rock-20250331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


(Mark One)
☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 000-22462

GIBRALTAR INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)

Delaware

16-1445150

(State or Other Jurisdiction of Incorporation or Organization)

(I.R.S. Employer Identification No.)

3556 Lake Shore Road

P.O. Box 2028

Buffalo

New York

14219-0228

(Address of principal executive offices)

(Zip Code)

(716) 826-6500

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, $0.01 par value per share

ROCK

NASDAQ Stock Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicated by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of April 28, 2025, the number of shares of common stock outstanding was: 29,490,360.

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GIBRALTAR INDUSTRIES, INC.

INDEX


		PAGE NUMBER
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Statements of Income for the Three Months Ended March 3 1 , 202 5 and 202 4 (unaudited)	3
	Consolidated Statements of Comprehensive Income for the Three Months Ended March 3 1 , 202 5 and 202 4 (unaudited)	4
	Consolidated Balance Sheets as of March 3 1 , 202 5 (unaudited) and December 31, 202 4	5
	Consolidated Statements of Cash Flows for the Three Months Ended March 3 1 , 202 5 and 202 4 (unaudited)	6
	Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 3 1 , 202 5 and 202 4 (unaudited)	7
	Notes to Consolidated Financial Statements (unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24
Item 4.	Controls and Procedures	24
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	25
Item 1A.	Risk Factors	25
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26
Item 3.	Defaults Upon Senior Securities	26
Item 4.	Mine Safety Disclosures	26
Item 5.	Other Information	26
Item 6.	Exhibits	27
	SIGNATURES	28

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

GIBRALTAR INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)

(unaudited)


	Three Months Ended March 31,
	2025		2024
Net sales	$	290,015	$	292,506
Cost of sales	212,315		208,118
Gross profit	77,700		84,388
Selling, general, and administrative expense	52,190		52,652

Income from operations	25,510		31,736
Interest income, net	(1,637)		(750)
Other expense (income), net	94		(1,021)
Income before taxes	27,053		33,507
Provision for income taxes	5,934		8,561





Net income	$	21,119	$	24,946











Net earnings per share:
Basic	$	0.70	$	0.82
Diluted	$	0.69	$	0.81
Weighted average shares outstanding:
Basic	30,252		30,572
Diluted	30,474		30,793

See accompanying notes to consolidated financial statements.

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GIBRALTAR INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

(unaudited)


	Three Months Ended March 31,
	2025		2024
Net income	$	21,119	$	24,946
Other comprehensive income (loss):
Foreign currency translation adjustment	49		(964)




Total comprehensive income	$	21,168	$	23,982

See accompanying notes to consolidated financial statements.

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GIBRALTAR INDUSTRIES, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)


	March 31, 2025		December 31, 2024
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	25,114	$	269,480
Trade receivables, net of allowance of $2,805 and $3,394, respectively	195,192		169,350
Costs in excess of billings, net	41,648		34,570
Inventories, net	170,304		138,140
Prepaid expenses and other current assets	41,228		39,792

Total current assets	473,486		651,332
Property, plant, and equipment, net	128,671		109,820
Operating lease assets	56,712		45,021
Goodwill	594,620		507,419
Acquired intangibles	181,690		103,882
Other assets	4,239		1,936
	$	1,439,418	$	1,419,410
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	137,970	$	117,408
Accrued expenses	98,428		95,664
Billings in excess of costs	40,230		41,790



Total current liabilities	276,628		254,862

Deferred income taxes	75,505		56,655
Non-current operating lease liabilities	46,317		35,125
Other non-current liabilities	31,630		24,734
Stockholders’ equity:
Preferred stock, $0.01 par value; authorized 10,000 shares; none outstanding	—		—
Common stock, $0.01 par value; authorized 100,000 shares; 34,401 and 34,313 shares issued and outstanding in 2025 and 2024	344		343
Additional paid-in capital	346,653		343,583
Retained earnings	896,970		875,851
Accumulated other comprehensive loss	(5,277)		(5,326)
Cost of 4,911 and 3,960 common shares held in treasury in 2025 and 2024	(229,352)		(166,417)
Total stockholders’ equity	1,009,338		1,048,034
	$	1,439,418	$	1,419,410

See accompanying notes to consolidated financial statements.

