Gibraltar Industries, Inc. · NASDAQ:ROCK
Gibraltar Industries — Investor Presentation (June 2011)
41 slides from Gibraltar Industries's investor presentation, Jun 20, 2011
Slide 1: Investor Presentation June 20-21, 2011
Investor Presentation June 20-21, 2011
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: Reasons to Invest in Gibraltar
Reasons to Invest in Gibraltar • Growing market share in strongest building Positioning products segments Scalability • Low-cost manufacturing and distribution capacity Profitability • Improved operating leverage Liquidity • Solid cash flow and balance sheet 3
Slide 4: Agenda
Agenda • Gibraltar at a glance • # 1 in key markets • Improved efficiency & margin leverage • Near-term growth outlook 4
Slide 5: Gibraltar at a Glance
T~ GIBRALTAR INDUSTRIES
Slide 6: Who is Gibraltar?
Who is Gibraltar? • Leading manufacturer and distributor of building products • Focused on residential and nonresidential repair & remodeling; industrial facilities and manufacturing; public infrastructure • Headquartered in Buffalo, NY • Nasdaq: ROCK (public since 1993) 6
Slide 7: Fast Facts
Fast Facts • Holds #1 share in major product categories • 42 facilities in U.S., Canada, England and Germany • 2,100 employees • 34 acquisitions since 1995 • 2010 revenue $640 million • Market cap ~ $330 million 7
Slide 8: #1 in Key Markets
# 1 in Key Markets 8
Slide 9: Growing Nonresidential Exposure
Growing Nonresidential Exposure Focused on Repair, Remodel & Replacement 2007 2011 30% 40% Residential 70% 60% Nonresidential 9
Slide 10: Focus on Repair & Remodel, Replacement
Focus on Repair & Remodel, Replacement Residential New 60% Single Family 15% New Multi-Familiy Channels Nonresidential Residential 10% Distribution 55% 45% Repair & Retail 45% Remodel OEM 30% Direct 10% 10% 75 Non-Residential 40% Water / Architectural Wastewater New Construction & Security Other Pro
Slide 11: Growing Non-Residential Penetration
Growing Non-Residential Penetration Applications End Markets Market Position Bar Grating Walkways Oil, gas, mining #1 Platforms Industrial Safety barriers Wastewater & Water Ventilation Treatment Drainage Leisure & Sports Parks Perforated Metal Lighting Agriculture #1 Arc
Slide 12: Longstanding Residential Leadership
Longstanding Residential Leadership Market Position Roof & foundation ventilation products #1 Mail storage (single & cluster) #1 Rain dispersion #1 Flashing, soffits, trim, metal lath #1 Metal building accessories Regional Leader 12
Slide 13: Improved Efficiency & Margin Leverage
Improved Efficiency & Margin Leverage 13
Slide 14: Aggressive Response to Macro Challenges
Aggressive Response to Macro Challenges Reshaping the business for 3+ years Restructuring • Consolidated manufacturing & distribution facilities Cost Reduction • Implemented lean initiatives companywide Operational Improvement • Deployed new integrated IT systems 14
Slide 15: Same Coverage with Fewer Facilities
Same Coverage with Fewer Facilities 34 facilities closed since 9/30/2007 • Same manufacturing capacity • Lower costs • Fewer distribution centers • Less working capital 42 Current Facilities Office Distribution Center Manufacturing Facility
Slide 16: Results of Recent Initiatives
Results of Recent Initiatives Gibraltar is strongly leveraged to future sales growth • Distribution facilities reduced from 32 to 7 • 2010 operating expenses reduced by $80 million versus 2008 • Improved alignment between raw materials / selling prices • Enhanced sales and supply chain planning • Wo
Slide 17: Near-term Growth Outlook
17 Near-term Growth Outlook GIBRALTAR
