Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 24, 2020 | Jun. 30, 2019 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | Forterra, Inc. | ||
Entity Central Index Key | 0001678463 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Entity Well-known Seasoned User | No | ||
Entity Voluntary Filer | No | ||
Entity Current Reporting Status | Yes | ||
Amendment Flag | false | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 64,853,060 | ||
Entity Public Float | $ 92,613,828 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement [Abstract] | |||
Net sales | $ 1,529,752 | $ 1,479,712 | $ 1,580,413 |
Cost of goods sold | 1,233,370 | 1,234,143 | 1,327,305 |
Gross profit | 296,382 | 245,569 | 253,108 |
Selling, general & administrative expenses | (221,770) | (209,877) | (255,034) |
Impairment and exit charges | (3,520) | (4,336) | (13,220) |
Other operating income, net | 1,094 | 9,523 | 5,197 |
Operating expenses, including earnings from equity method investments | (224,196) | (204,690) | (263,057) |
Income (loss) from operations | 72,186 | 40,879 | (9,949) |
Other income (expenses) | |||
Interest expense | (94,970) | (78,337) | (59,408) |
Gain on extinguishment of debt | 1,708 | 0 | 0 |
Earnings from equity method investee | 10,466 | 10,162 | 12,360 |
Change in tax receivable agreement liability | 0 | 0 | 46,180 |
Other income (expense), net | 0 | 6,016 | (31,915) |
Loss before income taxes | (10,610) | (21,280) | (42,732) |
Income tax (expense) benefit | 3,279 | (3,085) | 40,672 |
Net loss | $ (7,331) | $ (24,365) | $ (2,060) |
Basic and Diluted earnings (loss) per share: | |||
Net (loss) (in usd per share) | $ (0.11) | $ (0.38) | $ (0.03) |
Weighted average shares of common stock outstanding: | |||
Basic and Diluted (in shares) | 64,232 | 63,904 | 63,801 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (7,331) | $ (24,365) | $ (2,060) |
Unrealized gain (loss) on derivative activities, net of tax | 0 | ||
Unrealized gain (loss) on derivative activities, net of tax | 970 | (3,548) | |
Change in other postretirement benefit plans, net of tax | 373 | 0 | 0 |
Foreign currency translation adjustment | 3,304 | (5,782) | 3,475 |
Comprehensive loss | $ (3,654) | $ (29,177) | $ (2,133) |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash and cash equivalents | $ 34,800 | $ 35,793 |
Receivables, net | 205,801 | 198,468 |
Inventories | 238,483 | 285,030 |
Prepaid Expense, Current | 11,021 | 7,289 |
Other current assets | 8,890 | 17,509 |
Total current assets | 498,995 | 544,089 |
Non-current assets | ||
Property, plant and equipment and right-of-use assets, net | 475,575 | |
Property, plant and equipment, net | 492,167 | |
Operating lease right-of-use assets | 60,253 | |
Goodwill | 508,826 | 508,193 |
Intangible assets, net | 142,674 | 183,789 |
Investment in equity method investee | 50,034 | 50,607 |
Other long-term assets | 3,701 | 14,407 |
Total assets | 1,740,058 | 1,793,252 |
Current liabilities | ||
Trade payables | 102,426 | 114,708 |
Accrued liabilities | 88,839 | 70,236 |
Deferred revenue | 9,527 | 9,138 |
Current portion of long-term debt | 12,510 | 12,510 |
Current portion of tax receivable agreement | 13,145 | 15,457 |
Total current liabilities | 226,447 | 222,049 |
Non-current liabilities | ||
Long-term debt | 1,085,793 | 1,176,095 |
Long-term finance lease liabilities | 137,365 | |
Long-term finance lease liabilities | 134,948 | |
Long-term operating lease liabilities | 54,411 | |
Deferred tax liabilities | 28,929 | 46,615 |
Deferred gain on sale-leaseback | 0 | 9,338 |
Other long-term liabilities | 21,906 | 22,667 |
Long-term tax receivable agreement | 64,240 | 73,318 |
Total liabilities | 1,619,091 | 1,685,030 |
Commitments and Contingencies (Note 16) | ||
Equity | ||
Common stock, $0.001 par value. 190,000 shares authorized; 64,741 and 64,206 shares issued and outstanding at December 31, 2019 and December 31, 2018, respectively | 19 | 18 |
Additional paid-in-capital | 244,372 | 234,931 |
Accumulated other comprehensive loss | (7,063) | (10,740) |
Retained deficit | (116,361) | (115,987) |
Total shareholder's equity | 120,967 | 108,222 |
Total liabilities and shareholders' equity | $ 1,740,058 | $ 1,793,252 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Common shares, par value (in usd per share) | $ 0.001 | $ 0.001 |
Common shares, authorized (in shares) | 190,000,000 | 190,000,000 |
Common shares, issued (in shares) | 64,741,000 | 64,206,000 |
Common shares, outstanding (in shares) | 64,741,000 | 64,206,000 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in-Capital | Accumulated Other Comprehensive Income (Loss) | Retained Deficit |
Beginning Balance (in shares) at Dec. 31, 2016 | 63,924,124 | ||||
Beginning Balance at Dec. 31, 2016 | $ 132,917 | $ 18 | $ 228,316 | $ (5,025) | $ (90,392) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Share-based compensation expense | 3,696 | 3,696 | |||
Stock-based plan activity (in shares) | 306,764 | ||||
Stock-based plan activity | (37) | (37) | |||
Net loss | (2,060) | (2,060) | |||
Gains on derivative transactions, net of tax | (3,548) | (3,548) | |||
Foreign currency translation adjustment | 3,475 | 3,475 | |||
Other | (1,952) | (1,952) | |||
Ending Balance (in shares) at Dec. 31, 2017 | 64,230,888 | ||||
Ending Balance at Dec. 31, 2017 | 132,491 | $ 18 | 230,023 | (5,098) | (92,452) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Share-based compensation expense | 6,240 | 6,240 | |||
Stock-based plan activity (in shares) | (25,284) | ||||
Stock-based plan activity | (126) | (126) | |||
Net loss | (24,365) | (24,365) | |||
Gains on derivative transactions, net of tax | 970 | 970 | |||
Reclassification due to the adoption of ASU 2018-02 | 0 | (830) | 830 | ||
Foreign currency translation adjustment | (5,782) | (5,782) | |||
Other | $ (1,206) | (1,206) | |||
Ending Balance (in shares) at Dec. 31, 2018 | 64,206,000 | 64,205,604 | |||
Ending Balance at Dec. 31, 2018 | $ 108,222 | $ 18 | 234,931 | (10,740) | (115,987) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Cumulative effect of accounting changes, net of tax | 6,957 | 6,957 | |||
Share-based compensation expense | 7,919 | 7,919 | |||
Stock-based plan activity (in shares) | 535,063 | ||||
Stock-based plan activity | 1,523 | $ 1 | 1,522 | ||
Net loss | (7,331) | (7,331) | |||
Foreign currency translation adjustment | 3,304 | 3,304 | |||
Other | $ 373 | 373 | |||
Ending Balance (in shares) at Dec. 31, 2019 | 64,741,000 | 64,740,667 | |||
Ending Balance at Dec. 31, 2019 | $ 120,967 | $ 19 | $ 244,372 | $ (7,063) | $ (116,361) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net loss | $ (7,331) | $ (24,365) | $ (2,060) |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Depreciation & amortization expense | 97,258 | 105,423 | 115,659 |
(Gain) / loss on business divestiture | 0 | (6,016) | 32,278 |
(Gain) / loss on disposal of property, plant and equipment | 2,045 | (4,266) | 2,107 |
Gain on extinguishment of debt | (1,708) | 0 | 0 |
Amortization of debt discount and issuance costs | 7,962 | 8,143 | 8,123 |
Stock-based compensation expense | 7,919 | 6,240 | 3,696 |
Impairment on property, plant, and equipment and goodwill | 128 | 956 | 10,551 |
Earnings from equity method investee | (10,466) | (10,162) | (12,360) |
Distributions from equity method investee | 11,039 | 13,141 | 13,717 |
Unrealized (gain) loss on derivative instruments, net | 6,401 | (1,408) | (5,251) |
Unrealized foreign currency gains, net | 45 | (527) | (615) |
Provision (recoveries) for doubtful accounts | 387 | (1,224) | 2,947 |
Deferred income taxes | (20,067) | (20,768) | (25,496) |
Tax receivable agreement non-cash items | 0 | 0 | (46,180) |
Deferred rent | 0 | 1,373 | 2,616 |
Other non-cash items | 1,320 | 83 | 196 |
Change in assets and liabilities: | |||
Receivables, net | (7,394) | (2,466) | (16,831) |
Inventories | 47,491 | (45,313) | 1,838 |
Other current assets | 514 | 8,657 | (24,003) |
Accounts payable and accrued liabilities | 2,675 | (4,548) | (19,424) |
Other assets & liabilities | 8,568 | 4,243 | 826 |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 146,786 | 27,196 | 42,334 |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Purchase of property, plant and equipment, and intangible assets | (53,709) | (50,609) | (52,514) |
Proceeds from business divestiture | 0 | 618 | 23,200 |
Proceeds from sale of fixed assets | 11,414 | 8,429 | 0 |
Settlement of net investment hedges | 0 | (4,990) | 0 |
Assets and liabilities acquired, business combinations, net | 0 | (4,500) | (36,709) |
NET CASH USED IN INVESTING ACTIVITIES | (42,295) | (51,052) | (66,023) |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Payments of debt issuance costs | 0 | 0 | (2,498) |
Proceeds from issuance of common stock, net | 1,703 | 0 | 0 |
Payments on term loans | (95,741) | (12,510) | (12,008) |
Proceeds from term loans, net | 0 | 0 | 200,000 |
Proceeds from revolver | 54,000 | 0 | 194,000 |
Payments on revolver | (54,000) | 0 | (293,000) |
Payment pursuant to tax receivable agreement | (11,390) | (30,407) | 0 |
Other financing activities | (753) | (534) | (244) |
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | (106,181) | (43,451) | 86,250 |
Effect of exchange rate changes on cash | 697 | (1,434) | 1,949 |
Net change in cash and cash equivalents | (993) | (68,741) | 64,510 |
Cash and cash equivalents, beginning of period | 35,793 | 104,534 | 40,024 |
Cash and cash equivalents, end of period | $ 34,800 | $ 35,793 | $ 104,534 |
Organization and description of
Organization and description of the business | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and description of the business | Organization and description of the business General Forterra, Inc. (‘‘Forterra’’ or the ‘‘Company’’) is involved in the manufacturing, sale and distribution of building products in the United States (‘‘U.S.’’) and Eastern Canada. Forterra’s primary products are concrete drainage pipe, precast concrete structures, and water transmission pipe used in drinking and wastewater systems. These products are used in the residential, infrastructure and non-residential sectors of the construction industry. Forterra, a Delaware corporation, was formed on June 21, 2016 to hold the business of Forterra Building Products following an internal reorganization transaction in connection with its initial public offering ("IPO") as described below. The business of Forterra Building Products included indirect wholly-owned subsidiaries of LSF9 Concrete Holdings Ltd., ("LSF9"). Lone Star Fund IX (U.S.), L.P. , which is referred to along with its affiliates and associates, but excluding the Company and other companies that it owns as a result of its investment activity, as Lone Star, through its wholly-owned subsidiary LSF9, acquired the business of Forterra Building Products on March 13, 2015, (‘‘Acquisition’’). LSF9, which was formed on February 6, 2015 for the purpose of acquiring the business of Forterra Building Products had no operations prior to the date of the Acquisition. Initial Public Offering On October 6, 2016, Forterra filed an Amended and Restated Certificate of Incorporation which increased the number of authorized shares of common stock from 1,000 with a par value of $0.01 per share to 190,000,000 with a par value of $0.001 per share, and, immediately after which, effected a 41,619.472 for one stock split of its issued and outstanding common stock previously approved by the Company's Board of Directors. Following the stock split there were 41,619,472 shares of common stock outstanding. The Company's Amended and Restated Certificate of Incorporation has also authorized 10,000,000 shares of preferred stock that may be issued at the approval of the Company's Board of Directors. No shares of preferred stock have been issued or were outstanding as of December 31, 2019 . On October 25, 2016, Forterra sold 18,420,000 shares of common stock in its initial public offering ("IPO") at a public offering price of $18.00 per share. The Company received net proceeds of $313.3 million in the IPO before offering costs. Reorganization Prior to the consummation of the IPO, LSF9 distributed its brick operations in the United States and Eastern Canada to an affiliate of Lone Star, or the Bricks Disposition, recognized as a return of capital in the statement of shareholders' equity. Following the Bricks Disposition and prior to the consummation of the IPO, the remaining building products operations of LSF9 in the United States and Eastern Canada, were transferred to Forterra, Inc. in an internal reorganization under common control transaction (the "Reorganization"). Following the Reorganization, Forterra, Inc. became a wholly owned subsidiary of Forterra US Holdings, LLC, which is indirectly wholly owned by an affiliate of Lone Star. Refinancing Concurrent with the completion of the IPO, Forterra entered into a new asset based revolving credit facility for working capital and general corporate purposes, (the "Revolver"), and a new $1.05 billion senior term loan facility ("Term Loan"). On May 1, 2017, the Company amended the Term Loan to increase the principal outstanding by an additional $200.0 million and to reduce the interest margin applicable to the full balance thereof. The terms of the Term Loan and Revolver are described in greater detail in Note 11, Debt and deferred financing costs. |
Summary of significant accounti
Summary of significant accounting policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of significant accounting policies | Summary of significant accounting policies Principles of Consolidation The consolidated financial statements include the accounts and results of operations of Forterra, Inc. and its consolidated subsidiaries. Intercompany transactions and balances have been eliminated in consolidation. Basis of Presentation The consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (‘‘U.S. GAAP’’). Certain prior year numbers have been reclassified to conform to current year presentations. Business Combinations Assets acquired and liabilities assumed in business combination transactions, as defined by the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 805, Business Combination , are recorded at fair value using the acquisition method of accounting. The Company allocates the purchase price of acquisitions based upon the fair value of each component which may be derived from various observable and unobservable inputs and assumptions. Initial purchase price allocations are preliminary and subject to revision within the measurement period, not to exceed one year from the date of the transaction. The fair value of property, plant and equipment and intangible assets may be based upon the discounted cash flow method that involves inputs that are not observable in the market (Level 3). Goodwill assigned represents the amount of consideration transferred in excess of the fair value assigned to identifiable assets acquired and liabilities assumed. Use of estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the reporting date, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. These estimates are based on management’s best knowledge of current events and actions that the Company may undertake in the future. The more significant estimates made by management relate to fair value estimates for assets and liabilities acquired in business combinations; estimates for accrued liabilities for environmental cleanup, bodily injury and insurance claims; estimates for commitments and contingencies; and estimates for the realizability of deferred tax assets, the tax receivable agreement obligation, inventory reserves, allowance for doubtful accounts and impairment of goodwill and long-lived assets. Cash and cash equivalents Cash and cash equivalents include cash on hand and other highly liquid investments having an original maturity of less than three months. Receivables, net Receivables are recorded at net realizable value, which includes allowances for doubtful accounts. The Company reviews the collectability of trade receivables on an ongoing basis. The Company reserves for trade receivables determined to be uncollectible. This determination is based on the delinquency of the account, the financial condition of the customer and the Company’s collection experience. Concentration of credit risk Financial instruments that potentially subject the Company to concentrations of credit risk are primarily receivables. The Company performs ongoing credit evaluations of its customers’ financial condition and generally requires no collateral from its customers. The allowances for uncollectible receivables are based upon analysis of economic trends in the construction industry, detailed analysis of the expected collectibility of accounts receivable that are past due and the expected collectibility of overall receivables. The Company had an individual customer within its Water Pipe & Products segment that accounted for approximately 15% and 14% of the Company's total net sales for the years ended December 31, 2019 and 2018, respectively, and total receivables at December 31, 2019 and 2018 representing 11% and 16% of the Company total receivables, net, respectively. Concentration of Labor Approximately 32% of the Company’s employees are represented by collective bargaining agreements, and 42% of these employees are included in collective bargaining agreements that expire within 12 months. Inventories Inventories are valued at the lower of cost or net realizable value. The Company’s inventories are valued using the average cost and first-in-first-out methods. Inventories include materials, labor and applicable factory overhead costs. The value of inventory is adjusted for damaged, obsolete, excess and slow-moving inventory. Market value of inventory is estimated considering the impact of market trends, an evaluation of economic conditions, and the value of current orders relating to the future sales of each respective component of inventory. Property, plant and equipment, net Property, plant and equipment, which includes amounts recorded under capital lease arrangements, is stated at cost less accumulated depreciation. Depreciation of property, plant and equipment is computed using the straight-line method over the estimated useful lives of the assets. These lives range from 20 to 40 years for buildings, 4 to 20 years for machinery and equipment, and 5 to 10 years for other equipment and lower of lease term or useful life on leasehold improvements. Repair and maintenance costs are expensed as incurred. The Company’s depreciation expense is recorded in cost of goods sold and selling, general and administrative expenses in the statements of operations. The Company capitalizes interest during the active construction of major projects. Capitalized interest is added to the cost of the underlying assets and is depreciated over the useful lives of those assets. There was no interest capitalized for any of the periods presented in the financial statements. Impairment or disposal of long-lived assets The Company evaluates the recoverability of its long-lived assets in accordance with the provisions of ASC 360, Property, Plant and Equipment (“ASC 360”). ASC 360 requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets is measured by comparing the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. Such evaluations for impairment are significantly impacted by estimates of future prices for the Company’s products, capital needs, economic trends in the construction sector and other factors. If such assets are considered to be impaired, the impairment to be recognized is measured at the amount by which the carrying amount of the assets exceeds their fair value. Leases The Company has both capital and finance leases. T he Company determines if an arrangement is a lease at inception. Leases with an initial term of less than 12 months are not recorded on the balance sheet. Operating leases are included in operating lease right-of-use (“ROU”) assets, accrued liabilities, and long-term operating lease liabilities in the consolidated balance sheets. Finance leases are included in property, plant and equipment, accrued liabilities, and long-term finance lease liabilities in the consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company uses the implicit rate when readily determinable. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. For machinery and equipment leases, such as forklifts, the Company accounts for the lease and non-lease components as a single lease component. Minimum rent payments under operating leases are recognized as an expense on a straight-line basis over the lease term, including any rent free periods. Operating lease expenses for the years ended December 31, 2019, 2018 and 2017 were approximately $16.5 million , $24.3 million and $30.8 million , respectively. Goodwill and other intangible assets, net Goodwill represents the excess of costs over the fair value of identifiable assets acquired and liabilities assumed. The Company evaluates goodwill and intangible assets in accordance with ASC 350, Goodwill and Other Intangible Assets (“ASC 350”). ASC 350 requires goodwill to be either qualitatively or quantitatively assessed for impairment annually (or more frequently if impairment indicators arise) for each reporting unit. The Company performs its annual impairment testing of goodwill as of October 1 of each year and in interim periods if events occur that would indicate that it is more likely than not the fair value of a reporting unit is less than carrying value. The Company first assesses qualitative factors to evaluate whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as the basis for determining whether it is necessary to perform a quantitative goodwill impairment test. The Company may bypass the qualitative assessment for any reporting unit in any period and proceed directly with the quantitative analysis. The quantitative analysis compares the fair value of the reporting unit with its carrying amount. If the carrying amount of a reporting unit exceeds the fair value, impairment is recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. The Company evaluates its intangible assets with finite lives for indications of impairment whenever events or changes in circumstances indicate that the net book value may not be recoverable. Intangible assets with finite lives consist of customer relationships, customer backlogs, and brand names, and are amortized under the consumption method over the estimated useful lives. Factors that could trigger an impairment review include significant under-performance relative to expected historical or projected future operating results, significant changes in the manner of the Company's use of the acquired assets or the strategy for the Company's overall business or significant negative industry or economic trends. If this evaluation indicates that the value of the intangible asset may be impaired, the Company makes an assessment of the recoverability of the net book value of the asset over its remaining useful life. If this assessment indicates that the intangible asset is not recoverable, based on the estimated undiscounted future cash flows of the asset over the remaining amortization period, the Company reduces the net book value of the related intangible asset to fair value and may adjust the remaining amortization period. Investment in equity method investee The Company has an investment in a joint venture accounted for using the equity method. Under the equity method, carrying value is adjusted for the Company's share of the investee's earnings and losses, as well as capital contributions to and distributions from the investee. Distributions in excess of equity method earnings are recognized as a return of investment and recorded as investing cash inflows in the accompanying consolidated statements of cash flows. The Company classifies its share of income and loss related to its investments in its investee as a component of operating income or loss, as the Company's investments in the investee is an extension of the Company's core business operations. The Company evaluates its investment in the equity method investee for impairment whenever events or changes in circumstances indicate that the carrying value of its investment may have experienced an "other-than-temporary" decline in value. If such conditions exist, the Company compares the estimated fair value of the investment to its carrying value to determine if an impairment is indicated and determines whether the impairment is "other-than-temporary" based on its assessment of all relevant factors, including consideration of the Company's intent and ability to retain its investment. Derivatives and Hedge Accounting The Company has entered into derivative instruments to mitigate interest rate and foreign exchange rate risk. Certain derivative instruments are designated for hedge accounting under ASC 815-20, Derivatives - Hedging . Instruments that meet hedge criteria are formally designated as hedges at the inception of the instrument. The Company’s derivative assets and liabilities are measured at fair value. Fair value related to the cash flows occurring within one year are classified as current and the fair value related to the cash flows occurring beyond one year are classified as non-current in the consolidated balance sheets. For those instruments designated as hedges, the Company recognizes