Financial Data and Key Metrics Changes - For the full year 2020, revenue increased by 15%, GAAP EPS rose by 38%, and adjusted EPS increased by 18% [9] - GAAP operating margin improved by 140 basis points, while adjusted operating margin improved by 40 basis points to 11.3% [9] - Return on invested capital improved to 17.6%, up over 180 basis points compared to 2019 [9] Business Line Data and Key Metrics Changes - Revenue for the Residential Products segment increased by 26.7%, driven by strong demand and participation gains [40] - The Renewable Energy & Conservation segment saw an 11.8% revenue increase, but organic revenue decreased by 11% due to project delays [32] - The Infrastructure Products segment experienced a revenue decline of 7.5% due to pandemic impacts on project schedules [42] Market Data and Key Metrics Changes - Overall backlog reached approximately $300 million, up 50% from Q4 2019, indicating strong demand across segments [20] - The solar energy business shipped approximately 1.5 gigawatts of infrastructure over 1,000 projects in 2020, with delays affecting 50-70 megawatt projects [15][16] - The cannabis and hemp markets showed a decrease in demand in Q4 but are expected to recover throughout 2021 [18] Company Strategy and Development Direction - The company aims to increase participation in higher growth, higher-margin markets through acquisitions and operational improvements [11] - Recent acquisitions include TerraSmart and Sunfig, which are expected to enhance the company's position in the solar market [23] - The company is focused on integrating new acquisitions and scaling operations to support increasing demand in the solar and growing markets [55] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in entering 2021 with strong momentum despite short-term market challenges [67] - The company anticipates revenue for 2021 to range between $1.3 billion and $1.35 billion, with GAAP EPS expected between $2.78 and $2.95 [68] - Management noted that supply chain challenges and pandemic-related issues may impact the first half of 2021 but expect clarity to improve as the year progresses [70] Other Important Information - The industrial business was divested, resulting in a non-cash loss of $29.6 million, but the company received net proceeds of approximately $38 million from the sale [31][45] - Free cash flow for 2020 was $76 million, impacted by planned investments in working capital [46] - The company ended 2020 with over $1 billion in revenue and adjusted operating margins of 11.3% [39] Q&A Session Summary Question: Impact of customer supply chain shortages on revenue and margins - Management indicated that the impact was significant, with delays affecting several projects, but exact dollar amounts were not provided [75] Question: Permitting challenges and their potential duration - Management noted that permitting issues are common and not unexpected, with expectations that they will be resolved in due course [78] Question: Long-term outlook for Renewables and margin expectations - Management expects adjusted operating margins to exceed 15% by 2025, driven by volume growth and improved processes [82] Question: Insights on the residential market and potential growth - Management expressed confidence in the strength of the residential market, particularly in repair and remodel segments, with expectations for continued growth [89] Question: Clarification on the industrial business divestiture - Management confirmed that the divested industrial business was profitable, with an adjusted operating profit of approximately $16 million [108]

PART I [Business](index=4&type=section&id=Item%201.%20Business) Gibraltar Industries provides products for renewable energy, residential, and infrastructure markets, expanding through 2020 acquisitions and growing backlog to **$297 million** - The company's strategy is built on three core pillars: Business System (operational efficiency), Portfolio Management (optimizing business mix), and Organization Development (talent and culture)[15](index=15&type=chunk) 2020 Acquisitions | Business Acquired | Date of Acquisition | Preliminary Purchase Price (in millions) | Description | | :--- | :--- | :--- | :--- | | TerraSmart LLC | December 31 | $228.0 | Provider of screw-based, ground-mount solar racking technology | | Sunfig Corporation | December 11 | $4.0 | Provider of software solutions for solar energy investment optimization | | Architectural Mailboxes | October 15 | $27.0 | Provider of decorative residential mailboxes | | Delta Separations | February 13 | $46.0 | Provider of ethanol-based botanical extraction systems | | Thermo Energy Systems | January 15 | $7.0 | Provider of commercial greenhouse solutions | - In Q4 2020, the company classified its Industrial business as held for sale and reported its results as discontinued operations to focus on higher-growth markets[17](index=17&type=chunk)[28](index=28&type=chunk) - The company operates in three reporting segments: Renewable Energy and