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 15, 2009

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:

þ 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 7.01 Regulation FD Disclosure.

On September 15, 2009, NCI Building Systems, Inc. (“NCI”) made available presentation materials (the “Presentation Materials”) to be used by NCI in certain presentations by management. A copy of the Presentation Materials are attached as Exhibit 99.1 and is incorporated herein by reference and is also available on NCI’s website www.ncilp.com.

The information in this report, including the Presentation Materials incorporated herein by reference, is being “furnished” pursuant to General Instruction F to Current Report on Form 8-K, and shall not, except as provided in Item 8.01 below, be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information in this report, including the Presentation Materials incorporated herein by reference, shall not be incorporated by reference into any registration statement or other documents pursuant to the Securities Act of 1933, as amended, or into any filing or other document pursuant to the Exchange Act except as otherwise expressly stated in any such filing.

Item 8.01 Other Events.

The cover page (titled “Important Information About this Communication”) to Exhibit 99.1 hereto, and page numbered 22 thereof, are incorporated by reference into this Item 8.01.

*  *  *

Important Information About this Communication

This current report and its contents is not an offer to sell or purchase or an offer to exchange or a solicitation of acceptance of an offer to sell or purchase or offer to exchange. Any such offer or solicitation shall be made solely by means of the prospectus, related letter of transmittal and other offer documents, as described below.

In connection with the commencement of the Exchange Offer by the Company to acquire all of the Company’s outstanding 2.125% Convertible Senior Subordinated Notes due 2024 (the “convertible notes”), issued under that indenture, dated as of November 16, 2004, between the Company and The Bank of New York, as trustee, in exchange for cash and shares of Company common stock, the Company has filed with the U.S. Securities and Exchange Commission (the “SEC”) a registration statement on Form S-4 (which will include a preliminary prospectus), a tender offer statement on Schedule TO and related documents and materials. Investors and security holders are strongly urged to carefully review the registration statement, the preliminary prospectus, the tender offer statement and the other related documents and materials filed with the SEC, including the final prospectus described below, when available, as well as any amendments and supplements thereto, when available, because they will contain important information about the Company, the proposed exchange offer and related transactions and are the sole means by which any offer to exchange or sell, or any solicitation of any such offers, will be made.

The registration statement contains a preliminary prospectus and related transmittal materials that have been mailed to holders of the convertible notes. Investors and security holders may obtain a free copy of the registration statement, preliminary prospectus and transmittal materials, as well as other documents filed by the Company with the SEC, at the SEC’s web site, www.sec.gov. Prior to the completion of the exchange offer, the registration statement must become effective under the securities laws, and after effectiveness, the Company will file with the SEC the final prospectus. Investors and security holders are strongly urged to carefully review the final prospectus when it is available. Free copies of NCI’s filings with the SEC may also be obtained from the Company’s Investor Relations Department at P.O. Box 692055, Houston, Texas 77269-2055 or by phone at (281) 897-7788.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number	Description
99.1	Investor Presentation issued by NCI Building Systems, Inc. dated September 15, 2009.

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
	Mark E. Johnson
	Executive Vice President, Chief Financial Officer and Treasurer

Dated: September 15, 2009

EX-99.1

Exhibit 99.1

Important Information About this Communication

This communication is not an offer to sell or purchase or an offer to exchange or a solicitation of acceptance of an offer to sell or purchase or offer to exchange. Any such offer or solicitation shall be made solely by means of the prospectus, related letter of transmittal and other offer documents, as described below.

In connection with the commencement of the Exchange Offer by the Company to acquire all of the Company’s outstanding 2.125% Convertible Senior Subordinated Notes due 2024 (the “convertible notes”), issued under that indenture, dated as of November 16, 2004, between the Company and The Bank of New York, as trustee, in exchange for cash and shares of Company common stock, the Company has filed with the U.S. Securities and Exchange Commission (the “SEC”) a registration statement on Form S-4 (which will include a preliminary prospectus), a tender offer statement on Schedule TO and related documents and materials. Investors and security holders are strongly urged to carefully review the registration statement, the preliminary prospectus, the tender offer statement and the other related documents and materials filed with the SEC, including the final prospectus described below, when available, as well as any amendments and supplements thereto, when available, because they will contain important information about the Company, the proposed exchange offer and related transactions and are the sole means by which any offer to exchange or sell, or any solicitation of any such offers, will be made.

