The Company’s amended and restated credit agreement dated December 8, 2005 provides a revolving credit facility and a term loan. The revolving credit facility of $300,000,000 and term loan of $230,000,000 are collateralized by the Company’s accounts receivable, inventories, and personal property and equipment. The revolving credit facility is committed through December 8, 2010 and the term loan is due December 8, 2012.
The revolving credit facility carries a facility fee of between 17.5 and 65 basis points which is payable quarterly. This facility has various interest rate options, which are no greater than the bank’s prime rate (5.75% at December 31, 2005).At December 31, 2005, the Company had $25,000,000 outstanding with interest at LIBOR plus a margin equal to 5.52%. At December 31, 2004, the Company had interest rate exchange agreements (to manage interest costs and exposure to changing interest rates) outstanding which expired in 2005 and effectively converted $20,000,000 of floating rate debt to fixed rates ranging from 7.22% to 7.70%. Additional borrowings under the revolving credit facility of $130,000,000 had an interest rate of LIBOR plus a fixed rate at December 31, 2004. There were additional borrowings of $7,636,000 at the prime rate at December 31, 2004. The weighted average interest rate of these borrowings was 4.59% at December 31, 2004. $11,884,000 of standby letters of credit have been issued under the revolving credit agreement to third parties on behalf of the Company at December 31, 2005. These letters of credit reduce the amount otherwise available. $263,116,000 was available under the revolving credit facility at December 31, 2005.
The term loan carries interest at various rates, including a base rate which is the greater of the bank’s prime rate (5.75% at December 31) or the federal funds rate plus 50 basis points, or LIBOR plus 175 basis points. At December 31, 2005, the Company had interest rate swap agreements (to manage interest costs and exposure to changing interest rates) outstanding which expire in 2007 and 2010 and effectively converted $115,000,000 of floating rate debt to fixed rates ranging from 6.70% to 6.78%. Additional borrowings under the revolving credit facility of $130,000,000 had an interest rate of LIBOR plus a fixed rate at December 31, 2005. The weighted average interest rate of these borrowings was 6.51% at December 31, 2005.
On December 8, 2005 the Company issued $204,000,000 of 8% senior subordinated notes, due December 1, 2015, at a discount to yield 8.25%. Provisions of the 8% notes include, without limitation, restrictions on indebtedness liens, distributions from restricted subsidiaries, asset sales, affiliate transactions, dividends and other restricted payments. Prior to December 1, 2008, up to 35% of the 8% notes are redeemable at the option of the Company from the proceeds of an equity offering at a premium of 108% of the face value, plus accrued and unpaid interest. After December 1, 2010 the notes are redeemable at the option of the Company, in whole or in part, at the redemption price (as defined in the notes agreement), which declines annually from 104% to 100% on and after December 1, 2013. In the event of a Change of Control (as defined in the indenture for such notes), each holder of the 8% Notes may require the Company to repurchase all or a portion of such holder’s 8% Notes at a purchase price equal to 101% of the principal amount thereof. The 8% Notes are guaranteed by certain existing and future domestic subsidiaries and are not subject to any sinking fund requirements.
The borrowings under the term loan and 8% senior subordinated notes were used to pay down the interim financing facility described below and revolving line of credit and pay financing costs.
On October 3, 2005 the Company entered into a term loan agreement with a consortium of banks pursuant to which the lenders made a senior secured term loan of $300,000,000 due October 4, 2006. This loan and the Company’s revolving credit facility were used to fund the acquisition of AMICO and satisfy the (i) the Senior Secured Note with The Prudential Insurance Company of America dated July 3, 2002, as amended; (ii) the Subordinated Note with The Prudential Insurance Company of America dated July 3, 2002, as amended; (iii) the Senior Secured Note Purchase Agreement with The Prudential Life Insurance Company of America and Pruco Life Insurance Company dated June 18, 2004, as amended; and (iv) the $42,295,000 subordinated promissory note, dated May 1, 2003, payable to CertainTeed Corporation. This term loan agreement was satisfied on December 8, 2005 as described above.
In June 2004, the Company entered into a $75,000,000 private placement of debt with The Prudential Insurance Company of America. This senior secured note bore interest at 5.75% annually and had a seven year term. The Company drew down $55,000,000 which was outstanding at December 31, 2004 and an additional $10,000,000 was drawn during 2005. This note was paid on October 3, 2005 as described above, and in addition to paying outstanding principal and interest of $65,166,000, the Company was required to provide a “make whole” payment of $3,556,000 which was expensed as interest in 2005.
The Company’s acquisition notes payable consists of debt incurred in connection with the 2003 acquisitions of Construction Metals and Air Vent. 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 equal annual principal installments of $2,917,000 per note on April 1, 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. Interest expense related to these notes payable aggregated approximately $364,000, $658,000 and $660,000 in 2005, 2004 and 2003, respectively. At December 31, 2005, the current portion of these notes aggregated approximately $5,833,000 and accrued interest aggregated approximately $74,000 and $147,000 at December 31, 2005 and 2004, respectively.
In connection with the acquisition of Air Vent, the Company entered into an unsecured subordinated note payable to the former owner of Air Vent, in the amount of $42,295,000. The note was payable in annual principal installments of $8,459,000 on May 1, with the final principal payment due on May 1, 2008. The note was paid on October 3, 2005 as described above. The principal and interest paid on October 3, 2005 related to this note equaled $25,920,000.
The Company’s private placement demand notes consisted of a $25,000,000 senior secured note that bore interest at 7.35% annually and a $25,000,000 senior subordinated note that bore interest at 8.98% annually. These notes were paid on October 3, 2005 as described above, and in addition to paying aggregate outstanding principal and interest of $51,021,000, the Company was required to provide “make whole” payments of $3,197,000 which were expensed as interest in 2005.
In addition, the Company has an Industrial Development Revenue Bond payable in installments through September 2018, with interest rates ranging from a fixed rate of 4.22% to a variable rate of 3.68% at December 31, 2005, which financed the cost of the expansion of its Coldwater, Michigan heat-treating facility under a capital lease agreement. The cost of the facility and equipment equals the amount of the bonds and includes accumulated amortization of $1,008,000. The agreement provides for the purchase of the facility and equipment at any time during the lease term at scheduled amounts or at the end of the lease for a nominal amount.
