FORM ~~10-Q/A~~10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

~~Amendment No. 1~~

(Mark one)

( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, ~~2004~~2005

( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to ______

�� Commission file number 0-22462

Gibraltar ~~Steel Corporation~~Industries, Inc.

(Exact name of Registrant as specified in its charter)

Delaware 16-1445150

(State or other jurisdiction of (I.R.S. Employer

incorporation or organization) Identification No.)

3556 Lake Shore Road, P.O. Box 2028, Buffalo, New York 14219-0228

(Address of principal executive offices)

(716) ~~826-6500~~826-6500----

(Registrant's telephone number, including area code)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X . No __.

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes X . No __.

As of ~~June 30, 2004,~~August 1, 2005, the number of common shares outstanding was: ~~19,624,200.~~

29,667,686.

GIBRALTAR ~~STEEL CORPORATION~~

INDUSTRIES, INC.

INDEX

		PAGE NUMBER
PART 1.	FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)
	Condensed Consolidated Balance Sheets as of June 30, ~~2004~~2005 and December 31, ~~2003~~2004	3

	Condensed Consolidated Statements of Income For the Three and Six Months Ended June 30, ~~2004~~2005 and ~~2003~~2004	4

	Condensed Consolidated Statements of Cash Flows For the Six Months Ended June 30, ~~2004~~2005 and ~~2003~~2004	5

	Notes to Condensed Consolidated Financial Statements	6-16

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	17-23

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2423

Item 4.	Controls and Procedures	2423-24

PART II.	OTHER INFORMATION	~~25-27~~24-26

~~The Registrant hereby amends its 10-Q for the Quarterly period ended June 30, 2004 to add Exhibit 10.1 which was inadvertently not appended to the filing.~~

PART I FINANCIAL INFORMATION
Item 1. Financial Statements
GIBRALTAR STEEL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)

   June 30,                  December 31,

2004

       2003

(unaudited)

(audited)
Assets

Current assets:

                Cash and cash equivalents
$
10,297

$
29,019
                Accounts receivable, net

162,863

102,591
                Inventories

141,233

107,531
                Other current assets

11,204

10,309
                        Total current assets

325,597

249,450

Property, plant and equipment, net

265,978

250,029
Goodwill

280,853

267,157
Investments in partnerships

6,643

5,044
Other assets

5,924

6,063

$
884,995

$
777,743

Liabilities and Shareholders' Equity

Current liabilities:

                Accounts payable
$
76,065

$
49,879
                Accrued expenses

42,948

29,029
                Current maturities of long-term debt

19,192

19,848
                        Total current liabilities

138,205

98,756

Long-term debt

255,711

222,402
Deferred income taxes

59,992

55,982
Other non-current liabilities

5,553

6,422
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 19,651,200 and 19,274,069 shares in 2004 and 2003, respectively

196

193
                Additional paid-in capital

207,053

199,206
                Retained earnings

219,063

196,138
                Unearned compensation

(648)

(818)
                Accumulated other comprehensive loss

(130)

(538)


425,534

394,181
Less: cost of 27,000 and 19,000 common shares held in treasury in
2004 and 2003, respectively

-

-
                   Total shareholders' equity

425,534

394,181

$
884,995

$
777,743

See accompanying notes to condensed consolidated financial statements

GIBRALTAR STEEL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share date)

Three Months Ended
June 30,
Six Months Ended
June 30,

2004

2003

2004

2003

(unaudited)
(unaudited)
(unaudited)
(unaudited)

Net sales
$
257,485
$
203,406
$
469,480
$
364,938

Cost of sales

199,183

162,902

368,418

295,359

     Gross profit

58,302

40,504

101,062

69,579

Selling, general and administrative expense

30,721

23,185

55,272

41,618

     Income from operations

27,581

17,319

45,790

27,961

Other (income) expense:

Equity in partnerships' income

(1,186)

(137)

(1,726)

(208)
Interest expense

3,239

3,704

6,542

6,244
Total other expense

2,053

3,567

4,816

6,036

     Income before taxes

25,528

13,752

40,974

21,925

Provision for income taxes

10,084

5,501

16,185

8,770

     Net income
$
15,444
$
8,251
$
24,789
$
13,155

Net income per share - Basic
$
.79
$
.52
$
1.27
$
.83

Weighted average shares outstanding - Basic

19,539

15,938

19,485

15,925

Net income per share - Diluted
$
.78
$
.51
$
1.26
$
.82

Weighted average shares outstanding - Diluted

19,703

16,103

19,641

16,086

PART I FINANCIAL INFORMATION Item 1. Financial Statements GIBRALTAR INDUSTRIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)

		June 30 2005		December 31 2004
		(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	7,025	$	10,892
Accounts receivable, net		171,940		146,021
Inventories		199,061		207,215
Other current assets		11,825		15,479
Total current assets		389,851		379,607

Property, plant and equipment, net		254,643		269,019
Goodwill		269,881		285,927
Investments in partnerships		7,753		8,211
Other assets		14,148		14,937
	$	936,276	$	957,701

Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable	$	65,001	$	70,775
Accrued expenses		51,305		51,885
Current maturities of long-term debt		8,860		8,859
Current maturities of related party debt		5,833		5,833
Total current liabilities		130,999		137,352

Long-term debt		257,915		289,514
Long-term related party debt		-		5,833
Deferred income taxes		64,412		66,485
Other non-current liabilities		5,065		4,774
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 29,707,186 and 29,665,780 shares in 2005 and 2004, respectively		297		297
Additional paid-in capital		216,488		209,765
Retained earnings		265,834		242,585
Unearned compensation		(6,313)		(572)
Accumulated other comprehensive loss		1,579		1,668
		477,885		453,743
Less: cost of 40,500 common shares held in treasury in 2005 and 2004		-		-
Total shareholders' equity		477, 885		453,743
	$	936,276	$	957,701
See accompanying notes to condensed consolidated financial statements

GIBRALTAR INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited) (in thousands, except per share date)
		Three Months Ended June 30,							Six Months Ended June 30,
				2005			2004			2005			2004

Net sales	$		288,388		$	249,092		$	561,969		$	453,699

Cost of sales			231,922			192,302			455,371			355,496

Gross profit			56,466			56,790			106,598			98,203

Selling, general and administrative expense			27,188			29,719			56,424			53,318

Income from operations			29,278			27,071			50,174			44,885

Other (income) expense:
Equity in partnerships' loss (income), and other income			93			(1,186)			(351)			(1,726)
Interest expense			3,816			2,977			7,744			6,027
Total other expense			3,909			1,791			7,393			4,301

Income before taxes			25,369			25,280			42,781			40,584

Provision for income taxes			9,454			9,986			16,244			16,031
Net income from continuing operations			15,915			15,294			26,537			24,553

Discontinued operations: (Loss) income from discontinued operations Income tax (benefit) expense Net income (loss) from discontinued operations			(728) (284) (444)			248 98 150			(524) (204) (320)			390 154 236

Net income	$		15,471		$	15,444		$	26,217		$	24,789

Net income per share - Basic: Income from continuing operations (Loss) income from discontinued operations			.54 (.01)			.52 .01			.90 (.01)			.84 .01
Net income	$		.53		$	.53		$	.89		$	.85

Weighted average shares outstanding - Basic			29,606			29,308			29,588			29,227
Net income per share - Diluted: Income from continuing operations (Loss) income from discontinued operations			.53 (.01)			.51 .01			.89 (.01)			.83 .01
Net income	$		.52		$	.52		$	.88		$	.84

Weighted average shares outstanding - Diluted			29,762			29,554			29,769			29,462

See accompanying notes to condensed consolidated financial statements

GIBRALTAR STEEL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

Six Months Ended
June 30

2004

2003

(unaudited)

(unaudited)

Cash flows from operating activities

Net income
$
24,789
$
13,155
Adjustments to reconcile net income to net cash provided by operating activities

Depreciation and amortization

12,001

10,957
Provision for deferred income taxes

2,245

1,402
Equity in partnerships' income

(1,726)

(208)
Distributions from partnerships

846

411
Unearned compensation, net of restricted stock forfeitures

69

194
Other noncash adjustments

48

110
Increase (decrease) in cash resulting from changes

   in (net of acquisitions):

     Accounts receivable

(47,036)

(23,699)
     Inventories

(25,393)

(441)
     Other current assets

619

(2,392)
     Accounts payable and accrued expenses

36,167

10,468
     Other assets

(997)

(263)

       Net cash provided by operating activities

1,632

9,694

Cash flows from investing activities

Acquisitions, net of cash acquired

(48,600)

(83,580)
Purchases of property, plant and equipment

(10,261)

(10,169)
Net proceeds from sale of property and equipment

316

265

     Net cash used in investing activities

(58,545)

(93,484)

Cash flows from financing activities

Long-term debt reduction

(25,506)

(25,924)
Proceeds from long-term debt

57,680

115,464
Payment of dividends

(1,751)

(1,281)
Net proceeds from issuance of common stock

7,768

317

     Net cash provided by financing activities

38,191

88,576

     Net (decrease) increase in cash and cash equivalents

(18,722)

4,786

Cash and cash equivalents at beginning of year

29,019

3,662

Cash and cash equivalents at end of period
$
10,297
$
8,448
See accompanying notes to condensed consolidated financial statements