The registration statement contains a preliminary prospectus and related transmittal materials that have been mailed to holders of the convertible notes. Investors and security holders may obtain a free copy of the registration statement, preliminary prospectus and transmittal materials, as well as other documents filed by the Company with the SEC, at the SEC’s web site, www.sec.gov. Prior to the completion of the exchange offer, the registration statement must become effective under the securities laws, and after effectiveness, the Company will file with the SEC the final prospectus. Investors and security holders are strongly urged to carefully review the final prospectus when it is available. Free copies of NCI’s filings with the SEC may also be obtained from the Company’s Investor Relations Department at P.O. Box 692055, Houston, Texas 77269-2055 or by phone at (281) 897-7788.

Forward Looking Statements

This Current Report on Form 8-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 27A of the Securities Act. 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 the Company’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 occurrence of any event, change or other circumstance that could give rise to the termination of the investment agreement with Clayton, Dubilier & Rice Fund VIII, L.P.; the inability to complete the transactions contemplated by the investment agreement due to failure to satisfy conditions to such transactions (including with respect to the refinancing of the senior credit facility and the convertible notes); the failure of the transactions discussed herein to close for any reason; the outcome of any legal proceedings that may be instituted against the Company and others following the announcement of the investment agreement, the transactions contemplated thereby, including the convertible notes exchange offer; risks that the proposed transactions disrupt current plans and operations and the potential difficulties in employee retention; industry cyclicality and seasonality and adverse weather

conditions; ability to service the Company’s debt; fluctuations in customer demand and other patterns; raw material pricing and supply; competitive activity and pricing pressure; general economic conditions affecting the construction industry; the current financial crisis and U.S. recession; changes in laws or regulations; the volatility of the Company’s stock price; the potential dilution associated with the convertible notes exchange offer; the Company’s ability to comply with the financial tests and covenants in its existing and future debt obligations; the significant demands on the Company’s liquidity while current economic and credit conditions are severely affecting its operations; and the uncertainty surrounding the transactions described herein, including the Company’s ability to retain employees, customers and vendors. Item 1A “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended November 2, 2008, and the section titled “Risk Factors” in Exhibit 99.2 to the Company’s Current Report on Form 8-K filed on September 10, 2009 each 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. The Company 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

Lender Presentation

September 2009

Safe Harbor

2

Some

comments

made

in

this

presentation

are

“forward-looking”

statements,

as

defined

in

the

Private

Securities

Litigation

Reform Act of 1995. These forward-looking statements are subject to a number of risks and uncertainties that may cause

the

Company’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 occurrence of any event, change or other circumstance that could give rise to

the termination of the Investment Agreement; the inability to complete transactions contemplated by the Investment

Agreement due to failure to satisfy conditions to such transactions (including with respect to the refinancing of the senior

secured credit facility and the Convertible Notes); the failure of the Preferred Stock Investment or refinancing transactions

discussed herein to close for any reason; the outcome of any legal proceedings that may be instituted against the Company

and others following the announcement of the Investment Agreement; the transactions contemplated by the Investment

Agreement,

including

the

Convertible

Notes

exchange

offer;

risks

that

the

proposed

transactions

disrupt

current

plans

and

operations

and

the

potential

difficulties

in

employee

retention;

the

uncertainty

surrounding

the

Preferred

Stock

Investment

or

refinancing transactions described herein, including the Company’s ability to retain employees, customers and vendors;

industry cyclicality and seasonality and adverse weather conditions; fluctuations in customer demand; raw material pricing

and supply; the financial condition of the company’s raw material suppliers; competitive activity and pricing pressure; ability

to make strategic acquisitions accretive to earnings; general economic conditions affecting the construction industry; and

ability to service or refinance the company’s debt; current financial crisis and U.S. recession; changes in laws or regulations;

costs

and

other

effects

of

legal

and

administrative

proceedings,

settlement,

investigations,

claims

and

other

matters;

the

volatility of the Company’s stock price; the potential dilution associated with the Preferred Stock Investment and the

Convertible Notes exchange offer; the Company’s ability to comply with the financial tests and covenants in its existing and

future debt obligations; and the significant demands on the Company’s liquidity while current economic and credit conditions

are

severely

affecting

its

operations.

Investors

should

refer

to

statements

regularly

filed

by

the

Company

with

the

Securities

and Exchange Commission for a discussion of additional factors which could affect the company’s operations and forward-

looking statements made in this presentation. The Company expressly disclaims any obligation to release publicly any

updates or revisions to these forward-looking statements to reflect any changes in expectations.

I.

Executive Summary

II.

CD&R Overview

III.

Business Update

IV.

Financial Overview

V.

Closing Considerations

VI.

Recapitalization and Amendment Overview

VII.

Wrap Up / Q&A

Table of Contents

3

Today’s Presenters

4

Norman C. Chambers

Chairman, President & CEO

•

CEO since 2007

•

President Since 2004

•

6 years with NCI

Mark E. Johnson

Chief Financial Officer

•

CFO since 2008

•

Former Chief Accounting Officer

•

3 years with NCI

Nathan Sleeper

Partner

•

9 years with Clayton, Dubilier & Rice, Inc.

