SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
(Mark One)
( X ) ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES ACT OF 1934
For The Fiscal Year Ended December 31, 1996
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period From ___________ to ____________
Commission File Number 0-22462
GIBRALTAR STEEL CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 16-1445150
(State or other jurisdiction (I.R.S. Employer
of incorporation organization) Identification No.)
3556 Lake Shore Road, PO Box 2028, Buffalo, New York 14219-0228
(address of principal executive offices) (Zip Code)
(716) 826-6500
Registrant's telephone number, including area code
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
Common Stock, NASDAQ National Market System
$.01 par value
Securities registered pursuant to Section 12(g) of the Act:
NONE
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the Registrant was required to file
such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES X NO
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will
not be contained, to the best of the Registrant's knowledge, in
definitive proxy or information statements incorporated by
reference in Part III of the Form 10-K or any amendment to this
Form 10-K. ( )
As of December 31, 1996, the aggregate market value of the voting
stock held by nonaffiliates of the Registrant amounted to
$159,766,000.
As of December 31, 1996, the number of common shares outstanding
was: 12,322,400.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's definitive Proxy Statement for the
Annual Meeting of Shareholders to be held May 20, 1997, are
incorporated by reference into Part III of this report.
Exhibit Index is on Page 36
PART I
Item 1. Description of Business
General
The Company is an intermediate processor of value-added
steel products, consisting primarily of a broad range of
fully processed cold-rolled strip steel products. Cold-
rolled strip steel products comprise a segment of the cold-
rolled sheet steel market that is defined by narrower
widths, improved surface conditions and tighter gauge
tolerances and are used by customers that demand critical
specifications in their raw material needs. The Company
manufactures high quality steel strapping for industrial
applications and operates a precision metals facility for
flat-rolled sheet steel and other processed metals
products. The Company is a supplier of galvanized,
galvalume and prepainted steel to the commercial and
residential metal building industry. The Company operates
materials management facilities that link steel producers
and end-user manufacturers by integrating the inventory
purchasing, receiving, inspection, billing, storage and
shipping functions resulting in true just-in-time delivery
of materials, thereby enabling both the steel producers
and the end-user manufacturers to manage inventory more
efficiently. Carolina Commercial Heat Treating, Inc.
(CCHT), acquired in February 1996, provides metallurigical
heat treating services for customers in a wide variety of
industries.
Industry Overview
Intermediate steel processors occupy a market niche that
exists between primary steel producers and end-user
manufacturers. Primary steel producers typically focus on
the sale of standard size and tolerance steel to large
volume purchasers, including intermediate steel
processors. At the same time, end-user manufacturers
require steel with closer tolerances and on shorter lead
times than the primary steel producers can provide
efficiently.
Products and Services
The Company utilizes any one or a combination of 20
different processes and services to produce and deliver a
variety of products on a just-in-time basis to industrial
manufacturers and fabricators in the
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automotive, automotive supply, appliance, metal building,
machinery, hardware, office equipment, electrical, and
steel industries. The following table sets forth certain
information regarding sales of products and services as a
percentage of net sales for the past three years:
Product or Service Year Ended December 31,
1994 1995 1996
Cold-rolled strip steel 67% 50% 43%
Other processed metals and
services 22% 42% 50%
Steel strapping products 11% 8% 7%
Cold-Rolled Strip Steel
The Company produces a broad range of fully processed cold-
rolled strip steel products. The Company buys wide, open
tolerance sheet steel in coils from primary steel producers
and processes it to specific customer orders by performing
such computer-aided processes as cold reduction, annealing,
edge rolling, roller leveling, slitting and cutting to
length. Cold reduction is the rolling of steel to a
specified thickness, temper and finish. Annealing is a
thermal process which changes hardness and certain
metallurgical characteristics of steel. Edge rolling
involves conditioning edges of processed steel into square,
full round or partially round shapes. Roller leveling
applies pressure across the width of the steel to achieve
precise flatness tolerances. Slitting is the cutting of
steel to specified widths. Depending on customer
specifications, one or more of these processes are utilized
to produce steel strip of a precise grade, temper, tolerance
and finish.
The Company operates 10 rolling mills at its facilities in
Cleveland, Ohio, Chattanooga, Tennessee and Buffalo, New
York, and is capable of rolling widths of up to 38 inches.
The Company has the capability to process coils up to a
maximum 72 inch outside diameter. The Company's rolling
mills include a hydraulic roll force system and an automatic
gauge control system which is linked to a statistical
process control computer, allowing microsecond adjustments
during processing. The Company's computerized mills enable
it to satisfy a growing industry demand for a range of steel
from heavier gauge and special alloy steels to low carbon
and light gauge steels, in each case having a high-quality
finish and precision gauge tolerance. This equipment can
process flat-rolled steel to specific customer requirements
for thickness tolerances as close as +/- .00025 inches.
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The Company's rolling facility is further complemented by 15
high convection annealing furnaces, which shorten annealing
times over conventional annealers. The Company's newest
furnaces incorporate the use of a hydrogen atmosphere for the
production of cleaner and more uniform steel. As a result of
its annealing capabilities, the Company is able to produce cold-
rolled strip steel with improved consistency in terms of
thickness, hardness, molecular grain structure and surface.
The Company can produce certain of its strip steel products
on oscillated coils which wind the steel strip in a manner
similar to the way thread is wound on a spool. Oscillating
the steel enables the Company to put at least six times
greater volume of finished product on a coil than standard
ribbon winding, allowing customers to achieve longer
production runs by reducing the number of equipment shut-
downs to change coils. Customers are thus able to increase
productivity, reduce downtime, improve yield and lengthen die
life.
Other Processed Metals and Services
Precision Metals. The Company operates a precision metals
facility for flat-rolled sheet steel and other processed metal
products. In addition to slitting and cutting to length, the
Company's precision metals facility can produce higher value-
added products that are held to close tolerances and tight
specifications through cold-rolling, annealing, blanking,
oscillating and edging rolling.
The Company through its Hubbell Steel facility acquired in 1995
also processes galvanized, galvalume and prepainted steel for the
commercial and residential metal building industries. This
facility has the capability to slit and cut to length material
based upon customer specifications.
Materials Management. The Company operates two materials
management facilities that link primary steel producers and end-
user manufacturers by integrating the inventory purchasing,
receiving, inspection, billing, storage and shipping functions
and producing true just-in-time delivery of materials. The
Company's facilities receive shipments of steel by rail and
truck from steel producers, which retain ownership of the steel
until it is delivered to the end-user manufacturer. The
Company inspects the steel and stores it in a climate-
controlled environment through the use of a specialized stacker
crane and racking system. When an order is placed, the Company
often delivers the steel to the end-user manufacturer within
one hour using Company-owned trucks that have been custom
designed to facilitate the loading and unloading process. The
initial material management facility was opened in 1990 in
Lackawanna, New York. During the third quarter of 1995, a
second facility was opened in Woodhaven, Michigan.
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Joint Venture. Through a subsidiary, the Company is a minority
partner in two steel pickling operations. After the hot-rolling
process, the surface of sheet steel is left with a residue
known as scale, which must be removed prior to further
processing by a cleaning process known as pickling. This joint
venture pickles steel on a toll basis, receiving fees for its
pickling services without acquiring ownership of the steel.