GIBRALTAR INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (in thousands)
	Six Months Ended June 30,
					2005			2004
Cash flows from operating activities
Net income		$			26,217	$		24,789
Net (loss) income from discontinued operations					(320)			236
Net income from continuing operations					26,537			24,553
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization					13,286			11,653
Provision for deferred income taxes				(786)				2,245
Equity in partnerships' income				(294)				(1,726)
Distributions from partnerships				748				846
Unearned compensation, net of restricted stock forfeitures				327				69
Other noncash adjustments				202				133
Increase (decrease) in cash resulting from changes
in (net of acquisitions and dispositions):
Accounts receivable				(32,872)				(46,094)
Inventories				1,862				(24,929)
Other current assets				1,858				561
Accounts payable and accrued expenses				(3,918)				37,235
Other assets				(3,306)				(997)

Net cash provided by continuing operations				3,644				3,549
Net cash used in discontinued operations				(486)				(1,832)
Net cash provided by operating activities				3,158				1,717

Cash flows from investing activities
Acquisitions, net of cash acquired				-				(48,600)
Purchases of property, plant and equipment				(10,385)				(9,783)
Net proceeds from sale of property and equipment				249				230
Net proceeds from sale of business				42,594				-

Net cash provided by (used in) investing activities for continuing operations			32,458				(58,153)
Net cash provided by (used in) investing activities for discontinued operations				397				(477)
Net cash provided by (used in) investing activities				32,855				(58,630)

Cash flows from financing activities
Long-term debt reduction				(47,430)				(25,506)
Proceeds from long-term debt				10,000				57,680
Payment of dividends				(2,970)				(1,751)
Net proceeds from issuance of common stock				520				7,768

Net cash (used in) provided by financing activities				(39,880)				38,191

Net decrease in cash and cash equivalents				(3,867)				(18,722)

Cash and cash equivalents at beginning of year				10,892				29,019

Cash and cash equivalents at end of period		$		7,025		$		10,297
See accompanying notes to condensed consolidated financial statements

GIBRALTAR ~~STEEL CORPORATION~~
INDUSTRIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The accompanying condensed consolidated financial statements as of June 30, ~~2004~~2005 and ~~2003~~2004 have been prepared by Gibraltar ~~Steel Corporation~~Industries, Inc. (the Company) without audit. In the opinion of management, all adjustments (consisting of normal recurring adjustments and accruals) necessary to present fairly the financial position, results of operations and cash flows at June 30, ~~2004~~2005 and ~~2003~~2004 have been included.

Certain information and footnote disclosures including significant accounting policies normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements included in the Company's Annual Report to Shareholders for the year ended December 31, ~~2003,~~2004, as filed on Form 10-K.

Certain ~~2003~~2004 amounts have been reclassified to conform with ~~2004 presentation.~~2005 presentation as discussed in Note 7.

The results of operations for the three and six month ~~period~~periods ended June 30, ~~2004~~2005 are not necessarily indicative of the results to be expected for the full year.

2. STOCK BASED COMPENSATION

~~2. INVENTORIES~~

~~Inventories consist~~On May 19, 2005 the shareholders of the Company authorized the Gibraltar Industries, Inc. 2005 Equity Incentive Plan (the "Plan"). Under the terms of the Plan, the Board of Directors of the Company may grant incentive stock options, non-qualified stock options, restricted shares, restricted share units, performance shares, performance share units, or rights or combinations thereof to officers, directors and employees. The aggregate number of shares that may be distributed under the plan is limited to 2,250,000 shares of common stock. Of that number, no more than 1,350,000 shares can be awarded in form of restricted shares and restricted units, and no more than 900,000 shares can be awarded in the form of incentive stock options and rights. Option grants under the Plan must be made prior to February 19, 2015, and are exercisable at the discretion of the Board of Directors in no event more than 10 years from the date of grant.

Upon approval of the Plan, 283,036 restricted units, 20,000 restricted shares, and 2,016 non qualified options were issued to officers, directors and employees. At June 30, 2005, 1,944,928 shares were available to grant under the Plan. Of these shares, 1,046,964 shares were available to grant as restricted shares and restricted units and 900,000 shares were available to grant as incentive stock options and rights.

The Company accounts for the Plan under the recognition and measurement principles of Accounting Principles Board Opinion No. 25("APB No. 25"), "Accounting for Stock Issued to Employees", and related interpretations. Under APB No. 25, compensation expense is based on the difference, if any, on the date of the grant between the fair value of the common stock and the exercise price of the award. The following table illustrates the effect on net income and earnings per share if the Company had applied the fair value recognition provisions of SFAS No. 123, "Accounting for Stock-Based Compensation", to stock-based employee compensation (in ~~thousands)~~thousands, except per share data):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
		2005		2004		2005		2004

Net income from continuing operations, as reported	$	15,915	$	15,294	$	26,537	$	24,553

Add: Compensation expense recognized in net income, net of related tax effects		176		39		214		77

Deduct: Stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects
		(176)		(145)		(214)		(268)

Pro forma net income	$	15,915	$	15,188	$	26,537	$	24,363

Net income from continuing operations per share: Basic-as reported	$	.54	$	.52	$	.90	$	.84
Basic-pro forma	$	.54	$	.52	$	.90	$	.83

Diluted-as reported	$	.53	$	.51	$	.89	$	.83

The fair value of option grants is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions:

June 30,

December 31,

2004

2003

(unaudited)

(audited)

Raw material
$
67,600
$
53,737
Work-in process

23,640

21,033
Finished goods

49,993

32,761

Total inventories
$
141,233
$
107,531

2005
                                    Expected dividend yield                        1.0%
                                    Expected stock price volatility             42.05
                                    Risk-free interest rate                            3.84%
                                    Expected life of option                        5 years

3. SHAREHOLDERS' EQUITY AND COMPREHENSIVE INCOME

The changes in shareholders' equity and comprehensive income consist of (in thousands):

Comprehensive

Common Stock

Additional
Paid-In

Retained

Unearned

Accumulated
Other Comprehensive

Treasury Stock

Total
Shareholders'

Income

Shares

Amount

Capital

Earnings

Compensation

Loss

Shares

Amount

Equity

Balance at December 31, 2003

19,255

$
193

$
199,206

$
196,138

$
(818)

$
(538)

19

$
-

$
394,181

Comprehensive income:

Net income

$
24,789

-

-

-

24,789

-

-

-

-

24,789
Other comprehensive income (loss):

   Foreign currency translation adjustment,
    net of tax of $121

(356)

-

-

-

-

-

-

-

-

-
   Minimum pension liability adjustment

-

-

-

-

-

-

-

-

-

-
   Unrealized gain on interest rate swaps, net
     of tax of $488

764

-

-

-

-

-

-

-

-

-
       Other comprehensive income

408

-

-

-

-

-

408

-

-

408
       Total comprehensive income

$
25,197

Issuance of stock associated with public
   Offering

215

2

5,044

-

-

-

-

-

5,046
Stock options exercised

162

1

2,721

-

-

-

-

-

2,722
Tax benefit from exercise of stock options

-

-

268

-

-

-

-

-

268
Cash dividends - $.095 per share

-

-

-

(1,864)

-

-

-

-

(1,864)
Earned portion of restricted stock

-

-

-

-

77

-

-

-

77
Forfeiture of restricted stock awards

(8)

-

(186)

-

93

-

8

-

(93)

Balance at June 30, 2004

19,624

$
196

$
207,053

$
219,063

$
(648)

$
(130)

27

$
-

$
425,534

																		Accumulated
	Comprehensive			Common Stock					Additional Paid-In			Retained			Unearned			Other Comprehensive			Treasury Stock					Total Shareholders'
	Income			Shares		Amount			Capital			Earnings			Compensation			Income			Shares		Amount			Equity

Balance at January 1, 2005					29,625		$	297		$	209,765		$	242,585		$	(572)		$	1,668		41		$	-		$	453,743

Comprehensive income:
Net income		$	26,217		-			-			-			26,217			-			-		-			-			26,217
Other comprehensive income (loss):
Foreign currency translation adjustment, net of tax of $93			(231)		-			-			-			-			-			-		-			-			-
Unrealized gain on interest rate swaps, net of tax of $91			142		-			-			-			-			-			-		-			-			-
Other comprehensive income			(89)		-			-			-			-			-			(89)		-			-			(89)
Total comprehensive income		$	26,128

Issuance of restricted stock and restricted stock units					-			-			6,044			-			(6044)			-		-			-			-
Stock options exercised					41			-			521			-			-			-		-			-			521
Tax benefit from exercise of stock options					-			-			158			-			-			-		-			-			158
Cash dividends - $.10 per share					-			-			-			(2,968)			-			-		-			-			(2,968)
Earned portion of restricted stock					-			-			-			-			303			-		-			-			303

Balance at June 30, 2005					29,666		$	297		$	216,488		$	265,834		$	(6,313)		$	1,579		41		$	-		$	477,885

The cumulative balance of each component of accumulated other comprehensive loss, net of tax, is as follows (in thousands):

Foreign currency translation adjustment

Minimum pension liability adjustment

Unrealized gain/(loss) on interest rate swaps

Accumulated other comprehensive loss

Balance at December 31, 2003
$
977
$
(58)
$
(1,457)
$
(538)
Current period change

(356)

-

764

408
Balance at June 30, 2004
$
621
$
(58)
$
(693)
$
(130)


Balance at January 1, 2005	$	1,935	$	(125)	$	(142)	$	1,668
Current period change		(231)		-		142		(89)
Balance at June 30, 2005	$	1,704	$	(125)	$	-	$	1,579

Total comprehensive income for the three and six months ended June 30, ~~2004,~~2005, was ~~$9,472,000~~$14,880,000 and ~~$25,197,000,~~$26,128,000, respectively
and for the three and six months ended June 30, ~~2003,~~2004 was ~~$5,769,000~~$15,725,000 and ~~$14,558,000,~~$25,197,000, respectively.

