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Item 7. Management’s Discussion and Analysis

2026-02-26 compared with 2025-02-19 · 123 added, 112 removed, 60 unchanged (80% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the Company’s risk factors and its consolidated financial statements and notes thereto included in Item 1A and Item 8, respectively, of this Annual Report on Form 10-K.

included in Item 1A and Item 8, respectively, of this Annual Report on Form 10-K.

Certain information set forth in this Item 7 constitutes “forward-looking statements” as that term is used in the Private Securities Litigation Reform Act of 1995.

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Company Overview

The Company is a leading manufacturer and provider of products and services for the residential, renewable energy, agtech, and infrastructure markets.

The Company operates and reports its results in the following four reporting segments:

• Residential

• Infrastructure

The Company serves customers primarily in North America including home improvement retailers, wholesalers, distributors, contractors, renewable energy (solar) developers, institutional and commercial growers of fruits, vegetables, flowers and other plants.

The Company is a leading manufacturer and provider of products and services for the residential, agtech, and infrastructure markets, and it operates and reports its results through three reporting segments:

Residential, Agtech, and Infrastructure.

The Company serves customers primarily in the U.S.

and Canada including home improvement retailers, wholesalers, distributors, contractors, institutional and commercial growers of fruits, vegetables, flowers and other plants.

The Company's operational infrastructure provides the necessary scale to support local, regional, and national customers in each of its markets.

On February 2, 2026, Gibraltar completed the acquisition of OmniMax, a leading U.S.- and Canada-based manufacturer and provider of residential roofing accessories and rainwater management systems.

The Company believes that the addition of OmniMax's complementary brands, product portfolio and geographic footprint accelerates the Company's presence in its largest and most profitable business segment, creates a more optimal operating platform to serve customers and partner with suppliers, and opens new opportunities for growth with new and existing customers across the U.S.

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

The Company anticipates that, following the acquisition of OmniMax, the Residential segment will represent over 80% of the Company's total revenue with the Company being primarily focused on the residential market.

Demand for products and services in the segments and end markets the Company's businesses serve are subject to economic conditions that are influenced by various factors.

These factors include but are not limited to changes in general economic conditions, interest rates, exchange rates, commodity costs, federal subsidies for renewable energy projects, supply limitations that impact the availability of solar modules and therefore solar racking installations, demand for residential construction, demand for repair and remodeling, governmental policies and funding, tax policies and incentives, tariffs, trade policies, weather patterns, the level of non-residential construction and infrastructure projects, demand for renewable energy sources, and climate change.

These factors include but are not limited to changes in general economic conditions, interest rates, exchange rates, commodity costs, demand for residential construction, demand for repair and remodeling, governmental policies and funding, tax policies and incentives, tariffs, trade policies, weather patterns, the level of non-residential construction and infrastructure projects.

The Company believes the key elements of its strategy outlined in Item 1.

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Operating Performance Measures

The Company uses certain operating performance measures, specifically consolidated gross margin, operating margin by segment and consolidated operating margin, to manage its businesses, set operational goals, and establish performance targets for incentive compensation for its employees.

The Company defines consolidated gross margin as a percentage of total consolidated gross profit to total consolidated net sales.

The Company defines operating margin by segment as a percentage of total income from operations by segment to total net sales by segment and consolidated operating margin as a percentage of total consolidated income from operations to total consolidated net sales.

The Company believes gross margin and operating margin may be useful to investors in evaluating the profitability of its segments and the Company on a consolidated basis.

The Company uses consolidated net sales, consolidated gross margin, consolidated operating margin, and operating margin by segment as key operating performance measures.

Management uses these measures to evaluate operating performance, manage its business, set operational goals, and establish performance targets for incentive compensation for its employees.

The Company defines consolidated gross margin as consolidated gross profit divided by consolidated net sales.

Consolidated operating margin is defined as income from continuing operations divided by consolidated net sales.

Operating margin by segment is defined as income from operations for each segment divided by net sales for that segment.

The Company believes that consolidated gross margin and consolidated operating margin may be useful to investors in evaluating the profitability of the Company on a consolidated basis, while operating margin by segment may be useful in evaluating the profitability of each of its segments.

