It looks like reports of the revival of the non-residential construction market might be a bit premature. While large-scale operators like Washington Group (NASDAQ:WGII), Shaw (NYSE:SGR), and Perini (NYSE:PCR) are seeing some recovery in demand for big projects, the smaller-scale side of the business isn't quite there yet. As a result, NCI BuildingSystems (NYSE:NCS), a maker of metal building systems and components, isn't forecasting an especially strong fourth quarter.

Third-quarter results weren't particularly scintillating. Sales were down about 1%, and net income (adjusting for a year-ago charge) was only up about 3.5%. Simply put, the demand just wasn't there for the company's products in this quarter, and backlog increased only about 4%.

That said, the company's performance needs to be viewed in context. Looking at the square footage of new projects in the company's target market, results were down over 8% for through July. In dollar value terms, the market has dropped about 4%. By comparison, NCI's revenue for those two quarters has only dropped about 1.5%.

Forward guidance is likely what really spooked the market, as management slashed the fourth-quarter estimate by about 20%. I'm not that worried, though. NCI does have a sizable debt position, but it also has ample coverage of those interest payments. What's more, the cash flow situation is still appealing. Last but not least, the company believes it's the leading player in the market and at least twice as large as its closest competitor.

I hate to speak of the devastation in Louisiana, Mississippi, and Alabama in a positive light, but I do believe it's going to help the construction segment. It will take months or years for the damage to be cleared away and insurance payments to come through, but sooner or later there will be a rebuilding boom in that region. That spells demand for tools, machinery, and supplies, and I think NCI will see plenty of orders in the quarters to come.

I know I've spoken in the past of the dangers of buying into companies that disappoint (mainly, that they're more likely than average to disappoint again), but I'm going to be digging deeper into this company. Relative to its cash flow and future prospects, I think it just might meet my standards for "too cheap."

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Finally, all of us here at The Motley Fool would like to express our sincere sympathies to those with loved ones and friends affected by Hurricane Katrina. Our thoughts and prayers are with you. The following organizations are front and center helping with the hurricane relief effort and can use your donations:

Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).