The initial pickling operation was opened in 1989 in Cleveland,
Ohio. During the third quarter of 1995, a second joint
ventured pickling operation opened in Twinsburg, Ohio.
Metallurgical Heat Treating Services. In February 1996, the
Company acquired CCHT which through its facilities located in
North Carolina, South Carolina, Tennessee and Georgia provides
metallurgical heat treating services for customer-owned parts.
These services include case-hardening, surface-hardening and
through-hardening processes, for customers in a wide variety of
industries. Using methods such as annealing, flame hardening,
vacuum hardening, carburizing and nitrating, as well as a host
of other services, these facilities can harden, soften or
otherwise impart desired properties on parts made of steel,
copper and various alloys and other metals. A variety of
brazing services to join metallic objects together is also
provided. CCHT maintains a metallurgical laboratory at each
facility, providing a range of testing capabilities to add
value to treated parts and enhance quality control. Consistent
quality control is maintained by application of a statistical
process control system. Additionally, CCHT maintains a fleet
of trucks and trailers to provide rapid turnaround time for its
customers.
Steel Strapping Products
Steel strapping is banding and packaging material that is used
to close and reinforce shipping units such as bales, boxes,
cartons, coils, crates and skids. The Company believes that it
is one of three major domestic manufacturers of high tensile
steel strapping, which is used in heavy duty applications.
High tensile strapping is subject to strength requirements
imposed by the American Association of Railroads for packaging
of different products for common carrier transport. This high
tensile steel strapping is essential to producers of large,
heavy products such as steel, paper and lumber where
reliability of the packaging material is critical to the safe
transport of the product.
The Company's strapping facility manufactures high tensile
steel strapping by slitting, oscillating, heat treating,
painting and packaging cold-rolled coils.
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Steel strapping is cold-rolled to precise gauge on the
Company's rolling mill, which incorporates hydraulic screw
downs and automatic gauge controls with statistical charting.
This process ensures strapping product of the most uniform
gauge available and produces the maximum amount of strapping
per pound of steel. All products are tested by on-site
laboratory personnel for width, thickness and other
metallurgical properties.
To meet the differing needs of its customers, the Company
offers its strapping products in various thicknesses, widths
and coil sizes. The Company also manufactures custom color and
printed strapping. In addition, the Company offers related
strapping products, such as seals and tools, and is able to
manufacture tensional strapping for lighter duty applications.
Quality Control
The Company carefully selects its raw material vendors and uses
computerized inspection and analysis to assure that the steel
that enters its production processes will be able to meet the
most critical specifications of its customers. The Company
uses documented procedures during the production process, along
with statistical process control computers linked directly to
processing equipment, to monitor that such specifications are
met. Physical, chemical and metallographic analyses are
performed during the production process to verify that
mechanical and dimensional properties, cleanliness, surface
characteristics and chemical content are within specification.
Suppliers and Raw Materials
Intermediate steel processing companies are required to
maintain substantial inventories of raw materials in order to
accommodate the short lead times and just-in-time delivery
requirements of their customers. Accordingly, the Company
generally maintains its inventory of raw materials at levels
that it believes are sufficient to satisfy the anticipated
needs of the customers based upon historic buying practices and
market conditions. The primary raw material utilized by the
Company in its processing operations is flat-rolled steel. The
Company purchases flat-rolled steel at regular intervals from a
number of suppliers, however, a majority of its steel
requirements is purchased from approximately 15 major North
American suppliers. The Company has no long-term commitments
with any of its suppliers.
Technical Services
The Company employs a staff of engineers and other technical
personnel and maintains fully-equipped, modern laboratories to
support is operations. The facilities enable the Company to
verify, analyze and document the
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physical, chemical, metallurgical and mechanical properties of
its raw materials and products. Technical service personnel also
work in conjunction with the sales force to determine the types
of flat rolled steel required for the particular needs of the
Company's customers.
Sales and Marketing
The Company's products and services are sold primarily by
Company sales personnel located throughout the midwest,
northeast and southeast United States and Mexico. This
marketing staff is supported by a vice president of sales for
each of the Company's principal product lines.
Customers and Distribution
The Company services over 4,500 industrial customers located
primarily in the midwest, northeast and southeast United
States, Canada and Mexico. In 1996, net sales to automotive
and automotive supply manufacturers accounted for approximately
17% and 29%, respectively. The Company also sells its products
to customers in the appliance, metal building, machinery,
hardware, office equipment, electrical, and steel industries.
The Company manufacturers its products exclusively to customer
order rather than for inventory. Although the Company
negotiates annual sales orders with a majority of its
customers, these orders are subject to customer confirmation as
to product amounts and delivery dates.
In 1994 and 1995, General Motors Corporation, the Company's
largest customer, through its various subsidiaries and
affiliates, accounted for approximately 14% and 11% of net sales,
respectively. In 1996, no customer of the Company represented
10% or more the Company's net sales.
Competition
The steel processing market is highly competitive. The Company
competes with a small number of other intermediate steel
processors, some of which also focus on fully processed high
value-added steel products. The Company competes on the basis
of the precision and range of achievable tolerances, quality,
price and the ability to meet delivery schedules dictated by
customers.
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The Company also competes with a small number of other steel
strapping manufacturers on the basis of quality, price, product
variety and the ability to meet delivery schedules dictated by
customers.
The Company competes with a small number of suppliers of heat
treating services in its market areas on the basis of quality,
reliable delivery and price.
Employees
At December 31, 1996, the Company employed 911 people.
Approximately 170 of the Company's hourly plant personnel are
represented by the Local Union No. 55 of the United Automobile
Workers under two separate contracts at the precision metals
facility and the Buffalo-based cold-rolled strip steel and
strapping facility, which expire in April 1997 and July 1999,
respectively. In addition, under a contract which expires in
February 1998, approximately 27 hourly plant personnel are
represented by the Local Union No. 101, Chicago Truck Drivers,
Helpers and Warehouse Workers at the precision metals facility
in Franklin Park. The Company believes that its relationship
with its employees is good.
Backlog
Because of the nature of the Company's products and the short
lead time order cycle, backlog is not a significant factor in
the Company's business. The Company believes that
substantially all of its backlog of firm orders existing on
December 31, 1996 will be shipped prior to the end of 1997.
Governmental Regulation
The Company's processing centers and manufacturing facilities
are subject to many federal, state and local requirements
relating to the protection of the environment. The Company
believes that it is in material compliance with all
environmental laws, does not anticipate any material
expenditures in order to meet environmental
requirements and does not believe that future compliance with
such laws and regulations will have a material adverse effect
on its results of operations or financial condition.
The Company's operations are also governed by many other laws
and regulations. The Company believes that it is in material
compliance with these laws and regulations and does not believe
that future compliance with such laws and regulations will have
a material adverse effect on its results of operations or
financial condition.
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Item 2. Description of Properties
The Company maintains its corporate headquarters in Buffalo,
New York and conducts its business operations in facilities
located in New York, Michigan, Illinois, Ohio, Tennessee, South
Carolina, Texas, North Carolina and Georgia.
The Company believes that its primary existing facilities,
listed below, and their equipment are effectively utilized,
well maintained, in good condition and will be able to
accommodate its capacity needs through 1997.
