Good day, ladies and gentlemen, and welcome to the Gibraltar Industries Third Quarter 2012 Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to your host today, Mr. David Calusdian, from the Investor Relations firm with Sharon Merrill. Please proceed, sir.

Good morning, everyone, and thank you for joining us. If you have not received a copy of the earnings press release that was issued this morning, you can find it in the Investor Info section of the Gibraltar website, gibraltar1.com. During the prepared remarks today, management will be referring to presentation slides that summarize the company's third quarter performance. These slides are also posted on the website. Please turn to Slide #2 in the presentation. Gibraltar's earnings release and this morning's slide presentation both contain adjusted non-GAAP financial measures. Reconciliations of GAAP to adjusted measures have been appended to the earnings release. Additionally, the company's remarks contain forward-looking statements about future financial results. The company's actual results may differ materially from the anticipated events, performance or results expressed or implied by these forward-looking statements. Gibraltar advises you to read the risk factors detailed in its SEC filings, which can also be accessed through the company's website. On our call this morning are Gibraltar's Chairman and CEO, Brian Lipke; Henning Kornbrekke, President and Chief Operating Officer; and its CFO, Ken Smith. At this point, I will turn the call over to Brian.

Thanks, David. Good morning, everyone, and thank you for joining us on our call today. I'll begin as usual with some brief overview comments and then turn the call over to Henning and Ken for a more detailed review of our results. And then I'll close our prepared remarks with observations about our business outlook. And then of course, following that, we'll open the call to any questions that any of you may have. I'll start my remarks by referring to Slide #3 in our presentation. A confluence of micro factors and events during the third quarter temporarily impacted our industry and reduced third quarter end-market activity, while overall signs point to strengthening end-market demand as we look out into 2'13 and beyond. Henning and Ken are going to discuss those factors in more detail in a few minutes. Although many of the leading indicators are pointing to overall improvement in the U.S. economy going forward, including and perhaps led by, the September report on housing starts, overall demand during the third quarter was less robust than we and many industry observers had anticipated. Our revenues were down 7% from Q3 last year, and that was primarily due to slower U.S. roofing activity and recession-driven weakness in the European automotive and industrial sectors. Weak sales in these markets were only partially offset by stronger demand from our customers in the multifamily building and public infrastructure markets. At the same time however, we continued to benefit from our ongoing efforts to improve the efficiency of our operations, tightly control costs and thereby increase the margin leverage in our business. These improvements together with a moderation in cost associated with the consolidation of our West Coast operations, help offset the margin impact of lower sales during the quarter. These operational improvements bode well for our performance in Q4 and for 2013. In spite of what we expect to be continuing historic low levels of end-market activity, we still anticipate delivering stronger financial results in 2012 than we did in 2011. Looking further ahead in 2013, we expect to realize the full benefits of the time, energy and dollars that we've invested this past year in consolidating and integrating our West Coast operations. The vast majority of these investments will be behind us, reinforcing our confidence in delivering improved bottom line performance from 2012 to 2013, even without the benefit of stronger end-market demand just as we saw from 2011 to 2012, and did from 2010 to 2011. In addition, we've taken a wide range of actions during the past 2 years to strengthen our presence in attractive end markets and product categories. As a result, when we do realize sustainable end-market improvement, we'll be well-positioned for accelerated growth on both the top and bottom lines. Henning and Ken will review our third quarter results in greater detail and then I'll conclude our prepared remarks with some additional comments on our outlook. Henning, I'll turn it over to you.

