Greetings, and welcome to the Gibraltar Industries Fourth Quarter 2025 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Carolyn Capaccio of Alliance Advisors IR. Thank you. You may begin.

Thanks, Christine. 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 Lovechio, 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 Investors 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. 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 the second quarter 2025 results, the eBOS portion of which was subsequently sold on February 20, 2026. Adjusted results also exclude the net sales and operating results of the residential electronic business -- sorry, electronic locker business, which was sold on December 17, 2024. The acquisition of OmniMax International closed subsequent to quarter end 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 I'll turn the call over to Bill Bosway. Bill?

Thanks, Carolyn, and good morning, everyone, and thank you for joining us today. We have a lot to discuss today. First, we're going to take you through our fourth quarter results, which are in line with our previously announced range. And then we're going to spend quite a bit of time on the OmniMax acquisition, which closed on February 2, how we're actually executing our integration plan, our core assumptions that we have built into our 2026 plan, and then we'll take you through our 2026 guidance. I think you'll hear me say this more than once today, how excited we are about the acquisition as it really does accelerate our strategy to be a strong leader serving the building products market. In fact, with OmniMax, our Residential segment will represent over 80% of Gibraltar's total business in 2026. So the segment and hence, the acquisition played an important role in our 2026 guidance. So we'll get through that, and then we'll open up the call for questions and discussion. So let's get started with Slide 3, and we'll talk a little bit about 2025. Fourth quarter results were in line with our previously announced top and bottom line ranges. We delivered 17% adjusted net sales growth driven by our metal roofing and structured acquisitions, offset by a soft residential end market, significant channel inventory rightsizing and timing of price cost alignment actions in the building accessories business. Lower new construction starts impacted the mail and package business, and we had Agtech project volume shift into 2026. Consolidated bookings continue to be strong in the quarter with backlog up over 102% over prior year. We delivered operating -- I'm sorry, we delivered adjusted operating margin of 10.8% and EBITDA margin of 13.6%, resulting in adjusted EPS of $0.76. We generated $32 million in operating cash flow and free cash flow as a rate to sales of 9%. For the year, we delivered 12% adjusted growth to $1.14 billion, operating and EBITDA margins of 13.3% and 16.3%, respectively, resulting in adjusted EPS of $3.92. We generated $137 million of operating cash flow, ending with $116 million in cash for the full year and free cash flow of 8%. As I mentioned, we closed on the OmniMax International acquisition, and just last week, we completed the sale of Terrasmart's eBOS business for $70 million. The sale process of our renewables racking and foundations business is ongoing, and we anticipate completing the process in early Q2. Proceeds from both transactions will be applied to debt reduction. So for 2025, to summarize, it was a year of solid growth despite some persistent end market challenges, particularly in our residential market. We remain focused on evolving our portfolio with investments in metal roofing and building accessories as well as the recent divestiture of our renewables eBOS business. Now we'll go into each of the business segments, and Joe is going to start with Residential.

Thanks, Bill, and good morning, everyone. Let's start with Residential on Slide 4. Our adjusted net sales for our Residential segment increased by $15 million or 8.9%, driven by our metal roofing businesses, which were acquired last year and continue to perform well, driving overall segment growth. Total segment organic growth decreased 4%. Our buildings accessories business was down 2.7% in a soft market, coupled with channel inventory rightsizing. And the mail and package business was down driven by ongoing slowness in single and multifamily new construction starts. Turning to operating margins. Adjusted operating and EBITDA margins decreased 320 and 280 basis points, respectively, as we experienced cost deleveraging on lower volumes in building accessories, and mail and package as well as business and product mix, timing of price cost alignment actions as well as integration investments across the metal roofing businesses. So if you will, I just want to give a quick update on the U.S. roofing market on Slide 5. So if we can turn there. The residential market, including the roofing market was softer than expected for the entire second half of 2025, and we experienced a further downshift during the fourth quarter. General affordability, interest rate levels and I'd say the limited number of weather events relative to 2024 were the main headwinds during the year. And as a result, we saw a significant effort across our channels to further reduce inventory in the fourth quarter. To put things in perspective, our building accessories business posted 2.5% growth through the first 3 quarters of the year, but experienced down revenue of 2.7% in the fourth quarter. Although we're disappointed with our revenue in Q4, I believe we outperformed the market, whether measured against our shingle shipment data or retailer POS results. And as we move into…

