EX-99.1 2 exhibit991q12023earningsre.htm EX-99.1 Document

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GIBRALTAR ANNOUNCES FIRST QUARTER 2023 FINANCIAL RESULTS
Net Sales: GAAP and Adjusted down 8%, EPS: GAAP up 45%, Adjusted up 17%
Strong Cash Generation
Reaffirms 2023 Net Sales, EPS, Cash Flow Growth Outlook

Buffalo, New York, May 3, 2023 - Gibraltar Industries, Inc. (Nasdaq: ROCK), a leading manufacturer and provider of products and services for the renewable energy, residential, agtech and infrastructure markets, today reported its financial results for the three-month period ended March 31, 2023.

“First quarter results demonstrate a strong start to the year. We executed well delivering 14% improvement in adjusted operating income on 8% down net sales. Additionally, we delivered free cash flow exceeding 12% of net sales, enabling us to pay down a large portion of our revolver draw and continued to execute our authorized share repurchase program. Current trends in our end markets and positive customer order activity align and support our expectations and 2023 guidance,” stated Chairman and CEO Bill Bosway.
First Quarter 2023 Consolidated Results
Below are first quarter consolidated results:
Three Months Ended March 31,
$Millions, except EPSGAAPAdjusted
20232022Change20232022Change
Net Sales$293.3$317.9-7.7%$290.8$316.0-8.0%
Net Income$21.1$15.536.1%$21.8$19.710.7%
Diluted EPS$0.68$0.4744.7%$0.70$0.6016.7%

The decrease in net sales was mainly driven by end market dynamics in the Renewables segment and customer rescoping and reprioritizing fruit and vegetable growing projects in the Agtech business. Residential end market demand is evolving as expected, and the Infrastructure segment continues to have strong momentum.
GAAP earnings increased to $21.1 million, or $0.68 per share. Adjusted net income increased 10.7% to $21.8 million, or $0.70 per share, and adjusted EPS increased 16.7% driven by solid execution in the Renewables, Agtech and Infrastructure segments. Free cash flow to net sales of 12.3% was driven through stronger margin performance and improved working capital management.



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Adjusted measures exclude charges for restructuring initiatives, acquisition-related items, senior leadership transition costs and the results of the processing business, as further described in the appended reconciliation of adjusted financial measures.

First Quarter Segment Results

Renewables
For the first quarter, the segment reported:
Three Months Ended March 31,
$MillionsGAAPAdjusted
20232022Change20232022Change
Net Sales$59.2$78.8(24.9)%$59.2$78.8(24.9)%
Operating Income$2.3$(7.0)NMF$2.2$(4.3)NMF
Operating Margin3.8%(8.9)%1270 bps3.8%(5.4)%920 bps

Net sales were down 24.9% as the U.S. solar industry continued to manage through panel importation challenges resulting from the Uyghur Forced Labor Prevention Act (UFLPA), and project movement associated with adverse winter weather conditions during the lowest seasonal quarter of the year. The pace of business continued to improve during the quarter as bookings nearly doubled sequentially. As a result, backlog increased 34% on a sequential basis and year-over-year backlog comparisons are expected to turn positive over the course of the year.
Adjusted operating margin improved as expected, increasing 920 basis points year-over-year, driven by field operations productivity and improved supply chain management that offset lower volumes.





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Residential
For the first quarter, the segment reported:
Three Months Ended March 31,
$MillionsGAAPAdjusted
20232022Change20232022Change
Net Sales$179.5$179.5--$179.5$179.5--
Operating Income$29.5$33.4(11.7)%$29.6$33.7(12.2)%
Operating Margin16.4%18.6%(220) bps16.5%18.8%(230) bps

Net sales were flat; the positive impact of participation gains and the acquisition of Quality Aluminum Products, which contributed 8.0% growth in the quarter, offset headwinds of channel inventory correction, the market’s return to normal seasonal demand, and adverse winter weather in key regions of the U.S.
Adjusted operating income decreased 12.2% as anticipated as price and material cost continued to realign, and the market returned to its normal seasonal demand pattern. Sequentially, margins improved 310 basis points as price and material cost alignment improved during the quarter, and we expect margins to improve as seasonal volume accelerates, price / material cost are better aligned, and Quality Aluminum Products integration benefits are realized.

