ROCK - Earnings call transcript Q2 2018 | Gibraltar Industries, Inc.

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Operator

Good day, ladies and gentlemen. And welcome to the Gibraltar Industries' first quarter 2018 earnings conference call. Today's call is being recorded and webcasted. My name is Dana and I will be your coordinator today. At this time, all participants will be in a listen-only mode.

a towards conducting the end be call. conference will question-and-answer the session of We turn over Associates. the from now will I call Investor firm, the to Relations Sharon Merrill company's Calusdian David Please proceed.

David Calusdian

for Good everyone, and you morning, joining thank us.

you the earnings release the Gibraltar you find website, that copy Investor the morning, press it this gibraltarX.com. have in not issued Info If a can of received was section of

results These company's in slides financial to referring results in prepared are these to company's will actual presentation by contain second also remarks quarter results. you press from forward-looking summarize company's that may slide The statements. forward-looking the the future through performance. During Gibraltar to the presentation earnings filings, be read SEC the The be also detailed turn or performance posted factors expressed accessed and the company's the today, risk the advises implied materially slides about can Please slide release statements or which company's management to its website. presentation. two differ anticipated events, website.

And release On earnings morning Gibraltar's financial appended I'll and Chief and measures Murphy. Chief three. this the the Officer, Tim been At this and adjusted financial morning press point, this slide turn turn measures. to Reconciliations have Gibraltar's Additionally, over to release Frank Heard, earnings adjusted our please contain Frank. call of slides. GAAP remarks Executive to are Financial Officer, to call

Frank Heard

financial and the quarter call We in today. David. thank second for our on strong delivered executed Good you Thanks, morning, joining everyone, us and well results.

growth in four-pillar strategy advancing benefit from our made and continue our excellent to progress initiatives. organic We

higher year metrics range. and our million X% adjusted year-over-year Both end range. prior earnings earnings than $X.XX were XX% exceeded at were revenues GAAP higher and our $XXX XX% year-over-year. at quarter $X.XX second of of of were Our higher guidance up the guidance

progress tariffs cost volatility have increase and to Through end collaborative by our with a a these Renewable about respective increases, then material by & date by able customers Residential and X% and progress in Products. segments Conservation sales operational were of to to quarter, on & each actions, we one will working pillars. a our forward. Energy XX/XX segment, the increases created on are segment, segment. XX% markets. raw opportunities aluminum speak to discuss in meaningful with partnership competitive excellence X% business efforts our recovered second we by grow managed our customers price steel we cost Industrial our For in in material and and increase return our and while Infrastructure improve their made in From increase achieved an more in Tim significant there market more share our continue We've in perspective, our strategic going detail remain the I'll market to

use to now focus at continue of efficient of make new that, strategic it organic capital. is Through deliver on to to growth Tim. a Our on promise more driving return with effort, turn we'll product through money rate I'll our this higher With development. over more sustainable

Tim Murphy

Thank good and everyone. you, Frank, morning,

of guidance move range. We adjusted Results. second at Consolidated excellent presentation quarter Let's in slide and an higher the above our with entitled four earnings to delivered the end revenues and Solid guidance GAAP

innovative volume cost. Our in price to the our growth, announced demand X% and across aluminum tariffs revenue segments. material The year-over-year in by year products impact steel for recovery increase strong earlier continued and was driven

through the with Frank customers price as changes, cost allocate to mentioned, commodity proactive cost through work fairly we higher However, recovered increases.

to and prices. work will cost customers due to continue cost material we issues in with volatility to continued expect we our ahead, with Looking tariff-related align

million & that per products, Energy tax our initiatives in XX/XX benefits, earnings continue bottom vesting a our and $X.X and line, of benefit price innovative a during of shares Conservation simplification share cost segments, provide $X.XX material of related benefited XXXX. Industrial effective from significant performance-based or to improvements issued higher-margin to the the earning & consolidated greater Renewable On management, Infrastructure mix

expected, our reflected expenses performance-based As million corporate more of normal $X levels. compensation

review let's our with reporting three segments Residential the Now, starting of Products slide segment. each five,

