Gibraltar Announces Third Quarter 2023 Financial Results

EPS: GAAP up 19%, Adjusted up 23% on Flat Net Sales

Strong Cash Generation on Higher Margins, Working Capital Management

Backlog up 5%, End Market Demand Remains Strong

Raising 2023 EPS; Narrowing 2023 Net Sales Outlook

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-month period ended September 30, 2023.

“Our focus in 2023 has been to drive quality of earnings through profitability expansion and cash flow improvement, and this has paid off. In the third quarter, on an adjusted basis, operating income increased 19%, EPS increased over 23%, and we generated 23% free cash flow on flat net sales. Our results year to date allow us to increase our earnings and free cash flow guidance and narrow our revenue guide. With order backlog up over 5% versus last year, our fundamentals are solid, and we are positioned for a strong end to the year,” stated Chairman and CEO Bill Bosway.

Third Quarter 2023 Consolidated Results

Net sales were flat, driven by the timing of active projects shifting from the third quarter in project-based businesses, and price management initiatives in the Residential business. These headwinds were positively offset by revenue from recent acquisitions and market participation gains across the business.

GAAP earnings increased to $39.3 million, or $1.28 per share. Adjusted net income increased 19.0% to $42.5 million, or $1.38 per share, and adjusted EPS increased 23.2% driven by solid execution. Free cash flow to net sales of 23.0% compared to 8.6% in the prior year was driven by improved margin performance and working capital management.

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.

Third Quarter Segment Results

Renewables

Net sales were down 4.2% as module supply, local permitting delays, and further delay of the final Inflation Reduction Act tax credit guidelines impacted customer start dates of contracted and active projects in the quarter. New order bookings remained robust with order backlog up 13.3% versus prior year.

Adjusted operating margin increased 380 basis points versus the prior year as the team continued to execute well across the business. Assuming no change in industry dynamics, management expects relatively flat net sales in the fourth quarter, with net sales in the second half accelerating from the first half.

Residential

Net sales increased 5.6% with recent acquisitions adding 8.8%. Organic sales decreased 3.2% driven by price adjustments in response to the downward movement in commodity prices, and 80/20 initiatives targeting less attractive product lines. The company continues to grow participation with new and existing customers in its core products, and through expansion into new regions.

Adjusted operating income improved 17.9% with increased volume, improved alignment of price/cost, implementation of additional 80/20 initiatives, and favorable product line mix. Adjusted operating margin expanded 200 basis points and management expects continued strong performance through year-end.

Agtech

Net sales on an adjusted basis were down 26.3% as the start of new project construction was delayed within the quarter. New orders continued to accelerate, increasing backlog 9.4% sequentially; the company expects these orders, combined with projects now underway, to drive revenue acceleration in the fourth quarter.

Adjusted operating margin decreased 510 basis points as net sales shifted from the third to the fourth quarter.

Infrastructure

Net sales and order backlog increased 22.5% and 6.2% respectively driven by solid end market demand and market participation gains, and management expects positive momentum to continue for the remainder of the year.

Operating income increased 146.2% and operating margins improved 1,300 basis points driven by strong execution, 80/20 productivity, supply chain efficiency, and product line mix.

Business Outlook

Mr. Bosway concluded, “Given our results for the first nine months and the momentum we carry into the fourth quarter, we are adjusting our outlook for EPS upward, and narrowing our 2023 net sales outlook. We expect to deliver improved profitability and cash flow.”

Gibraltar is raising its guidance for earnings for the full year 2023. GAAP EPS is now expected to range between $3.51 and $3.71, compared to $2.56 in 2022, and adjusted EPS is now expected to range between $4.05 and $4.15, compared to $3.40 in 2022. The outlook for consolidated net sales narrows to between $1.37 billion and $1.40 billion, compared to $1.38 billion in 2022.

For the complete press release, click here.

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.

Contact:

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

Source: Gibraltar Industries, Inc.