Greetings, and welcome to the Gibraltar Industries Third Quarter 2025 Financial Results Conference Call. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Carolyn Capaccio of Alliance Advisors IR. You may begin.

Thanks, Kate. 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 a 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 second quarter 2025 results, and that adjusted results exclude net sales and operating results of the Residential Electronic Locker business, which was sold on December 17, 2024. 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?

Good morning, everyone, and thanks for joining our call today. We're going to take you through third quarter results, and then we'll review our guidance for continuing ops, and then we'll open the call for questions. So let's turn to Slide 3 titled Third Quarter 2025 Review. I'd say in a relatively dynamic business environment, we've continued to deliver solid performance and stay on track to deliver good revenue margin and cash flow performance from continuing ops for the full year. In the quarter, we delivered 13% adjusted net sales growth, first and foremost, with our Building Accessories business delivering 2% growth in a soft residential roofing market, which is down between 5% and 10% depending on the channel. And secondly, from our Acquired Metal Roofing and Structures businesses delivering revenue per their plan. That being said, the ongoing delay of a large CEA project in Arizona and lower demand in our Mail and Package business caused revenue for the third quarter to come in below plan. And we'll discuss each of these in more detail as we review the results for each of the segments. The impact of lower sales in Agtech and Mail and Package created a bit of a business and product mix effect during the quarter. And as a result, adjusted EPS and operating income came in slightly below prior year, down less than 1% and adjusted EBITDA was flat to prior year. We did deliver strong cash performance, generating $57 million in cash from operations, an increase of 39%, and $49 million in free cash flow, achieving 16% of sales. With respect to portfolio management, the sale process for our renewables business is progressing, and we continue to target its completion by year-end. And our newer acquisitions in structures and metal roofing are performing as planned and accelerating through their integration initiatives. And finally, our pipeline of potential additional M&A remains very active, particularly in the Building Products segment. So let's jump into the business segments, and Joe will get us started with Residential.

Thanks, Bill, and good morning, everyone. Let's start with Residential on Slide 4. Adjusted net sales for our Residential segment increased by $20.5 million or 9.8%, driven by our Metal Roofing businesses, which were acquired at the end of Q1, as well as growth in our Building Accessories business. We continue to gain participation in the U.S. residential roofing market as we grow with customers, expand in more local markets and benefit from new products recently introduced. We did experience lower demand in our Mail and Package business, specifically for our centralized mail solutions, which were down 8% in the quarter. Historically, given a centralized mail system is one of the last things installed in a multifamily property, we tend to see revenue materialize approximately 1 year after a new build has been started. So to put this in perspective, in 2024, starts for multifamily new construction were reported down over 35%, which resulted in less demand and revenue for us in 2025. Given our sales were down 8% in a market down over 35%, this demonstrates our team's ability to drive significant participation gains in challenging market conditions. Overall, Residential segment organic revenue was down 1%. Now turning to margins. Adjusted operating and EBITDA margins decreased 200 basis points and 130 basis points, respectively, driven by business and product mix and accelerating system, supply chain and customer integration initiatives across our Metal Roofing businesses. We also remain on track to complete business system conversions to a single system across the Residential segment by the end of 2026.

I thought we'd take a little time and talk about the U.S. roofing market. So let's turn to Slide 5 for an update. What you see on the left is data from ARMA. According to shingle shipments reported by ARMA, Q3 shipments were down 10% in the quarter and are down 5.4% year-to-date, as well the top 10 states for shingle shipments, which represent 54% of the total shipments in the U.S., were down 12.1% in Q3 and 3.3% year-to-date. Interestingly enough, Texas, the largest market for shingles, was down 25.2% in the quarter and 12.5% for the year. Another data point to think about is retailer point-of-sale results were also down in the quarter by approximately 4.5%. In general, there seem to be a few reasons driving the market today. First, we do see inventory rightsizing happening in both the wholesale and retail channels, which we expect to continue in Q4 and maybe into early Q1 2026. Secondly, I think weather events in 2024, like California rains and Texas hailstorms, etc., really haven't occurred at the same level of frequency in 2025, specifically in the third quarter. And third, labor availability may be becoming a challenge for general contractors operating in certain states like Texas, California, Arizona and Florida. So as the roofing market continues to be less active than we prefer, our Building Accessories team has found ways to outperform the market and deliver organic growth, which we did in the quarter, up 2%, and have done for the first 9 months of 2025, up 2.5%. Despite today's market situation, we still believe there is more opportunity to grow, and we will maintain our playbook going forward. Now I want to move to Slide 6, and I'll give you an update on our expansion initiatives that we executed in the quarter. First, we added capability in both Denver and Boise to support local retailers in these areas. And in an effort to provide better service and support for retailers in the Greater Salt Lake City area, we redeployed manufacturing capability from our other facilities to our Salt Lake City operation. In late July, we also acquired Gideon Steel supply, based in Oklahoma City. Gideon's last 12 months of revenue are about $10 million with EBITDA margins of approximately 20%, and Gideon is a leading provider of metal roofing systems and roofing accessories in the OKC market. So in 2025, we entered 9 MSAs through either organic or M&A investment, and we expect to expand further with additional operations coming soon in the Western region. So let's switch gears and let's move to Agtech.

