EX-99.1 2 l35665aexv99w1.htm EX-99.1 EX-99.1
Exhibit 99.1
    (GIBRALTAR LOGO)   For Immediate Release
February 25, 2009
GIBRALTAR REPORTS FOURTH-QUARTER AND 2008 RESULTS
2008 Sales Up 3% to $1.2 Billion, Earnings Per Share Increase by 25% to $1.11
In 2008, Debt Reduced by $132 Million, Working Capital Improved by $84 Million
     BUFFALO, NEW YORK (February 25, 2009) – Gibraltar Industries, Inc. (NASDAQ: ROCK), a leading manufacturer, processor, and distributor of products for the building, industrial, and vehicular markets, today reported results for the quarter and year ended December 31, 2008.
     Sales from continuing operations in the fourth quarter of 2008 were $249 million, a decrease of 11 percent compared to $280 million in the fourth quarter of 2007. The Company reported a loss from continuing operations of $7.8 million in the fourth quarter of 2008, a $0.33 loss per diluted share, compared to a loss from continuing operations of $1.9 million, a $0.06 loss per diluted share, in the fourth quarter of 2007. Operating income in the fourth quarter was compressed largely due to significantly reduced unit volumes and lower price realization on certain product lines.
     For the 12 months ended December 31, 2008, sales from continuing operations were $1.232 billion, up three percent from $1.199 billion in 2007. Gibraltar’s acquisition activity in 2007 allowed it to increase sales despite significantly weaker market conditions in 2008 compared to a year earlier, as acquisitions added sales of $73 million in 2008. Operating income from continuing operations increased by eight percent to $81.5 million, from $75.7 million in 2007. In 2008, earnings per diluted share from continuing operations increased by 25 percent to $1.11, from $0.89 in 2007.
     “The steps we took over the last two years allowed us to generate much improved results in 2008 compared to 2007. However, our full-year results were negatively impacted by the worldwide economic turmoil in the fourth quarter. The downturns in the automotive and housing markets worsened, and the collapse of the credit markets led to a sudden and severe slowdown in previously strong areas, like the commercial building, architectural, and industrial markets, both in the United States and around the world. All of that contributed to a significant decrease in our fourth-quarter sales volume and our loss from continuing operations,” said Brian J. Lipke, Gibraltar’s Chairman and Chief Executive Officer.
     “To strengthen our position as a low-cost producer on a global basis and to better align our cost structure with the current demand for our products, we have closed or consolidated 25 facilities since January 2007 (including 15 in 2008), reduced our workforce by 28 percent from September 2007 to February 15, 2009, and trimmed work schedules. We also decreased our investment in working capital by $84 million in 2008. The working capital reduction, together with other sources of cash, allowed us to lower our debt by 27 percent, or $131 million in 2008 and by nearly $200 million over the last 15 months to $356 million as of December 31, 2008,” said Henning N. Kornbrekke, Gibraltar’s President and Chief Operating Officer.
     On November 5, 2008, Gibraltar closed on the sale of its powder metals business, SCM Metal Products, which was reported in its Processed Metal Products segment. The sale proceeds were used to reduce debt. The continued transformation of its portfolio of businesses is a key part of Gibraltar’s overall growth strategy and it includes both acquisitions and the occasional sale of a business such as SCM Metal Products or product line that is not consistent with the strategic direction of the company.
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NASDAQ:ROCK   Rock.Solid.Performance.

