Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 25, 2022 | |
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, 2022 | |
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 $0.01 per share | |
Trading Symbol | BLD | |
Security Exchange Name | NYSE | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 31,972,332 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 159,384 | $ 139,779 |
Receivables, net of an allowance for credit losses of $14,105 at September 30, 2022, and $8,798 at December 31, 2021 | 815,633 | 668,419 |
Inventories, net | 447,100 | 352,801 |
Prepaid expenses and other current assets | 27,416 | 26,692 |
Total current assets | 1,449,533 | 1,187,691 |
Right of use assets | 191,731 | 177,177 |
Property and equipment, net | 248,623 | 244,574 |
Goodwill | 1,966,234 | 1,949,763 |
Other intangible assets, net | 631,005 | 684,209 |
Other assets | 18,991 | 15,116 |
Total assets | 4,506,117 | 4,258,530 |
Current liabilities: | ||
Accounts payable | 510,163 | 461,917 |
Current portion of long-term debt | 37,367 | 38,640 |
Accrued liabilities | 181,455 | 175,891 |
Short-term operating lease liabilities | 57,268 | 54,591 |
Short-term finance lease liabilities | 2,328 | 2,387 |
Total current liabilities | 788,581 | 733,426 |
Long-term debt | 1,428,935 | 1,454,483 |
Deferred tax liabilities, net | 244,608 | 248,243 |
Long-term portion of insurance reserves | 61,243 | 51,875 |
Long-term operating lease liabilities | 138,923 | 125,339 |
Long-term finance lease liabilities | 6,170 | 7,770 |
Other liabilities | 3,218 | 960 |
Total liabilities | 2,671,678 | 2,622,096 |
Commitments and contingencies | ||
Equity: | ||
Preferred stock, $0.01 par value: 10,000,000 shares authorized; 0 shares issued and outstanding | ||
Common stock, $0.01 par value: 250,000,000 shares authorized; 39,325,465 shares issued and 31,974,006 outstanding at September 30, 2022, and 39,165,024 shares issued and 32,927,185 outstanding at December 31, 2021 | 393 | 391 |
Treasury stock, 7,351,459 shares at September 30, 2022, and 6,237,839 shares at December 31, 2021, at cost | (642,746) | (431,030) |
Additional paid-in capital | 884,729 | 873,031 |
Retained earnings | 1,612,830 | 1,200,676 |
Accumulated other comprehensive loss | (20,767) | (6,634) |
Total equity | 1,834,439 | 1,636,434 |
Total liabilities and equity | $ 4,506,117 | $ 4,258,530 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Allowance for doubtful accounts | $ 14,105 | $ 8,798 |
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 | 39,325,465 | 39,165,024 |
Common stock, shares outstanding | 31,974,006 | 32,927,185 |
Treasury stock, shares at cost | 7,351,459 | 6,237,839 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
Net sales | $ 1,300,998 | $ 845,757 | $ 3,744,201 | $ 2,422,810 |
Cost of sales | 905,250 | 595,466 | 2,633,155 | 1,731,581 |
Gross profit | 395,748 | 250,291 | 1,111,046 | 691,229 |
Selling, general, and administrative expense | 172,874 | 116,485 | 516,997 | 333,252 |
Operating profit | 222,874 | 133,806 | 594,049 | 357,977 |
Other income (expense), net: | ||||
Interest expense | (14,561) | (5,503) | (39,936) | (18,210) |
Loss on extinguishment of debt | (13,862) | |||
Other, net | (303) | 66 | 103 | 210 |
Other expense, net | (14,864) | (5,437) | (39,833) | (31,862) |
Income before income taxes | 208,010 | 128,369 | 554,216 | 326,115 |
Income tax expense | (54,264) | (32,934) | (142,060) | (80,457) |
Net income | $ 153,746 | $ 95,435 | $ 412,156 | $ 245,658 |
Net income per common share: | ||||
Basic | $ 4.79 | $ 2.91 | $ 12.72 | $ 7.49 |
Diluted | $ 4.76 | $ 2.88 | $ 12.63 | $ 7.41 |
Weighted average shares outstanding: | ||||
Basic | 32,076,285 | 32,763,311 | 32,404,275 | 32,818,145 |
Diluted | 32,279,820 | 33,088,680 | 32,643,161 | 33,155,995 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Net income | $ 153,746 | $ 95,435 | $ 412,156 | $ 245,658 |
Other comprehensive loss: | ||||
Foreign currency translation adjustment | (15,158) | (14,133) | ||
Comprehensive income | $ 138,588 | $ 95,435 | $ 398,023 | $ 245,658 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash Flows Provided by (Used in) Operating Activities: | ||
Net income | $ 412,156 | $ 245,658 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 93,051 | 51,005 |
Share-based compensation | 9,673 | 8,375 |
Loss on extinguishment of debt | 13,862 | |
Loss on sale of property and equipment | 76 | 1,410 |
Amortization of debt issuance costs | 2,147 | 1,352 |
Provision for bad debt expense | 8,837 | 5,215 |
Loss from inventory obsolescence | 5,127 | 1,667 |
Change in certain assets and liabilities | ||
Receivables, net | (152,578) | (62,257) |
Inventories, net | (101,148) | (30,115) |
Prepaid expenses and other current assets | (807) | (2,984) |
Accounts payable | 49,079 | 47,907 |
Accrued liabilities | 3,469 | 30,397 |
Other, net | 6,548 | (1,987) |
Net cash provided by operating activities | 335,630 | 309,505 |
Cash Flows Provided by (Used in) Investing Activities: | ||
Purchases of property and equipment | (56,044) | (42,320) |
Acquisition of businesses, net of cash acquired | (20,500) | (205,028) |
Proceeds from sale of property and equipment | 2,877 | 298 |
Net cash used in investing activities | (73,667) | (247,050) |
Cash Flows Provided by (Used in) Financing Activities: | ||
Proceeds from issuance of long-term debt | 411,250 | |
Repayment of long-term debt | (28,968) | (427,563) |
Payment of debt issuance costs | (6,500) | |
Proceeds from revolving credit facility | 70,000 | |
Repayment of revolving credit facility | (70,000) | |
Taxes withheld and paid on employees' equity awards | (11,719) | (11,511) |
Exercise of stock options | 2,028 | 5,952 |
Repurchase of shares of common stock | (200,050) | (35,556) |
Payment of contingent consideration | (1,674) | (628) |
Net cash used in financing activities | (240,383) | (64,556) |
Cash and Cash Equivalents | ||
Impact of exchange rate changes on cash | (1,975) | |
Net increase (decrease) in cash and cash equivalents | 19,605 | (2,101) |
Cash and cash equivalents- Beginning of period | 139,779 | 330,007 |
Cash and cash equivalents- End of period | 159,384 | 327,906 |
Supplemental disclosure of noncash activities: | ||
Leased assets obtained in exchange for new operating lease liabilities | 80,186 | 51,190 |
Accruals for property and equipment | $ 395 | $ 580 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands | Common Stock | Treasury Stock at Cost | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive (Loss) Income | Total |
Balance at Dec. 31, 2020 | $ 389 | $ (386,669) | $ 858,414 | $ 876,660 | $ 1,348,794 | |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 59,842 | 59,842 | ||||
Share-based compensation | 3,111 | 3,111 | ||||
Issuance of restricted share awards under long-term equity incentive plan | 1 | (1) | ||||
Repurchase of shares | (9,856) | (9,856) | ||||
Shares withheld to pay taxes on employees' equity awards | (11,480) | (11,480) | ||||
Shares issued upon exercise of stock options | 5,952 | 5,952 | ||||
Balance at Mar. 31, 2021 | 390 | (396,525) | 855,996 | 936,502 | 1,396,363 | |
Balance at Dec. 31, 2020 | 389 | (386,669) | 858,414 | 876,660 | 1,348,794 | |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 245,658 | |||||
Balance at Sep. 30, 2021 | 391 | (422,225) | 861,228 | 1,122,317 | 1,561,711 | |
Balance at Mar. 31, 2021 | 390 | (396,525) | 855,996 | 936,502 | 1,396,363 | |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 90,380 | 90,380 | ||||
Share-based compensation | 2,266 | 2,266 | ||||
Repurchase of shares | (14,182) | (14,182) | ||||
Shares withheld to pay taxes on employees' equity awards | (11) | (11) | ||||
Balance at Jun. 30, 2021 | 390 | (410,707) | 858,251 | 1,026,882 | 1,474,816 | |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 95,435 | 95,435 | ||||
Share-based compensation | 2,998 | 2,998 | ||||
Issuance of restricted share awards under long-term equity incentive plan | 1 | (1) | ||||
Repurchase of shares | (11,518) | (11,518) | ||||
Shares withheld to pay taxes on employees' equity awards | (20) | (20) | ||||
Balance at Sep. 30, 2021 | 391 | (422,225) | 861,228 | 1,122,317 | 1,561,711 | |
Balance at Dec. 31, 2021 | 391 | (431,030) | 873,031 | 1,200,676 | $ (6,634) | 1,636,434 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 114,711 | 114,711 | ||||
Share-based compensation | 3,727 | 3,727 | ||||
Issuance of restricted share awards under long-term equity incentive plan | 2 | (2) | ||||
Repurchase of shares | (50,000) | (50,000) | ||||
Shares withheld to pay taxes on employees' equity awards | (11,658) | (11,658) | ||||
Shares issued upon exercise of stock options | 808 | 808 | ||||
Other comprehensive income, net of tax | 3,218 | 3,218 | ||||
Balance at Mar. 31, 2022 | 393 | (492,688) | 877,564 | 1,315,387 | (3,416) | 1,697,240 |
Balance at Dec. 31, 2021 | 391 | (431,030) | 873,031 | 1,200,676 | (6,634) | 1,636,434 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 412,156 | |||||
Balance at Sep. 30, 2022 | 393 | (642,746) | 884,729 | 1,612,830 | (20,767) | 1,834,439 |
Balance at Mar. 31, 2022 | 393 | (492,688) | 877,564 | 1,315,387 | (3,416) | 1,697,240 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 143,697 | 143,697 | ||||
Share-based compensation | 3,334 | 3,334 | ||||
Repurchase of shares pursuant to ASR Agreement | (80,050) | (20,000) | (100,050) | |||
Shares withheld to pay taxes on employees' equity awards | (9) | (9) | ||||
Shares issued upon exercise of stock options | 644 | 644 | ||||
Other comprehensive income, net of tax | (2,193) | (2,193) | ||||
Balance at Jun. 30, 2022 | 393 | (572,747) | 861,542 | 1,459,084 | (5,609) | 1,742,663 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 153,746 | 153,746 | ||||
Share-based compensation | 2,611 | 2,611 | ||||
Repurchase of shares pursuant to the settlement of ASR Agreement | (20,000) | 20,000 | ||||
Repurchase of shares | (49,999) | (49,999) | ||||
Shares issued upon exercise of stock options | 576 | 576 | ||||
Other comprehensive income, net of tax | (15,158) | (15,158) | ||||
Balance at Sep. 30, 2022 | $ 393 | $ (642,746) | $ 884,729 | $ 1,612,830 | $ (20,767) | $ 1,834,439 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Parenthetical) - $ / shares | 3 Months Ended | |||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | |
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) | 52,940 | 897 | 30,284 | |||
Repurchase of shares pursuant to the settlement of ASR Agreement (in shares) | 142,351 | |||||
Repurchase of shares (in shares) | 269,544 | 238,154 | 60,105 | 73,747 | 49,284 | |
Repurchase of shares of common stock pursuant to Accelerated Share Repurchase Program (in shares) | 409,312 | |||||
Number of shares withheld to pay taxes on employees' equity awards (in shares) | 51 | 53,073 | 100 | 50 | 43,290 | |
