Gibraltar Reports Fourth-Quarter Financial Results

  Gibraltar Reports Fourth-Quarter Financial Results

  *Adjusted EPS of $0.05 for Quarter versus Prior Year Loss
  *Adjusted Full-Year EPS Increases 30% to $0.65, Driven by Performance
    Improvement Initiatives

Business Wire

BUFFALO, N.Y. -- February 22, 2013

Gibraltar Industries, Inc. (Nasdaq: ROCK), a leading manufacturer and
distributor of products for building and industrial markets, today reported
its financial results for the three- and twelve-month periods ended December
31, 2012. All financial metrics in this release reflect only the Company’s
continuing operations unless otherwise noted.

Fourth-Quarter Financial Results

Gibraltar’s net sales for the fourth quarter of 2012 were $172.6 million,
compared to $174.1 million for the fourth quarter of 2011. Fourth-quarter 2012
adjusted net income was $1.5 million, or $0.05 per diluted share, compared
with an adjusted loss of $5.1 million, or $0.17 per diluted share, in the
fourth quarter of 2011. The adjusted fourth-quarter 2012 results exclude
after-tax special charges of $5.2 million, or $0.17 per diluted share,
resulting primarily from intangible asset impairment, acquisition-related
costs and exit activity costs related to business restructuring. The adjusted
net loss for the fourth quarter of 2011 excluded after-tax special charges
totaling $1.8 million, or $0.05 per diluted share, primarily consisting of
acquisition-related costs and exit activity costs. Including these items in
the respective periods, the fourth quarter 2012 results were a net loss of
$3.7 million, or $0.12 per diluted share, compared with a loss of $6.9
million, or $0.22 per diluted share, in the fourth quarter of 2011.

Management Comments

“We concluded 2012 with strong year-over-year profit improvement in the fourth
quarter, achieved without the benefit of meaningful change in order volumes,”
said Chairman and Chief Executive Officer Brian Lipke. “Earnings were up
substantially, driven by initiatives we have undertaken during the past two
years to strengthen the performance of our business. As a result of this
performance improvement, 2012 was a better year for Gibraltar than 2011, and
was our second consecutive year of accelerating earnings growth, despite
historically low levels of activity in our traditional core markets.”

“As we expected, Gibraltar’s net sales for the fourth quarter of 2012 were
roughly flat with the same period last year,” said Henning Kornbrekke,
President and Chief Operating Officer. “This reflects the sluggish economic
conditions we continued to see in the quarter, highlighted by pockets of both
strength and weakness in our North American markets and the ongoing
recessionary environment in Europe where we derive less than 7% of sales.”

“We are continuing to generate roughly 40% of our total sales in the
industrial markets and 10% of our sales in the infrastructure markets,”
Kornbrekke said. “Product demand for bridge and highway construction
applications continued to be a bright spot for us, driven by our solid backlog
and a healthy mix of incoming orders, many of them related to large, long-term
infrastructure projects triggered by the availability of federal
transportation funding. We did not see increased activity in the European
automotive or North American oil and gas sectors. As a result, demand in these
industrial markets for our products remained stable for the second consecutive
quarter.”

“This was another quarter of generally soft end-market demand in the 50% of
our business directly related to residential and low-rise building markets,
including repair and remodeling,” Kornbrekke said. “The optimistic forecasts
we are receiving from our customers in the wholesale and retail channels
mirror the currently positive national statistics on housing starts and home
sales. However, the improving end-market environment is not likely to result
in stronger sales for Gibraltar until residential building activity begins its
seasonal acceleration late in the first quarter and into the second quarter,
and housing plans become actual projects and generate orders.”

“We have made substantial progress over the past five years in improving our
underlying operations, controlling expenses, and expanding margins in every
part of the business,” said Kornbrekke. “We also have been successful in
managing commodity costs, lowering our working capital, generating positive
cash flow and reducing our borrowings. We focused in 2012 on restructuring and
integrating our West Coast operations, and that process is nearly complete. As
a result of these initiatives, we have positioned our businesses so that we
can be efficient and profitable even at low demand levels in our major end
markets.”

Twelve-Month Financial Results

For the twelve months ended December 31, 2012, total net sales were $790.1
million, a 3% increase compared to $766.6 million in 2011. Adjusted net income
in the twelve months of 2012 was $20.2 million, or $0.65 per diluted share, a
30% increase compared with $15.3 million, or $0.50 per diluted share, in the
comparable period of 2011. The adjusted results for the twelve months of 2012
exclude after-tax special charges of $7.5 million, or $0.24 per diluted share,
for intangible asset impairment, acquisition-related costs and exit activity
costs related to business restructuring. Adjusted net income for the twelve
months of 2011 excluded after-tax special charges of $6.1 million, or $0.20
per diluted share, for acquisition-related costs, exit activity costs related
to business restructuring, and equity compensation declined by Mr. Lipke.
Including these items, net income was $12.7 million, or $0.41 per diluted
share for 2012, a 37% increase compared with $9.2 million, or $0.30 per
diluted share, in 2011.

