FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

(Mark one)

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 0-22462

Gibraltar Industries, Inc.

(Exact name of Registrant as specified in its charter)

Delaware		16-1445150
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

3556 Lake Shore Road, P.O. Box 2028, Buffalo, New York 14219-0228
(Address of principal executive offices)

(716) 826-6500
(Registrant’s telephone number, including area code)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by checkmark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o		Accelerated filer þ		Non-accelerated filer   o (Do not check if a smaller reporting company)		Smaller reporting company o

Indicated by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.). Yes o No þ

As of November 1, 2010, the number of common shares outstanding was: 30,297,303.

 

 

GIBRALTAR INDUSTRIES, INC.

INDEX

		PAGE NUMBER
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2010 and 2009		3
Consolidated Balance Sheets as of September 30, 2010 and December 31, 2009		4
Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2010 and 2009		5
Consolidated Statement of Shareholders’ Equity for the Nine Months Ended September 30, 2010		6
Notes to Consolidated Financial Statements		7-27
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		28-43
Item 3. Quantitative and Qualitative Disclosures About Market Risk		44
Item 4. Controls and Procedures		44
PART II. OTHER INFORMATION
Item 1. Legal Proceedings		45
Item 1A. Risk Factors		45
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		45
Item 3. Defaults Upon Senior Securities		45
Item 4. (Removed and Reserved)		45
Item 5. Other Information		45
Item 6. Exhibits		46
EX-31.1
EX-31.2
EX-31.3
EX-32.1
EX-32.2
EX-32.3
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

PART I FINANCIAL INFORMATION

Item 1. Financial Statements

GIBRALTAR INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2010				2009				2010				2009
Net sales		$	182,061			$	190,520			$	531,360			$	547,661
Cost of sales			150,758				145,803				431,576				446,392
Gross profit			31,303				44,717				99,784				101,269
Selling, general, and administrative expense			25,840				26,437				80,226				77,101
Intangible asset impairment (recovery)			—				—				(177	)			25,501
Income (loss) from operations			5,463				18,280				19,735				(1,333	)
Interest expense			(4,746	)			(7,050	)			(16,483	)			(17,435	)
Equity in partnership’s income and other income			33				56				164				163
Income (loss) before taxes			750				11,286				3,416				(18,605	)
(Benefit of) provision for income taxes			(592	)			3,668				602				(7,298	)
Income (loss) from continuing operations			1,342				7,618				2,814				(11,307	)
Discontinued operations:
Loss before taxes			(236	)			(4,298	)			(30,697	)			(18,411	)
Benefit of income taxes			(91	)			(1,592	)			(11,330	)			(7,086	)
Loss from discontinued operations			(145	)			(2,706	)			(19,367	)			(11,325	)
Net income (loss)		$	1,197			$	4,912			$	(16,553	)		$	(22,632	)
Net income (loss) per share – Basic:
Income (loss) from continuing operations		$	0.04			$	0.25			$	0.09			$	(0.38	)
Loss from discontinued operations			(0.00	)			(0.09	)			(0.64	)			(0.37	)
Net income (loss)		$	0.04			$	0.16			$	(0.55	)		$	(0.75	)
Weighted average shares outstanding – Basic			30,325				30,158				30,295				30,126
Net income (loss) per share – Diluted:
Income (loss) from continuing operations		$	0.04			$	0.25			$	0.09			$	(0.38	)
Loss from discontinued operations			(0.00	)			(0.09	)			(0.63	)			(0.37	)
Net income (loss)		$	0.04			$	0.16			$	(0.54	)		$	(0.75	)
Weighted average shares outstanding – Diluted			30,442				30,338				30,442				30,126

See accompanying notes to consolidated financial statements.

GIBRALTAR INDUSTRIES, INC.

CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
(unaudited)

		September 30,				December 31,
		2010				2009
Assets
Current assets:
Cash and cash equivalents		$	48,315			$	23,596
Accounts receivable, net of reserve of $3,673 and $3,853 in 2010 and 2009, respectively			96,222				71,782
Inventories			85,230				86,296
Other current assets			17,006				25,513
Assets of discontinued operations			5,307				44,938
Total current assets			252,080				252,125
Property, plant, and equipment, net			165,833				174,704
Goodwill			393,640				392,704
Acquired intangibles			78,141				82,182
Investment in partnership			127				2,474
Other assets			17,133				17,811
Assets of discontinued operations			—				52,942
		$	906,954			$	974,942
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable		$	65,571			$	47,383
Accrued expenses			42,676				38,757
Current maturities of long-term debt			408				408
Liabilities of discontinued operations			4,547				22,468
Total current liabilities			113,202				109,016
Long-term debt			206,706				256,874
Deferred income taxes			52,552				51,818
Other non-current liabilities			19,818				16,791
Liabilities of discontinued operations			—				12,217
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; 30,516,197 and 30,295,084 shares issued at September 30, 2010 and December 31, 2009, respectively			305				303
Additional paid-in capital			231,284				227,362
Retained earnings			287,429				303,982
Accumulated other comprehensive loss			(2,037	)			(2,230	)
Cost of 218,894 and 150,903 common shares held in treasury at September 30, 2010 and December 31, 2009, respectively			(2,305	)			(1,191	)
Total shareholders’ equity			514,676				528,226
		$	906,954			$	974,942

See accompanying notes to consolidated financial statements

GIBRALTAR INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)

