Gibraltar Industries Inc.
10/30/2025 | Press release | Distributed by Public on 10/30/2025 05:56
Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)
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
Gibraltar Industries, Inc. (the "Company") is a leading manufacturer and provider of products and services for the residential, agtech, and infrastructure markets.
The Company operates and reports its results in the following three reporting segments:
•Residential
•Agtech
•Infrastructure
The Company's continuing operations serve customers primarily in North America including home improvement retailers, wholesalers, distributors, contractors, institutional and commercial growers of fruits, vegetables, flowers and other plants, convenience stores, travel centers, food retailers, and quick-serve restaurants.
At September 30, 2025, the Company's continuing operations operated in thirty-six facilities, comprised of thirty-one manufacturing facilities and five offices, which are located in twenty states, Canada, and China. The Company's operational infrastructure provides the necessary scale to support local, regional, and national customers in each of the Company's markets.
Recent Trends
Impacts of Macroeconomic Conditions on our Business
The Company is closely monitoring the fluid nature of the current macroeconomic conditions as it could be adversely impacted by the potential expansion of tariffs for imports of raw materials, primarily steel and aluminum, used in its manufacturing processes, as well as responsive or related policies enacted in other countries.
The global and regional economic conditions may cause volatility in demand for our products as well as cost of materials and logistics. These conditions may result in impacts to the pricing of the Company's products, product availability and its results of operations, for which such impact is uncertain at this time.
Business Strategy
The Company's mission is to make life better for people and the planet, fueled by advancing the disciplines of engineering, science, and technology. The Company is innovating to reshape critical markets in comfortable living and productive growing throughout North America. Furthermore, the Company strives to create compounding and sustainable value for its stockholders and stakeholders with strong and relevant leadership positions in higher growth, profitable end markets focused on addressing some of the world's most challenging opportunities. The foundation of the Company's strategy is built on three core pillars: Business System, Portfolio Management, and Organization Development.
1.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.
2.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.
3.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 succession plans. The Company believes doing so helps it attract and retain the best people to execute its business plans.
The Company believes the key elements of the Company's strategy enable the Company to respond timely to changes in the end markets the Company serves, including the broader market dynamics experienced over the past few years. The Company continues to examine the need for restructuring of the Company's operations, including consolidation of facilities, reducing overhead costs, curtailing investments in working capital, and managing the Company's business to generate incremental cash. The Company believes its strategy enables the Company to respond to volatility in commodity and other input costs and fluctuations in customer demand, along with striving to maintain and improve margins. The Company has used cash flows generated by these initiatives to improve the Company's liquidity position, invest in growth initiatives, including most recently the acquisition of three businesses in separate transactions all of which were funded with cash on hand, and return capital to the Company's shareholders through share repurchases. Overall, the Company continues to strive to achieve stronger financial results, make more efficient use of capital, and deliver higher stockholder returns.
Recent Developments
On July 31, 2025, the Company purchased substantially all of the assets of a privately held business that primarily specializes in the manufacturing of metal roofing systems for $16.0 million in an all cash transaction, subject to customary working capital and other adjustments. This business will be reported as part of the Company's Residential segment.
In April 2025, the Company's Board of Directors authorized a new share repurchase program of up to $200 million of the Company's issued and outstanding common stock. The new program has a duration of three years, ending April 30, 2028. Repurchases may be made, from time to time, in amounts and at prices the Company deems appropriate, subject to market conditions, applicable legal requirements, debt covenants and other considerations. Any such repurchases may be executed using open market purchases, privately negotiated agreements or other transactions. The repurchase program may be suspended or discontinued at any time at the Company's discretion.
On March 31, 2025, the Company acquired two privately held businesses that primarily specialize in the manufacturing of metal roofing systems. The Company purchased all the outstanding stock of one of the businesses and substantially all of the assets of the other business for a combined preliminary purchase consideration of $90 million in an all cash transaction. These businesses are reported as part of the Company's Residential segment.
On February 11, 2025, the Company purchased all the outstanding stock of 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, for $117 million in an all cash transaction. Lane Supply is reported as part of the Company's Agtech segment.
