<PAGE> 1
================================================================================
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
---------------------
Commission file number 0-19885
A. Full title of the plan and the address of the plan, if
different from that of the issuer named below:
NCI 401(k) PROFIT SHARING PLAN
B. Name of issuer of the securities held pursuant to the plan and
the address of its principal executive office:
NCI BUILDING SYSTEMS, INC.
7301 FAIRVIEW
HOUSTON, TEXAS 77041
================================================================================
<PAGE> 2
NCI 401(k) PROFIT SHARING PLAN
Table of Contents
<TABLE>
<S> <C> <C>
* Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
* Statement of Net Assets Available for Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
* Statement of Changes in Net Assets Available for Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . 4
* Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-7
* Supplemental Schedules:
Schedule of Assets Held for Investment Purposes . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Schedule of Reportable Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
</TABLE>
<PAGE> 3
NCI 401(k) PROFIT SHARING PLAN
FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
<PAGE> 4
NCI 401(k) PROFIT SHARING PLAN
FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
<TABLE>
<CAPTION>
CONTENTS
<S> <C>
Independent Auditors' Report ............................................... 2
Statements of Net Assets Available for Benefits ............................ 3
Statement of Changes in Net Assets Available for Benefits .................. 4
Notes to Financial Statements .............................................. 5-7
Supplemental Schedules:
Schedule of Assets Held for Investment Purposes .......................... 8
Schedule of Reportable Transactions ...................................... 9
</TABLE>
<PAGE> 5
[MANN FRANKFORT STEIN & LIPP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
Board of Trustees
NCI 401(k) Profit Sharing Plan
Houston, Texas
We have audited the accompanying statements of net assets available for benefits
of NCI 401(k) Profit Sharing Plan as of December 31, 1996 and 1995, and the
related statement of changes in net assets available for benefits for the year
ended December 31, 1996. These financial statements are the responsibility of
the Board of Trustees. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. These standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
Board of Trustees as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of NCI 401(k)
Profit Sharing Plan as of December 31, 1996 and 1995, and the changes in net
assets available for benefits for the year ended December 31, 1996, in
conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying Supplemental Schedules of (1)
Assets Held for Investment Purposes and (2) Reportable Transactions are
presented to comply with the Department of Labor Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974 and are not a required part of the financial statements. The supplemental
schedules have been subjected to the same auditing procedures applied in our
audit of the basic financial statements and, in our opinion, are fairly stated,
in all material respects, in relation to the basic financial statements taken as
a whole.
/s/ MANN FRANKFORT STEIN & LIPP, P.C.
Houston, Texas
October 8, 1997
-2-
<PAGE> 6
NCI 401(k) PROFIT SHARING PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
ASSETS
December 31,
-------------------------
1996 1995
----------- -----------
<S> <C> <C>
INVESTMENTS - at fair value
Nationsbank Stable Capital Fund $ 624,832 $ 354,982
Nations Balanced Assets Fund 758,917 467,384
Nations Capital Growth Fund 1,515,819 1,014,976
Nations Strategic Fixed Income Fund 495,310 349,294
NCI Stock Fund 10,411,411 5,693,854
Other - 46,337
----------- -----------
13,806,289 7,926,827
CONTRIBUTIONS RECEIVABLE - 48,202
CASH AND CASH EQUIVALENTS 114,663 17,676
----------- -----------
TOTAL ASSETS 13,920,952 7,992,705
LIABILITIES
Accounts payable (33,554) (29,579)
----------- -----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $13,887,398 $ 7,963,126
=========== ===========
</TABLE>
See independent auditors' report and accompanying notes to the financial
statements.
