EX-99.1 2 exhibit991q22021earningsre.htm EX-99.1 Document

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Gibraltar Announces Second Quarter 2021 Financial Results

Q2 Revenue Increases 37%, including 14% Organic and 23% Growth from Acquisitions
GAAP and Adjusted EPS Up 8% and 7%, Respectively, to $0.80
Record Order Backlog Exceeds $400 Million, Led by Renewables
Reaffirming Full Year Revenue and EPS Guidance

Buffalo, New York, August 3, 2021 - 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 June 30, 2021.

“In the midst of a dynamic and inflationary market environment, we delivered solid performance with revenue growth of 37%, adjusted operating income growth of 8%, adjusted EPS growth of 7%, and order backlog increased 54%, or 32% on a proforma basis, to over $400 million, the highest level in the history of the company,” President and Chief Executive Officer Bill Bosway stated. “Material cost inflation continued to accelerate as we exited the first quarter, and labor, freight, and logistics inflation and availability began to surface as we entered the second quarter. Working closely with customers and suppliers starting during fourth quarter 2020 and implementing ongoing pricing and productivity initiatives has helped us manage these dynamics and deliver this quarter’s results. Additionally, the integrations of TerraSmart and Sunfig are on track, our Agtech business is recovering as planned, and overall demand is currently in line with expectations.”
Second Quarter 2021 Consolidated Results from Continuing Operations
Net sales from continuing operations increased 36.5% to $348.4 million, with organic growth contributing 14.0% and recent acquisitions 22.5%. Organic growth was driven by strong end market demand and participation gains in all four segments.
GAAP earnings increased 7.8% to $26.4 million, or $0.80 per share, and adjusted earnings increased 6.9% to $26.3 million, or $0.80 per share, the result of continued execution across the business segments, the TerraSmart acquisition, and 80/20 productivity initiatives, partially offset by timing and alignment of higher input costs and price increases, supply chain disruptions, and shifts in project timing in the Agtech and Renewables segments. Adjusted measures remove charges for restructuring initiatives, acquisition-related items, senior leadership transition costs, and other reclassifications, as further described in the appended reconciliation of adjusted financial measures.
Below are second quarter 2021 consolidated results from continuing operations:




Three Months Ended June 30,
$Millions, except EPSGAAPAdjusted
20212020% Change20212020% Change
Net Sales$348.4$255.236.5%$348.4$255.236.5%
Net Income$26.4$24.57.8%$26.3$24.66.9%
Diluted EPS$0.80$0.748.1%$0.80$0.756.7%

Second Quarter Segment Results

Renewables
The headwinds impacting the solar industry in the first quarter, including steel inflation, supply chain challenges with panels, and the safe harbor ITC extension announced in December 2020, continued into the second quarter. Despite this, the Renewable business continued to accelerate, delivering year-over-year revenue growth of 92.5% through the combination of the legacy and TerraSmart businesses and pro forma organic growth of 25%. Growth was driven by strong demand across Gibraltar’s broad offering of fixed tilt, tracker, canopy, and eBos product solutions serving the community and commercial and industrial market segments.  Order backlog exceeded $218 million at the end of the quarter, up 54% from last year on a proforma basis, its highest level in the company’s history. The integration of the legacy and TerraSmart businesses remains on track, and the combination of the two is resonating well in the market.
Adjusted operating income improved 45.2% while adjusted operating margin contracted 380 basis points, the majority of which was anticipated, and related to the integration of TerraSmart. The TerraSmart integration is delivering as expected with adjusted operating margins nearly doubling over the first quarter as demand continued to accelerate and 80/20 productivity initiatives were implemented, and TerraSmart’s full-year margin plan remains on track.  Of the remaining shortfall, approximately half was related to a one-time tariff credit received in Q2 2020, with the remaining the result of timing and alignment of price actions with input cost inflation and project movement related to supply chain schedule and logistics challenges.
For the second quarter, the Renewables segment reported:
Three Months Ended June 30,
$MillionsGAAPAdjusted
20212020% Change20212020% Change
Net Sales$107.8$56.092.5%$107.8$56.092.5%
Operating Income$9.5$8.413.1%$12.2$8.445.2%
Operating Margin8.8%15.1%(630) bps11.3%15.1%(380) bps

