UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

~~(Mark one)~~



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

For the quarterly period ended ~~September 30, 2017~~March 31, 2023



¨☐			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~~

Number: 000-22462

~~GIBRALTAR INDUSTRIES, INC.~~

~~(Exact name of Registrant as specified in its charter)~~



~~Delaware~~

GIBRALTAR INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)

		~~16-1445150~~

Delaware

16-1445150

(State or ~~other jurisdiction~~Other Jurisdiction of

~~incorporation~~ Incorporation or ~~organization)~~

Organization)

(I.R.S. Employer

Identification No.)

3556 Lake Shore Road

P.O. Box 2028

Buffalo

New York

14219-0228

(Address of principal executive offices)

(Zip Code)

(716) 826-6500

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

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

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, $0.01 par value per share

ROCK

NASDAQ Stock Market

Indicate by check mark whether the ~~Registrant~~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~~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 ~~checkmark~~check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ 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 ~~and post~~ such files). Yes x☒ No ¨☐

Indicate by check mark whether the ~~Registrant~~registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See ~~definition~~the definitions of “large accelerated ~~filer”,~~filer,” “accelerated ~~filer” and~~filer,” “smaller reporting ~~company”~~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.)~~Act). Yes ¨☐ No x☒

As of ~~November~~May 1, ~~2017,~~2023, the number of common shares outstanding was: ~~31,688,154.~~30,410,872.

Table of Contents

GIBRALTAR INDUSTRIES, INC.

INDEX



		PAGE NUMBER
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Statements of ~~Operations~~Income for the Three ~~and Nine~~ Months Ended ~~September 30, 2017~~March 31 , 202 3 and ~~2016~~202 2 (unaudited)	3
	Consolidated Statements of Comprehensive Income for the Three ~~and Nine~~ Months Ended ~~September 30, 2017~~March 31 , 202 3 and ~~2016~~202 2 (unaudited)	4
	Consolidated Balance Sheets as of ~~September 30, 2017~~M arch 31 , 202 3 (unaudited) and December 31, ~~2016~~202 2	5
	Consolidated Statements of Cash Flows for the ~~Nine~~Three Months Ended ~~September 30, 2017~~March 31 , 202 3 and ~~2016~~202 2 (unaudited)	6
	Consolidated Statement of ~~Shareholders’~~Stockholders’ Equity for the ~~Nine~~ Three Months Ended ~~September 30, 2017~~March 31 , 202 3 and 202 2 (unaudited)	7
	Notes to Consolidated Financial Statements (unaudited)	8~~-32~~
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3317~~-42~~
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4224
Item 4.	Controls and Procedures	4324
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	4325
Item 1A.	Risk Factors	4325
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4326
Item 3.	Defaults Upon Senior Securities	4326
Item 4.	Mine Safety Disclosures	4326
Item 5.	Other Information	4326
Item 6.	Exhibits	4427
	SIGNATURES	28

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

GIBRALTAR INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF ~~OPERATIONS~~INCOME

(in thousands, except per share data)

(unaudited)

Three Months Ended
September 30, Nine Months Ended
September 30,
2017 2016 2017 2016
Net Sales $ 274,574
$ 272,734
$ 728,806
$ 776,143
Cost of sales 205,839
204,847
548,991
585,263
Gross profit 68,735
67,887
179,815
190,880
Selling, general, and administrative expense 33,042
41,365
109,513
118,021
Income from operations 35,693
26,522
70,302
72,859
Interest expense 3,486
3,625
10,612
10,982
Other expense 404
159
811
8,319
Income before taxes 31,803
22,738
58,879
53,558
Provision for income taxes 11,184
8,952
21,090
12,131
Income from continuing operations 20,619
13,786
37,789
41,427
Discontinued operations:
Loss before taxes —
—
(644 ) —
Benefit of income taxes —
—
(239 ) —
Loss from discontinued operations —
—
(405 ) —
Net income $ 20,619
$ 13,786
$ 37,384
$ 41,427
Net earnings per share – Basic:
Income from continuing operations $ 0.65
$ 0.44
$ 1.19
$ 1.32
Loss from discontinued operations —
—
(0.01 ) —
Net income $ 0.65
$ 0.44
$ 1.18
$ 1.32
Weighted average shares outstanding – Basic 31,703
31,579
31,700
31,493
Net earnings per share – Diluted:
Income from continuing operations $ 0.64
$ 0.43
$ 1.17
$ 1.29
Loss from discontinued operations —
—
(0.01 ) —
Net income $ 0.64
$ 0.43
$ 1.16
$ 1.29
Weighted average shares outstanding – Diluted 32,210
32,176
32,216
32,005


	Three Months Ended March 31,
	2023		2022
Net sales	$	293,267	$	317,865
Cost of sales	216,338		253,021
Gross profit	76,929		64,844
Selling, general, and administrative expense	47,559		43,649

Income from operations	29,370		21,195
Interest expense	1,491		485
Other (income) expense	(397)		153
Income before taxes	28,276		20,557
Provision for income taxes	7,177		5,101





Net income	$	21,099	$	15,456











Net earnings per share:
Basic	$	0.68	$	0.47
Diluted	$	0.68	$	0.47
Weighted average shares outstanding:
Basic	30,897		32,913
Diluted	31,024		33,022

See accompanying notes to consolidated financial statements.

Table of Contents

GIBRALTAR INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

(unaudited)

Three Months Ended
September 30, Nine Months Ended
September 30,
2017 2016 2017 2016
Net income $ 20,619
$ 13,786
$ 37,384
$ 41,427
Other comprehensive income (loss):
Foreign currency translation adjustment 1,581
(193 ) 3,351
10,638
Adjustment to retirement benefit liability, net of tax (2 ) 61
(8 ) 59
Adjustment to post employment health care benefit liability, net of tax 29
38
88
114
Other comprehensive income (loss) 1,608
(94 ) 3,431
10,811
Total comprehensive income $ 22,227
$ 13,692
$ 40,815
$ 52,238


	Three Months Ended March 31,
	2023		2022
Net income	$	21,099	$	15,456
Other comprehensive (loss) income:
Foreign currency translation adjustment	(115)		(227)

Minimum post retirement benefit plan adjustments, net of tax	8		24

Other comprehensive loss	(107)		(203)
Total comprehensive income	$	20,992	$	15,253

See accompanying notes to consolidated financial statements.

Table of Contents

GIBRALTAR INDUSTRIES, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)


	September 30, 2017			December 31, 2016				March 31, 2023		December 31, 2022
	(unaudited)							(unaudited)
Assets							Assets
Current assets:							Current assets:
Cash and cash equivalents	$	208,032		$	170,177		Cash and cash equivalents	$	7,497	$	17,608
Accounts receivable, net	166,718			124,072
Inventories	85,156			89,612
Other current assets	8,195			7,336
Accounts receivable, net of allowance of $4,164 and $3,746, respectively							Accounts receivable, net of allowance of $4,164 and $3,746, respectively	230,132		217,156
Inventories, net							Inventories, net	171,634		170,360
Prepaid expenses and other current assets							Prepaid expenses and other current assets	19,015		18,813

Total current assets	468,101			391,197			Total current assets	428,278		423,937
Property, plant, and equipment, net	94,488			108,304			Property, plant, and equipment, net	107,701		109,584
Operating lease assets							Operating lease assets	24,432		26,502
Goodwill	321,093			304,032			Goodwill	512,639		512,363
Acquired intangibles	107,943			110,790			Acquired intangibles	134,735		137,526
Other assets	4,672			3,922			Other assets	707		701
	$	996,297		$	918,245			$	1,208,492	$	1,210,613
Liabilities and Shareholders’ Equity
Liabilities and Stockholders’ Equity							Liabilities and Stockholders’ Equity
Current liabilities:							Current liabilities:
Accounts payable	$	96,181		$	69,944		Accounts payable	$	129,661	$	106,582
Accrued expenses	83,264			70,392			Accrued expenses	67,103		73,721
Billings in excess of cost	18,234			11,352			Billings in excess of cost	42,929		35,017
Current maturities of long-term debt	400			400

Total current liabilities	198,079			152,088			Total current liabilities	239,693		215,320
Long-term debt	209,425			209,237			Long-term debt	49,876		88,762
Deferred income taxes	38,162			38,002			Deferred income taxes	47,030		47,088
Non-current operating lease liabilities							Non-current operating lease liabilities	17,488		19,041
Other non-current liabilities	45,200			58,038			Other non-current liabilities	19,018		18,303
Shareholders’ equity:
Stockholders’ equity:							Stockholders’ equity:
Preferred stock, $0.01 par value; authorized 10,000 shares; none outstanding	—			—			Preferred stock, $0.01 par value; authorized 10,000 shares; none outstanding	—		—
Common stock, $0.01 par value; authorized 50,000 shares; 32,275 shares and 32,085 shares issued and outstanding in 2017 and 2016	322			320
Common stock, $0.01 par value; authorized 100,000 shares; 34,148 and 34,060 shares issued and outstanding in 2023 and 2022							Common stock, $0.01 par value; authorized 100,000 shares; 34,148 and 34,060 shares issued and outstanding in 2023 and 2022	341		340
Additional paid-in capital	269,880			264,418			Additional paid-in capital	324,466		322,873
Retained earnings	249,386			211,748			Retained earnings	649,077		627,978
Accumulated other comprehensive loss	(4,290		)	(7,721		)	Accumulated other comprehensive loss	(3,539)		(3,432)
Cost of 588 and 530 common shares held in treasury in 2017 and 2016	(9,867		)	(7,885		)
Total shareholders’ equity	505,431			460,880
Cost of 3,389 and 3,199 common shares held in treasury in 2023 and 2022							Cost of 3,389 and 3,199 common shares held in treasury in 2023 and 2022	(134,958)		(125,660)
Total stockholders’ equity							Total stockholders’ equity	835,387		822,099
	$	996,297		$	918,245			$	1,208,492	$	1,210,613

See accompanying notes to consolidated financial statements.

Table of Contents

GIBRALTAR INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)


	Nine Months Ended September 30,							Three Months Ended March 31,
	2017			2016				2023		2022
Cash Flows from Operating Activities							Cash Flows from Operating Activities
Net income	$	37,384		$	41,427		Net income	$	21,099	$	15,456
Loss from discontinued operations	(405		)	—
Income from continuing operations	37,789			41,427
Adjustments to reconcile net income to net cash provided by operating activities:

Adjustments to reconcile net income to net cash provided by (used in) operating activities:							Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Depreciation and amortization	16,427			17,551			Depreciation and amortization	6,834		6,336
Stock compensation expense	5,069			4,666			Stock compensation expense	1,594		1,352
Net gain on sale of assets	(139		)	(225		)
Loss on sale of business	—			8,763

Exit activity (recoveries) costs, non-cash	(1,931		)	3,876			Exit activity (recoveries) costs, non-cash	(63)		1,198

(Benefit of) provision for deferred income taxes	(136		)	355			(Benefit of) provision for deferred income taxes	(51)		17

Other, net	1,411			735			Other, net	1,023		1,395

Changes in operating assets and liabilities, excluding the effects of acquisitions:							Changes in operating assets and liabilities, excluding the effects of acquisitions:
Accounts receivable	(42,310		)	3,796			Accounts receivable	(18,004)		(11,101)
Inventories	2,016			9,738			Inventories	(1,586)		(20,937)
Other current assets and other assets	(2,002		)	(1,901		)	Other current assets and other assets	2,536		731
Accounts payable	25,134			2,367			Accounts payable	23,077		(11,962)
Accrued expenses and other non-current liabilities	7,503			11,038			Accrued expenses and other non-current liabilities	1,586		9,761
Net cash provided by operating activities	48,831			102,186

Net cash provided by (used in) operating activities							Net cash provided by (used in) operating activities	38,045		(7,754)
Cash Flows from Investing Activities							Cash Flows from Investing Activities
Cash paid for acquisitions, net of cash acquired	(18,494		)	(2,314		)
Net proceeds from sale of property and equipment	12,935			249
Purchases of property, plant, and equipment	(5,152		)	(7,600		)
Net proceeds from sale of business	—			8,250
Other, net	—			1,118
Acquisitions, net of cash acquired							Acquisitions, net of cash acquired	554		—
Purchases of property, plant, and equipment, net							Purchases of property, plant, and equipment, net	(2,190)		(4,402)

Net cash used in investing activities	(10,711		)	(297		)	Net cash used in investing activities	(1,636)		(4,402)
Cash Flows from Financing Activities							Cash Flows from Financing Activities
Long-term debt payments	(400		)	(400		)	Long-term debt payments	(50,000)		(29,000)
Payment of debt issuance costs	—			(54		)
Purchase of treasury stock at market prices	(1,982		)	(1,178		)
Net proceeds from issuance of common stock	649			2,892
Proceeds from long-term debt							Proceeds from long-term debt	11,000		47,500

Purchase of common stock at market prices							Purchase of common stock at market prices	(7,509)		(3,461)

Net cash (used in) provided by financing activities	(1,733		)	1,260			Net cash (used in) provided by financing activities	(46,509)		15,039
Effect of exchange rate changes on cash	1,468			1,055			Effect of exchange rate changes on cash	(11)		(159)
Net increase in cash and cash equivalents	37,855			104,204
Net (decrease) increase in cash and cash equivalents							Net (decrease) increase in cash and cash equivalents	(10,111)		2,724
Cash and cash equivalents at beginning of year	170,177			68,858			Cash and cash equivalents at beginning of year	17,608		12,849
Cash and cash equivalents at end of period	$	208,032		$	173,062		Cash and cash equivalents at end of period	$	7,497	$	15,573

See accompanying notes to consolidated financial statements.

Table of Contents

GIBRALTAR INDUSTRIES, INC.

CONSOLIDATED STATEMENT OF ~~SHAREHOLDERS’~~STOCKHOLDERS’ EQUITY

(in thousands)

(unaudited)


	Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive (Loss) Income		Treasury Stock			Total Stockholders’ Equity
	Shares	Amount								Shares	Amount
Balance at December 31, 2022	34,060	$	340	$	322,873	$	627,978	$	(3,432)	3,199	$	(125,660)	$	822,099
Net income	—	—		—		21,099		—		—	—		21,099
Foreign currency translation adjustment	—	—		—		—		(115)		—	—		(115)
Minimum post retirement benefit plan adjustments, net of taxes of $3	—	—		—		—		8		—	—		8
Stock compensation expense	—	—		1,594		—		—		—	—		1,594



Net settlement of restricted stock units	88	1		(1)		—		—		36	(1,929)		(1,929)
Common stock repurchased under stock repurchase program	—	—		—		—		—		154	(7,369)		(7,369)
Balance at March 31, 2023	34,148	$	341	$	324,466	$	649,077	$	(3,539)	3,389	$	(134,958)	$	835,387




Balance at December 31, 2021	33,799	$	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 units	173	2		(2)		—		—		72	(3,461)		(3,461)

Balance at March 31, 2022	33,972	$	340	$	315,891	$	561,028	$	(16)	1,179	$	(38,841)	$	838,402

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, 2016 32,085
$ 320
$ 264,418
$ 211,748
$ (7,721 ) 530
$ (7,885 ) $ 460,880
Net income —
—
—
37,384
—
—
—
37,384
Foreign currency translation adjustment —
—
—
—
3,351
—
—
3,351
Adjustment to retirement benefit liability, net of taxes of ($5) —
—
—
—
(8 ) —
—
(8 )
Adjustment to post employment health care benefit liability, net of taxes of $54 —
—
—
—
88
—
—
88
Stock compensation expense —
—
5,069
—
—
—
—
5,069
Cumulative effect of accounting change (see Note 2)
—
—
(254 ) 254
—
—
—
—
Stock options exercised 40
—
649
—
—
—
—
649
Issuance of restricted stock 2
—
—
—
—
—
—
—
Net settlement of restricted stock units 148
2
(2 ) —
—
58
(1,982 ) (1,982 )
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.

Table of Contents

GIBRALTAR INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1.(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~~(consisting of normal recurring ~~adjustments~~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 ~~of operations~~ for ~~the three and nine month periods ended September 30, 2017~~any interim period are not necessarily indicative of the results expected for any subsequent interim period or for the full year. ~~The Company is subject to reduced activity in the first and fourth quarters as colder, inclement weather reduces order rates from end markets it serves.~~ The accompanying unaudited consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in ~~our~~the Company's annual report on Form 10-K for the year ended December 31, ~~2016.~~2022.

The consolidated balance sheet at December 31, 2022 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.

~~Certain prior year amounts have been reclassified to conform to current year's presentation. Refer to Note 2 for a summary of ASUs we adopted during 2017 and the related financial statement impact.~~

2.(2) RECENT ACCOUNTING PRONOUNCEMENTS

The Company considers the applicability and impact of Accounting Standards Updates ("ASUs"), and ASUs effective in or after 2023, respectively, which were assessed and determined to be either not applicable, or had or are expected to have minimal impact on the Company's consolidated financial statements and related disclosures.