Agtech
For the first quarter, the segment reported:
Three Months Ended March 31,
$MillionsGAAPAdjusted
20232022Change20232022Change
Net Sales$35.9$42.4(15.3)%$33.3$40.6(18.0)%
Operating Income$2.3$0.0NMF$3.6$2.544.0%
Operating Margin6.5%0.1%640 bps10.7%6.3%440 bps

Net sales decreased 15.3%, with adjusted net sales down 18.0% as Produce customers rescope and reprioritize the launch of fruit and vegetable growing facilities. The active project pipeline is at its highest level in company history driven by produce and cannabis projects, and bookings and backlog are expected to increase accordingly in the coming quarters.



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Adjusted operating margin improved 440 basis points driven by business mix, further improvement in business operating systems, which are now fully unified across the business, and supply chain productivity and efficiency improvement.

Infrastructure

For the first quarter, the segment reported:
Three Months Ended March 31,
$MillionsGAAPAdjusted
20232022Change20232022Change
Net Sales$18.7$17.28.7%$18.7$17.28.7%
Operating Income$2.7$1.2125.0%$2.7$1.1145.5%
Operating Margin14.5%6.9%760 bps14.5%6.5%800 bps

Net Sales and backlog increased 8.7% and 38%, respectively, as customer demand continues to be very strong. Management expects continued strength from increased infrastructure spending related to the Infrastructure Investment and Jobs Act and ongoing efforts to increase market participation.
Adjusted operating income more than doubled and adjusted operating margins improved 800 basis points driven by strong 80/20 execution, volume, and supply chain productivity.

Business Outlook
Mr. Bosway concluded, “As we head into the second quarter, customer bookings and demand across the business is shaping up as anticipated, and our businesses are on track for a solid second quarter. As committed coming into the year, we remain laser-focused on driving growth, margin expansion, and strong cash performance.”

Gibraltar is reiterating its guidance for net sales and earnings for the full year 2023. Consolidated net sales is expected to range between $1.36 billion and $1.41 billion, compared to $1.38 billion in 2022. GAAP EPS is expected to range between $3.04 and $3.24, compared to $2.56 in 2022, and adjusted EPS is expected to range between $3.46 and $3.66, compared to $3.40 in 2022.
First Quarter 2023 Conference Call Details
Gibraltar will host a conference call today starting at 9:00 a.m. ET to review its results for the first quarter of 2023. Interested parties may access the webcast through the Investors section of the Company’s website at www.gibraltar1.com, where related presentation materials will also be posted prior to the conference call. The call also may be accessed by dialing (877) 407-3088 or (201) 389-0927. For interested individuals unable to join the live conference call, a webcast replay will be available on the Company’s website for one year.




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About Gibraltar

Gibraltar is a leading manufacturer and provider of products and services for the renewable energy, residential, agtech, and infrastructure markets. Gibraltar’s mission, to make life better for people and the planet, is fueled by advancing the disciplines of engineering, science, and technology. Gibraltar is innovating to reshape critical markets in comfortable living, sustainable power, and productive growing throughout North America. For more please visit www.gibraltar1.com.

Forward-Looking Statements

Certain information set forth in this news release, other than historical statements, contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that are based, in whole or in part, on current expectations, estimates, forecasts, and projections about the Company’s business, and management’s beliefs about future operations, results, and financial position. These statements are not guarantees of future performance and are subject to a number of risk factors, uncertainties, and assumptions. Actual events, performance, or results could differ materially from the anticipated events, performance, or results expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from current expectations include, among other things, the availability and pricing of our principal raw materials and component parts, supply chain challenges causing project delays and field operations inefficiencies and disruptions, the loss of any key customers, adverse effects of inflation, our ability to sell assets that Gibraltar has determined to sell, other general economic conditions and conditions in the particular markets in which we operate, increases in spending due to laws and government incentives, such as the Infrastructure Investment and Jobs Act, changes in customer demand and capital spending, competitive factors and pricing pressures, our ability to develop and launch new products in a cost-effective manner, our ability to realize synergies from newly acquired businesses, disruptions to our IT systems, the impact of regulation (including the Department of Commerce’s solar panel anti-circumvention investigation and the Uyghur Forced Labor Prevention Act (UFLPA)), rebates, credits and incentives and variations in government spending and our ability to derive expected benefits from restructuring, productivity initiatives, liquidity enhancing actions, and other cost reduction actions.  Before making any investment decisions regarding our company, we strongly advise you to read the section entitled “Risk Factors” in our most recent annual report on Form 10-K which can be accessed under the “SEC Filings” link of the “Investor Info” page of our website at www.Gibraltar1.com. 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.

