Gibraltar Industries Inc.

02/26/2026 | Press release | Distributed by Public on 02/26/2026 07:59

Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations
The following Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the Company's risk factors and its consolidated financial statements and notes thereto
included in Item 1A and Item 8, respectively, of this Annual Report on Form 10-K. Certain information set forth in this Item 7 constitutes "forward-looking statements" as that term is used in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based, in whole or in part, on management's beliefs, estimates, assumptions, and currently available information. 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 4of this Annual Report on Form 10-K.
Company Overview
The Company is a leading manufacturer and provider of products and services for the residential, agtech, and infrastructure markets, and it operates and reports its results through three reporting segments: Residential, Agtech, and Infrastructure.
The Company serves customers primarily in the U.S. and Canada including home improvement retailers, wholesalers, distributors, contractors, institutional and commercial growers of fruits, vegetables, flowers and other plants. The Company's operational infrastructure provides the necessary scale to support local, regional, and national customers in each of its markets.
On February 2, 2026, Gibraltar completed the acquisition of OmniMax, a leading U.S.- and Canada-based manufacturer and provider of residential roofing accessories and rainwater management systems. The Company believes that the addition of OmniMax's complementary brands, product portfolio and geographic footprint accelerates the Company's presence in its largest and most profitable business segment, creates a more optimal operating platform to serve customers and partner with suppliers, and opens new opportunities for growth with new and existing customers across the U.S. and Canada. OmniMax will be reported as part of the Company's Residential segment. The Company anticipates that, following the acquisition of OmniMax, the Residential segment will represent over 80% of the Company's total revenue with the Company being primarily focused on the residential market.
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. These factors include but are not limited to changes in general economic conditions, interest rates, exchange rates, commodity costs, 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 Company believes the key elements of its strategy outlined in Item 1. Business of this Annual Report on Form 10-K will allow the Company to respond timely to these factors.
Operating Performance Measures
The Company uses consolidated net sales, consolidated gross margin, consolidated operating margin, and operating margin by segment as key operating performance measures. Management uses these measures to evaluate operating performance, manage its business, set operational goals, and establish performance targets for incentive compensation for its employees.
The Company defines consolidated gross margin as consolidated gross profit divided by consolidated net sales. Consolidated operating margin is defined as income from continuing operations divided by consolidated net sales. Operating margin by segment is defined as income from operations for each segment divided by net sales for that segment. The Company believes that consolidated gross margin and consolidated operating margin may be useful to investors in evaluating the profitability of the Company on a consolidated basis, while operating margin by segment may be useful in evaluating the profitability of each of its segments.
Results of Operations
Year Ended December 31, 2025 Compared to Year Ended December 31, 2024
For a discussion of the Company's results of operations for the year ended December 31, 2024 and for a comparison of such results of operations for the year ended December 31, 2023 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, 2024 that was filed with the SEC on February 19, 2025.
The following table sets forth selected results of operations data (in thousands) and its percentages of net sales for the years ended December 31:
2025 2024
Net sales $ 1,135,501 100.0 % $ 1,023,359 100.0 %
Cost of sales 830,310 73.1 % 721,951 70.5 %
Gross profit 305,191 26.9 % 301,408 29.5 %
Selling, general, and administrative expense 182,440 16.1 % 155,734 15.3 %
Intangible asset impairment - - % 6,000 0.6 %
Income from operations 122,751 10.8 % 139,674 13.6 %
Interest income (1,747) (0.1) % (6,171) (0.6) %
Other income (2,078) (0.2) % (25,142) (2.5) %
Income before taxes 126,576 11.1 % 170,987 16.7 %
Provision for income taxes 29,020 2.5 % 35,943 3.5 %
Income from continuing operations 97,556 8.6 % 135,044 13.2 %
(Loss) income from discontinued operations (141,944) (12.5) % 2,296 0.2 %
Net (loss) income $ (44,388) (3.9) % $ 137,340 13.4 %
The following table sets forth the Company's net sales by reportable segment for the years ended December 31 (in thousands):
Impact of
2025 2024 Total
Change 		Acquisitions Portfolio Management Ongoing Operations
Net sales:
Residential $ 824,079 $ 782,519 $ 41,560 $ 65,264 $ (10,379) $ (13,325)
Agtech 219,301 152,811 66,490 106,236 - (39,746)
Infrastructure 92,121 88,029 4,092 - - 4,092
Consolidated $ 1,135,501 $ 1,023,359 $ 112,142 $ 171,500 $ (10,379) $ (48,979)
Consolidated net sales increased from 2024 by $112.1 million, or 11.0%, to $1.1 billion for 2025 compared to 2024. The increase in revenue was driven by $171.5 million of net sales generated from the current year acquisitions along with an increase in volume in the Infrastructure segment and participation gains in the residential building accessories business. This increase was partially offset by delayed project starts in the Agtech segment, along with softness in the residential mail and package business. Consolidated backlog increased 102% to $281 million, as compared to the end of the prior year.