~~Recent Accounting Pronouncements Adopted~~



~~Standard~~	~~Description~~	~~Financial Statement Effect or Other Significant Matters~~
~~ASU No. 2016-09~~ ~~Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting~~	The standard simplifies the accounting for share-based payment award transactions including: income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. The provisions of this standard are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted.	The Company has adopted all amendments included in this standard under each required transition method. The Company concluded there were no material changes to prior periods, except for the following: the Company (a) reclassified its prior interim period excess tax benefit for stock compensation of $941,000 on its consolidated statement of cash flows from a financing activity to an operating activity; and (b) recognized a cumulative-effect adjustment of $254,000 as an increase to retained earnings and decrease to additional paid-in capital on the Company's consolidated statement of shareholders' equity as of January 1, 2017 to reflect the change in value for a restricted stock unit liability award as of December 31, 2016, as if the award had been classified as an equity award since its respective grant date. ~~Date of adoption: Q1 2017~~

~~Table of Contents~~



~~Standard~~	~~Description~~	~~Financial Statement Effect or Other Significant Matters~~
~~ASU No. 2017-04~~ ~~Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment~~	The standard eliminates the "Step 2" analysis to determine the amount of impairment realized when a reporting unit's carrying amount exceeds its fair value in its "Step 1" analysis of accounting for impairment of goodwill. The impairment charge would be the amount determined in "Step 1." 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 for annual and interim goodwill impairment testing dates after January 1, 2017.	~~The Company has adopted this standard and it did not have any impact on the Company's consolidated financial statements.~~ ~~Date of Adoption: Q1 2017~~
~~ASU No. 2017-07~~ ~~Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost~~	The standard requires an employer to recognize the service cost component of net periodic pension costs and net periodic postretirement benefit costs in the same line item(s) as other compensation costs from services rendered by pertinent employees during the period. Other components of net benefit cost are required to be presented separately from the service cost component and outside a subtotal of income from operations. The provisions of this standard are effective for annual reporting periods beginning after December 15, 2017, including interim periods within those annual periods. Early adoption is permitted as of the beginning of an annual period for which financial statements (interim or annual) have not been issued or made available for issuance.	The Company has adopted this standard and has applied it retrospectively for the presentation of the service cost component, as well as, other components of net periodic pension cost and net periodic postretirement benefit cost in our statement of operations. The adoption decreased selling, general, and administrative expense by $159,000 for the three months ended September 30, 2016 and $479,000 for the nine months ended September 30, 2016, and comparably increased other expense by the same amounts, respectively. This guidance did not have any impact on our balance sheet or our statement of cash flows. ~~Date of Adoption: Q1 2017~~

~~Recent Accounting Pronouncements Not Yet 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 currently believes the most significant impact of this standard upon adoption relates to the revenue recognition for custom fabricated products within the Company's Industrial and Infrastructure Products segment. Under this standard, the Company expects to recognize revenue on an over time basis on custom fabricated products in the Industrial and Infrastructure Products segment which is a change from our current revenue recognition policy of point-in-time basis. The Company expects revenue recognition related to the remaining Industrial and Infrastructure Products segment, Residential Products segment and Renewable Energy and Conservation segment to remain substantially unchanged upon adoption of this standard. The Company has identified and is in the process of implementing appropriate changes to the Company's business processes, systems and internal controls to support recognition and disclosure under this standard. The Company currently anticipates adopting the modified retrospective transition method approach. The Company has not yet completed the process of quantifying the effects of any changes that will result from adoption. ~~Planned date of adoption: Q1 2018~~

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~~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 is currently evaluating the impact of this standard on the Company's consolidated financial statements and related disclosures, including the impact on the Company's current lease portfolio from both a lessor and lessee perspective. The adoption of this standard will primarily result in an increase in the assets and liabilities on the Company's consolidated balance sheet and related disclosures. ~~Planned date of adoption: Q1 2019~~
~~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 is currently evaluating the requirements of this standard and has not yet determined its impact on the Company's consolidated financial statements.~~ ~~Planned 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 is currently evaluating the requirements of this standard and has not yet determined its impact on the Company's consolidated financial statements.~~ ~~Planned date of adoption: Q1 2018~~

3.(3) ACCOUNTS RECEIVABLE, NET

Accounts receivable ~~consists~~consisted of the following (in thousands):


	March 31, 2023		December 31, 2022
Trade accounts receivable	$	189,281	$	179,170
Costs in excess of billings	45,015		41,732
Total accounts receivables	234,296		220,902
Less allowance for doubtful accounts and contract assets	(4,164)		(3,746)
Accounts receivable, net	$	230,132	$	217,156

September 30, 2017 December 31, 2016
Trade accounts receivable $ 104,031
$ 81,193
Contract receivables:
Amounts billed 49,866
41,569
Costs in excess of billings 18,374
6,582
Total contract receivables 68,240
48,151
Total accounts receivable 172,271
129,344
Less allowance for doubtful accounts (5,553 ) (5,272 )
Accounts receivable $ 166,718
$ 124,072

~~Contract receivables are primarily associated with developers, contractors and customers in connection with~~Refer to Note 4 "Revenue" concerning the ~~Renewable Energy and Conservation segment. Costs~~Company's costs in excess of ~~billings principally represent revenues~~billings.

The following table provides a roll-forward of the allowance for credit losses, for the three month period ended March 31, 2023, that is deducted from the amortized cost basis of accounts receivable to present the net amount expected to be collected (in thousands):


Beginning balance as of January 1, 2023	$	3,746

Bad debt expense, net of recoveries	260
Accounts written off against allowance and other adjustments	158
Ending balance as of March 31, 2023	$	4,164

(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; 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 onby timing of transfer of control by reportable segment.

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As of March 31, 2023, the Company's remaining performance obligations are part of contracts that ~~were not billable as~~have an original expected duration of ~~the balance sheet date. These amounts will be billed in accordance with contract terms, generally as certain milestones are reached~~one year or ~~upon shipment. All~~less.

Contract assets consist of ~~the~~ costs in excess of billings ~~are expected to be collected~~presented within ~~one year. In situations where billings exceed revenues recognized,~~accounts receivable in the ~~excess is included in~~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 ~~Consolidated Balance Sheet.~~

Company's consolidated balance sheets. Unearned revenue as of March 31, 2023 and December 31, 2022 was $7.8 million and $4.6 million, respectively. Revenue recognized during the three months ended March 31, 2023 and 2022 that was in contract liabilities at the beginning of the respective periods was $18.7 million and $27.4 million, respectively.

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4.(5) INVENTORIES

Inventories ~~consist~~consisted of the following (in thousands):


	March 31, 2023		December 31, 2022
Raw material	$	120,150	$	111,187
Work-in-process	12,824		17,944
Finished goods	44,944		47,523
Gross inventory	177,918		176,654
Less reserves	(6,284)		(6,294)
Total inventories, net	$	171,634	$	170,360

September 30, 2017 December 31, 2016
Raw material $ 41,569
$ 41,758
Work-in-process 12,123
12,268
Finished goods 31,464
35,586
Total inventories $ 85,156
$ 89,612

~~5. ACQUISITIONS~~(6) ACQUISITION

On ~~February~~August 22, ~~2017,~~2022, the Company ~~acquired~~purchased all the issued and outstanding membership interests of ~~the outstanding stock~~Quality Aluminum Products ("QAP"), a manufacturer 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.~~aluminum and steel products including soffit, fascia, trim coil, rain carrying products and aluminum siding. The results of ~~Package Concierge~~QAP have been included in the Company's consolidated financial results since the date of acquisition ~~(within~~within the Company's Residential ~~Products segment).~~segment. The ~~final aggregate~~ purchase consideration for the acquisition of ~~Package Concierge~~QAP was ~~$18,917,000,~~$52.1 million, which includes a working capital adjustment and certain other adjustments provided for in the ~~stock~~membership interest purchase agreement.

The purchase price for the acquisition was allocated to the assets acquired and liabilities assumed based upon their respective fair ~~values.~~values estimated as of the date of acquisition. The Company has completed the process to confirm the existence, condition, and completeness of the assets acquired and liabilities assumed to establish fair value of such assets and liabilities and to determine the amount of goodwill to be recognized as of the date of acquisition. The final determination of the fair value of certain assets and liabilities has been completed within a measurement period of up to one year from the date of acquisition. The excess consideration was recorded as goodwill and approximated ~~$16,863,000,~~$4.0 million, all of 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 domestic building products markets.

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


Cash	$	1,018
Working capital	23,372
Property, plant and equipment	8,486
Acquired intangible assets	14,700
Other assets	1,813
Other liabilities	(1,295)
Goodwill	3,991
Fair value of purchase consideration	$	52,085

Cash $ 590
Working capital (2,071 )
Property, plant and equipment 55
Acquired intangible assets 3,600
Other assets 8
Deferred income taxes (128 )
Goodwill 16,863
Fair value of purchase consideration $ 18,917

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


	Fair Value		Weighted-Average Amortization Period
Trademarks	$	2,800	Indefinite


Customer relationships	11,900		12 years
Total	$	14,700

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

~~On October 11, 2016,~~In determining the ~~Company acquired all~~allocation of the ~~outstanding stock of Nexus Corporation ("Nexus"). Nexus is a leading provider of commercial-scale greenhouses to customers in the United States.~~

~~Table of Contents~~

The acquisition of Nexus is expected to enable the Company to strengthen its position in the commercial greenhouse market in the United States. The results of Nexus 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 final aggregate purchase consideration for the acquisition of Nexus was $23,762,000, which includes a working capital adjustment and certain other adjustments provided for in the stock purchase agreement. At December 31, 2016, $1,000,000 of the estimated purchase price ~~was accrued. Upon settlement of the final purchase adjustments, $167,000 was paid in cash by the Company during the first quarter of 2017.~~

~~The purchase price for the acquisition was allocated~~ to the assets acquired and liabilities assumed, ~~based upon their respective~~the Company uses all available information to make fair ~~values. The excess consideration was recorded as goodwill~~value determinations using Level 3 unobservable inputs in which little or no market data exists, and ~~approximated $11,451,000, of which all is deductible for tax purposes.~~

~~The allocation of the purchase consideration~~therefore, engages independent valuation specialists to assist in the fair value determination of the ~~assets~~ acquired ~~and liabilities assumed is as follows as of the date of the acquisition (in thousands):~~

Cash $ 2,495
Working capital (1,109 )
Property, plant and equipment 4,702
Acquired intangible assets 6,200
Other assets 23
Goodwill 11,451
Fair value of purchase consideration $ 23,762

long-lived assets.

The ~~intangible assets acquired in this~~ acquisition ~~consisted~~ of QAP was financed primarily through borrowings under the ~~following (in thousands):~~

Fair Value Estimated
Useful Life
Trademarks $ 3,200
Indefinite
Technology 1,300
15 years
Customer relationships 800
11 years
Backlog 900
0.25 years
Total $ 6,200

Company's revolving credit facility.

The Company recognized costs related to recent acquisitions ~~of Package Concierge and Nexus were funded from available cash on hand. The Company incurred certain acquisition-related costs composed~~comprised of legal and consulting fees ~~and these costs were recognized as a component of~~within selling, general, and administrative ("SG&A") expenses ~~in the consolidated statements~~ of ~~operations.~~

~~The following table summarizes acquisition-related costs~~$21.0 thousand and $7.0 thousand for the three ~~and nine~~ months ended ~~September 30 (in thousands):~~March 31, 2023 and 2022, respectively.

Three Months Ended
September 30, Nine Months Ended
September 30,
2017 2016 2017 2016
Acquisition-related costs $ 31
$ —
$ 146
$ 31

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6.(7) GOODWILL AND RELATED INTANGIBLE ASSETS

Goodwill

The changes in the carrying amount of goodwill for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2023 are as follows (in thousands):

Residential
Products

Industrial and
Infrastructure
Products
Renewable Energy & Conservation Total
Balance at December 31, 2016 $ 181,285
$ 53,884
$ 68,863
$ 304,032
Acquired goodwill 16,863
—
—
16,863
Adjustments to prior year acquisitions —
—
(832 ) (832 )
Foreign currency translation —
432
598
1,030
Balance at September 30, 2017 $ 198,148
$ 54,316
$ 68,629
$ 321,093


	Renewables		Residential		Agtech		Infrastructure		Total
Balance at December 31, 2022	$	188,030	$	209,056	$	83,599	$	31,678	$	512,363

Adjustments to prior year acquisitions	—		387		—		—		387
Foreign currency translation	(141)		—		30		—		(111)
Balance at March 31, 2023	$	187,889	$	209,443	$	83,629	$	31,678	$	512,639

Goodwill is recognized net of accumulated impairment losses of ~~$235,419,000~~$133.2 million as of ~~September 30, 2017~~March 31, 2023 and December 31, ~~2016.~~2022, respectively.

The Company is required to regularly assess whether a triggering event has occurred which would require interim impairment testing. The Company determined that no triggering event had occurred as of March 31, 2023 which would require an interim impairment test to be performed.

Acquired Intangible Assets

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


	March 31, 2023				December 31, 2022
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Indefinite-lived intangible assets:
Trademarks	$	55,500	$	—	$	55,500	$	—
Finite-lived intangible assets:
Trademarks	5,449		4,516		5,448		4,481
Unpatented technology	34,165		22,610		34,163		22,037
Customer relationships	115,027		48,609		115,125		46,557
Non-compete agreements	2,371		2,042		2,371		2,006

	157,012		77,777		157,107		75,081
Total acquired intangible assets	$	212,512	$	77,777	$	212,607	$	75,081

September 30, 2017 December 31, 2016

Gross
Carrying
Amount

Accumulated
Amortization

Gross
Carrying
Amount

Accumulated
Amortization
Estimated Life
Indefinite-lived intangible assets:
Trademarks $ 45,153
$ —
$ 44,720
$ —
Indefinite
Finite-lived intangible assets:
Trademarks 5,882
2,921
5,808
2,427
5 to 15 Years
Unpatented technology 28,020
11,523
26,720
10,041
5 to 20 Years
Customer relationships 80,719
38,182
78,569
33,585
5 to 17 Years
Non-compete agreements 1,649
854
1,649
623
4 to 10 Years
Backlog —
—
900
900
0.25 Years
116,270
53,480
113,646
47,576

Total acquired intangible assets $ 161,423
$ 53,480
$ 158,366
$ 47,576

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The following table summarizes the acquired intangible asset amortization expense for the three ~~and nine~~ months ended ~~September 30~~March 31, (in thousands):

Three Months Ended
September 30, Nine Months Ended
September 30,
2017 2016 2017 2016
Amortization expense $ 2,208
$ 2,159
$ 6,600
$ 6,541



	2023		2022
Amortization expense	$	2,766	$	3,098

Amortization expense related to acquired intangible assets for the remainder of fiscal ~~2017~~2023 and the next five years thereafter is estimated as follows (in thousands):


	2023		2024		2025		2026		2027		2028
Amortization expense	$	8,297	$	10,883	$	10,745	$	9,338	$	7,699	$	6,832

2017 $2,157
2018 $8,288
2019 $7,617
2020 $7,105
2021 $6,503
2022 $6,092

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7.(8) LONG-TERM DEBT

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


	March 31, 2023		December 31, 2022
Revolving credit facility	$	52,000	$	91,000

Less unamortized debt issuance costs	(2,124)		(2,238)
Total debt	$	49,876	$	88,762

September 30, 2017 December 31, 2016
Senior Subordinated 6.25% Notes $ 210,000
$ 210,000
Other debt 2,400
2,800
Less unamortized debt issuance costs (2,575 ) (3,163 )
Total debt 209,825
209,637
Less current maturities 400
400
Total long-term debt $ 209,425
$ 209,237
Revolving Credit Facility

~~The Company's Fifth~~On December 8, 2022, the Company entered into a Credit Agreement (the "Credit Agreement"), and concurrently with entering into the Credit Agreement, the Company paid off all amounts owed under the Sixth 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.~~

as of January 24, 2019. The ~~Senior~~ Credit Agreement provides for a revolving credit facility and letters of credit in an aggregate amount ~~of $300~~equal to $400 million. The Company ~~has the option to~~can request additional financing ~~from the banks~~ to ~~either~~ increase the revolving credit facility to ~~$500~~$700 million or ~~to provide~~enter into a term loan of up to ~~$200 million.~~$300 million subject to conditions set forth in the Credit Agreement. The ~~Senior~~ Credit Agreement contains two financial covenants. As of ~~September 30, 2017,~~March 31, 2023, the Company iswas in compliance with all financial covenants. The Credit Agreement terminates on December 8, 2027.

