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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2023
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission File Number: 000-22462
https://cdn.kscope.io/55ccb3f92de257403bf84402572daaea-Gibraltar_Wordmark_Blue_RGB.jpg 
GIBRALTAR INDUSTRIES, INC.
(Exact name of registrant as specified in its charter) 
Delaware 16-1445150
(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification No.)
3556 Lake Shore RoadP.O. Box 2028BuffaloNew York 14219-0228
(Address of principal executive offices) (Zip Code)
(716826-6500
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, $0.01 par value per shareROCKNASDAQ Stock Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No   
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller 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 July 31, 2023, the number of common shares outstanding was: 30,423,657.


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
June 30,
Six Months Ended
June 30,
 2023202220232022
Net sales$364,914 $366,949 $658,181 $684,814 
Cost of sales268,175 276,678 484,513 529,699 
Gross profit96,739 90,271 173,668 155,115 
Selling, general, and administrative expense53,662 50,132 101,221 93,781 
Income from operations43,077 40,139 72,447 61,334 
Interest expense1,308 656 2,799 1,141 
Other (income) expense (509)281 (906)434 
Income before taxes42,278 39,202 70,554 59,759 
Provision for income taxes11,555 9,895 18,732 14,996 
Net income$30,723 $29,307 $51,822 $44,763 
Net earnings per share:
Basic$1.01 $0.90 $1.69 $1.37 
Diluted$1.00 $0.90 $1.68 $1.36 
Weighted average shares outstanding:
Basic30,554 32,585 30,725 32,748 
Diluted30,684 32,660 30,846 32,843 
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,
 2023202220232022
Net income $30,723 $29,307 $51,822 $44,763 
Other comprehensive (loss) income:
Foreign currency translation adjustment(584)(3,198)(699)(3,425)
Postretirement benefit plan adjustments, net of tax8 1 16 25 
Other comprehensive loss(576)(3,197)(683)(3,400)
Total comprehensive income $30,147 $26,110 $51,139 $41,363 
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,
2023
December 31,
2022
(unaudited)
Assets
Current assets:
Cash and cash equivalents$18,621 $17,608 
Accounts receivable, net of allowance of $4,849 and $3,746, respectively
266,487 217,156 
Inventories, net159,542 170,360 
Prepaid expenses and other current assets18,320 18,813 
Total current assets462,970 423,937 
Property, plant, and equipment, net106,130 109,584 
Operating lease assets25,041 26,502 
Goodwill511,961 512,363 
Acquired intangibles131,925 137,526 
Other assets550 701 
$1,238,577 $1,210,613 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$155,464 $106,582 
Accrued expenses82,746 73,721 
Billings in excess of cost54,838 35,017 
Total current liabilities293,048 215,320 
Long-term debt9,790 88,762 
Deferred income taxes47,024 47,088 
Non-current operating lease liabilities18,502 19,041 
Other non-current liabilities19,903 18,303 
Stockholders’ equity:
Preferred stock, $0.01 par value; authorized 10,000 shares; none outstanding
  
Common stock, $0.01 par value; authorized 100,000 shares; 34,194 and 34,060 shares issued and outstanding in 2023 and 2022
342 340 
Additional paid-in capital327,927 322,873 
Retained earnings679,800 627,978 
Accumulated other comprehensive loss(4,115)(3,432)
Cost of 3,770 and 3,199 common shares held in treasury in 2023 and 2022
(153,644)(125,660)
Total stockholders’ equity850,310 822,099 
$1,238,577 $1,210,613 
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,
 20232022
Cash Flows from Operating Activities
Net income$51,822 $44,763 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization13,665 12,677 
Stock compensation expense5,056 4,125 
Exit activity (recoveries) costs, non-cash(23)1,198 
Provision for deferred income taxes179 29 
Other, net2,680 2,666 
Changes in operating assets and liabilities, excluding the effects of acquisitions:
Accounts receivable(54,979)(40,473)
Inventories12,130 (33,616)
Other current assets and other assets4,069 (1,612)
Accounts payable48,327 (10,501)
Accrued expenses and other non-current liabilities31,168 21,288 
Net cash provided by operating activities 114,094 544 
Cash Flows from Investing Activities
Acquisitions, net of cash acquired554  
Purchases of property, plant, and equipment, net(5,284)(11,202)
Net cash used in investing activities(4,730)(11,202)
Cash Flows from Financing Activities
Long-term debt payments(120,000)(51,000)
Proceeds from long-term debt40,800 120,500 
Purchase of common stock at market prices(28,770)(53,468)
Net cash (used in) provided by financing activities(107,970)16,032 
Effect of exchange rate changes on cash(381)(1,074)
Net increase in cash and cash equivalents1,013 4,300 
Cash and cash equivalents at beginning of year17,608 12,849 
Cash and cash equivalents at end of period$18,621 $17,149 
See accompanying notes to consolidated financial statements.
