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What changed in GIBRALTAR INDUSTRIES, INC.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of GIBRALTAR INDUSTRIES, INC.'s 2022 and 2023 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 2023 report.

+227 added−257 removedSource: 10-K (2024-02-21) vs 10-K (2023-02-22)

Top changes in GIBRALTAR INDUSTRIES, INC.'s 2023 10-K

227 paragraphs added · 257 removed · 169 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

48 edited+7 added−16 removed40 unchanged
Biggest changeThe 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 11 Table of Co n tents • Continue to map the Company's organization with the communities it operates in to ensure the make-up of the Company's team is representative of the community itself • 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 candidates with the following objectives: – Build diversity into the Company's recruiting process with its partner recruitment firms and labor agencies, universities, and trade schools, and ensure these partners deliver diverse slates of candidates for the Company's hiring needs, and – Strengthen the Company's outreach to academic institutions, industry associations, local businesses, and affinity groups to broaden opportunities for diverse talent • Be proactive with the Company's customers and supply chain partners to find ways to work together in promoting positive social development Leadership Development The Company reimagined the scope and objectives of its leadership development program in 2021.
Biggest changeThe 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.
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 Agtech, Renewables, Residential and Infrastructure businesses, and enabling the Company to better respond to humanity's evolving needs.
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.
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 & 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 Customer and Quality .
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.
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.
The Company believes its low leverage and ample borrowing capacity, along with enhanced flexibility in its Credit Agreement, provides the Company with the financial capacity to fund its ongoing business requirements, strategic initiatives, and acquisition opportunities.
The Company believes its low leverage and ample borrowing capacity, along with flexibility in its Credit Agreement, provides the Company with the financial capacity to fund its ongoing business requirements, strategic initiatives, and acquisition opportunities.
An integral part of solar projects is the design, engineering, and fabrication of unique structures and electrical balance of systems, as well as the field installation of both whether applied to a ground-mounted or carport system. The Company provides both fixed tilt and tracker racking systems along with either a screw or pile driven foundation systems.
An integral part of solar projects is the design, engineering, and fabrication of unique structures and electrical balance of systems ("eBOS"), as well as the field installation of both whether applied to a ground-mounted or carport systems. The Company provides both fixed tilt and tracker racking systems along with either a screw or pile driven foundation systems.
Approximately 6% of the Company's U.S. workforce was represented by unions through two collective bargaining agreements ("CBAs") as of December 31, 2022. 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.
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.
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 incidents work environment.
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 provides optimal solutions to its customers: racking, foundation, and electrical systems for photovoltaic (PV) solar systems, commercial growing greenhouses for biologically grown food, cannabis, 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: 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's operational infrastructure provides the necessary scale to support regional and national customers in each of its markets. 4 Table of Co n tents The Company operates and reports its results in the following four reporting segments: • Renewables • Residential • Agtech • Infrastructure The following table summarizes the primary products, applications, and end markets for each segment: Renewables Segment Products & Services Applications End Users Design, engineering, manufacturing and installation of solar racking and electrical balance of systems Commercial & 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 Residential: new construction and repair and remodeling Single point & centralized mail systems and electronic package solutions Secure storage for mail and package deliveries Retractable awnings & gutter guards Sun protection; gutter protection Rain dispersion, trims and flashings, other accessories Water & protection from natural elements Agtech Segment Products & Services Applications End Users Provide growing and processing solutions including the designing, engineering, manufacturing, full scope construction, & maintenance & support of greenhouses & indoor growing operations Retail, fruits & vegetables, flowers, cannabis, commercial, institutional & 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 & 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 Co n tents 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. 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 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, 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, 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 electronic parcel lockers and parcel room 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 on line, pick up in store transactions.
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.
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. 10 Table of Co n tents 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 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.
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.
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.
Technical service personnel also work in conjunction with the Company's sales force in the new product development process to determine the types of products and services that suit the particular needs of customers. Suppliers and Raw Materials The Company's business is required to maintain sufficient quantities of raw material inventory in order to accommodate customers delivery requirements.
Technical service personnel also work in conjunction with the Company's sales and product management teams in the new product development process to determine the types of products and services that suit the needs of customers. Suppliers and Raw Materials The Company's business is required to maintain sufficient quantities of raw material inventory in order to accommodate customers' delivery requirements.
Residential The Residential segment serves both the residential repair and remodeling and new housing construction markets in North America with products 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, and other construction accessories.
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.
Segments The Company serves customers primarily in North America including renewable energy (solar) developers, home improvement retailers, wholesalers, distributors, institutional and commercial growers of food and plants, and contractors.
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.
The Gibraltar Leadership Program core curriculum, launched to 194 leaders in 2022, 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.
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.
Agtech The Agtech segment designs, manufactures, and installs high-technology turnkey greenhouse facilities designed for large-scale indoor growing production of fruits and vegetables, plants and flowers, and agricultural research and development facilities with over 100 universities in the United States.
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.
Sales and Marketing In 2022, approximately 45% 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, down from 56% in 2021.
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.
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, a belief that is foundational for the Company's “Best Place to Work” initiative. Key demographics for the Company's employees are shown below.
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.
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.
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.
The Company believes that the performance obligations related to the majority of its backlog will be satisfied and related revenue recognized during 2023. Competition The Company operates in highly competitive markets with several competitors participating in each of its end markets.
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 multi-year effort that emerged will establish a foundation for excellence in leadership. The basis of the Company's program now includes multiple learning paths to meet the development needs of employees at all levels, including ethics compliance, leadership development, continuous improvement, diversity and inclusion, and function-specific learning and certification programs.
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.
The Company purchases flat-rolled and plate steel and aluminum at regular intervals on an as-needed basis, primarily from the major North American mills, as well as, a limited amount from domestic service 8 Table of Co n tents centers and foreign steel importers.
The primary raw materials the Company purchases are flat-rolled, structural and plate steel, aluminum coil and extrusions, and resins. The Company purchases flat-rolled and plate steel and aluminum at regular intervals on an as-needed basis, primarily from the major North American mills, as well as a limited amount from domestic service centers and foreign steel importers.
While 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. 2022 Workforce Composition (Gender and Age) Employee Age Groups Female Male Not Specified Total by Age Group % by Age Group 79 265 1 345 16.1% 30 - 49 years of age 282 716 — 998 46.7% 50+ years of age 261 532 1 794 37.2% Total 622 1,513 2 2,137 As a percentage 29.1% 70.8% 0.1% Number of 2022 Employees by Employment Type (by Gender) Employee Type Female Male Not Specified Total by Type % by Type Salary 282 594 — 876 41.0% Hourly 340 919 2 1,261 59.0% Total 622 1,513 2 2,137 2022 Ethnic Background of Employees Ethnic Background % of Employees White 62.1% Hispanic or Latino 13.8% Black or African American 12.6% Asian 4.5% Not Specified 3.3% Two or More Races 2.4% Hawaiian/Pacific Islander 0.7% 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.
While 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.
At December 31, 2022, the Company operated 33 facilities, which were comprised of 25 manufacturing facilities, one distribution center, and seven offices, and were located within 15 states, Canada, China, and Japan.
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.
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.
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.
Furthermore, general economic forces, such as tax credit expirations and imposed tariffs, the impact of the COVID-19 pandemic, and changes in the Company’s products and customer mix 9 Table of Co n tents can and have shifted traditional seasonal fluctuations in revenue over the past few years.
Furthermore, general economic forces, such as tax credit expirations, imposed tariffs and changes in the Company’s products and customer mix can and have shifted traditional seasonal fluctuations in revenue over the past few years. Governmental Regulation The Company's production processes involve the use of environmentally regulated materials.