Residential




Revenue increased 17.7% with strong organic growth of 12% driven by increased pricing and volume, despite supply chain dynamics related to material, labor and logistics availability; Architectural Mailboxes, acquired in 2020, contributed 6% of the quarter’s growth and integration remains on track.
The business delivered adjusted operating margin of 16.6%, a decrease versus last year, driven by the impact of accelerated inflation, material and labor availability, and the timing and alignment of price actions with input costs. Gibraltar has implemented multiple price increases, and will continue to do so until inflation subsides. In accordance with customer supply agreements, each price action will take time to align with accelerating inflation, with operating margin historically recovering within a one or two quarter period. In the near term, management will continue to maximize operating profit dollars with focus on execution and 80/20 productivity initiatives.
For the second quarter, the Residential segment reported:
Three Months Ended June 30,
$MillionsGAAPAdjusted
20212020% Change20212020% Change
Net Sales$164.2$139.517.7%$164.2$139.517.7%
Operating Income$27.2$28.0(2.9%)$27.2$28.2(3.5%)
Operating Margin16.5%20.0%(350) bps16.6%20.2%(360) bps

Agtech
Revenue increased 27.0% with solid activity across the produce, commercial, car wash, retail, and processing equipment segments. Although demand continued to improve, the business experienced project movement from the second quarter into the second half of 2021 as schedules have been impacted by permit delays, rescoping of projects, and supply chain disruptions. Order backlog experienced a slight and temporary contraction during the quarter due to rescoping of projects and the impact of supply chain disruptions. July customer order activity is accelerating backlog momentum, and the segment remains on track with expectations for the year.

Adjusted operating income was flat year-over-year and adjusted operating margin expanded 180 basis points on a sequential basis as the processing equipment business continued to improve along with continuing benefits of integration in the produce business. Adjusted operating margin contracted year-over-year due to business mix, the movement of certain abovementioned projects into the second half of the year, higher input costs and logistics challenges. These temporary headwinds were partially offset by improvements in legacy greenhouse structures, cannabis greenhouse structures, and cannabis and hemp processing equipment businesses.
For the second quarter, the Agtech segment reported:




Three Months Ended June 30,
$MillionsGAAPAdjusted
20212020% Change20212020% Change
Net Sales$53.7$42.327.0%$53.7$42.327.0%
Operating Income$1.0$0.825.0%$2.3$2.3--
Operating Margin1.8%1.8%-- bps4.2%5.5%(130) bps

Infrastructure
Revenue increased 29.7% as demand for fabricated and non-fabricated products increased as State D.O.T. project funding improved with the strengthening of the U.S. economy. Order backlog increased 11% to more than $46 million during the quarter indicating growing strength across the business.
Improvement in adjusted operating margin was driven by mix of higher-margin non-fabricated products and solutions, strong execution on higher volumes, and continued investment in 80/20 productivity initiatives.
For the second quarter, the Infrastructure segment reported:
Three Months Ended June 30,
$MillionsGAAPAdjusted
20212020% Change20212020% Change
Net Sales$22.7$17.529.7%$22.7$17.529.7%
Operating Income$4.2$2.850.0%$4.2$2.850.0%
Operating Margin18.4%16.0%240 bps18.4%16.0%240 bps

Business Outlook
“We expect today’s business environment, which has been very dynamic since the beginning of January, to remain so throughout the second half of 2021. We will continue to manage inflation, minimize supply chain disruptions, operate in a tight labor market, and continue with our COVID operating protocols. We are currently positioned well with solid end market demand, record order backlog, a very healthy balance sheet, and strong focus on daily execution, acquisition integrations, and further strengthening our organization and operating systems,“ commented Mr. Bosway. “We remain confident in our existing full year 2021 guidance for revenue and earnings. We base this on our performance to date in 2021, which is consistent with historical patterns, and our current outlook and initiatives for improving profitability across each business. Consolidated revenue is expected to range between $1.3 billion and $1.35 billion. GAAP EPS from continuing operations is expected to range between $2.78 and $2.95 compared to $2.53 in 2020, and adjusted EPS from continuing operations is expected to range between $3.30 and $3.47 compared to $2.73 in 2020.”




