GIBRALTAR INDUSTRIES, INC. [ROCK] Filings

10-Q 1 rock-20240630.htm 10-Q rock-20240630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


(Mark One)
☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 000-22462

GIBRALTAR INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)

Delaware

16-1445150

(State or Other Jurisdiction of Incorporation or Organization)

(I.R.S. Employer Identification No.)

3556 Lake Shore Road

P.O. Box 2028

Buffalo

New York

14219-0228

(Address of principal executive offices)

(Zip Code)

(716) 826-6500

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, $0.01 par value per share

ROCK

NASDAQ Stock Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicated by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July 29, 2024, the number of shares of common stock outstanding was: 30,479,037.

Table of Contents

GIBRALTAR INDUSTRIES, INC.

INDEX


		PAGE NUMBER
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Statements of Income for the Three and Six Months Ended Ju ne 30 , 2024 and 2023 (unaudited)	3
	Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30 , 2024 and 2023 (unaudited)	4
	Consolidated Balance Sheets as of June 30 , 2024 (unaudited) and December 31, 2023	5
	Consolidated Statements of Cash Flows for the Six Months Ended June 30 , 2024 and 2023 (unaudited)	6
	Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended June 30 , 2024 and 2023 (unaudited)	7
	Notes to Consolidated Financial Statements (unaudited)	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4.	Controls and Procedures	27
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	27
Item 1A.	Risk Factors	28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 3.	Defaults Upon Senior Securities	28
Item 4.	Mine Safety Disclosures	28
Item 5.	Other Information	28
Item 6.	Exhibits	29
	SIGNATURES	30

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

GIBRALTAR INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)

(unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Net sales	$	353,005	$	364,914	$	645,511	$	658,181
Cost of sales	257,132		268,175		465,250		484,513
Gross profit	95,873		96,739		180,261		173,668
Selling, general, and administrative expense	53,404		53,662		106,056		101,221

Income from operations	42,469		43,077		74,205		72,447
Interest (income) expense	(1,495)		1,308		(2,245)		2,799
Other expense (income)	347		(509)		(674)		(906)
Income before taxes	43,617		42,278		77,124		70,554
Provision for income taxes	11,419		11,555		19,980		18,732





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











Net earnings per share:
Basic	$	1.05	$	1.01	$	1.87	$	1.69
Diluted	$	1.05	$	1.00	$	1.86	$	1.68
Weighted average shares outstanding:
Basic	30,588		30,554		30,580		30,725
Diluted	30,791		30,684		30,801		30,846

See accompanying notes to consolidated financial statements.

Table of Contents

GIBRALTAR INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

(unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Net income	$	32,198	$	30,723	$	57,144	$	51,822
Other comprehensive loss:
Foreign currency translation adjustment	(418)		(576)		(1,382)		(683)




Total comprehensive income	$	31,780	$	30,147	$	55,762	$	51,139

See accompanying notes to consolidated financial statements.

Table of Contents

GIBRALTAR INDUSTRIES, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)


	June 30, 2024		December 31, 2023
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	179,102	$	99,426
Accounts receivable, net of allowance of $5,563 and $5,572, respectively	259,358		224,550
Inventories, net	134,493		120,503
Prepaid expenses and other current assets	18,912		17,772

Total current assets	591,865		462,251
Property, plant, and equipment, net	108,314		107,603
Operating lease assets	41,134		44,918
Goodwill	511,590		513,383
Acquired intangibles	121,567		125,980
Other assets	2,471		2,316
	$	1,376,941	$	1,256,451
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	140,888	$	92,124
Accrued expenses	85,099		88,719
Billings in excess of cost	59,498		44,735



Total current liabilities	285,485		225,578

Deferred income taxes	57,110		57,103
Non-current operating lease liabilities	32,601		35,989
Other non-current liabilities	26,074		22,783
Stockholders’ equity:
Preferred stock, $0.01 par value; authorized 10,000 shares; none outstanding	—		—
Common stock, $0.01 par value; authorized 100,000 shares; 34,274 and 34,219 shares issued and outstanding in 2024 and 2023	343		342
Additional paid-in capital	338,978		332,621
Retained earnings	795,655		738,511
Accumulated other comprehensive loss	(3,496)		(2,114)
Cost of 3,797 and 3,778 common shares held in treasury in 2024 and 2023	(155,809)		(154,362)
Total stockholders’ equity	975,671		914,998
	$	1,376,941	$	1,256,451

See accompanying notes to consolidated financial statements.

Table of Contents

GIBRALTAR INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)


	Six Months Ended June 30,
	2024		2023
Cash Flows from Operating Activities
Net income	$	57,144	$	51,822


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

Depreciation and amortization	13,416		13,665
Stock compensation expense	6,358		5,056


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


Provision for deferred income taxes	—		179

Other, net	2,347		2,680

Changes in operating assets and liabilities net of effects from acquisitions:
Accounts receivable	(33,828)		(54,979)
Inventories	(13,794)		12,130
Other current assets and other assets	(3,791)		4,069
Accounts payable	48,518		48,327
Accrued expenses and other non-current liabilities	13,120		31,168


Net cash provided by operating activities	89,653		114,094
Cash Flows from Investing Activities
Purchases of property, plant, and equipment, net	(8,707)		(5,284)
Acquisitions, net of cash acquired	—		554
Net proceeds from sale of business	350		—




Net cash used in investing activities	(8,357)		(4,730)
Cash Flows from Financing Activities
Long-term debt payments	—		(120,000)
Proceeds from long-term debt	—		40,800


Purchase of common stock at market prices	(1,447)		(28,770)


Net cash used in financing activities	(1,447)		(107,970)
Effect of exchange rate changes on cash	(173)		(381)
Net increase in cash and cash equivalents	79,676		1,013
Cash and cash equivalents at beginning of year	99,426		17,608
Cash and cash equivalents at end of period	$	179,102	$	18,621

See accompanying notes to consolidated financial statements.

Table of Contents

GIBRALTAR INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands)

(unaudited)



	Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock			Total Stockholders’ Equity
	Shares	Amount								Shares	Amount
Balance at March 31, 2024	34,266	$	343	$	335,259	$	763,457	$	(3,078)	3,797	$	(155,796)	$	940,185
Net income	—	—		—		32,198		—		—	—		32,198
Foreign currency translation adjustment	—	—		—		—		(418)		—	—		(418)

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

Net settlement of restricted stock units	1	—		—		—		—		—	(13)		(13)
Awards of common stock	7	—		—		—		—		—	—		—



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





Balance at March 31, 2023	34,148	$	341	$	324,466	$	649,077	$	(3,539)	3,389	$	(134,958)	$	835,387
Net income	—	—		—		30,723		—		—	—		30,723
Foreign currency translation adjustment	—	—		—		—		(576)		—	—		(576)

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

Net settlement of restricted stock units	38	1		(1)		—		—		14	(874)		(874)
Awards of common stock	8	—		—		—		—		—	—		—

Common stock repurchased under stock repurchase program	—	—		—		—		—		367	(17,812)		(17,812)
Balance at June 30, 2023	34,194	$	342	$	327,927	$	679,800	$	(4,115)	3,770	$	(153,644)	$	850,310

See accompanying notes to consolidated financial statements.

