What changed in this filing

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Item 1. Financial Statements

2022-05-04 compared with 2021-10-27 · 119 added, 292 removed, 347 unchanged (54% of the section changed)

4 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

Net Sales $ 317,865 $ 287,592

4 unchanged sentences

Interest expense 485 444

Other expense (income) 72 ( 48 ) ( 4,279 ) ( 1,422 )

Other expense 153 315

Income before taxes 20,557 12,056

2 unchanged sentences

Discontinued operations:

(Loss) Income before taxes ( 201 ) 2,814 1,867 9,390

Income before taxes — 2,570

Provision for income taxes — 304

(Loss) Income from discontinued operations ( 298 ) 2,426 1,544 7,418

Income from discontinued operations — 2,266

Net income $ 15,456 $ 12,762

1 unchanged sentence

Income from continuing operations $ 0.47 $ 0.32

(Loss) Income from discontinued operations ( 0.01 ) 0.07 0.05 0.23

Income from discontinued operations — 0.07

Net income $ 0.47 $ 0.39

2 unchanged sentences

Income from continuing operations $ 0.47 $ 0.32

(Loss) Income from discontinued operations ( 0.01 ) 0.07 0.05 0.22

Income from discontinued operations — 0.07

Net income $ 0.47 $ 0.39

5 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

Net income $ 15,456 $ 12,762

1 unchanged sentence

Foreign currency translation adjustment ( 227 ) 3,198

Minimum post retirement benefit plan adjustments 27 18 81 54

Minimum post retirement benefit plan adjustments, net of tax 24 27

Other comprehensive (loss) income ( 203 ) 3,225

4 unchanged sentences

(in thousands, except per share data)

September 30,

2022 December 31,

5 unchanged sentences

Prepaid expenses and other current assets 36,836 21,467

Assets of discontinued operations — 77,438

Total current assets 485,471 446,967

8 unchanged sentences

Accounts payable $ 159,214 $ 172,286

Accrued expenses 71,663 83,505

Accrued expenses and other current liabilities 67,495 67,993

Billings in excess of cost 60,992 46,711

Liabilities of discontinued operations — 49,295

Total current liabilities 287,701 286,990

8 unchanged sentences

Common stock, $ 0.01 par value;

100,000 shares and 50,000 shares authorized at September 30, 2021 and December 31, 2020, respectively;

authorized 100,000 shares in 2022 and 2021;

33,972 shares and 33,799 shares issued and outstanding in 2022 and 2021

1 unchanged sentence

Retained earnings 561,028 545,572

Accumulated other comprehensive income (loss) 522 ( 2,461 )

Accumulated other comprehensive (loss) income ( 16 ) 187

Cost of 1,179 and 1,107 common shares held in treasury in 2022 and 2021

6 unchanged sentences

(in thousands)

Nine Months Ended

September 30,

Three Months Ended

Cash Flows from Operating Activities

2 unchanged sentences

Income from continuing operations 15,456 10,496

Adjustments to reconcile net income to net cash (used in) provided by operating activities:

Adjustments to reconcile net income to net cash used in operating activities:

Depreciation and amortization 6,336 7,974

Stock compensation expense 1,352 2,368

Gain on sale of business — ( 1,881 )

Exit activity costs, non-cash 1,198 1,193

(Benefit of) provision for deferred income taxes ( 689 ) 680

Provision for deferred income taxes 17 —

Other, net 1,395 ( 162 )

5 unchanged sentences

Accrued expenses and other non-current liabilities 9,761 ( 6,334 )

Net cash (used in) provided by operating activities of continuing operations ( 14,523 ) 45,316

Net cash (used in) provided by operating activities of discontinued operations ( 2,002 ) 10,878

Net cash (used in) provided by operating activities ( 16,525 ) 56,194

Net cash used in operating activities of continuing operations ( 7,754 ) ( 1,214 )

Net cash used in operating activities of discontinued operations — ( 2,011 )

Net cash used in operating activities ( 7,754 ) ( 3,225 )

Cash Flows from Investing Activities

3 unchanged sentences

Net proceeds from sale of property and equipment 7 —

Net cash provided by (used in) investing activities of continuing operations 28,954 ( 60,200 )

Net cash (used in) provided by investing activities of continuing operations ( 4,402 ) 22,600

Net cash used in investing activities of discontinued operations — ( 176 )

Net cash provided by (used in) investing activities 28,778 ( 61,152 )

Net cash (used in) provided by investing activities ( 4,402 ) 22,424

Cash Flows from Financing Activities

3 unchanged sentences

Net proceeds from issuance of common stock — 910

Net cash used in financing activities ( 30,276 ) ( 6,031 )

Net cash provided by (used in) financing activities 15,039 ( 30,388 )

Effect of exchange rate changes on cash ( 159 ) ( 134 )

Net decrease in cash and cash equivalents ( 18,120 ) ( 11,547 )

Net increase (decrease) in cash and cash equivalents 2,724 ( 11,323 )

Cash and cash equivalents at beginning of year 12,849 32,054

6 unchanged sentences

Paid-In Capital Retained Earnings Accumulated

Comprehensive (Loss) Income Treasury Stock Total

Comprehensive Income (Loss) Treasury Stock Total

Stockholders’ Equity

6 unchanged sentences

Stock compensation expense — — 1,352 — — — — 1,352

Stock options exercised 25 — 910 — — — — 910

Net settlement of restricted stock units 173 2 ( 2 ) — — 72 ( 3,461 ) ( 3,461 )

