Transcript: Gibraltar Industries Q2 2026 Earnings Conference Call

Gibraltar Industries (NASDAQ: ROCK ) released second-quarter financial results and hosted an earnings call on Wednesday. Read the complete transcript below. APIs provide real-time access to earnings call transcripts and financial data. Visit to learn more.

6% increase in net sales to $510 million, driven by the full integration of Omnimax and organic growth of 5%. The company completed the divestiture of its renewables business and is focusing on the integration of Omnimax, with synergy initiatives expected to realize $17 million in 2026. 83 billion and adjusted EBITDA between $310 million and $326 million. The residential segment, comprising 83% of total revenue, showed strong performance with organic growth and improved EBITDA margins, despite a flat to down market.

The company secured a significant customer win, expanding its service to over 1,700 locations, emphasizing its strategic focus on local capability on a national level. Management highlighted ongoing challenges with inflation and geopolitical factors, but expressed confidence in their strategic initiatives, particularly in synergy capture and market penetration. Full Transcript OPERATOR Greetings, and welcome to the Gibraltar Industries Second Quarter 2026 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-0 on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Carolyn Capaccio of Alliance Advisors IR.

Please go ahead. Carolyn Capaccio, Alliance Advisors IR Thank you, 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 Joe Lovecchio, Gibraltar's Chief Financial Officer.

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 continuing operations exclude net sales and operating results of the renewables business, which was classified as held for sale and as a discontinued operation with second quarter 2025 results, the divestiture of which was subsequently completed on July 15, 2026.

The acquisition of Omnimax International closed on February 2, 2026. Also, as noted on Slide 2 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 also be accessed through the company's website.

Now we'll turn the call over to Bill Bosway. William T. Bosway — Chief Executive Officer Thanks, Carolyn. Good morning, everyone, and thank you for joining today's call.

We're going to review our second quarter results, which include our first full quarter of Omnimax operations. Then we'll review the reporting segments, the balance sheet, and our full year 2026 guidance, which we are reiterating today, and then we'll open the call for your questions. Let's start by turning to Slide 3, and we'll discuss the second quarter. It's been a very busy time for us, but we delivered solid second quarter results with our residential business delivering strong organic growth and participation gains in a flat to down market.

7% organically. 5%, showing the strength of this combination in the marketplace in line with our long-term strategic plan for our residential business, [which] continues to become a larger part of our overall portfolio and represented 83% of our total revenue in the quarter, with segment EBITDA margin improving 340 basis points sequentially to 19%. Omnimax integration continues to accelerate as our leadership team and Integration Management Office drive our top 11 critical work streams and synergy capture.

We are also excited to announce we were recently awarded an additional 630 locations, now making us the supplier of trims and flashings to sell to more than 1,700 locations across the country for one of our key customers, validating our ability to support our customers locally on a national basis with a value proposition that makes sense for them. We believe the combination of Gibraltar and Omnimax and our product portfolio was instrumental in receiving this award, and I give our team a lot of credit for staying focused on executing well while simultaneously managing through today's dynamic geopolitical situation as well as an ongoing inflationary environment.

6% to $510 million on total Gibraltar organic growth of 5%. 7%. 6 million. 15 per share, of Omnimax acquisition, integration, and restructuring cost.

3%. We generated $45 million in operating cash from continuing operations, including acquisition, integration, and restructuring costs related to Omnimax, and we have now completed the divestiture of the renewables business, including the eBOS sale in Q1 and the racking business sale in July. Now, let's turn our attention and we'll review the business segments, and Joe will start with Residential. Joe Lovecchio — Chief Financial Officer Thanks, Bill, and good morning, everyone.

Let's start with Residential on Slide 4. 9 million, which is up 85%, driven by the inclusion of a full quarter of Omnimax residential results of operations. Omnimax contributed $182 million. 5 million, and the residential segment organic growth was 5%.

5%, driven by price realization and participation gains in the Midwest, Northeast, and Texas, which helped to overcome a flat to down end market. Turning to margin, adjusted EBITDA margins accelerated sequentially 340 basis points to 19% as our executed price actions offset ongoing commodity and fuel inflation. On a year-over-year basis, adjusted EBITDA margin was down primarily due to price-cost alignment, business and product mix, and some inefficiencies with the integration. Our cost and commercial synergies through the Omnimax integration started contributing in Q2, and we expect those to continue to ramp going forward.

S. residential roofing market. I'd say overall market demand in the quarter versus prior year, based on the ARMA data for shingle shipments to distributors and retailers, was flat, but the story varied greatly by region, with positive growth in shipments to the Northeast, Midwest, and West, while shipments to the Southeast, South, Southwest, Florida, and Texas were down. 6%, with just two of the seven regions not experiencing growth, which would be the Southwest and Texas.

We do believe Q2 shipments were driven by restocking in the distributor channel and customers buying ahead of shingles manufacturer price increases. 7% year over year, with similar demand patterns across the regions. In the retail channel, volume remains soft, with point-of-sale results down anywhere between 8% to 10% in the quarter, as customers remain concerned about the ongoing geopolitical situation impacting consumer sentiment, interest rates, and overall affordability. POS for the first half were also down roughly 8% to 10% versus prior year.

So based on ARMA and POS data to date, we believe actual end market demand for the quarter and the first half was down mid-single digits and will probably remain so for the rest of the year. , we have more visibility to the market in total and by region, which provides a stronger foundation to build and execute more effective local and national growth initiatives with our customers, and despite today's slower market, we were able to generate positive organic growth in the quarter. 3%. 1% and sales to retailers were up 8%.