Table of Contents

GIBRALTAR INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands)

(unaudited)


	Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock			Total Stockholders’ Equity
	Shares	Amount								Shares	Amount
Balance at December 31, 2023	34,219	$	342	$	332,621	$	738,511	$	(2,114)	3,778	$	(154,362)	$	914,998
Net income	—	—		—		57,144		—		—	—		57,144
Foreign currency translation adjustment	—	—		—		—		(1,382)		—	—		(1,382)

Stock compensation expense	—	—		6,358		—		—		—	—		6,358

Net settlement of restricted stock units	48	1		(1)		—		—		19	(1,447)		(1,447)
Awards of common stock	7	—		—		—		—		—	—		—



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




Balance at December 31, 2022	34,060	$	340	$	322,873	$	627,978	$	(3,432)	3,199	$	(125,660)	$	822,099
Net income	—	—		—		51,822		—		—	—		51,822
Foreign currency translation adjustment	—	—		—		—		(683)		—	—		(683)

Stock compensation expense	—	—		5,056		—		—		—	—		5,056

Net settlement of restricted stock units	126	2		(2)		—		—		50	(2,803)		(2,803)
Awards of common stock	8	—		—		—		—		—	—		—

Common stock repurchased under stock repurchase program	—	—		—		—		—		521	(25,181)		(25,181)
Balance at June 30, 2023	34,194	$	342	$	327,927	$	679,800	$	(4,115)	3,770	$	(153,644)	$	850,310

See accompanying notes to consolidated financial statements.

Table of Contents

GIBRALTAR INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(1) BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements of Gibraltar Industries, Inc. (the "Company") have been prepared by management in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for the fair presentation of results for the interim period have been included. The Company's operations are seasonal; for this and other reasons financial results for any interim period are not necessarily indicative of the results expected for any subsequent interim period or for the full year. The accompanying unaudited consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 2023.

The consolidated balance sheet at December 31, 2023 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements.

Recent Accounting Pronouncements

The Company evaluated all recent Accounting Standard Updates, 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. There have been no material changes from the recent accounting pronouncements previously disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

(2) ACCOUNTS RECEIVABLE, NET

Accounts receivable consisted of the following (in thousands):


	June 30, 2024		December 31, 2023
Trade accounts receivable	$	226,066	$	178,087
Costs in excess of billings	38,855		52,035
Total accounts receivable	264,921		230,122
Less allowance for doubtful accounts and contract assets	(5,563)		(5,572)
Accounts receivable, net	$	259,358	$	224,550

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

The following table provides a roll-forward of the allowance for credit losses, for the six month period ended June 30, 2024, that is deducted from the amortized cost basis of accounts receivable to present the net amount expected to be collected (in thousands):


Beginning balance as of January 1, 2024	$	5,572

Bad debt expense, net of recoveries	47
Accounts written off against allowance and other adjustments	(56)
Ending balance as of June 30, 2024	$	5,563

(3) REVENUE

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; gutter guards; designing, engineering, manufacturing and installation of solar racking systems; electrical balance of systems; designing, engineering, manufacturing and installation of greenhouses; structural bearings; expansion joints; pavement sealant; elastomeric concrete; and bridge cable protection systems.

Table of Contents

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

As of June 30, 2024, the Company's remaining performance obligations are part of contracts that have an original expected duration of one year or less.

Contract assets consist of costs in excess of billings presented within accounts receivable in the Company's consolidated balance sheets. Contract liabilities consist of billings in excess of cost, classified as current liabilities, and unearned revenue, presented within accrued expenses, in the Company's consolidated balance sheets. Unearned revenue as of June 30, 2024 and December 31, 2023 was $5.8 million and $3.9 million, respectively. The Company recognized revenue of $37.3 million and $33.7 million during the six months ended June 30, 2024 and 2023, respectively, that was included in the contract liabilities balance of $48.7 million and $39.6 million at December 31, 2023 and 2022, respectively.

(4) INVENTORIES, NET

Inventories consisted of the following (in thousands):


	June 30, 2024		December 31, 2023
Raw material	$	83,962	$	77,489
Work-in-process	10,521		9,508
Finished goods	46,119		42,942
Gross inventory	140,602		129,939
Less reserves	(6,109)		(9,436)
Total inventories, net	$	134,493	$	120,503

(5) ACQUISITION

On July 5, 2023, the Company acquired the assets of a privately held Utah-based company that manufactures and distributes roof flashing and accessory products, and sells direct to roofing wholesalers. The results of this company 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 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 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
Property, plant and equipment	195
Acquired intangible assets	6,310
Other assets	134
Other liabilities	(72)
Goodwill	3,023
Fair value of purchase consideration	$	10,417

Table of Contents

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


	Fair Value		Weighted-Average Amortization Period

Trademarks	$	250	3 years

Customer relationships	6,060		12 years
Total	$	6,310

In determining the allocation of the purchase price to the assets acquired and liabilities assumed, the Company uses all available information to make fair value determinations using Level 3 unobservable inputs in which little or no market data exists, and therefore, engages independent valuation specialists to assist in the fair value determination of the acquired long-lived assets.

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

(6) GOODWILL AND RELATED INTANGIBLE ASSETS

Goodwill

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


	Residential		Renewables		Agtech		Infrastructure		Total
Balance at December 31, 2023	$	213,576	$	184,230	$	83,899	$	31,678	$	513,383


Adjustments to prior year acquisitions	(1,110)		—		—		—		(1,110)
Foreign currency translation	—		—		(683)		—		(683)
Balance at June 30, 2024	$	212,466	$	184,230	$	83,216	$	31,678	$	511,590

Goodwill is recognized net of accumulated impairment losses of $133.2 million as of June 30, 2024 and December 31, 2023, respectively.

The Company is required to regularly assess whether a triggering event has occurred which would require interim impairment testing. The Company determined that no triggering event had occurred as of June 30, 2024 which would require an interim impairment test to be performed.

Acquired Intangible Assets

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


	June 30, 2024				December 31, 2023
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Indefinite-lived intangible assets:
Trademarks	$	52,300	$	—	$	52,300	$	—
Finite-lived intangible assets:
Trademarks	2,550		1,665		5,773		4,714
Unpatented technology	31,781		23,143		34,133		24,295
Customer relationships	100,993		41,397		110,649		48,088
Non-compete agreements	719		571		2,376		2,154

	136,043		66,776		152,931		79,251
Total acquired intangible assets	$	188,343	$	66,776	$	205,231	$	79,251

Table of Contents

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


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Amortization expense	$	2,639	$	2,760	$	5,357	$	5,526

Amortization expense related to acquired intangible assets for the remainder of fiscal 2024 and the next five years thereafter is estimated as follows (in thousands):


	2024		2025		2026		2027		2028		2029
Amortization expense	$	5,281	$	10,487	$	9,454	$	8,071	$	7,276	$	7,227

(7) LONG-TERM DEBT

The Company had no outstanding debt as of June 30, 2024 and December 31, 2023. Unamortized debt issuance costs, included in other assets on the consolidated balance sheets, as of June 30, 2024 and December 31, 2023 were $1.6 million and $1.7 million, respectively.