Balance at March 31, 2022 33,972 $ 340 $ 315,891 $ 561,028 $ ( 16 ) 1,179 $ ( 38,841 ) $ 838,402

Net income — — — 25,949 — — — 25,949

Foreign currency translation adjustment — — — — 761 — — 761

Minimum post retirement benefit plan adjustments, net of taxes of $ 10

— — — — 27 — — 27

Stock compensation expense — — 2,567 — — — — 2,567

Stock options exercised 1 — 14 — — — — 14

Awards of common shares 3 — — — — — — —

Net settlement of restricted stock units 3 — — — — 1 ( 118 ) ( 118 )

Balance at June 30, 2021 33,718 $ 337 $ 310,728 $ 508,654 $ 1,552 1,083 $ ( 33,663 ) $ 787,608

Net income — — — 27,556 — — — 27,556

Foreign currency translation adjustment — — — — ( 1,057 ) — — ( 1,057 )

Minimum post retirement benefit plan adjustments, net of taxes of $ 9

— — — — 27 — — 27

Stock compensation expense — — 1,834 — — — — 1,834

Stock options exercised 10 — 97 — — — — 97

Net settlement of restricted stock units 54 1 ( 1 ) — — 19 ( 1,381 ) ( 1,381 )

Balance at September 30, 2021 33,782 $ 338 $ 312,658 $ 536,210 $ 522 1,102 $ ( 35,044 ) $ 814,684

See accompanying notes to consolidated financial statements.

4 unchanged sentences

Paid-In Capital Retained Earnings Accumulated

Comprehensive Loss Treasury Stock Total

Comprehensive (Loss) Income Treasury Stock Total

Stockholders’ Equity

6 unchanged sentences

Stock compensation expense — — 2,368 — — — — 2,368

Cumulative effect of accounting change — — — ( 291 ) — — — ( 291 )

Stock options exercised 25 — 910 — — — — 910

1 unchanged sentence

Balance at March 31, 2021 33,711 $ 337 $ 308,147 $ 482,705 $ 764 1,082 $ ( 33,545 ) $ 758,408

Net income — — — 27,292 — — — 27,292

Foreign currency translation adjustment — — — — 2,815 — — 2,815

Minimum post retirement benefit plan adjustments, net of taxes of $ 6

— — — — 18 — — 18

Stock compensation expense — — 2,506 — — — — 2,506

Stock options exercised 6 — 54 — — — — 54

Awards of common shares 4 — — — — — — —

Net settlement of restricted stock units 15 — — — — 7 ( 278 ) ( 278 )

Balance at June 30, 2020 33,413 $ 334 $ 299,829 $ 444,728 $ ( 8,438 ) 993 $ ( 26,689 ) $ 709,764

Net income — — — 33,760 — — — 33,760

Foreign currency translation adjustment — — — — 2,200 — — 2,200

Minimum post retirement benefit plan adjustments, net of taxes of $ 7

— — — — 18 — — 18

Stock compensation expense — — 1,980 — — — — 1,980

Stock options exercised 31 — 299 — — — — 299

Net settlement of restricted stock units 75 1 ( 1 ) — — 31 ( 1,946 ) ( 1,946 )

Balance at September 30, 2020 33,519 $ 335 $ 302,107 $ 478,488 $ ( 6,220 ) 1,024 $ ( 28,635 ) $ 746,075

See accompanying notes to consolidated financial statements.

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(2) RECENT ACCOUNTING PRONOUNCEMENTS

Recent Accounting Pronouncements Adopted

Recent Accounting Pronouncements Not Yet Adopted

Standard Description Financial Statement Effect or Other Significant Matters

Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes

The amendments in this update simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and improve consistent application by clarifying and amending existing guidance.

The amendments of this standard are effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years.

The standard is effective for the Company as of January 1, 2021.

The Company adopted the amendments in this update and the adoption did not have a material impact to the Company’s financial statements.

Date of adoption:

(3) ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS

Reference Rate Reform (Topic 848), Facilitation of Effects of Reference Rate Reform on Financial Reporting, and

2021-01 Reference Rate Reform (Topic 848), Scope

The amendments in ASU 2020-04 provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met, and apply only to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued as a result of reference rate reform.

The expedients and exceptions provided by the amendments in ASU 2020-04 do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022.

The amendments in ASU 2021-01 clarify that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition.

The amendments in these updates are effective as of March 12, 2020 through December 31, 2022, and may be applied retrospectively to contract modifications and hedging relationships from the beginning of an interim period that includes or is subsequent to March 12, 2020, or on a prospective basis to new modifications from any date within an interim period that includes or is subsequent to the date of the issuance of a final update, up to the date the financial statements are available to be issued.

The adoption of the amendments in these updates is not expected to have a material impact on the Company's financial statements.

(3) ACCOUNTS RECEIVABLE, NET

Accounts receivable consists of the following (in thousands):

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Trade accounts receivable $ 203,860 $ 185,745

4 unchanged sentences

Refer to Note 4 "Revenue" concerning the Company's costs in excess of billings.

The following table provides a roll-forward of the allowance for credit losses, for the nine month period ended September 30, 2021, that is deducted from the amortized cost basis of accounts receivable to present the net amount expected to be collected.