Results of Operations

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Income from operations 122,751 10.8 % 139,674 13.6 %

Interest (income) expense (6,171) (0.5) % 3,002 0.2 %

Interest income (1,747) (0.1) % (6,171) (0.6) %

Other income (2,078) (0.2) % (25,142) (2.5) %

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Provision for income taxes 29,020 2.5 % 35,943 3.5 %

Net income $ 137,340 10.5 % $ 110,533 8.0 %

Income from continuing operations 97,556 8.6 % 135,044 13.2 %

(Loss) income from discontinued operations (141,944) (12.5) % 2,296 0.2 %

Net (loss) income $ (44,388) (3.9) % $ 137,340 13.4 %

The following table sets forth the Company’s net sales by reportable segment for the years ended December 31 (in thousands):

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Residential $ 824,079 $ 782,519 $ 41,560 $ 65,264 $ (10,379) $ (13,325)

Renewables 285,405 330,738 (45,333) — (11,724) (33,609)

Agtech 219,301 152,811 66,490 106,236 — (39,746)

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Consolidated $ 1,135,501 $ 1,023,359 $ 112,142 $ 171,500 $ (10,379) $ (48,979)

Consolidated net sales decreased from 2023 by $69.0 million, or 5.0%, to $1.3 billion for 2024 compared to 2023.

The decrease in revenue was the combined result of volume decline in the Company's Residential and Renewables segments along with portfolio management activities in the prior year, the 2023 sale of the Company's Japan-based solar racking business in the Renewables segment and the prior year liquidation of the processing business in the Agtech segment.

The decrease was partially offset by growth in the Company's Agtech segment along with revenues generated from a 2023 acquisition in the Residential segment.

Consolidated backlog decreased 24% to $252 million down from $330 million at the end of the prior year.

Net sales in the Residential segment decreased 4.0%, or $32.3 million, to $782.5 million in 2024 compared to $814.8 million in 2023.

Organic decline of 4.4% was driven by a slower residential market, including the repair and remodel sector.

T his decrease was partially offset by recent participation gains with existing and new customers along with $3.5 million of sales generated by the recent acquisition.

Net sales in the Renewables segment decreased by 13.7%, or $45.3 million, to $285.4 million in 2024 compared to $330.7 million in 2023.

The decrease was driven by trade and regulatory headwinds associated with the two independent AD/CVD investigations which compelled the industry to significantly focus on completing panel installations and administrative reporting requirements ahead of the December 3, 2024 expiration of the tariff moratorium on panels granted through the two-year Presidential Proclamation from June 2022, along with the aforementioned portfolio management actions and other industry headwinds.

Order backlog decreased 32% from the prior year as a result of these challenges.

Consolidated net sales increased from 2024 by $112.1 million, or 11.0%, to $1.1 billion for 2025 compared to 2024.

The increase in revenue was driven by $171.5 million of net sales generated from the current year acquisitions along with an increase in volume in the Infrastructure segment and participation gains in the residential building accessories business.

This increase was partially offset by delayed project starts in the Agtech segment, along with softness in the residential mail and package business.

Consolidated backlog increased 102% to $281 million, as compared to the end of the prior year.

Net sales in the Residential segment increased 5.3%, or $41.6 million, to $824.1 million in 2025 compared to $782.5 million in 2024.

The revenue of $65.3 million generated from the current year acquisitions of the three metal roofing manufacturers, along with participation gains from local market expansion in the building accessories business more than offset continued slowness in the mail and package product sales, which are driven mainly by new construction starts.

Portfolio management activities in the prior year, related to the sale of the Company's residential electronic locker business, also partially offset the increase.

Net sales in the Agtech segment increased 43.5%, or $66.5 million, to $219.3 million in 2025 compared to $152.8 million in 2024.

The revenue increase was primarily driven by projects accelerating in our produce division, partially offset by $4.1 million of revenues recorded in the prior year related to the aforementioned portfolio management actions.

Although backlog decreased 23% year over year in this segment, the Company anticipates the addition of new projects in both the produce and commercial markets as the Company completes design work and finalize products for launch.

The revenue increase was largely due to $106.2 million generated from the current year acquisition of Lane Supply, which more than offset the decrease in organic sales, due in part to timing shifts in large new project starts.

Backlog increased 239% year over year in this segment, including organic backlog growth of 187%.

