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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
rock-20220630_g1.jpg
FORM 10-Q
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2022
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 000-22462
 
GIBRALTAR INDUSTRIES, INC.
(Exact name of Registrant as specified in its charter) 
Delaware 16-1445150
(State of incorporation ) (I.R.S. Employer Identification No.)
3556 Lake Shore RoadP.O. Box 2028BuffaloNew 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 classTrading SymbolName of each exchange on which registered
Common Stock, $0.01 par value per shareROCKNASDAQ 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. (Check one):
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting companyEmerging 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 August 2, 2022, the number of common shares outstanding was: 31,627,767.


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

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,
 2022202120222021
Net sales$366,949 $348,389 $684,814 $635,981 
Cost of sales276,678 267,458 529,699 495,032 
Gross profit90,271 80,931 155,115 140,949 
Selling, general, and administrative expense50,132 49,522 93,781 96,725 
Income from operations40,139 31,409 61,334 44,224 
Interest expense656 245 1,141 689 
Other expense (income)281 (4,666)434 (4,351)
Income before taxes39,202 35,830 59,759 47,886 
Provision for income taxes9,895 9,457 14,996 11,017 
Income from continuing operations29,307 26,373 44,763 36,869 
Discontinued operations:
(Loss) income before taxes (502) 2,068 
(Benefit from) provision for income taxes (78) 226 
(Loss) income from discontinued operations (424) 1,842 
Net income$29,307 $25,949 $44,763 $38,711 
Net earnings per share – Basic:
Income from continuing operations$0.90 $0.80 $1.37 $1.12 
(Loss) income from discontinued operations (0.01) 0.06 
Net income$0.90 $0.79 $1.37 $1.18 
Weighted average shares outstanding – Basic32,585 32,790 32,748 32,791 
Net earnings per share – Diluted:
Income from continuing operations$0.90 $0.80 $1.36 $1.11 
(Loss) income from discontinued operations (0.01) 0.06 
Net income$0.90 $0.79 $1.36 $1.17 
Weighted average shares outstanding – Diluted32,660 33,056 32,843 33,071 
See accompanying notes to consolidated financial statements.
3

GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
(unaudited)
 
Three Months Ended
June 30,
Six Months Ended
June 30,
 2022202120222021
Net income $29,307 $25,949 $44,763 $38,711 
Other comprehensive (loss) income:
Foreign currency translation adjustment(3,198)761 (3,425)3,959 
Minimum post retirement benefit plan adjustments, net of tax1 27 25 54 
Other comprehensive (loss) income(3,197)788 (3,400)4,013 
Total comprehensive income $26,110 $26,737 $41,363 $42,724 
See accompanying notes to consolidated financial statements.
4

GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
June 30,
2022
December 31,
2021
(unaudited)
Assets
Current assets:
Cash and cash equivalents$17,149 $12,849 
Accounts receivable, net of allowance of $3,901 and $3,738, respectively
275,596 236,444 
Inventories, net197,499 176,207 
Prepaid expenses and other current assets39,333 21,467 
Total current assets529,577 446,967 
Property, plant, and equipment, net100,998 96,885 
Operating lease assets26,206 18,120 
Goodwill509,357 510,942 
Acquired intangibles128,725 141,504 
Other assets550 483 
$1,295,413 $1,214,901 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$160,058 $172,286 
Accrued expenses and other current liabilities77,606 67,993 
Billings in excess of cost65,864 46,711 
Total current liabilities303,528 286,990 
Long-term debt93,454 23,781 
Deferred income taxes40,150 40,278 
Non-current operating lease liabilities19,252 11,390 
Other non-current liabilities21,751 27,204 
Stockholders’ equity:
Preferred stock, $0.01 par value; authorized 10,000 shares; none outstanding
  
Common stock, $0.01 par value; authorized 100,000 shares in 2022 and 2021; 33,989 shares and 33,799 shares issued and outstanding in 2022 and 2021
340 338 
Additional paid-in capital318,664 314,541 
Retained earnings590,335 545,572 
Accumulated other comprehensive (loss) income(3,213)187 
Treasury stock, at cost, 2,374 and 1,107 shares in 2022 and 2021
(88,848)(35,380)
Total stockholders’ equity817,278 825,258 
$1,295,413 $1,214,901 
See accompanying notes to consolidated financial statements.
5

GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited) 
Six Months Ended
June 30,
 20222021
Cash Flows from Operating Activities
Net income$44,763 $38,711 
Income from discontinued operations 1,842 
Income from continuing operations44,763 36,869 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization12,677 16,014 
Stock compensation expense4,125 4,935 
Exit activity costs, non-cash1,198 1,193 
Provision for (benefit of) deferred income taxes29 (36)
Other, net2,666 349 
Changes in operating assets and liabilities, excluding the effects of acquisitions:
Accounts receivable(40,473)(29,150)
Inventories(33,616)(42,686)
Other current assets and other assets(1,612)(611)
Accounts payable(10,501)35,174 
Accrued expenses and other non-current liabilities21,288 (9,274)
Net cash provided by operating activities of continuing operations544 12,777 
Net cash used in operating activities of discontinued operations (2,002)
Net cash provided by operating activities 544 10,775 
Cash Flows from Investing Activities
Purchases of property, plant, and equipment(11,287)(9,474)
Acquisitions, net of cash acquired (2)
Net proceeds from sale of business 39,991 
Net proceeds from sale of property and equipment85  
Net cash (used in) provided by investing activities of continuing operations(11,202)30,515 
Net cash used in investing activities of discontinued operations (176)
Net cash (used in) provided by investing activities(11,202)30,339 
Cash Flows from Financing Activities
Proceeds from long-term debt120,500 31,200 
Long-term debt payments(51,000)(83,636)
Purchase of common stock at market prices(53,468)(4,780)
Net proceeds from issuance of common stock 924 
Net cash provided by (used in) financing activities16,032 (56,292)
Effect of exchange rate changes on cash(1,074)87 
Net increase (decrease) in cash and cash equivalents4,300 (15,091)
Cash and cash equivalents at beginning of year12,849 32,054 
Cash and cash equivalents at end of period$17,149 $16,963 
See accompanying notes to consolidated financial statements.
6

GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
(in thousands)
(unaudited) 
 Common StockAdditional
Paid-In Capital
Retained EarningsAccumulated
Other
Comprehensive Income (Loss)
Treasury StockTotal
Stockholders’ Equity
 SharesAmountSharesAmount
Balance at December 31, 202133,799 $338 $314,541 $545,572 $187 1,107 $(35,380)$825,258 
Net income— — — 15,456 — — — 15,456 
Foreign currency translation adjustment— — — — (227)— — (227)
Minimum post retirement benefit plan adjustments, net of taxes of $10
— — — — 24 — — 24 
Stock compensation expense— — 1,352 — — — — 1,352 
Net settlement of restricted stock units173 2 (2)— — 72 (3,461)(3,461)
Balance at March 31, 202233,972 $340 $315,891 $561,028 $(16)1,179 $(38,841)$838,402 
Net income— — — 29,307 — — — 29,307 
Foreign currency translation adjustment— — — — (3,198)— — (3,198)
Minimum post retirement benefit plan adjustments, net of taxes of $0
— — — — 1 — — 1 
Stock compensation expense— — 2,773 — — — — 2,773 
Awards of common stock16 — — — — — — — 
Net settlement of restricted stock units1   — —  (7)(7)
Common stock repurchased under stock repurchase program— — — — — 1,195 (50,000)(50,000)
Balance at June 30, 202233,989 $340 $318,664 $590,335 $(3,213)2,374 $(88,848)$817,278 

See accompanying notes to consolidated financial statements.
7

GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
(in thousands)
(unaudited) 
Common StockAdditional
Paid-In Capital
Retained EarningsAccumulated
Other
Comprehensive (Loss) Income
Treasury StockTotal
Stockholders’ Equity
SharesAmountSharesAmount
Balance at December 31, 202033,568 $336 $304,870 $469,943 $(2,461)1,028 $(28,883)$743,805 
Net income— — — 12,762 — — — 12,762 
Foreign currency translation adjustment— — — — 3,198 — — 3,198 
Minimum post retirement benefit plan adjustments, net of taxes of $10
— — — — 27 — — 27 
Stock compensation expense— — 2,368 — — — — 2,368 
Stock options exercised25 — 910 — — — — 910 
Net settlement of restricted stock units118 1 (1)— — 54 (4,662)(4,662)
Balance at March 31, 202133,711 $337 $308,147 $482,705 $764 1,082 $(33,545)$758,408 
Net income— — — 25,949 — — — 25,949 
Foreign currency translation adjustment— — — — 761 — — 761 
Minimum post retirement benefit plan adjustments, net of taxes of $10
— — — — 27 — — 27 
Stock compensation expense— — 2,567 — — — — 2,567 
Stock options exercised1 — 14 — — — — 14 
Awards of common shares
3 — — — — — — — 
Net settlement of restricted stock units
3   — — 1 (118)(118)
Balance at June 30, 202133,718 $337 $310,728 $508,654 $1,552 1,083 $(33,663)$787,608 

