10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended October 29, 2005

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 1–14315

NCI BUILDING SYSTEMS, INC.

(Exact name of registrant as specified in its charter)

Delaware	76–0127701
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

10943 North Sam Houston Parkway West 77064

(Address of principal executive offices and zip code)

(281) 897–7788

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common Stock, $0.01 par value	New York Stock Exchange
Rights to purchase Series A Junior Preferred Stock	New York Stock Exchange

Securities registered pursuant to section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes   x    No  ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.    Yes   ¨    No  x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.    Yes   x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨ Accelerated filer x Non-accelerated filer ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

The aggregate market value of the voting and non-voting common stock held by non-affiliates of the registrant on April 30, 2005, was $669,854,972, which aggregate market value was calculated using the closing sales price reported by the New York Stock Exchange as of the last day of the registrant’s most recently completed second fiscal quarter.

The number of shares of common stock of the registrant outstanding on January 11, 2006 was 20,352,073.

DOCUMENTS INCORPORATED BY REFERENCE

Certain information required by Parts I and II of this Annual Report is incorporated by reference from the registrant’s 2005 Annual Report to Shareholders, and certain information required by Part III of this Annual Report is incorporated by reference from the registrant’s definitive proxy statement for its annual meeting of shareholders to be held on March 10, 2006.

TABLE OF CONTENTS

PART I		3
Item 1.	Business	3
Item 1A.	Risk Factors	16
Item 2.	Properties	20
Item 3.	Legal Proceedings	21
Item 4.	Submission of Matters to a Vote of Security Holders	22
PART II		22
Item 5.	Market for Registrant’s Common Equity and Related Stockholder Matters	22
Item 6.	Selected Financial Data	23
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	23
Item 8.	Financial Statements and Supplementary Data	24
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	24
Item 9A.	Controls and Procedures	24
PART III		25
Item 10.	Directors and Executive Officers of the Registrant	25
Item 11.	Executive Compensation	25
Item 12.	Security Ownership of Certain Beneficial Owners and Management	25
Item 13.	Certain Relationships and Related Transactions	25
Item 14.	Principal Accounting Fees and Services	25
Item 15.	Exhibits and Financial Statement Schedules	26

This Annual Report contains forward-looking statements concerning our business and operations. Forward-looking statements involve a number of risks and uncertainties, and our actual performance may differ materially from that projected in such statements. Among the factors that could cause actual results to differ materially are industry cyclicality and seasonality, fluctuations in demand and prices for steel, the financial condition of our raw material suppliers, competitive activity and pricing pressure, ability to execute our acquisition strategy and general economic conditions affecting the construction industry. These and other factors that could affect our financial position and results of operations are described in further detail in Item 1A. Risk Factors. We expressly disclaim any obligations to release publicly any updates or revisions to these forward-looking statements to reflect any changes in our expectations.

PART I

Item 1. Business.

General

NCI Building Systems, Inc. (together with its subsidiaries and predecessors, unless the context requires otherwise, the “Company,” “we,” “us” or “our,”) is one of North America’s largest integrated manufacturers of products for the nonresidential construction industry. We operate 37 manufacturing facilities located in 16 states and Mexico. We sell metal components, engineered building systems and metal coil coating services, offering one of the most extensive metal product lines in the building industry with well-recognized brand names. We believe that our leading market positions and strong track record of growth and profitability have resulted from our focus on:

• controlling operating and administrative costs;

• managing working capital and fixed assets;

• developing new markets and products; and

• successfully identifying strategic growth opportunities.

We believe that metal products have gained and continue to gain a greater share of the new nonresidential construction and repair and retrofit markets. This is due to increasing acceptance and recognition of the benefits of metal products in building applications. Metal products and 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 have a history of making acquisitions within our industry, and we regularly evaluate growth opportunities both through acquisitions and internal investment. We believe that there are numerous opportunities for growth through consolidation in the metal buildings and components industry, and our goal is to continue to grow through strategic acquisitions, as well as organically. In furtherance of this strategy, in November 2004, we completed an offering of $180 million aggregate principal amount of 2.125% convertible senior subordinated notes due 2024. We will continue to use the net proceeds from the offering to finance future acquisitions (see “—Acquisitions”). Pending our use of the net proceeds from the convertible notes offering for acquisitions, we have invested such proceeds in short-term debt securities or similar investments.

We also evaluate from time to time possible dispositions of assets or businesses when such assets or businesses are no longer core to our operations and do not fit into our long-term strategy. Consistent with our growth strategy, we frequently engage in discussions with potential sellers regarding the possible purchase by us of businesses, assets and operations that are strategic and complementary to our existing operations. Such assets and operations include engineered building systems and metal components, but may also include assets that are closely related to, or intertwined with, these business lines, and enable us to leverage our asset base, knowledge base and skill sets. Such acquisition efforts may involve participation by us in processes that have been made public, involve a number of potential buyers and are commonly referred to as “auction” processes, as well as situations in which we believe we are the only party or one of the very limited number of potential buyers in negotiations with the potential seller. These acquisition efforts often involve assets that, if acquired, would have a material effect on our financial condition and results of operations.

The Company was founded in 1984 and we reincorporated in Delaware in 1991. In 1998, we acquired Metal Building Components, Inc. and doubled our revenue base. With the merger, we became the largest domestic manufacturer of nonresidential metal components. Our principal offices are located at 10943 North Sam Houston Parkway West, Houston, Texas 77064, and our telephone number is (281) 897–7788.

3

We file annual, quarterly and current reports and other information with the Securities and Exchange Commission (the “SEC”). Our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, along with any amendments to those reports, are available free of charge at our corporate website at http://www.ncilp.com as soon as practicable after such material is electronically filed with, or furnished to, the SEC. In addition, our website includes other items related to corporate governance matters, including our corporate governance guidelines, charters of various committees of our board of directors and the code of business conduct and ethics applicable to our employees, officers and directors. You may obtain copies of these documents, free of charge, from our corporate website. However, the information on our website is not incorporated by reference into this Form 10-K.

Business Segments

We have divided our operations into three reportable segments: metal components, engineered building systems and metal coil coating, based upon similarities in product lines, manufacturing process, marketing and management of our business. Products of all three segments use the same basic raw materials. The engineered building systems segment includes the manufacturing of main frames and Long Bay® Systems, and includes value added engineering and drafting, which are typically not part of metal components or metal coil coating products or services. Metal coil coating consists of cleaning, treating and painting continuous steel coils before the steel is fabricated for use by construction and industrial users. Our sales to outside customers, operating income and total assets attributable to these business segments were as follows for the fiscal years indicated (in thousands):

	2003					2004					2005
Sales:
Metal components	$	518,587		58	%	$	637,685		59	%	$	681,778		60	%
Engineered building systems		310,491		35			407,483		37			446,307		39
Metal coil coating		175,410		19			234,886		22			232,648		21
Intersegment sales		(106,338	)	(12	)		(195,191	)	(18	)		(230,667	)	(20	)
Total net sales	$	898,150		100	%	$	1,084,863		100	%	$	1,130,066		100	%
Operating income:
Metal components	$	45,851		9	%	$	76,724		12	%	$	79,223		12	%
Engineered building systems		18,055		6			31,340		8			44,865		10
Metal coil coating		21,204		12			26,444		11			20,157		9
Corporate		(27,947	)	—			(37,532	)	—			(39,775	)	—
Total operating income (% of Sales)	$	57,163		6	%	$	96,976		9	%	$	104,470		9	%
Unallocated other expense		19,605					22,319					8,259
Income before income taxes	$	37,558				$	74,657				$	96,211
Total assets as of fiscal year end 2004 and 2005:
Metal components						$	323,026		41	%	$	360,793		36	%
Engineered building systems							223,418		28			250,653		25
Metal coil coating							196,762		25			155,009		16
Corporate							43,220		6			223,764		23
Total assets						$	786,426		100	%	$	990,219		100	%

For more business segment information, please see the business segment information contained in Note 18 to our consolidated financial statements included in our 2005 Annual Report to Shareholders.

Metal Components. We are one of the largest domestic suppliers of metal components to the nonresidential building industry. We design, manufacture, sell and distribute one of the widest selections of components for a variety of new construction applications as well as for repair and retrofit uses.

The following are the types of products we sell:

• Metal roof and wall systems;

• Secondary structural members;

• Flashings and accessories;

4

• Roll-up and sectional doors; and

• Interior partition systems.

Our products are used in the following markets:

• Industrial;

• Governmental;

• Community;

• Self-storage;

• Commercial;

• Agricultural; and

• Residential.

We market our metal components products nationwide primarily through a direct sales force under several brand names. These brand names include “Metal Building Components” (“MBCI”), “American Building Components” (“ABC”), “Doors and Building Components” (“DBCI”), “NCI Metal Depots,” “Able Doors,” “Heritage Building Systems, Inc.” (“Heritage”) and “Steelbuilding.com, Inc.” (“Steelbuilding.com”).

Engineered Building Systems. We are one of the largest domestic suppliers of engineered building systems. We design, manufacture and market engineered building systems, self-storage building systems and metal home framing systems for commercial, industrial, agricultural, governmental, community and residential uses. We market these systems nationwide through authorized builder networks totaling over 1,800 builders and a direct sales force under several brand names. These brand names include “Metallic,” “Mid-West Steel,” “A & S,” “All American,” “Steel Systems,” “Mesco,” and “IPS.”

Metal Coil Coating. We provide products and services, including the cleaning, treatment and painting of various flat-rolled metal coil substrates and the slitting/embossing of painted coils. We clean, treat and coat hot roll and light gauge metal coils for our own use in our other two business segments, supplying substantially our entire internal metal coil coating requirements. In fiscal 2005, our internal use accounted for approximately 54% of our production. We also clean, treat and coat hot roll metal coils and light gauge metal for third parties for a variety of applications, including construction products, heating and air conditioning systems, water heaters, lighting fixtures and office furniture. We market our metal coil coating services nationwide under the brand names “Metal Coaters,” “Metal-Prep” and “DOUBLECOTE.”

Industry Overview

The building industry encompasses a broad range of metal products, principally composed of steel, sold through a variety of distribution channels for use in diverse applications. These metal products include metal components and engineered building systems.

METAL COMPONENTS. Manufacturers of metal components supply products to the building industry. These products include metal roof and wall systems, metal partitions, metal trim, doors and other related accessories. These products are used in new construction and in repair and retrofit applications for commercial, industrial, agricultural, governmental, community, residential and self-storage uses. Metal components are used in a wide variety of construction applications, including purlins and girts, roofing, standing seam roofing, walls, doors, trim and other parts of traditional buildings, as well as in architectural applications and engineered building systems. Although precise market data is limited, we estimate the metal components market including roofing applications to be a multi-billion dollar market. We believe that the metal components business is less affected by economic cycles than the engineered building systems business due to the use of metal components in repair and retrofit applications. We believe that metal products have gained and continue to gain a greater share of new construction and repair and retrofit markets due to increasing acceptance and recognition of the benefits of metal products in building applications.

5

Metal roofing accounts for a significant portion of the overall metal components market, but less than 10% of total roofing material expenditures. As a result, we believe that significant opportunities exist for metal roofing, with its advantages over conventional roofing materials, to increase its overall share of this market. Metal roofing systems have several advantages over conventional roofing systems, including the following:

Lower lifecycle cost. The total cost over the life of metal roofing systems is lower than that of conventional roofing systems for both new construction and retrofit roofing. For new construction, the cost of installing metal roofing is greater than the cost of conventional roofing. Yet, the longer life and lower maintenance costs of metal roofing make the cost more attractive. For retrofit roofing, although installation costs are 60%-70% higher for metal roofing due to the need for a sloping support system, the lower ongoing costs more than offset the initial cost.

Increased longevity. Metal roofing systems generally last for 20 years without requiring major maintenance or replacement. This compares to five to 10 years for conventional roofs. The cost of leaks and roof failures associated with conventional roofing can be very high, including damage to building interiors and disruption of the functional usefulness of the building. Metal roofing prolongs the intervals between costly and time-consuming repair work.

Attractive aesthetics and design flexibility. Metal roofing systems allow architects and builders to integrate colors and geometric design into the roofing of new and existing buildings, providing an increasingly fashionable means of enhancing a building’s aesthetics. Conventional roofing material is generally tar paper or a gravel surface, and building designers tend to conceal roofs made with these materials.

ENGINEERED BUILDING SYSTEMS. Engineered building systems consist of engineered structural members and panels that are fabricated and roll formed in a factory. These systems are custom designed and engineered to meet project requirements and then shipped to a construction site complete and ready for assembly with no additional field welding required. Engineered building systems manufacturers design an integrated system that meets applicable building code and designated end use requirements. These systems consist of primary structural framing, secondary structural members (purlins and girts) and metal roof and wall systems.

Over the last 15 years, engineered building systems have significantly increased penetration of the market for nonresidential low rise structures and are being used in a broad variety of other applications. According to the Metal Building Manufacturers Association (“MBMA”), reported sales of engineered building systems increased from approximately $1.5 billion in 1993 to approximately $2.5 billion in 2000. We believe this increase resulted primarily from (i) significant cost advantages offered by these systems, (ii) increased architectural acceptance of engineered building systems for construction of commercial and industrial building projects, (iii) advances in design versatility and production processes, and (iv) a favorable economic environment through the year 2000. In 2001, the MBMA reported a decline of 21% in sales to approximately $2.0 billion, which was in-line with the general decline in nonresidential construction. This downturn continued into 2002 with a further decline of 9% from the 2001 level to approximately $1.8 billion. In 2003, MBMA reported that sales of engineered building systems declined an additional 4% to approximately $1.7 billion. In 2004, changes in the economy and steel pricing increases ended the downward trend. According to the MBMA, recorded sales for 2004 totaled approximately $2.4 billion. We believe that the MBMA data support the fact that metal buildings and components gained market share in the nonresidential construction market industry in 2004. Although final 2005 sales information is not yet available from the MBMA, we estimate that sales of engineered building systems have continued to increase throughout 2005 as in 2004. We expect the upward trend in industry sales to continue in 2006 as nonresidential construction markets show ongoing improvements.

6

We believe the cost of an engineered building system generally represents approximately 15%-20% of the total cost of constructing a building, which includes land cost, labor, plumbing, electrical, heating and air conditioning systems installation and interior finish. Technological advances in products and materials, as well as significant improvements in engineering and design techniques, have led to the development of structural systems that are compatible with more traditional construction materials. Architects and designers now often combine an engineered building system with masonry, glass and wood exterior facades to meet the aesthetic requirements of customers while preserving the inherent characteristics of engineered building systems. As a result, the uses for engineered building systems now include office buildings, showrooms, retail shopping centers, banks, schools, warehouses, factories, distribution centers, government buildings and community centers for which aesthetics and architectural features are important considerations of the end users.

In our marketing efforts, we and other major manufacturers generally emphasize the following characteristics of engineered building systems to distinguish them from other methods of construction:

Shorter construction time. In many instances, it takes less time to construct an engineered building than other building types. In addition, because most of the work is done in the factory, the likelihood of weather interruptions is reduced.

More efficient material utilization. The larger engineered building systems manufacturers use computer-aided analysis and design to fabricate structural members with high strength-to-weight ratios, minimizing raw materials costs.

Lower construction costs. The in-plant manufacture of engineered building systems, coupled with automation, allows the substitution of less expensive factory labor for much of the skilled on-site construction labor otherwise required for traditional building methods.

Greater ease of expansion. Engineered building systems can be modified quickly and economically before, during or after the building is completed to accommodate all types of expansion. Typically, an engineered building system can be expanded by removing the end or side walls, erecting new framework and adding matching wall and roof panels.

Lower maintenance costs. Unlike wood, metal is not susceptible to deterioration from cracking, rotting or insect damage. Furthermore, factory-applied roof and siding panel coatings resist cracking, peeling, chipping, chalking and fading.

METAL COIL COATING. Metal coil coating consists of cleaning, treating and painting various flat rolled metal coil substrates, as well as slitting and/or embossing the painted coils, before the steel is fabricated for use by various industrial users. Light gauge and medium gauge steel coils that are painted, either for decorative or corrosion protection purposes, are used in the building industry by manufacturers of metal components and engineered building systems. In addition, these painted steel coils are used by manufacturers of other steel products, such as water heaters, lighting fixtures and ceiling grids.

According to information collected by the National Coil Coating Association and other market information available to us, we believe that approximately 4.5 million tons of light gauge steel and one million tons of hot rolled, medium gauge steel are coated in the United States annually.

Consolidation. Over the last several years, there has been consolidation in the metal components, engineered building systems and metal coil coating industries, which include a large number of small local and regional firms. We believe that these industries will continue to consolidate, driven by the needs of manufacturers to increase manufacturing capacity, achieve greater process integration and add geographic diversity to meet customers’ product and delivery needs, improve production efficiency and manage costs. We used a portion of the proceeds of our November 2004 offering of convertible notes to finance our acquisitions of Heritage and Steelbuilding.com and our joint venture partner’s 49% interest in our Monterrey, Mexico manufacturing facility (see
“—Acquisitions”). We intend to use the remaining proceeds from the issuance of the convertible notes to finance future acquisitions.

7

Products and Markets

Our product lines consist of metal components, engineered building systems and metal coil coating services.

Metal Components. Our metal components consist of individual components, including secondary structural framing, metal roof and wall systems and associated metal trims, which are sold directly to contractors or end users for use in the building industry, including the construction of metal buildings. We also stock and market metal component parts for use in the maintenance and repair of existing buildings. Specific component products consist of metal roof and wall systems, purlins, girts, partitions, header panels and related trim and screws. We believe we offer the widest selection of metal components in the building industry.

Purlins and girts are medium gauge, roll formed steel components. They are supplied to builders for secondary structural framing. We custom produce purlins and girts for our customers and offer the widest selection of sizes and profiles in the United States. Metal roof and wall systems protect the rest of the structure and the contents of the building from the weather. They may also contribute to the structural integrity of the building.

Our metal roofing products are attractive and durable. We use standing seam roof technology to replace traditional built-up and single-ply roofs as well as to provide a distinctive look to new construction. We manufacture and design metal roofing systems for sales to regional metal building manufacturers, general contractors and subcontractors. We believe we have the broadest line of standing seam roofing products in the building industry. In addition, we have granted 15 licenses relating to our standing seam roof technology. Although metal roofing is somewhat more expensive than traditional roofing in up-front costs, its durability and low maintenance costs make metal roofing a lower cost roofing product after the first 10 years.

We manufacture roll-up and sectional overhead doors and sell interior and exterior walk doors for use in the self storage industry and metal and other buildings.

Engineered Building Systems. Engineered building systems consist of pre-engineered structural members and panels that are welded and roll formed in a factory and shipped to a construction site complete and ready for assembly. We design an integrated engineered building system that meets customer specifications and allows easy on-site assembly by the builder or independent contractor. Engineered building systems typically consist of three systems:

Primary structural framing. Primary structural framing, fabricated from heavy-gauge steel, supports the secondary structural framing, roof, walls and all externally applied loads. Through the primary framing, the force of all applied loads is structurally transferred to the foundation.

Secondary structural framing. Secondary structural framing consists of medium-gauge, roll-formed steel components called purlins and girts. Purlins are attached to the primary frame to support the roof. Girts are attached to the primary frame to support the walls. The secondary structural framing is designed to strengthen the primary structural framing and efficiently transfer applied loads from the roof and walls to the primary structural framing.

Metal roof and wall systems. Metal roof and wall systems not only lock out the weather but may also contribute to the structural integrity of the overall building system. Roof and wall panels are fabricated from light-gauge, roll-formed steel.

Accessory components complete the engineered building system. These components include doors, windows, gutters and interior partitions.

Our patented Long Bay® System allows for the construction of metal buildings with base spacings of up to 60 feet without internal supports. This compares to base spacings of up to 30 feet under other engineered building systems. The Long Bay® System virtually eliminates all welding at the site, which significantly reduces erection time compared with conventional steel construction. Our patented Long Bay® System is designed for larger buildings that typically require less custom engineering and design than our other engineered building systems, which allows us to meet our customers’ needs more quickly.

8

Metal Coil Coating. We provide our own light gauge metal coil coating products and services for use in metal component, door and engineered building systems manufacturing. We also provide pre-painted hot roll coils for our own use and to other manufacturers of engineered building systems and metal components. We also pre-paint light gauge steel coils for steel mills and metal service centers that supply the painted coils to various industrial users, including manufacturers of engineered building systems, metal components, lighting fixtures, ceiling grids, water heaters and other products.

Our metal coil coating operations apply a variety of paint systems to metal coils. The process generally includes cleaning, treating and painting the coil and slitting and/or embossing it to customer specifications. We believe that pre-painted metal coils are a better quality product, environmentally cleaner and more cost-effective than painted metal products prepared in other manufacturers’ in-house painting operations. Painted metal coils also offer manufacturers the opportunity to produce a broader and more aesthetically pleasing range of products.

Sales, Marketing and Customers

Metal Components. We sell metal components directly to regional manufacturers, contractors, subcontractors, distributors, lumberyards, cooperative buying groups and other customers under the brand names “MBCI,” “ABC,” “Insulated Panel Systems” (“IPS”) and “NCI Metal Depots.” Roll-up doors, sectional doors, interior and exterior doors, interior partitions and walls, header panels and trim are sold directly to contractors and other customers under the brand “DBCI” or “Able Doors.” These components also are produced for integration into self storage and engineered building systems sold by us. As of December 31, 2005, we also operate six NCI Metal Depot retail stores in Texas and New Mexico that sell components directly to the public.

We market our components products within four product lines: commercial/industrial, architectural, agricultural and residential.

Customers include small, medium and large contractors, specialty roofers, regional fabricators, regional engineered building fabricators and end users. Commercial and industrial businesses are heavy users of metal components and metal buildings systems. Standing seam roof and architectural customers are growing in importance. As metal buildings become a more acceptable building alternative and aesthetics become an increasingly important consideration for end users of metal buildings, we believe that architects are participating in the design and purchase decisions using metal components to a greater extent. Wood frame builders also purchase our metal components through distributors, lumberyards, cooperative buying groups and chain stores for various uses, including agricultural buildings. Residential customers are generally contractors building upscale homes that require an architect-specified product.

Our metal components sales operations are organized into four geographic regions. Each region is headed by a general sales manager supported by individual plant sales managers. Each local sales office is located adjacent to a manufacturing plant and is staffed by a direct sales force responsible for contacting customers and architects and a sales coordinator who supervises the sales process from the time the order is received until it is shipped and invoiced. The regional and local focus of our customers requires extensive knowledge of local business conditions. During fiscal 2005, our largest customer for metal components accounted for less than 1% of our total consolidated sales.

We provide our customers with product catalogs tailored to our product lines, which include product specifications and suggested list prices. Some of our catalogs are available on-line through the internet, which enables architects and other customers to download drawings for use in developing project specifications. Customers place orders via telephone or facsimile to a sales coordinator at the regional office where the sales coordinator enters it onto a standard order form. The form is then sent via computer to the plant and downloaded automatically to the production machines.

9

Engineered Building Systems. We sell engineered building systems to builders, general contractors, developers and end users nationwide under the brand names “Metallic,” “Mid-West Steel,” “A & S,” “All American,” and “Mesco.” We market engineered building systems through an in-house sales force to authorized builder networks of over 1,800 builders. We also sell engineered building systems under the names “All American” and “Steel Systems” to various private labels.

Our authorized builder networks consist of independent general contractors that market our Metallic Buildings, Mid-West Steel Buildings, A & S Buildings and Mesco products to end users. Most of our sales of engineered building systems outside of Texas and surrounding states are through our authorized builder networks. We rely upon maintaining a satisfactory business relationship for continuing job orders from our authorized builders and do not consider the builder agreements to be material to our business. During fiscal 2005, our largest customer for engineered building systems accounted for approximately 1% of our total consolidated sales.

We enter into an agreement with an authorized builder, which generally grants the builder the non-exclusive right to market our products in a specified territory. The agreement is cancelable by either party on 60 days’ notice. The agreement does not prohibit the builder from marketing engineered building systems of other manufacturers. We establish an annual sales goal for each builder and provide the builder with sales and pricing information, design and engineering manuals, drawings and assistance, application programs for estimating and quoting jobs and advertising and promotional literature. We also defray a portion of the builder’s advertising costs and provide volume purchasing and other pricing incentives to encourage it to deal exclusively or principally with us. The builder is required to maintain a place of business in its designated territory, provide a sales organization, conduct periodic advertising programs and perform construction, warranty and other services for customers and potential customers. An authorized builder usually is hired by an end-user to erect an engineered building system on the customer’s site and provide general contracting and other services related to the completion of the project. We sell our products to the builder, which generally includes the price of the building as a part of its overall construction contract with its customer.

Our patented Long Bay® System provides us with an entry to builders that focus on larger buildings. This also provides us with new opportunities to cross-sell our other products to these new builders and to compete with the conventional construction industry.

We have a National Accounts program, which is designed to provide our builders with access to the largest contractors and developers in the United States. We currently have a team of 14 people, which includes a field sales force of four, who comprise our National Accounts group. We market our engineered building systems and our patented Long Bay® System under this program using multiple brand names.

Metal Coil Coating. We have a small number of national accounts for our metal coil coating products and services. Each of our metal coil coating facilities has its own sales manager and sales staff. We market our metal coil coating products under the brand names DOUBLECOTE,” “Metal Coaters” and “Metal-Prep” and sell our products and services principally to manufacturers of painted steel products and steel mills, as well as to our own metal components and engineered building segments. During fiscal 2005, our largest customer accounted for approximately 3% of our total consolidated sales.

Manufacture and Design

Metal Components. We operate 23 facilities in 14 states used for manufacturing of metal components for the nonresidential construction industry, including four facilities for our door operations. With the exception of our architectural and standing seam products, we are not involved in the design process for the components we manufacture. Our doors, interior partitions and other related panel and trim products are manufactured at dedicated plants in Georgia, Texas and Arizona. Some metal components are processed at the Texas and Georgia plants and sent to the appropriate plant, which is generally determined based upon the lowest shipping cost.

Metal component products are roll-formed or fabricated at each plant using roll-formers and other metal working equipment. In roll forming, pre-finished coils of steel are unwound and passed through a series of progressive forming rolls that form the steel into various profiles of medium-gauge structural shapes and light-gauge roof and wall panels.

10

Engineered Building Systems. We operate nine facilities in five states, including our new state-of-the art facility located in Lexington, Tennessee, and one in Mexico, where our Long Bay® System is manufactured, for manufacturing and distributing engineered building systems. After we receive an order, our engineers design the engineered building system to meet the customer’s requirements and to satisfy applicable building codes and zoning requirements. To expedite this process, we use computer-aided design and engineering systems to generate engineering and erection drawings and a bill of materials for the manufacture of the engineered building system. We employ approximately 290 engineers and draftsmen in this area.

Once the specifications and designs of the customer’s project have been finalized, the manufacturing of frames and other building systems begins at one of our five frame manufacturing facilities in Texas, Tennessee or Mexico. The fabrication of the primary structural framing consists of a process in which steel plates are punched and sheared and then routed through an automatic welding machine and sent through further fitting and welding processes. The secondary structural framing and the covering system are roll-formed steel products that are manufactured at our full manufacturing facilities as well as our components plants.

Upon completion of the manufacturing process, structural framing members and metal roof and wall systems are shipped to the job site for assembly. Since on-site construction is performed by an unaffiliated, independent general contractor, usually one of our authorized builders, we generally are not responsible for claims by end users or owners attributable to faulty on-site construction. The time elapsed between our receipt of an order and shipment of a completed building system has typically ranged from four to eight weeks, although delivery can extend somewhat longer if engineering and drafting requirements are extensive.

Metal Coil Coating. We operate five metal coil coating facilities in five states, two of which are used for hot rolled, medium gauge steel coils and three of which are used for painting light gauge steel coils. While these facilities primarily service our needs, we also process steel coils at these facilities for other customers. Metal coil coating processes involve applying various types of chemical treatments and paint systems to flat rolled continuous coils of metal, including steel and aluminum. These processes give the coils a baked-on finish that both protects the metal and makes it more attractive. In the initial step of the coating process, various metals in coil form are flattened, cleaned and pretreated. The metal is then coated, oven cured, cooled, recoiled and packaged for shipment. Slitting and embossing services in accordance with customer specifications can also be performed on the coated metal before shipping. Hot roll medium gauge steel coils are typically used in the production of secondary structural framing of metal buildings and other structural applications. Painted light gauge steel coils are used in the manufacture of products for building exteriors, metal doors, lighting fixtures, ceiling grids, water heaters and other products.

Raw Materials

The principal raw material used in manufacturing of our metal components and engineered building systems is steel. Our various products are fabricated from steel produced by mills including bars, plates, structural shapes, sheets, hot rolled coils and galvanized or galvalume-coated coils. During fiscal 2005, we purchased the majority of our steel requirements from International Steel Group, Inc. (“ISG”)/Mittal Steel USA, Nucor and U.S. Steel. Mittal Steel USA purchased ISG in April 2005. Each of these suppliers accounted for more than 10% of our total steel purchases during fiscal 2004 and 2005. No other steel supplier accounted for more than 10% of steel purchases during fiscal 2004 and 2005. Although we believe concentration of our steel purchases among a small group of suppliers that have mills and warehouse facilities close to our facilities enables us, as a large customer of those suppliers, to obtain better pricing, service and delivery, loss of one or all of these suppliers could have a material adverse affect on our ability to obtain the raw materials required to meet delivery schedules to our customers (see “Item 1A. Risk Factors”). These suppliers generally maintain an inventory of the types of materials we require.

Our raw materials on hand increased significantly from prior levels to $103.4 million at October 30, 2004, primarily due to increased steel prices, the purchase of foreign steel on the spot market and the reduction of the consigned inventory programs by the steel mills. Our improved inventory management processes that we implemented during fiscal 2005 resulted in a reduction in our inventory on hand of approximately 24% to $83.2 million at October 29, 2005.

11

Beginning in the second quarter of fiscal 2004, there were unusually rapid and significant increases in steel prices and severe shortages in the steel industry due in part to increased demand from China’s expanding economy and high energy prices. Supply and prices from the domestic steel manufacturers and available foreign spot purchases began stabilizing at high relative volumes during our fourth fiscal quarter in 2004. Steel pricing increases for sheet, hot roll and structural abated during much of fiscal 2005. However, that abatement ended with steel price increases in October 2005. Overall, our weighted average cost of steel decreased in fiscal 2005 compared to fiscal 2004. Based on our belief that demand for nonresidential construction building materials will increase in fiscal 2006 over fiscal 2005, we expect to see moderate steel price increases during fiscal 2006. We do not have any long-term contracts for the purchase of raw materials. A prolonged labor strike against one of our principal domestic suppliers, or financial or other difficulties of a principal supplier that affects its ability to produce steel, could have a material adverse effect on our operations. Alternative sources, however, including foreign steel, are currently believed to be sufficient to maintain required deliveries. During fiscal 2002 and the first nine months of fiscal 2003, our then existing two principal steel suppliers both operated under the protection of bankruptcy laws, but we did not experience unusual shortages, delivery or quality issues with those suppliers during that period. The assets of both suppliers were acquired by U.S. Steel and ISG in the third quarter of 2003. In April 2005, Mittal Steel USA purchased ISG. The acquisition did not have a material effect on our results of operations.