the changes in fair value in other comprehensive income (“OCI”), and recognizes any ineffectiveness immediately in earnings. Valuation of derivative assets and liabilities reflect the value of the instrument including counterparty credit risk. These values also take into account the Company’s own credit standing. Deferred financing costs In conjunction with its debt, the Company had a net balance of $25.1 million in debt discounts and debt issuance costs as of December 31, 2019 . These costs are amortized over the life of the applicable debt instrument to interest expense utilizing the effective interest method. Fair value measurement The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels: Level 1 Inputs – Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. Level 2 Inputs – Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. Level 3 Inputs – Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date. The Company's other financial instruments consist primarily of cash and cash equivalents, trade and other receivables, accounts payable, accrued expenses, derivative financial instruments and long-term debt. The carrying value of the Company’s trade and other receivables, trade payables and accrued expenses approximates fair value due to their highly liquid nature, short-term maturity, or competitive rates assigned to these financial instruments. The Company adjusts the carrying amount of certain non-financial assets to fair value on a non-recurring basis when they are impaired. Foreign currency translation The Company uses the U.S. dollar as its functional currency for operations in the U.S. and Mexico, and the Canadian dollar for operations in Canada. The assets, liabilities, revenues and expenses of the Company’s Canadian operations are translated in accordance with ASC 830, Foreign Currency Matters. Environmental remediation liabilities The Company accrues for costs on an undiscounted basis associated with environmental remediation obligations when such costs are probable and reasonably estimable; if an estimated amount is likely to fall within a range and no amount within that range can be determined to be the better estimate, the minimum amount of the range is recorded. Claims for recoveries from insurance carriers and other third parties are not recorded until it is probable that the recoveries will be realized. Such accruals are adjusted as further information develops or circumstances change. Environmental expenditures that relate to current operations or to conditions caused by past operations are expensed. Expenditures that create future benefits are capitalized. At December 31, 2019 and 2018, the Company had environmental obligations of $1.6 million and $1.6 million , respectively, which are recorded within accrued liabilities and other long-term liabilities in the consolidated balance sheets. Stock-based plans The Company applies the provisions of ASC 718, Compensation - Stock Compensation, in its accounting and reporting for stock-based compensation. ASC 718 requires all stock-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. All unvested options outstanding under the Company's option plans have grant prices equal to the market price of the Company's stock on the dates of grant. Compensation cost for restricted stock and restricted stock units is determined based on the fair market value of the Company's stock at the date of grant. Stock-based compensation expense is generally recognized over the required service period, or over a shorter period when employee retirement eligibility is a factor. The Company recognizes forfeitures as they occur. Awards that may be settled in cash or company stock are classified as liabilities and remeasured at fair value at the end of each reporting period until the awards are settled. Income Taxes Deferred tax assets generally represent items that can be used as a tax deduction or credit in the Company's tax returns in future years for which a tax benefit has already been recorded in the Company's consolidated statement of operations. The measurement of a deferred tax asset is reduced, if necessary, by a valuation allowance if, based on the available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax liabilities generally represent tax expense recognized in the financial statements for which payment has been deferred, or expense for which the Company has already taken a deduction in its tax return but have not yet recognized as expense in the financial statements. At December 31, 2018, the Company finalized its policy and elected to use the period cost method for Global Intangible Low-taxed Income (“GILTI”) provisions, and therefore, have not recorded deferred taxes for basis differences expected to reverse in future periods. The Company recognizes a tax benefit for uncertain tax positions only if the Company believes it is more likely than not that the position will be upheld on audit based solely on the technical merits of the tax position. The Company evaluates uncertain tax positions after the consideration of all available information. Penalties and interest related to income tax uncertainties, should they occur, would be included in income tax expense in the period in which they are incurred. Revenue recognition The Company's revenue contracts are primarily single performance obligations for the sale of product both to trade customers and distributors. A majority of revenue recognized by the Company is recognized at the time control is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for the products. The Company considers several indicators for the transfer of control to its customers, including the significant risks and rewards of ownership of products, the Company's right to payment and the legal title of the products. Based upon the assessment of control indicators, sales to trade customers and distributors are generally recognized when products are delivered to customers. All variable consideration that may affect the total transaction price, including contractual discounts, rebates, returns and credits, is included in net sales. Estimates for variable consideration are based on historical experience, anticipated performance and management's judgment. Generally, the Company's contracts do not contain significant financing. For certain engineering and construction contracts and building contracting arrangements, the Company enters into long-term contracts with customers. Revenue is recognized as the identified performance obligations are satisfied over time using an acceptable input method to measure the progress toward completion of the performance obligation if: the customer receives the benefits as work is performed, the customer controls the asset as it is being produced, or if the product being produced for the customer has no alternative use and the Company has a contractual right to payment. The Company uses its cost incurred to date relative to total estimated costs at completion to measure progress. The Company's contract liabilities consist of billings to customers in excess of revenue recognized which the Company records as deferred revenue. Revenue recognized during the years ended December 31, 2019 and December 31, 2018, which was included in contract liabilities at the beginning of each period was not material. Contract assets include revenue recognized in excess of amounts billed, and balances billed but not yet paid by customers under retainage provisions which are classified as a current asset within receivables, net on the Company's consolidated balance sheet. The Company had no material contract assets on the consolidated balance sheets as of December 31, 2019 or December 31, 2018. For the years ended December 31, 2019, 2018 and 2017, revenue recognized in continuing operations using the percentage of completion method amounted to 2% , 1% , and 3% and of total net sales, respectively. The Company records net sales including taxes collected on behalf of its customers. Shipping and handling costs are accounted for as contract fulfillments costs and classified as cost of goods sold. See Note 20, Segment reporting, for the Company's disaggregated revenue disclosures. The Company incurs shipping costs to third parties for the transportation of building products and bills such costs to customers. For the years ended December 31, 2019 , 2018 and 2017, the Company recorded freight costs of approximately $131.8 million , $127.0 million and $132.3 million , respectively, on a gross basis within net sales and cost of goods sold in the accompanying consolidated statements of operations. The Company generally provides limited warranties related to its products which cover manufacturing in accordance with the specifications identified on the face of its quotation or order acknowledgment and to be free of defects in workmanship or materials. The warranty periods typically extend for a limited duration of one year. The Company estimates and accrues for potential warranty exposure related to products which have been delivered. Cost of goods sold and selling, general and administrative expenses Cost of goods sold includes costs of production, inbound freight charges for raw materials, outbound freight to customers, purchasing and receiving costs, inspection costs and warehousing at plant distribution facilities. Selling, general and administrative costs include expenses for sales, marketing, legal, accounting and finance services, human resources, customer support, treasury and other general corporate services. Recent Accounting Guidance Adopted In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-02, Leases (Topic 842) , which establishes the principles that lessees and lessors shall apply to report information about the amount, timing, and uncertainty of cash flows arising from a lease. Under the new guidance, lessees are required to recognize a right-of-use asset and a lease liability, measured on a discounted basis, at the commencement date for all leases with terms greater than twelve months. Additionally, this guidance required disclosures to help investors and other financial statement users better understand the amount, timing and uncertainty of cash flows arising from leases, including qualitative and quantitative requirements. The Company adopted Topic 842 during the first quarter of 2019, using the transition approach that permits application of the new standard at the adoption date instead of the earliest comparative period presented in the financial statements. To adopt Topic 842, the Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the Company to carry forward its historical assessments of (1) whether the existing contracts contained a lease, (2) the lease classification for existing leases, and (3) initial direct cost for existing leases. In addition to the package of practical expedients, the Company has elected the adoption expedients of (1) the exclusion of leases with terms less than 12 months, and (2) the election not to separate non-lease components from lease components for certain classes of underlying leased assets. To adopt Topic 842, the Company recognized a cumulative catch-up adjustment to the opening balance sheet presented January 1, 2019. The adoption of the standard had a material impact on the Company’s consolidated balance sheet but did not have an impact on its consolidated statements of operations, comprehensive income (loss) or cash flows. As a result of the adoption, the Company has recorded additional lease assets and lease liabilities of approximately $63.9 million and $65.2 million , respectively, as of January 1, 2019. In addition, the Company recognized the carrying value of deferred gains related to certain sale and operating leaseback of land of $9.3 million , net of tax impact of $2.3 million , to beginning retained deficit as of January 1, 2019, in accordance with ASC 842-10-65-1. In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income to allow a reclassification from accumulated other comprehensive income (“AOCI”) to retained earnings for stranded tax effects resulting from the U.S. tax reform legislation commonly known as the Tax Cuts and Jobs Act of 2017 (“TCJA”). This guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. The Company early adopted the guidance provided in the ASU during the first quarter of 2018 and reclassified $0.8 million of stranded deferred tax benefits related to its derivative instruments from accumulated other comprehensive loss to retained deficit. Recent Accounting Guidance Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) . The standard replaces the incurred loss impairment methodology under current U.S. GAAP with a methodology that reflects expected credit losses and requires the use of a forward-looking expected credit loss model for accounts receivables, loans, and other financial instruments. The standard requires a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The new standard is effective for fiscal years beginning after December 15, 2019. The Company plans to adopt the new credit loss standard effective January 1, 2020. The Company does not expect the new credit loss standard to have a material effect on its consolidated financial statements. |
Acquisitions and divestitures
Acquisitions and divestitures | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Acquisitions and divestitures | Acquisitions and divestitures The acquisitions described below have been accounted for as business combinations (except as discussed below) as defined by ASC 805. The Company allocated the purchase price to the individually identifiable assets acquired and liabilities assumed based on their estimated fair value on the date of acquisition. The excess purchase price over those fair values was recorded as goodwill. The determination of fair values of the acquired assets and assumed liabilities required significant judgment, including estimates impacting the determination of estimated lives of tangible and intangible assets, calculation of the fair value of property, plant and equipment, inventory, and various intangibles. The fair values of assets and liabilities were determined using level 3 inputs as defined by ASC 820. 2019 transactions On March 1, 2019, the Company acquired certain assets of Texas limited liability companies Houston Buckner Precast, LLC, Buckner Precast, LLC, Montgomery 18905 E. Industrial, LLC, and 1763 Old Denton Road, LLC (altogether "Buckner") for consideration of $11.8 million in cash, inclusive of a working capital adjustment. The acquired Buckner assets did not meet the definition of a business and, as such, the transaction was accounted for as an asset acquisition pursuant to the guidance in subsection 805-50 of ASC 805, Business Combinations . The assets of the Buckner acquisition operate as part of the Company’s Drainage Pipe & Products segment. 2018 transactions Acquisitions On April 2, 2018, the Company acquired substantially all the assets of Watkins Industries, Inc. for aggregate consideration of $4.5 million in cash and accounted for the transaction as a business combination. During the third quarter of 2018, the Company acquired certain assets of Anchor Concrete Products, Ltd. in Kingston, Ontario, for aggregate consideration of $2.5 million in cash and accounted for the transaction as an asset acquisition. Both of these acquisitions operate in the Company's Drainage Pipe & Products segment. Divestitures On January 31, 2018, the Company divested assets relating to the operation of certain Drainage Pipe & Products facilities in Tennessee, Alabama, and Georgia to Foley Products Company (“Foley”) in exchange for $9.1 million in cash, land in Texas and a Drainage Pipe & Products facility located in Prentiss, Mississippi. The acquisition side of the exchange transaction was accounted for as a business combination as defined by FASB ASC 805, Business Combinations . In accordance with ASC 805, the purchase price is measured as the acquisition date fair value of the assets transferred by the Company to Foley in the exchange. In the exchange, the Company divested of the net working capital and certain of the real property of its Drainage Pipe & Products plants in Tennessee and Alabama, as well as the net working capital of certain Drainage Pipe & Products plants in Georgia. The purchase price of $37.2 million was the fair value of the divested assets which resulted in the recognition of a gain of $6.0 million , recognized in Other income (expense), net. The Company allocated the purchase price to the individually identifiable assets acquired and liabilities assumed based on their estimated fair value on the date of acquisition. The excess purchase price over those fair values was recorded as goodwill. The determination of fair values of the divested and acquired assets and assumed liabilities requires significant judgment, including estimates impacting the determination of estimated lives of tangible and intangible assets, calculation of the fair value of property, plant and equipment, inventory, and various intangibles. The fair values of assets and liabilities were determined using level 3 inputs as defined by ASC 820, Fair Value Measurements and Disclosures . The final fair values of the assets acquired and liabilities assumed in the transaction, including $9.1 million in cash, the Prentiss plant, and a parcel of land in Texas, at the acquisition date are as follows (in thousands) : Net working capital $ 10,984 Property, plant and equipment 9,221 Customer relationship intangible 2,100 Non-compete agreement intangible 5,600 Other intangibles 290 Net identifiable assets acquired 28,195 Goodwill 8,996 Consideration transferred $ 37,191 2017 transactions Acquisitions On February 3, 2017, Forterra acquired the assets of Royal Enterprises America, Inc. ("Royal") for aggregate consideration of $35.5 million in cash, including customary working capital adjustments. Royal manufactured concrete drainage pipe, precast concrete products, storm water treatment technologies and erosion control products serving the greater Minneapolis market. The acquisition was financed with borrowings on the Revolver. The respective fair values of the assets acquired and liabilities assumed at the acquisition date for the Royal acquisition are as follows: 2017 Royal Net working capital $ 2,994 Property, plant and equipment, net 12,335 Customer relationship intangible 1,676 Non-compete agreement intangible 866 Trade names 308 Customer backlog intangible 63 Patents 72 Other assets and liabilities (726 ) Net identifiable assets acquired 17,588 Goodwill 17,903 Cash consideration transferred $ 35,491 Goodwill recognized is attributable primarily to expected operating efficiencies and expansion opportunities in the business acquired. Goodwill is deductible for tax purposes. Divestitures Effective July 31, 2017, Forterra completed the U.S. Pressure Pipe Divestiture, selling its U.S. concrete and steel pressure pipe business, which was part of the Company's Water Pipe & Products segment to Thompson Pipe Group ("TPG"), in exchange for approximately $23.2 million in cash, exclusive of fees and expenses, as well as certain assets relating to a U.S. drainage pipe and products manufacturing facility. The assets acquired, recognized at fair value, include $3.8 million of working capital, $1.8 million of machinery and equipment, and a customer intangible totaling $0.8 million . The U.S. Pressure Pipe Divestiture generated a pre-tax loss of $32.3 million recorded in other income (expense), net. The total pre-tax loss of the U.S. concrete and steel pressure pipe business was $50.9 million for the year ended December 31, 2017 inclusive of the loss on U.S. Pressure Pipe Divestiture of $32.3 million , and long-lived asset impairment of $7.5 million . Transaction costs For the years ended December 31, 2019 , 2018 and 2017, the Company recognized aggregate transaction costs, including legal, accounting, valuation, and advisory fees, specific to the transactions identified above of $0.2 million , $0.8 million , and $0.4 million , respectively . These costs are recorded in the consolidated statements of operations within selling, general & administrative expenses. |
Receivables, net
Receivables, net | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Receivables, net | Receivables, net Receivables consist of the following at December 31, 2019 and 2018 (in thousands) : December 31, 2019 2018 Trade receivables $ 178,698 $ 188,999 Amounts billed, but not yet paid under retainage provisions 3,093 2,065 Other receivables 26,078 9,545 Total receivables $ 207,869 $ 200,609 Less: Allowance for doubtful accounts (2,068 ) (2,141 ) Receivables, net $ 205,801 $ 198,468 The Company records provisions for doubtful accounts in selling, general and administrative expenses in the consolidated statements of operations. The table below summarizes the Company's allowance for doubtful accounts for the periods presented (in thousands) : Allowance for doubtful accounts Balance at December 31, 2017 $ (4,033 ) Recovery on doubtful accounts 1,224 Write-offs and adjustments 668 Balance at December 31, 2018 $ (2,141 ) Provision for doubtful accounts (387 ) Write-offs and adjustments 460 Balance at December 31, 2019 $ (2,068 ) |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consist of the following at December 31, 2019 and December 31, 2018 (in thousands) : December 31, 2019 2018 Finished goods $ 161,440 $ 193,603 Raw materials 76,237 90,376 Work in process 806 1,051 Total inventories $ 238,483 $ 285,030 |
Investment in equity method inv
Investment in equity method investee | 12 Months Ended |
Dec. 31, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investment in equity method investee | Investment in equity method investee The Company owns 50% of the Common Unit voting shares of Concrete Pipe & Precast LLC ("CP&P") and consequently, has recorded its investment in the Common Unit voting shares in accordance with ASC 323, Investments – Equity Method and Joint Ventures , under the equity method of accounting. The Company's investment in the joint venture as of December 31, 2019 and 2018 was $50.0 million and $50.6 million , respectively, which is included within the Drainage Pipe & Products segment. At December 31, 2019, the difference between the amount at which the Company's investment is carried and the amount of the Company's share of the underlying equity in net assets of CP&P was approximately $13.0 million . The basis difference is primarily attributable to the value of land and equity method goodwill associated with the investment. The following reflects the Company's distribution and earnings in the equity investment (in thousands): Year ended December 31, 2019 2018 2017 Distribution received from CP&P $ (11,039 ) $ (13,141 ) (13,717 ) Share of earnings in CP&P 10,538 10,234 12,432 Amortization of excess fair value of investment (72 ) (72 ) (72 ) Selected financial data for CP&P on a 100% basis is as follows ( in thousands ): Year ended December 31, 2019 2018 2017 Net sales $ 136,430 $ 125,744 $ 137,458 Gross profit 40,379 37,491 43,453 Income from operations 20,899 19,729 25,346 Net income 20,844 19,804 25,437 |
Property, plant and equipment,
Property, plant and equipment, net | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property, plant and equipment, net | Property, plant and equipment, net Property, plant and equipment, net consist of the following at December 31, 2019 and 2018 (in thousands) : December 31, 2019 2018 Machinery and equipment $ 398,127 $ 373,881 Land, buildings and improvements 240,403 235,819 Other equipment 8,660 6,962 Construction-in-progress 29,157 32,448 Total property, plant and equipment 676,347 649,110 Less: accumulated depreciation (200,772 ) (156,943 ) Property, plant and equipment, net $ 475,575 $ 492,167 Depreciation expense totaled $49.8 million , $ 52.9 million and $60.2 million for the years ended December 31, 2019 , 2018 and 2017, respectively, which is included in cost of goods sold and selling, general and administrative expenses in the consolidated statements of operations. As of December 31, 2019 and 2018, gross assets recorded under finance leases, consisting primarily of land and buildings, were $53.8 million and $52.1 million , respectively, and accumulated depreciation was $3.8 million and $1.0 million , respectively. Impairments For the year ended December 31, 2019, the Company recorded asset impairment charges of $0.1 million for its property, plant and equipment. For the year ended December 31, 2018, the Company recorded impairment charges primarily in conjunction with plant closings undertaken for purposes of achieving operating efficiencies and recognized asset impairment charges for its property, plant and equipment of $1.0 million . For the year ended December 31, 2017, the Company recorded $7.5 million of impairment charges primarily related to assets held for sale in conjunction with the sale of its U.S. concrete and steel pressure pipe business. See Note 3, Acquisitions and divestitures for additional details . Asset impairments are included in impairment and exit charges on the consolidated statements of operations. |
Goodwill and other intangible a