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GIBRALTAR INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)


	Three Months Ended March 31,
	2025		2024
Cash Flows from Operating Activities
Net income	$	21,119	$	24,946


Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization	9,086		6,663
Stock compensation expense	3,071		2,639







Other, net	244		1,619

Changes in operating assets and liabilities net of effects from acquisitions:
Trade receivables and costs in excess of billings	(7,362)		(6,950)
Inventories	(12,347)		(17,231)
Other current assets and other assets	2,492		453
Accounts payable	12,416		35,455
Accrued expenses and other non-current liabilities	(15,035)		5,587


Net cash provided by operating activities	13,684		53,181
Cash Flows from Investing Activities
Purchases of property, plant, and equipment, net	(11,431)		(4,366)
Acquisitions, net of cash acquired	(184,585)		—
Net proceeds from sale of business	352		—




Net cash used in investing activities	(195,664)		(4,366)
Cash Flows from Financing Activities




Purchase of common stock at market prices	(62,394)		(1,434)


Net cash used in financing activities	(62,394)		(1,434)
Effect of exchange rate changes on cash	8		(142)
Net (decrease) increase in cash and cash equivalents	(244,366)		47,239
Cash and cash equivalents at beginning of year	269,480		99,426
Cash and cash equivalents at end of period	$	25,114	$	146,665

See accompanying notes to consolidated financial statements.

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GIBRALTAR INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands)

(unaudited)


	Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock			Total Stockholders’ Equity
	Shares	Amount								Shares	Amount
Balance at December 31, 2024	34,313	$	343	$	343,583	$	875,851	$	(5,326)	3,960	$	(166,417)	$	1,048,034
Net income	—	—		—		21,119		—		—	—		21,119
Foreign currency translation adjustment	—	—		—		—		49		—	—		49

Stock compensation expense	—	—		3,071		—		—		—	—		3,071

Net settlement of restricted stock units	88	1		(1)		—		—		36	(2,369)		(2,369)


Excise tax on repurchase of common stock	—	—		—		—		—		—	(566)		(566)
Common stock repurchased under stock repurchase program	—	—		—		—		—		915	(60,000)		(60,000)
Balance at March 31, 2025	34,401	$	344	$	346,653	$	896,970	$	(5,277)	4,911	$	(229,352)	$	1,009,338




Balance at December 31, 2023	34,219	$	342	$	332,621	$	738,511	$	(2,114)	3,778	$	(154,362)	$	914,998
Net income	—	—		—		24,946		—		—	—		24,946
Foreign currency translation adjustment	—	—		—		—		(964)		—	—		(964)

Stock compensation expense	—	—		2,639		—		—		—	—		2,639

Net settlement of restricted stock units	47	1		(1)		—		—		19	(1,434)		(1,434)



Balance at March 31, 2024	34,266	$	343	$	335,259	$	763,457	$	(3,078)	3,797	$	(155,796)	$	940,185

See accompanying notes to consolidated financial statements.

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GIBRALTAR INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(1) BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements of Gibraltar Industries, Inc. (the "Company") have been prepared by management in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for the fair presentation of results for the interim period have been included. The Company's operations are seasonal; for this and other reasons financial results for any interim period are not necessarily indicative of the results expected for any subsequent interim period or for the full year. The accompanying unaudited consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 2024.

The consolidated balance sheet at December 31, 2024 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements.

Recent Accounting Pronouncements

The Company evaluated all recent Accounting Standard Updates, including those that are currently effective in or after 2025, and determined that the adoption of these pronouncements would not have a material effect on the financial position, results of operations or cash flows of the Company. There have been no material changes from the recent accounting pronouncements previously disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

(2) TRADE RECEIVABLES, NET

The following table provides a roll-forward of the allowance for credit losses for the three month period ended March 31, 2025 that is deducted from the amortized cost basis of trade receivables to present the net amount expected to be collected (in thousands):


Beginning balance as of January 1, 2025	$	3,394

Bad debt expense, net of recoveries	124
Accounts written off against allowance and other adjustments	(713)
Ending balance as of March 31, 2025	$	2,805

(3) REVENUE

Sales includes revenue from contracts with customers for roof and foundation ventilation products, single point and centralized mail systems, trims, flashings, metal roofing, rain dispersion products and other accessories, retractable awnings and gutter guards; designing, engineering, manufacturing and installation of controlled environmental agriculture, custom greenhouses and structural canopies; designing, engineering, manufacturing and installation of solar racking and electrical balance of systems; structural bearings, expansion joints, pavement sealant, elastomeric concrete and bridge cable protection systems.