Shares issued upon exercise of stock options (in shares) | 7,111 | 5,835 | 12,269 | 51,915 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2022 | |
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 Specialty Distribution. Our Installation segment primarily installs insulation and other building products. Our Specialty 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. We believe 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, 2022, our results of operations and comprehensive income for the three and nine months ended September 30, 2022 and 2021, and our cash flows for the nine months ended September 30, 2022 and 2021. The condensed consolidated balance sheet at December 31, 2021 was derived from our audited financial statements, but does not include all disclosures required by GAAP. We made the material acquisition of DI in October 2021 and it is therefore not included in the comparative periods of three and nine months ended September 30, 2021. 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, 2021, as filed with the SEC on February 22, 2022. |
Accounting Policies
Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
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 periods. Actual results could differ materially from these estimates. All significant intercompany transactions between TopBuild entities have been eliminated. Recently Adopted Accounting Pronouncements The following table summarizes additional ASUs which were adopted, but did not have a material impact on our accounting policies or our consolidated financial statements and related disclosures: ASU Description Period Adopted Method ASU 2019-12 Income Taxes - Simplifying the Accounting for Income Taxes 01/01/21 Modified Retrospective ASU 2021-01 Reference Rate Reform 01/01/21 Prospective Recently Issued Accounting Pronouncements Not Yet Adopted In October 2021, the FASB issued ASU 2021-08, “Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”. This standard improves the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to recognition of an acquired contract liability, as well as payment terms and their effect on subsequent revenue recognized by the acquirer. This standard is effective for us beginning January 1, 2023, with early adoption permitted. We are evaluating the impact that adoption of this standard may have on our financial position and results of operations. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2022 | |
Revenue Recognition | |
Revenue Recognition | 3. REVENUE RECOGNITION Revenue is disaggregated between our Installation and Specialty Distribution segments and further Three Months Ended September 30, 2022 2021 Installation Specialty Distribution Elims Total Installation Specialty Distribution Elims Total Residential $ 662,005 $ 245,549 $ (54,533) $ 853,021 $ 501,494 $ 206,951 $ (36,018) $ 672,427 Commercial 121,051 228,433 (11,068) 338,416 111,406 69,447 (7,523) 173,330 Industrial - 109,561 - 109,561 - - - - Net sales $ 783,056 $ 583,543 $ (65,601) $ 1,300,998 $ 612,900 $ 276,398 $ (43,541) $ 845,757 Nine Months Ended September 30, 2022 2021 Installation Specialty Distribution Elims Total Installation Specialty Distribution Elims Total Residential $ 1,859,386 $ 729,787 $ (147,962) $ 2,441,211 $ 1,405,837 $ 602,059 $ (106,076) $ 1,901,820 Commercial 349,331 677,775 (31,750) 995,356 345,441 199,304 (23,755) 520,990 Industrial - 307,634 - 307,634 - - - - Net sales $ 2,208,717 $ 1,715,196 $ (179,712) $ 3,744,201 $ 1,751,278 $ 801,363 $ (129,831) $ 2,422,810 The following tables present our revenues disaggregated by product (in thousands): Three Months Ended September 30, 2022 Three Months Ended September 30, 2021 Installation Specialty Distribution Elims Total Installation Specialty Distribution Elims Total Insulation and accessories $ 619,613 $ 516,214 $ (56,368) $ 1,079,459 $ 487,798 $ 219,441 $ (36,406) $ 670,833 Glass and windows 60,375 - - 60,375 46,096 - - 46,096 Gutters 28,729 48,972 (8,110) 69,591 23,057 40,555 (6,422) 57,190 All other 74,339 18,357 (1,123) 91,573 55,949 16,402 (713) 71,638 Net sales $ 783,056 $ 583,543 $ (65,601) $ 1,300,998 $ 612,900 $ 276,398 $ (43,541) $ 845,757 Nine Months Ended September 30, 2022 Nine Months Ended September 30, 2021 Installation Specialty Distribution Elims Total Installation Specialty Distribution Elims Total Insulation and accessories $ 1,746,054 $ 1,514,481 $ (153,520) $ 3,107,015 $ 1,383,472 $ 651,192 $ (108,125) $ 1,926,539 Glass and windows 168,692 - - 168,692 136,309 - - 136,309 Gutters 78,926 146,481 (23,207) 202,200 64,831 103,244 (17,992) 150,083 All other 215,045 54,234 (2,985) 266,294 166,666 46,927 (3,714) 209,879 Net sales $ 2,208,717 $ 1,715,196 $ (179,712) $ 3,744,201 $ 1,751,278 $ 801,363 $ (129,831) $ 2,422,810 The following table represents our contract assets and contract liabilities with customers, in thousands: Included in Line Item on As of Condensed September 30, December 31, Balance Sheets 2022 2021 Contract Assets: Receivables, unbilled Receivables, net $ 83,232 $ 71,401 Contract Liabilities: Deferred revenue Accrued liabilities $ 21,991 $ 14,310 The aggregate amount remaining on uncompleted performance obligations was $425.5 million as of September 30, 2022. We expect to satisfy the performance obligations and recognize revenue on substantially all of these uncompleted contracts over the next 18 months . Certain customer contracts contain provisions whereby customers are entitled to withhold an agreed upon percentage of the total contract value until the customer’s project is satisfactorily complete. This amount held back is referred to as retainage and is a common practice in the construction industry. Retainage receivables are classified as trade receivables, which is a component of Receivables, net on our condensed consolidated balance sheets and were $59.8 million and $57.6 million as of September 30, 2022 and December 31, 2021, respectively. |
Goodwill and Other Intangibles
Goodwill and Other Intangibles | 9 Months Ended |
Sep. 30, 2022 | |
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 Specialty 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 2021, we performed an annual assessment on our goodwill resulting in no impairment and there were no indicators of impairment for the nine months ended September 30, 2022. Changes in the carrying amount of goodwill for nine months ended September 30, 2022, by segment, were as follows, in thousands: Fx Accumulated Gross Goodwill Translation Gross Goodwill Impairment Net Goodwill December 31, 2021 Additions Adjustment September 30, 2022 Losses September 30, 2022 Goodwill, by segment: Installation $ 1,818,872 $ 8,107 - $ 1,826,979 $ (762,021) $ 1,064,958 Specialty Distribution 892,912 10,585 (2,221) 901,276 - 901,276 Total goodwill $ 2,711,784 $ 18,692 $ (2,221) $ 2,728,255 $ (762,021) $ 1,966,234 See Note 12 – 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, 2022 2021 Gross definite-lived intangible assets $ 781,374 $ 783,843 Accumulated amortization (150,369) (99,634) Net definite-lived intangible assets $ 631,005 $ 684,209 The following table sets forth our amortization expense, in thousands: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Amortization expense $ 16,970 $ 7,082 $ 50,809 $ 20,424 |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2022 | |
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, 2022 2021 3.625% Senior Notes due 2029 $ 400,000 $ 400,000 4.125% Senior Notes due 2032 500,000 500,000 Term loan 573,750 596,250 Equipment notes 10,625 17,085 Unamortized debt issuance costs (18,073) (20,212) Total debt, net of unamortized debt issuance costs 1,466,302 1,493,123 Less: current portion of long-term debt 37,367 38,640 Total long-term debt $ 1,428,935 $ 1,454,483 The following table sets forth our remaining principal payments for our outstanding debt balances as of September 30, 2022, in thousands: Payments Due by Period 2022 2023 2024 2025 2026 Thereafter Total 3.625% Senior Notes $ - $ - $ - $ - $ - $ 400,000 $ 400,000 4.125% Senior Notes - - - - - 500,000 500,000 Term loan 7,500 33,750 45,000 48,750 438,750 - 573,750 Equipment notes 2,191 6,325 2,109 - - - 10,625 Total $ 9,691 $ 40,075 $ 47,109 $ 48,750 $ 438,750 $ 900,000 $ 1,484,375 Amendments to Credit Agreement and Senior Secured Term Loan Facility On March 8, 2021, the Company entered into Amendment No. 1 to Credit Agreement. Amendment No. 1 to Credit Agreement provided for a term loan facility in an aggregate principal amount of $300.0 million, all of which was drawn on March 8, 2021, 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. Amendment No. 1 to Credit Agreement extended the maturity date from March 2025 to March 2026, the floor for base rate loans was reduced from 1.5% to 1.0%, and the floor for Eurodollar rate loans was reduced from 0.5% to 0.0%. Additional provisions were made for the eventual replacement of LIBOR with another alternate benchmark rate. On October 7, 2021, the Company entered into Amendment No. 2 to Credit Agreement. Amendment No. 2 to Credit Agreement provides for a term loan facility in an aggregate principal amount of $600.0 million, comprised of a $300.0 million term loan facility and a $300.0 million delayed draw term loan commitment, all of which was drawn on October 7, 2021, and a revolving facility with an aggregate borrowing capacity of $500.0 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 Amendment No. 2 to Credit Agreement was extended from March 2026 to October 2026. Additional provisions were also made for the eventual replacement of LIBOR with an alternative benchmark rate. The following table outlines the key terms of our Amendment No. 2 to Credit Agreement (dollars in thousands): Senior secured term loan facility $ 300,000 Additional delayed draw term loan $ 300,000 Additional term loan and/or revolver capacity available under incremental facility (a) $ 300,000 Revolving facility $ 500,000 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, 2022 3.52 % Scheduled maturity date 10/7/2026 (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 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% . Amendment No. 2 to Credit Agreement contemplates future amendment by the Company and the agent to provide for the replacement of LIBOR with an alternative 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 1.00 percent and in the case of LIBOR rate borrowings, the applicable margin ranges from 1.00 percent to 2.50 percent. Borrowings under Amendment No. 2 to 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, 2022 2021 Revolving facility $ 500,000 $ 500,000 Less: standby letters of credit (67,689) (69,936) Availability under revolving facility $ 432,311 $ 430,064 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. 