The harsh winter took a toll on Gibraltar Industries’ construction products business during the first quarter, but CEO Brian J. Lipke thinks things are looking up for the Hamburg-based manufacturer.
Gibraltar said Friday that it lost $2.1 million, or 7 cents per share, during the quarter, as the unusually cold and snowy winter weather across the country cut into its sales of residential building products.
But Lipke, Gibraltar’s chairman and chief executive officer, said the first-quarter weakness is expected to be only temporary, with the company’s sales and earnings projected to rebound during the rest of this year as the nation’s housing market strengthens and demand rises for the company’s cluster mail boxes.
And after six years of restructuring and cost-cutting after its key construction markets collapsed during the Great Recession, Lipke said Gibraltar’s business is looking up again.
“We’re in a good spot once again,” Lipke said following the company’s annual shareholders meeting Friday. “It’s taken a lot of hard work.”
That work includes shutting 33 facilities during the last six years, including 24 distribution centers across the country as Gibraltar made an aggressive push to consolidate its operations, resulting in a $16 million reduction in its annual operating expenses. And with its costs down, Lipke said, Gibraltar can become more profitable than ever once its markets rebound.
Almost seven years after the Great Recession began, Lipke said that finally appears to be happening. The housing market is strengthening, the overall economy is slowly gaining momentum, and the industrial sector is showing signs of improvement – all key factors for Gibraltar’s business.
But the company hit a blip in the first quarter, although Lipke said he expects Gibraltar to make up for the slow start over the rest of this year.
“We believe the weather-related challenges we faced in the first quarter will prove to be temporary,” he said. We’ve survived the recession. We’ve righted the ship ... and all of the pieces are in place for improved performance.”
Even with the weaker-than-expected first quarter, Gibraltar said it is sticking with its forecast that the company’s profits, excluding one-time expenses, will improve by about 20 percent this year, to between 76 cents and 90 cents per share, up from 69 cents a year ago. Sales are forecast to grow by 4 percent to 7 percent, even with a first-quarter slump that reduced revenues by 3 percent.
During the first quarter, Gibraltar’s loss narrowed from $3.6 million, or 12 cents per share, a year ago, when the company absorbed nearly $5 million in restructuring charges.
Excluding $400,000 in one-time expenses during the latest quarter, Gibraltar’s adjusted loss was $1.7 million, or 5 cents per share, compared with a profit of $1.2 million, or 4 cents per share, a year ago.
The company’s sales were weaker than expected, sliding to $191 million from $197 million, as revenues from both of its main business segments – residential construction products and infrastructure equipment – dipped by 3 percent.
Lipke said he believes the harsh winter weather caused consumers to delay seasonal purchases, which cut into the company’s sales.
Gibraltar saw improving order flow during April, which Lipke said is a sign that the normal seasonal uptick in construction and infrastructure work is taking place later than normal this year.
The company’s stock closed down 26 cents, or 1.53 percent, at $16.76 on Friday.