10q10k10q10k.net

What changed in GIBRALTAR INDUSTRIES, INC.'s 10-K — 2023 vs 2024

vs

Paragraph-level year-over-year comparison of GIBRALTAR INDUSTRIES, INC.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+217 added−255 removedSource: 10-K (2025-02-19) vs 10-K (2024-02-21)

Top changes in GIBRALTAR INDUSTRIES, INC.'s 2024 10-K

217 paragraphs added · 255 removed · 145 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

50 edited+15 added−18 removed27 unchanged
Biggest changeWhile the figures below are in total, the Company evaluates its organization against the diversity of the communities that the Company operates in, with a goal of being representative at the community level. 2023 Workforce Composition (Gender and Age) Employee Age Groups Female Male Non-Binary Total by Age Group % by Age Group 86 276 2 364 17.3% 30 - 49 years of age 297 678 — 975 46.2% 50+ years of age 245 526 — 771 36.5% Total 628 1,480 2 2,110 As a percentage 29.8% 70.1% 0.1% 10 Table of Contents Number of 2023 Employees by Employment Type (by Gender) Employee Type Female Male Non-Binary Total by Type % by Type Salary 242 554 — 796 37.7% Hourly 386 926 2 1,314 62.3% Total 628 1,480 2 2,110 2023 Ethnic Background of Employees Ethnic Background % of Employees White 58.8% Hispanic or Latino 17.0% Black or African American 12.6% Asian 4.3% Not Specified 3.5% Two or More Races 2.3% Hawaiian/Pacific Islander 0.9% American Indian/Alaska Native 0.6% The Company believes in building a team that includes people who bring diversity of thought, experience, and perspective to its organization.
Biggest changeWhile the figures below are aggregated, the Company measures and strives to reflect in the Company's teams the diversity of the communities in which the Company operates. 11 Table of Contents Employee Composition by Gender and Age Employee Category Female Male Non-Binary Decline to Answer Age Group Totals Age Group # of Employees # of Employees # of Employees # of Employees # of Employees % of Workforce Less than 30 83 266 2 1 352 16.7% 30 to 49 306 661 1 3 971 46.1% 50 and over 251 533 — — 784 37.2% Total 640 1,460 3 4 2,107 As a percentage 30.4% 69.3% 0.1% 0.2% Number of Employees by Employment Type Employee Category Female Male Non-Binary Decline to Answer Comp Group Totals Comp Group # of Employees # of Employees # of Employees # of Employees # of Employees % of Workforce Salary 220 526 — 1 747 35.5% Hourly 420 934 3 3 1,360 64.5% Total 640 1,460 3 4 2,107 Ethnic Background of Employees Ethnic Background % of Workforce White 55.5% Hispanic or Latino 20.3% Black or African American 12.9% Not Specified 4.0% Asian 3.6% Two or More Races 1.8% Hawaiian/Pacific Islander 1.5% American Indian/Alaska Native 0.4% Leadership Development The Company's leadership development journey blends on-the-job experiences with peer learning, self-study and facilitated training sessions.
Item 1. Business The Company Gibraltar Industries, Inc. (the "Company") is a leading manufacturer and provider of products and services for the renewable energy, residential, agtech and infrastructure markets. The Company's mission is to make life better for people and the planet, fueled by advancing the disciplines of engineering, science, and technology.
Item 1. Business The Company Gibraltar Industries, Inc. (the "Company") is a leading manufacturer and provider of products and services for the residential, renewable energy, agtech and infrastructure markets. The Company's mission is to make life better for people and the planet, fueled by advancing the disciplines of engineering, science, and technology.
Segments The Company serves customers primarily in North America including renewable energy (solar) developers, home improvement retailers, wholesalers, distributors, institutional and commercial growers of fruits, vegetables, flowers and other plants, and contractors.
Segments The Company serves customers primarily in North America including home improvement retailers, wholesalers, distributors, contractors, renewable energy (solar) developers, and institutional and commercial growers of fruits, vegetables, flowers and other plants.
The Company's businesses are focused on solving global challenges accelerating renewable energy generation, increasing the supply of locally-grown and more sustainably-produced food and plants, maintaining healthy and efficient home environments, supporting mail and package delivery, and improving the country’s transportation infrastructure and ways of transporting people. Value-Added Products and Services .
The Company's businesses are focused on maintaining healthy and efficient home environments, supporting mail and package delivery, solving global challenges accelerating renewable energy generation, increasing the supply of locally-grown and more sustainably-produced food and plants, and improving the country’s transportation infrastructure and ways of transporting people. Value-Added Products and Services .
Portfolio Management is focused on optimizing the Company’s business portfolio in higher growth markets with leadership positions while ensuring its financial capital and human resources are effectively and efficiently deployed to deliver sustainable, profitable growth while increasing its relevance with customers and shaping its markets.
Portfolio Management is focused on optimizing the Company’s business portfolio in higher growth markets with leadership positions while ensuring its financial capital and human resources are effectively and efficiently deployed to deliver sustainable, profitable growth while increasing its relevance with customers and shaping its markets. 3.
In addition, new or more stringent regulation of the Company's energy suppliers could cause them to increase the price of energy. The Company's operations are also governed by many other laws and regulations covering its labor relationships, the import and export of goods, the zoning of its facilities, taxes, its general business practices, and other matters.
In addition, new or more stringent regulation of the Company's energy suppliers could cause them to increase the price of energy. 10 Table of Contents The Company's operations are also governed by many other laws and regulations covering its labor relationships, the import and export of goods, the zoning of its facilities, taxes, its general business practices, and other matters.
The Company provides optimal solutions to its customers: racking, foundation, and electrical systems for photovoltaic solar systems, commercial growing greenhouses for biologically grown food, floriculture, and other plants; roof-related ventilation and weather protection to support healthy home environments; mail and package storage for home and retail and non-retail sites; and structural bearings, expansion joints and rubber products for bridges and other transportation structures.
The Company provides optimal solutions to its customers: roof-related ventilation and weather protection to support healthy home environments; mail and package storage for home and retail and non-retail sites; racking, foundation, and electrical systems for photovoltaic solar systems, controlled environmental agriculture systems and custom commercial growing greenhouses for biologically grown food, floriculture, and other plants; and structural bearings, expansion joints and rubber products for bridges and other transportation structures.
Large scale greenhouse facilities are unique to a particular type of plant, vegetable, flower, or fruit, and require unique structures, growing systems, and the integration of the structure and the systems. 7 Table of Contents Infrastructure The Infrastructure segment serves highway and bridge construction and airports through commercial and transportation contractors and fabricators.
Large scale greenhouse facilities are unique to a particular type of plant, vegetable, flower, or fruit, and require unique structures, growing systems, and the integration of the structure and the systems. Infrastructure The Infrastructure segment serves highway and bridge construction and airports through commercial and transportation contractors and fabricators.
The Company's products and services are highly engineered, supported with intellectual property, and driven by effective business systems and IT infrastructure. Commitment to Customer and Quality .
The Company's products and services are highly engineered, supported with intellectual property, and driven by effective business systems and IT infrastructure. Commitment to Customers and Quality .
The Company's residential product offerings are sold through major retail home centers, building material wholesalers, building product distributors, buying groups, roofing distributors, residential contractors, property management companies, manufactured housing dealers, postal services distributors and providers, and online direct to end consumers.
The Company's residential product offerings are sold through major retail home centers, building material wholesalers, building product distributors, roofing distributors, residential contractors, property management companies, manufactured housing dealers, postal services distributors and providers, and online directly to end consumers.
The Company is committed to making a difference in the lives of the people the Company's business touches, and to creating meaningful impact every day through the Company's work and relationships. A sense of responsibility to people and the planet is woven into the core values that define the Company's purpose and drive the Company's culture.
The Company is committed to making a difference in the lives of the people the Company's businesses touch, and to creating meaningful impact every day through the Company's work and relationships. A sense of responsibility to people and the planet is woven into the values that define the Company's purpose and drive the Company's culture.
Corporate Social Responsibility Corporate Social Responsibility is a key consideration in everything, from the products the Company makes and the suppliers the Company engages with, to the Company's employee policies, business strategies, and future plans.
Corporate Social Responsibility Corporate Social Responsibility is a key consideration in everything from the products the Company makes and the suppliers the Company engages with, to the Company's employment practices, business strategies, and future plans.
The Company's operational infrastructure provides the necessary scale to support regional and national customers in each of its markets. 4 Table of Contents The Company operates and reports its results in the following four reporting segments: • Renewables • Residential • Agtech • Infrastructure The following table summarizes the primary products and, where applicable, services, applications, and end markets for each segment: Renewables Segment Products and Services Applications End Market Design, engineering, manufacturing and installation of solar racking and electrical balance of systems Commercial and distributed generation scale solar installations on any type of terrain Solar developers; power companies; solar energy EPC contractors Residential Segment Products Applications End Market Roof and foundation ventilation products Ventilation and whole-house air flow management Residential: new construction and repair and remodeling Single point and centralized mail systems and electronic package solutions Secure storage for mail and package deliveries Retractable awnings and gutter guards Sun and wind protection; gutter protection Trims and flashings, metal roofing, rain dispersion, other accessories Protection from water and other natural elements - roof integrity Agtech Segment Products and Services Applications End Market Provide growing solutions including the designing, engineering, manufacturing, full scope construction, maintenance and support of greenhouses and indoor growing operations Retail, fruits and vegetables, flowers, cannabis, commercial, institutional and conservatories, car wash structures Large scale indoor produce growers; retail garden centers; conservatories and botanical gardens; floriculture growers; agricultural research; car washes; cannabis growers Infrastructure Segment Products Applications End Market Engineered solutions for bridges, highways and airfields, including structural bearings, expansion joints, pavement seals, elastomeric concrete, bridge cable protection systems Preserve functionality under varying weight, wind, temperature and seismic conditions Bridge and elevated highway construction, airport pavements 5 Table of Contents The Company’s operating businesses have established strong positions in attractive end markets by building core capabilities in innovation, new products and services, manufacturing and field operations, business systems, quality performance, along with a healthy balance sheet and the strength of our people.
The Company's operational infrastructure provides the necessary scale to support regional and national customers in each of its markets. 5 Table of Contents The Company operates and reports its results in the following four reporting segments: • Residential • Renewables • Agtech • Infrastructure The following table summarizes the primary products and, where applicable, services, applications, and end markets for each segment: Residential Segment Products Applications End Market Roof and foundation ventilation products Ventilation Residential: new construction and repair and remodeling Single point and centralized mail systems and package solutions Secure storage for mail and package deliveries Retractable awnings and gutter guards Sun and wind protection; gutter protection Trims and flashings, metal roofing, rain dispersion, other accessories Protection from water and other natural elements - roof integrity Renewables Segment Products and Services Applications End Market Design, engineering, manufacturing and installation of solar racking and electrical balance of systems Commercial and distributed generation scale solar installations on any type of terrain Solar developers; power companies; solar energy engineering, procurement, and construction ("EPC") contractors Agtech Segment Products and Services Applications End Market Controlled environmental agriculture, and custom greenhouse solutions and structural canopies including the designing, engineering, manufacturing, full scope construction of the structure and integration of subsystems Retail, fruits and vegetables, flowers, commercial, institutional and conservatories, car wash structures Large scale indoor produce growers; retail garden centers; conservatories and botanical gardens; floriculture growers; agricultural research; car washes 6 Table of Contents Infrastructure Segment Products Applications End Market Engineered solutions for bridges, highways and airfields, including structural bearings, expansion joints, pavement seals, elastomeric concrete, bridge cable protection systems Bridge and elevated highway construction, airport pavements Commercial and transportation contractors and fabricators The Company’s operating businesses have established strong positions in attractive end markets by building core capabilities in innovation, new products and services, manufacturing and field operations, business systems, quality performance, along with a healthy balance sheet and the strength of our people.
Transforming the Company positions it to play a significant role in sustainable development issues, building partnerships with key players that help advance critical technologies, strengthening the Renewables, Residential, Agtech and Infrastructure businesses, and enabling the Company to better respond to humanity's evolving needs.
This transformation positions the Company to play a significant role in sustainable development matters, building partnerships with key players that help advance critical technologies, strengthening the Company's Residential, Renewables, Agtech and Infrastructure businesses, and enabling the Company to better respond to humanity's evolving needs.
Substantially all of its resins are purchased from domestic vendors, primarily through distributors, with a small amount purchased directly from manufacturers. Management continually evaluates improvements in the Company's purchasing practices across its geographically dispersed facilities in order to streamline purchasing across similar commodities. The Company purchases natural gas and electricity from suppliers in proximity to its operations.
Substantially all of its resins are purchased from domestic vendors, primarily through distributors, with a small amount purchased directly from manufacturers. Management continually evaluates improvements in the Company's purchasing practices across its geographically dispersed facilities in order to streamline purchasing across similar commodities.
An eBOS system supports the conversion of captured sunlight to direct current energy. The Company is a full eBOS solution provider, from combiner boxes that take multiple source circuits and combine them into a single output to pre-fabricated and customized wire harnesses and source circuit lengths which greatly shorten field installation time.
The Company is a full eBOS solution provider, from combiner boxes that take multiple source circuits and combine them into a single output to pre-fabricated and customized wire harnesses and source circuit lengths which greatly shorten field installation time.
Intellectual Property The Company actively protects its proprietary rights by the use of trademark, copyright, and patent registrations. While the Company does not believe that any individual item of its intellectual property is material, the Company believes its trademarks, copyrights, and patents provide the Company with a competitive advantage when marketing its products to customers.
While the Company does not believe that any individual item of its intellectual property is material, the Company believes its trademarks, copyrights, and patents provide the Company with a competitive advantage when marketing its products to customers.
At December 31, 2023, the Company operated thirty facilities, which were comprised of twenty-three manufacturing facilities, one distribution center, and six offices, and were located within sixteen states, Canada and China.
At December 31, 2024, the Company operated thirty facilities, which were comprised of twenty-three manufacturing facilities, two distribution centers, and five offices, and were located within sixteen states, Canada and China.
Sales and Marketing In 2023, approximately 41% of the Company's revenues were generated from products and services that were sold directly to the end user, with the remainder of revenues generated through retailers, wholesalers and distributors.
Sales and Marketing In 2024, approximately 60% of the Company's revenues were generated from sales to retailers, wholesalers and distributors and approximately 40% from products and services that were sold directly to the end user.
Customers and Products The Company's customers are located primarily throughout North America. One customer, a home improvement retailer which purchases from the Residential segment represented 13%, 14% and 13% of the Company's consolidated net sales for the years ended December 31, 2023, 2022 and 2021, respectively.
One customer, a home improvement retailer which purchases from the Residential segment, represented 12%, 13% and 14% of the Company's consolidated net sales for the years ended December 31, 2024, 2023 and 2022, respectively.
Each of these product offerings can be sold separately or as part of a system solution. The Company strives to improve its product-solution offerings while adapting to local and regional building codes and new products recently introduced include efficient-installation ventilation solutions, next generation single mailboxes, electronic parcel lockers, pipe flashings and remote-controlled deck awnings and valances for sun protection.
The Company strives to improve its product-solution offerings while adapting to local and regional building codes and new products recently introduced include efficient-installation ventilation solutions, next generation single mailboxes, pipe flashings and remote-controlled deck awnings and valances for sun protection.
The backlog primarily relates to certain business units in the Company's Renewables, Agtech, and Infrastructure segments. The Company believes that the performance obligations related to the majority of its backlog will be satisfied and related revenue recognized during 2024. Competition The Company operates in highly competitive markets with several competitors participating in each of its end markets.
The Company believes that the performance obligations related to the majority of its backlog will be satisfied and related revenue recognized during 2025. Competition The Company operates in highly competitive markets with several competitors participating in each of its end markets.
Residential The Residential segment serves both the residential repair and remodeling and new housing construction markets in North America with products and services including roof and foundation ventilation products, single point and centralized mail systems and electronic package solutions, outdoor living space products (sun-shading), rain dispersion systems, metal roofing job site services, and other construction accessories.
No other customer in any segment or segments accounted for more than 10% of the Company's consolidated net sales. 7 Table of Contents Residential The Residential segment serves both the residential repair and remodeling and new housing construction markets in North America with products and services including roof and foundation ventilation products, single point and centralized mail and package solutions, outdoor living space products (sun-shading), rain dispersion systems, metal roofing job site services, and other construction accessories.
The Company works to create a culture that is inclusive of different perspectives and experiences. • Make an impact - The Company is here to make a difference. The Company drives change and delivers meaningful value to customers, investors, and community.
We work to create a culture that is inclusive of different perspectives and experiences. • Make an impact - We are here to make a difference. We drive change and deliver meaningful value to our customers, investors, and community.
As of December 31, 2023, the Company's liquidity was $495.5 million, including $99.4 million of cash and $396.1 million of availability under its revolving credit facility.
As of December 31, 2024, the Company's liquidity was $664.6 million, including $269.5 million of cash and $395.1 million of availability under its revolving credit facility.
Since 2014, the Company has been transforming itself to focus on solving some of humanity's most challenging opportunities - from harnessing energy and growing food more sustainably to living and working with greater ease, efficiency, and comfort.
The Company continues to transform itself to focus on providing solutions to some of humanity's greatest challenges - from harnessing energy and growing food more sustainably, to living and working with greater ease, efficiency, and comfort.
The Company goes to market with a focused and broad range of high quality products, executes with speed and industry-leading service, value-based pricing and project management and field operations in its Agtech and Renewables businesses. Seasonality The Company’s end markets have historically experienced seasonal demand fluctuation, with lower demand typically in the first and fourth quarters.
The Company goes to market with a focused and broad range of high quality products, executes with speed and industry-leading service, and value-based pricing. Furthermore, the Company's focus on project management and field operations in its Renewables and Agtech segments is critical to these businesses.
In an emergency, the Company's priorities are to protect the welfare of our people and to maintain business continuity. Diversity and Inclusion The Company supports and encourages a culture where diversity of thought flourishes and all employees feel appreciated, included, and know they have an equal opportunity to develop, grow, and succeed based on their performance.
Diversity and Inclusion The Company supports and encourages a culture where diversity of thought flourishes and all employees feel appreciated, included, and know they have an equal opportunity to develop, grow, and succeed based on their performance. The Company believes demonstrating respect and valuing perspectives and contributions are critical to cultivating the Company's best and most successful outcomes.
