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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 https://cdn.kscope.io/b4b7d9254c739c9b76b100dae127d236-rock-20200930_g1.gif
FORM 10-Q
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2020
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission File Number 0-22462
 
GIBRALTAR INDUSTRIES, INC.
(Exact name of Registrant as specified in its charter) 
 
Delaware 16-1445150
(State or incorporation ) (I.R.S. Employer Identification No.)
3556 Lake Shore RoadP.O. Box 2028BuffaloNew York 14219-0228
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (716826-6500
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, $0.01 par value per shareROCKNASDAQ Stock Market
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No   
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No 
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting companyEmerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicated by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No  

As of October 26, 2020, the number of common shares outstanding was: 32,522,138.



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

2


Table of Contents
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
(unaudited)
 
Three Months Ended 
 
September 30,
Nine Months Ended 
 
September 30,
 2020201920202019
Net Sales$329,665 $299,236 $864,918 $789,308 
Cost of sales244,222 222,658 650,830 605,272 
Gross profit85,443 76,578 214,088 184,036 
Selling, general, and administrative expense41,584 45,158 120,448 115,444 
Income from operations43,859 31,420 93,640 68,592 
Interest expense218 17 385 2,297 
Other expense (income)53 84 (1,542)660 
Income before taxes43,588 31,319 94,797 65,635 
Provision for income taxes9,828 6,843 21,686 14,901 
Net income$33,760 $24,476 $73,111 $50,734 
Net earnings per share:
Basic$1.03 $0.75 $2.24 $1.57 
Diluted$1.02 $0.75 $2.22 $1.55 
Weighted average shares outstanding:
Basic32,635 32,470 32,606 32,357 
Diluted32,969 32,770 32,902 32,677 
See accompanying notes to consolidated financial statements.
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GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
(unaudited)
 
Three Months Ended 
 
September 30,
Nine Months Ended 
 
September 30,
 2020201920202019
Net income $33,760 $24,476 $73,111 $50,734 
Other comprehensive income (loss):
Foreign currency translation adjustment2,200 (664)(883)1,176 
Minimum pension and post retirement benefit plan adjustments18 12 54 36 
Other comprehensive income (loss)2,218 (652)(829)1,212 
Total comprehensive income $35,978 $23,824 $72,282 $51,946 
See accompanying notes to consolidated financial statements.
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GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
September 30,
2020
December 31,
2019
(unaudited)
Assets
Current assets:
Cash and cash equivalents$179,816 $191,363 
Accounts receivable, net of allowance of $3,319 and $6,330
203,488 147,515 
Inventories, net77,943 78,476 
Prepaid expenses and other current assets20,306 19,748 
Total current assets481,553 437,102 
Property, plant, and equipment, net94,983 95,409 
Operating lease assets32,359 27,662 
Goodwill382,427 329,705 
Acquired intangibles108,821 92,592 
Other assets1,703 1,980 
$1,101,846 $984,450 
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable$131,746 $83,136 
Accrued expenses106,480 98,463 
Billings in excess of cost31,267 47,598 
Total current liabilities269,493 229,197 
Deferred income taxes40,942 40,334 
Non-current operating lease liabilities23,314 19,669 
Other non-current liabilities22,022 21,286 
Shareholders’ equity:
Preferred stock, $0.01 par value; authorized 10,000 shares; none outstanding
  
Common stock, $0.01 par value; authorized 50,000 shares; 33,519 shares and 33,192 shares issued and outstanding in 2020 and 2019
335 332 
Additional paid-in capital302,107 295,582 
Retained earnings478,488 405,668 
Accumulated other comprehensive loss(6,220)(5,391)
Cost of 1,024 and 906 common shares held in treasury in 2020 and 2019
(28,635)(22,227)
Total shareholders’ equity746,075 673,964 
$1,101,846 $984,450 
See accompanying notes to consolidated financial statements.
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GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited) 
Nine Months Ended 
 
