What changed in this filing

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Item 1. Financial Statements

2024-07-31 compared with 2024-05-01 · 129 added, 56 removed, 321 unchanged (37% of the section changed)

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Net sales $ 353,005 $ 364,914 $ 645,511 $ 658,181

4 unchanged sentences

Interest (income) expense ( 1,495 ) 1,308 ( 2,245 ) 2,799

Other income ( 1,021 ) ( 397 )

Other expense (income) 347 ( 509 ) ( 674 ) ( 906 )

Income before taxes 43,617 42,278 77,124 70,554

12 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Net income $ 32,198 $ 30,723 $ 57,144 $ 51,822

47 unchanged sentences

(in thousands)

Three Months Ended

Six Months Ended

Cash Flows from Operating Activities

3 unchanged sentences

Stock compensation expense 6,358 5,056

Exit activity recoveries, non-cash ( 72 ) ( 63 )

Provision for (benefit of) deferred income taxes — ( 51 )

Exit activity costs (recoveries), non-cash 163 ( 23 )

Provision for deferred income taxes — 179

Other, net 2,347 2,680

9 unchanged sentences

Acquisitions, net of cash acquired — 554

Net proceeds from sale of business 350 —

Net cash used in investing activities ( 8,357 ) ( 4,730 )

5 unchanged sentences

Effect of exchange rate changes on cash ( 173 ) ( 381 )

Net increase (decrease) in cash and cash equivalents 47,239 ( 10,111 )

Net increase in cash and cash equivalents 79,676 1,013

Cash and cash equivalents at beginning of year 99,426 17,608

5 unchanged sentences

Common Stock Additional

Capital Retained

Earnings Accumulated

Comprehensive

Loss Treasury Stock Total

Stockholders’

Shares Amount Shares Amount

Balance at March 31, 2024 34,266 $ 343 $ 335,259 $ 763,457 $ ( 3,078 ) 3,797 $ ( 155,796 ) $ 940,185

Net income — — — 32,198 — — — 32,198

Foreign currency translation adjustment — — — — ( 418 ) — — ( 418 )

Stock compensation expense — — 3,719 — — — — 3,719

Net settlement of restricted stock units 1 — — — — — ( 13 ) ( 13 )

Awards of common stock 7 — — — — — — —

Balance at June 30, 2024 34,274 $ 343 $ 338,978 $ 795,655 $ ( 3,496 ) 3,797 $ ( 155,809 ) $ 975,671

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

Net income — — — 30,723 — — — 30,723

Foreign currency translation adjustment — — — — ( 576 ) — — ( 576 )

Stock compensation expense — — 3,462 — — — — 3,462

Net settlement of restricted stock units 38 1 ( 1 ) — — 14 ( 874 ) ( 874 )

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

Common stock repurchased under stock repurchase program — — — — — 367 ( 17,812 ) ( 17,812 )

Balance at June 30, 2023 34,194 $ 342 $ 327,927 $ 679,800 $ ( 4,115 ) 3,770 $ ( 153,644 ) $ 850,310

See accompanying notes to consolidated financial statements.

GIBRALTAR INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands)

Common Stock Additional

Paid-In Capital Retained Earnings Accumulated

7 unchanged sentences

Net settlement of restricted stock units 48 1 ( 1 ) — — 19 ( 1,447 ) ( 1,447 )

Balance at March 31, 2024 34,266 $ 343 $ 335,259 $ 763,457 $ ( 3,078 ) 3,797 $ ( 155,796 ) $ 940,185

Awards of common stock 7 — — — — — — —

Balance at June 30, 2024 34,274 $ 343 $ 338,978 $ 795,655 $ ( 3,496 ) 3,797 $ ( 155,809 ) $ 975,671

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

3 unchanged sentences

Net settlement of restricted stock units 126 2 ( 2 ) — — 50 ( 2,803 ) ( 2,803 )

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

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

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

Balance at June 30, 2023 34,194 $ 342 $ 327,927 $ 679,800 $ ( 4,115 ) 3,770 $ ( 153,644 ) $ 850,310

See accompanying notes to consolidated financial statements.