Backlog

At October 29, 2005, the total backlog of orders for our products we believe to be firm was $207.2 million. This compares with a total backlog for our products of $153.1 million at October 30, 2004. Backlog primarily consists of engineered building systems orders. Job orders generally are cancelable by customers at any time for any reason. Occasionally, orders in the backlog are not completed and shipped for reasons that include changes in the requirements of the customers and the inability of customers to obtain necessary financing or zoning variances. None of the backlog at October 29, 2005 currently is scheduled to extend beyond fiscal 2006.

Competition

We and other manufacturers of metal components and engineered building systems compete in the building industry with all other alternative methods of building construction such as tilt-wall, concrete and wood, single ply and built up, all of which may be perceived as more traditional, more aesthetically pleasing or having other advantages over our products. We compete with all manufacturers of building products, from small local firms to large national firms.

In addition, competition in the metal components and engineered building systems market of the building industry is intense. It is based primarily on:

• quality;

• service;

• delivery;

• ability to provide added value in the design and engineering of buildings;

• price; and

• speed of construction.

We compete with a number of other manufacturers of metal components and engineered building systems for the building industry, ranging from small local firms to large national firms. Most of these competitors operate on a regional basis, although we believe that at least four other manufacturers of engineered building systems and three manufacturers of metal components have nationwide coverage.

12

We currently operate 37 facilities in 16 states and Mexico used for manufacturing of metal components and engineered building systems for the building industry, including four for our doors operations. We believe this broad geographic penetration gives us an advantage over our components and building competitors because major elements of a customer’s decision are the speed and cost of delivery from the manufacturing facility to the product’s ultimate destination. We operate a fleet of trucks to deliver our products to our customers in a more timely manner than most of our competitors.

We compete with a number of other providers of metal coil coating services to manufacturers of metal components and engineered building systems for the building industry, ranging from small local firms to large national firms. Most of these competitors operate on a regional basis, although we believe that at least three other providers of light gauge metal coil coating services and two other providers of hot rolled, medium gauge metal coil coating services have nationwide coverage. Competition in the metal coil coating industry is intense and is based primarily on quality, service, delivery and price.

Acquisitions

In December 2004, we purchased substantially all of the operating assets of Heritage and Steelbuilding.com, affiliated companies headquartered in Little Rock, Arkansas, for a combined purchase price of approximately $25 million, including approximately $6 million in restricted NCI common stock (199,767 shares), and assumed liabilities of approximately $2 million. Heritage primarily markets general purpose, engineered steel buildings, including for the agricultural market sector, and Steelbuilding.com is the largest marketer of engineered steel buildings via the internet. We purchased these two companies because of their strong marketing operations and our belief that as part of our company they will be better positioned to leverage their sales and internet marketing and distribution channels to drive our sales growth. Also in December 2004, we purchased our joint venture partner’s 49% interest in our manufacturing facility in Monterrey, Mexico, for approximately $10 million in cash.

Environmental Matters

The operation of our business is subject to stringent and complex laws and regulations pertaining to health, safety and the environment. As an owner or operator of manufacturing facilities, we must comply with these laws and regulations at the federal, state and local levels. These laws and regulations can restrict or impact our business activities in many ways, such as:

• restricting the way we can handle or dispose of our waste;

• requiring remedial action to mitigate pollution conditions caused by our operations or attributable to former operators; and

• enjoining the operations of facilities deemed in non-compliance with permits issued pursuant to such environmental laws and regulations.

Failure to comply with these laws and regulations may trigger a variety of administrative, civil and criminal enforcement measures, including the assessment of monetary penalties, the imposition of remedial requirements, and the issuance of orders enjoining future operations. Certain environmental statutes impose strict, joint and several liability for costs required to clean up and restore sites where hazardous substances have been disposed of or otherwise released. Moreover, it is not uncommon for neighboring landowners and other third parties to file claims for personal injury and property damage allegedly caused by the release of substances or other waste products into the environment.

The trend in environmental regulation is to place more restrictions and limitations on activities that may affect the environment. As a result, there can be no assurance as to the amount or timing of future expenditures for environmental compliance or remediation, and actual future expenditures may be different from the amounts we currently anticipate. We try to anticipate future regulatory requirements that might be imposed and plan accordingly to remain in compliance with changing environmental laws and regulations and to minimize the costs of such compliance.

13

We do not believe that compliance with federal, state or local environmental laws and regulations will have a material adverse effect on our business, financial position or results of operations. In addition, we believe that the various environmental activities in which we are presently engaged are not expected to materially interrupt or diminish our operational ability to manufacture our products. We cannot assure you, however, that future events, such as changes in existing laws, the promulgation of new laws, or the development or discovery of new facts or conditions will not cause us to incur significant costs. The following is a discussion of certain environmental and safety concerns that relate to our business.

Air Emissions. Our operations are subject to the federal Clean Air Act and comparable state laws and regulations. These laws and regulations regulate emissions of air pollutants from various industrial sources, including our manufacturing facilities, and also impose various monitoring and reporting requirements. Such laws and regulations may require that we obtain pre-approval for the construction or modification of certain projects or facilities expected to produce air emissions or result in the increase of existing air emissions, obtain and strictly comply with air permits containing various emissions and operational limitations, or utilize specific emission control technologies to limit emissions. Our failure to comply with these requirements could subject us to monetary penalties, injunctions, conditions or restrictions on operations, and, potentially, criminal enforcement actions. We will be required to incur certain capital and other expenditures in the future for air pollution control equipment in connection with obtaining and maintaining operating permits and approvals for air emissions. We believe, however, that our operations will not be materially adversely affected by such requirements, and the requirements are not expected to be any more burdensome to us than to any other similarly situated companies.

Hazardous and Solid Waste. Our operations generate wastes, including some hazardous wastes that are subject to the federal Resource Conservation and Recovery Act, or RCRA, and comparable state laws, which impose detailed requirements for the handling, storage, treatment and disposal of hazardous and solid waste. For example, ordinary industrial waste such as paint waste, waste solvents, and waste oils may be regulated as hazardous waste. RCRA currently exempts many of our manufacturing wastes from classification as hazardous waste. However, these non-hazardous or exempted wastes are still regulated under state law or the less stringent solid waste requirements of RCRA.

Site Remediation. The Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, or CERCLA, also known as “Superfund,” and comparable state laws impose liability, without regard to fault or the legality of the original conduct, on certain classes of persons responsible for the release of hazardous substances into the environment. Such classes of persons include the current and past owners or operators of sites where a hazardous substance was released, and companies that disposed or arranged for disposal of hazardous substances at offsite locations such as landfills. In the course of our ordinary operations we will generate wastes that may fall within the definition of a “hazardous substance.” CERCLA authorizes the EPA and, in some cases, third parties to take actions in response to threats to the public health or the environment and to seek to recover from the responsible classes of persons the costs they incur. Under CERCLA, we could be subject to joint and several liability for the costs of cleaning up and restoring sites where hazardous substances have been released, for damages to natural resources, and for the costs of certain health studies.

We currently own or lease, and have in the past owned or leased, numerous properties that for many years have been used for manufacturing operations. Hazardous substances or wastes may have been disposed of or released on or under the properties owned or leased by us, or on or under other locations where such wastes have been taken for disposal. In addition, some of these properties have been operated by third parties or by previous owners whose treatment and disposal or release of hazardous substances or wastes was not under our control. These properties and the substances disposed or released on them may be subject to CERCLA, RCRA and analogous state laws. Under such laws, we could be required to remove previously disposed wastes (including waste disposed of by prior owners or operators), remediate contaminated property (including groundwater contamination, whether from prior owners or operators or other historic activities or spills), or perform remedial plugging or pit closure operations to prevent future contamination.

14

We discovered the existence of polychlorinated biphenyls (“PCBs”) and heavy metals at our Metal Prep Houston site, which is located in an industrial area in Houston, Texas. Soil borings have been sampled and analyzed to determine the impact on the soil at this site, and the findings indicate that remediation of the site will be necessary. We have filed an application with the Texas Commission of Environmental Quality (“TCEQ”) for entry into the Voluntary Cleanup Program. Based upon an analysis of projected remediation costs of the known contamination, we originally estimated that we would spend and have accrued through fiscal 2004 approximately $2.5 million to remediate this site, which included future environmental consulting fees, oversight expenses and additional testing expenses. In the fourth quarter of fiscal 2005, we reduced our accrual to $1.9 million based upon the finalization of a cost estimate for the proposed remediation work, including excavation, transportation, analysis and disposal. Our Affected Property Assessment Report (“APAR”) has now been approved by the TCEQ, and we are preparing our proposed remedial action that will be filed with TCEQ in early 2006. We expect the cleanup to begin in the second quarter of fiscal 2006 and to be completed by fiscal year ending October 29, 2006. We can give no assurance that actual costs of remediation will not exceed our estimate, perhaps significantly; however, the accrued amount represents our best current-cost estimate based upon the best information available as of the date hereof. We have a contractual indemnity by the immediate prior owner of the property, which we believe obligates that party to reimburse our response costs with respect to this condition. We have brought suit against the prior owner asserting this indemnity, and that party has disputed liability. Further, we have joined in the litigation other potentially responsible parties against whom we are seeking contribution and/or indemnification. However, it is possible that our efforts to obtain reimbursement of our response costs at this site may not be successful or may not prove to be cost-effective for us.

Water Discharges. Our operations are subject to the Federal Water Pollution Control Act of 1972, as amended, also known as the Clean Water Act, and analogous state laws and regulations. These laws and regulations impose detailed requirements and strict controls regarding the discharge of pollutants into waters of the United States. The unpermitted discharge of pollutants, including discharges resulting from a spill or leak incident, is prohibited. Any unpermitted release of pollutants from our facilities could result in fines or penalties as well as significant remedial obligations.

Employee Health and Safety. We are subject to the requirements of the Occupational Safety and Health Act, referred to as OSHA, and comparable state laws that regulate the protection of the health and safety of workers. In addition, the OSHA hazard communication standard requires that information be maintained about hazardous materials used or produced in our operations and that this information be provided to employees, state and local government authorities and citizens.

Zoning and Building Code Requirements

The engineered building systems and components we manufacture must meet zoning, building code and uplift requirements adopted by local governmental agencies. We believe that our products are in substantial compliance with applicable zoning, code and uplift requirements. Compliance does not have a material adverse affect on our business.

Patents, Licenses and Proprietary Rights

We have a number of United States patents and pending patent applications, including patents and applications relating to metal roofing systems, metal overhead doors, our new pier and header system and our patented Long Bay® System. We do not, however, consider patent protection to be a material competitive factor in our industry. We also have several registered trademarks and pending registrations in the United States.

Employees

As of October 29, 2005, we had approximately 3,800 employees, of whom 2,370 were manufacturing and engineering personnel. We regard our employee relations as satisfactory.

Our U.S. employees are not represented by a labor union or covered by a collective bargaining agreement. The United Steel Workers of America has periodically petitioned the National Labor Relations Board to be recognized as the collective bargaining representative of the production and maintenance employees at various facilities, but has lost the resulting union election each time. The last elections were at our Rancho Cucamonga, California facility in August 1998 and November 1999 and at our Jackson, Mississippi facility in May 2004.

15

Employees of our Monterrey, Mexico facility, approximately 10% of our total work force, are represented by the Federacion Nacional de Sindicatos Independientes, which is subject to salary negotiation in 2006.

Item 1A. Risk Factors.

Our businesses are cyclical, and we cannot predict the timing or severity of future economic or industry downturns.

The nonresidential construction industry is highly sensitive to national and regional economic conditions. From time to time, it has been adversely affected in various parts of the country by unfavorable economic conditions, low use of manufacturing capacity, high vacancy rates, changes in tax laws affecting the real estate industry, high interest rates and the unavailability of financing. Sales of our products may be adversely affected by weakness in demand for our products within particular customer groups, or a recession in the general construction industry or particular geographic regions. We cannot predict the timing or severity of future economic or industry downturns. Any economic downturn, particularly in states where many of our sales are made, could have a material adverse effect on our results of operations and financial condition.

Our businesses are seasonal, and our results of operations during our first two fiscal quarters may be adversely affected by seasonality.

The metal components, engineered building systems and metal coil coating businesses, and the construction industry in general, are seasonal in nature. 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. This seasonality adversely affects our results of operations for the first two fiscal quarters. Prolonged severe winter weather conditions can delay construction projects and otherwise adversely affect our business.

Continued price volatility and supply constraints in the steel market could prevent us from meeting delivery schedules to our customers or reduce our profit margins.

Our business is heavily dependent on the prices and supply of steel, which is the principal raw material used in our products. 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, competition, labor costs, production costs, import duties and other trade restrictions. Beginning in the second quarter of fiscal 2004, there were unusually rapid and significant increases in steel prices and severe shortages in the steel industry due in part to increased demand from China’s expanding economy and high energy prices. Supply and prices from the domestic steel manufacturers and available foreign spot purchases began stabilizing at high relative volumes during our fourth fiscal quarter in 2004. Pricing increases for sheet, hot roll and structural steel abated during much of fiscal 2005. However, that abatement ended with steel price increases in October 2005. Overall, our weighted average cost of steel decreased in fiscal 2005 compared to fiscal 2004. We do not have any long-term contracts for the purchase of steel and normally do not maintain an inventory of steel in excess of our current production requirements. We can give you no assurance that steel will remain available or that prices will not continue to be volatile. While most of our 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, we may, for competitive or other reasons, 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 our customers, 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 information about steel pricing trends in recent years, please see “Item 1. Business – Raw Materials.”

16

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; further consolidation in the steel industry may adversely affect us.

We currently rely primarily on three steel suppliers - ISG/Mittal, U.S. Steel and Nucor. During fiscal 2005, we purchased a majority of our steel requirements from U.S. Steel and ISG/Mittal. In recent years, the steel industry has been characterized by adverse financial conditions and consolidation. Our primary steel suppliers during fiscal 2003, Bethlehem Steel Corporation (“Bethlehem”) and National Steel Corporation (“National”), filed for protection under Federal bankruptcy laws in 2001 and 2002, respectively. During the third quarter of fiscal 2003, U.S. Steel bought substantially all of the integrated steel-making assets of National, and ISG acquired the assets of Bethlehem. The steel industry experienced further consolidation in 2005, with the purchase of ISG by the Mittal Steel Group. Industry consolidation, along with increased worldwide demand for steel, may adversely affect our ability to obtain our primary raw materials. If one or more of our current suppliers is unable for financial or any other reason, including labor strikes, to continue in business or to produce steel sufficient to meet our requirements, essential supply of our primary raw materials could be temporarily interrupted and adversely affect our business.

We are subject to preference claims by our former steel suppliers.

In late 2003 and early 2004, a number of lawsuits were filed against several of our operating subsidiaries by Bethlehem and National in their respective bankruptcy proceedings, seeking reimbursement of preferential transfers allegedly made by the respective debtors in the 90-day period preceding their bankruptcy filings. Bethlehem alleges it made preferential payments to our subsidiaries of approximately $7.7 million, while National claims preferential payments in the aggregate amount of $6.3 million. We deny the allegations in the lawsuits and are vigorously defending against these claims. Although in December 2005 we agreed to a settlement with National at no cost to us, such settlement has not yet been finally approved by the bankruptcy court. While we are not able to predict whether we will incur any liability or to accurately estimate the damages, or the range of damages, if any, we might incur in connection with the Bethlehem proceeding, it is possible that this lawsuit will adversely affect our results of operations, cash flows and financial position. See “Item 3^_Legal Proceedings” for additional information regarding this matter.

Failure to retain or replace key personnel could hurt our operations.

Our success depends to a significant degree upon the efforts, contributions and abilities of our senior management, plant managers and other highly skilled personnel, including our sales executives. These executives and managers have many accumulated years of experience in our industry and developed personal relationships with our customers that are important to our business. Some of such executives and managers are nearing retirement age. If we do not retain the services of our key personnel or if we fail to adequately plan for the succession of such individuals, our customer relationships, results of operations and financial condition may be adversely affected.

We incur costs to comply with environmental laws and have liabilities for environmental cleanups.

Because we have air emissions, discharge wastewater, own and operate real property, and handle hazardous substances and solid waste, we incur costs and liabilities to comply with environmental laws and regulations and may incur significant additional costs as those laws and regulations change in the future or if there is an accidental release of hazardous substances into the environment. The operations of our manufacturing facilities are subject to stringent and complex federal, state and local environmental laws and regulations. These include, for example, (i) the federal Clean Air Act and comparable state laws and regulations that impose obligations related to air emissions, (ii) the federal Resource Conservation and Recovery Act, or RCRA, and comparable state laws that impose requirements for the discharge of waste from our facilities and (iii) the Comprehensive Environmental Response, Compensation and Liability Act of 1980, or CERCLA, also known as “Superfund,” and comparable state laws that regulate the cleanup of hazardous substances that may have been released at properties currently or previously owned or operated by us or locations to which we have sent waste for disposal. Failure to comply with these laws and regulations may trigger a variety of administrative, civil and criminal enforcement measures, including the assessment of monetary penalties, the imposition of remedial requirements, and the issuance of orders enjoining future operations.

We discovered the existence of polychlorinated biphenyls (“PCBs”) and heavy metals at our Metal Prep Houston site, which is located in an industrial area in Houston, Texas. Soil borings have been sampled and analyzed to determine the impact on the soil at this site, and the findings indicate that remediation of the site will likely be necessary. We have filed an application with the Texas Commission of Environmental Quality (“TCEQ”) for entry

17

into the Voluntary Cleanup Program. Based upon an analysis of projected remediation costs of the known contamination, we originally estimated that we would spend and have accrued through fiscal 2004 approximately $2.5 million to remediate this site, which included future environmental consulting fees, oversight expenses and additional testing expenses. In the fourth quarter of fiscal 2005, we reduced our accrual to $1.9 million based upon the finalization of a cost estimate for the proposed remediation work, including excavation, transportation, analysis and disposal. Our Affected Property Assessment Report (“APAR”) has now been approved by the TCEQ, and we are preparing our proposed remedial action that will be filed with TCEQ in early 2006. We expect the cleanup to begin in the second quarter of fiscal 2006 and to be completed by fiscal year ending October 29, 2006. We can give no assurance that actual costs of remediation will not exceed our estimate, perhaps significantly; however, the accrued amount represents our best current-cost estimate based upon the best information available as of the date hereof. We have a contractual indemnity by the immediate prior owner of the property, which we believe obligates that party to reimburse our response costs with respect to this condition. We have brought suit against the prior owner asserting this indemnity, and that party has disputed liability. Further, we have joined in the litigation other potentially responsible parties against whom we are seeking contribution and/or indemnification. However, it is possible that our efforts to obtain reimbursement of our response costs at this site may not be successful or may not prove to be cost-effective for us.

The industries in which we operate are highly competitive.

We compete with all other alternative methods of building construction, which may be viewed as more traditional, more aesthetically pleasing or having other advantages over our products. In addition, competition in the metal components and metal buildings markets of the building industry and in the metal coil coating industry is intense. It is based primarily on:

• quality;

• service;

• delivery;

• ability to provide added value in the design and engineering of buildings;

• price;

• speed of construction in buildings and components; and

• personal relationships with customers.

We compete with a number of other manufacturers of metal components and engineered building systems and providers of coil coating services ranging from small local firms to large national firms. In addition, we and other manufacturers of metal components and engineered building systems compete with alternative methods of building construction. If these alternative building methods compete successfully against us, such competition could adversely affect us.

Our stock price has been and may continue to be volatile.

The trading price of our common stock has fluctuated in the past and is subject to significant fluctuations in response to the following factors, some of which are beyond our control:

• variations in quarterly operating results;

• changes in earnings estimates by analysts;

• our announcements of significant contracts, acquisitions, strategic partnerships or joint ventures;

• general conditions in the metal components and engineered building systems industries;

18

• fluctuations in stock market price and volume; and

• other general economic conditions.

In recent years, the stock market in general has experienced extreme price and volume fluctuations that have affected the market price for many companies in industries similar to ours. Some of these fluctuations have been unrelated to the operating performance of the affected companies. These market fluctuations may decrease the market price of our common stock in the future.

Our acquisition strategy may be unsuccessful if we incorrectly predict operating results or are unable to identify and complete future acquisitions and integrate acquired assets or businesses.

We have a history of expansion through acquisitions, and we believe that as our industry continues to consolidate, our future success will depend, in part, on our ability to complete acquisitions and effectively integrate the operations or management of acquired assets or businesses. Acquisitions present other risks and challenges, including the risk of incorrect assumptions regarding the future results of the acquired operations or expected cost reductions or other synergies expected to be realized as a result of acquiring such operations and diversion of management’s attention from existing operations.

Although we expect acquisitions to be an integral part of our future growth, we can provide no assurance that we will be successful in identifying or completing any acquisitions or that any businesses or assets that we are able to acquire will be successfully integrated into our existing business. We cannot predict the effect, if any, that any announcement or consummation of an acquisition would have on the trading price of our common stock or our convertible notes.

We may not be able to service our debt.

In connection with our acquisition activity, especially the MBCI acquisition in 1998, we have incurred debt. We may also incur additional debt from time to time to finance additional acquisitions, capital expenditures or for other purposes if we comply with the restrictions in our senior secured credit agreement.

The debt that we carry may have important consequences to us, including the following:

• Our ability to obtain additional financing, if necessary, for working capital, capital expenditures, acquisitions or other purposes may be impaired or additional financing may not be available on favorable terms.

• We must use a portion of our cash flow to pay the principal and interest on our debt. These payments reduce the funds that would otherwise be available for our operations and future business opportunities.

• A substantial decrease in our net operating cash flows could make it difficult for us to meet our debt service requirements and force us to modify our operations.

• We may be more vulnerable to a downturn in our business or the economy generally.

If we cannot service our debt, we will be forced to take actions such as reducing or delaying acquisitions and/or capital expenditures, selling assets, restructuring or refinancing our debt or seeking additional equity capital. We can give you no assurance that we can do any of these things on satisfactory terms or at all.

In addition, under the terms of our convertible notes, the net share settlement provision requires that upon conversion we pay the principal return in cash, provided that we are in compliance with the financial covenants of our existing or future credit facilities. Assuming that we have enough cash to pay the principal return, we may be cash constrained as a result, and this could adversely affect our ability to service our debt, borrow money or conduct our operations. The conversion price of the notes is $40.14 and the market price condition that triggers holders’ conversion rights is pegged to a stock price of $48.17.

19

Restrictive covenants in our existing senior credit agreement may adversely affect us.

In July 2004, we entered into a $325 million senior secured credit agreement with a group of lenders. We must comply with operating and financing restrictions in that agreement. We may also have similar restrictions with any future debt. These restrictions affect, and in many respects limit or prohibit our ability to:

• incur additional indebtedness;

• make restricted payments, including dividends or other distributions;

• incur liens;

• make investments, including joint venture investments;

• sell assets;

• repurchase capital stock; and

• merge or consolidate with or into other companies or sell substantially all our assets.

We are required to make mandatory payments on our existing senior secured credit agreement upon the occurrence of certain events, including the sale of assets and the issuance of debt or equity securities, in each case subject to certain limitations and conditions set forth in our existing senior secured credit agreement. Our senior secured credit agreement also requires us to achieve specified financial and operating results and satisfy set financial tests relating to our consolidated net worth and our leverage, fixed charge coverage and senior debt ratios. These restrictions could limit our ability to plan for or react to market conditions or meet extraordinary capital needs or otherwise could restrict our activities. These restrictions could also adversely affect our ability to finance our future operations or capital needs or to engage in other business activities that would be in our interest.

Item 2. Properties.

As of December 31, 2005, we conduct manufacturing operations at the following facilities:

Facility	Products	Square Feet	Owned or Leased
Chandler, Arizona	Doors and related metal components	35,000	Leased
Tolleson, Arizona	Metal components (1)	65,980	Owned
Atwater, California	Metal components (2)	112,200	Owned
Rancho Cucamonga, California	Metal coil coating	98,000	Owned
Adel, Georgia	Metal components (1)	59,550	Owned
Douglasville, Georgia	Metal components (3)	110,536	Owned
Douglasville, Georgia	Doors and related metal components	60,000	Owned
Marietta, Georgia	Metal coil coating	125,700	Owned
Tallapoosa, Georgia	Engineered building systems (9)	249,000	Leased
Mattoon, Illinois	Metal components (2)	115,480	Owned
Shelbyville, Indiana	Metal components (1)	66,450	Owned
Oskaloosa, Iowa	Metal components (5)	62,702	Owned
Nicholasville, Kentucky	Metal components (5)	41,280	Owned
Monterrey, Mexico	Engineered building systems (6)	237,476	Owned
Big Rapids, Michigan	Metal components (5)	54,640	Owned
Jackson, Mississippi	Metal components (5)	96,000	Owned
Jackson, Mississippi	Metal coil coating	363,200	Owned
Hernando, Mississippi	Metal components (1)	71,720	Owned

20

Hernando, Mississippi	End wall framing (9)	32,500	Owned
Omaha, Nebraska	Metal components (5)	51,750	Owned
Rome, New York	Metal components (5)	57,700	Owned
Oklahoma City, Oklahoma	Metal components (1)	59,695	Owned
Caryville, Tennessee	Engineered building systems (4)	193,800	Owned
Lexington, Tennessee	Engineered building systems (6)	140,404	Owned
Memphis, Tennessee	Metal coil coating	61,500	Owned
Ennis, Texas	Metal components (1)	33,000	Owned
Houston, Texas	Metal components (3)	209,355	Owned
Houston, Texas	Metal coil coating	39,550	Owned
Houston, Texas	Engineered building systems (7)	410,980	Owned
Houston, Texas	Doors and related metal components	23,625	Owned
Houston, Texas	Engineered building systems (4)	148,500	Owned
Houston, Texas	Sectional doors	49,600	Owned
Lubbock, Texas	Metal components (1)	64,320	Owned
San Antonio, Texas	Metal components (5)	52,360	Owned
Stafford, Texas	Metal components (8)	56,840	Leased
Salt Lake City, Utah	Metal components (3)	93,150	Owned
Colonial Heights, Virginia	Metal components (1)	37,000	Owned

(1) Secondary structures and metal roof and wall systems.

(2) End walls, secondary structures and metal roof and wall systems for components and engineered building systems.

(3) Full components product range.

(4) Primary structures, secondary structures and metal roof and wall systems for engineered building systems.

(5) Metal roof and wall systems.

(6) Primary structures for engineered building systems.

(7) Structural steel.

(8) Insulated panel systems.

(9) End wall framing for engineered building systems.

We also operate six NCI Metal Depots facilities that sell our products directly to the public. In addition, we lease four facilities that serve as distribution centers for our sectional doors. We also maintain several drafting office facilities in various states. We have short-term leases for these additional facilities. We believe that our present facilities are adequate for our current and projected operations.

Additionally, we own approximately six acres of land in Houston, Texas and have a 60,000 square foot facility that is used as our principal executive and administrative offices. Approximately 4,897 square feet of this facility is leased to a third party for a term of five years with approximately four years remaining on the lease term.

During fiscal 2003, we closed our manufacturing facility located in Southlake, Texas, which we are marketing for sale. We are also marketing for sale our manufacturing facility located in Chester, South Carolina, which we closed during fiscal 2002.

Item 3. Legal Proceedings.

In late 2003 and early 2004, a number of lawsuits were filed against several of our operating subsidiaries by Bethlehem and National in their respective bankruptcy proceedings, seeking reimbursement of preferential transfers allegedly made by the respective debtors in the 90-day period preceding their bankruptcy filings. Bethlehem alleges it made preferential payments to our subsidiaries of approximately $7.7 million, while National claims preferential payments in the aggregate amount of $6.3 million. We have denied the allegations in the lawsuits and are vigorously defending against these claims. We believe these legal proceedings will not have a material adverse effect on our business, consolidated financial condition or results of operations. Subsequent to the end of fiscal year 2005, we and National agreed to a settlement of any and all claims, whereby National would dismiss the action with prejudice, we would waive our claim in the bankruptcy proceeding, and the parties would exchange mutual releases of liability. The parties announced this settlement to the federal court in December 2005. The parties are preparing the formal settlement and release documents.

21

We discovered the existence of polychlorinated biphenyls (“PCBs”) and heavy metals at our Metal Prep Houston site, which is located in an industrial area in Houston, Texas. Soil borings have been sampled and analyzed to determine the impact on the soil at this site, and the findings indicate that remediation of the site will likely be necessary. We have filed an application with the Texas Commission of Environmental Quality (“TCEQ”) for entry into the Voluntary Cleanup Program. Based upon an analysis of projected remediation costs of the known contamination, we originally estimated that we would spend and have accrued through fiscal 2004 approximately $2.5 million to remediate this site, which included future environmental consulting fees, oversight expenses and additional testing expenses. In the fourth quarter of fiscal 2005, we reduced our accrual to $1.9 million based upon the finalization of a cost estimate for the proposed remediation work, including excavation, transportation, analysis and disposal. Our Affected Property Assessment Report (“APAR”) has now been approved by the TCEQ, and we are preparing our proposed remedial action that will be filed with TCEQ in early 2006. We expect the cleanup to begin in the second quarter of fiscal 2006 and to be completed by fiscal year ending October 29, 2006. We can give no assurance that actual costs of remediation will not exceed our estimate, perhaps significantly; however, the accrued amount represents our best current-cost estimate based upon the best information available as of the date hereof. We have a contractual indemnity by the immediate prior owner of the property, which we believe obligates that party to reimburse our response costs with respect to this condition. We have brought suit against the prior owner asserting this indemnity, and that party has disputed liability. Further, we have joined in the litigation other potentially responsible parties against whom we are seeking contribution and/or indemnification. However, it is possible that our efforts to obtain reimbursement of our response costs at this site may not be successful or may not prove to be cost-effective for us.

From time to time, we are involved in various other legal proceedings and contingencies considered to be in the ordinary course of business. While we are not able to predict whether we will incur any liability in excess of insurance coverages or to accurately estimate the damages, or the range of damages, if any, we might incur in connection with these legal proceedings, we believe these legal proceedings will not have a material adverse effect on our business, consolidated financial condition or results of operations.

Item 4. Submission of Matters to a Vote of Security Holders.

Not applicable.

PART II

Item 5. Market for Registrant’s Common Equity and Related Stockholder Matters.

The information required by this Item regarding the market for our common stock is incorporated by reference from the information in our 2005 Annual Report to Shareholders under the caption “Price Range of Common Stock.”

In December 2004, we purchased substantially all of the operating assets of Heritage and Steelbuilding.com, affiliated companies headquartered in Little Rock, Arkansas, for a combined purchase price of approximately $25 million, including approximately $6 million in restricted NCI common stock, par value $0.01 per share (199,767 shares), and assumed liabilities of approximately $2 million. The shares were issued to certain of the shareholders of Heritage and Steelbuilding.com in consideration of non-competition covenants entered into by such shareholders in connection with the transaction. The shares were issued in reliance on the exemption from registration under Section 4(2) of the Securities Act of 1933, as amended.

22

The following table shows our purchases of our common stock during the fourth quarter of fiscal 2005:

ISSUER PURCHASES OF EQUITY SECURITIES

Period	(a) Total Number of Shares Purchased	(b) Average Price Paid per Share (or Unit)	(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number (or Approximate Dollar Value) of Shares that May Yet be Purchased Under the Plans or Programs
July 31, 2005 to August 27, 2005	—	—	—	1,198,992
August 28, 2005 to September 24, 2005	649,000	37.38	649,000	549,992
September 25, 2005 to October 29, 2005	414,000	39.55	414,000	135,992
Total	1,063,000	38.23	1,063,000	135,992

On November 9, 2000, we publicly announced that our board of directors authorized the repurchase of up to 1.5 million shares of our common stock. On September 2, 2005, we announced that our board of directors had reaffirmed our previously authorized share repurchase program, authorizing the repurchase of up to 1.2 million shares. There is no expiration date for our repurchase program.

