EX-99.1 2 l24611aexv99w1.htm EX-99.1 EX-99.1
 

(GIBRALTER INDUSTRIES LOGO)
Exhibit 99.1
Immediate Release
February 7, 2007
GIBRALTAR REPORTS BEST-EVER SALES AND EARNINGS FOR 2006
Annual Sales from Continuing Operations of $1.3 Billion are Up 26 Percent;
EPS from Continuing Operations was $1.66, Up 32 Percent
     BUFFALO, NEW YORK (February 7, 2007) — Gibraltar Industries, Inc. (NASDAQ: ROCK) today reported its sales and net income for the quarter and year ended December 31, 2006.
     Income from continuing operations was $49.9 million, or $1.66 per share, in 2006, compared to 2005 income from continuing operations of $37.5 million, or $1.26 per share, an increase of 33 percent. These results represent the best-ever earnings in Gibraltar’s history.
     “Even though business slowed sharply in two of our major markets (residential building and automotive) during the last half of the year, we still generated record sales and earnings in 2006. As we have become a larger, stronger, and increasingly diverse company — selling more products to more customers in more markets — we have strengthened our resiliency and we are better able to produce consistent and improving results in spite of difficult conditions in some of our major markets,” said Brian J. Lipke, Gibraltar’s Chairman and Chief Executive Officer.
     Sales from continuing operations in the fourth quarter of 2006 were $292 million, a decrease of approximately three percent compared to $300 million in the fourth quarter of 2005. Sales from continuing operations of $1.303 billion in 2006 increased by approximately 26 percent compared to $1.037 billion in 2005.
     Net income in the fourth quarter of 2006, including impairment charges, was $1.6 million, or $.05 per share. Income from continuing operations in the fourth quarter of 2006 was $.27 per share before the impairment charge described below, in line with our pre-announced guidance $.25 to $.27 per share. During the quarter, the Company took an impairment charge of $8.0 million net of tax, or $.27 per share, to write off the investment in its 50 percent joint venture with Duferco Farrell LLC, and recorded a benefit of $.08 per share arising from a companywide alignment in vacation policy.
     “We continued the strategic transformation of Gibraltar in 2006,” said Henning N. Kornbrekke, Gibraltar’s President and Chief Operating Officer. “We successfully integrated the largest acquisition in our history (AMICO, which was completed in October 2005), made three additional acquisitions (including our first in Europe), sold two non-core businesses (our Thermal Processing segment and our steel strapping business) and used the proceeds to pay down debt, continued to consolidate and extract efficiencies from our existing operations, and shifted an even larger share of our sales to those niche markets where we have a leadership position. Today, more than 80 percent of our sales come from products where we have a leading market share. We have a leadership position in several niche segments of very large and fragmented markets that offer considerable growth opportunities.”
—more—
(LETTERHEAD)

 


 