Our top prices. X% to year-over-year increased grew line selling results mainly due

for line, On and XX/XX the effective resulting bottom from efficiencies management, improvements material price reflect favorable operating margin the mix segment initiatives. cost

by segment, revenue perimeter slide including to demand innovative & Industrial increased products selling the solutions Turning driven prices. solid industrial for growth six, Products products, security Infrastructure was for and

than benefit reflecting portfolio from of and management, growth. management material operating products has segment margins simplification XX/XX in the income this line, and doubled, bottom cost initiatives. innovative effective operational improvements towards growth corner actions, price the turned After years more continued On and three

We success innovative rest through profitability the of enhance expect management, cost year. material initiatives the and XX/XX continued our segment's the products to the of

demand domestic and Now, the and is XX% in seven, to Renewable for Renewable solution turning the & drove businesses new in Conservation revenues the Energy quarter slide traction. Conservation gaining our segment. increase tracker both Strong solar the

margin XX/XX the of initiatives. and higher-margin simplification line, result mix improvement bottom the On product was benefits from

US, new a The has cost-effective panels. the encouraged become which the the of for report of report strong market community solar The Solar resilient we for on Energy it that long-term tariffs is the Looking growth businesses. highlights by much Conservation both latest US market serve imported to prospects and solar solar making Energy report solar, demand energy option Industry we're the market the ahead, Renewable from Association

the XXXX for foreseeable a growth a American North and next ten the our The billion market. portend report estimates far, the $X in has growth Conservation $XX Separately, fact, industry The grow will pricing that, driver the $XX years, from to the over worldwide. of front, grow to In found the Market quarter of system specifically future. is by first the Research for Conservation cannabis XXXX, cannabis market business in numbers billion market that, legal Arcview declined recent XXXX. been report on expected strong in billion to non-residential these thus strong in

So, segment continued Please for to long-term positive turn Capturing outlook overall. the eight, slide this Opportunity.

strong from seasonal With high our acquisition of growth the us over primarily low leverage quarter, to earnings, at quarter, cash positions and strategy. us we end just capital. our by available from During generated operations, the execute of our $XXX working and liquidity million offset million $XX on partially to the

slide smaller be to We continue up can a will that Driving million progress Value I'll guidance turn will that although our focused strategy X-pillar us from Creation. Four standpoint. EBITDA $XXX point, acquisitions turn we our technology At on it for to nine, this Pillars to our be on Frank? of Frank quarter. and million $XX Please the with targets to who'll review back consider benefit material the to performance,

Frank Heard

a of and transformation and four-pillar an management. Thank through initiatives you, began In we organization. two operational years reduced adjusting important When portfolio of simplifying operational XX/XX our our the work of first our the ago, the little on three product than executing offering excellence, complexity excellence the across more we Tim. pillars focused part our costs strategy on businesses,

and margin benefits been enhance While the our the operations incremental these continue we realized, lion's share improvements. of efforts have to drive from

of advanced we beat replenishment demand and the During outsourcing and the of the continued initiatives quarter, our market businesses. [ph] rate products across in-lining

best this evaluated product the the markets projects benefits platforms allocate from management, into realize customers these to of We and expect lines, highest and and further half latter leadership to we resources in business. and year XXXX. to time potential portfolio In

innovation. on a focused with limited portfolio that growth We're target markets firmly significantly product is risk. now where for a sustainable in we with built of As greater work result, business downside end much our third-pillar a our potential have around growth

and is focus develop to drive the XXXX. already X% products our through quarter to material internally XXXX of with our teams protection, use of acquired or patent marketing here some are products, as progress products engineering, innovative lines. and revenues core techniques our competencies We've Across during advanced selling X% to through from leveraging organic businesses, Our here X% developed manufacturing to in installation. growth sustainable trade-focused and beginning innovative in product made

