<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
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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
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<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 . . . . . . . . . . . . . . . . . . . 5-8
* Supplemental Schedules:
Schedule of Assets Held for Investment Purposes . . . . . . 9
Schedule of Reportable Transactions . . . . . . . . . . . . 10
</TABLE>
<PAGE> 3
[KOLKHORST & KOLKHORST LETTERHEAD]
INDEPENDENT'S AUDITOR'S REPORT
Board of Trustees
NCI 401(k) Profit Sharing Plan
Houston, Texas
We have audited the accompanying statement of net assets available for benefits
of NCI 401(k) Profit Sharing Plan as of December 31, 1997 and the related
statement of changes in net assets available for benefits for the year ended
December 31, 1997. 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 audit. The financial statements of NCI 401(k)
Profit Sharing Plan, as of December 31, 1996, were audited by other auditors
whose report dated October 8, 1997, expressed an unqualified opinion on those
statements.
We conducted our audit 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 audit provides 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, 1997, and the changes in net assets
available for benefits for the year ended December 31, 1997, 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/ KOLKHORST & KOLKHORST
Houston, Texas
May 22, 1998
<PAGE> 4
NCI 401(k) PROFIT SHARING PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 1997 and 1996
ASSETS
<TABLE>
<CAPTION>
December 31,
-----------------------------
1997 1996
------------ ------------
<S> <C> <C>
INVESTMENTS - at fair value
NationsBank Stable Capital Fund $ 1,058,172 $ 624,832
Nations Balanced Assets Fund 1,404,714 758,917
Nations Capital Growth Fund 2,931,868 1,515,819
Nations Strategic Fixed Income Fund 694,021 495,310
NCI Stock Fund 12,249,232 10,411,411
Other -- --
------------ ------------
18,338,007 13,806,289
CONTRIBUTIONS RECEIVABLE -- --
CASH AND CASH EQUIVALENTS 83,549 114,663
------------ ------------
TOTAL ASSETS 18,421,556 13,920,952
LIABILITIES
Accounts payable -- (33,554)
------------ ------------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $ 18,421,556 $ 13,887,398
============ ============
</TABLE>
See independent auditors' report and accompanying notes
to the financial statements.
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<PAGE> 5
NCI 401(k) PROFIT SHARING PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year Ended December 31, 1997
<TABLE>
<CAPTION>
Participant Directed
--------------------------------------------------------------------------------------
Nationsbank Nations Nations Nations NCI
Stable Balanced Capital Growth Strategic Fixed Common
Fund Assets Fund Income Fund Stock Other
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS
Interest and dividend income $ 81 $ 34,328 $ 2,897 $ 36,536 $ 1,561 $ 6,175
Net unrealized appreciation (depreciation)
of investments and net realized gain on
sale of investments 52,563 169,483 546,530 13,544 114,575 --
------------ ------------ ------------ ------------ ------------ ------------
Total earnings 52,644 203,811 549,427 50,080 116,136 6,175
Contributions
Participant 320,854 305,306 632,811 177,019 865,684 --
Employer -- -- --
Rollovers/other 16,922 48,105 52,201 8,488 28,699 --
------------ ------------ ------------ ------------ ------------ ------------
Total contributions 337,776 353,411 685,012 185,507 894,383 --
------------ ------------ ------------ ------------ ------------ ------------
TOTAL ADDITIONS 390,420 557,222 1,234,439 235,587 1,010,519 6,175
DEDUCTIONS FROM NET ASSETS
Benefits paid to terminated participants (136,918) (98,245) (68,410) (22,916) (248,793) --
Administrative/other expenses (93) (91) (193) (53) (996) (81,854)
------------ ------------ ------------ ------------ ------------ ------------
TOTAL DEDUCTIONS (137,011) (98,336) (68,603) (22,969) (249,790) (81,854)
NET INTERFUND TRANSFERS 157,555 186,910 255,393 (13,907) -- 95,314
------------ ------------ ------------ ------------ ------------ ------------
NET INCREASE (DECREASE) 410,964 645,796 1,421,231 198,711 760,729 19,635
NET ASSETS AVAILABLE FOR
BENEFITS:
Beginning of year 647,208 758,918 1,510,637 495,310 3,772,041 63,914
------------ ------------ ------------ ------------ ------------ ------------
End of year $ 1,058,172 $ 1,404,714 $ 2,931,868 $ 694,021 $ 4,532,770 $ 83,549
============ ============ ============ ============ ============ ============
<CAPTION>
Non-Participant
Directed
------------
NCI
Common
Stock Fund Total
------------ ------------
<S> <C> <C>
ADDITIONS TO NET ASSETS
Interest and dividend income $ -- $ 81,578
Net unrealized appreciation (depreciation)
of investments and net realized gain on
sale of investments 50,602 947,297
------------ ------------
Total earnings 50,602 1,028,875
Contributions
Participant 2,301,674
Employer 1,959,813 1,959,813
Rollovers/other 154,415
------------ ------------
Total contributions 1,959,813 4,415,902
------------ ------------
TOTAL ADDITIONS 2,010,415 5,444,777
DEDUCTIONS FROM NET ASSETS
Benefits paid to terminated participants (252,058) (827,340)
Administrative/other expenses -- (83,280)
------------ ------------
TOTAL DEDUCTIONS (252,058) (910,619)
NET INTERFUND TRANSFERS (681,265) --
------------ ------------
NET INCREASE (DECREASE) 1,077,092 4,534,158
NET ASSETS AVAILABLE FOR
BENEFITS:
Beginning of year 6,639,370 13,887,398
------------ ------------
End of year $ 716,462 $ 18,421,556
============ ============
</TABLE>
See independent auditors' report and accompanying
notes to the financial statements.
