Gibraltar Industries, Inc. (Nasdaq: ROCK), a leading manufacturer and provider of products and services for the renewable energy, conservation, residential, industrial and infrastructure markets, today reported its financial results for the three-month period ended March 31, 2020.

“We got off to the start we expected with continued strength in our growth businesses, particularly Renewable Energy & Conservation. Overall revenue increased 9.7%, of which 2.8% was organic, adjusted EPS up 68% and our backlog grew 39% to a record level of $258 million. Renewable Energy & Conservation revenue grew 22.8% from acquisitions and 17.5% organically. Residential Products revenue was flat despite additional product line simplification, and strength in Infrastructure revenue was offset by weakness in our Industrial markets.”

“I managed a business in Asia during the SARS crisis, and I learned the most important thing we can do in times like this is to support our families, both at home and at work, focus on what we can control and do it well, and be aggressive in our fight to collectively solve problems. Since the COVID-19 pandemic emerged, our team has demonstrated tremendous resiliency and fortitude in navigating through this challenge, and I am incredibly proud of our entire organization,” said President and Chief Executive Officer Bill Bosway. “We launched our initial pandemic task force in February and shortly thereafter began implementing new operating protocols to further support the health and safety of our team while operating our businesses deemed essential for our customers.”

“The impact to our businesses across Gibraltar has varied by end market with continued strength in our renewables and conservation and infrastructure businesses, consistent demand in our core Residential Products business, and slower demand in line with market in our Industrial business. We continue to meet our customers’ needs as our teams operate well along with our supply chain partners. Where we have competency, technology and capacity to do so, we have repurposed production lines to manufacture personal protective equipment (PPE), including masks, face shields, and hand sanitizer. We have distributed PPE to each of our team members across Gibraltar, and their family members, and we are also supporting local health care providers and first responders as needed. In addition, our team recently donated 3.3 million meals to food banks located in the communities where we operate. We will continue to do our best to be part of the solution.”

First Quarter 2020 Consolidated Results

Gibraltar reported the following consolidated results:

First quarter 2020 net sales increased 9.7% to $249.4 million versus 2019, in the range of the quarterly guidance provided in Gibraltar’s fourth quarter 2019 earnings release. Of the 9.7% increase, organic growth generated 2.8% driven by our Renewable Energy & Conservation segment, with inorganic growth generating 6.9% from our current quarter acquisitions of Thermo Energy Solutions and Delta Separations, along with Apeks Supercritical, which we acquired in the third quarter of 2019.

GAAP earnings increased 92.1% to $12.1 million, or $0.37 per share, while adjusted earnings increased 67.4% to $15.4 million, or $0.47 per share, the result of organic growth in Renewable Energy & Conservation, improved solar tracker field performance, favorable alignment of price to material costs, improved profitability in Residential Products, lower interest expense, and continuing benefits from operational excellence initiatives. The adjusted amounts for the first quarter of 2020 remove expenses of $0.10 per share, associated with senior leadership transition, acquisitions and restructuring. Special items removed from both the first quarters of 2020 and 2019 are further described in the appended reconciliation of adjusted financial measures.

First Quarter Segment Results

Renewable Energy & Conservation

For the first quarter, the Renewable Energy & Conservation segment reported:

Renewable Energy & Conservation revenues increased 40.3%, driven by organic growth of 17.5% and inorganic growth of 22.8% resulting from the acquisitions of Apeks Supercritical, Thermo Energy Solutions and Delta Separations. Segment backlog increased to record levels, up 58% versus 2019, the result of good market dynamics, participation gains, and the impact of recent acquisitions.

The segment’s core business continued to improve and deliver solid operating results driven by participation gains, volume leverage, productivity improvements, and favorable price/material cost alignment. The impact from acquisitions was consistent with expectations, and although early in the integration process, remains on track to deliver targeted returns in year three. Adjusted operating margin for the first quarter of 2020 and 2019 removes special charges for acquisition related items and restructuring initiatives, as further described in the appended reconciliation of adjusted financial measures.

Residential Products

For the first quarter, the Residential Products segment reported:

Residential Products revenue decreased slightly versus 2019 due to additional product line simplification initiatives, and less demand for our product lines sold directly to homeowners. Total revenue grew slightly with solid growth in our core roofing-related products and postal businesses before the impact of product line simplification. Adjusted operating margin increased due to strong execution, improved material cost alignment and 80/20 simplification initiatives. Adjusted operating margin for the first quarters of 2020 and 2019 removes the special charges for restructuring initiatives under the 80/20 program as further described in the appended reconciliation of adjusted financial measures.

Industrial & Infrastructure Products

For the first quarter, the Industrial & Infrastructure Products segment reported:

Segment revenue decreased nearly 10%, driven by lower demand for core industrial products as customers delayed purchases in a declining steel price environment. The infrastructure business delivered strong revenue growth driven by solid market activity, participation gains along with modest price increases, and continued to grow backlog.