Goodwill and other intangible assets, net | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and other intangible assets, net | Goodwill and other intangible assets, net The Company has goodwill which has been recorded in connection with its acquisition of businesses. The following table summarizes the changes in goodwill by operating segment for the years ended December 31, 2019 and December 31, 2018 (in thousands) : Drainage Pipe & Products Water Pipe & Products Total Balance at December 31, 2017 $ 179,723 $ 316,418 $ 496,141 Acquisitions 9,951 — 9,951 Foreign currency and other adjustments 159 1,942 2,101 Balance at December 31, 2018 189,833 318,360 508,193 Foreign currency and other adjustments 633 — 633 Balance at December 31, 2019 $ 190,466 $ 318,360 $ 508,826 Goodwill is required to be tested for impairment at the reporting unit level. The Company has three reporting units which have goodwill. The Company uses a combination of an income approach and a market approach to determine the fair value of the reporting unit. The income approach uses a reporting unit's estimated future cash flows, discounted at the weighted average cost of capital of a hypothetical third-party buyer. The market approach estimates fair value by applying cash flow multiples to the reporting unit's operating performance. The multiples are derived from comparable publicly traded companies with similar operating and investment characteristics to the reporting unit. The calculation of business enterprise value is based on significant unobservable inputs, such as price trends, customer demand, material costs and discount rates, and are classified as Level 3 in the fair value hierarchy. The Company's impairment determinations involve significant assumptions and judgments, as discussed above. Different assumptions regarding any of these inputs could have a significant effect on the various valuations. The Company performed its annual goodwill impairment test as of October 1st of each year by conducting a quantitative analysis for all of the Company’s reporting units. In 2018 and 2019, the calculated fair value of the reporting units exceeded book value in all circumstances; therefore, no annual impairment charge was recorded in either of these periods. During the year ended December 31, 2017, as a result of the interim goodwill impairment testing of its Canadian concrete pressure pipe reporting unit, the Company determined the carrying value of the reporting unit's goodwill was fully impaired and a goodwill impairment charge of $3.0 million was recorded. Intangible assets other than goodwill at December 31, 2019 included the following (in thousands) : Weighted average amortization period (in years) Gross carrying amount as of December 31, 2019 Accumulated amortization Net carrying value as of December 31, 2019 Customer relationships 10 $ 235,907 $ (135,038 ) $ 100,869 Trade names 10 39,390 (19,764 ) 19,626 Patents 11 23,629 (15,956 ) 7,673 Customer backlog 0.8 13,209 (13,209 ) — Non-compete agreements 5 17,090 (9,020 ) 8,070 Developed technology 17 6,354 (374 ) 5,980 Other 10 867 (411 ) 456 Total intangible assets $ 336,446 $ (193,772 ) $ 142,674 Intangible assets other than goodwill at December 31, 2018 included the following (in thousands) : Weighted average amortization period (in years) Gross carrying amount as of December 31, 2018 Accumulated amortization Net carrying value as of December 31, 2018 Customer relationships 10 $ 231,056 $ (99,583 ) $ 131,473 Trade names 10 39,390 (14,867 ) 24,523 Patents 11 23,629 (12,325 ) 11,304 Customer backlog 0.8 13,206 (13,206 ) — Non-compete agreements 5 15,618 (6,044 ) 9,574 In-Process R&D (1) Indefinite-lived 6,354 — 6,354 Other 10 867 (306 ) 561 Total intangible assets $ 330,120 $ (146,331 ) $ 183,789 (1) Reclassified to developed technology in the first quarter of 2019. Amortization expense totaled $47.4 million , $52.5 million and $55.4 million for the years ended December 31, 2019 , December 31, 2018 and December 31, 2017, respectively, which is included in selling, general and administrative expenses in the consolidated statements of operations. The estimated amortization expense relating to amortizable intangible assets for the next five years is as follows (in thousands) : Year ended Intangible assets subject to amortization 2020 $ 41,286 2021 33,221 2022 23,984 2023 17,651 2024 12,742 Total $ 128,884 |
Fair value measurement
Fair value measurement | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair value measurement | Fair value measurement The Company's financial instruments consist primarily of cash and cash equivalents, trade and other receivables, derivative instruments, accounts payable, long-term debt, operating and finance lease liabilities, accrued liabilities and the tax receivable agreement obligation. The carrying value of the Company's trade receivables, other receivables, trade payables, the asset-based revolver and accrued liabilities approximates fair value due to their short-term maturity or other terms related to these financial instruments. The Company may adjust the carrying amount of certain non-financial assets to fair value on a non-recurring basis when they are impaired. The estimated carrying amount and fair value of the Company’s financial instruments measured and recorded at fair value on a recurring basis are as follows for the dates indicated (in thousands) : Fair value measurements at December 31, 2019 using Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Fair Value December 31, 2018 Recurring: Non-current assets Derivative asset $ — $ 258 $ — $ 258 Fair value measurements at December 31, 2018 using Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Fair Value December 31, 2017 Recurring: Non-current assets Derivative asset $ — $ 6,659 $ — $ 6,659 Liabilities and assets classified as level 2 which are recorded at fair value are valued using observable market inputs. The fair values of derivative assets and liabilities are determined using quantitative models that utilize multiple market inputs including interest rates and exchange rates to generate continuous yield or pricing curves and volatility factors to value the position. The majority of market inputs are actively quoted and can be validated through external sources, including brokers, market transactions and third-party pricing services. The fair values of derivative assets and liabilities include adjustments for market liquidity, counter-party credit quality and other instrument-specific factors, where appropriate. In addition, the Company incorporates within its fair value measurements a valuation adjustment to reflect the credit risk associated with the net position. Positions are netted by counter-parties, and fair value for net long exposures is adjusted for counter-party credit risk while the fair value for net short exposures is adjusted for the Company’s own credit risk. The estimated carrying amount and fair value of the Company’s financial instruments and liabilities for which fair value is only disclosed is as follows (in thousands) : Fair value measurements at December 31, 2019 using Carrying Amount December 31, 2019 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Fair Value December 31, 2019 Non-current liabilities Term Loan $1,098,303 — $1,102,295 — $1,102,295 Tax receivable agreement payable 77,385 — — 47,625 47,625 Fair value measurements at December 31, 2018 using Carrying Amount December 31, 2018 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Fair Value December 31, 2018 Non-current liabilities Term Loan $1,188,605 — $1,103,628 — $1,103,628 Tax receivable agreement payable 88,775 — — 51,832 51,832 The fair value of debt is valued using a market approach based on the indicative quoted prices for the Company's debt instruments traded in over-the-counter markets and, therefore, is classified as Level 2 within the fair value hierarchy. See Note 11, Debt and deferred financing costs, for a further discussion of Company debt. The fair value of the tax receivable agreement payable was determined using a discounted cash flow methodology using level 3 inputs as defined by ASC 820, Fair Value Measurements and Disclosures . The determination of fair value required significant judgment, including estimates of the timing and amounts of various tax attributes. These estimates are based on management’s best knowledge of current events and actions that the Company may undertake in the future. Actual results could differ from these estimates. See Note 16, Commitments and contingencies, for a further discussion of the Company's tax receivable agreement. |
Accrued liabilities
Accrued liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Payables and Accruals [Abstract] | |
Accrued liabilities | Accrued liabilities Accrued liabilities consist of the following at December 31, 2019 and December 31, 2018 (in thousands) : December 31, 2019 2018 Accrued payroll and employee benefits $ 32,815 $ 31,095 Short-term capital leases 16,542 16,430 Short-term operating leases 8,784 — Accrued taxes 5,354 11,489 Accrued rebates 9,895 3,542 Warranty 5,536 3,251 Environmental obligation 718 570 Other miscellaneous accrued liabilities 9,195 3,859 Total accrued liabilities $ 88,839 $ 70,236 |
Debt and deferred financing cos
Debt and deferred financing costs | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Debt and deferred financing costs | Debt and deferred financing costs The Company’s debt consisted of the following (in thousands) : December 31, December 31, 2019 2018 Term Loan, net of debt issuance costs and original issuance discount of $ 1,098,303 $ 1,188,605 Total debt $ 1,098,303 $ 1,188,605 Less: current portion debt (12,510 ) (12,510 ) Total long-term debt $ 1,085,793 $ 1,176,095 Concurrent with the completion of the IPO, Forterra entered into a $300 million asset based revolving credit facility for working capital and general corporate purposes (“Revolver”) and a $1.05 billion senior term loan facility (“Term Loan”). The Term Loan initially provided for a $1.05 billion senior secured term loan. Subject to the conditions set forth in the term loan agreement, the Term Loan may be increased by (i) up to the greater of $285.0 million and 1.0x consolidated EBITDA (defined below) of Forterra and its restricted subsidiaries for the four quarters most recently ended prior to such incurrence plus (ii) the aggregate amount of any voluntary prepayments, plus (iii) an additional amount, provided certain financial tests are met. Effective May 1, 2017 the Company amended the Term Loan to increase the principal outstanding by an additional $200.0 million and to reduce the interest margins applicable to the full balance of the Term Loan by 50 basis points such that applicable margin based on LIBOR was reduced from 3.50% to 3.00% . The net proceeds from the incremental term loan of $196.8 million were used to pay down a portion of the outstanding balance on the Revolver. This amendment had no effect on the Company's ability to increase the size of the Term Loan under the original provisions. The Term Loan matures on October 25, 2023 and is subject to quarterly amortization equal to 0.25% of the initial principal amount. Interest accrues on outstanding borrowings thereunder at a rate equal to LIBOR (with a floor of 1.0% ) or an alternate base rate, in each case plus a margin of 3.00% or 2.00% , respectively. The weighted average interest rates for the Term Loan were 5.2% and 5.0% for the years ended December 31, 2019 and 2018, respectively. During 2019, the Company repaid $87.0 million of the Term Loan before its maturity at a market value of $83.2 million . Consequently, the Company wrote off a proportionate share of debt issuance costs of $2.1 million and recognized a net gain of $1.7 million on the early extinguishment of debt which was included in the consolidated statements of operations. The Revolver provides for an aggregate principal amount of up to $300.0 million , with up to $280.0 million to be made available to the U.S. borrowers and up to $20.0 million to be made available to the Canadian borrowers (the allocation may be modified periodically at the Company's request). Subject to the conditions set forth in the revolving credit agreement related to the Revolver (the "Revolving Credit Agreement"), the Revolver may be increased by up to the greater of (i) $100.0 million and (ii) such amount as would not cause the aggregate borrowing base to be exceeded by more than $50.0 million . Borrowings under the Revolver may not exceed a borrowing base equal to the sum of (i) 100% of eligible cash, (ii) 85% of eligible accounts receivable and (iii) the lesser of (a) 75% of eligible inventory and (b) 85% of the orderly liquidation value of eligible inventory, with the U.S. and Canadian borrowings being subject to separate borrowing base limitations. The advance rates for accounts receivable and inventory are subject to increase by 2.5% during certain periods. As of December 31, 2019 , the Revolver had no outstanding borrowings, and the weighted average interest rate was 3.72% for borrowings during the period. The Revolver matures on October 25, 2021. The facility also provides for the issuance of letters of credit of up to an agreed sublimit. Interest accrues on outstanding borrowings at a rate equal to LIBOR or CDOR plus a margin ranging from 1.25% to 1.75% per annum, or at an alternate base rate, Canadian prime rate or Canadian base rate plus a margin ranging from 0.25% to 0.75% per annum, in each case, based upon the average excess availability under the Revolver for the most recently completed calendar quarter. The obligations of the borrowers under the Revolver are guaranteed by Forterra and its direct and indirect wholly-owned restricted subsidiaries other than certain excluded subsidiaries; provided that the obligations of the U.S. borrowers are not guaranteed by the Canadian subsidiaries. The Revolver is secured by substantially all of the assets of the borrowers; provided that the obligations of the U.S. borrowers are not secured by any liens on more than 65% of the voting stock of the Canadian subsidiaries or assets of the Canadian subsidiaries. Interest on the 2016 Revolver is floating, based on a reference rate plus an applicable margin. In addition, Forterra pays a facility fee of between 20.0 and 32.5 basis points per annum based upon the utilization of the total Revolver. Availability under the Revolver at December 31, 2019 based on draws, outstanding letters of credit of $16.0 million and allowable borrowing base was $257.7 million . The obligations of the borrower under the Term Loan are guaranteed by Forterra and each of its direct and indirect material wholly-owned domestic subsidiaries other than any of Forterra's Canadian subsidiaries and certain other excluded subsidiaries, or the Guarantors. The Term Loan is secured by substantially all of the assets of Forterra, the borrower and the Guarantors; provided that the obligations under the Term Loan are not secured by any liens on more than 65% of the voting stock of the Canadian subsidiaries or assets of the Canadian subsidiaries. The Term Loan contains customary representations and warranties, and affirmative and negative covenants, that, among other things, restrict the ability of Forterra and its restricted subsidiaries to incur additional debt, incur or permit liens on assets, make investments and acquisitions, consolidate or merge with any other company, engage in asset sales and pay dividends and make distributions. The Term Loan does not contain any financial covenants. Obligations under the Term Loan may be accelerated upon certain customary events of default (subject to grace periods, as appropriate). The Company was in compliance with all applicable covenants under the Term Loan as of December 31, 2019. The Revolver contains customary representations and warranties, and affirmative and negative covenants, including representations, warranties, and covenants that, among other things, restrict the ability of Forterra and its restricted subsidiaries to incur additional debt, incur or permit liens on assets, make investments and acquisitions, consolidate or merge with any other company, engage in asset sales and pay dividends and make distributions. The Revolving Credit Agreement contains a financial covenant restricting Forterra from allowing its fixed charge coverage ratio to drop below 1.00 :1.00 during a compliance period, which is triggered when the availability under the Revolver falls below a threshold set forth in the Revolving Credit Agreement. Obligations under the Revolving Credit Agreement may be accelerated upon certain customary events of default (subject to grace periods, as appropriate). The fixed charge coverage ratio is the ratio of consolidated earnings before interest, depreciation, and amortization, or EBITDA, less cash payments for capital expenditures and income taxes to consolidated fixed charges (interest expense plus scheduled payments of principal on indebtedness). The Company was in compliance with all applicable covenants under the Revolver as of December 31, 2019 . As of December 31, 2019 , scheduled maturities of long-term debt were as follows (in thousands) : Term Loan 2020 $ 12,510 2021 12,510 2022 12,510 2023 1,085,828 $ 1,123,358 |
Other long-term liabilities
Other long-term liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Other long-term liabilities | Other long-term liabilities Other long-term liabilities consist of the following for the years ended December 31, 2019 and 2018 (in thousands) : December 31, 2019 2018 Workers' compensation $ 9,023 $ 9,837 Deferred rent — 4,259 Employee benefits 2,945 3,307 Insurance 1,345 1,550 Environmental remediation liability 872 1,001 Other miscellaneous long-term liabilities 7,721 2,713 $ 21,906 $ 22,667 |
Derivatives and hedging
Derivatives and hedging | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and hedging | Derivatives and hedging The Company uses derivatives to manage selected foreign exchange and interest rate exposures. The Company does not use derivative instruments for speculative trading purposes, and, except as discussed below, cash flows from derivative instruments are included in net cash provided by (used in) operating activities in the consolidated statements of cash flows. At December 31, 2017, the Company had foreign exchange forward contracts, designated as net investment hedges in accordance with ASC 815-20 Derivatives - Hedging , which allows for the effective portion of the changes in the fair value of the instruments to be captured in accumulated other comprehensive income, and ineffective portion recorded in earnings. These instruments were novated to Forterra by an affiliate concurrent with the Reorganization, directly prior to the IPO and refinancing described in Note 1 and were settled in March 2018 resulting in a cash outlay of $5.0 million . This cash outlay was recorded within the investing activities section of the consolidated statements of cash flows. The net investment hedges were intended to mitigate foreign exchange exposure related to non-U.S. dollar net investments in certain foreign subsidiaries against changes in foreign exchange rates. A quantitative analysis was utilized to assess hedge effectiveness for the hedges. The Company assessed the hedge effectiveness and measured the amount of ineffectiveness for the hedge relationships based on changes in forward exchange rates. Cumulative changes in fair value of the effective portion of the hedging instruments were recorded in Accumulated other comprehensive income, and will be reclassified into earnings upon the sale or complete or substantially complete liquidation of the foreign entity. Any hedge ineffectiveness is recorded immediately in current period earnings. The Company did no t have any ineffectiveness related to net investment hedges during the years ended December 31, 2019 and 2018. O n February 9, 2017, Forterra entered into interest rate swap transactions with a combined notional value of $525 million . Under the terms of the swap transactions, Forterra agreed to pay a fixed rate of interest of 1.52% and receive floating rate interest indexed to one-month LIBOR with monthly settlement terms with the swap counterparties. The swaps have a three -year term and expire on March 31, 2020. The interest rate swaps are not designated as cash flow hedges, therefore all changes in the fair value of these instruments are captured as a component of interest expense in the consolidated statements of operations. Accordingly, cash flows from the monthly interest rate swap settlements are included in net cash provided by (used in) operating activities in the consolidated statements of cash flows. The Company elects to present all derivative assets and derivative liabilities on a net basis on its balance sheets when a legally enforceable International Swaps and Derivatives Association, Inc. (“ISDA”) Master Agreement exists. An ISDA Master Agreement is an agreement between two counterparties, which may have multiple derivative transactions with each other governed by such agreement, and such ISDA Master Agreement generally provides for the net settlement of all or a specified group of these derivative transactions, through a single payment, in a single currency, in the event of a default on, or affecting any, one derivative transaction or a termination event affecting all, or a specified group of, derivative transactions. At December 31, 2019 and 2018, the Company’s derivative instruments fall under an ISDA master netting agreement. The following table presents the fair values of derivative assets and liabilities in the balance sheets (in thousands) : December 31, 2019 Derivative Assets Derivative Liabilities Notional Amount Fair Value Notional Amount Fair Value Interest rate swaps $ 525,000 $ 258 $ — $ — Total derivatives, gross 258 — Less: Legally enforceable master netting agreements — — Total derivatives, net $ 258 $ — December 31, 2018 Derivative Assets Derivative Liabilities Notional Amount Fair Value Notional Amount Fair Value Interest rate swaps $ 525,000 $ 6,659 $ — $ — Total derivatives, gross 6,659 — Less: Legally enforceable master netting agreements — — Total derivatives, net $ 6,659 $ — The following table presents the effect of derivative instruments on the consolidated statements of operations (in thousands) : Year ended December 31, Year ended December 31, 2019 2018 Net investment hedges Foreign exchange forward contracts Gain on derivatives recognized in Accumulated other comprehensive loss $ — $ 970 Derivatives not designated as hedges Interest rate swaps Gain (loss) on derivatives not designated as hedges included in interest expense (6,401 ) 1,408 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases | Leases The Company leases land and buildings, office spaces, vehicles, machinery and equipment under various lease agreements. A large portion of the Company’s leases were the result of the sale and leaseback of land and buildings related to certain production facilities. These leases have an initial term of 25 years , followed by one optional renewal term of approximately ten years that may be exercised at the Company’s discretion. See note 15, Sale-Leaseback transaction. These leases, with the exception of certain land leases, were classified as finance leases. The Company’s operating leases are mainly comprised of land and buildings, office spaces, vehicles, machinery and equipment leases, and have remaining terms of one to 25 years , some of which include options to extend the leases for up to ten years . The components of lease expense were as follows (in thousands): Lease cost Classification Year ended December 31, 2019 Operating lease cost Lease expense $ 16,464 Finance lease cost Amortization of leased assets Depreciation, amortization, and accretion 2,276 Interest on lease liabilities Interest expense 18,528 Lease term and discount rate December 31, 2019 Weighted-average remaining lease term (years) Operating leases 15.5 years Finance leases 33.1 years Weighted-average discount rate (%) Operating leases 12.6 % Finance leases 12.3 % Supplemental cash flow information related to leases was as follows (in thousands): Year ended December 31, 2019 Cash paid for amounts included in lease liabilities Operating cash flows related to operating leases $ 14,945 Operating cash flows related to finance leases 16,090 Financing cash flows related to finance leases 583 Leased assets obtained in exchange for new finance lease liabilities 180 Leased assets obtained in exchange for new operating lease liabilities 4,925 Supplemental balance sheet information related to leases was as follows (in thousands): Classification December 31, 2019 Operating leases Right of use assets Operating lease right-of-use assets $ 60,253 Operating lease liabilities - current portion Accrued liabilities (8,784 ) Operating lease liabilities - long term portion Long-term operating lease liabilities (54,411 ) Finance leases Finance lease assets Property, plant and equipment, net 49,999 Finance lease liabilities - current portion Accrued liabilities (16,542 ) Finance lease liabilities - long term portion Long-term finance lease liabilities (137,365 ) As of December 31, 2019, maturities of lease liabilities were as follows (in thousands): Operating leases Finance leases Total 2020 $ 13,766 $ 16,894 $ 30,660 2021 11,371 17,049 28,420 2022 10,500 17,300 27,800 2023 10,247 17,516 27,763 2024 9,561 17,841 27,402 Thereafter 109,610 652,367 761,977 Total lease payments 165,055 738,967 904,022 Less: imputed interest (101,860 ) (585,060 ) (686,920 ) Present value of lease liabilities $ 63,195 $ 153,907 $ 217,102 |