The structural metal components are designed, engineered, fabricated and installed in accordance with applicable building codes. 6 Table of Contents New products introduced in recent years include screw-based racking and foundation solutions, operating software to optimize solar energy investments, and single-axis tracker systems. The Company's screw-based racking foundation offers rapid and secure installation on any terrain.
Most of the Company's production is completed using computer numerical control machines, roll forming machines, laser cutters and other fabrication tools. The structural metal components are designed, engineered, fabricated and installed in accordance with applicable building codes. New products introduced in recent years include screw-based racking and foundation solutions, operating software to optimize solar energy investments, and single-axis tracker systems.
Agtech The Agtech segment designs, manufactures, and builds advanced-technology turnkey greenhouse growing facilities for large-scale indoor commercial growers of fruits and vegetables, plants and flowers, and agricultural research and development facilities with over 100 universities in the United States.
Turnkey growing facilities, with the structure and multiple subsystems, are designed, integrated, manufactured, constructed and installed for large-scale indoor commercial growers of fruits and vegetables, plants and flowers, and agricultural research and development facilities with over 100 universities in the United States.
Safety performance and best practices are also reviewed quarterly with the entire organization during company-wide Town Hall meetings and with the Company's Board of Directors during quarterly board meetings. Each of the Company's businesses have a safety team that assesses all recordable incidents and near misses to identify mitigating actions to prevent accidents in the future.
The Company's CEO reviews safety performance monthly, including recordable incidents, near misses, and first aid cases. Safety performance and best practices are also reviewed quarterly enterprise-wide during the Company's Town Hall meetings. Each of the Company's businesses has a safety team that collaborates with the Company's leaders and employees to assess risks to identify mitigating actions to prevent accidents.
The Company leverages its production capabilities and supply chain across the U.S. while maintaining the capability to support the many local and regional customer requirements. The production facilities and processes are designed to provide a broad, but locally focused product range of residential products, and includes automated roll forming and injection molding, welding, stamping, and finished painting.
The production facilities and processes are designed to provide a broad, but locally focused product range of residential products, and includes automated roll forming and injection molding, welding, stamping, and finished painting. The Company maintains its equipment through daily maintenance and a preventive maintenance program.
Levels of residential and commercial construction can be cyclical and can depend on interest rates, availability of financing, inflation, employment, spending habits, consumer confidence and cost and availability of skilled labor.
Seasonality The Company’s end markets have historically experienced seasonal demand fluctuation, with lower demand typically in the first and fourth quarters. Levels of residential and commercial construction can be cyclical and can depend on interest rates, availability of financing, inflation, employment, spending habits, consumer confidence and cost and availability of skilled labor.
Human Capital - Organization Development The foundation for the Company's focus on organizational development is built on two fundamental beliefs: • The Company's ability to perform and deliver shareholder value is dependent on our people, and • Each member of the Company's team plays an important role in creating an environment where individuals are respected and valued and diverse teams have the best chance to thrive. 9 Table of Contents The Company seeks to support an array of career pathways and life journeys by engaging the entire organization, with areas of focus that include Health and Safety, Education and Development, Diversity and Inclusion, Compensation and Benefits, as well as Communication and Employee Engagement.
Human Capital - Organization Development The foundation for the Company's focus on organizational development is built on two fundamental beliefs: • The Company's ability to perform and deliver shareholder value is dependent on our people, and • Each member of the Company's team plays an important role in creating an environment where individuals are respected, valued and have the opportunities to thrive.
Solar racking systems for carports serve as protection for cars from the effects of the sun and intense heat while providing a renewable energy source. Similarly, solar racking systems installed on idle land, such as solid waste landfills, or on challenging, rocky terrain, converts such land into a useful property by providing clean renewable power generating capabilities.
Similarly, solar racking systems installed on idle land, such as solid waste landfills, or on challenging, rocky terrain, converts such land into a useful 8 Table of Contents property by providing clean renewable power generating capabilities. An eBOS system supports the conversion of captured sunlight to direct current energy.
Organization Development drives the Company’s continuous focus on ensuring it has the right design and structure to scale the organization in order to execute the Company’s plans and meet commitments.
Organization Development drives the Company’s continuous focus on ensuring it has the right design and structure to scale the organization in order to execute the Company’s plans and meet commitments. The 4 Table of Contents Company's focus is on creating an environment for our people to have the best opportunity for success, continue to develop, grow and learn.
The Company's sales process regularly includes a competitive bid process, and its reputation for product and service quality and meeting delivery requirements make the Company a preferred provider for many customers. 8 Table of Contents The Company's marketing focus is to build an enhanced cohesive brand strategy for Gibraltar—ensuring the Company has a defined purpose and values and ensuring the Company's brand messages reflect the needs of the market and the capabilities of its businesses with "We advance the art and science of making and celebrate the people that make life better".
The Company's marketing focus is to build an enhanced cohesive brand strategy for Gibraltar—ensuring the Company has a defined purpose and values and ensuring the Company's brand messages reflect the needs of the market and the capabilities of its businesses with "We advance the art and science of making and celebrate the people that make life better." The Company's customer relationship management systems provides important aggregate market data and visibility into sales account status and enabling cross-sell and up-sell opportunities.
Health and Safety The Company expects each team member of the Company to follow the Company's safety standards and practices, support the Company's key safety initiatives, be accountable to themselves and each other, and be part of safety solutions. The Company believes all accidents and near-misses are preventable as the Company strives to create a zero incident work environment.
The Company expects each team member of the Company to follow the Company's safety standards, best practices, and support the Company's key safety initiatives, The Company expects all team members to be accountable to themselves and each other and collaborate on safety solutions.
The Company's businesses also identify additional safety investments required for training, education, equipment, and processes as part of the Company's annual budget and capital planning procedure. The Company is continuously evolving its crisis management plans as the Company gains experience, reviews industry best practices, and continues to develop more effective tools, processes, and policies.
The Company's businesses also identify additional safety investments required for training, education, equipment, and processes as part of the Company's annual budget and capital planning procedure.
The Company's cluster box mail delivery products provide delivery cost savings to the postal service while offering secure storage for delivered mail and packages.
The Company's cluster box mail delivery products provide delivery cost savings to the postal service while offering secure storage for delivered mail and packages. The Company leverages its production capabilities and supply chain across the United States ("U.S.") while maintaining the capability to support the many local and regional customer requirements.
The Company's mail and electronic package solutions include single mailboxes, cluster style mail and parcel boxes for single and multi-family housing, and electronic package locker systems. The Company's remaining residential product offerings consist of roof edging and flashing, soffits and trim, drywall corner bead, metal roofing and accessories, rain dispersion products, including gutters and accessories, and exterior retractable awnings.
In addition, the Company's residential product offerings consist of mail and package solutions including single mailboxes, cluster style mail and parcel boxes for single and multi-family housing, and package locker systems.
These values include: • Make it better - The Company challenges itself and its way of thinking every day to exceed the needs of the Company's customers. • Make it right - The Company cares about doing the right thing for each other, customers, and communities by holding the Company to the highest standards of ethics and safety. • Make it together - The Company works collaboratively with customers and each other - teamwork sets the Company apart.
We raise the bar - and set new standards. • Make it right - We care about doing the right thing for each other, our customers, and communities by holding ourselves to the highest standards of ethics and safety. • Make it together - We work collaboratively with our customers and each other - teamwork sets us apart.
The Company's operating software enables its team to optimize solar project design utilizing solar irradiance data and topography analysis to quickly and automatically generate multiple potential layouts for complex projects. The single-axis tracker systems support and adapt to a variety of site conditions while also reducing the typical civil work preparation and installation costs associated with projects.
The Company's screw-based racking foundation offers rapid and secure installation on any terrain. The Company's operating software enables its team to optimize solar project design utilizing solar irradiance data and topography analysis to quickly and automatically generate multiple potential layouts for complex projects.
The Company's Customer Relationship Management systems provides important aggregate market data and visibility into sales account status and enabling cross-sell and up-sell opportunities. Backlog Backlog represents the value of the total confirmed orders at a point in time for which performance obligations have not yet been satisfied. Only actual orders with signed contracts are included in the Company's backlog.
Backlog Backlog represents the value of the total confirmed orders at a point in time for which performance obligations have not yet been satisfied. Only actual orders with signed contracts are included in the Company's backlog. This metric is useful as it reflects the committed amount the Company expects to recognize as revenue in the near-term.
The Company maintains its equipment through daily maintenance and a preventive maintenance program. In some cases, the Company sources products from third-party vendors to optimize cost and quality in order to provide the very best and affordable solution for customers.
In some cases, the Company sources products from third-party vendors to optimize cost and quality in order to provide the very best and affordable solution for customers. Renewables The Renewables segment designs, manufactures and installs solar energy mounting systems including foundation, racking, and electrical balance of systems for developers, EPCs and owners / operators of solar fields.
The Company employed 2,097 full-time employees and 13 part-time employees as of December 31, 2023. Of the Company's 2,110 total employees, 796 were classified as salaried and 1,314 classified as hourly. The Company also employed approximately 358 full-time equivalent temporary agency employees.
Of the Company's 2,107 total employees, 747 were classified as salaried and 1,360 classified as hourly. The Company also engaged approximately 270 full-time equivalent temporary agency employees at December 31, 2024 Approximately 8% of the Company's U.S. workforce was represented by unions through two collective bargaining agreements ("CBAs") as of December 31, 2024.
The Company has continued to invest in the Company's safety organization, and implemented a disciplined safety management and reporting process, measuring and reviewing the Company's safety results continuously in each location. The Company's CEO reviews safety performance monthly, including recordable incidents, near misses, and first aid cases.
The Company believes all accidents and near-misses are preventable as the Company strives to create a zero-incident work environment. The Company has continued to invest in the Company's safety organization by implementing a disciplined safety management and reporting process to measure and review the Company's safety results continuously in each location.
This metric is useful as it reflects the committed amount the Company expects to recognize as revenue in the near-term. While the majority of the Company's products have short lead time order cycles, the Company has aggregated approximately $330 million of backlog at December 31, 2023 compared to $299 million at December 31, 2022.
While the majority of the Company's products have short lead time order cycles, the Company has aggregated approximately $250 million of backlog at December 31, 2024. The backlog primarily relates to certain business units in the Company's Renewables, Agtech, and Infrastructure segments.
The patented design eliminates complexities incorporated in traditional systems, simplifying the operations and maintenance of the system, along with streamlining the installation process. Other products offered include solar racking systems for both carports and pile-driven ground mount systems and eBOS.
The single-axis tracker systems support and adapt to a variety of site conditions while also reducing the typical civil work preparation and installation costs associated with projects. The patented design eliminates complexities incorporated in traditional systems, simplifying the operations and maintenance of the system, along with streamlining the installation process.
Approximately 6% of the Company's U.S. workforce was represented by unions through two collective bargaining agreements ("CBAs") as of December 31, 2023. Both of the Company's CBAs will expire and are expected to be renegotiated in 2024. The Company considers its employee relations to be good.
Both of the Company's CBAs were successfully renegotiated in 2024 and one of the CBAs will expire April 30, 2027 and the other will expire March 31, 2028. The Company considers its employee relations to be good. Health and Safety Safety is a top priority.
Removed
In 2023, the Company acquired the assets of a privately held Utah-based company in the Residential segment and sold its Japan-based solar racking business within the Renewables segment to help achieve these objectives. 3 Table of Contents 3.
Added
Every day the Company's choices and actions are governed by its values: • Make it better - We challenge ourselves and our way of thinking every day to exceed the needs of our customers.
Removed
The Company aspires to make its place of work the "Best Place to Work", where focus is on creating an environment for our people to have the best opportunity for success, continue to develop, grow and learn.
Added
Recent Developments On February 11, 2025, the Company purchased all the outstanding stock of Lane Supply, Inc., a privately held company that designs, manufactures and installs structural canopies serving the convenience store, travel center, food retail, and quick serve restaurant markets, for $120 million in an all cash transaction, subject to customary working capital and other adjustments.
Removed
The percentage of the Company's total revenue generated from products and services that were sold directly to the end user was approximately 45% and the Company expects this to grow in future years.
Added
Lane Supply, Inc. will be reported as part of the Company's Agtech segment. On December 17, 2024, the Company sold its electronic locker business within its Residential segment to a third party and received net proceeds of $28 million. Customers and Products The Company's customers are located primarily throughout North America.
Removed
Recent Developments On December 1, 2023, the Company sold its Japan-based solar racking business within its Renewables segment to a third party and received net proceeds of $8.0 million. 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 for $10.4 million.
Added
The Company's residential product offerings consist of roof edging and flashing, soffits and trim, drywall corner bead, metal roofing and accessories, rain dispersion products, including gutters and accessories, and exterior retractable awnings. Each of these product offerings can be sold separately or as part of a system solution.
Removed
No other customer in any segment or segments accounted for more than 10% of the Company's consolidated net sales. Renewables The Renewables segment designs, manufactures and installs solar energy mounting systems including foundation, racking, and electrical balance of systems for developers, EPCs and owners / operators of solar fields.
Added
Recent product development efforts focused on increasing the amount of domestic content in the single-axis tracker system and integrating the Company’s fixed tilt and tracker systems with a leading domestic manufacturer of solar modules. These efforts provide customers a clearer, more flexible route to securing valuable tax credit incentives tied to the domestic content included in solar projects.
Removed
Most of the Company's production is completed using computer numerical control machines, roll forming machines, laser cutters and other fabrication tools.
Added
Other products offered include solar racking systems for both carports and pile-driven ground mount systems and eBOS. Solar racking systems for carports serve as protection for cars from the effects of the sun and intense heat while providing a renewable energy source.
Removed
The Company's electronic parcel lockers systems provide multi-family communities and businesses a secure storage solution to handle both package deliveries and receipt of other goods, along with helping retail businesses and their customers to transact via buy online, pick up in store transactions.
Added
Agtech The Agtech segment provides controlled environmental agriculture solutions for growing fruits, vegetables and flowers, supplies custom greenhouses and structural canopies for research, education, retail and commercial applications.
Removed
New products introduced in recent years extend the infrastructure products into new markets. High speed and traditional rail projects involving elevated structures have created new opportunities in recent years. Engineered pavement sealants for roadways are commonly used in airport runways, for both existing runways and expansion projects.
Added
The Infrastructure Investment and Jobs Act has been the main funding source since 2022 with a five-year mission to modernize our nation’s infrastructure. The Infrastructure segment has been a benefactor of the additional funding that has driven expansion in highway, bridge, and airport markets.
Removed
Its corrosion-protection products for cable-suspension bridges are now marketed and sold internationally and have been used on numerous signature bridges.
Added
The Company continues to expand into adjacent markets such as bridge protection systems, high speed and traditional rail, and telecom.
Removed
In addition, the businesses in the Company's Renewables segment were integrated and rebranded under the brand name Terrasmart at the beginning of 2022 and the Company's businesses in its Agtech segment were consolidated under the brand name Prospiant during 2021. In their markets, both brands reflect the Company's unique value to customers.
Added
The Company purchases natural gas and electricity from suppliers in proximity to its operations. 9 Table of Contents Intellectual Property The Company actively protects its proprietary rights by the use of trademark, copyright, and patent registrations.
Removed
The Company believes demonstrating respect for our people and valuing their perspectives and their contributions is critical to cultivating the Company's best and most successful work environment. Key demographics for the Company's employees are shown below.
Added
The Company's sales process regularly includes a competitive bid process, and its reputation for product and service quality and meeting delivery requirements make the Company a preferred provider for many customers.
Removed
The Company recognizes that its organization and the communities in which the Company operates will continue to evolve and grow, which will require that the Company remain focused on the following initiatives: • Continue the Company's mandatory and annual education and development program for the Company, including the Board of Directors, and evolve the curriculum as needed • Continue to map the Company's organization with the communities where it operates and strive to reflect the diversity of these communities in the Company's team • Implement and upgrade business systems across the Company to give the Company the capability to gather and analyze data, derive conclusions, and develop action plans for implementation • Communicate the Company's progress through monthly business reviews with the Company's leadership teams, quarterly communications with its teams, and quarterly reviews with the Company's Board of Directors • Build the most effective talent acquisition framework to attract the best people and extend training and development opportunities through a combination of on-the-job experiences, peer connections as well as classroom and self-paced learning. • Be proactive with the Company's customers and supply chain partners to find ways to work together in promoting positive social development Leadership Development In 2022, the Company launched a reimagined leadership development program to better equip our mid- and senior-level leaders with modern tools and tactics to best foster collaboration and success within its workforce.
Added
The Company seeks to support an array of career pathways and life journeys by engaging the entire organization, with areas of focus that include Health and Safety, Learning and Development, Diversity and Inclusion, Compensation and Benefits, as well as Communication and Employee Engagement. The Company employed 2,097 full-time employees and 10 part-time employees at December 31, 2024.
Removed
The basis of the program now includes multiple learning paths to meet the development needs of employees at all levels, including ethics compliance, leadership development, continuous improvement, diversity & inclusion, and function-specific learning and certification programs.
Added
Key workforce demographics as of December 31, 2024 are shown in the tables below.
Removed
The Gibraltar Leadership Program ("GLP") core curriculum is a two-day program with modules on servant leadership, skilled collaboration, accountability at work, taking control of conflict, emotional intelligence, and communicating as a manager.
Added
The Company's leaders have access to courses and application tools for a variety of situations including Goal-Setting, Problem-Solving, Receiving and Delivering Feedback, Delegating, Leading through Change, Time Management, and Behavior-based Interviewing among other topics.
Removed
In 2022, 194 leaders from across the business units participated in the GLP, followed by 146 leaders in 2023. 11 Table of Contents In addition, the Company maintains its commitment to ethical leadership with quarterly ethics training for all employees.
Added
The contents of the Company's website or any other website referenced are not a part of this Annual Report on Form 10-K. 12 Table of Contents

