Revenues of $227.4 Million Exceeded
Guidance
GAAP EPS of $0.19 and Adjusted EPS of $0.28 In
Line with Expectations
Gibraltar Industries, Inc. (Nasdaq: ROCK), a leading
manufacturer and distributor of building products for the
residential, industrial, infrastructure, and renewable energy and
conservation markets, today reported its financial results for the
three-month period ended March 31, 2019. All financial metrics in
this release reflect only the Company’s continuing operations
unless otherwise noted.
First-quarter Consolidated Results
Gibraltar reported the following consolidated results:
Three Months Ended March 31, Dollars in
millions, except EPS
GAAP
Adjusted
2019
2018
%
Change
2019
2018
%
Change
Net Sales $227.4 $215.3 5.6% $227.4 $215.3 5.6% Net Income $6.3
$8.4 (25.0)% $9.2 $8.3 10.8% Diluted EPS $0.19 $0.26 (26.9)% $0.28
$0.26 7.7%
The Company reported first-quarter 2019 net sales of $227.4
million, exceeding its guidance as noted in its fourth-quarter 2018
earnings release. The 5.6 percent increase was mainly due to higher
demand for innovative products in the Industrial and Infrastructure
and Renewable Energy and Conservation segments, and increased
activity in the Infrastructure business.
GAAP and adjusted earnings were in line with guidance provided
in the Company’s fourth-quarter 2018 earnings release. GAAP
earnings were down year over year due to incremental costs incurred
in the field to improve durability and ensure performance of our
solar tracker, along with costs related to the Company’s senior
leadership transition plan and the recent repayment of its Senior
Subordinated 6.25% Notes. These costs were partially offset by
strong demand for higher-margin innovative products in the
Industrial and Infrastructure segment, ongoing benefits from 80/20
simplification initiatives and interest savings from the repayment
of the Company’s 6.25% Notes. The adjusted amounts for the first
quarter of 2019 and 2018 remove special items, such as
restructuring costs, senior leadership transition and debt
repayment costs from both periods, as further described in the
appended reconciliation of adjusted financial measures.
Management Comments
“With solid performance across our businesses in the first
quarter of 2019, we delivered revenues of $227 million, above our
guidance, and GAAP and non-GAAP earnings of $0.19 and $0.28,
respectively, in line with our expectations,” said President and
Chief Executive Officer William Bosway. “By executing on our
four-pillar strategy, we benefitted from higher-margin innovative
products, and continued operating improvement in the Industrial
& Infrastructure segment. In addition, we used cash generated
in prior years to repay our outstanding debt, resulting in
significant cost savings in the quarter.”
“During the quarter we saw continued demand for our innovative
tracker solution,” added Bosway. “While we incurred incremental
costs this quarter to improve durability and ensure performance of
this product, we expect it to continue to track towards our target
margin profile as we progress through the remainder of the
year.”
“We have made excellent operational progress across our
businesses, but our transformation is far from complete,” said
Bosway. “Our focus is on driving growth by reinforcing our 80/20
simplification strategy to create additional opportunity to enhance
our innovation and new product development programs. The
appointment of Pat Burns to the newly created COO position will
help accelerate these efforts.”
First-quarter Segment Results
Residential Products
For the first quarter, the Residential Products segment
reported:
Three Months Ended March 31, Dollars in
millions
GAAP
Adjusted
2019
2018
%
Change
2019
2018
%
Change
Net Sales $103.7 $103.9 (0.2)% $103.7 $103.9 (0.2)% Operating
Margin 11.7% 12.7% (100) bps 11.8% 12.6% (80) bps
First-quarter 2019 revenues in Gibraltar’s Residential Products
segment were essentially flat versus prior year, as unfavorable
weather impacted demand for building products, with volume declines
generally offset by selling price increases.
The first-quarter operating margin decline resulted from
unfavorable product mix and volume leverage, partially offset by
benefits from 80/20 simplification initiatives. The adjusted
operating margin for the first quarter of 2019 and 2018 removes the
special charges for restructuring initiatives under the 80/20
program from both periods.
