Gibraltar Industries (ROCK) 8-K Gibraltar Announces First-Quarter Results

Exhibit 99.1

Contact:

Kenneth Smith
Chief Financial Officer
716.826.6500 ext. 3217
kwsmith@gibraltar1.com.

Gibraltar Announces First-Quarter Results

Sales up 12% Year over Year; Operating Margin Before Special Charges Rises 430 bps

Non-GAAP EPS of $0.11 versus Prior-Year Loss

Buffalo, New York, May 4, 2011— Gibraltar Industries, Inc. (Nasdaq: ROCK), a leading manufacturer and distributor of products for building and industrial markets, today reported its financial results for the three months ended March 31, 2011. As announced on March 10, 2011, Gibraltar completed its sale of the United Steel Products connector business. The operating results of this business have been reclassified to discontinued operations in the financial results being reported. Also, Gibraltar’s acquisition of The D.S. Brown Company was closed April 1, 2011, and, therefore, its financial position and results are not reported in Gibraltar’s financial results as of and for the three months ended March 31, 2011, but will be going forward.

Management Comments on Financial Results

“Our first-quarter 2011 results were in alignment with our expectations and, as we discussed last quarter, we capitalized on the ongoing improvements we have made in our businesses,” said Gibraltar Chairman and Chief Executive Officer Brian Lipke. “Although activity in our end-markets remained generally weak, our first-quarter sales and profits were up both sequentially and year-over-year compared with the first quarter of 2010. We executed well on our plans to get deeper product penetration with our customers, and Gibraltar’s sales continued to grow faster than the market as a whole. Our focus on repair, remodel and replacement segments of both the residential and non-residential markets across the broad geographic areas we serve helped our order rates despite weak new build housing activity.”

“Gibraltar’s improved top-line results for the first quarter included a shift in our business mix toward sales of products for the nonresidential market,” said Gibraltar President and Chief Operating Officer Henning Kornbrekke. “Our sales into industrial markets, in particular, were a bright spot in what otherwise remained an environment of very slow and uneven market growth in the first quarter. From a small base, we have been steadily increasing our industrial market penetration and these gains contributed to our first-quarter results.”

“During the first quarter, we closed two facilities in Europe, and are now servicing customers from our remaining European facilities,” said Kornbrekke. “Adopting lean manufacturing techniques across the company have allowed to us shorten our production lead times while freeing up space in our existing facilities, making such consolidations possible. Along with eliminating the inventories associated with closed facilities, we completed key investments in IT systems in 2010 that are enhancing our supply chain planning and procurement processes and inventory management capabilities.”

“These improvements have enabled us to successfully manage the recent volatility in raw material costs,” Kornbrekke said. “Although commodity volatility is likely to continue in the second and third quarters of this year, we expect to be able to manage this volatility with less impact on margins in 2011 than in 2010. These efforts will continue to center primarily on the cost side of the equation. We remain focused on providing outstanding service to our customers, and we are dedicated to providing them with competitive pricing.”

For the first quarter of 2011, net sales increased 12% to $163.6 million from $146.7 million for the first quarter of 2010. The Company’s GAAP income from continuing operations for the first quarter of 2011 was $1.4 million, or $0.05 per diluted share, compared with a loss of $2.4 million, or $0.08 per diluted share, for the first quarter of 2010. GAAP income from continuing operations for the first quarter of 2011 included after-tax special charges of $1.8 million, or $0.06 per diluted share, resulting from acquisition costs, exit activity costs related to business restructuring, and equity compensation declined by Mr. Lipke. After-tax special charges for the first quarter of 2010 included $0.8 million largely for an ineffective interest rate swap.

The Company’s first quarter 2011 non-GAAP income from continuing operations before special charges was $3.2 million, or $0.11 per share, compared with a loss of $1.6 million, or $0.05 per share, in the first quarter of 2010.

Gross margin before special charges increased to 19% in the first quarter of 2011 from 18% in the first quarter of 2010. The increase was primarily due to higher unit sales volume and operating efficiency.

Selling, general and administrative expense before special charges decreased 12% to $21.5 million for the first quarter of 2011 from $24.4 million in the first quarter of 2010. The decrease was primarily the result of lower variable compensation and wages on reduced staffing levels.

Liquidity and Capital Resources

• Gibraltar’s liquidity increased to $208 million as of March 31, 2011, including cash on hand of $105 million. Cash on hand included $58 million received on March 10, 2011, from the sale of the United Steel Products connectors business.

