8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report: June 2, 2008

NCI BUILDING SYSTEMS, INC.

(Exact name of registrant as specified in its charter)

Delaware	1-14315	76-0127701
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification Number)

10943 North Sam Houston Parkway West Houston, Texas	77064
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (281) 897-7788

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the obligation of the registrant under any of the following provisions:

¨ Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

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

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

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

Item 2.02. Results of Operations and Financial Condition.

On June 2, 2008, NCI Building Systems, Inc. (“NCI”) issued a press release announcing NCI’s financial results for the quarter ended April 27, 2008. A copy of the press release is attached as Exhibit 99.1.

NCI’s press release included adjusted EBITDA and adjusted Earnings Per Share, which are non-GAAP financial measures. NCI reports these measures because they are widely accepted financial indicators in the metal construction industry of a company’s profitability, ability to finance its operations, and meet its growth plans. Adjusted EBITDA is also used by NCI internally to make acquisition and investment decisions. Adjusted EBITDA is calculated based on the terms contained in NCI’s senior credit agreement. Adjusted Earnings Per Share excludes the dilutive impact of NCI’s convertible notes from each period because the dilutive effect of the convertible notes is dependent entirely upon NCI’s stock price and not on underlying operational results. Adjusted Earnings Per Share is therefore used by management and provided to investors to provide comparability between periods of underlying operational results. Adjusted EBITDA and adjusted Earnings Per Share should not be considered in isolation or as substitutes for net income, debt or earnings per share determined in accordance with generally accepted accounting principles in the United States.

The information in this Item 2.02 and Exhibit 99.1 attached to this Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any registration statement or other filing under the Securities Act of 1933, as amended or the Exchange Act, except if NCI expressly states that such information is to be considered “filed” under the Exchange Act or incorporates it by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits.

(c) Exhibits.

Exhibit Number	Description
99.1	Press Release dated June 2, 2008.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

NCI BUILDING SYSTEMS, INC.
By:	/s/ Mark E. Johnson
Name:	Mark E. Johnson
Title:	Executive Vice President, Chief Financial Officer and Treasurer

Dated: June 2, 2008

EX-99.1

Exhibit 99.1

Contact: Norman C. Chambers Chairman, President and Chief Executive Officer (281) 897-7788

NCI BUILDING SYSTEMS REPORTS HIGHER SECOND QUARTER RESULTS

•    Volume Increased Across All Product Groups            

•    Operating Income Up 69% on 13% Revenue Growth

HOUSTON (June 2, 2008) – NCI Building Systems, Inc. (NYSE: NCS) today announced financial results for the second quarter ended April 27, 2008. Sales for the second quarter of fiscal 2008 increased 13.1% to $416.1 million compared with $367.9 million for the second quarter of fiscal 2007. Net income for the second quarter of fiscal 2008 was $14.9 million or $0.76 per diluted share compared to $6.5 million, or $0.31 per diluted share, for the second quarter of fiscal 2007. Included in the second quarter 2008 net income were special charges of approximately $2.8 million or $0.09 per diluted share, related to executive retirement costs and exiting the Components segment’s residential overhead door product line.

Norman C. Chambers, Chairman, President and Chief Executive Officer of NCI, remarked, “We posted very strong operating results this quarter, substantially exceeding expectations. Solid demand from the industrial, institutional and agricultural markets resulted in year-over-year volume increases across all of our product groups. We achieved significant operating leverage resulting from increased plant capacity utilization and the benefits of continued integration of RCC with our hub and spoke delivery system.”

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June 2, 2008

“Within today’s difficult business environment, we worked effectively with customers to optimize their visibility in the face of rising steel costs. Our Buildings Group shipping schedule remained firm; our Components Group performed exceptionally well, benefiting from strong third party demand, which drove a significant increase in operating profits.”

Segment Performance

The Coatings group posted strong revenue and operating performance on both a year-over-year and sequential basis. The increase was primarily attributable to higher revenues as a result of the product shift from toll coating services to package sales, which are higher dollar but lower margin transactions, as well as rising steel prices. Plant capacity utilization during the second quarter was 77% and operating margin was 25%, in line with the Company’s target range which reflects the product mix shift.

The Components group achieved operating margin improvement as operating performance has continued to recover from the second quarter of 2007. Revenue increases were driven by volume growth and to a lesser extent, the increased price of steel. Significant improvement in utilization as a result of higher volumes, combined with cost reduction initiatives, which were initially undertaken in the second half of 2007, contributed to the improvement in operating income.

Revenue for the Buildings Group rose 14% on both a year-over-year and sequential basis. Plant utilization increased to 71% for the period and the Buildings Group recorded solid operating margin improvement. The backlog for the Buildings Group was $449 million at the end of the quarter, flat with the 2007 second quarter and up 9.3% from the first quarter of 2008.