Adjusted Financial Measures

To supplement Gibraltar’s consolidated financial statements presented on a GAAP basis, Gibraltar also presented certain adjusted financial measures in this news release and its quarterly conference call, including adjusted net sales, adjusted operating income and margin, adjusted net income, adjusted earnings per share (EPS), free cash flow and adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) each a non-GAAP financial measure. Adjusted net sales reflects the removal of net sales associated with our Processing business, which has been classified as held-for-sale. Adjusted net income, operating income and margin excludes special charges consisting of restructuring costs primarily associated with 80/20 simplification or lean initiatives, senior leadership transition costs, acquisition related costs and the operating losses generated by our processing business that has been classified as held-for-sale. These special charges are excluded since they may not be considered directly



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related to the Company’s ongoing business operations. The aforementioned exclusions along with other adjustments to other income below operating profit are excluded from adjusted EPS. Adjusted EBITDA further excludes depreciation, amortization and stock compensation. In evaluating its business, the Company considers and uses these non-GAAP financial measures as supplemental measures of its operating performance. Free cash flow is operating cash flow less capital expenditures and the related margin is free cash flow divided by net sales. The Company believes that the presentation of adjusted measures and free cash flows provides meaningful supplemental data to investors that are indicative of the Company’s core operating results and facilitates comparison of operating results across reporting periods as well as comparison with other companies. Adjusted EBITDA and free cash flow are also useful measures of the Company’s ability to service debt and adjusted EBITDA is one of the measures used for determining the Company’s debt covenant compliance.
Adjustments to the most directly comparable financial measures presented on a GAAP basis are quantified in the reconciliation of adjusted financial measures provided in the supplemental financial schedules that accompany this news release. These adjusted measures should not be viewed as a substitute for the Company’s GAAP results and may be different than adjusted measures used by other companies and the Company’s presentation of non-GAAP financial measures should not be construed as an inference that the Company’s future results will be unaffected by unusual or non-recurring items.
Reconciliations of non-GAAP measures related to full-year 2023 guidance have not been provided due to the unreasonable efforts it would take to provide such reconciliations due to the high variability, complexity and uncertainty with respect to forecasting and quantifying certain amounts that are necessary for such reconciliations.

Contact:
LHA Investor Relations
Jody Burfening/Carolyn Capaccio
(212) 838-3777
rock@lhai.com



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GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
(unaudited)
Three Months Ended
March 31,
 20232022
Net sales$293,267 $317,865 
Cost of sales216,338 253,021 
Gross profit76,929 64,844 
Selling, general, and administrative expense47,559 43,649 
Income from operations29,370 21,195 
Interest expense1,491 485 
Other (income) expense (397)153 
Income before taxes28,276 20,557 
Provision for income taxes7,177 5,101 
Net income$21,099 $15,456 
Net earnings per share:
Basic$0.68 $0.47 
Diluted$0.68 $0.47 
Weighted average shares outstanding:
Basic30,897 32,913 
Diluted31,024 33,022 



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GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
March 31,
2023
December 31,
2022
(unaudited)
Assets
Current assets:
Cash and cash equivalents$7,497 $17,608 
Accounts receivable, net of allowance of $4,164 and $3,746, respectively230,132 217,156 
Inventories, net171,634 170,360 
Prepaid expenses and other current assets19,015 18,813 
Total current assets428,278 423,937 
Property, plant, and equipment, net107,701 109,584 
Operating lease assets24,432 26,502 
Goodwill512,639 512,363 
Acquired intangibles134,735 137,526 
Other assets707 701 
$1,208,492 $1,210,613 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$129,661 $106,582 
Accrued expenses67,103 73,721 
Billings in excess of cost42,929 35,017 
Total current liabilities239,693 215,320 
Long-term debt49,876 88,762 
Deferred income taxes47,030 47,088 
Non-current operating lease liabilities17,488 19,041 
Other non-current liabilities19,018 18,303 
Stockholders’ equity:
Preferred stock, $0.01 par value; authorized 10,000 shares; none outstanding— — 
Common stock, $0.01 par value; authorized 100,000 shares; 34,148 and 34,060 shares issued and outstanding in 2023 and 2022341 340 
Additional paid-in capital324,466 322,873 
Retained earnings649,077 627,978 
Accumulated other comprehensive loss(3,539)(3,432)
Cost of 3,389 and 3,199 common shares held in treasury in 2023 and 2022(134,958)(125,660)
Total stockholders’ equity835,387 822,099 
$1,208,492 $1,210,613 