See accompanying notes to consolidated financial statements.
8

GIBRALTAR INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

(1)    CONSOLIDATED FINANCIAL STATEMENTS

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, such as the impact of the COVID-19 pandemic, 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 our annual report on Form 10-K for the year ended December 31, 2021.

The consolidated balance sheet at December 31, 2021 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.


(2)    RECENT ACCOUNTING PRONOUNCEMENTS

Recent Accounting Pronouncements Not Yet Adopted
StandardDescriptionFinancial Statement Effect or Other Significant Matters
ASU No. 2020-04
Reference Rate Reform (Topic 848), Facilitation of Effects of Reference Rate Reform on Financial Reporting, and
ASU No. 2021-01 Reference Rate Reform (Topic 848), Scope
The amendments in ASU 2020-04 provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met, and apply only to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued as a result of reference rate reform. The expedients and exceptions provided by the amendments in ASU 2020-04 do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022. The amendments in ASU 2021-01 clarify that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition.The amendments in these updates are effective as of March 12, 2020 through December 31, 2022, and may be applied retrospectively to contract modifications and hedging relationships from the beginning of an interim period that includes or is subsequent to March 12, 2020, or on a prospective basis to new modifications from any date within an interim period that includes or is subsequent to the date of the issuance of a final update, up to the date the financial statements are available to be issued. The adoption of the amendments in these updates is not expected to have a material impact on the Company's financial statements.

9



(3)    ACCOUNTS RECEIVABLE, NET

Accounts receivable consists of the following (in thousands):
June 30, 2022December 31, 2021
Trade accounts receivable$231,076 $185,745 
Costs in excess of billings48,421 54,437 
Total accounts receivables279,497 240,182 
Less allowance for doubtful accounts and contract assets(3,901)(3,738)
Accounts receivable, net$275,596 $236,444 

Refer to Note 4 "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, 2022, that is deducted from the amortized cost basis of accounts receivable to present the net amount expected to be collected.
Beginning balance as of January 1, 2022$3,738 
Bad debt expense, net of recoveries772 
Accounts written off against allowance and other adjustments(609)
Ending balance as of June 30, 2022$3,901 


(4)    REVENUE

Sales includes revenue from contracts with customers for designing, engineering, manufacturing and installation of solar racking systems; electrical balance of systems; roof and foundation ventilation products; centralized mail systems and electronic package solutions; retractable awnings; gutter guards; rain dispersion products; trims and flashings and other accessories; designing, engineering, manufacturing and installation of greenhouses; botanical extraction systems; structural bearings; expansion joints; pavement sealant; elastomeric concrete; and bridge cable protection systems.

Refer to Note 14 "Segment Information" for additional information related to revenue recognized by timing of transfer of control by reportable segment.

As of June 30, 2022, 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, 2022 and December 31, 2021 was $3.4 million and $3.7 million, respectively. Revenue recognized during the six months ended June 30, 2022 and 2021 that was in contract liabilities at the beginning of the respective periods was $38.6 million and $49.2 million, respectively.

10


(5)    INVENTORIES

Inventories consist of the following (in thousands):
June 30, 2022December 31, 2021
Raw material$141,877 $135,558 
Work-in-process9,152 5,858 
Finished goods53,090 39,256 
Gross inventory204,119 180,672 
Less reserves(6,620)(4,465)
Total inventories, net$197,499 $176,207 

(6)    GOODWILL AND RELATED INTANGIBLE ASSETS

Goodwill
The changes in the carrying amount of goodwill for the six months ended June 30, 2022 are as follows (in thousands):
RenewablesResidentialAgtechInfrastructureTotal
Balance at December 31, 2021$188,680 $205,452 $85,132 $31,678 $510,942 
Adjustments to prior year acquisitions904   — 904 
Foreign currency translation(1,980) (509) (2,489)
Balance at June 30, 2022$187,604 $205,452 $84,623 $31,678 $509,357 

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, 2022 which would require an interim impairment test to be performed.

