Gibraltar Announces Second-Quarter 2020 Financial Results
Gibraltar Industries, Inc. (the “Company”), a leading manufacturer and provider of products and services for the renewable energy, conservation, residential, industrial and infrastructure markets, reported its financial results for the three-month period ended June 30, 2020.
“Our organization responded well to a better than expected demand profile in our Residential Products and Renewable Energy & Conservation end markets during the quarter. Despite the continuous challenge of the pandemic, our decision to keep our team intact enabled us to deliver revenue growth and adjusted EPS growth of 8.8% and 15.1%, respectively,” said President and Chief Executive Officer Bill Bosway. “As important, our GAAP and adjusted operating margins improved 200 and 130 basis points, respectively, supporting our continued investment in our business. We are gaining momentum and starting to see more consistent performance across our businesses, with our backlog continuing to build, up 14% to $277 million.”
Second Quarter 2020 Consolidated Results
Second quarter 2020 net sales increased 8.8% to $285.8 million, driven by the Residential Products and Renewable Energy & Conservation segments. Of the 8.8% increase, organic growth was 1.6%, and recent acquisitions contributed 7.2%.
GAAP earnings increased 37.2% to $27.3 million, or $0.83 per share, while adjusted earnings increased 16.9% to $27.7 million, or $0.84 per share, the result of organic growth in both Residential Products and Renewable Energy and Conservation, marked margin expansion in Residential and Industrial & Infrastructure Products, continued execution in all core businesses, product and services mix, favorable alignment of price to material costs, and ongoing benefits from operational excellence initiatives. Special items removed from both the second quarters of 2020 and 2019 are further described in the appended reconciliation of adjusted financial measures.
Mr. Bosway stated, “We continue to execute our operating playbook as we deal with the pandemic and make necessary adjustments as the current environment evolves. Our top priorities remain our organization, keeping them and their families as safe and healthy as possible, ensuring our supply chain operates well, and maintaining a high level of responsiveness to customers.”
Second Quarter Segment Results
Renewable Energy & Conservation
Renewable Energy & Conservation revenues increased 29.3%, with organic growth of 4.2%, and inorganic growth of 25.1% resulting from the acquisitions of Apeks Supercritical, Thermo Energy Solutions and Delta Separations. Segment backlog increased, up 15% versus 2019, the result of good market dynamics and participation gains, particularly in renewable energy, and the impact of recent acquisitions.
The segment’s core business continued to grow, driven by renewable energy, and delivered improved operating results driven by participation gains, product and service mix, strong execution, and continued improved solar tracker field performance. These benefits were partly offset by slower market demand for cannabis growing solutions. The impact on margins from acquisitions was consistent with expectations, with the pandemic creating near-term cannabis processing end market demand challenges, and while there have been a few integration challenges, integration overall is expected to be completed on time to deliver targeted returns in year three. Adjusted operating margin for the second 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 revenue increased 7.0% due to strong repair and remodel activity as homeowners started to “nest” during the pandemic and through participation gains across key product lines and customers. Adjusted operating margin increased due to consistent execution, better price and material cost management, product mix, 80/20 initiatives, and volume leverage. Adjusted operating margin for the second 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
Segment revenue decreased 14.4%, driven by lower demand for core industrial products during the pandemic. The infrastructure business was comparable with the prior year’s quarter, and its backlog continued to grow.
The increase in adjusted operating margin was driven by continued improvement in execution in our industrial business, a more favorable alignment of price to material costs, mix and continued benefits from 80/20 profit improvement initiatives. Adjusted operating margin for the second quarters of 2020 and 2019 removes special charges for restructuring initiatives as further described in the appended reconciliation of adjusted financial measures.
Although the Company delivered strong financial performance in the first half of 2020 and continues to experience a growing backlog, the uncertain pace and strength of an economic recovery in the current environment continue to make providing reliable quantitative guidance difficult.
Bill Bosway commented, “Our momentum and current market trends support a solid outlook for the remainder of the year and give us confidence that our second half of the year will be stronger than the first half. However, the current status of the pandemic across the country, and understanding its potential impact on our markets, makes it challenging to provide an outlook and guidance with reliable precision. Therefore, we will continue with suspension of quantitative guidance and will revisit this practice in three months. In the near term, we will continue to focus on what is in front of us and on what we can control. The resiliency inherent in our business model and our strong balance sheet position us to continue investing in our business and strengthening our position in the markets we serve.”
For the full second quarter results, click here.
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.
Jody Burfening – LHA Investor Relations – email@example.com – (212) 838-3777
Source: Gibraltar Industries, Inc.