Company Quick10K Filing
Gibraltar Industries
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$0.00 33 $1,272
10-Q 2019-10-25 Quarter: 2019-09-30
10-Q 2019-07-26 Quarter: 2019-06-30
10-Q 2019-05-03 Quarter: 2019-03-31
10-K 2019-02-27 Annual: 2018-12-31
10-Q 2018-11-01 Quarter: 2018-09-30
10-Q 2018-07-26 Quarter: 2018-06-30
10-Q 2018-05-04 Quarter: 2018-03-31
10-K 2018-02-27 Annual: 2017-12-31
10-Q 2017-11-03 Quarter: 2017-09-30
10-Q 2017-07-27 Quarter: 2017-06-30
10-Q 2017-05-05 Quarter: 2017-03-31
10-K 2017-02-21 Annual: 2016-12-31
10-Q 2016-11-04 Quarter: 2016-09-30
10-Q 2016-07-28 Quarter: 2016-06-30
10-Q 2016-05-06 Quarter: 2016-03-31
10-K 2016-02-18 Annual: 2015-12-31
10-Q 2015-10-28 Quarter: 2015-09-30
10-Q 2015-08-07 Quarter: 2015-06-30
10-Q 2015-05-07 Quarter: 2015-03-31
10-K 2015-02-24 Annual: 2014-12-31
10-Q 2014-10-28 Quarter: 2014-09-30
10-Q 2014-08-05 Quarter: 2014-06-30
10-Q 2014-05-02 Quarter: 2014-03-31
10-K 2014-02-20 Annual: 2013-12-31
10-Q 2013-10-31 Quarter: 2013-09-30
10-Q 2013-08-01 Quarter: 2013-06-30
10-Q 2013-05-02 Quarter: 2013-03-31
10-Q 2012-11-01 Quarter: 2012-09-30
10-Q 2012-08-02 Quarter: 2012-06-30
10-Q 2012-05-03 Quarter: 2012-03-31
10-Q 2011-11-04 Quarter: 2011-09-30
10-Q 2011-08-05 Quarter: 2011-06-30
10-Q 2011-05-05 Quarter: 2011-03-31
10-K 2011-02-25 Annual: 2010-12-31
10-Q 2010-11-04 Quarter: 2010-09-30
10-Q 2010-08-09 Quarter: 2010-06-30
10-Q 2010-05-06 Quarter: 2010-03-31
10-K 2010-02-25 Annual: 2009-12-31
8-K 2020-01-17 Other Events, Other Events, Exhibits
8-K 2019-10-25 Earnings, Regulation FD, Exhibits
8-K 2019-07-26 Earnings, Regulation FD, Exhibits
8-K 2019-05-06 Earnings, Regulation FD, Shareholder Vote, Exhibits
8-K 2019-03-19 Officers, Exhibits
8-K 2019-02-21 Earnings, Regulation FD, Exhibits
8-K 2019-01-25 Enter Agreement, Enter Agreement, Other Events, Exhibits
8-K 2019-01-07 Officers, Exhibits
8-K 2018-12-20 Other Events, Other Events, Exhibits
8-K 2018-11-01 Earnings, Regulation FD, Officers, 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
ROCK 2019-09-30
Part I. Financial Information
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Qualitative and Quantitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II. Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-31.1 q32019exhibit311.htm
EX-31.2 q32019exhibit312.htm
EX-32.1 q32019exhibit321.htm
EX-32.2 q32019exhibit322.htm

Gibraltar Industries Earnings 2019-09-30

ROCK 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

Comparables ($MM TTM)
Ticker M Cap Assets Liab Rev G Profit Net Inc EBITDA EV G Margin EV/EBITDA ROA
GGB 2,145 51,281 25,342 0 0 0 0 2,139 0%
CMC 1,817 3,767 2,203 5,594 734 164 442 3,002 13% 6.8 4%
ROCK 1,272 907 277 1,011 231 59 102 1,190 23% 11.7 6%
MTL 833 317,625 550,820 0 0 0 0 833 0%
AKS 722 4,687 4,211 6,791 0 206 581 2,626 0% 4.5 4%
SXC 574 2,082 1,360 1,532 40 38 148 1,324 3% 9.0 2%
SXCP 531 1,634 1,038 908 32 52 224 1,348 4% 6.0 3%
HAYN 457 588 258 483 60 6 24 435 12% 17.9 1%
IIIN 432 305 56 464 46 17 38 424 10% 11.3 6%
TMST 351 1,180 572 1,524 106 -38 52 330 7% 6.3 -3%

Document
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Table of Contents

 
 
 
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 gibindcolorlogonotaga03.gif
 
FORM 10-Q
 
 
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2019
OR
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 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: (716826-6500
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 definitions 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
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 October 24, 2019, the number of common shares outstanding was: 32,272,420.



