Gibraltar Announces Full Year And Fourth Quarter 2020 Financial Results

– Gibraltar Delivers Record Revenue and EPS performance in 2020

– 2020 Revenues Grow 15%, GAAP, Adjusted EPS Expands 38% and 18%, Respectively

– Q4 Revenues Improves 17%, GAAP, Adjusted EPS Up 15% and 4%, Respectively

– Backlog 50% Higher on Continued Renewable Energy and Conservation Demand

Gibraltar Industries, Inc. (“Gibraltar”), a leading manufacturer and provider of products and services for the renewable energy, conservation, residential and infrastructure markets, today reported its financial results for the three-month period ended December 31, 2020. Results of TerraSmart, acquired at the end of the day on December 31, 2020, had no impact on operations in 2020 in reported results.

“Overall, we delivered record performance in 2020 while remaining very focused on the health and well-being of our people, operations, customers, and communities. We also worked on the business, executed key initiatives, and generated strong cash flow, enabling material investments to support our long term strategy,” said President and Chief Executive Officer Bill Bosway. “Our fourth quarter performance was solid with revenue increasing 17% and adjusted EPS increasing 4%, and we enter 2021 with a strong backlog of approximately $300 million, up 50%, and a strong balance sheet and cash flow profile to continue driving our key initiatives.”

Fourth Quarter 2020 Consolidated Results from Continuing Operations*

Fourth quarter 2020 net sales from continuing operations increased 17.3% to $265.2 million, driven by the Residential Products and Renewable Energy & Conservation segments. Of the 17.3% increase, organic growth accounted for 3.6%, and recent acquisitions contributed 13.7%.

GAAP earnings increased 17.3% to $17.6 million, or $0.53 per share, while adjusted earnings increased 4.8% to $19.5 million, or $0.59 per share, the result of organic growth and continued margin expansion in the Residential Products segment, product and services mix, favorable alignment of price to material costs, and ongoing benefits from operational excellence 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.

*Gibraltar has classified the Industrial business as a discontinued operation with fourth quarter 2020 results. Included in fourth quarter 2020 loss from discontinued operations of $26.1 million is a non-cash loss of $29.6 million related to the disposal of this business.

Fourth Quarter Segment Results

Renewable Energy & Conservation

The acquisition of TerraSmart, an important addition to Gibraltar’s renewable energy business, was completed on December 31, 2020. TerraSmart delivered 2020 revenue of $157 million and adjusted EBITDA of $26 million, in line with expectations creating a business with approximately $400M in revenue and operating margin in excess of 12% on a Pro Forma basis as we enter 2021. TerraSmart’s 2020 results did not impact Gibraltar’s Q4 2020 results.

Segment revenue increased 11.8% driven by growth from acquisitions. Organic revenue slowed during the quarter driven by certain market dynamics. Solar customers experienced unanticipated solar panel supply challenges and building permit delays causing temporary delays to existing projects slated for the fourth quarter. In the conservation business, market conditions for greenhouse structures and processing extraction equipment serving the cannabis and hemp markets remain slow, but the positive momentum in order activity and backlog over the last 60 days supports our previous expectation of these two markets being solid in 2021. Total segment backlog continued to grow, increasing 55%, driven by continued strength in both solar energy and organic produce end markets.

Adjusted operating margin performance was driven by a reduction in solar volume as existing solar projects moved into 2021. We expect the solar panel supply challenges to subside in the first half of 2021. We also experienced a delay to our integration plan of Thermo Energy Systems (TES), which is located in Canada, due to mandated Covid-19 visitation and travel restrictions between the U.S. and Canada. The slower greenhouse structures and processing equipment market for cannabis and hemp impacted volume and productivity initiatives in the quarter creating a margin drag accordingly.

Residential Products

Segment revenue increased 26.7% as the residential market continued to show solid activity, with strong demand and participation gains across all channels. Organic growth was 21.4%, with the acquired Architectural Mailboxes business contributing 5.3% growth. Adjusted operating margin increased with consistent execution on higher volume, and additional 80/20 initiatives.

Infrastructure Products

As noted above, Gibraltar completed the sale of the Industrial business on February 23, 2021. The results of the Industrial business are included as discontinued operations and the assets and liabilities have been reclassified as held-for-sale in fourth quarter 2020 results.

Segment revenue decreased 7.5% as the pandemic continued to impact existing and new project schedules, especially in segments like airport runway maintenance, where customers have delayed spending. The increase in adjusted operating margin was driven by strong execution in fabricated product sales which has offset a decline in our higher margin non-fabricated product lines. Infrastructure backlog improved modestly, but bidding activity has approached record levels moving into 2021.

Business Outlook

“We enter 2021 with momentum across our businesses and confidence in our end markets, and we will continue executing our operating playbook, maintaining a safe environment for our people and supporting our customers,” Mr. Bosway concluded. “Although we are dealing with challenging short term market dynamics, I am confident we will deliver full year growth and margin expansion in 2021.”

Gibraltar is providing guidance for revenue and earnings for the full year 2021. 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.

Four the full fourth quarter results, click here.

About Gibraltar

Gibraltar Industries is a leading manufacturer and provider of products and services for the renewable energy, conservation, residential, 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.

Contact:

Jody Burfening – LHA Investor Relations – rock@lhai.com – (212) 838-3777

Source: Gibraltar Industries, Inc.