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) Stock Up on Q2 Earnings and Sales Beat
Read MoreHide Full Article
Shares of NCI Building Systems Inc. gained around 2.5% yesterday after the company reported results for the second quarter (ended May 1, 2016) of fiscal 2016. It posted adjusted earnings of 4 cents per share in the quarter, which reversed from a loss of 6 cents in the prior-year quarter. Earnings also came ahead of the Zacks Consensus Estimate of breakeven results. Despite volatile seasonal patterns and slow recovery innon-residential market, earnings were driven by internal improvements in its commercial, manufacturing and supply chain groups.
The company reported earnings per share of 3 cents against a loss of 10 cents a share in the prior-year quarter, including one-time items.
Operational Update
Sales rose 3.4% year over year to $372 million in the quarter, surpassing the Zacks Consensus Estimate of $363 million. The growth was boosted by increased volumes across all three segments.
Cost of sales decreased to $283.8 million from $284.3 million in the year-ago quarter. Adjusted gross profit grew 16.5% year over year to $88.4 million. Consequently, adjusted gross margin expanded 270 basis points to 23.8% in the quarter, accelerated by consistent focus on commercial discipline, supply chain effectiveness and higher plant utilization.
Engineering, selling, general and administrative expenses increased 2.2% to $74.6 million, mainly due to increased volume which led to higher selling cost and higher incentive compensation charges. The company reported adjusted operating income of $11.4 million, which surged seven times from $1.6 million in the prior-year quarter led by improved gross margins.
Segment Performance
Revenues at the Engineered Building Systems segment declined to $134.5 million from $138.7 million in the year-ago quarter. The segment reported adjusted operating income of $6.4 million, significantly higher from $3.6 million in the year-ago quarter.
Metal Coil Coating reported revenues of $26.1 million, up 14.6% year over year. Adjusted operating profit grew 79% year over year to $4.7 million, supported by increased operating leverage on higher total volumes processed, combined with cost reductions from restructuring efforts.
The Metal Component segment’s revenues increased 6.5% year over year to $211.7 million led by the continued strength of the legacy metal component product lines. On an adjusted basis, operating profit increased 73% year over year to $18.5 million, driven by a combination of effective supply chain management and commercial discipline. Greater efficiencies as a result of the reorganization in manufacturing also supported growth in operating profit.
Financial Update
At the end of the second quarter of fiscal 2016, NCI Building had cash and cash equivalents of $77.9 million compared with $99.7 million as of Nov 1, 2015. The company reported cash from operations of $20 million in the six-month period ending May 1, 2016, compared with cash usage of $3.3 million in the comparable year-ago period. Long-term debt was $424 million as of May 1, 2016, compared with $444 million as of Nov 1, 2015. NCI Building’s consolidated backlog increased 5.7% to $533.4 million at the end of the quarter.
Outlook
Though management did not provide any specific guidance for fiscal 2016, NCI Building continues to expect 2016 to be better than 2015 in terms of both gross margin and adjusted EBITDA. The company also anticipates second-half fiscal 2016 performance to be stronger than the first half due to seasonality.
Headquartered in Texas, NCI Building Systems is a leading integrated manufacturer of metal products in the North American non-residential construction industry.
Currently, NCI Building carries a Zacks Rank #3 (Hold). Some better-ranked stocks worth considering in the same sector include Installed Building Products, Inc. (IBP - Free Report) , Simpson Manufacturing Co., Inc. (SSD - Free Report) and TopBuild Corp. (BLD - Free Report) . All three stocks sport a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
NCI Building (NCS) Stock Up on Q2 Earnings and Sales Beat
Shares of NCI Building Systems Inc. gained around 2.5% yesterday after the company reported results for the second quarter (ended May 1, 2016) of fiscal 2016. It posted adjusted earnings of 4 cents per share in the quarter, which reversed from a loss of 6 cents in the prior-year quarter. Earnings also came ahead of the Zacks Consensus Estimate of breakeven results. Despite volatile seasonal patterns and slow recovery innon-residential market, earnings were driven by internal improvements in its commercial, manufacturing and supply chain groups.
The company reported earnings per share of 3 cents against a loss of 10 cents a share in the prior-year quarter, including one-time items.
Operational Update
Sales rose 3.4% year over year to $372 million in the quarter, surpassing the Zacks Consensus Estimate of $363 million. The growth was boosted by increased volumes across all three segments.
Cost of sales decreased to $283.8 million from $284.3 million in the year-ago quarter. Adjusted gross profit grew 16.5% year over year to $88.4 million. Consequently, adjusted gross margin expanded 270 basis points to 23.8% in the quarter, accelerated by consistent focus on commercial discipline, supply chain effectiveness and higher plant utilization.
Engineering, selling, general and administrative expenses increased 2.2% to $74.6 million, mainly due to increased volume which led to higher selling cost and higher incentive compensation charges. The company reported adjusted operating income of $11.4 million, which surged seven times from $1.6 million in the prior-year quarter led by improved gross margins.
Segment Performance
Revenues at the Engineered Building Systems segment declined to $134.5 million from $138.7 million in the year-ago quarter. The segment reported adjusted operating income of $6.4 million, significantly higher from $3.6 million in the year-ago quarter.
Metal Coil Coating reported revenues of $26.1 million, up 14.6% year over year. Adjusted operating profit grew 79% year over year to $4.7 million, supported by increased operating leverage on higher total volumes processed, combined with cost reductions from restructuring efforts.
The Metal Component segment’s revenues increased 6.5% year over year to $211.7 million led by the continued strength of the legacy metal component product lines. On an adjusted basis, operating profit increased 73% year over year to $18.5 million, driven by a combination of effective supply chain management and commercial discipline. Greater efficiencies as a result of the reorganization in manufacturing also supported growth in operating profit.
Financial Update
At the end of the second quarter of fiscal 2016, NCI Building had cash and cash equivalents of $77.9 million compared with $99.7 million as of Nov 1, 2015. The company reported cash from operations of $20 million in the six-month period ending May 1, 2016, compared with cash usage of $3.3 million in the comparable year-ago period. Long-term debt was $424 million as of May 1, 2016, compared with $444 million as of Nov 1, 2015. NCI Building’s consolidated backlog increased 5.7% to $533.4 million at the end of the quarter.
Outlook
Though management did not provide any specific guidance for fiscal 2016, NCI Building continues to expect 2016 to be better than 2015 in terms of both gross margin and adjusted EBITDA. The company also anticipates second-half fiscal 2016 performance to be stronger than the first half due to seasonality.
Headquartered in Texas, NCI Building Systems is a leading integrated manufacturer of metal products in the North American non-residential construction industry.
Currently, NCI Building carries a Zacks Rank #3 (Hold). Some better-ranked stocks worth considering in the same sector include Installed Building Products, Inc. (IBP - Free Report) , Simpson Manufacturing Co., Inc. (SSD - Free Report) and TopBuild Corp. (BLD - Free Report) . All three stocks sport a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>