Gibraltar Reports Third-Quarter Earnings of $0.64 Per Share

BUFFALO, N.Y.--(BUSINESS WIRE)--Gibraltar Industries, Inc. (NASDAQ: ROCK), a leading manufacturer, processor, and distributor of products for the building, industrial, and vehicular markets, today reported results for the quarter and nine months ended September 30, 2008.

Sales from continuing operations in the third quarter of 2008 were $377 million, an increase of ten percent compared to $343 million in the third quarter of 2007. Income from continuing operations increased by 69 percent to $19.3 million in the third quarter of 2008, or $0.64 per diluted share, compared to $11.4 million, or $0.38 per diluted share, in the third quarter of 2007.

In the first nine months of 2008, sales from continuing operations were $1.082 billion, up eight percent from $1.003 billion in the first nine months of 2007. Income from continuing operations in the first nine months of 2008 increased by 48 percent to $46.7 million, or $1.55 per diluted share, from $31.4 million, or $1.04 per diluted share, in the first nine months of 2007.

Gibraltar’s acquisition activity in 2007 allowed it to increase sales despite significantly weaker market conditions in 2008 compared to a year earlier, as acquisitions added sales of $14 million in the third quarter and $73 million in the first nine months of 2008. The Company also benefited from the continued strength of its businesses that sell to the commercial building, industrial, architectural, and international markets.

Brian J. Lipke, Gibraltar’s Chairman and Chief Executive Officer, stated, “We continued to lower our cost structure and de-lever our balance sheet. Our continued efforts to reshape and reposition Gibraltar contributed to our improved sales, margins, and EPS growth in the third quarter and first nine months of the year.”

Henning N. Kornbrekke, Gibraltar’s President and Chief Operating Officer, added, “During the quarter, we benefited from our many efforts to increase our operating efficiency, including 22 facility consolidations since January 2007, providing optimal results at the lower current volumes and positioning the business for improved performance as the end markets we serve return to normal levels. On October 3, 2008, we entered into a definitive agreement to sell our powder metals business, SCM Metal Products (SCM), which has been reported in our Processed Metal Products segment. We closed on the sale on November 5, 2008. We expect to continue focusing our resources and capital on those areas that we expect to provide the best long-term strategic fit.”

Looking ahead, Mr. Kornbrekke said that the Company expects a more significant seasonal slowdown in sales volume during the fourth quarter primarily driven by the overall volatility of the U.S. economy. He expects 2008 earnings per share from continuing operations to be in the range of $1.61 to $1.68 per diluted share if the sale of SCM had not occurred, compared to previous guidance of $1.50 to $1.65, and $1.03 in 2007, barring a significant change in current business conditions. However, we closed the SCM transaction on November 5; therefore, the results of SCM will be reclassified to discontinued operations for all periods presented. As a result, we expect 2008 earnings per share from continuing operations in the range of $1.47 to $1.54 per diluted share, compared to $0.89 per diluted share for 2007. The reduction of 2008 and 2007 earnings per share from continuing operations includes the reclassification to discontinued operations of SCM’s profits plus a portion of interest expense related to SCM’s net assets.

Gibraltar has scheduled a conference call on November 6, at 9:00 a.m. ET to review its third-quarter results and discuss its outlook for the balance of 2008. Details of the call can be found on Gibraltar’s Web site, at http://www.gibraltar1.com. If you are not able to participate in the call, you can listen to a replay on the Gibraltar web site. The presentation slides that will be discussed during the call are expected to be available on Wednesday, November 5, by 6:00 p.m. ET. The slides may be downloaded from the Conference Calls page of the Investor Info section of the Gibraltar website: http://www.gibraltar1.com/investors/index.cfm?page=48.

Gibraltar Industries is a leading manufacturer, processor, and distributor of products for the building, industrial, and vehicular markets. The Company serves customers in a variety of industries in all 50 states and throughout the world. It has approximately 3,500 employees and operates 64 facilities in 25 states, Canada, England, Germany, and Poland. Gibraltar’s common stock is a component of the S&P SmallCap 600 and the Russell 2000^® Index.

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: general economic conditions; the impact of the availability and the effects of changing raw material prices on the Company’s results of operations; energy prices and usage; the ability to pass through cost increases to customers; changing demand for the Company’s products and services; risks associated with the integration of acquisitions; and changes in interest or tax rates. In addition, such forward-looking statements could also be affected by general industry and market conditions, as well as regulatory changes. The Company undertakes no obligation to update publicly 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.

