What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-02-21 compared with 2023-02-22 · 182 added, 310 removed, 841 unchanged (37% of the section changed)

2 unchanged sentences

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Statements of Operations for the Years Ended December 31, 202 2 , 202 1 , and 20 20

Consolidated Statements of Income for the Years Ended December 31, 202 3 , 202 2 , and 202 1

Consolidated Statements of Comprehensive Income for the Years Ended December 31, 202 3 , 202 2 , and 202 1

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Summary of Significant Accounting Policies

Accounts Receivabl e, Net

Property, Plant and Equipment

Accounts Receivable, Net

Inventorie s, N et

Property, Plant , and Equipmen t, N e t

Goodwill and Related Intangible Assets

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Pension and Other Postretirement Benefits

Accumulated Other Comprehensive Income (Loss)

Accumulated Other Comprehensive ( L oss) Income

Equity-Based Compensation

Fair Value Measurements

Held for Sale and Discontinued Operations

Discontinued Operations

Exit Activity Costs and Asset Impairments

2 unchanged sentences

Segment Information

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Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors of Gibraltar Industries, Inc.

To the Stockholders and the Board of Directors of Gibraltar Industries, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Gibraltar Industries, Inc.

(the Company) as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive income, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2022, and the related notes (collectively referred to as the “consolidated financial statements”).

(the Company) as of December 31, 2023 and 2022, the related consolidated statements of income, comprehensive income, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with U.S.

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The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

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Revenue Recognition on Contracts

Description of the Matter During the year ended December 31, 2023, the amount of revenue recognized over time was $484 million.

As discussed in Note 1 to the consolidated financial statements, the Company’s revenue on contracts is accounted for based on the cost-to-cost input measure of progress, whereby the extent of progress toward completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation.

As discussed in Note 1 to the consolidated financial statements, for contracts with customers with respect to which the Company satisfies a performance obligation over time, the Company recognizes revenue based on the extent of progress towards completion of the performance obligation using the cost-to-cost measure of progress.

Auditing management’s estimates to complete for certain components is especially subjective due to significant judgment required in estimating the remaining costs to complete.

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February 21, 2024

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GIBRALTAR INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)

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Interest expense, net 3,002 4,047 1,639

Other expense (income) 14,565 ( 4,213 ) ( 1,272 )

Other (income) expense ( 1,265 ) 14,565 ( 4,213 )

Income before taxes 148,992 111,490 99,562

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Discontinued operations:

Income (loss) before taxes — 1,479 ( 16,602 )

Income before taxes — — 1,479

Provision for income taxes — — 366

Income (loss) from discontinued operations — 1,113 ( 18,725 )

Income from discontinued operations — — 1,113

Net income $ 110,533 $ 82,406 $ 75,629

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Income from continuing operations $ 3.61 $ 2.57 $ 2.27

Income (loss) from discontinued operations — 0.03 ( 0.57 )

Income from discontinued operations — — 0.03

Net income $ 3.61 $ 2.57 $ 2.30

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Income from continuing operations $ 3.59 $ 2.56 $ 2.25

Income (loss) from discontinued operations — 0.04 ( 0.57 )

Income from discontinued operations — — 0.04

Net income $ 3.59 $ 2.56 $ 2.29

1 unchanged sentence

See accompanying notes to consolidated financial statements.

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GIBRALTAR INDUSTRIES, INC.

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Net income $ 110,533 $ 82,406 $ 75,629

Other comprehensive (loss) income:

Other comprehensive income (loss):

Foreign currency translation adjustment 1,204 ( 5,022 ) 2,512

Adjustment to post-retirement benefit liability, net of tax 1,403 136 ( 371 )

Other comprehensive (loss) income ( 3,619 ) 2,648 2,930

Adjustment to postretirement benefit liability, net of tax 114 1,403 136

Other comprehensive income (loss) 1,318 ( 3,619 ) 2,648

Total comprehensive income $ 111,851 $ 78,787 $ 78,277

See accompanying notes to consolidated financial statements.

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GIBRALTAR INDUSTRIES, INC.

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Accrued expenses 88,719 73,721

Billings in excess of cost 35,017 46,711

Billings in excess of costs 44,735 35,017

Total current liabilities 225,578 215,320

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Retained earnings 738,511 627,978

Accumulated other comprehensive (loss) income ( 3,432 ) 187

Accumulated other comprehensive loss ( 2,114 ) ( 3,432 )

Cost of 3,778 and 3,199 common shares held in treasury in 2023 and 2022

3 unchanged sentences

See accompanying notes to consolidated financial statements.

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GIBRALTAR INDUSTRIES, INC.

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Net income $ 110,533 $ 82,406 $ 75,629

Income (loss) from discontinued operations — 1,113 ( 18,725 )

Income from discontinued operations — — 1,113

Income from continuing operations 110,533 82,406 74,516

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Intangible asset impairment 3,797 — 8,300

Held for sale valuation allowance 13,990 — —

Stock compensation expense 9,750 8,334 8,652

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Other, net 12,492 1,506 1,570

Changes in operating assets and liabilities (excluding the effects of acquisitions):

Changes in operating assets and liabilities net of effects from acquisitions:

Accounts receivable ( 15,375 ) 32,754 ( 41,887 )

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Net cash provided by operating activities of continuing operations 218,476 102,691 25,072

Net cash (used in) provided by operating activities of discontinued operations — ( 2,002 ) 16,088

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

Net cash provided by operating activities 218,476 102,691 23,070

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Net proceeds from issuance of common stock — — 1,021

Net cash (used in) provided by financing activities ( 25,007 ) ( 66,612 ) 79,463

Net cash used in financing activities ( 120,329 ) ( 25,007 ) ( 66,612 )

Effect of exchange rate changes on cash ( 607 ) ( 1,242 ) ( 201 )

3 unchanged sentences

See accompanying notes to consolidated financial statements.

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GIBRALTAR INDUSTRIES, INC.