teams which new and focused parcel should opportunities driving security accelerate solar In are addition electronic several solutions, on to the continue tracker currently XXXX market in efforts perimeter growth, locker, are these our beyond. and to that

technology-based in shifting success products through After having trade-focused tied operation from to with management to away capabilities solid tangible is implementing expanding strategies to industrial Gibraltar's team Our portfolio now and we're business actions, higher-margin markets. develop platform its of existing commodities-based early And the a its to transformation. is organic opportunities. as example use business higher-margin a a and XX/XX new result, business growth sustainable simplifying a

next several you to initiatives across the quarters, our Over continue businesses. innovation on update additional to we expect

of Finally, important through Gibraltar's which our acquisitions, pillars four transformation. an is part growth

the it's value to process. are Our acquisition to Nexus end right energy its executive to contribute three All in and the will only making of great examples that we We prospecting value Concierge team Gibraltar RBI, of vetting continues and committed an unique if invest look to and one remain serve long-term markets type acquire. propositions. with shareholders. attractive Package and companies time

our building guidance. postal across to us slide infrastructure, markets Renewable driving turn year. keep about solutions, perimeter parcel residential Conservation. of all target optimistic products, to Our XXXX & growth the continue second Please segments for be security, Energy projects organic and The XX the half innovation

market impact volatility demand. the related about activity global effects we're general and the tariffs cautious pressures However, the consumer the of competitive to and domestic and on and

development development sales initiatives. we per EPS of execute we're $X.XX higher $X.XX In addition, costs $X.XX and excess product Thus, share basis. adjusted expect an between maintaining our $X we $X.XX or between in to guidance new on on of our billion, GAAP full-year as diluted

to implement XXXX attractive to acceleration acquisitions through Our value-added continue simplification product of seek to and projects of the new drive half growth to initiatives, be development goals markets. for end sustainable second in organic XX/XX the

between on transformation per quarter an on in between $X.XX $X.XX. ago, we million, $X.XX and we focusing and million XXXX. third excellence. a operational $XXX up the we diluted began QX revenues expect share earnings expect management expect cultural consolidated and For GAAP We efforts and over at from $X.XX $XXX million EPS basis, years Gibraltar our share. three adjusted XXXX, portfolio And between per of And $XXX

structure to has effectively including and variety Our tariffs, and our enabled line. solar tariffs grow steel to and aluminum dynamics, a we've line panel manage ITC, through the and top of simplified continued the market bottom us recent

organic with key growth more on efforts. we'll development, point, our I'd and our Gibraltar of up at use all across sustainable new for of this We from return ongoing portfolio our promise that the across for higher for through their the and shareholders. on close, value product now continue shareholders we're questions money like to open team of And culture, and with rate new you. delivering our to operational you long-term businesses focused all their efficient to initiatives continued At business, transformative for creation excellence may our benefit have. a more segments. levels management driving and make to adapting We're taking continued support. To any thank this call for customers Thank it to capital

Operator

Thank you. [Operator Instructions].

Our proceed first question. Moore from Daniel from comes the line of with CJS your Securities. Please question

Daniel Moore

Good Good Tim. morning, Frank. morning,

Frank Heard

Good Dan. morning,

Tim Murphy

Dan. morning, Good

Daniel Moore

Revenue to you a obviously. bucket Can that price/volume nice of start quantify impact growth, consider and new between maybe innovative acceleration what Nice plus. perhaps the X% you products?