Conservation, Residential Products, and Infrastructure Products[20](index=20&type=chunk)[21](index=21&type=chunk) - Backlog from continuing operations increased by **50%** year-over-year, from **$198 million** at the end of 2019 to **$297 million** at the end of 2020, primarily related to the Renewable Energy and Conservation and Infrastructure segments[50](index=50&type=chunk) - As of December 31, 2020, the company employed **2,337** people (**939** salaried, **1,398** hourly) and focused on human capital initiatives like health, safety, and diversity, with the Total Recordable Incident Rate (TRIR) improving by **37%** in 2020[58](index=58&type=chunk)[62](index=62&type=chunk) [Risk Factors](index=18&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including customer concentration, cannabis industry uncertainties, market competition, and acquisition integration challenges - A single home improvement retail customer accounted for **14%** of consolidated net sales in 2020, 2019, and 2018, representing a significant customer concentration risk[95](index=95&type=chunk) - A portion of the business depends on the cannabis industry, which faces risks as cannabis remains illegal under U.S. federal law, despite state-level legalization[96](index=96&type=chunk) - The business is dependent on federal, state, and local government incentives for solar power, and the reduction or elimination of these credits could adversely impact demand for related products[103](index=103&type=chunk) - The COVID-19 pandemic poses ongoing risks, including supply chain disruptions, reduced workforce availability, and potential decreases in customer demand, which could materially impact business operations[113](index=113&type=chunk) - The company's acquisition strategy involves risks such as failure to properly integrate new businesses and their IT systems, diversion of management attention, and potential unforeseen liabilities[109](index=109&type=chunk)[111](index=111&type=chunk) - Volatility in the price of principal raw materials, including steel, aluminum, and resins, could significantly impact gross profit and cash flow[120](index=120&type=chunk) [Unresolved Staff Comments](index=26&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments - None[126](index=126&type=chunk) [Properties](index=26&type=section&id=Item%202.%20Properties) As of December 31, 2020, the company operated 38 facilities globally, including 27 manufacturing plants, with 9 owned and 29 leased Properties by Segment and Type (as of Dec 31, 2020) | Segment | Manufacturing Plants | Distribution Centers | Offices | Total Facilities | Owned | Leased | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Renewable Energy & Conservation | 13 | 2 | 5 | 20 | 2 | 18 | | Residential Products | 12 | 0 | 2 | 14 | 5 | 9 | | Infrastructure Products | 2 | 0 | 0 | 2 | 2 | 0 | | Corporate | 0 | 0 | 2 | 2 | 0 | 2 | | **Total** | **27** | **2** | **9** | **38** | **9** | **29** | [Legal Proceedings](index=27&type=section&id=Item%203.%20Legal%20Proceedings) The company is not a party to any material pending legal proceedings, only ordinary, routine litigation incidental to its business - The Company is not a party to any material pending legal proceedings[129](index=129&type=chunk) [Mine Safety Disclosures](index=27&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company - Not applicable[130](index=130&type=chunk) PART II [Market for Common Equity and Related Stockholder Matters](index=28&type=section&id=Item%205.%20Market%20for%20Common%20Equity%20and%20Related%20Stockholder%20Matters) The company's common stock trades on the NASDAQ under the symbol "ROCK", with 39 shareholders of record as of February 24, 2021, and no cash dividends declared in 2020 or 2019 - The Company's common stock is traded on NASDAQ under the symbol "ROCK"[132](index=132&type=chunk) - No cash dividends were declared in 2020 or 2019, as the company plans to use cash for reinvestment and acquisitions[133](index=133&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) The company's 2020 financial performance saw **15.0%** net sales growth to **$1.03 billion**, with improved operating income and liquidity, and strong 2021 revenue projections [Results of Operations](index=30&type=section&id=Results%20of%20Operations) In 2020, consolidated net sales grew **15.0%** to **$1.03 billion** from acquisitions and organic growth, improving gross margin to **24.8%** and operating margin to **10.4%** Consolidated Financial Highlights (2020 vs. 2019) | Metric (in thousands) | 2020 | 2019 | % Change | | :--- | :--- | :--- | :--- | | Net sales | $1,032,578 | $898,233 | 15.0% | | Gross profit | $256,343 | $219,897 | 16.6% | | Income from operations | $107,190 | $80,812 | 32.6% | | Net income | $64,566 | $65,091 | -0.8% | | Gross Margin | 24.8% | 24.5% | +30 bps | | Operating Margin | 10.4% | 9.0% | +140 bps | Net Sales by Segment (2020 vs. 2019, in thousands) | Segment | 2020 | 2019 | Total Change | Change due to Acquisitions | Change due to Operations | | :--- | :--- | :--- | :--- | :--- | :--- | | Renewable Energy & Conservation | $447,567 | $373,023 | $74,544 | $84,598 | $(10,054) | | Residential Products | $522,814 | $461,630 | $61,184 | $5,315 | $55,869 | | Infrastructure Products | $62,197 | $63,580 | $(1,383) | $0 | $(1,383) | | **Consolidated** | **$1,032,578** | **$898,233** | **$134,345** | **$89,913** | **$44,432** | - Operating margin in the Residential Products segment increased significantly to **18.1%** in 2020 from **13.7%** in 2019, driven by volume leverage, cost management, and simplification initiatives[147](index=147&type=chunk)[148](index=148&type=chunk) [Outlook](index=32&type=section&id=Outlook) The company projects full-year 2021 consolidated revenues between **$1.30 billion** and **$1.35 billion**, with GAAP EPS expected to range from **$2.78** to **$2.95** Full Year 2021 Guidance | Metric | 2021 Guidance | 2020 Actual | | :--- | :--- | :--- | | Consolidated Revenues | $1.30B - $1.35B | $1.03B | | GAAP EPS | $2.78 - $2.95 | $2.53 | [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) Total liquidity decreased to **$341.2 million** in 2020 due to acquisitions, with operating cash flow at **$73.0 million** and **$324.7 million** used in investing activities Liquidity Position (in thousands) | | Dec 31, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | | Cash and cash equivalents | $32,054 | $191,363 | | Availability on revolving credit facility | $309,175 | $393,991 | | **Total Liquidity** | **$341,229** | **$585,354** | Cash Flow Summary (in thousands) | Cash Flow Activity | 2020 | 2019 | | :--- | :--- | :--- | | Operating activities of continuing operations | $73,016 | $112,536 | | Investing activities of continuing operations | $(324,677) | $(17,279) | | Financing activities of continuing operations | $79,463 | $(217,050) | - Net cash used in investing activities of **$324.7 million** was primarily for the acquisition of five businesses (**$313.7 million**)[164](index=164&type=chunk) - Net cash from financing activities of **$79.5 million** was driven by an **$85 million** draw on the revolving credit facility to help finance the TerraSmart acquisition[151](index=151&type=chunk)[166](index=166&type=chunk) [Critical Accounting Estimates](index=34&type=section&id=Critical%20Accounting%20Estimates) Critical accounting estimates include revenue recognition for long-term contracts (**40%** of 2020 sales), annual impairment testing of goodwill and intangibles (**47%** of total assets), and fair value determination in acquisitions - Revenue recognized over time using the cost-to-cost method represented **40%** of 2020 consolidated net sales, requiring significant estimation of total contract costs[175](index=175&type=chunk) - Goodwill and indefinite-lived intangible assets totaled **$514.3 million** and **$56.6 million**, respectively, representing **47%** of total assets as of December 31, 2020, and are tested annually for impairment[178](index=178&type=chunk) - No impairment charges against goodwill were recorded in 2020, 2019, or 2018[183](index=183&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks from volatile raw material prices, interest rate fluctuations on **$85.0 million** variable-rate debt, and foreign exchange exposure from international operations - The company is subject to market risk from volatile prices of its principal raw materials: steel, aluminum, and resins[193](index=193&type=chunk) - As of December 31, 2020, the company had **$85.0 million** in variable-rate debt, and a hypothetical **1%** increase in interest rates would change 2020 interest expense by **$0.2 million**[197](index=197&type=chunk)[198](index=198&type=chunk) - The company has foreign exchange risk from international operations, with sales originating outside the U.S. representing approximately **7%** of consolidated net sales in 2020[122](index=122&type=chunk)[199](index=199&type=chunk) [Financial Statements and Supplementary Data](index=39&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the audited consolidated financial statements for 2020, including statements of operations, balance sheets, and cash flows, detailing **$1.03 billion** net sales, **$64.6 million** net income, and the impact of acquisitions and discontinued operations Consolidated Statements of Operations (in thousands) | | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | Net sales | $1,032,578 | $898,233 | $837,097 | | Gross profit | $256,343 | $219,897 | $210,926 | | Income from operations | $107,190 | $80,812 | $81,141 | | Income from continuing operations | $83,291 | $59,928 | $54,112 | | (Loss) income from discontinued operations | $(18,725) | $5,163 | $9,697 | | **Net income** | **$64,566** | **$65,091** | **$63,809** | | **Diluted EPS** | **$1.96** | **$1.99** | **$1.96** | Consolidated Balance Sheets (in thousands) | | Dec 31, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | | Total current assets | $425,460 | $437,102 | | Total assets | $1,212,494 | $984,450 | | Total current liabilities | $302,240 | $229,197 | | Long-term debt | $85,636 | $0 | | Total liabilities | $468,689 | $300,486 | | Total shareholders' equity | $743,805 | $673,964 | - The Industrial business was classified as held for sale, resulting in a pre-tax loss from discontinued operations of **$16.6 million** in 2020, which includes a **$29.6 million** loss recognized on the classification[351](index=351&type=chunk)[355](index=355&type=chunk) - During 2020, the company acquired five businesses for a total preliminary purchase consideration of **$313.3 million**, significantly increasing goodwill and intangible assets[286](index=286&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=81&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) This section is not applicable to the company - Not applicable[383](index=383&type=chunk) [Controls and Procedures](index=81&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2020, excluding five 2020 acquisitions from the assessment scope - The CEO and CFO concluded that the Company's disclosure controls and procedures were effective as of the end of the reporting period[384](index=384&type=chunk) - Management concluded that the Company's internal control over financial reporting was effective as of December 31, 2020[385](index=385&type=chunk) - The five acquisitions completed in 2020 (Thermo, Delta Separations, Architectural Mailboxes, Sunfig, and TerraSmart) were excluded from management's annual report on internal control over financial reporting[386](index=386&type=chunk) PART III [Directors, Executive Officers, and Corporate Governance](index=84&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%2C%20and%20Corporate%20Governance) Information regarding directors, executive officers, and corporate governance matters is incorporated by reference from the company's 2021 Proxy Statement - Required information is incorporated by reference to the Company's 2021 Proxy Statement[401](index=401&type=chunk) [Executive Compensation](index=84&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the company's 2021 Proxy Statement - Required information is incorporated by reference to the Company's 2021 Proxy Statement[403](index=403&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=84&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership and equity compensation plans is incorporated by reference from the company's 2021 Proxy Statement - Required information is incorporated by reference to the Company's 2021 Proxy Statement[404](index=404&type=chunk) [Certain Relationships and Related Transactions and Director Independence](index=84&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%20and%20Director%20Independence) Information regarding related party transactions and director independence is incorporated by reference from the company's 2021 Proxy Statement - Required information is incorporated by reference to the Company's 2021 Proxy Statement[405](index=405&type=chunk) [Principal Accounting Fees and Services](index=84&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information regarding principal accounting fees and services is incorporated by reference from the company's 2021 Proxy Statement - Required information is incorporated by reference to the Company's 2021 Proxy Statement[406](index=406&type=chunk) PART IV [Exhibits and Financial Statement Schedules](index=85&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the financial statements, schedules, and exhibits filed as part of the Annual Report on Form 10-K, including consolidated financial statements and various corporate documents - This section lists all documents filed as part of the Form 10-K, including financial statements, schedules, and exhibits required by Item 601 of Regulation S-K[408](index=408&type=chunk)[411](index=411&type=chunk)

Financial Performance & Strategic Overview - Gibraltar Industries' revenue through Q3 2020 reached $865 million, a 9.6% increase compared to $789 million in 2019 [6] - Adjusted Earnings Per Share (EPS) for 2020 was $2.37, a 20.9% increase from $1.96 in 2019 [6] - The company is focused on accelerating transformation to drive growth and returns, leveraging core competencies in growing markets [55] - Over 45% of the company's revenue base is now generated from businesses that address global challenges [17, 55] Renewable Energy & Conservation Segment - The Renewable Energy & Conservation segment is projected to have approximately $400 million in pro forma revenue for 2020, with TerraSmart contributing ~$155 million and Gibraltar ~$245 million [28] - The company estimates a $4.7 billion addressable market in key segments of Renewable Energy & Conservation in 2020, expected to grow at a CAGR of 10%-15% through 2025 [34] - The acquisition of TerraSmart was valued at 7.9x - 8.5x projected 2020 adjusted EBITDA, with TerraSmart expected to generate $150 million - $155 million in revenue and $26 million - $28 million in adjusted EBITDA in 2020 [36] - The company projects revenue in the Renewable Energy & Conservation segment to reach $700+ million by 2025, with an adjusted operating margin of 15%+ [52] COVID-19 Response & Community Support - The company provided 160 hours of COVID-19 pay for hourly employees and implemented mandatory PPE measures [12] - The company donated 3.3 million meals to food banks, distributing them across its operations [16]