September 30,
 20202019
Cash Flows from Operating Activities
Net income $73,111 $50,734 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization17,325 14,923 
Stock compensation expense6,151 10,087 
Gain on sale of business(1,881) 
Exit activity costs, non-cash505 479 
Provision for (benefit of) deferred income taxes668 (429)
Other, net1,402 3,267 
Changes in operating assets and liabilities, excluding the effects of acquisitions:
Accounts receivable(40,176)(56,645)
Inventories6,102 18,617 
Other current assets and other assets6,095 (6,949)
Accounts payable13,408 22,770 
Accrued expenses and other non-current liabilities(26,516)15,640 
Net cash provided by operating activities56,194 72,494 
Cash Flows from Investing Activities
Acquisitions, net of cash acquired(54,385)(8,665)
Net proceeds from sale of property and equipment568 87 
Purchases of property, plant, and equipment(9,335)(7,703)
Net proceeds from sale of business2,000  
Net cash used in investing activities(61,152)(16,281)
Cash Flows from Financing Activities
Long-term debt payments (212,000)
Payment of debt issuance costs (1,235)
Purchase of treasury stock at market prices(6,408)(3,495)
Net proceeds from issuance of common stock377 400 
Net cash used in financing activities(6,031)(216,330)
Effect of exchange rate changes on cash(558)729 
Net decrease in cash and cash equivalents(11,547)(159,388)
Cash and cash equivalents at beginning of year191,363 297,006 
Cash and cash equivalents at end of period$179,816 $137,618 
See accompanying notes to consolidated financial statements.
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GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY
(in thousands)
(unaudited) 
 Common StockAdditional
Paid-In Capital
Retained EarningsAccumulated
Other
Comprehensive Loss
Treasury StockTotal
Shareholders’ Equity
 SharesAmountSharesAmount
Balance at December 31, 2019
33,192 $332 $295,582 $405,668 $(5,391)906 $(22,227)$673,964 
Net income— — — 12,059 — — — 12,059 
Foreign currency translation adjustment— — — — (5,898)— — (5,898)
Minimum pension and post retirement benefit plan adjustments, net of taxes of $7
— — — — 18 — — 18 
Stock compensation expense— — 1,665 — — — — 1,665 
Cumulative effect of accounting change (See Note 2)
— — — (291)— — — (291)
Stock options exercised3 — 24 — — — — 24 
Net settlement of restricted stock units
193 2 (2)— — 80 (4,184)(4,184)
Balance at March 31, 2020
33,388 $334 $297,269 $417,436 $(11,271)986 $(26,411)$677,357 
Net income— — — 27,292 — — — 27,292 
Foreign currency translation adjustment— — — — 2,815 — — 2,815 
Minimum pension and post retirement benefit plan adjustments, net of taxes of $6
— — — — 18 — — 18 
Stock compensation expense— — 2,506 — — — — 2,506 
Stock options exercised6 — 54 — — — — 54 
Awards of common shares
4 — — — — — — — 
Net settlement of restricted stock units
15   — — 7 (278)(278)
Balance at June 30, 2020
33,413 $334 $299,829 $444,728 $(8,438)993 $(26,689)$709,764 
Net income— — — 33,760 — — — 33,760 
Foreign currency translation adjustment— — — — 2,200 — — 2,200 
Minimum pension and post retirement benefit plan adjustments, net of taxes of $7
— — — — 18 — — 18 
Stock compensation expense— — 1,980 — — — — 1,980 
Stock options exercised31 — 299 — — — — 299 
Net settlement of restricted stock units
75 1 (1)— — 31 (1,946)(1,946)
Balance at September 30, 202033,519 $335 $302,107 $478,488 $(6,220)1,024 $(28,635)$746,075 

See accompanying notes to consolidated financial statements.
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GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY
(in thousands)
(unaudited) 
Common StockAdditional
Paid-In Capital
Retained EarningsAccumulated
Other
Comprehensive Loss
Treasury StockTotal
Shareholders’ Equity
SharesAmountSharesAmount
Balance at December 31, 201832,887 $329 $282,525 $338,995 $(7,234)796 $(17,922)$596,693 
Net income— — — 6,345 — — — 6,345 
Foreign currency translation adjustment— — — — 842 — — 842 
Minimum pension and post retirement benefit plan adjustments, net of taxes of $4
— — — — 12 — — 12 
Stock compensation expense— — 2,371 — — — — 2,371 
Cumulative effect of accounting change
— — — 1,582 — — — 1,582 
Stock options exercised12 — 139 — — — — 139 
Net settlement of restricted stock units
127 1 (1)— — 59 (2,151)(2,151)
Balance at March 31, 201933,026 $330 $285,034 $346,922 $(6,380)855 $(20,073)$605,833 
Net income— — — 19,913 — — — 19,913 
Foreign currency translation adjustment— — — — 998 — — 998 
Minimum pension and post retirement benefit plan adjustments, net of taxes of $5
— — — — 12 — — 12 
Stock compensation expense— — 3,720 — — — — 3,720 
Stock options exercised5 — 69 — — — — 69 
Awards of common shares8 — — — — — — — 
Net settlement of restricted stock units62 1 (1)— — 25 (998)(998)
Balance at June 30, 201933,101 $331 $288,822 $366,835 $(5,370)880 $(21,071)$629,547 
Net income— — — 24,476 — — — 24,476 
Foreign currency translation adjustment— — — — (664)— — (664)
Minimum pension and post retirement benefit plan adjustments, net of taxes of $4
— — — — 12 — — 12 
Stock compensation expense— — 3,996 — — — — 3,996 
Stock options exercised16 — 192 — — — — 192 
Net settlement of restricted stock units28 1 (1)— — 8 (346)(346)
Balance at September 30, 201933,145 $332 $293,009 $391,311 $(6,022)888 $(21,417)$657,213 