The Company's products include expansion joints, structural bearings, rubber pre-formed seals and other sealants, elastomeric concrete, and bridge cable protection systems. Infrastructure's products are manufactured primarily from plate and structural steel along with various resin and rubber based materials. New products introduced in recent years extend the infrastructure products into new markets.
The Company's products include expansion joints, structural bearings, rubber pre-formed seals and other sealants, elastomeric concrete, and bridge cable protection systems. Infrastructure's products are manufactured primarily from plate, rail and structural steel along with various resin and rubber based materials. The products manufactured are highly engineered to meet the exact specifications for the particular project undertaken.
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.
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.
Each of these product offerings can be sold separately or as part of a system solution. 7 Table of Co n tents The Company strives to improve its product-solution offerings while adapting to local and regional building code and new products recently introduced include electronic parcel lockers, roof top safety kits, chimney caps, heat trace coils, remote-controlled deck awnings for sun protection, and high-efficiency ventilation products.
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 employed 2,117 full-time employees and 20 part-time employees as of December 31, 2022. Of the Company's 2,137 total employees, 876 were classified as salary and 1,261 classified as hourly. The Company also employed approximately 329 full-time equivalent temporary agency employees.
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.
One customer, a home improvement retailer which purchases from the Residential segment represented 14%, 13%, and 14% of the Company's consolidated net sales for the years ended December 31, 2022, 2021 and 2020, respectively. No other customer in any segment or segments accounted for more than 10% of the Company's consolidated net sales.
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.
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 • The Company strives to create an environment where our people can have the best chance to thrive, which the Company refers to internally as creating the "Best Place to Work." The Company's "Best Place to Work" initiative engages the entire organization, with areas of focus that include Health and Safety, Education and Development, Diversity and Inclusion, Compensation and Employee Benefits, and 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 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.
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.
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.
Renewables The Renewables segment designs, manufacturers and installs solar energy mounting systems including foundation, racking, and electrical balance of systems for developers, EPCs and owners / operators of solar fields.
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.
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 U.S. while maintaining the capability to support the many local and regional customer requirements.
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 commitment to quality is a core operating tenet, and its quality management systems are designed to ensure the Company delivers to customer and stakeholder expectations while meeting statutory and regulatory requirements related to its products and services. Strong Liquidity Profile .
The Company's commitment to quality is a core operating tenet, and its quality management systems are designed to ensure the Company delivers to meet customer and stakeholder expectations. Strong Liquidity Profile . The Company strives to manage its cash resources to ensure sufficient liquidity to fund growth initiatives, support the seasonality of its businesses and manage effectively through economic cycles.
The Company also maintains its commitment to ethical leadership with quarterly ethics training for all employees, and furthermore, also encourages and supports employees who pursue training and development to build their functional knowledge and expertise through continuing education and certification programs related to the employees' functional area.
It also encourages and supports employees who pursue training and development to build their functional knowledge and expertise through continuing education and certification programs related to their functional area. Going forward the Company has strategic initiatives in place to expand advanced trainings offered for current GLP participants.
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 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.
For example, its engineered pavement sealants for roadways are now being installed on airport runways, its structural bearings for elevated highways and bridges have been installed on offshore oil production platforms, and its corrosion-protection products for cable-suspension bridges are now marketed and sold internationally.
Its corrosion-protection products for cable-suspension bridges are now marketed and sold internationally and have been used on numerous signature bridges.
While the majority of the Company's products have short lead time order cycles, the Company has aggregated approximately $299 million of backlog from continuing operations at December 31, 2022 compared to $344 million at December 31, 2021. The backlog primarily relates to certain business units in the Company's Renewables, Agtech, and Infrastructure segments.
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.
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'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.
The Company strives to manage its cash resources to ensure sufficient liquidity to fund growth initiatives, support the seasonality of its businesses and manage effectively through economic cycles. As of December 31, 2022, the Company's liquidity was $322.1 million, including $17.6 million of cash and $304.5 million of availability under its revolving credit facility.
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.
The Company shifted its marketing focus in 2021 to build an enhanced cohesive brand strategy—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.
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".
In 2022, the Company most recently acquired Quality Aluminum Products ("QAP") in the Residential segment and made the decision to divest its non-core Processing business within the Agtech segment to help achieve these objectives. 3 Table of Co n tents 3.
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.
The single-axis tracker systems are able to 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.
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.
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Recent Developments On December 8, 2022, the Company entered into a Credit Agreement (the "Credit Agreement"), and concurrently with entering into the Credit Agreement, the Company paid off all amounts owed under the Sixth Amended and Restated Credit Agreement dated as of January 24, 2019, which was terminated with no prepayment penalties.
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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.
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The Credit Agreement provides for a revolving credit facility and letters of credit in an aggregate amount equal to $400 million. The Company can request additional financing to increase the revolving credit facility to $700 million or enter into a term loan of up to $300 million subject to conditions set forth in the Credit Agreement.
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Most of the Company's production is completed using computer numerical control machines, roll forming machines, laser cutters and other fabrication tools.
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The Credit Agreement contains two financial covenants. As of December 31, 2022, the Company was in compliance with both financial covenants. The Credit Agreement terminates on December 8, 2027.
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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.
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On August 22, 2022, the Company purchased all the issued and outstanding membership interests of Quality Aluminum Products ("QAP"), a manufacturer of soffit, fascia, trim coil, rain carrying products and aluminum siding for an aggregate purchase price of $52.1 million. The acquisition of QAP was financed primarily through borrowings under the Company's revolving credit facility.
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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.
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The results of operations of QAP have been included in the Residential segment of the Company's consolidated financial statements from the date of acquisition. In May 2022, the Company's Board of Directors authorized a share repurchase program of up to $200 million of the Company's issued and outstanding common stock.
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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.
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The program has a duration of three years, ending May 2, 2025. 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.
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In addition, it seeks to best leverage its rising talent through future rollout of a Leadership Potential Assessment and Manager Fundamentals program.
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The repurchase program may be suspended or discontinued at any time at the Company's discretion.
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The continued deployment of the new human resources system will allow leaders at all levels from across the businesses to collaborate in a common space to share best practices and support new leaders with development coaching to continue to invest in their career growth.
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As of December 31, 2022, the Company has repurchased 1,997,366 shares for an aggregate price of $85.9 million under this repurchase program. 6 Table of Co n tents During the first quarter of 2022, the Company committed to a plan to sell its Processing business, a business within the Company's Agtech reportable segment, as part of its portfolio management strategy in order to focus its resources on the higher growth and more profitable growing business within the Agtech segment.
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The Processing business was classified as held for sale as of March 31, 2022 and remains under such classification as of December 31, 2022. Customers and Products The Company's customers are located primarily throughout North America.
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The Company's products are primarily distributed to its customers using common carriers. The Company generally ships directly from its manufacturing plants to ensure on-time delivery while maintaining efficiency. Customers and product offerings by segment are described below.
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Other products offered include solar racking systems for both carports and pile-driven ground mount systems. 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.
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The primary raw materials the Company purchases are flat-rolled, structural and plate steel, aluminum coil and extrusions, and resins.
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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.
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In 2021, the Company began to expand and upgrade its Customer Relationship Management (CRM) system, which work continued into 2022, thus improving its visibility into sales account status and enabling cross-sell and up-sell opportunities. The CRM also provides important aggregate market data.
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As the pandemic is subsiding and tax credits for the Company's renewable energy customers begin to stabilize, the Company has seen a shift back towards traditional seasonality with the fourth quarter of 2022 being slower than experienced in 2021 and 2020. Governmental Regulation The Company's production processes involve the use of environmentally regulated materials.
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In 2023, the Company will continue to offer this program to both new and existing leaders, and will expand the program to include additional modules on influence, change management and coaching for development.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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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.
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.
