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: September 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 filing obligation of the registrant under any of the following provisions:

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

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

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

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

Item 2.02. Results of Operations and Financial Condition.

On September 2, 2008, NCI Building Systems, Inc. (“NCI”) issued a press release announcing NCI’s financial results for the quarter ended July 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, if any, 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.

(d) Exhibits.

Exhibit Number	Description
99.1	Press Release dated September 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: September 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 THIRD QUARTER RESULTS

—Operating Income Up 31.9% on 10% Sales Growth—

—Operating Margin Increased to 11.7%—

—Third Quarter Net Income Reached $31.9 million, or $1.63 per diluted share—

—Full Year Fiscal 2008 Earnings Guidance Increased to $3.85-$4.00 per diluted share—

HOUSTON (September 2, 2008) – NCI Building Systems, Inc. (NYSE: NCS) today announced financial results for the third quarter ended July 27, 2008.

Sales for the fiscal 2008 third quarter increased 10% to $477.6 million from the $434.1 million reported for last year’s third quarter. Operating income increased 31.9% to $55.7 million from $42.2 million, and operating margin reached 11.7%, an increase of 200 basis points from the 9.7% operating margin reported for last year’s third quarter. Net income for the 2008 third quarter was $31.9 million or $1.63 per diluted share, an increase of 49.5% from $21.3 million, or $1.02 per diluted share in the 2007 third quarter.

Norman C. Chambers, Chairman, President and Chief Executive Officer of NCI, commented, “In the third quarter, we continued to see solid demand for our diversified steel products and systems from industrial, institutional and agricultural customers. During this period of rising steel prices, we redoubled our commitment to work with customers to improve their ability to incorporate raw material cost increases into end product pricing, as well as to design-in efficiencies that reduce the total weight and cost of our manufactured buildings systems.”

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10943 N. Sam Houston Parkway W. • Houston, Texas 77064

P.O. Box 692055 • Houston, Texas 77269-2055 • Telephone: (281) 897-7788 • Fax: (281) 477-9675

NCI Building Systems Reports Third-Quarter Results

Page 2

September 2, 2008

“Increased profitability was driven by the exceptional performance of our Components and Coatings segments which benefited from favorable business and product mix and ongoing manufacturing and logistics improvements. Because of its comparatively longer sale-to-delivery cycle, our Buildings group experienced some operating margin contraction in the third quarter, resulting from rapidly rising steel costs. However, we continued to see reasonably good business demand from specific end markets and for more complex work, and we succeeded in bringing our plant utilization rates to near third quarter 2007 levels.”

Segment Performance

The Coatings group posted year-over-year and sequential revenue growth resulting from higher steel prices and the ongoing shift in business mix from toll processing to package sales. Operating income increased significantly, reflecting the tight supply/demand situation, favorable product mix and the benefits of higher intercompany sales related to the RCC acquisition.

The Components group reported significant year-over-year and sequential revenue growth and substantial operating leverage resulting from increased revenues, commercial discipline, operating efficiencies and the ongoing benefits of the RCC acquisition.

The Buildings group achieved double-digit revenue growth, both sequentially and compared to last year’s third quarter. Rapidly-rising steel prices cause mixed results in this segment, with certain customers accelerating orders to avoid potentially higher costs and others postponing or re-evaluating projects. Operating income did not keep pace with sales growth and margins narrowed to 10% in this year’s third quarter, reflecting the lag time in effecting steel price increases to work in backlog. Backlog for the Buildings group was $424 million at the end of the third quarter, modestly below prior quarter levels due in part to higher sales in the quarter.

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10943 N. Sam Houston Parkway W. • Houston, Texas 77064

P.O. Box 692055 • Houston, Texas 77269-2055 • Telephone: (281) 897-7788 • Fax: (281) 477-9675

NCI Building Systems Reports Third-Quarter Results

Page 3

September 2, 2008

Outlook

“Rising steel prices have caused a shift in our traditional quarterly seasonality this year, as we saw a number of our Components and Buildings group customers, in particular, accelerate orders to lock-in their costs,” Mr. Chambers said. “Therefore, while second half results will account for the historical 65% to 75% of NCI’s full year earnings, third quarter results are expected to be the strongest of the year.”

Based upon performance to date, quarter-end backlog and current bookings, the Company is increasing its guidance range for fiscal 2008 earnings per diluted share to $3.85 to $4.00 from its previous guidance range of $3.19 to $3.44. This equates to expected fourth quarter fiscal 2008 earnings per share of $1.06 to $1.21.