Location Utilization Square Owned or
Footage Leased
Buffalo, New York Headquarters 23,000 Leased
Buffalo, New York Precision metals
processing; warehouse 207,000 Owned
Cheektowaga, New Cold-rolled strip steel
York processing and strapping
products 148,000 Owned
Tonawanda, New York Cold-rolled strip steel and
precision metals processing 128,000 Owned
Lackawanna, New Materials management
York facility 65,000 Leased
Dearborn, Michigan Strapping tool products 3,000 Owned
Woodhaven, Michigan Materials management
facility 100,000 Owned
Franklin Park, Coated sheet steel and
Illinois precision metals processing 99,000 Owned
Cleveland, Ohio Cold-rolled strip steel
processing 229,200 Leased
Chattanooga,
Tennessee Steel processing 65,000 Owned
North Charleston,
S. Carolina Distribution warehouse 190,000 Leased
Brownsville, Texas Distribution warehouse 15,000 Leased
Fountain Inn, S.
Carolina Heat treating services 77,400 Leased
Reidsville, N.
Carolina Heat treating services 53,500 Leased
Morristown,
Tennessee Heat treating services 24,200 Owned
Conyers, Georgia Heat treating services 18,700 Leased
Charlotte, N.
Carolina Administrative offices 3,400 Leased
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Item 3. Legal Proceedings
From time to time, the Company is named a defendant in legal
actions arising out of the normal course of business. The
Company is not a party to any pending legal proceeding the
resolution of which the management of the Company believes will
have a material adverse effect on the Company's results of
operations or financial condition or to any other pending legal
proceedings other than ordinary, routine litigation incidental
to its business. The Company maintains liability insurance
against risks arising out of the normal course of business.
The Company has been designated, along with others, as a
potentially responsible party under Comprehensive Environmental
Response, Compensation and Liability Act of 1980, or comparable
state statutes, at one site. Based on the facts currently known
to the Company, management expects that those costs to the
Company of remedial actions at the site where it has been named
a potentially responsible party will not have a material
adverse effect on the Company's results of operations or
financial condition.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
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PART II
Item 5. Market for Common Equity and Related Stockholder
Matters
As of December 31, 1996, there were 145 shareholders of record
of the Company's common stock. However, the Company believes
that it has a significantly higher number of shareholders
because of the number of shares that are held by nominees.
The Company's common stock is traded in the over-the-counter
market and quoted on the National Association of Securities
Dealers Automated Quotation System - National Market System
("NASDAQ"). Its trading symbol is "ROCK". The following table
sets forth the high and low sales prices per share for the
Company's common stock for each quarter of 1996 and 1995:
1996 High Low
Fourth Quarter $ 26 1/4 $ 21
Third Quarter 23 1/4 16 1/2
Second Quarter 22 15
First Quarter 15 3/4 12 1/8
1995
Fourth Quarter $ 13 1/2 $ 10
Third Quarter 14 1/4 12 3/4
Second Quarter 13 1/2 10 1/2
First Quarter 11 1/4 10 1/2
The Company has never paid cash dividends on its common stock
and it is currently the Company's policy to invest earnings in
the future development and growth of the Company.
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Item 6. Selected Financial Data
(in thousands, except share and per share data)
Year Ended December 31,
1996 1995 1994 1993 1992
Net Sales $ 342,974 $ 282,833 $ 200,142 $ 167,883 $ 145,680
Income from operations 30,617 20,368 16,179 12,934 10,454
Interest expense 3,827 3,984 1,374 1,621 1,873
Income before income taxes 26,790 16,384 14,805 11,513 8,581
Income taxes 10,815 6,662 5,996 6,300 339
Net income 15,975 9,722 8,809 5,213 8,242
Net income per share $ 1.42 $ .96 $ .87
Weighted average shares
outstanding 11,260,956 10,163,817 10,162,900
Pro forma net income (a) $ 7,337 $ 5,853
Pro forma net income per share $ .72 $ .58
Pro forma weighted average
shares outstanding (b) 10,162,900 10,162,900
Current assets $ 109,526 $ 86,995 $ 70,552 $ 50,502 $ 44,941
Current liabilities 40,853 29,480 22,028 21,905 26,111
Total assets 222,507 167,423 126,380 92,868 83,407
Total debt 49,841 59,054 38,658 14,179 26,313
Shareholders' equity 121,744 70,244 60,396 51,587 38,010
Capital expenditures $ 15,477 $ 14,504 $ 16,171 $ 10,468 $ 5,750
Depreciation and
amortization 6,246 4,538 3,445 3,399 3,226
<FN>
(a) Pro forma net income assumes that all of the Company's subsidiaries
had been subject to income taxation as C Corporations during periods
prior to the Company's initial public offering in November 1993.
(b) Pro forma weighted average number of common shares was computed
assuming the Company's initial public offering occurred at the
beginning of each year.
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Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Results of Operations
Year Ended 1996 Compared to Year Ended 1995
Net sales increased by $60.1 million, or 21%, to a record
$343.0 million in 1996 from $282.8 million in 1995. This
increase primarily resulted from including twelve months
of net sales of Hubbell Steel (acquired April 1995) for
1996 compared to nine months in 1995, including net sales
of CCHT (acquired February 14, 1996) and sales growth at
existing operations.
Cost of sales increased by $41.3 million, or 17%, to
$281.7 million in 1996 from $240.3 million in 1995. As a
percentage of net sales, cost of sales decreased to 82% of
net sales from 85%. This decrease was primarily due to
higher margins attributable to CCHT sales and lower raw
material costs at other operations.
Selling, general and administrative expense increased by
$8.5 million, or 39%, to $30.6 million in 1996 from $22.1
million in 1995. As a percentage of net sales, selling,
general and administrative expense increased to 8.9% from
7.8 % in 1995 primarily due to higher costs as a
percentage of sales attributable to CCHT and performance
based compensation linked to the Company's sales and
profitability.
Interest expense decreased by $.2 million primarily due to
lower interest rates in 1996 compared to 1995 which were
partially offset by higher average borrowings resulting
from higher inventory levels to service increased sales
and capital expenditures.
As a result of the above, income before taxes increased by
$10.4 million, or 64%, to a record $26.8 million in 1996
from $16.4 million in 1995.
Income taxes approximated $10.8 million in 1996, an
effective rate of 40.4% in comparison with 40.7% for 1995.
Year Ended 1995 Compared to Year Ended 1994
Net sales increased by $82.7 million, or 41%, to $282.8
million in 1995 from $200.1 million in 1994. This
increase includes $63.2 million in net sales of Hubbell
since the acquisition at the beginning of the second
quarter. The remaining net sales increase was
attributable to sales growth from existing operations and
new operations begun during 1995.
Cost of sales increased by $73.9 million, or 44%, to
$240.3 million in 1995 from $166.4 million in 1994. As a
percentage of net sales, cost of sales increased to 85% of
net sales from 83.2%. This increase was primarily due to
lower margins attributable to sales from Hubbell and lower
margins generated by startup operations.
Selling, general and administrative expense increased by
$4.6 million, or 26%, to $22.1 million in 1995 from $17.5
million in 1994. As a percentage of net sales, selling,
general and administrative expense decreased to 7.8% from
8.8% in 1994 primarily as a result of the lower costs as a
percentage of sales attributable to Hubbell.