Refer to Note 13 "Segment Information" for disclosures related to disaggregation of revenue.

As of March 31, 2025, the Company's remaining performance obligations are part of contracts that have an original expected duration of one year or less.

For the three months ended March 31, 2025 and 2024, respectively, there were no changes to estimated total costs to be incurred related to any individual contract that materially impacted the Company's consolidated financial statements.

Contract assets consist of net costs in excess of billings, classified as current assets in the Company's consolidated balance sheets. Contract liabilities consist of billings in excess of costs, classified as current liabilities, and unearned revenue, presented within accrued expenses, in the Company's consolidated balance sheets. Unearned revenue as of March 31, 2025 and December 31, 2024 was $2.1 million and $3.1 million, respectively. The Company

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recognized revenue of $26.2 million and $27.7 million during the three months ended March 31, 2025 and 2024, respectively, that was included in the contract liabilities balance of $44.8 million and $48.7 million at December 31, 2024 and 2023, respectively.

(4) INVENTORIES, NET

Inventories, net of reserves, consisted of the following (in thousands):


	March 31, 2025		December 31, 2024
Raw material	$	104,571	$	78,888
Work-in-process	20,620		18,195
Finished goods	45,113		41,057
Total inventories, net	$	170,304	$	138,140

(5) ACQUISITIONS

During the quarter ended March 31, 2025, the Company acquired three businesses in separate transactions all of which were funded with cash on hand. One acquired business is included within the Company's Agtech segment and the other acquired businesses are included in the Company's Residential segment.

On February 11, 2025, the Company purchased all the outstanding stock of Lane Supply, Inc. ("Lane Supply"), a privately held company that designs, manufactures and installs structural canopies serving the convenience store, travel center, food retail, and quick serve restaurant markets. The results of Lane Supply have been included in the Company's consolidated financial results since the date of acquisition within the Company's Agtech segment. The preliminary purchase consideration for this acquisition was $117.1 million, which includes a preliminary working capital adjustment and certain other adjustments provided for in the stock purchase agreement.

On March 31, 2025, the Company acquired two privately held businesses within its Residential segment that primarily specialize in the manufacturing of metal roofing systems, along with metal wall panels, siding and trim products. The Company purchased all the outstanding stock of one of the businesses and substantially all of the assets for the other business for a combined preliminary purchase consideration of $90.2 million, which includes preliminary working capital adjustments and certain other adjustments provided for in the purchase agreements.

The purchase price for these acquisitions were preliminarily allocated to the assets acquired and liabilities assumed based upon their respective fair values estimated as of the date of acquisitions. The Company has commenced the process to confirm the existence, condition, and completeness of the assets acquired and liabilities assumed to establish fair value of such assets and liabilities and to determine the amount of goodwill to be recognized as of the date of acquisitions. Goodwill recognized in these acquisitions are primarily attributable to factors such as future economic benefits arising from other assets acquired that could not be individually identified including workforce additions, growth opportunities, and increased presence in domestic agtech structures and metal roofing markets, respectively. Due to the timing of these acquisitions, we continue to gather information supporting the acquired assets and assumed liabilities. Accordingly, all amounts recorded are provisional. These provisional amounts are subject to change if new information is obtained concerning facts and circumstances that existed as of the acquisition dates that, if known, would have affected the measurement of the amounts recognized as of that date. The final determination of the fair value of certain assets and liabilities will be completed within a measurement period of up to one year from the date of acquisitions. The final values may also result in changes to depreciation and amortization expense related to certain assets such as property, plant and equipment and acquired intangible assets.

For the acquisition of Lane Supply, the preliminary excess consideration was recorded as goodwill and approximated $38.2 million, none of which is deductible for tax purposes. The final purchase price allocation will be completed no later than the first quarter of fiscal year 2026.

