Gibraltar Reports Record Third Quarter Sales and Earnings
20 October 1998
Gibraltar Reports Record Third Quarter Sales and Earnings
Company Expects to Generate Record Sales and Earnings in 1998, Anticipates it
Will Meet or Exceed its 20% Top and Bottom Line Growth Goals for the Year
BUFFALO, N.Y., Oct. 20 -- Gibraltar Steel Corporation
today reported record sales and earnings for the third quarter
and nine months ended September 30, 1998. The Company said it expects to meet
or exceed its annual goal of 20 percent top and bottom line growth in 1998.
Sales in the third quarter of 1998 were a quarterly record at
$152.6 million, a 34 percent increase from $114.2 million in the third quarter
of 1997. For the first nine months of 1998, sales were $413.9 million, a
21 percent increase from $341.7 million in the first nine months of 1997. Net
income was $5.1 million in the third quarter, up 36 percent from $3.8 million
in the third quarter of 1997. Net income in the first nine months of 1998 was
$15.0 million, up 16 percent from $12.9 million in the first nine months of
1997.
Diluted earnings per share were $.41 in the third quarter, a 36 percent
increase from $.30 in the third quarter of 1997. For the first nine months of
1998, diluted earnings per share were $1.19, a 16 percent increase from
$1.03 in the first nine months of 1997.
"We had another excellent quarter," said Brian J. Lipke, Chairman and
Chief Executive Officer, "and we are firmly on track to meet or exceed our
goal of 20 percent top and bottom line growth in 1998.
"During 1998, we've taken a number of steps to strengthen and grow our
business. We began operations at our new mill in Cleveland, which increases
our annual sales capacity by $80-85 million. We've made four immediately
accretive acquisitions (The Solar Group on March 1, Appleton Supply on
April 1, United Steel Products on June 1, and Harbor Metal on October 1),
which together have annual sales in excess of $120 million. And because these
companies have unused plant capacity, we believe we can increase their sales
by an additional $75-100 million by fully utilizing their equipment.
"Through our various growth initiatives, we have already expanded
Gibraltar's annual sales capacity by approximately $300 million in 1998. And
as we look at every part of our company, we see other growth opportunities, in
both our existing operations and through additional acquisitions. This will
be our seventh straight year of sales and earnings growth, and we've got a
running start on generating another record year in 1999," said Mr. Lipke.
"Gibraltar now has 43 facilities in 18 states and Mexico, with a customer
list that has grown to 9,000 from 900 in 1994. This customer diversification
played a major role in allowing us to generate our best-ever quarterly sales
and a 36% EPS gain despite the impact of a strike that shut down our largest
customer during July and part of August. Our performance in the third quarter
clearly demonstrates how we have made our company stronger by serving a
greater number and diversity of markets," said Mr. Lipke.
"Particularly noteworthy were our strong sales to the construction,
building products, and consumer products industries, which now generate close
to 50 percent of our business. Low interest rates, and the corresponding boom
in mortgage re-financings, where the proceeds are often used for home repair
and remodeling projects, have fueled strong growth in this part of our
company. (Note: the second and third quarters are historically the strongest
periods for this business.)
"We have continued to expand and diversify our customer base, extend the
reach of our company into many of the nation's fastest-growing geographic and
steel-consuming markets, and improve and stabilize our margins. Because of
this, our company is stronger and better positioned today than at any point in
our history," 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
approximately 9,000 customers in the automotive, automotive supply,
building/construction, consumer products, steel, machinery, and appliance
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
prepainted sheet steel; and a wide array of building products for the consumer
and commercial 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 STEEL CORPORATION
Financial Highlights
(in thousands, except per share data)
Three Months Ended
September 30, 1998 September 30, 1997
(unaudited)
Net Sales $152,628 $114,249
Net Income $5,146 $3,787
Net Income Per Share - Basic $.41 $.31
Weighted Average Shares
Outstanding - Basic 12,477 12,372
Net Income Per Share - Diluted $.41 $.30
Weighted Average Shares
Outstanding - Diluted 12,612 12,637
Nine Months Ended
September 30, 1998 September 30, 1997
(unaudited)
Net Sales $413,893 $341,739
Net Income $15,018 $12,930
Net Income Per Share-Basic $1.21 $1.05
Weighted Average Shares
Outstanding-Basic 12,446 12,341
Net Income Per Share-Diluted $1.19 $1.03
Weighted Average Shares
Outstanding - Diluted 12,640 12,584
GIBRALTAR STEEL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(in thousands)
September 30, December 31,
1998 1997
(unaudited) (audited)
Assets
Current assets:
Cash and cash equivalents $2,314 $2,437
Accounts receivable 82,149 49,151
Inventories 112,000 76,701
Other current assets 4,390 2,457
Total current assets 200,853 130,746
Property, plant and
equipment, net 157,033 115,402
Other assets 83,839 35,188
$441,725 $281,336
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $59,040 $38,233
Accrued expenses 14,904 3,644
Current maturities of
long-term debt 1,292 1,224
Total current liabilities 75,236 43,101
Long-term debt 188,713 81,800
Deferred income taxes 20,635 15,094
Other non-current liabilities 1,738 1,297
Shareholders' equity
Preferred shares -- --
Common shares 125 124
Additional paid-in capital 66,530 66,190
Retained earnings 88,748 73,730
Total shareholders' equity 155,403 140,044
$441,725 $281,336
GIBRALTAR STEEL CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
(unaudited) (unaudited)
Net sales $152,628 $114,249 $413,893 $341,739
Cost of sales 124,937 96,102 339,149 284,977
Gross profit 27,691 18,147 74,744 56,762
Selling, general and
administrative
expense 15,777 10,525 42,026 31,177
Income from operations 11,914 7,622 32,718 25,585
Interest expense 3,337 1,310 7,688 3,907
Income before taxes 8,577 6,312 25,030 21,678
Provision for income
taxes 3,431 2,525 10,012 8,748
Net income $5,146 $3,787 $15,018 $12,930
Net income per share
- Basic $.41 $.31 $1.21 $1.05
Weighted average number of
shares outstanding
- Basic 12,477 12,372 12,446 12,341
Net income per share
- Diluted $.41 $.30 $1.19 $1.03
Weighted average number of
shares outstanding
- Diluted 12,612 12,637 12,640 12,584
GIBRALTAR STEEL CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)
Nine Months Ended
September 30,
1998 1997
(unaudited)
Cash flows from operating activities
Net income $15,018 $12,930
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 9,368 6,216
Provision for deferred income
taxes 1,329 1,230
Undistributed equity investment
income (259) (383)
Other noncash adjustments 275 239
Increase (decrease) in cash
resulting from changes in (net
of acquisitions):
Accounts receivable (18,238) (8,849)
Inventories (18,958) 5,610
Other current assets (1,356) (1,099)
Accounts payable and accrued
expenses 16,111 (2,160)
Other assets (757) (390)
Net cash provided by operating
activities 2,533 13,344
Cash flows from investing activities
Acquisitions, net of cash
acquired (86,799) (26,475)
Purchases of property, plant
and equipment (16,807) (17,677)
Net proceeds from sale of
property and equipment 108 87
Net cash used in investing
activities (103,498) (44,065)
Cash flows from financing activities
Long-term debt reduction (28,002) (62,059)
Proceeds from long-term
debt 128,778 89,365
Net proceeds from issuance of
common stock 66 792
Net cash provided by financing
activities 100,842 28,098
Net decrease in cash and cash
equivalents (123) (2,623)
Cash and cash equivalents at
beginning of year 2,437 5,545
Cash and cash equivalents at
end of period $2,314 $2,922