Tuesday, NCI Building Systems, Inc. (NCS) slipped to a loss in the fourth quarter, compared to a profit in the year-ago period, mainly due to a 52% decline in sales and significant refinancing costs and repayment of debt.
In the fourth quarter, the company reported net loss of $115.3 million or $3.59 per share, compared to net profit of $24.6 million or $1.26 per share in the year-ago period. This year's results include a non-cash debt extinguishment and refinancing costs of $99.2 million. Excluding these items, net income was $333,000 or $0.04 per share.
Since the company is acquiring its existing convertible notes in exchange for approximately $90 million in cash and 70.2 million of its common shares, the weighted average number of common shares outstanding increased to 90.4 million shares from 29.65 million shares.
For the fourth quarter, sales crashed by 52% to $244.4 million from $508.9 million in the prior-year period. Segment-wise, Metal coil coating sales decreased 38.4% to $44.61 million from $72.47 million, metal components sales declined by 39.3% to $122.48 million from $201.87 million, engineered building systems sales fell by 60.9% to $129.56 million from $331.76 million in the year-ago period. However, intersegment sales loss narrowed by 46.2% to $52.26 million from a sales loss of $97.19 million in the year-earlier quarter.
The company said that non-residential construction activity measured in square feet declined significantly from the comparable period in 2008. McGraw Hill reported that new construction activity measured in square feet was down 47% calendar year to date through October compared to 2008 levels, and NCI's traditionally strong commercial and industrial markets were off approximately 60% as reflected in McGraw-Hill's October report.
NCI Building Systems' gross profit halved to $60.64 million from $124.21 million, while gross margin was at 24.8%, compared to 24.4% in last year's fourth quarter.
Fourth-quarter capital expenditure was $3.8 million and full year capital expenditures was $21.7 million, inclusive of the $14.1 million investment in NCI's new insulated panel plant. Fiscal 2010 capital expenditure is expected to be between $10 million and $12 million.
For the full-year, NCI Building Systems net loss was $760.17 million or $33.58 per share, compared to a profit of $78.81 million or $4.05 per share in the year-ago period. Sales plunged to $967.92 million from $1.76 billion.
With regard to financing, NCI Building Systems received a $250 million equity investment from Clayton, Dubilier & Rice, Inc. managed funds this October. The company has also refinanced its existing term loan by repaying approximately $143 million, modified the terms and maturity of the remaining $150 million of debt and entered into a $125 million asset-based revolving credit facility, which remains undrawn.
Looking ahead, Chambers, said, "Industry forecasts do not indicate any meaningful pick-up in nonresidential construction activity in 2010. Within what promises to be a continued difficult business environment, we will focus on retaining and building upon our market leadership positions through greater investment in technology and systems to support our builder network while reducing costs and delivery times; continuing to develop new products, and expanding our end markets; and potentially making selective acquisitions."
NCS closed Tuesday's regular trading session at $2.02, down $0.07 or 3.35% on the NYSE.
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