EX-99.1 2 l39658exv99w1.htm EX-99.1 exv99w1
         
Exhibit 99.1
For Immediate Release
May 5, 2010
GIBRALTAR REPORTS IMPROVED FIRST-QUARTER RESULTS
  •   On 9% Higher Sequential Sales, Operating Margin Improves
 
  •   Debt Reduced by Another $50 Million, or 19%
 
  •   Expecting Continued Favorable Comparisons for Sales and Profitability
          BUFFALO, NEW YORK (May 5, 2010) — Gibraltar Industries, Inc. (NASDAQ: ROCK), a leading manufacturer and distributor of products for building markets, today reported its financial results for the quarter ended March 31, 2010. As announced on February 1, 2010, Gibraltar completed its exit from the steel-processing business by selling the majority of the assets of its Processed Metal Products segment. The operating results of this business were reclassified to discontinued operations in the financial results being reported.
          Sales from continuing operations in the first quarter of 2010 were $158 million, a 9% sequential improvement from the fourth quarter, but a decrease of 5% compared to the first quarter of 2009, as inclement weather slowed our sales volume and demand levels in the end markets we serve remained well below historical levels. The Company also reported a smaller loss from continuing operations before special charges of $1.4 million in the first quarter of 2010, or $0.05 per diluted share, compared to a loss from continuing operations before special charges for the first quarter of 2009 of $5.8 million, or $0.19 per diluted share. After-tax special charges amounted to $0.9 million, or $0.03 per diluted share, and $15.2 million, or $0.51 per diluted share, during the first quarters of 2010 and 2009, respectively. These charges included intangible asset impairment and restructuring charges recognized during both periods and accelerated interest expense of $0.9 million recognized during the first quarter of 2010. The combined effect of the items above resulted in a GAAP loss from continuing operations of $2.3 million, or $0.08 per diluted share, in the first quarter of 2010 compared to a GAAP loss of $21.0 million, or $0.70 per diluted share, in the first quarter of 2009. Refer to the Non-GAAP reconciliations attached to the earnings release for more details.
          “Our first-quarter results demonstrate the significant progress we have made executing our strategic plan, as our aggressive cost-cutting and restructuring activities improved our operating efficiency and lowered our breakeven point. Compared to the first quarter of 2009, operating income before special charges rose $10.3 million despite a decrease in sales of $9 million. Sequentially, operating income before special items rose $4.1 million on a $13 million increase in sales. Pre-tax special items included $0.1 million of additional operating income for the first quarter of 2010, $34.7 million of charges for the fourth quarter of 2009, and $25.8 million of charges for the first quarter of 2009 related to intangible asset impairment adjustments and restructuring charges for all periods. Due to our continuing operating efficiencies, plus the proceeds from selling the Processed Metal Products business in the first quarter of 2010, we continued to de-lever our balance sheet. The Company’s debt was reduced by $50 million, or 19%, leaving us with no outstanding draws on our revolver, liquidity approximating $127 million, and a debt-to-capitalization ratio of 29%,” said Brian J. Lipke, Gibraltar’s Chairman and Chief Executive Officer.
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Gibraltar Reports Improved First-Quarter Results
Page Two
          “While our focus is still on maximizing cash and closely managing expenses, we will also continue to concentrate on growth as our end markets show more signs of a sustainable recovery, an operating environment that we hope will continue to improve during 2010. The volatility and uncertainty of the last two years and the need to focus on cash conservation necessitated a conservative approach toward growth. We did, however, continue to work on many growth initiatives, including new products and markets, geographic expansion, and new business initiatives. As markets stabilize, we will find ourselves well positioned to deliver on our growth and performance objectives,” said Henning N. Kornbrekke, Gibraltar’s President and Chief Operating Officer.
          “The structural changes we implemented have clearly helped our financial performance in the short run, even though many of our efficiency gains have been masked by the unprecedented volume declines in our end markets. More importantly, these structural changes are a significant part of our long-term strategy to position Gibraltar for profitable growth, margin improvement, and enhanced stockholder returns over time,” added Mr. Lipke.