Gibraltar Reports Best-Ever Sales and Earnings in 2006
Page Two
     “As we look ahead to 2007, we have a number of initiatives underway to further improve our operating performance and continue to grow the company in spite of a difficult operating environment, which we think will persist in the early part of the year, with conditions improving as the year progresses. We see continued strength in the commercial and industrial building markets, areas we have targeted for growth, and we have identified many other growth opportunities, with our existing operations and through acquisitions, both in North America and internationally,” said Mr. Lipke.
     Looking ahead to the first quarter, Mr. Kornbrekke said, “Some of the issues that impacted us in the fourth quarter seem to be abating. A number of our customers in major market segments have worked through a significant portion of their inventory overhang and should begin the replenishment cycle. Additionally, there are a number of leading indicators showing that the housing cycle may have bottomed. We expect sequential improvement from the fourth quarter of 2006 to the first quarter of 2007. We expect conditions in the markets we serve to begin improving as we move into the second quarter which is historically the Company’s strongest period.”
     Barring a significant change in business conditions, the Company expects first-quarter earnings per share from continuing operations will be in a range of $.23 to $.27 per share.
     Gibraltar Industries is a leading manufacturer, processor, and distributor of primarily metals for the building, industrial, and vehicular markets. The company serves a large number of customers in a variety of industries in all 50 states and throughout the world. It has approximately 3,500 employees and operates 77 facilities in 26 states, Canada, China, England, Germany, and Poland.
     Information contained in this release, other than historical information, should be considered forward-looking, and may be subject to a number of risk factors, including: general economic conditions; the impact of the availability and the effects of changing raw material prices on the Company’s results of operations; energy prices and usage; the ability to pass through cost increases to customers; changing demand for the Company’s products and services; risks associated with the integration of acquisitions; and changes in interest or tax rates.
—30—
Gibraltar will review its fourth-quarter results and discuss its outlook for the first quarter during its quarterly conference call, which will be held at 9 a.m. Eastern Time on February 8. Details of the call can be found on Gibraltar’s Web site, at http://www.gibraltar1.com.
CONTACT: Kenneth P. Houseknecht, Vice President of Communications and Investor Relations, at 716/826-6500, khouseknecht@gibraltar1.com.
Gibraltar’s news releases, along with comprehensive information about the Company, are available on the Internet, at http://www.gibraltar1.com.

 


 

Gibraltar Reports Best-Ever Sales and Earnings in 2006
Page Three
GIBRALTAR INDUSTRIES, INC.
Financial Highlights
(in thousands, except per share data)
                 
    Three Months Ended  
    December 31,     December 31,  
    2006     2005  
 
               
Net Sales
  $ 291,826     $ 299,660  
Income from continuing operations
  $ 31     $ 5,020  
Income from discontinued operations
  $ 1,532     $ 376  
 
           
Net Income
  $ 1,563     $ 5,396  
Net income per share — diluted
               
Income from continuing operations
  $     $ .17  
Income from discontinued operations
  $ .05     $ .01  
 
           
Net income
  $ .05     $ .18  
 
           
 
               
Reconciliation of income per share — diluted from continuing operations to reflect special items:
               
Income from continuing operations before adjustments
  $ .19     $ .36  
Adjustments
  $ .08     $ (.19 )
 
           
Income from continuing operations prior to impairment charge
  $ .27     $ .17  
Impairment charge
  $ (.27 )   $  
 
           
Income from continuing operations
  $     $ .17  
 
           
                 
    Twelve Months Ended  
    December 31,     December 31,  
    2006     2005  
Net Sales
  $ 1,303,355     $ 1,036,823  
Income from continuing operations
  $ 49,854     $ 37,497  
Income from discontinued operations
  $ 7,415     $ 5,975  
 
           
Net Income
  $ 57,269     $ 43,472  
Net income per share — diluted
               
Income from continuing operations
  $ 1.66     $ 1.26  
Income from discontinued operations
  $ .25     $ .20  
 
           
Net income
  $ 1.91     $ 1.46  
 
           

 


 

GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
                 
    December 31,  
    2006     2005  
Assets
               
Current assets:
               
Cash and cash equivalents
  $ 13,475     $ 28,529  
Accounts receivable
    169,207       162,300  
Inventories
    254,991       189,988  
Other current assets
    17,841       19,666  
Assets of discontinued operations
    266       23,521  
 
           
Total current assets
    455,780       424,004  
Property, plant and equipment, net
    243,138       229,644  
Goodwill
    374,821       360,663  
Investments in partnerships
    2,440       6,151  
Other assets
    76,689       55,099  
Assets of discontinued operations
          129,451  
 
           
 
  $ 1,152,868     $ 1,205,012  
 
           
Liabilities and Shareholders’ Equity
               
Current liabilities:
               
Accounts payable
  $ 71,308     $ 83,266  
Accrued expenses
    50,771       59,289  
Current maturities of long-term debt
    2,336       2,331  
Current maturities of related party debt
          5,833  
Liabilities of discontinued operations
          6,529  
 