Industrial & Infrastructure Products
For the first quarter, the Industrial & Infrastructure
Products segment reported:
Three Months Ended March 31, Dollars in
millions
GAAP
Adjusted
2019
2018
%
Change
2019
2018
%
Change
Net Sales $54.9 $54.4 0.9% $54.9 $54.4 0.9% Operating Margin 7.5%
4.8% 270 bps 7.5% 3.9% 360 bps
First-quarter 2019 revenues in Gibraltar’s Industrial &
Infrastructure Products segment were up 1 percent year over year,
driven by increased activity in the Infrastructure business and
continued demand for innovative products, partially offset by lower
volumes in the Industrial business for more commoditized
products.
GAAP and adjusted operating margin improvement for the segment
resulted from favorable product mix, higher volume leverage in the
Infrastructure business, and the continued benefit from 80/20
simplification initiatives. This segment’s adjusted operating
margin for the first quarter of 2019 and 2018 removes the special
charges for restructuring initiatives under the 80/20 program.
Renewable Energy & Conservation
For the first quarter, the Renewable Energy & Conservation
segment reported:
Three Months Ended March 31, Dollars in
millions
GAAP
Adjusted
2019
2018
%
Change
2019
2018
%
Change
Net Sales $68.8 $57.0 20.7% $68.8 $57.0 20.7% Operating Margin 2.4%
7.1% (470) bps 2.5% 7.7% (520) bps
Renewable Energy & Conservation segment revenues were up 21
percent year over year, driven by strong demand for its innovative
tracker solution and the contribution from the prior-year
acquisition of SolarBOS.
GAAP and adjusted operating margins decreased as incremental
costs incurred in the field to improve durability and ensure
performance of the recently launched tracker solution more than
offset the benefits of improved volumes. This segment’s adjusted
operating margin for the first quarter of 2019 and 2018 removes the
special charges for restructuring initiatives.
Business Outlook
“Looking into Q2 and beyond, we are confident in our ability to
execute on our operating plans,” said Bosway. “Through key resource
investments across our businesses, we are accelerating our ability
to innovate and become more relevant to our customers. With solid
end-market activity across our portfolio, we look forward to
another year of driving profitable growth and making more money at
a higher rate of return with a more efficient use of capital.”
Gibraltar is reiterating its guidance for revenues and earnings
for the full year 2019. Gibraltar expects 2019 consolidated
revenues to be in excess of $1 billion. GAAP EPS for full year 2019
are expected to be between $1.95 and $2.10, or $2.40 to $2.55 on an
adjusted basis, compared with $1.96 and $2.14, respectively, in
2018.
For the second quarter of 2019, the Company is expecting revenue
in the range of $268 million to $274 million. GAAP EPS for the
second quarter 2019 are expected to be between $0.60 and $0.65, or
$0.72 to $0.77 on an adjusted basis.
FY 2019 Guidance
Reconciliation
Gibraltar Industries Dollars in millions, except EPS
Operating Income
Net
DilutedEarnings
Income Margin Taxes
Income Per Share GAAP Measures $ 93-100
9.0-9.5 % $ 26-28 $ 64-69
$ 1.95-2.10 Restructuring Costs 17 1.6 % 3 15 $0.45
Adjusted Measures $ 110-117
10.6-11.1 % $ 29-31 $ 79-84 $ 2.40-2.55
First-quarter Conference Call Details
Gibraltar has scheduled a conference call today starting at 9:00
a.m. ET to review its results for the first quarter of 2019.
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 the residential, industrial,
infrastructure, and renewable energy and conservation markets. With
a four-pillar strategy focused on operational improvement, product
innovation, portfolio management and acquisitions, 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 macroeconomic factors including government
monetary and trade policies, such as tariffs and expiration of tax
credits along with currency fluctuations and general political
conditions. Other risks and uncertainties that arise from time to
time are described in Item 1A “Risk Factors” of the Company’s
Annual Report on Form 10-K. 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 the 80/20
simplification initiative, senior leadership transition costs, debt
repayment costs, 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.
Next Earnings Announcement
Gibraltar expects to release its financial results for the
three-month period ending June 30, 2019, on Friday, July 26, 2019,
and hold its earnings conference call later that morning, starting
at 9:00 a.m. ET.
