Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Oct. 30, 2020 | |
Cover page. | ||
Entity Registrant Name | TopBuild Corp | |
Entity Central Index Key | 0001633931 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-36870 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 47-3096382 | |
Entity Address, Address Line One | 475 North Williamson Boulevard | |
Entity Address, City or Town | Daytona Beach | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 32114 | |
City Area Code | 386 | |
Local Phone Number | 304-2200 | |
Title of 12(b) Security | Common stock, par value $0.01 per share | |
Trading Symbol | BLD | |
Security Exchange Name | NYSE | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 33,024,441 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 315,338 | $ 184,807 |
Receivables, net of an allowance for credit losses of $8,122 at September 30, 2020, and allowance for doubtful accounts of $4,854 at December 31, 2019 | 436,548 | 428,844 |
Inventories, net | 142,517 | 149,078 |
Prepaid expenses and other current assets | 32,101 | 17,098 |
Total current assets | 926,504 | 779,827 |
Right of use assets | 81,692 | 87,134 |
Property and equipment, net | 172,099 | 178,080 |
Goodwill | 1,379,721 | 1,367,918 |
Other intangible assets, net | 172,390 | 181,122 |
Deferred tax assets, net | 4,397 | 4,259 |
Other assets | 10,998 | 5,623 |
Total assets | 2,747,801 | 2,603,963 |
Current liabilities: | ||
Accounts payable | 311,696 | 307,970 |
Current portion of long-term debt | 23,247 | 34,272 |
Accrued liabilities | 117,456 | 98,418 |
Short-term lease liabilities | 32,747 | 36,094 |
Total current liabilities | 485,146 | 476,754 |
Long-term debt | 688,870 | 697,955 |
Deferred tax liabilities, net | 173,597 | 175,263 |
Long-term portion of insurance reserves | 49,927 | 45,605 |
Long-term lease liabilities | 52,672 | 54,010 |
Other liabilities | 15,995 | 1,487 |
Total liabilities | 1,466,207 | 1,451,074 |
Commitments and contingencies | ||
Equity: | ||
Preferred stock, $0.01 par value: 10,000,000 shares authorized; 0 shares issued and outstanding at September 30, 2020 and December 31, 2019 | ||
Common stock, $0.01 par value: 250,000,000 shares authorized; 39,030,810 shares issued and 33,053,795 outstanding at September 30, 2020, and 38,884,530 shares issued and 33,489,769 outstanding at December 31, 2019 | 389 | 388 |
Treasury stock, 5,977,015 shares at September 30, 2020, and 5,394,761 shares at December 31, 2019, at cost | (380,667) | (330,018) |
Additional paid-in capital | 855,972 | 849,657 |
Retained earnings | 805,900 | 632,862 |
Total equity | 1,281,594 | 1,152,889 |
Total liabilities and equity | $ 2,747,801 | $ 2,603,963 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Allowance for doubtful accounts | $ 8,122 | $ 4,854 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares, issued | 0 | 0 |
Preferred stock, shares, outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 39,030,810 | 38,884,530 |
Common stock, shares outstanding | 33,053,795 | 33,489,769 |
Treasury stock, shares at cost | 5,977,015 | 5,394,761 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
Net sales | $ 697,223 | $ 682,330 | $ 1,996,551 | $ 1,961,771 |
Cost of sales | 498,895 | 502,999 | 1,448,210 | 1,451,822 |
Gross profit | 198,328 | 179,331 | 548,341 | 509,949 |
Selling, general, and administrative expense | 96,805 | 98,886 | 296,372 | 296,846 |
Operating profit | 101,523 | 80,445 | 251,969 | 213,103 |
Other income (expense), net: | ||||
Interest expense | (7,692) | (9,507) | (24,711) | (28,740) |
Loss on extinguishment of debt | (233) | |||
Other, net | 86 | 653 | 648 | 1,512 |
Other expense, net | (7,606) | (8,854) | (24,296) | (27,228) |
Income before income taxes | 93,917 | 71,591 | 227,673 | 185,875 |
Income tax expense | (23,921) | (16,615) | (51,407) | (40,864) |
Net income | $ 69,996 | $ 54,976 | $ 176,266 | $ 145,011 |
Net income per common share: | ||||
Basic (in dollars per share) | $ 2.13 | $ 1.63 | $ 5.35 | $ 4.27 |
Diluted (in dollars per share) | $ 2.11 | $ 1.60 | $ 5.29 | $ 4.20 |
Weighted average shares outstanding: | ||||
Basic (in shares) | 32,847,652 | 33,790,857 | 32,960,969 | 33,977,464 |
Diluted (in shares) | 33,210,545 | 34,367,902 | 33,337,259 | 34,541,635 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash Flows Provided by (Used in) Operating Activities: | ||
Net income | $ 176,266 | $ 145,011 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 47,527 | 39,005 |
Share-based compensation | 12,159 | 11,411 |
Loss on extinguishment of debt | 233 | |
Loss on sale or abandonment of property and equipment | 290 | 885 |
Amortization of debt issuance costs | 1,103 | 1,169 |
Provision for bad debt expense | 5,625 | 5,697 |
Loss from inventory obsolescence | 1,908 | 1,794 |
Deferred income taxes, net | (709) | (381) |
Change in certain assets and liabilities | ||
Receivables, net | (13,645) | (51,585) |
Inventories, net | 4,759 | 20,637 |
Prepaid expenses and other current assets | (14,989) | 10,003 |
Accounts payable | 2,152 | (12,529) |
Accrued liabilities | 33,436 | 10,758 |
Payment of contingent consideration | (413) | |
Other, net | 21 | 904 |
Net cash provided by operating activities | 255,723 | 182,779 |
Cash Flows Provided by (Used in) Investing Activities: | ||
Purchases of property and equipment | (27,206) | (34,100) |
Acquisition of businesses | (21,450) | (6,452) |
Proceeds from sale of property and equipment | 2,332 | 2,239 |
Other, net | 25 | |
Net cash used in investing activities | (46,324) | (38,288) |
Cash Flows Provided by (Used in) Financing Activities: | ||
Proceeds from issuance of long-term debt | 300,000 | 9,998 |
Repayment of long-term debt | (319,168) | (19,424) |
Payment of debt issuance costs | (2,280) | |
Taxes withheld and paid on employees' equity awards | (14,781) | (11,135) |
Exercise of stock options | 1,438 | |
Repurchase of shares of common stock | (43,149) | (52,177) |
Payment of contingent consideration | (928) | (1,091) |
Net cash used in financing activities | (78,868) | (73,829) |
Cash and Cash Equivalents | ||
Increase for the period | 130,531 | 70,662 |
Beginning of period | 184,807 | 100,929 |
End of period | 315,338 | 171,591 |
Supplemental disclosure of noncash activities: | ||
Leased assets obtained in exchange for new operating lease liabilities | 27,098 | 120,726 |
Accruals for property and equipment | $ 278 | $ 102 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands | Cumulative Effect, Period of Adoption, AdjustmentRetained Earnings | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Treasury Stock at Cost | Additional Paid-in Capital | Retained Earnings | Total |
Balance at Dec. 31, 2018 | $ 387 | $ (216,607) | $ 846,451 | $ 441,867 | $ 1,072,098 | ||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 37,983 | 37,983 | |||||
Share-based compensation | 2,972 | 2,972 | |||||
Issuance of restricted share awards under long-term equity incentive plan | 1 | (1) | |||||
Repurchase of shares pursuant to the settlement of ASR Agreement | (10,000) | 10,000 | |||||
Repurchase of shares | (4,622) | (4,622) | |||||
Shares withheld to pay taxes on employees' equity awards | (5,578) | (5,578) | |||||
Balance at Mar. 31, 2019 | 388 | (231,229) | 853,844 | 479,850 | 1,102,853 | ||
Balance at Dec. 31, 2018 | 387 | (216,607) | 846,451 | 441,867 | 1,072,098 | ||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 145,011 | ||||||
Repurchase of shares | (52,177) | ||||||
Balance at Sep. 30, 2019 | 388 | (278,784) | 856,726 | 586,877 | 1,165,207 | ||
Balance at Mar. 31, 2019 | 388 | (231,229) | 853,844 | 479,850 | 1,102,853 | ||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 52,051 | 52,051 | |||||
Share-based compensation | 4,513 | 4,513 | |||||
Repurchase of shares | (14,878) | (14,878) | |||||
Shares withheld to pay taxes on employees' equity awards | (2,893) | (2,893) | |||||
Balance at Jun. 30, 2019 | 388 | (246,107) | 855,464 | 531,901 | 1,141,646 | ||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 54,976 | 54,976 | |||||
Share-based compensation | 3,926 | 3,926 | |||||
Repurchase of shares | (32,677) | (32,677) | |||||
Shares withheld to pay taxes on employees' equity awards | (2,664) | (2,664) | |||||
Balance at Sep. 30, 2019 | 388 | (278,784) | 856,726 | 586,877 | 1,165,207 | ||
Balance at Dec. 31, 2019 | 388 | (330,018) | 849,657 | 632,862 | 1,152,889 | ||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 50,771 | 50,771 | |||||
Share-based compensation | 3,908 | 3,908 | |||||
Issuance of restricted share awards under long-term equity incentive plan | 1 | (1) | |||||
Repurchase of shares pursuant to the settlement of ASR Agreement | (7,500) | 7,500 | |||||
Repurchase of shares | (14,127) | (14,127) | |||||
Shares withheld to pay taxes on employees' equity awards | (10,399) | (10,399) | |||||
Balance at Mar. 31, 2020 | $ (3,225) | $ (3,225) | 389 | (351,645) | 850,665 | 680,408 | 1,179,817 |
Balance at Dec. 31, 2019 | 388 | (330,018) | 849,657 | 632,862 | 1,152,889 | ||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 176,266 | ||||||
Repurchase of shares | (43,149) | ||||||
Balance at Sep. 30, 2020 | 389 | (380,667) | 855,972 | 805,900 | 1,281,594 | ||
Balance at Mar. 31, 2020 | $ (3,225) | $ (3,225) | 389 | (351,645) | 850,665 | 680,408 | 1,179,817 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 55,496 | 55,496 | |||||
Share-based compensation | 5,130 | 5,130 | |||||
Repurchase of shares | (20,025) | (20,025) | |||||
Shares withheld to pay taxes on employees' equity awards | (2,766) | (2,766) | |||||
Balance at Jun. 30, 2020 | 389 | (371,670) | 853,029 | 735,904 | 1,217,652 | ||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 69,996 | 69,996 | |||||
Share-based compensation | 3,121 | 3,121 | |||||
Repurchase of shares | (8,997) | (8,997) | |||||
Shares withheld to pay taxes on employees' equity awards | (1,616) | (1,616) | |||||
Shares issued upon exercise of stock options | 1,438 | 1,438 | |||||
Balance at Sep. 30, 2020 | $ 389 | $ (380,667) | $ 855,972 | $ 805,900 | $ 1,281,594 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Parenthetical) - $ / shares | 3 Months Ended | |||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | |
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY | ||||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 |
Issuance of restricted share awards under long-term equity incentive plan (in shares) | 63,780 | 112,270 | ||||
Repurchase of shares pursuant to the settlement of ASR Agreement (in shares) | 73,455 | 176,327 | ||||
Repurchase of shares (in shares) | 57,810 | 262,889 | 188,100 | 364,074 | 196,885 | 72,791 |
Number of shares withheld to pay taxes on employees' equity awards (in shares) | 6,402 | 38,379 | 97,144 | 43,037 | 54,811 | 105,615 |
Shares issued upon exercise of stock options (in shares) | 19,242 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2020 | |
Basis of Presentation | |
Basis of Presentation | 1. BASIS OF PRESENTATION TopBuild was formed on June 30, 2015, and is listed on the NYSE under the ticker symbol “BLD.” We report our business in two segments: Installation and Distribution. Our Installation segment primarily installs insulation and other building products. Our Distribution segment primarily sells and distributes insulation and other building products. Our segments are based on our operating units, for which financial information is regularly evaluated by our chief operating decision maker. In our opinion, the accompanying unaudited condensed consolidated financial statements contain all adjustments, of a normal recurring nature, necessary to state fairly our financial position as of September 30, 2020, our results of operations for the three and nine months ended September 30, 2020 and 2019 and cash flows for the nine months ended September 30, 2020 and 2019. The condensed consolidated balance sheet at December 31, 2019, was derived from our audited financial statements, but does not include all disclosures required by GAAP. These condensed consolidated financial statements and related notes should be read in conjunction with the audited Consolidated Financial Statements included in the Company’s Annual Report for the year ended December 31, 2019, as filed with the SEC on February 25, 2020. |
Accounting Policies
Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies | |
Accounting Policies | 2. ACCOUNTING POLICIES Financial Statement Presentation. Our condensed consolidated financial statements have been developed in conformity with GAAP, which requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosures of contingent liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from these estimates. All intercompany transactions between TopBuild entities have been eliminated. Recently Adopted Accounting Pronouncements Credit Losses In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments We measure the expected credit losses on accounts receivable by segment, using historical loss rate information adjusted for current conditions, with changes in the allowance recorded as a provision for (or reversal of) credit loss expense. Expected losses are charged against the allowance when management believes a receivable is uncollectible. Receivables, net are presented net of certain allowances, including allowance for credit losses. Goodwill Impairment In January 2017, the FASB issued ASU 2017-04, “Intangibles – Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment Fair Value In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820), Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement Recently Issued Accounting Pronouncements Not Yet Adopted In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2020 | |
Revenue Recognition | |
Revenue Recognition | 3. REVENUE RECOGNITION Revenue is disaggregated between our Installation and Distribution segments and further Three Months Ended September 30, 2020 2019 Installation Distribution Elims Total Installation Distribution Elims Total Residential $ 390,101 $ 186,408 $ (30,821) $ 545,688 $ 386,887 $ 165,200 $ (29,581) $ 522,506 Commercial 102,105 57,705 (8,275) 151,535 111,503 55,747 (7,426) 159,824 Net sales $ 492,206 $ 244,113 $ (39,096) $ 697,223 $ 498,390 $ 220,947 $ (37,007) $ 682,330 Nine Months Ended September 30, 2020 2019 Installation Distribution Elims Total Installation Distribution Elims Total Residential $ 1,134,350 $ 512,479 $ (88,875) $ 1,557,954 $ 1,110,704 $ 478,753 $ (86,157) $ 1,503,300 Commercial 300,298 162,193 (23,894) 438,597 320,096 160,146 (21,771) 458,471 Net sales $ 1,434,648 $ 674,672 $ (112,769) $ 1,996,551 $ 1,430,800 $ 638,899 $ (107,928) $ 1,961,771 The following tables present our revenues disaggregated by product (in thousands): Three Months Ended September 30, 2020 2019 Installation Distribution Elims Total Installation Distribution Elims Total Insulation and accessories $ 379,958 $ 200,210 $ (31,816) $ 548,352 $ 388,796 $ 182,111 $ (27,872) $ 543,035 Glass and windows 41,912 — — 41,912 37,885 — — 37,885 Gutters 21,336 28,616 (5,482) 44,470 23,177 24,056 (7,270) 39,963 All other 49,000 15,287 (1,798) 62,489 48,532 14,780 (1,865) 61,447 Net sales $ 492,206 $ 244,113 $ (39,096) $ 697,223 $ 498,390 $ 220,947 $ (37,007) $ 682,330 Nine Months Ended September 30, 2020 2019 Installation Distribution Elims Total Installation Distribution Elims Total Insulation and accessories $ 1,110,952 $ 556,018 $ (91,422) $ 1,575,548 $ 1,116,292 $ 525,717 $ (83,888) $ 1,558,121 Glass and windows 122,603 — — 122,603 114,839 — — 114,839 Gutters 61,843 74,585 (16,557) 119,871 63,669 65,707 (19,151) 110,225 All other 139,250 44,069 (4,790) 178,529 136,000 47,475 (4,889) 178,586 Net sales $ 1,434,648 $ 674,672 $ (112,769) $ 1,996,551 $ 1,430,800 $ 638,899 $ (107,928) $ 1,961,771 We recognize revenue for our Installation segment over time as the related performance obligation is satisfied with respect to each particular order within a given customer’s contract. Progress toward complete satisfaction of the performance obligation is measured using a cost-to-cost measure of progress method. The cost input is based on the amount of material installed at that customer’s location and the associated labor costs, as compared to the total expected cost for the particular order. Revenue is recognized as the customer is able to receive and utilize the benefits provided by our services. Each contract contains one or more individual orders, which are based on services delivered. When a contract modification is made, typically the remaining goods or services are considered distinct and we recognize revenue for the modification as a separate performance obligation. When material and installation services are bundled in a contract, we combine these items into one performance obligation as the overall promise is to transfer the combined item. Revenue from our Distribution segment is recognized when title to products and risk of loss transfers to our customers. This represents the point in time when the customer is able to direct the use of and obtain substantially all the benefits from the product. The determination of when control is deemed transferred depends on the shipping terms that are agreed upon in the contract. At time of sale, we record estimated reductions to revenue for customer programs and incentive offerings, including special pricing and other volume-based incentives based on historical experience, which is continuously adjusted. The duration of our contracts with customers is relatively short, generally less than a 90 -day period, therefore there is not a significant financing component when considering the determination of the transaction price which gets allocated to the individual performance obligations, generally based on standalone selling prices. Additionally, we consider shipping costs charged to a customer as a fulfillment cost rather than a promised service and expense as incurred. Sales taxes, when incurred, are recorded as a liability and excluded from revenue on a net basis. We record a contract asset when we have satisfied our performance obligation prior to billing and a contract liability when a customer payment is received prior to the satisfaction of our performance obligation. The difference between the beginning and ending balances of our contract assets and liabilities primarily results from the timing of our performance and the customer’s payment. The following table represents our contract assets and contract liabilities with customers, in thousands: Included in Line Item on As of Condensed Consolidated September 30, December 31, Balance Sheets 2020 2019 Contract Assets: Receivables, unbilled Receivables, net $ 54,375 $ 57,153 Contract Liabilities: Deferred revenue Accrued liabilities $ 16,817 $ 16,139 |
Goodwill and Other Intangibles
Goodwill and Other Intangibles | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Other Intangibles | |
Goodwill and Other Intangibles | 4. GOODWILL AND OTHER INTANGIBLES We have two reporting units which are also our operating and reporting segments: Installation and Distribution. Both reporting units contain goodwill. Assets acquired and liabilities assumed are assigned to the applicable reporting unit based on whether the acquired assets and liabilities relate to the operations of and determination of the fair value of such unit. Goodwill assigned to the reporting unit is the excess of the fair value of the acquired business over the fair value of the individual assets acquired and liabilities assumed for the reporting unit. In the fourth quarter of 2019, we performed an annual assessment on our goodwill resulting in no impairment. Changes in the carrying amount of goodwill for the nine months ended September 30, 2020 by segment, were as follows, in thousands: Gross Goodwill Gross Goodwill Accumulated Net Goodwill at at Impairment at December 31, 2019 Additions September 30, 2020 Losses September 30, 2020 Goodwill, by segment: Installation $ 1,683,589 $ 11,803 $ 1,695,392 $ (762,021) $ 933,371 Distribution 446,350 — 446,350 — 446,350 Total goodwill $ 2,129,939 $ 11,803 $ 2,141,742 $ (762,021) $ 1,379,721 See Note 13 – Business Combinations Other intangible assets, net includes customer relationships, non-compete agreements, and trademarks / trade names. The following table sets forth our other intangible assets, in thousands: As of September 30, December 31, 2020 2019 Gross definite-lived intangible assets $ 228,662 $ 221,382 Accumulated amortization (56,272) (40,260) Net definite-lived intangible assets 172,390 181,122 Indefinite-lived intangible assets not subject to amortization — — Other intangible assets, net $ 172,390 $ 181,122 The following table sets forth our amortization expense, in thousands: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Amortization expense $ 5,382 $ 5,197 $ 16,012 $ 15,543 |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2020 | |
Long-Term Debt | |
Long-Term Debt | 5. LONG-TERM DEBT The following table reconciles the principal balances of our outstanding debt to our condensed consolidated balance sheets, in thousands: As of September 30, December 31, 2020 2019 Senior Notes - 5.625% due May 2026 $ 400,000 $ 400,000 Term loan 292,500 305,625 Equipment notes 27,484 33,525 Unamortized debt issuance costs (7,867) (6,923) Total debt, net of unamortized debt issuance costs 712,117 732,227 Less: current portion of long-term debt 23,247 34,272 Total long-term debt $ 688,870 $ 697,955 The following table sets forth our remaining principal payments for our outstanding debt balances as of September 30, 2020, in thousands: Payments Due by Period 2020 2021 2022 2023 2024 Thereafter Total Senior Notes $ — $ — $ — $ — $ — $ 400,000 $ 400,000 Term loan 3,750 15,000 20,625 22,500 28,125 202,500 292,500 Equipment notes 2,040 8,326 8,651 6,337 2,130 — 27,484 Total $ 5,790 $ 23,326 $ 29,276 $ 28,837 $ 30,255 $ 602,500 $ 719,984 Amended Credit Agreement and Senior Secured Term Loan Facility On March 20, 2020, the Company entered into an Amended Credit Agreement, which renewed, amended and restated the Original Credit Agreement in its entirety. The Amended Credit Agreement provides for a term loan facility in an aggregate principal amount of $300.0 million, all of which was drawn on March 20, 2020 and a Revolving Facility with an aggregate borrowing capacity of $450.0 million, including a $100.0 million letter of credit sublimit and up to a $35.0 million swingline sublimit. The maturity date for the loans under the Amended Credit Agreement was extended from May 2022 to March 2025. The following table outlines the key terms of our Amended Credit Agreement (dollars in thousands): Senior secured term loan facility $ 300,000 Additional term loan and/or revolver capacity available under incremental facility (a) $ 300,000 Revolving Facility $ 450,000 Sublimit for issuance of letters of credit under Revolving Facility (b) $ 100,000 Sublimit for swingline loans under Revolving Facility (b) $ 35,000 Interest rate as of September 30, 2020 1.50 % Scheduled maturity date 3/20/2025 (a) Additional borrowing capacity is available under the incremental facility, subject to certain terms and conditions (including existing or new lenders providing commitments in respect of such additional borrowing capacity). (b) Use of the sublimits for the issuance of letters of credit and swingline loans reduces the availability under the Revolving Facility. Interest payable on borrowings under the Amended Credit Agreement is based on an applicable margin rate plus, at our option, either: ● A base rate determined by reference to the highest of either (i) the federal funds rate plus 0.50 percent, (ii) BofA’s “prime rate,” and (iii) the LIBOR rate for U.S. dollar deposits with a term of one month , plus 1.00 percent; or ● A LIBOR rate (or a comparable successor rate) determined by reference to the costs of funds for deposits in U.S. dollars for the interest period relevant to such borrowings, subject to a floor of 0.5% . The Amended Credit Agreement contemplates future amendment by the Company and the agent to provide for the replacement of LIBOR with the Secured Overnight Financing Rate or another alternate benchmark rate, giving due consideration to any evolving or then existing convention for similar U.S. dollar denominated syndicated credit facilities for such alternative benchmarks, including any related mathematical or other applicable adjustments. The applicable margin rate is determined based on our Secured Leverage Ratio. In the case of base rate borrowings, the applicable margin rate ranges from 0.00 percent to 1.50 percent and in the case of LIBOR rate borrowings, the applicable margin ranges from 1.00 percent to 2.50 