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June 2, 2008

Outlook

“We continue to see solid demand from key end markets, as evidenced by our Buildings Group backlog and the current level of quoting activity. In our third fiscal quarter we expect accelerated steel price increases. We are actively monitoring the impact of higher prices on bookings and continue to work with customers to effectively manage through this challenging period,” Mr. Chambers said.

Based upon currently available information and performance to date, the Company has narrowed its guidance, expecting full year 2008 earnings per diluted share to range from $3.19 to $3.44. Therefore our guidance for the second half of our fiscal year is $2.04 to $2.29 per diluted share.

“We continue to execute on our longer term strategic plan, building upon our strong competitive position, our reputation for superior customer service and our solid relationships with steel mills. Significant growth in profitability will be driven by technological advances, manufacturing and engineering efficiencies and new products,” concluded Mr. Chambers.

NCI will provide an online, real-time webcast and rebroadcast of its conference call tomorrow to discuss this announcement. The live broadcast of this conference call will be available online at www.ncilp.com beginning at 10:30 a.m. (Eastern Time) on Tuesday, June 3, 2008. The online replay will be available at approximately 12:30 p.m. (Eastern Time) and continue for one week.

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June 2, 2008

This release contains forward-looking statements concerning NCI’s business and operations and industry conditions, including among others industry trends, steel pricing, growth expectations and margin expansion. These statements and other statements identified by words such as “guidance,” “potential,” “expect,” “should” and similar expressions are forward looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to a number of risks and uncertainties that may cause NCI’s actual performance to differ materially from that projected in such statements. Among the factors that could cause actual results to differ materially are the possibility that the anticipated benefits from the RCC acquisition cannot be fully realized; the possibility that costs or difficulties related to the integration of the RCC operations into the Company’s operations will be greater than expected; industry cyclicality and seasonality; fluctuations in demand and prices for steel; the financial condition of NCI’s raw material suppliers; competitive activity and pricing pressure; ability to execute NCI’s acquisition strategy; and general economic conditions affecting the construction industry. Item 1A “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended October 28, 2007, identifies other important factors, though not necessarily all such factors, that could cause future outcomes to differ materially from those set forth in the forward-looking statements. NCI expressly disclaims any obligation to release publicly any updates or revisions to these forward-looking statements to reflect any changes in its expectations.

NCI Building Systems, Inc. is one of North America's largest integrated manufacturers of metal products for the nonresidential building industry. The Company operates 44 manufacturing and distribution facilities located in 18 states, as well as Mexico and Canada.

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June 2, 2008

NCI BUILDING SYSTEMS, INC.

STATEMENTS OF INCOME

(Unaudited)

(In thousands, except per share data)

	For the Three Months Ended						For the Six Months Ended
	April 27, 2008			April 29, 2007			April 27, 2008			April 29, 2007
Sales	$	416,143		$	367,912		$	777,632		$	727,413
Cost of sales		312,703			282,337			591,761			553,956
Gross profit		103,440			85,575			185,871			173,457
		24.9	%		23.3	%		23.9	%		23.8	%
Selling, general and administrative expenses		73,928			68,100			137,863			131,749
Income from operations		29,512			17,475			48,008			41,708
Interest income		102			102			760			226
Interest expense		(5,591	)		(7,420	)		(12,495	)		(14,712	)
Other income, net		252			663			214			679
Income before income taxes		24,275			10,820			36,487			27,901
Provision for income taxes		9,409			4,309			14,111			10,937
		38.8	%		39.8	%		38.7	%		39.2	%
Net income	$	14,866		$	6,511		$	22,376		$	16,964
Net income per share:
Basic	$	0.77		$	0.33		$	1.16		$	0.86
Diluted	$	0.76		$	0.31		$	1.15		$	0.80
Average shares outstanding:
Basic		19,312			19,628			19,281			19,663
Diluted		19,440			20,962			19,420			21,091
Depreciation/amortization expense		8,845			8,133			18,189			16,502
Increase in sales		13.1	%					6.9	%
Increase in diluted earnings per share		145.2	%					43.8	%
Gross profit percentage		24.9	%		23.3	%		23.9	%		23.8	%
Selling, general and administrative expenses percentage		17.8	%		18.5	%		17.7	%		18.1	%
Income from operations percentage		7.1	%		4.8	%		6.2	%		5.7	%

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NCI BUILDING SYSTEMS, INC.

