SEC”) on December 24, 2012.

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WARRANTY (Details Textual) (USD $)					3 Months Ended				3 Months Ended
	Jan. 27, 2013	Oct. 28, 2012	Jan. 29, 2012	Oct. 29, 2011	Jan. 27, 2013 Minimum [Member]	Jan. 27, 2013 Maximum [Member]	Jan. 27, 2013 Metl Span [Member]	Oct. 28, 2012 Metl Span [Member]	Jan. 27, 2013 Metl Span [Member] Minimum [Member]	Jan. 27, 2013 Metl Span [Member] Maximum [Member]	Jan. 27, 2013 Rcc [Member]	Oct. 28, 2012 Rcc [Member]
Product Warranty Range					2 years	20 years			5 years	20 years
Accrued warranty obligation and deferred warranty revenue	$ 23,392,000	$ 23,236,000	$ 18,141,000	$ 17,941,000							$ 3,000,000	$ 3,000,000
Business Acquisition, Purchase Price Allocation, Warranty Liability							$ 3,700,000	$ 3,700,000

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SERIES B CUMULATIVE CONVERTIBLE PARTICIPATING PREFERRED STOCK (Tables)

3 Months Ended

Jan. 27, 2013

Temporary Equity Disclosure [Abstract]

Schedule Of Liquidation Preference Accretion Dividend [Table Text Block]

The Company’s aggregate liquidation preference plus accrued dividends of the Convertible Preferred Stock at January 27, 2013 and October 28, 2012 are as follows (in thousands):

	January 27, 2013		October 28, 2012
Liquidation preference	$	339,293	$	339,293
Accrued dividends		5,775		5,775
Aggregate liquidation preference	$	345,068	$	345,068

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LONG-TERM DEBT (Tables)

3 Months Ended

Jan. 27, 2013

Long-Term Debt and Notes Payable [Abstract]

Schedule of Debt [Table Text Block]

Debt is comprised of the following (in thousands):

	January 27, 2013			October 28, 2012
Credit Agreement, due May 2018 (variable interest, at 8.0% on January 27, 2013 and October 28, 2012)	$	240,000		$	248,750
Unamortized discount, net		(11,285	)		(11,806	)
Current portion of long-term debt		(2,500	)		(2,500	)
Total long-term debt, less current portion	$	226,215		$	234,444

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LONG-TERM DEBT (Details) (USD $) In Thousands, unless otherwise specified	Jan. 27, 2013	Oct. 28, 2012	Jun. 22, 2012
Credit Agreement, due May 2018 (variable interest, at 8.0% on January 27, 2013 and October 28, 2012)	$ 240,000	$ 248,750
Unamortized discount, net	(11,285)	(11,806)	(12,500)
Current portion of long-term debt	(2,500)	(2,500)
Total long-term debt, less current portion	$ 226,215	$ 234,444

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FAIR VALUE OF FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

Jan. 27, 2013

Fair Value Of Financial Instruments and Fair Value Measurements [Abstract]

Fair Value, by Balance Sheet Grouping [Table Text Block]

The fair values of the remaining financial instruments not currently recognized at fair value on our Consolidated Balance Sheets at the respective fiscal period ends were (in thousands):

	January 27, 2013				October 28, 2012
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Credit Agreement (1)	$	228,715	$	241,200	$	236,944	$	248,750

(1) Carrying amount of Credit Agreement includes an unamortized discount of $11.3 million and $11.8 million at January 27, 2013 and October 28, 2012, respectively.

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

The following table summarizes information regarding our financial assets and liabilities that are measured at fair value on a recurring basis as of January 27, 2013, segregated by level of the valuation inputs within the fair value hierarchy utilized to measure fair value (in thousands):

	Level 1		Level 2			Level 3		Total
Assets:
Short-term investments in deferred compensation plan(1):
Money market	$	273	$	—		$	—	$	273
Mutual funds — Growth		638		—			—		638
Mutual funds — Blend		1,992		—			—		1,992
Mutual funds — Foreign blend		646		—			—		646
Mutual funds — Fixed income		—		569			—		569
Total short-term investments in deferred compensation plan		3,549		569			—		4,118
Total assets	$	3,549	$	569		$	—	$	4,118
Liabilities:
Deferred compensation plan liability	$	—	$	(4,615	)	$	—	$	(4,615	)
Total liabilities	$	—	$	(4,615	)	$	—	$	(4,615	)

(1) Unrealized holding gains (losses) for the three months ended January 27, 2013 was $0.2 million and for the three months ended January 29, 2012 was insignificant. These unrealized holding gains (losses) are primarily offset by changes in the deferred compensation plan liability.

The following table summarizes information regarding our financial assets and liabilities that are measured at fair value on a recurring basis as of October 28, 2012, segregated by level of the valuation inputs within the fair value hierarchy utilized to measure fair value (in thousands):

	Level 1		Level 2			Level 3		Total
Assets:
Short-term investments in deferred compensation plan(1):
Money market	$	320	$	—		$	—	$	320
Mutual funds — Growth		594		—			—		594
Mutual funds — Blend		1,918		—			—		1,918
Mutual funds — Foreign blend		669		—			—		669
Mutual funds — Fixed income		—		575			—		575
Total short-term investments in deferred compensation plan	$	3,501	$	575		$	—	$	4,076
Total assets	$	3,501	$	575		$	—	$	4,076
Liabilities:
Deferred compensation plan liability	$	—	$	(4,146	)	$	—	$	(4,146	)
Total liabilities	$	—	$	(4,146	)	$	—	$	(4,146	)

Fair Value Measurements, Nonrecurring [Table Text Block]

The following table summarizes information regarding our financial assets that are measured at fair value on a nonrecurring basis as of January 27, 2013, segregated by level of the valuation inputs within the fair value hierarchy utilized to measure fair value (in thousands):

	Level 1		Level 2		Level 3		Total
Assets:
Assets held for sale (1)	$	—	$	—	$	2,397	$	2,397
Total assets	$	—	$	—	$	2,397	$	2,397

(1) Certain assets held for sale are valued at fair value and are measured at fair value on a nonrecurring basis. Assets held for sale are reported at fair value, if, on an individual basis, the fair value of the asset is less than cost. The fair value of assets held for sale is estimated using Level 3 inputs, such as broker quotes for like-kind assets or other market indications of a potential selling value which approximates fair value.

The following table summarizes information regarding our financial assets that are measured at fair value on a nonrecurring basis as of October 28, 2012, segregated by level of the valuation inputs within the fair value hierarchy utilized to measure fair value (in thousands):

	Level 1		Level 2		Level 3		Total
Assets:
Assets held for sale(1)	$	—	$	—	$	2,397	$	2,397
Total assets	$	—	$	—	$	2,397	$	2,397

(1) Certain assets held for sale are valued at fair value and are measured at fair value on a nonrecurring basis. Assets held for sale are reported at fair value, if, on an individual basis, the fair value of the asset is less than cost. The fair value of assets held for sale is estimated using Level 3 inputs, such as broker quotes for like-kind assets or other market indications of a potential selling value which approximates fair value.

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INCOME TAXES (Tables)

3 Months Ended

Jan. 27, 2013

Income Taxes [Abstract]

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

The reconciliation of income tax computed at the statutory tax rate to the effective income tax rate is as follows:

	Fiscal Three Months Ended
	January 27, 2013			January 29, 2012
Statutory federal income tax rate		35.0	%		35.0	%
State income taxes		3.7			4.4
Domestic production activities deduction		(2.5	)		—
Canada valuation allowance		(3.3	)		—
Non-deductible expenses		1.3			1.8
Other		(0.7	)		0.8
Effective tax rate		33.5	%		42.0	%

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Jan. 27, 2013	Jan. 29, 2012
Cash flows from operating activities:
Net income (loss)	$ (3,627)	$ 589
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization	10,206	7,371
Share-based compensation expense	3,442	1,972
Loss on sale of property, plant and equipment	0	2
Provision for doubtful accounts	1,305	(6)
Provision (benefit) from deferred income taxes	(1,990)	292
Changes in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable	23,217	15,204
Inventories	(7,755)	(13,524)
Income tax receivable	(415)	174
Prepaid expenses and other	(615)	591
Accounts payable	(28,969)	(8,836)
Accrued expenses	(7,181)	(7,987)
Other, net	(790)	(47)
Net cash used in operating activities	(13,172)	(4,205)
Cash flows from investing activities:
Capital expenditures	(6,071)	(5,770)
Proceeds from sale of property, plant and equipment	0	25
Net cash used in investing activities	(6,071)	(5,745)
Cash flows from financing activities:
Proceeds from stock options exercised	674	0
Increase in restricted cash	(1)	(1)
Proceeds from Amended ABL Facility	5,001	0
Payments on Amended ABL Facility	(5,000)	0
Payments on term loan	(8,750)	(500)
Payments on note payable	(515)	(292)
Payment of financing costs	(68)	(25)
Excess tax benefits from share-based compensation arrangements	941	0
Purchase of treasury stock	(2,346)	(1,503)
Net cash used in financing activities	(10,064)	(2,321)
Effect of exchange rate changes on cash and cash equivalents	(24)	(5)
Net decrease in cash and cash equivalents	(29,331)	(12,276)
Cash and cash equivalents at beginning of period	55,158	78,982
Cash and cash equivalents at end of period	$ 25,827	$ 66,706

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BUSINESS SEGMENTS (Tables)

3 Months Ended

Jan. 27, 2013

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment [Table Text Block]

The following table represents sales, operating income and total assets attributable to these operating segments for the periods indicated (in thousands):

