Q2 2024 Gibraltar Industries Inc Earnings Call

Greetings and welcome to the Gibraltar Industries second quarter 2024 financial results conference call. At this time, all participants are in a listen-only mode. A brief 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.

Operator: conference call. At this time, all participants are in a listen-only mode. A brief 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.

Operator: As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Carolyn Capaccio of LHA. Thank you, Carolyn. You may begin.

As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Carolyn Capaccio of LHA. Thank you, Carolyn. You may begin.

Carolyn M. Capaccio: Thank you very much. Good morning, everyone, and thank you for joining us today.

Carolyn M. Capaccio: 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 the slide presentation that management will use during the call, are both available in the investor section of the company's website, Gibraltar1.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.

Carolyn M. Capaccio: 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 investor section of the company's website, GibraltarOne.com.

Speaker Change: 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.

Carolyn M. Capaccio: Further, please note that adjusted results exclude the net sales and operating results of the Japan Renewables business that was sold on December 1, 2023. 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 future performance, and the company's actual results may differ materially from the anticipated events, performance, or results expressed through a slide by these forward-looking statements. Gibraltar advises you to read the risk factor in detail in its SEC filings, which can also be accessed through the company's website.

Speaker Change: These statements are not guaranteed the 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.

Carolyn M. Capaccio: Now I'll turn the call over to Bill Bosway. Bill?

William T. Bosway: Thanks Carolyn, good morning everyone, and thank you for joining today's call. I'll start with an overview of the second quarter results, and then Tim and I will take you through each of the segments, and we'll give you a financial and operating update and a closer look at what's happening now in each. Then I'll walk you through our 2024 outlook, and we'll open the call for questions. So, let's turn to slide three, titled Second Quarter 2024 Review.

Speaker Change: Thanks Carolyn. Good morning everyone and thank you for joining today's call. I'll start with an overview of second quarter results and then Tim and I will take you through

Speaker Change: Each of the segments, and we'll give you a financial and operating update and a closer look at what's happening now in each. Then I'll walk you through our 2024 outlook, and we'll open the call for questions. So let's turn to slide three, titled Second Quarter 2024 Review.

William T. Bosway: Our adjusted net sales were down 2 percent, driven mainly by market headwinds impacting growth in our residential and renewables businesses in the quarter. The residential market experienced a slower end market and an unexpected channel of destocking, which started really late in May and early June. We offset some of this impact through some participation gains, and these gains are actually going to support us in our residential growth plan in the second half. Although adjusted net sales for renewables were up over 8% versus the prior year, this was less than expected as some customers continued to have project delays related to ongoing trade and regulatory issues in the market.

Speaker Change: Our adjusted net sales were down 2% driven mainly by market headwinds impacting growth in our residential and renewables businesses in the quarter.

Speaker Change: Although adjusted net sales for renewables were up over 8% versus prior year, it was less than expected as some customers continued to have project delays related to ongoing trade and regulatory issues in the market.

William T. Bosway: Backlog for the quarter was down 4%, impacted mainly by the timing of project bookings and renewable energy, and a challenging year-over-year comparison related to a large infrastructure project signed in early February that was completed in the quarter. However, infrastructure bookings improved during the quarter, and backlog was up 3% sequentially, and our design and quoting activity remains very strong as well. Our ag tech booking surpassed $90 million in the quarter, driving backlog up 32%, and this supports strong revenue growth in the second half.

Speaker Change: Backlog for the quarter was down four percent impacted mainly by the timing of project bookings and renewables and a challenging year-over-year comparison related to a large infrastructure project signed in early 23 that was completed in the quarter.

William T. Bosway: We increased adjusted net income 2.8% and adjusted EPS 2.6% while generating $36 million in operating cash. We continue to work toward achieving growth for the year in all four segments, as well as drive additional 80-20 and productivity initiatives, continue to execute our digital transformation plan, and strengthen the organization. Tim?

Speaker Change: We increased adjusted net income 2.8% and adjusted EPS 2.6% while generating $36 million in operating cash flow.

Speaker Change: We continue to work toward achieving growth for the year in all four segments, as well as drive additional 80-20 and productivity initiatives.

Speaker Change: continue to execute our digital transformation plan and strengthen the organization.

Timothy F. Murphy: Thanks, Bill, and good morning, everyone. Let's start with the residential on slide four. Residential segment sales decreased 6.1% from last year, driven by a slowing market and Channel D stocking that began in the second half of the quarter. However, these factors were partially offset by participation gains with new and existing customers. Growth and Ventilation Product Line, and expansion initiatives in the Rocky Mountain region. A recent acquisition in that region added about 1% to second quarter sales, and suggested operating an EBITDA margin of 20.3 and 21.7, respectively, expanded 100 and 120 basis points through solid execution.

Speaker Change: Now let's dig into the segments. Tim?

Tim: Let's start with the residential on slide 4.

Tim: Residential segment sales decreased 6.1 percent from last year driven by a slowing market and Channel D stocking that began in the second half of the quarter.

Tim: These factors were partially offset by participation gains with new and existing customers, growth in ventilation product lines.

Speaker Change: and expansion initiatives in the Rocky Mountain region.

Speaker Change: adjusted operating EBITDA margin of 20.3 and 21.7 respectively, expanded 100 and 120 basis points through solid execution, 80-20 initiatives, and effective price cost management.

Timothy F. Murphy: 8020 Initiatives and Effective Price Cost Management, and the Iraqi Mountain Region Acquisition is performing to plan. We continue to expect modest revenue growth with continued margin improvement in the second half of the year as the conversion of recent geographic and market participation gains ramps further, contributing to the top line and as continued 80-20 improvement in operating efficiencies and the expected improved volumes drive profitability.

Speaker Change: and Iraqi Mountain Region Acquisition is performing to plan.

Speaker Change: and the expected improved volumes drive profitability.

Timothy F. Murphy: So let's turn to slide five, and I'm going to talk a little bit more about the residential market as well as our market expansion initiatives we discussed in our last call. Let's start with Dan Markey.

Speaker Change: So let's turn to slide 5 and I'm going to talk a little bit more about the residential market as well as our market expansion initiatives we discussed in our last call.

Timothy F. Murphy: The market did slow more during the quarter, which is reflected in lower point-of-sale results down approximately 10% in both retail and distribution channels. Point-of-sale results can vary significantly by region, by market, customer, and channel, but in general, we saw a reduction versus Q1 for the overall market. As well, the point of sale results correlated with the Q2 shingle shipment market data published by ARMA, which reflected the market being down almost 10%.

Speaker Change: Point-of-sale results can vary significantly by region, by market, customer, and channel, but in general, we saw a reduction versus Q1 for the overall market.

