What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-05-03 compared with 2022-11-03 · 103 added, 313 removed, 297 unchanged (58% of the section changed)

4 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

Net sales $ 293,267 $ 317,865

4 unchanged sentences

Interest expense 1,491 485

Other expense (income) 363 72 797 ( 4,279 )

Other (income) expense ( 397 ) 153

Income before taxes 28,276 20,557

Provision for income taxes 7,177 5,101

Income from continuing operations 34,295 27,854 79,058 64,723

Discontinued operations:

(Loss) income before taxes — ( 201 ) — 1,867

Provision for income taxes — 97 — 323

(Loss) income from discontinued operations — ( 298 ) — 1,544

Net income $ 21,099 $ 15,456

Net earnings per share – Basic:

Income from continuing operations $ 1.08 $ 0.85 $ 2.44 $ 1.97

(Loss) income from discontinued operations — ( 0.01 ) — 0.05

Net income $ 1.08 $ 0.84 $ 2.44 $ 2.02

Weighted average shares outstanding – Basic 31,707 32,802 32,396 32,791

Net earnings per share – Diluted:

Income from continuing operations $ 1.08 $ 0.84 $ 2.43 $ 1.96

(Loss) income from discontinued operations — ( 0.01 ) — 0.05

Net income $ 1.08 $ 0.83 $ 2.43 $ 2.01

Weighted average shares outstanding – Diluted 31,812 33,050 32,503 33,055

Net earnings per share:

Basic $ 0.68 $ 0.47

Diluted $ 0.68 $ 0.47

Weighted average shares outstanding:

Basic 30,897 32,913

Diluted 31,024 33,022

See accompanying notes to consolidated financial statements.

3 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

Net income $ 21,099 $ 15,456

2 unchanged sentences

Minimum post retirement benefit plan adjustments, net of tax 8 24

Other comprehensive (loss) income ( 3,556 ) ( 1,030 ) ( 6,956 ) 2,983

Other comprehensive loss ( 107 ) ( 203 )

Total comprehensive income $ 20,992 $ 15,253

3 unchanged sentences

(in thousands, except per share data)

September 30,

2023 December 31,

15 unchanged sentences

Accounts payable $ 129,661 $ 106,582

Accrued expenses and other current liabilities 82,789 67,993

Accrued expenses 67,103 73,721

Billings in excess of cost 42,929 35,017

9 unchanged sentences

Common stock, $ 0.01 par value;

authorized 100,000 shares in 2022 and 2021;

34,034 shares and 33,799 shares issued and outstanding in 2022 and 2021

authorized 100,000 shares;

34,148 and 34,060 shares issued and outstanding in 2023 and 2022

Additional paid-in capital 324,466 322,873

Retained earnings 649,077 627,978

Accumulated other comprehensive (loss) income ( 6,769 ) 187

Treasury stock, at cost, 2,530 and 1,107 shares in 2022 and 2021

Accumulated other comprehensive loss ( 3,539 ) ( 3,432 )

Cost of 3,389 and 3,199 common shares held in treasury in 2023 and 2022

( 134,958 ) ( 125,660 )

5 unchanged sentences

(in thousands)

Nine Months Ended

September 30,

Three Months Ended

Cash Flows from Operating Activities

Net income $ 21,099 $ 15,456

Income from discontinued operations — 1,544

Income from continuing operations 79,058 64,723

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

1 unchanged sentence

Stock compensation expense 1,594 1,352

Exit activity costs, non-cash 1,427 1,193

Provision for (benefit of) deferred income taxes 181 ( 689 )

Exit activity (recoveries) costs, non-cash ( 63 ) 1,198

(Benefit of) provision for deferred income taxes ( 51 ) 17

Other, net 1,023 1,395

5 unchanged sentences

Accrued expenses and other non-current liabilities 1,586 9,761

Net cash provided by (used in) operating activities of continuing operations 38,561 ( 14,523 )

Net cash used in operating activities of discontinued operations — ( 2,002 )

Net cash provided by (used in) operating activities 38,045 ( 7,754 )