The following table provides a roll-forward of the allowance for credit losses, for the three month period ended March 31, 2022, that is deducted from the amortized cost basis of accounts receivable to present the net amount expected to be collected.

Beginning balance as of January 1, 2022 $ 3,738

1 unchanged sentence

Accounts written off against allowance and other adjustments ( 170 )

Ending balance as of September 30, 2021 $ 5,799

Sales includes revenue from contracts with customers for:

designing, engineering, manufacturing and installation of solar racking systems;

Ending balance as of March 31, 2022 $ 4,433

Sales includes revenue from contracts with customers for designing, engineering, manufacturing and installation of solar racking systems;

electrical balance of systems;

13 unchanged sentences

Refer to Note 14 "Segment Information" for additional information related to revenue recognized by timing of transfer of control by reportable segment.

As of September 30, 2021, the Company's remaining performance obligations are part of contracts that have an original expected duration of one year or less.

As of March 31, 2022, the Company's remaining performance obligations are part of contracts that have an original expected duration of one year or less.

Contract assets consist of costs in excess of billings presented within accounts receivable in the Company's consolidated balance sheets.

Contract liabilities consist of billings in excess of cost, classified as current liabilities, and unearned revenue, presented within accrued expenses, in the Company's consolidated balance sheets.

Unearned revenue as of September 30, 2021 and December 31, 2020 was $ 3.2 million and $ 21.3 million, respectively.

Revenue recognized during the nine months ended September 30, 2021 and 2020 that was in contract liabilities at the beginning of the respective periods was $ 52.6 million and $ 56.5 million, respectively.

Unearned revenue as of March 31, 2022 and December 31, 2021 was $ 2.4 million and $ 3.7 million, respectively.

Revenue recognized during the three months ended March 31, 2022 and 2021 that was in contract liabilities at the beginning of the respective periods was $ 27.4 million and $ 40.7 million, respectively.

(5) INVENTORIES

Inventories consist of the following (in thousands):

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Raw material $ 139,449 $ 135,558

4 unchanged sentences

Total inventories, net $ 187,255 $ 176,207

(6) ACQUISITIONS

2020 Acquisitions

During the year ended December 31, 2020, the Company acquired five businesses in separate transactions, described further below, two of which are included within our Renewables segment, two in our Agtech segment, and one in our Residential segment.

The purchase consideration for each acquisition was allocated to the assets acquired and liabilities assumed based upon their respective fair values.

On December 31, 2020, the Company purchased all the outstanding membership interests of TerraSmart LLC and TerraTrak LLC (collectively, "TerraSmart"), a leading provider of screw-based, ground-mount solar racking technology, particularly used for solar projects installed on challenging terrain.

The results of TerraSmart have been included in the Company's consolidated financial results since the date of acquisition within the Company's Renewables segment.

The purchase consideration for the acquisition of TerraSmart was $ 223.9 million, which includes a working capital adjustment and certain other adjustments provided for in the equity purchase agreement.

The purchase price for the TerraSmart acquisition was preliminarily allocated to the assets acquired and liabilities assumed based upon their respective fair values estimated as of the date of acquisition.

The Company has commenced the process to confirm the existence, condition and completeness of the assets acquired and liabilities assumed to establish fair values of such acquired assets and assumed liabilities and to determine the amount of goodwill to be recognized as of the date of acquisition.

We continue to gather information supporting the acquired assets and assumed liabilities.

Accordingly, all amounts recorded are provisional.

These provisional amounts are subject to change if new information is obtained concerning facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date.

The final determination of the fair value of certain assets and liabilities will be completed within a measurement period of up to one year from the date of acquisition.

The final values may also result in changes to depreciation and amortization expense related to certain assets such as property, plant and equipment and acquired intangible assets.

The preliminary excess consideration (purchase consideration over the aggregate value of the assets acquired net of liabilities assumed) was recorded as goodwill and approximated $ 139.1 million, all of which is deductible for tax purposes.

Goodwill represents future economic benefits arising from other assets acquired that could not be individually identified including workforce additions, growth opportunities, and increased presence in

the domestic solar energy market.

The final purchase price allocation will be completed no later than December 31, 2021.

The preliminary allocation of the TerraSmart purchase consideration to the estimated fair value of the assets acquired and liabilities assumed is as follows as of the date of the acquisition (in thousands):

Working capital 7,148

Property, plant and equipment 11,758

Acquired intangible assets 64,150

Other assets 1,854

Other liabilities ( 1,640 )

Goodwill 139,106

Fair value of purchase consideration $ 223,867

The intangible assets acquired in the TerraSmart acquisition consisted of the following (in thousands):

Fair Value Weighted-Average Amortization Period

Trademarks $ 20,830 Indefinite

Technology 1,940 12 years

Customer relationships 35,110 12 years

Backlog 6,270 Less than 1 year

Total $ 64,150

On December 11, 2020, the Company purchased all the outstanding stock of Sunfig Corporation ("Sunfig"), a provider of software solutions that optimize solar energy investments through upstream design, performance and financial modeling, for a purchase consideration of $ 3.8 million, which includes a working capital adjustment and certain other adjustments provided for in the stock purchase agreement.

The results of Sunfig have been included in the Company's consolidated financial results since the date of acquisition within the Company's Renewables segment.

The excess consideration was recorded as goodwill and approximated $ 3.5 million, all of which is deductible for tax purposes.