57
The aggregate maturities of long-term debt for the next five years and thereafter are as follows: 2006—$8,364,000; 2007—$2,536,000; 2008—$2,413,000; 2009—$2,400,000; 2010—$27,400,000; and $419,900,000, thereafter.
The various loan agreements, which do not require compensating balances, contain provisions that limit additional borrowings and require maintenance of minimum net worth and financial ratios. The Company is in compliance with the terms and provisions of all its financing agreements.
Total cash paid for interest in the years ended December 31, 2005, 2004 and 2003 was $26,190,000, $14,620,000 and $12,632,000, respectively.
| 9. | | Employee Retirement Plans |
The Company has an unfunded supplemental pension plan which provides defined pension benefits to certain salaried employees upon retirement. Benefits under the plan are based on the salaries of individual plan participants in the year they were admitted into the plan. The Company is accruing for these benefit payments based upon an independent actuarial calculation. The following table presents the changes in the plan’s projected benefit obligation, fair value of plan assets and funded status for the years ended December 31:
| (in thousands) | 2005 | 2004 | 2003 |
|---|
|
| Change in projected benefit obligation: | | | | | | | |
| Projected benefit obligation at beginning of year | | $ 2,154 | | $ 1,791 | | $ 1,652 | |
| Service cost | | 176 | | 171 | | 156 | |
| Interest cost | | 123 | | 107 | | 107 | |
| Actuarial (gain) loss | | (155 | ) | 110 | | (106 | ) |
| Benefits paid | | (45 | ) | (25 | ) | (18 | ) |
|
| Projected benefit obligation at end of year | | 2,253 | | 2,154 | | 1,791 | |
|
| Fair value of plan assets | | -- | | -- | | -- | |
|
| Funded status: | | (2,253 | ) | (2,154 | ) | (1,791 | ) |
| Unrecognized loss | | 51 | | 206 | | 96 | |
|
| Net amount recognized | | $ 2,202 | | $(1,948 | ) | $(1,695 | ) |
|
| Amounts recognized in the consolidated financial | |
| statements consist of: | |
| Accrued pension liability | | $(2,253 | ) | $(2,154 | ) | $(1,791 | ) |
| Accumulated other comprehensive loss-additional minimum | |
| pension liability (pre-tax) | | 51 | | 206 | | 96 | |
|
| Net amount recognized | | $(2,202 | ) | $(1,948 | ) | $(1,695 | ) |
|
The plan’s accumulated benefit obligation was $2,253,000, $2,154,000 and $1,791,000 at December 31, 2005, 2004 and 2003, respectively.
The measurement date used to determine pension benefit measures is December 31.
58
Components of net periodic pension cost for the years ended December 31 are as follows:
| (in thousands) | 2005 | 2004 | 2003 |
|---|
|
| Service cost | | $176 | | $171 | | $156 | |
| Interest cost | | 123 | | 107 | | 107 | |
| Loss amortization | | -- | | -- | | 4 | |
|
| Net periodic pension cost | | $299 | | $278 | | $267 | |
|
| Weighted average assumptions: | |
| Discount rate | | 5.50 | % | 5.75 | % | 6.00 | % |
Employer contributions to the plan for 2006 are expected to be $44,500.
Expected benefit payments from the plan are as follows (in thousands):
| Year Ended December 31, | |
|---|
|
| 2006 | | $ 45 | |
| 2007 | | $ 44 | |
| 2008 | | $ 53 | |
| 2009 | | $ 128 | |
| 2010 | | $ 196 | |
| Years 2011-2015 | | $1,604 | |
Certain subsidiaries participate in the Company’s 401(k) Plan. In addition, certain subsidiaries have multi-employer non-contributory retirement plans providing for defined contributions to union retirement funds.
Total expense for all retirement plans was $2,983,000, $3,044,000 and $2,676,000 for the years ended December 31, 2005, 2004 and 2003, respectively.
| 10. | | Other Postretirement Benefits |
Certain subsidiaries of the Company provide health and life insurance to substantially all of their employees and to a number of retirees and their spouses.
The following table presents the changes in the accumulated postretirement benefit obligation related to the Company’s unfunded postretirement healthcare benefits at December 31:
| (in thousands) | 2005 | 2004 | 2003 |
|---|
|
| Benefit obligation at beginning of year | | $ 4,046 | | $ 3,404 | | $ 2,974 | |
| Service cost | | 104 | | 92 | | 99 | |
| Interest cost | | 223 | | 214 | | 191 | |
| Amendments | | -- | | (57 | ) | -- | |
| Actuarial loss | | 67 | | 465 | | 227 | |
| Benefits paid | | (163 | ) | (72 | ) | (87 | ) |
|
| Benefit obligation at end of year | | 4,277 | | 4,046 | | 3,404 | |
|
| Fair value of plan assets | | -- | | -- | | -- | |
|
| Under funded status | | (4,277 | ) | (4,046 | ) | (3,404 | ) |
| Unrecognized prior service costs | | (121 | ) | (142 | ) | (106 | ) |
| Unrecognized loss | | 1,677 | | 1,721 | | 1,362 | |
|
| Accumulated postretirement benefit obligation | | $(2,721 | ) | $(2,467 | ) | $(2,148 | ) |
|
59
Components of net periodic postretirement benefit cost charged to expense for the years ended December 31 are as follows:
| (in thousands) | 2005 | 2004 | 2003 |
|---|
|
| Service cost | | $ 104 | | $ 92 | | $ 99 | |
| Interest cost | | 223 | | 214 | | 191 | |
| Amortization of unrecognized prior service cost | | (21 | ) | (21 | ) | (14 | ) |
| Loss amortization | | 110 | | 107 | | 90 | |
|
| Net periodic post retirement benefit cost | | $ 416 | | $ 392 | | $ 366 | |
|
| Weighted average assumptions: | |
| Discount rate | | 5.50 | % | 5.75 | % | 6.00 | % |
For measurement purposes, a 9.5%, 7.5% and 11% annual rate of increase in the per capita cost of medical costs before age 65, medical costs after age 65 and drug costs, respectively, were assumed for 2006, gradually decreasing to 5.0% in 2012, 2011, and 2012, respectively. The effect of a 1% increase or decrease in the annual medical inflation rate would increase or decrease the accumulated postretirement benefit obligation at December 31, 2005, by approximately $702,000 and $606,000, respectively and increase or decrease the annual service and interest costs by approximately $59,000 and $50,000, respectively.
