Gibraltar Announces Fourth Quarter and Full Year 2023 Financial Results

2023 EPS: GAAP up 40%, Adjusted up 21% on Flat Net Sales

Strong 2023 Cash Generation on Higher Margins, Working Capital Management

2024 Growth: Revenue 4-9%, EPS 12-20%

BUFFALO, N.Y.–(BUSINESS WIRE)–$ROCK #ROCK–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-and twelve-month period ended December 31, 2023.

“Fourth quarter results reflected a strong finish to a very good year for Gibraltar. We delivered 5% revenue growth, 50 basis points of adjusted operating margin expansion and adjusted EPS growth of 18%. For 2023, we outperformed what we set out to achieve at the beginning of the year, improving our quality of earnings and operating execution, generating $218 million of operating cash flow. As a result, with solid end market fundamentals, improving business conditions in Renewables and Agtech markets and our more efficient operating engine, we expect a strong 2024,” stated Chairman and CEO Bill Bosway.

Fourth Quarter 2023 Consolidated Results

Three Months Ended December 31,

$Millions, except EPS

GAAP

Adjusted

2023

2022

Change

2023

2022

Change

Net Sales

$328.8

$313.9

4.7%

$328.8

$312.9

5.1%

Net Income

$19.4

$3.3

NMF

$26.0

$22.4

16.1%

Diluted EPS

$0.63

$0.11

NMF

$0.85

$0.72

18.1%

Net sales increased 5.1% with all segments contributing to growth and order backlog increasing more than 10% versus last year.

GAAP earnings increased to $19.4 million, or $0.63 per share. Adjusted net income increased 16.1% to $26.0 million, or $0.85 per share, and adjusted EPS increased 18.1%. For the full year, revenue was essentially flat, GAAP and adjusted EPS and free cash flow all increased within the higher outlook included in third quarter 2023 reporting.

Adjusted measures exclude charges for restructuring initiatives, acquisition-related items, senior leadership transition costs and portfolio management actions, as further described in the appended reconciliation of adjusted financial measures.

Fourth Quarter Segment Results

Renewables

Three Months Ended December 31,

$Millions

GAAP

Adjusted

2023

2022

Change

2023

2022

Change

Net Sales

$87.7

$86.1

1.9%

$87.7

$86.1

1.9%

Operating Income

$9.1

$11.2

(18.8)%

$11.5

$13.1

(12.2)%

Operating Margin

10.3%

13.0%

(270) bps

13.1%

15.2%

(210) bps

Net sales increased 1.9%, driven by backlog converting to sales as customers continued to work through scheduling challenges related to permitting delays and awaited final tax credit guidance from the Inflation Reduction Act. New bookings continued to be robust, driving backlog up 20.9% versus last year.

Adjusted operating margin decreased 210 basis points versus the prior year as strong execution across the business was offset by warranty cost incurred during the quarter for a project completed in 2022.

Residential

Three Months Ended December 31,

$Millions

GAAP

Adjusted

2023

2022

Change

2023

2022

Change

Net Sales

$179.3

$171.9

4.3%

$179.3

$171.9

4.3%

Operating Income

$27.4

$21.6

26.9%

$31.5

$23.0

37.0%

Operating Margin

15.3%

12.5%

280 bps

17.5%

13.4%

410 bps

Net sales increased 4.3% with organic sales up 3.1% driven by participation gains and volume, partially offset by pricing adjustments related to commodity deflation.

Adjusted operating margin expanded 410 basis points, driven by improved price/cost alignment versus the prior year’s quarter, volume and 80/20 initiatives.

Agtech

Three Months Ended December 31,

$Millions

GAAP

Adjusted

2023

2022

Change

2023

2022

Change

Net Sales

$42.4

$38.5

10.1%

$42.4

$37.6

12.8%

Operating Income

$(4.3)

$(2.4)

(79.2)%

$(1.4)

$1.7

NMF

Operating Margin

(10.1)%

(6.3)%

(380) bps

(3.3)%

4.6%

(790) bps

Net sales on an adjusted basis increased 12.8% as the team executed on new orders in backlog.

