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Item 1. Business

2022-02-23 compared with 2021-02-25 · 169 added, 275 removed, 160 unchanged (74% of the section changed)

Gibraltar Industries, Inc.

(the "Company") is a leading manufacturer and provider of products and services for the renewable energy, conservation, residential and infrastructure markets.

Gibraltar’s mission is to create compounding and sustainable value for our shareholders and stakeholders with strong and relevant leadership positions in higher growth, profitable end markets focused on addressing some of the world's most challenging opportunities.

(the "Company") is a leading manufacturer and provider of products and services for the renewable energy, residential, agtech and infrastructure markets.

Our mission is to make life better for people and the planet, fueled by advancing the disciplines of engineering, science, and technology.

We are innovating to reshape critical markets in sustainable power, comfortable living, and productive growing throughout North America.

Furthermore, we strive to create compounding and sustainable value for our stockholders and stakeholders with strong and relevant leadership positions in higher growth, profitable end markets focused on addressing some of the world's most challenging opportunities.

The foundation of the Company's strategy is built on three core pillars:

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Our business system is a critical enabler to grow, scale, and deliver our plans.

Our business system is focused on deploying effective tools to drive growth, improve operating performance, and develop the organization.

Our Business System challenges existing paradigms, drives day-to-day performance, forces prioritization of resources, challenges our business models, and brings focus to new product and services development and innovation.

Portfolio Management is focused on optimizing the Company’s business portfolio and ensures our financial capital and human resources are effectively and efficiently deployed to deliver sustainable, profitable growth while increasing our relevance with customers and shaping our markets.

In 2020, the Company transacted the following acquisitions:

• Thermo Energy Systems ("Thermo) - January 2020,

• Delta Separations (“Delta”) - February 2020

• Architectural Mailboxes - October 2020

• Sunfig Corporation - December 2020

• TerraSmart LLC ("TerraSmart") - December 2020

During the fourth quarter of 2020, the Company made the decision to classify its Industrial business as held for sale and report its results as discontinued operations.

Organization Development drives the Company’s continuous focus on strengthening and scaling the organization to execute the Company’s plans and meet commitments.

Our focus is on deploying effective tools to drive growth, improve operating performance, and develop the organization utilizing 80/20 and lean quote-to-cash initiatives along with digital systems for speed, agility and responsiveness.

Our Business System challenges existing paradigms, drives day-to-day performance, forces prioritization of resources, tests our business models, and brings focus to new product and services development and innovation.

Portfolio Management is focused on optimizing the Company’s business portfolio in higher growth markets with leadership positions while ensuring our financial capital and human resources are effectively and efficiently deployed to deliver sustainable, profitable growth while increasing our relevance with customers and shaping our markets.

In early 2021, the Company divested its non-core Industrial business and during 2020, the Company completed acquisitions primarily in the Renewables and Agtech markets to help achieve these objectives.

Recent acquisitions include:

• Thermo Energy Systems ("Thermo) - January 2020 - Agtech

• Delta Separations (“Delta”) - February 2020 – Agtech

• Architectural Mailboxes - October 2020 – Residential

• Sunfig Corporation - December 2020 – Renewables

• TerraSmart LLC ("TerraSmart") - December 2020 -Renewables

Organization Development drives the Company’s continuous focus on ensuring we have the right design and structure to scale the organization in order to execute the Company’s plans and meet commitments.

The Company aspires to make our place of work the "Best Place to Work", where we focus on creating an environment for our people to have the best opportunity for success, continue to develop, grow, and learn.

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We believe doing so helps us attract and retain the best people so we can execute our business plans.

COVID-19 Update

While the Company continues to encounter challenges and uncertainty associated with COVID-19, the pandemic did not have a material adverse effect on our reported results during 2020.

While most of our operations have been considered essential businesses and all have remained open during the pandemic outside of a few days, the decision to keep our team intact despite some initial market softness for certain businesses put us in a position to deliver revenue and earnings growth throughout 2020.

Our top priority continues to be focused on our organization - keeping our team and their families as safe as possible, our supply chain operating well, and providing a high level of responsiveness to customer needs.

We will continue to proactively execute our pandemic “playbook” as we enter 2021 and make adjustments to our operating protocols as navigate forward.

The extent to which our operations will be impacted by the outbreak will largely depend on future developments, which remain uncertain and challenging to predict, including new requirements or regulations mandated by government authorities.

Refer to the Company's Outlook section in this management discussion and analysis for consideration relative to future periods.

The Company serves customers primarily in North America including renewable energy (solar) developers, institutional and commercial growers of food and plants, home improvement retailers, wholesalers, distributors, and contractors.

As part of our continuing operations at December 31, 2020, we operated 38 facilities, comprised of 27 manufacturing facilities, two distribution centers, and nine offices, which are located in 17 states, Canada, China, and Japan.

Our operational infrastructure provides the necessary scale to support local, regional, and national customers in each of our markets.

The Company operates and reports its results in the following three reporting segments:

• Renewable Energy and Conservation;

• Residential Products;

• Infrastructure Products.

The COVID-19 pandemic began to impact our operations late in the first quarter of 2020 as government authorities imposed mandatory closures, work from home orders and social distancing protocols, which resulted in temporary curtailment of some operations, increased costs to operate certain facilities, and has continued to impact our operations as new strains of the COVID-19 virus have been identified.

Our top priority continues to be focused on our organization - keeping our team and their families as safe as possible, maintaining our supply chain and providing a high level of responsiveness to customer needs.

We continue to proactively execute our pandemic “playbook” and make adjustments to our operating protocols as we navigate forward.

Throughout 2021, COVID-19, as well as broader market dynamics, have impacted our company, including accelerating material, labor and logistics cost inflation, and availability.

In certain instances, these issues have resulted in project delays, margin pressures and order fulfillment time extension.

We are partnering with our customers in an effort to better align pricing, project timing and delivery schedules in this dynamic environment.

We are also working with our suppliers to understand the existing and potential future impacts to our supply chain and are taking actions in an effort to mitigate such impacts, however, we expect these supply chain, labor and logistics costs and availability pressures will continue in 2022.

Corporate Social Responsibility

Gibraltar is dedicated to making a positive impact through a commitment to Corporate Social Responsibility (CSR).