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

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

For the three months ended March 31, 2022, interest rates on the revolving credit facility ~~are~~under the Sixth Amended and Restated Credit Agreement were based on ~~the~~ LIBOR plus an additional margin that ranges from ~~1.25%~~1.125% to ~~2.25% for LIBOR loans based on the Total Leverage Ratio.~~

2.00%. In addition, the revolving credit facility isunder the Sixth Amended and Restated Credit Agreement was subject to an undrawn commitment fee ranging between ~~0.20%~~0.15% and ~~0.30%~~0.25% based on the Total Leverage Ratio and the daily average undrawn balance.

Standby letters of credit of ~~$11,216,000~~$4.3 million have been issued under the ~~Senior~~ Credit Agreement to third parties on behalf of the Company as of ~~September 30, 2017.~~March 31, 2023. These letters of credit reduce the amount otherwise available under the revolving credit facility. ~~As of September 30, 2017, the~~The Company had ~~$288,784,000~~$343.7 million and $304.5 million of availability under the revolving credit ~~facility. No borrowings were outstanding under the revolving credit~~ facility ~~at September 30, 2017~~as of March 31, 2023 and December 31, ~~2016.~~

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.

~~8. RELATED PARTYTRANSACTIONS~~

An officer of one of the Company's operating segments is the owner of certain real estate properties leased for manufacturing and distribution purposes by that operating segment. The leases are in effect until June 2018 and June 2020. For the three and nine months ended September 30, 2017 and 2016, the Company incurred the following lease expense for these properties (in thousands):2022, respectively.

Three Months Ended
September 30, Nine Months Ended
September 30,
2017 2016 2017 2016
Cost of sales $ 262
$ 227
$ 787
$ 679

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9.(9) ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) ~~INCOME~~

The following tables summarize the cumulative balance of each component of accumulated other comprehensive ~~loss,~~(loss) income, net of tax, ~~is as follows~~for the three months ended March 31, (in thousands):


	Foreign Currency Translation Adjustment		Minimum Post Retirement Benefit Plan Adjustments		Total Pre-Tax Amount		Tax Benefit (Expense)		Accumulated Other Comprehensive (Loss) Income
Balance at December 31, 2022	$	(3,382)	$	(395)	$	(3,777)	$	(345)	$	(3,432)

Minimum post retirement health care plan adjustments	—		11		11		3		8
Foreign currency translation adjustment	(115)		—		(115)		—		(115)
Balance at March 31, 2023	$	(3,497)	$	(384)	$	(3,881)	$	(342)	$	(3,539)

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 —
(13 ) 142
129
49
80
Foreign currency translation adjustment 3,351
—
—
3,351
—
3,351
Balance at September 30, 2017 $ (2,497 ) $ 184
$ (3,008 )
$ (5,321 )
$ (1,031 ) $ (4,290 )



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, 2022	$	1,413	$	(2,213)	$	(800)	$	784	$	(16)

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 ~~operations.~~income.

~~10.~~(10) EQUITY-BASED COMPENSATION

On May ~~6, 2016,~~4, 2022, the ~~shareholders~~stockholders of the Company ~~authorized~~approved the adoption of the Gibraltar Industries, Inc. Amended and Restated 2016 Stock Plan for Non-Employee Directors ("Non-Employee Directors Plan")~~. The Non-Employee Directors Plan is a compensation plan that~~ 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 non-employee Directors of the Company. In connection with the Non-Employee Directors Plan, the Company adopted a new stock deferral plan, the Gibraltar Industries, Inc. Non-Employee Director Stock Deferral Plan ("Deferral Plan"). The Deferral Plan permitscurrent non-employee Directors of the Company, and permits the Directors to defer receipt of such shares ~~of common stock which the non-employee Director is entitled to receive~~ pursuant to the terms of the Non-Employee Directors Plan.

On May ~~7, 2015,~~4, 2018, the ~~shareholders~~stockholders of the Company ~~authorized~~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 ~~"Plan"~~"2015 Plan"). Both the 2018 Plan and ~~simultaneously amended~~ the ~~2005 Equity Incentive~~2015 Plan ~~(the "Prior Plan") to terminate issuance of further awards from the Prior Plan. The Plan is an incentive compensation plan that allows~~allow the Company to grant equity-based incentive compensation awards, ~~to eligible participants. Awards under the Plan may be~~ in the form of non-qualified options, restricted shares, restricted stock units, performance shares, performance stock units, and ~~rights.~~stock rights to eligible participants.

Equity Based Awards - Settled in Stock

The following table ~~provides~~sets forth the number of ~~stock unit~~equity-based awards granted during the ~~nine~~three months ended ~~September 30,~~March 31, which will convert to shares upon vesting, along with the weighted average grant date fair values:


	2023			2022
Awards	Number of Awards	Weighted Average Grant Date Fair Value		Number of Awards (2)	Weighted Average Grant Date Fair Value
Performance stock units (1)	81,611	$	53.44	108,464	$	47.00
Restricted stock units	46,646	$	53.44	58,958	$	47.00

2017 2016
Awards
Number of
Awards

Weighted
Average
Grant Date
Fair Value

Number of
Awards

Weighted
Average
Grant Date
Fair Value
Performance stock units 108,748
$ 42.72
—
$ —
Restricted stock units 120,048
$ 37.14
139,982
$ 25.15
Options 25,000
$ 42.35
—
$ —
Deferred stock units 10,170
$ 34.42
11,945
$ 29.30
Restricted shares 2,034
$ 34.42
3,185
$ 29.30

~~Included in the~~(1) The Company’s performance stock units ~~disclosed above are 78,482 units awarded in February 2017 and 5,266 units award in April 2017~~(“PSUs”) represent shares granted for which the final number of ~~units that will convert~~shares earned depends on financial performance. The number of shares to ~~shares will~~ be ~~determined~~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 ~~actual~~ return on invested capital ~~(ROIC) relative~~(“ROIC”) over a one-year performance period.

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(2) PSUs granted in the first quarter of 2022 includes 5,653 units that were forfeited in the first quarter of 2023 and 62,201 units that will be converted to shares and issued to recipients in the first quarter of 2025 at 60.5% of the target amount granted, based on the Company's actual ROIC ~~targeted~~compared to ROIC target for the performance period ended December 31, 2017. Additionally, included in the performance stock units disclosed above, there were 20,000 units awarded in February 2017 and 5,000 units award in April 2017. For these awards, the final number of shares to be issued to the recipient will be determined based upon the ranking of the Company’s total shareholder return over a three (3) year performance period ended February 1, 2020 compared to the total shareholder return of companies in the S&P Small Cap Industrial Sector over such period.2022.

~~Table of Contents~~

~~Performance Stock Units~~Equity Based Awards - Settled in Cash

The ~~Company awarded performance stock units ("PSUs")~~Company's equity-based awards that ~~will convert to~~are settled in cash ~~after three years based upon a one year performance period in 2016 and 2015. The cost of these~~are the awards ~~is recognized over~~under the requisite vesting period. The PSUs earned over the performance period are determined based on the Company’s actual return on invested capital (ROIC) relative to the ROIC targeted for the performance period.

~~During the 2016 performance period, the participants earned an aggregate of 256,000 PSUs, representing 200% of the targeted~~

~~2016 award of 128,000. This award will convert to cash payable in January 2019.~~

During the 2015 performance period, the participants earned an aggregate of 438,000 PSUs, representing 200% of the targeted 2015 award of 219,000. This award will convert to cash payable in January 2018.

~~The following table summarizes the compensation expense recognized for the PSUs, which will convert to cash, for the three and nine months ended September 30, (in thousands):~~

Three Months Ended
September 30, Nine Months Ended
September 30,
2017 2016 2017 2016
PSUs compensation (recovery) expense $ (405 ) $ 4,148
$ 1,673
$ 7,889

~~Management Stock Purchase Plan~~

~~The~~ Management Stock Purchase Plan ~~("MSPP"~~(the “MSPP”) which is authorized under the Company's equity incentive plans. The MSPP provides participants the ability to defer a portion of their compensation, ~~which deferral is converted~~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, and credited~~units. Employees eligible to ~~an account. Under the MSPP, the Company provides~~defer a ~~matching~~portion of their compensation also receive a company-matching award in restricted stock units equal to a percentage of ~~the employees'~~their compensation. ~~Matching awards~~

The deferrals and related company match are ~~not provided~~credited to ~~directors. The~~an account that represents a share-based ~~liability~~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 ~~which is~~ payable to participants upon retirement or a termination of their service to the Company.

Total MSPP liabilities recorded on the consolidated balance sheet as of March 31, 2023 was $15.9 million, of which $2.0 million was included in current accrued expenses and $13.9 million was included in non-current liabilities. Total MSPP liabilities recorded on the consolidated balance sheet as of December 31, 2022 was $15.4 million, of which $2.3 million was included in current accrued expenses and $13.1 million was included in non-current liabilities. The value of the restricted stock units within the MSPP liability were $13.7 million and $13.4 million at March 31, 2023 and December 31, 2022, respectively.

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 liabilities during the ~~nine~~three months ended ~~September 30,~~March 31,:


	2023		2022
Restricted stock units credited	41,743		2,876
MSPP liabilities paid (in thousands)	$	2,147	$	2,545

2017 2016
Restricted stock units credited 90,754
192,380
Share-based liabilities paid (in $1000s) $ 2,392
$ 2,753

~~11. FAIR VALUE MEASUREMENTS~~

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Depending on the nature of the asset or liability, various techniques and assumptions can be used to estimate fair value. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement as follows:

~~Level 1 - Quoted prices in active markets for identical assets or liabilities.~~

~~Level 2 - Observable inputs other than quoted prices in active markets for similar assets and liabilities.~~

~~Level 3 - Inputs that are unobservable inputs for the asset or liability.~~

The Company had no financial assets or liabilities measured at fair value on a recurring basis at September 30, 2017 and December 31, 2016. The Company’s only financial instrument for which the carrying value differs from its fair value is long-term debt. At September 30, 2017 and December 31, 2016, the fair value of outstanding debt net of unamortized debt issuance costs was $218,700,000 and $219,898,000, respectively, compared to its carrying value of $209,825,000 and $209,637,000, respectively. The fair value of the Company’s 6.25% Notes is classified as Level 2 within the fair value hierarchy and was estimated based on quoted market prices adjusted for unamortized debt issuance costs.

~~12. DISCONTINUED OPERATIONS~~

For certain divestiture transactions completed in prior years, the Company has agreed to indemnify the buyer for various liabilities that may arise after the disposal date, subject to limits of time and amount. The Company is a party to certain claims made under these indemnification provisions. As of ~~September 30, 2017~~, the Company has a contingent liability recorded for such provisions related to discontinued operations. Management does not believe that the outcome of this claim, or other claims, would significantly affect the Company's financial condition or results of operation.

~~13.~~(11) EXIT ACTIVITY COSTS AND ASSET IMPAIRMENTS

~~Table of Contents~~

The Company ~~is in the third year~~has incurred exit activity costs and asset impairment charges as a result of its ~~five year planned transformation strategy formulated to transform its operations and improve its financial results over this five year period. This strategy includes an~~ 80/20 simplification ~~initiative which,~~and portfolio management initiatives. These initiatives have resulted in ~~part, focuses the Company’s internal resources on further increasing the value provided to our customers. A result of this initiative was~~ the identification of low-volume, low margin, internally-produced products which have been or will be outsourced or ~~discontinued. Portfolio management, another key part~~discontinued, the simplification of the strategy and a natural adjunct to the 80/20 initiative, is another initiative in which management conducts strategic reviews of our current portfolio for future profitable growth and greater shareholder returns. This initiative has resulted inprocesses, the sale and exiting of less profitable businesses or ~~products~~product lines, and a reduction in ~~order to enable~~ the ~~Company to re-allocate leadership, time, capital and resources to the highest potential platforms and businesses.~~ Company's manufacturing footprint.

Exit activity costs (recoveries) were incurred during the three months ended March 31, 2023 and 2022 which related to moving and closing costs, and severance, along with asset impairment charges ~~were incurred~~(recoveries) related to the write-down of inventory associated with discontinued product lines, as a result of process simplification initiatives. In conjunction with these initiatives, the Company recorded costs during the three months ended March 31, 2023 associated with the final closure and sale of a facility closed during the fourth quarter of 2022. During the three months ended March 31, 2022, the Company closed one facility as a result of these initiatives.

Exit activity costs were incurred during the nine months ended September 30, 2017 which related to contract termination costs, severance costs, and other moving and closing costs. These costs were the result

Table of the closing and consolidation of facilities, relocation of inventory and equipment at those facilities and the reduction of workforce associated with the discontinued products and closed facilities. During the nine months ended September 30, 2017, asset impairment charges incurred were more than offset by a gain on sale of assets previously impaired in 2016 as a result of businesses and product lines discontinued. Specifically, the exit of both the Company's small European residential solar racking business and the exit of the Company's U.S. bar grating product line, which commenced during the fourth quarter of 2016, transacted sales of assets during the nine months ended September 30, 2017 which resulted in a net gain. These exits were completed in the first half of 2017. During the nine months ended September 30, 2017, asset impairment charges were incurred related to the write-down of inventory, impairment of machinery and equipment and intangible assets associated with either discontinued product lines or the reduction of manufactured goods offered within a product line. These assets were written down to their sale or scrap value, and were subsequently sold or disposed of. During the nine months ended September 30, 2017, the Company closed three facilities as a result of this strategy.Contents

During the nine months ended September 30, 2016, the Company incurred asset impairment charges and exit activity costs resulting from the above strategy as well. As a result of these initiatives, the Company sold its European industrial manufacturing business to a third party in April 2016, as well as closed four other facilities during the first nine months of 2016.

The following tables set forth the exit activity costs (recoveries) and asset impairment charges ~~and exit activity costs~~(recoveries) incurred by segment during the three ~~and nine~~ months ended ~~September 30,~~March 31, related to the restructuring activities described above (in thousands):

Three Months Ended
September 30,
2017 2016
Inventory write-downs &/or asset impairment recoveries, net Exit activity costs Total Inventory write-downs &/or asset impairment charges Exit activity costs Total
Residential Products $ 442
$ 566
$ 1,008
$ 373
$ 207
$ 580
Industrial & Infrastructure Products 98
(12 ) 86
2,429
756
3,185
Renewable Energy & Conservation 266
191
457
—
—
—
Corporate —
16
16
—
—
—
Total exit activity costs & asset impairments $ 806
$ 761
$ 1,567
$ 2,802
$ 963
$ 3,765

Nine Months Ended
September 30,
2017 2016
Inventory write-downs &/or asset impairment recoveries, net Exit activity costs Total Inventory write-downs &/or asset impairment charges Exit activity costs Total
Residential Products $ 295
$ 958
$ 1,253
$ 1,179
$ 677
$ 1,856
Industrial & Infrastructure Products (2,492 ) 2,959
467
2,697
2,019
4,716
Renewable Energy & Conservation 266
2,610
2,876
—
—
—
Corporate —
179
179
—
—
—
Total exit activity costs & asset impairments $ (1,931 ) $ 6,706
$ 4,775
$ 3,876
$ 2,696
$ 6,572

~~Table of Contents~~



	2023						2022
	Exit activity costs		Asset impairment recovery		Total		Exit activity costs (recoveries), net		Asset impairment charges		Total
Renewables	$	—	$	(63)	$	(63)	$	1,328	$	1,198	$	2,526
Residential	114		—		114		3		—		3
Agtech	561		—		561		(9)		—		(9)
Infrastructure	—		—		—		(63)		—		(63)
Corporate	—		—		—		20		—		20
Total	$	675	$	(63)	$	612	$	1,279	$	1,198	$	2,477

The following table provides a summary of where the ~~asset impairments and~~ exit activity costs and asset impairment charges were recorded in the ~~statement~~consolidated statements of ~~operations~~income for the three ~~and nine~~ months ended ~~September 30,~~March 31, (in thousands):



	2023		2022
Cost of sales	$	513	$	2,208
Selling, general, and administrative expense	99		269
Total exit activity and asset impairment charges	$	612	$	2,477

Three Months Ended
September 30, Nine Months Ended
September 30,
2017 2016 2017 2016
Cost of sales $ 860
$ 3,433
$ 382
$ 5,111
Selling, general, and administrative expense 707
332
4,393
1,461
Net asset impairment and exit activity charges $ 1,567
$ 3,765
$ 4,775
$ 6,572

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


	2023		2022
Balance at January 1	$	2,417	$	272
Exit activity costs recognized	675		1,279
Cash payments	(1,321)		(116)
Balance at March 31	$	1,771	$	1,435

2017 2016
Balance at January 1 $ 3,744
$ 603
Exit activity costs recognized 6,706
2,696
Cash payments (9,207 ) (2,182 )
Balance at September 30 $ 1,243
$ 1,117

As noted above, the Company sold its European industrial manufacturing business to a third party on April 15, 2016 from its Industrial and Infrastructure Products segment. This divestiture did not meet the criteria to be reported as a discontinued operation as it does not represent a strategic shift that has or will have a major effect on the Company’s operations. Similarly, neither the exiting of the Company’s small European residential solar racking business nor its U.S. bar grating product line met the criteria to be reported as a discontinued operation for the year ended December 31, 2016. Therefore, prior period results of continuing operations have not been restated to exclude the impact of the divested and existed businesses' financial results. The pretax loss on sale of the European industrial manufacturing business is presented within other expense (income) in the consolidated statement of operations. The costs related to the exit of the Company's small European residential solar racking business and its U.S. bar grating product line are reflected in the above tables.

