EX-99.1 2 l32843aexv99w1.htm EX-99.1 EX-99.1
Exhibit 99.1
(GIBRALTAR LOGO)
For Immediate Release
August 7, 2008
     GIBRALTAR REPORTS SECOND-QUARTER EARNINGS OF $0.67 PER SHARE
  •   Operating Margin Exceeds 10% for First Time Since 2006, Solid Improvement in Both Segments
 
  •   Strong Cash Flow from Improved Profits and Reduced Working Capital Used to Further Reduce Debt
 
  •   Raising 2008 EPS from Continuing Operations, Now Expecting $1.50 to $1.65
               BUFFALO, NEW YORK (August 7, 2008) — Gibraltar Industries, Inc. (NASDAQ: ROCK), a leading manufacturer, processor, and distributor of products for the building, industrial, and vehicular markets, today reported results for the quarter and six months ended June 30, 2008.
               Sales from continuing operations in the second quarter of 2008 were $379 million, an increase of six percent compared to $356 million in the second quarter of 2007. Income from continuing operations increased by 56 percent to $20.3 million in the second quarter of 2008, or $0.67 per diluted share, compared to $13.0 million, or $0.43 per diluted share, in the second quarter of 2007.
               In the first six months of 2008, sales from continuing operations were $705 million, up seven percent from $661 million in the first half of 2007. Income from continuing operations in the first six months of 2008 increased by 36 percent to $27.4 million, or $0.91 per diluted share, from $20.1 million, or $0.67 per diluted share, in the first six months of 2007.
               Gibraltar’s 2007 acquisition activity allowed it to increase sales despite significantly weaker market conditions in 2008 compared to a year earlier, as these acquisitions added sales of $22 million in the second quarter and $59 million in the first six months of 2008.
               “During the second quarter, we built on the progress achieved in the first three months of the year. We continued to reduce cost, generated higher sales, drove strong earnings growth, and further strengthened our balance sheet. All of this was accomplished in spite of additional weakening in two of our primary markets, with housing starts off 32 percent and the North American auto build down 16 percent compared to the second quarter of 2007,” said Brian J. Lipke, Gibraltar’s Chairman and Chief Executive Officer.
               “Our many initiatives to reduce costs, consolidate and streamline our operations, reduce working capital, and lower our debt allowed us to produce much stronger second-quarter results, even in an extremely difficult operating environment. In the last 18 months, we have closed or consolidated 18 facilities, including four in the second quarter. Over that same time, our operational efficiencies have resulted in improvements in margins, improved our customer service, and helped to reduce working capital, resulting in reductions in debt of $24 million during the second quarter, $50 million in the first six months of 2008, and approximately $115 million in the last nine months,” said Henning N. Kornbrekke, Gibraltar’s President and Chief Operating Officer.
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Gibraltar Reports Second-Quarter Earnings of $0.67 Per Share
Page Two
               “We have continued to strategically transform Gibraltar, broadening and diversifying our business portfolio by increasing our participation in the commercial building, industrial, and international markets and strengthening our product leadership positions in targeted niche markets, all of which have improved our core operating characteristics and enhanced our ability to generate stronger and more consistent results,” said Mr. Lipke.
               “By aggressively lowering Gibraltar’s cost structure and continuing to improve our margins, we have been able to offset lower volumes in two of our primary markets. As these markets stabilize and begin to move back toward more normal activity levels, we are positioned to generate even stronger results,” said Mr. Kornbrekke.
               Looking ahead, Mr. Kornbrekke said that the Company expects the normal seasonal slowing in the second half of the year and that, in light of its strong performance in the first six months of the year and the momentum from its many operational improvements, its 2008 earnings per share from continuing operations are now expected to be in the range of $1.50 to $1.65 per share, compared to previous guidance of $1.05 to $1.25, and $1.03 in 2007, barring a significant change in current business conditions.
               Gibraltar has scheduled a conference call to review its second-quarter results and discuss its outlook for 2008 on August 8, at 9:00 a.m. ET. Details of the call can be found on Gibraltar’s Web site, at http://www.gibraltar1.com. If you are not able to participate in the call, you can listen to a replay on the Gibraltar Web site. The presentation slides that will be discussed during the call are expected to be available on Thursday, August 7, by 6:00 p.m. ET. The slides may be downloaded from the Conference Calls page of the Investor Info section of the Gibraltar website:
http://www.gibraltar1.com/investors/index.cfm?page=48.
               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 3,800 employees and operates 71 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. 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 publicly 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.
CONTACT: Kenneth P. Houseknecht, Vice President of Communications and Investor Relations, at 716/826-6500, khouseknecht@gibraltar1.com.
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GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
                 