Tim Murphy

bit so it's price little for that's at volume. In million quarter, products in If the a I think there. $XX about we're innovative, of price/volume, innovative than more

Daniel Moore

I it not. Got of be, up And on it. year-over-year? guess, Take much – a that if offline, how

Tim Murphy

back Let me that answer. to get

Daniel Moore

front, input That's margin ton the perfectly a costs. obviously, been rising tariffs, talk fine. of there's on about And

impact, if the What prices you You aluminum? year-over-year we see any, for well. managed back type today, through are margins that on what where would expect steel did impact extremely stayed And and half? rising if from of you

Tim Murphy

with it, I material to I not what costs well then, the look for of if year, predict. So, it stable, And even because the margins. we we're at think, stays maintain rest overall, positioned that's don't

material there I'd in if at work results. cost positioned all, and was So, on. is tomorrow what changes similar well expect I We're think to no pretty date from recovery we move what

Frank Heard

our And based we're accurate now pretty Dan, that of costs, relative guidance to on to input Yes, an whole raw that's I We circumstances. statement. feel future that, relative set material our current is pricing. think

in down, prices go them if accordingly we adjust to actions with will they back partnership up, to our So, customers. forward. proportionally then, obviously, take going If give go we'll

material over above we're any to So, or we trying today. raw where a or not in drop acceleration predict and are guide inputs

Daniel Moore

of the that then, kind can me, you in in sense lastly Can but the a have development product improvement given what really that, Thanks. give second you the of that And And it's type a us little first from at it saw half? more helpful. embedded specific costs. you year-over-year half called separate question, in XX/XX the that I a of That's you've know out bit the projects call out, strong leave specificity the for uplift year? of and us any we I'll benefited margins, give guidance

Frank Heard

take Maybe first question and then I'll the Tim can first Yeah. one. second the answer

forward, like I went momentum think initiatives of perimeter would going – in issues different that expect and of And up would current still to to beginning material We're starting finalize crawl, walk, forecast. process, security. we run are terms terms types to on X% the We in to in of tracker material expect around the being the things into And of in new in and the they're the spaces to portfolio. argue from the all perspective the continue of not continue. they we the electronic locker space, be those thoughtful continue but a we the mention, that we our make some initiative. impact built some are development of overall year, around costs the guidance. starting guidance relative and to new of enough and of And progress I

Daniel Moore

offline. take furthers I'll Very any helpful.

Frank Heard

Thank you.

Operator

comes Seaport question of next your question. from proceed Global. with Walter Please Liptak Our the from line

Walter Liptak

morning, guys. Good

Frank Heard

morning, you? Walter. How Good are

Walter Liptak

Great. nice for Thanks quarter. a really

wonder, frame, the go to by that wanted maybe second just a to be could out the the follow-up didn't take the like you in just more thing that… that it's I going last you up quarter, So, I amount development dollar heard that higher And a – different that a quantify maybe in guidance. put lot numbers cost. only you And the but you up? Is is beat worrisome on question. I might called

Frank Heard

the And that get a our call the don't the doorstep demand, to but are is, operating market then who price quarter risk recover the of those operating volatility of days half year, I I'm the if that, benefit like the increases pricing to and the most we volatility that costs. we've cycle the of of itself the much in going of trying current into tariffs cost and impact we out proposed think there the all hand, got for if a transforms calendar the back XX the get increases affect potentially volatility profitability which in existing that's in number on of the in of them do marketplace we direct to the the if tariffs most do first in, easier did the terms and inside that We've as year. market year get as one XXX that got they to let unknown on have the year. input, current in are costs we on than business. and continued steel And potential takes Tim new in a well, even flowing on important and is to businesses end place we've probably costs, on us, and think managed a could one, us, and on additional our aluminum –

think in So, in probably of unknown, like that is guidance. most corporations terms there our risk biggest our current I out

costs, I would future minor overall the relative nature think say, compared to in risk development I of are the guidance.

are. we more any feel don't if quite – confident we see where So, we

Walter Liptak

Okay.

market I some pushed guess the was So, you're growth it the prices residential projects the slowing, most you out attributing flatness and that the that demand from the consumers? sounds like material higher business did you came that Are market to that? the to from getting see comment of of about price. by end alluding in flat,

Tim Murphy

that's really roofing what at the a think, little certainly look seeing, area saw business the the residential growing, because we to if you not volume really related where it's I Well, we're industry.

