EX-99.1 2 earningsrelease.htm SECURITIES AND EXCHANGE COMMISSION

99.1


For Immediate Release

        February 8, 2006





GIBRALTAR REPORTS SALES AND NET INCOME FOR 2005


Record Annual Sales of $1.2 Billion, Up 21 Percent;

EPS Exclusive of Special Charges Amounted to $.41 in the Fourth Quarter & $1.73 for the Full Year;

Four 2005 Acquisitions Set the Stage for Continued Sales and Earnings Growth in 2006


BUFFALO, NEW YORK (February 8, 2006) – Gibraltar Industries, Inc.

(NASDAQ: ROCK) today reported its sales and net income for the quarter and year ended December 31, 2005.


Sales from continuing operations in the fourth quarter of 2005 were $334 million, an increase of approximately 31 percent compared to $255 million in the fourth quarter of 2004. Sales from continuing operations of $1.178 billion in 2005 were up by approximately 21 percent, compared to $976 million in 2004.


Net income from continuing operations exclusive of special charges amounted to $12.4 million, or $.41 per share, compared to $9.4 million, or $.32 per share, in the fourth quarter of 2004.  These results are above the upper end of the range of per-share earnings estimates ($.30 to $.35) provided by the Company on October 26, 2005.  After special charges, actual net income from continuing operations in the fourth quarter of 2005 was $5.4 million, or $.18 per share.  The fourth quarter of 2005’s net income was negatively impacted by a number of special charges, including a $6.8 million charge ($.14 per share) for prepayment and make-whole penalties related to the early redemption of certain senior secured private placement notes, a $4.0 million charge ($.08 per share) to cost of sales representing purchase accounting adjustments required to adjust to fair market value the inventories of companies acquired during the quarter (primarily AMICO), and a $0.6 million expense ($.01 per share) resulting from the write-off of deferred financing costs related to the original issuance of the private placement notes.  


Net income from continuing operations exclusive of special charges amounted to $51.6 million, or $1.73 per share, in 2005, compared to $49.7 million, or $1.68 per share, in 2004.  After the special charges referred to above, 2005 net income from continuing operations was $44.7 million, or $1.50 per share.

 

“In 2005, we generated record sales and net income exclusive of special charges, made four acquisitions (including AMICO, the largest purchase in Gibraltar’s history), restructured our balance sheet (which included the completion of a subordinated debt offering in December), and continued our strategic growth and diversification, all of which sets the stage for continued strong performance in 2006,” said Brian J. Lipke, Gibraltar’s Chairman and Chief Executive Officer.


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Gibraltar’s Reports Sales and Net Income for 2005

Page Two





“Our fourth-quarter and 2005 results, when we overcame material cost volatility, rising energy costs, and competitive pricing pressures, demonstrate that Gibraltar’s market diversification and product mix enable us to deliver consistent results in a variety of operating environments,” said Henning N. Kornbrekke, Gibraltar’s President and Chief Operating Officer.


In 2005, Gibraltar acquired AMICO, the U.S. and Canadian market leader in the manufacturing of metal bar grating, expanded metal, and metal lath, as well as a number of other products; the Gutter Helmet® product line, the nation’s leading gutter protection system; American Wilcon Plastics, a manufacturer of plastic-injection molding products; and a copper powder manufacturing facility in Suzhou, China.


“Our 2005 acquisitions, together with growth at our existing operations, increased our pro forma annualized sales to approximately $1.4 billion, moving us much closer to our goal of $2 billion in annual sales by 2009, or sooner. They also significantly expanded our product offering and distribution channels, broadened and diversified our customer base, extended our geographic reach, and moved a greater share of our business into manufactured end product sales, all of which enhances our ability to improve our operational performance,” said Mr. Lipke.  


“Our focus on continuous improvement has strengthened the operating characteristics of our company,” said Mr. Kornbrekke. “In the year ahead, we will continue to drive improvements in our operations and capitalize on the many synergies that exist throughout our company.”


