The following information should be read in conjunction with the unaudited consolidated financial statements included herein under "Item 1. Unaudited Consolidated Financial Statements" and the audited consolidated financial statements and the notes thereto and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our Annual Report on Form 10-K for the fiscal year ended October 30, 2011.

FORWARD LOOKING STATEMENTS

This Quarterly Report includes statements concerning our expectations, beliefs, plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements that are not historical facts. These statements are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those expressed or implied by these statements. In some cases, our forward-looking statements can be identified by the words "anticipate," "believe," "continue," "could," "estimate," "expect," "forecast," "goal," "intend," "may," "objective," "plan," "potential," "predict," "projection," "should," "will" or other similar words. We have based our forward-looking statements on our management's beliefs and assumptions based on information available to our management at the time the statements are made. We caution you that assumptions, beliefs, expectations, intentions and projections about future events may and often do vary materially from actual results. Therefore, we cannot assure you that actual results will not differ materially from those expressed or implied by our forward-looking statements. Accordingly, investors are cautioned not to place undue reliance on any forward-looking information, including any earnings guidance. Although we believe that the expectations reflected in the forward-looking statements are reasonable, these expectations and the related statements are subject to risks, uncertainties, and other factors that could cause the actual results to differ materially from those projected. These risks, uncertainties, and other factors include, but are not limited to:

• industry cyclicality and seasonality and adverse weather conditions;

• challenging economic conditions affecting the nonresidential construction industry;

• volatility in the U.S. economy and abroad, generally, and in the credit markets;

• ability to service or refinance our debt, including additional debt to finance the Acquisition (as defined below), and obtain future financing;

• the Company's ability to comply with the financial tests and covenants in its existing and future debt obligations;

• operational limitations or restrictions in connection with our debt;

• recognition of asset impairment charges;

• commodity price increases and/or limited availability of raw materials, including steel;

• the ability to make strategic acquisitions accretive to earnings;

• retention and replacement of key personnel;

• enforcement and obsolescence of intellectual property rights;

• fluctuations in customer demand;

• costs related to environmental clean-ups and liabilities;

• competitive activity and pricing pressure;

• the volatility of the Company's stock price;

• the substantial rights, seniority and dilutive effect on our common stockholders of the Convertible Preferred Stock issued to the CD&R Funds;

• breaches of our information security system security measures;

• hazards that may cause personal injury or property damage, thereby subjecting us to liabilities and possible losses, which may not be covered by insurance;

• changes in laws or regulations;

• our ability to integrate Metl-Span LLC with our business and to realize the anticipated benefits of such acquisition;

• costs and other effects of legal and administrative proceedings, settlements, investigations, claims and other matters; and

• other risks detailed under the caption "Risk Factors" in Part II, Item 1A of the report and in our most recent Annual Report on Form 10-K as filed with the SEC.

A forward-looking statement may include a statement of the assumptions or bases underlying the forward-looking statement. We believe that we have chosen these assumptions or bases in good faith and that they are reasonable. However, we caution you that assumed facts or bases almost always vary from actual results, and the differences between assumed facts or bases and actual results can be material, depending on the circumstances. When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements in this report and those described under the caption "Risk Factors" in our most recent Annual Report on Form 10-K as filed with the SEC. We expressly disclaim any obligations to release publicly any updates or revisions to these forward-looking statements to reflect any changes in our expectations unless the securities laws require us to do so.

OVERVIEW

NCI Building Systems, Inc. (together with its subsidiaries, unless the context requires otherwise, the "Company," "we," "us" or "our") is one of North America's largest integrated manufacturers and marketers of metal products for the nonresidential construction industry. We provide metal coil coating services and design, engineer, manufacture and market metal components and engineered building systems primarily for nonresidential construction use. We manufacture and distribute extensive lines of metal products for the nonresidential construction market under multiple brand names through a nationwide network of plants and distribution centers. We sell our products for both new construction and repair and retrofit applications.

Metal components offer builders, designers, architects and end-users several advantages, including lower long-term costs, longer life, attractive aesthetics and design flexibility. Similarly, engineered building systems offer a number of advantages over traditional construction alternatives, including shorter construction time, more efficient use of materials, lower construction costs, greater ease of expansion and lower maintenance costs.