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Foreign currency translation adjustment — — — — 2,512 — — 2,512

Minimum post retirement benefit plan adjustments, net of taxes of $ 116

Postretirement benefit plan adjustments, net of taxes of $ 43

— — — — 136 — — 136

Stock compensation expense — — 8,652 — — — — 8,652

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

Net settlement of restricted stock units 192 2 ( 2 ) — — 79 ( 6,497 ) ( 6,497 )

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Foreign currency translation adjustment — — — — ( 5,022 ) — — ( 5,022 )

Minimum post retirement benefit plan adjustments, net of taxes of $ 43

Postretirement benefit plan adjustments, net of taxes of $ 449

— — — — 1,403 — — 1,403

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

Stock options exercised 36 — 1,021 — — — — 1,021

Common stock repurchased under stock repurchase program — — — — — 1,997 ( 85,876 ) ( 85,876 )

Balance at December 31, 2022 34,060 $ 340 $ 322,873 $ 627,978 $ ( 3,432 ) 3,199 $ ( 125,660 ) $ 822,099

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Foreign currency translation adjustment — — — — 1,204 — — 1,204

Minimum post retirement benefit plan adjustments, net of taxes of $ 449

Postretirement benefit plan adjustments, net of taxes of $ 36

— — — — 114 — — 114

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Awards of common stock 8 — — — — — — —

Excise tax on repurchase of common shares — — — — — — ( 159 ) ( 159 )

Common stock repurchased under stock repurchase program — — — — — 521 ( 25,181 ) ( 25,181 )

1 unchanged sentence

See accompanying notes to consolidated financial statements.

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GIBRALTAR INDUSTRIES, INC.

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Renewables, Residential, Agtech and Infrastructure.

In 2021, the Company's former Renewable Energy and Conservation segment was divided into two segments, Renewables and Agtech.

For further disclosure regarding the Company's reportable segments, refer to Note 20 "Segment Information."

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Costs to fulfill a contract include all direct costs related to contract performance.

Selling and administrative expenses are

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charged to operations as incurred.

Selling and administrative expenses are charged to operations as incurred.

Provision for loss on an uncompleted performance obligation is recognized in the period in which such loss is determined.

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These estimates are based on assessment of anticipated payment and all other historical, current and future information that is reasonably available.

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The following table summarizes activity recorded within the allowance for doubtful accounts and contract assets balances for the years ended December 31 (in thousands):

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Beginning balance $ 3,746 $ 3,738 $ 3,529

Adoption of ASU 2016-13, cumulative-effect adjustment to retained earnings at January 1, 2020 — — 385

Bad debt expense, net of recoveries 3,148 1,221 898

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The home improvement retailer purchases from the Residential segment.

Accounts receivable as a percentage of consolidated accounts receivable from the home improvement retailer was 14 % as of December 31, 2022 and 2021.

Accounts receivable as a percentage of consolidated accounts receivable from the home improvement retailer was 13 % and 14 % as of December 31, 2023 and 2022, respectively.

Net sales to the home improvement retailer as a percentage of consolidated net sales were 13 %, 14 %, and 13 % during the years ended December 31, 2023, 2022 and 2021, respectively.

Inventories are valued at the lower of cost, determined using the first-in, first-out method, or net realizable value.

Inventories are valued at the lower of cost or net realizable value.

Cost is determined using either the first-in, first-out method or the average costing method.

Shipping and handling costs are recognized as a component of cost of sales.

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The quantitative impairment test consists of comparing the fair value of a reporting unit, determined using two valuation techniques, to its carrying value.

If the carrying value of the reporting unit exceeds its fair value, goodwill is

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considered impaired, and a loss measured by the excess of the carrying value of the reporting unit over the fair value of the reporting unit must be recorded.

If the carrying value of the reporting unit exceeds its fair value, goodwill is considered impaired, and a loss measured by the excess of the carrying value of the reporting unit over the fair value of the reporting unit must be recorded.

The Company also tests its indefinite-lived intangible assets for impairment on an annual basis as of October 31, or more frequently if an event occurs, or circumstances change, that indicate that the fair value of an indefinite-lived intangible asset could be below its carrying value.

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Acquired identifiable intangible assets are recorded at cost.

Identifiable intangible assets with finite useful lives are amortized over their estimated useful lives.

Identifiable intangible assets with finite useful lives are

amortized over their estimated useful lives.

For additional disclosure of the Company's goodwill and other intangible assets refer to Note 7 "Goodwill and Related Intangible Assets."

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Otherwise, the Company uses undiscounted cash flows to determine whether impairment exists and measures any impairment loss by approximating fair value using acceptable valuation techniques, including discounted cash flow models and third-party appraisals.

For additional disclosure on impairment of the Company's long-lived assets refer to Note 7 "Goodwill and Related Intangible Assets," Note 14 "Held for Sale and Discontinued Operations" and Note 15 "Exit Activity Costs and Asset Impairments."

For additional disclosure on impairment of the Company's long-lived assets refer to Note 7 "Goodwill and Related Intangible Assets," Note 14 "Discontinued Operations" and Note 15 "Exit Activity Costs and Asset Impairments."

The Company determines if an agreement is, or contains, a lease at the inception of the agreement.

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Operating lease cost is included in income from operations and includes short-term leases and variable lease costs which are immaterial.

Current operating lease liabilities are represented within accrued expenses on the Company's consolidated balance sheets.

Deferred charges

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The Company records a valuation allowance to reduce deferred tax assets when uncertainty exists regarding their realization.

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Equity-based compensation

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Equity-based compensation expense is included as a component of selling, general, and administrative expenses.

Earnings per share

Basic earnings per share is calculated by dividing net income by the weighted average number of common shares outstanding during the period.

Diluted earnings per share is calculated by adjusting the weighted average number of common shares outstanding, as well as dilutive common shares which include shares issuable pursuant to equity based incentive compensation awards under the equity compensation plans described in Note 12 "Equity-Based Compensation."

Recent accounting pronouncements

The Company considers the applicability and impact of ASUs, and ASUs effective in or after 2022, respectively, 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.

Recent Accounting Pronouncements Not Yet Adopted

Standard Description Financial Statement Effect or Other Significant Matters

Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") No.

2023-07, which requires a public entity to disclose significant segment expenses and other segment items on an annual and interim basis and provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually.

Additionally, it requires a public entity to disclose the title and position of the Chief Operating Decision Maker ("CODM").

The ASU does not change how a public entity identifies its operating segments, aggregates them, or applies the quantitative thresholds to determine its reportable segments.

The amendments in the ASU are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

A public entity should apply the amendments in this ASU retrospectively to all prior periods presented in the financial statements.

The Company expects this ASU to only impact its disclosures with no impacts to the Company's results of operations, cash flows and financial condition.

The Company's planned date of adoption is January 1, 2024.

Income Taxes (Topic 740):

Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU No.

2023-09, which focuses on the rate reconciliation and income taxes paid.

This ASU requires a public business entity ("PBE") to disclose, on an annual basis, a tabular rate reconciliation using both percentages and currency amounts, broken out into specified categories with certain reconciling items further broken out by nature and jurisdiction to the extent those items exceed a specified threshold.