1 unchanged sentence

Acquisitions, net of cash acquired 554 —

Purchases of property, plant, and equipment ( 15,704 ) ( 13,251 )

Net proceeds from sale of business — 38,062

Net cash (used in) provided by investing activities of continuing operations ( 67,325 ) 28,954

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

Net cash (used in) provided by investing activities ( 67,325 ) 28,778

Purchases of property, plant, and equipment, net ( 2,190 ) ( 4,402 )

Net cash used in investing activities ( 1,636 ) ( 4,402 )

Cash Flows from Financing Activities

Proceeds from long-term debt 197,800 58,500

Long-term debt payments ( 50,000 ) ( 29,000 )

Proceeds from long-term debt 11,000 47,500

Purchase of common stock at market prices ( 7,509 ) ( 3,461 )

Net proceeds from issuance of common stock — 1,021

Net cash provided by (used in) financing activities 39,675 ( 30,276 )

Net cash (used in) provided by financing activities ( 46,509 ) 15,039

Effect of exchange rate changes on cash ( 11 ) ( 159 )

Net increase (decrease) in cash and cash equivalents 9,070 ( 18,120 )

Net (decrease) increase in cash and cash equivalents ( 10,111 ) 2,724

Cash and cash equivalents at beginning of year 17,608 12,849

5 unchanged sentences

Common Stock Additional

Paid-In Capital Retained Earnings Accumulated

Comprehensive Income (Loss) Treasury Stock Total

Stockholders’ Equity

Capital Retained

Earnings Accumulated

Comprehensive

(Loss) Income Treasury Stock Total

Stockholders’

Shares Amount Shares Amount

6 unchanged sentences

Net settlement of restricted stock units 88 1 ( 1 ) — — 36 ( 1,929 ) ( 1,929 )

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

Net income — — — 29,307 — — — 29,307

Foreign currency translation adjustment — — — — ( 3,198 ) — — ( 3,198 )

Minimum post retirement benefit plan adjustments, net of taxes of $ 0

— — — — 1 — — 1

Stock compensation expense — — 2,773 — — — — 2,773

Awards of common stock 16 — — — — — — —

Net settlement of restricted stock units 1 — — — — — ( 7 ) ( 7 )

Common stock repurchased under stock repurchase program — — — — — 154 ( 7,369 ) ( 7,369 )

Balance at June 30, 2022 33,989 $ 340 $ 318,664 $ 590,335 $ ( 3,213 ) 2,374 $ ( 88,848 ) $ 817,278

Net income — — — 34,295 — — — 34,295

Foreign currency translation adjustment — — — — ( 3,568 ) — — ( 3,568 )

Minimum post retirement benefit plan adjustments, net of taxes of $ 5

— — — — 12 — — 12

Stock compensation expense — — 1,764 — — — — 1,764

Awards of common shares

— — — — — — — —

Net settlement of restricted stock units

45 — — — — 18 ( 749 ) ( 749 )

Common stock repurchased under stock repurchase program — — — — — 138 ( 5,541 ) ( 5,541 )

Balance at September 30, 2022 34,034 $ 340 $ 320,428 $ 624,630 $ ( 6,769 ) 2,530 $ ( 95,138 ) $ 843,491

See accompanying notes to consolidated financial statements.

GIBRALTAR INDUSTRIES, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

(in thousands)

Common Stock Additional

Paid-In Capital Retained Earnings Accumulated

Comprehensive (Loss) Income Treasury Stock Total

Stockholders’ Equity

Shares Amount Shares Amount

Balance at March 31, 2023 34,148 $ 341 $ 324,466 $ 649,077 $ ( 3,539 ) 3,389 $ ( 134,958 ) $ 835,387

Balance at December 31, 2021 33,799 $ 338 $ 314,541 $ 545,572 $ 187 1,107 $ ( 35,380 ) $ 825,258

4 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 )

Total other comprehensive loss

— — — — — — — —

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.

8 unchanged sentences

for this and other reasons financial results for any interim period are not necessarily indicative of the results expected for any subsequent interim period or for the full year.