… 3 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

35 edited+38 added−28 removed63 unchanged
Biggest changeFurthermore, the failure of any sourced raw materials or components to conform to the Company's specifications could also result in delays in its ability to timely deliver, and may have an adverse impact on the Company's relationships with its customers and its ability to fully realize the revenue expected from sales to those customers. 12 Table of Contents In addition, commodity price fluctuations could force the Company to adjust its prices or to offer additional services or enhanced products at a higher cost to the Company, which could reduce the Company's gross profit, net income, and cash flow and cause the Company to lose market share.
Biggest changeFurthermore, the failure of any sourced raw materials or components to conform to the Company's specifications could also result in delays in its ability to timely deliver and may have an adverse impact on the Company's relationships with its customers and its ability to fully realize the revenue expected from sales to those customers.
If the Company is unable to implement its cost savings initiatives as timely and/or effectively as planned, the Company's business may be adversely affected by the negative impact on the Company's ability to continue to meet customer demand, maintain a high level of quality throughout the execution of the plans, and achieve the anticipated financial benefits of such plans.
If the Company is unable to implement its cost savings initiatives or is unable to implement them as timely and/or effectively as planned, the Company's business may be adversely affected by the negative impact on the Company's ability to continue to meet customer demand, maintain a high level of quality throughout the execution of the plans, and achieve the anticipated financial benefits of such plans.
The Company may need to incur additional debt in the future to fund strategic acquisitions, investments or for other purposes, which debt could have significant adverse consequences to the Company's business. Any sustained weakness in general economic conditions and/or U.S. or global capital markets could adversely affect the Company’s ability to raise capital on favorable terms or at all.
The Company may need to incur debt in the future to fund strategic acquisitions, investments or for other purposes, which debt could have significant adverse consequences to the Company's business. Any sustained weakness in general economic conditions and/or U.S. or global capital markets could adversely affect the Company’s ability to raise capital on favorable terms or at all.
The nature of the Company's business exposes the Company to product liability, product warranty and other claims, and other legal proceedings and could adversely affect the Company's business, financial condition, results of operations, and cash flows. The Company is a party in product liability, product warranty and other claims relating to the products the Company manufactured and distributed.
The nature of the Company's business exposes the Company to product liability and other claims, and other legal proceedings and could adversely affect the Company's business, financial condition, results of operations, and cash flows. The Company is a party in product liability and other claims relating to the products the Company manufactured and distributed.
The unexpected loss of a member of the Company's senior management team, key employee or highly-skilled associate, including due to an increase in aggressive recruiting for talent in the current labor market, or the Company's inability to attract and retain additional personnel could deplete the Company's institutional knowledge base, erode the Company's competitiveness and prevent the Company from successfully executing its business strategy.
The unexpected loss of a member of the Company's senior management team, key employee or highly-skilled associate, including due to aggressive recruiting for talent in the current labor market, or the Company's inability to attract and retain additional personnel could deplete the Company's institutional knowledge base, erode the Company's competitiveness and prevent the Company from successfully executing its business strategy.
The Company cannot provide assurance that the Company's internal controls and compliance systems, including the Company's Code of Ethics and Statement of Policy, will protect the Company from acts committed by the Company's employees, agents or business partners that violate U.S. and/or non-U.S. laws, including the laws governing payments to government officials, bribery, fraud, kickbacks and false claims, pricing, sales and marketing practices, conflicts of interest, competition, employment practices, workplace behavior, export and import compliance, economic and trade sanctions, money laundering and data privacy.
The Company cannot provide 20 Table of Contents assurance that the Company's internal controls and compliance systems, including the Company's Code of Ethics and Statement of Policy, will protect the Company from acts committed by the Company's employees, agents or business partners that violate U.S. and/or non-U.S. laws, including the laws governing payments to government officials, bribery, fraud, kickbacks and false claims, pricing, sales and marketing practices, conflicts of interest, competition, employment practices, workplace behavior, export and import compliance, economic and trade sanctions, money laundering and data privacy.
Risks Related to Legal and Regulatory Matters Imposed tariffs and potential future tariffs may result in increased costs and could adversely affect the Company's results of operations. Tariffs imposed in the United States on certain steel and aluminum products imported into the U.S. have created volatility in the market and have increased the costs of these inputs.
Risks Related to Legal and Regulatory Matters Imposed tariffs and potential future tariffs may result in increased costs and could adversely affect the Company's results of operations. Tariffs imposed in the U.S. on certain steel and aluminum products imported into the U.S. have created volatility in the market and have increased the costs of these inputs.
The Company competes in its principal markets with companies of various sizes, some of which have greater scale, access to capital and other resources than the Company, as well as may have more established brand names and may be better able to withstand a change in conditions in the principal markets the Company serves.
The Company competes in its principal markets with companies of various sizes, some of which have greater scale, access to capital and other resources than the Company, and may have more established brand names and may be better able to withstand a change in conditions in the principal markets the Company serves.
Legislative and regulatory changes in response to the potential effects of climate change may require additional costs and investment for compliance, including an increase in the Company's capital expenditures to reduce the 15 Table of Contents Company's greenhouse gas emissions and increased cost of purchased energy for both the Company and its suppliers, which may increase the Company's costs to procure raw materials, components or equipment parts.
Legislative and regulatory changes in response to the potential effects of climate change may require additional costs and investment for compliance, including an increase in the Company's capital expenditures to reduce the Company's greenhouse gas emissions and increased cost of purchased energy for both the Company and its suppliers, which may increase the Company's costs to procure raw materials, components or equipment parts.
Product liability claims could be expensive to defend and could divert the attention of the Company's management and other personnel for significant periods of time, regardless of the ultimate outcome. Claims of this nature could also have a negative 18 Table of Contents impact on customer confidence in the Company's products, the Company's brands and the Company.
Product liability claims could be expensive to defend and could divert the attention of the Company's management and other personnel for significant periods of time, regardless of the ultimate outcome. Claims of this nature could also have a negative impact on customer confidence in the Company's products, the Company's brands and the Company.
Some of the Company's construction contracts with customers involve subcontracts with other companies that perform a portion of the services or provide systems that are integral to the end product that the Company provides 14 Table of Contents to its customers. The Company depends on the quality and timeliness of work performed by its subcontractors.
Some of the Company's construction contracts with customers involve subcontracts with other companies that perform a portion of the services or provide systems that are integral to the end product that the Company provides to its customers. The Company depends on the quality and timeliness of work performed by its subcontractors.
The success of the Company's business depends on the Company's senior management team, as well as other key employees and the Company's ability to attract, retain, develop and motivate a skilled and diverse workforce. 13 Table of Contents The Company's success is dependent on the management and leadership skills of its senior executive and divisional management teams.
The success of the Company's business depends on the Company's senior management team, as well as other key employees and the Company's ability to attract, retain, develop and motivate a skilled and diverse workforce. The Company's success is dependent on the management and leadership skills of its senior executive and divisional management teams.
While, the Company maintains IT measures designed to protect the Company against intellectual property theft, data breaches, sabotage and other external or internal cyber-attacks or misappropriation, cyber-attacks are increasingly difficult to identify and prevent, and it is possible that potential vulnerabilities could go undetected for an extended period.
While, the Company maintains IT measures designed to protect the Company against intellectual property theft, data breaches, sabotage and other external or internal cyber-attacks or misappropriation, cyber-attacks are increasingly difficult to identify and prevent, 17 Table of Contents and it is possible that potential vulnerabilities could go undetected for an extended period.
The tariffs could adversely affect the Company's income from operations for some of the Company's businesses and customer demand for some of the Company's products which could have a material adverse effect on the Company's results of operations, financial position and cash flows.
The tariffs could adversely affect the 19 Table of Contents Company's income from operations for some of the Company's businesses and customer demand for some of the Company's products which could have a material adverse effect on the Company's results of operations, financial position and cash flows.
The failure by the Company's suppliers to deliver raw materials or component parts according to schedule, or at all, has resulted in manufacturing delays, capacity constraints, project delays, cost inflation and logistics delays and has affected, and may continue to affect the Company's ability to meet its customers' needs.
Failures by the Company's suppliers to deliver raw materials or component parts according to schedule, or at all, have resulted in manufacturing delays, capacity constraints, project delays, cost inflation and logistics delays and has affected, and may affect the Company's ability to meet its customers' needs.
The 17 Table of Contents Company’s access to funds under its credit facility is dependent on the ability of the financial institutions that are parties to that facility to meet their funding commitments.
The Company’s access to funds under its credit facility is dependent on the ability of the financial institutions that are parties to that facility to meet their funding commitments.
The Company faces changing market conditions, as well as changes in domestic or global economies, or certain industry sectors of those economies that are key to the Company's sales, may further deteriorate, and could result in a corresponding decrease in demand for the Company's products and negatively impact the Company's results of operations and financial condition.
Market conditions, as well as domestic or global economies, or certain industry sectors of those economies that are key to the Company's sales, may deteriorate, and could result in a corresponding decrease in demand for the Company's products and negatively impact the Company's results of operations and financial condition.
However, the Company cannot provide any assurance that the following risks involved in completing acquisitions will not occur nor adversely impact the Company's operations and financial results: • Failure to identify appropriate acquisition candidates, or, if the Company does, failure to successfully negotiate the terms of an acquisition; • Diversion of senior management’s attention from existing business activities; • Failure to integrate any acquisition into the Company's operations successfully; • Unforeseen obligations, loss of key customers, suppliers, and employees of the acquired businesses, or loss of existing customers and suppliers; • Difficulties or delays in integrating and assimilating information and systems that may require significant unforeseen upgrades or replacement of the Company's primary IT systems across significant parts of the Company's business and operations, which could lead to interruptions of information flow internally and to the Company's customers and suppliers; • The need to raise additional funds through additional equity or debt financing, which could be dilutive to stockholder value, increase the Company's interest expense and reduce the Company's cash flows and available funds; and • Adverse impact on overall profitability if the acquired business does not achieve the return on investment projected at the time of acquisition.
However, the Company cannot provide any assurance that the following risks involved in completing acquisitions will not occur nor adversely impact the Company's operations and financial results: • Failure to identify appropriate acquisition candidates, or, if the Company does, failure to successfully negotiate the terms of an acquisition; • Diversion of senior management’s attention from existing business activities; • Failure to integrate any acquisition into the Company's operations successfully; • Unforeseen obligations, loss of key customers, suppliers, and employees of the acquired businesses, or loss of existing customers and suppliers; • Difficulties or delays in integrating and assimilating information and systems that may require significant unforeseen upgrades or replacement of the Company's primary IT systems across significant parts of the Company's business and operations, which could lead to interruptions of information flow internally and to the Company's customers and suppliers; • The need to raise additional funds through additional equity or debt financing, which could be dilutive to stockholder value, increase the Company's interest expense and reduce the Company's cash flows and available funds; and • Adverse impact on overall profitability if the acquired business does not achieve the return on investment projected at the time of acquisition. 18 Table of Contents Risks Related to Financing and Accounting Matters The Company provides product warranties and, if the Company's product warranty obligations were significantly in excess of its reserves, the Company's business, financial condition and results of operations could be materially and adversely affected.
As of December 31, 2023, the Company had no outstanding indebtedness, but has $396.1 million available for borrowing under its revolving credit facility.
As of December 31, 2024, the Company had no outstanding indebtedness, but has $395.1 million available for borrowing under its revolving credit facility.
Compliance with 16 Table of Contents the varying data privacy regulations across the United States and around the world has required and will continue to require significant expenditures. Further, there is increasing regulation regarding responses to cybersecurity incidents, including reporting to regulators, which could subject us to additional liability and reputational harm.
Compliance with the varying data privacy regulations across the U.S. and around the world has required and will continue to require significant expenditures. Further, there is increasing regulation regarding responses to cybersecurity incidents, including reporting to regulators, which could subject us to additional liability and reputational harm.
The Company's ten largest customers accounted for approximately 37%, 41%, and 38% of the Company's net sales during 2023, 2022, and 2021, respectively, with its largest customer accounting for approximately 13%, 14% and 13% of the Company's consolidated net sales during each of the years 2023, 2022, and 2021, respectively.
The Company's ten largest customers accounted for approximately 38%, 37%, and 41% of the Company's net sales during 2024, 2023, and 2022, respectively, with its largest customer accounting for approximately 12%, 13% and 14% of the Company's consolidated net sales during each of the years 2024, 2023, 15 Table of Contents and 2022, respectively.
Risks Related to the Company's Business Operations The volatility of the commodity market with respect to the Company's principal raw materials and component parts, or substantial decreases in the availability of the Company's principal raw materials and component parts, has impacted, and could continue to impact, the Company's business, results of operations, and cash flows.
The volatility of the commodity market with respect to the Company's principal raw materials and component parts and inconsistencies in the availability of the Company's principal raw materials and component parts, has impacted, and could continue to impact, the Company's business, results of operations, and cash flows.
The Company also purchases component parts such as glass for greenhouse roofing systems thus resulting in exposure to changes in the price and availability of glass, and furthermore, although not purchased by the Company, the Company also has exposure related to the availability of solar modules which has impacted the installation of, and which can and has reduced demand for, the Company's solar racking projects, as experienced in 2022 and 2023.
Furthermore, although not purchased by the Company, the Company also has exposure related to the availability of solar modules which has impacted the installation of, and which can and has reduced demand for, the Company's solar racking projects, as experienced in 2022, 2023 and 2024.
Demand for the Company's products could be adversely impacted if the Company does not meet the above standards in order to enable its customer to obtain the full enhanced tax credits.
Demand for the Company's products could be adversely impacted if the Company does not meet the above standards in order to enable its customer to obtain the full enhanced tax credits. The Company is subject to litigation and legal proceedings and may be subject to additional litigation, arbitration or legal proceedings in the future.
In reference to aforementioned tariffs on imported solar modules, while the Company does not sell or import solar modules, the goods and services the Company provides for its customers depend upon the supply of solar modules for which such shortages have resulted in project delays over the past two years.
Furthermore, while the Company does not sell or import solar modules, the goods and services the Company provides for its customers in the Renewables segment depends upon the supply of solar modules for which such shortages or import challenges have resulted in project delays over the past three years.
Macroeconomic factors outside of the Company's control may adversely affect its business, its industry, and the businesses and industries of many of its customers and suppliers. Macroeconomic factors can have and have had a significant impact on the Company's business, customer demand and the availability of credit and other capital, affecting the Company's ability to generate profitable margins.
Macroeconomic factors can have and have had a significant impact on the Company's business, customer demand and the availability of credit and other capital, affecting the Company's ability to generate profitable margins.
The Company has not entered into employment agreements with any of its senior management personnel. Additionally, the Company may not be able to successfully compete for, attract, retain, develop or motivate a skilled and diverse workforce that the Company's business may require.
Additionally, the Company may not be able to successfully compete for, attract, retain, develop or motivate a skilled and diverse workforce that the Company's business may require.
Tariffs placed on imported products used by the Company's customers, such as solar modules, could impact cost and availability of these products to the Company's customers which could impact the demand for the Company's products or services. In addition, fluctuations in the U.S. dollar impact the prices the Company charges and costs it incurs to export and import products.
Tariffs placed on imported products used by the Company's customers, such as solar modules, have and could continue to affect cost and availability of these products to the Company's customers which could impact the demand for the Company's products or services.
The Company is unable to predict the impact on its business of changes in domestic and international economic conditions.
In addition, fluctuations in the U.S. dollar impact the prices the Company charges and costs it incurs to export and import products. The Company is unable to predict the impact on its business of changes in domestic and international economic conditions.
Concerns over global climate change and environmental sustainability over time, including due to expectations of the Company's stockholders, customers and employees, may influence the Company's strategic direction, supply chain, or delivery channels. Future terror attacks, war, natural disasters or other catastrophic events beyond the Company's control could negatively impact the Company's business, results of operations, and cash flows.
Concerns over global climate change and environmental sustainability over time, including due to expectations of the Company's stockholders, customers and employees, may influence the Company's strategic direction, supply chain, or delivery channels. Any legislative or regulatory requirements that relate to the Company's business could be significant and may adversely affect the Company's business and results of operations.
The Company has experienced operating disruptions related to severe weather across the U.S. From time to time, terrorist attacks worldwide have caused instability in global financial markets.
The Company has experienced operating disruptions related to severe weather across the U.S. From time to time, terrorist attacks worldwide have caused instability in global financial markets. The Company continues to monitor the ongoing conflict between Russia and Ukraine, as well as other conflicts, including the ongoing conflicts in the Middle East, for any potential disruptions to the Company's operations.
Climate change and climate change legislation or regulations may adversely affect the Company's business and results of operations.
This may result in a material adverse effect on the Company's business, results of operations and financial condition. 16 Table of Contents Climate change and climate change legislation or regulations may adversely affect the Company's business and results of operations.
The Company's business is highly competitive and increased competition could reduce the Company's revenue, gross profit, net income, and cash flows. The principal markets that the Company serves are highly competitive. Competition is based primarily on product functionality, quality, price, raw material and inventory availability, as well as the ability to meet delivery schedules dictated by customers.
Each of the Company's segments operates in a highly competitive business environment and encounters a high degree of competition from a number of competitors. Competition is based primarily on product functionality, quality, price, raw material and inventory availability, as well as the ability to meet delivery and construction schedules dictated by customers.
The Company's principal raw materials are commodity products primarily consisting of steel, aluminum, and resins.
The Company's principal raw materials are commodity products primarily consisting of steel, aluminum, and resins. The Company also purchases component parts such as glass for greenhouse roofing systems. As a result, the Company is exposed to changes in the price and availability of steel, aluminum, resins and glass.
This may result in a material adverse effect on the Company's business, results of operations and financial condition. Economic, political, and other risks associated with foreign operations could adversely affect the Company's results of operations and cash flows.
Material warranty obligations, including, but not limited to, those in excess of the Company’s reserves, could have a material adverse effect on the Company’s business, financial condition and results of operations.
Removed
The supply has been primarily impacted by two regulatory items: the Uyghur Forced Labor Prevention Act ("UFLPA") which was enacted in June 2022, and the circumvention of anti-dumping and countervailing duties (“AD/CVD”) investigation launched by the U.S. Department of Commerce ("USDOC") in March 2022, against eight solar module manufacturers producing in four countries in Southeast Asia.
Added
Risks Related to the Company's Business Operations Macroeconomic factors outside of the Company's control may adversely affect its business, its industry, and the businesses and industries of many of its customers and suppliers.
Removed
The UFLPA requires traceability of components of imported goods to validate components are not sourced from the Xinjiang province in China. This requirement has caused delays in module availability as module manufacturers must follow a stringent importation process with the U.S. Custom and Border Protection Agency.
Added
In addition, commodity price fluctuations can and have resulted in the Company adjusting its prices or to offer additional services or enhanced products at a higher cost to the Company, which could reduce the Company's gross profit, net income, and cash flow and cause the Company to lose market share. 13 Table of Contents The Company is subject to the risk of tariffs and other restrictions on import of solar modules, which have adversely affected and may continue to adversely affect its Renewables business.
Removed
While a few of the larger module manufacturers are experiencing more consistent success with the importation process, other module suppliers need to make further progress with UFLPA and the importation process.
Added
The supply has been primarily impacted by two regulatory items relative to anti-dumping and countervailing duties and importation requirements for sourcing of solar modules. While these have lessened over the past year, they have impacted the timing and progress of the Company's customers' projects.
Removed
The UFLPA continues to create a compliance burden and constrain supply of imported solar modules, but the Company expects continual improvement of supply as more module manufacturers move forward on the learning curve.
Added
As a result, the Company's operating results have been and could be further adversely impacted by an additional determinations or additional claims and investigations initiated by government.
Removed
As a result of the USDOC’s AD/CVD investigation, and until the final ruling from the USDOC was announced in August 2023, projects were delayed due to the risk of retroactive tariffs being imposed on the import of solar modules produced in four countries in Southeast Asia, where Chinese manufacturers have operations.
Added
Demand for the Company's products in its Residential segment is significantly influenced by general economic conditions and trends in consumer spending on living spaces and home exteriors, and adverse trends in, among other things, inflation, interest rates, the health of the economy, repair and remodel and new construction activity, industrial production, consumer confidence and discretionary spending and institutional funding constraints could have a material adverse effect on the Company's business.
Removed
In addition, of the eight major manufacturers under investigation, five were found to have been circumventing the AD/CVD orders. In parallel to the USDOC investigation, on June 6, 2022, an emergency Presidential Proclamation was issued delaying the imposition of duties on imports from the impacted countries until June 6, 2024.
Added
Demand for products in the Company’s Residential segment is significantly influenced by a number of economic factors affecting its customers, including distributors, dealers, retailers, contractors, architects, builders, homeowners and institutional and commercial consumers.
Removed
This proclamation provides non-U.S. based module manufacturers time to modify and secure supply chains to ensure compliance with U.S. law. In January 2024, a motion was filed requesting that the delay in the imposition of duties per the Presidential Proclamation be removed retroactively which could adversely impact the supply of modules imported into the U.S.
Added
Demand for products in the Company’s Residential segment depends on the level of residential improvement and renovation and new construction activity, and, in particular, the amount of spending on living spaces and home exteriors.
Removed
As the timing and progress of many of the Company's customers’ projects depend upon the supply of solar modules and components, the Company's operating results have been impacted by the disruption resulting from the above investigation and validation procedures.
Added
Home and commercial renovation and improvement and new construction activity are affected by, among other things, interest rates, consumer confidence and spending habits, demographic trends, housing affordability levels, unemployment rates, institutional funding constraints, industrial production levels, tariffs, actual inflation levels and uncertainty with respect to future inflation levels, recession possibility and general economic conditions.
Removed
The Company's operating results could be further adversely impacted by any final negative circumvention determinations made by the USDOC and continued timing lag of review by U.S. customs.
Added
Demand for products in the Company’s Residential segment depends primarily on the level of repair and remodel activity and, to a lesser extent, new construction activity, which are in turn impacted by interest rates and inflation.
Removed
The Company's operations are subject to seasonal fluctuations and the cyclical nature of construction activity that may affect the Company's cash flows. The Company's net sales are generally lowest in the first quarter primarily as a result of reduced activity in the construction industry due to inclement weather.
Added
The combination of high interest rates and high inflation in recent years has reduced the affordability of mortgages and increased the cost of home improvement projects.
Removed
Therefore, the Company's cash flows from operations may vary from quarter to quarter. Furthermore, construction activity has historically been cyclical and dependent on economic conditions, including interest rates, availability of financing, inflation, employment, spending habits, consumer confidence and other factors outside the Company's control.
Added
These trends could and may have resulted in reduced levels of repair and remodel as well as new construction activity and demand for the Company’s products, and, while inflation levels have moderated in recent months, the Company anticipates that these trends may continue for the foreseeable future.
Removed
Residential and commercial construction is also affected by the cost and availability of skilled labor, which could impact both the cost and pace of construction activity, as well as the construction methods used, all of which could adversely affect demand for the Company's products.
Added
While home prices and equity levels of current homeowners remained strong throughout 2024, elevated interest rates could cause home prices to decrease and a weakness or reduction in home prices may result in a decreased demand for the Company’s residential products.
Removed
If the Company's cash flows were significantly reduced due to seasonal fluctuations or reduced construction activity, the Company may not be able to service its indebtedness or maintain covenant compliance.
Added
The Company cannot predict if or when interest rates or inflation levels will decline or, once they have declined, if they will remain low, or the impact that any such decline may have on home prices, repair and remodel activity, new construction activity, demand for the Company’s products, the Company’s business generally or its financial condition.
Removed
Although a significant majority of the Company's business activity takes place in the United States, the Company derives a portion of its revenues and earnings from operations in Canada, and is subject to risks associated with doing business internationally.
Added
Adverse trends in any of the foregoing factors could reduce the Company’s sales and have a material adverse effect on the Company’s business, financial condition and results of operations. Such factors could also alter the balance of the Company’s sales among its segments.
Removed
The Company's sales originating outside the United States represented approximately 3% of the Company's consolidated net sales during the year ended December 31, 2023.
Added
The Company’s business would suffer if the Company does not effectively manage its manufacturing processes, including, without limitation, adjusting production to meet demand, integrating new manufacturing facilities, and achieving cost-savings initiatives.
Removed
The Company believes that its business activities outside of the United States involve a higher degree of risk than the Company's domestic activities, such as the possibility of unfavorable circumstances arising from host country laws or regulations, changes in tariff and trade barriers and import or export licensing requirements and exposes the Company to currency exchange rate fluctuations between the United States Dollar and foreign currencies.
Added
The Company continually reviews its manufacturing operations in an effort to achieve increased manufacturing efficiencies, to integrate new technologies and to address changes in its product lines and in-market demand.
Removed
In addition, any local or global health issue or uncertain political climates, international hostilities, natural disasters, or any terrorist activities could adversely affect customer demand, the Company's operations and the Company's ability to source and deliver products and services to the Company's customers.
Added
Periodic manufacturing integrations, realignments and cost-savings programs and other changes have adversely affected, and could in the future adversely affect, its operating efficiency and results of operations during the periods in which such programs are being implemented.
Removed
The Company continues to monitor the ongoing conflict between Russia and Ukraine, as well as other conflicts, including between Israel and Hamas and in the Red Sea, for any potential disruptions to the Company's operations.
Added
Such programs may include the addition of manufacturing lines and the consolidation, integration and upgrading of facilities, functions, systems and procedures, including the introduction of new manufacturing technologies and product innovations. These programs involve substantial planning, often require capital investments, and may result in charges for fixed asset impairments or obsolescence and substantial severance costs.
Removed
Risks Related to Financing and Accounting Matters The Company applies judgments and makes estimates in accounting for certain customer contracts, and changes in these judgments or estimates may have significant impacts on the Company's earnings.
Added
The Company’s ability to achieve cost savings or other benefits within the time 14 Table of Contents frames the Company anticipates is subject to many estimates and assumptions, a number of which are subject to significant economic, competitive and other uncertainties.
Removed
Changes in judgments or required estimates and any subsequent adjustments to those judgments or estimates, such as performance incentives, penalties, contract claims and contract modifications, could have a material effect on the Company's sales and profits.
Added
While the Company anticipates that enhancing these capabilities will ultimately decrease its costs, the introduction of these capabilities has required significant initial investment, and the Company cannot be certain it will realize the benefits of this initiative when anticipated or at all.
Removed
Due to the substantial judgments applied and estimations involved with the Company's accounting for customer contracts, the Company's actual results could differ materially or could be settled unfavorably from the Company's estimates. Revenue representing 35%, 40% and 47% of 2023, 2022 and 2021 of the Company's consolidated net sales, respectively, were recognized over time under the cost-to-cost method.
Added
If these investments and other changes are not effectively integrated into the Company’s manufacturing processes, the Company may suffer from production delays, lower efficiency and manufacturing yields, increased costs and reduced net sales.
Removed
Refer to “Critical Accounting Estimates” within Item 7 of this Annual Report on Form 10-K for more detail of how the Company's financial statements can be affected by accounting for revenue from contracts with customers.
Added
The Company also faces risks in starting up new manufacturing facilities, including with respect to expanding its overall production capacity as well as moving production to such new facilities, that could increase costs, divert management attention and reduce the Company’s operating results.
Removed
In the ordinary course of business, the Company is also subject to other types of legal and regulatory proceedings. Any claims raised in legal and regulatory proceedings, whether with or without merit, could be time consuming and expensive to defend and could divert the Company's management attention and resources.