Our efforts continue to focus on:

• Our People:

The safety, well-being, and success of our people is our top priority.

We are dedicated to developing their potential as professionals and future leaders, drawing on the unique abilities of each team member to build a rich, inclusive culture of difference-makers.

• Our Communities:

Sharing our success with the communities where we live and work is vital to our mission.

By supporting local nonprofits and institutions as investors and volunteers, we help build resilience and strengthen the bonds that will help our communities thrive.

Our work is firmly rooted in making life better for people and the planet;

we innovate in the service of possibility, acting responsibly to create positive, lasting change in our world.

We promote sustainability across our value chain, developing products and services for our customers that reduce environmental impact and improve quality of life.

CSR is integral to our three pillars of business systems, portfolio management and organization development.

We have accelerated our initiatives to create a safer work environment, expand the experience base and the diversity of our organization, and to identify opportunities to reduce environmental impact.

We are committed to making a difference in the lives of the people who are touched by our business and to creating meaningful impact every day through our work and relationships.

Since 2014, we have transformed our business by deploying nearly half a billion dollars in capital for acquisitions in the renewables and agtech markets These investments position Gibraltar to take leadership roles in tackling some

of the world’s largest challenges such as generating energy from renewable sources and growing fruits and vegetables sustainably.

The Company serves customers primarily in North America including renewable energy (solar) developers, home improvement retailers, wholesalers, distributors, institutional and commercial growers of food and plants, and contractors.

At December 31, 2021, we operated 34 facilities, comprised of 25 manufacturing facilities, one distribution center, and eight offices, which are located in 16 states, Canada, China, and Japan.

Our operational infrastructure provides the necessary scale to support regional and national customers in each of our markets.

The Company operates and reports its results in the following four reporting segments:

• Renewables;

• Residential;

• Infrastructure.

The following table summarizes the primary products, applications, and end markets for each segment:

Renewable Energy and Conservation Segment

Renewables Segment

Products & Services Applications End Users

Renewable Energy:

Design, engineering, manufacturing and installation of solar racking and electrical balance of systems Commercial & distributed generation scale commercial solar installations on any type of terrain

Solar developers;

Design, engineering, manufacturing and installation of solar racking and electrical balance of systems Commercial & distributed generation scale commercial solar installations on any type of terrain Solar developers;

power companies;

solar energy EPC contractors

Conservation:

Provide growing and processing solutions including the designing, engineering, manufacturing and installation of greenhouses, and botanical extraction systems Retail, vegetable, flowers, cannabis, commercial, institutional and conservatories, car wash tunnels, botanical oil extraction Organic produce growers;

retail garden centers;

conservatories and botanical gardens;

floriculture growers;

agricultural research;

botanical oil processors

Residential Products Segment

Residential Segment

Product Applications End Market

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new construction and repair and remodeling

Centralized mail systems and electronic package solutions Secure storage for mail and package deliveries

Single point & centralized mail systems and electronic package solutions Secure storage for mail and package deliveries

Retractable awnings & gutter guards Sun protection;

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Rain dispersion, trims and flashings, other accessories Water & protection from natural elements

Infrastructure Products Segment

Agtech Segment

Products & Services Applications End Users

Provide growing and processing solutions including the designing, engineering, manufacturing, full scope construction, & maintenance & support of greenhouses & indoor growing operations, and botanical extraction systems Retail, fruits & vegetables, flowers, cannabis, commercial, institutional & conservatories, car wash structures, botanical oil extraction Large scale indoor produce growers;

cannabis growers, retail garden centers;

conservatories and botanical gardens;

floriculture growers;

agricultural research;

car washes, botanical oil processors

Infrastructure Segment

Product Applications End Market

Structural bearings, expansion joints and pavement sealant for bridges, airport runways and roadways, elastomeric concrete, bridge cable protection systems Preserve functionality under varying weight, wind, temperature and seismic conditions Bridge and elevated highway construction, airport pavements

The Company’s operating businesses have established leadership positions in attractive end markets by building core capabilities in innovation, new products and services, manufacturing and field operations, business systems, quality performance, along with a healthy balance sheet and the strength of our people.

Engineered solutions for bridges, highways & airfields, including structural bearings, expansion joints, pavement seals, elastomeric concrete, bridge cable protection systems

Preserve functionality under varying weight, wind, temperature and seismic conditions Bridge and elevated highway construction, airport pavements

The Company’s operating businesses have established strong positions in attractive end markets by building core capabilities in innovation, new products and services, manufacturing and field operations, business systems, quality performance, along with a healthy balance sheet and the strength of our people.

We will continue our focus of time, talent, and energy on strengthening our position in each market we serve.

Attractive End Markets .

Our markets are focused on solving global challenges as it relates to accelerating renewable energy generation, growing food and plants more environmentally-friendly and efficient way maintaining healthy home environments, supporting postal and parcel home delivery, and improving our country’s transportation infrastructure and ways of transporting people.

Our businesses are focused on solving global challenges as it relates to accelerating renewable energy generation, increasing the supply of locally-grown and more sustainably-produced food and plants and efficient way maintaining healthy home environments, supporting mail and package delivery, and improving our country’s transportation infrastructure and ways of transporting people.

Value-Added Products and Services .

We provide industry-best solutions to our customers:

We provide optimal solutions to our customers:

racking, foundation, and electrical systems for photovoltaic (PV) solar systems, commercial growing greenhouses and processing extraction technology for biologically grown food, cannabis, and other plants;

roof-related ventilation to support healthy home environments;

postal and parcel storage for home and retail sites;

and structural bearings and expansion joints for bridges and other transportation structures.

roof-related ventilation and weather protection to support healthy home environments;

mail and package storage for home and retail and non-retail sites;

and structural bearings, expansion joints and rubber products for bridges and other transportation structures.

Our products and services are highly engineered, supported with intellectual property, and driven by effective business systems and IT infrastructure.

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We strive to be connected directly with our end customers, where we receive unfiltered feedback on performance, insight on customer problems and opportunities, and cooperation on ideas for new products, services, and business model optimization.

The percentage of our total business supported directly with end users of our products and services was approximately 54% and we expect this to grow in future years.

The percentage of our total revenue generated from products and services that were sold directly to the end user was approximately 56% and we expect this to grow in future years.