“We believe that NCI’s ability to produce exceptionally strong financial and operating results during a period of very tough economic and business conditions is attributable to a number of factors. First, we have succeeded in capturing business from those segments of our addressable market where demand is strong, such as mining, energy, manufacturing, schools and government buildings and agriculture. Additionally, we are optimally positioned in three complementary business segments to take advantage of market demand for a broad range of products and systems. Third, we are executing on key elements of our strategic plan and are already seeing the early benefits of implementing technological advances, manufacturing efficiencies and extending our hub-and-spoke delivery system across RCC,” Mr. Chambers noted.

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 Wednesday, September 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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10943 N. Sam Houston Parkway W. • Houston, Texas 77064

P.O. Box 692055 • Houston, Texas 77269-2055 • Telephone: (281) 897-7788 • Fax: (281) 477-9675

NCI Building Systems Reports Third-Quarter Results

Page 4

September 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 43 manufacturing plants located in 18 states and Mexico, as well as sales and distribution facilities throughout the United States and Canada.

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10943 N. Sam Houston Parkway W. • Houston, Texas 77064

P.O. Box 692055 • Houston, Texas 77269-2055 • Telephone: (281) 897-7788 • Fax: (281) 477-9675

NCI Building Systems Reports Third-Quarter Results

Page 5

September 2, 2008

NCI BUILDING SYSTEMS, INC.

STATEMENTS OF INCOME

(Unaudited)

(In thousands, except per share data)

	For the Three Months Ended						For the Nine Months Ended
	July 27, 2008			July 29, 2007			July 27, 2008			July 29, 2007
Sales	$	477,596		$	434,081		$	1,255,228		$	1,161,494
Cost of sales		349,071			324,053			940,832			878,009
Gross profit		128,525			110,028			314,396			283,485
		26.9	%		25.3	%		25.0	%		24.4	%
Selling, general and administrative expenses		72,810			67,781			210,673			199,530
Income from operations		55,715			42,247			103,723			83,955
Interest income		157			7			917			233
Interest expense		(5,364	)		(7,206	)		(17,859	)		(21,918	)
Other income, net		808			125			1,022			804
Income before income taxes		51,316			35,173			87,803			63,074
Provision for income taxes		19,425			13,846			33,536			24,783
		37.9	%		39.4	%		38.2	%		39.3	%
Net income	$	31,891		$	21,327		$	54,267		$	38,291
Net income per share:
Basic	$	1.65		$	1.09		$	2.81		$	1.95
Diluted	$	1.63		$	1.02		$	2.79		$	1.82
Average shares outstanding:
Basic		19,363			19,655			19,308			19,661
Diluted		19,543			20,881			19,455			21,022
Depreciation/amortization expense		8,864			9,519			27,053			26,021
Increase in sales		10.0	%					8.1	%
Increase in diluted earnings per share		59.8	%					53.3	%
Gross profit percentage		26.9	%		25.3	%		25.0	%		24.4	%
Selling, general and administrative expenses percentage		15.2	%		15.6	%		16.7	%		17.2	%
Income from operations percentage		11.7	%		9.7	%		8.3	%		7.2	%

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10943 N. Sam Houston Parkway W. • Houston, Texas 77064

P.O. Box 692055 • Houston, Texas 77269-2055 • Telephone: (281) 897-7788 • Fax: (281) 477-9675

NCI Building Systems Reports Third-Quarter Results

Page 6

September 2, 2008

NCI BUILDING SYSTEMS, INC.

CONDENSED BALANCE SHEETS

(In thousands)

	July 27, 2008		October 28, 2007
	(Unaudited)
ASSETS
Cash and cash equivalents	$	39,880	$	75,054
Accounts receivable, net		166,073		158,967
Inventories		226,563		137,725
Deferred income taxes		24,200		23,439
Prepaid expenses and other		21,511		15,727
Total current assets		478,227		410,912
Property and equipment, net		252,075		261,994
Goodwill		616,400		616,400
Other assets		49,994		53,752
Total assets	$	1,396,696	$	1,343,058
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current portion of long-term debt	$	920	$	22,312
Note payable		1,297		—
Accounts payable		144,679		130,161
Accrued expenses		129,018		129,298
Total current liabilities		275,914		281,771
Long-term debt		473,710		474,725
Deferred income taxes		44,388		43,638
Other long-term liabilities		4,034		3,228
Shareholders’ equity		598,650		539,696
Total liabilities and shareholders' equity	$	1,396,696	$	1,343,058