On December 17, 2024, the Company sold its electronic locker business within its Residential segment to a third party and received net proceeds of $28 million.
Discontinued Operations
In June 2025, the Company committed to a plan to sell its Renewables business, which represents a strategic shift in operations. The decision was driven by a change in the Company's long-term strategy to focus its asset portfolio and resources on its Residential, Agtech and Infrastructure segments. The Renewables business was classified as held for sale as of June 30, 2025, and met the criteria for discontinued operations. On September 30, 2025 the carrying amount was written down to its fair value less the costs to sell as of September 30, 2025 resulting in the recognition of an impairment loss before income taxes of $162.7 million. Unless otherwise indicated, all results and information presented exclude discontinued operations disclosures. See Note 13 to the Company's consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information on discontinued operations.
Results of Operations
Three Months Ended September 30, 2025 Compared to the Three Months Ended September 30, 2024
The following table sets forth selected results of operations data and percentage of net sales for the three months ended September 30 (in thousands):
| 2025 | 2024 | ||||||||||||||||||||||
| Net sales | $ | 310,939 | 100.0 | % | $ | 277,132 | 100.0 | % | |||||||||||||||
| Cost of sales | 228,193 | 73.4 | % | 195,748 | 70.6 | % | |||||||||||||||||
| Gross profit | 82,746 | 26.6 | % | 81,384 | 29.4 | % | |||||||||||||||||
| Selling, general, and administrative expense | 42,804 | 13.8 | % | 38,211 | 13.8 | % | |||||||||||||||||
| Income from operations | 39,942 | 12.8 | % | 43,173 | 15.6 | % | |||||||||||||||||
| Interest expense (income) | 2 | 0.0 | % | (1,931) | (0.7) | % | |||||||||||||||||
| Other (income) expense | (1,989) | (0.7) | % | 402 | 0.2 | % | |||||||||||||||||
| Income before taxes | 41,929 | 13.5 | % | 44,702 | 16.1 | % | |||||||||||||||||
| Provision for income taxes | 8,724 | 2.8 | % | 10,890 | 3.9 | % | |||||||||||||||||
| Income from continuing operations | 33,205 | 10.7 | % | 33,812 | 12.2 | % | |||||||||||||||||
| (Loss) income from discontinued operations | (122,267) | (39.3) | % | 227 | 0.1 | % | |||||||||||||||||
| Net (loss) income | $ | (89,062) | (28.6) | % | $ | 34,039 | 12.3 | % | |||||||||||||||
The following table sets forth the Company's net sales by reportable segment for the three months ended September 30, (in thousands):
| Impact of | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 |
Total Change |
Acquisitions | Portfolio Management | Ongoing Operations | ||||||||||||||||||||||||||||||
| Net sales: | |||||||||||||||||||||||||||||||||||
| Residential | $ | 230,286 | $ | 212,363 | $ | 17,923 | $ | 22,928 | $ | (2,558) | $ | (2,447) | |||||||||||||||||||||||
| Agtech | 57,565 | 41,527 | 16,038 | 33,400 | - | (17,362) | |||||||||||||||||||||||||||||
| Infrastructure | 23,088 | 23,242 | (154) | - | - | (154) | |||||||||||||||||||||||||||||
| Consolidated | $ | 310,939 | $ | 277,132 | $ | 33,807 | $ | 56,328 | $ | (2,558) | $ | (19,963) | |||||||||||||||||||||||
Consolidated net sales increased by $33.8 million, or 12.2%, to $310.9 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase in revenue was driven by $56.3 million of net sales generated from the Company's current year acquisitions, along with participation gains in the residential building accessories business. This increase was partially offset by a delayed project start in the Agtech segment, along with softness in the residential mail and package business. Consolidated backlog increased 50% to $257 million, as compared to the end of the prior year quarter.
