Gibraltar Industries Earnings 2018-09-30

ROCK 10Q Quarterly Report

Balance Sheet	Income Statement	Cash Flow

10-Q 1 rock-20180930x10q.htm 10-Q Document

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q



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

For the quarterly period ended September 30, 2018



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

Commission File Number 0-22462

GIBRALTAR INDUSTRIES, INC.

(Exact name of Registrant as specified in its charter)



Delaware		16-1445150
(State or incorporation )		(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)

Registrant’s telephone number, including area code: (716) 826-6500

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 x 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 x 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 definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):



Large accelerated filer	x	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 x

As of October 31, 2018, the number of common shares outstanding was: 32,064,809.

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GIBRALTAR INDUSTRIES, INC.

INDEX



		PAGE NUMBER
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2018 and 2017 (unaudited)	3
	Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2018 and 2017 (unaudited)	4
	Consolidated Balance Sheets as of September 30, 2018 (unaudited) and December 31, 2017	5
	Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2018 and 2017 (unaudited)	6
	Consolidated Statement of Shareholders’ Equity for the Nine Months Ended September 30, 2018 and 2017 (unaudited)	7
	Notes to Consolidated Financial Statements (unaudited)	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	40
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	49
Item 4.	Controls and Procedures	49
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	49
Item 1A.	Risk Factors	50
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	50
Item 3.	Defaults Upon Senior Securities	50
Item 4.	Mine Safety Disclosures	50
Item 5.	Other Information	50
Item 6.	Exhibits	51
	SIGNATURES	52

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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 September 30,				Nine Months Ended September 30,
	2018		2017		2018			2017
Net Sales	$	280,086	$	274,574	$	761,459		$	728,806
Cost of sales	209,807		205,839		572,359			548,991
Gross profit	70,279		68,735		189,100			179,815
Selling, general, and administrative expense	40,875		33,042		113,579			109,513
Income from operations	29,404		35,693		75,521			70,302
Interest expense	2,906		3,486		9,305			10,612
Other expense (income)	522		404		(50		)	811
Income before taxes	25,976		31,803		66,266			58,879
Provision for income taxes	6,473		11,184		15,574			21,090
Income from continuing operations	19,503		20,619		50,692			37,789
Discontinued operations:
Loss before taxes	—		—		—			(644		)
Benefit of income taxes	—		—		—			(239		)
Loss from discontinued operations	—		—		—			(405		)
Net income	$	19,503	$	20,619	$	50,692		$	37,384
Net earnings per share – Basic:
Income from continuing operations	$	0.61	$	0.65	$	1.59		$	1.19
Loss from discontinued operations	—		—		—			(0.01		)
Net income	$	0.61	$	0.65	$	1.59		$	1.18
Weighted average shares outstanding -- Basic	32,115		31,703		31,922			31,700
Net earnings per share – Diluted:
Income from continuing operations	$	0.60	$	0.64	$	1.56		$	1.17
Loss from discontinued operations	—		—		—			(0.01		)
Net income	$	0.60	$	0.64	$	1.56		$	1.16
Weighted average shares outstanding -- Diluted	32,571		32,210		32,524			32,216

See accompanying notes to consolidated financial statements.

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GIBRALTAR INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

(unaudited)



	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
Net income	$	19,503		$	20,619		$	50,692		$	37,384
Other comprehensive income (loss):
Foreign currency translation adjustment	139			1,581			(1,538		)	3,351
Cumulative effect of accounting change (see Note 2)	—			—			(350		)	—
Adjustment to retirement benefit liability, net of tax	(5		)	(2		)	(15		)	(8		)
Adjustment to post employment health care benefit liability, net of tax	32			29			95			88
Other comprehensive income (loss)	166			1,608			(1,808		)	3,431
Total comprehensive income	$	19,669		$	22,227		$	48,884		$	40,815

See accompanying notes to consolidated financial statements.

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GIBRALTAR INDUSTRIES, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)



	September 30, 2018			December 31, 2017
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	245,413		$	222,280
Accounts receivable, net	180,875			145,385
Inventories	97,486			86,372
Other current assets	8,949			8,727
Total current assets	532,723			462,764
Property, plant, and equipment, net	93,718			97,098
Goodwill	323,321			321,074
Acquired intangibles	99,545			105,768
Other assets	4,480			4,681
	$	1,053,787		$	991,385
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	92,997		$	82,387
Accrued expenses	76,268			75,467
Billings in excess of cost	21,900			12,779
Current maturities of long-term debt	400			400
Total current liabilities	191,565			171,033
Long-term debt	209,809			209,621
Deferred income taxes	32,110			31,237
Other non-current liabilities	37,428			47,775
Shareholders’ equity:
Preferred stock, $0.01 par value; authorized 10,000 shares; none outstanding	—			—
Common stock, $0.01 par value; authorized 50,000 shares; 32,842 shares and 32,332 shares issued and outstanding in 2018 and 2017	328			323
Additional paid-in capital	280,149			271,957
Retained earnings	325,878			274,562
Accumulated other comprehensive loss	(6,174		)	(4,366		)
Cost of 778 and 615 common shares held in treasury in 2018 and 2017	(17,306		)	(10,757		)
Total shareholders’ equity	582,875			531,719
	$	1,053,787		$	991,385

See accompanying notes to consolidated financial statements.