Item 1A. Risk Factors The Company's business, financial condition and results of operations, and the market price for its common stock are subject to numerous risks, many of which are driven by factors that cannot be controlled or predicted.
Item 1A. Risk Factors The Company's business, financial condition, results of operations, and the market price for its common stock are subject to numerous risks, many of which are driven by factors that cannot be controlled or predicted.
Increased competition could force the Company to lower 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.
Increased competition could force the Company to lower 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 could cause the Company to lose market share.
Costs of future initiatives may be material and the savings associated with them are subject to a variety of risks, including the Company's inability to effectively eliminate duplicative back-office overhead and overlapping sales personnel, rationalize manufacturing capacity, synchronize information technology systems, consolidate warehousing and distribution facilities and shift production to more economical facilities.
Costs of future initiatives may be material and the savings associated with them are subject to a variety of risks, including the Company's inability to effectively eliminate duplicative back-office overhead, overlapping sales personnel, rationalize manufacturing capacity, synchronize information technology systems, consolidate warehousing and distribution facilities and shift production to more economical facilities.
The Company is subject to the risk that the Company, its employees, its affiliated entities, contractors, agents or their respective officers, directors, employees and agents may take actions determined to be in violation of any of these laws, for which the Company might be held responsible, particularly as the Company expands its operations geographically through organic growth and acquisitions.
The Company is subject to the risk that the Company, its employees, its affiliated entities, its contractors, its agents or their respective officers, directors, employees and agents may take actions determined to be in violation of any of these laws, for which the Company might be held responsible, particularly as the Company expands its operations geographically through organic growth and acquisitions.
As climate change continues to increase the severity of weather, physical effects—such as damage to facilities, capital equipment and inventory or disruption in production, product distribution or field operations as a result of heat, drought, wildfires, major storm events and shifts in regional weather patterns and intensities—may also significantly affect the Company's operations and financial results.
As climate change continues to increase the severity of weather, physical effects—such as damage to facilities, capital equipment and inventory or disruption in production, product distribution or field operations as a result of heat, drought, wildfires, major storm events and shifts in regional weather patterns and intensities—may also significantly affect the Company's business and financial results.
The Company could incur uninsured losses and liabilities arising from such events, and any resulting business interruptions could have an adverse effect on the Company's operations, cash flows and financial results. Risks Related to Information Technology The Company's business and financial performance may be adversely affected by cybersecurity attacks, information systems interruptions, equipment failures, and technology integration.
The Company could incur uninsured losses and liabilities arising from such events, and any resulting business interruptions could have an adverse effect on the Company's business, results of operations and cash flows. Risks Related to Information Technology The Company's business and financial performance may be adversely affected by cybersecurity attacks, information systems interruptions, equipment failures, and technology integration.
The timing and progress of many of the Company's renewable energy customers’ projects are impacted by incentives provided by the Federal solar tax credit also known as Investment Tax Credit ("ITC").
The timing and progress of many of the Company's renewable energy customers’ projects are impacted by incentives provided by the Federal solar tax credit also known as Investment Tax Credits ("ITC").
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; 17 Table of Co n tents • 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 businesses 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.
Tariffs placed on imported products used by the Company's customers, such as solar panels, 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, 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.
Therefore, the Company's cash flow 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.
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.
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 have 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 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.
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.
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.
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 40%, 47% and 40% of 2022, 2021 and 2020 of the Company's consolidated net sales, respectively, were recognized over time under the cost-to-cost method.
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.
In certain circumstances, if the Company does not comply with the terms of a government contract or with regulations or statutes, the Company could be subject to downward contract price adjustments or refund obligations or could in extreme circumstances be assessed civil and criminal penalties or be debarred or suspended from obtaining future contracts for a specified period of time.
In certain circumstances, if the Company does not comply with the terms of a government contract or with regulations or statutes, the Company could be subject to downward contract price adjustments or refund obligations or could in extreme circumstances be assessed civil and criminal penalties or be debarred or suspended from obtaining future contracts for a specified period of time. 19 Table of Contents
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 panels which has impacted the installation of, and which can and has reduced demand for, the Company's solar racking projects, as experienced in 2022.
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.
As the timing and progress of many of the Company's customers’ projects depend upon the supply of solar panels and components, the Company's operating results have been impacted by the disruption resulting from the above investigation and validation procedures.
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.
The Company continually seeks ways to simplify or improve processes, eliminate excess capacity and reduce costs in all areas of its operations, which from time to time includes restructuring and integration activities. The Company has implemented significant restructuring activities across its manufacturing, sales and distribution footprint, which include workforce reductions and facility consolidations.
The Company continually strives to simplify or improve processes, eliminate excess capacity and reduce costs in all areas of its operations, which from time to time includes restructuring and integration activities. The Company has implemented significant restructuring and integration activities across its manufacturing, sales and distribution footprint, which include workforce reductions and facility consolidations.
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.
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.
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.
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.
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 operations and financial results.
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.
Compliance with these laws and regulations sometimes involves substantial operating costs and capital expenditures, and failure to maintain or achieve compliance with these laws and regulations or with the permits required for the Company's operations could result in substantial costs and liabilities, such as fines and civil or criminal sanctions, third-party claims for property damage or personal injury, cleanup costs or temporary or permanent discontinuance of operations, including claims arising from the businesses and facilities that the Company has sold.
Failure to maintain or achieve compliance with these laws and regulations or with the permits required for the Company's operations could result in substantial costs and liabilities, such as fines and civil or criminal sanctions, third-party claims for property damage or personal injury, cleanup costs or temporary or permanent discontinuance of operations, including claims arising from the businesses and facilities that the Company has sold.
The Company competes in its principal markets with companies of various sizes, some of which have greater scale and financial and other resources than the Company, as well as have better established brand names and may be better able to withstand a change in conditions in the 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, 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.
A significant decline in the 18 Table of Co n tents Company's operating income or use of the Company's Credit Agreement (or other additional indebtedness) for acquisitions, operations and capital expenditures could cause the Company to violate these covenants which could result in the Company incurring additional financing fees that would be costly and adversely affect the Company's profitability and cash flows.
A significant decline in the Company's operating income or use of the Company's Credit Agreement (or other additional indebtedness) for acquisitions, operations and capital expenditures could cause the Company to violate these covenants which could result in the Company incurring additional financing fees that would be costly and adversely affect the Company's profitability and cash flows.
The Company's business is highly competitive and increased competition could reduce the Company's gross profit, net income, and cash flow. The principal markets that the Company serves are highly competitive. Competition is based primarily on product functionality, quality, price, raw material and inventory availability, and the ability to meet delivery schedules dictated by customers.
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.
Changes in laws, regulations or enforcement policies, including without limitation new or additional regulations 20 Table of Co n tents affecting disposal of hazardous substances and waste, greenhouse gas emissions or use of fossil fuels, could have a material adverse effect on the Company's business, financial condition, or results of operations.
Changes in laws, regulations or enforcement policies, including without limitation new or additional regulations affecting disposal of hazardous substances and waste, greenhouse gas emissions or use of fossil fuels, could have a material adverse effect on the Company's business, financial condition, or results of operations.
Although the 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, China and Japan, and are subject to risks associated with doing business internationally.
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.
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 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.
Product liability claims can be expensive to defend and can divert the attention of the Company's management and other personnel for significant periods, 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.
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.
The Company's operations are subject to seasonal fluctuations and the cyclical nature of construction activity that may impact the Company's cash flow. The Company's net sales are generally lowest in the first quarter primarily as a result of reduced activity in the building industry due to inclement weather.
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.
There can be no assurance that the Company will be able to successfully maintain, enhance and upgrade the Company's IT systems as necessary to effectively address changing cybersecurity risks and legal requirements, and the Company's efforts to do so may be costly.