          As part of its restructuring efforts, Gibraltar sold the majority of the manufacturing assets in its non-core Processed Metal Products segment on February 1, 2010. This transaction finalized Gibraltar’s exit from its steel-processing business and positions the Company to be solely focused on the manufacturing and distribution of products for building markets. In these markets, Gibraltar has strong leadership positions with the products it supplies and the value-added component is substantially higher than that of the divested steel-processing business, enhancing Gibraltar’s ability to grow and generate higher and more consistent margins.
          “With the majority of our restructuring activities and costs behind us — and in light of starting 2010 with higher levels of operating efficiency, improved business processes, more automated systems, and better inventory cost-to-pricing alignment, as well as a stronger balance sheet, less debt, and improved liquidity — we fully expect that 2010 will be a better year than 2009 for Gibraltar. As we move into the strongest seasonal periods for our business, together with the expected improvements in our end markets, we are anticipating a return to profitability in the second quarter and for the full year,” said Mr. Kornbrekke.
          Gibraltar has scheduled a conference call to review its results for the first quarter of 2010 tomorrow, May 6, 2010, starting at 9:00 am ET. A link to the call can be accessed on Gibraltar’s Web site, at http://www.gibraltar1.com. The presentation slides that will be discussed during the call are expected to be available on Wednesday, May 5, by 6:00 p.m. ET. The slides may be downloaded from the Conference Calls page of the Investor Info section of the Gibraltar Web site: http://www.gibraltar1.com/investors/index.cfm?page=48. If you are not able to participate in the call, you may listen to a replay or review a copy of the prepared remarks via the link above. Both will be available on the Gibraltar Web site shortly following the call. The conference call replay link, presentation slides, and prepared remarks will remain on the Gibraltar Web site for one year.
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Gibraltar Reports Improved First-Quarter Results
Page Three
          Gibraltar Industries serves customers in a variety of industries in all 50 states and throughout the world from facilities in the United States, Canada, England, Germany, and Poland. Gibraltar’s common stock is a component of the S&P SmallCap 600 and the Russell 2000® Index.
          To supplement Gibraltar’s consolidated financial statements presented on a GAAP basis, Gibraltar also presented certain non-GAAP financial data in this news release. Non-GAAP financial data excluded special charges consisting of intangible asset impairment charges, exit-activity costs and related asset impairment charges primarily associated with the closing and consolidation of our facilities, and interest expense costs recognized as a result of our interest rate swap becoming ineffective. These non-GAAP adjustments are shown in the non-GAAP reconciliation of results excluding special charges provided in the financial statements that accompany this news release. We believe that presentation of results excluding special charges provides meaningful supplemental data to investors, as well as management, that is indicative of the Company’s core operating results and facilitates comparison of operating results across reporting periods as well as comparison with other companies. Special charges are excluded since they may not be considered directly related to our ongoing business operations. These non-GAAP measures should not be viewed as a substitute for our GAAP results, and may be different than non-GAAP measures used by other companies.
          Information contained in this release, other than historical information, contains forward-looking statements and may be subject to a number of risk factors, uncertainties, and assumptions. Risk factors that could affect these statements include, but are not limited to, the following: the availability of raw materials and the effects of changing raw material prices on the Company’s results of operations; energy prices and usage; changing demand for the Company’s products and services; changes in the liquidity of the capital and credit markets; risks associated with the integration of acquisitions; and changes in interest or tax rates. In addition, such forward-looking statements could also be affected by general industry and market conditions, as well as general economic and political conditions. The Company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable law or regulation.

