SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

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

For The Fiscal Year Ended December 31, 2007

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

For the transition period from                      to                     

GIBRALTAR INDUSTRIES, INC.

(Exact name of Registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation organization)		16-1445150 (I.R.S. Employer Identification No.)
3556 Lake Shore Road, P.O. Box 2028, Buffalo, New York (address of principal executive offices)		14219-0228 (zip code)

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

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Name of each exchange on which registered
Common Stock, $.01 par value		NASDAQ Stock Exchange Global Select Market®

Securities registered pursuant to Section 12(g) of the Act:

NONE

Indicate by checkmark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No þ.

Indicate by checkmark if the registrant is not required to file report pursuant to Section 13 or Section 15(d) of the Act. Yes o No þ.

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 check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of the Form 10-K or any amendment to this Form 10-K. o

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

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

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

The aggregate market value of the Common Stock outstanding and held by non-affiliates (as defined in Rule 405 under the Securities Act of 1933) of the registrant, based upon the closing sale price of the Common Stock on the NASDAQ Stock Exchange Global Select Market^® on June 29, 2007, the last business day of the registrant’s most recently completed second quarter, was approximately $537.0 million.

As of February 22, 2008, the number of common shares outstanding was: 29,887,762.

DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant’s definitive Proxy Statement for the Annual Meeting of Shareholders
are incorporated by reference into Part III of this report.

 

 

Exhibit Index begins on Page 84

PART I

Item 1. Description of Business

General

We are a leading manufacturer, processor and distributor of residential and commercial building products and processed metal products for industrial applications. Our building products are used by homeowners and builders to provide structural and architectural enhancements for residential and commercial building projects. Our processed metal products are comprised primarily of steel shaped to specific widths and hardened to certain tolerances as required by our customers. We serve customers in a variety of industries in all 50 states, Canada, Mexico, Europe, Asia, and Central and South America. We operate 81 facilities in 27 states, Canada, England, Germany, Poland and China, giving us a broad platform for just-in-time delivery and support to our customers.

We sell our products both domestically and internationally. We operate in the following two business segments:

•

Building Products — Through acquisitions and organic growth, we have created a building products business that now offers more than 5,000 products, many of which are market leaders. Our building products segment operates 72 facilities in 25 states, Canada, England, Germany and Poland.

•

Processed Metal Products — Our processed metal products segment focuses on value-added precision sizing and treating of steel for a variety of uses, the manufacture of non-ferrous metal powders for use in several industries and other activities. Our processed metal products segment operates 9 facilities in 5 states and China.

The following table sets forth the selected products, industries served and customers for each segment.

				Building products				Processed metal
Selected products/ services		•		Mailboxes		•		Cold-rolled strip steel
		•		Ventilation products		•		Non-ferrous metals powder
		•		Expanded metal
		•		Structural connectors
		•		Bar grating
		•		Metal building accessories
		•		Metal lath
Selected industries served		•		Retail home market		•		Power and hand tool hardware
		•		Lumber		•		Aerospace
		•		Building materials		•		Electronics
		•		Residential, commercial		•		Automotive
				and industrial construction		•		Automotive supply
						•		Consumer products
Selected customers		•		The Home Depot		•		Chrysler
		•		Lowe’s Companies		•		General Motors
		•		Menard Cashway Lumber		•		BorgWarner
		•		ABC Supply		•		Ford Motor Company
		•		Wal-Mart		•		Honda
						•		Arrowhead Industries

Note 14 of the Company’s consolidated financial statements included in Item 8 herein provides information related to the Company’s business segments in accordance with accounting principles generally accepted in the United States of America.

Recent Developments

During 2007, the residential building market in the United Sates experienced a severe decline to approximately 1.3 million units in 2007 from 1.8 million units in 2006, a 28% decrease in volume. This decrease in activity had a significant impact on the profitability of our building products segment. 2007 also saw a decrease in the domestic production of automobiles, which caused a reduction in volumes in a portion of our processed metals segment. This decrease in volume caused a reduction in the margins in this segment.

As part of our continuing evaluation of our businesses, during 2007 we determined that both our steel service center and cabinet manufacturing businesses no longer provided strategic fit with our long-term growth and operational objectives. In August 2007, we sold certain assets of our bath cabinet manufacturing business and committed to a plan to sell the remaining assets of this business. In September 2007, we committed to a plan to dispose of the assets of our steel service center business. During the third and fourth quarters of 2007, we sold the majority of the assets of these businesses and expect to complete the disposal of assets in 2008. The results of both of these businesses have been classified as discontinued operations in our consolidated financial statements included in Item 8 herein.

We continued to strengthen our business through the acquisition of three businesses with complimentary market positions in 2007. In March 2007, we acquired the stock of Dramex Corporation (Dramex), a manufacturer, marketer and distributor of a diverse line of expanded metal products through its locations in the United States, Canada and England. In April 2007, we acquired certain assets and liabilities of Noll Manufacturing Company (Noll), and its affiliates, a manufacturer, marketer and distributor of products for the building, HVAC and lawn and garden components of the building products market through its locations in California, Washington and Oregon. In August 2007, we acquired the stock of Florence Corporation (Florence), a Kansas manufacturer of storage solutions, including mail and package delivery products. Note 4 of the Company’s consolidated financial statements included in Item 8 herein contains additional information regarding the acquisition of these businesses.

Industry overview

Building products manufacturers occupy an intermediate market between the primary steel, metal and other material producers and the nationwide wholesale and retail building supply industry. The primary producers typically focus on producing high volumes of their product. We purchase raw materials from these producers and, through various production processes, convert these steel raw materials into specialized products for use in the construction or repair of residential and commercial buildings. We distribute our products through both wholesale distributors, which focus their efforts on contractors, and large retail chains, which have captured the majority of the retail building products market.

Steel and metal processors occupy a market niche that exists between the primary steel and metal producers and end-users and others. Primary steel and metal producers typically focus on the sale of standard size and tolerance of steel and other metals to large volume purchasers, including steel and metal processors. End-users require steel with closer tolerances and with shorter lead times than the primary steel and metal producers can provide efficiently. Steel processors like our company, through the application of various higher value-added processes such as cold-rolling and specialized heat-treating methods, process steel to a precise grade, temper, tolerance and finish. End product manufacturers incorporate this processed steel into finished goods.

Products and services

Building Products segment

The Building Products segment is composed of 19 businesses acquired over the last eleven years that are primarily, but not exclusively, manufacturers of metal products used in the residential and light commercial building markets. As a result, we operate 72 facilities in 25 states, Canada, England, Germany and Poland, giving us a national base of operations to provide customer support, delivery, service and quality to a number of regional and national customers, and providing us with manufacturing and distribution efficiencies in North America, as well as a presence in the European market.

We manufacture an extensive variety of products that are sold to lumber and building material wholesalers, buying groups, discount and major retail home centers, major home builders, HVAC and roofing distributors and residential, industrial and commercial contractors. Our product offerings include a full line of ventilation products and accessories; storage solutions, including mailboxes and package delivery products; roof edging, underlayment and flashing; soffit; drywall corner bead; structural support products; coated coil stock; metal roofing and accessories; steel framing; rain-carrying systems, including gutters and accessories; builders’ hardware, shelving and closet rods; lawn and garden products; diffusers and fasteners, each of which can be sold separately or as an integral part of a package or program sale.

Our principal focus in the recent past has been to penetrate and continue to build on our success in the residential building products market. We have been able to develop a strong customer base in the light commercial building market through acquisitions and market penetration. The acquisitions of Alabama Metal Industries Corporation (AMICO) in 2005, The Expanded Metal Company, Ltd. and Sorst Streckmetall GmbH (EMC) in 2006 and Dramex in 2007 expanded our product line to include bar grating used in walkways, platforms, safety barriers, drainage covers, and ventilation grates; expanded metal used in walkways, shelving, barriers, patio furniture, and other applications where both visibility and security are necessary; perforated metal used in industrial, home and office settings; fiberglass grating, used in areas where high strength, light weight, low maintenance and corrosion resistance are required; and safety/plank grating, used to provide a walking surface with excellent slip resistance. These products are used in industrial and commercial buildings. AMICO also produces metal lath, used as a structural base for stucco, tile or stone, and vinyl drywall. These products are used in industrial/commercial and residential buildings. The acquisition of Noll in 2007 provides the Company with additional products that can be distributed through our other distribution businesses, providing further opportunity for market penetration. The acquisition of Florence in 2007 added to the product offering in our storage solutions market and provides access to the centralized mail delivery market.

We update our building products by launching new products, enhancing existing products and adjusting product specifications to respond to building code and regulatory changes. In 2007, our subsidiary, Construction Metals, introduced innovative ladder safety products, while another subsidiary, United Steel Products (“USP”), introduced its “Gold Coat” , a high performance corrosion protection coating for outdoor use with pressure treated wood. USP and another subsidiary, Southeastern Metals Manufacturing Company, Inc. (SEMCO), offer numerous finished parts, including an assortment of metal structural connectors for the residential and commercial building industries. Also in 2007, our AMICO subsidiary designed a new type of stainless steel lath for Walt Disney Imagineering and our Solar Group, Inc. subsidiary introduced the Gibraltar brand mailbox with 12 new products in approximately 1,900 Home Depot stores. In addition, USP and its in-house engineers have been active in the development of building codes nationwide. In particular, USP professionals are recognized for their work and expertise in the field of storm resistant construction, including being called upon by FEMA to assist with hurricane response and damage assessment efforts. As a result of our involvement in the development of building codes, we are able to enhance our products and act first to bring the latest code-compliant building products to the market including USP’s “Hurricane Anchor.” As building codes continue to tighten, in part in response to hurricanes and other natural events, we have been able to grow our customer base, especially in coastal regions.

Many of our building products are used by home owners and builders to provide structural and architectural enhancements for residential and commercial building projects, including in geographic locations subject to severe weather or seismic activity, and facilitate compliance with increasingly stringent building codes and insurance company requirements. Our building products are manufactured primarily from galvanized, galvalume and painted steel, anodized and painted aluminum, copper, brass, zinc and various plastic compounds. These additional metal purchases, when added to our existing Processed Metal Products segment purchases, enhance our purchasing position due to the increased total volume and value-added component of these purchases.

Our production capabilities allow us to process the wide range of metals and plastics necessary for manufacturing building products. Our equipment includes automatic roll forming machines, stamping presses, shears, press brakes, paint lines, milling, welding, injection molding and numerous automated assembly machines. We maintain our equipment through a thorough preventive maintenance program, including in-house tool and die shops, allowing us to meet the demanding service requirements of many of our customers.

Processed Metal Products segment

We manufacture cold-rolled strip steel, metal powders and coated steel products. In addition, we provide materials management and, through a joint venture, steel pickling. We operate through 9 locations in 5 states and in China.

Our cold-rolled strip steel is used in applications that demand more precise widths, improved surface conditions and tighter gauge tolerances than are supplied by primary producers of flat-rolled steel products. Consistent with our strategy of focusing on value-added products and services, we produce a broad range of fully processed cold-rolled strip steel products. We buy wide sheet steel in coils from primary producers and process it to specific customer orders by performing computer-aided processes such as cold reduction, annealing, edge rolling and slitting. Cold reduction is the rolling of steel to a specified thickness, tolerance and finish. Annealing is a thermal process that changes hardness and certain metallurgical characteristics of steel. Edge rolling involves conditioning edges of processed steel into square, full round or partially round shapes. Slitting is the cutting of steel to specified widths. Depending on customer specifications, we use one or more of these processes to produce steel strip of a precise grade, temper, tolerance and finish. Customers for our strip steel products include manufacturers in the automotive, automotive supply, power and hand tool, hardware and other industries.

We have the capability to process coils up to a maximum outside diameter of 72 inches and roll widths of up to 50 inches. Our rolling mills include automatic gauge control systems with hydraulic screw downs allowing for micro-second adjustments during processing. Our computerized mills enable us to satisfy an industry demand for a wide range of steel from heavier gauge and special alloy steels to low carbon and light gauge steels, in each case having a high quality finish and precision gauge tolerance.

Our rolling facilities are further complemented by 17 high convection annealing furnaces, which allow for shorter annealing times than conventional annealers. Fourteen of our furnaces and bases employ advanced technology that incorporates the use of a hydrogen atmosphere for the production of cleaner and more uniform steel. As a result of our annealing capabilities, we are able to produce cold-rolled strip steel with improved consistency in terms of thickness, hardness, and molecular grain structure and surface.

