Gibraltar Reports Record Sales And Earnings In 1998
26 January 1999
Gibraltar Reports Record Sales And Earnings In 1998
Earnings Up 38% in Quarter, 21% for Year; Annual Sales Climb
by 24% to $558 Million
BUFFALO, N.Y., Jan. 26 -- Gibraltar Steel Corporation
today reported record sales and earnings for the quarter and
year ended December 31, 1998.
Sales in 1998 were $558 million, a 24 percent increase from $450 million
in 1997. Sales in the fourth quarter of 1998 were $144 million, up 33 percent
from $108 million in the prior-year period.
Net income was $19.8 million in 1998, an increase of 21 percent from
$16.4 million in 1997. Diluted earnings per share were $1.57 in 1998,
compared to $1.30 in 1997. During the fourth quarter of 1998, net income was
$4.8 million, an increase of 38 percent from $3.5 million in the fourth
quarter of 1997. Fourth quarter diluted earnings per share were $.38 in 1998,
compared to $.28 in 1997.
In the five years since its initial public offering (1994-1998),
Gibraltar's sales have increased by 27 percent a year, and net income has
advanced by 22 percent a year. The Company is committed to generating annual
sales of $1 billion or more and net income of at least $45 million by 2003, or
sooner, by growing its top and bottom lines by at least 20 percent a year. At
the midpoint of its ten-year plan, Gibraltar is nearly two years ahead of
schedule, and believes it can further accelerate its progress.
"We had an excellent year in 1998, with our four acquisitions (The Solar
Group on March 1, Appleton Supply Company on April 1, United Steel Products on
June 1, and Harbor Metal on October 1) fueling our growth. In 1999, we'll get
a full year's results from these acquisitions. Since these companies have
unused plant capacity, we believe we can increase their sales by fully
utilizing their equipment and taking advantage of other synergies. And our
new mill in Cleveland is now in its second year and continues to build its
business," said Brian J. Lipke, Chairman and Chief Executive Officer.
"As a result of these growth initiatives, we expanded Gibraltar's annual
sales capacity by approximately $300 million in 1998. Coupled with our
relentless focus on continually growing our existing businesses through
productivity and yield improvements, and more fully capitalizing on the many
synergies in our growing family of companies, we will continue to strengthen
our company," said Mr. Lipke.
"Another key part of our growth strategy is strategic acquisitions. Our
immediately accretive acquisitions have allowed us to build on our core
competencies, 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," said Mr.
Lipke.
"Specifically on the acquisition front, today we have a greater amount,
quality, and magnitude of growth opportunities than ever. Our challenge is to
select only the best companies from a growing list of very good ones.
"As we've done in our core business, we're finding fragmented, high-growth
markets -- like metal building products and commercial heat treating -- where
we can become a dominant company. Today, we participate in more markets and
businesses, serve more customers, have greater synergies, and enjoy a higher
visibility and awareness than at any point in our history. This was our
seventh straight year of sales and earnings growth, and we have never been in
a better position to continue, and possibly accelerate, our sales and earnings
growth," 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; the impact
of the Year 2000 issue; and changes in interest or tax rates.
Gibraltar is a growth-oriented company, with expanding operations in the
building products, metal processing, and commercial heat-treating markets.
The Company serves more than 9,000 customers in a variety of industries.
