EX-99.1 2 l30232aexv99w1.htm EX-99.1 EX-99.1
 

EXHIBIT 99.1
(GIBRALTAR INDUSTRIES LOGO)
For Immediate Release
February 18, 2008
GIBRALTAR REPORTS 2007 SALES AND EARNINGS
Sales Increased by 6% to $1.3 Billion;
Income from Continuing Operations Before Special Charges Was $36 Million
     BUFFALO, NEW YORK (February 18, 2008) – Gibraltar Industries, Inc. (NASDAQ: ROCK) today reported its sales and net income for the quarter and year ended December 31, 2007.
     In 2007, sales from continuing operations increased by approximately six percent to $1.3 billion, from $1.2 billion in 2006. Income from continuing operations before special charges was $36.0 million, or $1.19 per share, in 2007. Reported income from continuing operations was $31.1 million, or $1.03 per share, in 2007, compared to 2006 income from continuing operations of $50.1 million, or $1.67 per share.
     Sales from continuing operations in the fourth quarter of 2007 were $309 million, an increase of approximately 11 percent compared to $278 million in the fourth quarter of 2006. The 2007 sales increase in both the annual and quarterly periods was the result of acquired businesses. Exclusive of acquisitions, sales decreased by approximately five percent when compared to the fourth quarter of 2006 and six percent on an annual basis.
     Exclusive of the items referred to below, fourth-quarter results from continuing operations amounted to $1.1 million, or $.03 per share. Quarterly results were negatively impacted by several income tax-related charges including a higher-than-projected tax rate for the year. As pre-tax income fell below levels projected at the end of the third quarter, the impact of permanent differences between book and taxable income caused an increase in the effective tax rate used in the quarter. The result of the tax adjustments reduced earnings by $.03 per share. Fourth-quarter income from continuing operations was also negatively impacted by inventory purchase accounting adjustments from the Noll/NorWesCo and Florence acquisitions. The impact of expensing these charges on a pre-tax basis amounted to approximately $0.7 million, or $.01 per share after tax. Reported fourth-quarter results from continuing operations, after the effect of these items, was a loss of $0.3 million, or ($.01) per share. In 2006 fourth-quarter income from continuing operations was a profit of $.01 per share.
     “We initiated a number of actions in 2007 that will provide positive momentum in the year ahead,” said Brian J. Lipke, Gibraltar’s Chairman and Chief Executive Officer. “We acquired three companies – Dramex, Noll/NorWesCo, and Florence – which together added annualized sales of approximately $160 million of higher-margin sales, while further diversifying our portfolio by increasing our participation in the still-growing commercial and industrial building markets. We also divested businesses, like our Hubbell service center and a small bath cabinet line, and we will continue to focus our resources and capital on those areas that provide the best strategic fit and produce the highest returns for our shareholders.”
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(NASDAQ:ROCK LOGO)

 

 