Leases | Leases The Company leases land and buildings, office spaces, vehicles, machinery and equipment under various lease agreements. A large portion of the Company’s leases were the result of the sale and leaseback of land and buildings related to certain production facilities. These leases have an initial term of 25 years , followed by one optional renewal term of approximately ten years that may be exercised at the Company’s discretion. See note 15, Sale-Leaseback transaction. These leases, with the exception of certain land leases, were classified as finance leases. The Company’s operating leases are mainly comprised of land and buildings, office spaces, vehicles, machinery and equipment leases, and have remaining terms of one to 25 years , some of which include options to extend the leases for up to ten years . The components of lease expense were as follows (in thousands): Lease cost Classification Year ended December 31, 2019 Operating lease cost Lease expense $ 16,464 Finance lease cost Amortization of leased assets Depreciation, amortization, and accretion 2,276 Interest on lease liabilities Interest expense 18,528 Lease term and discount rate December 31, 2019 Weighted-average remaining lease term (years) Operating leases 15.5 years Finance leases 33.1 years Weighted-average discount rate (%) Operating leases 12.6 % Finance leases 12.3 % Supplemental cash flow information related to leases was as follows (in thousands): Year ended December 31, 2019 Cash paid for amounts included in lease liabilities Operating cash flows related to operating leases $ 14,945 Operating cash flows related to finance leases 16,090 Financing cash flows related to finance leases 583 Leased assets obtained in exchange for new finance lease liabilities 180 Leased assets obtained in exchange for new operating lease liabilities 4,925 Supplemental balance sheet information related to leases was as follows (in thousands): Classification December 31, 2019 Operating leases Right of use assets Operating lease right-of-use assets $ 60,253 Operating lease liabilities - current portion Accrued liabilities (8,784 ) Operating lease liabilities - long term portion Long-term operating lease liabilities (54,411 ) Finance leases Finance lease assets Property, plant and equipment, net 49,999 Finance lease liabilities - current portion Accrued liabilities (16,542 ) Finance lease liabilities - long term portion Long-term finance lease liabilities (137,365 ) As of December 31, 2019, maturities of lease liabilities were as follows (in thousands): Operating leases Finance leases Total 2020 $ 13,766 $ 16,894 $ 30,660 2021 11,371 17,049 28,420 2022 10,500 17,300 27,800 2023 10,247 17,516 27,763 2024 9,561 17,841 27,402 Thereafter 109,610 652,367 761,977 Total lease payments 165,055 738,967 904,022 Less: imputed interest (101,860 ) (585,060 ) (686,920 ) Present value of lease liabilities $ 63,195 $ 153,907 $ 217,102 |
Sale-leaseback transaction
Sale-leaseback transaction | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Sale-leaseback transaction | Sale-Leaseback transaction During April 2016, the Company sold 49 US and Canadian properties to Pipe Portfolio Owner (Multi) LP, (the "U.S. Buyer") and FORT-BEN Holdings (ONQC) Ltd., (the "Canadian Buyer") and entered into master land and building lease agreements under which the Company agreed to lease back each of the properties for an initial term of twenty years , followed by one optional renewal term of 9 years, 11 months . A deferred gain of $81.5 million related to the sale-leaseback transaction was being amortized over the life of the master leases. In addition, the Company concluded that the leases for land and buildings were operating leases, and the leases for the machinery equipment were capital leases. In October 2016, t he Company entered into agreements to replace the original guarantor with Forterra, as the new guarantor, effective immediately following completion of the internal reorganization effected prior to the IPO. Due to the change in guarantor, the sale leaseback qualified for sales recognition and was classified as an operating lease beginning October 2016. On June 5, 2018, the Company entered into exchange agreements and Amended and Restated Master Leases with each of the U.S Buyer and the Canadian Buyer (collectively, the “Exchange Transaction”). Under the exchange agreement between the Company and the U.S. Buyer, the Company exchanged ownership of a ductile iron pipe facility located in Bessemer, Alabama used in its Water Pipe & Products segment (the “Bessemer Facility”) for 21 facilities used in its Drainage Pipe & Products segment and the U.S. concrete and steel pressure pipe facilities previously part of the Water Pipe & Products segment, including a portion of one property used in both segments, all of which were previously included in the sale-leaseback transaction. Under the exchange agreement between the Company and the Canadian Buyer, the Company exchanged ownership of a smaller diameter ductile iron pipe facility located in Bessemer, Alabama used in its Water Pipe & Products segment (the “Mini Mill Facility”) for ownership of three Canadian concrete pressure pipe facilities that were previously included in the sale-leaseback transaction. No cash changed hands in the Exchange Transaction. Under the Amended and Restated Master Leases, the Company leases 26 properties from the U.S. Buyer and 2 properties from an affiliate of the Canadian Buyer, each for an initial term of 25 years , through June 30, 2043, followed by one optional renewal term of nine years, eleven months that may be exercised at the Company’s option. The initial base rent under the U.S. Amended and Restated Master Lease is $17.1 million per annum, payable monthly, and is subject to a 2% annual increase during the initial term. If the Company elects to extend the term of the U.S. Amended and Restated Master Lease, the base rent for the first year of the extension will be the greater of 95% of the fair market rental value of the properties and an amount equal to 102% of the prior year’s base rent, subject to an annual increase based on changes in the Consumer Price Index, but capped at 4% . The U.S. Amended and Restated Master Lease restricts the Company’s use of the U.S. properties to heavy manufacturing, industrial, and other related uses. The Company cannot sublease or assign the properties covered by the U.S. Amended and Restated Master Lease without the prior written consent of the U.S. Landlord and subject to certain other restrictions. The terms of the Canadian Amended and Restated Master Lease are similar to those of the U.S. Amended and Restated Master Lease described above, except that the initial base rent is $1.2 million (CAD) per annum. The Company’s aggregate liability in connection with its representations, warranties, covenants and indemnification and other obligations is $5.0 million under the U.S. Exchange Agreement and $6.4 million (CAD) under the Canadian Exchange Agreement, subject to limited exceptions. The Company accounted for the Exchange Transaction in accordance with the sale-leaseback accounting guidance under ASC 840, Leases . The fair value of the 24 facilities exchanged back was $86.1 million , and was accounted for as the proceeds from the sale of the Bessemer and Mini Mill Facilities after adjusting for the transaction cost of $2.7 million . Consequently, a deferred gain of $67.3 million was recorded at June 5, 2018. The carrying value of the deferred gains of $35.0 million , the deferred rent of $3.1 million , and the deferred transaction costs of $2.4 million from the original sale-leaseback transaction were reclassified to reduce the carrying value of the 24 facilities exchanged back. The Amended and Restated Master Leases extended the lease terms for all facilities, which caused the majority of the leases to be classified as capital leases instead of operating leases. Consequently, the Company recognized capital lease obligations as well as the gross value of the capital lease assets of $149.0 million , calculated by discounting minimum future lease payments using its incremental borrowing rate of 12.33% . The carrying value of the deferred gains of $100.0 million , the deferred rent of $3.8 million , and the deferred transaction cost of $5.7 million were reclassified to reduce the carrying value of capital lease assets. During the year ended December 31, 2018, the Company recognized $10.0 million of rent expense in cost of goods sold for operating leases, related to payments made under the sales leaseback transaction. During the year ended December 31, 2017, the Company recognized $20.9 million of rent expense in cost of goods sold for operating leases, related to payments made under the sales leaseback transaction. See Note 14 for rent expense relating to the year ended December 31, 2019. |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Commitments and contingencies The Company is involved in legal proceedings and litigation in the ordinary course of business. In the opinion of management, the outcome of such matters will not have a material adverse effect on the Company’s consolidated financial position, results of operations, or liquidity. Other than routine litigation incidental to the Company's business and those matters described below, there are no material legal proceedings to which the Company is a party or to which any of the Company’s properties are subject. Earnout Dispute The Acquisition purchase agreement included an earnout, which provided for the payment of contingent consideration of up to $100.0 million if and to the extent the 2015 financial results of the businesses acquired by Lone Star in the Acquisition, including the Company and HeidelbergCement A.G.'s ("HC") former building products business in the United Kingdom, exceeded a specified Adjusted EBITDA target for fiscal year 2015, as calculated pursuant to the terms of the purchase agreement. If such Adjusted EBITDA calculation exceeded the specified target, LSF9 and, as a result of the internal reorganization transaction effected prior to the Company's IPO, the Company would be required to pay the U.S. affiliate of HC an amount equal to a multiple of such excess Adjusted EBITDA, with any payment capped at $100.0 million . In April 2016, the Company provided an earnout statement to affiliates of HC demonstrating that no payment was required. On June 13, 2016, HC provided notification that it disputed, among other things, the Company’s calculation of Adjusted EBITDA under the purchase agreement and asserting that a payment should be made in the amount of $100.0 million . The Company does not believe HC’s position has merit and is vigorously opposing HC's assertions. On October 5, 2016, affiliates of HC filed a lawsuit in the Delaware Court of Chancery seeking specific performance and claiming access to the Company's books, records, and personnel; seeking a declaratory judgment concerning the scope of the neutral accounting expert’s authority; and in the alternative, cla im ing a breach of contract and seeking the $100.0 million and other damages or (the "Delaware Action"). On December 8, 2017, the court granted the defendants' Motion to Dismiss the First Amended Complaint in the Delaware Action, finding that the earnout dispute should be heard before a neutral accounting arbitrator as set forth in the purchase agreement and that any claims that required to be brought as indemnification claims under the purchase agreement were time-barred by the contractual limitations period. Following the dismissal of the Delaware Action, the Company and HC jointly engaged a neutral accounting expert to act as an arbitrator in the dispute as required by the purchase agreement. After briefing certain preliminary matters for the arbitrator, the production of additional documents, the parties began briefing the issues on the merits for the neutral accounting arbitrator, which briefing is scheduled to be completed in the first quarter of 2020. A final hearing on the dispute is scheduled to be held on June 23 and 24, 2020, with a written decision from the neutral accounting arbitrator expected within 60 days thereafter. As of December 31, 2019 , no liability for this contingency has been accrued as payment of any earnout is not considered probable. However, the outcome of this matter is uncertain, and no assurance can be given to the ultimate outcome of the resulting proceedings. If the Company is unsuccessful in resolving the dispute, it could recognize a material charge to its earnings. Securities Action and Derivative Actions Beginning on August 14, 2017, four plaintiffs filed putative class action complaints in the United States District Court for the Eastern District of New York against various defendants. On July 27, 2018, an order was entered consolidating the lawsuits into a single action (the "Securities Action"), and transferring the venue of the case from the Eastern District of New York to the Northern District of Texas. Pursuant to an agreed scheduling order, plaintiffs in the Securities Action filed their Consolidated Amended Complaint on November 30, 2018. The Securities Action is brought by two plaintiffs individually and on behalf of all persons that purchased or otherwise acquired the Company's common stock issued pursuant to and/or traceable to the IPO and is brought against the Company, certain of its current and former officers and directors, Lone Star and certain of its affiliates, and certain banks that acted as underwriters of the IPO (collectively, the “Securities Defendants”). The Securities Action generally alleges that the Company's registration statement on Form S-1 filed in connection with the IPO (the "Registration Statement") contained false or misleading statements and/or omissions of material facts. Specifically, plaintiffs allege the Registration Statement (1) made false and/or misleading statements about the Company's ability to generate organic growth through cross-selling initiatives amongst the Company's various businesses while failing to disclose that the Company had not adequately integrated acquisitions, had not begun rolling out its cross-selling initiative, and that its businesses were submitting competing bids against one another, and (2) made false or misleading statements regarding the existence of certain accounting practices and alleged material weaknesses in the Company's internal controls over financial reporting, including the existence of and accounting for bill and hold transactions, the lack of sufficient accounting personnel, the lack of effective internal controls to ensure costs were properly and accurately accrued, resulting in misstated costs and profits in the Company's 2016 financial statements, and the making of inventory accounting entries without adequate substantiation or documentation. The Securities Action asserts claims under Section 11 and Section 15 of the Securities Act of 1933, as amended, (the "Securities Act") and seeks (1) class certification under the Federal Rules of Civil Procedure, (2) damages suffered by plaintiffs and other class members, (3) prejudgment and post-judgment interest, (4) reasonable counsel fees and expert fees, and other costs and expenses reasonably incurred, and (5) other relief the court deems appropriate. On February 15, 2019, the Securities Defendants filed a Motion to Dismiss all claims in the case based on plaintiffs' failure to state a claim. Briefing on the motion to dismiss was completed on May 1, 2019, and the court has not yet ruled on the motion. A mediation of the Securities Action occurred in August 2019. On November 4, 2019, the parties to the Securities Action entered into a settlement agreement that is intended to fully and finally resolve all claims in the Securities Action. On January 4, 2020, the court issued an order granting preliminary approval for the settlement and providing for notice. Approval of the settlement in the Securities Action is set for final hearing on April 29, 2020, but approval cannot be guaranteed. The terms of the settlement are expected to be paid by the Company's insurance. On July 31, 2018, a putative shareholder derivative complaint captioned Maloney v. Bradley, et al., was filed in the United States District Court for the Northern District of Texas, alleging that certain of the Company’s current and former directors and officers had breached their fiduciary duties, committed constructive fraud, wasted corporate assets, and that certain of them had been unjustly enriched (the "Maloney Texas Action"). On July 30, 2019, the court in the Maloney Texas Action granted the defendants' motion to dismiss on the grounds that the case should have been brought in Delaware according to the Company's Amended and Restated Certificate of Incorporation. On September 23, 2019, the same plaintiff filed a putative shareholder derivative complaint captioned Maloney v. Bradley, et al. in the United States District Court for the District of Delaware, naming as defendants certain of the Company’s current and former directors and officers (the "Maloney Delaware Action"). The complaint alleges the defendants violated Sections 14A and 20(A) of the Securities and Exchange Act of 1934, as amended, breached their fiduciary duties, and wasted corporate assets, and also asserts unjust enrichment claims against certain defendants. The complaint seeks, on behalf of the Company, unspecified damages, an order directing the return of certain payments to the defendants and imposing a constructive trust thereon, certain injunctive relief, reasonable costs and attorneys' fees, and punitive damages. On January 15, 2019, a putative shareholder derivative complaint captioned Lee v. Bradley, et al., was filed in the United States District Court for the District of Delaware, naming as defendants certain of the Company’s current and former directors and officers (the "Lee Action"). The complaint alleges the defendants violated Section 14A of the Securities and Exchange Act of1934, as amended, and related rules by failing to make certain disclosures in the Company's proxy solicitation in advance of the 2017 Annual Meeting of Stockholders, and that defendants breached their fiduciary duties, wasted corporate assets, and committed constructive fraud. The complaint also asserts unjust enrichment claims against certain defendants. The complaint seeks, on behalf of the Company, unspecified damages, an order directing the return of certain payments to the defendants, certain injunctive relief, and reasonable costs and attorneys' fees. On April 18, 2019, the court entered an agreed stipulation staying the Lee Action until the court in the Securities Action rules on the motion to dismiss in that case. On December 11, 2019, the court in the Lee Action entered a Stipulation and Order consolidating the Lee Action and the Maloney Delaware Action into a single case, providing that the parties would have 60 days to attempt to resolve the action, and providing a schedule for filing of an amended complaint and motions to dismiss in the event attempts at resolution were not successful. The Company and other defendants are vigorously defending the Lee Action. Given the stage of the proceedings, the Company cannot reasonably estimate at this time the possible loss or range of loss, if any, that may arise from the Lee Action. Long-term incentive plan Following the Acquisition, Lone Star implemented a cash-based long term incentive plan (the “LTIP”), which entitles the participants in the LTIP a potential cash payout upon a monetization event as defined by the LTIP. Potential monetization events include the sale, transfer or otherwise disposition of all or a portion of the Company or successor entities of LSF9, an initial public offering where Lone Star sells/reduces its ownership in the Company or successor entities of LSF9, or through certain cash distribution as defined in the LTIP. Before the payout of any cash the LTIP requires Lone Star realize in cash the full return of their investment plus a specified internal rate of return, which is calculated by comparing the return to Lone Star over the timeline of its investment in the Company and certain successor entities of LSF9. As of December 31, 2019, no such monetization events that meet the required return for an LTIP payment have occurred, and therefore no amounts were accrued in the accompanying consolidated balance sheet. While no payments have occurred thus far, payments under the LTIP could be significant depending upon future monetization events. The timing and amount of such payments are unknown and is dependent upon future monetization events and market conditions that are outside of the control of the Company or the participants of the plan. Subsequent to the IPO, Forterra became directly liable for any payment obligations triggered under the LTIP, but LSF9 or one of its affiliates will remain obligated to make payments to the Company in amounts equal to any payment obligations triggered under the LTIP as and when such payment obligations are triggered. Leases The Company leases certain property and equipment for various periods under non-cancelable operating and finance leases. See Note 14 for future minimum lease payments under such agreements. Tax receivable agreement The Company has a tax receivable agreement (the "TRA") with Lone Star that provides for, among other things, the payment by the Company to Lone Star of 85% of the amount of certain covered tax benefits, which may reduce the actual liability for certain taxes that the Company might otherwise be required to pay. The tax benefits subject to the TRA include: (i) all depreciation and amortization deductions, and any offset to taxable income and gain or increase to taxable loss, resulting from the tax basis that the Company had in its assets as of the time of the consummation of the IPO, (ii) the utilization of the Company's and its subsidiaries’ net operating losses and tax credits, if any, attributable to periods prior to the IPO, (iii) deductions in respect of payments made, funded or reimbursed by an initial party to the tax receivable agreement (other than the Company or one of its subsidiaries) or an affiliate thereof to participants under the LTIP, (iv) deductions in respect of transaction expenses attributable to the USP Acquisition and (v) certain other tax benefits attributable to payments made under the tax receivable agreement. For purposes of the TRA, the aggregate reduction in income tax payable by the Company will be computed by comparing the Company's actual income tax liability with its hypothetical liability had it not been able to utilize the related tax benefits. The agreement will remain in effect for the period of time in which all such related tax benefits remain. The Company accounts for potential payments under the tax receivable agreement as a contingent liability, with amounts accrued when considered probable and reasonably estimable. The passage of the TCJA described in Note 20 significantly reduced the Company's anticipated liability under the TRA. The reduction in the TRA liability resulted in $46.2 million of non-operating income recognized in the Company's consolidated statement of operations for the year ended December 31, 2017 d ue primarily to the decrease in the federal corporate tax rate. The liabilities recorded by the Company for the tax receivable agreement at December 31, 2019 and December 31, 2018 were $77.4 million and $88.8 million , respectively. The timing and amount of future tax benefits associated with the TRA are subject to change, and additional payments may be required which could be materially different from the current accrued liability. The Company anticipates that it will have sufficient taxable income in future periods to realize the full value of the obligation recorded. Future tax receivable agreement payments related to the tax basis of assets at the time of the IPO will be recorded as a reduction to the liability and will be recorded as a financing activity in the statement of cash flows. For the years ended December 31, 2019 and December 31, 2018, the Company paid $11.4 million and $30.4 million , respectively on the TRA to Lone Star. |
Earnings per share
Earnings per share | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings per share | Earnings per share Basic earnings per share ( “ EPS ” ) is calculated by dividing net earnings by the weighted average number of common shares outstanding during the period. Potentially dilutive securities include employee stock options and shares of restricted stock. Diluted EPS reflects the assumed exercise or conversion of all dilutive securities. The restricted shares are considered participating securities for the purposes of the Company's EPS calculation. The calculations of the basic and diluted EPS for the years ended December 31, 2019 , 2018 and 2017 are presented below (in thousands, except per share data): Year ended December 31, 2019 2018 2017 Net loss $ (7,331 ) $ (24,365 ) $ (2,060 ) Common stock: Weighted average basic shares outstanding 64,232 63,904 63,801 Effect of dilutive securities - stock options — — — Weighted average diluted shares outstanding 64,232 63,904 63,801 Basic and Diluted earnings (loss) per share: Net income (loss) $ (0.11 ) $ (0.38 ) $ (0.03 ) Potential dilutive common shares were anti-dilutive as a result of the Company's net loss for the years ended December 31, 2019, 2018 and 2017. As a result, basic weighted average shares were used in the calculations of basic earnings per share and diluted earnings per share for those periods. The number of stock options and restricted shares that were excluded from the computation of diluted earnings per share because their inclusion would result in an anti-dilutive effect on per share amounts for the years ended December 31, 2019, 2018 and 2017 was 2,192,048 , 2,749,348 and 209,607 , respectively. |
