Gibraltar Steel Announces Third Quarter Results
21 October 1997
Gibraltar Steel Announces Third Quarter Results
Company Expects Record Year in Sales and Net Income;
Increases Credit Facility; New Mill in Cleveland to Begin Operations
BUFFALO, N.Y., Oct. 21 -- Gibraltar Steel Corporation
today reported its sales and earnings for the three and nine
months ended September 30, 1997, and said it expects to generate record sales
and net income in 1997. The Company also announced that it has
increased its credit facility with its banks and will soon begin operations at
its new 56-inch cold-rolled strip mill in Cleveland.
Third quarter sales grew to $114.2 million in 1997, an increase of
approximately 30 percent from the $88 million recorded in the third quarter of
1996. Sales in the first nine months of 1997 were $341.7 million, an
approximately 33 percent increase from the $256.5 million in the first
nine months of 1996.
Net income in the third quarter was $3.8 million, or $.31 per share,
compared to $4.4 million, or $.36 per share, in the third quarter of 1996.
For the first nine months of the year, net income was $12.9 million, or $1.05
per share, in 1997 compared to $11.9 million, or $1.09 per share, in 1996.
There were 12.4 million average shares outstanding for the quarter ended
September 30, 1997, compared to 12.2 million average shares in the third
quarter of 1996. For the first nine months of 1997, there were 12.3 million
average shares outstanding, compared to 10.9 million average shares in the
first nine months of 1996. In June 1996, the Company completed a secondary
public offering of approximately two million shares.
"A month ago, we said our third and fourth quarter results would be
impacted by sales growth that has not met our aggressive expectations and
continued margin pressures. While that has been the case, in September we saw
our automotive business stabilize and start to show signs of renewed growth.
We've also begun to see some steel producers lowering their prices, a move
that, if sustained, bodes well for our business," said Brian J. Lipke,
Chairman and Chief Executive Officer.
"We are also taking a number of steps to expand our capacity for growth
and improve our performance. First, during the quarter we increased our
credit facility to $185 million (from $125 million) to give us additional
funds to grow our business through internal expansion, acquisitions, and
greenfield sites. At the end of the third quarter, approximately $100 million
of this facility was available to us," said Mr. Lipke.
"Second, we expect the new mill in our Cleveland facility -- which we
believe will be the low-cost producer of cold-rolled strip steel in North
America -- to begin operations late in the fourth quarter. We expect this
mill to add $80-85 million in new sales when it reaches its full capacity in
three years.
"Third, we continue to look for ways to further bolster our margins by
controlling and cutting our costs, and improving the productivity and
efficiency of all our operations," said Mr. Lipke.
"As we said a month ago, we expect 1997 will be a record sales and
earnings year for our company. While we're proud of what we'll accomplish
this year, we are even more optimistic about the year ahead. With the moves
we have made and are making to aggressively grow our top and bottom lines --
and the trends we're seeing -- we look to 1998 with a great level of
anticipation and
excitement," said Mr. Lipke.
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 changing steel prices on the Company's
results of operations; changing demand for the Company's products; and changes
in interest or tax rates.
Gibraltar is a growth-oriented company and a leader in the intermediate
steel processing industry, specializing in high value-added, high-margin
processes and services. It provides steel products and related services to
more than 5,600 customers in the automotive, automotive supply, metal building
and construction, steel, machinery, appliance, hardware, office equipment, and
electrical industries, among others.
The Company uses more than 20 different processes and services to produce,
manufacture, and distribute high-quality steel products such as cold-rolled
strip steel; heavy-duty steel strapping; galvanized, galvalume(R), and
pre-painted sheet steel; and a wide array of metal products for the
residential and commercial construction markets. Gibraltar also provides
specialized heat-treating services of customer-owned parts and materials;
operates state-of-the-art materials management facilities; and through its
joint venture partnership, provides steel pickling.
Gibraltar's news releases are available by calling 1-800-758-5804,
ext. 103722, or on the Internet at
http://www.prnewswire.com/cnoc/exec/menu?103722 .