Net sales in the Company's Residential segment increased $17.9 million, or 8.4%, to $230.3 million for the three months ended September 30, 2025 compared to $212.4 million for the three months ended September 30, 2024. The revenue of $22.9 million generated from the current year acquisition 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 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 Company's Agtech segment increased 38.8%, or $16.0 million, to $57.6 million for the three months ended September 30, 2025 compared to $41.5 million for the three months ended September 30, 2024. The revenue increase was largely due to $33.4 million generated from the acquisition of Lane Supply, which more than offset the decrease in organic sales, which was due to a timing shift in a large new project start. Backlog increased 96% year over year in this segment, including organic backlog growth of 75%.
Net sales in the Company's Infrastructure segment were slightly down for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, impacted by a supplier transition resulting in revenue shifting into the fourth quarter. Backlog decreased 2% from the prior year, though demand and quoting activity remained strong.
The Company's consolidated gross margin decreased to 26.6% for the three months ended September 30, 2025 compared to 29.4% for the three months ended September 30, 2024. The decrease was driven by product line mix, partially offset by overall continued operational efficiencies along with 80/20 initiatives.
Selling, general, and administrative ("SG&A") expense increased by $4.6 million, or 12.0% to $42.8 million for the three months ended September 30, 2025 compared to $38.2 million for the three months ended September 30, 2024. The $4.6 million increase was primarily due to incremental SG&A expense incurred by recent acquisitions, partially offset by lower performance-based compensation expense as compared to the prior year quarter. SG&A expense as a percentage of net sales was flat at 13.8% for the three months ended September 30, 2025 and 2024, respectively.
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 three months ended September 30, (in thousands):
| 2025 | 2024 |
Total Change |
|||||||||||||||||||||||||||
| Income from operations: | |||||||||||||||||||||||||||||
| Residential | $ | 40,432 | 17.6 | % | $ | 42,055 | 19.8 | % | $ | (1,623) | |||||||||||||||||||
| Agtech | 3,178 | 5.5 | % | 3,853 | 9.3 | % | (675) | ||||||||||||||||||||||
| Infrastructure | 4,737 | 20.5 | % | 6,494 | 27.9 | % | (1,757) | ||||||||||||||||||||||
| Unallocated Corporate Expenses | (8,405) | (2.7) | % | (9,229) | (3.3) | % | 824 | ||||||||||||||||||||||
| Consolidated income from operations | $ | 39,942 | 12.8 | % | $ | 43,173 | 15.6 | % | $ | (3,231) | |||||||||||||||||||
The Residential segment generated an operating margin of 17.6% in the current year quarter compared to 19.8% in the prior year quarter. Operating margin declined year over year, primarily as a result of product mix and higher integration costs incurred during the current year quarter.
The Agtech segment generated an operating margin of 5.5% in the current year quarter compared to 9.3% in the prior year quarter. Operating margin declined year over year due to lower organic volumes along with the impact of integration activities for Lane Supply.
The Infrastructure segment generated an operating margin of 20.5% during the three months ended September 30, 2025 compared to 27.9% during the three months ended September 30, 2024. The margin decline year over year was the result of the inefficiency related to the supplier transition.
Unallocated corporate expenses decreased $0.8 million to $8.4 million during the three months ended September 30, 2025 from $9.2 million during the three months ended September 30, 2024. The decrease was largely the result of lower performance-based compensation expense partially offset by higher acquisition-related expense as compared to the prior year quarter.
Interest expense recorded by the Company during the three months ended September 30, 2025 was the result of maintenance fees associated with the revolving credit facility and was nearly offset by earnings on certain interest-bearing cash accounts. The Company recorded interest income of $1.9 million for the three months ended September 30, 2024, the result of earnings on certain interest-bearing cash accounts.
The Company recorded other income of $2.0 million for the three months ended September 30, 2025, compared to other expense of $0.4 million for the three months ended September 30, 2024.
The Company recognized a provision for income taxes of $8.7 million and $10.9 million, with effective tax rates of 20.8% and 24.4% for the three months ended September 30, 2025, and 2024, respectively. The effective tax rate for the three months ended September 30, 2025 was less than the U.S. federal statutory rate of 21% due to favorable discrete items related to an excess tax benefit on stock-based compensation and the benefit of purchased tax credits that will be carried back to prior tax years. The effective tax rate for the three months ended September 30, 2024 was greater than 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.
