What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-19 compared with 2024-02-21 · 279 added, 358 removed, 665 unchanged (49% of the section changed)

10 unchanged sentences

Summary of Significant Accounting Policies

Accounts Receivable, Net

Inventorie s, N et

Property, Plant , and Equipmen t, N e t

Inventories, Net

Property, Plant, and Equipment, Net

Acquisition s and Divesti ture s

Goodwill and Related Intangible Assets

Accrued Expenses

Pension and Other Postretirement Benefits

Accumulated Other Comprehensive ( L oss) Income

Equity-Based Compensation

Fair Value Measurements

Discontinued Operations

Exit Activity Costs and Asset Impairments

2 unchanged sentences

Segment Information

S ub seq uent Event

Report of Independent Registered Public Accounting Firm

27 unchanged sentences

Due to uncertainties attributed to such factors, a significant change in an estimate on one or more contracts could have a material effect on the Company’s results of operations.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls that address the risks of material misstatement relating to the measurement and valuation of the Company’s review of estimated costs to complete, including the determination of the underlying significant assumptions and the completeness and accuracy of the open contracts reviewed.

For example, we tested controls over management’s quarterly review of the cost estimates, monthly review of open contracts and completed contracts, and review over the cost estimates used to develop initial cost estimates on projects.

To test the amount of revenue recognized from contracts, our audit procedures included, among others, assessing whether the performance obligations identified were appropriately recognized on an over time basis through inspection of the contract and inquiry from program management regarding the nature and scope of work and testing the completeness and accuracy of the data underlying the determination of the amount of revenue recognized in the current period.

To test the amount of revenue recognized from contracts, our audit procedures included, among others, assessing whether the performance obligations identified were appropriately recognized on an over time basis through inspection of the contract and inquiry from management regarding the nature and scope of work and testing the completeness and accuracy of the data underlying the determination of the amount of revenue recognized in the current period.

To assess the over time revenue recognition, we tested that the actual costs incurred on the project are complete and accurate through agreement to supporting evidence.

Our testing of the assumptions included a combination of confirmation of contract terms, billings, and project status directly with customers, inquiries of the program management and financial personnel, inspection of evidence to support future estimated costs, performance of an analysis of actual gross margin on completed contracts compared to prior estimates, evaluation of subsequent year-end expenses incurred on projects, and assessment of the historical accuracy of management’s estimates by analyzing changes in project gross margins during project lifecycles and determining if those changes were driven by cost factors that should have been known or could have been reasonably estimated at project inception.

Our testing of the assumptions included a combination of inquiries of the project management and financial personnel, inspection of evidence to support future estimated costs, performance of an analysis of actual gross margin on completed contracts compared to prior estimates, evaluation of subsequent year-end expenses incurred on projects, and assessment of the historical accuracy of management’s estimates by analyzing changes in project gross margins during project lifecycles and determining if those changes were driven by cost factors that should have been known or could have been reasonably estimated at project inception.

/s/ Ernst & Young LLP

13 unchanged sentences

Income from operations 143,023 150,729 130,102

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

Interest (income) expense, net ( 6,171 ) 3,002 4,047

Other (income) expense ( 24,731 ) ( 1,265 ) 14,565

1 unchanged sentence

Provision for income taxes 36,585 38,459 29,084

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

Discontinued operations:

Income before taxes — — 1,479

Provision for income taxes — — 366

Income from discontinued operations — — 1,113

Net income $ 137,340 $ 110,533 $ 82,406

Net earnings per share – Basic:

Income from continuing operations $ 3.61 $ 2.57 $ 2.27

Income from discontinued operations — — 0.03

Net income $ 3.61 $ 2.57 $ 2.30

Weighted average shares outstanding – Basic 30,626 32,096 32,873

Net earnings per share – Diluted:

Income from continuing operations $ 3.59 $ 2.56 $ 2.25

Income from discontinued operations — — 0.04

Net income $ 3.59 $ 2.56 $ 2.29

Weighted average shares outstanding – Diluted 30,785 32,192 33,054

Net earnings per share:

Basic $ 4.50 $ 3.61 $ 2.57

Diluted $ 4.46 $ 3.59 $ 2.56

Weighted average shares outstanding:

Basic 30,538 30,626 32,096

Diluted 30,769 30,785 32,192

See accompanying notes to consolidated financial statements.

5 unchanged sentences

Net income $ 137,340 $ 110,533 $ 82,406

Other comprehensive income (loss):

Other comprehensive (loss) income:

Foreign currency translation adjustment ( 3,337 ) 1,204 ( 5,022 )

Adjustment to postretirement benefit liability, net of tax 125 114 1,403

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

Other comprehensive (loss) income ( 3,212 ) 1,318 ( 3,619 )

Total comprehensive income $ 134,128 $ 111,851 $ 78,787

6 unchanged sentences

Cash and cash equivalents $ 269,480 $ 99,426

Accounts receivable, net of allowance of $ 5,572 and $ 3,746 , respectively

Trade receivables, net of allowance of $ 3,394 and $ 5,351 , respectively

169,350 172,736

Costs in excess of billings, net 34,570 51,814

Inventories, net 138,140 120,503

13 unchanged sentences

Total current liabilities 254,862 225,578

Long-term debt — 88,762

Deferred income taxes 56,655 57,103

23 unchanged sentences

Net income $ 137,340 $ 110,533 $ 82,406

Income from discontinued operations — — 1,113

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

Adjustments to reconcile net income to net cash provided by operating activities:

2 unchanged sentences

Stock compensation expense 10,963 9,750 8,334

Gain on sale of business ( 25,265 ) — —

Exit activity costs, non-cash 31 2,771 16,266

Provision for deferred income taxes 10,800 6,337 2,968

(Benefit of) provision for deferred income taxes ( 486 ) 10,800 6,337

Other, net 5,865 12,492 1,506

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

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

Trade receivables and costs in excess of billings 17,914 ( 15,375 ) 32,754

Inventories ( 18,623 ) 45,908 14,377

2 unchanged sentences

Accrued expenses and other non-current liabilities 3,900 24,295 ( 11,258 )