… 21 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

5 edited+0 added−0 removed11 unchanged
Biggest changeThe Company engages leading cybersecurity firms to assist with its security engineering and operations; provide independent evaluations of its security posture through regular assessment, penetration testing, or ethical hacking; and to audit and provide advice on how to make its security operations and controls more effective.
Biggest changeThe Company engages leading cybersecurity firms to assist with its security engineering and operations; provide independent evaluations of its security posture through regular assessment, penetration testing, or ethical hacking; and to audit and provide advice on how to make its security operations and controls more effective. 21 Table of Contents Furthermore, the Company utilizes third-party service providers to perform a variety of functions to assist in operating the business.
Whether it is through the Company's monthly company-wide cyber training; its frequent in-house phishing exercises, regular tabletop exercises with the Company's Board of Directors, management, and employees; or its annual cyber business continuity planning sessions, the Company strives to provide education so its employees can be a positive force in the protection of the Company's systems.
Whether it is through the Company's monthly company-wide cyber training; its frequent in-house phishing exercises, regular tabletop exercises with the Company's Board of Directors, management, and employees; or its cyber business continuity planning sessions, the Company strives to provide education so its employees can be a positive force in the protection of the Company's systems.
The mission of the Company's cybersecurity team is to focus on defining and deploying its information security strategy, sustaining a robust employee cyber awareness and training program, executing security engineering, providing continuous monitoring of its operations, responding and coordinating the response and investigation of cyber threats, building and testing its disaster recovery plans in support of its businesses’ continuity plan requirements, and developing its cyber and information security policies.
The mission of the Company's cybersecurity team is to focus on defining and deploying its information security strategy, sustaining a robust employee cyber awareness and training program, executing security engineering, providing continuous monitoring of its operations, responding and coordinating the response and investigation of cyber incidents, building and testing its disaster recovery plans in support of its businesses’ continuity plan requirements, and developing its cyber and information security policies.
Notwithstanding the focus and emphasis on cybersecurity, the Company has experienced and will continue to experience cybersecurity incidents. While prior incidents have not had a material effect on the Company's business, 20 Table of Contents there can be no guarantee that the Company will not experience a future incident that does have a material effect on its business.
Notwithstanding the focus and emphasis on cybersecurity, the Company has experienced and will continue to experience cybersecurity incidents. While prior incidents have not had a material effect on the Company's business, there can be no guarantee that the Company will not experience a future incident that does have a material effect on its business.
Furthermore, the Company utilizes third-party service providers to perform a variety of functions to assist in operating the business. The cybersecurity risks associated with the use of certain providers are covered under a vendor management process.
The cybersecurity risks associated with the use of certain providers are covered under a vendor management process.