1%. Effectively, we were able to outperform the market in each region, and our strength in four of the five regions helped offset a slow market in the Southeast. We do believe that having more presence across the country does provide more levers to us in managing our business. We have the ability to better align with local and regional markets, which creates an opportunity to better optimize and align customer and revenue initiatives with end market demand situations.

Our playbook is going to remain similar going forward as we expect the market to remain slow given the ongoing headwinds I mentioned. We will continue to identify and execute participation opportunities to help us in the second half and going into 2027. And with that, let's turn to Slide 6 to talk about an exciting and big customer win for the team that happened here recently. So if you remember, one of the core tenets of our strategy with the addition of Omnimax is to find a way to simplify our customer supply chain and become the easy button for them while also reducing the cost of doing business with each other.

We believe we do this through great service and quality, local capability on a national basis, a harmonized and simplified product offering through 80/20 efforts for each region and location, optimizing our manufacturing and transportation logistics, and the ability to simplify and cost-reduce transactions with our customers. We have work to do in each of these initiatives, but we are having some initial success just 149 days into the integration of this business. Just recently we were awarded our first supply agreement where we will become the supplier of trims and flashings to more than 1,700 locations across the country for one of our key customers.

, and I will say we are grateful for this opportunity and appreciate the confidence our customer has in us to support them across the country. Our team did a fantastic job creating a value proposition that makes sense, which really focused on three things. First, finding the best way to support and assist our customers as they focus even more on the pro contractor while leveraging some of our local presence and experience with the distribution channel and contractor market.

Secondly, just really trying to solve the pain point of high freight minimum requirements through better logistics optimization across our national network, and third, creating an easy-button service capability while also focusing on lowering the cost of doing business. Now, we expect the business to start late in the fourth quarter as the transition of the incumbent happens accordingly. So I'd say overall, good start, but we are still in the very early innings of this type of effort and looking forward to doing more as we go forward. Now let's move to Slide 7 for an update on our integration efforts at the end of Q2.

As I mentioned earlier, just 149 days post the transaction close, the business continues to evolve from organization transition to capturing and driving more synergy opportunities. Tremendous team, is executing our 11 core work streams, which will continue throughout 2026 and into 2027. During the second quarter, we completed phase two of our organization optimization, and we'll continue with more initiatives as we further commonize operating systems and data flow across the business. Our focus going into the third quarter is driving additional performance lift with bringing service reliability to benchmark levels, and for us that's 95% plus on-time delivery.

It's making sure that we're operating in the most safe way possible and obviously driving a lot of our Lean and 80/20 initiatives, but also focusing on upgrading commercial excellence, expanding, and expanding margins. We are also starting 80/20 initiatives in two regions focused on product and SKU harmonization, operations optimization, and transaction reduction. These initiatives will begin late in Q4 and early next year. Let's now turn to slide 8, and I'll talk a little bit about our work streams, and I will touch on a few accomplishments for the team, and then we'll review progress on our cost and commercial savings.

The 11 work streams that are listed on the left side of the slide and the rest of the slide really provides a brief summary of some key wins to date. I mentioned we have implemented phase one and two of our organizational realignment, probably the most important initiative related to creating the right foundation for all our other initiatives. Today, about 65% to 70% of our targeted 2026 exit-rate organization savings has been implemented.

In general, the other 12 wins span across initiatives in production, supply chain, commercial team development, commercial participation gains, corporate synergies, and the beginning of 80/20 efforts we will continue to execute across the entire organization as we strengthen our foundation for the business. Now let's move to slide 9 for an update on the 2026 synergy savings targets and realization. So during the quarter we identified additional synergies to be implemented this year. 2 million annually, of which $600,000 will flow into this year.

And secondly, as mentioned earlier, we executed a large participation gain which will generate approximately $2 million in annual margin improvement, with $100,000 flowing into this year, and all that's based on timing. 4 million executed in 2026 with $17 million to be realized in 2026. As well, $7 million of synergy commitment has been realized to date, which will ramp further in Q3. Now let's move to Agtech.

7%, all of which was organic. This growth was driven by strength in structures and our commercial greenhouse applications. 2 million, but reflects a 34% decrease from last year with timing of projects in the second half compared to last year. We are seeing strong quoting activity across end markets, and demand at lane supply is strong.

And remember, our lane supply structures business, we have those orders turn much more quickly and are therefore of shorter duration. Adjusted operating margin and EBITDA margin improved 450 and 430 points year over year respectively, driven by stronger volumes, favorable business mix, and 80/20 operating initiatives. We are also excited to bring online our powder coating painting capability, which is expected to drive additional cost productivity for future controlled environment agriculture projects, particularly for berries and lettuce. Let's quickly move to Infrastructure on slide 11.

Segment sales decreased slightly due to the timing of projects. Our backlog grew 2%, and our quoting activity remains very strong. Segment adjusted operating and EBITDA margins were impacted by lower volume and product mix. Let's move to slide 12 to touch on our balance sheet and cash flow.

Gibraltar's policy with respect to cash allocation during the debt paydown period will be to keep a minimum amount of cash on hand, use the revolver as needed to fund seasonal needs, and pay down debt with excess cash flow. 8 million from discontinued operations. The discontinued operations cash use includes the payment of a settlement agreement regarding warranty claims.