4. INVENTORIES
Inventories consist of the following (in thousands):

		June 30,		December 31,
		2005		2004

Raw material	$	106,933	$	121,614
Work-in process		32,751		27,279
Finished goods		59,377		58,322

Total inventories	$	199,061	$	207,215

4.5. NET INCOME PER SHARE

Basic ~~net~~ income per share ~~equals net income divided by~~is based on the weighted average number of common shares ~~outstanding for the six months ended June 30, 2004 and 2003. The computation of diluted net~~outstanding. Diluted income per share ~~includes all dilutive common stock equivalents in~~is based on the weighted average number of common shares ~~outstanding.~~outstanding, as well as dilutive potential common shares which, in the Company's case, comprise shares issuable under the stock option and restricted stock plans. The treasury stock method is used to calculate dilutive shares, which reduces the gross number of dilutive shares by the number of shares purchasable from the ~~assumed~~ proceeds of ~~common stock equivalents. Common stock equivalents relating~~the options assumed to ~~stock options~~be exercised.

The following table sets forth the computation of basic and restricted stock awards of 163,895 and 165,187 for the three months ended June 30, 2004 and 2003, respectively, and 156,485 and 160,656 for the six months ended June 30, 2004 and 2003, respectively, are included in diluted ~~shares.~~earnings per share as of:

		Three Months Ended June 30,			Six Months Ended June 30,
	2005		2004			2005		2004
Numerator:
Income available to common stockholders from continuing operations	$15,915,000			$ 15,294,000			$26,537,000	$ 24,553,000

Weighted average shares outstanding		29,605,510		29,308,247			29,588,337		29,227,457

Denominator for diluted income per share:
Weighted average shares outstanding		29,605,510		29,308,247			29,588,337		29,227,457
Common stock options and restricted stock		156,464		245,843			180,299		234,727

Weighted average shares and conversions		29,761,974		29,554,090			29,768,636		29,462,184

At June 30, ~~2004,~~2005, options to purchase ~~343,256~~357,290 shares of the Company's common stock were outstanding and were exercisable at prices ranging from ~~$10.00~~$7.33 to $21.75 per share. ~~Of this total, 297,768 options were vested and exercisable.~~ At June 30, ~~2004, all~~2005, 355,244 options were exercisable ~~options had~~at an exercise price below the ~~$32.82~~$21.94 per share market price of the Company's common stock. At June 30, ~~2003, 762,936~~2004 options to purchase 514,884 shares of the Company's common stock were outstanding and exercisable at prices ranging from $6.67 to $14.50 per share. At June 30, 2004, 446,652 options were vested and were exercisable ~~of which 561,761 had~~at an exercise price below the ~~$20.56~~$21.88 per share market price of the Company's common stock.

5.6. ACQUISITIONS

On April 1, 2003, the Company acquired all of the outstanding stock of Construction Metals, Inc. (Construction Metals). Construction Metals is headquartered in Ontario, California and is a manufacturer of a wide array of building and construction products that are sold to retail and wholesale customers throughout the western United States. The acquisition of Construction Metals allowed the Company to strengthen its distribution network in the building products market. The results of operations of Construction Metals (included in the Company's Building Products segment) have been included in the Company's consolidated financial statements since the date of acquisition.

The aggregate purchase consideration for the acquisition of Construction Metals was approximately $29,185,000, which was comprised of approximately $11,685,000 in cash, including direct acquisition costs, and $17,500,000 of unsecured subordinated debt, payable to the former owners of Construction Metals. The purchase price was allocated to the assets acquired and liabilities assumed based upon respective fair market values. The fair market values of the property, plant and equipment and identifiable intangible assets are supported by an independent valuation. The identifiable intangible assets consisted of non-competition agreements with an aggregate fair market value of approximately $830,000. See Note 6 for further discussion. The excess consideration over such fair value was recorded as goodwill and aggregated approximately $19,546,000, none of which is deductible for tax purposes. The allocation of purchase consideration to the assets acquired and liabilities assumed is as follows (in thousands):

Working capital
$
3,485
Property, plant and equipment

5,669
Intangible assets

830
Goodwill

19,546

$
29,530

As part of the purchase agreement between the Company and the former owners of Construction Metals, the Company may be required to pay additional consideration if certain net sales levels as defined in the purchase agreement are achieved during the period from acquisition up to March 31, 2006. During the second quarter of 2005 and 2004 ~~a payment~~payments of $1,332,000 and $345,000, ~~was~~respectively, were made pursuant to the additional consideration.

On May 1, 2003, the Company acquired all of the outstanding stock of Air Vent Inc. (Air Vent). Air Vent is headquartered in Dallas, Texas and is primarily engaged in the manufacture and distribution of a complete line of ventilation products and accessories. The acquisition of Air Vent allowed the Company to strengthen its position in the building products market. The results of operations of Air Vent (included in the Company's Building Products segment) have been included in the Company's consolidated financial statements since the date of acquisition.

The aggregate purchase consideration for the acquisition of Air Vent was approximately $117,798,000, which was comprised of approximately $75,503,000 in cash, including direct acquisition costs, and $42,295,000 of unsecured subordinated debt, payable to the former owner of Air Vent. The purchase price was allocated to the assets acquired and liabilities assumed based upon respective fair market values. The fair market values of the property, plant and equipment and identifiable intangible assets are supported by an independent valuation. The identifiable intangible assets consisted of non-competition agreements with an aggregate fair market value of approximately $1,400,000. See Note 6 for further discussion. The excess consideration over such fair value was recorded as goodwill and aggregated approximately $103,104,000. The allocation of purchase consideration to the assets acquired and liabilities assumed is as follows (in thousands):

Working capital
$
2,997
Property, plant and equipment

10,297
Intangible assets

1,400
Goodwill

103,104

$
117,798

The Company and the former owner of Air Vent have made a joint election under Internal Revenue Code (IRC) Section 338(h)(10) which allows the Company to treat the stock purchase as an asset purchase for tax purposes. As a result of the 338(h)(10) election, goodwill in the amount of $103,104,000 is fully deductible for tax purposes.

On January 1, 2004, the Company acquired all of the outstanding stock of Renown Specialties Company Ltd. (Renown). Renown is headquartered in Thornhill, Ontario and is a designer, manufacturer and distributor of construction hardware products in Canada. The acquisition of Renown served to broaden the Company's product lines and strengthen its existing position in the building products market. The results of operations of Renown (included in the Company's Building Products segment) have been included in the Company's consolidated financial statements since the date of acquisition.

The aggregate purchase consideration for the acquisition of Renown was approximately $5,870,000 which was comprised solely of cash, including direct acquisition costs. The purchase price was allocated to the assets acquired and liabilities assumed based upon respective fair market values. The fair market values of the property, plant and equipment and identifiable intangible assets are supported by an independent valuation. The identifiable intangible assets consisted of non-competition agreements with an aggregate fair market value of $35,000, trademarks / trade names with an aggregate fair market value of $100,000, and customer relationships with an aggregate fair market value of $80,000. See Note 6 for further discussion.

The excess consideration over such fair value was recorded as goodwill and aggregated approximately $3,201,000, none of which is deductible for tax purposes. The allocation of purchase consideration to the assets acquired and liabilities assumed is as follows (in thousands):

Working capital
$
1,504
Property, plant and equipment

950
Intangible assets

215
Goodwill

3,201

$
5,870

On June 1, 2004, the Company acquired the net assets of SCM Metal Products, Inc. (SCM). SCM is headquartered in Research Triangle Park, North Carolina and manufactures, markets and distributes non-ferrous metal powder products to customers in a number of different industries, including the automotive, aerospace, electronics and consumer products industries. The results of operations of SCM (included in the Company's ~~Heat Treating~~Processed Metal Products segment) have been included in the Company's consolidated financial statements since the date of acquisition.