On October 15, 2020, the Company purchased substantially all of the assets of Architectural Mailboxes LLC ("Architectural Mailboxes"), a complementary addition to the Company's existing mail and package solutions business within the Residential segment, for a purchase consideration of $ 26.9 million, which includes a working capital adjustment and certain other adjustments provided for in the asset purchase agreement.

The results of Architectural Mailboxes have been included in the Company's consolidated financial results since the date of acquisition within the Company's Residential segment.

The excess consideration was recorded as goodwill and approximated $ 7.4 million, all of which is deductible for tax purposes.

On February 13, 2020, the Company purchased substantially all of the assets of Delta Separations, LLC and Teaching Tech, LLC (collectively, "Delta Separations") for a purchase consideration of $ 47.1 million, which includes a working capital adjustment and certain other adjustments provided for in the asset purchase agreement.

Delta Separations was a privately-held engineering company primarily engaged in the assembly and sale of centrifugal ethanol-based extraction systems.

The results of Delta Separations have been included in the Company's consolidated financial results since the date of acquisition within the Company's Agtech segment.

The excess consideration was recorded as goodwill and approximated $ 32.2 million, all of which is deductible for tax purposes.

On January 15, 2020, the Company purchased substantially all of the assets of Thermo Energy Systems Inc.

("Thermo"), a Canadian-based, privately held provider of commercial greenhouse solutions in North America providing growing infrastructure for the plant based organic food market, for a purchase consideration of $ 7.3 million.

The results of Thermo have been included in the Company's consolidated financial results since the

date of acquisition within the Company's Agtech segment.

Goodwill of approximately $ 18.7 million was recorded, all of which is deductible for tax purposes.

The allocation of the purchase consideration to the estimated fair value of the assets acquired and liabilities assumed in the acquisitions of Sunfig, Architectural Mailboxes, Delta Separations and Thermo is as follows as of the respective date of the acquisition (in thousands):

Working capital ( 14,959 )

Property, plant and equipment 1,740

Acquired intangible assets 38,066

Other current assets 1,528

Other assets 2,381

Other liabilities ( 5,576 )

Goodwill 61,722

Fair value of purchase consideration $ 85,102

The intangible assets acquired in the acquisitions of Sunfig, Architectural Mailboxes, Delta Separations and Thermo consisted of the following (in thousands):

Fair Value Weighted-Average Amortization Period

Trademarks $ 8,100 Indefinite

Trademarks 1,177 3 years

Technology 8,345 5 - 15 years

Customer relationships 18,480 11 - 13 years

Non-compete agreements 1,036 5 years

Backlog 928 Less than 1 year

Total $ 38,066

In determining the allocation of the purchase price to the assets acquired and the liabilities assumed, the Company uses all available information to make fair value determinations using Level 3 unobservable inputs in which little or no market data exists, and therefore, engages independent valuation specialists to assist in the fair value determination of the acquired long-lived assets.

The acquisition of TerraSmart was financed through a combination of cash on hand and borrowings under the Company's revolving credit facility.

The acquisitions of Sunfig, Architectural Mailboxes, Delta Separations and Thermo were funded from available cash on hand.

The Company recognized costs as a component of cost of sales related to the sale of inventory at fair value as a result of allocating the purchase price of recent acquisitions.

The Company also incurred certain acquisition-related costs composed of legal and consulting fees.

These costs were recognized as a component of selling, general, and administrative expenses in the consolidated statement of operations.

The acquisition-related costs consisted of the following for the three and nine months ended September 30 (in thousands):

Three Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

Cost of sales $ — $ — $ — $ 634

Selling, general and administrative costs 53 16 946 1,564

Total acquisition-related costs $ 53 $ 16 $ 946 $ 2,198

(6) GOODWILL AND RELATED INTANGIBLE ASSETS

The changes in the carrying amount of goodwill for the nine months ended September 30, 2021 are as follows (in thousands):

The changes in the carrying amount of goodwill for the three months ended March 31, 2022 are as follows (in thousands):

Renewables Residential Agtech Infrastructure Total

Balance at December 31, 2021 $ 188,680 $ 205,452 $ 85,132 $ 31,678 $ 510,942

Adjustments to prior year acquisitions ( 4,323 ) — — — ( 4,323 )

Foreign currency translation ( 707 ) — 305 — ( 402 )

Balance at September 30, 2021 $ 187,214 $ 205,452 $ 84,316 $ 31,678 $ 508,660

Balance at March 31, 2022 $ 187,973 $ 205,452 $ 85,437 $ 31,678 $ 510,540

The Company is required to regularly assess whether a triggering event has occurred which would require interim impairment testing.

The Company determined that a triggering event has not occurred which would require an interim impairment test to be performed.

The Company determined that a triggering event has not occurred as of March 31, 2022 which would require an interim impairment test to be performed.

Acquired Intangible Assets

Acquired intangible assets consist of the following (in thousands):

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Amount Accumulated

11 unchanged sentences

Total acquired intangible assets $ 206,216 $ 74,109 $ 215,172 $ 73,668

The following table summarizes the acquired intangible asset amortization expense for the three and nine months ended September 30 (in thousands):

The following table summarizes the acquired intangible asset amortization expense for the three months ended March 31 (in thousands):

Three Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

Amortization expense $ 3,098 $ 4,743

4 unchanged sentences

Long-term debt consists of the following (in thousands):

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Revolving credit facility $ 43,000 $ 24,500

Other debt — 636

Less unamortized debt issuance costs ( 633 ) ( 719 )

4 unchanged sentences

The Senior Credit Agreement contains three financial covenants.

