We are 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 use a 52/53 week year with our fiscal year end on the Sunday closest to October 31. In fiscal 2013, our year end will be November 3, 2013 which is the Sunday closest to October 31. As a result, the fourth quarter of fiscal 2013 will include an additional week of operating activity.

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, (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.

Fiscal 2012 Overview

Fiscal 2012 marks the fourth consecutive year of depressed nonresidential markets, during which new construction starts measured less than 800 million square feet, more than 20% below any recession of the last four decades, and approximately 45% below the average new construction starts from 2004 through 2007.

All three of our operating segments in fiscal 2012 compared to fiscal 2011 generated substantial improvements across key financial metrics, demonstrating the success of business development initiatives, the returns on investments to improve efficiencies and strength of our integrated business model. The engineered building systems segment progressed towards reaching its full potential by posting a 16% increase in volume, an 18% increase in revenue and a nearly three-fold increase in operating income.

In addition to benefitting from the Metl-Span acquisition, which closed in mid-June, our metal components segment experienced modest organic growth in fiscal 2012 compared to fiscal 2011, although its core markets remain weak. For the period from June 22, 2012 to October 28, 2012, Metl-Span contributed revenue and operating income of $64.0 million and $4.7 million, respectively. The integration of Metl-Span is proceeding well. We rolled our two legacy insulated metal panel plants under the Metl-Span management team, and they have begun to introduce our full components product line to their customers.

The metal coil coating segment had a successful year both growing its third party sales, as well as refurbishing our new Middletown, Ohio light gauge paint facility, which we expect to be on line in December 2012. The timing is excellent as we are becoming an important second source supplier for larger customers due to recent industry consolidation.

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. Our sales normally are lower in the first calendar quarter of each year compared to the other three quarters because of unfavorable weather conditions for construction and typical business planning cycles affecting construction.

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, has reduced demand for our products and adversely affected our business. In addition, the tightening of credit in financial markets over the same period has 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:

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Source: 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, updated in October 2012, indicates an expected increase of 1% in square footage and a decrease of 10% in dollar value as compared to the prior calendar year. In calendar 2013, activity is expected to increase compared to calendar 2012, with an expected increase of 6% in square footage and an increase of 5% 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. AIA's architectural billing index ("ABI") is a closely watched metric, as billing growth for architectural 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 seasonally adjusted billings and a reading below 50 indicates a decrease in month-to-month seasonally adjusted billings. AIA's ABI published for October 2012 was above 50 at 52.8 and the commercial and industrial component of the index was at 50.7 for October 2012.

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 year ended October 28, 2012, steel represented approximately 72% of our costs 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, the availability of raw materials, competition, labor costs, freight and transportation costs, production costs, import duties and other trade restrictions.

The monthly CRU North American Steel Price Index, published by the CRU Group, has decreased 9.4% from October 2011 to October 2012 and was 16.8% higher in October 2011 compared to October 2010. For additional discussion of steel prices, see "Item 7A. Quantitative and Qualitative Disclosures About Market Risk."

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
1. Business - Raw Materials," "Item 1A. Risk Factors - We rely on a few major suppliers for our supply of steel, which makes us more vulnerable to supply constraints and pricing pressure, as well as the financial condition of those suppliers," "- Liquidity and Capital Resources - Steel Prices" and "Item 7A. Quantitative and Qualitative Disclosures About Market Risk - Steel Prices."

As a result of the market downturn in 2008 and 2009, we implemented a three-phase process to resize and realign our manufacturing operations. The purpose of these activities was to close some of our least efficient facilities and to retool certain facilities to allow us to better utilize our assets and expand into new markets or better provide products to our customers, such as insulated panel systems. As a result of the implementation of this three-phase restructuring plan, we are realizing significant fixed cost savings compared to fiscal year 2008. We have incurred facility closure costs of $20.3 million from October 29, 2007 through October 31, 2010 related to the three-phase restructuring plan and have not incurred significant additional costs beyond fiscal 2010 under the plan.