Net sales in the Residential segment increased 5.3%, or $41.6 million, to $824.1 million in 2025 compared to $782.5 million in 2024. The revenue of $65.3 million generated from the current year acquisitions of the three metal roofing manufacturers, along with participation gains from local market expansion in the building accessories business more than offset continued slowness in the mail and package product sales, which are driven mainly by new construction starts. Portfolio management activities in the prior year, related to the sale of the Company's residential electronic locker business, also partially offset the increase.
Net sales in the Agtech segment increased 43.5%, or $66.5 million, to $219.3 million in 2025 compared to $152.8 million in 2024. The revenue increase was largely due to $106.2 million generated from the current year acquisition of Lane Supply, which more than offset the decrease in organic sales, due in part to timing shifts in large new project starts. Backlog increased 239% year over year in this segment, including organic backlog growth of 187%.
Net sales in the Infrastructure segment increased 4.7%, or $4.1 million, to $92.1 million in 2025 compared to $88.0 million in 2024, the result of continued strong execution. Backlog decreased 4% from the prior year, though demand and quoting activity remain strong.
The Company's consolidated gross margin decreased to 26.9% for 2025 compared to 29.5% for 2024. The decrease was driven by business and product line mix, partially offset by overall continued operational efficiencies along with 80/20 initiatives.
Selling, general, and administrative ("SG&A") expenses increased by $26.7 million, or 17.1%, to $182.4 million for 2025 from $155.7 million for 2024. The $26.7 million increase was the result of incremental SG&A expense related to the businesses acquired in 2025, higher acquisition-related expenses, partially offset by lower performance-based compensation expense compared to the prior year. SG&A expense as a percentage of net sales increased to 16.1% for 2025 compared to 15.3% for 2024.
The Company recognized intangible asset impairment charges of $6.0 million in 2024 due to rebranding initiatives resulting in the discontinuation of an indefinite-lived trademark in the Agtech segment.
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):
2025 2024 Total
Change
Income from operations:
Residential $ 137,195 16.6 % $ 148,784 19.0 % $ (11,589)
Agtech 9,804 4.5 % 11,040 7.2 % (1,236)
Infrastructure 22,042 23.9 % 21,295 24.2 % 747
Unallocated Corporate Expenses (46,290) (4.1) % (41,445) (4.0) % (4,845)
Consolidated income from operations $ 122,751 10.8 % $ 139,674 13.6 % $ (16,923)
The Residential segment operating margin decreased to 16.6% in 2025 from 19.0% in 2024. The decrease in operating margin was the result of business and product mix and the impact of acquisition integration during the current year.
The Agtech segment generated an operating margin of 4.5% in 2025 compared to 7.2% in 2024. The year over year decline in operating margin was due to costs related to the acquisition of Lane Supply and the impact of lower organic volumes.
The Infrastructure segment operating margin decreased to 23.9% in 2025 compared to 24.2% in 2024. The decrease in operating margin was a result of product line mix.
Unallocated corporate expenses increased $4.8 million, or 11.7%, to $46.3 million in 2025 from $41.4 million for 2024. The increase was largely the result of higher acquisition-related expense partially offset by lower performance-based compensation expense as compared to the prior year.