So now we're going to turn our attention to talk about the integration of OmniMax and how it feeds into our 2026 guidance. So if we can go to Slide 10. I just want to have a quick recap of the rationale for the acquisition of OmniMax. I said earlier, we're excited to have OmniMax join us. If you think about it, it really helps further strengthen our leadership position in the building products market. And both us and OmniMax have really transformed our Residential businesses over the last 5 years, and our brands and our product lines and our footprints are very complementary. I think in being able to join forces today accelerates our building products strategy by at least 2 years. Fundamentally, as the leader in our market, I think we're in a much better position today to help shape the future of the industry rather than have someone else shape it for us. And there really were 4 key tenets around supporting the acquisition. Number one, OmniMax is a leading manufacturer of roofing accessories and rainware management products, and they have great contractor recognized brands and a very strong reputation for service and quality. OmniMax is strategically aligned with our core competencies and offers significant value creation with our residential business, and we'll talk about that a little bit later. It significantly enhances our scale in the Residential segment and helps us collectively deepen our presence with customers and channels as well as across a number of geographies. OmniMax also brings a complementary footprint and product offering, which I'll share in just a bit that puts us in a great position to serve more MSAs and also serve unique local, regional and national requirements. And finally, the combination creates an attractive financial profile with a lot of…

So let's move to Slide 17 to review financing for the OmniMax transaction. We entered into 2 new equal sized senior secured term loan facilities in an aggregate principal amount of $1.3 billion and a new upsized $500 million revolving credit facility and used the proceeds from the financing together with cash on hand to fund the acquisition and pay related transaction fees and expenses. We received ratings from the agencies of Ba3 and BB-, and our key covenants include a total net leverage ratio of 5.25x, which steps down to 4.25x over time and a minimum interest coverage ratio of 3:1, both of which we feel very comfortable with. This flexible debt structure also facilitates an efficient debt paydown. So then moving to Slide 18, I kind of want to go through our deleveraging road map here. So our priority and focus is to deleverage as quickly as possible. The drivers of our plan are shown on the left side of this slide. In year 1, we expect strong EBITDA margin percent and synergy realization. We are beginning to execute our working capital optimization opportunities and expect to start utilizing our cash tax benefits. We planned capital expenditures of 2% to 3% of sales, interest payments on our debt and special charges related to acquisition, transaction, integration and restructuring-related costs, with all of these assumptions driving our free cash flow guidance of approximately 8% of sales this year. Following the recent sale last week of our Renewables eBOS business for $70 million, we used those proceeds to pay down debt, and we expect to be below $1.1 billion of net debt at the end of the year. In year 2, we expect similar drivers, including the realization of additional synergies as well as interest payments at a lower amount…

So wrapping things up, just want to reiterate a few key takeaways from our discussion. Number one, first, we are conservative in our plan given the Residential will represent 80% of Gibraltar in 2026 and our assumption that the residential market will remain soft, particularly in the first quarter, maybe the first half. Q1 will be our lowest earnings quarter given our highest debt balance immediately post close and acquisition charges absorbed in the quarter. Q1 free cash flow will be limited, but given the lower earnings profile, our transaction closing expenses and the timing of working capital benefits, we do expect double-digit operating cash flow for the year as a percent of sales. I think fourth, integration is very organized and active with much accomplished in our first 24 days. The leadership team is in place. The IMO is up and running and the 20 IPTs are in full swing with leaders and sponsors. Five, we're ahead on synergies, $24 million of run rate synergies, 4 more than the original plan will be implemented with $15 million flowing through to EBITDA starting in Q2 and accelerating sequentially through Q4. And finally, we maintain a clear path to 2.5x leverage by the end of 2027. So a lot to take in there with the change in the business and the acquisition of OmniMax. But with that, let's open up the call for questions and discussion.

[Operator Instructions] Our first question comes from the line of Daniel Moore with CJS Securities.

So just to elaborate on the Residential outlook, softer in H1, some recovery in H2. Overall, you're expecting the market to be roughly flat, up a little. Just any details there? And how should we think about your ability to increase participation year 1 as you put these 2 businesses together?