		Nine Months Ended
		September 30,
		2010				2009
Cash Flows from Operating Activities
Net loss		$	(16,553	)		$	(22,632	)
Loss from discontinued operations			(19,367	)			(11,325	)
Income (loss) from continuing operations			2,814				(11,307	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization			19,916				19,535
Intangible asset impairment (recovery)			(177	)			25,501
Provision for deferred income taxes			375				(10,749	)
Equity in partnership’s income			(23	)			(55	)
Stock compensation expense			3,599				3,426
Non-cash charges to interest expense			3,762				2,797
Other non-cash adjustments			1,026				3,224
Increase (decrease) in cash resulting from changes in:
Accounts receivable			(24,824	)			1,269
Inventories			(187	)			44,077
Other current assets and other assets			7,341				(4,780	)
Accounts payable			19,048				3,174
Accrued expenses and other non-current liabilities			6,984				7,454
Net cash provided by operating activities of continuing operations			39,654				83,566
Net cash provided by operating activities of discontinued operations			14,774				28,026
Net cash provided by operating activities			54,428				111,592
Cash Flows from Investing Activities
Net proceeds from sale of business			29,164				—
Net proceeds from sale of property and equipment			271				269
Additional consideration for acquisitions			—				(4,354	)
Purchase of investment in partnership			(1,000	)			—
Purchases of property, plant, and equipment			(6,347	)			(7,443	)
Net cash provided by (used in) investing activities of continuing operations			22,088				(11,528	)
Net cash used in investing activities of discontinued operations			(436	)			(629	)
Net cash provided by (used in) investing activities			21,652				(12,157	)
Cash Flows from Financing Activities
Long-term debt payments			(58,967	)			(122,172	)
Proceeds from long-term debt			8,559				30,948
Purchase of treasury stock at market prices			(1,114	)			(627	)
Payment of deferred financing fees			(164	)			(2,292	)
Payment of dividends			—				(1,499	)
Excess tax benefit from stock compensation			55				—
Net proceeds from issuance of common stock			270				—
Net cash used in financing activities			(51,361	)			(95,642	)
Net increase in cash and cash equivalents			24,719				3,793
Cash and cash equivalents at beginning of year			23,596				11,308
Cash and cash equivalents at end of period		$	48,315			$	15,101

See accompanying notes to consolidated financial statements

GIBRALTAR INDUSTRIES, INC.

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY
(in thousands)
(unaudited)

																		Accumulated
										Additional								Other												Total
		Common Stock								Paid-In				Retained				Comprehensive				Treasury Stock								Shareholders’
		Shares				Amount				Capital				Earnings				Loss				Shares				Amount				Equity
Balance at December 31, 2009			30,295			$	303			$	227,362			$	303,982			$	(2,230	)			151			$	(1,191	)		$	528,226
Net loss			—				—				—				(16,553	)			—				—				—				(16,553	)
Foreign currency translation adjustment			—				—				—				—				(1,064	)			—				—				(1,064	)
Adjustment to post-retirement health care liability			—				—				—				—				1				—				—				1
Adjustment to retirement benefit liability, net of taxes of $33			—				—				—				—				50				—				—				50
Reclassification of unrealized loss on interest rate swap, net of tax of $693			—				—				—				—				1,206				—				—				1,206
Issuance of restricted stock			6				—				—				—				—				—				—				—
Stock compensation expense			—				—				3,599				—				—				—				—				3,599
Net settlement of restricted stock units			187				2				(2	)			—				—				68				(1,114	)			(1,114	)
Stock options exercised			28				—				270				—				—				—				—				270
Excess tax benefit from stock compensation			—				—				55				—				—				—				—				55
Balance at September 30, 2010			30,516			$	305			$	231,284			$	287,429			$	(2,037	)			219			$	(2,305	)		$	514,676

See accompanying notes to consolidated financial statements.

GIBRALTAR INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1. CONSOLIDATED FINANCIAL STATEMENTS

The accompanying consolidated financial statements have been prepared by Gibraltar Industries, Inc. (the Company) without audit. In the opinion of management, all adjustments (consisting of normal recurring adjustments and accruals) necessary to present fairly the financial position at September 30, 2010 and December 31, 2009, the results of operations for the three and nine months ended September 30, 2010 and 2009, the statements of cash flow for the nine months ended September 30, 2010 and 2009, and the statement of shareholders’ equity for the nine months ended September 30, 2010 have been included therein in accordance with U.S. Securities and Exchange Commission (SEC) rules and regulations and prepared using the same accounting principles as are used for our annual audited financial statements.

Certain information and footnote disclosures, including significant accounting policies normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America, have been condensed or omitted in accordance with the prescribed SEC rules. It is suggested that these consolidated financial statements be read in conjunction with the consolidated financial statements and footnotes included in the Company’s Annual Report to Shareholders for the year ended December 31, 2009 as filed on Form 10-K.

The consolidated balance sheet at December 31, 2009 has been derived from the audited consolidated financial statements at that date, restated for discontinued operations, but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. Certain 2009 amounts have been reclassified to conform to the 2010 presentation.

The results of operations for the three and nine month periods ended September 30, 2010 are not necessarily indicative of the results to be expected for the full year.

2. RECENT ACCOUNTING PRONOUNCEMENTS

In February 2010, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (Update) 2010-09, “Subsequent Events (Topic 855) – Amendments to Certain Recognition and Disclosure Requirements.” Update 2010-09 removes the requirement for SEC filers to disclose the date through which an entity has evaluated subsequent events. However, the disclosure exemption does not relieve management of an SEC filer from its responsibility to evaluate subsequent events through the date on which financial statements are issued. Update 2010-09 became effective for the Company for the fourth quarter of 2009. The adoption of the provisions of the Update did not have a material impact on the Company’s consolidated financial statements.

In July 2010, the FASB issued Update 2010-20, “Receivables (Topic 310) – Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses.” Update 2010-20 requires additional disclosure to assist financial statement users in assessing an entity’s credit risk exposures and evaluating the adequacy of its allowance for credit losses. Update 2010-20 affects all entities with financing receivables, excluding short-term trade accounts receivables or receivables measures at fair value or lower of cost or fair value. The Company is required to adopt all of the provisions of Update 2010-20 related to disclosures of financing receivables as of December 31, 2010. The financing receivables disclosures related to activity that occurs during a reporting period are required to be adopted by the Company during the three months ending March 31, 2011. The Company does not believe the provisions of this guidance will have a significant impact on the Company’s consolidated financial position, cash flows, or results of operations.

