Brian J. Lipke, longtime head of Gibraltar Industries, is retiring as CEO of the building products company as part of a succession-planning process, and will be succeeded by company President Frank Heard as of Jan. 1, the company announced Tuesday.
Lipke, 63, who has been CEO since 1987 and is the company’s biggest individual shareholder, will continue as chairman of the publicly traded firm. His family has run the former Gibraltar Steel for more than four decades.
Heard, a 55-year-old industry veteran who joined the company as president and chief operating officer just six months ago, will also join the board of directors.
The company released the news as it also swung back to a profit of $9.6 million for the third quarter, compared with a net loss of $13.7 million a year ago. The company’s shares rose by 37 cents, or 2.55 percent, to close at $14.90 on Tuesday.
In a news release announcing the transition, Lipke said Heard has visited each of the company’s facilities since joining the firm.
“Frank Heard’s hiring earlier this year was part of a multiyear strategic succession plan developed by the board,” Lipke said.
Lipke called the promotion the completion of the “next step” in succession planning and said it’s “all part of the strategic plan to accelerate shareholder value creation.”
Heard, who has spent 25 years working in building products, came to Gibraltar from Illinois Tool Works, where he was president of the ITW Building Components Group, a division of the Fortune 200 global diversified industrial manufacturer. He was responsible for the strategic direction and operational performance of 25 businesses in 18 countries, across residential and commercial construction, retail and component manufacturing.
Heard praised Gibraltar executives’ efforts to “resize and restructure” to meet changes in the market. He said Gibraltar has “an opportunity to accelerate our growth strategy and drive higher returns” by eliminating complexity, creating the potential for innovation, and shifting employees and capital to operate more effectively.
The company also appointed Craig A. Hindman, 59, and Vinod M. Khilnani, 62, as independent directors, effective immediately. Hindman, a global executive with 35 years of leadership background and former executive vice president and CEO for the Industrial Packaging Group at Illinois Tool Works, replaces Gerald S. Lippes, who is retiring Dec. 31. Khilnani, former chairman and CEO of sensors and electronics parts company CTS Corp. replaces director Arthur A. Russ Jr., who will retire from the board just before the 2015 annual meeting.
The new directors will begin their board service immediately, allowing for some overlap and a smoother transition.
Third-quarter profits at Gibraltar were 31 cents per share, a dramatic improvement from a loss of 44 cents per share in the same period of 2013. Those results included special items in both quarters, particularly a $23.3 million after-tax impairment charge a year ago related to Gibraltar’s European business and a $100,000 net gain in the recent quarter because of acquisition-related gains and a business restructuring.
Not counting those factors, adjusted net income fell by 1 percent, to $9.5 million, or 30 cents per share, from $9.6 million, or 31 cents per share, a year ago, as the company reduced staff in the quarter and benefited from consolidations in manufacturing. Net sales rose by 8 percent, to $234.1 million.
Lipke credited better-than-expected revenues in residential products, driven by rising residential market demand for its centralized mailbox products and higher roofing-related sales. Net revenues rose by 13 percent to, $122.1 million, while the operating profit margin expanded.