Q1 Revenue Increases 34%, including 10% Organic
and 24% Growth from Acquisitions
GAAP EPS Up 7% to $0.32, Adjusted EPS Expands
33% to $0.53
Strong Demand in Each Segment with Order
Backlog at Record $355 Million
Separating Renewable Energy and Conservation
Segment into Two Segments
Gibraltar Industries, Inc. (Nasdaq: ROCK), a leading
manufacturer and provider of products and services for the
renewable energy, residential, agtech, and infrastructure markets,
today reported its financial results for the three-month period
ended March 31, 2021. Reported results include TerraSmart, acquired
at the end of December 2020.
“Our first quarter results reflect solid execution and
participation gains across our markets while continuing to operate
through the pandemic as well as challenging weather across the
country and supply chain and labor availability dynamics,”
President and Chief Executive Officer Bill Bosway stated. “Revenue
increased 34%, adjusted EPS grew 33% and our order backlog
strengthened to $355 million. The integrations of TerraSmart and
Sunfig in our Renewables business are on plan, and we have made
significant progress with the integration of Thermo Energy
Solutions in our Agtech business. Overall, we are off to a solid
start in 2021.”
Segment Reporting Change
Beginning with the first quarter of 2021, Gibraltar will report
business results across four segments: Renewables, Residential,
Agtech, and Infrastructure, with Renewables and Agtech separated
out of the former Renewable Energy and Conservation Segment.
Commenting on this change, Mr. Bosway stated, “As we continue our
transformation, it is important we offer greater transparency to
our investors and stakeholders about our strategy and performance
of our core businesses and the markets we participate in. The
Renewables and Agtech businesses are creating significant
opportunities for us, and unique and focused investments are
required to accelerate growth in each business going forward.”
First Quarter 2021 Consolidated Results from Continuing
Operations
Net sales from continuing operations increased 33.5% to $287.6
million, driven by the Renewables and Residential segments, with
organic growth contributing 10.0% and recent acquisitions
23.5%.
GAAP earnings increased 6.1% to $10.5 million, or $0.32 per
share, and adjusted earnings increased 30.8% to $17.4 million, or
$0.53 per share, the result of organic growth and continued margin
expansion in the Renewables, Residential, and Infrastructure
segments, the TerraSmart acquisition, product and services mix,
good price/cost management, and 80/20 productivity initiatives.
Adjusted measures remove charges for restructuring initiatives,
acquisition-related items, senior leadership transition costs, and
other reclassifications, as further described in the appended
reconciliation of adjusted financial measures.
Below are first quarter 2021 consolidated results from
continuing operations:
Three Months Ended March 31,
$Millions, except EPS
GAAP
Adjusted
2021
2020
%
Change
2021
2020
%
Change
Net Sales
$287.6
$215.4
33.5%
$287.6
$215.4
33.5%
Net Income
$10.5
$9.9
6.1%
$17.4
$13.3
30.8%
Diluted EPS
$0.32
$0.30
6.7%
$0.53
$0.40
32.5%
First Quarter Segment Results
Renewables
The Renewables segment reflects Gibraltar’s business in the
solar energy market, and includes the design, engineering,
manufacturing and installation of solar racking and electrical
balance of systems. The results of the Renewables segment include
the acquisitions of TerraSmart and Sunfig, which were completed in
December 2020.
Revenue increased 80.8%, driven by the acquisitions of
TerraSmart and Sunfig, along with 2.1% organic growth across the
legacy business. As experienced during the fourth quarter of 2020,
project schedule movement and timing remained dynamic in the
quarter given record infection rates, some unique weather events,
and ongoing supply chain challenges. As well, given the extension
of the investment tax credit benefit, demand related to safe harbor
activity was significantly reduced in this quarter versus the
previous year. Despite this dynamic, both the legacy business and
TerraSmart we able to offset the safe harbor impact in the current
quarter. Overall, demand continued to build in both the legacy and
TerraSmart businesses with each making significant contributions to
increasing customer order backlog to $164 million, up 51% from
prior year, a record level for the combined business.
Adjusted operating margin performance in the legacy business
improved 50 basis points to 9.8% on continued 80/20 productivity in
manufacturing facilities, good execution across field operations,
and diligent price/cost management initiatives. TerraSmart
delivered performance as per the acquisition plan, integration is
on schedule, and it enters the second quarter with the necessary
momentum to deliver its full year margin plan, which is expected to
be accretive in 2021. GAAP margins reflect planned restructuring
and integration costs associated with the onboarding of
TerraSmart.
