Document

Table of Contents

 
 
 
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 
 
FORM 10-Q
 
 
 
(Mark one)
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2016
OR
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
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
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
 
 
3556 Lake Shore Road, P.O. Box 2028
Buffalo, New York
 
14219-0228
(Address of principal executive offices)
 
(Zip Code)
Registrant’s telephone number, including area code: (716) 826-6500
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  x    No  ¨
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  x    No  ¨
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
 
¨
  
Accelerated filer
 
x
 
 
 
 
Non-accelerated filer
 
¨
  
Smaller reporting company
 
¨
Indicated by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.).    Yes  ¨    No  x
As of July 26, 2016, the number of common shares outstanding was: 31,453,862.



Table of Contents

GIBRALTAR INDUSTRIES, INC.
INDEX
 
 
PAGE NUMBER
PART I.
 
 
Item 1.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
8-30
Item 2.
 
31-40
Item 3.
 
Item 4.
 
PART II.
 
 
Item 1.
 
Item 1A.
 
Item 2.
 
Item 3.
 
Item 4.
 
Item 5.
 
Item 6.
 


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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 
 June 30,
 
Six Months Ended 
 June 30,
 
2016
 
2015
 
2016
 
2015
Net Sales
$
263,099

 
$
253,171

 
$
496,776

 
$
453,786

Cost of sales
196,895

 
209,052

 
380,416

 
379,752

Gross profit
66,204

 
44,119

 
116,360

 
74,034

Selling, general, and administrative expense
40,427

 
32,918

 
76,976

 
53,863

Income from operations
25,777

 
11,201

 
39,384

 
20,171

Interest expense
3,666

 
3,811

 
7,357

 
7,511

Other expense (income)
8,035

 
1,101

 
7,840

 
(2,458
)
Income before taxes
14,076

 
6,289

 
24,187

 
15,118

(Benefit of) provision for income taxes
(2,913
)
 
2,202

 
705

 
5,494

Income from continuing operations
16,989

 
4,087

 
23,482

 
9,624

Discontinued operations:
 
 
 
 
 
 
 
Loss before taxes

 

 

 
(44
)
Benefit of income taxes

 

 

 
(16
)
Loss from discontinued operations

 

 

 
(28
)
Net income
$
16,989

 
$
4,087

 
$
23,482

 
$
9,596

Net earnings per share – Basic:
 
 
 
 
 
 
 
Income from continuing operations
$
0.54

 
$
0.13

 
$
0.75

 
$
0.31

Loss from discontinued operations

 

 

 

Net income
$
0.54

 
$
0.13

 
$
0.75

 
$
0.31

Weighted average shares outstanding – Basic
31,475

 
31,210

 
31,447

 
31,200

Net earnings per share – Diluted:
 
 
 
 
 
 
 
Income from continuing operations
$
0.53

 
$
0.13

 
$
0.74

 
$
0.31

Loss from discontinued operations

 

 

 

Net income
$
0.53

 
$
0.13

 
$
0.74

 
$
0.31

Weighted average shares outstanding – Diluted
32,007

 
31,495

 
31,916

 
31,440

See accompanying notes to consolidated financial statements.

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GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
(unaudited)
 
 
Three Months Ended 
 June 30,
 
Six Months Ended 
 June 30,
 
2016
 
2015
 
2016
 
2015
Net income
$
16,989

 
$
4,087

 
$
23,482

 
$
9,596

Other comprehensive income (loss):
 
 
 
 
 
 
 
Foreign currency translation adjustment
7,753

 
2,138

 
10,831

 
(1,662
)
Reclassification of loss on cash flow hedges, net of tax

 

 

 
143

Adjustment to retirement benefit liability, net of tax
(1
)
 
2

 
(2
)
 
4

Adjustment to post-retirement health care liability, net of tax
38

 
37

 
76

 
74

Other comprehensive income (loss)
7,790

 
2,177

 
10,905

 
(1,441
)
Total comprehensive income
$
24,779

 
$
6,264

 
$
34,387

 
$
8,155

See accompanying notes to consolidated financial statements.

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GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
(unaudited)
 
 
June 30,
2016
 
December 31,
2015
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
124,114

 
$
68,858

Accounts receivable, net
150,170

 
164,969

Inventories
98,221

 
107,058

Other current assets
12,119

 
10,537

Total current assets
384,624

 
351,422

Property, plant, and equipment, net
108,808

 
118,932

Goodwill
294,797

 
292,390

Acquired intangibles
120,435

 
123,013

Other assets
4,336

 
4,015

 
$
913,000

 
$
889,772

Liabilities and Shareholders’ Equity
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
82,805

 
$
89,204

Accrued expenses
49,331

 
67,605

Billings in excess of cost
30,358

 
28,186

Current maturities of long-term debt
400

 
400

Total current liabilities
162,894

 
185,395

Long-term debt
208,836

 
208,882

Deferred income taxes
43,149

 
42,654

Other non-current liabilities
48,542

 
42,755

Shareholders’ equity:
 
 
 
Preferred stock, $0.01 par value; authorized 10,000 shares; none outstanding

 

Common stock, $0.01 par value; authorized 50,000 shares; 31,930 and 31,779 shares issued in 2016 and 2015
319

 
317

Additional paid-in capital
259,024

 
253,458

Retained earnings
201,555

 
178,073

Accumulated other comprehensive loss
(4,511
)
 
(15,416
)
Cost of 502 and 484 common shares held in treasury in 2016 and 2015
(6,808
)
 
(6,346
)
Total shareholders’ equity
449,579

 
410,086

 
$
913,000

 
$
889,772

See accompanying notes to consolidated financial statements.