 

 

Gibraltar Reports Fourth-Quarter and 2008 Results
Page Two
     According to Mr. Kornbrekke, “Due to the high level of uncertainty in the general economy and the related effects on residential construction and North American automakers, we are not providing numerical guidance for 2009. We see the first quarter as being very challenging, with only marginally better earnings than the fourth quarter of 2008. We are anticipating a return to profitability in the second quarter, aided by an expected increase in seasonal demand, although sales are likely to be unfavorable when compared to the second quarter of 2008,” said Mr. Kornbrekke.
     “We do not know when conditions will improve, but believe we are well positioned to fully participate in a market recovery when it occurs. In the meantime, we will continue our aggressive efforts to reduce costs and take additional actions as market conditions warrant. Additionally, the Company will focus on liquidity preservation to help ensure its ability to fund its business operations, growth opportunities that may arise, and further reduce its indebtedness. As a result, Gibraltar’s Board of Directors has decided to suspend quarterly dividends with the expectation of reinstating payments when economic conditions and the Company’s profitability improve. We believe that our financial position and our ability to generate cash flow, together with the strategy of investing in leadership products, profitable growth, and global supply chain management will allow us to drive long-term growth and create value for our shareholders,” added Mr. Lipke.
     Gibraltar has scheduled a conference call to review its results for the fourth quarter and 2008 tomorrow, February 26, 2009, starting at 9:00 am ET. A link to the call can be found on Gibraltar’s Web site, at http://www.gibraltar1.com. The presentation slides that will be discussed during the call are expected to be available on Wednesday, February 25, by 6:00 p.m. ET. The slides may be downloaded from the Conference Calls page of the Investor Info section of the Gibraltar Web site: http://www.gibraltar1.com/investors/index.cfm?page=48. If you are not able to participate in the call, you may listen to a replay or review a copy of the prepared remarks via the link above. Both will be available on the Gibraltar Web site shortly following the call. The conference call replay link, presentation slides, and prepared remarks will remain on the Gibraltar Web site for one year.
     Gibraltar Industries is a leading manufacturer, processor, and distributor of products for the building, industrial, and vehicular markets. The Company serves customers in a variety of industries in all 50 states and throughout the world. It has approximately 3,000 employees and operates 59 facilities in 26 states, Canada, England, Germany, and Poland. Gibraltar’s common stock is a component of the S&P SmallCap 600 and the Russell 2000® Index.
     Information contained in this release, other than historical information, should be considered forward-looking and may be subject to a number of risk factors, including: general economic conditions; the impact of the availability and the effects of changing raw material prices on the Company’s results of operations; energy prices and usage; the ability to pass through cost increases to customers; changing demand for the Company’s products and services; risks associated with the integration of acquisitions; and changes in interest or tax rates. In addition, such forward-looking statements could also be affected by general industry and market conditions, as well as regulatory changes. The Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required by applicable law or regulation.
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CONTACT: Kenneth P. Houseknecht, Investor Relations, at 716/826-6500, ext. 3229, khouseknecht@gibraltar1.com.

 

 

GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
                 
    December 31,  
    2008     2007  
Assets
                
Current assets:
                
Cash and cash equivalents
   $ 11,308     $ 35,287  
Accounts receivable, net
     127,537       145,174  
Inventories
     189,935       194,159  
Other current assets
     17,963       20,128  
Assets of discontinued operations
     1,486       45,997  
 
            
Total current assets
     348,229       440,745  
 
                
Property, plant and equipment, net
     242,052       256,107  
Goodwill
     443,925       445,073  
Acquired intangibles
     87,373       90,394  
Investment in partnership
     2,477       2,639  
Other assets
     22,303       14,589  
Assets of discontinued operations
     —       31,861  
 
            
 
   $ 1,146,359     $ 1,281,408  
 
            
Liabilities and Shareholders’ Equity
                
Current liabilities:
                
Accounts payable
   $ 76,168     $ 81,793  
Accrued expenses
     46,305       40,369  
Current maturities of long-term debt
     2,728       2,955  
Liabilities of discontinued operations
     —       9,108  
 
            
Total current liabilities
     125,201       134,225  
 
                
Long-term debt
     353,644       484,590  
Deferred income taxes
     79,514       77,900  
Other non-current liabilities
     19,513       15,500  
Liabilities of discontinued operations
     —       1,433  
Shareholders’ equity:
                
