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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 September 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/1713930a41a985c101b4067444b73e15-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 October 31, 2023, the number of shares of common stock outstanding was: 30,436,438.


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.

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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
September 30,
Nine Months Ended
September 30,
 2023202220232022
Net sales$390,744 $391,291 $1,048,925 $1,076,105 
Cost of sales285,360 296,735 769,873 826,434 
Gross profit105,384 94,556 279,052 249,671 
Selling, general, and administrative expense52,194 47,160 153,415 140,941 
Income from operations53,190 47,396 125,637 108,730 
Interest expense417 1,048 3,216 2,189 
Other (income) expense (1,040)363 (1,946)797 
Income before taxes53,813 45,985 124,367 105,744 
Provision for income taxes14,536 11,690 33,268 26,686 
Net income$39,277 $34,295 $91,099 $79,058 
Net earnings per share:
Basic$1.29 $1.08 $2.97 $2.44 
Diluted$1.28 $1.08 $2.96 $2.43 
Weighted average shares outstanding:
Basic30,485 31,707 30,638 32,396 
Diluted30,715 31,812 30,808 32,503 
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,
 2023202220232022
Net income $39,277 $34,295 $91,099 $79,058 
Other comprehensive (loss) income:
Foreign currency translation adjustment(1,376)(3,568)(2,075)(6,993)
Postretirement benefit plan adjustments, net of tax8 12 24 37 
Other comprehensive loss(1,368)(3,556)(2,051)(6,956)
Total comprehensive income $37,909 $30,739 $89,048 $72,102 
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,
2023
December 31,
2022
(unaudited)
Assets
Current assets:
Cash and cash equivalents$85,465 $17,608 
Accounts receivable, net of allowance of $4,069 and $3,746, respectively
256,400 217,156 
Inventories, net141,008 170,360 
Prepaid expenses and other current assets24,817 18,813 
Total current assets507,690 423,937 
Property, plant, and equipment, net105,537 109,584 
Operating lease assets23,004 26,502 
Goodwill515,344 512,363 
Acquired intangibles134,047 137,526 
Other assets2,424 701 
$1,288,046 $1,210,613 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$160,742 $106,582 
Accrued expenses100,657 73,721 
Billings in excess of cost51,616 35,017 
Total current liabilities313,015 215,320 
Long-term debt 88,762 
Deferred income taxes47,007 47,088 
Non-current operating lease liabilities16,901 19,041 
Other non-current liabilities21,274 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; 34,212 and 34,060 shares issued and outstanding in 2023 and 2022
342 340 
Additional paid-in capital330,128 322,873 
Retained earnings719,077 627,978 
Accumulated other comprehensive loss(5,483)(3,432)
Cost of 3,776 and 3,199 common shares held in treasury in 2023 and 2022
(154,215)(125,660)
Total stockholders’ equity889,849 822,099 
$1,288,046 $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) 
Nine Months Ended
September 30,
 20232022
Cash Flows from Operating Activities
Net income$91,099 $79,058 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization20,574 19,192 
Stock compensation expense7,257 5,889 
Exit activity costs, non-cash572 1,427 
Provision for deferred income taxes179 181 
Other, net2,945 3,620 
Changes in operating assets and liabilities net of effects from acquisitions:
Accounts receivable(44,331)(25,538)
Inventories30,431 (19,840)
Other current assets and other assets(1,426)393 
Accounts payable53,198 (24,756)
Accrued expenses and other non-current liabilities46,158 (1,065)
Net cash provided by operating activities 206,656 38,561 
Cash Flows from Investing Activities
Acquisitions, net of cash acquired(9,863)(51,621)
Purchases of property, plant, and equipment, net(7,976)(15,704)
Net cash used in investing activities(17,839)(67,325)
Cash Flows from Financing Activities
Long-term debt payments(141,000)(100,000)
Proceeds from long-term debt50,000 197,800 
Purchase of common stock at market prices(29,182)(58,125)
Net cash (used in) provided by financing activities(120,182)39,675 
Effect of exchange rate changes on cash(778)(1,841)
Net increase in cash and cash equivalents67,857 9,070 
Cash and cash equivalents at beginning of year17,608 12,849 
Cash and cash equivalents at end of period$85,465 $21,919 
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
Treasury StockTotal
Stockholders’
Equity
 SharesAmountSharesAmount
Balance at June 30, 2023 34,194 $342 $327,927 $679,800 $(4,115)3,770 $(153,644)$850,310 
Net income— — — 39,277 — — — 39,277 
Foreign currency translation adjustment— — — — (1,376)— — (1,376)
Postretirement benefit plan adjustments, net of taxes of $3
— — — — 8 — — 8 
Stock compensation expense— — 2,201 — — — — 2,201 
Net settlement of restricted stock units18 — — — — 6 (412)(412)
Excise tax on repurchase of common stock— — — — — — (159)(159)
Balance at September 30, 202334,212 $342 $330,128 $719,077 $(5,483)3,776 $(154,215)$889,849 