NCI Building Systems, Inc.

Clayton, Dubilier & Rice, Inc.

Executive Summary

Norman C. Chambers

Chairman, President & CEO

Executive Summary

6

•

NCI

Building

Systems,

Inc.

(“NCI”

or

the

“Company”)

is

meeting

with

its

lenders

to

discuss

the

final

steps in its recapitalization process

•

Principal objectives for today’s discussion are as follows:

–

Review

proposed

$143

million

pay

down

and

Term

Loan

amendment

in

connection

with

the

proposed

$250

million

equity

investment

transaction

with

a

fund

(the

“CD&R

Fund”)

managed

by

Clayton,

Dubilier

&

Rice,

Inc.

(“CD&R”

or

the “Sponsor”)

–

Provide an update on NCI’s business and recent financial performance

•

The Company has a fundamentally sound business, but it has been facing unprecedented pressure due

to

macroeconomic

conditions

and

its

near-term

debt

payment/repurchase

obligations

1

•

NCI

continues

to

proactively

respond

to

these

challenging

conditions

and

has

already

“right

sized”

its

expense base to meet current demand for its products

–

Specifically, NCI has implemented three phases of cost reductions, reducing total headcount by nearly 40% and

decreasing manufacturing facilities from 43 to 32, resulting in annual fixed cost savings of over $121 million

–

As a result of these cost reduction programs and continued pricing discipline, the Company reported a profitable

fiscal third quarter ended August 2, 2009

•

The

Company

has

also

addressed

its

balance

sheet

maturities

1

by

signing

a

definitive

agreement

with

the CD&R Fund for a $250 million equity investment to recapitalize the Company 

–

Under the terms of this agreement, the Company will issue the CD&R Fund Convertible Participating Preferred

Shares (68.5% ownership position on an as-converted, pro forma basis) in return for the $250 million investment

–

These investment proceeds will be used with a portion of available cash to repay/redeem approximately $323

million of NCI’s existing debt

1

The

existing

$293.3

million

Term

Loan

B

matures

on

June

18,

2010

and

would

be

in

violation

of

debt

covenants

without

the

waiver

that

currently

extends

through

November

6,

2009.

Holders

of

the

Company’s

$180

million

2.125%

Senior

Subordinated

Convertible

Notes

(the

“Notes”)

have

a

put

option

exercisable

on

November

15,

2009

which

can

be

expected

to

be

exercised

if

stock

is

trading

below

$40.14

per

share

(current

stock

price

is

in

the

range

of

$2.00

-

$4.50)

7

•

NCI

is

requesting

an

amendment

to

the

existing

Term

Loan

credit

agreement

to

permit

CD&R’s

equity

investment,

which

will

provide

lenders

with

significant

benefits

and

the

Company

with

the

flexibility

to

manage through the current market conditions and execute on the long-term business plan

–

The revised terms of the Amended and Restated Term Loan B are intended to provide lenders with a substantial,

immediate pay down and significant incremental value while meeting the Sponsor’s equity investment requirements

–

With the participation of all existing Term Loan B lenders, NCI will be able to take the steps necessary to establish a

capital structure that will sustain the Company through the current business cycle

•

The Company recognizes the importance of this transaction and strongly believes that this will result in

the best outcome

•

The partnership with CD&R provides financial and operating support for the business and validates the

Company, the management team and its business plan

•

CD&R’s investment is expressly contingent upon a satisfactory, comprehensive solution to NCI’s debt

structure that enables the Company to manage through the cyclical downturn and position itself for

growth upon an economic recovery

•

NCI is working to close on CD&R’s investment and its overall balance sheet restructuring out of court

–

However, the Company is also requesting that lenders vote in favor of an in-court restructuring plan through which

the Company would seek to effect the CD&R investment if the conditions to complete the out-of-court restructuring

are not met

Executive Summary (cont’d)

The proposed transaction provides lenders with an immediate and substantial par

pay down and the best opportunity to receive a full recovery on their commitments

CD&R Overview

Nathan Sleeper, Partner

Clayton, Dubilier & Rice

CD&R Overview

9

•

Founded in 1978, CD&R is one of the most experienced firms in the private equity community

•

CD&R has managed the investment of over $12 billion in 43 businesses representing a broad range of

industries with aggregate transaction values of approximately $70 billion and cumulative revenues of

over $100 billion

•

The firm is distinguished by its integrated operational and financial approach to private equity investing

and seeks investments in which CD&R’s particular skill set, working in partnership with management,

can create lasting value

•

As with all CD&R investments, one of the Firm’s operating partners, Jim Berges, will have a lead role on

the NCI Board and will work with the management team to add value to the Company’s strategic and

operating initiatives

•

Jim Berges

has significant prior industrial experience through his tenure at Emerson Electric and GE

