SEC Filing | Gibraltar Industries, Inc.

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rock-20220630

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


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

For the quarterly period ended June 30, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 000-22462

GIBRALTAR INDUSTRIES, INC.

(Exact name of Registrant as specified in its charter)

Delaware

16-1445150

(State of incorporation )

(I.R.S. Employer Identification No.)

3556 Lake Shore Road

P.O. Box 2028

Buffalo

New York

14219-0228

(Address of principal executive offices)

(Zip Code)

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

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

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, $0.01 par value per share

ROCK

NASDAQ Stock Market

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

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

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

As of August 2, 2022, the number of common shares outstanding was: 31,627,767.

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GIBRALTAR INDUSTRIES, INC.

INDEX


		PAGE NUMBER
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Statements of Income for the Three and Six Months Ended June 3 0 , 2022 and 2021 (unaudited)	3
	Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 3 0 , 2022 and 2021 (unaudited)	4
	Consolidated Balance Sheets as of June 3 0 , 2022 (unaudited) and December 31, 2021	5
	Consolidated Statements of Cash Flows for the Six Months Ended June 3 0 , 2022 and 2021 (unaudited)	6
	Consolidated Statement of Stockholders’ Equity for the Six Months Ended June 3 0 , 2022 and 2021 (unaudited)	7
	Notes to Consolidated Financial Statements (unaudited)	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 4.	Controls and Procedures	31
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 3.	Defaults Upon Senior Securities	32
Item 4.	Mine Safety Disclosures	32
Item 5.	Other Information	32
Item 6.	Exhibits	33
	SIGNATURES	34

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

GIBRALTAR INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)

(unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Net sales	$	366,949	$	348,389	$	684,814	$	635,981
Cost of sales	276,678		267,458		529,699		495,032
Gross profit	90,271		80,931		155,115		140,949
Selling, general, and administrative expense	50,132		49,522		93,781		96,725

Income from operations	40,139		31,409		61,334		44,224
Interest expense	656		245		1,141		689
Other expense (income)	281		(4,666)		434		(4,351)
Income before taxes	39,202		35,830		59,759		47,886
Provision for income taxes	9,895		9,457		14,996		11,017
Income from continuing operations	29,307		26,373		44,763		36,869
Discontinued operations:
(Loss) income before taxes	—		(502)		—		2,068
(Benefit from) provision for income taxes	—		(78)		—		226
(Loss) income from discontinued operations	—		(424)		—		1,842
Net income	$	29,307	$	25,949	$	44,763	$	38,711
Net earnings per share – Basic:
Income from continuing operations	$	0.90	$	0.80	$	1.37	$	1.12
(Loss) income from discontinued operations	—		(0.01)		—		0.06
Net income	$	0.90	$	0.79	$	1.37	$	1.18
Weighted average shares outstanding – Basic	32,585		32,790		32,748		32,791
Net earnings per share – Diluted:
Income from continuing operations	$	0.90	$	0.80	$	1.36	$	1.11
(Loss) income from discontinued operations	—		(0.01)		—		0.06
Net income	$	0.90	$	0.79	$	1.36	$	1.17
Weighted average shares outstanding – Diluted	32,660		33,056		32,843		33,071

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 June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Net income	$	29,307	$	25,949	$	44,763	$	38,711
Other comprehensive (loss) income:
Foreign currency translation adjustment	(3,198)		761		(3,425)		3,959

Minimum post retirement benefit plan adjustments, net of tax	1		27		25		54

Other comprehensive (loss) income	(3,197)		788		(3,400)		4,013
Total comprehensive income	$	26,110	$	26,737	$	41,363	$	42,724

See accompanying notes to consolidated financial statements.

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GIBRALTAR INDUSTRIES, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)


	June 30, 2022		December 31, 2021
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	17,149	$	12,849
Accounts receivable, net of allowance of $3,901 and $3,738, respectively	275,596		236,444
Inventories, net	197,499		176,207
Prepaid expenses and other current assets	39,333		21,467

Total current assets	529,577		446,967
Property, plant, and equipment, net	100,998		96,885
Operating lease assets	26,206		18,120
Goodwill	509,357		510,942
Acquired intangibles	128,725		141,504
Other assets	550		483
	$	1,295,413	$	1,214,901
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	160,058	$	172,286
Accrued expenses and other current liabilities	77,606		67,993
Billings in excess of cost	65,864		46,711



