Gibraltar Industries, Inc.

Greetings and welcome to Gibraltar Industries' fourth quarter 2023 financial results conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Carolyn Capaccio, LHA Investor Relations. Thank you. You may begin.

Thanks, Operator. Good morning, everyone, and thank you for joining us today. With me on the call is Bill Bosway, Gibraltar Industries Chairman, President, and Chief Executive Officer, and Tim Murphy, Gibraltar's Chief Financial Officer. The earnings press release that was issued this morning, as well as a slide presentation that management will use during the call, are both available in the Investors section of the company's website, GibraltarOne.com. Gibraltar's earnings press release and remarks contain non-GAAP financial measures. Tables of reconciliation of GAAP to adjusted financial measures can be found in the earnings press release that was issued today. Also, as noted on slide two of the presentation, the earnings press release and slide presentation contain forward-looking statements with respect to future financial results. These statements are not guarantees of future performance, and the company's actual results may differ materially from the anticipated events performance, or results expressed or implied by these forward-looking statements. Gibraltar advises you to read the risk factors detailed in its SEC filings, which can be accessed through the company's website. Now I'll turn the call over to Bill Bosway. Bill?

Bill Bosway Thanks, Carolyn. Good morning, everyone, and thank you for joining today's call. We'll start with an overview of fourth quarter and full-year 2023 results, and Tim will take you through our financial performance, and I'll walk you through our 2024 outlook And then we'll open the call for your questions. So let's turn to slide three, titled 2023 Year in Review. We delivered a strong finish to a very good year for Gibraltar, and I like our momentum as we move forward. In 2023, we expanded our market leadership positions. We continue to improve our quality of earnings and generate strong cash flow. Our residential and infrastructure businesses delivered solid growth and strong margin expansion. And renewables delivered excellent margin expansion despite ongoing industry headwinds impacting revenue. For the year, adjusted operating income grew 16%, adjusted EBITDA grew 15%, and adjusted EPS grew 21% on essentially flat sales. Through solid margin expansion and improvement in working capital, we generated $218 million of operating cash flow and a free cash flow rate to sales of 15%. In the fourth quarter, all four segments contributed net sales growth. demonstrating solid momentum going forward, and booking strength resulted in the backlog being up 10% as we closed out the year. As well, our recent acquisitions and residential executed to plan, and during the fourth quarter, we further optimized our portfolio by divesting our small non-strategic solar business located in Japan. In all, we had a very productive year, and I'm incredibly proud of our entire organization for staying focused on what matters most, doing things the right way, and building a stronger foundation for the future. We enter the new year with solid in-market fundamentals, improving market conditions and renewables and ag tech in markets, and a more scalable and efficient operating engine, and we look forward to another strong year in 2024. Let's turn to slide four for an update on the solar market. Although the overall industry has improved, there remain some short-term headwinds that the industry is navigating through. First, the industry is waiting on the Department of Treasury to issue final guidelines on IRA tax credits, specifically a 10% domestic content bonus. The delay of these guidelines, particularly in this high interest rate environment, has caused some customers to pause finalizing and executing projects as they try to pin down project economics and returns and therefore project financing. The most recent consensus is that the guidelines are expected in the first or second quarter of 2024. Secondly, permitting delays at the local level are impacting some customer project start dates, so the situation is improving as local government offices add capacity to support normalized demand levels. For our customers, each permit situation is unique to a location and local government office, and ultimately, project schedule changes create a timing impact for revenue. For context, historically, we experienced about 10% of our planned revenue to shift from one quarter to the next or to a future quarter, Toward the end of 2022 and for the first three quarters of 2023, we experienced a revenue shift of approximately 25%, which is a significant change to historical norms. We started to see the situation improve during the fourth quarter, which is reflected in our business generating positive growth in the quarter. With respect to module supply, it continues to improve and be less of a headwind for our customers. For the UFLTA, importers continue to move up the enforcement learning curve, and there seems to be much more consistency in flow and availability of modules. In regard to the Department of Commerce anti-dumping and countervailing duty case, as of now, three of the eight module suppliers investigated by the DOC are expected to export modules to the U.S., are able to export modules to the U.S. without duty. An executive order from the administration to waive tariffs for two years has remained in force and will so until June 2024. In December, The plaintiff in the original case sued the Department of Commerce and the U.S. Customs and Border Protection Agency for not collecting duties on Southeast Asian imports, claiming the Department of Commerce was not required to follow administration's executive order. The plaintiff has asked the U.S. Court of International Trade to end the tariff waiver and open up the opportunity for retroactive duties on modules imported from Southeast Asia. It is challenging to predict the timing and outcome of the current legal situation, but regardless of where it lands, customers have been preparing for the executive order to end in June, and they have worked hard to develop and implement more flexible and reliable solutions for modules. With that, I'll turn it over to Tim to review our results.