	Fiscal Three Months Ended
	January 27, 2013			January 29, 2012
Total sales:
Metal coil coating	$	49,271		$	49,083
Metal components		153,904			105,752
Engineered building systems		147,566			140,298
Intersegment sales		(53,157	)		(51,530	)
Total sales	$	297,584		$	243,603
External sales:
Metal coil coating	$	19,221		$	20,238
Metal components		136,528			87,296
Engineered building systems		141,835			136,069
Total sales	$	297,584		$	243,603
Operating income (loss):
Metal coil coating	$	5,542		$	5,302
Metal components		6,072			5,541
Engineered building systems		4,041			7,596
Corporate		(15,257	)		(14,154	)
Total operating income (loss)	$	398		$	4,285
Unallocated other expense		(5,850	)		(3,270	)
Income (loss) before income taxes	$	(5,452	)	$	1,015

	January 27, 2013		October 28, 2012
Total assets:
Metal coil coating	$	66,133	$	60,169
Metal components		372,552		381,028
Engineered building systems		202,068		214,227
Corporate		65,970		96,060
Total assets	$	706,723	$	751,484

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LOSS PER COMMON SHARE (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Jan. 27, 2013		Jan. 29, 2012
Numerator for Basic and Diluted Loss Per Common Share
Net loss allocated to common shares (1)	$ (3,627)	[1]	$ (10,039)	[1]
Denominator for Basic and Diluted Loss Per Common Share
Weighted average common shares outstanding for basic and diluted loss per share	19,237		18,693
Basic and Diluted loss per common share	$ (0.19)		$ (0.54)

[1] Participating securities consist of the holders of the Convertible Preferred Stock, as defined below, and the unvested restricted Common Stock related to our Incentive Plan. These participating securities do not have a contractual obligation to share in losses; therefore, no losses were allocated in any periods presented above. These participating securities will be allocated earnings when applicable.

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INCOME TAXES (Details Textual) (USD $) In Millions, unless otherwise specified	Jan. 29, 2013	Oct. 28, 2012
Unrecognized Tax Benefits that Would Impact Effective Tax Rate	$ 0.3	$ 0.3

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CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Jan. 27, 2013	Oct. 28, 2012
ASSETS
Cash and cash equivalents	$ 25,827	$ 55,158
Restricted cash	1,376	1,375
Accounts receivable, net	108,953	133,475
Inventories, net	113,770	106,015
Deferred income taxes	25,941	21,926
Income tax receivable	964	549
Investments in debt and equity securities, at market	4,118	4,076
Prepaid expenses and other	17,189	16,864
Assets held for sale	2,397	2,397
Total current assets	300,535	341,835
Property, plant and equipment, net	266,812	268,875
Goodwill	76,856	76,746
Intangible assets, net	52,015	53,028
Other assets, net	10,505	11,000
Total assets	706,723	751,484
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current portion of long-term debt	2,500	2,500
Note payable	0	515
Accounts payable	84,208	113,177
Accrued compensation and benefits	37,571	43,066
Accrued interest	3,535	345
Other accrued expenses	55,620	60,455
Total current liabilities	183,434	220,058
Long-term debt, net	226,215	234,444
Deferred income taxes	36,579	35,565
Other long-term liabilities	12,013	11,995
Total long-term liabilities	274,807	282,004
Series B cumulative convertible participating preferred stock	619,950	619,950
Stockholders' deficit:
Common stock, $.01 par value, 100,000,000 shares authorized; 20,691,829 and 20,357,183 shares issued at January 27, 2013 and October 28, 2012, respectively; 20,691,829 and 20,354,217 shares outstanding at January 27, 2013 and October 28, 2012, respectively	925	925
Additional paid-in capital	7,676	4,991
Accumulated deficit	(373,477)	(369,850)
Accumulated other comprehensive loss	(6,592)	(6,568)
Treasury stock, at cost (2,966 shares at October 28, 2012)	0	(26)
Total stockholders' deficit	(371,468)	(370,528)
Total liabilities and stockholders' deficit	$ 706,723	$ 751,484

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LONG-TERM DEBT (Details Textual) (USD $)	1 Months Ended	3 Months Ended
	Jun. 22, 2012	Jan. 27, 2013	Oct. 28, 2012
Term Loan Principal Amount	$ 250,000,000
Term Loan Issuance Percentage Under Credit Agreement	95.00%
Unamortized discount, net	12,500,000	11,285,000	11,806,000
Line of Credit Facility, Expiration Date	May 02, 2018
Prepayments Description In Connection With Repricing Transactions		Prepayments in connection with a repricing transaction (as defined in the Credit Agreement) during the first two years after the closing of the Credit Agreement will be subject to a prepayment premium equal to 2% of the principal amount of the term loans so prepaid during the first year after the closing of the Credit Agreement and 1% of the principal amount of the term loans so prepaid during the second year after the closing of the Credit Agreement. Prepayments may otherwise be made without premium or penalty (other than customary breakage costs). Subject to certain exceptions, the term loans under the Credit Agreement will be subject to mandatory prepayment in an amount equal to: · the net cash proceeds of (1) certain asset sales, (2) certain debt offerings, and (3) certain insurance recovery and condemnation events; and · 75% of annual excess cash flow (as defined in the Credit Agreement) for any fiscal year ending on or after November 3, 2013, subject to reduction to 50%, 25% or 0% if specified leverage ratio targets are met.
Debt Instrument, Covenant Description		The consolidated total net debt to EBITDA leverage ratio must be no more than 3.75:1.00 each quarter.
Decrease In Leverage Ratio Against Debt Instrument Covenant, Description		The ratio steps down by 0.5 to 3.25:1.00 beginning with the quarter ending November 3, 2013. This ratio steps down by another 0.5 to 2.75:1.00 beginning with the quarter ending November 2, 2014.
Consolidated Total Net Debt To Ebitda Leverage Ratio		2.46:1.00	2.23:1.00
Debt Extinguishment Cost Related To Credit Agreement			5,100,000
Line of Credit Facility, Interest Rate Description		Loans under the Amended ABL Facility bear interest, at our option, as follows: (1) Base Rate loans at the Base Rate plus a margin. The margin ranges from 1.50% to 2.00% depending on the quarterly average excess availability under such facility, and (2) LIBOR loans at LIBOR plus a margin. The margin ranges from 2.50% to 3.00% depending on the quarterly average excess availability under such facility.
Line Of Credit Facility Interest Rate Description Under Default Event		At both January 27, 2013 and October 28, 2012, the interest rate on our Amended ABL Facility was 4.75%. During an event of default, loans under the Amended ABL Facility will bear interest at a rate that is 2% higher than the rate otherwise applicable. "Base Rate" is defined as the higher of the Wells Fargo Bank, N.A. prime rate and the overnight Federal Funds rate plus 0.5% and "LIBOR" is defined as the applicable London Interbank Offered Rate adjusted for reserves.
Notes Payable		0	500,000
Unamortized Deferred Financing Cost		10,500,000	11,000,000
Letter Of Credit [Member]
Line of Credit Facility, Amount Outstanding		8,500,000	8,500,000
Abl Facility [Member]
Line of Credit Facility, Expiration Date		May 02, 2017
Line of Credit Facility, Amount Outstanding		150,000,000
Line of Credit Facility, Remaining Borrowing Capacity		97,700,000	111,100,000
Line Of Credit Facility Minimum Borrowing Capacity		15,000,000	15,000,000
Line Of Credit Facility Fixed Charge Coverage Ratio		3.07:1.00	4.09:1.00
Increase In Letter Of Credit		30,000,000
Deferred Financing Costs Non Cash Charges		$ 1,300,000

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) [Parenthetical] (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Jan. 27, 2013	Jan. 29, 2012
Foreign exchange translation loss and other	$ 0	$ 0
Loss in fair value of foreign currency derivative		$ 56

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ACQUISITION (Details 2) (USD $) In Thousands, unless otherwise specified	1 Months Ended
	Jun. 22, 2012
Intangible assets	$ 32,760
Supplier Relationship [Member]
Intangible assets	150
Finite-Lived Intangible Asset, Useful Life	3 years
Order Or Production Backlog [Member]
Intangible assets	1,410
Finite-Lived Intangible Asset, Useful Life	3 months
Customer Relationships [Member] | Customer Lists [Member]
Intangible assets	21,600
Finite-Lived Intangible Asset, Useful Life	12 years
Trade Names [Member]
Intangible assets	$ 9,600
Finite-Lived Intangible Asset, Useful Life	15 years

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CONTINGENCIES

3 Months Ended

Jan. 27, 2013

Contingencies [Abstract]

CONTINGENCIES [Text Block]

NOTE 14 — CONTINGENCIES

As a manufacturer of products primarily for use in nonresidential building construction, we are inherently exposed to various types of contingent claims, both asserted and unasserted, in the ordinary course of business. As a result, from time to time, we and/or our subsidiaries become involved in various legal proceedings or other contingent matters arising from claims, or potential claims. We insure against these risks to the extent deemed prudent by our management and to the extent insurance is available. Many of these insurance policies contain deductibles or self-insured retentions in amounts we deem prudent and for which we are responsible for payment. In determining the amount of self-insurance, it is our policy to self-insure those losses that are predictable, measurable and recurring in nature, such as claims for automobile liability and general liability. The Company regularly reviews the status of on-going proceedings and other contingent matters along with legal counsel. Liabilities for such items are recorded when it is probable that the liability has been incurred and when the amount of the liability can be reasonably estimated. Liabilities are adjusted when additional information becomes available. Management believes that the ultimate disposition of these matters will not have a material adverse effect on the Company’s results of operations, financial position or cash flows. However, such matters are subject to many uncertainties and outcomes are not predictable with assurance.