percent. Borrowings under the Amended Credit Agreement are prepayable at the Company’s option without premium or penalty. The Company is required to make prepayments with the net cash proceeds of certain asset sales and certain extraordinary receipts. Revolving Facility The Company has outstanding standby letters of credit that secure our financial obligations related to our workers’ compensation, general insurance, and auto liability programs. These standby letters of credit, as well as any outstanding amount borrowed under our Revolving Facility, reduce the availability under the Revolving Facility. The following table summarizes our availability under the Revolving Facility, in thousands: As of September 30, December 31, 2020 2019 Revolving Facility $ 450,000 $ 250,000 Less: standby letters of credit (60,382) (61,382) Availability under Revolving Facility $ 389,618 $ 188,618 We are required to pay commitment fees to the Lenders in respect of any unutilized commitments. The commitment fees range from 0.15 percent to 0.275 percent per annum, depending on our Secured Leverage Ratio. We must also pay customary fees on outstanding letters of credit. Senior Notes The Senior Notes are our senior unsecured obligations and bear interest at 5.625% per year, payable semiannually in arrears on May 1 and November 1 of each year, which began on November 1, 2018. The Senior Notes mature on May 1, 2026, unless redeemed early or repurchased. We have the right to redeem the Senior Notes under certain circumstances, and, if we undergo a change in control, we must make an offer to repurchase all of the Senior Notes then outstanding at a repurchase price equal to 101% of their aggregate principal amount, plus accrued and unpaid interest (if any) to, but not including, the repurchase date. Equipment Notes As of December 31, 2019, the company has issued $41.6 million of equipment notes for the purpose of financing the purchase of vehicles and equipment. No equipment notes were issued during the nine months ended September 30, 2020. The Company’s equipment notes each have a five year term maturing from 2023 to 2024 and bear interest at fixed rates between 2.8% and 4.4% . Covenant Compliance The indenture governing our Senior Notes contains customary restrictive covenants that, among other things, generally limit our ability to incur additional debt and issue preferred stock; to create liens; to pay dividends, acquire shares of capital stock, make payments on subordinated debt or make investments; to place limitations on distributions from certain subsidiaries; to issue guarantees; to issue or sell the capital stock of certain subsidiaries; to sell assets; to enter into transactions with affiliates; and to effect mergers. The Senior Notes indenture also contains customary events of default, subject in certain cases to grace and cure periods. Generally, if an event of default occurs and is continuing, the trustee under the indenture or the holders of at least 25% in aggregate principal amount of the Senior Notes then outstanding may declare the principal of, premium, if any, and accrued interest on all the Senior Notes immediately due and payable. The Senior Notes and related guarantees have not been registered under the Securities Act of 1933, and we are not required to register either the Senior Notes or the guarantees in the future. The Amended Credit Agreement contains certain covenants that limit, among other things, the ability of the Company to incur additional indebtedness or liens; to make certain investments or loans; to make certain restricted payments; to enter into consolidations, mergers, sales of material assets, and other fundamental changes; to transact with affiliates; to enter into agreements restricting the ability of subsidiaries to incur liens or pay dividends; or to make certain accounting changes. The Amended Credit Agreement contains customary affirmative covenants and events of default. The Amended Credit Agreement requires that we maintain a Net Leverage Ratio and minimum Interest Coverage Ratio throughout the term of the agreement. The following table outlines the key financial covenants effective for the period covered by this Quarterly Report: As of September 30, 2020 Maximum Net Leverage Ratio 3.50:1.00 Minimum Interest Coverage Ratio 3.00:1.00 Compliance as of period end In Compliance |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Measurements | |
Fair Value Measurements | 6 FAIR VALUE MEASUREMENTS Fair Value on Recurring Basis The carrying values of cash and cash equivalents, receivables, net, and accounts payable are considered to be representative of their respective fair values due to the short-term nature of these instruments. We measure our contingent consideration liabilities related to business combinations at fair value. For more information see Note 13 – Business Combinations. Fair Value on Non-Recurring Basis Fair value measurements were applied to our long-term debt portfolio. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2020 | |
Segment Information | |
Segment Information | 7. SEGMENT INFORMATION The following tables set forth our net sales and operating results by segment, in thousands: Three Months Ended September 30, 2020 2019 2020 2019 Net Sales Operating Profit (b) Our operations by segment were (a): Installation $ 492,206 $ 498,390 $ 83,142 $ 69,846 Distribution 244,113 220,947 32,787 23,406 Intercompany eliminations (39,096) (37,007) (6,374) (5,935) Total $ 697,223 $ 682,330 109,555 87,317 General corporate expense, net (c) (8,032) (6,872) Operating profit, as reported 101,523 80,445 Other expense, net (7,606) (8,854) Income before income taxes $ 93,917 $ 71,591 Nine Months Ended September 30, 2020 2019 2020 2019 Net Sales Operating Profit (b) Our operations by segment were (a): Installation $ 1,434,648 $ 1,430,800 $ 213,136 $ 189,568 Distribution 674,672 638,899 81,612 65,154 Intercompany eliminations (112,769) (107,928) (18,169) (18,013) Total $ 1,996,551 $ 1,961,771 276,579 236,709 General corporate expense, net (c) (24,610) (23,606) Operating profit, as reported 251,969 213,103 Other expense, net (24,296) (27,228) Income before income taxes $ 227,673 $ 185,875 (a) All of our operations are located in the U.S. (b) Segment operating profit includes an allocation of general corporate expenses attributable to the operating segments which is based on direct benefit or usage (such as salaries of corporate employees who directly support the segment). (c) General corporate expense, net includes expenses not specifically attributable to our segments for functions such as corporate human resources, finance, and legal, including salaries, benefits, and other related costs. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2020 | |
Leases | |
Leases | 8 LEASES We have operating leases for our installation branch locations, distribution centers, our Branch Support Center in Daytona Beach, Florida, vehicles and certain equipment. In addition, we lease certain operating facilities from certain related parties, primarily former owners (and in some cases, current management personnel) of companies acquired. These related party leases are immaterial to our unaudited condensed consolidated statements of operations. We recognize a ROU asset and a lease liability at the lease commencement date. Our leases may include options to extend terminate The components of lease expense were as follows and are primarily included in cost of sales on the accompanying unaudited condensed consolidated statements of operations, in thousands: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Operating lease cost (a) $ 11,475 $ 12,393 $ 35,842 $ 38,597 Short-term lease cost 3,209 3,381 9,086 9,391 Sublease income (42) (153) (153) (461) Net lease cost $ 14,642 $ 15,621 $ 44,775 $ 47,527 (a) Includes variable cost components of $1,316 and $1,434 in the three months ended September 30, 2020 and 2019, respectively, and $4,090 and $4,201 of variable cost components in the nine months ended September 30, 2020 and 2019, respectively. Future minimum lease payments under non-cancellable operating leases as of September 30, 2020 were as follows, in thousands: Payments due by Period 2020 $ 10,234 2021 32,978 2022 22,083 2023 12,429 2024 7,135 2025 & Thereafter 7,189 Total future minimum lease payments 92,048 Less: imputed interest (6,629) Lease liability at September 30, 2020 $ 85,419 As of September 30, 2020, the weighted average remaining lease term was 3.5 years and the related lease liability was calculated using a weighted average discount rate of 3.9%. The lease liability is initially measured as the present value of the unpaid lease payments as of the lease commencement date. The lease liability is discounted based on our IBR at the time of initial adoption of ASU 2016-02 for all existing leases or upon a modification to the lease term and at the time of lease commencement for all future leases. The amount below is included in the cash flows provided by (used in) operating activities section on the accompanying unaudited condensed consolidated statements of cash flows, in thousands: Nine Months Ended September 30, 2020 2019 Cash paid for amounts included in the measurement of lease liabilities $ (31,862) $ (33,914) |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2020 | |
Income Taxes | |
Income Taxes | 9. INCOME TAXES Our effective tax rates were 25.5 percent and 22.6 percent for the three and nine months ended September 30, 2020, respectively. The effective tax rates for the three and nine months ended September 30, 2019, were 23.2 percent and 22.0 percent, respectively. The higher 2020 tax rate for the three months ended September 30, 2020 was due to a smaller benefit related to share-based compensation, state filing position changes, and an unfavorable return to accrual adjustment. A tax benefit of $0.8 million and $7.7 million related to share-based compensation was recognized in our condensed consolidated statements of operations as a discrete item in income tax expense for the three and nine months ended September 30, 2020, respectively. At September 30, 2020, the net deferred tax liability of $169.2 million consisted of net long-term deferred tax assets of $4.4 million and net long-term deferred tax liabilities of $173.6 million. The decrease in the net deferred tax liability was primarily related to the adoption of ASU 2016-13 and a return to accrual adjustment related to 2019 returns filed in 2020. |
Income Per Share
Income Per Share | 9 Months Ended |
Sep. 30, 2020 | |
Income Per Share | |
Net Income Per Share | 10. INCOME PER SHAR E Basic net income per share is calculated by dividing net income by the number of weighted average shares outstanding during the period, without consideration for common stock equivalents. Diluted net income per share is calculated by adjusting the number of weighted average shares outstanding for the dilutive effect of common stock equivalents outstanding for the period, determined using the treasury stock method. Basic and diluted net income per share were computed as follows: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Net income (in thousands) - basic and diluted $ 69,996 $ 54,976 $ 176,266 $ 145,011 Weighted average number of common shares outstanding - basic 32,847,652 33,790,857 32,960,969 33,977,464 Dilutive effect of common stock equivalents: RSAs with service-based conditions 42,317 82,087 53,719 86,373 RSAs with market-based conditions 159,985 195,740 145,835 183,537 RSAs with performance-based conditions 49,065 82,750 38,719 63,329 Stock options 111,526 216,468 138,017 230,932 Weighted average number of common shares outstanding - diluted 33,210,545 34,367,902 33,337,259 34,541,635 Basic net income per common share $ 2.13 $ 1.63 $ 5.35 $ 4.27 Diluted net income per common share $ 2.11 $ 1.60 $ 5.29 $ 4.20 The following table summarizes shares excluded from the calculation of diluted net income per share because their effect would have been anti-dilutive: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Anti-dilutive common stock equivalents: RSAs with service-based conditions — — 4,184 5,264 RSAs with market-based conditions — — 2,780 6,567 RSAs with performance-based conditions — — — — Stock options 26,556 12,642 39,998 72,580 Total anti-dilutive common stock equivalents 26,556 12,642 46,962 84,411 |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Sep. 30, 2020 | |