16 unchanged sentences

Accounts receivable consisted of the following (in thousands):

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Trade accounts receivable $ 226,066 $ 178,087

4 unchanged sentences

Refer to Note 3 "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 three month period ended March 31, 2024, that is deducted from the amortized cost basis of accounts receivable to present the net amount expected to be collected (in thousands):

The following table provides a roll-forward of the allowance for credit losses, for the six month period ended June 30, 2024, 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, 2024 $ 5,572

1 unchanged sentence

Accounts written off against allowance and other adjustments ( 56 )

Ending balance as of March 31, 2024 $ 5,578

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

electrical balance of systems;

roof and foundation ventilation products;

centralized mail systems and electronic package solutions;

Ending balance as of June 30, 2024 $ 5,563

Sales includes revenue from contracts with customers for roof and foundation ventilation products;

centralized mail systems;

rain dispersion products;

2 unchanged sentences

gutter guards;

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

electrical balance of systems;

designing, engineering, manufacturing and installation of greenhouses;

5 unchanged sentences

Refer to Note 13 "Segment Information" for additional information related to revenue recognized by timing of transfer of control by reportable segment.

As of March 31, 2024, the Company's remaining performance obligations are part of contracts that have an original expected duration of one year or less.

As of June 30, 2024, 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 March 31, 2024 and December 31, 2023 was $ 7.7 million and $ 3.9 million, respectively.

Revenue recognized during the three months ended March 31, 2024 and 2023 that was in contract liabilities at the beginning of the respective periods was $ 27.7 million and $ 18.7 million, respectively.

Unearned revenue as of June 30, 2024 and December 31, 2023 was $ 5.8 million and $ 3.9 million, respectively.

The Company recognized revenue of $ 37.3 million and $ 33.7 million during the six months ended June 30, 2024 and 2023, respectively, that was included in the contract liabilities balance of $ 48.7 million and $ 39.6 million at December 31, 2023 and 2022, respectively.

(4) INVENTORIES, NET

Inventories consisted of the following (in thousands):

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Raw material $ 83,962 $ 77,489

28 unchanged sentences

(6) GOODWILL AND RELATED INTANGIBLE ASSETS

The changes in the carrying amount of goodwill for the three months ended March 31, 2024 are as follows (in thousands):

Renewables Residential Agtech Infrastructure Total

The changes in the carrying amount of goodwill for the six months ended June 30, 2024 are as follows (in thousands):

Residential Renewables Agtech Infrastructure Total

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

1 unchanged sentence

Foreign currency translation — — ( 683 ) — ( 683 )

Balance at March 31, 2024 $ 184,230 $ 212,466 $ 83,423 $ 31,678 $ 511,797

Goodwill is recognized net of accumulated impairment losses of $ 133.2 million as of March 31, 2024 and December 31, 2023, respectively.

Balance at June 30, 2024 $ 212,466 $ 184,230 $ 83,216 $ 31,678 $ 511,590

Goodwill is recognized net of accumulated impairment losses of $ 133.2 million as of June 30, 2024 and December 31, 2023, 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 March 31, 2024 which would require an interim impairment test to be performed.

The Company determined that no triggering event had occurred as of June 30, 2024 which would require an interim impairment test to be performed.

Acquired Intangible Assets

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

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Amount Accumulated

10 unchanged sentences

Total acquired intangible assets $ 188,343 $ 66,776 $ 205,231 $ 79,251

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

The following table summarizes the acquired intangible asset amortization expense (in thousands):

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Amortization expense $ 2,639 $ 2,760 $ 5,357 $ 5,526

3 unchanged sentences

(7) LONG-TERM DEBT

The Company had no outstanding debt as of March 31, 2024 and December 31, 2023, respectively.

Unamortized debt issuance costs, included in other assets on the consolidated balance sheets, as of March 31, 2024 and December 31, 2023 were $ 1.7 million and $ 1.7 million, respectively.

The Company had no outstanding debt as of June 30, 2024 and December 31, 2023.

Unamortized debt issuance costs, included in other assets on the consolidated balance sheets, as of June 30, 2024 and December 31, 2023 were $ 1.6 million and $ 1.7 million, respectively.

Revolving Credit Facility

2 unchanged sentences

The Credit Agreement contains two financial covenants.

As of March 31, 2024, the Company was in compliance with all financial covenants.

As of June 30, 2024, the Company was in compliance with all financial covenants.

The Credit Agreement terminates on December 8, 2027.

