We expect some impact from the pandemic to our earnings, financial position and cash flows to continue in the remainder of 2021, however there is much uncertainty surrounding the estimated magnitude of these impacts. We estimate limited impact to our Consolidated Balance Sheets other than a potential reduction in working capital due to the possibility of reduced net revenue and net income. Trade accounts receivable may also be reduced somewhat by lower net revenue and a higher allowance for credit losses due to enhanced risk of collectibility from some customers, although we have not seen a significant impact to date. We anticipate revenue and net income may continue to be negatively impacted during the remainder of 2021 into 2022 due to supply constraints and/or material price increases. While our cash from operations may decline over recent performance due to a decrease in expected net income driven by lower net revenue, we do not anticipate any issues meeting debt obligations or making timely payments to vendors given our strong liquidity and large cash reserves. See "Liquidity and Capital Resources" below for further information. Given the continued uncertainty created by the COVID-19 pandemic and its potential effects, it is not possible to estimate the full, adverse impact to our future 2021 or 2022 sales or other financial results at this time.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security ("CARES Act") was signed into law. The CARES Act provides numerous tax provision and other stimulus measures. We ~~have~~ benefited from the temporary suspension of ~~certain payment requirements for~~ the employer portion of Social Security ~~taxes. As of December 31, 2020, we deferred~~taxes by deferring $20.7 million of payments ~~depending on the number of employees, that would have been paid during 2020, such that under the CARES Act,~~in 2020. 50% of the amount ~~will now be~~was paid on December 31, 2021 and the remaining 50% will be paid on December 31, 2022. It is important to note that this does not impact the timing of the expense, only the timing of the payment. ~~We also benefited from the creation of certain refundable employee retention credits and the technical correction for qualified leasehold improvements, which provides for tax bonus depreciation.~~

LIQUIDITY AND CAPITAL RESOURCES

Our capital resources primarily consist of cash from operations and borrowings under our various debt agreements and capital equipment leases and loans. As of March 31, 2022, we had cash and cash equivalents of $217.4 million, short-term investments of $50.0 million, as well as access to $250.0 million under our asset-based lending credit facility (as defined below), less $44.3 million of outstanding letters of credit, resulting in total liquidity of $473.1 million. This total liquidity was reduced by $4.3 million within our cash and cash equivalents due to a deposit into a trust to serve as additional collateral for our workers' compensation and general liability policies. This amount can be converted to a letter of credit at our discretion and would reduce the availability of our asset-based lending facility (as defined below). Liquidity may also be limited in the future by certain cash collateral limitations under our asset-based credit facility (as defined below), depending on the status of our borrowing base availability.

We experienced unprecedented increases in pricing for fiberglass and foam insulation materials in 2021 and the first quarter of 2022 and expect manufacturers to seek additional price increases in 2022. Increased market pricing on the materials we purchase has and could continue to impact our results of operations in 2022 due to the higher prices we must pay for materials. See Part I, Item 1A, Risk Factors on the 2021 Form 10-K, for information on the potential and currently known impacts on our business and liquidity from the COVID-19 pandemic.

Short-Term Material Cash Requirements

Our primary capital requirements are to fund working capital needs, operating expenses, acquisitions and capital expenditures, ~~and~~ to meet ~~required~~ principal and interest obligations and to make required income tax payments. We may also use our resources to fund our optional stock repurchase program and ~~dividend program. As discussed above,~~pay quarterly and annual dividends. In addition, we expect to spend cash and cash equivalents to acquire various companies with at least $100.0 million in aggregate net revenue acquired each fiscal year. The amount of cash paid for an acquisition is dependent on various factors, including the size and determined value of the business being acquired.

We expect to meet our short-term liquidity requirements primarily through net cash flows from operations, our cash ~~reserves may also be used to fund payroll~~ and ~~other short-term requirements if our business is affected significantly by COVID-19. As~~cash equivalents on hand and borrowings from banks under the Master Loan and Security Agreement, the Master Equipment Agreement and the Master Loan Agreements. Additional sources of ~~September 30, 2021,~~funds, should we ~~had no outstanding borrowings~~need them, include borrowing capacity under our asset-based lending credit facility (as defined below).

WeDespite the current known impacts of the COVID-19 pandemic, we believe that our cash flows from operations, combined with our current cash levels and available borrowing ~~availability,~~capacity, will be adequate to support our ongoing operations and to fund our ~~debt service requirements, capital expenditures~~business needs, commitments and ~~working capital~~contractual obligations for at least the next 12 months as evidenced by our net positive cash flows from ~~operating activities~~operations for ~~each of~~ the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022 and ~~2020.~~2021. We believe that we have access to additional funds, if needed, through the capital markets to obtain further debt financing under the current market ~~conditions.~~conditions, but we cannot guarantee that such financing will be available on favorable terms, or at all. We also expect the seasonal trends we typically experience throughout the year to be more muted in 2022 given the strong industry backlog. This could affect the timing of cash collections and payments during each quarter of 2022.

Long-Term Material Cash Requirements

Beyond the next twelve months, our principal demands for funds will be to fund working capital needs and operating expenses, to meet principal and interest obligations on our long-term debts and finance leases as they become due or mature, and to make required income tax payments. Additional funds may be spent on acquisitions, capital improvements and dividend payments, at our discretion.

On a long-term basis, our sources of capital could be insufficient to meet our needs and growth strategy. We may refinance existing debt or obtain further debt financing in the future to the extent that our sources of capital is insufficient.

In "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in the 2021 Form 10-K, we disclosed that we had $1.1 billion aggregate long-term material cash requirements as of December 31, 2021. There have

~~While~~30

been no material changes to our cash requirements during the ~~general economic environment within~~period covered by this 10-Q outside of the ~~United States~~normal course of our business.

Sources and ~~most markets around the world have been significantly impacted by the spread~~Uses of ~~COVID-19, prompting governmental~~Cash and ~~health agencies to issue unprecedented orders to close businesses not deemed “essential” during portions~~Related Trends

Working Capital

We carefully manage our working capital and operating expenses. As of March 31, 2022 and December 31, 2021, ~~and 2020, we believe we have robust~~our working capital, ~~resources at our immediate disposal to meet our needs. We have~~including cash and cash equivalents ~~of $191.4~~and investments, was $514.7 million ~~as of September 30, 2021 as well as access to $200.0~~and $551.7 million. Accounts receivable increased $32.8 million ~~under~~resulting from our ~~ABL Revolver, less $44.3~~increased net revenue, and inventories increased by $17.0 million ~~of outstanding letters of credit. This amount available to us is based on eligible collateral, which may be reduced over time. While our cash from operations could decline later in 2021~~ due to ~~COVID-19 impacts as described above, we believe it will remain at a level to fund our operations~~material price inflation, increased selling activity and ~~not require us to draw on our ABL Revolver. However, as necessary or desirable, we may adjust or amend the terms~~acquisitions. These increases were partially offset by an increase of ~~our credit facilities. With the uncertainty surrounding COVID-19, our ability to engage~~$17.9 million in such transactions may be constrained by volatile credit market conditions. See Part II - Other Information, Item 1A. Risk Factors for more information on the potential impacts from the COVID-19 pandemicaccounts payable primarily due material price inflation and ~~resulting economic strain.~~

LIBOR is used as a reference rate for our Term Loan, as hereinafter defined, and our interest rate swap agreements we use to hedge our interest rate exposure. In 2017, the Financial Conduct Authority (“FCA”), the authority that regulates LIBOR, announced that it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021, and it is unclear whether new methods of calculating LIBOR will be established. The Intercontinental Exchange Benchmark Administration, the administrator of LIBOR, announced in March 2021 its intention to extend the publication of certain LIBOR settings, including the setting we use as a reference rate, to June 2023. Our Term Loan Agreement, 2021 interest rate swap agreements and ABL Credit Agreement include a provision related to the potential discontinuance of LIBOR to be replaced with one or more Secured Overnight Financing Rate (SOFR) values or another alternate benchmark rate. However, if LIBOR ceases to exist after 2023, the interest rates under the alternative rate could be higher than LIBOR. In January 2020, the FASB issued ASU 2020-04, Reference Rate Reform: Facilitation of the Effects of Reference Rate Reform on Financial Reporting (Topic 848) and in January 2021, the FASB subsequently issued ASU 2021-01, Reference Rate Reform - Scope, which clarified the scope and application of the original guidance. The purpose of this guidance is to provide relief for impacted areas as it relates to impending reference rate reform. We elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation.increased sales volume. We continue to ~~evaluate the impact~~look for opportunities to reduce our working capital as a percentage of ~~the guidance and may apply other elections as applicable as additional changes in the market occur.~~

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net revenue.