Share-Based Compensation. | |
Share-Based Compensation | 11. SHARE-BASED COMPENSATION Effective July 1, 2015, our eligible employees commenced participation in the 2015 LTIP. The 2015 LTIP authorizes the Board to grant stock options, stock appreciation rights, restricted shares, restricted share units, performance awards, and dividend equivalents. All grants are made by issuing new shares and no more than 4.0 million shares of common stock may be issued under the 2015 LTIP. As of September 30, 2020, we had 2.1 million shares remaining available for issuance under the 2015 LTIP. Share-based compensation expense is included in selling, general, and administrative expense. The income tax effect associated with share-based compensation awards is included in income tax expense. The following table presents share-based compensation amounts recognized in our condensed consolidated statements of operations, in thousands: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Share-based compensation expense $ 3,121 $ 3,926 $ 12,159 $ 11,411 Income tax benefit realized $ 838 $ 1,304 $ 7,734 $ 5,110 The following table presents a summary of our share-based compensation activity for the nine months ended September 30, 2020, in thousands, except per share amounts: RSAs Stock Options Number of Shares Weighted Average Grant Date Fair Value Per Share Number of Shares Weighted Average Grant Date Fair Value Per Share Weighted Average Exercise Price Per Share Aggregate Balance December 31, 2019 411.6 $ 57.51 373.5 $ 17.06 $ 45.90 $ 21,356.4 Granted 192.8 $ 129.11 71.0 $ 39.49 $ 118.58 Converted/Exercised (251.1) $ 43.44 (184.8) $ 14.84 $ 39.54 $ 13,222.1 Forfeited/Expired (26.1) $ 90.81 (20.0) $ 30.13 $ 87.67 Balance September 30, 2020 327.2 $ 87.20 239.7 $ 24.33 $ 68.86 $ 22,925.1 Exercisable September 30, 2020 (a) 63.8 $ 18.89 $ 51.04 $ 7,638.0 (a) The weighted average remaining contractual term for vested stock options is approximately 6.5 years. Unrecognized share-based compensation expense related to unvested awards is shown in the following table, dollars in thousands: As of September 30, 2020 Unrecognized Compensation Expense Weighted Average RSAs $ 11,536 1.2 years Stock options 1,359 1.0 years Total unrecognized compensation expense related to unvested awards $ 12,895 Our RSAs with performance-based conditions are evaluated on a quarterly basis with adjustments to compensation expense based on the likelihood of the performance target being achieved or exceeded. The following table shows the range of payouts and the related expense for our outstanding RSAs with performance-based conditions, in thousands: Payout Ranges and Related Expense RSAs with Performance-Based Conditions Grant Date Fair Value 0% 25% 100% 200% February 19, 2018 $ 1,865 $ — $ 466 $ 1,865 $ 3,730 February 18, 2019 $ 2,281 $ — $ 570 $ 2,281 $ 4,562 February 17, 2020 $ 2,716 $ — $ 679 $ 2,716 $ 5,432 During the first quarter of 2020, RSAs with performance-based conditions that were granted on February 21, 2017 vested based on cumulative three-year achievement of 200%. Total compensation expense recognized over the three-year performance period, net of forfeitures, was $3.3 million. The fair value of our RSAs with a market-based condition granted under the 2015 LTIP was determined using a Monte Carlo simulation. The following are key inputs in the Monte Carlo analysis for awards granted in 2020 and 2019: 2020 2019 Measurement period (in years) 2.88 2.87 Risk free interest rate 1.40 % 2.50 % Dividend yield 0.00 % 0.00 % Estimated fair value of market-based RSAs at grant date $ 158.24 $ 80.74 The fair values of stock options granted under the 2015 LTIP were calculated using the Black-Scholes Options Pricing Model. The following table presents the assumptions used to estimate the fair values of stock options granted in 2020 and 2019: 2020 2019 Risk free interest rate 1.53 % 2.59 % Expected volatility, using historical return volatility and implied volatility 31.50 % 32.50 % Expected life (in years) 6.0 6.0 Dividend yield 0.00 % 0.00 % Estimated fair value of stock options at grant date $ 39.49 $ 21.16 |
Share Repurchase Program
Share Repurchase Program | 9 Months Ended |
Sep. 30, 2020 | |
Share Repurchase Program | |
Share Repurchase Program | 12. SHARE REPURCHASE PROGRAM On February 22, 2019, our Board authorized the 2019 Repurchase Program, pursuant to which the Company may purchase up to $200.0 million of our common stock. Share repurchases may be executed through various means including open market purchases, privately negotiated transactions, accelerated share repurchase transactions, or other available means. The 2019 Share Repurchase Program does not obligate the Company to purchase any shares and has no expiration date. Authorization for the 2019 Share Repurchase Program may be terminated, increased, or decreased by the Board at its discretion at any time. As of September 30, 2020, the Company has approximately $46.0 million remaining under the 2019 Repurchase Program. Effective November 4, 2019, under the 2019 Repurchase program, we entered into the 2019 ASR Agreement. We paid BofA $50.0 million in exchange for an initial delivery of 392,501 shares of our common stock on November 5, 2019, representing an estimated 85% of the total number of shares we expected to receive under the 2019 ASR Agreement, at the time we entered into the agreement. During the quarter ended March 31, 2020, we received an additional 73,455 shares of our common stock from BofA representing the final settlement of the 2019 ASR agreement. We purchased a total of 465,956 shares of our common stock under the 2019 ASR Agreement at an average price per share of $107.31. Effective November 7, 2018, under the 2017 Repurchase Program, we entered into the 2018 ASR Agreement. We paid JPMorgan Chase Bank, N.A. $50.0 million in exchange for an initial delivery of 796,925 shares of our common stock on November 8, 2018, representing an estimated 85% of the total number of shares we expected to receive under the 2018 ASR Agreement, at the time we entered into the agreement. During the quarter ended March 31, 2019, we received an additional 176,327 shares of our common stock from JPMorgan Chase Bank, N.A., representing the final settlement of the 2018 ASR Agreement. We purchased a total of 973,252 shares of our common stock under the 2018 ASR Agreement at an average price per share of $51.37. The following table sets forth our share repurchases under the 2019 and 2017 Repurchase Programs during the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Number of shares repurchased 57,810 364,074 582,254 (a) 810,077 (b) Share repurchase cost (in thousands) $ 8,997 $ 32,677 $ 43,149 $ 52,177 (a) The nine months ended September 30, 2020 includes 73,455 shares we received as final settlement of our 2019 ASR Agreement. (b) The nine months ended September 30, 2019 includes 176,327 shares we received as final settlement of our 2018 ASR Agreement . |
Business Combinations
Business Combinations | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations | |
Business Combinations | 13. BUSINESS COMBINATIONS We continue to acquire businesses as part of our ongoing strategy to grow our company and expand our market share. Each acquisition has been accounted for as a business combination under ASC 805, “Business Combinations.” Acquisition related costs for the three months ended September 30, 2020, was $0.2 million. There were no acquisition related costs for the three months ended September 30, 2019. Acquisition related costs for the nine months ended September 30, 2020 and 2019, were $0.4 million and $0.1 million, respectively. Acquisition costs are included in selling, general, and administrative expense in our condensed consolidated statements of operations. Acquisitions On July 15, 2019, we acquired Viking, an insulation company located in Burbank, California. The purchase price of approximately $7.7 million was funded by cash on hand of $6.5 million and contingent consideration of $1.2 million. On February 20, 2020, we acquired Cooper, a commercial glass company serving the Memphis market. The purchase price of approximately $11.5 million was funded by cash on hand of $10.5 million and contingent consideration of $1.0 million. We recognized goodwill of $5.7 million in connection with this acquisition during the nine months ended September 30, 2020. On February 24, 2020, we acquired Hunter, a residential insulation company located in Long Island, New York. The purchase price of approximately $9.1 million was funded by cash on hand. We recognized goodwill of $5.3 million in connection with this acquisition during the nine months ended September 30, 2020. Contingent Consideration On February 27, 2017, we acquired substantially all of the assets of EcoFoam, a residential and light commercial insulation installation company with locations in Colorado Springs and Denver, Colorado. The purchase price of approximately $22.3 million was funded by cash on hand of $20.2 million and contingent consideration of $2.1 million. We made the final contingent payment of $0.8 million during the three months ended June 30, 2020 and have no remaining obligation under the arrangement. The acquisition of Viking included a contingent consideration arrangement that requires additional consideration to be paid by TopBuild based on the achievement of annual gross revenue targets over a three-year period. The range of undiscounted amounts TopBuild may be required to pay under the contingent consideration agreement is between zero and $1.5 million. The fair value of the contingent consideration recognized on the acquisition date of $1.2 million was estimated by applying the income approach using discounted cash flows. That measure is based on significant Level 3 inputs not observable in the market. The significant assumption includes a discount rate of 10.0% . Changes in the fair value measurement each period reflect the passage of time as well as the impact of adjustments, if any, to the likelihood of achieving the specified targets. We made a contingent payment of $0.5 million in the three months ended September 30, 2020. The acquisition of Cooper includes a contingent consideration arrangement that requires additional consideration to be paid by TopBuild based on the achievement of annual gross revenue targets over a two-year period. The range of undiscounted amounts TopBuild may be required to pay under the contingent consideration agreement is between zero and $1.0 million, which also represents the fair value recognized on the acquisition date. The following table presents the fair value of contingent consideration, in thousands: EcoFoam Viking Cooper Date of Acquisition February 27, 2017 July 15, 2019 February 20, 2020 Fair value of contingent consideration recognized at acquisition date $ 2,110 $ 1,243 $ 1,000 Contingent consideration at December 31, 2019 $ 822 $ 1,304 $ — Additions — — 1,000 Change in fair value of contingent consideration during the nine months ended September 30, 2020 19 85 — Payment of contingent consideration during the nine months ended September 30, 2020 (841) (500) — Liability balance for contingent consideration at September 30, 2020 $ — $ 889 $ 1,000 |
Accrued Liabilities
Accrued Liabilities | 9 Months Ended |
Sep. 30, 2020 | |
Accrued Liabilities | |
Accrued Liabilities | 14. ACCRUED LIABILITIES The following table sets forth the components of accrued liabilities, in thousands: As of September 30, December 31, 2020 2019 Accrued liabilities: Salaries, wages, and commissions $ 39,908 $ 32,154 Insurance liabilities 23,440 22,506 Deferred revenue 16,817 16,139 Interest payable on long-term debt 9,563 3,966 Other 27,728 23,653 Total accrued liabilities $ 117,456 $ 98,418 See Note 3 – Revenue Recognition |
Other Commitments and Contingen
Other Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Other Commitments and Contingencies | |