Net sales in the Infrastructure segment increased 4.7%, or $4.1 million, to $92.1 million in 2025 compared to $88.0 million in 2024, the result of continued strong execution.

Backlog increased 10% year over year.

Demand and quoting remain strong, supported by continued investment at the federal and state levels.

The Company's consolidated gross margin increased to 26.9% for 2024 compared to 26.3% for 2023.

This increase was the result of improved price to material cost alignment, continued operational efficiencies, along with 80/20 initiatives and favorable business and product mix.

Selling, general, and administrative ("SG&A") expenses decreased by $9.9 million, or 4.8%, to $197.5 million for 2024 from $207.4 million for 2023.

The $9.9 million decrease was the result of lower performance-based compensation expense and sales commissions compared to the prior year along with a recovery on a receivable written down in 2023 associated with a distressed cannabis customer.

SG&A expenses as a percentage of net sales was unchanged at 15.1% for both 2024 and 2023, respectively.

The Company recognized intangible asset impairment charges of $11.3 million in 2024 due to rebranding initiatives resulting in the discontinuation of indefinite-lived trademarks in the Agtech and Renewables segments of $6.0 million and $5.3 million, respectively.

During 2023, the Company recognized intangible asset impairment charges of $3.8 million.

The impairment was largely the result of a rebranding initiative that resulted in the discontinuation of an indefinite-lived trademark of $3.2 million in the Agtech segment, and to a lesser extent, the write-off of amortizing intangibles for $0.6 million related to a discontinued product line in the Renewables segment.

Backlog decreased 4% from the prior year, though demand and quoting activity remain strong.

The Company's consolidated gross margin decreased to 26.9% for 2025 compared to 29.5% for 2024.

The decrease was driven by business and product line mix, partially offset by overall continued operational efficiencies along with 80/20 initiatives.

Selling, general, and administrative ("SG&A") expenses increased by $26.7 million, or 17.1%, to $182.4 million for 2025 from $155.7 million for 2024.

The $26.7 million increase was the result of incremental SG&A expense related to the businesses acquired in 2025, higher acquisition-related expenses, partially offset by lower performance-based compensation expense compared to the prior year.

SG&A expense as a percentage of net sales increased to 16.1% for 2025 compared to 15.3% for 2024.

The Company recognized intangible asset impairment charges of $6.0 million in 2024 due to rebranding initiatives resulting in the discontinuation of an indefinite-lived trademark in the Agtech segment.

The following table sets forth the Company’s income from operations and income from operations as a percentage of net sales by reportable segment for the years ended December 31 (in thousands):

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Residential $ 137,195 16.6 % $ 148,784 19.0 % $ (11,589)

Renewables 3,349 1.2 % 30,160 9.1 % (26,811)

Agtech 9,804 4.5 % 11,040 7.2 % (1,236)

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Consolidated income from operations $ 122,751 10.8 % $ 139,674 13.6 % $ (16,923)

The Residential segment operating margin increased to 19.0% in 2024 from 17.6% in 2023.

The increase in operating margin was driven by effective price/cost management, solid execution and 80/20 productivity initiatives.

The Renewables segment generated an operating margin of 1.2% in 2024 compared to 9.1% in 2023.

The decrease in operating margin was impacted by lower volume resulting from the aforementioned trade and regulatory challenges in this segment along with product line mix associated with the launch and learning curve of the new tracker product line in the current year.

Furthermore, margin was impacted by restructuring activities related to addressing customer issues arising from discontinued solar tracker solutions and the indefinite-lived trademark impairment charge recorded in the current year.

The Residential segment operating margin decreased to 16.6% in 2025 from 19.0% in 2024.

The decrease in operating margin was the result of business and product mix and the impact of acquisition integration during the current year.

The Agtech segment generated an operating margin of 4.5% in 2025 compared to 7.2% in 2024.

The year over year improvement in operating margin was due to the result of volume leverage, product mix shift and improved execution along with the recovery on a receivable written down in 2023 associated with a distressed cannabis customer and the impact of prior year portfolio management actions.

The Infrastructure segment operating margin increased to 24.2% in 2024 compared to 21.2% in 2023.

The margin improvement was driven by favorable product line mix, 80/20 productivity initiatives and strong operating execution.