3. INVENTORIES

Inventories consist of the following (in thousands):

		September 30,				December 31,
		2010				2009
Raw material		$	34,172			$	34,478
Work-in-process			4,840				4,868
Finished goods			46,218				46,950
Total inventories		$	85,230			$	86,296

4. ACQUISITIONS

In 2006, the Company acquired all of the outstanding stock of Home Impressions, Inc. (Home Impressions). As part of the purchase agreement with the former owners of Home Impressions, the Company was required to pay additional consideration based upon the operating results of Home Impressions. The Company paid $4,354,000 of such additional consideration during the nine months ended September 30, 2009. These additional consideration payments were recorded as additional goodwill. The Company has made the final contingent payment due under the purchase agreement and no further additional consideration payments are expected.

5. GOODWILL AND RELATED INTANGIBLE ASSETS

Goodwill

The changes in the carrying amount of goodwill for the nine months ended September 30, 2010 are as follows (in thousands):

Balance as of December 31, 2009		$	392,704
Impairment recovery			177
Goodwill acquired			1,352
Foreign currency translation			(593	)
Balance as of September 30, 2010		$	393,640

The goodwill balances as of September 30, 2010 and December 31, 2009 are net of accumulated impairment losses of $58,831,000 and $59,008,000, respectively, which were generated during the year ended December 31, 2009. An adjustment to the impairment charges was recognized during the nine months ended September 30, 2010 as described below.

As described in Note 6 of the consolidated financial statements, the Company entered into a membership interest purchase agreement on May 24, 2010 to acquire a 10% membership interest in Structural Soft, LLC. The Company’s investment in Structural Soft, LLC exceeded its applicable share of the investee’s net assets at the date the membership interest was purchased and resulted in equity method goodwill of approximately $1,352,000. Equity method goodwill is not amortized or tested for impairment with the Company’s other goodwill. The Company reviews the equity method goodwill for impairment when indicators of impairment exist and would recognize an impairment loss when there is a loss in the value of the equity method investment which is deemed to be other than a temporary decline.

Based on lower than forecasted sales volumes during 2009, revised long-term growth expectations, and a book value of equity in excess of market capitalization, the Company concluded there were indicators of goodwill impairment requiring interim impairment tests for its eleven reporting units as of March 31, 2009 and June 30, 2009. As of September 30, 2010, the Company concluded that no new indicators of goodwill impairment existed and an interim test was not performed.

Step one of the goodwill impairment tests as of March 31, 2009 and June 30, 2009 consisted of comparing the fair value of a reporting unit, determined using estimated discounted cash flows, with its carrying amount including goodwill. The fair value of each reporting unit with goodwill was estimated using a weighted average cost of capital (WACC) between 12.0% and 12.6%. The WACC was calculated based upon the capital structure of eight market participants in the Company’s peer group. A third-party forecast of housing starts was utilized to prepare the estimated cash flows.

As of the March 31, 2009 goodwill impairment test, one reporting unit had a carrying amount exceeding the reporting unit’s fair value due to a decrease in projected revenues to be generated by the reporting unit. Therefore, the Company initiated step two of the goodwill impairment test which involved calculating the implied fair value of goodwill by allocating the fair value of the reporting unit to its assets and liabilities other than goodwill and comparing it to the carrying amount of goodwill. As a result of step two of the goodwill impairment test, the Company estimated that the implied fair value of goodwill for the reporting unit was less than its carrying value by $25,501,000, which was recorded as an impairment charge during the three months ended March 31, 2009. All other reporting units with goodwill had an estimated fair value in excess of their carrying value as of the March 31, 2009 goodwill impairment test. All reporting units with goodwill had an estimated fair value in excess of their carrying value as of the June 30, 2009 goodwill impairment test.

The Company recorded goodwill impairment charges of $33,507,000 during the three months ended December 31, 2009 based on estimates used to determine a preliminary allocation of fair value under the second step of the annual goodwill impairment test. During the three months ended March 31, 2010, the Company finalized the determination of fair value for intangible assets which led to a $177,000 decrease in the goodwill impairment estimated during the fourth quarter of 2009. The Company recorded the adjustment to the impairment charge and recognized an increase in operating income during the three months ended March 31, 2010.

The Company will continue to monitor impairment indicators and financial results in future periods. If cash flows change or if the market value of the Company’s stock does not increase, there may be additional impairment charges. Impairment charges could be based on factors such as the Company’s stock price, forecasted cash flows, assumptions used, control premiums, or other variables.

Acquired Intangible Assets

Acquired intangible assets consist of the following (in thousands):

		September 30, 2010								December 31, 2009
		Gross Carrying				Accumulated				Gross Carrying				Accumulated
		Amount				Amortization				Amount				Amortization				Estimated Life
Trademark		$	40,585			$	—			$	40,612			$	—			indefinite
Trademark			2,115				(867	)			2,115				(744	)			2 to 15 years
Unpatented Technology			5,732				(2,188	)			5,732				(1,795	)			5 to 20 years
Customer Relationships			47,860				(15,918	)			48,086				(12,910	)			5 to 15 years
Non-Competition Agreements			2,800				(1,978	)			2,799				(1,713	)			5 to 10 years
		$	99,092			$	(20,951	)		$	99,344			$	(17,162	)

The following table summarizes the acquired intangible asset amortization expense for the three and nine months ended September 30 (in thousands):

		2010				2009
Three months ended September 30		$	1,304			$	1,308
Nine months ended September 30		$	3,887			$	3,888

Amortization expense related to acquired intangible assets for the remainder of fiscal 2010 and the next five years thereafter is estimated as follows (in thousands):

2010		$	1,271
2011		$	5,085
2012		$	4,961
2013		$	4,670
2014		$	3,790
2015		$	3,683

6. EQUITY METHOD INVESTMENT

On May 24, 2010, the Company entered into a membership interest purchase agreement to acquire a 10% membership interest in Structural Soft, LLC. Structural Soft, LLC is a developer of software used in the design of residential construction projects. The investment is accounted for using the equity method of accounting, under which the Company’s share of the earnings of the investee is recognized in income as earned and distributions are credited against the investment when received. The Company’s proportionate share in the net assets of Structural Soft, LLC was approximately $127,000 at September 30, 2010.

