EX-99.1 2 finalearningsreleaseforsept2.htm PART I.  FINANCIAL INFORMATION

               



For Immediate Release

        October 25, 2006




GIBRALTAR REPORTS STRONG THIRD-QUARTER SALES AND EARNINGS


Third-Quarter Net Income Per Share from Continuing Operations Increases 65% to $.61;

Sales Grow by 36% in Third Quarter to $336 Million


BUFFALO, NEW YORK (October 25, 2006) – Gibraltar Industries, Inc. (NASDAQ: ROCK) today reported its sales, net income, and earnings per share for the three and nine months ended September 30, 2006.


Sales from continuing operations in the third quarter of 2006 were $336 million, an increase of approximately 36 percent compared to $248 million in the third quarter of 2005, continuing a trend of solid sales growth over the last 12 months. For the first nine months of 2006, sales from continuing operations were up by approximately 37 percent to $1.012 billion, compared to $737 million in the first nine months of 2005.


Income from continuing operations in the third quarter of 2006 was $18.3 million, an increase of approximately 69 percent compared to $10.8 million in the third quarter of 2005. During the first nine months of 2006, income from continuing operations was $49.8 million, an increase of approximately 53 percent compared to $32.5 million in the first nine months of 2005.


Income per share from continuing operations was $.61 in the third quarter of 2006, an increase of approximately 65 percent compared to $.37 in the third quarter of 2005. In the first nine months of 2006, income per share from continuing operations was $1.66, an increase of approximately 52 percent compared to $1.09 in the first nine months of 2005.


“We generated our best-ever third-quarter sales, net income, operating margin, and earnings per share even though some of our end markets – most notably the new-build residential sector and automotive production – began to feel some early-stage softness,” said Brian J. Lipke, Gibraltar’s Chairman and Chief Executive Officer. “Our business, customer, and geographic diversification allowed us to produce strong results even with changing economic conditions, fluctuating raw material prices, and softness in some sectors of the economy.”


“We are continuing to streamline, consolidate, and extract efficiencies from our operations – which together with the restructuring of our business portfolio – is driving steady and sustainable long-term improvements in our margins and returns,” said Henning N. Kornbrekke, Gibraltar’s President and Chief Operating Officer. “We fully expect to generate record results in 2006, and even with softening in some of the markets we serve, we have plans in place that should enable us to continue and build on that momentum in the coming year.”



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Gibraltar Reports Third-Quarter Sales and Earnings

Page Two



Looking ahead, Mr. Lipke said that in the fourth quarter, historically Gibraltar’s seasonally slowest period, the Company sees continued strength in the commercial and industrial building markets, residential building product sales to the repair/remodel business, and continued growth with the transplant auto makers, which will be offset by the reduction in automotive production levels and the current softness in the new-build residential market.


In light of these considerations, and barring a significant change in business conditions, Mr. Kornbrekke said that Gibraltar expects its fourth-quarter earnings per share from continuing operations will be in the range of $.30 to $.35, compared to $.17 in the fourth quarter of 2005 (which included several special charges).


Gibraltar said that it continues to evaluate a wide range of acquisition opportunities that will further focus its operations and help to offset the temporary softness in some of its existing businesses. The Company said that it expects the soft operating environment will persist in the first half of 2007, with conditions improving as the year progresses.


Gibraltar Industries is a leading manufacturer, processor, and distributor of primarily metals for the building, vehicular, and industrial markets. The company serves a large number of customers in a variety of industries in all 50 states, Canada, Mexico, Europe, Asia, and Central and South America. It has approximately 3,400 employees and operates 74 facilities in 26 states, Canada, and China.


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; natural gas and electricity 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 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 October 26. Details of the call can be found on Gibraltar’s Web site, at 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, 2006

  

September 30, 2005

Net Sales

$

336,471

 

$

247,771

Income from Continuing Operations

$

18,329

 

$

10,826

Income Per Share from Continuing

    Operations –Basic


$


.62

 


$


.37

Weighted Average Shares Outstanding-Basic

 

29,747

  

                 29,622

Income Per Share from Continuing

   Operations - Diluted


$


.61

 


$


.37

Weighted Average Shares Outstanding-Diluted

 

30,040

  

29,837







 

                             Nine Months Ended

  

September 30, 2006

  

September 30, 2005

Net Sales

$

1,011,529

 

$

737,163

Income from Continuing Operations

$

49,823

 

$

32,477

Income Per Share from Continuing

   Operations -Basic


$


1.68

 


$


1.10

Weighted Average Shares Outstanding-Basic

 

29,691

  

29,560

Income Per Share from Continuing

   Operations -Diluted


$


1.66

 