We can produce certain strip steel products on oscillated coils, which wind strip steel similar to the way fishing line is wound on a reel. Oscillating the strip steel enables us to put at least six times greater volume of finished product on a coil than standard ribbon winding, allowing customers to achieve longer production runs by reducing the number of equipment shut-downs to change coils. Customers are thus able to increase productivity, reduce downtime, improve yield and lengthen die life. These benefits to customers allow us to achieve higher margins on oscillated products. To our knowledge, only a few other steel producers are able to produce oscillated coils, and we are not aware of any competitor that can produce 12,000-pound oscillated coils, the maximum size we produce.

In addition, we operate a manufacturing facility in Research Triangle Park, North Carolina that manufactures, markets and distributes nonferrous metal powder for use in brazing paste, bearings and other products in a number of industries, including the automotive, aerospace, electronics and consumer products industries. Our 2005 acquisition of SCM Asia, a metal powder producer in China, expanded the geographic reach of our capability to serve these customers and markets.

We also operate an advanced materials management facility in Michigan that links primary steel producers and end-user manufacturers by integrating the inventory purchasing, receiving, inspection, billing, storage and shipping functions and producing just-in-time delivery of materials.

We have a 31% interest in Samuel Steel Pickling Company, a joint venture with Samuel Manu-Tech, Inc. that has two steel pickling operations in Ohio. After the hot rolling process, the surface of sheet steel is left with a residue known as scale, which must be removed prior to further processing by a cleaning process known as pickling. This joint venture pickles steel on a toll basis, receiving fees for pickling services without acquiring ownership of the steel.

Quality assurance

We place great importance on providing our customers with high-quality products for use in critical applications. We carefully select our raw material vendors and use computerized inspection and analysis to maintain our quality standards so that our products will meet critical customer specifications. To meet customer specifications, we use documented procedures utilizing statistical process control systems linked directly to processing equipment to monitor all stages of production. Physical, chemical and metallographic analyses are performed during the production process to verify that mechanical and dimensional properties, cleanliness, surface characteristics and chemical content are within specification. In addition, all of our facilities that provide services or products to the automotive industry are QS-9000 registered, and ten of our building products facilities are ISO 9001-2000 registered.

Technical services

We employ a staff of engineers, metallurgists and other technical personnel and maintain fully-equipped, modern laboratories to support our operations. These laboratories enable us to verify, analyze and document the physical, chemical, metallurgical and mechanical properties of our raw materials and products. In addition, our engineering staff also employs a range of CAD/CAM programs to design highly specialized and technically precise products. Technical service personnel also work in conjunction with our sales force to determine the types of products and services required for the particular needs of our customers.

We have over 200 technical service employees spread throughout our businesses. In each segment the technical staff monitors our operations to satisfy customer specifications for the product being produced.

In March 2007, we hired a Vice President of Operations to oversee our manufacturing operations and work with our operational leadership to implement programs and procedures that will enable us to source, manufacture and distribute as efficiently and as cost-effectively as possible.

Suppliers and raw materials

Steel and metal processing companies are required to maintain substantial inventories of raw material in order to accommodate the short lead times and just-in-time delivery requirements of their customers. Accordingly, we generally maintain our inventory of raw materials at levels that we believe are sufficient to satisfy the anticipated needs of our customers. We manage our inventory levels through improved forecasting; increasingly efficient supply chain management, including the establishment of extended terms and inventory hold programs with our suppliers; and our ongoing assessment of market conditions.

The primary raw material we purchase is flat-rolled steel which is used in our Building Products and Processed Metal Products segments. To a lesser extent, we purchase aluminum for the Building Products segment and copper for use in our Processed Metal Products segment.

We purchase flat-rolled steel at regular intervals on an as-needed basis, primarily from the major North American suppliers, as well as a limited amount from foreign steel producers. Because of our strategy to develop longstanding relationships in our supply chain we have been able to maintain an adequate supply of flat-rolled steel.

In early 2004, we experienced temporary supply shortages in the aluminum market. In response, we implemented a commodity sourcing strategy for purchasing aluminum in order to improve consistency. In 2007, we purchased our aluminum from several domestic mills and supplemented that supply by purchasing approximately 17% of our aluminum requirements from foreign producers. We purchase copper scrap from various domestic sources and, if scrap is not available in sufficient supply, we purchase cathode. Supply has been adequate from these sources.

We purchase natural gas and electricity from suppliers in proximity to our operations. While there has been upward pressure on pricing, we have not experienced interruptions due to gas or power constraints, and we have not entered into contracts that permit an interruptible supply.

We have no long-term contractual commitments with our suppliers. Our Vice President of Supply Chain Management continues to examine and improve our purchasing practices across our geographically dispersed facilities in order to streamline purchasing across like commodities.

Intellectual property

Although we protect our intellectual property by trademark, copyright and patent registrations, and use some of this intellectual property in some of our activities in each of our operating segments, we do not believe any of this intellectual property is material to our operations. While not material, we do believe one of our patents related to a roof vent sold in our Building Products segment, scheduled to expire in November 2009, gives us a competitive advantage with regard to that product.

Sales and marketing

Our products and services are sold primarily by our sales personnel and outside sales representatives located throughout the United States, Canada, Mexico, Europe and Asia. We had over 280 sales personnel as of December 31, 2007. We have organized sales teams to focus on specific customers and national accounts to allow us to provide enhanced supply solutions, and enhance our ability to increase the number of products that we provide to those customers and accounts. Our sales staff works with certain retail customers to manage shelf space which allows us to increase sales at these locations.

Customers and distribution

We have numerous customers located throughout the United States, Canada, Mexico, Europe, Asia, and Central and South America principally in the building and construction, general manufacturing, automotive, automotive supply, steel and machinery industries. Major customers include home improvement retailers, building product distributors, automobile manufacturers and suppliers and commercial and residential contractors.

During 2005, one of our customers (The Home Depot), accounted for approximately 14.7% of our consolidated gross sales. No other customer represented 10% or more of our consolidated gross sales for 2005 and no customer represented 10% or more of our consolidated gross sales for 2006 or 2007.

During 2005, 2006 and 2007, one customer (The Home Depot) of our Building Products segment accounted for approximately 22.8%, 14.0% and 13.1%, respectively, of this segment’s gross sales. No other customer accounted for more than 10% of our Building Products segment gross sales during these periods.

During 2005, one customer (General Motors) of our Processed Metals Product segment, accounted for approximately 10.6% of this segment’s gross sales. No other customer accounted for 10% or more of this segment’s gross sales for 2005, and no customer represented 10% or more of this segment’s gross sales in 2006 and 2007.

Although we negotiate annual sales orders with the majority of our customers, these orders are subject to customer confirmation as to product amounts and delivery dates. We do not have long-term contracts with any of our customers.

Backlog

Because of the nature of our products and the short lead time order cycle, backlog is not a significant factor in our business. We believe that substantially all of our firm orders existing on December 31, 2007 will be shipped prior to the end of the first quarter of 2008.

Competition

All of the segments we operate in are highly competitive. In general, we compete in the building products and processed metal products markets with several domestic suppliers and, in the case of processed metal products, some foreign manufacturers. A few of our competitors in the processed metals and building products segments may be larger, have greater financial resources or have less financial leverage than we do. As a result, these competitors may be better positioned to respond to any downward pricing pressure or other adverse economic or industry conditions or to identify and acquire companies or product lines compatible with their business. The basis of our competition in each segment differs according to unique characteristics of each segment and are discussed in more detail below.

Building Products

We compete with numerous suppliers of building products in the building products market based on the range of products offered, quality, price and delivery. Although some of these competing suppliers are large companies, the majority are small to medium-sized and do not offer the range of building products we do.

The prices for the raw materials we use in our Building Products operations, primarily steel, aluminum and plastic, are volatile due to a number of factors beyond our control, including supply shortages, general industry and economic conditions, labor costs, import duties, tariffs and currency exchange rates. Although we have strategies to deal with volatility in raw material costs such as reducing inventory levels, other competitors in this segment who do not have to maintain inventories as large as ours may be better able to mitigate the effects of this volatility and thereby compete effectively against us on product price.

We believe our broad range of products, product quality and ability to meet exacting customer delivery requirements gives us a competitive advantage over many competitors in this segment.

Processed Metal Products

The metal processing market is highly competitive. We compete with a small number of other metal processors, including Worthington Industries and Steel Technologies. Some of these processors, like Worthington, also focus on fully processed, high value-added metal products like we do. We compete in this market on the basis of precision and range of achievable tolerances, quality, price and the ability to meet delivery schedules dictated by customers.

The prices for the raw materials we use in our Processed Metal Products operations, primarily steel, are volatile due to the same factors described above with respect to our Building Products segment. Although we have strategies to deal with volatility in raw material costs such as indexing certain customer orders to steel and copper market pricing to reduce the impact of market volatility on our margins and matching purchase commitments with sales orders, other competitors in this segment which do not have to maintain inventories as large as ours may be better able to mitigate the effects of this volatility and thereby compete effectively against us on product price during times of price volatility.

We believe our ability to meet stringent process specifications and the quality of our processed metals give us a competitive advantage over some competitors in this segment.

Employees

At December 31, 2007, we employed approximately 3,950 people, of which approximately 19.4% were represented by unions through various collective bargaining agreements, two of which expired on December 31, 2007 and one of which expired January 31, 2008 and others that are scheduled to expire between March 31, 2008 and March 31, 2011. We are currently negotiating new agreements with the unions whose agreements expired. There were approximately 200 employees working under expired contracts at December 31, 2007. The production employees at one of our facilities voted to join a union in August 2007, and we are currently negotiating their initial agreement. We have historically had good relationships with our unions. We expect the current and future negotiations with our unions to result in contracts that provide benefits that are consistent with those provided in our current and expired agreements.

Seasonality

Our net sales are generally lower in the first and fourth quarters primarily due to customer plant shutdowns in the automotive industry due to holidays and model changeovers, as well as reduced activity in the building and construction industry due to inclement weather.

Governmental Regulation

Our processing centers and manufacturing facilities are subject to many federal, state and local requirements relating to the protection of the environment and we use environmentally sensitive materials in our production processes. For example, we lubricate our machines with oil and use oil baths to treat some of our products. We believe that we operate our business in material compliance with all environmental laws and regulations, do not anticipate any material expenditures in order to meet environmental requirements and do not believe that future compliance with such laws and regulations will have a material adverse effect on our financial condition or results of operations. However, we could incur operating costs or capital expenditures in complying with more stringent environmental requirements in the future or with current requirements if they are applied to our facilities in a way we do not anticipate.

Our operations are also governed by many other laws and regulations covering our labor relationships, the zoning of our facilities, our general business practices and other matters. We believe that we are in material compliance with these laws and regulations and do not believe that future compliance with such laws and regulations will have a material adverse effect on our financial condition or results of operations.

Internet Information

Copies of the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 are available free of charge through the Company’s Web site (www.gibraltar1.com) as soon as reasonably practicable after the Company electronically files the material with, or furnishes it to, the Securities and Exchange Commission.

Item 1A. Risk Factors

Our level of indebtedness could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry and prevent us from meeting our obligations.

We are significantly leveraged with total indebtedness of approximately $488.6 million as of December 31, 2007. The following chart shows our level of indebtedness and certain other information as of December 31, 2007:

		as of
(Dollars in millions)		December 31, 2007
Senior credit facility:
Revolving credit facility		$	157.9
Institutional term loan			121.6
Senior subordinated notes (1)			204.0
Other			8.0
Total debt		$	491.5
Shareholders’ equity		$	567.8
Ratio of earnings to fixed charges (2)			2.3x

We may not be able to generate sufficient cash to service all of our indebtedness and we could be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.

Our ability to make scheduled payments or to refinance our debt obligations depends on our financial and operating performance, which is subject to prevailing economic and competitive conditions and to certain financial, business and other factors beyond our control. We cannot assure you that we will maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness.

If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay capital expenditures, sell assets or operations, seek additional capital or restructure or refinance our indebtedness. We cannot assure you that we would be able to take any of these actions, that these actions would be successful and permit us to meet our scheduled debt service obligations or that these actions would be permitted under the terms of our existing or future debt agreements. In the absence of such operating results and resources, we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet our debt service and other obligations. Our senior credit facility and our indenture agreement for our senior subordinated notes restrict our ability to dispose of assets and use the proceeds from the disposition. We may not be able to consummate those dispositions or to obtain the proceeds which we could realize from them and these proceeds may not be adequate to meet any debt service obligations then due.