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Table of Contents

GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)(unaudited) 
 
Six Months Ended 
 June 30,
 
2016
 
2015
Cash Flows from Operating Activities
 
 
 
Net income
$
23,482

 
$
9,596

Loss from discontinued operations

 
(28
)
Income from continuing operations
23,482

 
9,624

Adjustments to reconcile net income to net cash provided by (used in) operating activities:
 
 
 
Depreciation and amortization
11,856

 
13,239

Stock compensation expense
3,218

 
1,406

Net gain on sale of assets
(198
)
 
(8,375
)
Loss on sale of business
8,533

 

Restructuring charges, non-cash
1,074

 
2,745

Provision for (benefit of) deferred income taxes
196

 
(72
)
Other, net
(741
)
 
(1,392
)
Changes in operating assets and liabilities, excluding the effects of acquisitions:
 
 
 
Accounts receivable
9,145

 
(30,164
)
Inventories
4,988

 
1,596

Other current assets and other assets
(4,333
)
 
(1,415
)
Accounts payable
(2,427
)
 
20,254

Accrued expenses and other non-current liabilities
(5,644
)
 
4,312

Net cash provided by operating activities
49,149

 
11,758

Cash Flows from Investing Activities
 
 
 
Cash paid for acquisitions
(2,314
)
 
(134,318
)
Net proceeds from sale of property and equipment
162

 
26,181

Purchases of property, plant, and equipment
(4,035
)
 
(4,624
)
Net proceeds from sale of business
8,479

 

Other, net
1,118

 
1,154

Net cash provided by (used in) investing activities
3,410

 
(111,607
)
Cash Flows from Financing Activities
 
 
 
Proceeds from long-term debt

 
41,392

Long-term debt payments
(400
)
 
(11,792
)
Payment of debt issuance costs
(54
)
 

Purchase of treasury stock at market prices
(462
)
 
(387
)
Net proceeds from issuance of common stock
2,057

 
180

Excess tax benefit from stock compensation
292

 
37

Net cash provided by financing activities
1,433

 
29,430

Effect of exchange rate changes on cash
1,264

 
(769
)
Net increase (decrease) in cash and cash equivalents
55,256

 
(71,188
)
Cash and cash equivalents at beginning of year
68,858

 
110,610

Cash and cash equivalents at end of period
$
124,114

 
$
39,422

See accompanying notes to consolidated financial statements.

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GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY
(in thousands)
(unaudited)
 
 
Common Stock
 
Additional
Paid-In Capital
 
Retained Earnings
 
Accumulated
Other
Comprehensive Loss
 
Treasury Stock
 
Total
Shareholders’ Equity
 
Shares
 
Amount
 
 
 
 
Shares
 
Amount
 
Balance at December 31, 2015
31,779

 
$
317

 
$
253,458

 
$
178,073

 
$
(15,416
)
 
484

 
$
(6,346
)
 
$
410,086

Net income

 

 

 
23,482

 

 

 

 
23,482

Foreign currency translation adjustment

 

 

 

 
10,831

 

 

 
10,831

Adjustment to retirement benefit liability, net of taxes of $1

 

 

 

 
(2
)
 

 

 
(2
)
Adjustment to post employment health care benefit liability, net of taxes of $47

 

 

 

 
76

 

 

 
76

Stock compensation expense

 

 
3,218

 

 

 

 

 
3,218

Excess tax benefit from stock compensation

 

 
292

 

 

 

 

 
292

Stock options exercised
104

 
1

 
2,057

 

 

 

 

 
2,058

Issuance of restricted stock

 

 

 

 

 

 

 

Net settlement of restricted stock units
47

 
1

 
(1
)
 

 

 
18

 
(462
)
 
(462
)
Balance at June 30, 2016
31,930

 
$
319

 
$
259,024

 
$
201,555

 
$
(4,511
)
 
502

 
$
(6,808
)
 
$
449,579

See accompanying notes to consolidated financial statements.

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GIBRALTAR INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1. CONSOLIDATED FINANCIAL STATEMENTS
The accompanying unaudited consolidated financial statements have been prepared by management in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, all adjustments consisting of normal recurring adjustments considered necessary for the fair presentation of results for the interim period have been included. The results of operations for the three and six month periods ended June 30, 2016 are not necessarily indicative of the results expected for the full year. The Company is subject to reduced activity in the first and fourth quarters as colder, inclement weather reduces order rates from end markets it serves. The accompanying unaudited consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in our annual Form 10-K for the year ended December 31, 2015.

2. RECENT ACCOUNTING PRONOUNCEMENTS
In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, "Revenue from Contracts with Customers (Topic 606)." The update clarifies the principles for recognizing revenue and develops a common standard for U.S. Generally Accepted Accounting Principles and International Financial Reporting Standards. More specifically, the core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued ASU 2015-14 which deferred the effective date of Topic 606 to annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. In March 2016, the FASB issued ASU 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net).” ASU 2016-08 clarifies the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing.” ASU 2016-10 clarifies the implementation guidance on identifying performance obligations. In May 2016, the FASB issued ASU 2016-12, "Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients." ASU 2016-12 reduces the potential for diversity among initial application, as well as, the cost and complexity of applying Topic 606 at transition and on an ongoing basis. These ASUs apply to all companies that enter into contracts with customers to transfer goods or services. These ASUs are effective for public entities for interim and annual reporting periods beginning after December 15, 2017. Early adoption is permitted, but not before interim and annual reporting periods beginning after December 15, 2016. Entities have the choice to apply these ASUs either retrospectively to each reporting period presented or by recognizing the cumulative effect of applying these standards at the date of initial application and not adjusting comparative information. We are currently evaluating the requirements of these standards and have not yet determined the impact on our consolidated financial statements.
In July 2015, the FASB issued ASU 2015-11, "Inventory (Topic 330)." The amendments to this Update were issued to change the measurement of inventory to the lower of cost and net realizable value. The guidance, which is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years, may be applied prospectively and early adopted for the beginning of an interim or annual period. The Company is currently evaluating the impact of adopting the new standard which is not expected to have a material impact on our Balance Sheet or Statements of Operations.
In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)." ASU 2016-02 requires lessees to recognize a lease liability and a right-of-use asset on the balance sheet. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the requirements of ASU 2016-02 and have not yet determined its impact on our consolidated financial statements.
In March 2016, the FASB issued ASU 2016-09, "Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting." ASU 2016-09 simplifies the accounting for share-based payment award transactions including: income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the requirements of ASU 2016-09 and have not yet determined its impact on our consolidated financial statements.
In May 2016, the FASB issued ASU 2016-11, "Revenue Recognition (Topic 605) and Derivatives and Hedging (Topic 815): Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting.”  ASU 2016-11 rescinds certain SEC Staff Observer comments codified in Topic 605, Revenue Recognition, and Topic 932, Extractive Activities-Oil and Gas.  ASU 2016-11 is effective upon adoption of Topic 606.  We are currently evaluating the requirements of ASU 2016-11 and have not yet determined its impact on our consolidated financial statements.