and when of the quarter cold more two-thirds down rain And was the and weren't the and first weather-related we was replaced that So, a ventilation, in that trends flashing replaced. first roofers it the roof business we country and management, is quarter, on thought that in is get the jobs. saw area

and and this market industry, storms our even, related to other hearing As is the repair we seeing is that both shingle demand from ARMA and went quarter, customers for various through end we're what expected manufacturers really And this that were think didn't damage demand. into And to that's I related year. repeat – be there hailstorms carried storm XXXX. in to XXXX, that what the itself in off XXXX's is, didn't

I be So, it's digits. of is mid-single That think market the segment to off. expected

the continues Industrial other been bit, we get the business, growth of and, end depending So, normal business that if out Infrastructure little on down with year. we good date, business the third up Conservation bit good. we to Renewables volumes to obviously, & a and flat for take where the a little to down look levels, have

if market-based on any think volume with side. I the issue, there's it's a just concern us, share activity, it's but roofing not it's So,

Walter Liptak

Okay. Got it.

Okay. great this quarter. can little a go if profits industrial bit And in then, job you a more I guys did detail. you wonder with the

the the really think, products pretty a for there in looks you being about popped after profitability. What I industrial it profits release, the press talked helping those about stagnant happened year? in because new like

Tim Murphy

also No, about margin enhancement give with give the things. I'd it's going then from and in to I if innovative And products say, innovative from XX/XX product quarter, take, this XX/XX and the the contribution probably two-thirds, one-third cost-outs And material it's to innovative there. product split I'd from or price cost XX/XX. products to were mix think I really it, material. alignment price the It's simplification. It's the three

Walter Liptak

level this of something can and think sustainable. in right. those year like of back continue mentioned, you sounds Do profitability to as through, the flow that – that's factors Okay. All the you half is

Frank Heard

Yeah.

on that selling was and innovation perimeter working years was around of allowed XX% space, been off product scale we piece, the bar to in reduced I has overall, businesses in platform gets That's move group that, and as through base we just out industrial that because play to faster. and whole has we to it's European of starting where, and Walt, sold that value-added, get grating product, install with pretty the a ability us security – strongly different traction of back lot three direct a piece, we to an quicker feel businesses about, cases, the ago a pretty some and our within which which in type mix what's focus. think developer to That you have, smaller as better the similar the well. is the more byproduct area know, needle the of on to what project more more differently, greatly basis is, of get as combined it which commoditized a

than to margin have So and their some some that, other And is quite ranges. that costs mixing continue XX/XX we enhance. then, initiatives in simplified the profile out the to have different business product taken

last Two track So, expect events value and shows months, turned of and to customers real attended we are a the can we over represent believe, year. end starting of And a resulting in pattern is six it a different products feel around the to confident I've the record users with we've yet, quarters I continue and of and a with grow. balance revenue quite lot the those the and types that gains we see evidence the some corner. not in but

Walter Liptak

great. sounds That

congratulations Okay. you. Thank Well, guys. again,

Operator

KeyBanc. line from comes question Zener Our with of proceed the question. from your next Please Ken

Ken Zener

Good morning, gentlemen.

Frank Heard

you? are morning, Good How Ken.

Ken Zener

almost your guidance, in guys that is across held two-thirds through steel my So, Frank, may product to costs printing this, guidance I the if comment, It basis your tariffs, costs pressure were guys your given including the being assuming current be of of you company recover you you guidance? would are from unsure guidance margins despite be your COGS. results, despite for is in question being other impact Amazing! sounds Could heard right? that coming understanding tariffs And higher just to hold costs, the XQ's you of order your you your margin actually weighting, businesses my half. every aware the Therefore, harder you're the back facing You're second clear all building – staying you're are may incremental answer, same? is your like your how costs. cost incremental and is sounds like to persist half, in conservative firm. It are