In addition, all entities are required to disclose income taxes paid, net of refunds received disaggregated by federal, state/local, and foreign and by jurisdiction if the amount is at least 5% of total income tax payments, net of refunds received.

For PBEs, the amendments in this ASU are effective for annual periods beginning after December 15, 2024, with early adoption permitted.

An entity may apply the amendments in this ASU prospectively by providing the revised disclosures for the period ending December 31, 2025 and continuing to provide the pre-ASU disclosures for the prior periods, or may apply the amendments retrospectively by providing the revised disclosures for all period presented.

The Company expects this ASU to only impact the Company's disclosures with no impacts to the Company's results of operations, cash flows, and financial condition.

The Company's planned date of adoption is January 1, 2025.

The Company determined that all other ASUs effective in or after 2023 that are not listed above are either not applicable or will not have a material impact on the Company's consolidated financial statements and related disclosures.

(2) ACCOUNTS RECEIVABLE, NET

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centralized mail systems and electronic package solutions;

retractable awnings;

gutter guards;

rain dispersion products;

trims and flashings and other accessories;

retractable awnings;

gutter guards;

designing, engineering, manufacturing and installation of greenhouses;

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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.

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

The following table presents the ending and beginning balances of costs in excess of billings, billings in excess of cost and unearned revenue, respectively, as of December 31 (in thousands):

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Costs in excess of billings $ 52,035 $ 41,732 $ 54,437

Billings in excess of cost ( 35,017 ) ( 46,711 ) ( 34,702 )

Billings in excess of costs ( 44,735 ) ( 35,017 ) ( 46,711 )

Unearned revenue ( 3,941 ) ( 4,572 ) ( 3,681 )

Revenue recognized during the years ended December 31, 2023, 2022, and 2021 that was in contract liabilities at the beginning of the respective periods was $ 35.5 million, $ 44.4 million, and $ 53.0 million, respectively.

The decreases in costs in excess of billings and billings in excess of cost as of December 31, 2022 compared to December 31, 2021, respectively, were primarily due to decline in volume in the Renewables and Agtech segments in 2022 compared to 2021.

The increase in costs in excess of billings as of December 31, 2021 compared to December 31, 2020 was primarily due to the timing of the Company's right to invoice customers for performance satisfied by the Company for significant contracts in the Renewables and Agtech segments near the end of 2021.

(4) INVENTORIES

The increase in costs in excess of billings as of December 31, 2023 compared to December 31, 2022 was primarily due to the timing of the Company’s right to invoice customers for performance satisfied near the end of 2023.

The increase in billings in excess of costs as of December 31, 2023 compared to December 31, 2022 was primarily due to timing and an increase in number of contracts under which the Company has billed customers in advance of the satisfaction of performance obligations in the Renewables segment near the end of 2023.

The decreases in costs

in excess of billings and billings in excess of costs as of December 31, 2022 compared to December 31, 2021, respectively, were primarily due to decline in volume in the Renewables and Agtech segments in 2022 compared to 2021.

(4) INVENTORIES, NET

Inventories at December 31 consisted of the following (in thousands):

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Ending balance $ 9,378 $ 6,179 $ 4,400

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(5) PROPERTY, PLANT, AND EQUIPMENT

(5) PROPERTY, PLANT, AND EQUIPMENT, NET

Components of property, plant, and equipment at December 31 consisted of the following (in thousands):

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(6) ACQUISITIONS

2022 Acquisitions

On August 22, 2022, the Company purchased all the issued and outstanding membership interests of Quality Aluminum Products ("QAP"), a manufacturer of aluminum and steel products including soffit, fascia, trim coil, rain carrying products and aluminum siding.

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 $ 52.1 million, which includes a preliminary working capital adjustment and certain other adjustments provided for in the membership interest purchase agreement.

2023 Acquisition

On July 5, 2023, the Company acquired the assets of a privately held Utah-based company that manufactures and distributes roof flashing and accessory products, and sells direct to roofing wholesalers.

The results of this acquisition 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 this acquisition was $ 10.4 million, which includes a preliminary working capital adjustment and certain other adjustments provided for in the asset 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.

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Fair value of purchase consideration $ 10,417

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The intangible assets acquired in this acquisition consisted of the following as of the date of acquisition (in thousands):

Fair Value Weighted-Average Amortization Period

Trademarks $ 2,800 Indefinite

Customer relationships 11,900 12 years

Total $ 14,700

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 the Company's Renewables segment, two in the Company's Agtech segment, and one in the Company's 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 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 assets acquired and liabilities assumed to establish fair values of the assets acquired and liabilities assumed 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 was completed within a measurement period of up to one year from the date of acquisition.

The excess consideration was recorded as goodwill and approximated $ 141.0 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 solar energy market.

The 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 5,569

Property, plant, and equipment 11,446

Acquired intangible assets 64,150

Other assets 1,854

Other liabilities ( 1,640 )

Goodwill 140,997

Fair value of purchase consideration $ 223,867

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

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

Fair Value Weighted-Average Amortization Period

Trademarks $ 20,830 Indefinite

Technology 1,940 12 years

Trademarks $ 300 2 years

Customer relationships 4,900 12 years

Backlog 6,270 Less than 1 year

Total $ 5,200

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 Gibraltar'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, a California limited liability company, and Teaching Tech, LLC, a California limited liability company (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.

2022 Acquisition

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 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 excess consideration was recorded as goodwill and approximated $ 4.0 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.

The excess consideration recorded as goodwill approximated $ 19.1 million, all of which is deductible for tax purposes.

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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):

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

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Acquired intangible assets 14,700

Other current assets 1,528

Other assets 1,813

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Fair value of purchase consideration $ 52,085

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

The intangible assets acquired in this acquisition consisted of the following as of the date of acquisition (in thousands):

Fair Value Weighted-Average Amortization Period

Trademarks $ 2,800 Indefinite

Trademarks 1,177 3 years

Technology 8,345 5 - 15 years

Customer relationships 11,900 12 years

Non-compete agreements 1,036 5 years

Backlog 928 Less than 1 year

Total $ 14,700

The acquisition of QAP was financed primarily through borrowings under the Company's revolving credit facility.

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 cash on hand.

The acquisition of the privately held Utah-based company and the acquisition of QAP were financed primarily through borrowings under the Company's revolving credit facility.

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 statements of operations.