Employee benefit plans
Employee benefit plans | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |
Employee benefit plans | Employee benefit plans Defined Contribution Plans The Company’s employees are able to participate in a 401K defined contribution plan. The Company contributes funds into this plan subject to certain limits. For the years ended December 31, 2019 , December 31, 2018 , and December 31, 2017, the Company recorded an expense of $7.0 million , $6.6 million and $11.3 million , respectively . |
Stock-based plans
Stock-based plans | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock-based plans | Stock-based plans Stock Incentive Plans The Company's previous equity compensation plan under which it granted stock awards was the Forterra, Inc. 2016 Stock Incentive Plan, (the "2016 Incentive Plan"). The aggregate number of shares of common stock that was initially available for issuance under the 2016 Incentive Plan was 5,000,000 shares. The Company's board of directors has granted employees and independent directors options to purchase shares of common stock, shares of restricted common stock and restricted stock units. The options, restricted stock and restricted stock units awarded to employees are subject to either three -year or four -year vesting periods and the options, restricted stock and restricted stock units awarded to independent directors are subject to a one -year vesting period. The awards of stock options granted under the 2016 Incentive Plan have a term of ten years. In May 2018, the Company's shareholders approved the Forterra, Inc. 2018 Stock Incentive Plan, (the "2018 Incentive Plan"). The 2018 Incentive Plan serves as the umbrella plan for the Company’s stock-based and cash-based incentive compensation programs for its directors, officers and other eligible employees. The aggregate number of shares of common stock issuable under the 2018 Incentive Plan is 5,000,000 shares plus any shares subject to outstanding awards under the 2016 Incentive Plan as of the date of the approval of the 2018 Incentive Plan that on or after such date cease for any reason to be subject to such awards (other than by reason of exercise or settlement of the awards to the extent they are exercised for or settled in nonforfeitable shares) . In accordance with ASC 718, Compensation-Stock Compensation , the Company recognizes stock-based compensation expense over the requisite service period for the entire award, which is generally the maximum vesting period of the award or over a shorter period when employee retirement eligibility is a factor , in an amount equal to the fair value of share-based payments, which include stock options granted and restricted stock awards to employees and non-employees members of Forterra's Board of Directors. The Company records stock-based compensation expense in cost of goods sold and selling, general, and administrative expenses. Stock-based compensation expense was approximately $7.9 million , $6.2 million and $3.7 million for the years ended December 31, 2019 , 2018 and 2017, respectively. Stock Option Grants The value of the options is determined by using a Black-Scholes pricing model that includes the following variables: 1) exercise price of the instrument, 2) fair market value of the underlying stock on date of grant, 3) expected life, 4) estimated volatility and 5) the risk-free interest rate. The Company utilized the following weighted-average assumptions in estimating the fair value of the option grants in the years ended December 31, 2019 , December 31, 2018 and December 31, 2017: 2019 2018 2017 Expected dividends — % — % — % Expected volatility 32.08 % 32.90 % 39.60 % Risk-free interest rate 2.43 % 1.71 % 0.86 % Expected lives in years 6 6 6 Weighted-average fair value of options: Granted at fair value $ 1.54 $ 2.76 $ 4.16 Weighted-average exercise price of options: Granted at fair value $ 4.29 $ 7.92 $ 10.76 The Black-Scholes model requires the use of subjective assumptions including expectations of future dividends and stock price volatility. Expected volatility was calculated using a weighted average of Forterra and a set of Forterra's peer companies based on an analysis of historical and implied volatility measures. The average expected life is based on the contractual term of the option and expected employee exercise and post-vesting employment termination behavior. Such assumptions are only used for making the required fair value estimate and should not be considered as indicators of future dividend policy or stock price appreciation. Because changes in the subjective assumptions can materially affect the fair value estimate, and because employee stock options have characteristics significantly different from those of traded options, the use of the Black-Scholes option pricing model may not provide a reliable estimate of the fair value of employee stock options. A summary of the status of the Company's stock options is presented below: Shares Weighted Average Exercise Price (in thousands) Outstanding, December 31, 2017 1,254,429 $12.31 Granted 2,189,216 $7.92 Exercised — n/a Forfeited (342,226 ) $12.53 Outstanding, December 31, 2018 3,101,419 $9.19 Granted 2,771,930 $4.29 Exercised (224,266 ) $7.60 Forfeited (1,975,987 ) $7.50 Outstanding, December 31, 2019 3,673,096 $6.50 Options vested or expected to vest at year end 3,673,096 $6.50 Options exercisable at year end 927,863 $8.81 As of December 31, 2019 , the Company has approximately $ 3.5 million of unrecognized stock option compensation cost related to unvested stock options, which is expected to be recognized over a weighted average period of approximately 1.7 years. Restricted Stock and Restricted Stock Unit Awards Restricted stock are share awards that entitle the holder to receive shares of the Company's common stock which become freely transferable upon vesting. Restricted stock has the same dividend and voting rights as common stock and is considered to be issued and outstanding upon grant. Restricted stock units are share awards denominated in units of the Company's common stock and are subject to a service condition. The restricted stock units do not have the voting rights of common stock, and the shares underlying restricted stock units are not considered issued and outstanding upon grant. The restricted stock and restricted stock unit awards generally vest one to four years from the date of grant and are generally subject to forfeiture if employment terminates prior to the vesting date. The estimated compensation cost of the restricted stock and restricted stock unit awards, which is equal to the fair value of the awards on the date of grant, is recognized on a straight-line basis over the vesting period. During 2019, the Company granted 2.6 million restricted stock units consisting of 1.2 million time-vested restricted stock units and 1.4 million performance-based restricted stock units. The performance-based restricted stock units vest in tranches based on the 20 -day volume weighted average price of FRTA common stock based on a grant date market condition. If the performance condition is achieved, one-fourth of the tranche will vest immediately and the remainder of the tranche will be time-vested over one year from the date the performance condition was met. The Company accounts for the time-vested and performance-based restricted stock units as equity awards. The following table summarizes the activity for restricted stock and restricted stock units: Shares Weighted Average Grant Date Fair Value (in thousands) Unvested balance at December 31, 2017 441,350 $13.60 Grants 542,979 $7.98 Vested shares (155,260 ) $13.11 Forfeitures (84,706 ) $12.98 Unvested balance at December 31, 2018 744,363 $9.68 Grants 2,562,250 $4.58 Vested shares (508,799 ) $7.74 Forfeitures (640,172 ) $6.21 Unvested balance at December 31, 2019 2,157,642 $5.11 At December 31, 2019 , there was $ 7.4 million of total unrecognized compensation cost related to unvested restricted stock and restricted stock units and that cost is expected to be recognized over a weighted average period of 1.8 years. |
Income taxes
Income taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Income taxes U.S. Tax Reform On December 22, 2017, the U.S. government enacted comprehensive tax reform legislation commonly known as the Tax Cuts and Jobs Act of 2017 (“TCJA”). Effective January 2018, the TCJA, among other things, reduced the marginal U.S. corporate income tax rate from 35% to 21%, limited the deductibility of interest expense, limited the deduction for net operating losses and eliminated net operating loss carrybacks, and modified or eliminated many business deductions and credits. There were also provisions that partially offset the benefit of the rate reduction, such as the repeal of the deduction for domestic production activities. The TCJA also included international provisions, which generally established a territorial-style system for taxing foreign source income of domestic multinational corporations known as global intangible low-taxed income ("GILTI") for the years beginning after December 31, 2017 and imposed a mandatory one-tim e transition tax on undistributed international earnings for the year ended December 31, 2017. Financial statement impacts include adjustments for, among other things, the remeasurement of deferred tax assets and liabilities. U.S. GAAP accounting for income taxes required that Forterra record the impact of any tax law change on its deferred income taxes in the quarter that the tax law change was enacted, which was the fourth quarter ended December 31, 2017. Due to the complexities involved in accounting for the enactment of TCJA, SEC Staff Accounting Bulletin 118 allowed the Company to provide a provisional estimate of the impacts of the TCJA in its earnings during a one-year measurement pe riod. During the year ended December 31, 2017, the Company recorded a provisional income tax benefit for the reduction in net deferred income tax liabilities of approximately $28.7 million , due to the remeasurement of net U.S. deferred tax liabilities at the lower 21% U.S. federal corporate income tax rate, offset by the recognition of a one-time transition tax on foreign earnings of $1.7 million . In addition, the Company recorded the pretax income effect of the change related to the Company's estimated tax receivable agreement obligation primarily due to the lower U.S. federal corporate income tax rate in the year ended December 31, 2017. See Note 16 for further discussion on the tax receivable agreement. During the year ended December 31, 2018, t he Company did not record any significant adjustments to the originally recorded amount. Forterra considered the accounting for the TCJA complete as of December 31, 2018. Deferred tax assets and liabilities are recognized principally for the expected tax consequences of temporary differences between the tax basis of assets and liabilities and their reported amounts, using currently enacted tax rates. The Company’s income (loss) from continuing operations before income taxes was as follows (in thousands) : Year ended December 31, Year ended December 31, Year ended December 31, 2019 2018 2017 U.S. companies $ (21,557 ) $ (36,317 ) $ (54,690 ) Foreign companies 10,947 15,037 11,958 Loss from continuing operations before income taxes $ (10,610 ) $ (21,280 ) $ (42,732 ) The income tax benefit (expense) was as follows (in thousands) : Year ended December 31, Year ended December 31, Year ended December 31, 2019 2018 2017 Current income tax U.S. companies $ (9,510 ) $ (13,225 ) $ 21,539 State (4,260 ) (5,779 ) (1,479 ) Foreign companies (3,018 ) (4,849 ) (4,884 ) Total current tax (expense) benefit (16,788 ) (23,853 ) 15,176 Deferred income tax U.S. companies 16,180 17,273 26,866 State 4,232 3,306 (1,658 ) Foreign companies (345 ) 189 288 Total deferred tax benefit 20,067 20,768 25,496 Income tax (expense) benefit $ 3,279 $ (3,085 ) $ 40,672 The rate reconciliation for continuing operations presented below is based on the U.S. federal statutory tax rate of 21% for the years ended December 31, 2019 and December 31, 2018 and 35% for the years ended December 31, 2017 because the predominant business activity is in the U.S. (in thousands) : Year ended December 31, Year ended December 31, Year ended December 31, 2019 2018 2017 Loss from continuing operations $ (10,610 ) $ (21,280 ) $ (42,732 ) Income tax benefit at statutory rate of 21% and 35% $ 2,228 $ 4,469 $ 14,956 State income taxes, net of federal benefit 113 1,494 1,470 Foreign rate differential (361 ) (568 ) 1,586 Non-deductible executive compensation (1,011 ) (129 ) — Tax effect of equity compensation (496 ) (310 ) (13 ) M&E and other non-deductible expenses (763 ) (452 ) (1,220 ) Change in valuation allowance 1,927 (6,601 ) (4,141 ) Divestiture of assets — (1,559 ) — Goodwill impairment — — (1,147 ) Effect of TCJA — — 26,932 Net US tax cost on foreign income (221 ) (390 ) — Tax credits 552 390 497 Other prior year adjustments 1,311 571 1,752 Total income tax benefit (expense) $ 3,279 $ (3,085 ) $ 40,672 The income tax benefit for the year ended December 31, 2019 is primarily attributable to the unfavorable impact of the non-deductible expenses, partially offset with the favorable effect of the partial reversal of the federal and state valuation allowances and the effect of the return to provision adjustments. The income tax expense for the year ended December 31, 2018 is primarily attributable to the unfavorable impact of the federal and state valuation allowance increase, inclusion of GILTI, and impact of the disposition of nondeductible goodwill in connection with the Foley exchange described in Note 3, partially offset with the favorable impact of the tax credits and state tax benefit. The income tax benefit for the year ended December 31, 2017 is primarily attributable to provisional amounts recognized related to the enactment of the TCJA and losses from operations. The Company evaluates the recoverability of its deferred tax assets quarterly to determine if valuation allowances are required or should be adjusted. The Company assesses whether valuation allowances should be established against deferred tax assets based on consideration of all available evidence, both positive and negative, using a “more likely than not” criteria. The analysis used in determining the valuation allowance involves considerable judgment and assumptions. The Company's history of pretax losses limits its ability to rely on projections of future pretax income, and the TCJA limits the ability to carryback losses to recover taxes paid in prior periods; therefore, realization of deferred tax assets is based primarily on reversal of taxable temporary differences. The amendment and restatement of the sale-leaseback transaction that closed during the second quarter ended June 30, 2018 affected the timing and recognition of temporary differences, and the Company concluded that a portion of its deferred tax assets no longer meets the “more likely than not” criteria for realization based on reversal of taxable temporary differences. For the year ended December 31, 2019, after consideration of all evidence, including the analysis of the reversal pattern of the taxable and deductible temporary differences in the future, the Company decreased the valuation allowance by $2.0 million during the year. Deferred income taxes are provided for the effects of temporary differences between the tax basis of an asset or liability and its reported amount in the accompanying consolidated balance sheets. These temporary differences result in taxable or deductible amounts in future years. The net deferred tax asset (liability) balances were comprised of the following components as of December 31, 2019 and 2018 (in thousands) : December 31, 2019 December 31, 2018 Deferred tax assets: Inventory $ 6,891 $ 6,424 Reserves 4,112 2,263 Accrued liabilities 4,656 4,347 Net operating losses 2,964 3,243 Capitalized transaction costs 3,599 3,407 Finance leases 55,063 39,512 Deferred gain on sale-leaseback — 2,521 Interest expense limitation 6,566 2,780 Tax receivable agreement 1,655 1,645 Other assets 4,687 1,110 Total deferred tax assets 90,193 67,252 Valuation allowance (13,555 ) (15,427 ) Total deferred tax assets, net $ 76,638 $ 51,825 Deferred tax liabilities: Fixed assets $ (53,156 ) $ (50,686 ) Lease assets (25,378 ) (11,543 ) Deferred financing costs (6,812 ) (8,631 ) Intangible assets (20,221 ) (27,580 ) Total deferred tax liabilities $ (105,567 ) $ (98,440 ) Net deferred tax asset (liability) $ (28,929 ) $ (46,615 ) As of December 31, 2019 , the Company had tax loss carryforwards as follows (in thousands) : Amount Expiration Date Federal net operating losses $ — — State net operating losses $ 29,048 2021-2039 Foreign net operating losses $ 5,848 2036-2039 Uncertain tax positions The Company is subject to audit examinations at federal, state, local, and foreign levels by tax authorities in those jurisdictions who may challenge the treatment or reporting of any tax return item. The tax matters challenged by the tax authorities are typically complex; therefore, the ultimate outcomes of these challenges are subject to uncertain ty. The Company is under audit with respect to the U.S. federal income tax for the years ended December 31, 2016 and 2017. The Company is not aware of any adjustments with respect to any year under audit. State income tax returns are generally subject to examination for a period of three to five years after filing of the respective return. Each period the Company assesses uncertain tax positions for recognition, measurement and effective settlement. Based on the Company's assessment, it determined that no liabilities for uncertain tax positions should be recorded as of December 31, 2019 and 2018. |
Segment reporting
Segment reporting | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment reporting | Segment reporting Segment information is presented in accordance with ASC 280, Segment Reporting , which establishes standards for reporting information about operating segments. It also establishes standards for related disclosures about products and geographic areas. Operating segments are defined as components of an enterprise that engage in business activities that earn revenues, incur expenses and prepare separate financial information that is evaluated regularly by the Company’s chief operating decision maker (“CODM”) in order to allocate resources and assess performance. The Company's Chief Executive Officer is its CODM. The Corporate and Other segment includes expenses related to certain executive salaries, interest costs related to the Company's credit agreements, acquisition related costs, and other corporate costs that are not directly attributable to the Company's operating segments. The Company's segments follow the same accounting policies as the Company. Net sales from the major products sold to external customers include drainage pipe and precast products, and concrete and steel water transmission pipe. The Company’s three geographic areas consist of the United States, Canada and Mexico for which it reports net sales, fixed assets and total assets. For purposes of evaluating segment profit, the CODM reviews earnings before interest, taxes, depreciation and amortization (“EBITDA”) as a basis for making the decisions to allocate resources and assess performance. The following tables set forth the disaggregation of revenue earned from contracts with customers based on the Company's reportable segments as well as other financial information attributable to the Company's reportable segments for the periods presented (in thousands) : Year ended Year ended December 31, Year ended December 31, 2019 2018 2017 Net sales: Drainage Pipe & Products $ 894,722 $ 811,477 $ 834,810 Water Pipe & Products 635,030 668,235 745,555 Corporate and Other — — 48 Total $ 1,529,752 $ 1,479,712 $ 1,580,413 Depreciation and amortization: Drainage Pipe & Products $ 37,331 $ 41,495 $ 45,750 Water Pipe & Products 58,476 62,917 69,089 Corporate and Other 1,451 1,011 820 Total $ 97,258 $ 105,423 $ 115,659 Segment EBITDA and reconciliation to income (loss) before income taxes: Drainage Pipe & Products $ 171,413 $ 156,735 $ 129,618 Water Pipe & Products 84,424 64,547 47,587 Corporate and Other (74,219 ) (58,802 ) (44,870 ) Less: Interest expense (94,970 ) (78,337 ) (59,408 ) Depreciation and amortization (97,258 ) (105,423 ) (115,659 ) Loss before income taxes $ (10,610 ) $ (21,280 ) $ (42,732 ) Capital expenditures: Drainage Pipe & Products $ 23,096 $ 27,761 Water Pipe & Products 14,246 18,529 Corporate and Other 2,531 2,391 Total $ 39,873 $ 48,681 Total assets: Drainage Pipe & Products $ 819,373 $ 800,454 Water Pipe & Products 862,542 922,162 Corporate and Other 58,143 70,636 Total $ 1,740,058 $ 1,793,252 In addition, the Company also has an investment in an equity method investee included in the Drainage Pipe & Products segment for which earnings from equity method investee were $10.5 million , $10.2 million and $12.4 million for the years ended December 31, 2019, 2018 and 2017, respectively, and with the following balances (in thousands) : December 31, 2019 2018 Investment in equity method investee $ 50,034 $ 50,607 Disaggregated revenue by geographic location is provided in the tables below. The Company has operations in the United States, Canada and Mexico. The economic characteristics of the Company's customers does not significantly vary across geographic locations or product lines. The Company has both revenues and long-lived assets in each country and those assets and revenues are recorded within geographic location as follows (in thousands) : Property, plant, and equipment, net: December 31, 2019 2018 United States $ 422,486 $ 441,773 Canada 43,754 40,331 Mexico 9,335 10,063 $ 475,575 $ 492,167 Net Sales: Year ended December 31, Year ended December 31, Year ended December 31, 2019 2018 2017 United States $ 1,448,492 $ 1,389,115 $ 1,485,092 Canada 73,270 80,868 82,529 Mexico 7,990 9,729 12,792 $ 1,529,752 $ 1,479,712 $ 1,580,413 |
Related party transactions
Related party transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related party transactions | Related party transactions CP&P The Company sold certain goods and services to its joint venture, CP&P, including spare parts for repairs, and property rentals. For the year ended December 31, 2019 , Forterra sold $0.4 million of product to CP&P and purchased goods and services from CP&P for an amount of $0.5 million . For the year ended December 31, 2018, the Company sold $0.1 million of product to CP&P and received $0.2 million in exchange for purchased goods and services from CP&P. For the year ended December 31, 2017, Forterra sold $0.1 million of product to CP&P and purchased $0.1 million of goods and services from CP&P. Tax receivable agreement In connection with the IPO, the Company entered into a tax receivable agreement with Lone Star that provides for, among other things, the payment by the Company to Lone Star of 85% of the amount of certain covered tax benefits, which may reduce the actual liability for certain taxes that the Company might otherwise be required to pay. See further discussion in Note 16, Commitments and contingencies. Bricks Joint Venture Prior to the IPO, LSF9 distributed its brick operations in the United States and Eastern Canada to a joint venture formed by an affiliated of Lone Star (the "Bricks Disposition"). In connection with the Bricks Disposition, Forterra entered into a transition services agreement with the joint venture, whereby Forterra would continue to provide certain administrative services, including but not limited to information technology, accounting and treasury for a limited period of time. Such transition services ended in February 2018. The Company recognized a total of $10 thousand and $1.6 million in Other operating income, net pursuant to the transition services agreement for the years ended December 31, 2018 and December 31, 2017, respectively. Additionally, during the transition period, the Company collected cash from as well as settled invoices and payroll on behalf of the joint venture. As a result, Forterra had a net receivable from affiliates of $4.4 million as of December 31, 2018, included in other current assets. Such amount was subsequently collected during the second quarter of 2019. |
Quarterly financial data (unaud