           
Total current liabilities
    124,415       157,248  
 
               
Long-term debt
    398,217       453,349  
Long-term related party debt
           
Deferred income taxes
    70,981       90,942  
Other non-current liabilities
    9,027       6,038  
Liabilities of discontinued operations
          3,410  
Shareholders’ equity:
               
Preferred stock $.01 par value; authorized:10,000,000 shares; none outstanding
           
Common stock, $.01 par value; authorized 50,000,000 shares; issued 29,883,795 and 29,734,686 shares in 2006 and 2005, respectively
    299       298  
Additional paid-in capital
    215,944       216,897  
Retained earnings
    332,920       280,116  
Unearned compensation
          (5,153 )
Accumulated other comprehensive income
    1,065       1,867  
 
           
 
    550,228       494,025  
Less: cost of 42,600 and 41,100 common shares held in treasury in 2006 and 2005, respectively
           
 
           
Total shareholders’ equity
    550,228       494,025  
 
           
 
  $ 1,152,868     $ 1,205,012  
 
           

 


 

GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
                                 
    Three Months Ended     Twelve Months Ended  
    December 31,     December 31,  
    2006     2005     2006     2005  
 
                               
Net sales
  $ 291,826     $ 299,660     $ 1,303,355     $ 1,036,823  
 
                               
Cost of sales
    240,237       247,315       1,041,459       845,059  
 
                       
 
                               
Gross profit
    51,589       52,345       261,896       191,764  
 
                               
Selling, general and administrative expense
    31,123       33,064       141,592       110,671  
 
                       
 
                               
Income from operations
    20,466       19,281       120,304       81,093  
 
                               
Other (income) expense
                               
Interest expense
    7,022       11,786       27,324       20,609  
Equity in partnerships’ loss (income) and other income
    13,490       (735 )     13,045       (266 )
 
                       
 
                               
Total other expense
    20,512       11,051       40,369       20,343  
 
                       
 
                               
Income before taxes
    (46 )     8,230       79,935       60,750  
 
                               
Provision for income taxes
    (77 )     3,210       30,081       23,253  
 
                       
 
                               
Income from continuing operations
    31       5,020       49,854       37,497  
 
                               
Discontinued operations
                               
Income (loss) from discontinued operations before taxes
    (185 )     616       9,273       9,795  
Income tax expense (benefit)
    (1,717 )     240       1,858       3,820  
 
                       
Income from discontinued operations
    1,532       376       7,415       5,975  
 
                               
Net income
  $ 1,563     $ 5,396     $ 57,269     $ 43,472  
 
                       
 
                               
Net income per share — Basic
                               
Income from continuing operations
  $ .00     $ .17     $ 1.68     $ 1.27  
Income from discontinued operations
    .05       .01       .25       .20  
 
                       
Net income
  $ .05     $ .18     $ 1.93     $ 1.47  
 
                       
 
                               
Weighted average shares outstanding — Basic
    29,772       29,634       29,712       29,608  
 
                       
 
                               
Net income per share — Diluted
                               
Income from continuing operations
  $ .00     $ .17     $ 1.66     $ 1.26  
Income from discontinued operations
    .05       .01       .25       .20  
 
                       
Net income
  $ .05     $ .18     $ 1.91     $ 1.46  
 
                       
Weighted average shares outstanding — Diluted
    30,040       29,866       30,006       29,810  
 
                       

 


 

GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
                 
    Year Ended December 31,  
    2006     2005  
Cash flows from operating activities
               
Net income
  $ 57,269     $ 43,472  
Income from discontinued operations
    7,415       5,975  
 
           
Income from continuing operations
    49,854       37,497  
Adjustment to reconcile net income to net cash provided by (used in) operating activities
               
Depreciation and amortization
    27,319       20,531  
Provision for deferred income taxes
    (20 )     (2,468 )
Equity in partnerships’ loss (income)
    13,884       908  
Distributions from partnerships’ income
    1,149       1,152  
Tax benefit from exercise of stock options
    2,912       281  
Unearned compensation
            1,504  
Other non-cash adjustments
    750       74  
Increase (decrease) in cash resulting from changes in (net of acquisitions):
               