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ACQUISITION (Details Textual) (USD $)	1 Months Ended	3 Months Ended
	Jun. 22, 2012	Jan. 27, 2013	Jan. 29, 2012	Oct. 28, 2012
Business Acquisition, Effective Date of Acquisition	Jun. 22, 2012
Business Acquisition, Date of Acquisition Agreement	May 02, 2012
Business Acquisition, Name of Acquired Entity	Metl-Span LLC
Business Acquisition, Cost of Acquired Entity, Cash Paid	$ 4,700,000
Goodwill	71,700,000	76,856,000		76,746,000
Revenues		46,100,000
Operating income (loss)		398,000	4,285,000
Acquisition Costs, Period Cost			400,000
Metl Span [Member]
Business Acquisition, Cost of Acquired Entity, Cash Paid	$ 145,700,000

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ACQUISITION (Tables)

3 Months Ended

Jan. 27, 2013

Acquisition [Abstract]

Business Acquisition, Pro Forma Information [Table Text Block]

	Unaudited Pro Forma Fiscal Three Months Ended
(In thousands, except per share amounts)	January 27, 2013			January 29, 2012
Sales	$	297,584		$	288,964
Net income (loss)	$	398		$	(528	)
Net loss applicable to common shares	$	(3,627	)	$	(11,156	)
Earnings per share:
Basic	$	(0.19	)	$	(0.60	)
Diluted	$	(0.19	)	$	(0.60	)

Schedule of Purchase Price Allocation [Table Text Block]

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as part of the Acquisition. The fair value of certain assets acquired and liabilities assumed are preliminary and the final determination of any required purchase accounting adjustments will be made upon the finalization of the post-closing adjustment in the Equity Purchase Agreement and finalization of certain contingent assets and liabilities. We are currently completing our plans to functionally integrate the newly acquired operations into our existing operations. Additionally, as these plans are finalized, we may identify integration charges that are required to be recognized.

(In thousands)	June 22, 2012
Current assets	$	35,233
Current deferred income taxes		2,182
Property, plant and equipment		57,572
Intangible assets		32,760
Assets acquired	$	127,747
Current liabilities	$	24,924
Deferred income taxes		27,404
Lease liability		1,392
Liabilities assumed	$	53,720
Fair value of net assets acquired	$	74,027
Total consideration paid		145,682
Goodwill	$	71,655

Schedule Of Business Acquisition Purchase Price Allocation To Intangible Assets [Table Text Block]

The amount allocated to intangible assets was attributed to the following categories (in thousands):

			Lives
Trade names	$	9,600		15 years
Backlog		1,410		3 months
Supplier relationships		150		3 years
Customer lists and relationships		21,600		12 years
	$	32,760

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CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT (USD $) In Thousands, except Share data	Common Stock [Member]	Additional Paid-In Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Treasury Stock [Member]	Total
Balance at Oct. 28, 2012	$ 925	$ 4,991	$ (369,850)	$ (6,568)	$ (26)	$ (370,528)
Balance (in shares) at Oct. 28, 2012	20,357,183				(2,966)
Treasury stock purchases	0	(17)	0	0	(2,329)	(2,346)
Treasury stock purchases (in shares)	0				(167,521)
Retirement of treasury shares	0	(2,355)	0	0	2,355	0
Retirement of treasury shares (in shares)	(170,487)				170,487
Issuance of restricted stock	0	0	0	0	0	0
Issuance of restricted stock (in shares)	428,991				0
Shares issued for stock options	0	674	0	0	0	674
Shares issued for stock options (in shares)	76,142
Tax adjustments for equity-based awards	0	941	0	0	0	941
Foreign exchange translation gain (loss) and other	0	0	0	(24)	0	(24)
Share-based compensation	0	3,442	0	0	0	3,442
Net loss	0	0	(3,627)	0	0	(3,627)
Balance at Jan. 27, 2013	$ 925	$ 7,676	$ (373,477)	$ (6,592)	$ 0	$ (371,468)
Balance (in shares) at Jan. 27, 2013	20,691,829				0

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CONSOLIDATED BALANCE SHEETS [Parenthetical] (USD $)	Jan. 27, 2013	Oct. 28, 2012
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	20,691,829	20,357,183
Common stock, shares outstanding	20,691,829	20,354,217
Treasury stock, shares		2,966

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LONG-TERM DEBT

3 Months Ended

Jan. 27, 2013

Long-Term Debt and Notes Payable [Abstract]

LONG-TERM DEBT AND NOTE PAYABLE [Text Block]

NOTE 9 — LONG-TERM DEBT

Debt is comprised of the following (in thousands):

	January 27, 2013			October 28, 2012
Credit Agreement, due May 2018 (variable interest, at 8.0% on January 27, 2013 and October 28, 2012)	$	240,000		$	248,750
Unamortized discount, net		(11,285	)		(11,806	)
Current portion of long-term debt		(2,500	)		(2,500	)
Total long-term debt, less current portion	$	226,215		$	234,444

Credit Agreement

On June 22, 2012, in connection with the Acquisition, the Company entered into a Credit Agreement (the “Credit Agreement”) among the Company, as Borrower, Credit Suisse AG, Cayman Islands Branch, as Administrative Agent and Collateral Agent (the “Term Agent”), and the lenders party thereto. The Credit Agreement provides for a term loan credit facility in an aggregate principal amount of $250.0 million. Proceeds from borrowings under the Credit Agreement were used, together with cash on hand, (i) to finance the Acquisition, (ii) to extinguish the existing amended and restated credit agreement, due April 2014 (the “Refinancing”), and (iii) to pay fees and expenses incurred in connection with the Acquisition and the Refinancing.

The term loan under the Credit Agreement will mature on May 2, 2018 and, prior to such date, will amortize in nominal quarterly installments equal to one percent of the aggregate initial principal amount thereof per annum. The Credit Agreement was issued at 95% of face value, which resulted in a note discount of $12.5 million. The note discount will be amortized over the life of the loan through May 2, 2018 using the effective interest method.

The term loan under the Credit Agreement will be prepayable at the Company’s option at any time. Prepayments in connection with a repricing transaction (as defined in the Credit Agreement) during the first two years after the closing of the Credit Agreement will be subject to a prepayment premium equal to 2% of the principal amount of the term loan so prepaid during the first year after the closing of the Credit Agreement and 1% of the principal amount of the term loan so prepaid during the second year after the closing of the Credit Agreement. Prepayments may otherwise be made without premium or penalty (other than customary breakage costs).

Subject to certain exceptions, the term loan under the Credit Agreement will be subject to mandatory prepayment in an amount equal to:

• the net cash proceeds of (1) certain asset sales, (2) certain debt offerings, and (3) certain insurance recovery and condemnation events; and

• 75% of annual excess cash flow (as defined in the Credit Agreement) for any fiscal year ending on or after November 3, 2013, subject to reduction to 50%, 25% or 0% if specified leverage ratio targets are met.

At the Company’s election, the interest rates applicable to the term loan under the Credit Agreement will be based on a fluctuating rate of interest measured by reference to either (1) an adjusted London Interbank Offered Rate, or “LIBOR,” or (2) an alternate base rate, in each case, plus a borrowing margin. Overdue amounts will bear interest at a rate that is 2% higher than the rate otherwise applicable.

The Credit Agreement contains a number of covenants that, among other things, will limit or restrict the ability of the Company and its subsidiaries to dispose of assets, incur additional indebtedness, make dividends and other restricted payments, create liens securing indebtedness, engage in mergers and other fundamental transactions, enter into restrictive agreements, amend certain documents in respect of other indebtedness, change the nature of their business and engage in certain transactions with affiliates.

In addition, under the Credit Agreement the Company will be subject to a financial covenant that requires the Company to maintain a specified consolidated total net debt to EBITDA leverage ratio for specified periods. The consolidated total net debt to EBITDA leverage ratio must be no more than 3.75:1.00 each quarter. The ratio steps down by 0.5 to 3.25:1.00 beginning with the quarter ending November 3, 2013. This ratio steps down by another 0.5 to 2.75:1.00 beginning with the quarter ending November 2, 2014. Our consolidated total net debt to EBITDA leverage ratio as of January 27, 2013 and October 28, 2012 was 2.46:1.00 and 2.23:1.00, respectively.

During our third quarter of fiscal 2012, we recognized a non-cash debt extinguishment charge of $5.1 million, related to the deferred financing costs of the amended and restated credit agreement, due April 2014.

ABL Facility

On May 2, 2012, we entered into the Amended ABL Facility to (i) permit the Acquisition, the entry by the Company into the Credit Agreement and the incurrence of debt thereunder and the repayment of existing indebtedness under NCI’s existing term loan, (ii) increase the amount available for borrowing thereunder to $150 million (subject to a borrowing base), (iii) increase the amount available for letters of credit thereunder to $30 million, and (iv) extend the final maturity thereunder to May 2, 2017.

As a result of the ABL Facility Amendment, in our third quarter of fiscal 2012, we recognized a non-cash charge of $1.3 million, related to the deferred financing costs.

Borrowing availability under the Amended ABL Facility is determined by a monthly borrowing base collateral calculation that is based on specified percentages of the value of qualified cash, eligible inventory and eligible accounts receivable, less certain reserves and subject to certain other adjustments. At January 27, 2013 and October 28, 2012, our excess availability under the Amended ABL Facility was $97.7 million and $111.1 million, respectively. Under the Amended ABL Facility, there were no amounts of borrowings outstanding as of January 27, 2013 and October 28, 2012. In addition, at both January 27, 2013 and October 28, 2012, standby letters of credit totaling approximately $8.5 million were outstanding but undrawn under the Amended ABL Facility related to certain insurance policies.

The Amended ABL Facility contains a number of covenants that, among other things, limit or restrict our ability to dispose of assets, incur additional indebtedness, incur guarantee obligations, engage in sale and leaseback transactions, prepay other indebtedness, modify organizational documents and certain other agreements, create restrictions affecting subsidiaries, make dividends and other restricted payments, create liens, make investments, make acquisitions, engage in mergers, change the nature of our business and engage in certain transactions with affiliates.