7. RELATED PARTY TRANSACTIONS

Two members of the Company’s Board of Directors, Gerald S. Lippes and Arthur A. Russ, Jr., are partners in law firms that provide legal services to the Company. For the three and nine months ended September 30, 2010, the Company incurred expense of $161,000 and $813,000, respectively, for legal services from these firms. The Company incurred $340,000 and $875,000 of expense for legal services from these firms during the three and nine months ended September 30, 2009, respectively. Of the amounts incurred during the nine months ended September 30, 2010, $176,000 related to the sale of the Processed Metal Products business and was recognized as a component of discontinued operations. All other amounts incurred during the 2010 and 2009 periods were expensed as a component of selling, general, and administrative expenses. At September 30, 2010 and December 31, 2009, the Company had $151,000 and $160,000, respectively, recorded in accounts payable for amounts due to these law firms.

A member of the Company’s Board of Directors, Robert E. Sadler, Jr., is a member of the Board of Directors of M&T Bank Corporation, one of the eleven participating lenders which have committed capital under the Company’s Third Amended and Restated Credit Agreement dated July 24, 2009 (the Senior Credit Agreement). As of September 30, 2010 and December 31, 2009, the Senior Credit Agreement provided the Company with a revolving credit facility with availability up to $200 million. See Note 8 to the consolidated financial statements for the amounts outstanding on the revolving credit facility as of September 30, 2010 and December 31, 2009.

8. LONG-TERM DEBT

Long-term debt consists of the following (in thousands):

		September 30,				December 31,
		2010				2009
Revolving credit facility		$	—			$	50,000
Senior Subordinated 8% Notes recorded net of unamortized discount of $2,110 and $2,350 at September 30, 2010 and December 31, 2009, respectively			201,890				201,650
Other debt			5,224				5,632
Total debt			207,114				257,282
Less current maturities			408				408
Total long-term debt		$	206,706			$	256,874

Standby letters of credit of $13,699,000 have been issued under the Senior Credit Agreement to third parties on behalf of the Company as of September 30, 2010. These letters of credit reduce the amount otherwise available under the revolving credit facility. As of September 30, 2010, the Company had $104,275,000 of availability under the revolving credit facility.

Borrowings under the Senior Credit Agreement are secured by the trade receivables, inventory, personal property and equipment, and certain real property of the Company’s significant domestic subsidiaries. The Senior Credit Agreement provides for a revolving credit facility and letters of credit in an aggregate amount that do not exceed the lesser of (i) $200 million or (ii) a borrowing base determined by reference to the trade receivables, inventories, and property, plant, and equipment of the Company’s significant domestic subsidiaries. The revolving credit facility is committed through August 30, 2012. The Senior Credit Agreement also provided a term loan originally aggregating $58,730,000, which was subsequently repaid in full during 2009.

Borrowings under the revolving credit facility bear interest at a variable rate based upon the London Interbank Offered Rate (LIBOR), with a LIBOR floor of 1.50%, plus 3.25% or, at the Company’s option, an alternate base rate. The revolving credit facility also carries an annual facility fee of 0.50% on the entire facility, whether drawn or undrawn, and fees on outstanding letters of credit which are payable quarterly.

Borrowings under the term loan bore interest at LIBOR, with a LIBOR floor of 1.50%, plus 3.75% or, at the Company’s option, an alternate base rate.

On a trailing four-quarter basis, the Senior Credit Agreement includes a single financial covenant that requires the Company to maintain a minimum fixed charge coverage ratio of 1.25 to 1.00 at the end of each quarter. As of September 30, 2010, the Company was in compliance with this financial covenant. The Senior Credit Agreement contains other provisions and events of default that are customary for similar agreements and may limit the Company’s ability to take various actions. The Company’s significant domestic subsidiaries have guaranteed the obligations under the Senior Credit Agreement.

On December 8, 2005, the Company issued $204,000,000 of Senior Subordinated 8% Notes (8% Notes), due December 1, 2015, at a discount to yield 8.25%. The 8% Notes are guaranteed by certain existing and future domestic subsidiaries and are not subject to any sinking fund requirements.

9. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

The Company is exposed to certain risks relating to its ongoing business operations. The primary risk managed by using derivative instruments is interest rate risk. Interest rate swaps are entered into to manage interest rate risk associated with the Company’s variable-rate borrowings. During the three and nine months ended September 30, 2010 and 2009, the Company had an interest rate swap outstanding with a notional amount of $57,500,000, which expires on December 22, 2010. The Company designated its interest rate swap as a cash flow hedge at inception.

In connection with the execution of the Company’s Third Amended and Restated Credit Agreement dated July 24, 2009, the Company de-designated the swap as a hedge and beginning in the third quarter of 2009 all changes in the fair value of the swap were prospectively recorded in earnings as increases or decreases to interest expense. During the second half of 2009 and the first quarter of 2010, the Company amortized amounts remaining in accumulated other comprehensive loss related to the swap to interest expense.

On February 1, 2010, the Company sold the majority of the assets of the Process Metal Products business as disclosed in Note 13 of the consolidated financial statements. The Company used the proceeds from the sale together with cash generated from operations to repay all remaining variable-rate debt during the three months ended March 31, 2010. Accordingly, all losses previously deferred in accumulated other comprehensive loss related to the interest rate swap were reclassified to interest expense during the three months ended March 31, 2010. Changes in the fair value of the swap continued to be recorded in earnings and will be until the swap expires.

FASB Accounting Standards Codification (ASC) Topic 815, “Derivatives and Hedging,” requires assets or liabilities to be recognized in the consolidated balance sheet at fair value for all derivative instruments. The determination of the fair value of the interest rate swap is disclosed in Note 12. As of September 30, 2010 and December 31, 2009, the Company recorded liabilities of $688,000 and $2,564,000, respectively, as an accrued expense on the consolidated balance sheets for the interest rate swap.

As noted above, all losses reported as a component of accumulated other comprehensive loss related to the interest rate swap were reclassified into earnings as interest expense during the three months ended March 31, 2010. Additionally, changes in the fair value of the interest rate swap were recorded in current earnings as interest expense or income during the three and nine months ended September 30, 2010.