If we cannot make scheduled payments on our debt, we will be in default and, as a result:

•		our debt holders could declare all outstanding principal and interest to be due and payable;
•		the lenders under our senior credit facility could terminate their commitments to lend us money and foreclose against the assets securing their borrowings; and
•		we could be forced into bankruptcy or liquidation.

Despite current indebtedness levels, we may still be able to incur substantially more debt. This could further exacerbate the risks described above.

We and our subsidiaries may be able to incur substantial additional indebtedness in the future. The terms of the indenture for our senior subordinated notes do not fully prohibit us or our subsidiaries from doing so. Additionally, our Amended and Restated Credit Agreement provides commitments of up to $497.7 million in the aggregate, including a revolving credit facility of up to $375.0 million. At December 31, 2007, outstanding borrowings under the revolving credit facility were $157.9 million, $16.4 million of letters of credit were outstanding and $200.7 million was available to be borrowed. Under the terms of this agreement, we are required to repay $30.9 on the term note before March 30, 2008. Our principal operating subsidiary, Gibraltar Steel Corporation of New York, is also a borrower under our senior credit facility and the full amount of our commitments under the revolving credit facility may be borrowed by that subsidiary.

In addition our substantial degree of indebtedness could have other important consequences, including the following:

	•		it may limit our ability to obtain additional debt or equity financing for working capital, capital expenditures, product development, debt service requirements, acquisitions and general corporate or other purposes;
	•		a substantial portion of our cash flows from operations are dedicated to the payment of principal and interest on our indebtedness and may not be available for other purposes, including our operations, capital expenditures and future business opportunities;
	•		certain of our borrowings, including borrowings under our senior credit facility, are at variable rates of interest, exposing us to the risk of increased interest rates;
	•		it may limit our ability to adjust to changing market conditions and place us at a competitive disadvantage compared to our competitors that have less debt; and
	•		we may be vulnerable in a downturn in general economic conditions or in our business, or we may be unable to carry out capital spending that is important to our growth.

Our future operating results may be affected by fluctuations in raw material prices. We may not be able to pass on increases in raw material costs to our customers.

Our principal raw material is flat-rolled steel, which we purchase from multiple primary steel producers. The steel industry as a whole is very cyclical, and at times availability and pricing can be volatile due to a number of factors beyond our control, including general economic conditions, domestic and worldwide demand, labor costs, competition, import duties, tariffs and currency exchange rates. This volatility can significantly affect our steel costs. Other significant raw materials we use include aluminum, plastics and copper, which are also subject to volatility.

Global consolidation of the primary steel producers and increased input costs have continued to put upward pressure on market prices for steel. Demand for steel increased during 2004, for example, especially in China, and steel producers experienced a shortage of steel scrap and coke, two key materials used in the manufacture of steel. The shortage of these raw materials resulted in significant increases in both steel demand and steel pricing in 2004 and early 2005. To hedge against further price increases and potential shortages, we purchased significant quantities of steel. When steel prices began to decline in mid-2005, our gross profit margins suffered a decline from the corresponding period in 2004 partly because we were selling inventory produced with this high-cost steel, and, contrary to 2004, we were operating under pricing pressure from our customers in our Processed Metal Products segment.

We are required to maintain substantial inventories to accommodate the short lead times and just-in-time delivery requirements of our customers. Accordingly, we purchase raw materials on a regular basis in an effort to maintain our inventory at levels that we believe are sufficient to satisfy the anticipated needs of our customers based upon historic buying practices and market conditions. In an environment of increasing raw material prices, competitive conditions will impact how much of the steel price increases we can pass on to our customers. To the extent we are unable to pass on future price increases in our raw materials to our customers, the profitability of our business could be adversely affected.

The building and construction industry and the automotive industry account for a significant portion of our sales, and reduced demand from these industries is likely to adversely affect our profitability and cash flow.

Net sales of our Building Products segment, which sells products for use in the building and construction industry, accounted for approximately 62.2%, 69.9% and 70.8% of our net sales in 2005, 2006 and 2007, respectively. These sales were made primarily to retail home improvement centers and wholesale distributors. We also sell some products in our Processed Metal Products segment to customers in the building and construction industry. For 2007, The Home Depot accounted for approximately 9.0% of our gross sales. A loss of sales to the building and construction industry, or to the specified customer, would adversely affect our profitability and cash flow. For example, our sales of building products decreased during 2007 due to a decline in demand in the new build residential building industry, causing a decrease in net sales in our historic building products businesses. This reduction in volume caused a decrease in our operating margins in that segment compared to the prior year. This industry is cyclical, with product demand based on numerous factors such as interest rates, general economic conditions, consumer confidence and other factors beyond our control.

A portion of our business is highly dependent on automotive manufacturers, many of which have publicly announced plans to reduce production levels and eliminate excess manufacturing capacity including plans to eliminate jobs and reduce costs. The financial difficulties of certain customers and the efforts under way by our customers to improve their overall financial condition could result in numerous changes that are beyond our control, including additional unannounced customer plant closings, decreased production, changes in the product mix or distribution patterns, volume reductions, labor disruptions, mandatory reductions other unfavorable changes in our pricing, terms or service conditions or market share losses, as well as other changes we may not accurately anticipate. These events could adversely impact our financial results.

We estimate that net sales of our products for use in the automotive industry accounted for approximately 27.4%, 19.9% and 17.5% of our net sales in 2005, 2006 and 2007, respectively. Such sales include sales directly to auto manufacturers and to manufacturers of automotive components and parts. The automotive industry experiences significant fluctuations in demand based on numerous factors such as general economic conditions, consumer confidence and other factors beyond our control. In 2006, for example, our sales of processed steel products to the Big Three automotive manufacturers decreased in comparison to 2005, contributing to a decrease in our operating margins in the Processed Metals Products segment compared to the same quarter in the prior year. The domestic auto industry is currently experiencing a difficult operating environment that may result in lower levels of vehicle production and decreased demand for our products in the processed metals products segment.

Downturns in demand from the building and construction industry, the automotive industry or any of the other industries we serve, or a decrease in the prices that we can realize from sales of our products to customers in any of these industries, would adversely affect our profitability and cash flows.

We may not be able to identify, manage and integrate future acquisitions successfully, and if we are unable to do so, we are unlikely to sustain our historical growth rates and our ability to repay our outstanding indebtedness may decline.

Historically, we have grown through a combination of internal growth and external expansion through acquisitions. Although we intend to actively pursue our growth strategy in the future, we cannot provide any assurance that we will be able to identify appropriate acquisition candidates or, if we do, that we will be able to negotiate successfully the terms of an acquisition, finance the acquisition or integrate the acquired business effectively and profitably into our existing operations.

Integration of an acquired business could disrupt our business by diverting management away from day-to-day operations and could result in contingent liabilities that were not anticipated. Further, failure to integrate successfully any acquisition may cause significant operating inefficiencies and could adversely affect our profitability and our ability to repay our outstanding indebtedness. Consummating an acquisition could require us to raise additional funds through additional equity or debt financing. Additional debt financing would increase our interest expense and reduce our cash flows otherwise available to reinvest in our business and may not be available on satisfactory terms when required.

Lead time and the cost of our products could increase if we were to lose one of our primary suppliers.

If, for any reason, our primary suppliers of flat-rolled steel, aluminum or other metals should curtail or discontinue deliveries to us in quantities we need and at prices that are competitive, our business could suffer. The number of available suppliers has been reduced in recent years due to industry consolidation and bankruptcies affecting steel and metal producers, and this trend may continue. Our top ten suppliers accounted for 34% of our purchases during 2007. We could be significantly and adversely affected if delivery were disrupted from a major supplier or several suppliers. In addition, we do not have long-term contracts with any of our suppliers. In early 2004, we experienced temporary supply shortages in the aluminum market. If, in the future, we were unable to obtain sufficient amounts of the necessary metals at competitive prices and on a timely basis from our traditional suppliers, we may not be able to obtain such metals from alternative sources at competitive prices to meet our delivery schedules, which would have a material adverse effect on our results, profitability and cash flow.

Increases in energy and freight prices will increase our operating costs, and we may be unable to pass all these increases on to our customers in the form of higher prices for our products.

We use energy to manufacture and transport our products. In particular, our building products and processed metal products plants use considerable electricity. Our operating costs increase if energy costs rise, which occurred in 2006. During periods of higher freight and energy costs, we may not be able to recover our operating cost increases through price increases without reducing demand for our products. In addition, we do not hedge our exposure to higher prices via energy futures contracts. Increases in energy prices will increase our operating costs and may reduce our profitability and cash flows if we are unable to pass all the increases on to our customers. For example, we estimate that increases in energy costs have increased our cost of sales and, to a lesser degree, selling, general and administrative expense by approximately $2.4 million in 2006 compared to 2005.

We rely on a few customers for a significant portion of our gross sales, and the loss of those customers would adversely affect us.

Some of our customers are material to our business and results of operations. In 2007, ten of our largest customers accounted for approximately 26.9% of our gross sales. Our percentage of gross sales to our major customers may increase if we are successful in pursuing our strategy of broadening the range of products we sell to existing customers. In such an event, or in the event of any consolidation in the industries we serve, including the retail and automotive industries, our gross sales may be increasingly sensitive to deterioration in the financial condition of, or other adverse developments with, one or more of our top customers. These customers are also able to exert pricing and other influence on us, requiring us to market, deliver and promote our products in a manner that may be more costly to us. Moreover, we generally do not have long-term contracts with our customers, as is typical in the industries we serve. As a result, although our customers periodically provide indications of their product needs and purchases, they generally purchase our products on an order-by-order basis, and the relationship, as well as particular orders, can be terminated at any time. The loss or significant decrease in business from any of our major customers would have a material adverse effect on our business, results of operations and cash flow.

Our business is highly competitive, and increased competition could reduce our gross profit, net income and cash flows.

The principal markets that we serve are highly competitive. Competition is based primarily on the precision and range of achievable tolerances, quality, price, raw materials and inventory availability and the ability to meet delivery schedules dictated by customers. Our competition in the markets in which we participate comes from companies of various sizes, some of which have greater financial and other resources than we do and some of which have more established brand names in the markets we serve. Increased competition could force us to lower our prices or to offer additional services at a higher cost to us, which could reduce our gross profit, net income and cash flow and cause us to lose market share.

Our principal stockholders have the ability to exert significant control in matters requiring a stockholder vote and could delay, deter or prevent a change in control of the Company.

Approximately 18.3% of our outstanding common stock, including shares of common stock issuable under options and similar compensatory instruments granted which are exercisable, or which are vested or will vest within 60 days, are owned by Brian J. Lipke, who is the Chairman and Chief Executive Officer of our Company and Eric R. Lipke, Neil E. Lipke, Meredith A. Lipke and Curtis W. Lipke, all of whom are siblings, and certain trusts for the benefit of each of them. As a result, the Lipke family has significant influence over all actions requiring stockholder approval, including the election of our board of directors. Through their concentration of voting power, the Lipke family could delay, deter or prevent a change in control of our Company or other business combinations that might otherwise be beneficial to our Company. In deciding how to vote on such matters, the Lipke family may be influenced by interests that conflict with other stakeholders. In addition, the Lipke family may have an interest in pursuing transactions that, in their judgment, enhance the value of their equity investment in the Company, even though those transactions may involve risks to our other stakeholders.

We depend on our senior management team, and the loss of any member could adversely affect our operations.

Our success is dependent on the management and leadership skills of our senior management team. The loss of any of these individuals or an inability to attract, retain and maintain additional personnel could prevent us from implementing our business strategy. We cannot assure you that we will be able to retain our existing senior management personnel or to attract additional qualified personnel when needed. We have not entered into employment agreements with any of our senior management personnel other than Brian J. Lipke, our Chairman of the Board and Chief Executive Officer, and Henning Kornbrekke, our President and Chief Operating Officer.

We could incur substantial costs in order to comply with, or to address any violations of, environmental laws.

