EX-99.1 3 l36421aexv99w1.htm EX-99.1 EX-99.1
Exhibit 99.1
For Immediate Release
May 6, 2009
GIBRALTAR REPORTS FIRST-QUARTER RESULTS
  •   Additional Actions Taken to Aggressively Lower Cost Structure, Maximize Cash, Reduce Debt
 
  •   Positive Cash Flow Used to Reduce Debt by Another $27 Million, or 8%
          BUFFALO, NEW YORK (May 6, 2009) — Gibraltar Industries, Inc. (NASDAQ: ROCK), a leading manufacturer, processor, and distributor of products for the building, industrial, and vehicular markets, today reported its financial results for the first quarter ended March 31, 2009.
          First-quarter sales were $205 million, a decrease of 30% compared to $294 million in the first quarter 2008 as economic and market conditions continued to deteriorate well beyond expectations and any previous recessionary trends. Housing starts decreased 50% to below 600,000 units per year and automotive production decreased by 51% to below 8 million vehicles per year. Gibraltar unit-volume declines followed the market declines particularly in our Processed Metal Products segment where we experienced a decline of 45% in tons processed. Businesses within our Building Products segment that have a stronger focus in the repair, remodeling, and commercial markets experienced smaller unit-volume declines which partially offset the higher declines in our Processed Metal Products segment and other Building Products businesses.
          The first-quarter 2009 results from continuing operations included an operating margin of (8.3)% and a loss of $12.0 million, or $(0.40) per diluted share, compared to a 6.5% operating margin and income of $7.4 million, or $0.25 per diluted share, in the first quarter 2008, excluding restructuring costs in both years and a non-cash impairment charge in the first quarter 2009. Results were driven by the significant decline in unit volume and, particularly in our Processed Metal Products segment, the precipitous decline in margins as a result of the FIFO impact on cost of sales. The Company incurred an after-tax non-cash goodwill impairment charge of $15.1 million, or $0.50 per diluted share, during the three months ended March 31, 2009. The Company also incurred after-tax restructuring charges of $0.5 million, or $0.02 per diluted share, in the first quarter of 2009 compared to $1.4 million, or $0.05 per diluted share, for the comparable prior-year period. The sum of the items above resulted in a diluted loss per share of $(0.92) for the first quarter of 2009 compared to income of $0.20 per share for the first quarter of 2008. Gibraltar has made additional progress in lowering its operating cost structure and strengthening its balance sheet, reducing debt by another $27 million or 8% during the first quarter of 2009, and by $224 million or 41% in the last 18 months.
          “Fortunately our aggressive actions over the last four years and our focus to be the most efficient global producer in our product lines have provided a platform that has mitigated the impact of the current economic climate. Gibraltar is positioned to withstand this historic downturn and emerge as an even stronger company when conditions eventually stabilize and begin to improve. In addition, as a result of our aggressive restructuring we expect a significant improvement in profitability in the second quarter even though we only anticipate a slight seasonal up tick in sales,” said Brian J. Lipke, Gibraltar’s Chairman and Chief Executive Officer.
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Gibraltar Reports First-Quarter Results
Page Two
          “In response to the continued deterioration of global economic conditions the Company initiated a series of additional actions to aggressively lower its cost structure, further reduce working capital, maximize cash, and continue to pay down debt. These actions included a further staffing reduction of 17 percent in the first quarter (staffing has been reduced by 36 percent from September 2007), ten percent salary reductions by the CEO and COO, a ten percent reduction in fees by the Board of Directors, the elimination of salary increases and the suspension of the company match on 401(k) contributions, furloughs in many of our business units, lower capital spending, travel restrictions, and many other discretionary spending reductions. We anticipate annualized cash savings of $84 million from the actions we have initiated thus far,” said Henning N. Kornbrekke, Gibraltar’s President and Chief Operating Officer.
          “These additional cost-cutting activities — and the numerous supply chain and operational cost-saving initiatives already in place — build on the substantial progress we made during 2007 and 2008, when we closed, consolidated, or sold 31 facilities (a reduction of 31 percent). We will continue to streamline and consolidate our business, match capacity to demand, relentlessly attack costs, evaluate our portfolio of businesses, and make further adjustments if market conditions fall below our current expectations,” said Mr. Kornbrekke
          “While some of these aggressive actions were driven by current volume levels, the structural changes are a key component of our strategy to be the low-cost provider of our products. It is important to emphasize that our streamlining and cost-reduction activities leave us with an estimated productive capacity of $1.5 billion to $1.6 billion. So we have substantial upside capacity to utilize as business conditions improve,” added Mr. Lipke.
          Gibraltar has scheduled a conference call to review its results for the first quarter of 2009 tomorrow, May 7, 2009, starting at 9:00 am ET. A link to the call can be accessed 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, May 6, 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 2,700 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.
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Gibraltar Reports First-Quarter Results
Page Three
          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 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.
CONTACT: Kenneth P. Houseknecht, Investor Relations, at 716/826-6500, ext. 3229, khouseknecht@gibraltar1.com.
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GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
                 