The following table summarizes our liquidity (in thousands):

As of September 30, 2021 As of December 31, 2020
Cash and cash equivalents $ 191,435 $ 231,520
ABL Revolver 200,000 200,000
Less: outstanding letters of credit (44,272) (38,772)
Total liquidity(1)
$ 347,163 $ 392,748


	Three months ended March 31,
	2022		2021
Net cash provided by operating activities	$	48,225	$	37,618
Net cash used in investing activities	(68,718)		(52,392)
Net cash used in financing activities	(95,558)		(9,403)

Cash Flows from Operating Activities

Our primary source of cash provided by operations are revenues generated from installing building products and the resulting operating income generated by these revenues. Operating income is adjusted for certain non-cash items, and our cash flows from operations can be impacted by the timing of our cash collections on sales and collection of retainage amounts. The COVID-19 pandemic has not had a material impact on our cash collections to date.

Our primary uses of cash from operating activities include payments for installation materials, compensation costs, leases, income taxes and other general corporate expenditures included in net income.

Net cash provided by operating activities increased from 2021 to 2022 primarily due to the increases in net income and various noncash adjustments, offset by the changes in working capital.

Cash Flows from Investing Activities

Sources of cash from investing activities consist primarily of proceeds from the sales of property and equipment and, periodically, maturities from short term investments. Cash used in investing activities consists primarily of purchases of property and equipment, payments for acquisitions and, periodically, purchases of short term investments.

Net cash used by investing activities increased from 2021 to 2022 primarily due to the purchase of short-term investment during the three months ended March 31, 2022. See Note 5, Investments and Cash and Cash Equivalents, for more information on this investment.

Cash Flows from Financing Activities

Our sources of cash from financing activities consists of proceeds from the issuances of vehicle and equipment notes payable and, periodically, other sources of debt financing. Cash used in financing activities consists primarily of debt repayments, acquisition-related obligations, dividends and stock repurchases.

Net cash used by financing activities increased from 2021 to 2022 primarily due to the repurchase of common stock under our stock repurchase plan during the three months ended March 31, 2022. Our net cash provided by financing activities also increased during the three months ended March 31, 2022 due to the payment of our first annual dividend payment. See Note 12, Stockholders' Equity, for more information on the repurchase of common stock and the payment of dividends.

~~(1)~~Total liquidity reflects full borrowing base capacity under our asset-based lending credit facility (as defined below) and may be limited by certain cash collateral limitations depending upon the status of our borrowing base availability. These potential deductions would lower our available cash and cash equivalents balance shown in the table above. As of September 30, 2021, total liquidity would not be reduced due to these cash collateral limitations. In addition, total liquidity is further reduced by $5.3 million within cash and cash equivalents above which was deposited into a trust to serve as additional collateral for our workers’ compensation and general liability policies. This amount can be converted to a letter of credit at our discretion and would reduce the availability on our asset-based lending credit facility (as defined below) included in the table above.31

Debt

5.75% Senior Notes due 2028

In September 2019, we issued $300.0 million in aggregate principal amount of 5.75% senior unsecured notes (the “Senior Notes”). The Senior Notes will mature on February 1, 2028 and interest is payable semi-annually in cash in arrears on February 1 and August 1, ~~of each year until maturity.~~ commencing on February 1, 2020. The net proceeds from the Senior Notes offering were $295.0 million after debt issuance costs.

The indenture covering the Senior Notes contains restrictive covenants that, among other things, limit the ability of the Company and certain of our subsidiaries (subject to certain exceptions) to: (i) incur additional debt and issue preferred stock; (ii) pay dividends on, redeem or repurchase stock in an aggregate amount exceeding 2.0% of market capitalization per fiscal year, or in an aggregate amount exceeding certain applicable restricted payment baskets; (iii) prepay subordinated debt; (iv) create liens; (v) make specified types of investments; (vi) apply net proceeds from certain asset sales; (vii) engage in transactions with affiliates; (viii) merge, consolidate or sell substantially all of our assets; and (ix) pay dividends and make other distributions from subsidiaries.

Credit Facilities

In December ~~2019,~~2021, we amended and restated our ~~$400.0~~$500 million, seven-year term loan facility due ~~April 30, 2025~~December 2028 (the “Term Loan”) under our credit agreement (the “Term Loan Agreement”), dated as of April 13, 2017 (as previously amended by the First Amendment thereto dated November 30, 2017 and by the Second Amendment thereto dated June 19, 2018). The amended Term Loan: (i) effects a repricing of the interest rate applicable to the term loans thereunder from LIBOR plus 2.50% to LIBOR plus 2.25% and (ii) replacesDecember 14, 2021 with Royal Bank of Canada ~~with Bank of America, N.A.~~ as the administrative agent and collateral agent thereunder. The amended Term Loan amortizes in quarterly principal payments of $1.25 million starting on March 31, 2022, with any remaining unpaid balances due on the maturity date of December 14, 2028. The Term Loan bears interest at either the base rate (which approximates the prime rate) or the Eurodollar rate, plus a margin of (A) 1.25% in the case of base rate loans or (B) 2.25% in the case of Eurodollar rate loans. Proceeds from the Term Loan were used to refinance and repay in full all amounts outstanding under our previous term loan agreement. We intend to use the remaining funds to pay for certain fees and expenses associated with the closing of the Term Loan and for general corporate purposes, including acquisitions and other growth initiatives. As of ~~September 30, 2021,~~March 31, 2022, we had ~~$198.9~~$492.3 million, net of unamortized debt issuance costs, due on our Term Loan. ~~The amended~~

Subject to certain exceptions, the Term Loan ~~also has~~will be subject to mandatory prepayments of (i) 100% of the net cash proceeds from issuances or incurrence of debt by the Company or any of its restricted subsidiaries (other than with respect to certain permitted indebtedness (excluding any refinancing indebtedness); (ii) 100% (with step-downs to 50% and 0% based on achievement of specified net leverage ratios) of the net cash proceeds from certain sales or dispositions of assets by the Company or any of its restricted subsidiaries in excess of a ~~margin~~certain amount and subject to reinvestment provision and certain other exception; and (iii) 50% (with step-downs to 25% and 0% based upon achievement of ~~1.25%~~specified net leverage ratios) of excess cash flow of the Company and its restricted subsidiaries in ~~the case~~excess of ~~base rate loans.~~

$15 million, subject to certain exceptions and limitations.

In ~~September 2019,~~February 2022, we ~~entered into a new~~amended and extended the term of our asset-based lending credit agreement (the “ABL Credit Agreement”). The ABL Credit Agreement ~~provides for an~~increased the commitment under the asset-based lending credit facility (the “ABL Revolver”) ofto $250.0 million from $200.0 million, and permits us to further increase the commitment amount up to ~~$200.0 million with~~$300.0 million. The amendment also extends the maturity date from September 26, 2024 to February 17, 2027. The ABL Revolver bears interest at either the base rate or the Secured Overnight Financing Rate ("Term SOFR"), at our election, plus a ~~five-year maturity, which replaced~~margin of 0.25% or 0.50% in the ~~Company’s previous revolving credit facility. Borrowing~~case of base rate loans or 1.25% or 1.50% for Term SOFR advances (in each case based on a measure of availability under the ABL ~~Revolver is based on a percentage~~Credit Agreement). The amendment also allows for modification of specified fees dependent upon achieving certain sustainability targets, in addition to making other modifications to the ~~value of certain assets securing the Company’s obligations and those of the subsidiary guarantors thereunder.~~ABL Credit Agreement. In connection with the ~~Amended and Restated~~ Term Loan Agreement, we entered into a ~~Second~~Third Amendment (the “Third Amendment”) to the ABL/Term Loan Intercreditor Agreement with Bank of America, N.A., as ABL Agent for the lenders under the ABL Credit Agreement, and Royal Bank of ~~America, N.A.,~~Canada as collateral agent under the Term Loan ~~Agent for the lenders under the Amended and Restated Term Loan.~~Agreement. Including outstanding letters of credit, our remaining availability under the ABL Revolver as of ~~September 30, 2021~~March 31, 2022 was ~~$155.7~~$205.7 million.

