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) Beats Q3 Earnings & Revenue Estimates
Read MoreHide Full Article
NCI Building Systems Inc. posted adjusted earnings of 33 cents per share for the third quarter of fiscal 2016 (ended Jul 31, 2016), which is a surge of 120% from 15 cents in the prior-year quarter. Earnings comfortably beat the Zacks Consensus Estimate of 26 cents.
Including one-time items, the company reported earnings per share of 32 cents compared to 10 cents a share in the prior-year quarter.
Operational Update
Sales rose 9.9% year over year to $462 million in the quarter, which came in line with the management’s guidance range of between $458 million and $469 million. Revenues also surpassed the Zacks Consensus Estimate of $454 million. The year over year growth was boosted by increased volumes across all three segments.
Cost of sales increased to $334.5 million from $319 million in the year-ago quarter. Gross profit grew 25.8% year over year to $127.9 million. Consequently, gross margin expanded 350 basis points to 27.7% in the quarter, accelerated by increased operating leverage from higher volumes complemented by a continued focus on commercial discipline, supply chain effectiveness and manufacturing efficiency.
Engineering, selling, general and administrative expenses increased 7.9% to $80.4 million, mainly due to higher incentive compensation charges and higher selling costs resulting from increased volume. The company reported adjusted operating income of $45.1 million, which surged around 79% from $25.2 million in the prior-year quarter led by improved revenues and gross profit margins.
Segment Performance
Revenues at the Building Systems segment increased to $175.5 million from $172.2 million in the year-ago quarter. The segment reported adjusted operating income of $19.6 million, a 35.3% rise from $14.5 million in the year-ago quarter.
The Coatings division reported revenues of $30.7 million, up 15.3% year over year. Adjusted operating profit improved 59% year over year to $8.7 million, supported by increased operating leverage from higher total volumes processed.
The Component segment’s revenues increased 15.4% year over year to $256 million led by both the traditional metal component product lines and the insulated metal panel products. On an adjusted basis, operating profit increased 75% year over year to $37.8 million, driven by a combination of effective supply chain management and commercial discipline as well as an improving product mix in insulated metal panels.
Financial Update
At the end of the third quarter of fiscal 2016, NCI Building had cash and cash equivalents of $50.7 million compared with $99.7 million as of Nov 1, 2015. The company reported cash from operations of $40.6 million for the nine-month period ended Jul 31, 2016 compared with $38.6 million in the comparable year-ago period. Long-term debt was $414 million as of Jul 31, 2016, compared with $444 million as of Nov 1, 2015. NCI Building’s consolidated backlog increased 10% to $557.5 million at the end of the quarter.
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 revenues, gross margin and adjusted EBITDA. The company however anticipates a somewhat muted sequential increase from the fiscal third quarter to fiscal fourth quarter results, as compared to its historical seasonal pattern.
Headquartered in Texas, NCI Building Systems is a leading integrated manufacturer of metal products in the North American non-residential construction industry.
Zacks Rank
Currently, NCI Building carries a Zacks Rank #2 (Buy).
Other well-placed stocks worth considering in the same industry include Gibraltar Industries, Inc. (ROCK - Free Report) , Trex Co. Inc. (TREX - Free Report) and Caesarstone Ltd. (CSTE - Free Report) . While Gibraltar Industries and Trex, each, sport a Zacks Rank #1 (Strong Buy), Caesarstone holds the same rank as NCI Building.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
NCI Building (NCS) Beats Q3 Earnings & Revenue Estimates
NCI Building Systems Inc. posted adjusted earnings of 33 cents per share for the third quarter of fiscal 2016 (ended Jul 31, 2016), which is a surge of 120% from 15 cents in the prior-year quarter. Earnings comfortably beat the Zacks Consensus Estimate of 26 cents.
Including one-time items, the company reported earnings per share of 32 cents compared to 10 cents a share in the prior-year quarter.
Operational Update
Sales rose 9.9% year over year to $462 million in the quarter, which came in line with the management’s guidance range of between $458 million and $469 million. Revenues also surpassed the Zacks Consensus Estimate of $454 million. The year over year growth was boosted by increased volumes across all three segments.
Cost of sales increased to $334.5 million from $319 million in the year-ago quarter. Gross profit grew 25.8% year over year to $127.9 million. Consequently, gross margin expanded 350 basis points to 27.7% in the quarter, accelerated by increased operating leverage from higher volumes complemented by a continued focus on commercial discipline, supply chain effectiveness and manufacturing efficiency.
Engineering, selling, general and administrative expenses increased 7.9% to $80.4 million, mainly due to higher incentive compensation charges and higher selling costs resulting from increased volume. The company reported adjusted operating income of $45.1 million, which surged around 79% from $25.2 million in the prior-year quarter led by improved revenues and gross profit margins.
Segment Performance
Revenues at the Building Systems segment increased to $175.5 million from $172.2 million in the year-ago quarter. The segment reported adjusted operating income of $19.6 million, a 35.3% rise from $14.5 million in the year-ago quarter.
The Coatings division reported revenues of $30.7 million, up 15.3% year over year. Adjusted operating profit improved 59% year over year to $8.7 million, supported by increased operating leverage from higher total volumes processed.
The Component segment’s revenues increased 15.4% year over year to $256 million led by both the traditional metal component product lines and the insulated metal panel products. On an adjusted basis, operating profit increased 75% year over year to $37.8 million, driven by a combination of effective supply chain management and commercial discipline as well as an improving product mix in insulated metal panels.
Financial Update
At the end of the third quarter of fiscal 2016, NCI Building had cash and cash equivalents of $50.7 million compared with $99.7 million as of Nov 1, 2015. The company reported cash from operations of $40.6 million for the nine-month period ended Jul 31, 2016 compared with $38.6 million in the comparable year-ago period. Long-term debt was $414 million as of Jul 31, 2016, compared with $444 million as of Nov 1, 2015. NCI Building’s consolidated backlog increased 10% to $557.5 million at the end of the quarter.
NCI BLDG SYSTEM Price, Consensus and EPS Surprise
NCI BLDG SYSTEM Price, Consensus and EPS Surprise | NCI BLDG SYSTEM Quote
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 revenues, gross margin and adjusted EBITDA. The company however anticipates a somewhat muted sequential increase from the fiscal third quarter to fiscal fourth quarter results, as compared to its historical seasonal pattern.
Headquartered in Texas, NCI Building Systems is a leading integrated manufacturer of metal products in the North American non-residential construction industry.
Zacks Rank
Currently, NCI Building carries a Zacks Rank #2 (Buy).
Other well-placed stocks worth considering in the same industry include Gibraltar Industries, Inc. (ROCK - Free Report) , Trex Co. Inc. (TREX - Free Report) and Caesarstone Ltd. (CSTE - Free Report) . While Gibraltar Industries and Trex, each, sport a Zacks Rank #1 (Strong Buy), Caesarstone holds the same rank as NCI Building.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>