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Interest expense increased by $2.6 million primarily as a
result of the Hubbell acquisition which resulted in higher
average borrowings, in addition to higher interest rates
compared to 1994 and additional borrowings resulting from
higher inventory levels to service increased sales and
capital expenditures.
As a result of the above, income before taxes increased by
$1.6 million, or 11%, to $16.4 million in 1995 from $14.8
million in 1994.
Income taxes approximated $6.7 million in 1995, an
effective rate of 40.7% in comparison with 40.5% for
1994.
Liquidity and Capital Resources
During 1996, the Company increased working capital by
19.4% to $68.7 million. Long term debt was reduced to
$48.6 million and to 28.5% of total capitalization.
Additionally, shareholders' equity increased by 73.3% to
$121.7 million at December 31, 1996.
The Company's principal capital requirements are to fund
its operations including working capital requirements, the
purchase and funding of improvements to its facilities,
machinery and equipment and to fund acquisitions.
Net cash provided by operations of $13.6 million resulted
primarily from net income of $16.0 million and
depreciation of $6.2 million offset by the net increase in
inventory and payables of $7.8 million to support record
sales.
Net proceeds of the public offering of $34.4 million were
used to repay debt of $23.7 million incurred for the
acquisition of CCHT.
Significant capital expenditures included the completion
of the installation of a new slitting line and 45,000
square foot of production and storage space at a Buffalo,
New York facility and the construction relating to the new
cold rolling mill expansion at the Cleveland, Ohio
facility.
During 1996, the Company extended the expiration date of
its $125 million credit facility to November 17, 2000.
This facility may be converted to a four year amortizing
loan at any time prior to expiration. At December 31,
1996, the Company had borrowings of $43 million and
additional availability of $82 million.
The Company believes that availability under its credit
facility, together with funds generated from operations,
will be more than sufficient to provide the Company with
the liquidity and capital resources necessary to fund its
anticipated working capital requirements, acquisitions and
capital expenditure commitments for the next twelve
months.
The Company believes that environmental issues will not
require the expenditure of material amounts for
environmental compliance in the future.
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Company Responsibility For Financial Statements
The accompanying consolidated financial statements of
Gibraltar Steel Corporation have been prepared by
management, which is responsible for their integrity and
objectivity. The statements have been prepared in
conformity with generally accepted accounting principles
and include amounts based on management's best estimates
and judgments. Financial information elsewhere in this
Annual Report is consistent with that in the consolidated
financial statements.
The Company has established and maintains a system of
internal control designed to provide reasonable assurance
that assets are safeguarded and that the financial records
reflect the authorized transactions of the Company.
The financial statements have been audited by Price
Waterhouse LLP, independent accountants. As part of their
audit of the Company's 1996 financial statements, Price
Waterhouse LLP considered the Company's system of internal
control to the extent they deemed necessary to determine
the nature, timing and extent of their audit tests.
The Board of Directors pursues its responsibility for the
Company's financial reporting through its Audit Committee,
which is composed entirely of outside directors. The
independent accountants have direct access to the Audit
Committee, with and without the presence of management
representatives, to discuss the results of their audit
work and their comments on the adequacy of internal
accounting controls and the quality of financial
reporting.
Brian J. Lipke
Chairman of the Board
and Chief Executive Officer
Walter T. Erazmus
Executive Vice President
and Chief Financial Officer
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Item 8. Financial Statements and Supplementary Data
Index to Financial Statements: Page Number
Financial Statements:
Report of Independent Accountants 17
Consolidated Balance Sheets at
December 31, 1996 and 1995 18
Consolidated Statements of Income for the
three years ended December 31, 1996 19
Consolidated Statements of Cash Flows for the
three years ended December 31, 1996 20
Consolidated Statements of Shareholders' Equity for
the three years ended December 31, 1996 21
Notes to Consolidated Financial Statements 22
Supplementary Data:
Quarterly Unaudited Financial Data 32
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Report of Independent Accountants
To the Board of Directors and
Shareholders of Gibraltar Steel Corporation
In our opinion, the consolidated financial statements
listed in the accompanying index present fairly, in
all material respects, the financial position of
Gibraltar Steel Corporation and its subsidiaries at
December 31, 1996 and 1995, and the results of their
operations and their cash flows for each of the three
years in the period ended December 31, 1996, in
conformity with generally accepted accounting
principles. These financial statements are the
responsibility of the Company's management; our
responsibility is to express an opinion on these
financial statements based on our audits. We
conducted our audits of these statements in accordance
with generally accepted auditing standards which
require that we plan and perform the audit to obtain
reasonable assurance about whether the financial
statements are free of material misstatement. An
audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the
financial statements, assessing the accounting
principles used and significant estimates made by
management, and evaluating the overall financial
statement presentation. We believe that our audits
provide a reasonable basis for the opinion expressed
above.
Price Waterhouse LLP
Buffalo, New York
January 17, 1997
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GIBRALTAR STEEL CORPORATION CONSOLIDATED BALANCE SHEET
(in thousands, except share and per share data)
December 31,
ASSETS 1996 1995
Current assets:
Cash and cash equivalents $ 5,545 $ 4,123
Accounts receivable 40,106 35,634
Inventories 62,351 45,274
Other current assets 1,524 1,964
Total current assets 109,526 86,995
Property, plant and equipment, net 88,670 67,275
Other assets 24,311 13,153
$ 222,507 $ 167,423
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 35,397 $ 25,845
Accrued expenses 4,238 2,421
Current maturities of long-term debt 1,218 1,214
Total current liabilities 40,853 29,480
Long-term debt 48,623 57,840
Deferred income taxes 10,364 9,251
Other non-current liabilities 923 608
Shareholders' equity
Preferred shares, $.01 par value;
authorized: 10,000,000 shares; none
outstanding - -
Common shares, $.01 par value;
authorized: 50,000,000 shares;
issued and outstanding: 12,322,400
shares in 1996 and 10,173,900 in 1995 123 102
Additional paid-in capital 64,307 28,803
Retained earnings 57,314 41,339
Total shareholders' equity 121,744 70,244
$ 222,507 $ 167,423
The accompanying notes are an integral part of these financial statements.
-18-
GIBRALTAR STEEL CORPORATION CONSOLIDATED STATEMENT OF INCOME
(in thousands, except share and per share data)
Year Ended December 31,
1996 1995 1994
Net sales $ 342,974 $ 282,833 $ 200,142
Cost of sales 281,717 240,370 166,443
Gross profit 61,257 42,463 33,699
Selling, general and
administrative expense 30,640 22,095 17,520
Income from operations 30,617 20,368 16,179
Interest expense 3,827 3,984 1,374
Income before taxes 26,790 16,384 14,805
Provision for income taxes 10,815 6,662 5,996
Net income $ 15,975 $ 9,722 $ 8,809
Net income per share $ 1.42 $ .96 $ .87
Weighted average number of
shares outstanding 11,260,956 10,163,817 10,162,900
The accompanying notes are an integral part of these financial statements.