The accompanying unaudited consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in our annual report on Form 10-K for the year ended December 31, 2021.

The accompanying unaudited consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 2022.

The consolidated balance sheet at December 31, 2022 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by U.S.

1 unchanged sentence

(2) RECENT ACCOUNTING PRONOUNCEMENTS

Recent Accounting Pronouncements Not Yet Adopted

Standard Description Financial Statement Effect or Other Significant Matters

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.

The Company considers the applicability and impact of Accounting Standards Updates ("ASUs"), and ASUs effective in or after 2023, respectively, which were assessed and determined to be either not applicable, or had or are expected to have minimal impact on the Company's consolidated financial statements and related disclosures.

(3) ACCOUNTS RECEIVABLE, NET

Accounts receivable consists of the following (in thousands):

September 30, 2022 December 31, 2021

Accounts receivable consisted of the following (in thousands):

March 31, 2023 December 31, 2022

Trade accounts receivable $ 189,281 $ 179,170

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, 2022, 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, 2023, that is deducted from the amortized cost basis of accounts receivable to present the net amount expected to be collected (in thousands):

Beginning balance as of January 1, 2023 $ 3,746

1 unchanged sentence

Accounts written off against allowance and other adjustments 158

Ending balance as of September 30, 2022 $ 3,847

Ending balance as of March 31, 2023 $ 4,164

Sales includes revenue from contracts with customers for designing, engineering, manufacturing and installation of solar racking 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, 2022, 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, 2023, 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, 2022 and December 31, 2021 was $ 3.4 million and $ 3.7 million, respectively.

Revenue recognized during the nine months ended September 30, 2022 and 2021 that was in contract liabilities at the beginning of the respective periods was $ 41.2 million and $ 52.6 million, respectively.

Unearned revenue as of March 31, 2023 and December 31, 2022 was $ 7.8 million and $ 4.6 million, respectively.

Revenue recognized during the three months ended March 31, 2023 and 2022 that was in contract liabilities at the beginning of the respective periods was $ 18.7 million and $ 27.4 million, respectively.

(5) INVENTORIES

Inventories consist of the following (in thousands):

September 30, 2022 December 31, 2021

Inventories consisted of the following (in thousands):

March 31, 2023 December 31, 2022

Raw material $ 120,150 $ 111,187

7 unchanged sentences

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

The preliminary purchase consideration for the acquisition of QAP was $ 52.6 million, which includes a preliminary working capital adjustment and certain other adjustments provided for in the membership interest purchase agreement.

The purchase price for the 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 value of such assets and liabilities and to determine the amount of goodwill to be recognized as of the date of acquisition.

Due to the timing of the 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 was recorded as goodwill and approximated $ 3.5 million, all of which is deductible for tax purposes.

The purchase consideration for the acquisition of QAP was $ 52.1 million, which includes a working capital adjustment and certain other adjustments provided for in the membership interest purchase agreement.

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

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

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

The excess consideration was recorded as goodwill and approximated $ 4.0 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 building products markets.

The final purchase price allocation will be completed no later than the third quarter of fiscal year 2023.

The preliminary allocation of the 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):

The allocation of the 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 23,372

2 unchanged sentences

Other assets 1,813

Other liabilities ( 1,295 )

Goodwill 3,991

5 unchanged sentences

Total $ 14,700

In determining the preliminary allocation of the purchase price to the assets acquired and 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.

In determining the allocation of the purchase price to the assets acquired and 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 QAP was financed primarily through borrowings under the Company's revolving credit facility.

The Company incurred costs related to the acquisition of QAP that have been recognized in the consolidated statements of income.

Within cost of sales, the Company recognizes the amortization of the purchase price allocated to the step up of inventory to fair value.

Legal and consulting fees incurred as a result of the acquisition were recognized as a component of selling, general, and administrative expenses.