Looking ahead to the first quarter, Gibraltar said that continued strength in its Building Products and Thermal Processing segments, coupled with an improving climate in its Processed Metal Products segment, is expected to generate first-quarter earnings per share from continuing operations of $.40 to $.45, compared to $.36 in the first quarter of 2005, barring a significant change in business conditions.


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


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Gibraltar’s Reports Sales and Net Income for 2005

Page Three




Gibraltar Industries is a leading manufacturer, processor, and distributor of metals and other engineered materials for the building products, vehicular, and other industrial markets. The Company serves a large number of customers in a variety of industries in all 50 states, Canada, Mexico, Europe, Asia, and Central and South America. It has approximately 4,500 employees and operates 94 facilities in 29 states, Canada, Mexico, and China.


  

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

  


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Gibraltar will review its fourth-quarter and 2005 results and discuss its outlook for the first quarter during its quarterly conference call, which will be held at 2 p.m. Eastern Time on

February 9. Details of the call can be found on Gibraltar’s Web site, at www.gibraltar1.com.


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


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








Gibraltar’s Reports Sales and Net Income for 2005

Page Four





GIBRALTAR INDUSTRIES, INC.

Financial Highlights

(in thousands, except per share data)

 

      Three Months Ended

  

 December 31, 2005

  

December 31, 2004

   

 

  

Net Sales

$

334,128

 

$

255,210

Income from continuing operations

$

5,396

 

$

 9,385

Net Income Per Share-Basic

 

 

 

 

 

     Income from continuing operations

$

0.18

 

$

0.32

Weighted Average Shares Outstanding-Basic

 

29,634

  

29,542

Net Income Per Share-Diluted

 

 

 

 

 

     Income from continuing operations

$

0.18

 

$

0.32

Weighted Average Shares Outstanding-Diluted

 

29,866

  

29,763



 

          Twelve Months Ended

  

  December 31, 2005

  

December 31, 2004

      

Net Sales

$

1,178,236

 

$

976,255

Income from continuing operations

$

44,681

 

$

49,711

Net Income Per Share-Basic

 

 

 

 

 

     Income from continuing operations

$

1.51

 

$

1.69

Weighted Average Shares Outstanding-Basic

 

29,608

  

29,362

Net Income Per Share-Diluted

 

 

 

 

 

     Income from continuing operations

$

1.50

 

$

1.68

Weighted Average Shares Outstanding-Diluted

 

29,810

  

29,596







 

GIBRALTAR INDUSTRIES, INC.

CONSOLIDATED BALANCE SHEET

 

(in thousands)

  
   

December 31,

   

2005

  

2004

 

Assets

     
 

Current assets:

     
 

Cash and cash equivalents

$

26,706

 

$

10,892

 

Accounts receivable

 

180,598

  

146,021

 

Inventories

 

194,653

  

207,215

 

Other current assets

 

24,992

  

15,479

 

Total current assets

 

426,949

  

379,607

       
 

Property, plant and equipment, net

 

311,147

  

269,019

 

Goodwill

 

406,767

  

285,927

 

Investments in partnerships

 

6,151

  

8,211

 

Other assets

 

53,998

  

14,937

  

$

1,205,012

 

$

957,701

       
 

Liabilities and Shareholders’ Equity

     
 

Current liabilities:

     
 

Accounts payable

$

85,877

 

$

70,775

 

Accrued expenses

 

63,007

  

51,885

 

     Current maturities of long-term debt

 

2,501

  

8,859

 

Current maturities of related party debt

 

5,833

  

5,833

 

Total current liabilities

 

157,218

  

137,352

       
       
 

Long-term debt

 

454,679

  

289,514

 

Long-term related party debt

 

-

  

5,833

 

Deferred income taxes

 

93,052

  

66,485

 

Other non-current liabilities

 

6,038

  

4,774

 

Shareholders’ equity:

     
 

Preferred stock

 

-

  

-

 

Common stock

 

298

  

297

 

Additional paid-in capital

 

216,897

  

209,765

 

Retained earnings

 

280,116

  

242,585

 

Unearned compensation

 

(5,153)

  

(572)

 

Accumulated other comprehensive loss

 

1,867

  

1,668

   

494,025

  

453,743

 

Less treasury stock

 

-

  

-

 

Total shareholders’ equity

 

494,025

  

453,743

  

$

1,205,012

 

$

957,701

       
       
       
       
       


GIBRALTAR INDUSTRIES,  INC.