The aggregate purchase consideration for the acquisition of SCM was approximately ~~$41,703,000~~$42,882,000 in cash and acquisition costs. The purchase price was allocated to the assets acquired and liabilities assumed based upon ~~a preliminary valuation of~~ respective fair market values. ~~A final valuation is expected to be completed in~~The fair market values of the ~~third quarter~~properly, plant, and equipment and identifiable intangible assets were determined with the assistance of ~~2004.~~an independent valuation. The identifiable intangible assets consisted of trademarks/trade names with an aggregate value of $440,000 (indeterminable useful life), unpatented technology with a value of $900,000 (10-year weighted average useful life) and customer relationships with a value of $5,560,000 (15-year weighted average useful life). The excess consideration over such fair value was recorded as goodwill and aggregated approximately ~~$9,494,000,~~$4,238,000, which is fully deductible for tax purposes. The allocation of purchase consideration to the assets acquired and liabilities assumed is as follows (in thousands):

Working capital
$
15,368
Property, plant and equipment

16,841
Intangible assets

-
Goodwill

9,494

$
41,703

Working capital	$	15,863
Property, plant and equipment		15,881
Intangible assets		6,900
Goodwill		4,238
	$	42,882

The following unaudited pro forma financial information (in thousands, except for per share data) presents the combined results of operations as if the ~~acquisitions~~SCM acquisition had occurred on January 1, ~~2003.~~2004. The pro forma information includes certain adjustments, including depreciation expense, interest expense and certain other adjustments, together with related income tax effects. The pro forma amounts may not be indicative of the results that actually would have been achieved had the acquisitions occurred as of January 1, ~~2003~~2004 and are not necessarily indicative of future results of the combined companies:

    Three Months Ended                Six Months Ended
          June 30, 2004                        June 30, 2005
            (unaudited)                             (unaudited)

		June 30, 2004 (unaudited)		June 30, 2003 (unaudited)

Net sales	$	494,810	$	418,628	$	259,218	$	479,029

Net income	$	26,485	$	15,508
Net income from continuing operation					$	15,933	$	26,152

Net income per share - Basic	$	1.36	$	.97	$	.54	$	.89

Net income per share - Diluted	$	1.35	$	.96	$	.54	$	.89

7. DISCONTINUED OPERATIONS

~~On February 16, 2004,~~
As part of its continuing evaluation of its business, the Company ~~acquired~~determined that Milcor was not positioned to obtain a leadership position in its marketplace. We were approached by a market leader from Milcor's marketplace and on January 27, 2005, the Company sold the net assets of ~~Covert Operations, Inc. (Covert),~~its Milcor subsidiary, which included

Portals Plus, for approximately $42,594,000. During the second quarter we reached an agreement with the purchaser regarding the final working capital adjustment, which resulted in a ~~manufacturer~~loss of ~~epoxies~~$728,000 on the sale. The carrying amounts of the assets and ~~crack injection systems~~liabilities sold were as follows (in thousands):

Current Assets	$	14,176
Property, Plant and Equipment		11,861
Intangible Assets		1,774
Goodwill		17,303
Current Liabilities		(1,792)
Net Assets	$	43,322

The results of operations for ~~concrete~~Milcor for the current and ~~masonry.~~prior period have been classified as discontinued operations in the condensed consolidated statements of income. Components of the net income from discontinued operations of Milcor are as follows:

	Three Months Ended June 30,					Six Months Ended June 30,
		2005		2004		2005		2004

Net sales	$	-	$	8,393	$	3,452	$	15,781
Expenses		728		8,145		3,976		15,391

Income (loss) from discontinued operations	$	(728)	$	248	$	(524)	$	390

We have identified a contingent liability with regards to Milcor that is currently not estimable. The ~~aggregate purchase consideration~~contingent liability relates to a potential payment to the Internal Revenue Service for a potential tax liability on the basis step-up of ~~Covert was approximately $1,265,000, including direct acquisition costs. The~~the assets acquired with the acquisition of ~~Covert resulted~~Portals Plus. We have engaged an independent valuation specialist to assist with its determination whether a step-up in ~~approximately $569,000~~basis of these assets occurred, and if so, what the step-up in ~~goodwill, which is fully deductible for tax purposes. The acquisition of Covert is not considered~~basis was, and expect this valuation to be ~~material~~completed during 2005, at which time, if required, the Company will recognize additional expense related to the ~~Company's consolidated results~~disposal of ~~operations.~~these assets. We also retained a liability related to a multi-employer pension plan to fund the terminated pensions of the union employees of Milcor. We have accrued $59,000 for the termination based on the information that is available. The administrator of the plan has engaged the plan's actuary to measure our withdrawal liability as of January 27, 2005, which could cause us to recognize additional expense. The plan's administrator expects to have the actuarial calculations completed during the next year.

6.
8. GOODWILL AND RELATED INTANGIBLE ASSETS

Goodwill

The changes in the ~~approximate~~ carrying amount of goodwill by reportable segment for the six months ended June 30, ~~2004~~2005 is as follows (in thousands):

Processed Steel
Products
Segment

Building Products
Segment


Heat Treating
Segment

Total

B Balance as of December 31, 2003
$          19,347

$       201,706

$          46,104

$      267,157
     Goodwill acquired
32

4,170

9,494

13,696
     Balance as of June 30, 2004
$          19,379

$       205,876

$         55,598

$       280,853

	Processed Metal Products Segment	Building Products Segment	Thermal Processing Segment	Total

B Balance as of January 1, 2005	$ 23,617	216,206	$ 46,104	$285,927
G Goodwill acquired	-	1,332	-	1,332
G Goodwill disposed (Note 7)	-	(17,303)	-	(17,303)
Foreign currency translation	-	(75)	-	(75)
Balance as of June 30, 2005	$ 23,617	$ 200,160	$ 46,104	$ 269,881

Goodwill subject to the provisions of Statement of Financial Accounting Standards No. 142, Goodwill and Intangible Assets (SFAS 142), has been tested for impairment (annual reassessment date ~~as of~~is October 31). ~~The~~There are no indicators of impairment and the results of the latest annual reassessment determined that no goodwill impairments existed.

Intangible Assets

At June 30, ~~2004,~~2005, intangible assets related to the Company's acquisitions are included as part of the total other assets on the Company's condensed consolidated balance sheet and are included in the total assets of the Company's Building Products segment. Intangible assets at June 30, ~~2004~~2005 are as follows (in thousands):

		Gross Carrying Amount		Accumulated Amortization	Estimated Life		Gross Carrying Amount		Accumulated Amortization	Estimated Life
Trademark / Trade Name	$	120	$	30	2 to 5 years	$	560	$	77	2 to 5 years
Unpatented Technology		175		5	15 years		1,075		114	15 years
Customer Relationships		80		11	5 years		5,640		421	5 years
Non-Competition Agreements		2,365		384	5 to 10 years		2,365		713	5 to 10 years
Balance as of June 30, 2004	$	2,740	$	430
Balance as of June 30, 2005						$	9,640	$	1,325

Intangible asset amortization expense for the three and six month periods ended June 30, ~~2004~~2005 and ~~2003~~2004 aggregated approximately ~~$212,000~~$218,000 and ~~$65,000,~~$438,000, and $101,000 and $212,000, respectively.

Amortization expense related to intangible assets for the remainder of fiscal ~~2004~~2005 and the next five years thereafter is as ~~follows:~~follows (in thousands)

Year Ended December 31,
2004	$	207,000
2005	$	415,000	$	438
2006	$	365,000	$	825
2007	$	365,000	$	825
2008	$	240,000	$	701
2009	$	154,000	$	621
2010			$	612

7.9. SEGMENT INFORMATION

The Company is organized into three reportable segments on the basis of the production process and products and services provided by each segment, identified as follows:

(i) Processed ~~steel products,~~Metal Products, which primarily includes the intermediate processing of wide, open tolerance flat-rolled sheet steel and other metals through the application of several different processes to produce high-quality, value-added coiled steel and other metal products to be further processed by customers.

(ii) Building ~~products,~~Products, which primarily includes the processing of sheet steel, aluminum and other materials to produce a wide variety of building and construction products.

(iii) ~~Heat treating,~~Thermal Processing, which includes a wide range of metallurgical heat treating processing processes in which customer-owned metal parts are exposed to precise temperatures, atmospheres and quenchants to improve their mechanical properties, durability and wear ~~resistance and the manufacture of non-ferrous metal powder products, some of which are used by other operations of the Company.~~resistance.

The following table illustrates certain measurements used by management to assess the performance of the segments described above (in thousands):

Three Months Ended
June 30,

Six Months Ended
June 30,

2004

2003

2004

2003

(unaudited)

(unaudited)

(unaudited)

(unaudited)
Net sales

     Processed steel products
$
89,280
$
69,510
$
166,446
$
140,713
     Building products

136,734

111,984

246,057

180,279
     Heat treating

31,471

21,912

56,977

43,946

$
257,485
$
203,406
$
469,480
$
364,938

Income (loss) from operations

     Processed steel products
$
10,449
$
6,304
$
18,476
$
14,586
     Building products

20,243

13,460

31,034

15,990
     Heat treating

4,829

2,320

8,777

5,283
     Corporate

(7,940)

(4,765)

(12,497)

(7,898)

$
27,581
$
17,319
$
45,790
$
27,961

Depreciation and amortization

     Processed steel products
$
1,377
$
1,410
$
2,817
$
2,874
     Building products

2,497

2,266

4,944

4,202
     Heat treating

1,839

1,621

3,565

3,213
     Corporate

329

365

675

668

$
6,042
$
5,662
$
12,001
$
10,957

Capital expenditures

     Processed steel products
$
1,176
$
1,231
$
2,375
$
2,338
     Building products

2,706

1,808

5,154

3,454
     Heat treating

643

2,186

2,002

4,041
     Corporate

280

101

730

336

$
4,805
$
5,326
$
10,261
$
10,169

       June 30, 2004

   December 31, 2003
Total identifiable assets

(unaudited)

(audited)
     Processed steel products

$
181,804
$
161,334
     Building products

458,536

406,792
     Heat treating

192,245

142,575
              Sub-total

832,585

710,701
     Corporate

52,410

67,042

$
884,995
$
777,743

Three Months Ended
June 30,

Six Months Ended
June 30,

			2005		2004		2005		2004

Net sales
Processed metal products		$	118,188	$	94,320	$	245,800	$	171,486
Building products			142,654		128,341		261,826		230,276
Thermal processing			27,546		26,431		54,343		51,937
		$	288,388	$	249,092	$	561,969	$	453,699