Frank Heard

probably, range versus that for say stabilize reason. I getting would Ken, a up that we maybe something think, the our lot could things if we the range I in saw detail, without argue a And middle. have end higher one into at maybe a we'd of end of

we roll-ups what suggest we've range – today guidance So, reflective know. is got of that, have that we outside our of would the

Ken Zener

Okay, that's important.

that less which the tariffs, moving reflective to know, of your, is are So, et current guidance is the more last guess, around, structure cost month I cetera. as what commodity you or of the tied relative to costs

Frank Heard

yes. assumption, fair a That's

Ken Zener

Okay, impressive. to good. price misunderstand sure shrinking related said you Two-thirds the there I your because wanted to margin I to all was price realization. Industrial, didn't was of so make two-thirds results the just Tim, you are over. related is gain.

if you going to saying, Is want product it's I Tim? say this So, A, of much. what you hear that cost pricing, you when part XX/XX, you're basically guys

Tim Murphy

I'll too. I mean, yes. qualify And that

quarter of line. piece So, last grating business, if that we first recall, disposed the year, in bar of the you biggest

people be out last year off things managing talked a that. that some team went it about that towards the of we half you like distraction from major the half in the would was it eye business and the door. their And a the half and normal business there of caused So, back of

and us, where And of hurt some customers certain we're would commodity-based so, a went were with We year. whack little call out increases I market. and not that and huge price is extent, bit easy fair of last still it the comp, our got it's a an say That to products. I hate like are out of we but whack out with to

because to it products, of really from get don't you to you're more margin customer. the you've you opportunities, The you innovative higher have So, want pay got if ability this. the that valuable have a us, some to

So…

Frank Heard

what products got and made US, we other is the several infrastructure when there's the then we we some to business recovery, being which market then segment, appropriate certainly certainly initiative traction. is call more Tim perimeter is products a degree, and, an a the it margin management, evidence of about talking can And remember there for we industrial profile really, in and referencing our think about piece that's an of is, Industrial not products. I terms better up businesses. is we base it's where talk price have largest see smaller gaining is is it are of The to core business, AMICO what different thing security And and on industrial impact faster and that.

site projects, their have think that around some XXXX. other products we good or terms that done business scale to three have some have thing up – is scale them a to XX/XX it a costs as they're on business and smaller set standalone new businesses relates real pretty four of that job mix I the and are have nice other have of on in smaller a also innovative that out approaches, a and taken locations

money of years, year the at tracking more making where – is in nicely you've versus and the could in black of pretty businesses return three say, in there rate context prior-year really out of So, two a got higher down. We're all five businesses, you the period. up this and past are the

that in of the got we XX/XX we're in feel that we've in right get the kind the and people the So, turned of time, the the corner. scale simplification projects feel, development trying traction to which, right still around right good got the in alignment at terms group, area some They've XXXX, place of we smaller projects but has now. businesses, the

Ken Zener

guess, to have to be, understand longer question growth. if you're from product you steadier to my backlog is revenue comment given and/or from entered Thank my Thank building higher you. I quarter. business? the part credit half, which perspective, volatile I the certainly rates Very one in ask encumbered visibility that either could the margins. world, tends visibility And, much. a Very which harder the increasing post-tax we background. solid strong have by the year due more coming number you nice last X was where Have – solar, out on I conversion And is as – you very of first in bids the of there seeing think

Frank Heard

don't it as areas relates We Maybe solar, a more really uncertainty or a we we in area the trackers would relates don't guess, affect utility-scale markets scale. potential give – tilt. panels. affect would in whether it those be fixed as to I'll how to solar year relative it it degree, first utility-scale increases two to the large say, – To really do lesser smaller community-based various that comment. would are scale. markets, by the ago do solar. driven It's I on that and trade was cost Suniva end I your the the an end being overarching resulting How comment, case

