Gibraltar Industries released its recent third quarter financial results!
Gibraltar Industries, Inc. (Nasdaq: ROCK), a leading manufacturer and distributor of building products for industrial, infrastructure and residential markets, today reported its financial results for the three and nine month periods ended September 30, 2015. All financial metrics in this release reflect only the Company’s continuing operations unless otherwise noted.
Third-Quarter Consolidated Results
Gibraltar’s net sales for the third quarter of 2015 increased 30 percent to $305.0 million, compared with$234.1 million in the third quarter of 2014. Adjusted net income was $15.7 million, or $0.50 per diluted share, compared with $9.5 million, or $0.30 per diluted share, in the third quarter of 2014. The adjusted third-quarter 2015 results exclude special items with an after-tax net charge totaling $2.1 million, or$0.07 per diluted share, resulting primarily from costs related to the acquisition of RBI Solar, Inc., Rough Brothers Manufacturing Inc., and affiliates (collectively “RBI”) on June 9, costs related to business restructuring and the Company’s senior leadership transition. The adjusted third-quarter 2014 results excluded special items with an after-tax net gain totaling $0.1 million, or $0.01 per diluted share, resulting primarily from acquisition-related gains and exit activity costs related to business restructuring. Including these items in the respective periods, the Company’s third-quarter 2015 GAAP net income was $13.6 million, or $0.43 per diluted share, compared with net income of $9.6 million, or $0.31 per diluted share, in the third quarter of 2014.
“Gibraltar delivered strong financial results in the third quarter, as we continued to execute on the value-creation strategy we introduced late last year,” said Chief Executive Officer Frank Heard. “Although we continue to see very little market lift in any of our businesses, consolidated net sales were up 30 percent from the third quarter of 2014. This growth reflected sales at RBI, a strategic acquisition that we completed in the second quarter. Organic sales were down 5 percent year-over-year, as ongoing soft demand in the Industrial and Infrastructure Products segment more than offset continued growth in our postal storage and roofing-related businesses in the Residential Products segment.” “In addition to pursuing acquisitions as a strategic accelerator, our value creation strategy includes a strong focus on operational improvement in areas such as overhead reduction, strategic pricing, facilities consolidation and increased efficiency across the business,” Heard said. “As a result of these initiatives, our third-quarter adjusted EPS grew 67 percent year-over-year. Thirteen percentage points of this EPS improvement was generated by our base businesses despite the decline in organic sales, with the balance of 54 percentage points coming from the accretive addition of RBI.”
Third-Quarter Segment Results
Separate from the performance of the two segments highlighted below, the Company’s third-quarter results benefited from its acquisition of RBI, which was completed on June 9, 2015. RBI has established itself during the past six years as North America’s fastest-growing provider of solar racking solutions. RBI was accretive to the Company’s third-quarter results, adding adjusted earnings of $0.16 per diluted share on revenues of $81.6 million.
Third-quarter 2015 net sales in Gibraltar’s Residential Products segment increased 4 percent to $127.0 million, compared with $122.1 million for the third quarter of 2014. Third-quarter 2015 adjusted operating margin increased 150 basis points year-over-year to 13.1 percent. Sales growth in this segment reflected strong demand for postal storage products driven by conversions to centralized delivery, partially offset by a modest decrease in demand for roofing-related products. The segment’s adjusted operating margin reflected the benefit of higher volume and improved operational efficiencies.
Industrial and Infrastructure Products
Third-quarter 2015 net sales in Gibraltar’s Industrial & Infrastructure Products segment decreased 14 percent to $96.4 million, compared with $112.0 million for the third quarter of 2014. Adjusted operating margin improved by 240 basis points year-over-year to 8.4 percent as the combination of improved manufacturing efficiencies, tighter management of raw material costs, and initial benefits from 80/20 simplification helped offset the effect of the considerable revenue decrease. Sales in this segment reflected lower shipment volumes to industrial markets and a 3 percent decrease due to the effect of weaker foreign currencies in its Canadian and European operations. Third-quarter industrial demand was lower year-over-year as domestic energy and mining activity declined, in part due to the effects of lower oil prices, while the transportation infrastructure market continued to reflect near-term uncertainty in federal funding programs.
“We begin the fourth quarter fully focused on driving transformational change in our portfolio and in our financial results through the execution of our four-pillar strategy, which includes operational improvement, portfolio management, product innovation and acquisitions. In the near term, we are confident that Gibraltar will achieve the three key financial objectives we set for 2015: increasing adjusted earnings, making more efficient use of our capital, and delivering higher shareholder returns than we did in 2014,” Heard concluded. Gibraltar is raising its guidance for revenues and earnings for full year 2015. Gibraltar now expects to report full-year 2015 total revenues in the range of $990 million to $1.0 billion, an increase of approximately 15% compared to $862 million in 2014. Organic net sales for 2015 in the Company’s base businesses are expected to be slightly lower, year-over-year, with growth in residential-related product lines offset by a decline in industrial-related revenues. From the June 9, 2015 date of acquisition, RBI is expected to generate revenues of $155 million to $160 million through December 31, 2015.