We assess performance across our business segments by analyzing and evaluating
(i) gross profit, operating income and whether or not each segment has achieved its projected sales goals, and (ii) non-financial efficiency indicators such as gross profit per employee, man hours per ton of steel produced and shipped tons per day. In assessing our overall financial performance, we regard return on adjusted operating assets, as well as growth in earnings, as key indicators of shareholder value.

Third Fiscal Quarter

We experienced a significant improvement in our operating results during the third quarter of fiscal 2012 in what continues to be a weak recovery period for the nonresidential construction industry. We are leveraging the competitive advantages of steel compared to other building products to capture additional business from existing customers and enter new markets, while managing costs through continuous operating efficiencies.

Each of our business segments is making progress in what continues to be a challenging market environment, helped in part by our integrated business model.

The metal coil coating segment continues to serve our metal components and engineered building systems segments, while focusing its external sales on building share in the nonresidential construction market and in extending their reach in new markets. Results for the first nine months of fiscal 2012 showed double-digit increases in revenues and operating income. Results for the third quarter of fiscal 2012 were flat with prior year due to a less favorable business mix in the period and the incurrence of additional expenses associated with the new Middletown, Ohio coating plant.

In the metal components segment, third party sales increased 29%, while operating income improved 43% compared to the same period in the prior year, benefitting from a 6-week contribution from the Company's Metl-Span acquisition, slight improvement in demand for the group's core products, the effectiveness of new marketing programs designed to capture larger volume business and low operating cost structure that continues to distinguish this business unit.

The engineered metal buildings segment produced a 15.2% increase in operating profit on sales growth of 6.7% in the third quarter of fiscal 2012 compared to the same period in the prior year. Revenue growth resulted from improved demand from the industrial and retail sectors, and similar to the prior quarter, operating profitability benefitted from a more favorable mix of higher and lower complexity projects.

Industry Conditions

Our sales and earnings are subject to both seasonal and cyclical trends and are influenced by general economic conditions, interest rates, the price of steel relative to other building materials, the level of nonresidential construction activity, roof repair and retrofit demand and the availability and cost of financing for construction projects.

The nonresidential construction industry is highly sensitive to national and regional macroeconomic conditions. One of the primary challenges we face is that the United States economy is slowly recovering from a recession and is in a period of significant volatility which, beginning in the third quarter of 2008, reduced demand for our products and adversely affected our business. In addition, the tightening of credit in financial markets over the same period adversely affected the ability of our customers to obtain financing for construction projects. As a result, we have experienced decreases in orders and cancellations of orders for our products in previous fiscal quarters, and the ability of our customers to make payments has been adversely affected. Similar factors could cause our suppliers to experience financial distress or bankruptcy, resulting in temporary raw material shortages. The lack of credit also adversely affects nonresidential construction, which is the focus of our business. While economic growth has either resumed or remains flat, the nonresidential construction industry continues to face significant challenges. The graph below shows the annual nonresidential new construction starts, measured in square feet, since 1968 as compiled and reported by McGraw-Hill:

When assessing the state of the metal construction market, we review information from various industry associations, third-party research, and various government reports such as industrial production and capacity utilization. One such industry association is the Metal Building Manufacturers Association ("MBMA"), which provides summary member sales information and promotes the design and construction of metal buildings and metal roofing systems. Another is McGraw-Hill Construction Information Group, which we review for information regarding actual and forecasted growth in various construction related industries, including the overall nonresidential construction market. McGraw-Hill Construction's nonresidential construction forecast for calendar 2012, published in July 2012, indicates no change in square footage and a decrease of 6% in dollar value as compared to the prior calendar year. In calendar 2013, the nonresidential construction forecast indicates an increase compared to calendar 2012, with an expected increase of 13% in square footage and an increase of 11% in dollar value. Additionally, we review the American Institute of Architects' ("AIA") survey for inquiry and billing activity for the industrial, commercial and institutional sectors. The AIA's architecture billings index ("ABI") is a closely watched metric, as billings growth for architecture services generally leads to construction spending growth 9 to 12 months forward. We have historically experienced a shorter lag period of 6 - 9 months when comparing the commercial and industrial ABI trends to our volume trends. An ABI reading above 50 indicates an increase in month-to-month billings and a reading below 50 indicates a decrease in month-to-month billings. AIA's ABI published for July 2012 was below 50 at 48.7 and the commercial and industrial component of the index was 46.6, the third consecutive month below 50.