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3. ACCOUNTS RECEIVABLE
Accounts receivable consists of the following (in thousands):
 
June 30, 2016
 
December 31, 2015
Trade accounts receivable
$
105,485

 
$
102,277

Contract receivables:
 
 
 
Amounts billed
39,941

 
53,830

Costs in excess of billings
9,816

 
13,730

Total contract receivables
49,757

 
67,560

Total accounts receivable
155,242

 
169,837

Less allowance for doubtful accounts
(5,072
)
 
(4,868
)
Accounts receivable
$
150,170

 
$
164,969

Contract receivables are primarily associated with developers, contractors and customers in connection with the Renewable Energy and Conservation segment. Costs in excess of billings principally represent revenues recognized on contracts that were not billable as of the balance sheet date. These amounts will be billed in accordance with contract terms, generally as certain milestones are reached or upon shipment. All of the costs in excess of billings are expected to be collected within one year. In situations where billings exceed revenues recognized, the excess is included in billings in excess of cost in the Consolidated Balance Sheet.

4. INVENTORIES
Inventories consist of the following (in thousands):
 
June 30, 2016
 
December 31, 2015
Raw material
$
41,725

 
$
47,117

Work-in-process
13,780

 
16,238

Finished goods
42,716

 
43,703

Total inventories
$
98,221

 
$
107,058


5. ACQUISITIONS
On June 9, 2015, the Company acquired all of the outstanding stock of Rough Brothers Manufacturing, Inc., RBI Solar, Inc., and affiliates, collectively known as "RBI". RBI has established itself during the past six years among North America's fastest-growing providers of racking and mounting systems for solar energy installations and is among the largest commercial greenhouse manufacturers in North America.
RBI is a full service provider that engineers, manufactures and installs racking systems for solar power developers, contractors and companies. In addition, RBI designs, manufactures and erects greenhouses for commercial, institutional and retail customers. The results of RBI have been included in the Company’s consolidated financial results since the date of acquisition (within the Company's Renewable Energy and Conservation segment). The final aggregate purchase consideration for the acquisition of RBI was $147,585,000, which includes payments for working capital and certain other adjustments provided for in the stock purchase agreement.
The purchase price for the acquisition was allocated to the assets acquired and liabilities assumed based upon their respective fair values. The excess consideration of $57,180,000, was recorded as goodwill of which $37,969,000 is deductible for tax purposes.
The allocation of the purchase consideration to the fair value of the assets acquired and liabilities assumed is as follows as of the date of the acquisition (in thousands):

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Cash
$
4,651

Working capital
21,436

Property, plant, and equipment
12,797

Acquired intangible assets
56,392

Other assets
3,049

Deferred income taxes
(4,892
)
Other liabilities
(3,028
)
Goodwill
57,180

Fair value of purchase consideration
$
147,585

The Company recorded an indemnification asset and liability of $3.0 million on the opening balance sheet related to the seller’s obligation to fully indemnify the Company for the outcome of potential contingent liabilities related to uncertainty of income tax positions in foreign jurisdictions.  The liability and related indemnification asset may or may not be realized, and any unrealized liability is scheduled to expire in 2018.
The intangible assets acquired in this acquisition consisted of the following (in thousands):
 
Fair Value
 
Estimated
Useful Life
Trademarks
$
13,550

 
Indefinite
Technology
3,550

 
7-15 years
Customer relationships
32,892

 
11-17 years
Non-compete agreements
1,300

 
5 years
Backlog
5,100

 
0.5 years
Total
$
56,392

 
 
The acquisition was financed through cash on hand and borrowings under the Company's revolving credit facility. The Company incurred $1,795,000 of acquisition-related costs for both the three and six months ended June 30, 2015 composed of legal and consulting fees, and these costs were recognized as a component of selling, general and administrative expenses in the consolidated statement of operations. The Company also recognized $58,000 of acquisition-related costs during the same time period for amortization relating to the step-up of inventory to fair value which was a portion of the purchase price allocation of this acquisition.
The following unaudited pro forma financial information presents the combined results of continuing operations as if the acquisition of RBI had occurred as of January 1, 2015. The pro forma information includes certain adjustments, including depreciation and amortization expense, interest expense and certain other adjustments, together with related income tax effects. The pro forma amounts may not be indicative of the results that actually would have been achieved had the acquisition occurred as of January 1, 2015 and are not necessarily indicative of future results of the combined companies (in thousands, except per share data):
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2015
 
2015
Net sales
$
300,005

 
$
540,543

Net income
$
10,028

 
$
18,059

Net income per share - Basic
$
0.32

 
$
0.58

Net income per share - Diluted
$
0.32

 
$
0.57



6. GOODWILL AND RELATED INTANGIBLE ASSETS
Goodwill
The changes in the carrying amount of goodwill for the six months ended June 30, 2016 are as follows (in thousands):

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Residential
Products
 
Industrial and
Infrastructure
Products
 
Renewable Energy & Conservation
 
Total
Balance at December 31, 2015
$
181,285

 
$
53,704

 
$
57,401

 
$
292,390

Foreign currency translation

 
368

 
2,039

 
2,407

Balance at June 30, 2016
$
181,285

 
$
54,072

 
$
59,440

 
$
294,797

The goodwill balances as of June 30, 2016 and December 31, 2015 are net of accumulated impairment losses of $234,490,000.
Acquired Intangible Assets
Acquired intangible assets consist of the following (in thousands):
 
