September 5, 2018
Donald R. Riley
President and Chief Executive Officer
NCI Building Systems, Inc.
10943 North Sam Houston Parkway West
Houston, TX 77064
Re: NCI Building Systems, Inc.
Preliminary Merger Proxy Statement on Schedule 14A
Filed August 9, 2018
File No. 001-04714
Dear Mr. Riley:
We have reviewed your filing and have the following comments. In some of
our
comments, we may ask you to provide us with information so we may better
understand your
disclosure.
Please respond to these comments within ten business days by providing
the requested
information or advise us as soon as possible when you will respond. If you do
not believe our
comments apply to your facts and circumstances, please tell us why in your
response.
After reviewing your response to these comments, we may have additional
comments.
Form PREM 14A filed August 9, 2018
General
1. Please provide an analysis regarding the availability of the exemption
contained in Section
4(a)(2) for the issuance of the 58,709,067 shares in the merger.
Unaudited Pro Forma Condensed Combined Financial Information
Note 4 Accounting Policies, page 111
2. We note your disclosure that you will review Ply Gem's accounting
policies that may
result in the identification of differences in accounting policies that
could have a material
impact. While we understand the analysis to date may not have been as
comprehensive as
will be required when you complete the business combination, it is
unclear how or why
your process would not be expected to identify material differences.
Please revise your
Donald R. Riley
FirstName LastNameDonald R. Riley
NCI Building Systems, Inc.
Comapany 5, 2018 Building Systems, Inc.
September NameNCI
September 5, 2018 Page 2
Page 2
FirstName LastName
disclosures to provide a better understanding of the procedures used
to identify materially
differing accounting policies, along with what additional procedures
you will perform
once the business combination is completed and why you are not able to
perform those
procedures for purposes of preparing the pro forma financial
statements.
Note 6 Pro Forma Adjustments, page 112
3. For Note 6.k., please disclose the loan amount along with the interest
rate used to provide
shareholders with sufficient information to understand how the
adjustment was
calculated. Please refer to Article 11-02(b)(6) of Regulation S-X for
guidance.
Note 7 Ply Gem-Atrium Merger Pro Forma Adjustments, page 114
4. Please expand your disclosures to clarify the ownership interest of
the Sponsor Fund X
Investor and the GGC Investors of Ply Gem and Atrium before the merger
and for the
combined entity. Please refer to ASC 805-10-50-2.c. for guidance.
5. We note your disclosure regarding the potential for identifying
additional differences in
accounting policies that could have a material impact. While we
understand that you are
four months into your acquisition accounting process, it is unclear
how or why your
process would not be expected to at least identify all material
adjustments. Please revise
your disclosures to provide a better understanding of the procedures
used to identify
materially differing accounting policies, along with what additional
procedures are
remaining to be performed and why you are not able to perform those
procedures for
purposes of preparing the pro forma financial statements.
6. For Note 7.q., please disclose the estimated fair value for each
category of tangible assets,
given the variation in useful lives, along with a discussion for how
the useful lives were
estimated considering the decrease in depreciation expense compared to
historical
amounts.
7. For Note 7.f., please provide a qualitative description of the factors
that make up the
goodwill in accordance with ASC 805-30-50-1.a. Please also provide the
disclosures
required by ASC 805-30-50-1.e.
8. Please expand your disclosures regarding the preliminary nature of the
purchase price
allocation to provide the information required by ASC 805-20-50-4A.
This expanded
disclosure should include an explanation for the certain Ply Gem
deferred tax assets,
valuation allowance and tax receivable agreement liability. In
addition, please tell us
whether you have completed an assessment of Atrium's net operating
loss carryforwards
deferred tax asset of $128.2 million that Atrium had recognized a full
valuation allowance
and what the result of your assessment is currently.
Donald R. Riley
FirstName LastNameDonald R. Riley
NCI Building Systems, Inc.
Comapany 5, 2018 Building Systems, Inc.
September NameNCI
September 5, 2018 Page 3
Page 3
FirstName LastName
9. Please provide disclosure that explains why the $602.4 million
preliminary purchase price
for Atrium exceeds the $389.6 million cash payment for the
consideration for Atrium
included in Note 7.b. Please also refer to the disclosure requirements
for noncontrolling
interest in ASC 805-20-50-1.e. with regards to your disclosure in Note
7.m.iv.
10. For Note 7.u., please disclose the loan amount along with the interest
rate used to provide
shareholders with sufficient information to understand how the
adjustment was
calculated. Please refer to Article 11-02(b)(6) of Regulation S-X for
guidance.
Index to Financial Statements, page F-1
11. Please provide updated financial statements in accordance with Article
3-12(g) of
Regulation S-X.
1. Summary of Significant Accounting Policies, page F-60
12. Please remove the references to your 2017 Annual Report on Form 10-K,
as it is not
incorporated by reference. Please also address this in your
Management's Discussion and
Analysis of Financial Condition and Results of Operations section.
Management's Discussion and Analysis of Financial Condition and Results of
Operations, page
F-84
13. Please provide a discussion and analysis of your consolidated and
segment results,
liquidity and capital resources for each of the annual periods
presented. Please also
address this comment for Atrium Corporation.
14. Please include your disclosures for the critical judgments and
estimates made in the
preparation of your consolidated financial statements and contractual
obligations rather
than referring to your 2017 Annual Report on Form 10-K, as it is not
incorporated by
reference.
Quantitative And Qualitative Disclosures About Market Risk, page F-94
15. Please expand your disclosures to include information for fiscal year
2017 in addition to
the quarter ended March 31, 2018. Please also address this comment for
Atrium
Corporation.
Report of Independent Certified Public Accountants, page F-97
16. Please request your independent registered public accountant to
provide you with a report
that complies with the format and language required in Auditing
Standard 3101.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Donald R. Riley
NCI Building Systems, Inc.
September 5, 2018
Page 4
You may contact Tracey Houser, Staff Accountant, at (202) 551-3736 or
Melissa Rocha,
Senior Assistant Chief Accountant, at (202) 551-3754 if you have questions
regarding comments
on the financial statements and related matters. Please contact Sergio Chinos,
Staff Attorney, at
(202) 551-7844 or Jay Ingram, Legal Branch Chief, at (202) 551-3397 with any
other questions.
Sincerely,
FirstName LastNameDonald R. Riley
Division of
Corporation Finance
Comapany NameNCI Building Systems, Inc.
Office of
Manufacturing and
September 5, 2018 Page 4 Construction
FirstName LastName