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GIBRALTAR INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)(unaudited)



	Nine Months Ended September 30,
	2018			2017
Cash Flows from Operating Activities
Net income	$	50,692		$	37,384
Loss from discontinued operations	—			(405		)
Income from continuing operations	50,692			37,789
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	15,449			16,427
Stock compensation expense	6,854			5,069
Net gain on sale of assets	(203		)	(139		)
Exit activity costs (recoveries), non-cash	1,088			(1,931		)
Benefit of deferred income taxes	—			(136		)
Other, net	1,317			1,411
Changes in operating assets and liabilities, excluding the effects of acquisitions:
Accounts receivable	(30,534		)	(42,310		)
Inventories	(16,263		)	2,016
Other current assets and other assets	1,052			(2,002		)
Accounts payable	9,237			25,134
Accrued expenses and other non-current liabilities	(479		)	7,503
Net cash provided by operating activities	38,210			48,831
Cash Flows from Investing Activities
Cash paid for acquisitions, net of cash acquired	(5,241		)	(18,494		)
Net proceeds from sale of property and equipment	3,147			12,935
Purchases of property, plant, and equipment	(6,767		)	(5,152		)
Net cash used in investing activities	(8,861		)	(10,711		)
Cash Flows from Financing Activities
Long-term debt payments	(400		)	(400		)
Purchase of treasury stock at market prices	(6,549		)	(1,982		)
Net proceeds from issuance of common stock	1,343			649
Net cash used in financing activities	(5,606		)	(1,733		)
Effect of exchange rate changes on cash	(610		)	1,468
Net increase in cash and cash equivalents	23,133			37,855
Cash and cash equivalents at beginning of year	222,280			170,177
Cash and cash equivalents at end of period	$	245,413		$	208,032

See accompanying notes to consolidated financial statements.

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GIBRALTAR INDUSTRIES, INC.

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

(in thousands)

(unaudited)



	Common Stock			Additional Paid-In Capital			Retained Earnings		Accumulated Other Comprehensive Loss			Treasury Stock				Total Shareholders’ Equity
	Shares	Amount		Additional Paid-In Capital			Retained Earnings		Accumulated Other Comprehensive Loss			Shares	Amount			Total Shareholders’ Equity
Balance at December 31, 2017	32,332	$	323	$	271,957		$	274,562	$	(4,366	)	615	$	(10,757	)	$	531,719
Net income	—	—		—			8,352		—			—	—			8,352
Foreign currency translation adjustment	—	—		—			—		110			—	—			110
Adjustment to retirement benefit liability, net of taxes of $(2)	—	—		—			—		(5		)	—	—			(5		)
Adjustment to post employment health care benefit liability, net of taxes of $12	—	—		—			—		32			—	—			32
Stock compensation expense	—	—		2,097			—		—			—	—			2,097
Cumulative effect of accounting change (see Note 2)	—	—		—			624		(350		)	—	—			274
Stock options exercised	13	—		226			—		—			—	—			226
Net settlement of restricted stock units	53	1		(1		)	—		—			24	(850		)	(850		)
Balance at March 31, 2018	32,398	$	324	$	274,279		$	283,538	$	(4,579	)	639	$	(11,607	)	$	541,955
Net income	—	—		—			22,837		—			—	—			22,837
Foreign currency translation adjustment	—	—		—			—		(1,787		)	—	—			(1,787		)
Adjustment to retirement benefit liability, net of taxes of $(2)	—	—		—			—		(5		)	—	—			(5		)
Adjustment to post employment health care benefit liability, net of taxes of $13	—	—		—			—		31			—	—			31
Stock compensation expense	—	—		2,731			—		—			—	—			2,731
Stock options exercised	21	—		300			—		—			—	—			300
Issuance of restricted stock	2	—		—			—		—			—	—			—
Net settlement of restricted stock units	334	3		(3		)	—		—			128	(5,166		)	(5,166		)
Balance at June 30, 2018	32,755	$	327	$	277,307		$	306,375	$	(6,340	)	767	$	(16,773	)	$	560,896
Net income	—	—		—			19,503		—			—	—			19,503
Foreign currency translation adjustment	—	—		—			—		139			—	—			139
Adjustment to retirement benefit liability, net of taxes of $(2)	—	—		—			—		(5		)	—	—			(5		)
Adjustment to post employment health care benefit liability, net of taxes of $12	—	—		—			—		32			—	—			32
Stock compensation expense	—	—		2,026			—		—			—	—			2,026
Stock options exercised	50	1		816			—		—			—	—			817
Net settlement of restricted stock units	37	—		—			—		—			11	(533		)	(533		)
Balance at September 30, 2018	32,842	$	328	$	280,149		$	325,878	$	(6,174	)	778	$	(17,306	)	$	582,875

See accompanying notes to consolidated financial statements.

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GIBRALTAR INDUSTRIES, INC.

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

(in thousands)

(unaudited)