June 30, 2016
 
December 31, 2015
 
 
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Estimated Life
Indefinite-lived intangible assets:
 
 
 
 
 
 
 
 
 
Trademarks
$
50,805

 
$

 
$
50,538

 
$

 
Indefinite
Finite-lived intangible assets:
 
 
 
 
 
 
 
 
 
Trademarks
5,840

 
2,126

 
5,861

 
1,884

 
5 to 15 Years
Unpatented technology
25,661

 
9,126

 
28,072

 
10,656

 
5 to 20 Years
Customer relationships
79,074

 
30,874

 
85,419

 
35,673

 
5 to 17 Years
Non-compete agreements
1,649

 
468

 
3,107

 
1,771

 
4 to 10 Years
Backlog

 

 
6,480

 
6,480

 
0.5 to 2 Years
 
112,224

 
42,594

 
128,939

 
56,464

 
 
Total acquired intangible assets
$
163,029

 
$
42,594

 
$
179,477

 
$
56,464

 
 
The following table summarizes the acquired intangible asset amortization expense for the three and six months ended June 30 (in thousands):
 
Three Months Ended 
 June 30,
 
Six Months Ended 
 June 30,
 
2016
 
2015
 
2016
 
2015
Amortization expense
$
2,201

 
$
2,585

 
$
4,382

 
$
4,011

Amortization expense related to acquired intangible assets for the remainder of fiscal 2016 and the next five years thereafter is estimated as follows (in thousands):
2016
$4,303
2017
$8,347
2018
$7,791
2019
$7,107
2020
$6,594
2021
$5,992

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7. LONG-TERM DEBT
Long-term debt consists of the following (in thousands):
 
June 30, 2016
 
December 31, 2015
Senior Subordinated 6.25% Notes
$
210,000

 
$
210,000

Other debt
2,800

 
3,200

Less unamortized debt issuance costs
(3,564
)
 
(3,918
)
Total debt
209,236

 
209,282

Less current maturities
400

 
400

Total long-term debt
$
208,836

 
$
208,882

The Company's Fifth Amended and Restated Credit Agreement dated December 9, 2015 (the Senior Credit Agreement) provides for a revolving credit facility. The Senior Credit Agreement was amended and restated to convert it into a secured cash flow revolver. The terms of the Senior Credit Agreement provide that the revolving credit facility will terminate on December 9, 2020.
The Senior Credit Agreement provides for a revolving credit facility and letters of credit in an aggregate amount of $300 million and is secured by trade receivables, inventory, personal property, equipment, and certain real property of the Company’s significant domestic subsidiaries.
Interest rates on the revolving credit facility are based on the LIBOR plus an applicable margin.
Standby letters of credit of $19,764,000 have been issued under the Senior Credit Agreement on behalf of the Company as of June 30, 2016. These letters of credit reduce the amount otherwise available under the revolving credit facility. As of June 30, 2016, the Company had $280,236,000 of availability under the revolving credit facility. No borrowings were outstanding under the revolving credit facility at June 30, 2016 and December 31, 2015.
On January 31, 2013, the Company issued $210 million of 6.25% Senior Subordinated Notes (6.25% Notes) due February 1, 2021.The proceeds were used to purchase and discharge the Company's obligations under the then outstanding $204 million of 8% Senior Subordinated Notes during the first quarter of 2013.

8. RELATED PARTY TRANSACTIONS
An officer of one of the Company's operating segments is the owner of certain real estate properties leased for manufacturing and distribution purposes by that operating segment. The leases are in effect until June 2018 and June 2020. For the three and six months ended June 30, 2016, the Company incurred $235,000 and $452,000, respectively, of lease expense for these properties. All amounts incurred during 2016 were expensed as a component of cost of sales.

9. ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME
The cumulative balance of each component of accumulated other comprehensive loss, net of tax, is as follows (in thousands):
 
Foreign Currency Translation Adjustment
 
Minimum Pension
Liability
Adjustment
 
Unamortized Post Retirement Health
Care Costs
 
Total Pre-Tax Amount
 
Tax (Benefit) Expense
 
Accumulated  Other
Comprehensive
(Loss) Income
Balance at December 31, 2015
$
(12,793
)
 
$
118

 
$
(4,251
)
 
$
(16,926
)
 
$
(1,510
)
 
$
(15,416
)
Minimum pension and post retirement health care plan adjustments

 
(3
)
 
123

 
120

 
46

 
74

Foreign currency translation adjustment
10,831

 

 

 
10,831

 

 
10,831

Balance at June 30, 2016
$
(1,962
)
 
$
115

 
$
(4,128
)

$
(5,975
)

$
(1,464
)
 
$
(4,511
)
The realized adjustments relating to the Company’s minimum pension liability and post retirement health care costs were reclassified from Accumulated Other Comprehensive Loss and included in Selling, General and Administrative Expenses in the Consolidated Statement of Operations. The realized adjustments relating to the Company's foreign currency translation adjustment were reclassified from Accumulated Other Comprehensive Loss and included in Other Expense in the Consolidated Statement of Operations.