Thanks, Brian. Turning now to Slide #4, I'll begin with a closer look at our revenue for the quarter, which reflected mixed results in the markets we serve. During the past 3 years, through organic growth, acquisitions and divestitures, we've expanded our presence in the nonresidential, industrial and infrastructure end markets to approximately 50% of our current total sales from 30% in 2008. This diversification has enabled us to offset weak demand in housing and drive growth and profitability in the business despite historically low levels of activity in the single-family housing market. As Brian said, multifamily and infrastructure or non-building construction were pockets of strength in the third quarter and we're capturing a good share of those end markets. In our other markets however, Q3 felt like a pause in an overall improvement continuum that's been slowly gathering strength for a couple of years now. Growth in nonresidential new construction activities seems to have moderated in recent months, and we experienced relatively weak demand for nonresidential building projects in the third quarter. Residential repair and remodeling activity also remains relatively weak. Consumer confidence levels are improving but not to the point where households are feeling confident enough to start the larger home improvement projects they've been postponing over the past few years. The persistent weakness in repair and remodeling, coupled with unusual weather patterns had a negative effect on the building industry, including roofing activity in the third quarter. Roofing is one of our exposures to the residential repair and remodeling market. These factors affect the demand for our roof ventilation and building accessory products. In addition, U.S. roofing sales are unusually strong in Q3 last year, with several sections of the country rebuilding from major storm damage in the first half of 2011, skewing quarter-over-quarter comparisons. On the…

Thanks, Henning, and good morning. And I'll start by continuing with more detail on our P&L results. And the P&L information in this presentation represents adjusted measures for continuing operations and is reconciled in supplemental schedules on the earnings press release. So let's turn to Slide #6 in the presentation, titled Q3 Sequential Performance. Revenues were down 6% from the second quarter, a nearly equivalent degree for both residential and nonresidential products. Prevailing residential demand, we had an unfavorable comparison with last year benefiting from repairs for higher storm activity, while as Henning mentioned, this year's hot and dry weather slowed U.S. roofing activity and related demand for our roofing-related products such as ventilation and rain dispersion. Regarding lower sequential sales of nonresidential products, there were specific large orders shipped in the second quarter that did not repeat in the third quarter involving functionally critical infrastructure products as well as designed to spec fabricated products. Adjusted operating income declined modestly by $1.3 million on a $40 million decrease in revenue. As much of the loss contribution of lower sales was mitigated by improvements in Q3 and the West Coast reorganization and lower SG&A costs. While not shown on Slide 6, the operating margin was essentially unchanged for both periods at nearly 8%. Regarding adjusted diluted EPS, the sequential decline of $0.04 per share was driven by lower volume as a result of the short-term pause in the market recovery which Henning described earlier. Now let's turn to Slide #7 entitled Year-Over-Year Performance. I'll begin by going down the 3 month columns. Revenues were down slightly for the quarter, nearly equivalent for both residential and nonresidential categories. And Henning provided a lot of color on the end-market conditions that affected the reduced demand. Of the 7% revenue decrease, unit volumes decreased…

Thank you, Ken. As summarized on Slide #11, Gibraltar is well-positioned to resume its top line growth when more of our end markets begin to experience meaningful recovery. Our focus on providing our customers with new products, innovative marketing programs and outstanding customer service has enabled us to hold our share in major product categories. In addition, over the past 18 months, we have acquired new product lines that should enable us to penetrate a broader range of markets and channels adding value to national customers. With the cost of our West Coast business integration increasingly behind us, we're also well-positioned to deliver stronger profitability. We're successfully executing on the strategy we put in place at the beginning of the housing downturn. This strategy is focused on improving our underlying operations, tightly controlling costs, and increasing the margin leverage on our business so that we can continue to deliver solid margins even at low demand levels in our major end markets. Since late 2007, we have successfully reconfigured the business, reduced our annual operating expenses, managed commodity cost more effectively, and lowered our working capital by nearly half. At the same time, our positive cash flow has allowed us to reduce our borrowings by nearly half as well. Our strong balance sheet and liquidity have enabled us to rationalize and refocus Gibraltar's business portfolio and product lines through strategic divestitures and acquisitions. And with our strong balance sheet, we are well-positioned to continue pursuing acquisition-driven growth. We remain actively involved in discussions with a number of small and mid-sized companies. These are companies we know as competitors or as suppliers of products that could broaden our portfolio and whose market position and business performance could be enhanced through integration with Gibraltar. As always, we're continuing to be thoughtful and systematic in our approach. Despite the challenging conditions in our end markets, we continue to expect to deliver stronger financial results in 2012 than we did in 2011 and to continue this positive momentum into 2013. That concludes our prepared remarks. And at this point, we'll open the call for any questions that any of you may have. Operator, you can open the line.