	Common Stock			Additional Paid-In Capital			Retained Earnings		Accumulated Other Comprehensive Loss			Treasury Stock				Total Shareholders’ Equity
	Shares	Amount		Additional Paid-In Capital			Retained Earnings		Accumulated Other Comprehensive Loss			Shares	Amount			Total Shareholders’ Equity
Balance at December 31, 2016	32,085	$	320	$	264,418		$	211,748	$	(7,721	)	530	$	(7,885	)	$	460,880
Net income	—	—		—			3,996		—			—	—			3,996
Foreign currency translation adjustment	—	—		—			—		679			—	—			679
Adjustment to retirement benefit liability, net of taxes of $(2)	—	—		—			—		(3		)	—	—			(3		)
Adjustment to post employment health care benefit liability, net of taxes of $19	—	—		—			—		29			—	—			29
Stock compensation expense	—	—		1,635			—		—			—	—			1,635
Cumulative effect of accounting change (see Note1)	—	—		(254		)	254		—			—	—			—
Stock options exercised	1	—		11			—		—			—	—			11
Issuance of restricted stock	—	—		—			—		—			—	—			—
Net settlement of restricted stock units	47	1		(1		)	—		—			22	(922		)	(922		)
Balance at March 31, 2017	32,133	$	321	$	265,809		$	215,998	$	(7,016	)	552	$	(8,807	)	$	466,305
Net income	—	—		—			12,769		—			—	—			12,769
Foreign currency translation adjustment	—	—		—			—		1,091			—	—			1,091
Adjustment to retirement benefit liability, net of taxes of $(1)	—	—		—			—		(3		)	—	—			(3		)
Adjustment to post employment health care benefit liability, net of taxes of $17	—	—		—			—		30			—	—			30
Stock compensation expense	—	—		1,556			—		—			—	—			1,556
Stock options exercised	15	—		236			—		—			—	—			236
Issuance of restricted stock	2	—		—			—		—			—	—			—
Net settlement of restricted stock units	5	—		—			—		—			2	(81		)	(81		)
Balance at June 30, 2017	32,155	$	321	$	267,601		$	228,767	$	(5,898	)	554	$	(8,888	)	$	481,903
Net income	—	—		—			20,619		—			—	—			20,619
Foreign currency translation adjustment	—	—		—			—		1,581			—	—			1,581
Adjustment to retirement benefit liability, net of taxes of $(2)	—	—		—			—		(2		)	—	—			(2		)
Adjustment to post employment health care benefit liability, net of taxes of $18	—	—		—			—		29			—	—			29
Stock compensation expense	—	—		1,878			—		—			—	—			1,878
Stock options exercised	24	—		402			—		—			—	—			402
Issuance of restricted stock	—	—		—			—		—			—	—			—
Net settlement of restricted stock units	96	1		(1		)	—		—			34	(979		)	(979		)
Balance at September 30, 2017	32,275	$	322	$	269,880		$	249,386	$	(4,290	)	588	$	(9,867	)	$	505,431

See accompanying notes to consolidated financial statements.

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GIBRALTAR INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)


(1)	CONSOLIDATED FINANCIAL STATEMENTS

The accompanying unaudited consolidated financial statements 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 the full year. The accompanying unaudited consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in our annual Form 10-K for the year ended December 31, 2017.

The balance sheet at December 31, 2017 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.

Refer to Note 1 of the Company's annual report on Form 10-K for the year ended December 31, 2017 for the cumulative effect of an accounting change adjustment recognized during the quarter ended March 31, 2017 and presented in the Company's Consolidated Statement of Shareholders' Equity for the nine months ended September 30, 2017 in this Form 10-Q.

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(2)	RECENT ACCOUNTING PRONOUNCEMENTS

Recent Accounting Pronouncements Adopted



Standard	Description	Financial Statement Effect or Other Significant Matters
ASU No. 2014-09 Revenue from Contracts with Customers (Topic 606) And All Related ASUs	The standard requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard also requires additional disclosures about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and assets recognized from costs incurred to obtain or fulfill a contract. The provisions of the standard, as well as all subsequently issued clarifications to the standard, are effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. The standard can be adopted using either a full retrospective or modified retrospective approach.	The Company has adopted this standard using the modified retrospective method. The Company recognized the cumulative- effect adjustment of initially applying this standard of $274,000 to the opening balance of retained earnings. The comparative information has not been restated and continues to be reported under the accounting standard in effect for that period. Refer to Note 4 for further disclosure of the financial statement effect and other significant matters as a result of the adoption of this standard. Date of adoption: Q1 2018
ASU No. 2016-15 Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments	The standard provides guidance on eight specific cash flow issues to reduce diversity in reporting. The provisions of this standard are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted.	The Company has adopted this standard and it did not have any impact on the Company's consolidated financial statements. Date of adoption: Q1 2018
ASU No. 2016-16 Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory	The standard allows an entity to recognize income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The provisions of this standard are effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period for which financial statements (interim or annual) have not been issued or made available for issuance.	The Company has adopted this standard and it did not have any impact on the Company's consolidated financial statements. Date of adoption: Q1 2018
ASU No. 2018-02 Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income	The standard allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. The provisions of this standard are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption of the standard is permitted, including adoption in any interim period.	The Company has early adopted this standard. As a result of adopting this standard, the Company recorded an adjustment of $350,000 from accumulated other comprehensive income to retained earnings in the consolidated statement of shareholders' equity as of the beginning of the January 1, 2018, and will record any subsequent period adjustments, if changes to provisional amounts result in additional amounts stranded in accumulated other comprehensive income. Date of adoption: Q1 2018

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Recent Accounting Pronouncements Not Yet Adopted



Standard	Description	Financial Statement Effect or Other Significant Matters
ASU No. 2016-02 Leases (Topic 842)	The standard requires lessees to recognize most leases as assets and liabilities on the balance sheet, but record expenses on the statement of operations in a manner similar to current accounting. For lessors, the guidance modifies the classification criteria and accounting for sales-type and direct financing leases. The standard also requires additional disclosures about leasing arrangements and requires a modified retrospective transition approach for existing leases, whereby the standard will be applied to the earliest year presented. The provisions of the standard are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted.	The Company continues to evaluate the impact of the standard on the Company’s consolidated financial statements and related disclosures. The new standard requires lessees to recognize a lease liability and right of use asset on the balance sheet. While the adoption will result in an increase to assets and liabilities on the Company’s balance sheet, we do not expect that the impact will be material. In addition, the Company does not expect that the adoption will result in a material impact to our consolidated statement of operations. The Company intends to adopt this guidance by applying the transition provisions on a modified retrospective basis as of the effective date January 1, 2019. Planned date of adoption: Q1 2019


(3)	ACCOUNTS RECEIVABLE, NET

Accounts receivable consists of the following (in thousands):



	September 30, 2018			December 31, 2017
Trade accounts receivable	$	166,208		$	140,209
Costs in excess of billings	21,522			11,610
Total accounts receivables	187,730			151,819
Less allowance for doubtful accounts	(6,855		)	(6,434		)
Accounts receivable	$	180,875		$	145,385

Refer to Note 4 of the Company's consolidated financial statements included in this quarterly report on Form 10-Q for additional information concerning the Company's costs in excess of billings.