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,

2022 2021 2022 2021

Cost of sales $ 476 $ — $ 476 $ —

Selling, general and administrative costs 522 53 529 946

Total acquisition related costs $ 998 $ 53 $ 1,005 $ 946

The Company recognized costs related to recent acquisitions comprised of legal and consulting fees within selling, general, and administrative ("SG&A") expenses of $ 21.0 thousand and $ 7.0 thousand for the three months ended March 31, 2023 and 2022, respectively.

(7) GOODWILL AND RELATED INTANGIBLE ASSETS

The changes in the carrying amount of goodwill for the nine months ended September 30, 2022 are as follows (in thousands):

The changes in the carrying amount of goodwill for the three months ended March 31, 2023 are as follows (in thousands):

Renewables Residential Agtech Infrastructure Total

Balance at December 31, 2022 $ 188,030 $ 209,056 $ 83,599 $ 31,678 $ 512,363

Acquired goodwill — 3,476 — — 3,476

Adjustments to prior year acquisitions — 387 — — 387

Foreign currency translation ( 141 ) — 30 — ( 111 )

Balance at September 30, 2022 $ 187,039 $ 208,928 $ 83,221 $ 31,678 $ 510,866

Balance at March 31, 2023 $ 187,889 $ 209,443 $ 83,629 $ 31,678 $ 512,639

Goodwill is recognized net of accumulated impairment losses of $ 133.2 million as of March 31, 2023 and December 31, 2022, respectively.

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

The Company determined that no triggering event had occurred as of September 30, 2022 which would require an interim impairment test to be performed.

The Company determined that no triggering event had occurred as of March 31, 2023 which would require an interim impairment test to be performed.

Acquired Intangible Assets

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

September 30, 2022 December 31, 2021

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

March 31, 2023 December 31, 2022

Amount Accumulated

8 unchanged sentences

Non-compete agreements 2,371 2,042 2,371 2,006

Backlog 6,852 6,852 7,200 7,200

157,012 77,777 157,107 75,081

Total acquired intangible assets $ 212,512 $ 77,777 $ 212,607 $ 75,081

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

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

Amortization expense $ 2,766 $ 3,098

3 unchanged sentences

(8) LONG-TERM DEBT

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

September 30, 2022 December 31, 2021

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

March 31, 2023 December 31, 2022

Revolving credit facility $ 52,000 $ 91,000

1 unchanged sentence

Total debt $ 49,876 $ 88,762

Senior Credit Agreement

On January 24, 2019, the Company entered into a Sixth Amended and Restated Credit Agreement ("Senior Credit Agreement"), which amended and restated the Company’s Fifth Amended and Restated Credit Agreement dated December 9, 2015, and provides for a revolving credit facility and letters of credit in an aggregate amount equal to $ 400 million.

The Company can request additional financing from the lenders to increase the revolving credit facility to $ 700 million or enter into a term loan of up to $ 300 million subject to conditions set forth in the Senior Credit Agreement.

The Senior Credit Agreement contains three financial covenants.

As of September 30, 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 %.

In addition, the revolving credit facility is subject to an undrawn commitment fee ranging between 0.15 % and 0.25 % based on the Total Leverage Ratio (as defined in the Senior Credit Agreement) and the daily average undrawn balance.

The Senior Credit Agreement terminates on January 23, 2024.

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.

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 $ 4.5 million have been issued under the Senior Credit Agreement on behalf of the Company as of September 30, 2022.

Revolving Credit Facility

On December 8, 2022, the Company entered into a Credit Agreement (the "Credit Agreement"), and concurrently with entering into the Credit Agreement, the Company paid off all amounts owed under the Sixth Amended and Restated Credit Agreement dated as of January 24, 2019.

The Credit Agreement provides for a revolving credit facility and letters of credit in an aggregate amount equal to $ 400 million.

The Company can request additional financing to increase the revolving credit facility to $ 700 million or enter into a term loan of up to $ 300 million subject to conditions set forth in the Credit Agreement.

The Credit Agreement contains two financial covenants.

As of March 31, 2023, the Company was in compliance with all financial covenants.

The Credit Agreement terminates on December 8, 2027.