The Amended ABL Facility includes a minimum fixed charge coverage ratio of one to one, which will apply if we fail to maintain at least $15 million of minimum borrowing capacity. The minimum level of borrowing capacity as of both January 27, 2013 and October 28, 2012 was $15.0 million. Although our Amended ABL Facility did not require any financial covenant compliance, at January 27, 2013 and October 28, 2012, our fixed charge coverage ratio as of those dates, which is calculated on a trailing twelve month basis, was 3.07:1.00 and 4.09:1.00, respectively.

Loans under the Amended ABL Facility bear interest, at our option, as follows: 

(1) Base Rate loans at the Base Rate plus a margin. The margin ranges from 1.50% to 2.00% depending on the quarterly average excess availability under such facility, and

(2) LIBOR loans at LIBOR plus a margin. The margin ranges from 2.50% to 3.00% depending on the quarterly average excess availability under such facility.

At both January 27, 2013 and October 28, 2012, the interest rate on our Amended ABL Facility was 4.75%. During an event of default, loans under the Amended ABL Facility will bear interest at a rate that is 2% higher than the rate otherwise applicable. “Base Rate” is defined as the higher of the Wells Fargo Bank, N.A. prime rate and the overnight Federal Funds rate plus 0.5% and “LIBOR” is defined as the applicable London Interbank Offered Rate adjusted for reserves.

Deferred Financing Costs

At January 27, 2013 and October 28, 2012, the unamortized balance in deferred financing costs was $10.5 million and $11.0 million, respectively.

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DOCUMENT AND ENTITY INFORMATION	3 Months Ended
	Jan. 27, 2013	Mar. 01, 2013
Entity Registrant Name	NCI BUILDING SYSTEMS INC
Entity Central Index Key	0000883902
Current Fiscal Year End Date	--11-03
Entity Filer Category	Accelerated Filer
Trading Symbol	ncs
Entity Common Stock, Shares Outstanding		20,699,203
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jan. 27, 2013
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2013

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SERIES B CUMULATIVE CONVERTIBLE PARTICIPATING PREFERRED STOCK

3 Months Ended

Jan. 27, 2013

Temporary Equity Disclosure [Abstract]

SERIES B CUMULATIVE CONVERTIBLE PARTICIPATING PREFERRED STOCK [Text Block]

NOTE 10 — SERIES B CUMULATIVE CONVERTIBLE PARTICIPATING PREFERRED STOCK

The CD&R Equity Investment

On August 14, 2009, the Company entered into an Investment Agreement (as amended, the “Investment Agreement”), by and between the Company and Clayton, Dubilier & Rice Fund VIII, L.P. (“CD&R Fund VIII”), pursuant to which the Company agreed to issue and sell to CD&R Fund VIII, and CD&R Fund VIII agreed to purchase from the Company, for an aggregate purchase price of $250 million (less reimbursement to CD&R Fund VIII or direct payment to its service providers of up to $14.5 million in the aggregate of transaction expenses and a deal fee, paid to Clayton, Dubilier & Rice, Inc., the manager of CD&R Fund VIII, of $8.25 million), 250,000 shares of Convertible Preferred Stock. Pursuant to the Investment Agreement, on October 20, 2009 (the “Closing Date”), the Company issued and sold to CD&R Fund VIII and CD&R Friends & Family Fund VIII, L.P. (the “CD&R Funds”), and the CD&R Funds purchased from the Company, an aggregate of 250,000 Preferred Shares, representing approximately 39.2 million shares of Common Stock or 68.4% of the voting power and Common Stock of the Company on an as-converted basis as of the Closing Date (such purchase and sale, the “CD&R Equity Investment”). At January 27, 2013 and October 28, 2012, the CD&R Funds own 72.3% and 72.7%, respectively, of the voting power and Common Stock of the Company on an as-converted basis.

Under the terms of the Certificate of Designations of the Convertible Preferred Stock (the “Certificate of Designations”), we were contractually obligated to pay quarterly dividends to the holders of the Preferred Shares from October 20, 2009, through October 20, 2019, subject to certain dividend “knock-out” provisions. The dividend “knock-out” provision provided that if, at any time after the 30-month anniversary of the Closing Date of October 20, 2009 (i.e., March 20, 2012), the trading price of the Common Stock exceeds $12.75, which is 200% of the initial conversion price of the Convertible Preferred Stock ($6.374), for each of 20 consecutive trading days, the dividend rate (excluding any applicable adjustments as a result of a default) will become 0.00%.

On May 8, 2012, we entered into an Amendment Agreement (the “Amendment Agreement”) with the CD&R Funds, the holders of our Preferred Shares, to eliminate our quarterly dividend obligation on the Preferred Shares. The Amendment Agreement provided for the Certificate of Designations to be amended to terminate the dividend obligation from and after March 15, 2012 (the “Dividend Knock-out”). However, this does not preclude the payment of contingent default dividends, if applicable.

As consideration for the Dividend Knock-out, the CD&R Funds received a total of 37,834 additional shares of Convertible Preferred Stock, representing (i) approximately $6.5 million of dividends accrued from March 15, 2012 through May 18, 2012 (20 trading days after April 20, 2012, on which date the dividend “knock-out” measurement period commenced) and (ii) approximately $31.4 million in additional liquidation preference of Convertible Preferred Stock, or 10% of the approximate total $313.7 million of accreted value as of May 18, 2012. Upon the closing of the transactions in the Amendment Agreement, the CD&R Funds held Convertible Preferred Stock with an aggregate liquidation preference and accrued dividends of approximately $345 million. The Convertible Preferred Stock and accrued dividends entitle the CD&R Funds to receive approximately 54.1 million shares of common stock, representing 72.3% of the voting power and common stock of the Company on an as-converted basis as of January 27, 2013.

The dividend rate will increase from 0% to 6% per annum during certain defaults specified in the Certificate of Designations involving the Company’s failure to have a number of authorized and unissued shares of Common Stock reserved and available sufficient for the conversion of all outstanding Preferred Shares. The Company currently has sufficient authorized, unissued and reserved shares of Common Stock to effect the conversion.

On March 15, 2012, the Company paid to the holders of Convertible Preferred Stock, the CD&R Funds, a dividend of 8,924.762 shares of Convertible Preferred Stock for the period from December 16, 2011 to March 15, 2012. On December 15, 2011, the Company paid to the holders of Convertible Preferred Stock, the CD&R Funds, a dividend of 5,833.491 shares of Convertible Preferred Stock for the period from September 16, 2010 to December 15, 2011.

Accounting for Convertible Preferred Stock

In accordance with Accounting Standards Codification (“ASC”) Topic 815, Derivatives and Hedging, and ASC Topic 480, Distinguishing Liabilities from Equity, we classified the Convertible Preferred Stock as mezzanine equity because the Convertible Preferred Stock (1) can be settled in cash or shares of our Common Stock, (2) contains change of control rights allowing for early redemption, and (3) contains certain milestone redemption rights which allow the Convertible Preferred Stock to remain outstanding without a stated maturity date.

In addition, the Certificate of Designations, which is the underlying contract of the Convertible Preferred Stock, includes features that are required to be bifurcated and recorded at fair value. We classified the Convertible Preferred Stock as an equity host contract because of (1) the voting rights, (2) the participating dividends on Common Stock and mandatory, cumulative preferred stock dividends, and (3) the milestone redemption right which allows the Convertible Preferred Stock to remain outstanding without a stated maturity date. We then determined that the conditions resulting in the application of the default dividend rate are not clearly and closely related to this equity host contract and we bifurcated and separately recorded these features at fair value. As of both January 27, 2013 and October 28, 2012, the fair value carrying amount of the embedded derivative was immaterial.

Because the dividends accrued and accumulated on a daily basis and the amount payable upon redemption of the Convertible Preferred Stock is the liquidation preference plus accrued and unpaid dividends, accrued dividends were recorded into Convertible Preferred Stock. Prior to the Amendment Agreement, our policy was to recognize beneficial conversion feature charges on paid-in-kind dividends based on a daily dividend recognition and the daily closing stock price of our Common Stock.

In accordance with ASC Subtopic 470-20, Debt with Conversion and Other Options, the Convertible Preferred Stock contains a beneficial conversion feature because it was issued with an initial conversion price of $6.3740 and the closing stock price per share of Common Stock just prior to the execution of the CD&R Equity Investment was $12.55. The intrinsic value of the beneficial conversion feature cannot exceed the issuance proceeds of the Convertible Preferred Stock less the cash paid for the deal fee paid to the CD&R Funds manager in connection with the CD&R Equity Investment, and thus was $241.4 million as of October 20, 2009. At both January 27, 2013 and October 28, 2012, all of the potentially 54.1 million shares of Common Stock issuable upon conversion of the Preferred Shares, which includes paid-in-kind dividends, were authorized and unissued.

To determine if the Amendment Agreement resulted in a modification or extinguishment of the Convertible Preferred Stock, we evaluated the significance in the change to the substantive contractual terms in relation to both the economic characteristics of the Convertible Preferred Stock and the business purpose of the Amendment Agreement. Based on certain qualitative considerations, we determined an extinguishment and reissuance had occurred and we recorded the Convertible Preferred Stock at fair value as of May 8, 2012. As such, on May 8, 2012, the value of the Convertible Preferred Stock increased from a book value of $290.3 million to a fair value of $620.0 million. The increase in fair value reduced Additional Paid In Capital to zero on May 8, 2012, a $222.9 million decrease, and increased Accumulated Deficit by $106.7 million in the Consolidated Balance Sheet. In addition, the increase in fair value was offset by prior recognized beneficial conversion feature charges of $282.1 million since the issuance of the Convertible Preferred Stock which results in a $48.8 million Convertible Preferred Stock charge in the consolidated statement of operations. As of both January 27, 2013 and October 28, 2012, the Preferred Shares were convertible into 54.1 million shares of Common Stock at an initial conversion price of $6.3740.

