Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Tom Hayes – Piper Jaffray.
Tom Hayes – Piper Jaffray
I just had a couple quick questions. Could you briefly talk about that the impact that the rising steel price may have had for the quarter as far as whether there’s some segments you’ve had better luck passing the prices through?
Brian J. Lipke
We’ve kind of anticipated that might be a question today, so I’m going to give a general overview of that and Henning or Ken may want to chime in after I’m done. But let me start out by saying that FIFO inventory pricing gains, which I think is what you’re referring to, are much more directly applicable to service centered businesses. And Gibraltar is not, nor has it ever been, a service center business, period.
Our business today - look at our makeup - is 70% manufactured end products that are sold to the residential and commercial building and industrial markets; 10% of our sales are copper powders, and the remaining 20% are high value add, cold-rolled strip manufacturing activities. So applying service center metrics to this business is simply not appropriate.
We did take a very hard look at this, though. And we, after analyzing it very carefully, estimate that a net of less than $0.05 of our $0.67 cents earned in the quarter could in any way be related to any type of FIFO inventory gain.
Tom Hayes – Piper Jaffray
Secondly, you’ve done a great job on paying down the debt. Do you have a target level you’re shooting for possibly by the end of the year?
Brian J. Lipke
We think of it more in terms of debt to cap ratios, and I think I’d like to have it below 40 by the end of the year.
Tom Hayes – Piper Jaffray
Lastly, could you just give an update of what you’re seeing as far as within the acquisition pipeline going forward?
Brian J. Lipke
Our focus so far this year, Tom, has been on managing our existing business well, and we’ve taken a pretty conservative approach to looking at acquisitions. Not that we’ve stopped looking, but until we felt more comfortable with the position that the business was in and more comfortable with the longer term outlook for the major markets that we serve, we’ve kind of put acquisitions on a side burner - not a back burner, but a side burner.
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