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GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Three Months Ended
March 31,
 20232022
Cash Flows from Operating Activities
Net income$21,099 $15,456 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization6,834 6,336 
Stock compensation expense1,594 1,352 
Exit activity (recoveries) costs, non-cash(63)1,198 
(Benefit of) provision for deferred income taxes(51)17 
Other, net1,023 1,395 
Changes in operating assets and liabilities, excluding the effects of acquisitions:
Accounts receivable(18,004)(11,101)
Inventories(1,586)(20,937)
Other current assets and other assets2,536 731 
Accounts payable23,077 (11,962)
Accrued expenses and other non-current liabilities1,586 9,761 
Net cash provided by (used in) operating activities 38,045 (7,754)
Cash Flows from Investing Activities
Acquisitions, net of cash acquired554 — 
Purchases of property, plant, and equipment, net(2,190)(4,402)
Net cash used in investing activities(1,636)(4,402)
Cash Flows from Financing Activities
Proceeds from long-term debt11,000 47,500 
Long-term debt payments(50,000)(29,000)
Purchase of common stock at market prices(7,509)(3,461)
Net cash (used in) provided by financing activities(46,509)15,039 
Effect of exchange rate changes on cash(11)(159)
Net (decrease) increase in cash and cash equivalents(10,111)2,724 
Cash and cash equivalents at beginning of year17,608 12,849 
Cash and cash equivalents at end of period$7,497 $15,573 



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GIBRALTAR INDUSTRIES, INC.
Reconciliation of Adjusted Financial Measures
(in thousands, except per share data)
(unaudited)

Three Months Ended
March 31,2023
As Reported In GAAP StatementsRestructuring & Senior Leadership Transition CostsAcquisition Related ItemsPortfolio ManagementAdjusted Financial Measures
Net Sales
Renewables$59,205 $— $— $— $59,205 
Residential179,495 — — — 179,495 
Agtech35,852 — — (2,514)33,338 
Infrastructure18,715 — — — 18,715 
Consolidated sales293,267 — — (2,514)290,753 
Income from operations
Renewables2,269 (63)32 — 2,238 
Residential29,509 114 — — 29,623 
Agtech2,330 561 26 635 3,552 
Infrastructure2,714 — — — 2,714 
Segments Income36,822 612 58 635 38,127 
Unallocated corporate expense(7,452)(19)21 — (7,450)
Consolidated income from operations29,370 593 79 635 30,677 
Interest expense1,491 — — — 1,491 
Other (income) expense(397)— — 468 71 
Income before income taxes28,276 593 79 167 29,115 
Provision for income taxes7,177 140 20 21 7,358 
Net income$21,099 $453 $59 $146 $21,757 
Net income per share - diluted$0.68 $0.02 $— $— $0.70 
Operating margin
Renewables3.8 %(0.1)%0.1 %— %3.8 %
Residential16.4 %0.1 %— %— %16.5 %
Agtech6.5 %1.6 %0.1 %1.8 %10.7 %
Infrastructure14.5 %— %— %— %14.5 %
Segments Margin12.6 %0.2 %— %0.2 %13.1 %
Consolidated10.0 %0.2 %— %0.2 %10.6 %



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GIBRALTAR INDUSTRIES, INC.
Reconciliation of Adjusted Financial Measures
(in thousands, except per share data)
(unaudited)