Another challenge we face both short and long term is the volatility in the price of steel. Our business is heavily dependent on the supply of steel and is significantly impacted by steel prices. For the fiscal nine months ended July 29, 2012, steel represented approximately 72% of our cost of goods sold. The steel industry is highly cyclical in nature, and steel prices have been volatile in recent years and may remain volatile in the future. Steel prices are influenced by numerous factors beyond our control, including general economic conditions domestically and internationally, competition, labor costs, production costs, import duties and other trade restrictions. The monthly CRU North American Steel Price Index, published by the CRU Group, has decreased 9.6% from October 2011 to July 2012 and was 13.0% lower in July 2012 compared to July 2011.

We normally do not maintain an inventory of steel in excess of our current production requirements. However, from time to time, we may purchase steel in advance of announced steel price increases. We can give no assurance that steel will be readily available or that prices will not continue to be volatile. While most of our sales contracts have escalation clauses that allow us, under certain circumstances, to pass along all or a portion of increases in the price of steel after the date of the contract but prior to delivery, for competitive or other reasons we may not be able to pass such price increases along. If the available supply of steel declines, we could experience price increases that we are not able to pass on to the end users, a deterioration of service from our suppliers or interruptions or delays that may cause us not to meet delivery schedules to our customers. Any of these problems could adversely affect our results of operations and financial condition. For additional discussion please see "Item
3. Quantitative and Qualitative Disclosures About Market Risk -Steel Prices."

RESULTS OF OPERATIONS

We have aggregated our operations into three reportable segments based upon similarities in product lines, manufacturing processes, marketing and management of our businesses: (i) metal coil coating; (ii) metal components; and
(iii) engineered building systems. All business segments operate primarily in the nonresidential construction market. Sales and earnings are influenced by general economic conditions, the level of nonresidential construction activity, metal roof repair and retrofit demand and the availability and terms of financing available for construction. Products of all business segments use similar basic raw materials. The metal coil coating segment consists of cleaning, treating, painting and slitting continuous steel coils before the steel is fabricated for use by construction and industrial users. The metal components segment products include metal roof and wall panels, doors, metal partitions, metal trim, insulated panels and other related accessories. The engineered building systems segment includes the manufacturing of main frames, Long BayฎSystems and value-added engineering and drafting, which are typically not part of metal components or metal coil coating products or services. The reporting segments follow the same accounting policies used for our consolidated financial statements.

We evaluate a segment's performance based primarily upon operating income before corporate expenses. Intersegment sales are recorded based on standard material costs plus a standard markup to cover labor and overhead and consist of:
(i) hot-rolled, light gauge painted, and slit material and other services provided by the metal coil coating segment to both the metal components and engineered building systems segments; (ii) building components provided by the metal components segment to the engineered building systems segment; and
(iii) structural framing provided by the engineered building systems segment to the metal components segment.

Corporate assets consist primarily of cash but also include deferred financing costs, deferred taxes and property, plant and equipment associated with our headquarters in Houston, Texas. These items (and income and expenses related to these items) are not allocated to the business segments. Corporate unallocated expenses include executive, legal, finance, tax, treasury, human resources, information technology, purchasing, marketing and corporate travel expenses. Additional unallocated expenses include interest income, interest expense and other (expense) income. Segment information is included in Note 14 of our consolidated financial statements.