    March 31,     December 31,  
    2009     2008  
    (unaudited)          
Assets
                
 
                
Current assets:
                
Cash and cash equivalents
   $ 8,532     $ 11,308  
Accounts receivable, net of reserve of $6,928 and $6,713 in 2009 and 2008, respectively
     118,330       123,272  
Inventories
     141,202       189,935  
Other current assets
     31,657       22,228  
Assets of discontinued operations
     1,461       1,486  
 
            
Total current assets
     301,182       348,229  
 
                
Property, plant and equipment, net
     239,800       243,619  
Goodwill
     417,372       443,925  
Acquired intangibles
     85,721       87,373  
Investment in partnership
     2,396       2,477  
Other assets
     17,955       20,736  
 
            
 
   $ 1,064,426     $ 1,146,359  
 
            
 
                
Liabilities and Shareholders’ Equity
                
 
                
Current liabilities:
                
Accounts payable
   $ 68,955     $ 76,168  
Accrued expenses
     37,327       46,305  
Current maturities of long-term debt
     2,708       2,728  
 
            
Total current liabilities
     108,990       125,201  
 
                
Long-term debt
     326,749       353,644  
Deferred income taxes
     69,072       79,514  
Other non-current liabilities
     19,621       19,513  
Shareholders’ equity:
                
Preferred stock, $0.01 par value; authorized: 10,000,000 shares; none outstanding
     —       —  
Common stock, $0.01 par value; authorized 50,000,000 shares; 30,179,032 and 30,061,550 shares issued and outstanding at March 31, 2009 and December 31, 2008, respectively
     302       301  
Additional paid-in capital
     224,807       223,561  
Retained earnings
     343,476       356,007  
Accumulated other comprehensive loss
     (12,550 )     (10,825 )
 
            
 
     540,950       569,044  
 
                
Less: cost of 110,791 and 75,050 common shares held in treasury at March 31, 2009 and December 31, 2008, respectively
     956       557  
 
            
Total shareholders’ equity
     539,994       568,487  
 
            
 
   $ 1,064,426     $ 1,146,359  
 
            

 

 

GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
                 
    Three Months Ended  
    March 31,  
    2009     2008  
Net sales
   $ 204,843     $ 293,938  
Cost of sales
     191,830       241,822  
 
            
Gross profit
     13,013       52,116  
Selling, general and administrative expense
     30,680       35,088  
Goodwill impairment
     25,501       —  
 
            
(Loss) income from operations
     (43,168 )     17,028  
Other expense (income)
               
Interest expense
     5,967       8,062  
Equity in partnership’s loss (income) and other (income)
     19       (153 )
 
            
Total other expense
     5,986       7,909  
 
            
(Loss) income before taxes
     (49,154 )     9,119  
(Benefit of) provision for income taxes
     (21,602 )     3,095  
 
            
(Loss) income from continuing operations
     (27,552 )     6,024  
Discontinued operations:
                