    June 30,     December 31,  
    2008     2007  
    (unaudited)          
Assets
                
 
                
Current assets:
                
Cash and cash equivalents
   $ 26,692     $ 35,287  
Accounts receivable, net of reserve of $4,039 and $3,482 in 2008 and 2007, respectively
     214,008       167,595  
Inventories
     228,745       212,909  
Other current assets
     19,193       20,362  
Assets of discontinued operations
     1,536       4,592  
 
            
Total current assets
     490,174       440,745  
 
                
Property, plant and equipment, net
     266,791       273,283  
Goodwill
     458,386       453,228  
Acquired intangibles
     98,398       96,871  
Investments in partnerships
     2,891       2,644  
Other assets
     14,687       14,637  
 
            
 
   $ 1,331,327     $ 1,281,408  
 
            
 
                
Liabilities and Shareholders’ Equity
                
 
                
Current liabilities:
                
Accounts payable
   $ 150,412     $ 89,551  
Accrued expenses
     54,292       41,062  
Current maturities of long-term debt
     2,728       2,955  
Liabilities of discontinued operations
     —       657  
 
            
Total current liabilities
     207,432       134,225  
 
                
Long-term debt
     435,583       485,654  
Deferred income taxes
     78,993       78,071  
Other non-current liabilities
     16,315       15,698  
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; issued 30,007,494 and 29,949,229 shares in 2008 and 2007
     300       300  
Additional paid-in capital
     221,921       219,087  
Retained earnings
     361,749       337,929  
Accumulated other comprehensive income
     9,462       10,837  
 
            
 
     593,432       568,153  
 
                
Less: cost of 64,154 and 61,467 common shares held in treasury in 2008 and 2007
     428       393  
 
            
Total shareholders’ equity
     593,004       567,760  
 
            
 
   $ 1,331,327     $ 1,281,408  
 
            

 

 

GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(in thousands)
                                 
    Three Months Ended     Six Months Ended  
    June 30,     June 30,  
    2008     2007     2008     2007  
Net sales
   $ 379,208     $ 356,208     $ 704,756     $ 660,546  
Cost of sales
     296,617       290,156       566,415       542,743  
 
                        
Gross profit
     82,591       66,052       138,341       117,803  
Selling, general and administrative expense
     43,816       37,284       81,264       71,620  
 
                        
Income from operations
     38,775       28,768       57,077       46,183  
Other (income) expense:
                                
Equity in partnerships’ income and other income
     (267 )     (305 )     (361 )     (667 )
Interest expense
     6,932       7,850       14,722       14,691  
 
                        
Total other expense
     6,665       7,545       14,361       14,024  
 
                        
Income before taxes
     32,110       21,223       42,716       32,159  
Provision for income taxes
     11,839       8,193       15,327       12,090  
 
                        
Income from continuing operations
     20,271       13,030       27,389       20,069  
Discontinued operations:
                                
Loss from discontinued operations before taxes
     (250 )     (1,773 )     (913 )     (3,143 )
Income tax benefit
     (92 )     (669 )     (337 )     (1,168 )
 
                        
Loss from discontinued operations
     (158 )     (1,104 )     (576 )     (1,975 )
 
                        
 
                                
Net income
   $ 20,113     $ 11,926     $ 26,813     $ 18,094  
 
                        
 
                                
Net income per share — Basic:
                        
Income from continuing operations
   $ .68     $ .44     $ .91     $ .67  
Loss from discontinued operations
     (.01 )     (.04 )     (.02 )     (.06 )
 
                        
Net income
   $ .67     $ .40     $ .89     $ .61  
 
                        
 
                                
Weighted average shares outstanding — Basic
     29,980       29,863       29,963       29,850  
 
                        
Net income per share — Diluted:
                                
Income from continuing operations
   $ .67     $ .43     $ .91     $ .67  
Loss from discontinued operations
     —       (.03 )     (.02 )     (.07 )
 
                        
Net income
   $ .67     $ .40     $ .89     $ .60  
 
                        
 
                                
Weighted average shares outstanding — Diluted
     30,139       30,144       30,129       30,096  
 
                        

 

 

GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
                 
    Six Months Ended  
    June 30,  
    2008     2007  
Cash flows from operating activities
                
Net income
   $ 26,813     $ 18,094  
Loss from discontinued operations
     (576 )     (1,975 )
 
            
Income from continuing operations
     27,389       20,069  
Adjustments to reconcile net income to net cash provided by operating activities:
                
Depreciation and amortization
     18,133       15,570  
Provision for deferred income taxes
     (952 )     (229 )
Equity in partnerships’ loss (income) and other income
     (270 )     (576 )
Distributions from partnerships
     264       493  
Stock compensation expense
     2,712       1,254  
Other noncash adjustments
     1,251       528  
Increase (decrease) in cash resulting from changes in (net of acquisitions and dispositions):
                
Accounts receivable
     (46,990 )     (28,627 )
Inventories
     (16,046 )     14,539  
Other current assets and other assets
     1,180       1,221  
Accounts payable
     60,060       25,668  
Accrued expenses and other non-current liabilities
     13,366       (2,946 )
 
            
Net cash provided by continuing operations
     60,097       46,964  
Net cash provided by discontinued operations
     1,662       7,892  
 
            
Net cash provided by operating activities
     61,759       54,856  
 
            
 
                
Cash flows from investing activities
                
Acquisitions, net of cash acquired
     (8,222 )     (84,424 )
Purchases of property, plant and equipment
     (9,440 )     (9,254 )
Net proceeds from sale of property and equipment
     540       373  
 
            
Net cash used in investing activities from continuing operations
     (17,122 )     (93,305 )
Net cash provided by (used in) investing activities for discontinued operations
     161       (38 )
 
            
Net cash used in investing activities
     (16,961 )     (93,343 )
 
            
 
                
Cash flows from financing activities
                
Long-term debt reduction
     (93,922 )     (1,654 )
Proceeds from long-term debt
     43,439       52,485  
Payment of deferred financing costs
     (4 )     (8 )
Payment of dividends
     (2,993 )     (2,983 )
Purchase of treasury stock
     (35 )     —  
Net proceeds from issuance of common stock
     —       93  
Tax benefit from equity compensation
     122       —  
 
            
Net cash (used in) provided by financing activities
     (53,393 )     47,933  
 
            
 
                
Net (decrease) increase in cash and cash equivalents
     (8,595 )     9,446  
 
                
Cash and cash equivalents at beginning of year
     35,287       13,475  
 
            
 
                
Cash and cash equivalents at end of period
   $ 26,692     $ 22,921  
 
            

 

 

GIBRALTAR INDUSTRIES, INC.
Segment Information
(unaudited)
(in thousands)
                                 
    Three Months Ended June 30,  
                    Increase (Decrease)  
    2008     2007     $     %  
Net Sales
                                
Building Products
   $ 281,058     $ 258,209     $ 22,849       8.8 %
Processed Metal Products
     98,150       97,999       151       0.2 %
 
                          
 
                                
Total Sales
     379,208       356,208       23,000       6.5 %
 
                                
Income from Operations
                                
Building Products
   $ 39,638     $ 31,172     $ 8,466       27.2 %
Processed Metal Products
     8,425       5,211       3,214       61.7 %
Corporate
     (9,288 )     (7,615 )     (1,673 )     22.0 %
 
                          
 
                                
Total Income from Operations
   $ 38,775     $ 28,768     $ 10,007       34.8 %
 
                                
Operating Margin
                                
Building Products
     14.1 %     12.1 %                
Processed Metal Products
     8.6 %     5.3 %                
                                 
    Six Months Ended June 30,  
                    Increase (Decrease)  
    2008     2007     $     %  
Net Sales
                                
Building Products
   $ 510,381     $ 463,347     $ 47,034       10.2 %
Processed Metal Products
     194,375       197,199       (2,824 )     (1.4 %)
 
                          
 
                                
Total Sales
     704,756       660,546       44,210       6.7 %
 
                                
Income from Operations
                                
Building Products
   $ 60,438     $ 49,885     $ 10,553       21.2 %
Processed Metal Products
     12,661       10,549       2,112       20.0 %
Corporate
     (16,022 )     (14,251 )     (1,771 )     12.4 %
 
                          
 
                                
Total Income from Operations
   $ 57,077     $ 46,183     $ 10,894       23.6 %
 
                                
Operating Margin
                                
Building Products
     11.8 %     10.8 %                
Processed Metal Products
     6.5 %     5.3 %