There can be no assurance that the Company will be able to successfully maintain, enhance and upgrade the Company's IT systems as necessary to effectively address changing cybersecurity risks and legal requirements, and the Company's efforts to do so may be affect the Company's results of operations.
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 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.
The Company currently faces challenging market conditions, and domestic or global economies, or certain industry sectors of those economies that are key to the Company's sales, may further deteriorate, which 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.
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.
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. Climate change and climate change legislation or regulations may adversely affect the Company's business.
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.
A loss of sales, whether due to decreased demand from the end markets the Company serves, the loss or bankruptcy of any significant customer in these markets, a decrease in the prices that the Company can realize from sales of its products to customers in these markets, or a significant decrease in business from any of the Company's major customers, could have a significant adverse effect on the Company's profitability and cash flows.
A loss of sales from the Company's significant customers, whether due to a decrease in demand from the end markets the Company serves, the loss or bankruptcy of any significant customer, a decrease in the prices that the Company can realize from sales of its products to its significant customers, or a significant decrease in business from any of the Company's significant customers, could have an adverse effect on the Company's business, results of operations and cash flows.
The Company's sales originating outside the United States represented approximately 4% of the Company's consolidated net sales during the year ended December 31, 2022.
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.
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 impact of 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 expected financial benefits of such plans, and therefore, potentially resulting in a material adverse effect on the Company's business, results of operations and financial condition.
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.
The Company's ten largest customers accounted for approximately 41%, 38%, and 35% of the Company's net sales during 2022, 2021, and 2020, respectively, with its largest customer, a retail home improvement center, accounting for approximately 14%, 13% and 14% of the Company's consolidated net sales during each of the years 2022, 2021, and 2020, respectively.
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.
As of December 31, 2022, the Company had $91.0 million of outstanding indebtedness. The Company's ability to make scheduled payments on, or refinance, its debt obligations depend on the Company's financial condition and operating performance, which are subject to prevailing economic, industry and competitive conditions and to certain financial, business, legislative, regulatory and other factors beyond the Company's control.
The Company's ability to make scheduled payments on, or refinance, its future debt obligations depend on the Company's financial condition and operating performance, which are subject to prevailing economic, industry and competitive conditions and to certain financial, business, legislative, regulatory and other factors beyond the Company's control.
The Company cannot assure you that any current or future claims will not adversely affect the Company's reputation, financial condition, operating results, and cash flows. The Company could incur substantial costs in order to comply with, or to address any changes in or violations of, environmental, health, safety and other laws.
The Company could incur substantial costs in order to comply with, or to address any changes in or violations of, environmental, health, safety and other laws that could adversely affect the Company's business, financial condition, results of operations, and cash flows.
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 expiration, elimination or reduction of solar rebates, credits and incentives may adversely impact the Company's business.
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 markets in which the Company operates are characterized by changing technologies and introductions of new products and services, so the Company also faces competition from the introduction by competitors of new products or technologies.
Additionally, the principal markets the Company participates in are characterized by changing technologies and new products and services, thus the Company also faces competition from the introduction of new products and services or technologies by competitors.
The Company's operations and facilities are subject to a variety of stringent federal, state, local, and foreign laws and regulations, including those relating to the protection of the environment and human health and safety.
The Company's operations and facilities are subject to a variety of stringent federal, state, local, and foreign laws and regulations, including those relating to the protection of the environment and human health and safety. Compliance with these laws and regulations sometimes involves substantial operating costs and capital expenditures.
As the Company has seen with the broader market dynamics in 2022, and potentially continuing in 2023, availability and pricing of raw materials can be volatile due to a number of factors beyond its control, including general economic conditions, domestic and worldwide supply and demand, labor costs and availability, competition, freight costs and transportation, import duties, tariffs, and currency exchange rates.
The availability and pricing of raw materials and component parts can be volatile due to a number of factors beyond the Company's control, including general economic conditions, domestic and worldwide supply and demand, labor costs and availability, competition, freight costs and transportation, import duties, tariffs, and currency exchange rates.
The Company has had recent changes in the senior executive team that were planned and/or are expected to be mitigated, however, the Company cannot assure you that the Company will be able to retain its existing senior management personnel, or that the Company will have a successor prepared and available upon any loss of such personnel, or that the Company will be able to attract additional qualified personnel through external recruitment when needed.
The Company cannot provide assurance that the Company will be able to retain its existing senior management personnel, or that the Company will have a successor prepared and available upon any loss of such personnel, or that the Company will be able to attract additional qualified personnel through external recruitment when needed.
The loss of any of those customers would adversely affect the Company's business, results of operations, and cash flows.
A significant portion of the Company's net sales are concentrated with a few customers. The loss of any of those customers would adversely affect the Company's business, results of operations, and cash flows.
The Company is subject to certain additional regulations as a United States government contractor or subcontractor. Some of the Company's revenue is derived from contracts with agencies of the United States government and subcontracts with its prime contractors.
Some of the Company's revenue is derived from contracts with agencies of the United States government and subcontracts with its prime contractors.
A variety of federal, state and local government agencies provide incentives to promote electricity generation from renewable sources such as solar power. These incentives are in the form of rebates, tax credits and other financial incentives which help to motivate end users, distributors, system integrators and others to install solar powered generating systems.
These incentives are in the form of rebates, tax credits and other financial incentives which help to motivate end users, distributors, system integrators and others to install solar powered generating systems.
The Company has been impacted by cost increases and disruptions to the Company's supply deliveries, which disruptions have subsided in the latter part of 2022. The Company may not be successful in passing along pricing increases to its customers or in its efforts to mitigate the impact of supply chain disruptions.
The Company may not be successful in passing along pricing increases to its customers or in its efforts to mitigate the impact of supply chain disruptions.
Economic, political, and other risks associated with foreign operations could adversely affect the Company's financial results and cash flows.
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.
Security breaches can result in the misappropriation, destruction or unauthorized disclosure of confidential information or personal data belonging to the Company or to the Company's employees, partners, customers, or suppliers, damage customer, business partner and employee relationships and the Company's reputation and result in legal claims and proceedings, liability and penalties under data protection laws and regulations.
Security breaches can result in the misappropriation, destruction or unauthorized disclosure of confidential information or personal data belonging to the Company or to the Company's employees, partners, customers, or suppliers.
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 30% credit. The nature of the Company's business exposes the Company to product liability, product warranty and other claims, and other legal proceedings.
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.
Some of the Company's IT systems have experienced past security breaches, and, although they did not have a material adverse effect on the Company's operating results, there can be no assurance that future incidents will not have material adverse effects on the Company's operations or financial results.
There can be no assurance that future incidents will not have material adverse effects on the Company's operations or financial results.
The Company's business operations and the market for its securities could also be adversely affected by additional factors that are not presently known to the Company, or that it currently considers to be immaterial to its operations. 12 Table of Co n tents 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.
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.
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. 15 Table of Co n tents The Company's ongoing and expected restructuring plans and other cost savings initiatives may not be as effective as the Company anticipates, and the Company may fail to realize the cost savings and increased efficiencies that the Company expects to result from these actions, which could negatively affect the Company's operating results.
The Company's ongoing and expected restructuring plans and other cost savings initiatives may not be as effective as the Company anticipates, and the Company may fail to realize the cost savings and increased efficiencies that the Company expects to result from these actions, which could negatively affect the Company's business, results of operations and financial condition.
Even when the Company successfully innovates and develops new and enhanced products and services, the Company often incurs substantial costs in doing so, and the Company's profitability may suffer. If the subcontractors the Company relies upon do not perform their contractual obligations, the Company's revenues and cash flows would be adversely affected.
Even when the Company successfully innovates and develops new and enhanced products and services, the Company often incurs substantial costs in doing so, and the Company's revenue, gross profit, net income and cash flows may be impacted.