Item 6. Selected Financial Data.

The information required by this Item is incorporated by reference from the information in our 2005 Annual Report to Shareholders under the caption “Selected Financial Data.”

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The information required by this Item is incorporated by reference from the information in our 2005 Annual Report to Shareholders under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

The information required by this Item is incorporated by reference from the information in our 2005 Annual Report to Shareholders under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Market Risk.”

23

Item 8. Financial Statements and Supplementary Data.

The following consolidated financial statements and supplementary financial information are incorporated by reference from the indicated pages in our 2005 Annual Report to Shareholders.

	Pages of Annual Report to Shareholders
Selected financial data	2
Consolidated statements of operations for each of the three fiscal years in the period ended October 29, 2005	3
Consolidated balance sheets at October 29, 2005 and October 30, 2004	4
Consolidated statements of cash flows for each of the three fiscal years in the period ended October 29, 2005	5
Consolidated statements of stockholders’ equity for each of the three fiscal years in the period ended October 29, 2005	6
Notes to consolidated financial statements	7
Report of independent registered public accounting firm	25

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Not applicable.

Item 9A. Controls and Procedures.

Disclosure Controls and Procedures. As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon their evaluation, the CEO and the CFO concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and include controls and procedures designed to ensure that information required to be disclosed by us in such reports is accumulated and communicated to our management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

Internal Control over Financial Reporting. During the fourth quarter of fiscal 2005, we have not made any change to our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Internal control over financial reporting is a process designed by, or under the supervision of, our principal executive and principal financial officers, or persons performing similar functions, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

• pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;

24

• provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and

• provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.

Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, we included a report of management’s assessment of the design and effectiveness of our internal controls as part of this Annual Report on Form 10-K for the fiscal year ended October 29, 2005. Ernst & Young, LLP, our independent registered public accounting firm, also attested to, and reported on, management’s assessment of the effectiveness of internal control over financial reporting. Management’s and Ernst & Young’s reports are included in our 2005 Consolidated Financial Statements on pages 24 and 25 of our 2005 Annual Report to Shareholders under the captions entitled “Management’s Report on Internal Control Over Financial Reporting” and “Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting” and are incorporated herein by reference.

PART III

Item 10. Directors and Executive Officers of the Registrant.

We have adopted a Code of Business Conduct and Ethics, which we previously filed with the SEC in connection with our Annual Report to Shareholders for fiscal year 2003. A copy of our Code of Business Conduct and Ethics is available on our website at www.ncilp.com under the heading “Corporate Governance.” Any amendments to, or waivers from the Code of Business Conduct and Ethics that apply to our executive officers and directors will be posted on the “Corporate Governance” section of our Internet web site located at www.ncilp.com.

The information under the captions “Election of Directors,” “Management,” “Section 16(a) Beneficial Ownership Reporting and Compliance” and “Corporate Governance” in our definitive proxy statement for our annual meeting of shareholders to be held on March 10, 2006 is incorporated by reference herein.

Item 11. Executive Compensation.

The information under the caption “Executive Compensation” in our definitive proxy statement for our annual meeting of shareholders to be held on March 10, 2006 is incorporated by reference herein.

Item 12. Security Ownership of Certain Beneficial Owners and Management.

The information under the captions “Outstanding Capital Stock” and “Securities Reserved for Issuance Under Equity Compensation Plans” in our definitive proxy statement for our annual meeting of shareholders to be held on March 10, 2006 is incorporated by reference herein.

Item 13. Certain Relationships and Related Transactions.

The information under the caption “Transactions with Directors, Officers and Affiliates” in our definitive proxy statement for our annual meeting of shareholders to be held on March 10, 2006 is incorporated by reference herein.

Item 14. Principal Accounting Fees and Services.

The information under the caption “Audit Committee and Auditors—Our Independent Registered Public Accounting Firm and Audit Fees” in our definitive proxy statement for our annual meeting of shareholders to be held on March 10, 2006 is incorporated by reference herein.

25

Item 15. Exhibits and Financial Statement Schedules.

(a) The following documents are filed as a part of this report:

1. Consolidated financial statements (see Item 8).

2. Consolidated financial statement schedules. Schedule II—Valuation and Qualifying Accounts

All other schedules are omitted because they are inapplicable or the requested information is shown in the financial statements or noted therein.

3. Exhibits

3.1 Restated Certificate of Incorporation, as amended through September 30, 1998 (filed as Exhibit 3.1 to NCI’s Annual Report on Form 10-K for the fiscal year ended November 2, 2002 and incorporated by reference herein)

3.2 Amended and Restated By-Laws, as amended through September 1, 2005 (filed as Exhibit 3.1 to NCI’s Current Report on Form 8-K dated September 1, 2005 and incorporated by reference herein)

4.1 Form of certificate representing shares of NCI’s common stock (filed as Exhibit 1 to NCI’s registration statement on Form 8-A filed with the SEC on July 20, 1998 and incorporated by reference herein)

4.2 Credit Agreement, dated June 18, 2004, by and among NCI, certain of its subsidiaries, as guarantors, Wachovia Bank, National Association, as administrative agent, Bank of America, N.A., as syndication agent, and the several lenders named therein (filed as Exhibit 4.1 to NCI’s Form 10-Q/A, filed with the SEC on September 16, 2004, amending its quarterly report on Form 10-Q for the quarter ended July 31, 2004 and incorporated by reference herein)

4.3 First Amendment to Credit Agreement, dated as of November 9, 2004, between NCI Building Systems, Inc, as borrower, certain of its subsidiaries, as guarantors, Wachovia National Bank, National Association, as administrative agent and lender, and the several lenders named therein (filed as Exhibit 10.1 to NCI’s Current Report on Form 8-K dated November 16, 2004 and incorporated by reference herein)

4.4 Second Amendment to Credit Agreement, dated as of October 14, 2005, between NCI Building Systems, Inc, as borrower, certain of its subsidiaries, as guarantors, Wachovia National Bank, National Association, as administrative agent and lender, and the several lenders named therein (filed as Exhibit 10.1 to NCI’s Current Report on Form 8-K dated October 14, 2005 and incorporated by reference herein)

4.5 Rights Agreement, dated June 24, 1998, between NCI and Harris Trust and Savings Bank (filed as Exhibit 2 to NCI’s registration statement on Form 8-A filed with the SEC on July 20, 1998 and incorporated by reference herein)

4.6 First Amendment to Rights Agreement, dated June 24, 1999, between NCI and Harris Trust and Savings Bank (filed as Exhibit 3 to NCI’s registration statement on Form 8-A, Amendment No. 1 filed with the SEC on June 25, 1999 and incorporated by reference herein)

26

4.7	Indenture, dated November 16, 2004, by and among NCI, and The Bank of New York (filed as Exhibit 4.1 to NCI’s Current Report on Form 8-K dated November 16, 2004 and incorporated by reference herein)
4.8	Registration Rights Agreement, dated November 16, 2004, among NCI Building Systems, Inc., UBS Securities LLC and Wachovia Capital Markets LLC. (filed as Exhibit 99.2 to NCI’s Current Report on Form 8-K dated November 16, 2004 and incorporated by reference herein)
†10.1	Employment Agreement, dated April 12, 2004, among the Company, NCI Group, L.P. and Norman C. Chambers (filed as Exhibit 10.1 to NCI’s Quarterly Report on Form 10-Q for the quarter ended May 1, 2004 and incorporated by reference herein)
†10.2	Amended and Restated Bonus Program, as amended and restated as of December 8, 2005 (filed as Exhibit 10.1 to NCI’s Current Report on Form 8-K dated December 8, 2005 and incorporated by reference herein)
†10.3	Stock Option Plan, as amended and restated on December 14, 2000 (filed as Exhibit 10.4 to NCI’s Annual Report on Form 10-K for the fiscal year ended October 31, 2000 and incorporated by reference herein)
†10.4	Form of Nonqualified Stock Option Agreement (filed as Exhibit 10.5 to NCI’s Annual Report on Form 10-K for the fiscal year ended October 31, 2000 and incorporated by reference herein)
†10.5	2003 Long-Term Stock Incentive Plan, as amended and restated March 11, 2005 (filed as Exhibit 10.1 to NCI’s Current Report on Form 8-K dated March 11, 2005 and incorporated by reference herein)
†10.6	Form of Nonqualified Stock Option Agreement (filed as Exhibit 4.2 to NCI’s registration statement no. 333-111139 and incorporated by reference herein)
†10.7	Form of Incentive Stock Option Agreement (filed as Exhibit 4.3 to NCI’s registration statement no. 333-111139 and incorporated by reference herein)
†10.8	Form of Restricted Stock Agreement (filed as Exhibit 10.8 to NCI’s Annual Report on Form 10-K for the fiscal year ended October 30, 2004 and incorporated by reference herein)
†10.11	Amended and Restated Supplemental Benefit Plan (as amended and restated on December 12, 2002 (filed as Exhibit 10.8 to NCI’s Annual Report on Form 10-K for the fiscal year ended November 2, 2002 and incorporated by reference herein)
†10.12	Supplemental Benefit Agreement, dated December 13, 2002, between NCI and A.R. Ginn, Jr. (filed as Exhibit 10.9 to NCI’s Annual Report on Form 10-K for the fiscal year ended November 2, 2002 and incorporated by reference herein)
†10.13	Agreement Relating to Retirement, dated October 26, 2004, between NCI and Robert J. Medlock (filed as Exhibit 10.1 to NCI’s Current Report on Form 8-K dated October 25, 2004 and incorporated by reference herein)
†*10.14	Supplemental Benefit Agreement, dated August 26, 2004, between NCI and Ken Maddox

27

†10.15	Special Long-Term Restricted Stock Award Agreement, dated August 28, 2003 between NCI and Kelly R. Ginn (filed as Exhibit 10.21 to NCI’s Annual Report on Form 10-K for the fiscal year ended November 1, 2003 and incorporated by reference herein)
†10.16	First Amendment, dated May 27, 2004, to Special Long-Term Restricted Stock Award Agreement, dated August 28, 2003, between NCI and Kelly R. Ginn (filed as Exhibit 10.1 to NCI’s Quarterly Report on Form 10-Q for the quarter ended July 30, 2005 and incorporated by reference herein)
†*10.17	Second Amendment, dated October 24, 2005, to Special Long-Term Restricted Stock Award Agreement, dated August 28, 2003, between NCI and Kelly R. Ginn.
†10.18	Special Long-Term Restricted Stock Award Agreement, dated May 28, 2004, between NCI and A.R. Ginn (filed as Exhibit 10.15 to NCI’s Annual Report on Form 10-K for the fiscal year ended October 30, 2004 and incorporated by reference herein)
†*10.19	First Amendment, dated October 24, 2005, to Special Long-Term Restricted Stock Award Agreement, dated May 28, 2004, between NCI and A.R. Ginn
†10.20	Restricted Stock Agreement, dated April 26, 2004, between NCI and Norman C. Chambers (filed as exhibit 10.2 to NCI’s Quarterly Report on Form 10-Q for the quarter ended May 1, 2004 and incorporated by reference herein)
†*10.21	First Amendment, dated October 24, 2005, to Restricted Stock Agreement, dated April 26, 2004, between NCI and Norman C. Chambers
†10.22	NCI Building Systems, Inc. Deferred Compensation Plan (as effective December 8, 2005)( (filed as Exhibit 10.2 to NCI’s Current Report on Form 8-K dated December 8, 2005 and incorporated by reference herein)
*12.1	Computation of Ratios of Earnings to Fixed Charges
*13.1	2005 Annual Report to Shareholders. With the exception of the information incorporated by reference into Items 5, 6, 7, 7A, 8 and 9a of this Form 10-K, the 2005 Annual Report to Shareholders is not to be deemed filed as part of this Form 10-K.
14.1	Code of Business Conduct and Ethics (filed as Exhibit 10.20 to NCI’s Annual Report on Form 10-K for the fiscal year ended November 1, 2003 and incorporated by reference herein)
*21.1	List of Subsidiaries
*23.1	Consent of Independent Registered Public Accounting Firm
*23.2	Report of Independent Registered Public Accounting Firm
*24.1	Powers of Attorney
*31.1	Rule 13a-14(a)/15d-14(a) Certifications (Section 302 of the Sarbanes-Oxley Act of 2002)
*31.2	Rule 13a-14(a)/15d-14(a) Certifications (Section 302 of the Sarbanes-Oxley Act of 2002)

28

*32.1 Certifications pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code (Section 906 of the Sarbanes-Oxley Act of 2002)

*32.2 Certifications pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code (Section 906 of the Sarbanes-Oxley Act of 2002)

* Filed herewith

† Management contracts or compensatory plans or arrangements

29

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on the 12th day of January, 2006.

NCI BUILDING SYSTEMS, INC.
By:	/s/ A.R. Ginn
	A.R. Ginn, Chairman of the Board
	and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated as of the 12th day of January, 2006.

Name	Title
/s/ A.R. Ginn A.R. Ginn	Chairman of the Board, Chief Executive Officer and Director (principal executive officer)
/s/ Norman C. Chambers Norman C. Chambers	President, Chief Operating Officer and Director
/s/ Frances R. Powell Frances R. Powell	Executive Vice President, Chief Financial Officer, and Treasurer
* William D. Breedlove	Director
* Gary L. Forbes	Director
* Philip J. Hawk	Director
* Max L. Lukens	Director
* George Martinez	Director
* W.B. Pieper	Director
* John K. Sterling	Director

*  By:	/s/ A.R. Ginn
	A.R. Ginn, Attorney-in-Fact

30

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders of NCI Building Systems, Inc.

We have audited the consolidated financial statements of NCI Building Systems, Inc. (the “Company”) as of October 29, 2005 and October 30, 2004, and for each of the three years in the period ended October 29, 2005, and have issued our report thereon dated January 9, 2006 (included elsewhere in this Form 10-K). Our audits also included the financial statement schedule listed in Item 15(a) of this Form 10-K. This schedule is the responsibility of the Company’s management. Our responsibility is to express an opinion based on our audits.

In our opinion, the financial statement schedule referred to above, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

/s/ Ernst & Young LLP

Houston, Texas

January 9, 2006

31

NCI BUILDING SYSTEMS, INC.

SCHEDULE II

VALUATION AND QUALIFYING ACCOUNTS

(in thousands)

Description	Balance at Beginning of Period		Additions Charged to Costs and Expenses		Deductions			Balance at End of Period
Year ended November 1, 2003:
Reserves and allowances deducted from asset accounts:
Allowance for uncollectible accounts and backcharges	$	7,419	$	3,842	$	1,040	(1)	$	10,221
Allowance for obsolete materials and supplies	$	1,943	$	172	$	360		$	1,755
Year ended October 30, 2004:
Reserves and allowances deducted from asset accounts:
Allowance for uncollectible accounts and backcharges	$	10,221	$	2,769	$	4,368	(1)	$	8,622
Allowance for obsolete materials and supplies	$	1,755	$	1,255	$	151		$	2,859
Year ended October 29, 2005:
Reserves and allowances deducted from asset accounts:
Allowance for uncollectible accounts and backcharges	$	8,622	$	273	$	2,171	(1)	$	6,724
Allowance for obsolete materials and supplies	$	2,859	$	602	$	645		$	2,816

(1) Uncollectible accounts, net of recoveries.

32

Index to Exhibits

3.1 Restated Certificate of Incorporation, as amended through September 30, 1998 (filed as Exhibit 3.1 to NCI’s Annual Report on Form 10-K for the fiscal year ended November 2, 2002 and incorporated by reference herein)

3.2 Amended and Restated By-Laws, as amended through September 1, 2005 (filed as Exhibit 3.1 to NCI’s Current Report on Form 8-K dated September 1, 2005 and incorporated by reference herein)

4.1 Form of certificate representing shares of NCI’s common stock (filed as Exhibit 1 to NCI’s registration statement on Form 8-A filed with the SEC on July 20, 1998 and incorporated by reference herein)

4.2 Credit Agreement, dated June 18, 2004, by and among NCI, certain of its subsidiaries, as guarantors, Wachovia Bank, National Association, as administrative agent, Bank of America, N.A., as syndication agent, and the several lenders named therein (filed as Exhibit 4.1 to NCI’s Form 10-Q/A, filed with the SEC on September 16, 2004, amending its quarterly report on Form 10-Q for the quarter ended July 31, 2004 and incorporated by reference herein)

4.3 First Amendment to Credit Agreement, dated as of November 9, 2004, between NCI Building Systems, Inc, as borrower, certain of its subsidiaries, as guarantors, Wachovia National Bank, National Association, as administrative agent and lender, and the several lenders named therein (filed as Exhibit 10.1 to NCI’s Current Report on Form 8-K dated November 16, 2004 and incorporated by reference herein)

4.4 Second Amendment to Credit Agreement, dated as of October 14, 2005, between NCI Building Systems, Inc, as borrower, certain of its subsidiaries, as guarantors, Wachovia National Bank, National Association, as administrative agent and lender, and the several lenders named therein (filed as Exhibit 10.1 to NCI’s Current Report on Form 8-K dated October 14, 2005 and incorporated by reference herein)

4.5 Rights Agreement, dated June 24, 1998, between NCI and Harris Trust and Savings Bank (filed as Exhibit 2 to NCI’s registration statement on Form 8-A filed with the SEC on July 20, 1998 and incorporated by reference herein)

4.6 First Amendment to Rights Agreement, dated June 24, 1999, between NCI and Harris Trust and Savings Bank (filed as Exhibit 3 to NCI’s registration statement on Form 8-A, Amendment No. 1 filed with the SEC on June 25, 1999 and incorporated by reference herein)

4.7 Indenture, dated November 16, 2004, by and among NCI, and The Bank of New York (filed as Exhibit 4.1 to NCI’s Current Report on Form 8-K dated November 16, 2004 and incorporated by reference herein)

4.8 Registration Rights Agreement, dated November 16, 2004, among NCI Building Systems, Inc., UBS Securities LLC and Wachovia Capital Markets LLC. (filed as Exhibit 99.2 to NCI’s Current Report on Form 8-K dated November 16, 2004 and incorporated by reference herein)

†10.1 Employment Agreement, dated April 12, 2004, among the Company, NCI Group, L.P. and Norman C. Chambers (filed as Exhibit 10.1 to NCI’s Quarterly Report on Form 10-Q for the quarter ended May 1, 2004 and incorporated by reference herein)

33

†10.2	Amended and Restated Bonus Program, as amended and restated as of December 8, 2005 (filed as Exhibit 10.1 to NCI’s Current Report on Form 8-K dated December 8, 2005 and incorporated by reference herein)
†10.3	Stock Option Plan, as amended and restated on December 14, 2000 (filed as Exhibit 10.4 to NCI’s Annual Report on Form 10-K for the fiscal year ended October 31, 2000 and incorporated by reference herein)
†10.4	Form of Nonqualified Stock Option Agreement (filed as Exhibit 10.5 to NCI’s Annual Report on Form 10-K for the fiscal year ended October 31, 2000 and incorporated by reference herein)
†10.5	2003 Long-Term Stock Incentive Plan, as amended and restated March 11, 2005 (filed as Exhibit 10.1 to NCI’s Current Report on Form 8-K dated March 11, 2005 and incorporated by reference herein)
†10.6	Form of Nonqualified Stock Option Agreement (filed as Exhibit 4.2 to NCI’s registration statement no. 333-111139 and incorporated by reference herein)
†10.7	Form of Incentive Stock Option Agreement (filed as Exhibit 4.3 to NCI’s registration statement no. 333-111139 and incorporated by reference herein)
†10.8	Form of Restricted Stock Agreement (filed as Exhibit 10.8 to NCI’s Annual Report on Form 10-K for the fiscal year ended October 30, 2004 and incorporated by reference herein)
†10.11	Amended and Restated Supplemental Benefit Plan (as amended and restated on December 12, 2002 (filed as Exhibit 10.8 to NCI’s Annual Report on Form 10-K for the fiscal year ended November 2, 2002 and incorporated by reference herein)
†10.12	Supplemental Benefit Agreement, dated December 13, 2002, between NCI and A.R. Ginn, Jr. (filed as Exhibit 10.9 to NCI’s Annual Report on Form 10-K for the fiscal year ended November 2, 2002 and incorporated by reference herein)
†10.13	Agreement Relating to Retirement, dated October 26, 2004, between NCI and Robert J. Medlock (filed as Exhibit 10.1 to NCI’s Current Report on Form 8-K dated October 25, 2004 and incorporated by reference herein)
†*10.14	Supplemental Benefit Agreement, dated August 26, 2004, between NCI and Ken Maddox
†10.15	Special Long-Term Restricted Stock Award Agreement, dated August 28, 2003 between NCI and Kelly R. Ginn (filed as Exhibit 10.21 to NCI’s Annual Report on Form 10-K for the fiscal year ended November 1, 2003 and incorporated by reference herein)
†10.16	First Amendment, dated May 27, 2004, to Special Long-Term Restricted Stock Award Agreement, dated August 28, 2003, between NCI and Kelly R. Ginn (filed as Exhibit 10.1 to NCI’s Quarterly Report on Form 10-Q for the quarter ended July 30, 2005 and incorporated by reference herein)

34

†*10.17	Second Amendment, dated October 24, 2005, to Special Long-Term Restricted Stock Award Agreement, dated August 28, 2003, between NCI and Kelly R. Ginn.
†10.18	Special Long-Term Restricted Stock Award Agreement, dated May 28, 2004, between NCI and A.R. Ginn (filed as Exhibit 10.15 to NCI’s Annual Report on Form 10-K for the fiscal year ended October 30, 2004 and incorporated by reference herein)
†*10.19	First Amendment, dated October 24, 2005, to Special Long-Term Restricted Stock Award Agreement, dated May 28, 2004, between NCI and A.R. Ginn
†10.20	Restricted Stock Agreement, dated April 26, 2004, between NCI and Norman C. Chambers (filed as exhibit 10.2 to NCI’s Quarterly Report on Form 10-Q for the quarter ended May 1, 2004 and incorporated by reference herein)
†*10.21	First Amendment, dated October 24, 2005, to Restricted Stock Agreement, dated April 26, 2004, between NCI and Norman C. Chambers
†10.22	NCI Building Systems, Inc. Deferred Compensation Plan (as effective December 8, 2005)( (filed as Exhibit 10.2 to NCI’s Current Report on Form 8-K dated December 8, 2005 and incorporated by reference herein)
*12.1	Computation of Ratios of Earnings to Fixed Charges
*13.1	2005 Annual Report to Shareholders. With the exception of the information incorporated by reference into Items 5, 6, 7, 7A, 8 and 9a of this Form 10-K, the 2005 Annual Report to Shareholders is not to be deemed filed as part of this Form 10-K.
14.1	Code of Business Conduct and Ethics (filed as Exhibit 10.20 to NCI’s Annual Report on Form 10-K for the fiscal year ended November 1, 2003 and incorporated by reference herein)
*21.1	List of Subsidiaries
*23.1	Consent of Independent Registered Public Accounting Firm
*23.2	Report of Independent Registered Public Accounting Firm
*24.1	Powers of Attorney
*31.1	Rule 13a-14(a)/15d-14(a) Certifications (Section 302 of the Sarbanes-Oxley Act of 2002)
*31.2	Rule 13a-14(a)/15d-14(a) Certifications (Section 302 of the Sarbanes-Oxley Act of 2002)
*32.1	Certifications pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code (Section 906 of the Sarbanes-Oxley Act of 2002)
*32.2	Certifications pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code (Section 906 of the Sarbanes-Oxley Act of 2002)

* Filed herewith

† Management contracts or compensatory plans or arrangements

35

EX-10.14

Exhibit 10.14

SUPPLEMENTAL BENEFIT AGREEMENT

This Supplemental Benefit Agreement (this “Agreement”), dated August 26, 2004, is by and between NCI Building Systems, Inc. (the “Company”), and Kenneth W. Maddox (“Employee”).

ARTICLE I

PURPOSE

The purpose of this Agreement is to provide retirement and survivor benefits to or on behalf of a member of senior management or highly compensated Employee on the terms and conditions set forth herein to reward Employee for loyal service to the Company and to provide an incentive to remain in the employ of the Company. The Company intends that this Agreement shall constitute an unfunded deferred compensation arrangement for a member of a select group of senior management or highly compensated employee for purposes of the Internal Revenue Code of 1986, as amended (the “Code”) and of the Employee Retirement Income Security Act of 1974, as amended, and that Employee or Beneficiary shall have the status of an unsecured general creditor of the Company in the event the Company becomes Insolvent as to this Agreement and any trust fund that may be established by the Company, or asset identified specifically by the Company, as a reserve for the discharge of its obligations under this Agreement. Benefits provided under this Agreement are in addition to any other benefit plans or programs of the Company. The existence of this Agreement does not limit or otherwise affect Employee’s participation in any other plan sponsored by the Company.

ARTICLE II

DEFINITIONS

Unless the context otherwise requires, capitalized terms used herein shall have the meanings set forth below:

2.1 “Administrator” means the Company or such other person or committee as may be appointed from time to time by the Board to administer this Agreement.

2.2 “Agreement” means this Agreement, as it may be amended from time to time.

2.3 “Beneficiary” means the Beneficiary designated in writing by Employee on Exhibit “A” hereto to receive benefits due under this Agreement after his or her death. If Employee fails to designate a Beneficiary or if the designated Beneficiary predeceases Employee, Employee’s Beneficiary shall be his or her spouse, if living, and if no such spouse is living, Employee’s estate.

2.4 “Board” means the Board of Directors of the Company, or any committee of the Board or person authorized to act on its behalf.

2.5 “Cause” shall be determined by the Board, in its sole and absolute discretion, and means the occurrence of any or all of the following:

(a) Employee’s conviction for committing an act of fraud, embezzlement, theft, or other act constituting a felony; or

1

(b) The willful engaging by Employee in gross misconduct materially and demonstrably injurious to the Company, as determined by the Company. However, no act or failure to act, on Employee’s part shall be considered “willful” unless done, or omitted to be done, by Employee not in good faith and without reasonable belief that his action or omission was in the best interest of the Company; or

(c) The failure or inability for any reason of Employee to devote his full business time to the Company’s business.

2.6 “Change in Control” of the Company means the occurrence of one or more of the following conditions:

(a) Any “Person”, [as defined in Section 3(a)(9) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and used in Sections 13(d) and 14(d) thereof], including a “group” as defined in Section 13(d) of the Exchange Act, (other than those Persons in control of the Company, as of the effective date of this Agreement, or other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company, or a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company), becomes the “Beneficial Owner”, [as described in Rule 13d-3 of the General Rules and Regulations under the Exchange Act], directly or indirectly, of securities of the Company representing twenty-five percent (25%) or more of the combined voting power of the Company’s then outstanding securities; or

(b) During any period of two (2) consecutive years (not including any period prior to the execution of this Agreement), individuals who are in the beginning of such period constitute the Board (and any new members of the Board, whose election by the Company’s stockholders was approved by a vote of at least two-thirds (2/3) of the Board members then still in office who either were Board members at the beginning of the period or whose election or nomination for election was so approved), cease for any reason to constitute a majority thereof; or

(c) The stockholders or Directors of the Company approve: (A) a plan of complete liquidation of the Company; or (B) an agreement for the sale or disposition of all or substantially all the Company’s assets; or (C) a merger, consolidation, or reorganization of the Company with or involving any other corporation, other than a merger, consolidation, or reorganization that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity), at least fifty percent (50%) of the combined voting power of the voting securities of the Company (or such surviving entity) outstanding immediately after such merger, consolidation, or reorganization.

However, in no event shall a Change in Control be deemed to have occurred, with respect to Employee if Employee is part of a purchasing group that consummates the Change in Control transaction. Employee shall be deemed “part of a purchasing group” for purposes of the

2

preceding sentence if Employee is an equity participant in the purchasing company or group (except for: (i) passive ownership of less than three percent (3%) of the stock of the purchasing company; or (ii) ownership of equity participation in the purchasing company or group which is otherwise not significant, as determined prior to the Change in Control by a majority of the non-employee continuing Board members).

2.7 “Disabled” or “Disability” means the physical or mental incapacity of Employee which, in the opinion of a physician approved by the Company, will permanently prevent Employee from performing the principal duties of his or her employment with the Company.

2.8 “Employee” means any person employed by the Company who is included on the Federal Insurance Contribution Act rolls of the Company.

2.9 “Insolvent” means (i) the Company is unable to pay its debts as they become due or (ii) the Company is subject to a pending proceeding as a debtor under the United States Bankruptcy Code.

2.10 “Preretirement Survivor Benefit” means with respect to Employee, the amount designated by the Board and listed on Exhibit “A” to this Agreement to which Employee’s Beneficiary will be entitled in the event Employee dies prior to terminating employment with the Company. A Preretirement Survivor Benefit will be payable in accordance with Section 3.3.

2.11 “Normal Retirement Age” means, with respect to Employee, the date Employee attains age 65.

2.12 “Normal Retirement Date” means, with respect to Employee, the later of (i) the first day of the month following the date Employee attains Normal Retirement Age or (ii) the first day of the month following the termination of Employee’s employment with the Company.

2.13 “Year of Participation” means (i) each calendar year during which Employee performs at least 1,000 hours of service for the Company, and (ii) each other calendar year, or portion thereof, commencing May 1, 1998, during which Employee performs at least 1,000 hours of service for the Company.

2.14 “Retirement Benefit” means, with respect to Employee, the amount designated by the Board on Exhibit “A” to this Agreement to which Employee will be entitled in the event of Employee’s termination of employment, subject to the vesting provisions of Section 3.4. Employee’s Retirement Benefit will be payable in accordance with Section 3.2.

ARTICLE III

CONTRIBUTIONS AND BENEFITS

3.1 Amount of Benefits. The amount of Retirement Benefit and Preretirement Survivor Benefit to which Employee shall be entitled under this Agreement are set forth on Exhibit “A,” attached hereto and incorporated by reference herein. The Company shall establish a separate bookkeeping account for Employee and such account shall be credited with the amounts awarded to Employee.

3

3.2 Retirement Benefits. Except as provided in Section 3.5, the Retirement Benefit credited to Employee’s bookkeeping account pursuant to Section 3.1, to the extent vested under Section 3.4, shall become payable in the form described herein to Employee as soon as administratively practicable, but not later than 30 days, following Employee’s Normal Retirement Date, or if earlier, the date Employee ceases active employment with the Company due to his Disability. Employee’s Retirement Benefit shall be paid on April 15th of each calendar year in equal annual installments over a period of 10 years if, on each annual payment date, Employee has not breached or violated any of his or her covenants set forth in Article V hereof. If Employee dies prior to receiving the entire Retirement Benefit to which he or she is entitled and has not breached or violated any of his or her covenants set forth in Article V hereof, Employee’s Beneficiary shall receive the unpaid portion of Employee’s Retirement Benefit in equal annual payments during the remainder of the 10-year period. Notwithstanding any other provision of this Agreement to the contrary, if Employee breaches or violates any of his or her covenants set forth in Article V hereof, Employee immediately shall forfeit his or her rights to any remaining Retirement Benefit under this Agreement.