So turning to Slide 7. Agtech net sales grew $16.1 million or 38.8%, driven by the acquisition of Lane Supply, which continues to see solid demand. The strength at Lane helped offset the impact of the delay of a larger CEA project, which we highlighted in our Q2 earnings call. Demand remains strong with bookings and backlog continuing to grow substantially. Adjusted operating margin decreased 440 basis points, driven by the lower volume in the quarter and the impact of accelerating integration activities for Lane Supply. Adjusted EBITDA margin decreased 280 basis points as it excludes the impact of higher amortization resulting from the acquisition of Lane and its related intangible assets.

So if we move to Slide 8, I want to give you an update on a couple of the CEA projects we shared with you in our Q2 earnings call, Houwelings Arizona, which we've already referenced once, and Pomas Farms. So on the left, let's start with the Houwelings project. Phase 1 of the project, the design, engineering work, has been completed and maintenance services continue to support existing growing operations and product shipments for retail customers. Phase 2 of the project, the retrofit portion of the project, remains on hold as the team awaits final approval of its USDA loan. This phase of the project is currently expected to start in December, effectively a 6-month delay from its original schedule. For Pomas Farms, on the right, there were 2 projects representing approximately $14 million in contract value. The Greenhouse Lift project is nearing completion and the Phase 2 18-acre Bell Pepper expansion project has recently been started. Both projects experienced initial delays related to water rights permitting, but we are pleased they are now active and moving forward. Now I want to move to Slide 9. Let's talk a little bit about bookings and backlog acceleration. Bookings and backlog continue to accelerate and grow as we expand our customer base and increase our win rate with customers. Total bookings on a year-to-date basis are up 121% with organic bookings up 44%. Our average backlog is up 110% over prior year, with our organic backlog up 70%. Our effort to broaden our customer base over the last 12 to 18 months is also gaining traction as we have secured business with 15 new CEA growers, 24 commercial classic growers, and 20 customers focused on institutional operations like ag research and botanical gardens. We have also been rebalancing the business across end markets and between new construction and retrofit and service, all of which will provide positive impact for the business going forward. Now finally, let's move to Slide 10. I just want to share a couple of customer wins in the commercial, institutional business. We were recently awarded a design and build contract to retrofit the Franklin Park Conservatory and Botanical Gardens in Columbus, Ohio, which we expect to begin in Q1 2026. We're equally excited with our recent win for the Kaplan Orchid Conservatory and research facility, a design-build contract to build a new conservatory and also a separate research facility in Norfolk, Virginia. These projects are expected to begin in Q2 2026. I'd say a lot of positive customer and demand activity happening across the Agtech business. As more projects come into the pipeline and our operations cadence smoothens as a result, we are looking forward to generating more consistent predictable performance accordingly. So let's now move on to Infrastructure.