GIBRALTAR INDUSTRIES, INC.CONSOLIDATED
STATEMENTS OF OPERATIONS(in thousands, except per share
data)(unaudited)
Three Months EndedMarch 31, 2019 2018 Net
Sales $ 227,417 $ 215,337 Cost of sales 183,517 167,019
Gross profit 43,900 48,318 Selling, general, and
administrative expense 33,334 34,475 Income from
operations 10,566 13,843 Interest expense 2,061 3,269 Other expense
(income) 589 (585 ) Income before taxes 7,916 11,159
Provision for income taxes 1,571 2,807 Net income $
6,345 $ 8,352 Net earnings per share: Basic $
0.20 $ 0.26 Diluted $ 0.19 $ 0.26 Weighted average
shares outstanding: Basic 32,279 31,786 Diluted 32,617
32,444
GIBRALTAR INDUSTRIES, INC.CONSOLIDATED
BALANCE SHEETS(in thousands, except per share data)
March 31,2019
December 31,2018
(unaudited)
Assets Current assets: Cash and cash equivalents
$ 43,509 $ 297,006 Accounts receivable, net 167,201 140,283
Inventories 98,594 98,913 Other current assets 8,282 8,351
Total current assets 317,586 544,553 Property, plant, and
equipment, net 95,856 95,830 Operating lease assets 31,823 —
Goodwill 323,573 323,671 Acquired intangibles 94,520 96,375 Other
assets 2,900 1,216 $ 866,258 $ 1,061,645
Liabilities and Shareholders’ Equity Current
liabilities: Accounts payable $ 84,462 $ 79,136 Accrued expenses
65,020 87,074 Billings in excess of cost 18,259 17,857 Current
maturities of long-term debt 400 208,805 Total
current liabilities 168,141 392,872 Long-term debt 1,600 1,600
Deferred income taxes 36,916 36,530 Non-current operating lease
liabilities 22,751 — Other non-current liabilities 31,017 33,950
Shareholders’ equity: Preferred stock, $0.01 par value; authorized
10,000 shares; none outstanding — — Common stock, $0.01 par value;
authorized 50,000 shares; 33,026 shares and 32,887 shares issued
and outstanding in 2019 and 2018 330 329 Additional paid-in capital
285,034 282,525 Retained earnings 346,922 338,995 Accumulated other
comprehensive loss (6,380 ) (7,234 ) Cost of 855 and 796 common
shares held in treasury in 2019 and 2018 (20,073 ) (17,922 ) Total
shareholders’ equity 605,833 596,693 $ 866,258
$ 1,061,645
GIBRALTAR INDUSTRIES, INC.CONSOLIDATED
STATEMENTS OF CASH FLOWS(in thousands)(unaudited)
Three Months EndedMarch 31,
2019 2018
Cash Flows from Operating Activities
Net income $ 6,345 $ 8,352 Adjustments to reconcile net income to
net cash used in operating activities: Depreciation and
amortization 4,941 5,189 Stock compensation expense 2,371 2,097
Exit activity recoveries, non-cash — (727 ) Provision for deferred
income taxes 393 — Other, net 2,456 353 Changes in operating assets
and liabilities, excluding the effects of acquisitions: Accounts
receivable (27,623 ) 4,947 Inventories 35 (8,907 ) Other current
assets and other assets 165 1,498 Accounts payable 5,332 (1,694 )
Accrued expenses and other non-current liabilities (31,903 )
(33,314 ) Net cash used in operating activities (37,488 ) (22,206 )
Cash Flows from Investing Activities Acquisitions, net of
cash acquired (264 ) — Net proceeds from sale of property and
equipment 22 2,823 Purchases of property, plant, and equipment
(3,132 ) (1,033 ) Net cash (used in) provided by investing
activities (3,374 ) 1,790
Cash Flows from Financing
Activities Long-term debt payments (210,000 ) — Payment of debt
issuance costs (1,235 ) — Purchase of treasury stock at market
prices (2,151 ) (850 ) Net proceeds from issuance of common stock
139 226 Net cash used in financing activities
(213,247 ) (624 ) Effect of exchange rate changes on cash 612