3.625% Senior Notes On March 15, 2021, the Company completed a private offering of $400.0 million aggregate principal amount of 3.625% Senior Notes due 2029. The Company used the proceeds from the issuance of the 3.625% Senior Notes, together with cash on hand, to redeem 100% of its $400.0 million aggregate principal amount of 5.625% Senior Notes due 2026. The 3.625% Senior Notes are our senior unsecured obligations and bear interest at 3.625% per year, payable semiannually in arrears on March 15 and September 15 of each year, which began September 15, 2021. The 3.625% Senior Notes mature on March 15, 2029, unless redeemed early or repurchased. If we undergo a change in control, we must make an offer to repurchase all of the 3.625% 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. The Company may redeem the 3.625% Senior Notes, in whole or in part, at any time on or after March 15, 2024 at the redemption prices specified in the notes. The Company may also redeem all or part of the 3.625% Senior Notes at any time prior to March 15, 2024 at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus the Applicable Premium (as defined in the Indenture), as of, and accrued and unpaid interest to, the redemption date. Additionally, the Company may redeem up to 40% of the aggregate principal amount of the 3.625% Senior Notes prior to March 15, 2024 with the net cash proceeds of certain sales of its capital stock at 103.625% of the principal amount of the notes, plus accrued and unpaid interest, if any, to the date of redemption only if, after the redemption, at least 60% of the aggregate principal amount of the 3.625% Senior Notes originally issued remains outstanding. 4.125% Senior Notes On October 14, 2021, the Company completed a private offering of $500.0 million aggregate principal amount of 4.125% Senior Notes due 2032. The 4.125% Senior Notes are senior unsecured obligations and bear interest at 4.125% per year, payable semiannually in arrears on February 15 and August 15, beginning on August 15, 2022. The 4.125% Senior Notes mature on February 15, 2032, unless redeemed early or repurchased. If we undergo a change in control, we must make an offer to repurchase all of the 4.125% 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. The Company may redeem the 4.125% Senior Notes, in whole or in part, at any time on or after October 15, 2026 at the redemption prices specified in the notes plus accrued and unpaid interest if redeemed during the 12 month period commencing on October 15 of the years set for: 2026 – 102.063%, 2027 – 101.375%, 2028 – 100.688%, 2029 and thereafter – 100.000%. The Company may also redeem a make-whole redemption of the 4.125% Senior Notes at any time prior to October 15, 2026 at the treasury rate plus 50 bps. Additionally, the Company may redeem up to 40% of the aggregate principal amount of the 4.125% Senior Notes prior to October 15, 2024 with the net cash proceeds of certain sales of its capital stock at 104.125% of the principal amount of the notes, plus accrued and unpaid interest, if any, to the date of redemption only if, after the redemption, at least 60% of the aggregate principal amount of the notes originally issued remains outstanding. Equipment Notes As of September 30, 2022, the company has outstanding $10.6 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, 2022. 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 indentures governing our 3.625% Senior Notes and our 4.125% Senior Notes (together, our “Senior Notes”) contain restrictive covenants that, among other things, generally limit the ability of the Company and certain of its subsidiaries (subject to certain exceptions) to (i) create liens, (ii) pay dividends, acquire shares of capital stock and make payments on subordinated debt, (iii) place limitations on distributions from certain subsidiaries, (iv) issue or sell the capital stock of certain subsidiaries, (v) sell assets, (vi) enter into transactions with affiliates and (vii) effect mergers. The indentures provide for customary events of default which include (subject in certain cases to customary grace and cure periods), among others: nonpayment of principal or interest; breach of covenants or other agreements in the indenture; defaults in failure to pay certain other indebtedness; and certain events of bankruptcy or insolvency. Generally, if an event of default occurs and is continuing under the indenture, the trustee or the holders of at least 30% in aggregate principal amount of each of our Senior Notes then outstanding may declare the principal of, premium, if any, and accrued interest on the Senior Notes subject to such declaration 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 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 Credit Agreement contains customary affirmative covenants and events of default. The 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, 2022 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, 2022 | |
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 12 – Business Combinations. Fair Value on Non-Recurring Basis Fair value measurements were applied to our long-term debt portfolio. As of September 30, 2022 Fair Value Gross Carrying Value 3.625% Senior Notes $ 321,000 $ 400,000 4.125% Senior Notes $ 391,250 $ 500,000 |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2022 | |
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, 2022 2021 2022 2021 Net Sales Operating Profit (b) Our operations by segment were (a): Installation $ 783,056 $ 612,900 $ 154,236 $ 105,046 Specialty Distribution 583,543 276,398 88,364 47,162 Intercompany eliminations (65,601) (43,541) (10,806) (7,590) Total $ 1,300,998 $ 845,757 231,794 144,618 General corporate expense, net (c) (8,920) (10,812) Operating profit, as reported 222,874 133,806 Other expense, net (14,864) (5,437) Income before income taxes $ 208,010 $ 128,369 Nine Months Ended September 30, 2022 2021 2022 2021 Net Sales Operating Profit (b) Our operations by segment were (a): Installation $ 2,208,717 $ 1,751,278 $ 406,835 $ 277,748 Specialty Distribution 1,715,196 801,363 245,534 125,403 Intercompany eliminations (179,712) (129,831) (29,949) (21,050) Total $ 3,744,201 $ 2,422,810 622,420 382,101 General corporate expense, net (c) (28,371) (24,124) Operating profit, as reported 594,049 357,977 Other expense, net (39,833) (31,862) Income before income taxes $ 554,216 $ 326,115 (a) All of our operations are located primarily in the U.S and to a lesser extent Canada. (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 . |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2022 | |
Income Taxes | |
Income Taxes | 8. INCOME TAXES Our effective tax rates were 26.1 percent and 25.6 percent for the three and nine months ended September 30, 2022, respectively. The effective tax rates for the three and nine months ended September 30, 2021 were 25.7 percent and 24.7 percent, respectively. The higher tax rate for the three months ended September 30, 2022, compared to the three months ended September 30, 2021 was due to state tax adjustments and miscellaneous items , partially offset by a decrease in tax expense related to share-based compensation. A tax benefit of $1.5 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 nine months ended September 30, 2022. |
Net Income Per Share
Net Income Per Share | 9 Months Ended |
Sep. 30, 2022 | |
Net Income Per Share | |
Net Income Per Share | 9. NET 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, 2022 2021 2022 2021 Net income (in thousands) $ 153,746 $ 95,435 $ 412,156 $ 245,658 Weighted average number of common shares outstanding - basic 32,076,285 32,763,311 32,404,275 32,818,145 Dilutive effect of common stock equivalents: RSAs with service-based conditions 17,175 15,058 14,808 22,044 RSAs with market-based conditions 44,001 115,105 65,677 126,769 RSAs with performance-based conditions 40,995 73,597 48,232 60,595 Stock options 101,364 121,609 110,169 128,442 Weighted average number of common shares outstanding - diluted 32,279,820 33,088,680 32,643,161 33,155,995 Basic net income per common share $ 4.79 $ 2.91 $ 12.72 $ 7.49 Diluted net income per common share $ 4.76 $ 2.88 $ 12.63 $ 7.41 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, 2022 2021 2022 2021 Anti-dilutive common stock equivalents: RSAs with service-based conditions 15,222 176 14,782 1,607 RSAs with market-based conditions 134 11,065 200 9,235 RSAs with performance-based conditions 14,611 - 7,506 - Stock options 22,280 24,066 20,581 19,966 Total anti-dilutive common stock equivalents 52,247 35,307 43,069 30,808 |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Compensation. | |
Share-Based Compensation | 10. 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, 2022, we had 1.9 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, 2022 2021 2022 2021 Share-based compensation expense $ 2,611 $ 2,998 $ 9,673 $ 8,375 Income tax (expense) benefit $ (56) $ (130) $ 1,517 $ 3,190 The following table presents a summary of our share-based compensation activity for nine months ended September 30, 2022 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 Intrinsic Value Balance December 31, 2021 244.4 $ 119.41 210.5 $ 32.35 $ 87.30 $ 39,692.4 Granted 105.8 $ 177.36 — $ — $ — — Converted/Exercised (168.1) $ 75.65 (25.2) $ 27.92 $ 80.40 $ 3,183.0 Forfeited/Expired (10.6) $ 223.63 (3.1) $ 68.81 $ 174.76 — Balance September 30, 2022 171.5 $ 194.71 182.2 $ 32.25 $ 86.79 $ 15,317.8 Exercisable September 30, 2022 (a) 148.4 $ 25.71 $ 69.94 $ 14,443.4 (a) The weighted average remaining contractual term for vested stock options is approximately 5.5 years. Unrecognized share-based compensation expense related to unvested awards is shown in the following table, dollars in thousands: As of September 30, 2022 Unrecognized Compensation Expense on Unvested Awards Weighted Average Remaining Compensation Expense Period RSAs $ 15,203 1.0 Stock options 677 0.7 Total unrecognized compensation expense related to unvested awards $ 15,880 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 17, 2020 $ 2,526 $ 0 $ 632 $ 2,526 $ 5,052 February 16, 2021 $ 2,374 $ 0 $ 594 $ 2,374 $ 4,748 February 15, 2022 $ 3,411 $ 0 $ 853 $ 3,411 $ 6,822 During the first quarter of 2022, RSAs with performance-based conditions that were granted on February 18, 2019 vested based on cumulative three-year achievement of 200%. Total compensation expense recognized over the three-year performance period, net of forfeitures, was $4.4 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 2022 and 2021: 2022 2021 Measurement period (years) 2.87 2.87 Risk free interest rate 1.76 % 0.22 % Dividend yield 0.00 % 0.00 % Estimated fair value of market-based RSAs at grant date $ 298.20 $ 298.66 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 2021. There were no stock options issued in the first nine months of 2022. 2021 Risk free interest rate 0.76 % Expected volatility, using historical return volatility and implied volatility 43.29 % Expected life (in years) 6.0 Dividend yield 0.00 % Estimated fair value of stock options at grant date $ 89.59 |