The measurement date used to determine postretirement benefit obligation measures is December 31.
The Company expects to make contributions of $133,000 to the plan in 2006.
Expected benefit payments from the plan are as follows (in thousands):
| |
|---|
| Year ended December 31, | | | |
|
| 2006 | | $ 133 | |
| 2007 | | $ 142 | |
| 2008 | | $ 159 | |
| 2009 | | $ 177 | |
| 2010 | | $ 197 | |
| Years 2011 – 2015 | | $1,321 | |
The Company will continue to provide a prescription drug benefit that is at least actuarially equivalent to Medicare Part D and believes that it will receive a federal drug subsidy. In accordance with FASB Staff Position No. 106-2 “Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the Act)” the recognition of the Act reduced actuarial losses and measurement date APBO by $652,000 and 2005 net periodic post retirement benefit cost by $107,000.
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The provision for income taxes for the years ending December 31 consisted of the following:
| (in thousands) | 2005 | 2004 | 2003 |
|---|
|
| Income tax expense from continuing operations | | | | | | | |
| Current: | |
| U.S. federal | | $ 25,321 | | $22,073 | | $9,892 | |
| State and foreign | | 4,497 | | 3,441 | | 1,715 | |
|
| Total current | | 29,818 | | 25,514 | | 11,607 | |
|
| Deferred: | |
| U.S. federal | | (1,030 | ) | 5,202 | | 5,296 | |
| State and foreign | | (943 | ) | 1,052 | | 659 | |
|
| Total deferred | | (1,973 | ) | 6,254 | | 5,955 | |
|
| Subtotal | | 27,845 | | 31,768 | | 17,562 | |
| Income tax (benefit) expense from discontinued operations: | |
| U.S. federal | | (1,002 | ) | 640 | | 43 | |
| State | | 230 | | 59 | | (8 | ) |
|
| Subtotal | | (772 | ) | 699 | | 35 | |
|
| Provision for income taxes | | $ 27,073 | | $32,467 | | $ 17,597 | |
|
The provision for income taxes differs from the federal statutory rate of 35% due to the following:
| (in thousands) | 2005 | 2004 | 2003 |
|---|
|
| Statutory rate | | $24,691 | | $29,137 | | $15,593 | |
| State income taxes, less federal effect | | 2,687 | | 2,865 | | 1,538 | |
| Other | | (305 | ) | 465 | | 466 | |
|
| | | $27,073 | | $32,467 | | $17,597 | |
|
Deferred tax liabilities (assets) at December 31, consist of the following:
| (in thousands) | 2005 | 2004 |
|---|
|
| Depreciation | | $ 60,741 | | $52,669 | |
| Goodwill | | 24,243 | | 18,284 | |
| Intangible assets | | 12,200 | | -- | |
| Other | | 6,492 | | 1,381 | |
|
| Gross deferred tax liabilities | | 103,676 | | 72,334 | |
|
| State taxes | | 3,264 | | 2,491 | |
| Other | | 15,180 | | 7,916 | |
|
| Gross deferred tax assets | | 18,804 | | 10,407 | |
|
| Net deferred tax liabilities | | $ 84,872 | | $61,927 | |
|
Net current deferred tax assets of $8,180,000 and $4,558,000 are included in other current assets in the consolidated balance sheet at December 31, 2005 and 2004, respectively.
Cash paid for income taxes, net of tax refunds, in the years ended December 31, 2005, 2004 and 2003 was $31,941,000, $17,584,000 and $12,823,000, respectively.
Provision has not been made for U.S. taxes on $1,775,000 of undistributed earnings of foreign subsidiaries. Those earnings have been and will continue to be reinvested. Determination of the amount of unrecognized deferred US income tax liability is not practicable due to the complexities associated with its hypothetical calculation.
61
The Company has a subsidiary in China that will be eligible for a tax holiday for five years beginning with the first year the taxable income exceeds the net operating loss carryforwards. The tax benefit varies during the five-year holiday once it begins.
At December 31, 2005, the Company has net operating loss carryforwards of $2,718,000, the majority of which expire at various dates from 2010 through 2015.
In December 2003, the Company completed an offering of 4,500,000 shares of common stock at a price of $16.50 per share. Net proceeds to the Company aggregated approximately $70,000,000. In connection with this common stock offering, the Company granted the underwriters an option to purchase additional shares of common stock to cover over-allotments. In January 2004, the underwriters exercised this option and purchased an additional 321,938 shares of the Company’s common stock at a price of $16.50 per share. Net proceeds to the Company associated with the purchase of these additional shares aggregated approximately $5,000,000, and was used to reduce outstanding debt.
On October 5, 2004, the Company’s Board of Directors authorized a 3 for 2 stock split in the form of a stock dividend that was distributed on October 29, 2004 to shareholders of record on October 15, 2004. The remittance of $1,000 in lieu of fractional shares has been reflected as a cash dividend and charged to retained earnings during fiscal 2004. All share and per share data in these consolidated financial statements and footnotes have been retroactively restated as if the stock split had occurred as of the earliest period presented.
Basic income per share is based on the weighted average number of common shares outstanding. Diluted income per share is based on the weighted average number of common shares 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 described in Notes 15 and 16. 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 proceeds of the options assumed to be exercised.