~~14.~~(12) INCOME TAXES

The following table summarizes the provision for income taxes for continuing operations (in thousands) for the three ~~and nine~~ months ended ~~September 30,~~March 31, and the applicable effective tax rates:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016				2023			2022
Provision for income taxes	$	11,184		$	8,952		$	21,090		$	12,131		Provision for income taxes	$	7,177		$	5,101
Effective tax rate	35.2		%	39.4		%	35.8		%	22.7		%	Effective tax rate	25.4		%	24.8		%

The effective tax rate for the three months ended March 31, 2023 and ~~nine months ended September 30, 2017~~2022, respectively, was greater than the U.S. federal statutory rate of ~~35%~~21% due to state taxes and ~~$2.2 million of pretax losses generated by the European residential solar racking business for which no tax benefit has been recorded, as such benefit is not expected to be realizable,~~nondeductible permanent differences partially offset by ~~net deductible permanent differences and~~ favorable discrete items. The effective tax rate for the third quarter of 2016 exceeded the U.S. federal statutory rate of 35% due to state taxes and unfavorable discrete items. The effective tax rate for the nine months ended September 30, 2016 was less than the U.S. federal statutory rate of 35% due to deductible permanent differences and favorable discrete items partially offset by state taxes.

The Company recorded a discrete tax benefit of $11.4 million during the nine months ended September 30, 2016 due to the effect of a worthless stock deduction and an associated bad debt deduction of inter-company debt resulting from the sale of its European industrial manufacturing business to a third party. The amount of this benefit was subsequently adjusted and reduced by $4.8 million in the fourth quarter of 2016.

Table of Contents

~~15.~~(13) EARNINGS PER SHARE

~~Basic earnings~~Earnings per share and the weighted average shares outstanding used in calculating basic and diluted ~~weighted-average shares outstanding~~earnings per share are as follows for the three ~~and nine~~ months ended ~~September 30,~~March 31, (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017			2016			2023		2022
Numerator:										Numerator:
Income from continuing operations	$	20,619	$	13,786	$	37,789		$	41,427
Loss from discontinued operations	—		—		(405		)	—
Net income available to common shareholders	$	20,619	$	13,786	$	37,384		$	41,427

Net income available to common stockholders										Net income available to common stockholders	$	21,099	$	15,456
Denominator for basic earnings per share:										Denominator for basic earnings per share:
Weighted average shares outstanding	31,703		31,579		31,700			31,493		Weighted average shares outstanding	30,897		32,913
Denominator for diluted earnings per share:										Denominator for diluted earnings per share:
Weighted average shares outstanding	31,703		31,579		31,700			31,493		Weighted average shares outstanding	30,897		32,913
Common stock options and restricted stock	507		597		516			512
Common stock units										Common stock units	127		109
Weighted average shares and conversions	32,210		32,176		32,216			32,005		Weighted average shares and conversions	31,024		33,022

The weighted average number of diluted shares does not include potential anti-dilutive common shares ~~aggregating 489,000 and 621,000~~issuable pursuant to equity based incentive compensation awards. The following table provides the potential anti-dilutive common stock units for the three months ended ~~September 30, 2017 and 2016, respectively, and 523,000 and 690,000 for the nine months ended September 30, 2017 and 2016, respectively .~~March 31, (in thousands):



	2023	2022
Common stock units	64	54

~~16.~~(14) SEGMENT INFORMATION

The Company is organized into ~~three~~four reportable segments on the basis of the production ~~process and~~processes, products and services provided by each segment, identified as follows:


~~(i)~~	~~Residential Products, which primarily includes roof and foundation ventilation products, mail and parcel storage products, rain dispersion products and roofing accessories;~~


~~(ii)~~	~~Industrial and Infrastructure Products, which primarily includes expanded and perforated metal, expansion joints and structural bearings; and~~


~~(iii)~~	~~Renewable Energy and Conservation, which primarily includes designing, engineering, manufacturing and installation of solar racking systems and greenhouse structures.~~

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

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

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

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

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

Table of Contents

The following table illustrates certain measurements used by management to assess performance of the segments described above for the three ~~and nine~~ months ended ~~September 30,~~March 31, (in thousands):



	2023		2022
Net sales:
Renewables	$	59,205	$	78,783
Residential	179,495		179,485
Agtech	35,852		42,428
Infrastructure	18,715		17,169
Total net sales	$	293,267	$	317,865

Income from operations:
Renewables	$	2,269	$	(6,984)
Residential	29,509		33,435
Agtech	2,330		31
Infrastructure	2,714		1,181
Unallocated Corporate Expenses	(7,452)		(6,468)
Total income from operations	$	29,370	$	21,195

Three Months Ended
September 30, Nine Months Ended
September 30,
2017 2016 2017 2016
Net sales:
Residential Products $ 129,501
$ 117,957
$ 361,304
$ 338,069
Renewable Energy and Conservation 88,135
82,008
202,690
204,648
Industrial and Infrastructure Products 57,162
73,193
165,806
234,590
Less: Intersegment sales (224 ) (424 ) (994 ) (1,164 )
Net Industrial and Infrastructure Products 56,938
72,769
164,812
233,426
Total consolidated net sales $ 274,574
$ 272,734
$ 728,806
$ 776,143

Income from operations:
Residential Products $ 23,764
$ 19,407
$ 61,984
$ 52,363
Renewable Energy and Conservation 11,549
16,366
18,381
34,969
Industrial and Infrastructure Products 2,554
1,913
5,914
11,429
Unallocated Corporate Expenses (2,174 ) (11,164 ) (15,977 ) (25,902 )
Total income from operations $ 35,693
$ 26,522
$ 70,302
$ 72,859

~~17. SUPPLEMENTAL FINANCIAL INFORMATION~~


	March 31, 2023		December 31, 2022
Total assets:
Renewables	$	393,088	$	392,368
Residential	535,423		519,567
Agtech	180,688		193,966
Infrastructure	82,795		80,264
Unallocated corporate assets	16,498		24,448

	$	1,208,492	$	1,210,613

The following ~~information sets forth~~tables illustrate segment revenue disaggregated by timing of transfer of control to the ~~consolidating summary financial statements of~~customer for the issuer (Gibraltar Industries, Inc.) and guarantors, which guarantee the 6.25% Notes due February 1, 2021, and the non-guarantors. The guarantors are 100% owned domestic subsidiaries of the issuer and the guarantees are full, unconditional, joint and several.three months ended March 31 (in thousands):

Investments in subsidiaries are accounted for by the parent using the equity method of accounting. The guarantor subsidiaries and non-guarantor subsidiaries are presented on a combined basis. The principal elimination entries eliminate investments in subsidiaries and intercompany balances and transactions.


	Three Months Ended March 31, 2023
	Renewables		Residential		Agtech		Infrastructure		Total
Net sales:
Point in Time	$	9,094	$	177,942	$	5,107	$	6,061	$	198,204
Over Time	50,111		1,553		30,745		12,654		95,063
Total net sales	$	59,205	$	179,495	$	35,852	$	18,715	$	293,267


	Three Months Ended March 31, 2022
	Renewables		Residential		Agtech		Infrastructure		Total
Net sales:
Point in Time	$	5,650	$	178,131	$	1,613	$	6,303	$	191,697
Over Time	73,133		1,354		40,815		10,866		126,168
Total net sales	$	78,783	$	179,485	$	42,428	$	17,169	$	317,865

Table of Contents

~~GIBRALTAR INDUSTRIES, INC.~~

~~CONSOLIDATING STATEMENTS OF OPERATIONS~~

~~THREE MONTHS ENDED SEPTEMBER 30, 2017~~

~~(in thousands)~~

Gibraltar
Industries, Inc.

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries
Eliminations Total
Net sales $ —
$ 264,448
$ 15,514
$ (5,388 ) $ 274,574
Cost of sales —
198,103
12,844
(5,108 ) 205,839
Gross profit —
66,345
2,670
(280 ) 68,735
Selling, general, and administrative expense 34
31,003
2,005
—
33,042
(Loss) income from operations (34 ) 35,342
665
(280 ) 35,693
Interest expense (income) 3,402
105
(21 ) —
3,486
Other expense —
100
304
—
404
(Loss) income before taxes (3,436 ) 35,137
382
(280 ) 31,803
(Benefit of) provision for income taxes (1,124 ) 12,219
89
—
11,184
Equity in earnings from subsidiaries 23,211
293
—
(23,504 ) —
Net income $ 20,899
$ 23,211
$ 293
$ (23,784 ) $ 20,619

~~Table of Contents~~

~~GIBRALTAR INDUSTRIES, INC.~~

~~CONSOLIDATING STATEMENTS OF OPERATIONS~~

~~THREE MONTHS ENDED SEPTEMBER 30, 2016~~

~~(in thousands)~~

Gibraltar
Industries, Inc.

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries
Eliminations Total
Net sales $ —
$ 265,657
$ 15,799
$ (8,722 ) $ 272,734
Cost of sales —
202,199
11,721
(9,073 ) 204,847
Gross profit —
63,458
4,078
351
67,887
Selling, general, and administrative expense 94
38,505
2,766
—
41,365
(Loss) income from operations (94 ) 24,953
1,312
351
26,522
Interest expense (income) 3,403
241
(19 ) —
3,625
Other expense (income) 230
24
(95 ) —
159
(Loss) income before taxes (3,727 ) 24,688
1,426
351
22,738
(Benefit of) provision for income taxes (1,416 ) 10,804
(436 ) —
8,952
Equity in earnings from subsidiaries 15,746
1,862
—
(17,608 ) —
Net income $ 13,435
$ 15,746
$ 1,862
$ (17,257 ) $ 13,786

~~Table of Contents~~

~~GIBRALTAR INDUSTRIES, INC.~~

~~CONSOLIDATING STATEMENTS OF OPERATIONS~~

~~NINE MONTHS ENDED SEPTEMBER 30, 2017~~

~~(in thousands)~~

Gibraltar
Industries, Inc.

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries
Eliminations Total
Net sales $ —
$ 700,848
$ 37,383
$ (9,425 ) $ 728,806
Cost of sales —
527,389
30,565
(8,963 ) 548,991
Gross profit —
173,459
6,818
(462 ) 179,815
Selling, general, and administrative expense 111
101,190
8,212
—
109,513
(Loss) income from operations (111 ) 72,269
(1,394 ) (462 ) 70,302
Interest expense (income) 10,207
459
(54 ) —
10,612
Other expense —
345
466
—
811
(Loss) income before taxes (10,318 ) 71,465
(1,806 ) (462 ) 58,879
(Benefit of) provision for income taxes (3,808 ) 24,957
(59 ) —
21,090
(Loss) income from continuing operations (6,510 ) 46,508
(1,747 ) (462 ) 37,789
Discontinued operations:
Loss from discontinued operations before taxes —
(644 ) —
—
(644 )
Benefit of income taxes —
(239 ) —
—
(239 )
Loss from discontinued operations —
(405 ) —
—
(405 )
Equity in earnings (loss) from subsidiaries 44,356
(1,747 ) —
(42,609 ) —
Net income (loss) $ 37,846
$ 44,356
$ (1,747 ) $ (43,071 ) $ 37,384

~~Table of Contents~~

~~GIBRALTAR INDUSTRIES, INC.~~

~~CONSOLIDATING STATEMENTS OF OPERATIONS~~

~~NINE MONTHS ENDED SEPTEMBER 30, 2016~~

~~(in thousands)~~

Gibraltar
Industries, Inc.

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries
Eliminations Total
Net sales $ —
$ 728,782
$ 63,014
$ (15,653 ) $ 776,143
Cost of sales —
551,195
49,436
(15,368 ) 585,263
Gross profit —
177,587
13,578
(285 ) 190,880
Selling, general, and administrative expense 14,268
99,622
4,131
—
118,021
(Loss) income from operations (14,268 ) 77,965
9,447
(285 ) 72,859
Interest expense (income) 10,207
836
(61 ) —
10,982
Other expense (income) 8,717
465
(863 ) —
8,319
(Loss) income before taxes (33,192 ) 76,664
10,371
(285 ) 53,558
(Benefit of) provision for income taxes (10,898 ) 22,189
840
—
12,131
Equity in earnings from subsidiaries 64,006
9,531
—
(73,537 ) —
Net income $ 41,712
$ 64,006
$ 9,531
$ (73,822 ) $ 41,427

~~Table of Contents~~

~~GIBRALTAR INDUSTRIES, INC.~~

~~CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME~~

~~THREE MONTHS ENDED SEPTEMBER 30, 2017~~

~~(in thousands)~~

Gibraltar
Industries, Inc.

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries
Eliminations Total
Net income $ 20,899
$ 23,211
$ 293
$ (23,784 ) $ 20,619
Other comprehensive income (loss):
Foreign currency translation adjustment —
—
1,581
—
1,581
Adjustment to retirement benefit liability, net of tax —
(2 ) —
—
(2 )
Adjustment to post employment health care benefit liability, net of tax —
29
—
—
29
Other comprehensive income —
27
1,581
—
1,608
Total comprehensive income $ 20,899
$ 23,238
$ 1,874
$ (23,784 ) $ 22,227

~~Table of Contents~~

~~GIBRALTAR INDUSTRIES, INC.~~

~~CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME~~

~~THREE MONTHS ENDED SEPTEMBER 30, 2016~~

~~(in thousands)~~

Gibraltar
Industries, Inc.

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries
Eliminations Total
Net income $ 13,435
$ 15,746
$ 1,862
$ (17,257 ) $ 13,786
Other comprehensive income (loss):
Foreign currency translation adjustment —
—
(193 ) —
(193 )
Adjustment to retirement benefit liability, net of tax —
61
—
—
61
Adjustment to post employment health care benefit liability, net of tax —
38
—
—
38
Other comprehensive income (loss) —
99
(193 ) —
(94 )
Total comprehensive income $ 13,435
$ 15,845
$ 1,669
$ (17,257 ) $ 13,692

~~Table of Contents~~

~~GIBRALTAR INDUSTRIES, INC.~~

~~CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME~~

~~NINE MONTHS ENDED SEPTEMBER 30, 2017~~

~~(in thousands)~~

Gibraltar
Industries, Inc.

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries
Eliminations Total
Net income (loss) $ 37,846
$ 44,356
$ (1,747 ) $ (43,071 ) $ 37,384
Other comprehensive income (loss):
Foreign currency translation adjustment —
—
3,351
—
3,351
Adjustment to retirement benefit liability, net of tax —
(8 ) —
—
(8 )
Adjustment to post employment health care benefit liability, net of tax —
88
—
—
88
Other comprehensive income —
80
3,351
—
3,431
Total comprehensive income $ 37,846
$ 44,436
$ 1,604
$ (43,071 ) $ 40,815

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~~GIBRALTAR INDUSTRIES, INC.~~

~~CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME~~

~~NINE MONTHS ENDED SEPTEMBER 30, 2016~~

~~(in thousands)~~

Gibraltar
Industries, Inc.

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries
Eliminations Total
Net income $ 41,712
$ 64,006
$ 9,531
$ (73,822 ) $ 41,427
Other comprehensive income:
Foreign currency translation adjustment —
—
10,638
—
10,638
Adjustment to retirement benefit liability, net of tax —
59
—
—
59
Adjustment to post employment health care benefit liability, net of tax —
114
—
—
114
Other comprehensive income —
173
10,638
—
10,811
Total comprehensive income $ 41,712
$ 64,179
$ 20,169
$ (73,822 ) $ 52,238

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~~GIBRALTAR INDUSTRIES, INC.~~

~~CONSOLIDATING BALANCE SHEETS~~

~~SEPTEMBER 30, 2017~~

~~(in thousands)~~

Gibraltar
Industries, Inc.