(4)	REVENUE

Sales includes revenue from contracts with customers from roof and foundation ventilation products; centralized mail systems and electronic package solutions; rain dispersion products and roofing accessories; expanded and perforated metal; perimeter security solutions; expansion joints and structural bearings; designing, engineering, manufacturing and installation of solar racking systems and greenhouse structures.

Revenue recognition

Revenue is recognized when, or as, the Company transfers control of promised products or service to a customer in an amount that reflects the consideration the Company expects to be entitled in exchange for transferring those products or service. Refer to Note 16 of this quarterly report on Form 10Q for additional information related to revenue recognized by timing of transfer of control by reportable segment.

Payment terms and conditions vary by contract, although terms generally include a requirement of payment within a range from 30 to 60 days, or in certain cases, up front deposits. In circumstances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined that the Company's contracts generally

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do not include a significant financing component. Taxes collected from customers, which are subsequently remitted to governmental authorities, are excluded from sales.

Performance obligations satisfied at a point in time and significant judgments

The majority of the Company's revenue from contracts with customers is recognized when the Company transfers control of the promised product at a point in time, which is determined when the customer has legal title and the significant risks and rewards of ownership of the asset, and the Company has a present right to payment for the product. These contracts with customers include promised products, which are generally capable of being distinct and accounted for as separate performance obligations. Accordingly, the Company allocates the transaction price, which is generally the quoted price per terms of the contract and the consideration the Company expects to receive, to each performance obligation in an amount based on an observable price of the products as the Company frequently sells these products separately in similar circumstances and to similar customers. These products are generally sold with rights of return and these contracts may provide other credits or incentives, which are accounted for as variable consideration. Variable consideration is estimated at the most likely amount to predict the consideration to which the Company will be entitled, and only to the extent it is probable that a subsequent change in estimate will not result in a significant revenue reversal when estimating the amount of revenue to recognize. Sales returns, allowances, and customer incentives, including rebates, are treated as reductions to the sales transaction price and based largely on an assessment of all information (i.e., historical, current and forecasted) that is reasonably available to the Company, and estimated at contract inception and updated at the end of each reporting period as additional information becomes available.

Performance obligations satisfied over time and significant judgments

For contracts with customers which the Company satisfies a promise to the customer to construct a certain asset that the customer controls as it is being created or enhanced, or a promise to provide a product that has no alternative use to the Company and the Company has enforceable rights to payment, the Company satisfies the performance obligation and recognizes revenue over time. For the contracts to construct a certain asset, the Company determines that the customer controls the asset while it is being constructed. For the contracts for products that have no alternative use and for which the Company has an enforceable right to payment, the Company identifies these products as products that are not a standard inventory item or the Company cannot readily direct the product to another customer or use without incurring a significant economic loss, or significant costs to rework the product.

When the promised products and services are to construct a certain asset that the customer controls, the entire contract is accounted for as one performance obligation. The Company determines the transaction price for each contract based on the consideration the Company expects to receive for the promised products and services under the entire contract, which is generally the stated contract price based on an expected cost plus a margin approach.

When the promised products do not have an alternative use to the Company, and the Company has enforceable rights to payment, the transaction price is determined for each contract based on the consideration the Company expects to receive for the promised products under the contract and is generally the stated contract price based on an expected cost plus a margin approach for each performance obligation. These promised products are generally capable of being distinct and accounted for as separate performance obligations.

For the above contracts with customers with respect to which the Company satisfies a performance obligation over time, the Company recognizes revenue based on the extent of progress towards completion of the performance obligation. The cost-to-cost measure of progress best depicts the transfer of control to the customer which occurs as the Company incurs costs on the contract as the incurred costs are proportionate to the Company's progress in satisfying the performance obligation. Under the cost-to-cost measure of progress, the extent of progress toward completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. Revenues are recognized proportionally as costs are incurred. Costs to fulfill a contract include all direct costs related to contract performance. Selling and administrative expenses are charged to operations as incurred. Provision for loss on an uncompleted performance obligation is recognized in the period in which such loss is determined.

The Company regularly reviews the progress and performance of the performance obligation recognized over time under the cost-to-cost method. Any adjustments to net sales, cost of sales, and the related impact to operating income are recognized as necessary in the period they become known. Changes in estimates of net sales, cost of sales, and the related impact to operating income are recognized on a cumulative catch-up basis, which recognizes in the current

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period the cumulative effect of the changes on current or prior periods based on a performance obligation's cost-to-cost measure of progress.

The Company also recognizes revenues from services contracts over time. For these contracts, the transaction price is determined for each contract based on the consideration the Company expects to receive for the promised service under the contract, which generally is the stated contract price. In order to estimate the standalone selling price of the performance obligation, the Company evaluates the market in which the promised service is sold and estimates the price that customers in the market would be willing to pay. Further, the Company recognizes revenue over time during the term of the agreement as the customer is simultaneously receiving and consuming the benefits provided throughout the Company's performance. Therefore due to control transferring over time, the Company recognizes revenue on a straight-line basis throughout the contract period.