just it's operating were that, XXXX, prices insulated on industry far through, we – was of from years relative under and XXXX Tim forward a and XXXX market panel and going down to a can tide reference and in the be of for and Everybody in because exposed impact market headwind. by is were operating years. it the certainly, market to viewed for type against operating them, the we industry come have actually rising best a So, continues of he of going case that and panels and less our experts trade in that XXXX, more that it balance did that We but it experts was the knows that that the year some expand is went do. future the the business certainly to – some are of script, and the

element. area. was I think The it's kicked ITC, there. still So, XXXX it now road. expires an in down out the think And I important that's It

of an with end going had forecast cleft, that's XXXX. material XX% of extent, to impact originally when was really end guess, power new it to towards same I but would becomes, generation lesser investment come at a have artificial that So, an it to the solar, not the

was think missed is of to from a fixed I that less tracker. So, all tilt in shift that forecast

a I certainly along, we've way. think, entered or fixed-tilt it in community, a large of strong scale said all tracker as we've community that in and as the transition market way, evidence from on on to material don't we see a small solar,

are backlogs run space refine system our continue walk, implement fixed-tilt we and basis on Our test to and year-over-year crawl, in and systems, grow design. tracker we a up on our as the new both

want So, Tim, you some… to add

Tim Murphy

Yeah, Ken.

comment that about two – Frank's the and market. back to going things I think ITC the

actually a quarter, of the with a to years. that invested could X% of cost, extra said, if during the ruling a a IRS out for higher tax XX% you came continue you few the credit So, get project product,

or credit, So, if already XX% extended it to out a ruling. then XXXX down XX% rush XX%. the has XXXX be would IRS XX% tail and That drop to and then down to to by was expected recent

because backlog next side, future, better. Renewal visibility growth up to are People the last of It's on higher we the waiting for get the but I get our all putting where foreseeable that get and started, in business. of market. site we're the queued the of and construction the projecting on Conservation in that say to both the still in. end racks to the Visibility, at isn't the activity project So, project are guys field, sort one waiting a would business, though, backlogs in

is other expanding visibility any see that fact backlog. our we can say better wouldn't the than I So,

be. we month at but hard it's have any what is directionally And a really to months. that, least three for beyond good good say to pretty pretty So, feel going

Ken Zener

you. Thank

Frank Heard

Ken, have right. Well, us others? All Ken. for any questions, or everyone, you, All Thanks, joining do on thank we – right. follow-up

Operator

your the proceed Our Moore from Daniel next line Please Securities. question. with comes CJS question of from

Frank Heard

Excellent.

Ken Zener

to Sorry apologize. two for you here, minutes I keep gentlemen. another

Frank Heard

Not at all. questions. It's

Daniel Moore

bit how topic, realistic each been your the growth and Maybe obviously, I each little the you market? specifically cannabis a opportunity. end quarter not quarter the of the decimal rate favorite think, to for highlighting do and more rates, more, of that's but about growth that quantify point, in think type in products and Everybody's conversation, the what revenue –

Tim Murphy

say to will think, segment. part market mentioned, specific a opportunity the out break don't through billion from That to expected I I market part business this. XXXX. we to and billion because of Dan, $XX it's end $X I significantly, revenue a sales grow of is that But

there's So, years, sort ten this of the explosion. next

Now, will Canada's grows. certain when government on how states the has and online what that market come does, assumptions federal

strong. view in process – you go certainly nothing every very that, people from is either long-term to we state, So, or licensing goes I a that medical that from will medical, there but through. to recreational

is and usually they'll So, they on the selection, And get amount applying the a license building. so XX would people to license, permitting, of hundred they to follow growing start, design their months with up, of time, can somewhere. nine licenses, as production get for validate the XX then land then from the there start they usually three within take couple months, have a greenhouse greenhouse. And be

quick a sales the is not the it's So, and continues activity do cycle, see grow there. demand, we growing but to pipeline