3.3 Preretirement Survivor Benefit. If Employee dies while employed by the Company, Employee shall not be entitled to a Retirement Benefit and Employee’s Beneficiary shall receive the Preretirement Survivor Benefit credited to Employee’s bookkeeping account under Section 3.1 payable in equal annual installments over a period of 10 years. Payment of the Beneficiary’s Preretirement Survivor Benefit shall commence on the April 15th next following the date of death. If Employee’s Beneficiary dies prior to the payment of the entire Preretirement Survivor Benefit, the then present value of Beneficiary’s remaining Preretirement Survivor Benefit, determined in accordance with Section 3.5(c) hereof, shall be paid to Beneficiary’s estate in a single sum distribution within 30 days after the date of Beneficiary’s death.

3.4 Vesting.

(a) Employee’s right to a Retirement Benefit shall vest over a period of 5 years, at the rate of 20% for each Year of Participation completed by Employee after the date of execution of this Agreement. In addition, Employee shall become fully vested in his or her Retirement Benefit upon the occurrence of his or her death, Disability or a Change in Control. Notwithstanding any other provision of this Agreement to the contrary, if Employee’s employment with the Company is terminated for Cause, Employee shall forfeit his or her rights to any benefits under this Agreement.

(b) Employee acknowledges and agrees that during the vesting period described in Section 3.4(a) above, the Company may, from time to time, be required by applicable law to withhold amounts for certain federal employment taxes related to or incurred in connection with the amount of the benefit vested during each Year of Participation (the “Employment Taxes”). Employee may elect, in his sole discretion, to pay such Employment Taxes by either (i) delivering to the Company a check, cash or other readily available funds in an amount equal to the Employment Taxes no later than 30 days prior to the end of the applicable Year of Participation, or (ii) executing such documentation as the Company may require authorizing the Company to, beginning July 1 of the applicable Year of Participation, withhold from the Employee’s compensation, in substantially equal amounts per pay period, the Employment Taxes.

4

Notwithstanding the foregoing, if Employee terminates service with the Company subsequent to receiving a Year of Participation for vesting purposes under the Plan but prior to paying the entire amount of Employment Taxes applicable to such Year of Participation, Employee agrees, in the sole discretion of the Company, to either (i) execute such documentation as the Company may require authorizing the Company to withhold from the Employee’s final paycheck the balance of the Employment Taxes due or (ii) deliver to the Company a check, cash or other readily available funds in an amount equal to the Employment Taxes no later than the date of termination of Employee’s employment with the Company.

3.5 Timing of Certain Payments. Notwithstanding the provisions of Section 3.2, benefits will be paid to Employee or if applicable his or her Beneficiary upon the following terms:

(a) If Employee’s employment with the Company is terminated without Cause on or after the occurrence of a Change in Control (irrespective of whether such termination is initiated by Employee or the Company and without regard to the reason therefor), the present value of Employee’s Retirement Benefit, determined in accordance with Section 3.5(c) hereof, shall be paid to Employee in a single sum distribution within 30 days after Employee’s termination of employment.

(b) If Employee’s employment with the Company is terminated without Cause prior to the occurrence of a Change in Control (irrespective of whether such termination is initiated by Employee or the Company and without regard to the reason therefor), Employee shall become fully vested in his or her Retirement Benefit, which Retirement Benefit shall be paid on August 15th of each calendar year, commencing on the August 15th next following such termination. If a Change in Control occurs while Employee is entitled to receive his Retirement Benefit, the then present value of Employee’s remaining Retirement Benefit, determined in accordance with Section 3.5(c) hereof, shall be paid to Employee in a single sum distribution within 30 days after such Change in Control.

(c) For purposes of this Agreement, whenever the Company is required to calculate the present value of any benefit to be paid to Employee or Beneficiary hereunder, the Company shall calculate the present value of such benefit using a discount rate equal to the prime rate reported by the Company’s principal bank lender on the date on which such payment became payable (i.e., the date of termination of Employee’s employment with the Company or the occurrence of a Change in Control), but in no event shall such discount rate exceed 8%.

(d) The Administrator may make payments from this Agreement before they would otherwise be due if, based on a change in the federal or applicable state tax or revenue laws, a published ruling or similar announcement issued by the Internal Revenue Service, a regulation issued by the Secretary of the Treasury, a decision by a court or competent jurisdiction involving Employee or a Beneficiary, or a closing agreement made under Code section 7121 that is approved by the Internal Revenue Service and involves Employee, the Administrator determines that Employee has or will recognize income for federal or state income tax purposes with respect to amounts that are or will be payable under this Agreement before they otherwise would be paid. The amount of any payments made from this Agreement pursuant to this Section 3.5 shall not exceed the lesser of (i) the amount in the trust properly allocable to Employee or (ii) the amount of taxable income with respect to which the tax liability is assessed or determined.

5

3.6 Financing this Agreement. All benefits under this Agreement shall be paid or provided directly by the Company. Such benefits shall be general obligations of the Company which shall not require the segregation of any funds or property therefor. Notwithstanding the foregoing, in the discretion of the Company, the Company’s obligations hereunder may be satisfied from a grantor trust established by the Company or from an insurance contract, annuity or similar funding vehicle owned by the Company. The assets of any such trust, insurance contract, or other funding vehicle shall continue for all purposes to be a part of the general funds of the Company, shall be considered solely a means to assist the Company to meet its contractual obligations under this Agreement and shall not create a funded account or security interest for the benefit of Employee under this Agreement. All such assets shall be subject to the claims of the general creditors of the Company in the event the Company is Insolvent. To the extent that any person acquires a right to receive a payment from the Company under this Agreement, such right shall be no greater than the right of any unsecured general creditor of the Company.

3.7 Death of Employee. In the event of Employee’s death, the Company shall make any payments called for hereunder to his or her Beneficiary in the manner described in Section 3.2 or 3.3, as applicable, following his or her death. Any payment made by the Company in good faith shall fully discharge the Company from its obligations with respect to such payment, and the Company shall have no further obligation to see to the application of any money so paid.

3.8 Claims Procedure. Employee or Beneficiary may make a claim for specific benefits under this Agreement by filing a written request with the Company. If a claim is wholly or partially denied, notice of the decision shall be furnished to the claimant within 60 days after receipt of the claim by the Company, unless special circumstances require an extension of time for processing the claim, in which case a decision shall be rendered as soon as possible, but in no event later than 120 days after receipt of the claim. Written notice of the extension shall be furnished to the claimant prior to the termination of the initial 60-day period, and shall indicate the circumstances requiring the extension and the date by which the Company expects to render its decision. The notice of the decision shall contain the specific reason or reasons for the denial of the claim, specific references to pertinent provisions of this Agreement on which the denial is based, a description of any additional material or information necessary for the claimant to perfect the claim, an explanation of why such additional material or information is necessary and an explanation of the claims review procedure in this Agreement. If notice of the denial is not furnished in accordance with the above procedure, the claim shall be deemed denied and the claimant shall be permitted to proceed with the review procedure. A claimant or his duly authorized representative may appeal the denial of a claim by making a written application to the Company requesting a review. The claimant or his duly authorized representative may, in connection with the appeal, review pertinent documents and submit issues and comments to the Company in writing. The request for a review of a denied claim must be made to the Company within 60 days after receipt by the claimant of written notification of denial of a claim. A decision by the Company shall be made no later than 60 days after its receipt of a request for a review, unless special circumstances require an extension of time for processing the request, in which case a decision shall be rendered as soon as possible, but in no event later than 120 days after receipt of the request for review. If such an extension of time for review is required, written

6

notice of the extension shall be furnished to the claimant prior to the commencement of the extension. The decision on review shall be in writing and shall include specific reasons for the decision and specific references to the pertinent Agreement provisions on which the decision is based. If the decision on review is not furnished within the appropriate time, the claim shall be deemed denied on review. All interpretations, determinations, and decisions by the Company in respect of any matter hereunder will be final, conclusive, and binding upon the Company, Employee, Beneficiaries, and all other persons claiming any interest in this Agreement.

3.9 Arbitration. If Employee or Beneficiary has completed the claims procedures set forth in Section 3.8 and decides to pursue his or her claim further, Employee or Beneficiary shall comply with the following procedures:

(a) The exclusive remedy or method of resolving all disputes or questions arising out of or relating to this Agreement shall be arbitration. Arbitration shall be held in Houston, Texas by three arbitrators, one to be appointed by the Company, a second to be appointed by Employee (or Beneficiary, if applicable), and a third to be appointed by those two arbitrators. The third arbitrator shall act as chairman. Any arbitration may be initiated by Employee (or Beneficiary) by written notice to the Company specifying the subject of the requested arbitration and appointing Employee’s (or Beneficiary’s) arbitrator (“Arbitration Notice”).

(b) If (i) the Company fails to appoint an arbitrator by written notice to Employee (or Beneficiary) within ten days after the Arbitration Notice is given, or (ii) the two arbitrators appointed by the parties herein fail to appoint a third arbitrator within ten days after the date of the appointment of the second arbitrator, then the American Arbitration Association in Houston, Texas, upon application of Employee (or Beneficiary) shall appoint an arbitrator to fill that position.

(c) The arbitration proceeding shall be conducted in accordance with the rules of the American Arbitration Association. A determination or award made or approved by at least two of the arbitrators shall be the valid and binding action of the arbitrators. The costs of arbitration (exclusive of the expense of a party in obtaining and presenting evidence and attending the arbitration and of the fees and expense of legal counsel to a party, all of which shall be borne by that party) shall be borne by the Company if Employee (or Beneficiary) receives substantially the relief sought by Employee (or Beneficiary) in the arbitration, whether by settlement, award, or judgment; otherwise, the costs shall be borne equally by the parties. The arbitration determination or award shall be final and conclusive on the parties, and judgment upon such award may be entered and enforced in any court of competent jurisdiction.

ARTICLE IV

ADMINISTRATION

4.1 Authority of Company. The Administrator may adopt rules and procedures regarding the operation of this Agreement and shall have full power and authority to interpret, construe and administer this Agreement. The Administrator’s interpretation and construction hereof, and actions hereunder, including any determination of the amount or recipient of any payment to be made under this Agreement, shall be binding and conclusive on all persons and

7

for all purposes. The Board may request that certain employees assist the Administrator in its administration of this Agreement. The Administrator may employ attorneys, accountants, actuaries and other professional advisors to assist the Administrator in its administration of this Agreement. The Company shall pay the reasonable fees of any such advisor employed by the Administrator. To the extent permitted by law, no member of the Board or any employee or officer of the Company shall be liable to any person for any action taken or omitted in connection with the interpretation and administration of this Agreement unless attributable to his or her own willful misconduct or lack of good faith.

4.2 Indemnification of Employees of the Company. The Company hereby agrees to indemnify, jointly and severally, all members of the Board and all employees of the Company against any and all claims, losses, damages, expenses, including counsel fees, incurred by them, and any liability, including any amounts paid in settlement with their approval arising from their action or failure to act with respect to any matter relating to this Agreement, except when the same is judicially determined to be attributable to their willful misconduct or lack of good faith. The indemnification provided by this Section 4.2 shall survive the termination of this Agreement and shall be binding upon the Company’s successors and assigns.

4.3 Cost of Administration. The cost of this Agreement and the expenses of administering this Agreement shall be paid by the Company.

ARTICLE V

NON-COMPETITION AND NON-SOLICITATION

In consideration for participation in this Agreement, Employee hereby covenants and agrees as follows:

(a) At all times during the period in which he receives Retirement Benefits pursuant to Section 3.2 hereof, Employee shall not, directly or indirectly and whether on his own behalf or on behalf of any other person, partnership, association, corporation or other entity, engage in or be an owner, director, officer, employee, agent, consultant or other representative of or for any business that manufactures, engineers, markets, sells or provides, in any state of the United States of America, metal building systems or components (including, without limitation, primary and secondary framing systems, roofing systems, end or side wall panels, doors, windows or other metal components of a building structure), coated or painted steel or metal coils, coil coating or painting services, or any other products or services that are the same as or similar to those manufactured, engineered, marketed, sold or provided by the Company or its subsidiaries and affiliates during the period of employment of Employee by the Company. Ownership by Employee of equity securities of the Company, or of equity securities in other publicly owned companies constituting less than 1% of the voting securities in such companies, shall be deemed not to be a breach of this covenant.

(b) At all times during the period in which he receives Retirement Benefits pursuant to Section 3.2 hereof, Employee shall not, directly or indirectly and whether on his own behalf or on behalf of any other person, partnership, association, corporation or other entity, either hire, seek to hire or solicit the employment of any employee of the Company or in any manner attempt to influence or induce any employee of the Company or its subsidiaries and

8

affiliates to leave the employment of the Company or its subsidiaries and affiliates, or use or disclose to any person, partnership, association, corporation or other entity any information concerning the names and addresses of any employees of the Company or its subsidiaries and affiliates unless required by due process of law.

ARTICLE VI

AMENDMENT AND TERMINATION

6.1 Amendment. The Company, by action of the Board, shall have the right to amend this Agreement at any time and from time to time, including a retroactive amendment, by resolution adopted by the Board. Any such amendment shall become effective upon the date stated therein, except as otherwise provided in such amendment; provided, however, that no such action shall affect any benefit adversely to which Employee would be entitled had his employment terminated immediately before such amendment was effective.

6.2 Termination. The Company has entered into this Agreement with the bona fide intention and expectation that from year to year it will deem it advisable to continue it in effect. However, the Board, in its sole discretion, reserves the right to terminate this Agreement in its entirety at any time; provided, however, that (i) Employee’s benefits hereunder shall not be affected by the termination where the event giving rise to the benefit (Employee’s termination of employment, death or disability, or a Change in Control) has occurred and (ii) no such action shall affect any benefit adversely to which Employee would be entitled had his employment terminated immediately before such termination was effective.

ARTICLE VII

GENERAL PROVISIONS

7.1 Rights Against the Company. This Agreement shall not be deemed to constitute an employment contract between the Company and Employee or to be a consideration for, or an inducement for, the employment of Employees by the Company. Nothing contained in this Agreement shall be deemed to give Employee the right to be retained in the service of the Company or to interfere with the right of the Company to discharge Employee at any time, without regard to the effect such discharge may have on any rights under this Agreement.

7.2 Payment Due an Incompetent. If the Company shall find that any person to whom any payment is payable under this Agreement is unable to care for his affairs because of mental or physical illness, accident, or death, or is a minor, any payment due (unless a prior claim therefor shall have been made by a duly appointed guardian, committee or other legal representative) may be paid to the spouse, a child, a parent, a brother or sister or any person deemed by the Company, in its sole discretion, to have incurred expenses for such person otherwise entitled to payment, in such manner and proportions as the Company may determine. Any such payment shall be a complete discharge of the liabilities of the Company under this Agreement, and the Company shall have no further obligation to see to the application of any money so paid.

7.3 Spendthrift Clause. No right, title or interest of any kind in this Agreement shall be transferable or assignable by Employee or Beneficiary or be subject to alienation,

9

anticipation, encumbrance, garnishment, attachment, execution or levy of any kind, whether voluntary or involuntary, nor subject to the debts, contracts, liabilities, engagements, or torts of Employee or Beneficiary. Any attempt to alienate, anticipate, encumber, sell, transfer, assign, pledge, garnish, attach or otherwise subject to legal or equitable process or encumber or dispose of any interest in this Agreement shall be void.

7.4 Severability. In the event that any provision of this Agreement shall be declared illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining provisions of this Agreement but shall be fully severable and this Agreement shall be construed and enforced as if said illegal or invalid provision had never been inserted herein.

7.5 Construction. The article and section headings and numbers are included only for convenience of reference and are not to be taken as limiting or extending the meaning of any of the terms and provisions of this Agreement. Whenever appropriate, words used in the singular shall include the plural or the plural may be read as the singular. When used herein, the masculine gender includes the feminine gender.

7.6 Governing Law. The validity and effect of this Agreement, and the rights and obligations of all persons affected hereby, shall be construed and determined in accordance with the laws of the State of Texas unless superseded by federal law.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

EMPLOYEE:	NCI BUILDING SYSTEMS, INC.
/s/ Kenneth W. Maddox	By:	/s/ A. R. Ginn
Kenneth W. Maddox		A. R. Ginn, Chairman of the Board and Chief Executive Officer

10

EXHIBIT “A”

SUPPLEMENTAL BENEFIT AGREEMENT

Retirement Benefit	Preretirement Survivor Benefit
$100,000 per year	$100,000 per year

Beneficiary:	Lorita Y. Maddox
Address:	1030 Hwy 84E
	Fairfield, TX 75840
Relationship to Employee:	Wife

If Employee is married and has designated a person other than his spouse as Beneficiary of his benefits under the Agreement, his spouse, by executing this Exhibit A, hereby consents to such designation and waives her community property rights, if any, to such benefits.

EXECUTED this                      day of                         , 200    .

[Name of Employee’s Spouse]

11

EX-10.17

Exhibit 10.17

SECOND AMENDMENT

TO

RESTRICTED STOCK AGREEMENT

This Second Amendment to Restricted Stock Agreement (this “Amendment”) is entered into by and between Kelly R. Ginn, a resident of the State of Texas (“Grantee”), and NCI Building Systems, Inc., a Delaware corporation (the “Company”), effective as of the date fully executed by both parties as set forth below.

WHEREAS, the parties to this Amendment have entered into that certain Restricted Stock Agreement, dated August 28, 2003, and the First Amendment to Restricted Stock Agreement dated May 27, 2004 (the “Agreement”), pursuant to which the Company awarded to Grantee a special, long-term grant of restricted stock; and

WHEREAS, Section 16 of the Agreement provides that the Agreement may be amended by a written agreement signed by both the Company and Grantee; and

WHEREAS, the parties desire to amend the Agreement as herein set forth;

NOW, THEREFORE, the parties hereto hereby approve and adopt this Amendment as follows:

1. Section 4(a)(ii) of the Agreement shall be amended in its entirety as follows:

“(ii) by the Company without Cause or by Grantee’s voluntary resignation with Good Reason before all of the Awarded Shares become vested Awarded Shares, all of the Unvested Awarded Shares shall vest as of the Termination Date.”

2. Except as amended hereby, the Agreement shall remain in full force and effect in accordance with its terms.

3. Unless otherwise indicated, all capitalized terms used in this Amendment, including the above preambles, shall have the same meanings ascribed to those terms in the Agreement.

4. Any reference in the Agreement to the “Agreement” shall refer to the Agreement as amended by this Amendment.

IN WITNESS WHEREOF, the parties have duly executed this Amendment as of the dates set forth below.

/s/    KELLY R. GINN        

Kelly R. Ginn

Date: October 24, 2005

NCI BUILDINGS SYSTEMS, INC.
By:	/s/    FRANCES R. POWELL
	Frances R. Powell
	Executive Vice President, Chief Financial Officer and Treasurer
Date: October 24, 2005

EX-10.19

Exhibit 10.19

FIRST AMENDMENT

TO

RESTRICTED STOCK AGREEMENT

This First Amendment to Restricted Stock Agreement (this “Amendment”) is entered into by and between Albert R. Ginn, Jr., a resident of the State of Texas (“Grantee”), and NCI Building Systems, Inc., a Delaware corporation (the “Company”), effective as of the date fully executed by both parties as set forth below.

WHEREAS, the parties to this Amendment have entered into that certain Restricted Stock Agreement, dated May 28, 2004 (the “Agreement”), pursuant to which the Company awarded to Grantee a special, long-term grant of restricted stock; and

WHEREAS, Section 16 of the Agreement provides that the Agreement may be amended by a written agreement signed by both the Company and Grantee; and

WHEREAS, the parties desire to amend the Agreement as herein set forth;

NOW, THEREFORE, the parties hereto hereby approve and adopt this Amendment as follows:

1. Section 4(a)(ii) of the Agreement shall be amended in its entirety as follows:

“(ii) by the Company without Cause or by Grantee’s voluntary resignation with Good Reason before all of the Awarded Shares become vested Awarded Shares, all of the Unvested Awarded Shares shall vest as of the Termination Date.”

2. Except as amended hereby, the Agreement shall remain in full force and effect in accordance with its terms.

3. Unless otherwise indicated, all capitalized terms used in this Amendment, including the above preambles, shall have the same meanings ascribed to those terms in the Agreement.

4. Any reference in the Agreement to the “Agreement” shall refer to the Agreement as amended by this Amendment.

IN WITNESS WHEREOF, the parties have duly executed this Amendment as of the dates set forth below.

/s/    ALBERT R. GINN, JR.        

Albert R. Ginn, Jr.

Date: October 24, 2005

NCI BUILDINGS SYSTEMS, INC.
By:	/s/    FRANCES R. POWELL
	Frances R. Powell
	Executive Vice President, Chief Financial Officer and Treasurer
Date: October 24, 2005

EX-10.21

Exhibit 10.21

FIRST AMENDMENT

TO

RESTRICTED STOCK AGREEMENT

This First Amendment to Restricted Stock Agreement (this “Amendment”) is entered into by and between Norman C. Chambers, a resident of the State of Texas (“Grantee”), and NCI Building Systems, Inc., a Delaware corporation (the “Company”), effective as of the date fully executed by both parties as set forth below.

WHEREAS, the parties to this Amendment have entered into that certain Restricted Stock Agreement, dated April 26, 2004 (the “Agreement”), pursuant to which the Company awarded to Grantee a special, long-term grant of restricted stock; and

WHEREAS, Section 16 of the Agreement provides that the Agreement may be amended by a written agreement signed by both the Company and Grantee; and

WHEREAS, the parties desire to amend the Agreement as herein set forth;

NOW, THEREFORE, the parties hereto hereby approve and adopt this Amendment as follows:

1. Section 4(a)(ii) of the Agreement shall be amended in its entirety as follows:

“(ii) by the Company without Cause or by Grantee’s voluntary resignation with Good Reason before all of the Awarded Shares become vested Awarded Shares, all of the Unvested Awarded Shares shall vest as of the Termination Date.”

2. Except as amended hereby, the Agreement shall remain in full force and effect in accordance with its terms.

3. Unless otherwise indicated, all capitalized terms used in this Amendment, including the above preambles, shall have the same meanings ascribed to those terms in the Agreement.

4. Any reference in the Agreement to the “Agreement” shall refer to the Agreement as amended by this Amendment.

IN WITNESS WHEREOF, the parties have duly executed this Amendment as of the dates set forth below.

/s/    NORMAN C. CHAMBERS        

Norman C. Chambers

Date: October 24, 2005

NCI BUILDINGS SYSTEMS, INC.
By:	/s/    FRANCES R. POWELL
	Frances R. Powell
	Executive Vice President, Chief Financial Officer and Treasurer
Date: October 24, 2005

EX-12.1

Exhibit 12.1

COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES

(In thousands)

	Oct. 31, 2001		Nov. 2, 2002		Nov. 1, 2003		Oct. 30, 2004		Oct. 29, 2005
Income from continuing operations	$	16,535	$	31,314	$	22,800	$	44,890	$	55,951
Income taxes for continuing operations		16,151		19,535		14,758		29,767		40,260
		32,686		50,849		37,558		74,657		96,211
Fixed charges as defined:
Interest		33,090		21,591		19,777		15,126		14,459
Interest component of rentals charged to operating expense		657		621		540		469		540
Deferred financing charges		—		1,243		—		9,879		—
Total fixed charges		33,747		23,455		20,317		25,474		14,999
Earnings, as defined	$	66,433	$	74,304	$	57,875	$	100,131	$	111,210
Ratio of earnings to fixed charges		1.97		3.17		2.85		3.93		7.41

EX-13.1

Exhibit 13.1

NCI BUILDING SYSTEMS, INC.

FINANCIAL STATEMENTS AND OTHER INFORMATION

Table of Contents

SELECTED FINANCIAL DATA	2
CONSOLIDATED STATEMENTS OF OPERATIONS	3
CONSOLIDATED BALANCE SHEETS	4
CONSOLIDATED STATEMENTS OF CASH FLOWS	5
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY	6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	7
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING	24
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON INTERNAL CONTROL OVER FINANCIAL REPORTING	25
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	26
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	27
PRICE RANGE OF COMMON STOCK	40

SELECTED FINANCIAL DATA

The selected financial data for the three fiscal years ended October 29, 2005 and as of October 30, 2004 and October 29, 2005 has been derived from the audited consolidated financial statements included elsewhere herein. The selected financial data for the two fiscal years ended November 2, 2002 and as of November 1, 2003, November 2, 2002 and October 31, 2001 has been derived from audited consolidated financial statements not included herein. The following data should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the audited consolidated financial statements and the notes thereto included under “Financial Statements and Supplementary Data.”

	2001			2002			2003		2004			2005
	In thousands, except per share data
Sales	$	954,877		$	953,442		$	898,150	$	1,084,863		$	1,130,066
Income before cumulative effect of change in accounting principle		16,535	(1),(2)		31,314	(3)(4)		22,800		44,890	(3)		55,951
Income per share before cumulative effect of change in accounting principle
Basic:		0.91			1.70			1.21		2.28			2.73
Diluted:		0.91	(1), (2)		1.68	(1),(3),(4)		1.20		2.24	(3)		2.68
Working capital		49,461			80,157			66,585		130,806			293,051
Total assets		838,812			721,265			713,160		786,426			990,219
Total debt		367,500			297,300			248,750		216,700			373,000
Stockholders’ equity(5)	$	330,343		$	303,459		$	331,751	$	401,177		$	444,144
Average common shares (assuming dilution)		18,265			18,692			18,969		19,996			20,857

(1) Includes goodwill amortization of $12.2 million ($11.2 million after tax, or $0.61 per diluted share) in 2001. Goodwill is no longer amortized beginning in fiscal 2002 in accordance with the provisions of SFAS 142. Refer to Note 7 to the consolidated financial statements for additional information.

(2) Includes restructuring charge of $2.8 million ($1.8 million after tax, or $0.09 per diluted share) in 2001.

(3) Includes losses on debt refinancing of $1.2 million ($0.8 million after tax) and $9.9 million ($5.8 million after tax) in fiscal 2002 and fiscal 2004, respectively.

(4) During fiscal 2002, we recorded a transitional goodwill impairment loss as required per SFAS 142, which was reported as a cumulative effect of a change in accounting principle in the amount of $65.1 million ($3.49 per diluted share). This resulted in a net loss of $33.8 million ($1.81 per diluted share).

(5) Historically, we have not paid dividends.

2

CONSOLIDATED STATEMENTS OF OPERATIONS

NCI BUILDING SYSTEMS, INC.

(In thousands, except per share data)

	Fiscal year ended
	November 1, 2003			October 30, 2004			October 29, 2005
Sales	$	898,150		$	1,084,863		$	1,130,066
Cost of sales		700,631			822,722			850,699
Gross profit		197,519			262,141			279,367
Selling, general and administrative expenses		140,356			165,165			174,897
Income from operations		57,163			96,976			104,470
Interest income		12			68			5,019
Interest expense		(19,777	)		(15,126	)		(14,459	)
Loss on debt refinancing		—			(9,879	)		—
Other income, net		160			2,618			1,181
Income before income taxes		37,558			74,657			96,211
Provision for income taxes		14,758			29,767			40,260
Net income	$	22,800		$	44,890		$	55,951
Earnings per share:
Basic		1.21			2.28			2.73
Diluted		1.20			2.24			2.68
Weighted average shares outstanding:
Basic		18,811			19,709			20,501
Diluted		18,969			19,996			20,857

See accompanying notes to the consolidated financial statements.

3

CONSOLIDATED BALANCE SHEETS

NCI BUILDING SYSTEMS, INC.

(In thousands, except share data)

ASSETS	October 30, 2004			October 29, 2005
Current assets:
Cash and cash equivalents	$	8,222		$	200,716
Accounts receivable, net		108,869			110,094
Inventories, net		138,363			113,421
Deferred income taxes		16,442			15,470
Prepaid expenses		6,491			2,963
Total current assets		278,387			442,664
Property, plant and equipment, net		185,687			185,278
Goodwill		318,247			339,157
Other assets		4,105			23,120
Total assets	$	786,426		$	990,219
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	2,000		$	2,000
Accounts payable		57,569			55,874
Accrued compensation and benefits		41,007			34,475
Accrued interest		980			4,298
Other accrued expenses		46,025			52,966
Total current liabilities		147,581			149,613
Long-term debt		214,700			371,000
Deferred income taxes		22,968			25,462
Total long-term liabilities		237,668			396,462
Stockholders’ equity:
Preferred stock, $1 par value, 1,000,000 shares authorized, none issued and outstanding		—			—
Common stock, $.01 par value, 50,000,000 shares authorized; 20,344,752 and 21,408,697 shares issued in 2004 and 2005, respectively		204			208
Additional paid-in capital		134,210			167,960
Retained earnings		273,378			329,329
Unearned restricted stock compensation		(6,612	)		(12,674	)
Treasury stock, at cost, (229 shares and 1,063,229 shares in 2004 and 2005, respectively)		(3	)		(40,679	)
Total stockholders’ equity		401,177			444,144
Total liabilities and stockholders’ equity	$	786,426		$	990,219

See accompanying notes to the consolidated financial statements.

4

CONSOLIDATED STATEMENTS OF CASH FLOWS

NCI BUILDING SYSTEMS, INC.

(In thousands)

	Fiscal year ended
	November 1, 2003			October 30, 2004			October 29, 2005
Cash flows from operating activities:
Net income	$	22,800		$	44,890		$	55,951
Adjustments to reconcile net income to net cash provided by operating activities:
Loss on debt refinancing		—			9,879			—
Depreciation and amortization		23,007			22,974			24,488
Loss on sale of fixed assets		975			202			134
Inventory obsolescence		172			1,255			602
Provision for doubtful accounts		3,842			2,769			273
Deferred income taxes		(705	)		(4,759	)		2,356
Changes in operating assets and liabilities, net of effect of acquisitions:
Accounts and other receivables		517			(6,692	)		13,942
Inventories		9,893			(80,284	)		26,227
Prepaid expenses		(114	)		(248	)		(1,378	)
Accounts payable		2,956			(1,554	)		(5,731	)
Accrued expenses		5,925			35,298			1,403
Net cash provided by operating activities		69,268			23,730			118,267
Cash flows from investing activities:
Acquisitions		(4,310	)		—			(27,399	)
Capital expenditures		(17,912	)		(9,327	)		(19,524	)
Proceeds from sale of fixed assets		1,634			1,458			2,196
Changes in other noncurrent assets		2,257			1,858			(1,078	)
Net cash used in investing activities		(18,331	)		(6,011	)		(45,805	)
Cash flows from financing activities:
Proceeds from stock options exercised		2,401			16,409			9,362
Issuance of convertible debt		—			—			180,000
Net borrowings (payments) on revolving lines of credit		(42,300	)		11,700			(16,700	)
Borrowings on long-term debt		—			200,000			—
Payments on long-term debt		(6,250	)		(243,750	)		(7,000	)
Payment of refinancing costs		—			(8,060	)		(4,954	)
Purchase of treasury stock		(114	)		—			(40,676	)
Net cash provided by (used in) financing activities		(46,263	)		(23,701	)		120,032
Net increase (decrease) in cash and cash equivalents		4,674			(5,982	)		192,494
Cash and cash equivalents at beginning of period		9,530			14,204			8,222
Cash and cash equivalents at end of period	$	14,204		$	8,222		$	200,716

See accompanying notes to the consolidated financial statements.

5

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

NCI BUILDING SYSTEMS, INC.