-3-
<PAGE> 7
NCI 401(k) PROFIT SHARING PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31,1996
<TABLE>
<CAPTION>
Participant Directed
--------------------------------------------------------------------------
Nationsbank Nations Nations Nations NCI
Stable Balanced Capital Growth Strategic Fixed Common
Fund Assets Fund Income Fund Stock Fund
---------- --------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS
Interest and dividend income $ 2 $ 18,857 $ 3,669 $ 21,349 $ --
Net unrealized appreciation (depreciation)
of investments and net realized gain on
sale of investments 24,943 58,118 183,214 (12,120) 1,022,967
---------- --------- ------------ ------------ ------------
Total earnings 24,945 76,975 186,883 9,229 1,022,967
Contributions
Participant 236,875 200,251 427,568 141,494 730,538
Employer -- -- -- -- --
Rollovers/other 55,421 61,001 120,925 24,229 35,610
---------- --------- ------------ ------------ ------------
Total contributions 292,296 261,252 548,493 165,723 766,148
---------- --------- ------------ ------------ ------------
TOTAL ADDITIONS 317,241 338,227 735,376 174,952 1,789,115
DEDUCTIONS FROM NET ASSETS
Benefits paid to terminated participants (24,839) (48,103) (101,478) (15,527) (116,073)
Administrative/other expenses -- -- -- -- --
---------- --------- ------------ ------------ ------------
TOTAL DEDUCTIONS (24,839) (48,103) (101,478) (15,527) (116,073)
NET INTERFUND TRANSFERS (22,552) 1,409 (133,055) (13,409) 148,035
---------- --------- ------------ ------------ ------------
NET INCREASE(DECREASE) 269,850 291,533 500,843 146,016 1,821,077
NET ASSETS AVAILABLE FOR:
Beginning of year 354,982 467,384 1,014,976 349,294 1,950,964
---------- --------- ------------ ------------ ------------
End of year $ 624,832 $ 758,917 $ 1,515,819 $ 495,310 $ 3,772,041
========== ========= ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
Non-Participant
Directed
---------- ---------------
NCI
Common
Other Stock Fund Total
---------- ------------ ------------
<S> <C> <C> <C>
ADDITIONS TO NET ASSETS
Interest and dividend income $ 3,557 $ -- $ 47,434
Net unrealized appreciation (depreciation)
of investments and net realized gain on
sale of investments (21) 1,606,156 2,883,257
---------- ------------ ------------
Total earnings 3,536 1,606,156 2,930,691
Contributions
Participant -- -- 1,736,726
Employer -- 1,529,810 1,529,810
Rollovers/other 22,368 -- 319,554
---------- ------------ ------------
Total contributions 22,368 1,529,810 3,586,090
---------- ------------ ------------
TOTAL ADDITIONS 25,904 3,135,966 6,516,781
DEDUCTIONS FROM NET ASSETS
Benefits paid to terminated participants -- (182,139) (488,159)
Administrative/other expenses (104,350) -- (104,350)
---------- ------------ ------------
TOTAL DEDUCTIONS (104,350) (182,139) (592,509)
NET INTERFUND TRANSFERS 76,919 (57,347) --
---------- ------------ ------------
NET INCREASE(DECREASE) (1,527) 2,896,480 5,924,272
NET ASSETS AVAILABLE FOR:
Beginning of year 82,636 3,742,890 7,963,126
---------- ------------ ------------
End of year $ 81,109 $ 6,639,370 $ 13,887,398
========== ============ ============
</TABLE>
See independent auditors' report and accompanying notes to the financial
statements.
-4-
<PAGE> 8
NCI 401(k) PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
NOTE A - DESCRIPTION OF PLAN
The following description of the NCI 401(k) Profit Sharing Plan (Plan)
provides only general information. Participants should refer to the Plan
agreement for a more complete description of the Plan's provisions.
General: The Plan is a defined contribution plan covering all employees of NCI
Building Systems, Inc. and its affiliates (Company) who have completed one year
of service and have attained the age of 21. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974 (ERISA) and
subsequent related amendments and revisions.
Allocation Provision: Qualified participants may elect to defer a percent of
their salary at each pay period. The amount of deferral may not exceed 10% of
compensation (5% for participants in the highly compensated group) for the plan
year and must equal at least 1% of compensation. Elective deferrals may not
exceed the amount determined by the IRS for the plan year.
