Gibraltar Industries (ROCK) 8-K Gibraltar Reports Third-quarter Sales and Earnings

        For Immediate Release

               October 26, 2005

GIBRALTAR REPORTS THIRD-QUARTER SALES AND EARNINGS

Sales Up 5% to $282 Million; Earnings Per Share from Continuing Operations of $.43;

Inventories and Debt Reduced Further in Third Quarter

BUFFALO, NEW YORK (October 26, 2005) – Gibraltar Industries, Inc. (NASDAQ: ROCK) today reported its sales and earnings for the three and nine months ended September 30, 2005.

Sales in the third quarter of 2005 were $282 million, an increase of approximately five percent compared to $267 million in the third quarter of 2004. Sales for the first nine months of 2005 were $844 million, up by approximately 17 percent compared to $721 million in the first nine months of 2004.

Net income from continuing operations in the third quarter of 2005 was $12.7 million, compared to $15.8 million in the third quarter of 2004. During the first nine months of 2005, net income from continuing operations was $39.3 million, compared to $40.3 million in the first nine months of 2004.

Earnings per share from continuing operations in the third quarter of 2005 were $.43, compared to $.53 in the third quarter of 2004. During the first nine months of 2005, earnings per share from continuing operations were $1.32 compared to $1.37 in the first nine months of 2004.

“As the third quarter progressed, and our inventory costs and selling prices came into better alignment, our margins began to stabilize, as expected. We also continued the scheduled reduction of our inventories by another $35 million during the quarter, and had strong cash flows from operations which were applied to debt reduction,” said Brian J. Lipke, Gibraltar’s Chairman and Chief Executive Officer.

“We have continued to implement our strategy of growth and diversification, most notably the four acquisitions we completed in the last six weeks that further expand our product offering and channels of distribution, diversify our customer base, and extend our geographic reach. These acquisitions, together with our ongoing efforts to grow and improve the operating efficiency of our existing businesses, will continue to strengthen Gibraltar,” said Henning N. Kornbrekke, Gibraltar’s President and Chief Operating Officer.

Gibraltar acquired the Gutter Helmet® product line on September 16; a copper powder manufacturing facility in Suzhou, China, on September 20; and American Wilcon Plastics, a manufacturer of plastic-injection molding products, on October 4.  The Company also completed the acquisition of AMICO, a U.S. market leader in the manufacturing of metal bar grating, expanded metal, and metal lath, as well as a number of other products, on October 3.

The AMICO acquisition is consistent with the Company’s strategy of increasingly focusing on niche markets and high value-added products.  It also provides the right strategic platform to allow Gibraltar to further diversify and expand its customer base, product offerings, and channels of distribution, while creating a platform for future growth.  The AMICO acquisition, with a purchase price of $240 million, is the single-largest acquisition in Gibraltar’s history.  The funds required to make the acquisition and prepay approximately $115 million of senior secured private placement notes, as well as approximately $26 million of seller notes from a previous acquisition, were provided by $300 million of new borrowings under a temporary credit facility underwritten by a consortium of banks led by KeyBank and increased borrowings under the Company’s revolving cre dit facility.

Gibraltar anticipates replacing the temporary borrowings, as well as amounts borrowed under the revolving credit facility, with longer-term financing.  

Looking ahead, as the Company moves into the seasonally slowest period for its business, Gibraltar expects its fourth-quarter earnings per share from continuing operations, before any non-recurring charges, will be in the range of $.30 to $.35, compared to $.32 in the fourth quarter of 2004, barring a significant change in business conditions.

As a result of the sale of the Company’s Milcor subsidiary on January 27, 2005, the results of operations for Milcor have been reclassified as discontinued operations in the Company’s income statements for all periods.

Gibraltar Industries is a leading manufacturer, processor, and distributor of metals and other engineered materials for the building products, vehicular, and other industrial markets. The Company serves a large number of customers in a variety of industries in all 50 states, Canada, Mexico, Europe, Asia, and Central and South America. It has approximately 4,500 employees and operates 95 facilities in 29 states, Canada, Mexico, and China.

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Information contained in this release, other than historical information, should be considered forward-looking, and may be subject to a number of risk factors, including: general economic conditions; the impact of the availability and the effects of changing raw material prices on the Company’s results of operations; natural gas and electricity prices and usage; the ability to pass through cost increases to customers; changing demand for the Company’s products and services; risks associated with the integration of acquisitions; and changes in interest or tax rates.  

