For Immediate Release
April 26, 2006
GIBRALTAR REPORTS FIRST-QUARTER SALES AND EARNINGS
First-Quarter Sales Increase 32 Percent to $360 Million;
Net Income of $14.4 Million is up 36 Percent; EPS of $.48 Increases 33 Percent
BUFFALO, NEW YORK (April 26, 2006) – Gibraltar Industries, Inc. (NASDAQ: ROCK) today reported strong first-quarter sales, net income, and earnings per share for the quarter ended March 31, 2006.
Sales from continuing operations in the first quarter of 2006 were $360 million, an increase of approximately 32 percent from $274 million in the first quarter of 2005, continuing a trend of solid sales growth. Net income from continuing operations of $14.4 million in the quarter ended March 31, 2006, increased by approximately 36 percent from $10.6 million in the first quarter of 2005.
Earnings per share from continuing operations in the first quarter of 2006 were $.48, above the upper end of the range Gibraltar provided on February 8, and an increase of approximately 33 percent compared to $.36 per share in the first quarter of 2005.
“Our results in the first quarter are especially noteworthy since we had to overcome rising energy and transportation costs, as well as competitive pricing pressures in our Processed Metal Products segment,” said Brian J. Lipke, Gibraltar’s Chairman and Chief Executive Officer.
“The first-quarter results in our Building Products segment, which now represents approximately 60 percent of our sales, were strong across the board. Our Thermal Processing segment had an excellent quarter, with record sales and strong operating margins. Our Processed Metal Products segment continued to face competitive pricing pressures, which persisted longer than anticipated, and the cost of steel is continuing to escalate,” said Henning N. Kornbrekke, Gibraltar’s President and Chief Operating Officer.
“Our first-quarter results again demonstrate that Gibraltar’s product, market, customer, and geographic diversity allows us to produce consistent and steadily improving results in a variety of economic and operating environments. These results again show that Gibraltar has transitioned into a diversified manufacturer capable of generating higher and more consistent margins over an extended period,” said Mr. Lipke.
“In the year ahead, we will continue to focus on improving operating efficiencies, optimizing our market share, and maximizing our cash flow to help fund our growth and reduce debt,” said Mr. Kornbrekke.
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Gibraltar Reports First-Quarter Sales and Earnings
Page Two
Looking ahead, Mr. Kornbrekke said that, barring a significant change in business conditions, Gibraltar expects its second-quarter earnings per share will be in the range of $.57 to $.62, compared to $.53 in the second quarter of 2005.
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 approximately 24,000 customers in a variety of industries in all 50 states, Canada, Mexico, Europe, Asia, and Central and South America. It has approximately 4,400 employees and operates 93 facilities in 29 states, Canada, Mexico, and China.
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 first-quarter results and discuss its outlook for the second quarter during its quarterly conference call, which will be held at 2 p.m. Eastern Time on April 27. Details of the call can be found on Gibraltar’s Web site, atwww.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, atwww.gibraltar1.com.