Nine Months Ended September 30, 2025 Compared to the Nine Months Ended September 30, 2024
The following table sets forth selected results of operations data and percentage of net sales for the nine months ended September 30 (in thousands):
| 2025 | 2024 | ||||||||||||||||||||||
| Net sales | $ | 866,813 | 100.0 | % | $ | 791,766 | 100.0 | % | |||||||||||||||
| Cost of sales | 626,379 | 72.3 | % | 554,967 | 70.1 | % | |||||||||||||||||
| Gross profit | 240,434 | 27.7 | % | 236,799 | 29.9 | % | |||||||||||||||||
| Selling, general, and administrative expense | 132,331 | 15.2 | % | 122,712 | 15.5 | % | |||||||||||||||||
| Income from operations | 108,103 | 12.5 | % | 114,087 | 14.4 | % | |||||||||||||||||
| Interest income | (1,281) | (0.2) | % | (4,176) | (0.5) | % | |||||||||||||||||
| Other (income) expense | (2,018) | (0.2) | % | 236 | 0.0 | % | |||||||||||||||||
| Income before taxes | 111,402 | 12.9 | % | 118,027 | 14.9 | % | |||||||||||||||||
| Provision for income taxes | 25,644 | 3.0 | % | 30,277 | 3.8 | % | |||||||||||||||||
| Income from continuing operations | 85,758 | 9.9 | % | 87,750 | 11.1 | % | |||||||||||||||||
| (Loss) income from discontinued operations | (127,697) | (14.7) | % | 3,433 | 0.4 | % | |||||||||||||||||
| Net (loss) income | $ | (41,939) | (4.8) | % | $ | 91,183 | 11.5 | % | |||||||||||||||
The following table sets forth the Company's net sales by reportable segment for the nine months ended September 30, (in thousands):
| Impact of | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 |
Total Change |
Acquisitions | Portfolio Management | Ongoing Operations | ||||||||||||||||||||||||||||||
| Net sales: | |||||||||||||||||||||||||||||||||||
| Residential | $ | 640,538 | $ | 611,790 | $ | 28,748 | $ | 43,552 | $ | (8,111) | $ | (6,693) | |||||||||||||||||||||||
| Agtech | 156,697 | 110,062 | 46,635 | 78,048 | - | (31,413) | |||||||||||||||||||||||||||||
| Infrastructure | 69,578 | 69,914 | (336) | - | - | (336) | |||||||||||||||||||||||||||||
| Consolidated | $ | 866,813 | $ | 791,766 | $ | 75,047 | $ | 121,600 | $ | (8,111) | $ | (38,442) | |||||||||||||||||||||||
Consolidated net sales increased by $75.0 million, or 9.5%, to $866.8 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase in revenue was driven by $121.6 million of net sales generated from the current year acquisitions along with 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 50% to $257 million, as compared to the prior year period.
Net sales in the Company's Residential segment increased $28.7 million, or 4.7%, to $640.5 million for the nine months ended September 30, 2025 compared to $611.8 million for the nine months ended September 30, 2024. The revenue of $43.6 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 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 Company's Agtech segment increased 42.3%, or $46.6 million, to $156.7 million for the nine months ended September 30, 2025 compared to $110.1 million for the nine months ended September 30, 2024. The revenue increase was largely due to $78.0 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 96% year over year in this segment, including organic backlog growth of 75%.
Net sales in the Company's Infrastructure segment were essentially flat for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024. Backlog decreased 2% from the prior year, though demand and quoting activity remained strong.
The Company's consolidated gross margin decreased to 27.7% for the nine months ended September 30, 2025 compared to 29.9% for the nine months ended September 30, 2024. The decrease was driven by product line mix, partially offset by overall continued operational efficiencies along with 80/20 initiatives.