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

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

The acquisition-related costs consisted of the following for the years ended December 31 (in thousands):

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Total acquisition related costs $ 265 $ 1,972 $ 949

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(7) GOODWILL AND RELATED INTANGIBLE ASSETS

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

Adjustments to prior year acquisitions ( 2,433 ) — 323 — ( 2,110 )

Acquired goodwill — 3,604 — — 3,604

Adjustment to prior year acquisition 904 — — — 904

Foreign currency translation ( 1,554 ) — ( 1,533 ) — ( 3,087 )

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Foreign currency translation ( 1,132 ) — 300 — ( 832 )

Sale of business ( 2,668 ) — — — ( 2,668 )

Balance at December 31, 2023 $ 184,230 $ 213,576 $ 83,899 $ 31,678 $ 513,383

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therefore, no interim tests were performed.

During the October 31, 2022 impairment test, the Company conducted a quantitative analysis for all eight of the Company’s reporting units.

During the October 31, 2023 impairment test, the Company conducted a quantitative analysis for all seven of the Company’s reporting units.

The quantitative impairment test consists of comparing the fair value of a reporting unit with its carrying value including goodwill.

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As a result of the Company's annual testing for 2023, 2022 and 2021, none of the reporting units with goodwill as of the testing date had carrying values in excess of their fair values.

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Acquired Intangible Assets

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Non-compete agreements 2,376 2,154 2,371 2,006

Backlog — — 7,200 7,200

152,931 79,251 157,107 75,081

Total acquired intangible assets $ 205,231 $ 79,251 $ 212,607 $ 75,081

The Company did not recognize impairment charges related to intangible assets during the year ended December 31, 2022.

During the year ended December 31, 2021, the Company recognized impairment charges of $ 8.3 million related to indefinite-lived trademark intangible assets due to a rebranding initiative that resulted in the discontinuation of certain indefinite-lived trademarks in the Company's Agtech segment.

During the year ended December 31, 2023, the Company recognized impairment charges of $ 3.8 million related to indefinite-lived trademark intangible assets due to a rebranding initiative that resulted in the discontinuation of certain indefinite-lived trademarks in the Agtech segment, along with the write-off of amortizing intangibles related to a discontinued product line in the Renewables segment.

The Company recognized no impairment charges related to intangible assets during the year ended December 31, 2022.

The Company recognized amortization expense related to the definite-lived intangible assets.

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Current operating lease liability 10,278 8,620

Product warranties 9,139 6,251

Insurance 6,307 6,440

Accrued warranties 6,251 5,686

Interest and taxes 5,167 5,696

Unearned revenue 4,572 3,681

Current portion of MSPP liabilities 2,267 2,947

Other 16,438 10,669

Total accrued expenses $ 88,719 $ 73,721

Accrued expenses for compensation includes salaries, benefits, and short-term or current portions of incentives and bonuses.

Accrued expenses for insurance are primarily for general liability, workers’ compensation and employee healthcare policies for which the Company is self-insured up to certain per-occurrence and aggregate limits.

Table of Co n tents

accrued represent the Company's best estimates of the probable amount of claims to be paid.

Differences between the amounts accrued and the amount that may be reasonably possible of payment are not material.

Accrued expenses for unearned revenue primarily relate to up-front customer deposits received on contracts for goods and services to be provided by the Company as further discussed in Note 3 "Revenue." The current portion of Management Stock Purchase Plan liabilities ("MSPP liabilities") represents the Company's equity-based awards that are settled in cash, further described in Note 12 "Equity-Based Compensation."

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

December 31, 2022 December 31, 2021

Revolving credit facility $ 91,000 $ 24,500

Less unamortized debt issuance costs ( 2,238 ) ( 719 )

Total debt $ 88,762 $ 23,781

The Company had no outstanding debt as of December 31, 2023 and unamortized debt issuance costs, included in other assets on the consolidated balance sheet, were $ 1.7 million.

As of December 31, 2022, the Company's total outstanding debt was $ 88.8 million, which included $ 91.0 million on the Company's revolving credit facility net of $ 2.2 million in unamortized debt issuance costs.

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, and which was terminated without any prepayment penalties.

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 (the "Prior Credit Agreement") dated as of January 24, 2019, which was terminated without any prepayment penalties.

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

3 unchanged sentences

The Credit Agreement terminates on December 8, 2027.

Interest rates on the revolving credit facility 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 has an initial applicable margin of 0.125 % for base rate loans and 1.125 % for SOFR and alternative currency loans.

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.

In addition, the Credit Agreement is subject to an annual commitment fee, payable quarterly, which was 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.

On January 24, 2019, the Company entered into the 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 provided a revolving credit facility and letters of credit in an aggregate amount equal to $ 400 million.

The Company had the ability to 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 Senior Credit Agreement.

Interest rates on the revolving credit facility under the Senior 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 Senior 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.

The Senior Credit Agreement terminated on December 8, 2022.

Table of Co n tents

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

Interest rates on the revolving credit facility under the Prior 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 Prior 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.

The Prior Credit Agreement terminated on December 8, 2022.

Standby letters of credit of $ 3.9 million have been issued under the Credit Agreement to third parties on behalf of the Company as of December 31, 2023.

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

These letters of credit reduce the amount otherwise available under the Credit Agreement's revolving credit facility.

The Company had $ 396.1 million and $ 304.5 million of availability under the revolving credit facility as of December 31, 2023 and 2022, respectively.

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Interest income 679 174 269

Other non-cash adjustments ( 679 ) ( 345 ) ( 345 )

Other adjustments ( 128 ) ( 679 ) ( 345 )

Cash paid for interest $ 3,553 $ 3,542 $ 1,563

(10) PENSION AND OTHER POSTRETIREMENT BENEFITS

The Company has a 401(k) plan which all employees of U.S.

The Company has a 401(k) plan in which all employees of U.S.

subsidiaries are eligible to participate.

The Company contributes to a multiemployer defined benefit pension plan under the terms of a collective-bargaining agreement that covers union-represented employees.

The Company has an unfunded postretirement healthcare plan which provides health insurance to certain employees and their spouses upon retirement.

This plan has been frozen and no additional participants will be added to the plan in the future.

The Company has an unfunded postretirement healthcare plan which provides health insurance to certain retired employees and their spouses.

This plan has been frozen, no current employees participate and no additional participants will be added to the plan in the future.

Total expense for all retirement plans for the years ended December 31 was (in thousands):

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Given the status of this plan, it is reasonably possible that future contributions to the plan will increase although the Company cannot reasonably estimate a possible range of increased contributions as of December 31, 2023.