The year over year decline in operating margin was due to costs related to the acquisition of Lane Supply and the impact of lower organic volumes.

The Infrastructure segment operating margin decreased to 23.9% in 2025 compared to 24.2% in 2024.

The decrease in operating margin was a result of product line mix.

Unallocated corporate expenses increased $4.8 million, or 11.7%, to $46.3 million in 2025 from $41.4 million for 2024.

The Company recorded interest income of $6.2 million for 2024, compared to interest expense of $3.0 million for 2023.

Income in the current year was the result of earnings on certain interest-bearing cash accounts.

Expense in the prior year was the result of outstanding balances on the Company's revolving credit facility during 2023, while no amounts were outstanding during 2024.

The increase was largely the result of higher acquisition-related expense partially offset by lower performance-based compensation expense as compared to the prior year.

The Company recorded interest income of $1.7 million for 2025, compared to $6.2 million for 2024.

The decrease in interest income during the current year was the result of earnings on lower average balances on certain interest-bearing cash accounts as compared to the prior year.

The Company recorded other income of $2.1 million in 2025, compared to $25.1 million in 2024.

The current year income is primarily the result of a $25.3 million gain related to the sale of the Company's electronic locker business within its Residential segment.

In 2023, the income is the combined result of foreign currency translation fluctuations and changes in the fair market valuation allowance related to the liquidation of the processing business, offset by a $0.6 million pre-tax net loss relating to the sale of the Company's Japan-based solar racking business within its Renewables segment.

The Company recognized a provision for income taxes of $36.6 million, an effective tax rate of 21.0%, for 2024 compared with a provision for income taxes of $38.5 million, an effective tax rate of 25.8%, for 2023.

The effective tax rate for 2024 was equal to the U.S.

federal statutory rate of 21% due to state taxes and nondeductible permanent differences offset by a partial release of the valuation allowance previously recorded on a capital loss carryforward that can be utilized due to the 2024 sale of the Company's electronic locker business within its Residential segment.

The effective tax rate for 2023 exceeded the U.S.

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

The prior year income is primarily the result of a $25.3 million gain related to the sale of the Company's electronic locker business within its Residential segment.

The Company recognized a provision for income taxes of $29.0 million, an effective tax rate of 22.9%, for 2025, which exceeded the U.S.

federal statutory rate of 21%, the result of state taxes and nondeductible permanent differences partially offset by the impact of energy-related tax credits purchased.

For 2024, the Company recognized a provision for income taxes of $35.9 million, an effective tax rate of 21.0%.

The effective tax rate was equal to the U.S.

federal statutory rate of 21%, the result of state taxes and nondeductible permanent differences offset by a partial release of the valuation allowance previously recorded on a capital loss carryfoward that can be utilized due to the 2024 sale of the Company's electronic locker business within its Residential segment.

Liquidity and Capital Resources

The following table sets forth the Company's liquidity position as of (in thousands):

December 31, 2024 December 31, 2023

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

Availability on revolving credit facility 395,069 396,056

$ 664,549 $ 495,482

Sources of Liquidity

The Company's primary sources of liquidity are comprised of cash on hand and available borrowing capacity provided under the Company's Credit Agreement.

The Credit Agreement provides for a revolving credit facility and letters of credit in an aggregate amount equal to $400 million and terminates on December 8, 2027.

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.

See Note 8 to the Company's consolidated financial statements in Part II, Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for further information on the Company’s Credit Agreement.

Generally, the Company's foreign operations have generated cash flow from operations sufficient to invest in working capital and fund their capital improvements.

As of December 31, 2024 and 2023, the Company's foreign subsidiaries held $8.9 million and $6.9 million of cash, respectively.

The Company believes that these sources, together with cash expected to be generated from operations, should provide the Company with ample liquidity and capital resources to meet both its short-term and long-term cash requirements and to continue to invest in operational excellence, growth initiatives and the development of the organization.

The Company has historically financed its working capital requirements, including capital expenditures and acquisitions, through a combination of available cash, cash flows from operations, and borrowings under the Company's 2022 Credit Agreement.

As disclosed above, on February 2, 2026, the Company entered into a new Credit Agreement that provides for a senior secured revolving credit facility with an initial aggregate commitment of $500 million and letters of credit in an aggregate amount of up to $100 million.