Slide 18: Near-term Growth Drivers
Near-term Growth Drivers Gibraltar is positioned to continue outgrowing the overall building products market Exposure to three fast-growing segments Incremental improvement in nonresidential Foreclosures replacement driving increased residential Industrial repair & end markets remodeling leading the
Slide 19: Increasing USA Fixed Investment
Increasing USA Fixed Investment Forecast 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.) bottomed in
Slide 20: Improving Residential Remodeling Market
Improving Residential Remodeling Market Leading Indicator of Remodeling Activity (LIRA) forecasts growth in 2011 Homeowner Improvements Four-Quarter Moving Four-Quarter Moving Totals Rate-of-Change Billions of $ $160 40% US Census Spending Estimates 30% $150 $144.2 LIRA projections 20% $139.1 $140 1
Slide 21: Focused on Organic Growth
Focused on Organic Growth Increase • More stores with more of our products Penetration of • Sales focus on programs vs. individual products Existing Accounts Broaden Geographic • Add new customers & stores Coverage Expand Product • Existing product categories Portfolio • Adjacent product categories
Slide 22: Blue Chip Customer Base
Blue Chip Customer Base Gibraltar’s retail and wholesale customer relationships provide an industry-leading platform for growth Residential Non-Residential 22
Slide 23: Disciplined Approach to M&A-driven Growth
Disciplined Approach to M&A-driven Growth Focused on bolt-on acquisitions delivering enhanced earnings & sales growth with improved ROI Enhance Product / Leadership Positions & Expand Range of Products • Offer long-term growth / higher value add • Provide opportunity to further expand market share •
Slide 24: 2011 Strategic Transactions
2011 Strategic Transactions Gibraltar has acquired two market leaders while divesting a distant #2 Divested United Steel Products Company (USP) - Distant #2 competitor - Limited opportunity to gain market share - Divestiture enables capital allocation to businesses with greater potential Acquired D.
Slide 25: Progress on Our Financial Targets
Progress on Our Financial Targets LTM March 2007 2008 2009 2010 2011 Targets Housing Starts (U.S. Census Bureau) 1,350k 905k 554k 585k ≈ 1,000k Revenues ($Ms) 842 917 639 637 654 900 - 950 Operating Margin 7% 7% 4% 2% 3% 10% EBITDA Margin 10% 11% 8% 6% 7% 13% Net Income margin 2.3% 3.3% 0.6% -0.6% 0
Slide 26: Expectations for 2011
Expectations for 2011 Continued improvement on top and bottom lines • Organic and M&A-driven growth in key building product market segments • Improved alignment between raw materials / selling prices • Continued focus on lean operations; leveraging lower cost structure • Enhanced operating leverage
Slide 27: Gibraltar Value Proposition
Gibraltar Value Proposition #1 in Key • Leading market share in strongest building Markets products segments 3+ Years of • Low-cost manufacturing and distribution capacity Restructuring • Improved operating leverage Accelerating • Continued sales penetration with existing customers Growth • Expandin
Slide 28: Q & A Session
Q & A Session 28
Slide 29: Q1 Overview
Q1 Overview • Net sales up 12% • Continued improvements in operating efficiency • Lower days of net working capital • Divested USP on March 10 • Cash position up $44 million • Acquired D.S. Brown Company in early Q2 29
Slide 30: Q1 Highlights
Q1 Highlights Revenue up 12%… pricing and volume Profitability up… operating margin before special charges rises 430 bps on sales leverage and lower SG&A expense Stronger net working capital… down to 56 days Net debt reduction continued… 18% net debt-to-cap; no draws on revolver Increased and ample