So let's move to Slide 11. Infrastructure net sales decreased $0.1 million or less than 1% as a result of a now resolved supplier transition that shifted revenue from September into the fourth quarter. Backlog decreased 2% in the quarter, but strong order inflows are being booked in October. Both segment adjusted operating and EBITDA margins decreased 740 basis points, driven by lower volume and inefficiency related to the now resolved supplier transition. Let's now move to Slide 12. We are excited to share a new patented technology that D.S. Brown recently launched to protect telecom fiber optic cables installed in shallow depth trenches in asphalt pavement and roadways. Shallow depth trenching for fiber optic insulation with our seal provides significant benefits in the expansion of fiber optic networks. It improves installation speed, minimizes roadway closures, creates less traffic disruption while providing a more durable seal solution. Since late Q2 2024, we have sold 350 miles of seal to support fiber optic installation projects in 13 different states, and we are excited to see this product solution ramp and grow as cities and states in the U.S. continue to build and strengthen fiber optic infrastructure. So now let's move to Slide 13 to discuss our balance sheet and cash flow. At September 30, we had cash on hand of $89 million and $394 million available on our revolver. During the quarter, we generated approximately $57 million in cash from operations from net income and cash generated from working capital. Free cash flow generation again expanded on a sequential basis to about 16% of sales as expected, and we are on track to hit our 2025 target of approximately 10% of sales. Our revolving credit facility remains untapped, and we remain debt-free. We expect to continue to generate strong cash flow in 2025 and in the coming years. Our capital allocation priorities for 2025 are to continue to invest in our organic growth and operating systems for scale with capital expenditures at approximately 3% to 4% of sales for the year. We continue to explore inorganic growth opportunities with a focus in our current residential end markets and have an active pipeline of high-quality M&A. Our strong balance sheet supports this effort and provides optionality and flexibility. Lastly, we plan to continue to deploy capital for value creation through opportunistic share repurchases and have $200 million remaining under our stock purchase authorization. Now I'll turn the call back to Bill.

So now let's move to Slide 14, and we will review our guidance for the rest of the year. Let's start with our assumptions for end markets. In Residential, we expect current market conditions to persist and adjust for normal seasonality in Q4. We assume interest rates will become a bit more attractive, affordability will improve slightly in certain regions, and inventory rightsizing will continue in the channel. We will continue to drive participation opportunities in both our Building Accessories and Mail and Package businesses. In Agtech, we have solid backlog and expect to add more bookings in Q4 with some impact from these projects in the fourth quarter while also setting us up for a good start in 2026. We also expect demand in our Lane Supply business to continue as the team supports new store and retrofit initiatives across its core customer base. Finally, we expect Infrastructure margins to return to normal levels in Q4, accelerate bookings in the quarter and build backlog as we exit the year. So with that, let's review our 2025 guidance from continuing ops. We expect net sales to range between $1.15 billion and $1.175 billion, up approximately 15%, adjusted operating margin to range between 14.1% and 14.2%, adjusted EBITDA margin to range between 17.1% and 17.2%, GAAP EPS to be in the range of $3.67 to $3.77, down from last year, but driven primarily by the gain on sale from the company's Electronic Locker business that we executed at the end of 2024. Adjusted EPS to be in the range of $4.20 to $4.30, up approximately 10% to 12%, and free cash flow as a percent of net sales of 10%. In summary, we're on track to deliver a solid year in 2025. We will continue to navigate through a sluggish residential market, execute on growing bookings and backlog in Agtech and stay on course to complete the sale of the Renewables business by year-end. Transforming our portfolio and focusing more on residential and structures businesses will drive improved performance for our shareholders and customers. I'm really proud of the work our team is doing to execute in this environment each day while simultaneously transforming the company for the future. So with that, let's open the call up, and we'll take some questions.

Our first question comes from the line of Walt Liptak with Seaport Research.

I wanted to ask about the guidance for this year and the lower EBITDA margin you're forecasting. Is it mainly due to the lower margin this quarter, which might be primarily in the Agtech segment? Similarly, for the fourth quarter, is the overall margin declining because of the Agtech outlook?

Yes, Walter, I think there's probably two things there. One, we referenced the lower volume in Agtech. And so you saw that particularly in the third quarter. And then the second part is kind of the impact of the business and product mix, particularly in the residential segment. So I'd say those are the two drivers that you're seeing impact the margins for the balance of this year.

Okay. Great. And just to drill into the Agtech segment. You referenced some new customer wins, and that's great. I wonder if you can provide us with some details about the sizes of these new projects, sort of the implied margins and what the future margins for Agtech could look like?

We have a diverse range of customers, including residential, institutional, and commercial sectors, which has led to a broad increase in our business. In the residential segment, we've expanded significantly with both new projects and retrofits in the U.S. and Canada. The margins associated with these projects differ based on their specific scope and size. However, we remain optimistic about reaching a 15% operating income target and potentially achieving higher EBITDA margins in the near future. In the U.S., particularly in the commercial and institutional markets, we see even better margins due to the unique and customized nature of our services. By diversifying our business across different channels, markets, and project scopes, we can enhance our margin performance. Expanding our customer base and the variety of projects we undertake helps stabilize our operations and manage costs effectively throughout the year. I'm enthusiastic about our growth in this area, as it leads to greater predictability for our business and stakeholders. This is why I wanted to highlight the positive trends in bookings, backlog, and customer expansion, as they are crucial for improving our margins moving forward.