During the three months ended January 29, 2012, the Company recorded accretion and accrued dividends of $0.7 million and $5.9 million, respectively. In the first quarter of fiscal 2012, we recorded a net $4.0 million beneficial conversion feature charge related to dividends that have accrued and are convertible into shares of Common Stock.

The Company’s aggregate liquidation preference plus accrued dividends of the Convertible Preferred Stock at January 27, 2013 and October 28, 2012 are as follows (in thousands):

	January 27, 2013		October 28, 2012
Liquidation preference	$	339,293	$	339,293
Accrued dividends		5,775		5,775
Aggregate liquidation preference	$	345,068	$	345,068

At both January 27, 2013 and October 28, 2012, we had 339,293 Preferred Shares outstanding.

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CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Jan. 27, 2013		Jan. 29, 2012
Sales	$ 297,584		$ 243,603
Cost of sales	236,715		189,981
Gross profit	60,869		53,622
Engineering, selling, general and administrative expenses	60,471		48,941
Acquisition-related costs	0		396
Income from operations	398		4,285
Interest income	30		28
Interest expense	(6,274)		(3,324)
Other income, net	394		26
Income (loss) before income taxes	(5,452)		1,015
Provision (benefit) from income taxes	(1,825)		426
Net income (loss)	(3,627)		589
Convertible preferred stock dividends and accretion	0		6,608
Convertible preferred stock beneficial conversion feature	0		4,020
Net loss applicable to common shares	$ (3,627)	[1]	$ (10,039)	[1]
Loss per common share:
Basic (in dollars per share)	$ (0.19)		$ (0.54)
Diluted (in dollars per share)	$ (0.19)		$ (0.54)
Weighted average number of common shares outstanding:
Basic (in Shares)	19,237		18,693
Diluted (in Shares)	19,237		18,693

[1] Participating securities consist of the holders of the Convertible Preferred Stock, as defined below, and the unvested restricted Common Stock related to our Incentive Plan. These participating securities do not have a contractual obligation to share in losses; therefore, no losses were allocated in any periods presented above. These participating securities will be allocated earnings when applicable.

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RESTRICTED CASH

3 Months Ended

Jan. 27, 2013

Restricted Cash [Abstract]

RESTRICTED CASH [Text Block]

NOTE 4 — RESTRICTED CASH

We have entered into a cash collateral agreement with our agent bank to secure letters of credit. The restricted cash is invested in a bank account securing our agent bank. As of January 27, 2013, we had restricted cash in the amount of $1.4 million as collateral related to our $1.4 million of letters of credit for certain insurance policies, exclusive of letters of credit under our Amended ABL Facility. See Note 9 — Long-Term Debt to the consolidated financial statements for more information on the material terms of our Amended ABL Facility. As of October 28, 2012, we had restricted cash in the amount of $1.4 million as collateral related to our $1.4 million of letters of credit for certain insurance policies, exclusive of letters of credit under our Amended ABL Facility. Restricted cash as of both January 27, 2013 and October 28, 2012 is classified as current as the underlying letters of credit expire within one year of the respective balance sheet date. The letters of credit will be renewed upon expiration.

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ACCOUNTING PRONOUNCEMENTS

3 Months Ended

Jan. 27, 2013

Accounting Pronouncements [Abstract]

ACCOUNTING PRONOUNCEMENTS [Text Block]

NOTE 3 —ACCOUNTING PRONOUNCEMENTS

Adopted Accounting Pronouncements

In June 2011, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income (“ASU 2011-05”) which amends its guidance on the presentation of comprehensive income to increase the prominence of items reported in other comprehensive income. The new guidance requires that all components of comprehensive income in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The guidance required entities to present reclassification adjustments out of accumulated other comprehensive income by component in both the statement in which net income is presented and the statement in which other comprehensive income is presented. In December 2011, the FASB issued ASU 2011-12, Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05 (“ASU 2011-12”) which indefinitely deferred the guidance related to the presentation on the face of the financial statements of the effects of reclassifications out of accumulated other comprehensive income on the components of net income and other comprehensive income. These amendments are to be applied retrospectively. We adopted ASU 2011-05 and ASU 2011-12 in our first quarter of fiscal 2013. The adoption of ASU 2011-05 and ASU 2011-12 did not have any impact on our consolidated financial statements.

Recent Accounting Pronouncements

In February 2013, the FASB issued ASU 2013-02, Comprehensive Income (Topic 220):Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, which requires that companies present, either in a single note or parenthetically on the face of the financial statements, the effect of significant amounts reclassified from each component of accumulated other comprehensive income based on its source and the income statement line items affected by the reclassification. This accounting guidance is effective for our first quarter in fiscal 2014 and is only expected to impact the presentation of our consolidated financial statements and related notes.

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ACCOUNTING PRONOUNCEMENTS (Policies)

3 Months Ended

Jan. 27, 2013

Accounting Pronouncements [Abstract]

Adopted Accounting Pronouncements Policy [Policy Text Block]

Adopted Accounting Pronouncements

In June 2011, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income (“ASU 2011-05”) which amends its guidance on the presentation of comprehensive income to increase the prominence of items reported in other comprehensive income. The new guidance requires that all components of comprehensive income in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The guidance required entities to present reclassification adjustments out of accumulated other comprehensive income by component in both the statement in which net income is presented and the statement in which other comprehensive income is presented. In December 2011, the FASB issued ASU 2011-12, Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05 (“ASU 2011-12”) which indefinitely deferred the guidance related to the presentation on the face of the financial statements of the effects of reclassifications out of accumulated other comprehensive income on the components of net income and other comprehensive income. These amendments are to be applied retrospectively. We adopted ASU 2011-05 and ASU 2011-12 in our first quarter of fiscal 2013. The adoption of ASU 2011-05 and ASU 2011-12 did not have any impact on our consolidated financial statements.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements

In February 2013, the FASB issued ASU 2013-02, Comprehensive Income (Topic 220):Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, which requires that companies present, either in a single note or parenthetically on the face of the financial statements, the effect of significant amounts reclassified from each component of accumulated other comprehensive income based on its source and the income statement line items affected by the reclassification. This accounting guidance is effective for our first quarter in fiscal 2014 and is only expected to impact the presentation of our consolidated financial statements and related notes.

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FAIR VALUE OF FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

3 Months Ended

Jan. 27, 2013

Fair Value Of Financial Instruments and Fair Value Measurements [Abstract]

FAIR VALUE OF FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS [Text Block]

NOTE 11 — FAIR VALUE OF FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

Fair Value of Financial Instruments

The carrying amounts of cash and cash equivalents, restricted cash, trade accounts receivable and accounts payable approximate fair value as of January 27, 2013 and October 28, 2012 because of the relatively short maturity of these instruments. The fair values of the remaining financial instruments not currently recognized at fair value on our Consolidated Balance Sheets at the respective fiscal period ends were (in thousands):

	January 27, 2013				October 28, 2012
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Credit Agreement (1)	$	228,715	$	241,200	$	236,944	$	248,750

(1) Carrying amount of Credit Agreement includes an unamortized discount of $11.3 million and $11.8 million at January 27, 2013 and October 28, 2012, respectively.

The fair value of the Credit Agreement was based on recent trading activities of comparable market instruments which are level 2 inputs.

Fair Value Measurements

ASC Subtopic 820-10, Fair Value Measurements and Disclosures, requires us to use valuation techniques to measure fair value that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized as follows:

Level 1: Observable inputs such as quoted prices for identical assets or liabilities in active markets.

Level 2: Other inputs that are observable directly or indirectly, such as quoted prices for similar assets or liabilities or market-corroborated inputs.

Level 3: Unobservable inputs for which there is little or no market data and which require us to develop our own assumptions about how market participants would price the assets or liabilities.

The following is a description of the valuation methodologies used for assets and liabilities measured at fair value. There have been no changes in the methodologies used at January 27, 2013 and October 28, 2012.

Money market: Money market funds have original maturities of three months or less. The original cost of these assets approximates fair value due to their short-term maturity.

Mutual funds: Mutual funds are valued at the closing price reported in the active market in which the mutual fund is traded.

Stocks, options and ETF’s: Stocks, options and ETF’s are valued at the closing price reported in the active market in which the fund is traded.

Foreign currency contracts: The fair value of the foreign currency derivatives are based on a market approach and take into consideration current foreign currency exchange rates and current creditworthiness of us or the counterparty, as applicable.

Assets held for sale: Assets held for sale are valued based on current market conditions, prices of similar assets in similar condition and expected proceeds from the sale of the assets.

Deferred compensation plan liability: Deferred compensation plan liability is comprised of phantom investments in the deferred compensation plan and is valued at the closing price reported in the active market in which the money market, mutual fund or NCI stock phantom investments are traded.

The following table summarizes information regarding our financial assets and liabilities that are measured at fair value on a recurring basis as of January 27, 2013, segregated by level of the valuation inputs within the fair value hierarchy utilized to measure fair value (in thousands):

	Level 1		Level 2			Level 3		Total
Assets:
Short-term investments in deferred compensation plan(1):
Money market	$	273	$	—		$	—	$	273
Mutual funds — Growth		638		—			—		638
Mutual funds — Blend		1,992		—			—		1,992
Mutual funds — Foreign blend		646		—			—		646
Mutual funds — Fixed income		—		569			—		569
Total short-term investments in deferred compensation plan		3,549		569			—		4,118
Total assets	$	3,549	$	569		$	—	$	4,118
Liabilities:
Deferred compensation plan liability	$	—	$	(4,615	)	$	—	$	(4,615	)
Total liabilities	$	—	$	(4,615	)	$	—	$	(4,615	)

(1) Unrealized holding gains (losses) for the three months ended January 27, 2013 was $0.2 million and for the three months ended January 29, 2012 was insignificant. These unrealized holding gains (losses) are primarily offset by changes in the deferred compensation plan liability.