5 unchanged sentences

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

Standby letters of credit of $ 3.7 million have been issued under the Credit Agreement to third parties on behalf of the Company as of March 31, 2024.

Standby letters of credit of $ 4.9 million have been issued under the Credit Agreement to third parties on behalf of the Company as of June 30, 2024.

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

The Company had $ 396.3 million and $ 396.1 million of availability under the revolving credit facility as of March 31, 2024 and December 31, 2023, respectively.

The Company had $ 395.1 million and $ 396.1 million of availability under the revolving credit facility as of June 30, 2024 and December 31, 2023, respectively.

(8) EQUITY-BASED COMPENSATION

5 unchanged sentences

Equity-Based Awards - Settled in Stock

The following table provides the number of stock units granted during the three months ended March 31, along with the weighted-average grant-date fair value of each award:

The following table provides the number of stock units granted during the six months ended June 30, along with the weighted-average grant-date fair value of each award:

Awards Number of

4 unchanged sentences

Restricted stock units 33,846 $ 77.95 53,862 $ 53.49

Deferred stock units 3,340 $ 68.86 6,351 $ 54.33

Common shares 6,680 $ 68.86 8,468 $ 54.33

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

1 unchanged sentence

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) PSUs granted in the first quarter of 2023 includes 7,825 units that were forfeited in the third quarter of 2023 and 147,572 units that will be converted to shares and issued to recipients in the first quarter of 2026, representing 200.0 % of the target amount granted and not subsequently forfeited, based on the Company's actual ROIC compared to ROIC target for the performance period ended December 31, 2023.

(2) PSUs granted in the first quarter of 2023 include 7,825 units that were forfeited in the third quarter of 2023 and 154,996 units that will be converted to shares and issued to recipients in the first quarter of 2026, representing 200.0 % of the target amount granted and not subsequently forfeited, based on the Company's actual ROIC compared to ROIC target for the performance period ended December 31, 2023.

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 March 31, 2024 were $ 23.0 million, of which $ 2.6 million was included in current accrued expenses and $ 20.4 million was included in non-current liabilities.

Total MSPP liabilities recorded on the consolidated balance sheet as of June 30, 2024 were $ 24.1 million, of which $ 2.6 million was included in current accrued expenses and $ 21.5 million was included in non-current liabilities.

Total MSPP liabilities recorded on the consolidated balance sheet as of December 31, 2023 were $ 20.0 million, of which $ 2.0 million was included in current accrued expenses and $ 18.0 million was included in non-current liabilities.

The value of the restricted stock units within the MSPP liabilities was $ 20.0 million and $ 17.3 million at March 31, 2024 and December 31, 2023, 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,:

The value of the restricted stock units within the MSPP liabilities was $ 21.0 million and $ 17.3 million at June 30, 2024 and December 31, 2023, 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 six months ended June 30,:

Restricted stock units credited 41,435 44,102

7 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Beginning balance $ 10,068 $ 6,163 $ 9,139 $ 6,251

4 unchanged sentences

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 the Company's manufacturing footprint.

As a result of process simplification initiatives, the Company has incurred exit activity costs related to moving and closing costs and severance, along with asset impairment recoveries related to the write-down of inventory and other charges associated with discontinued product lines.

Additionally, the Company has incurred the aforementioned costs resulting from the sale and/or closure of facilities including costs recorded during the three months ended March 31, 2023.

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

Three Months Ended March 31,

As a result of process simplification initiatives, the Company has incurred exit activity costs related to moving and closing costs and severance, along with asset impairment costs (recoveries) related to the write-down of inventory and other charges associated with discontinued product lines.

Additionally, the Company has incurred the aforementioned costs resulting from the sale and/or closure of facilities including costs recorded during the six months ended June 30, 2023.