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries
Eliminations Total
Assets
Current assets:
Cash and cash equivalents $ —
$ 182,827
$ 25,205
$ —
$ 208,032
Accounts receivable, net —
158,877
7,841
—
166,718
Intercompany balances (18,097 ) 21,351
(3,254 ) —
—
Inventories —
80,771
4,385
—
85,156
Other current assets 4,036
(32 ) 4,191
—
8,195
Total current assets (14,061 ) 443,794
38,368
—
468,101
Property, plant, and equipment, net —
90,933
3,555
—
94,488
Goodwill —
298,331
22,762
—
321,093
Acquired intangibles —
99,060
8,883
—
107,943
Other assets —
4,672
—
—
4,672
Investment in subsidiaries 730,080
60,844
—
(790,924 ) —
$ 716,019
$ 997,634
$ 73,568
$ (790,924 ) $ 996,297
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable $ —
$ 91,499
$ 4,682
$ —
$ 96,181
Accrued expenses 2,188
79,332
1,744
—
83,264
Billings in excess of cost —
14,578
3,656
18,234
Current maturities of long-term debt —
400
—
—
400
Total current liabilities 2,188
185,809
10,082
—
198,079
Long-term debt 208,400
1,025
—
—
209,425
Deferred income taxes —
35,520
2,642
—
38,162
Other non-current liabilities —
45,200
—
—
45,200
Shareholders’ equity 505,431
730,080
60,844
(790,924 ) 505,431
$ 716,019
$ 997,634
$ 73,568
$ (790,924 ) $ 996,297

~~Table of Contents~~

~~GIBRALTAR INDUSTRIES, INC.~~

~~CONSOLIDATING BALANCE SHEETS~~

~~DECEMBER 31, 2016~~

~~(in thousands)~~

Gibraltar
Industries, Inc.

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries
Eliminations Total
Assets
Current assets:
Cash and cash equivalents $ —
$ 143,826
$ 26,351
$ —
$ 170,177
Accounts receivable, net —
117,526
6,546
—
124,072
Intercompany balances (615 ) 6,152
(5,537 ) —
—
Inventories —
85,483
4,129
—
89,612
Other current assets 13,783
(10,070 ) 3,623
—
7,336
Total current assets 13,168
342,917
35,112
—
391,197
Property, plant, and equipment, net —
104,642
3,662
—
108,304
Goodwill —
282,300
21,732
—
304,032
Acquired intangibles —
101,520
9,270
—
110,790
Other assets —
3,922
—
—
3,922
Investment in subsidiaries 663,118
58,477
—
(721,595 ) —
$ 676,286
$ 893,778
$ 69,776
$ (721,595 ) $ 918,245
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable $ —
$ 66,363
$ 3,581
$ —
$ 69,944
Accrued expenses 7,369
60,004
3,019
—
70,392
Billings in excess of cost —
9,301
2,051
—
11,352
Current maturities of long-term debt —
400
—
—
400
Total current liabilities 7,369
136,068
8,651
—
152,088
Long-term debt 208,037
1,200
—
—
209,237
Deferred income taxes —
35,354
2,648
—
38,002
Other non-current liabilities —
58,038
—
—
58,038
Shareholders’ equity 460,880
663,118
58,477
(721,595 ) 460,880
$ 676,286
$ 893,778
$ 69,776
$ (721,595 ) $ 918,245

~~Table of Contents~~

~~GIBRALTAR INDUSTRIES, INC.~~

~~CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS~~

~~NINE MONTHS ENDED SEPTEMBER 30, 2017~~

~~(in thousands)~~

Gibraltar
Industries, Inc.

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries
Eliminations Total
Cash Flows from Operating Activities
Net cash (used in) provided by operating activities $ (15,136 ) $ 64,702
$ (735 ) $ —
$ 48,831
Cash Flows from Investing Activities
Cash paid for acquisitions —
(18,494 ) —
—
(18,494 )
Net proceeds from sale of property and equipment —
12,935
—
—
12,935
Purchases of property, plant, and equipment —
(4,929 ) (223 ) —
(5,152 )
Net cash used in investing activities —
(10,488 ) (223 ) —
(10,711 )
Cash Flows from Financing Activities
Long-term debt payments —
(400 ) —
—
(400 )
Purchase of treasury stock at market prices (1,982 ) —
—
—
(1,982 )
Net proceeds from issuance of common stock 649
—
—
—
649
Intercompany financing 16,469
(14,813 ) (1,656 ) —
—
Net cash provided by (used in) financing activities 15,136
(15,213 ) (1,656 ) —
(1,733 )
Effect of exchange rate changes on cash —
—
1,468
—
1,468
Net increase (decrease) in cash and cash equivalents —
39,001
(1,146 ) —
37,855
Cash and cash equivalents at beginning of year —
143,826
26,351
—
170,177
Cash and cash equivalents at end of period $ —
$ 182,827
$ 25,205
$ —
$ 208,032

~~Table of Contents~~

~~GIBRALTAR INDUSTRIES, INC.~~

~~CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS~~

~~NINE MONTHS ENDED SEPTEMBER 30, 2016~~

~~(in thousands)~~

Gibraltar
Industries, Inc.

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries
Eliminations Total
Cash Flows from Operating Activities
Net cash (used in) provided by operating activities $ (34,186 ) $ 119,790
$ 16,582
$ —
$ 102,186
Cash Flows from Investing Activities
Cash paid for acquisitions —
(2,314 ) —
—
(2,314 )
Net proceeds from sale of property and equipment —
220
29
—
249
Purchases of property, plant, and equipment —
(7,177 ) (423 ) —
(7,600 )
Net proceeds from sale of business —
—
8,250
—
8,250
Other, net —
1,118
—
—
1,118
Net cash (used in) provided by investing activities —
(8,153 ) 7,856
—
(297 )
Cash Flows from Financing Activities
Long-term debt payments —
(400 ) —
—
(400 )
Payment of debt issuance costs —
(54 ) —
—
(54 )
Purchase of treasury stock at market prices (1,178 ) —
—
—
(1,178 )
Net proceeds from issuance of common stock 2,892
—
—
—
2,892
Intercompany financing 32,472
(996 ) (31,476 ) —
—
Net cash provided by (used in) financing activities 34,186
(1,450 ) (31,476 ) —
1,260
Effect of exchange rate changes on cash —
—
1,055
—
1,055
Net increase (decrease) in cash and cash equivalents —
110,187
(5,983 ) —
104,204
Cash and cash equivalents at beginning of year —
39,597
29,261
—
68,858
Cash and cash equivalents at end of period $ —
$ 149,784
$ 23,278
$ —
$ 173,062

~~Table of Contents~~

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

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

The Company uses certain operating performance measures, specifically consolidated gross margin, operating margin by segment and consolidated operating margin, to manage the Company's businesses, set operational goals, and establish performance targets for incentive compensation for the Company's employees. The Company defines consolidated gross margin as a percentage of total consolidated gross profit to total consolidated net sales. The Company defines operating margin by segment as a percentage of total income from operations by segment to total net sales by segment and consolidated operating margin as a percentage of total consolidated income from operations to total consolidated net sales. The Company believes consolidated gross margin, operating margin and consolidated operating margin may be useful to investors in evaluating the profitability of the Company's segments and the Company on a consolidated basis.

Overview

Gibraltar Industries, Inc. (the "Company") is a leading manufacturer and ~~distributor~~provider of ~~building~~ products and services for the ~~industrial, transportation infrastructure, residential housing,~~ renewable energy, residential, agtech, and ~~resource conservation~~infrastructure markets. Our business strategy is designed to significantly elevate and accelerate the growth and financial returns of the Company. We believe this can be achieved, in part, from a transformational change in the Company’s portfolio, as well as, the implementation of the strategy described below. Our business strategy has four key elements, or "pillars," which are: operational excellence, product innovation, portfolio management, and acquisitions as a strategic accelerator. We strive to deliver best-in-class, sustainable value creation for our shareholders for the long-term.

Operational excellence is our first pillar in this strategy. 80/20 simplification ("80/20") is a core part of the operational excellence pillar and is based on the analysis that 25% of the customers typically generate 89% of the revenue in a business, and 150% of the profitability. Through analysis of data generated by our 80/20 practices, we are focusing on our largest and best opportunities (the “80”) and eliminating complexity associated with less profitable opportunities (the “20”) in order to generate more earnings year over year, at a higher rate of return with a more efficient use of capital.

We are in the third year of our multi-year simplification initiative. Since initiation of 80/20 in 2015, we have exceeded our initial five-year target ending 2019 of $25 million of pre-tax savings. We are currently in the middle of this 80/20 initiative, which means that there is both more work and more opportunity ahead. We are targeting greater structural changes affecting our balance sheet. We are starting the follow-on management tools of in-lining our manufacturing processes linked with market-rate-of-demand replenishment tools. These follow-on tools are focused on manufacturing the highest-volume products for our largest customers, and on a much higher level of capacity utilization. We expect these methods will yield additional benefits including lower manufacturing costs, lower inventories and fixed assets, and an even higher level of service to customers.

The second pillar of our strategy is portfolio management, which is a natural adjunct to the 80/20 initiative. Using the 80/20 process, we conduct strategic reviews of our customers and end markets, and allocate leadership time, capital and resources to the platforms and businesses with the highest revenue and margin potential. Following the sale of our European industrial manufacturing business to a third party in April 2016, we decided in December 2016 to exit our small European residential solar racking business and U.S. bar grating product line, both of which proceeded as planned. These portfolio changes have helped contribute to the Company's realization of a higher rate of return on invested capital in 2016. We have now acted on all near-term portfolio assessments and expect no additional changes in 2017 while we continue to position our resources on more attractive projects and markets.

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Product innovation is our third strategic pillar. Innovation is centered on the allocation of new and existing resources to opportunities that we believe will produce sustainable returns. Our focus is on driving top line growth with new and innovative products. We are focused on those products and technologies that have relevance to the end-user and can be differentiated from our competition. Our initiatives will be tailored toward reallocating sales and marketing talent to target specific end user groups in order to better understand their needs and the various market opportunities that may be available. This effort is expected to produce ideas and opportunities that generate profitable growth. Our focus on innovation is centered on four markets: postal, parcel and storage solutions; residential air management; infrastructure; and renewable energy. These respective markets are expected to grow based on demand for: centralized mail and parcel delivery systems; zero carbon footprint homes; the need for repairs to elevated bridges that are structurally deficient or functionally obsolete; and energy sources not dependent on fossil fuels.

The fourth pillar of our strategy is acquisitions. We have targeted four key markets in which to make strategic acquisitions which are served by existing platforms within the Company. The existing platforms include the same areas in which we are targeting the development of innovative products: postal, parcel and storage solutions; infrastructure; residential air management; and renewable energy. These platforms are all in large markets in which the underlying trends for customer convenience and safety, energy-savings and resource conservation are of increasing importance to consumers and are expected to drive long-term demand. We believe these markets also offer the opportunity for higher returns on our investments than those we have generated in the past. The acquisitions of Rough Brothers Manufacturing, Inc., RBI Solar, Inc., and affiliates, collectively known as "RBI" in June 2015 and more recently, Nexus Corporation ("Nexus") in October 2016 and Package Concierge in February 2017, were the direct result of this strategy. We also consider businesses outside of these four markets, as we continually search out opportunities to grow our business in large markets with expected growth in demand for the foreseeable future, where we can add value through our manufacturing experience, 80/20 process and purchasing synergies.

On February 22, 2017, the Company acquired all of the outstanding stock of Package Concierge for approximately $19 million subject to a working capital adjustment and certain other adjustments provided for in the stock purchase agreement. The acquisition was financed through cash on hand. Package Concierge is a leading provider of multifamily electronic package delivery locker systems in the United States. The results of operations of Package Concierge have been included within the Residential Products segment of the Company's consolidated financial statements from the date of acquisition.

On February 6, 2017, the Company completed the sale of substantially all of its U.S. bar grating product line assets to a third party. The Company had previously announced, on December 2, 2016, its intentions to exit its U.S. bar grating product line and its European residential solar racking business as part of its portfolio management initiative. These businesses contributed a combined $75 million in revenue and pre-tax operating losses of $6 million in 2016.~~This action resulted in the sale and closing of 3 facilities in early 2017. These assets were a part of our Industrial and Infrastructure Products segment.~~

On October 11, 2016, the Company acquired all of the outstanding stock of Nexus for approximately $24 million. The acquisition was financed through cash on hand. Nexus is a leading provider of commercial-scale greenhouses to customers in the United States. The results of operations of Nexus have been included within the Renewable Energy and Conservation segment of the Company's consolidated financial statements from the date of acquisition.

On April 15, 2016, the Company sold its European industrial manufacturing business to a third party for net of cash proceeds of $8.3 million. This business, which supplied expanded metal products for filtration and other applications, contributed $36 million in revenue to the Company's Industrial and Infrastructure Products segment in 2015 and had nearly break-even operating results. The Company's divestiture of this business was the result of the Company's portfolio management assessments.

The Company serves customers primarily throughout North America and, to a lesser extent, Asia. Our customers include major home improvement retailers, wholesalers, industrial distributors, contractors, solar developers and institutional and commercial growers of plants. As of September 30, 2017, we operated 42 facilities in 17 states, Canada, China, and Japan, giving us a base of operations to provide customer support, delivery, service and quality to a number of regional and national customers and providing us with manufacturing and distribution efficiencies in North America, as well as a presence in the Asian markets.

The Company operates and reports its results in the following ~~three~~four reporting ~~segments, entitled:~~segments:

~~Residential Products;~~•Renewables;

~~Renewable Energy~~•Residential;

•Agtech; and ~~Conservation;~~

•Infrastructure.

The Company serves customers primarily in North America including renewable energy (solar) developers, home improvement retailers, wholesalers, distributors, institutional and commercial growers of food and plants, and contractors. At March 31, 2023, the Company operated 33 facilities, comprised of 25 manufacturing facilities, one distribution center, and seven offices, which are located in 15 states, Canada, China, and Japan. The Company's operational infrastructure provides the necessary scale to support regional and national customers in each of the Company's markets.

~~Industrial~~Recent Trends

The broader market dynamics over the past few years, have resulted in impacts to the Company, including material cost inflation, labor availability issues and ~~Infrastructure Products.~~

logistics costs increases. The Company has also been impacted from supply constraints for materials and commodities used in its operations and from shortages in solar panels used by

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~~Our Residential Products segment~~the Company's customers in conjunction with the goods and services ~~residential repair~~the Company provides. In certain instances these constraints have resulted in project delays, cost inflation and ~~remodeling activity~~logistical delays. The Company continues to work with its customers and ~~new residential housing construction with products including roof~~suppliers in this dynamic environment to better align pricing, understand the existing and foundation ventilation products, mail and parcel storage products, rain dispersion products and roof ventilation accessories. This segment's products are sold through major retail home centers, building material wholesalers, distributor groups, residential contractors and directlypotential future impacts to the ~~multi-family property management companies.~~supply chain, and make efforts to mitigate such impacts. The Company expects that some of these dynamics will continue in 2023 and could continue to have an impact on demand, material costs, labor and logistics.

In June 2022, the Uyghur Forced Labor Prevention Act ("UFLPA") was enacted. The UFLPA requires traceability of components of imported goods to validate that the components are not sourced from areas in the Xinjiang region of China. This has caused solar panels to be held at the border awaiting a determination that the panels do not contain components from Xinjiang. While a few of the historically significant suppliers have begun to have panels cleared for importation, the clearance is still on a shipment-by-shipment basis, and formal documentation requirements have not yet been published. Some of the Company's larger customers have continued to shift sourcing to modules manufactured outside of China in efforts to clear U.S. customs more efficiently and ramp up the execution of solar projects.

~~Our Renewable Energy~~In December 2022, the U.S. Department of Commerce ("USDOC") announced its preliminary ruling regarding the circumvention of antidumping and ~~Conservation segment focuses~~countervailing duties (“AD/CVD”) on Chinese imports of solar panels produced in four other countries in Southeast Asia. Four of eight major manufacturers across the four countries investigated were found to have been circumventing the AD/CVD orders. The findings are preliminary and further investigation is occurring with a final determination scheduled for August 17, 2023. Independent of the DOC’s final determination, the Presidential Proclamation issued in June 2022 provides that duties will not be collected on the ~~design, engineering, manufacturing~~imports from the impacted countries until June 2024. This provides U.S. solar importers time to adjust supply chains to ensure compliance with U.S. law. As the timing and ~~installation~~progress of many of our customers’ projects depend upon the supply of solar ~~racking~~panels, our operating results have been and could be impacted by these actions. We continue to work with customers who are assessing their ability to source panels needed to complete projects.

On August 16, 2022, the Inflation Reduction Act ("IRA") was signed into law. Among other things, the IRA provides for Investment Tax Credits ("ITC") for renewable energy. The IRA provides a 30% ITC for projects started prior January 29, 2023. Projects started on or after this date have the opportunity to claim the 30% rate only if the project is less than one megawatt or adheres to the new prevailing wage and apprenticeship requirements. Otherwise, these projects will default to a base rate of 6%. The IRA also provides the option to earn an additional 10% credit for domestic content, and separately, an additional 10% credit for siting a project in an “energy community.” Lastly, under the IRA, Manufacturers Tax Credits ("MTC") that support clean energy manufacturing were established and expanded, and are available to suppliers of certain, specific solar tracker components, including mechanical parts and battery storage, that are made in the U.S. Final guidance is pending and expected to be issued by the Department of Treasury over the course of 2023 for the domestic content, energy community, and MTC credits. The Company believes that these enhanced tax credits under the IRA will provide long-term certainty for the industry and should reduce policy driven demand swings for our products. We will work with our customers to maximize the tax credits available to them.

