PART I. FINANCIAL INFORMATION

EX-99.1 3 pressrelease.htm PART I. FINANCIAL INFORMATION

For Immediate Release

July 26, 2006

GIBRALTAR REPORTS STRONG SECOND-QUARTER SALES AND EARNINGS

Second-Quarter Net Income is $.78 Per Share;

Net Income from Continuing Operations of $.66 Per Share is up 47 Percent

BUFFALO, NEW YORK (July 26, 2006) – Gibraltar Industries, Inc. (NASDAQ: ROCK) today reported its sales, net income, and earnings per share for the three and six months ended June 30, 2006.

Sales from continuing operations in the second quarter of 2006 were $352 million, an increase of approximately 39 percent compared to $253 million in the second quarter of 2005, continuing a trend of solid sales growth. For the first six months of 2006, sales from continuing operations were up by approximately 38 percent to $675 million, compared to $489 million in the first half of 2005.

Net income in the second quarter of 2006 was $23.3 million, or $.78 per share, compared to $15.5 million, or $.52 per share, in the second quarter of 2005. Net income from continuing operations in the second quarter of 2006 was $19.8 million, or $.66 per share, compared to $13.5 million, or $.45 per share, in the second quarter of 2005. During the first half of 2006, net income from continuing operations was $31.5 million, an increase of approximately 45 percent compared to $21.7 million in the first six months of 2005.

Net income from discontinued operations amounted to $3.6 million in the second quarter of 2006, or $.12 per share, compared to $2.0 million, or $.07 per share, in the second quarter of 2005. Net income from discontinued operations amounted to $.21 per share in the first six months of 2006 compared to $.15 per share in the first six months of 2005.

Included in the discontinued operations for the second-quarter and year-to-date results for 2006 is a $.06 per share gain from the disposal of the net assets of discontinued operations (the sales of the Thermal Processing segment and the steel strapping operations). Cash received from the sales was used to repay debt.

“Our second-quarter sales, operating margin (10.9 percent), net income, and earnings per share further demonstrate that we are making measurable progress in our ongoing efforts to transition into a diversified manufacturer capable of generating improving and more consistent results over an extended period,” said Brian J. Lipke, Gibraltar’s Chairman and Chief Executive Officer.

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Gibraltar Reports Second-Quarter Sales and Earnings

Page Two

“In the last 18 months, we have continued to strategically transform Gibraltar by making six acquisitions, three divestitures, and focusing on continuous improvement with all of our existing operations. Our acquisitions added annual sales of approximately $400 million, while the divestitures had sales of less than $200 million. More importantly, these actions have solidified our leadership position in targeted growth areas and have strengthened our operating characteristics,” said Henning N. Kornbrekke, Gibraltar’s President and Chief Operating Officer.

Looking ahead, Mr. Kornbrekke said that, barring a significant change in business conditions, Gibraltar expects its third-quarter earnings per share from continuing operations will be in the range of $.59 to $.63, compared to $.37 in the third quarter of 2005.

As a result of the sale of the assets of the Company’s steel strapping operations on June 16, 2006, and the assets of its Thermal Processing segment on June 30, 2006, the results of these operations have been reclassified as discontinued operations in the Company’s income statements for all periods.

Gibraltar Industries is a leading manufacturer, processor, and distributor of metals and other engineered materials for the building, vehicular, and industrial markets. The company serves a large number of customers in a variety of industries in all 50 states and throughout the world. It has approximately 3,400 employees and operates 74 facilities in 26 states, Canada, 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 second-quarter results and discuss its outlook for the third quarter during its quarterly conference call, which will be held at 2 p.m. Eastern Time on July 27. 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 http://www.gibraltar1.com.

Gibraltar Reports Second-Quarter Sales and Earnings

Page Three

GIBRALTAR INDUSTRIES, INC. Financial Highlights (in thousands, except per share data)
	Three Months Ended
		June 30, 2006		June 30, 2005
Net Sales	$	352,421	$	252,850
Income from Continuing Operations	$	19,761	$	13,476
Income Per Share from Continuing Operations –Basic	$	.67	$	.46
Weighted Average Shares Outstanding-Basic		29,689		29,606
Income Per Share from Continuing Operations - Diluted	$	.66	$	.45
Weighted Average Shares Outstanding-Diluted		30,012		29,762

	Six Months Ended
		June 30, 2006		June 30, 2005
Net Sales	$	675,058	$	489,392
Income from Continuing Operations	$	31,494	$	21,651
Income Per Share from Continuing Operations -Basic	$	1.06	$	.73
Weighted Average Shares Outstanding-Basic		29,659		29,588
Income Per Share from Continuing Operations -Diluted	$	1.05	$	.73
Weighted Average Shares Outstanding-Diluted		29,966		29,769

GIBRALTAR INDUSTRIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited) (in thousands)

		June 30, December 31,
		2006		2005

Assets
Current assets:
Cash and cash equivalents	$	41,145	$	28,529
Accounts receivable, net		210,701		178,775
Inventories		233,136		194,653
Other current assets		16,882		22,047
Total current assets		501,864		424,004

Property, plant and equipment, net		230,506		311,147
Goodwill		372,600		406,767
Investments in partnerships		5,388		6,151
Other assets		55,375		56,943
	$	1,165,733	$	1,205,012

Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable	$	110,576	$	85,877
Accrued expenses		87,834		63,007
Current maturities of long-term debt		3,280		2,531
Current maturities of related party debt		-		5,833
Total current liabilities		201,690		157,248