Speaker Change: As well, the point-of-sale results correlated with the Q2 shingle shipment market data published by ARMA, which reflected the market being down almost 10%.

Timothy F. Murphy: As well, starting in late May and really throughout June, we experienced channel destocking in both retail and distribution channels with inventory reductions of up to three weeks, which reduced channel inventory from about 12 weeks to nine weeks, depending on the region, the market area, and the customer. We did see some restocking occur at the beginning of July, which I suspect was in response to a bit of an overcorrection during Q2.

Timothy F. Murphy: We were able to partially offset the full impact of the slow market through participation gains and customer conversions, which resulted in our business being down less than the market. These wins and others starting in the second half should also help us continue to outpace the overall market going forward. On the right side of the chart, our geographic expansion initiatives continue to move forward. And, as a reminder, we are serving only 40% of the top 32 markets in the U.S. Increasing our participation in these markets is important to us, and we have identified our next eight markets, with at least three of those locations planned to be up and running in the next two to three quarters.

Speaker Change: We're able to partially offset the full impact of a slow market through participation gains and customer conversions, which resulted in our business being down less than market.

Speaker Change: These wins and others starting in the second half should also help us continue to outpace the overall market going forward.

Speaker Change: On the right side of the chart, our geographic expansion initiatives continue to move forward. And as a reminder, we are serving only 40% of the top 32 markets in the U.S.

Speaker Change: Increasing our participation in these markets is important to us and we have identified our next eight markets with at least three of those locations planned to be up and running in the next two to three quarters.

Timothy F. Murphy: There are plenty of additional markets beyond the 32 we are currently addressing as well. And, as I have said previously, we will execute our plan through both organic investment and acquisition. So with that, let's move to renewables.

Speaker Change: There are plenty of additional markets beyond the 32 we are currently addressing as well. And as I have said previously, we will execute our plan through both organic investment and acquisitions.

Timothy F. Murphy: Tim? Let's turn to slide 6. (inaudible)

Tim: So with that, let's move to renewables. Tim?

Timothy F. Murphy: Let's turn to slide six. Adjusted net sales increased 8.2% from last year and 54% from last quarter, driven by strong demand from new and existing customers for the new 1P tracker product. Despite solid growth in the quarter, our revenue and bookings were lower than expected as some customers continued to experience trade and regulatory issues disrupting the timing of the signing of their contracts and or locking in their schedules. As a result, second quarter backlog was down 10%, while the pipeline of late-stage and early-stage projects remains positive.

Tim: Let's turn to slide six.

Tim: Adjusted net sales increased 8.2% from last year and 54% from last quarter, driven by strong demand from new and existing customers for the new 1P tracker product.

Tim: Despite solid growth in the quarter, our revenue and bookings were lower than expected as some customers continue to experience trade and regulatory issues disrupting the timing of signing of their contracts and or locking in their schedules.

Tim: As a result, second quarter backlog was down 10% while the pipeline of late stage and early stage projects remains positive.

Timothy F. Murphy: Adjusted operating EBITDA margins decreased 270 and 290 basis points, respectively, driven by a mid-shift to our new 1P tracker product and the related new product ramped learning curve. Our supply chain and engineering teams are making progress in satisfying this accelerated demand. We expect segment net sales to increase for the full year, with sequential improvement in 3Q profitability as the 1P Tracker supply chain continues to mature and the field installation process becomes more efficient.

Tim: Adjusted operating EBITDA margins decreased 270 and 290 basis points respectively, driven by a makeshift to our new 1P tracker product and the related new product ramp learning curve.

Tim: Our supply chain and engineering teams are making progress in satisfying this accelerated demand.

Tim: We expect segment net sales to increase for the full year with sequential improvement in 3Q profitability as 1P Tracker supply chain continues to mature and the field installation process becomes more efficient.

Timothy F. Murphy: Let's move to slide seven for a quick update on our 1P tracker. Since the fourth quarter of 2023, we have booked over 300 megawatts across 58 projects with 15 different customers. We booked about 70 megawatts across 13 projects in this last quarter. We're pleased with the ongoing uptake of our 1P technology and our laser focus on executing a controlled launch of new projects we have signed. At the same time, new and existing customers are inviting us to pursue a pipeline of over 1.2 gigawatts in the U.S. distributed generation solar market. The photos on this slide show two 1P TerraTrac projects we recently completed. The one on the top right of the page is Wedge Farm, and the one on the bottom is Alice Hill. Bill?

Tim: Let's move to slide 7 for a quick update on our 1P tracker. Since the fourth quarter of 2023, we've booked over 300 megawatts across 58 projects with 15 different customers. We booked about 70 megawatts across 13 projects in this last quarter.

Tim: At the same time, new and existing customers are inviting us to pursue a pipeline of over 1.2 gigawatts in the U.S. distributed generation solar market.

Tim: The photos on this slide show two 1P TerraTrac projects we recently completed. The one on the top right of the page is the Wedge Farm and the one on the bottom is Alice Hill.

Operator: Bill, is your line on mute?

Tim: [inaudible]

Tim: Bill, is your line on mute?

William T. Bosway: Oh, I apologize. So, let's start again. Sorry.

Bill: I'm sorry, can you hear me?

William T. Bosway: As referenced above, the industry continues to work through a variety of trade and regulatory challenges, and since our last earnings call, I wanted to highlight some of the changes and or movement for them, which are highlighted in the dotted line boxes on the slide. Let's start with the first three items, which are related to module supply. First, the presidential proclamation waiving tariffs while the Department of Commerce investigated the first AVCVD complaint expired on June 6, 2024.

Bill: Yes, we can hear you now.

Speaker Change: Oh, I apologize.

Speaker Change: So let's start again. Sorry, I was referencing the industry continues to work through a variety of trade and regulatory challenges and since our last earnings call, I wanted to highlight some of the changes and or movement to for them which are highlighted on the dotted line boxes on the slide.

Tim: Let's start with the first three items which are related to module supply. First, the presidential proclamation weighting tariffs while the Department of Commerce investigated the first AVCVD complaint expired on June 6, 2024.

William T. Bosway: So for modules imported without an exemption from the manufacturers that were under investigation during the proclamation period, customers have until December 2024 to install these modules in service, or anti-dumping duties of 240% and countervailing duties of 15% can be applied to projects. Secondly... A second AD-CBD complaint was filed with the U.S. International Trade Commission and the Department of Commerce on April 24, alleging illegal trade practices by Cambodia, Malaysia, Thailand, and Vietnam and asking both government agencies to apply new tariffs, both anti-dumping and countervailing duties, to imported solar cells and modules imported from these countries.

Tim: So, for modules imported without an exemption from the manufacturers that were under investigation during the proclamation period.