Gibraltar’s liquidity was $165 million as of December 31, 2012, a combination
of cash on hand of $48 million and availability under the Company’s undrawn
revolving credit facility.

Outlook

“Gibraltar delivered stronger financial results in 2012 than it did in 2011,
and we are confident that we can extend this record of bottom-line growth
during the year ahead,” said Lipke. “This confidence is based on four factors.
First, we are becoming increasingly optimistic about the sustainability of the
positive trends we are currently seeing in the majority of our end markets. As
a result, we expect the leverage we have on a lower cost structure to result
in expanded margins and improved profitability. Second, we will no longer be
incurring the major restructuring charges related to our West Coast
integration that we incurred this past year. Third, we completed three
acquisitions in the fourth quarter of 2012, funded from our existing cash,
which we expect to be accretive in 2013. And fourth, we will have the benefit
of lower interest expense in 2013 as a result of the very successful bond
refinancing we completed three weeks ago.”

“In 2013, we are more strongly positioned for top-line growth,” said Lipke.
“Our acquisitions over the past two years have expanded both our category and
geographic coverage and, as a result, our underlying sales volume. In terms of
organic growth, Gibraltar has more products in more major retail stores than
at any time in the Company’s history. In addition, we are not only providing
our wholesale and retail customers with programs that have the potential to
further accelerate our sales in both channels, but we also have new products
coming out of our development pipeline that should be well-received by our
building products customers.”

“In light of the progress we have made internally and the brighter end-market
outlook, we are optimistic about Gibraltar’s prospects for growth on both the
top and bottom lines in 2013,” Lipke concluded.

Fourth-Quarter Conference Call Details

Gibraltar has scheduled a conference call today to review its results for the
fourth 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 leading
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, surrendered equity compensation, and
intangible asset impairment. 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 month period
ending March 31, 2013, on Thursday, May 2, 2013, and hold its earnings
conference call later that morning, starting at 9:00 a.m. ET.


GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
                                                               
                              Three Months Ended         Twelve months Ended
                              December 31,               December 31,
                                2012        2011           2012       2011
Net sales                     $ 172,639   $ 174,141      $ 790,058   $ 766,607
Cost of sales                   140,514     147,462        640,498     621,492
Gross profit                    32,125      26,679         149,560     145,115
Selling, general, and           26,301      33,494         104,671     108,957
administrative expense
Impairment of intangible        4,628       –              4,628       –
assets
Income (loss) from              1,196       (6,815)        40,261      36,158
operations
Interest expense                4,593       5,042          18,582      19,363
Other income                    (87)        (44)           (488)       (90)
(Loss) income before taxes      (3,310)     (11,813)       22,167      16,885
Provision for (benefit of)      426         (4,959)        9,517       7,669
income taxes
(Loss) income from              (3,736)     (6,854)        12,650      9,216
continuing operations
Discontinued operations:
(Loss) income before taxes      (298)       219            (289)       13,840
(Benefit of) provision for      (110)       (30)           (284)       6,533
income taxes
(Loss) income from              (188)       249            (5)         7,307
discontinued operations
                                                                       
Net (loss) income             $ (3,924)   $ (6,605)      $ 12,645    $ 16,523
                                                                       
Net (loss) income per share
– Basic:
(Loss) income from            $ (0.12)    $ (0.22)       $ 0.41      $ 0.30
continuing operations
(Loss) income from              (0.01)      –              –           0.24
discontinued operations
Net (loss) income             $ (0.13)    $ (0.22)       $ 0.41      $ 0.54
Weighted average shares         30,788      30,606         30,752      30,507
outstanding – Basic
                                                                       
Net (loss) income per share
– Diluted:
(Loss) income from            $ (0.12)    $ (0.22)       $ 0.41      $ 0.30
continuing operations
(Loss) income from              (0.01)      –              –           0.24
discontinued operations
Net (loss) income             $ (0.13)    $ (0.22)       $ 0.41      $ 0.54
Weighted average shares         30,926      30,606         30,857      30,650
outstanding – Diluted
                                                                       


GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
                                                               
                                                   December 31,   December 31,
                                                   2012           2011
Assets
Current assets:
Cash and cash equivalents                          $   48,028     $   54,117
Accounts receivable, net of reserve                    89,473         90,595
Inventories                                            116,357        109,270
Other current assets                                  13,380        14,872
Total current assets                                   267,238        268,854
                                                                      