Table of Contents

GIBRALTAR INDUSTRIES, INC.
INDEX
 
 
PAGE 
NUMBER
PART I.
 
 
Item 1.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Item 2.
 
Item 3.
 
Item 4.
 
PART II.
 
 
Item 1.
 
Item 1A.
 
Item 2.
 
Item 3.
 
Item 4.
 
Item 5.
 
Item 6.
 
 
 


2


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 
 September 30,
 
Nine Months Ended 
 September 30,
 
2019
 
2018
 
2019
 
2018
Net Sales
$
299,236

 
$
280,086

 
$
789,308

 
$
761,459

Cost of sales
222,658

 
209,807

 
605,272

 
572,359

Gross profit
76,578

 
70,279

 
184,036

 
189,100

Selling, general, and administrative expense
45,158

 
40,875

 
115,444

 
113,579

Income from operations
31,420

 
29,404

 
68,592

 
75,521

Interest expense
17

 
2,906

 
2,297

 
9,305

Other expense (income)
84

 
522

 
660

 
(50
)
Income before taxes
31,319

 
25,976

 
65,635

 
66,266

Provision for income taxes
6,843

 
6,473

 
14,901

 
15,574

Net income
$
24,476

 
$
19,503

 
$
50,734

 
$
50,692

 
 
 
 
 
 
 
 
Net earnings per share:
 
 
 
 
 
 
 
Basic
$
0.75

 
$
0.61

 
$
1.57

 
$
1.59

Diluted
$
0.75

 
$
0.60

 
$
1.55

 
$
1.56

Weighted average shares outstanding:
 
 
 
 
 
 
 
Basic
32,470

 
32,115

 
32,357

 
31,922

Diluted
32,770

 
32,571

 
32,677

 
32,524

See accompanying notes to consolidated financial statements.

3


Table of Contents

GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
(unaudited)
 
 
Three Months Ended 
 September 30,
 
Nine Months Ended 
 September 30,
 
2019
 
2018
 
2019
 
2018
Net income
$
24,476

 
$
19,503

 
$
50,734

 
$
50,692

Other comprehensive (loss) income:
 
 
 
 
 
 
 
Foreign currency translation adjustment
(664
)
 
139

 
1,176

 
(1,538
)
Cumulative effect of accounting change

 

 

 
(350
)
Minimum pension and post retirement benefit plan adjustments
12

 
27

 
36

 
80

Other comprehensive (loss) income
(652
)
 
166

 
1,212

 
(1,808
)
Total comprehensive income
$
23,824

 
$
19,669

 
$
51,946

 
$
48,884

See accompanying notes to consolidated financial statements.

4


Table of Contents

GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)

 
September 30,
2019
 
December 31,
2018
 
(unaudited)
 
 
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
137,618

 
$
297,006

Accounts receivable, net
196,334

 
140,283

Inventories
83,048

 
98,913

Other current assets
17,527

 
8,351

Total current assets
434,527

 
544,553

Property, plant, and equipment, net
95,075

 
95,830

Operating lease assets
28,573

 

Goodwill
327,983

 
323,671

Acquired intangibles
96,185

 
96,375

Other assets
2,475

 
1,216

 
$
984,818

 
$
1,061,645

Liabilities and Shareholders’ Equity
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
103,630

 
$
79,136

Accrued expenses
97,883

 
87,074

Billings in excess of cost
38,672

 
17,857

Current maturities of long-term debt

 
208,805

Total current liabilities
240,185

 
392,872

Long-term debt

 
1,600

Deferred income taxes
36,672

 
36,530

Non-current operating lease liabilities
20,461

 

Other non-current liabilities
30,287

 
33,950

Shareholders’ equity:
 
 
 
Preferred stock, $0.01 par value; authorized 10,000 shares; none outstanding

 

Common stock, $0.01 par value; authorized 50,000 shares; 33,145 shares and 32,887 shares issued and outstanding in 2019 and 2018
332

 
329

Additional paid-in capital
293,009

 
282,525

Retained earnings
391,311

 
338,995

Accumulated other comprehensive loss
(6,022
)
 
(7,234
)
Cost of 888 and 796 common shares held in treasury in 2019 and 2018
(21,417
)
 
(17,922
)
Total shareholders’ equity
657,213

 
596,693

 
$
984,818

 
$
1,061,645

See accompanying notes to consolidated financial statements.