[Operator Instructions] Our first question comes from Peter Lisnic with Robert W. Baird.

First question. Can you give us a feel for what the growth rate in Europe was? What sort of impact that had on the top line in the quarter?

It was down a bit but it's been down for...

The European operation was down, as I recall 21% and it is primarily driven by the recession that's there. And as a percent of our total business, it's about 6%, 7% of our total business.

Okay. That's perfect, thanks for that. And then the -- I missed the -- I think I missed at least, the commentary on pushing out the incremental West Coast plant close and the optimization of that footprint. Can you just run through that again and maybe give us a feel as to why the push out and what it might look like from a cost perspective when you do undertake it.

Yes, sure. I think for it's for 2 reasons. One, it's very costly, as you know, to close down and relocate a plant. It's a very large facility and so that closing of a facility or moving the facility has a dramatic impact on our ongoing P&L. That was one of the rationales that we've use. And the other was is that we expect the West Coast volume to start to pickup. We're targeting to see a lot of positive activity on the West Coast and as we examined it more closely, we feel that we might, in a very short period of time, fill the facility to -- close to its opacity, which would give us the full overhead absorption that we've been missing.

So is it safe to say then that, that facility will not be closed and there's no other incremental actions to be taken on the West Coast?

I think at this point that, that's the case. I think we're looking very close. It's a fantastic facility. It is very large, it's almost 350,000 square feet but -- it's really a beautiful facility. And I think we're very heartened with the increase in activity out there and being able to fully utilize the facility will be a real plus for our businesses.

Okay. All right and then the strong free cash...

Just a final thing on that, Peter. We're well along now in the entire integration process out there and as I've stated in my prepared remarks, the majority of the integration activity and the cost associated with this will be behind us by the end of the fourth quarter, putting us in an excellent position next year to have very favorable comparisons from those operations on a year-over-year basis.

Right and that means no -- essentially no costs for 2013. Whereas I think the plan was, maybe, that there would be costs with this plant, perhaps closing, correct?

Exactly.

Okay. All right. And then, balance sheet free cash looked, obviously looked very good. Just wondering what the appetite there is to reinstate the dividend or how we should think about capital allocation as we look forward. And if you want to throw in commentary and acquisition pipeline in that answer, that'll be great.

Okay, from a dividend perspective, it is something that we discussed at the Board of Directors level every quarter. And at this point in time, we think that we can provide a better return to shareholders by continuing to invest in the business as opposed to paying a dividend. If you recall, in the past 2, our dividend yield was always very low. And if we did reinstate, it would be very low at this point in time as well. And so we feel that we can serve the shareholders best by holding onto that cash and utilizing it for business development as opposed to distributing it to the shareholders. So at the present time, with the balance sheet in the condition that it's in, we're going to hold tight and not declare dividends. But it is something that we discuss every quarter with the Board of Directors. From an acquisition perspective, we have a relatively long list of acquisition candidates. As I said in my prepared remarks, the majority of them are small and mid-sized acquisitions. I've mentioned on past calls that Ken Smith has brought to us a much tighter focus and greater discipline in how we evaluate potential acquisition candidates and we're applying that tighter filter to every candidate that we look in. So we're going to be cautious and careful as we look at acquisitions. But nonetheless, there are a number out there and with the balance sheet that we have and the cash in the balance sheet, we expect to continue to be making acquisitions as we look out into -- as we finish up this year and look out into 2013.

Our next question comes from Tim Hayes with Davenport and Company.

Two questions. First, on -- with the hurricane that's come through, can you remind us back when Katrina came through, so I think it was around Q4 of what, '05? How did building products fare in the quarter or 2 after? And I guess part of the reason, it's tough to just look back at the financials because that was, I think, the same quarter you bought AMICO, so it may kind of mix up the results. Just kind of curious what kind of bump in demand you might see with all the repair that is going to likely have to happen up in the Northeast.