Revolving Credit Facility

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. The Credit Agreement contains two financial covenants. As of June 30, 2024, the Company was in compliance with all financial covenants. The Credit Agreement terminates on December 8, 2027.

Borrowings under the Credit Agreement bear interest, at the Company’s option, at a rate equal to the applicable margin plus (a) a base rate, (b) a daily simple secured overnight financing rate ("SOFR") rate, (c) a term SOFR rate or (d) for certain foreign currencies, a foreign currency rate, in each case subject to a 0% floor. Through March 31, 2023, the Credit Agreement had an initial applicable margin of 0.125% for base rate loans and 1.125% for SOFR and alternative currency loans. Thereafter, the applicable margin ranges from 0.125% to 1.00% for base rate loans and from 1.125% to 2.00% for SOFR and alternative currency loans based on the Company’s Total Net Leverage Ratio, as defined in the Credit Agreement. In addition, the Credit Agreement is subject to an annual commitment fee, payable quarterly, which was initially 0.20% of the daily average undrawn balance of the revolving credit facility and, from and after April 1, 2023, ranges between 0.20% and 0.25% of the daily average undrawn balance of the revolving credit facility based on the Company’s Total Net Leverage Ratio.

Borrowings under the Credit Agreement are secured by the trade receivables, inventory, personal property, equipment, and general intangibles of the Company’s significant domestic subsidiaries. Capital distributions are subject to certain Total Net Leverage Ratio requirements and capped by an annual aggregate limit under the Credit Agreement.

Standby letters of credit of $4.9 million have been issued under the Credit Agreement to third parties on behalf of the Company as of June 30, 2024. These letters of credit reduce the amount otherwise available under the revolving credit facility. The Company had $395.1 million and $396.1 million of availability under the revolving credit facility as of June 30, 2024 and December 31, 2023, respectively.

(8) EQUITY-BASED COMPENSATION

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 includes a total of 1,631,707 shares available for issuance. 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.

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.

Table of Contents

Equity-Based Awards - Settled in Stock

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


	2024			2023
Awards	Number of Awards	Weighted- Average Grant-Date Fair Value		Number of Awards (2)	Weighted- Average Grant-Date Fair Value
Performance stock units (1)	58,582	$	77.70	85,323	$	53.22
Restricted stock units	33,846	$	77.95	53,862	$	53.49
Deferred stock units	3,340	$	68.86	6,351	$	54.33
Common shares	6,680	$	68.86	8,468	$	54.33

(1) The Company’s performance stock units (“PSUs”) represent shares granted for which the final number of shares earned depends on financial performance. The number of shares to be issued may vary between 0% and 200% of the number of PSUs granted depending on the relative achievement to targeted thresholds. The Company's PSUs with a financial performance condition are based on the Company’s return on invested capital (“ROIC”) over a one-year performance period.

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

Equity-Based Awards - Settled in Cash

The Company's equity-based awards that are settled in cash are the awards under the Management Stock Purchase Plan (the “MSPP”) which is authorized under the Company's equity incentive plans. The MSPP provides participants the ability to defer a portion of their compensation, convertible to unrestricted investments, restricted stock units, or a combination of both, or defer a portion of their directors’ fees, convertible to restricted stock units. Employees eligible to defer a portion of their compensation also receive a company-matching award in restricted stock units equal to a percentage of their deferred compensation.

The deferrals and related company match are credited to an account that contains a share-based liability. The portion of the account deferred to unrestricted investments is measured at fair market value of the unrestricted investments, and the portion of the account deferred to restricted stock units and company-matching restricted stock units is measured at a 200-day average of the Company’s stock price. The account will be converted to and settled in cash payable to participants upon retirement or a termination of their service to the Company.

Total MSPP liabilities recorded on the consolidated balance sheet as of June 30, 2024 were $24.1 million, of which $2.6 million was included in current accrued expenses and $21.5 million was included in non-current liabilities. Total MSPP liabilities recorded on the consolidated balance sheet as of December 31, 2023 were $20.0 million, of which $2.0 million was included in current accrued expenses and $18.0 million was included in non-current liabilities. The value of the restricted stock units within the MSPP liabilities was $21.0 million and $17.3 million at June 30, 2024 and December 31, 2023, respectively.

The following table provides the number of restricted stock units credited to active participant accounts and the payments made with respect to MSPP liabilities during the six months ended June 30,:


	2024		2023
Restricted stock units credited	41,435		44,102
MSPP liabilities paid (in thousands)	$	2,053	$	2,147

(9) 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.

Table of Contents

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 (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Beginning balance	$	10,068	$	6,163	$	9,139	$	6,251
Provisions for product warranties, net of reductions	3,167		1,219		4,096		1,131
Ending balance	$	13,235	$	7,382	$	13,235	$	7,382

(10) EXIT ACTIVITY COSTS AND ASSET IMPAIRMENTS

The Company has incurred exit activity costs and asset impairment charges as a result of its 80/20 simplification and portfolio management initiatives. These initiatives have resulted in the identification of low-volume, low margin, internally-produced products which have been or will be outsourced or discontinued, the simplification of processes, the sale and exiting of less profitable businesses or product lines, and a reduction in the Company's manufacturing footprint.

As a result of process simplification initiatives, the Company has incurred exit activity costs related to moving and closing costs and severance, along with asset impairment costs (recoveries) related to the write-down of inventory and other charges associated with discontinued product lines. Additionally, the Company has incurred the aforementioned costs resulting from the sale and/or closure of facilities including costs recorded during the six months ended June 30, 2023.

