Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - GIBRALTAR INDUSTRIES, INC. | l38732e8vk.htm |
| EX-99.2 - EX-99.2 - GIBRALTAR INDUSTRIES, INC. | l38732exv99w2.htm |
| EX-10.2 - EX-10.2 - GIBRALTAR INDUSTRIES, INC. | l38732exv10w2.htm |
| EX-10.1 - EX-10.1 - GIBRALTAR INDUSTRIES, INC. | l38732exv10w1.htm |
Exhibit 99.1
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
The following unaudited pro forma condensed combined financial data are based on our historical
financial statements. The information included in the “Gibraltar Historical” column of the
unaudited pro forma condensed combined financial data for the years ended December 31, 2008, 2007,
and 2006 sets forth our historical statement of income data for the years ended December 31, 2008,
2007, and 2006 which are derived from our Annual Report on Form 10-K filed February 25, 2009. The
information included in the “Gibraltar Historical” column of the unaudited pro forma condensed
combined financial data as of and for the nine months ended September 30, 2009 sets forth our
historical balance sheet and statement of income data as of and for the nine months ended September
30, 2009 which is derived from our Quarterly Report on Form 10-Q filed November 5, 2009.
The information in the “Pro Forma” column of the unaudited pro forma condensed combined financial
data gives effect to the following for the years ended December 31, 2008, 2007, and 2006 and the
nine months ended September 30, 2009 as if they occurred on January 1, 2006:
| • | the sale of certain assets and liabilities of the Processed Metal Products segment (the “Transaction”); | ||
| • | the use of the proceeds thereof to repay a portion of our outstanding debt; and | ||
| • | the use of proceeds from the collection of receivables of the Processed Metal Products that were not sold in the Transaction to repay a portion of our outstanding debt |
The unaudited pro forma adjustments are based on available information and certain assumptions that
we believe are reasonable. However, these unaudited pro forma adjustments do not include any
adjustments to the selling price of the Processed Metal Products segment asset sale. The final
sales price of the assets of the Processed Metal Products segment will be determined based upon the
actual working capital transferred when the transaction closes.
Pro forma adjustments have been recorded to record the effect of the sale of certain assets and
liabilities, and the reclassification to discontinued operations of the results of the operations
of, our Processed Metal Products segment. The adjustments with respect to the use of proceeds from
the Transaction and from the collection of receivables, which were not sold in the Transaction to
reduce outstanding debt reflects interest expense based on average rates on our debt during the
respective periods.
Our unaudited pro forma financial data do not purport to present what our actual results would have
been if the Transaction described above had occurred on January 1, 2006 and are not necessarily
indicative of our future financial position or results. For example, we expect our future results
to be affected by incurring a loss on the disposal of certain assets of the Processed Metal
Products segment. While we are unable to calculate the exact amount of this loss until the after
the closing of the Transaction, when adjustments to the selling price of the Processed Metal
Products segment assets have been determined, we expect it to be in the range of $17 million to $21
million.
You should read the unaudited pro forma condensed combined financial data set forth below in
conjunction with the audited and unaudited consolidated financial statements and the related notes
of our Company.