Tim: Customers have until December 2024 to install these modules in service, or anti-dumping duties of 240% and countervailing duties of 15% can be applied to projects.

Tim: Secondly,

Tim: A second A.D. CBD complaint was filed with the U.S. International Trade Commission and the Department of Commerce on April 24th.

William T. Bosway: The ITC launched a preliminary investigation on April 24th, and the DOC initiated an investigation on May 14th. Given the complexity of the case, the DOC is expected to issue a preliminary determination for the countervailing duty complaint by September 23rd and for the anti-dumping complaint by November 20th. Final determinations for both aspects of the complaint are expected by April 4, 2025. And third, on June 26, the Section 201 bifacial exemption was removed for bifacial solar panels.

Tim: alleging illegal trade practices by Cambodia, Malaysia, Thailand, and Vietnam and is asking both government agencies to apply new tariffs, both anti-dumping and countervailing duties, to imported solar cells and modules imported from these countries.

Tim: The ITC launched a preliminary investigation on April 24th, and the DOC initiated an investigation on May 14th.

Tim: Given the complexity of the case, the DOC is expected to issue a preliminary determination for the countervailing duty complaint by September 23rd and for the anti-dumping complaint by November 20th.

Tim: Final determinations for both aspects of the complaint are expected by April 4th, 2025.

Tim: And third, on June 26, the Section 201 bifacial exemption was removed for bifacial solar panels. These are panels which have solar cells on both sides and can significantly improve energy production efficiency.

William T. Bosway: These are panels that have solar cells on both sides and can significantly improve energy production efficiency. The industry has been given a 90-day grace period before the tariff takes effect, and to avoid a tariff, customers must be able to verify that their contracts were signed on or before May 17, 2024, and these panels must be delivered by September 24, 2021. Lastly, with respect to the 10% domestic content bonus, in May, in an effort to avoid forcing commercial taxpayers to disclose their direct costs, the IRS created a new elective safe harbor.

Tim: The industry has been given a 90-day grace period before the tariff takes effect, and to avoid a tariff, customers must be able to verify their contracts were signed on or before May 17, 2024.

Tim: and these panels must be delivered by September 24th, 2024.

Tim: Lastly, with respect to the 10% domestic content bonus in May, in an effort to avoid forcing commercial taxpayers to disclose their direct costs, the IRS created a new elective safe harbor.

William T. Bosway: This allows manufacturers to determine a project's domestic content percentage based on additive fixed percentages for specifically identified U.S. manufactured components or subcomponents. This avoids developers and sponsors of energy projects having to track down all manufacturers' costs and helps manufacturers avoid having to share confidential cost information for their business. This is a positive development for the industry, and we anticipate final guidelines from Treasury to be issued for the end of the year. So let's move on to IT, Tim.

Tim: This allows manufacturers to determine a project's domestic content percentage based on additive fixed percentages for specifically identified U.S. manufactured components or subcomponents.

Tim: This avoids developers and sponsors of energy projects having to track down all manufacturers' costs and helps manufacturers avoid having to share confidential cost information for their business.

Speaker Change: This is a positive development for the industry and we anticipate final guidelines from Treasury to be issued before the end of the year.

Timothy F. Murphy: Moving to slide 9, ITech suggested a net sales increase. 0.6%, but it's lower than we expected as new projects started later than planned in the quarter. In June, sales were up over 30% from May sales, so it was just a leader in the quarter. Second quarter backlog increased 32 percent over last year and 95 percent for the last quarter as new bookings materialized as planned. We remain very active with additional projects and expect positive booking momentum to continue into the second half of the year.

Tim: So let's move on to ITAC. Tim?

Tim: Moving to slide 9.

Tim: I've had suggested net sales increased 0.6 percent but were lower than we expected as new projects started later than planned in the quarter.

Speaker Change: In June , sales were up over 30% from May sales, so it was just a leader in the quarter ramp.

Speaker Change: Second quarter backlog increased 32% over last year and 95% for the last quarter as new bookings materialized as planned.

Tim: We remain very active with additional projects and expect positive booking momentum to continue into the second half.

Timothy F. Murphy: Segmented adjusted operating income declined roughly $1 million, impacted by lower volumes in April and May and business and product lines. This is partially offset by strong execution, particularly on produce projects, and we expect to deliver improved margin performance on stronger growth in the second half.

Tim: Segment adjusted operating income declined roughly 1 million dollars, impacted by lower volumes in April and May, and business and product line mix. This is partially offset by strong execution, particularly on produce projects, and we expect to deliver improved margin performance on stronger growth in the second half of the year.

William T. Bosway: Bill?

William T. Bosway: So on slide 10, let's move to slide 10. We are pleased that our ag tech business is beginning to accelerate and grow as we expand our customer base and really help the industry add capacity to bring locally grown, high quality, fresh fruits and vegetables to end consumers, provided by both food retailers and food service operators. Our business momentum is robust, with revenue and bookings accelerating month to month during Q2. We secured over $90 million in new orders during the quarter, which is a record for the business.

Tim: Bill?

Bill: So on slide 10, let's move to slide 10, we are pleased that our ag tech business is beginning to accelerate and grow as we expand our customer base.

Bill: and really help the industry add capacity to bring.

Speaker Change: locally grown, high-quality, fresh fruits and vegetables to end consumers provided by both food retailers and food service operators.

Speaker Change: Our business momentum is robust, with revenue and bookings accelerating month to month during Q2. We secured over 90 million in new orders during the quarter, which is a record for the business. Most of these projects started in June and are launching now.

William T. Bosway: Most of these projects started in June and are now launching now, which supports our second half outlook. As well, we have a number of additional projects currently in the design phase expected to support continued strength in bookings. We look for our ag-tech business to deliver both revenue and margin growth in 2024, given our demand momentum and broadened customer base and our healthy pipeline of new projects under development. Let's now move on to our infrastructure.

Tim: which supports our second half outlook. As well, we have a number of additional projects currently in the design phase expected to support and need continued strength in bookings.

Timothy F. Murphy: Let's move to slide 11. The infrastructure segment sales increased 2.5%, reflecting timing of projects, continued strong execution, and market participation. Backlog decreased 12% as a very large project book last year reached its final stages. However, bookings increased 3% sequentially, reflecting strong customer activity, design work, and quoting activity remain strong. Segment Adjusted Operating and EBITDA margins improved 170 basis points, respectively, driven by price-cost alignment, solid execution, 80-20 productivity, and improving product. We continue to expect sales growth and margin expansion in 2024.

Tim: Backlog Decrease 12% is a very large project but last year reached its final stages.

Tim: Bookings increased 3% sequentially, reflecting strong customer activity. Design work and quoting activity remain strong.

