Gibraltar Reports Third Quarter Financial Results

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Gibraltar Reports Third Quarter Financial Results

BUFFALO, N.Y.–(BUSINESS WIRE)–

Gibraltar Industries, Inc. (ROCK), a leading manufacturer and
distributor of products for building and industrial markets, today
reported its financial results for the three and nine month periods
ended September 30, 2012. All financial metrics in this release reflect
only the Company’s continuing operations unless otherwise noted.

Third Quarter Financial Results

Gibraltar’s net sales for the third quarter of 2012 were $205.5 million
compared to $220.1 million for the third quarter of 2011. Net income was
$7.0 million, or $0.23 per diluted share, compared with $7.4 million, or
$0.24 per diluted share, in the third quarter of 2011. The third-quarter
2012 results include after-tax special charges of $0.4 million, or $0.01
per diluted share, resulting primarily from exit activity costs related
to business restructuring. Net income for the third quarter of 2011
included after-tax special charges totaling $0.4 million, or $0.02 per
diluted share, primarily consisting of exit activity costs and
acquisition costs. Excluding these items, third-quarter 2012 adjusted
net income was $7.4 million, or $0.24 per diluted share, compared with
$7.8 million, or $0.26 per diluted share, in the third quarter of 2011.

Management Comments

“We continued to experience sluggish economic conditions and an uneven,
regional recovery across North America, while Euro-zone economies showed
continuing weakness in the third quarter,” said Chairman and Chief
Executive Officer Brian Lipke. “While these conditions are expected to
improve, they did weigh on our third quarter results. Nonetheless, we
continued to improve the operating efficiencies across the Company,
including those associated with the consolidation of our West Coast
operations.”

“Our top-line results this quarter reflected mixed conditions in the
markets we serve,” said Henning Kornbrekke, President and Chief
Operating Officer. “Slow residential repair and remodeling activity
coupled with unusual weather patterns had a negative effect on the
building industry, including roofing activity, which impacted our
business in the third quarter. Growth in non-residential construction
also moderated and weak economic conditions in Europe lowered demand for
our filtration and other industrial products. While housing starts are
rebounding and forecasts suggest a continued pickup in the new housing
market, many of our residential products are ordered at later stages of
a home’s completion. And while residential repair and remodeling
activity remains relatively unchanged, consumers are expected to become
more active in the market as economic uncertainty is lifted.”

“We continued to capitalize on pockets of growth in the third quarter,”
Kornbrekke said. “Our public infrastructure business continues to
perform well. Funding remains positive for the road and highway
construction industry, providing the basis for higher levels of
activity. We have already seen an increase in quoting activity and we
anticipate an increase in the size of projects in our sales pipeline as
we move into 2013. At the same time, our businesses that serve the North
American oil and gas and industrial markets continue to see solid
customer demand.”

Nine Month Financial Results

For the nine months ended September 30, 2012, total net sales were
$617.4 million, compared to $592.5 million in the comparable 2011
period. Net income was $16.4 million, or $0.53 per diluted share,
compared with $16.1 million, or $0.52 per diluted share, in the
comparable period of 2011. The results for the first nine months of 2012
include after-tax special charges of $2.4 million, or $0.08 per diluted
share, for acquisition-related costs and exit activity costs related to
business restructuring. Net income for the first nine months of 2011
included after-tax special charges of $4.3 million, or $0.15 per diluted
share, for acquisition-related costs, exit activity costs related to
business restructuring, and equity compensation declined by Mr. Lipke.
Excluding these items, adjusted net income in the first nine months of
2012 was $18.7 million, or $0.61 per diluted share, compared with $20.4
million, or $0.67 per diluted share, in the comparable period of 2011.

Liquidity and Capital Resources

  • Gibraltar’s liquidity increased again to $211 million as of September
    30, 2012, a combination of cash on hand of $71 million and
    availability under the Company’s undrawn revolving credit facility.
  • Working capital management continued to be effective, as days of net
    working capital, which consists of accounts receivable, inventory and
    accounts payable, were 65 for the third quarter of 2012, compared with
    62 days for the third quarter last year.

