Certain information set forth herein includes statements that express our opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results and, therefore are, or may be deemed to be, "forward-looking statements." These forward-looking statements can generally be identified by the use of forward-looking terminology, including the terms "believes," "anticipates," "aspires," "expects," "estimates," "seeks," "projects," "intends," "plans," "may," "will" or "should" or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They include statements regarding our intentions, beliefs or current expectations concerning, among other things, our results of operations, financial condition, liquidity, prospects, growth, competition, strategies and the industries in which we operate. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We believe that these risks and uncertainties include, but are not limited to, those described in the "Risk Factors" disclosed in our Annual Report on Form 10-K along with Item 1A of this Form 10-Q. Although we base these forward-looking statements on assumptions that we believe are reasonable when made, we caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition, liquidity and the development of the industries in which we operate may differ materially from those made in or suggested by the forward-looking statements contained herein. In addition, even if our results of operations, financial condition, liquidity, and the development of the industries in which we operate are consistent with the forward-looking statements contained in this quarterly report, those results or developments may not be indicative of results or developments in subsequent periods. Given these risks and uncertainties, you are cautioned not to place undue reliance on these forward-looking statements. Any forward-looking statements that we make herein speak only as of the date of those statements, and we undertake no obligation to update those statements or to publicly announce the results of any revisions to any of those statements to reflect future events or developments. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless expressed as such, and should only be viewed as historical data. We use certain operating performance measures, specifically consolidated gross margin, operating margin by segment and consolidated operating margin, to manage our businesses, set operational goals, and establish performance targets for incentive compensation for our employees. We define consolidated gross margin as a percentage of total consolidated gross profit to total consolidated net sales. We define operating margin by segment as a percentage of total income from operations by segment to total net sales by segment and consolidated operating margin as a percentage of total consolidated income from operations to total consolidated net sales. We believe consolidated gross margin, operating margin and consolidated operating margin may be useful to investors in evaluating the profitability of our segments and Company on a consolidated basis.
Overview
The Company operates and reports its results in the following four reporting segments: •Renewables; •Residential; •Agtech; and •Infrastructure. The Company serves customers primarily inNorth America including renewable energy (solar) developers, home improvement retailers, wholesalers, distributors, institutional and commercial growers of food and plants, and contractors. As part of our continuing operations atMarch 31, 2021 , we operated 36 facilities, comprised of 26 manufacturing facilities, one distribution center, and nine offices, which are located in 16 states,Canada ,China , andJapan . Our operational infrastructure provides the necessary scale to support local, regional, and national customers in each of our markets. 23 -------------------------------------------------------------------------------- Table of Contents COVID-19 Update While the Company continues to encounter challenges and uncertainty associated with COVID-19, the pandemic did not have a material adverse effect on our reported results during the first quarter of 2021. Our top priority continues to be focused on our organization - keeping our team and their families as safe as possible, maintaining the timely and effective functioning of our supply chain operating and providing a high level of responsiveness to customer needs. We continue to proactively execute our pandemic "playbook" in 2021 and make adjustments to our operating protocols as we navigate forward. The extent to which our operations will be impacted by the outbreak, including but not limited to the current impact of supply chain, transportation and labor challenges, along with new requirements or regulations mandated by government authorities, remains uncertain and challenging to predict, Refer to the Company's Outlook section in this management discussion and analysis for consideration relative to future periods. Business Strategy The Company's mission is to create compounding and sustainable value for our stockholders and other stakeholders with strong and relevant leadership positions in higher growth, profitable end markets focused on addressing some of the world's most challenging opportunities. The foundation of the Company's strategy is built on three core pillars: Business System, Portfolio Management, and Organization Development. 