•

Selected recent CD&R investments include:

Business Update

Norman C. Chambers

Chairman, President & CEO

NCI’s Strategic Positioning

11

Leading Market

Positions and Strong

Brands

Efficient Distribution

Model

High Volume Producer

with Flexible Cost

Structure

Integrated Business

Model Well Positioned

for Growth

Motivated and

Experienced

Management Team

•

Leading market positions in all operating segments

•

High quality, well respected stable of brands marketed through a

broad network of

builders and distributors

•

Large variety of products and services

•

Participates in highly fragmented markets and has attractive spread of risk in terms

of geography, end market applications and customer concentration

•

32 manufacturing plants located throughout North America operated in an efficient

“hub-and-spoke”

network

•

Places manufacturing and distribution operations closer to customers

•

Affiliated builder network and architectural relationships provide substantial and

extended channels to market

•

Each segment uses same type of steel

•

Ability to receive contract pricing without long-term contracts

•

Significant ability to flex manufacturing infrastructure and ESG&A levels in response

to changes in volume

•

Vertically

integrated

producer

enabling

faster

turnaround

times

–

majority

of

orders

are

completed

in

1

–

3

months

•

Positioned to capitalize on material conversion trends and green

initiative

•

Actively pursuing market leading initiatives

•

Significant operating expertise

•

Management averages 17 years of experience in the metal building

manufacturing

industry

•

Proven ability to capitalize on growth opportunities in a good environment and to

execute cost reduction initiatives in a weak demand environment

Operating Income and Adjusted EBITDA

12

With U.S. Non-Residential Activity

Adjusted EBITDA

Operating

Income

a

a

Before Goodwill Amortization for fiscal years 1999-2001

U.S. Non-Residential Activity

Source for U.S. Non-Residential Activity:  McGraw-Hill

(in billions of

Square feet)

(in millions)

Operating Income and Adjusted EBITDA with Steel Pricing

13

Adjusted EBITDA

Operating Income

a

CRU Steel

Price Index

(in millions)

a

Before Goodwill Amortization for fiscal years 1999-2001

The

CRU

North

American

Steel

Price

Index

has

been

published

by

the

CRU

since

1994.

It’s

based

on

a

survey

of

industry

participants

and

is

commonly

used

in

the

settlement

of

physical

and

financial

contracts

within

the

steel

industry.

The

prices

surveyed

are

purchases

for

forward

delivery,

according

to

lead

time,

which

will

vary

by

approximately

two

months.

To

better

align

with

NCI’s

fiscal

year,

the

values

shown

are

from

October

of

each

year.

(1994

Index

=

100)

14

Non-Residential Construction Activity

Non-Residential Market Curve

936

1,405

1,867

800

1,000

1,200

1,400

1,600

1,800

Growth

Rate:

'67

'68

'69

'70

'71

'72

'73

'74

'75

'76

'77

'78

'79

'80

'81

'82

'83

'84

'85

'86

'87

'88

'89

'90

'91

'92

'93

'94

'95

'96

'97

'98

'99

'00

'01

'02

'03

'04

'05

'06

'07

'08

'09

'10

'11

'12

'13

McGraw-Hill

Linear (McGraw-Hill)

15

Steel Pricing

66

269

178

115

0

50

100

150

200

250

300

CRU North America Steel Price Index

•

NCI implemented three phases of cost reductions between Q4 2008 and Q3 2009 that included the

following:

–

Total headcount was reduced by nearly 40% and manufacturing facilities decreased from 43 to

32 with a transition of work to the most efficient operations

–

Overlapping and less efficient operations have been eliminated

–

NCI is utilizing more automation and lean manufacturing tools

–

Short-term idling of select operations

–

Minimal capital spending, only continuing projects involving strategic initiatives

•

Cost reductions of over $121 million are 95% complete

•

Reductions and changes will not impact the Company’s ability to respond to an improving market

–

State of the art insulated panel manufacturing plant in Mississippi continues to be developed on

schedule and is expected to be operational before the end of calendar year 2009

–

2009 capex expected to be approximately $23 million (prior year’s budget was ~$35 million)

Strategic Initiatives / Cost Reductions

16

Facility Reduction Summary

17

Facility Reduction Summary (cont’d)

18

NCI Manufacturing Plants After Reductions

32 Total Manufacturing Facilities

NCI Metal Coil Coating -

5

NCI

Engineered

Building

Systems

-

9

Manufacturing Plants

NCI

Metal

Components

-

18

Financial Overview

Mark E. Johnson

Chief Financial Officer

Historical Financial Summary

Historical Financial Summary

20

($ in millions)