Outlook

“Gibraltar is well-positioned to resume its top-line growth when more of
our end markets begin to experience meaningful recovery,” said
Kornbrekke. “Our focus on providing our customers with new products,
innovative marketing programs and outstanding customer service has
enabled us to maintain or grow our market share in major product
categories. In addition, over the past 18 months we have acquired new
product lines that should enable us to penetrate a broader range of
markets and channels, adding value to national customers.”

“With the costs of our West Coast business integration increasingly
behind us, we are also well-positioned to deliver stronger
profitability,” said Lipke. “We are continuing to execute on the
strategy we put in place at the beginning of the housing downturn. This
strategy is focused on improving our underlying operations, tightly
controlling costs, and increasing the margin leverage in our business so
that we can continue to deliver solid margins even at low demand levels
in our major end markets.”

“Since late 2007 we have essentially reconfigured the business, reduced
our annual operating expenses, managed commodity costs more effectively,
and lowered our working capital by nearly half,” Lipke said. “At the
same time, our positive cash flow has allowed us to reduce our
borrowings by nearly half as well. Our strong balance sheet and
liquidity have enabled us to rationalize and refocus Gibraltar’s
business portfolio and product lines through strategic divestitures and
acquisitions, and we are well-positioned to continue pursuing
acquisition-driven growth. Despite the challenging conditions in our end
markets, we continue to expect to deliver stronger financial results in
2012 than we did in 2011.”

Third Quarter Conference Call Details

Gibraltar has scheduled a conference call today to review its results
for the third quarter of 2012, starting at 9:00 a.m. ET. Interested
parties may access the call by dialing (877) 407-5790 or (201) 689-8328.
The presentation slides that will be discussed in the conference call
are expected to be available this morning, prior to the start of the
call. The slides may be downloaded from the Gibraltar website: http://www.gibraltar1.com.
A webcast replay of the conference call and a copy of the transcript
will be available on the website following the call.

About Gibraltar

Gibraltar Industries is a leading manufacturer and distributor of
building products, focused on residential and nonresidential repair and
remodeling, as well as construction of industrial facilities and public
infrastructure. The Company generates more than 80% of its sales from
products that hold the #1 or #2 positions in their markets, and serves
customers across North America and Europe. Gibraltar’s strategy is to
grow organically by expanding its product portfolio and penetration of
existing customer accounts, while broadening its market and geographic
coverage through the acquisition of companies with leadership positions
in adjacent product categories. Comprehensive information about
Gibraltar can be found on its website at http://www.gibraltar1.com.

Safe Harbor Statement

Information contained in this news release, other than historical
information, contains forward-looking statements and is subject to a
number of risk factors, uncertainties, and assumptions. Risk factors
that could affect these statements include, but are not limited to, the
following: the availability of raw materials and the effects of changing
raw material prices on the Company’s results of operations; energy
prices and usage; changing demand for the Company’s products and
services; changes in the liquidity of the capital and credit markets;
risks associated with the integration of acquisitions; and changes in
interest and 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 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.

Non-GAAP Financial Data

To supplement Gibraltar’s consolidated financial statements presented on
a GAAP basis, Gibraltar also presented certain adjusted financial data
in this news release. Adjusted financial data excluded special charges
consisting of restructuring primarily associated with the closing and
consolidation of our facilities, acquisition-related costs, and
surrendered equity compensation. These adjustments are shown in the
Non-GAAP reconciliation of adjusted operating results excluding special
charges provided in the financial statements that accompany this news
release. We believe that the presentation of results excluding special
charges provides meaningful supplemental data to investors, as well as
management, that are indicative of the Company’s core operating results
and facilitates comparison of operating results across reporting periods
as well as comparison with other companies. Special charges are excluded
since they may not be considered directly related to our ongoing
business operations. These adjusted measures should not be viewed as a
substitute for our GAAP results, and may be different than adjusted
measures used by other companies.