$


1.09

Weighted Average Shares Outstanding-Diluted

 

29,993

  

29,792



GIBRALTAR INDUSTRIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

   (in thousands)

 
  

 September 30                       December 31,

  

      2006

  

       2005

      

Assets

     

Current assets:

     

Cash and cash equivalents

$

12,804

 

$

28,529

Accounts receivable, net

 

193,375

  

162,300

Inventories

 

263,932

  

189,988

Other current assets

 

15,900

  

19,666

              Current assets of discontinued operations

 

-

  

23,521

Total current assets

 

486,011

  

424,004

      

Property, plant and equipment, net

 

232,040

  

229,644

Goodwill

 

371,917

  

360,663

Investments in partnerships

 

4,840

  

6,151

Other assets

 

53,494

  

55,099

Assets of discontinued operations

 

-

  

129,451

 

$

1,148,302

 

$

1,205,012

      

Liabilities and Shareholders' Equity

     

Current liabilities:

     

Accounts payable

$

98,997

 

$

83,266

Accrued expenses

 

68,612

  

59,289

Current maturities of long-term debt

 

2,335

  

2,331

Current maturities of related party debt

 

-

  

5,833

              Current liabilities of discontinued operations

 

-

  

6,529

Total current liabilities

 

169,944

  

157,248

      

Long-term debt

 

357,516

  

453,349

Deferred income taxes

 

65,252

  

90,942

Other non-current liabilities

 

6,951

  

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 29,839,041 and 29,734,986 shares in 2006 and

2005, respectively

 



299

  



298

Additional paid-in capital

 

215,276

  

216,897

Retained earnings

 

331,358

  

280,116

Unearned compensation

 

-

  

(5,153)

Accumulated other comprehensive loss

 

1,706

  

1,867


 

548,639

  

494,025

Less: cost of 42,600 and 41,100 common shares held in treasury in

         2006 and 2005

 


-

  


-

             Total shareholders’ equity

 

548,639

  

494,025

 

$

1,148,302

 

$

1,205,012

 



               



GIBRALTAR INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(unaudited)

  (in thousands)

 

Three Months Ended

September 30,

Nine Months Ended

September 30,

  

2006

 

2005

 

2006

 

2005

     

Net sales

$

336,471

$

247,771

$

1,011,529

$

737,163

         

Cost of sales

 

266,660

 

200,193

 

801,222

 

597,744

  

69,811

 

47,578

 

210,307

 

139,419

     Gross profit

        
         

Selling, general and administrative expense

 

33,679

 

26,353

 

110,469

 

77,607

         

     Income from operations

 

36,132

 

21,225

 

99,838

 

61,812

         

Other (income) expense:

        

  Equity in partnerships’ loss (income) and other income

 

103

 

820

 

(445)

 

469

  Interest expense

 

6,422

 

2,657

 

20,302

 

8,823

Total other expense

 

6,525

 

3,477

 

19,857

 

9,292

         

     Income before taxes

 

29,607

 

17,748

 

79,981

 

52,520

         

Provision for income taxes

 

11,278

 

6,922

 

30,158

 

20,043

     Income from continuing operations

 

18,329

 

10,826

 

49,823

 

32,477

         

Discontinued operations:

        

    (Loss) income from discontinued operations before taxes

 

(555)

 

1,694

 

9,458

 

9,179

Income tax (benefit) expense

 

(222)

 

661

 

3,575

 

3,580

   (Loss) income from discontinued operations

 

(333)

 

1,033

 

5,883

 

5,599

         

Net income

$

17,996

$

11,859

$

55,706

$

38,076

         

Net income per share - Basic:

Income from continuing operations

(Loss) income from discontinued operations


$


.62

(.01)


$


.37

.03


$


1.68

.20


$


1.10

.19

Net income

$

.61

$

.40

$

1.88

$

1.29

         

Weighted average shares outstanding – Basic

 

29,747

 

29,622

 

29,691

 

29,560

Net income per share - Diluted:

Income from continuing operations

Loss income from discontinued operations


$


.61

(.01)


$


.37

.03


$


1.66

.20


$


1.09

.19

Net income

$

.60

$

.40

$

1.86

$

1.28

         

Weighted average shares outstanding – Diluted

 

30,040

 

29,837

 

29,993

 

29,792

 

GIBRALTAR INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

   (in thousands)

   

                        Nine Months Ended

                             September 30,

     

2006

 

2005

 

Cash flows from operating activities

      
 

Net income

  

$

55,706

$

38,076

 

Income from discontinued operations

   

5,883

 

5,599

 