GIBRALTAR INDUSTRIES, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except per share data)
		September 30,			December 31,
		2008			2007
		(unaudited)
Assets
Current assets:
Cash and cash equivalents		$	27,537		$	35,287
Accounts receivable, net of reserve of $3,940 and $3,482 in 2008 and 2007, respectively			205,573			167,595
Inventories			244,454			212,909
Other current assets			18,194			20,362
Assets of discontinued operations			1,511			4,592
Total current assets			497,269			440,745
Property, plant and equipment, net			259,746			273,283
Goodwill			455,204			453,228
Acquired intangibles			95,931			96,871
Investment in partnership			2,856			2,644
Other assets			14,666			14,637
		$	1,325,672		$	1,281,408
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable		$	132,145		$	89,551
Accrued expenses			64,108			41,062
Current maturities of long-term debt			2,728			2,955
Liabilities of discontinued operations			-			657
Total current liabilities			198,981			134,225
Long-term debt			426,069			485,654
Deferred income taxes			78,471			78,071
Other non-current liabilities			17,421			15,698
Shareholders’ equity:
Preferred stock, $0.01 par value; authorized: 10,000,000 shares; none outstanding			-			-
Common stock, $0.01 par value; authorized 50,000,000 shares; issued 30,031,124 and 29,949,229 shares in 2008 and 2007			300			300
Additional paid-in capital			223,093			219,087
Retained earnings			379,485			337,929
Accumulated other comprehensive income			2,294			10,837
			605,172			568,153
Less: cost of 64,777 and 61,467 common shares held in treasury in 2008 and 2007			442			393
Total shareholders’ equity			604,730			567,760
		$	1,325,672		$	1,281,408

GIBRALTAR INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share data) (unaudited)
		Three Months Ended September 30,						Nine Months Ended September 30,
		2008			2007			2008			2007
Net sales		$	377,121		$	342,570		$	1,081,877		$	1,003,116
Cost of sales			298,210			278,796			864,625			821,539
Gross profit			78,911			63,774			217,252			181,577
Selling, general and administrative expense			43,405			38,409			124,669			110,029
Income from operations			35,506			25,365			92,583			71,548
Other (income) expense:
Equity in partnership’s income and other income			(612)			(356)			(973)			(1,023)
Interest expense			6,629			8,372			21,351			23,063
Total other expense			6,017			8,016			20,378			22,040
Income before taxes			29,489			17,349			72,205			49,508
Provision for income taxes			10,222			5,982			25,549			18,072
Income from continuing operations			19,267			11,367			46,656			31,436
Discontinued operations:
Loss from discontinued operations before taxes			(55)			(18,590)			(968)			(21,733)
Income tax benefit			(22)			(3,679)			(359)			(4,847)
Loss from discontinued operations			(33)			(14,911)			(609)			(16,886)
Net income (loss)		$	19,234		$	(3,544)		$	46,047		$	14,550
Net income per share - Basic:
Income from continuing operations		$	.64		$	.38		$	1.56		$	1.05
Loss from discontinued operations			-			(.50)			(.02)			(.56)
Net income (loss)		$	.64		$	(.12)		$	1.54		$	.49
Weighted average shares outstanding – Basic			29,999			29,873			29,971			29,847
Net income per share - Diluted:
Income from continuing operations		$	.64		$	.38		$	1.55		$	1.04
Loss from discontinued operations			-			(.50)			(.02)			(.56)
Net income (loss)		$	.64		$	(.12)		$	1.53		$	.48
Weighted average shares outstanding – Diluted			30,266			30,147			30,171			30,103

GIBRALTAR INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited)
		Nine Months Ended September 30,
		2008			2007
Cash flows from operating activities
Net income		$	46,047		$	14,550
Loss from discontinued operations			(609)			(16,886)
Income from continuing operations			46,656			31,436
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			27,430			23,789
Provision for deferred income taxes			(610)			797
Equity in partnership’s income and other income			(596)			(778)
Distributions from partnerships			609			603
Stock compensation expense			3,544			2,043
Noncash charges related to property, plant and equipment and other			4,294			551
Increase (decrease) in cash resulting from changes in (net of acquisitions and dispositions):
Accounts receivable			(39,529)			(22,360)
Inventories			(32,682)			27,701
Other current assets and other assets			1,363			1,463
Accounts payable			41,057			13,628
Accrued expenses and other non-current liabilities			23,764			(2,977)
Net cash provided by continuing operations			75,300			75,896
Net cash provided by discontinued operations			1,653			15,955
Net cash provided by operating activities			76,953			91,851
Cash flows from investing activities
Acquisitions, net of cash acquired			(8,604)			(203,980)
Purchases of property, plant and equipment			(14,107)			(12,826)
Net proceeds from sale of property and equipment			2,096			2,734
Net proceeds from sale of business			-			1,680
Net cash used in investing activities from continuing operations			(20,615)			(212,392)
Net cash provided by (used in) investing activities for discontinued operations			161			(69)
Net cash used in investing activities			(20,454)			(212,461)
Cash flows from financing activities
Long-term debt reduction			(113,506)			(2,128)
Proceeds from long-term debt			53,439			147,768
Payment of deferred financing costs			(104)			(1,440)
Payment of dividends			(4,491)			(4,476)
Purchase of treasury stock			(49)			-
Net proceeds from issuance of common stock			200			136
Tax benefit from equity compensation			262			-
Net cash (used in) provided by financing activities			(64,249)			139,860
Net (decrease) increase in cash and cash equivalents			(7,750)			19,250
Cash and cash equivalents at beginning of year			35,287			13,475