Gibraltar Industries, Inc. (NASDAQ: ROCK), a leading manufacturer and distributor of products for building markets, today reported its financial results for the three months and six months ended June 30, 2010.

Sales from continuing operations in the second quarter of 2010 were $192 million, essentially unchanged from the second quarter of 2009. Income from continuing operations before special charges in the second quarter of 2010 increased to $4.1 million, or $0.13 per diluted share, an improvement from $2.2 million, or $0.07 per diluted share, for the second quarter of 2009. The increased profitability from the prior-year period was largely a result of a higher gross margin from improved operational efficiencies, along with lower interest costs and income taxes. After-tax special charges consisted of $0.3 million, or $0.01 per diluted share, of restructuring charges during the second quarter of 2010 and $0.1 million of restructuring charges during the prior year quarter. The effect of the restructuring charges above resulted in GAAP income from continuing operations of $3.8 million, or $0.12 per diluted share, for the second quarter of 2010 compared to $2.1 million, or $0.07 per diluted share, for the second quarter of 2009.

“Our second-quarter results are further evidence that the strategic transformation of Gibraltar through our many steps to aggressively restructure our operations, improve operational efficiency, cut costs, and reduce working capital and debt has put us in a position where we can be profitable even at these historically low levels of business activity in our major markets and we are well positioned to expand our margins on any incremental sales,” said Brian Lipke, Gibraltar’s Chairman and Chief Executive Officer. “After experiencing improved order levels in March and April, we expected even stronger results in the second quarter. However, the expiration of the federal tax credit for first-time homebuyers, persistently high unemployment, and weakening consumer confidence lowered activity levels in May and June.”

For the first six months of 2010, sales from continuing operations were $349 million, a decrease of 2% compared to the first half of 2009. The decrease was primarily due to a slow and uneven recovery in the residential building market and continued weakness in the non-residential building and industrial markets. In spite of lower sales in 2010, the Company generated a sharp increase in income from continuing operations before special charges to $2.6 million, or $0.09 per diluted share, compared to a loss of $3.6 million, or $0.12 per diluted share, in the first half of 2009. The improved results for the first six months of 2010 were a result of improved operating efficiencies, cost reductions, and better management of working capital. After-tax special charges amounted to $1.1 million, or $0.04 per diluted share, and $15.3 million, or $0.51 per diluted share, during the first six months of 2010 and 2009, respectively. These charges included intangible asset impairment and restructuring charges during both periods and accelerated interest expense of $0.9 million recognized during 2010. The effect of the special charges above resulted in GAAP income from continuing operations of $1.5 million, or $0.05 per diluted share, for the first half of 2010, compared to a loss of $18.9 million, or $0.63 per diluted share, for the first half of 2009.

Cash generated from operating activities continued to be strong during the six months ended June 30, 2010. The Company generated free cash flow of $26.4 million during the first half of 2010 consisting of cash flow generated by operations of $30.8 million less capital expenditures of $4.4 million. As a result of cash generated from operations and proceeds from the divestiture of its Processed Metal Products business, the Company had no outstanding draws against its revolver and a debt-to-capitalization ratio of 29% as of June 30, 2010. With cash on hand of nearly $27 million, the Company’s liquidity increased to $143 million.

“We have continued to strengthen our product leadership positions and gain share in targeted markets, both with existing customers and new accounts, in spite of historically low demand levels in our end markets. The building markets we serve are large and fragmented, with many of our customers looking to consolidate their supply base, and we have capitalized on numerous growth opportunities created by the turbulence of the last few years,” said Henning Kornbrekke, Gibraltar’s President and Chief Operating Officer.

“Consistent with our strategy of growing through product leadership positions and share gains, we also are driving to be a global low-cost producer. We have continued to keep a tight rein on spending and we are finding additional ways to further reduce our expenses, aided by our multi-year investments in ERP systems. We have also continued to improve our working capital efficiency by accelerating inventory turns which, in turn, has helped us generate free cash flow at a solid rate of 8% of sales in the first half of 2010. Looking ahead, we continue to move through the strongest seasonal period of the year for our business and we expect to generate income from continuing operations before special charges in the third quarter and for the full year, in spite of uncertainty as to when the markets we serve will recover. We remain confident in the long-term fundamentals and our strategic positioning in the markets we serve,” said Mr. Kornbrekke.

“During 2009 and in the first half of 2010, activity levels in the markets we serve – including residential and commercial building and industrial – were 45% of their peak four years earlier and only 52% of their average over the last 60 years, levels that we believe are unsustainably low over the long term. While market activity is at a low point, acquisitions continue to be an important part of our growth strategy and we continue to search for the right opportunities, targeting businesses and product lines that strengthen or expand our product leadership positions, further diversify our business mix, and improve our margins, earnings, and returns,” said Mr. Lipke.

As announced on February 1, 2010, Gibraltar completed its exit from the steel-processing business by selling the majority of the assets of its Processed Metal Products segment. The operating results of this business have been reclassified to discontinued operations in the financial results being reported.

Gibraltar has scheduled a conference call to review its results for the second quarter of 2010 tomorrow, August 5, 2010, starting at 9:00 am EST. A link to the call can be accessed on Gibraltar’s Web site, at http://www.gibraltar1.com. The presentation slides that will be discussed during the call are expected to be available on Wednesday, August 4, by 6:00 p.m. ET. The slides may be downloaded from the Conference Calls page of the Investor Info section of the Gibraltar Web site: http://www.gibraltar1.com/investors/index.cfm?page=48. If you are not able to participate in the call, you may listen to a replay or review a copy of the prepared remarks via the link above. Both will be available on the Gibraltar Web site shortly following the call. The conference call replay link, presentation slides, and prepared remarks will remain on the Gibraltar Web site for one year.

Gibraltar Industries serves customers in a variety of industries in all 50 states and throughout the world from facilities in the United States, Canada, England, Germany, and Poland. Gibraltar’s common stock is a component of the S&P SmallCap 600 and the Russell 2000® Index.

To supplement Gibraltar’s consolidated financial statements presented on a GAAP basis, Gibraltar also presented certain non-GAAP financial data in this news release. Non-GAAP financial data excluded special charges consisting of intangible asset impairment charges, restructuring charges primarily associated with the closing and consolidation of our facilities, and interest expense costs recognized as a result of our interest rate swap becoming ineffective. These non-GAAP adjustments are shown in the non-GAAP reconciliation of results excluding special charges provided in the financial statements that accompany this news release. We believe that presentation of results excluding special charges provides meaningful supplemental data to investors, as well as management, that is indicative of the Company’s core operating results and facilitates comparison of operating results across reporting periods as well as comparison with other companies. Special charges are excluded since they may not be considered directly related to our ongoing business operations. These non-GAAP measures should not be viewed as a substitute for our GAAP results, and may be different than non-GAAP measures used by other companies.

Information contained in this release, other than historical information, contains forward-looking statements and may be subject to a number of risk factors, uncertainties, and assumptions. Risk factors that could affect these statements include, but are not limited to, the following: the availability of raw materials and the effects of changing raw material prices on the Company’s results of operations; energy prices and usage; changing demand for the Company’s products and services; changes in the liquidity of the capital and credit markets; risks associated with the integration of acquisitions; and changes in interest or tax rates. In addition, such forward-looking statements could also be affected by general industry and market conditions, as well as general economic and political conditions. The Company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable law or regulation.