The following table sets forth the computation of basic and diluted earnings per share as of December 31:
| 2005 | 2004 | 2003 |
|---|
|
| Numerator: | | | | | | | |
| Income from continuing operations | | $ 44,681,000 | | $49,711,000 | | $26,903,000 | |
| (Loss) income from discontinued operations | | (1,209,000 | ) | 1,071,000 | | 50,000 | |
|
| Income available to common stockholders | | $ 43,472,000 | | $50,782,000 | | $26,953,000 | |
|
| Denominator: | |
| Denominator for basic income per share: | |
| Weighted average shares outstanding | | 29,608,418 | | 29,362,122 | | 24,142,595 | |
|
| Denominator for diluted income per share: | |
| Weighted average shares outstanding | | 29,608,418 | | 29,362,122 | | 24,142,595 | |
| Common stock options and restricted stock | | 201,724 | | 233,472 | | 244,638 | |
|
| Weighted average shares and conversions | | 29,810,142 | | 29,595,594 | | 24,387,233 | |
|
On May 19, 2005, the Gibraltar Industries, Inc. 2005 Equity Incentive Plan (the “2005 Equity Incentive Plan”) was approved by the Company’s stockholders. The 2005 Equity Incentive Plan is an incentive compensation plan that allows the Company to grant equity-based incentive compensation awards to eligible participants to provide them an additional incentive to promote the business of the Company, to increase their proprietary interest in the
62
success of the Company and to encourage them to remain in the Company’s employ. Awards under the plan may be in the form of options, restricted shares, restricted units, performance shares, performance units and rights. The 2005 Equity Incentive Plan provides for the issuance of up to 2,250,000 shares of common stock. Of the total number of shares of common stock issuable under the plan, the aggregate number of shares that may be issued in connection with grants of restricted stock or restricted units cannot exceed 1,350,000 shares, and the aggregate number of shares which may be issued in connection with grants of incentive stock options and rights cannot exceed 900,000 shares. Vesting terms and award life are governed by the award document. During 2005, the Company issued 20,000 restricted shares and 283,036 restricted stock units, and granted 75,508 non-qualified stock options. At December 31, 2005, 1,871,456 shares were available for issuance under this plan. Of this amount, 1,066,964 are available for restricted units and 900,000 are available for incentive stock options. The Company recognized compensation expense in connection with the lapse of restrictions or restricted shares and restricted units issued under the 2005 Equity Incentive Plan the amount of $1,305,000 in 2005.
In 1993, the Company adopted an incentive stock option plan, whereby the Company may grant incentive stock options to officers and other key employees. Under this plan, 2,437,500 shares of common stock were reserved for the granting of stock options at an exercise price not less than the fair market value of the shares at the date of grant. Options granted under this plan vest ratably over a four-year period from the grant date and expire ten years after the date of grant. In September 2003, this plan expired. The expiration of this plan did not modify, amend or otherwise affect the terms of any outstanding options on the date of the plan’s expiration.
In 2003, the Company’s Board of Directors approved the adoption of a new incentive stock option plan, whereby the Company may grant incentive stock options to officers and other key employees. This plan was approved by the shareholders in 2004. Under this plan, 2,250,000 shares of common stock were reserved for the granting of stock options. These options are granted at an exercise price not less than the fair market value of the shares at the date of grant. Options granted under this plan vest ratably over a four-year period from the grant date and expire ten years after the date of grant. As of December 31, 2005, 2,250,000 shares remain available for issuance under this plan, however under the terms of the 2005 Equity Incentive Plan the Company is no longer permitted to issue grants under this plan, and the Company is in the process of terminating this plan.
The Company has a non-qualified stock option plan, whereby the Company may grant non-qualified stock options to officers, employees, non-employee directors and advisers. Under the non-qualified stock option plan, 600,000 shares of common stock were reserved for the granting of options. Options are granted under this plan at an exercise price not less than the fair market value of the shares at the date of grant. These options vest ratably over a four-year period from the grant date and expire ten years after the date of grant. At December 31, 2005, 273,750 shares remain available for issuance under the non-qualified stock option plan.
The following table summarizes the ranges of outstanding and exercisable options at December 31, 2005:
Range of
Exercise prices | Options outstanding | Weighted average
remaining
contractual life | Weighted average exercise price | Options
exercisable | Weighted average exercise price |
|---|
|
| $9.38 – $11.17 | | 170,927 | | 3.3 years | | $10.00 | | 170,927 | | $10.00 | |
| $14.50 – $15.00 | | 141,975 | | 1.9 years | | $14.76 | | 141,975 | | $14.76 | |
| $20.52 – $21.33 | | 70,524 | | 9.7 years | | $20.53 | | -- | | -- | |
|
| | 383,426 | | 4.0 years | | $13.70 | | 312,902 | | $12.16 | |
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The following table summarizes information about stock option transactions:
| Options
outstanding | Weighted average exercise price | Options
exercisable | Weighted average exercise price |
|---|
|
| Balance at January 1, 2003 | | 1,360,812 | | $10 | .62 | 1,190,412 | | $10 | .80 |
| Granted | | -- | | | -- |
| Exercised | | (415,605 | ) | 8 | .57 |
| Forfeited | | (87,473 | ) | 13 | .61 |
|
| Balance at December 31, 2003 | | 857,734 | | $11 | .31 | 784,254 | | $11 | .49 |
| Granted | | -- | | | -- |
| Exercised | | (432,124 | ) | 10 | .52 |
| Forfeited | | (28,595 | ) | 12 | .91 |
|
| Balance at December 31, 2004 | | 397,015 | | $12 | .06 | 397,015 | | $12 | .06 |
| Granted | | 75,508 | | 20 | .54 |
| Exercised | | (69,206 | ) | 11 | .81 |
| Forfeited | | (19,891 | ) | 13 | .43 |
|
| Balance at December 31, 2005 | | 383,426 | | $13 | .70 | 312,902 | | $12 | .16 |
|
At December 31, 2005, all exercisable options had an exercise price below the $22.94 per share market price of the Company’s common stock. At December 31, 2004 all exercisable options had an exercise price below the $23.62 per share market price of the Company’s common stock. At December 31, 2003 all exercisable options had an exercise price below the $16.78 per share market price of the Company’s common stock.
Tax benefits of $281,000, $1,249,000 and $949,000 realized in the years ended December 31, 2005, 2004 and 2003, respectively, associated with the exercise of certain stock options have been credited to additional paid-in-capital.
| 16. | | Restricted Stock Plan |
The Company has a restricted stock plan and has reserved for issuance 375,000 common shares for the grant of restricted stock awards to employees and non-employee directors at a purchase price of $.01 per share. Shares of restricted stock issued under this plan vest on a straight-line basis over a period of 5 to 10 years. The Company recognized compensation expense associated with the lapse of restrictions on restricted shares issued under this plan in the amounts of $199,000, $153,000 and $212,000 during 2005, 2004 and 2003, respectively. No shares were issued under this Plan in 2005, 2004 or 2003. At December 31, 2005, 202,500 shares remain available for issuance under the restricted stock plan, however, under the terms of the 2005 Equity Incentive Plan the Company is no longer permitted to issue shares under this plan, and the Company is in the process of terminating this plan.