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Gibraltar will review its third-quarter results and discuss its outlook for the fourth quarter during its quarterly conference call, which will be held at 2 p.m. Eastern Time on October 27. Details of the call can be found on Gibraltar’s Web site, at www.gibraltar1.com.

CONTACT: Kenneth P. Houseknecht, Vice President of Communications and Investor Relations, at 716/826-6500, khouseknecht@gibraltar1.com.

Gibraltar’s news releases, along with comprehensive information about the Company, are available on the Internet, at www.gibraltar1.com.

GIBRALTAR INDUSTRIES, INC. Financial Highlights (unaudited) (in thousands, except per share data)
	Three Months Ended
		September 30, 2005		September 30, 2004
Net Sales	$	282,139	$	267,346
Net Income from Continuing Operations	$	12,748	$	15,773
Net Income Per Share from Continuing     Operations –Basic	$	.43	$	.53
Weighted Average Shares Outstanding-Basic		29,622		29,448
Net Income Per Share from Continuing    Operations - Diluted	$	.43	$	.53
Weighted Average Shares Outstanding-Diluted		29,831		29,692

		Nine Months Ended
			September 30, 2005				September 30, 2004
Net Sales		$	844,108			$	721,045
Net Income from Continuing Operations		$	39,285			$	40,326
Net Income Per Share from Continuing    Operations -Basic		$	1.33			$	1.38
Weighted Average Shares Outstanding-Basic			29,600				29,302
Net Income Per Share from Continuing    Operations -Diluted		$	1.32			$	1.37
Weighted Average Shares Outstanding-Diluted			29,789				29,539
	GIBRALTAR INDUSTRIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (in thousands)
					September 30,                December 31,
					2005				2004
	Assets
	Current assets:
	Cash and cash equivalents			$	8,149			$	10,892
	Accounts receivable, net				174,269				146,021
	Inventories				166,727				207,215
	Other current assets				14,368				15,479
	Total current assets				363,513				379,607
	Property, plant and equipment, net				256,503				269,019
	Goodwill				292,438				285,927
	Investments in partnerships				6,806				8,211
	Other assets				14,567				14,937
				$	933,827			$	957,701
	Liabilities and Shareholders' Equity
	Current liabilities:
	Accounts payable			$	71,657			$	70,775
	Accrued expenses				46,679				51,885
	Current maturities of long-term debt				8,659				8,859
	Current maturities of related party debt				5,833				5,833
	Total current liabilities				132,828				137,352
	Long-term debt				238,414				289,514
	Long-term related party debt				-				5,833
	Deferred income taxes				67,621				66,485
	Other non-current liabilities				5,190				4,774
	Shareholders’ equity:
	Preferred stock, $.01 par value; authorized: 10,000,000       shares; none outstanding				-				-
	Common stock, $.01 par value; authorized 50,000,000 shares; issued 29,731,498 and 29,665,780 shares in 2005 and 2004, respectively				297				297
	Additional paid-in capital				216,746				209,765
	Retained earnings				276,208				242,585
	Unearned compensation				(5,752)				(572)
	Accumulated other comprehensive loss				2,275				1,668
					489,774				453,743
	Less: cost of 40,500 common shares held in treasury in          2005 and 2004				-				-
	Total shareholders’ equity				489,774				453,743
				$	933,827			$	957,701

