Huston, Texas — NCI building systems saw sales rise 13% in the second quarter of 2017 to $420.5 m and is optimistic for the rest of the year.
NCI upbeat for H2 2017
The company said that the rise in sales was due to an improvement in underlying volumes and improved pricing, which fed through to gross profit of $100 m and net income of $17 m for the second quarter of 2017, compared to a net income of $2.4 m in the second quarter of 2016.
Norman Chambers, CEO said "we are pleased with our solid second quarter performance, which culminated in a stronger first half compared to the first half of last year. We achieved a year-over-year growth in both the insulated metal panels and components products and a slowly recovering economy.”
Third party sales in the company's buildings segment increased 14.9% to $254.5 m in the second quarter compared with $134.5 m in the second quarter of 2016. This was, the company said, mainly as a result of increased sales volumes and pass through of higher costs of steel. However operating income fell to $6.9 m in the quarter compared to $7.2 m in the second quarter of 2016. The fall was due, primarily to the "increasing steel prices for the period compared to the second quarter of 2016 when steel prices were declining."
Looking at the first half of the year, sales of $812 m were up 9.4% on the $742 m recorded in the first half of 2016, the company said and gross profit of $185 m in the first half of 2017 was up 3.2% on the $179 m recorded in the first half of 2016.
The company added that internal bookings show a return to a more normal pattern compared to 2016 with modest year over year slowdown of NCI's primary markets at the end of the second quarter.
Offices and banks, equipment storage, religious buildings and hangers showed positive year-over-year growth, and the firm said that New England and North West central showed the strongest regional growth during the second quarter.
The company added it expects NCI said it expects to take advantage of market growth, cost savings and expand some product lines. It expects the second half of 2017 to be stronger than the second half of 2016 and the fourth quarter to be stronger than the third.
The firm added that cost savings are expected to generate between $30 and $40 m by the end of 20 18 and will contribute $10 m in 2017.