Our commitment to quality is a core operating tenet for the Company, and our quality management systems are designed to ensure we deliver to customer and stakeholder expectations while meeting statutory and regulatory requirements related to our products and services.

Strong liquidity profile .

We strive to manage our cash resources to ensure sufficient liquidity to fund growth initiatives, support the seasonality of our businesses, manage effectively through economic cycles.

We strive to manage our cash resources to ensure sufficient liquidity to fund growth initiatives, support the seasonality of our businesses and manage effectively through economic cycles.

As of December 31, 2021, our liquidity was $382 million, including $13 million of cash and $369 million of availability under our revolving credit facility.

We believe our low leverage and ample borrowing capacity, along with enhanced flexibility in our Senior Credit Agreement, provides us with the financial capacity to fund our ongoing business requirements, strategic initiatives, and acquisition opportunities.

Recent developments

Recent Acquisitions and Dispositions

During 2020, the Company transacted the following acquisitions:

Business Acquired Date of Acquisition in 2020 Preliminary purchase price

Business Acquired Date of Acquisition in 2020 Purchase price

( in millions) 1

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Except for TerraSmart, which was financed through a combination of cash on hand and borrowings under the Company's revolving credit facility, all of the above 2020 acquisitions were funded from cash on hand.

During the fourth quarter of 2020, the Company committed to a plan to dispose its Industrial business as a result of its portfolio management strategy to focus on participation in higher value and faster growing markets.

The Industrial business, previously reported in the Company's Industrial and Infrastructure Products segment, has been classified as held for sale.

In the first quarter of 2021, the Company disposed of its Industrial business as a result of its portfolio management strategy to focus on participation in higher value and faster growing markets.

The Industrial business, previously reported in the Company's former Industrial and Infrastructure Products segment, has been presented as a discontinued operation in the Company's consolidated financial statements.

Customers and Products

Our customers are located primarily throughout North America.

One customer, a home improvement retailer which purchases from both the Residential Products segment and Renewable Energy and Conservation segment, represented 14% of our consolidated net sales for each of the three years ended December 31, 2020, 2019, and 2018.

One customer, a home improvement retailer which purchases from the Residential segment represented 13% of our consolidated net sales for the year ended December 31, 2021, and 14% for each of the years ended December 31, 2020 and 2019.

No other customer in any segment or segments accounted for more than 10% of our consolidated net sales.

Our products are primarily distributed to our customers using common carriers.

We maintain distribution centers that complement our manufacturing plants from which we ship products and ensure on-time delivery while maintaining efficiency within our distribution system.

We generally ship directly from our manufacturing plants to ensure on-time delivery while maintaining efficiency.

Our customers and product offerings by segment are described below.

Renewable Energy and Conservation

The Renewable Energy and Conservation segment is primarily a designer and manufacturer of fully-engineered solutions for solar mounting systems, greenhouse structures and botanical oil extraction systems.

This segment offers a fully integrated approach to the design, engineering, manufacturing and installation of solar racking systems, including electrical balance of systems, and commercial, institutional, and retail greenhouse structures servicing customers, such as community solar owners and developers, organic produce growers, retail garden centers, conservatories and botanical gardens, floriculture growers, agricultural research, and botanical oil processors.

With the recently announced acquisitions of TerraSmart and Sunfig, we have 13 manufacturing facilities and 2 distribution centers and operate in the United States, China and Japan.

An integral part of solar racking and greenhouse projects is the fabrication of specifically designed metal structures for highly-engineered applications including:

The Renewables segment is primarily a designer and manufacturer of fully-engineered solutions for solar mounting systems.

We have three manufacturing facilities and one distribution center and operate in the United States and Japan.

An integral part of solar racking projects is the fabrication of specifically designed metal structures for highly-engineered applications including:

racking and foundation for ground-mounted solar arrays on any type of terrain;

single-axis solar tracker solutions;

carports that integrate solar PV panels;

as well as commercial-scale greenhouses and other glass structures.

Both the solar racking and greenhouse projects involve securing glass and plastic to metal and use the same raw materials including steel and aluminum.

and carports that integrate solar PV panels.

The solar racking projects involve securing glass to metal with steel being the key raw material used.

Most of our production is completed using computer numerical control machines, roll forming machines, laser cutters and other fabrication tools.

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We strive to improve our offerings of products by introducing new products, enhancing existing products, adjusting product specifications to respond to commercial building codes and regulatory changes, and providing solutions to contractors and end users.

New products introduced in recent years include screw-based racking solutions, software solutions to optimize solar energy investments, botanical oil extraction systems, single-axis tracker systems, metal framed structures for car washes, and solar racking systems for carports and canopies.

New products introduced in recent years include screw-based racking solutions, software solutions to optimize solar energy investments, single-axis tracker systems, and solar racking systems for

carports and canopies.

Our screw-based racking solutions offer rapid installation on any terrain.

Our new software solution enables our team to optimize solar project design, utilizing solar irradiance data and topography analysis to quickly and automatically generate multiple potential layouts for complex projects Our botanical oil extraction systems provide equipment for extracting plant oils for hemp, cannabis, and nutraceutical processors.

The single-axis tracker systems within our solar mounting solutions group provide flexibility to adapt to a variety of site conditions that impact tracker site designs when using other solutions in the market and can vastly reduce the costs associated with civil work on projects.

Our new software solution enables our team to optimize solar project design, utilizing solar irradiance data and topography analysis to quickly and automatically generate multiple potential layouts for complex projects The single-axis tracker systems within our solar mounting solutions group provide flexibility to adapt to a variety of site conditions that impact tracker site designs when using other solutions in the market and can vastly reduce the costs associated with civil work on projects.

The patented design eliminates complexities incorporated in the traditional systems, simplifying the operations and maintenance of the system, along with streamlining the installation process.

Our car washes serve a market preference for light- transparent structures.

Solar racking systems for carports serve as protection for cars from the effects of the sun and intense heat while providing a renewable energy source.

Similarly, solar racking systems installed on idle land, such as solid waste landfills, or on challenging, rocky terrain, converts such land into a useful property by providing clean renewable power generating capabilities.

Residential Products

Our Residential Products segment services the residential repair and remodeling and to a lesser extent the new housing construction markets in North America with products including roof and foundation ventilation products, centralized mail systems and electronic package solutions, outdoor living products (retractable sun-shades), rain dispersion products and other construction accessories.