Okay. Is there a change now in the sizes of these projects? Are there more diverse smaller projects that inherently have less risk? Is that what you're referring to?

Yes, I believe so. If you examine our organic business, commercial and institutional sectors are naturally smaller than the largest CEA. Their scope is limited, which allows us to handle more of those projects in a given year compared to CEA, primarily due to CEA's size. Lane operates differently in that their average project duration is about one to two weeks, depending on the complexity. The pace they provide to the segment is beneficial as well. Thus, consider Lane as the quickest in terms of project turnover, with commercial and institutional falling in between, while CEA consists of larger and longer projects. Mixing these different types is crucial for us in maintaining project momentum.

Okay. Great. And then I think you called out that Lane Supply had some one-time costs this quarter. I wonder if you could quantify those for us?

Yes. Well, a reference there is we're trying to accelerate a little bit faster on the integration. So we're doing incremental systems work to pull that up faster than we had originally thought. So getting them on the Gibraltar systems, not just for financial reporting, but other systems like our HRS system, supply chain and things of that nature. We're just putting a lot of effort to accelerate that at a faster pace than we originally planned. That's the bulk of it. In terms of quantifying that in the quarter, I don't have a solid number for you, but it's a decent amount of effort.

Our next question comes from the line of Daniel Moore with CJS Securities.

Could you provide more details about the backlog being up 50%? Was this growth organic? I understand you mentioned 70% organic growth in Agtech and would like to clarify that further.

The backlog I mentioned is entirely in Agtech. The average backlog increased by 70% year-over-year. It's important to use an average since the backlog changes each quarter. However, bookings might be more telling, as they rose by 44%. This growth is entirely organic and consistent year-over-year, resulting from adding more customers, winning additional projects, and improving our win rate. We have put in significant effort over the past couple of years not just in Controlled Environment Agriculture but also in commercial and institutional sectors, and it's encouraging to see these efforts beginning to yield results. While I didn't go into much detail about the projects we have underway, there are many promising activities ahead. We're beginning to see our strategy of increasing cadence and consistency quarter-by-quarter take shape, as we need to stack more projects. I'm excited about the potential impact this will have in Q4 and as we move into 2026.

That's helpful. Can you remind us roughly what percentage of your Agtech revenue runs through backlog? I'm trying to understand how significant this increase in order rates is for translating into growth next year. Also, in terms of lead times, when should we expect to see this translate into faster revenue growth?

Yes. So a very high percentage of our revenue comes from our backlog, if you will, in Agtech. There's a little bit where we'll do some repair and maintenance type stuff that turns and flips that doesn't really go into the backlog, but the bulk of what we do goes into backlog and then translates into sales. So I'd say probably 90% of our revenue comes from and is driven by the backlog that is in front of it. As we stack these projects, as I mentioned in the call, we'll start to see the impact of some of that in Q4. Those projects depending on the mix between commercial, institutional and CEA, and Lane, all have a different time element around it. If you look at the two I showed you guys in commercial and institutional, those will start in Q1 and Q2 as an example. We'll turn and flip those in 3 to 4 months. CEA projects can be up to a year. Lane will be 10 days to 2 weeks. It's that mix that we think will get us off to a good start in the first quarter, but it's going to be helpful in Q4 as well. What I probably need to provide you a better view of, Dan, honestly, is breaking the backlog down into those various groups so you get an idea of churn, which I didn't do for today, but we can follow up with you on that as well.

Makes sense. Appreciate it. We don't talk as frequently these days about Mail and Packaging. It's been a few years of obviously slow housing turnover. What's your updated outlook for growth for that business and margin profile and opportunity over the next few years?

Yes. The Mail and Package business is different from our Building Accessories sector, which is primarily focused on repairs at 80%. This contrasts with new construction, which largely drives the Mail and Package segment. With construction starts declining over the last two years, we have been working hard to outperform in a challenging market. The improvement in starts is a key factor for us, especially as interest rates and affordability begin to align. As conditions improve, we should see an uptick in starts that will benefit our business. There is a lot of quoting activity from our dealers on potential developments, but those need to begin actually moving forward. We've seen progress in civil work, but new construction is currently on hold, particularly in larger neighborhoods, whether multifamily or single-family. We need that activity to advance in order to convert into business for us. While we've not experienced a decline as significant as others in our sector, it doesn’t change our outlook. Many of our dealers are quite optimistic, but we need to see starts increase for the business to improve. I don't anticipate a steep decline moving forward. Instead, I believe we are nearing the bottom and will closely follow trends in new construction from builders, which has generally shaped our performance, especially in our centralized mail segment.