As of September 30, 2021, the Company was in compliance with all three covenants.

As of March 31, 2022, the Company was in compliance with all three covenants.

Interest rates on the revolving credit facility are based on LIBOR plus an additional margin that ranges from 1.125 % to 2.00 %.

2 unchanged sentences

Borrowings under the Senior Credit Agreement are secured by the trade receivables, inventory, personal property, equipment, and general intangibles of the Company’s significant domestic subsidiaries.

Standby letters of credit of $ 6.6 million have been issued under the Senior Credit Agreement on behalf of the Company as of September 30, 2021.

Capital distributions under the Senior Credit Agreement are capped at an annual aggregate limit of $ 75 million if the Company's leverage ratio is over 3.0 times.

Standby letters of credit of $ 5.5 million have been issued under the Senior Credit Agreement on behalf of the Company as of March 31, 2022.

These letters of credit reduce the amount otherwise available under the revolving credit facility.

The Company had $ 332.9 million and $ 309.2 million of availability under the revolving credit facility at September 30, 2021 and December 31, 2020, respectively.

The Company had $ 351.5 million and $ 369.3 million of availability under the revolving credit facility at March 31, 2022 and December 31, 2021, respectively.

(8) ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following tables summarize the cumulative balance of each component of accumulated other comprehensive income (loss), net of tax, for the three and nine months ended September 30, (in thousands):

The following tables summarize the cumulative balance of each component of accumulated other comprehensive income (loss), net of tax, for the three months ended March 31, (in thousands):

Foreign Currency Translation Adjustment Minimum post retirement benefit plan

1 unchanged sentence

Comprehensive

(Loss) Income

Income (Loss)

Balance at December 31, 2021 $ 1,640 $ ( 2,247 ) $ ( 607 ) $ 794 $ 187

2 unchanged sentences

Balance at March 31, 2022 $ 1,413 $ ( 2,213 ) $ ( 800 ) $ 784 $ ( 16 )

Minimum post retirement health care plan adjustments — 37 37 10 27

Foreign currency translation adjustment

761 — 761 — 761

Balance at June 30, 2021 $ 3,087 $ ( 2,352 ) $ 735 $ ( 817 ) $ 1,552

Minimum post retirement health care plan adjustments — 36 36 9 27

Foreign currency translation adjustment

( 1,057 ) — ( 1,057 ) — ( 1,057 )

Balance at September 30, 2021 $ 2,030 $ ( 2,316 ) $ ( 286 ) $ ( 808 ) $ 522

Foreign Currency Translation Adjustment Minimum post retirement benefit plan

6 unchanged sentences

Balance at March 31, 2021 $ 2,326 $ ( 2,389 ) $ ( 63 ) $ 827 $ 764

Minimum post retirement health care plan adjustments — 24 24 6 $ 18

Foreign currency translation adjustment 2,815 — 2,815 — 2,815

Balance at June 30, 2020 $ ( 7,256 ) $ ( 1,890 ) $ ( 9,146 ) $ ( 708 ) $ ( 8,438 )

Minimum post retirement health care plan adjustments — 25 25 7 18

Foreign currency translation adjustment 2,200 — 2,200 — 2,200

Balance at September 30, 2020 $ ( 5,056 ) $ ( 1,865 ) $ ( 6,921 ) $ ( 701 ) $ ( 6,220 )

The realized adjustments relating to the Company’s minimum post retirement health care costs were reclassified from accumulated other comprehensive loss and included in other expense in the consolidated statements of income.

6 unchanged sentences

In 2016, the stockholders of the Company approved the adoption of the Gibraltar Industries, Inc.

of the Company, and permits the Directors to defer receipt of such shares pursuant to the terms of the Non-Employee Directors Plan.

2016 Stock Plan for Non-Employee Directors ("Non-Employee Directors Plan") which provides for the issuance of up to 100,000 shares, allows the Company to grant awards of shares of the Company's common stock to non-employee Directors of the Company, and permits the Directors to defer receipt of such shares pursuant to the terms of the Non-Employee Directors Plan.

Equity Based Awards - Settled in Stock

The following table sets forth the number of equity-based awards granted during the nine months ended September 30, which will convert to shares upon vesting, along with the weighted average grant date fair values:

The following table sets forth the number of equity-based awards granted during the three months ended March 31, which will convert to shares upon vesting, along with the weighted average grant date fair values:

Awards Number of

4 unchanged sentences

Restricted stock units 58,958 $ 47.00 33,187 $ 87.91

Deferred stock units 7,536 $ 83.58 12,402 $ 45.98

Common shares 2,512 $ 83.58 4,134 $ 45.98

(1) The Company’s performance stock units (“PSUs”) represent shares granted for which the final number of shares earned depends on financial performance or market conditions.

The number of shares to be issued may vary between 0 % and 200 % of the number of PSUs granted depending on the relative achievement to targeted thresholds.

The Company's PSUs with a financial performance condition are based on either the Company’s return on invested capital (“ROIC”) over a one-year performance period or other criteria such as revenue, gross profit and operating profit thresholds over a two or three-year performance period.