• The Company’s net working capital increased by $24.3 million since December 31, 2010, as 12% sales growth in Q1 2011 increased the investment in accounts receivable while days of net working capital improved to 56. We define working capital to consist of accounts receivable, inventory, and accounts payable.

• As a result, Gibraltar reduced its net debt outstanding by $43.5 million, or 30%, to $102.8 million as of March 31, 2011, from $146.3 million as of December 31, 2010.

Outlook

“With the work we have done to consolidate our footprint and improve our underlying operations and our success at obtaining market share gains, Gibraltar is in an excellent position to deliver improved sales and profitability in 2011,” Lipke said. “At the same time, with faster working capital turns and a good record of generating cash from operations, we are also in a position to supplement our organic growth with growth from accretive acquisitions.”

“Although the signs of end-market recovery have been inconsistent and modest at best, we have, in fact, seen some evidence of improvement,” said Lipke. “We entered 2011 with more efficient, centralized manufacturing and distribution facilities, as well as enhanced customer service capabilities aided by past restructuring activities. As a result, we are confident in our ability to report continued profitability improvement in the second quarter and full year.”

First quarter Conference Call Details

Gibraltar has scheduled a conference call to review its results for the first quarter of 2011 tomorrow, May 5, 2011, starting at 9:00 a.m. ET. Interested parties may access the call by dialing (866) 730-5768 or (857) 350-1592. Participants are required to provide the pass code: 97664508. The presentation slides that will be discussed in the conference call are expected to be available on the evening of Wednesday, May 4, 2011. The slides may be downloaded from the Conference Calls page of the Investor Info section of the Gibraltar website: http://www.gibraltar1.com/investors/index.cfm?page=48. A replay of the conference call and a copy of the transcript will be available on the Gibraltar website following the call.

About Gibraltar

Gibraltar Industries is North America’s leading manufacturer and distributor of ventilation products, mail storage (single and cluster), rain dispersion, bar grating, expanded metal, metal lath, expansion joints, and structural bearing products. The Company serves customers in a variety of industries in all 50 states and throughout the world from 36 facilities in 19 states, Canada, England, and Germany and holds leadership positions in major product categories. Comprehensive information about Gibraltar can be found on its website, at http://www.gibraltar1.com.

Safe Harbor Statement

Information contained in this news release, other than historical information, contains forward-looking statements and are subject to a number of risk factors, uncertainties, and assumptions. Risk factors that could affect these statements include, but are not limited to, the following: the availability of raw materials and the effects of changing raw material prices on the Company’s results of operations; energy prices and usage; changing demand for the Company’s products and services; changes in the liquidity of the capital and credit markets; risks associated with the integration of acquisitions; and changes in interest and tax rates. In addition, such forward-looking statements could also be affected by general industry and market conditions, as well as general economic and political conditions. The Company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable law or regulation.

Non-GAAP Financial Data

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

Next Earnings Announcement

Gibraltar expects to release its financial results for the three months ending June 30, 2011, on Wednesday, August 3, 2011, and hold its earnings conference call on Thursday, August 4, 2011, starting at 9:00 a.m. ET.

GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)

	Three Months Ended
	March 31
	2011			2010
Net sales	$	163,563		$	146,674
Cost of sales		133,518			120,217
Gross profit		30,045			26,457
Selling, general, and administrative expense		22,823			24,272
Income from operations		7,222			2,185
Interest expense		(4,454	)		(6,570	)
Equity in partnership’s income and other income		23			71
Income (loss) before taxes		2,791			(4,314	)
Provision for (benefit of) income taxes		1,350			(1,922	)
Income (loss) from continuing operations		1,441			(2,392	)
Discontinued operations:
Income (loss) before taxes		12,946			(30,085	)
Provision for (benefit of) income taxes		5,978			(11,246	)
Income (loss) from discontinued operations		6,968			(18,839	)
Net income (loss)	$	8,409		$	(21,231	)
Net income (loss) per share — Basic:
Income (loss) from continuing operations	$	0.05		$	(0.08	)
Income (loss) from discontinued operations		0.23			(0.62	)
Net income (loss)	$	0.28		$	(0.70	)
Weighted average shares outstanding — Basic		30,425			30,261
Net income (loss) per share — Diluted:
Income (loss) from continuing operations	$	0.05		$	(0.08	)
Income (loss) from discontinued operations		0.22			(0.62	)
Net income (loss)	$	0.27		$	(0.70	)
Weighted average shares outstanding — Diluted		30,594			30,261

GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
(unaudited)

	March 31,			December 31,
	2011			2010
Assets
Current assets:
Cash and cash equivalents	$	104,504		$	60,866
Accounts receivable, net of reserve of $3,626 and $3,504 in 2011 and 2010, respectively		95,308			70,371
Inventories		92,346			77,848
Other current assets		21,307			20,229
Assets of discontinued operations		2,576			13,063
Total current assets		316,041			242,377
Property, plant, and equipment, net		142,634			145,783
Goodwill		299,463			298,346
Acquired intangibles		65,539			66,301
Equity method investment		—			1,345
Other assets		8,067			16,766
Assets of discontinued operations		—			39,972
	$	831,744		$	810,890
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	71,874		$	56,775
Accrued expenses		40,623			36,785
Current maturities of long-term debt		408			408
Liabilities of discontinued operations		52			6,150
Total current liabilities		112,957			100,118
Long-term debt		206,874			206,789
Deferred income taxes		38,669			37,119
Other non-current liabilities		19,804			23,221
Liabilities of discontinued operations		—			2,790
Shareholders’ equity:
Preferred stock, $0.01 par value; authorized: 10,000,000 shares; none outstanding		—			—
Common stock, $0.01 par value; authorized 50,000,000 shares; 30,670,993 and 30,516,197 shares issued at March 31, 2011 and December 31, 2010, respectively		307			305
Additional paid-in capital		234,283			231,999
Retained earnings		221,323			212,914
Accumulated other comprehensive income (loss)		562			(2,060	)
Cost of 272,697 and 218,894 common shares held in treasury at March 31, 2011 and December 31, 2010, respectively		(3,035	)		(2,305	)
Total shareholders’ equity		453,440			440,853
	$	831,744		$	810,890

GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)

	Three Months Ended
	March 31,
	2011			2010
Cash Flows from Operating Activities
Net income (loss)	$	8,409		$	(21,231	)
Income (loss) from discontinued operations		6,968			(18,839	)
Income (loss) from continuing operations		1,441			(2,392	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		5,891			6,076
Provision for deferred income taxes		—			125
Equity in partnership’s loss (income)		14			(43	)
Stock compensation expense		2,276			1,679
Non-cash charges to interest expense		564			2,407
Other non-cash adjustments		523			(434	)
Increase (decrease) in cash resulting from changes in:
Accounts receivable		(24,610	)		(15,378	)
Inventories		(14,054	)		(6,757	)
Other current assets and other assets		7,686			(1,753	)
Accounts payable		15,790			18,362
Accrued expenses and other non-current liabilities		(4,755	)		1,531
Net cash (used in) provided by operating activities of continuing operations		(9,234	)		3,423
Net cash (used in) provided by operating activities of discontinued operations		(3,086	)		15,411
Net cash (used in) provided by operating activities		(12,320	)		18,834
Cash Flows from Investing Activities
Net proceeds from sale of business		58,000			30,100
Net proceeds from sale of property and equipment		463			7
Purchases of property, plant, and equipment		(1,785	)		(1,519	)
Net cash provided by investing activities of continuing operations		56,678			28,588
Net cash used in investing activities of discontinued operations		—			(286	)
Net cash provided by investing activities		56,678			28,302
Cash Flows from Financing Activities
Long-term debt payments		—			(50,000	)
Purchase of treasury stock at market prices		(730	)		(991	)
Payment of deferred financing fees		—			(48	)
Excess tax benefit from stock compensation		—			106
Net proceeds from issuance of common stock		10			—
Net cash used in financing activities		(720	)		(50,933	)
Net increase (decrease) in cash and cash equivalents		43,638			(3,797	)
Cash and cash equivalents at beginning of year		60,866			23,596
Cash and cash equivalents at end of period	$	104,504		$	19,799

GIBRALTAR INDUSTRIES, INC.
Non-GAAP Reconciliation of Results Excluding Special Charges
(unaudited)
(in thousands, except per share data)