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) | | Building products, which primarily includes the processing of sheet steel to produce a wide variety of building and construction products. |
| | (ii) | | Processed 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. |
64
| | (iii) | | Thermal processing, which includes a wide range of metallurgical heat-treating processes in which customer-owned metal parts are exposed to precise temperatures, atmospheres and quenchants to improve their mechanical properties, durability and wear resistance. |
The following table illustrates certain measurements used by management to assess the performance of the segments described above as of and for the years ended December 31, 2004, 2003 and 2002:
| (in thousands) | 2005 | 2004 | 2003 |
|---|
|
| Net sales | | | | | | | |
| Building products | | $ 615,386 | | $ 477,316 | | $ 371,957 | |
| Processed metal products | | 454,822 | | 395,287 | | 268,512 | |
| Thermal processing | | 108,028 | | 103,652 | | 89,337 | |
|
| | $ 1,178,236 | | $ 976,255 | | $ 729,806 | |
|
| Income from operations | |
| Building products | | $ 81,324 | | $ 59,068 | | $ 38,901 | |
| Processed metal products | | 30,740 | | 43,573 | | 25,214 | |
| Thermal processing | | 13,398 | | 13,731 | | 9,387 | |
| Corporate | | (27,760 | ) | (26,824 | ) | (16,626 | ) |
|
| | $ 97,702 | | $ 89,548 | | $ 56,876 | |
|
| Depreciation and amortization | |
| Building products | | $ 11,071 | | $ 9,364 | | $ 8,144 | |
| Processed metal products | | 7,318 | | 6,354 | | 5,590 | |
| Thermal processing | | 7,973 | | 7,139 | | 6,665 | |
| Corporate | | 2,245 | | 1,341 | | 1,384 | |
|
| | $ 28,607 | | $ 24,198 | | $ 21,783 | |
|
| Total assets | |
| Building products | | $ 730,846 | | $ 444,677 | | $ 371,812 | |
| Processed metal products | | 239,034 | | 267,297 | | 161,334 | |
| Thermal processing | | 147,158 | | 149,454 | | 142,575 | |
| Corporate | | 87,974 | | 96,273 | | 102,022 | |
|
| | $ 1,205,012 | | $ 957,701 | | $ 777,743 | |
|
| Capital expenditures | |
| Building products | | $ 10,071 | | $ 10,363 | | $ 6,472 | |
| Processed metal products | | 4,895 | | 5,350 | | 5,909 | |
| Thermal processing | | 4,571 | | 3,947 | | 6,030 | |
| Corporate | | 2,585 | | 4,670 | | 3,639 | |
|
| | $ 22,122 | | $ 24,330 | | $ 22,050 | |
|
Accrued expenses at December 31 consist of the following:
| 2005 | 2004 |
|---|
|
| Compensation | | $19,189 | | $15,545 | |
| Insurance | | 12,179 | | 8,812 | |
| Customer rebates | | 9,959 | | 7,903 | |
| Other | | 21,680 | | 19,625 | |
|
| | | $63,007 | | $51,885 | |
|
| 19. | | Commitments and Contingencies |
The Company leases certain facilities and equipment under operating leases. Rent expense under operating leases for the years ended December 31, 2005, 2004 and 2003 aggregated $10,914,000, $9,087,000 and $6,358,000, respectively. Future minimum lease payments under these noncancelable operating leases at December 31, 2005 are as follows: 2006—$13,489,000; 2007—$11,405,000; 2008—$9,257,000; 2009—$7,343,000; 2010 $5,501,000; and $12,367,000 thereafter.
65
The Company entered into certain operating lease agreements, related to acquired operating locations and facilities, with the former owners of Construction Metals. These operating leases are considered to be related party in nature. Rental expense associated with these related party operating leases aggregated approximately $1,418,000 and $1,304,000 in 2005 and 2004, respectively.
The Company is a party to certain claims and legal actions generally incidental to its business. Management does not believe that the outcome of these actions, which are not clearly determinable at the present time, would significantly affect the Company’s financial condition or results of operations.
Two members of our Board of Directors are partners in law firms that provide legal services to the Company. During 2005, we incurred $2,114,000 for legal services from these firms. Of the amount incurred, $1,024,000 was expensed, $1,090,000 was capitalized as acquisition costs and deferred debt issuance costs.
The Company offers various product warranties to its customers concerning the quality of its products and services. Based upon the short duration of warranty periods and favorable historical warranty experience, the Company determined that a related warranty accrual at December 31, 2005 and 2004 is not required.
| 20. | | Accumulated Other Comprehensive Income (loss) |
The cumulative balance of each component of accumulated other comprehensive income (loss) is as follows (in thousands):
| Foreign
currency
translation
adjustment | Minimum
pension
liability
adjustment | Unrealized gain
(loss) on
interest rate
swaps | Accumulated
other
comprehensive
income |
|---|
|
| Balance at January 1, 2005 | | $1,935 | | $(125 | ) | $(142 | ) | $1,668 | |
| Current period change | | 500 | | 95 | | (396 | ) | 199 | |
|
| Balance at December 31, 2005 | | $2,435 | | $ (30 | ) | $(538 | ) | $1,867 | |
|
66
Gibraltar Industries Inc.