Business Strategy

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

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

~~Our Industrial and Infrastructure Products segment focuses~~2.Portfolio Management is focused on ~~a variety of markets including industrial and commercial construction, highway and bridge construction, automotive, airports and energy and power generation~~optimizing the Company’s business portfolio in higher growth markets with ~~products including perimeter security, expanded~~leadership positions while ensuring its financial capital and ~~perforated metal, plank grating, as well as, expansion joints~~human resources are effectively and ~~structural bearings~~

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efficiently deployed to deliver sustainable, profitable growth while increasing its relevance with customers and shaping its markets. In 2022, the Company acquired Quality Aluminum Products ("QAP") in the Residential segment and made the decision to divest its non-core Processing business within the Agtech segment to help achieve these objectives.

3.Organization Development drives the Company’s continuous focus on ensuring it has the right design and structure to scale the organization in order to execute the Company’s plans and meet commitments. The Company aspires to make its place of work the "Best Place to Work", where focus is on creating an environment for ~~roadways~~our people to have the best opportunity for success, continue to develop, grow and ~~bridges. This segment sells~~learn. At core of this pillar is the Company’s development process focused on helping employees reach their potential, improve performance, develop career roadmaps, identify ongoing education requirements, and respective succession plans. The Company believes doing so helps it attract and retain the best people to execute its ~~products through steel fabricators and distributors, commercial and transportation contractors, and original equipment manufacturers.~~business plans.

The end markets our businesses serve include residential housing, industrial manufacturing, transportation infrastructure, and renewable energy and conservation. These end markets are subject to economic conditions that are influenced by various factors. These factors include but are not limited to changes in general economic conditions, interest rates, exchange rates, commodity costs, demand for residential construction, governmental policies and funding, tax policies and the volume of non-residential construction and infrastructure projects. We believeCompany believes the key elements of ~~our~~the Company's strategy have, and will ~~allow us~~continue to, enable the Company to respond timely to changes in ~~these factors. We have~~the end markets the Company serves, including the broader market dynamics experienced over the past two years. The Company has and ~~expect~~expects to continue to ~~restructure our~~examine the need for restructuring of the Company's operations, including consolidation of facilities, reducing overhead costs, curtailing investments in ~~inventory,~~working capital, and managing ~~our~~the Company's business to generate incremental cash. ~~Additionally, we believe our~~The Company believes its strategy ~~has enabled us~~enables the Company to ~~better react~~respond to volatility in commodity and other input costs and fluctuations in ~~commodity costs and~~ customer demand, along with striving to maintain and improve margins. The Company has ~~helped in improving margins. We have~~ used ~~the improved~~ cash flows generated by these initiatives to minimize debt, improve ~~our~~the Company's liquidity position, ~~and~~ invest in growth ~~initiatives.~~initiatives and return capital to the Company's shareholders through share repurchases. Overall, ~~we are striving~~the Company continues to strive to achieve stronger financial results, make more efficient use of capital, and deliver higher ~~shareholder~~stockholder returns.

Recent Developments

On December 8, 2022, the Company entered into a Credit Agreement (the "Credit Agreement"), and concurrently with entering into the Credit Agreement, the Company paid off all amounts owed under the Sixth Amended and Restated Credit Agreement dated as of January 24, 2019, which was terminated with no prepayment penalties. The Credit Agreement provides for a revolving credit facility and letters of credit in an aggregate amount equal to $400 million. The Company can request additional financing to increase the revolving credit facility to $700 million or enter into a term loan of up to $300 million subject to conditions set forth in the Credit Agreement. The Credit Agreement contains two financial covenants. As of March 31, 2023, the Company was in compliance with both financial covenants. The Credit Agreement terminates on December 8, 2027.

On August 22, 2022, the Company purchased all the issued and outstanding membership interests of Quality Aluminum Products ("QAP"), a manufacturer of soffit, fascia, trim coil, rain carrying products and aluminum siding for an aggregate purchase price of $52.1 million. The acquisition of QAP was financed primarily through borrowings under the Company's revolving credit facility. The results of operations of QAP have been included in the Residential segment of the Company's consolidated financial statements from the date of acquisition.

In May 2022, the Company's Board of Directors authorized a share repurchase program of up to $200 million of the Company's issued and outstanding common stock. The program has a duration of three years, ending May 2, 2025. Repurchases may be made, from time to time, in amounts and at prices the Company deems appropriate, subject to market conditions, applicable legal requirements, debt covenants and other considerations. Any such repurchases may be executed using open market purchases, privately negotiated agreements or other transactions. The repurchase program may be suspended or discontinued at any time at the Company's discretion. As of March 31, 2023, the Company has repurchased 2,150,903 shares for an aggregate price of $93.2 million under this repurchase program.

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Results of Operations

Three Months Ended ~~September 30, 2017~~March 31, 2023 Compared to the Three Months Ended ~~September 30, 2016~~March 31, 2022

The following table sets forth selected ~~data from our consolidated statements~~results of operations data and ~~the related~~its percentage of net sales for the three months ended ~~September 30,~~March 31 (in thousands):


	2017				2016					2023				2022
Net sales	$	274,574	100.0	%	$	272,734	100.0	%	Net sales	$	293,267	100.0	%	$	317,865	100.0	%
Cost of sales	205,839		75.0	%	204,847		75.1	%	Cost of sales	216,338		73.8	%	253,021		79.6	%
Gross profit	68,735		25.0	%	67,887		24.9	%	Gross profit	76,929		26.2	%	64,844		20.4	%
Selling, general, and administrative expense	33,042		12.0	%	41,365		15.2	%	Selling, general, and administrative expense	47,559		16.2	%	43,649		13.7	%

Income from operations	35,693		13.0	%	26,522		9.7	%	Income from operations	29,370		10.0	%	21,195		6.7	%
Interest expense	3,486		1.3	%	3,625		1.3	%	Interest expense	1,491		0.5	%	485		0.2	%
Other expense	404		0.1	%	159		0.1	%
Other (income) expense									Other (income) expense	(397)		(0.1)	%	153		0.0	%
Income before taxes	31,803		11.6	%	22,738		8.3	%	Income before taxes	28,276		9.6	%	20,557		6.5	%
Provision for income taxes	11,184		4.1	%	8,952		3.2	%	Provision for income taxes	7,177		2.4	%	5,101		1.6	%

Net income	$	20,619	7.5	%	$	13,786	5.1	%	Net income	$	21,099	7.2	%	$	15,456	4.9	%

The following table sets forth the Company’s net sales by reportable segment for the three months ended ~~September 30,~~March 31, (in thousands):

Change due to
2017 2016
Total
Change
Divestitures Acquisitions Operations
Net sales:
Residential Products $ 129,501
$ 117,957
$ 11,544
$ —
$ 1,811
$ 9,733
Renewable Energy and Conservation 88,135
82,008
6,127
(2,266 ) 6,423
1,970
Industrial and Infrastructure Products 57,162
73,193
(16,031 ) (14,799 ) —
(1,232 )
Less: Intersegment sales (224 ) (424 ) 200
—
—
200
Net Industrial and Infrastructure Products 56,938
72,769
(15,831 ) (14,799 ) —
(1,032 )
Consolidated $ 274,574
$ 272,734
$ 1,840
$ (17,065 ) $ 8,234
$ 10,671


							Impact of
	2023		2022		Total Change		Acquisitions		Portfolio Management		Ongoing Operations
Net sales:
Renewables	$	59,205	$	78,783	$	(19,578)	$	—	$	—	$	(19,578)
Residential	179,495		179,485		10		14,266		—		(14,256)
Agtech	35,852		42,428		(6,576)		—		691		(7,267)
Infrastructure	18,715		17,169		1,546		—		—		1,546
Consolidated	$	293,267	$	317,865	$	(24,598)	$	14,266	$	691	$	(39,555)

Consolidated net sales ~~increased~~decreased by ~~$1.8~~$24.6 million, or ~~0.7%~~7.7%, to ~~$274.6~~$293.3 million for the three months ended ~~September 30, 2017~~March 31, 2023 compared to the three months ended ~~September 30, 2016.~~March 31, 2022. The ~~increase~~7.7% decrease in ~~sales~~revenue was driven by a $39.6 million or 12.4% decrease in organic revenue, largely the result of increased volumes in ongoing revenue streams along with contributions from our recent acquisitions in our Renewable Energy and Conservation and Residential Products Segments, Nexus in October 2016 and Package Concierge in February 2017, respectively. Also contributing to the increase was a ~~modest 1.0%~~14% volume decline, partially offset by a 1% increase in pricing to customers. Partially offsetting ~~these increases~~the year over year decrease were $14.3 million of revenues generated by QAP, which was acquired during the ~~results~~third quarter of ~~divestitures related to the Company’s portfolio management activities during 2016. This included the exit~~2022 and reported as part of ~~both~~ the Company's ~~small European residential solar racking business and~~Residential segment. Consolidated backlog decreased 18% to $360 million down from $437 million at the ~~Company's U.S. bar grating product line, both~~end of ~~which commenced during the fourth quarter of 2016. These divestitures resulted in a decrease in revenues of $17.1 million from~~ the prior year quarter.

Net sales in ~~our Residential Products~~the Company's Renewables segment ~~increased 9.7%~~decreased $19.6 million, or 24.9%, ~~or $11.5 million~~ to ~~$129.5~~$59.2 million for the three months ended ~~September 30, 2017~~March 31, 2023 compared to ~~$118.0~~$78.8 million for the three months ended ~~September 30, 2016. The increase was largely~~March 31, 2022. Revenue declined as the ~~result of a net increase in volume along with sales generated~~demand for solar panel installation continues to be impacted by panel importation challenges resulting from the ~~acquisition~~UFLPA, which was implemented in June 2022. Additionally, adverse winter weather conditions experienced in the current year quarter impacted the scheduling of ~~Package Concierge and an increase in pricing~~projects. As a result, backlog decreased 20% from the prior year, however, the Company expects backlog to ~~customers. The volume increase resulted from demand for our commercial package solutions as well as our roofing-related ventilation and rain dispersion products.~~improve once there is better understanding of documentary compliance requirements relative to the UFLPA.

Net sales in ~~our Renewable Energy~~the Company's Residential segment were flat at $179.5 million for both the three months ended March 31, 2023 and ~~Conservation~~2022, respectively. The positive impact of participation gains along with $14.3 million of sales generated by QAP, acquired in the third quarter of 2022, offset headwinds of channel inventory correction, the market's return to normal seasonal demand, and adverse winter weather in key regions of the U.S.

Net sales in the Company's Agtech segment ~~increased 7.4%~~decreased 15.3%, or ~~$6.1~~$6.6 million, to ~~$88.1~~$35.9 million for the three months ended ~~September 30, 2017~~March 31, 2023 compared to ~~$82.0~~$42.4 million for the three months ended ~~September 30, 2016. The increase was the result~~March 31, 2022. Revenue declined in

Table of ~~sales generated from the acquisition of Nexus and an increase in volume in our domestic markets. Partially offsetting this increase were the effects of the exit of~~ Contents

the Company's ~~small European residential solar racking business~~produce businesses as customers re-scope and ~~continued softness in our international markets.~~re-prioritize project launch of fruit and vegetable growing facilities. While the active project pipeline continues to grow, backlog decreased 32% year over year.

Net sales in ~~our Industrial and~~the Company's Infrastructure ~~Products~~ segment ~~decreased 21.7%~~increased 8.7%, or ~~$15.8~~$1.5 million, to ~~$56.9~~$18.7 million for the three months ended ~~September 30, 2017~~March 31, 2023 compared to ~~$72.8~~$17.2 million for the three months ended ~~September 30, 2016.~~March 31, 2022. The ~~decrease~~increase in ~~net sales~~revenue was primarily the result of the Company's exit from its U.S. bar grating product line. Also a decrease in demand for our infrastructure products as compared to the third quarter in the prior year, which include components for bridges and elevated highways, contributed to the decline in volume due to continued ~~delay~~solid market demand, which also resulted in an 38% increase in backlog year over year. Management expects continued positive momentum from increased infrastructure ~~projects. We expect this decline to be temporary as backlog and bookings for this business have increased compared~~spending related to the ~~prior year quarter~~Infrastructure Investment and ~~the~~Jobs Act, and ongoing efforts to increase market ~~shows signs of recovery.~~participation.

~~Our~~The Company's consolidated gross margin ~~slightly~~ increased to ~~25.0%~~26.2% for the three months ended ~~September 30, 2017~~March 31, 2023 compared to ~~24.9%~~20.4% for the three months ended ~~September 30, 2016. This~~March 31, 2022. The increase was ~~largely~~driven by business mix, field operations productivity and improvement in supply chain management and efficiencies along with continuing progress in the result of portfolio management actions during 2016 in which less profitable businesses or product lines were sold or exited in order to enable the Company to re-allocate leadership, time, capital and resources to the highest potential platforms and businesses. This increase was largely offset by a less favorable alignment of material costs to customer selling prices.Company's business operating system.

Selling, general, and administrative ~~(SG&A)~~("SG&A") expenses ~~decreased~~increased by ~~$8.3~~$3.9 million, or ~~20.1%,~~9.0% to ~~$33.0~~$47.6 million for the three months ended ~~September 30, 2017 from $41.4~~March 31, 2023 compared to $43.6 million for the three months ended ~~September 30, 2016.~~March 31, 2022. The ~~$8.3~~$3.9 million ~~decrease~~increase was ~~primarily due to $7.6 million~~the combined result of ~~lower~~higher performance-based compensation ~~expenses,~~expense as compared to the prior year, largely the result of equity-based awards in the Company's deferred compensation plan that are valued based on its 200-day average stock price, along with ~~a $2.2 million decrease~~incremental SG&A expenses incurred by QAP, acquired in ~~senior leadership transition costs. These were partially offset by $2.3 million~~the third quarter of ~~additional expense from the acquisitions of Nexus and Package Concierge.~~2022. SG&A expenses as a percentage of net sales ~~decreased~~increased to ~~12.0%~~16.2% for the three months ended ~~September 30, 2017~~March 31, 2023 compared to ~~15.2%~~13.7% for the three months ended ~~September 30, 2016.~~

March 31, 2022.

The following table sets forth the Company’s income from operations and income from operations as a percentage of net sales by reportable segment for the three months ended ~~September 30,~~March 31, (in thousands):


											Impact of
	2023				2022				Total Change		Portfolio Management		Ongoing Operations
Income from operations:
Renewables	$	2,269	3.8	%	$	(6,984)	(8.9)	%	$	9,253	$	—	$	9,253
Residential	29,509		16.4	%	33,435		18.6	%	(3,926)		—		(3,926)
Agtech	2,330		6.5	%	31		0.1	%	2,299		1,890		409
Infrastructure	2,714		14.5	%	1,181		6.9	%	1,533		—		1,533
Unallocated Corporate Expenses	(7,452)		(2.5)	%	(6,468)		(2.0)	%	(984)		—		(984)
Consolidated income from operations	$	29,370	10.0	%	$	21,195	6.7	%	$	8,175	$	1,890	$	6,285

2017 2016
Total
Change
Income (loss) from operations:
Residential Products $ 23,764
18.4 % $ 19,407
16.5 % $ 4,357
Renewable Energy and Conservation 11,549
13.1 % 16,366
20.0 % (4,817 )
Industrial and Infrastructure Products 2,554
4.5 % 1,913
2.6 % 641
Unallocated Corporate Expenses (2,174 ) (0.8 )% (11,164 ) (4.1 )% 8,990
Consolidated income from operations $ 35,693
13.0 % $ 26,522
9.7 % $ 9,171

~~Our Residential Products~~The Renewables segment generated an operating margin of 18.4% during the three months ended September 30, 2017 compared to 16.5% during the three months ended September 30, 2016. The increase of $4.4 million of operating profit is due to the benefits of improved operational efficiencies and contributions from the 80/20 initiative.

~~The Renewable Energy and Conservation segment generated an operating margin of 13.1%~~3.8% in the current year quarter compared to ~~20.0%~~(8.9)% in the prior year quarter. The ~~decline~~increase in operating margin ~~reflects~~was driven by field operations productivity and improved supply chain management that offset lower volumes, along with restructuring costs recorded in the prior year quarter.

The Residential segment generated an ~~unfavorable~~operating margin of 16.4% in the current year quarter compared to 18.6% in the prior year quarter. The decrease in operating margin was the result of expected compression in price to material cost alignment and the anticipated lower margins from the Company's recent acquisition of QAP. The Company expects margins to improve as seasonal volume accelerates, price / material ~~costs~~cost are better aligned, and QAP integration benefits are realized.

The Agtech segment generated an operating margin of 6.5% in the current year quarter compared to ~~customer selling prices~~0.1% in the prior year quarter. Operating margin improved year over year, the result of business mix, improvement in its business operating system, along with supply chain productivity and efficiency improvement.

The Infrastructure segment generated an operating margin of 14.5% during the three months ended March 31, 2023 compared to 6.9% during the three months ended March 31, 2022. The margin improved year over year driven by strong operating execution, volume leverage, and supply chain productivity.