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

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

Net cash provided by operating activities 174,264 218,476 102,691

3 unchanged sentences

Net proceeds from sale of business 28,474 8,047 —

Net cash (used in) provided by investing activities of continuing operations ( 15,722 ) ( 71,683 ) 24,714

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

Net cash (used in) provided by investing activities ( 15,722 ) ( 71,683 ) 24,538

Net cash provided by (used in) investing activities 8,544 ( 15,722 ) ( 71,683 )

Cash Flows from Financing Activities

3 unchanged sentences

Purchase of common stock at market prices ( 12,189 ) ( 29,329 ) ( 89,494 )

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

Net cash used in financing activities ( 12,189 ) ( 120,329 ) ( 25,007 )

Effect of exchange rate changes on cash ( 565 ) ( 607 ) ( 1,242 )

Net increase (decrease) in cash and cash equivalents 81,818 4,759 ( 19,205 )

Net increase in cash and cash equivalents 170,054 81,818 4,759

Cash and cash equivalents at beginning of year 99,426 17,608 12,849

Cash and cash equivalents at end of year $ 269,480 $ 99,426 $ 17,608

Supplemental disclosure of cash flow information

Cash paid for interest $ 1,050 $ 3,553 $ 3,542

Cash paid for income taxes $ 31,044 $ 23,447 $ 27,017

See accompanying notes to consolidated financial statements.

16 unchanged sentences

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

6 unchanged sentences

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 )

18 unchanged sentences

All intercompany accounts and transactions have been eliminated in consolidation.

Reclassification

The Company has presented costs in excess of billings, net separately on its consolidated balance sheet as of December 31, 2023 to conform with current year presentation.

Historically, the Company included costs in excess of billings, net within accounts receivable on its consolidated balance sheet.

This reclassification had no impact on the Company's net income, earnings per share, cash flows, segment reporting or financial position.

Use of estimates

3 unchanged sentences

The Company has four reportable segments:

Renewables, Residential, Agtech and Infrastructure.

Residential, Renewables, Agtech and Infrastructure.

For further disclosure regarding the Company's reportable segments, refer to Note 16 "Segment Information."

12 unchanged sentences

For the above 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.

Under the cost-to-cost measure of progress, 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.

Under the cost-to-cost measure of progress, 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.

Revenues are recognized proportionally as costs are incurred.

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

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.

The Company regularly reviews the progress under the cost-to-cost method and any adjustments are recognized as necessary.

Changes in estimates are recognized as they become known using the cumulative catch-up basis.

On a regular basis for substantially all contracts, the Company reviews its estimates and progress towards completion of its performance obligations.

When the Company determines there is a change to any individual contract's estimated total costs to be incurred, the Company recognizes the impact to revenues using the cumulative catch-up method.

When any individual contract's estimated total costs to be incurred exceeds the contract's transaction price, the Company recognizes the contract loss in the period in which such loss is determined.

The Company also recognizes revenues from services contracts over time.

3 unchanged sentences

Contract assets primarily represents revenue recognized for performance obligations that have been satisfied but for which amounts receivable have not been billed.

These are included as current assets and included within accounts receivable on the Company's consolidated balance sheets.

Contract liabilities include payments received from customers in advance of the satisfaction of performance obligations for a contract.

1 unchanged sentence

Unearned revenue relates to payments received in advance of performance under the contract and is recognized when the Company performs under the contract.

Unearned revenue is presented within accrued expenses in the Company's consolidated balance sheets.

Costs to obtain a contract with a customer

The Company recognizes an asset for the incremental costs of obtaining a contract with a customer if the Company expects the benefit of those costs to be longer than one year.

If the amortization period of the asset is one year or less, the Company recognizes the incremental costs of obtaining a contract as an expense when incurred.

The Company expenses incremental costs of obtaining a contract as incurred when the benefit of those costs is less than twelve months.

These incremental costs include, but are not limited to, sales commissions incurred to obtain a contract with a customer.

If the Company expects the benefit of the incremental costs to be greater than twelve months, the Company records an asset for those costs which is amortized over the duration of the contract.

Cash and cash equivalents

All highly liquid investments with a maturity of three months or less are considered cash equivalents.

Accounts receivable and allowance for doubtful accounts and contract assets

Accounts receivable are composed of trade and contract receivables recorded at either the invoiced amount or costs in excess of billings, are expected to be collected within one year, and do not bear interest.

The Company’s expected loss allowance methodology for accounts receivable and costs in excess of billings (collectively "accounts receivable") is developed using historical collection experience, current and future economic and market conditions, and a review of the current status of customers' accounts receivables.

Trade receivables and allowance for expected credit losses

Trade receivables are stated at the amount invoiced to customers less an allowance for expected credit losses.

In general, the Company's policy is to not charge interest on trade receivables after the invoice becomes past due.

A trade receivable is considered past due if payment has not been received within the agreed upon invoice terms.

The Company’s expected credit losses methodology is developed using estimates and historical collection experience, current and future economic and market conditions, and a review of the current status of customers' trade receivables.

The Company is exposed to credit losses through sales of products and services.

Due to the short-term nature of such accounts receivable, the estimated amount of accounts receivable that may not be collected is based on aging of the accounts receivable balances.

Additionally, specific allowance amounts are established to record the appropriate provision for customers that no longer share risk characteristics similar with other accounts receivable.

Due to the short-term nature of such trade receivables, the estimated amount of trade receivables that may not be collected is based on aging of the trade receivable balances.

Additionally, specific allowance amounts are established to record the appropriate provision for customers that no longer share risk characteristics similar with other trade receivables.

The Company’s monitoring activities include timely account reconciliation, dispute resolution, payment confirmation, consideration of customers' financial condition and macroeconomic conditions.

