GIBRALTAR INDUSTRIES, INC. (ROCK) FY 2021 MD&A

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 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 3 of this Annual Report on Form 10-K.

Company Overview

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. Our operational infrastructure provides the necessary scale to support local, regional, and national customers in each of our markets.

The Company operates and reports its results in the following four reporting segments:

•Renewables;

•Residential;

•Agtech; and

•Infrastructure.

Demand for products and services in the segments and end markets our 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, 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. We believe the key elements of our strategy outlined in Item 1. Business of this Annual Report on Form 10-K will allow us to respond timely to these factors.

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COVID-19

The COVID-19 pandemic has continued to impact our operations throughout 2021 and into 2022 as new variants of the virus have been identified. Our top priority continues to be focused on our organization - keeping our team and their families as safe as possible, maintaining our supply chain and providing a high level of responsiveness to customer needs. Throughout 2021 and continuing into 2022, COVID-19 and supply chain challenges have impacted our ability to consistently source materials as needed and maintain sufficient quantities to meet short lead times, making it more difficult to forecast customer orders and plan purchases and, in certain instances, resulting in project delays and order fulfillment time extension. To guard against further shortages, we have held higher than historical levels of inventory thus increasing our investment in working capital. These market dynamics have also accelerated material, labor and logistics cost inflation, causing margin pressures. We expect these supply chain, labor and logistics costs and availability pressures will continue in 2022.

Operating Performance Measures

We use certain operating performance measures, specifically consolidated gross margin, operating margin by segment and consolidated operating margin, to manage our businesses, set operational goals, and establish performance targets for incentive compensation for our employees. We define consolidated gross margin as a percentage of total consolidated gross profit to total consolidated net sales. We define 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. We believe gross margin and operating margin may be useful to investors in evaluating the profitability of our segments and Company on a consolidated basis.

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Results of Operations

Year Ended December 31, 2021 Compared to Year Ended December 31, 2020

For a discussion of our results of operations for the year ended December 31, 2020 and for a comparison of such results of operations for the year ended December 31, 2019 results please refer to "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2020 that was filed with the SEC on February 25, 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:

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 2020 by $307.2 million, or 29.8%, to $1.3 billion for 2021 compared to 2020. The 29.8% increase in revenue was driven by the Renewables and Residential segments. Sales generated from our 2020 acquisitions of TerraSmart, Thermo, Delta Separations and Architectural Mailboxes, contributed 20.9% or $215.7 million to the growth from the prior year. Organic growth of 8.9%, or $91.5 million was a result of both increases in pricing to customers of 5.9% and an increase in volume of 3%, the result of strong end market demand and participation gains primarily in our Residential segment. We expect the market environment to be dynamic for at least the first half of 2022 as inflation, labor, transportation, and pandemic challenges and related cost increases persist. Consolidated backlog increased 16% to $344 million up from $297 million at the end of the prior year.

Net sales in our Renewables segment increased 81.5%, or $194.0 million, to $432.1 million in 2021 compared to $238.1 million in 2020. Sales generated by the prior year acquisition of TerraSmart, contributed $187.2 million, or 78.6%, to the increase in the current year. An increase in organic revenue of 2.9% was the net result of strong demand across our broad offering of product solutions partially offset by project delays related to supply chain and field operations disruptions. Backlog improved 27% year over year for this segment, driven by strength in both ground mount and canopy solutions.

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Net sales in our Residential segment increased 21.6%, or $112.7 million, to $635.5 million in 2021 compared to $522.8 million in 2020. The increase from the prior year was the result of continued pricing increases to better align price to inputs costs resulting from inflation, along with strong demand and participation gains that offset challenges from supply chain dynamics. Sales generated by our 2020 acquisition of Architectural Mailboxes also contributed $23.9 million to the increase in the current year.

Net sales in our Agtech segment decreased 4.9%, or $10.3 million, to $199.2 million in 2021 compared to $209.5 million in 2020. The revenue decline of $10.3 million was the result of project delays in our cannabis businesses due to supply chain disruptions, along with state licensing and permit delays. Partially offsetting the decrease was growth in our commercial greenhouse business across its core product lines, along with $4.6 million of sales generated by the prior year acquisitions of Thermo and Delta Separations. Order backlog increased modestly over the prior year with continued strength in its produce and commercial businesses.