Share Repurchase Program
Share Repurchase Program | 9 Months Ended |
Sep. 30, 2022 | |
Share Repurchase Program | |
Share Repurchase Program | 11. SHARE REPURCHASE PROGRAM On July 25, 2022, our Board authorized the 2022 Repurchase Program, pursuant to which the Company may purchase up to $200 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 2022 Repurchase Program does not obligate the Company to purchase any shares and has no expiration date. Authorization for the 2022 Repurchase Program may be terminated, increased, or decreased by the Board at its discretion at any time. On July 26, 2021, our Board authorized the 2021 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 2021 Repurchase Program does not obligate the Company to purchase any shares and has no expiration date. Authorization for the 2021 Repurchase Program may be terminated, increased, or decreased by the Board at its discretion at any time. As of September 30, 2022, the Company has $4.4 million remaining under the 2021 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 Repurchase Program does not obligate the Company to purchase any shares and has no expiration date. Authorization for the 2019 Repurchase Program may be terminated, increased, or decreased by the Board at its discretion at any time. As of September 30, 2022 the Company has utilized all amounts authorized under the 2019 Repurchase Program. On May 5, 2022, the Company entered into the 2022 ASR Agreement under the 2021 Repurchase Program. We paid $100 million in exchange for an initial delivery of 409,312 shares of our common stock on May 9, 2022, representing an estimated 80% of the total number of shares we expected to receive under the 2022 ASR Agreement at the time we entered into the agreement. During the quarter ended September 30, 2022, we received an additional 142,351 shares of our common stock representing the final settlement of the 2022 ASR Agreement. We purchased a total of 551,663 shares of our common stock under the 2022 ASR Agreement at an average price per share of $181.27. The following table sets forth our share repurchases under the Repurchase Programs during the periods presented. These repurchases closed out the 2019 Share Repurchase Program with the balance repurchased under the 2021 Share Repurchase Program. Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Number of shares repurchased 411,895 (a) 60,105 1,059,361 183,136 Share repurchase cost (in thousands) $ 50,000 $ 11,518 $ 200,050 $ 35,556 (a) The three months ended September 30, 2022 includes |
Business Combinations
Business Combinations | 9 Months Ended |
Sep. 30, 2022 | |
Business Combinations | |
Business Combinations | 12. BUSINESS COMBINATIONS Acquiring businesses is a key 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.” We incurred no acquisition related costs for the three months ended September 30, 2022 and incurred $2.7 million of acquisition related costs in the three months ended September 30, 2021. Acquisition related costs for the nine months ended September 30, 2022 and 2021 were $1.3 million and $3.4 million, respectively. Acquisition related costs are included in selling, general, and administrative expense in our condensed consolidated statements of operations. On October 15, 2021, we acquired DI for $1.0 billion and its results of operations and financial position are aggregated within our Specialty Distribution segment. The table below provides a summary as of September 30, 2022 for the businesses acquired during the nine months ended September 30, 2022: 2022 Acquisitions Date Cash Paid Contingent Consideration Total Purchase Price Goodwill Acquired Southwest 1/12/2022 $ 300 $ — $ 300 $ 215 Billings 2/3/2022 7,005 — 7,005 3,313 Green Energy 3/31/2022 1,200 — 1,200 565 Assured 4/7/2022 4,719 500 5,219 3,317 CV 7/21/2022 1,758 — 1,758 946 Total $ 14,982 $ 500 $ 15,482 $ 8,356 As third-party or internal valuations are finalized, certain tax aspects of the foregoing transactions are completed, and customer post-closing reviews are concluded, adjustments may be made to the fair value of assets acquired, and in some cases total purchase price, through the end of each measurement period, generally one year following the applicable acquisition date. To that note, during the nine months ended September 30, 2022, DI’s goodwill increased by $10.7 million primarily as a result of the finalization of purchase price adjustments to acquisition date sales and use tax liabilities, net working capital adjustments, property, plant and equipment, and true-ups to supplier rebate receivables. The table below represents the final fair value of DI’s assets and liabilities assumed as of September 30, 2022: Finalized purchase price fair values: Accounts receivable 145,042 Inventories 133,004 Prepaid and other assets 8,820 Property and equipment 37,562 ROU asset (operating) 66,698 Intangible assets 458,000 Goodwill 450,716 Accounts payable (68,367) Lease liabilities (76,066) Deferred tax liabilities (83,590) All other liabilities (35,854) Net assets acquired $ 1,035,965 The table below provides a summary as of September 30, 2022 for the businesses acquired during the nine months ended September 30, 2021: 2021 Acquisitions Date Cash Paid Contingent Consideration Total Purchase Price Goodwill Acquired LCR 1/20/2021 $ 53,700 — 53,700 19,500 ABS 4/5/2021 124,348 — 124,348 54,229 All others Various 26,977 1,200 28,177 12,001 Total $ 205,025 $ 1,200 $ 206,225 $ 85,730 Primarily all of the $8.4 million and $85.7 million of goodwill recorded from acquisitions completed in the nine months ended September 30, 2022 and 2021, respectively, is expected to be deductible for income tax purposes. |
Accrued Liabilities
Accrued Liabilities | 9 Months Ended |
Sep. 30, 2022 | |
Accrued Liabilities. | |
Accrued Liabilities | 13. ACCRUED LIABILITIES The following table sets forth the components of accrued liabilities, in thousands: As of September 30, 2022 December 31, 2021 Accrued liabilities: Salaries, wages, and commissions $ 72,367 $ 71,664 Insurance liabilities 29,435 24,425 Customer rebates 15,659 15,625 Deferred revenue 21,991 14,311 Employee tax-related liabilities 10,654 12,545 Sales and property taxes 14,552 9,364 Interest payable on long-term debt 3,366 8,798 Other 13,431 19,159 Total accrued liabilities $ 181,455 $ 175,891 See Note 3 – Revenue Recognition |
Other Commitments and Contingen
Other Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Other Commitments and Contingencies | |
Other Commitments and Contingencies | 14. 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, 2022 December 31, 2021 Outstanding bonds: Performance bonds $ 153,358 $ 128,173 Licensing, insurance, and other bonds 24,346 21,792 Total bonds $ 177,704 $ 149,965 |
Accounting Policies (Policies)
Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
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 periods. Actual results could differ materially from these estimates. All significant intercompany transactions between TopBuild entities have been eliminated. |
Recently Adopted and Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements The following table summarizes additional ASUs which were adopted, but did not have a material impact on our accounting policies or our consolidated financial statements and related disclosures: ASU Description Period Adopted Method ASU 2019-12 Income Taxes - Simplifying the Accounting for Income Taxes 01/01/21 Modified Retrospective ASU 2021-01 Reference Rate Reform 01/01/21 Prospective Recently Issued Accounting Pronouncements Not Yet Adopted In October 2021, the FASB issued ASU 2021-08, “Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”. This standard improves the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to recognition of an acquired contract liability, as well as payment terms and their effect on subsequent revenue recognized by the acquirer. This standard is effective for us beginning January 1, 2023, with early adoption permitted. We are evaluating the impact that adoption of this standard may have on our financial position and results of operations. |
Accounting Policies (Tables)
Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies | |
Summary of additional ASUs adopted in fiscal year | ASU Description Period Adopted Method ASU 2019-12 Income Taxes - Simplifying the Accounting for Income Taxes 01/01/21 Modified Retrospective ASU 2021-01 Reference Rate Reform 01/01/21 Prospective |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Revenue Recognition | |
Schedule of revenues disaggregated by market and product | Three Months Ended September 30, 2022 2021 Installation Specialty Distribution Elims Total Installation Specialty Distribution Elims Total Residential $ 662,005 $ 245,549 $ (54,533) $ 853,021 $ 501,494 $ 206,951 $ (36,018) $ 672,427 Commercial 121,051 228,433 (11,068) 338,416 111,406 69,447 (7,523) 173,330 Industrial - 109,561 - 109,561 - - - - Net sales $ 783,056 $ 583,543 $ (65,601) $ 1,300,998 $ 612,900 $ 276,398 $ (43,541) $ 845,757 Nine Months Ended September 30, 2022 2021 Installation Specialty Distribution Elims Total Installation Specialty Distribution Elims Total Residential $ 1,859,386 $ 729,787 $ (147,962) $ 2,441,211 $ 1,405,837 $ 602,059 $ (106,076) $ 1,901,820 Commercial 349,331 677,775 (31,750) 995,356 345,441 199,304 (23,755) 520,990 Industrial - 307,634 - 307,634 - - - - Net sales $ 2,208,717 $ 1,715,196 $ (179,712) $ 3,744,201 $ 1,751,278 $ 801,363 $ (129,831) $ 2,422,810 The following tables present our revenues disaggregated by product (in thousands): Three Months Ended September 30, 2022 Three Months Ended September 30, 2021 Installation Specialty Distribution Elims Total Installation Specialty Distribution Elims Total Insulation and accessories $ 619,613 $ 516,214 $ (56,368) $ 1,079,459 $ 487,798 $ 219,441 $ (36,406) $ 670,833 Glass and windows 60,375 - - 60,375 46,096 - - 46,096 Gutters 28,729 48,972 (8,110) 69,591 23,057 40,555 (6,422) 57,190 All other 74,339 18,357 (1,123) 91,573 55,949 16,402 (713) 71,638 Net sales $ 783,056 $ 583,543 $ (65,601) $ 1,300,998 $ 612,900 $ 276,398 $ (43,541) $ 845,757 Nine Months Ended September 30, 2022 Nine Months Ended September 30, 2021 Installation Specialty Distribution Elims Total Installation Specialty Distribution Elims Total Insulation and accessories $ 1,746,054 $ 1,514,481 $ (153,520) $ 3,107,015 $ 1,383,472 $ 651,192 $ (108,125) $ 1,926,539 Glass and windows 168,692 - - 168,692 136,309 - - 136,309 Gutters 78,926 146,481 (23,207) 202,200 64,831 103,244 (17,992) 150,083 All other 215,045 54,234 (2,985) 266,294 166,666 46,927 (3,714) 209,879 Net sales $ 2,208,717 $ 1,715,196 $ (179,712) $ 3,744,201 $ 1,751,278 $ 801,363 $ (129,831) $ 2,422,810 |
