Weak sales and lower prices in its industrial products markets, combined with stormy early spring weather that delayed the start of home building and renovation projects, led to a 54 percent plunge in Gibraltar Industries’ operating profits during the first quarter.
And since the Hamburg-based construction products manufacturer absorbed nearly $5 million in additional up-front costs because it refinanced its debt to lower its interest expenses substantially going forward, Gibraltar said it lost $3.6 million, or 12 cents per share, during the quarter, compared with a profit of $1.4 million, or 4 cents per share, a year ago.
The debt refinancing, which reduced its interest rate on the debt by 1.75 percentage points, will save the company about $3 million a year in interest expenses, said Kenneth W. Smith, Gibraltar’s chief financial officer, during a conference call Thursday. But the initial costs associated with the refinancing wiped out all the reduced profits from its operations.
Excluding the refinancing costs, Gibraltar’s adjusted earnings tumbled to $1.2 million, or 4 cents per share, from $2.6 million, or 9 cents per share, a year ago, when the company absorbed $1.2 million in acquisition and restructuring costs.
Gibraltar’s sales rose by 2 percent to $197 million from $192 million as the stormy spring weather and the sluggish economy caused revenues to rise half as fast as company executives expected.
“The unanticipated negatives were the winter storms that persisted across many sections of the country through the first quarter and into April, and softer than expected demand beginning in late February in our industrial markets, which also drove increased pricing pressures,” said Brian J. Lipke, Gibraltar’s chairman and chief executive officer.
Gibraltar said it expects its sales to strengthen during the second half of this year, as its housing and industrial markets improve, forecasting revenue growth of 11 percent to 13 percent. The company said it expects its adjusted operating earnings per share, which excludes one-time charges, to rise, too, between 80 cents and 90 cents per share, up from 55 cents last year.
Gibraltar’s stock price sank $1.16, or 6.45 percent, to $16.83 Thursday.