Gibraltar Reports 2007 Sales and Earnings
Page Two
     “In 2007, we took a number of steps to improve our operations, drive out costs, intensify our focus on asset management, and maximize our cash flow to pay down debt. Through facility consolidations (we have closed or consolidated 11 facilities since the beginning of 2007), improvements in our transportation and logistics, and ongoing cost reduction and lean manufacturing initiatives, we are significantly lowering our cost structure. We also have a number of initiatives underway to increase our share in targeted growth areas through new products, geographic expansion, and leveraging relationships with current customers,” said Henning N. Kornbrekke, Gibraltar’s President and Chief Operating Officer.
     “Unfortunately, much of the progress we made in 2007 – through acquisitions, divestitures, improvements to our remaining businesses, and active asset and working capital management – has been obscured by lower volumes and adverse changes to our mix, which are solely the result of the sharp downturn in our two largest markets. Even though it is not fully apparent in this operating environment, our many activities to strengthen and strategically transform Gibraltar have better positioned the Company for new thresholds of performance as the markets we serve return to more normal levels of activity,” said Mr. Lipke.
     “Even if difficult conditions do persist in our two primary markets – and our 2008 business forecast anticipates some additional softening in both the residential building and automotive markets – we see opportunities for improvement in the year ahead simply as a result of the stronger business platform we have built. Longer term, the actions we have taken have positioned us for significantly improved results once the markets we serve rebound and begin to move back toward more historic activity levels,” said Mr. Kornbrekke.
     Looking ahead, Mr. Kornbrekke said that, in spite of current market conditions, Gibraltar’s ongoing efforts to make improvements in its business, along with many customers having worked through their year-end de-stocking actions, the Company expects its 2008 earnings per share from continuing operations will be in the range of $1.05 to $1.25 per share, compared to $1.03 in 2007, barring a significant change in business conditions.
     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 4,000 employees and operates 78 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.
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Gibraltar Reports 2007 Sales and Earnings
Page Three
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. on February 19. 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 2007 Sales and Earnings
Page Four
GIBRALTAR INDUSTRIES, INC.
Financial Highlights
(in thousands, except per share data)
                 
    Three Months Ended  
    December 31,     December 31,  
    2007     2006  
Net Sales
   $ 308,702     $ 277,605  
(Loss) income from continuing operations
   $ (332 )   $ 175  
(Loss) income from discontinued operations
   $ (994 )   $ 1,388  
 
            
Net Income
   $ (1,326 )   $ 1,563  
Net income per share — diluted
                
Income from continuing operations
   $ (.01 )   $ .01  
Income from discontinued operations
   $ (.03 )   $ .04  
 
            
Net income
   $ (.04 )   $ .05  
 
            
                 
    Twelve Months Ended  
    December 31,     December 31,  
    2007     2006  
Net Sales
   $ 1,311,818     $ 1,233,576  
Income from continuing operations
   $ 31,104     $ 50,174  
Income from discontinued operations
   $ (17,880 )   $ 7,095  
 
            
Net Income
   $ 13,224     $ 57,269  
Net income per share — diluted
                
Income from continuing operations
   $ 1.03     $ 1.67  
Income from discontinued operations
   $ (.59 )   $ .24  
 
            
Net income
   $ .44     $ 1.91  
 
            
 
                
Reconciliation of income per share — diluted from continuing operations to reflect special items:
                
Income from continuing operations before adjustments
   $ 1.19     $ 1.87  
Adjustments:
                
Failed M & A transaction
   $ (.03 )   $ —  
Purchased inventory
   $ (.08 )   $ (.01 )
Restructuring
   $ (.05 )     —  
Vacation accrual
   $ —     $ .08  
Impairment
   $ —     $ (.27 )
 
            
Income from continuing operations
   $ 1.03     $ 1.67  
 
            

 

 

GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
                 
    December 31,  
    2007     2006  
Assets
                
Current assets:
                
Cash and cash equivalents
   $ 35,287     $ 13,475  
Accounts receivable, net
     167,595       163,731  
Inventories
     212,909       220,119  
Other current assets
     20,362       18,099  
Assets of discontinued operations
     4,592       40,356  
 
            
Total current assets
     440,745       455,780  
 
                
Property, plant and equipment, net
     273,283       233,249  
Goodwill
     453,228       366,763  
Acquired intangibles
     96,871       62,366  
Investments in partnerships
     2,644       2,440  
Other assets
     14,637       14,307  
Assets of discontinued operations
     —       17,963  
 
            
 
   $ 1,281,408     $ 1,152,868  
 
            
Liabilities and Shareholders’ Equity
                
Current liabilities:
                
Accounts payable
   $ 89,551     $ 69,040  
Accrued expenses
     41,062       50,279  
Current maturities of long-term debt
     2,955       2,336  
Liabilities of discontinued operations
     657       2,760  
 