The Company recorded interest income of $1.7 million for 2025, compared to $6.2 million for 2024. The decrease in interest income during the current year was the result of earnings on lower average balances on certain interest-bearing cash accounts as compared to the prior year.
The Company recorded other income of $2.1 million in 2025, compared to $25.1 million in 2024. The prior year income is primarily the result of a $25.3 million gain related to the sale of the Company's electronic locker business within its Residential segment.
The Company recognized a provision for income taxes of $29.0 million, an effective tax rate of 22.9%, for 2025, which exceeded the U.S. federal statutory rate of 21%, the result of state taxes and nondeductible permanent differences partially offset by the impact of energy-related tax credits purchased. For 2024, the Company recognized a provision for income taxes of $35.9 million, an effective tax rate of 21.0%. The effective tax rate was equal to the U.S. federal statutory rate of 21%, the result of state taxes and nondeductible permanent differences offset by a partial release of the valuation allowance previously recorded on a capital loss carryfoward that can be utilized due to the 2024 sale of the Company's electronic locker business within its Residential segment.
Liquidity and Capital Resources
Sources of Liquidity
The Company has historically financed its working capital requirements, including capital expenditures and acquisitions, through a combination of available cash, cash flows from operations, and borrowings under the Company's 2022 Credit Agreement. As disclosed above, on February 2, 2026, the Company entered into a new Credit Agreement that provides for a senior secured revolving credit facility with an initial aggregate commitment of $500 million and letters of credit in an aggregate amount of up to $100 million. The new Revolving Credit Facility matures on February 2, 2031.
The Company expects that its primary cash requirements over the next twelve months will include working capital, capital expenditures, and debt service requirements. The Company believes that cash flows from operations, together with available cash on hand and borrowing capacity under the new Revolving Credit Facility-which had approximately $482 million of availability as of February 2, 2026-will be sufficient to meet these short-term liquidity requirements. The Company currently expects to continue generating positive operating cash flows during this period and does not anticipate needing to materially increase borrowings to fund its short-term obligations.
Beyond the next twelve months, the Company's liquidity needs will primarily consist of funding ongoing capital expenditures, debt service requirements, future debt maturities and potential strategic investments. The Company expects to meet these long-term obligations through a combination of cash flows generated from operations and continued access to its Revolving Credit Facility. The Company may also evaluate additional financing alternatives, as appropriate, as appropriate, to support its long-term growth initiatives or refinance upcoming maturities. Based on current projections and market conditions, the Company believes that its existing sources of liquidity will be adequate to satisfy its long-term cash requirements.
Historically the Company's international operations have generated cash flow from operations sufficient to fund their working capital needs and capital improvements. As of December 31, 2025 and 2024, the Company's international subsidiaries held $4.4 million and $8.9 million of cash, respectively.
As disclosed below and in Note 18 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, the Company incurred significant indebtedness in connection with the acquisition of OmniMax. This level of indebtedness could have important consequences for the Company's business, including the risks described in Item 1A. "Risk Factors" - "Risks Related to the Company's Indebtedness."
Uses of Cash / Cash Requirements
The Company's material short-term cash requirements primarily include accounts payable, purchases of tax credits, 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. See Notes 7, 9, 14 and 16 to the Company's consolidated financial statements in Part II, Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for further detail on the Company's accrued expenses, employee and retiree benefit-related obligations, operating lease obligations and historical capital expenditures.
Credit Agreement
To further support liquidity, and in connection with closing of the acquisition of OmniMax on February 2, 2026 (the "Closing Date"), the Company entered into a new Revolving Credit Facility, as described above, and new senior secured term loan facilities in an aggregate principal amount of $1.3 billion, consisting of the Term Loan A facility in an initial aggregate principal amount of $650 million and the Term Loan B facility in an initial aggregate principal amount of $650 million. Proceeds from the term loans, together with borrowings under the revolving credit facility and cash on hand, were used to fund the acquisition of OmniMax and pay related transaction fees and expenses.