Quarterly unaudited financial data
(in thousands, except per share data)
| 2005 Quarter ended | March 31 | June 30 | Sept. 30 | Dec. 31(1) | Total |
|---|
|
| Net sales | | $273,581 | | $ 288,388 | | $ 282,139 | | $334,128 | | $ 1,178,236 | |
| Gross profit | | 50,132 | | 56,466 | | 54,006 | | 57,877 | | 218,481 | |
| Income from operations | | 20,896 | | 29,278 | | 25,077 | | 22,451 | | 97,702 | |
| Income from continuing operations | | 10,622 | | 15,915 | | 12,748 | | 5,396 | | 44,681 | |
| Income (loss) from discontinued operations | | 124 | | (444 | ) | (889 | ) | -- | | (1,209 | ) |
| Net Income | | 10,746 | | 15,471 | | 11,859 | | 5,396 | | 43,472 | |
| |
| Income per share from continuing operations: | |
| Basic | | $ .36 | | $ .54 | | $ .43 | | $ .18 | | $ 1.51 | |
| Diluted | | $ .36 | | $ .53 | | $ .43 | | $ .18 | | $ 1.50 | |
| Income (loss) per share from discontinued | |
| operations: | |
| Basic | | $ .00 | | $ (.01 | ) | $ (.03 | ) | $ .00 | | $ (.04 | ) |
| Diluted | | $ .00 | | $ (.01 | ) | $ (.03 | ) | $ .00 | | $ (.04 | ) |
| |
| 2004 Quarter ended | March 31 | June 30 | Sept. 30 | Dec. 31 | Total |
|---|
|
| Net sales | | $204,607 | | $ 249,092 | | $ 267,346 | | $255,210 | | $ 976,255 | |
| Gross profit | | 41,413 | | 56,790 | | 59,406 | | 43,676 | | 201,285 | |
| Income from operations | | 17,814 | | 27,071 | | 27,801 | | 16,862 | | 89,548 | |
| Income from continuing operations | | 9,259 | | 15,294 | | 15,773 | | 9,385 | | 49,711 | |
| Income from discontinued operations | | 86 | | 150 | | 447 | | 388 | | 1,071 | |
| Net Income | | 9,345 | | 15,444 | | 16,220 | | 9,773 | | 50,782 | |
| |
| Income per share from continuing operations: | |
| Basic | | $ .32 | | $ .52 | | $ .53 | | $ .32 | | $ 1.69 | |
| Diluted | | $ .32 | | $ .51 | | $ .53 | | $ .32 | | $ 1.68 | |
| Income per share from discontinued operations: | |
| Basic | | $ .00 | | $ .01 | | $ .02 | | $ .01 | | $ .04 | |
| Diluted | | $ .00 | | $ .01 | | $ .02 | | $ .01 | | $ .04 | |
| (1) | | Net sales increased $78.9 million to $334.1 million in the fourth quarter of 2005, from $255.2 million in the fourth quarter of 2004. The increase is primarily the result of the acquisition of AMICO which resulted in an additional $77.8 million in net sales. Income from continuing operations declined $4.0 million from $9.4 million in the fourth quarter of 2004 to $5.4 million in the same period in 2005. The decline was primarily the result of $6.8 million in pre-payment penalties incurred in connection with the refinancing of our debt during the fourth quarter of 2005. |
67
| Item 9. | | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
The Company filed an 8-K/A dated June 6, 2005 reporting a change in its certifying accountant to Ernst & Young LLP from PricewaterhouseCoopers LLP.
| Item 9A. | | Controls and Procedures |
Evaluation of Disclosure Control 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 Chief Operating Officer, 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 and Chief Operating Officer and 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.
Management’s Annual Report on Internal Control Over Financial Reporting
Gibraltar’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of management, including Gibraltar’s chief executive officer, chief operating officer and chief financial officer, Gibraltar conducted an evaluation of the effectiveness of internal control over financial reporting based on the framework inInternal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on Gibraltar’s evaluation, management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2005.
The Company completed two acquisitions during 2005 that were excluded from the Company’s Management’s Annual Report on Internal Controls Over Financial Reporting as of December 31, 2005. On September 15, 2005, the Company acquired Curie International (Suzhou) Co., Ltd. And on October 3, 2005, the Company acquired Alabama Metal Industries Corporation, which are included in the Company’s consolidated financial statements and collectively constituted $306.2 million and $255.4 million at total and net assets, respectively, as of December 31, 2005 and $79.7 million and $7.1 million of revenue and net income, respectively, for the year then ended.
Management’s assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2005 has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which is included in Item 9A herein.
Gibraltar Industries, Inc.
Buffalo, New York
March 10, 2006
Changes in Internal Controls Over Financial Reporting
There have been no changes in the Company’s internal control over financial reporting (as defined by Rule 13a-15(f)) that occurred during the fourth quarter of 2005 that have materially affected, or are reasonably likely to materially affect the Company’s internal control over financial reporting.
68
Report of Ernst & Young LLP, Independent Registered Public Accounting Firm
The Board of Directors and Shareholders of Gibraltar Industries, Inc.
We have audited management’s assessment, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting, that Gibraltar Industries, Inc. maintained effective internal control over financial reporting as of December 31, 2005, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). Gibraltar Industries, Inc.’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the company’s internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
As indicated in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Alabama Metal Industries Corporation acquired on October 3, 2005 and Curie International (Suzhou) Co., Ltd. acquired on September 15, 2005, which are included in the 2005 consolidated financial statements of Gibraltar Industries, Inc. and in the aggregate constituted (in 000’s) $306,232 and $255,408 of total and net assets, respectively, as of December 31, 2005 and $79,744 and $7,114 of net sales and net income, respectively, for the year then ended. Our audit of internal control over financial reporting of Gibraltar Industries, Inc. also did not include an evaluation of the internal control over financial reporting of Alabama Metal Industries Corporation acquired on October 3, 2005 and Curie International (Suzhou) Co., Ltd. acquired on September 15, 2005.
69
In our opinion, management’s assessment that Gibraltar Industries, Inc. maintained effective internal control over financial reporting as of December 31, 2005 is fairly stated, in all material respects, based on the COSO criteria. Also, in our opinion, Gibraltar Industries, Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2005, based on the COSO criteria.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of Gibraltar Industries, Inc. as of December 31, 2005, and the related consolidated statements of income, shareholders’ equity and comprehensive income, and cash flows for the year then ended of Gibraltar Industries, Inc. and our report dated March 10, 2006 expressed an unqualified opinion thereon.
Buffalo, New York
March 10, 2006
70
PART III
| Item 10. | | Directors and Executive Officers of the Registrant |
Information regarding directors and executive officers of the Company, as well as the required disclosures with respect to the Company’s audit committee financial expert, is incorporated herein by reference to the information included in the Company’s definitive proxy statement which will be filed with the Commission within 120 days after the end of the Company’s 2005 fiscal year.