Balances are written off when determined to be u ncollectible after all means of collection have been exhausted and the potential for recovery is considered remote.

Estimates are used to determine the allowance.

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

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

Trade receivables are written off when determined to be u ncollectible after all means of collection have been exhausted and the potential for recovery is considered remote.

The following table provides a roll-forward of the allowance for expected credit losses for the years ended December 31 (in thousands):

2024 2023 2022

3 unchanged sentences

Ending balance $ 3,394 $ 5,351 $ 3,527

Concentrations of credit risk in accounts receivable are limited to those from significant customers that are believed to be financially sound.

Concentrations of credit risk in trade receivable are limited to those from significant customers that are believed to be financially sound.

As of December 31, 2024 and 2023, the Company's most significant customer is a home improvement retailer.

The home improvement retailer purchases from the Residential segment.

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.

Trade receivables as a percentage of consolidated trade receivables from the home improvement retailer was 16 % and 17 % as of December 31, 2024 and 2023, respectively.

Net sales to the home improvement retailer as a percentage of consolidated net sales were 12 %, 13 %, and 14 % during the years ended December 31, 2024, 2023 and 2022, respectively.

23 unchanged sentences

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 fair value of reporting units evaluated under the quantitative test are determined using two valuation techniques:

an income approach and a market approach.

Each valuation approach relies on significant assumptions including a weighted average cost of capital ("WACC") based upon the capital structure of market participants in the Company’s peer groups, projected revenue growth, forecasted cash flows, and earnings multiples based on the market value of the Company and market participants within its peer groups.

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.

The impairment test consists of comparing the fair value of the indefinite-lived intangible asset, determined using discounted cash flows on a relief-from-royalty basis, with its carrying amount.

The impairment test consists of comparing the fair value of the indefinite-lived intangible asset, determined using discounted cash flows on a relief-from-royalty basis, with its

carrying amount.

An impairment loss would be recognized for the carrying amount in excess of its fair value.

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 6 "Goodwill and Related Intangible Assets."

3 unchanged sentences

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 "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 6 "Goodwill and Related Intangible Assets" and Note 11 "Exit Activity Costs and Asset Impairments."

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

14 unchanged sentences

Income and expense items are translated at the average exchange rates prevailing during the period.

Defined Benefit Pension and Other Postretirement Plans

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

subsidiaries are eligible to participate.

Total expense for the 401(k) plan for the years ended December 31 was (in thousands):

2024 2023 2022

401(k) plan $ 4,360 $ 3,804 $ 3,580

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's one multiemployer plan is underfunded and has a rehabilitation plan in place.

The rehabilitation plan requires minimum contributions from the Company.

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, 2024.

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.

The Company's postretirement health care costs adjustments

are reclassified when realized from accumulated other comprehensive loss to other expense in the Company's consolidated statements of income.

The provision for income taxes is determined using the asset and liability approach.

9 unchanged sentences

Recent accounting pronouncements

Recent Accounting Pronouncements Not Yet Adopted

The Company evaluated all recently issued Financial Accounting Standards Board ("FASB") Accounting Standard Updates ("ASU"), including those that are currently effective in or after 2024, and determined that the adoption of these pronouncements would not have a material effect on the financial position, results of operations or cash flows of the Company, with the exception of the following adopted and not yet adopted recent accounting principles.

Standard Description Financial Statement Effect or Other Significant Matters

Recent Accounting Pronouncements Adopted

Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures

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

In November 2023, the FASB issued 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.

1 unchanged sentence

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.

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.

The Company adopted this ASU and the required disclosures in these financial statements and has applied the amendments in this ASU retrospectively to all prior periods presented in these financial statements.

The adoption of this ASU only affected the Company's disclosures in Note 16 "Segment Information" and there was no material impact to the Company's results of operations, cash flows or financial condition.

Recent Accounting Pronouncements Not Yet Adopted

Income Taxes (Topic 740):

2 unchanged sentences

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.

This ASU requires a public business entity 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

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

Trade accounts receivable $ 178,087 $ 179,170

Costs in excess of billings 52,035 41,732

Total accounts receivables 230,122 220,902

Less allowance for doubtful accounts ( 5,572 ) ( 3,746 )

Accounts receivable, net $ 224,550 $ 217,156

Refer to Note 3 "Revenue" concerning the Company's costs in excess of billings.

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;

rain dispersion products;

trims and flashings and other accessories;

retractable awnings;

gutter guards;

The amendments in this ASU are effective for the Company in its annual reporting period beginning after December 15, 2024, with early adoption permitted.

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

The Company's planned date of adoption of these required disclosures in its financial statements for annual reporting period ending December 31, 2025.

Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses and ASU No.

2025-01 Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Clarifying the Effective Date

In November 2024, the FASB issued ASU No.

2024-03, which includes amendments that require disaggregated information about certain income statement expense line items to be disclosed in the notes to the financial statements on an annual and interim basis.

Additionally, in January 2025, the FASB issued ASU No.

2025-01, which amended the effective date of ASU 2024-03.

The amendments in ASU 2024-03 are effective for the Company in its first annual reporting period beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027.

Early adoption is permitted.

The Company is required to apply the amendments in this ASU prospectively and may apply it retrospectively.

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

The Company's planned date of adoption of these required disclosures in its financial statements for annual reporting period ending December 31, 2027.

Sales includes revenue from contracts with customers for roof and foundation ventilation products, centralized mail systems, rain dispersion products, trims and flashings and other accessories, retractable awnings and gutter guards;

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

designing, engineering, manufacturing and installation of greenhouses;

structural bearings;

expansion joints;

pavement sealant;

elastomeric concrete;

and bridge cable protection systems.

Refer to Note 20 "Segment Information" for additional information related to revenue recognized by timing of transfer of control by reportable segment.

structural bearings, expansion joints, pavement sealant, elastomeric concrete and bridge cable protection systems.