Gibraltar Reports First-Quarter Sales and Earnings
Page Three
GIBRALTAR INDUSTRIES, INC. Financial Highlights (in thousands, except per share data)
|
| | Three Months Ended |
| | | March 31, 2006 | | | March 31, 2005 |
| | | | | | |
Net sales | $ | 360,355 | | $ | 273,581 |
Income from continuing operations | $ | 14,397 | | $ | 10,622 |
Income per share from continuing operations - Basic | $ | .49 | | $ | .36 |
Weighted average shares outstanding - Basic | | 29,652 | | | 29,571 |
Income per share from continuing operations - Diluted | $ | .48 | | $ | .36 |
Weighted average shares outstanding - Diluted | | 29,944 | | | 29,775 |
GIBRALTAR INDUSTRIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS |
(in thousands, except per share data) |
| |
| | | March 31, December 31, |
| | | 2006 | | | 2005 |
| | | | | | |
Assets | | | | | |
| | | | | | |
Current assets: | | | | | |
Cash and cash equivalents | $ | 9,317 | | $ | 28,529 |
Accounts receivable | | 212,038 | | | 178,775 |
Inventories | | 210,745 | | | 194,653 |
Other current assets | | 22,111 | | | 22,047 |
Total current assets | | 454,211 | | | 424,004 |
| | | | | | |
Property, plant and equipment, net | | 309,657 | | | 311,147 |
Goodwill | | 406,810 | | | 406,767 |
Investments in partnerships | | 5,833 | | | 6,151 |
Other assets | | 55,787 | | | 56,943 |
| | $ | 1,232,298 | | $ | 1,205,012 |
| | | | | | |
Liabilities and Shareholders' Equity | | | | | |
Current liabilities: | | | | | |
Accounts payable | $ | 101,289 | | $ | 85,877 |
Accrued expenses | | 66,803 | | | 63,007 |
Current maturities of long-term debt | | 2,534 | | | 2,531 |
Current maturities of related party debt | | 5,833 | | | 5,833 |
Total current liabilities | | 176,459 | | | 157,248 |
| | | | | | |
Long-term debt | | 446,378 | | | 454,649 |
Deferred income taxes | | 93,625 | | | 93,052 |
Other non-current liabilities | | 6,830 | | | 6,038 |
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 29,783,623 and 29,734,986 shares in 2006 and 2005, respectively | | 298 | | | 298 |
Additional paid-in capital | | 212,961 | | | 216,897 |
Retained earnings | | 293,026 | | | 280,116 |
Unearned compensation | | - | | | (5,153) |
Accumulated other comprehensive loss | | 2,721 | | | 1,867 |
| | 509,006 | | | 494,025 |
Less: cost of 41,100 common shares held in treasury in 2006 and 2005 | |
- | | |
- |
Total shareholders’ equity | | 509,006 | | | 494,025 |
| | $ | 1,232,298 | | $ | 1,205,012 |
GIBRALTAR INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share date) |
| | | Three Months Ended March 31, |
| | | | | | | 2006 | | 2005 |
| | | | | |
Net sales | | | | | $ | 360,355 | $ | 273,581 |
| | | | | | | | | |
Cost of sales | | | | | | 288,832 | | 223,449 |
| | | | | | | | | |
Gross profit | | | | | | 71,523 | | 50,132 |
| | | | | | | | | |
Selling, general and administrative expense | | | | | | 40,561 | | 29,236 |
| | | | | | | | | |
Income from operations | | | | | | 30,962 | | 20,896 |
| | | | | | | | | |
Other (income) expense: | | | | | | | | |
Equity in partnerships’ income and other income Interest expense | | | | | | (686) 8,047 | | (444) 3,928 |
Total other expense | | | | | | 7,361 | | 3,484 |
| | | | | | | | | |
Income before taxes | | | | | | 23,601 | | 17,412 |
| | | | | | | | | |
Provision for income taxes | | | | | | 9,204 | | 6,790 |
| | | | | | | | | |
Income from continuing operations | | | | | $ | 14,397 | $ | 10,622 |
| | | | | | | | | |
Discontinued operations: | | | | | | | | |
Income from discontinued operations before taxes Income tax expense
| | | | | | - - | | 204 80 |
Income from discontinued operations | | | | | | - | | 124 |
| | | | | | | | | |
Net income | | | | | $ | 14,397 | $ | 10,746 |
| | | | | | | | | |
Net income per share – Basic: | | | | | | | | |
Income from continuing operations Income from discontinued operations | | | | | $ | .49 .00 | $ | .36 .00 |
Net Income | | | | | $ | .49 | $ | .36 |
| | | | | | | | | |
Weighted average shares outstanding – Basic | | | | | | 29,652 | | 29,571 |
| | | | | | | | | |
Net income per share – Diluted: | | | | | | | | |