Income (loss) from operations
Processed metal products		$	8,444	$	11,004	$	22,467	$	19,031
Building products			22,197		19,734		32,701		30,129
Thermal processing			4,200		4,274		7,605		8,222
Corporate			(5,563)		(7,941)		(12,599)		(12,497)
		$	29,278	$	27,071	$	50,174	$	44,885

Depreciation and amortization
Processed metal products		$	1,763	$	1,472	$	3,525	$	2,912
Building products			2,577		2,319		5,002		4,596
Thermal processing			1,983		1,744		3,937		3,470
Corporate			490		329		822		675
		$	6,813	$	5,864	$	13,286	$	11,653

Capital expenditures (excluding acquisitions)
Processed metal products		$	1,066	$	1,201	$	2,548	$	2,400
Building products			1,983		2,484		4,496		4,676
Thermal processing			790		618		2,283		1,977
Corporate			472		279		1,058		730
		$	4,311	$	4,582	$	10,385	$	9,783


							June 30, 2005		December 31, 2004
							(unaudited)
Total identifiable assets
Processed metal products						$	255,000	$	267,297
Building products							470,796		444,677
Thermal processing							148,976		149,454
Sub-total							874,772		861,428
Corporate *							61,504		96,273
						$	936,276	$	957,701
	* includes assets associated with the discontinued operations

~~8. BORROWINGS UNDER~~10. NEW REVOLVING CREDIT FACILITY

~~The~~

On April 1, 2005, the Company entered into a Credit Agreement with a consortium of banks that established a revolving line of credit, and provides for the issuance of letters of credit and swing line loans through April 2010. There is an aggregate ~~borrowing limit~~of $250,000,000 available under the new Credit Agreement, with a $50,000,000 expansion feature at the Company's ~~revolving~~option, subject to approval by the participating financial institutions. The credit facility is ~~$290,000,000.~~secured by substantially all of the Company's accounts receivable, inventory, equipment and fixtures and other personal property. In conjunction with the new Credit Agreement, the Company terminated its existing credit facility. At June 30, ~~2004,~~2005, the Company had ~~$140,000,000~~$125,500,000 in availability under the revolving credit facility. Borrowings under this credit agreement carry interest at LIBOR plus a fixed rate of between 57.5 basis points and 137.5 basis points, based on a long-term liquidity ratio. At June 30, 2005 the weighted average interest rate was 4.01%.

~~9. NEW DEBT~~

In June 2004, the Company entered into a $75.0 million private placement of debt with The Prudential Insurance Company of America. This senior secured note bears interest at 5.75% annually and has a seven year term. The Company drew down $25.0 million at the inception of the note which was outstanding at June 30, 2004, and will draw down the remaining $50.0 million at specified dates and amounts which coincide with the expiration of the interest rate swap agreements currently outstanding under the Company's existing revolving credit facility. The initial $25.0 million borrowing under this note was used to pay down a portion of the existing revolving credit facility.

~~10.~~11. RELATED PARTY TRANSACTIONS

In connection with the acquisition of Construction Metals, the Company entered into two unsecured subordinated notes payable each in the amount of $8,750,000 (aggregate total of $17,500,000). These notes are payable to the two former owners of Construction Metals and are considered related party in nature due to the former owners' current employment relationship with the Company. These notes are payable in three equal annual principal installments of $2,917,000 per note, ~~beginning~~ on April 1, ~~2004,~~ with the final principal payment due on April 1, 2006. These notes require quarterly interest payments at an interest rate of 5.0% per annum. At June 30, 2005 and 2004, the current portion of these notes aggregated approximately ~~$5,834,000.~~

$5,833,000. Accrued interest and interest expense related to these notes payable was approximately $73,000 and $145,000 as of June 30, 2005 and 2004 and $217,000 and $359,000 for the six months ended June 30, ~~2004.~~2005 and 2004, respectively.

The Company has certain operating lease agreements related to operating locations and facilities with the former owners of Construction Metals or companies controlled by these parties. These operating leases are considered to be related party in nature. Rental expense associated with these related party operating leases aggregated approximately $741,000 and $552,000 for the six months ended June 30, ~~2004.~~

~~11. STOCK OPTIONS~~

~~In December 2002, the Financial Accounting Standards Board (FASB) issued SFAS 148,~~ ~~Accounting for Stock-Based Compensation-Transition~~2005 and ~~Disclosure~~ ~~which amends SFAS 123,~~ ~~Accounting for Stock-Based Compensation~~. SFAS 148 provides alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation and amends the disclosure requirements of SFAS 123 to require disclosures in both the annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. As allowed by SFAS 123, the Company follows the disclosure requirements of SFAS 123 and SFAS 148, but continues to account for its stock options using the intrinsic value-based method of accounting as prescribed by Accounting Principles Board Opinion No. 25, ~~Accounting for Stock Issued to Employees~~ (APB Opinion No. 25). Accordingly, no compensation cost has been recognized for the stock option plans, as stock options granted under these plans have an exercise price equal to 100% of the underlying stock price on the date of grant.

The following table illustrates the pro forma effect on net income and net income per share, had the Company used the Black-Scholes option pricing model to calculate the fair value of stock based employee compensation pursuant to the provisions of SFAS 123 and SFAS 148 (in thousands, except per share data):

Three Months Ended
June 30,

Six Months Ended
June 30,

2004

2003

2004

2003

(unaudited)

(unaudited)

(unaudited)

(unaudited)

Net income as reported
$
15,444
$
8,251
$
24,789
$
13,155
Add: Compensation expense
reorganized in net income

39

78

77

156

Deduct: Stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects

(145)

(181)

(268)

(344)

Pro forma net income
$
15,338
$
8,148
$
24,598
$
12,967

Net income per share:

     Basic - as reported
$
.79
$
.52
$
1.27
$
.83
     Basic - pro forma
$
.78
$
.51
$
1.26
$
.81

     Diluted - as reported
$
.78
$
.51
$
1.26
$
.82
     Diluted - pro forma
$
.78
$
.51
$
1.25
$
.81

2004, respectively.

12. NET PERIODIC BENEFIT ~~COSTS~~COST

The following ~~table presents~~tables present the components of net periodic pension and other postretirement benefit costs charged to expense ~~for the six months ended June 30~~ (in thousands):

Pension Benefit

Pension Benefit

Other Post
Retirement Benefits

2004

2003

2004

2003

Service cost
$
86
$
78
$
57
$
50
Interest cost

53

54

101

95
Amortization of unrecognized prior service cost

-

-

(7)

(7)
Loss amortization

-

2

49

45
Net periodic benefit costs
$
139
$
134
$
200
$
183

Three Months Ended
June 30,

Six Months Ended
June 30,

		2005		2004		2005		2004

Service cost	$	44	$	43	$	88	$	86
Interest cost		31		26		62		53
Net periodic benefit costs	$	75	$	69	$	150	$	139

Processed Metal Products

~~Processed Steel Products~~

Net sales increased by approximately ~~$19.8~~$23.9 million, or ~~28.4%~~25.3%, to ~~$89.3~~$118.2 million for the quarter ended June 30, ~~2004,~~2005, from net sales of ~~$69.5~~$94.3 million for the quarter ended June 30, ~~2003.~~2004. Net sales increased by approximately ~~$25.7~~$74.3 million, or ~~18.3%~~43.3%, to ~~$166.4~~$245.8 million for the six months ended June 30, ~~2004~~2005 from net sales of ~~$140.7~~$171.5 million for the same period in ~~2003.~~2004. These increases in net sales were primarily a function of ~~both higher sales volumes, especially in the Company's coated steel and painted products, as well as~~ increases in selling price due to the ~~recent~~ rise in overall steel ~~prices.~~prices that occurred throughout 2004, as well the acquisition of SCM in June 2004.

Income from operations as a percentage of net sales ~~increased~~decreased to ~~11.7%~~7.1% of net sales for the quarter ended June 30, ~~2004~~2005 from ~~9.1%~~11.7% in the second quarter a year ago. For the six months ended June 30, ~~2004,~~2005, income from operations as a percentage of net sales ~~increased~~decreased to ~~11.1%~~9.1% from ~~10.4%~~11.1% for the comparable ~~2003~~2004 period. These ~~increases~~decreases in operating margin were due primarily to ~~higher volumes and~~increased material costs that have not been fully recovered in increased selling prices ~~combined with successful cost control measures. The increases in operating margins were~~ partially offset by ~~increased raw material costs.~~

improved labor utilization, and the acquisition of SCM, which has slightly higher margins.

Building Products

Net sales in the quarter ended June 30, ~~2004~~2005 increased to ~~$136.7~~$142.7 million, or ~~22.1%~~11.2%, from net sales of ~~$112.0~~$128.3 million in the second quarter of ~~2003.~~2004. Net sales increased to ~~$246.1~~$261.8 million for the six months ended June 30, ~~2004~~2005 from net sales of ~~$180.3~~$230.3 million for the same period in ~~2003,~~2004, an increase of ~~$65.8~~$31.6 million or ~~36.5%~~13.7%. The increase in net sales during ~~the quarter~~both periods was due ~~primarily~~ to increased volumes and selling prices together with the addition of net sales of Air Vent (acquired May 1, 2003), and Renown (acquired January 1, 2004). The increase in the net sales for the six months ended June 30, 2004 were also favorably impacted by increased volumes and pricing plus the addition of net sales for Air Vent and Renown as well as Construction Metals (acquired April 1, 2003).prices. The increase in sales volume was due primarily to improved market and sales penetration, which resulted from new and innovative product offerings, as well as improved supply solutions for customers. The increase in selling prices for the current quarter and six months were the result of the Company's ability to pass on a portion of raw material cost increases to their ~~customers.~~customers over the past twelve months.