For the first quarter, the Renewables segment reported:
Three Months Ended March 31,
$Millions
GAAP
Adjusted
2021
2020
%
Change
2021
2020
%
Change
Net Sales
$85.5
$47.3
80.8%
$85.5
$47.3
80.8%
Operating Margin
-0.6%
9.2%
(980) bps
7.4%
9.3%
(190) bps
Residential
Revenue increased 35.6% with strong organic growth and
participation gains across all four Residential businesses despite
impact from challenging weather in February and supply chain
dynamics related to material availability and logistics. The
acquisition of Architectural Mailboxes in 2020 generated 9% of the
total growth in the quarter and integration remains on track.
Adjusted operating margin increased with solid execution of
80/20 productivity initiatives, price/cost management, and higher
volume which offset ongoing pandemic concerns, higher input costs,
labor availability, and logistics management challenges.
For the first quarter, the Residential segment reported:
Three Months Ended March 31,
$Millions
GAAP
Adjusted
2021
2020
%
Change
2021
2020
%
Change
Net Sales
$140.2
$103.4
35.6%
$140.2
$103.4
35.6%
Operating Margin
16.4%
13.3%
310 bps
16.4%
13.5%
290 bps
Agtech
The Agtech segment provides commercial greenhouse growing and
plant processing solutions including design, engineering,
manufacturing and installation of commercial greenhouses and
botanical oil extraction systems.
Revenue was down 5.1% driven by higher infection rates,
challenging weather, supply chain dynamics, and the timing of
regulatory approvals for cannabis production in a number recently-
legalized states. Collectively, customer project planning for new
production sites and the competition of existing sites were
impacted accordingly. Offsetting these headwinds was positive
activity in the produce market which continued to gain momentum and
in turn offset slower but improving market conditions in the
cannabis and hemp markets. Order activity and backlog continues to
support Gibraltar’s outlook for these markets’ recovery in the
second half of 2021. Segment backlog increased 5% sequentially to
$96 million, driven by an active produce market, and this trend is
expected to continue and drive positive results in 2021.
Adjusted operating margin was impacted by the overall mix and
timing of projects along with lower volumes in the processing
equipment business. The integration of Thermo Energy Solutions
(TES), Agtech’s core produce market business, is progressing well
despite the continued closure of the US-Canadian border. The
majority of the lower margin projects brought in at the time of
TES’ acquisition were completed in the quarter, and margins are
expected to expand in 2021 through execution of newer,
higher-margin projects in backlog and benefits from the
implementation of 80/20 operating systems. The consolidation of two
processing manufacturing facilities was also completed during the
quarter, providing the business with a better cost structure going
forward.
For the first quarter, the Agtech segment reported:
Three Months Ended March 31,
$Millions
GAAP
Adjusted
2021
2020
%
Change
2021
2020
%
Change
Net Sales
$46.7
$49.2
-5.1%
$46.7
$49.2
-5.1%
Operating Margin
2.0%
2.7%
(70) bps
2.4%
4.8%
(240) bps
Infrastructure
Revenue decreased $400,000 as the pandemic continued to impact
existing and new project schedules driven by state and federal DOT
funding. Order backlog grew 15% to $52 million in the first
quarter, reflecting positive momentum as the economy continues to
recover.
Improvement in adjusted operating margin was driven by ongoing
investment in operating systems and technology, 80/20 productivity
initiatives, and strong execution in fabricated products. This
momentum has helped the business offset the slow but recovering
market for higher-margin non-fabricated products and solutions.
For the first quarter, the Infrastructure segment reported:
Three Months Ended March 31,
$Millions
GAAP
Adjusted
2021
2020
%
Change
2021
2020
%
Change
Net Sales
$15.1
$15.5
(2.6)%
$15.1
$15.5
(2.6)%
Operating Margin
13.5%
10.2%
330 bps
13.5%
10.2%
330 bps
Business Outlook
“While we have solid end market demand and strong order backlog,
general market challenges remain – the pandemic, general inflation,
labor availability, and supply chain dynamics – and arguably, the
current environment is more challenging than what we experienced in
2020. We will remain focused on execution and controlling what we
can control, continuing to work on the business, and using our
healthy balance sheet to invest in both organic and inorganic
initiatives,” commented Mr. Bosway.
“Our guidance for revenue and earnings for the full year 2021
remains unchanged. Consolidated revenue is expected to range
between $1.3 billion and $1.35 billion.
“GAAP EPS is expected to range between $2.78 and $2.95 compared
to $2.53 in 2020, and adjusted EPS is expected to range between
$3.30 and $3.47 compared to $2.73 in 2020.”
Historical Segment Financial Information
Gibraltar has provided historical Renewables and Agtech segment
information for the four quarters of 2020 and full-year 2019 on the
Quarterly Results page of its website, which can be accessed
through the Investor section by clicking on Reports &
Presentations.