All of the obligations under the Term Loan and ABL Revolver are guaranteed by all of the Company’s existing restricted subsidiaries and will be guaranteed by the Company’s future restricted subsidiaries. Additionally, all obligations under the Term Loan and ABL Revolver, and the guarantees of those obligations, are secured by substantially all of the assets of the Company and the guarantors, subject to certain exceptions and permitted liens, including a first-priority security interest in such assets that constitute ABL Priority Collateral, as defined in the ABL Credit Agreement, and a ~~second-priority~~second- priority security interest in such assets that constitute Term Loan Priority Collateral, as defined in the Term Loan Agreement.

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The ABL Revolver bears interest at either the Eurodollar rate or the base rate (which approximated the prime rate), at the Company’s election, plus a margin of (A) 1.25% or 1.50% in the case of Eurodollar rate loans (based on a measure of availability under the ABL Credit Agreement) and (B) 0.25% or 0.50% in the case of base rate loans (based on a measure of availability under the ABL Credit Agreement).

The ABL Revolver also provides incremental revolving credit facility commitments of up to $50.0 million. The terms and conditions of any incremental revolving credit facility commitments must be no more favorable than the terms of the ABL Revolver. The ABL Revolver also allows for the issuance of letters of credit of up to ~~$75.0~~$100.0 million in aggregate and borrowing of swingline loans of up to ~~$20.0~~$25.0 million in aggregate.

The ABL Credit Agreement contains a financial covenant requiring the satisfaction of a minimum fixed charge coverage ratio of 1.0x in the event that we do not meet a minimum measure of availability under the ABL Revolver. The ABL Credit Agreement and the Term Loan Agreement contain restrictive covenants that, among other things, limit the ability of the Company and certain of our subsidiaries (subject to certain exceptions) to: (i) incur additional debt and issue preferred stock; (ii) pay dividends on, redeem or repurchase stock in an aggregate amount exceeding the greater of 2.0% of market capitalization per fiscal year or ~~in an aggregate amount exceeding~~ certain applicable restricted payment ~~baskets;~~basket amounts; (iii) prepay subordinated debt; (iv) create liens; (v) make specified types of investments; (vi) apply net proceeds from certain asset sales; (vii) engage in transactions with affiliates; (viii) merge, consolidate or sell substantially all of our assets; and (ix) pay dividends and make other distributions from subsidiaries.

At ~~September 30, 2021,~~March 31, 2022, we were in compliance with all applicable covenants under the Term Loan Agreement, ABL Credit Agreement and the Senior ~~Notes and we currently do not expect any covenant violations due to the impacts of COVID-19.~~

Notes.

Derivative Instruments

~~In August 2020,~~As of March 31, 2022, we ~~terminated our two existing~~had three interest rate ~~swaps and our forward~~swaps. One interest rate swap ~~and simultaneously entered into a new interest rate swap that~~ began July 30, 2021. The unrealized loss included in accumulated other comprehensive loss associated with the terminated swaps of $17.8 million at the time of termination will be amortized to interest expense over the course of the originally scheduled settlement dates of the terminated swaps. During the nine months ended September 30, 2021 ~~we amortized $2.4 million of the unrealized loss to interest expense, net. As of September 30, 2021, we had one interest rate swap with~~and has a fixed notional amount of $200.0 million, a fixed rate of 0.51% and a maturity date of April 15, 2030. This swap serves to hedge substantially all of the variable cash flows on our Term Loan until its maturity and if extended. The assets and liabilities associated with the interest rate swap are included in other long-term assets and other current liabilities on the Condensed Consolidated Balance Sheets at their fair value amounts as described in Note 9, Fair Value Measurements. In anticipation of future debt refinancing, on October 27, 2021, we entered intoWe also had two ~~new forward interest rate swap derivatives. These forward~~ interest rate swaps ~~will begin on~~that began December 31, ~~2021. Each swap has~~2021, each with a fixed notional amount of $100.0 million, a fixed rate of 1.37%, and a maturity date of December 15, 2028. Together, these three swaps serve to hedge $400.0 million of the variable cash flows on our variable rate Term Loan through maturity. The assets and liabilities associated with the forward interest rate swap are included in other non-current assets and other current liabilities on the Consolidated Balance Sheets at their fair value amounts as described in Note 9, Fair Value Measurements.

LIBOR is used as a reference rate for our Term Loan and our interest rate swap agreements we use to hedge our interest rate exposure. For more information on the discontinuance of LIBOR, see Item 3. Quantitative and Qualitative Disclosures about Market Risk below.

Vehicle and Equipment Notes

We have financing loan agreements with various lenders to provide financing for the purpose of purchasing or leasing vehicles and equipment used in the normal course of business. Vehicles and equipment purchased or leased under each financing arrangement serve as collateral for the note applicable to such financing arrangement. Regular payments are due under each note for a period of typically 60 consecutive months after the incurrence of the obligation. ~~As of September 30, 2021, we had $68.8 million due on these various loan agreements.~~

Total gross assets and respective outstanding loan balances relating to our ~~Master Loan~~master loan and ~~Equipment Agreements~~equipment agreements were ~~$135.4~~$139.3 million and ~~$132.2~~$67.4 million as of ~~September 30, 2021~~March 31, 2022 and ~~December 31, 2020, respectively. The net book value of assets under these agreements was $66.4~~$134.5 million and ~~$65.7~~$69.2 million as of ~~September 30, 2021 and~~ December 31, ~~2020,~~2021, respectively. Depreciation of assets held under these agreements is included within cost of sales on the Condensed Consolidated Statements of Operations and Comprehensive Income. ~~See Note 7, Long-term Debt, for more information regarding our Master Loan and Security Agreement, Master Equipment Agreement and Master Loan Agreements.~~

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Letters of Credit and Bonds

We may use performance bonds to ensure completion of our work on certain larger customer contracts that can span multiple accounting periods. Performance bonds generally do not have stated expiration dates; rather, we are released from the bonds as the contractual performance is completed. In addition, we occasionally use letters of credit and cash to secure our performance under our general liability and workers’ compensation insurance programs. Permit and license bonds are typically issued for one year and are required by certain municipalities when we obtain licenses and permits to perform work in their jurisdictions.

The following table summarizes our outstanding bonds, letters of credit and cash-collateral (in thousands):


	As of ~~September 30, 2021~~March 31, 2022
Performance bonds	$	~~59,891~~76,020
Insurance letters of credit and cash collateral	~~50,716~~50,433
Permit and license bonds	~~8,439~~7,934
Total bonds and letters of credit	$	~~119,046~~134,387

We have $4.3 million deposited ~~$5.3 million~~ into a trust ~~in 2020~~as of March 31, 2022 to serve as additional collateral for our workers’ compensation and general liability policies. This collateral can be converted to a letter of credit at our discretion and is therefore not considered to be restricted cash.

~~Historical cash flow information~~

C~~ash flows from operating activities~~

Net cash provided by operating activities was $116.5 million and $143.9 million for the nine months ended September 30, 2021 and 2020, respectively. Generally, the primary driver of our cash flows from operating activities is operating income adjusted for certain noncash items, offset by cash payments for taxes and interest on our outstanding debt. Our cash flows from operations can be impacted by the timing of our cash collections on sales and collection of retainage amounts. During the nine months ended September 30, 2021, we saw a decrease in cash from operations from the same period in 2020 primarily due to higher volume of inventory purchases to support our growth and increased pricing on inventory due to price inflation on materials.

We may see a reduction in cash inflows in future quarters depending on pandemic impacts on housing starts and commercial projects, as well as larger cash outflows to acquire materials at a premium. See “Key Factors Affecting Our Operating Results, COVID-19 Impacts” above for further information on short-term impacts to our cash from operations.

~~Cash flows from investing activities~~

~~Business Combinations~~. During the nine months ended September 30, 2021 and 2020, we made cash payments, net of cash acquired, of $94.5 million and $38.8 million, respectively, on various business combinations. The amount of cash paid is dependent on various factors, including the size and determined value of the business being acquired. See Note 16, Business Combinations, for more information regarding our acquisitions in 2021 and 2020.

~~Capital Expenditures~~. Total cash paid for property and equipment was $27.9 million and $25.5 million for the nine months ended September 30, 2021 and 2020, respectively, and was primarily related to purchases of vehicles and various equipment to support our growing operations. We expect to continue to support any increases in future net revenue through further capital expenditures. A majority of these capital expenditures were subsequently reimbursed via various vehicle and equipment notes payable, with related cash inflows shown in cash flows from financing activities.