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−0 removed1 unchanged
Biggest changeThe number, type, location and classification of the properties used by the Company's operations by segment and corporate as of December 31, 2023, were as follows: Number and Type of Properties Plant Distribution Center Office Total Renewables 4 1 2 7 Agtech 3 — 1 4 Residential 14 — 1 15 Infrastructure 2 — — 2 Corporate — — 2 2 Total 23 1 6 30 Location of Properties Classification of Properties Domestic Foreign Owned Leased Renewables 7 — — 7 Agtech 2 2 1 3 Residential 15 — 5 10 Infrastructure 2 — 2 — Corporate 2 — — 2 Total 28 2 8 22 The Company believes that its properties are effectively utilized, well maintained, in good condition, and will be able to accommodate the Company's capacity needs to meet current levels of demand.
Biggest changeThe number, type, location and classification of the properties used by the Company's operations by segment and corporate as of December 31, 2024, were as follows: Number and Type of Properties Plant Distribution Center Office Total Residential 15 — 1 16 Renewables 3 2 1 6 Agtech 3 — 1 4 Infrastructure 2 — — 2 Corporate — — 2 2 Total 23 2 5 30 Location of Properties Classification of Properties Domestic Foreign Owned Leased Residential 16 — 5 11 Renewables 6 — — 6 Agtech 2 2 1 3 Infrastructure 2 — 2 — Corporate 2 — — 2 Total 28 2 8 22 The Company believes that its properties are effectively utilized, well maintained, in good condition, and will be able to accommodate the Company's capacity needs to meet current levels of demand.
In addition, the Company believes that its properties are located to optimize customer service, market requirements, distribution capability and freight costs.
In addition, the Company 22 Table of Contents believes that its properties are located to optimize customer service, market requirements, distribution capability and freight costs.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed2 unchanged
Biggest changeSee Note 19 to the Company's consolidated financial statements in Part II, Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for further information.
Biggest changeSee Note 15 to the Company's consolidated financial statements in Part II, Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for further information.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+1 added−0 removed1 unchanged
Biggest changeThe Company did not purchase shares during the quarter ended December 31, 2023 and the dollar value of shares that may yet be purchased under the program was $88,943,472. The Company did not sell unregistered equity securities during the period covered by this report.
Biggest changeIssuer Purchases of Equity Securities Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Program Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program October 1 - 31, 2024 15,369 $ 64.98 15,369 $ 78,958,152 November 1 - 30, 2024 — $ — — $ 78,958,152 December 1 - 31, 2024 — $ — — $ 78,958,152 Total 15,369 $ 64.98 15,369 The Company did not sell unregistered equity securities during the period covered by this report.
The Company intends to use cash generated by operations to reinvest in the businesses, fund acquisitions and to repurchase stock. The Company's disclosure in Note 9 of the Company’s audited consolidated financial statements included in Item 8 of this Annual Report on Form 10-K provide additional information regarding restrictions on potential capital distributions.
The Company intends to use cash generated by operations to reinvest in the businesses, fund acquisitions and to repurchase stock. The Company's disclosure in Note 8 of the Company’s audited consolidated financial statements included in Item 8 of this Annual Report on Form 10-K provide additional information regarding restrictions on potential capital distributions.
However, the Company believes that it has a significantly higher number of beneficial owners because of the number of shares that are held through banks, brokers, and other financial institutions. The Company did not declare any cash dividends during the years ended December 31, 2023 and 2022 and does not expect to pay any in the foreseeable future.
However, the Company believes that it has a significantly higher number of beneficial owners because of the number of shares that are held through banks, brokers, and other financial institutions. The Company did not declare any cash dividends during the years ended December 31, 2024 and 2023 and does not expect to pay any in the foreseeable future.
Repurchases may be made, from time to time, in amounts and at prices the Company deems appropriate, subject to market conditions, applicable legal requirements, debt covenants and other considerations. Any such repurchases may be executed using open market purchases, privately negotiated agreements or other transactions. The repurchase program may be suspended or discontinued at any time at the Company's discretion.
Repurchases may be made, from time to time, in amounts and at prices the Company deems appropriate, subject to market conditions, applicable legal requirements, debt covenants and other considerations. Any such repurchases may be executed using open market purchases, privately negotiated agreements or other transactions.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Company’s common stock is traded on the NASDAQ Global Select Market (“NASDAQ”) under the symbol “ROCK.” As of February 20, 2024, there were approximately 29 shareholders of record of the Company’s common stock.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Company’s common stock is traded on the NASDAQ Global Select Market (“NASDAQ”) under the symbol “ROCK.” As of February 17, 2025, there were approximately 28 shareholders of record of the Company’s common stock.
Added
The repurchase program may be suspended or discontinued at any time at the Company's discretion. 23 Table of Contents The following table sets forth purchases made by or on behalf of the Company during the quarter ended December 31, 2024.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