Income from continuing operations

   

49,823

 

32,477

 

Adjustments to reconcile net income to net cash provided by

   operating activities:

      
 

Depreciation and amortization

   

18,765

 

13,564

 

Provision for deferred income taxes

   

-

 

(51)

 

Equity in partnerships’ loss

   

400

 

554

 

Distributions from partnerships

   

909

 

850

 

Stock compensation expense

   

2,244

 

900

 

Other noncash adjustments

   

783

 

 74

 

Increase (decrease) in cash resulting from changes

      
 

   in (net of acquisitions):

      
 

     Accounts receivable

   

(32,155)

 

(29,700)

 

     Inventories

   

(68,872)

 

32,572

 

     Other current assets and other assets

   

3,647

 

   (93)

 

     Accounts payable

   

12,264

 

4,139

 

     Accrued expenses and other non-current liabilities

   

(18,668)

 

(10,898)

        
 

       Net cash used in continuing operations

   

(30,860)

 

44,388

 

       Net cash provided by discontinued operations

   

6,750

 

14,682

 

       Net cash (used in) provided by operating activities

   

(24,110)

 

59,070

        
 

Cash flows from investing activities

      
 

Acquisitions, net of cash acquired

   

(13,206)

 

(27,582)

 

Purchases of property, plant and equipment

   

(17,057)

 

(11,795)

 

Net proceeds from sale of property and equipment

   

388

 

396

 

Net proceeds from sale of businesses

   

151,511

 

42,594

        
 

     Net cash provided by investing activities from continuing operations

   

121,636

 

3,613

  

Net cash provided by (used in) investing activities from                                         discontinued operations

   

3,319

 

(3,302)

 

     Net cash provided by investing activities

   

118,317

 

311

        
 

Cash flows from financing activities

      
 

Long-term debt reduction

   

(114,292)

 

(182,320)

 

Proceeds from long-term debt

   

9,604

 

125,589

 

Payment of deferred financing costs

   

(568)

 

(1,477)

 

Payment of dividends

   

(4,465)

 

(4,453)

 

Net proceeds from issuance of common stock

   

1,174

 

779

 

Tax benefit from stock options

   

115

 

158

        
 

     Net cash used in financing activities for continuing operations

   

(108,832)

 

(61,724)

 

     Net cash used in financing activities from discontinued operations

   

(1,500)

 

(400)

 

     Net cash used in financing activities

   

(109,932)

 

(62,124)

        
 

     Net decrease in cash and cash equivalents

   

(15,725)

 

(2,743)

        
 

Cash and cash equivalents at beginning of year

   

28,529

 

10,892

        
 

Cash and cash equivalents at end of period

  

$

12,804

$

8,149

  


GIBRALTAR INDUSTRIES, INC.

Segment Information

(Unaudited)

(in thousands)

 

        Three  Months Ended September 30,

      

Increase (Decrease)

  

2006

 

2005

 

$

 

%

         

Net Sales

        

     Building products

$

226,351

$

149,116

$

77,235

 

51.8%

     Processed metal products

 

110,120

 

98,655

 

11,465

 

11.6%

         

Total Sales

 

336,471

 

247,771

 

88,700

 

35.8%

         

Income from Operations

        

     Building products

$

34,662

$

23,229

$

11,433

 

49.2%

     Processed metal products

 

7,569

 

4,322

 

3,247

 

75.1%

     Corporate

 

(6,099)

 

(6,326)

 

227

 

(3.6%)

         

Total Income from Operations

 

36,132

 

21,225

 

14,907

 

70.2%

         

Operating Margin

        

     Building products

 

15.3%

 

15.6%

 

 

 

 

     Processed metal products

 

6.9%

 

4.4%

    
         
 

   

     Nine  Months Ended September 30,

      

Increase (Decrease)

  

2006

 

2005

 

$

 

%

         

Net Sales

        

     Building products

$

680,151

$

410,942

$

269,209

 

65.5%

     Processed metal products

 

331,378

 

326,221

 

5,157

 

1.6%

         

Total Sales

 

1,011,529

 

737,163

 

274,366

 

37.2%

         

Income from Operations

        

     Building products

$

106,454

$

55,930

$

50,524

 

90.3%

     Processed metal products

 

21,332

 

24,807

 

(3,475)

 

(14.0%)

     Corporate

 

(27,948)

 

(18,925)

 

(9,023)

 

47.7%

         

Total Income from Operations

 

99,838

 

61,812

 

38,026

 

61.5%

         

Operating Margin

        

     Building products

 

15.7%

 

13.6%

 

 

 

 

     Processed metal products

 

6.4%

 

7.6%