We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
NCI Building (NCS) Q1 Earnings in Line, Revenues Up Y/Y
Read MoreHide Full Article
NCI Building Systems, Inc. posted adjusted earnings of 5 cents per share for first-quarter fiscal 2017 (ended Jan 29, 2017), down 28% from the prior-year quarter. Earnings came in line with the Zacks Consensus Estimate.
Including one-time items, the company reported earnings per share of 3 cents compared to 8 cents a share recorded in the prior-year quarter.
Operational Update
Sales rose 5.9% year over year to $391.7 million in the quarter and also surpassed the Zacks Consensus Estimate of $381 million. The year-over-year growth was bolstered by an improvement in underlying tonnage volumes and increased pricing.
NCI Building Systems, Inc. Price, Consensus and EPS Surprise
Cost of sales increased 9.5% year over year to $307.7 million from $281 million in the year-ago quarter. Gross profit dipped 6.4% year over year to $83.9 million. Consequently, gross margin contracted 280 basis points to 21.4% in the quarter, affected by rapidly rising steel input costs, combined with a less favorable product mix, in the Components segment.
Engineering, selling, general and administrative expenses edged down 1.3% to $69 million, mainly owing to lower year-over-year incentive compensation and cost-reduction initiatives. The company reported adjusted operating income of $12.5 million, which declined around 25% from $16.7 million in the year-ago period.
Segment Performance
Revenues at the Building Systems segment inched up 1.5% to $151 million from $149 million in the year-earlier quarter. The segment reported adjusted operating income of $8.4 million, a 31% plunge from $26.4 million in the year-ago quarter.
The Coatings division reported revenues of $64.2 million, up 25.4% year over year. Adjusted operating profit declined 8.8% year over year to $5.2 million.
The Component segment’s revenues climbed 6.4% year over year to $245.3 million. On an adjusted basis, operating profit decreased 2.5% year over year to $16.3 million.
Financial Update
NCI Building ended the quarter with cash and cash equivalents of $15.8 million, compared with $73.8 million at the end of the prior-year quarter. The company generated cash used in operations of $31.9 million for fiscal first quarter compared with cash usage of $4.2 million in the year-ago quarter. Long-term debt was $394 million as of Jan 29, 2017, compared with $404 million as of Oct 31, 2016.
NCI Building’s consolidated backlog advanced 10.3% year over year to $527 million at the end of the reported quarter, driven by increased demand for legacy and insulated metal panel products.
Outlook
For fiscal 2017, NCI Building reaffirmed its revenue guidance range of $1.75–$1.85 billion and adjusted EBITDA range of $175–$205 million. The company expects 2017 to be a better year than 2016 in terms of revenues and adjusted EBITDA. Its cost-saving initiatives and opportunities to expand the IMP product lines are likely to drive growth for the company.
The company's cost-saving initiatives in manufacturing consolidation and ESG&A are projected to generate $30–$40 million in cost savings by the end of 2018. During fiscal 2017, these two initiatives are anticipated to generate an incremental $10 million in cost savings.
For second-quarter fiscal 2017, NCI Building estimates revenues to be in the range of $400– $425 million and gross profit margins to be in the range of 22.5–24.5%. The company anticipates growth in its businesses during fiscal second quarter, which will aid in achieving its top- and bottom-line financial targets for fiscal 2017. Strength of internal economic indicators, steel pricing trends, and growth in bookings and backlog will also drive growth.
Share Price Performance
In the last one year, NCI Building has underperformed the Zacks classified Building & Construction Production-Miscellaneous sub-industry with respect to price performance. The stock gained around 26.6%, while the industry rose 33.5% over the same time frame.
Zacks Rank & Key Picks
NCI Building currently carries a Zacks Rank #3 (Hold).
Dycom Industries has an expected long-term EPS growth rate of 14%. Louisiana-Pacific has an average earnings surprise of 66.28% for the last four quarters, while Owens Corning has an average earnings surprise of 35.13% for the past four quarters.
8 Stocks with Huge Profit Potential
Just released: Driverless Cars: Your Roadmap to Mega-Profits Today. In this latest Special Report, Zacks’ Aggressive Growth Strategist Brian Bolan explores a full-blown technological breakthrough in the making – autonomous cars. He also spotlights 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
NCI Building (NCS) Q1 Earnings in Line, Revenues Up Y/Y
NCI Building Systems, Inc. posted adjusted earnings of 5 cents per share for first-quarter fiscal 2017 (ended Jan 29, 2017), down 28% from the prior-year quarter. Earnings came in line with the Zacks Consensus Estimate.