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The preliminary allocation of the purchase consideration to the estimated fair value of the assets acquired and liabilities assumed is as follows as of the date of the acquisition (in thousands):


Cash	$	1,467
Working capital	22,108
Property, plant and equipment	6,707
Acquired intangible assets	67,100
Other assets	671
Other liabilities	(19,176)
Goodwill	38,245
Fair value of purchase consideration	$	117,122

The intangible assets acquired in this acquisition consisted of the following (in thousands):


	Fair Value		Weighted-Average Amortization Period

Trademarks	$	6,800	20 years

Customer relationships	55,000		15 years
Backlog	5,300		Less than 1 year
Total	$	67,100

For the acquisition of the two metal roofing businesses, the preliminary excess consideration was recorded as goodwill and approximated $48.9 million, all of which is deductible for tax purposes. The final purchase price allocation will be completed no later than the first quarter of fiscal year 2026.

The preliminary allocation of the purchase consideration to the estimated fair value of the assets acquired and liabilities assumed is as follows as of the date of the acquisitions (in thousands):


Cash	$	4,407
Working capital	13,299
Property, plant and equipment	5,272
Acquired intangible assets	15,300
Other assets	4,502
Other liabilities	(1,524)
Goodwill	48,912
Fair value of purchase consideration	$	90,168

The intangible assets acquired in these acquisitions consisted of the following (in thousands):


	Fair Value		Weighted-Average Amortization Period

Trademarks	$	4,300	5 years

Customer relationships	11,000		10 years
Total	$	15,300

In determining the allocation of the purchase price to the assets acquired and liabilities assumed, the Company uses all available information to make fair value determinations using Level 3 unobservable inputs in which little or no market data exists, and therefore, engages independent valuation specialists to assist in the fair value determination of the acquired long-lived assets.

The Company recognized costs related to recent acquisitions comprised of legal and consulting fees within selling, general, and administrative expense of $2.6 million for the three months ended March 31, 2025. No acquisition costs were incurred in the three months ended March 31, 2024.

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Pro Forma Information (Unaudited)

The results of Lane Supply (from January 1, 2025 through February 10, 2025) and the two privately held businesses (from January 1, 2025 and March 31, 2025) have not been included in the Company's consolidated statements of income as the Company acquired Lane Supply on February 11, 2025 and the two privately held businesses on March 31, 2025.

The following unaudited pro forma financial information represents a summary of the consolidated results of operations of the Company for the three months ended March 31, 2025 and 2024, assuming these acquisitions had been completed on January 1, 2024 (in thousands):


	Three Months Ended March 31,
	2025		2024
Net sales	$	313,079	$	329,981
Income from operations	27,736		31,941

These pro forma amounts have been compiled by adding the historical results of these businesses to the results of the Company after applying accounting policies and pro forma adjustments primarily for amortization that would have been charged assuming the preliminary fair value adjustments to intangible assets had been applied from January 1, 2024.

The pro forma financial information is not necessarily indicative of the results of operations that would have been achieved if the acquisitions had been effective as of these dates, or of future results.

(6) GOODWILL AND RELATED INTANGIBLE ASSETS

Goodwill

The changes in the carrying amount of goodwill for the three months ended March 31, 2025 are as follows (in thousands):


	Residential		Agtech		Renewables		Infrastructure		Total
Balance at December 31, 2024	$	209,170	$	82,341	$	184,230	$	31,678	$	507,419

Acquired goodwill	48,912		38,245		—		—		87,157

Foreign currency translation	—		44		—		—		44
Balance at March 31, 2025	$	258,082	$	120,630	$	184,230	$	31,678	$	594,620

Goodwill is recognized net of accumulated impairment losses of $133.2 million as of March 31, 2025 and December 31, 2024.

The Company is required to regularly assess whether a triggering event has occurred which would require interim impairment testing. The Company determined that no triggering event had occurred as of March 31, 2025 which would require an interim impairment test to be performed.