Quarterly financial data (unaudited) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly financial data (unaudited) | Quarterly Financial Data (Unaudited) The following is a summary of the quarterly results of operations: Year ended December 31, 2019: (in thousands, except per share amounts) First Quarter Second Quarter Third Quarter Fourth Quarter Net sales $ 291,858 $ 410,219 $ 464,526 $ 363,149 Cost of goods sold 250,053 324,405 362,362 296,550 Gross profit 41,805 85,814 102,164 66,599 Income (loss) from continuing operations before taxes (32,336 ) 3,835 28,327 (10,436 ) Net income (loss) (25,039 ) 2,954 22,430 (7,676 ) Basic earnings (loss) per share: Net income (loss) $ (0.39 ) $ 0.05 $ 0.35 $ (0.12 ) Diluted earnings (loss) per share: Net income (loss) $ (0.39 ) $ 0.05 $ 0.34 $ (0.12 ) Year ended December 31, 2018: (in thousands, except per share amounts) First Quarter Second Quarter Third Quarter Fourth Quarter Net sales $ 289,960 $ 416,087 $ 434,510 $ 339,155 Cost of goods sold 255,595 340,774 357,374 280,400 Gross profit 34,365 75,313 77,136 58,755 Income (loss) from continuing operations before taxes (23,595 ) 14,237 8,296 (20,218 ) Net income (loss) (19,910 ) 6,994 5,503 (16,952 ) Basic earnings (loss) per share: Net income (loss) $ (0.31 ) $ 0.11 $ 0.09 $ (0.27 ) Diluted earnings (loss) per share: Net income (loss) $ (0.31 ) $ 0.11 $ 0.09 $ (0.27 ) |
Supplemental cash flow disclosu
Supplemental cash flow disclosures | 12 Months Ended |
Dec. 31, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental cash flow disclosures | Supplemental Cash Flow Disclosures Year ended Year ended Year ended 2019 2018 2017 SUPPLEMENTAL DISCLOSURES (in thousands): Cash interest paid $ 77,086 $ 69,381 $ 54,676 Income taxes paid, net of refunds received 12,343 11,068 28,086 SUPPLEMENTAL NON-CASH INVESTING AND FINANCING DISCLOSURES: Assets and liabilities acquired in non-cash exchange — 18,140 — Capital lease obligation resulting from the sale-leaseback exchange transaction — (148,962 ) — Fair value changes of derivatives recorded in OCI, net of tax — 970 (3,548 ) |
Summary of significant accoun_2
Summary of significant accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Principles of consolidation | Principles of Consolidation The consolidated financial statements include the accounts and results of operations of Forterra, Inc. and its consolidated subsidiaries. Intercompany transactions and balances have been eliminated in consolidation. |
Basis of presentation | Basis of Presentation The consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (‘‘U.S. GAAP’’). Certain prior year numbers have been reclassified to conform to current year presentations. |
Business combinations | Business Combinations Assets acquired and liabilities assumed in business combination transactions, as defined by the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 805, Business Combination , are recorded at fair value using the acquisition method of accounting. The Company allocates the purchase price of acquisitions based upon the fair value of each component which may be derived from various observable and unobservable inputs and assumptions. Initial purchase price allocations are preliminary and subject to revision within the measurement period, not to exceed one year from the date of the transaction. The fair value of property, plant and equipment and intangible assets may be based upon the discounted cash flow method that involves inputs that are not observable in the market (Level 3). Goodwill assigned represents the amount of consideration transferred in excess of the fair value assigned to identifiable assets acquired and liabilities assumed. |
Use of estimates | Use of estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the reporting date, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. These estimates are based on management’s best knowledge of current events and actions that the Company may undertake in the future. The more significant estimates made by management relate to fair value estimates for assets and liabilities acquired in business combinations; estimates for accrued liabilities for environmental cleanup, bodily injury and insurance claims; estimates for commitments and contingencies; and estimates for the realizability of deferred tax assets, the tax receivable agreement obligation, inventory reserves, allowance for doubtful accounts and impairment of goodwill and long-lived assets. |
Cash and cash equivalents | Cash and cash equivalents Cash and cash equivalents include cash on hand and other highly liquid investments having an original maturity of less than three months. |
Receivables, net | Receivables, net Receivables are recorded at net realizable value, which includes allowances for doubtful accounts. The Company reviews the collectability of trade receivables on an ongoing basis. The Company reserves for trade receivables determined to be uncollectible. This determination is based on the delinquency of the account, the financial condition of the customer and the Company’s collection experience. |
Concentration of credit risk | Concentration of credit risk Financial instruments that potentially subject the Company to concentrations of credit risk are primarily receivables. The Company performs ongoing credit evaluations of its customers’ financial condition and generally requires no collateral from its customers. The allowances for uncollectible receivables are based upon analysis of economic trends in the construction industry, detailed analysis of the expected collectibility of accounts receivable that are past due and the expected collectibility of overall receivables. |
Inventories | Inventories Inventories are valued at the lower of cost or net realizable value. The Company’s inventories are valued using the average cost and first-in-first-out methods. Inventories include materials, labor and applicable factory overhead costs. The value of inventory is adjusted for damaged, obsolete, excess and slow-moving inventory. Market value of inventory is estimated considering the impact of market trends, an evaluation of economic conditions, and the value of current orders relating to the future sales of each respective component of inventory. |
Property, plant and equipment, net | Property, plant and equipment, net Property, plant and equipment, which includes amounts recorded under capital lease arrangements, is stated at cost less accumulated depreciation. Depreciation of property, plant and equipment is computed using the straight-line method over the estimated useful lives of the assets. These lives range from 20 to 40 years for buildings, 4 to 20 years for machinery and equipment, and 5 to 10 years for other equipment and lower of lease term or useful life on leasehold improvements. Repair and maintenance costs are expensed as incurred. The Company’s depreciation expense is recorded in cost of goods sold and selling, general and administrative expenses in the statements of operations. The Company capitalizes interest during the active construction of major projects. Capitalized interest is added to the cost of the underlying assets and is depreciated over the useful lives of those assets. There was no interest capitalized for any of the periods presented in the financial statements. |
Impairment or disposal of long-lived assets | Impairment or disposal of long-lived assets The Company evaluates the recoverability of its long-lived assets in accordance with the provisions of ASC 360, Property, Plant and Equipment (“ASC 360”). ASC 360 requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets is measured by comparing the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. Such evaluations for impairment are significantly impacted by estimates of future prices for the Company’s products, capital needs, economic trends in the construction sector and other factors. If such assets are considered to be impaired, the impairment to be recognized is measured at the amount by which the carrying amount of the assets exceeds their fair value. |
Leases | Leases The Company has both capital and finance leases. T he Company determines if an arrangement is a lease at inception. Leases with an initial term of less than 12 months are not recorded on the balance sheet. Operating leases are included in operating lease right-of-use (“ROU”) assets, accrued liabilities, and long-term operating lease liabilities in the consolidated balance sheets. Finance leases are included in property, plant and equipment, accrued liabilities, and long-term finance lease liabilities in the consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company uses the implicit rate when readily determinable. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. For machinery and equipment leases, such as forklifts, the Company accounts for the lease and non-lease components as a single lease component. Minimum rent payments under operating leases are recognized as an expense on a straight-line basis over the lease term, including any rent free periods. |
Goodwill and other intangible assets, net | Goodwill and other intangible assets, net Goodwill represents the excess of costs over the fair value of identifiable assets acquired and liabilities assumed. The Company evaluates goodwill and intangible assets in accordance with ASC 350, Goodwill and Other Intangible Assets (“ASC 350”). ASC 350 requires goodwill to be either qualitatively or quantitatively assessed for impairment annually (or more frequently if impairment indicators arise) for each reporting unit. The Company performs its annual impairment testing of goodwill as of October 1 of each year and in interim periods if events occur that would indicate that it is more likely than not the fair value of a reporting unit is less than carrying value. The Company first assesses qualitative factors to evaluate whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as the basis for determining whether it is necessary to perform a quantitative goodwill impairment test. The Company may bypass the qualitative assessment for any reporting unit in any period and proceed directly with the quantitative analysis. The quantitative analysis compares the fair value of the reporting unit with its carrying amount. If the carrying amount of a reporting unit exceeds the fair value, impairment is recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. The Company evaluates its intangible assets with finite lives for indications of impairment whenever events or changes in circumstances indicate that the net book value may not be recoverable. Intangible assets with finite lives consist of customer relationships, customer backlogs, and brand names, and are amortized under the consumption method over the estimated useful lives. Factors that could trigger an impairment review include significant under-performance relative to expected historical or projected future operating results, significant changes in the manner of the Company's use of the acquired assets or the strategy for the Company's overall business or significant negative industry or economic trends. If this evaluation indicates that the value of the intangible asset may be impaired, the Company makes an assessment of the recoverability of the net book value of the asset over its remaining useful life. If this assessment indicates that the intangible asset is not recoverable, based on the estimated undiscounted future cash flows of the asset over the remaining amortization period, the Company reduces the net book value of the related intangible asset to fair value and may adjust the remaining amortization period. |
Investment in equity method investee | Investment in equity method investee The Company has an investment in a joint venture accounted for using the equity method. Under the equity method, carrying value is adjusted for the Company's share of the investee's earnings and losses, as well as capital contributions to and distributions from the investee. Distributions in excess of equity method earnings are recognized as a return of investment and recorded as investing cash inflows in the accompanying consolidated statements of cash flows. The Company classifies its share of income and loss related to its investments in its investee as a component of operating income or loss, as the Company's investments in the investee is an extension of the Company's core business operations. The Company evaluates its investment in the equity method investee for impairment whenever events or changes in circumstances indicate that the carrying value of its investment may have experienced an "other-than-temporary" decline in value. If such conditions exist, the Company compares the estimated fair value of the investment to its carrying value to determine if an impairment is indicated and determines whether the impairment is "other-than-temporary" based on its assessment of all relevant factors, including consideration of the Company's intent and ability to retain its investment. |
Derivatives and hedge accounting | Derivatives and Hedge Accounting The Company has entered into derivative instruments to mitigate interest rate and foreign exchange rate risk. Certain derivative instruments are designated for hedge accounting under ASC 815-20, Derivatives - Hedging . Instruments that meet hedge criteria are formally designated as hedges at the inception of the instrument. The Company’s derivative assets and liabilities are measured at fair value. Fair value related to the cash flows occurring within one year are classified as current and the fair value related to the cash flows occurring beyond one year are classified as non-current in the consolidated balance sheets. For those instruments designated as hedges, the Company recognizes the changes in fair value in other comprehensive income (“OCI”), and recognizes any ineffectiveness immediately in earnings. Valuation of derivative assets and liabilities reflect the value of the instrument including counterparty credit risk. These values also take into account the Company’s own credit standing. |
Deferred financing costs | Deferred financing costs In conjunction with its debt, the Company had a net balance of $25.1 million in debt discounts and debt issuance costs as of December 31, 2019 . These costs are amortized over the life of the applicable debt instrument to interest expense utilizing the effective interest method. |
Fair value measurement | Fair value measurement The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels: Level 1 Inputs – Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. Level 2 Inputs – Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. Level 3 Inputs – Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date. The Company's other financial instruments consist primarily of cash and cash equivalents, trade and other receivables, accounts payable, accrued expenses, derivative financial instruments and long-term debt. The carrying value of the Company’s trade and other receivables, trade payables and accrued expenses approximates fair value due to their highly liquid nature, short-term maturity, or competitive rates assigned to these financial instruments. The Company adjusts the carrying amount of certain non-financial assets to fair value on a non-recurring basis when they are impaired. |
Foreign currency translation | Foreign currency translation The Company uses the U.S. dollar as its functional currency for operations in the U.S. and Mexico, and the Canadian dollar for operations in Canada. The assets, liabilities, revenues and expenses of the Company’s Canadian operations are translated in accordance with ASC 830, Foreign Currency Matters. |
Environmental remediation liabilities | Environmental remediation liabilities The Company accrues for costs on an undiscounted basis associated with environmental remediation obligations when such costs are probable and reasonably estimable; if an estimated amount is likely to fall within a range and no amount within that range can be determined to be the better estimate, the minimum amount of the range is recorded. Claims for recoveries from insurance carriers and other third parties are not recorded until it is probable that the recoveries will be realized. Such accruals are adjusted as further information develops or circumstances change. Environmental expenditures that relate to current operations or to conditions caused by past operations are expensed. Expenditures that create future benefits are capitalized. |
Stock-based plans | Stock-based plans The Company applies the provisions of ASC 718, Compensation - Stock Compensation, in its accounting and reporting for stock-based compensation. ASC 718 requires all stock-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. All unvested options outstanding under the Company's option plans have grant prices equal to the market price of the Company's stock on the dates of grant. Compensation cost for restricted stock and restricted stock units is determined based on the fair market value of the Company's stock at the date of grant. Stock-based compensation expense is generally recognized over the required service period, or over a shorter period when employee retirement eligibility is a factor. The Company recognizes forfeitures as they occur. Awards that may be settled in cash or company stock are classified as liabilities and remeasured at fair value at the end of each reporting period until the awards are settled. |
Income taxes | Income Taxes Deferred tax assets generally represent items that can be used as a tax deduction or credit in the Company's tax returns in future years for which a tax benefit has already been recorded in the Company's consolidated statement of operations. The measurement of a deferred tax asset is reduced, if necessary, by a valuation allowance if, based on the available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax liabilities generally represent tax expense recognized in the financial statements for which payment has been deferred, or expense for which the Company has already taken a deduction in its tax return but have not yet recognized as expense in the financial statements. At December 31, 2018, the Company finalized its policy and elected to use the period cost method for Global Intangible Low-taxed Income (“GILTI”) provisions, and therefore, have not recorded deferred taxes for basis differences expected to reverse in future periods. The Company recognizes a tax benefit for uncertain tax positions only if the Company believes it is more likely than not that the position will be upheld on audit based solely on the technical merits of the tax position. The Company evaluates uncertain tax positions after the consideration of all available information. Penalties and interest related to income tax uncertainties, should they occur, would be included in income tax expense in the period in which they are incurred. |
Revenue recognition | Revenue recognition The Company's revenue contracts are primarily single performance obligations for the sale of product both to trade customers and distributors. A majority of revenue recognized by the Company is recognized at the time control is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for the products. The Company considers several indicators for the transfer of control to its customers, including the significant risks and rewards of ownership of products, the Company's right to payment and the legal title of the products. Based upon the assessment of control indicators, sales to trade customers and distributors are generally recognized when products are delivered to customers. All variable consideration that may affect the total transaction price, including contractual discounts, rebates, returns and credits, is included in net sales. Estimates for variable consideration are based on historical experience, anticipated performance and management's judgment. Generally, the Company's contracts do not contain significant financing. For certain engineering and construction contracts and building contracting arrangements, the Company enters into long-term contracts with customers. Revenue is recognized as the identified performance obligations are satisfied over time using an acceptable input method to measure the progress toward completion of the performance obligation if: the customer receives the benefits as work is performed, the customer controls the asset as it is being produced, or if the product being produced for the customer has no alternative use and the Company has a contractual right to payment. The Company uses its cost incurred to date relative to total estimated costs at completion to measure progress. The Company's contract liabilities consist of billings to customers in excess of revenue recognized which the Company records as deferred revenue. Revenue recognized during the years ended December 31, 2019 and December 31, 2018, which was included in contract liabilities at the beginning of each period was not material. Contract assets include revenue recognized in excess of amounts billed, and balances billed but not yet paid by customers under retainage provisions which are classified as a current asset within receivables, net on the Company's consolidated balance sheet. The Company had no material contract assets on the consolidated balance sheets as of December 31, 2019 or December 31, 2018. For the years ended December 31, 2019, 2018 and 2017, revenue recognized in continuing operations using the percentage of completion method amounted to 2% , 1% , and 3% and of total net sales, respectively. The Company records net sales including taxes collected on behalf of its customers. Shipping and handling costs are accounted for as contract fulfillments costs and classified as cost of goods sold. See Note 20, Segment reporting, for the Company's disaggregated revenue disclosures. The Company incurs shipping costs to third parties for the transportation of building products and bills such costs to customers. For the years ended December 31, 2019 , 2018 and 2017, the Company recorded freight costs of approximately $131.8 million , $127.0 million and $132.3 million , respectively, on a gross basis within net sales and cost of goods sold in the accompanying consolidated statements of operations. The Company generally provides limited warranties related to its products which cover manufacturing in accordance with the specifications identified on the face of its quotation or order acknowledgment and to be free of defects in workmanship or materials. The warranty periods typically extend for a limited duration of one year. The Company estimates and accrues for potential warranty exposure related to products which have been delivered. |
Costs of goods sold and selling, general and administrative expenses | Cost of goods sold and selling, general and administrative expenses Cost of goods sold includes costs of production, inbound freight charges for raw materials, outbound freight to customers, purchasing and receiving costs, inspection costs and warehousing at plant distribution facilities. Selling, general and administrative costs include expenses for sales, marketing, legal, accounting and finance services, human resources, customer support, treasury and other general corporate services. |
Recent accounting guidance adopted and not yet adopted | Recent Accounting Guidance Adopted In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-02, Leases (Topic 842) , which establishes the principles that lessees and lessors shall apply to report information about the amount, timing, and uncertainty of cash flows arising from a lease. Under the new guidance, lessees are required to recognize a right-of-use asset and a lease liability, measured on a discounted basis, at the commencement date for all leases with terms greater than twelve months. Additionally, this guidance required disclosures to help investors and other financial statement users better understand the amount, timing and uncertainty of cash flows arising from leases, including qualitative and quantitative requirements. The Company adopted Topic 842 during the first quarter of 2019, using the transition approach that permits application of the new standard at the adoption date instead of the earliest comparative period presented in the financial statements. To adopt Topic 842, the Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the Company to carry forward its historical assessments of (1) whether the existing contracts contained a lease, (2) the lease classification for existing leases, and (3) initial direct cost for existing leases. In addition to the package of practical expedients, the Company has elected the adoption expedients of (1) the exclusion of leases with terms less than 12 months, and (2) the election not to separate non-lease components from lease components for certain classes of underlying leased assets. To adopt Topic 842, the Company recognized a cumulative catch-up adjustment to the opening balance sheet presented January 1, 2019. The adoption of the standard had a material impact on the Company’s consolidated balance sheet but did not have an impact on its consolidated statements of operations, comprehensive income (loss) or cash flows. As a result of the adoption, the Company has recorded additional lease assets and lease liabilities of approximately $63.9 million and $65.2 million , respectively, as of January 1, 2019. In addition, the Company recognized the carrying value of deferred gains related to certain sale and operating leaseback of land of $9.3 million , net of tax impact of $2.3 million , to beginning retained deficit as of January 1, 2019, in accordance with ASC 842-10-65-1. In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income to allow a reclassification from accumulated other comprehensive income (“AOCI”) to retained earnings for stranded tax effects resulting from the U.S. tax reform legislation commonly known as the Tax Cuts and Jobs Act of 2017 (“TCJA”). This guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. The Company early adopted the guidance provided in the ASU during the first quarter of 2018 and reclassified $0.8 million of stranded deferred tax benefits related to its derivative instruments from accumulated other comprehensive loss to retained deficit. Recent Accounting Guidance Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) . The standard replaces the incurred loss impairment methodology under current U.S. GAAP with a methodology that reflects expected credit losses and requires the use of a forward-looking expected credit loss model for accounts receivables, loans, and other financial instruments. The standard requires a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The new standard is effective for fiscal years beginning after December 15, 2019. The Company plans to adopt the new credit loss standard effective January 1, 2020. The Company does not expect the new credit loss standard to have a material effect on its consolidated financial statements. |