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GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands)
(unaudited) 
 Common StockAdditional
Paid-In
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
(Loss) Income
Treasury StockTotal
Stockholders’
Equity
 SharesAmountSharesAmount
Balance at March 31, 202334,148 $341 $324,466 $649,077 $(3,539)3,389 $(134,958)$835,387 
Net income— — — 30,723 — — — 30,723 
Foreign currency translation adjustment— — — — (584)— — (584)
Postretirement benefit plan adjustments, net of taxes of $3
— — — — 8 — — 8 
Stock compensation expense— — 3,462 — — — — 3,462 
Net settlement of restricted stock units38 1 (1)— — 14 (874)(874)
Awards of common stock8 — — — — — — — 
Common stock repurchased under stock repurchase program— — — — — 367 (17,812)(17,812)
Balance at June 30, 202334,194 $342 $327,927 $679,800 $(4,115)3,770 $(153,644)$850,310 

Balance at March 31, 202233,972 $340 $315,891 $561,028 $(16)1,179 $(38,841)$838,402 
Net income— — — 29,307 — — — 29,307 
Foreign currency translation adjustment— — — — (3,198)— — (3,198)
Postretirement benefit plan adjustments, net of taxes of $0
— — — — 1 — — 1 
Stock compensation expense— — 2,773 — — — — 2,773 
Net settlement of restricted stock units1 — — — — — (7)(7)
Awards of common stock16 — — — — — — — 
Common stock repurchased under stock repurchase program— — — — — 1,195 (50,000)(50,000)
Balance at June 30, 202233,989 $340 $318,664 $590,335 $(3,213)2,374 $(88,848)$817,278 

See accompanying notes to consolidated financial statements.
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GIBRALTAR INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands)
(unaudited) 
Common StockAdditional
Paid-In Capital
Retained EarningsAccumulated
Other
Comprehensive (Loss) Income
Treasury StockTotal
Stockholders’ Equity
SharesAmountSharesAmount
Balance at December 31, 202234,060 $340 $322,873 $627,978 $(3,432)3,199 $(125,660)$822,099 
Net income— — — 51,822 — — — 51,822 
Foreign currency translation adjustment— — — — (699)— — (699)
Postretirement benefit plan adjustments, net of taxes of $6
— — — — 16 — — 16 
Stock compensation expense— — 5,056 — — — — 5,056 
Net settlement of restricted stock units126 2 (2)— — 50 (2,803)(2,803)
Awards of common stock8 — — — — — — — 
Common stock repurchased under stock repurchase program— — — — — 521 (25,181)(25,181)
Balance at June 30, 202334,194 $342 $327,927 $679,800 $(4,115)3,770 $(153,644)$850,310 

Balance at December 31, 202133,799 $338 $314,541 $545,572 $187 1,107 $(35,380)$825,258 
Net income— — — 44,763 — — — 44,763 
Foreign currency translation adjustment— — — — (3,425)— — (3,425)
Postretirement benefit plan adjustments, net of taxes of $10
— — — — 25 — — 25 
Stock compensation expense— — 4,125 — — — — 4,125 
Net settlement of restricted stock units174 2 (2)— — 72 (3,468)(3,468)
Awards of common stock16 — — — — — — — 
Common stock repurchased under stock repurchase program— — — — — 1,195 (50,000)(50,000)
Balance at June 30, 202233,989 $340 $318,664 $590,335 $(3,213)2,374 $(88,848)$817,278 

See accompanying notes to consolidated financial statements.