            
Total current liabilities
     134,225       124,415  
 
                
Long-term debt
     485,654       398,217  
Deferred income taxes
     78,071       70,981  
Other non-current liabilities
     15,698       9,027  
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
     219,087       215,944  
Retained earnings
     337,929       332,920  
Accumulated other comprehensive income
     10,837       1,065  
 
            
 
     568,153       550,228  
Less: cost of 61,467 and 42,600 common shares held in treasury in 2007 and 2006, respectively
     393       —  
 
            
Total shareholders’ equity
     567,760       550,228  
 
            
 
   $ 1,281,408     $ 1,152,868  
 
            

 

 

GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
                                 
    Three Months Ended     Twelve Months Ended  
    December 31,     December 31,  
    2007     2006     2007     2006  
Net sales
   $ 308,702     $ 277,605     $ 1,311,818     $ 1,233,576  
 
                                
Cost of sales
     260,884       227,140       1,082,423       976,835  
 
                        
 
                                
Gross profit
     47,818       50,465       229,395       256,741  
 
                                
Selling, general and administrative expense
     38,078       30,169       148,107       137,368  
 
                        
 
                                
Income from operations
     9,740       20,296       81,288       119,373  
 
                                
Other (income) expense
                                
Interest expense
     8,824       6,625       31,887       25,897  
Equity in partnerships’ (income) loss and other (income)
     (192 )     13,490       (1,215 )     13,045  
 
                        
 
                                
Total other expense
     8,632       20,115       30,672       38,942  
 
                        
 
                                
Income before taxes
     1,108       181       50,616       80,431  
 
                                
Provision for income taxes
     1,440       6       19,512       30,257  
 
                        
 
                                
(Loss) income from continuing operations
     (332 )     175       31,104       50,174  
 
                                
Discontinued operations
                                
(Loss) income from discontinued operations before taxes
     (703 )     (412 )     (22,436 )     8,777  
Income tax expense (benefit)
     291       (1,800 )     (4,556 )     1,682  
 
                        
(Loss) income from discontinued operations
     (994 )     1,388       (17,880 )     7,095  
 
                                
Net (loss) income
   $ (1,326 )   $ 1,563     $ 13,224     $ 57,269  
 
                        
 
                                
Net (loss) income per share — Basic
                                
(Loss) income from continuing operations
   $ (.01 )   $ .01     $ 1.04     $ 1.69  
(Loss) income from discontinued operations
     (.03 )     .04       (.60 )     .24  
 
                        
Net (loss) income
   $ (.04 )   $ .05     $ .44     $ 1.93  
 
                        
 
                                
Weighted average shares outstanding — Basic
     29,879       29,772       29,867       29,712  
 
                        
 
                                
Net (loss) income per share — Diluted
                                
(Loss) income from continuing operations
   $ (.01 )   $ .01     $ 1.03     $ 1.67  
(Loss) income from discontinued operations
     (.03 )     .04       (.59 )     .24  
 
                        
Net (loss) income
   $ (.04 )   $ .05     $ .44     $ 1.91  
 
                        
 
                                
Weighted average shares outstanding — Diluted
     30,111       30,040       30,116       30,006  
 
                        

 

GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
                 
    Year Ended December 31,  
    2007     2006  
Cash flows from operating activities
                
Net income
   $ 13,224     $ 57,269  
(Loss) income from discontinued operations
     (17,880 )     7,095  
 
            
Income from continuing operations
     31,104       50,174  
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
                
Depreciation and amortization
     33,057       26,706  
Provision for deferred income taxes
     5,283       (28,953 )
Equity in partnerships’ (income) loss
     (911 )     13,884  
Distributions from partnerships’ income
     712       1,149  
Stock compensation expense
     2,886       2,672  
Other non-cash adjustments
     177       750  
Increase (decrease) in cash resulting from changes in (net of acquisitions):
                