Table of Co n tents

The following table presents the changes in the accumulated postretirement benefit obligation related to the Company’s unfunded postretirement healthcare benefits at December 31 (in thousands):

1 unchanged sentence

Interest cost 194 127

Plan amendments — 162

Actuarial gain ( 1,784 ) ( 200 )

Actuarial loss (gain) 59 ( 1,784 )

Benefits paid, net of contributions ( 274 ) ( 316 )

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Unamortized prior service cost 292 352

Unrecognized actuarial (gain) loss ( 278 ) 1,530

Unrecognized actuarial (gain) ( 219 ) ( 278 )

Net amount recognized $ ( 4,135 ) $ ( 4,155 )

8 unchanged sentences

2023 2022 2021

Service cost $ — $ — $ 10

Interest cost $ 194 $ 127 $ 125

11 unchanged sentences

7.8 % 7.8 % 7.0 %

(1) For 2022, it was assumed that these rates would gradually decline to 4.0 % by 2075.

(1) For 2023 and 2022, it was assumed that these rates would gradually decline to 4.0 % by 2075.

For 2021, it was assumed that these rates would gradually decline to 3.8 % by 2075.

(2) Actuarial losses are amortized utilizing the corridor approach.

2 unchanged sentences

If most of the plan participants are inactive, the amortization period is the expected future lifetime of inactive plan participants.

Table of Co n tents

Expected benefit payments from the plan for the years ended December 31 are as follows (in thousands):

1 unchanged sentence

Expected benefit payments $ 357 $ 370 $ 362 $ 361 $ 356 $ 1,646

(11) ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The cumulative balance of each component of accumulated other comprehensive income (loss) is as follows (in thousands):

Foreign Currency Translation Adjustment Minimum post retirement benefit plan adjustments Total Pre-Tax Amount Tax (Benefit) Expense Accumulated Other Comprehensive Income (Loss)

(11) ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME

The cumulative balance of each component of accumulated other comprehensive (loss) income is as follows (in thousands):

Adjustment Postretirement

Adjustments Total Pre-

Tax Amount Tax Benefit

(Expense) Accumulated

Comprehensive

(Loss) Income

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

Minimum post retirement benefit plan adjustments — 179 179 43 136

Postretirement benefit plan adjustments — 1,852 1,852 ( 449 ) 1,403

Foreign currency translation adjustment ( 5,022 ) — ( 5,022 ) — ( 5,022 )

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

Minimum post retirement benefit plan adjustments — 1,852 1,852 449 1,403

Postretirement benefit plan adjustments — 150 150 ( 36 ) 114

Foreign currency translation adjustment 1,204 — 1,204 — 1,204

Balance at December 31, 2023 $ ( 2,178 ) $ ( 245 ) $ ( 2,423 ) $ 309 $ ( 2,114 )

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 operations.

(12) EQUITY-BASED COMPENSATION

The Company awards equity-based compensation to employees and directors, which is recognized in the statements of operations based on the grant-date fair value of the award.

The Company awards equity-based compensation to employees and directors, which is recognized in the statements of income based on the grant-date fair value of the award.

The Company uses the straight-line method for recording compensation expense over a vesting period generally up to four years with either graded or cliff vesting.

1 unchanged sentence

On May 3, 2023, the stockholders of the Company approved the adoption of the Gibraltar Industries, Inc.

Amended and Restated 2018 Equity Incentive Plan (the "Amended 2018 Plan") which increases the total number of shares available for issuance by the Company from 1,000,000 shares to 1,550,000 shares.

In addition, 81,707 shares that were unissued and available for grant under the Gibraltar Industries, Inc.

2015 Equity Incentive Plan (the "2015 Plan") were consolidated with the Amended 2018 Plan.

No further grants will be made under the 2015 Plan.

The Amended 2018 Plan allows the Company to grant equity-based incentive compensation awards, in the form of non-qualified options, restricted shares, restricted stock units, performance shares, performance stock units, and stock rights to eligible participants.

On May 4, 2022, the stockholders of the Company approved the adoption of the Gibraltar Industries, Inc.

Amended and Restated 2016 Stock Plan for Non-Employee Directors ("Non-Employee Directors Plan") which increases the total number of shares for issuance by the Company thereunder from 100,000 shares to 200,000 shares, allows the Company to grant awards of shares of the Company's common stock to current 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.

On May 4, 2018, the shareholders of the Company approved the adoption of the Gibraltar Industries, Inc.

2018 Equity Incentive Plan (the "2018 Plan").

The 2018 Plan provides for the issuance of up to 1,000,000 shares of common stock and supplements the remaining shares available for issuance under the existing Gibraltar Industries, Inc.

2015 Equity Incentive Plan (the "2015 Plan").

The Company's 2005 Equity Incentive Plan (the "Prior Plan") was amended in 2015 to terminate issuance of further awards from the Prior Plan.

Both the 2018 Plan and the 2015 Plan allow the Company to grant equity-based incentive compensation awards, in the form of non-qualified options, restricted shares, restricted stock units, performance shares, performance stock units, and stock rights to eligible participants.

Table of Co n tents

At December 31, 2022, approximately 326,000 and 80,000 shares were available for issuance under the 2018 Plan and 2015 Plan, respectively, as incentive stock options or other stock awards, and approximately 101,000 shares were available for issuance under the Non-Employee Directors Plan as awards of shares of the Company's common stock.

The Company recognized the following compensation expense in connection with awards that vested under the 2018 Plan, the 2015 Plan, the Prior Plan, and the Non-Employee Directors Plan along with the related tax benefits recognized during the years ended December 31 (in thousands):

At December 31, 2023, approximately 885,000 shares were available for issuance under the Amended 2018 Plan as incentive stock options or other stock awards, and approximately 86,000 shares were available for issuance under the Non-Employee Directors Plan as awards of shares of the Company's common stock.

The compensation cost for employee and non-employee director equity-based compensation plans for all current and prior year awards granted along with the related tax benefits recognized during the years ended December 31 (in thousands) were as follows:

2023 2022 2021

Expense recognized under the Prior Plan $ 19 $ 29 $ 40

Expense recognized under the 2015 Plan 1,617 1,186 1,932

Expense recognized under the 2018 Plan 5,928 6,597 5,441

Expense recognized under the Non-Employee Directors Plan 770 840 760

Total stock compensation expense $ 9,750 $ 8,334 $ 8,652

13 unchanged sentences

Performance stock units (1) 85,323 $ 53.22 108,464 $ 47.00 62,778 $ 87.84

(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 either the Company’s return on invested capital (“ROIC”) over a one-year period performance period or other criteria such as revenue, gross profit, and operating profit thresholds over a three-year performance period.

The Company's PSUs with a market condition are based on the ranking of the Company’s total shareholder 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.

