Gibraltar Reports Q1 Sales
28 April 1998
Gibraltar Reports Record First Quarter Sales
Recent Acquisitions, New Mill in Cleveland, and Margin Improvement
Should Contribute to Sales and Earnings Growth in 1998
BUFFALO, N.Y., April 27 -- Gibraltar Steel Corporation
today reported its sales and earnings for the three months
ended March 31, 1998.
Sales for the three months ended March 31, 1998, were a first quarter
record at $116.4 million, a 7.5 percent increase over the $108.3 million
recorded in the first quarter of 1997. Net income in the first quarter of
1998 was $4.1 million, or $.33 per share, compared to $4.4 million, or $.36
per share, in the prior year period. On a diluted basis, first quarter
earnings per share were $.33 in 1998 and $.35 in 1997.
The Company said its recent acquisitions, the new 56-inch cold-rolling
mill at its Cleveland facility that began operations in early January, and
margin improvement should contribute to sales and earnings growth in 1998.
Gibraltar has acquired four companies in the last 15 months; its two most
recent acquisitions were The Solar Group on March 1, 1998, and Appleton Supply
Company, Inc. on April 1, 1998. Solar and Appleton had 1997 sales of
$45 million and $28 million, respectively. The new mill in Cleveland is
expected to generate annual sales of $80-85 million when it reaches its full
capacity in three years.
"Our gross profit margin improved by more than a full percentage point in
the first quarter of 1998 compared to the fourth quarter of 1997, in spite of
working the remaining higher-priced 1997 material out of our inventory and the
costs associated with the start-up and transition of our new mill to a
two-shift operation (which we achieved three months ahead of schedule)," said
Brian J. Lipke, Chairman and Chief Executive Officer.
"As we move into the second quarter, we believe we are well positioned to
see continued improvements in our margins, and that -- together with
anticipated profit contributions from our recent acquisitions and our new mill
-- should result in a marked increase in our quarterly earnings for the
balance of the year on a comparative basis.
"We believe there are numerous opportunities to accelerate the growth of
every part of our business in light of the current acquisition environment.
We are actively evaluating synergistic acquisitions and we will continue to be
very selective in only acquiring companies that meet our strategic criteria
and immediately enhance our earnings per share," said Mr. Lipke.
"We continue to strengthen Gibraltar by increasing our business, customer,
and geographic diversification," said Mr. Lipke. "In 1994, we had
900 customers and 61 percent of our sales were to the automotive industry.
Today, we have approximately 8,000 customers, and our automotive business is
36 percent of sales (even though actual dollar sales have grown by
$38 million, or 31 percent). At the beginning of 1994, we had nine facilities,
mostly in the Great Lakes area. Today, we operate 36 facilities in 15 states
and Mexico."
The Company also said it increased its credit facility to $210 million
(from $185 million) in the first quarter to provide additional funds to grow
its business through acquisitions, internal expansions, and Greenfield sites.
Total current liabilities 53,173 43,101
Long-term debt 124,391 81,800
Deferred income taxes 15,478 15,094
Other non-current liabilities 1,395 1,297
Shareholders' equity
Preferred shares -- --
Common shares 124 124
Additional paid-in capital 66,195 66,190
Retained earnings 77,851 73,730
Total shareholders' equity 144,170 140,044
$338,607 $281,336
GIBRALTAR STEEL CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(in thousands, except per share data)
Three Months Ended
March 31,
1998 1997
(unaudited)
Net sales $116,383 $108,277
Cost of sales 96,223 89,579
Gross profit 20,160 18,698
Selling, general and
administrative expense 11,686 10,076
Income from operations 8,474 8,622
Interest expense 1,606 1,149
Income before taxes 6,868 7,473
Provision for income taxes 2,747 3,027
Net income $4,121 $4,446
Net income per share-Basic $.33 $.36
Weighted average shares outstanding-Basic 12,410 12,325
Net income per share-Diluted $.33 $.35
Weighted average shares outstanding-Diluted 12,608 12,555
GIBRALTAR STEEL CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)
Three Months Ended
March 31,
1998 1997
(unaudited)
Cash flows from operating activities
Net income $4,121 $4,446
Adjustments to reconcile net income to
net cash used in operating activities:
Depreciation and amortization 2,561 1,932
Provision for deferred income taxes 336 304
Undistributed equity investment income (209) (216)
Increase (decrease) in cash resulting from
changes in (net of acquisitions):
Accounts receivable (9,723) (10,936)
Inventories (7,176) (4,346)
Other current assets (882) (1,019)
Accounts payable and accrued expenses 6,709 3,304
Other assets (222) (193)
Net cash used in operating activities (4,485) (6,724)
Cash flows from investing activities
Acquisitions, net of cash acquired (35,040) (24,907)
Purchases of property, plant and equipment (4,338) (4,421)
Net proceeds from sale of property and equipment 65 58
Net cash used in investing activities (39,313) (29,270)
Cash flows from financing activities
Long-term debt reduction (2,101) (27,397)
Proceeds from long-term debt 44,394 61,743
Net proceeds from issuance of common stock 5 26
Net cash provided by financing activities 42,298 34,372
Net decrease in cash and cash equivalents (1,500) (1,622)
Cash and cash equivalents at beginning of year 2,437 5,545
Cash and cash equivalents at end of period $937 $3,923
SOURCE Gibraltar Steel Corporation