Timothy F. Murphy: Let's move to slide 12 to discuss our balance sheet and cash flow. On June 30th, we had cash on hand of $179 million, and $395 million was available on our revolver. During the quarter, we generated $36 million in cash from operations, through a strong contribution from operating income and a more modest than average seasonal investment of $7 million in working capital. Our free cash flow generation for the quarter was 9.1% of sales, and our objective for free cash flow of approximately 10% for the year is on... There were no share repurchases in the quarter, and we remain debt-free.

Tim: through a strong contribution from operating income and a more modest than average seasonal investment of $7 million in working capital.

Timothy F. Murphy: We expect to continue to generate strong cash flow, and our capital allocation priorities for 2024 are to continue to invest in our organic growth and operating systems for scale. We expect capital expenditures between 1% and 2% of sales. Our pipeline of high-quality M&A opportunities is active. We have many discussions in progress, and our strong balance sheet provides flexibility. We think there's a higher probability in the near-term in the residential segment and in the medium and long-term in other segments.

Timothy F. Murphy: And finally, we'll opportunistically return value to shareholders through the remaining $89 million authorized under our Share Repurchase Program, funded by cash generated from operations and the use of our revolver, depending on the timing of any M&A or repurchase. Now, I'll turn the call back to Bill.

Tim: funded by cash generated from operations and the use of our revolver depending on the timing of any M&A or repurchases.

William T. Bosway: Thanks Tim. Now, let's turn to slide 13. We'll talk a little bit about our priorities for 2024, which really remain unchanged. Our three pillars are foundational for what we do, and our playbook is consistent. In regards to recent market movements, we remain very focused on those five initiatives. So, just as a reminder, number one, continue to look to drive growth, quality of earnings, cash performance, and focus on M&A. Secondly, execute our 80-20 initiatives, expanding our participation, and expanding margins. Third, continue to digitally transform to scale and optimize our operating systems. Fourth, strengthen the organization. And fifth, as important as anything, conducting business in the right way every day.

Speaker Change: which really remain unchanged. Our three pillars are foundational for what we do, and our playbook is consistent. In regards to recent market movements, we remain very focused on those five initiatives.

Speaker Change: So just as a reminder, number one, continue to look to drive growth, quality of earnings, cash performance, and focus on M&A. Secondly, execute our 80-20 initiatives, expanding our participation, and expanding margin.

Speaker Change: Three, continue to digitally transform to scale and optimize our operating systems. Four, strengthen organization. And fifth, as important as anything, conducting business in the right way every day.

William T. Bosway: Let's turn to slide 14, and we'll talk about 2024 guidance. We are making a slight adjustment to revenue and profitability measures while maintaining our outlook for EPS and delivering full year sales growth and significant profitability improvement. We look for participation gains and operational improvements to support solid second half and full year margin expansion and cash flow generation. Consolidated net sales are now expected to range between $1.38 billion and $1.42 billion compared to $1.36 billion on an adjusted basis in 2023, representing 2-4% growth.

Speaker Change: We are making a slight adjustment to revenue and profitability measures while maintaining our outlook for EPS and delivering full year sales growth and significant profitability improvement.

Speaker Change: We look for participation gains and operational improvements to support solid second half and full year margin expansion and cash flow generation.

Speaker Change: Consolidated net sales are now expected to range between 1.38 billion and 1.42 billion compared to 1.36 billion on an adjusted basis in 2023, representing 2 to 4 percent growth.

William T. Bosway: GAAP operating margin is expected to range between 11.8% and 12.1%, up between 90 and 120 basis points, and adjusted operating margin is expected to range between 13.3% and 13.6%, up between 60 and 90 basis points. Suggested EBITDA margin is expected to range between 15.9% and 16.2%, up between 50 and 80 basis points. EPS expectations are unchanged, with a gap between $4.04 and $4.29 compared to $3.59 in 2023, up between 12% and 20%, and adjusted between $4.57 and $4.82 compared to $4.09 in 2023, between 12 and 18%.

Speaker Change: GAP operating margin is expected to range between 11.8% and 12.1%, up between 90 and 120 basis points. And adjusted operating margin is expected to range between 13.3% and 13.6%, up between 60 and 90 basis points.

Speaker Change: Adjusted EBITDA margin is expected to range between 15.9% and 16.2% up between 50 and 80 basis points.

Speaker Change: EPS expectations are unchanged with gaps between $4.04 and $4.29 compared to $3.59 in 2023, up between 12 and 20 percent.

Speaker Change: and adjusted between $4.57 and $4.82 compared to $4.09 in 2023, between 12% and 18%. And we continue to expect 2024 free cash flow of approximately 10% of sales.

William T. Bosway: And we continue to expect 2024 free cash flow of approximately 10% of sales. So to summarize, our execution performance has been solid, and we feel good about our second half plan and four-year outlook. I also want to thank our team for their agility and responsiveness in each of the markets that we serve and their focus on delivering performance for our shareholders. And, as I said earlier, most importantly, doing it the right way. So now, let's open the call up, and we'll take your questions. Thank you. Well, now we can go to a question.

Speaker Change: So to summarize, our execution performance has been solid, and we feel good about our second half plan and four-year outlook.

Speaker Change: I also want to thank our team for their agility and responsiveness in each of the markets that we serve, and their focus on delivering performance for our shareholders. And as I said earlier, most importantly, doing it the right way. So now let's open the call up and we'll take your questions.

Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Speaker Change: A confirmation tone will indicate your line is in the question queue.

Operator: One moment, please, while we poll for questions. Thank you. Our first question is from Dan Moore with CJS Securities. Please proceed with your question.

Speaker Change: Thank you. Our first question is from Dan Moore with CJS Securities. Please proceed with your question.

Daniel Joseph Moore: Thank you, good morning Bill, good morning Tim. Let me start with the residential. It sounds like July you started to see a little bit of restocking, but has the destocking you saw in May and June, you know, do you think that's run its course, and what are your expectations for market growth, not necessarily Gibraltar growth, but market growth embedded in your, for the remainder of the year, embedded in the revised full year guidance?

Daniel Joseph Moore: Thank you. Good morning, Bill. Good morning, Tim. Let me start with residential. It sounds like

Daniel Joseph Moore: July you started to see a little bit of restock but has the destocking you saw in May and June

William T. Bosway: Yes, again, I think, you know, we believe we're going to grow this year and be residential for the year. It's, you know, it's difficult to predict exactly where the stocking destocking is landing, but we feel like it has settled in. And that's what we've assumed going forward in the second half. You know, Q1 off to a decent start. Q2 is a bit of a correction. If you look at, as I mentioned earlier, the point of sale and the ARMA data.