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 September 30, December 31, Balance Sheets 2022 2021 Contract Assets: Receivables, unbilled Receivables, net $ 83,232 $ 71,401 Contract Liabilities: Deferred revenue Accrued liabilities $ 21,991 $ 14,310 |
Goodwill and Other Intangibles
Goodwill and Other Intangibles (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Other Intangibles | |
Changes in the carrying amount of goodwill by segment | Changes in the carrying amount of goodwill for nine months ended September 30, 2022, by segment, were as follows, in thousands: Fx Accumulated Gross Goodwill Translation Gross Goodwill Impairment Net Goodwill December 31, 2021 Additions Adjustment September 30, 2022 Losses September 30, 2022 Goodwill, by segment: Installation $ 1,818,872 $ 8,107 - $ 1,826,979 $ (762,021) $ 1,064,958 Specialty Distribution 892,912 10,585 (2,221) 901,276 - 901,276 Total goodwill $ 2,711,784 $ 18,692 $ (2,221) $ 2,728,255 $ (762,021) $ 1,966,234 |
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, 2022 2021 Gross definite-lived intangible assets $ 781,374 $ 783,843 Accumulated amortization (150,369) (99,634) Net definite-lived intangible assets $ 631,005 $ 684,209 |
Schedule of amortization expense | As of September 30, December 31, 2022 2021 Gross definite-lived intangible assets $ 781,374 $ 783,843 Accumulated amortization (150,369) (99,634) Net definite-lived intangible assets $ 631,005 $ 684,209 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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, 2022 2021 3.625% Senior Notes due 2029 $ 400,000 $ 400,000 4.125% Senior Notes due 2032 500,000 500,000 Term loan 573,750 596,250 Equipment notes 10,625 17,085 Unamortized debt issuance costs (18,073) (20,212) Total debt, net of unamortized debt issuance costs 1,466,302 1,493,123 Less: current portion of long-term debt 37,367 38,640 Total long-term debt $ 1,428,935 $ 1,454,483 |
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, 2022, in thousands: Payments Due by Period 2022 2023 2024 2025 2026 Thereafter Total 3.625% Senior Notes $ - $ - $ - $ - $ - $ 400,000 $ 400,000 4.125% Senior Notes - - - - - 500,000 500,000 Term loan 7,500 33,750 45,000 48,750 438,750 - 573,750 Equipment notes 2,191 6,325 2,109 - - - 10,625 Total $ 9,691 $ 40,075 $ 47,109 $ 48,750 $ 438,750 $ 900,000 $ 1,484,375 |
Summary of key terms of Amended Credit Agreement | The following table outlines the key terms of our Amendment No. 2 to Credit Agreement (dollars in thousands): Senior secured term loan facility $ 300,000 Additional delayed draw term loan $ 300,000 Additional term loan and/or revolver capacity available under incremental facility (a) $ 300,000 Revolving facility $ 500,000 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, 2022 3.52 % Scheduled maturity date 10/7/2026 (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, 2022 2021 Revolving facility $ 500,000 $ 500,000 Less: standby letters of credit (67,689) (69,936) Availability under revolving facility $ 432,311 $ 430,064 |
Schedule of the key financial covenants | As of September 30, 2022 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 (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Measurements | |
Schedule of fair value of liabilities | As of September 30, 2022 Fair Value Gross Carrying Value 3.625% Senior Notes $ 321,000 $ 400,000 4.125% Senior Notes $ 391,250 $ 500,000 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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, 2022 2021 2022 2021 Net Sales Operating Profit (b) Our operations by segment were (a): Installation $ 783,056 $ 612,900 $ 154,236 $ 105,046 Specialty Distribution 583,543 276,398 88,364 47,162 Intercompany eliminations (65,601) (43,541) (10,806) (7,590) Total $ 1,300,998 $ 845,757 231,794 144,618 General corporate expense, net (c) (8,920) (10,812) Operating profit, as reported 222,874 133,806 Other expense, net (14,864) (5,437) Income before income taxes $ 208,010 $ 128,369 Nine Months Ended September 30, 2022 2021 2022 2021 Net Sales Operating Profit (b) Our operations by segment were (a): Installation $ 2,208,717 $ 1,751,278 $ 406,835 $ 277,748 Specialty Distribution 1,715,196 801,363 245,534 125,403 Intercompany eliminations (179,712) (129,831) (29,949) (21,050) Total $ 3,744,201 $ 2,422,810 622,420 382,101 General corporate expense, net (c) (28,371) (24,124) Operating profit, as reported 594,049 357,977 Other expense, net (39,833) (31,862) Income before income taxes $ 554,216 $ 326,115 (a) All of our operations are located primarily in the U.S and to a lesser extent Canada. (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 . |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Net 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, 2022 2021 2022 2021 Net income (in thousands) $ 153,746 $ 95,435 $ 412,156 $ 245,658 Weighted average number of common shares outstanding - basic 32,076,285 32,763,311 32,404,275 32,818,145 Dilutive effect of common stock equivalents: RSAs with service-based conditions 17,175 15,058 14,808 22,044 RSAs with market-based conditions 44,001 115,105 65,677 126,769 RSAs with performance-based conditions 40,995 73,597 48,232 60,595 Stock options 101,364 121,609 110,169 128,442 Weighted average number of common shares outstanding - diluted 32,279,820 33,088,680 32,643,161 33,155,995 Basic net income per common share $ 4.79 $ 2.91 $ 12.72 $ 7.49 Diluted net income per common share $ 4.76 $ 2.88 $ 12.63 $ 7.41 |
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, 2022 2021 2022 2021 Anti-dilutive common stock equivalents: RSAs with service-based conditions 15,222 176 14,782 1,607 RSAs with market-based conditions 134 11,065 200 9,235 RSAs with performance-based conditions 14,611 - 7,506 - Stock options 22,280 24,066 20,581 19,966 Total anti-dilutive common stock equivalents 52,247 35,307 43,069 30,808 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Compensation | |
Schedule of share-based compensation expense and related income tax benefit | Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Share-based compensation expense $ 2,611 $ 2,998 $ 9,673 $ 8,375 Income tax (expense) benefit $ (56) $ (130) $ 1,517 $ 3,190 |
Schedule of share-based compensation activity | The following table presents a summary of our share-based compensation activity for nine months ended September 30, 2022 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 Intrinsic Value Balance December 31, 2021 244.4 $ 119.41 210.5 $ 32.35 $ 87.30 $ 39,692.4 Granted 105.8 $ 177.36 — $ — $ — — Converted/Exercised (168.1) $ 75.65 (25.2) $ 27.92 $ 80.40 $ 3,183.0 Forfeited/Expired (10.6) $ 223.63 (3.1) $ 68.81 $ 174.76 — Balance September 30, 2022 171.5 $ 194.71 182.2 $ 32.25 $ 86.79 $ 15,317.8 Exercisable September 30, 2022 (a) 148.4 $ 25.71 $ 69.94 $ 14,443.4 (a) The weighted average remaining contractual term for vested stock options is approximately 5.5 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, 2022 Unrecognized Compensation Expense on Unvested Awards Weighted Average Remaining Compensation Expense Period RSAs $ 15,203 1.0 Stock options 677 0.7 Total unrecognized compensation expense related to unvested awards $ 15,880 |
Schedule of key inputs used to estimate the fair value of awards | 2022 2021 Measurement period (years) 2.87 2.87 Risk free interest rate 1.76 % 0.22 % Dividend yield 0.00 % 0.00 % Estimated fair value of market-based RSAs at grant date $ 298.20 $ 298.66 |
Schedule of assumptions used to estimate the fair values of options granted | 2021 Risk free interest rate 0.76 % Expected volatility, using historical return volatility and implied volatility 43.29 % Expected life (in years) 6.0 Dividend yield 0.00 % Estimated fair value of stock options at grant date $ 89.59 |
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 | Payout Ranges and Related Expense RSAs with Performance-Based Conditions Grant Date Fair Value 0% 25% 100% 200% February 17, 2020 $ 2,526 $ 0 $ 632 $ 2,526 $ 5,052 February 16, 2021 $ 2,374 $ 0 $ 594 $ 2,374 $ 4,748 February 15, 2022 $ 3,411 $ 0 $ 853 $ 3,411 $ 6,822 |
Share Repurchase Program (Table
Share Repurchase Program (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Share Repurchase Program | |
Schedule of share repurchase program | Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Number of shares repurchased 411,895 (a) 60,105 1,059,361 183,136 Share repurchase cost (in thousands) $ 50,000 $ 11,518 $ 200,050 $ 35,556 |
Business Combinations (Tables)
Business Combinations (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
2022 Acquisitions | |
Business Combinations | |
Summary of businesses acquired | 2022 Acquisitions Date Cash Paid Contingent Consideration Total Purchase Price Goodwill Acquired Southwest 1/12/2022 $ 300 $ — $ 300 $ 215 Billings 2/3/2022 7,005 — 7,005 3,313 Green Energy 3/31/2022 1,200 — 1,200 565 Assured 4/7/2022 4,719 500 5,219 3,317 CV 7/21/2022 1,758 — 1,758 946 Total $ 14,982 $ 500 $ 15,482 $ 8,356 |
2021 Acquisitions | |
Business Combinations | |
Summary of businesses acquired | 2021 Acquisitions Date Cash Paid Contingent Consideration Total Purchase Price Goodwill Acquired LCR 1/20/2021 $ 53,700 — 53,700 19,500 ABS 4/5/2021 124,348 — 124,348 54,229 All others Various 26,977 1,200 28,177 12,001 Total $ 205,025 $ 1,200 $ 206,225 $ 85,730 |
DI | |
Business Combinations | |
Schedule of fair value of assets and liabilities assumed | The table below represents the final fair value of DI’s assets and liabilities assumed as of September 30, 2022: Finalized purchase price fair values: Accounts receivable 145,042 Inventories 133,004 Prepaid and other assets 8,820 Property and equipment 37,562 ROU asset (operating) 66,698 Intangible assets 458,000 Goodwill 450,716 Accounts payable (68,367) Lease liabilities (76,066) Deferred tax liabilities (83,590) All other liabilities (35,854) Net assets acquired $ 1,035,965 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Accrued Liabilities. | |
Schedule of components of accrued liabilities | The following table sets forth the components of accrued liabilities, in thousands: As of September 30, 2022 December 31, 2021 Accrued liabilities: Salaries, wages, and commissions $ 72,367 $ 71,664 Insurance liabilities 29,435 24,425 Customer rebates 15,659 15,625 Deferred revenue 21,991 14,311 Employee tax-related liabilities 10,654 12,545 Sales and property taxes 14,552 9,364 Interest payable on long-term debt 3,366 8,798 Other 13,431 19,159 Total accrued liabilities $ 181,455 $ 175,891 |