The following table summarizes information regarding our financial assets that are measured at fair value on a nonrecurring basis as of January 27, 2013, segregated by level of the valuation inputs within the fair value hierarchy utilized to measure fair value (in thousands):

	Level 1		Level 2		Level 3		Total
Assets:
Assets held for sale (1)	$	—	$	—	$	2,397	$	2,397
Total assets	$	—	$	—	$	2,397	$	2,397

(1) Certain assets held for sale are valued at fair value and are measured at fair value on a nonrecurring basis. Assets held for sale are reported at fair value, if, on an individual basis, the fair value of the asset is less than cost. The fair value of assets held for sale is estimated using Level 3 inputs, such as broker quotes for like-kind assets or other market indications of a potential selling value which approximates fair value.

The following table summarizes information regarding our financial assets and liabilities that are measured at fair value on a recurring basis as of October 28, 2012, segregated by level of the valuation inputs within the fair value hierarchy utilized to measure fair value (in thousands):

	Level 1		Level 2			Level 3		Total
Assets:
Short-term investments in deferred compensation plan(1):
Money market	$	320	$	—		$	—	$	320
Mutual funds — Growth		594		—			—		594
Mutual funds — Blend		1,918		—			—		1,918
Mutual funds — Foreign blend		669		—			—		669
Mutual funds — Fixed income		—		575			—		575
Total short-term investments in deferred compensation plan	$	3,501	$	575		$	—	$	4,076
Total assets	$	3,501	$	575		$	—	$	4,076
Liabilities:
Deferred compensation plan liability	$	—	$	(4,146	)	$	—	$	(4,146	)
Total liabilities	$	—	$	(4,146	)	$	—	$	(4,146	)

The following table summarizes information regarding our financial assets that are measured at fair value on a nonrecurring basis as of October 28, 2012, segregated by level of the valuation inputs within the fair value hierarchy utilized to measure fair value (in thousands):

	Level 1		Level 2		Level 3		Total
Assets:
Assets held for sale(1)	$	—	$	—	$	2,397	$	2,397
Total assets	$	—	$	—	$	2,397	$	2,397

(1) Certain assets held for sale are valued at fair value and are measured at fair value on a nonrecurring basis. Assets held for sale are reported at fair value, if, on an individual basis, the fair value of the asset is less than cost. The fair value of assets held for sale is estimated using Level 3 inputs, such as broker quotes for like-kind assets or other market indications of a potential selling value which approximates fair value.

The tables above exclude assets and liabilities measured on a one-time non-recurring basis that were acquired as part of the Acquisition. See Note 2 — Acquisition for more information on our acquisition of Metl-Span. These assets and liabilities were recorded at their fair value upon acquisition in accordance with generally-accepted accounting principles. Acquisition date fair values represent either level 2 fair value measurements (current assets and liabilities, property, plant and equipment) or Level 3 fair value measurements (goodwill and intangible assets). On May 8, 2012, we entered into an Amendment Agreement with the CD&R Funds to eliminate our quarterly dividend obligation with respect to the Preferred Shares, which does not preclude the payment of contingent default dividends. To determine if the Amendment Agreement resulted in a modification or extinguishment of the Convertible Preferred Stock, we evaluated the significance in the change to the substantive contractual terms in relation to both the economic characteristics of the Convertible Preferred Stock and the business purpose of the Amendment Agreement. See Note 10 — Series B Cumulative Convertible Participating Stock for more information on the Convertible Preferred Stock. Based on certain qualitative considerations, we determined an extinguishment and reissuance had occurred and we recorded the Convertible Preferred Stock was determined using a binomial lattice model and is a level 3 in the fair value hierarchy.

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LOSS PER COMMON SHARE

3 Months Ended

Jan. 27, 2013

Earnings Per Share [Abstract]

LOSS PER COMMON SHARE [Text Block]

NOTE 7 — LOSS PER COMMON SHARE

Basic loss per common share is computed by dividing net loss allocated to common shares by the weighted average number of common shares outstanding. Diluted income per common share, if applicable, considers the dilutive effect of common stock equivalents. The reconciliation of the numerator and denominator used for the computation of basic and diluted loss per common share is as follows (in thousands, except per share data):  

	Fiscal Three Months Ended
	January 27, 2013			January 29, 2012
Numerator for Basic and Diluted Loss Per Common Share
Net loss allocated to common shares (1)	$	(3,627	)	$	(10,039	)
Denominator for Basic and Diluted Loss Per Common Share
Weighted average common shares outstanding for basic and diluted loss per share		19,237			18,693
Basic and Diluted loss per common share	$	(0.19	)	$	(0.54	)

(1) Participating securities consist of the holders of the Convertible Preferred Stock, as defined below, and the unvested restricted Common Stock related to our Incentive Plan. These participating securities do not have a contractual obligation to share in losses; therefore, no losses were allocated in any periods presented above. These participating securities will be allocated earnings when applicable.

We calculate earnings per share using the “two-class” method, whereby unvested share-based payment awards and Series B Cumulative Convertible Participating Preferred Stock (the “Convertible Preferred Stock,” and shares thereof, “Preferred Shares”) that contain non-forfeitable rights to dividends or dividend equivalents are “participating securities” and, therefore, these participating securities are treated as a separate class in computing earnings per share. The calculation of earnings per share for Common Stock presented here excludes the income, if any, attributable to the unvested restricted stock awards and our Preferred Shares from the numerator and excludes the dilutive impact of those shares from the denominator. There was no income amount attributable to unvested restricted stock or Preferred Shares for the three month periods ended January 27, 2013 and January 29, 2012 as the unvested restricted stock and Preferred Shares do not share in the net losses. However, in periods of net income allocated to common shares, a portion of this income will be allocable to the unvested restricted stock and Preferred Shares. As of both January 27, 2013 and October 28, 2012, the Preferred Shares were convertible into 54.1 million shares of Common Stock.

For both the three month periods ended January 27, 2013 and January 29, 2012, all options, unvested restricted shares and PSUswere anti-dilutive and, therefore, not included in the diluted loss per common share calculation.

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INVENTORIES

3 Months Ended

Jan. 27, 2013

Inventory Disclosure [Abstract]

Inventory Disclosure [Text Block]

NOTE 5 — INVENTORIES

The components of inventory are as follows (in thousands):

	January 27, 2013		October 28, 2012
Raw materials	$	82,825	$	77,459
Work in process and finished goods		30,945		28,556
	$	113,770	$	106,015

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SHARE-BASED COMPENSATION

3 Months Ended

Jan. 27, 2013

Share-Based Compensation [Abstract]

SHARE-BASED COMPENSATION [Text Block]

NOTE 6 — SHARE-BASED COMPENSATION

Our 2003 Long-Term Stock Incentive Plan (“Incentive Plan”) is an equity-based compensation plan that allows us to grant a variety of types of awards, including stock options, restricted stock, restricted stock units, stock appreciation rights, performance share units (“PSUs”), phantom stock awards and cash awards. As of January 27, 2013 and January 29, 2012, and for all periods presented, our share-based awards under this plan have consisted of restricted stock grants, PSUs and stock option grants, none of which can be settled through cash payments. Both our stock options and restricted stock awards are subject only to vesting requirements based on continued employment at the end of a specified time period and typically vest over four years or earlier upon death, disability or a change of control. However, our annual restricted stock awards also vest upon retirement and, only in the case of certain special one-time restricted stock awards, a portion vest on termination without cause or for good reason, as defined by the agreements governing such awards.

Our PSUs vest pro rata if an executive’s employment terminates prior to a three-year performance period ending on June 30, 2015 due to death, disability, or termination by NCI without cause or by the executive with good reason. If the executive’s employment terminates for any other reason prior to the end of the performance period, all PSUs are forfeited. If a change in control of NCI occurs prior to the end of the performance period, the performance period will immediately end at the time of the change in control and an executive will earn a percentage of the target number of PSUs based on the total shareholder return achieved determined by reference to the value of NCI common stock at the time of the change in control.

During the three month periods ended January 27, 2013 and January 29, 2012, we granted 2,101 and 92,832 stock options, respectively, and the grant-date fair value of options granted during the three month periods ended January 27, 2013 and January 29, 2012 was $7.22 and $5.12, respectively. Cash received from option exercises from a retired executive due to expiration in accordance with the terms of the agreement was $0.7 million during the three months ended January 27, 2013. The actual tax benefit realized for the tax deductions from option exercises totaled $0.2 million for the three months ended January 27, 2013.

The fair value of restricted stock awards classified as equity awards is based on the Company’s stock price as of the date of grant. During the three months ended January 27, 2013 and January 29, 2012, we granted restricted stock awards with a fair value of $6.3 million or 442,198 shares and $6.8 million or 663,929 shares, respectively.

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WARRANTY

3 Months Ended

Jan. 27, 2013

Warranty [Abstract]

WARRANTY [Text Block]

NOTE 8 — WARRANTY

We sell weathertightness warranties to our customers for protection from leaks in our roofing systems related to weather. These warranties range from two years to 20 years. We sell two types of warranties, standard and Single Source™, and three grades of coverage for each. The type and grade of coverage determines the price to the customer. For standard warranties, our responsibility for leaks in a roofing system begins after 24 consecutive leak-free months. For Single Source™ warranties, the roofing system must pass our inspection before warranty coverage will be issued. Inspections are typically performed at three stages of the roofing project: (i) at the project start-up; (ii) at the project mid-point; and (iii) at the project completion. These inspections are included in the cost of the warranty. If the project requires or the customer requests additional inspections, those inspections are billed to the customer. Upon the sale of a warranty, we record the resulting revenue as deferred warranty revenue, which is included in other accrued expenses in our Consolidated Balance Sheets. We recognize deferred warranty revenue over the warranty coverage period in a manner that matches our estimated expenses relating to the warranty. In addition, on June 22, 2012, we completed the acquisition of Metl-Span which offers weathertightness warranties on its wall and roof panels. We maintain an accrued warranty at Metl-Span in which the balance was $3.7 million at both January 27, 2013 and October 28, 2012. Weathertightness warranties are offered in various configurations for terms from five to 20 years, prorated or non-prorated and on a no dollar limit basis, as required by the buyer. These warranties are available only if certain conditions, some of which related to installation, are met. Additionally, we maintain an accrued warranty at our Robertson-Ceco II Corporation (“RCC”) subsidiary in which the balance was $3.0 million at both January 27, 2013 and October 28, 2012. RCC’s accrued warranty programs have similar terms and characteristics to our other warranty programs although these warranties are not amortized in the same manner as our other warranty programs.