Refer to Note 16 "Segment Information" for disclosures related to disaggregation of revenue.

Payment terms and conditions vary by contract, although terms generally include a requirement of payment within a range from 30 to 60 days, or in certain cases, up front deposits.

In circumstances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined that the Company's contracts generally do not include a significant financing component.

In circumstances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined that the Company's contracts generally

do not include a significant financing component.

Taxes collected from customers, which are subsequently remitted to governmental authorities, are excluded from sales.

1 unchanged sentence

Additionally, as of December 31, 2024 and 2023, there were no assets recognized related to incremental costs of obtaining a contract with a customer as the benefits of these costs are not expected to exceed one year .

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

Contract assets consist of net costs in excess of billings, classified as current assets in the Company's consolidated balance sheets.

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):

2023 2022 2021

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

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 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.

Unearned revenue at December 31, 2024 and 2023 was $ 3.1 million and $ 3.9 million, respectively.

The Company recognized revenue of $ 42.9 million, $ 35.5 million, and $ 44.4 million during the years ended December 31, 2024, 2023, and 2022, respectively, that was included in the contract liabilities balance of $ 48.7 million, $ 39.6 million, and $ 50.4 million at December 31, 2023, 2022 and 2021, respectively.

The decreases in costs in excess of billings and billings in excess of costs as of December 31, 2024 compared to December 31, 2023, respectively, were primarily due to decline in volume in the Renewables segment in 2024 compared to 2023.

For the years ended December 31, 2024, 2023, and 2022, there were no changes to estimated total costs to be incurred related to any individual contract that materially impacted the Company's consolidated financial statements.

(3) INVENTORIES, NET

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

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

Raw material $ 78,888 $ 71,981

1 unchanged sentence

Finished goods 41,057 39,014

Gross inventory 129,939 176,654

Less reserves ( 9,436 ) ( 6,294 )

Total inventories $ 120,503 $ 170,360

Inventories, net $ 138,140 $ 120,503

The Company's gross inventory balances are reduced by reserves for excess, obsolete and slow moving inventory and estimates for determining net realizable value of the inventory that are reported on a net basis on the Company's consolidated balance sheets.

14 unchanged sentences

Property, plant, and equipment, net $ 109,820 $ 107,603

(6) ACQUISITIONS

(5) ACQUISITIONS AND DIVESTITURES

2023 Acquisition

1 unchanged sentence

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.

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

Due to the timing of the acquisition, the Company continues to gather information supporting the acquired assets and assumed liabilities.

Accordingly, all amounts recorded are provisional.

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

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

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

The preliminary excess consideration was recorded as goodwill and approximated $ 4.1 million, all of which is deductible for tax purposes.

The purchase consideration for this acquisition was $ 10.4 million, which includes a working capital adjustment and certain other adjustments provided for in the asset 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 $ 3.0 million, all of which is deductible for tax purposes.

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

The final purchase price allocation will be completed no later than the third quarter of fiscal year 2024.

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

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

Working capital $ 827

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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.

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.

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Total acquisition related costs $ 491 $ 265 $ 1,972

2024 Divestiture

On December 17, 2024, the Company sold its electronic locker business within its Residential segment to a third party.

The $ 28.1 million net proceeds from the sale resulted in a pre-tax net gain of $ 25.3 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.

2023 Divestiture

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.

(6) GOODWILL AND RELATED INTANGIBLE ASSETS

The changes in the carrying amount of goodwill for the years ended December 31 were as follows (in thousands):

Renewables Residential Agtech Infrastructure Total

Residential Renewables Agtech Infrastructure Total

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

Acquired goodwill 4,133 — — — 4,133

Adjustment to prior year acquisition 904 — — — 904

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

Other changes (1) 387 ( 3,800 ) 300 — ( 3,113 )

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

Acquired goodwill — 4,133 — — 4,133

Adjustment to prior year acquisition — 387 — — 387

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

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

Other changes (1) ( 4,406 ) — ( 1,558 ) — ( 5,964 )

Balance at December 31, 2024 $ 209,170 $ 184,230 $ 82,341 $ 31,678 $ 507,419

(1) Other changes in the carrying amounts of goodwill includes adjustment to prior year acquisitions, foreign currency translation and sale of business.

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

No goodwill impairment charges were recognized by the Company during 2023 or 2022.

No goodwill impairment charges were recognized during the years ended December 31, 2024, 2023, and 2022.

Annual and Interim Impairment Testing

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therefore, no interim tests were performed.

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.

The fair value of each reporting unit evaluated under the quantitative test was determined using two valuation techniques:

an income approach and a market approach.

The Company conducted its annual goodwill impairment test for its six reporting units as of October 31, 2024.

A quantitative test was conducted for one of reporting units, and a qualitative analysis for the remaining five reporting units.

Both the quantitative and qualitative impairment tests consist of comparing the fair value of a reporting unit with its carrying value including goodwill.

For additional disclosure of the Company's assessment approach, refer to Note 1 "Summary of Significant Accounting Policies".

As a result of the Company's annual testing for 2024, 2023, and 2022, 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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Total acquired intangible assets $ 173,048 $ 69,166 $ 205,231 $ 79,251

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 following table summarizes intangible asset impairment for the years ended December 31 (in thousands):

2024 2023 2022

Indefinite-lived trademarks (1) $ 11,300 $ 3,200 $ —

Amortizing trademarks (2) — 597 —

Total $ 11,300 $ 3,797 $ —

(1) Rebranding initiatives that resulted in the discontinuation of certain indefinite-lived trademarks in both the Renewables and Agtech segments in 2024 and only the Agtech segment in 2023.

(2) Write-off of amortizing intangibles related to a discontinued product line in the Renewables segment.

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

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Customer rebates 18,066 18,497

Current operating lease liability 10,278 8,620

Product warranties 17,463 9,139

Current operating lease liability 11,473 10,278

Insurance 5,773 6,307

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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.