Preferred stock $.01 par value; authorized 10,000,000 shares; none outstanding
     —       —  
Common stock, $.01 par value; authorized 50,000,000 shares; 30,061,550 and 29,949,229 shares issued and outstanding at December 31, 2008 and 2007, respectively
     301       300  
Additional paid-in capital
     223,561       219,087  
Retained earnings
     356,007       337,929  
Accumulated other comprehensive (loss) income
     (10,825 )     10,837  
 
            
 
     569,044       568,153  
 
                
Less: cost of 75,050 and 61,467 common shares held in treasury at December 31, 2008 and 2007, respectively
     557       393  
 
            
Total shareholders’ equity
     568,487       567,760  
 
            
 
   $ 1,146,359     $ 1,281,408  
 
            

 

 

GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
                                 
    Three Months Ended     Twelve Months Ended  
    December 31,     December 31,  
    2008     2007     2008     2007  
Net sales
   $ 249,374     $ 280,028     $ 1,232,299     $ 1,198,715  
 
                                
Cost of sales
     219,790       236,522       996,193       983,495  
 
                        
 
                                
Gross profit
     29,584       43,506       236,106       215,220  
 
                                
Selling, general and administrative expense
     37,363       35,804       154,637       139,479  
 
                        
 
                                
(Loss) income from operations
     (7,779 )     7,702       81,469       75,741  
 
                                
Other expense (income)
                                
Interest expense
     6,918       9,052       29,235       32,498  
Equity in partnership’s loss (income) and other (income)
     82       (190 )     (724 )     (1,172 )
 
                        
 
                                
Total other expense
     7,000       8,862       28,511       31,326  
 
                        
 
                                
(Loss) income before taxes
     (14,779 )     (1,160 )     52,958       44,415  
 
                                
Provision for income taxes
     (4,815 )     693       19,553       17,476  
 
                        
 
                                
(Loss) income from continuing operations
     (9,964 )     (1,853 )     33,405       26,939  
 
                                
Discontinued operations
                                
(Loss) income from discontinued operations before taxes
     (14,448 )     1,565       (10,948 )     (16,235 )
Income tax (benefit) expense
     (2,433 )     1,038       (1,611 )     (2,520 )
 
                        
(Loss) income from discontinued operations
     (12,015 )     527       (9,337 )     (13,715 )
 
                                
Net (loss) income
   $ (21,979 )   $ (1,326 )   $ 24,068     $ 13,224  
 
                        
 
                                
Net (loss) income per share — Basic
                                
(Loss) income from continuing operations
   $ (0.33 )   $ (0.06 )   $ 1.11     $ 0.90  
(Loss) income from discontinued operations
     (0.40 )     0.02       (0.31 )     (0.46 )
 
                        
Net (loss) income
   $ (0.73 )   $ (0.04 )   $ 0.80     $ 0.44  
 
                        
 
                                
Weighted average shares outstanding — Basic
     30,011       29,879       29,981       29,867  
 
                        
 
                                
Net (loss) income per share – Diluted
                                
(Loss) income from continuing operations
   $ (0.33 )   $ (0.06 )   $ 1.11     $ 0.89  
(Loss) income from discontinued operations
     (0.40 )     0.02       (0.31 )     (0.46 )
 
                        
Net (loss) income
   $ (0.73 )   $ (0.04 )   $ 0.80     $ 0.43  
 
                        
 
                                
Weighted average shares outstanding -Diluted
     30,260       30,111       30,193       30,116  
 
                        

 

 

GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
                 
    Year Ended December 31,  
    2008     2007  
CASH FLOWS FROM OPERATING ACTIVITIES
                
Net income
   $ 24,068     $ 13,224  
Loss from discontinued operations
     (9,337 )     (13,715 )
 
            
Income from continuing operations
     33,405       26,939  
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
                
Depreciation and amortization
     33,907       30,952  
Provision for deferred income taxes
     1,574       5,328  
Equity in partnership’s income
     (447 )     (911 )
Distributions from partnership’s income
     609       712  
Stock compensation expense
     4,586       2,886  
Non-cash charges to interest expense
     2,007       1,750  
Other non-cash adjustments
     4,105       116  
Increase (decrease) in cash resulting from changes in (net of acquisitions):
                
