EX-99.1 2 l28611aexv99w1.htm EX-99.1 EX-99.1
 

Exhibit 99.1
For Immediate Release
November 1, 2007
GIBRALTAR REPORTS THIRD-QUARTER SALES AND EARNINGS
Income from Continuing Operations Before One-Time Charges is $.43 Per Share
     BUFFALO, NEW YORK (October 31, 2007) — Gibraltar Industries, Inc. (NASDAQ: ROCK) today reported sales from continuing operations in the third quarter of 2007 were $343 million, an increase of approximately eight percent compared to $318 million in the third quarter of 2006. For the first nine months of 2007, sales from continuing operations were up by approximately five percent to $1 billion, compared to $956 million in the first nine months of 2006. Net sales, excluding acquisitions, were down eight percent for the quarter and seven percent year to date, driven by the soft residential building market. Acquisitions added approximately 15 percent to net sales in the quarter.
     Income from continuing operations before one-time charges was $12.8 million, or $.43 per share, in the third quarter of 2007, compared to $18.2 million, or $.61 per share, in the third quarter of 2006. In the first nine months of 2007, income from continuing operations before one-time charges was $35.8 million, or $1.19 per share, compared to $50.0 million, or $1.67 per share, in the first nine months of 2006. The decline in income from continuing operations was in line with the lower unit volume and mix changes and was partly offset by Gibraltar’s aggressive programs to streamline its operations.
     Reported third-quarter income from continuing operations of $11.4 million, or $.38 per share, was negatively impacted by two nonrecurring items including a four hundred thousand ($0.4 million), $.01 per share net of tax, restructuring charge related to the consolidation of the Company’s strip steel facilities and $1.8 million, $.04 per share, in acquisition-related purchase accounting adjustments resulting from the write-up of inventories acquired in the Noll/NorWesCo and Florence transactions from their historic cost basis to fair market value. The expensing of these inventory adjustments will be completed in October and impact fourth-quarter results by $.01 per share. Reported income from continuing operations for the first nine months of 2007 is $31.4 million, or $1.04 per share.
     The cost of the planned sale of Hubbell Steel assets amounted to a pre-tax charge of $13.9 million. The Company also incurred $2.9 million in pre-tax costs associated with the sale of its Solar Michigan operation. These charges have been recorded in the third quarter and have been reflected in the results from discontinued operations. The results from Hubbell’s and Solar Michigan’s business operations have been reflected in the results for discontinued operations for all periods presented.
     “We generated third-quarter sales and earnings that were within our expectations, even though conditions in our two largest markets, residential housing and automotive, remained challenging during the quarter. More importantly, we continue to strategically transform Gibraltar through acquisitions, divestitures, and the streamlining of our existing businesses, all of which positions us for significantly improved results as the markets we serve improve and volumes return to more normalized levels,” said Brian J. Lipke, Gibraltar’s Chairman and Chief Executive Officer.
—more—

 

 