~~Other~~. During the nine months ended September 30, 2020, we invested $0.8 million in short-term investments consisting primarily of corporate bonds and commercial paper and had $37.5 million in short-term investments mature. We have temporarily discontinued investment purchases due to the relatively low returns provided from current interest rates associated with traditional investments, but may resume such activity in the future.

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~~Cash flows from financing activities~~

We utilize our credit facilities and Senior Notes to support our operations and continuing acquisitions as well as fund our discretionary stock repurchase program and pay dividends. The largest cash outflow from financing activities during the nine months ended September 30, 2021 was payment of three quarterly dividends of $26.4 million. During the nine months ended September 30, 2021 and 2020, we received proceeds of $20.8 million and $17.8 million, respectively, from our fixed asset loans which serve to offset a significant portion of the capital expenditures included in cash outflows from investing activities as described above. We made payments on these fixed asset loans and various other notes payable of $19.7 million and $19.8 million during the nine months ended September 30, 2021 and 2020, respectively. We also made $1.6 million and $2.0 million in principal payments on our finance leases and paid $2.4 million and $3.9 million of acquisition-related obligations during the nine months ended September 30, 2021 and 2020, respectively. Lastly, we paid $15.8 million to repurchase 443 thousand shares of our common stock during the nine months ended September 30, 2020. We did not repurchase any shares of our common stock during the nine months ended September 30, 2021.

~~Contractual Obligations~~

~~We had no significant changes to our obligations during the nine months ended September 30, 2021.~~

Critical Accounting Policies and Estimates

Management’s discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of our consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. Certain accounting policies involve judgments and uncertainties to such an extent that there is a reasonable likelihood that materially different amounts could have been reported using different assumptions or under different conditions. We evaluate our estimates and assumptions on a regular basis. We base our estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of our assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates and assumptions used in preparation of our consolidated financial statements. There have been no significant changes to our critical accounting policies and estimates during the three months ended March 31, 2022 from those ~~previously~~ disclosed in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of our ~~2020~~2021 Form 10-K.

~~Recently Adopted~~Recent Accounting Pronouncements


~~Standard~~									~~Adoption~~
~~ASU 2021-01, Reference Rate Reform (Topic 848):Scope~~									~~This pronouncement clarifies the scope and application of ASU 2020-04, "Reference Rate Reform: Facilitation of the Effects of Reference Rate Reform on Financial Reporting (Topic 848)."We continue to evaluate the impact of Topic 848 and may apply other elections as applicable as additional changes in the market occur.~~
~~ASU 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes~~									This pronouncement simplifies the accounting for income taxes by removing certain exceptions to the general principles of Topic 740 and improves the consistent application of GAAP by clarifying and amending existing guidance. The adoption of this standard did not impact our financial statements or have a material effect on our disclosures.

For a description of recently issued and/or adopted accounting pronouncements, see Note 2, Significant Accounting Policies, to our audited consolidated financial statements included in the 2021 10-K.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws, including with respect to the housing market and the commercial market, industry conditions, our financial and business model, payments of dividends, the impact of COVID-19 on our business and end markets, the demand for our services and product offerings, trends in the commercial business, expansion of our national footprint and end markets, diversification of our products, our ability to grow and strengthen our market position, our ability to pursue and integrate value-enhancing acquisitions, our ability to improve sales and profitability, our efforts to navigate the material pricing environment, our ability to increase selling prices, our material and labor costs, supply chain and material constraints, the impact of COVID-19 on our financial results and expectations for demand for our services and our earnings in ~~2021 and~~ 2022. Forward-looking statements may generally be identified by the use of words such as “anticipate,” “believe,” “estimate,” “project,” “predict,” “possible,” “forecast,” “may,” “could,” “would,” “should,” “expect,” “intends,” “plan,” and “will” or, in each case, their negative, or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. 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. Any forward-looking statements that we make herein and in any future reports and statements are not guarantees of future performance, and actual results may differ materially from those expressed in or suggested by such forward-looking statements as a result of various factors, including, without limitation, the duration, effect and severity of the COVID-19 crisis; any recurrence of COVID-19, including through any new variant strains of the virus, and the related surges in positive COVID-19 cases; the adverse impact of the COVID-19 crisis on our business and financial results, our supply chain, the economy and the markets we serve; general economic and industry conditions; inflation and interest rates; the material price and supply environment; the timing of increases in our selling ~~prices~~prices; the risk that the Company may reduce, suspend or eliminate dividend payments in the future; and the factors discussed in the “Risk Factors” section of our ~~2020~~2021 Annual Report on Form 10-K and this Quarterly Report on Form 10-Q, as the same may be updated from time to time in our subsequent filings with the SEC. In addition, any future declaration of dividends will be subject to the final determination of our Board of Directors. Any forward-looking statement made by the Company in this

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report speaks only as of the date hereof. New risks and uncertainties arise from time to time and it is impossible for the Company to predict these events or how they may affect it. The Company has no obligation, and does not intend, to update any forward-looking statements after the date hereof, except as required by federal securities laws.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risks related to fluctuations in interest rates on our outstanding variable rate debt. As of ~~September 30, 2021,~~March 31, 2022, we had ~~$198.9~~$498.8 million outstanding on ~~the~~our Term Loan, ~~net~~gross of unamortized debt issuance costs, no outstanding borrowings on ~~the~~our ABL Revolver and no outstanding borrowings under finance leases subject to variable interest rates. As of ~~September 30, 2021,~~

March 31, 2022, we ~~have one~~had three interest rate ~~swap with a fixed notional amount of $200.0 million that serves~~swaps which, when combined, serve to hedge ~~substantially all~~$400.0 million of the variable cash flows on our Term Loan until its maturity ~~and if~~unless extended. As a result, ~~we had no~~total variable rate debt ~~that~~of $98.8 million was exposed to market risks as of ~~September 30, 2021.~~March 31, 2022. A hypothetical one percentage point increase (decrease) in interest rates on our variable rate debt would ~~not~~ increase (decrease) our annual interest expense. In anticipation of future debt refinancing, on October 27, 2021, we entered into two new forward interest rate swap derivatives. These forward interest rate swaps will begin on December 31, 2021. Each swap has a fixed notional amount of $100.0 million, a fixed rate of 1.37%, and a maturity date of December 15, 2028.expense by approximately $1.0 million. Our Senior Notes ~~accrued~~accrue interest at a fixed rate of 5.75%.

For variable rate debt, interest rate changes generally do not affect the fair value of the debt instrument, but do impact future earnings and cash flows, assuming other factors are held constant. We have not entered into and currently do not hold derivatives for trading or speculative purposes.

LIBOR is used as a reference rate for our Term Loan and our interest rate swap agreements we use to hedge our interest rate exposure. In 2017, the FCA announced that it intends to stop compelling banks to submit rates for the calculation of LIBOR after ~~2021, and it is unclear whether new methods of calculating LIBOR will be established.~~2021. The Intercontinental Exchange Benchmark Administration, the administrator of LIBOR, announced in March 2021 its intention to extend the publication of certain LIBOR settings, including the setting we use as a reference rate, to June 2023. It is unclear whether new methods of calculating LIBOR will be established after that date. Our Term Loan Agreement and 2021 interest rate swap agreements ~~and ABL Credit Agreement~~ include a provision related to the potential discontinuance of LIBOR to be replaced with one or more Secured Overnight Financing Rate (SOFR) values or another alternate benchmark rate. However, if LIBOR ceases to exist after 2023, the interest rates under the alternative rate could be higher than LIBOR. In January 2020, the FASB issued ASU 2020-04, Reference Rate Reform: Facilitation of the Effects of Reference Rate Reform on Financial Reporting (Topic 848) and in January 2021, the FASB subsequently issued ASU 2021-01, Reference Rate Reform - Scope, which clarified the scope and application of the original guidance. The purpose of this guidance is to provide relief for impacted areas as it relates to impending reference rate reform. We elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. We continue to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We have evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) as required by Exchange Act Rules 13a-15(e) and 15d-15(e). Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of ~~September 30, 2021.~~

March 31, 2022.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the three months ended ~~September 30, 2021~~March 31, 2022 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. We have not experienced any material impact to our internal controls over financial reporting despite the fact that some of the employees at our corporate office are working remotely at times due to the COVID-19 pandemic. We are continually monitoring and assessing the COVID-19 situation on our internal controls to minimize the impact on their design and operating effectiveness.

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings

See Part I, Item 1. Financial Statements, Note ~~15,~~16, Commitments and Contingencies – Other Commitments and Contingencies, for information about existing legal proceedings.