Our operations and facilities are subject to a variety of federal, state, local and foreign laws and regulations relating to the protection of the environment and human health and safety. Failure to maintain or achieve compliance with these laws and regulations or with the permits required for our operations could result in substantial operating costs and capital expenditures, in addition to fines and civil or criminal sanctions, third-party claims for property damage or personal injury, cleanup costs or temporary or permanent discontinuance of operations. Certain of our facilities have been in operation for many years and, over time, we and other predecessor operators of these facilities have generated, used, handled and disposed of hazardous and other regulated wastes. Environmental liabilities could exist, including cleanup obligations at these facilities or at off-site locations where materials from our operations were disposed of or at facilities we divested, which could result in future expenditures that cannot be currently quantified and which could reduce our profits and cash flow. We may be held strictly liable for the contamination of these sites, and the amount of that liability could be material. Under the “joint and several” liability principle of certain environmental laws, we may be held liable for all remediation costs at a particular site. Changes in environmental laws, regulations or enforcement policies could have a material adverse effect on our business, financial condition or results of operations.

Labor disruptions at any of our major customers or at our own manufacturing facilities could adversely affect our results of operations and cash flow.

Many of our important customers, including in the automotive industry, have heavily unionized workforces and have sometimes experienced significant labor disruptions such as work stoppages, slow-downs and strikes. A labor disruption at one or more of our major customers could interrupt production or sales by that customer and cause the customer to halt or limit orders for our products and services. Any such reduction in the demand for our products and services would adversely affect our net sales, results of operations and cash flow.

In addition, approximately 19.4% of our own employees are represented by unions through various collective bargaining agreements, two of which expired on December 31, 2007 and others that are scheduled to expire between January 31, 2008 and March 31, 2011. The production employees at one of our facilities voted to join a union in August 2007 and we are currently negotiating their initial agreement. It is likely that our unionized employees will seek an increase in wages and benefits at the expiration of these agreements, and we may be unable to negotiate new agreements without labor disruption. In addition, labor organizing activities could occur at any of our facilities. If any labor disruption were to occur at our facilities, we could lose sales due to interruptions in production and could incur additional costs, which would adversely affect our net sales, results of operations and cash flow.

Our operations are subject to seasonal fluctuations that may impact our cash flow.

Our net sales are generally lower in the first and fourth quarters primarily due to reduced activity in the building and construction industry due to weather, as well as customer plant shutdowns in the automotive industry due to holidays and model changeovers. In addition, quarterly results may be affected by the timing of large customer orders. Therefore, our cash flow from operations may vary from quarter to quarter. If, as a result of any such fluctuation, our quarterly cash flows were significantly reduced, we may not be able to service our indebtedness. A default under any of our indebtedness would prevent us from borrowing additional funds and limit our ability to pay interest or principal, and allow our senior secured lenders to enforce their liens against our personal property.

Economic, political and other risks associated with foreign operations could adversely affect our financial results.

Although the majority of our business activity takes place in the United States, we derive a portion of our revenues and earnings from operations in foreign countries, and are subject to risks associated with doing business internationally. Our sales originating outside the United States represented approximately 10.2% of our consolidated net sales in fiscal 2007. We have facilities in Canada, China, Germany, Poland and England. The risks of doing business in foreign countries include the potential for adverse changes in the local political climate, in diplomatic relations between foreign countries and the United States or in governmental policies, laws or regulations, terrorist activity that may cause social disruption, logistical and communications challenges, costs of complying with a variety of laws and regulations, difficulty in staffing and managing geographically diverse operations, deterioration of foreign economic conditions, currency rate fluctuations, foreign exchange restrictions, differing local business practices and cultural considerations, restrictions on imports and exports or sources of supply and changes in duties or taxes. We believe that our business activities outside of the United States involve a higher degree of risk than our domestic activities.

We have not yet fully evaluated the internal control over financial reporting of Florence, Noll and Dramex, and any deficiencies in their internal controls that we may find would require us to spend resources to correct those deficiencies and could adversely affect market confidence in our reported consolidated financial information and the market price of our securities.

Maintaining effective internal control over financial reporting at the Company, including all our subsidiaries, is necessary for us to produce reliable financial reports and is important in helping to prevent financial fraud. We are currently subject to Sections 302, 404 and 906 of the Sarbanes-Oxley Act of 2002 and the related rules of the SEC, which require, among other things, our management to assess annually the effectiveness of our internal control over financial reporting and our independent registered public accounting firm to issue a report on the assessment of our management included in our annual report on Form 10-K. However, because Florence, Noll and Dramex (the Current Year Acquisitions) were private companies when we acquired them, these companies were not subject to the Sarbanes-Oxley Act of 2002, and we are continuing to evaluate the strength of their internal control over financial reporting.

As independent, privately owned companies, the Current Year Acquisitions did not operate under a fully documented system for accounting and internal control over financial reporting, and we will need to document that control structure and may need to improve it. If in the course of the integration process, we identify any significant deficiencies in internal control over financial reporting which is in effect at any of the Current Year Acquisitions, we will be required to spend time and money to remedy those deficiencies. If we are unable to sufficiently integrate the control structure in effect at the Current Year Acquisitions into our structure or correct any deficiencies we identify in a timely manner, we may conclude that these circumstances constitute a material weakness in the internal control over financial reporting of our Company. If we were to reach such a conclusion, our management and our independent registered public accounting firm would be unable to conclude in their reports that our internal control over financial reporting was effective. Investors could lose confidence in our reported consolidated financial information as a result, and the market price of our securities could decline.

Restrictive covenants may adversely affect our operations.

Our senior credit facility and the indenture governing our senior subordinated notes contain various covenants that limit our ability to, among other things:

	•		incur additional debt or provide guarantees in respect of obligations of other persons;
	•		pay dividends or distributions or redeem or repurchase capital stock;
	•		prepay, redeem or repurchase debt;
	•		make loans, investments and capital expenditures;
	•		incur debt that is senior to our Senior Subordinated notes but junior to our senior credit facilities and other senior indebtedness;
	•		incur liens;
	•		restrict distributions from our subsidiaries;
	•		sell assets and capital stock of our subsidiaries;
	•		consolidate or merge with or into, or sell substantially all of our assets to, another person; and
	•		enter into new lines of business.

In addition, the restrictive covenants in our senior credit facility (which includes our $375.0 million revolving credit facility and our $122.7 million term loan facility) require us to maintain specified financial ratios and satisfy other financial condition tests. Our ability to meet those financial ratios and tests can be affected by events beyond our control, and we cannot assure you that we will meet those tests. A breach of any of these covenants could result in a default under our senior credit facility. Upon the occurrence of an event of default under our senior credit facility, the lenders could elect to declare all amounts outstanding under such facility to be immediately due and payable and terminate all commitments to extend further credit. If such event of default and election occur, the lenders under our senior credit facility would be entitled to be paid before current senior subordinated note holders receive any payment under our senior subordinated notes. In addition, if we were unable to repay those amounts, the lenders under our senior credit facility could proceed against the collateral granted to them to secure that indebtedness.

We have pledged substantially all our assets as collateral under our senior credit facility. If the lenders under our senior credit facility accelerate the repayment of borrowings, we cannot assure you that we will have sufficient assets to repay our senior credit facility and our other indebtedness, including our senior subordinated notes, or borrow sufficient funds to refinance such indebtedness. Even if we are able to obtain new financing, it may not be on commercially reasonable terms, or terms that are acceptable to us.

We are subject to information system security risks and systems integration issues could disrupt our internal operations.

We are dependent upon information technology for the distribution of information internally and also to our customers and suppliers. This information technology is subject to damage or interruption from a variety of sources, including but not limited to computer viruses, security breaches and defects in design. Various measures have been implemented to manage our risks related to information system and network disruptions, but a system failure or failure to implement new systems properly could negatively impact our operations and financial results.

Disruptions to our business or the business of our customers or suppliers, could adversely impact our operations and financial results.

Business disruptions, including increased costs for or interruptions in the supply of energy or raw materials, resulting from severe weather events such as hurricanes, floods, blizzards, from casualty events, such as fires or material equipment breakdown, from acts of terrorism, from pandemic disease, from labor disruptions, or from other events such as required maintenance shutdowns, could cause interruptions to our businesses as well as the operations of our customers and suppliers. Such interruptions could have an adverse effect on our operations and financial results.

Variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.

Certain of our borrowings, primarily borrowings under our senior credit facility, are, and are expected to continue to be, at variable rates of interest and expose us to interest rate risk. If interest rates increase, our debt service obligations on the variable rate indebtedness would increase even if the amount borrowed remained the same, and our net income would decrease. Assuming all revolving loans and the term loan were fully drawn or funded on December 31, 2007, as applicable, each quarter point change in interest rates would result in a $1.2 million change in annual interest expense on our senior credit facility.

Item 1B. Unresolved Staff Comments

     None

Item 2. Description of Properties

We maintain our corporate headquarters in Buffalo, New York and conduct business operations in facilities located throughout the United States and in Canada, England, Germany, Poland and China.

We believe that our facilities, listed below, and their equipment are effectively utilized, well maintained, in good condition and will be able to accommodate our capacity needs through 2008:

				Square
Location		Utilization		footage
Corporate
Buffalo, New York		Headquarters			24,490	*
Processed Metal Products
Cheektowaga, New York		Cold-rolled strip steel processing			148,000
Cleveland, Ohio		Cold-rolled strip steel processing			259,000
Beachwood, Ohio		Administrative office			3,000	*
Durham, North Carolina		Administrative office and powdered metal processing			148,000
Detroit, Michigan		Administrative offices			1,152	*
Woodhaven, Michigan		Materials management facility			100,000
Brownsville, Texas		Warehouse			15,000	*
Suzhou, China		Powdered metal processing			45,200	*
Building Products
Jacksonville, Florida		Administrative office and building products manufacturing			261,400	*
Miami, Florida		Building products manufacturing			48,893	*
Lakeland, Florida		Warehouse			53,154	*
San Antonio, Texas		Administrative office and building products manufacturing			120,050	*
Houston, Texas		Building products manufacturing			48,000	*
Taylorsville, Mississippi		Administrative office and building products manufacturing			54,215
Taylorsville, Mississippi		Building products manufacturing			237,112
Enterprise, Mississippi		Building products manufacturing			198,154
Appleton, Wisconsin		Administrative office and building products manufacturing			100,262
Appleton, Wisconsin		Building products manufacturing			42,582
Montgomery, Minnesota		Administrative office and building products manufacturing			170,000
Livermore, California		Building products manufacturing			103,470	*
Rancho Cucamonga, California		Warehouse			20,640	*
North Wilkesboro, North Carolina		Warehouse			22,950	*
Hainesport, New Jersey		Warehouse			25,805	*
Denver, Colorado		Administrative office and building products manufacturing			89,560	*
Omaha, Nebraska		Warehouse			18,500	*
Denver, Colorado		Warehouse			29,422	*
Largo, Florida		Administrative office and building products manufacturing			100,000
Ontario, California		Administrative office and warehouse			41,140	*
Fontana, California		Building products manufacturing			37,500	*
Las Vegas, Nevada		Warehouse			8,750	*
Hayward, California		Warehouse			26,112	*
Kent, Washington		Warehouse			31,500	*
Escondido, California		Warehouse			9,200	*
Ontario, California		Administrative office			5,600	*
Salt Lake City, Utah		Warehouse			11,760	*
Albuquerque, New Mexico		Warehouse			11,000	*
Sacramento, California		Warehouse			41,160	*
Phoenix, Arizona		Warehouse			27,947	*