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10. EQUITY-BASED COMPENSATION
On May 6, 2016, the shareholders of the Company authorized the Gibraltar Industries, Inc. 2016 Stock Plan for Non-Employee Directors ("Non-Employee Directors Plan"). The Non-Employee Directors Plan is a compensation plan that allows the Company to grant awards of shares of the Company's common stock to non-employee Directors of the Company. In connection with the Non-Employee Directors Plan, the Company adopted a new stock deferral plan, Gibraltar Industries, Inc. Non-Employee Director Stock Deferral Plan ("Deferral Plan"). The Deferral Plan permits non-employee Directors of the Company to defer receipt of shares of common stock which the non-employee Director is entitled to receive pursuant to the terms of the Non-Employee Directors Plan.
On May 7, 2015, the shareholders of the Company authorized the Gibraltar Industries, Inc. 2015 Equity Incentive Plan (the "Plan") and simultaneously amended the 2005 Equity Incentive Plan (the "Prior Plan") to terminate issuance of further awards from the Prior Plan. The Plan is an incentive compensation plan that allows the Company to grant equity-based incentive compensation awards to eligible participants. Awards under the Plan may be in the form of options, restricted shares, restricted units, performance shares, performance stock units, and rights.
Equity Based Awards - Settled in Stock
The following table provides the number of stock unit awards granted which will convert to shares upon vesting as well as restricted shares issued during the six months ended June 30, along with the weighted average grant date fair value:
 
2016
 
2015
Awards
Number of
Awards
 
Weighted
Average
Grant Date
Fair Value
 
Number of
Awards
 
Weighted
Average
Grant Date
Fair Value
Deferred stock units
11,945

 
$
29.30

 

 
$

Restricted shares
3,185

 
$
29.30

 
17,616

 
$
17.71

Restricted stock units
109,210

 
$
21.44

 
101,788

 
$
15.95

Performance stock units

 
$

 
321,714

 
$
18.46

Performance Stock Units - Settled in Cash
The Company has also awarded performance stock units ("PSUs") that will convert to cash after three years based upon the one year performance period. The cost of these awards is recognized over the requisite vesting period. The PSUs earned over the performance period are determined based on the Company’s actual return on invested capital (ROIC) relative to the ROIC targeted for the performance period.
The following table provides the number of PSUs which will convert to cash:
 
2016
 
2015
Awards
Number of
Units (1)
 

Grant Date
Fair Value (in $1000s)
 
Number of
Units (2)
 

Grant Date
Fair Value (in $1000s)
Performance stock units
128,000

 
$
3,100

 
219,000

 
$
4,039

(1)
The final number of PSUs earned will be determined based upon actual performance at the end of 2016, with any amounts due to participants payable in January 2019.
(2)
The participants earned 200% of target, aggregating 438,000 PSUs earned. This award will convert to cash and be payable in January 2018.
During the 2013 performance period, the participants earned an aggregate of 114,000 PSUs, representing 50% of the targeted award of 237,000 units. In January 2016, $2,723,000 was paid to the participants for the 2013 PSUs based on the trailing 90-day closing price of the Company's common stock ended December 31, 2015.
No PSU awards were earned during the 2014 performance period.

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The following table summarizes the compensation expense recognized for the PSUs which will convert to cash for the three and six months ended June 30, (in thousands):
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2016
 
2015
 
2016
 
2015
Performance stock unit compensation expense
$
2,916

 
$
1,532

 
$
3,741

 
$
2,113

Management Stock Purchase Plan
The Management Stock Purchase Plan ("MSPP") provides participants the ability to defer a portion of their compensation or Directors’ fees, which deferral is converted to restricted stock units, and credited to an account. Under the MSPP, the Company provides a matching award in restricted stock units equal to a percentage of the employees' compensation or Directors' 2015 fee deferral amount. Beginning January 1, 2016, Directors do not receive any company-matching on deferred fees. The account represents a share-based liability converted to and settled in cash which is payable to participants upon retirement or a termination of their service to the Company.
The following table provides the number of restricted stock units credited to participant accounts and the payments made with respect to restricted stock units issued under the MSPP during the six months ended June 30,
 
2016
 
2015
Restricted stock units credited
185,685

 
80,630

Share-based liabilities paid (in $1000s)
$
1,984

 
$
1,475


11. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
The Company is exposed to certain risks arising from both its business operations and economic conditions. The primary risks that the Company manages through its derivative instruments from time to time are foreign currency exchange rate risk and commodity pricing risk. As of June 30, 2016, we do not currently hold any derivatives instruments. All derivatives outstanding at December 31, 2015 were not designated as hedging instruments and matured during the six months ended June 30, 2016.
Derivatives not designated as hedging instruments
Commodity options, foreign exchange forwards and forward exchange options are recorded in the consolidated balance sheet at fair value and the resulting gains or losses are recorded to other income in the consolidated statement of operations. The (gains) losses recognized for the three and six months ended June 30, are as follows (in thousands):
 
Three Months Ended 
 June 30,
 
Six Months Ended 
 June 30,
Derivatives not designated as hedging instruments
2016
 
2015
 
2016
 
2015
Commodity options
$

 
$
(74
)
 
$

 
$
355

Foreign exchange forwards
(85
)
 
94

 
(14
)
 
94

Foreign exchange options

 
1,352

 

 
(2,817
)
Total non-designated derivative realized (gain) loss, net
$
(85
)
 
$
1,372

 
$
(14
)
 
$
(2,368
)
Summary of Derivatives
Derivatives consist of the following (in thousands):
 
 
 
 
June 30, 2016
 
December 31, 2015
Derivatives not designated as hedging instruments
 
Classification
 
Fair Value
 
Fair Value
Foreign exchange options
 
Other current assets
 
$

 
$
1,792

Foreign exchange forwards
 
Accrued expenses
 
$

 
$
14


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12. FAIR VALUE MEASUREMENTS
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Depending on the nature of the asset or liability, various techniques and assumptions can be used to estimate 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 as follows:
Level 1 - Quoted prices in active markets for identical assets or liabilities.
Level 2 - Observable inputs other than quoted prices in active markets for similar assets and liabilities.
Level 3 - Inputs that are unobservable inputs for the asset or liability.
The Company's derivatives are valued using various pricing models or discounted cash flow analyses that incorporate observable market data, such as interest rate yield curves, currency rates and implied volatility. In addition, the Company received fair value estimates from contract counterparties to verify the reasonableness of the Company's estimates. These derivatives are classified as Level 2 within the valuation hierarchy.
The following table presents the fair values and classification of our financial assets (liabilities) measured on a recurring basis, all of which are classified as Level 2 (in thousands):
 
Classification
 
June 30, 2016
 
December 31, 2015
Foreign currency exchange options
Other current assets
 
$

 
$
1,792

Foreign currency exchange forwards
Other current liabilities
 
$

 
$
14

The Company’s only other financial instrument for which the carrying value differs from its fair value is long-term debt. At June 30, 2016 and December 31, 2015, the fair value of outstanding debt net of unamortized debt issuance costs was $211,336,000 and $214,007,000, respectively, compared to its carrying value of $209,236,000 and $209,282,000, respectively.  The fair value of the Company’s Senior Subordinated 6.25% Notes is classified as Level 2 within the fair value hierarchy and was estimated based on quoted market prices adjusted for unamortized debt issuance costs. 