Long-term debt		359,740		454,649
Deferred income taxes		65,389		93,052
Other non-current liabilities		7,069		6,038
Shareholders’ equity:
Preferred stock, $.01 par value; authorized: 10,000,000 shares; none outstanding		-		-
Common stock, $.01 par value; authorized 50,000,000 shares; issued 29,828,317 and 29,701,186 shares in 2006 and 2005, respectively		298		298
Additional paid-in capital		214,111		216,897
Retained earnings		314,852		280,116
Unearned compensation		-		(5,153)
Accumulated other comprehensive loss		2,584		1,867
		531,845		494,025
Less: cost of 41,100 and 40,500 common shares held in treasury in 2006 and 2005		-		-
Total shareholders’ equity		531,845		494,025
	$	1,165,733	$	1,205,012

GIBRALTAR INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited) (in thousands)
		Three Months Ended June 30,							Six Months Ended June 30,
				2006			2005			2006			2005

Net sales	$		352,421		$	252,850		$	675,058		$	489,392

Cost of sales			275,156			203,719			534,562			397,551

Gross profit			77,265			49,131			140,496			91,841

Selling, general and administrative expense			38,950			24,646			76,790			51,254

Income from operations			38,315			24,485			63,706			40,587

Other (income) expense:
Equity in partnerships’ loss (income) and other income			138			93			(548)			(351)
Interest expense			7,101			3,021			13,880			6,166
Total other expense			7,239			3,114			13,332			5,815

Income before taxes			31,076			21,371			50,374			34,772

Provision for income taxes			11,315			7,895			18,880			13,121
Income from continuing operations			19,761			13,476			31,494			21,651

Discontinued operations:
Income from discontinued operations before taxes			5,710			3,270			10,013			7,485
Income tax expense			2,158			1,275			3,797			2,919
Income from discontinued operations			3,552			1,995			6,216			4,566

Net income	$		23,313		$	15,471		$	37,710		$	26,217

Net income per share - Basic: Income from continuing operations Income from discontinued operations	$		.67 .12		$	.46 .07		$	1.06 .21		$	.73 .16
Net income	$		.79		$	.53		$	1.27		$	.89

Weighted average shares outstanding – Basic			29,689			29,606			29,659			29,588
Net income per share - Diluted: Income from continuing operations Income from discontinued operations	$		.66 .12		$	.45 .07		$	1.05 .21		$	.73 .15
Net income	$		.78		$	.52		$	1.26		$	.88

Weighted average shares outstanding – Diluted			30,012			29,762			29,966			29,769

GIBRALTAR INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (in thousands)
	Six Months Ended June 30,
					2006			2005
Cash flows from operating activities
Net income		$			37,710	$		26,217
Income from discontinued operations					6,216			4,566
Income from continuing operations					31,494			21,651
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization					14,175			9,297
Provision for deferred income taxes				-						(786)
Equity in partnerships’ (loss) income				174						(294)
Distributions from partnerships				589						748
Stock compensation expense				1,631						327
Other noncash adjustments				545						64
Increase (decrease) in cash resulting from changes
In (net of acquisitions):
Accounts receivable				(49,345)						(32,710)
Inventories				(37,793)						78
Other current assets and other assets				1,258						208
Accounts payable				23,698						(1,630)
Accrued expenses and other non-current liabilities				342						(1,556)

Net cash used in continuing operations				(13,232)						(4,603)
Net cash provided by discontinued operations				7,286						8,523
Net cash (used in) provided by operating activities				(5,946)						3,920

Cash flows from investing activities
Acquisitions, net of cash acquired				(13,206)						-
Purchases of property, plant and equipment				(11,452)						(8,073)
Net proceeds from sale of property and equipment				115						249
Net proceeds from sale of businesses				151,511						42,594

Net cash provided by investing activities from continuing operations			126,968						34,770
Net cash used in investing activities for discontinued operations				(3,189)						(1,915)
Net cash provided by investing activities				123,779						32,855

Cash flows from financing activities
Long-term debt reduction				(112,960)						(47,430)
Proceeds from long-term debt				10,000						10,000
Payment of deferred financing costs				(161)						(920)
Payment of dividends				(2,976)						(2,970)
Net proceeds from issuance of common stock				765						520
Tax benefit from stock options				115						158

Net cash used in financing activities				(105,217)						(40,642)

Net increase (decrease) in cash and cash equivalents				12,616						(3,867)

Cash and cash equivalents at beginning of year				28,529						10,892

Cash and cash equivalents at end of period		$		41,145			$			7,025

GIBRALTAR INDUSTRIES, INC. Segment Information (in thousands)
	Three Months Ended June 30,
											Increase (Decrease)
			2006				2005				$		%
			(unaudited)				(unaudited)

Net Sales
Building products	$		239,056		$		142,654		$		96,402		67.6%
Processed metal products			113,365				110,196				3,169		2.9%

Total Sales			352,421				252,850				99,571		39.4%

Income from Continuing Operations
Building products	$		40,519		$		22,197		$		18,322		82.5%
Processed metal products			7,945				7,851				94		1.2%
Corporate			(10,149)				(5,563)				(4,586)		-82.4%

Total Operating Income			38,315				24,485				13,830		56.5%

Operating Margin
Building products			16.9%				15.6%
Processed metal products			7.0%				7.1%
		Six Months Ended June 30,
												Increase (Decrease)
				2006				2005				$		%
				(unaudited)				(unaudited)

Net Sales
Building products		$		453,800		$		261,826		$		191,974		73.3%
Processed metal products				221,258				227,566				(6,308)		-2.8%

Total Sales				675,058				489,392				185,666		37.9%

Income from Continuing Operations
Building products		$		71,792		$		32,701		$		39,091		119.5%
Processed metal products				13,763				20,485				(6.722)		-32.8%
Corporate				(21,849)				(12,599)				(9,250)		73.4%

Total Operating Income				63,706				40,587				23,119		57.0%

Operating Margin
Building products				15.8%				12.5%
Processed metal products				6.2%				9.0%