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

Three Months Ended

Exit Activity Asset Impairment Total Exit Activity Asset Impairment Total

Residential $ 145 $ — $ 145 $ — $ — $ —

Renewables 4,214 235 4,449 2,909 40 2,949

Agtech 11 — 11 156 — 156

Infrastructure — — — — — —

Corporate 4 — 4 — — —

Total $ 4,374 $ 235 $ 4,609 $ 3,065 $ 40 $ 3,105

Six Months Ended

Exit Activity Asset Impairment Total Exit Activity Asset Impairment Total

Residential $ 145 $ ( 72 ) $ 73 $ 114 $ — $ 114

Renewables 4,483 235 4,718 2,909 ( 23 ) 2,886

Agtech 149 — 149 717 — 717

2 unchanged sentences

Total $ 4,781 $ 163 $ 4,944 $ 3,740 $ ( 23 ) $ 3,717

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

The following table provides a summary of where the exit activity costs and asset impairments were recorded in the consolidated statements of income (in thousands):

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Cost of sales $ 4,171 $ 3,098 $ 4,099 $ 3,611

5 unchanged sentences

Cash payments ( 1,893 ) ( 2,377 )

Balance at March 31 $ 6,579 $ 1,771

Balance at June 30 $ 9,613 $ 3,780

(11) INCOME TAXES

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 $ 8,561 $ 7,177

The following table summarizes the provision for income taxes for continuing operations and the applicable effective tax rates:

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Provision for income taxes (in thousands) $ 11,419 $ 11,555 $ 19,980 $ 18,732

Effective tax rate 26.2 % 27.3 % 25.9 % 26.6 %

The effective tax rate for the three months ended March 31, 2024 and 2023, respectively, was greater than the U.S.

The effective tax rate for the three and six months ended June 30, 2024 and 2023, 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 item s due to an excess tax benefit on stock-based compensation.

(12) EARNINGS PER SHARE

Weighted average shares outstanding for basic and diluted earnings were as follows for the three months ended March 31, (in thousands):

Weighted average shares outstanding for basic and diluted earnings were as follows (in thousands):

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Net income available to common stockholders $ 32,198 $ 30,723 $ 57,144 $ 51,822

5 unchanged sentences

Weighted average shares and conversions 30,791 30,684 30,801 30,846

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

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

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Common stock units 13 19 2 17

1 unchanged sentence

The Company is organized into four reportable segments on the basis of the production processes, products and services provided by each segment, identified as follows:

(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, rain dispersion products, trims and flashings and other accessories;

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

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

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

1 unchanged sentence

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 months ended March 31, (in thousands):

Renewables $ 51,496 $ 59,205

The following table illustrates certain measurements used by management to assess performance of the segments described above (in thousands):

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Residential $ 214,316 $ 228,234 $ 399,427 $ 407,729

Renewables 79,381 77,459 130,877 136,664

Agtech 34,508 35,028 68,535 70,880

2 unchanged sentences

Income from operations:

Renewables $ 1,644 $ 2,269

Residential $ 43,313 $ 43,959 $ 77,659 $ 73,468

Renewables 1,647 5,908 3,291 8,177

Agtech 2,282 ( 1,117 ) 4,890 1,213

5 unchanged sentences

Total assets:

Renewables $ 374,137 $ 377,694

Residential $ 537,821 $ 515,739

Renewables 396,954 377,694

Agtech 167,087 168,213

3 unchanged sentences

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

Three Months Ended March 31, 2024

Renewables Residential Agtech Infrastructure Total

Three Months Ended June 30, 2024

Residential Renewables Agtech Infrastructure Total

Point in Time $ 212,524 $ 8,226 $ 189 $ 10,839 $ 231,778

1 unchanged sentence

Total net sales $ 214,316 $ 79,381 $ 34,508 $ 24,800 $ 353,005

Three Months Ended March 31, 2023

Renewables Residential Agtech Infrastructure Total

Three Months Ended June 30, 2023

Residential Renewables Agtech Infrastructure Total

Point in Time $ 226,618 $ 10,633 $ 880 $ 8,848 $ 246,979

1 unchanged sentence

Total net sales $ 228,234 $ 77,459 $ 35,028 $ 24,193 $ 364,914

Six Months Ended June 30, 2024

Residential Renewables Agtech Infrastructure Total

Point in Time $ 395,856 $ 15,015 $ 2,528 $ 17,149 $ 430,548

Over Time 3,571 115,862 66,007 29,523 214,963

Total net sales $ 399,427 $ 130,877 $ 68,535 $ 46,672 $ 645,511

Six Months Ended June 30, 2023

Residential Renewables Agtech Infrastructure Total

Point in Time $ 404,560 $ 19,727 $ 4,803 $ 14,909 $ 443,999

Over Time 3,169 116,937 66,077 27,999 214,182

Total net sales $ 407,729 $ 136,664 $ 70,880 $ 42,908 $ 658,181

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