BUFFALO, N.Y. — Gibraltar Industries, Inc. (Nasdaq: ROCK), a manufacturer and distributor of products for residential and industrial markets, on Tuesday reported its financial results for the three- and nine-month periods ended Sept. 30.
The company also announced in a separate news release Tuesday that current President and Chief Operating Officer Frank Heard will become Gibralter's President and Chief Executive Officer on Jan. 1, 2015. Brian Lipke will remain as the company’s Chairman.
Gibraltar's net sales for the third quarter of 2014 increased 8 percent to $234.1 million, compared with $217.4 million for the third quarter of 2013. Third-quarter 2014 adjusted net income was $9.5 million, or $0.30 per diluted share, compared to $9.6 million and $0.31 per diluted share in the same period last year. The adjusted third-quarter 2014 results exclude special items with an after-tax net gain totaling $0.1 million resulting primarily from acquisition-related gains and exit activity costs related to business restructuring, with no net effect on earnings per share.
For the nine months ended Sept. 30, total net sales increased 3 percent to $660.1 million, from $638.7 million in the comparable 2013 period. Adjusted net income from continuing operations was $13.9 million, or $0.44 per diluted share, compared with $19.0 million and $0.61 per diluted share in Q3 2013. The adjusted results for the first nine months of 2014 exclude after-tax special charges resulting primarily from the net of acquisition-related gains and exit activity costs related to business restructuring, with no net effect on earnings.
“Gibralter's top-line for the third quarter was better than our guidance of $228 to $232 million,” said Chairman and Chief Executive Officer Brian Lipke. “The growth was driven by accelerating residential market demand for our new centralized postal storage solutions, as well as modestly higher sales volume in our roofing-related businesses. These factors contributed to stronger-than-anticipated revenues in our residential products segment. Net sales were also up, year-over-year, in our industrial and infrastructure products segment due to favorable volume and pricing in sales to energy and manufacturing-related customers.”
“We were able to deliver this revenue growth without any significant lift from our end markets, where demand remains generally soft,” Lipke said. “Our strategic growth initiatives in postal and residential air management products are putting Gibralter in a stronger position to control its own destiny, largely independent of underlying market trends such as housing starts.”
Residential Products: Third-quarter 2014 net sales in Gibralter's residential products segment increased 13 percent to $122.1 million, compared to $108.4 million in Q3 2013. Third-quarter 2014 adjusted operating margin increased 10 basis points year over year to 11.6 percent. Sales growth in this segment reflected strong demand for postal storage products. The segment’s equivalent adjusted operating margin reflected the benefit of higher volume, offset by price reductions provided in certain product lines and costs to build out manufacturing capacity.
Industrial and Infrastructure Products: Third-quarter 2014 net sales in Gibralter's Industrial & Infrastructure Products segment increased 3 percent to $112.0 million, compared to $109.0 million Q3 2013. Third-quarter 2014 adjusted operating margin improved over the second quarter but decreased 160 basis points year over year to 6.0 percent. Sales in the segment reflected improving volume in the industrial markets partially offset by lower shipment volumes to the transportation infrastructure market. This segment’s adjusted operating margin reflected a less profitable mix compared with the year-earlier quarter due to lower infrastructure shipments. Higher raw material costs also contributed to the reduced margins for the segment.
“Looking ahead near-term, we continue to expect demand in the fourth quarter to benefit from orders for postal products as overall end market demand becomes seasonally slower,” Gibralter President Frank Heard said. “This should lead to consolidated top-line growth of 4 percent to $193 to $198 million for the fourth quarter, with full-year revenues in the range of $853 to $858 million, a 3 percent increase compared with 2013.”