(In thousands)

	Common Stock			Additional Paid-In Capital			Retained Earnings		Unearned Restricted Stock Compensation			Treasury Stock			Stockholders’ Equity
Balance, November 2, 2002	$	187		$	97,903		$	205,688		—		$	(319	)	$	303,459
Treasury stock purchases		—			—			—		—			(114	)		(114	)
Treasury stock used for stock option exercises		—			(79	)		—		—			430			351
Common stock issued for stock option exercises		2			2,048			—		—			—			2,050
Tax benefit from stock option exercises		—			585			—		—			—			585
Common stock issued for contribution to 401(k) plan		1			2,619			—		—			—			2,620
Net income		—			—			22,800		—			—			22,800
Balance, November 1, 2003		190			103,076			228,488		—			(3	)		331,751
Common stock issued for stock option exercises		10			16,399			—		—			—			16,409
Tax benefit from stock option exercises		—			3,126			—		—			—			3,126
Common stock issued for contribution to 401(k) plan		2			4,316			—		—			—			4,318
Issuance of restricted stock		2			7,293			—		(7,295	)		—			—
Earned portion of restricted stock compensation		—			—			—		683			—			683
Net income		—			—			44,890		—			—			44,890
Balance, October 30, 2004		204			134,210			273,378		(6,612	)		(3	)		401,177
Treasury stock purchases		—			—			—		—			(40,676	)		(40,676	)
Common stock issued for stock option exercises		4			9,353			—		—			—			9,357
Tax benefit from stock option exercises		—			3,369			—		—			—			3,369
Common stock issued for contribution to 401(k) plan		1			4,916			—		—			—			4,917
Issuance of restricted stock		(3	)		9,751			—		(9,751	)		—			(3	)
Earned portion of restricted stock compensation		—			—			—		3,689			—			3,689
Stock issued for acquisition		2			6,361			—		—			—			6,363
Net income		—			—			55,951		—			—			55,951
Balance, October 29, 2005	$	208		$	167,960		$	329,329	$	(12,674	)	$	(40,679	)	$	444,144

See accompanying notes to the consolidated financial statements.

6

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NCI BUILDING SYSTEMS, INC.

1. NATURE OF BUSINESS AND PRINCIPLES OF CONSOLIDATION

NCI Building Systems, Inc. (together with its subsidiaries and predecessors, unless otherwise indicated, the “Company,” “we,” “us” or “our”) is one of North America’s largest integrated manufacturers and marketers of products for the non-residential construction industry. We design, manufacture and market metal components and engineered building systems and provide metal coil coating services primarily for non-residential construction use. We manufacture and distribute extensive lines of metal products for the non-residential 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. We follow an accounting calendar that incorporates a four-four-five week calendar each quarter with year end on the Saturday closest to October 31. The year end for fiscal 2005 is October 29, 2005.

We aggregate our operations into three reportable business segments: metal components, engineered building systems and metal coil coating. We base this aggregation on similarities in product lines, manufacturing processes, marketing and how we manage our business. We market the products in each of our business segments nationwide through a direct sales force and, in the case of our engineered building systems segment, through authorized builder networks.

Our consolidated financial statements include the accounts of the Company and all wholly-owned subsidiaries. Prior to our purchase of our joint venture partner’s 49% interest in our manufacturing facility in Monterrey, Mexico (see Note 15), we consolidated our Mexico operations in our financial statements and through November 27, 2004, which was the end of November business and that portion we did not own was reported as minority interest, which is included in retained earnings in our consolidated statements of operations and balance sheet. All intercompany accounts, transactions and profits arising from consolidated entities have been eliminated in consolidation.

For investments in joint ventures and other entities that do not meet the criteria of a variable interest entity, we use the equity method of accounting where our ownership is between 20 percent and 50 percent or where our ownership is more than 50 percent and we do not have significant influence or control over the unconsolidated subsidiary. We use the cost method of accounting for investments in unconsolidated subsidiaries where our ownership is less than 20 percent and where we do not have significant influence over the unconsolidated subsidiary. We consolidate those investments that meet the criteria where we are deemed to be the primary beneficiary for accounting purposes and for entities in which we have a majority voting interest.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Examples include provisions for bad debts and inventory reserves and accruals for employee benefits, general liability insurance, warranties and certain contingencies. Actual results could differ from those estimates.

(b) Cash and Cash Equivalents

Cash equivalents are stated at cost plus accrued interest, which approximates fair value. Cash equivalents are highly liquid debt instruments with an original maturity of three months or less and may consist of time deposits with a number of commercial banks with high credit ratings, Eurodollar time deposits, certificates of deposit and commercial paper. We may also invest excess funds in no-load, open-end, management investment trusts (“mutual funds”). The mutual funds invest exclusively in high quality money market instruments.

(c) Accounts Receivable and Related Allowance

We report accounts receivable net of the allowance for doubtful accounts. Trade accounts receivable are the result of sales of building systems, components and coating services to customers throughout the United States and affiliated territories, including international builders who resell to end users. All sales are denominated in U.S. dollars. Credit sales do not normally require a pledge of collateral; however, various types of liens may be filed to enhance the collection process.

We establish reserves for doubtful accounts on a case-by-case basis when we believe the required payment of specific amounts owed is unlikely to occur. In establishing these reserves, we consider changes in the financial position of a customer, availability of security, lien rights and bond rights as well as disputes, if any, with our customers. Our allowance for doubtful accounts reflects reserves for customer receivables to reduce receivables to amounts expected to be collected.

7

This allowance was $8.6 million and $6.7 million at October 30, 2004 and October 29, 2005, respectively. We determine past due status as of the contractual payment date. Interest on delinquent accounts receivable is included in the trade accounts receivable balance and recognized as interest income when chargeable and collectibility is reasonably assured. Uncollectible accounts receivable trade are written off when a settlement is reached for an amount that is less than the outstanding historical balance or we have exhausted all collection efforts.

(d) Inventories

Inventories are stated at the lower of cost or market value less allowance for inventory obsolescence, using specific identification or the weighted-average method for steel coils and other raw materials. Allowance for inventory obsolescence was $2.9 million and $2.8 million at October 30, 2004 and October 29, 2005, respectively.

The components of inventory are as follows (in thousands):

	October 30, 2004		October 29, 2005
Raw materials	$	103,411	$	83,180
Work in process and finished goods		34,952		30,241
	$	138,363	$	113,421

During fiscal 2005, we purchased a majority of our steel requirements from International Steel Group (“ISG”)/Mittal Steel USA, Nucor and US Steel. Mittal Steel USA purchased ISG in April 2005. Each of the suppliers accounted for more than 10% of our total steel purchases during fiscal 2004 and 2005. No other steel supplier accounted for more than 10% of steel purchases during fiscal 2004 and 2005.

(e) Property, Plant and Equipment

Property, plant and equipment are stated at cost and depreciated using the straight-line method over their estimated useful lives. Leasehold improvements are capitalized and amortized using the straight-line method over the life of the underlying lease. Computer software developed or purchased for internal use is depreciated using the straight-line method over its estimated useful life.

Depreciation expense for fiscal 2003, 2004 and 2005 was $23.0 million, $23.0 million and $23.5 million, respectively. Of this depreciation expense, $3.4 million, $3.5 million and $4.0 million was related to software depreciation for fiscal 2003, 2004 and 2005, respectively.

Property, plant and equipment consist of the following (in thousands):

	October 30, 2004			October 29, 2005
Land	$	13,251		$	14,613
Buildings and improvements		120,660			122,740
Machinery, equipment and furniture		153,512			167,164
Transportation equipment		2,731			2,649
Computer software and equipment		36,978			40,368
		327,132			347,534
Less accumulated depreciation		(141,445	)		(162,256	)
	$	185,687		$	185,278

Estimated useful lives for depreciation are:

Buildings and improvements 10 – 39 years

Machinery, equipment and furniture 3 – 10 years

Transportation equipment 5 – 10 years

Computer software and equipment 3 – 7 years

(f) Goodwill and Other Intangible Assets

We review the carrying values of goodwill and identifiable intangibles whenever events or changes in circumstances indicate that such carrying values may not be recoverable and annually for goodwill as required by the Financial Accounting Standards Board’s (“FASB”) Statement of Financial Accounting Standards (“SFAS”) 142, Goodwill and Other Intangible Assets. Unforeseen events, changes in circumstances and market conditions and material differences in the value of intangible assets due to changes in estimates of future cash flows could negatively affect the fair value of our assets and result in a non-cash impairment charge. Some factors considered important that could trigger an impairment review include the

8

following: significant underperformance relative to expected historical or projected future operating results, significant changes in the manner of our use of acquired assets or the strategy for our overall business and significant negative industry or economic trends. Fair value is the amount at which the asset could be bought or sold in a current transaction between willing parties and may be estimated using a number of techniques, including quoted market prices or valuations by third parties, present value techniques based on estimates of cash flow, multiples of earnings or revenue performance measures. The fair value of the asset could be different using different estimates and assumptions in these valuation techniques. See Note 7.

(g) Revenue Recognition

We recognize revenues when the following conditions are met: persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable, and collectibility is reasonably assured. Generally, these criteria are met at the time product is shipped or services are complete. Provisions are made upon the sale for estimated product returns. Costs associated with shipping and handling our products are included in cost of sales.

Prior to the third quarter of fiscal 2004, a portion of the revenue for the metal coil coating segment was recognized upon completion of the painting process for consigned coils owned by certain of our customers, which in most cases were steel mills. This accounting treatment met the criteria to be recognized as revenue in accordance with the Securities and Exchange Commission’s (the “SEC”) Staff Accounting Bulletin (“SAB”) No. 101. In 2004, many steel mills that traditionally had consigned steel coils to us in this manner abandoned that procedure, resulting in purchasing and recognizing steel coils as inventory upon the arrival of such raw materials at our coil coating plants. As a result, during the third quarter of fiscal 2004, we changed our policy to prospectively recognize revenue upon shipment of the coils from the coil coating facilities to third parties. The impact of the accounting change during the third quarter of fiscal 2004, which was not material, was a reduction to our revenues and operating income of approximately $4.5 million and $0.8 million, respectively. This change would not have had a material effect on any prior periods presented and is not expected to materially affect future results.

(h) Warranty

We sell weather tightness warranties to our customers for protection from leaks in our roofing systems related to weather. These warranties range from two years to 20 years. We sell two types of warranties, standard and single source, and three grades of coverage for each. The type and grade of coverage determines the price to the customer. For standard warranties, our responsibility for leaks in a roofing system begins after 24 consecutive leak-free months. For single source warranties, the roofing system must pass our inspection before warranty coverage will be issued. Inspections are typically performed at three stages of the roofing project: (i) at the project start-up; (ii) at the project mid-point and (iii) at the project completion. These inspections are included in the cost of the warranty. If the project requires or the customer requests additional inspections, those inspections are billed to the customer. Upon the sale of a warranty, we record revenue as deferred revenue, which is included in other accrued expenses in our consolidated balance sheets. We amortize this deferred warranty revenue over the weighted average coverage, which is approximately 18 years, to approximate our estimated expense. At October 30, 2004 and October 29, 2005, our unamortized liability for weather tightness warranty was $5.1 million and $6.2 million, respectively.

(i) Self Insurance

We are self insured for a substantial portion of the cost of employee group health insurance and for the cost of workers’ compensation benefits. We purchase insurance from third parties that provides individual and aggregate stop loss protection for these costs. Each reporting period, we record the costs of our health insurance plan, including paid claims, an estimate of the change in incurred but not reported (“IBNR”) claims, taxes and administrative fees (collectively the “Plan Costs”) as general and administrative expenses in our consolidated statements of operations. The estimated IBNR claims are based upon (i) a recent average level of paid claims under the plan, (ii) an estimated lag factor and (iii) an estimated growth factor to provide for those claims that have been incurred but not yet paid. In fiscal 2004 and prior years, we based our health insurance accrual on at least three months for claims submitted. With improvements in technology, claims processing improved with claims being submitted, processed and paid in a much shorter time frame. As such, in fiscal 2005, we changed our methodology on a prospective basis for determining the amount of health insurance accrual to one that considers claims growth and claims lag, which is the length of time between the incurred date and processing date. The change in methodology resulted in a reduction of our health insurance accrual of approximately $3.0 million, $1.8 million net of tax, or $0.09 per diluted share, in fiscal 2005 over fiscal 2004.

For workers’ compensation costs, we monitor the number of accidents and the severity of such accidents to develop appropriate estimates for expected costs to provide both medical care and benefits during the period an employee is unable to work. These accruals are developed using third party estimates of the expected cost and length of time an employee will be unable to work based on industry statistics for the cost of similar disabilities. This statistical information is trended to provide estimates of future expected costs based on factors developed from our experience of actual claims cost compared to original estimates. We expensed approximately $17 million, $19 million and $17 million for health insurance in fiscal 2003, 2004 and 2005, respectively, and $3 million, $4 million, and $3 million for workers’ compensation in fiscal 2003, 2004 and 2005, respectively. The health insurance accrual balance was $6.0 million and $2.9 million at October 30, 2004 and October 29,

9

2005, respectively, and the workers’ compensation accrual balance was $5 million and $4 million at October 30, 2004 and October 29, 2005, respectively.

(j) Income Taxes

We account for income taxes in accordance with SFAS 109, Accounting for Income Taxes. Under SFAS 109, deferred tax assets and liabilities are determined based on differences between financial reporting carrying values and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. A valuation allowance for a deferred tax asset is recorded when it is more likely than not that some or all of the benefit from the deferred tax will not be realized. See Note 8.

(k) Advertising Costs

Advertising costs are expensed as incurred. Advertising expense was $2.6 million, $3.1 million and $4.7 million in fiscal 2003, 2004 and 2005, respectively.

(l) Impairment of Long-Lived Assets

We assess impairment of property plant, and equipment in accordance with the provisions of SFAS 144, Accounting for the Impairment or Disposal of Long-Lived Assets. We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the sum of the estimated undiscounted future cash flows from the use of the asset and its eventual disposition is less than the carrying amount of the asset, an impairment loss is recognized based on the fair value of the asset. Property and equipment held for sale are recorded at the lower of net book value or fair value.

(m) Stock-Based Compensation

We account for stock-based employee compensation using the intrinsic value method under Accounting Principles Board (“APB”) Opinion 25 and related interpretations. Alternatively, under SFAS 123, Accounting for Stock-Based Compensation, employee stock-based compensation is recognized over the vesting period based on the fair value of the underlying awards on the date of grant. SFAS 123 currently does not require an entity to adopt these provisions, but rather, permits continued application of APB 25. We have elected to continue accounting for our stock-based compensation under APB 25 and related interpretations. The fair value of the stock options is determined using the Black-Scholes option pricing model. Since the exercise price of our employee stock options equals the market price of the underlying stock on the date of the grant, we currently record no compensation expense for our stock option awards.

Compensation expense recorded for restricted stock awards under the intrinsic value method is consistent with the expense that would be recorded under the fair value-based method. We recorded pretax compensation expense relating to restricted stock awards of $0.7 million and $3.7 million for fiscal 2004 and 2005, respectively. Stock-based compensation expense related to fiscal 2003 was not significant. Unearned compensation is shown as a reduction of stockholders’ equity in our consolidated balance sheets.

If compensation expense for grants to employees under our long-term incentive plans was recognized using the fair value method of accounting under SFAS 123 rather than the intrinsic value method under APB 25, net income and earnings per share would have been reduced to the pro forma amounts below (in thousands, except per share data):

	Fiscal Year Ended
	November 1, 2003			October 30, 2004			October 29, 2005
Reported net income	$	22,800		$	44,890		$	55,951
Add back: Stock-based employee compensation expense included in reported net income, net of tax		—			444			2,395
Deduct: Stock-based employee compensation expense determined under the fair value based method for all awards, net of tax		(2,278	)		(3,062	)		(7,690	)
Pro forma net income	$	20,522		$	42,272		$	50,656
Basic Earnings Per Share
As reported	$	1.21		$	2.28		$	2.73
Pro forma	$	1.09		$	2.14		$	2.47
Diluted Earnings Per Share
As reported	$	1.20		$	2.24		$	2.68
Pro forma	$	1.08		$	2.11		$	2.43

10

The weighted average grant-date fair value of options granted during fiscal 2003, 2004 and 2005 was $11.40, $17.39 and $21.48, respectively. The fair value for these options was estimated at the date of grant using a Black-Scholes option pricing model with the following assumptions:

	Fiscal Year Ended
	November 1, 2003	October 30, 2004	October 29, 2005
Risk-free interest rate	2.7%–3.7%	3.5%–4.4%	3.9%–4.1%
Expected volatility	55.6%	54.5%	57.0%
Weighted average expected life (in years)	7	8	8

Expected dividend yield was not considered in the option pricing model since we do not pay dividends and have no current plans to do so in the future.

(n) Reclassifications

Certain reclassifications have been made to prior period amounts to conform to the current presentation.

(o) Recent Accounting Pronouncements

In May 2005, the FASB issued SFAS 154, Accounting Changes and Error Corrections, which requires retrospective application to all prior period financial statements presented for voluntary changes in accounting principle unless it is impracticable. This statement replaces APB 20, Accounting Changes, and SFAS 3, Reporting Accounting Changes in Interim Financial Statements, though it carries forward the guidance in those pronouncements with respect to accounting for changes in estimates, changes in reporting entity and the correction of errors. SFAS 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. We will adopt SFAS 154 effective October 30, 2006, the beginning of our fiscal 2007, and we do not expect the adoption of this statement to have an impact on our consolidated financial position, results of operations or cash flows.

In December 2004, the FASB issued SFAS 153, Exchanges of Nonmonetary Assets – An Amendment of APB Opinion No. 29. The APB opinion required that the asset acquired in an exchange transaction be accounted for based on the recorded value of the asset relinquished. The amendment in SFAS 153 requires that the asset acquired be accounted for at fair value and should not consider the recorded value of the asset relinquished in the exchange. In addition, the amendments eliminate the narrow exception for nonmonetary exchanges of similar productive assets and replace it with a broader exception for exchanges of nonmonetary assets that do not have “commercial substance.” A nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. The provisions of this statement are effective for nonmonetary exchanges occurring in fiscal periods beginning after June 15, 2005. We will adopt the provisions of this statement effective October 30, 2005, the beginning of our fiscal 2006, and we do not expect the adoption to have an impact on our financial condition, results of operations or cash flows.

In November 2004, the FASB issued SFAS 151, Inventory Costs – An amendment of ARB No. 43, Chapter 4. SFAS 151 clarifies that all abnormal amounts of idle facility expense, freight, handling costs and spoilage should be expensed as incurred and not included in overhead. In addition, this statement requires that allocation of fixed production overheads to conversion cost should be based on normal capacity of the production facilities. The provisions of SFAS 151 are effective for inventory costs incurred during fiscal years beginning after June 15, 2005 and are to be applied on a prospective basis. We will adopt the provisions of this statement effective October 30, 2005, the beginning of our fiscal 2006, and we do not expect adoption to have an impact on our consolidated financial condition, results of operations or cash flows.

In October 2004, the FASB ratified EITF 04-08, Accounting Issues Related to Certain Features of Contingently Convertible Debt and the Effect on Diluted Earnings Per Share, which is effective for all periods ending after December 15, 2004 and is to be applied by retrospectively restating previously reported earnings per share (“EPS”). EITF 04-08 addresses when the dilutive effect of contingently convertible debt with a market price trigger should be included in diluted EPS. Under EITF 04-08, the market price contingency should be ignored and these securities should be treated as non-contingent, convertible securities and always included in the diluted EPS computation. Notwithstanding the foregoing, if convertible debt has a “net share settlement” provision whereby all conversions are settled for a combination of cash (in an amount equal to the lesser of the principal amount of the notes and their conversion value) and shares, if any (shares are issuable only to the extent the conversion value exceeds the principal amount), then the issuer of such convertible debt is not required to include any shares issuable upon conversion in its calculation of fully diluted EPS until the market price of the underlying common stock exceeds the conversion price. In the event that the market price does exceed the conversion price, then the issuer of the convertible debt is required to use the treasury stock method of accounting for the difference between the market price in the applicable reporting period and the conversion price. The shares required to cover the difference will be included in calculating diluted EPS. We adopted EITF 04-08 in the fiscal quarter ended January 28, 2005.

In November 2004, we completed an offering of $180 million of 2.125% convertible senior subordinated notes due 2024. See Note 6. Because the 2.125% convertible senior subordinated notes have a net share settlement provision, the Notes will

11

be included on an “if converted” basis in the calculation of our fully diluted EPS in future reporting periods where the market price of our common stock is higher than the conversion price at fiscal year-end. See Note 13.

In December 2004, the FASB issued SFAS 123 (revised 2004), Share Based Payment (“SFAS 123(R)”), which is a revision of SFAS 123. SFAS 123(R) supersedes APB 25 and amends SFAS 95, Statement of Cash Flows. While the approach in SFAS 123(R) is similar to the approach described in SFAS 123, SFAS 123(R) requires recognition in the income statement of all share-based payments, including grants of employee stock options, based on their fair values, and pro forma disclosure is no longer an alternative. We are required to adopt SFAS 123(R) in the first fiscal quarter of 2006, which begins October 30, 2005.

SFAS 123(R) permits adoption using one of two methods, a modified prospective method (“Prospective Method”) or a modified retrospective method (“Retrospective Method”). With the Prospective Method, costs are recognized beginning with the effective date based on the requirements of SFAS 123(R) for (i) all share-based payments granted after the effective date of SFAS 123(R), and (ii) all awards granted to employees prior to the effective date of SFAS 123(R) that remain unvested on the effective date. The Retrospective Method applies the requirements of the Prospective Method but further permits entities to restate all prior periods presented based on the amounts previously recognized under SFAS 123 for purposes of pro forma disclosures required under SFAS 95. Management expects adoption of SFAS 123(R) to have a significant impact on our results of operations.

We will adopt SFAS 123(R) effective October 30, 2005 using the Prospective Method. To estimate the value of stock options granted to employees, we currently use the Black-Scholes formula, which is an acceptable share-based valuation model, and will continue using this model upon adoption of SFAS 123(R). With adoption of SFAS 123(R) using the Prospective Method, we expect to recognize approximately $6 million to $8 million, $3.6 million to $4.8 million, net of tax or $0.17 to $0.23 per diluted share, in total stock based compensation expense in fiscal year 2006. In addition to the compensation cost recognition requirements, SFAS 123(R) also requires the tax deduction benefits for an award in excess of recognized compensation cost to be reported as a financing cash flow rather than as an operating cash flow. We do not expect adoption of this statement to have any effect on our financial position or cash flows.

3. OTHER ACCRUED EXPENSES

Other accrued expenses are comprised of the following (in thousands):

	October 30, 2004		October 29, 2005
Customer deposits	$	4,091	$	12,869
Other accrued expenses		41,934		40,097
Total Other Accrued Expenses	$	46,025	$	52,966

4. SUPPLEMENTARY CASH FLOW INFORMATION

The following table sets forth interest and taxes paid in each of the three fiscal years presented (in thousands):

	Fiscal Year Ended
	November 1, 2003		October 30, 2004		October 29, 2005
Interest paid	$	13,954	$	20,552	$	11,140
Taxes paid		14,794		26,276		32,564

5. FAIR VALUE OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used to estimate the fair value of each class of financial instrument for which it is practicable to estimate that value.

Cash and cash equivalents – The carrying amounts approximate fair value because of the short maturity of those instruments.

Accounts receivable – The carrying amounts approximate fair value because all amounts are current. Any accounts receivable outstanding for a period greater than one year are evaluated for collectibility and marked to fair value.

12

Debt – The fair value of our fixed rate debt is calculated based on market prices. The carrying value of variable rate debt approximates fair value.

	October 30, 2004				October 29, 2005
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(in thousands)				(in thousands)
Cash and cash equivalents	$	8,222	$	8,222	$	200,716	$	200,716
Accounts receivable		108,869		108,869		110,094		110,094
Debt		216,700		216,700		373,000		395,000

6. LONG-TERM DEBT

Debt is comprised of the following (in thousands):

	October 30, 2004			October 29, 2005
$125 Million Revolving Credit Facility – final maturity June 2009	$	16,700		$	—
$200 Million Term Loan, due June 2010		200,000			193,000
2.125% Convertible Senior Subordinated Notes, due November 2024		—			180,000
		216,700			373,000
Current portion of long-term debt		(2,000	)		(2,000	)
Total long-term debt	$	214,700		$	371,000

The scheduled maturity of our debt is as follows (in thousands):

2006	$	2,000
2007		2,000
2008		2,000
2009		2,000
2010 and thereafter		365,000
	$	373,000

In June 2004, we completed a $325 million senior secured credit facility with a group of lenders and used the initial borrowings to repay in full our then existing credit facility and redeem our $125 million senior subordinated notes due 2009. We believe that the new credit facility provides us with increased financial flexibility and decreased borrowing costs. The current facility includes a $125 million, five-year revolving loan maturing on June 18, 2009 and a $200 million, six-year term loan maturing on June 18, 2010. The term loan requires mandatory payments of $0.5 million each quarter beginning in November 2004 with a final payment of $188.5 million at maturity. At October 30, 2004, we had $16.7 million and $200.0 million outstanding under our revolving loan and term loan, respectively. At October 29, 2005, we had $193.0 million outstanding under our term loan and no amounts outstanding under our revolving loan.

As a result of the June 2004 refinancing of the senior secured credit facility, unamortized deferred financing costs of $4.1 million ($2.6 million net of tax) were expensed during the third quarter of fiscal 2004.

At October 30, 2004 and October 29, 2005, the unamortized balance in deferred financing costs was $2.1 million and $6.4 million, respectively.

In October 2005, we amended our $325 million senior secured credit facility. The amendments, among other things, (i) provided a permanent waiver of the mandatory prepayment provision that pertained to the $180 million convertible senior subordinated notes issued in November 2004, (ii) reduced the applicable margin on the term loan from LIBOR plus 2.0% to LIBOR plus 1.5%, (iii) increased the restricted payments basket from $25.0 million plus 25% of net income to $35.0 million plus 25% of net income and (iv) accelerated the scheduled step-down of the maximum senior leverage ratio to 3:1 from May 2007, the original effective date, to the date of the amendment.

Loans on the senior secured credit facility bear interest, at our option, as follows: (1) base rate loans at the base rate plus a margin, which for term loans is 0.5% and for revolving loans fluctuates based on our leverage ratio and ranges from 0.25% to 1.25% and (2) LIBOR loans at LIBOR plus a margin, which for term loans is 1.50% and for revolving loans fluctuates based on our leverage ratio and ranges from 1.25% to 2.25%. Base rate is defined as the higher of the Wachovia Bank, National Association prime rate or the overnight Federal Funds rate plus a margin, which for term loans is 0.50% and for revolving loans fluctuates based on our leverage ratio and ranges from 0.25% to 1.25%, and LIBOR is defined as the applicable London interbank offered rate adjusted for reserves. Based on our current leverage ratios, we will pay a margin of 0.75% on

13

base rate loans and 1.75% on LIBOR loans under the revolving loan and a margin of 0.50% on base rate loans and 1.50% on LIBOR loans under the term loan during the first quarter of fiscal 2006.

The senior secured credit facility is secured by (1) 100% of our accounts receivable, inventory and equipment and related assets such as our software, chattel paper, instruments and contract rights (excluding foreign operations) and (2) 100% of the capital stock and other equity interests in each of our direct and indirect operating domestic subsidiaries and 65% of the capital stock in each of our foreign subsidiaries.

The senior secured credit facility requires compliance with various covenants and provisions customary for agreements of this nature, including a minimum ratio of Consolidated EBITDA (as defined in the senior secured credit facility) to interest expense of four to one and maximum ratios of total debt and senior debt to Consolidated EBITDA of four to one and three to one, respectively.

Borrowings under the senior secured credit facility may be repaid at anytime and the voluntary reduction of the unutilized portion of the five-year revolver may be made at any time, in certain amounts, without premium or penalty but subject to LIBOR breakage costs. We are required to make mandatory payments on the senior secured credit facility upon the occurrence of certain events, including the sale of assets and the issuance and sale of equity securities, in each case subject to certain limitations and conditions. These payments must first be applied to the term loan and then to the reduction of the revolving commitment.

At October 30, 2004 and October 29, 2005, we had approximately $104 million and $118 million, respectively, in unused borrowing capacity (net of letters of credit outstanding of approximately $5 million and $7 million, respectively) under the senior secured credit facility, of which a total of $20 million may be utilized for standby letters of credit.

In November 2004, we completed an offering of $180 million aggregate principal amount of 2.125% convertible senior subordinated notes due 2024 (the “Notes”) with interest payable semi-annually. Interest on the Notes is not deductible for income tax purposes, which creates a permanent tax difference that is reflected in our effective tax rate. The Notes are general unsecured obligations and are subordinated to our present and future senior indebtedness.

We have the right to redeem the Notes, beginning on November 20, 2009, for a price equal to 100% of the principal amount plus accrued and unpaid interest, if any. Each holder has the right to require that we repurchase the Notes after five, 10 and 15 years at 100% of the principal amount plus accrued and unpaid interest, if any, beginning November 15, 2009. Upon the occurrence of certain designated events, holders of the Notes will also have the right to require that we purchase all or some of their Notes at a redemption price equal to 100% of the principal amount plus accrued and unpaid interest, if any, and, in certain circumstances, a make whole premium. We must pay the repurchase price of the aggregate principal amount of the Notes in cash unless prohibited by limitations imposed by our existing or future senior credit agreements. The Notes are convertible into cash or, in certain circumstances, a combination of cash and shares of our common stock, at a ratio of 24.9121 shares of common stock per $1,000 principal amount notes, which is equivalent to an initial conversion price of approximately $40.14 per common share. The ratio is subject to adjustments if certain events take place, and conversion may only occur if the closing sale price per common share exceeds 120% of the conversion price for at least 20 trading days in the 30 consecutive trading day period ending on the last trading day of the preceding calendar quarter or if certain other conditions are met. At October 29, 2005, $180 million principal amount of the Notes was outstanding.

Through October 29, 2005, we utilized proceeds from the Notes to pay $5 million in costs associated with the issuance of the Notes and to pay the $27.4 million cash portion of the purchase price of the acquisitions that occurred during the first quarter of 2005 (see Note 15). We plan to use the remaining net proceeds of the offering to finance future acquisitions. The remaining net proceeds have been invested in short-term debt securities or similar investments.

7. GOODWILL AND OTHER INTANGIBLE ASSETS

In accordance with SFAS 142, Goodwill and Other Intangible Assets, goodwill is tested for impairment at least annually at the reporting unit level, which is defined as an operating segment or a component of an operating segment that constitutes a business for which financial information is available and is regularly reviewed by management. Management has determined that we have five reporting units for the purpose of allocating goodwill and the subsequent testing of goodwill for impairment. Our metal components and engineered building systems segments are each split into two reporting units for goodwill impairment testing purposes.

During the fourth quarter of each of our fiscal years 2003, 2004 and 2005, we performed our annual test of goodwill impairments with no impairment of goodwill indicated for the fiscal years ended November 1, 2003, October 30, 2004 or October 29, 2005.

14

Our goodwill balance and changes in the carrying amount of goodwill by operating segment are as follows (in thousands):

	Balance Oct. 30, 2004		Additions(1)		Balance Oct. 29, 2005
Metal components	$	117,606	$	13,856	$	131,462
Engineered building systems		118,682		7,054		125,736
Metal coil coating		81,959		—		81,959
Total	$	318,247	$	20,910	$	339,157

(1) Primarily represents goodwill associated with our acquisitions of Heritage Building Systems, Inc. (“Heritage”) and Steelbuilding.com, Inc (“Steelbuilding.com”) as well as our purchase of the 49% minority interest in our manufacturing facility in Monterrey, Mexico. See Note 15.