GIBRALTAR STEEL CORPORATION
Financial Highlights
(in thousands, except per share data)
Three Months Ended
December 31, 1998 December 31, 1997
(unaudited)
Net Sales $ 144,051 $ 107,961
Net Income $ 4,822 $ 3,486
Net Income Per Share-Basic $ .39 $ .28
Weighted Average Shares
Outstanding-Basic 12,483 12,406
Net Income Per Share-Diluted $ .38 $ .28
Weighted Average Shares
Outstanding-Diluted 12,685 12,611
Twelve Months Ended
December 31, 1998 December 31, 1997
(audited)
Net Sales $557,944 $449,700
Net Income $19,840 $16,416
Net Income Per Share-Basic $1.59 $1.33
Weighted Average Shares
Outstanding-Basic 12,456 12,357
Net Income Per Share-Diluted $1.57 $1.30
Weighted Average Shares
Outstanding-Diluted 12,651 12,591
GIBRALTAR STEEL CORPORATION
CONSOLIDATED BALANCE SHEET
(in thousands, except share and per share data)
December 31,
ASSETS 1998 1997
Current assets:
Cash and cash equivalents $1,877 $2,437
Accounts receivable 71,070 49,151
Inventories 99,351 76,701
Other current assets 3,536 2,457
Total current assets 175,834 130,746
Property, plant and equipment,
net 176,221 115,402
Other assets 86,380 35,188
$438,435 $281,336
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $38,601 $38,233
Accrued expenses 11,646 3,644
Current maturities of
long-term debt 1,351 1,224
Total current liabilities 51,598 43,101
Long-term debt 199,395 81,800
Deferred income taxes 25,289 15,094
Other non-current liabilities 1,845 1,297
Shareholders' equity
Preferred shares, $.01 par
value; authorized:
10,000,000 shares; none
outstanding -- --
Common shares, $.01 par value;
authorized: 50,000,000 shares;
issued and outstanding:
12,484,418 shares in 1998 and
12,409,619 in 1997 125 124
Additional paid-in capital 66,613 66,190
Retained earnings 93,570 73,730
Total shareholders' equity 160,308 140,044
$438,435 $281,336
GIBRALTAR STEEL CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(in thousands, except per share data)
Three Months Ended
December 31, Year Ended December 31,
1998 1997 1998 1997
Net sales $144,051 $107,961 $557,944 $449,700
Cost of sales 117,300 90,560 456,449 375,537
Gross profit 26,751 17,401 101,495 74,163
Selling, general and
administrative
expense 15,014 10,383 57,040 41,560
Income from operations 11,737 7,018 44,455 32,603
Interest expense 3,701 1,208 11,389 5,115
Income before taxes 8,036 5,810 33,066 27,488
Provision for income
taxes 3,214 2,324 13,226 11,072
Net income $4,822 $3,486 $19,840 $16,416
Net income per share
- Basic $.39 $.28 $1.59 $1.33
Weighted average shares
outstanding - Basic 12,483 12,406 12,456 12,357
Net income per share
- Diluted $.38 $.28 $1.57 $1.30
Weighted average shares
outstanding - Diluted 12,685 12,611 12,651 12,591
GIBRALTAR STEEL CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)
Year Ended December 31,
1998 1997
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $19,840 $16,416
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and amortization 13,333 8,478
Provision for deferred income
taxes 1,693 2,227
Undistributed equity investment
income (284) (444)
Other noncash adjustments 304 239
Increase (decrease) in cash
resulting from changes in
(net of effects from
acquisitions):
Accounts receivable (5,363) (176)
Inventories (6,309) 1,607
Other current assets (1,430) (726)
Accounts payable and
accrued expenses (7,572) (2,597)
Other assets (899) (289)
Net cash provided by
operating activities 13,313 24,735
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions, net of cash
acquired (99,415) (26,475)
Investments in property, plant
and equipment (22,062) (21,784)
Net proceeds from sale of
property and equipment 187 1,050
Net cash used in investing
activities (121,290) (47,209)
CASH FLOWS FROM FINANCING ACTIVITIES
Long-term debt reduction (61,508) (79,962)
Proceeds from long-term debt 168,825 98,417
Net proceeds from issuance of
common stock 100 911
Net cash provided by financing
activities 107,417 19,366
Net decrease in cash and
cash equivalents (560) (3,108)
Cash and cash equivalents at
beginning of year 2,437 5,545
Cash and cash equivalents at
end of year $1,877 $2,437