Other Commitments and Contingencies | 15. OTHER COMMITMENTS AND CONTINGENCIES Litigation Other Matters We also maintain indemnification agreements with our directors and officers that may require us to indemnify them against liabilities that arise by reason of their status or service as directors or officers, except as prohibited by applicable law. We occasionally 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. We also have bonds outstanding for license and insurance. The following table summarizes our outstanding performance, licensing, insurance and other bonds, in thousands: As of September 30, December 31, 2020 2019 Outstanding bonds: Performance bonds $ 102,403 $ 87,286 Licensing, insurance, and other bonds 27,603 25,309 Total bonds $ 130,006 $ 112,595 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events | |
Subsequent Events | 16. SUBSEQUENT EVENTS On October 1, 2020, we acquired Garland, an insulation installation company, based in Texas. The acquisition was accounted for as a business combination under ASC 805, “Business Combinations.” The purchase price of approximately $62 million was funded by cash on hand. During the measurement period, we expect to receive additional detailed information to complete the purchase price allocation. |
Accounting Policies (Policies)
Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies | |
Financial Statement Presentation | Financial Statement Presentation. Our condensed consolidated financial statements have been developed in conformity with GAAP, which requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosures of contingent liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from these estimates. All intercompany transactions between TopBuild entities have been eliminated. |
Recently Adopted and Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements Credit Losses In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments We measure the expected credit losses on accounts receivable by segment, using historical loss rate information adjusted for current conditions, with changes in the allowance recorded as a provision for (or reversal of) credit loss expense. Expected losses are charged against the allowance when management believes a receivable is uncollectible. Receivables, net are presented net of certain allowances, including allowance for credit losses. Goodwill Impairment In January 2017, the FASB issued ASU 2017-04, “Intangibles – Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment Fair Value In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820), Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement Recently Issued Accounting Pronouncements Not Yet Adopted In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Revenue Recognition | |
Schedule of revenues disaggregated by market and product | Three Months Ended September 30, 2020 2019 Installation Distribution Elims Total Installation Distribution Elims Total Residential $ 390,101 $ 186,408 $ (30,821) $ 545,688 $ 386,887 $ 165,200 $ (29,581) $ 522,506 Commercial 102,105 57,705 (8,275) 151,535 111,503 55,747 (7,426) 159,824 Net sales $ 492,206 $ 244,113 $ (39,096) $ 697,223 $ 498,390 $ 220,947 $ (37,007) $ 682,330 Nine Months Ended September 30, 2020 2019 Installation Distribution Elims Total Installation Distribution Elims Total Residential $ 1,134,350 $ 512,479 $ (88,875) $ 1,557,954 $ 1,110,704 $ 478,753 $ (86,157) $ 1,503,300 Commercial 300,298 162,193 (23,894) 438,597 320,096 160,146 (21,771) 458,471 Net sales $ 1,434,648 $ 674,672 $ (112,769) $ 1,996,551 $ 1,430,800 $ 638,899 $ (107,928) $ 1,961,771 The following tables present our revenues disaggregated by product (in thousands): Three Months Ended September 30, 2020 2019 Installation Distribution Elims Total Installation Distribution Elims Total Insulation and accessories $ 379,958 $ 200,210 $ (31,816) $ 548,352 $ 388,796 $ 182,111 $ (27,872) $ 543,035 Glass and windows 41,912 — — 41,912 37,885 — — 37,885 Gutters 21,336 28,616 (5,482) 44,470 23,177 24,056 (7,270) 39,963 All other 49,000 15,287 (1,798) 62,489 48,532 14,780 (1,865) 61,447 Net sales $ 492,206 $ 244,113 $ (39,096) $ 697,223 $ 498,390 $ 220,947 $ (37,007) $ 682,330 Nine Months Ended September 30, 2020 2019 Installation Distribution Elims Total Installation Distribution Elims Total Insulation and accessories $ 1,110,952 $ 556,018 $ (91,422) $ 1,575,548 $ 1,116,292 $ 525,717 $ (83,888) $ 1,558,121 Glass and windows 122,603 — — 122,603 114,839 — — 114,839 Gutters 61,843 74,585 (16,557) 119,871 63,669 65,707 (19,151) 110,225 All other 139,250 44,069 (4,790) 178,529 136,000 47,475 (4,889) 178,586 Net sales $ 1,434,648 $ 674,672 $ (112,769) $ 1,996,551 $ 1,430,800 $ 638,899 $ (107,928) $ 1,961,771 |
Schedule of contract assets and contract liabilities with customers | The following table represents our contract assets and contract liabilities with customers, in thousands: Included in Line Item on As of Condensed Consolidated September 30, December 31, Balance Sheets 2020 2019 Contract Assets: Receivables, unbilled Receivables, net $ 54,375 $ 57,153 Contract Liabilities: Deferred revenue Accrued liabilities $ 16,817 $ 16,139 |
Goodwill and Other Intangibles
Goodwill and Other Intangibles (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Other Intangibles | |
Changes in the carrying amount of goodwill by segment | Changes in the carrying amount of goodwill for the nine months ended September 30, 2020 by segment, were as follows, in thousands: Gross Goodwill Gross Goodwill Accumulated Net Goodwill at at Impairment at December 31, 2019 Additions September 30, 2020 Losses September 30, 2020 Goodwill, by segment: Installation $ 1,683,589 $ 11,803 $ 1,695,392 $ (762,021) $ 933,371 Distribution 446,350 — 446,350 — 446,350 Total goodwill $ 2,129,939 $ 11,803 $ 2,141,742 $ (762,021) $ 1,379,721 |
Schedule of other intangible assets | Other intangible assets, net includes customer relationships, non-compete agreements, and trademarks / trade names. The following table sets forth our other intangible assets, in thousands: As of September 30, December 31, 2020 2019 Gross definite-lived intangible assets $ 228,662 $ 221,382 Accumulated amortization (56,272) (40,260) Net definite-lived intangible assets 172,390 181,122 Indefinite-lived intangible assets not subject to amortization — — Other intangible assets, net $ 172,390 $ 181,122 |
Schedule of amortization expense | The following table sets forth our amortization expense, in thousands: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Amortization expense $ 5,382 $ 5,197 $ 16,012 $ 15,543 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Long-Term Debt | |
Reconciliation of principal balance of outstanding debt | The following table reconciles the principal balances of our outstanding debt to our condensed consolidated balance sheets, in thousands: As of September 30, December 31, 2020 2019 Senior Notes - 5.625% due May 2026 $ 400,000 $ 400,000 Term loan 292,500 305,625 Equipment notes 27,484 33,525 Unamortized debt issuance costs (7,867) (6,923) Total debt, net of unamortized debt issuance costs 712,117 732,227 Less: current portion of long-term debt 23,247 34,272 Total long-term debt $ 688,870 $ 697,955 |
Schedule of remaining principal payments of debt | The following table sets forth our remaining principal payments for our outstanding debt balances as of September 30, 2020, in thousands: Payments Due by Period 2020 2021 2022 2023 2024 Thereafter Total Senior Notes $ — $ — $ — $ — $ — $ 400,000 $ 400,000 Term loan 3,750 15,000 20,625 22,500 28,125 202,500 292,500 Equipment notes 2,040 8,326 8,651 6,337 2,130 — 27,484 Total $ 5,790 $ 23,326 $ 29,276 $ 28,837 $ 30,255 $ 602,500 $ 719,984 |
Summary of key terms of Amended Credit Agreement | The following table outlines the key terms of our Amended Credit Agreement (dollars in thousands): Senior secured term loan facility $ 300,000 Additional term loan and/or revolver capacity available under incremental facility (a) $ 300,000 Revolving Facility $ 450,000 Sublimit for issuance of letters of credit under Revolving Facility (b) $ 100,000 Sublimit for swingline loans under Revolving Facility (b) $ 35,000 Interest rate as of September 30, 2020 1.50 % Scheduled maturity date 3/20/2025 (a) Additional borrowing capacity is available under the incremental facility, subject to certain terms and conditions (including existing or new lenders providing commitments in respect of such additional borrowing capacity). (b) Use of the sublimits for the issuance of letters of credit and swingline loans reduces the availability under the Revolving Facility. |
Schedule of availability under the Revolving Facility | The following table summarizes our availability under the Revolving Facility, in thousands: As of September 30, December 31, 2020 2019 Revolving Facility $ 450,000 $ 250,000 Less: standby letters of credit (60,382) (61,382) Availability under Revolving Facility $ 389,618 $ 188,618 |
Schedule of the key financial covenants | As of September 30, 2020 Maximum Net Leverage Ratio 3.50:1.00 Minimum Interest Coverage Ratio 3.00:1.00 Compliance as of period end In Compliance |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Segment Information | |
Schedule of net sales and operating results by segment | The following tables set forth our net sales and operating results by segment, in thousands: Three Months Ended September 30, 2020 2019 2020 2019 Net Sales Operating Profit (b) Our operations by segment were (a): Installation $ 492,206 $ 498,390 $ 83,142 $ 69,846 Distribution 244,113 220,947 32,787 23,406 Intercompany eliminations (39,096) (37,007) (6,374) (5,935) Total $ 697,223 $ 682,330 109,555 87,317 General corporate expense, net (c) (8,032) (6,872) Operating profit, as reported 101,523 80,445 Other expense, net (7,606) (8,854) Income before income taxes $ 93,917 $ 71,591 Nine Months Ended September 30, 2020 2019 2020 2019 Net Sales Operating Profit (b) Our operations by segment were (a): Installation $ 1,434,648 $ 1,430,800 $ 213,136 $ 189,568 Distribution 674,672 638,899 81,612 65,154 Intercompany eliminations (112,769) (107,928) (18,169) (18,013) Total $ 1,996,551 $ 1,961,771 276,579 236,709 General corporate expense, net (c) (24,610) (23,606) Operating profit, as reported 251,969 213,103 Other expense, net (24,296) (27,228) Income before income taxes $ 227,673 $ 185,875 (a) All of our operations are located in the U.S. (b) Segment operating profit includes an allocation of general corporate expenses attributable to the operating segments which is based on direct benefit or usage (such as salaries of corporate employees who directly support the segment). (c) General corporate expense, net includes expenses not specifically attributable to our segments for functions such as corporate human resources, finance, and legal, including salaries, benefits, and other related costs. |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Leases | |
Schedule of components of lease expense | The components of lease expense were as follows and are primarily included in cost of sales on the accompanying unaudited condensed consolidated statements of operations, in thousands: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Operating lease cost (a) $ 11,475 $ 12,393 $ 35,842 $ 38,597 Short-term lease cost 3,209 3,381 9,086 9,391 Sublease income (42) (153) (153) (461) Net lease cost $ 14,642 $ 15,621 $ 44,775 $ 47,527 (a) Includes variable cost components of $1,316 and $1,434 in the three months ended September 30, 2020 and 2019, respectively, and $4,090 and $4,201 of variable cost components in the nine months ended September 30, 2020 and 2019, respectively. |
Schedule of future minimum lease payments | Future minimum lease payments under non-cancellable operating leases as of September 30, 2020 were as follows, in thousands: Payments due by Period 2020 $ 10,234 2021 32,978 2022 22,083 2023 12,429 2024 7,135 2025 & Thereafter 7,189 Total future minimum lease payments 92,048 Less: imputed interest (6,629) Lease liability at September 30, 2020 $ 85,419 |
Schedule of cash flow information | The amount below is included in the cash flows provided by (used in) operating activities section on the accompanying unaudited condensed consolidated statements of cash flows, in thousands: Nine Months Ended September 30, 2020 2019 Cash paid for amounts included in the measurement of lease liabilities $ (31,862) $ (33,914) |
Income Per Share (Tables)
Income Per Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Income Per Share | |