The Company has adopted a Code of Ethics that applies to the Chief Executive Officer and Chairman of the Board, President, Chief Financial Officer and other senior financial officers and executives of the Company. A complete text of this Code of Ethics has been filed as Exhibit 14 to our Annual Report on Form 10-K filed on March 11, 2005.
| Item 11. | | Executive Compensation |
Information regarding executive compensation is incorporated herein by reference to the information included in the Company’s definitive proxy statement which will be filed with the Commission within 120 days after the end of the Company’s 2005 fiscal year.
| Item 12. | | Security Ownership of Certain Beneficial Owners and Management |
Information regarding security ownership of certain beneficial owners and management is incorporated herein by reference to the information included in the Company’s definitive proxy statement which will be filed with the Commission within 120 days after the end of the Company’s 2005 fiscal year.
| Item 13. | | Certain Relationships and Related Transactions |
Information regarding certain relationships and related transactions is incorporated herein by reference to the information included in the Company’s definitive proxy statement which will be filed with the Commission within 120 days after the end of the Company’s 2005 fiscal year.
| Item 14. | | Principal Accountant’s Fees and Services |
Information regarding principal accountant’s fees and services is incorporated herein by reference to the information included in the Company’s definitive proxy statement which will be filed with the Commission within 120 days after the end of the Company’s 2005 fiscal year.
71
PART IV
| Item 15. | Exhibits and Financial Statement Schedules | Page
Number |
| (a) | (1) | Financial Statements: | |
| | Report of Ernst & Young LLP, Independent Registered Public Accounting Firm | 37 |
| | Report of Independent Registered Public Accounting Firm | 38 |
| | Consolidated Balance Sheets as of December 31, 2005 and 2004 | 39 |
| | Consolidated Statements of Income for the Years Ended December 31, 2005, 2004 and 2003 | 40 |
| | Consolidated Statements of Cash Flows for the Years Ended December 31, 2005, 2004 and 2003 | 41 |
| | Consolidated Statements of Shareholders’ Equity and Comprehensive Income for the Years Ended December 31, 2005, 2004 and 2003 | 42 |
| | Notes to Consolidated Financial Statements | 43 |
| | Quarterly Unaudited Financial Data | 67 |
| | Financial Statement Schedules | |
| | Schedules for which provisions made in the applicable accounting regulations of the Securities and Exchange commission are not required under the related instructions or are inapplicable and therefore have been omitted. | |
| | The index of exhibits to this Annual Report on Form 10-K included herein are set forth on the attached Exhibit Index beginning on page 75. | |
72
73
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| |
|---|
| | GIBRALTAR INDUSTRIES, INC. | |
| | By/s/ Brian J. Lipke | |
| | Brian J. Lipke | |
| | Chief Executive Officer | |
| | and Chairman of the Board | |
In accordance with the Securities and Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
| | |
|---|
| /s/ Brian J. Lipke | | Chief Executive Officer
and Chairman of the Board
(principal executive officer) | | March 16, 2006 | |
|
| Brian J. Lipke |
| |
| /s/ Henning Kornbrekke | | President and
Chief Operating Officer | | March 16, 2006 | |
|
| Henning Kornbrekke |
| |
| /s/ David W. Kay | | Executive Vice President,
Chief Financial Officer and Treasurer
(principal financial and accounting officer) | | March 16, 2006 | |
|
| David W. Kay |
| |
| /s/ Gerald S. Lippes | | Director | | March 16, 2006 | |
|
| Gerald S. Lippes | |
| |
| /s/ Arthur A. Russ, Jr. | | Director | | March 16, 2006 | |
|
| Arthur A. Russ, Jr. | |
| |
| /s/ David N. Campbell | | Director | | March 16, 2006 | |
|
| David N. Campbell | |
| |
| /s/ William P. Montague | | Director | | March 16, 2006 | |
|
| William P. Montague | |
| |
| /s/ William J. Colombo | | Director | | March 16, 2006 | |
|
| William J. Colombo | |
| |
| /s/ Robert E. Sadler, Jr. | | Director | | March 16, 2006 | |
|
| Robert E. Sadler, Jr. | |
74
Exhibit Index
Exhibit
Number | Exhibit | Sequentially
Numbered Page |
| 3.1 | | Certificate of Incorporation of registrant (incorporated by reference to the same exhibit number to the Company’s Registration Statement on Form S-1 (Registration No. 33-69304)) as amended by the amendment to the Certificate of Incorporation filed on Form 8-K on October 29, 2004. | |
| 3.2 | | Amended and Restated By-Laws of the Registrant effective August 11, 1998 (incorporated by reference to Exhibit 3(ii) to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1998) | | |
| 4.1 | | Specimen Common Share Certificate (incorporated by reference number to the same exhibit number to the Company’s Registration Statement on Form S-1 (Registration No. 33-69304)) | |
| 4.2 | | Indenture dated as of December 8, 2005, among the Company, the Guarantors (as defined therein) and the Trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on December 13, 2005). | |
| 10.1 | | Partnership Agreement of Samuel Pickling Management Company dated June 1, 1988 between Cleveland Pickling, Inc. and Samuel Manu-Tech, Inc. (incorporated by reference to Exhibit 10.7 to the Company’s Registration Statement on Form S-1 (Registration No. 33-69304)) | |
| 10.2 | | Partnership Agreement dated May 1988 among Samuel Pickling Management Company, Universal Steel Co. and Ruscon Steel Corp., creating Samuel Steel Pickling Company, a general partnership (incorporated by reference to Exhibit 10.8 to the Company’s Registration Statement on Form S-1 (Registration No. 33-69304)) | |
| 10.3 | | Lease dated September 1, 1990 between Erie County Industrial Development Agency and Integrated Technologies International, Ltd. (incorporated by reference to Exhibit 10.13 to the Company’s Registration Statement on Form S-1 (Registration No. 33-69304)) | |
| 10.4 | | Lease dated June 4, 1993 between Buffalo Crushed Stone, Inc. and Gibraltar Steel Corporation (incorporated by reference to Exhibit 10.14 to the Company’s Registration Statement on Form S-1 (Registration No. 33-69304)) | |
75
| 10.5* | | Employment Agreement dated as of July 9, 1998 between the Registrant and Brian J. Lipke (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1998) | |
| 10.6 | | Gibraltar Steel Corporation Executive Incentive Bonus Plan (incorporated by reference to Exhibit 10.16 to the Company’s Registration Statement on Form S-1 (Registration No. 33-69304)) | |