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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 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 the Company's annual report on Form 10-K for the year ended December 31, 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.
(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.
(3)    ACCOUNTS RECEIVABLE, NET
Accounts receivable consisted of the following (in thousands):
June 30, 2023December 31, 2022
Trade accounts receivable$232,177 $179,170 
Costs in excess of billings39,159 41,732 
Total accounts receivable271,336 220,902 
Less allowance for doubtful accounts and contract assets(4,849)(3,746)
Accounts receivable, net$266,487 $217,156 
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, 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 recoveries1,328 
Accounts written off against allowance and other adjustments(225)
Ending balance as of June 30, 2023$4,849 
(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 by timing of transfer of control by reportable segment.
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As of June 30, 2023, 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, 2023 and December 31, 2022 was $6.5 million and $4.6 million, respectively. Revenue recognized during the six months ended June 30, 2023 and 2022 that was in contract liabilities at the beginning of the respective periods was $33.7 million and $38.6 million, respectively.
(5)    INVENTORIES
Inventories consisted of the following (in thousands):
June 30, 2023December 31, 2022
Raw material$105,401 $111,187 
Work-in-process13,658 17,944 
Finished goods46,336 47,523 
Gross inventory165,395 176,654 
Less reserves(5,853)(6,294)
Total inventories, net$159,542 $170,360 
(6)    ACQUISITION
On August 22, 2022, the Company purchased all the issued and outstanding membership interests of Quality Aluminum Products ("QAP"), a manufacturer of aluminum and steel products including soffit, fascia, trim coil, rain carrying products and aluminum siding. The results of QAP have been included in the Company's consolidated financial results since the date of acquisition within the Company's Residential segment. The purchase consideration for the acquisition of QAP was $52.1 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 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 $4.0 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 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 capital23,372 
Property, plant and equipment8,486 
Acquired intangible assets14,700 
Other assets1,813 
Other liabilities(1,295)
Goodwill3,991 
Fair value of purchase consideration$52,085 
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The intangible assets acquired in this acquisition consisted of the following (in thousands):
Fair ValueWeighted-Average Amortization Period
Trademarks$2,800 Indefinite
Customer relationships11,900 12 years
Total$14,700 
In determining the allocation of the purchase price to the assets acquired and 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 acquisition of QAP was financed primarily through borrowings under the Company's revolving credit facility.
The Company recognized costs related to recent acquisitions comprised of legal and consulting fees within selling, general, and administrative ("SG&A") expense. While no SG&A expenses were incurred during the three months ended June 30, 2023 and 2022, the Company recognized expenses of $21 thousand and $7 thousand for the six months ended June 30, 2023 and 2022, respectively.
(7)    GOODWILL AND RELATED INTANGIBLE ASSETS
Goodwill
The changes in the carrying amount of goodwill for the six months ended June 30, 2023 are as follows (in thousands):
RenewablesResidentialAgtechInfrastructureTotal
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(990) 201  (789)
Balance at June 30, 2023$187,040 $209,443 $83,800 $31,678 $511,961 
Goodwill is recognized net of accumulated impairment losses of $133.2 million as of June 30, 2023 and December 31, 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 June 30, 2023 which would require an interim impairment test to be performed.
Acquired Intangible Assets
Acquired intangible assets consisted of the following (in thousands):
 June 30, 2023December 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:
Trademarks5,472 4,572 5,448 4,481 
Unpatented technology34,232 23,205 34,163 22,037 
Customer relationships114,507 50,303 115,125 46,557 
Non-compete agreements2,374 2,080 2,371 2,006 
156,585 80,160 157,107 75,081 
Total acquired intangible assets$212,085 $80,160 $212,607 $75,081 
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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,
2023202220232022
Amortization expense$2,760 $2,819 $5,526 $5,917 
Amortization expense related to acquired intangible assets for the remainder of fiscal 2023 and the next five years thereafter is estimated as follows (in thousands):
202320242025202620272028
Amortization expense$5,526 $10,872 $10,735 $9,335 $7,702 $6,834 
(8)    LONG-TERM DEBT
Long-term debt consisted of the following (in thousands):
June 30, 2023December 31, 2022
Revolving credit facility$11,800 $91,000 
Less unamortized debt issuance costs(2,010)(2,238)
Total debt$9,790 $88,762 
Revolving Credit Facility
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. 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 June 30, 2023, the Company was in compliance with all financial covenants. The Credit Agreement terminates on December 8, 2027.