-19-
GIBRALTAR STEEL CORPORATION CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)
Year Ended December 31,
1996 1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 15,975 $ 9,722 $ 8,809
Adjustments to reconcile net
income to net cash provided by (used
in) operating activities:
Depreciation and amortization 6,246 4,538 3,445
Provision for deferred income taxes 774 218 676
Undistributed equity investment income (528) (366) (505)
Gain on disposition of
property and equipment (4) (146) (37)
Increase (decrease) in cash resulting
from changes in (net of effects
from acquisitions):
Accounts receivable (1,225) 838 (6,451)
Inventories (17,077) 17,979 (13,354)
Other current assets 411 (503) (390)
Accounts payable and accrued expenses 9,275 3,390 (497)
Other assets (244) 70 (318)
Net cash provided by (used
in) operating activities 13,603 35,740 (8,622)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions, net of cash acquired (23,715) (20,859) -
Purchases of property, plant
and equipment (15,477) (14,504) (16,171)
Proceeds from sale of property
and equipment 775 317 173
Net cash used in investing activities (38,417) (35,046) (15,998)
CASH FLOWS FROM FINANCING ACTIVITIES
Long-term debt reduction (78,195) (64,527) (15,381)
Proceeds from long-term debt 68,906 66,832 39,860
Net proceeds from issuance of common stock 35,525 - -
Net cash provided by financing activities 26,236 2,305 24,479
Net increase (decrease) in cash 1,422 2,999 (141)
Cash and cash equivalents at
beginning of year 4,123 1,124 1,265
Cash and cash equivalents at
end of year $ 5,545 $ 4,123 $ 1,124
The accompanying notes are an integral part of these financial statements.
-20-
GIBRALTAR STEEL CORPORATION CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
(in thousands, except share data)
Additional
Common Shares Paid-in Retained
Shares Amount Capital Earnings
Balance at December 31, 1993 10,162,900 $ 102 $ 28,677 $ 22,808
Net income - - - 8,809
Balance at December 31, 1994 10,162,900 102 28,677 31,617
Net income - - - 9,722
Issuance of common shares
to profit sharing plan 11,000 - 126 -
Balance at December 31, 1995 10,173,900 102 28,803 41,339
Net income - - - 15,975
Public offering 2,050,000 20 34,370 -
Issuance of common shares
to profit sharing plan 11,000 - 184 -
Stock options exercised 87,500 1 950 -
Balance at December 31, 1996 12,322,400 $ 123 $ 64,307 $ 57,314
The accompanying notes are an integral part of these financial statements.
-21-
GIBRALTAR STEEL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The consolidated financial statements include the accounts
of Gibraltar Steel Corporation and subsidiaries (the
Company). Significant intercompany accounts and
transactions have been eliminated.
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the amounts
reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, checking
accounts and all highly liquid investments with a maturity
of three months or less.
Inventories
Inventories are valued at the lower of cost or market. Cost
is determined using the first-in, first-out method.
Property, Plant and Equipment
Property, plant and equipment are stated at cost and
depreciated over their estimated useful lives using the
straight-line method. Accelerated methods are used for
income tax purposes. The Company periodically evaluates the
recoverability of its property, plant and equipment.
Interest is capitalized in connection with construction of
qualified assets. Under this policy, interest of $522,000,
$683,000 and $361,000 was capitalized in 1996, 1995 and
1994, respectively.
Other Assets
Goodwill is amortized over 35 years.
-22-
Shareholders' Equity
During June 1996, the Company sold 2,050,000 common shares,
in a public offering, at $18 per share. The net proceeds of
approximately $34.4 million were used to repay existing bank
debt. In both December 1995 and July 1996, the Company
issued 11,000 of its common shares as a contribution to one
of its profit sharing plans.
Interest Rate Exchange Agreements
Interest rate swap agreements, which are used by the Company in
the management of interest rate risk, are accounted for on an
accrual basis. Amounts to be paid or received under interest
rate swap agreements are recognized as interest expense or
income in the periods in which they accrue. Swaps are not used
for trading purposes.
Income Taxes
The financial statements of the Company have been prepared
using the asset and liability approach in accounting for
income taxes which requires the recognition of deferred tax
assets and liabilities for the expected future tax
consequences of temporary differences between the carrying
amounts and the tax bases of other assets and liabilities.
Earnings Per Share
Net income per share is based upon the weighted average
number of shares outstanding during the year.
2. ACQUISITIONS
On April 3, 1995, the Company purchased all of the
outstanding capital stock of Wm. R. Hubbell Steel Company
(Hubbell) for an aggregate cash purchase price of $21
million. In addition, the Company repaid approximately $18
million of Hubbell's existing bank indebtedness.
On February 14, 1996, the Company purchased all of the
outstanding capital stock of Carolina Commercial Heat
Treating, Inc. (CCHT) for an aggregate cash purchase price
of approximately $25 million. The funding for the purchase
was provided by borrowings under the Company's existing
credit facility. CCHT, headquartered in Charlotte, North
Carolina, provides heat treating, brazing and related metal-
processing services to a broad range of industries,
including the automotive, hand tools, construction equipment
and industrial machinery industries.
These acquisitions have been accounted for using purchase
accounting with Hubbell and CCHT's results of operations
included from the respective acquisition dates. The purchase
price exceeded the fair market value of the net assets of
Hubbell and CCHT by approximately $10 million and $11
million, respectively.
-23-
The following pro forma information presents the condensed
results of operations of the Company as if the acquisitions
had occurred at the beginning of each period presented. The
pro forma amounts may not be indicative of the results that
would have actually been achieved and are not necessarily
indicative of future results.
(in thousands, except per share data)
Year Ended December 31,
1996 1995
(unaudited)
Net sales $345,219 $321,737
Income before taxes $ 26,521 $ 18,870
Net income $ 15,797 $ 11,074
Net income per share $ 1.40 $ 1.09
3. ACCOUNTS RECEIVABLE
Accounts receivable are expected to be collected within one
year and are net of reserves for doubtful accounts of
$698,000 and $491,000 for 1996 and 1995, respectively.
4. INVENTORIES
Inventories at December 31 consist of the following:
(in thousands)
1996 1995
Raw material $ 45,258 $ 28,307
Finished goods and work-in-process 17,093 16,967
Total inventories $ 62,351 $ 45,274
-24-
5. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment, at cost less accumulated
depreciation, at December 31 consists of the following:
(in thousands)
1996 1995
Land and land improvements $ 2,978 $ 2,776
Building and improvements 29,145 24,031
Machinery and equipment 78,018 60,267
Construction in progress 7,894 5,135
118,035 92,209
Less accumulated depreciation and
amortization 29,365 24,934
Total property, plant and equipment $ 88,670 $ 67,275
6. OTHER ASSETS
Other assets at December 31 consist of the following:
(in thousands)
1996 1995
Equity interest in partnership $ 3,292 $ 2,764
Goodwill, net 20,199 9,656
Other 820 733
Total other assets $ 24,311 $ 13,153
The Company's 26% partnership interest is accounted for
using the equity method of accounting. The partnership
provides a steel cleaning process called pickling to steel
mills and steel processors, including the Company.