Unaudited Pro Forma Condensed Combined Balance Sheet
As of September 30, 2009
As of September 30, 2009
| Processed Metal | ||||||||||||
| Products Disposition | ||||||||||||
| Historical | Pro Forma | |||||||||||
| Gibraltar | Adjustments (1) | Pro Forma | ||||||||||
Assets |
||||||||||||
Current assets: |
||||||||||||
Cash and cash equivalents |
$ | 15,101 | $ | — | $ | 15,101 | ||||||
Accounts receivable, net |
120,890 | (20,494 | ) | 100,396 | ||||||||
Inventories |
109,821 | (15,982 | ) | 93,839 | ||||||||
Other current assets |
23,529 | (3,959 | )(2) | 19,570 | ||||||||
Assets of discontinued operations |
1,410 | 20,189 | 21,599 | |||||||||
Total current assets |
270,751 | (20,246 | ) | 250,505 | ||||||||
Property, plant, and equipment |
231,649 | (53,844 | ) | 177,805 | ||||||||
Goodwill |
425,572 | — | 425,572 | |||||||||
Acquired intangibles |
84,561 | — | 84,561 | |||||||||
Investment in partnership |
2,532 | (2,532 | ) | — | ||||||||
Other assets |
18,147 | (226 | ) | 17,921 | ||||||||
Assets of discontinued operations |
— | 3,529 | 3,529 | |||||||||
| $ | 1,033,212 | $ | (73,319 | ) | $ | 959,893 | ||||||
Liabilities and Shareholders’ Equity |
||||||||||||
Current liabilities: |
||||||||||||
Accounts payable |
$ | 79,760 | $ | (14,667 | ) | $ | 65,093 | |||||
Accrued expenses |
44,177 | (1,854 | ) | 42,323 | ||||||||
Current maturities of long-term debt |
2,708 | — | 2,708 | |||||||||
Total current liabilities |
126,645 | (16,521 | ) | 110,124 | ||||||||
Long-term debt |
262,661 | (27,587 | )(3) | 235,074 | ||||||||
Deferred income taxes |
69,207 | (12,130 | ) | 57,077 | ||||||||
Other non-current liabilities |
18,996 | (229 | ) | 18,767 | ||||||||
Shareholders’ equity |
555,703 | (16,852 | )(4) | 538,851 | ||||||||
| $ | 1,033,212 | $ | (73,319 | ) | $ | 959,893 | ||||||
Notes to the unaudited pro forma condensed balance sheet
| (1) | Reflects the adjustments for the carrying value of assets and liabilities that were sold and remaining assets that will be reclassified to discontinued operations, as reflected in the following table as of September 30, 2009 (in thousands): |
| Assets and | Assets to be Classified | |||||||||||
| Liabilities to | in Discontinued | |||||||||||
| be Sold | Operations | Total | ||||||||||
Assets: |
||||||||||||
Accounts receivable |
$ | 305 | $ | 20,189 | $ | 20,494 | ||||||
Inventories |
15,982 | — | 15,982 | |||||||||
Other current assets |
1,559 | — | 1,559 | |||||||||
Property, plant, and equipment |
50,315 | 3,529 | 53,844 | |||||||||
Investment in partnership |
2,532 | — | 2,532 | |||||||||
Other assets |
226 | — | 226 | |||||||||
Liabilities: |
||||||||||||
Accounts payable |
$ | 14,667 | $ | — | $ | 14,667 | ||||||
Accrued expenses |
1,854 | — | 1,854 | |||||||||
Deferred tax liabilities |
12,130 | — | 12,130 | |||||||||
Other non-current liabilities |
229 | — | 229 | |||||||||
| (2) | Reflects the $1.6 million of Processed Metal Products’ assets noted above and a $2.4 million tax liability due from the tax gain recognized on the asset sale. As of September 30, 2009, the Company recorded an asset for income taxes receivable; therefore, the adjustment for the liability noted above is recorded as a reduction to other current assets. | |
| (3) | Reflects the reduction in outstanding debt related to use of the sale proceeds of $34 million, net of an estimated $6.4 million working capital adjustment as defined within the asset purchase agreement. | |
