Gibraltar Steel Corp.'s fourth-quarter profits rose by 38 percent as the Hamburg-based steel processor reaped some of the benefits of a string of acquisitions that have expanded its customer base and pushed it into new markets.
"This was our seventh straight year of sales and earnings growth, and we have never been in a better position to continue, and possibly accelerate, our sales and earnings growth," said Brian J. Lipke, Gibraltar's chairman and chief executive officer.
The steady rise in the company's profits, which have increased at an annual rate of 22 percent over the last five years, have helped Gibraltar move two years ahead of schedule in its long-term plan of boosting profits to $45 million and sales to $1 billion by 2003, Lipke said.
In the final three months of last year, Gibraltar's profits rose to $4.82 million, or 38 cents per share, from $3.49 million, or 28 cents per share, a year ago. The earnings were slightly better than the 37 cents per share that analysts had been expecting, according to First Call, which tracks earnings estimates.
Gibraltar's sales rose by 33 percent to $144.1 million from $108 million a year ago, in large part because of the four acquisitions that the company made last year. Those acquisitions, which expanded Gibraltar's presence in the steel heat treating and metal building products industries, are expected to add more than $120 million to the company's annual sales.
"We had an excellent year in 1998, with our four acquisitions fueling our growth," Lipke said.
Gibraltar, which also has opened a new 56-inch, cold-rolling steel mill in Cleveland, said it has the capacity to expand its sales by about $300 million if it can find enough orders to fill the unused capacity at those facilities.
Lipke also repeated that the company continues to look for more acquisitions to become a dominant player in the consolidating metal building products and commercial heat treating markets. "Our challenge is to select only the best companies from a growing list of very good ones," he said.
For the year, Gibraltar's profits rose by 21 percent to $19.8 million, or $1.57 per share, from $16.4 million, or $1.30 per share, a year ago. Sales grew by 24 percent to $558 million from $449.7 million.