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10943 N. Sam Houston Parkway W. • Houston, Texas 77064

P.O. Box 692055 • Houston, Texas 77269-2055 • Telephone: (281) 897-7788 • Fax: (281) 477-9675

NCI Building Systems Reports Third-Quarter Results

Page 7

September 2, 2008

NCI BUILDING SYSTEMS, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

	For the Nine Months Ended
	July 27, 2008			July 29, 2007
Net cash provided by operating activities	$	3,224		$	42,725
Cash flows from investing activities:
Acquisitions, net of cash acquired		—			(18,859	)
Capital expenditures		(17,922	)		(33,440	)
Other		6,342			(401	)
Net cash used in investing activities		(11,580	)		(52,700	)
Cash flows from financing activities:
Payments on revolving line of credit		—			(90,500	)
Borrowings on revolving line of credit		—			90,500
Payments on long-term debt		(22,407	)		(710	)
Payments on note payable		(2,595	)		—
Proceeds from stock option exercises		489			3,787
Excess tax benefits from stock-based compensation arrangements		162			1,459
Payment of financing costs		(75	)		(75	)
Purchase of treasury stock		(2,224	)		(12,286	)
Net cash used in financing activities		(26,650	)		(7,825	)
Effect of exchange rate changes on cash and cash equivalents		(168	)		216
Net decrease in cash		(35,174	)		(17,584	)
Cash at beginning of period		75,054			25,038
Cash at end of period	$	39,880		$	7,454

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10943 N. Sam Houston Parkway W. • Houston, Texas 77064

P.O. Box 692055 • Houston, Texas 77269-2055 • Telephone: (281) 897-7788 • Fax: (281) 477-9675

NCI Building Systems Reports Third-Quarter Results

Page 8

September 2, 2008

NCI Building Systems, Inc.

Business Segments

(Unaudited)

(In thousands)

	Three Months Ended					Three Months Ended					$ Inc/(Dec)			% Change
	July 27, 2008					July 29, 2007
Sales:				% of Total Sales					% of Total Sales
Metal coil coating	$	90,732		19		$	72,275		17		$	18,457		25.5	%
Metal components		214,774		45			193,140		44			21,634		11.2	%
Engineered building systems		280,767		59			256,323		59			24,444		9.5	%
Intersegment sales		(108,677	)	(23	)		(87,657	)	(20	)		(21,020	)	24.0	%
Total net sales	$	477,596		100		$	434,081		100		$	43,515		10.0	%
Operating income:				% of Sales					% of Sales
Metal coil coating	$	11,360		13		$	8,166		11		$	3,194		39.1	%
Metal components		34,044		16			16,852		9			17,192		102.0	%
Engineered building systems		26,644		9			30,876		12			(4,232	)	-13.7	%
Corporate		(16,333	)	—			(13,647	)	—			(2,686	)	19.7	%
Total operating income (% of sales)	$	55,715		12		$	42,247		10		$	13,468		31.9	%
	Nine Months Ended July 27, 2008					Nine Months Ended July 29, 2007					$ Inc/(Dec)			% Change
Sales:				% of Total Sales					% of Total Sales
Metal coil coating	$	233,178		19		$	195,338		17		$	37,840		19.4	%
Metal components		546,146		44			511,257		44			34,889		6.8	%
Engineered building systems		745,998		59			693,013		60			52,985		7.6	%
Intersegment sales		(270,094	)	(22	)		(238,114	)	(21	)		(31,980	)	13.4	%
Total net sales	$	1,255,228		100		$	1,161,494		100		$	93,734		8.1	%
Operating income:				% of Sales					% of Sales
Metal coil coating	$	20,760		9		$	18,570		10		$	2,190		11.8	%
Metal components		62,869		12			38,060		7			24,809		65.2	%
Engineered building systems		68,242		9			67,318		10			924		1.4	%
Corporate		(48,148	)	—			(39,993	)	—			(8,155	)	20.4	%
Total operating income (% of sales)	$	103,723		8		$	83,955		7		$	19,768		23.5	%

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10943 N. Sam Houston Parkway W. • Houston, Texas 77064

P.O. Box 692055 • Houston, Texas 77269-2055 • Telephone: (281) 897-7788 • Fax: (281) 477-9675

