SUPPLEMENTAL FINANCIAL INFORMATION | SUPPLEMENTAL FINANCIAL INFORMATION The following information sets forth the consolidating summary financial statements of the issuer (Gibraltar Industries, Inc.) and guarantors, which guarantee the Senior Subordinated 6.25% Notes due February 1, 2021 , and the non-guarantors. The guarantors are 100% owned domestic subsidiaries of the issuer and the guarantees are full, unconditional, joint and several. Investments in subsidiaries are accounted for by the parent using the equity method of accounting. The guarantor subsidiaries and non-guarantor subsidiaries are presented on a combined basis. The principal elimination entries eliminate investments in subsidiaries and intercompany balances and transactions. GIBRALTAR INDUSTRIES, INC. CONSOLIDATING STATEMENTS OF OPERATIONS THREE MONTHS ENDED JUNE 30, 2017 (in thousands) Gibraltar Industries, Inc. Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Net sales $ — $ 238,652 $ 10,627 $ (1,652 ) $ 247,627 Cost of sales — 178,779 8,739 (1,716 ) 185,802 Gross profit — 59,873 1,888 64 61,825 Selling, general, and administrative expense 34 33,681 3,180 — 36,895 (Loss) income from operations (34 ) 26,192 (1,292 ) 64 24,930 Interest expense (income) 3,403 162 (15 ) — 3,550 Other expense — 115 238 — 353 (Loss) income before taxes (3,437 ) 25,915 (1,515 ) 64 21,027 (Benefit of) provision for income taxes (1,340 ) 9,360 (167 ) — 7,853 (Loss) income from continuing operations (2,097 ) 16,555 (1,348 ) 64 13,174 Discontinued operations: Loss from discontinued operations before taxes — (644 ) — — (644 ) Benefit of income taxes — (239 ) — — (239 ) Loss from discontinued operations — (405 ) — — (405 ) Equity in earnings (loss) from subsidiaries 14,802 (1,348 ) — (13,454 ) — Net income (loss) $ 12,705 $ 14,802 $ (1,348 ) $ (13,390 ) $ 12,769 GIBRALTAR INDUSTRIES, INC. CONSOLIDATING STATEMENTS OF OPERATIONS THREE MONTHS ENDED JUNE 30, 2016 (in thousands) Gibraltar Industries, Inc. Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Net sales $ — $ 247,912 $ 19,922 $ (2,096 ) $ 265,738 Cost of sales — 183,557 15,075 (1,737 ) 196,895 Gross profit — 64,355 4,847 (359 ) 68,843 Selling, general, and administrative expense 14,134 29,206 (3,073 ) — 40,267 (Loss) income from operations (14,134 ) 35,149 7,920 (359 ) 28,576 Interest expense (income) 3,401 285 (20 ) — 3,666 Other expense (income) 8,533 225 (563 ) — 8,195 (Loss) income before taxes (26,068 ) 34,639 8,503 (359 ) 16,715 (Benefit of) provision for income taxes (8,275 ) 5,293 1,085 — (1,897 ) Equity in earnings from subsidiaries 36,764 7,418 — (44,182 ) — Net income $ 18,971 $ 36,764 $ 7,418 $ (44,541 ) $ 18,612 GIBRALTAR INDUSTRIES, INC. CONSOLIDATING STATEMENTS OF OPERATIONS SIX MONTHS ENDED JUNE 30, 2017 (in thousands) Gibraltar Industries, Inc. Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Net sales $ — $ 436,400 $ 21,869 $ (4,037 ) $ 454,232 Cost of sales — 329,286 17,721 (3,855 ) 343,152 Gross profit — 107,114 4,148 (182 ) 111,080 Selling, general, and administrative expense 77 70,187 6,207 — 76,471 (Loss) income from operations (77 ) 36,927 (2,059 ) (182 ) 34,609 Interest expense (income) 6,805 354 (33 ) — 7,126 Other expense — 245 162 — 407 (Loss) income before taxes (6,882 ) 36,328 (2,188 ) (182 ) 27,076 (Benefit of) provision for income taxes (2,684 ) 12,738 (148 ) — 9,906 (Loss) income from continuing operations (4,198 ) 23,590 (2,040 ) (182 ) 17,170 Discontinued operations: Loss from discontinued operations before taxes — (644 ) — — (644 ) Benefit of income taxes — (239 ) — — (239 ) Loss from discontinued operations — (405 ) — — (405 ) Equity in earnings (loss) from subsidiaries 21,145 (2,040 ) — (19,105 ) — Net income (loss) $ 16,947 $ 21,145 $ (2,040 ) $ (19,287 ) $ 16,765 GIBRALTAR INDUSTRIES, INC. CONSOLIDATING STATEMENTS OF OPERATIONS SIX MONTHS ENDED JUNE 30, 2016 (in thousands) Gibraltar Industries, Inc. Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Net sales $ — $ 463,125 $ 47,215 $ (6,931 ) $ 503,409 Cost of sales — 348,996 37,715 (6,295 ) 380,416 Gross profit — 114,129 9,500 (636 ) 122,993 Selling, general, and administrative expense 14,174 61,117 1,365 — 76,656 (Loss) income from operations (14,174 ) 53,012 8,135 (636 ) 46,337 Interest expense (income) 6,804 595 (42 ) — 7,357 Other expense (income) 8,487 441 (768 ) — 8,160 (Loss) income before taxes (29,465 ) 51,976 8,945 (636 ) 30,820 (Benefit of) provision for income taxes (9,482 ) 11,385 1,276 — 3,179 Equity in earnings from subsidiaries 48,260 7,669 — (55,929 ) — Net income $ 28,277 $ 48,260 $ 7,669 $ (56,565 ) $ 27,641 GIBRALTAR INDUSTRIES, INC. CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME THREE MONTHS ENDED JUNE 30, 2017 (in thousands) Gibraltar Industries, Inc. Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Net income (loss) $ 12,705 $ 14,802 $ (1,348 ) $ (13,390 ) $ 12,769 Other comprehensive income (loss): Foreign currency translation adjustment — — 1,091 — 1,091 Adjustment to retirement benefit liability, net of tax — (3 ) — — (3 ) Adjustment to post employment health care benefit liability, net of tax — 30 — — 30 Other comprehensive income — 27 1,091 — 1,118 Total comprehensive income (loss) $ 12,705 $ 14,829 $ (257 ) $ (13,390 ) $ 13,887 GIBRALTAR INDUSTRIES, INC. CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME THREE MONTHS ENDED JUNE 30, 2016 (in thousands) Gibraltar Industries, Inc. Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Net income $ 18,971 $ 36,764 $ 7,418 $ (44,541 ) $ 18,612 Other comprehensive income (loss): Foreign currency translation adjustment — — 7,753 — 7,753 Adjustment to retirement benefit liability, net of tax — (1 ) — — (1 ) Adjustment to post employment health care benefit liability, net of tax — 38 — — 38 Other comprehensive income — 37 7,753 — 7,790 Total comprehensive income $ 18,971 $ 36,801 $ 15,171 $ (44,541 ) $ 26,402 GIBRALTAR INDUSTRIES, INC. CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME SIX MONTHS ENDED JUNE 30, 2017 (in thousands) Gibraltar Industries, Inc. Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Net income (loss) $ 16,947 $ 21,145 $ (2,040 ) $ (19,287 ) $ 16,765 Other comprehensive income (loss): Foreign currency translation adjustment — — 1,770 — 1,770 Adjustment to retirement benefit liability, net of tax — (6 ) — — (6 ) Adjustment to post employment health care benefit liability, net of tax — 59 — — 59 Other comprehensive income — 53 1,770 — 1,823 Total comprehensive income (loss) $ 16,947 $ 21,198 $ (270 ) $ (19,287 ) $ 18,588 GIBRALTAR INDUSTRIES, INC. CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME SIX MONTHS ENDED JUNE 30, 2016 (in thousands) Gibraltar Industries, Inc. Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Net income $ 28,277 $ 48,260 $ 7,669 $ (56,565 ) $ 27,641 Other comprehensive income (loss): Foreign currency translation adjustment — — 10,831 — 10,831 Adjustment to retirement benefit liability, net of tax — (2 ) — — (2 ) Adjustment to post employment health care benefit liability, net of tax — 76 — — 76 Other comprehensive income — 74 10,831 — 10,905 Total comprehensive income $ 28,277 $ 48,334 $ 18,500 $ (56,565 ) $ 38,546 GIBRALTAR INDUSTRIES, INC. CONSOLIDATING BALANCE SHEETS JUNE 30, 2017 (in thousands) Gibraltar Industries, Inc. Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Assets Current assets: Cash and cash equivalents $ — $ 158,843 $ 23,536 $ — $ 182,379 Accounts receivable, net — 131,513 7,358 — 138,871 Intercompany balances (10,789 ) 15,604 (4,815 ) — — Inventories — 81,927 4,138 — 86,065 Other current assets 2,730 1,498 4,123 — 8,351 Total current assets (8,059 ) 389,385 34,340 — 415,666 Property, plant, and equipment, net — 92,450 3,419 — 95,869 Goodwill — 298,399 22,449 — 320,848 Acquired intangibles — 101,232 9,093 — 110,325 Other assets — 4,750 — — 4,750 Investment in subsidiaries 705,610 58,978 — (764,588 ) — $ 697,551 $ 945,194 $ 69,301 $ (764,588 ) $ 947,458 Liabilities and Shareholders’ Equity Current liabilities: Accounts payable $ — $ 84,230 $ 3,777 $ — $ 88,007 Accrued expenses 7,369 60,533 1,487 — 69,389 Billings in excess of cost — 11,524 2,439 13,963 Current maturities of long-term debt — 400 — — 400 Total current liabilities 7,369 156,687 7,703 — 171,759 Long-term debt 208,279 950 — — 209,229 Deferred income taxes — 35,583 2,620 — 38,203 Other non-current liabilities — 46,364 — — 46,364 Shareholders’ equity 481,903 705,610 58,978 (764,588 ) 481,903 $ 697,551 $ 945,194 $ 69,301 $ (764,588 ) $ 947,458 GIBRALTAR INDUSTRIES, INC. CONSOLIDATING BALANCE SHEETS DECEMBER 31, 2016 (in thousands) Gibraltar Industries, Inc. Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Assets Current assets: Cash and cash equivalents $ — $ 143,826 $ 26,351 $ — $ 170,177 Accounts receivable, net — 117,526 6,546 — 124,072 Intercompany balances (615 ) 6,152 (5,537 ) — — Inventories — 85,483 4,129 — 89,612 Other current assets 13,783 (10,070 ) 3,623 — 7,336 Total current assets 13,168 342,917 35,112 — 391,197 Property, plant, and equipment, net — 104,642 3,662 — 108,304 Goodwill — 282,300 21,732 — 304,032 Acquired intangibles — 101,520 9,270 — 110,790 Other assets — 3,922 — — 3,922 Investment in subsidiaries 663,118 58,477 — (721,595 ) — $ 676,286 $ 893,778 $ 69,776 $ (721,595 ) $ 918,245 Liabilities and Shareholders’ Equity Current liabilities: Accounts payable $ — $ 66,363 $ 3,581 $ — $ 69,944 Accrued expenses 7,369 60,004 3,019 — 70,392 Billings in excess of cost — 9,301 2,051 — 11,352 Current maturities of long-term debt — 400 — — 400 Total current liabilities 7,369 136,068 8,651 — 152,088 Long-term debt 208,037 1,200 — — 209,237 Deferred income taxes — 35,354 2,648 — 38,002 Other non-current liabilities — 58,038 — — 58,038 Shareholders’ equity 460,880 663,118 58,477 (721,595 ) 460,880 $ 676,286 $ 893,778 $ 69,776 $ (721,595 ) $ 918,245 GIBRALTAR INDUSTRIES, INC. CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS SIX MONTHS ENDED JUNE 30, 2017 (in thousands) Gibraltar Industries, Inc. Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Cash Flows from Operating Activities Net cash (used in) provided by operating activities $ (6,640 ) $ 31,687 $ (3,327 ) $ — $ 21,720 Cash Flows from Investing Activities Cash paid for acquisitions — (18,494 ) — — (18,494 ) Net proceeds from sale of property and equipment — 12,627 151 — 12,778 Purchases of property, plant, and equipment — (3,123 ) (151 ) — (3,274 ) Net cash used in investing activities — (8,990 ) — — (8,990 ) Cash Flows from Financing Activities Long-term debt payments — (400 ) — — (400 ) Purchase of treasury stock at market prices (1,003 ) — — — (1,003 ) Net proceeds from issuance of common stock 247 — — — 247 Intercompany financing 7,396 (7,280 ) (116 ) — — Net cash provided by (used in) financing activities 6,640 (7,680 ) (116 ) — (1,156 ) Effect of exchange rate changes on cash — — 628 — 628 Net increase (decrease) in cash and cash equivalents — 15,017 (2,815 ) — 12,202 Cash and cash equivalents at beginning of year — 143,826 26,351 — 170,177 Cash and cash equivalents at end of period $ — $ 158,843 $ 23,536 $ — $ 182,379 GIBRALTAR INDUSTRIES, INC. CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS SIX MONTHS ENDED JUNE 30, 2016 (in thousands) Gibraltar Industries, Inc. Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Total Cash Flows from Operating Activities Net cash (used in) provided by operating activities $ (27,296 ) $ 62,474 $ 14,263 $ — $ 49,441 Cash Flows from Investing Activities Cash paid for acquisitions — (2,314 ) — — (2,314 ) Net proceeds from sale of property and equipment — 133 29 — 162 Purchases of property, plant, and equipment — (3,852 ) (183 ) — (4,035 ) Net proceeds from sale of business — — 8,479 — 8,479 Other, net — 1,118 — — 1,118 Net cash (used in) provided by investing activities — (4,915 ) 8,325 — 3,410 Cash Flows from Financing Activities Long-term debt payments — (400 ) — — (400 ) Payment of debt issuance costs — (54 ) — — (54 ) Purchase of treasury stock at market prices (462 ) — — — (462 ) Net proceeds from issuance of common stock 2,057 — — — 2,057 Intercompany financing 25,701 4,060 (29,761 ) — — Net cash provided by (used in) financing activities 27,296 3,606 (29,761 ) — 1,141 Effect of exchange rate changes on cash — — 1,264 — 1,264 Net increase (decrease) in cash and cash equivalents — 61,165 (5,909 ) — 55,256 Cash and cash equivalents at beginning of year — 39,597 29,261 — 68,858 Cash and cash equivalents at end of period $ — $ 100,762 $ 23,352 $ — $ 124,114 |