Compliance with the varying data privacy regulations across the United States and around the world has required, and will continue to require, significant expenditures.
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.
The Company is involved 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, 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 recent Inflation 19 Table of Co n tents Reduction Act ("IRA") signed into law on August 16, 2022, provides a 30% ITC for projects started prior to the guidance issued by the Department of the Treasury and published in the Federal Register on November 30, 2022.
The Inflation Reduction Act ("IRA") signed into law on August 16, 2022, among other things, provides for a variety of enhanced ITC and Production Tax Credits for renewable energy systems subject to specific dates and requirements.
Removed
In addition, commodity price fluctuations and increased competition could force the Company to lower 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.
Added
The Company's business operations and the market for its securities could also be adversely affected by additional factors that are not presently known to the Company, or that it currently considers to be immaterial to its operations.
Removed
In reference to aforementioned tariffs on imported solar panels, the United States currently imposes antidumping and countervailing duties ("AD/CVD") on certain imported solar panels and components from certain countries in Southeast Asia. The AD/CVD can change over time pursuant to annual reviews conducted by the U.S.
Added
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.
Removed
Department of Commerce ("USDOC"), and a change in duty rates could have an adverse impact on the Company's operating results. In early 2022, the USDOC was petitioned to investigate alleged circumvention of AD/CVD on Chinese imports of solar panels and components produced in other countries in Southeast Asia.
Added
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.
Removed
In March 2022, the USDOC announced that it would investigate the circumvention alleged in the petition and in December 2022, it issued a preliminary report that found occurrences of the alleged circumvention.
Added
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.
Removed
Concurrent with this investigation, in June 2022, the President of the United States issued an Executive Order to suspend any tariffs that result from this investigation for two years. 13 Table of Co n tents Furthermore, in June 2022, the Uyghur Forced Labor Prevention Act ("UFLPA") was enacted.
Added
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.
Removed
The UFLPA requires traceability of components of imported goods to validate that the components are not sourced from areas in the Xinjiang region of China, which may be held at U.S. customs until the importer is able to prove where they have been sourced.
Added
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.
Removed
The COVID-19 pandemic has significantly impacted worldwide economic conditions and adversely impacted, and may continue to adversely impact the Company's business, results of operations, financial condition, and cash flows.
Added
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.
Removed
The COVID-19 pandemic began to impact the Company's operations late in the first quarter of 2020 as government authorities imposed mandatory closures, work from home orders and social distancing protocols, which resulted in temporary curtailment of some operations and increased costs to operate certain facilities, and has continued to impact the Company's operations as new strains of the COVID-19 virus have been identified.
Added
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.
Removed
During 2021 and to a lesser extent in 2022, the COVID-19 pandemic, as well as broader market dynamics have resulted in impacts to the Company's business, including increased material cost inflation, labor availability issues (due to illness and otherwise) and logistics challenges and costs increases and were impacted by supply constraints for materials and commodities used in the Company's operations.
Added
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.
Removed
It is not possible to predict the ultimate impact of the COVID-19 pandemic, as well as the emergence of new virus strains and availability of effective treatment on the Company's business, results of operations, financial position or cash flows, and the duration of such impact may vary dramatically by geography and line of business.
Added
If the subcontractors the Company relies upon do not perform their contractual obligations, the Company's business, results of operations and cash flows would be adversely affected.
Removed
However, while the COVID-19 pandemic subsides, the Company may experience continued adverse impacts of this pandemic on the Company's business and financial statements, including through disruptions to the supply chain, limiting access to the Company's distribution channels, reducing the availability of the Company's workforce and subcontractors and heightened cybersecurity risk, all of which may pose material risk to the Company's results of operations, financial condition, and cash flows.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe number, type, location and classification of the properties used by the Company's operations by segment and corporate as of December 31, 2022, are as follows: Number and Type of Properties Plant Distribution Center Office Total Renewables 4 1 3 8 Agtech 5 — 1 6 Residential Products 14 — 1 15 Infrastructure Products 2 — — 2 Corporate — — 2 2 Total 25 1 7 33 Location of Properties Classification of Properties Domestic Foreign Owned Leased Renewables 7 1 — 8 Agtech 4 2 1 5 Residential Products 15 — 6 9 Infrastructure Products 2 — 2 — Corporate 2 — — 2 Total 30 3 9 24 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, 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.
In addition, the Company believes that its properties are located to optimize customer service, market requirements, distribution capability and freight costs. 21 Table of Co n tents
In addition, the Company 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

0 edited+1 added−1 removed2 unchanged
Removed
There were no material legal proceedings terminated, settled, or otherwise resolved during the fourth quarter of the year ended December 31, 2022.
Added
See 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.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+0 added−1 removed3 unchanged
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, 2022 537,756 $ 45.48 537,756 $ 120,001,218 November 1 - 30, 2022 — $ — — $ 120,001,218 December 1 - 31, 2022 126,157 $ 46.58 126,157 $ 114,124,306 Total 663,913 $ 45.69 663,913 The Company did not sell unregistered equity securities during the period covered by this report.
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.
However, the Company believes that it has a significantly higher number of beneficial owners because of the number of shares that are held by banks, brokers, and other financial institutions. The Company did not declare any cash dividends during the years ended December 31, 2022 and 2021 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, 2023 and 2022 and does not expect to pay any in the foreseeable future.
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 21, 2023, there were approximately 32 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 20, 2024, there were approximately 29 shareholders of record of the Company’s common stock.
Removed
The following table sets forth purchases made by or on behalf of the Company during the quarter ended December 31, 2022.

Item 7. Management's Discussion & Analysis

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

51 edited+32 added−44 removed36 unchanged
Biggest changeCash Flows The following table sets forth selected cash flow data for the years ended December 31 (in thousands): 2022 2021 Cash provided by (used in): Operating activities of continuing operations $ 102,691 $ 25,072 Investing activities of continuing operations (71,683) 24,714 Financing activities of continuing operations (25,007) (66,612) Discontinued operations — (2,178) Effect of exchange rate changes (1,242) (201) Net increase (decrease) in cash and cash equivalents $ 4,759 $ (19,205) 29 Table of Co n tents Operating Activities Net cash provided by operating activities of continuing operations 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, held for sale valuation allowance, 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.
Biggest change"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.
Financing Activities Net cash used in financing activities for 2022 of $25.0 million consisted of $89.5 million of common stock repurchases, $2.0 million payment of debt issuance costs, offset by net proceeds from borrowings of $66.5 million.
Net cash used in financing activities for 2022 of $25.0 million consisted of $89.5 million of common stock repurchases, $2.0 million payment of debt issuance costs, offset by net proceeds from borrowings of $66.5 million.
Accounting for Acquired Assets and Liabilities Assumed in a Business Combination When the Company acquires a business, the Company allocates the purchase price to the assets acquired and liabilities assumed in the transaction at their respective estimated fair values. The Company records any premium over the fair value of net assets acquired as goodwill.
Accounting for Fair Value of Assets Acquired in a Significant Business Combination When the Company acquires a business, the Company allocates the purchase price to the assets acquired and liabilities assumed in the transaction at their respective estimated fair values. The Company records any premium over the fair value of net assets acquired as goodwill.
Shares repurchases of 1,997,366 shares repurchased under the Company's authorized share repurchase program totaled $85.1 million with the balance repurchased of $4.4 million of common stock repurchases related to the net settlement of tax obligations for participants in the Company's equity incentive plans.
Repurchases of 1,997,366 shares under the Company's authorized share repurchase program totaled $85.1 million with the balance of $4.4 million of common stock repurchases related to the net settlement of tax obligations for participants in the Company's equity incentive plans.