Fiscal Year

LTM

2003

2004

2005

2006

2007

2008

8/2/2009

Revenue

$898.2

$1,084.9

$1,130.1

$1,571.2

$1,625.1

$1,764.2

$1,232.5

% Growth

(5.8%)

20.8%

4.2%

39.0%

3.4%

8.6%

n/a

COGS

700.6

822.7

850.7

1,187.2

1,221.5

1,325.6

999.5

Gross Profit

197.5

262.1

279.4

384.0

403.6

438.5

233.0

% Margin

22.0%

24.2%

24.7%

24.4%

24.8%

24.9%

18.9%

Adjusted EBITDA (a)

$84.0

$128.4

$142.4

$181.2

$176.7

$200.9

$36.1

% Margin

9.3%

11.8%

12.6%

11.5%

10.9%

11.4%

2.9%

Backlog

169.0

153.1

207.2

379.0

451.9

332.4

285.4

Cash

14.2

8.2

200.7

25.0

75.1

68.2

105.4

Senior Secured Debt

123.8

216.7

193.0

315.0

315.0

293.3

293.3

Subordinated / Unsecured Debt

125.0

0.0

180.0

180.0

180.0

180.0

180.0

Other Debt

0.0

0.0

0.0

3.0

2.0

1.1

0.4

Total Debt

248.8

216.7

373.0

498.0

497.0

474.4

473.7

Book Equity

331.8

401.2

444.1

498.4

539.7

623.8

(18.2)

Total Book Capitalization

$580.5

$617.9

$817.1

$996.4

$1,036.7

$1,098.2

$455.5

Key Credit Statistics:

Senior Secured Leverage

1.5x

1.7x

1.4x

1.7x

1.8x

1.5x

8.1x

Total Leverage

3.0x

1.7x

2.6x

2.7x

2.8x

2.4x

13.1x

Total Debt / Book Capitalization

42.9%

35.1%

45.6%

50.0%

47.9%

43.2%

104.0%

(a) Adjusted EBITDA is a non-GAAP financial measure that is calculated based on the terms contained in NCI's senior credit agreement at the

respective dates presented herein.  Adjusted EBITDA excludes charges for goodwill and other asset impairments, lower of cost or market

charges along with subsequently realized losses and stock compensation.  The Company is disclosing adjusted EBITDA, which is a

non-GAAP measure because it is used by management and provided to investors to provide comparability of underlying operational results.

Recent Financial Performance

21

•

NCI returned to profitability in Q3 2009 by reporting quarterly sales of $238.4 million, up

6.1% sequentially from sales of $224.7 million in Q2 2009 but down 50.1% from the

$477.6 million reported for Q3 2008

–

Despite the year-over-year decline in sales, the Company’s gross profit margins continued to

expand from 13.9% in Q2 2009 to 25.6% in Q3 2009 due to pricing discipline and reduced costs

–

Selling, general and administrative expenses declined 9.2% sequentially and 31.9% from Q3

2008 due to the Company’s cost reduction programs

–

Each of the Company’s business segments reported operating profits in Q3 2009, highlighting

the strength of NCI’s market position and the efficiency of its integrated business model

–

Annualized inventory turnover was 8.3x for Q3 2009, compared to 5.3x in Q2 2009 and 7.4x in

Q3 2008

•

The Company generated net cash from operating activities of approximately $35.3

million

in

Q3

2009,

which

contributed

to

the

end

of

quarter

cash

balance

of

$105.4

million

•

NCI’s Buildings group backlog was $285.4 million at August 2, 2009, an increase over

the Q2 2009 backlog on a steel price-adjusted basis

As a result of cost reduction programs and continued pricing discipline, the

Company reported a profitable Q3 2009 and generated over $35 million in cash flow

Cost Reduction Summary

22

Cost Reduction Summary

($ 000s)

Cost Reduction

Headcount Reduction

Fixed

Direct Variable

Total Cost

% of

Costs

Costs

(1)

Savings

% Change

Number

Total

By Segment

Buildings

($88,205)

($402,473)

($490,678)

(51.1%)

1,530

41.8%

Components

(23,016)

(188,524)

(211,540)

(40.8%)

547

36.7%

Coaters

(2,321)

(29,745)

(32,066)

(47.5%)

40

10.3%

Corporate

(7,703)

(7,019)

(14,722)

(22.8%)

61

25.3%

Total

($121,245)

($627,761)

($749,006)

(46.5%)

2,178

37.7%

By Cost Line Item

Cost of Goods

($71,250)

($583,173)

($654,423)

(49.4%)

1,619

43.3%

Engineering

(19,004)

(4,078)

(23,082)

(42.8%)