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)



    

 

Three Months Ended

December 31,

Twelve Months Ended

December 31,

  

2005

 

2004

 

2005

 

2004

         

Net sales

$

334,128

$

255,210

$

1,178,236

$

976,255

         

Cost of sales

 

276,251

 

211,534

 

959,755

 

774,970

         

Gross profit

 

57,877

 

43,676

 

218,481

 

201,285

         

Selling, general and administrative expense

 

35,426

 

26,814

 

120,779

 

111,737

         

Income from operations

 

22,451

 

16,862

 

97,702

 

89,548

         

Other (income) expense

        

Interest expense

 

14,340

 

3,392

 

25,442

 

12,915

Equity in partnerships’ income and

             other income

 


(735)

 


(1,354)

 


(266)

 


(4,846)

         

Total other expense

 

13,605

 

2,038

 

25,176

 

8,069

         

Income before taxes

 

8,846

 

14,824

 

72,526

 

81,479

         

Provision for income taxes

 

3,450

 

5,439

 

27,845

 

31,768

         

Income from continuing operations

 

5,396

 

9,385

 

44,681

 

49,711

         

Discontinued operations

        

Income (loss) from discontinued  

             operations before taxes

 


-

 


641

 


(1,981)

 


1,770

Income tax expense (benefit)

 

-

 

253

 

(772)

 

699

Income (loss) from discontinued

             operations

 

-

 

388

 

(1,209)

 

1,071

         

Net income

$

5,396

$

9,773

$

43,472

$

50,782

         

Net income per share – Basic

        

Income from continuing operations–

$

.18

$

.32

$

1.51

$

1.69

Income (loss) from discontinued

             operations

 

.00

 

.01

 

(.04)

 

.04

Net income

$

.18

$

.33

$

1.47

$

1.73

         

Weighted average shares outstanding - Basic

 

29,634

 

29,542

 

29,608

 

29,362

         

Net income per share – Diluted

        

Income from continuing operations

$

.18

$

.32

$

1.50

$

1.68

Income (loss) from discontinued

             operations

 

.00

 

.01

 

(.04)

 

.04

Net income

$

.18

$

.33

$

1.46

$

1.72

         

Weighted average shares outstanding -Diluted

 

29,866

 

29,763

 

29,810

 

29,596

         
 

GIBRALTAR INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

   

               Year Ended December 31,

     

2005

 

2004

 

Cash flows from operating activities

      
 

Net income

  

$

43,472

$

50,782

 

(Loss) income from discontinued operations

   

(1,209)

 

1,071

 

Income from continuing operations

   

44,681

 

49,711

 

Adjustment to reconcile net income to net cash

      
 

provided by (used in) operating activities:

      
 

Depreciation and amortization

   

28,680

 

24,198

 

Provision for deferred income taxes

   

(3,359)

 

6,773

 

Equity in partnerships’ loss (income)

   

908

 

(4,846)

 

Distributions from partnerships’ income

   

1,152

 

1,680

 

Tax benefit from exercise of stock options

   

281

 

1,249

 

Unearned compensation

   

1,504

 

153

 

Other non-cash adjustments

   

132

 

394

 

 Increase (decrease) in cash resulting

      
 

from changes in (net of acquisitions):

      
 

Accounts receivable

   

6,506

 

(26,975)

 

Inventories

 

  

46,677

 

(88,145)

 

Other current assets

   

281

 

(2,442)

 

Accounts payable and accrued expenses

   