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.

Product Warranties

The Company generally warrants that its products will be free from material defects in workmanship and materials.

Warranty reserve estimates are based on management’s judgment, considering such factors as historical experience, anticipated rates of claims, and other available information.

Management reviews and adjusts these estimates, if necessary, based on the differences between actual experience and historical estimates.

The reserve for product warranties is presented within accrued expenses on the Company’s consolidated balance sheets.

Activity in the product warranties is summarized as follows for the years ended December 31, (in thousands):

Beginning balance $ 9,139 $ 6,251

Provisions/accruals during the period 16,048 6,190

Settlements made during the period ( 7,724 ) ( 3,302 )

Ending balance $ 17,463 $ 9,139

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

Unamortized debt issuance costs, included in other assets on the consolidated balance sheets, as of December 31, 2024 and 2023 were $ 1.3 million and $ 1.7 million, respectively.

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 (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.

On December 8, 2022, the Company entered into a Credit Agreement (the "Credit Agreement") which provides for a revolving credit facility and letters of credit in an aggregate amount equal to $ 400 million.

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

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

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

The Company's Sixth Amended and Restated Credit Agreement (the "Prior Credit Agreement") dated as of January 24, 2019 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 %.

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

Total cash paid for interest in the years ended December 31 was (in thousands):

2023 2022 2021

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

Interest income 679 174 269

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 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 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):

2023 2022 2021

401(k) plan $ 3,804 $ 3,580 $ 3,196

Multiemployer and other defined benefit and pension plans 92 79 78

Postretirement healthcare plan 251 342 411

Total retirement plan expense $ 4,147 $ 4,001 $ 3,685

The Company's one multiemployer plan is underfunded and has a rehabilitation plan in place.

The rehabilitation plan requires minimum contributions from the Company.

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):

Projected benefit obligation at January 1 $ 4,229 $ 6,202

Interest cost 194 127

Actuarial loss (gain) 59 ( 1,784 )

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

Projected benefit obligation at December 31 4,208 4,229

Fair value of plan assets — —

Under funded status ( 4,208 ) ( 4,229 )

Unamortized prior service cost 292 352

Unrecognized actuarial (gain) ( 219 ) ( 278 )

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

Amounts recognized in the consolidated financial statements consisted of (in thousands):

Accrued postretirement benefit liability:

Current portion $ 357 $ 353

Long term portion 3,851 3,876

Pre-tax accumulated other comprehensive loss – unamortized post-retirement healthcare costs ( 73 ) ( 74 )

Net amount recognized $ 4,135 $ 4,155

The measurement date used to determine postretirement benefit obligation measures was December 31.

Components of net periodic postretirement benefit cost charged to expense for the years ended December 31 were as follows (in thousands):

2023 2022 2021

Interest cost $ 194 $ 127 $ 125

Amortization of unrecognized prior service cost 60 60 44

Loss amortization ( 2 )

Net periodic benefit cost $ 254 $ 211 $ 282

Assumptions used to calculate the benefit obligation:

Discount rate 4.7 % 4.8 % 2.4 %

Annual rate of increase in the per capita cost of:

Medical costs before age 65 ( 1)

7.8 % 7.8 % 7.0 %

Medical costs after age 65 ( 1)

4.6 % 4.5 % 4.5 %

Prescription drug costs ( 1)

7.8 % 7.8 % 7.0 %

(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.

Differences between actual experience and the actuarial assumptions are reflected in (gain)/loss.

If the total net (gain) or loss exceeds 10 percent of the greater of the accumulated postretirement benefit obligation or plan assets, this excess must be amortized over the average remaining service period of the active plan participants.

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

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

2024 2025 2026 2027 2028 Years 2029 - 2033

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

(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

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 )

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 income.

(9) EQUITY-BASED COMPENSATION

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 awards equity-based compensation to employees and non-employee directors, which is recognized in the consolidated 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.

Stock compensation expense recognized during the period is based on the value of the portion of equity-based awards that is ultimately expected to vest during the period reduced by the expense on unvested awards forfeited during the period.

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.

The Gibraltar Industries, Inc.

Amended and Restated 2018 Equity Incentive Plan (the "Amended 2018 Plan") which includes a total of 1,631,707 shares available for issuance, 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.

The Gibraltar Industries, Inc.

Amended and Restated 2016 Stock Plan for Non-Employee Directors ("Non-Employee Directors Plan") which includes 200,000 shares available for issuance, 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.

At December 31, 2024, approximately 684,000 shares were available for issuance under the Amended 2018 Plan as incentive stock options or other stock awards, and approximately 75,000 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:

2024 2023 2022

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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

No options were granted during the years ended December 31, 2023, 2022 and 2021.

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.

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

The following table summarizes the Company's outstanding and exercisable options at December 31, 2023:

Exercise Price Options

Outstanding Weighted

Contractual Life

(in years) Weighted

Price Options

Exercisable Weighted

5,000 3.26 $ 39.55 5,000 $ 39.55

The following table summarizes information about stock option transactions:

Options Weighted

Price Weighted

Remaining Contractual

Life (in years) Aggregate

Intrinsic Value

Balance at January 1, 2021 41,500 $ 29.38

Exercised ( 36,500 ) $ 27.99

Balance at December 31, 2021 5,000 $ 39.55

Exercised — $ —

Balance at December 31, 2022 5,000 $ 39.55

Exercised — $ —

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 $ 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

The following table summarizes information about non-vested restricted stock units and performance stock units (that will convert to shares upon vesting) and common stock:

The following table summarizes information about non-vested restricted stock units and performance stock units (that will convert to shares upon vesting), deferred stock units and common stock:

Units Weighted

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Balance at December 31, 2024 232,340 $ 57.78 — $ — 263,597 $ 57.62 34,490 $ 53.06

(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.