It clearly will accelerate the demand for our products. We're very much aware of it. We're trying to support the victims of the terrible situation but we're also preparing our plans to ramp up in the near production activities to support the increased demand that we'll see probably not this quarter, but probably first and second and spilling into the third quarter of next year.

What applications see the most benefit? I figure...

Well we do a lot of roofing applications, our ventilation products, we do some siding, we do some metal roofing and so we -- many of our products do have direct application in the repair and rebuild of the housing market.

And then final question, with all the cost-cutting and consolidation that has continued in '12, what kind of bottom line impact would you get from having the full year effect in '13. Is that a number that can be quantified?

Yes, we think our gross margins are going to improve. It depends what volumes levels you lose by at least 1.5 percentage points. So this year, I think Ken indicated that we're running about 19.7%. I think when we go forward at the increases we've looked at, we get a little bit north of eventually 21% gross margins.

Right. And that 21%, what's the revenue -- do you have a revenue assumption that goes along with that 21%?

Well we're using a reasonable revenue increases going forward, one that's easily attainable and one that we should be pushing on at the end of 2013.

I think the key thing here is that we're anticipating improved results in 2013. Because of a lot of the actions that we've taken in 2012. Before, we look at any tailwind that might develop from end-market activity improvements. The judging how much end-market improvement we might get becomes pretty difficult, but nonetheless, even absent end-market improvement, we believe that we're going to be able to generate improved performance in 2013 primarily because of activities that we have complete control of through internal initiatives.

Right. But just to clarify, if the move -- if there was no revenue growth, you'd still go higher from 19.7% gross margins but you wouldn't get to the 21%?

Yes. That's the factor that's going to impact that. How much volume improvement actually develops during the year. And after the last 5 years, we've become somewhat reticent when it comes to trying to prognosticate and demand improvement. I think if we go back over the last 3 or 4 years, almost every year at this point in time, there were prognosticators out there saying that there's going to be a dramatic improvement in the coming year and I don't think we've seen that as of yet. So we're a little bit hesitant to prognosticate on that. But what we have focused on all along is lowering our costs so that we can make money at these low levels of end-market activity and through continuing efforts to streamline our operations, manage our raw material, supply chain management cost better and reducing overhead where ever we can, we're going to drive improvements in profitability even at these low levels of end-market activity. So there's upside. The question is how much?

We think we'll get at least 1 percentage point improvement in the coming year just with the activities that we've been working on and primarily concluding this year.

Our next question comes from Ken Zener with KeyBanc Capital Markets.

I appreciate your comments, Ken, related to guidance. I just want to be clear, to what -- when you talked about the fourth quarter, the gross margin, was that -- were those comments -- and the 19% for 2012, so is the gross margin, were you talking sequentially when you said the gross margins, I believe in the fourth quarter, being flat, or is that versus last year?

Third quarter was flat relative to prior year at 19.7%.

Right and then when you're talking about the fourth quarter...

I didn't call out the fourth, when I said flatness for the fourth quarter, I was talking about revenue, fourth quarter revenue to a year-ago fourth quarter.

Okay. So the tough comp last year was certainly part of the third quarter challenge. Then when you talked about the 19% for the year, given 3% sales growth, that's another way to back into the fourth quarter. So it does seem as though it's maybe up only modestly year-over-year given your full year guidance of 19%. Would that be...

Yes, that's correct.

Correct?

Yes.

Now when you talk about the 21% gross margin, you were really referring to the third quarter, what it would be like next year, all else being kind of equal, is that correct? And the 1% was for the expectation for the year of the gross margin?

Well, there was some discussion we had that was relative to the volume and we declined to comment on what volume would get us to 21%. And we did say, based on activity level this year, if sales remain at approximately the same level, we'd have approximately a 1 percentage point improvement in gross margins.

Right and that's -- and then this quarter, the sales decline. Was that on the 21% operating leverage basis? Is that what you would kind of give as a baseline for next year?