The Revolving Credit Facility and the Term Loan A Facility will mature on the fifth anniversary of the Closing Date, and the Term Loan B Facility will mature on the seventh anniversary of the Closing Date. The Term Loan A Facility requires quarterly amortization payments of 2.50% per annum for the first two years, 5.00% per annum for the next two years and 7.50% per annum for the final year, in each case of the original principal amount thereof. The Term Loan B Facility requires quarterly amortization payments of 1.00% per annum of the original principal amount thereof. The Credit Agreement also requires mandatory prepayments in connection with certain asset sales and excess cash flow, subject to certain exceptions.
Borrowings under the senior secured credit facilities bear interest, at the Company's option, at an annual rate equal to (a) adjusted term SOFR, defined in a customary manner ("Term SOFR") or (b) the base rate (the "Base Rate") plus in each case an applicable rate. For the Term Loan A Facility and the Revolving Credit Facility, the applicable rate under the Credit Agreement ranges from 1.375% to 2.25% for Term SOFR loans and 0.375% to 1.25% for Base Rate loans, in each case based on the Company's consolidated first lien net leverage ratio. For the Term Loan B Facility, the applicable rate under the Credit Agreement ranges from 1.75% to 2.25% for Term SOFR loans and 0.75% to 1.25% for Base Rate loans, in each case based on the Company's consolidated first lien net leverage ratio. Undrawn commitment fees under the Revolving Credit Facility range from 0.175% to 0.275% based on the Company's consolidated net leverage ratio.
The Credit Agreement contains financial covenants requiring the Company to maintain a maximum consolidated total net leverage ratio of 5.25:1.00, which steps down to 4.25:1.00 over time, and a minimum interest coverage ratio of 3.00:1.00, in each case measured as of the last day of each fiscal quarter, with measurement to commence on the last day of the first full fiscal quarter after the Closing Date. The maximum consolidated total net leverage ratio may be increased at the Company's option by 0.50x in connection with certain qualifying material acquisitions.
The Credit Agreement contains certain affirmative and negative covenants that limit the ability of the Company, among other things and subject to certain significant exceptions, to incur debt or liens, make investments, enter into certain mergers, consolidations, asset sales and acquisitions, pay dividends and make other restricted payments and enter into transactions with affiliates. Additionally, the Credit Agreement contains certain events of default, including relating to a change of control. If an event of default occurs, the lenders under the Credit Agreement will be entitled to take various actions, including the acceleration of amounts due under the Credit Agreement.
Authorized Share Repurchase Program
In April 2025, 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. As of December 31, 2025, the Company has not purchased any shares under this authorized program.
The program has a duration of three years and is scheduled to expire on April 30, 2028. Repurchases may be made from time to time in amounts and at prices the Company deems appropriate, subject to certain restrictions under the Credit Agreement, market conditions, applicable legal requirements, debt covenants, and other considerations. Any such repurchases may be executed through open market purchases, privately negotiated agreements, or other transactions. The repurchase program may be suspended or discontinued at any time at the Company's discretion.
Cash Flows
The following table sets forth selected cash flow data for the years ended December 31 (in thousands):
2025 2024
Net cash provided by (used in):
Operating activities of continuing operations $ 137,107 $ 169,890
Investing activities of continuing operations (256,428) 11,272
Financing activities (63,673) (12,189)
Discontinued operations 28,922 1,646
Effect of exchange rate changes 316 (565)
Net (decrease) increase in cash and cash equivalents $ (153,756) $ 170,054
Operating Activities of Continuing Operations
Net cash provided by operating activities of continuing operations for 2025 of $137.1 million consisted of income from continuing operations of $97.6 million, non-cash net charges totaling $38.6 million, which include depreciation, amortization, stock compensation, benefit of deferred income taxes and other non-cash charges, and $0.9 million of cash generated from working capital and other net operating assets, and net of effects from acquisitions, driven by the decreases in trade receivables as a result of timing of customer collections and increases in accrued expenses related to the timing and volume of advance billings and timing of other expense accruals.