The Company test goodwill and indefinite-lived intangible assets for impairment on an annual basis as of October 31 and at interim dates when indicators of impairment are present. Indicators of impairment could include a significant long-term adverse change in business climate, poor indicators of operating performance, or a sale or disposition of a significant portion of a reporting unit.
The Company tests goodwill and indefinite-lived intangible assets for impairment on an annual basis as of October 31 and at interim dates when indicators of impairment are present. Indicators of impairment could include a significant long-term adverse change in business climate, poor indicators of operating performance, or a sale or disposition of a significant portion of a reporting unit.
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 review 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, 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.
Revenue Recognition on Contracts with Customers The vast majority of the Company's sales contracts are for standard products with revenue recognized at the point in time the Company transfer control to the customer.
Revenue Recognition on Contracts with Customers The vast majority of the Company's sales contracts are for standard products with revenue recognized at the point in time the Company transfers control to the customer.
The Company test its indefinite-lived intangible assets for impairment by comparing the fair value of the indefinite-lived intangible asset, determined using a discounted cash flow model, with its carrying amount.
The Company tests its indefinite-lived intangible assets for impairment by comparing the fair value of the indefinite-lived intangible asset, determined using a discounted cash flow model, with its carrying amount.
The Company defines operating margin by segment as a percentage of total income from operations by segment to total net sales by segment and consolidated operating margin as a percentage of total consolidated income from operations to total consolidated net sales.
The Company defines consolidated gross margin as a percentage of total consolidated gross profit to total consolidated net sales. The Company defines operating margin by segment as a percentage of total income from operations by segment to total net sales by segment and consolidated operating margin as a percentage of total consolidated income from operations to total consolidated net sales.
Further, offsetting the impact of the decline in payables, the Company also reduced its investment in inventory as supply chain challenges subsided in the current year and the Company was able to better align inventory levels with lower sales volumes.
Further, offsetting the impact of the decline in payables, the Company also reduced its investment in inventory as supply chain challenges subsided in 2022 and the Company was able to better align inventory levels with lower sales volumes.
Results of Operations Year Ended December 31, 2022 Compared to Year Ended December 31, 2021 For a discussion of the Company's results of operations for the year ended December 31, 2021 and for a comparison of such results of operations for the year ended December 31, 2020 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, 2021 that was filed with the SEC on February 23, 2022.
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.
However, revenue representing 40%, 47% and 40% of the Company's 2022, 2021 and 2020 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 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.
The Company test goodwill for impairment at the reporting unit level. The Company identifies the Company's reporting units by assessing whether the components of the Company constitute businesses for which discrete financial information is available and segment management regularly reviews the operating results of those components. The Company has eight reporting units, all of which have goodwill.
The Company tests goodwill for impairment at the reporting unit level. The Company identifies the Company's reporting units by assessing whether the components of the Company constitute businesses for which discrete financial information is available and segment management regularly reviews the operating results of those components. The Company has seven reporting units, all of which have goodwill.
The effective tax rates for 2022 and 2021 exceeded the U.S. federal statutory rate of 21% due to state taxes and nondeductible permanent differences partially offset by an excess tax benefit on stock-based compensation.
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 significant assumptions used to estimate the value of the intangible assets included discount rates, customer attrition, and certain assumptions that form the basis of the forecasted results (e.g., 31 Table of Co n tents revenue growth rates and operating profit margin).
The significant assumptions used to estimate the value of the intangible assets included discount rates, customer attrition, and certain assumptions that form the basis of the forecasted results (e.g., revenue growth rates and operating profit margin).
These factors include but are not limited to changes in general economic conditions, interest rates, exchange rates, commodity costs, expiration of solar rebates, supply limitations that impact the availability of solar panels and therefore solar racking installations, demand for residential construction, demand for repair and remodeling, governmental policies and funding, tax policies and incentives, tariffs, trade policies, weather patterns, the level of non-residential construction and infrastructure projects, the need for protection of high value assets, demand for renewable energy sources, and climate change.
These factors include but are not limited to changes in general economic conditions, interest rates, exchange rates, commodity costs, federal subsidies for renewable energy projects, supply limitations that impact the availability of solar modules and therefore solar racking installations, demand for residential construction, demand for repair and remodeling, governmental policies and funding, tax policies and incentives, tariffs, trade policies, weather patterns, the level of non-residential construction and infrastructure projects, demand for renewable energy sources, and climate change.
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.
Recent 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.
Investing Activities Net cash used in investing activities of continuing operations for 2022 of $71.7 million consisted of net cash paid of $51.6 million for the acquisition of Quality Aluminum Products in the third quarter of 2022 and capital expenditures of $20.1 million.
Net cash used in investing activities for 2022 of $71.7 million consisted of net cash paid of $51.6 million for the acquisition of QAP in the third quarter of 2022 and capital expenditures of $20.1 million.
The net investment in working capital was largely the result of the timing and the settlement of payables in the current year related to inventory received in the prior year.
The net investment in working capital was largely the result of the timing and the settlement of payables in 2022 related to inventory received in 2021.
Liquidity and Capital Resources The following table sets forth the Company's liquidity position as of: (in thousands) December 31, 2022 December 31, 2021 Cash and cash equivalents $ 17,608 $ 12,849 Availability on revolving credit facility 304,505 369,305 $ 322,113 $ 382,154 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, 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.
Goodwill and Other Indefinite-lived Intangible Asset Impairment Testing The Company's goodwill and indefinite-lived intangible asset balances of $512.4 million and $55.5 million, respectively, which in aggregate represent 46% of total assets as of December 31, 2022, are subject to impairment testing.
Goodwill and Other Indefinite-lived Intangible Asset Impairment Testing The Company's goodwill and indefinite-lived intangible asset balances of $513.4 million and $52.3 million, respectively, which in aggregate represent approximately 45% of total assets as of December 31, 2023, are subject to impairment testing.
During the interim periods of 2022, the Company concluded that no indicators of impairment existed at interim dates and did not perform any quantitative interim impairment tests related to goodwill and indefinite-lived intangible assets.
During the interim periods of 2023, the Company concluded that no indicators of impairment existed at interim dates and did not perform any quantitative interim impairment tests related to goodwill and indefinite-lived intangible assets. The Company conducts its annual impairment test as of October 31, during which the Company tests goodwill and other indefinite-lived intangible assets for impairment.
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. 23 Table of Co n tents Company Overview The Company is a leading manufacturer and provider of products and services for the renewable energy, residential, agtech, and infrastructure markets.
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.
The Company uses the Credit Agreement to provide liquidity and capital resources primarily for the Company's U.S. operations. 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, 2022 and 2021, the Company's foreign subsidiaries held $15.2 million and $11.3 million of cash, respectively.
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.
This Credit Agreement replaced and paid off all amounts owed under the Sixth Amended and Restated Credit Agreement dated as of January 24, 2019. 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 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 Company performs sensitivity analyses on significant assumptions to evaluate how changes in the estimated fair values of reporting units and indefinite-lived intangible assets respond to changes in assumptions, specifically the revenue growth rates and the weighted-average cost of capital.
The Company performs sensitivity analyses on significant assumptions to evaluate how changes in the estimated fair values of reporting units and indefinite-lived intangible assets respond to changes in assumptions, specifically the revenue growth rates and the weighted-average cost of capital. 30 Table of Contents As a result of the Company's quantitative testing, none of the reporting units as of the Company's testing date had carrying values in excess of their fair values, nor were any of the reporting units "at-risk" of impairment.
The way the Company characterizes the assets has important implications, as long-lived assets with definitive lives, for example, are depreciated or amortized, whereas goodwill is tested annually for impairment, as explained above. With respect to determining the fair value of assets, the most subjective estimates involve valuations of long-lived assets, such as identified intangible assets and property, plant, and equipment.