41 edited+18 added−63 removed15 unchanged
Biggest changeRecent Accounting Pronouncements New accounting pronouncements are issued periodically that affect the Company's current and future operations. See Note 1 to the Company's consolidated financial statements in Part II, Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for further information on recent accounting pronouncements in accordance with U.S. generally accepted accounting principles.
Biggest changeThe following table summarizes the impact of the changes in contract estimates on net sales and the estimated contract losses recognized in the Company's operating results during the years ended December 31 (in millions): 2024 2023 2022 Gross favorable effect of the changes in contract estimates on net sales $ 9.6 $ 13.2 $ 4.5 Gross unfavorable effect of the changes in contract estimates on net sales (6.0) (7.5) (13.7) Net favorable (unfavorable) effect of the change in contract estimates on sales $ 3.6 $ 5.7 $ (9.2) Estimated contract losses recognized $ 9.4 $ 5.8 $ 9.1 Recent Accounting Pronouncements For additional information regarding recently issued accounting pronouncements, see Note 1 to the Company's consolidated financial statements in Part II, Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K.
Company Overview The Company is a leading manufacturer and provider of products and services for the renewable energy, residential, agtech, and infrastructure markets.
Company Overview The Company is a leading manufacturer and provider of products and services for the residential, renewable energy, agtech, and infrastructure markets.
Investing Activities Net cash used in investing activities for 2023 of $15.7 million consisted of net cash paid of $10.4 million for the acquisition of a privately held Utah-based company in the third quarter of 2023 and net capital expenditures of $13.9 million offset by net proceeds of $8.0 million from the sale of the Company's Japan-based solar racking business in the Company's Renewables segment in the fourth quarter of 2023 and receipt of the $0.6 million final working capital settlement related to the 2022 acquisition of QAP.
Net cash used in investing activities for 2023 of $15.7 million consisted of net cash paid of $10.4 million for the acquisition of a privately held Utah-based company in the third quarter of 2023 and net capital expenditures of $13.9 million, offset by net proceeds of $8.0 million from the sale of the Company's Japan-based solar racking business in the Company's Renewables segment in the fourth quarter of 2023 and receipt of the $0.6 million final working capital settlement related to the 2022 acquisition of QAP.
For a more detailed discussion of what constitutes a forward-looking statement and of some of the factors that could cause actual results to differ materially from such forward-looking statements, please refer to the “Safe Harbor Statement” on page 3 of this Annual Report on Form 10-K.
For a more detailed discussion of what constitutes a forward-looking statement and of some of the factors that could cause actual results to differ materially from such forward-looking statements, please refer to the “Safe Harbor Statement” on page 4 of this Annual Report on Form 10-K.
The effective tax rates for 2023 and 2022 exceeded 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.
The effective tax rate for 2023 exceeded 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.
The current year income is the combined result of foreign currency translation fluctuations and changes in the fair market valuation allowance related to the liquidation of the processing business, offset by a $0.6 million pre-tax net loss relating to the sale of the Company's Japan-based solar racking business within its Renewables segment.
In 2023, the income is the combined result of foreign currency translation fluctuations and changes in the fair market valuation allowance related to the liquidation of the processing business, offset by a $0.6 million pre-tax net loss relating to the sale of the Company's Japan-based solar racking business within its Renewables segment.
The Company operates and reports its results in the following four reporting segments: • Renewables • Residential • Agtech • Infrastructure The Company serves customers primarily in North America including renewable energy (solar) developers, institutional and commercial growers of fruits, vegetables, flowers and other plants, home improvement retailers, 22 Table of Contents wholesalers, distributors, and contractors.
The Company operates and reports its results in the following four reporting segments: • Residential • Renewables • Agtech • Infrastructure The Company serves customers primarily in North America including home improvement retailers, wholesalers, distributors, contractors, renewable energy (solar) developers, institutional and commercial growers of fruits, vegetables, flowers and other plants.
Over the long-term, the Company expects that future investments, including strategic business opportunities such as acquisitions, may be financed through a number of sources, including internally available cash, availability under the Credit Agreement, new debt financing, the issuance of equity securities, or any combination of the aforementioned.
Over the long-term, the Company expects that future investments, including strategic business acquisitions, may be financed through a number of sources, including internally available cash, availability under the Credit Agreement, new debt financing, the issuance of equity securities, or any combination of the aforementioned.
Results of Operations Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 For a discussion of the Company's results of operations for the year ended December 31, 2022 and for a comparison of such results of operations for the year ended December 31, 2021 results please refer to "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Annual Report on Form 10-K for the year ended December 31, 2022 that was filed with the SEC on February 22, 2023.
Results of Operations Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 For a discussion of the Company's results of operations for the year ended December 31, 2023 and for a comparison of such results of operations for the year ended December 31, 2022 results please refer to "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Annual Report on Form 10-K for the year ended December 31, 2023 that was filed with the SEC on February 21, 2024.
These estimates, judgments and assumptions impact the timing and amount of net sales and cost of sales recognized on in-progress performance obligations with customers. The Company continuously reviews its estimates and the progress and performance of the performance obligation for substantially all contracts that the Company recognizes revenue over time under the cost-to-cost method.
These estimates impact the timing and amount of net sales recognized on in-progress performance obligations with customers. The Company on a regular basis reviews its estimates and the progress and performance of the performance obligation for substantially all contracts that the Company recognizes revenue over time under the cost-to-cost method.
Any adjustments or changes in these estimates affecting sales, costs and profits are recognized in the period in which the change becomes known using the cumulative catch-up method of accounting, resulting in the cumulative effect of changes reflected in the period.
Any adjustments or changes in these estimates affecting revenues are recognized in the period in which the change becomes known using the cumulative catch-up method of accounting, resulting in the cumulative effect of changes reflected in the period.
See Notes 8, 10, 12, 18 and 20 to the Company's consolidated financial statements in Part II, Item 8, Financial Statements, of this Annual Report on Form 10-K for further detail on the Company's accrued expenses, employee and retiree benefit-related obligations, operating lease obligations and historical capital expenditures .
See Notes 7, 9, 14 and 16 to the Company's consolidated financial statements in Part II, Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for further detail on the Company's accrued expenses, employee and retiree benefit-related obligations, operating lease obligations and historical capital expenditures .
The Company's principal capital requirements are to fund its operations' working capital and capital improvements, as well as provide capital for acquisitions and to strategically allocate capital through repurchases of Company stock.
The Company's principal capital requirements are to fund its operations' working capital and capital improvements, as well as provide capital for acquisitions and to strategically allocate capital through repurchases of Company stock under the Company's current authorized program ending May 2, 2025.
However, revenue representing approximately 35%, 40% and 47% of the Company's 2023, 2022 and 2021 consolidated net sales, respectively, was recognized over time under the cost-to-cost method as the Company satisfied its performance obligations. This method of revenue recognition pertains to activities within the Renewables, Agtech, and Infrastructure segments.
However, revenue representing approximately 36%, 35% and 40% of the Company's 2024, 2023 and 2022 consolidated net sales, respectively, was recognized over time under the cost-to-cost method as the Company satisfied its performance obligations.
Liquidity and Capital Resources The following table sets forth the Company's liquidity position as of (in thousands): December 31, 2023 December 31, 2022 Cash and cash equivalents $ 99,426 $ 17,608 Availability on revolving credit facility 396,056 304,505 $ 495,482 $ 322,113 Sources of Liquidity The Company's sources of liquidity are comprised of cash on hand and available borrowing capacity provided under the Company's Credit Agreement (the "Credit Agreement"), entered into on December 8, 2022.
Liquidity and Capital Resources The following table sets forth the Company's liquidity position as of (in thousands): December 31, 2024 December 31, 2023 Cash and cash equivalents $ 269,480 $ 99,426 Availability on revolving credit facility 395,069 396,056 $ 664,549 $ 495,482 Sources of Liquidity The Company's primary sources of liquidity are comprised of cash on hand and available borrowing capacity provided under the Company's Credit Agreement.
The Company will continue to invest in growth opportunities as appropriate while focusing on working capital efficiency and profit improvement opportunities to minimize the cash invested to operate its business. The Company intends to fund its cash requirements through cash generated from operations and, as necessary, from the availability on its revolving credit facility.
The Company will continue to invest in growth opportunities as appropriate while focusing on working capital efficiency and profit improvement opportunities to minimize the cash invested to operate its business.
Revenue recognized on contracts over time using the cost-to-cost method for measuring progress is recognized as work progresses toward completion based on the ratio of cumulative costs incurred to date to estimated total contract costs at completion. Revenues are recognized proportionally as costs are incurred under this method.
This method of revenue recognition pertains to activities within the Renewables, Agtech, and Infrastructure segments. 29 Table of Contents Revenue recognized on contracts over time using the cost-to-cost method for measuring progress is recognized as work progresses toward completion based on the ratio of cumulative costs incurred to date to estimated total contract costs at completion.
A summary of the Company’s significant accounting policies are described in Note 1 of the Company’s consolidated financial statements included in Part II, Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K.
A summary of the Company’s significant accounting policies are described in Note 1 of the Company’s consolidated financial statements included in Part II, Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K. Our most critical accounting estimates that require the most difficult, subjective and complex judgments include revenue recognition on contracts with customers.
The Infrastructure segment operating margin increased to 21.2% in 2023 compared to 11.8% in 2022. The margin improvement was due to strong operating execution, 80/20 productivity initiatives, supply chain efficiency, and product line mix. Unallocated corporate expenses increased $6.6 million, or 19.6%, to $40.1 million in 2023 from $33.5 million for 2022.
The Infrastructure segment operating margin increased to 24.2% in 2024 compared to 21.2% in 2023. The margin improvement was driven by favorable product line mix, 80/20 productivity initiatives and strong operating execution. Unallocated corporate expenses increased $1.3 million, or 3.4%, to $41.4 million in 2024 from $40.1 million for 2023.
"Risk Factors - Risks Related to Financing and Accounting Matters - Increases in future levels of leverage and size of debt service obligations could adversely affect the Company's ability to raise additional capital to fund the Company's operations, limit the Company's ability to react to changes in the economy or the Company's industries and prevent the Company from meeting the Company's obligations." 27 Table of Contents Cash Flows The following table sets forth selected cash flow data for the years ended December 31 (in thousands): 2023 2022 Cash provided by (used in): Operating activities $ 218,476 $ 102,691 Investing activities (15,722) (71,683) Financing activities (120,329) (25,007) Effect of exchange rate changes (607) (1,242) Net increase in cash and cash equivalents $ 81,818 $ 4,759 Operating Activities Net cash provided by operating activities for 2023 of $218.5 million consisted of income from continuing operations of $110.5 million, non-cash net charges totaling $67.0 million, which include depreciation, amortization, intangible asset impairment, stock compensation, exit activity costs, provision for deferred income taxes and other non-cash charges, and $41.0 million of cash generated from working capital and other net operating assets largely due to the Company's focus on reducing its investment in inventory to better align with lower sales volumes while still meeting customer demand.
"Risk Factors - Risks Related to Financing and Accounting Matters - Increases in future levels of leverage and size of debt service obligations could adversely affect the Company's ability to raise additional capital to fund the Company's operations, limit the Company's ability to react to changes in the economy or the Company's industries and prevent the Company from meeting the Company's obligations." Cash Flows The following table sets forth selected cash flow data for the years ended December 31 (in thousands): 2024 2023 Cash provided by (used in): Operating activities $ 174,264 $ 218,476 Investing activities 8,544 (15,722) Financing activities (12,189) (120,329) Effect of exchange rate changes (565) (607) Net increase in cash and cash equivalents $ 170,054 $ 81,818 Operating Activities Net cash provided by operating activities for 2024 of $174.2 million consisted of net income of $137.3 million, non-cash net charges totaling $29.7 million, which include depreciation, amortization, intangible asset impairment, stock compensation, gain on sale of business, exit activity costs, benefit of deferred income taxes and other non-cash charges, and $7.2 million of cash generated from working capital and other net operating assets largely due increases in accounts payable, the result of the timing of purchases and vendor payments, and other current assets, the result of the timing of income taxes payments and other receivables incurred.
The Credit Agreement maintains similar capacity as the prior agreement in which it provides for a revolving credit facility and letters of credit in an aggregate amount equal to $400 million.
The Credit Agreement provides for a revolving credit facility and letters of credit in an aggregate amount equal to $400 million and terminates on December 8, 2027.
The Company paid $26.0 million in the current year to repurchase of 538,575 shares under the Company's authorized share repurchase program. The remainder of the repurchased common stock of $3.3 million related to the net settlement of tax obligations for participants in the Company's equity incentive plans.
The remainder of the repurchased common stock of $3.3 million related to the net settlement of tax obligations for participants in the Company's equity incentive plans.
The following table sets forth the Company’s income from operations and income from operations as a percentage of net sales by reportable segment for the years ended December 31 (in thousands): 2023 2022 Total Change Income from operations: Renewables $ 30,160 9.1 % $ 25,243 6.7 % $ 4,917 Residential 143,068 17.6 % 126,458 16.5 % 16,610 Agtech (928) (0.6) % 2,914 1.7 % (3,842) Infrastructure 18,529 21.2 % 9,003 11.8 % 9,526 Unallocated Corporate Expenses (40,100) (2.9) % (33,516) (2.4) % (6,584) Consolidated income from operations $ 150,729 10.9 % $ 130,102 9.4 % $ 20,627 The Renewables segment generated an operating margin of 9.1% in 2023 compared to 6.7% in 2022.
The following table sets forth the Company’s income from operations and income from operations as a percentage of net sales by reportable segment for the years ended December 31 (in thousands): 2024 2023 Total Change Income from operations: Residential $ 148,784 19.0 % $ 143,068 17.6 % $ 5,716 Renewables 3,349 1.2 % 30,160 9.1 % (26,811) Agtech 11,040 7.2 % (928) (0.6) % 11,968 Infrastructure 21,295 24.2 % 18,529 21.2 % 2,766 Unallocated Corporate Expenses (41,445) (3.2) % (40,100) (2.9) % (1,345) Consolidated income from operations $ 143,023 10.9 % $ 150,729 10.9 % $ (7,706) The Residential segment operating margin increased to 19.0% in 2024 from 17.6% in 2023.
Net proceeds from borrowings consisted of $204.5 million in proceeds from borrowing on the Company's long-term credit facility, offset by $138.0 million in payments on long-term debt. 28 Table of Contents Critical Accounting Estimates The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make decisions based upon estimates, assumptions, and factors it considers relevant to the circumstances.
Critical Accounting Estimates The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make decisions based upon estimates, assumptions, and factors it considers relevant to the circumstances.
See Note 9 to the Company's consolidated financial statements in Part II, Item 8, Financial Statements, of this Annual Report on Form 10-K for further information on the Company’s Credit Agreement .
See Note 8 to the Company's consolidated financial statements in Part II, Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for further information on the Company’s Credit Agreement. 27 Table of Contents Generally, the Company's foreign operations have generated cash flow from operations sufficient to invest in working capital and fund their capital improvements.
Financing Activities Net cash used in financing activities for 2023 of $120.3 million consisted of net long-term debt payments of $91.0 million and $29.3 million of common stock repurchases. Net long-term debt payments consisted of $141.0 million in long-term debt payments, offset by $50.0 million in proceeds from borrowing on the Company's long-term debt credit facility.
The remainder of the repurchased common stock of $2.2 million related to the net settlement of tax obligations for participants in the Company's equity incentive plans and excise taxes on stock repurchases. Net cash used in financing activities for 2023 of $120.3 million consisted of net long-term debt payments of $91.0 million and $29.3 million of common stock repurchases.
The Company will work with its customers to optimize the various ITC as the final rules are defined and implemented. 23 Table of Contents Operating Performance Measures The Company uses certain operating performance measures, specifically consolidated gross margin, operating margin by segment and consolidated operating margin, to manage its businesses, set operational goals, and establish performance targets for incentive compensation for its employees.
Business of this Annual Report on Form 10-K will allow the Company to respond timely to these factors. 24 Table of Contents Operating Performance Measures The Company uses certain operating performance measures, specifically consolidated gross margin, operating margin by segment and consolidated operating margin, to manage its businesses, set operational goals, and establish performance targets for incentive compensation for its employees.
The following table sets forth selected results of operations data (in thousands) and its percentages of net sales for the years ended December 31: 2023 2022 Net sales $ 1,377,736 100.0 % $ 1,389,966 100.0 % Cost of sales 1,015,770 73.7 % 1,071,272 77.1 % Gross profit 361,966 26.3 % 318,694 22.9 % Selling, general, and administrative expense 207,440 15.1 % 188,592 13.5 % Intangible asset impairment 3,797 0.3 % — — % Income from operations 150,729 10.9 % 130,102 9.4 % Interest expense 3,002 0.2 % 4,047 0.3 % Other (income) expense (1,265) (0.1) % 14,565 1.1 % Income before taxes 148,992 10.8 % 111,490 8.0 % Provision for income taxes 38,459 2.8 % 29,084 2.1 % Net income $ 110,533 8.0 % $ 82,406 5.9 % The following table sets forth the Company’s net sales by reportable segment for the years ended December 31 (in thousands): Impact of 2023 2022 Total Change Acquisitions Portfolio Management Ongoing Operations Net sales: Renewables $ 330,738 $ 377,567 $ (46,829) $ — $ — $ (46,829) Residential 814,803 767,248 47,555 60,807 — (13,252) Agtech 144,967 168,868 (23,901) — (3,781) (20,120) Infrastructure 87,228 76,283 10,945 — — 10,945 Consolidated $ 1,377,736 $ 1,389,966 $ (12,230) $ 60,807 $ (3,781) $ (69,256) Consolidated net sales decreased from 2022 by $12.2 million, or 0.9%, to $1.4 billion for 2023 compared to 2022.