Income from continuing operations Income from discontinued operations | | | | | $ | .48 .00 | $ | .36 .00 |
Net Income | | | | | $ | .48 | $ | .36 |
| | | | | | | | | |
Weighted average shares outstanding – Diluted | | | | | | 29,944 | | 29,775 |
| |
| | GIBRALTAR INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) | |
| | | Three Months Ended March 31, |
| | | | | 2006 | | 2005 |
Cash flows from operating activities | | | | | | |
Net income | | | $ | 14,397 | $ | 10,746 |
Income from discontinued operations | | | | - | | 124 |
Income from continuing operations | | | | 14,397 | | 10,622 |
Adjustments to reconcile net income to net cash used in operating activities: | | | | | | |
Depreciation and amortization | | | | 8,874 | | 6,473 |
Provision for deferred income taxes | | | | - | | (1,691) |
Equity in partnerships’ (loss) income | | | | 131 | | (444) |
Distributions from partnerships | | | | 188 | | 343 |
Stock compensation expense | | | | 706 | | 51 |
Other noncash adjustments | | | | (9) | | - |
Increase (decrease) in cash resulting from changes | | | | | | |
in (net of acquisitions): | | | | | | |
Accounts receivable | | | | (33,273) | | (32,835) |
Inventories | | | | (16,101) | | (29,244) |
Other current assets and other assets | | | | 629 | | (122) |
Accounts payable | | | | 15,424 | | 602 |
Accrued expenses and other non-current liabilities | | | | 5,464 | | (1,822) |
| | | | | | | |
Net cash used in continuing operations | | | | (3,570) | | (48,067) |
Net cash provided by discontinued operations | | | | 0 | | 194 |
Net cash used in operating activities
| | | | (3,570) | | (47,873) |
| | | | | | | |
Cash flows from investing activities | | | | | | |
Purchases of property, plant and equipment | | | | (6,377) | | (6,075) |
Net proceeds from sale of property and equipment | | | | 36 | | 255 |
Net proceeds from sale of business | | | | - | | 43,322 |
| | | | | | | |
Net cash used in investing activities for continuing operations | | | | (6,341) | | 37,502 |
Net cash provided by (used in) investing activities for discontinued operations | | | |
- | |
(349) |
Net cash provided by (used in) investing activities | | | | (6,341) | | 37,153 |
| | | | | | | |
Cash flows from financing activities | | | | | | |
Long-term debt reduction | | | | (15,137) | | - |
Proceeds from long-term debt | | | | 6,817 | | 7,683 |
Payment of deferred financing costs | | | | (161) | | - |
Net proceeds from issuance of common stock | | | | 552 | | 473 |
Payment of dividends | | | | (1,487) | | (1,485) |
Tax benefit from stock options | | | | 115 | | - |
| | | | | | | |
Net cash provided by (used in) financing activities | | | | (9,301) | | 6,671 |
| | | | | | | |
Net decrease in cash and cash equivalents | | | | (19,212) | | (4,049) |
| | | | | | | |
Cash and cash equivalents at beginning of year | | | | 28,529 | | 10,892 |
| | | | | | | |
Cash and cash equivalents at end of period | | | $ | 9,317 | $ | 6,843 |
GIBRALTAR INDUSTRIES, INC. Segment Information (in thousands)
|
| | Three Months Ended March 31, |
| | | | | | | Increase (Decrease) |
| | | 2006 | | 2005 | | $ | | % |
| | | (unaudited) | | (unaudited) | | | | |
| | | | | | | | | |
Net Sales | | | | | | | | |
Building products | $ | 214,742 | $ | 119,172 | $ | 95,570 | | 80.2% |
Processed metal products | | 115,889 | | 127,612 | | (11,723) | | (9.2%) |
Thermal processing | | 29,724 | | 26,797 | | 2,927 | | 10.9% |
| | | | | | | | | |
Total Sales | $ | 360,355 | $ | 273,581 | $ | 86,774 | | 31.7% |
| | | | | | | | | |
| | | | | | | | | |
Income from Operations | | | | | | | | |
Building products | $ | 31,271 | $ | 10,504 | $ | 20,767 | | 197.7% |
Processed metal products | | 6,735 | | 14,023 | | (7,288) | | (52.0%) |
Thermal processing | | 4,655 | | 3,405 | | 1,250 | | 36.7% |
Corporate | | (11,699) | | (7,036) | | (4,663) | | 66.3% |
| | | | | | | | | |
Total Operating Income | $ | 30,962 | $ | 20,896 | $ | 10,066 | | 48.2% |
| | | | | | | | | |
| | | | | | | | | |
Operating Margin | | | | | | | | |
Building products | | 14.6% | | 8.8% | | | | |
Processed metal products | | 5.8% | | 11.0% | | | | |
Thermal processing | | 15.7% | | 12.7% | | | | |