				Square
Location		Utilization		footage
Dallas, Texas		Administrative office and building products manufacturing			128,476	*
Clinton, Iowa		Building products manufacturing			100,000
Peoria, Illinois		Sales office			1,610	*
Thornhill, Ontario		Administrative office and building products manufacturing			60,500	*
Dallas, Texas		Administrative office and building products manufacturing			175,000
Raleigh, Mississippi		Warehouse			41,000
Birmingham, Alabama		Administrative office and building products manufacturing			181,000
Jackson, Mississippi		Building products manufacturing (vacant)			30,000
Bourbonnais, Illinois		Building products manufacturing			280,000	*
Lakeland, Florida		Building products manufacturing			100,000
Fontana, California		Building products manufacturing			80,000
Dayton, Texas		Building products manufacturing			45,000
Orem, Utah		Building products manufacturing			88,000
North Kansas City, Missouri		Building products manufacturing			26,000	*
Lafayette, Louisiana		Building products manufacturing			34,000
Houston, Texas		Building products manufacturing			25,000
Visalia, California		Building products manufacturing			80,000
Burlington, Canada		Building products manufacturing			78,000	*
Surrey, British Columbia		Building products manufacturing			41,000	*
Greenville, South Carolina		Warehouse/Distribution			18,000	*
Houston, Texas		Warehouse/Distribution			20,000	*
Denver, Colorado		Warehouse/Distribution			600	*
Seattle, Washington		Warehouse/Distribution			9,600	*
Gardena, California		Warehouse/Distribution			25,000	*
Montreal, Quebec		Warehouse/Distribution			15,000	*
Birmingham, Alabama		Building products manufacturing			12,000	*
Birmingham, Alabama		Administrative office			22,000
Wilmington, Delaware		Administrative office and building products manufacturing			27,000	*
Dayton, Texas		Building products manufacturing			13,900
Burnsville, Minnesota		Administrative office			28,518
Orrick, Missouri		Administrative office and building products manufacturing			127,000
Miraloma, California		Administrative office, building products manufacturing and warehouse			13,164
Hartlepool, England		Administrative office and building products manufacturing			258,907	*
Hanover, Germany		Administrative office and building products manufacturing			81,453	*
Pozan, Poland		Sales office and warehouse			3,120	*
Quebec, Canada		Administrative office and building products manufacturing			32,172
Ontario, Canada		Administrative office and building products manufacturing			28,542	*
Worcestershire, England		Sales office			18,151	*
Youngstown, Ohio		Administrative office and building products manufacturing			32,424
Fife, Washington		Administrative office and building products manufacturing			324,220
Portland, Oregon		Administrative office and building products manufacturing			10,000
Stockton, California		Administrative office and building products manufacturing			318,320
Naperville, Illinois		Administrative office and building products manufacturing			3,500	*
Manhattan, Kansas		Administrative office and building products manufacturing			192,000
Junction City, Kansas		Warehouse			20,000

Item 3. Legal Proceedings

From time to time, the Company is named a defendant in legal actions arising out of the normal course of business. The Company is not a party to any pending legal proceeding the resolution of which the management of the Company believes will have a material adverse effect on the Company’s results of operations or financial condition or to any other pending legal proceedings other than ordinary, routine litigation incidental to its business. The Company maintains liability insurance against risks arising out of the normal course of business.

Item 4. Submission of Matters to a Vote of Security Holders

No matters were submitted to a vote of security holders during the fourth quarter of the year ended December 31, 2007.

PART II

Item 5. Market for Common Equity and Related Stockholder Matters

As of December 31, 2007, there were 130 shareholders of record of the Company’s common stock. However, the Company believes that it has a significantly higher number of shareholders because of the number of shares that are held by nominees.

The Company’s common stock is traded in the over-the-counter market and quoted on the NASDAQ Stock Exchange — Global Select Market (“NASDAQ”) under the symbol “ROCK.” The following table sets forth the high and low sale prices per share for the Company’s common stock for each quarter of 2007 and 2006 as reported on the NASDAQ Stock Exchange.

		2007								2006
		High				Low				High				Low
Fourth Quarter		$	20.01			$	13.01			$	25.48			$	20.77
Third Quarter		$	23.44			$	17.63			$	29.48			$	22.12
Second Quarter		$	23.96			$	20.60			$	32.72			$	22.91
First Quarter		$	25.59			$	20.85			$	29.83			$	22.91

The Company declared dividends of $.10 per share in the first quarter of 2007 and $.05 per share in each of the second, third and fourth quarters of 2007 and $.05 per share in each of the first, second, and third quarters of 2006.

Cash dividends are declared at the discretion of the Company’s Board of Directors. The Board of Directors reviews the dividend quarterly and establishes the dividend rate based upon such factors as the Company’s earnings, financial condition, capital requirements, debt covenant requirements and/or other relevant conditions. Although the Company expects to continue to declare and pay cash dividends on its common stock in the future if earnings are available, the Company cannot assure that either cash or stock dividends will be paid in the future or that, if paid, the dividends will be paid in the same amount or at the same frequency as paid in the past.

The following table summarizes information concerning securities authorized for issuance under the Company’s stock option plans:

Number of securities

Number of securities

remaining available for

to be issued upon

Weighted-average

future issuance under

exercise of

exercise price of

equity compensation

Plan category

outstanding options

outstanding options

plans (1)

Equity compensation plans approved by security holders

522,820

$

18.84

1,213,071

Total

522,820

$

18.84

1,213,071

PERFORMANCE GRAPH

The performance graph shown below compares the cumulative total shareholder return on the Company’s common stock, based on the market price of the common stock, with the total return of the S&P SmallCap 600 Index and the S&P SmallCap 600 Industrials Index for the five-year period ended December 31, 2007. The comparison of total return assumes that a fixed investment of $100 was invested on December 31, 2002 in common stock and in each of the foregoing indices and further assumes the reinvestment of dividends. The stock price performance shown on the graph is not necessarily indicative of future price performance.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
Among Gibraltar Industries Inc., The S&P Smallcap 600 Index
And The S & P SmallCap 600 Industrials

Item 6. Selected Financial Data

(in thousands, except per share data)

		Year Ended December 31,
		2007				2006				2005				2004				2003
Net sales		$	1,311,818			$	1,233,576			$	972,515			$	764,534			$	674,503
Income from operations			81,288				119,373				82,391				65,180				56,714
Interest expense			31,887				25,897				16,854				7,461				9,701
Income before income taxes			50,616				80,431				65,803				62,565				47,698
Income taxes			19,512				30,257				25,215				24,384				18,839
Income from continuing operations			31,104				50,174				40,588				38,181				28,859
Income from continuing operations per share – Basic		$	1.04			$	1.69			$	1.37			$	1.30			$	1.20
Weighted average shares outstanding-Basic			29,879				29,712				29,608				29,362				24,143
Income from continuing operations per share-Diluted		$	1.03			$	1.67			$	1.36			$	1.29			$	1.18
Weighted average shares outstanding-Diluted			30,111				30,006				29,810				29,596				24,387
Cash dividends declared per common share		$	.250			$	.150			$	.200			$	.146			$	.117
Current assets		$	440,475			$	455,780			$	424,004			$	379,607			$	249,450
Current liabilities			134,225				124,415				157,248				137,352				98,756
Total assets			1,281,408				1,152,868				1,205,012				957,701				777,743
Total debt			488,609				400,553				461,513				308,139				239,850
Shareholders’ equity			567,760				550,228				494,025				453,743				394,181
Capital expenditures		$	18,752			$	21,702			$	17,330			$	19,736			$	15,286
Depreciation			26,577				21,793				16,872				14,844				13,354
Amortization			6,480				4,913				2,782				1,232				728

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the Company’s consolidated financial statements and notes thereto included in Item 8 of this Form 10-K.

Overview

The consolidated financial statements present the financial condition of the Company as of December 31, 2007 and 2006 and the consolidated results of operations and cash flows of the Company for the years ended December 31, 2007, 2006 and 2005.

We are a leading manufacturer, processor and distributor of residential and commercial building products and processed metal products for industrial applications. We serve numerous customers in a variety of industries in all 50 states, Canada, Mexico, Europe, Asia, and Central and South America. We operate 81 facilities in 27 states, Canada, England, Germany, Poland and China.

During 2007, the residential building market in the United Sates experienced a severe decline to approximately 1.3 million units in 2007 from 1.8 million units in 2006, a 28% decrease in volume. This decrease in activity had a significant impact on the profitability of our building products segment. 2007 also saw a decrease in the domestic production of automobiles, which caused a reduction in volumes in a portion of our processed metals segment. This decrease in volume caused a reduction in the margins in this segment.

As part of our continuing evaluation of our businesses, during 2007 we determined that both our steel service center and cabinet manufacturing businesses no longer provided strategic fit with our long-term growth and operational objectives. In August 2007, we sold certain assets of our bath cabinet manufacturing business and committed to a plan to sell the remaining assets of this business. In September 2007, we committed to a plan to dispose of the assets of our steel service center business. During the third and fourth quarters of 2007, we sold the majority of the assets of these businesses and expect to complete the disposal of assets in 2008. The results of both of these businesses have been classified as discontinued operations in our consolidated financial statements.

We continued to strengthen our business through the acquisition of three businesses with complimentary market positions in 2007. In March 2007, we acquired the stock of Dramex, a manufacturer, marketer and distributor of a diverse line of expanded metal products through its locations in the United States, Canada and England, In April 2007, we acquired certain assets and liabilities of Noll, a manufacturer, marketer and distributor of products for the building, HVAC and lawn and garden components of the building products market through its locations in California, Washington and Oregon. In August 2007, we acquired the stock of Florence, a Kansas manufacturer of storage solutions, including mail and package delivery products.

Segments

We operate in two reportable segments—Building Products and Processed Metal Products.

	•		Building Products. We process sheet steel and other materials to produce over 5,000 building and construction products, including mailboxes, ventilation products, structural connectors, bar grating, metal lath and expanded metal. We sell these products primarily to major retail home centers, such as The Home Depot, Lowe’s, Menards, metal service centers, wholesalers and contractor suppliers.
	•		Processed Metal Products. We produce a wide variety of cold-rolled strip steel products and powdered metal products. In this segment, we primarily serve the automotive industry’s leaders, such as General Motors, Ford, and Honda, as well as the automotive supply, power and hand tool industries, the Royal Canadian Mint, and other industries.

The following table sets forth our net sales from continuing operations by reportable segment for the years ended December 31, 2007, 2006 and 2005.

		Year ended December 31,
(Dollars in thousands)		2007				2006				2005
Statement of income data:
Net sales
Building products		$	929,022			$	862,287			$	604,698
Processed metal products			382,796				371,289				367,817
Total consolidated net sales		$	1,311,818			$	1,233,576			$	972,515

We also hold an equity position in a pickling joint venture, which is included in our Processed Metal Products segment.

In December 2006, we determined that our investment in Gibraltar DFC, a joint venture, was other than temporarily impaired and recognized a $12.9 million charge to write-off our investment in this joint venture.

Results of Operations

The following table sets forth selected results of operations data as percentages of net sales:

		Fiscal year ended
		December 31,
		2007				2006				2005
Net sales			100.0	%			100.0	%			100.0	%
Cost of sales			82.5				79.2				80.6
Gross profit			17.5				20.8				19.4
Selling, general and administrative expense			11.3				11.1				10.9
Income from operations			6.2				9.7				8.5
Interest expense			2.4				2.1				1.7
Equity in partnerships’ (income) loss (1)			(0.1	)			1.1				(0.0	)
Income before taxes			3.9				6.5				6.8
Provision for income taxes			1.5				2.5				2.6
Income from continuing operations			2.4				4.1				4.2
Discontinued operations, net of taxes (2)			(1.4	)			0.5				0.3
Net income			1.0	%			4.6	%			4.5	%

Year Ended December 31, 2007 Compared to Year Ended December 31, 2006

Consolidated

Net sales increased by $78.2 million, or 6.3% to $1,311.8 million in 2007, from $1,233.6 million in 2006. The increase in net sales was attributable to the acquisition of EMC in November 2006, Noll in April 2007, Florence in August 2007 and Dramex in March 2007 which provided an increase of $156.0 million in net sales in 2007. The decrease in net sales excluding the effect of these acquisitions was the result of sales declines in our historic building products business, the result of volume decreases due to the downturn in the new build housing market, partially offset by a slight increase from our processed metals business, primarily a function of higher copper costs causing an increase in selling price.

Cost of sales increased $105.6 million, or 10.8%, to $1,082.4 million in 2007 from $976.8 million in 2006. The increase was due to higher sales volumes due to acquisitions noted above, which caused an increase in cost of sales of $128.4 million in 2007. The $22.8 million decrease in cost of sales for the remainder of the business was the result of lower sales from our historic businesses, as noted above. Cost of sales as a percentage of net sales increased to 82.5% in 2007, from 79.2% in 2006. The decrease in gross margin is attributable to lower volumes at our historic building products businesses, which are not as efficient at lower volumes, and higher material and freight costs as a percentage of sales in 2007 compared to 2006.

Selling, general and administrative expenses increased approximately $10.7 million, or 7.8%, to $148.1 million in 2007, from $137.4 million in 2006. The acquisitions noted above caused an increase of $15.2 million in 2007; excluding the effect of the acquisitions, selling, general and administrative costs decreased $4.4 million, or 3.2%. Selling, general and administrative expense as a percentage of net sales increased 0.2%, to 11.3% in 2007 from 11.1% in 2006, due mainly to higher compensation costs.