(Loss) income from discontinued operations before taxes
     (104 )     824  
(Benefit of) provision for income taxes
     (40 )     148  
 
            
(Loss) income from discontinued operations
     (64 )     676  
 
            
 
                
Net (loss) income
   $ (27,616 )   $ 6,700  
 
            
 
                
Net (loss) income per share — Basic:
                
(Loss) income from continuing operations
   $ (0.92 )   $ 0.20  
(Loss) income from discontinued operations
     (0.00 )     0.02  
 
            
Net (loss) income
   $ (0.92 )   $ 0.22  
 
            
 
                
Weighted average shares outstanding — Basic
     30,080       29,917  
 
            
Net (loss) income per share — Diluted:
                
(Loss) income from continuing operations
   $ (0.92 )   $ 0.20  
(Loss) income from discontinued operations
     (0.00 )     0.02  
 
            
Net (loss) income
   $ (0.92 )   $ 0.22  
 
            
 
                
Weighted average shares outstanding — Diluted
     30,080       30,090  
 
            

 

 

GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
                 
    Three Months Ended  
    March 31,  
    2009     2008  
Cash flows from operating activities
                
Net (loss) income
   $ (27,616 )   $ 6,700  
(Loss) income from discontinued operations
     (64 )     676  
 
            
(Loss) income from continuing operations
     (27,552 )     6,024  
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
                
Depreciation and amortization
     8,057       8,716  
Goodwill impairment
     25,501       —  
Provision for deferred income taxes
     (10,416 )     (448 )
Equity in partnership’s loss (income) and other (income)
     80       (71 )
Stock compensation expense
     1,462       1,477  
Noncash charges to interest expense
     521       492  
Other
     (63 )     5  
Increase (decrease) in cash resulting from changes in (net of dispositions):
                
Accounts receivable
     9,138       (22,103 )
Inventories
     48,366       6,976  
Other current assets and other assets
     (11,281 )     143  
Accounts payable
     (7,266 )     20,509  
Accrued expenses and other non-current liabilities
     (6,829 )     5,050  
 
            
Net cash provided by operating activities from continuing operations
     29,718       26,770  
Net cash (used in) provided by operating activities for discontinued operations
     (110 )     5,120  
 
            
Net cash provided by operating activities
     29,608       31,890  
 
            
 
                
Cash flows from investing activities
                
Additional consideration for acquisitions
     (59 )     (187 )
Purchases of property, plant and equipment
     (3,414 )     (4,557 )
Net proceeds from sale of property and equipment
     189       —  
 
            
Net cash used in investing activities for continuing operations
     (3,284 )     (4,744 )
Net cash provided by investing activities from discontinued operations
     —       11  
 
            
Net cash used in investing activities
     (3,284 )     (4,733 )
 
            
 
                
Cash flows from financing activities
                
Long-term debt reduction
     (39,061 )     (58,944 )
Proceeds from long-term debt
     12,074       33,004  
Payment of deferred financing costs
     —       (4 )
Payment of dividends
     (1,499 )     (1,495 )
Purchase of treasury stock at market prices
     (399 )     (23 )
Tax benefit from equity compensation
     (215 )     122  
 
            
Net cash used in financing activities for continuing operations
     (29,100 )     (27,340 )
Net cash provided by financing activities from discontinued operations
     —       3  
 
            
Net cash used in financing activities
     (29,100 )     (27,337 )
 
            
 
                
Net decrease in cash and cash equivalents
     (2,776 )     (180 )
 
                
Cash and cash equivalents at beginning of year
     11,308       35,287  
 
            
 
                
Cash and cash equivalents at end of period
   $ 8,532     $ 35,107  
 
            

 

 

GIBRALTAR INDUSTRIES, INC.
Segment Information
(unaudited)
(in thousands)
                                 
    Three Months Ended March 31,  
                    Increase (Decrease)  
    2009     2008     $     %  
Net Sales
                                