5


Table of Contents

GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)(unaudited) 
 
Nine Months Ended 
 September 30,
 
2019
 
2018
Cash Flows from Operating Activities
 
 
 
Net income
$
50,734

 
$
50,692

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
14,923

 
15,449

Stock compensation expense
10,087

 
6,854

Exit activity costs, non-cash
479

 
1,088

Benefit of deferred income taxes
(429
)
 

Other, net
3,267

 
1,114

Changes in operating assets and liabilities, excluding the effects of acquisitions:
 
 
 
Accounts receivable
(56,645
)
 
(30,534
)
Inventories
18,617

 
(16,263
)
Other current assets and other assets
(6,949
)
 
1,052

Accounts payable
22,770

 
9,237

Accrued expenses and other non-current liabilities
15,640

 
(479
)
Net cash provided by operating activities
72,494

 
38,210

Cash Flows from Investing Activities
 
 
 
Acquisitions, net of cash acquired
(8,665
)
 
(5,241
)
Net proceeds from sale of property and equipment
87

 
3,147

Purchases of property, plant, and equipment
(7,703
)
 
(6,767
)
Net cash used in investing activities
(16,281
)
 
(8,861
)
Cash Flows from Financing Activities
 
 
 
Long-term debt payments
(212,000
)
 
(400
)
Payment of debt issuance costs
(1,235
)
 

Purchase of treasury stock at market prices
(3,495
)
 
(6,549
)
Net proceeds from issuance of common stock
400

 
1,343

Net cash used in financing activities
(216,330
)
 
(5,606
)
Effect of exchange rate changes on cash
729

 
(610
)
Net (decrease) increase in cash and cash equivalents
(159,388
)
 
23,133

Cash and cash equivalents at beginning of year
297,006

 
222,280

Cash and cash equivalents at end of period
$
137,618

 
$
245,413

See accompanying notes to consolidated financial statements.

6


Table of Contents

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
 
 
 
 
Shares
 
Amount
 
Balance at December 31, 2018
32,887

 
$
329

 
$
282,525

 
$
338,995

 
$
(7,234
)
 
796

 
$
(17,922
)
 
$
596,693

Net income

 

 

 
6,345

 

 

 

 
6,345

Foreign currency translation adjustment

 

 

 

 
842

 

 

 
842

Minimum pension and post retirement benefit plan adjustments, net of taxes of $4

 

 

 

 
12

 

 

 
12

Stock compensation expense

 

 
2,371

 

 

 

 

 
2,371

Cumulative effect of accounting change (see Note 2)

 

 

 
1,582

 

 

 

 
1,582

Stock options exercised
12

 

 
139

 

 

 

 

 
139

Net settlement of restricted stock units
127

 
1

 
(1
)
 

 

 
59

 
(2,151
)
 
(2,151
)
Balance at March 31, 2019
33,026

 
$
330

 
$
285,034

 
$
346,922

 
$
(6,380
)
 
855

 
$
(20,073
)
 
$
605,833

Net income

 

 

 
19,913

 

 

 

 
19,913

Foreign currency translation adjustment

 

 

 

 
998

 

 

 
998

Minimum pension and post retirement benefit plan adjustments, net of taxes of $5

 

 

 

 
12

 

 

 
12

Stock compensation expense

 

 
3,720

 

 

 

 

 
3,720

Stock options exercised
5

 

 
69

 

 

 

 

 
69

Awards of common shares
8

 

 

 

 

 

 

 

Net settlement of restricted stock units
62

 
1

 
(1
)
 

 

 
25

 
(998
)
 
(998
)
Balance at June 30, 2019
33,101

 
$
331

 
$
288,822

 
$
366,835

 
$
(5,370
)
 
880

 
$
(21,071
)
 
$
629,547

Net income
 
 
 
 
 