Net sales in our Infrastructure segment increased 17.4%, or $10.8 million, to $73.0 million in 2021 compared to $62.2 million in 2020. Demand for fabricated and non-fabricated products increased in the current year as the economy strengthened and state project funding improved. Management expects to see the impact of incremental government spending on infrastructure resulting from the federal infrastructure bill toward the end of 2022. Backlog remained strong increasing 12% compared to the prior year.

Our consolidated gross margin decreased to 21.6% for 2021 compared to 24.8% for 2020. This decrease was largely the result of lower gross margins generated from our recent acquisitions as we continue to integrate them operationally, including the impact of backlog amortization and integration costs. In addition, the timing and alignment of higher input costs to price increases, supply chain disruptions, and shifts in project timing in the Renewables and Agtech segments contributed to the decline, along with costs incurred related to the discontinuation of our organic solar tracker solution as we migrate towards the solution offered by our recently acquired TerraSmart business. Partially offsetting the decrease was improved operating execution compared to the prior year.

Selling, general, and administrative ("SG&A") expenses increased by $35.6 million, or 23.8%, to $184.7 million for 2021 from $149.2 million for 2020. The $35.6 million increase was primarily due to $23.7 million of incremental SG&A expenses recorded year over year for our recent acquisitions and transaction costs to complete those acquisitions. During 2021, we have invested in our organization to ensure the ability to scale the business, enhance safety protocols and drive performance. Furthermore, healthcare costs increased year over year as prior year spend was down due to COVID-19 related closures of medical facilities, while the current year spend was impacted by deferred treatments due to those closures. Despite the above increases, SG&A expenses as a percentage of net sales decreased to 13.8% for 2021 compared to 14.4% for 2020.

During 2021, we 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 our 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 Renewables segment generated an operating margin of 4.7% in 2021 compared to 12.6% in 2020. The decrease in operating margin was the combined expected lower margins generated by our recent acquisitions, the result of backlog amortization and integration costs, as we continue to integrate them operationally and the result of

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costs incurred during the current year related to the discontinuation of our organic solar tracker solution. Additionally contributing to the decrease, was the impact of timing and alignment of price to input costs, the result of continued and unanticipated inflation, and field project management inefficiencies associated with market supply disruptions. Partially offsetting the lower margin is improvement resulting from lean quote-to-cash initiatives.

Our Residential segment operating margin decreased to 16.7% in 2021 compared to 18.1% in 2020. The decrease in operating margin was the result of accelerated inflation, material and labor availability and the timing and alignment of price actions and input costs. We have implemented multiple price increases which has resulted in a return in improved alignment in the fourth quarter of the year. Partially offsetting the lower margin is continued solid execution resulting from 80/20 productivity initiatives.

The Agtech segment generated an operating margin of (0.5)% in 2021 compared to 5.1% in 2020. The decrease in operating margin was the combined impact of the $8.3 million intangible asset impairment charge in the current year related to indefinite-lived trademarks, due to a rebranding initiative this year that resulted in the discontinuation of certain indefinite-lived trademarks, along with impact of delays in project schedules, higher input costs, supply chain and logistical challenges incurred in the current year.

Our Infrastructure segment operating margin increased to 12.2% in 2021 compared to 11.6% in 2020. The increase in operating margin year over year was the result of higher margin mix, and continued investment in 80/20 productivity initiatives, partially offset by unfavorable alignment of pricing to input costs, the result of steel inflation and labor availability challenges.

Unallocated corporate expenses increased $1.8 million, or 5.0%, for 2021 from $35.2 million for 2020 to $37.0 million for 2021. During 2021, we have invested in our organization to ensure the ability to scale the business and drive performance. Furthermore, healthcare costs increased year over year as prior year spend was down due to COVID-19 related closures of medical facilities in 2020, while the current year spend was impacted by deferred treatments due to those closures.

