• Sales and Adjusted EPS Exceed Top End of Guidance
• End Markets Continue Gradual Improvement
• Frank Heard to Become CEO on January 1; Brian Lipke to Remain Chairman

BUFFALO, N.Y.--(BUSINESS WIRE)--Oct. 28, 2014-- Gibraltar Industries, Inc. (Nasdaq: ROCK), a leading manufacturer and distributor of products for residential and industrial markets, today reported its financial results for the three- and nine-month periods ended September 30, 2014. All financial metrics in this release reflect only the Company’s continuing operations unless otherwise noted.

The Company also announced in a separate news release today that current President and Chief Operating Officer Frank Heard will become Gibraltar’s President and Chief Executive Officer on January 1, 2015. Brian Lipke will remain as the Company’s Chairman.

Third-Quarter Consolidated Results

Gibraltar’s net sales for the third quarter of 2014 increased 8% to $234.1 million, compared with $217.4 million for the third quarter of 2013. Third-quarter 2014 adjusted net income was $9.5 million, or $0.30 per diluted share, compared with adjusted net income of $9.6 million, or $0.31 per diluted share, in the third quarter of 2013. The adjusted third-quarter 2014 results exclude special items with an after-tax net gain totaling $0.1 million resulting primarily from acquisition-related gains and exit activity costs related to business restructuring, with no net effect on earnings per share. The adjusted net income for the third quarter of 2013 excluded after-tax special charges of $23.3 million, or $0.75 per diluted share, resulting primarily from impairment charges related to the Company’s European businesses. Including these items in the respective periods, the Company’s third-quarter 2014 GAAP results were net income of $9.6 million, or $0.31 per diluted share, compared with net loss of $13.7 million, or $0.44 per share, in the third quarter of 2013.

Nine-month Consolidated Results

For the nine months ended September 30, 2014, total net sales increased 3% to $660.1 million, from $638.7 million in the comparable 2013 period. Adjusted net income from continuing operations was $13.9 million, or $0.44 per diluted share, compared with $19.0 million, or $0.61 per diluted share, in the comparable period of 2013. The adjusted results for the first nine months of 2014 exclude after-tax special charges resulting primarily from the net of acquisition-related gains and exit activity costs related to business restructuring, with no net effect on earnings. Adjusted net income for the first nine months of 2013 excluded after-tax special charges of $28.6 million, or $0.92 per diluted share, resulting primarily from impairment charges and costs related to the Company’s successful re-financing of its senior subordinated notes. Including these items, GAAP net income for the first nine months of 2014 was $13.9 million, or $0.45 per diluted share, compared with the net loss of $9.6 million, or $0.31 per diluted share, in the comparable period of 2013.

Management Comments

“Gibraltar’s top-line for the third quarter was better than our guidance of $228 to $232 million,” said Chairman and Chief Executive Officer Brian Lipke. “The growth was driven by accelerating residential market demand for our new centralized postal storage solutions, as well as modestly higher sales volume in our roofing-related businesses. These factors contributed to stronger-than-anticipated revenues in our Residential Products segment. Net sales were also up, year-over-year, in our Industrial and Infrastructure Products segment due to favorable volume and pricing in sales to energy and manufacturing-related customers.”

“We were able to deliver this revenue growth without any significant lift from our end markets, where demand remains generally soft,” Lipke said. “Our strategic growth initiatives in postal and residential air management products are putting Gibraltar in a stronger position to control its own destiny, largely independent of underlying market trends such as housing starts.”

“The Company’s adjusted EPS for the third quarter exceeded the high end of our guidance of $0.23 to $0.27, and were approximately equal with prior-year results,” said Lipke. “Gibraltar’s adjusted EPS improved substantially on a sequential basis. In addition to our previously announced manufacturing consolidation and distribution channel initiatives, we completed staffing reductions during the quarter. These margin improvement initiatives plus reduced benefit claims contributed to our sequential improvement in earnings.”