Item 1A. Risk Factors

As of the date of this report, there have been no material changes from the risk factors disclosed in our ~~2020~~2021 Form ~~10-K, other than below, which is an update to the risk factor included in the "Risks to our business from external threats" section of our 2020 Form~~ 10-K.

~~The COVID-19 pandemic has had an adverse effect on the U.S. economy as well as our business, financial condition, operating results and cash flows.~~

According to the World Health Organization (“WHO”), in December 2019 China reported a cluster of cases of pneumonia in Wuhan, Hubei Province later identified as a novel strain of coronavirus. In response, the WHO declared the situation a pandemic and the U.S. Secretary of Health and Human Services has declared a public health emergency. The COVID-19 pandemic has caused significant volatility, uncertainty and economic disruption. Many public health organizations and international, federal, state and local governments implemented measures to combat the spread of COVID-19 during 2020. Some of these measures included restrictions on movement such as quarantines, “stay-at-home” orders and social distancing ordinances and restricting or prohibiting outright some or all forms of commercial and business activity. While portions of the economy have reopened, there is still significant uncertainty surrounding the duration and scope of the pandemic, as well as its continued impact on the economy. We cannot predict if federal, state and local governments will implement additional restrictions, when restrictions currently in place will expire or whether restrictions currently in place will become more restrictive.

COVID-19 adversely affected many industries as well as the economies and financial markets of many countries, including the United States, causing a significant deceleration of economic activity during a portion of 2020. This slowdown reduced production, decreased the level of trade, and led to widespread corporate downsizing, causing a sharp increase in unemployment in 2020 from which the economy is still recovering. The continued impact of this pandemic on the U.S. and world economies is uncertain and these adverse impacts could worsen, impacting all segments of the global economy, and result in a significant recession or worse.

Our business has been adversely affected by the COVID-19 pandemic and the global response. The Company and its customers’ businesses were classified as “essential” businesses in most of the jurisdictions in which we operate, permitting us to continue operations in most of our markets when COVID-19-related shutdowns occurred during 2020. However, there can be no assurance that our operations will continue to be classified as “essential” in the future, or that we will not voluntarily limit or cease operations in one or more of our markets if we believe it is in our best interest. For example, during portions of March, April and May of 2020, we saw a temporary but significant reduction in activity in our branches located in seven states and the Bay Area of California, which collectively accounted for 10% of our net revenue during the year ended December 31, 2019. The reduced activity in these areas was attributable to construction being temporarily deemed non-essential during that time period. While operations have resumed to normal levels in all of these areas, future mandatory shutdowns or reductions in operations could have a material adverse effect on our business. During 2020, we laid off or furloughed approximately 600 employees in areas where construction was not deemed “essential.” We have since rehired or brought back substantially all of those employees, but we may need to layoff or furlough other employees in the future. Any employee layoffs or furloughs associated with future branch closures or slowdowns are assumed to be temporary in nature but could result in long-term labor shortages in certain markets if we cannot rehire these employees once operations resume.

While the U.S. housing industry has quickly rebounded from the initial onset of the pandemic in 2020, the COVID-19 pandemic may have a material adverse impact on our customers and the homebuilding industry in the future, as it has reduced employment levels and may adversely affect consumer spending or consumer confidence, which would typically decrease demand for homes. In the commercial sector, we have experienced delays in the onset of certain large-scale infrastructure programs due to declining need for such structures and/or project funding declines. Commercial projects could decline in the future if consumer behaviors change in the wake of COVID-19 disruptions to the economy and changes to our general ways of life. For example, reduced demand for office buildings, decreased airport traffic or decreased usage of sports arenas could impact our commercial end market.

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The industry is currently experiencing manufacturer supply constraints for many of the materials we install due to an unanticipated increase in demand as well as manufacturing curtailments due to COVID-19. These factors have affected our ability to complete installation work for certain customers during 2021 and have also required us to source many of the materials we install from distributors and retail outlets at a premium. These higher costs have had an adverse impact on our financial condition, operating results and cash flows. For example, we estimate our cost of sales for the three and nine months ended September 30, 2021 are approximately ~~$2.0 million~~ and $7.0 million higher than they would have been if we purchased these materials through regular channels. We anticipate this trend of higher materials costs as a result of disruptions caused by the COVID-19 pandemic to continue into 2022.

Our management is focused on mitigating the impact of COVID-19 on our business and the risk to our employees, which has partially diverted management’s attention away from normal business operations. Additionally, we have taken a number of precautionary measures intended to mitigate the impact of COVID-19 on our business and the risk to our employees, including increasing the frequency of regular cleaning and disinfecting processes at our facilities, adhering to social distancing protocols, limiting the number of workers on jobsites, temporarily suspending non-essential air travel and periodically allowing employees to work remotely when possible, which could adversely affect our business. Despite these measures, our key management personnel and/or a portion of our installer base could become temporarily or permanently incapacitated by COVID-19 or related complications. This could result in a material adverse impact on our business, financial condition, operating results and cash flows. While these and other measures we may take are believed to be temporary, they may continue until the pandemic is contained or indefinitely and could increase costs and amplify existing risks or introduce new risks that could adversely affect our business, including, but not limited to, internal controls and cybersecurity risks. Additionally, OSHA issued an ETS on November 4th, 2021 requiring all U.S. private businesses with 100 or more employees to ensure that their employees are fully vaccinated or require unvaccinated workers to undergo weekly COVID-19 testing. This ETS may be subject to numerous legal challenges. At this time, we cannot predict the impact of the ETS on us and the degree to which our business and results of operations may be adversely affected.

Considerable uncertainty still surrounds COVID-19 and its potential effects, and the extent of and effectiveness of any responses taken on a local, national and global level. To date, vaccines have been developed and treatments have improved, but it is too soon to know if they will protect against a worsening of the pandemic due to new variants of the virus or other factors, or to prevent COVID-19 from becoming endemic. While we expect the COVID-19 pandemic and related events may have a negative effect on us in the future, the full extent and scope of the impact on our business and industry, as well as national, regional and global markets and economies, depends on numerous evolving factors that we may not be able to accurately predict, including the duration and scope of the pandemic, additional government actions taken in response to the pandemic, the impact on construction activity and demand for homes (based on employment levels, consumer spending and consumer confidence). Accordingly, our ability to conduct our business in the manner previously or currently expected could be materially and negatively affected, any of which could have a material adverse impact on our business, financial condition, operating results and cash flows.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table shows the stock repurchase activity ~~including shares surrendered by employees in connection with restricted stock awards,~~ for the three months ended ~~September 30, 2021:~~March 31, 2022:

Total Number
of Shares
Purchased (1)
Average
Price Paid
Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
Approximate Dollar Value of Shares that May Yet Be Purchased under the Plans or Programs (2)
July 1 - 31, 2021 206 $ 116.5 — —
August 1 - 31, 2021 — — — —
September 1 - 30, 2021 — — — —
206 $ 116.5 — $ 100.0 million


	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased under the Plans or Programs (1)
January 1 - 31, 2022	—	—		—	—
February 1 - 28, 2022	—	—		—	—
March 1 - 31, 2022	510,943	$	97.57	510,943	$	150.1	million
	510,943	$	97.57	510,943	$	150.1	million

(1)Represents shares surrendered to the Company by employees to satisfy tax withholding obligations arising in connection with the vesting of 851 shares of restricted stock awarded under our 2014 Omnibus Incentive Plan.

~~(2)~~On February 26, 2018, our board of directors authorized a $50 million stock repurchase program effective March 2, 2018 and on October 31, 2018, our board of directors approved an additional stock repurchase program, effective November 6, 2018, pursuant to which we may purchase up to an additional $100 million of our outstanding common stock. On February 20, 2020, our board of directors approved extending the current stock repurchase program to March 1, 2021. On

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~~February 22, 2021,~~24, 2022 our board of directors authorized an extension of our stock repurchase program through March 1, ~~2022~~2023 and concurrently authorized an increase in ~~the~~ total amount of our outstanding common stock we can purchase under the extended program up to ~~$100.0~~$200.0 million. We repurchased $49.9 million shares of common stock under our stock repurchase program during the three months ended March 31, 2022. As a result of this extension and repurchased stock, we have ~~$100.0~~$150.1 million remaining on our stock repurchase program as of the date of filing of this Form 10-Q. For further information about our stock repurchase program, see Note ~~11,~~12, Stockholder's Equity. ~~We did not repurchase any shares under our stock repurchase program during the nine months ended September 30, 2021.~~

Item 3. Defaults Upon Senior Securities

There have been no material defaults in senior securities.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

~~None.~~ 36

Item 6. Exhibits

(a)(3) Exhibits

The following exhibits are being filed as part of this Quarterly Report on Form 10-Q:


Exhibit Number						Description

10.1						Amendment No. 3 to Credit Agreement, dated February 17, 2022, by and among Installed Building Products, Inc., the financial institutions party thereto as lenders and Bank of America N.A., as administrative agent, incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed on February 18, 2022.

