BUFFALO, NEW YORK (January 11, 2001) - Gibraltar (Nasdaq: ROCK) said today that the continued slowdown in the economy - especially in the automotive and building products areas, which are Gibraltar's two largest markets - has reduced its sales and earnings expectations for the fourth quarter.
As a result of this slowdown, the Company said it now expects its fourth-quarter sales will be approximately $150 million, and its fourth-quarter diluted earnings per share will be in the range of $.24 to $.26. Prior to today's announcement, the consensus earnings estimate for the fourth quarter was $.38 per share.
Gibraltar said it expects to report sales for the year ended December 31, 2000, of approximately $677 million, versus $622 million in 1999, and diluted earnings per share of $1.90 to $1.92, versus $1.95 in 1999.
"Many of our largest customers saw their business continue to slow in the fourth quarter, and some saw a significant slowdown. The automotive business, which was running at a record pace in the first nine months of 2000, slowed sharply late in the fourth quarter due to falling demand, which led to extended customer shutdowns. The building products business continued to feel the impact of the six interest rate hikes over the last 18 months. And higher energy costs put an additional strain on our earnings," said Brian J. Lipke, Chairman and Chief Executive Officer.
"Even though we will generate record sales and near-record earnings in 2000, and we continue to be a solid company that is poised for continued growth, we are clearly disappointed by these results," said Mr. Lipke.
"Looking ahead to 2001, we see a number of trends positively affecting our performance. Interest rates are falling, which will help our business in a couple of ways. First, lower rates reduce our interest expense. Additionally, interest-sensitive sectors of the economy, most notably the building and construction products markets, react favorably to rate reductions, which should stimulate increased activity," said Mr. Lipke.
"The price of steel (which is our raw material) has also fallen, which is a development that bodes well for our business. This, to some extent, will help offset the softness we are seeing on the sales side of the ledger," Mr. Lipke added.
"Apart from changing conditions in our operating environment, we will continue to take steps to expand, diversify, and strengthen our company. We are looking at a number of growth initiatives (with both our existing operations and via acquisition), and we are intensifying our efforts to control and reduce our costs wherever possible," said Mr. Lipke.
"We will continue to expand and diversify our customer base, shift more of our business into higher-margin activities, and focus our activities on the fastest-growing steel-consuming and geographic markets. As we have done successfully for many years, we will continue to take the steps necessary to make Gibraltar a stronger and more consistent performer in the future. We believe our longstanding growth strategy is sound, and we look forward to building on our record of achievement and success," said Mr. Lipke.
Gibraltar is a growth-oriented company, with expanding operations in the building and construction products, metal processing, and commercial heat-treating markets. The Company serves approximately 10,000 customers in a variety of industries. It has approximately 3,700 employees and operates 52 facilities in 19 states and Mexico.
Information contained in this release, other than historical information, should be considered forward-looking, and may be subject to a number of risk factors, including: the impact of changing steel prices on the Company's results of operations; changing demand for the Company's products; risks associated with the integration of acquisitions; and changes in interest or tax rates.
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Gibraltar will report its fourth quarter 2000 results and provide guidance for 2001 on January 31, 2001, at 9:15 a.m. Eastern Time. Investors and the general public are invited to listen to an Internet Webcast of the Company's quarterly conference call, which will be held at 2 p.m. Eastern Time on January 31. Details about the call can be found on Gibraltar's Web site (http://www.gibraltar1.com).