RESULTS OF OPERATIONS

The following table presents, as a percentage of sales, certain selected consolidated financial data for the periods indicated:

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                                                Fiscal year ended
                           October 28,             October 30,             October 31,
                               2012                   2011                    2010
Sales                             100.0 %            100.0 %                 100.0 %
Cost of sales,
excluding asset                      77.8               79.0                    80.4
impairments
(recoveries)
Asset impairments                     0.0                0.1                     0.1
(recoveries)
Gross profit                         22.2               20.9                    19.5
Engineering,
selling, general and                 19.0               21.1                    21.9
administrative
expenses
Acquisition-related                   0.5
costs
Restructuring                           -               (0.0 )                   0.4
charges (recovery)
Income (loss) from                    2.7               (0.2 )                  (2.8 )
operations
Interest income                       0.0                0.0                     0.0
Interest expense                    (1.4)               (1.6 )                  (2.0 )
Debt extinguishment                 (0.5)                  -                    (0.0 )
costs, net
Other income, net                     0.0                0.1                     0.2
Income (loss) before                  0.8               (1.7 )                  (4.6 )
income taxes
Provision (benefit)                   0.4               (0.7 )                  (1.5 )
from income taxes
Net income (loss)                    0.4%               (1.0 )%                 (3.1 )%

SUPPLEMENTARY BUSINESS SEGMENT INFORMATION

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 our 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 BayŽ Systems 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 share-based compensation expenses, and executive, legal, finance, tax, treasury, human resources, information technology, purchasing, marketing and corporate travel expenses. Additional unallocated expenses include interest income, interest expense, debt extinguishment costs and other income (expense). Segment information is included in Note 22 of our Consolidated Financial Statements.

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

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                           2012                    %                    2011                    %                    2010                    %
Total sales:
Metal coil          $         210,227                   18       $        201,098                 21          $        181,874                 21
coating
Metal components              534,853                   46                437,655                 46                   415,857                 48
Engineered                    643,473                   56                548,594                 57                   490,746                 56
building systems
Intersegment                (234,543)                 (20)               (227,770 )              (24 )                (217,951 )              (25 )
sales
Total net sales     $       1,154,010                  100       $        959,577                100          $        870,526                100
External sales:
Metal coil          $          81,106                    7       $         75,394                  8          $         65,240                  7
coating
Metal components              446,720                   39                353,797                 37                   328,077                 38
Engineered                    626,184                   54                530,386                 55                   477,209                 55
building systems
Total net sales     $       1,154,010                  100       $        959,577                100          $        870,526                100
Operating income
(loss):
Metal coil          $          22,322                            $         17,944                             $         16,166
coating
Metal components               34,147                                      20,643                                       26,791
Engineered                     37,596                                      13,011                                      (18,438 )
building systems
Corporate                    (62,376)                                     (53,225 )                                    (49,106 )
Total operating     $          31,689                            $         (1,627 )                           $        (24,587 )
income (loss)
Unallocated other            (22,692)                                     (14,720 )                                    (15,620 )
expense
Income (loss)
before income       $           8,997                            $        (16,347 )                           $        (40,207 )
taxes

RESULTS OF OPERATIONS FOR FISCAL 2012 COMPARED TO FISCAL 2011

Consolidated sales increased by 20.3%, or $194.4 million for fiscal 2012, compared to fiscal 2011. The increase resulted from higher tonnage volumes in each of our segments for fiscal 2012 compared to fiscal 2011 which was driven by improved demand in the end use sectors we serve compared to the prior year. In addition, this increase resulted from higher relative sales prices in each of our segments, which mainly increased as a result of the pass-through of higher underlying steel costs.

Consolidated cost of sales increased by 18.5%, or $140.0 million for fiscal 2012, compared to fiscal 2011. Gross margins were 22.2% for fiscal 2012 compared to 20.9% for fiscal 2011. The increase in gross margins was the result of higher relative sales prices and increased volumes in each of our segments as noted above.

Consolidated asset impairments (recoveries) improved by 100.8%, or $1.1 million for fiscal 2012, compared to fiscal 2011. We recorded asset impairments of $1.1 million in fiscal 2011, which included $1.0 million related to assets held for sale. We did not experience similar impairments in fiscal 2012.

Metal coil coating sales increased by 4.5%, or $9.1 million to $210.2 million in fiscal 2012, compared to $201.1 million in the same period in the prior year. Sales to third parties for fiscal 2012 increased by 7.6% to $81.1 million from $75.4 million in the same period in the prior year, primarily as a result of an 11.6% increase in tons shipped due to the acquisition of new customers and end users. This increase was partially offset by 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 remaining $3.4 million represents an increase in intersegment sales for fiscal 2012 compared to the same period in the prior year. Metal coil coating third-party sales accounted for 7.0% of total consolidated third-party sales in fiscal 2012 compared to 7.9% in fiscal 2011.

Operating income of the metal coil coating segment increased to $22.3 million in fiscal 2012, compared to $17.9 million in the same period in the prior year. The $4.4 million increase resulted from a $3.3 million increase in gross profit due to external volume as noted above, the improvements in our manufacturing

efficiencies, pass-through of higher underlying steel costs and a $1.1 million decrease in selling and administrative expenses related to lower legal expenses.