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


	Three Months Ended June 30,
	2024						2023
	Exit Activity		Asset Impairment		Total		Exit Activity		Asset Impairment		Total
Residential	$	145	$	—	$	145	$	—	$	—	$	—
Renewables	4,214		235		4,449		2,909		40		2,949
Agtech	11		—		11		156		—		156
Infrastructure	—		—		—		—		—		—
Corporate	4		—		4		—		—		—
Total	$	4,374	$	235	$	4,609	$	3,065	$	40	$	3,105



	Six Months Ended June 30,
	2024						2023
	Exit Activity		Asset Impairment		Total		Exit Activity		Asset Impairment		Total
Residential	$	145	$	(72)	$	73	$	114	$	—	$	114
Renewables	4,483		235		4,718		2,909		(23)		2,886
Agtech	149		—		149		717		—		717
Infrastructure	—		—		—		—		—		—
Corporate	4		—		4		—		—		—
Total	$	4,781	$	163	$	4,944	$	3,740	$	(23)	$	3,717

Table of Contents

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


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Cost of sales	$	4,171	$	3,098	$	4,099	$	3,611
Selling, general, and administrative expense	438		7		845		106
Total exit activity and asset impairment charges	$	4,609	$	3,105	$	4,944	$	3,717

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


	2024		2023
Balance at January 1	$	6,725	$	2,417
Exit activity costs recognized	4,781		3,740
Cash payments	(1,893)		(2,377)
Balance at June 30	$	9,613	$	3,780

(11) INCOME TAXES

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


	Three Months Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
Provision for income taxes (in thousands)	$	11,419		$	11,555		$	19,980		$	18,732
Effective tax rate	26.2		%	27.3		%	25.9		%	26.6		%

The effective tax rate for the three and six months ended June 30, 2024 and 2023, respectively, was greater than the U.S. federal statutory rate of 21% due to state taxes and nondeductible permanent differences partially offset by favorable discrete items due to an excess tax benefit on stock-based compensation.

(12) EARNINGS PER SHARE

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


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Numerator:


Net income available to common stockholders	$	32,198	$	30,723	$	57,144	$	51,822
Denominator for basic earnings per share:
Weighted average shares outstanding	30,588		30,554		30,580		30,725
Denominator for diluted earnings per share:
Weighted average shares outstanding	30,588		30,554		30,580		30,725
Common stock options and stock units	203		130		221		121
Weighted average shares and conversions	30,791		30,684		30,801		30,846

Table of Contents

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


	Three Months Ended June 30,		Six Months Ended June 30,
	2024	2023	2024	2023
Common stock units	13	19	2	17

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

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

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

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

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

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


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Net sales:
Residential	$	214,316	$	228,234	$	399,427	$	407,729
Renewables	79,381		77,459		130,877		136,664
Agtech	34,508		35,028		68,535		70,880
Infrastructure	24,800		24,193		46,672		42,908
Total net sales	$	353,005	$	364,914	$	645,511	$	658,181

Income from operations:
Residential	$	43,313	$	43,959	$	77,659	$	73,468
Renewables	1,647		5,908		3,291		8,177
Agtech	2,282		(1,117)		4,890		1,213
Infrastructure	6,215		5,828		11,111		8,542
Unallocated corporate expenses	(10,988)		(11,501)		(22,746)		(18,953)
Total income from operations	$	42,469	$	43,077	$	74,205	$	72,447

Table of Contents

The following table illustrates the total assets of the Company's reportable segments and unallocated corporate assets as of (in thousands):


	June 30, 2024		December 31, 2023
Total assets:
Residential	$	537,821	$	515,739
Renewables	396,954		377,694
Agtech	167,087		168,213
Infrastructure	84,605		77,518
Unallocated corporate assets	190,474		117,287

	$	1,376,941	$	1,256,451

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


	Three Months Ended June 30, 2024
	Residential		Renewables		Agtech		Infrastructure		Total
Net sales:
Point in Time	$	212,524	$	8,226	$	189	$	10,839	$	231,778
Over Time	1,792		71,155		34,319		13,961		121,227
Total net sales	$	214,316	$	79,381	$	34,508	$	24,800	$	353,005


	Three Months Ended June 30, 2023
	Residential		Renewables		Agtech		Infrastructure		Total
Net sales:
Point in Time	$	226,618	$	10,633	$	880	$	8,848	$	246,979
Over Time	1,616		66,826		34,148		15,345		117,935
Total net sales	$	228,234	$	77,459	$	35,028	$	24,193	$	364,914



	Six Months Ended June 30, 2024
	Residential		Renewables		Agtech		Infrastructure		Total
Net sales:
Point in Time	$	395,856	$	15,015	$	2,528	$	17,149	$	430,548
Over Time	3,571		115,862		66,007		29,523		214,963
Total net sales	$	399,427	$	130,877	$	68,535	$	46,672	$	645,511



	Six Months Ended June 30, 2023
	Residential		Renewables		Agtech		Infrastructure		Total
Net sales:
Point in Time	$	404,560	$	19,727	$	4,803	$	14,909	$	443,999
Over Time	3,169		116,937		66,077		27,999		214,182
Total net sales	$	407,729	$	136,664	$	70,880	$	42,908	$	658,181

Table of Contents

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Certain information set forth herein includes statements that express our opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results and, therefore are, or may be deemed to be, “forward-looking statements.” These forward-looking statements can generally be identified by the use of forward-looking terminology, including the terms “believes,” “anticipates,” “aspires,” “expects,” “estimates,” “seeks,” “projects,” “intends,” “plans,” “may,” “will” or “should” or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They include statements regarding our intentions, beliefs or current expectations concerning, among other things, our results of operations, financial condition, liquidity, prospects, growth, competition, strategies, margins, integration of acquired businesses, the industries in which we operate and the expected impact of evolving laws and regulation. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We believe that these risks and uncertainties include, but are not limited to, those described in the “Risk Factors” disclosures in our most recent Annual Report on Form 10-K. Although we base these forward-looking statements on assumptions that we believe are reasonable when made, we caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition, liquidity and the development of the industries in which we operate may differ materially from those made in or suggested by the forward-looking statements contained herein. In addition, even if our results of operations, financial condition, liquidity, and the development of the industries in which we operate are consistent with the forward-looking statements contained in this Quarterly Report on Form 10-Q, those results or developments may not be indicative of results or developments in subsequent periods. Given these risks and uncertainties, you are cautioned not to place undue reliance on these forward-looking statements. Any forward-looking statements that we make herein speak only as of the date of those statements, and we undertake no obligation to update those statements or to publicly announce the results of any revisions to any of those statements to reflect future events or developments. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless expressed as such, and should only be viewed as historical data.

The Company uses certain operating performance measures, specifically consolidated gross margin, operating margin by segment and consolidated operating margin, to manage the Company's businesses, set operational goals, and establish performance targets for incentive compensation for the Company's 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 consolidated gross margin, consolidated operating margin, and operating margin by segment may be useful to investors in evaluating the profitability of the Company's segments and the Company on a consolidated basis.

Overview

Gibraltar Industries, Inc. (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

•Renewables

•Agtech

•Infrastructure

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

At June 30, 2024, the Company operated thirty facilities, comprised of twenty-two manufacturing facilities, two distribution centers, and six offices, which are located in fifteen states, Canada, and China. The Company's operational infrastructure provides the necessary scale to support local, regional, and national customers in each of the Company's markets.

Table of Contents

Recent Trends

The Company's customers in the Renewables business continue to be impacted by both ongoing and new trade and regulatory policies and investigations. These include but are not limited to:

•In May 2024, a new investigation was initiated by the U.S. Department of Commerce ("USDOC") claiming potentially illegal trade practices with Cambodia, Malaysia, Thailand and Vietnam, the same four countries named in the 2022 anti-dumping and countervailing duties ("AD/CVD") case, for which resolution is anticipated in 2025;

•Revocation of tariff exemptions on bifacial solar modules by the current presidential administration;

•Expiration in 2024 of the Presidential Executive Order that paused tariffs on imports of solar modules for two years. Modules procured during this pause may have challenges to be installed as required by the December 3, 2024 due to permitting delays still prevailing in the industry; and

•Publication of final guidance from the Department of Treasury relative to rules under the Inflation Reduction Act (IRA) in order to maximize tax incentives.