—30—

CONTACT: Kenneth P. Houseknecht, Investor Relations, at 716/826-6500, ext. 3229, khouseknecht@gibraltar1.com.

 

GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
                 
    Three Months Ended  
    March 31,  
    2010     2009  
Net sales
   $ 157,528     $ 166,339  
Cost of sales
     128,113       147,737  
 
            
Gross profit
     29,415       18,602  
Selling, general, and administrative expense
     27,013       26,637  
Intangible asset impairment (adjustment)
     (177 )     25,501  
 
            
Income (loss) from operations
     2,579       (33,536 )
Interest expense
     (7,051 )     (5,241 )
Equity in partnership’s income (loss) and other income
     71       (19 )
 
            
Loss before taxes
     (4,401 )     (38,796 )
Benefit of income taxes
     (2,085 )     (17,770 )
 
            
Loss from continuing operations
     (2,316 )     (21,026 )
Discontinued operations:
                
Loss before taxes
     (29,998 )     (10,462 )
Benefit of income taxes
     (11,083 )     (3,872 )
 
            
Loss from discontinued operations
     (18,915 )     (6,590 )
 
            
 
                
Net loss
   $ (21,231 )   $ (27,616 )
 
            
 
                
Net loss per share — Basic:
                
Loss from continuing operations
   $ (0.08 )   $ (0.70 )
Loss from discontinued operations
     (0.62 )     (0.22 )
 
            
Net loss
   $ (0.70 )   $ (0.92 )
 
            
Weighted average shares outstanding — Basic
     30,261       30,080  
 
            
 
                
Net loss per share — Diluted:
                
Loss from continuing operations
   $ (0.08 )   $ (0.70 )
Loss from discontinued operations
     (0.62 )     (0.22 )
 
            
Net loss
   $ (0.70 )   $ (0.92 )
 
            
Weighted average shares outstanding — Diluted
     30,261       30,080  
 
            

 

 

GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
(unaudited)
                 
    March 31,     December 31,  
    2010     2009  
Assets
                
Current assets:
                
Cash and cash equivalents
   $ 19,799     $ 23,596  
Accounts receivable, net of reserve of $3,769 and $3,853 in 2010 and 2009, respectively
     90,310       71,782  
Inventories
     94,532       86,296  
Other current assets
     26,300       25,513  
Assets of discontinued operations
     6,474       44,938  
 
            
Total current assets
     237,415       252,125  
 
Property, plant and equipment, net
     171,777       174,704  
Goodwill
     392,023       392,704  
Acquired intangibles
     80,608       82,182  
Investment in partnership
     —       2,474  
Other assets
     17,596       17,811  
Assets of discontinued operations
     —       52,942  
 
            
 
   $ 899,419     $ 974,942  
 
            
 
Liabilities and Shareholders’ Equity
                
Current liabilities:
                
Accounts payable
   $ 69,447     $ 47,383  
Accrued expenses
     36,890       38,757  
Current maturities of long-term debt
     408       408  
Liabilities of discontinued operations
     6,672       22,468  
 
            
Total current liabilities
     113,417       109,016  
 
Long-term debt
     206,953       256,874  
Deferred income taxes
     52,519       51,818  
Other non-current liabilities
     19,295       16,791  
Liabilities of discontinued operations
     —       12,217  
Shareholders’ equity:
                
Preferred stock, $0.01 par value; authorized: 10,000,000 shares; none outstanding
     —       —  
Common stock, $0.01 par value; authorized 50,000,000 shares; 30,455,608 and 30,295,084 shares issued and outstanding at March 31, 2010 and December 31, 2009, respectively
     305       303  
Additional paid-in capital
     229,145       227,362  
Retained earnings
     282,751       303,982  
Accumulated other comprehensive loss
     (2,784 )     (2,230 )
Cost of 209,875 and 150,903 common shares held in treasury at March 31, 2010 and December 31, 2009, respectively
     (2,182 )     (1,191 )
 
            
Total shareholders’ equity
     507,235       528,226  
 
            
 
   $ 899,419     $ 974,942  
 
            

 

 

GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
                 
    Three Months Ended  
    March 31,  
    2010     2009  
Cash Flows from Operating Activities
                
Net loss
   $ (21,231 )   $ (27,616 )
Loss from discontinued operations
     (18,915 )     (6,590 )
 
            
Loss from continuing operations
     (2,316 )     (21,026 )
Adjustments to reconcile net loss to net cash provided by operating activities:
                
Depreciation and amortization
     6,722       6,508  
Intangible asset impairment (adjustment)
     (177 )     25,501  
Provision for deferred income taxes
     125       (10,416 )
Equity in partnership’s (income) loss
     (43 )     80  
Stock compensation expense
     1,679       1,462  
Non-cash charges to interest expense
     2,407       521  
Other non-cash adjustments
     260       248  
Increase (decrease) in cash resulting from changes in:
                