Acquired Intangible Assets
Acquired intangible assets consist of the following (in thousands):
 June 30, 2022December 31, 2021
 Gross
Carrying
Amount
Accumulated
Amortization
Gross
Carrying
Amount
Accumulated
Amortization
Indefinite-lived intangible assets:
Trademarks$52,700 $ $52,700 $ 
Finite-lived intangible assets:
Trademarks5,504 4,268 5,521 4,011 
Unpatented technology34,322 20,941 38,474 20,656 
Customer relationships103,160 42,201 108,591 39,832 
Non-compete agreements2,382 1,933 2,686 1,969 
Backlog6,891 6,891 7,200 7,200 
152,259 76,234 162,472 73,668 
Total acquired intangible assets$204,959 $76,234 $215,172 $73,668 

11

The following table summarizes the acquired intangible asset amortization expense for the three and six months ended June 30 (in thousands):
Three Months Ended
June 30,
Six Months Ended
June 30,
2022202120222021
Amortization expense$2,819 $4,736 $5,917 $9,479 
Amortization expense related to acquired intangible assets for the remainder of fiscal 2022 and the next five years thereafter is estimated as follows (in thousands):
202220232024202520262027
Amortization expense$5,412 $10,177 $9,996 $9,856 $8,415 $6,754 


(7)    LONG-TERM DEBT

Long-term debt consists of the following (in thousands):
June 30, 2022December 31, 2021
Revolving credit facility$94,000 $24,500 
Less unamortized debt issuance costs(546)(719)
Total debt$93,454 $23,781 

Senior Credit Agreement

On January 24, 2019, the Company entered into a Sixth Amended and Restated Credit Agreement ("Senior Credit Agreement"), which amended and restated the Company’s Fifth Amended and Restated Credit Agreement dated December 9, 2015, and provides for a revolving credit facility and letters of credit in an aggregate amount equal to $400 million. The Company can request additional financing from the lenders 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 Senior Credit Agreement. The Senior Credit Agreement contains three financial covenants. As of June 30, 2022, the Company was in compliance with all three covenants.

Interest rates on the revolving credit facility are based on LIBOR plus an additional margin that ranges from 1.125% to 2.00%. In addition, the revolving credit facility is subject to an undrawn commitment fee ranging between 0.15% and 0.25% based on the Total Leverage Ratio (as defined in the Senior Credit Agreement) and the daily average undrawn balance. The Senior Credit Agreement terminates on January 23, 2024.

Borrowings under the Senior Credit Agreement are secured by the trade receivables, inventory, personal property, equipment, and general intangibles of the Company’s significant domestic subsidiaries. Capital distributions under the Senior Credit Agreement are capped at an annual aggregate limit of $75 million if the Company's leverage ratio is over 3.0 times.

Standby letters of credit of $4.5 million have been issued under the Senior Credit Agreement on behalf of the Company as of June 30, 2022. These letters of credit reduce the amount otherwise available under the revolving credit facility. The Company had $301.5 million and $369.3 million of availability under the revolving credit facility at June 30, 2022 and December 31, 2021, respectively.

12



(8)    ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following tables summarize the cumulative balance of each component of accumulated other comprehensive income (loss), net of tax, for the three and six months ended June 30, (in thousands):
Foreign Currency Translation AdjustmentMinimum Post Retirement Benefit Plan
Adjustments
Total Pre-Tax AmountTax Benefit (Expense)Accumulated  Other
Comprehensive
Income (Loss)
Balance at December 31, 2021$1,640 $(2,247)$(607)$794 $187 
Minimum post retirement health care plan adjustments— 34 34 (10)24 
 Foreign currency translation adjustment(227)— (227) (227)
Balance at March 31, 20221,413 (2,213)(800)784 (16)
Minimum post retirement health care plan adjustments— 1 1 — 1 
 Foreign currency translation adjustment(3,198)— (3,198)— (3,198)
Balance at June 30, 2022$(1,785)$(2,212)$(3,997)$784 $(3,213)
Foreign Currency Translation AdjustmentMinimum Post Retirement Benefit Plan
Adjustments
Total Pre-Tax AmountTax Benefit (Expense)Accumulated  Other
Comprehensive
(Loss) Income
Balance at December 31, 2020$(872)$(2,426)$(3,298)$837 $(2,461)
Minimum post retirement health care plan adjustments— 37 37 (10)27 
 Foreign currency translation adjustment3,198 — 3,198 — 3,198 
Balance at March 31, 20212,326 (2,389)(63)827 764 
Minimum post retirement health care plan adjustments— 37 37 (10)27 
 Foreign currency translation adjustment761 — 761 — 761 
Balance at June 30, 2021$3,087 $(2,352)$735 $817 $1,552 