(1) Adjustments during the first quarter of 2024 for (i) an additional 77,498 units for PSUs granted in 2023 to reflect 200.0 % of the target amount granted based on the Company's actual ROIC compared to ROIC target for the performance period ended December 31, 2023, and (ii) a reduction of 764 units for PSUs granted in 2020 to reflect 93.0 % of the target amount granted based on individual performance goals ended December 31, 2023.

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

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):

The fair value of the restricted stock units, common stock, performance stock units with a financial performance condition, and deferred stock units granted during the three years ended December 31, 2024 was based on the Company's stock price at grant date of the award.

The following table sets forth the aggregate fair value of restricted stock units, common stock, performance stock units with a financial performance condition, and deferred stock units that vested during the years ended December 31 (in thousands):

2024 2023 2022

Aggregate intrinsic value of options exercised $ — $ — $ 2,103

Aggregate fair value of vested restricted stock units $ 4,626 $ 4,740 $ 3,920

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Aggregate fair value of vested deferred stock units $ 230 $ 345 $ 105

As of December 31, 2023, there was $ 13.1 million of total unrecognized compensation cost related to non-vested restricted and performance stock units.

That cost is expected to be recognized over a weighted average period of 2.0 years.

As of December 31, 2024, there was $ 9.5 million of total unrecognized compensation cost related to non-vested restricted stock units and performance stock units.

This cost is expected to be recognized over a weighted average period of 2.0 years.

Equity Based Awards - Settled in Cash

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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 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.

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.

Total MSPP liabilities recorded on the consolidated balance sheet as of December 31, 2024 were $ 23.7 million, of which $ 3.2 million was included in accrued expenses and $ 20.5 million was included in other 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 accrued expenses and $ 18.0 million was included in other non-current liabilities.

The value of the restricted stock units within the MSPP liabilities was $ 18.1 million and $ 17.3 million at December 31, 2024 and 2023, respectively.

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Depending on the nature of the asset or liability, various techniques and assumptions can be used to estimate fair value.

A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement as follows:

A financial asset or liability’s classification

within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement as follows:

• Level 1 - Quoted prices in active markets for identical assets or liabilities.

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As of December 31, 2024, 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, and accounts payable.

2 unchanged sentences

Other non-recurring fair value measurements

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 "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 recognized intangible asset impairment during the years ended December 31, 2024 and 2023 as noted in Note 6, "Goodwill and Related Intangible Assets." The fair values of the impaired intangible assets for 2024 and 2023 was zero , and the carrying values were $ 11.3 million and $ 3.8 million, respectively.

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

No impairment charges were recognized during the year ended December 31, 2022.

The Company also applied fair value principles for the goodwill impairment tests performed during 2024, 2023, and 2022.

The Company used two valuation models to estimate the fair values of its reporting units, both of which primarily use Level 3 inputs.

In 2024, the Company elected to performed a quantitative test using two valuation models to estimate the fair values for one of its reporting units and qualitative tests for the remaining five reporting units.

In 2023 and 2022, the Company performed quantitative test using two valuation models to estimate the fair values for all its reporting units.

Both models primarily use Level 3 inputs.

See Note 6 "Goodwill and Related Intangible Assets" of the consolidated financial statements for the results of the Company’s goodwill impairment tests.

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) DISCONTINUED OPERATIONS

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

Net proceeds of $ 38 million, consisting of cash and a $ 13 million seller note, resulted in 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 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.

Additionally, as described in Note 5 "Acquisitions and Divestitures," the Company used Level 3 inputs to estimate fair values allocated to the assets acquired and liabilities assumed related to acquisitions.

(11) EXIT ACTIVITY COSTS AND ASSET IMPAIRMENTS

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

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

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):

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 products lines, and the reduction in the Company's manufacturing footprint.

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 (recoveries) related to the write-down of inventory and other charges such as warranty costs 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.

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

2024 2023 2022

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

Activity Asset Impairment Total Exit

Activity Asset Impairment Total

Residential $ 678 $ ( 72 ) $ 606 $ 960 $ 3,851 $ 4,811 $ 1,825 $ 12 $ 1,837

Renewables 9,792 103 9,895 7,558 1,136 8,694 3,256 1,198 4,454

Agtech 477 — 477 718 — 718 771 1,066 1,837

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Total exit activity costs and asset impairments $ 11,061 $ 14,191 $ 8,315

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

The following table reconciles the beginning and ending liability for exit activity costs recorded in current accrued expenses on the consolidated balance sheet relating to the Company’s restructuring efforts (in thousands):

Balance as of January 1 $ 6,725 $ 2,417

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Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to reverse.

The components of income before taxes from continuing operations consisted of the following for the years ended December 31 (in thousands):

The components of income before taxes consisted of the following for the years ended December 31 (in thousands):

2024 2023 2022

1 unchanged sentence

Foreign 6,055 ( 356 ) ( 1,145 )

Income before taxes from continuing operations $ 148,992 $ 111,490 $ 99,562

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

Income before taxes $ 173,925 $ 148,992 $ 111,490

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

2024 2023 2022

8 unchanged sentences

Provision for income taxes $ 36,585 $ 38,459 $ 29,084

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) :

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

2024 2023 2022

4 unchanged sentences

Executive compensation 1,756 1.0 % 1,369 0.9 % 960 0.9 %

Valuation allowance ( 6,027 ) ( 3.5 ) % — — % — — %

Other 828 0.5 % 346 0.2 % ( 67 ) ( 0.1 ) %

10 unchanged sentences

Operating leases ( 11,670 ) ( 11,678 )

Assets held for sale — ( 13,669 )

Intangible assets ( 854 ) —

Capital loss carryforward ( 19,392 ) ( 26,527 )

Warranty reserves ( 3,901 ) ( 1,790 )

Other ( 7,476 ) ( 11,215 )

3 unchanged sentences

Net deferred tax liabilities $ 56,642 $ 57,086

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.