See accompanying notes to consolidated financial statements.
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GIBRALTAR INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

(1)    CONSOLIDATED FINANCIAL STATEMENTS

The accompanying unaudited consolidated financial statements of Gibraltar Industries, Inc. (the "Company") have been prepared by management in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, all adjustments consisting of normal recurring adjustments considered necessary for the fair presentation of results for the interim period have been included. The Company's operations are seasonal; for this and other reasons, such as the impact of the COVID-19 pandemic, financial results for any interim period are not necessarily indicative of the results expected for any subsequent interim period or for the full year. The accompanying unaudited consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in our annual Form 10-K for the year ended December 31, 2019.

The balance sheet at December 31, 2019 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.



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(2)    RECENT ACCOUNTING PRONOUNCEMENTS

Recent Accounting Pronouncements Adopted
StandardDescriptionFinancial Statement Effect or Other Significant Matters
ASU No. 2016-13
Financial Instruments - Credit Losses
(Topic 326)

The objective of this standard is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit, including trade receivables, held by an entity at each reporting date. The amendments in this update replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.
The standard is effective for the Company as of January 1, 2020. The Company adopted the amendments in this update using the modified retrospective approach through a cumulative-effect adjustment to retained earnings of $291,000, net of $96,000 of income taxes, on the opening consolidated balance sheet as of January 1, 2020. The Company's financial assets that are in the scope of the standard are contract assets and accounts receivables which are short-term in nature. Additionally, the Company has identified and implemented appropriate changes to the Company's business processes, policies and internal controls to support reporting and disclosures.


Date of adoption: Q1 2020

ASU 2018-15
Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40), Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract

The amendments in this update require an entity to apply the same requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract as the entity would for implementation costs incurred to develop or obtain internal-use software. The accounting for the service element is not affected by the amendments in this update.
The standard is effective for the Company as of January 1, 2020. The Company adopted the amendments in this update using the prospective method of adoption, and the adoption did not have a material impact to the Company's financial statements.


Date of adoption: Q1 2020

Recent Accounting Pronouncements Not Yet Adopted
StandardDescriptionFinancial Statement Effect or Other Significant Matters
ASU No. 2019-12
Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes

The amendments in this update simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and improve consistent application by clarifying and amending existing guidance. The amendments of this standard are effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted, including adoption in any interim period for which financial statements have not been issued, with the amendments to be applied on a respective, modified retrospective or prospective basis, depending on the specific amendment.
The Company is currently evaluating the requirements of this standard. The standard is not expected to have a material impact on the Company's financial statements.










Date of adoption: Q1 2021

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(3)    ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS

Accounts receivable consists of the following (in thousands):
September 30, 2020December 31, 2019
Trade accounts receivable$171,375 $133,238 
Costs in excess of billings35,432 20,607 
Total accounts receivables206,807 153,845 
Less allowance for doubtful accounts and contract assets(3,319)(6,330)
Accounts receivable$203,488 $147,515 

Refer to Note 4 "Revenue" concerning the Company's costs in excess of billings.

The Company is exposed to credit losses through sales of products and services. The Company’s expected loss allowance methodology for accounts receivable and costs in excess of billings (collectively "accounts receivable") is developed using historical collection experience, current and future economic and market conditions, and a review of the current status of customers' accounts receivables. Due to the short-term nature of such accounts receivable, the estimated amount of accounts receivable that may not be collected is based on aging of the accounts receivable balances. Additionally, specific allowance amounts are established to record the appropriate provision for customers that no longer share risk characteristics similar with other accounts receivable. The Company’s monitoring activities include timely account reconciliation, dispute resolution, payment confirmation, consideration of customers' financial condition and macroeconomic conditions. Balances are written off when determined to be uncollectible. The Company considered the current and expected future economic and market conditions surrounding the COVID-19 pandemic and determined that the estimate of credit losses was not significantly impacted as of September 30, 2020.