Second Quarter 2021 Conference Call Details
Gibraltar will host a conference call today starting at 9:00 a.m. ET to review its results for the second quarter of 2021. Interested parties may access the webcast through the Investors section of the Company’s website at www.gibraltar1.com or dial into the call at (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.
About Gibraltar
Gibraltar Industries is a leading manufacturer and provider of products and services for the renewable energy, residential, agtech and infrastructure markets. With a three-pillar strategy focused on business systems, portfolio management, and organization and talent development, Gibraltar’s mission is to create compounding and sustainable value with strong leadership positions in higher growth, profitable end markets. Gibraltar serves customers primarily throughout North America. Comprehensive information about Gibraltar can be found on its website at 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 impacts of COVID-19 on the global economy and on our customers, suppliers, employees, operations, business, liquidity and cash flows, other general economic conditions and conditions in the particular markets in which we operate, 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, 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. Adjusted financial measures exclude special charges consisting of restructuring costs primarily associated with 80/20 simplification initiatives, senior leadership transition costs, acquisition related costs, and other reclassifications. These adjustments are shown in the reconciliation of adjusted financial measures excluding special charges provided in the supplemental financial schedules that accompany this news release. The Company believes that the presentation of results excluding special charges provides meaningful supplemental data to investors, as well as management, 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. Special charges are excluded since they may not be considered directly related to the Company’s ongoing business operations. 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.

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







GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
(unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
 2021202020212020
Net Sales$348,389 $255,184 $635,981 $470,585 
Cost of sales267,458 189,623 495,032 355,163 
Gross profit80,931 65,561 140,949 115,422 
Selling, general, and administrative expense49,522 34,813 96,725 71,897 
Income from operations31,409 30,748 44,224 43,525 
Interest expense245 222 689 266 
Other income(4,666)(1,892)(4,351)(1,374)
Income before taxes35,830 32,418 47,886 44,633 
Provision for income taxes9,457 7,961 11,017 10,274 
Income from continuing operations26,373 24,457 36,869 34,359 
Discontinued operations:
(Loss) income before taxes(502)3,746 2,068 6,576 
(Benefit of) provision for income taxes(78)911 226 1,584 
(Loss) income from discontinued operations(424)2,835 1,842 4,992 
Net income$25,949 $27,292 $38,711 $39,351 
Net earnings per share – Basic:
Income from continuing operations$0.80 $0.75 $1.12 $1.05 
(Loss) income from discontinued operations(0.01)0.09 0.06 0.16 
Net income$0.79 $0.84 $1.18 $1.21 
Weighted average shares outstanding -- Basic32,790 32,605 32,791 32,596 
Net earnings per share – Diluted:
Income from continuing operations$0.80 $0.74 $1.11 $1.05 
(Loss) income from discontinued operations(0.01)0.09 0.06 0.15 
Net income$0.79 $0.83 $1.17 $1.20 
Weighted average shares outstanding -- Diluted33,056 32,860 33,071 32,868 




GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
June 30,
2021
December 31,
2020
(unaudited)
Assets
Current assets:
Cash and cash equivalents$16,963 $32,054 
Accounts receivable, net of allowance of $5,294 and $3,529225,315 197,990 
Inventories, net133,625 98,307 
Prepaid expenses and other current assets23,641 19,671 
Assets of discontinued operations— 77,438 
Total current assets399,544 425,460 
Property, plant, and equipment, net95,837 89,562 
Operating lease assets21,651 25,229 
Goodwill508,857 514,279 
Acquired intangibles159,734 156,365 
Other assets510 1,599 
$1,186,133 $1,212,494 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$168,917 $134,738 
Accrued expenses68,677 83,505 
Billings in excess of cost49,215 34,702 
Liabilities of discontinued operations— 49,295 
Total current liabilities286,809 302,240 
Long-term debt32,309 85,636 
Deferred income taxes37,555 39,057 
Non-current operating lease liabilities14,391 17,730 
Other non-current liabilities27,461 24,026 
Stockholders’ equity:
Preferred stock, $0.01 par value; authorized 10,000 shares; none outstanding— — 
Common stock, $0.01 par value; 100,000 and 50,000 shares authorized as June 30, 2021 and December 31, 2020, respectively; 33,718 shares and 33,568 shares issued and outstanding in 2021 and 2020
337 336 
Additional paid-in capital310,728 304,870 
Retained earnings508,654 469,943 
Accumulated other comprehensive income (loss)1,552 (2,461)
Cost of 1,083 and 1,028 common shares held in treasury in 2021 and 2020(33,663)(28,883)
Total stockholders’ equity787,608 743,805 
$1,186,133 $1,212,494 





GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Six Months Ended
June 30,
 20212020
Cash Flows from Operating Activities
Net income $38,711 $39,351 
Income from discontinued operations1,842 4,992 
Income from continuing operations36,869 34,359 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization16,014 9,942 
Stock compensation expense4,935 4,171 
Gain on sale of business— (1,881)
Exit activity costs, non-cash1,193 346 
Benefit of deferred income taxes(36)(195)
Other, net349 429 
Changes in operating assets and liabilities, excluding the effects of acquisitions:
Accounts receivable(29,150)(26,289)
Inventories(42,686)3,289 
Other current assets and other assets(611)1,893 
Accounts payable35,174 (989)
Accrued expenses and other non-current liabilities(9,274)(36,042)
Net cash provided by (used in) operating activities of continuing operations12,777 (10,967)
Net cash (used in) provided by operating activities of discontinued operations(2,002)3,712 
Net cash provided by (used in) operating activities 10,775 (7,255)
Cash Flows from Investing Activities
Acquisitions, net of cash acquired(2)(54,385)
Net proceeds from sale of property and equipment— 59 
Purchases of property, plant, and equipment(9,474)(4,178)
Net proceeds from sale of business39,991 704 
Net cash provided by (used in) investing activities of continuing operations30,515 (57,800)
Net cash used in investing activities of discontinued operations(176)(1,053)
Net cash provided by (used in) investing activities30,339 (58,853)
Cash Flows from Financing Activities
Proceeds from long-term debt31,200 — 
Long-term debt payments(83,636)— 
Purchase of treasury stock at market prices(4,780)(4,462)
Net proceeds from issuance of common stock924 78 
Net cash used in financing activities(56,292)(4,384)
Effect of exchange rate changes on cash87 (12)
Net decrease in cash and cash equivalents(15,091)(70,504)
Cash and cash equivalents at beginning of year32,054 191,363 
Cash and cash equivalents at end of period$16,963 $120,859 




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

Three Months Ended
June 30,2021
As Reported In GAAP StatementsRestructuring ChargesSenior Leadership Transition CostsAcquisition Related ItemsAdjusted Financial Measures
Net Sales
Renewables$107,751 — — — $107,751 
Residential164,209 — — — 164,209 
Agtech53,696 — — — 53,696 
Infrastructure22,733 — — — 22,733 
Consolidated sales348,389 — — — 348,389 
Income from operations
Renewables9,510 786 — 1,858 12,154 
Residential27,155 29 — — 27,184 
Agtech977 1,287 — — 2,264 
Infrastructure4,186 — — — 4,186 
Segments Income41,828 2,102 — 1,858 45,788 
Unallocated corporate expense(10,419)59 18 32 (10,310)
Consolidated income from operations31,409 2,161 18 1,890 35,478 
Interest expense245 — — — 245 
Other (income) expense(4,666)— — 4,747 81 
Income before income taxes35,830 2,161 18 (2,857)35,152 
Provision for income taxes9,457 507 (1,149)8,820 
Income from continuing operations$26,373 $1,654 $13 $(1,708)$26,332 
Income from continuing operations per share - diluted$0.80 $0.05 $— $(0.05)$0.80 
Operating margin
Renewables8.8 %0.7 %— %1.7 %11.3 %
Residential16.5 %— %— %— %16.6 %
Agtech1.8 %2.4 %— %— %4.2 %
Infrastructure18.4 %— %— %— %18.4 %
Segments Margin12.0 %0.6 %— %0.5 %13.1 %
Consolidated9.0 %0.6 %— %0.5 %10.2 %