Schedule of basic and diluted income per share | Basic and diluted net income per share were computed as follows: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Net income (in thousands) - basic and diluted $ 69,996 $ 54,976 $ 176,266 $ 145,011 Weighted average number of common shares outstanding - basic 32,847,652 33,790,857 32,960,969 33,977,464 Dilutive effect of common stock equivalents: RSAs with service-based conditions 42,317 82,087 53,719 86,373 RSAs with market-based conditions 159,985 195,740 145,835 183,537 RSAs with performance-based conditions 49,065 82,750 38,719 63,329 Stock options 111,526 216,468 138,017 230,932 Weighted average number of common shares outstanding - diluted 33,210,545 34,367,902 33,337,259 34,541,635 Basic net income per common share $ 2.13 $ 1.63 $ 5.35 $ 4.27 Diluted net income per common share $ 2.11 $ 1.60 $ 5.29 $ 4.20 |
Summary of shares excluded from the calculation of diluted income per share because their effect would have been anti-dilutive | The following table summarizes shares excluded from the calculation of diluted net income per share because their effect would have been anti-dilutive: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Anti-dilutive common stock equivalents: RSAs with service-based conditions — — 4,184 5,264 RSAs with market-based conditions — — 2,780 6,567 RSAs with performance-based conditions — — — — Stock options 26,556 12,642 39,998 72,580 Total anti-dilutive common stock equivalents 26,556 12,642 46,962 84,411 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Share-Based Compensation | |
Schedule of share-based compensation expense and related income tax benefit | The following table presents share-based compensation amounts recognized in our condensed consolidated statements of operations, in thousands: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Share-based compensation expense $ 3,121 $ 3,926 $ 12,159 $ 11,411 Income tax benefit realized $ 838 $ 1,304 $ 7,734 $ 5,110 |
Schedule of share-based compensation activity | The following table presents a summary of our share-based compensation activity for the nine months ended September 30, 2020, in thousands, except per share amounts: RSAs Stock Options Number of Shares Weighted Average Grant Date Fair Value Per Share Number of Shares Weighted Average Grant Date Fair Value Per Share Weighted Average Exercise Price Per Share Aggregate Balance December 31, 2019 411.6 $ 57.51 373.5 $ 17.06 $ 45.90 $ 21,356.4 Granted 192.8 $ 129.11 71.0 $ 39.49 $ 118.58 Converted/Exercised (251.1) $ 43.44 (184.8) $ 14.84 $ 39.54 $ 13,222.1 Forfeited/Expired (26.1) $ 90.81 (20.0) $ 30.13 $ 87.67 Balance September 30, 2020 327.2 $ 87.20 239.7 $ 24.33 $ 68.86 $ 22,925.1 Exercisable September 30, 2020 (a) 63.8 $ 18.89 $ 51.04 $ 7,638.0 (a) The weighted average remaining contractual term for vested stock options is approximately 6.5 years. |
Schedule of unrecognized share-based compensation expense relating to unvested awards | Unrecognized share-based compensation expense related to unvested awards is shown in the following table, dollars in thousands: As of September 30, 2020 Unrecognized Compensation Expense Weighted Average RSAs $ 11,536 1.2 years Stock options 1,359 1.0 years Total unrecognized compensation expense related to unvested awards $ 12,895 |
Schedule of assumptions used to estimate the fair values of options granted | The following table presents the assumptions used to estimate the fair values of stock options granted in 2020 and 2019: 2020 2019 Risk free interest rate 1.53 % 2.59 % Expected volatility, using historical return volatility and implied volatility 31.50 % 32.50 % Expected life (in years) 6.0 6.0 Dividend yield 0.00 % 0.00 % Estimated fair value of stock options at grant date $ 39.49 $ 21.16 |
Performance-based conditions | Restricted Stock Awards | |
Share-Based Compensation | |
Schedule of the range of payouts and the related expense for RSAs with performance-based conditions | The following table shows the range of payouts and the related expense for our outstanding RSAs with performance-based conditions, in thousands: Payout Ranges and Related Expense RSAs with Performance-Based Conditions Grant Date Fair Value 0% 25% 100% 200% February 19, 2018 $ 1,865 $ — $ 466 $ 1,865 $ 3,730 February 18, 2019 $ 2,281 $ — $ 570 $ 2,281 $ 4,562 February 17, 2020 $ 2,716 $ — $ 679 $ 2,716 $ 5,432 |
Market-based conditions | Restricted Stock Awards | |
Share-Based Compensation | |
Schedule of key inputs used to estimate the fair value of awards | The following are key inputs in the Monte Carlo analysis for awards granted in 2020 and 2019 2020 2019 Measurement period (in years) 2.88 2.87 Risk free interest rate 1.40 % 2.50 % Dividend yield 0.00 % 0.00 % Estimated fair value of market-based RSAs at grant date $ 158.24 $ 80.74 |
Share Repurchase Program (Table
Share Repurchase Program (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Share Repurchase Program | |
Schedule of share repurchase program | The following table sets forth our share repurchases under the 2019 and 2017 Repurchase Programs during the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Number of shares repurchased 57,810 364,074 582,254 (a) 810,077 (b) Share repurchase cost (in thousands) $ 8,997 $ 32,677 $ 43,149 $ 52,177 (a) The nine months ended September 30, 2020 includes 73,455 shares we received as final settlement of our 2019 ASR Agreement. (b) The nine months ended September 30, 2019 includes 176,327 shares we received as final settlement of our 2018 ASR Agreement . |
Business Combinations (Tables)
Business Combinations (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations | |
Schedule of fair value of contingent consideration | The following table presents the fair value of contingent consideration, in thousands: EcoFoam Viking Cooper Date of Acquisition February 27, 2017 July 15, 2019 February 20, 2020 Fair value of contingent consideration recognized at acquisition date $ 2,110 $ 1,243 $ 1,000 Contingent consideration at December 31, 2019 $ 822 $ 1,304 $ — Additions — — 1,000 Change in fair value of contingent consideration during the nine months ended September 30, 2020 19 85 — Payment of contingent consideration during the nine months ended September 30, 2020 (841) (500) — Liability balance for contingent consideration at September 30, 2020 $ — $ 889 $ 1,000 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Accrued Liabilities | |
Schedule of components of accrued liabilities | The following table sets forth the components of accrued liabilities, in thousands: As of September 30, December 31, 2020 2019 Accrued liabilities: Salaries, wages, and commissions $ 39,908 $ 32,154 Insurance liabilities 23,440 22,506 Deferred revenue 16,817 16,139 Interest payable on long-term debt 9,563 3,966 Other 27,728 23,653 Total accrued liabilities $ 117,456 $ 98,418 |
Other Commitments and Conting_2
Other Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Other Commitments and Contingencies | |
Summary of outstanding bonds | The following table summarizes our outstanding performance, licensing, insurance and other bonds, in thousands: As of September 30, December 31, 2020 2019 Outstanding bonds: Performance bonds $ 102,403 $ 87,286 Licensing, insurance, and other bonds 27,603 25,309 Total bonds $ 130,006 $ 112,595 |
Basis of Presentation (Details)
Basis of Presentation (Details) | 9 Months Ended |
Sep. 30, 2020segment | |
Basis of Presentation | |
Number of reportable segments | 2 |
Accounting Policies - Recently
Accounting Policies - Recently Adopted Accounting Pronouncements (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Recently Adopted Accounting Pronouncements | ||
Retained earnings | $ (805,900) | $ (632,862) |
Cumulative Effect, Period of Adoption, Adjustment | Accounting Standards Update 2016-13 | ||
Recently Adopted Accounting Pronouncements | ||
Retained earnings | $ 3,200 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenue Recognition | ||||
Net sales | $ 697,223 | $ 682,330 | $ 1,996,551 | $ 1,961,771 |
Insulation and accessories | ||||
Revenue Recognition | ||||
Net sales | 548,352 | 543,035 | 1,575,548 | 1,558,121 |
Glass and windows | ||||
Revenue Recognition | ||||
Net sales | 41,912 | 37,885 | 122,603 | 114,839 |
Rain gutters | ||||
Revenue Recognition | ||||
Net sales | 44,470 | 39,963 | 119,871 | 110,225 |
All other | ||||
Revenue Recognition | ||||
Net sales | 62,489 | 61,447 | 178,529 | 178,586 |
Residential | ||||
Revenue Recognition | ||||
Net sales | 545,688 | 522,506 | 1,557,954 | 1,503,300 |
Commercial | ||||
Revenue Recognition | ||||
Net sales | 151,535 | 159,824 | 438,597 | 458,471 |
Operating Segment | ||||
Revenue Recognition | ||||
Net sales | 697,223 | 682,330 | 1,996,551 | 1,961,771 |
Operating Segment | Installation | ||||
Revenue Recognition | ||||
Net sales | 492,206 | 498,390 | 1,434,648 | 1,430,800 |
Operating Segment | Installation | Insulation and accessories | ||||
Revenue Recognition | ||||
Net sales | 379,958 | 388,796 | 1,110,952 | 1,116,292 |
Operating Segment | Installation | Glass and windows | ||||
Revenue Recognition | ||||
Net sales | 41,912 | 37,885 | 122,603 | 114,839 |
Operating Segment | Installation | Rain gutters | ||||
Revenue Recognition | ||||
Net sales | 21,336 | 23,177 | 61,843 | 63,669 |
Operating Segment | Installation | All other | ||||
Revenue Recognition | ||||
Net sales | 49,000 | 48,532 | 139,250 | 136,000 |
Operating Segment | Installation | Residential | ||||
Revenue Recognition | ||||
Net sales | 390,101 | 386,887 | 1,134,350 | 1,110,704 |
Operating Segment | Installation | Commercial | ||||
Revenue Recognition | ||||
Net sales | 102,105 | 111,503 | 300,298 | 320,096 |
Operating Segment | Distribution | ||||
Revenue Recognition | ||||
Net sales | 244,113 | 220,947 | 674,672 | 638,899 |
Operating Segment | Distribution | Insulation and accessories | ||||
Revenue Recognition | ||||
Net sales | 200,210 | 182,111 | 556,018 | 525,717 |
Operating Segment | Distribution | Rain gutters | ||||
Revenue Recognition | ||||
Net sales | 28,616 | 24,056 | 74,585 | 65,707 |
Operating Segment | Distribution | All other | ||||
Revenue Recognition | ||||
Net sales | 15,287 | 14,780 | 44,069 | 47,475 |
Operating Segment | Distribution | Residential | ||||
Revenue Recognition | ||||
Net sales | 186,408 | 165,200 | 512,479 | 478,753 |
Operating Segment | Distribution | Commercial | ||||
Revenue Recognition | ||||
Net sales | 57,705 | 55,747 | 162,193 | 160,146 |
Intercompany Eliminations and Other Adjustments | ||||
Revenue Recognition | ||||
Net sales | (39,096) | (37,007) | (112,769) | (107,928) |
Intercompany Eliminations and Other Adjustments | Insulation and accessories | ||||
Revenue Recognition | ||||
Net sales | (31,816) | (27,872) | (91,422) | (83,888) |
Intercompany Eliminations and Other Adjustments | Rain gutters | ||||
Revenue Recognition | ||||
Net sales | (5,482) | (7,270) | (16,557) | (19,151) |
Intercompany Eliminations and Other Adjustments | All other | ||||
Revenue Recognition | ||||
Net sales | (1,798) | (1,865) | (4,790) | (4,889) |
Intercompany Eliminations and Other Adjustments | Residential | ||||
Revenue Recognition | ||||
Net sales | (30,821) | (29,581) | (88,875) | (86,157) |
Intercompany Eliminations and Other Adjustments | Commercial | ||||
Revenue Recognition | ||||
Net sales | $ (8,275) | $ (7,426) | $ (23,894) | $ (21,771) |
Revenue Recognition - Other (De
Revenue Recognition - Other (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Revenue Recognition | ||
Customer contract period | 90 days | |
Contract Liabilities | ||
Deferred revenue | $ 16,817 | $ 16,139 |
Receivables, net | ||
Contract Assets | ||
Receivables, unbilled | 54,375 | 57,153 |
Accrued liabilities | ||
Contract Liabilities | ||
Deferred revenue | $ 16,817 | $ 16,139 |
Goodwill and Other Intangible_2
Goodwill and Other Intangibles - Goodwill (Details) $ in Thousands | 3 Months Ended | 9 Months Ended |
Dec. 31, 2019USD ($) | Sep. 30, 2020USD ($)item | |
Changes in the carrying amount of goodwill | ||
Number of reporting units | item | 2 | |
Gross Goodwill, at beginning of period | $ 2,129,939 | |
Additions | 11,803 | |
Gross Goodwill, at end of period | $ 2,129,939 | 2,141,742 |
Accumulated Impairment Losses | (762,021) | |
Net Goodwill | 1,367,918 | 1,379,721 |
Impairment of goodwill | 0 | |
Installation | ||
Changes in the carrying amount of goodwill | ||
Gross Goodwill, at beginning of period | 1,683,589 | |
