Gibraltar Delivers Record Revenue and EPS performance in 2020

2020 Revenues Grow 15%, GAAP, Adjusted EPS Expands 38% and 18%, Respectively

Q4 Revenues Improves 17%, GAAP, Adjusted EPS Up 15% and 4%, Respectively

Backlog 50% Higher on Continued Renewable Energy and Conservation Demand

BUFFALO, N.Y.--(BUSINESS WIRE)--Feb. 25, 2021-- Gibraltar Industries, Inc. (Nasdaq: ROCK), a leading manufacturer and provider of products and services for the renewable energy, conservation, residential and infrastructure markets, today reported its financial results for the three-month period ended December 31, 2020. Results of TerraSmart, acquired at the end of the day on December 31, 2020, had no impact on operations in 2020 in reported results.

“Overall, we delivered record performance in 2020 while remaining very focused on the health and well-being of our people, operations, customers, and communities. We also worked on the business, executed key initiatives, and generated strong cash flow, enabling material investments to support our long term strategy,” said President and Chief Executive Officer Bill Bosway. “Our fourth quarter performance was solid with revenue increasing 17% and adjusted EPS increasing 4%, and we enter 2021 with a strong backlog of approximately $300 million, up 50%, and a strong balance sheet and cash flow profile to continue driving our key initiatives.”

Fourth Quarter 2020 Consolidated Results from Continuing Operations*

Gibraltar reported the following consolidated results from continuing operations:

Fourth quarter 2020 net sales from continuing operations increased 17.3% to $265.2 million, driven by the Residential Products and Renewable Energy & Conservation segments. Of the 17.3% increase, organic growth accounted for 3.6%, and recent acquisitions contributed 13.7%.

GAAP earnings increased 17.3% to $17.6 million, or $0.53 per share, while adjusted earnings increased 4.8% to $19.5 million, or $0.59 per share, the result of organic growth and continued margin expansion in the Residential Products segment, product and services mix, favorable alignment of price to material costs, and ongoing benefits from operational excellence initiatives. 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.

*Gibraltar has classified the Industrial business as a discontinued operation with fourth quarter 2020 results. Included in fourth quarter 2020 loss from discontinued operations of $26.1 million is a non-cash loss of $29.6 million related to the disposal of this business.

Fourth Quarter Segment Results

Renewable Energy & Conservation

The acquisition of TerraSmart, an important addition to Gibraltar’s renewable energy business, was completed on December 31, 2020. TerraSmart delivered 2020 revenue of $157 million and adjusted EBITDA of $26 million, in line with expectations creating a business with approximately $400M in revenue and operating margin in excess of 12% on a Pro Forma basis as we enter 2021. TerraSmart’s 2020 results did not impact Gibraltar’s Q4 2020 results.

For the fourth quarter, the Renewable Energy & Conservation segment reported:

Segment revenue increased 11.8% driven by growth from acquisitions. Organic revenue slowed during the quarter driven by certain market dynamics. Solar customers experienced unanticipated solar panel supply challenges and building permit delays causing temporary delays to existing projects slated for the fourth quarter. In the conservation business, market conditions for greenhouse structures and processing extraction equipment serving the cannabis and hemp markets remain slow, but the positive momentum in order activity and backlog over the last 60 days supports our previous expectation of these two markets being solid in 2021. Total segment backlog continued to grow, increasing 55%, driven by continued strength in both solar energy and organic produce end markets.

Adjusted operating margin performance was driven by a reduction in solar volume as existing solar projects moved into 2021. We expect the solar panel supply challenges to subside in the first half of 2021. We also experienced a delay to our integration plan of Thermo Energy Systems (TES), which is located in Canada, due to mandated Covid-19 visitation and travel restrictions between the U.S. and Canada. The slower greenhouse structures and processing equipment market for cannabis and hemp impacted volume and productivity initiatives in the quarter creating a margin drag accordingly.

Residential Products

For the fourth quarter, the Residential Products segment reported:

Segment revenue increased 26.7% as the residential market continued to show solid activity, with strong demand and participation gains across all channels. Organic growth was 21.4%, with the acquired Architectural Mailboxes business contributing 5.3% growth. Adjusted operating margin increased with consistent execution on higher volume, and additional 80/20 initiatives.

Infrastructure Products

As noted above, Gibraltar completed the sale of the Industrial business on February 23, 2021. The results of the Industrial business are included as discontinued operations and the assets and liabilities have been reclassified as held-for-sale in fourth quarter 2020 results.

For the fourth quarter, the Infrastructure Products segment reported:

Segment revenue decreased 7.5% as the pandemic continued to impact existing and new project schedules, especially in segments like airport runway maintenance, where customers have delayed spending. The increase in adjusted operating margin was driven by strong execution in fabricated product sales which has offset a decline in our higher margin non-fabricated product lines. Infrastructure backlog improved modestly, but bidding activity has approached record levels moving into 2021.

Business Outlook

“We enter 2021 with momentum across our businesses and confidence in our end markets, and we will continue executing our operating playbook, maintaining a safe environment for our people and supporting our customers,” Mr. Bosway concluded. “Although we are dealing with challenging short term market dynamics, I am confident we will deliver full year growth and margin expansion in 2021.”

Gibraltar is providing guidance for revenue and earnings for the full year 2021. Consolidated revenue is expected to range between $1.3 billion and $1.35 billion. GAAP EPS is expected to range between $2.78 and $2.95, compared to $2.53 in 2020, and adjusted EPS is expected to range between $3.30 and $3.47, compared to $2.73 in 2020.

Fourth Quarter 2020 Conference Call Details

Gibraltar will host a conference call today starting at 9:00 a.m. ET to review its results for the fourth quarter of 2020. 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, conservation, residential, 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, early debt repayment, acquisition related costs, restatement of previously reported adjusted financial measures to account for discontinued operations 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.