At December 31, 2024, the Company had total net operating loss carry forwards of $ 16.9 million, which included $ 0.2 million for federal and $ 16.7 million for state.

There was no foreign net operating loss carry forward.

The federal and state net operating loss carry forwards expire between 2031 and 2044.

The foreign net operating loss carry forwards expire between 2024 and 2043.

The Company recognized a total of $ 1.1 million of deferred tax assets, net of the federal tax benefit, related to these net operating losses prior to any valuation allowances, which included $ 0.1 million of federal and $ 0.8 million of state deferred tax assets and $ 0.2 million of foreign deferred tax assets.

The Company recognized a

total of $ 0.8 million of deferred tax assets, net of the federal tax benefit, related to these net operating losses prior to any valuation allowances, which included $ 0.1 million of federal and $ 0.8 million of state deferred tax assets.

As a result of the sale of the Industrial business during 2021, the Company generated a capital loss of $ 113.7 million for federal and state purposes to the extent allowable under state tax regulations.

Amended Federal returns were filed to carry back $ 3.7 million of capital loss.

As a result of the sale of the Company's electronic locker business within its Residential segment in 2024, $ 28.7 million of the capital loss was utilized to offset the capital gain from the sale, and the valuation allowance was subsequently adjusted.

As of December 31, 2024, the remaining capital loss carry forward is $ 81.3 million.

9 unchanged sentences

Reductions ( 7,170 ) — ( 103 )

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

Balance as of December 31 $ 19,434 $ 26,593 $ 26,488

The Company made net payments for income taxes for the following amounts for the years ended December 31 (in thousands):

2023 2022 2021

Payments made for income taxes, net $ 23,447 $ 27,017 $ 22,076

At December 31, 2024, the Company had approximately $ 3.7 million of undistributed earnings of foreign subsidiaries.

11 unchanged sentences

state jurisdictions have statute of limitations generally ranging from four to ten years .

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.

In December 2021, the Organization for Economic Cooperation and Development introduced Base Erosion and Profit Shifting ("BEPS") Pillar 2 rules that impose a global minimum tax rate of 15%.

Numerous countries, including European Union member states, have enacted or are expected to enact legislation to be effective for tax years beginning as early as January 1, 2024, with general implementation of global minimum tax by January 1, 2025.

The Company considered the impacts of BEPS Pillar 2 on its consolidated financial statements and determined that it meets the revenue threshold to be a BEPS taxpayer, however, the Company has met the safe harbor tests such that no additional tax liability applies.

(13) EARNINGS PER SHARE

1 unchanged sentence

2024 2023 2022

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

Income from discontinued operations — — 1,113

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

Denominator for basic earnings per share:

Weighted average shares outstanding 30,626 32,096 32,873

Denominator for diluted earnings per share:

Common stock options and stock units 159 96 181

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

Basic weighted average shares outstanding 30,538 30,626 32,096

Dilutive effect of common stock options and stock units 231 159 96

Diluted weighted average shares outstanding 30,769 30,785 32,192

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):

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(16) SEGMENT INFORMATION

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 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 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.

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):

The Company has four reportable segments:

Residential, Renewables, Agtech and Infrastructure.

The Company's reportable segments are each managed separately because they design, engineer, manufacture, and where applicable install, distinct products with different production processes.

• Residential consists of operating segments that sell the following products and services to major retail home centers, building material wholesalers, building product distributors, roofing distributors, residential contractors, property management companies, manufactured housing dealers, postal services distributors and providers, and online direct to end consumers:

roof and foundation ventilation products, single point and centralized mail systems and electronic package solutions, outdoor living space products (sun-shading), rain dispersion systems, metal roofing job site services, and other construction accessories.

• Renewables consists of an operating segment that sells the following products and services to developers, EPCs and owners / operators of solar fields:

design, manufacture and install solar energy mounting systems including foundation, racking, and electrical balance of system.

• Agtech consists of an operating segment that sells the following products and services to large-scale indoor commercial growers and agricultural research and development facilities:

design, manufacture and build advanced-technology turnkey greenhouse growing facilities.

• Infrastructure consists of an operating segment that sells the following products to commercial and transportation contractors and fabricators:

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

When determining the Company's Residential reportable segment, the Company aggregated operating segments to be one reportable segment as the aggregation is consistent with the objectives and principles of Topic 280, Segment Reporting, and on the basis that the operating segments have similar economic and operating characteristics.

The accounting policies of the Company's segments are the same as those described in Note 1 "Summary of Significant Accounting Policies." The Company evaluates performance of all its reportable segments on income or loss from operations before interest and income taxes.

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

Residential Renewables Agtech Infrastructure Total

Net sales $ 782,519 $ 285,405 $ 152,811 $ 88,029 $ 1,308,764

Operating expenses (2) 633,735 282,056 141,771 66,734 1,124,296

Segment profit 148,784 3,349 11,040 21,295 184,468

Reconciliation of segment profit

Unallocated corporate expenses ( 41,445 )

Interest income, net 6,171

Other income, net 24,731

Income before taxes $ 173,925

Residential Renewables Agtech Infrastructure Total

Net sales $ 814,803 $ 330,738 $ 144,967 $ 87,228 $ 1,377,736

Operating expenses (2) 671,735 300,578 145,895 68,699 1,186,907

Segment profit (loss) 143,068 30,160 ( 928 ) 18,529 190,829

Reconciliation of segment profit

Unallocated corporate expenses ( 40,100 )

Interest expense, net ( 3,002 )

Other income, net 1,265

Income before taxes $ 148,992

Residential Renewables Agtech Infrastructure Total

Net sales $ 767,248 $ 377,567 $ 168,868 $ 76,283 $ 1,389,966

Operating expenses (2) 640,790 352,324 165,954 67,280 1,226,348

Segment profit 126,458 25,243 2,914 9,003 163,618

Reconciliation of segment profit

Unallocated corporate expenses ( 33,516 )

Interest expense, net ( 4,047 )

Other expense, net ( 14,565 )

Income before taxes $ 111,490

(1) The significant expense category and amounts align with the segment-level information that is regularly provided to the CODM.