In conjunction with the purchase of Heritage and Steelbuilding.com in December 2004, we entered into non-compete agreements with the previous owners. We valued these agreements at an aggregate amount of $6.4 million at the date of acquisition based on the price of our common stock. These agreements range from two years to 10 years, have a weighted average life of 9.7 years and are amortized over their respective lives.

Also in conjunction with the purchase of Heritage and Steelbuilding.com, we obtained the Heritage Building Systems and Steelbuilding.com trademarks. To determine the value of these intangible assets, we retained the services of a third party consulting firm. As a result of the valuation work, we recorded $4.8 million for the trademarks. We amortize the trademarks over 15 years, the estimated useful life. At October 29, 2005, the recorded amounts net of amortization for the non-compete agreements and trademarks were $5.7 million and $4.5 million, respectively.

Each of these intangible assets is recorded in other assets in our consolidated balance sheets and amortized using the straight line method over the estimated useful lives. The weighted average estimated useful life in total for these intangibles is 11.6 years. We recognized $1.0 million in amortization expense during fiscal 2005. Total accumulated amortization was $1.0 million at October 29, 2005. We expect to recognize amortization expense over the next five fiscal years as follows (in millions):

2006	$	1.2
2007		1.1
2008		1.1
2009		1.1
2010		1.1

In accordance with SFAS 142, we will evaluate the remaining useful life of these intangible assets on an annual basis. We will also review for recoverability when events or changes in circumstances indicate the carrying values may not be recoverable in accordance with SFAS 144, Accounting for the Impairment or Disposal of Long-Lived Assets.

8. INCOME TAXES

Income tax expense is based on pretax financial accounting income. Deferred income taxes are recognized for the temporary differences between the recorded amounts of assets and liabilities for financial reporting purposes and such amounts for income tax purposes. The income tax provision (benefit) for the fiscal years ended 2003, 2004 and 2005, consisted of the following (in thousands):

	Fiscal year ended
	November 1, 2003			October 30, 2004			October 29, 2005
Current:
Federal	$	13,882		$	30,799		$	33,708
State		1,581			3,727			4,196
Total current		15,463			34,526			37,904
Deferred:
Federal		(606	)		(4,472	)		2,130
State		(99	)		(287	)		226
Total deferred		(705	)		(4,759	)		2,356
Total provision	$	14,758		$	29,767		$	40,260

15

The reconciliation of income tax computed at the United States federal statutory tax rate to the effective income tax rate is as follows:

	Fiscal year ended
	November 1, 2003		October 30, 2004		October 29, 2005
Statutory federal income tax rate	35.0	%	35.0	%	35.0	%
State income taxes	2.6	%	3.2	%	4.6	%
Non-deductible interest expense	—		—		1.5	%
Other	1.7	%	1.7	%	0.7	%
Effective tax rate	39.3	%	39.9	%	41.8	%

Deferred income taxes reflect the net impact of temporary differences between the amounts of assets and liabilities recognized for financial reporting purposes and such amounts recognized for income tax purposes. The tax effects of the temporary differences for fiscal 2004 and 2005 are as follows (in thousands):

	As of October 30, 2004			As of October 29, 2005
Deferred tax assets:
Inventory	$	2,129		$	1,559
Bad debt reserve		3,381			2,655
Accrued insurance reserves		3,380			2,572
Deferred revenue		2,050			2,152
Restructuring and impairment		776			58
Accrued and deferred compensation		3,570			4,358
Other reserves		1,156			2,116
Total deferred tax assets		16,442			15,470
Deferred tax liabilities:
Depreciation and amortization		(22,968	)		(25,462	)
Total deferred tax liabilities		(22,968	)		(25,462	)
Net deferred tax liability	$	(6,526	)	$	(9,992	)

Other accrued expenses include accrued income taxes payable of $7.7 million at October 30, 2004 and $8.6 million at October 29, 2005.

We carry out our business operations through legal entities in the U.S. and Mexico jurisdictions. These operations require that we file corporate income tax returns that are subject to U.S., state and foreign tax laws. We are subject to income tax audits in these multiple jurisdictions. Our provision for income taxes includes amounts intended to satisfy income tax assessments that may result from the examination of our tax returns that have been filed in these jurisdictions. The amounts ultimately paid upon resolution of these examinations could be materially different from the amounts included in the provision for income taxes and result in additional tax benefit or expense depending on the ultimate outcome.

In 2005, the Internal Revenue Service began audits of certain tax returns. Because the audits are ongoing, we are unable to determine what impact, if any, resolution of these audits may have on our consolidated financial position or results of operations.

In evaluating the exposures connected with the various tax filing positions, we establish an accrual when, despite management’s belief that our tax return positions are supportable, management believes that certain positions may be successfully challenged and a loss is probable. When facts and circumstances change, these accruals are adjusted. Included in income tax expense for fiscal 2005 is the reversal of an accrual for tax contingencies of $1.0 million. Based on additional information and support by third party analysis, we concluded that the accrual was no longer necessary. Liabilities recorded related to tax contingencies as of October 29, 2005 are not material.

Also included in income tax expense for fiscal 2005 are income tax adjustments totaling $1.8 million. These adjustments are related to previously unrecognized differences between the book and tax basis differences in fixed assets of $1.5 million. The remaining adjustments included several other individually immaterial items. We believe all these tax adjustments to be immaterial individually and in the aggregate to the financial statements in the current or previous periods.

16

The determination of our provision for income taxes requires significant judgment, the use of estimates and the interpretation and application of complex tax laws. Our provision for income taxes reflects a combination of income earned and taxed in the various U.S. federal and state, as well as Mexican federal jurisdictions. Jurisdictional tax law changes, increases or decreases in permanent differences between book and tax items, accruals or adjustments of accruals for tax contingencies or valuation allowances, and the change in the mix of earnings from these taxing jurisdictions all affect the overall effective tax rate.

9. OPERATING LEASE COMMITMENTS

We have operating lease commitments expiring at various dates, principally for real estate, office space, office equipment and transportation equipment. Certain of these operating leases have purchase options that entitle us to purchase the respective equipment at fair value at the end of the lease. As of October 29, 2005, future minimum rental payments related to noncancellable operating leases are as follows (in thousands):

2006	$	6,137
2007		5,239
2008		4,474
2009		3,388
2010 and thereafter		4,478

Rental expense incurred from operating leases, including leases with terms of less than one year, for fiscal 2003, 2004 and 2005 was $6.0 million, $7.8 million and $9.0 million, respectively.

10. STOCKHOLDERS’ RIGHTS PLAN

In June 1998, the Board of Directors adopted a Stockholders’ Rights Plan and declared a dividend of one preferred stock purchase right (“Right”) for each outstanding share of our common stock for stockholders of record at the close of business on July 8, 1998. Each Right entitles the holder to purchase one one-hundredth (¹/100th) of a share of our Series A Junior Participating Preferred Stock at a price of $125.00 per share upon certain events. Generally, if a person or entity acquires, or initiates a tender offer to acquire, at least 20% of our then outstanding common stock, the Rights will become exercisable for common stock having a value equal to two times the exercise price of the Right, or effectively at one-half of our then current stock price. The Rights are redeemable under certain circumstances at $0.01 per Right and will expire, unless earlier redeemed, on June 24, 2008.

11. STOCKHOLDERS’ EQUITY

In November 1999 and 2000, our Board of Directors authorized the repurchase of 1.0 million shares and 1.5 million shares respectively, of our common stock. Subject to applicable federal securities law, such purchases occur at times and in amounts that we deem appropriate. No time limit was placed on the duration of the repurchase program. Shares repurchased are reserved primarily for later re-issuance in connection with our stock option and 401(k) profit sharing plans. At October 30, 2004, we had repurchased 1.3 million shares of our common stock for $21.6 million since the inception of the repurchase program in November 1999. In September 2005, our Board of Directors reaffirmed our previously authorized share repurchase program, authorizing the repurchase of up to 1.2 million shares. During fiscal 2005, we completed the repurchase of an additional 1.1 million shares of our common stock for $40.7 million.

Changes in treasury common stock, at cost, were as follows (in thousands):

	Number of Shares		Amount
Balance, November 2, 2002	20		$	319
Purchases	8			114
Issued in exercise of stock options	(28	)		(430	)
Balance, November 1, 2003 and October 30, 2004 (1)	—			3
Purchases	1,063			40,676
Balance, October 29, 2005	1,063		$	40,679

(1) We had no treasury stock activity during fiscal 2004.

17

12. STOCK INCENTIVE PLANS

Our 2003 Long-Term Stock Incentive Plan (the “Incentive Plan”), is an equity based compensation plan that allows us to grant a variety of types of awards, including stock options, restricted stock, stock appreciation rights, performance share awards, phantom stock awards and cash awards. Both stock options and restricted stock awards typically vest over four years, although from time to time certain individuals have received restricted stock awards that vest at retirement or upon termination for good reason as defined by the plan. In fiscal 2005, our stockholders approved the amendment and restatement of the Incentive Plan, which, among other things, increased the number of shares of common stock reserved for issuance under the plan by approximately 1.1 million shares of common stock and allowed us to grant performance awards, including performance-based cash awards, under the plan. As amended, the aggregate number of shares of common stock that may be issued under the plan may not exceed 2.6 million. Awards will normally terminate on the earlier of (i) 10 years from the date of grant, (ii) 30 days after termination of employment or service for a reason other than death, disability or retirement, (iii) one year after death or (iv) one year for incentive stock options or five years for other awards after disability or retirement. Awards are non-transferable except by disposition on death or to certain family members, trusts and other family entities as the Compensation Committee may approve. Awards may be paid in cash, shares of our common stock or a combination, in lump sum or installments and currently or by deferred payment, all as determined by the Compensation Committee. Prior to December 16, 2002, we maintained an employee stock option plan. No further options are permitted to be granted under the old plan after the stockholders approved the Incentive Plan in March 2003. At October 30, 2004 and October 29, 2005, a total of 0.4 million shares and 1.1 million shares, respectively, were available under the Incentive Plan for the further grants of awards. Stock option transactions during fiscal 2003, 2004 and 2005 were as follows (in thousands, except weighted average exercise prices):

	Number of Shares		Weighted Average Exercise Price
Balance November 2, 2002	1,862		$	17.14
Granted	292			19.37
Cancelled	(26	)		19.53
Exercised	(196	)		12.25
Balance November 1, 2003	1,932		$	17.94
Granted	679			29.23
Cancelled	(104	)		17.64
Exercised	(916	)		17.91
Balance October 30, 2004	1,591		$	22.79
Granted	159			35.31
Cancelled	(31	)		23.98
Exercised	(468	)		20.02
Balance October 29, 2005	1,251		$	17.93

18

Options exercisable at fiscal years ended 2003, 2004 and 2005 were 1.1 million, 0.5 million and 0.5 million, respectively. The weighted average exercise prices for options exercisable at fiscal years ended 2003, 2004 and 2005 were $18.50, $18.15 and $20.99, respectively. Exercise prices for options outstanding at October 29, 2005 range from $13.50 to $38.01. The weighted average remaining contractual life of options outstanding at October 29, 2005 was 7.6 years. The following summarizes additional information concerning outstanding options at October 29, 2005:

Options Outstanding
Range of Exercise Prices	Number of Options	Weighted Average Remaining Life		Weighted Average Exercise Price
$ 13.50 – 16.90	193,973		5.3 years	$	15.25
$ 17.50 – 20.64	278,674		6.9 years	$	18.76
$ 21.20 – 38.01	778,549		8.4 years	$	30.20
	1,251,196
Options Exercisable
Range of Exercise Prices	Number of Options	Weighted Average Exercise Price
$ 13.50 – 16.90	164,365	$	15.26
$ 17.50 – 20.64	171,814	$	18.59
$ 21.20 – 38.01	190,093	$	28.12
	526,272

Restricted stock transactions during fiscal 2003, 2004 and 2004 were as follows (in thousands, except weighted average grant prices):

	Number of Shares		Weighted Average Grant Price
Balance November 2, 2002	—		$	—
Granted	54,526			18.34
Balance November 1, 2003	54,526		$	18.34
Granted	264,087			30.43
Balance October 30, 2004	318,613		$	28.36
Granted	209,451			38.24
Distributed	(33,602	)		30.27
Forfeited	(3,000	)		38.65
Balance October 29, 2005	491,462		$	32.38

19

13. NET INCOME PER SHARE

The reconciliation of the numerator and denominator used for the computation of basic and diluted earnings per share is as follows (in thousands, except per share data):

	Fiscal year ended
	November 1, 2003		October 30, 2004		October 29, 2005
Numerator for Basic and Diluted Earnings Per Share
Net income	$	22,800	$	44,890	$	55,951
Denominator for Diluted Earnings Per Share
Weighted average shares outstanding for basic earnings per share		18,811		19,709		20,501
Common stock equivalents:
Employee stock options		158		275		322
Unvested restricted stock awards		—		12		34
Adjusted weighted average shares and assumed conversions for diluted earnings per share		18,969		19,996		20,857
Earnings per share
Basic	$	1.21	$	2.28	$	2.73
Diluted	$	1.20	$	2.24	$	2.68

Because our 2.125% convertible senior subordinated notes have a net share settlement provision and our share price at fiscal 2005 year end was less than the conversion price, these notes were not included on an “if converted” basis in the calculation of our fully diluted EPS.

14. EMPLOYEE BENEFIT PLAN

We have a 401(k) profit sharing plan (the “Savings Plan”) that covers all eligible employees. The Savings Plan requires us to match employee contributions up to 6% of a participant’s salary. Contributions expense for the fiscal years ended 2003, 2004 and 2005 was $3.2 million, $5.1 million and $6.0 million, respectively, for contributions to the Savings Plan. Plan participants receive the Company match in shares of our common stock. Our match ranges from 67% to 100%, depending on the return on adjusted operating assets. Our match was 67% in fiscal 2003 and 100% in fiscal years 2004 and 2005, due to achieving our targeted return on adjusted operating assets.

15. ACQUISITIONS

In December 2004, we purchased substantially all of the operating assets of Heritage and Steelbuilding.com, affiliated companies headquartered in North Little Rock, Arkansas. The purchase price for the two companies was approximately $25.4 million plus assumed liabilities of approximately $2.1 million. The purchase price consisted of $17.2 million in cash, $2.2 million of receivables owed to us by Heritage and Steelbuilding.com at the time of closing and approximately $6.4 million in restricted NCI common stock (199,767 shares). The transaction was accounted for using the purchase method. At the date of purchase, the excess of cost over the fair value of the acquired assets was approximately $14.0 million. The $6.4 million in restricted NCI common stock relates to up to 10-year non-compete agreements with certain of the sellers of Heritage and Steelbuilding.com (See Note 7). We will expense the approximate $6.4 million in restricted stock ratably over the terms of the agreements.

In December 2004, we also purchased our joint venture partner’s 49% minority interest in our manufacturing facility in Monterrey, Mexico for approximately $10.0 million in cash. The transaction was accounted for using the purchase method. At the date of purchase, the excess of cost over the fair value of the acquired assets was approximately $7.0 million.

The above acquisitions were not material, individually or in the aggregate, and accordingly, pro forma information has not been provided.

20

16. RESTRUCTURING

In October 2001, management announced a plan to realign our manufacturing capabilities to increase efficiencies, raise productivity and lower operating expenses. The pretax restructuring charge of $2.8 million related to the planned closing of five manufacturing facilities in our engineered building systems segment as part of this plan. This included a $2.1 million non-cash charge for an identified impairment to property, plant and equipment for the expected loss on the sale of two of the five facilities. The actions were substantially completed by the end of the first quarter of fiscal 2002. During fiscal 2002, we recognized a gain of $1.3 million ($0.8 million after tax) on the sale of certain real estate and equipment associated with the restructuring. During fiscal 2003, we recognized a loss of $0.9 million ($0.6 million after tax), which is recorded in cost of goods sold in our consolidated statements of operations, on the sale of one of the facilities and the reduction in the carrying value of the remaining facility due to the continuing deterioration of the local industrial resale market. The remaining facility, not yet sold, has a net carrying value of $0.5 million and we do not anticipate a selling price significantly different from this amount. The determination of fair value was based in part on an offer from a potential buyer in addition to management’s assessment of fair value.

17. CONTINGENCIES

In late 2003 and early 2004, a number of lawsuits were filed against several of our operating subsidiaries by Bethlehem Steel Corporation and National Steel Corporation (“National”) in their respective bankruptcy proceedings, seeking reimbursement of preferential transfers allegedly made by the respective debtors in the 90 day period preceding their bankruptcy filings. Bethlehem alleges it made preferential payments to our subsidiaries of approximately $7.7 million, while National claims preferential payments in the aggregate amount of $6.3 million. We have denied the allegations in the lawsuits and are vigorously defending against these claims. We believe these legal proceedings will not have a material adverse effect on our business, consolidated financial condition or results of operations. See Note 20.

We discovered the existence of polychlorinated biphenyls (“PCBs”) and heavy metals at our Metal Prep Houston site, which is located in an industrial area in Houston, Texas. Soil borings have been sampled and analyzed to determine the impact on the soil at this site, and the findings indicate that remediation of the site will likely be necessary. We have filed an application with the Texas Commission of Environmental Quality (“TCEQ”) for entry into the Voluntary Cleanup Program. Based upon an analysis of projected remediation costs of the known contamination, we originally estimated that we would spend and have accrued through fiscal 2004 approximately $2.5 million to remediate this site, which included future environmental consulting fees, oversight expenses and additional testing expenses. In the fourth quarter of fiscal 2005, we reduced our accrual to $1.9 million based upon the finalization of a cost estimate for the proposed remediation work, including excavation, transportation, analysis and disposal. Our Affected Property Assessment Report (“APAR”) has now been approved by the TCEQ, and we are preparing our proposed remedial action that will be filed with TCEQ in early 2006. We expect the cleanup to begin in the second quarter of fiscal 2006 and to be completed by fiscal year ending October 29, 2006. We can give no assurance that actual costs of remediation will not exceed our estimate, perhaps significantly; however, the accrued amount represents our best current-cost estimate based upon the best information available as of the date hereof. We have a contractual indemnity by the immediate prior owner of the property, which we believe obligates that party to reimburse our response costs with respect to this condition. We have brought suit against the prior owner asserting this indemnity, and that party has disputed liability. Further, we have joined in the litigation other potentially responsible parties against whom we are seeking contribution and/or indemnification. However, it is possible that our efforts to obtain reimbursement of our response costs at this site may not be successful or may not prove to be cost-effective for us. We have not recorded any receivables for potential reimbursements from such third parties.

From time to time, we are involved in various other legal proceedings and contingencies considered to be in the ordinary course of business. While we are not able to predict whether we will incur any liability in excess of insurance coverages or to accurately estimate the damages, or the range of damages, if any, we might incur in connection with these legal proceedings, we believe these legal proceedings will not have a material adverse effect on our business, consolidated financial condition or results of operations.

18. BUSINESS SEGMENTS

We aggregate our operations into three reportable segments based upon similarities in product lines, manufacturing processes, marketing and management of our businesses: metal components, engineered building systems and metal coil coating. Products of all three segments use similar basic raw materials. The metal components segment products include metal roof and wall panels, doors, metal partitions, metal trim and other related accessories. The engineered building systems segment includes the manufacturing of main frames, Long Bay^® Systems and value added engineering and drafting, which are typically not part of metal components or metal coil coating products or services. The metal coil coating segment consists of cleaning, treating, painting and slitting continuous steel coils before the steel is fabricated for use by various industrial users. The reporting segments follow the same accounting policies used for our consolidated financial statements. Management evaluates a segment’s performance based primarily upon operating income before corporate expenses.

21

Intersegment sales are recorded based on weighted average costs and consist of (i) building components provided by the metal components segment to the engineered building systems segment, (ii) structural framing provided to the metal components segment by the engineered building systems segment, and (iii) hot rolled, light gauge painted, and slit material and other services provided by the metal coil coating segment to both of the engineered building systems and metal components segments. Substantially all of our sales are made within the United States. Because we had no customer that represented 10% or more of total consolidated sales and we are not dependent on any one significant customer or group of customers, the loss of any one customer would not have a material adverse effect on our results of operations. Steel represents approximately 74% of cost of goods sold.

Summary financial data by segment is as follows (in thousands, except percentages):

	2003			%		2004			%		2005			%
Sales:
Metal components	$	518,587		58		$	637,685		59		$	681,778		60
Engineered building systems		310,491		35			407,483		37			446,307		39
Metal coil coating		175,410		19			234,886		22			232,648		21
Intersegment sales		(106,338	)	(12	)		(195,191	)	(18	)		(230,667	)	(20	)
Total net sales	$	898,150		100		$	1,084,863		100		$	1,130,066		100
Operating income:
Metal components	$	45,851		9		$	76,724		12		$	79,223		12
Engineered building systems		18,055		6			31,340		8			44,865		10
Metal coil coating		21,204		12			26,444		11			20,157		9
Corporate		(27,947	)	—			(37,532	)	—			(39,775	)	—
Total operating income (% of sales)	$	57,163		6		$	96,976		9		$	104,470		9
Unallocated other expense		19,605					22,319					8,259
Income before income taxes	$	37,558				$	74,657				$	96,211
Depreciation and amortization:
Metal components	$	9,042		39		$	8,400		37		$	9,967		41
Engineered building systems		6,134		27			6,810		30			6,097		25
Metal coil coating		4,919		21			4,911		21			5,199		21
Corporate		2,912		13			2,853		12			3,225		13
Total depreciation and amortization expense	$	23,007		100		$	22,974		100		$	24,488		100
Capital expenditures:
Metal components	$	4,023		22		$	1,901		20		$	3,847		20
Engineered building systems		10,309		58			3,652		39			4,842		25
Metal coil coating		1,962		11			1,744		19			3,917		20
Corporate		1,618		9			2,030		22			6,918		35
Total capital expenditures	$	17,912		100		$	9,327		100		$	19,524		100
Property, plant and equipment, net:
Metal components						$	82,223		44		$	81,099		44
Engineered building systems							44,554		24			45,072		24
Metal coil coating							44,836		24			43,671		24
Corporate							14,074		8			15,436		8
Total property, plant and equipment, net						$	185,687		100		$	185,278		100
Total assets as of fiscal year end 2004 and 2005:
Metal components						$	323,026		41		$	360,793		36
Engineered building systems							223,418		28			250,653		25
Metal coil coating							196,762		25			155,009		16
Corporate							43,220		6			223,764		23
						$	786,426		100		$	990,219		100

22

19. QUARTERLY RESULTS (Unaudited)

Shown below are selected unaudited quarterly data (in thousands, except per share data):

	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
FISCAL YEAR 2005
Sales	$	245,239	$	250,571	$	292,734	$	341,522
Gross profit	$	58,711	$	61,558	$	71,162	$	87,936
Net income	$	10,722	$	10,732	$	14,689	$	19,808
Net income per share: (1)
Basic	$	0.53	$	0.52	$	0.71	$	0.98
Diluted	$	0.52	$	0.51	$	0.70	$	0.96
FISCAL YEAR 2004
Sales	$	215,406	$	254,686	$	295,814	$	318,957
Gross profit	$	50,217	$	57,618	$	68,236	$	86,070
Net income(2)	$	5,768	$	7,693	$	8,395	$	23,034
Net income per share: (1), (2)
Basic	$	0.30	$	0.39	$	0.42	$	1.15
Diluted	$	0.29	$	0.39	$	0.41	$	1.13

(1) The sum of the quarterly income per share amounts may not equal the annual amount reported, as per share amounts are computed independently for each quarter and for the full year based on the respective weighted average common shares outstanding.

(2) During the third quarter of fiscal 2004, we completed a debt refinancing that consisted of a premium paid on the redemption of our 9.25% senior subordinated notes of $5.8 million and the write off of the unamortized deferred financing costs on the old credit facilities of $4.1 million for a total of $9.9 million ($5.8 million after tax).

20. SUBSEQUENT EVENTS

In December 2005, we agreed to a settlement in federal court of any and all claims with National. As a condition of the settlement, National agreed to dismiss the action with prejudice and we agreed to waive our claim in the bankruptcy proceeding. In addition, both National and we have agreed to exchange mutual releases of liability. See Note 17.

23

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Management of NCI Building Systems, Inc. (the “Company” or “our”) is responsible for establishing and maintaining adequate internal control over financial reporting for the Company as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. The Company’s internal control system was designed to provide reasonable assurance to the Company’s management and Board of Directors regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles.

Internal control over financial reporting includes the controls themselves, monitoring (including internal auditing practices), and actions taken to correct deficiencies as identified.

There are inherent limitations to the effectiveness of internal control over financial reporting, however well designed, including the possibility of human error and the possible circumvention or overriding of controls. The design of an internal control system is also based in part upon assumptions and judgments made by management about the likelihood of future events, and there can be no assurance that an internal control will be effective under all potential future conditions. As a result, even an effective system of internal controls can provide no more than reasonable assurance with respect to the fair presentation of financial statements and the processes under which they were prepared.

Internal control over financial reporting has inherent limitations and may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable, not absolute, assurance with respect to the financial statement preparation and presentation. Further, because of changes in conditions, the effectiveness of internal control over financial reporting may vary over time.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of October 29, 2005. In making this assessment, management used the criteria for internal control over financial reporting described in Internal Control –Integrated Framework by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Management’s assessment included an evaluation of the design of the Company’s internal control over financial reporting and testing of the operating effectiveness of its internal control over financial reporting. Management reviewed the results of its assessment with the Audit Committee of the Company’s Board of Directors. Based on this assessment, management has concluded that, as of October 29, 2005, the Company’s internal control over financial reporting was effective.

Ernst & Young LLP, an independent registered public accounting firm, audited management’s assessment of the effectiveness of the Company’s internal control over financial reporting as of October 29, 2005. Their report included elsewhere herein expresses an unqualified opinion on management’s assessment and on the effectiveness of our internal control over financial reporting as of October 29, 2005.

24

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON INTERNAL CONTROL

OVER FINANCIAL REPORTING

The Board of Directors and Stockholders

NCI Building Systems, Inc.

We have audited management’s assessment, included in the accompanying Management’s Report on Internal Control over Financial Reporting, that NCI Building Systems, Inc. (the “Company”) maintained effective internal control over financial reporting as of October 29, 2005, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, management’s assessment that the Company maintained effective internal control over financial reporting as of October 29, 2005, is fairly stated, in all material respects, based on the COSO criteria. Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of October 29, 2005, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of the Company as of October 29, 2005 and October 30, 2004, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the three years in the period ended October 29, 2005 and our report dated January 9, 2006 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Houston, Texas

January 9, 2006

25

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders

NCI Building Systems, Inc.

We have audited the accompanying consolidated balance sheets of NCI Building Systems, Inc. (the “Company”) as of October 29, 2005 and October 30, 2004, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the three years in the period ended October 29, 2005. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those 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 management, 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 consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company as of October 29, 2005 and October 30, 2004, and the consolidated results of its operations and its cash flows for each of the three years in the period ended October 29, 2005, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of the Company’s internal control over financial reporting as of October 29, 2005, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated January 9, 2006 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Houston, Texas

January 9, 2006

26

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

FORWARD LOOKING STATEMENTS

This Annual 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;

• fluctuations in customer demand and other patterns;

• raw material pricing;

• competitive activity and pricing pressure;

• the ability to make strategic acquisitions accretive to earnings, and general economic conditions affecting the construction industry; and

• other risks detailed under the caption “Risk Factors” in our Annual Report on Form 10-K as filed with the Securities and Exchange Commission (“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.

OVERVIEW

NCI Building Systems, Inc. is one of North America’s largest integrated manufacturers and marketers of products for the non-residential construction industry. We design, manufacture and market metal components and engineered building systems and provide metal coil coating services primarily for non-residential construction use. We manufacture and distribute extensive lines of metal products for the non-residential 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. We follow an accounting calendar that incorporates a four-four-five week calendar each quarter. In December 2005, we changed our fiscal year end, effective for fiscal 2006, from the Saturday closest to October 31 to the Sunday closest to October 31, with each fiscal quarter within the year ending on Sunday.

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.

Sales and earnings are influenced by general economic conditions, interest rates, the price of steel relative to other building materials, the level of non-residential construction activity, roof repair and retrofit demand and the availability and cost of financing for construction projects.

One of the primary challenges we face both short and long-term is the volatility in the price of steel, the primary raw material we use. Steel represented approximately 74% of our costs of goods sold in fiscal 2005. The steel industry is cyclical in nature and steel prices are influenced by numerous factors beyond our control, including general economic conditions, competition, labor costs, production costs, import duties and other trade restrictions. Beginning in the second quarter of fiscal 2004, there were unusually rapid and significant increases in steel prices and severe shortages in the steel industry due in part to increased demand from China’s expanding economy and high energy prices. Supply and prices from the domestic steel manufacturers and available foreign spot purchases began stabilizing during our fourth fiscal quarter of fiscal 2004 and largely stabilized during the second fiscal quarter of fiscal 2005. However, since the end of our second fiscal quarter of fiscal 2005, scrap steel prices fell from approximately $270 per ton to $140 per ton, and then rebounded to approximately $230 per

27

ton. While we expect recent trends will continue into 2006 with anticipated weighted average steel price increases in the 9% range, AMI has recently forecasted that steel prices may remain flat and possibly soften in 2006. Because we adjusted our contracts during fiscal 2004, particularly in the engineered building systems segment, we are generally able to pass increases in our raw materials costs through to our customers, which is a principal reason for the increase in sales and operating income in spite of increases in steel prices from fiscal 2003 to 2005.

While we have previously been successful in passing on steel price increases, should steel prices increase at a faster rate than prices for alternative building materials, we may not be able to continue to pass steel price increases through to our customers, which could have an adverse effect on our sales. To mitigate future risks, we have incorporated steel price adjustment clauses in standard sales contracts. We do not have any long-term contracts for the purchase of steel and normally do not maintain an inventory of steel in excess of our current production requirements. However, from time to time, we may purchase additional inventory in advance of announced steel price increases.

In assessing the state of the metal construction market, we rely upon 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 look to for reports of actual and forecasted growth in various construction related industries, including the overall non-residential construction market. McGraw-Hill Construction’s forecast for 2006 expects a total non-residential construction growth of 4% in square footage and 8% in dollar value.

We assess performance across our business segments by analyzing and evaluating (i) gross profit, operating income and whether or not each segment has achieved their projected sales goals, and (ii) non-financial efficiency indicators such as revenue per employee, man hours per ton of steel produced and shipped tons per employee. In assessing our overall financial performance, we regard return on adjusted operating assets, as well as growth in earnings per share, as key indicators of shareholder value. Consequently, we pay management bonuses only if we achieve a return on adjusted operating assets (“ROA”) of at least 15% in fiscal 2005 and 14% in fiscal 2006 or, for the senior executives, a growth in earnings per share of at least 10%. Our bonus program provides that ROA is calculated by dividing EBIT plus deferred financing costs by assets, excluding cash, deferred taxes and goodwill.

During fiscal 2005, we continued the execution of our internal and external growth strategy by successfully completing (i) the acquisition of Heritage Building Systems, Inc. (“Heritage”) and Steelbuilding.com, Inc. (“Steelbuilding.com”) in an effort to increase our retail sales and (ii) the buyout of our joint venture partner’s 49% interest in our Mexico operations to give us more control and flexibility of that business. Both of these transactions were completed in December 2004.

