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
The post Gibraltar Announces Fourth Quarter and Full Year 2023 Financial Results appeared first on The Cannabis Reporter.