During the three and nine months ended September 30, 2009, the effective portion of the gain or loss on the interest rate swap was reported as a component of other comprehensive income and reclassified into earnings as interest expense accrued on the applicable variable-rate borrowings. Gains or losses on the interest rate swap representing hedge ineffectiveness were recognized in current earnings as interest expense or income during the three and nine months ended September 30, 2009.

The following table summarizes the gains and losses recorded in interest expense and other comprehensive income as a result of the interest rate swap for the three and nine months ended September 30 (in thousands):

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2010				2009				2010				2009
Adjustments to interest expense:
Loss reclassified from accumulated other comprehensive income		$	—			$	490			$	1,899			$	1,519
Loss from changes in the fair value of the ineffective portion of the interest rate swap			54				755				170				759
Total loss included in interest expense		$	54			$	1,245			$	2,069			$	2,278
Adjustments to other comprehensive income:
Realized loss reclassified to interest expense, net of taxes		$	—			$	311			$	302			$	954
Unrealized loss reclassified to interest expense, net of taxes			—				—				904				—
Unrealized loss from changes in the fair value of the effective portion of the interest rate swap, net of taxes			—				—				—				(44	)
Gain included in other comprehensive income		$	—			$	311			$	1,206			$	910

10. EMPLOYEE RETIREMENT AND OTHER POST-RETIREMENT BENEFIT PLANS

The following tables present the components of net periodic pension and other post-retirement benefit costs charged to expense for the three and nine months ended September 30 (in thousands):

		Pension Benefit
		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2010				2009				2010				2009
Service cost		$	20			$	28			$	60			$	83
Interest cost			42				44				128				132
Amortization of unrecognized prior service cost			29				16				83				50
Net periodic benefit costs		$	91			$	88			$	271			$	265

		Other Post-retirement Benefits
		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2010				2009				2010				2009
Service cost		$	3			$	18			$	10			$	54
Interest cost			57				64				170				191
Amortization of unrecognized prior service cost			(1	)			(5	)			(3	)			(14	)
Loss amortization			4				16				12				49
Curtailment benefit			(3	)			—				(8	)			—
Net periodic benefit costs Net periodic benefit costs		$	60			$	93			$	181			$	280

11. EQUITY-BASED COMPENSATION

Equity-based payments to employees and directors, including grants of stock options, restricted stock units, and restricted stock, are recognized in the statements of operations based on the grant date fair value of the award. The Company uses the straight-line method of attributing the value of stock-based compensation expense over the vesting periods. Stock compensation expense recognized during the period is based on the value of the portion of equity-based awards that is ultimately expected to vest during the period. Vesting requirements vary for directors, executives, and key employees with a range that typically equals three to four years.

The Gibraltar Industries, Inc. 2005 Equity Incentive Plan (the Plan) is an incentive compensation plan that allows the Company to grant equity-based incentive compensation awards to eligible participants to provide them an additional incentive to promote the business of the Company, to increase their proprietary interest in the success of the Company, and to encourage them to remain in the Company’s employ. Awards under the plan may be in the form of options, restricted shares, restricted units, performance shares, performance stock units, and rights. The Plan provides for the issuance of up to 3,000,000 shares of common stock. Of the total number of shares of common stock issuable under the Plan, the aggregate number of shares which may be issued in connection with grants of incentive stock options and rights cannot exceed 900,000 shares. Vesting terms and award life are governed by the award document.

The following table provides the number of restricted stock units (that will convert to shares upon vesting) and non-qualified stock options that were issued during the nine months ended September 30 along with the weighted average grant date fair value of each type of award:

		2010								2009
						Weighted								Weighted
						Average								Average
		Number of				Grant Date				Number of				Grant Date
Awards		Awards				Fair Value				Awards				Fair Value
Restricted Stock Units			169,867			$	16.80				280,696			$	11.92
Restricted Shares			6,000			$	12.74				6,000			$	7.92
Non-qualified Stock Options			131,000			$	4.62				146,850			$	5.88

In September 2009, the Company awarded 905,000 performance stock units. As of September 30, 2010, 884,667 of the originally awarded performance stock units remain outstanding after forfeitures and re-issuances. The final number of performance stock units earned will be determined based on the Company’s total stockholder returns relative to a peer group for three separate performance periods, consisting of the years ending December 31, 2009, 2010, and 2011. The performance stock units earned will be converted to cash based on the trailing 90-day closing price of the Company’s common stock as of the last day of the third performance period and will be paid in January 2012. During the first performance period consisting of the year ended December 31, 2009, participants earned 34% of the targeted 295,000 performance stock units, or 100,300 units.

The cost of the performance stock awards will be accrued over the vesting period which ends December 31, 2011. As of September 30, 2010 and December 31, 2009, the value of the performance stock units accrued was based on a weighted average fair value of $4.15 and $13.73 per unit awarded, respectively. The fair value per unit awarded was estimated using the actual performance stock units earned during the first performance period ended December 31, 2009, an estimate of the number of units expected to be earned during the remaining performance periods ending December 31, 2010 and 2011, and the estimated trailing 90-day closing price of the Company’s stock as of December 31, 2011 discounted to present value. The following table summarizes the compensation expense recognized from the change in fair value and vesting of performance stock units awarded for the three and nine months ended September 30 (in thousands):

		2010				2009
Three months ended September 30		$	59			$	97
Nine months ended September 30		$	42			$	97

The Management Stock Purchase Plan (MSPP) is an integral component of the Plan and provides participants the ability to defer a portion of their salary, their annual bonus under the Management Incentive Compensation Plan, and Directors’ fees. The deferral is converted to restricted stock units and credited to an account together with a company-match in restricted stock units equal to a percentage of the deferral amount. The account is converted to cash at the trailing 200-day average closing price of the Company’s stock and payable to the participants upon a termination of their service to the Company. The matching portion vests only if the participant has reached their sixtieth (60^th) birthday. If a participant terminates their service to the Company prior to age sixty (60), the match is forfeited. Upon termination, the account is converted to a cash account that accrues interest at 2% over the then current ten-year U.S. Treasury note rate. The account is then paid out in five equal annual cash installments.