The new Revolving Credit Facility matures on February 2, 2031.

The Company expects that its primary cash requirements over the next twelve months will include working capital, capital expenditures, and debt service requirements.

The Company believes that cash flows from operations, together with available cash on hand and borrowing capacity under the new Revolving Credit Facility—which had approximately $482 million of availability as of February 2, 2026—will be sufficient to meet these short-term liquidity requirements.

The Company currently expects to continue generating positive operating cash flows during this period and does not anticipate needing to materially increase borrowings to fund its short-term obligations.

Beyond the next twelve months, the Company's liquidity needs will primarily consist of funding ongoing capital expenditures, debt service requirements, future debt maturities and potential strategic investments.

The Company expects to meet these long-term obligations through a combination of cash flows generated from operations and continued access to its Revolving Credit Facility.

The Company may also evaluate additional financing alternatives, as appropriate, as appropriate, to support its long-term growth initiatives or refinance upcoming maturities.

Based on current projections and market conditions, the Company believes that its existing sources of liquidity will be adequate to satisfy its long-term cash requirements.

Historically the Company's international operations have generated cash flow from operations sufficient to fund their working capital needs and capital improvements.

As of December 31, 2025 and 2024, the Company's international subsidiaries held $4.4 million and $8.9 million of cash, respectively.

As disclosed below and in Note 18 to the Company's consolidated financial statements in Part II, Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K, the Company incurred significant indebtedness in connection with the acquisition of OmniMax.

This level of indebtedness could have important consequences for the Company's business, including the risks described in Item 1A.

"Risk Factors" - "Risks Related to the Company's Indebtedness."

Uses of Cash / Cash Requirements

The Company's material short-term cash requirements primarily include accounts payable, certain employee and retiree benefit-related obligations, operating lease obligations, capital expenditures, and other purchase obligations originating in the normal course of business for inventory purchase orders and contractual service agreements.

The Company's principal capital requirements are to fund its operations' working capital and capital improvements, as well as provide capital for acquisitions and to strategically allocate capital through repurchases of Company stock under the Company's current authorized program ending May 2, 2025.

The Company will continue to invest in growth opportunities as appropriate while focusing on working capital efficiency and profit improvement opportunities to minimize the cash invested to operate its business.

The Company's material short-term cash requirements primarily include accounts payable, purchases of tax credits, certain employee and retiree benefit-related obligations, operating lease obligations, capital expenditures, and other purchase obligations originating in the normal course of business for inventory purchase orders and contractual service agreements.

See Notes 7, 9, 14 and 16 to the Company's consolidated financial statements in Part II, Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for further detail on the Company's accrued expenses, employee and retiree benefit-related obligations, operating lease obligations and historical capital expenditures .

Over the long-term, the Company expects that future investments, including strategic business acquisitions, may be financed through a number of sources, including internally available cash, availability under the Credit Agreement, new debt financing, the issuance of equity securities, or any combination of the aforementioned.

These expectations are forward-looking statements based upon currently available information and may change if conditions in the credit and equity markets deteriorate or other circumstances change.

To the extent that operating cash flows are lower than current levels, or sources of financing are not available or not available at acceptable terms, the Company's future liquidity may be adversely affected.

"Risk Factors - Risks Related to Financing and Accounting Matters - Increases in future levels of leverage and size of debt service obligations could adversely affect the Company's ability to raise additional capital to fund the Company's operations, limit the Company's ability to react to changes in the economy or the Company's industries and prevent the Company from meeting the Company's obligations."

Credit Agreement

To further support liquidity, and in connection with closing of the acquisition of OmniMax on February 2, 2026 (the "Closing Date"), the Company entered into a new Revolving Credit Facility, as described above, and new senior secured term loan facilities in an aggregate principal amount of $1.3 billion, consisting of the Term Loan A facility in an initial aggregate principal amount of $650 million and the Term Loan B facility in an initial aggregate principal amount of $650 million.

Proceeds from the term loans, together with borrowings under the revolving credit facility and cash on hand, were used to fund the acquisition of OmniMax and pay related transaction fees and expenses.