217

33.0%

SG&A

(30,991)

(40,510)

(71,501)

(31.0%)

342

24.7%

Total

($121,245)

($627,761)

($749,006)

(46.5%)

2,178

37.7%

(1)

Direct variable costs include such items as Bonus, Commission, Materials, etc that will vary based on NCI's performance without any other action

23

Business Plan Overview

•

The attached model output reflects management’s projections for fiscal years 2009

through 2012

–

The projections incorporate CD&R’s equity investment and the overall balance sheet

restructuring

•

NCI made the following assumptions to generate its financial projections:

–

Revenue:  Calculated based on forecasted volume of product shipped multiplied by expected

sales prices.  The Company’s forecast of non-residential construction activity is similar to the

McGraw-Hill 3Q 2009 non-residential construction forecast as measured in square feet, which

projects construction starts measured in square feet to change by -34.8%, -3.3%, +18.4% and

+29.4% in 2009, 2010, 2011 and 2012, respectively

–

Gross Profit:  Calculated based on estimated raw material input costs, expected levels of plant

capacity utilization and expected mark-ups over material cost inputs.  Steel costs in 2010 are

projected

to

remain

consistent

with

the

average

cost

incurred

in

the

last

half

of

2009;

steel

costs

for 2011 and 2012 are projected to be moderately higher than those experienced in 2010 based

on expected steel demand increases

–

Selling,

General,

and

Administrative

Expenses:

Calculated

based

on

historical

expense

structures after giving effect to cost reduction initiatives that were completed during 2009

–

Interest and Other Expense, Net:  Calculated based on the terms of the amended credit

agreement and ABL credit agreement as presented in this presentation

•

As a result, revenue and Adjusted EBITDA are projected to decrease by 46%, and 82%

in 2009, respectively, before beginning to recover in fiscal year 2011

24

Projected Financial Results –

Income Statement

Income Statement Projections

($ in thousands)

Total

Total

Total

Total

FY2009

FY2010

FY2011

FY2012

Sales (External)

$961

$861

$1,084

$1,331

Growth (%)

(45.5%)

(10.4%)

25.9%

22.8%

Cost of sales

800

671

832

996

Gross Profit

$161

$190

$252

$335

Gross Profit (%)

16.8%

22.1%

23.2%

25.2%

SG&A Costs

$221

$189

$215

$242

Goodwill and other intangible asset impairment

623

-

-

-

Restructuring charge

8

-

-

-

Total Operating Expenses

$852

$189

$215

$242

Operating Expenses (%)

88.7%

22.0%

19.8%

18.2%

Operating Income

($691)

$1

$37

$93

Operating Income (%)

(71.9%)

0.1%

3.4%

7.0%

Interest income (expense), net

(22)

(16)

(13)

(13)

Debt extinguishment and refinancing costs (a)

(103)

-

-

-

Other Income/(Expense)

1

1

1

1

Earnings Before Tax

($815)

($14)

$25

$81

Income Tax

57

6

(9)

(31)

Net Income

($758)

($8)

$16

$50

Depreciation/Amortization

33

29

31

29

Stock Compensation

16

5

5

5

Interest & Taxes

68

10

21

43

Restructuring Charges

14

Goodwill Impairment

623

LCM Inventory Reserve

40

Adjusted EBITDA (b)

$36

$36

$73

$127

(a) The loss on debt restructuring is highly dependent on the Company's stock price at the date of close. This estimate was based on the Company's stock price of $2.61 near the

time of the S-4 filing date. While primarily a non-cash charge, the amount is likely to vary significantly based on fluctuations in the Company's stock price between now and the date of close.

(b) Adjusted EBITDA is a non-GAAP financial measure that is calculated based on the terms contained in the proposed amended senior credit agreement.  

Adjusted EBITDA excludes charges for goodwill and other asset impairments, lower of cost or market charges along with subsequently realized losses and stock compensation. 

The Company is disclosing adjusted EBITDA, which is a non-GAAP measure because it is used by management and provided to investors to provide comparability of underlying 

operational results.