As a result of the above, income from operations decreased by approximately $38.1 million, to $81.3 million in 2007 from $119.4 million in 2006.

Interest expense increased 23.1% or $6.0 million, to $31.9 million in 2007 from $25.9 million in 2006. The increase in interest was the result of higher average borrowings in 2007.

Equity in income (loss) of partnerships and other income increased by $14.2 million in 2007. This increase was due mainly to the impairment of our investment in Gibraltar DFC Strip Steel, LLC, a joint venture, in December 2006. During December 2006, the Company determined that its investment in this joint venture was other than temporarily impaired, and recognized a $12.9 million charge related to the joint venture. The remaining increase is the result of not incurring losses from this joint venture during 2007.

Income taxes related to continuing operations for 2007 approximated $19.5 million based upon an effective tax rate of 38.5% versus 37.6% in 2006. The increase in the effective tax rate during 2007 was the result a higher proportion of permanently non-deductible expenses as a percentage of pretax income.

Loss from discontinued operations increased $25.0 million, to $17.9 million in 2007, from income from discontinued operations of $7.1 million in 2006. The loss in the current year was a result of the liquidation of our steel service center and bath cabinet manufacturing businesses.

Segment Information

Building products. Net sales increased 7.7% or $66.7 million, to $929.0 million in 2007 from $862.3 million in 2006. The increase was the result of the acquisitions discussed above, which provided an additional $156.0 million. The decrease in net sales excluding the effect of the acquisitions noted above was the result of sales declines in our historic building products business, the result of volume decreases due to the downturn in the new build housing market.

Income from operations decreased $36.1 million, or 28.3%, to $91.6 million in 2007 from $127.7 million in 2006. Operating margin decreased to 9.9% in 2007 from 14.8% in 2006. The decrease in operating margin was mainly the result of lower volumes in our historic businesses, which are not as efficient at lower volumes, and higher material and freight costs as a percentage of sales.

Processed metal products. Net sales increased $11.5 million, or 3.1%, to $382.8 million in 2007 from $371.3 million in 2006. The increase in net sales was the result of increased material costs that resulted in higher selling prices, which offset volume decreases.

Income from operations declined $3.8 million, or 15.0%, to $21.8 million in 2007 from $25.6 million in 2006. Income from operations as a percentage of net sales declined to 5.7% in 2007 from 6.9% in 2006. The decrease was mainly the result of higher material costs.

Year Ended December 31, 2006 Compared to Year Ended December 31, 2005

Consolidated

Net sales increased by $261.1 million, or 26.8% to $1,233.6 million in 2006, from $972.5 million in 2005. The increase in net sales was attributable to the acquisition of AMICO in October 2005, which provided an additional $270.1 million in net sales in 2006, and the acquisition of EMC in November 2006, which provided $10.4 million in net sales in 2006. The decrease in net sales excluding the effect of these acquisitions was the result of sales declines in our historic building products business, the result of volume decreases due to softening in the domestic automotive and new build housing markets, along with the reduction in severe weather during 2006 as compared to 2005, which drove volumes during 2005 at certain subsidiaries.

Cost of sales increased $192.6 million, or 24.6%, to $976.8 million in 2006 from $784.2 million in 2005. The increase was due to higher sales volumes due to acquisitions noted above. The acquisitions of AMICO in October 2005 and EMC in November 2006 added $211.9 million to cost of sales in 2006. The $19.2 million decrease in cost of sales for the remainder of the business was the result of product mix and lower material costs as a percentage of sales. Cost of sales as a percentage of net sales decreased to 79.2% in 2006, from 80.6% in 2005. The increase in gross margin is attributable mainly to lower material costs in the building products segment which more than offset higher material costs in the processed metals segment in 2006 compared to 2005.

Selling, general and administrative expenses increased approximately $31.5 million, or 29.7%, to $137.4 million in 2006, from $105.9 million in 2005. The acquisition of AMICO in October 2005 and EMC in November 2006 caused $22.0 million of the increase in 2006. Selling, general and administrative expense as a percentage of net sales increased 0.2%, to 11.1% in 2006 from 10.9% in 2005, due mainly to higher legal costs associated with acquisition activities and higher health insurance costs.

As a result of the above, income from operations increased by approximately $37.0 million, to $119.4 million in 2006 from $82.4 million in 2005.

Interest expense increased 53.7% or $9.0 million, to $25.9 million in 2006 from $16.9 million in 2005. The increase in interest was the result of higher average borrowings in 2006 and higher weighted average interest rates.

Equity in income (loss) of partnerships and other income decreased by $13.3 million in 2006. This decline was due mainly to the impairment of our investment in Gibraltar DFC Strip Steel, LLC, a joint venture. During December 2006, the Company determined that its investment in this joint venture was other than temporarily impaired, and recognized a $12.9 million charge related to the joint venture.

Income taxes related to continuing operations for 2006 approximated $30.3 million based upon an effective tax rate of 37.6% versus 38.3% in 2005. The decrease in the effective tax rate during 2006 was the result of a benefit from a permanent difference and a reduction in state income taxes in Texas.

Income from discontinued operations increased $4.2 million, to $7.1 million in 2006, from $2.9 million in 2005.

Segment Information

Building products. Net sales increased 42.6% or $257.6 million, to $862.3 million in 2006 from $604.7 million in 2005. The increase was the result of the acquisitions of AMICO in October 2005 and EMC in November 2006, which provided an additional $280.5 million. The decrease in net sales excluding the effect of these acquisitions was the result of the factors described under “Consolidated” above.

Income from operations increased $46.1 million, or 56.6%, to $127.7 million in 2006 from $81.6 million in 2005. Operating margin increased to 14.8% in 2006 from 13.5% in 2005. The increase in operating margin was mainly the result of lower material costs as a percentage of sales, partially offset by an increase in amortization expense related to intangibles.

Processed metal products. Net sales increased $3.5 million, or 0.9%, to $371.3 million in 2006 from $367.8 million in 2005. The increase in net sales was primarily the result of increased copper costs which resulted in higher selling prices.

Income from operations declined $3.0 million, or 9.1%, to $25.6 million in 2006 from $28.6 million in 2005. Income from operations as a percentage of net sales declined to 6.9% in 2006 from 7.8% in 2005. The decrease was the result of higher material costs and freight charges, partially offset by lower profit sharing expenses.

Critical Accounting Policies

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make decisions based upon estimates, assumptions, and factors it considers relevant to the circumstances. Such decisions include the selection of applicable principles and the use of judgment in their application, the results of which could differ from those anticipated.

A summary of the Company’s significant accounting policies are described in Note 1 of the Company’s consolidated financial statements included in Item 8 of this Form 10-K.

Our most critical accounting policies include:

	•		valuation of accounts receivable, which impacts selling, general and administrative expense;
	•		valuation of inventory, which impacts cost of sales and gross margin;
	•		revenue recognition, which impacts net sales, gross margin and net income;
	•		the allocation of the purchase price of our acquisition-related assets and liabilities, which affects our depreciation and amortization costs; and
	•		the assessment of recoverability of goodwill and other intangible and long-lived assets, which impacts write-offs of goodwill, intangibles and long-lived assets.

Management reviews the estimates, including the allowance for doubtful accounts and inventory reserves on a regular basis and makes adjustments based on historical experience, current conditions and future expectations. Management believes these estimates are reasonable, but actual results could differ from these estimates.

Valuation of accounts receivable. Our accounts receivable represent those amounts that have been billed to our customers but not yet collected. We record an allowance for doubtful accounts based on the portion of those accounts receivable that we believe are potentially uncollectible based on various factors, including historical experience, creditworthiness of customers and current market and economic conditions. If the financial condition of customers were to deteriorate, resulting in impairment of their ability to make payments, additional allowances may be required. Changes in judgments on these factors could impact the timing of costs recognized.

Valuation of inventories. We state our inventories at the lower of cost or market. We determine the cost basis of our inventory on a first-in-first-out basis using either actual costs or a standard cost methodology that approximates actual cost. We regularly review inventory on hand and record provisions for obsolete and slow-moving inventory based on historical and current sales trends. Changes in product demand and our customer base may affect the value of inventory on hand, which may require higher provisions for obsolete inventory.

Revenue recognition. We recognize revenue when all of the following have occurred: products are shipped or service is provided, the customer takes ownership and assumes the risk of loss, collection of the relevant receivable is probable, persuasive evidence of an arrangement exists and the sales price is fixed or determinable. We treat sales returns, allowances and customer incentives as reductions to sales, and we accrue for those items based on historical experience and current estimates of future sales, revising our estimates throughout the year when necessary.

Allocation to purchase price of acquired assets and liabilities. When we acquire a new business, we must allocate the purchase price to the assets acquired and the liabilities assumed in the transaction at their respective estimated fair market values. We record any premium over the fair market value of the net assets acquired as goodwill. The allocation of the purchase price involves judgments and estimates both in characterizing the assets and in determining their fair market value. The way we characterize the assets has important implications, as long-lived assets, for example, are depreciated or amortized, whereas goodwill is tested annually for impairment, as explained below. With respect to determining the fair market value of assets, the most difficult estimations of individual fair market values are those involving long-lived assets, such as property, plant and equipment and identified intangible assets. We use all available information to make these fair market value determinations and, for major business acquisitions, engage an independent valuation specialist to assist in the fair market value determination of the acquired long-lived assets. Due to the subjectivity inherent in determining the estimated fair market value of long-lived assets and the significant number of business acquisitions that we have completed, we believe that the recording of acquired assets and liabilities is a critical accounting policy.

Depreciation, amortization and impairment testing of long-lived assets. We depreciate long-lived assets with estimated useful lives over those useful lives. We amortize intangible assets with estimable useful lives (which consist primarily of acquired customer lists, non-competition agreements and unpatented technology) over those estimated useful lives. The specific lives are disclosed in the notes to the consolidated financial statements included in Item 8 herein.

We test long-lived assets for impairment when events or changes in circumstances indicate that the carrying amount of those assets may not be recoverable and exceeds their fair market value. This circumstance exists if the carrying amount of the asset in question exceeds the sum of the undiscounted cash flows expected to result from the use of the asset. The impairment loss would be measured as the amount by which the carrying amount of a long-lived asset exceeds its fair market value as determined by discounted cash flow method or in the case of negative cash flow, an independent market appraisal of the asset.

Goodwill and other indefinite-lived intangible asset impairment testing. We test goodwill annually for impairment (or more often if indicators of impairment exist) at the reporting unit level by comparing the fair market value of the reporting unit with its carrying value. A reporting unit is either the same as, or one level below, an operating segment. We have more reporting units than operating segments, and our reporting units may change over time. The primary valuation method for determining the fair market value of the reporting unit is a discounted cash flow analysis. If the goodwill is indicated as being impaired (i.e., the fair market value of the reporting unit is less than the carrying amount), the fair market value of the reporting unit is then allocated to its assets and liabilities in a manner similar to a purchase price allocation in order to determine the implied fair value of the reporting unit goodwill. This implied fair value of the reporting unit goodwill is then compared with the carrying amount of the reporting unit goodwill, and, if it is less, we then recognize an impairment loss.

The Company tests its indefinite-lived assets for impairment on an annual basis during the fourth quarter, or more frequently if an event occurs or circumstances change that indicate that the fair value of an indefinite-lived intangible asset could be below its carrying amount. The impairment test consists of comparing the fair value of the indefinite-lived intangible asset, determined using discounted cash flows, with its carrying amount. An impairment loss would be recognized for the carrying amount in excess of its fair value.

Liquidity and Capital Resources

The Company’s principal capital requirements are to fund its operations, including working capital; to purchase new facilities and fund improvements to its existing facilities; to purchase new and maintain existing machinery and equipment; and to fund acquisitions.

We regularly consider various strategic business opportunities including acquisitions. We evaluate such potential acquisitions on the basis of our ability to enhance our existing products, operations, or capabilities, as well as provide access to new products, markets and customers. If we enter into any future acquisition transaction, we may finance that acquisition through a number of sources, including internally available cash resources, new debt financing, the issuance of equity securities or any combination of the above.