21.1*†						List of Subsidiaries of Installed Building Products, Inc.

31.1*						CEO Certification pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*						CFO Certification pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*						CEO Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2*						CFO Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101**						The following financial statements from the Company's Quarterly Report on Form 10-Q for the period ended ~~September 30, 2021,~~March 31, 2022, formatted in inline XBRL, include: (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations and Comprehensive Income, (iii) Condensed Consolidated Statements of Stockholders’ Equity, (iv) Condensed Consolidated Statements of Cash Flows and (v) the Notes to the Condensed Consolidated Financial Statements.

104**						Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101).

* Filed herewith.

** ��Submitted electronically with the report.

† Corrected version of exhibit previously filed as Exhibit 21.1 to the Company's 2021 Form 10-K, as updated to March 31, 2022.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: ~~November 4, 2021~~May 5, 2022


INSTALLED BUILDING PRODUCTS, INC.

By:						/s/ Jeffrey W. Edwards
						Jeffrey W. Edwards
						President and Chief Executive Officer

By:						/s/ Michael T. Miller
						Michael T. Miller
						Executive Vice President and Chief Financial Officer


Delaware									45-3707650
(State or other jurisdiction of incorporation or organization)									(I.R.S. Employer Identification No.)

495 South High Street, Suite 50
Columbus, Ohio									43215
(Address of principal executive offices)									(Zip Code)


	September 30,		December 31,
	2021		2020
ASSETS
Current assets
Cash and cash equivalents	$	191,435	$	231,520

Accounts receivable (less allowance for credit losses of $8,784 and $8,789 at September 30, 2021 and December 31, 2020, respectively)	306,590		266,566
Inventories	118,093		77,179
Prepaid expenses and other current assets	56,803		48,678
Total current assets	672,921		623,943
Property and equipment, net	104,977		104,022
Operating lease right-of-use assets	61,028		53,766
Goodwill	257,106		216,870
Customer relationships, net	133,759		108,504
Other intangibles, net	70,341		62,889
Other non-current assets	26,996		17,682
Total assets	$	1,327,128	$	1,187,676
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt	$	24,557	$	23,355
Current maturities of operating lease obligations	21,278		18,758
Current maturities of finance lease obligations	1,780		2,073
Accounts payable	119,583		101,462
Accrued compensation	60,623		45,876
Other current liabilities	56,970		44,951
Total current liabilities	284,791		236,475
Long-term debt	542,517		541,957
Operating lease obligations	39,155		34,413
Finance lease obligations	3,038		2,430
Deferred income taxes	9,035		35
Other long-term liabilities	55,866		53,184
Total liabilities	934,402		868,494
Commitments and contingencies (Note 15)	0		0
Stockholders’ equity
Preferred Stock; $0.01 par value: 5,000,000 authorized and 0 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively	—		—
Common stock; $0.01 par value: 100,000,000 authorized, 33,271,659 and 33,141,879 issued and 29,707,155 and 29,623,272 shares outstanding at September 30, 2021 and December 31, 2020, respectively	333		331
Additional paid in capital	208,535		199,847
Retained earnings	332,087		269,420
Treasury stock; at cost: 3,564,504 and 3,518,607 shares at September 30, 2021 and December 31, 2020, respectively	(147,228)		(141,653)
Accumulated other comprehensive loss	(1,001)		(8,763)
Total stockholders’ equity	392,726		319,182
Total liabilities and stockholders’ equity	$	1,327,128	$	1,187,676


	March 31,		December 31,
	2022		2021
ASSETS
Current assets
Cash and cash equivalents	$	217,434	$	333,485
Investments	49,980		—
Accounts receivable (less allowance for credit losses of $8,590 and $8,717 at March 31, 2022 and December 31, 2021, respectively)	345,586		312,767
Inventories	160,023		143,039
Prepaid expenses and other current assets	69,205		70,025
Total current assets	842,228		859,316
Property and equipment, net	107,817		105,933
Operating lease right-of-use assets	69,033		69,871��
Goodwill	325,347		322,517
Customer relationships, net	173,868		178,264
Other intangibles, net	84,092		86,157
Other non-current assets	50,364		31,144
Total assets	$	1,652,749	$	1,653,202
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt	$	30,668	$	30,839
Current maturities of operating lease obligations	23,505		23,224
Current maturities of finance lease obligations	1,801		1,747
Accounts payable	150,643		132,705
Accrued compensation	56,639		50,964
Other current liabilities	64,272		68,090
Total current liabilities	327,528		307,569
Long-term debt	829,638		832,193
Operating lease obligations	45,091		46,075
Finance lease obligations	3,254		3,297
Deferred income taxes	11,242		4,819
Other long-term liabilities	45,765		42,409
Total liabilities	1,262,518		1,236,362
Commitments and contingencies (Note 16)	0		0
Stockholders’ equity
Preferred Stock; $0.01 par value: 5,000,000 authorized and 0 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively	—		—
Common stock; $0.01 par value: 100,000,000 authorized, 33,351,843 and 33,271,659 issued and 29,275,592 and 29,706,401 shares outstanding at March 31, 2022 and December 31, 2021, respectively	334		333
Additional paid in capital	218,642		211,430
Retained earnings	350,475		352,543
Treasury stock; at cost: 4,076,251 and 3,565,258 shares at March 31, 2022 and December 31, 2021, respectively	(197,104)		(147,239)
Accumulated other comprehensive income (loss)	17,884		(227)
Total stockholders’ equity	390,231		416,840
Total liabilities and stockholders’ equity	$	1,652,749	$	1,653,202


		Three months ended September 30,				Nine months ended September 30,					Three months ended March 31,
		2021		2020		2021		2020			2022		2021
Net revenue	Net revenue	$	509,763	$	420,486	$	1,434,927	$	1,211,756	Net revenue	$	587,492	$	437,066
Cost of sales	Cost of sales	353,879		288,839		1,001,730		836,710		Cost of sales	415,089		311,639
Gross profit	Gross profit	155,884		131,647		433,197		375,046		Gross profit	172,403		125,427
Operating expenses	Operating expenses									Operating expenses
Selling	Selling	24,188		20,843		67,677		60,209		Selling	25,192		20,858
Administrative	Administrative	68,056		58,240		199,607		177,495		Administrative	79,144		65,077
Amortization	Amortization	9,224		6,974		26,798		20,378		Amortization	11,097		8,396
Operating income	Operating income	54,416		45,590		139,115		116,964		Operating income	56,970		31,096
Other expense, net	Other expense, net									Other expense, net
Interest expense, net	Interest expense, net	7,687		7,564		22,781		22,679		Interest expense, net	10,600		7,574
Other (income) expense		(483)		176		(494)		305
Other expense										Other expense	145		81
Income before income taxes	Income before income taxes	47,212		37,850		116,828		93,980		Income before income taxes	46,225		23,441
Income tax provision	Income tax provision	12,320		9,773		27,432		24,578		Income tax provision	12,403		6,150
Net income	Net income	$	34,892	$	28,077	$	89,396	$	69,402	Net income	$	33,822	$	17,291
Other comprehensive income (loss), net of tax:
Net change on cash flow hedges, net of tax (provision) benefit of $(454) and $(408) for the three months ended September 30, 2021 and 2020, respectively, and $(2,638) and $1,582 for the nine months ended September 30, 2021 and 2020, respectively		1,292		1,176		7,762		(4,582)
Other comprehensive income, net of tax:										Other comprehensive income, net of tax:
Net change on cash flow hedges, net of tax provision of $6,430 and $3,428 for the three months ended March 31, 2022 and 2021, respectively										Net change on cash flow hedges, net of tax provision of $6,430 and $3,428 for the three months ended March 31, 2022 and 2021, respectively	18,111		10,157
Comprehensive income	Comprehensive income	$	36,184	$	29,253	$	97,158	$	64,820	Comprehensive income	$	51,933	$	27,448
Basic net income per share		$	1.19	$	0.95	$	3.05	$	2.35
Diluted net income per share		$	1.18	$	0.95	$	3.02	$	2.33
Earnings Per Share:										Earnings Per Share:
Basic										Basic	$	1.15	$	0.59
Diluted										Diluted	$	1.14	$	0.58
Weighted average shares outstanding:	Weighted average shares outstanding:									Weighted average shares outstanding:
Basic	Basic	29,404,257		29,478,816		29,355,538		29,549,460		Basic	29,302,396		29,286,044
Diluted	Diluted	29,620,748		29,698,028		29,615,162		29,737,716		Diluted	29,580,731		29,613,484