Included in 2023 operating results is a $3.5 million charge to write down a receivable associated with a distressed cannabis customer. Before the charge, adjusted operating margin was approximately 5%, an increase of 40 basis points driven by volume, customer and product mix, and 80/20 initiatives.

Infrastructure

Three Months Ended December 31,

$Millions

GAAP

Adjusted

2023

2022

Change

2023

2022

Change

Net Sales

$19.4

$17.3

12.1%

$19.4

$17.3

12.1%

Operating Income

$3.6

$2.4

50.0%

$3.6

$2.4

50.0%

Operating Margin

18.6%

13.7%

490 bps

18.6%

13.7%

490 bps

Net sales and order backlog increased 12.1% and 3.0%, respectively, driven by continued solid end market demand and market participation gains.

Operating margin increased 490 basis points driven by ongoing strong execution, 80/20 productivity, and improving product and customer mix.

Business Outlook

Mr. Bosway concluded, “For 2024, we expect strong performances for all four segments, with Renewables and Agtech returning to top-line growth and Residential and Infrastructure positioned for continued performance. We will continue to work our proven playbook, leveraging our operating engine for scale and driving revenue growth, continued margin expansion and strong cash flow generation.”

Gibraltar is providing its guidance for earnings for the full year 2024. Consolidated revenue is expected to range between $1.43 billion and $1.48 billion, compared to $1.37 billion in 2023. GAAP EPS is expected to range between $4.04 and $4.29, compared to $3.59 in 2023, and adjusted EPS is expected to range between $4.57 and $4.82, compared to $4.11 in 2023.

Fourth Quarter 2023 Conference Call Details

Gibraltar will host a conference call today starting at 9:00 a.m. ET to review its results for the fourth quarter of 2023. Interested parties may access the webcast through the Investors section of the Company’s website at www.gibraltar1.com, where related presentation materials will also be posted prior to the conference call. The call also may be accessed by dialing (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 is a leading manufacturer and provider of products and services for the renewable energy, residential, agtech, and infrastructure markets. Gibraltar’s mission, to make life better for people and the planet, is fueled by advancing the disciplines of engineering, science, and technology. Gibraltar is innovating to reshape critical markets in comfortable living, sustainable power, and productive growing throughout North America. For more please visit 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 availability and pricing of our principal raw materials and component parts, supply chain challenges causing project delays and field operations inefficiencies and disruptions, the loss of any key customers, adverse effects of inflation, our ability to continue to improve operating margins, our ability to translate our backlog into net sales, other general economic conditions and conditions in the particular markets in which we operate, changes in spending due to laws and government incentives, such as the Infrastructure Investment and Jobs Act, 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, disruptions to IT systems, the impact of regulation (including the Department of Commerce’s solar panel anti-circumvention investigation, the Auxin Solar challenge to the Presidential waiver of tariffs and the Uyghur Forced Labor Prevention Act (UFLPA)), rebates, credits and incentives and variations in government spending 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 and its quarterly conference call, including adjusted net sales, adjusted operating income and margin, adjusted net income, adjusted earnings per share (EPS), free cash flow and adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA), each a non-GAAP financial measure. Adjusted net sales reflects the removal of net sales associated with our Processing business, which has been liquidated. Adjusted net income, operating income and margin exclude special charges consisting of restructuring costs primarily associated with 80/20 simplification or lean initiatives, senior leadership transition costs, acquisition related costs and the operating losses generated by our processing business which has been liquidated. These special charges are excluded since they may not be considered directly related to the Company’s ongoing business operations. The aforementioned exclusions along with other adjustments to other income below operating profit are excluded from adjusted EPS. Adjusted EBITDA further excludes interest, taxes, depreciation, amortization and stock compensation expense. In evaluating its business, the Company considers and uses these non-GAAP financial measures as supplemental measures of its operating performance. Free cash flow is operating cash flow less capital expenditures and the related margin is free cash flow divided by net sales. The Company believes that the presentation of adjusted measures and free cash flow provides meaningful supplemental data to investors 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. Adjusted EBITDA and free cash flow are also useful measures of the Company’s ability to service debt and adjusted EBITDA is one of the measures used for determining the Company’s debt covenant compliance.

