Exceeds Q2 Earnings Guidance, Achieving GAAP EPS of $0.41 and Adjusted EPS of $0.43

Maintains Guidance for Full-Year 2017

BUFFALO, N.Y.--(BUSINESS WIRE)--Jul. 27, 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 six-month period ended June 30, 2017. All financial metrics in this release reflect only the Company’s continuing operations unless otherwise noted.

Second-quarter Consolidated Results

Gibraltar reported the following consolidated results:

The Company reported second-quarter 2017 net sales of $248 million, essentially in line with its expectations as noted in its first-quarter earnings release. The 7 percent year-over-year sales decrease primarily reflects Gibraltar’s exit of the European industrial business, U.S. bar grating product line and the European residential solar racking business in 2016. GAAP and adjusted earnings exceeded Company guidance due to the strong performance of the Residential Products business.

The adjusted amounts for the second quarter 2017 and 2016 remove special items from both periods, as described in the appended reconciliation of adjusted financial measures.

Management Comments

“Gibraltar delivered another quarter of solid results, exceeding our earnings guidance,” said President and CEO Frank Heard. “Revenues were essentially in-line with our expectations as strong sales in our Residential segment and the continued benefits of our four-pillar value creation strategy partially offset expected headwinds, including lower backlog in our Industrial & Infrastructure segment as well as higher raw material costs.

“We continued to advance our four-pillar strategy, with several notable achievements: delivering 150 basis points of operating margin improvement through our 80/20 operational efficiency initiatives, improving our competitive position and financial results by effectively integrating our recent Package Concierge and Nexus acquisitions, and advancing our innovation strategy with new product development initiatives that are underway across all of our segments.”

Second-quarter Segment Results

Residential Products

For the second quarter, the Residential Products segment reported:

The 6 percent increase in second-quarter 2017 net sales in Gibraltar’s Residential Products segment reflects the continued improvement in the repair and remodel and new housing construction markets, growing demand for the Company’s commercial package solutions, and the contribution of the Package Concierge acquisition.

The segment’s GAAP and adjusted operating margin reflect the benefit of increased revenues as well as operational efficiencies stemming from 80/20 initiatives. The adjusted operating margin for the second quarter of 2017 and 2016 removes the special charges for restructuring initiatives under the 80/20 program from both periods.

Industrial & Infrastructure Products

For the second quarter, the Industrial & Infrastructure Products segment reported:

As expected, second-quarter 2017 net sales in Gibraltar’s Industrial & Infrastructure Products segment were down, with 80 percent of the decline driven by the 2016 divestiture of the European industrial operations and the US bar grating product line, with the remaining decline driven by lower activity in the infrastructure marketplace. Backlog for the segment increased on a sequential basis during the second quarter. The Company expects backlog improvement to continue throughout the second half of 2017, driven, in part, by the strengthening infrastructure market.

GAAP and adjusted operating margins were affected by higher raw material costs and lower volumes in the infrastructure market. This segment’s adjusted operating margin for the second quarters of 2017 and 2016 removes the special charges for portfolio management activities and restructuring initiatives under the 80/20 program. During the quarter, this segment continued to implement 80/20 simplification initiatives, which are expected to benefit margins during the second half of 2017.

Renewable Energy & Conservation

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

Segment revenues were down modestly year over year due to the exit of the European solar market, and continued softness in international markets, partially offset by the Nexus acquisition. Segment backlog increased from the prior year and sequentially compared with the first quarter of 2017.

The second-quarter 2017 GAAP and adjusted operating margin decrease reflects lower volume, planned price concessions, higher material costs and certain field installation issues. This segment’s adjusted operating margin for the second quarter 2017 removes the special charges for portfolio management activities related to the divestiture of the Company’s European residential solar racking business. The Company expects better volume leverage and improved price/material cost alignment as it moves into the seasonally strongest half of the year.

Business Outlook

“Looking toward the second half of 2017, we continue to expect generally favorable market conditions for each of our segments, increased bidding activity and continued backlog growth in both our Industrial & Infrastructure and Renewable Energy & Conservation segments, as well as increased revenues from our new product development initiatives,” said Heard. “As we head into our seasonally strongest quarter, we are maintaining our full year guidance.

“For the second half of 2017 our financial priorities will be to accelerate sales through innovative products, seek value-added acquisitions in attractive end markets, and continue to advance our 80/20 initiatives,” concluded Heard.

The Company is maintaining its full-year revenue guidance in the range of $970 million and $980 million. The Company expects GAAP EPS to be between $1.37 and $1.50 per diluted share, or $1.57 to $1.70 on an adjusted basis. In 2016, GAAP EPS was $1.05, or $1.67 on an adjusted basis. While year-over-year adjusted earnings are projected to be flat, the Company continues to expect increasing ROIC and liquidity.

For the third quarter of 2017, the Company is expecting revenue in the range of $275 million to $280 million, and GAAP EPS to be between $0.51 and $0.58 per diluted share, or $0.58 to $0.65 per diluted share on an adjusted basis.

Second-quarter Conference Call Details

Gibraltar has scheduled a conference call today starting at 9:00 a.m. ET to review its results for the second quarter of 2017. 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 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 and nine-month periods ending September 30, 2017, on Friday, November 3, 2017, and hold its earnings conference call later that morning, starting at 9:00 a.m. ET.

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Source: Gibraltar Industries, Inc.

Gibraltar Industries, Inc.
Timothy Murphy, 716-826-6500 ext. 3277
Chief Financial Officer
tfmurphy@gibraltar1.com