Cash dividends declared per share	Cash dividends declared per share	$	0.30	$	—	$	0.90	$	—	Cash dividends declared per share	$	1.22	$	0.30


	Common Stock			Additional Paid In Capital		Retained Earnings		Treasury Stock			Accumulated Other Comprehensive Loss		Stockholders’ Equity
	Shares	Amount						Shares	Amount
BALANCE - July 1, 2020	33,124,237	$	331	$	195,288	$	213,506	(3,325,049)	$	(123,488)	$	(12,901)	$	272,736
Net income						28,077							28,077
Issuance of common stock awards to employees	3,073	0		0									—
Surrender of common stock awards								(1,726)	0				—
Share-based compensation expense				2,094									2,094
Share-based compensation issued to directors	0			104									104
Other comprehensive income, net of tax											1,176		1,176
BALANCE - September 30, 2020	33,127,310	$	331	$	197,486	$	241,583	(3,326,775)	$	(123,488)	$	(11,725)	$	304,187

	Common Stock			Additional Paid In Capital		Retained Earnings		Treasury Stock			Accumulated Other Comprehensive Loss		Stockholders’ Equity
	Shares	Amount						Shares	Amount
BALANCE - July 1, 2021	33,264,517	$	333	$	205,597	$	306,107	(3,562,942)	$	(147,204)	$	(2,293)	$	362,540
Net income						34,892							34,892

Issuance of common stock awards to employees	7,142	0		0									—
Surrender of common stock awards								(1,562)	(24)				(24)
Share-based compensation expense				2,812									2,812
Share-based compensation issued to directors	0			126									126
Dividends Declared ($0.30 per share)						(8,912)							(8,912)

Other comprehensive income, net of tax											1,292		1,292
BALANCE - September 30, 2021	33,271,659	$	333	$	208,535	$	332,087	(3,564,504)	$	(147,228)	$	(1,001)	$	392,726


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



PART I – FINANCIAL INFORMATION			1
Item 1. Financial Statements			1
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			2725
Item 3. Quantitative and Qualitative Disclosures About Market Risk			3834
Item 4. Controls and Procedures			3835
PART II – OTHER INFORMATION			3936
Item 1. Legal Proceedings			3936
Item 1A. Risk Factors			3936
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			4036
Item 3. Defaults Upon Senior Securities			4136
Item 4. Mine Safety Disclosures			4136
Item 5. Other Information			4136
Item 6. Exhibits			4137
SIGNATURES			4238


	September 30, 2021		December 31, 2020
Contract assets	$	32,265	$	24,334
Contract liabilities	(10,611)		(8,965)


	September 30, 2021		December 31, 2020
Costs incurred on uncompleted contracts	$	216,929	$	169,544
Estimated earnings	112,854		90,737
Total	329,783		260,281
Less: Billings to date	301,626		240,665
Net under billings	$	28,157	$	19,616


	March 31, 2022		December 31, 2021
Contract assets	$	40,160	$	32,679
Contract liabilities	(14,756)		(14,153)


	September 30, 2021		December 31, 2020
Costs and estimated earnings in excess of billings on uncompleted contracts (contract assets)	$	32,265	$	24,334
Billings in excess of costs and estimated earnings on uncompleted contracts (contract liabilities)	(4,108)		(4,718)
Net under billings	$	28,157	$	19,616


Balance as of January 1, ~~2021~~2022	$	~~8,789~~8,717
Current period provision	~~1,135~~653
Recoveries collected and additions	~~506~~89
Amounts written off	~~(1,646)~~(869)
Balance as of ~~September 30, 2021~~March 31, 2022	$	~~8,784~~8,590


	Goodwill (Gross)		Accumulated Impairment Losses		Goodwill (Net)
January 1, 2021	$	286,874	$	(70,004)	$	216,870
Business Combinations	40,206		—		40,206
Other	30		—		30
September 30, 2021	$	327,110	$	(70,004)	$	257,106


	Installation		Other		Consolidated

Goodwill (gross) - January 1, 2022, after change in reporting units	$	331,782	$	60,739	$	392,521
Business combinations	2,830		—		2,830

Goodwill (gross) - March 31, 2022	334,612		60,739		395,351
Accumulated impairment losses	(70,004)		—		(70,004)
Goodwill (net) - March 31, 2022	$	264,608	$	60,739	$	325,347


	Three months ended March 31,
	2022				2021
Installation:
Insulation	$	364,943	63	%	$	278,568	63	%
Waterproofing	29,022		5	%	29,949		7	%
Shower doors, shelving and mirrors	36,340		6	%	31,433		7	%
Garage doors	35,979		6	%	24,439		6	%
Rain gutters	23,546		4	%	19,003		4	%
Fireproofing/firestopping	15,922		3	%	12,435		3	%
Window blinds	13,058		2	%	11,534		3	%
Other building products	42,821		7	%	24,817		6	%
Net revenue, Installation	$	561,631	96	%	$	432,178	99	%

Other (1)	25,861		4	%	4,888		1	%
Net revenue, as reported	$	587,492	100	%	$	437,066	100	%


	Three months ended September 30,								Nine months ended September 30,
	2021				2020				2021				2020
Insulation	$	324,360	64	%	$	268,292	64	%	$	921,181	64	%	$	779,045	64	%
Waterproofing	34,514		7	%	33,272		8	%	98,727		7	%	89,855		7	%
Shower doors, shelving and mirrors	35,411		7	%	29,282		7	%	101,830		7	%	85,199		7	%
Garage doors	26,951		5	%	24,001		6	%	77,434		5	%	68,655		6	%
Rain gutters	21,807		4	%	17,295		4	%	62,270		4	%	41,942		4	%
Fireproofing/firestopping(1)	17,684		3	%	11,047		2	%	43,156		3	%	36,325		3	%
Window blinds	13,197		3	%	12,166		3	%	37,398		3	%	34,651		3	%
Other building products	35,839		7	%	25,131		6	%	92,931		7	%	76,084		6	%
Net revenue	$	509,763	100	%	$	420,486	100	%	$	1,434,927	100	%	$	1,211,756	100	%


	As of September 30,						As of December 31,
	2021						2020
	Gross Carrying Amount		Accumulated Amortization		Net Book Value		Gross Carrying Amount		Accumulated Amortization		Net Book Value
Amortized intangibles:
Customer relationships	$	240,756	$	106,997	$	133,759	$	197,641	$	89,137	$	108,504
Covenants not-to-compete	24,973		15,628		9,345		20,309		13,436		6,873
Trademarks and tradenames	89,804		31,164		58,640		79,657		27,245		52,412
Backlog	20,425		18,069		2,356		18,847		15,243		3,604
	$	375,958	$	171,858	$	204,100	$	316,454	$	145,061	$	171,393


	As of March 31,						As of December 31,
	2022						2021
	Gross Carrying Amount		Accumulated Amortization		Net Book Value		Gross Carrying Amount		Accumulated Amortization		Net Book Value
Amortized intangibles:
Customer relationships	$	295,239	$	121,371	$	173,868	$	292,113	$	113,849	$	178,264
Covenants not-to-compete	28,091		17,357		10,734		27,717		16,471		11,246
Trademarks and tradenames	104,142		34,248		69,894		103,007		32,623		70,384
Backlog	23,725		20,261		3,464		23,724		19,197		4,527
	$	451,197	$	193,237	$	257,960	$	446,561	$	182,140	$	264,421


Remainder of 2021	$	9,509
2022	34,971
2023	30,650
2024	27,136
2025	21,731
Thereafter	80,103


Remainder of 2022	$	31,315
2023	38,042
2024	34,122
2025	27,800
2026	23,842
Thereafter	102,839


Remainder of 2022	$	23,783
2023	25,722
2024	20,012
2025	16,560
2026	9,017
Thereafter	775,191