Income from operations as a percentage of net sales increased to ~~14.8%~~15.6% for the quarter ended June 30, ~~2004~~2005 from ~~12.0%~~15.4% a year ago. For the six months ended June 30, ~~2004,~~2005, income from operations as a percentage of net sales ~~increased~~decreased to ~~12.6%~~12.5% from ~~8.9%~~13.1% for the same period in ~~2003.~~2004. The increase in operating margins in the quarter were due to volume and selling price increases and decreased incentive compensation and transportation costs, partially offset by increased raw material ~~costs, combined with the impact of a full quarter of operating income from the Air Vent operations.~~costs. The ~~increase in operating margin percentage was partially offset by increased incentive based compensation costs together with higher advertising and promotional expenses. The increase~~decrease in operating margin for the six months was ~~due primarily to volume and selling price increases combined with~~the result of higher ~~margins from the Construction Metals and Air Vent acquisitions,~~material costs which were partially offset by ~~increased raw material~~reduced labor costs and ~~increased incentive-based compensation costs.~~transportation expenses

~~Heat Treating~~Thermal Processing

In the second quarter of ~~2004,~~2005, net sales increased by approximately ~~$9.6~~$1.1 million to ~~$31.5~~$27.5 million from net sales of ~~$21.9~~$26.4 million for the quarter ended June 30, ~~2003,~~2004, an increase of ~~43.6%~~4.2%. Net sales in the six months ended June 30, ~~2004~~2005 increased by approximately ~~$13.1~~$2.4 million, or ~~29.7%~~4.6%, to ~~$57.0~~$54.3 million from net sales of ~~$43.9~~$51.9 million in the same period in ~~2003.~~2004. The increase in net sales for the quarterly and six month periods ended June 30, ~~2004~~2005 were due primarily to the improvements in the overall general ~~economy, as well as increased volume at the Company's brazing operation, combined with the addition of the net sales from the SCM acquisition, which approximated $5.2 million.~~economy.

Income from operations as a percentage of net sales ~~increased~~decreased to ~~15.3%~~15.2% for the quarter ended June 30, ~~2004~~2005 from ~~10.6%~~16.2% in the second quarter of ~~2003.~~2004. For the six months ended June 30, ~~2004,~~2005, income from operations as a percentage of net sales ~~increased~~decreased to ~~15.4%~~14.0% compared to ~~12.0%~~15.8% for the same period in ~~2003.~~2004. These ~~increases~~decreases in operating margin percentage were due primarily to increased ~~operating levels and production volumes combined with improved fixed cost absorption levels.~~energy expenses, partially offset by a slight reduction in labor costs.

Outlook

~~The outlook for the quarter ended September 30, 2004 is favorable in~~In comparison to the quarter ended September 30, ~~2003. The~~2004, we expect a challenging third quarter in 2005. While the Company believes it is positioned to benefit from many of its internal growth initiatives and cost reduction programs, as well as the many operational improvements recently put in ~~place. In addition,~~place, the decline in the market pricing for steel, and the related demand for lower selling prices from our customers, particularly in our Processed Metals segment, is expected to cause a further reduction in gross margins, particularly in our Processed Metals segment, during the third quarter as we work through higher priced on hand inventories. Demand for the Company's products remains strong in light of the general overall economic trends and the relatively strong outlook in the housing and automotive markets.

To date, the Company has been successful in managing material cost increases through increases in selling prices. However, the Company cannot assure that if material costs and related cost pressures continue, it will be able to pass these increases along to its customers.

In ~~2004,~~2005, the Company will realize a full ~~years~~year's worth of sales and earnings from the ~~2003 acquisitions~~2004 acquisition of ~~Construction Metals and Air Vent. Also, the results of the~~ SCM acquisition will be included in the Company's sales and earnings for the remaining six months of 2004. In addition, the Company is continuously evaluating numerous acquisition opportunities, and the Company's recent stock offering provides it with the increased resources and financial flexibility to capitalize on such opportunities. .

Liquidity and Capital Resources

The Company's principal capital requirements are to fund its operations, including working capital, the purchase and funding of improvements to its facilities, machinery and equipment and to fund acquisitions.

The Company's shareholders' equity increased by approximately ~~$31.3~~$24.1 million or ~~8.0%~~5.3%, to ~~$425.5~~$477.9 million, at June 30, ~~2004.~~2005. This increase in shareholder's equity was primarily due to net income of ~~$24.8~~$26.2 million, the receipt of ~~$5.0 million in net proceeds from the issuance of common stock, as well as proceeds of $2.7 million~~$500,000 from the exercise of stock options, partially offset by the declaration of approximately ~~$1.8~~$3.0 million in shareholder dividends.

During the first six months of ~~2004,~~2005, the Company's working capital ~~(inclusive of the impact of working capital acquired from the 2004 acquisitions),~~ increased by approximately ~~$36.7~~$18.8 million, or ~~24.4%~~7.8%, to approximately ~~$187.4~~$261.1 million. This increase in working capital was primarily the result of ~~increases~~an increase in accounts receivable ~~and inventory levels~~ of ~~$60.3~~$25.9 million and ~~$33.7 million, respectively. These increases in working capital were offset by~~ increases in accounts payable and accrued expenses which aggregated ~~$40.1 million and~~$6.4 million. These increases in working capital were offset by reductions in inventory levels, cash and cash equivalents, ~~of approximately $18.7 million.~~

~~On June 1, 2004, the Company purchased the~~and other current assets of ~~the Copper Powder Division of SCM Metals Products, Inc. The Company paid approximately $41.7~~$8.2 million, ~~in cash for the acquisition, which included direct acquisition costs.~~$3.9 million, and $1.4 million, respectively.

Net cash provided by continuing operating activities for the six months ended June 30, ~~2004~~2005 was approximately ~~$1.6~~$3.2 million ~~and~~ was primarily the result of net income from continuing operations of ~~$24.8~~$26.5 million combined with depreciation and amortization of ~~$12.0~~$13.3 million, ~~the provision for deferred income taxes~~increases in accounts receivable of ~~$2.2~~$32.9 million ~~increases~~and decreases in accounts payable and accrued expenses of ~~$36.2~~$3.9 million, offset by an ~~increase~~decrease in ~~accounts receivable and~~ inventories of ~~$47.0 million and $25.4 million, respectively.~~$1.9 million.

In addition to the net cash provided by operating activities, the Company realized net proceeds of $5.0 million from the issuance of common stock and cash generated from the proceeds of long-term debt of $57.7 million, which included $25.0 million in new term debt and $2.7 million generated by the exercise of stock options. These resources together with theThe cash on hand at the beginning of the ~~year were~~period, along with the cash generated from operations and the cash from the disposition of Milcor of $42.6 million, was used to ~~pay down $25.5 million of the Company's revolving credit debt, to~~ fund ~~current operations, acquisitions of $48.6 million (net of cash acquired),~~ capital expenditures of ~~$10.3~~$10.4 million and ~~pay cash dividends~~dividend payments of ~~$1.8 million. Capital spending~~$3.0 million, along with the repayment of $37.4 million of debt.

On April 1, 2005, the Company entered into a Credit Agreement with a consortium of banks that established a revolving line of credit, and provides for the ~~balance~~issuance of ~~the year~~letters of credit and swing line loans through April 2010. There is ~~expected to be in a range of $7.0 to $8.0 million.~~

~~The Company's revolving credit facility, which expires in June 2007, provides for~~ an aggregate ~~borrowing limit~~ of ~~up to $290.0 million. Additionally,~~$250,000,000 available under the ~~revolving credit facility contains~~new Credit Agreement, with a ~~$10.0 million~~$50,000,000 expansion feature at the Company's option, subject to approval by the participating financial institutions. ~~Borrowings thereunder are~~The credit facility is secured ~~with~~by substantially all of the Company's accounts receivable, ~~inventories~~inventory, equipment and fixtures and other personal ~~property and equipment.~~property. In conjunction with the new Credit Agreement, the Company terminated its existing credit facility. At June 30, ~~2004,~~2005, the Company had ~~used approximately $150.0 million of the revolving credit facility, resulting~~$125,500,000 in $140.0 million in availability. At June 30, 2004, the Company had interest rate swap agreements outstanding which effectively converted $50.0 million of borrowings under its revolving credit agreement to fixed interest rates ranging from 7.22% to 7.93%. Additional borrowingsavailability under the revolving credit ~~facility~~facility. Borrowings under this credit agreement carry interest at LIBOR plus a fixed rate. At June 30, ~~2004, additional borrowings under~~2005 the ~~revolving credit facility aggregated approximately $100.0 million. The~~ weighted average interest rate ~~of these additional borrowings~~ was ~~2.92% at June 30, 2004.~~4.01%.

The Company's revolving credit facility contains various debt covenants. At June 30, ~~2004~~2005 the Company was in full compliance with all covenants.