GIBRALTAR INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited) (in thousands)
				Three Months Ended September 30,																				Nine Months Ended September 30,
						2005									2004										2005								2004
Net sales			$		282,139							$		267,346									$	844,108					$			721,045
Cost of sales					228,133									207,940										683,504								563,436
Gross profit					54,006									59,406										160,604								157,609
Selling, general and administrative expense					28,929									31,605										85,353								84,923
Income from operations					25,077									27,801										75,251								72,686
Other (income) expense:
Equity in partnerships’ loss (income), and other income					820									(1,766)										469								(3,492)
Interest expense					3,358									3,496										11,102								9,523
Total other expense					4,178									1,730										11,571								6,031
Income before taxes					20,899									26,071										63,680								66,655
Provision for income taxes					8,151									10,298										24,395								26,329
Net income from continuing operations					12,748									15,773										39,285								40,326
Discontinued operations: (Loss) income from discontinued operations Income tax (benefit) expense					(1,457) (568)									739 292										(1,981) (772)								1,129 446
(Loss) income from discontinued operations					(889)									447										(1,209)								683
Net income			$		11,859							$		16,220									$	38,076					$			41,009
Net income per share - Basic: Income from continuing operations (Loss) income from discontinued operations					.43 (.03)									.53 .02										1.33 (.04)								1.38 .02
Net income			$		.40							$		.55									$	1.29					$			1.40
Weighted average shares outstanding – Basic					29,622									29,448										29,600								29,302
Net income per share - Diluted: Income from continuing operations (Loss) income from discontinued operations					.43 (.03)									.53 .02										1.32 (.04)								1.37 .02
Net income			$		.40							$		.55									$	1.28					$			1.39
Weighted average shares outstanding – Diluted					29,831									29,692										29,789								29,539
GIBRALTAR INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (in thousands)
											Nine Months Ended                                    September 30,
																		2005										2004
Cash flows from operating activities
Net income													$					38,076								$		41,009
Net (loss) income from discontinued operations																		(1,209)										683
Net income from continuing operations																		39,285										40,326
Adjustments to reconcile net income to net cash provided by    operating activities:
Depreciation and amortization																		19,567										17,774
Provision for deferred income taxes																	(51)											3,659
Equity in partnerships’ loss (income)																	554											(3,492)
Distributions from partnerships																	850											1,314
Unearned compensation, net of restricted stock forfeitures																	900											120
Other noncash adjustments																	248											927
Increase (decrease) in cash resulting from changes
in (net of acquisitions and dispositions):
Accounts receivable																	(31,294)											(49,601)
Inventories																	37,271											(59,676)
Other current assets																	1,436											1,067
Accounts payable and accrued expenses																	(5,616)											48,754
Other assets																	(3,997)											(1,246)
Net cash provided by (used in) continuing operations																	59,153											(74)
Net cash used in discontinued operations																	(1,402)											(687)
Net cash provided by (used in) operating activities																	57,751											(761)
Cash flows from investing activities
Acquisitions, net of cash acquired																	(27,582)											(64,985)
Purchases of property, plant and equipment																	(14,799)											(16,392)
Net proceeds from sale of property and equipment																	429											491
Net proceeds from sale of business																	42,594											-
Net cash provided by (used in) investing activities for      continuing operations																642											(80,886)
Net cash used in investing activities for discontinued operations																	(331)											(642)
Net cash provided by (used in) investing activities																	311											(81,528)
Cash flows from financing activities
Long-term debt reduction																	(182,720)											(27,506)
Proceeds from long-term debt																	125,589											85,418
Payment of dividends																	(4,453)											(2,734)
Net proceeds from issuance of common stock																	779											9,160
Net cash (used in) provided by financing activities																	(60,805)											64,338
Net decrease in cash and cash equivalents																	(2,743)											(17,951)
Cash and cash equivalents at beginning of year																	10,892											29,019
Cash and cash equivalents at end of period													$				8,149									$		11,068
GIBRALTAR INDUSTRIES, INC. Segment Information (unaudited) (in thousands)
	Three Months Ended September 30,
																					Increase (Decrease)
		2005							2004												$									%
		(unaudited)							(unaudited)
Net Sales
Processed metal products	$	106,333					$		110,987										$		(4,654)									(4.2%)
Building products		149,116							131,028												18,088									13.8%
Thermal processing		26,690							25,331												1,359									5.4%
Total Sales		282,139							267,346												14,793									5.5%
Income (loss)  from Continuing Operations
Processed metal products	$	4,758					$		12,504										$		(7,746)									(61.9%)
Building products		23,229							21,051												2,178									10.3%
Thermal processing		3,416							2,594												822									31.7%
Corporate		(6,326)							(8,348)												2,022									24.2%
Total Operating Income		25,077							27,801												(2,724)									(9.8%)
Operating Margin
Processed metal products		4.5%							11.3%
Building products		15.6%							16.1%
Thermal processing		12.8%							10.2%
	Nine Months Ended September 30,
																						Increase (Decrease)
		2005								2004												$									%
		(unaudited)								(unaudited)
Net Sales
Processed metal products	$	352,133						$		282,473										$		69,660									24.7%
Building products		410,942								361,304												49,638									13.7%
Thermal processing		81,033								77,268												3,765									4.9%
Total Sales		844,108								721,045												123,063									17.1%
Income (loss)  from Continuing Operations
Processed metal products	$	27,225						$		31,535										$		(4,310)									(13.7%)
Building products		55,930								51,181												4,749									9.3%
Thermal processing		11,021								10,816												205									1.9%
Corporate		(18,925)								(20,846)												1,921									9.2%
Total Operating Income		75,251								72,686												2,565									3.5%
Operating Margin
Processed metal products		7.7%								11.2%
Building products		13.6%								14.2%
Thermal processing		13.6%								14.0%