Slide 31: Q1 Sequential Improvement
Q1 Sequential Improvement Q1 ‘11 Q4 ‘10 * $163.6 Revenues Revenues $144.1 • Increase primarily from non-residential markets 14% • Volume and price improvements Operating Operating Income Income $9.4 • Gross profit rose $10M; and gross margin up 400 (Loss)** bps to 19% on volume & net improvement
Slide 32: YOY Profit Improvement
YOY Profit Improvement Q1 ‘11 Q1 ‘10 * Revenues • Rise primarily from non-residential markets Revenues $163.6 $146.7 • Volume and price improvements 12% Operating Income • Volume & price increases offset the higher raw material costs Operating $9.4 • SG&A decreased due to $2M reduction in Income
Slide 33: Q1 2011 Non-GAAP Reconciliation
Q1 2011 Non-GAAP Reconciliation Thee Months Ended March 31, 2011 As Reported in GAAP Acquisition Surrendered Restructuring Non-GAAP Statements Costs Compensation Costs Item Reported Net sales $ 163,563 $ - $ - $ - $ 163,563 Cost of sales 133,518 - - (858) 132,660 Gross profit 30,045 - - 858 30,903 S
Slide 34: LTM Q1 2011 Non-GAAP Reconciliation
LTM Q1 2011 Non-GAAP Reconciliation Last Twelve Months Ended March 31, 2011 Non-GAAP Item Reported Net sales $ 654,343 Cost of sales 539,715 Gross profit 114,628 SG&A expense 95,911 Intangible asset impairment - Operating income 18,717 Operating margin 2.9% Interest expense (17,598) Equity in partne
Slide 35: 2010 Non-GAAP Reconciliation
2010 Non-GAAP Reconciliation Year Ended December 31, 2010 Intangible Deferred Discontinued As Reported Asset Ineffective Tax Non-GAAP As Reported Operations in GAAP Impairment Interest Restructuring Valuation Item Previously Restatement Statements Adjustment Rate Swap Costs Allowance Reported Net sa
Slide 36: Q1 2010 Non-GAAP Reconciliation
Q1 2010 Non-GAAP Reconciliation Three Months Ended March 31, 2010 As Reported Intangible Ineffective As Reported Discontinued in GAAP Asset Interest Rate Restructuring Non-GAAP Previously Restatement Statements Adjustment Swap Costs Item Reported Net sales $ 157,528 $ (10,854) $ 146,674 $ - $ - $ -
Slide 37: 2009 Non-GAAP Reconciliation
2009 Non-GAAP Reconciliation Year Ended December 31, 2009 Discontinued As Reported Intangible Deferred Non-GAAP As Reported Operations in GAAP Asset Financing Restructurin Item Previously Restatement Statements Impairment Costs g Costs Reported Net sales $ 691,771 $ (52,695) $ 639,076 $ - $ - $ - $
Slide 38: 2008 Non-GAAP Reconciliation
2008 Non-GAAP Reconciliation Year Ended December 31, 2008 Discontinued As Reported in As Reported Operations GAAP Restructuring Non-GAAP Previously Restatement Statements Costs Item Reported Net sales $ 986,840 $ (69,364) $ 917,476 $ - $ 917,476 Cost of sales 788,281 (53,578) 734,703 (3,891) 730,812
Slide 39: 2007 Non-GAAP Reconciliation
2007 Non-GAAP Reconciliation Year Ended December 31, 2007 Discontinued As Reported in As Reported Operations GAAP Restructuring Non-GAAP Previously Restatement Statements Costs Item Reported Net sales $ 929,022 $ (86,938) $ 842,084 $ - $ 842,084 Cost of sales 742,725 (64,039) 678,686 (406) 678,280 G
Slide 40: EBITDA Reconciliation
GIBRALTAR INDUSTRIES, INC. EBITDA Reconciliation (unaudited) (in thousands) Year Ended December 31, LTM 2007 2008 2009 2010 March 2011 Net income (loss) from continuing operations before special charges $ 19,281 $ 27,837 $ 3,600 $ (4,049) $ 751 Interest expense 25,402 23,820 20,009 18,290 17,598 Pro
Slide 41: Investor Presentation June 20-21, 2011
Investor Presentation June 20-21, 2011
Gibraltar Industries — Investor Presentation (June 2011) on 6ix