	Three Months Ended March 31, 2011
	As												Results
	Reported						Surrendered			Exit			Excluding
	In GAAP			Acquisition			Equity			Activity			Special
	Statements			Costs			Compensation			Costs			Charges
Net sales	$	163,563		$	—		$	—		$	—		$	163,563
Cost of sales		133,518			—			—			(858	)		132,660
Gross profit		30,045			—			—			858			30,903
Selling, general, and administrative expense		22,823			(390	)		(885	)		(10	)		21,538
Income from operations		7,222			390			885			868			9,365
Operating margin		4.4	%		0.2	%		0.5	%		0.6	%		5.7	%
Interest expense		(4,454	)		—			—			—			(4,454	)
Equity in partnership’s income and other income		23			—			—			—			23
Income before income taxes		2,791			390			885			868			4,934
Provision for income taxes		1,350			—			—			348			1,698
Income from continuing operations	$	1,441		$	390		$	885		$	520		$	3,236
Income from continuing operations per share — diluted	$	0.05		$	0.01		$	0.03		$	0.02		$	0.11

GIBRALTAR INDUSTRIES, INC.
Non-GAAP Reconciliation of Results Excluding Special Charges
(unaudited)
(in thousands, except per share data)

	Three Months Ended March 31, 2010
				Disconti			As
				nued			Reported
				Operatio			In			Intangible									Results
	As			ns			GAAP			Asset			Ineffective			Exit			Excluding
	Reported			Restate			Statem			Impairment			Interest			Activity			Special
	Previously			ment			ents			Adjustment			Rate Swap			Costs			Charges
Net sales	$	157,528		$	(10,854	)	$	146,674		$	—		$	—		$	—		$	146,674
Cost of sales		128,113			(7,896	)		120,217			—			—			(47	)		120,170
Gross profit		29,415			(2,958	)		26,457			—			—			47			26,504
Selling, general, and administrative expense		26,836			(2,564	)		24,272			177			—			—			24,449
Income from operations		2,579			(394	)		2,185			(177	)		—			47			2,055
Operating margin		1.6	%					1.5	%		(0.1	)%		0.0	%		0.0	%		1.4	%
Interest expense		(7,051	)		481			(6,570	)		—			1,424			—			(5,146	)
Equity in partnership’s income and other income		71			—			71			—			—			—			71
Loss before income taxes		(4,401	)		87			(4,314	)		(177	)		1,424			47			(3,020	)
Benefit of income taxes		(2,085	)		163			(1,922	)		(73	)		520			19			(1,456	)
Loss from continuing operations	$	(2,316	)	$	(76	)	$	(2,392	)	$	(104	)	$	904		$	28		$	(1,564	)
Loss from continuing operations per share — diluted	$	(0.08	)	$	(0.00	)	$	(0.08	)	$	(0.00	)	$	0.03		$	0.00		$	(0.05	)

GIBRALTAR INDUSTRIES, INC.
Non-GAAP Reconciliation of Results Excluding Special Charges
(unaudited)
(in thousands, except per share data)

	Three Months Ended June 30, 2010
							As						Results
	As			Discontinued			Reported			Exit			Excluding
	Reported			Operations			In GAAP			Activity			Special
	Previously			Restatement			Statements			Costs			Charges
Net sales	$	191,771		$	(14,847	)	$	176,924		$	—		$	176,924
Cost of sales		152,705			(9,762	)		142,943			(417	)		142,526
Gross profit		39,066			(5,085	)		33,981			417			34,398
Selling, general, and administrative expense		27,373			(2,829	)		24,544			(77	)		24,467
Income from operations		11,693			(2,256	)		9,437			494			9,931
Operating margin		6.1	%					5.3	%		0.3	%		5.6	%
Interest expense		(4,686	)		334			(4,352	)		—			(4,352	)
Equity in partnership’s income and other income		60			—			60			—			60
Income before income taxes		7,067			(1,922	)		5,145			494			5,639
Provision for income taxes		3,279			(727	)		2,552			229			2,781
Income from continuing operations	$	3,788		$	(1,195	)	$	2,593		$	265		$	2,858
Income from continuing operations per share — diluted	$	0.12		$	(0.03	)	$	0.09		$	0.00		$	0.09

GIBRALTAR INDUSTRIES, INC.
Non-GAAP Reconciliation of Results Excluding Special Charges
(unaudited)
(in thousands, except per share data)