1.Business System reflects the necessary systems, processes, and management tools required to deliver consistent and continuous performance improvement, every day. Our Business System is a critical enabler to grow, scale, and deliver our plans. Our Business System is focused on deploying effective tools to drive growth, improve operating performance, and develop the organization. Our Business System challenges existing paradigms, drives day-to-day performance, forces prioritization of resources, challenges our business models, and brings focus to new product and services development and innovation. 2.Portfolio Management is focused on optimizing the Company's business portfolio and ensures our financial capital and human resources are effectively and efficiently deployed to deliver sustainable, profitable growth while increasing our relevance with customers and shaping our markets. For a description of recent portfolio management activities, see the actions described below in the Recent Developments section. 3.Organization Development drives the Company's continuous focus on strengthening and scaling the organization to execute the Company's plans and meet commitments. The Company aspires to make our place of work the "Best Place to Work", where we focus on creating an environment for our people to have the best opportunity for success, continue to develop, grow, and learn. At core of this pillar is the Company's development process focused on helping employees reach their potential, improve performance, develop career roadmaps, identify ongoing education requirements, and respective succession plans. We believe doing so helps us attract and retain the best people so we can execute our business plans. We believe the key elements of our strategy have, and will continue to, enable us to respond timely to changes in the end markets we serve, including evolving changes due to COVID-19 and the challenges noted above. We have and expect to continue to examine the need for restructuring of our operations, including consolidation of facilities, reducing overhead costs, curtailing investments in inventory, and managing our business to generate incremental cash. We believe our enhanced strategy has enabled us to better react to volatility in commodity costs and fluctuations in customer demand, along with helping to improve margins. We have used the improved cash flows generated by these initiatives to pay down debt, improve our liquidity position, and invest in growth initiatives. Overall, we continue to strive to achieve stronger financial results, make more efficient use of capital, and deliver higher stockholder returns. 24 -------------------------------------------------------------------------------- Table of Contents Recent Developments During the first quarter of 2021, the Company sold its Industrial business as a result of its Portfolio Management strategy to focus on participation in higher value and faster growing markets. The Industrial business, previously reported in the Company's Industrial and Infrastructure Products segment, was reported as discontinued operations as ofDecember 31, 2020 .
During 2020, the Company completed the following acquisitions:
Purchase price ( in Business Acquired Date of Acquisition in 2020 millions) 1 Description
Provider of screw-based, ground-mount solar
racking technology, particularly used for solar
December 31 $
223.7 projects installed on challenging terrain
Provider of software solutions that optimize
solar energy investments through upstream design,
December 11 $
3.8 performance and financial modeling
Provider, designer, and developer of decorative Architectural Mailboxes
October 15 $
26.9 residential mailboxes and related products
Provider of ethanol-based extraction systems
manufacturer and training and laboratory design Delta Separations
February 13 $
47.1 and operations consultative partner
Provider of commercial greenhouse solutions in
North America supporting the biologically grown Thermo Energy Systems January 15$ 7.3 organic food market Note 1: Except forTerraSmart , which was financed through a combination of cash on hand and borrowings under the Company's revolving credit facility, all of the above 2020 acquisitions were funded from cash on hand. The purchase price for the acquisitions ofTerraSmart , Sunfig, and Architectural Mailboxes represents the preliminary allocation to the assets acquired and liabilities assumed in each transaction. The purchase price shown above for Delta and Thermo represents the final purchase price in each transaction. 25 -------------------------------------------------------------------------------- Table of Contents Results of Operations Three Months EndedMarch 31, 2021 Compared to the Three Months EndedMarch 31, 2020 The following table sets forth selected results of operations data and its percentage of net sales for the three months endedMarch 31 (in thousands): 2021 2020 Net sales$ 287,592 100.0 %$ 215,401 100.0 % Cost of sales 227,574 79.1 % 165,540 76.9 % Gross profit 60,018 20.9 % 49,861 23.1 % Selling, general, and administrative expense 47,203 16.4 % 37,084 17.2 % Income from operations 12,815 4.5 % 12,777 5.9 % Interest expense 444 0.2 % 44 0.0 % Other expense 315 0.1 % 518 0.2 % Income before taxes 12,056 4.2 % 12,215 5.7 % Provision for income taxes 1,560 0.6 % 2,313 1.1 % Income from continuing operations 10,496 3.6 % 9,902 4.6 % Income from discontinued operations 2,266 0.8 % 2,157 1.0 % Net income$ 12,762 4.4 %$ 12,059 5.6 %
The following table sets forth the Company's net sales by reportable segment for
the three months ended
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