The following table sets forth selected results of operations data (in thousands) and its percentages of net sales for the years ended December 31: 2024 2023 Net sales $ 1,308,764 100.0 % $ 1,377,736 100.0 % Cost of sales 956,936 73.1 % 1,015,770 73.7 % Gross profit 351,828 26.9 % 361,966 26.3 % Selling, general, and administrative expense 197,505 15.1 % 207,440 15.1 % Intangible asset impairment 11,300 0.9 % 3,797 0.3 % Income from operations 143,023 10.9 % 150,729 10.9 % Interest (income) expense (6,171) (0.5) % 3,002 0.2 % Other income (24,731) (1.9) % (1,265) (0.1) % Income before taxes 173,925 13.3 % 148,992 10.8 % Provision for income taxes 36,585 2.8 % 38,459 2.8 % Net income $ 137,340 10.5 % $ 110,533 8.0 % The following table sets forth the Company’s net sales by reportable segment for the years ended December 31 (in thousands): Impact of 2024 2023 Total Change Acquisitions Portfolio Management Ongoing Operations Net sales: Residential $ 782,519 $ 814,803 $ (32,284) $ 3,480 $ — $ (35,764) Renewables 285,405 330,738 (45,333) — (11,724) (33,609) Agtech 152,811 144,967 7,844 — (4,059) 11,903 Infrastructure 88,029 87,228 801 — — 801 Consolidated $ 1,308,764 $ 1,377,736 $ (68,972) $ 3,480 $ (15,783) $ (56,669) Consolidated net sales decreased from 2023 by $69.0 million, or 5.0%, to $1.3 billion for 2024 compared to 2023.
A significant change in an estimate on one or more contracts could have a material effect on the Company's results of operations. Contract costs include all direct costs related to contract performance. Selling and administrative expenses are charged to operations as incurred. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined.
When any individual contract's estimated total costs to be incurred exceeds the contract's transaction price, the Company recognizes the estimated contract loss in the period in which such loss is determined. A significant change in an estimate on one or more contracts could have a material effect on the Company's results of operations.
In 2022, the Company recorded a $14.0 million valuation allowance related to the write-down of the processing business to estimated fair market value. The Company recognized a provision for income taxes of $38.5 million, an effective tax rate of 25.8%, for 2023 compared with a provision for income taxes of $29.1 million, an effective tax rate of 26.1%, for 2022.
The Company recognized a provision for income taxes of $36.6 million, an effective tax rate of 21.0%, for 2024 compared with a provision for income taxes of $38.5 million, an effective tax rate of 25.8%, for 2023.
Consolidated backlog increased 10% to $330 million up from $299 million at the end of the prior year. Net sales in the Renewables segment decreased by 12.4%, or $46.8 million, to $330.7 million in 2023 compared to $377.6 million in 2022.
Consolidated backlog decreased 24% to $252 million down from $330 million at the end of the prior year. 25 Table of Contents Net sales in the Residential segment decreased 4.0%, or $32.3 million, to $782.5 million in 2024 compared to $814.8 million in 2023.
The Company believes the key elements of its strategy outlined in Item 1. Business of this Annual Report on Form 10-K will allow the Company to respond timely to these factors.
The Company believes the key elements of its strategy outlined in Item 1.
Generally, the Company's foreign operations have generated cash flow from operations sufficient to invest in working capital and fund their capital improvements. As of December 31, 2023 and 2022, the Company's foreign subsidiaries held $6.9 million and $15.2 million of cash, respectively.
As of December 31, 2024 and 2023, the Company's foreign subsidiaries held $8.9 million and $6.9 million of cash, respectively.
This increase was the result of improved price to material cost alignment, solid execution in field operations, improvement in supply chain management and continued operational efficiencies, along with 80/20 initiatives and favorable business and product mix. Selling, general, and administrative ("SG&A") expenses increased by $18.8 million, or 10.0%, to $207.4 million for 2023 from $188.6 million for 2022.
The Company's consolidated gross margin increased to 26.9% for 2024 compared to 26.3% for 2023. This increase was the result of improved price to material cost alignment, continued operational efficiencies, along with 80/20 initiatives and favorable business and product mix.
While backlog decreased 6% year over year, the pipeline of projects is strong. Net sales in the Infrastructure segment increased 14.3%, or $10.9 million, to $87.2 million in 2023 compared to $76.3 million in 2022. The increase in revenue was driven by continued solid end market demand and ongoing efforts to increase market participation.
Net sales in the Infrastructure segment increased 0.9%, or $0.8 million, to $88.0 million in 2024 compared to $87.2 million in 2023, the result of continued strong execution. Backlog increased 10% year over year. Demand and quoting remain strong, supported by continued investment at the federal and state levels.
Net cash provided by operating activities for 2022 of $102.7 million consisted of income from continuing operations of $82.4 million, non-cash net charges totaling $58.6 million, which include depreciation, amortization, stock compensation, exit activity costs, provision for deferred income taxes and other non-cash charges, offset by a net investment in working capital and other net assets of $38.3 million.
Net cash provided by operating activities for 2023 of $218.5 million consisted of net income of $110.5 million, non-cash net charges totaling $67.0 million, which include depreciation, amortization, intangible asset impairment, stock 28 Table of Contents compensation, exit activity costs, provision for deferred income taxes and other non-cash charges, and $41.0 million of cash generated from working capital and other net operating assets largely due to the Company's focus on reducing its investment in inventory to better align with lower sales volumes while still meeting customer demand.
The increase in operating margin was the result of the benefit of improved alignment of price actions and input costs, along with 80/20 productivity initiatives and mix. The Agtech segment generated an operating margin of (0.6)% in 2023 compared to 1.7% in 2022.
The increase in operating margin was driven by effective price/cost management, solid execution and 80/20 productivity initiatives. 26 Table of Contents The Renewables segment generated an operating margin of 1.2% in 2024 compared to 9.1% in 2023.
New order bookings continued to be robust as backlog increased 21% from the prior year. Net sales in the Residential segment increased 6.2%, or $47.6 million, to $814.8 million in 2023 compared to $767.2 million in 2022.
Order backlog decreased 32% from the prior year as a result of these challenges. Net sales in the Agtech segment increased 5.4%, or $7.8 million, to $152.8 million in 2024 compared to $145.0 million in 2023.
The Company believes that these sources provide the Company with ample liquidity and capital resources to invest in operational excellence, growth initiatives and the development of the organization. The Company has been able to weather the economic impacts of the broader market dynamics, including the inflationary cost environment, while continuing to make investments that support the Company's strategy.
The Company believes that these sources, together with cash expected to be generated from operations, should provide the Company with ample liquidity and capital resources to meet both its short-term and long-term cash requirements and to continue to invest in operational excellence, growth initiatives and the development of the organization.
The $18.8 million increase was primarily due to higher performance-based compensation expense, as compared to the prior year. Incremental SG&A expenses incurred by recent acquisitions also contributed to the increase. SG&A expenses as a percentage of net sales increased to 15.1% for 2023 compared to 13.5% for 2022. During 2023, the Company recognized intangible asset impairment charges of $3.8 million.
SG&A expenses as a percentage of net sales was unchanged at 15.1% for both 2024 and 2023, respectively. The Company recognized intangible asset impairment charges of $11.3 million in 2024 due to rebranding initiatives resulting in the discontinuation of indefinite-lived trademarks in the Agtech and Renewables segments of $6.0 million and $5.3 million, respectively.
The decrease in expense was primarily due to lower average outstanding balances in the current year, $37 million compared to $85 million, for 2023 and 2022, respectively, partially offset by higher interest rates compared to the prior year. The Company recorded other income of $1.3 million in 2023, compared to other expense of $14.6 million in 2022.
The Company recorded interest income of $6.2 million for 2024, compared to interest expense of $3.0 million for 2023. Income in the current year was the result of earnings on certain interest-bearing cash accounts. Expense in the prior year was the result of outstanding balances on the Company's revolving credit facility during 2023, while no amounts were outstanding during 2024.
Removed
Recent Trends The uncertainty of the current macro-economic environment, including shifting inflation and higher interest rates, along with trade related disruptions that continue to impact the supply of solar modules used by the Company’s customers, along with permitting delays that affected project timing, have impacted and may continue to adversely impact our performance and financial results.
Added
The decrease in revenue was the combined result of volume decline in the Company's Residential and Renewables segments along with portfolio management activities in the prior year, the 2023 sale of the Company's Japan-based solar racking business in the Renewables segment and the prior year liquidation of the processing business in the Agtech segment.
Removed
Although the disruption in the supply of solar modules is improving, our customers continue to be challenged to obtain permits from relevant government entities to build new solar fields and the Company does expect that these aforementioned dynamics will continue through 2024.
Added
The decrease was partially offset by growth in the Company's Agtech segment along with revenues generated from a 2023 acquisition in the Residential segment.
Removed
While the Company does not sell or import solar modules, the goods and services the Company provides for its customers depend upon the supply of solar modules. Shortages of solar modules have resulted in project delays over the past two years.
Added
Organic decline of 4.4% was driven by a slower residential market, including the repair and remodel sector. T his decrease was partially offset by recent participation gains with existing and new customers along with $3.5 million of sales generated by the recent acquisition.
Removed
The supply has been primarily impacted by two regulatory items: the UFLPA which was enacted in June 2022, and the circumvention of AD/CVD investigation launched by the USDOC in March 2022, against eight solar module manufacturers producing in four countries in Southeast Asia.
Added
Net sales in the Renewables segment decreased by 13.7%, or $45.3 million, to $285.4 million in 2024 compared to $330.7 million in 2023.
Removed
The UFLPA requires traceability of components of imported goods to validate components are not sourced from the Xinjiang province in China. This requirement has caused delays in module availability as module manufacturers must follow a stringent importation process with the U.S. Custom and Border Protection Agency.
Added
The decrease was driven by trade and regulatory headwinds associated with the two independent AD/CVD investigations which compelled the industry to significantly focus on completing panel installations and administrative reporting requirements ahead of the December 3, 2024 expiration of the tariff moratorium on panels granted through the two-year Presidential Proclamation from June 2022, along with the aforementioned portfolio management actions and other industry headwinds.
Removed
While a few of the larger module manufacturers are experiencing more consistent success with the importation process, other module suppliers need to make further progress with UFLPA and the importation process.
Added
The revenue increase was primarily driven by projects accelerating in our produce division, partially offset by $4.1 million of revenues recorded in the prior year related to the aforementioned portfolio management actions.
Removed
The UFLPA continues to create a compliance burden and constrain supply of imported solar modules, but the Company expects continual improvement of supply as more module manufacturers move forward on the learning curve.
Added
Although backlog decreased 23% year over year in this segment, the Company anticipates the addition of new projects in both the produce and commercial markets as the Company completes design work and finalize products for launch.
Removed
As a result of the USDOC’s AD/CVD investigation, and until the final ruling from the USDOC was announced in August 2023, projects were delayed due to the risk of retroactive tariffs being imposed on the import of solar modules produced in four countries in Southeast Asia, where Chinese manufacturers have operations.
Added
Selling, general, and administrative ("SG&A") expenses decreased by $9.9 million, or 4.8%, to $197.5 million for 2024 from $207.4 million for 2023. The $9.9 million decrease was the result of lower performance-based compensation expense and sales commissions compared to the prior year along with a recovery on a receivable written down in 2023 associated with a distressed cannabis customer.
Removed
In addition, of the eight major manufacturers under investigation, five were found to have been circumventing the AD/CVD orders. In parallel to the USDOC investigation, on June 6, 2022, an emergency Presidential Proclamation was issued delaying the imposition of duties on imports from the impacted countries until June 6, 2024.
Added
During 2023, the Company recognized intangible asset impairment charges of $3.8 million.
Removed
This proclamation provides non-U.S. based module manufacturers time to modify and secure supply chains to ensure compliance with U.S. law. In January 2024, a motion was filed requesting that the delay in the imposition of duties per the Presidential Proclamation be removed retroactively. On August 16, 2022, the IRA was signed into law.
Added
The decrease in operating margin was impacted by lower volume resulting from the aforementioned trade and regulatory challenges in this segment along with product line mix associated with the launch and learning curve of the new tracker product line in the current year.
Removed
Among other things, the IRA provides for a variety of enhanced ITC and Production Tax Credits for renewable energy subject to specific dates and requirements.
Added
Furthermore, margin was impacted by restructuring activities related to addressing customer issues arising from discontinued solar tracker solutions and the indefinite-lived trademark impairment charge recorded in the current year. The Agtech segment generated an operating margin of 7.2% in 2024 compared to (0.6)% in 2023.
Removed
Although the Company believes the IRA should assist in driving growth in the renewable energy industry, it is important that the Department of Treasury finalize rules governing the execution of additional investment tax incentives so industry and the Company's customers can move forward with projects currently on hold.
Added
The year over year improvement in operating margin was due to the result of volume leverage, product mix shift and improved execution along with the recovery on a receivable written down in 2023 associated with a distressed cannabis customer and the impact of prior year portfolio management actions.
Removed
Overall, the Company believes the enhanced tax credits under the IRA will provide long-term certainty for the industry and support consistent and accelerating demand for our products.
Added
The Company recorded other income of $24.7 million in 2024, compared to $1.3 million in 2023. The current year income is primarily the result of a $25.3 million gain related to the sale of the Company's electronic locker business within its Residential segment.
Removed
The decrease in revenue was driven by lower organic revenue of 5.0% or $69.3 million, the result of a 6% volume decline. Largely offsetting the year over year decrease were $60.8 million of revenues generated from recent acquisitions, which are reported as part of the Company's Residential segment, along with participation gains.
Added
The effective tax rate for 2024 was equal to the U.S. federal statutory rate of 21% due to state taxes and nondeductible permanent differences offset by a partial release of the valuation allowance previously recorded on a capital loss carryforward that can be utilized due to the 2024 sale of the Company's electronic locker business within its Residential segment.
Removed
Revenue decreased by 12.4% from the prior year as the market demand for solar racking 24 Table of Contents installation continues to be impacted by timing delays due to lengthier permitting processes and pending guidance on final IRA tax credit guidelines, along with the lingering impact of importation challenges resulting from the UFLPA that lessened throughout the year.
Added
Investing Activities Net cash provided by investing activities for 2024 of $8.5 million consisted of net proceeds of $28.1 million from the sale of the Company's electronic locker business within its Residential segment in the fourth quarter of 2024 and receipt of the $0.3 million final working capital settlement resulting from the sale of the Company's Japan-based solar racking business in the Company's Renewables segment in the fourth quarter of 2023, offset by net capital expenditures of $19.9 million.
Removed
T he increase from the prior year was the result of sales generated by recent acquisitions of $60.8 million along with additional participation gains and expanded market presence, which more than offset channel inventory corrections and price declines related to commodity cost reductions and 80/20 initiatives targeting less attractive product lines.
Added
Financing Activities Net cash used in financing activities for 2024 of $12.2 million consisted of common stock repurchases. The Company paid $10.0 million in the current year for the repurchase of 154,796 shares under the Company's authorized share repurchase program.
Removed
Net sales in the Agtech segment decreased 14.2%, or $23.9 million, to $145.0 million in 2023 compared to $168.9 million in 2022. Revenue declined as both the segment's commercial business and produce projects experienced delayed new project starts throughout most of the year, which began to convert to active projects in the fourth quarter of the year.
Added
Net long-term debt payments consisted of $141.0 million in long-term debt payments, offset by $50.0 million in proceeds from borrowing on the Company's long-term debt credit facility. The Company paid $26.0 million in 2023 to repurchase of 538,575 shares under the Company's authorized share repurchase program.
Removed
Backlog increased 3% year over year, benefiting from these efforts. The Company's consolidated gross margin increased to 26.3% for 2023 compared to 22.9% for 2022.
Added
Revenues are recognized proportionally as costs are incurred under this method. Contract costs include all direct costs related to contract performance and factors inherent in the estimation process include direct labor hours, direct material costs, and other direct costs.
Removed
The increase in operating margin was driven by field operations productivity, favorable price to cost alignment and improved supply chain management that offset lower volumes and higher restructuring charges incurred in the current year related to addressing customer issues arising from the discontinued legacy solar tracker solution. 25 Table of Contents The Residential segment operating margin increased to 17.6% in 2023 from 16.5% in 2022.
Removed
The year over year decline in operating margin was the combined impact of a $3.5 million charge to write down a receivable associated with a distressed cannabis customer and the aforementioned $3.2 million indefinite-lived trademark impairment charge, the result of a rebranding initiative. The impact of these charges were partially offset by 80/20 initiatives and improvement in project management systems.
Removed
The increase in expense was largely the result of higher performance-based compensation expense, as compared to the prior year. Interest expense decreased $1.0 million to $3.0 million for 2023 from $4.0 million for 2022.