4,651

 

37,896

 

Other assets

   

(12,343)

 

(1,416)

 

     Net cash provided by (used in) continuing operations

   

119,751

 

(1,770)

 

     Net cash used in discontinued operations

   

(1,402)

 

(214)

        
 

Net cash provided by (used in) operating activities

   

118,349

 

(1,984)

        
 

Cash flows from investing activities

      
 

Acquisitions, net of cash acquired

   

(271,031)

 

(65,525)

 

Net proceeds from sale of business

   

42,594

 

-

 

Purchases of property, plant and equipment

   

(22,140)

 

(24,330)

 

Net proceeds from sale of property and equipment

   

626

 

1,388

 

     Net cash used in investing activities from continuing operations

   

(249,951)

 

(88,467)

 

     Net cash used in investing activities for discontinued operations

   

(331)

 

(866)

        
 

Net cash used in investing activities

   

(250,282)

 

(89,333)

        
 

Cash flows from financing activities

      
 

Long-term debt reduction

   

(643,698)

 

(64,992)

 

Proceeds from long-term debt

   

796,568

 

132,302

 

Net proceeds from issuance of common stock

   

817

 

9,600

 

Payment of dividends

   

(5,940)

 

(3,720)

        
 

Net cash provided by financing activities

   

147,747

 

73,190

 

Net increase (decrease) in cash and cash equivalents

   

15,814

 

(18,127)

        
 

Cash and cash equivalents at beginning of year

   

10,892

 

29,019

 

Cash and cash equivalents at end of year

  

$

26,706

$

10,892


GIBRALTAR INDUSTRIES, INC.

Segment Information

(in thousands)

 

Three Months Ended December 31,

      

Increase (Decrease)

  

2005

 

2004

 

$

 

%

         

Net Sales

        

     Building products

$

204,445

$

116,012

$

88,433

 

76.2%

     Processed metal products

 

102,689

 

112,814

 

(10,125)

 

(9.0%)

     Thermal processing

 

26,994

 

26,384

 

610

 

2.3%

         

Net Sales

$

334,128

$

255,210

$

78,918

 

30.9%

         

Income (loss) from Operations

        

     Building products

$

25,394

$

7,888

$

17,506

 

221.9%

     Processed metal products

 

3,515

 

12,038

 

(8,523)

 

(70.8%)

     Thermal processing

 

2,377

 

2,915

 

(538)

 

(18.5%)

     Corporate

 

(8,835)

 

(5,979)

 

(2,856)

 

47.8%

         

Income from Operations

$

22,451

$

16,862

$

5,589

 

33.1%

         

Operating Margin

        

     Building products

 

12.4%

 

6.8%

 

 

 

 

     Processed metal products

 

3.4%

 

10.7%

    

     Thermal processing

 

8.8%

 

11.0%

    


        
 

Twelve Months Ended December 31,

      

Increase (Decrease)

  

2005

 

2004

 

$

 

%

         

Net Sales

        

     Building products

$

615,386

$

477,316

$

138,070

 

28.9%

     Processed metal products

 

454,822

 

395,287

 

59,535

 

15.1%

     Thermal processing

 

108,028

 

103,652

 

4,376

 

4.2%

         

Net Sales

$

1,178,236

$

976,255

$

201,981

 

20.7%

         

Income (loss) from Operations

        

     Building products  

$

81,324

$

59,068

$

22,256

 

37.7%

     Processed metal products

 

30,740

 

43,573

 

(12,833)

 

(29.5%)

     Thermal processing

 

13,398

 

13,731

 

(333)

 

(2.4%)

     Corporate

 

(27,760)

 

(26,824)

 

(936)

 

3.5%

         

Income from Operations

$

97,702

$

89,548

$

8,154

 

9.1%

         

Operating Margin

        

     Building products

 

13.2%

 

12.4%

 

 

 

 

     Processed metal products

 

6.8%

 

11.0%

    

     Thermal processing

 

12.4%

 

13.2%