Adjustments to the most directly comparable financial measures presented on a GAAP basis are quantified in the reconciliation of adjusted financial measures provided in the supplemental financial schedules that accompany this news release. 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 and the Company’s presentation of non-GAAP financial measures should not be construed as an inference that the Company’s future results will be unaffected by unusual or non-recurring items.

Reconciliations of non-GAAP measures related to full-year 2023 guidance have not been provided due to the unreasonable efforts it would take to provide such reconciliations due to the high variability, complexity and uncertainty with respect to forecasting and quantifying certain amounts that are necessary for such reconciliations.

GIBRALTAR INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)

(unaudited)

Three Months Ended

December 31,

Twelve Months Ended

December 31,

2023

2022

2023

2022

Net sales

$

328,811

$

313,861

$

1,377,736

$

1,389,966

Cost of sales

245,897

244,838

1,015,770

1,071,272

Gross profit

82,914

69,023

361,966

318,694

Selling, general, and administrative expense

54,025

47,651

207,440

188,592

Intangible asset impairment

3,797

3,797

Income from operations

25,092

21,372

150,729

130,102

Interest (income) expense, net

(214

)

1,858

3,002

4,047

Other expense (income)

681

13,768

(1,265

)

14,565

Income before taxes

24,625

5,746

148,992

111,490

Provision for income taxes

5,191

2,398

38,459

29,084

Net income

$

19,434

$

3,348

$

110,533

$

82,406

Net earnings per share:

Basic

$

0.64

$

0.11

$

3.61

$

2.57

Diluted

$

0.63

$

0.11

$

3.59

$

2.56

Weighted average shares outstanding:

Basic

30,523

31,135

30,626

32,096

Diluted

30,724

31,257

30,785

32,192

GIBRALTAR INDUSTRIES, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

December 31,

2023

December 31,

2022

(unaudited)

Assets

Current assets:

Cash and cash equivalents

$

99,426

$

17,608

Accounts receivable, net of allowance of $5,572 and $3,746, respectively

224,550

217,156

Inventories, net

120,503

170,360

Prepaid expenses and other current assets

17,772

18,813

Total current assets

462,251

423,937

Property, plant, and equipment, net

107,603

109,584

Operating lease assets

44,918

26,502

Goodwill

513,383

512,363

Acquired intangibles

125,980

137,526

Other assets

2,316

701

$

1,256,451

$

1,210,613

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable

$

92,124

$

106,582

Accrued expenses

88,719

73,721

Billings in excess of cost

44,735

35,017

Total current liabilities

225,578

215,320

Long-term debt

88,762

Deferred income taxes

57,103

47,088

Non-current operating lease liabilities

35,989

19,041

Other non-current liabilities

22,783

18,303

Stockholders’ equity:

Preferred stock, $0.01 par value; authorized 10,000 shares; none outstanding

Common stock, $0.01 par value; authorized 100,000 shares; 34,219 and 34,060 shares issued and outstanding in 2023 and 2022

342

340

Additional paid-in capital

332,621

322,873

Retained earnings

738,511

627,978

Accumulated other comprehensive loss

(2,114

)

(3,432

)

Cost of 3,778 and 3,199 common shares held in treasury in 2023 and 2022

(154,362

)

(125,660

)

Total stockholders’ equity

914,998

822,099

$

1,256,451

$

1,210,613

GIBRALTAR INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

Twelve Months Ended

December 31,

2023

2022

Cash Flows from Operating Activities

Net income

$

110,533

$

82,406

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

27,378

26,167

Intangible asset impairment

3,797

Stock compensation expense

9,750

8,334

Exit activity costs, non-cash

2,771

16,266

Provision for deferred income taxes

10,800

6,337

Other, net

12,492

1,506

Changes in operating assets and liabilities net of effects from acquisitions:

Accounts receivable

(15,375

)

32,754

Inventories

45,908

14,377

Other current assets and other assets

514

2,062

Accounts payable

(14,387

)

(76,260

)

Accrued expenses and other non-current liabilities

24,295

(11,258

)

Net cash provided by operating activities

218,476

102,691

Cash Flows from Investing Activities

Acquisitions, net of cash acquired

(9,863

)

(51,621

)

Purchases of property, plant, and equipment, net

(13,906

)

(20,062

)

Net proceeds from sale of business

8,047

Net cash used in investing activities

(15,722

)