Estimates are used to determine the allowance. It is based on assessment of anticipated payment and all other historical, current and future information that is reasonably available.

The following table provides a roll-forward of the allowance for credit losses that is deducted from the amortized cost basis of accounts receivable to present the net amount expected to be collected.
Beginning balance as of January 1, 2020$6,330 
Adoption of ASU 2016-13, cumulative-effect adjustment to retained earnings387 
Bad debt expense, net of recoveries780 
Write-off charged against the allowance and other adjustments(4,178)
Ending balance as of September 30, 2020$3,319 


(4)    REVENUE

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

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

As of September 30, 2020, the Company's remaining performance obligations are part of contracts that have an original expected duration of one year or less.

Contract assets consist of costs in excess of billings. Contract liabilities consist of billings in excess of cost and unearned revenue. The following table presents the beginning and ending balances of costs in excess of billings, billings in excess of cost and unearned revenue as of September 30, 2020 and December 31, 2019, respectively,
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and revenue recognized during the nine months ended September 30, 2020 and 2019, respectively, that was in billings in excess of cost and unearned revenue at the beginning of the period (in thousands):
September 30, 2020December 31, 2019
Costs in excess of billings$35,432 $20,607 
Billings in excess of cost(31,267)(47,598)
Unearned revenue(18,951)(17,311)
Nine Months Ended
September 30, 2020
Nine Months Ended
September 30, 2019
Revenue recognized in the period from:
Amounts included in billings in excess of cost
at the beginning of the period
$44,723 $14,137 
Amounts included in unearned revenue
at the beginning of the period
$13,614 $11,052 


(5)    INVENTORIES

Inventories consist of the following (in thousands):
September 30, 2020December 31, 2019
Raw material$47,275 $48,799 
Work-in-process6,195 5,988 
Finished goods29,264 28,021 
Gross inventory$82,734 $82,808 
Less reserves(4,791)(4,332)
Total inventories$77,943 $78,476 

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(6)    ACQUISITIONS

2020 Acquisitions

On February 13, 2020, the Company purchased substantially all of the assets of Delta Separations, LLC, a California limited liability company, and Teaching Tech, LLC, a California limited liability company (collectively, "Delta Separations"). Delta Separations was a privately-held engineering company primarily engaged in the assembly and sale of centrifugal ethanol-based extraction systems. The results of Delta Separations 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 purchase consideration for the acquisition of Delta Separations was $47.1 million, which includes a working capital adjustment and certain other adjustments provided for in the asset purchase agreement.

The purchase price for the acquisition of the assets was allocated to the assets acquired and liabilities assumed based upon their respective fair values. The excess consideration was recorded as goodwill and approximated $32.2 million, all of which is deductible for tax purposes. Goodwill represents future economic benefits arising from other assets acquired that could not be individually identified including workforce additions, growth opportunities, and presence in the extraction processing markets.

The allocation of the purchase consideration to the fair value of the assets acquired and liabilities assumed is as follows as of the date of the acquisition (in thousands):
Working capital$3,918 
Property, plant and equipment219 
Acquired intangible assets13,900 
Other assets951 
Other liabilities(4,027)
Goodwill32,151 
Fair value of purchase consideration$47,112 


The intangible assets acquired in this acquisition consisted of the following (in thousands):
Fair ValueWeighted-Average Amortization Period
Trademarks$6,900 Indefinite
Technology3,200 10 years
Customer relationships3,200 11 years
Non-compete agreements300 5 years
Backlog300 0.25 years
Total$13,900 

On January 15, 2020, the Company purchased substantially all of the assets of Thermo Energy Systems Inc. ("Thermo"), a Canadian-based, privately held provider of commercial greenhouse solutions in North America providing growing infrastructure for the plant based organic food market. The results of Thermo have been included in the Company's consolidated financial results since the date of acquisition within the Company's Renewable Energy and Conservation segment. The preliminary purchase consideration for the acquisition of Thermo was $7.3 million.
The purchase price for the acquisition was preliminarily allocated to the assets acquired and liabilities assumed based upon their respective estimated fair values and the remaining consideration was recorded to goodwill. Goodwill of approximately $19.5 million was recorded, all of which is deductible for tax purposes. Goodwill represents future economic benefits arising from other assets acquired that could not be individually identified including workforce additions, growth opportunities, and increased presence in the commercial greenhouse
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markets. The preliminary allocation of the purchase price is subject to adjustments during the measurement period as third-party valuations are finalized. The final purchase price allocation will be completed no later than the first quarter of 2021.
The preliminary 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$135 
Working capital(23,450)
Property, plant and equipment1,087 
Acquired intangible assets10,102 
Other assets1,363 
Other liabilities(1,363)
Goodwill19,459 
Fair value of purchase consideration$7,333 