Total current liabilities	303,528		286,990
Long-term debt	93,454		23,781
Deferred income taxes	40,150		40,278
Non-current operating lease liabilities	19,252		11,390
Other non-current liabilities	21,751		27,204
Stockholders’ equity:
Preferred stock, $0.01 par value; authorized 10,000 shares; none outstanding	—		—
Common stock, $0.01 par value; authorized 100,000 shares in 2022 and 2021; 33,989 shares and 33,799 shares issued and outstanding in 2022 and 2021	340		338
Additional paid-in capital	318,664		314,541
Retained earnings	590,335		545,572
Accumulated other comprehensive (loss) income	(3,213)		187
Treasury stock, at cost, 2,374 and 1,107 shares in 2022 and 2021	(88,848)		(35,380)
Total stockholders’ equity	817,278		825,258
	$	1,295,413	$	1,214,901

See accompanying notes to consolidated financial statements.

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GIBRALTAR INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)


	Six Months Ended June 30,
	2022		2021
Cash Flows from Operating Activities
Net income	$	44,763	$	38,711
Income from discontinued operations	—		1,842
Income from continuing operations	44,763		36,869
Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization	12,677		16,014
Stock compensation expense	4,125		4,935


Exit activity costs, non-cash	1,198		1,193


Provision for (benefit of) deferred income taxes	29		(36)

Other, net	2,666		349

Changes in operating assets and liabilities, excluding the effects of acquisitions:
Accounts receivable	(40,473)		(29,150)
Inventories	(33,616)		(42,686)
Other current assets and other assets	(1,612)		(611)
Accounts payable	(10,501)		35,174
Accrued expenses and other non-current liabilities	21,288		(9,274)
Net cash provided by operating activities of continuing operations	544		12,777
Net cash used in operating activities of discontinued operations	—		(2,002)
Net cash provided by operating activities	544		10,775
Cash Flows from Investing Activities
Purchases of property, plant, and equipment	(11,287)		(9,474)
Acquisitions, net of cash acquired	—		(2)
Net proceeds from sale of business	—		39,991

Net proceeds from sale of property and equipment	85		—
Net cash (used in) provided by investing activities of continuing operations	(11,202)		30,515
Net cash used in investing activities of discontinued operations	—		(176)
Net cash (used in) provided by investing activities	(11,202)		30,339
Cash Flows from Financing Activities
Proceeds from long-term debt	120,500		31,200
Long-term debt payments	(51,000)		(83,636)


Purchase of common stock at market prices	(53,468)		(4,780)
Net proceeds from issuance of common stock	—		924

Net cash provided by (used in) financing activities	16,032		(56,292)
Effect of exchange rate changes on cash	(1,074)		87
Net increase (decrease) in cash and cash equivalents	4,300		(15,091)
Cash and cash equivalents at beginning of year	12,849		32,054
Cash and cash equivalents at end of period	$	17,149	$	16,963

See accompanying notes to consolidated financial statements.

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GIBRALTAR INDUSTRIES, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

(in thousands)

(unaudited)


	Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock			Total Stockholders’ Equity
	Shares	Amount								Shares	Amount
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
Net income	—	—		—		29,307		—		—	—		29,307
Foreign currency translation adjustment	—	—		—		—		(3,198)		—	—		(3,198)
Minimum post retirement benefit plan adjustments, net of taxes of $0	—	—		—		—		1		—	—		1
Stock compensation expense	—	—		2,773		—		—		—	—		2,773
Awards of common stock	16	—		—		—		—		—	—		—
Net settlement of restricted stock units	1	—		—		—		—		—	(7)		(7)
Common stock repurchased under stock repurchase program	—	—		—		—		—		1,195	(50,000)		(50,000)
Balance at June 30, 2022	33,989	$	340	$	318,664	$	590,335	$	(3,213)	2,374	$	(88,848)	$	817,278

See accompanying notes to consolidated financial statements.

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GIBRALTAR INDUSTRIES, INC.