Our Residential segment services the residential repair and remodeling and to a lesser extent the new housing construction markets in North America with products including roof and foundation ventilation products, single point and centralized mail systems and electronic package solutions, outdoor living products (retractable sun-shades), rain dispersion products and other construction accessories.

Our residential product offerings are sold through a number of sales channels including major retail home centers, building material wholesalers, building product distributors, buying groups, roofing distributors, residential contractors, property management companies and postal services distributors and providers.

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Our roof and foundation ventilation products and accessories include solar powered units.

Our centralized mail and electronic package solutions include single mailboxes, cluster style mail and parcel boxes for single and multi-family housing and electronic package locker systems.

Our mail and electronic package solutions include single mailboxes, cluster style mail and parcel boxes for single and multi-family housing and electronic package locker systems.

Our remaining residential product offerings consist of roof edging and flashing, soffits and trim, drywall corner bead, metal roofing and accessories, rain dispersion products, including gutters and accessories, and exterior retractable awnings.

Each of these product offerings can be sold separately or as part of a system solution.

Within our Residential Products businesses, we are constantly striving to improve our product/solution offerings by introducing new products, enhancing existing products, adapting to building code and regulatory changes, and providing new and innovative solutions to homeowners and contractors.

New products introduced in recent years include electronic parcel lockers, roof top safety kits, chimney caps, heat trace coils, exterior, remote-controlled

deck awnings for sun protection, and high-efficiency and solar-powered ventilation products.

Our electronic parcel lockers and parcel room systems provide residents in multi-family communities a secure storage receptacle to handle both package deliveries and receipt of other delivered goods, along with aiding retail businesses and their customers to transact via buy on line, pick up in store ("BOPUS") transactions.

Within our Residential businesses, we are constantly striving to improve our product/solution offerings by introducing new products, enhancing existing products, adapting to building code and regulatory changes, and providing new and innovative solutions to homeowners and contractors.

New products introduced in recent years include electronic parcel lockers, roof top safety kits, chimney caps, heat trace coils, exterior, remote-controlled deck awnings for sun protection, and high-efficiency and solar-powered ventilation products.

Our ventilation and roof flashing products provide protection and extend the life of structures while providing a safer, healthier environment for residents.

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In some cases, the Company sources products from third-party vendors to optimize cost and quality in order to provide the very best and affordable solution for our customers.

Infrastructure Products

Our Infrastructure Products segment primarily serves end markets such as highway and bridge construction and airports through commercial and transportation contractors.

The Agtech segment consists of turnkey controlled environment agriculture solutions for growing fruits and vegetables, supplier of custom greenhouses for research, education, and retail, and provider of soil-to-oil cannabis ecosystems with technologies for the cultivation, extraction, and refinement of cannabinoids.

We have six manufacturing facilities and operate in the United States and China.

An integral part of greenhouse projects is the fabrication of specifically designed metal structures for highly-engineered applications including:

commercial-scale greenhouses and other glass structures.

The greenhouse projects involve securing glass and plastic to metal with steel and aluminum being the key raw materials used.

Most of our production is completed using computer numerical control machines, roll forming machines, laser cutters and other fabrication tools.

The structural metal components are designed, engineered, fabricated and installed in accordance with applicable building codes.

New products introduced in recent years include botanical oil extraction systems and metal framed structures for car washes.

Our botanical oil extraction systems provide equipment for extracting plant oils for hemp, cannabis, and nutraceutical processors.

Our car washes serve a market preference for light- transparent structures.

Our partial dependence of this segment on the legalization of cannabis could impact demand for our products and services.

Infrastructure

Our Infrastructure segment primarily serves end markets such as highway and bridge construction and airports through commercial and transportation contractors.

Our infrastructure product offerings include expansion joints, structural bearings, rubber pre-formed seals and other sealants, elastomeric concrete, and bridge cable protection systems.

Our products are manufactured primarily from plate and structural steel along with various resin and rubber based materials.

We operate two manufacturing facilities in the United States giving us a base of operations to provide customer support, delivery, service, and quality to a number of regional and national customers, and providing us with manufacturing and distribution efficiencies in North America.

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In addition, our engineering staff employs a range of drafting software to design highly specialized and technically precise products.

In our Renewable Energy and Conservation and Infrastructure Products segments, drawings are approved and stamped by state licensed professional engineers.

In our Renewables, Agtech, and Infrastructure segments, drawings are approved and stamped by state licensed professional engineers as required by individual projects.

Technical service personnel also work in conjunction with our sales force in the new product development process to determine the types of products and services that suit the particular needs of our customers.

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We have implemented enterprise resource planning systems along with a corporate wide SIOP (Sales, Inventory, Operations Planning process) to better manage our inventory, forecast customer orders, enable efficient supply chain management, and allow for more timely counter-measures to changing customer demand and market conditions.

The primary raw materials we purchase are flat-rolled and plate steel, aluminum coil and extrusions, and resins.

However, broader market dynamics in 2021 and continuing into 2022 related to COVID-19 have created supply chain challenges which have impacted ability to obtain sufficient quantities in a timely fashion, along with making it more difficult to forecast customer orders and plan purchases.

The primary raw materials we purchase are flat-rolled, structural and plate steel, aluminum coil and extrusions, and resins.

We purchase flat-rolled and plate steel and aluminum at regular intervals on an as-needed basis, primarily from the major North American mills, as well as, a limited amount from domestic service centers and foreign steel importers.

Substantially all of our resins are purchased from domestic vendors, primarily through distributors, with a small amount purchased directly from manufacturers.

Supply has historically been adequate from these sources to fulfill our needs.

Because of our strategy to develop longstanding relationships in our supply chain, we have been able to

adjust our deliveries of raw materials to match our required inventory positions to support our on-time deliveries to customers while allowing us to manage our investment in inventory and working capital.

Substantially all of our resins are purchased from domestic vendors, primarily through distributors, with a

small amount purchased directly from manufacturers.

While supply has historically been adequate from these sources to fulfill our needs, the broader market dynamics in 2021 have recently impacted our ability to consistently source materials as needed.

This sourcing constraint has impacted delivery times.