| (4) | Reflects the loss on disposal that would have been recorded had the assets and liabilities been sold on September 30, 2009. |
Unaudited Pro Forma Condensed Combined Statement of Income
For the Year Ended December 31, 2006
For the Year Ended December 31, 2006
| Processed Metal | ||||||||||||
| Products Disposition | ||||||||||||
| Historical | Pro Forma | |||||||||||
| Gibraltar | Adjustments (a) | Pro Forma | ||||||||||
Net sales |
$ | 1,125,864 | $ | (263,577 | ) | $ | 862,287 | |||||
Cost of sales |
885,254 | (238,691 | ) | 646,563 | ||||||||
Gross profit |
240,610 | (24,886 | ) | 215,724 | ||||||||
Selling, general, and administrative expense |
128,920 | (9,777 | ) | 119,143 | ||||||||
Income from operations |
111,690 | (15,109 | ) | 96,581 | ||||||||
Interest expense |
(26,226 | ) | 3,099 | (b) | (23,127 | ) | ||||||
Equity in partnerships’ (loss), (impairment), and other income |
(12,900 | ) | 13,883 | 983 | ||||||||
Income before taxes |
72,564 | 1,873 | 74,437 | |||||||||
Provision for income taxes |
27,436 | 708 | (c) | 28,144 | ||||||||
Income from continuing operations |
$ | 45,128 | $ | 1,165 | $ | 46,293 | ||||||
Income per share from continuing operations — Basic |
$ | 1.52 | $ | 1.56 | ||||||||
Weighted average shares outstanding — Basic |
29,712 | 29,712 | ||||||||||
Income per share from continuing operations — Diluted |
$ | 1.50 | $ | 1.54 | ||||||||
Weighted average shares outstanding — Diluted |
30,006 | 30,006 | ||||||||||
Unaudited Pro Forma Condensed Combined Statement of Income
For the Year Ended December 31, 2007
For the Year Ended December 31, 2007
| Processed Metal | ||||||||||||
| Products Disposition | ||||||||||||
| Historical | Pro Forma | |||||||||||
| Gibraltar | Adjustments (a) | Pro Forma | ||||||||||
Net sales |
$ | 1,198,715 | $ | (269,693 | ) | $ | 929,022 | |||||
Cost of sales |
983,495 | (247,007 | ) | 736,488 | ||||||||
Gross profit |
215,220 | (22,686 | ) | 192,534 | ||||||||
Selling, general, and administrative expense |
139,479 | (9,421 | ) | 130,058 | ||||||||
Income from operations |
75,741 | (13,265 | ) | 62,476 | ||||||||
Interest expense |
(32,498 | ) | 2,940 | (b) | (29,558 | ) | ||||||
Equity in partnerships’ income and other income |
1,172 | (743 | ) | 429 | ||||||||
Income before taxes |
44,415 | (11,068) | 33,347 | |||||||||
Provision for income taxes |
17,476 | (4,355) | (c) | 13,121 | ||||||||
Income from continuing operations |
$ | 26,939 | $ | (6,713 | ) | $ | 20,226 | |||||
Income per share from continuing operations — Basic |
$ | 0.90 | $ | 0.68 | ||||||||
Weighted average shares outstanding — Basic |
29,867 | 29,867 | ||||||||||
Income per share from continuing operations — Diluted |
$ | 0.89 | $ | 0.67 | ||||||||
Weighted average shares outstanding — Diluted |
30,116 | 30,116 | ||||||||||
Unaudited Pro Forma Condensed Combined Statement of Income
For the Year Ended December 31, 2008
For the Year Ended December 31, 2008
| Processed Metal | ||||||||||||
| Products Disposition | ||||||||||||
| Historical | Pro Forma | |||||||||||
| Gibraltar | Adjustments (a) | Pro Forma | ||||||||||
Net sales |
$ | 1,232,299 | $ | (245,459 | ) | $ | 986,840 | |||||
Cost of sales |
996,193 | (214,818 | ) | 781,375 | ||||||||
Gross profit |
236,106 | (30,641 | ) | 205,465 | ||||||||
Selling, general, and administrative expense |
154,637 | (12,986 | ) | 141,651 | ||||||||
Income from operations |