As these disruptions continue, a portion of our customers paused signing new contracts as they work through trade and/or regulatory items specific to their projects.

Business Strategy

The Company's mission is to make life better for people and the planet, fueled by advancing the disciplines of engineering, science, and technology. The Company is innovating to reshape critical markets in sustainable power, comfortable and efficient living, and productive growing throughout North America. Furthermore, the Company strives to create compounding and sustainable value for its stockholders and stakeholders with strong and relevant leadership positions in higher growth, profitable end markets focused on addressing some of the world's most challenging opportunities. The foundation of the Company's strategy is built on three core pillars: Business System, Portfolio Management, and Organization Development.

1.Business System reflects the necessary systems, processes, and management tools required to deliver consistent and continuous performance improvement, every day. The Company's business system is a critical enabler to grow, scale, and deliver its plans. The Company's focus is on deploying effective tools to drive growth, improve operating performance, and develop the organization utilizing 80/20 and lean quote-to-cash initiatives along with digital systems for speed, agility and responsiveness. The Business System pillar challenges existing operating paradigms, drives day-to-day performance, forces prioritization of resources, tests the Company's business models, and drives new product and services innovation.

2.Portfolio Management is focused on optimizing the Company’s business portfolio in higher growth markets with leadership positions while ensuring its financial capital and human resources are effectively and efficiently deployed to deliver sustainable, profitable growth while increasing its relevance with customers and shaping its markets. In 2023, the Company acquired the assets of a privately held Utah-based company in the Residential segment and sold its Japan-based solar racking business within the Renewables segment to help achieve these objectives.

3.Organization Development drives the Company’s continuous focus on ensuring it has the right design and structure to scale the organization in order to execute the Company’s plans and meet commitments. The Company's focus is on creating an environment for our people to have the best opportunity for success, continue to develop, grow and learn. At core of this pillar is the Company’s development process focused on helping employees reach their potential, improve performance, develop career roadmaps, identify ongoing education requirements, and respective succession plans. The Company believes doing so helps it attract and retain the best people to execute its business plans.

Table of Contents

The Company believes the key elements of the Company's strategy enable the Company to respond timely to changes in the end markets the Company serves, including the broader market dynamics experienced over the past few years. The Company continues to examine the need for restructuring of the Company's operations, including consolidation of facilities, reducing overhead costs, curtailing investments in working capital, and managing the Company's business to generate incremental cash. The Company believes its strategy enables the Company to respond to volatility in commodity and other input costs and fluctuations in customer demand, along with striving to maintain and improve margins. The Company has used cash flows generated by these initiatives to improve the Company's liquidity position, invest in growth initiatives and return capital to the Company's shareholders through share repurchases. Overall, the Company continues to strive to achieve stronger financial results, make more efficient use of capital, and deliver higher stockholder returns.

Recent Developments

On December 1, 2023, the Company sold its Japan-based solar racking business within its Renewables segment to a third party and received net proceeds of $8.0 million.

On July 5, 2023, the Company acquired the assets of a privately held Utah based company that manufactures and distributes roof flashing and accessory products for $10.4 million.

Results of Operations

Three Months Ended June 30, 2024 Compared to the Three Months Ended June 30, 2023

The following table sets forth selected results of operations data and its percentage of net sales for the three months ended June 30 (in thousands):


	2024				2023
Net sales	$	353,005	100.0	%	$	364,914	100.0	%
Cost of sales	257,132		72.8	%	268,175		73.5	%
Gross profit	95,873		27.2	%	96,739		26.5	%
Selling, general, and administrative expense	53,404		15.2	%	53,662		14.7	%

Income from operations	42,469		12.0	%	43,077		11.8	%
Interest (income) expense	(1,495)		(0.4)	%	1,308		0.3	%
Other expense (income)	347		0.0	%	(509)		(0.1)	%
Income before taxes	43,617		12.4	%	42,278		11.6	%
Provision for income taxes	11,419		3.3	%	11,555		3.2	%


Net income	$	32,198	9.1	%	$	30,723	8.4	%

The following table sets forth the Company’s net sales by reportable segment for the three months ended June 30, (in thousands):


							Impact of
	2024		2023		Total Change		Acquisitions		Portfolio Management		Ongoing Operations
Net sales:
Residential	$	214,316	$	228,234	$	(13,918)	$	2,193	$	—	$	(16,111)
Renewables	79,381		77,459		1,922		—		(4,081)		6,003
Agtech	34,508		35,028		(520)		—		(765)		245
Infrastructure	24,800		24,193		607		—		—		607
Consolidated	$	353,005	$	364,914	$	(11,909)	$	2,193	$	(4,846)	$	(9,256)

Consolidated net sales decreased by $11.9 million, or 3.3%, to $353.0 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The net sales decrease was largely due to a 3% decrease in organic revenue, the combined result of a 2% volume decline and a 1% decrease in pricing to customers, along with portfolio management activities in the prior year quarter. Growth in the Company's Renewables, Agtech and Infrastructure segments, along with revenue of $2.2 million generated from a recent

Table of Contents

acquisition, was more than offset by $4.8 million of sales related to portfolio management along with a decline in revenue in the Company's Residential segment. Consolidated backlog decreased 4% to $389 million, as compared to the end of the prior year quarter.

Net sales in the Company's Residential segment decreased $13.9 million, or 6.1%, to $214.3 million for the three months ended June 30, 2024 compared to $228.2 million for the three months ended June 30, 2023. Organic sales decline of 7.1% was impacted by a slowing in end market activity in the business and inventory reduction actions at certain retail customers during the quarter. This decrease was partially offset by participation gains with new and existing customers and geographic expansion in the Rocky Mountain region, along with $2.2 million of revenue generated by the recent acquisition.

Net sales in the Company's Renewables segment increased $1.9 million, or 2.5%, to $79.4 million for the three months ended June 30, 2024 compared to $77.5 million for the three months ended June 30, 2023. The increase was driven by customer uptake to the Company's new tracker product, partially offset by portfolio management activities. Despite a growing pipeline of new projects across all product lines, order backlog decreased 10% during the quarter as some customers paused signing new contracts as they worked through trade and/or regulatory items specific to their projects.

Net sales in the Company's Agtech segment decreased 1.4%, or $0.5 million, to $34.5 million for the three months ended June 30, 2024 compared to $35.0 million for the three months ended June 30, 2023. The revenue decline was the result of portfolio management actions in the prior year. Revenue was impacted by new projects starting later in the current year quarter, with June revenue up significantly over May. Backlog increased 32% year over year in this segment as new projects booked were greater than $90 million during the current year quarter.