Selling, general, and administrative ("SG&A") expense increased by $9.6 million, or 7.8% to $132.3 million for the nine months ended September 30, 2025 compared to $122.7 million for the nine months ended September 30, 2024. The $9.6 million increase was primarily due to incremental SG&A expense incurred by recent acquisitions, partially offset by lower performance-based compensation expense as compared to the prior year. SG&A expense as a percentage of net sales decreased to 15.2% for the nine months ended September 30, 2025 compared to 15.5% for the nine months ended September 30, 2024.
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 nine months ended September 30, (in thousands):
| 2025 | 2024 |
Total Change |
|||||||||||||||||||||||||||
| Income from operations: | |||||||||||||||||||||||||||||
| Residential | $ | 115,303 | 18.0 | % | $ | 119,714 | 19.6 | % | $ | (4,411) | |||||||||||||||||||
| Agtech | 6,069 | 3.9 | % | 8,743 | 7.9 | % | (2,674) | ||||||||||||||||||||||
| Infrastructure | 17,078 | 24.5 | % | 17,605 | 25.2 | % | (527) | ||||||||||||||||||||||
| Unallocated Corporate Expenses | (30,347) | (3.5) | % | (31,975) | (4.0) | % | 1,628 | ||||||||||||||||||||||
| Consolidated income from operations | $ | 108,103 | 12.5 | % | $ | 114,087 | 14.4 | % | $ | (5,984) | |||||||||||||||||||
The Residential segment generated an operating margin of 18.0% in the current year compared to 19.6% in the prior year. Operating margin declined year over year the result of product mix and impact of acquisition integration during the current year.
The Agtech segment generated an operating margin of 3.9% in the current year compared to 7.9% in the prior year. Operating margin declined year over year due to costs related to the acquisition of Lane Supply and the impact of lower organic volumes.
The Infrastructure segment generated an operating margin of 24.5% during the nine months ended September 30, 2025 compared to 25.2% during the nine months ended September 30, 2024. The margin decline year over year was largely the result of product line mix.
Unallocated corporate expenses decreased $1.6 million to $30.3 million during the nine months ended September 30, 2025 from $32.0 million during the nine months ended September 30, 2024. The decrease was largely the result of lower performance-based compensation expense partially offset by higher acquisition-related expense as compared to the prior year.
The Company recorded interest income of $1.3 million for the nine months ended September 30, 2025, compared to $4.2 million for the nine months ended September 30, 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 during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.
The Company recorded other income of $2.0 million for the nine months ended September 30, 2025, compared to other expense of $0.2 million for the nine months ended September 30, 2024.
The Company recognized a provision for income taxes of $25.6 million and $30.3 million, with effective tax rates of 23.0% and 25.7% for the nine months ended September 30, 2025, and 2024, respectively. The effective tax rate for the nine months ended September 30, 2025 and 2024, respectively, was greater than 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 the Company's liquidity position as of (in thousands):
| September 30, 2025 | December 31, 2024 | |||||||||||||
| Cash and cash equivalents | $ | 89,403 | $ | 269,480 | ||||||||||
| Availability on revolving credit facility | 393,793 | 395,069 | ||||||||||||
| $ | 483,196 | $ | 664,549 | |||||||||||
Sources of Liquidity
The Company's primary sources of liquidity are comprised of cash on hand and its available borrowing capacity provided under the Company's Credit Agreement. The Credit Agreement provides for a revolving credit facility and letters of credit in an aggregate amount equal to $400 million and terminates on December 8, 2027. 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. See Note 7 to the Company's consolidated financial statements in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q for further information on the Credit Agreement.
Generally, the Company's foreign operations have generated cash flow from operations sufficient to invest in working capital and fund their capital improvements. As of September 30, 2025 and December 31, 2024, the Company's foreign subsidiaries held $5.4 million and $8.9 million of cash, respectively.
The Company believes that these sources, together with cash expected to be generated from operations, should provide the Company with ample liquidity and capital resources to meet both its short-term and long-term cash requirements and to continue to invest in operational excellence, growth initiatives, share repurchases and the development of the organization.