CONSOLIDATED STATEMENT OF 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, 2020	33,568	$	336	$	304,870	$	469,943	$	(2,461)	1,028	$	(28,883)	$	743,805
Net income	—	—		—		12,762		—		—	—		12,762
Foreign currency translation adjustment	—	—		—		—		3,198		—	—		3,198
Minimum post retirement benefit plan adjustments, net of taxes of $10	—	—		—		—		27		—	—		27

Stock compensation expense	—	—		2,368		—		—		—	—		2,368

Stock options exercised	25	—		910		—		—		—	—		910

Net settlement of restricted stock units	118	1		(1)		—		—		54	(4,662)		(4,662)

Balance at March 31, 2021	33,711	$	337	$	308,147	$	482,705	$	764	1,082	$	(33,545)	$	758,408
Net income	—	—		—		25,949		—		—	—		25,949
Foreign currency translation adjustment	—	—		—		—		761		—	—		761
Minimum post retirement benefit plan adjustments, net of taxes of $10	—	—		—		—		27		—	—		27
Stock compensation expense	—	—		2,567		—		—		—	—		2,567
Stock options exercised	1	—		14		—		—		—	—		14
Awards of common shares	3	—		—		—		—		—	—		—
Net settlement of restricted stock units	3	—		—		—		—		1	(118)		(118)

Balance at June 30, 2021	33,718	$	337	$	310,728	$	508,654	$	1,552	1,083	$	(33,663)	$	787,608

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 report on Form 10-K for the year ended December 31, 2021.

The consolidated balance sheet at December 31, 2021 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements.

(2) RECENT ACCOUNTING PRONOUNCEMENTS

Recent Accounting Pronouncements Not Yet Adopted

Standard

Description

Financial Statement Effect or Other Significant Matters

ASU No. 2020-04
Reference Rate Reform (Topic 848), Facilitation of Effects of Reference Rate Reform on Financial Reporting, and
ASU No. 2021-01 Reference Rate Reform (Topic 848), Scope

The amendments in ASU 2020-04 provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met, and apply only to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued as a result of reference rate reform. The expedients and exceptions provided by the amendments in ASU 2020-04 do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022. The amendments in ASU 2021-01 clarify that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition.

The amendments in these updates are effective as of March 12, 2020 through December 31, 2022, and may be applied retrospectively to contract modifications and hedging relationships from the beginning of an interim period that includes or is subsequent to March 12, 2020, or on a prospective basis to new modifications from any date within an interim period that includes or is subsequent to the date of the issuance of a final update, up to the date the financial statements are available to be issued. The adoption of the amendments in these updates is not expected to have a material impact on the Company's financial statements.

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(3) ACCOUNTS RECEIVABLE, NET

Accounts receivable consists of the following (in thousands):


	June 30, 2022		December 31, 2021
Trade accounts receivable	$	231,076	$	185,745
Costs in excess of billings	48,421		54,437
Total accounts receivables	279,497		240,182
Less allowance for doubtful accounts and contract assets	(3,901)		(3,738)
Accounts receivable, net	$	275,596	$	236,444

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

The following table provides a roll-forward of the allowance for credit losses, for the six month period ended June 30, 2022, that is deducted from the amortized cost basis of accounts receivable to present the net amount expected to be collected.


Beginning balance as of January 1, 2022	$	3,738

Bad debt expense, net of recoveries	772
Accounts written off against allowance and other adjustments	(609)
Ending balance as of June 30, 2022	$	3,901

(4) REVENUE

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

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

As of June 30, 2022, the Company's remaining performance obligations are part of contracts that have an original expected duration of one year or less.

Contract assets consist of costs in excess of billings presented within accounts receivable in the Company's consolidated balance sheets. Contract liabilities consist of billings in excess of cost, classified as current liabilities, and unearned revenue, presented within accrued expenses, in the Company's consolidated balance sheets. Unearned revenue as of June 30, 2022 and December 31, 2021 was $3.4 million and $3.7 million, respectively. Revenue recognized during the six months ended June 30, 2022 and 2021 that was in contract liabilities at the beginning of the respective periods was $38.6 million and $49.2 million, respectively.