CONDENSED BALANCE SHEETS

(In thousands)

	April 27, 2008		October 28, 2007
	(Unaudited)
ASSETS
Cash and cash equivalents	$	35,747	$	75,054
Accounts receivable, net		152,782		158,435
Inventories		158,537		137,725
Deferred income taxes		24,212		23,439
Prepaid expenses and other		24,630		16,259
Total current assets		395,908		410,912
Property and equipment, net		256,333		261,994
Goodwill		616,400		616,400
Other assets		52,655		53,752
Total assets	$	1,321,296	$	1,343,058
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current portion of long-term debt	$	920	$	22,312
Note payable		3,243		—
Accounts payable		121,719		130,161
Accrued expenses		106,980		129,298
Total current liabilities		232,862		281,771
Long-term debt		473,940		474,725
Deferred income taxes		44,839		43,638
Other long-term liabilities		5,246		3,228
Shareholders’ equity		564,409		539,696
Total liabilities and shareholders’ equity	$	1,321,296	$	1,343,058

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NCI BUILDING SYSTEMS, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

	For the Six Months Ended
	April 27, 2008			April 29, 2007
Net used in operating activities		(4,206	)		(13,700	)
Cash flows from investing activities:
Acquisitions, net of cash acquired		—			(18,829	)
Capital expenditures		(13,285	)		(22,350	)
Other		2,795			570
Net cash used in investing activities		(10,490	)		(40,609	)
Cash flows from financing activities:
Payments on revolving line of credit		—			(42,000	)
Borrowings on revolving line of credit		—			86,000
Payments on long-term debt		(22,177	)		(474	)
Payment on note payable		(649	)		—
Proceeds from stock option exercises		447			940
Excess tax benefits from stock-based compensation arrangements		154			546
Purchase of treasury stock		(2,216	)		(10,763	)
Net cash (used in) provided by financing activities		(24,441	)		34,249
Effect of exchange rate changes on cash and cash equivalents		(170	)		(31	)
Net decrease in cash		(39,307	)		(20,091	)
Cash at beginning of period		75,054			25,038
Cash at end of period	$	35,747		$	4,947

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NCI Building Systems, Inc.

Business Segments

(Unaudited)

(In thousands)

	Three Months Ended April 27, 2008					Three Months Ended April 29, 2007					$ Inc/(Dec)			% Change
				% of Total Sales					% of Total Sales
Sales:
Metal coil coating	$	80,171		19		$	63,844		17		$	16,327		25.6	%
Metal components		176,534		42			161,096		44			15,438		9.6	%
Engineered building systems		248,503		60			218,449		59			30,054		13.8	%
Intersegment sales		(89,065	)	(21	)		(75,477	)	(20	)		(13,588	)	18.0	%
Total net sales	$	416,143		100		$	367,912		100		$	48,231		13.1	%
				% of Sales					% of Sales
Operating income:
Metal coil coating	$	6,705		8		$	5,761		9		$	944		16.4	%
Metal components		17,734		10			9,122		6			8,612		94.4	%
Engineered building systems		22,729		9			15,741		7			6,988		44.4	%
Corporate		(17,656	)	—			(13,149	)	—			(4,507	)	34.3	%
Total operating income (% of sales)	$	29,512		7		$	17,475		5		$	12,037		68.9	%
	Six Months Ended April 27, 2008					Six Months Ended April 29, 2007					$ Inc/(Dec)			% Change
				% of Total Sales					% of Total Sales
Sales:
Metal coil coating	$	142,446		18		$	123,063		17		$	19,383		15.8	%
Metal components		331,372		43			318,117		44			13,255		4.2	%
Engineered building systems		465,231		60			436,690		60			28,541		6.5	%
Intersegment sales		(161,417	)	(21	)		(150,457	)	(21	)		(10,960	)	7.3	%
Total net sales	$	777,632		100		$	727,413		100		$	50,219		6.9	%
				% of Sales					% of Sales
Operating income:
Metal coil coating	$	9,400		7		$	10,404		8		$	(1,004	)	-9.7	%
Metal components		28,825		9			21,208		7			7,617		35.9	%
Engineered building systems		41,598		9			36,442		8			5,156		14.1	%
Corporate		(31,815	)	—			(26,346	)	—			(5,469	)	20.8	%
Total operating income (% of sales)	$	48,008		6		$	41,708		6		$	6,300		15.1	%

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NCI BUILDING SYSTEMS, INC.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

COMPUTATION OF EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION,

AMORTIZATION AND OTHER NONCASH ITEMS (“ADJUSTED EBITDA”)

(Unaudited)

(In thousands)