Balance at June 30, 202233,989 $340 $318,664 $590,335 $(3,213)2,374 $(88,848)$817,278 
Net income— — — 34,295 — — — 34,295 
Foreign currency translation adjustment— — — — (3,568)— — (3,568)
Postretirement benefit plan adjustments, net of taxes of $5
— — — — 12 — — 12 
Stock compensation expense— — 1,764 — — — — 1,764 
Net settlement of restricted stock units45 — — — — 18 (749)(749)
Common stock repurchased under stock repurchase program— — — — — 138 (5,541)(5,541)
Balance at September 30, 202234,034 $340 $320,428 $624,630 $(6,769)2,530 $(95,138)$843,491 

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— — — 91,099 — — — 91,099 
Foreign currency translation adjustment— — — — (2,075)— — (2,075)
Postretirement benefit plan adjustments, net of taxes of $9
— — — — 24 — — 24 
Stock compensation expense— — 7,257 — — — — 7,257 
Net settlement of restricted stock units144 2 (2)— — 56 (3,215)(3,215)
Awards of common stock8 — — — — — — — 
Excise tax on repurchase of common stock— — — — — — (159)(159)
Common stock repurchased under stock repurchase program— — — — — 521 (25,181)(25,181)
Balance at September 30, 202334,212 $342 $330,128 $719,077 $(5,483)3,776 $(154,215)$889,849 

Balance at December 31, 202133,799 $338 $314,541 $545,572 $187 1,107 $(35,380)$825,258 
Net income— — — 79,058 — — — 79,058 
Foreign currency translation adjustment— — — — (6,993)— — (6,993)
Postretirement benefit plan adjustments, net of taxes of $15
— — — — 37 — — 37 
Stock compensation expense— — 5,889 — — — — 5,889 
Net settlement of restricted stock units219 2 (2)— — 90 (4,217)(4,217)
Awards of common stock16 — — — — — — — 
Common stock repurchased under stock repurchase program— — — — — 1,333 (55,541)(55,541)
Balance at September 30, 202234,034 $340 $320,428 $624,630 $(6,769)2,530 $(95,138)$843,491 

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):
September 30, 2023December 31, 2022
Trade accounts receivable$216,754 $179,170 
Costs in excess of billings43,715 41,732 
Total accounts receivable260,469 220,902 
Less allowance for doubtful accounts and contract assets(4,069)(3,746)
Accounts receivable, net$256,400 $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 nine month period ended September 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 recoveries1,479 
Accounts written off against allowance and other adjustments(1,156)
Ending balance as of September 30, 2023$4,069 
(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 September 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 September 30, 2023 and December 31, 2022 was $7.2 million and $4.6 million, respectively. Revenue recognized during the nine months ended September 30, 2023 and 2022 that was in contract liabilities at the beginning of the respective periods was $32.2 million and $41.2 million, respectively.
(5)    INVENTORIES
Inventories consisted of the following (in thousands):
September 30, 2023December 31, 2022
Raw material$91,069 $111,187 
Work-in-process13,675 17,944 
Finished goods42,497 47,523 
Gross inventory147,241 176,654 
Less reserves(6,233)(6,294)
Total inventories, net$141,008 $170,360 
(6)    ACQUISITION
On July 5, 2023, the Company acquired the assets of a privately held Utah-based company that manufactures and distributes roof flashing and accessory products, and sells direct to roofing wholesalers. The results of this company have been included in the Company's consolidated financial results since the date of acquisition within the Company's Residential segment. The preliminary purchase consideration for this acquisition was $10.4 million, which includes a preliminary working capital adjustment and certain other adjustments provided for in the asset purchase agreement.
The purchase price for the acquisition was preliminarily allocated to the assets acquired and liabilities assumed based upon their respective fair values estimated as of the date of acquisition. The Company has commenced 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. Due to the timing of the acquisition, the Company continues to gather information supporting the acquired assets and assumed liabilities. Accordingly, all amounts recorded are provisional. These provisional amounts are subject to change if new information is obtained concerning facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date. The final determination of the fair value of certain assets and liabilities will be completed within a measurement period of up to one year from the date of acquisition. The final values may also result in changes to depreciation and amortization expense related to certain assets such as property, plant, and equipment and acquired intangible assets. The preliminary excess consideration was recorded as goodwill and approximated $4.1 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 final purchase price allocation will be completed no later than the third quarter of fiscal year 2024.
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):
Working capital$889 
Property, plant and equipment195 
Acquired intangible assets5,200 
Goodwill4,133 
Fair value of purchase consideration$10,417 
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The intangible assets acquired in this acquisition consisted of the following (in thousands):
Fair ValueWeighted-Average Amortization Period
Trademarks$300 2 years
Customer relationships4,900 12 years
Total$5,200 