Accounts receivable
     12,273       22,230  
Inventories
     1,770       45,625  
Other current assets and other assets
     3,913       1,832  
Accounts payable
     (8,722 )     7,748  
Accrued expenses and other non-current liabilities
     9,149       (10,952 )
 
            
Net cash provided by continuing operations
     98,129       134,255  
Net cash provided by discontinued operations
     9,745       24,558  
 
            
Net cash provided by operating activities
     107,874       158,813  
 
            
 
                
CASH FLOWS FROM INVESTING ACTIVITIES
                
Acquisitions, net of cash acquired
     (8,724 )     (206,608 )
Net proceeds from sale of business
     35,202       11,859  
Purchases of property, plant and equipment
     (21,595 )     (17,691 )
Net proceeds from sale of property and equipment
     2,692       3,477  
 
            
Net cash provided by (used in) investing activities from continuing operations
     7,575       (208,963 )
Net cash used in investing activities for discontinued operations
     (501 )     (950 )
 
            
Net cash provided by (used in) investing activities
     7,074       (209,913 )
 
            
 
                
CASH-FLOWS FROM FINANCING ACTIVITIES
                
Long-term debt payments
     (184,937 )     (119,306 )
Proceeds from long-term debt
     53,439       200,074  
Payment of deferred financing costs
     (104 )     (1,498 )
Payment of dividends
     (5,985 )     (5,971 )
Net proceeds from issuance of common stock
     250       137  
Tax adjustment from equity compensation
     (362 )     121  
Purchase of treasury stock
     (164 )     (393 )
 
            
Net cash (used in) provided by financing activities from continuing operations
     (137,863 )     73,164  
Net cash used in financing activities from discontinued operations
     (1,064 )     (252 )
 
            
Net cash (used in) provided by financing activities
     (138,927 )     72,912  
 
            
Net (decrease) increase in cash and cash equivalents
     (23,979 )     21,812  
Cash and cash equivalents at beginning of year
     35,287       13,475  
 
            
Cash and cash equivalents at end of year
   $ 11,308     $ 35,287  
 
            

 

 

GIBRALTAR INDUSTRIES, INC.
SEGMENT INFORMAITON
(in thousands)
                                 
    Three Months Ended December 31,  
                    Increase (Decrease)  
    2008     2007     $     %  
Net Sales
                                
Building Products
   $ 198,965     $ 218,500     $ (19,535 )     (8.9)%  
Processed Metals
     50,409       61,528       (11,119 )     (18.1)%
 
                          
 
                                
 
   $ 249,374     $ 280,028     $ (30,654 )     (10.9)%
 
                                
Operating Margin
                                
Building Products
   $ 584     $ 13,207     $ (12,623 )     (95.6)%
Processed Metals
     (1,401 )     2,803       (4,204 )     (150.0)%
Corporate
     (6,962 )     (8,308 )     1,346       (16.2)%
 
                          
 
                                
 
   $ (7,779 )   $ 7,702     $ (15,481 )     (201.0)%
 
                                
Building Products
     0.3%     6.0%                
Processed Metals
     (2.8)%     4.6%                
                                 
    Twelve Months Ended December 31,  
                    Increase (Decrease)  
    2008     2007     $     %  
Net Sales
                                
Building Products
   $ 986,840     $ 929,022     $ 57,818       6.2% 
Processed Metals
     245,459       269,693       (24,234 )     (9.0)%
 
                          
 
                                
 
   $ 1,232,299     $ 1,198,715     $ 33,584       2.8% 
 
                                
Operating Margin
                                
Building Products
   $ 94,522     $ 91,589     $ 2,934       3.2% 
Processed Metals
     17,655       13,265       4,390       33.1% 
Corporate
     (30,708 )     (29,113 )     (1,596 )     5.5% 
 
                          
 
                                
 
   $ 81,469     $ 75,741     $ 5,728       7.6% 
 
                                
Building Products
     9.6%     9.9%                
Processed Metals
     7.2%     4.9%