The increase in adjusted operating margin was driven by strong performance in our infrastructure business and continued improvement in our industrial business, a more favorable alignment of price to material costs and continued execution on 80/20 profit improvement initiatives. Adjusted operating margin for the first quarters of 2020 and 2019 removes special charges for restructuring initiatives as further described in the appended reconciliation of adjusted financial measures.

Business Outlook

Gibraltar continues to accelerate growth and margin improvement through organic and inorganic investment in inherently attractive end markets that are vital to the economy’s core needs and less impacted by economic variables. Gibraltar’s higher growth businesses – renewable energy, commercial greenhouse growing, and processing – represented 39% of first quarter revenue and generated 58% growth in backlog as these markets continue to accelerate. The infrastructure business is also experiencing solid market growth and participation gains as reflected in backlog that has grown 13% over the prior year quarter.

The core residential building products businesses – ventilation, building accessories, and postal – delivered modest growth in the first quarter, but did see demand begin to slow after the end of the first quarter. The home improvement and industrial businesses have been the most impacted in today’s environment. Overall, Gibraltar expects demand in the immediate future to lag prior year until consumer confidence and spending improves.

Bill Bosway commented, “We will continue to enhance our revenue and income streams and, backed by the strength of our balance sheet, will remain laser-focused on executing our strategy, working to improve our business, and helping our team, customers, suppliers, and partners successfully navigate through today’s environment. We are leveraging our operating system – Business Systems, Portfolio Management, and Organization Development – to refine our business, strengthen the organization, and execute critical initiatives that will accelerate growth, profitability, asset utilization, and further improve ROIC.”

Bill Bosway concluded, “Right now, without more clarity, it is difficult to provide guidance for the second quarter and full-year 2020. Therefore, we are going to rescind our previous guidance. That being said, we do expect to deliver positive earnings and generate cash from operations throughout 2020. We will revisit the practice of providing guidance as we gain insight into the timing of recovery from the pandemic.”

First Quarter 2020 Conference Call Details

Gibraltar will host a conference call today starting at 9:00 a.m. ET to review its results for the first quarter of 2020. Interested parties may access the call by dialing (877) 407-3088 or (201) 389-0927 or by accessing the webcast at the Investor Info section of the Company’s website at www.gibraltar1.com. Presentation slides referenced during the conference call will be available for download on the website. A webcast replay of the conference call and a copy of the transcript will be available on the website following the call.

About Gibraltar

Gibraltar Industries is a leading manufacturer and provider of products and services for the renewable energy, conservation, residential, industrial, and infrastructure markets. With a three-pillar strategy focused on business systems, portfolio management, and organization and talent development, Gibraltar’s mission is to create compounding and sustainable value with strong leadership positions in higher growth, profitable end markets. Gibraltar serves customers primarily throughout North America. Comprehensive information about Gibraltar can be found on its website at www.gibraltar1.com.

Forward-Looking Statements

Certain information set forth in this news release, other than historical statements, contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that are based, in whole or in part, 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 are subject to a number of risk factors, uncertainties, and assumptions. Actual events, performance, or results could differ materially from the anticipated events, performance, or results expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from current expectations include, among other things, the impacts of COVID-19 on the global economy and on our customers, suppliers, employees, operations, business, liquidity and cash flows, other general economic conditions and conditions in the particular markets in which we operate, changes in customer demand and capital spending, competitive factors and pricing pressures, our ability to develop and launch new products in a cost-effective manner, our ability to realize synergies from newly acquired businesses, and our ability to derive expected benefits from restructuring, productivity initiatives, liquidity enhancing actions, and other cost reduction actions. Before making any investment decisions regarding our company, we strongly advise you to read the section entitled “Risk Factors” in our most recent annual report on Form 10-K which can be accessed under the “SEC Filings” link of the “Investor Info” page of our website at www.Gibraltar1.com. 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.

Adjusted Financial Measures

To supplement Gibraltar’s consolidated financial statements presented on a GAAP basis, Gibraltar also presented certain adjusted financial measures in this news release. Adjusted financial measures exclude special charges consisting of restructuring costs primarily associated with the 80/20 simplification initiative, senior leadership transition costs, debt repayment, acquisition related costs, and other reclassifications. These adjustments are shown in the reconciliation of adjusted financial measures excluding special charges provided in the supplemental financial schedules that accompany this news release. The Company believes that the presentation of results excluding special charges provides meaningful supplemental data to investors, as well as management, that are 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 the Company’s ongoing business operations. These adjusted measures should not be viewed as a substitute for the Company’s GAAP results and may be different than adjusted measures used by other companies.

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