Yes. Thanks, Dan. So yes, I'd say we came in -- we built a plan around the marketplace that is described as you said. I think volumes are going to be down a little bit in Q1 and Q2. And then there are some green shoots that are happening out there. It's been a little bit challenging in the first quarter. I had referenced this. We don't like to talk about weather as an excuse. So I'm not suggesting that. But we saw order patterns in the first 60 days swing wildly because of that snowstorm that blanketed such a large portion of the U.S. I think NOAA had said at one point that 25% or close -- between 25% and 30% of the roof tops in the U.S. were covered with snow. The point there isn't that we couldn't get people to work. The point there is contractors couldn't get on the roof. So we saw big swings with order entry in a 2-week or 3-week period. So it's been a little bit challenging to try to get a consistent demand cadence. But I would suggest that coming out of Q4, which is pretty big of a downshift, we think Q1 is also going to be a little bit soft, not because there's more inventory coming out. There's probably just less restocking going into the channel as we get closer to the start of the season, which, as you know, really starts in earnest in March. I think we'll get a better idea how things evolve in the next few weeks. But -- so we've been conservative with our assumption of how that volume is going to pick up as we get out of -- as we go through Q1 and into Q2. From a participation gains perspective, I…

Helpful. Joe, as it relates to the cadence, I really appreciate the color, adjusted earnings less than 20% in Q1. How are you thinking about kind of H1 versus H2 on that same metric this year relative to what would be a more normal or balanced year?

Yes. So you wouldn't see -- we wouldn't expect to see as much of that difference from Q1. We wouldn't expect to see as much of that difference in Q2, but some difference is probably the way I would characterize it, again, as we talked about kind of that softer market in H1. And so then you'll have basically the balance of that more in the second half, probably ramping up through Q3 and Q4 is probably the way to think about that.

Okay. And one more, I'll jump back in queue. But the decision to split the sale of Renewables, just how did you think about fair value for the eBOS business and perhaps more importantly, the remaining racking business, just by magnitude, obviously, a lot bigger, but lower margin. How should we think about kind of what fair value could look like for that piece?

Yes, Dan, let me start with -- people were asking us why we didn't close when we thought we originally closed. And part of the answer to that, which we, at the time, really couldn't talk much about openly is you have 2 different companies that are buying these pieces for different reasons. The strategic fits for them are different. And so that's kind of item number one. That's what delayed us getting this done for eBOS business where it is. So -- but I'd also say that eBOS is more oriented towards the utility space than our racking and foundations business, which is more [ DG ] space. And so margin profile of the eBOS business is pretty strong. And to your point, the racking business lower than that. And so as you think about as we've gone into Disc Ops and you can see over time, as we've tracked and taken writedowns quarterly, you'll get an idea of what the overall valuation of the 2 is. And as we get closer to closing the deal, we'll have a better feel for where we're going to land. But that's how I would think about this going forward.

Got it. And then just lastly, Joe, the free cash flow, 8% of sales, is that inclusive of the $50 million integration expense and any other kind of nonrecurring charges this year?

Yes.

Our next question comes from the line of Walt Liptak with Seaport Global.

Congratulations on the finding of or the extra synergies, the $24 million that's positive. I wonder if you could talk about that a little bit. And secondly, more kind of holistically, I think part of the confidence that a lot of investors have in the integration of these 2 businesses is the 80/20 process. So it was good that, that was front and center. And I'm wondering why -- or if or why you wouldn't bring that forward a little bit more because you had a comment in there that you're waiting until the fourth quarter to do the data analysis, but it sounds like you're doing some 80/20 now. Wouldn't 80/20 kind of starting as you want to proceed, make the integration less risky and maybe, frankly, a little bit more fun because of the simplicity and the disciplines around the 80/20 process?