The following table represents the rollforward of our acquired accrued warranty obligation and deferred warranty revenue activity for each of the fiscal three months ended (in thousands):

	Fiscal Three Months Ended
	January 27, 2013			January 29, 2012
Beginning balance	$	23,236		$	17,941
Warranties sold		646			631
Revenue recognized		(490	)		(431	)
Ending balance	$	23,392		$	18,141

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ACQUISITION (Details 1) (USD $) In Thousands, unless otherwise specified	Jun. 22, 2012
Current assets	$ 35,233
Current deferred income taxes	2,182
Property, plant and equipment	57,572
Intangible assets	32,760
Assets acquired	127,747
Current liabilities	24,924
Deferred income taxes	27,404
Lease liability	1,392
Liabilities assumed	53,720
Fair value of net assets acquired	74,027
Total consideration paid	145,682
Goodwill	$ 71,655

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FAIR VALUE OF FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Details Textual) (USD $)	3 Months Ended
	Jan. 27, 2013	Oct. 28, 2012	Jun. 22, 2012
Trading Securities, Change in Unrealized Holding Gain (Loss)	$ 200,000
Unamortized discount, net	11,285,000	11,806,000	12,500,000
Credit Agreement [Member]
Unamortized discount, net	$ 11,300,000	$ 11,800,000

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BUSINESS SEGMENTS

3 Months Ended

Jan. 27, 2013

Segment Reporting [Abstract]

BUSINESS SEGMENTS [Text Block]

NOTE 13 — BUSINESS SEGMENTS

Operating segments are defined as components of an enterprise that engage in business activities and by which discrete financial information is available that is evaluated on a regular basis by the chief operating decision maker to make decisions about how to allocate resources to the segment and assess the performance of the segment. We have three operating segments: (i) metal coil coating; (ii) metal components; and (iii) engineered building systems. All operating segments operate primarily in the nonresidential construction market. Sales and earnings are influenced by general economic conditions, the level of nonresidential construction activity, metal roof repair and retrofit demand and the availability and terms of financing available for construction. Products of our operating segments use similar basic raw materials. The metal coil coating segment consists of cleaning, treating, painting and slitting continuous steel coils before the steel is fabricated for use by construction and industrial users. The metal components segment products include metal roof and wall panels, doors, metal partitions, metal trim, insulated panels and other related accessories. Metl-Span is included in the metal components segment. See Note 2 – Acquisition. The engineered building systems segment includes the manufacturing of main frames, Long Bay ^® Systems and value-added engineering and drafting, which are typically not part of metal components or metal coil coating products or services. The operating segments follow the same accounting policies used for our consolidated financial statements.

We evaluate a segment’s performance based primarily upon operating income before corporate expenses. Intersegment sales are recorded based on standard material costs plus a standard markup to cover labor and overhead and consist of: (i) hot-rolled, light gauge painted and slit material and other services provided by the metal coil coating segment to both the engineered building systems and metal components segments; (ii) building components provided by the metal components segment to the engineered building systems segment; and (iii) structural framing provided by the engineered building systems segment to the metal components segment.

Corporate assets consist primarily of cash but also include deferred financing costs, deferred taxes and property, plant and equipment associated with our headquarters in Houston, Texas. These items (and income and expenses related to these items) are not allocated to the business segments. Corporate unallocated expenses include executive, legal, finance, tax, treasury, human resources, information technology, purchasing, marketing and corporate travel expenses. Additional unallocated expenses include interest income, interest expense and other (expense) income.

The following table represents sales, operating income and total assets attributable to these operating segments for the periods indicated (in thousands):

	Fiscal Three Months Ended
	January 27, 2013			January 29, 2012
Total sales:
Metal coil coating	$	49,271		$	49,083
Metal components		153,904			105,752
Engineered building systems		147,566			140,298
Intersegment sales		(53,157	)		(51,530	)
Total sales	$	297,584		$	243,603
External sales:
Metal coil coating	$	19,221		$	20,238
Metal components		136,528			87,296
Engineered building systems		141,835			136,069
Total sales	$	297,584		$	243,603
Operating income (loss):
Metal coil coating	$	5,542		$	5,302
Metal components		6,072			5,541
Engineered building systems		4,041			7,596
Corporate		(15,257	)		(14,154	)
Total operating income (loss)	$	398		$	4,285
Unallocated other expense		(5,850	)		(3,270	)
Income (loss) before income taxes	$	(5,452	)	$	1,015

	January 27, 2013		October 28, 2012
Total assets:
Metal coil coating	$	66,133	$	60,169
Metal components		372,552		381,028
Engineered building systems		202,068		214,227
Corporate		65,970		96,060
Total assets	$	706,723	$	751,484

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LOSS PER COMMON SHARE (Tables)

3 Months Ended

Jan. 27, 2013

Earnings Per Share [Abstract]

Schedule of Calculation of Numerator and Denominator in Earnings Per Share [Table Text Block]

The reconciliation of the numerator and denominator used for the computation of basic and diluted loss per common share is as follows (in thousands, except per share data):  

	Fiscal Three Months Ended
	January 27, 2013			January 29, 2012
Numerator for Basic and Diluted Loss Per Common Share
Net loss allocated to common shares (1)	$	(3,627	)	$	(10,039	)
Denominator for Basic and Diluted Loss Per Common Share
Weighted average common shares outstanding for basic and diluted loss per share		19,237			18,693
Basic and Diluted loss per common share	$	(0.19	)	$	(0.54	)

(1) Participating securities consist of the holders of the Convertible Preferred Stock, as defined below, and the unvested restricted Common Stock related to our Incentive Plan. These participating securities do not have a contractual obligation to share in losses; therefore, no losses were allocated in any periods presented above. These participating securities will be allocated earnings when applicable.

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FAIR VALUE OF FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Details 1) (USD $) In Thousands, unless otherwise specified	Jan. 27, 2013		Oct. 28, 2012
ASSETS
Assets, Fair Value Disclosure, Recurring	$ 4,118		$ 4,076
Liabilities
Liabilities, Fair Value Disclosure, Recurring	(4,615)		(4,146)
Fair Value, Inputs, Level 1 [Member]
ASSETS
Assets, Fair Value Disclosure, Recurring	3,549		3,501
Liabilities
Liabilities, Fair Value Disclosure, Recurring	0		0
Fair Value, Inputs, Level 2 [Member]
ASSETS
Assets, Fair Value Disclosure, Recurring	569		575
Liabilities
Liabilities, Fair Value Disclosure, Recurring	(4,615)		(4,146)
Fair Value, Inputs, Level 3 [Member]
ASSETS
Assets, Fair Value Disclosure, Recurring	0		0
Liabilities
Liabilities, Fair Value Disclosure, Recurring	0		0
Deferred Compensation Plan [Member]
Liabilities
Liabilities, Fair Value Disclosure, Recurring	(4,615)		(4,146)
Deferred Compensation Plan [Member] | Fair Value, Inputs, Level 1 [Member]
Liabilities
Liabilities, Fair Value Disclosure, Recurring	0		0
Deferred Compensation Plan [Member] | Fair Value, Inputs, Level 2 [Member]
Liabilities
Liabilities, Fair Value Disclosure, Recurring	(4,615)		(4,146)
Deferred Compensation Plan [Member] | Fair Value, Inputs, Level 3 [Member]
Liabilities
Liabilities, Fair Value Disclosure, Recurring	0		0
Short-Term Investments [Member]
ASSETS
Assets, Fair Value Disclosure, Recurring	4,118	[1]	4,076	[1]
Short-Term Investments [Member] | Fair Value, Inputs, Level 1 [Member]
ASSETS
Assets, Fair Value Disclosure, Recurring	3,549	[1]	3,501	[1]
Short-Term Investments [Member] | Fair Value, Inputs, Level 2 [Member]
ASSETS
Assets, Fair Value Disclosure, Recurring	569	[1]	575	[1]
Short-Term Investments [Member] | Fair Value, Inputs, Level 3 [Member]
ASSETS
Assets, Fair Value Disclosure, Recurring	0	[1]	0	[1]
Money Market Funds [Member]
ASSETS
Assets, Fair Value Disclosure, Recurring	273	[1]	320	[1]
Money Market Funds [Member] | Fair Value, Inputs, Level 1 [Member]
ASSETS
Assets, Fair Value Disclosure, Recurring	273	[1]	320	[1]
Money Market Funds [Member] | Fair Value, Inputs, Level 2 [Member]
ASSETS
Assets, Fair Value Disclosure, Recurring	0	[1]	0	[1]
Money Market Funds [Member] | Fair Value, Inputs, Level 3 [Member]
ASSETS
Assets, Fair Value Disclosure, Recurring	0	[1]	0	[1]
Mutual Funds - Growth [Member]
ASSETS
Assets, Fair Value Disclosure, Recurring	638	[1]	594	[1]
Mutual Funds - Growth [Member] | Fair Value, Inputs, Level 1 [Member]
ASSETS
Assets, Fair Value Disclosure, Recurring	638	[1]	594	[1]
Mutual Funds - Growth [Member] | Fair Value, Inputs, Level 2 [Member]
ASSETS
Assets, Fair Value Disclosure, Recurring	0	[1]	0	[1]
Mutual Funds - Growth [Member] | Fair Value, Inputs, Level 3 [Member]
ASSETS
Assets, Fair Value Disclosure, Recurring	0	[1]	0	[1]
Mutual Funds - Blend [Member]
ASSETS
Assets, Fair Value Disclosure, Recurring	1,992	[1]	1,918	[1]
Mutual Funds - Blend [Member] | Fair Value, Inputs, Level 1 [Member]
ASSETS
Assets, Fair Value Disclosure, Recurring	1,992	[1]	1,918	[1]
Mutual Funds - Blend [Member] | Fair Value, Inputs, Level 2 [Member]
ASSETS
Assets, Fair Value Disclosure, Recurring	0	[1]	0	[1]
Mutual Funds - Blend [Member] | Fair Value, Inputs, Level 3 [Member]
ASSETS
Assets, Fair Value Disclosure, Recurring	0	[1]	0	[1]
Mutual Funds - Foreign Blend [Member]
ASSETS
Assets, Fair Value Disclosure, Recurring	646	[1]	669	[1]
Mutual Funds - Foreign Blend [Member] | Fair Value, Inputs, Level 1 [Member]
ASSETS
Assets, Fair Value Disclosure, Recurring	646	[1]	669	[1]
Mutual Funds - Foreign Blend [Member] | Fair Value, Inputs, Level 2 [Member]
ASSETS
Assets, Fair Value Disclosure, Recurring	0	[1]	0	[1]
Mutual Funds - Foreign Blend [Member] | Fair Value, Inputs, Level 3 [Member]
ASSETS
Assets, Fair Value Disclosure, Recurring	0	[1]	0	[1]
Mutual Funds - Fixed Income [Member]
ASSETS
Assets, Fair Value Disclosure, Recurring	569	[1]	575	[1]
Mutual Funds - Fixed Income [Member] | Fair Value, Inputs, Level 1 [Member]
ASSETS
Assets, Fair Value Disclosure, Recurring	0	[1]	0	[1]
Mutual Funds - Fixed Income [Member] | Fair Value, Inputs, Level 2 [Member]
ASSETS
Assets, Fair Value Disclosure, Recurring	569	[1]	575	[1]
Mutual Funds - Fixed Income [Member] | Fair Value, Inputs, Level 3 [Member]
ASSETS
Assets, Fair Value Disclosure, Recurring	$ 0	[1]	$ 0	[1]

