• Full Year GAAP EPS of $1.05 versus $0.74 PY; Adjusted EPS of $1.67 versus $1.09 PY
• 4Q GAAP EPS of $(0.24) on charges for portfolio changes; versus $0.01 PY
• 4Q Adjusted EPS of $0.30 versus $0.29 PY
• ROIC rises to 11.7%; vs 8.1% PY

BUFFALO, N.Y.--(BUSINESS WIRE)--Feb. 17, 2017-- Gibraltar Industries, Inc. (Nasdaq: ROCK), a leading manufacturer and distributor of building products for industrial, infrastructure, residential, and renewable energy and conservation markets, today reported its financial results for the three- and twelve-month periods ended December 31, 2016. All financial metrics in this release reflect only the Company’s continuing operations unless otherwise noted.

Consolidated Results

Gibraltar reported the following consolidated results:

The Company reported fourth-quarter 2016 net sales of $232 million, an 18 percent decrease year-over-year, due to weaker industrial markets as well as non-recurring revenues resulting from the European industrial business divestiture and a completed mail contract. Fourth-quarter GAAP net income was down $7.9 million versus the prior year, primarily due to charges to exit certain product lines, while up 4 percent on an adjusted net income basis. The adjusted amounts for the fourth quarter 2016 and 2015 remove special items from both periods, as described in the appended reconciliation of adjusted financial measures.

For the twelve months ended December 31, 2016, the Company reported a 43 percent increase in GAAP net income to $33.7 million, or $1.05 per diluted share, compared with $23.5 million, or $0.74 per diluted share, in the prior-year period. Revenues of $1.0 billion were equivalent to the prior year amid portfolio changes and certain non-comparative contracts. Adjusted results for the twelve-month period also increased to adjusted net income of $53.6 million, or $1.67 per diluted share, up 56 percent and 53 percent, respectively, compared with the prior-year period. The meaningful increase in net earnings stems from the ongoing improvements from 80/20 simplification initiatives and from continued strong results from the Renewable Energy and Conservation segment in 2016.

Management Comments

“We concluded a successful year with a solid fourth-quarter performance in which we exceeded our expectations for profitability,” said Chief Executive Officer Frank Heard. “Gibraltar’s continued success is the result of the ongoing execution of all four of our strategic pillars to drive the sustainable transformation of our business. During the fourth quarter, the Residential Products and the Renewable Energy and Conservation segments continued to generate strong bottom-line results through our 80/20 simplification initiatives. As a result, we reported a 13 percent increase in consolidated adjusted operating income despite an 18 percent decline in consolidated net sales.

“In our Industrial and Infrastructure segment, we are proactively taking actions to address our cost structure to minimize the impact of ongoing market pressures including weaker incoming order volume,” said Heard. “To that end, after divesting our European industrial operation in the second quarter, we announced plans in December to exit our industrial U.S. bar grating product line, along with a small European residential solar racking business. While negatively affecting revenues going forward, this action will be accretive to our earnings beginning in the first quarter 2017.

“By focusing on operational excellence, portfolio management, product innovation and accretive acquisitions, we have delivered enhanced profitability at a higher rate of return with a more efficient use of capital every quarter for the past two years,” said Heard. “Two years into our five-year transformative strategy, we have added nearly 900 basis points to adjusted gross margin, doubled our consolidated adjusted operating margin to 9.4 percent, nearly tripled the return on invested capital to 11.7 percent and positioned our business to generate a higher level of returns going forward.”

Fourth-quarter Segment Results

Residential Products

For the fourth quarter, the Residential Products segment reported:

Fourth-quarter 2016 net sales in Gibraltar’s Residential Products segment, compared to the prior year period, primarily reflect the completion of a two-year contract for centralized mailboxes as of December 2015. The demand from repair and remodeling activities and new housing construction continued to be stable year over year.

The increase in segment GAAP operating margin reflects the benefit of improved operational efficiencies and contributions from the 80/20 simplification initiative, as well as the completion of the centralized mailbox contract completed in December 2015, which provided low profitability in the fourth quarter of 2015. The adjusted operating margin for the fourth quarter of 2016 and 2015 remove the special charges for restructuring initiatives under the 80/20 program from both periods.

Industrial and Infrastructure Products

For the fourth quarter, the Industrial and Infrastructure Products segment reported:

Fourth-quarter 2016 net sales in Gibraltar’s Industrial & Infrastructure Products segment were down 27 percent, reflecting a 9 percent effect from the European industrial business divestiture as well as lower volume due to weaker energy-related and commodity markets. Decreased order rates and profitability from the U.S. bar grating product line had a significant impact on the segment’s operating results in the fourth quarter of 2016.

The segment’s fourth-quarter adjusted operating margin decreased 480 basis points due to lower volumes, partially offset by 80/20 simplification initiatives. This segment’s adjusted operating margin for the fourth quarter 2016 and 2015 remove special charges for restructuring and portfolio management initiatives under the 80/20 program.