Borrowings under the Credit Agreement bear interest, at the Company’s option, at a rate equal to the applicable margin plus (a) a base rate, (b) a daily simple secured overnight financing rate ("SOFR") rate, (c) a term SOFR rate or (d) for certain foreign currencies, a foreign currency rate, in each case subject to a 0% floor.

Through March 31, 2023, the Credit Agreement had an initial applicable margin of 0.125 % for base rate loans and 1.125 % for SOFR and alternative currency loans.

Thereafter, the applicable margin ranges from 0.125 % to 1.00 % for base rate loans and from 1.125 % to 2.00 % for SOFR and alternative currency loans based on the Company’s Total Net Leverage Ratio, as defined in the Credit Agreement.

In addition, the Credit Agreement is subject to an annual commitment fee, payable quarterly, which is initially 0.20 % of the daily average undrawn balance of the revolving credit facility and, from and after April 1, 2023, ranges between 0.20 % and 0.25 % of the daily average undrawn balance of the revolving credit facility based on the Company’s Total Net Leverage Ratio.

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

Capital distributions are subject to certain Total Net Leverage Ratio requirements and capped by an annual aggregate limit under the Credit Agreement.

For the three months ended March 31, 2022, interest rates on the revolving credit facility under the Sixth Amended and Restated Credit Agreement were based on LIBOR plus an additional margin that ranges from 1.125 % to 2.00 %.

In addition, the revolving credit facility under the Sixth Amended and Restated Credit Agreement was subject to an undrawn commitment fee ranging between 0.15 % and 0.25 % based on the Total Leverage Ratio and the daily average undrawn balance.

Standby letters of credit of $ 4.3 million have been issued under the Credit Agreement to third parties on behalf of the Company as of March 31, 2023.

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

The Company had $ 273.2 million and $ 369.3 million of availability under the revolving credit facility at September 30, 2022 and December 31, 2021, respectively.

The Company had $ 343.7 million and $ 304.5 million of availability under the revolving credit facility as of March 31, 2023 and December 31, 2022, respectively.

(9) 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 (loss) income, 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

Income (Loss)

(Loss) Income

Balance at December 31, 2022 $ ( 3,382 ) $ ( 395 ) $ ( 3,777 ) $ ( 345 ) $ ( 3,432 )

2 unchanged sentences

Balance at March 31, 2023 $ ( 3,497 ) $ ( 384 ) $ ( 3,881 ) $ ( 342 ) $ ( 3,539 )

Minimum post retirement health care plan adjustments — 1 1 — 1

Foreign currency translation adjustment ( 3,198 ) — ( 3,198 ) — ( 3,198 )

Balance at June 30, 2022 ( 1,785 ) ( 2,212 ) ( 3,997 ) 784 ( 3,213 )

Minimum post retirement health care plan adjustments — 17 17 ( 5 ) 12

Foreign currency translation adjustment ( 3,568 ) — ( 3,568 ) — ( 3,568 )

Balance at September 30, 2022 $ ( 5,353 ) $ ( 2,195 ) $ ( 7,548 ) $ 779 $ ( 6,769 )

Foreign Currency Translation Adjustment Minimum Post Retirement Benefit Plan

Adjustments Total Pre-Tax Amount Tax Benefit (Expense) Accumulated Other

Comprehensive

(Loss) Income

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

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.

8 unchanged sentences

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 46,646 $ 53.44 58,958 $ 47.00

Deferred stock units 2,460 $ 42.69 7,536 $ 83.58

Common shares 15,652 $ 42.49 2,512 $ 83.58

(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.

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

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 the Company’s return on invested capital (“ROIC”) over a one-year performance period.

(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.

(2) PSUs granted in the first quarter of 2022 includes 5,653 units that were forfeited in the first quarter of 2023 and 62,201 units that will be converted to shares and issued to recipients in the first quarter of 2025 at 60.5 % of the target amount granted, based on the Company's actual ROIC compared to ROIC target for the performance period ended December 31, 2022.

Equity Based Awards - Settled in Cash

5 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.

Total MSPP liabilities recorded on the consolidated balance sheet as of September 30, 2022 was $ 16.2 million, of which $ 2.8 million was included in current accrued expenses and $ 13.4 million was included in non-current liabilities.

