Gibraltar Industries, Inc. · NASDAQ:ROCK
Gibraltar Industries — KeyBanc Capital Markets Basic Materials & Packaging Conference 2010
35 slides from Gibraltar Industries's conference presentation, Sep 14, 2010
Slide 1: KeyBanc Capital Markets Basic Materials & Packaging Conference
KeyBanc Capital Markets Basic Materials & Packaging Conference September 14, 2010
Slide 2: Forward-looking statements
This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Reliance should not be placed on forward-looking statements because they involve unknown risks, uncer
Slide 3: Agenda
Agenda • Overview of Company • Business Strategy • Outlook 3
Slide 4: Overview of Company
Overview of Company 4
Slide 5: Gibraltar's Markets Today
Gibraltar’s Markets Today Residential - 65% Channels Products New Single Distribution Storage, Mailboxes, Family 20% Soffits, Trims, Flashing, 45% Metal Roofing, New Multi-Fam ily Rainware, Fasteners, 10% Vents, Repair & Retail HVAC Components, Remodel 45% Structural Connectors, 70% Lath, Support Co
Slide 6: Residential… at a Glance
Residential… at a Glance Market Position Roof & foundation ventilation products #1 Mail storage (single & cluster) #1 Rain dispersion #1 Anchors & structural connectors #2 Flashing, soffits, trim, metal lath #1 Metal building accessories Regional Leader 6
Slide 7: Non-Residential… at a Glance
Non-Residential… at a Glance • Products include: – Grating, Stairs, Tread, Ramps – Expanded Metal – Framing & Structural Support – Architectural Exteriors – Fencing – Reinforced Bar – Anchors & Connectors – Flashing, Soffits • End use includes: – Water/Sewage Treatment – Gas and Oil Production – Off
Slide 8: Blue Chip Customers
Blue Chip Customers LENNAR! LOWE'S Home Improvement Warehouse “a Donaldson. Ww FILTEATION SOLUTIONS Russel Metals Walmart >;< Bradco Supply UNITED STATES BEd POSTAL SERVICE. LD Beacon Roofing Supply, Inc. fine
Slide 9: Business Strategy
Business Strategy 9
Slide 10: Strategy (1 of 2)
Strategy (1 of 2) • Strengthen product leadership positions: – Product development, new markets, market share – Ventilation, mail storage products, fabrication, large retailers • Operational excellence: – Global low-cost producer – Customer service – Faster working capital turns – Capex < depreciati
Slide 11: Strategy (2 of 2)
Strategy (2 of 2) • Acquire businesses or product lines that strengthen and expand our leadership positions with customers: – Product adjacencies in existing markets – Businesses and or products with higher value–added – Expand industrial products / business mix • Manage portfolio of companies: – Pe
Slide 12: Financial Targets
Financial Targets Targets at 900K - 950K 2007 2008 2009 New Housing Starts • Gross Margin 21% 21% 19% 22% • SG&A 14% 14% 16% 12% of Sales • Operating Margin 7% 7% 3% 10%٭ • EBITDA Margin 9% 9% 5% 13% • Net Income Margin 2.4% 2.4% -% 5%+ • Annual Free Cash Flow As a % of 11% 7% 14% 7% - 8% Revenue
Slide 13: Disciplined Acquisition Strategy
Disciplined Acquisition Strategy • Expand Products, Processes, and Services – Extend geographic penetration and reach – Diversify customer base and business mix – Offer long-term growth potential – Proven management teams willing to stay – Compatible cultures • Target Financial Criteria – Accretive
Slide 14: Strategic Growth Through Acquisitions
Strategic Growth Through Acquisitions ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ‘09 ‘10 Ventilation Products Mail/Storage Products Rain Dispersion Structural Connectors Bar Grating Expanded Metal Metal Lath Metal Building Accessories 14
Slide 15: Outlook
Outlook 15
Slide 16: Housing Starts
Housing Starts 2.5 2.0 1.5 Units in M 1.0 0.5 0.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Housing starts in 2010 expected to show improvement over 2009. Meaningful recovery in housing starts expected in 2011; trending towards historically normal levels in 2012. Source: MAPI
Slide 17: Homeowner Improvement Activity
Homeowner Improvement Activity Four-Quarter Moving Total in Billions 150.0 140.0 130.0 120.0 110.0 100.0 90.0 80.0 70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0 1Q2004 2Q2004 3Q2004 4Q2004 1Q2005 2Q2005 3Q2005 4Q2005 1Q2006 2Q2006 3Q2006 4Q2006 1Q2007 2Q2007 3Q2007 4Q2007 1Q2008 2Q2008 3Q2008 4Q2008 1Q2009
Slide 18: Investment – USA Fixed
Investment – USA Fixed Forecast 30% 25% 20% 15% 10% 5% 0% -5% -10% -15% -20% -25% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Non-Residential Residential Residential investment (housing, remodeling, etc) and non-residential investments (plants, equipments, etc.) have bottomed. M
Slide 19: Growth Platforms