Got it. And margins pretty steady state kind of on a run rate basis, not necessarily this quarter, but fiscal '24?

Yes, I think so, especially in Mail and Package. In the residential sector, we've managed to perform fairly well despite a sluggish market and the challenges posed by tariffs. We've addressed these issues effectively, but we still need to focus on executing strategies related to pricing, cost reduction, and our 80/20 initiatives. The team has done a commendable job of mitigating the impact of the macro environment and has achieved solid performance compared to the global market. While we are not overly satisfied, it does provide us with some confidence that we can navigate the challenges ahead. As the market begins to recover, we should find ourselves in a favorable position to accelerate our growth more rapidly than others.

Looking at the adjusted guidance, the adjusted pro forma operating margins are approximately 14% for the overall business based on your fiscal '25 guidance. We've discussed some of these aspects. In terms of opportunities for '26 and beyond, not specifically looking at guidance, where do you identify the biggest chances to enhance that? What should we anticipate considering the new portfolio of businesses in the next 2 to 3 years?

Yes, that's a good question. Believe it or not, we will begin our budgeting and 3D look process next week. From a broad perspective, we expect the residential market to improve. We are currently in our third or fourth year of a depressed market, and at some point, that is going to change. I believe this will positively influence our growth on both the top and bottom lines. As we expand in areas like Building Accessories, Metal Roofing, and Mail and Package, we are well-positioned to enhance our performance. Another significant area for us is Agtech. The backlog and the rate of bookings we have recently shown will greatly impact our contributions over the next few years. This business is set to add considerably to our top line. As we establish a steady rhythm and mix of projects, we will see margin improvements that will benefit overall Gibraltar. Additionally, while it is a relatively small business, the new patented technology Joe mentioned is intriguing. We are just beginning, but this could be a solid growth driver if it continues to progress and, at the very least, support our current margin profile. We have many positive developments ahead. We are performing quite well in this environment, and as some markets shift in our favor, we are excited about what we can achieve in the next 2 to 3 years. We will keep utilizing our balance sheet, whether through strategic buybacks or taking advantage of some promising M&A opportunities that could strengthen our position in our existing markets. We are making substantial efforts in this area, and while we have several aspects working well, they are not yet reflected as strongly as we would like, but they are starting to show.

Very helpful. Maybe last one, and I'll jump out. It sounds like you still expect the sale to go through between now and year-end. Anything that might be delaying that? Your confidence around that timing relative to where we stood maybe 90 days ago.

Yes, I'd say pretty good. No, we're moving forward, so these processes have stages. If it's a 9-inning game, we're in the later innings, not the early innings. We still feel good about that and like to get that done. That's important to us for a lot of reasons as well. So good progress.

Our next question comes from the line of Julio Romero with Sidoti & Company.

On residential, you talked about some of the trends in that segment across the different business units, outperforming some of the end markets in building accessories and also in centralized mail, talked about retail point of sale down 4.5%. I was hoping you could talk about trends by geography a bit and just call out any areas of strength and weakness that you saw in the quarter and heading into fourth quarter.

From a market perspective, the influx of data is intriguing, especially considering that major markets like Texas, Florida, and California have all experienced declines. These states have seen significant migration and growth in recent years due to their size. While Texas is important to us, it's not a place where we feel exceptionally well positioned, though we are making progress. I believe that region, along with the Southeast in general, may experience some recovery in the next year. Florida, which recently faced a series of strong storms, saw a significant decline in performance year-over-year. However, I think it has now stabilized, and we are starting to see positive growth year-to-date. We're reasonably well positioned there, despite having come off a couple of challenging years following the hurricanes. We'll observe how things develop. In the broader Southeast, states like Georgia and Alabama remain robust. The Carolinas are also strong, and we’ve been expanding into these areas through our metal roofing efforts, now integrating our building accessories in these locations since they are somewhat underserved. Our strategy is somewhat focused, aiming to thrive in Florida, expand in the Southeast, and boost our presence in the Carolinas. We are also enhancing our operations in Texas and the Rocky Mountain region, particularly in Colorado, Idaho, and Montana, where we still see potential. Salt Lake has performed well for us, and we've also explored opportunities in Boise, which appears to be a decent market. We aim to anticipate market trends, which can be challenging given the current dynamics. Our focus extends beyond just the next year or quarter; we are analyzing migration patterns, investment trends, and inventory levels. It's a complex picture. I apologize for the lengthy response, but I hope this clarifies things a bit.