Net cash provided by operating activities of continuing operations for 2024 of $169.9 million consisted of income from continuing operations of $135.1 million, non-cash net charges totaling $14.0 million, which include depreciation, amortization, intangible asset impairment, stock compensation, gain on sale of business, benefit of
deferred income taxes and other non-cash charges, and $20.8 million of cash generated from working capital and other net operating assets largely due to increases in accounts payable as a result of timing of purchases and vendor payments.
Investing Activities of Continuing Operations
Net cash used in investing activities of continuing operations for 2025 was $256.4 million, primarily due to the acquisitions of Lane Supply and the three metal roofing related businesses of $210.6 million, and net capital expenditures of $46.1 million largely related to the purchases of two facilities. These investments were partially offset by a receipt of the $0.3 million final working capital settlement received in connection with the sale of the Company's electronic locker business within the Company's Residential segment in the fourth quarter of 2024.
Net cash provided by investing activities of continuing operations for 2024 of $11.3 million consisted of net proceeds of $28.1 million from the sale of the Company's electronic locker business within its Residential segment in the fourth quarter of 2024, offset by net capital expenditures of $16.8 million.
Financing Activities
Net cash used in financing activities totaled $63.7 million for 2025 primarily driven by common stock repurchases. The Company repurchased 914,679 shares for $60.0 million under the Company's prior authorized share repurchase program that ended May 2, 2025. An additional $3.9 million related to the net settlement of tax obligations for participants in the Company's equity incentive plans. These outflows were slightly offset by $0.2 million in proceeds from the issuance of common stock resulting from stock option exercises.
Net cash used in financing activities totaled $12.2 million for 2024 driven by common stock repurchases. The Company repurchased 154,796 shares for $10.0 million under the Company's authorized share repurchase program that ended May 2, 2025. An additional $2.2 million was used to repurchase common stock related to the net settlement of tax obligations for participants in the Company's equity incentive plans.
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. Such decisions include the selection of applicable principles and the use of judgment in their application, the results of which could differ from those anticipated.
A summary of the Company's significant accounting policies are described in Note 1 of the Company's consolidated financial statements included in Part II, Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K.
Our most critical accounting estimates that require the most difficult, subjective and complex judgments include revenue recognition on contracts with customers. Management reviews these estimates on a regular basis and makes adjustments based on historical experience, current conditions, and future expectations. Management believes these estimates are reasonable, but actual results could differ from these estimates.
Accounting for the Fair Value of Assets Acquired in a Significant Business Combination
When the Company acquires a business, it allocates the purchase price to the identified assets acquired and liabilities assumed in the transaction based on their respective estimated fair values as of the acquisition date. Any excess of the purchase price over the fair value of the net assets acquired is recorded as goodwill. The determination of fair value requires significant management judgment and involves the use of estimates and assumptions that are inherently subjective.
The purchase price allocation process requires judgment in both identifying and characterizing the acquired assets and liabilities and in estimating their respective fair values. These judgments are significant because acquired assets with finite lives, such as certain identified intangible assets, are amortized over their estimated useful lives, whereas goodwill is not amortized but is subject to annual impairment testing, or more frequently if indicators of impairment arise.
The most subjective estimates in determining the fair value of assets acquired in a significant business combination relate to the valuation of long-lived assets, particularly identified intangible assets. Management uses all available information to estimate fair values and engages independent valuation specialists to assist in valuing identified
intangible assets. The fair values of these intangible assets are primarily determined using income-based valuation techniques, including the multi-period excess earnings method for customer relationships and backlog and the relief-from-royalty method for trademarks.
Significant assumptions used in these valuation models include discount rates, customer attrition rates, projected revenue growth rates, operating profit margins, adjusted for non-cash items such as depreciation and amortization. These assumptions are forward-looking and reflect management's expectations regarding future economic and market conditions. Actual results may differ from these estimates, and changes in key assumptions could result in material differences in the estimated fair values of the acquired assets, which could impact future amortization expense and the amount of goodwill recorded or subsequently assessed for impairment.
Recent Accounting Pronouncements
For additional information regarding recently issued accounting pronouncements, see Note 1 to the Company's consolidated financial statements in Part II, Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K.
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