In 2002, the Company entered into a $50.0 million private placement of debt with The Prudential Insurance Company of America, which consists of a $25.0 million senior secured note bearing interest at 7.35% annually, due on July 3, 2007 and a $25.0 million senior subordinated note, bearing interest at 8.98% annually, due on January 3, 2008. At June 30, ~~2004,~~2005, the total principal balance of the private placement debt aggregated $50.0 million, none of which is due within the current fiscal year.

In ~~June~~ 2004, the Company entered into a $75.0 million private placement of debt with The Prudential Insurance Company of America. This senior secured note bears interest at 5.75% annually and has a seven year term. The Company had $55.0 million outstanding at December 31, 2004, drew down $25.0 million at the inception of the note and will draw down the remaining $50.0 million at specified dates and amounts which coincide with the expiration of the interest rate swap agreements currently outstanding under the Company's existing revolving credit facility. The initial $25.0 million borrowing under this note was used to pay down a portion of the existing revolving credit facility.

~~In January 2004, the underwriters of the Company's December 2003 common stock offering exercised their over-allotment option, and purchased~~ an additional ~~214,625 shares~~$10.0 million during the first quarter of 2005, and is scheduled to draw the ~~Company's common stock at $24.75 per share. Net proceeds to~~remainder during the ~~Company from~~third quarter of 2005. At June 30, 2005 the ~~purchase~~total principal balance of ~~these additional shares were approximately $5.0~~this private placement debt aggregated $65.0 million, ~~and were used to further reduce~~none of which is due within the ~~Company's outstanding debt.~~ current fiscal year.

For the third quarter and remainder of ~~2004,~~2005, the Company continues to ~~focused~~focus on maximizing positive cash flow and working capital management. The Company is currently examining ways to optimize its existing capital structure, particularly the debt component, in light of the Company's long-term growth and acquisition initiatives. The Company is looking to put in place a capital structure which provides the Company with the capability to engage in larger and potentially more complex acquisitions, while still providing the flexibility to run the day-to-day operations of the business. Additionally, the Company broadly estimates the cost of Sarbanes-Oxley compliance, which does not include internal resources, will range between $2.0 million and $3.0 million for the upcoming year-ending December 31, 2004. As of June 30, ~~2004,~~2005, the Company believes that availability of funds under its existing credit facility together with the cash generated from operations will be sufficient to provide the Company with the liquidity and capital resources necessary to support its principal capital requirements, including operating activities, capital expenditures, and dividends.

The Company regularly considers various strategic business opportunities including acquisitions. The Company evaluates such potential acquisitions on the basis of their ability to enhance the Company's existing products, operations, or capabilities, as well as provide access to new products, markets and customers. Although no assurances can be given that any acquisition will be consummated, the Company may finance such acquisitions through a number of sources including internally available cash resources, new debt financing, the issuance of equity securities or any combination of the above.

Critical Accounting Policies

The preparation of the financial statements in conformity with ~~accounting principles~~U.S. generally accepted ~~in the United States of America~~accounting principles requires management to make decisions based upon estimates, assumptions, and factors it considers relevant to the circumstances. Such decisions include the selection of applicable principles and the use of judgment in their application, the results of which could differ from those anticipated.

A summary of the Company's significant accounting policies are described in Note 1 of the Company's consolidated financial statements included in the Company's Annual Report to Shareholders for the year ended December 31, ~~2003,~~2004, as filed on Form 10-K.

Recent Accounting Pronouncements

The ~~Company's most critical~~Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standard (SFAS) No. 123 (Revised 2004) (SFAS No. 123R), Share-Based Payment, in December 2004. SFAS No. 123R is a revision of FASB Statement 123, Accounting for Stock-Based Compensation and supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees and its related implementation guidance. The Statement focuses primarily on accounting ~~policies include: valuation of accounts receivable,~~for transactions in which ~~impacts selling, general and administrative expense; valuation of inventory, which impacts~~an entity obtains employee services in share-based payment transactions. SFAS No. 123R requires a public entity to measure the cost of ~~sales and gross margin; and the assessment~~employee services received in exchange for an award of recoverability of goodwill and other intangible and long-lived assets, which impacts write-offs of goodwill, intangibles and long-lived assets. Management reviews the estimates, including, but not limited to, the allowance for doubtful accounts and inventory reserves on a regular basis and makes adjustments based on historical experiences, current conditions and future expectations. The reviews are performed regularly and adjustments are made as required by current available information. Management believes these estimates are reasonable, but actual results could differ from these estimates.

The Company's accounts receivable represent those amounts which have been billed to the Company's customers but not yet collected. Management analyzes various factors including historical experience, credit worthiness of customers and current market and economic conditions. The allowance for doubtful accounts balance is establishedequity instruments based on the ~~portion of those accounts receivable which are deemed to be potentially uncollectible. Changes in judgments on these factors could impact the timing of costs recognized.~~

The Company states its inventories at lower of cost or market. The cost basis of the Company's inventory is determined on a first-in-first-out basis using either actual costs or a standard cost methodology which approximates actual cost.

Intangible assets with estimable useful lives (which consist primarily of non-competition agreements) are amortized to their residual values over those estimated useful lives in proportion to the economic benefit consumed.

Long-lived assets with estimable useful lives are depreciated to their residual values over those useful lives in proportion to the economic value consumed. Long-lived assets are tested for impairment when events or changes in circumstances indicate that the carrying amount of a long-lived asset may not be recoverable and exceeds its fair market value. This circumstance exists if the carrying amount of the asset in question exceeds the sum of the undiscounted cash flows expected to result from the use of the asset. The impairment loss would be measured as the amount by which the carrying amount of a long-lived asset exceeds its fair value as determined by discounted cash flow method or in the case of negative cash flow, an independent market appraisal of the asset.

~~Goodwill is tested annually, or sooner if indicators of impairment exist, for impairment at the reporting unit level by comparing the~~grant-date fair value of the ~~reporting unit with its carrying value. A reporting unit~~award (with limited exceptions). That cost will be recognized over the period during which an employee is ~~either~~required to provide service in exchange for the ~~same~~award. This statement is effective as ~~or one level below, an operating segment. The primary valuation method for determining the fair value~~ of the ~~reporting unit is a discounted cash flows analysis. If the goodwill is indicated as being impaired (the fair value~~beginning of the first annual reporting ~~unit is less than the carrying amount), the fair value of the reporting unit would then be allocated to its assets~~period that begins after June 15, 2005 and liabilities in a manner similar to a purchase price allocation in order to determine the implied fair value of the reporting unit goodwill. This implied fair value of the reporting unit goodwill would then be compared with the carrying amount of the reporting unit goodwill and, if it is less, the Company ~~would then recognize~~will adopt the standard in the third quarter of fiscal 2005. The Company has not determined the impact, if any, that this statement will have on its consolidated financial position or results of operations.

In November 2004, the FASB issued SFAS No. 151, Inventory Costs; an ~~impairment loss.~~

amendment of ARB No. 43, Chapter 4, (SFAS 151) which clarifies the types of costs that should be expensed rather than capitalized as inventory. This statement also clarifies the circumstances under which fixed overhead costs associated with operating facilities involved in inventory processing should be capitalized. The ~~projection~~provisions of ~~future cash flows~~SFAS No. 151 are effective for ~~the goodwill impairment analysis requires significant judgments and estimates with respect to future revenues related to the reporting units~~fiscal years beginning after June 15, 2005 and the ~~future cash outlays related to those revenues. Actual revenues and related cash flows, changes~~Company will adopt this standard in ~~anticipated revenues and related cash flows~~the first quarter of fiscal 2006. The Company has not determined the impact, if any, that this statement will have on its consolidated financial position or ~~use~~results of ~~different assumptions could result in changes in this assessment.~~operations.

Related Party Transactions

In connection with the acquisition of Construction Metals in April 2003, the Company entered into two unsecured subordinated notes payable, each in the amount of $8.75 million (aggregate total of $17.5 million). These notes are payable to the former owners of Construction Metals and are considered related party in nature due to the former owners' current employment relationship with the Company. These notes are payable in three equal annual principal installments of approximately $2.9 million per note ~~beginning~~ on April 1, ~~2004,~~ with the final principal payment due on April 1, 2006. These notes require quarterly interest payments at an interest rate of 5.0% per annum. At June 30, 2005 and 2004, the current portion of these notes aggregated approximately $5,833,000. Accrued interest and interest expense related to these notes payable was approximately $73,000 and $145,000 as of and for the quarter ended June 30, 2005 and 2004, respectively. Interest expense related to these notes was $217,000 and $359,000 for the six months ended June 30, ~~2004. At June 30,~~2005 and 2004, ~~the current portion of these notes payable aggregated approximately $5.8 million.~~respectively.

The Company has certain operating lease agreements related to operating locations and facilities with the former owners of Construction Metals (related parties) or companies controlled by these parties. Rental expense associated with these related party operating leases aggregated approximately $741,000 and $552,000 for the six months ended June 30, ~~2004.~~2005 and 2004, respectively

Forward-Looking Information - Safe Harbor Statement

Certain information set forth herein contains forward-looking statements that are based on current expectations, estimates, forecasts and projections about the Company's business, and management's beliefs about future operating results and financial position. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions. Statements by the Company, other than historical information, constitute "forward looking statements" as defined within the Private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance on forward-looking statements. Such statements are based on current expectations, are inherently uncertain, are subject to risks and should be viewed with caution. Actual results and experience may differ materially from the forward-looking statements. Factors that could affect these statements include, but are not limited to, the following: the impact of changing steel prices on the Company's results of operations; changes in raw material pricing and availability; changing demand for the Company's products and services; 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.