Yes, very helpful. And just thinking about the Residential segment adjusted operating margin and Residential EBITDA margin trended down a bit year-over-year and sequentially here. Can you help us unpack the drivers of the decline? Is that primarily from the increased noise from the acquisitions in metal roofing? Or is there some noise in there from inventory rightsizing and less weather-related, etc., activity?

Yes, we discussed earlier that our revenue was below expectations for the quarter. Outside of Mail and Packaging and our core Building Accessories, we did see a 2% increase, but we had anticipated a slightly higher growth. We did not foresee the need for rightsizing, which became apparent after Labor Day. Wholesalers and large retailers have been adjusting to this situation. Typically, the third quarter is our biggest, but it did not perform as expected. I don’t believe that the market is structurally down by 10% to 12%; rather, it seems to be closer to 4% or 5%, which reflects actual sales at the point of sale. This situation created some complications in Building Accessories, affecting our margins. The decline in Mail and Package also contributed to margin compression. The issues with Metal Roofing are more of a short-term nature as we are trying to accelerate our efforts more quickly than planned. We are currently making investments to integrate things at a faster pace than we initially anticipated. While these investments are necessary, they are being made progressively.

Perfect. My follow-up question is focused on residential, following up on what Dan asked earlier. As you proceed with your expansion initiatives and make near-term investments in systems and integration, how should we expect the residential margins in terms of operating and EBITDA margins to trend over the next few quarters and into 2026, to the extent you can discuss this at a high level?

Yes, we expect improvements. As I mentioned, we're simultaneously managing some changes in our business and product mix while integrating our recent acquisitions in a challenging market. If the market could show a bit more cooperation than it has over the last three years, it would significantly help, so we aren't constantly trying to recover in 2026. While we can't control the market dynamics, we are observing some positive trends. It’s uncertain if we’ve reached the lowest point yet, but achieving more stability in that area will impact our execution of the base plan. What we can control includes how we enhance participation, our product mix, and new offerings which we believe will all contribute positively. We’re also focusing on new locations and our strategy to engage wholesalers on a local level, which typically yields higher margins compared to our previous methods of serving them from afar. Several factors should drive margin improvement moving forward. The inclusion of metal roofing is essential to our strategy, which is why we pursued it in the first place. Many elements will begin to contribute as we move into 2026 and 2027. Additionally, while I can't quantify it yet, the systems integration poses several challenges due to the lack of cohesive systems for our teams to utilize. We have been addressing this issue for some time, and by the end of 2026, we will have our entire residential business operating on a single system, with just a few more locations to integrate. This advancement will be significant as we scale up with technology and optimize our cost structure in a fundamentally different manner than in the past. I believe these enhancements will positively influence our margins as we progress.

Very exciting. The last one for me here would just be if you could talk a little about the M&A pipeline for residential in regards to your expansion initiatives and kind of where M&A multiples are going for in the residential space.

Yes. I'm not avoiding the topic, but I'd say M&A multiples vary widely. As we've mentioned earlier, our goal is to stay focused on our core areas in residential. We concentrate on specific segments and aim to enhance our presence there because the synergy opportunities are generally more favorable. The return on investment is better and involves less risk when we stick to what we do regularly, rather than venturing into adjacent sectors. Currently, our pipeline in these core areas is quite strong, particularly in building accessories and metal roofing, which is currently quite appealing. These are the two main areas where we are fully focused on M&A activities for Gibraltar. We will keep pursuing that. Yes, we are engaged in a couple of intriguing prospects, and we will see how those develop in the near future.

This now concludes our question-and-answer session. I would now like to turn the floor back over to Mr. Bosway for closing comments.

Well, guys, thanks again for joining us today, and I appreciate the support. I appreciate all the questions. It's an interesting time. I think we're doing a pretty good job of navigating through some things. Looking forward to catching back up with you guys next quarter. We know we'll do some one-on-ones here shortly as well. So thanks again, and hope you have a good day.

Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines, and have a wonderful day.