RESULTS OF OPERATIONS

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

	Fiscal year ended
	November 1, 2003		October 30, 2004		October 29, 2005
Sales	100.0	%	100.0	%	100.0	%
Cost of sales	78.0		75.8		75.3
Gross profit	22.0		24.2		24.7
Selling, general and administrative expenses	15.6		15.2		15.5
Income from operations	6.4		9.0		9.2
Interest income	—		—		0.4
Interest expense	(2.2	)	(1.4	)	(1.2	)
Loss on debt refinancing	—		(0.9	)	—
Other income, net	—		0.2		0.1
Income before income taxes	4.2		6.9		8.5
Provision for income taxes	1.7		2.7		3.5
Net income	2.5	%	4.2	%	5.0	%

28

SUPPLEMENTARY BUSINESS SEGMENT INFORMATION

Our various product lines have been aggregated into three business segments: metal components, engineered building systems and metal coil coating. These aggregations are based on the similar nature of the products, distribution channels, and management and reporting for those products. All segments operate primarily in the non-residential construction market. Sales and earnings are influenced by general economic conditions, the level of non-residential construction activity, metal roof repair and retrofit demand and the availability and terms of financing available for construction. The reporting segments follow the same accounting policies used for our consolidated financial statements.

Products of all business segments are similar in basic raw materials used. The metal component segment products include metal roof and wall panels, doors, metal partitions, metal trim and other related accessories. The engineered building systems segment includes the manufacturing of main frames, Long Bay^® Systems and supplies and value added engineering and drafting, which are typically not part of metal components or metal coil coating products or services. Metal coil coating consists of cleaning, treating, painting and slitting continuous steel coils before the steel is fabricated for use by various industrial users. We believe we have one of the broadest offerings of products in the metal construction industry.

Intersegment sales are based on weighted average costs and consist of components provided by the metal components segment to the engineered building systems segment, main frames provided by the engineered building systems segment to the metal components segment, and hot roll, light gauge painted, and slit material and other services provided by the metal coil coating segment to both of the metal components and engineered building systems segments. This provides better customer service, shorter delivery time and minimizes transportation costs to the customer. Segment information is included in the three-year comparison in Note 18 of the consolidated financial statements.

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

Sales:	2003			%		2004			%		2005			%
Metal components	$	518,587		58		$	637,685		59		$	681,778		60
Engineered building systems		310,491		35			407,483		37			446,307		39
Metal coil coating		175,410		19			234,886		22			232,648		21
Intersegment sales		(106,338	)	(12	)		(195,191	)	(18	)		(230,667	)	(20	)
Total net sales	$	898,150		100		$	1,084,863		100		$	1,130,066		100
Operating income:
Metal components	$	45,851		9		$	76,724		12		$	79,223		12
Engineered building systems		18,055		6			31,340		8			44,865		10
Metal coil coating		21,204		12			26,444		11			20,157		9
Corporate		(27,947	)	—			(37,532	)	—			(39,775	)	—
Total operating income (% of sales)	$	57,163		6		$	96,976		9		$	104,470		9
Unallocated other expense		19,605					22,319					8,259
Income before income taxes	$	37,558				$	74,657				$	96,211
Total assets as of fiscal year end 2004 and 2005:
Metal components						$	323,026		41		$	360,793		36
Engineered building systems							223,418		28			250,653		25
Metal coil coating							196,762		25			155,009		16
Corporate							43,220		6			223,764		23
Total assets						$	786,426		100		$	990,219		100

29

RESULTS OF OPERATIONS FOR FISCAL 2005 COMPARED TO FISCAL 2004

Consolidated sales for each of fiscal 2005 and 2004 were $1.1 billion. Sales were relatively flat compared to last year due to an increase in selling prices resulting from steel cost increases, partially offset by lower tonnage volumes in all segments. Intersegment sales in fiscal 2005 of $230.7 million represent products and services provided among the three segments for metal components, engineered building systems and metal coil coating of $86.7 million, $22.1 million and $121.9 million, respectively.

Metal components sales for fiscal 2005 increased $44.1 million to $681.8 million from $637.7 million for fiscal 2004. Sales to third parties for fiscal 2005 increased to $595.1 million from $576.8 million for fiscal 2004. Of the $44.1 million increase, $18.3 million represents an increase in third party sales and was primarily attributed to adjusting our prices to compensate for higher steel prices, partially offset by lower tonnage volumes. The remaining $25.8 million represents an increase in intersegment sales.

Operating income of the metal components segment increased 3% in fiscal 2005 to $79.2 million from $76.7 million for fiscal 2004. The $2.5 million increase was primarily attributed to higher gross margins of $8.4 million driven primarily by higher average prices, partially offset by an increase of $5.9 million in selling and administrative expenses. The increase in selling and administrative expenses resulted primarily from 11 months of expense related to Heritage and Steelbuilding.com subsequent to the December 2004 acquisition, partially offset by a decrease of $2.6 million in the provision for doubtful accounts.

Engineered building systems sales for fiscal 2005 increased $38.8 million to $446.3 million from $407.5 million for fiscal 2004. Sales to third parties for fiscal 2005 increased to $424.2 million from $385.2 million for fiscal 2004. Of the $38.8 million increase, $39.0 million represents an increase in third party sales and was primarily attributed to adjusting our prices to compensate for higher steel prices, partially offset by lower tonnage volumes. The remaining $0.2 million decrease in sales represents a decrease in intersegment sales from fiscal 2004 to fiscal 2005.

Operating income of the engineered building systems segment increased 43% in fiscal 2005, to $44.9 million, compared to $31.3 million for the prior year. This $13.6 million increase resulted primarily from a $15.5 million increase in gross profit attributable to adjusting our prices to compensate for higher steel prices, partially offset by a $1.9 million increase in selling and administrative expenses. The increase in selling and administrative expenses was primarily due to increases in engineering expenses of $1.4 million and selling expenses of $3.1 million partially offset by a decrease in administrative expenses of $2.6 million. The decrease in administrative expenses was primarily due to decreases in bonus expense of $1.0 million, health insurance of $1.0 million and general liability insurance of $0.7 million.

Metal coil coating sales for fiscal 2005 decreased 1%, to $232.6 million from $234.9 million in fiscal 2004. Sales to third parties for fiscal 2005 decreased to $110.8 million from $122.8 million for fiscal 2004. This decrease was primarily attributed to shifting production capacity to internal uses for the metal components and engineered building systems segments and an overall softening in the market. Intersegment sales increased 9%, to $121.9 million in fiscal 2005 compared to $112.1 million for the prior year’s period.

Prior to the third quarter of fiscal 2004, a portion of the revenue for the metal coil coating segment was recognized upon completion of the painting process for consigned coils owned by the customer, which in most cases were steel mills. This accounting treatment met the criteria to be recognized as revenue in accordance with SEC Staff Accounting Bulletin No. 101. In 2004, many steel mills that traditionally had consigned steel coils to us in this manner abandoned that procedure, resulting in purchasing and recognizing steel coils as inventory upon the arrival of such raw materials at our coil coating plants. As a result, during the third quarter of fiscal 2004, we changed our policy to recognize revenue upon shipment of the coils from the coil coating facilities to third parties. The impact of the accounting change during the third quarter of 2004, which was not material, was a reduction to our revenues and operating income of approximately $4.5 million and $0.8 million, respectively. This change would not have had a material effect on any prior periods presented and is not expected to materially affect future results.

Operating income of the metal coil coating segment decreased 23%, to $20.2 million, compared to $26.4 million for the prior year. The $6.2 million decrease is attributable to lower margins of $6.6 million partially offset by a decrease of $0.4 million in selling and administrative expenses.

Consolidated selling, general and administrative expenses increased to $174.9 million in fiscal 2005 from $165.2 million for the prior year due to an additional $10.0 million of general and administrative expense that resulted from the acquisition of Heritage and Steelbuilding.com, as well as a $3.0 million increase in restricted stock expense, partially offset by a lower provision for doubtful accounts of $2.5 million. As a percent of sales, selling, general and administrative expenses for both fiscal 2005 and fiscal 2004 were 15%.

30

Consolidated interest expense for fiscal 2005 decreased by 4%, to $14.5 million compared to $15.1 million for the prior year. This decrease was primarily due to the lower interest rate attributable to the refinancing of the senior secured credit facility as compared to that of the 9.25% convertible senior subordinated notes that were redeemed during the third quarter of fiscal 2004.

Consolidated provision for income taxes for fiscal 2005 increased 35%, to $40.3 million compared to $29.8 million for the prior year. Of the increase, approximately $9.0 million is related to the $21.6 million increase in pre-tax earnings. The remaining $1.5 million is attributed to the increase in the effective tax rate in fiscal 2005 to 41.8% compared to 39.9% for the prior year. Included in the effective tax rate were income tax adjustments totaling $1.8 million primarily related to previously unrecognized differences between the book and tax basis differences in fixed assets of $1.5 million. These adjustments were partially offset by a reversal of an accrual for tax contingencies of $1.0 million. Also included in the effective tax rate were several other items that were immaterial individually and in the aggregate to the financial statements in the current or previous periods.

RESULTS OF OPERATIONS FOR FISCAL 2004 COMPARED TO FISCAL 2003

Consolidated sales for fiscal 2004 were $1.1 billion compared with $898.2 million for fiscal 2003. Sales were up 21% primarily due to an increase in selling prices resulting from steel cost increases, and higher demand primarily in the engineered building systems segment. Higher tonnage volumes were driven by an improving market for non-residential construction Intersegment sales in fiscal 2004 of $195.2 million represent products and services provided among the three segments for metal components, engineered building systems and metal coil coating of $60.9 million, $22.2 million and $112.1 million, respectively.

Metal components sales for fiscal 2004 increased $119.1 million to $637.7 million from $518.6 million for fiscal 2003. Sales to third parties for fiscal 2004 increased to $576.8 million from $473.5 million for fiscal 2003. Of the $119.1 million increase, $103.3 million represents an increase in third party sales and was primarily attributed to the increase in selling prices due to steel cost increases experienced during fiscal 2004. The remaining $15.8 million represents an increase in intersegment sales.

Operating income of the metal components segment increased 67% in fiscal 2004 to $76.7 million from $45.9 million for fiscal 2003. The $30.8 million increase was attributable to higher gross margins of $39.9 million driven primarily by higher sales prices and leveraging fixed manufacturing costs, offset by an increase of $9.1 million in selling and administrative expenses consisting of the inclusion of Able for twelve months in fiscal 2004 versus six months in fiscal 2003 when acquired ($3.2 million), and increases in employee benefits ($3.3 million), outside services ($1.4 million), advertising expenses ($0.6 million), provision for doubtful accounts ($0.3 million) and research and development costs ($0.2 million) and other expenses ($0.1 million).

Engineered building systems sales for fiscal 2004 increased $97.0 million to $407.5 million from $310.5 million for fiscal 2003. Sales to third parties for fiscal 2004 increased to $385.2 million from $297.3 million for fiscal 2003. Of the $97.0 million increase, $87.9 million represents an increase in third party sales and was primarily attributed to renegotiating some existing backlog to incorporate steel price increases into our pricing and incorporating such higher prices into new contracts. The remaining $9.1 million represents an increase in intersegment sales from fiscal 2003 to fiscal 2004.

Operating income of the engineered building systems segment increased 74% in fiscal 2004, to $31.3 million, compared to $18.0 million for the prior year. The $13.3 million increase is attributable to $23.3 million gross margin on the additional sales offset by a $5.5 million decrease in margins due to the lower priced backlog, which limited our ability to pass through all steel price increases to our customers, and an increase of $4.5 million in selling and administrative expenses consisting of increases in employee benefits ($4.8 million), commissions ($1.5 million) and engineering expenses ($0.8 million), offset by a lower provision for doubtful accounts compared to the prior year for our Mexico operations ($2.5 million) and decreases in other expenses ($0.1 million).

Metal coil coating sales for fiscal 2004 increased 34%, to $234.9 million from $175.4 million in fiscal 2003. Sales to third parties for fiscal 2004 decreased to $122.8 million from $127.3 million for fiscal 2003. This decrease was primarily attributed to shifting production capacity to internal uses for the metal components and engineered building systems segments and an overall softening in the market. Intersegment sales increased 133%, to $112.1 million in fiscal 2004 compared to $48.1 million for the prior year’s period.

Prior to the third quarter of fiscal 2004, a portion of the revenue for the metal coil coating segment was recognized upon completion of the painting process for consigned coils owned by the customers, which in most cases were steel mills. This accounting treatment met the criteria to be recognized as revenue in accordance with SEC Staff Accounting Bulletin No. 101. In 2004, many steel mills which traditionally had consigned steel coils to us in this manner abandoned that procedure, resulting in purchasing and recognizing steel coils as inventory upon the arrival of such raw materials at our coil coating

31

plants. As a result, during the third quarter of fiscal 2004, we changed our policy to recognize revenue upon shipment of the coils from the coil coating facilities to third parties. The impact of the accounting change during the third quarter of 2004, which was not material, was a reduction to our revenues and operating income of approximately $4.5 million and $0.8 million, respectively. This change would not have had a material effect on any prior periods presented and is not expected to materially affect future results.

Operating income of the metal coil coating segment increased 25% in fiscal 2004, to $26.4 million compared to $21.2 million for the prior year. The $5.2 million increase is attributable to higher margins of $7.8 million due to higher prices and significantly increased plant efficiency as intercompany sales volume increased 133% from $48.1 million for fiscal 2003 to $112.1 million for fiscal 2004. This was offset by a $0.9 million impact due to a decrease in external sales and a $1.7 million increase in selling and administrative expenses consisting of increases in employee benefits ($0.9 million), outside services ($0.3 million), provision for doubtful accounts ($0.3 million) and other expenses ($0.2 million).

Consolidated selling, general and administrative expenses increased to $165.2 million in fiscal 2004 from $140.4 million for the prior year due to increases in employee benefits ($14.7 million), outside services ($3.7 million), the inclusion of Able for twelve months in fiscal 2004 versus six months in fiscal 2003 ($3.2 million), commissions ($1.5 million), engineering expenses (0.8 million), advertising expenses ($0.6 million), offset by a higher provision for doubtful accounts in the prior year for our Mexico operations ($2.5 million). As a percent of sales, selling, general and administrative expenses for fiscal 2004 were 15% compared to 16% for fiscal 2003.

Consolidated interest expense for fiscal 2004 decreased by 24%, to $15.1 million compared to $19.8 million for the prior year. This decline was primarily due to a decrease in outstanding debt for the year of $32.1 million and reduced interest rates resulting from the debt refinancing completed during the third quarter of fiscal 2004.

Loss on debt refinancing for fiscal 2004 was $9.9 million and consisted of a premium paid on the redemption of the Company’s 9.25% convertible senior subordinated notes of $5.8 million and the write off of the unamortized deferred financing costs on the old credit facilities of $4.1 million because of the debt refinancing completed during the third quarter of fiscal 2004.

Consolidated provision for income taxes for fiscal 2004 increased 102%, to $29.8 million compared to $14.8 million for the prior year. This increase was primarily due to an increase in income before taxes as the effective rate was 39.9% and 39.3% for 2004 and 2003, respectively.

LIQUIDITY AND CAPITAL RESOURCES

General

For fiscal 2005, our cash and cash equivalents increased $192.5 million to $200.7 million at the end of fiscal 2005 from $8.2 million at the end of fiscal 2004. The increase resulted from cash provided by operating activities of $118.3 million in fiscal 2005 versus $23.7 million in fiscal 2004, and cash provided by financing activities of $120.0 million in fiscal 2005 versus cash used in financing activities of $23.7 million in fiscal 2004. These amounts were partially offset by $45.8 million used in investing activities in fiscal 2005. The increase in cash provided by operating activities in fiscal 2005 of $94.5 million is primarily related to decreases in inventory, which resulted from improved inventory management, and accounts receivable, which reflects improved collections. The increase in financing activities in fiscal 2005 of $143.7 million resulted primarily from our issuance of $180 million aggregate principal amount of convertible senior subordinated notes due 2024 (the “Notes”) partially offset by payments of $23.7 million on borrowings, $5.0 million in deferred financing costs and $40.7 million for purchase of treasury stock. The increase in cash used in investing activities of $39.8 million in fiscal 2005 resulted primarily from cash paid for acquisitions and capital expenditures of $27.4 million and $19.5 million, respectively.

We invest our excess cash in commercial paper with maturities up to 90 days and with a rating of not less than A-1 or P-1.

Debt

In June 2004, we completed a $325 million senior secured credit facility with a group of lenders and used the initial borrowings to repay in full our then existing credit facility and redeem our $125 million of convertible senior subordinated notes due 2009. We believe that our current senior secured credit facility provides us with increased financial flexibility and decreased borrowing costs. The current facility includes a $125 million five-year revolving loan maturing on June 18, 2009 and a $200 million, six-year term loan maturing on June 18, 2010. The term loan requires mandatory prepayments of $0.5 million each quarter beginning in November 2004 with a final payment of $188.5 million at maturity. At October 29, 2005, no amounts were outstanding under revolving loan agreements and $193 million was outstanding under the term loan.

In October 2005, we amended our senior secured credit facility. The amendments, among other things, (i) provided a permanent waiver of the mandatory prepayment provision that pertained to the $180 million Notes issued in November 2004, (ii) reduced the applicable margin for term loans from 2.0% to 1.5% for LIBOR loans and from 1.0% to 0.5% for base rate

32

loans, (iii) increased the restricted payments basket from $25.0 million plus 25% of net income to $35.0 million plus 25% of net income and (iv) accelerated the scheduled step-down of the maximum senior leverage ratio to 3.0:1 from May 2007 to the date of the amendment.

Loans on the senior secured credit facility bear interest, at our option, as follows: (1) base rate loans at the base rate plus a margin, which for term loans is 0.5% and for revolving loans fluctuates based on our leverage ratio and ranges from 0.25% to 1.25% and (2) LIBOR loans at LIBOR plus a margin, which for term loans is 1.50% and for revolving loans fluctuates based on our leverage ratio and ranges from 1.25% to 2.25%. Base rate is defined as the higher of the Wachovia Bank, National Association prime rate or the overnight Federal Funds rate plus a margin, which for term loans is 0.50% and for revolving loans fluctuates based on our leverage ratio and ranges from 0.25% to 1.25%, and LIBOR is defined as the applicable London interbank offered rate adjusted for reserves. Based on our current leverage ratios, we will pay a margin of 0.75% on base rate loans and 1.75% on LIBOR loans under the revolving loan and a margin of 0.50% on base rate loans and 1.50% on LIBOR loans under the term loan during the first quarter of fiscal 2006.

The senior secured credit facility is secured by (1) 100% of our accounts receivable, inventory and equipment and related assets such as our software, chattel paper, instruments and contract rights (excluding foreign operations) and (2) 100% of the capital stock and other equity interests in each of our direct and indirect operating domestic subsidiaries and 65% of the capital stock in each of our foreign subsidiaries.

The senior secured credit facility requires compliance with various covenants and provisions customary for agreements of this nature, including a minimum ratio of Consolidated EBITDA (as defined in the senior secured credit facility) to interest expense of four to one and maximum ratios of total debt and senior debt to Consolidated EBITDA of four to one and three to one, respectively.

The senior secured credit facility also restricts our ability to undertake additional debt or equity financing.

Borrowings under the senior secured credit facility may be repaid at anytime and the voluntary reduction of the unutilized portion of the five-year revolver may be made at any time, in certain amounts, without premium or penalty but subject to LIBOR breakage costs. We are required to make mandatory payments on the senior secured credit facility upon the occurrence of certain events, including the sale of assets and the issuance and sale of equity securities, in each case subject to certain limitations and conditions. These payments must first be applied to the term loan and then to the reduction of the revolving commitment.

At October 30, 2004 and October 29, 2005, we had approximately $104 million and $118 million, respectively, in unused borrowing capacity (net of letters of credit outstanding of approximately $5 million and $7 million, respectively) under the senior secured credit facility, of which a total of $20 million may be utilized for standby letters of credit.

In November 2004, we completed an offering of $180 million aggregate principal amount of 2.125% convertible senior subordinated notes due 2024 (the “Notes”) with interest payable semi-annually. Interest on the Notes is not deductible for income tax purposes, which creates a permanent tax difference that is reflected in our effective tax rate. The Notes are general unsecured obligations and are subordinated to our present and future senior indebtedness.

We have the right to redeem the Notes, beginning on November 20, 2009, for a price equal to 100% of the principal amount plus accrued and unpaid interest, if any. Each holder has the right to require that we repurchase the Notes after five, 10 and 15 years at 100% of the principal amount plus accrued and unpaid interest, if any, beginning November 15, 2009. Upon the occurrence of certain designated events, holders of the Notes will also have the right to require that we purchase all or some of their Notes at a redemption price equal to 100% of the principal amount plus accrued and unpaid interest, if any, and, in certain circumstances, a make whole premium. We must pay the repurchase price of the aggregate principal amount of the Notes in cash unless prohibited by limitations imposed by our existing or future senior credit agreements. The Notes are convertible into cash or, in certain circumstances, a combination of cash and shares of our common stock, at a ratio of 24.9121 shares of common stock per $1,000 principal amount notes, which is equivalent to an initial conversion price of approximately $40.14 per common share. The ratio is subject to adjustments if certain events take place, and conversion may only occur if the closing sale price per common share exceeds 120% of the conversion price for at least 20 trading days in the 30 consecutive trading day period ending on the last trading day of the preceding calendar quarter or if certain other conditions are met. At October 29, 2005, $180 million principal amount of the Notes was outstanding.

Cash Flow

We periodically evaluate our liquidity requirements, capital needs and availability of resources in view of, among other things, inventory levels, expansion plans, debt service requirements and other operating cash needs. To meet our short- and long-term liquidity requirements, including payment of operating expenses and repaying debt, we rely primarily on cash from operations. However, we have recently, as well as in the past, sought to raise additional capital and may do so again in the future.

33

Historically since 1999, cash generated from operations and from sales of assets and investments has generated sufficient cash to fund acquisitions completed prior to fiscal 2005 for an aggregate of approximately $62 million and to repay an aggregate of $372 million of the $565 million of long-term indebtedness outstanding after the acquisition of Metal Building Components, Inc. and California Finished Metals, Inc. in May 1998. We expect that, for the foreseeable future, cash generated from operations, sales of assets no longer needed for efficient operations and the available borrowings under our senior secured credit facility as well as the net proceeds from our offering of the Notes will be sufficient to provide us the ability to fund our operations, provide the increased working capital necessary to support expected growth, fund planned capital expenditures of approximately $29 million for fiscal 2006 and expansion when needed, and pay scheduled interest and principal payments on our indebtedness. To the extent that the net proceeds of approximately $176 million from our offering of the Notes are insufficient to fund acquisitions, we may be required to obtain funds from other sources, which may include refinancing or increasing our senior debt facility and issuing public or private debt or equity, or a combination thereof, all of which will be dependent upon our continued compliance with the financial and other covenants in our existing senior secured credit facility and the indenture for the Notes. We expect that, to the extent we are unable to pay in full any outstanding balance of the revolving portion of our senior secured credit facility by its maturity date in on June 2009, or the $188.5 million final installment on our term loan by its maturity date in June 2010, we will refinance any then outstanding balance by means of a new senior credit facility or other public or private equity or debt financings. There can be no assurance that any of these external sources of funds will be available to us at the time they are needed or that any of those financings can be arranged on acceptable terms, or terms as favorable as those now enjoyed by us under our existing indebtedness.

Inflation

Inflation has not significantly affected our financial position or operations over the last three fiscal years. Metal components and engineered building systems sales are affected more by the availability of funds for construction and interest rates. No assurance can be given that inflation or interest rates will not fluctuate significantly, either or both of which could have an adverse effect on our operations.

Steel Prices

Our business is heavily dependent on the prices and supply of steel, which is the principal raw material used in our products. 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, competition, labor costs, production costs, import duties and other trade restrictions. Beginning in the second quarter of fiscal 2004, there were unusually rapid and significant pricing increases and severe shortages in the steel industry due in part to increased demand from China’s expanding economy and high energy prices. Supply and prices from the domestic steel manufacturers and available foreign spot purchases began stabilizing at high relative volumes during our fourth fiscal quarter in 2004. Pricing increases for sheet, hot roll and structural steel abated during much of fiscal 2005. However, that abatement ended with steel price increases in October 2005. Overall, our weighted average cost of steel decreased in fiscal 2005 compared to fiscal 2004. Based on our belief that demand for non-residential construction building materials will increase in fiscal 2006 over fiscal 2005, we expect to see moderate steel price increases during fiscal 2006. We do not have any long-term contracts for the purchase of steel and 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 remain available or that prices will not continue to be volatile. While most of our 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, we may, for competitive or other reasons, 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 our customers, 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.

We rely on a few major suppliers for our supply of steel, and may be adversely affected by the bankruptcy, financial condition or other factors affecting those suppliers. During 2001 and 2002, our primary steel suppliers, Bethlehem Steel Corporation and National Steel Corporation, respectively, filed for protection under Federal bankruptcy laws. During the third quarter of fiscal 2003, U.S. Steel bought substantially all of the integrated steel-making assets of National Steel, and International Steel Group, Inc. (“ISG”) acquired the assets of Bethlehem Steel. During April 2005, Mittal Steel USA purchased ISG. During fiscal 2005, we purchased approximately 38% of our steel requirements from ISG. A prolonged labor strike against one or more of our principal domestic suppliers could have a material adverse effect on our operations. Furthermore, if one or more of our current suppliers is unable for financial or any other reason to continue in business or to produce steel sufficient to meet our requirements, essential supply of our primary raw materials could be temporarily interrupted and adversely affect our business.

OFF-BALANCE SHEET ARRANGEMENTS

As part of our ongoing business, we do not participate in transactions that generate relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities (“SPEs”), which

34

would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. As of October 29, 2005, we were not involved in any material unconsolidated SPE transactions.

CONTRACTUAL OBLIGATIONS

The following table shows our known contractual obligations as of October 29, 2005 (in thousands):

Contractual Obligation	Payments due by period
	Total		Less than 1 year		1-3 years		4-5 years		More than 5 years
Total debt	$	373,000	$	2,000	$	6,000	$	185,000	$	180,000
Operating leases		23,716		6,137		9,713		4,929		2,937
Purchase obligations(1)		6,370		5,553		817		—		—
Other long-term obligations (2)		6,570		445		1,190		1,290		3,645
Total contractual obligations	$	409,656	$	14,135	$	17,720	$	191,219	$	186,582

(1) Includes various agreements for steel delivery obligations, gas contracts and telephone service obligations. In general, purchase orders issued in the normal course of business can be terminated in whole or part for any reason without liability until the product is received.

(2) Includes contractual payments to or on behalf of former executives and projected supplemental retirement benefits for certain of our current executive officers.

CONTINGENT LIABILITIES AND COMMITMENTS

We are required to have standby letters of credit as a collateral requirement of our insurance carrier for our projected exposure for worker’s compensation, general liability and auto claims. For all insurance carriers, the total standby letters of credit are approximately $5 million and $7 million at October 30, 2004 and October 29, 2005, respectively. We also have a total of $20 million available for letters of credit under our current senior secured credit facility.

CRITICAL ACCOUNTING POLICIES

Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the U.S., which require us to make estimates and assumptions that affect the reported amounts of assets and liabilities and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to bad debts, inventory obsolescence, property and equipment, intangible assets and goodwill, income taxes, worker’s compensation insurance and contingent liabilities. Our significant accounting policies are disclosed in Note 2 to our consolidated financial statements. The following discussion of critical accounting policies addresses those policies that are both important to the portrayal of our financial condition and results of operations and require significant judgment and estimates. We base our estimates and judgment on historical experience and on various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.

Revenue recognition

We recognize revenues when all of the following conditions are met: persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable, and collectibility is reasonably assured. Generally, these criteria are met at the time product is shipped or services are complete. Provisions are made upon the sale for estimated product returns. Costs associated with shipping and handling our products are included in cost of sales.

Self insurance accruals

We are self insured for a substantial portion of the cost of employee group health insurance and for the cost of workers’ compensation benefits. We purchase insurance from third parties that provides individual and aggregate stop loss protection for these costs. Each reporting period, we record the costs of our health insurance plan, including paid claims, an estimate of the change in incurred but not reported (“IBNR”) claims, taxes and administrative fees (collectively the “Plan Costs”) as general and administrative expenses in our consolidated statements of operations. The estimated IBNR claims are based upon (i) a recent average level of paid claims under the plan, (ii) an estimated lag factor and (iii) an estimated growth factor to provide for those claims that have been incurred but not yet paid. For workers’ compensation costs, we monitor the number of accidents and the severity of such accidents to develop appropriate estimates for expected costs to provide both medical care and benefits during the period an employee is unable to work. These accruals are developed using third party estimates of the expected cost and length of time an employee will be unable to work based on industry statistics for the cost of similar disabilities. This statistical information is trended to provide estimates of future expected costs based on factors developed from our experience of actual claims cost compared to original estimates.

We believe that the assumptions and information used to develop these accruals provide the best basis for these estimates each quarter because as a general matter, the accruals have historically proven to be reasonable and accurate. However,

35

significant changes in expected medical and health care costs, negative changes in the severity of previously reported claims or changes in laws that govern the administration of these plans could have an impact on the determination of the amount of these accruals in future periods. We expensed approximately $19 million and $17 million for health insurance in fiscal 2004 and 2005, respectively, and $4 million and $3 million for workers’ compensation in fiscal 2004 and fiscal 2005, respectively. The health insurance accrual balance was $6.0 million and $2.9 million at October 30, 2004 and October 29, 2005, respectively, and the workers’ compensation accrual balance was $5 million and $4 million at October 30, 2004 and October 29, 2005, respectively. In fiscal 2004 and prior years, we based our health insurance accrual on at least three months for claims submitted. With improvements in technology, claims processing improved with claims being submitted, processed and paid in a much shorter time frame. As such, in fiscal 2005, we changed our methodology on a prospective basis for determining the amount of health insurance accrual to one that considers claims growth and claims lag, which is the length of time between the incurred date and processing date. The change in methodology resulted in a reduction of our health insurance accrual of approximately $3.0 million in fiscal 2005 over fiscal 2004. For the health insurance accrual, a change of 10% in the lag assumption would result in a financial impact of $0.3 million.

Goodwill

We perform a test for impairment of our goodwill annually as prescribed by SFAS No. 142, Goodwill and Other Intangible Assets. The fair value of our reporting units is based on a blend of estimated discounted cash flows, publicly traded company multiples and acquisition multiples. Estimated discounted cash flows are based on projected sales and related cost of sales. Publicly traded company multiples and acquisition multiples are derived from information on traded shares and analysis of recent acquisitions in the marketplace, respectively, for companies with operations similar to ours. Changes in assumptions used in the fair value calculation could result in an estimated reporting unit fair value that is below the carrying value, which may give rise to an impairment of goodwill.

In addition to the annual review, we also test for impairment whenever events or changes in circumstances indicate that such carrying values may not be recoverable. Unforeseen events, changes in circumstances and market conditions and material differences in the value of intangible assets due to changes in estimates of future cash flows could negatively affect the fair value of our assets and result in a non-cash impairment charge. Some factors considered important that could trigger an impairment review include the following: significant underperformance relative to expected historical or projected future operating results, significant changes in the manner of our use of the acquired assets or the strategy for our overall business and significant negative industry or economic trends.

Allowance for Doubtful Accounts

Our allowance for doubtful accounts reflects reserves for customer receivables to reduce receivables to amounts expected to be collected. Management uses significant judgment in estimating uncollectible amounts. In estimating uncollectible amounts, management considers factors such as current overall economic conditions, industry-specific economic conditions, historical customer performance and anticipated customer performance. While we believe these processes effectively address our exposure for doubtful accounts and credit losses have historically been within expectations, changes in the economy, industry, or specific customer conditions may require adjustments to the allowance for doubtful accounts. During fiscal years 2003, 2004 and 2005, we established new reserves for doubtful accounts of $3.8 million, $2.8 million and $0.3 million, respectively. Additionally, in each of the three fiscal years ended October 29, 2005, we wrote off uncollectible accounts of $1.4 million, $1.7 million and $1.3 million, respectively, all of which had been previously reserved.