-25-
7. DEBT
Long-term debt at December 31 consists of the following:
(in thousands)
1996 1995
Revolving credit notes payable $ 43,000 $ 51,000
Industrial Development Revenue Bond 6,190 7,333
Other debt 651 721
49,841 59,054
Less current maturities 1,218 1,214
Total long-term debt $ 48,623 $ 57,840
In December 1996, the Company extended the expiration date
to November 17, 2000 on its $125,000,000 revolving credit
facility, of which $82,000,000 was available on December 31,
1996. This credit facility has various interest rate
options which are no greater than the bank's prime rate and
may be converted by the Company to a four year amortizing
loan at any time prior to expiration. In addition, the
Company may enter into interest rate exchange agreements
(swaps) to manage interest costs and exposure to changing
interest rates. At December 31, 1996, the Company had one
interest rate swap agreement outstanding that effectively
converted $25,000,000 of floating rate debt to a fixed rate
of 6.34% with a termination date of November 20, 2000 or
2002 at the option of the financial institution. At
December 31, 1996, additional borrowings outstanding
consisted of $18,000,000 with an interest rate of LIBOR plus
a fixed rate. The weighted average interest rate of these
borrowings was 6.15% at December 31, 1996. Borrowings are
secured by accounts receivable, inventory, property, plant
and equipment and other assets of the Company.
In addition, the Company has an Industrial Development
Revenue Bond payable in equal installments through May 2002,
with an interest rate of LIBOR plus a fixed rate (6.05% at
December 31, 1996), which financed the cost of its Tennessee
expansion under a capital lease agreement. The cost of the
facility and equipment equal the amount of the bond and
includes accumulated amortization of $710,000. The
agreement provides for the purchase of the facility and
equipment at any time during the term of the lease at
scheduled amounts or at the end of the lease in 2002 for a
nominal amount.
The aggregate maturities on long-term debt including lease
purchase obligations for the five years following December
31, 1996 are as follows: 1997, $1,218,000; 1998, $1,224,000;
1999, $1,306,000; 2000, $2,054,000 and 2001, $11,909,000.
The Company had no amounts outstanding under short-term
borrowing for the year ended December 31, 1996 and 1995.
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.
-26-
Total cash paid for interest in the years ended December 31,
1996, 1995 and 1994 was $4,701,000, $4,715,000 and
$1,345,000, respectively.
8. LEASES
The Company leases certain facilities and equipment under
operating leases. Rent expense under operating leases for
the years ended December 31, 1996, 1995 and 1994 was
$2,358,000, $1,693,000 and $824,000, respectively. Future
minimum lease payments under these operating leases are
$2,230,000, $1,273,000, $999,000, $714,000 and $701,000 for
the years 1997, 1998, 1999, 2000 and 2001, respectively, and
$2,016,000 thereafter through 2038.
9. EMPLOYEE RETIREMENT PLANS
Non-union employees participate in various profit sharing
plans. Contributions to these plans are funded annually and
are based on a percentage of pretax income or amounts
determined by the Board of Directors.
Certain subsidiaries have multi-employer non-contributory
retirement plans providing for defined contributions to
union retirement funds.
A supplemental pension plan provides defined pension
benefits to certain salaried employees upon retirement. Net
unfunded periodic pension costs of $307,000 were accrued
under this plan since the inception of the plan and
consisted primarily of service cost using a discount rate of
7.5%.
Total expense for all plans was $1,066,000, $637,000 and
$699,000 for the years ended December 31, 1996, 1995 and
1994, respectively.
10. OTHER POST-RETIREMENT BENEFITS
The Company provides health and life insurance to
substantially all of its employees, and to a number of
retirees and their spouses from certain of its subsidiaries.
A summary of the components of the net periodic post-
retirement benefit cost charged to expense consists of the
following:
(in thousands)
1996 1995 1994
Service cost $ 76 $ 64 $ 53
Interest cost 109 98 72
Amortization of transition
obligations 52 45 45
Net periodic post-retirement
benefit cost $ 237 $ 207 $ 170
-27-
The approximate unfunded accumulated post-retirement benefit
obligation at December 31, consists of the following:
(in thousands)
1996 1995
Retirees $ 468 $ 476
Other fully eligible participants 200 181
Other active participants 943 684
$ 1,611 $ 1,341
The accumulated post-retirement benefit obligation was
determined using a weighted average discount rate of 7.5%.
The medical inflation rate was assumed to be 10% in 1996,
with a gradual reduction to 5% over five years. The effect
of a 1% annual increase in the medical inflation rate would
increase the accumulated post-retirement benefit obligation
by approximately $286,000 and $217,000 and the annual
service and interest costs by approximately $37,000 and
$31,000 for 1996 and 1995, respectively.
One of the Company's subsidiaries also provides post-
retirement health care benefits to its unionized employees
through contributions to a multi-employer health care plan.
11. INCOME TAXES
The provision for income taxes consists of the following:
(in thousands)
1996 1995 1994
Current tax expense
Federal $ 8,774 $ 5,611 $ 4,275
State 1,267 833 1,045
Total current 10,041 6,444 5,320
Deferred tax expense
Federal 670 198 740
State 104 20 (64)
Total deferred 774 218 676
Total provision $ 10,815 $ 6,662 $ 5,996
-28-
Deferred tax liabilities (assets) at December 31, consist of
the following:
(in thousands)
1996 1995
Depreciation $ 9,026 $ 7,560
Inventory method change 1,752 1,989
Other 1,034 1,168
Gross deferred tax liabilities 11,812 10,717
State taxes (528) (450)
Other (1,187) (962)
Gross deferred tax assets (1,715) (1,412)
Net deferred tax liabilities $ 10,097 $ 9,305
The provision for income taxes differs from the amount of
income tax determined by applying the applicable U.S.
statutory federal income tax rate to pretax income from
continuing operations as a result of the following
differences:
(in thousands)
1996 1995 1994
Statutory U.S. tax rates $ 9,376 $ 5,734 $ 5,182
Increase (decrease) in rates
resulting from:
State and local taxes, net 891 554 638
Other 548 374 176
$ 10,815 $ 6,662 $ 5,996
Total cash paid for income taxes in the years ended December
31, 1996, 1995 and 1994 was $9,639,000, $6,250,000 and
$6,100,000, respectively.
12. COMMITMENTS AND CONTINGENCIES
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 is not
clearly determinable at the present time, would
significantly affect the Company's financial condition or
results of operations.
-29-
13. STOCK OPTIONS
The Company applies APB Opinion 25 and related
Interpretations in accounting for its stock option plans.
Accordingly, no compensation cost has been recognized for
its non-qualified stock option plan and its incentive stock
option plan as stock options granted under these plans have
an exercise price equal to 100% of the market price on the
date of grant. No compensation cost has been charged
against income for its restricted stock plan as no awards
have been granted under this plan. If the compensation cost
for these plans had been determined based on the fair value
at the grant dates for awards consistent with the method of
FASB Statement 123, there would have been no effect on the
Company's net income and earnings per share in 1995. The
pro forma effect for 1996 is indicated below:
Net Income Net Income Per Share
As reported $15,975 $1.42
Pro forma $15,890 $1.41
Non-Qualified Stock Option Plan:
The Company's Non-Qualified Stock Option Plan provides
grants to officers, employees, non-employee directors and
advisers to acquire an aggregate of 400,000 common shares at
an exercise price equal to 100% of the market price on the
date of grant. The options may be exercised in cumulative
annual increments of 25% commencing one year from the date
of grant and expire ten years from date of grant.