The following table represents sales and operating income attributable to these business segments for the periods indicated (in thousands, except percentages):

                                                     Fiscal Three Months Ended                                        Fiscal Nine Months Ended
                                     July 29, 2012          %         July 31, 2011         %         July 29, 2012         %         July 31, 2011         %
Total sales:
Metal coil coating                  $         54,342          18     $        54,472          21     $       152,264          19     $       144,673          21
Metal components                             142,092          48             116,050          44             354,586          45             309,730          46
Engineered building systems                  164,265          55             155,046          59             453,278          57             386,248          57
Intersegment sales                           (62,211 )       (21 )           (63,430 )       (24 )          (167,806 )       (21 )          (162,862 )       (24 )
Total sales                         $        298,488         100     $       262,138         100     $       792,322         100     $       677,789         100

Operating income (loss):
Metal coil coating                  $          5,112                 $         5,219                 $        15,304                 $        13,041
Metal components                               9,372                           6,545                          23,931                          14,298
Engineered building systems                    9,078                           7,877                          23,414                           2,313
Corporate                                    (16,528 )                       (13,072 )                       (46,386 )                       (39,063 )
Total operating income (loss)       $          7,034                 $         6,569                 $        16,263                 $        (9,411 )
Unallocated other expense                    (10,964 )                        (3,976 )                       (16,915 )                       (10,745 )
Income (loss) before income taxes   $         (3,930 )               $         2,593                 $          (652 )               $       (20,156 )

FISCAL THREE MONTHS ENDED JULY 29, 2012 COMPARED TO FISCAL THREE MONTHS ENDED
JULY 31, 2011

Consolidated sales increased by 13.9%, or $36.4 million for the three months ended July 29, 2012, compared to the three months ended July 31, 2011. This increase resulted from higher tonnage volumes in our metal components and engineered building systems segments for the three months ended July 29, 2012 compared to the same period in 2011 which was driven by improved demand in the end use sectors we serve compared to the prior year.

Consolidated cost of sales increased by 13.4%, or $27.6 million for the three months ended July 29, 2012, compared to the three months ended July 31, 2011. Gross margins were 22.0% for the three months ended July 29, 2012 compared to 21.7% for the same period in the prior year. The increase in gross margins was the result of higher tonnage volumes in our metal components and engineered building systems segments which increased our operating leverage for the three months ended July 29, 2012 compared to the same period in 2011 as noted above.

Metal coil coating sales decreased by 0.2%, or $0.1 million to $54.3 million in the three months ended July 29, 2012, compared to $54.5 million in the same period in the prior year. Sales to third parties for the three months ended July 29, 2012 decreased by 2.0% to $19.4 million from $19.8 million in the same period in the prior year, primarily as a result of a shift in product mix from package sales of coated steel products to tolling revenue for coating services. Package sales include both the toll processing services and the sale of the steel coil while toll processing services include only the toll processing service performed on the steel coil already in the customer's ownership. The decrease in sales was partially offset by a 2.7% increase in tons shipped due to the acquisition of new customers and end users. The remaining $0.3 million represents an increase in intersegment sales for the three months ended July 29, 2012 compared to the same period in the prior year. Metal coil coating third-party sales accounted for 6.5% of total consolidated third-party sales in the three months ended July 29, 2012 compared to 7.6% in the three months ended July 31, 2011.

Operating income of the metal coil coating segment decreased to $5.1 million in the three months ended July 29, 2012, compared to $5.2 million in the same period in the prior year. The $0.1 million decrease resulted primarily from a $0.3 million increase in selling and administrative expenses related to various immaterial costs.

Metal components sales increased 22.4%, or $26.0 million to $142.1 million in the three months ended July 29, 2012, compared to $116.1 million in the same period in the prior year. This increase was primarily due to a 28.3% increase in external tons shipped, partially offset by a 10.1% reduction in internal volume. These results were driven by the inclusion of Metl-Span which contributed $21.2 million of sales since June 22, 2012 when Metl-Span was acquired and improved demand in the end use sectors we serve in the three months ended July 29, 2012. Sales to third parties for the three months ended July 29, 2012 increased $26.8 million to $119.8 million from $93.0 million in the same period in the prior year. The remaining $0.8 million represents a decrease in intersegment sales. Metal components third-party sales accounted for 40.1% of total consolidated third-party sales in the three months ended July 29, 2012 compared to 35.5% in the three months ended July 31, 2011.

Operating income of the metal components segment increased to $9.4 million in the three months ended July 29, 2012, compared to $6.5 million in the same period in the prior year. The $2.8 million increase resulted from an increase in external tons shipped as noted above, higher sales prices which increased as a result of the pass-through of higher underlying steel costs and the inclusion of Metl-Span which contributed $2.3 million of operating income since June 22, 2012 when Metl-Span was acquired. The increase in operating income was partially offset by a $3.2 million increase in selling and administrative expenses related to a $1.3 million increase in wages and commissions and other various immaterial costs.