Next Earnings Announcement

Gibraltar expects to release its financial results for the three- and
twelve-month periods ending December 31, 2012, on Friday, February 22,
2013, and hold its earnings conference call later that morning, starting
at 9:00 a.m. ET.

               
 

GIBRALTAR INDUSTRIES, INC.

CONSOLIDATED INCOME STATEMENTS
(in thousands, except per share data)
(unaudited)
 

Three Months Ended
September 30,

Nine months Ended
September 30,

2012   2011   2012   2011  
Net sales $ 205,514 $ 220,096 $ 617,419 $ 592,466
Cost of sales 165,286   177,133   499,984   474,030  
Gross profit 40,228 42,963 117,435 118,436
Selling, general, and administrative expense 24,479   24,602   78,370   75,463  
Income from operations 15,749 18,361 39,065 42,973
Interest expense 4,688 4,869 13,989 14,321
Other (income) expense (55 ) 15   (401 ) (46 )
Income before taxes 11,116 13,477 25,477 28,698
Provision for income taxes 4,094   6,094   9,091   12,628  
Income from continuing operations 7,022 7,383 16,386 16,070
Discontinued operations:
Income (loss) before taxes 162 (276 ) 9 13,621
(Benefit of) provision for income taxes (117 ) 193   (174 ) 6,563  
Income (loss) from discontinued operations 279   (469 ) 183   7,058  
 
Net income $ 7,301   $ 6,914   $ 16,569   $ 23,128  
 
Net income per share – Basic:
Income from continuing operations $ 0.23 $ 0.24 $ 0.53 $ 0.53
Income (loss) from discontinued operations 0.01   (0.01 ) 0.01   0.23  
Net income $ 0.24   $ 0.23   $ 0.54   $ 0.76  
Weighted average shares outstanding – Basic 30,765   30,554   30,739   30,474  
 
Net income per share – Diluted:
Income from continuing operations $ 0.23 $ 0.24 $ 0.53 $ 0.52
Income (loss) from discontinued operations 0.01   (0.01 ) 0.01   0.24  
Net income $ 0.24   $ 0.23   $ 0.54   $ 0.76  
Weighted average shares outstanding – Diluted 30,838   30,639   30,834   30,620  
       
 
GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
 
September 30,
2012
December 31,
2011
Assets (unaudited)
Current assets:
Cash and cash equivalents $ 71,127 $ 54,117
Accounts receivable, net of reserve 110,605 90,595
Inventories 109,239 109,270
Other current assets   12,828     14,872  
Total current assets 303,799 268,854
 
Property, plant, and equipment, net 142,875 151,974
Goodwill 348,943 348,326
Acquired intangibles 90,680 95,265
Other assets   6,299     7,636  
 
Total assets $ 892,596   $ 872,055  
 
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable $ 73,217 $ 67,320
Accrued expenses 52,298 60,687
Current maturities of long-term debt   417     417  
Total current liabilities 125,932 128,424
 
Long-term debt 206,614 206,746
Deferred income taxes 56,150 55,801
Other non-current liabilities 23,568 21,148
 
Shareholders’ equity:
Preferred stock, $0.01 par value; authorized 10,000 shares; none
outstanding

Common stock, $0.01 par value; authorized 50,000 shares, 30,915 and

  30,702 shares issued in 2012 and 2011

309 307
Additional paid-in capital 239,447 236,673
Retained earnings 246,006 229,437
Accumulated other comprehensive loss (1,329 ) (3,350 )
Cost of 350 and 281 common shares held in treasury in 2012 and 2011   (4,101 )   (3,131 )
 
Total shareholders’ equity   480,332     459,936  
 
Total liabilities & shareholders’ equity $ 892,596   $ 872,055  
       
 
GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
 
Nine Months Ended September 30,
2012   2011  
Cash Flows from Operating Activities
Net income $ 16,569 $ 23,128
Income from discontinued operations   183     7,058  
Income from continuing operations 16,386 16,070