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

Stock Options

1 unchanged sentence

The Company determines the fair value of stock options granted based on the Black-Scholes option pricing model on the date of grant, and the expected stock volatility is based on volatility of the Company’s stock price using a historical period commensurate with the expected life of the options.

Table of Co n tents

At December 31, 2023, the Company has one grant of options outstanding.

20 unchanged sentences

Balance at December 31, 2023 5,000 $ 39.55 3.26 $ 197,150

The aggregate intrinsic value in the preceding table represents the total pre-tax intrinsic value, based on the $ 45.88 per share market price of the Company’s common stock as of December 31, 2022, which would have been received by the option holder had the option holder with an exercise price below the per share market price on December 31, 2022, exercised the options as of that date.

The aggregate intrinsic value in the preceding table represents the total pre-tax intrinsic value, based on the $ 78.98 per share market price of the Company’s common stock as of December 31, 2023, which would have been received by the option holder had the option holder exercised the options as of that date.

Stock Units and Common Stock

13 unchanged sentences

Balance at December 31, 2023 232,970 $ 53.75 — $ — 136,246 $ 52.27 44,479 $ 46.90

(1) The Company's PSU adjustments during 2022 represents (i) 55,959 shares for which the performance condition was not achieved and the PSUs were adjusted in the first quarter of 2022 to reflect zero PSU earned 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 and (ii) 9,250 shares not earned that related to two separate PSU awards granted in 2019 and 2020 that the threshold level of achievement based on other performance criteria as defined in the respective awards over a two-year or three-year performance periods were not met for the performance periods ended December 31, 2021.

(1) (i) 40,610 units of the Company's PSUs granted in 2022 were adjusted in the first quarter of 2023 to reflect 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;

and (ii) 30,000 units of the Company's TSR PSUs granted in 2020 for which the performance condition was not achieved and the PSUs were adjusted in the first quarter of

2023 to reflect zero earned as the threshold level of achievement was not met based on performance criteria as defined in the respective awards over a three-year performance period which ended March 1, 2023.

(2) Vested and issuable upon termination from service as a member of the Company's Board of Directors.

Table of Co n tents

The fair value of the common stock, restricted stock units, and deferred stock units, as well as the performance stock units with a financial performance condition granted during the three years ended December 31, 2022 was based on the Company stock price at grant date of the award.

The fair value of the performance stock units with a market condition granted during the three years ended December 31, 2022 were determined using a Monte Carlo simulation as of the grant date of the award.

The Company granted performance units with a market condition during 2020;

however, no such awards were granted in 2022 and 2021.

The fair value of the common stock, restricted stock units, and deferred stock units, as well as the performance stock units with a financial performance condition granted during the three years ended December 31, 2023 was based on the Company's stock price at grant date of the award.

The following table sets forth the aggregate intrinsic value of options exercised and aggregate fair value of restricted stock units and restricted shares that vested during the years ended December 31 (in thousands):

13 unchanged sentences

The deferrals and related company match are credited to an account that represents a share-based liability.

The portion of the account deferred to unrestricted investments is measured at fair market value of the unrestricted investments, and the portion of the account deferred to restricted stock units and company-matching restricted stock units is measured at a 200-day average of the Company stock price.

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

1 unchanged sentence

Total MSPP liabilities recorded on the consolidated balance sheet as of December 31, 2022 were $ 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 liability were $ 13.4 million and $ 20.7 million at December 31, 2022 and 2021, respectively.

The following table provides the number of restricted stock units credited to active participant accounts, balance of vested and unvested restricted stock units within active participant accounts, payments made with respect to restricted stock units issued under the MSPP, and MSPP expense during years ended December 31:

The value of the restricted stock units within the MSPP liabilities was $ 17.3 million and $ 13.4 million at December 31, 2023 and 2022, respectively.

The following table provides the number of restricted stock units credited to active participant accounts, balance of vested and unvested restricted stock units within active participant accounts, payments made with respect to MSPP liabilities and MSPP expense during years ended December 31:

2023 2022 2021

2 unchanged sentences

Share-based liabilities paid (in thousands) $ 2,392 $ 3,689 $ 4,915

MSPP (recovery) expense (in thousands) $ ( 4,459 ) $ 6,034 $ 4,518

Table of Co n tents

MSPP expense (recovery) (in thousands) $ 4,710 $ ( 4,459 ) $ 6,034

(13) FAIR VALUE MEASUREMENTS

6 unchanged sentences

The Company had no financial assets or liabilities measured at fair value on a recurring basis and did not have any financial instruments for which carrying value differed from its fair value at December 31, 2023 and 2022.

As of December 31, 2022, the Company had $ 91.0 million outstanding on its revolving credit facility under its Credit Agreement.

The Company determined the carrying value of the outstanding balance on its revolving credit facility approximates fair value due to the variable market interest rate terms of the credit facility.

As of December 31, 2023, the Company had no outstanding indebtedness on its revolving credit facility under its Credit Agreement.

The Company had $ 91.0 million outstanding on its revolving credit facility as of December 31, 2022.

The Company’s other financial instruments primarily consist of cash and cash equivalents, accounts receivable, notes receivable, and accounts payable.

The Company’s other financial instruments primarily consist of cash and cash equivalents, accounts receivable, and accounts payable.

The carrying values for these financial instruments approximate fair value.

1 unchanged sentence

Other non-recurring fair value measurements

The Company recorded impairment of property, plant and equipment during the years ended December 31, 2022 and 2020, and recognized impairment charges related to certain intangible assets during the year ended December 31, 2021.

The Company recorded impairment of property, plant and equipment during the year ended December 31, 2022 and recognized impairment charges related to certain intangible assets during the years ended December 31, 2023 and 2021.

The Company uses unobservable inputs, classified as Level 3 inputs, in determining the fair value of these assets.

See Note 7 "Goodwill and Related Intangible Assets," Note 14 "Held for Sale and Discontinued Operations" and Note 15 "Exit Activity Costs and Asset Impairments" for more disclosure regarding the impairment of certain intangible assets and property, plant, and equipment, respectively.

See Note 7 "Goodwill and Related Intangible Assets," Note 14 "Discontinued Operations" and Note 15 "Exit Activity Costs and Asset Impairments" for more disclosure regarding the impairment of certain intangible assets and property, plant, and equipment, respectively.

The Company also applied fair value principles for the goodwill impairment tests performed during 2023, 2022, and 2021.

2 unchanged sentences

Additionally, the Company's recent acquisition activity, as described in Note 6 "Acquisitions," used Level 3 inputs to estimate fair values allocated to the assets acquired and liabilities assumed.

