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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 28, 2004
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GIBRALTAR STEEL CORPORATION
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(Exact name of registrant as specified in its chapter)
Delaware 0-22462 16-1445150
- ---------------------------- ----------- -------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
3556 Lake Shore Road
P.O. Box 2028
Buffalo, New York 14219-0228
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (716) 826-6500
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(Former name or former address, if changed since last report)
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Businesses Acquired. No financial
statements are required to be filed under applicable rules.
(b) Pro Forma Financial Information. No pro forma financial
information is required under applicable rules.
(c) Exhibits.
99.1 Press Release of the Company dated July 28, 2004.
ITEM 9. REGULATION FD DISCLOSURE
The following information is being provided under Item 12:
On July 28, 2004, Gibraltar Steel Corporation issued a press release announcing
operating results for the second quarter ended June 30, 2004.
The information contained in the press release dated July 28, 2004, is
incorporated herein by reference and attached as exhibit 99.1 herein.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: July 28, 2004 GIBRALTAR STEEL CORPORATION
/S/ David W. Kay
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Name: David W. Kay
Title: Chief Financial Officer
EXHIBIT INDEX
99.1 Press Release of the Company dated July 28, 2004
Exhibit 99.1
Gibraltar Reports Record Quarterly Sales, Net Income,
and Earnings Per Share; Net Income Increases by 87% on a
27% Gain in Sales; Double-Digit Growth Contributes
to Record Quarterly EPS of $.78
BUFFALO, N.Y.--(BUSINESS WIRE)--July 28, 2004--Gibraltar (Nasdaq:
ROCK) said today that its sales in the second quarter of 2004 were
$257 million, an increase of 27 percent from $203 million in the
second quarter of 2003. Sales for the first six months of 2004 were
$469 million, an increase of 29 percent compared to $365 million in
the first half of 2003.
Net income of $15.4 million in the second quarter of 2004
increased by 87 percent from $8.3 million in the second quarter of
2003. During the first half of 2004, net income was $24.8 million, an
increase of 88 percent compared to $13.2 million in the first six
months of 2003.
Earnings per share in the second quarter of 2004 were $.78,
compared to $.51 in the second quarter of 2003, an increase of 53
percent, on approximately 22 percent more weighted average shares
outstanding as a result of Gibraltar's successful completion of its
3.2-million share secondary stock offering last December. During the
first half of 2004, earnings per share were $1.26, compared to $.82 in
the first half of 2003, an increase of 54 percent, on approximately 22
percent more weighted average shares outstanding.
"Our performance in the second quarter was helped by the national
manufacturing and distribution foot print established last year and
the continued ramp up of available capacity utilization. Gross margins
exceeded 20 percent and operating margins were 10.7 percent,
indicative of our year-over-year continuous improvement programs and a
generally improving economic climate," said Brian J. Lipke,
Gibraltar's Chairman and Chief Executive Officer.
"All segments generated double-digit sales increases in the second
quarter, and even stronger improvements in operating income. We had
continued strong performances in our targeted growth segments
including building products and heat treating. We estimate that the
majority of our second-quarter sales improvement came from higher unit
volumes, with the balance coming from acquisition timing and higher
selling prices (which were largely the result of the unprecedented
increase in steel prices)," said Mr. Lipke.
On June 1, Gibraltar completed the acquisition of the assets of
the powdered metals division of SCM Metal Products. SCM manufactures
non-ferrous metal powder products that are used in brazing pastes,
roofing shingles, oil-less bearings, and friction products, among
others. SCM has more than one hundred customers, in a number of
different industries, including automotive, aerospace, electronics,
and consumer products. Nearly one-third of its sales (which were $45
million in 2003) go to customers in Europe, Asia, and Central and
South America.
During the second quarter, Gibraltar also took steps to strengthen
its balance sheet. It entered into a $75-million private placement of
debt, with a term of seven years and a rate of 5.75 percent. An
initial draw of $25 million was used to lower the balance on
Gibraltar's revolving credit facility. The balance, which will be
drawn down at specific future intervals, will be used for general
corporate purposes, including internal growth initiatives and
potential acquisitions.
"We were able to term out a significant portion of our credit line
at favorable rates and terms. These and other steps that we are taking
to strengthen our balance sheet, together with our strong and
consistent financial performance, will continue to give us access to
the funds necessary to reach our strategic growth goals," said Mr.
Lipke.
"We expect to continue our positive sales and earnings momentum in
the third quarter; however, the volatility in the steel supply markets
has not abated. At this point, we are confidently managing the
situation and therefore we expect our third-quarter earnings per share
will be in the range of $.61 to $.65, compared to $.49 in the third
quarter of 2003, on approximately 22 percent more weighted average
shares outstanding," said Mr. Lipke. The second quarter is
historically the strongest period for Gibraltar, with growth slowing
in the third quarter as a result of model year changeovers in the auto
industry and seasonal slowing in the building industry.