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(5) INVENTORIES

Inventories consist of the following (in thousands):


	June 30, 2022		December 31, 2021
Raw material	$	141,877	$	135,558
Work-in-process	9,152		5,858
Finished goods	53,090		39,256
Gross inventory	204,119		180,672
Less reserves	(6,620)		(4,465)
Total inventories, net	$	197,499	$	176,207

(6) GOODWILL AND RELATED INTANGIBLE ASSETS

Goodwill

The changes in the carrying amount of goodwill for the six months ended June 30, 2022 are as follows (in thousands):


	Renewables		Residential		Agtech		Infrastructure		Total
Balance at December 31, 2021	$	188,680	$	205,452	$	85,132	$	31,678	$	510,942

Adjustments to prior year acquisitions	904		—		—		—		904
Foreign currency translation	(1,980)		—		(509)		—		(2,489)
Balance at June 30, 2022	$	187,604	$	205,452	$	84,623	$	31,678	$	509,357

The Company is required to regularly assess whether a triggering event has occurred which would require interim impairment testing. The Company determined that no triggering event had occurred as of June 30, 2022 which would require an interim impairment test to be performed.

Acquired Intangible Assets

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


	June 30, 2022				December 31, 2021
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Indefinite-lived intangible assets:
Trademarks	$	52,700	$	—	$	52,700	$	—
Finite-lived intangible assets:
Trademarks	5,504		4,268		5,521		4,011
Unpatented technology	34,322		20,941		38,474		20,656
Customer relationships	103,160		42,201		108,591		39,832
Non-compete agreements	2,382		1,933		2,686		1,969
Backlog	6,891		6,891		7,200		7,200
	152,259		76,234		162,472		73,668
Total acquired intangible assets	$	204,959	$	76,234	$	215,172	$	73,668

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The following table summarizes the acquired intangible asset amortization expense for the three and six months ended June 30 (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Amortization expense	$	2,819	$	4,736	$	5,917	$	9,479

Amortization expense related to acquired intangible assets for the remainder of fiscal 2022 and the next five years thereafter is estimated as follows (in thousands):


	2022		2023		2024		2025		2026		2027
Amortization expense	$	5,412	$	10,177	$	9,996	$	9,856	$	8,415	$	6,754

(7) LONG-TERM DEBT

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


	June 30, 2022		December 31, 2021
Revolving credit facility	$	94,000	$	24,500

Less unamortized debt issuance costs	(546)		(719)
Total debt	$	93,454	$	23,781

Senior Credit Agreement

On January 24, 2019, the Company entered into a Sixth Amended and Restated Credit Agreement ("Senior Credit Agreement"), which amended and restated the Company’s Fifth Amended and Restated Credit Agreement dated December 9, 2015, and provides for a revolving credit facility and letters of credit in an aggregate amount equal to $400 million. The Company can request additional financing from the lenders to increase the revolving credit facility to $700 million or enter into a term loan of up to $300 million subject to conditions set forth in the Senior Credit Agreement. The Senior Credit Agreement contains three financial covenants. As of June 30, 2022, the Company was in compliance with all three covenants.

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

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

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

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(8) ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following tables summarize the cumulative balance of each component of accumulated other comprehensive income (loss), net of tax, for the three and six months ended June 30, (in thousands):


	Foreign Currency Translation Adjustment		Minimum Post Retirement Benefit Plan Adjustments		Total Pre-Tax Amount		Tax Benefit (Expense)		Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2021	$	1,640	$	(2,247)	$	(607)	$	794	$	187

Minimum post retirement health care plan adjustments	—		34		34		(10)		24
Foreign currency translation adjustment	(227)		—		(227)		—		(227)
Balance at March 31, 2022	1,413		(2,213)		(800)		784		(16)

Minimum post retirement health care plan adjustments	—		1		1		—		1
Foreign currency translation adjustment	(3,198)		—		(3,198)		—		(3,198)
Balance at June 30, 2022	$	(1,785)	$	(2,212)	$	(3,997)	$	784	$	(3,213)


	Foreign Currency Translation Adjustment		Minimum Post Retirement Benefit Plan Adjustments		Total Pre-Tax Amount		Tax Benefit (Expense)		Accumulated Other Comprehensive (Loss) Income
Balance at December 31, 2020	$	(872)	$	(2,426)	$	(3,298)	$	837	$	(2,461)

Minimum post retirement health care plan adjustments	—		37		37		(10)		27
Foreign currency translation adjustment	3,198		—		3,198		—		3,198
Balance at March 31, 2021	2,326		(2,389)		(63)		827		764
Minimum post retirement health care plan adjustments	—		37		37		(10)		27
Foreign currency translation adjustment	761		—		761		—		761
Balance at June 30, 2021	$	3,087	$	(2,352)	$	735	$	817	$	1,552

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

(9) EQUITY-BASED COMPENSATION

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

On May 4, 2018, the stockholders of the Company approved the adoption of the Gibraltar Industries, Inc. 2018 Equity Incentive Plan (the "2018 Plan"). The 2018 Plan provides for the issuance of up to 1,000,000 shares of common stock and supplements the remaining shares available for issuance under the Gibraltar Industries, Inc. 2015 Equity Incentive Plan (the "2015 Plan"). Both the 2018 Plan and the 2015 Plan allow the Company to grant equity-based incentive compensation awards, in the form of non-qualified options, restricted shares, restricted stock units, performance shares, performance stock units, and stock rights to eligible participants.