Remaining performance obligations

As of September 30, 2018, the Company's remaining performance obligations are part of contracts that have an original expected duration of one year or less. Therefore, any remaining performance obligations are not required to be disclosed.

Contract assets

Contract assets consist of costs in excess of billings. Costs in excess of billings includes unbilled amounts resulting from revenues under contracts with customers that are satisfied over time and when the cost-to-cost measurement method of revenue recognition is utilized and revenue recognized exceeds the amount billed to the customer, and right to payment is not just subject to the passage of time. Amounts may not exceed their net realizable value. Costs in excess of billings are classified as current assets and are reported net of contract billings on a contract-by-contract basis at the end of each reporting period.

Contract liabilities

Contract liabilities consist of billings in excess of cost. Billings in excess of cost includes billings in excess of revenue recognized and deferred revenue, which includes advanced payments, up-front payments, and progress billing payments. Billings in excess of cost are reported net of contract cost on a contract-by-contract basis at the end of each reporting period and are classified as current liabilities. To determine the revenue recognized in the period from the beginning balance of billings in excess of cost, the contract liability as of the beginning of the period is recognized as revenue on a contract by contract basis when the Company incurs costs to satisfy the performance obligation related to the individual contract. Once the beginning contract liability balance for an individual contract has been fully recognized as revenue, any additional payments received in the period are recognized as revenue once the related costs have been incurred.

Costs to obtain a contract with a customer

The Company recognizes an asset for the incremental costs of obtaining a contract with a customer if the Company expects the benefit of those costs to be longer than one year. As of September 30, 2018, the Company does not have any open contracts with an original expected duration of greater than one year, and therefore, we expense such costs as incurred. These incremental costs include, but are not limited to, sales commissions incurred to obtain a contract with a customer.

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Contract assets and contract liabilities

The Company's contract assets and contract liabilities consist of costs in excess of billings and billings in excess of cost, respectively. The following table presents the beginning and ending balances and significant changes in the costs in excess of billings and billings in excess of cost balance during the three months ended September 30, 2018:



	Costs in Excess of Billings			Billings in Excess of Cost
Beginning balance, January 1, 2018 (1)	$	16,532		$	(12,779	)
Reclassification of the beginning balances of:
Costs in excess of billings to receivables	(15,450		)	—
Billings in excess of cost to revenue	—			9,294
Costs in excess of billings recognized, net of reclassification to receivables	20,440			—
Net billings in advance and cash payments not recognized as revenue	—			(18,415		)
Ending balance, September 30, 2018	$	21,522		$	(21,900	)



(1) Due to the adoption of ASC 606 effective January 1, 2018, the Company recorded a transition adjustment to the opening balance of "Costs in excess of billings" at January 1, 2018. There were no transition adjustments to the opening balance of "Billings in Excess of Cost" at January 1, 2018. Refer to "Transition disclosures" below for further explanation of cumulative effect of the changes made to the Company's consolidated January 1, 2018 balance sheet for the adoption of ASC 606.

Transition disclosures

On January 1, 2018, the Company adopted the accounting standard ASC 606, Revenue from Contracts with Customers, only for contracts that were not completed at the date of initial application using the modified retrospective method. The Company recognized the cumulative effect of initially applying ASC 606 as an adjustment to the opening balance of retained earnings. The comparative period information has not been restated and continues to be reported under the accounting standards in effect for that period. The Company does not expect the adoption of this standard to have a material impact to the Company's net income on an ongoing basis.

A majority of the Company's revenues continue to be recognized when products are shipped or service is provided and the customer takes ownership and assumes the risk of loss. For certain custom fabricated products for which there is no alternative use and the Company has enforceable rights to payment for performance to date where revenue was previously recognized upon transfer of title and risk of loss, the Company now recognizes revenue as the Company satisfies its performance over time in accordance with ASC 606.

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The cumulative effect of the changes made to the Company's consolidated January 1, 2018 balance sheet for the adoption of ASC 606 is as follows (in thousands):



	Balance at December 31, 2017		Adjustments			Balance at January 1, 2018
Assets
Accounts receivable, net	$	145,385	$	4,922		$	150,307
Costs in excess of billings (1)	$	11,610	$	4,922		$	16,532
Inventories	$	86,372	$	(4,735	)	$	81,637
Total current assets	$	462,764	$	187		$	462,951
Total assets	$	991,385	$	187		$	991,572

Liabilities
Accrued expenses	$	75,467	$	(87	)	$	75,380
Total current liabilities	$	171,033	$	(87	)	$	170,946

Shareholders' equity
Retained earnings	$	274,562	$	274		$	274,836
Total shareholders' equity	$	531,719	$	274		$	531,993
Total liabilities and shareholders' equity	$	991,385	$	187		$	991,572



(1) The balance presented at December 31, 2017 for "Costs in excess of billings" represents the balance reported in Note 2 of the Company's annual report on Form 10-K for the year ended December 31, 2017. This balance was included within the total balance of "Accounts receivable, net" presented on the Company's Consolidated Balance Sheet on Form 10-K as of December 31, 2017. Due to the adoption of ASC 606 effective January 1, 2018, the Company recorded a transition adjustment to the opening balance of "Costs in excess of billings" at January 1, 2018 that is included in the "Accounts receivable, net" line item presented on the Company's Consolidated Balance Sheet and disclosed in Note 3 of this Form 10-Q for the nine months ended September 30, 2018.