Interest expense increased $0.9 million to $1.6 million for 2021 from $0.7 million for 2020. The increase in expense was primarily due to the outstanding balance on the Company's revolving credit facility throughout 2021, compared to no outstanding borrowings until the last day of 2020 which resulted from funds borrowed to help finance the acquisition of TerraSmart closed on December 31, 2020. The outstanding balances on the revolving credit facility were $23.8 million and $85.0 million as of December 31, 2021, and 2020, respectively.

The Company recorded other income of $4.2 million in 2021 and $1.3 million in 2020.. The $2.9 million increase from the prior year was largely the result of a $4.7 million gain recognized on the sale of securities received from the sellers of Thermo to settle indemnification claims, while the prior year reflected a $1.9 million pre-tax gain on the sale of the Company's self-guided apartment tour application business within the Residential segment.

We recognized a provision for income taxes of $25.0 million, an effective tax rate of 25.2%, for 2021 compared with a provision for income taxes of $24.5 million, an effective tax rate of 22.7%, for 2020. The effective tax rates for 2021 and 2020 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.

Liquidity and Capital Resources

The following table sets forth our liquidity position as of:

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Sources of Liquidity

We believe that our cash on hand and available borrowing capacity provided under our Sixth Amended and Restated Credit Agreement (the "Senior Credit Agreement") provide us with ample liquidity and capital resources to invest in operational excellence, growth initiatives and the development of our organization. We have been able to weather the economic impacts of the COVID-19 pandemic and the broader market dynamics in 2021, including the current inflationary cost environment, while continuing to make investments that support our strategy. We continue to remain focused on managing our working capital, closely monitoring customer credit and collection activities, and working to extend payment terms. We have managed our liquidity in the current inflationary cost environment through price management strategies that have allowed us to continue to generate cash from operations. We believe our 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.

Our Senior Credit Agreement provides the Company with liquidity for use by our U.S. operations. Historically, our foreign operations have generated cash flow from operations sufficient to invest in working capital and fund their capital improvements. As of December 31, 2021, our foreign subsidiaries held $11.3 million of cash.

Outstanding balances on our revolving credit facility under our Senior Credit Agreement accrue interest at a rate based on LIBOR plus an additional margin. We do not expect a material change in interest expense as a result of transitioning from a LIBOR rate to a new reference rate. 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 Senior Credit Agreement.

Uses of Cash / Cash Requirements

Our 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 our revolving credit facility, capital expenditures, and other purchase obligations originating in the normal course of business for inventory purchase orders and contractual service agreements. Our principal capital requirements are to fund our operations' working capital and capital improvements and to provide capital for acquisitions. We will continue to invest in growth opportunities as appropriate while focusing on working capital efficiency and profit improvement opportunities to minimize the cash invested to operate our business. We intend to fund our cash requirements through cash generated from operations and, as necessary, from the availability on our revolving credit facility. See Notes 8, 10, 12, 18 and 20 to the Company's consolidated financial statements in Part II, Item 8, Financial Statements, of this Annual Report on Form 10-K for further detail on the Company's accrued expenses, employee and retiree benefit-related obligations, operating lease obligations and historical capital expenditures.

During 2020, we opted to defer remittance of the employer portion of Social Security tax as provided in the Coronavirus, Aid, Relief and Economic Security Act ("CARES Act"), which allowed us to retain $4.4 million in cash during 2020 that would have otherwise been remitted to the federal government. The deferred tax payments were required to be repaid in two installments occurring near the end of each year 2021 and 2022, of which $1.9 million was repaid in 2021 and the remaining $2.5 million will be repaid by the end of 2022.

Over the long-term, we expect that future investments, including strategic business opportunities such as acquisitions, may be financed through a number of sources, including internally available cash, availability under our Senior Credit Agreement, new debt financing, the issuance of equity securities, or any combination of the above. All potential acquisitions are evaluated based on our acquisition strategy, which includes the enhancement of our existing products, operations, or capabilities, expanding our access to new products, markets, and customers, with the goal of creating compounding and sustainable stockholder value.