Unallocated corporate expenses increased $1.0 million from $6.5 million during the three months ended March 31, 2022 to $7.5 million during the three months ended March 31, 2023. The increase in expense was primarily the

Table of Contents

result of higher performance-based compensation expense for equity-based awards in the Company's deferred compensation plan that are valued based on its 200-day average stock price as compared to the prior year quarter.

~~Our Industrial and Infrastructure Products segment generated an operating margin of 4.5% during~~Interest expense increased year over year with $1.5 million for the three months ended ~~September 30, 2017~~March 31, 2023 compared to ~~2.6% during~~$0.5 million for the three months ended ~~September 30, 2016.~~March 31, 2022. The ~~improvement~~increase in expense was ~~largely the result of costs incurred in the prior-year quarter related~~due to ~~our 80/20 simplification initiatives. Partially offsetting this improvement were the effects of lower volumes from our infrastructure products and an unfavorable alignment of material costs~~both higher interest rates compared to ~~customer selling prices.~~

Unallocated corporate expenses decreased $9.0 million from $11.2 million during the three months ended September 30, 2016 to $2.2 million during the three months ended September 30, 2017. This decrease from the prior year quarter ~~was largely due to a $7.4 million decrease in performance-based compensation expenses,~~ along with ~~a $2.2~~higher outstanding balances on the Company's revolving credit facility during the quarter. The outstanding balances on the Company's revolving credit facility were $49.9 million ~~decrease in senior leadership transition costs.~~and $42.4 million as of March 31, 2023, and 2022, respectively.

The Company recorded other ~~expense~~income of $0.4 million for the three months ended ~~September 30, 2017 and~~March 31, 2023, compared to other expense of $0.2 million recorded for the three months ended ~~September 30, 2016.~~March 31, 2022. The ~~increase from~~change year over year is primarily the ~~prior year quarter was primarily due to~~result of foreign currency translation fluctuations.

Interest expense modestly decreased by $0.1 million to $3.5 million for the three months ended September 30, 2017 compared to $3.6 million for the three months ended September 30, 2016. During the three months ended September 30, 2017 and 2016, no amounts were outstanding under our revolving credit facility.

WeThe Company recognized a provision for income taxes of ~~$11.2~~$7.2 million and ~~$9.0~~$5.1 million, with effective tax rates of ~~35.2%~~25.4% and ~~39.4%~~24.8% for the three months ended ~~September 30, 2017,~~March 31, 2023, and ~~2016,~~2022, respectively. The effective tax rate for the ~~third quarter of 2017 exceeded the U.S. federal statutory rate of 35% due to state taxes~~three months ended March 31, 2023, and $2.2 million of pretax losses generated by the European residential solar racking business for which no tax benefit has been recorded as such benefit is not expected to be realizable, partially offset by net deductible permanent differences and favorable discrete items. The effective tax rate for the third quarter of 20162022, respectively, was greater than the U.S. federal statutory rate of ~~35% primarily~~21% due to state taxes and ~~unfavorable~~nondeductible permanent differences partially offset by favorable discrete items.

~~Nine Months Ended September 30, 2017 Compared to the Nine Months Ended September 30, 2016~~

~~The following table sets forth selected data from our consolidated statements of operations~~Liquidity and ~~the related percentage of net sales for the nine months ended September 30, (in thousands):~~

2017 2016
Net sales $ 728,806
100.0 % $ 776,143
100.0 %
Cost of sales 548,991
75.3 % 585,263
75.4 %
Gross profit 179,815
24.7 % 190,880
24.6 %
Selling, general, and administrative expense 109,513
15.0 % 118,021
15.2 %
Income from operations 70,302
9.7 % 72,859
9.4 %
Interest expense 10,612
1.5 % 10,982
1.4 %
Other expense 811
0.1 % 8,319
1.1 %
Income before taxes 58,879
8.1 % 53,558
6.9 %
Provision for income taxes 21,090
2.9 % 12,131
1.6 %
Income from continuing operations 37,789
5.2 % 41,427
5.3 %
Loss from discontinued operations (405 ) (0.1 )% —
0.0 %
Net income $ 37,384
5.1 % $ 41,427
5.3 %
Capital Resources

The following table sets forth the ~~Company’s net sales by reportable segment for the nine months ended September 30,~~Company's liquidity position as of (in thousands):


	March 31, 2023		December 31, 2022
Cash and cash equivalents	$	7,497	$	17,608
Availability on revolving credit facility	343,655		304,505
	$	351,152	$	322,113

Change due to
2017 2016
Total
Change
Divestitures Acquisitions Operations
Net sales:
Residential Products $ 361,304
$ 338,069
$ 23,235
$ —
$ 4,089
$ 19,146
Renewable Energy and Conservation 202,690
204,648
(1,958 ) (6,545 ) 15,252
(10,665 )
Industrial and Infrastructure Products 165,806
234,590
(68,784 ) (59,618 ) —
(9,166 )
Less: Intersegment sales (994 ) (1,164 ) 170
—
—
170
Net Industrial and Infrastructure Products 164,812
233,426
(68,614 ) (59,618 ) —
(8,996 )
Consolidated $ 728,806
$ 776,143
$ (47,337 ) $ (66,163 ) $ 19,341
$ (515 )
Sources of Liquidity

~~Consolidated net sales decreased by $47.3~~The Company's sources of liquidity are comprised of cash on hand and available borrowing capacity provided under the Company's Credit Agreement (the "Credit Agreement"), entered into on December 8, 2022. This Credit Agreement replaced and paid off all amounts owed under the Sixth Amended and Restated Credit Agreement dated as of January 24, 2019. The Credit Agreement maintains similar capacity as the prior agreement in which it provides for a revolving credit facility and letters of credit in an aggregate amount equal to $400 million. The Company can request additional financing to increase the revolving credit facility to $700 million or ~~6.1%,~~enter into a term loan of up to ~~$728.8~~$300 million subject to conditions set forth in the Credit Agreement. The Company believes that these sources provide the Company with ample liquidity and capital resources to invest in operational excellence, growth initiatives and the development of the organization.

The Company has been able to weather the economic impacts of the broader market dynamics, including the inflationary cost environment, while continuing to make investments that support the Company's strategy. The Company continues to remain focused on managing its working capital, closely monitoring customer credit and collection activities, and working to extend payment terms with its vendors. The Company believes its liquidity, together with the cash expected to be generated from operations, should be sufficient to fund working capital needs and growth initiatives for the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016. The decrease in sales was primarily the result of divestitures related to the Company’s portfolio management activities during 2016. foreseeable future.

The Company ~~sold its European industrial manufacturing business in April 2016~~uses the Credit Agreement to ~~a third party~~provide liquidity and ~~exited both the Company's small European residential solar racking business and~~capital resources primarily for the Company's U.S. ~~bar grating product line, both~~operations. Generally, the Company's foreign operations have generated cash flow from operations sufficient to invest in working capital and fund their capital improvements. As of ~~these divestitures commenced during~~March 31, 2023 and December 31, 2022, the ~~fourth quarter~~Company's foreign subsidiaries held $7.5 million and $15.2 million of ~~2016. These divestitures resulted in~~cash, respectively.

Outstanding balances on the Company's revolving credit facility under the Company's Credit Agreement accrue interest at a ~~decrease in revenues of $66.2 million from~~rate, at the prior year. Partially offsetting these divestitures were net sales contributions from our recent acquisitions in our Renewable Energy and Conservation and Residential Products Segments, Nexus in October 2016 and Package Concierge in February 2017, respectively. A net decrease in volume of 2.0% in comparable revenue streams nearly offset by a modest 2.0% increase in pricing to customers also contributedCompany's option, equal to the ~~overall decrease in sales year over year.~~

~~Net sales in our Residential Products segment increased 6.9%~~applicable margin plus (a) a base rate, (b) a daily simple secured overnight financing rate ("SOFR"), (c) a term SOFR rate, or ~~$23.2 million~~(d) for certain foreign currencies, a foreign currency rate. See Note 8 to $361.3 million for the nine months ended September 30, 2017 compared to $338.1 million for the nine months ended September 30, 2016. The increase was largely the result of a net increase in volume along with sales generated from the acquisition of Package Concierge and an increase in pricing to customers. The net sales volume increase was due to an increase in demand for our ventilation and roofing products along with increased demand for our multifamily postal and parcel storage products.

Net sales in our Renewable Energy and Conservation segment decreased 1.0%, or $2.0 million to $202.7 million for the nine months ended September 30, 2017 compared to $204.6 million for the nine months ended September 30, 2016. The decrease was the result of the exit of the Company's ~~small European residential solar racking business~~consolidated financial statements in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q for further information on the Company’s Credit Agreement.

Uses of Cash / Cash Requirements

The Company's material short-term cash requirements primarily include accounts payable, certain employee and ~~continued softness in our international markets, partially offset by sales generated from the acquisition~~retiree benefit-related obligations, operating lease obligations, interest payments on outstanding debt, repayments

Table of ~~Nexus~~Contents

of borrowing on its revolving credit facility, capital expenditures, and ~~increased volume in our domestic markets. As expected, total volume declined~~other purchase obligations originating in the ~~first nine months~~normal course of ~~2017 as we entered 2017 with lower levels of backlog,~~

~~which resulted in lower sales in the first half of 2017 compared to the first half of 2016. Backlog has improved for this segment and now exceeds its prior year levels.~~

Net sales in our Industrial and Infrastructure Products segment decreased 29.4%, or $68.6 million to $164.8 million for the nine months ended September 30, 2017 compared to $233.4 million for the nine months ended September 30, 2016. The decrease in net sales was the combined result of the Company's exit from its U.S. bar grating product line and the divestiture of our European industrial manufacturing business, along with a 5.0% decrease in volume as compared to the same period in the prior year. A decrease in demand for our infrastructure products, which include components for bridges and elevated highways, contributed to the decline in volume due to continued delay in infrastructure projects. We expect this decline to be temporary due to federal and state funding availability and as evidenced by an increase in segment backlog during the current year.

Our consolidated gross margin remained relatively unchanged at 24.7% for the nine months ended September 30, 2017 compared to 24.6% for the nine months ended September 30, 2016. The Company benefited from portfolio management actions during 2016 in which less profitable businesses or products lines were sold or exited in order to enable the Company to re-allocate leadership, time, capital and resources to the platforms and businesses with the highest potential revenue and margins. In addition, other portfolio management actions taken resulting from our 80/20 initiatives contributed to maintaining the margin as well. These benefits were largely offset by less favorable alignment of material costs to customer selling prices.

Selling, general, and administrative (SG&A) expenses decreased by $8.5 million, or 7.2%, to $109.5 million for the nine months ended September 30, 2017 from $118.0 million for the nine months ended September 30, 2016. The $8.5 million decrease was primarily due to a $11.5 million decrease in performance-based compensation expenses, along with a $1.5 million decrease in senior leadership transition costs. These decreases were partially offset by $5.9 million of additional expense from the acquisitions of Nexus and Package Concierge, along with a $2.9 million increase in portfolio management charges related to our 80/20 initiatives. SG&A expenses as a percentage of net sales decreased to 15.0% for the nine months ended September 30, 2017 compared to 15.2% for the nine months ended September 30, 2016.

The following table sets forth the Company’s income from operations and income from operations as a percentage of net sales by reportable segment for the nine months ended September 30, (in thousands):

2017 2016 Total
Change
Income (loss) from operations:
Residential Products $ 61,984
17.2 % $ 52,363
15.5 % $ 9,621
Renewable Energy and Conservation 18,381
9.1 % 34,969
17.1 % (16,588 )
Industrial and Infrastructure Products 5,914
3.6 % 11,429
4.9 % (5,515 )
Unallocated Corporate Expenses (15,977 ) (2.2 )% (25,902 ) (3.3 )% 9,925
Consolidated income from operations $ 70,302
9.6 % $ 72,859
9.4 % $ (2,557 )

Our Residential Products segment generated an operating margin of 17.2% during the nine months ended September 30, 2017 compared to 15.5% during the nine months ended September 30, 2016. The increase of $9.6 million of operating profit is primarily due to the benefits of improved operational efficiencies and contributions from the 80/20 initiative.

The Renewable Energy and Conservation segment generated an operating margin of 9.1% in the current year compared to 17.1% in the prior year. The decrease was primarily due to lower volume, an unfavorable alignment of material costs to customer selling prices, along with $2.4 million of reduction of workforce and facility cleanup costs incurred to exit the European solar racking business.

Our Industrial and Infrastructure Products segment generated an operating margin of 3.6% during the nine months ended September 30, 2017 compared to 4.9% during the nine months ended September 30, 2016. The decrease was largely an unfavorable alignment of material costs to customer selling prices, partially offset by a net reduction in costs incurred to exit the Company's U.S. bar grating product line .

Unallocated corporate expenses decreased $9.9 million from $25.9 million during the nine months ended September 30, 2016 to $16.0 million during the nine months ended September 30, 2017. The lower expenses in the current year was primarily due to the decrease in performance-based compensation expenses.

The Company recorded other expense of $0.8 million for the nine months ended September 30, 2017. Other expense of $8.3 million for the nine months ended September 30, 2016 was primarily comprised of the $8.8 million pre-tax loss on the sale of our European industrial manufacturing business, partially offset by net gains on foreign currency transactions.

Interest expense decreased by $0.4 million to $10.6 million for the nine months ended September 30, 2017 compared to $11.0 million for the nine months ended September 30, 2016. During the nine months ended September 30, 2017 and 2016, no amounts were outstanding under our revolving credit facility.

We recognized a provision for income taxes of $21.1 million and $12.1 million, with effective tax rates of 35.8% and 22.7% for the nine months ended September 30, 2017 and 2016, respectively. The effective tax rate for the nine months ended September 30, 2017 exceeded the U.S. federal statutory rate of 35% due to state taxes and $2.2 million of pretax losses generated by the European residential solar racking business for ~~which no tax benefit has been recorded as such benefit is not expected to be realizable, partially offset by net deductible permanent differences~~inventory purchase orders and ~~favorable discrete items.~~contractual service agreements. The effective tax rate for the nine months ended September 30, 2016 was less than the U.S. federal statutory rate of 35% primarily due to a discrete tax benefit of $11.4 million resulting from the sale of our European industrial manufacturing business along with net deductible permanent differences, partially offset by state taxes.

~~Outlook~~

For the remainder of 2017, we continue to expect generally favorable market conditions for each of our segments and increased bidding activity and continued growth of backlogs in both our Infrastructure business and Renewable Energy & Conservation segment. While we see reason for some caution in certain of our end markets, we are optimistic about the final quarter of the year. We are adjusting our full year guidance of revenues in the $960 million to $965 million range. We are narrowing our full-year earnings guidance within our previous guidance range and expect earnings per share ("EPS") to be between $1.40 and $1.47 per diluted share, comparing favorably to $1.05 in 2016.

~~Our priorities for the remainder of 2017 will be to accelerate new product development initiatives, seek value-added acquisitions in attractive end markets, and continue to advance our 80/20 projects.~~

For the fourth quarter of 2017, we expect revenues in the range of $231 million to $236 million, and EPS to be between $0.23 and $0.30 per diluted share, compared to a loss of $0.24 per share in the fourth quarter of 2016.

~~Liquidity and Capital Resources~~

~~General~~

~~Our~~Company's principal capital requirements are to fund ~~our~~its operations' working capital and capital improvements, as well as provide capital for acquisitions and to ~~fund acquisitions. We~~strategically allocate capital through repurchases of Company stock. The Company will continue to invest in growth opportunities as appropriate while focusing on working capital efficiency and profit improvement opportunities to minimize the cash invested to operate ~~our~~its business. ~~We have successfully generated positive~~The Company intends to fund its cash ~~flows from operating activities which have funded our capital~~ requirements ~~and recent acquisitions as noted below in “Cash Flows.”~~

On December 9, 2015, we entered into the Company's Fifth Amended and Restated Credit Agreement (the "Senior Credit Agreement") which includes a 5-year, $300 million revolving credit facility and provides the Company with access to capital and improved financial flexibility. As of September 30, 2017, our liquidity of $496.8 million consisted of $208.0 million ofthrough cash ~~plus $288.8 million of availability under our revolving credit facility. We believe this liquidity, together with the cash expected to be~~ generated from operations ~~should~~and, as necessary, from the availability on its revolving credit facility.

In May 2022, the Company's Board of Directors authorized a share repurchase program of up to $200 million of the Company's issued and outstanding common stock. The program has a duration of three years, ending May 2, 2025. Repurchases may be ~~sufficient~~made, from time to ~~fund working capital needs~~time, in amounts and simplification initiatives that likely will need cash to fund transitions and future growth. We continue to search for strategic acquisitions and larger acquisitions may require additional borrowings and/or the issuance of our common stock.