Contingencies

We establish reserves for estimated loss contingencies when we believe a loss is probable and the amount of the loss can be reasonably estimated. Our contingent liability reserves are related primarily to litigation (see “             Legal Proceedings”). Revisions to contingent liability reserves are reflected in income in the period in which different facts and circumstances change that affect our previous assumptions with respect to the likelihood or amount of loss. Reserves for contingent liabilities are based upon our assumptions and estimates regarding the probable outcome of the matter. We estimate the probable cost by evaluating historical precedent as well as the specific facts relating to each particular contingency (including the opinion of outside advisors, professionals and experts). Should the outcome differ from our assumptions and estimates or other events result in a material adjustment to the accrued estimated reserves, revisions to the estimated reserves for contingent liabilities would be required and would be recognized in the period the new information becomes known.

RECENT ACCOUNTING PRONOUNCEMENTS

In May 2005, the FASB issued SFAS 154, Accounting Changes and Error Corrections, which requires retrospective application to all prior period financial statements presented for voluntary changes in accounting principle unless it is impracticable. This statement replaces APB 20, Accounting Changes, and SFAS 3, Reporting Accounting Changes in Interim Financial Statements, though it carries forward the guidance in those pronouncements with respect to accounting for changes in estimates, changes in reporting entity and the correction of errors. SFAS 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. We will adopt SFAS 154 effective October 30,

36

2006, the beginning of our fiscal 2007, and we do not expect the adoption of this statement to have an impact on our consolidated financial position, results of operations or cash flows.

In December 2004, the FASB issued SFAS 153, Exchanges of Nonmonetary Assets – An Amendment of APB Opinion No. 29. The APB opinion required that the asset acquired in an exchange transaction be accounted for based on the recorded value of the asset relinquished. The amendment in SFAS 153 states that the asset acquired be accounted for at fair value and should not consider the recorded value of the asset relinquished in the exchange. In addition, the amendments eliminate the narrow exception for nonmonetary exchanges of similar productive assets and replace it with a broader exception for exchanges of nonmonetary assets that do not have “commercial substance.” A nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. The provisions of this statement are effective for nonmonetary exchanges occurring in fiscal periods beginning after June 15, 2005. We will adopt the provisions of this statement effective October 30, 2005, the beginning of our fiscal 2006, and we do not expect the adoption to have an impact on our financial condition, results of operations or cash flows.

In November 2004, the FASB issued SFAS 151, Inventory Costs – An amendment of ARB No. 43, Chapter 4. SFAS 151 clarifies that all abnormal amounts of idle facility expense, freight, handling costs and spoilage should be expensed as incurred and not included in overhead. In addition, this statement requires that allocation of fixed production overheads to conversion cost should be based on normal capacity of the production facilities. The provisions of SFAS 151 are effective for inventory costs incurred during fiscal years beginning after June 15, 2005 and are to be applied on a prospective basis. We will adopt the provisions of this statement effective October 30, 2005, the beginning of our fiscal 2006, and we do not expect the adoption to have an impact on our consolidated financial condition, results of operations or cash flows.

In October 2004, the FASB ratified EITF 04-08, Accounting Issues Related to Certain Features of Contingently Convertible Debt and the Effect on Diluted Earnings Per Share, which is effective for all periods ending after December 15, 2004 and is to be applied by retrospectively restating previously reported earnings per share (“EPS”). EITF 04-08 addresses when the dilutive effect of contingently convertible debt with a market price trigger should be included in diluted EPS. Under EITF 04-08, the market price contingency should be ignored and these securities should be treated as non-contingent, convertible securities and always included in the diluted EPS computation. Notwithstanding the foregoing, if convertible debt has a “net share settlement” provision whereby all conversions are settled for a combination of cash (in an amount equal to the lesser of the principal amount of the notes and their conversion value) and shares, if any (shares are issuable only to the extent the conversion value exceeds the principal amount), then the issuer of such convertible debt is not required to include any shares issuable upon conversion in its calculation of fully diluted EPS until the market price of the underlying common stock exceeds the conversion price. In the event that the market price does exceed the conversion price, then the issuer of the convertible debt is required to use the treasury stock method of accounting for the difference between the market price in the applicable reporting period and the conversion price. The shares required to cover the difference will be included in calculating EPS. We adopted EITF 04-08 in the fiscal quarter ended January 28, 2005.

In November 2004, we completed an offering of $180 million of Notes. Because the Notes have a net share settlement provision, the Notes will be included on an “if converted” basis in the calculation of our fully diluted EPS in future reporting periods where the market price of our common stock is higher than the conversion price at fiscal year-end.

In December 2004, the FASB issued SFAS 123 (revised 2004), Share Based Payment (“SFAS 123(R)”), which is a revision of SFAS 123. SFAS 123(R) supersedes APB 25 and amends SFAS 95, Statement of Cash Flows. While the approach in SFAS 123(R) is similar to the approach described in SFAS 123, SFAS 123(R) requires recognition in the income statement of all share-based payments, including grants of employee stock options, based on their fair values, and pro forma disclosure is no longer an alternative. We are required to adopt SFAS 123(R) in its first fiscal quarter of 2006, which is October 30, 2005.

SFAS 123(R) permits adoption using one of two methods, a modified prospective method (“Prospective Method”) or a modified retrospective method (“Retrospective Method”). With the Prospective Method, costs are recognized beginning with the effective date based on the requirements of SFAS 123(R) for (i) all share-based payments granted after the effective date of SFAS 123(R), and (ii) all awards granted to employees prior to the effective date of SFAS 123(R) that remain unvested on the effective date. The Retrospective Method applies the requirements of the Prospective Method but further permits entities to restate all prior periods presented based on the amounts previously recognized under SFAS 123 for purposes of pro forma disclosures required under SFAS 95. Management expects adoption of SFAS 123(R) to have a significant impact on our results of operations.

We will adopt SFAS 123(R) effective October 30, 2005 using the Prospective Method. To estimate the value of stock options granted to employees, we currently use the Black-Scholes formula, which is an acceptable share-based valuation model, and expect to continue using this model upon adoption of SFAS 123(R). Adoption of SFAS 123(R) using the Prospective Method would have no impact on our consolidated financial position, results of operations or cash flows at the time of adoption. We expect to recognize approximately $6 million to $8 million in total stock based compensation expense

37

in fiscal year 2006. In addition to the compensation cost recognition requirements, SFAS 123(R) also requires the tax deduction benefits for an award in excess of recognized compensation cost be reported as a financing cash flow rather than as an operating cash flow, which is currently required under SFAS 95. Management expects adoption of SFAS 123(R) to have a significant impact on our results of operations but does not expect adoption of this statement to have any effect on our financial position or cash flows.

LEGAL PROCEEDINGS

In late 2003 and early 2004, a number of lawsuits were filed against several of our operating subsidiaries by Bethlehem Steel Corporation (“Bethlehem”) and National Steel Corporation (“National”) in their respective bankruptcy proceedings, seeking reimbursement of preferential transfers allegedly made by the respective debtors in the 90 day period preceding their bankruptcy filings. Bethlehem alleges it made preferential payments to our subsidiaries of approximately $7.7 million, while National claims preferential payments in the aggregate amount of $6.3 million. We have denied the material allegations in the lawsuits and are vigorously defending against these claims. We believe these legal proceedings will not have a material adverse effect on our business, consolidated financial condition or results of operations. Subsequent to the end of fiscal year 2005, we and National agreed to a settlement of any and all claims, whereby National would dismiss the action with prejudice, we would waive our claim in the bankruptcy proceeding, and the parties would exchange mutual releases of liability. The parties announced this settlement to the federal court in December 2005. The parties are preparing the formal settlement and release documents.

We discovered the existence of polychlorinated biphenyls (“PCBs”) and heavy metals at our Metal Prep Houston site, which is located in an industrial area in Houston, Texas. Soil borings have been sampled and analyzed to determine the impact on the soil at this site, and the findings indicate that remediation of the site will likely be necessary. We have filed an application with the Texas Commission of Environmental Quality (“TCEQ”) for entry into the Voluntary Cleanup Program. Based upon an analysis of projected remediation costs of the known contamination, we originally estimated that we would spend and have accrued through fiscal 2004 approximately $2.5 million to remediate this site, which included future environmental consulting fees, oversight expenses and additional testing expenses. In the fourth quarter of fiscal 2005, we reduced our accrual to $1.9 million based upon the finalization of a cost estimate for the proposed remediation work, including excavation, transportation, analysis and disposal. Our Affected Property Assessment Report (“APAR”) has now been approved by the TCEQ, and we are preparing our proposed remedial action that will be filed with TCEQ in early 2006. We expect the cleanup to begin in the second quarter of fiscal 2006 and to be completed by fiscal year ending October 29, 2006. We can give no assurance that actual costs of remediation will not exceed our estimate, perhaps significantly; however, the accrued amount represents our best current-cost estimate based upon the best information available as of the date hereof. We have a contractual indemnity by the immediate prior owner of the property, which we believe obligates that party to reimburse our response costs with respect to this condition. We have brought suit against the prior owner asserting this indemnity, and that party has disputed liability. Further, we have joined in the litigation other potentially responsible parties against whom we are seeking contribution and/or indemnification. However, it is possible that our efforts to obtain reimbursement of our response costs at this site may not be successful or may not prove to be cost-effective for us.

From time to time, we are involved in various other legal proceedings and contingencies considered to be in the ordinary course of business. While we are not able to predict whether we will incur any liability in excess of insurance coverages or to accurately estimate the damages, or the range of damages, if any, we might incur in connection with these legal proceedings, we believe these legal proceedings will not have a material adverse effect on our business, consolidated financial condition or results of operations.

ACQUISITIONS

In December 2004, we purchased substantially all of the operating assets of Heritage and Steelbuilding.com, affiliated companies headquartered in North Little Rock, Arkansas. The purchase price for the two companies was approximately $25.4 million plus assumed liabilities of approximately $2.1 million. The purchase price consisted of $17.2 million in cash, $2.2 million of receivables owed to us by Heritage and Steelbuilding.com at the time of closing and approximately $6.4 million in restricted NCI common stock (199,767 shares). The transaction was accounted for using the purchase method. At the date of purchase, the excess of cost over the fair value of the acquired assets was approximately $14.0 million. The $6.4 million in restricted NCI common stock relates to up to 10-year non-compete agreements with certain of the sellers of Heritage and Steelbuilding.com. We will expense the approximate $6.4 million in restricted stock ratably over the term of the agreements.

In December 2004, we also purchased our joint venture partner’s 49% minority interest in our manufacturing facility in Monterrey, Mexico for approximately $10.0 million in cash. The transaction was accounted for using the purchase method. At the date of purchase, the excess of cost over the fair value of the acquired assets was approximately $7.0 million.

38

Consistent with our growth strategy, we frequently engage in discussions with potential sellers regarding the possible purchase by us of businesses, assets and operations that are strategic and complementary to our existing operations. Such assets and operations include engineered building systems and metal components, but may also include assets that are closely related to, or intertwined with, these business lines, and enable us to leverage our asset base, knowledge base and skill sets. Such acquisition efforts may involve participation by us in processes that have been made public, involve a number of potential buyers and are commonly referred to as “auction” processes, as well as situations in which we believe we are the only party or one of the very limited number of potential buyers in negotiations with the potential seller. These acquisition efforts often involve assets which, if acquired, would have a material effect on our financial condition and results of operations.

MARKET RISK

Steel Prices

We are subject to market risk exposure related to changes in the cost of our raw materials. Steel constituted approximately 74% of our cost of sales in fiscal 2005. Beginning in the second quarter of fiscal 2004, there were unusually rapid and significant pricing increases in the steel industry and severe shortages in the steel industry due in part to increased demand from China’s expanding economy and high energy prices. Supply and prices from the domestic steel manufacturers and available foreign spot purchasers began stabilizing during the fourth fiscal quarter in 2004 and largely stabilized during the second fiscal quarter of 2005. However, since the end of our first fiscal quarter in 2005, scrap steel prices fell from approximately $360 per ton to $140 per ton and then rebounded to approximately $230 per ton at fiscal year end 2005. The steel industry is highly cyclical in nature, and steel prices are influenced by numerous factors beyond our control. These factors include general economic conditions, competition, labor costs, import duties, world-wide demand and other trade restrictions. Furthermore, a prolonged labor strike against one or more of our principal domestic suppliers could have a material adverse effect on our operations. If the available supply of steel declines or if one or more of our current suppliers is unable for financial or any other reasons to continue in business or produce steel sufficient to meet our requirements, we could experience price increases, a deterioration of service from our suppliers or interruptions or delays that may cause us not to meet delivery schedules to our customers. Additionally, in the event of continued rapid steel price increases, we may not be able to pass on such increases or may experience project delays or cancellations, resulting in lower gross margins and resulting profits, particularly in the engineered building systems segment. In a time of rapidly escalating steel prices, this segment is particularly vulnerable to pricing exposure because of longer lead times between quoting a job and shipment, typically two months or more. Additionally, a rapid decline in steel prices could affect our performance. Any of these problems could adversely affect our financial condition and results of operations. With steel accounting for approximately 74% of our cost of sales, a 1% change in the cost of steel would have resulted in an impact of approximately $6.3 million for our fiscal year ended October 29, 2005. The impact to our financial results of operations would be significantly dependent on the competitive environment and the costs of other alternative building products, which could impact our ability to pass on these higher costs.

Interest Rates

We are subject to market risk exposure related to changes in interest rates on our senior credit facility, which includes revolving credit notes and term notes. These instruments bear interest at a pre-agreed upon percentage point spread from either the prime interest rate or LIBOR. Under our senior credit facility, we may, at our option, fix the interest rate for certain borrowings based on a spread over LIBOR for 30 days to six months.

The table below presents scheduled debt maturities and related weighted-average interest rates for each for the fiscal years relating to debt obligations as of October 29, 2005. Weighted-average variable rates are based on LIBOR rates at October 29, 2005, plus applicable margins.

At October 29, 2005 (in millions, except interest rate percentages):

	Scheduled Maturity Date (a)																					Fair Value
	2006			2007			2008			2009			2010			Thereafter			Total			10/29/05
Total Debt
Fixed Rate		—			—			—			—			—		$	180		$	180		$	202
Interest Rate		2.1	%		2.1	%		2.1	%		2.1	%		2.1	%		2.1	%		2.1	%
Variable Rate	$	2		$	2		$	2		$	2		$	185			—		$	193		$	193
Average interest rate		6.3	%		6.3	%		6.3	%		6.3	%		6.3	%		6.3	%		6.3	%

(a) Expected maturity date amounts are based on the face value of debt and do not reflect fair market value of the debt.

At October 29, 2005, we had $193 million outstanding under our senior secured credit facility. Based on this balance, an immediate change of one percent in the interest rate would cause a change in interest expense of approximately $1.9 million on an annual basis. Based on October 30, 2004 outstanding floating rate debt, a one percent change in the interest rate would

39

have caused a change in interest expense of approximately $2.2 million on an annual basis. Our objective in maintaining these variable rate borrowings is the flexibility obtained regarding early repayment without penalties and expected lower overall cost as compared to fixed-rate borrowings. At October 29, 2005, the fair value of our fixed rate debt was approximately $200 million compared to the face value of $180 million. At October 30, 2004, we had no fixed rate debt outstanding.

We may from time to time utilize interest rate swaps to manage overall borrowing costs and reduce exposure to adverse fluctuations in interest rates; however, there were no such swaps outstanding during any of the periods presented herein.

Foreign Currency Exchange Rates

The functional currency for our Mexico operations is the U.S. dollar. Adjustments resulting from the remeasurement of the local currency financial statements into the U.S. dollar functional currency, which uses a combination of current and historical exchange rates, are included in net income in the current period. Foreign currency exchange gains and losses, which have historically not been material, are reflected in income for the period. Net foreign currency exchange losses for fiscal years ended November 1, 2003 and October 30, 2004 were $546,500 and $486,100, respectively. A foreign currency exchange gain of $37,900 was recorded for fiscal year end October 29, 2005.

PRICE RANGE OF COMMON STOCK

Our common stock is listed on the NYSE under the symbol “NCS.” As of January 11, 2006, there were 142 holders of record of our common stock. We have approximately 9,100 beneficial owners. The following table sets forth the quarterly high and low sale prices of our common stock, as reported by the NYSE, for the prior two years. We have never paid dividends on our common stock and have certain restrictions from doing so because of the terms of our senior credit facility.

Fiscal Year 2004	High		Low		Fiscal Year 2005	High		Low
January 31	$	25.95	$	21.75	January 29	$	39.45	$	30.15
April 30	$	32.00	$	22.55	April 30	$	41.95	$	31.59
July 31	$	33.54	$	27.15	July 30	$	39.65	$	31.05
October 30	$	34.75	$	27.25	October 29	$	41.70	$	32.76

40

EX-21.1

Exhibit 21.1

NCI BUILDING SYSTEMS, INC.

List of Subsidiaries

NCI Holding Corp.	Delaware
NCI Operating Corp.	Nevada
Metal Coaters of California, Inc.	Texas
NCI Building Systems, L.P.	Texas
A&S Building Systems, L.P.	Texas
Metal Building Components, L.P.	Texas
NCI Group, L.P.	Texas
Steelbuilding.com, Inc.	Delaware
Building Systems de Mexico, S.A. de C.V.	Mexico

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the Registration Statement (Form S-3 No. 333-122457) of NCI Building Systems, Inc. and in the related Prospectus, and Registration Statements (Forms S-8) pertaining to the NCI Building Systems, Inc. 2003 Long-Term Incentive Plan (333-124266 and 333-111139), the NCI Building Systems, Inc. Nonqualified Stock Option Plan (333-34899 and 333-12921), and the NCI Building Systems, Inc. 401(k) Profit Sharing Plan (333-111142) of our reports dated January 9, 2006, with respect to the consolidated financial statements of NCI Building Systems, Inc., NCI Building Systems, Inc. management’s assessment of the effectiveness of internal control over financial reporting, and the effectiveness of internal control over financial reporting of NCI Building Systems, Inc., included in this Annual Report (Form 10-K) for the year ended October 29, 2005.

/s/ Ernst & Young LLP

Houston, Texas

January 9, 2006

EX-23.2

Exhibit 23.2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders of NCI Building Systems, Inc.

We have audited the accompanying consolidated balance sheets of NCI Building Systems, Inc. (the “Company”) as of October 29, 2005 and October 30, 2004, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the three years in the period ended October 29, 2005. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those 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 management, 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 consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company as of October 29, 2005 and October 30, 2004, and the consolidated results of its operations and its cash flows for each of the three years in the period ended October 29, 2005, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of the Company’s internal control over financial reporting as of October 29, 2005, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated January 9, 2006 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Houston, Texas

January 9, 2006

EX-24.1

Exhibit 24.1

NCI BUILDING SYSTEMS, INC.

Power of Attorney

WHEREAS, NCI BUILDING SYSTEMS, INC., a Delaware corporation (the “Company”), intends to file with the Securities and Exchange Commission (the “Commission”) pursuant to the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder, its Annual Report on Form 10-K, together with any and all exhibits, documents and other instruments and documents necessary, advisable or appropriate in connection therewith, including any amendments thereto (the “Form 10-K”);

NOW, THEREFORE, the undersigned, in his or her capacity as a director or officer or both, as the case may be, of the Company, does hereby appoint A.R. Ginn and Norman C. Chambers, and each of them severally, his or her true and lawful attorney or attorneys with power to act with or without the other, and with full power of substitution and resubstitution, to execute in his or her name, place and stead, in his or her capacity as director, officer or both, as the case may be, of the Company, the Form 10-K and any and all amendments thereto, including any and all exhibits and other instruments and documents said attorney or attorneys shall deem necessary, appropriate or advisable in connection therewith, and to file the same with the Commission and to appear before the Commission in connection with any matter relating thereto. Each of said attorneys shall have full power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act whatsoever necessary or desirable to be done in the premises, as fully and to all intents and purposes as the undersigned might or could do in person, the undersigned hereby ratifying and approving the acts that said attorneys and each of them, or their or his or her substitutes or substitute, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, the undersigned has executed this power of attorney as of this 7th day of December, 2005.

/s/ William D. Breedlove    

William D. Breedlove

NCI BUILDING SYSTEMS, INC.

Power of Attorney

WHEREAS, NCI BUILDING SYSTEMS, INC., a Delaware corporation (the “Company”), intends to file with the Securities and Exchange Commission (the “Commission”) pursuant to the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder, its Annual Report on Form 10-K, together with any and all exhibits, documents and other instruments and documents necessary, advisable or appropriate in connection therewith, including any amendments thereto (the “Form 10-K”);

NOW, THEREFORE, the undersigned, in his or her capacity as a director or officer or both, as the case may be, of the Company, does hereby appoint A.R. Ginn and Norman C. Chambers, and each of them severally, his or her true and lawful attorney or attorneys with power to act with or without the other, and with full power of substitution and resubstitution, to execute in his or her name, place and stead, in his or her capacity as director, officer or both, as the case may be, of the Company, the Form 10-K and any and all amendments thereto, including any and all exhibits and other instruments and documents said attorney or attorneys shall deem necessary, appropriate or advisable in connection therewith, and to file the same with the Commission and to appear before the Commission in connection with any matter relating thereto. Each of said attorneys shall have full power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act whatsoever necessary or desirable to be done in the premises, as fully and to all intents and purposes as the undersigned might or could do in person, the undersigned hereby ratifying and approving the acts that said attorneys and each of them, or their or his or her substitutes or substitute, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, the undersigned has executed this power of attorney as of this 7th day of December, 2005.

/s/ Gary L. Forbes    

Gary L. Forbes

NCI BUILDING SYSTEMS, INC.

Power of Attorney

WHEREAS, NCI BUILDING SYSTEMS, INC., a Delaware corporation (the “Company”), intends to file with the Securities and Exchange Commission (the “Commission”) pursuant to the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder, its Annual Report on Form 10-K, together with any and all exhibits, documents and other instruments and documents necessary, advisable or appropriate in connection therewith, including any amendments thereto (the “Form 10-K”);

NOW, THEREFORE, the undersigned, in his or her capacity as a director or officer or both, as the case may be, of the Company, does hereby appoint A.R. Ginn and Norman C. Chambers, and each of them severally, his or her true and lawful attorney or attorneys with power to act with or without the other, and with full power of substitution and resubstitution, to execute in his or her name, place and stead, in his or her capacity as director, officer or both, as the case may be, of the Company, the Form 10-K and any and all amendments thereto, including any and all exhibits and other instruments and documents said attorney or attorneys shall deem necessary, appropriate or advisable in connection therewith, and to file the same with the Commission and to appear before the Commission in connection with any matter relating thereto. Each of said attorneys shall have full power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act whatsoever necessary or desirable to be done in the premises, as fully and to all intents and purposes as the undersigned might or could do in person, the undersigned hereby ratifying and approving the acts that said attorneys and each of them, or their or his or her substitutes or substitute, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, the undersigned has executed this power of attorney as of this 7th day of December, 2005.

/s/ Philip J. Hawk    

Philip J. Hawk

NCI BUILDING SYSTEMS, INC.

Power of Attorney

WHEREAS, NCI BUILDING SYSTEMS, INC., a Delaware corporation (the “Company”), intends to file with the Securities and Exchange Commission (the “Commission”) pursuant to the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder, its Annual Report on Form 10-K, together with any and all exhibits, documents and other instruments and documents necessary, advisable or appropriate in connection therewith, including any amendments thereto (the “Form 10-K”);

NOW, THEREFORE, the undersigned, in his or her capacity as a director or officer or both, as the case may be, of the Company, does hereby appoint A.R. Ginn and Norman C. Chambers, and each of them severally, his or her true and lawful attorney or attorneys with power to act with or without the other, and with full power of substitution and resubstitution, to execute in his or her name, place and stead, in his or her capacity as director, officer or both, as the case may be, of the Company, the Form 10-K and any and all amendments thereto, including any and all exhibits and other instruments and documents said attorney or attorneys shall deem necessary, appropriate or advisable in connection therewith, and to file the same with the Commission and to appear before the Commission in connection with any matter relating thereto. Each of said attorneys shall have full power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act whatsoever necessary or desirable to be done in the premises, as fully and to all intents and purposes as the undersigned might or could do in person, the undersigned hereby ratifying and approving the acts that said attorneys and each of them, or their or his or her substitutes or substitute, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, the undersigned has executed this power of attorney as of this 7th day of December, 2005.

/s/ Max L. Lukens    

Max L. Lukens

NCI BUILDING SYSTEMS, INC.

Power of Attorney

WHEREAS, NCI BUILDING SYSTEMS, INC., a Delaware corporation (the “Company”), intends to file with the Securities and Exchange Commission (the “Commission”) pursuant to the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder, its Annual Report on Form 10-K, together with any and all exhibits, documents and other instruments and documents necessary, advisable or appropriate in connection therewith, including any amendments thereto (the “Form 10-K”);

NOW, THEREFORE, the undersigned, in his or her capacity as a director or officer or both, as the case may be, of the Company, does hereby appoint A.R. Ginn and Norman C. Chambers, and each of them severally, his or her true and lawful attorney or attorneys with power to act with or without the other, and with full power of substitution and resubstitution, to execute in his or her name, place and stead, in his or her capacity as director, officer or both, as the case may be, of the Company, the Form 10-K and any and all amendments thereto, including any and all exhibits and other instruments and documents said attorney or attorneys shall deem necessary, appropriate or advisable in connection therewith, and to file the same with the Commission and to appear before the Commission in connection with any matter relating thereto. Each of said attorneys shall have full power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act whatsoever necessary or desirable to be done in the premises, as fully and to all intents and purposes as the undersigned might or could do in person, the undersigned hereby ratifying and approving the acts that said attorneys and each of them, or their or his or her substitutes or substitute, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, the undersigned has executed this power of attorney as of this 7th day of December, 2005.

/s/ George Martinez    

George Martinez

NCI BUILDING SYSTEMS, INC.

Power of Attorney

WHEREAS, NCI BUILDING SYSTEMS, INC., a Delaware corporation (the “Company”), intends to file with the Securities and Exchange Commission (the “Commission”) pursuant to the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder, its Annual Report on Form 10-K, together with any and all exhibits, documents and other instruments and documents necessary, advisable or appropriate in connection therewith, including any amendments thereto (the “Form 10-K”);

NOW, THEREFORE, the undersigned, in his or her capacity as a director or officer or both, as the case may be, of the Company, does hereby appoint A.R. Ginn and Norman C. Chambers, and each of them severally, his or her true and lawful attorney or attorneys with power to act with or without the other, and with full power of substitution and resubstitution, to execute in his or her name, place and stead, in his or her capacity as director, officer or both, as the case may be, of the Company, the Form 10-K and any and all amendments thereto, including any and all exhibits and other instruments and documents said attorney or attorneys shall deem necessary, appropriate or advisable in connection therewith, and to file the same with the Commission and to appear before the Commission in connection with any matter relating thereto. Each of said attorneys shall have full power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act whatsoever necessary or desirable to be done in the premises, as fully and to all intents and purposes as the undersigned might or could do in person, the undersigned hereby ratifying and approving the acts that said attorneys and each of them, or their or his or her substitutes or substitute, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, the undersigned has executed this power of attorney as of this 7th day of December, 2005.

/s/ W. B. Pieper    

W. B. Pieper

NCI BUILDING SYSTEMS, INC.

Power of Attorney

WHEREAS, NCI BUILDING SYSTEMS, INC., a Delaware corporation (the “Company”), intends to file with the Securities and Exchange Commission (the “Commission”) pursuant to the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder, its Annual Report on Form 10-K, together with any and all exhibits, documents and other instruments and documents necessary, advisable or appropriate in connection therewith, including any amendments thereto (the “Form 10-K”);

NOW, THEREFORE, the undersigned, in his or her capacity as a director or officer or both, as the case may be, of the Company, does hereby appoint A.R. Ginn and Norman C. Chambers, and each of them severally, his or her true and lawful attorney or attorneys with power to act with or without the other, and with full power of substitution and resubstitution, to execute in his or her name, place and stead, in his or her capacity as director, officer or both, as the case may be, of the Company, the Form 10-K and any and all amendments thereto, including any and all exhibits and other instruments and documents said attorney or attorneys shall deem necessary, appropriate or advisable in connection therewith, and to file the same with the Commission and to appear before the Commission in connection with any matter relating thereto. Each of said attorneys shall have full power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act whatsoever necessary or desirable to be done in the premises, as fully and to all intents and purposes as the undersigned might or could do in person, the undersigned hereby ratifying and approving the acts that said attorneys and each of them, or their or his or her substitutes or substitute, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, the undersigned has executed this power of attorney as of this 7th day of December, 2005.

/s/ John K. Sterling

John K. Sterling

EX-31.1

Exhibit 31.1

RULE 13a-14(a)/15d-14(a) CERTIFICATIONS

I, A. R. Ginn, certify that

1. I have reviewed this annual report on Form 10-K of NCI Building Systems, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: January 10, 2006

/s/ A. R. Ginn

A. R. Ginn

Chairman of the Board and

Chief Executive Officer

EX-31.2

Exhibit 31.2

RULE 13a-14(a)/15d-14(a) CERTIFICATIONS

I, Frances R. Powell, certify that:

1. I have reviewed this annual report on Form 10-K of NCI Building Systems, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: January 10, 2006

/s/ Frances R. Powell

Frances  R. Powell

Executive Vice President,  Chief  Financial

Officer and  Treasurer

EX-32.1

Exhibit 32.1

CERTIFICATIONS PURSUANT TO SECTION 1350

OF CHAPTER 63 OF TITLE 18 OF THE UNITED STATES CODE

I, A. R. Ginn, certify that:

1. I have reviewed this periodic report on Form 10-K of NCI Building Systems, Inc.;

2. This report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

3. The information contained in this report fairly presents, in all material respects, the financial condition and results of operations of NCI Building Systems, Inc.

Date: January 10, 2006

/s/ A. R. Ginn

A. R. Ginn

Chairman of the Board and

Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to NCI Building Systems, Inc. and will be retained by NCI Building Systems, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

These Certifications shall not be deemed to be “filed” or part of the Report or incorporated by reference into any of the registrant’s filings with the Securities and Exchange Commission by implication or by any reference in any such filing to the Report.

EX-32.2

Exhibit 32.2

CERTIFICATIONS PURSUANT TO SECTION 1350

OF CHAPTER 63 OF TITLE 18 OF THE UNITED STATES CODE

I, Frances R. Powell, certify that:

1. I have reviewed this annual report on Form 10-K of NCI Building Systems, Inc.;

2. This report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

3. The information contained in this report fairly presents, in all material respects, the financial condition and results of operations of NCI Building Systems, Inc.

Date: January 10, 2006

/s/ Frances R. Powell

Frances R. Powell

Executive Vice President, Chief Financial

Officer and Treasurer

A signed original of this written statement required by Section 906 has been provided to NCI Building Systems, Inc. and will be retained by NCI Building Systems, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

These Certifications shall not be deemed to be “filed” or part of the Report or incorporated by reference into any of the registrant’s filings with the Securities and Exchange Commission by implication or by any reference in any such filing to the Report.