These expectations are forward-looking statements based upon currently available information and may change if conditions in the credit and equity markets deteriorate or other circumstances change. To the extent that operating cash flows are lower than current levels, or sources of financing are not available or not available at acceptable terms, our future liquidity may be adversely affected.

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Cash Flows

The following table sets forth selected cash flow data for the years ended December 31 (in thousands):

Operating Activities

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 million. The investment in working capital and other net assets was largely due to increases in inventory and accounts payable due to higher inventory input costs, such as raw materials and freight, and provisioning for potential supply chain disruptions, along with increases in accounts receivable due to the timing of invoicing project-based customers, partially offset by a decrease in accrued expenses.

Net cash provided by operating activities of continuing operations for 2020 of $73.0 million consisted of income from continuing operations of $83.3 million, non-cash net charges totaling $33.4 million, which include depreciation, amortization, gain on sale of business, stock compensation, and other non-cash charges, offset by a net investment in working capital and other net assets of $43.7 million. The investment in working capital and other net assets was largely due to an investment of $42.4 million in Thermo, one of our recent acquisitions, which was undercapitalized at purchase, along with a decrease in accrued expenses and other non-current liabilities correlated to the timing of customer billings and payments.

Investing Activities

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.

Net cash used in investing activities of continuing operations for 2020 of $324.7 million consisted of net cash paid of $313.7 million for the acquisitions of five businesses in 2020 and capital expenditures of $13.1 million, partially offset by net proceeds of $2.0 million from the sale of a business within the Residential segment and proceeds of $0.1 million from the sale of property and equipment.

Financing Activities

Net cash used in financing activities for 2021 of $66.6 million was 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 our long-term credit facility and $1.0 million from the issuance of common stock from stock option exercises during the year.

Net cash provided by financing activities for 2020 of $79.5 million was primarily driven by proceeds from a draw on our revolving credit facility of $85 million, as well as the $1.1 million in net proceeds from stock option exercises, offset by $6.6 million in common stock repurchases related to the net settlement of tax obligations for participants in the Company's equity incentive plans.

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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;

•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.

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.

Revenue Recognition on Contracts

The vast majority of our sales contracts are for standard products with revenue recognized at the point in time we transfer control to the customer. The point in time we transfer control is based on when we determine the customer has legal title, significant risks and rewards of ownership of the asset, and we have a present right to payment for the product. However, revenue representing 47%, 40% and 41% of our 2021, 2020 and 2019 consolidated net sales, respectively, was recognized over time under the cost-to-cost method as we satisfied our performance obligations. This method of revenue recognition pertains to activities within the Renewables, Agtech, and Infrastructure segments.

Revenue recognized on contracts over time using the cost-to-cost method for measuring progress is recognized as work progresses toward completion based on the ratio of cumulative costs incurred to date to estimated total contract costs at completion. Revenues are recognized proportionally as costs are incurred under this method. Estimates of the total costs at completion for the performance obligations involve subjective judgment and estimation to determine total costs expected to be incurred by the time the performance obligation has been completed and accepted by the customer. The estimates of total costs to be incurred at completion of each contract are sensitive to significant judgments and assumptions, such as the expected costs to complete installation, which are affected by customer site-specific conditions as well as availability and cost of third-party contractors to complete the installation process. 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. We continuously review our estimates and the progress and performance of the performance obligation for substantially all contracts that we recognize revenue over time under the cost-to-cost method. Any adjustments or changes in these estimates affecting sales, costs and profits are recognized in the period in which the change becomes known using the cumulative catch-up method of accounting, resulting in the cumulative effect of changes reflected in the period. A significant change in an estimate on one or more contracts could have a material effect on our results of operations.

Contract costs include all direct costs related to contract performance. Selling and administrative expenses are charged to operations as incurred. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Because of inherent uncertainties in estimating costs, it is reasonably possible that changes in performance could result in revisions to cost and revenue, which are recognized in the period when the revisions are determined.