Building Products
   $ 166,339     $ 229,323     $ (62,984 )     (27.5 )%
Processed Metal Products
     38,504       64,615       (26,111 )     (40.4 )%
 
                          
 
                                
Total Sales
     204,843       293,938       (89,095 )     (30.3 )%
 
                                
Income from Operations
                                
Building Products *
   $ (28,621 )   $ 20,800     $ (49,421 )     (238 )%
Processed Metal Products
     (9,632 )     2,147       (11,779 )     (549 )%
Corporate
     (4,915 )     (5,919 )     1,004       (17 )%
 
                          
 
                                
Total Income from Operations *
   $ (43,168 )   $ 17,028     $ (60,196 )     (354 )%
 
                                
Operating Margin
                                
Building Products
     (17.2 )%     9.1 %                
Processed Metal Products
     (25.0 )%     3.3 %                
Consolidated
     (21.1 )%     5.8 %                
 
*   Includes a $25.5 million goodwill impairment charge in the first quarter of 2009.

 

 

GIBRALTAR INDUSTRIES, INC.
Non-GAAP Reconciliation
Three Months Ended March 31, 2009
(unaudited)
(in thousands)
                                 
                            As  
    Non-GAAP     Goodwill     Exit     Reported In  
    Item     Impairment     Activity     GAAP  
    Reported     Charge     Costs     Statements  
Loss from operations
                                
Building Products
   $ (2,848 )   $ (25,501 )   $ (272 )   $ (28,621 )
Processed Metal Products
     (9,073 )     —       (559 )     (9,632 )
Corporate
     (4,915 )     —       —       (4,915 )
 
                        
 
                                
Total loss from operations
     (16,836 )     (25,501 )     (831 )     (43,168 )
 
                                
Interest expense
     5,967       —       —       5,967  
Equity in partnerships’ loss and other income
     19       —       —       19  
 
                        
Loss before income taxes
     (22,822 )     (25,501 )     (831 )     (43,168 )
Benefit of income taxes
     (10,821 )     (10,416 )     (365 )     (21,602 )
 
                        
Loss from continuing operations
   $ (12,001 )   $ (15,085 )   $ (466 )   $ (27,552 )
 
                        
 
Loss from continuing operations per share — diluted
   $ (0.40 )   $ (0.50 )   $ (0.02 )   $ (0.92 )
 
                        
 
                                
Operating margin
                                
Building Products
     (1.7 )%     (15.3 )%     (0.2 )%     (17.2 )%
Processed Metal Products
     (23.5 )%     0.0 %     (1.5 )%     (25.0 )%
Consolidated
     (8.3 )%     (12.4 )%     (0.4 )%     (21.1 )%

 

 

GIBRALTAR INDUSTRIES, INC.
Non-GAAP Reconciliation
Three Months Ended March 31, 2008
(unaudited)
(in thousands)
                         
                    As  
    Non-GAAP     Exit     Reported In  
    Item     Activity     GAAP  
    Reported     Costs     Statements  
Income (loss) from operations
                        
Building Products
   $ 21,565     $ (765 )   $ 20,800  
Processed Metal Products
     3,480       (1,333 )     2,147  
Corporate
     (5,919 )     —       (5,919 )
 
                  
 
                        
Total income (loss) from operations
     19,126       (2,098 )     9,119  
 
                        
Interest expense
     8,062       —       8,062  
Equity in partnerships’ income and other income
     (153 )     —       (153 )
 
                  
Income (loss) before income taxes
     11,217       (2,098 )     9,119  
Provision for (benefit of) income taxes
     3,807       (712 )     3,095  
 
                  
Loss from continuing operations
   $ 7,410     $ (1,386 )   $ 6,024  
 
                  
 
                        
Loss from continuing operations per share — diluted
   $ 0.25     $ (0.05 )   $ 0.20  
 
                  
 
                        
Operating margin
                        
Building Products
     9.4 %     (0.3 )%     9.1 %
Processed Metal Products
     5.4 %     (2.1 )%     3.3 %
Consolidated
     6.5 %     (0.7 )%     5.8 %