Gibraltar Acquires Hughes Manufacturing, Inc.
1 December 1999
Gibraltar Acquires Hughes Manufacturing, Inc.
Acquisition is Gibraltar's Ninth in Last Two Years; Strengthens Gibraltar's
Position in the Rapidly Expanding Steel Lumber Connector Market;
Solidifies MiTek Relationship
BUFFALO, N.Y., Dec. 1 -- Gibraltar today
announced that it has acquired Hughes Manufacturing, Inc., a Largo,
Florida-based manufacturer of highly engineered steel lumber connectors from
MiTek(R) Industries Inc. Terms of the acquisition were not disclosed.
Hughes Manufacturing, founded in 1962, manufactures a broad line of fully
engineered, code-approved steel lumber connectors from its 100,000-square-foot
facility in Largo, Florida. It expects to generate 1999 sales of
approximately $12 million. The company has approximately 110 employees, and
its products are marketed throughout the southeastern United States to
building material wholesalers and dealers.
"Hughes Manufacturing is an excellent complement to our United Steel
Products (USP) affiliate. (USP, acquired by Gibraltar on June 1, 1998, is the
nation's second largest manufacturer of steel lumber connectors.) The Hughes
acquisition solidifies our position in -- and puts us in an excellent position
to expand our share of -- this rapidly expanding market. Like all of our
acquisitions, we anticipate that the addition of Hughes will immediately
enhance our earnings per share," said Brian J. Lipke, Chairman and Chief
Executive Officer.
"The Hughes acquisition strengthens our relationship with MiTek, which is
the world's largest provider of connector plates, design software,
engineering, and machinery to the truss fabrication industry," said Mr. Lipke.
"We've had a strategic alliance with MiTek since our USP acquisition. Now,
with the addition of Hughes, we believe there are numerous opportunities for
us to grow the relationships with and sales to our combined customers."
MiTek Industries Inc., based in St. Louis, Missouri, has annual sales
exceeding $300 million and has operations on five continents employing more
than 1,200 people. "Our already excellent relationship with Gibraltar will be
significantly enhanced with its acquisition of Hughes Manufacturing. Together
we expect to rapidly increase our share of the truss-to-truss connector market
throughout the United States," said Gene Toombs, Chairman and Chief Executive
Officer of MiTek.
Steel lumber connectors are used to connect wood to wood, wood to
concrete, or wood to masonry. They are a vitally important part of the
construction process, especially in areas where earthquakes and
hurricane-force winds necessitate the construction of buildings that can
withstand the strains of severe weather. In response to the devastation
caused by many of the recent hurricanes and earthquakes, many municipalities
are making their building codes much tougher, which is leading to an increased
use of these products.
"This is our fifth acquisition in 1999, and our ninth in the last two
years. These nine immediately accretive acquisitions have added approximately
$200 million in annual revenue; helped us enhance and stabilize our margins;
increased our customer, geographic, and business diversification; solidified
our leadership position in two of our targeted growth areas: commercial
heat-treating and building products; given us a far greater range of
synergistic growth opportunities today than at any point in our history; and
moved us further up the value chain (with approximately 45 percent of sales
today coming from manufactured end products, versus 14 percent in 1993)," said
Mr. Lipke.
In the six years since becoming a public company, Gibraltar has grown its
sales and earnings at a rate greater than its 20 percent annual target. On
October 18, the Company announced that its third quarter net income increased
by 40 percent to $7.2 million, and that it was well positioned to surpass its
goal of 20 percent earnings growth in 1999 -- which will be the Company's
eighth straight year of sales and earnings growth. The Company is well ahead
of schedule to reach its goals of $1 billion in sales and $45 million in net
income by 2003, or sooner.
"The management team of Hughes Manufacturing, led by President David
Hartzell, is experienced and well-respected in the building products market.
We are pleased that David and his entire team have agreed to stay with the
company and work with us and the management team at United Steel Products to
accelerate the growth in this part of our company," 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 and construction products, metal processing, and commercial
heat-treating markets. The Company serves approximately 9,000 customers in a
variety of industries. It has approximately 3,300 employees and operates
50 facilities in 19 states and Mexico.
Gibraltar's news releases, along with comprehensive information about the
Company, are available on the Internet, at http://www.gibraltar1.com. There
are also links to the Hughes Manufacturing, USP, and MiTek Web sites, which
provide additional information on their products and services.