The Revolving Credit Facility and the Term Loan A Facility will mature on the fifth anniversary of the Closing Date, and the Term Loan B Facility will mature on the seventh anniversary of the Closing Date.

The Term Loan A Facility requires quarterly amortization payments of 2.50% per annum for the first two years, 5.00% per annum for the next two years and 7.50% per annum for the final year, in each case of the original principal amount thereof.

The Term Loan B Facility requires quarterly amortization payments of 1.00% per annum of the original principal amount thereof.

The Credit Agreement also requires mandatory prepayments in connection with certain asset sales and excess cash flow, subject to certain exceptions.

Borrowings under the senior secured credit facilities bear interest, at the Company’s option, at an annual rate equal to (a) adjusted term SOFR, defined in a customary manner (“Term SOFR”) or (b) the base rate (the “Base Rate”) plus in each case an applicable rate.

For the Term Loan A Facility and the Revolving Credit Facility, the applicable rate under the Credit Agreement ranges from 1.375% to 2.25% for Term SOFR loans and 0.375% to 1.25% for Base Rate loans, in each case based on the Company’s consolidated first lien net leverage ratio.

For the Term Loan B Facility, the applicable rate under the Credit Agreement ranges from 1.75% to 2.25% for Term SOFR loans and 0.75% to 1.25% for Base Rate loans, in each case based on the Company’s consolidated first lien net leverage ratio.

Undrawn commitment fees under the Revolving Credit Facility range from 0.175% to 0.275% based on the Company’s consolidated net leverage ratio.

The Credit Agreement contains financial covenants requiring the Company to maintain a maximum consolidated total net leverage ratio of 5.25:1.00, which steps down to 4.25:1.00 over time, and a minimum interest coverage ratio of 3.00:1.00, in each case measured as of the last day of each fiscal quarter, with measurement to commence on the last day of the first full fiscal quarter after the Closing Date.

The maximum consolidated total net leverage ratio may be increased at the Company’s option by 0.50x in connection with certain qualifying material acquisitions.

The Credit Agreement contains certain affirmative and negative covenants that limit the ability of the Company, among other things and subject to certain significant exceptions, to incur debt or liens, make investments, enter into certain mergers, consolidations, asset sales and acquisitions, pay dividends and make other restricted payments and enter into transactions with affiliates.

Additionally, the Credit Agreement contains certain events of default, including relating to a change of control.

If an event of default occurs, the lenders under the Credit Agreement will be entitled to take various actions, including the acceleration of amounts due under the Credit Agreement.

Authorized Share Repurchase Program

In April 2025, the Company's Board of Directors authorized a share repurchase program of up to $200 million of the Company's issued and outstanding common stock.

As of December 31, 2025, the Company has not purchased any shares under this authorized program.

The program has a duration of three years and is scheduled to expire on April 30, 2028.

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

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

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

The following table sets forth selected cash flow data for the years ended December 31 (in thousands):

Cash provided by (used in):

Operating activities $ 174,264 $ 218,476

Investing activities 8,544 (15,722)

Net cash provided by (used in):

Operating activities of continuing operations $ 137,107 $ 169,890

Investing activities of continuing operations (256,428) 11,272

Financing activities (63,673) (12,189)

Discontinued operations 28,922 1,646

Effect of exchange rate changes 316 (565)

Net increase in cash and cash equivalents $ 170,054 $ 81,818

Operating Activities

Net cash provided by operating activities for 2024 of $174.2 million consisted of net income of $137.3 million, non-cash net charges totaling $29.7 million, which include depreciation, amortization, intangible asset impairment, stock compensation, gain on sale of business, exit activity costs, benefit of deferred income taxes and other non-cash charges, and $7.2 million of cash generated from working capital and other net operating assets largely due increases in accounts payable, the result of the timing of purchases and vendor payments, and other current assets, the result of the timing of income taxes payments and other receivables incurred.

Net cash provided by operating activities for 2023 of $218.5 million consisted of net income of $110.5 million, non-cash net charges totaling $67.0 million, which include depreciation, amortization, intangible asset impairment, stock

compensation, exit activity costs, provision for deferred income taxes and other non-cash charges, and $41.0 million of cash generated from working capital and other net operating assets largely due to the Company's focus on reducing its investment in inventory to better align with lower sales volumes while still meeting customer demand.