Other Commitments and Conting_2
Other Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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, 2022 December 31, 2021 Outstanding bonds: Performance bonds $ 153,358 $ 128,173 Licensing, insurance, and other bonds 24,346 21,792 Total bonds $ 177,704 $ 149,965 |
Basis of Presentation (Details)
Basis of Presentation (Details) | 9 Months Ended |
Sep. 30, 2022 segment | |
Basis of Presentation | |
Number of reportable segments | 2 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenue Recognition | ||||
Net sales | $ 1,300,998 | $ 845,757 | $ 3,744,201 | $ 2,422,810 |
Insulation and accessories | ||||
Revenue Recognition | ||||
Net sales | 1,079,459 | 670,833 | 3,107,015 | 1,926,539 |
Glass and windows | ||||
Revenue Recognition | ||||
Net sales | 60,375 | 46,096 | 168,692 | 136,309 |
Gutters | ||||
Revenue Recognition | ||||
Net sales | 69,591 | 57,190 | 202,200 | 150,083 |
All other | ||||
Revenue Recognition | ||||
Net sales | 91,573 | 71,638 | 266,294 | 209,879 |
Residential | ||||
Revenue Recognition | ||||
Net sales | 853,021 | 672,427 | 2,441,211 | 1,901,820 |
Commercial | ||||
Revenue Recognition | ||||
Net sales | 338,416 | 173,330 | 995,356 | 520,990 |
Industrial | ||||
Revenue Recognition | ||||
Net sales | 109,561 | 307,634 | ||
Operating Segment | Installation | ||||
Revenue Recognition | ||||
Net sales | 783,056 | 612,900 | 2,208,717 | 1,751,278 |
Operating Segment | Installation | Insulation and accessories | ||||
Revenue Recognition | ||||
Net sales | 619,613 | 487,798 | 1,746,054 | 1,383,472 |
Operating Segment | Installation | Glass and windows | ||||
Revenue Recognition | ||||
Net sales | 60,375 | 46,096 | 168,692 | 136,309 |
Operating Segment | Installation | Gutters | ||||
Revenue Recognition | ||||
Net sales | 28,729 | 23,057 | 78,926 | 64,831 |
Operating Segment | Installation | All other | ||||
Revenue Recognition | ||||
Net sales | 74,339 | 55,949 | 215,045 | 166,666 |
Operating Segment | Installation | Residential | ||||
Revenue Recognition | ||||
Net sales | 662,005 | 501,494 | 1,859,386 | 1,405,837 |
Operating Segment | Installation | Commercial | ||||
Revenue Recognition | ||||
Net sales | 121,051 | 111,406 | 349,331 | 345,441 |
Operating Segment | Specialty Distribution | ||||
Revenue Recognition | ||||
Net sales | 583,543 | 276,398 | 1,715,196 | 801,363 |
Operating Segment | Specialty Distribution | Insulation and accessories | ||||
Revenue Recognition | ||||
Net sales | 516,214 | 219,441 | 1,514,481 | 651,192 |
Operating Segment | Specialty Distribution | Gutters | ||||
Revenue Recognition | ||||
Net sales | 48,972 | 40,555 | 146,481 | 103,244 |
Operating Segment | Specialty Distribution | All other | ||||
Revenue Recognition | ||||
Net sales | 18,357 | 16,402 | 54,234 | 46,927 |
Operating Segment | Specialty Distribution | Residential | ||||
Revenue Recognition | ||||
Net sales | 245,549 | 206,951 | 729,787 | 602,059 |
Operating Segment | Specialty Distribution | Commercial | ||||
Revenue Recognition | ||||
Net sales | 228,433 | 69,447 | 677,775 | 199,304 |
Operating Segment | Specialty Distribution | Industrial | ||||
Revenue Recognition | ||||
Net sales | 109,561 | 307,634 | ||
Intercompany Eliminations and Other Adjustments | ||||
Revenue Recognition | ||||
Net sales | (65,601) | (43,541) | (179,712) | (129,831) |
Intercompany Eliminations and Other Adjustments | Insulation and accessories | ||||
Revenue Recognition | ||||
Net sales | (56,368) | (36,406) | (153,520) | (108,125) |
Intercompany Eliminations and Other Adjustments | Gutters | ||||
Revenue Recognition | ||||
Net sales | (8,110) | (6,422) | (23,207) | (17,992) |
Intercompany Eliminations and Other Adjustments | All other | ||||
Revenue Recognition | ||||
Net sales | (1,123) | (713) | (2,985) | (3,714) |
Intercompany Eliminations and Other Adjustments | Residential | ||||
Revenue Recognition | ||||
Net sales | (54,533) | (36,018) | (147,962) | (106,076) |
Intercompany Eliminations and Other Adjustments | Commercial | ||||
Revenue Recognition | ||||
Net sales | $ (11,068) | $ (7,523) | $ (31,750) | $ (23,755) |
Revenue Recognition - Other (De
Revenue Recognition - Other (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Contract Liabilities | ||
Deferred revenue | $ 21,991 | $ 14,311 |
Uncompleted Performance Obligations | ||
Amount remaining on uncompleted performance obligations | $ 425,500 | |
Expected timing of satisfaction of performance obligations | over the next 18 months | |
Receivables, net | ||
Contract Assets | ||
Receivables, unbilled | $ 83,232 | 71,401 |
Accrued liabilities | ||
Contract Liabilities | ||
Deferred revenue | 21,991 | 14,310 |
Accounts Receivable, Net Current | ||
Uncompleted Performance Obligations | ||
Retained receivables | $ 59,800 | $ 57,600 |
Goodwill and Other Intangible_2
Goodwill and Other Intangibles - Goodwill (Details) $ in Thousands | 3 Months Ended | 9 Months Ended |
Dec. 31, 2021 USD ($) | Sep. 30, 2022 USD ($) item | |
Changes in the carrying amount of goodwill | ||
Number of reporting units | item | 2 | |
Impairment of goodwill | $ 0 | |
Gross Goodwill, at beginning of period | $ 2,711,784 | |
Additions | 18,692 | |
Fx Translation Adjustment | (2,221) | |
Gross Goodwill, at end of period | 2,711,784 | 2,728,255 |
Accumulated Impairment Losses | (762,021) | |
Net Goodwill | 1,949,763 | 1,966,234 |
Installation | ||
Changes in the carrying amount of goodwill | ||
Gross Goodwill, at beginning of period | 1,818,872 | |
Additions | 8,107 | |
Gross Goodwill, at end of period | 1,818,872 | 1,826,979 |
Accumulated Impairment Losses | (762,021) | |
Net Goodwill | 1,064,958 | |
Specialty Distribution | ||
Changes in the carrying amount of goodwill | ||
Gross Goodwill, at beginning of period | 892,912 | |
Additions | 10,585 | |
Fx Translation Adjustment | (2,221) | |
Gross Goodwill, at end of period | $ 892,912 | 901,276 |
Net Goodwill | $ 901,276 |
Goodwill and Other Intangible_3
Goodwill and Other Intangibles - Other intangible assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Other intangible assets | |||||
Gross Definite-lived intangible assets | $ 781,374 | $ 781,374 | $ 783,843 | ||
Accumulated Amortization | (150,369) | (150,369) | (99,634) | ||
Net definite-lived intangible assets | 631,005 | 631,005 | $ 684,209 | ||
Amortization expense | $ 16,970 | $ 7,082 | $ 50,809 | $ 20,424 |
Long-Term Debt - Reconciliation
Long-Term Debt - Reconciliation (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Long-Term Debt | ||
Long-term debt | $ 1,484,375 | |
Unamortized debt issuance costs | (18,073) | $ (20,212) |
Total debt, net of unamortized debt issuance costs | 1,466,302 | 1,493,123 |
Less: current portion of long-term debt | 37,367 | 38,640 |
Total long-term debt | $ 1,428,935 | $ 1,454,483 |
3.625% Senior Notes | ||
Long-Term Debt | ||
Interest rate (as a percent) | 3.625% | 3.625% |
Long-term debt | $ 400,000 | $ 400,000 |
4.125% Senior Notes | ||
Long-Term Debt | ||
Interest rate (as a percent) | 4.125% | 4.125% |
Long-term debt | $ 500,000 | $ 500,000 |
Term Loan Facility | ||
Long-Term Debt | ||
Long-term debt | 573,750 | 596,250 |
Equipment Notes | ||
Long-Term Debt | ||
Long-term debt | 10,625 | $ 17,085 |
Total debt, net of unamortized debt issuance costs | $ 10,600 |
Long-Term Debt - Schedule of de
Long-Term Debt - Schedule of debt maturity (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Schedule of Debt Maturity by Years: | ||
2022 | $ 9,691 | |
2023 | 40,075 | |
2024 | 47,109 | |
2025 | 48,750 | |
2026 | 438,750 | |
Thereafter | 900,000 | |
Total principal maturities | 1,484,375 | |
3.625% Senior Notes | ||
Schedule of Debt Maturity by Years: | ||
Thereafter | 400,000 | |
Total principal maturities | 400,000 | $ 400,000 |
4.125% Senior Notes | ||
Schedule of Debt Maturity by Years: | ||
Thereafter | 500,000 | |
Total principal maturities | 500,000 | 500,000 |
Term Loan Facility | ||
Schedule of Debt Maturity by Years: | ||
2022 | 7,500 | |
2023 | 33,750 | |
2024 | 45,000 | |
2025 | 48,750 | |
2026 | 438,750 | |
Total principal maturities | 573,750 | 596,250 |
Equipment Notes | ||
Schedule of Debt Maturity by Years: | ||
2022 | 2,191 | |
2023 | 6,325 | |
2024 | 2,109 | |
Total principal maturities | $ 10,625 | $ 17,085 |
Long-Term Debt - Key Terms of C
Long-Term Debt - Key Terms of Credit Agreement (Details) - USD ($) $ in Thousands | 9 Months Ended | ||||
Mar. 08, 2021 | Mar. 07, 2021 | Sep. 30, 2022 | Dec. 31, 2021 | Oct. 07, 2021 | |
Revolving Facility | |||||
Long-Term Debt | |||||
Availability | $ 500,000 | $ 500,000 | |||
Revolving Facility | Minimum | |||||
Long-Term Debt | |||||
Commitment fee (as a percent) | 0.15% | ||||
Revolving Facility | Maximum | |||||
Long-Term Debt | |||||
Commitment fee (as a percent) | 0.275% | ||||
Term Loan Facility | |||||
Long-Term Debt | |||||
Availability | $ 300,000 | ||||
Amendment No. 1 to Credit Agreement | Base Rate | |||||
Long-Term Debt | |||||
Debt instrument, floor rate | 1% | 1.50% | |||
Amendment No. 1 to Credit Agreement | Eurodollar | |||||
Long-Term Debt | |||||
Debt instrument, floor rate | 0% | 0.50% | |||
Amendment No. 1 to Credit Agreement | Revolving Facility | |||||
Long-Term Debt | |||||
Availability | $ 450,000 | ||||
Sublimit for issuance of letters of credit under Revolving Facility* | 100,000 | ||||
Sublimit for swingline loans under Revolving Facility* | 35,000 | ||||
Amendment No. 1 to Credit Agreement | Term Loan Facility | |||||
Long-Term Debt | |||||
Availability | $ 300,000 | ||||
Amendment No. 2 to Credit Agreement | |||||
Long-Term Debt | |||||
Availability | 300,000 | ||||
Additional delayed draw term loan | $ 300,000 | ||||
Additional term loan and/or revolver capacity available under incremental facility | $ 300,000 | ||||
Scheduled maturity date | Oct. 07, 2026 | ||||
Amendment No. 2 to Credit Agreement | Base Rate Borrowings | Minimum | |||||
Long-Term Debt | |||||
Applicable margin based on total leverage ratio | 0% | ||||
Amendment No. 2 to Credit Agreement | Base Rate Borrowings | Maximum | |||||
Long-Term Debt | |||||
Applicable margin based on total leverage ratio | 1% | ||||
Amendment No. 2 to Credit Agreement | Base Rate Borrowings | Federal Funds Rate | |||||
Long-Term Debt | |||||
Basis spread | 0.50% | ||||
Amendment No. 2 to Credit Agreement | Base Rate Borrowings | LIBOR | |||||
Long-Term Debt | |||||
Basis spread | 1% | ||||
Maturity of the reference rate | 1 month | ||||
Amendment No. 2 to Credit Agreement | LIBOR Rate Borrowings | |||||
Long-Term Debt | |||||
Interest rate floor (as a percent) | 0% | ||||
Amendment No. 2 to Credit Agreement | LIBOR Rate Borrowings | Minimum | |||||
Long-Term Debt | |||||
Applicable margin based on total leverage ratio | 1% | ||||