81,469 | (17,655 | ) | 63,814 | ||||||||
Interest expense |
(29,235 | ) | 1,860 | (b) | (27,375 | ) | ||||||
Equity in partnerships’ income and other income |
724 | (448 | ) | 276 | ||||||||
Income before taxes |
52,958 | (16,243) | 36,715 | |||||||||
Provision for income taxes |
19,553 | (5,997) | (c) | 13,556 | ||||||||
Income from continuing operations |
$ | 33,405 | $ | (10,246 | ) | $ | 23,159 | |||||
Income per share from continuing operations — Basic |
$ | 1.11 | $ | 0.77 | ||||||||
Weighted average shares outstanding — Basic |
29,981 | 29,981 | ||||||||||
Income per share from continuing operations — Diluted |
$1.11 | $ | 0.77 | |||||||||
Weighted average shares outstanding — Diluted |
30,193 | 30,193 | ||||||||||
Unaudited Pro Forma Condensed Combined Statement of Income
For the Nine Months Ended September 30, 2009
For the Nine Months Ended September 30, 2009
| Processed Metal | ||||||||||||
| Products Disposition | ||||||||||||
| Historical | Pro Forma | |||||||||||
| Gibraltar | Adjustments(a) | Pro Forma | ||||||||||
Net sales |
$ | 647,050 | $ | (99,389 | ) | $ | 547,661 | |||||
Cost of sales |
550,166 | (108,948 | ) | 441,218 | ||||||||
Gross profit |
96,884 | 9,559 | 106,443 | |||||||||
Selling, general, and administrative
expense |
89,401 | (7,126 | ) | 82,275 | ||||||||
Goodwill impairment |
25,501 | — | 25,501 | |||||||||
Income from operations |
(18,018 | ) | 16,685 | (1,333 | ) | |||||||
Interest expense |
(19,609 | ) | 623 | (b) | (18,986 | ) | ||||||
Equity in partnerships’ income and
other income |
163 | (55 | ) | 108 | ||||||||
Income before taxes |
(37,464 | ) | 17,253 | (20,211 | ) | |||||||
Provision for income taxes |
(14,276 | ) | 6,574 | (c) | (7,702 | ) | ||||||
Income from continuing operations |
$ | (23,188 | ) | $ | 10,679 | $ | (12,509 | ) | ||||
Income per share from continuing
operations — Basic |
$ | (0.77 | ) | $ | (0.42 | ) | ||||||
Weighted average shares outstanding —
Basic |
30,126 | 30,126 | ||||||||||
Income per share from continuing
operations — Diluted |
$ | (0.77 | ) | $ | (0.42 | ) | ||||||
Weighted average shares outstanding —
Diluted |
30,126 | 30,126 | ||||||||||
Notes to the unaudited pro forma condensed statements of income
| (a) | Reflects the adjustment to remove the historical operating results of the Processed Metal Products segment which will be reflected as discontinued operations due to the asset sale. |
| (b) | Reflects the reduction in interest due to assumed use of $45.4 million of proceeds consisting of the following (in thousands): |
Proceeds from asset sale |
$ | 27,587 | ||
Cash taxes due at close of sale |
(2,400 | ) | ||
Collection of accounts receivable not sold in transaction |
20,189 | |||
Net proceeds from asset sale |
$ | 45,376 | ||
| We assume the net proceeds from the asset sale would be used to repay outstanding debt and reduce interest expense, calculated based upon weighted average rates of our revolving debt in effect for each period presented, as follows (dollars in thousands): |
| Years Ended December 31, | Nine Months Ended | |||||||||||||||
| 2006 | 2007 | 2008 | September 30, 2009 | |||||||||||||
Reduction of interest |
$ | 3,099 | $ | 2,940 | $ | 1,860 | $ | 623 | ||||||||
Weighted average interest rate |
6.83 | % | 6.48 | % | 4.10 | % | 1.83 | % | ||||||||
| (c) | Reflects the tax effect of our pro forma adjustments at the effective tax rate of the period to which the adjustments pertain. |