Gibraltar Reports Third Quarter Financial Results

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Gibraltar Reports Third Quarter Financial Results

BUFFALO, N.Y.--(BUSINESS WIRE)-- Gibraltar Industries, Inc. (NAS: 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 sales165,286 177,133 499,984 474,030 
Gross profit40,22842,963117,435118,436
Selling, general, and administrative expense24,479 24,602 78,370 75,463 
Income from operations15,74918,36139,06542,973
Interest expense4,6884,86913,98914,321
Other (income) expense(55)15 (401)(46)
Income before taxes11,11613,47725,47728,698
Provision for income taxes4,094 6,094 9,091 12,628 
Income from continuing operations7,0227,38316,38616,070
Discontinued operations:
Income (loss) before taxes162(276)913,621
(Benefit of) provision for income taxes(117)193 (174)6,563 
Income (loss) from discontinued operations279 (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 operations0.01 (0.01)0.01 0.23 
Net income$0.24 $0.23 $0.54 $0.76 
Weighted average shares outstanding - Basic30,765 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 operations0.01 (0.01)0.01 0.24 
Net income$0.24 $0.23 $0.54 $0.76 
Weighted average shares outstanding - Diluted30,838 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 reserve110,60590,595
Inventories109,239109,270
Other current assets 12,828  14,872 
Total current assets303,799268,854
 
Property, plant, and equipment, net142,875151,974
Goodwill348,943348,326
Acquired intangibles90,68095,265
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 expenses52,29860,687
Current maturities of long-term debt 417  417 
Total current liabilities125,932128,424
 
Long-term debt206,614206,746
Deferred income taxes56,15055,801
Other non-current liabilities23,56821,148
 
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

309307
Additional paid-in capital239,447236,673
Retained earnings246,006229,437
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 operations16,38616,070

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

Depreciation and amortization19,83819,515
Stock compensation expense2,7103,895
Non-cash charges to interest expense1,1861,689
Other non-cash adjustments3,3701,437

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 assets2,3059,509
Accounts payable Read Full Story

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