Working capital

During 2007, our Company’s working capital (inclusive of the impact of working capital acquired from acquisitions of Florence, Noll and Dramex) decreased by approximately $24.8 million, or 7.5%, to approximately $306.5 million at December 31, 2007 from $331.4 million at December 31, 2006. This decrease in working capital was primarily the result of a decrease in the assets of discontinued operations of $35.8 million, a decrease of $7.2 million in inventories and increases in accounts payable of $20.5 million, partially offset by an increase in cash and cash equivalents of $21.8 million, a $9.2 million reduction in accrued expenses and an increase in accounts receivable and other current assets of $6.1 million.

Our working capital also typically undergoes seasonal variations. Our net sales are generally lower in the fourth quarter than in the third quarter, and we usually begin the fourth quarter with lower inventory and higher accounts payable. To address these fluctuations, we generally increase working capital in the second and third quarters, and working capital then generally decreases in the fourth quarter. At December 31, 2006, our working capital was higher than normal due to a reduction in sales during the fourth quarter of 2006 that reduced the rate of liquidation of our inventories that we would normally expect.

Cash flows

Operating activities. Net cash provided by continuing operations for the year ended December 31, 2007 was approximately $136.5 million compared to net cash used in continuing operations of approximately $3.9 million for the year ended December 31, 2006. Net cash provided by continuing operations for the year ended December 31, 2007 was primarily the result of decreases in inventories of $42.7 million, depreciation and amortization of $33.1 million, income from continuing operations of $31.1 million, decreases in accounts receivable of $19.2 million, increases in accounts payable of $10.2 million and a $5.3 million increase in deferred taxes, partially offset by a decrease in accrued expenses and other current liabilities of $11.1 million. Net cash used in continuing operations for the year ended December 31, 2006 was primarily the result of increases in inventories of $34.8 million, decreases in accounts payable and accrued expenses of $31.0 million, and decreases of deferred taxes of $29.0 million, partially offset by net income from continuing operations of $50.2 million, depreciation and amortization of $26.7 million, and equity in partnerships’ loss of $13.9 million. The cash generated from inventories during 2007 was the result of two items. We ended 2006 with higher than normal inventory levels and during 2007 we focused on reducing inventories with a goal of 60 days sales in inventory.

Investing activities. Net cash used in investing activities from continuing operations for the year ended December 31, 2007 was approximately $209.8 million, consisting primarily of the acquisitions of Florence, Noll and Dramex in the amount of $206.6 million, and capital expenditures of $18.8 million, partially offset by net proceeds of $11.9 million from the sale of certain assets of our steel service center and bath cabinet manufacturing businesses. Net cash provided by investing activities from continuing operations for the year ended December 31, 2006 was approximately $72.7 million, consisting primarily the net proceeds of the sale of our thermal processing and steel strapping businesses of $151.5 million, partially offset by the acquisitions of EMC, Home Impressions and the assets of Steel City in the amount of $57.4 million, and capital expenditures of $21.7 million.

Financing activities. Net cash provided by financing activities for the year ended December 31, 2007 was $72.9 million, consisting primarily of borrowings of long-term debt of $200.1 million, partially offset by payments of $119.6 million on long term debt and dividend payments of $6.0 million. Net cash used in financing activities for the year ended December 31, 2006 was $69.2 million, consisting primarily of repayments of long-term debt of $114.9 million and dividend payments of $6.0 million, partially offset by proceeds of $50.8 million under our revolving credit facility. The borrowing in 2007 was primarily used to fund acquisitions while the repayments were the result of cash flows from operations.

Senior credit facility and senior subordinated notes

We and our wholly-owned subsidiary Gibraltar Steel Corporation of New York are co-borrowers under the second amended and restated credit agreement dated August 31, 2007 with a syndicate of lenders providing for (i) a revolving credit facility with aggregate commitments of up to $375.0 million including a $50.0 million sub-limit for letters of credit and a swing line loan sub-limit of $20.0 million and (ii) a term loan in the original principal amount of $122.7 million. At December 31, 2007, outstanding borrowings under the revolving credit facility were $157.9 million, $16.4 million of letters of credit were outstanding and $200.7 million was available to be borrowed. Under the terms of this agreement, we are required to repay approximately $31.0 million on the term loan before March 30, 2008. During 2007, we borrowed $200.1 million and repaid $116.7 million on the revolving facility and made payments of $2.3 million on the term loan. At December 31, 2007, we had $121.6 million outstanding on the term loan.

The senior credit facility is guaranteed by each of our material domestic subsidiaries other than Gibraltar Steel Corporation of New York, which is a co-borrower. The senior credit facility and the related guarantees are secured by a first priority security interest (subject to permitted liens, as defined in the credit agreement) in substantially all the tangible and intangible assets of our Company and our material domestic subsidiaries, subject to certain exceptions, and a pledge of 65% of the voting stock of our foreign subsidiaries. The senior subordinated notes are guaranteed by each of our material domestic subsidiaries.

The credit agreement contains various affirmative and negative covenants customary for similar working capital facilities, including, but not limited to, several financial covenants. We must maintain a total funded debt to consolidated Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA, as defined in the credit agreement) ratio not to exceed 4.25 to 1.00. We must also maintain a senior funded debt to consolidated EBITDA ratio not to exceed 3.25 to 1.00. Our interest coverage ratio, defined as the ratio of consolidated EBITDA to consolidated interest expense, must not be less than 2.75 to 1.00, and our net worth must be at least $400.0 million plus 50% of cumulative net income in each fiscal quarter beginning with the quarter ended September 30, 2007. Consolidated EBITDA, as defined under our credit agreement, is not calculated in the same manner as under the senior subordinated notes.

The Company believes that availability of funds under its existing credit facility, together with the cash generated from operations, will be sufficient to provide it with the liquidity and capital resources necessary to support its principal capital requirements, including operating activities, capital expenditures, dividends and future acquisitions.

Off Balance Sheet Arrangements

The Company does not have any off balance sheet arrangements.

Contractual Obligations

The following table summarizes our company’s contractual obligations at December 31, 2007:

(Dollars in thousands)

		Payments due by period
						Less												More
						than												than
Contractual obligations		Total				1 year				1-3 years				3-5 years				5 Years
Variable rate debt		$	287,018			$	2,728			$	5,456			$	274,434			$	4,400
Interest on variable rate debt (1)			93,276				18,919				37,303				35,694				1,360
Fixed rate debt			201,591				227				286				—				201,078
Interest on fixed rate debt			131,363				16,611				33,189				33,178				48,385
Operating lease obligations			52,444				12,875				18,564				11,947				9,058
Pension and other post-retirement obligations			5,682				242				741				1,214				3,485
Employment agreements			2,310				1,210				1,100				—				—
Total (2)		$	773,684			$	52,812			$	96,639			$	356,467			$	267,766

Related Party Transactions

The Company entered into certain operating lease agreements, related to acquired operating locations and facilities, with the former owners of Construction Metals. These operating leases are considered to be related party in nature. Rental expense associated with these related party operating leases aggregated approximately $1,442,000 and $1,353,000 in 2007 and 2006, respectively.

Two members of our Board of Directors are partners in law firms that provide legal services to the Company. During 2007 and 2006, we incurred $2,217,000 and $1,869,000 for legal services from these firms, respectively. Of the amount incurred, $1,565,000 and $1,567,000 was expensed, and $652,000 and $302,000 was capitalized as acquisition costs and deferred debt issuance costs in 2007 and 2006, respectively. At December 31, 2007 and 2006, the Company had $185,000 and $171,000, respectively recorded in accounts payable for these law firms.

Recent Accounting Pronouncements

In June 2006, the FASB issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”or the “Interpretation”) which defines the threshold for recognizing the benefits of tax return positions in the financial statements as “more-likely-than-not” to be sustained by the taxing authority. “Uncertainty in income taxes,” as used in the title of the new Interpretation, refers to uncertainty about how some transactions will be treated under the tax law. This uncertainty leads to questions about whether tax positions taken or to be taken on tax returns should be reflected in the financial statements before they are finally resolved with the taxing authorities. FIN 48 applies to all tax positions, regardless of their level of uncertainty or the nature of the position. However, the Interpretation’s recognition and measurement requirements are likely to have the most impact on positions for which current or future deductions may be disallowed or reduced in a tax examination. The Interpretation applies to situations where the uncertainty is about the timing of the deduction, the amount of the deduction, or the validity of the deduction. FIN 48 is effective for fiscal years beginning after December 15, 2006 and we adopted this Interpretation during the first quarter of 2007. Adoption resulted in an increase of $750,000 in tax liabilities with a corresponding reduction in retained earnings.

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS 157”), which establishes a single authoritative definition of fair value, sets out a framework for measuring fair value, and requires additional disclosures about fair-value measurements.

SFAS 157 applies only to fair-value measurements that are already required or permitted by other accounting standards and is expected to increase the consistency of those measurements. SFAS 157 is effective for fair-value measures already required or permitted by other standards for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. We do not expect adoption of this standard will have a material impact upon our consolidated financial position or results of operations.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS 159”), which allows measurement of specified financial instruments, warranty and insurance contracts at fair value on a contract by contract basis, with changes in fair value recognized in earnings in each period. SFAS 159 is effective at the beginning of the fiscal year that begins after November 15, 2007, and will be effective for the Company in fiscal 2008. We do not expect that adoption of this standard will have a material impact upon our consolidated financial position or results of operations.

In December 2007, the FASB issued SFAS No. 141R “Business Combinations” (“SFAS 141R”), which requires most identifiable assets, liabilities, non-controlling interests and goodwill acquired in business combinations to be recorded at “full fair value”. SFAS 141R also requires that the direct costs of acquisitions be expensed as incurred, and that the estimated fair value of contingent consideration be recorded at the date of purchase, with changes in the estimated fair value recorded in the income statement. SFAS No. 141R is effective for fiscal years beginning after December 15, 2008, and will be effective for the Company in 2009. This standard may be adopted only on a prospective basis and may have a material impact upon our results of operations in periods where we incur direct acquisition costs.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

In the ordinary course of business, the Company is exposed to various market risk factors, including changes in general economic conditions, competition and raw materials pricing and availability. In addition, the Company is exposed to market risk, primarily related to its long-term debt. To manage interest rate risk, the Company uses both fixed and variable interest rate debt. The Company also entered into two interest rate swap agreements that converted a portion of its variable rate debt to fixed rate debt, one of which expired in 2007. At December 31, 2007, the Company had $57.5 million of revolving credit borrowings that were fixed rate debt pursuant to the remaining agreement.

The following table summarizes the principal cash flows and related interest rates of the Company’s long-term debt at December 31, 2007 by expected maturity dates. The weighted average interest rates are based on the actual rates that existed at December 31, 2007. The variable rate debt consists primarily of the revolving credit facility and term loan, of which $279.4 million is outstanding at December 31, 2007. A hypothetical 1% increase or decrease in interest rates would have changed the 2006 interest expense by approximately $2.0 million.

		(in thousands)
		2008				2009				2010				2011				2012				Thereafter				Total
Long-term debt (fixed)		$	227			$	214			$	72			$	—			$	—			$	201,078			$	201,591
Weighted average interest rate			8.25	%			8.25	%			8.25	%			8.25	%			8.25	%			8.25	%
Long-term debt (variable)		$	2,728			$	2,728			$	2,728			$	2,704			$	271,730			$	4,400			$	287,018
Weighted average interest rate			6.00	%			6.00	%			5.99	%			5.96	%			5.96	%			4.77	%
Interest rate swaps (notional amounts)		$	—			$	—			$	57,500			$	—			$	—			$	—			$	57,500
Interest pay rate			5.03	%			5.03	%			5.03	%			—				—				—
Interest receive rate			6.63	%			6.63	%			6.63	%			—				—				—

The fair value of the Company’s debt was $480.3 million at December 31, 2007.

Safe Harbor Statement

The Company wishes to take advantage of the Safe Harbor provisions included in the Private Securities Litigation Reform Act of 1995 (the “Act”). Certain information set forth herein contains forward-looking statements that are based on current expectations, estimates, forecasts and projections about the Company’s business, and management’s beliefs about future operations, results and financial position. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions. Statements by the Company, other than historical information, constitute “forward looking statements” within the meaning of the Act and may be subject to a number of risk factors. Factors that could affect these statements include, but are not limited to, the following: the impact of changing steel prices on the Company’s results of operations; changing demand for the Company’s products and services; and changes in interest or tax rates. In addition, such forward-looking statements could also be affected by general industry and market conditions, as well as general economic and political conditions.

