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$ROCK Gibraltar Reports Fourth-Quarter 2014 Financial Results

Last update: 20/02/2015 7:30:01 am
Gibraltar Reports Fourth-Quarter 2014 Financial Results

-- Q4 Adjusted EPS of $0.02; Q4 Sales Up 7% Versus Prior Year

-- Generates $33M of Operating Cash Flow in 2014; Contributes to $209M of Liquidity

BUFFALO, N.Y.--(BUSINESS WIRE)--February 20, 2015--

Gibraltar Industries, Inc. (Nasdaq: ROCK), a leading manufacturer and distributor of products for residential and industrial markets, today reported its financial results for the three and twelve months ended December 31, 2014. All financial metrics in this release reflect only the Company's continuing operations unless otherwise noted.

Fourth-Quarter Consolidated Results

Gibraltar's net sales for the fourth quarter of 2014 increased 7% to $202.0 million, compared with $188.8 million for the fourth quarter of 2013. Fourth-quarter 2014 adjusted net income was $0.7 million, or $0.02 per diluted share, compared with adjusted net income of $2.4 million, or $0.08 per diluted share, in the fourth quarter of 2013. The adjusted fourth-quarter 2014 results exclude special items with an after-tax net charge totaling $96.4 million, or $3.10 per share, resulting primarily from a non-cash intangible assets impairment. The impairment relates primarily to businesses within the Company's Industrial and Infrastructure Products segment and reflects reductions in the estimated fair values of these businesses. The adjusted fourth-quarter 2013 results exclude special items with an after-tax net benefit totaling $1.6 million, or $0.05 per diluted share, resulting primarily from the non-cash gain associated with the reversal of the Company's tax valuation allowance. Including these items in the respective periods, the Company's fourth-quarter 2014 GAAP results were a net loss of $95.7 million, or $3.08 per share, compared with net income of $4.0 million, or $0.13 per diluted share, in the fourth quarter of 2013.

Twelve-Month Consolidated Results

For the twelve months ended December 31, 2014, total net sales increased 4% to $862.1 million, from $827.6 million in 2013. Adjusted net income from continuing operations was $14.6 million, or $0.47 per diluted share, compared with $21.4 million, or $0.69 per diluted share, in 2013. The adjusted results for the twelve months of 2014 exclude special items with a non-cash after-tax net charge totaling $96.4 million, or $3.10 per share, resulting primarily from the aforementioned intangible assets impairment. The adjusted results for 2013 exclude after-tax special charges of $27.0 million, or $0.87 per diluted share, primarily for intangible asset impairment and debt refinancing costs. Including these items, GAAP net loss for 2014 was $81.8 million, or $2.63 per share, compared with a net loss of $5.6 million, or $0.18 per share, in 2013.

Management Comments

"Gibraltar closed 2014 with a solid fourth quarter," said Chief Executive Officer Frank Heard. "Net sales for the fourth quarter exceeded the high end of our guidance, growing 7% year-over-year. For the full year, net sales were up 4% representing growth primarily driven by stronger product demand in our postal storage and roofing-related businesses in the Residential Products segment, partially offset by lower demand in our Industrial and Infrastructure Products segment. Reflecting the impact of our operational initiatives, partially offset by pricing and material cost inflation, adjusted EPS for the fourth quarter came in near the top end of the range at $0.02 per share. For the full year, adjusted EPS matched the high end of our guidance at $0.47 per share."

"The fourth-quarter 2014 intangible assets impairment charge relates primarily to our Industrial and Infrastructure Products segment," stated Chief Financial Officer Kenneth Smith. "The segment's revenues and profit margins have decreased, and future cash flows are expected to be modest in the near term. This reflects, in part, slower economic conditions, excess capacity and increased competition, plus greater and ongoing uncertainty regarding government funding for future U.S. transportation projects."