(14) 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 in prepaid expenses and other current assets and accrued expenses on the Company's consolidated balance sheets with a valuation allowance to recognize the net carrying amount at the lower of cost or fair value, less costs to sell.

Table of Co n tents

As of December 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) December 31, 2022

Assets held for sale

Accounts receivable, net of allowance $ 266

Inventories, net of reserves 6,748

Other current assets 1,999

Property, plant, and equipment, net 331

Operating lease asset 495

Acquired intangibles, net 6,213

Valuation allowance ( 13,990 )

Total assets held for sale $ 2,062

Liabilities held for sale

Accounts payable $ 733

Accrued expenses 1,159

Non-current operating lease liabilities 70

Total liabilities held for sale $ 1,962

Net sales, operating loss and valuation allowance recorded for this disposal group for the years ended December 31 are as follows (in thousands):

Net sales $ 7,840 $ 20,328

Operating loss $ ( 6,769 ) $ ( 3,539 )

Valuation allowance $ ( 13,990 ) $ —

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 the Company's 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, a valuation allowance of $ 14.0 million was recorded during the twelve months ended December 31, 2022 and has been presented within other expense (income) in the consolidated statements of operations.

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

(14) 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 years ended December 31, 2021 and 2020.

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.

Net proceeds of $ 38 million, consisting of cash and a $ 13 million seller note, resulted in a pre-tax loss of $ 30 million, 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 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.

Table of Co n tents

Components of the income (loss) from discontinued operations before taxes, including the interest allocated to discontinued operations, for the years ended December 31 were as follows (in thousands):

2022 2021 2020

Net sales $ — $ 20,391 $ 128,915

Operating expenses — 17,493 115,822

Loss and adjustments to loss on disposal — 1,419 29,600

Interest expense allocation — — 95

Income (loss) from discontinued operations before taxes $ — $ 1,479 $ ( 16,602 )

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 expense (income) in the consolidated statements of operations.

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

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

There was no income from discontinued operations before taxes for the years ended December 31, 2023 and 2022.

For the year ended December 31, 2021, income from discontinued operations before taxes of $ 1.5 million consisted of net sales of $ 20.4 million, operating expenses of $ 17.5 million, and adjustment to loss on disposal of $ 1.4 million.

On December 1, 2023, the Company sold its Japan-based solar racking business within its Renewables segment to a third party.

The $ 8.0 million net proceeds from the sale resulted in a pre-tax net loss of $ 0.6 million and has been presented within other (income) expense in the consolidated statements of income.

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

(15) EXIT ACTIVITY COSTS AND ASSET IMPAIRMENTS

1 unchanged sentence

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, in the sale and exiting of less profitable businesses or products lines, and the reduction in the Company's manufacturing footprint.

Exit activity costs were incurred during 2022 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, in 2022, the Company exited a facility, relocating to a new one, and separately, closed two other facilities.

In 2021, the Company closed four facilities.

In 2020, the Company closed two facilities and, separately, sold a facility closed in 2017.

These closures resulted in exit activity costs and asset impairment charges.

As a result of process simplification initiatives, the Company has incurred exit activity costs (recoveries) 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.

Additionally, the Company has incurred the aforementioned costs resulting from the sale, relocation and/or closure of facilities including two closures and one relocation in 2022 and four facility closures in 2021.

The following table sets forth the exit activity costs (recoveries) and asset impairment charges incurred by segment during the years ended December 31 related to the restructuring activities described above (in thousands):

2023 2022 2021

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

Exit Activity Asset Impairment Total Exit Activity Asset Impairment Total Exit Activity Asset Impairment Total

Renewables $ 7,558 $ 1,136 $ 8,694 $ 3,256 $ 1,198 $ 4,454 $ 4,769 $ 1,193 $ 5,962

4 unchanged sentences

Total $ 9,204 $ 4,987 $ 14,191 $ 6,039 $ 2,276 $ 8,315 $ 7,020 $ 1,193 $ 8,213

The following table provides a summary of where the above exit activity costs and asset impairments are recorded in the consolidated statements of operations for the years ended December 31 (in thousands):

The following table provides a summary of where the above exit activity costs and asset impairments are recorded in the consolidated statements of income for the years ended December 31 (in thousands):

2023 2022 2021

2 unchanged sentences

Total exit activity costs and asset impairments $ 14,191 $ 8,315 $ 8,213

Table of Co n tents

The following table reconciles the beginning and ending liability for exit activity costs relating to the Company’s facility consolidation efforts (in thousands):

The following table reconciles the beginning and ending liability for exit activity costs relating to the Company’s restructuring efforts (in thousands):

Balance as of January 1 $ 2,417 $ 272

22 unchanged sentences

Provision for income taxes $ 38,459 $ 29,084 $ 25,046

Table of Co n tents

The provision for income taxes from discontinued operations for the years ended December 31 consisted of the following (in thousands):

2022 2021 2020

Federal $ — $ 362 $ 1,345

State — 139 57

Foreign — 214 1,725

Total current — 715 3,127

Federal — ( 340 ) ( 876 )

Foreign — ( 11 ) ( 138 )

Total deferred — ( 349 ) ( 1,004 )

Provision for income taxes $ — $ 366 $ 2,123

The provision for income taxes from continuing operations differs from the federal statutory rate of 21 % due to the following for the years ended December 31 (in thousands, except for percentages) :

5 unchanged sentences

Executive compensation 1,369 0.9 % 960 0.9 % 1,781 1.8 %

Change in valuation allowance — — % — — % ( 130 ) ( 0.1 ) %

Other 346 0.2 % ( 67 ) ( 0.1 ) % 915 0.9 %

3 unchanged sentences

Goodwill 65,967 62,132

Operating leases 11,325 6,775

Intangible assets 1,919 3,706

1 unchanged sentence

Gross deferred tax liabilities 94,313 88,541

Capital loss carryforward ( 26,490 ) ( 27,328 )

Capitalized research and development costs ( 6,286 ) ( 4,503 )

Equity compensation ( 6,907 ) ( 5,993 )

Operating leases ( 11,678 ) ( 7,076 )

Assets held for sale — ( 13,669 )

Capitalized research and development costs ( 4,503 ) —

Capital loss carryforward ( 26,527 ) ( 26,490 )

Other ( 12,422 ) ( 10,417 )

3 unchanged sentences

Net deferred tax liabilities $ 57,086 $ 46,881

Table of Co n tents

At December 31, 2023, the Company had total net operating loss carry forwards of $ 17.5 million, which included $ 0.3 million for federal, $ 16.5 million for state, and $ 0.7 million for foreign income tax purposes.