Acquisitions and divestitures (
Acquisitions and divestitures (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Schedule of assets acquired and liabilities assumed in business acquisition | The respective fair values of the assets acquired and liabilities assumed at the acquisition date for the Royal acquisition are as follows: 2017 Royal Net working capital $ 2,994 Property, plant and equipment, net 12,335 Customer relationship intangible 1,676 Non-compete agreement intangible 866 Trade names 308 Customer backlog intangible 63 Patents 72 Other assets and liabilities (726 ) Net identifiable assets acquired 17,588 Goodwill 17,903 Cash consideration transferred $ 35,491 The final fair values of the assets acquired and liabilities assumed in the transaction, including $9.1 million in cash, the Prentiss plant, and a parcel of land in Texas, at the acquisition date are as follows (in thousands) : Net working capital $ 10,984 Property, plant and equipment 9,221 Customer relationship intangible 2,100 Non-compete agreement intangible 5,600 Other intangibles 290 Net identifiable assets acquired 28,195 Goodwill 8,996 Consideration transferred $ 37,191 |
Receivables, net (Tables)
Receivables, net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Schedule of receivables and allowance for doubtful accounts | The table below summarizes the Company's allowance for doubtful accounts for the periods presented (in thousands) : Allowance for doubtful accounts Balance at December 31, 2017 $ (4,033 ) Recovery on doubtful accounts 1,224 Write-offs and adjustments 668 Balance at December 31, 2018 $ (2,141 ) Provision for doubtful accounts (387 ) Write-offs and adjustments 460 Balance at December 31, 2019 $ (2,068 ) Receivables consist of the following at December 31, 2019 and 2018 (in thousands) : December 31, 2019 2018 Trade receivables $ 178,698 $ 188,999 Amounts billed, but not yet paid under retainage provisions 3,093 2,065 Other receivables 26,078 9,545 Total receivables $ 207,869 $ 200,609 Less: Allowance for doubtful accounts (2,068 ) (2,141 ) Receivables, net $ 205,801 $ 198,468 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | Inventories consist of the following at December 31, 2019 and December 31, 2018 (in thousands) : December 31, 2019 2018 Finished goods $ 161,440 $ 193,603 Raw materials 76,237 90,376 Work in process 806 1,051 Total inventories $ 238,483 $ 285,030 |
Investment in equity method i_2
Investment in equity method investee (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of Company's distribution and earnings in equity investment | The following reflects the Company's distribution and earnings in the equity investment (in thousands): Year ended December 31, 2019 2018 2017 Distribution received from CP&P $ (11,039 ) $ (13,141 ) (13,717 ) Share of earnings in CP&P 10,538 10,234 12,432 Amortization of excess fair value of investment (72 ) (72 ) (72 ) Selected financial data for CP&P on a 100% basis is as follows ( in thousands ): Year ended December 31, 2019 2018 2017 Net sales $ 136,430 $ 125,744 $ 137,458 Gross profit 40,379 37,491 43,453 Income from operations 20,899 19,729 25,346 Net income 20,844 19,804 25,437 |
Property, plant and equipment_2
Property, plant and equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, plant and equipment, net | Property, plant and equipment, net consist of the following at December 31, 2019 and 2018 (in thousands) : December 31, 2019 2018 Machinery and equipment $ 398,127 $ 373,881 Land, buildings and improvements 240,403 235,819 Other equipment 8,660 6,962 Construction-in-progress 29,157 32,448 Total property, plant and equipment 676,347 649,110 Less: accumulated depreciation (200,772 ) (156,943 ) Property, plant and equipment, net $ 475,575 $ 492,167 |
Goodwill and other intangible_2
Goodwill and other intangible assets, net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill by segment | The following table summarizes the changes in goodwill by operating segment for the years ended December 31, 2019 and December 31, 2018 (in thousands) : Drainage Pipe & Products Water Pipe & Products Total Balance at December 31, 2017 $ 179,723 $ 316,418 $ 496,141 Acquisitions 9,951 — 9,951 Foreign currency and other adjustments 159 1,942 2,101 Balance at December 31, 2018 189,833 318,360 508,193 Foreign currency and other adjustments 633 — 633 Balance at December 31, 2019 $ 190,466 $ 318,360 $ 508,826 |
Schedule of intangible assets | Intangible assets other than goodwill at December 31, 2019 included the following (in thousands) : Weighted average amortization period (in years) Gross carrying amount as of December 31, 2019 Accumulated amortization Net carrying value as of December 31, 2019 Customer relationships 10 $ 235,907 $ (135,038 ) $ 100,869 Trade names 10 39,390 (19,764 ) 19,626 Patents 11 23,629 (15,956 ) 7,673 Customer backlog 0.8 13,209 (13,209 ) — Non-compete agreements 5 17,090 (9,020 ) 8,070 Developed technology 17 6,354 (374 ) 5,980 Other 10 867 (411 ) 456 Total intangible assets $ 336,446 $ (193,772 ) $ 142,674 Intangible assets other than goodwill at December 31, 2018 included the following (in thousands) : Weighted average amortization period (in years) Gross carrying amount as of December 31, 2018 Accumulated amortization Net carrying value as of December 31, 2018 Customer relationships 10 $ 231,056 $ (99,583 ) $ 131,473 Trade names 10 39,390 (14,867 ) 24,523 Patents 11 23,629 (12,325 ) 11,304 Customer backlog 0.8 13,206 (13,206 ) — Non-compete agreements 5 15,618 (6,044 ) 9,574 In-Process R&D (1) Indefinite-lived 6,354 — 6,354 Other 10 867 (306 ) 561 Total intangible assets $ 330,120 $ (146,331 ) $ 183,789 (1) Reclassified to developed technology in the first quarter of 2019. |
Schedule of estimated amortization expense of intangible assets | The estimated amortization expense relating to amortizable intangible assets for the next five years is as follows (in thousands) : Year ended Intangible assets subject to amortization 2020 $ 41,286 2021 33,221 2022 23,984 2023 17,651 2024 12,742 Total $ 128,884 |
Fair value measurement (Tables)
Fair value measurement (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value measurements on recurring basis | The estimated carrying amount and fair value of the Company’s financial instruments measured and recorded at fair value on a recurring basis are as follows for the dates indicated (in thousands) : Fair value measurements at December 31, 2019 using Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Fair Value December 31, 2018 Recurring: Non-current assets Derivative asset $ — $ 258 $ — $ 258 Fair value measurements at December 31, 2018 using Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Fair Value December 31, 2017 Recurring: Non-current assets Derivative asset $ — $ 6,659 $ — $ 6,659 |
Schedule of carrying and fair value amounts for financial instruments and liabilities | The estimated carrying amount and fair value of the Company’s financial instruments and liabilities for which fair value is only disclosed is as follows (in thousands) : Fair value measurements at December 31, 2019 using Carrying Amount December 31, 2019 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Fair Value December 31, 2019 Non-current liabilities Term Loan $1,098,303 — $1,102,295 — $1,102,295 Tax receivable agreement payable 77,385 — — 47,625 47,625 Fair value measurements at December 31, 2018 using Carrying Amount December 31, 2018 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Fair Value December 31, 2018 Non-current liabilities Term Loan $1,188,605 — $1,103,628 — $1,103,628 Tax receivable agreement payable 88,775 — — 51,832 51,832 |
Accrued liabilities (Tables)
Accrued liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of accrued liabilities | Accrued liabilities consist of the following at December 31, 2019 and December 31, 2018 (in thousands) : December 31, 2019 2018 Accrued payroll and employee benefits $ 32,815 $ 31,095 Short-term capital leases 16,542 16,430 Short-term operating leases 8,784 — Accrued taxes 5,354 11,489 Accrued rebates 9,895 3,542 Warranty 5,536 3,251 Environmental obligation 718 570 Other miscellaneous accrued liabilities 9,195 3,859 Total accrued liabilities $ 88,839 $ 70,236 |
Debt and deferred financing c_2
Debt and deferred financing costs (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | The Company’s debt consisted of the following (in thousands) : December 31, December 31, 2019 2018 Term Loan, net of debt issuance costs and original issuance discount of $ 1,098,303 $ 1,188,605 Total debt $ 1,098,303 $ 1,188,605 Less: current portion debt (12,510 ) (12,510 ) Total long-term debt $ 1,085,793 $ 1,176,095 |
Schedule of Minimum Future Principal Payments | As of December 31, 2019 , scheduled maturities of long-term debt were as follows (in thousands) : Term Loan 2020 $ 12,510 2021 12,510 2022 12,510 2023 1,085,828 $ 1,123,358 |
Other long-term liabilities (Ta
Other long-term liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Other Noncurrent Liabilities | Other long-term liabilities consist of the following for the years ended December 31, 2019 and 2018 (in thousands) : December 31, 2019 2018 Workers' compensation $ 9,023 $ 9,837 Deferred rent — 4,259 Employee benefits 2,945 3,307 Insurance 1,345 1,550 Environmental remediation liability 872 1,001 Other miscellaneous long-term liabilities 7,721 2,713 $ 21,906 $ 22,667 |
Derivatives and hedging (Tables
Derivatives and hedging (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Fair Values of Derivative Assets and Liabilities in the Balance Sheets | The following table presents the fair values of derivative assets and liabilities in the balance sheets (in thousands) : December 31, 2019 Derivative Assets Derivative Liabilities Notional Amount Fair Value Notional Amount Fair Value Interest rate swaps $ 525,000 $ 258 $ — $ — Total derivatives, gross 258 — Less: Legally enforceable master netting agreements — — Total derivatives, net $ 258 $ — December 31, 2018 Derivative Assets Derivative Liabilities Notional Amount Fair Value Notional Amount Fair Value Interest rate swaps $ 525,000 $ 6,659 $ — $ — Total derivatives, gross 6,659 — Less: Legally enforceable master netting agreements — — Total derivatives, net $ 6,659 $ — |
Schedule of Gain (Losses) Recognized in Statements of Operations and Comprehensive Income | The following table presents the effect of derivative instruments on the consolidated statements of operations (in thousands) : Year ended December 31, Year ended December 31, 2019 2018 Net investment hedges Foreign exchange forward contracts Gain on derivatives recognized in Accumulated other comprehensive loss $ — $ 970 Derivatives not designated as hedges Interest rate swaps Gain (loss) on derivatives not designated as hedges included in interest expense (6,401 ) 1,408 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Schedule of components of expense, discount rate and supplemental cash flow information related to leases | The components of lease expense were as follows (in thousands): Lease cost Classification Year ended December 31, 2019 Operating lease cost Lease expense $ 16,464 Finance lease cost Amortization of leased assets Depreciation, amortization, and accretion 2,276 Interest on lease liabilities Interest expense 18,528 Lease term and discount rate December 31, 2019 Weighted-average remaining lease term (years) Operating leases 15.5 years Finance leases 33.1 years Weighted-average discount rate (%) Operating leases 12.6 % Finance leases 12.3 % Supplemental cash flow information related to leases was as follows (in thousands): Year ended December 31, 2019 Cash paid for amounts included in lease liabilities Operating cash flows related to operating leases $ 14,945 Operating cash flows related to finance leases 16,090 Financing cash flows related to finance leases 583 Leased assets obtained in exchange for new finance lease liabilities 180 Leased assets obtained in exchange for new operating lease liabilities 4,925 |
Schedule of supplemental balance sheet information related to leases | Supplemental balance sheet information related to leases was as follows (in thousands): Classification December 31, 2019 Operating leases Right of use assets Operating lease right-of-use assets $ 60,253 Operating lease liabilities - current portion Accrued liabilities (8,784 ) Operating lease liabilities - long term portion Long-term operating lease liabilities (54,411 ) Finance leases Finance lease assets Property, plant and equipment, net 49,999 Finance lease liabilities - current portion Accrued liabilities (16,542 ) Finance lease liabilities - long term portion Long-term finance lease liabilities (137,365 ) |
Schedule of maturity of operating lease liabilities | As of December 31, 2019, maturities of lease liabilities were as follows (in thousands): Operating leases Finance leases Total 2020 $ 13,766 $ 16,894 $ 30,660 2021 11,371 17,049 28,420 2022 10,500 17,300 27,800 2023 10,247 17,516 27,763 2024 9,561 17,841 27,402 Thereafter 109,610 652,367 761,977 Total lease payments 165,055 738,967 904,022 Less: imputed interest (101,860 ) (585,060 ) (686,920 ) Present value of lease liabilities $ 63,195 $ 153,907 $ 217,102 |
Schedule of maturity of finance lease liabilities | As of December 31, 2019, maturities of lease liabilities were as follows (in thousands): Operating leases Finance leases Total 2020 $ 13,766 $ 16,894 $ 30,660 2021 11,371 17,049 28,420 2022 10,500 17,300 27,800 2023 10,247 17,516 27,763 2024 9,561 17,841 27,402 Thereafter 109,610 652,367 761,977 Total lease payments 165,055 738,967 904,022 Less: imputed interest (101,860 ) (585,060 ) (686,920 ) Present value of lease liabilities $ 63,195 $ 153,907 $ 217,102 |
Earnings per share (Tables)
Earnings per share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Calculation of Basic and Dilutive Earnings Per Share | The calculations of the basic and diluted EPS for the years ended December 31, 2019 , 2018 and 2017 are presented below (in thousands, except per share data): Year ended December 31, 2019 2018 2017 Net loss $ (7,331 ) $ (24,365 ) $ (2,060 ) Common stock: Weighted average basic shares outstanding 64,232 63,904 63,801 Effect of dilutive securities - stock options — — — Weighted average diluted shares outstanding 64,232 63,904 63,801 Basic and Diluted earnings (loss) per share: Net income (loss) $ (0.11 ) $ (0.38 ) $ (0.03 ) |
Stock-based plans (Tables)
Stock-based plans (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Weighted Average Assumptions in Estimating Fair Value of Options | The Company utilized the following weighted-average assumptions in estimating the fair value of the option grants in the years ended December 31, 2019 , December 31, 2018 and December 31, 2017: 2019 2018 2017 Expected dividends — % — % — % Expected volatility 32.08 % 32.90 % 39.60 % Risk-free interest rate 2.43 % 1.71 % 0.86 % Expected lives in years 6 6 6 Weighted-average fair value of options: Granted at fair value $ 1.54 $ 2.76 $ 4.16 Weighted-average exercise price of options: Granted at fair value $ 4.29 $ 7.92 $ 10.76 |
Schedule of Stock Options Outstanding, Vested and Expected to Vest | A summary of the status of the Company's stock options is presented below: Shares Weighted Average Exercise Price (in thousands) Outstanding, December 31, 2017 1,254,429 $12.31 Granted 2,189,216 $7.92 Exercised — n/a Forfeited (342,226 ) $12.53 Outstanding, December 31, 2018 3,101,419 $9.19 Granted 2,771,930 $4.29 Exercised (224,266 ) $7.60 Forfeited (1,975,987 ) $7.50 Outstanding, December 31, 2019 3,673,096 $6.50 Options vested or expected to vest at year end 3,673,096 $6.50 Options exercisable at year end 927,863 $8.81 |
Schedule of Restricted Stock and Restricted Stock Unit Awards Activity | The following table summarizes the activity for restricted stock and restricted stock units: Shares Weighted Average Grant Date Fair Value (in thousands) Unvested balance at December 31, 2017 441,350 $13.60 Grants 542,979 $7.98 Vested shares (155,260 ) $13.11 Forfeitures (84,706 ) $12.98 Unvested balance at December 31, 2018 744,363 $9.68 Grants 2,562,250 $4.58 Vested shares (508,799 ) $7.74 Forfeitures (640,172 ) $6.21 Unvested balance at December 31, 2019 2,157,642 $5.11 |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income (Loss) From Continuing Operations before Income Tax, Domestic and Foreign | The Company’s income (loss) from continuing operations before income taxes was as follows (in thousands) : Year ended December 31, Year ended December 31, Year ended December 31, 2019 2018 2017 U.S. companies $ (21,557 ) $ (36,317 ) $ (54,690 ) Foreign companies 10,947 15,037 11,958 Loss from continuing operations before income taxes $ (10,610 ) $ (21,280 ) $ (42,732 ) |
Schedule of Components of Income Tax (Expense) Benefit | The income tax benefit (expense) was as follows (in thousands) : Year ended December 31, Year ended December 31, Year ended December 31, 2019 2018 2017 Current income tax U.S. companies $ (9,510 ) $ (13,225 ) $ 21,539 State (4,260 ) (5,779 ) (1,479 ) Foreign companies (3,018 ) (4,849 ) (4,884 ) Total current tax (expense) benefit (16,788 ) (23,853 ) 15,176 Deferred income tax U.S. companies 16,180 17,273 26,866 State 4,232 3,306 (1,658 ) Foreign companies (345 ) 189 288 Total deferred tax benefit 20,067 20,768 25,496 Income tax (expense) benefit $ 3,279 $ (3,085 ) $ 40,672 |
Schedule of Effective Income Tax Rate Reconciliation | The rate reconciliation for continuing operations presented below is based on the U.S. federal statutory tax rate of 21% for the years ended December 31, 2019 and December 31, 2018 and 35% for the years ended December 31, 2017 because the predominant business activity is in the U.S. (in thousands) : Year ended December 31, Year ended December 31, Year ended December 31, 2019 2018 2017 Loss from continuing operations $ (10,610 ) $ (21,280 ) $ (42,732 ) Income tax benefit at statutory rate of 21% and 35% $ 2,228 $ 4,469 $ 14,956 State income taxes, net of federal benefit 113 1,494 1,470 Foreign rate differential (361 ) (568 ) 1,586 Non-deductible executive compensation (1,011 ) (129 ) — Tax effect of equity compensation (496 ) (310 ) (13 ) M&E and other non-deductible expenses (763 ) (452 ) (1,220 ) Change in valuation allowance 1,927 (6,601 ) (4,141 ) Divestiture of assets — (1,559 ) — Goodwill impairment — — (1,147 ) Effect of TCJA — — 26,932 Net US tax cost on foreign income (221 ) (390 ) — Tax credits 552 390 497 Other prior year adjustments 1,311 571 1,752 Total income tax benefit (expense) $ 3,279 $ (3,085 ) $ 40,672 |
Schedule of Deferred Tax Assets and Liabilities | The net deferred tax asset (liability) balances were comprised of the following components as of December 31, 2019 and 2018 (in thousands) : December 31, 2019 December 31, 2018 Deferred tax assets: Inventory $ 6,891 $ 6,424 Reserves 4,112 2,263 Accrued liabilities 4,656 4,347 Net operating losses 2,964 3,243 Capitalized transaction costs 3,599 3,407 Finance leases 55,063 39,512 Deferred gain on sale-leaseback — 2,521 Interest expense limitation 6,566 2,780 Tax receivable agreement 1,655 1,645 Other assets 4,687 1,110 Total deferred tax assets 90,193 67,252 Valuation allowance (13,555 ) (15,427 ) Total deferred tax assets, net $ 76,638 $ 51,825 Deferred tax liabilities: Fixed assets $ (53,156 ) $ (50,686 ) Lease assets (25,378 ) (11,543 ) Deferred financing costs (6,812 ) (8,631 ) Intangible assets (20,221 ) (27,580 ) Total deferred tax liabilities $ (105,567 ) $ (98,440 ) Net deferred tax asset (liability) $ (28,929 ) $ (46,615 ) |
Schedule of Operating Loss Carryforwards | As of December 31, 2019 , the Company had tax loss carryforwards as follows (in thousands) : Amount Expiration Date Federal net operating losses $ — — State net operating losses $ 29,048 2021-2039 Foreign net operating losses $ 5,848 2036-2039 |
Segment reporting (Tables)
Segment reporting (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following tables set forth the disaggregation of revenue earned from contracts with customers based on the Company's reportable segments as well as other financial information attributable to the Company's reportable segments for the periods presented (in thousands) : Year ended Year ended December 31, Year ended December 31, 2019 2018 2017 Net sales: Drainage Pipe & Products $ 894,722 $ 811,477 $ 834,810 Water Pipe & Products 635,030 668,235 745,555 Corporate and Other — — 48 Total $ 1,529,752 $ 1,479,712 $ 1,580,413 Depreciation and amortization: Drainage Pipe & Products $ 37,331 $ 41,495 $ 45,750 Water Pipe & Products 58,476 62,917 69,089 Corporate and Other 1,451 1,011 820 Total $ 97,258 $ 105,423 $ 115,659 Segment EBITDA and reconciliation to income (loss) before income taxes: Drainage Pipe & Products $ 171,413 $ 156,735 $ 129,618 Water Pipe & Products 84,424 64,547 47,587 Corporate and Other (74,219 ) (58,802 ) (44,870 ) Less: Interest expense (94,970 ) (78,337 ) (59,408 ) Depreciation and amortization (97,258 ) (105,423 ) (115,659 ) Loss before income taxes $ (10,610 ) $ (21,280 ) $ (42,732 ) Capital expenditures: Drainage Pipe & Products $ 23,096 $ 27,761 Water Pipe & Products 14,246 18,529 Corporate and Other 2,531 2,391 Total $ 39,873 $ 48,681 Total assets: Drainage Pipe & Products $ 819,373 $ 800,454 Water Pipe & Products 862,542 922,162 Corporate and Other 58,143 70,636 Total $ 1,740,058 $ 1,793,252 In addition, the Company also has an investment in an equity method investee included in the Drainage Pipe & Products segment for which earnings from equity method investee were $10.5 million , $10.2 million and $12.4 million for the years ended December 31, 2019, 2018 and 2017, respectively, and with the following balances (in thousands) : December 31, 2019 2018 Investment in equity method investee $ 50,034 $ 50,607 |
Schedule of Long-lived Assets by Geographic Areas | Property, plant, and equipment, net: December 31, 2019 2018 United States $ 422,486 $ 441,773 Canada 43,754 40,331 Mexico 9,335 10,063 $ 475,575 $ 492,167 |
Schedule of Revenue from External Customers by Geographic Areas | Net Sales: Year ended December 31, Year ended December 31, Year ended December 31, 2019 2018 2017 United States $ 1,448,492 $ 1,389,115 $ 1,485,092 Canada 73,270 80,868 82,529 Mexico 7,990 9,729 12,792 $ 1,529,752 $ 1,479,712 $ 1,580,413 |
Quarterly financial data (una_2
Quarterly financial data (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summary of Quarterly Results of Operations (Unaudited) | The following is a summary of the quarterly results of operations: Year ended December 31, 2019: (in thousands, except per share amounts) First Quarter Second Quarter Third Quarter Fourth Quarter Net sales $ 291,858 $ 410,219 $ 464,526 $ 363,149 Cost of goods sold 250,053 324,405 362,362 296,550 Gross profit 41,805 85,814 102,164 66,599 Income (loss) from continuing operations before taxes (32,336 ) 3,835 28,327 (10,436 ) Net income (loss) (25,039 ) 2,954 22,430 (7,676 ) Basic earnings (loss) per share: Net income (loss) $ (0.39 ) $ 0.05 $ 0.35 $ (0.12 ) Diluted earnings (loss) per share: Net income (loss) $ (0.39 ) $ 0.05 $ 0.34 $ (0.12 ) Year ended December 31, 2018: (in thousands, except per share amounts) First Quarter Second Quarter Third Quarter Fourth Quarter Net sales $ 289,960 $ 416,087 $ 434,510 $ 339,155 Cost of goods sold 255,595 340,774 357,374 280,400 Gross profit 34,365 75,313 77,136 58,755 Income (loss) from continuing operations before taxes (23,595 ) 14,237 8,296 (20,218 ) Net income (loss) (19,910 ) 6,994 5,503 (16,952 ) Basic earnings (loss) per share: Net income (loss) $ (0.31 ) $ 0.11 $ 0.09 $ (0.27 ) Diluted earnings (loss) per share: Net income (loss) $ (0.31 ) $ 0.11 $ 0.09 $ (0.27 ) |
Supplemental cash flow disclo_2
Supplemental cash flow disclosures (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Cash Flow Supplemental Disclosures | Year ended Year ended Year ended 2019 2018 2017 SUPPLEMENTAL DISCLOSURES (in thousands): Cash interest paid $ 77,086 $ 69,381 $ 54,676 Income taxes paid, net of refunds received 12,343 11,068 28,086 SUPPLEMENTAL NON-CASH INVESTING AND FINANCING DISCLOSURES: Assets and liabilities acquired in non-cash exchange — 18,140 — Capital lease obligation resulting from the sale-leaseback exchange transaction — (148,962 ) — Fair value changes of derivatives recorded in OCI, net of tax — 970 (3,548 ) |