Gibraltar Reports Third-Quarter Sales and Earnings
Page Two
     “During the third quarter, we completed the acquisition of Florence Corporation, a leader in the storage and postal products market. Earlier this month, we announced the sale of the assets of Hubbell Steel, a business that was not meeting our performance targets. We also made more progress with the consolidation of our facilities, with eight locations closed or consolidated thus far in 2007 and we are looking to close or consolidate additional locations. All of these actions will improve our operating characteristics, enhancing our ability to deliver stronger and more consistent results,” said Henning N. Kornbrekke, Gibraltar’s President and Chief Operating Officer.
     “Our participation in the commercial building and industrial markets, our operations in Europe and Asia, and our recent acquisitions are helping to offset the slowdown in the residential building and automotive markets. Even in the new-build housing market, which is down 27 percent compared to first nine months of 2006, our core building products sales have decreased by approximately ten percent, which indicates that we are expanding our market share in an extremely difficult operating environment. We are also continuing to focus on operational excellence, cost reductions, and the further streamlining of our operations,” said Mr. Kornbrekke.
     In light of the operating environment discussed above, Mr. Kornbrekke said that, barring a significant change in business conditions, Gibraltar expects its fourth-quarter earnings per share from continuing operations before any one-time items will be in the range of $.12 to $.16, compared to $.20 in the fourth quarter of 2006.
     Gibraltar Industries is a leading manufacturer, processor, and distributor of products for the building, industrial, and vehicular markets. The company serves customers in a variety of industries in all 50 states and throughout the world. It has approximately 4,100 employees and operates 84 facilities in 27 states, Canada, China, England, Germany, and Poland. Gibraltar’s common stock is a component of the S&P SmallCap 600 and the Russell 2000® Index.
     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 third-quarter results and discuss its outlook for the fourth quarter during its quarterly conference call, which will be held at 9 a.m. Eastern Time on November 1. 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 Third-Quarter Sales and Earnings
Page Three
GIBRALTAR INDUSTRIES, INC.
Financial Highlights
(in thousands, except per share data)
                 
    Three Months Ended  
    September 30, 2007     September 30, 2006  
 
                
Net Sales
   $ 342,570     $ 318,442  
Income from Continuing Operations
   $ 11,367     $ 18,230  
Income Per Share from Continuing Operations —Basic
   $ .38     $ .61  
Weighted Average Shares Outstanding — Basic
     29,873       29,747  
Income Per Share from Continuing Operations — Diluted
   $ .38     $ .61  
Weighted Average Shares Outstanding — Diluted
     30,147       30,040  
 
                
Reconciliation of income per share — diluted from continuing operations to reflect special items:
                
Income from continuing operation before adjustments
   $ .43     $ .61  
Adjustments:
                
Restructuring charges
   $ (.01 )   $ —  
Purchased inventory markup
   $ (.04 )   $ —  
 
            
Income from continuing operations
   $ .38     $ .61  
                 
    Nine Months Ended  
    September 30, 2007     September 30, 2006  
 
                
Net Sales
   $ 1,003,116     $ 955,971  
Income from Continuing Operations
   $ 31,436     $ 49,999  
Income Per Share from Continuing Operations — Basic
   $ 1.05     $ 1.68  
Weighted Average Shares Outstanding — Basic
     29,847       29,691  
Income Per Share from Continuing Operations — Diluted
   $ 1.04     $ 1.67  
Weighted Average Shares Outstanding — Diluted
     30,103       29,993  
 
                
Reconciliation of income per share — diluted from continuing operations to reflect special items:
                
Income from continuing operation before adjustments
   $ 1.19     $ 1.67  
Adjustments:
                
Restructuring charges
   $ (.05 )   $ —  
Purchased inventory markup
   $ (.07 )   $ —  
Abandoned M & A transaction
   $ (.03 )   $ —  
 
            
Income from continuing operations
   $ 1.04     $ 1.67  

 

 

GIBRALTAR INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
                 
    September 30,     December 31,  
    2007     2006  
    (unaudited)  
Assets
                
 
                
Current assets:
                
Cash and cash equivalents
   $ 32,725     $ 13,475  
Accounts receivable, net
     209,481       163,731  
Inventories
     229,133       220,119  
Other current assets
     20,101       18,099  
Assets of discontinued operations
     17,311       40,356  
 
            
Total current assets
     508,751       455,780  
 
                
Property, plant and equipment, net
     260,553       233,249  
Goodwill
     501,034       366,763  
Acquired intangibles
     60,505       62,366  
Investments in partnerships
     2,616       2,440  
Other assets
     14,588       14,307  
Assets of discontinued operations
     6,330       17,963  
 
            
 
   $ 1,354,377     $ 1,152,868  
 
            
 
                
Liabilities and Shareholders’ Equity
                
 
                
Current liabilities:
                
Accounts payable
   $ 92,949     $ 69,040  
Accrued expenses
     48,932       50,279  
Current maturities of long-term debt
     2,964       2,336  
Liabilities of discontinued operations
     2,540       2,760  
 