William T. Bosway: But you really need to let that flow out over some period of time because it really comes down to state by state and how well you're positioning each state to see the true impact of what that's going to mean for the market and how you're related and how you're positioned in each of those states and, therefore, the market. So, yeah, we've gone through that in, I think, great depth by state, and we've built an outlook for the year that we think is still positive year over year. And with the participation gains that we referenced and the ones that are in flight now, we feel pretty good about how the plan is rolling out for the second half.

Speaker Change: As I mentioned earlier, the point of sale and the ARMA data.

Speaker Change: But you really need to let that flow out over some period of time because it really comes down to state-by-state and how well you're positioning each state.

Speaker Change: by state, and we've built an outlook for the year that we think is still positive year-over-year. And with our participation gains that we referenced and the ones that are in flight now, we feel pretty good about how the plan is rolling up for the second half.

Daniel Joseph Moore: helpful, and then Shifting Gears, Renewables, certainly appreciate the update you give every quarter on kind of the market conditions. Obviously, there are a ton of crosscurrents. So, you know, what's the punchline? Do we still expect 2025 to be the year when revenue starts to ramp up, you know, meaningfully? Or is that more uncertain now in your view?

Speaker Change: helpful and then shifting gears renewables

William T. Bosway: Yeah, well, I think the slide that we showed will get less complex over time as some of these things come off the table. And so we've listed five things around module supply as an example.

Speaker Change: Yeah well I think the slide that we showed will get less complex over time as some of these things come off the table and so you know we've listed five things around module supply as an example.

William T. Bosway: Well, when you look at that slide and you say, well, UFLPA is number one on that slide, that's going to come off as the industry has gotten used to dealing with that, right? So it's really, I think, what you're going to find going forward is more around permitting and interconnectivity and transmission, which is still out there that people are dealing with. But as these A, B, C, B, D investigations kind of work their way through the system, what it's doing right now is just causing some people to pause, and it's chopping us, as we have seen. I think that's going to work itself out as we get through this last investigation.

Speaker Change: Well, when you look at that slide and you say, well, UFLPA is number one on that slide, that's going to come off as the industry has gotten used to dealing with that, right?

Speaker Change: So it's really, I think, what you're going to find going forward is more around permitting and interconnectivity and transmission, which is still out there that people are dealing with. But as these A.D., C.B.D. investigations kind of work through the system,

Speaker Change: What it's doing right now is just causing some people to pause, and it's chopping us as we have seen. I think that's going to work itself out as we get through this last investigation. Some of these things start coming off the table.

William T. Bosway: Some of these things start coming off the table. You know, the positive development on the IRA piece. If you look at the bottom of that chart, two of those three things are in place and up and running. And this domestic content bonus is getting close now that we have this new elective safe harbor that was put in place by the IRS. That's a big deal. So, if we can get that across the finish line, that goes off the chart. Those three things are easy to track and use as an industry.

Speaker Change: The positive development on the IRA piece, if you look at the bottom of that chart, two of those three things are in place and up and running in this domestic content bonus.

Speaker Change: as getting close now that we have this new elective safe harbor that was put in place.

Speaker Change: by the IRS. That's a big deal. So if we can get that across the finish line, that comes off the chart. Those three things are easy to track and use as an industry. So I think you'll see a narrowing of.

William T. Bosway: So, I think you'll see a narrowing of some of these items. The hope is that, over time. It doesn't mean there won't be some things in 2025, particularly around permitting and, as I said, interconnectivity and transmission, but we feel like it's.., you know, moving in the right direction, but in the interim, it's still causing, you know, probably 20% of our customers to have a little bit of a challenge with a specific project. So, hopefully, we'll see that start to.., That's how I will characterize it today.

Speaker Change: Some of these items, the hope is over time. That doesn't mean there won't be some things in 2025, particularly around permitting and, as I said, interconnectivity and transmission, but we feel like it's...

Speaker Change: You know, moving in the right direction, but in the interim, it's still causing, you know, probably 20% of our customers to have a little bit of a challenge with specific projects.

Daniel Joseph Moore: So, hopefully, we'll see that start to...

Daniel Joseph Moore: We minimize the second half a bit as we roll into next year.

Daniel Joseph Moore: And then lastly, and I'll jump back in queue, just talk about margins. So, you know, it still continues to be, obviously, kind of a tale of two cities.

Daniel Joseph Moore: That's how I characterize it today.

Daniel Joseph Moore: And then lastly for me, and I'll jump back.

Speaker Change: in queue. Just talk about margins. So, you know, still continues to be, obviously, kind of a tale of two cities. Resi performing extremely well in a tough environment, and renewables and ag tech still well below your longer-term goals.

William T. Bosway: Resi is performing extremely well in a tough environment, and renewables and ag tech are still well below your longer-term goals. So, what are the keys to generating, you know, consistent double-digit margins in those two segments? And, you know, it appears that that's likely embedded in your ability to maintain the EPS guide. So, just talk about how we get there and your confidence in that margin uplift in the back half of the year.

Speaker Change: So what are the keys to generating, you know, consistent double-digit margins in those two segments?

Speaker Change: And, you know, it appears that that's...

Speaker Change: What's likely embedded in your ability to maintain the EPS guide. So just talk about, you know, how do we get there and when your confidence

Daniel Joseph Moore: Yeah, the second half for AgTech is obviously driven around the bookings that we generate during the quarter, which have now started to materialize into sales and profitability. So you pick up that volume, and the quality of those projects, we feel they're going to contribute nicely in the second half to both the top and bottom lines. And, you know, sequentially, we believe renewables will obviously continue to improve. Ramping up the 1P tracker in a short period of time is what we're working through now and just getting suppliers from kind of a temporary tool to the permanent tool world and then, you know, getting these, [inaudible] improved margins. And, and you'll see Agtech do the same. And Agtech is really driven by the volume that is now in the business in a much bigger way than it was before.

Jeff Deere: and Jeff Deere. Thanks.

Speaker Change: Yeah, the second half for AgTech is obviously driven around the bookings that we generate during the quarter, which have now started to materialize into sales and profitability. So you pick up that volume and the quality of those projects, we feel they're going to contribute nicely in the second half to both top and bottom line.

Speaker Change: And, you know, sequentially, we believe renewables will obviously continue to improve, you know, ramping up the 1P tracker in a short period of time is what we're working through now and just getting suppliers from kind of temporary tool to permanent tool world and then, you know, getting these...

Daniel Joseph Moore: components into the field and getting our teams ramped up in a control launch. It just, you know, it takes a little bit time to do that and that's part of, you know, we're getting better and better at that in the second half. So sequentially I think you'll see renewables deliver.

Daniel Joseph Moore: improved margin and and you'll see Agtech do the same and Agtech's really driven by the volume that is now in the business in a much bigger way than it was before.