There were 200,000 shares granted which were outstanding as
of December 31, 1996 and 1995 under the Company's Non-
Qualified Stock Option Plan, with a weighted-average
exercise price of $10.75. The Company did not grant options
under the plan in either 1996 or 1995. As of December 31,
1996 and 1995, 137,500 shares and 87,500 shares were
exercisable, respectively. The 200,000 shares outstanding
at December 31, 1996 have a weighted-average remaining
contractual life of 7.3 years.
Incentive Stock Option Plan:
The Company's Incentive Stock Option Plan provides grants to
officers and other key employees to acquire an aggregate of
600,000 common shares at an exercise price of not less than
100% of the market price on the date of grant. The options
may be exercised in cumulative annual increments of 25%
commencing one year from the date of grant and expire ten
years from date of grant.
The fair value of each option granted in 1996 and 1995 was
estimated on the date of grant using the Black-Scholes
option-pricing model with the following assumptions for 1996
and 1995, respectively; risk-free interest rates of 6.64
and 5.70 percent; dividend yield of 0 percent for both
years; expected lives of 5 years for both years; and
volatility of 38 and 36 percent. The weighted average fair
value of options granted during 1996 and 1995 were $7.44 and
$4.56, respectively.
-30-
A summary of the status of the Company's Incentive Stock
Plan as of December 31, 1996 and 1995, and changes during
the years ending on those dates is presented below:
1996 1995
Options Weighted- Options Weighted-
Outstanding Average Outstanding Average
Exercise Exercise
Price Price
Beginning of year 270,000 $ 10.81 197,500 $ 10.72
Granted 173,750 16.75 75,000 11.00
Exercised (87,500) 10.87 - -
Forfeited - - (2,500) 10.00
End of year 356,250 $ 13.69 270,000 $ 10.81
Options exercisable
at year-end 64,375 $ 10.77 84,375 $ 10.84
The following table summarizes information about Incentive
Stock Options outstanding at December 31, 1996:
Options Outstanding Options Exercisable
Range of Number Weighted- Weighted- Number Weighted-
Exercise Outstanding Average Average Exercisable Average
Prices at 12/31/96 Remaining Exercise at 12/31/96 Exercise
Contractual Price Price
Life
$10 - $11 182,500 8.0 years $ 10.77 64,375 $ 10.77
$16.75 173,750 9.5 years 16.75 - -
356,250 8.7 years $ 13.69 64,375 $ 10.77
Restricted Stock Plan:
The Company's Restricted Stock Plan reserved for issuance
100,000 common shares for the grant of restricted stock
awards to employees at a purchase price of $.01 per share.
No awards have been granted under this plan.
-31-
QUARTERLY UNAUDITED FINANCIAL DATA
(in thousands, except per share data)
1996 Quarter Ended March 31 June 30 Sept. 30 Dec. 31
Net Sales $82,034 $86,476 $87,994 $86,470
Gross Profit 14,029 15,867 15,979 15,382
Net Income 3,334 4,155 4,414 4,072
Net Income Per Share $ .33 $ .40 $ .36 $ .33
1995 Quarter Ended March 31 June 30 Sept. 30 Dec. 31
Net Sales $58,765 $76,337 $74,691 $73,040
Gross Profit 10,186 11,240 10,019 11,018
Net Income 2,677 2,804 2,002 2,239
Net Income Per Share $ .26 $ .28 $ .20 $ .22
-32-
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
None.
PART III
Item 10. Directors and Executive Officers of the Registrant
Information regarding directors and executive officers of the
Company 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 1996 fiscal year.
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
1996 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 1996 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 1996 fiscal year.
-33-
PART IV
Item 14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K
(a) (1) Financial Statements: Page Number
Report of Independent Accountants 17
Consolidated Balance Sheets at
December 31, 1996 and 1995 18
Consolidated Statements of Income
for the three years
ended December 31, 1996 19
Consolidated Statements of Cash Flows
for the three years ended
December 31, 1996 20
Consolidated Statements of Shareholders'
Equity for the three years ended
December 31, 1996 21
Notes to Consolidated Financial
Statements 22
(2) Supplementary Data
Quarterly Unaudited Financial Data 32
(3) Exhibits
The exhibits to this Annual Report on Form 10-K
included herein are set forth on the
attached Exhibit Index beginning on page 36.
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company
during the three month period ended
December 31, 1996.
-34-
SIGNATURES
Pursuant to the requirement of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
GIBRALTAR STEEL CORPORATION
By /x/ Brian J. Lipke
Brian J. Lipke
President, Chief Executive Officer
and Chairman of the Board
In accordance with the Securities 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.
/x/ Brian J. Lipke President, Chief Executive Officer
Brian J. Lipke and Chairman of the Board January 24, 1997
/x/ Walter T. Erazmus Treasurer and Chief Financial Officer
Walter T. Erazmus (principal accounting officer) January 24, 1997
/x/ Neil E. Lipke Director
Neil E. Lipke January 24, 1997
/x/ Gerald S. Lippes Director
Gerald S. Lippes January 24, 1997
/x/ Arthur A. Russ, Jr. Director
Arthur A. Russ, Jr. January 24, 1997
/x/ David N. Campbell Director
David N. Campbell January 24, 1997
/x/ William P. Montague Director
William P. Montague January 24, 1997
-35-
Exhibit Index
Exhibit Sequentially
Number 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))
3.2 By-Laws of the Registrant (incorporated by
reference to the same exhibit number to the
Company's Registration Statement on Form S-1
(Registration No. 33-69304))
4.1 Specimen Common Share Certificate (incorporated
by reference to the same exhibit number to the
Company's Registration Statement on Form S-1
(Registration No. 33-69304))
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 December 1, 1987 between American Steel
and Wire Corporation as Lessor and Gibraltar Strip
Steel, Inc., as Lessee, and related Service
Agreement as amended by an Amendment to Lease and
Amendment to Service Agreement dated February 1,
1992 (incorporated by reference to Exhibit 10.11
to the Company's Registration Statement on Form S-1
(Registration No. 33-69304))
10.4 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))
10.5 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))
-36-
Exhibit Sequentially
Number Numbered Page
10.6* Employment Agreement dated as of November 1, 1993
between the Registrant and Brian J. Lipke
(incorporated by reference to Exhibit 10.15 to
the Company's Registration Statement on Form S-1
(Registration No. 33-69304))
10.7 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))
10.8 Agreement dated June 29, 1992 for Adoption by
Gibraltar Steel Corporation of Chase Lincoln
First Bank, N.A. (now Chase Manhattan Bank, N.A.)