Adjustments to reconcile net income to net cash provided by
  operating
activities:

Depreciation and amortization 19,838 19,515
Stock compensation expense 2,710 3,895
Non-cash charges to interest expense 1,186 1,689
Other non-cash adjustments 3,370 1,437

Increase (decrease) in cash resulting from changes in the following
  (excluding
the effects of acquisitions):

Accounts receivable (19,410 ) (35,126 )

Inventories

(646 ) (11,503 )
Other current assets and other assets 2,305 9,509
Accounts payable 6,134 13,898
Accrued expenses and other non-current liabilities   (5,257 )   11,826  
Net cash provided by operating activities of continuing operations 26,616 31,210

Net cash provided by (used in) operating activities of discontinued
  operations

  119     (3,491 )
Net cash provided by operating activities   26,735     27,719  
 
Cash Flows from Investing Activities
Purchases of property, plant, and equipment (6,852 ) (7,838 )
Cash paid for acquisitions, net of cash received (2,705 ) (107,605 )
Purchase of other investment - (250 )
Net proceeds from sale of businesses - 59,029
Net proceeds from sale of property and equipment   417     978  
Net cash used in investing activities of continuing operations (9,140 ) (55,686 )
Net cash provided by investing activities of discontinued operations   -     2,089  
Net cash used in investing activities   (9,140 )   (53,597 )
 
Cash Flows from Financing Activities
Proceeds from long-term debt - 73,849
Long-term debt payments (414 ) (74,260 )
Excess tax benefit from stock compensation 14
Net proceeds from issuance of common stock 52 10
Payment of deferred financing fees (18 ) (34 )
Purchase of treasury stock at market prices   (970 )   (826 )
Net cash used in financing activities   (1,336 )   (1,261 )
 
Effect of exchange rate changes on cash   751     (672 )
 
Net increase (decrease) in cash and cash equivalents 17,010 (27,811 )
 
Cash and cash equivalents at beginning of year   54,117     60,866  
 
Cash and cash equivalents at end of period $ 71,127   $ 33,055  
       
 
GIBRALTAR INDUSTRIES, INC.
Non-GAAP Reconciliation of Adjusted Statement of Operations
(unaudited)
(in thousands, except per share data)
 
Three Months Ended September 30, 2012

As

Reported

In GAAP
Statements

Acquisition
Related Costs

Restructuring
Costs

Adjusted
Statement of
Operations

Net sales $ 205,514 $ $ $ 205,514
Cost of sales 165,286   (58 ) (201 ) 165,027  
Gross profit 40,228 58 201 40,487
Selling, general, and administrative expense 24,479   (81 ) (141 ) 24,257  
Income from operations 15,749 139 342 16,230
Operating margin 7.7 % 0.1 % 0.2 % 7.9 %
 
Interest expense 4,688 4,688
Other income (55 )     (55 )
Income before income taxes 11,116 139 342 11,597
Provision for income taxes 4,094   81   17   4,192  
Income from continuing operations $ 7,022   $ 58   $ 325   $ 7,405  
Income from continuing operations per share – diluted $ 0.23   $   $ 0.01   $ 0.24  
       
 
GIBRALTAR INDUSTRIES, INC.
Non-GAAP Reconciliation of Adjusted Statement of Operations
(unaudited)
(in thousands, except per share data)
 
Three Months Ended September 30, 2011

As

Reported

In GAAP
Statements

Acquisition
Related
Costs

Restructuring
Costs

Adjusted
Statement of
Operations

Net sales $ 220,096 $ $ $ 220,096
Cost of sales 177,133     (522 ) 176,611  
Gross profit 42,963 522 43,485
Selling, general, and administrative expense 24,602   (156 ) 7   24,453  
Income from operations 18,361 156 515 19,032
Operating margin 8.3 % 0.1 % 0.2 % 8.6 %
 