Yes. Good point, Walt. So a, we do have 80/20 synergies in the plan and probably a little more than originally thought. My comment about the logistics -- the specific logistics work that we're embarking on -- it is going to be more 80/20 based, but it's going to take some time because what you have effectively is we need to go through and what we're learning now that we're -- the team -- the workstream is working on this. The first step is we need to harmonize around product and SKUs, which are being produced across 39 different locations. So getting that data, first and foremost, is the first step. But the harmonization of that is just not simply harmonizing the data. It's actually making some engineering changes. It's getting specs more commonized and a host of other things. That's the heavy lifting. It's going to take a little more time than originally planned for the logistics savings. So I think now we're just getting a better feel for what it means to get that done. It doesn't mean that the work is not in the flight. It just means the timing of the savings is coming later because of the magnitude of what we're realizing we need to be done. So it is fundamentally around the 80/20 backbone of how you get started, right. It's -- first and foremost, you got to gather the data. We're doing it across a much larger footprint with a lot of SKUs that we now then need to do some harmonization, get them on the same system. And once you do the harmonization, a lot of that's engineering work that has to be done. That makes it much easier for us to than to think about how to optimize shipping of each of these remaining SKUs, you're talking about a lot of them from 39 different locations across the country to all our customers. So I don't want to get an impression that we're not willing to pull it forward. Just it's a bigger squeeze to get the juice relative to the work that has to be done. Secondly, we found some other things, whether it be 80/20, SG&A, supply chain, et cetera, we put forward because we can get those done quicker as well. So there's only so much that capacity we have. We're trying to get as much as we can as quick as we can, but the foundational things are in play and those are the types of things that we're working to get specifically to the logistics synergy that we're pushing into 2027. So it's not an issue of wanting to do it earlier, but the timing of that is more related to as I described.

Okay. Makes sense. And just switching gears to that market outlook question that was asked just now. The -- because the different -- there are differences between OmniMax and the Gibraltar Residential businesses, are the sales growth rates similar between the 2 businesses? Or like are you expecting the same growth? Or is one expected to grow faster than the other, realizing that probably after this year or at some point this year, you're going to have a combined entity all on the same systems and all the same organization. But is there a difference either regionally or product or something that changes the sales growth trajectory for the business?

Well, I think in total, the way that we look at it, I mentioned earlier in the call that we now have the ability to see what's happening with order entry shipments and actual service delivery for every location now. And so that's a good first step. And my point there is we'll get a better idea of how the regional markets are evolving during the course of the year. But I wouldn't characterize a plan where one is growing faster than the other. We don't think of it that way now. I mean we're quickly moving to -- we have 39 locations blanketing the U.S. market and all these different MSAs. And so it comes down to every one of those regions, markets and MSAs and how we're doing in that. But it's not a Gibraltar versus OmniMax thing, if that makes any sense. We have so many complementary product lines, and we -- same with our footprint and so forth that we're kind of moving away from that thought process. Now we'll be able to say at the end of the year, this is what we did organically in both businesses? Sure. We can go back and do the math. But our combined teams don't think that way or not thinking that way going forward. It's about customers in any channel across any part of the U.S. and how we're driving our business with them and how do we utilize all our things at our disposal to make that happen. And we don't really care if it's a Gibraltar or OmniMax product or a facility or otherwise that's serving that customer. What you're going to see more of is customers being served from both. And it's going to get a little bit blurry over time. And that's what you want to have happen as you get into next year, in particular, in terms of how we serve customers and grow the business. So I don't think the businesses are going to grow at a different rate. I think that's more of a market question and how well we're positioned in each region where we're operating.

Okay. Great. And then the last one for me for Joe. I might have missed it, but did you have a debt ratio for what the first quarter, I guess, LTM debt ratio will be?

No, I didn't have that in there. But basically, as we closed on the eBOS sale, we used those proceeds to pay down the debt. So at that point in time, we were probably sitting -- if you take a TTM reported, we were probably sitting around 4.1.

[Operator Instructions] Our next question comes from the line of Julio Romero with Sidoti.

This is Justin on for Julio. So maybe starting on OmniMax, with the geographic overlap in the Pacific Northwest between legacy Gibraltar and OmniMax, is this a key area where you see commercial synergy opportunities?