Property, plant, and equipment, net                    151,613        151,974
Goodwill                                               359,863        348,326
Acquired intangibles                                   98,759         95,265
Other assets                                          6,201         7,636
                                                                      
Total assets                                       $   883,674    $   872,055
                                                                      
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable                                   $   69,060     $   67,320
Accrued expenses                                       47,432         60,687
Current maturities of long-term debt                  1,093         417
Total current liabilities                              117,585        128,424
                                                                      
Long-term debt                                         206,710        206,746
Deferred income taxes                                  57,068         55,801
Other non-current liabilities                          25,489         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, 30,938 and 30,702 shares issued in 2012        309            307
and 2011
Additional paid-in capital                             240,107        236,673
Retained earnings                                      242,082        229,437
Accumulated other comprehensive loss                   (1,575)        (3,350)
Cost of 350 and 281 common shares held in             (4,101)       (3,131)
treasury in 2012 and 2011
                                                                      
Total shareholders’ equity                            476,822       459,936
                                                                      
Total liabilities & shareholders’ equity           $   883,674    $   872,055
                                                                      


GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
                                                            
                                              Twelve Months Ended December 31,
                                              2012               2011
Cash Flows from Operating Activities
Net income                                    $   12,645         $  16,523
(Loss) income from discontinued operations       (5)              7,307
Income from continuing operations                 12,650            9,216
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization                     26,344            26,181
Intangible asset impairment                       4,628             -
Provision for deferred income taxes               994               5,028
Stock compensation expense                        3,148             4,642
Non-cash charges to interest expense              1,547             2,328
Other non-cash adjustments                        4,176             3,321
Increase (decrease) in cash resulting from
changes in the following (excluding the
effects of acquisitions):
Accounts receivable                               6,268             (7,612)
Inventories                                       (1,022)           (10,101)
Other current assets and other assets             2,409             10,172
Accounts payable                                  (3,770)           2,076
Accrued expenses and other non-current           (7,140)          4,577
liabilities
Net cash provided by operating activities         50,232            49,828
of continuing operations
Net cash used in operating activities of         (151)            (3,133)
discontinued operations
Net cash provided by operating activities        50,081           46,695
                                                                    
Cash Flows from Investing Activities
Purchases of property, plant, and equipment       (11,351)          (11,552)
Cash paid for acquisitions, net of cash           (45,071)          (109,248)
received
Purchase of other investment                      -                 (250)
Net proceeds from sale of businesses              -                 67,529
Net proceeds from sale of property and           659              1,226
equipment
Net cash used in investing activities of          (55,763)          (52,295)
continuing operations
Net cash provided by investing activities        -                2,089
of discontinued operations
Net cash used in investing activities            (55,763)         (50,206)
                                                                    
Cash Flows from Financing Activities
Proceeds from long-term debt                      -                 73,849
Long-term debt payments                           (473)             (74,262)
Excess tax benefit from stock compensation        10                –
Net proceeds from issuance of common stock        278               34
Payment of deferred financing fees                (18)              (1,570)
Purchase of treasury stock at market prices      (970)            (826)
Net cash used in financing activities            (1,173)          (2,775)
                                                                    
Effect of exchange rate changes on cash          766              (463)
                                                                    
Net decrease in cash and cash equivalents         (6,089)           (6,749)
                                                                    
Cash and cash equivalents at beginning of        54,117           60,866
year
                                                                    
Cash and cash equivalents at end of year      $   48,028         $  54,117
                                                                    


GIBRALTAR INDUSTRIES, INC.
Non-GAAP Reconciliation of Adjusted Statement of Operations
(unaudited)
(in thousands, except per share data)

                  Three Months Ended December 31, 2012
                   As            Acquisition    Intangible                     Adjusted
                   Reported       Related         Asset          Restructuring     Statement
                   In GAAP        Costs           Impairment     Costs             of
                   Statements                                                      Operations
Net sales        $ 172,639      $ —             $ —            $ —               $ 172,639
Cost of sales      140,514        (37)            —              (661)             139,816
Gross profit       32,125         37              —              661               32,823
Selling,
general, and       26,301         (263)           —              (104)             25,934
administrative
expense
Intangible
asset              4,628          —               (4,628)        —                 —
impairment
Income from        1,196          300             4,628          765               6,889
operations
Operating          0.7%           0.2%            2.7%           0.4%              4.0%
margin
                                                                                   