NCI Building Systems Reports Third-Quarter Results

Page 9

September 2, 2008

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
	July 27, 2008		July 29, 2007
Net income	$	79,704	$	66,341
Add:
Provision for income taxes		49,850		41,926
Interest expense		24,539		28,978
Depreciation and amortization		35,716		34,074
Non-cash FAS 123(R)		10,076		7,427
Adjusted EBITDA (1)	$	199,885	$	178,746

(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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10943 N. Sam Houston Parkway W. • Houston, Texas 77064

P.O. Box 692055 • Houston, Texas 77269-2055 • Telephone: (281) 897-7788 • Fax: (281) 477-9675

NCI Building Systems Reports Third-Quarter Results

Page 10

September 2, 2008

NCI BUILDING SYSTEMS, INC.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

“ADJUSTED” EARNINGS PER SHARE COMPARISON

(Unaudited)

	Fiscal Three Months Ended
	July 27, 2008			July 29, 2007
Earnings per diluted share, GAAP basis	$	1.63		$	1.02
Effect of convertible notes		—	(1)		0.05	(1)
“Adjusted” diluted earnings per share (A)	$	1.63		$	1.07
	Fiscal Nine Months Ended
	July 27, 2008			July 29, 2007
Earnings per diluted share, GAAP basis	$	2.79		$	1.82
Effect of convertible notes		—	(1)		0.10	(1)
“Adjusted” diluted earnings per share (A)	$	2.79		$	1.92

(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 July 29, 2007 of 926,055 shares and for the nine months ended July 29, 2007 of 1,046,274 shares of the Company's convertible notes as if they were converted during the period.

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10943 N. Sam Houston Parkway W. • Houston, Texas 77064

P.O. Box 692055 • Houston, Texas 77269-2055 • Telephone: (281) 897-7788 • Fax: (281) 477-9675

NCI Building Systems Reports Third-Quarter Results

Page 11

September 2, 2008

NCI Building Systems, Inc.

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

(Unaudited)

(In thousands)

	3rd Qtr 2008				3rd Qtr 2007				Inc/(Dec)		% Change		YTD 3rd Qtr 2008				YTD 3rd Qtr 2007				Inc/(Dec)		% Change
Metal Coil Coating
Total Sales	90,732		15	%	72,275		14	%	18,457		26	%	233,178		15	%	195,338		14	%	37,840		19	%
Intersegment	(62,842	)			(49,013	)			(13,829	)	28	%	(158,618	)			(134,820	)			(23,798	)	18	%
Third Party Sales	27,890		6	%	23,262		6	%	4,628		20	%	74,560		6	%	60,518		5	%	14,042		23	%
Operating Income	11,360		41	%	8,166		35	%	3,194		39	%	20,760		28	%	18,570		31	%	2,190		12	%
Metal Components
Total	214,774		37	%	193,140		37	%	21,634		11	%	546,146		36	%	511,257		37	%	34,889		7	%
Intersegment	(34,367	)			(26,849	)			(7,518	)	28	%	(82,202	)			(73,063	)			(9,139	)	13	%
Third Party Sales	180,407		38	%	166,291		38	%	14,116		8	%	463,944		37	%	438,194		38	%	25,750		6	%
Operating Income	34,044		19	%	16,852		10	%	17,192		102	%	62,869		14	%	38,060		9	%	24,809		65	%
Engineered Building Systems
Total	280,767		48	%	256,323		49	%	24,444		10	%	745,998		49	%	693,013		49	%	52,985		8	%
Intersegment	(11,468	)			(11,795	)			327		-3	%	(29,274	)			(30,231	)			957		-3	%
Third Party Sales	269,299		56	%	244,528		56	%	24,771		10	%	716,724		57	%	662,782		57	%	53,942		8	%
Operating Income	26,644		10	%	30,876		13	%	(4,232	)	-14	%	68,242		10	%	67,318		10	%	924		1	%
Consolidated
Total	586,273		100	%	521,738		100	%	64,535		12	%	1,525,322		100	%	1,399,608		100	%	125,714		9	%
Intersegment	(108,677	)			(87,657	)			(21,020	)	24	%	(270,094	)			(238,114	)			(31,980	)	13	%
Third Party Sales	477,596		100	%	434,081		100	%	43,515		10	%	1,255,228		100	%	1,161,494		100	%	93,734		8	%
Operating Income	55,715		12	%	42,247		10	%	13,468		32	%	103,723		8	%	83,955		7	%	19,768		24	%

—END—

10943 N. Sam Houston Parkway W. • Houston, Texas 77064

P.O. Box 692055 • Houston, Texas 77269-2055 • Telephone: (281) 897-7788 • Fax: (281) 477-9675