Net sales in the Company's Infrastructure segment increased 2.5%, or $0.6 million, to $24.8 million for the three months ended June 30, 2024 compared to $24.2 million for the three months ended June 30, 2023. The increase in revenue was driven by continued strong execution and market participation gains. Backlog decreased 12% as expected from the prior year due to the final stages of a large project booked in 2023, while demand and quoting remain strong.

The Company's consolidated gross margin increased to 27.2% for the three months ended June 30, 2024 compared to 26.5% for the three months ended June 30, 2023. The increase was driven by improved price to material cost alignment, and continued operational efficiencies, along with 80/20 initiatives and favorable business and product mix.

Selling, general, and administrative ("SG&A") expenses decreased by $0.3 million, or 0.5% to $53.4 million for the three months ended June 30, 2024 compared to $53.7 million for the three months ended June 30, 2023. The $0.3 million decrease was primarily due to lower performance-based compensation expense as compared to the prior year quarter. SG&A expenses as a percentage of net sales increased to 15.2% for the three months ended June 30, 2024 compared to 14.7% for the three months ended June 30, 2023.

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 three months ended June 30, (in thousands):



	2024				2023				Total Change
Income from operations:
Residential	$	43,313	20.2	%	$	43,959	19.3	%	$	(646)
Renewables	1,647		2.1	%	5,908		7.6	%	(4,261)
Agtech	2,282		6.6	%	(1,117)		(3.2)	%	3,399
Infrastructure	6,215		25.1	%	5,828		24.1	%	387
Unallocated Corporate Expenses	(10,988)		(3.1)	%	(11,501)		(3.2)	%	513
Consolidated income from operations	$	42,469	12.0	%	$	43,077	11.8	%	$	(608)

The Residential segment generated an operating margin of 20.2% in the current year quarter compared to 19.3% in the prior year quarter. Operating margin improved year over year, driven by solid execution and effective price/cost management.

Table of Contents

The Renewables segment generated an operating margin of 2.1% in the current year quarter compared to 7.6% in the prior year quarter. The decrease in operating margin was a result of product line mix associated with the ramp up of the new tracker product line in the current year quarter. Furthermore, margin was impacted by restructuring charges incurred during the quarter related to addressing customer issues arising from the discontinued legacy solar tracker solution. This margin decrease was partially offset by strong execution and field efficiencies on projects underway.

The Agtech segment generated an operating margin of 6.6% in the current year quarter compared to (3.2)% in the prior year quarter. Operating margin improved year over year due to the impact of portfolio management charges related to the liquidation of the processing business incurred in the prior year partially offset by a product mix shift in projects across the segment during the current year.

The Infrastructure segment generated an operating margin of 25.1% during the three months ended June 30, 2024 compared to 24.1% during the three months ended June 30, 2023. The margin improved year over year due to favorable price/cost alignment, ongoing strong operating execution, 80/20 productivity, and improving product mix.

Unallocated corporate expenses decreased $0.5 million from $11.5 million during the three months ended June 30, 2023 to $11.0 million during the three months ended June 30, 2024. The decrease in expense was primarily the result of lower performance-based compensation expense as compared to the prior year quarter.

The Company recorded interest income of $1.5 million for the three months ended June 30, 2024, compared to interest expense of $1.3 million for the three months ended June 30, 2023. Income during the current year quarter was the result of earnings on certain interest-bearing cash accounts. Expense in the prior year quarter was the result of an outstanding balance on the Company's revolving credit facility for the three months ended June 30, 2023, while no amounts were outstanding during the three months ended June 30, 2024.

The Company recorded other expense of $0.3 million for the three months ended June 30, 2024, compared to other income of $0.5 million recorded for the three months ended June 30, 2023. The change year over year is the result of costs related to the liquidation of the processing business.

The Company recognized a provision for income taxes of $11.4 million and $11.6 million, with effective tax rates of 26.2% and 27.3% for the three months ended June 30, 2024, and 2023, respectively. The effective tax rate for the three months ended June 30, 2024, and 2023, respectively, was greater than the U.S. federal statutory rate of 21% due to state taxes and nondeductible permanent differences partially offset by favorable discrete items due to an excess tax benefit on stock-based compensation.

Six Months Ended June 30, 2024 Compared to the Six Months Ended June 30, 2023

The following table sets forth selected results of operations data and its percentage of net sales for the six months ended June 30 (in thousands):


	2024				2023
Net sales	$	645,511	100.0	%	$	658,181	100.0	%
Cost of sales	465,250		72.1	%	484,513		73.6	%
Gross profit	180,261		27.9	%	173,668		26.4	%
Selling, general, and administrative expense	106,056		16.4	%	101,221		15.4	%

Income from operations	74,205		11.5	%	72,447		11.0	%
Interest (income) expense	(2,245)		(0.3)	%	2,799		0.4	%
Other income	(674)		(0.1)	%	(906)		(0.1)	%
Income before taxes	77,124		11.9	%	70,554		10.7	%
Provision for income taxes	19,980		3.0	%	18,732		2.8	%


Net income	$	57,144	8.9	%	$	51,822	7.9	%

Table of Contents

The following table sets forth the Company’s net sales by reportable segment for the six months ended June 30, (in thousands):


							Impact of
	2024		2023		Total Change		Acquisitions		Portfolio Management		Ongoing Operations
Net sales:
Residential	$	399,427	$	407,729	$	(8,302)	$	3,480	$	—	$	(11,782)
Renewables	130,877		136,664		(5,787)		—		(6,031)		244
Agtech	68,535		70,880		(2,345)		—		(3,279)		934
Infrastructure	46,672		42,908		3,764		—		—		3,764
Consolidated	$	645,511	$	658,181	$	(12,670)	$	3,480	$	(9,310)	$	(6,840)

Consolidated net sales decreased by $12.7 million, or 1.9%, to $645.5 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The net sales decrease was the combined result of volume decline in the Company's Residential segment along with portfolio management activities in the prior year. This decrease was partially offset by growth in the Company's Infrastructure, Agtech and Renewables segments, along with revenue of $3.5 million generated from a recent acquisition. Consolidated backlog decreased 4% to $389 million, as compared to the end of the prior year period.

Net sales in the Company's Residential segment decreased $8.3 million, or 2.0%, to $399.4 million for the six months ended June 30, 2024 compared to $407.7 million for the six months ended June 30, 2023. Organic decline of 2.9% was impacted by a slowing in end market activity in the business and inventory reduction actions at certain retail customers during the latter part of the six month period. This decrease was partially offset by participation gains with new and existing customers and geographic expansion in the Rocky Mountain region, along with $3.5 million of revenue generated by the recent acquisition.

Net sales in the Company's Renewables segment decreased $5.8 million, or 4.2%, to $130.9 million for the six months ended June 30, 2024 compared to $136.7 million for the six months ended June 30, 2023. The decline in net sales was the result of portfolio management actions in the prior year. Despite a growing pipeline of new projects across all product lines, order backlog decreased 10% from the prior year as some customers paused signing new contracts as they worked through trade and/or regulatory items specific to their projects.