Borrowings under the 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 was 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 general intangibles of the Company’s significant domestic subsidiaries. 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 and six months ended June 30, 2022, interest rates on the revolving credit facility under the Sixth Amended and Restated Credit Agreement were based on LIBOR plus an additional margin that ranged from 1.125% to 2.00%. In addition, the revolving credit facility under the Sixth Amended and Restated Credit Agreement was subject to an undrawn commitment fee ranging between 0.15% and 0.25% based on the Total Leverage Ratio and the daily average undrawn balance.
Standby letters of credit of $4.3 million have been issued under the Credit Agreement to third parties on behalf of the Company as of June 30, 2023. These letters of credit reduce the amount otherwise available under the revolving credit facility. The Company had $383.9 million and $304.5 million of availability under the revolving credit facility as of June 30, 2023 and December 31, 2022, respectively.
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(9)    ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
The following tables summarize the cumulative balance of each component of accumulated other comprehensive (loss) income, net of tax, for the three months ended June 30, (in thousands):
Foreign Currency Translation AdjustmentPostretirement Benefit Plan
Adjustments
Total Pre-Tax AmountTax Benefit (Expense)Accumulated  Other
Comprehensive
(Loss) Income
Balance at March 31, 2023$(3,497)$(384)$(3,881)$(342)$(3,539)
Postretirement health care plan adjustments— 11 11 3 8 
Foreign currency translation adjustment(584)— (584) (584)
Balance at June 30, 2023$(4,081)$(373)$(4,454)$(339)$(4,115)
Balance at March 31, 2022$1,413 $(2,213)$(800)$784 $(16)
Postretirement health care plan adjustments— 1 1  1 
Foreign currency translation adjustment(3,198)— (3,198) (3,198)
Balance at June 30, 2022$(1,785)$(2,212)$(3,997)$784 $(3,213)
The following tables summarize the cumulative balance of each component of accumulated other comprehensive (loss) income, net of tax, for the six months ended June 30, (in thousands):
Foreign Currency Translation AdjustmentPostretirement Benefit Plan
Adjustments
Total Pre-Tax AmountTax Benefit (Expense)Accumulated  Other
Comprehensive
(Loss) Income
Balance at December 31, 2022$(3,382)$(395)$(3,777)$(345)$(3,432)
Postretirement health care plan adjustments— 22 22 6 16 
Foreign currency translation adjustment(699)— (699) (699)
Balance at June 30, 2023$(4,081)$(373)$(4,454)$(339)$(4,115)
Balance at December 31, 2021$1,640 $(2,247)$(607)$794 $187 
Postretirement health care plan adjustments— 35 35 (10)25 
Foreign currency translation adjustment(3,425)— (3,425) (3,425)
Balance at June 30, 2022$(1,785)$(2,212)$(3,997)$784 $(3,213)
The realized adjustments relating to the Company’s postretirement health care costs were reclassified from accumulated other comprehensive loss and included in other expense in the consolidated statements of income.
(10)    EQUITY-BASED COMPENSATION
On May 3, 2023, the stockholders of the Company approved the adoption of the Gibraltar Industries, Inc. Amended and Restated 2018 Equity Incentive Plan (the "Amended 2018 Plan") which increases the total number of shares for issuance by the Company from 1,000,000 shares to 1,550,000 shares. In addition, 81,707 shares that were unissued and available for grant under the Gibraltar Industries, Inc. 2015 Equity Incentive Plan (the "2015 Plan") were consolidated with the Amended 2018 Plan. No further grants will be made under the 2015 Plan. Consistent with the Gibraltar Industries, Inc. 2018 Equity Incentive Plan and the 2015 Plan, the Amended 2018 Plan allows 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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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.