Yes. Exactly.

And then, Ken, the guidance around -- on 3% sales growth, what was the free cash flow? I know you announced -- you've said $30 million. Is that the same dollar value? I just didn't pick up the percent that you were giving for free cash flow guidance.

For 2013, I think it'll be in the area of 5% -- 5%, 6% of revenues.

Okay, and then I guess to what considering...

Quantifying it, closer to 5%. We're going to probably increase our CapEx spending in '13 over '12 a bit.

Okay. And then could you maybe frame out the M&A. You guys have talked about it in the past. Is there kind of a ceiling we should think about in terms of size and/or the impact on your leverage?

Well size-wise...

We're not looking to over-leverage recovery. I think Brian was very clear in his comments on here. But we've got a very open perspective. We're looking at opportunities of varying sizes from those that are very small bolt-on to others that would be significant. And we'd not at this point, determined there's an absolute size that we would not do.

Okay. And then I guess, and then my last question, roofing is interesting. Obviously you have the right here products that go in there. When you talk about the seasonality of the weather, is that really the heat that we're talking or just the tough comps that we had because of the storm last year?

I think it was both. I think this summer was a very unusual weather pattern across the United States. I think we all would agree to that. It was very dry and it was very hot. And when it is very hot, and again, parts of the country had temperatures over 100 degrees in many areas that don't get temperatures over 90 degrees had continuing days over 90 degrees. People don't just don't do roofing projects when it's that hot. They just don't go up the roof. And that's -- this is the feedback we've gotten from contractors.

Well, it was that and also if it's not raining, your roof's not leaking, so you're not going to fix it.

So it's easier to postpone.

Yes.

But inevitably, it's going to get fixed. I mean we've got a lot of data on roofing repairs and we know the number of houses and we know that when we repair and remodel on roofing is it's about 80%, 85% of the total market activity. And so, we have some real finite numbers that we know what the activity looks like. And many of those have postponed. And so the bad news, it didn't happen in '12. The good news is, this will happen in '13.

Yes, I don't know if you got the significance of that, Ken, but what Henning said is that, when you look at the total roofing market in the United States, somewhere between 80% and 85% of that is reroofing activities. Roofs become obsolete after a certain number of years and have to be replaced. The new build portion of roofing is a relatively small percentage. If you consider that they're somewhere around 130 million homes in the U.S. and we build, this year we're going to build less than 1 million, you could see how those percentages are driven, where they come from. And then the other thing that can impact that, of course, is storm activity. And in 2011, there was greater storm activity and replacement of roofs driven by that, than there was in 2012. At least up until earlier this week, that was the case. Although typically after major storm activity, there's a couple of month lag before the rebuilding and repair process begins to take place. But it can have an impact in all of that.

Our next question comes from Robert Kelly with Sidoti & Company.

The 3Q year-ago bump from storm and related repair, anyway to quantify that? I don't know if you have already, I apologize.

We haven't qualified that and I'm not so sure that we could.

I'm not sure that we can. We thought about that and we -- I'm not sure we could get to a finite number that we could share.

I mean, would use you say it was a material bump in demand?

Not material.

Yes. If you look at the roofing industry statistics, it indicated that the roofing was up around 30%, and again it depends on what reference you use but from prior year, which a little slower, actually, it was up significantly last year. And we did participate in that upswing. That's about as close as we can get to it.

Right, but I mean, roofing and ventilation, and gutter products, what percent of sales is that for Gibraltar on the whole?

Well we said in our remarks that demand -- unit demand was down about 5% of the 7% revenue decline and I would say we'd be in...

I would say just looking at it real fast, it's about 28% of our total business, actually.

20%...

Would you apply that against the 5%?

Yes, I'm just looking at our participation and the total sales slide that we have but it's in that order of magnitude.

So we could be 2 percentage points of a 5% yield.

So a couple of points of volume from the storms in the year ago. I mean, is that a reasonable assumption for the current storms, a couple of points of volume?