(499 ) Net decrease in cash and cash equivalents (253,497 )
(21,539 ) Cash and cash equivalents at beginning of year 297,006
222,280 Cash and cash equivalents at end of period $
43,509 $ 200,741
GIBRALTAR INDUSTRIES, INC.Reconciliation
of Adjusted Financial Measures (in thousands, except per share
data)(unaudited)
Three Months EndedMarch 31, 2019
AsReportedIn GAAPStatements
RestructuringCharges
SeniorLeadershipTransitionCosts
DebtRepayment
AdjustedFinancialMeasures
Net Sales Residential Products $ 103,709 $ — $ — $ — $ 103,709
Industrial & Infrastructure Products 55,188 — — — 55,188 Less
Inter-Segment Sales (317 ) — — — (317 ) 54,871
— — — 54,871 Renewable Energy & Conservation 68,837 —
— — 68,837 Consolidated sales 227,417 —
— — 227,417 Income from operations Residential Products
12,090 151 — — 12,241 Industrial & Infrastructure Products
4,129 (33 ) — — 4,096 Renewable Energy & Conservation 1,632
94 — — 1,726 Segments Income
17,851 212 — — 18,063 Unallocated corporate expense (7,285 ) 7
2,495 — (4,783 ) Consolidated income from
operations 10,566 219 2,495 — 13,280 Interest expense 2,061
— — (1,041 ) 1,020 Other expense 589 — — —
589 Income before income taxes 7,916 219 2,495 1,041
11,671 Provision for income taxes 1,571 54 621
260 2,506 Income from continuing operations $ 6,345
$ 165 $ 1,874 $ 781 $ 9,165
Income from continuing operations per share - diluted $ 0.19
$ 0.01 $ 0.06 $ 0.02 $ 0.28
Operating margin Residential Products 11.7 % 0.1 % — % — % 11.8 %
Industrial & Infrastructure Products 7.5 % (0.1 )% — % — % 7.5
% Renewable Energy & Conservation 2.4 % 0.1 % — % — % 2.5 %
Segments Margin 7.8 % 0.1 % — % — % 7.9 % Consolidated 4.6 % 0.1 %
1.1 % — % 5.8 %
GIBRALTAR INDUSTRIES, INC.Reconciliation
of Adjusted Financial Measures (in thousands, except per share
data)(unaudited)
Three Months EndedMarch 31, 2018
As Reported InGAAPStatements
RestructuringCharges
SeniorLeadershipTransitionCosts
Tax Reform
AdjustedFinancialMeasures
Net Sales Residential Products $ 103,948 $ — $ — $ — $ 103,948
Industrial & Infrastructure Products 54,624 — — — 54,624 Less
Inter-Segment Sales (221 ) — — — (221 ) 54,403
— — — 54,403 Renewable Energy & Conservation 56,986 —
— — 56,986 Consolidated sales 215,337 —
— — 215,337 Income from operations Residential Products
13,238 (166 ) — — 13,072 Industrial & Infrastructure Products
2,602 (485 ) — — 2,117 Renewable Energy & Conservation 4,062
136 178 — 4,376 Segments income
19,902 (515 ) 178 — 19,565 Unallocated corporate expense (6,059 )
44 305 — (5,710 ) Consolidated income from
operations 13,843 (471 ) 483 — 13,855 Interest expense 3,269
— — — 3,269 Other income (585 ) — — — (585 )
Income before income taxes 11,159 (471 ) 483 — 11,171 Provision for
income taxes 2,807 (146 ) 130 68 2,859
Net income $ 8,352 $ (325 ) $ 353 $ (68 ) $ 8,312
Net earnings per share - diluted $ 0.26 $ (0.01 ) $
0.01 $ — $ 0.26 Operating margin
Residential Products 12.7 % (0.2 )% — % — % 12.6 % Industrial &
Infrastructure Products 4.8 % (0.9 )% — % — % 3.9 % Renewable
Energy & Conservation 7.1 % 0.2 % 0.3 % — % 7.7 % Segments
margin 9.2 % (0.2 )% 0.1 % — % 9.1 % Consolidated 6.4 % (0.2 )% 0.2
% — % 6.4 %
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190503005205/en/
Timothy MurphyChief Financial Officer(716) 826-6500 ext.
3277tfmurphy@gibraltar1.com
Gibraltar Industries (NASDAQ:ROCK)
Historical Stock Chart
From Apr 2024 to May 2024
Gibraltar Industries (NASDAQ:ROCK)
Historical Stock Chart
From May 2023 to May 2024