Three Months Ended
March 31, 2022
As Reported In GAAP StatementsRestructuring ChargesSenior Leadership Transition CostsAcquisition Related ItemsPortfolio ManagementAdjusted Financial Measures
Net Sales
Renewables$78,783 $— $— $— $— $78,783 
Residential179,485 — — — — 179,485 
Agtech42,428 — — — (1,823)40,605 
Infrastructure17,169 — — — — 17,169 
Consolidated sales317,865 — — — (1,823)316,042 
Income from operations
Renewables(6,984)2,526 (209)390 — (4,277)
Residential33,435 284 — — 33,722 
Agtech31 (9)— — 2,525 2,547 
Infrastructure1,181 (63)— — — 1,118 
Segments Income27,663 2,457 75 390 2,525 33,110 
Unallocated corporate expense(6,468)20 255 — (6,186)
Consolidated income from operations21,195 2,477 330 397 2,525 26,924 
Interest expense485 — — — — 485 
Other expense153 — — — — 153 
Income before income taxes20,557 2,477 330 397 2,525 26,286 
Provision for income taxes5,101 622 83 100 634 6,540 
Net income$15,456 $1,855 $247 $297 $1,891 $19,746 
Net income per share - diluted$0.47 $0.05 $0.01 $0.01 $0.06 $0.60 
Operating margin
Renewables(8.9)%3.2 %(0.3)%0.5 %— %(5.4)%
Residential18.6 %— %0.2 %— %— %18.8 %
Agtech0.1 %— %— %— %6.0 %6.3 %
Infrastructure6.9 %(0.4)%— %— %— %6.5 %
Segments Margin8.7 %0.8 %— %0.1 %0.8 %10.5 %
Consolidated6.7 %0.8 %0.1 %0.1 %0.8 %8.5 %



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GIBRALTAR INDUSTRIES, INC.
Reconciliation of Adjusted Financial Measures
(in thousands)
(unaudited)

Three Months Ended
March 31,2023
ConsolidatedRenewablesResidentialAgtechInfrastructure
Net Sales$293,267 $59,205 $179,495 $35,852 $18,715 
Less: Processing Net Sales(2,514)— — (2,514)— 
Adjusted Net Sales$290,753 $59,205 $179,495 $33,338 $18,715 
Net Income21,099 
Provision for Income Taxes7,177 
Interest Expense1,491 
Other Income(397)
Operating Profit29,370 2,269 29,509 2,330 2,714 
Adjusted Measures*1,307 (31)114 1,222 — 
Adjusted Operating Profit30,677 2,238 29,623 3,552 2,714 
Adjusted Operating Margin10.6 %3.8 %16.5 %10.7 %14.5 %
Adjusted Other Expense77 — — — — 
Depreciation & Amortization6,834 2,179 2,493 954 780 
Stock Compensation Expense1,594 214 298 153 47 
Less: SLT Related Stock Compensation Expense(4)— — — — 
Adjusted Stock Compensation Expense1,590 214 298 153 47 
Adjusted EBITDA39,024 4,631 32,414 4,659 3,541 
Adjusted EBITDA Margin13.4 %7.8 %18.1 %14.0 %18.9 %
Cash Flow - Operating Activities38,045 
Purchase of PPE, Net(2,190)
Free Cash Flow35,855 
Free Cash Flow - % of Adjusted Net Sales12.3 %
*Adjusted Measures details are presented on the corresponding Reconciliation of Adjusted Financial Measures



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GIBRALTAR INDUSTRIES, INC.
Reconciliation of Adjusted Financial Measures
(in thousands)
(unaudited)

Three Months Ended
March 31, 2022
ConsolidatedRenewablesResidentialAgtechInfrastructure
Net Sales$317,865 $78,783 $179,485 $42,428 $17,169 
Less: Processing Net Sales(1,823)— — (1,823)— 
Adjusted Net Sales$316,042 $78,783 $179,485 $40,605 $17,169 
Net Income15,456 
Provision for Income Taxes5,101 
Interest Expense485 
Other Expense153 
Operating Profit21,195 (6,984)33,435 31 1,181 
Adjusted Measures*5,729 2,707 287 2,516 (63)
Adjusted Operating Profit26,924 (4,277)33,722 2,547 1,118 
Adjusted Operating Margin8.5 %(5.4)%18.8 %6.3 %6.5 %
Adjusted Other Expense153 — — — — 
Depreciation & Amortization6,336 2,143 2,053 1,319 783 
Less: Held for Sale Depreciation & Amortization(332)— — (332)— 
Adjusted Depreciation & Amortization6,004 2,143 2,053 987 783 
Stock Compensation Expense1,352 253 191 70 33 
Less: SLT Related Stock Compensation Recovery155 — — — — 
Adjusted Stock Compensation Expense1,507 253 191 70 33 
Adjusted EBITDA34,282 (1,881)35,966 3,604 1,934 
Adjusted EBITDA Margin10.8 %(2.4)%20.0 %8.9 %11.3 %
Cash Flow - Operating Activities(7,754)
Purchase of PPE, Net(4,402)
Free Cash Flow(12,156)
Free Cash Flow - % of Adjusted Net Sales(3.8)%
*Adjusted Measures details are presented on the corresponding Reconciliation of Adjusted Financial Measures