Including one-time items, the company reported earnings per share of 3 cents compared to 8 cents a share recorded in the prior-year quarter.
Operational Update
Sales rose 5.9% year over year to $391.7 million in the quarter and also surpassed the Zacks Consensus Estimate of $381 million. The year-over-year growth was bolstered by an improvement in underlying tonnage volumes and increased pricing.
NCI Building Systems, Inc. Price, Consensus and EPS Surprise
NCI Building Systems, Inc. Price, Consensus and EPS Surprise | NCI Building Systems, Inc. Quote
Cost of sales increased 9.5% year over year to $307.7 million from $281 million in the year-ago quarter. Gross profit dipped 6.4% year over year to $83.9 million. Consequently, gross margin contracted 280 basis points to 21.4% in the quarter, affected by rapidly rising steel input costs, combined with a less favorable product mix, in the Components segment.
Engineering, selling, general and administrative expenses edged down 1.3% to $69 million, mainly owing to lower year-over-year incentive compensation and cost-reduction initiatives. The company reported adjusted operating income of $12.5 million, which declined around 25% from $16.7 million in the year-ago period.
Segment Performance
Revenues at the Building Systems segment inched up 1.5% to $151 million from $149 million in the year-earlier quarter. The segment reported adjusted operating income of $8.4 million, a 31% plunge from $26.4 million in the year-ago quarter.
The Coatings division reported revenues of $64.2 million, up 25.4% year over year. Adjusted operating profit declined 8.8% year over year to $5.2 million.
The Component segment’s revenues climbed 6.4% year over year to $245.3 million. On an adjusted basis, operating profit decreased 2.5% year over year to $16.3 million.
Financial Update
NCI Building ended the quarter with cash and cash equivalents of $15.8 million, compared with $73.8 million at the end of the prior-year quarter. The company generated cash used in operations of $31.9 million for fiscal first quarter compared with cash usage of $4.2 million in the year-ago quarter. Long-term debt was $394 million as of Jan 29, 2017, compared with $404 million as of Oct 31, 2016.
NCI Building’s consolidated backlog advanced 10.3% year over year to $527 million at the end of the reported quarter, driven by increased demand for legacy and insulated metal panel products.
Outlook
For fiscal 2017, NCI Building reaffirmed its revenue guidance range of $1.75–$1.85 billion and adjusted EBITDA range of $175–$205 million. The company expects 2017 to be a better year than 2016 in terms of revenues and adjusted EBITDA. Its cost-saving initiatives and opportunities to expand the IMP product lines are likely to drive growth for the company.
The company's cost-saving initiatives in manufacturing consolidation and ESG&A are projected to generate $30–$40 million in cost savings by the end of 2018. During fiscal 2017, these two initiatives are anticipated to generate an incremental $10 million in cost savings.
For second-quarter fiscal 2017, NCI Building estimates revenues to be in the range of $400– $425 million and gross profit margins to be in the range of 22.5–24.5%. The company anticipates growth in its businesses during fiscal second quarter, which will aid in achieving its top- and bottom-line financial targets for fiscal 2017. Strength of internal economic indicators, steel pricing trends, and growth in bookings and backlog will also drive growth.
Share Price Performance
In the last one year, NCI Building has underperformed the Zacks classified Building & Construction Production-Miscellaneous sub-industry with respect to price performance. The stock gained around 26.6%, while the industry rose 33.5% over the same time frame.
Zacks Rank & Key Picks
NCI Building currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the sector include Dycom Industries, Inc. (DY - Free Report) , Louisiana-Pacific Corporation (LPX - Free Report) and Owens Corning (OC - Free Report) . All three stocks boast a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Dycom Industries has an expected long-term EPS growth rate of 14%. Louisiana-Pacific has an average earnings surprise of 66.28% for the last four quarters, while Owens Corning has an average earnings surprise of 35.13% for the past four quarters.
8 Stocks with Huge Profit Potential
Just released: Driverless Cars: Your Roadmap to Mega-Profits Today. In this latest Special Report, Zacks’ Aggressive Growth Strategist Brian Bolan explores a full-blown technological breakthrough in the making – autonomous cars. He also spotlights 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now >>