Total MSPP liabilities recorded on the consolidated balance sheet as of March 31, 2023 was $ 15.9 million, of which $ 2.0 million was included in current accrued expenses and $ 13.9 million was included in non-current liabilities.

Total MSPP liabilities recorded on the consolidated balance sheet as of December 31, 2022 was $ 15.4 million, of which $ 2.3 million was included in current accrued expenses and $ 13.1 million was included in non-current liabilities.

The value of the restricted stock units within the MSPP liabillity were $ 14.2 million and $ 20.7 million at September 30, 2022 and December 31, 2021, respectively.

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,:

The value of the restricted stock units within the MSPP liability were $ 13.7 million and $ 13.4 million at March 31, 2023 and December 31, 2022, respectively.

The following table provides the number of restricted stock units credited to active participant accounts and the payments made with respect to MSPP liabilities during the three months ended March 31,:

Restricted stock units credited 41,743 2,876

Share-based liabilities paid (in thousands) $ 2,961 $ 4,022

(11) 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 September 30, 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) September 30, 2022

Assets held for sale

Accounts receivable, net of allowance $ 89

Inventories, net of reserves 8,498

Other current assets 1,609

Property, plant, and equipment, net 331

Operating lease asset 603

Acquired intangibles, net 6,213

Total assets held for sale $ 17,343

Liabilities held for sale

Accounts payable $ 803

Accrued expenses 74

Non-current operating lease liabilities 165

Total liabilities held for sale $ 1,042

(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 and nine months ended September 30 are as follows (in thousands):

Three months ended

September 30, Nine months ended

September 30,

2022 2021 2022 2021

Net sales $ 2,326 $ 3,825 $ 6,897 $ 16,062

Operating loss $ ( 481 ) $ ( 1,387 ) $ ( 4,115 ) $ ( 2,689 )

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 nine months ended September 30, 2022.

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

Discontinued Operations

On February 23, 2021, the Company sold the stock of its Industrial business which had been classified as held for sale and reported as a discontinued operation in the Company’s consolidated financial statements for the year ended December 31, 2021.

Net proceeds of $ 38 million, consisting of cash and a $ 13 million seller note, resulted in an estimated pre-tax loss of $ 30 million, subject to working capital and other adjustments, of which $ 29.6 million was recorded when the assets of the Industrial business were written down to fair market value during the fourth quarter of 2020.

The seller note was paid in full to the Company during the second quarter of 2021.

The results of operations and financial position of the Industrial business have been presented as a discontinued operation in the Company's consolidated financial statements for all periods presented.

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.

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):

Three months ended

September 30, Nine months ended

September 30,

2022 2021 2022 2021

Net sales $ — $ — $ — $ 20,391

Operating expenses — — — 17,493

Adjustment to loss on disposal — 201 — 1,031

(Loss) Income from discontinued operations before taxes $ — $ ( 201 ) $ — $ 1,867

MSPP liabilities paid (in thousands) $ 2,147 $ 2,545

(11) EXIT ACTIVITY COSTS AND ASSET IMPAIRMENTS

The Company has incurred exit activity costs and asset impairment charges as a result of its 80/20 simplification and portfolio management initiatives.

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 (recoveries) were incurred during the nine months ended September 30, 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 exited a facility, relocating to a new one, and separately, closed one other facility during the nine months ended September 30, 2022.

During the nine months ended September 30, 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 and nine months ended September 30, related to the restructuring activities described above (in thousands):

Three months ended September 30,

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

Renewables $ ( 44 ) $ — $ ( 44 ) $ 131 $ — $ 131

Residential — 12 12 83 — 83

Agtech 15 217 232 293 — 293

Infrastructure — — — — — —

Corporate 11 — 11 37 — 37

Total exit activity (recoveries) costs

& asset impairments $ ( 18 ) $ 229 $ 211 $ 544 $ — $ 544

Nine months ended September 30,

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

Exit activity costs (recoveries) were incurred during the three months ended March 31, 2023 and 2022 which related to moving and closing costs, and severance, along with asset impairment charges (recoveries) related to the write-down of inventory associated with discontinued product lines, as a result of process simplification initiatives.