[1] Unrealized holding gains (losses) for the three months ended January 27, 2013 was $0.2 million and for the three months ended January 29, 2012 was insignificant. These unrealized holding gains (losses) are primarily offset by changes in the deferred compensation plan liability.

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LOSS PER COMMON SHARE (Details Textual) In Millions, unless otherwise specified	3 Months Ended
	Jan. 27, 2013	Oct. 28, 2012
Incremental Common Shares Attributable to Conversion of Preferred Stock	54.1	54.1

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Jan. 27, 2013	Jan. 29, 2012
Comprehensive income (loss):
Net income (loss)	$ (3,627)	$ 589
Other comprehensive loss, net of tax:
Foreign exchange translation loss and other (net of income tax of $0 in 2013 and 2012)	(24)	(5)
Loss in value of foreign currency derivative (net of income tax of $56 in 2012)	0	(89)
Other comprehensive loss	(24)	(94)
Comprehensive income (loss)	$ (3,651)	$ 495

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ACQUISITION

3 Months Ended

Jan. 27, 2013

Business Combinations [Abstract]

Business Combination Disclosure [Text Block]

NOTE 2 — ACQUISITION

On June 22, 2012, we completed the acquisition of Metl-Span LLC, a Texas limited liability company (“Metl-Span”). Pursuant to the terms of the Equity Purchase Agreement, dated as of May 2, 2012, as amended (the “Equity Purchase Agreement”), among VSMA, Inc., Metl-Span, NCI Group, Inc. and BlueScope Steel North America Corporation, NCI Group, Inc. acquired all of the outstanding membership interests of Metl-Span for approximately $145.7 million in cash (the “Acquisition”), which includes $4.7 million of cash acquired. The purchase price is also subject to a post-closing adjustment based on Metl-Span’s cash, working capital, indebtedness, transaction expenses and accrued employee bonuses at closing. Upon the closing of the Acquisition, Metl-Span became a direct, wholly-owned subsidiary of NCI Group, Inc. Effective October 29, 2012, Metl-Span merged with and into NCI Group, Inc., with NCI Group, Inc. being the lone survivor. Metl-Span’s operations are now conducted through NCI Group, Inc.

Accordingly, the results of Metl-Span’s operations from June 22, 2012 are included in our consolidated financial statements. For the period from October 29, 2012 to January 27, 2013, Metl-Span contributed revenue and operating income of $46.1 million and $3.0 million, respectively. Metl-Span assets acquired through the Acquisition include five manufacturing facilities in the United States serving the nonresidential building products market with cost-effective and energy efficient insulated metal wall and roof panels. The Acquisition resulted in goodwill of $71.7 million as it has strengthened our position as a leading fully integrated supplier to the nonresidential building products industry in North America, providing our customers a comprehensive suite of building products. During the three months ended January 29, 2012, we recognized $0.4 million in acquisition-related costs.

We report on a fiscal year that ends the Sunday closest to October 31. Metl-Span previously reported on a calendar year that ended on June 30. The unaudited pro forma financial information in the fiscal three months ended January 29, 2012 in the table below was prepared based on financial information for Metl-Span for the calendar months of October through December. The unaudited pro forma financial information for the fiscal three months ended January 27, 2013 and January 29, 2012 give effect to the transaction as if it had occurred at the beginning of the earliest fiscal period presented.

This unaudited pro forma financial information does not necessarily represent what would have occurred if the transaction had taken place on the dates presented and should not be taken as representative of our future consolidated results of operations. We have not finalized our integration plans. Accordingly, this pro forma information does not include all costs related to the integration. We also expect to realize operating synergies from consolidating procurement activities. The pro forma information does not reflect these potential synergies or expense reductions.

	Unaudited Pro Forma Fiscal Three Months Ended
(In thousands, except per share amounts)	January 27, 2013			January 29, 2012
Sales	$	297,584		$	288,964
Net income (loss)	$	398		$	(528	)
Net loss applicable to common shares	$	(3,627	)	$	(11,156	)
Earnings per share:
Basic	$	(0.19	)	$	(0.60	)
Diluted	$	(0.19	)	$	(0.60	)

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as part of the Acquisition. The fair value of certain assets acquired and liabilities assumed are preliminary and the final determination of any required purchase accounting adjustments will be made upon the finalization of the post-closing adjustment in the Equity Purchase Agreement and finalization of certain contingent assets and liabilities. We are currently completing our plans to functionally integrate the newly acquired operations into our existing operations. Additionally, as these plans are finalized, we may identify integration charges that are required to be recognized.

(In thousands)	June 22, 2012
Current assets	$	35,233
Current deferred income taxes		2,182
Property, plant and equipment		57,572
Intangible assets		32,760
Assets acquired	$	127,747
Current liabilities	$	24,924
Deferred income taxes		27,404
Lease liability		1,392
Liabilities assumed	$	53,720
Fair value of net assets acquired	$	74,027
Total consideration paid		145,682
Goodwill	$	71,655

The long-term deferred tax liability primarily relates to differences between the book basis and tax basis of property, plant and equipment and intangible assets, which were written up to fair market value for book purposes when accounting for the Acquisition and are not deductible for tax purposes.

The amount allocated to intangible assets was attributed to the following categories (in thousands):

			Lives
Trade names	$	9,600		15 years
Backlog		1,410		3 months
Supplier relationships		150		3 years
Customer lists and relationships		21,600		12 years
	$	32,760

These intangible assets are amortized on a basis consistent with the expected future cash flows.

The excess of the purchase price over the fair values of assets acquired and liabilities assumed was allocated to goodwill. Goodwill of $71.7 million was recorded in our metal components segment. None of the goodwill recorded as a result of this transaction is expected to be deductible for tax purposes.

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WARRANTY (Tables)

3 Months Ended

Jan. 27, 2013

Warranty [Abstract]

Schedule of Product Warranty Liability [Table Text Block]

The following table represents the rollforward of our acquired accrued warranty obligation and deferred warranty revenue activity for each of the fiscal three months ended (in thousands):

	Fiscal Three Months Ended
	January 27, 2013			January 29, 2012
Beginning balance	$	23,236		$	17,941
Warranties sold		646			631
Revenue recognized		(490	)		(431	)
Ending balance	$	23,392		$	18,141

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INVENTORIES (Details) (USD $) In Thousands, unless otherwise specified	Jan. 27, 2013	Oct. 28, 2012
Raw materials	$ 82,825	$ 77,459
Work in process and finished goods	30,945	28,556
Inventory Net	$ 113,770	$ 106,015

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INCOME TAXES

3 Months Ended

Jan. 27, 2013

Income Taxes [Abstract]

INCOME TAXES [Text Block]

NOTE 12 — INCOME TAXES

The reconciliation of income tax computed at the statutory tax rate to the effective income tax rate is as follows:

	Fiscal Three Months Ended
	January 27, 2013			January 29, 2012
Statutory federal income tax rate		35.0	%		35.0	%
State income taxes		3.7			4.4
Domestic production activities deduction		(2.5	)		—
Canada valuation allowance		(3.3	)		—
Non-deductible expenses		1.3			1.8
Other		(0.7	)		0.8
Effective tax rate		33.5	%		42.0	%

The total amount of unrecognized tax benefit at both January 29, 2013 and October 28, 2012 was $0.3 million, all of which would impact our effective tax rate, if recognized. We do not anticipate any material change in the total amount of unrecognized tax benefits to occur within the next twelve months.