The way the Company characterizes the assets has important 29 Table of Contents implications, as long-lived assets with definitive lives, for example, are depreciated or amortized, whereas goodwill is tested annually for impairment, as explained above.
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): Impact of 2022 2021 Total Change Portfolio Management Ongoing Operations Income from operations: Renewables $ 25,243 6.7 % $ 20,158 4.7 % $ 5,085 $ — $ 5,085 Residential 126,458 16.5 % 105,821 16.7 % 20,637 — 20,637 Agtech 2,914 1.7 % (931) (0.5) % 3,845 5,070 (1,225) Infrastructure 9,003 11.8 % 8,911 12.2 % 92 — 92 Unallocated Corporate Expenses (33,516) (2.4) % (36,971) (2.8) % 3,455 — 3,455 Consolidated income from operations $ 130,102 9.4 % $ 96,988 7.2 % $ 33,114 $ 5,070 $ 28,044 The Renewables segment generated an operating margin of 6.7% in 2022 compared to 4.7% in 2021.
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.
During 2021, the Company recognized $8.3 million of impairment charges on its indefinite-lived intangible assets, due to a rebranding initiative resulting in the discontinuation of two indefinite-lived trademarks in the Agtech segment. Recent Accounting Pronouncements New accounting pronouncements are issued periodically that affect the Company's current and future operations.
The Company recognized no impairment charges related to intangible assets during the year ended December 31, 2022. The Company recognized $8.3 million of impairment charges on its indefinite-lived intangible assets during the year ended December 31, 2021 due to a rebranding initiative resulting in the discontinuation of two indefinite-lived trademarks in the Agtech segment.
Net cash provided by operating activities of continuing operations for 2021 of $25.1 million consisted of income from continuing operations of $74.5 million, non-cash net charges totaling $54.6 million, which include depreciation, amortization, intangible asset impairment, stock compensation, and other non-cash charges, offset by a net investment in working capital and other net assets of $104.0 million.
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.
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 Company defines consolidated gross margin as a percentage of total consolidated gross profit to total consolidated net sales.
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.
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.
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.
The Company operates and reports its results in the following four reporting segments: • Renewables • Residential • Agtech • Infrastructure Demand for products and services in the segments and end markets the Company's businesses serve are subject to economic conditions that are influenced by various factors.
The Company's operational infrastructure provides the necessary scale to support local, regional, and national customers in each of its markets. Demand for products and services in the segments and end markets the Company's businesses serve are subject to economic conditions that are influenced by various factors.
The Company conducts its annual impairment test on all eight reporting units as of October 31, during which the Company test goodwill and other indefinite-lived intangible assets for impairment. On an annual basis, the quantitative goodwill impairment test consists of comparing the fair value of a reporting unit with the carrying amount of the reporting unit including goodwill.
On an annual basis, the quantitative goodwill impairment test consists of comparing the fair value of a reporting unit with the carrying amount of the reporting unit including goodwill.
Net cash used in financing activities for 2021 of $66.6 million consisted of $120.6 million in payments on long-term debt and $6.5 million of common stock repurchases related to the net settlement of tax obligations for participants in the Company's equity incentive plans, offset by $59.5 million in proceeds from borrowing on the Company's long-term credit facility and $1.0 million from the issuance of common stock from stock option exercises during the year.
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.
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. 30 Table of Co n tents Our most critical accounting estimates that require the most difficult, subjective and complex judgments include: • revenue recognition on contracts with customers; • the estimation of fair value for acquired assets and liabilities assumed in business combination transactions; and • the assessment of recoverability of goodwill and other indefinite-lived intangible assets.
Our most critical accounting estimates that require the most difficult, subjective and complex judgments include: • revenue recognition on contracts with customers; • the determination of fair value of assets acquired in significant business combination transactions; and • the assessment of recoverability of goodwill and other indefinite-lived intangible assets.
During 2021, the Company recognized intangible asset impairment charges of $8.3 million. The impairment was the result of a rebranding initiative in 2021 that resulted in the discontinuation of certain indefinite-lived trademarks in the Agtech segment.
The Company recognized intangible asset impairment charges of $3.8 million during the year ended December 31, 2023 related to indefinite-lived trademark intangible assets due to a rebranding initiative that resulted in the discontinuation of certain indefinite-lived trademarks in the Agtech segment, along with the write-off of amortizing intangibles related to a discontinued product line in the Renewables segment.
The Company recognized a provision for income taxes of $29.1 million, an effective tax rate of 26.1%, for 2022 compared with a provision for income taxes of $25.0 million, an effective tax rate of 25.2%, for 2021.
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 following table sets forth selected results of operations data (in thousands) and its percentages of net sales for the years ended December 31: 2022 2021 Net sales $ 1,389,966 100.0 % $ 1,339,783 100.0 % Cost of sales 1,071,272 77.1 % 1,049,772 78.4 % Gross profit 318,694 22.9 % 290,011 21.6 % Selling, general, and administrative expense 188,592 13.5 % 184,723 13.8 % Intangible asset impairment — — % 8,300 0.6 % Income from operations 130,102 9.4 % 96,988 7.2 % Interest expense 4,047 0.3 % 1,639 0.1 % Other expense (income) 14,565 1.1 % (4,213) (0.3) % Income before taxes 111,490 8.0 % 99,562 7.4 % Provision for income taxes 29,084 2.1 % 25,046 1.8 % Income from continuing operations 82,406 5.9 % 74,516 5.6 % Income from discontinued operations — — % 1,113 0.1 % Net income $ 82,406 5.9 % $ 75,629 5.6 % 25 Table of Co n tents The following table sets forth the Company’s net sales by reportable segment for the years ended December 31 (in thousands): Impact of 2022 2021 Total Change Acquisitions Portfolio Management Ongoing Operations Net sales: Renewables $ 377,567 $ 432,096 $ (54,529) $ — $ — $ (54,529) Residential 767,248 635,505 131,743 26,449 — 105,294 Agtech 168,868 199,161 (30,293) — (12,488) (17,805) Infrastructure 76,283 73,021 3,262 — — 3,262 Consolidated $ 1,389,966 $ 1,339,783 $ 50,183 $ 26,449 $ (12,488) $ 36,222 Consolidated net sales increased from 2021 by $50.2 million, or 3.7%, to $1.4 billion for 2022 compared to 2021.
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.
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 . 28 Table of Co n tents Uses of Cash / Cash Requirements The Company's material short-term cash requirements primarily include accounts payable, certain employee and retiree benefit-related obligations, operating lease obligations, interest payments on outstanding debt, repayments of borrowing on its revolving credit facility, capital expenditures, and other purchase obligations originating in the normal course of business for inventory purchase orders and contractual service agreements.
Uses of Cash / Cash Requirements The Company's material short-term cash requirements primarily include accounts payable, certain employee and retiree benefit-related obligations, operating lease obligations, capital expenditures, and other purchase obligations originating in the normal course of business for inventory purchase orders and contractual service agreements.
The Company continues to remain focused on managing its working capital, closely monitoring customer credit and collection activities, and working to extend payment terms with its vendors. The Company believes its liquidity, together with the cash expected to be generated from operations, should be sufficient to fund working capital needs and growth initiatives for the foreseeable future.
The Company believes its liquidity, together with the cash expected to be generated from operations, should be sufficient to fund working capital needs and growth initiatives for the foreseeable future. The Company can and does use its revolving credit facility to provide liquidity and capital resources primarily for the Company's U.S. operations when necessary.
As of December 31, 2022, the Company has repurchased 1,997,366 shares for an aggregate price of $85.9 million under this repurchase program.
As of December 31, 2023, the Company has repurchased 2,518,941 shares for an aggregate price of $111.0 million under this repurchase program, including 521,575 shares repurchased for an aggregate price of $25.2 million during the year ended December 31, 2023.