Gibraltar is a manufacturer and distributor of more than 5,000
residential and commercial building products, one of North America's
leading metal processors, and North America's second-largest
commercial heat treater. The Company serves approximately 10,000
customers in a variety of industries in all 50 states, Canada, Mexico,
Europe, Asia, and Central and South America. It has approximately
4,000 employees and operates 72 facilities in 26 states, Canada, and
Mexico.
Information contained in this release, other than historical
information, should be considered forward-looking, and may be subject
to a number of risk factors, including: the impact of the availability
and the effects of changing steel prices on the Company's results of
operations; changing demand for the Company's products; risks
associated with the integration of acquisitions; and changes in
interest or tax rates.
Gibraltar will review its second-quarter results and discuss its
outlook for the third quarter during its quarterly conference call,
which will be held at 11 a.m. Eastern Time on July 29. Details of the
call can be found on Gibraltar's Web site, at www.gibraltar1.com.
Gibraltar's news releases, along with comprehensive information
about the Company, are available on the Internet, at
www.gibraltar1.com.
GIBRALTAR STEEL CORPORATION
Financial Highlights
(in thousands, except per share data)
Three Months Ended
June 30, 2004 June 30, 2003
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Net Sales $ 257,485 $ 203,406
Net Income $ 15,444 $ 8,251
Net Income Per Share-Basic $ .79 $ .52
Weighted Average Shares Outstanding-
Basic 19,539 15,938
Net Income Per Share-Diluted $ .78 $ .51
Weighted Average Shares Outstanding-
Diluted 19,703 16,103
Six Months Ended
June 30, 2004 June 30, 2003
--------------- --------------
Net Sales $ 469,480 $ 364,938
Net Income $ 24,789 $ 13,155
Net Income Per Share-Basic $ 1.27 $ .83
Weighted Average Shares Outstanding-
Basic 19,485 15,925
Net Income Per Share-Diluted $ 1.26 $ .82
Weighted Average Shares Outstanding-
Diluted 19,641 16,086
GIBRALTAR STEEL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
June 30, December 31,
2004 2003
----------- ---------
(unaudited) (audited)
Assets
- -----------------------------------------------
Current assets:
Cash and cash equivalents $ 10,297 $ 29,019
Accounts receivable 162,863 102,591
Inventories 141,233 107,531
Other current assets 11,204 10,309
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Total current assets 325,597 249,450
Property, plant and equipment, net 265,978 250,029
Goodwill 280,853 267,157
Investments in partnerships 6,643 5,044
Other assets 5,924 6,063
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$ 884,995 $ 777,743
=========== =========
Liabilities and Shareholders' Equity
- -----------------------------------------------
Current liabilities:
Accounts payable $ 76,065 $ 49,879
Accrued expenses 42,948 29,029
Current maturities of long-term debt 19,192 19,848
----------- ---------
Total current liabilities 138,205 98,756
Long-term debt 255,711 222,402
Deferred income taxes 59,992 55,982
Other non-current liabilities 5,553 6,422
Shareholders' equity:
Preferred stock, $.01 par value;
authorized: 10,000,000 shares;
none outstanding - -
Common stock, $.01 par value; authorized
50,000,000 shares; issued 19,651,200 and
19,274,069 shares in 2004 and 2003,
respectively 196 193
Additional paid-in capital 207,053 199,206
Retained earnings 219,063 196,138
Unearned compensation (648) (818)
Accumulated other comprehensive loss (130) (538)
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425,534 394,181
Less: cost of 27,000 and 19,000 common shares
held in treasury in 2004 and 2003,
respectively - -
----------- ---------
Total shareholders' equity 425,534 394,181
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$ 884,995 $ 777,743
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GIBRALTAR STEEL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share date)
Three Months Ended Six Months Ended
June 30, June 30,
2004 2003 2004 2003
-------- ------------ -------- --------
(unaudited)(unaudited) (unaudited) (unaudited)
Net sales $257,485 $ 203,406 $469,480 $364,938
Cost of sales 199,183 162,902 368,418 295,359
-------- ------------ -------- --------
Gross profit 58,302 40,504 101,062 69,579
Selling, general and
administrative expense 30,721 23,185 55,272 41,618
-------- ------------ -------- --------
Income from
operations 27,581 17,319 45,790 27,961
Other (income) expense:
Equity in partnerships'
income (1,186) (137) (1,726) (208)