13. DIVESTITURE
In connection with the Company's strategy to drive transformational change in its portfolio and financial results, management continually evaluates all aspects of our current portfolio for future profitable growth and greater shareholder returns. As a result of this strategy, the Company sold its European industrial manufacturing business to a third party for cash of $9.3 million ($8.5 million proceeds, net of transaction costs of $0.8 million) on April 15, 2016. The sale of this business resulted in a loss before taxes of $8.5 million which is presented within other expense (income) in the consolidated Statement of Operations. As noted in the Income Taxes footnote, the Company recorded a discrete tax benefit of $11.4 million related to the sale, resulting in an after tax gain on sale of $2.9 million. This divestiture does not meet the criteria to be reported as a discontinued operation as it does not represent a strategic shift that has or will have a major effect on the Company's operations. Therefore, prior period results of continuing operations have not been restated to exclude the impact of the divested business's financial results. This business, which supplied expanded metal product for filtration, security perimeters and other applications, contributed $36 million in revenue to the Company's Industrial & Infrastructure Products segment for full year 2015 and had nearly break-even operating results.


14. EXIT ACTIVITY COSTS AND ASSET IMPAIRMENTS
The Company’s business strategy has been formulated to effect a transformation of its operations and improve financial results over a five year period.  In 2015, the first year of this planned transformation, an 80/20 simplification initiative commenced across many of our business units.  This on-going initiative, in part, focuses the Company’s internal resources on further increasing the value provided to our customers.  
A result of this initiative was the identification of low-volume, internally-produced products which have been or will be outsourced or discontinued. During the six months ended June 30, 2016, charges resulted from this identification which relate to the write-down of inventory and impairment of machinery and equipment associated with either discontinued product lines or the reduction of manufactured goods offered within a product line. These assets were written down to their sale or scrap value, and were subsequently sold or disposed of. Exit activity costs were also incurred during the six months ended June 30, 2016 which relate to contract termination costs, severance costs, and other moving and closing costs. These costs were the result of the closing and consolidation of facilities, relocation of inventory and equipment at those facilities and the reduction of workforce associated with the discontinued products and closed facilities.

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During the six months ended June 30, 2015, the Company closed two facilities and eliminated three product lines which resulted in asset impairment charges. In addition, the Company sold and leased back a facility, which resulted in a gain.
The following tables set forth the asset impairment charges, exit activity costs and gain on facilities sold in conjunction with these efforts, incurred by segment during the three and six months ended June 30, related to the restructuring activities described above (in thousands):
 
Three Months Ended 
 June 30,
 
2016
 
2015
 
Inventory write-downs &/or asset impairment charges
 
Exit activity costs
 
Total
 
Inventory write-downs &/or asset impairment charges
 
Exit activity costs
 
Total
Residential Products
$
118

 
$
140

 
$
258

 
$
2,637

 
$
614

 
$
3,251

Industrial & Infrastructure Products
46

 
805

 
851

 

 
41

 
41

Total exit activity costs & asset impairments
$
164

 
$
945

 
$
1,109

 
$
2,637

 
$
655

 
$
3,292


 
Six Months Ended 
 June 30,
 
2016
 
2015
 
Inventory write-downs &/or asset impairment charges
 
Exit activity costs
 
Total
 
Inventory write-downs &/or asset impairment charges
 
Exit activity costs
 
Gain on sale leaseback
 
Total
Residential Products
$
806

 
$
470

 
$
1,276

 
$
2,745

 
$
725

 
$
(6,799
)
 
$
(3,329
)
Industrial & Infrastructure Products
268

 
1,263

 
1,531

 

 
41

 

 
41

Total exit activity costs & asset impairments
$
1,074

 
$
1,733

 
$
2,807

 
$
2,745

 
$
766

 
$
(6,799
)
 
$
(3,288
)

The following table provides a summary of where the asset impairments and exit activity costs (gains) were recorded in the statement of operations for the three and six months ended June 30, (in thousands):
 
Three Months Ended 
 June 30,
 
Six Months Ended 
 June 30,
 
2016
 
2015
 
2016
 
2015
Cost of sales
$
560

 
$
3,173

 
$
1,678

 
$
3,361

Selling, general, and administrative expense
549

 
119

 
1,129

 
(6,649
)
Net asset impairment and exit activity charges (gains)
$
1,109

 
$
3,292

 
$
2,807

 
$
(3,288
)

The following table reconciles the beginning and ending liability for exit activity costs relating to the Company’s facility consolidation efforts (in thousands):
 
2016
 
2015
Balance at January 1
$
603

 
$
575

Exit activity costs recognized
1,733

 
766

Cash payments
(1,527
)
 
(641
)
Balance at June 30
$
809

 
$
700


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15. INCOME TAXES
The following table summarizes the provision for income taxes for continuing operations for the three and six months ended June 30, and the applicable effective tax rates (in thousands):
 
Three Months Ended 
 June 30,
 
Six Months Ended 
 June 30,
 
2016
 
2015
 
2016
 
2015
Provision for income taxes
$
(2,913
)
 
$
2,202

 
$
705

 
$
5,494

Effective tax rate
(20.7
)%
 
35.0
%
 
2.9
%
 
36.3
%
The effective tax rate for the three and six months ended June 30, 2016 was less than the U.S. federal statutory rate of 35% due to deductible permanent differences and favorable discrete items partially offset by state taxes. The effective tax rate for the three and six months ended June 30, 2015 equaled or exceeded the U.S. federal statutory rate of 35% due to state taxes partially offset by deductible permanent differences and favorable discrete items.
The Company recorded a discrete tax benefit of $11.4 million during the three months ended June 30, 2016 due to the effect of a worthless stock deduction and an associated bad debt deduction of inter-company debt resulting from the sale of its European industrial manufacturing business to a third party.