            
Total current liabilities
     147,385       124,415  
 
                
Long-term debt
     550,670       398,217  
Deferred income taxes
     72,746       70,981  
Other non-current liabilities
     14,837       9,027  
Liabilities of discontinued operations
     15       —  
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 29,949,229 and 29,883,795 shares in 2007 and 2006, respectively
     300       299  
Additional paid-in capital
     218,122       215,944  
Retained earnings
     340,749       332,920  
Accumulated other comprehensive income
     9,946       1,065  
 
            
 
     569,117       550,228  
Less: cost of 62,967 and 42,600 common shares held in treasury in 2007 and 2006
     (393 )     —  
 
            
Total shareholders’ equity
     568,724       550,228  
 
            
 
   $ 1,354,377     $ 1,152,868  
 
            

 

GIBRALTAR INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(in thousands)
                                 
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2007     2006     2007     2006  
Net sales
   $ 342,570     $ 318,442     $ 1,003,116     $ 955,971  
 
                                
Cost of sales
     278,796       250,224       821,539       749,695  
 
                                
 
                        
Gross profit
     63,774       68,218       181,577       206,276  
 
                                
Selling, general and administrative expense
     38,409       32,619       110,029       107,199  
 
                                
 
                        
Income from operations
     25,365       35,599       71,548       99,077  
 
                                
Other (income) expense:
                                
Equity in partnerships’ loss (income) and other income
     (356 )     103       (1,023 )     (445 )
Interest expense
     8,372       6,056       23,063       19,272  
 
                        
Total other expense
     8,016       6,159       22,040       18,827  
 
                                
Income before taxes
     17,349       29,440       49,508       80,250  
 
                                
Provision for income taxes
     5,982       11,210       18,072       30,251  
 
                        
Income from continuing operations
     11,367       18,230       31,436       49,999  
 
                                
Discontinued operations:
                                
Income from discontinued operations before taxes
     (18,590 )     (388 )     (21,733 )     9,189  
Income tax expense
     (3,679 )     (154 )     (4,847 )     3,482  
 
                        
Income from discontinued operations
     (14,911 )     (234 )     (16,886 )     5,707  
 
                                
Net income
   $ (3,544 )   $ 17,996     $ 14,550     $ 55,706  
 
                        
 
                                
Net income per share — Basic:
                                
Income from continuing operations
   $ .38     $ .61     $ 1.05     $ 1.68  
Income from discontinued operations
     (.50 )     (.01 )     (.56 )     .19  
 
                        
Net income
   $ (.12 )   $ .60     $ .49     $ 1.87  
 
                        
 
                                
Weighted average shares outstanding — Basic
     29,873       29,747       29,874       29,691  
 
                        
 
                                
Net income per share — Diluted:
     .38       .61       1.04       1.67  
Income from continuing operations
     (.50 )     (.01 )     (.56 )     .19  
 
                        
Income from discontinued operations Net income
   $ (.12 )   $ .60     $ .48     $ 1.86  
 
                        
 
                                
Weighted average shares outstanding — Diluted
     29,966       30,040       30,043       29,993  
 
                        

 

GIBRALTAR INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
                 
    Nine Months Ended  
    September 30,  
    2007     2006  
Cash flows from operating activities
                
Net income
   $ 14,550     $ 55,706  
Income from discontinued operations
     (16,886 )     5,707  
 
            
Income from continuing operations
     31,436       49,999  
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
                
Depreciation and amortization
     23,789       19,430  
Provision for deferred income taxes
     797       —  
Equity in partnerships’ loss (income) and other income
     (778 )     400  
Distributions from partnerships
     603       909  
Stock compensation expense
     2,042       2,192  
Other noncash adjustments
     163       782  
Increase (decrease) in cash resulting from changes in (net of acquisitions and dispositions):
                