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 
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 the privately held Utah-based company and the acquisition of QAP were financed primarily through borrowings under the Company's revolving credit facility.
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The Company 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 Company also incurred certain acquisition-related costs comprised of legal and consulting fees within selling, general, and administrative ("SG&A") expense.
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,
2023202220232022
Cost of sales$12 $476 $12 $476 
Selling, general and administrative costs224 522 245 529 
Total acquisition related costs$236 $998 $257 $1,005 

(7)    GOODWILL AND RELATED INTANGIBLE ASSETS
Goodwill
The changes in the carrying amount of goodwill for the nine months ended September 30, 2023 are as follows (in thousands):
RenewablesResidentialAgtechInfrastructureTotal
Balance at December 31, 2022$188,030 $209,056 $83,599 $31,678 $512,363 
Acquired goodwill 4,133   4,133 
Adjustments to prior year acquisitions 387   387 
Foreign currency translation(1,273) (266) (1,539)
Balance at September 30, 2023$186,757 $213,576 $83,333 $31,678 $515,344 
Goodwill is recognized net of accumulated impairment losses of $133.2 million as of September 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 September 30, 2023 which would require an interim impairment test to be performed.
Acquired Intangible Assets
Acquired intangible assets consisted of the following (in thousands):
 September 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:
Trademarks5,745 4,616 5,448 4,481 
Unpatented technology34,155 23,749 34,163 22,037 
Customer relationships119,078 52,323 115,125 46,557 
Non-compete agreements2,370 2,113 2,371 2,006 
161,348 82,801 157,107 75,081 
Total acquired intangible assets$216,848 $82,801 $212,607 $75,081 
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The following table summarizes the acquired intangible asset amortization expense for the three and nine months ended September 30, (in thousands):
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023202220232022
Amortization expense$2,893 $2,801 $8,419 $8,718 
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$2,899 $11,416 $11,204 $9,738 $8,111 $7,244 
(8)    LONG-TERM DEBT
The Company had no outstanding debt as of September 30, 2023 and unamortized debt issuance costs, included in other assets on the consolidated balance sheet, were $1.9 million. As of December 31, 2022, the Company's total outstanding debt was $88.8 million, which included $91.0 million on the Company's revolving credit facility net of $2.2 million in unamortized debt issuance costs.
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 September 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 nine months ended September 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 $3.9 million have been issued under the Credit Agreement to third parties on behalf of the Company as of September 30, 2023. These letters of credit reduce the amount otherwise available under the revolving credit facility. The Company had $396.1 million and $304.5 million of availability under the revolving credit facility as of September 30, 2023 and December 31, 2022, respectively.
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(9)    ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME
The following tables summarize the cumulative balance of each component of accumulated other comprehensive loss, net of tax, for the three months ended September 30, (in thousands):
Foreign
Currency
Translation
Adjustment
Postretirement
Benefit Plan
Adjustments
Total
Pre-Tax
Amount
Tax
(Benefit)
Expense
Accumulated
Other
Comprehensive
Loss
Balance at June 30, 2023$(4,081)$(373)$(4,454)$(339)$(4,115)
Postretirement health care plan adjustments— 11 11 3 8 
Foreign currency translation adjustment(1,376)— (1,376) (1,376)
Balance at September 30, 2023$(5,457)$(362)$(5,819)$(336)$(5,483)
Balance at June 30, 2022$(1,785)$(2,212)$(3,997)$(784)$(3,213)
Postretirement health care plan adjustments— 17 17 5 12 
Foreign currency translation adjustment(3,568)— (3,568) (3,568)
Balance at September 30, 2022$(5,353)$(2,195)$(7,548)$(779)$(6,769)
The following tables summarize the cumulative balance of each component of accumulated other comprehensive (loss) income, net of tax, for the nine months ended September 30, (in thousands):
Foreign
Currency
Translation
Adjustment
Postretirement
Benefit Plan
Adjustments
Total
Pre-Tax
Amount
Tax
(Benefit)
Expense
Accumulated  Other
Comprehensive
(Loss) Income
Balance at December 31, 2022$(3,382)$(395)$(3,777)$(345)$(3,432)
Postretirement health care plan adjustments— 33 33 9 24 
Foreign currency translation adjustment(2,075)— (2,075) (2,075)
Balance at September 30, 2023$(5,457)$(362)$(5,819)$(336)$(5,483)
Balance at December 31, 2021$1,640 $(2,247)$(607)$(794)$187 
Postretirement health care plan adjustments— 52 52 15 37 
Foreign currency translation adjustment(6,993)— (6,993) (6,993)
Balance at September 30, 2022$(5,353)$(2,195)$(7,548)$(779)$(6,769)
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 available 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 nine months ended September 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 units89,713 $61.21 123,351 $43.42 
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 September 30, 2023 were $18.3 million, of which $2.0 million was included in current accrued expenses and $16.3 million was included in non-current liabilities. Total MSPP liabilities recorded on the consolidated balance sheet as of December 31, 2022 were $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 liabilities was $15.9 million and $13.4 million at September 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 nine months ended September 30,:
20232022
Restricted stock units credited 46,843 9,564 
MSPP liabilities paid (in thousands)$2,392 $2,961 
(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 nine months ended September 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 and other charges associated with discontinued product lines, as a result of process simplification initiatives. In conjunction with these initiatives, the Company recorded costs during the nine months ended September 30, 2023 associated with the final closure and sale of a facility closed during the fourth quarter of 2022. During the nine months ended September 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 nine months ended September 30, related to the restructuring activities described above (in thousands):
Three Months Ended September 30,
20232022
Exit ActivityAsset ImpairmentTotalExit ActivityAsset ImpairmentTotal
Renewables$4,389 $(59)$4,330 $(44)$ $(44)
Residential22 654 676  12 12 
Agtech5  5 15 217 232 
Infrastructure      
Corporate(33) (33)11  11 
Total$4,383 $595 $4,978 $(18)$229 $211 
Nine Months Ended September 30,
20232022
Exit ActivityAsset ImpairmentTotalExit ActivityAsset ImpairmentTotal
Renewables$7,298 $(82)$7,216 $1,359 $1,198 $2,557 
Residential136 654 790 1,298 12 1,310 
Agtech722  722 103 217 320 
Infrastructure   (63) (63)
Corporate(33) (33)93  93 
Total$8,123 $572 $8,695 $2,790 $1,427 $4,217 