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:
 20232022
AwardsNumber of
Awards
Weighted
Average
Grant Date
Fair Value
Number of
Awards (2)
Weighted
Average
Grant Date
Fair Value
Performance stock units (1)85,323 $53.22 108,464 $47.00 
Restricted stock units53,862 $53.49 67,158 $45.84 
Deferred stock units6,351 $54.33 2,460 $42.69 
Common shares8,468 $54.33 15,652 $42.49 
(1) The Company’s performance stock units (“PSUs”) represent shares granted for which the final number of shares earned depends on financial performance. 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) 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 compared to ROIC target for the performance period ended December 31, 2022.
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 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.
Total MSPP liabilities recorded on the consolidated balance sheet as of June 30, 2023 was $16.9 million, of which $2.0 million was included in current accrued expenses and $14.9 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 $14.6 million and $13.4 million at June 30, 2023 and December 31, 2022, respectively.
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The following table provides the number of restricted stock units credited to active participant accounts and the payments made with respect to MSPP liabilities during the six months ended June 30,:
20232022
Restricted stock units credited 44,102 6,234 
MSPP liabilities paid (in thousands)$2,147 $2,545 
(11)    EXIT ACTIVITY COSTS AND ASSET IMPAIRMENTS
The Company has incurred exit activity costs and asset impairment charges as a result of its 80/20 simplification and portfolio management initiatives. These initiatives have resulted in the identification of low-volume, low margin, internally-produced products which have been or will be outsourced or discontinued, the simplification of processes, the sale and exiting of less profitable businesses or product lines, and a reduction in the Company's manufacturing footprint.
Exit activity costs (recoveries) were incurred during the six months ended June 30, 2023 and 2022 which related to moving and closing costs, severance, and contract terminations, along with asset impairment charges (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 six months ended June 30, 2023 associated with the final closure and sale of a facility closed during the fourth quarter of 2022. During the six months ended June 30, 2022, the Company exited a facility, relocating to a new one, and separately, closed one other facility as a result of these initiatives.
The following tables set forth the exit activity costs (recoveries) and asset impairment charges (recoveries) incurred by segment during the three and six months ended June 30, related to the restructuring activities described above (in thousands):
Three Months Ended June 30,
20232022
Exit activity costsAsset impairment chargesTotalExit activity costs Asset impairment chargesTotal
Renewables$2,909 $40 $2,949 $75 $ $75 
Residential   1,295  1,295 
Agtech156  156 97  97 
Infrastructure      
Corporate   62  62 
Total$3,065 $40 $3,105 $1,529 $ $1,529 
Six Months Ended June 30,
20232022
Exit activity costsAsset impairment recoveryTotalExit activity costs (recoveries), netAsset impairment chargesTotal
Renewables$2,909 $(23)$2,886 $1,403 $1,198 $2,601 
Residential114  114 1,298  1,298 
Agtech717  717 88  88 
Infrastructure   (63) (63)
Corporate   82  82 
Total$3,740 $(23)$3,717 $2,808 $1,198 $4,006 

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The following table provides a summary of where the exit activity costs and asset impairment charges were recorded in the consolidated statements of income for the three and six months ended June 30, (in thousands):
Three Months Ended
June 30,
Six Months Ended
June 30,
2023202220232022
Cost of sales$3,098 $80 $3,611 $2,288 
Selling, general, and administrative expense7 1,449 106 1,718 
Total exit activity and asset impairment charges $3,105 $1,529 $3,717 $4,006 
The following table reconciles the beginning and ending liability for exit activity costs relating to the Company’s facility consolidation efforts (in thousands):
20232022
Balance at January 1$2,417 $272 
Exit activity costs recognized3,740 2,808 
Cash payments(2,377)(1,951)
Balance at June 30$3,780 $1,129 
(12)    INCOME TAXES
The following table summarizes the provision for income taxes for continuing operations (in thousands) for the three and six months ended June 30, and the applicable effective tax rates:
Three Months Ended
June 30,
Six Months Ended
June 30,
2023202220232022
Provision for income taxes$11,555 $9,895 $18,732 $14,996 
Effective tax rate27.3 %25.2 %26.6 %25.1 %
The effective tax rate for the three and six months ended June 30, 2023 and 2022, respectively, was greater than the U.S. federal statutory rate of 21% due to state taxes and nondeductible permanent differences partially offset by favorable discrete items due to an excess tax benefit on stock-based compensation.