Additions | 11,803 | |
Gross Goodwill, at end of period | 1,683,589 | 1,695,392 |
Accumulated Impairment Losses | (762,021) | |
Net Goodwill | 933,371 | |
Distribution | ||
Changes in the carrying amount of goodwill | ||
Gross Goodwill, at beginning of period | 446,350 | |
Gross Goodwill, at end of period | $ 446,350 | 446,350 |
Net Goodwill | $ 446,350 |
Goodwill and Other Intangible_3
Goodwill and Other Intangibles - Other intangible assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Other intangible assets | |||||
Gross Definite-lived intangible assets | $ 228,662 | $ 228,662 | $ 221,382 | ||
Accumulated Amortization | (56,272) | (56,272) | (40,260) | ||
Net definite-lived intangible assets | 172,390 | 172,390 | 181,122 | ||
Other intangible assets, net | 172,390 | 172,390 | $ 181,122 | ||
Amortization expense | $ 5,382 | $ 5,197 | $ 16,012 | $ 15,543 |
Long-Term Debt - Reconciliation
Long-Term Debt - Reconciliation (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Long-Term Debt | ||
Long-term debt | $ 719,984 | |
Unamortized debt issuance costs | (7,867) | $ (6,923) |
Total debt, net of unamortized debt issuance costs | 712,117 | 732,227 |
Less: current portion of long-term debt | 23,247 | 34,272 |
Total long-term debt | $ 688,870 | $ 697,955 |
Senior Notes | ||
Long-Term Debt | ||
Interest rate (as a percent) | 5.625% | 5.625% |
Long-term debt | $ 400,000 | $ 400,000 |
Term Loan Facility | ||
Long-Term Debt | ||
Long-term debt | 292,500 | 305,625 |
Equipment Notes | ||
Long-Term Debt | ||
Long-term debt | $ 27,484 | $ 33,525 |
Long-Term Debt - Schedule of de
Long-Term Debt - Schedule of debt maturity (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Schedule of Debt Maturity by Years: | ||
2020 | $ 5,790 | |
2021 | 23,326 | |
2022 | 29,276 | |
2023 | 28,837 | |
2024 | 30,255 | |
Thereafter | 602,500 | |
Total principal maturities | 719,984 | |
Senior Notes | ||
Schedule of Debt Maturity by Years: | ||
Thereafter | 400,000 | |
Total principal maturities | 400,000 | $ 400,000 |
Term Loan Facility | ||
Schedule of Debt Maturity by Years: | ||
2020 | 3,750 | |
2021 | 15,000 | |
2022 | 20,625 | |
2023 | 22,500 | |
2024 | 28,125 | |
Thereafter | 202,500 | |
Total principal maturities | 292,500 | 305,625 |
Equipment Notes | ||
Schedule of Debt Maturity by Years: | ||
2020 | 2,040 | |
2021 | 8,326 | |
2022 | 8,651 | |
2023 | 6,337 | |
2024 | 2,130 | |
Total principal maturities | $ 27,484 | $ 33,525 |
Long-Term Debt - Key Terms of C
Long-Term Debt - Key Terms of Credit Agreement (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2020 | Mar. 20, 2020 | Dec. 31, 2019 | |
Long-Term Debt | |||
Amount outstanding | $ 719,984 | ||
Term Loan Facility | |||
Long-Term Debt | |||
Amount outstanding | $ 292,500 | $ 305,625 | |
Senior Notes | |||
Long-Term Debt | |||
Interest rate (as a percent) | 5.625% | 5.625% | |
Amount outstanding | $ 400,000 | $ 400,000 | |
Equipment Notes | |||
Long-Term Debt | |||
Principal amount of debt | 41,600 | ||
Amount outstanding | 27,484 | 33,525 | |
Equipment notes issued | $ 0 | ||
Debt term | 5 years | ||
Equipment Notes | Minimum | |||
Long-Term Debt | |||
Interest rate (as a percent) | 2.80% | ||
Equipment Notes | Maximum | |||
Long-Term Debt | |||
Interest rate (as a percent) | 4.40% | ||
Revolving Facility | |||
Long-Term Debt | |||
Availability | $ 450,000 | $ 250,000 | |
Amended Credit Agreement | |||
Long-Term Debt | |||
Additional term loan and/or revolver capacity available under incremental facility | $ 300,000 | ||
Scheduled maturity date | Mar. 20, 2025 | ||
Amended Credit Agreement | Minimum | |||
Long-Term Debt | |||
Commitment fee (as a percent) | 0.15% | ||
Amended Credit Agreement | Maximum | |||
Long-Term Debt | |||
Commitment fee (as a percent) | 0.275% | ||
Amended Credit Agreement | Term Loan Facility | |||
Long-Term Debt | |||
Availability | $ 300,000 | $ 300,000 | |
Interest rate | 1.50% | ||
Amended Credit Agreement | Senior Notes | |||
Long-Term Debt | |||
Interest rate | 5.625% | ||
Amended Credit Agreement | Senior Notes | Change in Control Scenario | |||
Long-Term Debt | |||
Redemption price as a percentage of principal | 101.00% | ||
Amended Credit Agreement | Revolving Facility | |||
Long-Term Debt | |||
Availability | $ 450,000 | 450,000 | |
Sublimit for issuance of letters of credit under Revolving Facility* | 100,000 | 100,000 | |
Sublimit for swingline loans under Revolving Facility* | $ 35,000 | $ 35,000 | |
Amended Credit Agreement | Base Rate Borrowings | Minimum | |||
Long-Term Debt | |||
Applicable margin based on total leverage ratio | 0.00% | ||
Amended Credit Agreement | Base Rate Borrowings | Maximum | |||
Long-Term Debt | |||
Applicable margin based on total leverage ratio | 1.50% | ||
Amended Credit Agreement | LIBOR Rate Borrowings | |||
Long-Term Debt | |||
Interest rate floor (as a percent) | 0.50% | ||
Amended Credit Agreement | LIBOR Rate Borrowings | Minimum | |||
Long-Term Debt | |||
Applicable margin based on total leverage ratio | 1.00% | ||
Amended Credit Agreement | LIBOR Rate Borrowings | Maximum | |||
Long-Term Debt | |||
Applicable margin based on total leverage ratio | 2.50% | ||
Federal Funds Rate | Amended Credit Agreement | Base Rate Borrowings | |||
Long-Term Debt | |||
Basis spread | 0.50% | ||
LIBOR | Amended Credit Agreement | Base Rate Borrowings | |||
Long-Term Debt | |||
Basis spread | 1.00% | ||
Maturity of the reference rate | 1 month |
Long-Term Debt - Other (Details
Long-Term Debt - Other (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2020 | Mar. 20, 2020 | Dec. 31, 2019 | |
Senior Notes | Event of Default Scenario | Amended Credit Agreement | |||
Debt covenants | |||
Minimum percentage of principal of debt holders to declare debt immediately due and payable | 25.00% | ||
Revolving Facility | |||
Long-Term Debt | |||
Revolving Facility | $ 450,000 | $ 250,000 | |
Less: standby letters of credit | (60,382) | (61,382) | |
Availability under Revolving Facility | 389,618 | $ 188,618 | |
Revolving Facility | Amended Credit Agreement | |||
Long-Term Debt | |||
Revolving Facility | $ 450,000 | $ 450,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Fair Value on Non-Recurring Basis | ||
Amount outstanding | $ 719,984 | |
Senior Notes | ||
Fair Value on Non-Recurring Basis | ||
Amount outstanding | 400,000 | $ 400,000 |
Fair Value on Non-Recurring Basis | Level 1 fair value measurement | Senior Notes | ||
Fair Value on Non-Recurring Basis | ||
Fair value | $ 417,000 |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Segment information | ||||
Net sales | $ 697,223 | $ 682,330 | $ 1,996,551 | $ 1,961,771 |
Operating profit | 101,523 | 80,445 | 251,969 | 213,103 |
Other expense, net | (7,606) | (8,854) | (24,296) | (27,228) |
Income before income taxes | 93,917 | 71,591 | 227,673 | 185,875 |
Rain gutters | ||||
Segment information | ||||
Net sales | 44,470 | 39,963 | 119,871 | 110,225 |
Operating Segment | ||||
Segment information | ||||
Net sales | 697,223 | 682,330 | 1,996,551 | 1,961,771 |
Operating profit | 109,555 | 87,317 | 276,579 | 236,709 |
Operating Segment | Installation | ||||
Segment information | ||||
Net sales | 492,206 | 498,390 | 1,434,648 | 1,430,800 |
Operating profit | 83,142 | 69,846 | 213,136 | 189,568 |
Operating Segment | Installation | Rain gutters | ||||
Segment information | ||||
Net sales | 21,336 | 23,177 | 61,843 | 63,669 |
Operating Segment | Distribution | ||||
Segment information | ||||
Net sales | 244,113 | 220,947 | 674,672 | 638,899 |
Operating profit | 32,787 | 23,406 | 81,612 | 65,154 |
Operating Segment | Distribution | Rain gutters | ||||
Segment information | ||||
Net sales | 28,616 | 24,056 | 74,585 | 65,707 |
Intercompany Eliminations and Other Adjustments | ||||
Segment information | ||||
Net sales | (39,096) | (37,007) | (112,769) | (107,928) |
Intercompany Eliminations and Other Adjustments | Rain gutters | ||||
Segment information | ||||
Net sales | (5,482) | (7,270) | (16,557) | (19,151) |
Intercompany Eliminations | ||||
Segment information | ||||
Net sales | (39,096) | (37,007) | (112,769) | (107,928) |
Operating profit | (6,374) | (5,935) | (18,169) | (18,013) |
Corporate | ||||
Segment information | ||||
General corporate expense, net | $ (8,032) | $ (6,872) | $ (24,610) | $ (23,606) |
Leases - Terms (Details)
Leases - Terms (Details) | 9 Months Ended |
Sep. 30, 2020 | |
Leases | |
Operating lease, option to extend | true |
Operating lease, option to terminate | true |
Leases - Components of lease ex
Leases - Components of lease expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Components of lease expense: | ||||
Operating lease cost | $ 11,475 | $ 12,393 | $ 35,842 | $ 38,597 |
Short-term lease cost | 3,209 | 3,381 | 9,086 | 9,391 |
Sublease income | (42) | (153) | (153) | (461) |
Net lease cost | 14,642 | 15,621 | 44,775 | 47,527 |
Variable lease cost | $ 1,316 | $ 1,434 | $ 4,090 | $ 4,201 |
Leases - Future minimum lease p
Leases - Future minimum lease payments (Details) $ in Thousands | Sep. 30, 2020USD ($) |
Future minimum lease payments under non-cancellable operating leases: | |
2020 | $ 10,234 |
2021 | 32,978 |
2022 | 22,083 |
2023 | 12,429 |
2024 | 7,135 |
2025 & Thereafter | 7,189 |
Total future minimum lease payments | 92,048 |
Less: imputed interest | (6,629) |
Lease liability at September 30, 2020 | $ 85,419 |
Leases - Cash flows and other (
Leases - Cash flows and other (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Leases | ||
Weighted average remaining lease term | 3 years 6 months | |
Weighted average discount rate (as a percent) | 3.90% | |
Cash paid for amounts included in the measurement of lease liabilities | $ (31,862) | $ (33,914) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Income Taxes | |||||
Effective tax rate (as a percent) | 25.50% | 23.20% | 22.60% | 22.00% | |
Tax benefit related to share-based compensation | $ 838 | $ 1,304 | $ 7,734 | $ 5,110 | |
Net deferred tax liability | 169,200 | 169,200 | |||
Net long-term deferred tax assets | 4,397 | 4,397 | $ 4,259 | ||
Net long-term deferred tax liabilities | $ 173,597 | $ 173,597 | $ 175,263 |
Income Per Share - Calculation
Income Per Share - Calculation (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Net income - basic and diluted | $ 69,996 | $ 55,496 | $ 50,771 | $ 54,976 | $ 52,051 | $ 37,983 | $ 176,266 | $ 145,011 |
Weighted average number of common shares outstanding - basic | 32,847,652 | 33,790,857 | 32,960,969 | 33,977,464 | ||||
Dilutive effect of common stock equivalents: | ||||||||
Stock options | 111,526 | 216,468 | 138,017 | 230,932 | ||||
Weighted average number of common shares outstanding - diluted | 33,210,545 | 34,367,902 | 33,337,259 | 34,541,635 | ||||
Basic net income per common share | $ 2.13 | $ 1.63 | $ 5.35 | $ 4.27 | ||||
Diluted net income per common share | $ 2.11 | $ 1.60 | $ 5.29 | $ 4.20 | ||||
Service-based conditions | ||||||||
Dilutive effect of common stock equivalents: | ||||||||
Restricted stock awards | 42,317 | 82,087 | 53,719 | 86,373 | ||||
Market-based conditions | ||||||||
Dilutive effect of common stock equivalents: | ||||||||
Restricted stock awards | 159,985 | 195,740 | 145,835 | 183,537 | ||||
Performance-based conditions | ||||||||
Dilutive effect of common stock equivalents: | ||||||||
Restricted stock awards | 49,065 | 82,750 | 38,719 | 63,329 |
Income Per Share - Anti-dilutiv
Income Per Share - Anti-dilutive common stock equivalents (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Anti-dilutive common stock equivalents | ||||
Total anti-dilutive common stock equivalents | 26,556 | 12,642 | 46,962 | 84,411 |
Restricted Stock Awards | Service-based conditions | ||||
Anti-dilutive common stock equivalents | ||||
Total anti-dilutive common stock equivalents | 4,184 | 5,264 | ||
Restricted Stock Awards | Market-based conditions | ||||
Anti-dilutive common stock equivalents | ||||
Total anti-dilutive common stock equivalents | 2,780 | 6,567 | ||
Stock Options | ||||
Anti-dilutive common stock equivalents | ||||
Total anti-dilutive common stock equivalents | 26,556 | 12,642 | 39,998 | 72,580 |
Share-Based Compensation - Expe
Share-Based Compensation - Expense (Details) - USD ($) $ in Thousands, shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Share-Based Compensation | ||||
Share-based compensation expense | $ 3,121 | $ 3,926 | $ 12,159 | $ 11,411 |