 
24,476

 
 
 
 
 
 
 
24,476

Foreign currency translation adjustment
 
 
 
 
 
 
 
 
(664
)
 
 
 
 
 
(664
)
Minimum pension and post retirement benefit plan adjustments, net of taxes of $4
 
 
 
 
 
 
 
 
12

 
 
 
 
 
12

Stock compensation expense

 

 
3,996

 

 

 

 

 
3,996

Stock options exercised
16

 

 
192

 

 

 

 

 
192

Net settlement of restricted stock units
28

 
1

 
(1
)
 

 

 
8

 
(346
)
 
(346
)
Balance at September 30, 2019
33,145

 
$
332

 
$
293,009

 
$
391,311

 
$
(6,022
)
 
888

 
$
(21,417
)
 
$
657,213


See accompanying notes to consolidated financial statements.

7


Table of Contents

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
 
 
 
 
Shares
 
Amount
 
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

Minimum pension and post retirement benefit plan adjustments, net of taxes of $10

 

 

 

 
27

 

 

 
27

Stock compensation expense

 

 
2,097

 

 

 

 

 
2,097

Cumulative effect of accounting change

 

 

 
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
)
Minimum pension and post retirement benefit plan adjustments, net of taxes of $11

 

 

 

 
26

 

 

 
26

Stock compensation expense

 

 
2,731

 

 

 

 

 
2,731

Stock options exercised
21

 

 
300

 

 

 

 

 
300

Awards of common shares
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

Minimum pension and post retirement benefit plan adjustments, net of taxes of $10

 

 

 

 
27

 

 

 
27

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.

8


Table of Contents

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, 2018.

The balance sheet at December 31, 2018 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.




9


Table of Contents



(2)
RECENT ACCOUNTING PRONOUNCEMENTS

Recent Accounting Pronouncements 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 has adopted this standard using the modified retrospective approach and elected the transition method to initially apply the new leases standard to all leases that exist at January 1, 2019. Under this transition method, the Company initially applied Topic 842 as of January 1, 2019, and recognized a cumulative-effect adjustment which increased the Company's beginning retained earnings as of January 1, 2019 by approximately $1.6 million. In addition, the Company elected the package of practical expedients permitted under the transition guidance within the new leases standard, which among other things, permitted the Company to carry forward its historical lease classification for leases in place prior to January 1, 2019. The comparative period information has not been restated and continues to be reported and presented under the accounting standards in effect for that period. The standard did not materially impact the Company's consolidated net earnings and had no impact on cash flows.

Date of adoption: Q1 2019


Recent Accounting Pronouncements Not Yet Adopted
Standard
 
Description
 
Financial Statement Effect or Other Significant Matters
ASU No. 2016-13
Financial Instruments - Credit Losses (Topic 326)
 
The objective of this standard is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit, including trade receivables, held by an entity at each reporting date. The amendments in this update replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The provisions of this standard are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. An entity will apply the amendments in this update through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective, that is, a modified-retrospective approach.

 
The Company is currently evaluating the requirements of this standard. The standard is not expected to have a material impact on the Company's financial statements.




















Date of adoption: Q1 2020


10


Table of Contents


(3)
ACCOUNTS RECEIVABLE, NET

Accounts receivable consists of the following (in thousands):
 
September 30, 2019
 
December 31, 2018
Trade accounts receivable
$
178,457

 
$
124,609

Costs in excess of billings
24,951

 
22,634

Total accounts receivables
203,408

 
147,243

Less allowance for doubtful accounts
(7,074
)
 
(6,960
)
Accounts receivable
$
196,334

 
$
140,283



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 for designing, engineering, manufacturing and installation of solar racking systems and greenhouse structures; extraction systems; 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.

Revenue recognition

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

As of September 30, 2019, the Company's remaining performance obligations are part of contracts that have an original expected duration of one year or less.

Contract assets and contract liabilities

Contract assets consist of costs in excess of billings. Contract liabilities consist of billings in excess of cost and unearned revenue. Unearned revenue relates to payments received in advance of performance under the contract and is recognized when the Company performs under the contract. Unearned revenue is presented within accrued expenses in the Company's consolidated balance sheet.