Interest           4,593          —               —              —                 4,593
expense
Other income       (87)           —               —              —                 (87)
(Loss) income
before income      (3,310)        300             4,628          765               2,383
taxes
Provision for      426            94              112            296               928
income taxes
(Loss) income
from             $ (3,736)      $ 206           $ 4,516        $ 469             $ 1,455
continuing
operations
(Loss) income
from
continuing       $ (0.12)       $ —             $ 0.15         $ 0.02            $ 0.05
operations per
share –
diluted
                                                                                   


GIBRALTAR INDUSTRIES, INC.
Non-GAAP Reconciliation of Adjusted Statement of Operations
(unaudited)
(in thousands, except per share data)
                                                             
                   Three Months Ended December 31, 2011
                   As             Acquisition                       Adjusted
                   Reported       Related         Restructuring     Statement
                   In GAAP        Costs           Costs             of
                   Statements                                       Operations
Net sales        $ 174,141      $ —             $ —               $ 174,141
Cost of sales      147,462        —               (2,219)           145,243
Gross profit       26,679         —               2,219             28,898
Selling,
general, and       33,494         (216)           (105)             33,173
administrative
expense
(Loss) income
from               (6,815)        216             2,324             (4,275)
operations
Operating          (3.9)%         0.1%            1.3%              (2.5)%
margin
                                                                    
Interest           5,042          —               —                 5,042
expense
Other income       (44)           —               —                 (44)
(Loss) income
before income      (11,813)       216             2,324             (9,273)
taxes
(Benefit of)
provision for      (4,959)        —               757               (4,202)
income taxes
(Loss) income
from             $ (6,854)      $ 216           $ 1,567           $ (5,071)
continuing
operations
(Loss) income
from
continuing       $ (0.22)       $ 0.00          $ 0.05            $ (0.17)
operations per
share –
diluted
                                                                    


GIBRALTAR INDUSTRIES, INC.
Non-GAAP Reconciliation of Adjusted Statement of Operations
(unaudited)
(in thousands, except per share data)

                  Twelve Months Ended December 31, 2012
                   As            Acquisition    Intangible                     Adjusted
                   Reported       Related         Asset          Restructuring     Statement
                   In GAAP        Costs           Impairment     Costs             of
                   Statements                                                      Operations
Net sales        $ 790,058      $ —             $ —            $ —               $ 790,058
Cost of sales      640,498        (244)           —              (3,741)           636,513
Gross profit       149,560        244             —              3,741             153,545
Selling,
general, and       104,671        (456)           —              (263)             103,952
administrative
expense
Intangible
asset              4,628          —               (4,628)        —                 —
impairment
Income from        40,261         700             4,628          4,004             49,593
operations
Operating          5.1%           0.1%            0.6%           0.5%              6.3%
margin
                                                                                   
Interest           18,582         —               —              —                 18,582
expense
Other income       (488)          —               —              —                 (488)
Income before      22,167         700             4,628          4,004             31,499
income taxes
Provision for      9,517          235             112            1,441             11,305
income taxes
Income from
continuing       $ 12,650       $ 465           $ 4,516        $ 2,563           $ 20,194
operations
Income from
continuing
operations per   $ 0.41         $ 0.01          $ 0.15         $ 0.08            $ 0.65
share –
diluted
                                                                                   


GIBRALTAR INDUSTRIES, INC.
Non-GAAP Reconciliation of Adjusted Statement of Operations
(unaudited)
(in thousands, except per share data)

                  Twelve Months Ended December 31, 2011
                   As                                                               Adjusted
                   Reported                     Surrendered     Restructuring    Statement
                   In GAAP        Acquisition     Equity           Costs             of
                   Statements     Related         Compensation                       Operations
                                  Costs
Net sales        $ 766,607      $ —             $ —              $ —               $ 766,607
Cost of sales      621,492        (2,467)         —                (3,916)           615,109
Gross profit       145,115        2,467           —                3,916             151,498
Selling,
general, and       108,957        (986)           (885)            (581)             106,505
administrative
expense
Income from        36,158         3,453           885              4,497             44,993
operations
Operating          4.7%           0.5%            0.1%             0.6%              5.9%
margin
                                                                                     
Interest           19,363         —               —                —                 19,363
expense
Other income       (90)           —               —                —                 (90)
Income before      16,885         3,453           885              4,497             25,720
income taxes
Provision for      7,669          1,054           —                1,683             10,406
income taxes
Income from
continuing       $ 9,216        $ 2,399         $ 885            $ 2,814           $ 15,314
operations
Income from
continuing
operations per   $ 0.30         $ 0.08          $ 0.03           $ 0.09            $ 0.50
share –
diluted

Contact:

Gibraltar Industries, Inc.
Kenneth Smith, 716-826-6500 ext. 3217
Chief Financial Officer
kwsmith@gibraltar1.com
 
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