Income tax benefit realized | $ 838 | $ 1,304 | $ 7,734 | $ 5,110 |
2015 Plan | ||||
Share-Based Compensation | ||||
Number of shares available | 2.1 | 2.1 | ||
2015 Plan | Maximum | ||||
Share-Based Compensation | ||||
Number of shares authorized | 4 | 4 |
Share-Based Compensation - Acti
Share-Based Compensation - Activity (Details) - USD ($) | Feb. 17, 2020 | Feb. 18, 2019 | Feb. 19, 2018 | Sep. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 |
Stock Options, Number of Shares | |||||||
Converted/Exercised (in shares) | (19,242) | ||||||
Unrecognized share-based compensation expense | |||||||
Restricted stock awards, Unrecognized compensation expense | $ 11,536,000 | $ 11,536,000 | |||||
Restricted stock awards, Weighted average remaining vesting period | 1 year 2 months 12 days | ||||||
Stock options, Unrecognized compensation expense | 1,359,000 | $ 1,359,000 | |||||
Stock options, Weighted average remaining vesting period | 1 year | ||||||
Total unrecognized compensation expense related to unvested awards | $ 12,895,000 | $ 12,895,000 | |||||
Restricted Stock Awards | |||||||
Restricted Stock Awards, Number of Shares | |||||||
Balance at beginning of period (in shares) | 411,600 | ||||||
Granted (in shares) | 192,800 | ||||||
Converted/Exercised (in shares) | (251,100) | ||||||
Forfeited/Expired (in shares) | (26,100) | ||||||
Balance at end of period (in shares) | 327,200 | 327,200 | |||||
Restricted Stock Awards, Weighted Average Grant Date Fair Value Per Share | |||||||
Balance at beginning of period (in dollars per share) | $ 57.51 | ||||||
Granted (in dollars per share) | 129.11 | ||||||
Converted/Exercised (in dollars per share) | 43.44 | ||||||
Forfeited/Expired (in dollars per share) | 90.81 | ||||||
Balance at end of period (in dollars per share) | $ 87.20 | $ 87.20 | |||||
Assumptions used to estimate the fair values of the awards granted: | |||||||
Measurement period (years) | 2 years 10 months 17 days | 2 years 10 months 13 days | |||||
Risk free interest rate (as a percent) | 1.40% | 2.50% | |||||
Dividend yield (as a percent) | 0.00% | 0.00% | |||||
Estimated fair value of market-based RSAs at grant date (in dollars per share) | $ 158.24 | $ 80.74 | |||||
Stock Options | |||||||
Stock Options, Number of Shares | |||||||
Balance at beginning of period (in shares) | 373,500 | ||||||
Granted (in shares) | 71,000 | ||||||
Converted/Exercised (in shares) | (184,800) | ||||||
Forfeited/Expired (in shares) | (20,000) | ||||||
Balance at end of period (in shares) | 239,700 | 239,700 | |||||
Stock Options, Weighted Average Grant Date Fair Value Per Share | |||||||
Balance at beginning of period (in dollars per share) | $ 17.06 | ||||||
Granted (in dollars per share) | 39.49 | ||||||
Converted/Exercised (in dollars per share) | 14.84 | ||||||
Forfeited/Expired (in dollars per share) | 30.13 | ||||||
Balance at end of period (in dollars per share) | $ 24.33 | 24.33 | |||||
Stock Options, Weighted Average Exercise Price Per Share | |||||||
Balance at beginning of period (in dollars per share) | 45.90 | ||||||
Granted (in dollars per share) | 118.58 | ||||||
Converted/Exercised (in dollars per share) | 39.54 | ||||||
Forfeited/Expired (in dollars per share) | 87.67 | ||||||
Balance at end of period (in dollars per share) | $ 68.86 | $ 68.86 | |||||
Stock options, additional disclosures | |||||||
Aggregate intrinsic value | $ 22,925,100 | $ 22,925,100 | $ 21,356,400 | ||||
Converted/Exercised aggregate intrinsic value | $ 13,222,100 | ||||||
Exercisable, Number of shares | 63,800 | 63,800 | |||||
Exercisable, Weighted Average Grant Date Fair Value Per Share | $ 18.89 | ||||||
Exercisable Weighted Average Exercise Price Per Share | $ 51.04 | $ 51.04 | |||||
Exercisable, Aggregate Intrinsic Value | $ 7,638,000 | $ 7,638,000 | |||||
Weighted average remaining contractual term for vested stock options | 6 years 6 months | ||||||
Assumptions used to estimate the fair values of the awards granted: | |||||||
Risk free interest rate (as a percent) | 1.53% | 2.59% | |||||
Expected volatility using historical return volatility and implied volatility (as a percent) | 31.50% | 32.50% | |||||
Expected life (in years) | 6 years | 6 years | |||||
Dividend yield (as a percent) | 0.00% | 0.00% | |||||
Estimated fair value of market-based RSAs at grant date (in dollars per share) | $ 39.49 | $ 21.16 | |||||
Performance-based conditions | Restricted Stock Awards | |||||||
Restricted stock awards, additional disclosures | |||||||
Grant date fair value | $ 2,716,000 | $ 2,281,000 | $ 1,865,000 | ||||
Performance-based conditions | Restricted Stock Awards | Payout Range-0% | |||||||
Restricted stock awards, additional disclosures | |||||||
Payout range (as a percent) | 0.00% | 0.00% | 0.00% | ||||
Performance-based conditions | Restricted Stock Awards | Payout Range-25% | |||||||
Restricted stock awards, additional disclosures | |||||||
Payout range (as a percent) | 25.00% | 25.00% | 25.00% | ||||
Related expenses | $ 679,000 | $ 570,000 | $ 466,000 | ||||
Performance-based conditions | Restricted Stock Awards | Payout Range-100% | |||||||
Restricted stock awards, additional disclosures | |||||||
Payout range (as a percent) | 100.00% | 100.00% | 100.00% | ||||
Related expenses | $ 2,716,000 | $ 2,281,000 | $ 1,865,000 | ||||
Performance-based conditions | Restricted Stock Awards | Payout Range-200% | |||||||
Restricted stock awards, additional disclosures | |||||||
Payout range (as a percent) | 200.00% | 200.00% | 200.00% | ||||
Related expenses | $ 5,432,000 | $ 4,562,000 | $ 3,730,000 | ||||
Performance-based conditions | RSAs granted on February 21, 2017 | |||||||
Restricted stock awards, additional disclosures | |||||||
Cumulative period of achievement | 3 years | ||||||
Cumulative achievement percentage | 200.00% | ||||||
Total compensation expense recognized over the performance period, net of forfeitures | $ 3,300,000 |
Share Repurchase Program (Detai
Share Repurchase Program (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 11 Months Ended | 20 Months Ended | 23 Months Ended | |||||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Jun. 30, 2020 | Sep. 30, 2020 | Nov. 05, 2019 | Feb. 22, 2019 | Nov. 07, 2018 | |
Share Repurchase Program | ||||||||||||||
Number of shares repurchased (in shares) | 57,810 | 364,074 | 582,254 | 810,077 | ||||||||||
Share repurchase cost | $ 8,997 | $ 20,025 | $ 14,127 | $ 32,677 | $ 14,878 | $ 4,622 | $ 43,149 | $ 52,177 | ||||||
2019 Share Repurchase Program | ||||||||||||||
Share Repurchase Program | ||||||||||||||
Amount remaining under repurchase program | $ 46,000 | $ 46,000 | $ 46,000 | $ 46,000 | ||||||||||
2019 ASR Agreement | ||||||||||||||
Share Repurchase Program | ||||||||||||||
Number of shares repurchased (in shares) | 73,455 | 73,455 | 465,956 | |||||||||||
Average price per share (in dollars per share) | $ 107.31 | |||||||||||||
Initial number of shares delivered under ASR agreement (in shares) | 392,501 | |||||||||||||
Initial percentage of shares delivered under ASR agreement | 85.00% | |||||||||||||
Initial value of shares delivered under ASR agreement | $ 50,000 | |||||||||||||
2018 ASR Agreement | ||||||||||||||
Share Repurchase Program | ||||||||||||||
Number of shares repurchased (in shares) | 176,327 | 176,327 | 973,252 | 973,252 | ||||||||||
Average price per share (in dollars per share) | $ 51.37 | |||||||||||||
Initial number of shares delivered under ASR agreement (in shares) | 796,925 | |||||||||||||
Initial percentage of shares delivered under ASR agreement | 85.00% | |||||||||||||
Initial value of shares delivered under ASR agreement | $ 50,000 | |||||||||||||
Maximum | 2019 Share Repurchase Program | ||||||||||||||
Share Repurchase Program | ||||||||||||||
Share repurchase program, authorized amount | $ 200,000 |
Business Combinations - Summary
Business Combinations - Summary (Details) - USD ($) $ in Thousands | Feb. 24, 2020 | Feb. 20, 2020 | Jul. 15, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Business Combinations | |||||||
Acquisition related costs | $ 200 | $ 0 | $ 400 | $ 100 | |||
Goodwill recognized | 11,803 | ||||||
Viking | |||||||
Business Combinations | |||||||
Purchase price | $ 7,700 | ||||||
Cash consideration | 6,500 | ||||||
Contingent consideration | $ 1,200 | ||||||
Cooper Glass | |||||||
Business Combinations | |||||||
Purchase price | $ 11,500 | ||||||
Cash consideration | 10,500 | ||||||
Contingent consideration | $ 1,000 | ||||||
Goodwill recognized | 5,700 | ||||||
Hunter | |||||||
Business Combinations | |||||||
Purchase price | $ 9,100 | ||||||
Goodwill recognized | $ 5,300 |
Business Combinations - Conting
Business Combinations - Contingent Consideration (Details) - USD ($) | Feb. 20, 2020 | Jul. 15, 2019 | Feb. 27, 2017 | Sep. 30, 2020 | Sep. 30, 2020 |
Contingent Consideration | |||||
Payment of contingent consideration | $ 413,000 | ||||
EcoFoam | |||||
Contingent Consideration | |||||
Purchase price | $ 22,300,000 | ||||
Cash consideration | 20,200,000 | ||||
Contingent consideration | 2,100,000 | ||||
EcoFoam | Contingent Consideration | Level 3 | |||||
Contingent Consideration | |||||
Fair value of contingent consideration recognized at acquisition date | $ 2,110,000 | ||||
Fair value of contingent consideration | |||||
Contingent consideration at beginning of period | 822,000 | ||||
Change in fair value of contingent consideration | 19,000 | ||||
Payment of contingent consideration | $ 800,000 | (841,000) | |||
Liability balance for contingent consideration at end of period | 0 | 0 | |||
Viking | |||||
Contingent Consideration | |||||
Purchase price | $ 7,700,000 | ||||
Cash consideration | 6,500,000 | ||||
Contingent consideration | $ 1,200,000 | ||||
Contingent consideration, payment period | 3 years | ||||
Contingent consideration, low end of range | 0 | 0 | |||
Contingent consideration, high end of range | 1,500,000 | $ 1,500,000 | |||
Viking | Contingent Consideration | |||||
Contingent Consideration | |||||
Payment of contingent consideration | $ 500,000 | ||||
Viking | Contingent Consideration | Level 3 | |||||
Contingent Consideration | |||||
Business Combination, Contingent Consideration, Liability, Measurement Input [Extensible List] | us-gaap:MeasurementInputDiscountRateMember | us-gaap:MeasurementInputDiscountRateMember | |||
Discount rate (as a percent) | 10 | 10 | |||
Fair value of contingent consideration recognized at acquisition date | $ 1,243,000 | ||||
Fair value of contingent consideration | |||||
Contingent consideration at beginning of period | $ 1,304,000 | ||||
Change in fair value of contingent consideration | 85,000 | ||||
Payment of contingent consideration | (500,000) | ||||
Liability balance for contingent consideration at end of period | $ 889,000 | 889,000 | |||
Cooper Glass | |||||
Contingent Consideration | |||||
Purchase price | $ 11,500,000 | ||||
Cash consideration | 10,500,000 | ||||
Contingent consideration | $ 1,000,000 | ||||
Contingent consideration, payment period | 2 years | ||||
Contingent consideration, low end of range | 0 | 0 | |||
Contingent consideration, high end of range | 1,000,000 | 1,000,000 | |||
Cooper Glass | Contingent Consideration | Level 3 | |||||
Contingent Consideration | |||||
Fair value of contingent consideration recognized at acquisition date | $ 1,000,000 | ||||
Fair value of contingent consideration | |||||
Contingent consideration at beginning of period | |||||
Additions | 1,000,000 | ||||
Liability balance for contingent consideration at end of period | $ 1,000,000 | $ 1,000,000 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Accrued Liabilities | ||
Salaries, wages, and commissions | $ 39,908 | $ 32,154 |
Insurance liabilities | 23,440 | 22,506 |
Deferred revenue | 16,817 | 16,139 |
Interest payable on long-term debt | 9,563 | 3,966 |
Other | 27,728 | 23,653 |
Total accrued liabilities | $ 117,456 | $ 98,418 |
Other Commitments and Conting_3
Other Commitments and Contingencies (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Outstanding Bonds | ||
Performance bonds | $ 102,403 | $ 87,286 |
Licensing, insurance, and other bonds | 27,603 | 25,309 |
Total bonds | $ 130,006 | $ 112,595 |
Subsequent Events (Details)
Subsequent Events (Details) $ in Millions | Oct. 01, 2020USD ($) |
Subsequent Event | Garland Insulating | |
Subsequent Events | |
Purchase price | $ 62 |