Net sales in the Company's Agtech segment decreased 3.2%, or $2.3 million, to $68.5 million for the six months ended June 30, 2024 compared to $70.9 million for the six months ended June 30, 2023. The revenue declined due to $3.3 million of revenues recorded in the prior year related to portfolio management actions which were partially offset by timing of new contract signings, as projects recently booked began to generate revenue during the latter part of the current year period. Backlog increased 32% year over year in this segment as new projects booked were greater than $90 million during the current year quarter.

Net sales in the Company's Infrastructure segment increased 8.9%, or $3.8 million, to $46.7 million for the six months ended June 30, 2024 compared to $42.9 million for the six months ended June 30, 2023. The increase in revenue was driven by continued strong execution and market participation gains. Backlog decreased 12% as expected from the prior year due to the final stages of a large project booked in 2023, while demand and quoting remain strong.

The Company's consolidated gross margin increased to 27.9% for the six months ended June 30, 2024 compared to 26.4% for the six months ended June 30, 2023. The increase was driven by improved price to material cost alignment, and continued operational efficiencies, along with 80/20 initiatives and favorable business and product mix.

SG&A expenses increased by $4.8 million, or 4.8% to $106.1 million for the six months ended June 30, 2024 compared to $101.2 million for the six months ended June 30, 2023. The $4.8 million increase was primarily due to higher performance-based compensation expense as compared to the prior year. SG&A expenses as a percentage of net sales increased to 16.4% for the six months ended June 30, 2024 compared to 15.4% for the six months ended June 30, 2023.

Table of Contents

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 six months ended June 30, (in thousands):



	2024				2023				Total Change
Income from operations:
Residential	$	77,659	19.4	%	$	73,468	18.0	%	$	4,191
Renewables	3,291		2.5	%	8,177		6.0	%	(4,886)
Agtech	4,890		7.1	%	1,213		1.7	%	3,677
Infrastructure	11,111		23.8	%	8,542		19.9	%	2,569
Unallocated Corporate Expenses	(22,746)		(3.5)	%	(18,953)		(2.9)	%	(3,793)
Consolidated income from operations	$	74,205	11.5	%	$	72,447	11.0	%	$	1,758

The Residential segment generated an operating margin of 19.4% in the current year compared to 18.0% in the prior year. Operating margin improved year over year, driven by solid execution, effective price/cost management and 80/20 productivity.

The Renewables segment generated an operating margin of 2.5% in the current year compared to 6.0% in the prior year. The decrease in operating margin was a result of product line mix associated with the ramp up of the new tracker product line in the current year along with the impact of restructuring activities related to addressing customer issues arising from the discontinued legacy solar tracker solution and prior year portfolio management actions, partially offset by strong execution and field efficiencies on projects underway.

The Agtech segment generated an operating margin of 7.1% in the current year compared to 1.7% in the prior year. Operating margin improved year over year due to the impact of restructuring costs incurred in the prior year partially offset by product mix across the segment.

The Infrastructure segment generated an operating margin of 23.8% during the six months ended June 30, 2024 compared to 19.9% during the six months ended June 30, 2023. The margin improved year over year driven by favorable price/cost alignment, ongoing strong operating execution, 80/20 productivity, and improving product mix.

Unallocated corporate expenses increased $3.8 million from $19.0 million during the six months ended June 30, 2023 to $22.7 million during the six months ended June 30, 2024. The increase in expense was primarily the result of higher performance-based compensation expense as compared to the prior year.

The Company recorded interest income of $2.2 million for the six months ended June 30, 2024, compared to interest expense of $2.8 million for the six months ended June 30, 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 an outstanding balance on the Company's revolving credit facility for the six months ended June 30, 2023, while no amounts were outstanding during the six months ended June 30, 2024.

Other income decreased year over year with $0.7 million recorded for the six months ended June 30, 2024, compared to $0.9 million recorded for the six months ended June 30, 2023. The change year over year is the combined result of $1.0 million of working capital and other adjustments recorded in the current year, relating to the sale of the Company's Japan-based solar racking business within its Renewables segment, costs related to the liquidation of the processing business and foreign currency translation fluctuations.

The Company recognized a provision for income taxes of $20.0 million and $18.7 million, with effective tax rates of 25.9% and 26.6% for the six months ended June 30, 2024, and 2023, respectively. The effective tax rate for the six months ended June 30, 2024, and 2023, respectively, was greater than the U.S. federal statutory rate of 21% due to state taxes and nondeductible permanent differences partially offset by favorable discrete items due to an excess tax benefit on stock-based compensation.

Table of Contents

Liquidity and Capital Resources

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


	June 30, 2024		December 31, 2023
Cash and cash equivalents	$	179,102	$	99,426
Availability on revolving credit facility	395,055		396,056
	$	574,157	$	495,482

Sources of Liquidity

The Company's primary sources of liquidity are comprised of cash on hand and its available borrowing capacity provided under the Company's Credit Agreement (the "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 7 to the Company's consolidated financial statements in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q for further information on the 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 June 30, 2024 and December 31, 2023, the Company's foreign subsidiaries held $14.2 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 its cash requirements and to continue to invest in operational excellence, growth initiatives and the development of the organization.

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.

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.

Except as disclosed above, there have been no material changes in the Company's cash requirements since December 31, 2023. See Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Annual Report on Form 10-K for the year ended December 31, 2023.

Table of Contents

Cash Flows

The following table sets forth selected cash flow data for the six months ended June 30, (in thousands):


	2024		2023
Cash provided by (used in):
Operating activities	$	89,653	$	114,094
Investing activities	(8,357)		(4,730)
Financing activities	(1,447)		(107,970)

Effect of foreign exchange rate changes	(173)		(381)
Net increase in cash and cash equivalents	$	79,676	$	1,013

Operating Activities

Net cash provided by operating activities for the six months ended June 30, 2024 of $89.7 million consisted of net income of $57.1 million, non-cash net charges totaling $22.4 million, which include depreciation, amortization, stock-based compensation, exit activity costs and other non-cash charges, and $10.2 million of cash generated from working capital and other net operating assets. The cash generated from working capital and other net operating assets was largely due to increases in accounts payable, the result of the timing of purchases and vendor payments, and billings in excess of costs, the result of increased advance payments from and billings to customers on projects. These activities were partially offset by increases in accounts receivable and inventory, largely the result of seasonal demand.

Net cash provided by operating activities for the six months ended June 30, 2023 of $114.1 million consisted of net income of $51.8 million, non-cash net charges totaling $21.6 million, which include depreciation, amortization, stock-based compensation, exit activity recoveries and other non-cash charges, and $40.7 million of cash generated from working capital and other net operating assets. The cash generated from working capital and other net operating assets was largely due to increases in accounts payable, the result of the timing of purchases and vendor payments, and billings in excess of costs, the result of increased advance payments from and billings to customers on projects. In addition, cash was generated due to the Company's focus on reducing its investment in inventory to better align with lower sales volumes while still meeting customer demand. These activities were partially offset by an increase in accounts receivable largely the result of seasonal increases in demand.