Could be. Could be. And then this storm was a little -- this storm was -- it was like the other one, was regional but it was a very broad region. Storm had a wide reach.

Plus no 2 storms are alike. And the truth of the matter is, the more devastating storms have less impact.

Because it takes longer to rebuild. Because you're totally rebuilding an entire house.

As opposed to a less severe storm does a lot more roof damage and so it's not a rebuilding process, it's a reroofing.

it's a repairing process.

It's difficult to say from storm to storm how -- what type of damage has been done.

Yes, our assessment that this one would incur more repairing activity.

Okay, fair enough. As far as the commentary in the press release about the lag -- you characterized it as a lag for res new construction. What is the lag before Gibraltar would feel those orders?

We think it's only least 6 months. If you take the latest data coming out of September, and you annualize it for the full year run rate, it would suggest 875,000 starts. Now we know that we haven't seen 875,000 starts, but that's what is being projected as. And we've seen numbers for 2013 in terms of housing starts that run probably as low as 720,000 and all the way up to 1 million units. And I think the consensus is probably, right now, getting being closer to something north of 850,000 and around 900,000, if one was going to have a range for housing starts in 2013. And on top of that, LIRA, looking at remodeling activities, is suggesting double-digit growth starting in this fourth quarter of this year and running into the first and second quarter of next year. And we've been doing those studies for a number of years and at this point, there's a high level of confidence that growth will start to be incurred.

Keep in mind too, that we've reached the construction markets for residential, primarily through wholesale and retail distribution channels. And the key there is that those businesses and those channels have to feel the demand pull before they're going to want to increase the amount of inventory that they're going to be purchasing from us, which also adds to the time lag that Henning was talking about.

Okay. Fair enough. The...

It comes, it comes. It's just not the immediate reaction that I think could be construed from the positive trend patterns that have been reported on lately.

Once the activity picks up, people get more confident. As they get confident, they'll start to order materials for inventory. And again you get sort of a fast upshoot and then people come to a normalized level, and then it kind of level off. That's what we anticipate.

Okay, great. As far as the fourth quarter commentary, you said sales flat with 4Q '11. Are we to assume volumes are flat or is there some sort of mix benefit we use to be comping down volumes in 4Q? How do we...

We think volumes will be flat. We think we're going to have some mix benefit that we talked later, that the West Coast operation's restructuring is trying to produce some positive effects. And that's going to give us a positive business mix, which I think is what you're referring to.

In the last quarter, you said you would have about $1 million total in the second half of '12 associated with that integration. You kind of characterized it as far as an operating drag. With the push out of the closure, are you saving 500,000 in 4Q '12? Is...

Well, I think the closure -- the question of closure would've spilled, some of it in the fourth quarter December, but much of it into January-February, which we don't believe we're going to incur.

Right, okay. So with the -- when the closure eventually gets complete, I mean I think you referenced in the past contribution margin, incremental margin, however you want to call it, of 30% to 35%. Are we still on track for something like that once you push through that integration?

Yes.

I think we said 30%.

Okay.

Not the 35%. That's a bigger stretch.

It's just that, if you do a flat sales kind of number in '13 and you do the point of gross margin improvement, we're somewhere north of that?

Yes.

So is that just kind of a one-year thing because all of the costs from West Coast are falling away or...

No, it’s continuous. I think the improvements we'll see, we'll continue to see that in the coming years.

What we will, particularly as the volume picks up but for '13, a lot of it is due just to the costs of that integration falling away compared to what we've expended in 2012.

Okay, so I mean, if -- and I know this is all kind of theory, right? So if volumes were the same in '12, and no additional costs or issues with West Coast consolidations, you can do a point of gross margin improvement from the full year 2012...

That's what we were explaining earlier.

And then if volumes are up higher we should expect something north of that. I mean...

Sure. You get a higher leverage hitting in -- the overhead absorption goes up and -- absolutely.

And then, Ken, you mentioned CapEx being a little bit higher in '13 than '12.

Yes.