Metal components sales increased 22.2%, or $97.2 million to $534.9 million in fiscal 2012, compared to $437.7 million in the same period in the prior year. This increase was primarily due to an 18.8% increase in external tons shipped and higher sales prices, which mainly increased as a result of the pass-through of higher underlying steel costs, partially offset by a 7.3% reduction in internal volume. These results were driven by the inclusion of Metl-Span which contributed $64.0 million of external sales since June 22, 2012 when Metl-Span was acquired, and improved demand in the end use sectors we serve in fiscal 2012. Sales to third parties for fiscal 2012 increased $92.9 million to $446.7 million from $353.8 million in the same period in the prior year. The remaining $4.3 million represents an increase in intersegment sales. Metal components third-party sales accounted for 38.7% of total consolidated third-party sales in fiscal 2012 compared to 36.9% in fiscal 2011.

Operating income of the metal components segment increased to $34.1 million in fiscal 2012, compared to $20.6 million in the same period in the prior year. The $13.5 million increase resulted from a $25.2 million increase in gross profit due to a $1.9 million recovery in the current period compared to a $2.4 million charge in the same period of the prior year related to an actuarial determined general liability accrual, an increase in sales prices and external tons shipped as noted above and the inclusion of Metl-Span which contributed $4.7 million of operating income since June 22, 2012 when Metl-Span was acquired. This increase was partially offset by an $11.8 million increase in selling and administrative expenses related to a $6.2 million increase in wages and commissions, a $2.8 million increase in depreciation and amortization primarily as a result of Metl-Span and $1.6 million of Metl-Span intangibles amortized during the period and a $0.9 million increase in healthcare costs as a result of higher claims, partially offset by a $0.9 million decrease in bad debt expense.

Engineered building systems sales increased 17.3%, or $94.9 million to $643.5 million in fiscal 2012, compared to $548.6 million in the same period in prior year. This increase resulted from a 16.1% increase in external tons shipped and higher sales prices which mainly increased as a result of the pass-through of higher underlying steel costs. These results were driven by improved demand in the end use sectors we serve in fiscal 2012. Sales to third parties for fiscal 2012 increased $95.8 million to $626.2 million from $530.4 million in the same period in the prior year. The remaining $0.9 million represents a decrease in intersegment sales. Engineered building systems third-party sales accounted for 54.3% of total consolidated third-party sales in fiscal 2012 compared to 55.3% in fiscal 2011.

Operating income of the engineered building systems segment improved to $37.6 million in fiscal 2012 compared to $13.0 million in the same period in the prior year. This $24.6 million improvement resulted from a $31.2 million increase in gross profit. The increase in gross profit was due to increases in external tons shipped and relative sales prices as noted above and $1.0 million of impairment charges in the same period in the prior year. These improvements were partially offset by a $6.5 million increase in engineering, selling and administrative expenses. The increase in engineering, selling and administrative expenses was due to a $5.8 million increase in wages, commissions and benefit costs which was mainly the result of higher volume and a $0.8 million increase in legal contingencies and costs.

Consolidated engineering, selling, general and administrative expenses, consisting of engineering, drafting, selling and administrative costs, increased to $219.3 million in fiscal 2012, compared to $202.4 million in the same period in the prior year. The $17.0 million increase in engineering, selling and administrative expenses was primarily due to a $17.0 million increase in wages, commissions and benefit costs which was mainly the result of higher volume, a $2.3 million increase in depreciation and amortization primarily as a result of Metl-Span and $1.6 million of Metl-Span intangibles amortized during the period and $0.5 million in one-time executive retirement costs. These increases were partially offset by a $1.9 million recovery in the current period compared to a $2.4 million charge in the same period of the prior year related to an actuarial determined general liability accrual and a $1.6 million decrease in bad debt expense. As a percentage of sales, engineering, selling, general and administrative expenses were 19.0% for fiscal 2012 as compared to 21.1% for fiscal 2011.

Acquisition-related costs for fiscal 2012 were $5.0 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 "- Liquidity and Capital Resources - Acquisition of Metl-Span LLC."

Consolidated interest expense increased by 7.0% to $16.8 million for fiscal 2012, compared to $15.7 million for the same period of the prior year. Interest expense increased primarily due to an increase in 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 balances prior to June 22, 2012.

Debt extinguishment costs for fiscal 2012 was $6.4 million. There was no amount recorded in the same period of the prior year. During 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 fiscal 2012, we recognized a non-cash charge of $1.3 million, related to the deferred financing costs.

Other income (expense), net decreased to $0.5 million for fiscal 2012, compared to $0.9 million for the same period in the prior year. This decrease was . . .