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

Three Months Ended
June 30, 2020
As Reported In GAAP StatementsRestructuring & Senior Leadership Transition CostsAcquisition CostsGain on Sale of BusinessAdjusted Financial Measures
Net Sales
Renewables$55,950 $— $— $— $55,950 
Residential139,472 — — — 139,472 
Agtech42,309 — — — 42,309 
Infrastructure17,453 — — — 17,453 
Consolidated sales255,184 — — — 255,184 
Income from operations
Renewables8,422 — — — 8,422 
Residential27,964 263 — — 28,227 
Agtech766 388 1,172 — 2,326 
Infrastructure2,801 — — — 2,801 
Segments Income39,953 651 1,172 — 41,776 
Unallocated corporate expense(9,205)161 50 — (8,994)
Consolidated income from operations30,748 812 1,222 — 32,782 
Interest expense222 — — — 222 
Other income(1,892)— — 1,881 (11)
Income before income taxes32,418 812 1,222 (1,881)32,571 
Provision for income taxes7,961 170 274 (469)7,936 
Income from continuing operations$24,457 $642 $948 $(1,412)$24,635 
Income from continuing operations per share - diluted$0.74 $0.02 $0.03 $(0.04)$0.75 
Operating margin
Renewables15.1 %— %— %— %15.1 %
Residential20.0 %0.2 %— %— %20.2 %
Agtech1.8 %0.9 %2.8 %— %5.5 %
Infrastructure16.0 %— %— %— %16.0 %
Segments Margin15.7 %0.3 %0.5 %— %16.4 %
Consolidated12.0 %0.3 %0.5 %— %12.8 %





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

Six Months Ended
June 30, 2021
As Reported In GAAP StatementsRestructuring ChargesSenior Leadership Transition CostsAcquisition Related ItemsAdjusted Financial Measures
Net Sales
Renewables$193,263 — — — $193,263 
Residential304,426 — — — 304,426 
Agtech100,435 — — — 100,435 
Infrastructure37,857 — — — 37,857 
Consolidated sales635,981 — — — 635,981 
Income from operations
Renewables8,989 5,757 — 3,758 18,504 
Residential50,089 94 — — 50,183 
Agtech1,906 1,491 — — 3,397 
Infrastructure6,223 — — — 6,223 
Segments Income67,207 7,342 — 3,758 78,307 
Unallocated corporate expense(22,983)59 1,307 915 (20,702)
Consolidated income from operations44,224 7,401 1,307 4,673 57,605 
Interest expense689 — — — 689 
Other (income) expense(4,351)— — 4,747 396 
Income before income taxes47,886 7,401 1,307 (74)56,520 
Provision for income taxes11,017 1,880 311 (442)12,766 
Income from continuing operations$36,869 $5,521 $996 $368 $43,754 
Income from continuing operations per share - diluted$1.11 $0.17 $0.03 $0.01 $1.32 
Operating margin
Renewables4.7 %3.0 %— %1.9 %9.6 %
Residential16.5 %— %— %— %16.5 %
Agtech1.9 %1.5 %— %— %3.4 %
Infrastructure16.4 %— %— %— %16.4 %
Segments Margin10.6 %1.2 %— %0.6 %12.3 %
Consolidated7.0 %1.2 %0.2 %0.7 %9.1 %








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

Six Months Ended
June 30, 2020
As Reported In GAAP StatementsRestructuring & Senior Leadership Transition CostsAcquisition CostsGain on Sale of BusinessAdjusted Financial Measures
Net Sales
Renewables$103,213 $— $— $— $103,213 
Residential242,891 — — — 242,891 
Agtech91,543 — — — 91,543 
Infrastructure32,938 — — — 32,938 
Consolidated sales470,585 — — — 470,585 
Income from operations
Renewables12,781 18 — — 12,799 
Residential41,689 484 — — 42,173 
Agtech2,106 388 2,173 — 4,667 
Infrastructure4,377 — — — 4,377 
Segments Income60,953 890 2,173 — 64,016 
Unallocated corporate expense(17,428)2,441 309 — (14,678)
Consolidated income from operations43,525 3,331 2,482 — 49,338 
Interest expense266 — — — 266 
Other (income) expense(1,374)— — 1,881 507 
Income before income taxes44,633 3,331 2,482 (1,881)48,565 
Provision for income taxes10,274 229 590 (469)10,624 
Income from continuing operations$34,359 $3,102 $1,892 $(1,412)$37,941 
Income from continuing operations per share - diluted$1.05 $0.09 $0.05 $(0.04)$1.15 
Operating margin
Renewables12.4 %— %— %— %12.4 %
Residential17.2 %0.2 %— %— %17.4 %
Agtech2.3 %0.4 %2.4 %— %5.1 %
Infrastructure13.3 %— %— %— %13.3 %
Segments Margin13.0 %0.2 %0.5 %— %13.6 %
Consolidated9.2 %0.7 %0.5 %— %10.5 %