(71,683

)

Cash Flows from Financing Activities

Proceeds from long-term debt

50,000

204,500

Long-term debt payments

(141,000

)

(138,000

)

Payment of debt issuance costs

(2,013

)

Purchase of common stock at market prices

(29,329

)

(89,494

)

Net cash used in financing activities

(120,329

)

(25,007

)

Effect of exchange rate changes on cash

(607

)

(1,242

)

Net increase in cash and cash equivalents

81,818

4,759

Cash and cash equivalents at beginning of year

17,608

12,849

Cash and cash equivalents at end of year

$

99,426

$

17,608

GIBRALTAR INDUSTRIES, INC.

Reconciliation of Adjusted Financial Measures

(in thousands, except per share data)

(unaudited)

Three Months Ended

December 31, 2023

As

Reported

In GAAP Statements

Restructuring Charges

Acquisition Related Items

Portfolio Management

Adjusted

Financial Measures

Net Sales

Renewables

$

87,712

$

$

$

$

87,712

Residential

179,327

179,327

Agtech

42,421

42,421

Infrastructure

19,351

19,351

Consolidated sales

328,811

328,811

Income from operations

Renewables

9,076

2,075

331

11,482

Residential

27,442

4,021

31,463

Agtech

(4,277

)

3,196

(339

)

(1,420

)

Infrastructure

3,601

3,601

Segment Income

35,842

9,292

331

(339

)

45,126

Unallocated corporate expense

(10,750

)

1

8

(7

)

(10,748

)

Consolidated income from operations

25,092

9,293

339

(346

)

34,378

Interest income

(214

)

(214

)

Other expense

681

(643

)

38

Income before income taxes

24,625

9,293

339

297

34,554

Provision for income taxes

5,191

2,354

86

908

8,539

Net income

$

19,434

$

6,939

$

253

$

(611

)

$

26,015

Net income per share – diluted

$

0.63

$

0.23

$

0.01

$

(0.02

)

$

0.85

Operating margin

Renewables

10.3

%

2.4

%

0.4

%

%

13.1

%

Residential

15.3

%

2.2

%

%

%

17.5

%

Agtech

(10.1

)%

7.5

%

%

(0.8

)%

(3.3

)%

Infrastructure

18.6

%

%

%

%

18.6

%

Segments Margin

10.9

%

2.9

%

0.1

%

(0.1

)%

13.7

%

Consolidated

7.6

%

2.9

%

0.1

%

(0.1

)%

10.5

%

GIBRALTAR INDUSTRIES, INC.

Reconciliation of Adjusted Financial Measures

(in thousands, except per share data)

(unaudited)

Three Months Ended

December 31, 2022

As Reported In GAAP Statements

Restructuring Charges

Acquisition Related Items

Portfolio Management

Adjusted Financial Measures

Net Sales

Renewables

$

86,116

$

$

$

$

86,116

Residential

171,926

171,926

Agtech

38,543

(943

)

37,600

Infrastructure

17,276

17,276

Consolidated sales

313,861

(943

)

312,918

Income from operations

Renewables

11,182

1,897

51

13,130

Residential

21,557

527

951

23,035

Agtech

(2,436

)

1,517

2,654

1,735

Infrastructure

2,363

2,363

Segments Income

32,666

3,941

1,002

2,654

40,263

Unallocated corporate expense

(11,294

)

2,306

72

(8,916

)

Consolidated income from operations

21,372

6,247

1,074

2,654

31,347

Interest expense

1,858

(140

)

1,718

Other expense (income)

13,768

(13,990

)

(222

)

Income before income taxes

5,746

6,387

1,074

16,644

29,851

Provision for income taxes

2,398

1,308

265

3,438

7,409

Net income

$

3,348

$

5,079

$

809

$

13,206

$

22,442

Net income per share – diluted

$

0.11

$

0.16

$

0.03

$

0.42

$

0.72

Operating margin

Renewables

13.0

%

2.2

%

0.1

%

%

15.2

%

Residential

12.5

%

0.3

%

0.6

%

%

13.4

%

Agtech

(6.3

)%

3.9

%

%

6.9

%

4.6

%

Infrastructure

13.7

%

%

%

%

13.7

%

Segments Margin

10.4

%

1.3

%

0.3

%

0.8

%

12.9

%

Consolidated

6.8

%

2.0

%

0.3

%

0.8

%

10.0

%

GIBRALTAR INDUSTRIES, INC.