Investing Activities

Net cash used in investing activities for the six months ended June 30, 2024 of $8.4 million was primarily due to net capital expenditures of $8.7 million, offset by 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.

Net cash used in investing activities for the six months ended June 30, 2023 of $4.7 million was primarily due to net capital expenditures of $5.3 million, offset by receipt of the $0.6 million final working capital settlement resulting from the 2022 acquisition of QAP.

Financing Activities

Net cash used in financing activities for the six months ended June 30, 2024 of $1.4 million consisted of common stock repurchases related to the net settlement of tax obligations for participants in the Company's equity incentive plans.

Net cash used in financing activities for the six months ended June 30, 2023 of $108.0 million consisted of net long-term debt payments of $79.2 million and $28.8 million of common stock repurchases. Net long-term debt payments consisted of $120.0 million in long-term debt payments, offset by $40.8 million in proceeds from borrowing on the Company's long-term debt credit facility. The Company paid $26.0 million during the six months ended June 30, 2023 related to repurchase of 538,575 shares under the Company's authorized share repurchase program. The remainder of the repurchased common stock of $2.8 million related to the net settlement of tax obligations for participants in the Company's equity incentive plans.

Table of Contents

Critical Accounting Estimates

There have been no material changes to the Company's critical accounting estimates during the six months ended June 30, 2024 from those disclosed in the consolidated financial statements and accompanying notes contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2023.

Recent Accounting Pronouncements

See Note 1 to the Company's consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information on recent accounting pronouncements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

In the ordinary course of business, the Company is exposed to various market risk factors, including changes in general economic conditions, competition, interest rates, foreign exchange rates, and raw materials pricing and availability. In addition, the Company is exposed to other financial market risks, primarily related to its foreign operations. In the current year, there have been no material changes in the information provided under Item 7A in the Company's Annual Report on Form 10-K for the year ended December 31, 2023.

Item 4. Controls and Procedures

(a)Evaluation of Disclosure Controls and Procedures

The Company maintains a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended). Management of the Company, under the supervision and with the participation of the Chief Executive Officer and the Chief Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered in this report. Based upon that evaluation and the definition of disclosure controls and procedures contained in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that as of the end of such period the Company’s disclosure controls and procedures were effective.

(b)Changes in Internal Control over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting (as defined by Rule 13a-15(f) or 15d-15(f) under the Securities Exchange Act of 1934, as amended) that occurred during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

From time to time the Company has been and may in the future become involved in litigation, as well as other legal proceedings in the ordinary course of the Company's business. The Company maintains liability insurance against risks arising out of the normal course of business. While the outcome of these legal proceedings cannot be predicted with certainty, the Company's management, based on currently available facts, does not believe that the ultimate outcome of any pending litigation will have a material effect on the Company's consolidated financial condition, results of operations, or liquidity.

There were no material legal proceedings terminated, settled, or otherwise resolved during the quarter ended June 30, 2024.

Table of Contents

Item 1A. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the risks discussed in “Part I, Item 1A. Risk Factors” in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023. These risks and uncertainties have the potential to materially affect the Company's business, financial condition, results of operation, cash flows, and future prospects. Additional risks and uncertainties not currently known to the Company or that the Company currently deems immaterial may materially adversely impact the Company's business, financial condition, or operating results. During the quarter ended June 30, 2024, there have been no material changes from the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

In May 2022, 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. The program was publicly announced on May 4, 2022 and has a duration of three years, ending May 2, 2025. Repurchases may be made, from time to time, in amounts and at prices the Company deems appropriate, subject to market conditions, applicable legal requirements, debt covenants and other considerations. Any such repurchases may be executed using 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 Company did not purchase shares during the quarter ended June 30, 2024 and the dollar value of shares that may yet be purchased under the program was $88,943,472.

The Company did not sell unregistered equity securities during the period covered by this report.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

Table of Contents

Item 6. Exhibits


			3.1			Certificate of Incorporation of Gibraltar Industries, Inc., as amended by: (i) Certificate of Amendment of Certificate of Incorporation of Gibraltar Industries, Inc. filed on October 27, 2004, (ii) Certificate of Change of Registered Agent and Registered Office of Gibraltar Industries, Inc. filed on May 11, 2005, (iii) Certificate of Amendment of Certificate of Incorporation of Gibraltar Industries, Inc. filed on May 22, 2012, (iv) Certificate of Amendment of Certificate of Incorporation of Gibraltar Industries, Inc. filed on May 11, 2015, (v) Certificate of Change of Registered Agent and/or Registered Office filed on January 10, 2019, (vi) Certificate of Amendment of Certificate of Incorporation of Gibraltar Industries, Inc. filed on May 6, 2021 (incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q filed on August 3, 2021), and (vii) Certificate of Amendment of Certificate of Incorporation of Gibraltar Industries, Inc. filed on May 3, 2023 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on May 8, 2023)
			3.2			Second Amended and Restated By-Laws of Gibraltar Industries, Inc., effective as of December 7, 2022 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K/A filed on December 9, 2022)
			31.1*			Certification of Chairman of the Board, President and Chief Executive Officer pursuant to Section 302 of the Sarbanes–Oxley Act of 2002.
			31.2*			Certification of Senior Vice President and Chief Financial Officer pursuant to Section 302 of the Sarbanes–Oxley Act of 2002.
			32.1**			Certification of the Chairman of the Board, President and Chief Executive Officer pursuant to Title 18, United States Code, Section 1350, as adopted pursuant to Section 906 of the Sarbanes–Oxley Act of 2002.
			32.2**			Certification of the Senior Vice President and Chief Financial Officer pursuant to Title 18, United States Code, Section 1350, as adopted pursuant to Section 906 of the Sarbanes–Oxley Act of 2002.
			101.INS*			Inline XBRL Instance Document
			101.SCH*			Inline XBRL Taxonomy Extension Schema Document
			101.CAL*			Inline XBRL Taxonomy Extension Calculation Linkbase Document
			101.LAB*			Inline XBRL Taxonomy Extension Label Linkbase Document
			101.PRE*			Inline XBRL Taxonomy Extension Presentation Linkbase Document
			101.DEF*			Inline XBRL Taxonomy Extension Definition Linkbase Document
			104			Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)


*			Submitted electronically with this Quarterly Report on Form 10-Q.
**			Documents are furnished not filed herewith.

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


GIBRALTAR INDUSTRIES, INC.
(Registrant)


/s/ William T. Bosway
William T. Bosway
Chairman of the Board, President and Chief Executive Officer


/s/ Timothy F. Murphy
Timothy F. Murphy
Senior Vice President and Chief Financial Officer

Date: July 31, 2024