Gibraltar Industries' stock closed at an all-time low Thursday after suffering its worst quarterly loss in 17 years as the steep decline in its key automotive and housing markets cut sales by 11 percent.
The $22 million fourth-quarter loss wasn't just the fourth quarterly loss that the Hamburg-based building products and steel processing has posted since it went public in 1993. The loss was five times bigger than the worst quarterly loss that the company previously had endured.
With business conditions deteriorating rapidly beginning in November, Gibraltar executives said Thursday they are focusing on conserving cash until its markets improve -- something they do not expect to occur until this summer at the earliest.
Gibraltar expects to lose money again during the current quarter, while returning to profitability in the second quarter as seasonal demand picks up.
"We see the first quarter as being very challenging, with only marginally better earnings than the fourth quarter of 2008," said Henning Kornbrekke, Gibraltar's president and chief operating officer.
The news pushed Gibraltar's stock down by nearly 13 percent, with the shares dropping 96 cents to $6.49, the lowest closing price since the company went public in November 1993. The shares have lost 46 percent of their value this year.
Company executives said the ongoing efforts to reduce costs should help Gibraltar become profitable again in the second quarter, despite a continued drop in sales. The company, however, said it would not provide detailed earnings guidance because of the uncertain economic conditions.
To conserve cash, the company said it was suspending its dividend and reducing capital spending. Gibraltar executives said they believe they will be able to meet all of its loan covenants this year, even if volumes fall by as much as 30 percent.
"These are clearly unprecedented times in the economy of the United States and around the world," said Brian Lipke, Gibraltar's chairman and chief executive officer, during a conference call.
Lipke said conditions in its markets have worsened markedly since November, as sales volumes plunged.
Gibraltar loss of $22 million, or 73 cents per share, compared with a loss of $1.3 million, or 4 cents per share, a year earlier. The earnings were far worse than the loss of 31 cents per share worse that analysts were expecting. Sales dropped to $249 million from $280 million.