Accounts receivable
     (18,594 )     3,276  
Inventories
     (8,850 )     26,739  
Other current assets and other assets
     (1,872 )     (11,220 )
Accounts payable
     22,149       (5,783 )
Accrued expenses and other non-current liabilities
     2,526       (2,918 )
 
            
Net cash provided by operating activities from continuing operations
     4,016       12,972  
Net cash provided by operating activities from discontinued operations
     14,818       16,636  
 
            
Net cash provided by operating activities
     18,834       29,608  
 
            
 
                
Cash Flows from Investing Activities
                
Additional consideration for acquisitions
     —       (59 )
Net proceeds from sale of business
     30,100       —  
Purchases of property, plant, and equipment
     (1,519 )     (3,274 )
Net proceeds from sale of property and equipment
     9       185  
 
            
Net cash provided by (used in) investing activities for continuing operations
     28,590       (3,148 )
Net cash used in investing activities for discontinued operations
     (288 )     (136 )
 
            
Net cash provided by (used in) investing activities
     28,302       (3,284 )
 
            
 
                
Cash Flows from Financing Activities
                
Long-term debt payments
     (50,000 )     (39,061 )
Proceeds from long-term debt
     —       12,074  
Payment of dividends
     —       (1,499 )
Purchase of treasury stock at market prices
     (991 )     (399 )
Payment of deferred financing fees
     (48 )     —  
Tax benefit from equity compensation
     106       (215 )
 
            
Net cash used in financing activities
     (50,933 )     (29,100 )
 
            
 
                
Net decrease in cash and cash equivalents
     (3,797 )     (2,776 )
 
                
Cash and cash equivalents at beginning of year
     23,596       11,308  
 
            
 
                
Cash and cash equivalents at end of period
   $ 19,799     $ 8,532  
 
            

 

 

GIBRALTAR INDUSTRIES, INC.
Non-GAAP Reconciliation of Results Excluding Special Charges
(unaudited)
(in thousands, except per share data)
                                         
    Three Months Ended March 31, 2010  
            Intangible                      
    As     Asset             Impairment     Results  
    Reported     Impairment     Ineffective     And Exit     Excluding  
    In GAAP Statements     Adjustment     Interest Rate Swap     Activity Costs     Special Charges  
Net sales
   $ 157,528     $ —     $ —     $ —     $ 157,528  
Cost of sales
     128,113       —       —       (47 )     128,066  
 
                              
Gross profit
     29,415       —       —       47       29,462  
Selling, general, and administrative expense
     27,013       —       —       (81 )     26,932  
Intangible asset impairment adjustment
     (177 )     177       —       —       —  
 
                              
Income from operations
     2,579       (177 )     —       128       2,530  
Operating margin
     1.6 %     (0.1 )%     0.0 %     0.1 %     1.6 %
 
                                        
Interest expense
     (7,051 )     —       1,424       —       (5,627 )
Equity in partnership’s income and other income
     71       —       —       —       71  
 
                              
Loss before income taxes
     (4,401 )     (177 )     1,424       128       (3,026 )
Benefit of income taxes
     (2,085 )     (73 )     520       53       (1,585 )
 
                              
Loss from continuing operations
   $ (2,316 )   $ (104 )   $ 904     $ 75     $ (1,441 )
 
                              
Loss from continuing operations per share — diluted
   $ (0.08 )   $ (0.00 )   $ 0.03     $ 0.00     $ (0.05 )
 
                              
                                                 
    Three Months Ended March 31, 2009  
                            Intangible              
    As Previously     Discontinued     As     Asset     Impairment     Results  
    Reported     Operations     Reported     Impairment     And Exit     Excluding  
    In GAAP Statements     Restatement     In GAAP Statements     Adjustment     Activity Costs     Special Charges  
Net sales
   $ 204,843     $ (38,504 )   $ 166,339     $ —     $ —     $ 166,339  
Cost of sales
     191,830       (44,093 )     147,737       —       (204 )     147,533  
 
                                    
Gross profit
     13,013       5,589       18,602       —       204       18,806  
Selling, general, and administrative expense
     30,680       (4,043 )     26,637       —       (68 )     26,569  
Intangible asset impairment
     25,501       —       25,501       (25,501 )     —       —  
 