Engineered building systems sales increased 5.9%, or $9.2 million to $164.3 million in the three months ended July 29, 2012, compared to $155.0 million in the same period in prior year. This increase resulted from a 10.5% increase in external tons shipped. These results were driven by improved demand in the end use sectors we serve in the three months ended July 29, 2012. Sales to third parties for the three months ended July 29, 2012 increased $9.9 million to $159.3 million from $149.3 million in the same period in the prior year. The remaining $0.7 million represents a decrease in intersegment sales. Engineered building systems third-party sales accounted for 53.4% of total consolidated third-party sales in the three months ended July 29, 2012 compared to 57.0% in the three months ended July 31, 2011.

Operating income of the engineered building systems segment improved to income of $9.1 million in the three months ended July 29, 2012 compared to income of $7.9 million in the same period in the prior year. This $1.2 million improvement resulted from a $1.8 million increase in gross profit due to increases external tons shipped as noted above and increases in relative sales prices. These improvements were partially offset by a $0.6 million of restructuring recovery in the same period in the prior year and a $0.6 million increase in engineering, selling and administrative expenses primarily due to a $0.9 million increase in wages, commissions and benefit costs which was mainly the result of higher volume.

Consolidated engineering, selling, general and administrative expenses, consisting of engineering, drafting, selling and administrative costs, increased to $55.6 million in the three months ended July 29, 2012, compared to $50.9 million in the same period in the prior year. The $4.7 million increase in engineering, selling and administrative expenses was primarily due to a $3.6 million increase in wages, commissions and benefit costs which was mainly the result of higher volume. As a percentage of sales, engineering, selling, general and administrative expenses were 18.6% for the three months ended July 29, 2012 as compared to 19.4% for the three months ended July 31, 2011.

Acquisition-related costs for the three months ended July 29, 2012 were $2.9 million. There was no amount recorded in the same period of the prior year. These costs represent various services to enter into a definitive agreement to purchase Metl-Span LLC for $145.7 million in cash. See "-Acquisition of Metl-Span LLC."

Consolidated interest expense increased by 8.0% to $4.2 million for the three months ended July 29, 2012, compared to $3.9 million for the same period of the prior year. Interest expense increased due to the term loan balance which increased from $128.5 million to $250.0 million on June 22, 2012 as a result of and in connection with the Metl-Span acquisition and the Company entering into a Credit Agreement which provided for a term loan credit facility in an aggregate principal amount of $250.0 million. Additionally, interest rates on the Credit Agreement increased from 6.5% to 8% on June 22, 2012. The increase was partially offset by a decrease in the interest rate on the term loan on October 31, 2011 from 8% to 6.5% and decreases in the underlying debt balance prior to June 22, 2012.

Debt extinguishment costs for the three months ended July 29, 2012 were $6.4 million. There was no amount recorded in the same period of the prior year. During our third quarter of fiscal 2012, we recognized a non-cash debt extinguishment charge related to the deferred financing costs of the amended and restated credit agreement, due April 2014, of $5.1 million. In addition, as a result of the ABL Facility Amendment, in our third fiscal quarter 2012, we recognized a non-cash charge of $1.3 million, related to the deferred financing costs.

Consolidated provision (benefit) for income taxes was a $0.7 million benefit for the three months ended July 29, 2012, compared to no provision for the same period in the prior year. The effective tax rate for the three months ended July 29, 2012 was 16.9% compared to 0.0% for the same period in the prior year. The increase in the effective tax rate for the three months ended July 29, 2012 compared to the same period in the prior year was the result of state income taxes and non-deductible expenses.

Consolidated Convertible Preferred Stock dividends and accretion was $9.2 million for the three months ended July 31, 2011. There was no amount recorded for the three months ended July 29, 2012. The 9.2 million related primarily to our paying accrued dividends on our Series B Cumulative Convertible Participating Preferred Stock, par value $1.00 per share ("Convertible Preferred . . .