Furthermore, supply chain disruptions impacting our customers have caused field project execution delays and affected the manner in which we purchase raw materials.

To guard against further shortages, we have held higher than historical levels of inventory thus increasing our investment in working capital.

Management continually evaluates improvements in our purchasing practices across our geographically dispersed facilities in order to streamline purchasing across similar commodities.

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These trademarks, copyrights, and patent registrations help us maintain product leadership positions for the goods we offer.

In 2020, 8% of our annual revenues were generated from patented products.

Sales and Marketing

In 2021, approximately 56% of our revenues were generated from products and services that were sold directly to the end user, with the remainder of revenues generated through retailers, wholesalers and distributors, slightly up from 54% in 2020.

Continual communication with our customers allows us to understand their challenges and provides us with the opportunity to identify solutions that will meet their needs.

We have organized sales teams to focus on specific customers and national accounts through which we provide enhanced solutions and improve our ability to increase the relevance of products and services that we sell.

Our sales regularly involve competitive bidding processes, and our reputation for meeting delivery requirements and strict specifications make us a preferred provider for many customers.

Our sales staff works with certain retail customers to optimize shelf space for our products which is expected to increase sales at these locations.

Our retail customers are provided with point-of-sale marketing aids to encourage consumer spending on our products in their stores.

We focus on providing our customers with industry leading customer service.

We are able to meet our customers’ demand requirements due to our efficient manufacturing processes and extensive distribution network.

Our sales process regularly includes a competitive bid process, and our reputation for product and service quality and meeting delivery requirements make us a preferred provider for many customers.

Our marketing focus in 2021 was on building an enhanced cohesive brand strategy—ensuring that we have a defined purpose and values, and ensuring that our brand messages reflect the needs of the market and the capabilities of our businesses.

The businesses in our Renewables segment were integrated and rebranded under the brand name Terrasmart and our businesses in our Agtech segment were consolidated under the brand name Prospiant.

In their markets, both brands reflect our unique value to customers.

In 2021, we expanded and upgraded our Customer Relationship Management (CRM) system, improving our visibility into sales account status and enabling cross-sell and up-sell opportunities.

The CRM also provides important aggregate market data.

Backlog represents the value of the total confirmed orders at a point in time for which performance obligations have not yet been satisfied.

This metric is useful as it represents the aggregate amount we expect to recognize as revenue in the future.

This metric is useful as it reflects the committed amount we expect to recognize as revenue in the near-term.

While the majority of our products have short lead time order cycles, we had aggregated approximately $344 million of backlog from continuing operations at December 31, 2021 compared to $297 million at December 31, 2020.

The backlog primarily relates to certain business units in our Renewable Energy and Conservation and our Infrastructure segments.

We believe that the majority of our backlog will be shipped, completed and installed during 2021.

The backlog primarily relates to certain business units in our Renewables, Agtech, and Infrastructure segments.

We believe that the performance obligations related to the majority of our backlog will be satisfied, and related revenue recognized during 2022.

The Company operates in highly competitive markets.

We compete against several competitors in all three of our segments with different competitors in each major product category.

We compete against several competitors in all four of our segments with different competitors in each major product category.

We compete with competitors based on the range of products offered, quality, price, and delivery, as well as serving as a full-service provider for project management in certain segments.

Although some of our competitors are large companies, the majority are small to medium-sized and do not offer the large range of products that we offer.

We believe our broad range of products, high quality, and sustained ability to meet exacting customer delivery requirements gives us a competitive advantage over many of our competitors.

We also believe that execution of our business strategy further differentiates us from many of our competitors and allows us to capitalize on those areas that give us a competitive advantage over many of our competitors.

The Company’s business has historically been subjected to seasonal influences, with higher sales typically realized in the second and third quarters.

General economic forces, such as tax credit expirations and imposed tariffs, along with changes in the Company’s products and customer mix have shifted traditional seasonal fluctuations in revenue over the past few years.

We believe our broad range of high quality products give us a competitive advantage over many of our competitors.

While our ability to meet exacting customer delivery requirements was impacted during 2021 by COVID-19 related supply chain constraints, these same issues impacted our competitors, some to a greater extent than others.

We were able to stay close to our customers, and in some cases, were able to increase market participation.

believe that execution of our business strategy further differentiates us and allows us to capitalize on those areas that give us a competitive advantage over many of our competitors.

The Company’s business has historically been subjected to seasonal influences, with our first quarter being seasonally the slowest relative to sales.

Levels of residential and commercial construction can be cyclical and depend on interest rates, availability of financing, inflation, employment, spending habits, consumer confidence and cost and availability of skilled labor.

Further, general economic forces, such as tax credit expirations and imposed tariffs, along with changes in the Company’s products and customer mix have shifted traditional seasonal fluctuations in revenue over the past few years.

Governmental Regulation

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• We strive to create an environment where our people can have the best chance for success and we refer to this internally as creating the "Best Place to Work."

Our "Best Place to Work" initiative is built on the following six tenets, and involves our entire organization:

Our "Best Place to Work" initiative is built on the following beliefs, and involves our entire organization:

Health and Safety

Education and Development

Diversity, Equality and Inclusion

Corporate Social Responsibility

Diversity and Inclusion

Compensation and Employee Benefits

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We also employed approximately 590 full-time equivalent temporary agency employees.

Approximately 7% of our U.S.

workforce was represented by unions through two collective bargaining agreements (CBAs) as of December 31, 2021.

Both of our CBAs will expire and are expected to be renegotiated in 2024.

The Company considers its employee relations to be good.

Health and Safety

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Additionally, we measure and review our safety results continuously in each location.

We have a disciplined safety management and reporting process.

We have a disciplined safety framework.

Our CEO reviews safety performance, including recordable incidents, near misses, and first aid cases monthly with all business and human resource leaders.

In addition, safety performance and best practices are also reviewed quarterly with the entire organization during our organization-wide Town Hall live virtual meetings.

Additionally, as part of our annual budget and capital planning process, our businesses identify additional safety investments required for training, education, equipment, and processes.

Our safety performance improved in 2020, and we remain focused on continuing positive progress in 2021.

We measure safety performance on three metrics - Total Recordable Incident Rate (TRIR), Near Misses, and First Aid events.