The Company's PSUs with a financial performance condition are based on either the Company’s return on invested capital (“ROIC”) over a one-year performance period.

The Company's PSUs with a market condition are based on the ranking of the Company’s total stockholder return (“TSR”) performance, on a percentile basis, over a three year performance period compared to the S&P Small Cap Industrial sector, over the same three year performance period.

(2) PSUs granted in 2020 include 76,792 PSUs that will be converted to shares and issued to recipients in the first quarter of 2023 at 109.5 % of the target amount granted, based on the Company’s actual ROIC compared to ROIC target for the performance period ended December 31, 2020.

(2) All PSUs granted in the first quarter of 2021 were forfeited in the first quarter of 2022 as the threshold level of achievement was not met based on the Company's actual ROIC achievement level for the performance period ended December 31, 2021.

Equity Based Awards - Settled in Cash

The Company's equity-based liability is comprised of awards under a management stock purchase plan.

As of September 30, 2021, the Company's total share-based liabilities recorded on the consolidated balance sheet were $ 23.9 million, of which $ 20.7 million was included in non-current liabilities.

The share-based liabilities as of December 31, 2020 were $ 18.2 million, of which $ 14.7 million was included in non-current liabilities.

The Company's Management Stock Purchase Plan ("MSPP") provides participants the ability to defer a portion of their compensation, convertible to unrestricted investments, restricted stock units, or a combination of both, or defer a portion of their directors’ fees, convertible to restricted stock units.

The Company's equity-based awards that are settled in cash are the awards under the Management Stock Purchase Plan (the "MSPP") which is authorized under the Company's equity incentive plans.

The total of these share-based liabilities recorded on the consolidated balance sheet as of March 31, 2022 was $ 18.9 million, of which $ 2.0 million was included in current accrued expenses and $ 16.9 million was included in non-current liabilities.

Total share-based liabilities as of December 31, 2021 were $ 22.6 million, of which $ 2.9 million was included in current accrued expenses and $ 19.7 million was included in non-current liabilities.

The Company's MSPP provides participants the ability to defer a portion of their compensation, convertible to unrestricted investments, restricted stock units, or a combination of both, or defer a portion of their directors’ fees, convertible to restricted stock units.

Employees eligible to defer a portion of their compensation also receive a company-matching award in restricted stock units equal to a percentage of their compensation.

2 unchanged sentences

The account will be converted to and settled in cash payable to participants upon retirement or a termination of their service to the Company.

The following table provides the number of restricted stock units credited to active participant accounts and the payments made with respect to restricted stock units issued under the MSPP during the nine months ended September 30,:

Restricted stock units credited 2,876 24,085

Share-based liabilities paid (in thousands) $ 2,545 $ 3,510

(10) HELD FOR SALE AND DISCONTINUED OPERATIONS

Held for Sale

During the first quarter of 2022, the Company committed to a plan to sell its Processing business (the "disposal group") which is a business within the Company's Agtech reportable segment.

The planned sale does not meet the criteria to be classified as a discontinued operation.

As a result, the Company will continue reporting the operating results of the disposal group in the Company's consolidated operating results from continuing operations until the sale of the business is completed.

The Company classifies assets and related liabilities as held for sale when:

(i) management has committed to a plan to sell the assets, (ii) the net assets are available for immediate sale, (iii) there is an active program to locate a buyer and (iv) the sale and transfer of the net assets is probable within one year.

Assets and liabilities held for sale are presented separately on our consolidated balance sheets with a valuation allowance, if necessary, to recognize the net carrying amount at the lower of cost or fair value, less costs to sell.

As of March 31, 2022, the assets and liabilities of the disposal group have been classified as held for sale.

The following table summarizes these assets and liabilities which have been measured at the lower of (i) the carrying value when classified as held for sale and (ii) the fair value of the business less costs to sell.

(in thousands) March 31, 2022

Assets held for sale

Accounts receivable, net of allowance $ 1,260

Inventories, net of reserves 8,093

Other current assets 1,627

Property, plant, and equipment, net 331

Operating lease asset 415

Acquired intangibles, net 6,213

Total assets held for sale $ 17,939

Liabilities held for sale

Accounts payable $ 1,291

Accrued expenses 1,172

Non-current operating lease liabilities 172

Total liabilities held for sale $ 2,635

(1) The assignment of goodwill was based on the relative fair value of the disposal group compared to the fair value of the total reporting unit it was included in prior to being reclassified as held for sale.

Net sales and operating loss for held for sale operations for the three months ended March 31 are as follows (in thousands):

Net sales $ 1,823 $ 4,973

Operating loss $ ( 2,525 ) $ ( 749 )

Effective with the classification of the disposal group as held for sale, depreciation of property, plant and equipment and amortization of finite-lived intangible assets and right-of-use assets are not recorded while these assets are classified as held for sale.

As a result of our evaluation of the recoverability of the carrying value of the assets and liabilities held for sale relative to an estimated sales price, adjusted for costs to sell, no losses were recorded during the three months ended March 31, 2022.

The recoverability of the disposal group will be evaluated each reporting period until the sale of the business is completed.

Discontinued Operations

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The Company allocates interest to its discontinued operations in accordance with ASC Subtopic 205-20, “Presentation of Financial Statements – Discontinued Operations.” Interest was allocated based on the amount of net assets held by the discontinued operation in comparison to consolidated net assets.