Operator: All right, I'll check back with any follow-ups. Thank you.

Speaker Change: All right, I'll check back with any follow-ups. Thank you.

Operator: Thank you. Our next question is from Julio Romero with Sidonian Company. Please proceed with your question.

Speaker Change: Thank you. Our next question is from Julio Romero with Sidonian Company. Please proceed with your question.

Julio Alberto Romero: Yes, hi, good morning. This is Alex on for Julio. Hey Alex, first question. Good morning.

Speaker Change: Yes, hi, good morning. This is Alex on for Julio.

Julio Alberto Romero: Yes, so, you know, very nice to see AgTech new bookings up significantly this quarter. I saw in the release that you noted strong support for revenue growth in the second half. Could you just walk us through the confidence you have around the timing of the ag textiles, you know, kind of ramping up in the near term in a meaningful way?

Speaker Change: Okay, Alex, first question.

Speaker Change: Hey, good morning.

Speaker Change: Yes, so, you know, very nice to see ag tech new bookings up significantly this quarter. I thought in the release, you know, you noted strong support for revenue growth in the second half.

Speaker Change: Could you just walk us through, you know, the confidence you have around the timing of the ag textiles, you know, kind of ramping up in the near term in a meaningful way?

William T. Bosway: Yeah, so, Alex, when you sign these projects, they tend not to be signed in the ag tech world until you have most, if not all, your ducks in a row, particularly around permits, because things like gas, water, et cetera, for the town or city that you're in are a big deal, because these are massive structures. So, usually, when you sign, it's close to go time on getting So, the projects that we have signed are already active.

Speaker Change: Yeah, so, Alex, when you sign these projects, they tend not to be signed in the ag tech world until you have most, if not all, your ducks in a row, particularly around permitting, because your things like gas, water.

Speaker Change: etc. for the you know town or city that you're in is a big deal because these are massive structures so usually when you sign it's it's close to go time on getting started so the projects that we have signed they're already active

William T. Bosway: They started becoming active in June, so you saw that impact with the business being up 30% over April and May, and that momentum will continue based on the actual projects that are in flight now. Now, we'll continue to add more projects, and that will help us build a backlog, not just for some portion of revenue that will come into this year, but it will start building up for next year as well. So that's that consistency that we're looking for, that cadence around the projects that we're bringing on board.

Speaker Change: They started becoming active in June , so you saw that impact with the business being up 30% over April , May, and that momentum will continue based on the actual...

Speaker Change: All of those projects are in flight now. We'll continue to add more projects, and that will help us build a backlog, not just for some portion of revenue that will come into this year, but it will start building up for next year as well. So that's that consistency that we're looking for, that cadence.

William T. Bosway: And if you look at $90 million that were signed in the quarter, and you were to annualize that, you'd say, well, that would roll out to $360 million, $270 million around there. They're not suggesting that we'll have $90 million every quarter, but as you get that cadence being built, they stack on top of each other, and they bring that revenue and profitability that comes with it in a much more predictable way.

Daniel Joseph Moore: around, you know, the projects that we're bringing on on PATH. And if you look at...

Speaker Change: You take, you know, $90 million that were signed in the quarter and you were to annualize that, you'd say, well, that would roll out to $360 million.

Daniel Joseph Moore: here, and $70 million around there. They're not suggesting that we'll have $90 million every quarter, but as you get that cadence being built, they stack on each other, and they bring that revenue and profitability that comes with it.

William T. Bosway: They tend to start pretty soon after you're signed. So we're active on a number of the projects that are in the $90 million, and that's why our confidence level, starting in Q3, is pretty strong for the second half.

Daniel Joseph Moore: in a much more predictable way. They tend to start pretty soon after you're assigned. So we're active on a number of the projects that are in the $90 million, and that's why our confidence level, starting in Q3, is pretty strong for the second half.

Julio Alberto Romero: Gotcha, great color on the cadence, thank you. And then one follow-up from us, you're still very strong with free cash flow in the quarter, and, you know, the cash on the balance sheet continues to build. So could you speak to plans, you know, to deploy some of that?

Speaker Change: Gotcha, great color on the cadence, thank you. And then one follow-up from us, you know, you're still very strong free cash flow in the quarter and you know the cash on the balance sheet continues to build, so could you speak to plans, you know, to deploy some of that?

William T. Bosway: Yeah, so right now, we are in a number of active discussions on an M&A front. Tim referenced that a bit, and I think you'll see there's probably more of that near-term focused on residential that we're involved in. It's not exclusive to residential, but, you know, our intent is to deploy an M&A. You know, we don't spend a lot, 1 to 2 percent to run the business, so that doesn't absorb a lot.

Tim: Yeah, so right now we are in a number of active discussions on an M&A front. Tim referenced that a bit. I think you'll see...

Speaker Change: There's probably more of that near-term focused in residential that we're involved in. It's not exclusive to residential.

Speaker Change: We don't spend a lot, 1-2% to run the business, so it doesn't absorb a lot.

William T. Bosway: We have, you know, a bit of a buyback. We still have $89 million of buyback approved in our plan, which we may move on as well. So, but really, our focus is, you know, moving forward with the M&A, and it's just a matter of, you know, timing on that front. It is more active in the market today than it was a year ago, not by our choice per se, but just in general, and so that's what has driven some of the activity that we're currently in the middle of. So I would expect to see us deploy more of that going forward. And the timing of that will depend on each individual case, right? It's a process between a buyer and a seller,

Speaker Change: We still have $89 million of buyback approved in our plan, which we may move on as well. But really our focus is moving forward with M&A, and it's just a matter of timing on that front. It is more active in the market today than it was a year ago.

Speaker Change: Not by our choice, per se, but just in general. And so that's what has driven some of the activity that we're currently in the middle of.

Speaker Change: So, I would expect to see us deploy more of that going forward, and the timing of that will depend on each individual case, right? It's a process between a buyer and a seller, and we'll see how that plays out.

William T. Bosway: You know, we'll see how that plays out. We're excited about the opportunities that exist and the ones that come up. We're in a great position to act pretty quickly.

Speaker Change: We're excited about what the opportunities are that exist and the ones that come up. We're in a great position to act pretty quickly.

Julio Alberto Romero: Great. Thank you. I appreciate the color there. That's all from us.

Speaker Change: Great. Thank you. Appreciate the color there. That's all from us.

Operator: Thank you. Our next question is from Walt Liptak with Seaport Research. Please proceed with your question.

Speaker Change: Thank you.

Speaker Change: Thank you. Our next question is from Walt Liptak with Seaport Research. Please proceed with your question.

Walter Scott Liptak: Hey, good morning, guys. Thanks for the answers so far. That's helpful.