• TRIR is defined as the number of work-related injuries or illness serious enough to require treatment beyond first aid, per 200,000 hours worked.

• Near Misses are defined as an incident in which no personal injury occurred, but personal injury could have occurred but for a slight circumstantial shift.

• First Aid events are defined as medical attention that is administered immediately after an injury or sudden illness occurs and at the location where it occurred.

In 2020, we worked 4,874,000 hours, an increase of an 548,000 workforce hours, or 12.7% increase versus 2019.

Increase in workforce hour is primarily due to our acquisitions of Thermo, Delta Separation, Architectural Mailboxes and Apeks, as well as an overall increase in our workforce from 2019.

Our TRIR rate improved 37% from 3.7 TRIR to 2.3 TRIR, with recordable incidents down 29% and first-aid events up 18%, respectively.

In addition, we did not have any work-related fatalities in 2020, nor any in recent years.

Operating during the COVID-19 pandemic required focus, discipline, and diligence from our entire organization to maintain our COVID health and safety protocols—while at work, home, and in the communities where we live and work.

Beginning in March 2020 and to date, we implemented:

• All Centers for Disease Control and Prevention (CDC), World Health Organization (WHO), and U.S.

Department of Health and Human Services (DHS) recommendations and educational initiatives.

Additionally, we proactively tracked and implemented all state and local mandates and made modifications in compliance with changes throughout the year.

• Travel restrictions and leveraging of digital tools as much as possible.

• Operating protocols in our offices and production facilities including mandatory PPE (face masks / shields, and sanitizer stations), social distancing requirements, zone management, shift management, temperature checks, visitor restrictions, and sanitization management with outside contractors.

• Business continuity protocols for our remote-working team with focus on reliable, consistent, and continuous connectivity along with additional cyber-security protection and a new centralized Help Desk.

• Temporary conversions of two manufacturing facilities to produce face masks and shields for all Gibraltar employees and their family members.

We also produced hand sanitizer for all Gibraltar locations and healthcare facilities and first responders in our local communities.

• 160 hours of additional pay for our production employees to be used at their discretion during the year to support them, and their families, in the event the pandemic caused personal hardship.

In December 2020, we paid a cash bonus to each production employee for the unused portion of their remaining 160 hours.

For non-production employees, who positions were generally able to be performed remotely, we provided salary continuation for time needed to deal with personal matters arising from the pandemic.

• Daily, weekly, and monthly communications to keep our team informed as the pandemic and our business situation evolved throughout the year.

In 2020, the CEO hosted 18 live "Town Hall" virtual meetings connecting with as many as 650 people to provide updates and address any concerns from the team.

The executive leadership team, business leaders, and human resource leaders met daily and weekly to modify and implement changes to our operating protocols.

• Processes to track COVID-19 cases across Gibraltar by location and for our employees working remotely.

The leadership team reviewed our status every 24 to 48 hours.

We also tracked the recovery process for all employees and our “active” cases throughout the year.

Safety performance and best practices are also reviewed quarterly with the entire organization during our organization-wide Town Hall live virtual

In addition, as part of our annual budget and capital planning process, our businesses identify additional safety investments required for training, education, equipment, and processes.

Throughout 2021, our Company and employees continued to experience the effects of the COVID-19 pandemic.

Operating our businesses during this time required focus, discipline, and diligence from our entire organization to maintain our COVID-19 health and safety protocols—while at work, home, and in the communities where we live and work.

We continued to follow the recommendations of the Centers for Disease Control and Prevention (CDC), World Health Organization (WHO), and U.S.

Department of Health and Human Services (DHS).

Additionally, we tracked and implemented all federal, state and local mandates and made modifications in compliance with changes throughout the year.

We continued operating protocols in our offices and production facilities including providing necessary PPE, social distancing requirements, zone and shift management, temperature checks, and enhanced cleaning and sanitization practices at our facilities.

For our remote-working teams, we continued business continuity protocols with focus on reliable, consistent, and continuous connectivity along with additional cyber-security protection and our centralized help desk.

These and other COVID-19 related protocols helped us provide a safe and productive environment for our teams and ensured that we were able to support our customers’ needs throughout the pandemic.

Education and Development

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Our focus is to build the best organization and an environment where our employees learn, are challenged, and have the tools to grow.

We are also focused on building the most effective systems, tools and processes to enable the organization to continue to advance.

We are also focused on building effective systems, tools and processes to enable the organization to continue to advance.

With these initiatives, along with our formal education and development program, we will build competencies, drive more diversity of thought, challenge internal paradigms, and drive improved and consistent performance.

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• Ethical behavior is more than a policy and compliance with the law is mandatory—it is our responsibility to do business in the right and responsible way.

Our commitment to living our values includes providing education and training for everyone, and as part of our continued commitment, we have updated our Code of Ethics and expanded our ethics training curriculum.

In 2019, we developed a comprehensive education curriculum including Ethics – “Doing the Right Thing,” Compliance – “Doing It the Right and Responsible Way,” and Cyber Security.

Our curriculum is administered online and every employee and member of the Board of Directors is required to complete a minimum of 12.5 hours per year in an assigned timeframe.

In 2020, we invested approximately 20,000 hours in education and training and our goal on a full-year basis is to invest at least 25,000 hours.

Our education program, completed annually by all employees, is a condition of employment, and our CEO reviews the quarterly progress for all employees.

The base curriculum is summarized below.

Cyber Security

“Do the Right Thing”

• Ethics and Ethical Behavior

• Harassment and Discrimination

• Diversity, Equity and Inclusion

– Unconscious and Implicit Bias

– Micro-Aggressions

– Respect in the Workplace

– Cultural Competency

• Corporate Social Responsibility

• Conflict of Interest

“Do It the Right and Responsible Way”

• Insider Trading

• Intellectual Property

• Anti-Trust and Fair Competition

• Government Relations

• Improper Payments and Gifts

• Data Privacy and Protection

• International Business Ethics

Employment Law for Supervisors

• Business Continuity

• Security Awareness

• Internet Security When Working from Home

• Social Engineering, Phishing, and Ransomware

• Mobile Security

• Stop and Stop the Spread of Disinformation

• Identity Theft

We also developed and launched Gibraltar University in 2019, which is designed to develop our leadership across Gibraltar.