What's your budget for '12? I mean I think you said $15 million in the past or...

We said $15 million but we're going to spend less than that. I think we're on our way to spend closer to $11 million the last time I looked.

In my remarks I said $11 million to $12 million this year. I think for 2013, we could be in the upper teens, 20-ish.

Below 20-ish, yes.

But even with that pickup in spending, you think 5% to 6% of sales is the right bogey.

Right, I went from 6% down to 5%.

Our next question comes from Seth Yeager with Jefferies & Company.

Just a couple of quick questions. The roofing OEMs, a couple of guys have guided towards some continued weakness in the fourth quarter. How do inventories look in the channel, and is that the same sort of expectation that you're operating under?

The other stories are very shallow in the channels, there's no doubt about that. I think, as we all know, Owens Corning did come out with a pronouncement indicating lower activity in roofing. And I think our experience mirrors very closely what they were indicating.

Okay and it sounds like you guys, if there's any benefit from the hurricane and rebuild activity, you probably wouldn't see that until at least the first or second quarter of next year.

Yes, we believe that's true. First and second quarter I think we'll see most likely increased level of activity.

Okay, great, and then just last question. It sounds like your guidance implies an additional -- if I did my math right here, another $25 million or $30 million of free cash flow in the fourth quarter. With rates where they are and your call price stepping down, how are you prioritizing additional acquisitions versus refinancing of your capital structure. And maybe just a follow-up on that, given the improvement in the business and some of the tuck ins that you're looking on, what's the level of comfort you have around leverage going forward?

Well, I just I'll kind of reply to what Brian said some minutes ago that as far I don't see a REITs change to our capital structure. Although once we get past December, our notes have a lower redemption price and we're thinking more seriously about refinancing the bonds that we have outstanding to extend the maturities and take advantage of the lower interest rate environment. That said, our priority would continue to be deploying available liquidity to acquisitions.

Yes, I think, Gibraltar and the view that we have has an outstanding opportunity to accelerate the growth of our business. The market supports it, our cash position supports it, and so we're very optimistic as we look forward about the -- some significant growth opportunities. And I think that's where our focus, as Brian had said, is and will remain.

I think simply put, it's 2 different issues. Ken is looking at the opportunity to refinance the debt that we have at a lower cost to the company. And secondly, we're comfortable with the leverage levels that we're at today and while we're still going to be looking for acquisition opportunities, we don't want to stretch the leverage much beyond where we are at today.

Okay, great. And If I could just have a quick follow up. On the public infrastructure side, have you guys started to see more projects open up now that we have a couple of years of federal funding in place and what do backlogs looks like in that business?

Yes, with the passage of the new transportation bill and the longer duration of that bill than the previous bills have been afforded, in the past they were talking about 6 months or 1 quarter, reinstatements of the past spending bill, this 2-year bill certainly has helped because it gives states and local municipalities a longer timeframe to look at when they consider what kind of projects they're going to undertake. So this has increased the quoting activity for larger scale jobs which is a positive for our business. I don't think there's any doubt in anybody's mind that there is a need for -- long-term need for infrastructure spending here in the United States. There are 600,000 bridges in the U.S. and the USDOT has evaluated those bridges and said that 25% of the bridges are either structurally deficient or functionally obsolete and are in need of repair. So there's long-term demand there and that's even before consideration is given to building any new bridges. So we see the long-term demand as being there, I think there's a recognition in Congress that the $50 billion plus a little bit of inflation spending is a good level but there is a need for higher spending levels. And we'll see how Congress reacts to that in the future. But for now with the lengthened duration of the current bill, it definitely bodes well for longer-term projects coming into the mix.

At this time, we have reached the end of the Q&A session. I will now turn the conference over to Mr. Lipke for any closing or additional remarks.

Thank you, operator, and thanks to everyone for listening in on the call today. We look forward to speaking with you again next quarter and I have to say, we're optimistic about our future. Thank you.

Ladies and gentlemen, thank you very much for your participation in today's conference call. You may now disconnect. Have a wonderful day.