The following carrying amounts of the major classes of assets and liabilities included in discontinued operations related to the Industrial business have been segregated from the Company's continuing operations and are reported as assets and liabilities of discontinued operations, respectively, in the consolidated balance sheet at December 31, 2020 (in thousands):

December 31, 2020

Accounts receivable, net $ 11,261

Inventories, net 13,041

Prepaid expenses and other current assets 21,310

Total current assets (1) 45,612

Property, plant, and equipment, net 16,999

Operating lease assets 6,470

Goodwill 22,475

Acquired intangibles 15,482

Loss recognized on classification as held for sale ( 29,600 )

Total noncurrent assets (1) 31,826

Total assets classified as held for sale $ 77,438

Accounts payable $ 10,708

Accrued expenses 9,274

Total current liabilities (1) 19,982

Deferred income taxes 24,657

Non-current operating lease liabilities 4,639

Other non-current liabilities 17

Total noncurrent liabilities (1) 29,313

Total liabilities classified as held for sale $ 49,295

(1) The assets and liabilities of the discontinued operations were classified as current on the December 31, 2020 consolidated balance sheet, as it was probable that the sale would occur and proceeds would be collected within one year.

Components of income from discontinued operations before taxes, including the interest allocated to discontinued operations, for the three and nine months ended September 30 are as follows (in thousands):

Components of income from discontinued operations before taxes, including the interest allocated to discontinued operations, for the three months ended March 31 are as follows (in thousands):

Three months ended

September 30, Nine months ended

September 30,

2021 2020 2021 2020

Net sales $ — $ 20,391

1 unchanged sentence

Adjustment to loss on disposal — 328

Interest expense allocation — 31 — 71

(Loss) Income from discontinued operations before taxes $ ( 201 ) $ 2,814 $ 1,867 $ 9,390

On June 30, 2020, the Company sold its self-guided apartment tour application business to a third party from its Residential segment.

The $ 2.0 million net proceeds from the sale resulted in pre-tax net gain of $ 1.9 million and has been presented within other (income) expense in the consolidated statements of income.

This divestiture did not meet the criteria to be reported as discontinued operations nor will it have a major effect on the Company's operations.

Income from discontinued operations before taxes $ — $ 2,570

(11) EXIT ACTIVITY COSTS AND ASSET IMPAIRMENTS

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These initiatives have resulted in the identification of low-volume, low margin, internally-produced products which have been or will be outsourced or discontinued, the simplification of processes, the sale and exiting of less profitable businesses or product lines, and a reduction in our manufacturing footprint.

Exit activity costs were incurred during the nine months ended September 30, 2021 and 2020 which related to moving and closing costs, severance, and contract terminations, along with asset impairment charges related to the write-down of inventory and impairment of machinery and equipment associated with discontinued product lines, as a result of process simplification initiatives.

In conjunction with these initiatives, the Company closed two facilities during the nine months ended September 30, 2021.

During the nine months ended September 30, 2020, the Company closed one facility and, separately, sold a facility closed in 2017, as a result of these initiatives.

The following tables set forth the exit activity costs and asset impairment charges incurred by segment during the three and nine months ended September 30, related to the restructuring activities described above (in thousands):

Three months ended September 30,

Exit activity costs Asset impairment charges Total Exit activity (recoveries) costs, net Asset impairment charges Total

Renewables $ 131 $ — $ 131 $ ( 3 ) $ — $ ( 3 )

Residential 83 — 83 165 21 186

Agtech 293 — 293 175 — 175

Infrastructure — — — — — —

Corporate 37 — 37 17 — 17

Total exit activity costs & asset impairments $ 544 $ — $ 544 $ 354 $ 21 $ 375

Nine months ended September 30,

Exit activity costs Asset impairment charges Total Exit activity costs Asset impairment charges Total

Exit activity costs (recoveries) were incurred during the three months ended March 31, 2022 and 2021 which related to moving and closing costs, severance, and contract terminations, along with asset impairment charges related to the write-down of inventory and impairment of machinery and equipment associated with discontinued product lines, as a result of process simplification initiatives.

In conjunction with these initiatives, the Company closed one facility during the three months ended March 31, 2022.

During the three months ended March 31, 2021, the Company closed two facilities as a result of these initiatives.

The following tables set forth the exit activity costs (recoveries) and asset impairment charges incurred by segment during the three months ended March 31, related to the restructuring activities described above (in thousands):

Three months ended March 31,

Exit activity costs (recoveries), net Asset impairment charges Total Exit activity costs Asset impairment charges Total

Renewables $ 1,328 $ 1,198 $ 2,526 $ 3,778 $ 1,193 $ 4,971

4 unchanged sentences

Total exit activity costs & asset impairments $ 1,279 $ 1,198 $ 2,477 $ 4,047 $ 1,193 $ 5,240

The following table provides a summary of where the exit activity costs and asset impairment charges were recorded in the consolidated statements of income for the three and nine months ended September 30, (in thousands):

The following table provides a summary of where the exit activity costs and asset impairment charges were recorded in the consolidated statements of income for the three months ended March 31, (in thousands):

Three Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

Cost of sales $ 2,208 $ 5,047

5 unchanged sentences

Cash payments ( 116 ) ( 1,464 )

Balance at September 30 $ 1,812 $ 646

Balance at March 31 $ 1,435 $ 3,613

(12) INCOME TAXES

The following table summarizes the provision for income taxes for continuing operations (in thousands) for the three and nine months ended September 30, and the applicable effective tax rates:

The following table summarizes the provision for income taxes for continuing operations (in thousands) for the three months ended March 31, and the applicable effective tax rates:

Three Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

Provision for income taxes $ 5,101 $ 1,560

Effective tax rate 24.8 % 12.9 %

The effective tax rate for the three and nine months ended September 30, 2021 and 2020, respectively, was greater than the U.S.