Accounts receivable
    3,822       8,324  
Inventories
    (55,055 )     43,157  
Other current assets
    1,416       852  
Accounts payable and accrued expenses
    (61,391 )     7,983  
Other assets
    (5,298 )     (1,279 )
 
           
Net cash provided by (used in) continuing operations
    (20,658 )     117,516  
Net cash (used in) provided by discontinued operations
    7,634       13,483  
 
           
 
               
Net cash provided by (used in) operating activities
    (13,024 )     130,999  
 
           
 
               
Cash flows from investing activities
               
Acquisitions, net of cash acquired
    (57,430 )     (271,031 )
Net proceeds from sale of business
    151,487       42,594  
Purchases of property, plant and equipment
    (22,265 )     (17,481 )
Net proceeds from sale of property and equipment
    349       592  
 
           
Net cash used in investing activities for continuing operations
    72,141       (245,326 )
Net cash used in investing activities for discontinued operations
    (3,189 )     (4,938 )
 
           
 
               
Net cash used in investing activities
    68,952       (250,264 )
 
           
 
               
Cash flows from financing activities
               
Long-term debt reduction
    (114,875 )     (643,298 )
Proceeds from long-term debt
    50,829       796,568  
Payment of deferred financing costs
    (653 )     (10,844 )
Net proceeds from issuance of common stock
    1,174       817  
Payment of dividends
    (5,957 )     (5,941 )
 
           
 
               
Net cash provided by financing activities for continuing operations
    (69,482 )     137,302  
Net cash provided by financing activities for discontinued operations
    (1,500 )     (400 )
 
           
Net cash provided by financing activities
    (70,982 )     136,902  
 
           
Net increase (decrease) in cash and cash equivalents
    (15,054 )     17,637  
 
               
Cash and cash equivalents at beginning of year
    28,529       10,892  
 
           
Cash and cash equivalents at end of year
  $ 13,475     $ 28,529  
 
           

 


 

GIBRALTAR INDUSTRIES, INC.
Segment Information
(in thousands)
                                 
    Three Months Ended December 31,  
                    Increase (Decrease)  
    2006     2005     $     %  
 
                               
Net Sales
                               
Building Products
  $ 192,488     $ 204,445     $ (11,957 )     -5.8 %
Processed Metals
    99,338       95,215       4,123       4.3 %
 
                         
 
  $ 291,826     $ 299,660     $ (7,834 )     -2.6 %
 
                               
Operating Margin
                               
Building Products
  $ 21,667     $ 25,394     $ (3,727 )     -14.7 %
Processed Metals
    4,766       2,722       2,044       75.1 %
Corporate
    (5,967 )     (8,835 )     2,868       -32.5 %
 
                         
 
  $ 20,466     $ 19,281     $ 1,185       6.1 %
 
                               
Building Products
    11.3 %     12.4 %                
Processed Metals
    4.8 %     2.9 %                
                                 
    Twelve Months Ended December 31,  
                    Increase (Decrease)  
    2006     2005     $     %  
 
                               
Net Sales
                               
Building Products
  $ 872,639     $ 615,386     $ 257,253       41.8 %
Processed Metals
    430,716       421,437       9,279       2.2 %
 
                         
 
  $ 1,303,355     $ 1,036,823     $ 266,532       25.7 %
 
                               
Operating Margin
                               
Building Products
  $ 128,121     $ 81,324     $ 46,797       57.5 %
Processed Metals
    26,098       27,529       (1,431 )     -5.2 %
Corporate
    (33,915 )     (27,760 )     (6,155 )     22.2 %
 
                         
 
  $ 120,304     $ 81,093     $ 39,211       48.4 %
 
                               
Building Products
    14.7 %     13.2 %                
Processed Metals
    6.1 %     6.5 %