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Acquired Intangible Assets

Acquired intangible assets consisted of the following (in thousands):


	March 31, 2025				December 31, 2024
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Indefinite-lived intangible assets:
Trademarks	$	40,400	$	—	$	40,400	$	—
Finite-lived intangible assets:
Backlog	5,300		1,419		—		—
Trademarks	13,350		1,475		2,550		1,773
Unpatented technology	29,217		22,618		30,329		23,199
Customer relationships	164,968		46,083		99,060		43,560
Non-compete agreements	500		450		709		634
	213,335		72,045		132,648		69,166
Total acquired intangible assets	$	253,735	$	72,045	$	173,048	$	69,166

The following table summarizes the acquired intangible asset amortization expense (in thousands):


	Three Months Ended March 31,
	2025		2024
Amortization expense	$	4,598	$	2,718

Amortization expense related to acquired intangible assets for the remainder of fiscal 2025 and the next five years thereafter is estimated as follows (in thousands):


	2025		2026		2027		2028		2029		2030
Amortization expense	$	16,087	$	15,252	$	13,967	$	13,203	$	13,154	$	11,623

(7) LONG-TERM DEBT

The Company had no outstanding debt as of March 31, 2025 and December 31, 2024.

Revolving Credit Facility

On December 8, 2022, the Company entered into a Credit Agreement (the "Credit Agreement") which provides for a revolving credit facility and letters of credit in an aggregate amount equal to $400 million. The following table sets forth the Company's availability on the revolving credit facility as of (in thousands):


	March 31, 2025		December 31, 2024
Total revolving credit facility	$	400,000	$	400,000
Less: standby letters of credit issued to third parties	(4,931)		(4,931)
Availability on revolving credit facility	$	395,069	$	395,069

The Company can request additional financing to increase the revolving credit facility to $700 million or enter into a term loan of up to $300 million subject to conditions set forth in the Credit Agreement. The Credit Agreement contains two financial covenants. As of March 31, 2025, the Company was in compliance with all financial covenants. The Credit Agreement terminates on December 8, 2027.

Borrowings under the Credit Agreement bear interest, at the Company’s option, at a rate equal to the applicable margin plus (a) a base rate, (b) a daily simple secured overnight financing rate ("SOFR") rate, (c) a term SOFR rate or (d) for certain foreign currencies, a foreign currency rate, in each case subject to a 0% floor. The Credit Agreement includes an applicable margin which ranges from 0.125% to 1.00% for base rate loans and from 1.125% to 2.00% for SOFR and alternative currency loans based on the Company’s Total Net Leverage Ratio, as defined in the Credit Agreement. In addition, the Credit Agreement is subject to an annual commitment fee, payable quarterly,

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which ranges between 0.20% and 0.25% of the daily average undrawn balance of the revolving credit facility based on the Company’s Total Net Leverage Ratio.

Borrowings under the Credit Agreement are secured by the trade receivables, inventory, personal property, equipment, and general intangibles of the Company’s significant domestic subsidiaries. Capital distributions are subject to certain Total Net Leverage Ratio requirements and capped by an annual aggregate limit under the Credit Agreement.

(8) EQUITY-BASED COMPENSATION

The Gibraltar Industries, Inc. Amended and Restated 2018 Equity Incentive Plan (the "Amended 2018 Plan") which includes a total of 1,631,707 shares available for issuance, allows the Company to grant equity-based incentive compensation awards in the form of non-qualified options, restricted shares, restricted stock units, performance shares, performance stock units, and stock rights to eligible participants.

The Gibraltar Industries, Inc. Amended and Restated 2016 Stock Plan for Non-Employee Directors (the "Non-Employee Directors Plan") which includes 200,000 shares available for issuance, allows the Company to grant awards of shares of the Company's common stock to current non-employee directors of the Company, and permits the Directors to defer receipt of such shares pursuant to the terms of the Non-Employee Directors Plan.

Equity-Based Awards - Settled in Stock

The following table provides the number of stock units granted during the three months ended March 31, along with the weighted-average grant-date fair value of each award:


	2025			2024
Awards	Number of Awards	Weighted- Average Grant-Date Fair Value		Number of Awards	Weighted- Average Grant-Date Fair Value
Performance stock units (1) (2)	81,940	$	64.79	58,582	$	77.70
Restricted stock units	50,741	$	64.91	29,671	$	77.70

(1) The Company’s performance stock units (“PSUs”) represent shares granted for which the final number of shares earned depends on financial performance.

(2) The PSUs granted in 2024, based on the Company's return on invested capital ("ROIC") for the performance period ended December 31, 2024, earned 45.0% of the targeted PSUs awarded. Therefore, 26,363 units will convert to shares and be issued in 2027.