Our commitment to living our values includes providing education, training and development opportunities for everyone:

• Comprehensive education curriculum.

Topics include Ethics – “Doing the Right Thing”;

Compliance – “Doing It the Right and Responsible Way”;

and Cyber Security.

Completion of our training is required annually for our employees and members of the Board of Directors and is a condition of employment.

Our CEO reviews the quarterly progress for our employees.

• Gibraltar University.

Designed to develop our leadership across Gibraltar.

The program is a two-year initiative utilizing classroom education, ongoing continuous learning, and team project implementation prior to graduation.

The curriculum covers Finance, Human Resources, Marketing, Operations, Innovation, Legal, Strategy Development and Deployment, and Mergers & Acquisitions, and is taught by Gibraltar’s leadership team.

In January 2020, our first class of 40 participants, nominated by our business leaders, started the program and will graduate in December 2021.

Our second class will be selected in June 2021 and will start the program in January 2022.

In 2019, we piloted our Organization Planning and Talent Review process, and subsequently implemented it across Gibraltar in 2020.

The annual process integrates discussions and metrics on organization design/structure, career development, diversity, equality and inclusion, performance and potential assessment, and succession planning.

Each business unit reviews their organizational development plans with our CEO and executive leadership team and follows with monthly reviews to ensure implementation of organization plans.

On an annual basis, our CEO reviews the organizational development plan and performance results with the Board of Directors including performance of the executive team, succession planning progress, key organizational priorities and results, education and training initiatives, and all key organizational design and structure.

This annual process helps our organization scale and manage the future of the company.

The process reinforces the development requirements and opportunities for our people, and ensures we are addressing organization gaps/opportunities and succession planning in a continuous and timely manner.

It also drives our annual hiring, recruiting, and retention initiatives, and in 2020, it was instrumental as we added significant talent across our organization.

Recruiting is an important aspect of our business strategy and is guided by our desire to find the best talent to drive our business and build our “Best Place to Work” vision.

• Organization Planning and Talent Review process.

The annual process integrates discussions and metrics on organization design/structure, career development, diversity and inclusion, performance and potential assessment, and succession planning, along with key organizational priorities and results.

It also drives our annual hiring, recruiting, and retention initiatives, and continues to be instrumental as we add talent across our organization.

Talent acquisition is an important aspect of our business strategy and is guided by our desire to find the best team members to drive our business and build our “Best Place to Work” vision.

It starts with understanding our organizational needs and developing diverse candidate “slates” for the positions we plan to hire.

Our search process is based on personal engagement, and utilizes digital tools and channels, intelligent software and analytics, and competency assessment tools.

Recruiting is also about telling our story better – communicating our “Best Place to Work” vision using social media to reach a broader audience, and strengthening our partnerships with selected professional recruiters, labor agencies, universities, and trade schools.

Our apprentice, co-op and internship programs continue to grow and this creates an opportunity for potential candidates to assess the fit and opportunity within our organization over time.

Diversity, Equality and Inclusion

Diversity and Inclusion

We support and encourage a culture where diversity of thought flourishes, and all employees feel appreciated, included, and know they have an equal opportunity to develop, grow, and succeed based on their performance.

We believe demonstrating respect for our people and valuing them for who they are, their perspectives, and their contributions is critical to creating the best environment for our team to have success.

This is foundational for our “Best Place to Work.”

This is foundational for our “Best Place to Work” initiative.

Below are key demographics of our workforce.

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American Indian/Alaska Native 0.6%

Two or More Races 0.3%

In 2020, over 50% of our employees hired were classified as diverse.

We are building a team with people who bring diversity of thought, experience, and perspective to our organization.

We recognize our organization and the communities we operate in will continue to evolve and grow, which will require we remain focused on the following initiatives:

• Continue our mandatory and annual education and development program for the entire Company, including the Board of Directors, and evolve the curriculum as needed;

• Continue to “map” our organization with the communities we operate in to ensure the make-up of our team is reasonably representative of the community itself;

• Implement and upgrade business systems across the Company to give us the capability to gather and analyze data, derive conclusions, and develop action plans for implementation;

• Communicate our progress utilizing monthly business reviews with the leadership teams, and through quarterly communications with our teams, and quarterly reviews with the Board of Directors;

• Build the most effective recruitment framework to attract the best talent with the following objectives:

Build diversity of thought requirements into our recruiting process with our partner recruitment firms and labor agencies, universities and trade schools, and ensure they deliver diverse slates of candidates for our hiring needs;

Strengthen our outreach effort to build and broaden our opportunity for diverse talent--to include academic institutions, industry associations, local businesses, and affinity groups

• Be proactive with our customers and supply chain partners to find ways to work together in promoting positive social development.

Corporate Social Responsibility

The Board of Directors and the entire Gibraltar team are committed to improving and positively impacting the global environment, social development, and business governance.

We believe in doing business the right and most responsible way is foundational in executing and accelerating our vision and strategy.

Our efforts continue to focus on our People, our Communities, and the World.

Our Communities

To be sustainable and

responsible through the

advancement of our health and

welfare programs;

safety and well-being of our

people before anything else;

supporting professional growth

and developing our future

and supporting diversity

and inclusion.

By contributing to communities

where we do business and where

our people live and work;

supporting these communities

through charitable donations;

sponsoring volunteerism.

Operating responsibly in the

world by focusing on measuring,

managing and reducing our

environmental footprint, and

promoting responsibility across

our value chain.

There are three strategic tenets that drive our focus on corporate social responsibility:

Center our business portfolio on industries that are solving some of the world’s most important challenges – energy production, growing food, and home efficiency;

Invest and commit to improving our own operations – reducing greenhouse emissions through effective and efficient energy technologies, improving our energy efficiency, and sourcing more renewable energy for our power requirements;

Invest in the communities where our people live and work.

Gibraltar continues to transition its portfolio to focus on markets and businesses that are positioned to solve some of our world’s most critical challenges.

As of December 31, 2020, over 50% of our businesses were focused on driving environmentally-sound solutions in energy production, growing food, and home efficiency.

A representative example of this day-to-day effort is reflected in the Renewables and Conservation business.

• Since 2015, our Renewables business has installed over 2,500 solar energy fields across the U.S., offsetting more than 4 million metric tons of CO² equivalent.