In conjunction with these initiatives, the Company recorded costs during the three months ended March 31, 2023 associated with the final closure and sale of a facility closed during the fourth quarter of 2022.

During the three months ended March 31, 2022, the Company closed one facility as a result of these initiatives.

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

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

Renewables $ — $ ( 63 ) $ ( 63 ) $ 1,328 $ 1,198 $ 2,526

3 unchanged sentences

Corporate — — — 20 — 20

Total exit activity costs & asset impairments $ 2,790 $ 1,427 $ 4,217 $ 6,752 $ 1,193 $ 7,945

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):

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

Total $ 675 $ ( 63 ) $ 612 $ 1,279 $ 1,198 $ 2,477

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):

Cost of sales $ 513 $ 2,208

5 unchanged sentences

Cash payments ( 1,321 ) ( 116 )

Balance at September 30 $ 280 $ 1,812

Balance at March 31 $ 1,771 $ 1,435

(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:

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

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:

Provision for income taxes $ 7,177 $ 5,101

Effective tax rate 25.4 % 24.8 %

The effective tax rate for the three months ended September 30, 2022 and 2021, respectively, was greater than the U.S.

federal statutory rate of 21 % due to state taxes and nondeductible permanent differences.

Furthermore, the three months ended September 30, 2021 period was partially offset by favorable discrete items due to an excess tax benefit on stock-based compensation.

The effective tax rate for the nine months ended September 30, 2022 and 2021, respectively, 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, 2023 and 2022, respectively, 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.

(13) EARNINGS PER SHARE

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

Income from continuing operations $ 34,295 $ 27,854 $ 79,058 $ 64,723

(Loss) income from discontinued operations — ( 298 ) — 1,544

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):

Net income available to common stockholders $ 21,099 $ 15,456

3 unchanged sentences

Weighted average shares outstanding 30,897 32,913

Common stock options and stock units 105 248 107 264

Common stock units 127 109

Weighted average shares and conversions 31,024 33,022

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

The following table provides the potential anti-dilutive common stock options and stock units for the three and nine months ended September 30, (in thousands):

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

Common stock options and stock units 51 30 48 —

The following table provides the potential anti-dilutive common stock units for the three months ended March 31, (in thousands):

Common stock units 64 54

(14) SEGMENT INFORMATION

2 unchanged sentences

(ii) Residential, which primarily includes roof and foundation ventilation products, centralized mail systems and electronic package solutions, retractable awnings and gutter guards, and rain dispersion products, trims and flashings and other accessories;

(iii) Agtech, which provides growing and processing solutions including the designing, engineering, manufacturing and installation of greenhouses;

(iii) Agtech, which provides growing solutions including the designing, engineering, manufacturing and installation of greenhouses;

(iv) Infrastructure, which primarily includes structural bearings, expansion joints and pavement sealant for bridges, airport runways and roadways, elastomeric concrete, and bridge cable protection systems.

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

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):

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

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):

Renewables $ 59,205 $ 78,783

10 unchanged sentences

Total income from operations $ 29,370 $ 21,195

September 30,

2023 December 31,

6 unchanged sentences

$ 1,208,492 $ 1,210,613

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, 2022

Renewables Residential Agtech Infrastructure Total

Point in Time $ 7,660 $ 214,175 $ 3,510 $ 9,938 $ 235,283

Over Time 103,459 1,417 40,707 10,425 156,008

Total net sales $ 111,119 $ 215,592 $ 44,217 $ 20,363 $ 391,291

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

Nine Months Ended September 30, 2022

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, 2023

Renewables Residential Agtech Infrastructure Total

2 unchanged sentences

Total net sales $ 59,205 $ 179,495 $ 35,852 $ 18,715 $ 293,267

Nine Months Ended September 30, 2021

Three Months Ended March 31, 2022

Renewables Residential Agtech Infrastructure Total

3 unchanged sentences

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