Equity-Based Awards - Settled in Cash

The Company's equity-based awards that are settled in cash are the awards under the Management Stock Purchase Plan (the “MSPP”) which is authorized under the Company's equity incentive plans. The MSPP provides participants the ability to defer a portion of their compensation, convertible to unrestricted investments, restricted stock units, or a combination of both, or defer a portion of their directors’ fees, convertible to restricted stock units. Employees eligible to defer a portion of their compensation also receive a company-matching award in restricted stock units equal to a percentage of their deferred compensation.

The deferrals and related company match are credited to an account that represents a share-based liability. The portion of the account deferred to unrestricted investments is measured at fair market value of the unrestricted investments, and the portion of the account deferred to restricted stock units and company-matching restricted stock units is measured at a 200-day average of the Company’s stock price. The account will be converted to and settled in cash payable to participants upon retirement or a termination of their service to the Company.

Total MSPP liabilities recorded on the consolidated balance sheet as of March 31, 2025 were $22.9 million, of which $4.2 million was included in current accrued expenses and $18.7 million was included in non-current liabilities. Total MSPP liabilities recorded on the consolidated balance sheet as of December 31, 2024 were $23.7 million, of which $3.2 million was included in current accrued expenses and $20.5 million was included in non-current liabilities. The value of the restricted stock units within the MSPP liabilities was $17.0 million and $18.1 million at March 31, 2025 and December 31, 2024, respectively.

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The following table provides the number of restricted stock units credited to active participant accounts and the payments made with respect to MSPP liabilities:


	Three Months Ended March 31,
	2025		2024
Restricted stock units credited	18,283		40,538
MSPP liabilities paid (in thousands)	$	1,928	$	2,023

(9) PRODUCT WARRANTIES

The Company generally warrants that its products will be free from material defects in workmanship and materials. Warranty reserve estimates are based on management’s judgment, considering such factors as historical experience, anticipated rates of claims, and other available information. Management reviews and adjusts these estimates, if necessary, based on the differences between actual experience and historical estimates.

The reserve for product warranties is presented within accrued expenses on the Company’s consolidated balance sheets. Activity in the product warranties is summarized as follows (in thousands):


	Three Months Ended March 31,
	2025		2024
Beginning balance	$	17,463	$	9,139
Provisions/accruals during the period	6,745		1,056
Acquired warranty accruals during the period	206		—
Settlements made during the period	(5,698)		(127)
Ending balance	$	18,716	$	10,068

(10) EXIT ACTIVITY COSTS AND ASSET IMPAIRMENTS

The Company periodically undertakes restructuring initiatives as part of its focus to improve operating performance and optimize its business portfolio. These initiatives have led to outsourcing or discontinuing low-volume, low margin products, selling or exiting less profitable businesses or product lines, or reorganizing the Company's manufacturing footprint. As a result, the Company has incurred costs related to discrete restructuring events for moving and closing facilities, severance, inventory write-downs, and warranty costs associated with discontinued product lines during the three months ended March 31, 2025.

The following tables set forth the exit activity costs and asset impairment charges (recoveries) incurred by segment related to the restructuring activities described above (in thousands):


	Three Months Ended March 31,
	2025						2024
	Exit Activity		Asset Impairment		Total		Exit Activity		Asset Impairment		Total
Residential	$	1,137	$	—	$	1,137	$	—	$	(72)	$	(72)
Agtech	68		—		68		138		—		138
Renewables	4,530		81		4,611		269		—		269
Infrastructure	—		—		—		—		—		—
Corporate	31		—		31		—		—		—
Total	$	5,766	$	81	$	5,847	$	407	$	(72)	$	335

Table of Contents

The following table provides a summary of where the exit activity costs and asset impairments were recorded in the consolidated statements of income (in thousands):


	Three Months Ended March 31,
	2025		2024
Cost of sales	$	4,362	$	(72)
Selling, general, and administrative expense	1,485		407
Total exit activity and asset impairment charges	$	5,847	$	335

The following table reconciles the beginning and ending liability for exit activity costs recorded in current accrued expenses on the consolidated balance sheets relating to the Company’s restructuring efforts (in thousands):


	2025		2024
Balance at January 1	$	12,011	$	6,725
Exit activity costs recognized	5,766

SEC Form 10-Q filed by Gibraltar Industries Inc.