Amendment No. 2 to Credit Agreement | LIBOR Rate Borrowings | Maximum | |||||
Long-Term Debt | |||||
Applicable margin based on total leverage ratio | 2.50% | ||||
Amendment No. 2 to Credit Agreement | Revolving Facility | |||||
Long-Term Debt | |||||
Availability | $ 500,000 | 500,000 | |||
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 | |||
Interest rate | 3.52% | ||||
Amendment No. 2 to Credit Agreement | Term Loan Facility | |||||
Long-Term Debt | |||||
Availability | $ 300,000 | $ 600,000 |
Long-Term Debt - Revolving Faci
Long-Term Debt - Revolving Facility (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Debt covenants | ||
Maximum Net Leverage Ratio | 3.50 | |
Minimum Interest Coverage Ratio | 3 | |
Revolving Facility | ||
Long-Term Debt | ||
Revolving Facility | $ 500,000 | $ 500,000 |
Less: standby letters of credit | (67,689) | (69,936) |
Availability under Revolving Facility | $ 432,311 | $ 430,064 |
Revolving Facility | Minimum | ||
Long-Term Debt | ||
Commitment fee (as a percent) | 0.15% | |
Revolving Facility | Maximum | ||
Long-Term Debt | ||
Commitment fee (as a percent) | 0.275% |
Long-Term Debt - Senior Notes a
Long-Term Debt - Senior Notes and Equipment Notes (Details) - USD ($) $ in Thousands | 9 Months Ended | ||||
Oct. 14, 2021 | Mar. 15, 2021 | Sep. 30, 2022 | Dec. 31, 2021 | Oct. 07, 2021 | |
Long-Term Debt | |||||
Amount outstanding | $ 1,466,302 | $ 1,493,123 | |||
Debt Instrument Redemption Option One | Prior to March 15, 2024 | |||||
Long-Term Debt | |||||
Redemption price as a percentage of principal | 100% | ||||
Debt Instrument Redemption Option Two | Prior to March 15, 2024 | |||||
Long-Term Debt | |||||
Redemption price as a percentage of principal | 103.625% | ||||
Debt instrument, conditional redemption, threshold percentage of aggregate principal amount originally issued remains outstanding | 60% | ||||
Debt Instrument Redemption Option Two | Maximum | Prior to March 15, 2024 | |||||
Long-Term Debt | |||||
Redemption price, percentage of principal amount redeemed | 40% | ||||
Term Loan Facility | |||||
Long-Term Debt | |||||
Availability | $ 300,000 | ||||
Equipment Notes | |||||
Long-Term Debt | |||||
Amount outstanding | $ 10,600 | ||||
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% | ||||
3.625% Senior Notes | |||||
Long-Term Debt | |||||
Interest rate (as a percent) | 3.625% | 3.625% | |||
Principal amount of debt | $ 400,000 | ||||
3.625% Senior Notes | Change in Control Scenario | |||||
Long-Term Debt | |||||
Redemption price as a percentage of principal | 101% | ||||
4.125% Senior Notes | |||||
Long-Term Debt | |||||
Interest rate (as a percent) | 4.125% | 4.125% | |||
Principal amount of debt | $ 500,000 | ||||
4.125% Senior Notes | On or after October 15, 2026 | |||||
Long-Term Debt | |||||
Redemption price as a percentage of principal | 102.063% | ||||
4.125% Senior Notes | On or after October 15, 2027 | |||||
Long-Term Debt | |||||
Redemption price as a percentage of principal | 101.375% | ||||
4.125% Senior Notes | On or after October 15, 2028 | |||||
Long-Term Debt | |||||
Redemption price as a percentage of principal | 100.688% | ||||
4.125% Senior Notes | On October 15, 2029 and thereafter | |||||
Long-Term Debt | |||||
Redemption price as a percentage of principal | 100% | ||||
4.125% Senior Notes | Prior to October 15, 2024 | |||||
Long-Term Debt | |||||
Redemption price as a percentage of principal | 104.125% | ||||
Redemption price, percentage of principal amount redeemed | 40% | ||||
Debt instrument, conditional redemption, threshold percentage of aggregate principal amount originally issued remains outstanding | 60% | ||||
4.125% Senior Notes | Change in Control Scenario | |||||
Long-Term Debt | |||||
Redemption price as a percentage of principal | 101% | ||||
5.625% Senior Notes | |||||
Long-Term Debt | |||||
Interest rate (as a percent) | 5.625% | ||||
Principal amount of debt | $ 400,000 | ||||
Redemption price, percentage of principal amount redeemed | 100% |
Long-Term Debt - Other (Details
Long-Term Debt - Other (Details) | 9 Months Ended | ||
Sep. 30, 2022 | Oct. 14, 2021 | Mar. 15, 2021 | |
Debt covenants | |||
Maximum Net Leverage Ratio | 3.50 | ||
Minimum Interest Coverage Ratio | 3 | ||
Senior Notes | Event of Default Scenario | |||
Debt covenants | |||
Minimum percentage of principal of debt holders to declare debt immediately due and payable | 30% | ||
3.625% Senior Notes | |||
Debt covenants | |||
Interest rate (as a percent) | 3.625% | 3.625% | |
4.125% Senior Notes | |||
Debt covenants | |||
Interest rate (as a percent) | 4.125% | 4.125% |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Oct. 14, 2021 | Mar. 15, 2021 |
Fair Value on Non-Recurring Basis | |||
Amount outstanding | $ 1,484,375 | ||
3.625% Senior Notes | |||
Fair Value on Non-Recurring Basis | |||
Interest rate (as a percent) | 3.625% | 3.625% | |
Amount outstanding | $ 400,000 | ||
3.625% Senior Notes | Fair Value on Non-Recurring Basis | Level 1 fair value measurement | |||
Fair Value on Non-Recurring Basis | |||
Interest rate (as a percent) | 3.625% | ||
Fair value | $ 321,000 | ||
4.125% Senior Notes | |||
Fair Value on Non-Recurring Basis | |||
Interest rate (as a percent) | 4.125% | 4.125% | |
Amount outstanding | $ 500,000 | ||
4.125% Senior Notes | Fair Value on Non-Recurring Basis | Level 1 fair value measurement | |||
Fair Value on Non-Recurring Basis | |||
Interest rate (as a percent) | 4.125% | ||
Fair value | $ 391,250 |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Segment information | ||||
Net sales | $ 1,300,998 | $ 845,757 | $ 3,744,201 | $ 2,422,810 |
Operating profit as, reported | 222,874 | 133,806 | 594,049 | 357,977 |
Other expense, net | (14,864) | (5,437) | (39,833) | (31,862) |
Income before income taxes | 208,010 | 128,369 | 554,216 | 326,115 |
Operating Segment | ||||
Segment information | ||||
Operating profit as, reported | 231,794 | 144,618 | 622,420 | 382,101 |
Operating Segment | Installation | ||||
Segment information | ||||
Net sales | 783,056 | 612,900 | 2,208,717 | 1,751,278 |
Operating profit as, reported | 154,236 | 105,046 | 406,835 | 277,748 |
Operating Segment | Specialty Distribution | ||||
Segment information | ||||
Net sales | 583,543 | 276,398 | 1,715,196 | 801,363 |
Operating profit as, reported | 88,364 | 47,162 | 245,534 | 125,403 |
Intercompany Eliminations | ||||
Segment information | ||||
Net sales | (65,601) | (43,541) | (179,712) | (129,831) |
Operating profit as, reported | (10,806) | (7,590) | (29,949) | (21,050) |
Corporate | ||||
Segment information | ||||
General corporate expense, net | $ (8,920) | $ (10,812) | $ (28,371) | $ (24,124) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Taxes | ||||
Effective tax rate (as a percent) | 26.10% | 25.70% | 25.60% | 24.70% |
Benefit related to share-based compensation | $ (56) | $ (130) | $ 1,517 | $ 3,190 |
Net Income Per Share - Calculat
Net Income Per Share - Calculation (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Net income - basic and diluted | $ 153,746 | $ 143,697 | $ 114,711 | $ 95,435 | $ 90,380 | $ 59,842 | $ 412,156 | $ 245,658 |
Weighted average number of common shares outstanding - basic | 32,076,285 | 32,763,311 | 32,404,275 | 32,818,145 | ||||
Dilutive effect of common stock equivalents: | ||||||||
Stock options | 101,364 | 121,609 | 110,169 | 128,442 | ||||
Weighted average number of common shares outstanding - diluted | 32,279,820 | 33,088,680 | 32,643,161 | 33,155,995 | ||||
Basic net income per common share | $ 4.79 | $ 2.91 | $ 12.72 | $ 7.49 | ||||
Diluted net income per common share | $ 4.76 | $ 2.88 | $ 12.63 | $ 7.41 | ||||
Service-based conditions | ||||||||
Dilutive effect of common stock equivalents: | ||||||||
Restricted stock awards | 17,175 | 15,058 | 14,808 | 22,044 | ||||
Market-based conditions | ||||||||
Dilutive effect of common stock equivalents: | ||||||||
Restricted stock awards | 44,001 | 115,105 | 65,677 | 126,769 | ||||
Performance-based conditions | ||||||||
Dilutive effect of common stock equivalents: | ||||||||
Restricted stock awards | 40,995 | 73,597 | 48,232 | 60,595 |
Net Income Per Share - Anti-dil
Net Income Per Share - Anti-dilutive common stock equivalents (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Anti-dilutive common stock equivalents | ||||
Total anti-dilutive common stock equivalents | 52,247 | 35,307 | 43,069 | 30,808 |
Restricted Stock Awards | Service-based conditions | ||||
Anti-dilutive common stock equivalents | ||||
Total anti-dilutive common stock equivalents | 15,222 | 176 | 14,782 | 1,607 |
Restricted Stock Awards | Market-based conditions | ||||
Anti-dilutive common stock equivalents | ||||
Total anti-dilutive common stock equivalents | 134 | 11,065 | 200 | 9,235 |
Restricted Stock Awards | Performance-based conditions | ||||
Anti-dilutive common stock equivalents | ||||
Total anti-dilutive common stock equivalents | 14,611 | 7,506 | ||
Stock Options | ||||
Anti-dilutive common stock equivalents | ||||
Total anti-dilutive common stock equivalents | 22,280 | 24,066 | 20,581 | 19,966 |
Share-Based Compensation - Expe
Share-Based Compensation - Expense (Details) - USD ($) $ in Thousands, shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Share-Based Compensation | ||||
Share-based compensation expense | $ 2,611 | $ 2,998 | $ 9,673 | $ 8,375 |
Income tax (expense) benefit | $ (56) | $ (130) | $ 1,517 | $ 3,190 |
2015 Plan | Maximum | ||||
Share-Based Compensation | ||||
Number of shares authorized | 4 | 4 |
Share-Based Compensation - Acti
Share-Based Compensation - Activity (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||||||||
Sep. 30, 2022 | Feb. 15, 2022 | Feb. 16, 2021 | Feb. 17, 2020 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Restricted Stock Awards, Number of Shares | |||||||||||
Granted (in shares) | 0 | ||||||||||
Stock Options, Number of Shares | |||||||||||
Converted/Exercised (in shares) | (7,111) | (5,835) | (12,269) | (51,915) | |||||||
Stock options, additional disclosures | |||||||||||
Weighted average remaining contractual term for vested stock options | 5 years 6 months | ||||||||||
Unrecognized share-based compensation expense | |||||||||||
Total unrecognized compensation expense related to unvested awards | $ 15,880,000 | $ 15,880,000 | $ 15,880,000 | ||||||||
Restricted Stock Awards | |||||||||||
Restricted Stock Awards, Number of Shares | |||||||||||
Balance at beginning of period (in shares) | 244,400 | 244,400 | |||||||||
Granted (in shares) | 105,800 | ||||||||||
Converted/Exercised (in shares) | (168,100) | ||||||||||
Forfeited/Expired (in shares) | (10,600) | ||||||||||
Balance at end of period (in shares) | 171,500 | 171,500 | 171,500 | ||||||||