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In accordance with ASC 606, the disclosure of the impact of adoption on the Company's consolidated statement of income and balance sheet for the periods ended September 30, 2018 is as follows (in thousands):



Consolidated Statement of Income
	Three Months Ended September 30, 2018
	As Reported		Without Adoption of ASC 606		Effect of Change Higher (Lower)

Net sales	$	280,086	$	281,156	$	(1,070	)
Cost of sales	209,807		210,878		(1,071		)
Gross profit	70,279		70,278		1
Provision for income taxes	6,473		6,473		—
Net income	$	19,503	$	19,502	$	1



Consolidated Statement of Income
	Nine Months Ended September 30, 2018
	As Reported		Without Adoption of ASC 606		Effect of Change Higher (Lower)

Net sales	$	761,459	$	760,277	$	1,182
Cost of sales	572,359		572,039		320
Gross profit	189,100		188,238		862
Provision for income taxes	15,574		15,332		242
Net income	$	50,692	$	50,072	$	620



Consolidated Balance Sheet
	September 30, 2018
	As Reported		Without Adoption of ASC 606		Effect of Change Higher (Lower)
Assets
Accounts receivable, net	$	180,875	$	174,426	$	6,449
Inventories	97,486		102,662		(5,176		)
Total current assets	532,723		531,450		1,273
Total assets	1,053,787		1,052,514		1,273

Liabilities
Accrued expenses	76,268		75,889		379
Total current liabilities	191,565		191,186		379

Shareholders' equity
Retained earnings	325,878		324,984		894
Total shareholders' equity	582,875		581,981		894
Total liabilities and shareholders' equity	$	1,053,787	$	1,052,514	$	1,273

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(5)	INVENTORIES

Inventories consist of the following (in thousands):



	September 30, 2018		December 31, 2017
Raw material	$	51,860	$	42,661
Work-in-process	7,861		10,598
Finished goods	37,765		33,113
Total inventories	$	97,486	$	86,372

(6) ACQUISITIONS

On August 21, 2018, the Company acquired all of the outstanding stock of SolarBOS. SolarBOS is a provider of electrical balance of systems products, which consists of electrical components such as wiring, switches, and combiner boxes that support photovoltaic systems, for the U.S. solar renewable energy market. The Company expects the acquisition of SolarBOS to enable the Company to provide complementary product offerings to its existing customers and strengthen its position in the solar renewable energy market. The results of SolarBOS have been included in the Company's consolidated financial results since the date of acquisition (within the Company's Renewable Energy and Conservation segment). The preliminary aggregate purchase consideration for the acquisition of SolarBOS was $6.5 million, which includes a working capital adjustment and certain other adjustments provided for in the stock purchase agreement. The acquisition was financed through cash on hand.

The preliminary purchase price for the acquisition was allocated to the assets acquired and liabilities assumed based upon their respective fair values. The excess consideration was recorded as goodwill and approximated $2.8 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 solar renewable energy markets.

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



Cash	$	915
Working capital	828
Property, plant and equipment	547
Acquired intangible assets	1,450
Other assets	13
Other liabilities	(51		)
Goodwill	2,838
Fair value of purchase consideration	$	6,540

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



	Fair Value		Estimated Useful Life
Trademarks	$	300	3 years
Technology	450		9 years
Customer relationships	700		9 years
Total	$	1,450

The Company incurred certain acquisition-related costs composed of legal and consulting fees, and these costs were recognized as a component of selling, general and administrative expenses in the consolidated statements of income. Acquisition-related costs were $0.5 million, for both the three and nine months ended September 30, 2018.

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On February 22, 2017, the Company acquired all of the outstanding stock of Package Concierge. Package Concierge is a leading provider of multifamily electronic package delivery locker systems in the United States.

The acquisition of Package Concierge is expected to enable the Company to expand its position in the fast-growing package delivery solutions market. The results of Package Concierge have been included in the Company's consolidated financial results since the date of acquisition (within the Company's Residential Products segment). The final aggregate purchase consideration for the acquisition of Package Concierge was $18.9 million.

The purchase price for the acquisition was allocated to the assets acquired and liabilities assumed based upon their respective fair values. The excess consideration was recorded as goodwill and approximated $16.8 million, which is not 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 building products markets.

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



Cash	$	590
Working capital	(1,998		)
Property, plant and equipment	55
Acquired intangible assets	3,600
Other assets	8
Deferred income taxes	(128		)
Goodwill	16,790
Fair value of purchase consideration	$	18,917

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



	Fair Value		Estimated Useful Life
Trademarks	$	600	Indefinite
Technology	1,300		10 years
Customer relationships	1,700		7 years
Total	$	3,600

The acquisition of Package Concierge was funded from available cash on hand. The Company incurred certain acquisition-related costs composed of legal and consulting fees, and these costs were recognized as a component of selling, general and administrative expenses in the consolidated statements of income. Acquisition-related costs were $31 thousand and $146 thousand for the three and nine months ended September 30, 2017, respectively.