Item 3. Qualitative and Quantitative Disclosures About Market Risk

In the ordinary course of business, the Company is exposed to various market risk factors, including changes in general economic conditions, competition and raw materials pricing and availability. In addition, the Company is exposed to market risk, primarily related to its long-term debt. To manage interest rate risk, the Company uses both fixed and variable interest rate debt. There have been no material changes to the Company's exposure to market risk since December 31, ~~2003.~~2004.

Item 4. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

The Company maintains a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) designed to provide reasonable assurance as to the reliability of the financial statements and other disclosures contained in this report. The Company's Chief Executive Officer and Chairman of the Board, President, and Executive Vice President, Chief Financial Officer, and Treasurer evaluated the effectiveness of the Company's disclosure controls as of the end of the period covered in this report. Based upon that evaluation, the Company's Chief Executive Officer and Chairman of the Board, President, Executive Vice President, Chief Financial Officer, and Treasurer, have concluded that the Company's disclosure controls and procedures were designed and functioning effectively to provide reasonable assurance that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms.

(b) Changes in Internal Controls

The Company converted its existing legacy manufacturing and accounting system to a new integrated ERP system at one of its subsidiaries during the quarter ended June 30, 2005, and plans to convert two other subsidiaries to this new system in the next twelve months. The completion of this system implementation at these subsidiaries should enhance our internal controls as follows:

a. The Axiom ERP system will reduce the number of platforms used to record, summarize and report results of operations and financial position; integrate various databases into consolidated files; and reduce the number of manual processes employed by the Company;

b. The Company has designed new processes and implemented new policies and procedures in connection with the conversion.

The Company imposed mitigating and redundant controls where changes to certain processes were underway and not completed.

There have been no other changes in the Company's internal control over financial reporting (as defined by Rule 13a-15(f)) that occurred during the period covered by the report that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

Not applicable.

Item 2. Changes in Securities.

Not applicable.

Item 3. Defaults Upon Senior Securities.

Not applicable.

Item 4. Submission of Matters to a Vote of Security Holders.

Not applicable.

Item 5. Other Information.

Not applicable.

Item 6. ~~Exhibits and Reports on Form 8-K.~~Exhibits.

6(a) Exhibits

a. Exhibit 31.1 - Certification of Chief Executive Officer and Chairman of the Board pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

b. Exhibit 31.2 - Certification of President pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

c. Exhibit 31.3 - Certification of Executive Vice President, Chief Financial Officer and Treasurer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

d. Exhibit 32.1 - Certification of the Chief Executive Officer and Chairman of the Board pursuant to Title 18, United States Code, Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

e. Exhibit 32.2 - Certification of the President pursuant to Title 18, United States Code, Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

f. Exhibit 32.3 - Certification of the Executive Vice President, Chief Financial Officer, and Treasurer pursuant to Title 18, United States Code, Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

g. 10.1 Credit Agreement among Gibraltar Industries, Inc., Gibraltar Steel Corporation of New York and KeyBank National Association and the other lenders named therein, dated as of April 1, 2005 (incorporated by reference to Exhibit 10.1 ~~- Senior Secured~~to the Company's Current Report on Form 8-K dated April 1, 2005)

h. 10.2 Amended and Restated Note Purchase Agreement ~~between~~among Gibraltar Industries, Inc., Gibraltar Steel Corporation of New York and the ~~Company and The~~ Prudential Insurance Company of ~~America.~~

~~6(b) Reports on Form 8-K. The Company filed~~America dated as of April 1, 2005 (incorporated by reference to Exhibit 10.2 to the ~~following reports~~Company's Current Report on Form 8-K ~~during the six month period ended June 30, 2004:~~dated April 1, 2005)

~~a. The~~i. 10.3 Amended and Restated Subordinated Note Purchase Agreement among Gibraltar Industries, Inc., Gibraltar Steel Corporation of New York and the Prudential Insurance Company ~~furnished a report~~of America dated as of April 1, 2005 (incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K ondated April ~~26, 2004, that included~~1, 2005)

j. 10.4 Amended and Restated Note Purchase Agreement among Gibraltar Industries, Inc., Gibraltar Steel Corporation of New York and the Prudential Insurance Company of America and Pruco Life Insurance Company dated as of April 1, 2005 (incorporated by reference to Exhibit 10.4 to the Company's ~~press release~~Current Report on Form 8-K dated April ~~26, 2004 reporting the Company's results of operations for the first quarter ended March 31, 2004.~~

1, 2005)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

GIBRALTAR ~~STEEL CORPORATION~~INDUSTRIES, INC.

(Registrant)

	/s/ Brian J. Lipke
	~~Brian J. Lipke~~
	Chief Executive Officer and Chairman of the Board

	/s/ Henning Kornbrekke
	Henning Kornbrekke
	President

	/s/ David W. Kay
	David W. Kay
	Executive Vice President, Chief Financial Officer,
	and Treasurer

Date: August ~~10, 2004~~

9, 2005

PART I FINANCIAL INFORMATION Item 1. Financial Statements GIBRALTAR STEEL CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)

		June 30, December 31,
		2004		2003
		(unaudited)		(audited)
Assets
Current assets:
Cash and cash equivalents	$	10,297	$	29,019
Accounts receivable, net		162,863		102,591
Inventories		141,233		107,531
Other current assets		11,204		10,309
Total current assets		325,597		249,450

Property, plant and equipment, net		265,978		250,029
Goodwill		280,853		267,157
Investments in partnerships		6,643		5,044
Other assets		5,924		6,063
	$	884,995	$	777,743

Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable	$	76,065	$	49,879
Accrued expenses		42,948		29,029
Current maturities of long-term debt		19,192		19,848
Total current liabilities		138,205		98,756

Long-term debt		255,711		222,402
Deferred income taxes		59,992		55,982
Other non-current liabilities		5,553		6,422
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 19,651,200 and 19,274,069 shares in 2004 and 2003, respectively		196		193
Additional paid-in capital		207,053		199,206
Retained earnings		219,063		196,138
Unearned compensation		(648)		(818)
Accumulated other comprehensive loss		(130)		(538)
		425,534		394,181
Less: cost of 27,000 and 19,000 common shares held in treasury in 2004 and 2003, respectively		-		-
Total shareholders' equity		425,534		394,181
	$	884,995	$	777,743
See accompanying notes to condensed consolidated financial statements

GIBRALTAR STEEL CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)

		Six Months Ended June 30
		2004		2003
		(unaudited)		(unaudited)

Cash flows from operating activities
Net income	$	24,789	$	13,155
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization		12,001		10,957
Provision for deferred income taxes		2,245		1,402
Equity in partnerships' income		(1,726)		(208)
Distributions from partnerships		846		411
Unearned compensation, net of restricted stock forfeitures		69		194
Other noncash adjustments		48		110
Increase (decrease) in cash resulting from changes
in (net of acquisitions):
Accounts receivable		(47,036)		(23,699)
Inventories		(25,393)		(441)
Other current assets		619		(2,392)
Accounts payable and accrued expenses		36,167		10,468
Other assets		(997)		(263)

Net cash provided by operating activities		1,632		9,694

Cash flows from investing activities
Acquisitions, net of cash acquired		(48,600)		(83,580)
Purchases of property, plant and equipment		(10,261)		(10,169)
Net proceeds from sale of property and equipment		316		265

Net cash used in investing activities		(58,545)		(93,484)

Cash flows from financing activities
Long-term debt reduction		(25,506)		(25,924)
Proceeds from long-term debt		57,680		115,464
Payment of dividends		(1,751)		(1,281)
Net proceeds from issuance of common stock		7,768		317

Net cash provided by financing activities		38,191		88,576

Net (decrease) increase in cash and cash equivalents		(18,722)		4,786

Cash and cash equivalents at beginning of year		29,019		3,662

Cash and cash equivalents at end of period	$	10,297	$	8,448
See accompanying notes to condensed consolidated financial statements


Balance at December 31, 2003	$	977	$	(58)	$	(1,457)	$	(538)
Current period change		(356)		-		764		408
Balance at June 30, 2004	$	621	$	(58)	$	(693)	$	(130)

Working capital	$	3,485
Property, plant and equipment		5,669
Intangible assets		830
Goodwill		19,546
	$	29,530

Working capital	$	2,997
Property, plant and equipment		10,297
Intangible assets		1,400
Goodwill		103,104
	$	117,798

Working capital	$	1,504
Property, plant and equipment		950
Intangible assets		215
Goodwill		3,201
	$	5,870

Working capital	$	15,368
Property, plant and equipment		16,841
Intangible assets		-
Goodwill		9,494
	$	41,703

	Processed Steel Products Segment	Building Products Segment	Heat Treating Segment	Total

B Balance as of December 31, 2003	$ 19,347	$ 201,706	$ 46,104	$ 267,157
Goodwill acquired	32	4,170	9,494	13,696
Balance as of June 30, 2004	$ 19,379	$ 205,876	$ 55,598	$ 280,853

		Pension Benefit				Other Post Retirement Benefits
		2004		2003		2004		2003

Service cost	$	86	$	78	$	57	$	50
Interest cost		53		54		101		95
Amortization of unrecognized prior service cost		-		-		(7)		(7)
Loss amortization		-		2		49		45
Net periodic benefit costs	$	139	$	134	$	200	$	183