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


(9)    EQUITY-BASED COMPENSATION
On May 4, 2022, the stockholders of the Company approved the adoption of the Gibraltar Industries, Inc. Amended and Restated 2016 Stock Plan for Non-Employee Directors ("Non-Employee Directors Plan") which increases the total number of shares for issuance by the Company thereunder from 100,000 shares to 200,000 shares, allows the Company to grant awards of shares of the Company's common stock to current non-employee Directors of the Company, and permits the Directors to defer receipt of such shares pursuant to the terms of the Non-Employee Directors Plan.
On May 4, 2018, the stockholders 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 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.

13

Equity Based Awards - Settled in Stock

The following table sets forth the number of equity-based awards granted during the six months ended June 30, which will convert to shares upon vesting, along with the weighted average grant date fair values:
 20222021
AwardsNumber of
Awards
Weighted
Average
Grant Date
Fair Value
Number of
Awards (2)
Weighted
Average
Grant Date
Fair Value
Performance stock units (1)108,464 $47.00 62,778 $87.84 
Restricted stock units67,158 $45.84 33,187 $87.91 
Deferred stock units2,460 $42.69 7,536 $83.58 
Common shares15,652 $42.49 2,512 $83.58 
(1) The Company’s performance stock units (“PSUs”) represent shares granted for which the final number of shares earned depends on financial performance or market conditions. 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) All PSUs granted in the first quarter of 2021 were forfeited in the first quarter of 2022 as the threshold level of achievement was not met based on the Company's actual ROIC achievement level for the performance period ended December 31, 2021.
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 total of these share-based liabilities recorded on the consolidated balance sheet as of June 30, 2022 was $17.6 million, of which $3.0 million was included in current accrued expenses and $14.6 million was included in non-current liabilities. Total share-based liabilities as of December 31, 2021 were $22.6 million, of which $2.9 million was included in current accrued expenses and $19.7 million was included in non-current liabilities.

The Company's 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 compensation.

The deferrals and related company match are credited to an account that represents 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.

The following table provides the number of restricted stock units credited to active participant accounts and the payments made with respect to restricted stock units issued under the MSPP during the six months ended June 30,:
20222021
Restricted stock units credited 6,234 26,240 
Share-based liabilities paid (in thousands)$2,545 $3,510 
14


(10)    HELD FOR SALE AND DISCONTINUED OPERATIONS

Held for Sale

During the first quarter of 2022, the Company committed to a plan to sell its Processing business (the "disposal group") which is a business within the Company's Agtech reportable segment. The planned sale does not meet the criteria to be classified as a discontinued operation. As a result, the Company will continue reporting the operating results of the disposal group in the Company's consolidated operating results from continuing operations until the sale of the business is completed.

The Company classifies assets and related liabilities as held for sale when: (i) management has committed to a plan to sell the assets, (ii) the net assets are available for immediate sale, (iii) there is an active program to locate a buyer and (iv) the sale and transfer of the net assets is probable within one year. Assets and liabilities held for sale are presented separately on our consolidated balance sheets with a valuation allowance, if necessary, to recognize the net carrying amount at the lower of cost or fair value, less costs to sell.

As of June 30, 2022, the assets and liabilities of the disposal group have been classified as held for sale. The following table summarizes these assets and liabilities which have been measured at the lower of (i) the carrying value when classified as held for sale and (ii) the fair value of the business less costs to sell.

(in thousands)June 30, 2022
Assets held for sale
Accounts receivable, net of allowance$561 
Inventories, net of reserves8,563 
Other current assets1,926 
Property, plant, and equipment, net331 
Operating lease asset710 
Goodwill (1)
 
Acquired intangibles, net6,213 
Total assets held for sale$18,304 
Liabilities held for sale
Accounts payable$1,731 
Accrued expenses1,127 
Non-current operating lease liabilities299 
Total liabilities held for sale$