	Three Months Ended September 30, 2010
								As					Results
	As			Discontinued			Reported			Exit			Excluding
	Reported			Operations			In GAAP			Activity			Special
	Previously			Restatement			Statements			Costs			Charges
Net sales	$	182,061		$	(12,320	)	$	169,741		$	—		$	169,741
Cost of sales		150,758			(8,515	)		142,243			(438	)		141,805
Gross profit		31,303			(3,805	)		27,498			438			27,936
Selling, general, and administrative expense		25,840			(2,578	)		23,262			—			23,262
Income from operations		5,463			(1,227	)		4,236			438			4,674
Operating margin		3.0	%					2.5	%		0.3	%		2.8	%
Interest expense		(4,746	)		317			(4,429	)		—			(4,429	)
									��
Equity in partnership’s income and other income		33			(3	)		30			—			30
Income (loss) before income taxes		750			(913	)		(163	)		438			275
Benefit of income taxes		(592	)		(352	)		(944	)		12			(932	)
Income from continuing operations	$	1,342		$	(561	)	$	781		$	426		$	1,207
Income from continuing operations per share — diluted	$	0.04		$	(0.01	)	$	0.03		$	0.01		$	0.04

GIBRALTAR INDUSTRIES, INC.
Non-GAAP Reconciliation of Results Excluding Special Charges
(unaudited)
(in thousands, except per share data)

	Three Months Ended December 31, 2010
							As						Deferred						Results
	As			Discontinued			Reported			Intangible			Tax			Exit			Excluding
	Reported			Operations			In GAAP			Asset			Valuation			Activity			Special
	Previously			Restatement			Statements			Impairment			Allowance			Costs			Charges
Net sales	$	153,708		$	(9,593	)	$	144,115		$	—		$	—		$	—		$	144,115
Cost of sales		135,097			(6,914	)		128,183			—			—			(5,459	)		122,724
Gross profit		18,611			(2,679	)		15,932			—			—			5,459			21,391
Selling, general, and administrative expense		29,311			(2,020	)		27,291			—			—			(647	)		26,644
Intangible asset impairment		77,141			—			77,141			(77,141	)		—			—			—
Loss from operations		(87,841	)		(659	)		(88,500	)		77,141			—			6,106			(5,253	)
Operating margin		(57.1	)%					(61.4	)%		53.5	%		0.0	%		4.3	%		(3.6	)%
Interest expense		(4,677	)		314			(4,363	)		—			—			—			(4,363	)
Equity in partnership’s loss and other loss		(83	)		(1	)		(84	)		—			—			—			(84	)
Loss before income taxes		(92,601	)		(346	)		(92,947	)		77,141			—			6,106			(9,700	)
Benefit of income taxes		(16,391	)		(218	)		(16,609	)		14,485			(2,400	)		1,374			(3,150	)
Loss from continuing operations	$	(76,210	)	$	(128	)	$	(76,338	)	$	62,656		$	2,400		$	4,732		$	(6,550	)
Loss from continuing operations per share — diluted	$	(2.51	)	$	(0.01	)	$	(2.52	)	$	2.07		$	0.08		$	0.15		$	(0.22	)

GIBRALTAR INDUSTRIES, INC.
Non-GAAP Reconciliation of Results Excluding Special Charges
(unaudited)
(in thousands, except per share data)

	Year Ended December 31, 2010
							As						Results
	As			Discontinued			Reported						Excluding
	Reported			Operations			In GAAP			Special			Special
	Previously			Restatement			Statements			Charges			Charges
Net sales	$	685,068		$	(47,614	)	$	637,454		$	—		$	637,454
Cost of sales		566,673			(33,087	)		533,586			(6,361	)		527,225
Gross profit		118,395			(14,527	)		103,868			6,361			110,229
Selling, general, and administrative expense		109,537			(9,991	)		99,546			(724	)		98,822
Intangible asset impairment		76,964			—			76,964			(76,964	)		—
(Loss) income from operations		(68,106	)		(4,536	)		(72,642	)		84,049			11,407
Operating margin		(9.9	)%					(11.4	)%		13.2	%		1.8	%
Interest expense		(21,160	)		1,446			(19,714	)		1,424			(18,290	)
Equity in partnership’s income and other income		81			(4	)		77			—			77
Loss before income taxes		(89,185	)		(3,094	)		(92,279	)		85,473			(6,806	)
Benefit of income taxes		(15,789	)		(1,134	)		(16,923	)		14,166			(2,757	)
Loss from continuing operations	$	(73,396	)	$	(1,960	)	$	(75,356	)	$	71,307		$	(4,049	)
Loss from continuing operations per share — diluted	$	(2.42	)	$	(0.07	)	$	(2.49	)	$	2.36		$	(0.13	)