Renewable Energy and Conservation

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

Segment revenues decreased 14 percent from the year-earlier period as a result of a difficult comparison with the fourth quarter of 2015 when volume benefited from the then-expected reduction in the U.S. federal investment tax credit.

The segment’s fourth-quarter 2016 GAAP operating income and margins increased meaningfully, reflecting benefits from diligent execution of operational efficiencies in the segment as well as the elimination of amortization for certain, short-lived acquisition-related expenses. This segment’s adjusted operating margin removes the special charges for acquisition-related costs and portfolio management initiatives from the fourth quarter of 2016 and 2015.

Business Outlook

“For 2017, we expect generally favorable market conditions aiding top-line growth of our Residential Products and Renewable Energy and Conservation segments. All three of our segments are working to expand into adjacent product categories and applications with new products, and we expect these efforts to contribute incrementally to 2017 sales and beyond. At the same time, our consolidated results will be challenged on the top-line and bottom-line by several factors, including a difficult comparable as a result of exiting certain product lines, increased spending on innovative new products, and raw material price inflation. Nonetheless, taken together, we are poised to deliver a third consecutive year of sequential and meaningful financial improvement, in terms of absolute profit dollars, returns and cash flow,” concluded Heard.

The Company is providing its guidance for revenues and earnings for the full year 2017. Gibraltar expects 2017 consolidated revenues to approximate $1.0 billion, equivalent to 2016, despite unfavorable comparisons including discontinued product lines and the expected decrease in the first quarter 2017. GAAP EPS for the full year 2017 is expected to be between $1.55 and $1.65 per diluted share, or $1.75 to $1.85 on an adjusted basis, as compared to $1.05 and $1.67, respectively, in 2016.

For the first quarter 2017, revenues are expected to decrease nearly 15 percent compared to the prior year period as a result of a lower order backlog as of January 1^st in our Renewable Energy and Conservation segment as well as the portfolio management actions undertaken to drive higher profitability and returns. The effects of lower sales volume and rising commodity costs net of pricing actions will contribute to an expected result in GAAP EPS of between $0.10 and $0.14 per diluted share, or $0.17 to $0.21 on an adjusted basis.

Relative to GAAP profitability and EPS for 2017, Gibraltar may complete additional restructuring initiatives and incur costs as part of its ongoing simplification initiative under its four-pillar strategy. Any new projects and any significant changes in the nature and scope of identified projects would affect changes in the Company’s expected GAAP EPS for the year.

Fourth-quarter Conference Call Details

Gibraltar has scheduled a conference call today starting at 9:00 a.m. ET to review its results for the fourth quarter of 2016. Interested parties may access the call by dialing (877) 407-5790 or (201) 689-8328. The presentation slides that will be discussed in the conference call are expected to be available this morning, prior to the start of the call. The slides may be downloaded from the Gibraltar website: www.gibraltar1.com. A webcast replay of the conference call and a copy of the transcript will be available on the website following the call.

About Gibraltar

Gibraltar Industries is a leading manufacturer and distributor of building products for industrial, infrastructure, residential, and renewable energy and conservation markets. With a four-pillar strategy focused on operational improvement, product innovation, acquisitions and portfolio management, Gibraltar’s mission is to drive best-in-class performance. Gibraltar serves customers primarily throughout North America, and to a lesser extent Asia. Comprehensive information about Gibraltar can be found on its website at www.gibraltar1.com.

Safe Harbor Statement

Information contained in this news release, other than historical information, contains forward-looking statements and is subject to a number of risk factors, uncertainties, and assumptions. Risk factors that could affect these statements include, but are not limited to, the following: the availability of raw materials and the effects of changing raw material prices on the Company’s results of operations; energy prices and usage; changing demand for the Company’s products and services; changes in the liquidity of the capital and credit markets; risks associated with the integration and performance of acquisitions; and changes in interest and tax rates. In addition, such forward-looking statements could also be affected by general industry and market conditions, as well as general economic and political conditions. 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.

Non-GAAP Financial Data

To supplement Gibraltar’s consolidated financial statements presented on a GAAP basis, Gibraltar also presented certain adjusted financial data in this news release. Adjusted financial data excluded special charges consisting of portfolio management charges, gains/losses on sales of assets, restructuring primarily associated with the 80/20 simplification initiative, acquisition-related items, and other reclassifications. These adjustments are shown in the non-GAAP 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.

Next Earnings Announcement

Gibraltar expects to release its financial results for the three-month period ending March 31, 2017, on Friday, May 5, 2017, and hold its earnings conference call later that morning, starting at 9:00 a.m. ET.

View source version on businesswire.com: http://www.businesswire.com/news/home/20170217005325/en/

Source: Gibraltar Industries, Inc.

Gibraltar Industries, Inc.
Kenneth Smith, 716-826-6500 ext. 3217
Chief Financial Officer
kwsmith@gibraltar1.com