7 unchanged sentences

The Company recognized a total of $ 26.5 million of deferred tax assets, net of the federal benefit, related to this carryforward prior to any valuation allowances, which included $ 22.2 million of federal and $ 4.3 million of state deferred tax assets.

The Company has a full valuation allowance on the capital loss carry forward and as a result there is no deferred tax asset.

The Company has a full valuation allowance on the capital loss carry forward and as a result there is no deferred tax asset related to the capital loss.

Deferred taxes include net deferred tax assets relating to certain state and foreign tax jurisdictions.

A reduction of the carrying amount of deferred tax assets by a valuation allowance is required if it is more likely than not that such assets will not be realized.

In 2020, the valuation allowance in China was reversed and a tax attribute valuation allowance was also reversed as the Company expects to utilize the attribute.

In 2021, a valuation allowance was recorded on federal and state capital loss carry forwards which are not expected to be utilized before expiration.

The following sets forth a reconciliation of the beginning and ending amount of the Company’s valuation allowance (in thousands):

4 unchanged sentences

Reclassification from discontinued operations upon sale of industrial group — — 26,498

Currency translation — — ( 9 )

Balance as of December 31 $ 26,593 $ 26,488 $ 26,581

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income tax liability related to the Company's remaining unremitted foreign earnings is not practicable due to the complexities associated with its hypothetical calculation.

In 2022, 2021 and 2020, the Company did not have any unrecognized tax benefits and no activity related to such benefits has occurred in any of the years presented in the consolidated financial statements.

The Company did not have any unrecognized tax benefits or activity related to such benefits in any of the years presented in the consolidated financial statements.

The Company classifies accrued interest and penalties related to unrecognized tax benefits in income tax expense.

No interest or penalties have been recognized during the years ended December 31, 2022, 2021 or 2020.

No interest or penalties have been recognized during the years presented.

The Company and its U.S.

4 unchanged sentences

The Company is currently in appeals for an audit of tax years 2016 through 2019 in Massachusetts and believes the technical merits of the position will be sustained.

Table of Co n tents

(17) EARNINGS PER SHARE

Basic earnings per share is based on the weighted average number of common shares outstanding.

Diluted earnings per share is based on the weighted average number of common shares outstanding, as well as dilutive common shares which include shares issuable pursuant to equity based incentive compensation awards under the equity compensation plans described in Note 12 "Equity-Based Compensation" of the consolidated financial statements.

Weighted average shares outstanding for basic and diluted earnings were as follows for the years ended December 31 (in thousands):

1 unchanged sentence

Income from continuing operations $ 110,533 $ 82,406 $ 74,516

Income (loss) from discontinued operations — 1,113 ( 18,725 )

Income from discontinued operations — — 1,113

Net income available to common shareholders $ 110,533 $ 82,406 $ 75,629

4 unchanged sentences

Weighted average shares and conversions 30,785 32,192 33,054

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

The treasury stock method is used to calculate dilutive shares, which reduces the gross number of dilutive shares by the number of shares purchasable from the proceeds of the options assumed to be exercised and the unrecognized expense related to the options, restricted shares, restricted stock units, and performance stock units assumed to have vested.

The following table provides the potential anti-dilutive common stock options and stock units for the years ended December 31 (in thousands):

The following table provides the potential anti-dilutive common stock units not included in the diluted weighted average shares calculations for the years ended December 31 (in thousands):

2023 2022 2021

Common stock options and stock units 43 — 13

Common stock units 26 43 —

The Company's leases are classified as operating leases and consist of manufacturing facilities, distribution centers, office space, vehicles and equipment.

Most of the Company's leases include one or more options to renew, with renewal terms that can extend the respective lease term from one month to fifteen years .

Most of the Company's leases include one or more options to renew, with renewal terms that can extend the respective lease term from one month to ten years .

The exercise of lease renewal options is at the Company's sole discretion.

1 unchanged sentence

Certain leases also include options to purchase at fair value the underlying leased asset at the Company's sole discretion.

Table of Co n tents

Amounts recognized in the Company's consolidated balance sheet at December 31 were as follows (in thousands):

Assets Operating lease assets $ 26,502 $ 18,120

Current Accrued expenses $ 8,620 $ 7,239

Non-current Non-current operating lease liabilities 19,041 11,390

$ 27,661 $ 18,629

The components of lease costs for the years ended December 31 were as follows (in thousands):

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The future maturity of the Company's lease liabilities as of December 31, 2023 were as follows (in thousands):

2024 $ 12,329

After 2028 17,191

2 unchanged sentences

Present value of lease liabilities $ 46,267

The Company uses the its incremental borrowing rate based on information available at the commencement date of a lease in determining the present value of lease payments as the rates implicit in most of the Company's leases are not readily determinable.

The Company uses its incremental borrowing rate based on information available at the commencement date of a lease in determining the present value of lease payments as the rates implicit in most of the Company's leases are not readily determinable.

(19) COMMITMENTS AND CONTINGENCIES

1 unchanged sentence

Management does not believe that the outcome of any claims, or other claims which are not clearly determinable at the present time, would result in a material adverse effect on the Company's financial condition or results of operations.

Table of Co n tents

(20) SEGMENT INFORMATION

1 unchanged sentence

(i) Renewables, which primarily includes designing, engineering, manufacturing and installation of solar racking and electrical balance of systems;

(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;

(ii) Residential, which primarily includes designing, engineering and manufacturing of 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 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.

(iv) Infrastructure, which primarily includes designing, engineering and manufacturing of 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.

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 tables illustrate certain measurements used by management to assess the performance of the segments described above as of and for the years ended December 31 (in thousands):

20 unchanged sentences

$ 27,378 $ 26,167 $ 31,966

Table of Co n tents

2023 2022 2021

4 unchanged sentences

Unallocated corporate assets 117,287 24,448 21,246

Assets of discontinued operations — — 77,438

$ 1,256,451 $ 1,210,613 $ 1,214,901

19 unchanged sentences

Total $ 432,096 $ 635,505 $ 199,161 $ 73,021 $ 1,339,783

Table of Co n tents

Net sales by region or origin and long-lived assets by region of domicile for the years ended and as of December 31 are as follows (in thousands):

Net sales by region or origin and long-lived assets by region of domicile for the years ended and as of December 31 were as follows (in thousands):

2023 2022 2021

6 unchanged sentences

Total $ 154,837 $ 136,787 $ 97,368

Table of Co n tents

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

1 unchanged sentence

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data