think, we it's So long-term, tide. rising

Frank Heard

the quality market we're that, of know or months, market grow up under we with days. business the they greenhouse, in highest guarantee through any multiple with know, player and XX-week between a to original in acquisition because as factory confident, our on this organized And where the and we cycles relates the be cost, do side indoor Yeah. player in this outdoor product, both Rough that it as segment indoor been a the I predominant on grow end validate the to XXX under phase it's know business indoor us back we that Brothers about space and is this on brand trailer, the going it, the side dedicated greenhouse who's and based going to is serious greenhouse about what's to we've and in greenhouse for phone were with and of to Nexus that's a the team moves X lowest Tetra a grow roof is And grow, unique think business in a the got XX license do that serious to growth anybody Nexus. can

have Nexus we're bad control is about a cycles. heating, a unique environment And ventilating, and to it and controls crop by humidity with which we controlling Brothers Rough around environment participate. putting nobody any phone an call environment very to and that enclosure has one So, always has then to this and get the think systems, XX-week an ensure going those growth always that in a of really creating opportunity building

we're of some a unlike get So, we this. in going our know to businesses, always other phone call

So, into pretty to migrate both greenhouses. that the of people confident degree we on as feel participate sides to we're have going to opportunity border an some

Daniel Moore

helpful. Very

what TAM XXXX, market? billion your there's $XX for of the in into translate if slice a TAM that does Lastly,

Tim Murphy

in to can't don't and to growth If going and grow growth time. exponential And of really think be it's as develop [indiscernible] that indoor I it question. about big end should it say. outdoor, think I Hard number. over moving exponential really to we we a moving, – answer market from the

Daniel Moore

Thank again, for you, color. enough. the Fair all

Tim Murphy

Thanks.

Frank Heard

Dan. Appreciate it,

Operator

comes of Seaport next question. proceed Our your from with Global. question Liptak from Walter Please the line

Walter Liptak

Okay, thanks.

wanted over We've ask way. works, I the and are your employees And adding businesses. it XX/XX M&A. with seen this if could Obviously, existing I is last wondered I something to So, your clearly the Frank, ask right? strategy that and value four about it years four-pillar

[indiscernible]? to table discussion As just that does businesses, or the hurt you, the think because is to you bring obviously, besides this what happens, somehow can something you helps talk because purchasing that value? or part owners the do business this how you add you Or of of you impacts that

Frank Heard

far. different as come that there with in that the – process, interactions Walt, filter up brought a lot types I get questions every teams, generally, up come down never has road the are, if our and, businesses of it the of way in far we up management we if It's we get quarter, think a when do concern. does anybody a in

come a from we're from both think, in XX/XX perspective, the and positive business, at approach we technology-based capital I your spreading because a because real way businesses. very plan a funding it's as and the from not in it your from And, strong interest up And only, anything, – we products on it's one, and in of up when allocation have business across margin-enhancement brought it the thoughtful primarily, the broad we're your our operationally. and initiative we table decisions. if a interested use does aggressive funding you, about sitting products, strategically we're thinly the we across Number that kind markets, to of businesses end here money to in in if that as it drive a range opposed table strategic markets. use

seller capital going people – you're than you're view and the when you're they're the to positive that think spent of a legacy as portion be to get like a of of a the fact maybe a if real I the strategy going allocation businesses. forward, part that some be part and going So, bigger of business they probably key that dollar

think think the don't lot I ever discussion to to the out it is people a at boat, and the day day that's don't us going going impression. speak. restructure they're and say throw of we've we're – to So, had that they the buy so I where look us of people a

Walter Liptak

guys. Thank Okay, great. you, All right.

Frank Heard

you. Thank

Tim Murphy

you. Thank

Operator

remarks. Mr. will the for Ladies the end to session. any closing of at we back conference or Heard and gentlemen, have turn additional this I now Q&A time, reached the over

Frank Heard

talking our Well, thank us for to joining look to you, we call you And next forward today. everyone, on quarter.

Operator

Ladies conference thank today's in very your participation and for much gentlemen, call. you

Have You day. a wonderful now may disconnect.

Gibraltar Industries (ROCK) 30 Jul 182018 Q2 Earnings call transcript