First Quarter 2021 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 2021.
Interested parties may access the webcast through the Investors
section of the Company’s website at www.gibraltar1.com or dial into
the call at (877) 407-3088 or (201) 389-0927. For interested
individuals unable to join the live conference call, a webcast
replay will be available on the Company’s website for one year.
About Gibraltar
Gibraltar Industries is a leading manufacturer and provider of
products and services for the renewable energy, residential,
agtech, 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 80/20 simplification
initiatives, senior leadership transition costs, 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.
GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF
INCOME
(in thousands, except per share
data)
(unaudited)
Three Months Ended March 31,
2021
2020
Net Sales
$
287,592
$
215,401
Cost of sales
227,574
165,540
Gross profit
60,018
49,861
Selling, general, and administrative
expense
47,203
37,084
Income from operations
12,815
12,777
Interest expense
444
44
Other expense
315
518
Income before taxes
12,056
12,215
Provision for income taxes
1,560
2,313
Income from continuing operations
10,496
9,902
Discontinued operations:
Income before taxes
2,570
2,830
Provision for income taxes
304
673
Income from discontinued operations
2,266
2,157
Net income
$
12,762
$
12,059
Net earnings per share – Basic:
Income from continuing operations
$
0.32
$
0.30
Income from discontinued operations
0.07
0.07
Net income
$
0.39
$
0.37
Weighted average shares outstanding --
Basic
32,771
32,586
Net earnings per share – Diluted:
Income from continuing operations
$
0.32
$
0.30
Income from discontinued operations
0.07
0.07
Net income
$
0.39
$
0.37
Weighted average shares outstanding --
Diluted
33,104
32,883
GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share
data)
March 31, 2021
December 31, 2020
(unaudited)
Assets
Current assets:
Cash and cash equivalents
$
20,731
$
32,054
Accounts receivable, net of allowance of
$3,319 and $3,529
199,598
197,990
Inventories, net
107,004
98,307
Prepaid expenses and other current
assets
24,684
19,671
Assets of discontinued operations
—
77,438
Total current assets
352,017
425,460
Property, plant, and equipment, net
91,717
89,562
Operating lease assets
23,465
25,229
Goodwill
523,446
514,279
Acquired intangibles
151,877
156,365
Other assets
12,669
1,599
$
1,155,191
$
1,212,494
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable
$
135,130
$
134,738
Accrued expenses
71,946
83,505
Billings in excess of cost
51,591
34,702
Liabilities of discontinued operations
—
49,295
Total current liabilities
258,667
302,240
Long-term debt
58,023
85,636
Deferred income taxes
37,996
39,057
Non-current operating lease
liabilities
16,165
17,730
Other non-current liabilities
25,932
24,026
Stockholders’ equity:
Preferred stock, $0.01 par value;
authorized 10,000 shares; none outstanding
—
—
Common stock, $0.01 par value; authorized
50,000 shares; 33,711 shares and 33,568 shares issued and
outstanding in 2021 and 2020
337
336
Additional paid-in capital
308,147
304,870
Retained earnings
482,705
469,943
Accumulated other comprehensive income
(loss)
764
(2,461)
Cost of 1,082 and 1,028 common shares held
in treasury in 2021 and 2020
(33,545)
(28,883)
Total stockholders’ equity
758,408
743,805
$
1,155,191
$
1,212,494
GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH
FLOWS
(in thousands)
(unaudited)
Three Months Ended March 31,
2021
2020
Cash Flows from Operating
Activities
Net income
$
12,762
$
12,059
Income from discontinued operations
2,266
2,157
Income from continuing operations
10,496
9,902
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation and amortization
7,974
4,780
Stock compensation expense
2,368
1,665
Exit activity costs, non-cash
1,193
—
Benefit of deferred income taxes
—
(178)
Other, net
(162)
386
Changes in operating assets and
liabilities, excluding the effects of acquisitions:
Accounts receivable
(2,522)
(7,180)
Inventories
(15,262)
(7,242)
Other current assets and other assets
(435)
6,218
Accounts payable
1,470
(18,909)
Accrued expenses and other non-current
liabilities
(6,334)
(33,268)
Net cash used in operating activities of
continuing operations
(1,214)
(43,826)
Net cash (used in) provided by operating
activities of discontinued operations
(2,011)
814
Net cash used in operating activities
(3,225)
(43,012)
Cash Flows from Investing
Activities
Acquisitions, net of cash acquired
(2)
(54,539)
Net proceeds from sale of property and
equipment
—
52
Purchases of property, plant, and
equipment
(4,389)
(2,144)
Net proceeds from sale of business
26,991
—
Net cash provided by (used in) investing
activities of continuing operations
22,600
(56,631)
Net cash used in investing activities of
discontinued operations
(176)
(678)
Net cash provided by (used in) investing
activities
22,424
(57,309)
Cash Flows from Financing
Activities
Proceeds from long-term debt
20,000
—
Long-term debt payments
(46,636)
—
Purchase of treasury stock at market
prices
(4,662)
(4,184)
Net proceeds from issuance of common
stock
910
24
Net cash used in financing activities
(30,388)
(4,160)
Effect of exchange rate changes on
cash
(134)
(916)
Net decrease in cash and cash
equivalents
(11,323)
(105,397)
Cash and cash equivalents at beginning of
year
32,054
191,363
Cash and cash equivalents at end of
period
$
20,731
$
85,966
GIBRALTAR INDUSTRIES, INC.