Non-Standardized Prototype 401(k) Retirement
Savings Plan (incorporated by reference to Exhibit
10.17 to the Company's Registration Statement on
Form S-1(Registration No. 33-69304))
10.9* Gibraltar Steel Corporation Incentive Stock Option
Plan (incorporated by reference to Exhibit 10.18
to the Company's Registration Statement on Form
S-1(Registration No. 33-69304))
10.10* Gibraltar Steel Corporation Incentive Stock Option
Plan, Second Amendment and Restatement (incorporated
by reference to Exhibit 10.16 to the Company's
Registration Statement on Form S-1 (Registration
No. 333-03979))
10.11* Gibraltar Steel Corporation Restricted Stock Plan
(incorporated by reference to Exhibit 10.19 to the
Company's Registration Statement on Form S-1
(Registration No. 33-69304))
10.12* Gibraltar Steel Corporation Non-Qualified Stock
Option (incorporated by reference to Exhibit 10.20
to the Company's Registration Statement on Form S-1
(Registration No. 33-69304))
10.13* Gibraltar Steel Corporation 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))
10.14* Gibraltar Steel Corporation 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))
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Exhibit Sequentially
Number Numbered Page
10.15 Tax Indemnification Agreement dated as of
November 5, 1993 among the Registrant, Brian
J. Lipke, Curtis W. Lipke, Neil B. Lipke, Eric
R. Lipke, Meredith A. Lipke, Bonneville Trust
of December 31, 1987 f/b/o Brian J. Lipke,
Corvette Trust of December 31, 1987 f/b/o
Curtis W. Lipke, Nova Trust of December 31,
1987 f/b/o Neil E. Lipke, Electra Trust of
December 31, 1987 f/b/o/ Eric R. Lipke, Monza
Trust of January 22, 1988 f/b/o Meredith A.
Lipke, Bonneville Trust No. 2 of August 15,
1988 f/b/o Brian J. Lipke, Corvette Trust No.
2 of August 15, 1988 f/b/o Curtis W. Lipke,
Nova Trust No. 2 of August 15, 1988 f/b/o Neil
E. Lipke, Electra Trust No. 2 of August 15,
1988 f/b/o Eric R. Lipke, Monza Trust No. 2
of February 15, 1988 f/b/o Meredith A. Lipke
(incorporated by reference to Exhibit 10.22 to
the Company's Annual Report on Form 10-K for
the year ended December 31, 1993)
10.16 Agreement and Plan of Exchange and Reorganization
dated October 31, 1993 among the Registrant,
Estate of Kenneth E. Lipke, Bonneville Trust of
December 31, 1987 f/b/o Brian J. Lipke, Corvette
Trust of December 31, 1987 f/b/o Curtis W. Lipke,
Nova Trust of December 31, 1987 f/b/o Neil E.
Lipke, Electra Trust of December 31, 1987 f/b/o
Eric R. Lipke, Monza Trust of January 22, 1988 f/b/o
Meredith A. Lipke, Bonneville Trust No. 2 of
August 15, 1988 f/b/o Brian J. Lipke, Corvette
Trust No. 2 of August 15, 1988 f/b/o Curtis W.
Lipke, Nova Trust No. 2 of August 15, 1988 f/b/o
Neil E. Lipke, Electra Trust No. 2 of August 15,
1988 f/b/o Eric R. Lipke, Monza Trust No. 2 of
February 15, 1988 f/b/o Meredith A. Lipke
(incorporated by reference to Exhibit 10.23 to
the Company's Annual Report on Form 10-K for the
year ended December 31, 1993)
10.17 Credit Agreement dated as of November 10, 1994
among Gibraltar Steel Corporation, Gibraltar
Steel Corporation of New York, Chase Manhattan
Bank, N.A., as Administrative Agent and various
financial institutions that are signatories
thereto (incorporated by reference to Exhibit
10.1 to the Company's Current report on Form 8-K
dated November 14, 1994)
10.18 Amendment Agreement, dated December 28, 1995, to
Credit Agreement among Gibraltar Steel Corporation,
Gibraltar Steel Corporation of New York, Chase
Manhattan Bank, N.A., as Administrative Agent and
various financial institutions that are signatories
thereto (incorporated by reference to Exhibit 10.32
to the Company's Annual Report on Form 10-K for the
year ended December 31, 1995)
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Exhibit Sequentially
Number Numbered Page
10.19 Amendment Agreement dated as of December 19, 41
1996 among Gibraltar Steel Corporation,
Gibraltar Steel Corporation of New York, The
Chase Manhattan Bank, Fleet Bank, Mellon Bank,
N.A. and The Chase Manhattan Bank, as
Administrative Agent
10.20 Bond Purchase Agreement dated June 16, 1994
among the Industrial Development Board of the
County of Hamilton, Tennessee, Fleet Bank of
New York and Gibraltar Steel of Tennessee
(incorporated by reference to Exhibit 10.10 to
the Company's Registration Statement on Form S-1
(Registration No. 333-03979))
10.21* Gibraltar Steel Corporation 401(k) Plan
(incorporated by reference to Exhibit 4.1 to the
Company's Registration Statement on Form S-8
(No. 33-87034))
10.22* First Amendment, dated January 20, 1995, to
Gibraltar Steel Corporation 40l(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)
10.23 Agreement dated April 24, 1994 between Gibraltar
Metals Division and International Union, United
Automobile, Aerospace and Agricultural Implement
Workers of America (UAW) and its Amalgamated
Local No. 55 (incorporated by reference to
Exhibit 10.26 to the Company's Annual Report on
Form 10-K for the year ended December 31, 1994)
10.24 Agreement dated July 31, 1996 between Gibraltar 50
Strip and Strapping Division and the International
Union, United Automobile, Aerospace and
Agricultural Implement Workers of America (UAW)
and its Amalgamated Local No. 55
10.25 Lease dated January 11, 1996 between Turn Key
Warehousing, Inc., as Lessor and Gibraltar Metals,
a division of Gibraltar Steel Corporation of New
York, as Lessee (incorporated by reference to
Exhibit 10.21 to the Company's Registration
Statement on Form S-1 (Registration No. 333-03979))
10.26 Stock Purchase Agreement dated as of April 3, 1995
among Gibraltar Steel Corporation of New York,
Albert Fruman, Marshall Fruman, Lee Fruman, Dale
Fruman and William R. Hubbell Trust U/A dated July
20, 1990 (incorporated by reference to Exhibit 10.1
to the Company's Current Report on Form 8-K dated
April 3, 1995)
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Exhibit Sequentially
Number Numbered Page
10.27 Lease dated November 2, 1992 between MGI Properties
and Mill Transportation Company, as modified by
Lease Extension and Modification Agreement dated
as of July 24, 1995 between MGI Holdings, Inc.
and Mill Transportation Company (incorporated by
reference to Exhibit 10.24 to the Company's
Registration Statement on Form S-1 (Registration
No. 333-03979))
10.28 Real Property Lease Agreement dated February 14,
1996 between Blacksmith Leasing and Carolina
Commercial Heat Treating, Inc.(incorporated by
reference to Exhibit 10.25 to the Company's
Registration Statement on Form S-1 (Registration
No. 333-03979))
10.29 Real Property Lease Agreement dated February 14,
1996 between Blacksmith Leasing and Carolina
Commercial Heat Treating, Inc. (incorporated by
reference to Exhibit 10.26 to the Company's
Registration Statement on Form S-1 (Registration
No. 333-03979))
10.30 Lease dated as of August 12, 1995 between John W.
Rex and Carolina Commercial Heat Treating, Inc.
(incorporated by reference to Exhibit 10.27 to
the Company's Registration Statement on Form S-1
(Registration No. 333-03979))
21 Subsidiaries of the Registrant (incorporated by
reference to Exhibit 21 to the Company's
Registration Statement on Form S-1 (Registration
No. 333-03979))
________________________________
* Document is a management contract or compensatory
plan or arrangement
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