The fair value of restricted stock units held in the MSPP equals the trailing 200-day closing price of the Company’s common stock as of the last day of the period. During the nine months ended September 30, 2010 and 2009, 144,536 and 119,036 restricted stock units, respectively, including the company-match, were credited to participant accounts. At September 30, 2010 and December 31, 2009, the value of the restricted stock units in the MSPP was $12.32 and $10.52 per unit, respectively. At September 30, 2010 and December 31, 2009, 448,497 and 303,961 restricted stock units, including the company-match, were credited to participant accounts including 41,106 and 33,368, respectively, of unvested restricted stock units.

12. FAIR VALUE MEASUREMENTS

FASB ASC Topic 820, “Fair Value Measurements and Disclosures,” defines fair value, sets out a framework for measuring fair value, and requires certain disclosures about fair value measurements. A fair value measurement assumes that the transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. Fair value is defined based upon an exit price model.

Topic 820 establishes a valuation hierarchy for disclosure of the inputs used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based on our own assumptions used to measure assets and liabilities at fair value. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.

The following table provides the assets and liabilities carried at fair value measured on a recurring basis as of September 30, 2010 (in thousands):

		Asset
		(Liability)				Level 1				Level 2				Level 3
Interest rate swap		$	(688	)		$	—			$	(688	)		$	—

Interest rate swaps are over-the-counter securities with no quoted readily available Level 1 inputs and, therefore, are measured at fair value using inputs that are directly observable in active markets and are classified within Level 2 of the valuation hierarchy, using the income approach adjusted for the creditworthiness of the parties involved in the transaction. See Note 9 for a description of where changes in the fair value of the interest rate swap are recorded within the Company’s consolidated financial statements.

The Company applied the provisions of Topic 820 during the goodwill impairment tests performed as of March 31, 2009, June 30, 2009, and October 31, 2009. Step one of the goodwill impairment test consists of determining a fair value for each of the Company’s eleven reporting units. The fair value for the Company’s reporting units cannot be determined using readily available quoted Level 1 inputs or Level 2 inputs that are observable in active markets. Therefore, the Company used two valuation techniques to estimate the fair values of its reporting units, using Level 3 inputs. The Company used an income approach consisting of a discounted cash flow model and a market approach consisting of an earnings multiple applied to forecasted earnings. The Company used significant estimates and judgmental factors in both valuation models. The key estimates and factors used in the valuation models include revenue growth rates and profit margins based on internal forecasts, terminal value, and the weighted-average cost of capital used to discount future cash flows. As a result of the goodwill impairment test performed during the three months ended March 31, 2009, the Company recognized a goodwill impairment charge for one reporting unit to value goodwill at its implied fair value. The fair value measurements of the reporting units under the step one and step two analyses included unobservable inputs defined above that are classified as Level 3 inputs. As of September 30, 2010, the Company concluded that no new indicators of goodwill impairment existed and an interim test was not performed. However, during the first quarter of 2010, the Company recorded a recovery of the intangible asset impairment recognized as a result of the October 31, 2009 goodwill impairment test. See Note 5 of the consolidated financial statements for additional disclosure related to the results of the Company’s 2009 goodwill impairment tests. The Company made no non-recurring fair value measurements during the nine months ended September 30, 2010.

The Company’s financial instruments primarily consist of cash and cash equivalents, accounts receivable, notes receivable, accounts payable, long-term debt, and interest rate swaps. The carrying values for our financial instruments approximate fair value with the exception, at times, of long-term debt. At September 30, 2010, the fair value of outstanding debt was $212,284,000 compared to its carrying value of $207,114,000. The fair value of the Company’s Senior Subordinated 8% Notes was estimated based on quoted market prices.

13. DISCONTINUED OPERATIONS

On February 1, 2010, the Company sold the majority of the assets of the Processed Metal Products business. The assets were sold for $29,164,000, net of a working capital adjustment of $936,000. This transaction finalized the Company’s exit from the steel processing business and established the Company solely as a manufacturer and distributor of products for building markets. The Company incurred an after-tax loss of $19,451,000 from the transaction, net of $11,424,000 of tax benefits. In connection with the sale of the assets of the Processed Metal Products business, the Company recorded a contingent liability for an amount due to exit an underfunded multi-employer pension plan. The amount due is expected to be finalized during the fourth quarter of 2010. Accordingly, the liability was established based on our best estimate of the amount due. The Company did not sell certain real estate held by the Processed Metal Products business and the receivables generated from the operation of the business prior to its sale. Subsequent to February 1, 2010, the Company collected these receivables net of uncollectible amounts. As of September 30, 2010, the remaining property, plant, and equipment were classified as assets of discontinued operations on the balance sheet.

During 2007, the Company committed to a plan to dispose of the assets of its bath cabinet manufacturing business. Certain assets of this business have not been disposed of as of September 30, 2010 and the Company continues to incur costs related to those assets.

The results of operations for the Processed Metal Products business and the bath cabinet manufacturing business have been classified as discontinued operations in the consolidated financial statements for all periods presented.

The Company allocates interest to its discontinued operations in accordance with FASB ASC Subtopic 205-20, “Presentation of Financial Statements — Discontinued Operations”.

Components of the loss from discontinued operations, including the interest allocated to discontinued operations, for the three and nine months ended September 30 are as follows (in thousands):

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2010				2009				2010				2009
Net sales		$	—			$	34,632			$	16,575			$	99,389
Operating expenses			(236	)			(38,117	)			(16,189	)			(115,626	)
Loss on sale of business			—				—				(30,875	)			—
Interest expense allocation			—				(813	)			(208	)			(2,174	)
Loss from discontinued operations before taxes		$	(236	)		$	(4,298	)		$	(30,697	)		$	(18,411	)

14. EXIT ACTIVITY COSTS AND ASSET IMPAIRMENTS

The Company has focused on being the low-cost provider of its products by reducing operating costs and implementing lean manufacturing initiatives, which have in part led to the consolidation of its facilities and production lines. The Company consolidated six facilities during 2009 in this effort. During this process, the Company has incurred exit activity costs, including contract termination costs, severance costs, and other moving and closing costs. During 2010, the Company continued to incur exit activity costs for the facilities consolidated in previous years and some other ongoing restructuring activities. Ongoing restructuring activities in 2010 resulted in $774,000 of asset impairment charges for product lines the Company will no longer offer. As of September 30, 2010, the Company expects to incur approximately $300,000 to $400,000 of additional exit activity costs related to contract termination costs and severance costs related to two leased facilities that will be closed during the fourth quarter of 2010. Other than these two facilities, the Company has not identified any other specific facilities to close or consolidate as of September 30, 2010 and, therefore, does not expect to incur any other material exit activity costs for future restructuring activities. However, if future opportunities for cost savings are identified, other facility consolidations and closings will be considered.