Accounting for Acquired Assets and Liabilities

When we acquire a business, we allocate the purchase price to the assets acquired and liabilities assumed in the transaction at their respective estimated fair values. We record any premium over the fair value of net assets acquired as goodwill. Significant judgment is necessary to determine the fair value of the purchase price. The

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allocation of the purchase price involves judgments and estimates both in characterizing the assets and in determining their fair value. The way we characterize 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. We use all available information to make these fair value determinations and engage independent valuation specialists to assist in the fair value determination of the acquired long-lived assets. The fair values of long-lived assets are determined using valuation techniques that use discounted cash flow methods, independent market appraisals, and other acceptable valuation techniques. 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). The significant assumptions related to estimating the fair value of the intangible assets above are forward looking and could be affected by future economic market conditions.

Goodwill and Other Indefinite-lived Intangible Asset Impairment Testing

Our goodwill and indefinite-lived intangible asset balances of $510.9 million and $52.7 million, respectively, which in aggregate represent 46% of total assets as of December 31, 2021, are subject to impairment testing. We 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.

We test goodwill for impairment at the reporting unit level. We identify our reporting units by assessing whether the components of our Company constitute businesses for which discrete financial information is available and segment management regularly reviews the operating results of those components. We have eight reporting units, all of which have goodwill. We test our 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.

During interim periods, we evaluate the potential for goodwill and indefinite-lived intangible asset impairment using a qualitative assessment by considering factors such as, but not limited to, macroeconomic conditions, industry conditions, the competitive environment, changes in the market for our products and services, regulatory and political developments, entity specific factors such as strategy, changes in key personnel, and overall financial performance. Upon completing this assessment, if it is determined that it is more likely than not that the fair value is less than its carrying value, we proceed to a quantitative impairment test. During the interim periods of 2021, we 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 on all eight reporting units as of October 31, during which we 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. If the carrying amount of the reporting unit exceeds the reporting unit’s fair value, an impairment loss is recognized in the amount by which the carrying value of the reporting unit exceeds the fair value of the reporting unit. The assumptions used to determine the fair value of our indefinite-lived intangible assets are consistent with the assumptions employed in the determination of the fair values of our reporting units. An impairment loss would be recognized for the carrying amount in excess of its fair value. The fair values of the impaired trademarks were determined using an income approach consisting of the relief-from-royalty method.

The annual quantitative impairment tests require subjective and complex judgment due to the significant estimation required in determining the fair value of the reporting units and the fair value of indefinite-lived intangible assets. Reporting unit fair value estimates include significant assumptions such as: revenue growth rates, operating margins, estimated royalty rates, company-specific risk premiums used in the weighted-average cost of capital, and EBITDA multiples, which are affected by expectations about future market or economic conditions. 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.

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As a result of our quantitative testing, none of the reporting units as of our testing date had carrying values in excess of their fair values, nor were any of the reporting units "at-risk" of impairment. The Company quantitatively defines "at risk" as a percentage of the excess of the reporting unit's fair value over its carrying amount that is less than 10%. An "at risk" reporting unit qualitatively represents a reporting unit with a higher degree of uncertainty of the reporting unit's ability to meet its forecasted cash flows based upon revenue growth rate and operating margin assumptions relied upon in the estimation of its fair value. There were no impairment charges against goodwill recorded during the years ended December 31, 2021, 2020, and 2019.

During 2021, the Company recognized $8.3 million of impairment charges on our indefinite-lived intangible assets, due to a rebranding initiative resulting in the discontinuation of two indefinite-lived trademarks in our Agtech segment. The Company did not recognize any impairment charges on our indefinite-lived intangible assets in 2020 and 2019.

Recent 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 for further information on recent accounting pronouncements in accordance with U.S. generally accepted accounting principles.

In 2020, the SEC issued a final rule about Management's Discussion and Analysis, Selected Financial Data, and Supplementary Financial Information, which became effective on February 10, 2021. The rule intends to eliminate duplicate disclosures and to improve and simplify the disclosures within Management's Discussion and Analysis Items 301, 302 and 303. Early adoption is permitted on an Item-by-Item basis, provided that the Company complies fully with all areas of that Item. We elected early adoption of the amendments of Item 301 in our Annual Report on Form 10-K for the year ended December 31, 2020 and adopted requirements of Items 302 and 303 in our Annual Report on Form 10-K for this year ended December 31, 2021.