Closing Considerations

Norman C. Chambers

Chairman, President and CEO

Closing Considerations

26

•

NCI continues to proactively respond to challenging market conditions and

downward pressure on its business brought on by the economic downturn

–

The Company has “right sized”

its expense base to meet current demand for its

products

–

The

Company

is

also

proactively

addressing

its

capital

structure

and

liquidity

needs

–

After many months of exploring a broad range of solutions, management, with the

support

of

the

Board

of

Directors,

is

confident

it

has

found

the

best

solution

to

help

the Company continue to navigate through an extremely difficult macroeconomic

environment

•

CD&R’s $250 million equity investment provides NCI with the ability to manage

through the cyclical downturn and create long-term value for all constituencies

With the participation of all existing Term Loan B lenders, NCI will be able to

take the necessary steps to establish a capital structure that will sustain the Company

through the current business cycle and grow once the economy recovers

Recapitalization and Amendment Overview

Richard Bosek, Managing Director

Wells Fargo Securities

28

•

Management signed a definitive agreement with the CD&R Fund for a $250 million equity investment in the Company through the

purchase of newly issued Convertible Participating Preferred Shares

•

In addition, NCI is in the final stages of concluding an agreement for a new 5-year, $125 million asset-based revolving credit facility

(the “ABL Revolver”)

•

The

Company

intends

to

use

the

proceeds

of

the

equity

investment

to:

–

Repay $143.3 million of existing Term Loan B at par

–

Redeem its existing Notes with a combination of cash and equity via an exchange offer

•

For each $1,000 note, the Company is offering a combination of $500 in cash and 390 shares of NCI common stock

•

The exchange offer launched on September 10, 2009 via an S-4 Registration Statement

–

At the close of the transaction, NCI anticipates having approximately $63 million of cash on its balance sheet

•

As part of the recapitalization, the Company is offering a 200 bps consent/amendment fee and requesting that lenders agree to

modify certain terms of the existing credit agreement to include:

–

Reset

initial

pricing

on

the

Amended

and

Restated

Term

Loan

B

to

L

+

500

bps

with

a

LIBOR

floor

of

2.00%;

additional

step-

ups to pricing provided if the Company does not meet a specific amortization schedule

–

Extend the maturity of the Amended and Restated Term Loan B to five years from the closing date of the transaction

–

Subordinate existing liens on the working capital assets to allow for the new ABL Revolver

–

Modify

other

terms

as

outlined

in

the

Summary

Terms

&

Conditions

attached

herein

Recapitalization and Amendment Overview

CD&R’s investment and the ABL Revolver are conditioned upon successfully

refinancing the Term Loan and completing the overall balance sheet restructuring

Sources and Uses / Pro Forma Capitalization

29

Sources & Uses

Pro Forma Capitalization

($ in millions)

Pro Forma

Cumulative

Capitalization

Multiple of

$

%

EBITDA ¹

Cash

$63.1

$125 million ABL Revolver ²

$0.0

0.0%

Amended and Restated Term Loan B

150.0

35.9%

Total Senior Secured Debt

150.0

35.9%

4.2x

Other Debt

0.4

0.1%

Total Debt

150.4

36.0%

4.2x

Series B Convertible Preferred Stock ³

212.6

50.9%

Total Stockholders' Equity

54.5

13.1%

Total Capitalization

$417.5

100.0%

1

Based on LTM 8/2/09 Adjusted EBITDA of:

$36.1

2

Excludes approximately $12.4 million outstanding Letters of Credit

3

Net of certain transaction costs and derivative liability related to default dividends rates

($ in millions)

Sources

Uses

Cash and Other Sources

$42.3

Paydown

of Term Loan B

$143.3

Series B Convertible Preferred Stock

250.0

Repay Convertible Notes

90.0

Estimated Fees and Expenses

59.0

Total Sources

$292.3

Total Uses

$292.3

Summary Terms & Conditions

30

Borrower:

NCI Building Systems, Inc. (the “Borrower”)

Guarantors:

All existing and future, direct and indirect, wholly-owned material domestic subsidiaries

Facilities:

$150 million Term Loan B (the “Term Loan”)

Initial Pricing:

L + 500 bps

-

LIBOR floor of 2.00%

-

Offer 200 bps consent / amendment fee

Pricing

Step-up

Mechanism:

Beginning

with

fiscal

Q2

2012,

the

pricing

on

the

Term

Loan

will

increase

by

25

basis

points

on

the first day of each fiscal quarter of the Borrower unless the aggregate principal amount of the

Term Loan has been reduced by $3.75 million

-

All previous term loan payments, other than the scheduled 1% amortization

payments, are credited for this purpose

Maturity Date:

5 years from the closing of the transaction

Amortization:

1% / 1% / 1% / 1% / 96%

Security:

1

st

priority

security

interest

in

substantially

all

of

the

material

Property,

Plant

and

Equipment

of

the Borrower and Guarantors and substantially all other assets of the Borrower not encumbered

by a 1st priority security interest from the ABL Revolver (subject in each case to usual and

customary

carve-outs);

2nd

priority

security

interest

in

all

assets

in

which

the

ABL

Revolver

maintains a 1st priority security interest

Amended and Restated Term Loan B

Summary Terms & Conditions

31

Financial Covenant:

Covenant Cure:

The Company has the option to waive the application of a quarterly covenant calculation with a

voluntary term loan amortization payment of $3.75 million paid by the last day on which the

financial statements for such period are required to be delivered

-

All previous term loan payments, other than the scheduled 1% amortization

payments, are credited for this purpose

Mandatory Prepayments:

Including but not limited to:

-

Annual Excess Cash Flow Sweep:

-

50% if Consolidated Leverage Ratio > 4.0x

-

0% if Consolidated Leverage Ratio < 4.0x

-

100% of permitted issuances of Senior Notes

-

50% of subordinated indebtedness

-

100%

of

Asset

Sales

or

Recovery

Events

subject

to

reinvestment

provisions

Amended and Restated Term Loan B (cont’d)

Four Fiscal Quarter Period Ending

Consolidated Leverage Ratio

October 30, 2011

5.00x

January 29, 2012

4.75x

April 29, 2012

4.50x

July 29, 2012

4.25x

October 28, 2012

4.00x

January 27, 2013

3.875x

April 28, 2013

3.75x

July 28, 2013

3.625x

3.50x

November 3, 2013 and each fiscal

quarter end date thereafter

32

Negative Covenants:

Including but not limited to the following:

Limitations on Indebtedness:

-

So long as Consolidated Leverage Ratio < 4.0x:

-

Up to $50 million in incremental term loans

-

Permitted senior notes subject to 100% mandatory prepayment

-

Permitted subordinated debt subject to 50% mandatory prepayment

-

Maximum indebtedness pursuant to ABL (including letters of credit not cash

collateralized) of $100 million

Limitations on Restricted Payments:

-

After the fiscal year ended October 31, 2010, so long as Consolidated Leverage

Ratio < 4.0x, cash pay on convertible preferred stock permitted

-

Other permitted Restricted Payments

Conditions Precedent

to Closing:

Including but not limited to:

-

Closing and funding CD&R’s equity investment

-

Successful redemption or retirement of the tendered Notes

-

Minimum $125 million of commitments to the ABL Revolver

-

Lenders receive prepayment of no less than approximately $143 million principal amount of

the Term Loan outstanding together with accrued and unpaid interest

-

Other customary conditions

Summary Terms & Conditions

Amended and Restated Term Loan B (cont’d)

The Company is requesting that all lenders participate on a pro rata basis

33

•

The Company is proposing to effect its financial restructuring through one of two approaches:

–

An out-of-court restructuring (the “Recapitalization Plan”), which consists of the proposed equity investment, the

new $125 million ABL Revolver, a $150 million Amended and Restated Term Loan B, and the exchange offer for

the Notes, OR

–

An in-court financial restructuring (the “Prepackaged Plan”) through which the Company would seek to accomplish

the results contemplated by the Recapitalization Plan through the effectiveness of a prepackaged plan of

bankruptcy

•

The

Company

is

seeking

approval

of

the

proposed

credit

agreement

as

well

as

votes

in

favor

of

the

Prepackaged Plan to the extent that the Company is unable to achieve the following affirmative votes for

the Recapitalization Plan

–

100% of the lenders to the existing Term Loan B

–

95% of the holders of the Notes

•

For the Prepackaged Plan to be confirmed by the bankruptcy court, each class of claims must vote to

accept the Prepackaged Plan

–

Each

class

of

claims

is

deemed

to

accept

the

plan

if

the

holders

of

at

least

two-thirds

(2/3)

in

amount

and

more

than

one-half (1/2) in number of the claims in the applicable class who actually cast ballots vote to accept the

prepackaged plan

•

The Company has entered into a lock-up and voting agreement (the “Lock-up Agreement”) with the

holders of over 79% of the aggregate principal amount of the Company’s Notes, in which these holders

have agreed to tender their notes in the exchange offer

–

Additionally, holders who entered into the Lock-up Agreement agreed to support the proposed Amended and

Restated Term Loan B to the extent that they own a portion of the existing Term Loan B

Recapitalization and Amendment Summary

34

Timeline

Key Events

Event:

Date:

Bank Meeting

9/15/2009

Lender Signature Pages Due

9/29/2009

Expiration of Exchange Offer

10/7/2009

September

October

S

M

T

W

T

F

S

S

M

T

W

T

F

S

1

2

3

4

5

1

2

3

6

7

8

9

10

11

12

4

5

6

7

8

9

10

13

14

15

16

17

18

19

11

12

13

14

15

16

17

20

21

22

23

24

25

26

18

19

20

21

22

23

24

27

28

29

30

25

26

27

28

29

30

31

Denotes Key Timeline Event

Denotes Holiday

2009

2009

Wrap Up / Q&A

NCI Building Systems, Inc.

10943 N. Sam Houston Parkway West

Houston, Texas 77064

281.897.7788

NYSE Symbol: NCS

www.ncilp.com