The following table provides a summary of where the exit activity costs and asset impairments were recorded in the statement of operations for the three and nine months ended September 30 (in thousands):

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2010				2009				2010				2009
Cost of sales		$	436			$	1,125			$	905			$	1,705
Selling, general, and administrative expense			—				695				159				763
Total exit activity costs and asset impairments		$	436			$	1,820			$	1,064			$	2,468

The following table reconciles the beginning and ending liability for exit activity costs relating to the Company’s facility consolidation efforts (in thousands):

		2010				2009
Accrued costs as of January 1		$	1,813			$	1,121
Exit activity costs recognized			290				2,468
Cash payments			(1,154	)			(1,275	)
Accrued costs as of September 30		$	949			$	2,314

15. INCOME TAXES

The following table summarizes the provision for (benefit of) income taxes for continuing operations for the three and nine months ended September 30 and the applicable effective tax rates (in thousands):

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2010				2009				2010				2009
(Benefit of) provision for income taxes		$	(592	)		$	3,668			$	602			$	(7,298	)
Effective tax rate			(78.9	)%			32.5	%			17.6	%			39.2	%

The Company’s provision for (benefit of) income taxes in interim periods is computed by applying forcasted annual effective tax rates to income or loss before income taxes for the interim period. In addition, non-recurring or discrete items, including interest on prior year tax liabilities, are recorded during the period in which they occur. To the extent that actual income or loss before taxes for the full year differs from the forecast estimates applied at the end of the most recent interim period, the actual tax rate recognized for the year ending December 31, 2010 could be materially different from the forecasted rate used for the nine months ended September 30, 2010.

A change in forecasted earnings caused a significant change in the forecasted annual effective tax rate during the three months ended September 30, 2010. As a result, the Company recognized a tax benefit for continuing operations during the three months ended September 30, 2010 due to the change in the year-to-date provision for income taxes. The provision for income taxes for continuing operations for the nine months ended September 30, 2010 is based on the most recent estimate of the income tax provision forecasted for the full year. Small changes in the Company’s forecasted earnings could have a significant impact on the Company’s effective tax rate for the full year as a result of pre-tax earnings being near break-even, non-deductible permanent items, and certain state taxes.

The provision for income taxes for continuing operations for the three months ended September 30, 2009 resulted in an effective tax rate of 33%. This tax rate was less than the U.S. federal statutory tax rate of 35% due to the impact of non-deductible permanent differences on the then forecasted annual pre-tax loss. The effective tax rate of 39% for the nine months ended September 30, 2009 was higher than the U.S. federal statutory tax rate due to state taxes and the tax benefit of adjustments made to the Company’s reserve for uncertain tax positions.

16. NET INCOME (LOSS) PER SHARE

Basic income (loss) per share is based on the weighted average number of common shares outstanding. Diluted income (loss) per share is based on the weighted average number of common shares outstanding, as well as dilutive potential common shares which, in the Company’s case, comprise shares issuable under its equity compensation plans described in Note 11 of the consolidated financial statements. The treasury stock method is used to calculate dilutive shares, which reduces the gross number of dilutive shares by the number of shares purchasable from the proceeds of the options assumed to be exercised and the unrecognized expense related to the restricted stock and restricted stock unit awards assumed to have vested.

The following table sets forth the computation of basic and diluted earnings per share for the three and nine months ended September 30:

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2010				2009				2010				2009
Numerator:
Income (loss) from continuing operations		$	1,342,000			$	7,618,000			$	2,814,000			$	(11,307,000	)
Loss from discontinued operations			(145,000	)			(2,706,000	)			(19,367,000	)			(11,325,000	)
Income (loss) available to common stockholders		$	1,197,000			$	4,912,000			$	(16,553,000	)		$	(22,632,000	)
Denominator for basic income (loss) per share:
Weighted average shares outstanding			30,325,114				30,157,572				30,294,630				30,125,746
Denominator for diluted income (loss) per share:
Weighted average shares outstanding			30,325,114				30,157,572				30,294,630				30,125,746
Common stock options and restricted stock			116,695				180,726				147,202				—
Weighted average shares and conversions			30,441,809				30,338,298				30,441,832				30,125,746

For the nine months ended September 30, 2009, all stock options, unvested restricted stock, and unvested restricted stock units were anti-dilutive and, therefore, not included in the dilutive loss per share calculation. The number of weighted average stock options, unvested restricted stock, and unvested restricted stock units that were not included in the dilutive loss per share calculation because the effect would have been anti-dilutive was 163,586 shares for the nine months ended September 30, 2009.

17. COMPREHENSIVE INCOME (LOSS)

Total comprehensive income (loss) consists of the following for the three and nine months ended September 30 (in thousands):

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2010				2009				2010				2009
Net income (loss)		$	1,197			$	4,912			$	(16,553	)		$	(22,632	)
Other comprehensive income (loss):
Foreign currency translation adjustment			4,151				2,135				(1,064	)			6,771
Adjustment to post-retirement health care liability, net of tax			(1	)			2				1				17
Adjustment to retirement benefit liability, net of tax			19				—				50				—
Reclassification of unrealized loss on interest rate swaps, net of tax			—				311				1,206				910
Other comprehensive income			4,169				2,448				193				7,698
Total comprehensive income (loss)		$	5,366			$	7,360			$	(16,360	)		$	(14,934	)

The cumulative balance of each component of accumulated other comprehensive loss, net of tax, is as follows (in thousands):