Participants may direct that their contributions be invested in any of the Plan
investment options.
Contributions: The Plan provides for a matching contribution on an equal basis
to all participants, with a maximum Company contribution. For the years ended
December 31, 1996 and 1995, the Company made a matching contribution equal to
100 percent of the participant's contribution, up to 6 percent of the
participant's eligible compensation. The employer contribution totaled
$1,529,810 and $1,059,123 for the years ended December 31, 1996 and 1995,
respectively.
Participant Accounts: Each participant's account is credited with the
participant's contribution and allocation of (a) the Company's contribution, if
any, (b) Plan earnings, and (c) forfeitures of terminated participants'
nonvested accounts in excess of expenses. Allocations are based on participant
earnings or account balances. The benefit to which a participant is entitled is
the benefit that can be provided from the participant's account.
Vesting: Participants are immediately vested in their voluntary contributions,
plus actual earnings thereon. Vesting in the remainder of their accounts is
based on years of continuous service as follows:
<TABLE>
<CAPTION>
Years of Service Vested Percentage
---------------------- ---------------------
<S> <C>
Less than Three Years 0%
Three Years 20%
Each additional year 20%
Seven or more years 100%
</TABLE>
Expenses: The Company has paid a premium to acquire a $500,000 fidelity bond
and also incurs expenses for administration, audit and tax return preparation
for the Plan. The Plan may reimburse the Company for these expenses through the
allocation of forfeitures.
-5-
<PAGE> 9
NCI 401(k) PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
NOTE A - DESCRIPTION OF PLAN (Continued)
Payment of Benefits: Subsequent to termination of service, a participant may
request to receive payment either in a lump sum amount equal to the value of
his or her vested account balance or to continue in the trust in such a manner
as though the employee had not terminated his eligibility if the participant's
account balance is greater than $3,500.
Plan Amendments: During the year, the Plan was amended to give credit for years
of service for vesting purposes for employees of two companies acquired during
1996.
Disposition of Forfeitures: The Plan stipulates that forfeitures are first used
to reduce the Plan's normal administrative fees, and then should be treated as
additional discretionary matching contributions for the plan year in which the
forfeitures occur.
Investment Options: The Plan offers five investment options in which the
employees may elect to participate. Four of the options are mutual funds, and
the fifth option is the NCI Company Stock Fund. The Company's matching
contribution is made in Company stock.
NOTE B - SUMMARY OF ACCOUNTING POLICIES
Plan assets are stated at fair market value. If available, quoted market prices
are used to value investments.
Estimates: The preparation of financial statements in conformity with generally
accepted accounting principles requires the plan administrator to make
estimates and assumptions that affect the reported amounts and disclosures.
Accordingly, actual results may differ from those estimates.
NOTE C - INVESTMENTS
The Plan's investments are held by a bank-administered trust fund. The
following table presents the fair values of investments. Investments that
represent 5 percent or more of the Plan's net assets are separately identified.
Investments at fair value as determined by quoted market price:
<TABLE>
<CAPTION>
December 31,
----------------------------
1996 1995
----------- ----------
<S> <C> <C>
Nationsbank Stable Capital Fund $ 624,832 $ 354,982
Nations Balanced Assets Fund 758,917 467,384
Nations Strategic Fixed Income Fund 495,310 349,294
Nations Capital Growth Fund 1,515,819 1,014,976
NCI Common Stock Fund 10,411,411 5,693,854
Other - 46,337
----------- ----------
$13,806,289 $7,926,827
=========== ==========
</TABLE>
-6-
<PAGE> 10
NCI 401(k) PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1996 and 1995
NOTE D - PLAN TERMINATION
Although the Company has expressed no such intention, the Plan can be
terminated at the Company's election. In the event of Plan termination, all
Plan benefits would become 100 percent vested and payable to the participants.
NOTE E - TAX STATUS
The Plan obtained its latest determination letter on March 2, 1995, in which
the Internal Revenue Service stated that the Plan, as then designed, was in
compliance with the applicable requirements of the Internal Revenue Code. The
Plan has been amended since receiving the determination letter. However, the
Plan administrator believes that the Plan is currently designed and being
operated in compliance with the applicable requirements of the Internal Revenue
Code.