Investing Activities

Net cash provided by investing activities for 2024 of $8.5 million consisted of net proceeds of $28.1 million from the sale of the Company's electronic locker business within its Residential segment in the fourth quarter of 2024 and receipt of the $0.3 million final working capital settlement resulting from the sale of the Company's Japan-based solar racking business in the Company's Renewables segment in the fourth quarter of 2023, offset by net capital expenditures of $19.9 million.

Net cash used in investing activities for 2023 of $15.7 million consisted of net cash paid of $10.4 million for the acquisition of a privately held Utah-based company in the third quarter of 2023 and net capital expenditures of $13.9 million, offset by net proceeds of $8.0 million from the sale of the Company's Japan-based solar racking business in the Company's Renewables segment in the fourth quarter of 2023 and receipt of the $0.6 million final working capital settlement related to the 2022 acquisition of QAP.

Net (decrease) increase in cash and cash equivalents $ (153,756) $ 170,054

Operating Activities of Continuing Operations

Net cash provided by operating activities of continuing operations for 2025 of $137.1 million consisted of income from continuing operations of $97.6 million, non-cash net charges totaling $38.6 million, which include depreciation, amortization, stock compensation, benefit of deferred income taxes and other non-cash charges, and $0.9 million of cash generated from working capital and other net operating assets, and net of effects from acquisitions, driven by the decreases in trade receivables as a result of timing of customer collections and increases in accrued expenses related to the timing and volume of advance billings and timing of other expense accruals.

Net cash provided by operating activities of continuing operations for 2024 of $169.9 million consisted of income from continuing operations of $135.1 million, non-cash net charges totaling $14.0 million, which include depreciation, amortization, intangible asset impairment, stock compensation, gain on sale of business, benefit of

deferred income taxes and other non-cash charges, and $20.8 million of cash generated from working capital and other net operating assets largely due to increases in accounts payable as a result of timing of purchases and vendor payments.

Investing Activities of Continuing Operations

Net cash used in investing activities of continuing operations for 2025 was $256.4 million, primarily due to the acquisitions of Lane Supply and the three metal roofing related businesses of $210.6 million, and net capital expenditures of $46.1 million largely related to the purchases of two facilities.

These investments were partially offset by a receipt of the $0.3 million final working capital settlement received in connection with the sale of the Company's electronic locker business within the Company's Residential segment in the fourth quarter of 2024.

Net cash provided by investing activities of continuing operations for 2024 of $11.3 million consisted of net proceeds of $28.1 million from the sale of the Company's electronic locker business within its Residential segment in the fourth quarter of 2024, offset by net capital expenditures of $16.8 million.

Financing Activities

Net cash used in financing activities for 2024 of $12.2 million consisted of common stock repurchases.

The Company paid $10.0 million in the current year for the repurchase of 154,796 shares under the Company's authorized share repurchase program.

The remainder of the repurchased common stock of $2.2 million related to the net settlement of tax obligations for participants in the Company's equity incentive plans and excise taxes on stock repurchases.

Net cash used in financing activities for 2023 of $120.3 million consisted of net long-term debt payments of $91.0 million and $29.3 million of common stock repurchases.

Net long-term debt payments consisted of $141.0 million in long-term debt payments, offset by $50.0 million in proceeds from borrowing on the Company's long-term debt credit facility.

The Company paid $26.0 million in 2023 to repurchase of 538,575 shares under the Company's authorized share repurchase program.

The remainder of the repurchased common stock of $3.3 million related to the net settlement of tax obligations for participants in the Company's equity incentive plans.

Net cash used in financing activities totaled $63.7 million for 2025 primarily driven by common stock repurchases.

The Company repurchased 914,679 shares for $60.0 million under the Company's prior authorized share repurchase program that ended May 2, 2025.

An additional $3.9 million related to the net settlement of tax obligations for participants in the Company's equity incentive plans.

These outflows were slightly offset by $0.2 million in proceeds from the issuance of common stock resulting from stock option exercises.

Net cash used in financing activities totaled $12.2 million for 2024 driven by common stock repurchases.

The Company repurchased 154,796 shares for $10.0 million under the Company's authorized share repurchase program that ended May 2, 2025.