										Unamortized
		Foreign				Minimum				Post-				Unrealized				Accumulated
		Currency				Pension				Retirement				(Loss) Gain				Other
		Translation				Liability				Health Care				on Interest				Comprehensive
		Adjustment				Adjustment				Costs				Rate Swaps				Loss
Balance at December 31, 2009		$	(623	)		$	(19	)		$	(382	)		$	(1,206	)		$	(2,230	)
Current period change			(1,064	)			50				1				1,206				193
Balance at September 30, 2010		$	(1,687	)		$	31			$	(381	)		$	—			$	(2,037	)

18. SEGMENT INFORMATION

FASB ASC Topic 280, “Segment Reporting,” establishes the principles for reporting information about operating segments in financial statements. Previously, the Company reported certain financial information for two reporting segments, Building Products and Processed Metal Products. On February 1, 2010, the Company sold the majority of the assets of the Processed Metal Products segment as discussed in Note 13 of the consolidated financial statements. As a result of this divestiture and consideration of the principles of Topic 280, the Company determined that it now has only one reporting segment for external reporting purposes. Prior period financial information included herein has been reclassified to reflect the financial position and results of operations as one segment.

19. SUPPLEMENTAL FINANCIAL INFORMATION

The following information sets forth the consolidating summary financial statements of the issuer (Gibraltar Industries, Inc.) and guarantors, which guarantee the Senior Subordinated 8% Notes due December 1, 2015, and the non-guarantors. The guarantors are wholly owned subsidiaries of the issuer and the guarantees are full, unconditional, joint and several.

Investments in subsidiaries are accounted for by the parent using the equity method of accounting. The guarantor subsidiaries and non-guarantor subsidiaries are presented on a combined basis. The principal elimination entries eliminate investments in subsidiaries and intercompany balances and transactions.

GIBRALTAR INDUSTRIES, INC.
CONSOLIDATING STATEMENTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 2010
(in thousands)

		Gibraltar				Guarantor				Non-Guarantor
		Industries, Inc.				Subsidiaries				Subsidiaries				Eliminations				Total
Net sales		$	—			$	161,000			$	25,165			$	(4,104	)		$	182,061
Cost of sales			—				133,061				22,208				(4,511	)			150,758
Gross profit			—				27,939				2,957				407				31,303
Selling, general, and administrative expense			(312	)			23,781				2,371				—				25,840
Income from operations			312				4,158				586				407				5,463
Interest expense			(4,343	)			(406	)			3				—				(4,746	)
Equity in partnership’s income and other income			—				24				9				—				33
(Loss) income before taxes			(4,031	)			3,776				598				407				750
(Benefit of) provision for income taxes			(1,702	)			914				196				—				(592	)
(Loss) income from continuing operations			(2,329	)			2,862				402				407				1,342
Discontinued operations:
Loss from discontinued operations before taxes			—				(236	)			—				—				(236	)
Benefit of income taxes			—				(91	)			—				—				(91	)
Loss from discontinued operations			—				(145	)			—				—				(145	)
Equity in earnings from subsidiaries			3,119				402				—				(3,521	)			—
Net income		$	790			$	3,119			$	402			$	(3,114	)		$	1,197

GIBRALTAR INDUSTRIES, INC.
CONSOLIDATING STATEMENTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 2009
(in thousands)

		Gibraltar				Guarantor				Non-Guarantor
		Industries, Inc.				Subsidiaries				Subsidiaries				Eliminations				Total
Net sales		$	—			$	170,168			$	23,605			$	(3,253	)		$	190,520
Cost of sales			—				128,136				20,376				(2,709	)			145,803
Gross profit			—				42,032				3,229				(544	)			44,717
Selling, general, and administrative expense			(137	)			24,310				2,264				—				26,437
Income (loss) from operations			137				17,722				965				(544	)			18,280
Interest (expense) income			(4,335	)			(2,715	)			—				—				(7,050	)
Equity in partnership’s income and other income			—				56				—				—				56
(Loss) income before taxes			(4,198	)			15,063				965				(544	)			11,286
(Benefit of) provision for income taxes			(1,637	)			4,883				422				—				3,668
(Loss) income from continuing operations			(2,561	)			10,180				543				(544	)			7,618
Discontinued operations:
Loss from discontinued operations before taxes			—				(4,298	)			—				—				(4,298	)
Benefit of income taxes			—				(1,592	)			—				—				(1,592	)
Loss from discontinued operations			—				(2,706	)			—				—				(2,706	)
Equity in earnings from subsidiaries			8,017				543				—				(8,560	)			—
Net income		$	5,456			$	8,017			$	543			$	(9,104	)		$	4,912

GIBRALTAR INDUSTRIES, INC.
CONSOLIDATING STATEMENTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 2010
(in thousands)

		Gibraltar				Guarantor				Non-Guarantor
		Industries, Inc.				Subsidiaries				Subsidiaries				Eliminations				Total
Net sales		$	—			$	466,665			$	77,976			$	(13,281	)		$	531,360
Cost of sales			—				377,219				67,123				(12,766	)			431,576
Gross profit			—				89,446				10,853				(515	)			99,784
Selling, general, and administrative expense			201				72,551				7,474				—				80,226
Intangible asset impairment recovery			—				(177	)			—				—				(177	)
(Loss) income from operations			(201	)			17,072				3,379				(515	)			19,735
Interest (expense) income			(13,022	)			(3,471	)			10				—				(16,483	)
Equity in partnership’s income and other income			—				149				15				—				164
(Loss) income before taxes			(13,223	)			13,750				3,404				(515	)			3,416
(Benefit of) provision for income taxes			(5,335	)			4,851				1,086				—				602
(Loss) income from continuing operations			(7,888	)			8,899				2,318				(515	)			2,814
Discontinued operations:
Loss from discontinued operations before taxes			—				(30,697	)			—				—				(30,697	)
Benefit of income taxes			—				(11,330	)			—				—				(11,330	)
Loss from discontinued operations			—				(19,367	)			—				—				(19,367	)
Equity in earnings from subsidiaries			(8,150	)			2,318				—				5,832				—
Net (loss) income		$	(16,038	)		$	(8,150	)		$	2,318			$	5,317			$	(16,553	)