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Equity Based Awards - Settled in Stock

The following table sets forth the number of equity-based awards granted during the six months ended June 30, which will convert to shares upon vesting, along with the weighted average grant date fair values:


	2022			2021
Awards	Number of Awards	Weighted Average Grant Date Fair Value		Number of Awards (2)	Weighted Average Grant Date Fair Value
Performance stock units (1)	108,464	$	47.00	62,778	$	87.84
Restricted stock units	67,158	$	45.84	33,187	$	87.91
Deferred stock units	2,460	$	42.69	7,536	$	83.58
Common shares	15,652	$	42.49	2,512	$	83.58

(1) The Company’s performance stock units (“PSUs”) represent shares granted for which the final number of shares earned depends on financial performance or market conditions. The number of shares to be issued may vary between 0% and 200% of the number of PSUs granted depending on the relative achievement to targeted thresholds. The Company's PSUs with a financial performance condition are based on the Company’s return on invested capital (“ROIC”) over a one-year performance period.

(2) All PSUs granted in the first quarter of 2021 were forfeited in the first quarter of 2022 as the threshold level of achievement was not met based on the Company's actual ROIC achievement level for the performance period ended December 31, 2021.

Equity Based Awards - Settled in Cash

The Company's equity-based awards that are settled in cash are the awards under the Management Stock Purchase Plan (the “MSPP”) which is authorized under the Company's equity incentive plans. The total of these share-based liabilities recorded on the consolidated balance sheet as of June 30, 2022 was $17.6 million, of which $3.0 million was included in current accrued expenses and $14.6 million was included in non-current liabilities. Total share-based liabilities as of December 31, 2021 were $22.6 million, of which $2.9 million was included in current accrued expenses and $19.7 million was included in non-current liabilities.

The Company's MSPP provides participants the ability to defer a portion of their compensation, convertible to unrestricted investments, restricted stock units, or a combination of both, or defer a portion of their directors’ fees, convertible to restricted stock units. Employees eligible to defer a portion of their compensation also receive a company-matching award in restricted stock units equal to a percentage of their compensation.

The deferrals and related company match are credited to an account that represents a share-based liability. The portion of the account deferred to unrestricted investments is measured at fair market value of the unrestricted investments, and the portion of the account deferred to restricted stock units and company-matching restricted stock units is measured at a 200-day average of the Company’s stock price. The account will be converted to and settled in cash payable to participants upon retirement or a termination of their service to the Company.

The following table provides the number of restricted stock units credited to active participant accounts and the payments made with respect to restricted stock units issued under the MSPP during the six months ended June 30,:


	2022		2021
Restricted stock units credited	6,234		26,240
Share-based liabilities paid (in thousands)	$	2,545	$	3,510

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(10) HELD FOR SALE AND DISCONTINUED OPERATIONS

Held for Sale

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

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

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


(in thousands)	June 30, 2022
Assets held for sale
Accounts receivable, net of allowance	$	561
Inventories, net of reserves	8,563
Other current assets	1,926
Property, plant, and equipment, net	331
Operating lease asset	710
Goodwill (1)	—
Acquired intangibles, net	6,213
Total assets held for sale	$	18,304
Liabilities held for sale
Accounts payable	$	1,731
Accrued expenses	1,127
Non-current operating lease liabilities	299
Total liabilities held for sale	$	3,157

(1) The assignment of goodwill was based on the relative fair value of the disposal group compared to the fair value of the total reporting unit it was included in prior to being reclassified as held for sale.

Net sales and operating loss for held for sale operations for the three and six months ended June 30 are as follows (in thousands):


	Three months ended June 30,				Six months ended June 30,
	2022		2021		2022	2021
Net sales	$	2,748	$	7,264	$