Restricted Stock Awards, Weighted Average Grant Date Fair Value Per Share | |||||||||||
Balance at beginning of period (in dollars per share) | $ 119.41 | $ 119.41 | |||||||||
Granted (in dollars per share) | 177.36 | ||||||||||
Converted/Exercised (in dollars per share) | 75.65 | ||||||||||
Forfeited/Expired (in dollars per share) | 223.63 | ||||||||||
Balance at end of period (in dollars per share) | $ 194.71 | $ 194.71 | $ 194.71 | ||||||||
Unrecognized share-based compensation expense | |||||||||||
RSAs, Unrecognized Compensation Expense on Unvested Awards | $ 15,203,000 | $ 15,203,000 | $ 15,203,000 | ||||||||
Weighted Average Remaining Compensation Expense Period | 1 year | ||||||||||
Assumptions used to estimate the fair values of the awards granted: | |||||||||||
Measurement period (years) | 2 years 10 months 13 days | 2 years 10 months 13 days | |||||||||
Risk free interest rate (as a percent) | 1.76% | 0.22% | |||||||||
Dividend yield (as a percent) | 0% | 0% | |||||||||
Estimated fair value of market-based RSAs at grant date (in dollars per share) | $ 298.20 | $ 298.66 | |||||||||
Restricted Stock Awards | Performance-based conditions | |||||||||||
Restricted stock awards, additional disclosures | |||||||||||
Grant date fair value | $ 3,411,000 | $ 2,374,000 | $ 2,526,000 | ||||||||
Restricted Stock Awards | Performance-based conditions | Payout Range-0% | |||||||||||
Restricted stock awards, additional disclosures | |||||||||||
Payout range (as a percent) | 0% | 0% | 0% | ||||||||
Related expenses | $ 0 | $ 0 | $ 0 | ||||||||
Restricted Stock Awards | Performance-based conditions | Payout Range-25% | |||||||||||
Restricted stock awards, additional disclosures | |||||||||||
Payout range (as a percent) | 25% | 25% | 25% | ||||||||
Related expenses | $ 853,000 | $ 594,000 | $ 632,000 | ||||||||
Restricted Stock Awards | Performance-based conditions | Payout Range-100% | |||||||||||
Restricted stock awards, additional disclosures | |||||||||||
Payout range (as a percent) | 100% | 100% | 100% | ||||||||
Related expenses | $ 3,411,000 | $ 2,374,000 | $ 2,526,000 | ||||||||
Restricted Stock Awards | Performance-based conditions | Payout Range-200% | |||||||||||
Restricted stock awards, additional disclosures | |||||||||||
Payout range (as a percent) | 200% | 200% | 200% | ||||||||
Related expenses | $ 6,822,000 | $ 4,748,000 | $ 5,052,000 | ||||||||
RSAs granted February 18, 2019 | Performance-based conditions | |||||||||||
Restricted stock awards, additional disclosures | |||||||||||
Cumulative period of achievement | 3 years | ||||||||||
Cumulative achievement percentage | 200% | ||||||||||
Total compensation expense recognized over the performance period, net of forfeitures | $ 4,400,000 | ||||||||||
Stock Options | |||||||||||
Stock Options, Number of Shares | |||||||||||
Balance at beginning of period (in shares) | 210,500 | 210,500 | |||||||||
Converted/Exercised (in shares) | (25,200) | ||||||||||
Forfeited/Expired (in shares) | (3,100) | ||||||||||
Balance at end of period (in shares) | 182,200 | 182,200 | 182,200 | ||||||||
Stock Options, Weighted Average Grant Date Fair Value Per Share | |||||||||||
Balance at beginning of period (in dollars per share) | $ 32.35 | $ 32.35 | |||||||||
Converted/Exercised (in dollars per share) | 27.92 | ||||||||||
Forfeited/Expired (in dollars per share) | 68.81 | ||||||||||
Balance at end of period (in dollars per share) | $ 32.25 | $ 32.25 | 32.25 | ||||||||
Stock Options, Weighted Average Exercise Price Per Share | |||||||||||
Balance at beginning of period (in dollars per share) | $ 87.30 | 87.30 | |||||||||
Converted/Exercised (in dollars per share) | 80.40 | ||||||||||
Forfeited/Expired (in dollars per share) | 174.76 | ||||||||||
Balance at end of period (in dollars per share) | $ 86.79 | $ 86.79 | $ 86.79 | ||||||||
Stock options, additional disclosures | |||||||||||
Aggregate intrinsic value | $ 15,317,800 | $ 15,317,800 | $ 15,317,800 | $ 39,692,400 | |||||||
Converted/Exercised aggregate intrinsic value | $ 3,183,000 | ||||||||||
Exercisable, Number of shares | 148,400 | 148,400 | 148,400 | ||||||||
Exercisable, Weighted Average Grant Date Fair Value Per Share | $ 25.71 | ||||||||||
Exercisable Weighted Average Exercise Price Per Share | $ 69.94 | $ 69.94 | $ 69.94 | ||||||||
Exercisable, Aggregate Intrinsic Value | $ 14,443,400 | $ 14,443,400 | $ 14,443,400 | ||||||||
Unrecognized share-based compensation expense | |||||||||||
Stock options, Unrecognized Compensation Expense on Unvested Awards | $ 677,000 | $ 677,000 | $ 677,000 | ||||||||
Weighted Average Remaining Compensation Expense Period | 8 months 12 days | ||||||||||
Assumptions used to estimate the fair values of the awards granted: | |||||||||||
Risk free interest rate (as a percent) | 0.76% | ||||||||||
Expected volatility using historical return volatility and implied volatility (as a percent) | 43.29% | ||||||||||
Expected life (in years) | 6 years | ||||||||||
Dividend yield (as a percent) | 0% | ||||||||||
Estimated fair value of market-based RSAs at grant date (in dollars per share) | $ 89.59 |
Share Repurchase Program (Detai
Share Repurchase Program (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 5 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Jul. 25, 2022 | May 09, 2022 | Jul. 26, 2021 | Feb. 22, 2019 | |
Share Repurchase Program | |||||||||
Number of shares repurchased (in shares) | 411,895 | 60,105 | 1,059,361 | 183,136 | |||||
Share repurchase cost | $ 50,000 | $ 11,518 | $ 200,050 | $ 35,556 | |||||
2022 Share Repurchase Program | |||||||||
Share Repurchase Program | |||||||||
Share repurchase program, authorized amount | $ 200,000 | ||||||||
2021 Share Repurchase Program | |||||||||
Share Repurchase Program | |||||||||
Amount remaining under repurchase program | $ 4,400 | $ 4,400 | $ 4,400 | ||||||
2022 ASR Agreement | |||||||||
Share Repurchase Program | |||||||||
Initial number of shares delivered under ASR agreement (in shares) | 409,312 | ||||||||
Initial percentage of shares delivered under ASR agreement | 80% | ||||||||
Initial value of shares delivered under ASR agreement | $ 100,000 | ||||||||
Number of shares repurchased (in shares) | 142,351 | 551,663 | |||||||
Average price per share (in dollars per share) | $ 181.27 | ||||||||
Maximum | 2019 Share Repurchase Program | |||||||||
Share Repurchase Program | |||||||||
Share repurchase program, authorized amount | $ 200,000 | ||||||||
Maximum | 2021 Share Repurchase Program | |||||||||
Share Repurchase Program | |||||||||
Share repurchase program, authorized amount | $ 200,000 |
Business Combinations - Summary
Business Combinations - Summary (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||||||||
Jul. 21, 2022 | Apr. 07, 2022 | Mar. 31, 2022 | Feb. 03, 2022 | Jan. 12, 2022 | Oct. 15, 2021 | Apr. 05, 2021 | Jan. 20, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Business Combinations | |||||||||||||
Acquisition related costs | $ 0 | $ 2,700 | $ 1,300 | $ 3,400 | |||||||||
Summary | |||||||||||||
Goodwill | 1,966,234 | 1,966,234 | $ 1,949,763 | ||||||||||
Goodwill expected to be deducted for income tax purposes | 8,400 | $ 85,700 | 8,400 | 85,700 | |||||||||
Estimated fair values | |||||||||||||
Goodwill | 1,966,234 | 1,966,234 | $ 1,949,763 | ||||||||||
2022 Acquisitions | |||||||||||||
Summary | |||||||||||||
Cash Paid | 14,982 | ||||||||||||
Contingent Consideration | 500 | ||||||||||||
Total Purchase Price | 15,482 | ||||||||||||
Goodwill Acquired | 8,356 | ||||||||||||
Southwest | |||||||||||||
Summary | |||||||||||||
Cash Paid | $ 300 | ||||||||||||
Total Purchase Price | 300 | ||||||||||||
Goodwill Acquired | $ 215 | ||||||||||||
Billings | |||||||||||||
Summary | |||||||||||||
Cash Paid | $ 7,005 | ||||||||||||
Total Purchase Price | 7,005 | ||||||||||||
Goodwill Acquired | $ 3,313 | ||||||||||||
Green Energy | |||||||||||||
Summary | |||||||||||||
Cash Paid | $ 1,200 | ||||||||||||
Total Purchase Price | 1,200 | ||||||||||||
Goodwill Acquired | $ 565 | ||||||||||||
Assured | |||||||||||||
Summary | |||||||||||||
Cash Paid | $ 4,719 | ||||||||||||
Contingent Consideration | 500 | ||||||||||||
Total Purchase Price | 5,219 | ||||||||||||
Goodwill Acquired | $ 3,317 | ||||||||||||
CV | |||||||||||||
Summary | |||||||||||||
Cash Paid | $ 1,758 | ||||||||||||
Total Purchase Price | 1,758 | ||||||||||||
Goodwill Acquired | $ 946 | ||||||||||||
2021 Acquisitions | |||||||||||||
Summary | |||||||||||||
Cash Paid | 205,025 | ||||||||||||
Contingent Consideration | 1,200 | ||||||||||||
Total Purchase Price | 206,225 | ||||||||||||
Goodwill Acquired | 85,730 | ||||||||||||
LCR | |||||||||||||
Summary | |||||||||||||
Cash Paid | $ 53,700 | ||||||||||||
Total Purchase Price | 53,700 | ||||||||||||
Goodwill Acquired | $ 19,500 | ||||||||||||
ABS | |||||||||||||
Summary | |||||||||||||
Cash Paid | $ 124,348 | ||||||||||||
Total Purchase Price | 124,348 | ||||||||||||
Goodwill Acquired | $ 54,229 | ||||||||||||
DI | |||||||||||||
Business Combinations | |||||||||||||
Increase in goodwill | 10,700 | ||||||||||||
Summary | |||||||||||||
Goodwill | 450,716 | 450,716 | |||||||||||
Total Purchase Price | $ 1,000,000 | ||||||||||||
Estimated fair values | |||||||||||||
Accounts receivable | 145,042 | 145,042 | |||||||||||
Inventories | 133,004 | 133,004 | |||||||||||
Prepaid and other assets | 8,820 | 8,820 | |||||||||||
Property and equipment | 37,562 | 37,562 | |||||||||||
ROU asset (operating) | 66,698 | 66,698 | |||||||||||
Intangible assets | 458,000 | 458,000 | |||||||||||
Goodwill | 450,716 | 450,716 | |||||||||||
Accounts payable | (68,367) | (68,367) | |||||||||||
Lease liabilities | (76,066) | (76,066) | |||||||||||
Deferred tax liabilities | (83,590) | (83,590) | |||||||||||
All other liabilities | (35,854) | (35,854) | |||||||||||
Net assets acquired | $ 1,035,965 | $ 1,035,965 | |||||||||||
All others | |||||||||||||
Summary | |||||||||||||
Cash Paid | 26,977 | ||||||||||||
Contingent Consideration | 1,200 | ||||||||||||
Total Purchase Price | 28,177 | ||||||||||||
Goodwill Acquired | $ 12,001 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Accrued Liabilities. | ||
Salaries, wages, and commissions | $ 72,367 | $ 71,664 |
Insurance liabilities | 29,435 | 24,425 |
Customer rebates | 15,659 | 15,625 |
Deferred revenue | 21,991 | 14,311 |
Employee tax-related liabilities | 10,654 | 12,545 |
Sales and property taxes | 14,552 | 9,364 |
Interest payable on long-term debt | 3,366 | 8,798 |
Other | 13,431 | 19,159 |
Total accrued liabilities | $ 181,455 | $ 175,891 |
Other Commitments and Conting_3
Other Commitments and Contingencies (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Outstanding Bonds | ||
Performance bonds | $ 153,358 | $ 128,173 |
Licensing, insurance, and other bonds | 24,346 | 21,792 |
Total bonds | $ 177,704 | $ 149,965 |