Accounts receivable
     19,204       434  
Inventories
     42,668       (34,839 )
Other current assets and other assets
     3,258       (4,799 )
Accounts payable
     10,184       (23,404 )
Accrued expenses and other non-current liabilities
     (11,112 )     (7,627 )
 
            
Net cash provided by (used in) continuing operations
     136,510       (3,853 )
Net cash provided by (used in) discontinued operations
     22,303       (9,411 )
 
            
Net cash provided by (used in) operating activities
     158,813       (13,264 )
 
            
 
                
Cash flows from investing activities
                
Acquisitions, net of cash acquired
     (206,608 )     (57,430 )
Net proceeds from sale of business
     11,859       151,487  
Purchases of property, plant and equipment
     (18,752 )     (21,737 )
Net proceeds from sale of property and equipment
     3,657       349  
 
            
Net cash (used in) provided by investing activities for continuing operations
     (209,844 )     72,669  
Net cash used in investing activities for discontinued operations
     (69 )     (3,717 )
 
            
Net cash (used in) provided by investing activities
     (209,913 )     68,952  
 
            
 
                
Cash flows from financing activities
                
Long-term debt reduction
     (119,558 )     (114,875 )
Proceeds from long-term debt
     200,074       50,829  
Payment of deferred financing costs
     (1,498 )     (768 )
Payment of dividends
     (5,971 )     (5,957 )
Net proceeds from issuance of common stock
     137       1,174  
Tax benefit from equity compensation
     121       355  
Purchase of treasury stock
     (393 )     —  
 
            
Net cash provided by (used in) financing activities for continuing operations
     72,912       (69,242 )
Net cash used in financing activities for discontinued operations
     —       (1,500 )
 
            
Net cash provided by (used in) financing activities
     72,912       (70,742 )
 
            
Net increase (decrease) in cash and cash equivalents
     21,812       (15,054 )
 
                
Cash and cash equivalents at beginning of year
     13,475       28,529  
 
            
Cash and cash equivalents at end of year
   $ 35,287     $ 13,475  
 
            

 

GIBRALTAR INDUSTRIES, INC.
Segment Information
(in thousands)
                                 
    Three Months Ended December 31,  
                    Increase (Decrease)  
    2007     2006     $     %  
Net Sales
                                
Building Products
   $ 218,500     $ 190,223     $ 28,277       14.9 %
Processed Metals
     90,202       87,382       2,820       3.2 %
 
                          
 
                                
 
   $ 308,702     $ 277,605     $ 31,097       11.2 %
 
                                
Income From Continuing Operations
                                
Building Products
   $ 13,207     $ 21,538     $ (8,331 )     -38.7 %
Processed Metals
     5,668       4,725       943       20.0 %
Corporate
     (9,135 )     (5,967 )     (3,168 )     53.1 %
 
                          
 
                                
 
   $ 9,740     $ 20,296     $ (10,566 )     -52.0 %
 
                                
Operating Margin
                                
Building Products
     6.0 %     11.3 %                
Processed Metals
     6.3 %     5.4 %                
                                 
    Twelve Months Ended December 31,  
                    Increase (Decrease)  
    2007     2006     $     %  
Net Sales
                                
Building Products
   $ 929,022     $ 862,287     $ 66,735       7.7 %
Processed Metals
     382,796       371,289       11,507       3.1 %
 
                          
 
                                
 
   $ 1,311,818     $ 1,233,576     $ 78,242       6.3 %
 
                                
Income From Continuing Operations
                                
Building Products
   $ 91,589     $ 127,701     $ (36,112 )     -28.3 %
Processed Metals
     21,757       25,587       (3,830 )     -15.0 %
Corporate
     (32,058 )     (33,915 )     1,857       -5.5 %
 
                          
 
                                
 
   $ 81,288     $ 119,373     $ (38,085 )     -31.9 %
 
                                
Operating Margin
                                
Building Products
     9.9 %     14.8 %                
Processed Metals
     5.7 %     6.9 %