Uses of Cash / Cash Requirements
The Company's material short-term cash requirements primarily include accounts payable, certain employee and retiree benefit-related obligations, operating lease obligations, capital expenditures, and other purchase obligations originating in the normal course of business for inventory purchase orders and contractual service agreements. The Company's principal capital requirements are to fund its operations' working capital and capital improvements, as well as provide capital for acquisitions and to strategically allocate capital through repurchases of Company stock under the Company's new authorized program as further detailed below. The Company 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 its business.
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. The program has a duration of three years, ending April 30, 2028. Repurchases may be made, from time to time, in amounts and at prices the Company deems appropriate, subject to market conditions, applicable legal requirements, debt covenants and other considerations. Any such repurchases may be executed using open market purchases, privately negotiated agreements or other transactions. The repurchase program may be suspended or discontinued at any time at the Company's discretion.
Over the long-term, the Company expects that future investments, including strategic business acquisitions, may be financed through a number of sources, including internally available cash, availability under the Credit Agreement, new debt financing, the issuance of equity securities, or any combination of the aforementioned.
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, the Company's future liquidity may be adversely affected.
Except as disclosed above, there have been no material changes in the Company's cash requirements since December 31, 2024. See Part II, Item 7 "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.
Cash Flows
The following table sets forth selected cash flow data for the nine months ended September 30, (in thousands):
| 2025 | 2024 | ||||||||||
| Net cash provided by (used in): | |||||||||||
| Operating activities of continuing operations | $ | 105,380 | $ | 131,551 | |||||||
| Investing activities of continuing operations | (247,279) | (11,506) | |||||||||
| Financing activities | (63,542) | (10,940) | |||||||||
| Discontinued operations | 25,153 | 20,314 | |||||||||
| Effect of foreign exchange rate changes | 211 | 34 | |||||||||
| Net (decrease) increase in cash and cash equivalents | $ | (180,077) | $ | 129,453 | |||||||
Operating Activities
Net cash provided by operating activities of continuing operations for the nine months ended September 30, 2025 of $105.4 million consisted of income from continuing operations of $85.8 million, non-cash net charges totaling $31.7 million, which include depreciation, amortization, stock-based compensation and other non-cash charges, and $12.1 million of cash invested in working capital and other net operating assets. The cash invested in working capital and other net operating assets was primarily the result of increases in accounts receivable and inventory, partially offset by increases in accounts payable, largely the result of seasonal demand.
Net cash provided by operating activities of continuing operations for the nine months ended September 30, 2024 of $131.6 million consisted of income from continuing operations of $87.8 million, non-cash net charges totaling $25.7 million, which include depreciation, amortization, stock-based compensation and other non-cash charges, and $18.1 million of cash generated from working capital and other net operating assets. The cash generated from working capital and other net operating assets was largely due to increases in accounts payable, the result of the timing of purchases and vendor payments, that were partially offset by increases in accounts receivable, largely the result of seasonal demand.
Investing Activities
Net cash used in investing activities of continuing operations for the nine months ended September 30, 2025 was $247.3 million, primarily due to the acquisitions of Lane Supply and the three metal roofing related businesses of $210.4 million, and net capital expenditures of $37.2 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 used in investing activities of continuing operations for the nine months ended September 30, 2024 of $11.5 million was due to net capital expenditures.
Financing Activities
Net cash used in financing activities totaled $63.5 million for the nine months ended September 30, 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 $3.7 million was used to repurchase common stock 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 $10.9 million for the nine months ended September 30, 2024 driven by common stock repurchases. The Company repurchased 139,427 shares for $9.0 million under the Company's prior authorized share repurchase program that ended May 2, 2025. An additional $1.9 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
There have been no material changes to the Company's critical accounting estimates during the quarter ended September 30, 2025 from those disclosed in the consolidated financial statements and accompanying notes contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2024 and the Critical Accounting Estimates in Part I, Item 2 in the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2025.
Recent Accounting Pronouncements
See Note 1 to the Company's consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information on recent accounting pronouncements.
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