16. EARNINGS PER SHARE
Basic earnings and diluted weighted-average shares outstanding are as follows for the three and six months ended June 30, (in thousands):
 
Three Months Ended 
 June 30,
 
Six Months Ended 
 June 30,
 
2016
 
2015
 
2016
 
2015
Numerator:
 
 
 
 
 
 
 
Income from continuing operations
$
16,989

 
$
4,087

 
$
23,482

 
$
9,624

Loss from discontinued operations

 

 

 
(28
)
Net income available to common shareholders
$
16,989

 
$
4,087

 
$
23,482

 
$
9,596

Denominator for basic earnings per share:
 
 
 
 
 
 
 
Weighted average shares outstanding
31,475

 
31,210

 
31,447

 
31,200

Denominator for diluted earnings per share:
 
 
 
 
 
 
 
Weighted average shares outstanding
31,475

 
31,210

 
31,447

 
31,200

Common stock options and restricted stock
532

 
285

 
469

 
240

Weighted average shares and conversions
$
32,007

 
$
31,495

 
$
31,916

 
$
31,440

The weighted average number of diluted shares does not include potential anti-dilutive common shares aggregating 764,000 and 489,000 for the three months ended June 30, 2016 and 2015, respectively, and 724,000 and 471,000 for the six months ended June 30, 2016 and 2015, respectively.

17. SEGMENT INFORMATION
The Company is organized into three reportable segments on the basis of the production process and products and services provided by each segment, identified as follows:
(i)
Residential Products, which primarily includes roof and foundation ventilation products, mail and package storage products, rain dispersion products and roofing accessories;
(ii)
Industrial and Infrastructure Products, which primarily includes fabricated bar grating, expanded and perforated metal, plus bridge-related expansion joints and structural bearings; and
(iii)
Renewable Energy and Conservation, which primarily includes designing, engineering, manufacturing and installation of solar racking systems and commercial-scale greenhouse structures.
When determining the reportable segments, the Company aggregated operating segments based on their similar economic and operating characteristics.

17


Table of Contents

The following table sets forth the reconciliation of sales to earnings before income taxes by segment for the three and six months ended June 30, (in thousands):
 
Three Months Ended 
 June 30,
 
Six Months Ended 
 June 30,
 
2016
 
2015
 
2016
 
2015
Net sales:
 
 
 
 
 
 
 
Residential Products
$
119,965

 
$
134,669

 
$
220,112

 
$
241,464

Industrial and Infrastructure Products
81,380

 
101,900

 
161,397

 
196,185

Less: Intersegment sales
(373
)
 
(482
)
 
(740
)
 
(947
)
 
81,007

 
101,418

 
160,657

 
195,238

Renewable Energy and Conservation
62,127

 
17,084

 
116,007

 
17,084

Total consolidated net sales
$
263,099

 
$
253,171

 
$
496,776

 
$
453,786

 
 
 
 
 
 
 
 
Income (loss) from operations:
 
 
 
 
 
 
 
Residential Products
$
20,725

 
$
11,910

 
$
32,956

 
$
24,043

Industrial and Infrastructure Products
6,190

 
5,356

 
9,516

 
7,362

Renewable Energy and Conservation
7,657

 
999

 
11,970

 
999

Unallocated Corporate Expenses
(8,795
)
 
(7,064
)
 
(15,058
)
 
(12,233
)
Total income from operations
$
25,777

 
$
11,201

 
$
39,384

 
$
20,171



18. 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 6.25% Notes due February 1, 2021, and the non-guarantors. The guarantors are significant domestic 100% 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.

























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Table of Contents

GIBRALTAR INDUSTRIES, INC.
CONSOLIDATING STATEMENTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 2016
(in thousands)
 
 
Gibraltar
Industries, Inc.
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Eliminations
 
Total
Net sales
$

 
$
245,273

 
$
19,922

 
$
(2,096
)
 
$
263,099

Cost of sales

 
183,557

 
15,075

 
(1,737
)
 
196,895

Gross profit

 
61,716

 
4,847

 
(359
)
 
66,204

Selling, general, and administrative expense
14,134

 
29,367

 
(3,074
)
 

 
40,427

(Loss) income from operations
(14,134
)
 
32,349

 
7,921

 
(359
)
 
25,777

Interest expense (income)
3,401

 
285

 
(20
)
 

 
3,666

Other expense (income)
8,533

 
65

 
(563
)
 

 
8,035

(Loss) income before taxes
(26,068
)
 
31,999

 
8,504

 
(359
)
 
14,076

(Benefit of) provision for income taxes
(8,275
)
 
4,277

 
1,085

 

 
(2,913
)
(Loss) income from continuing operations
(17,793
)
 
27,722

 
7,419

 
(359
)
 
16,989

Equity in earnings from subsidiaries
35,141

 
7,419

 

 
(42,560
)
 

Net income
$
17,348

 
$
35,141

 
$
7,419

 
$
(42,919
)
 
$
16,989




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GIBRALTAR INDUSTRIES, INC.
CONSOLIDATING STATEMENTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 2015
(in thousands)
 
 
Gibraltar
Industries, Inc.
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Eliminations
 
Total
Net sales
$

 
$
235,468

 
$
22,419

 
$
(4,716
)
 
$
253,171

Cost of sales

 
193,554

 
19,863

 
(4,365
)
 