Financial Data and Key Metrics Changes - Revenue increased by 10.2%, driven by solid organic growth in renewable energy and residential products, as well as growth from acquisitions in the growing and processing business [7][17] - GAAP EPS improved by 36% to $1.02, while adjusted EPS improved by 11.6% to $1.06 [8][20] - Operating margin improved, with GAAP margin up 280 basis points and adjusted operating margin up 40 basis points [8][20] - Backlog increased to $304 million, up 26% year-over-year [10][19] Business Line Data and Key Metrics Changes - Renewable energy and conservation segment revenue increased by 9.8%, with organic growth offset by a decline in the core conservation business due to weakness in cannabis and hemp markets [22] - Residential products segment revenues increased by 20.1%, driven by strength in repair and remodel markets [27] - Industrial and infrastructure products segment revenues decreased by 11.6%, primarily due to lower demand for core industrial products [30] Market Data and Key Metrics Changes - Strong demand in the renewable energy market, particularly for fixed tilt and canopy solutions, with year-to-date growth greater than 25% [10][22] - The cannabis market saw project bid and award activity increase in Q3, with expectations for continued growth into Q4 and 2021 [42][96] Company Strategy and Development Direction - The company is focused on three strategic pillars: optimizing the operating playbook, portfolio management, and organizational development [34][35] - Recent acquisition of Architectural Mailboxes for $27 million is expected to enhance the mail and package solutions business and create synergies [14][28] - Continued investment in systems, technology, and safety measures for employees [15][34] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery in the processing equipment market and expects better performance in 2021 [9][42] - The company anticipates continued strength in the renewable energy business and a steady demand in residential building products [43][44] - There is uncertainty due to the ongoing pandemic and upcoming elections, but management remains confident in delivering solid performance in Q4 [38][45] Other Important Information - The company generated $63 million in cash from operations during Q3, with a strong cash position of $180 million at quarter-end [31][32] - The company remains active in M&A discussions and is focused on managing working capital [32] Q&A Session Summary Question: How would you characterize activity in the processing side compared to pre-COVID levels? - Management believes the market has a long runway for growth and expects to see high single-digit growth rates returning next year [49][50] Question: What was the revenue contribution from recent acquisitions? - The acquisitions contributed 20% growth, while the core conservation business saw a decline of approximately 10% [54][58] Question: What is the margin profile of the Architectural Mailbox acquisition? - The margin profile is expected to be similar to the existing business, with opportunities for growth in residential parcel boxes due to e-commerce [59][60] Question: What is the expected recovery timeline for processing margins? - Management expects to reach mid-teens margins by the second half of 2021 as the market stabilizes [137][138]

Third Quarter 2020 Earnings Call October 29, 2020 GIBRALTAR | --- | |----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- ...

Gibraltar Industries, Inc. (NASDAQ:ROCK) Q2 2020 Earnings Conference Call August 5, 2020 9:00 AM ET Company Participants Carolyn Capaccio - IR Bill Bosway - President and CEO Tim Murphy - CFO Conference Call Participants Ken Zener - KeyBanc Capital Markets Daniel Moore - CJS Securities Walter Liptak - Seaport Global Julio Romero - Sidoti & Company Operator Greetings, and welcome to the Quarter Two 2020 Gibraltar Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-a ...

Second Quarter 2020 Earnings Call August 5, 2020 GIBRALTAR | --- | |------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ ...

Gibraltar Industries, Inc. (NASDAQ:ROCK) Q1 2020 Earnings Conference Call May 6, 2020 9:00 AM ET Company Participants Carolyn Capaccio - Senior Vice President, LHA, Investor Relations Bill Bosway - President & Chief Executive Officer Tim Murphy - Chief Financial Officer Conference Call Participants Ken Zener - KeyBanc Capital Markets Daniel Moore - CJS Securities Julio Romero - Sidoti Walter Liptak - Seaport Global Ken Zener - KeyBanc Capital Markets Operator Greetings, and welcome to Gibraltar Industries Q ...

First Quarter 2020 Earnings Call May 6, 2020 GIBRALTAR | --- | --- | |---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- ...