(2) Operating expenses for each reportable segment includes inventory and manufacturing expenses, employee compensation, depreciation and amortization, freight services, other costs of sales expenses, and other selling, general and administrative expenses.

Additionally, operating expenses includes intangible asset impairment recognized in the Renewables and Agtech reportable segments during the year ended December 31, 2024 and intangible asset impairment in Agtech reportable segment during year ended December 31, 2023.

There was no intangible asset impairment recognized during the year ended December 31, 2022.

The Company’s CODM consisted of the Company’s chief executive officer during the years ended December 31, 2024, 2023 and 2022.

For the Company’s reportable segments, the CODM uses segment income (loss) from operations before interest and income taxes to assess segment performance and allocate resources (including employees, property, and capital resources) for each segment mainly in the annual budget and forecasting process.

The CODM considers forecast-to-actual variances on a monthly basis using the income (loss) from operation before

interest and taxes for each segment when making decisions about allocating capital and personnel to the segments.

The CODM also uses income (loss) from operations before interest and income taxes, along with net sales, to assess the performance for each segment by comparing the results of each segment with one another and in the compensation of certain employees.

The following tables are the reported segment’s and unallocated corporate reported depreciation and amortization, and capital expenditures for the years ended December 31 (in thousands):

2024 2023 2022

Renewables $ 330,738 $ 377,567 $ 432,096

Depreciation and Amortization

Residential $ 10,416 $ 10,080 $ 8,983

Agtech 144,967 168,868 199,161

Infrastructure 87,228 76,283 73,021

Total consolidated net sales $ 1,377,736 $ 1,389,966 $ 1,339,783

Income from operations:

Renewables 8,192 8,671 8,467

Residential 143,068 126,458 105,821

Agtech 3,165 3,789 4,377

Infrastructure 2,972 3,137 3,150

Segments income from operations 190,829 163,618 133,959

Unallocated corporate expenses 2,567 1,701 1,190

Total income from operations $ 150,729 $ 130,102 $ 96,988

Depreciation and Amortization

Renewables $ 8,671 $ 8,467 $ 14,682

Total depreciation and amortization $ 27,312 $ 27,378 $ 26,167

Capital expenditures

Residential $ 10,508 $ 6,913 $ 10,050

Agtech 3,789 4,377 5,279

Infrastructure 3,137 3,150 3,092

Unallocated corporate expenses 1,701 1,190 219

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

2023 2022 2021

Renewables 3,101 1,113 3,589

Residential 515,739 519,567 453,469

Agtech 684 1,419 3,177

Infrastructure 1,152 1,313 1,898

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

Unallocated corporate expenditures 5,030 4,239 1,424

Total capital expenditures $ 20,475 $ 14,997 $ 20,138

The following table is the reported segment’s and unallocated corporate assets at December 31 (in thousands):

2024 2023 2022

Capital expenditures

Renewables $ 1,113 $ 3,589 $ 4,268

Residential $ 497,317 $ 515,739 $ 519,567

Renewables 390,881 377,694 392,368

Agtech 156,929 168,213 193,966

Infrastructure 78,366 77,518 80,264

Unallocated corporate expenditures 4,239 1,424 3,869

$ 14,997 $ 20,138 $ 17,705

The following tables illustrate revenue disaggregated by timing of transfer of control to the customer for the years ended December 31 (in thousands):

Renewables Residential Agtech Infrastructure Total

Unallocated corporate assets 295,917 117,287 24,448

Total assets $ 1,419,410 $ 1,256,451 $ 1,210,613

The following presents disaggregated revenue by timing of transfer of control to customers by reported segment for the years ended December 31 (in thousands):

Residential Renewables Agtech Infrastructure Total

Point in Time $ 775,541 $ 30,985 $ 2,862 $ 34,393 $ 843,781

Over Time 6,978 254,420 149,949 53,636 464,983

Total $ 330,738 $ 814,803 $ 144,967 $ 87,228 $ 1,377,736

Renewables Residential Agtech Infrastructure Total

Total net sales $ 782,519 $ 285,405 $ 152,811 $ 88,029 $ 1,308,764

Residential Renewables Agtech Infrastructure Total

Point in Time $ 808,225 $ 49,123 $ 4,920 $ 31,547 $ 893,815

Over Time 6,578 281,615 140,047 55,681 483,921

Total $ 377,567 $ 767,248 $ 168,868 $ 76,283 $ 1,389,966

Renewables Residential Agtech Infrastructure Total

Total net sales $ 814,803 $ 330,738 $ 144,967 $ 87,228 $ 1,377,736

Residential Renewables Agtech Infrastructure Total

Point in Time $ 761,576 $ 27,317 $ 13,011 $ 32,983 $ 834,887

Over Time 5,672 350,250 155,857 43,300 555,079

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

Total net sales $ 767,248 $ 377,567 $ 168,868 $ 76,283 $ 1,389,966

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):

2 unchanged sentences

Asia — 11,724 16,059

Total $ 1,377,736 $ 1,389,966 $ 1,339,783

Total net sales $ 1,308,764 $ 1,377,736 $ 1,389,966

Long-lived assets

1 unchanged sentence

Asia 70 59 234

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

Total long-lived assets $ 156,777 $ 154,837 $ 136,787

(17) SUBSEQUENT EVENT

On February 11, 2025, the Company purchased all the outstanding stock of Lane Supply, Inc., a privately held company that designs, manufactures and installs structural canopies serving the convenience store, travel center, food retail, and quick serve restaurant markets, for $ 120 million in an all cash transaction, subject to customary working capital and other adjustments, and for which the preliminary purchase price allocation has not yet been determined.

Lane Supply, Inc.

will be reported as part of the Company's Agtech segment.

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