… 42 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

6 edited+0 added−1 removed6 unchanged
Biggest changeAt December 31, 2023, the Company's available variable rate debt consisted of borrowings under the Company's Credit Agreement, of which there was no outstanding indebtedness on the revolving credit facility as of December 31, 2023 and there was no other debt outstanding at year end.
Biggest changeThe Company's available variable rate debt consisted of the revolving credit facility under the Company's Credit Agreement, of which 30 Table of Contents there was no outstanding indebtedness as of and during the year ended December 31, 2024, and there was no other debt outstanding as of and during the year ended December 31, 2024.
The Company cannot accurately calculate the pre-tax impact a one percent change in the commodity costs would have on the Company's 2023 operating results as the change in commodity costs would both impact the cost to purchase materials and the selling prices the Company offers to customers.
The Company cannot accurately calculate the pre-tax impact a one percent change in the commodity costs would have on the Company's 2024 operating results as the change in commodity costs would both impact the cost to purchase materials and the selling prices the Company offers to customers.
The Company cannot accurately calculate the pre-tax impact that a one percent change in the exchange rates of foreign currencies would have on the Company's 2023 operating results as the changes in exchange rates would impact the cost of materials, the U.S. dollar revenue equivalents, and potentially the prices offered to overseas customers. 32 Table of Contents
The Company cannot accurately calculate the pre-tax impact that a one percent change in the exchange rates of foreign currencies would have on the Company's 2024 operating results as the changes in exchange rates would impact the cost of materials, the U.S. dollar revenue equivalents, and potentially the prices offered to foreign customers. 31 Table of Contents
Interest Rate Risk The Company currently utilizes variable interest rate debt to manage interest rate risk, and would consider utilizing fixed rate debt if borrowings were expected to be outstanding for an extended period of time.
Interest Rate Risk The Company intends to utilize variable interest rate debt to manage interest rate risk, and would consider utilizing fixed rate debt if borrowings were expected to be outstanding for an extended period of time.
Borrowings under the revolving credit facility during the year ended December 31, 2023 bore interest at a variable interest rate based upon, at the Company's option, at a rate equal to an additional margin plus (a) a base rate, (b) a daily simple SOFR rate, (c) a term SOFR rate or (d) for certain foreign currencies, a foreign current rate.
Borrowings under the Credit Agreement's revolving credit facility bear interest, at the Company's option, at a rate equal to an additional margin plus (a) a base rate, (b) a daily simple SOFR rate, (c) a term SOFR rate or (d) for certain foreign currencies, a foreign current rate.
A 31 Table of Contents hypothetical 1% increase or decrease in interest rates would have changed the Company's 2023 interest expense by $0.4 million. Foreign Exchange Risk The Company has foreign exchange risk due to the Company's international operations, primarily in Canada, and through sales to and purchases from foreign customers and vendors.
A hypothetical 1% increase or decrease in interest rates would not have had a material effect on the Company's financial position, results of operations or cash flows. Foreign Exchange Risk The Company has foreign exchange risk due to the Company's international operations, primarily in Canada, and through sales to and purchases from foreign customers and vendors.
Removed
In order to manage interest rate risk, the Company will continue to monitor changes in its debt levels and access to capital ensuring interest rate risk is appropriately managed.

Other ROCK 10-K year-over-year comparisons