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(7)	GOODWILL AND RELATED INTANGIBLE ASSETS

Goodwill

The changes in the carrying amount of goodwill for the nine months ended September 30, 2018 are as follows (in thousands):



	Residential Products		Industrial and Infrastructure Products			Renewable Energy & Conservation			Total
Balance at December 31, 2017	$	198,075	$	54,280		$	68,719		$	321,074
Acquired goodwill	—		—			2,838			2,838
Adjustments to prior year acquisitions	—		(38		)	—			(38		)
Foreign currency translation	—		(165		)	(388		)	(553		)
Balance at September 30, 2018	$	198,075	$	54,077		$	71,169		$	323,321

Acquired Intangible Assets

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



	September 30, 2018				December 31, 2017
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization		Estimated Life
Indefinite-lived intangible assets:
Trademarks	$	45,096	$	—	$	45,107	$	—	Indefinite
Finite-lived intangible assets:
Trademarks	6,148		3,397		5,876		3,062		3 to 15 Years
Unpatented technology	28,644		13,406		28,107		12,033		5 to 20 Years
Customer relationships	70,593		34,626		80,707		39,652		5 to 17 Years
Non-compete agreements	1,649		1,156		1,649		931		4 to 10 Years
	107,034		52,585		116,339		55,678
Total acquired intangible assets	$	152,130	$	52,585	$	161,446	$	55,678

The Company recognized impairment charges related to a finite-lived intangible asset for the three and nine months ended September 30, 2018 of $1.3 million. The charge relates to the discontinuation of lower margin sales in the Residential Products segment.

The following table summarizes the acquired intangible asset amortization expense for the three and nine months ended September 30 (in thousands):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Amortization expense	$	2,121	$	2,208	$	6,408	$	6,600

Amortization expense related to acquired intangible assets for the remainder of fiscal 2018 and the next five years thereafter is estimated as follows (in thousands):



	2018		2019		2020		2021		2022		2023
Amortization expense	$	1,960	$	7,841	$	7,329	$	6,726	$	6,315	$	5,776

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(8)	LONG-TERM DEBT

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



	September 30, 2018			December 31, 2017
Senior Subordinated 6.25% Notes	$	210,000		$	210,000
Other debt	2,000			2,400
Less unamortized debt issuance costs	(1,791		)	(2,379		)
Total debt	210,209			210,021
Less current maturities	400			400
Total long-term debt	$	209,809		$	209,621

The Company's Fifth Amended and Restated Credit Agreement dated December 9, 2015 (the "Senior Credit Agreement") was amended to convert our secured asset based credit facility into a secured cash flow revolver, and terminates on December 9, 2020.

The Senior Credit Agreement provides for a revolving credit facility and letters of credit in an aggregate amount of $300 million. The Company has the option to request additional financing from the banks to either increase the revolving credit facility to $500 million or to provide a term loan of up to $200 million. The Senior Credit Agreement contains three financial covenants. As of September 30, 2018, the Company is in compliance with all three covenants.

Borrowings under the Senior Credit Agreement are secured by the trade receivables, inventory, personal property, equipment, and certain real property of the Company’s significant domestic subsidiaries. Interest rates on the revolving credit facility are based on the LIBOR plus an additional margin that ranges from 1.25% to 2.25% for LIBOR loans based on the Total Leverage Ratio.

In addition, the revolving credit facility is subject to an undrawn commitment fee ranging between 0.20% and 0.30% based on the Total Leverage Ratio and the daily average undrawn balance.

Standby letters of credit of $9.5 million have been issued under the Senior Credit Agreement on behalf of the Company as of September 30, 2018. These letters of credit reduce the amount otherwise available under the revolving credit facility. As of September 30, 2018, the Company had $290.5 million of availability under the revolving credit facility. No borrowings were outstanding under the revolving credit facility at September 30, 2018 and December 31, 2017.

On January 31, 2013, the Company issued $210 million of 6.25% Senior Subordinated Notes ("6.25% Notes") due February 1, 2021.The provisions of the 6.25% Notes include, without limitation, restrictions on indebtedness, liens, and distributions from restricted subsidiaries, asset sales, affiliate transactions, dividends, and other restricted payments. Dividend payments are subject to annual limits and interest is paid semiannually on February 1 and August 1 of each year.

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(9)	ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME

The following tables summarize the cumulative balance of each component of accumulated other comprehensive loss, net of tax, for the nine months ended September 30, (in thousands):



	Foreign Currency Translation Adjustment			Minimum Pension Liability Adjustment			Unamortized Post Retirement Health Care Costs			Total Pre-Tax Amount			Tax (Benefit) Expense			Accumulated Other Comprehensive (Loss) Income
Balance at December 31, 2017	$	(2,698	)	$	171		$	(2,809	)	$	(5,336	)	$	(970	)	$	(4,366	)
Cumulative effect of accounting change (see Note 2)	—			15			(365		)	(350		)	—			(350		)
Minimum pension and post retirement health care plan adjustments	—			(7		)	44			37			10			27
Foreign currency translation adjustment	110			—			—			110			—			110
Balance at March 31, 2018	$	(2,588	)	$	179		$	(3,130	)	$	(5,539	)	$	(960	)	$	(4,579	)
Minimum pension and post retirement health care plan adjustments	—			(7		)	44			37			11			$	26
Foreign currency translation adjustment	(1,787		)	—			—			(1,787		)	—			$	(1,787	)
Balance at June 30, 2018	$	(4,375	)	$	172		$	(3,086	)	$	(7,289	)	$	(949	)	$	(6,340	)
Minimum pension and post retirement health care plan adjustments	—			(7		)	44			37			10			27
Foreign currency translation adjustment	139			—			—			139			—			139
Balance at September 30, 2018	$	(4,236	)	$	165		$	(3,042	)	$	(7,113	)	$	(939	)	$	(6,174	)