-7-
<PAGE> 11
SUPPLEMENTAL SCHEDULES
<PAGE> 12
NCI 401(k) PROFIT SHARING PLAN
FINANCIAL STATEMENTS
DECEMBER 31, 1996
Item 27a - Schedule of Assets Held for Investment Purposes for the Year Ended
December 31, 1996
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
- ----------------------------------------------------------------------------------------------
Identity of Issue, Description of Investment Cost Current Value
Borrower, Lessor, Including Maturity Date, Rate
or Similar Party of Interest, Collateral, Par
or Maturity Value
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Nationsbank Stable Capital Mutual Fund $ 581,054 $ 624,832
Nations Balanced Assets Mutual Fund $ 774,419 $ 758,917
Nations Strategic Fixed Income Mutual Fund $ 501,142 $ 495,310
Nations Capital Growth Mutual Fund $ 1,584,281 $ 1,515,819
NCI Stock Qualified Employer Securities $ 5,412,083 $ 10,411,411
</TABLE>
-8-
<PAGE> 13
NCI 401(k) PROFIT SHARING PLAN
FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1996
Item 27d - Schedule of Reportable Transactions for the Year Ended
December 31, 1996
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e) (f) (g) (h) (i)
- ------------------------------------------------------------------------------------------------------------------------------------
Identity Description Purchase Selling Lease Expense Cost of Current Net Gain
of Party of Asset Price Price Expense Incurred Asset Value of (Loss)
Involved Assets on
Transaction
Date
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Category (iii) - A series of
transactions relating to the
same issue of securities in
excess of 5% of current value
of the plan assets:
NCI Stock Fund $ 2,728,539 $ 2,728,539 $ 2,728,539
NCI Stock Fund $ 640,074 $ 1,546,967 $ 640,074 $ (906,893)
Nations Balanced Assets $ 418,804 $ 418,804 $ 418,804
Nations Balanced Assets $ 105,797 $ 102,747 $ 105,797 $ 3,050
Nations Capital Growth $ 943,887 $ 943,887 $ 943,887
Nations Capital Growth $ 335,005 $ 320,989 $ 335,005 $ 14,016
Nations Stable Capital $ 327,208 $ 327,208 $ 327,208
Nations Stable Capital $ 82,301 $ 80,505 $ 82,301 $ 1,796
</TABLE>
There were no category (i),(ii) or (iv) reportable transactions during the year
ended December 31, 1996.
-9-
<PAGE> 14
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act
of 1934, the Trustee for the NCI 401(k) Profit Sharing Plan has duly caused
this annual report to be signed on its behalf by the undersigned hereunto duly
authorized.
NATIONSBANK OF GEORGIA, N.A., TRUSTEE FOR THE
NCI 401(k) PROFIT SHARING PLAN
DATE: November 3, 1997 BY: /s/ WILLIAM DENTON
---------------------- -----------------------------------------
PRINT NAME: William Denton
---------------------------------
TITLE: Vice President
--------------------------------------
10
<PAGE> 15
CONSENT OF INDEPENDENT AUDITORS
We consent to the use of our report dated October 8, 1997 incorporated
by reference in the Registration Statements (Forms S-8, File Nos. 33-52078,
33-71106, 333-12921 and 333-34899) pertaining to the NCI 401(k) Profit Sharing
Plan, with respect to the financial statements and schedules of the NCI 401(k)
Profit Sharing Plan included in this Annual Report (Form 11-K) for the period
from January 1, 1996 to December 31, 1996.
MANN, FRANKFORT, STEIN & LIPP, P.C.
DALLAS, TEXAS BY: /S/GLEA RAMEY, III, CPA
OCTOBER 29, 1997 ------------------------------
- ------------ PRINT NAME: GLEA RAMEY, III
------------------------
TITLE: SHAREHOLDER
---------------------------
11