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<PAGE> 6
NCI 401(k) PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
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, 1997 and 1996, 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 $1,959,813 and $1,529,810 for
the years ended December 31, 1997 and 1996, 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.
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<PAGE> 7
NCI 401 (k) PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
NOTE A - DESCRIPTION OF PLAN (CONTINUED)
Vesting
Participants are immediately vested in their voluntary contributions, plus
actual earnings thereon. Vesting in the reminder 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 $1,000,000 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.
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 the Company acquired during 1997.
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.
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<PAGE> 8
NCI 401(k) PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
NOTE A - DESCRIPTION OF PLAN (CONTINUED)
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,
----------------------------
1997 1996
----------- -----------
<S> <C> <C>
NationsBank Stable Capital Fund $ 1,058,172 $ 624,832
Nations Balanced Assets Fund 1,404,714 758,917
Nations Strategic Fixed Income Fund 694,021 495,310
Nations Capital Growth Fund 2,931,868 1,515,819
NCI Common Stock Fund 12,249,232 10,411,411
Other -- --
----------- -----------
$18,338,007 $13,806,289
=========== ===========
</TABLE>
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<PAGE> 9
NCI 401(k) PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
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.
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<PAGE> 10
SUPPLEMENTAL SCHEDULES
<PAGE> 11
NCI 401(k) PROFIT SHARING PLAN
FINANCIAL STATEMENTS
December 31, 1997
Item 27a - Schedule of Assets Held for Investments Purposes for the Year Ended
December 31, 1997
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
- -------------------------------------------------------------------------------------------------------------------
Identity of Issue Description of Cost Current
Borrower, Lessor, Including Maturity Date, Rate Value
or Similar Party of Interest, Collateral, Par
or Maturity Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NationsBank Stable Capital Mutual Fund $ 973,059 $ 1,058,172
Nations Balanced Assets Mutual Fund $ 1,479,918 $ 1,404,714
Nations Strategic Fixed Income Mutual Fund $ 685,544 $ 694,021
Nations Capital Growth Mutual Fund $ 3,113,392 $ 2,931,868
NCI Stock Qualified Employer Securities $ 7,671,614 $ 12,249,232
</TABLE>
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<PAGE> 12
NCI 401(k) PROFIT SHARING PLAN
FINANCIAL STATEMENTS
Year ended December 31, 1997
Item 27d - Schedule of Reportable Transactions for the Year Ended December 31,
1997
<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 Assets Price Price Expense Incurred Asset Value of (Loss)
Involved Assets on
Transaction
Date
- ----------------------------------------------------------------------------------------------------------------------------------
Category (iii) - A series of transactions
relating to the same issue of securities
in excess of 5% of current value of the
Plan assets:
<S> <C> <C> <C> <C> <C>
NCI Stock Fund $ 3,436,788 $ 3,436,788 $ 3,436,788
NCI Stock Fund $ 1,760,800 $ 1,703,928 $ 1,760,800 $ 29,872
Nations Balanced Assets $ 1,029,841 $ 1,029,841 $ 1,029,841
Nations Balanced Assets $ 325,100 $ 315,398 $ 325,100 $ 9,702
Nations Capital Growth $ 1,924,704 $ 1,924,704 $ 1,924,704
Nations Capital Growth $ 399,714 $ 386,074 $ 399,714 $ 13,640
Nations Stable Capital $ 722,482 $ 722,482 $ 722,482
Nations Stable Capital $ 341,524 $ 333,622 $ 341,524 $ 7,902
</TABLE>
There were no category (i), (ii) or (iv) reportable transactions during the year
ended December 31, 1997.
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<PAGE> 13
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act
of 1934, NCI Building Systems Inc., as administrator 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.
NCI BUILDING SYSTEMS INC., AS ADMINISTRATOR
FOR THE NCI 401(k) PROFIT SHARING PLAN
DATE: JUNE 30, 1998 BY: /s/ DONNIE R. HUMPHRIES
-----------------------------------------
Donnie R. Humphries
-----------------------------------------
Vice President - Human Resources
-----------------------------------------
<PAGE> 14
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Description
- ------- -----------
<S> <C>
23.1 Consent of Independent Auditors
</TABLE>
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the use of our report included herein and to the
references to our firm included in the registration statement on Form 11-K for
the NCI 401(k) Profit Sharing Plan.
KOLKHORST & KOLKHORST
Houston, Texas By: /s/ GARY KOLKHORST
------------------------------------------
June 29, 1998 Gary Kolkhorst
Partner