Item 8.   Financial Statements and Supplementary Data

		Page Number
Financial Statements
Report of Independent Registered Public Accounting Firm			35
Consolidated Balance Sheets as of December 31, 2007 and 2006			36
Consolidated Statements of Income for the Years Ended December 31, 2007, 2006 and 2005			37
Consolidated Statements of Cash Flows for the Years Ended December 31, 2007, 2006 and 2005			38
Consolidated Statements of Shareholders’ Equity and Comprehensive Income for the Years Ended December 31, 2007, 2006 and 2005			39
Notes to Consolidated Financial Statements			40
Supplementary Data:
Quarterly Unaudited Financial Data			77

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders of Gibraltar Industries, Inc.

We have audited the accompanying consolidated balance sheets of Gibraltar Industries, Inc. as of December 31, 2007 and 2006, and the related consolidated statements of income, shareholders’ equity and comprehensive income, and cash flows for each of the three years in the period ended December 31, 2007. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Gibraltar Industries, Inc. at December 31, 2007 and 2006 and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2007, in conformity with U.S. generally accepted accounting principles.

As discussed in Note 1 to the consolidated financial statements, on January 1, 2006 the Company changed its method of accounting for stock-based compensation, on December 31, 2006 the Company changed its method of accounting for defined benefit pension and other postretirement benefits, and on January 1, 2007 the Company changed its method of accounting for uncertainty in income taxes.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Gibraltar Industries, Inc.’s internal control over financial reporting as of December 31, 2007, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 26, 2008 expressed an unqualified opinion thereon.

          /s/ Ernst & Young LLP

Buffalo, New York
February 26, 2008

Gibraltar Industries, Inc.
Consolidated Balance Sheets
(in thousands, except share and per share data)

		December 31, 2007				2006
Assets
Current assets:
Cash and cash equivalents		$	35,287			$	13,475
Accounts receivable, net			167,595				163,731
Inventories			212,909				220,119
Other current assets			20,362				18,099
Assets of discontinued operations			4,592				40,356
Total current assets			440,745				455,780
Property, plant and equipment, net			273,283				233,249
Goodwill			453,228				366,763
Acquired intangibles			96,871				62,366
Investments in partnerships			2,644				2,440
Other assets			14,637				14,307
Assets of discontinued operations			—				17,963
		$	1,281,408			$	1,152,868
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable		$	89,551			$	69,040
Accrued expenses			41,062				50,279
Current maturities of long-term debt			2,955				2,336
Liabilities of discontinued operations			657				2,760
Total current liabilities			134,225				124,415
Long-term debt			485,654				398,217
Deferred income taxes			78,071				70,981
Other non-current liabilities			15,698				9,027
Shareholders’ equity:
Preferred stock $.01 par value; authorized 10,000,000 shares; none outstanding			—				—
Common stock, $.01 par value; authorized 50,000,000 shares; issued 29,949,229 and 29,883,795 shares in 2007 and 2006, respectively			300				299
Additional paid-in capital			219,087				215,944
Retained earnings			337,929				332,920
Accumulated other comprehensive income (loss)			10,837				1,065
			568,153				550,228
Less: cost of 61,467 and 42,600 common shares held in treasury in 2007 and 2006, respectively			393				—
Total shareholders’ equity			567,760				550,228
		$	1,281,408			$	1,152,868

The accompanying notes are an integral part of these consolidated financial statements

Gibraltar Industries, Inc.
Consolidated Statements of Income
(in thousands, except per share data)

		Year Ended December 31,
		2007				2006				2005
Net sales		$	1,311,818			$	1,233,576			$	972,515
Cost of sales			1,082,423				976,835				784,207
Gross profit			229,395				256,741				188,308
Selling, general and administrative expense			148,107				137,368				105,917
Income from operations			81,288				119,373				82,391
Other expense (income)
Interest expense			31,887				25,897				16,854
Equity in partnerships’ (income) loss, impairment and other income			(1,215	)			13,045				(266	)
Total other expense			30,762				38,942				16,588
Income before taxes			50,616				80,431				65,803
Provision for income taxes			19,512				30,257				25,215
Income from continuing operations			31,104				50,174				40,588
Discontinued operations
(Loss) income from discontinued operations before taxes			(22,436	)			8,777				4,742
Income tax (benefit) expense			(4,556	)			1,682				1,858
(Loss) income from discontinued operations			(17,880	)			7,095				2,884
Net income		$	13,224			$	57,269			$	43,472
Net income (loss) per share — Basic
Income from continuing operations		$	1.04			$	1.69			$	1.37
(Loss) income from discontinued operations			(.60	)			.24				.10
Net income per share — Basic		$	.44			$	1.93			$	1.47
Weighted average shares outstanding — Basic			29,879				29,712				29,608
Net income (loss) per share — Diluted
Income from continuing operations		$	1.03			$	1.67			$	1.36
(Loss) income from discontinued operations			(.59	)			.24				.10
Net income per share — Diluted		$	.44			$	1.91			$	1.46
Weighted average shares outstanding—Diluted			30,111				30,006				29,810

The accompanying notes are an integral part of these consolidated financial statements

Gibraltar Industries, Inc.
Consolidated Statements of Cash Flows
(in thousands)

		Year Ended December 31,
		2007				2006				2005
CASH FLOWS FROM OPERATING ACTIVITIES
Net income		$	13,224			$	57,269			$	43,472
Income from discontinued operations			(17,880	)			7,095				2,884
Income from continuing operations			31,104				50,174				40,588
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization			33,057				26,706				19,654
Provision for deferred income taxes			5,283				(28,953	)			(3,359	)
Equity in partnerships’ loss (income)			(911	)			13,884				908
Distributions from partnerships’ income			712				1,149				1,152
Stock compensation expense			2,886				2,672				1,504
Tax benefit from exercise of stock options			—				—				281
Other non-cash adjustments			177				750				74
(Decrease) increase in cash resulting from changes in (net of acquisitions):
Accounts receivable			19,204				434				8,452
Inventories			42,668				(34,839	)			35,791
Other current assets and other assets			3,258				(4,799	)			(450	)
Accounts payable			10,184				(23,404	)			3,568
Accrued expenses and other non-current liabilities			(11,112	)			(7,627	)			7,040
Net cash provided by (used in) continuing operations			136,510				(3,853	)			115,203
Net cash provided by (used in) discontinued operations			22,303				(9,411	)			15,796
Net cash provided by (used in) operating activities			158,813				(13,264	)			130,999
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions, net of cash acquired			(206,608	)			(57,430	)			(271,031	)
Net proceeds from sale of business			11,859				151,487				42,594
Purchases of property, plant and equipment			(18,752	)			(21,702	)			(17,330	)
Net proceeds from sale of property and equipment			3,657				349				499
Net cash (used in) provided by investing activities from continuing operations			(209,844	)			72,704				(245,268	)
Net cash used in investing activities for discontinued operations			(69	)			(3,752	)			(4,996	)
Net cash (used in) provided by investing activities			(209,913	)			68,952				(250,264	)
CASH-FLOWS FROM FINANCING ACTIVITIES
Long-term debt payments			(119,558	)			(114,875	)			(643,298	)
Proceeds from long-term debt			200,074				50,829				796,568
Payment of deferred financing costs			(1,498	)			(768	)			(10,844	)
Payment of dividends			(5,971	)			(5,957	)			(5,941	)
Net proceeds from issuance of common stock			137				1,174				817
Tax benefit from equity compensation			121				355				––
Purchase of treasury stock			(393	)			––				––
Net cash provided by (used in) financing activities from continuing operations			72,912				(69,242	)			137,302
Net cash used in financing activities from discontinued operations			—				(1,500	)			(400	)
Net cash provided by (used in) financing activities			72,912				(70,742	)			136,902
Net increase (decrease) in cash and cash equivalents			21,812				(15,054	)			17,637
Cash and cash equivalents at beginning of year			13,475				28,529				10,892
Cash and cash equivalents at end of year		$	35,287			$	13,475			$	28,529

The accompanying notes are an integral part of these consolidated financial statements.

GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY AND COMPREHENSIVE INCOME
(in thousands, except per share data)

																										Accumulated Other												Total
		Comprehensive				Common Stock								Additional Paid-in				Retained				Unearned				Comprehensive				Treasury Stock								Shareholders’
		Income				Shares				Amount				Capital				Earnings				Compensation				Loss				Shares				Amount				Equity
Balance at January 1, 2005							29,666			$	297			$	209,765			$	242,585			$	(572	)		$	1,668				41			$	—			$	453,743
Comprehensive income (loss):
Net income		$	43,472				—				—				—				43,472				—				—				—				—				43,472
Other comprehensive income (loss):
Foreign currency translation adjustment, net of tax of $118			500				—				—				—				—				—				—				—				—				—
Minimum pension liability adjustment, net of tax of $60			95				—				—				—				—				—				—				—				—				—
Unrealized loss on interest rate swaps, net of tax of $246			(396	)			—				—				—				—				—				—				—				—				—
Other comprehensive income			199				—				—				—				—				—				199				—				—				199
Total comprehensive income		$	43,671
Issuance of restricted stock and restricted stock units							—				—				6,044				—				(6,044	)			—				—				—				—
Stock options exercised							69				1				816				—				—				—				—				—				817
Tax benefit from exercise of stock options							—				—				281				—				—				—				—				—				281
Cash dividends-$.20 per share							—				—				—				(5,941	)			—				—				—				—				(5,941	)
Earned portion of restricted stock							—				—				—				—				1,457				—				—				—				1,457
Forfeiture of restricted stock awards							—				—				(9	)			—				6				—				—				—				(3	)
Balance at December 31, 2005							29,735				298				216,897				280,116				(5,153	)			1,867				41				—				494,025
Cumulative effect of adoption of SFAS 123R							—				—				(5,153	)			—				5,153				—				—				—				—
Comprehensive income (loss):
Net income		$	57,269				—				—				—				57,269				—				—				—				—				57,269
Other comprehensive income (loss):
Foreign currency translation adjustment			(458	)			—				—				—				—				—				—				—				—				—
Minimum pension liability adjustment, net of tax of $20			33				—				—				—				—				—				—				—				—				—
Unrealized gain on interest rate swaps, net of tax of $369			592				—				—				—				—				—				—				—				—				—
Other comprehensive income			167				—				—				—				—				—				167				—				—				167
Total comprehensive income		$	57,436
Cumulative effect of adoption of SFAS 158, net of tax of $587							—				—				—				—				—				(969	)			—				—				(969	)
Issuance of restricted stock							28				—				—				—				—				—				—				—				—
Stock options exercised							121				1				1,173				—				—				—				—				—				1,174
Tax benefit from equity compensation							—				—				355				—				—				—				—				—				355
Cash dividends-$.15 per share							—				—				—				(4,465	)			—				—				—				—				(4,465	)
Equity compensation expense							—				—				2,672				—				—				—				—				—				2,672
Forfeiture of restricted stock awards							—				—				—				—				—				—				2				—				—
Balance at December 31, 2006							29,884				299				215,944				332,920				—				1,065				43				—				550,228
Cumulative effect of adoption of FIN48							—				—				—				(750	)			—				—				—				—				(750	)
Comprehensive income (loss):
Net income		$	13,224				—				—				—				13,224				—				—				—				—				13,224
Other comprehensive income (loss):
Adjustment for OPEB, net of tax of $227			365				—				—				—				—				—				—				—				—				—
Foreign currency translation adjustment			10,633				—				—				—				—				—				—				—				—				—
Minimum pension liability adjustment, net of tax of $25			39				—				—				—				—				—				—				—				—				—
Unrealized loss on interest rate swaps, net of tax of $735			(1,265	)			—				—				—				—				—				—				—				—				—
Other comprehensive income			9,772				—				—				—				—				—				9,772				—				—				9,772
Total comprehensive income		$	22,996
Issuance of restricted stock							6				—				—				—				—				—				—				—				—
Net settlement of restricted stock units							35				1				—				—				—				—				12				(276	)			(275	)
Stock compensation expense							—				—				2,886				—				—				—				—				—				2,886
Stock options exercised							24				—				136				—				—				—				5				(117	)			19
Tax benefit from equity compensation							—				—				121				—				—				—				—				—				121
Cash dividends-$.05 per share							—				—				—				(7,465	)			—				—				—				—				(7,465	)
Forfeiture of restricted stock awards							—				—				—				—				—				—				1				—				—
Balance at December 31, 2007							29,949			$	300			$	219,087			$	337,929			$	—			$	10,837				61			$	(393	)		$	567,760