We acquired TerraSmart on December 31, 2020, a leading solar technology business, to help us accelerate our vision to make solar energy the best overall energy solution to power the future.

In 2021, we plan to install Gibraltar’s first solar field to provide 100% of the electricity requirements of a key manufacturing facility.

• Our Conservation business is the largest North American based commercial greenhouse solutions provider, with over 3,000 acres of controlled-environment commercial growing installed in North America.

The business is focused on localizing the growing of fruits and vegetables, cannabis, flowers, and plants in a controlled environment utilizing natural sunlight, optimal water supply, and without pesticides.

We enable improved crop yield, food quality, and the overall health of consumers.

Across Gibraltar, we remain focused on contributing to the reduction of greenhouse emissions by deploying more effective and efficient ways in managing our operations, reducing the amount of power we consume, and identifying opportunities to source renewable energy for our power requirements.

We have partnered with the U.S.

Department of Energy’s Better Plants Program to improve energy efficiency and competitiveness at our operations and have also partnered with a global energy company to help us automate the identification and collection our emissions data.

These efforts will help us develop first company-wide sustainability report and establish a scientific-based carbon reduction plan and commitment for the future.

The health and well-being of the communities we operate in is important to everyone across our organization.

We continue to support many local charities with funding, time and talent, with a focus on improving the health and education of children.

In 2019, we launched our first employee giving program and employee donations made to St.

Jude’s Children’s Hospital, the Ronald MacDonald House, or Habitat for Humanity were supported with a 100% match from the company.

In 2020, we expanded our giving program to include food banks located in our communities.

Our employees donated over 3.3 million meals, approximately 85,000 meals for each food bank.

Gibraltar continues to be an advocate and supporter of our Veterans, the Make-A-Wish Foundation, and the United Way.

We recognize our organization and the communities we operate in will continue to evolve and grow.

We continue to develop our strategy to advance our diversity and inclusion (D&I) framework across our organization, including plans to ensure D&I is an integral part of our workplace and organization development, integrated into our interactions with shareholders, customers, and suppliers, and the development of process and metrics, education and communication tools to support our D&I initiatives.

Compensation and Employee Benefits

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Our employee health and welfare benefits program is designed to promote the overall health of our workforce.

While specific benefits vary worldwide and are based on regional practices, listed below are some common features offered to our United States based employees, which at December 31, 2020 comprised approximately 91% of our employees:

• Medical, dental and vision benefits for employee, spouse and dependents • Wellness incentives for employees

• Flexible spending accounts for both healthcare and dependent care • Life insurance benefits

• 401(k) retirement savings program with company matching contributions • Employee assistance program

• Paid vacation and holidays • Parental leave

• Short-term and long-term disability benefits

In addition, all salaried employees receive a written performance appraisal on an annual basis.

While specific benefits vary worldwide and are based on regional practices, benefits offered to our United States based employees, which at December 31, 2021 comprised approximately 95% of our employees, include paid time off, healthcare (medical, dental and vision), short and long term disability benefits, life and accidental insurance, a

401(k) retirement plan with a Company match, access to our employee assistance program, wellness incentives, parental leave, and a target-based incentive plan that provides for annual bonus opportunity when certain company financial metrics are met.

We review compensation at least annually for all employees and adjust it to ensure we reward exceptional performance and remain competitive in the market.

We also offer a target-based incentive plan that provides for annual bonus opportunity when certain company financial metrics are met.

Communication and Employee Engagement

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Every quarter, our CEO conducts a live "Town Hall" meeting for the entire organization with a standard agenda reviewing ethics and compliance, safety performance, business performance, community service initiatives, employee recognition, and concludes with a live Questions & Answers session.

After each Town Hall meeting, our team is surveyed for feedback on ways to improve the meeting.

As well, each Gibraltar business leader is required to develop and execute a similar communication plan for their business.

In 2020, we also conducted an employee engagement survey to solicit input about our brand, company reputation, and culture.

The results of the survey will contribute to Gibraltar's brand assessment initiative as well as further strengthen our internal communication process.

creating a "Best Place to Work" environment requires continuous and effective engagement and communication with our employees, and it also creates a strong foundation for attracting and retaining our team.

Information About Executive Officers

Our senior management team is composed of talented and experienced managers possessing broad experience in operational excellence, new product development, and driving profitable growth gained over multiple business cycles:

William Bosway - President, Chief Executive Officer (CEO) and a member of the Board of Directors.

Bosway was appointed President, Chief Executive Office and a member of the Board of Directors effective January 2, 2019.

Bosway joined our Company with extensive experience in global manufacturing industries, driving organic growth, acquisitions, lean manufacturing and continuous improvement techniques.

Patrick Burns - Chief Operating Officer (COO).

Burns was appointed COO of the Company on March 18, 2019.

Burns joined with Company with significant experience in key leadership and operational strategy roles at various multi-industrial companies over his career.

Timothy Murphy - Chief Financial Officer (CFO) and Senior Vice President (SVP).

Murphy was appointed CFO and SVP of the Company on April 1, 2017.

Murphy joined the Company in 2004 as Director of Financial Reporting, and subsequently served as the Company's Vice President, Treasurer and Secretary.

Cherri Syvrud - SVP of Human Resources and Organizational Development.

Syvrud was appointed SVP of Human Resources and Organizational Development on April 1, 2016.

Syvrud joined the Company with significant experience in human resources and organization development, including 25 years of employment at Illinois Tool Works, Inc.

Jeffrey Watorek - Vice President, Treasurer and Secretary.

Watorek was appointed as Vice President, Treasurer and Secretary on April 1, 2017.

Watorek joined the Company in 2008 as Manager of Financial Reporting, and subsequently served as the Company's Director of Financial Planning and Analysis.

In 2020, we also conducted an employee engagement survey to solicit input about our brand, company reputation, and culture which contributed to Gibraltar's brand assessment initiative in 2021 as well as further strengthened our internal communication process.

In 2021 we solicited input from our employees as part of our Priority Assessment survey used to inform Gibraltar of key topics material to our CSR commitment and important to our stakeholders Ultimately, our goal to create a "Best Place to Work" environment requires continuous and effective engagement and communication with our employees, and it also creates a strong foundation for attracting and retaining our team.

Internet Information

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business