Accounts receivable
     (22,360 )     (34,213 )
Inventories
     27,701       (50,741 )
Other current assets and other assets
     3,782       2,375  
Accounts payable
     13,650       11,254  
Accrued expenses and other non-current liabilities
     (2,962 )     (18,120 )
 
            
 
                
Net cash provided by (used in) continuing operations
     77,863       (15,733 )
Net cash provided by (used in) discontinued operations
     15,923       (8,429 )
 
            
Net cash provided by (used in) provided by operating activities
     93,786       (24,162 )
 
            
 
                
Cash flows from investing activities
                
Acquisitions, net of cash acquired
     (203,980 )     (13,206 )
Purchases of property, plant and equipment
     (15,148 )     (16,943 )
Net proceeds from sale of property and equipment
     3,125       388  
Net proceeds from sale of business
     1,677       151,511  
 
            
 
                
Net cash (used in) provided by investing activities from continuing operations
     (214,326 )     121,750  
Net cash used in investing activities for discontinued operations
     (69 )     (3,433 )
 
            
Net cash (used in) provided by investing activities
     (214,395 )     118,317  
 
            
 
                
Cash flows from financing activities
                
Long-term debt reduction
     (2,128 )     (114,292 )
Proceeds from long-term debt
     147,768       9,604  
Payment of deferred financing costs
     (1,440 )     (569 )
Payment of dividends
     (4,477 )     (4,464 )
Net proceeds from issuance of common stock
     136       1,174  
Tax benefit from stock options
     —       167  
 
              
 
                
Net cash provided by (used in) financing activities from continuing operations
     139,859       (108,380 )
Net cash used in financing activities for discontinued operations
     —       (1,500 )
 
            
Net cash provided by (used in) financing activities
     139,859       (109,880 )
 
                
Net increase in cash and cash equivalents
     19,250       (15,725 )
 
                
Cash and cash equivalents at beginning of year
     13,475       28,529  
 
            
 
                
Cash and cash equivalents at end of period
   $ 32,725     $ 12,804  
 
            

 

GIBRALTAR INDUSTRIES, INC.
Segment Information
(Unaudited)
(in thousands)
                                 
    Three Months Ended September 30,        
                    Increase (Decrease)  
    2007     2006     $     %  
Net Sales
                                
Building products
   $ 247,175     $ 223,711     $ 23,464       10.5 %
Processed metal products
     95,395       94,731       664       0.7 %
 
                          
 
                                
Total Sales
     342,570       318,442       24,128       7.6 %
 
                                
Income from Operations
                                
Building products
   $ 28,497     $ 34,511     $ (6,014 )     (17.4 )%
Processed metal products
     5,540       7,187       (1,647 )     (22.9 )%
Corporate
     (8,672 )     (6,099 )     (2,573 )     42.2 %
 
                          
 
                                
Total Income from Operations
   $ 25,365     $ 35,599       (10,234 )     (28.7 )%
 
                                
Operating Margin
                                
Building products
     11.5 %     15.4 %                
Processed metal products
     5.8 %     7.6 %                
                                 
    Nine Months Ended September 30,        
                    Increase (Decrease)  
    2007     2006     $     %  
Net Sales
                                
Building products
   $ 710,522     $ 672,064     $ 38,458       5.7 %
Processed metal products
     292,594       283,907       8,687       3.1 %
 
                          
 
                                
Total Sales
     1,003,116       955,971       47,145       4.9 %
 
                                
Income from Operations
                                
Building products
   $ 78,382     $ 106,163     $ (27,781 )     (26.2 )%
Processed metal products
     16,089       20,862       (4,773 )     (22.9 )%
Corporate
     (22,923 )     (27,948 )     5,025       (18.0 )%
 
                          
 
                                
Total Income from Operations
   $ 71,548     $ 99,077     $ (27,529 )     (27.8 )%
 
                                
Operating Margin
                                
Building products
     11.0 %     15.8 %                
Processed metal products
     5.5 %     7.3 %