~~Our Senior Credit Agreement provides~~at prices the Company ~~with liquidity~~deems appropriate, subject to market conditions, applicable legal requirements, debt covenants and capital resources for use by our U.S. operations. Historically, our foreign operations have generated cash flow from operations sufficient to invest in working capital and fund their capital improvements.other considerations. Any such repurchases may be executed using open market purchases, privately negotiated agreements or other transactions. The repurchase program may be suspended or discontinued at any time at the Company's discretion. As of ~~September 30, 2017, our foreign subsidiaries held $25.2~~March 31, 2023, the Company has repurchased 2,150,903 shares for an aggregate price of $93.2 million under this repurchase program, including 153,537 shares repurchased for an aggregate price of ~~cash in U.S. dollars. We believe cash held by our foreign subsidiaries provides our foreign operations with~~$7.4 million during the necessary liquidity to meet future obligations and allows the foreign business units to reinvest in their operations. These cash resources could eventually be used to grow our business internationally. Repatriation of this cash for domestic purposes could result in significant tax consequences.three months ended March 31, 2023.

Over the long-term, ~~we expect~~the Company expects that future ~~obligations,~~investments, including strategic business opportunities such as acquisitions, may be financed through a number of sources, including internally available cash, availability under ~~our revolving credit facility,~~the Credit Agreement, new

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debt financing, the issuance of equity securities, or any combination of the ~~above. Any~~aforementioned. All potential acquisitions are evaluated based on ~~our~~the Company's acquisition strategy, which includes the enhancement of ~~our~~the Company's existing products, operations, and/or capabilities, as well as expanding ~~our~~the Company's access to new products, markets, and customers, with the goal of creating compounding and ~~the improvement of shareholder~~sustainable stockholder value. ~~The recent acquisitions of Nexus Corporation and Package Concierge on October 11, 2016 and February 22, 2017, respectively, were financed through cash on hand.~~

These expectations are forward-looking statements based upon currently available information and may change if conditions in the credit and equity markets deteriorate or other circumstances change. To the extent that operating cash flows are lower than current levels, or sources of financing are not available or not available at acceptable terms, ~~our~~the Company's future liquidity may be adversely affected.

Except as disclosed above, there have been no material changes in the Company's cash requirements since December 31, 2022, the end of fiscal year 2022. See Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Annual Report on Form 10-K for the year ended December 31, 2022.

Cash Flows

The following table sets forth selected cash flow data for the ~~nine~~three months ended ~~September 30,~~March 31, (in thousands):


	2023		2022
Cash provided by (used in):
Operating activities	$	38,045	$	(7,754)
Investing activities	(1,636)		(4,402)
Financing activities	(46,509)		15,039

Effect of foreign exchange rate changes	(11)		(159)
Net (decrease) increase in cash and cash equivalents	$	(10,111)	$	2,724

2017 2016
Cash provided by:
Operating activities of continuing operations $ 48,831
$ 102,186
Investing activities of continuing operations (10,711 ) (297 )
Financing activities of continuing operations (1,733 ) 1,260
Effect of exchange rate changes 1,468
1,055
Net increase in cash and cash equivalents $ 37,855
$ 104,204
Operating Activities

~~During~~Net cash provided by operating activities for the ~~nine~~three months ended ~~September 30, 2017, we generated net cash from operating activities totaling $48.8~~March 31, 2023 of $38.0 million ~~composed~~consisted of net income of ~~$37.8~~$21.1 million, ~~plus $20.5~~non-cash net charges totaling $9.3 million, ~~from~~which include depreciation, amortization, stock-based compensation, exit activity recoveries and other non-cash charges, ~~including~~ and $7.6 million of cash generated from working capital and other net assets. The cash generated from working capital and other net assets was due to an increase in accounts payable as a result of the timing of purchases and vendor payments, offset by an increase in accounts receivable as revenues increased in the latter part of the quarter.

Net cash used in operating activities for the three months ended March 31, 2022 of $7.7 million consisted of income from continuing operations of $15.5 million and non-cash net charges totaling $10.3 million, which include

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depreciation, amortization, stock compensation, exit activity costs and ~~exit activities, partially~~other non-cash charges, offset by ana $33.5 million investment in working capital and other net assets. The investment in working capital and other net assets was due to increases in inventory as a result of ~~$9.5 million. Net cash provided by operating activities~~provisioning for the nine months ended September 30, 2016 totaled $102.2 million, primarily composed of net income from continuing operations of $41.4 million plus non-cash charges including depreciation, amortization, stock compensation, loss on sale of a businesspotential supply chain disruptions and ~~non-cash exit activity~~raw material and freight costs, ~~of $35.7 million~~ along with ~~a decease in working capital of $25.1 million.~~

~~During the nine months ended September 30, 2017, the cash invested in working capital and other net assets of $9.5 million included a $42.3 and $1.8 million~~an increase in accounts receivable as the result of seasonal increases in demand and ~~other current assets and other assets, respectively, partially offset by~~ a ~~$25.1 and $7.5 million increase~~decrease in accounts payable ~~and accrued expenses and other non-current liabilities, respectively,~~ as ~~well as a $2.0 million decrease in inventory. The increase in accounts receivable is a~~the result of ~~continued increase in seasonal manufacturing activity. The increase in total other current assets is primarily due to the~~ timing of ~~prepaid expenses. Accounts payable increased due to the seasonal increase in manufacturing activity as well as the timing of quarter end~~ vendor ~~payments.The~~payments. This was offset by an increase in accrued expenses and other non-current liabilities ~~was largely~~ due to ~~costs related to the timing of customer contracts offset by a decrease~~an increase in ~~liabilities for equity based incentive plans as well as the timing of interest payments . The decrease in inventory is due to the Company's continued 80/20 simplification process efforts.~~unbilled project revenues.

Investing Activities

Net cash used in investing activities for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2023 of ~~$10.7~~$1.6 million was primarily ~~consisted of $18.3 million of net cash paid for the acquisition of Package Concierge,~~due to capital expenditures of ~~$5.1~~$2.2 million, ~~and a payment~~offset by receipt of ~~$0.2~~the $0.6 million ~~related to~~final working capital settlement resulting from the ~~final purchase adjustment for the~~2022 acquisition of ~~Nexus. These payments were partially offset by net proceeds of $12.9 million from the sale of property and equipment.~~ QAP.

Net cash used in investing activities for the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2022 of ~~$0.3~~$4.4 million was ~~the net result of~~primarily due to capital expenditures of $7.6 million and $2.3 million related to the final purchase adjustment for the acquisition of RBI, largely offset by net proceeds of $8.3 million from the sale of our European industrial manufacturing business.$4.4 million.

Financing Activities

Net cash used in financing activities for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2022 of ~~$1.7~~$46.5 million consisted of ~~the purchase~~net long-term debt payments of ~~treasury stock of $2.0~~$39.0 million and ~~payment of long-term debt borrowings of $0.4~~$7.5 million ~~partially offset by the proceeds received from the issuance~~ of common stock repurchases. Net long-term debt payments consisted of ~~$0.7 million.~~ $50.0 million in long-term debt payments, offset by $11.0 million in proceeds from borrowing on the Company's long-term debt credit facility. The Company repurchased 153,537 shares under the Company's authorized share repurchase program which totaled $5.6 million paid during the three months ended March 31, 2023 with the balance repurchased common stock of $1.9 million related to the net settlement of tax obligations for participants in the Company's equity incentive plans.

Net cash provided by financing activities for the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2022 of ~~$1.3~~$15.0 million ~~consisted~~was the result of $47.5 million in proceeds from borrowing on the ~~proceeds received from the issuance~~Company's long-term credit facility, offset by $29.0 million in payments on long-term debt and $3.5 million of common stock repurchases related to the net settlement of ~~$2.9 million offset by the purchase of treasury stock of $1.2 million and payment of long-term debt borrowings of $0.4 million.~~

~~Senior Credit Agreement and Senior Subordinated Notes~~

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Our Senior Credit Agreement is committed through December 9, 2020. 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. The Senior Credit Agreement providestax obligations for a revolving credit facility and letters of credit in an aggregate amount of $300 million. The Company can request additional financing from the banks to increase the revolving credit facility to $500 million or to provide a term loan of up to $200 million subject to conditions set forthparticipants in the ~~Senior Credit Agreement. The Senior Credit Agreement contains three financial covenants. As of September 30, 2017, the Company is in compliance with all three covenants.~~Company's equity incentive plans.

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.

As of September 30, 2017, we had $288.8 million of availability under the Senior Credit Agreement net of outstanding letters of credit of $11.2 million. No amounts were outstanding under our revolving credit facility as of either September 30, 2017 or December 31, 2016.

In addition to our Senior Credit Agreement, the Company issued $210.0 million of 6.25% Notes in January 2013 which are due February 1, 2021. 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.

~~Off Balance Sheet Financing Arrangements~~

We have no off-balance sheet arrangements, other than operating leases, that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material to investors.

~~Contractual Obligations~~

~~Our contractual obligations have not changed materially from the disclosures included in Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.~~

Critical Accounting ~~Policies~~Estimates

~~In the current year, there~~There have been no material changes to ~~our~~the Company's critical accounting ~~policies and~~ estimates during the three months ended March 31, 2023 from those disclosed in the consolidated financial statements and accompanying notes contained in the Company's Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2022.

Recent Accounting Pronouncements

See Note 2 to the Company's consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information on recent accounting pronouncements.

Item 3. ~~Qualitative~~Quantitative and ~~Quantitative~~Qualitative Disclosures About Market Risk

In the ordinary course of business, the Company is exposed to various market risk factors, including changes in general economic conditions, competition, interest rates, foreign exchange rates, and raw materials pricing and availability. In addition, the Company is exposed to other financial market risks, primarily related to its ~~long-term debt and~~ foreign operations. ~~There~~In the current year, there have been no material changes toin the information provided under Item 7A in the Company's ~~exposure to market risk since~~Annual Report on Form 10-K for the year ended December 31, ~~2016.~~

2022.

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Item 4. Controls and Procedures

(a)Evaluation of Disclosure Controls and Procedures


~~(a)~~	~~Evaluation of Disclosure Controls and Procedures~~

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


~~(b)~~	~~Changes in Internal Control over Financial Reporting~~

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(b)Changes in Internal Control over Financial Reporting

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

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

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

There were no material legal proceedings terminated, settled, or otherwise resolved during the three months ended March 31, 2023.

Item 1A. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the risks discussed in “Part I, Item 1A. Risk Factors” in ~~our~~the Company's Annual Report on Form 10-K for the fiscal year ended December 31, ~~2016.~~2022. These risks and uncertainties have the potential to materially affect ~~our~~the Company's business, financial condition, results of operation, cash flows, and future prospects. Additional risks and uncertainties not currently known to usthe Company or that wethe Company currently ~~deem~~deems immaterial may materially adversely impact ~~our~~the Company's business, financial condition, or operating results. During the quarter ended March 31, 2023, there have been no material changes from the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

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

~~Not applicable.~~In May 2022, the Company's Board of Directors authorized a share repurchase program of up to $200 million of the Company's issued and outstanding common stock. The program was publicly announced on May 4, 2022 and has a duration of three years, ending May 2, 2025. Repurchases may be made, from time to time, in amounts and at prices the Company deems appropriate, subject to market conditions, applicable legal requirements, debt covenants and other considerations. Any such repurchases may be executed using open market purchases, privately negotiated agreements or other transactions. The repurchase program may be suspended or discontinued at any time at the Company's discretion.

The following table sets forth purchases made by or on behalf of the Company during the quarter ended March 31, 2023.


	Issuer Purchases of Equity Securities
Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program
January 1 - 31, 2023	76,937	$	47.98	76,937	$	110,432,987
February 1 - 28, 2023	2,200	$	48.56	2,200	$	110,326,147
March 1 - 31, 2023	74,400	$	47.98	74,400	$	106,756,068
Total	153,537	$	47.99	153,537

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

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

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Item 6. Exhibits

~~(a) Exhibits~~



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



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

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SIGNATURES

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

~~GIBRALTAR INDUSTRIES, INC.~~

~~(Registrant)~~



~~/s/ Frank G. Heard~~GIBRALTAR INDUSTRIES, INC.
~~Frank G. Heard~~(Registrant)


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



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

Date: ~~November~~May 3, ~~2017~~2023



	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	—	—		—			37,384		—			—	—			37,384
Foreign currency translation adjustment	—	—		—			—		3,351			—	—			3,351
Adjustment to retirement benefit liability, net of taxes of ($5)	—	—		—			—		(8		)	—	—			(8		)
Adjustment to post employment health care benefit liability, net of taxes of $54	—	—		—			—		88			—	—			88
Stock compensation expense	—	—		5,069			—		—			—	—			5,069
Cumulative effect of accounting change (see Note 2)	—	—		(254		)	254		—			—	—			—
Stock options exercised	40	—		649			—		—			—	—			649
Issuance of restricted stock	2	—		—			—		—			—	—			—
Net settlement of restricted stock units	148	2		(2		)	—		—			58	(1,982		)	(1,982		)
Balance at September 30, 2017	32,275	$	322	$	269,880		$	249,386	$	(4,290	)	588	$	(9,867	)	$	505,431



	September 30, 2017			December 31, 2016
Trade accounts receivable	$	104,031		$	81,193
Contract receivables:
Amounts billed	49,866			41,569
Costs in excess of billings	18,374			6,582
Total contract receivables	68,240			48,151
Total accounts receivable	172,271			129,344
Less allowance for doubtful accounts	(5,553		)	(5,272		)
Accounts receivable	$	166,718		$	124,072



Cash	$	590
Working capital	(2,071		)
Property, plant and equipment	55
Acquired intangible assets	3,600
Other assets	8
Deferred income taxes	(128		)
Goodwill	16,863
Fair value of purchase consideration	$	18,917



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



Cash	$	2,495
Working capital	(1,109		)
Property, plant and equipment	4,702
Acquired intangible assets	6,200
Other assets	23
Goodwill	11,451
Fair value of purchase consideration	$	23,762



	Residential Products		Industrial and Infrastructure Products		Renewable Energy & Conservation			Total
Balance at December 31, 2016	$	181,285	$	53,884	$	68,863		$	304,032
Acquired goodwill	16,863		—		—			16,863
Adjustments to prior year acquisitions	—		—		(832		)	(832		)
Foreign currency translation	—		432		598			1,030
Balance at September 30, 2017	$	198,148	$	54,316	$	68,629		$	321,093



2017	$2,157
2018	$8,288
2019	$7,617
2020	$7,105
2021	$6,503
2022	$6,092



	September 30, 2017			December 31, 2016
Senior Subordinated 6.25% Notes	$	210,000		$	210,000
Other debt	2,400			2,800
Less unamortized debt issuance costs	(2,575		)	(3,163		)
Total debt	209,825			209,637
Less current maturities	400			400
Total long-term debt	$	209,425		$	209,237



	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	—			(13		)	142			129			49			80
Foreign currency translation adjustment	3,351			—			—			3,351			—			3,351
Balance at September 30, 2017	$	(2,497	)	$	184		$	(3,008	)	$	(5,321	)	$	(1,031	)	$	(4,290	)



	Gibraltar Industries, Inc.			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Total
Net sales	$	—		$	264,448	$	15,514		$	(5,388	)	$	274,574
Cost of sales	—			198,103		12,844			(5,108		)	205,839
Gross profit	—			66,345		2,670			(280		)	68,735
Selling, general, and administrative expense	34			31,003		2,005			—			33,042
(Loss) income from operations	(34		)	35,342		665			(280		)	35,693
Interest expense (income)	3,402			105		(21		)	—			3,486
Other expense	—			100		304			—			404
(Loss) income before taxes	(3,436		)	35,137		382			(280		)	31,803
(Benefit of) provision for income taxes	(1,124		)	12,219		89			—			11,184
Equity in earnings from subsidiaries	23,211			293		—			(23,504		)	—
Net income	$	20,899		$	23,211	$	293		$	(23,784	)	$	20,619



										Change due to
	2017			2016			Total Change			Divestitures			Acquisitions		Operations
Net sales:
Residential Products	$	129,501		$	117,957		$	11,544		$	—		$	1,811	$	9,733
Renewable Energy and Conservation	88,135			82,008			6,127			(2,266		)	6,423		1,970
Industrial and Infrastructure Products	57,162			73,193			(16,031		)	(14,799		)	—		(1,232		)
Less: Intersegment sales	(224		)	(424		)	200			—			—		200
Net Industrial and Infrastructure Products	56,938			72,769			(15,831		)	(14,799		)	—		(1,032		)
Consolidated	$	274,574		$	272,734		$	1,840		$	(17,065	)	$	8,234	$	10,671



	2017			2016
Cash provided by:
Operating activities of continuing operations	$	48,831		$	102,186
Investing activities of continuing operations	(10,711		)	(297		)
Financing activities of continuing operations	(1,733		)	1,260
Effect of exchange rate changes	1,468			1,055
Net increase in cash and cash equivalents	$	37,855		$	104,204