Growth Platforms Revenue: • Product Leadership Positions • New Products • Expanding Share of Retail Channel • Expanding Share of Wholesale Channel Margin: • Higher Operating Efficiency; at lower breakeven 19
Slide 20: New Products… a sampling
New Products… a sampling The vario™ kiosk kits provide three additional mounting options for Std- The Hip Ridge™Vent is a shingle-over 4C mailboxes creating a stylish vent that provides exhaust along the outdoor or stand alone indoor mail roof’s hip allowing maximum airflow and center which can be s
Slide 21: 2010 Outlook
2010 Outlook • Choppy end-market conditions – New-build housing – Non-residential • Growing market share • Further operational efficiency • Cost to restructure (majority) behind us • Solid balance sheet / ample liquidity 21
Slide 22: Q & A Session
22 ee Q & A Session Ts CIB
Slide 23: Highlights from Q210 Earnings Call
Highlights from Q210 Earnings Call Diluted EPS Grows $0.06 vs. Q2 2009 • From $0.07 to $0.13 before special charges • Increased gross margin • Decreased interest and tax expenses Free Cash Flow • 1st Half 2010 strong at 8% of revenues Debt Reduction to 29% debt-to-cap • Revolving credit facility has
Slide 24: YOY Profit Improvement
YOY Profit Improvement YTD YTD Q210 Q209* Q210 Q209* Revenues • Unit volumes nearly equivalent for both comparative periods • No significant recovery in housing starts thus Revenues $191.8 $349.3 $357.1 far through 2010 $190.8 +1% (2)% Operating Income • Q2: Improved gross margin offset by incre
Slide 25: Positive Cash Flow
Positive Cash Flow 1H10 1H09 Net (loss) income from continuing operations $ 1.5 $ (18.9) Depreciation and amortization 13.3 13.0 Non-cash intangible impairment charge, net of deferred tax benefit (0.2) 14.8 Compensation expense of stock-based plans 2.7 2.5 Non-cash charges to interest expense 3.1 1.
Slide 26: Debt Reduction Continued
Debt Reduction Continued Jun 10 Dec 09 Dec 08 Dec 07 Short-Term Debt $ 0.4 $ 0.4 $ 2.7 $ 3.0 Long-Term Debt 206.6 256.9 353.6 484.6 Total Debt 207.0 257.3 356.3 487.6 Cash & Cash Equivalents 26.8 23.6 11.3 35.3 Net Debt $ 180.2 $ 233.7 $ 345.0 $ 452.3 Total Debt /Capitalization 29% 33% 39% 46% 26
Slide 27: Restructuring Actions
Restructuring Actions HAWAII 48 Current Facilities 28 Facilities closed since 9/30/2007 27
Slide 28: Same Geographic Coverage with Fewer Facilities
Same Geographic Coverage with Fewer Facilities Office Distribution Center HAWAII Manufacturing Facility 48 Current Facilities 28
Slide 29: Logistics Leveraged Across Business Units
Logistics Leveraged Across Business Units AMICO CMI NOLL / NorWesCo DOT SEMCO APPLETON WEATHERGUARD 29
Slide 30: Restructuring Results
Restructuring Results 2009 2008 & 2009 • Reduction in facilities: 6 (11)% 25 (34)% • Reduction in staffing 819 (25)% 1,501 (38)% • Operating expense reduction vs. 2008: ($100) — • Working capital reduction: $M* ($104) ($125) Days (28) (31) • Debt reduction: $M ($99) ($230) % (28)% (47)% • Debt to ca
Slide 31: Non-GAAP Reconciliation, Three Months Ended March 31, 2010
Net sales Cost of sales Gross profit Selling. general, and administrative expense GIBRALTAR INDUSTRIES, INC. Non-GAAP Reconciliation of Results Excluding Special Charges (unaudited) Three Months Ended March 31, 2010 (in thousands, except per share data) Intangible asset impairment adjustment Income
Slide 32: Non-GAAP Reconciliation of Results Excluding Special Charges
GIBRALTAR INDUSTRIES, INC. Non-GAAP Reconciliation of Results Excluding Special Charges (unaudited) (in thousands, except per share data) Three Months Ended June 30, 2010 As Reported In Impairment Results GAAP And Exit Excluding Statements Activity Costs Special Charges Net sales $ 191,771 $ — $ 191
Slide 33: Non-GAAP Reconciliation of Results Excluding Special Charges
GIBRALTAR INDUSTRIES, INC. Non-GAAP Reconciliation of Results Excluding Special Charges (unaudited) (in thousands, except per share data) Three Months Ended September 30, 2009 As Previously As Impairment Results Reported Discontinued Reported Deferred And Exit Excluding In GAAP Operations In GAAP Fi
Slide 34: Non-GAAP Reconciliation of Results Excluding Special Charges
GIBRALTAR INDUSTRIES, INC. Non-GAAP Reconciliation of Results Excluding Special Charges (unaudited) (in thousands, except per share data) Year Ended December 31, 2009 As Previously As Impairment Results Reported Discontinued Reported Intangible Deferred And Exit Excluding In GAAP Operations In GAAP
Slide 35: KeyBanc Capital Markets Basic Materials & Packaging Conference
KeyBanc Capital Markets Basic Materials & Packaging Conference September 14, 2010
Gibraltar Industries — KeyBanc Capital Markets Basic Materials & Packaging Conference 2010 on 6ix