GIBRALTAR STEEL CORPORATION
Financial Highlights
(in thousands, except share and per share data)
(unaudited)
Three Months Ended
September 30,
1997 1996
(unaudited)
Net Sales $114,249 $87,994
Net Income $3,787 $4,414
Earnings Per Share $.31 $.36
Weighted Average Shares
Outstanding 12,371,680 12,239,607
Nine Months Ended
September 30,
1997 1996
(unaudited)
Net Sales $341,739 $256,504
Net Income $ 12,930 $ 11,903
Earnings Per Share $1.05 $1.09
Weighted Average Shares
Outstanding 12,340,900 10,904,904
GIBRALTAR STEEL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(in thousands)
September 30, December 31,
1997 1996
(unaudited) (audited)
Assets
Current assets:
Cash and cash equivalents $2,922 $5,545
Accounts receivable 57,824 40,106
Inventories 72,698 62,351
Other current assets 3,240 1,524
Total current assets 136,684 109,526
Property, plant and
equipment, net 114,341 88,670
Other assets 35,263 24,311
$ 286,288 $ 222,507
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $37,304 $35,397
Accrued expenses 4,836 4,238
Current maturities
of long-term debt 1,223 1,218
Total current liabilities 43,363 40,853
Long-term debt 90,652 48,623
Deferred income taxes 14,680 10,364
Other non-current liabilities 1,221 923
Shareholders' equity
Preferred shares -- --
Common shares 124 123
Additional paid-in capital 66,004 64,307
Retained earnings 70,244 57,314
Total shareholders'
equity 136,372 121,744
$286,288 $222,507
GIBRALTAR STEEL CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(in thousands, except share and per share data)
Three Months Nine Months
Ended Ended
September 30, September 30,
1997 1996 1997 1996
(unaudited) (unaudited)
Net sales $114,249 $87,994 $341,739 $256,504
Cost of sales 96,102 72,015 284,977 210,629
Gross profit 18,147 15,979 56,762 45,875
Selling, general and
administrative
expense 10,525 7,708 31,177 22,676
Income from operations 7,622 8,271 25,585 23,199
Interest expense 1,310 852 3,907 3,195
Income before taxes 6,312 7,419 21,678 20,004
Provision for income
taxes 2,525 3,005 8,748 8,101
Net income $3,787 $4,414 $12,930 $11,903
Net income per share $.31 $.36 $1.05 $1.09
Weighted average
number of shares
outstanding 12,371,680 12,239,607 12,340,900 10,904,904
GIBRALTAR STEEL CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)
Nine Months
Ended
September 30,
1997 1996
(unaudited)
Cash flows from operating activities
Net income $12,930 $11,903
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 6,216 4,579
Provision for deferred income taxes 1,230 556
Undistributed equity investment income (383) (481)
(Gain) loss on disposition of property
and equipment (8) 7
Increase (decrease) in cash resulting from
changes in (net of acquisitions):
Accounts receivable (8,849) (7,844)
Inventories 5,610 (9,411)
Other current assets (1,099) 86
Accounts payable and accrued expenses (2,160) 6,686
Other assets (390) (201)
Net cash provided by operating activities 13,097 5,880
Cash flows from investing activities
Acquisitions, net of cash acquired (26,475) (23,715)
Purchases of property, plant and equipment (17,677) (11,909)
Proceeds from sale of property and equipment 95 137
Net cash used in investing activities (44,057) (35,487)
Cash flows from financing activities
Long-term debt reduction (62,059) (65,891)
Proceeds from long-term debt 89,365 60,906
Proceeds from issuance of common stock 1,031 35,494
Net cash provided by financing activities 28,337 30,509
Net (decrease) increase in cash and cash
equivalents (2,623) 902
Cash and cash equivalents at beginning
of year 5,545 4,123
Cash and cash equivalents at end of period $2,922 $5,025
SOURCE Gibraltar Steel Corporation