| 10.7 | | Agreement dated December 22, 2000 for Adoption by Gibraltar Steel Corporation of New York of the Dreyfus Nonstandardized Prototype Profit Sharing Plan and Trust (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2001) | |
| 10.8* | | Gibraltar Industries, Inc. Incentive Stock Option Plan, Fifth Amendment and Restatement (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2000) | |
| 10.9* | | Gibraltar Industries, Inc. Restricted Stock Plan, First Amendment and Restatement (incorporated by reference to Exhibit 10.13 of the Company’s Annual Report on Form 10-K for the year ended December 31, 1997) | |
| 10.10* | | Gibraltar Industries, Inc. Non-Qualified Stock Option Plan, First Amendment and Restatement (incorporated by reference to Exhibit 10.17 to the Company’s Registration Statement on Form S-1 (Registration No. 333-03979)) | |
| 10.11* | | Gibraltar Industries, Inc. Profit Sharing Plan dated August 1, 1984, as Amended April 14, 1986 and May 1, 1987 (incorporated by reference to Exhibit 10.21 to the Company’s Registration Statement on Form S-1 (Registration No. 33-69304)) | |
| 10.12* | | Form of Stay Bonus Agreement dated October 1, 2000 between registrant and certain named executives (incorporated by reference to Exhibit 10.16 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2001) | |
| 10.13 | | Fourth Amended and Restated Credit Agreement among Gibraltar Steel Corporation, Gibraltar Steel Corporation of New York, JPMorgan Chase Bank, as Administrative Agent, and various financial institutions that are signatories thereto (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2002) | |
76
| 10.14 | | First Amendment, dated May 28, 1999, to the Partnership Agreement dated May 1988 among Samuel Pickling Management Company, Universal Steel Co., and Ruscon Steel Corp., creating Samuel Steel Pickling Company, a general partnership (incorporated by reference to Exhibit 10.20 to the Company’s Annual Report on Form 10-K for the year ended December 31, 1999) | |
| 10.15* | | Gibraltar 401(k) Plan Amendment and Restatement Effective October 1, 2004 as amended by the First, Second, and Third Amendments to the Amendment and Restatement Effective October 1, 2004, filed herewith | |
| 10.16* | | First Amendment, dated January 20, 1995, to Gibraltar Steel Corporation 401(k) Plan (Incorporated by reference to Exhibit 10.28 to the Company’s Annual report on Form 10-K for the year ended December 31, 1994) | |
| 10.17* | | The 2003 Gibraltar Incentive Stock Option Plan (Incorporated by reference to Exhibit 10.12 to the Company’s Registration Statement on Form S-3 (333-110313)) | |
| 10.18 | | Subordinated promissory note between Gibraltar Steel Corporation and CertainTeed Corporation (Incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2003) | |
| 10.19 | | 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 10.01 to the Company’s Current Report on Form 8-K filed April 7, 2005) | |
| 10.20* | | Change in Control Agreement between the Company and Brian J. Lipke (incorporated by reference to Exhibit 10.01 to the Company’s Current Report on Form 8-K filed April 13, 2005) | |
| 10.21* | | Change in Control Agreement between the Company and Henning Kornbrekke (incorporated by reference to Exhibit 10.02 to the Company’s Current Report on Form 8-K filed April 13, 2005) | |
| 10.22* | | Change in Control Agreement between the Company and David W. Kay (incorporated by reference to Exhibit 10.03 to the Company’s Current Report on Form 8-K filed April 13, 2005) | |
| 10.23* | | Gibraltar Industries, Inc. 2005 Equity Incentive Plan, (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed May 25, 2005) | |
77
| 10.24* | | Gibraltar Industries, Inc. 2005 Equity Incentive Plan Form of Award of Restricted Units (Long Term Incentive) (incorporated by reference to Exhibit 99.2 to the Company’s Current Report on Form 8-K filed May 25, 2005) | |
| 10.25* | | Gibraltar Industries, Inc. 2005 Equity Incentive Plan Form of Award of Non-Qualified Option (incorporated by reference to Exhibit 99.3 to the Company’s Current Report on Form 8-K filed May 25, 2005) | |
| 10.26* | | Gibraltar Industries, Inc. 2005 Equity Incentive Plan Form of Award (Retirement) (incorporated by reference to Exhibit 99.4 to the Company’s Current Report on Form 8-K filed May 25, 2005) | |
| 10.27 | | Agreement and Plan of Merger among Alabama Metal Industries Corporation, Gibraltar Industries, Inc., Expansion Co., Inc. and the security holders named on the schedules thereto dated as of September 9, 2005 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed September 15, 2005) | |
| 10.28 | | Amendment No. 1 to 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 September 9, 2005 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed September 15, 2005) | |
| 10.29 | | Term Loan Agreement among Gibraltar Industries, Inc., Gibraltar Steel Corporation of New York, KeyBank National Association and the lenders named therein, dated as of October 3, 2005 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed October 7, 2005) | |
| 10.30 | | Amended and Restated Credit Agreement, dated as of December 8, 2005, among the Company, Gibraltar Steel Corporation of New York, as co-borrower, the lenders parties thereto, KeyBank National Association, as administrative agent, JPMorgan Chase Bank, N.A., as syndication agent, Harris Trust and Savings Bank, as co-documentation agent, HSBC Bank USA, National Association, as co-documentation agent, and Manufacturers and Traders Trust Company, as co-documentation agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed December 13, 2005) | |
| 10.31 | | Registration Rights Agreement, dated as of December 8, 2005, among the Company, the Guarantors and J.P. Morgan Securities Inc., McDonald Investments Inc. and Harris Nesbitt Corp., as initial purchasers of the Notes (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed December 13, 2005) | |
78
| 21 | | Subsidiaries of the Registrant | |
| 23.1 | | Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm | |
| 23.2 | | Consent of Independent Registered Accounting Firm | |
| 31.1 | | Certification of Chief Executive Officer and Chairman of the Board pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 31.2 | | Certification of President and Chief Operating Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 31.3 | | Certification of Vice President and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 32.1 | | Certification of 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 | |
| 32.2 | | Certification of President and Chief Operating Officer pursuant to Title 18, United States Code, Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| 32.3 | | Certification of 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 | |
*Document is a management contract or compensatory plan or agreement
79