Interest expense 4,869 4,869
Other expense 15       15  
Income before income taxes 13,477 156 515 14,148
Provision for income taxes 6,094     240   6,334  
Income from continuing operations $ 7,383   $ 156   $ 275   $ 7,814  
Income from continuing operations per share – diluted $ 0.24   $ 0.01   $ 0.01   $ 0.26  
 
 
GIBRALTAR INDUSTRIES, INC.
Non-GAAP Reconciliation of Adjusted Statement of Operations
(unaudited)
(in thousands, except per share data)
 
  Nine Months Ended September 30, 2012

As

Reported

In GAAP
Statements

 

Acquisition
Related Costs

 

Restructuring
Costs

 

Adjusted
Statement of
Operations

Net sales $ 617,419 $ $ $ 617,419
Cost of sales 499,984   (207 ) (3,080 ) 496,697  
Gross profit 117,435 207 3,080 120,722
Selling, general, and administrative expense 78,370   (193 ) (159 ) 78,018  
Income from operations 39,065 400 3,239 42,704
Operating margin 6.3 % 0.1 % 0.5 % 6.9 %
 
Interest expense 13,989 13,989
Other income (401 )     (401 )
Income before income taxes 25,477 400 3,239 29,116
Provision for income taxes 9,091   141   1,145   10,377  
Income from continuing operations $ 16,386   $ 259   $ 2,094   $ 18,739  
Income from continuing operations per share – diluted $ 0.53   $ 0.01   $ 0.07   $ 0.61  
         
 
GIBRALTAR INDUSTRIES, INC.
Non-GAAP Reconciliation of Adjusted Statement of Operations
(unaudited)
(in thousands, except per share data)
 
Nine Months Ended September 30, 2011

As

Reported

In GAAP
Statements

Acquisition
Related
Costs

Surrendered

Equity
Compensation

Restructuring
Costs

Adjusted
Statement of
Operations

Net sales $ 592,466 $ $ $ $ 592,466
Cost of sales 474,030 (2,467) (1,697) 469,866
Gross profit 118,436 2,467 1,697 122,600
Selling, general, and administrative expense 75,463 (770) (885) (476) 73,332
Income from operations 42,973 3,237 885 2,173 49,268
Operating margin 7.3% 0.5% 0.1% 0.4% 8.3%
 
Interest expense 14,321 14,321
Other income

(46)

(46)
Income before income taxes 28,698 3,237 885 2,173 34,993
Provision for income taxes 12,628 1,054 926 14,608
Income from continuing operations $ 16,070 $ 2,183 $ 885 $ 1,247 $ 20,385
Income from continuing operations per share – diluted $ 0.52 $ 0.08 $ 0.03 $ 0.04 $ 0.67
       
 
GIBRALTAR INDUSTRIES, INC.
Non-GAAP Reconciliation of Adjusted Statement of Operations
(unaudited)
(in thousands, except per share data)
 
Three Months Ended June 30, 2012

As

Reported

In GAAP
Statements

Acquisition
Related Costs

Restructuring
Costs

Adjusted
Statement of
Operations

Net sales $ 219,734 $ $ $ 219,734
Cost of sales 178,008   (89 ) (1,113 ) 176,806  
Gross profit 41,726 89 1,113 42,928
Selling, general, and administrative expense 25,433   (32 ) (4 ) 25,397  
Income from operations 16,293 121 1,117 17,531
Operating margin 7.4 % 0.1 % 0.5 % 8.0 %
 
Interest expense 4,627 4,627
Other income (315 )     (315 )
Income before income taxes 11,981 121 1,117 13,219
Provision for income taxes 4,066   45   419   4,530  
Income from continuing operations $ 7,915   $ 76   $ 698   $ 8,689  
Income from continuing operations per share – diluted $ 0.26   $   $ 0.02   $ 0.28  

Refer http://finance.yahoo.com/news/gibraltar-reports-third-quarter-financial-113000455.html

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