209,052

Gross profit

 
41,914

 
2,556

 
(351
)
 
44,119

Selling, general, and administrative expense
31

 
30,322

 
2,565

 

 
32,918

(Loss) income from operations
(31
)
 
11,592

 
(9
)
 
(351
)
 
11,201

Interest expense (income)
3,402

 
433

 
(24
)
 

 
3,811

Other (income) expense
(19
)
 
1,058

 
62

 

 
1,101

(Loss) income before taxes
(3,414
)
 
10,101

 
(47
)
 
(351
)
 
6,289

(Benefit of) provision for income taxes
(1,197
)
 
3,174

 
225

 

 
2,202

(Loss) income from continuing operations
(2,217
)
 
6,927

 
(272
)
 
(351
)
 
4,087

Equity in earnings from subsidiaries
6,655

 
(272
)
 

 
(6,383
)
 

Net income (loss)
$
4,438

 
$
6,655

 
$
(272
)
 
$
(6,734
)
 
$
4,087




































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GIBRALTAR INDUSTRIES, INC.
CONSOLIDATING STATEMENTS OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2016
(in thousands)
 
 
Gibraltar
Industries, Inc.
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Eliminations
 
Total
Net sales
$

 
$
456,492

 
$
47,215

 
$
(6,931
)
 
$
496,776

Cost of sales

 
348,996

 
37,715

 
(6,295
)
 
380,416

Gross profit

 
107,496

 
9,500

 
(636
)
 
116,360

Selling, general, and administrative expense
14,174

 
61,437

 
1,365

 

 
76,976

(Loss) income from operations
(14,174
)
 
46,059

 
8,135

 
(636
)
 
39,384

Interest expense (income)
6,804

 
595

 
(42
)
 

 
7,357

Other expense (income)
8,487

 
121

 
(768
)
 

 
7,840

(Loss) income before taxes
(29,465
)
 
45,343

 
8,945

 
(636
)
 
24,187

(Benefit of) provision for income taxes
(9,482
)
 
8,911

 
1,276

 

 
705

(Loss) income from continuing operations
(19,983
)
 
36,432

 
7,669

 
(636
)
 
23,482

Equity in earnings from subsidiaries
44,101

 
7,669

 

 
(51,770
)
 

Net income
$
24,118

 
$
44,101

 
$
7,669

 
$
(52,406
)
 
$
23,482




































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GIBRALTAR INDUSTRIES, INC.
CONSOLIDATING STATEMENTS OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2015
(in thousands)
 
 
Gibraltar
Industries, Inc.
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Eliminations
 
Total
Net sales
$

 
$
419,818

 
$
42,167

 
$
(8,199
)
 
$
453,786

Cost of sales

 
350,418

 
37,079

 
(7,745
)
 
379,752

Gross profit

 
69,400

 
5,088

 
(454
)
 
74,034

Selling, general, and administrative expense
71

 
49,684

 
4,108

 

 
53,863

(Loss) income from operations
(71
)
 
19,716

 
980

 
(454
)
 
20,171

Interest expense (income)
6,804

 
760

 
(53
)
 

 
7,511

Other (income) expense
(12
)
 
(2,465
)
 
19

 

 
(2,458
)
(Loss) income before taxes
(6,863
)
 
21,421

 
1,014

 
(454
)
 
15,118

(Benefit of) provision for income taxes
(2,407
)
 
7,435

 
466

 

 
5,494

(Loss) income from continuing operations
(4,456
)
 
13,986

 
548

 
(454
)
 
9,624

Discontinued operations:
 
 
 
 
 
 
 
 
 
Loss from discontinued operations before taxes

 
(44
)
 

 

 
(44
)
Benefit of income taxes

 
(16
)
 

 

 
(16
)
Loss from discontinued operations

 
(28
)
 

 

 
(28
)
Equity in earnings from subsidiaries
14,506

 
548

 

 
(15,054
)
 

Net income
$
10,050

 
$
14,506

 
$
548

 
$
(15,508
)
 
$
9,596




















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Table of Contents


GIBRALTAR INDUSTRIES, INC.
CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME
THREE MONTHS ENDED JUNE 30, 2016
(in thousands)
 
 
Gibraltar
Industries, Inc.
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Eliminations
 
Total
Net income
$
17,348

 
$
35,141

 
$
7,419

 
$
(42,919
)
 
$
16,989

Other comprehensive income:
 
 
 
 
 
 
 
 
 
Foreign currency translation adjustment

 

 
7,753

 

 
7,753

Adjustment to retirement benefit liability, net of tax

 
(1
)
 

 

 
(1
)
Adjustment to post-retirement health care liability, net of tax

 
38

 

 

 
38

Other comprehensive income

 
37

 
7,753

 

 
7,790

Total comprehensive income
$
17,348

 
$
35,178

 
$
15,172

 
$
(42,919
)
 
$
24,779


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Table of Contents


GIBRALTAR INDUSTRIES, INC.
CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME
THREE MONTHS ENDED JUNE 30, 2015
(in thousands)
 
 
Gibraltar
Industries, Inc.
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Eliminations
 
Total
Net income (loss)
$
4,438

 
$
6,655

 
$
(272
)
 
$
(6,734
)
 
$
4,087

Other comprehensive income:
 
 
 
 
 
 
 
 
 
Foreign currency translation adjustment

 

 
2,138

 

 
2,138

Adjustment to retirement benefit liability, net of tax

 
2

 

 

 
2

Adjustment to post-retirement health care liability, net of tax

 
37

 

 

 
37

Other comprehensive income

 
39

 
2,138

 

 
2,177

Total comprehensive income
$
4,438

 
$
6,694

 
$
1,866

 
$
(6,734
)
 
$
6,264








































24


Table of Contents

GIBRALTAR INDUSTRIES, INC.
CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME
SIX MONTHS ENDED JUNE 30, 2016
(in thousands)
 
 
Gibraltar
Industries, Inc.
 
Guarantor
Subsidiaries