GIBRALTAR INDUSTRIES, INC. (ROCK)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Certain information set forth herein includes statements that express our opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results and, therefore are, or may be deemed to be, “forward-looking statements.” These forward-looking statements can generally be identified by the use of forward-looking terminology, including the terms “believes,” “anticipates,” “aspires,” “expects,” “estimates,” “seeks,” “projects,” “intends,” “plans,” “may,” “will” or “should” or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They include statements regarding our intentions, beliefs or current expectations concerning, among other things, our results of operations, financial condition, liquidity, prospects, growth, competition, strategies, margins, integration of acquired businesses, the industries in which we operate and the expected impact of evolving laws and regulation. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We believe that these risks and uncertainties include, but are not limited to, those described in the “Risk Factors” disclosures in our most recent Annual Report on Form 10-K. Although we base these forward-looking statements on assumptions that we believe are reasonable when made, we caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition, liquidity and the development of the industries in which we operate may differ materially from those made in or suggested by the forward-looking statements contained herein. In addition, even if our results of operations, financial condition, liquidity, and the development of the industries in which we operate are consistent with the forward-looking statements contained in this Quarterly Report on Form 10-Q, those results or developments may not be indicative of results or developments in subsequent periods. Given these risks and uncertainties, you are cautioned not to place undue reliance on these forward-looking statements. Any forward-looking statements that we make herein speak only as of the date of those statements, and we undertake no obligation to update those statements or to publicly announce the results of any revisions to any of those statements to reflect future events or developments. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless expressed as such, and should only be viewed as historical data.

The Company uses certain operating performance measures, specifically consolidated gross margin, operating margin by segment and consolidated operating margin, to manage the Company's businesses, set operational goals, and establish performance targets for incentive compensation for the Company's employees. 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. The Company believes consolidated gross margin, consolidated operating margin, and operating margin by segment may be useful to investors in evaluating the profitability of the Company's segments and the Company on a consolidated basis.

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.

On February 2, 2026, the Company acquired OmniMax, a leading U.S.- and Canada-based manufacturer and provider of residential roofing accessories and rainwater management systems. The acquisition of OmniMax furthers the Company's goal of helping innovate and reshape the markets in which it operates and provide better solutions for its customers and the channels it serves.

As of June 30, 2026, the Company's continuing operations operated in 54 facilities, comprised of 48 manufacturing facilities, strategically located across 23 states and Canada, and six offices, including a sourcing office located in China. The Company's operational infrastructure provides the necessary scale to support local, regional, and national customers in each of the Company's markets.

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Recent Trends

Impacts of Macroeconomic and Geopolitical Conditions on Our Business

The Company continues to monitor economic and macroeconomic and geopolitical conditions that may adversely affect its business, results of operations, and liquidity.

Economic and macroeconomic factors include changes in interest rates, changes to the residential new housing construction and repair markets in the United States, including consumer sentiment, increases in costs of fuel and raw materials, inflationary pressures, global economic uncertainty, change in foreign currency exchange rates, and evolving trade and tariff policies. Ongoing volatility impacts demand for the Company’s products, input costs and logistics expenses, resulting in variability in operating results.

Geopolitical instability in regions, including the ongoing conflict in the Middle East, have and may continue to increase energy and transportation costs, resulting in increased raw material and production costs. Changes in U.S. trade policy, including modifications to tariffs on certain steel and aluminum related products, may also increase costs or require changes to sourcing practices. The ultimate impact of these conditions remains uncertain and will depend on future developments and the duration and severity of these events.

Business Strategy

The Company's mission, to make life better for people and the planet, is fueled by advancing the disciplines of engineering, science, and technology.

The Company strives to create compounding and sustainable value for its stockholders and stakeholders by maintaining strong, relevant leadership positions in higher-growth profitable end markets while continuously innovating its products, services, and business processes to further optimize the important end markets it serves in the U.S. and Canada; residential and light commercial housing, infrastructure, and controlled environment agriculture growing and research. The foundation of the Company's strategy is built on three core pillars: Business System, Portfolio Management, and Organization Development.

•Business System reflects the necessary systems, processes, and management tools required to deliver consistent and continuous performance improvement, every day. The Company's business system is a critical enabler to grow, scale, and deliver its plans. The Company's focus is on deploying effective tools to drive growth, improve operating performance, and develop the organization utilizing 80/20 and lean quote-to-cash initiatives along with digital systems for speed, agility and responsiveness. The Business System pillar challenges existing operating paradigms, drives day-to-day performance, forces prioritization of resources, tests the Company's business models, and drives new product and services innovation.

•Portfolio Management is focused on optimizing the Company’s business portfolio in higher growth markets with leadership positions while ensuring its financial capital and human resources are effectively and efficiently deployed to deliver sustainable, profitable growth while increasing its relevance with customers and shaping its markets.

•Organization Development drives the Company’s continuous focus on ensuring it has the right design and structure to scale the organization in order to execute the Company’s plans and meet commitments. The Company's focus is on creating an environment for our people to have the best opportunity for success, continue to develop, grow and learn. At the core of this pillar is the Company’s development process focused on helping employees reach their potential, improve performance, develop career roadmaps, identify ongoing education requirements, and respective succession plans. The Company believes doing so helps it attract and retain the best people to execute its business plans.

The Company continues to transform itself to focus on providing solutions to some of today's most significant challenges—including living in safe and comfortable housing, growing food more sustainably, and improving the infrastructure across the U.S. and Canada.

The Company's strategy is to continue to broaden its presence and product portfolio with the addition of new products, while simultaneously investing in its customer relationships and its go-to-market infrastructure. The acquisition of OmniMax strengthens the Company's presence in its largest and highly profitable residential segment and represents a transformative strategic step intended to rapidly accelerate the Company's building products revenue growth. In addition, the Company's 2025 acquisition, Lane Supply within its Agtech segment, expands the Company's structures business to service complementary markets, such as fuel stations and convenience stores.

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Acquisition of OmniMax

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, for a purchase price of $1.335 billion in cash. The acquisition was pursuant to the terms and conditions of the Securities Purchase Agreement, among the Company, Barnsbury Estate LLC and Arundel Square Garden, LLC, dated November 16, 2025.

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.

In connection with the acquisition of OmniMax, on February 2, 2026, the Company entered into a new credit agreement with Bank of America, N.A., as administrative agent and collateral agent, and other financial institutions from time to time party thereto. The Credit Agreement provides for (i) a senior secured revolving credit facility in an initial aggregate principal amount of up to $500 million, (ii) a senior secured term loan A facility in an initial aggregate principal amount of up to $650 million and (iii) a senior secured term loan B facility in an initial aggregate principal amount of up to $650 million. Borrowings under the Credit Agreement were used, together with cash on hand, to fund the acquisition of OmniMax, refinance certain existing indebtedness, and pay related fees and expenses. The Revolving Credit Facility may be used for working capital and other general corporate purposes. The Revolving Credit Facility and Term Loan A Facility mature on February 2, 2031, and the Term Loan B Facility matures on February 2, 2033. In connection with the entry into the Credit Agreement, on February 2, 2026, the Company terminated its existing credit agreement

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Item 7. 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

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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 4 of 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.

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The following table sets forth selected results of operations data (in thousands) and its percentages of net sales for the years ended December 31:

The following table sets forth the Company’s net sales by reportable segment for the years ended December 31 (in thousands):

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.

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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):

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 resul

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