Remainder of 2021	$	6,425
2022	23,548
2023	18,477
2024	12,684
2025	209,147
Thereafter	301,670


		As of September 30,			As of December 31,
(in thousands)	Classification	2021			2020
Assets
Non-Current
Operating	Operating lease right-of-use assets	$	61,028		$	53,766
Finance	Property and equipment, net	5,019			4,946
Total lease assets		$	66,047		$	58,712
Liabilities
Current
Operating	Current maturities of operating lease obligations	$	21,278		$	18,758
Financing	Current maturities of finance lease obligations	1,780			2,073
Non-Current
Operating	Operating lease obligations	39,155			34,413
Financing	Finance lease obligations	3,038			2,430
Total lease liabilities		$	65,251		$	57,674
Weighted-average remaining lease term:
Operating leases		3.9 years			4.1 years
Finance leases		3.2 years			2.6 years
Weighted-average discount rate:
Operating leases		3.37		%	3.67		%
Finance leases		4.95		%	5.08		%


	Finance Leases		Operating Leases
			Related Party		Other		Total Operating
Remainder of 2021	$	661	$	342	$	5,696	$	6,038
2022	1,751		1,347		20,432		21,779
2023	1,278		906		14,878		15,784
2024	869		645		8,112		8,757
2025	501		519		4,481		5,000
Thereafter	200		—		7,496		7,496
Total minimum lease payments	5,260		$	3,759	$	61,095	64,854
Less: Amounts representing executory costs	(36)
Less: Amounts representing interest	(406)						(4,421)
Present value of future minimum lease payments	4,818						60,433
Less: Current obligation under leases	(1,780)						(21,278)
Long-term lease obligations	$	3,038					$	39,155


	As of September 30, 2021								As of December 31, 2020
	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Financial assets:
Cash equivalents	$	166,473	$	166,473	$	—	$	—	$	170,398	$	170,398	$	—	$	—
Derivative financial instruments	13,567		—		13,567		—		5,130		—		5,130		—
Total financial assets	$	180,040	$	166,473	$	13,567	$	—	$	175,528	$	170,398	$	5,130	$	—
Financial liabilities:
Contingent consideration	$	8,591	$	—	$	—	$	8,591	$	4,004	$	—	$	—	$	4,004
Derivative financial instruments	774		—		774		—		324		—		324		—
Total financial liabilities	$	9,365	$	—	$	774	$	8,591	$	4,328	$	—	$	324	$	4,004


	As of March 31, 2022								As of December 31, 2021
	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Financial assets:
Cash equivalents	$	201,112	$	201,112	$	—	$	—	$	258,055	$	258,055	$	—	$	—
Derivative financial instruments	36,644		—		36,644		—		14,830		—		14,830		—
Total financial assets	$	237,756	$	201,112	$	36,644	$	—	$	272,885	$	258,055	$	14,830	$	—
Financial liabilities:
Contingent consideration	$	6,160	$	—	$	—	$	6,160	$	11,170	$	—	$	—	$	11,170
Derivative financial instruments	—		—		—		—		1,937		—		1,937		—
Total financial liabilities	$	6,160	$	—	$	—	$	6,160	$	13,107	$	—	$	1,937	$	11,170


Contingent consideration liability - January 1, ~~2021~~2022	$	~~4,004~~11,170
Preliminary purchase price	~~6,000~~910
Fair value adjustments	~~(296)~~(46)
Accretion in value	~~845~~116
~~Amounts cancelled~~Settlement adjustments	~~(1,036)~~(505)
Amounts paid to sellers	~~(926)~~(5,485)
Contingent consideration liability - ~~September 30, 2021~~March 31, 2022	$	~~8,591~~6,160


	As of September 30, 2021				As of December 31, 2020
	Carrying Value		Fair Value		Carrying Value		Fair Value

Senior Notes(1)	$	300,000	$	316,197	$	300,000	$	320,013


	Installation		Other		Eliminations		Consolidated
Revenue	$	561,631	$	26,650	$	(789)	$	587,492
Cost of sales (exclusive of depreciation and amortization shown separately below)	385,692		19,373		(609)		404,456
Adjusted gross profit	175,939		7,277		(180)		183,036
Depreciation and amortization							10,633
Gross profit, as reported							172,403
Selling							25,192
Administrative							79,144
Amortization							11,097
Operating income							56,970
Interest expense, net							10,600
Other expense							145
Income before income taxes							$	46,225


Declaration Date	Record Date	Payment Date	Dividend Per Share		Amount Declared		Amount Paid

2/24/2022	3/15/2022	3/31/2021	$	0.90	$	26,585	$	26,242
2/24/2022	3/15/2022	3/31/2021	0.315		9,305		9,184


	September 30, 2021		December 31, 2020
Included in other current liabilities	$	6,775	$	7,703
Included in other long-term liabilities	12,490		11,986
	$	19,265	$	19,689


	September 30, 2021		December 31, 2020
Included in other non-current assets	$	2,082	$	1,854


	Common Stock Awards			Performance-Based Stock Awards			Performance-Based Restricted Stock Units
	Awards	Weighted Average Grant Date Fair Value Per Share		Awards	Weighted Average Grant Date Fair Value Per Share		Units	Weighted Average Grant Date Fair Value Per Share
Nonvested awards/units at December 31, 2020	231,280	$	48.05	166,961	$	59.97	13,273	$	36.51
Granted	55,815	124.88		42,449	123.32		8,470	126.89
Vested	(84,254)	48.81		(64,525)	52.79		(12,952)	36.51
Forfeited/Cancelled	(2,448)	57.85		—	—		(488)	67.44
Nonvested awards/units at September 30, 2021	200,393	$	69.01	144,885	$	81.73	8,303	$	126.89


	~~As of September 30, 2021~~
	Unrecognized Compensation Expense on Unvested Awards		Weighted Average Remaining Vesting Period
~~Common Stock Awards~~	$	~~9,201~~	~~1.8 years~~
~~Performance-Based Stock Awards~~	~~6,082~~		~~1.7 years~~
~~Performance-Based Restricted Stock Units~~	~~553~~		~~0.5 years~~
~~Total unrecognized compensation expense related to unvested awards~~	$	~~15,836~~


	September 30, 2021		December 31, 2020
Insurance receivables and indemnification assets for claims under fully insured policies	$	3,969	$	4,400
Insurance receivables for claims that exceeded the stop loss limit	327		328
Total insurance receivables and indemnification assets included in other non-current assets	$	4,296	$	4,728


									Three months ended March 31, 2022
2022 Acquisitions	Date	Acquisition Type	Cash Paid		Seller Obligations		Total Purchase Price		Revenue		Net Income
Pisgah	03/01/2022	Share	$	8,050	$	1,878	$	9,928	$	915	$	97


									Three months ended September 30, 2021				Nine months ended September 30, 2021
2021 Acquisitions	Date	Acquisition Type	Cash Paid		Seller Obligations		Total Purchase Price		Revenue		Net Income (Loss)		Revenue		Net Income (Loss)
IWI	03/01/2021	Share	$	42,098	$	5,959	$	48,057	$	10,556	$	590	$	24,315	$	2,068
Alert	4/13/2021	Asset	5,850		2,980		8,830		4,764		2		8,890		147
Alpine	4/19/2021	Asset	7,945		2,208		10,153		3,045		263		4,996		216
GCP	6/7/2021	Asset	9,700		1,427		11,127		2,624		(152)		3,270		(118)
Five Star	9/13/2021	Share	26,308		5,466		31,774		1,243		25		1,243		25
Other	Various	Asset	4,240		947		5,187��		956		(29)		1,252		(43)
			$	96,141	$	18,987	$	115,128	$	23,188	$	699	$	43,966	$	2,295


									Three months ended September 30, 2020				Nine months ended September 30, 2020
2020 Acquisitions	Date	Acquisition Type	Cash Paid		Seller Obligations		Total Purchase Price		Revenue		Net Income (Loss)		Revenue		Net Income (Loss)
Royals	02/29/2020	Asset	$	7,590	$	2,500	$	10,090	$	2,843	$	279	$	6,650	$	628
Energy One	8/10/2020	Asset	13,200		1,595		14,795		2,853		(202)		2,853		(202)
Storm Master	8/31/2020	Asset	13,000		1,336		14,336		2,055		85		2,055		85
Other	Various	Asset	5,035		1,538		6,573		1,879		(252)		2,643		(291)
			$	38,825	$	6,969	$	45,794	$	9,630	$	(90)	$	14,201	$	220