Walter Scott Liptak: Hey, good morning guys. Thanks for the answers so far. That's helpful.

Walter Scott Liptak: I wonder if we could just try and quantify a couple of things, like in ag tech, can you help us understand how much revenue is going to ramp in the second half of the year, like how much of that $90 million ships?

Walter Scott Liptak: You know, I wonder if we could just try and quantify a couple of things like in ag tech. Can you help us understand how much revenue is going to ramp up in the second half of the year? Like, how much of that 90 million ships will be in the second half of the year versus 2025, and what could the revenue look like for the full year?

Speaker Change: in the second half of the year versus 2025 and you know what could the revenue look like you know for the full year?

William T. Bosway: Yeah, so, Walt, the way I think about it is you saw what June looked like relative to May, and so you're going to have a pretty big upshot relative to what we've seen in the first half. That's the way I characterize it, for the business. So, you know, the project's in hand, the project's active.

Speaker Change: Yeah, so, Walt, the way I think about it is you saw what June looked like relative to May, and so you're going to have a pretty big upshot relative to what we've seen in the first half is the way I characterize it.

Speaker Change: for the business. So, you know, the project's in hand, the project's active.

Walter Scott Liptak: You can do the math that way if you're thinking about modeling what the second half would look like. It's, you know, we sell June up 30%. And I think that's, you know, directionally the way I would think about the second half for this business based on the backlog that we now have.

Speaker Change: Yeah, you can do the math that way if you're thinking about modeling what the second half would look like. It's, you know, we sell June up 30%. And I think that's, that's, you know, directionally the way I would think about the second half for this business based on the backlog that we now have.

William T. Bosway: Okay, great. And then, you know, appreciate the prior question comment about profitability in ag tech. And, you know, but with these projects, sometimes there's a percentage of completion that you don't book profits until, you know, the thing's almost done. Then, you can talk about what the second half could look like on the flow through for profit.

Speaker Change: Okay great and then you know appreciate the prior question comment about profitability in ag tech and you know but with these projects sometimes there's percentage of completion that you don't book

Speaker Change: profits until you know the things almost done you know you can talk about what the second half could look like on the flow through for profits

Walter Scott Liptak: Yeah, no, I think we'll have a, you know, a nice improvement there as well. We, you know, we... Because it's a percentage of complete, as we're recognizing sales and recognizing profitability, hand-in-hand as we go. So there's not a lot of this that is recognized at the end of the project, both on the top and bottom line. They kind of go hand-in-hand as you go through the project. So again, as that volume starts to materialize in the second half, you should see an impact on both the top and bottom line accordingly.

Speaker Change: Yeah, I know. I think we'll have a nice improvement there as well.

Speaker Change: Because it's a percentage of complete, as we're recognizing sales, we're recognizing profitability.

Speaker Change: Hand in hand as we go, so there's not a lot of this that is recognized at the end of the project, both top and bottom line. They kind of go hand in hand as you go through the project.

Speaker Change: Again, as that volume starts to materialize in the second half, you should see an impact on both.

Speaker Change: top and bottom line accordingly.

William T. Bosway: Okay, great. Switching over to renewables, can you quantify for us the amount of orders that got pushed out due to the regulatory environment? You know, like, where the orders were down year over year, how much were they down?

Speaker Change: Okay, great.

Speaker Change: Switching over to renewables, can you quantify for us the amount of orders?

Speaker Change: that got pushed out due to the regulatory environment.

Speaker Change: You know like where the orders

Speaker Change: Down, year over year, how much were they down?

Walter Scott Liptak: Are you talking about the orders that were pushed? Yeah, exactly.

Speaker Change: You know, can we get some idea of the magnitude here?

Speaker Change: Are you talking about the orders that were pushed? Yeah, exactly.

William T. Bosway: Yeah, I would say about 20% of our business continues to be impacted. And think about that as, you know, we have, we serve over 200 different customers. So you've got a chunk of your customer base that's dealing with a variety of projects that are, you know, moving around, and, you know, that's been pretty consistent over the last year or two. But I would say that, you know, it's impacted about 20% of our orders, and that's part of the reason, or, you know, bookings, and therefore, orders, and that's part of the reason that we said, look, we were up 8.2%, we were up 54% sequentially, but we weren't up as much as we thought we would be or expected to be just because some of that movement got pushed.

Speaker Change: Yeah, I would say about 20% of our...

Speaker Change: Business continues to be impacted, and think about that as, you know, we have, we serve over 200 different customers, so you've got a

Speaker Change: a chunk of your customer base that's dealing with a variety of projects that are, you know, moving around.

Speaker Change: Yeah, that's been pretty consistent over the last...

Speaker Change: year or two, but I would say that, you know, it's impacted about 20% of our

Speaker Change: Our orders and that's part of the reason or you know bookings and and and therefore orders And that's part of the reason that we said look we were up eight point two percent We were up fifty four percent sequentially But we weren't up as much as we thought we as we wanted to be or expected to be just because of some of that Movement got pushed so

William T. Bosway: So, I mean, you could back into it if you kind of thought about it that way. We should have been up more if we hadn't had that kind of movement. But each quarter, it's a little different group of customers and a number of projects. But I would say 20% of the business has been impacted by the shifting around.

Speaker Change: I mean, I guess you could back into it if you had kind of thought about it that way. We should have been up more if we wouldn't have had that kind of movement.

Speaker Change: But, you know, each quarter it's a little different group of customers and a number of projects, but I would say 20% of the business has been impacted, shifting around, if that gives you an idea.

Walter Scott Liptak: Okay, and just so I understand the slide that you had up on renewable energy with the Regulatory. I think what I heard you saying is that this pause will remain in place probably until September of this year. Is that right?

Speaker Change: Okay, and just so I understand the slide that you had up on renewables with the...

Speaker Change: Regulatory. I think what I heard you saying is that this pause will remain in place probably until September of this year. Is that right? Well, or is it more than that?

William T. Bosway: There's a lot of moving parts, and the point of that is the module supply; it's just causing pauses right now depending on an individual's project situation, so you know, you can have a number of different examples here, but as an example, if you had panels in your [inaudible] from during the first AVCBD investigation, then you have until December to get those things installed, or they could be subjected So on the one hand, you've got a lot of folks who are trying to stay laser focused on existing projects to get these panels up onto their foundations and racking systems that either have been installed or maybe haven't been installed. But you have a deadline. Otherwise, you're going to be subject to some very large penalties, potentially.

William T. Bosway: There's a lot.

Speaker Change: There's a lot of moving parts and the point of that is on a module supply it's just causing pauses right now depending on an individual's project situation. So

Speaker Change: You know, you can have a number of different examples here, but as an example, if you had panels in your

Speaker Change: in your inventory. If you had panels that you had availability to and they were not brought in on an exemption,

Speaker Change: from during the first AV-CBD investigation.