The Company serves customers primarily in North America including renewable energy (solar) developers, institutional and commercial growers of food and plants, home improvement retailers, wholesalers, distributors, and contractors. The Company's operational infrastructure provides the necessary scale to support local, regional, and national customers in each of its markets.
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.
There were no impairment charges against goodwill recorded during the years ended December 31, 2022, 2021, and 2020. 32 Table of Co n tents The Company did not recognize any impairment charges on its indefinite-lived intangible assets in 2022 and 2020.
There were no impairment charges against goodwill recorded during the years ended December 31, 2023, 2022, and 2021.
While quote activity remains robust, order backlog was also impacted by continued rescheduling and re-scoping of projects and decreased 13% year over year. Net sales in the Infrastructure segment increased 4.5%, or $3.3 million, to $76.3 million in 2022 compared to $73.0 million in 2021. The increase in revenue was driven by growth in demand for fabricated products.
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.
The decrease in operating margin was the result of the expected lower margins generated by QAP as the Company continues to integrate them operationally, partially offset by the benefit of improved alignment of price actions and input costs, along with continued solid execution resulting from 80/20 productivity initiatives.
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.
Net cash provided by investing activities of continuing operations for 2021 of $24.7 million consisted of net proceeds of $38.1 million from the sale of the Company's Industrial business in the first quarter of 2021, $4.1 million from the receipt of a final working capital settlement from the prior year acquisition of TerraSmart, and proceeds of $0.2 million from the sale of property and equipment, offset by capital expenditures of $17.7 million.
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.
The $52.1 million preliminary purchase price for the acquisition of QAP was financed primarily through borrowing on the Company's revolving credit facility. Additional cash payments may be required for customary adjustments as provided for in the membership interest purchase agreement.
The $10.4 million preliminary purchase price for the acquisition of a privately held Utah-based company was financed primarily through borrowing on the Company's revolving credit facility.
The decrease in expense was largely the result of lower performance-based compensation 27 Table of Co n tents expense related to equity-based awards in the Company's deferred compensation plan that are valued based on its 200-day average stock price as compared to the prior year. Interest expense increased $2.4 million to $4.0 million for 2022 from $1.6 million for 2021.
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.
Net sales in the Renewables segment decreased 12.6%, or $54.5 million, to $377.6 million in 2022 compared to $432.1 million in 2021.
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.
The increase in expense was primarily due to higher outstanding balances on the Company's revolving credit facility during the current year along with higher interest rates compared to the prior year. The outstanding balances on the Company's revolving credit facility were $91.0 million and $23.8 million as of December 31, 2022, and 2021, 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.
Removed
Recent Trends The broader market dynamics over the past two years, which has included the residual impact of COVID-19, have resulted in impacts to the Company, including material cost inflation, labor availability issues and logistics costs increases.
Added
Company Overview The Company is a leading manufacturer and provider of products and services for the renewable energy, residential, agtech, and infrastructure markets.
Removed
The Company has also been impacted from supply constraints for materials and commodities used in its operations and from solar panels shortages used by the Company's customers in conjunction with the goods and services the Company provides. In certain instances these constraints have resulted in project delays, cost inflation and logistical delays.
Added
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.
Removed
The Company continues to work with its customers and suppliers in this dynamic environment to better align pricing, understand the existing and potential future impacts to the supply chain, and make efforts to mitigate such impacts.
Added
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.
Removed
While certain of these pressures have subsided over the latter part of 2022, the Company expects that some of these dynamics will continue into 2023 and could continue to have an impact on demand, material costs, labor and logistics. In early 2022, the U.S.
Added
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.
Removed
Department of Commerce ("USDOC") was petitioned to investigate alleged circumvention of anti-dumping and countervailing duties on Chinese imports of solar panels produced in other countries in Southeast Asia. In March 2022, the USDOC announced that it would investigate the circumvention alleged in the petition.
Added
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.
Removed
In June 2022, the President of the United States issued an Executive Order to suspend any tariffs that result from this investigation for two years. In December 2022, the USDOC issued a preliminary report that identified occurrences of the alleged circumvention against specific solar panel manufacturers, but also cleared other manufacturers.
Added
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.
Removed
No retroactive tariffs or penalties are expected against the former group. The original complainant is expected to appeal these USDOC findings and decisions, including pursuit of a temporary restraining order. In June 2022, the Uyghur Forced Labor Prevention Act ("UFLPA") was enacted.
Added
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.
Removed
The UFLPA requires traceability of components of imported goods to validate that the components are not sourced from areas in the Xinjiang region of China. There are reports that solar panels continue to be held at U.S. customs until the importer is able to prove where they have been sourced.
Added
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.
Removed
It is the Company's understanding that these panels are starting to be released by U.S. customs, however, progress is slow and a significant backlog of panels continue to await review and release..
Added
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.
Removed
As the timing and progress of many of the Company's customers’ projects depend upon the supply of solar panels, the Company's operating results have been and could be further impacted by these actions. The Company continues to work with customers who are assessing their ability to source panels needed to complete projects.
Added
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.
Removed
On August 16, 2022, the Inflation Reduction Act ("IRA") was signed into law. Among other things, the IRA provides for Investment Tax Credits ("ITC") for renewable energy.
Added
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.
Removed
The IRA provides a 30% ITC for projects started prior to the guidance issued by the Department of the Treasury and published in the Federal Register on November 30, 2022, 24 Table of Co n tents regarding new wage and apprenticeship standards.
Added
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.
Removed
Sixty days after the issuance of such guidance, January 29, 2023, the base ITC will be 6%, with an additional 24% available if the new labor standards are met or the project is less than one megawatt.
Added
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.
Removed
The IRA also provides the option to earn an additional 10% credit for domestic content, and separately, an additional 10% credit for siting a project in an “energy community.” Lastly, there are Manufacturers Tax Credits available to suppliers of certain, specific solar tracker components, including mechanical parts and battery storage, that are made in the U.S.
Added
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.
Removed
The Company expects the ITC to accrue to its downstream customers, solar investors, and expect Manufacturers Tax Credits to accrue to the Company's upstream suppliers. The Company anticipates that these tax credits will provide stability for the industry and should reduce policy driven demand swings for the Company's products.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

6 edited+0 added−1 removed7 unchanged
Biggest changeForeign Exchange Risk The Company has foreign exchange risk due to the Company's international operations, primarily in Canada and Asia, and through sales to and purchases from foreign customers and vendors. Changes in the values of currencies of foreign countries affect the Company's financial position and cash flows when translated into U.S. dollars.
Biggest changeA 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.
The Company cannot accurately calculate the pre-tax impact a one percent change in the commodity costs would have on the Company's 2022 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 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 that a one percent change in the exchange rates of foreign currencies would have on the Company's 2022 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. 33 Table of Co n tents
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
Effective December 8, 2022, borrowings under the revolving credit facility 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 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.
At December 31, 2022, the Company's available variable rate debt consisted of borrowings under the Company's Credit Agreement, of which $91 million was outstanding on the revolving credit facility as of December 31, 2022 and was the only debt outstanding at year end.
At 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.
The Company principally manages its exposures to many of these foreign exchange rate risks solely through management of its core business activities.
Changes in the values of currencies of foreign countries affect the Company's financial position and cash flows when translated into U.S. dollars. The Company principally manages its exposures to many of these foreign exchange rate risks solely through management of its core business activities.
Removed
Prior to December 8, 2022, borrowings under the revolving credit facility under the Company's Sixth Amended and Restated Credit Agreement bore interest at a variable interest rate based upon the LIBOR plus an additional margin. A hypothetical 1% increase or decrease in interest rates would have changed the Company's 2022 interest expense by $0.8 million.

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