Interest expense 3,239 3,704 6,542 6,244
-------- ------------ -------- --------
Total other expense 2,053 3,567 4,816 6,036
-------- ------------ -------- --------
Income before taxes 25,528 13,752 40,974 21,925
Provision for income
taxes 10,084 5,501 16,185 8,770
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Net income $ 15,444 $ 8,251 $ 24,789 $ 13,155
======== ============ ======== ========
Net income per share -
Basic $ .79 $ .52 $ 1.27 $ .83
======== ============ ======== ========
Weighted average shares
outstanding - Basic 19,539 15,938 19,485 15,925
======== ============ ======== ========
Net income per share -
Diluted $ .78 $ .51 $ 1.26 $ .82
======== ============ ======== ========
Weighted average shares
outstanding - Diluted 19,703 16,103 19,641 16,086
======= ============ ======== ========
GIBRALTAR STEEL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Six Months Ended
June 30,
2004 2003
----------- -----------
(unaudited) (unaudited)
Cash flows from operating activities
- -------------------------------------------
Net income $ 24,789 $ 13,155
Adjustments to reconcile net income to net
cash used in
operating activities:
Depreciation and amortization 12,001 10,957
Provision for deferred income taxes 2,245 1,402
Equity in partnerships' income (1,726) (208)
Distributions from partnerships 846 411
Unearned compensation, net of restricted
stock forfeitures 69 194
Other noncash adjustments 48 110
Increase (decrease) in cash resulting from
changes
in (net of acquisitions):
Accounts receivable (47,036) (23,699)
Inventories (25,393) (441)
Other current assets 619 (2,392)
Accounts payable and accrued expenses 36,167 10,468
Other assets (997) (263)
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Net cash provided by operating
activities 1,632 9,694
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Cash flows from investing activities
- -------------------------------------------
Acquisitions, net of cash acquired (48,600) (83,580)
Purchases of property, plant and equipment (10,261) (10,169)
Net proceeds from sale of property and
equipment 316 265
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Net cash used in investing activities (58,545) (93,484)
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Cash flows from financing activities
- -------------------------------------------
Long-term debt reduction (25,506) (25,924)
Proceeds from long-term debt 57,680 115,464
Payment of dividends (1,751) (1,281)
Net proceeds from issuance of common stock 7,768 317
-------- -----------
Net cash provided by financing
activities 38,191 88,576
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Net (decrease) increase in cash and
cash equivalents (18,722) 4,786
Cash and cash equivalents at beginning of
year 29,019 3,662
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Cash and cash equivalents at end of period $ 10,297 $ 8,448
======== ===========
GIBRALTAR STEEL CORPORATION
Segment Information
(in thousands)
Three Months Ended June 30,
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Increase
(Decrease)
2004 2003 $ %
----------- ----------- ------- ------
(unaudited) (unaudited)
Net Sales
Processed steel $ 89,280 $ 69,510 $19,770 28.4%
Building products 136,734 111,984 24,750 22.1%
Heat treating 31,471 21,912 9,559 43.6%
----------- ----------- -------
Total Sales 257,485 203,406 54,079 26.6%
Income from Operations
Processed steel $ 10,449 $ 6,304 $ 4,145 65.8%
Building products 20,243 13,460 6,783 50.4%
Heat treating 4,829 2,320 2,509 108.1%
Corporate (7,940) (4,765) (3,175) -66.6%
----------- ----------- -------
Total Operating Income 27,581 17,319 10,262 59.3%
Operating Margin
Processed steel 11.7% 9.1%
Building products 14.8% 12.0%
Heat treating 15.3% 10.6%
Six Months Ended June 30,
----------------------------------------
Increase
(Decrease)
2004 2003 $ %
----------- ----------- -------- -----
(unaudited) (unaudited)
Net Sales
Processed steel $ 166,446 $ 140,713 $ 25,733 18.3%
Building products 246,057 180,279 65,778 36.5%
Heat treating 56,977 43,946 13,031 29.7%
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Total Sales 469,480 364,938 104,542 28.6%
Income from Operations
Processed steel $ 18,476 $ 14,586 $ 3,890 26.7%
Building products 31,034 15,990 15,044 94.1%
Heat treating 8,777 5,283 3,494 66.1%
Corporate (12,497) (7,898) (4,599) -58.2%
----------- ----------- --------
Total Operating Income 45,790 27,961 17,829 63.8%
Operating Margin
Processed steel 11.1% 10.4%
Building products 12.6% 8.9%
Heat treating 15.4% 12.0%
CONTACT: Gibraltar
Kenneth P. Houseknecht, 716/826-6500
khouseknecht@gibraltar1.com