The effective tax rate for the three months ended March 31, 2022 was greater than the U.S.

federal statutory rate of 21 % due to state taxes and nondeductible permanent differences partially offset by favorable discrete items due to an excess tax benefit on stock-based compensation.

The effective tax rate for the three months ended March 31, 2021 was less than the U.S.

federal statutory rate of 21 % due to favorable discrete items due to an excess tax benefit on stock-based compensation, partially offset by state taxes and nondeductible permanent differences.

(13) EARNINGS PER SHARE

Earnings per share and the weighted average shares outstanding used in the calculating basic and diluted earnings per share are as follows for the three and nine months ended September 30, (in thousands):

Earnings per share and the weighted average shares outstanding used in calculating basic and diluted earnings per share are as follows for the three months ended March 31, (in thousands):

Three Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

Income from continuing operations $ 15,456 $ 10,496

(Loss) Income from discontinued operations ( 298 ) 2,426 1,544 7,418

Income from discontinued operations — 2,266

Net income available to common stockholders $ 15,456 $ 12,762

6 unchanged sentences

The weighted average number of diluted shares does not include potential anti-dilutive common shares issuable pursuant to equity based incentive compensation awards.

There were 30,000 and 9,000 shares issuable pursuant to equity based incentive compensation awards excluded from the diluted earnings calculation because the effect of their inclusion would be anti-dilutive for the three months ended September 30, 2021 and 2020, respectively.

There were no shares issuable pursuant to equity based incentive compensation awards excluded from the diluted earnings calculation for the nine months ended September 30, 2021 and 24,000 for the nine months ended September 30, 2020.

There were 54,000 shares issuable pursuant to equity based incentive compensation awards excluded from the diluted earnings per share calculation because the effect of their inclusion would be anti-dilutive for the three months ended March 31, 2022, and no shares issuable pursuant to equity based incentive compensation awards excluded from the diluted earnings calculation for the three months ended March 31, 2021.

(14) SEGMENT INFORMATION

5 unchanged sentences

When determining the reportable segments, the Company aggregated operating segments based on their similar economic and operating characteristics.

During the first quarter of 2021, the Company reassessed its reportable segments.

As a result, the Company's former Renewable Energy and Conservation segment was divided into two reportable segments:

Renewables and Agtech.

The following table illustrates certain measurements used by management to assess performance of the segments described above for the three and nine months ended September 30, (in thousands):

The following table illustrates certain measurements used by management to assess performance of the segments described above for the three months ended March 31, (in thousands):

Three Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

Renewables $ 78,783 $ 85,512

10 unchanged sentences

Total income from operations $ 21,195 $ 12,815

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Total assets:

4 unchanged sentences

Unallocated corporate assets 19,466 21,246

Assets of discontinued operations — 77,438

$ 1,242,340 $ 1,214,901

The following tables illustrate segment revenue disaggregated by timing of transfer of control to the customer for the three and nine months ended September 30 (in thousands):

Three Months Ended September 30, 2021

Renewables Residential Agtech Infrastructure Total

Point in Time $ 8,835 $ 170,280 $ 4,010 $ 8,194 $ 191,319

Over Time 121,327 1,265 44,965 10,477 178,034

Total net sales $ 130,162 $ 171,545 $ 48,975 $ 18,671 $ 369,353

Three Months Ended September 30, 2020

Renewables Residential Agtech Infrastructure Total

Point in Time $ 7,038 $ 150,608 $ 14,206 $ 6,378 $ 178,230

Over Time 63,208 1,110 43,806 10,438 118,562

Total net sales $ 70,246 $ 151,718 $ 58,012 $ 16,816 $ 296,792

Nine Months Ended September 30, 2021

The following tables illustrate segment revenue disaggregated by timing of transfer of control to the customer for the three months ended March 31 (in thousands):

Three Months Ended March 31, 2022

Renewables Residential Agtech Infrastructure Total

2 unchanged sentences

Total net sales $ 78,783 $ 179,485 $ 42,428 $ 17,169 $ 317,865

Nine Months Ended September 30, 2020

Three Months Ended March 31, 2021

Renewables Residential Agtech Infrastructure Total

2 unchanged sentences

Total net sales $ 85,512 $ 140,217 $ 46,739 $ 15,124 $ 287,592

(15) SUBSEQUENT EVENTS

In May 2022, the Company's Board of Directors authorized a share repurchase program of up to $ 200 million of the Company's issued and outstanding common stock.

The program has a duration of three years , ending May 2, 2025.

Repurchases may be made, from time to time, in amounts and at prices the Company deems appropriate, subject to market conditions, applicable legal requirements, debt covenants and other considerations.

Any such repurchases may be executed using open market purchases, privately negotiated agreements or other transactions.

The repurchase program may be suspended or discontinued at any time at the Company's discretion.

The Company has not made repurchases under the repurchase program to date.

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-Q

Item 1. Financial Statements