Speaker Change: then you have until December ...

Speaker Change: to get those things installed, or they could be subjected to both AD and CBD penalties.

Speaker Change: So, on one hand, you've got a lot of folks who are trying to stay laser-focused on existing projects to get these panels up onto their foundations and racking systems that either have been installed or maybe haven't been installed, but you have a deadline.

William T. Bosway: So you've got customers laser-focused on that right now. They're saying, "Look, I need to get this done." And so what they're fighting through are things like, well, I've got to make sure I get all my permits right so I can actually get my panels on so I don't have these panels that. And so it is a bit of a multivariate equation for each project for a customer, depending on where their situation is going forward.

Speaker Change: Otherwise, you're going to be subject to some very large penalties, potentially. So you've got customers laser-focused on that right now. They're saying, look, I need to get this done. And so what they're fighting through are things like, well, I've got to make sure I get all my permitting right so I can actually get my panels on so I don't have these penalties.

Speaker Change: And so, it is a bit of a multivariate equation for each project for a customer depending on where their situation is going forward. And that's that 20% of the business that I think we have customers dealing with.

William T. Bosway: And that's that 20% of the business that I think we have customers dealing with. You know, 80% of the business, folks are kind of navigating through this. So, but for us, because our timelines are so short between when you sign a contract and you execute, something like this with immediate grace periods of 90 days or 120 days really changes the focus on projects that are in flight right now for customers versus what they are going to do next.

Speaker Change: You know, 80% of business folks are kind of navigating through this, but for us, because our timelines are so short between when you sign a contract and when you execute.

Speaker Change: something like this with immediate grace periods of 90 days or 120 days really changes focus on projects that are in flight right now for customers versus what are they going to do next so

William T. Bosway: So, you know, it's a little bit, it causes a little bit of anxiety right now for the industry, but it will work itself through once this, you know, I think this last or the second investigation finishes up and the IRA stuff clears the table. That gives people a little more clarity about what's going on. But yeah, we are seeing, I think the second half is still going to be a challenge in that. But we're going to grow sequentially in both top and bottom lines, and as we get through the next quarter, we'll see how this evolves as it relates to planning for 2025.

Speaker Change: You know, it's a...

Speaker Change: It's it's a little bit

Speaker Change: It causes a little anxiety right now for the industry, but it will work itself through once this, you know, I think this last

Speaker Change: where the second investigation finishes up and you know the IRA stuff clears off the table that gives people a little more clarity what's going on but yeah we are seeing I think the second half you know still going to be a challenge in that

Speaker Change: But we're going to grow, you know, sequentially in both top and bottom line and as we get through the next quarter, we'll see how, you know, this evolves as it relates to planning for 2025.

Walter Scott Liptak: Okay, great. And the sequential improvement that you're thinking about for next quarter, that's usually the third quarter is a seasonally stronger period, right? That's why. Yeah, third and fourth. But maybe not fourth.

Speaker Change: Okay, great. And the sequential improvement that you're thinking about for next quarter, that's usually the third quarter is a seasonally stronger period, right? That's why... Yeah, third and fourth. But maybe not for orders.

William T. Bosway: Correct. The third and fourth quarters are traditionally our strongest quarters for renewables. Yeah, we've got bookings now that are pretty solid relative to covering 2024 in terms of revenue. Again, because we have a relatively short timeline. So we still have the ability to take an order in the third quarter and execute that again in the fourth quarter. So we have good coverage for sales in the second half. We have a little bit more work to do there, but inherently, Q3 and Q4 are the biggest quarters for the business, and that's why, sequentially, you'll see a better second half and a better Q3 than Q2.

Speaker Change: Correct. Third and fourth quarter are traditionally our strongest quarters for renewables.

Walter Scott Liptak: Okay, but in terms of orders, it sounds like the third quarter and fourth quarter might still be weaker.

Speaker Change: Yeah, we've got bookings now that...

Speaker Change: are pretty solid relative to covering 2024 in terms of revenue. Again, because we have a relatively short timeline. So we still have the ability to take an order in the third quarter and execute that yet in the fourth quarter.

Speaker Change: We've got good coverage for sales in the second half, we've got a little bit more work to do there, but inherently Q3 and Q4 are the biggest quarters for the business and that's why sequentially you'll see a better second half and a better Q3 than Q2.

Speaker Change: Okay, but in terms of orders, it sounds like third quarter, fourth quarter might still be weaker.

William T. Bosway: Maybe not. You know, let's see.

Speaker Change: maybe not you know let's see again it's it's it comes down these individual projects and folks getting across the finish line so if you've got this 20% where people are having

Speaker Change: some success with what they're going to do and getting on with it, then, yeah, the focus can turn pretty quickly towards...

William T. Bosway: Again, it comes down to these individual projects and folks getting across the finish line. So if you've got this 20% where people are having some success with what they're going to do and getting on with it, then yeah, the focus can turn pretty quickly towards getting some of these other projects pulled up and across the finish line and contracted. So we have a lot of these projects in our late stage.

Speaker Change: getting some of these other projects pulled up and across the finish line and contracted.

Speaker Change: So we have a lot of these projects in our late stage, which we have a seven stage process, but we've got them in late stage, but

William T. Bosway: We have a seven-stage process, but we've got them in the late stage, you know that they're sitting there now until some summer customers are sitting in there until they work through the next 90 days on some of these things that they're dealing with.

Speaker Change: you know that they're they're sitting there now until they're, some of our customers are sitting in there until they work through the next 90 days on some of these things that they're they're dealing with.

Walter Scott Liptak: Okay, great. Okay, thanks much.

Speaker Change: Okay, great. Okay, thanks much.

Operator: Thank you. There are no further questions at this time. I'd like to hand the floor back over to Mr. Bill Bosway for any closing comments.

Speaker Change: Mm-hmm.

Speaker Change: Thank you. There are no further questions at this time. I'd like to hand the floor back over to Mr. Bill Bosway for any closing comments.

William T. Bosway: So again, I want to thank everyone for joining us today. We are planning to present at the Seaport Annual Summer Investor Conference as well as the September conference, and we've got a number of other investor events. So I want to thank you again for your ongoing support of us and Gibraltar, and I look forward to speaking to you again after our third quarter report. Have a good day.

Operator: This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

William T. Bosway: So again, I want to thank everyone for joining us today.

William T. Bosway: We are planning on to present at the Seaport Annual Summer Investor Conference as well as the September conference, and we've got a number of other investor events. So I want to thank you again for your ongoing support of us and Gibraltar and look forward to speaking to you again after our third quarter report.

Speaker Change: This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.