	Foreign Currency Translation Adjustment			Minimum Pension Liability Adjustment			Unamortized Post Retirement Health Care Costs			Total Pre-Tax Amount			Tax (Benefit) Expense			Accumulated Other Comprehensive (Loss) Income
Balance at December 31, 2016	$	(5,848	)	$	197		$	(3,150	)	$	(8,801	)	$	(1,080	)	$	(7,721	)
Minimum pension and post retirement health care plan adjustments	—			(5		)	48			43			17			26
Foreign currency translation adjustment	$	679		$	—		$	—		$	679		$	—		$	679
Balance at March 31, 2017	(5,169		)	192			(3,102		)	(8,079		)	(1,063		)	$	(7,016	)
Minimum pension and post retirement health care plan adjustments	$	—		$	(4	)	$	47		$	43		$	16		$	27
Foreign currency translation adjustment	1,091			—			—			1,091			—			1,091
Balance at June 30, 2017	(4,078		)	188			(3,055		)	(6,945		)	(1,047		)	(5,898		)
Minimum pension and post retirement health care plan adjustments	$	—		$	(4	)	$	47		$	43		$	16		$	27
Foreign currency translation adjustment	$	1,581		$	—		$	—		$	1,581		$	—		$	1,581
Balance at September 30, 2017	$	(2,497	)	$	184		$	(3,008	)	$	(5,321	)	$	(1,031	)	$	(4,290	)

The realized adjustments relating to the Company’s minimum pension liability and post retirement health care costs were reclassified from accumulated other comprehensive loss and included in other expense in the consolidated statements of income.


(10)	EQUITY-BASED COMPENSATION

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On May 4, 2018, the shareholders of the Company approved the adoption of the Gibraltar Industries, Inc. 2018 Equity Incentive Plan (the "2018 Plan"). The 2018 Plan provides for the issuance of up to 1,000,000 shares of common stock and supplements the remaining shares available for issuance under the existing Gibraltar Industries, Inc. 2015 Equity Incentive Plan (the "2015 Plan"). Both the 2018 Plan and the 2015 Plan allow the Company to grant equity-based incentive compensation awards, in the form of non-qualified options, restricted shares, restricted stock units, performance shares, performance stock units, and stock rights, to eligible participants.

In 2016, the shareholders of the Company approved the adoption of the Gibraltar Industries, Inc. 2016 Stock Plan for Non-Employee Directors ("Non-Employee Directors Plan") which allows the Company to grant awards of shares of the Company's common stock to 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.

Equity Based Awards - Settled in Stock

The following table sets forth the number of equity-based awards granted during the nine months ended September 30, which will convert to shares upon vesting, along with the weighted average grant date fair values:



	2018			2017
Awards	Number of Awards (1)	Weighted Average Grant Date Fair Value		Number of Awards (2)	Weighted Average Grant Date Fair Value
Performance stock units	135,540	$	33.60	108,748	$	42.72
Restricted stock units	95,674	$	36.81	120,048	$	37.14
Options	—	$	—	25,000	$	42.35
Deferred stock units	10,255	$	35.96	10,170	$	34.42
Common shares	2,113	$	35.50	2,034	$	34.42

(1) Performance stock units granted will convert to shares based on the Company's actual return on invested capital ("ROIC") relative to the ROIC targeted for the performance period ended December 31, 2018.

(2) Performance stock units granted include 78,482 units awarded in February 2017 which will convert to 23,546 shares to be issued in February 2020, representing 30% of the targeted 2017 award, based on the Company’s actual ROIC compared to ROIC target for the performance period ended December 31, 2017. The remaining performance stock units granted include 20,000 units awarded in February 2017 and 10,266 units awarded in April 2017. The number of these shares to be issued to the recipients will be determined based upon the ranking of the Company

Closing Price ($)	Shares Out (MM)	Market Cap ($MM)
$39.14	32	$1,260

10-Q	2018-09-30	Quarter: 2018-09-30
10-Q	2018-06-30	Quarter: 2018-06-30
10-Q	2018-03-31	Quarter: 2018-03-31
10-K	2017-12-31	Annual: 2017-12-31
10-Q	2017-09-30	Quarter: 2017-09-30
10-Q	2017-06-30	Quarter: 2017-06-30
10-Q	2017-03-31	Quarter: 2017-03-31
10-K	2016-12-31	Annual: 2016-12-31
10-Q	2016-09-30	Quarter: 2016-09-30
10-Q	2016-06-30	Quarter: 2016-06-30
10-Q	2016-03-31	Quarter: 2016-03-31
10-K	2015-12-31	Annual: 2015-12-31

8-K	2019-02-21	Earnings, Regulation FD, Exhibits
8-K	2019-01-25	Enter Agreement, Enter Agreement, Other Events, Exhibits
8-K	2019-01-25	Enter Agreement, Enter Agreement, Other Events, Exhibits
8-K	2019-01-07	Officers, Exhibits
8-K	2018-12-20	Other Events, Other Events, Exhibits
8-K	2018-08-23	Other Events, Other Events, Exhibits
8-K	2018-07-26	Earnings, Regulation FD, Exhibits
8-K	2018-06-06	Officers, Other Events, Exhibits
8-K	2018-05-07	Earnings, Regulation FD, Officers, Shareholder Vote, Other Events, Exhibits
8-K	2018-02-23	Earnings, Regulation FD, Exhibits

MT	Arcelormittal
PKX	Posco
STLD	Steel Dynamics
CRS	Carpenter Technology
AKS	AK Steel Holding
IIIN	Insteel Industries
TWI	Titan International
USAP	Universal Stainless & Alloy Products
SYNL	Synalloy
FRD	Friedman Industries

EX-31.1	q32018exhibit311.htm
EX-31.2	q32018exhibit312.htm
EX-32.1	q32018exhibit321.htm
EX-32.2	q32018exhibit322.htm