Gibraltar Industries, Inc.

Greetings and welcome to Gibraltar Industries first quarter 2025 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, please press star 1 on your telephone keypad. As a reminder, this conference call is being recorded. It is now my pleasure to introduce Carolyn Capaccio, of Alliance Advisors Investor Relations. Thank you. You may begin.

Thank you, Sherry. 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 Joe Lavecchio, Gibraltar's Chief Financial Officer. The earnings press release that was issued this morning, as well as the slide presentation that management will use during the call, are both available in the investor 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. Further, please note that adjusted results exclude the net sales and operating results of the residential electronic locker business, which was sold on December 17, 2024. 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 guaranteed the future performance, and the company's actual results may differ materially from the anticipated event, performance, or results expressed or implied by these forward-looking statements. Gibraltar advises you to read the risk factors details in its SEC filings, which can also be accessed through the company's website. Now I'll turn the call over to Bill Bosway. Bill?

Thanks Carolyn. Good morning everyone and thank you for joining today's call. We'll take you through our first quarter results and then we're going to review our current full year outlook and guidance, which remains unchanged from our previous guidance. Then we'll open the call for your questions. So let's turn to slide three for a review of the first quarter. We delivered a solid start to the year with each of our businesses executing close to plan and demand in our end markets remaining consistent with the expectations going into the quarter. Adjusted sales were flat while adjusted operating income and EBITDA improved 110 and 160 basis points, respectively. EPS improved 19% with solid margin performance in our residential ag tech and infrastructure businesses, which collectively offset specific challenges in our renewables business. We generated $14 million in operating cash flow and $2 million in free cash flow as we proactively invested in some pre-tariff inventory prior to our normal seasonal build. Our demand remains solid with new bookings for all our project-based businesses, ag tech, renewables, and infrastructure, each increasing during the quarter, resulting in a consolidated backlog being up 30%, $434 million, which is record level for Gibraltar. Year over year, ag tech bookings increased 226%, reflecting demand in both produce and structures markets. Infrastructure is up 11%, and renewables is up 3%. Renewables bookings and backlog were up sequentially, 90% and 30% respectively, which supports a solid second-half outlook for the business. In our residential business, participation gains awarded in 2024 across our building accessories product lines, trims, flashings, and ventilation are helping Gibraltar outpace in-market demand. With respect to portfolio management, the lane supply acquisition completed in February also delivered solid performance contributing to sales, margins, and backlog growth. Additionally, on March 31st, we completed two transactions that further expand our presence in the residential and light commercial metal roofing market. And we'll talk more about these in a moment. Collectively, in the first quarter, we invested and deployed $210 million to expand and build more presence in attractive end markets for both the ag tech and residential businesses. We've also continued to drive value through our stock repurchase program. To date, we have repurchased 91% of our current $200 million authorization. This week, our board of directors approved a new three-year $200 million program that we will execute opportunistically with available cash, and Joe will provide more details later in the call. Now let's switch gears and discuss the full year and our decision to reaffirm our outlook and guidance for earnings for 2025. I do think it's important we start with some recent learning, namely the business environment in 2021 and 2022, where everyone experienced incredibly high inflation across all input costs. There was also significant disruption to supply chain. Marcus may not remember, but during that time, the price of hot-rolled coil steel increased $50 per ton per week for effectively 50 straight weeks, eventually peaking at $2,200 per ton. That price today is approximately $900 per ton. So although the current situation is dynamic and presents some uncertainty, we have operated through a similar, if not more challenging environment not too long ago. That being said, last November, we began preliminary modeling and planning for potential tariffs of 20% to 30% and what they could mean for our markets, products, input cost, and or availability of materials. Although there remains uncertainty in today's economy, we have a relatively clear understanding of the potential impact from tariffs based on the amount and timing of tariffs announced to date. And we believe the impact to overall material cost will be approximately 5%, an amount we also believe we will manage and mitigate during the year. So in reaffirming our current guide, we have taken into consideration the status of five key business drivers. Number one, the impact of tariffs and the mitigating actions we have already taken or will deploy. Number two, our current order input rates across each business. Number three, current order backlog in each of our project-based businesses. Number four, we have reduced revenue expectations for renewables related to ongoing industry uncertainty unique to the solar industry. And number five, we have included incremental revenue and margin from our recent acquisitions. And we'll further discuss each of these drivers during today's call, and then I'll summarize again our thoughts at the end of our comments. So now let's dive into the business segments, and Joe will start with residential.