The following table presents the beginning and ending balances of costs in excess of billings, billings in excess of cost and unearned revenue as of September 30, 2019 and December 31, 2018, respectively, and revenue recognized during the nine months ended September 30, 2019 and 2018, respectively, that was in billings in excess of cost and unearned revenue at the beginning of the period (in thousands):
 
September 30, 2019
 
December 31, 2018
Costs in excess of billings
$
24,951

 
$
22,634

Billings in excess of cost
(38,672
)
 
(17,857
)
Unearned revenue
(21,860
)
 
(12,028
)

The increase in contract liabilities as of September 30, 2019 compared with December 31, 2018 was primarily driven by the seasonality in our businesses.

11


Table of Contents

 
Nine Months Ended
September 30, 2019
 
Nine Months Ended
September 30, 2018
Revenue recognized in the period from:
 
 
 
Amounts included in billings in excess of cost
 at the beginning of the period
$
14,137

 
$
9,294

Amounts included in unearned revenue
 at the beginning of the period
$
11,052

 
$
2,977




(5)
INVENTORIES

Inventories consist of the following (in thousands):
 
September 30, 2019
 
December 31, 2018
Raw material
$
48,158

 
$
57,845

Work-in-process
7,658

 
6,930

Finished goods
27,232

 
34,138

Total inventories
$
83,048

 
$
98,913



(6)    ACQUISITIONS

On August 30, 2019, the Company acquired all of the outstanding membership interests of Apeks LLC ("Apeks"), a designer and manufacturer of botanical oil extraction systems and equipment. The results of Apeks 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 purchase consideration for the acquisition of Apeks was $12.6 million, which includes a working capital adjustment and certain other adjustments provided for in the stock purchase agreement expected to be remitted in the next three to six months, at which time a final purchase price will be determined. 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 $4.2 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 conservation 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
$
4,149

Working capital
(1,230
)
Property, plant and equipment
859

Acquired intangible assets
5,061

Other assets
508

Other liabilities
(982
)
Goodwill
4,185

Fair value of purchase consideration
$
12,550









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The intangible assets acquired in this acquisition consisted of the following (in thousands):
 
Fair Value
 
Weighted-Average Amortization Period
Trademarks
$
900

 
Indefinite
Technology
793

 
9 years
Customer relationships
3,368

 
9 years
Total
$
5,061

 
 


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 aggregate purchase consideration for the acquisition of SolarBOS was $6.4 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 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 $2.9 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 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
680

Property, plant and equipment
483

Acquired intangible assets
1,450

Other assets
13

Other liabilities
(51
)
Goodwill
2,879

Fair value of purchase consideration
$
6,369



The intangible assets acquired in this acquisition consisted of the following (in thousands):
 
Fair Value
 
Weighted-Average Amortization Period
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. These costs were recognized as a component of selling, general, and administrative expenses in the consolidated statement of operations. The Company also recognized costs as a component of cost of sales related to the sale of inventory at fair value as a result of allocating the purchase price of recent acquisitions.





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The acquisition-related costs consisted of the following for the three and nine months ended September 30 (in thousands):
 
Three Months Ended 
 September 30,
 
Nine Months Ended 
 September 30,
 
2019
 
2018
 
2019
 
2018
Selling, general and administrative costs
$
470

 
$
471

 
$
474

 
$
471

Cost of sales
134

 

 
134

 

Total acquisition-related costs
$
604

 
$
471

 
$
608

 
$
471




(7)
GOODWILL AND RELATED INTANGIBLE ASSETS

Goodwill
The changes in the carrying amount of goodwill for the nine months ended September 30, 2019 are as follows (in thousands):
 
Renewable Energy & Conservation
 
Residential Products
 
Industrial and
Infrastructure
Products
 
Total
Balance at December 31, 2018
$
71,827

 
$
198,075

 
$
53,769

 
$
323,671

Acquired goodwill
4,185

 

 
 
 
4,185

Adjustments to prior year acquisitions
(172
)
 
 
 

 
(172
)
Foreign currency translation
137

 

 
162

 
299

Balance at September 30, 2019
$
75,977

 
$
198,075

 
$
53,931

 
$
327,983



Acquired Intangible Assets
Acquired intangible assets consist of the following (in thousands):
 
September 30, 2019
 
December 31, 2018
 
 
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Weighted-Average Amortization Period
Indefinite-lived intangible assets:
 
 
 
 
 
 
 
 
 
Trademarks
$
44,770

 
$

 
$