Reconciliation of Adjusted Financial Measures

(in thousands, except per share data)

(unaudited)

Twelve Months Ended

December 31, 2023

As

Reported

In GAAP Statements

Restructuring Charges

Acquisition Related Items

Portfolio Management

Adjusted

Financial Measures

Net Sales

Renewables

$

330,738

$

$

$

$

330,738

Residential

814,803

814,803

Agtech

144,967

(4,059

)

140,908

Infrastructure

87,228

87,228

Consolidated sales

1,377,736

(4,059

)

1,373,677

Income from operations

Renewables

30,160

9,394

968

40,522

Residential

143,068

4,811

12

147,891

Agtech

(928

)

3,918

37

4,119

7,146

Infrastructure

18,529

18,529

Segment Income

190,829

18,123

1,017

4,119

214,088

Unallocated corporate expense

(40,100

)

(51

)

300

89

(39,762

)

Consolidated income from operations

150,729

18,072

1,317

4,208

174,326

Interest expense

3,002

3,002

Other (income) expense

(1,265

)

1,625

360

Income before income taxes

148,992

18,072

1,317

2,583

170,964

Provision for income taxes

38,459

4,583

334

1,048

44,424

Net income

$

110,533

$

13,489

$

983

$

1,535

$

126,540

Net income per share – diluted

$

3.59

$

0.43

$

0.04

$

0.05

$

4.11

Operating margin

Renewables

9.1

%

2.8

%

0.3

%

%

12.3

%

Residential

17.6

%

0.6

%

%

%

18.2

%

Agtech

(0.6

)%

2.7

%

%

2.8

%

5.1

%

Infrastructure

21.2

%

%

%

%

21.2

%

Segments Margin

13.9

%

1.3

%

0.1

%

0.3

%

15.6

%

Consolidated

10.9

%

1.3

%

0.1

%

0.3

%

12.7

%

GIBRALTAR INDUSTRIES, INC.

Reconciliation of Adjusted Financial Measures

(in thousands, except per share data)

(unaudited)

Twelve Months Ended

December 31, 2022

As Reported In GAAP Statements

Restructuring Charges & Senior Leadership Transition Costs

Acquisition Related Items

Portfolio Management

Adjusted Financial Measures

Net Sales

Renewables

$

377,567

$

$

$

$

377,567

Residential

767,248

767,248

Agtech

168,868

(7,840

)

161,028

Infrastructure

76,283

76,283

Consolidated sales

1,389,966

(7,840

)

1,382,126

Income from operations

Renewables

25,243

4,240

782

30,265

Residential

126,458

2,121

1,427

130,006

Agtech

2,914

1,837

6,769

11,520

Infrastructure

9,003

(63

)

8,940

Segments Income

163,618

8,135

2,209

6,769

180,731

Unallocated corporate expense

(33,516

)

2,837

601

(30,078

)

Consolidated income from operations

130,102

10,972

2,810

6,769

150,653

Interest expense

4,047

(140

)

3,907

Other expense

14,565

(13,890

)

675

Income before income taxes

111,490

11,112

2,810

20,659

146,071

Provision for income taxes

29,084

2,485

702

4,441

36,712

Net income

$

82,406

$

8,627

$

2,108

$

16,218

$

109,359

Net income per share – diluted

$

2.56

$

0.26

$

0.07

$

0.51

$

3.40

Operating margin

Renewables

6.7

%

1.1

%

0.2

%

%

8.0

%

Residential

16.5

%

0.2

%

0.2

%

%

16.9

%

Agtech

1.7

%

1.1

%

%

4.0

%

7.2

%

Infrastructure

11.8

%

(0.1

)%

%

%

11.7

%

Segments Margin

11.8

%

0.6

%

0.2

%

0.5

%

13.1

%

Consolidated

9.4

%

0.8

%

0.2

%

0.5

%

10.9

%

Contacts

LHA Investor Relations

Jody Burfening/Carolyn Capaccio

(212) 838-3777

rock@lhai.com

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