Reconciliation of Adjusted
Financial Measures
(in thousands, except per share
data)
(unaudited)
Three Months Ended March
31,2021
As Reported In GAAP
Statements
Restructuring Charges
Senior Leadership Transition
Costs
Acquisition Related Items
Adjusted Financial Measures
Net Sales
Renewables
$
85,512
—
—
—
$
85,512
Residential
140,217
—
—
—
140,217
Agtech
46,739
—
—
—
46,739
Infrastructure
15,124
—
—
—
15,124
Consolidated sales
287,592
—
—
—
287,592
Income from operations
Renewables
(521)
4,971
—
1,900
6,350
Residential
22,934
65
—
—
22,999
Agtech
929
204
—
—
1,133
Infrastructure
2,037
—
—
—
2,037
Segments Income
25,379
5,240
—
1,900
32,519
Unallocated corporate expense
(12,564)
—
1,289
883
(10,392)
Consolidated income from operations
12,815
5,240
1,289
2,783
22,127
Interest expense
444
—
—
—
444
Other expense
315
—
—
—
315
Income before income taxes
12,056
5,240
1,289
2,783
21,368
Provision for income taxes
1,560
1,373
306
707
3,946
Income from continuing operations
$
10,496
$
3,867
$
983
$
2,076
$
17,422
Income from continuing operations per
share - diluted
$
0.32
$
0.12
$
0.03
$
0.06
$
0.53
Operating margin
Renewables
(0.6)
%
5.8
%
—
%
2.2
%
7.4
%
Residential
16.4
%
—
%
—
%
—
%
16.4
%
Agtech
2.0
%
0.4
%
—
%
—
%
2.4
%
Infrastructure
13.5
%
—
%
—
%
—
%
13.5
%
Segments Margin
8.8
%
1.8
%
—
%
0.7
%
11.3
%
Consolidated
4.5
%
1.8
%
0.4
%
1.0
%
7.7
%
GIBRALTAR INDUSTRIES, INC.
Reconciliation of Adjusted
Financial Measures
(in thousands, except per share
data)
(unaudited)
Three Months Ended March 31,
2020
As Reported In GAAP
Statements
Restructuring & Senior
Leadership Transition Costs
Acquisition Costs
Adjusted Financial Measures
Net Sales
Renewables
$
47,263
$
—
$
—
$
47,263
Residential
103,419
—
—
103,419
Agtech
49,234
—
—
49,234
Infrastructure
15,485
—
—
15,485
Consolidated sales
215,401
—
—
215,401
Income from operations
Renewables
4,359
18
—
4,377
Residential
13,725
221
—
13,946
Agtech
1,340
—
1,001
2,341
Infrastructure
1,576
—
—
1,576
Segments Income
21,000
239
1,001
22,240
Unallocated corporate expense
(8,223)
2,280
259
(5,684)
Consolidated income from operations
12,777
2,519
1,260
16,556
Interest expense
44
—
—
44
Other expense
518
—
—
518
Income before income taxes
12,215
2,519
1,260
15,994
Provision for income taxes
2,313
59
316
2,688
Income from continuing operations
$
9,902
$
2,460
$
944
$
13,306
Income from continuing operations per
share - diluted
$
0.30
$
0.07
$
0.03
$
0.40
Operating margin
Renewables
9.2
%
—
%
—
%
9.3
%
Residential
13.3
%
0.2
%
—
%
13.5
%
Agtech
2.7
%
—
%
2.0
%
4.8
%
Infrastructure
10.2
%
—
%
—
%
10.2
%
Segments Margin
9.7
%
0.1
%
0.5
%
10.3
%
Consolidated
5.9
%
1.1
%
0.6
%
7.7
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210505005327/en/
LHA Investor Relations Jody Burfening/Carolyn Capaccio (212)
838-3777 rock@lhai.com
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