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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 nine months ended September 30, (in thousands):
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023202220232022
Cost of sales$4,544 $(39)$8,155 $2,249 
Selling, general, and administrative expense434 250 540 1,968 
Total exit activity and asset impairment charges $4,978 $211 $8,695 $4,217 
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 recognized8,123 2,790 
Cash payments(3,254)(2,782)
Balance at September 30$7,286 $280 
(12)    INCOME TAXES
The following table summarizes the provision for income taxes for continuing operations (in thousands) for the three and nine months ended September 30, and the applicable effective tax rates:
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023202220232022
Provision for income taxes$14,536 $11,690 $33,268 $26,686 
Effective tax rate27.0 %25.4 %26.7 %25.2 %
The effective tax rate for the three and nine months ended September 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 nine months ended September 30, (in thousands):
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023202220232022
Numerator:
Net income available to common stockholders$39,277 $34,295 $91,099 $79,058 
Denominator for basic earnings per share:
Weighted average shares outstanding30,485 31,707 30,638 32,396 
Denominator for diluted earnings per share:
Weighted average shares outstanding30,485 31,707 30,638 32,396 
Common stock units230 105 170 107 
Weighted average shares and conversions30,715 31,812 30,808 32,503 
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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 nine months ended September 30, (in thousands):
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023202220232022
Common stock units 17 51 19 48 
(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 nine months ended September 30, (in thousands):
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023202220232022
Net sales:
Renewables$106,362 $111,119 $243,026 $291,451 
Residential227,747 215,592 635,476 595,322 
Agtech31,666 44,217 102,546 130,325 
Infrastructure 24,969 20,363 67,877 59,007 
Total net sales$390,744 $391,291 $1,048,925 $1,076,105 
Income from operations:
Renewables$12,907 $14,216 $21,084 $14,061 
Residential42,158 35,802 115,626 104,901 
Agtech2,136 3,777 3,349 5,350 
Infrastructure6,386 2,572 14,928 6,640 
Unallocated Corporate Expenses(10,397)(8,971)(29,350)(22,222)
Total income from operations$53,190 $47,396 $125,637 $108,730 
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September 30,
2023
December 31,
2022
Total assets:
Renewables$399,969 $392,368 
Residential539,800 519,567 
Agtech182,988 193,966 
Infrastructure79,877 80,264 
Unallocated corporate assets85,412 24,448 
$1,288,046 $1,210,613 
The following tables illustrate segment revenue disaggregated by timing of transfer of control to the customer for the three and nine months ended September 30 (in thousands):
Three Months Ended September 30, 2023
RenewablesResidentialAgtechInfrastructureTotal
Net sales:
Point in Time$15,903 $225,985 $777 $9,922 $252,587 
Over Time90,459 1,762 30,889 15,047 138,157 
Total net sales$106,362 $227,747 $31,666 $24,969 $390,744 
Three Months Ended September 30, 2022
RenewablesResidentialAgtechInfrastructureTotal
Net sales:
Point in Time$7,660 $214,175 $3,510 $9,938 $235,283 
Over Time103,459 1,417 40,707 10,425