(13)    EARNINGS PER SHARE
Earnings per share and the weighted average shares outstanding used in calculating basic and diluted earnings per share are as follows for the three and six months ended June 30, (in thousands):
Three Months Ended
June 30,
Six Months Ended
June 30,
2023202220232022
Numerator:
Net income available to common stockholders$30,723 $29,307 $51,822 $44,763 
Denominator for basic earnings per share:
Weighted average shares outstanding30,554 32,585 30,725 32,748 
Denominator for diluted earnings per share:
Weighted average shares outstanding30,554 32,585 30,725 32,748 
Common stock units130 75 121 95 
Weighted average shares and conversions30,684 32,660 30,846 32,843 
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The weighted average number of diluted shares does not include potential anti-dilutive common shares issuable pursuant to equity based incentive compensation awards. The following table provides the potential anti-dilutive common stock units for the three and six months ended June 30, (in thousands):
Three Months Ended
June 30,
Six Months Ended
June 30,
2023202220232022
Common stock units 19 225 17 65 
(14)    SEGMENT INFORMATION
The Company is organized into four reportable segments on the basis of the production processes, products and services provided by each segment, identified as follows:
(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, 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.
The following table illustrates certain measurements used by management to assess performance of the segments described above for the three and six months ended June 30, (in thousands):
Three Months Ended
June 30,
Six Months Ended
June 30,
2023202220232022
Net sales:
Renewables$77,459 $101,549 $136,664 $180,332 
Residential228,234 200,245 407,729 379,730 
Agtech35,028 43,680 70,880 86,108 
Infrastructure 24,193 21,475 42,908 38,644 
Total net sales$364,914 $366,949 $658,181 $684,814 
Income from operations:
Renewables$5,908 $6,829 $8,177 $(155)
Residential43,959 35,664 73,468 69,099 
Agtech(1,117)1,542 1,213 1,573 
Infrastructure5,828 2,887 8,542 4,068 
Unallocated Corporate Expenses(11,501)(6,783)(18,953)(13,251)
Total income from operations$43,077 $40,139 $72,447 $61,334 
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June 30,
2023
December 31,
2022
Total assets:
Renewables$404,447 $392,368 
Residential546,480 519,567 
Agtech182,942 193,966 
Infrastructure84,255 80,264 
Unallocated corporate assets20,453 24,448 
$1,238,577 $1,210,613 
The following tables illustrate segment revenue disaggregated by timing of transfer of control to the customer for the three and six months ended June 30 (in thousands):
Three Months Ended June 30, 2023
RenewablesResidentialAgtechInfrastructureTotal
Net sales:
Point in Time$10,633 $226,618 $880 $8,848 $246,979 
Over Time66,826 1,616 34,148 15,345 117,935 
Total net sales$77,459 $228,234 $35,028 $24,193 $364,914 
Three Months Ended June 30, 2022
RenewablesResidentialAgtechInfrastructureTotal
Net sales:
Point in Time$5,259 $198,854 $4,029 $8,936 $217,078 
Over Time96,290 1,391 39,651 12,539 149,871 
Total net sales$101,549 $200,245 $43,680 $21,475 $366,949 
Six Months Ended June 30, 2023
RenewablesResidentialAgtechInfrastructureTotal
Net sales:
Point in Time$19,727 $404,560 $4,803 $14,909 $443,999 
Over Time116,937 3,169 66,077 27,999 214,182 
Total net sales$136,664 $407,729 $70,880 $42,908 $658,181 
Six Months Ended June 30, 2022
RenewablesResidentialAgtechInfrastructureTotal
Net sales:
Point in Time$10,909