                                    
Loss from operations
     (43,168 )     9,632       (33,536 )     25,501       272       (7,763 )
Operating margin
     (21.1 )%     0.9 %     (20.2 )%     15.3 %     0.2 %     (4.7 )%
 
Interest expense
     (5,967 )     726       (5,241 )     —       —       (5,241 )
Equity in partnership’s (loss) and other income
     (19 )     —       (19 )     —       —       (19 )
 
                                    
Loss before income taxes
     (49,154 )     10,358       (38,796 )     25,501       272       (13,023 )
Benefit of income taxes
     (21,602 )     3,832       (17,770 )     10,416       125       (7,229 )
 
                                    
Loss from continuing operations
   $ (27,552 )   $ 6,526     $ (21,026 )   $ 15,085     $ 147     $ (5,794 )
 
                                    
Loss from continuing operations per share — diluted
   $ (0.92 )   $ 0.22     $ (0.70 )   $ 0.50     $ 0.01     $ (0.19 )
 
                                    

 

 

GIBRALTAR INDUSTRIES, INC.
Non-GAAP Reconciliation of Results Excluding Special Charges
(unaudited)
(in thousands, except per share data)
                                         
    Three Months Ended June 30, 2009  
    As Previously     Discontinued     As     Impairment     Results  
    Reported     Operations     Reported     And Exit     Excluding  
    In GAAP Statements     Restatement     In GAAP Statements     Activity Costs     Special Charges  
Net sales
   $ 217,055     $ (26,253 )   $ 190,802     $ —     $ 190,802  
Cost of sales
     179,604       (26,752 )     152,852       (376 )     152,476  
 
                              
Gross profit
     37,451       499       37,950       376       38,326  
Selling, general, and administrative expense
     27,156       (3,129 )     24,027       —       24,027  
 
                              
Income from operations
     10,295       3,628       13,923       376       14,299  
Operating margin
     4.7 %     2.6 %     7.3 %     0.2 %     7.5 %
 
Interest expense
     (5,779 )     635       (5,144 )     —       (5,144 )
Equity in partnership’s income and other income
     126       —       126       —       126  
 
                              
Income before income taxes
     4,642       4,263       8,905       376       9,281  
Provision for income taxes
     5,226       1,578       6,804       286       7,090  
 
                              
(Loss) income from continuing operations
   $ (584 )   $ 2,685     $ 2,101     $ 90     $ 2,191  
 
                              
(Loss) income from continuing operations per share — diluted
   $ (0.02 )   $ 0.09     $ 0.07     $ 0.00     $ 0.07  
 
                              
                                                 
    Three Months Ended September 30, 2009  
    As Previously     Discontinued     As             Impairment     Results  
    Reported     Operations     Reported     Deferred     And Exit     Excluding  
    In GAAP Statements     Restatement     In GAAP Statements     Financing Costs     Activity Costs     Special Charges  
Net sales
   $ 225,152     $ (34,632 )   $ 190,520     $ —     $ —     $ 190,520  
Cost of sales
     178,732       (32,929 )     145,803       —       (1,125 )     144,678  
 
                                    
Gross profit
     46,420       (1,703 )     44,717       —       1,125       45,842  
Selling, general, and administrative expense
     31,565       (5,128 )     26,437       (379 )     (695 )     25,363  
 
                                    
Income from operations
     14,855       3,425       18,280       379       1,820       20,479  
Operating margin
     6.6 %     3.0 %     9.6 %     0.2 %     0.9 %     10.7 %
 
Interest expense
     (7,863 )     813       (7,050 )     1,154       —       (5,896 )
Equity in partnership’s income and other income
     56       —       56       —       —       56  
 
                                    
Income before income taxes
     7,048       4,238       11,286       1,533       1,820       14,639  
Provision for income taxes
     2,100       1,568       3,668       498       592       4,758  
 
                                    
Income from continuing operations
   $ 4,948     $ 2,670     $ 7,618     $ 1,035     $ 1,228     $ 9,881  
 