An additional $2.2 million was used to repurchase common stock related to the net settlement of tax obligations for participants in the Company's equity incentive plans.

Critical Accounting Estimates

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Management believes these estimates are reasonable, but actual results could differ from these estimates.

Revenue Recognition on Contracts with Customers

The vast majority of the Company's sales contracts are for standard products with revenue recognized at the point in time the Company transfers control to the customer.

The point in time the Company transfers control is based on when the Company determines the customer has legal title, significant risks and rewards of ownership of the asset, and the Company has a present right to payment for the product.

However, revenue representing approximately 36%, 35% and 40% of the Company's 2024, 2023 and 2022 consolidated net sales, respectively, was recognized over time under the cost-to-cost method as the Company satisfied its performance obligations.

This method of revenue recognition pertains to activities within the Renewables, Agtech, and Infrastructure segments.

Revenue recognized on contracts over time using the cost-to-cost method for measuring progress is recognized as work progresses toward completion based on the ratio of cumulative costs incurred to date to estimated total contract costs at completion.

Revenues are recognized proportionally as costs are incurred under this method.

Contract costs include all direct costs related to contract performance and factors inherent in the estimation process include direct labor hours, direct material costs, and other direct costs.

The estimates of total costs to be incurred at completion of each contract are sensitive to significant judgments and assumptions, such as the expected costs to complete installation, which are affected by customer site-specific conditions as well as availability and cost of third-party contractors to complete the installation process.

These estimates impact the timing and amount of net sales recognized on in-progress performance obligations with customers.

The Company on a regular basis reviews its estimates and the progress and performance of the performance obligation for substantially all contracts that the Company recognizes revenue over time under the cost-to-cost method.

Any adjustments or changes in these estimates affecting revenues are recognized in the period in which the change becomes known using the cumulative catch-up method of accounting, resulting in the cumulative effect of changes reflected in the period.

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

A significant change in an estimate on one or more contracts could have a material effect on the Company's results of operations.

The following table summarizes the impact of the changes in contract estimates on net sales and the estimated contract losses recognized in the Company's operating results during the years ended December 31 (in millions):

2024 2023 2022

Gross favorable effect of the changes in contract estimates on net sales $ 9.6 $ 13.2 $ 4.5

Gross unfavorable effect of the changes in contract estimates on net sales (6.0) (7.5) (13.7)

Net favorable (unfavorable) effect of the change in contract estimates on sales $ 3.6 $ 5.7 $ (9.2)

Estimated contract losses recognized $ 9.4 $ 5.8 $ 9.1

Accounting for the Fair Value of Assets Acquired in a Significant Business Combination

When the Company acquires a business, it allocates the purchase price to the identified assets acquired and liabilities assumed in the transaction based on their respective estimated fair values as of the acquisition date.

Any excess of the purchase price over the fair value of the net assets acquired is recorded as goodwill.

The determination of fair value requires significant management judgment and involves the use of estimates and assumptions that are inherently subjective.

The purchase price allocation process requires judgment in both identifying and characterizing the acquired assets and liabilities and in estimating their respective fair values.

These judgments are significant because acquired assets with finite lives, such as certain identified intangible assets, are amortized over their estimated useful lives, whereas goodwill is not amortized but is subject to annual impairment testing, or more frequently if indicators of impairment arise.

The most subjective estimates in determining the fair value of assets acquired in a significant business combination relate to the valuation of long‑lived assets, particularly identified intangible assets.

Management uses all available information to estimate fair values and engages independent valuation specialists to assist in valuing identified

intangible assets.

The fair values of these intangible assets are primarily determined using income‑based valuation techniques, including the multi‑period excess earnings method for customer relationships and backlog and the relief‑from‑royalty method for trademarks.

Significant assumptions used in these valuation models include discount rates, customer attrition rates, projected revenue growth rates, operating profit margins, adjusted for non-cash items such as depreciation and amortization.

These assumptions are forward‑looking and reflect management’s expectations regarding future economic and market conditions.

Actual results may differ from these estimates, and changes in key assumptions could result in material differences in the estimated fair values of the acquired assets, which could impact future amortization expense and the amount of goodwill recorded or subsequently assessed for impairment.

Recent Accounting Pronouncements

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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 7. Management’s Discussion and Analysis