Third-Quarter Segment Results

Residential Products

Third-quarter 2014 net sales in Gibraltar’s Residential Products segment increased 13% to $122.1 million, compared with $108.4 million for the third quarter of 2013. Third-quarter 2014 adjusted operating margin increased 10 basis points year over year to 11.6%. Sales growth in this segment reflected strong demand for postal storage products. The segment’s equivalent adjusted operating margin reflected the benefit of higher volume, offset by price reductions provided in certain product lines and costs to build out manufacturing capacity.

Industrial and Infrastructure Products

Third-quarter 2014 net sales in Gibraltar’s Industrial & Infrastructure Products segment increased 3% to $112.0 million, compared to $109.0 million for the third quarter 2013. Third-quarter 2014 adjusted operating margin improved over the second quarter but decreased 160 basis points year over year to 6.0%. Sales in the segment reflected improving volume in the industrial markets partially offset by lower shipment volumes to the transportation infrastructure market. This segment’s adjusted operating margin reflected a less profitable mix compared with the year-earlier quarter due to lower infrastructure shipments. Higher raw material costs also contributed to the reduced margins for the segment.

Outlook

“Looking ahead near-term, we continue to expect demand in the fourth quarter to benefit from orders for postal products as overall end market demand becomes seasonally slower,” Gibraltar President Frank Heard said. “This should lead to consolidated top-line growth of 4% to $193 to $198 million for the fourth quarter, with full-year revenues in the range of $853 to $858 million, a 3% increase compared with 2013.”

“On the bottom line for the fourth quarter, higher raw material costs and a less favorable sales mix are expected to weigh on results,” said Heard. “As a result, we anticipate reporting adjusted fourth-quarter earnings per share between a loss of $0.02 and income of $0.03, compared with $0.08 for the same period last year, and $0.42 to $0.47 for full-year 2014, compared with $0.69 in 2013. We expect GAAP earnings per share of $0.42 to $0.47 for full-year 2014, compared with a loss of $0.18 in 2013.”

“Looking forward to 2015, a number of economic indicators suggest a strengthening in demand for building products, compared with conditions in 2014,” Heard said. “With the operational enhancements that we have implemented this past year, we are better positioned to capitalize on end-market growth and deliver improved financial results in the year ahead.”

“Most importantly, we have established Gibraltar as a market leader in key applications in the residential and transportation infrastructure markets where growth drivers have the potential to outweigh cyclical factors in the economy over the next three to five years,” said Heard. “At the same time, our business simplification and product cost reduction initiatives should enable us to significantly improve the margin leverage in our business model.”

Third-Quarter Conference Call Details

Gibraltar has scheduled a conference call today starting at 9:00 a.m. ET to review its results for the third quarter of 2014. 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: http://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, focused on residential and low-rise commercial building markets, as well as industrial and transportation infrastructure markets. The Company generates more than 80% of its sales from products that hold leading positions in their markets, and serves customers across North America and Europe. Gibraltar’s strategy is to grow organically by expanding its product portfolio and penetration of existing customer accounts, while broadening its market and geographic coverage through the acquisition of companies with leadership positions in adjacent product categories. Comprehensive information about Gibraltar can be found on its website at http://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 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 intangible asset impairments, restructuring primarily associated with the closing and consolidation of our facilities, acquisition-related items, and note re-financing costs. These adjustments are shown in the non-GAAP reconciliation of adjusted operating results excluding special charges provided in the 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 our ongoing business operations. These adjusted measures should not be viewed as a substitute for our 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- and twelve-month periods ending December 31, 2014, on Wednesday, February 18, 2015, and hold its earnings conference call later that morning, starting at 9:00 a.m. ET.

Source: Gibraltar Industries, Inc.

Contact:
Gibraltar Industries, Inc.
Kenneth Smith, 716.826.6500 ext. 3217
Chief Financial Officer
kwsmith@gibraltar1.com