"Despite the non-cash charge this quarter, our businesses in the Industrial and Infrastructure Products segment remain very competitive, have strong operational capabilities, and are competing aggressively in the end markets served," Heard said. "Looking ahead to 2015 and future years, our goals are to achieve stronger financial results, make more efficient use of Gibraltar's capital, and deliver higher shareholder returns than we did in 2014. To make meaningful progress toward achieving these goals, we will need to be aggressive in three key areas. The first is operational excellence; the second is portfolio management; and the third is to make effective use of acquisitions as a strategic accelerator for the business. Our overarching goal is to achieve best-in-class as it relates to sustainable value creation and shareholder returns over the long term. We look forward to reporting our progress in executing against this goal in 2015, as well as delivering improved financial results."

Fourth-Quarter Segment Results

Residential Products

Fourth-quarter 2014 net sales in Gibraltar's Residential Products segment increased 23% to $105.4 million, compared with $85.5 million for the fourth quarter of 2013. Fourth-quarter 2014 adjusted operating margin decreased 190 basis points year over year to 5.0%. Sales growth in this segment reflected strong demand for postal storage products as growth in conversions to centralized delivery continue. The segment's equivalent adjusted operating margin reflected the benefit of higher volume, offset by price reductions provided in certain product lines and costs to build out manufacturing capacity.

Industrial and Infrastructure Products

Fourth-quarter 2014 net sales in Gibraltar's Industrial & Infrastructure Products segment decreased 6% to $96.6 million, compared to $103.3 million for the fourth quarter 2013. Fourth-quarter 2014 adjusted operating margin decreased 380 basis points year over year to 2.5%. Sales in the segment reflected lower shipment volumes to both the industrial and transportation infrastructure markets. Industrial demand was slightly lower than prior year as the domestic energy and mining markets declined. Meanwhile, the transportation infrastructure market continues to be impacted by short-term uncertainty in federal funding programs. This segment's adjusted operating margin reflected lower volume and a less profitable mix compared with the year-earlier quarter due to lower infrastructure shipments. Higher raw material costs also contributed to the reduced margins for the segment.

Business Outlook

Gibraltar's net sales for full-year 2015 are currently forecasted to be in the range of $870 million to $880 million -- with growth expected in residential-related product lines. At this range, and reflecting anticipated profit expansion from cost reduction and other initiatives, adjusted earnings for 2015 are expected to be in the range of $0.55 to $0.65 per diluted share. For the first quarter of 2015, adjusted EPS are expected to be modestly improved compared to the first quarter of 2014.

Fourth-Quarter Conference Call Details

Gibraltar has scheduled a conference call today starting at 9:00 a.m. ET to review its results for the fourth quarter of 2014. Interested parties may access the call by dialing [phone] or [phone]. The presentation slides that will be discussed in the conference call are expected to be available this morning, prior to the start of the call. The slides may be downloaded from the Gibraltar website: www.gibraltar1.com. A webcast replay of the conference call and a copy of the transcript will be available on the website following the call.

About Gibraltar

Gibraltar Industries is a leading manufacturer and distributor of building products, focused on residential and low-rise commercial building markets, as well as industrial and transportation infrastructure markets. The Company generates more than 80% of its sales from products that hold leading positions in their markets, and serves customers across North America and Europe. Gibraltar's strategy is to grow organically by expanding its product portfolio and penetration of existing customer accounts, while broadening its market and geographic coverage through the acquisition of companies with leadership positions in adjacent product categories. Comprehensive information about Gibraltar can be found on its website at http://www.gibraltar1.com.

Safe Harbor Statement

Information contained in this news release, other than historical information, contains forward-looking statements and is subject to a number of risk factors, uncertainties, and assumptions. Risk factors that could affect these statements include, but are not limited to, the following: the availability of raw materials and the effects of changing raw material prices on the Company's results of operations; energy prices and usage; changing demand for the Company's products and services; changes in the liquidity of the capital and credit markets; risks associated with the integration of acquisitions; and changes in interest and tax rates. In addition, such forward-looking statements could also be affected by general industry and market conditions, as well as general economic and political conditions. The Company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable law or regulation.

Non-GAAP Financial Data

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February 20, 2015 07:30 ET (12:30 GMT)