	Trailing 12 Months
	April 27, 2008		April 29, 2007
Net income	$	69,141	$	66,688
Add:
Provision for income taxes		44,271		40,735
Interest expense		26,382		29,798
Depreciation and amortization		36,372		33,320
Non-cash FAS 123(R)		10,775		7,276
Adjusted EBITDA (1)	$	186,941	$	177,817

(1) The Company discloses adjusted EBITDA, which is a non-GAAP measure, because it is a widely accepted financial indicator in the metal construction industry of a company’s profitability, ability to finance its operations, and meet its growth plans. This measure is also used by NCI internally to make acquisition and investment decisions. Adjusted EBITDA is calculated based on the terms contained in the Company’s credit agreement at the respective dates presented herein. Results of operations of businesses acquired are included in this measure for periods subsequent to the acquisition and are not included on a pro forma basis. Adjusted EBITDA should not be considered in isolation or as a substitute for net income determined in accordance with generally accepted accounting principles in the United States.

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NCI BUILDING SYSTEMS, INC.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

“ADJUSTED” EARNINGS PER SHARE COMPARISON

(Unaudited)

	Fiscal Three Months Ended
	April 27, 2008			April 29, 2007
Earnings per diluted share, GAAP basis	$	0.76		$	0.31
Effect of convertible notes		—	(1)		0.02	(1)
“Adjusted” diluted earnings per share (A)	$	0.76		$	0.33
	Fiscal Six Months Ended
	April 27, 2008			April 29, 2007
Earnings per diluted share, GAAP basis	$	1.15		$	0.80
Effect of convertible notes		—	(1)		0.05	(1)
“Adjusted” diluted earnings per share (A)	$	1.15		$	0.85

(A) The Company discloses a tabular comparison of “Adjusted” earnings per diluted share, which is a non-GAAP measure because it is referred to in the text of our press releases and is instrumental in comparing the results from period to period. “Adjusted” earnings per share should not be considered in isolation or as a substitute for earnings per share as reported on the face of our statement of income.

(1) Dilutive impact for the three months ended April 29, 2007 of 1,006,940 shares and for the six months ended April 29, 2007 of 1,103,388 shares of the Company’s convertible notes as if they were converted during the period.

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NCI Building Systems, Inc.

Reconciliation of Segment Sales to Third Party Segment Sales (Internal Information)

(Unaudited)

(In thousands)

	2nd Qtr 2008				2nd Qtr 2007				Inc/(Dec)		% Change		YTD 2nd Qtr 2008				YTD 2nd Qtr 2007				Inc/(Dec)		% Change
Metal Coil Coating
Total Sales	80,171		16	%	63,844		15	%	16,327		26	%	142,446		15	%	123,063		14	%	19,383		16	%
Intersegment	(52,883	)			(43,019	)			(9,864	)	23	%	(95,776	)			(85,807	)			(9,969	)	12	%
Third Party Sales	27,288		7	%	20,825		6	%	6,463		31	%	46,670		6	%	37,256		5	%	9,414		25	%
Operating Income	6,705		25	%	5,761		28	%	944		16	%	9,400		20	%	10,404		28	%	(1,004	)	-10	%
Metal Components
Total	176,534		35	%	161,096		36	%	15,438		10	%	331,372		35	%	318,117		36	%	13,255		4	%
Intersegment	(26,031	)			(23,376	)			(2,655	)	11	%	(47,835	)			(46,214	)			(1,621	)	4	%
Third Party Sales	150,503		36	%	137,720		37	%	12,783		9	%	283,537		36	%	271,903		37	%	11,634		4	%
Operating Income	17,734		12	%	9,122		7	%	8,612		94	%	28,825		10	%	21,208		8	%	7,617		36	%
Engineered Building Systems
Total	248,503		49	%	218,449		49	%	30,054		14	%	465,231		50	%	436,690		50	%	28,541		7	%
Intersegment	(10,151	)			(9,082	)			(1,069	)	12	%	(17,806	)			(18,436	)			630		-3	%
Third Party Sales	238,352		57	%	209,367		57	%	28,985		14	%	447,425		58	%	418,254		58	%	29,171		7	%
Operating Income	22,729		10	%	15,741		8	%	6,988		44	%	41,598		9	%	36,442		9	%	5,156		14	%
Consolidated
Total	505,208		100	%	443,389		100	%	61,819		14	%	939,049		100	%	877,870		100	%	61,179		7	%
Intersegment	(89,065	)			(75,477	)			(13,588	)	18	%	(161,417	)			(150,457	)			(10,960	)	7	%
Third Party Sales	416,143		100	%	367,912		100	%	48,231		13	%	777,632		100	%	727,413		100	%	50,219		7	%
Operating Income	29,512		7	%	17,475		5	%	12,037		69	%	48,008		6	%	41,708		6	%	6,300		15	%