Well, actually, Justin, we see it in a number of areas. But yes, that's one area. We also see it in the Northeast, and we see it in parts of Texas. And so Kurt Stinson, who runs the overall commercial group is -- and his team, which is frankly awesome, is going through that now. So what we thought going into prior to close is what could be the commercial synergies. We didn't talk a lot about them because it's one of those things once you get in it, we couldn't talk pre-close about customers. We couldn't talk about what we're doing specifically with any customers, et cetera. And now that we're opening that up and have an opportunity to do that, we're finding, I'd say, a number of product lines and geographies where we're going to be driving some of the cross-selling and commercial synergies. Frankly, I was pretty excited to see what the team has come up with the last 3 or 4 weeks and what they're already working on. But it's not in one location, I would say. I think it's more broad spread than that. I would tell you a little bit more detail about it, but I don't want to give our competition any insight as to what we may or may not be doing here in the relatively near term. But I think of it much broader than a particular region.

Great. And I appreciate all the color on the OmniMax integration. But maybe talking about that a little further, can you talk about the investments you've made on digitization and how they can help with accelerating the integration?

Yes. So again, another workstream that is in flight. So there's a couple of elements of this. One, if you recall, from the Gibraltar side, we were -- we've been finishing up our SAP implementations at the same time as OmniMax has brought folks on, they've been doing Oracle implementation. So think of that in a broad ERP kind of perspective. But being able to quickly stitch together data from both of these systems feeding in is where there's been some effort. And that was a reference I gave you earlier about -- it's refreshing to see after just 2 weeks, 2.5 weeks in, we can see our order intake, we can see our sales and we can see our plant performance, delivery performance for each of the 39 locations. So we're -- the team has listed a priority of where they'd like to stitch together things first, so we can actually run the business that much better. John and his team have a very laser focus on where we want to elevate our performance. When you go into these things, first and foremost, you assume everybody is operating perfectly. And that's just not the case. We both have opportunities to get better as individual businesses and collectively now getting that performance lift that I referenced earlier is a lot of what John and team are focused on now. Part of that is just getting some of that common data stitched together now so we can start having those discussions about how we improve service delivery, how our sales are flowing in, where Kurt and team are focusing on the next commercial opportunity and so on and so forth. So we'll -- our immediate focus is there. And then as we move into the year, you'll see a broader effort…

Our next question is a follow-up from Daniel Moore with CJS.

Yes. Just touching base on Agtech. I guess any color on the Arizona project? Obviously, you kind of took that out of backlog, number one. Number 2, what's the range of growth and margin profile embedded in your guide? And when would you expect to get back toward a more kind of longer-term mid-teens margin goals in that business?

Yes. So first, Dan, on the Arizona project, I think we've all been frustrated with the timing of the financing and the USDA loan guarantee for it and so forth. And so we just made a decision let's pull that out. Let's go replace it. Joe had mentioned, if you took out that of the backlog, the backlog was still up 43%. We didn't actually get the Arizona project until March. We -- if you kind of do the math, you'll see the backlog grew quite nicely without it. So effectively, we're replacing that with other things in the year. We'll be double-digit margin this year. We feel good about that. That's how we built the plan based on the projects we have in our CEA business to put things in perspective, every project we have right now is -- that's booked is in flight. And so it's kind of taken some of that variability out of the plan, if you will. And so -- and then on the traditional commercial side of the business, there's a tremendous amount of activity and projects coming through. So we expect a good year out of -- from the group. We said it would make sense to pull out Arizona. We'll replace that with other things. We've done a pretty good job of doing that as we've built the plan for this year. So -- and I think the margin profile will improve this year, and that's how we've built the plan as well. And we'll be double-digit margin in that business.

We have no further questions at this time. Mr. Bosway, I'd like to turn the floor back over to you for closing comments.

Yes. Thank you. Just to reiterate, this is a time where I know it's tough to understand the business because of the acquisition, the major transformation and trying to compare that to history and so forth. But we -- hopefully, people appreciate the transparency, understanding more of the assumptions, how the plan is built, and that helps you with modeling and having a better idea of where we're going. Super excited about the start of the last 2.5 weeks, really excited about the team that's in place, our leadership. And so looking forward to that. We are -- in March, we're going to be at the ROTH 38th Annual Conference, and we're also going to be participating in the Sidoti Small-Cap Conference. So pretty active in March. And we're really looking forward to updating you again at the end of the first quarter. So thanks again for joining us and as well as your support, and have a good rest of the week.

Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.