The intangible assets acquired in this acquisition consisted of the following (in thousands):
Fair ValueWeighted-Average Amortization Period
Trademarks$1,122 3 years
Technology3,218 10 years
Customer relationships4,939 12 years
Non-compete agreements224 5 years
Backlog599 0.75 years
Total$10,102 

2019 Acquisition
On August 30, 2019, the Company acquired all of the outstanding membership interests of Apeks LLC ("Apeks"), a designer and manufacturer of botanical oil extraction systems and equipment. The results of Apeks have been included in the Company's consolidated financial results since the date of acquisition within the Company's Renewable Energy and Conservation segment. The aggregate purchase consideration for the acquisition of Apeks was $12.6 million, which includes a working capital adjustment and certain other adjustments provided for in the 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. The excess consideration was recorded as goodwill and approximated $6.4 million, all of which is deductible for tax purposes. Goodwill represents future economic benefits arising from other assets acquired that could not be individually identified including workforce additions, growth opportunities, and presence in the extraction processing markets.
The allocation of the purchase consideration to the fair value of the assets acquired and liabilities assumed is as follows as of the date of the acquisition (in thousands):
Cash$4,154 
Working capital (1,515)
Property, plant and equipment1,059 
Acquired intangible assets3,000 
Other assets508 
Other liabilities(1,081)
Goodwill6,436 
Fair value of purchase consideration$12,561 
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The intangible assets acquired in this acquisition consisted of the following (in thousands):
Fair ValueWeighted-Average Amortization Period
Trademarks$1,400 Indefinite
Technology900 7 years
Customer relationships700 6 years
Total$3,000 

In determining the allocation of the purchase price to the assets acquired and the liabilities assumed, the Company uses all available information to make fair value determinations using Level 3 unobservable inputs in which little or no market data exists, and therefore, engages independent valuation specialists to assist in the fair value determination of the acquired long-lived assets.

The acquisitions of Delta Separations, Thermo and Apeks were funded from available cash on hand.

The Company incurred certain acquisition-related costs composed of legal and consulting fees. These costs were recognized as a component of selling, general, and administrative expenses in the consolidated statement of operations. The Company also recognized costs as a component of cost of sales related to the sale of inventory at fair value as a result of allocating the purchase price of recent acquisitions.

The acquisition-related costs consisted of the following for the three and nine months ended September 30 (in thousands):

Three Months Ended September 30,Nine Months Ended September 30,
2020201920202019
Selling, general and administrative costs$16 $470 $1,564 $474 
Cost of sales 134 634 134 
Total acquisition-related costs$16 $604 $2,198 $608 


















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(7)    GOODWILL AND RELATED INTANGIBLE ASSETS

Goodwill
The changes in the carrying amount of goodwill for the nine months ended September 30, 2020 are as follows (in thousands):
Renewable Energy & ConservationResidential ProductsIndustrial and
Infrastructure
Products
Total
Balance at December 31, 2019$77,602 $198,075 $54,028 $329,705 
Acquired goodwill51,629   51,629 
Adjustments to prior year acquisitions579   579 
Foreign currency translation664  (150)514 
Balance at September 30, 2020$130,474 $198,075 $53,878 $382,427 

The Company conducts its annual goodwill impairment test as of October 31 each year. All of the Company’s ten reporting units had fair values exceeding their carrying values as of October 31, 2019. In addition to the annual impairment test, the Company is required to regularly assess whether a triggering event has occurred which would require interim impairment testing. The Company considered the current and future macroeconomic and market conditions, along with its current market capitalization, projected cash flows and internal and external forecasts, and projections relating to the impact of the COVID-19 pandemic on each of its reporting units. The Company determined that a triggering event has not occurred which would require an interim impairment test to be performed.

Acquired Intangible Assets
Acquired intangible assets consist of the following (in thousands):
 September 30, 2020December 31, 2019
 Gross
Carrying
Amount
Accumulated
Amortization
Gross
Carrying
Amount
Accumulated
Amortization
Indefinite-lived intangible assets:
Trademarks$52,170 $ $45,770 $ 
Finite-lived intangible assets:
Trademarks7,235 4,557 6,139 4,105 
Unpatented technology35,962 17,970 29,544