                                    
Income from continuing operations per share — diluted
   $ 0.16     $ 0.09     $ 0.25     $ 0.04     $ 0.04     $ 0.33  
 
                                    

 

 

GIBRALTAR INDUSTRIES, INC.
Non-GAAP Reconciliation of Results Excluding Special Charges
(unaudited)
(in thousands, except per share data)
                                                         
    Three Months Ended December 31, 2009  
    As Previously     Discontinued     As                     Impairment     Results  
    Reported     Operations     Reported     Intangible     Deferred     And Exit     Excluding  
    In GAAP Statements     Restatement     In GAAP Statements     Asset Impairment     Financing Costs     Activity Costs     Special Charges  
Net sales
   $ 187,168     $ (43,058 )   $ 144,110     $ —     $ —     $ —     $ 144,110  
Cost of sales
     159,073       (44,063 )     115,010       —       —       —       115,010  
 
                                          
Gross profit
     28,095       1,005       29,100       —       —       —       29,100  
Selling, general, and administrative expense
     27,514       3,349       30,863       —       —       (117 )     30,746  
Intangible asset impairment
     34,597       —       34,597       (34,597 )     —       —       —  
 
                                          
Loss from operations
     (34,016 )     (2,344 )     (36,360 )     34,597       —       117       (1,646 )
Operating margin
     (18.2 )%     (7.0 )%     (25.2 )%     24.0 %     0.0 %     0.1 %     (1.1 )%
 
Interest expense
     (6,306 )     633       (5,673 )     —       270       —       (5,403 )
Equity in partnership’s income and other income
     153       —       153       —       —       —       153  
 
                                          
Loss before income taxes
     (40,169 )     (1,711 )     (41,880 )     34,597       270       117       (6,896 )
Benefit from income taxes
     (11,485 )     (633 )     (12,118 )     9,245       106       46       (2,721 )
 
                                          
Loss from continuing operations
   $ (28,684 )   $ (1,078 )   $ (29,762 )   $ 25,352     $ 164     $ 71     $ (4,175 )
 
                                          
Loss from continuing operations per share — diluted
   $ (0.95 )   $ (0.04 )   $ (0.99 )   $ 0.84     $ 0.01     $ 0.00     $ (0.14 )
 
                                          
                                                         
    Year Ended December 31, 2009  
    As Previously     Discontinued     As                     Impairment     Results  
    Reported     Operations     Reported     Intangible     Deferred     And Exit     Excluding  
    In GAAP Statements     Restatement     In GAAP Statements     Asset Impairment     Financing Costs     Activity Costs     Special Charges  
Net sales
   $ 834,218     $ (142,447 )   $ 691,771     $ —     $ —     $ —     $ 691,771  
Cost of sales
     709,239       (147,837 )     561,402       —       —       (1,705 )     559,697  
 
                                          
Gross profit
     124,979       5,390       130,369       —       —       1,705       132,074  
Selling, general, and administrative expense
     116,915       (8,951 )     107,964       —       (379 )     (880 )     106,705  
Intangible asset impairment
     60,098       —       60,098       (60,098 )     —       —       —  
 
                                          
(Loss) income from operations
     (52,034 )     14,341       (37,693 )     60,098       379       2,585       25,369  
Operating margin
     (6.2 )%     0.8 %     (5.4 )%     8.7 %     0.1 %     0.3 %     3.7 %
 
Interest expense
     (25,915 )     2,807       (23,108 )     —       1,424       —       (21,684 )
Equity in partnership’s income and other income
     316       —       316       —       —       —       316  
 
                                          
(Loss) income before income taxes
     (77,633 )     17,148       (60,485 )     60,098       1,803       2,585       4,001  
(Benefit from) provision for income taxes
     (25,761 )     6,345       (19,416 )     19,661       604       1,049       1,898  
 
                                          
(Loss) income from continuing operations
   $ (51,872 )   $ 10,803     $ (41,069 )   $ 40,437     $ 1,199     $ 1,536     $ 2,103  
 
                                          
(Loss) income from continuing operations per share — diluted
   $ (1.72 )   $ 0.36     $ (1.36 )   $ 1.34     $ 0.04     $ 0.05     $ 0.07