Organization and description _2
Organization and description of the business (Details) | May 01, 2017USD ($) | Oct. 25, 2016USD ($)$ / sharesshares | Oct. 06, 2016$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2017USD ($) | Oct. 05, 2016$ / sharesshares | Mar. 13, 2015USD ($) |
Subsidiary, Sale of Stock [Line Items] | ||||||||
Common shares, authorized (in shares) | shares | 190,000,000 | 190,000,000 | 190,000,000 | 1,000 | ||||
Common shares, par value (in usd per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.01 | ||||
Stock split (in shares) | 41,619.472 | |||||||
Common shares, outstanding (in shares) | shares | 41,619,472 | 64,741,000 | 64,206,000 | |||||
Preferred stock, authorized (in shares) | shares | 10,000,000 | |||||||
Preferred stock, shares issued (in shares) | shares | 0 | |||||||
Preferred stock, shares outstanding (in shares) | shares | 0 | |||||||
Net proceeds from initial public offering (IPO) | $ 1,703,000 | $ 0 | $ 0 | |||||
Debt obligations | 1,098,303,000 | 1,188,605,000 | ||||||
Proceeds from debt | 0 | 0 | 200,000,000 | |||||
Payments on senior and junior term loans with IPO proceeds | 95,741,000 | 12,510,000 | $ 12,008,000 | |||||
Senior Notes | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Debt obligations | $ 1,050,000,000 | |||||||
Senior Notes | 2016 Senior Term Loan | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Debt obligations | $ 1,050,000,000 | $ 1,098,303,000 | $ 1,188,605,000 | |||||
Line of Credit | 2016 Senior Term Loan | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Proceeds from debt | $ 200,000,000 | |||||||
IPO | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Number of shares issued in initial public offering (IPO) (in shares) | shares | 18,420,000 | |||||||
Initial public offering price (IPO) (in usd per share) | $ / shares | $ 18 | |||||||
Net proceeds from initial public offering (IPO) | $ 313,300,000 | |||||||
HeidelbergCement Hanson Building Products | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Business acquisition, possible maximum earn out | $ 100,000,000 |
Summary of significant accoun_3
Summary of significant accounting policies (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2019 | |
Debt Instrument [Line Items] | ||||||||||||
Collective-bargaining arrangement, percentage of participants | 32.00% | 32.00% | ||||||||||
Collective-bargaining arrangement, percent of participants, agreement expiries within 12 months | 42.00% | 42.00% | ||||||||||
Collective-bargaining arrangement, expiration period | 12 months | |||||||||||
Interest costs capitalized | $ 0 | $ 0 | $ 0 | |||||||||
Operating lease expense | 16,500,000 | |||||||||||
Operating lease rent expense | 24,300,000 | $ 30,800,000 | ||||||||||
Debt discount and issuance costs | $ 25,100,000 | 25,100,000 | ||||||||||
Accrued environmental obligation | 1,600,000 | $ 1,600,000 | $ 1,600,000 | $ 1,600,000 | ||||||||
Revenues as a percent of net sales, recognized in continuing operations using the percentage of completion method, percent | 2.00% | 1.00% | 3.00% | |||||||||
Freight costs | $ 296,550,000 | $ 362,362,000 | $ 324,405,000 | $ 250,053,000 | $ 280,400,000 | $ 357,374,000 | $ 340,774,000 | $ 255,595,000 | $ 1,233,370,000 | $ 1,234,143,000 | $ 1,327,305,000 | |
Warranty period | 1 year | |||||||||||
Reclassification due to the adoption of ASU 2018-02 | 0 | |||||||||||
Buildings | Minimum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Useful life of property, plant and equipment | 20 years | |||||||||||
Buildings | Maximum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Useful life of property, plant and equipment | 40 years | |||||||||||
Machinery and equipment | Minimum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Useful life of property, plant and equipment | 4 years | |||||||||||
Machinery and equipment | Maximum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Useful life of property, plant and equipment | 20 years | |||||||||||
Other equipment | Minimum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Useful life of property, plant and equipment | 5 years | |||||||||||
Other equipment | Maximum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Useful life of property, plant and equipment | 10 years | |||||||||||
Cargo and Freight | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Freight costs | $ 131,800,000 | 127,000,000 | $ 132,300,000 | |||||||||
Retained Earnings | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Reclassification due to the adoption of ASU 2018-02 | $ 830,000 | |||||||||||
Core and Main | Customer Concentration Risk | Water Pipe & Products | Net Sales | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Concentration risk, percentage | 15.00% | 14.00% | ||||||||||
Core and Main | Customer Concentration Risk | Water Pipe & Products | Total Receivables | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Concentration risk, percentage | 11.00% | 16.00% | ||||||||||
ASU 2018-02 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Reclassification due to the adoption of ASU 2018-02 | $ 800,000 | |||||||||||
ASU 2016-02 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Net lease assets | $ 63,900,000 | |||||||||||
Net lease liabilities | 65,200,000 | |||||||||||
ASU 2016-02 | Retained Earnings | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Cumulative effect of adoption of new accounting pronouncement, before tax | 9,300,000 | |||||||||||
Cumulative effect of adoption of new accounting pronouncement | $ 2,300,000 |
Acquisitions and divestitures -
Acquisitions and divestitures - Acquisitions Narrative (Details) - USD ($) $ in Thousands | Mar. 01, 2019 | Apr. 02, 2018 | Jan. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Feb. 03, 2017 |
Selling, General and Administrative Expenses | ||||||||
Business Acquisition [Line Items] | ||||||||
Acquisition transaction costs | $ 200 | $ 800 | $ 400 | |||||
Foley | ||||||||
Business Acquisition [Line Items] | ||||||||
Consideration transferred | $ 37,200 | |||||||
Consideration transferred, net of cash acquired | $ 37,191 | |||||||
Royal | ||||||||
Business Acquisition [Line Items] | ||||||||
Consideration transferred, net of cash acquired | $ 35,491 | |||||||
Houston, Buckner, Montgomery and Denton Road | TEXAS | ||||||||
Business Acquisition [Line Items] | ||||||||
Cash consideration paid for assets acquired | $ 11,800 | |||||||
Drainage Pipe & Products | Mineral Wells | ||||||||
Business Acquisition [Line Items] | ||||||||
Cash consideration paid for acquisitions | $ 4,500 | |||||||
Drainage Pipe & Products | Anchor Concrete Products, Ltd. | ||||||||
Business Acquisition [Line Items] | ||||||||
Payments to acquire assets | $ 2,500 |
Acquisitions and divestitures_2
Acquisitions and divestitures - Fair Value of Assets Acquired and Liabilities Assumed in Acquisition (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Jan. 31, 2018 | Dec. 31, 2017 | Feb. 03, 2017 |
Business Acquisition [Line Items] | |||||
Goodwill | $ 508,826 | $ 508,193 | $ 496,141 | ||
Foley | |||||
Business Acquisition [Line Items] | |||||
Net working capital | $ 10,984 | ||||
Property, plant and equipment | 9,221 | ||||
Net identifiable assets acquired | 28,195 | ||||
Goodwill | 8,996 | ||||
Cash consideration transferred | 37,191 | ||||
Foley | Customer relationships | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangible assets | 2,100 | ||||
Foley | Non-compete agreements | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangible assets | 5,600 | ||||
Foley | Other | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangible assets | $ 290 | ||||
Royal | |||||
Business Acquisition [Line Items] | |||||
Net working capital | $ 2,994 | ||||
Property, plant and equipment | 12,335 | ||||
Other assets and other liabilities | (726) | ||||
Net identifiable assets acquired | 17,588 | ||||
Goodwill | 17,903 | ||||
Cash consideration transferred | 35,491 | ||||
Royal | Customer relationships | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangible assets | 1,676 | ||||
Royal | Non-compete agreements | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangible assets | 866 | ||||
Royal | Trade names | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangible assets | 308 | ||||
Royal | Customer backlog | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangible assets | 63 | ||||
Royal | Patents | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangible assets | $ 72 |
Acquisitions and divestitures_3
Acquisitions and divestitures - Divestitures (Details) - USD ($) $ in Thousands | Jan. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jul. 31, 2017 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Long-lived assets impairment charge | $ 128 | $ 956 | $ 10,551 | ||
Foley | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Consideration received on sale of disposal group | $ 9,100 | ||||
Foley | Other Income (Expense) | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Pre-tax gain (loss) on sale of disposal group recognized in other income (expense), net | 6,000 | ||||
U.S. Concrete and Steel Pressure | Water Pipe & Products | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Consideration received on sale of disposal group | $ 23,200 | ||||
Net working capital | 3,800 | ||||
Property, plant and equipment | 1,800 | ||||
U.S. Concrete and Steel Pressure | Water Pipe & Products | Disposal Group, Held-for-sale, Not Discontinued Operations | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Pre-tax loss on sale of disposal group | 50,900 | ||||
Long-lived assets impairment charge | 7,500 | ||||
U.S. Concrete and Steel Pressure | Water Pipe & Products | Other Income (Expense) | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Pre-tax gain (loss) on sale of disposal group recognized in other income (expense), net | $ (32,300) | ||||
U.S. Concrete and Steel Pressure | Water Pipe & Products | Customer relationships | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Finite-lived intangible assets | $ 800 | ||||
Foley | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Total purchase price | 37,200 | ||||
Net working capital | 10,984 | ||||
Property, plant and equipment | 9,221 | ||||
Foley | Customer relationships | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Finite-lived intangible assets | $ 2,100 |
Receivables, net (Details)
Receivables, net (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total receivables | $ 207,869 | $ 200,609 |
Less: Allowance for doubtful accounts | (2,068) | (2,141) |
Receivables, net | 205,801 | 198,468 |
Trade receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total receivables | 178,698 | 188,999 |
Amounts billed, but not yet paid under retainage provisions | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total receivables | 3,093 | 2,065 |
Other receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total receivables | $ 26,078 | $ 9,545 |
Receivables, net - Allowance Fo
Receivables, net - Allowance For Accounts Receivable Activity (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Beginning Balance | $ (2,141) | $ (4,033) | |
Recovery on doubtful accounts | (387) | 1,224 | $ (2,947) |
Write-offs and adjustments | 460 | 668 | |
Provision for doubtful accounts | (387) | ||
Ending Balance | $ (2,068) | $ (2,141) | $ (4,033) |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 161,440 | $ 193,603 |
Raw materials | 76,237 | 90,376 |
Work in process | 806 | 1,051 |
Total inventories | $ 238,483 | $ 285,030 |
Investment in equity method i_3
Investment in equity method investee - Additional Information (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Schedule of Equity Method Investments [Line Items] | ||
Investment in equity method investee | $ 50,034 | $ 50,607 |
Drainage Pipe & Products | ||
Schedule of Equity Method Investments [Line Items] | ||
Investment in equity method investee | $ 50,034 | 50,607 |
CP&P | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership percentage | 50.00% | |
CP&P | Drainage Pipe & Products | ||
Schedule of Equity Method Investments [Line Items] | ||
Investment in equity method investee | $ 50,000 | $ 50,600 |
Equity method investment, difference between carrying amount and underlying equity in net assets | $ 13,000 |
Investment in equity method i_4
Investment in equity method investee - Company's Distribution and Earnings in Equity Investment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Schedule of Equity Method Investments [Line Items] | |||
Distribution received from CP&P | $ (11,039) | $ (13,141) | $ (13,717) |
Share of earnings in CP&P | 10,466 | 10,162 | 12,360 |
CP&P | |||
Schedule of Equity Method Investments [Line Items] | |||
Distribution received from CP&P | (11,039) | (13,141) | (13,717) |
Share of earnings in CP&P | 10,538 | 10,234 | 12,432 |
Amortization of excess fair value of investment | $ (72) | $ (72) | $ (72) |
Investment in equity method i_5
Investment in equity method investee Selected Financial Data from the Investee (Details) - CP&P - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Schedule of Equity Method Investments [Line Items] | |||
Net sales | $ 136,430 | $ 125,744 | $ 137,458 |
Gross profit | 40,379 | 37,491 | 43,453 |
Income from operations | 20,899 | 19,729 | 25,346 |
Net income | $ 20,844 | $ 19,804 | $ 25,437 |
Property, plant and equipment_3
Property, plant and equipment, net (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment and right-of-use assets, gross | $ 676,347 | |
Total property, plant and equipment, gross | $ 649,110 | |
Less: accumulated depreciation property plant and equipment and right-of-use assets | (200,772) | |
Less: accumulated depreciation property, plant and equipment | (156,943) | |
Property, plant and equipment and right-of-use assets, net | 475,575 | |
Property, plant and equipment, net | 492,167 | |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment and right-of-use assets, gross | 398,127 | |
Total property, plant and equipment, gross | 373,881 | |
Land, buildings and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment and right-of-use assets, gross | 240,403 | |
Total property, plant and equipment, gross | 235,819 | |
Other equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment and right-of-use assets, gross | 8,660 | |
Total property, plant and equipment, gross | 6,962 | |
Construction-in-progress | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment and right-of-use assets, gross | $ 29,157 | |
Total property, plant and equipment, gross | $ 32,448 |
Property, plant and equipment_4
Property, plant and equipment, net - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 49,800 | $ 52,900 | $ 60,200 |
Property, Plant and Equipment [Line Items] | |||
Gross finance lease assets | 676,347 | ||
Accumulated depreciation of finance lease assets | 200,772 | ||
Impairment of property, plant and equipment to be disposed of | 100 | 1,000 | $ 7,500 |
Land and Building | |||
Property, Plant and Equipment [Line Items] | |||
Gross finance lease assets | 53,800 | ||
Gross assets recorded under capital leases | 52,100 | ||
Accumulated depreciation of finance lease assets | $ 3,800 | ||
Accumulated depreciation of assets recorded under capital leases | $ 1,000 |
Goodwill and other intangible_3
Goodwill and other intangible assets, net - Goodwill Roll Forward (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill [Roll Forward] | ||
Beginning Balance | $ 508,193 | $ 496,141 |
Acquisitions | 9,951 | |
Foreign currency and other adjustments | 633 | 2,101 |
Ending Balance | 508,826 | 508,193 |
Drainage Pipe & Products | ||
Goodwill [Roll Forward] | ||
Beginning Balance | 189,833 | 179,723 |
Acquisitions | 9,951 | |
Foreign currency and other adjustments | 633 | 159 |
Ending Balance | 190,466 | 189,833 |
Water Pipe & Products | ||
Goodwill [Roll Forward] | ||
Beginning Balance | 318,360 | 316,418 |
Acquisitions | 0 | |
Foreign currency and other adjustments | 0 | 1,942 |
Ending Balance | $ 318,360 | $ 318,360 |
Goodwill and other intangible_4
Goodwill and other intangible assets, net - Additional Information (Details) | Oct. 01, 2019USD ($) | Oct. 01, 2018USD ($) | Oct. 01, 2017USD ($) | Dec. 31, 2019USD ($)unit | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||
Number of reporting units with goodwill | unit | 3 | |||||
Goodwill impairment charge | $ 0 | $ 0 | $ 3,000,000 | |||
Amortization expense of intangible assets | $ 47,400,000 | $ 52,500,000 | $ 55,400,000 |
Goodwill and other intangible_5
Goodwill and other intangible assets, net - Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangibles, Accumulated amortization | $ (193,772) | $ (146,331) |
Intangible assets subject to amortization | 128,884 | |
Intangible assets, Gross carrying amount as of December 31 | 336,446 | 330,120 |
Intangible assets, Net carrying amount as of December 31 | $ 142,674 | 183,789 |
In-Process R&D | ||
Finite-Lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | $ 6,354 | |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived Intangibles, Weighted average amortization period (in years) | 10 years | 10 years |
Finite-lived intangibles, Gross carrying amount | $ 235,907 | $ 231,056 |
Finite-lived intangibles, Accumulated amortization | (135,038) | (99,583) |
Intangible assets subject to amortization | $ 100,869 | $ 131,473 |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived Intangibles, Weighted average amortization period (in years) | 10 years | 10 years |
Finite-lived intangibles, Gross carrying amount | $ 39,390 | $ 39,390 |
Finite-lived intangibles, Accumulated amortization | (19,764) | (14,867) |
Intangible assets subject to amortization | $ 19,626 | $ 24,523 |
Patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived Intangibles, Weighted average amortization period (in years) | 11 years | 11 years |
Finite-lived intangibles, Gross carrying amount | $ 23,629 | $ 23,629 |
Finite-lived intangibles, Accumulated amortization | (15,956) | (12,325) |
Intangible assets subject to amortization | $ 7,673 | $ 11,304 |
Customer backlog | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived Intangibles, Weighted average amortization period (in years) | 9 months | 9 months |
Finite-lived intangibles, Gross carrying amount | $ 13,209 | $ 13,206 |
Finite-lived intangibles, Accumulated amortization | (13,209) | (13,206) |
Intangible assets subject to amortization | $ 0 | $ 0 |
Non-compete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived Intangibles, Weighted average amortization period (in years) | 5 years | 5 years |
Finite-lived intangibles, Gross carrying amount | $ 17,090 | $ 15,618 |
Finite-lived intangibles, Accumulated amortization | (9,020) | (6,044) |
Intangible assets subject to amortization | $ 8,070 | $ 9,574 |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived Intangibles, Weighted average amortization period (in years) | 17 years | |
Finite-lived intangibles, Gross carrying amount | $ 6,354 | |
Finite-lived intangibles, Accumulated amortization | (374) | |
Intangible assets subject to amortization | $ 5,980 | |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived Intangibles, Weighted average amortization period (in years) | 10 years | 10 years |
Finite-lived intangibles, Gross carrying amount | $ 867 | $ 867 |
Finite-lived intangibles, Accumulated amortization | (411) | (306) |
Intangible assets subject to amortization | $ 456 | $ 561 |
Goodwill and other intangible_6
Goodwill and other intangible assets, net - Estimated Amortization Expense of Intangible Assets (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2020 | $ 41,286 |
2021 | 33,221 |
2022 | 23,984 |
2023 | 17,651 |
2024 | 12,742 |
Intangible assets subject to amortization | $ 128,884 |
Fair value measurement - Assets
Fair value measurement - Assets and Liabilities Measured on Recurring Basis (Details) - Recurring - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Non-current assets | ||
Derivative asset | $ 258 | $ 6,659 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Non-current assets | ||
Derivative asset | 0 | 0 |
Significant Other Observable Inputs (Level 2) | ||
Non-current assets | ||
Derivative asset | 258 | 6,659 |
Significant Unobservable Inputs (Level 3) | ||
Non-current assets | ||
Derivative asset | $ 0 | $ 0 |
Fair value measurement - Carryi
Fair value measurement - Carrying and Fair Value Measurements (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Carrying Amount | ||
Non-current liabilities | ||
Tax receivable agreement payable | $ 77,385 | $ 88,775 |
Carrying Amount | Senior Notes | ||
Non-current liabilities | ||
Term Loan | 1,098,303 | 1,188,605 |
Fair Value | ||
Non-current liabilities | ||
Tax receivable agreement payable | 47,625 | 51,832 |
Fair Value | Senior Notes | ||
Non-current liabilities | ||
Term Loan | 1,102,295 | 1,103,628 |
Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Non-current liabilities | ||
Tax receivable agreement payable | 0 | 0 |
Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Senior Notes | ||
Non-current liabilities | ||
Term Loan | 0 | 0 |
Fair Value | Significant Other Observable Inputs (Level 2) | ||
Non-current liabilities | ||
Tax receivable agreement payable | 0 | 0 |
Fair Value | Significant Other Observable Inputs (Level 2) | Senior Notes | ||
Non-current liabilities | ||
Term Loan | 1,102,295 | 1,103,628 |
Fair Value | Significant Unobservable Inputs (Level 3) | ||
Non-current liabilities | ||
Tax receivable agreement payable | 47,625 | 51,832 |
Fair Value | Significant Unobservable Inputs (Level 3) | Senior Notes | ||
Non-current liabilities | ||
Term Loan | $ 0 | $ 0 |
Accrued liabilities (Details)
Accrued liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Accrued payroll and employee benefits | $ 32,815 | $ 31,095 |
Short-term finance lease liabilities | 16,542 | |
Short-term capital leases | 16,430 | |
Short-term operating leases | 8,784 | |
Accrued taxes | 5,354 | 11,489 |
Accrued rebates | 9,895 | 3,542 |
Warranty | 5,536 | 3,251 |
Environmental obligation | 718 | 570 |
Other miscellaneous accrued liabilities | 9,195 | 3,859 |
Total accrued liabilities | $ 88,839 | $ 70,236 |
Debt and deferred financing c_3
Debt and deferred financing costs - Schedule of Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Oct. 25, 2016 |
Debt Instrument [Line Items] | |||
Total debt | $ 1,098,303 | $ 1,188,605 | |
Less: current portion debt | (12,510) | (12,510) | |
Total long-term debt | 1,085,793 | 1,176,095 | |
Debt issue costs and original issue discount | 25,100 | ||
Senior Term Loan | |||
Debt Instrument [Line Items] | |||
Total debt | $ 1,050,000 | ||
Senior Term Loan | 2016 Senior Term Loan | |||
Debt Instrument [Line Items] | |||
Total debt | 1,098,303 | 1,188,605 | $ 1,050,000 |
Debt issue costs and original issue discount | $ 25,055 | $ 34,252 |
Debt and deferred financing c_4
Debt and deferred financing costs - Additional Information (Details) - USD ($) | May 01, 2017 | Oct. 25, 2016 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | |||||
Debt obligations | $ 1,098,303,000 | $ 1,188,605,000 | |||
Proceeds from debt | 0 | 0 | $ 200,000,000 | ||
Proceeds from revolver | 54,000,000 | 0 | 194,000,000 | ||
Gain on extinguishment of debt | 1,708,000 | 0 | $ 0 | ||
2016 Senior Term Loan | London Interbank Offered Rate (LIBOR) | |||||
Debt Instrument [Line Items] | |||||
Margin rate | 3.00% | 3.50% | |||
Senior Term Loan | |||||
Debt Instrument [Line Items] | |||||
Debt obligations | $ 1,050,000,000 | ||||
Line of credit facility, accordion feature, increase limit | 285,000,000 | ||||
Senior Term Loan | 2016 Senior Term Loan | |||||
Debt Instrument [Line Items] | |||||
Debt obligations | $ 1,050,000,000 | 1,098,303,000 | $ 1,188,605,000 | ||
Debt instrument, amortization percentage | 0.25% | ||||
Repayment of term loan | 87,000,000 | ||||
Value of repurchased face amount of term loan | 83,200,000 | ||||
Write-off of debt discount and issuance costs | 2,100,000 | ||||
Gain on extinguishment of debt | $ 1,700,000 | ||||
Senior Term Loan | 2016 Senior Term Loan | London Interbank Offered Rate (LIBOR) | |||||
Debt Instrument [Line Items] | |||||
Interest rate, floor percentage | 1.00% | ||||
Senior Term Loan | 2016 Senior Term Loan | Base Rate | |||||
Debt Instrument [Line Items] | |||||
Margin rate | 2.00% | ||||
Senior Term Loan | 2016 Senior Term Loan | LIBOR or CDOR | Canada | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, collateral covenant, percentage of voting stock, maximum | 65.00% | ||||
Line of Credit | Revolving Credit Facility | Minimum | |||||
Debt Instrument [Line Items] | |||||
Facility fee | 0.20% | ||||
Line of Credit | Revolving Credit Facility | Maximum | |||||
Debt Instrument [Line Items] | |||||
Facility fee | 0.325% | ||||
Line of Credit | 2016 Revolver | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | $ 300,000,000 | ||||
Line of credit facility, accordion feature, increase limit | 100,000,000 | ||||
Weighted average annual interest rate | 5.20% | 5.00% | |||
Line of credit facility, maximum borrowing capacity, accordion feature, increase limit | $ 50,000,000 | ||||
Debt instrument, borrowing base limitation, sum of eligible cash, maximum | 100.00% | ||||
Debt instrument, borrowing base limitation, eligible accounts receivable, maximum | 85.00% | ||||
Debt instrument, borrowing base limitation, eligible inventory, maximum | 75.00% | ||||
Debt instrument, borrowing base limitation, orderly liquidation value of eligible inventory, maximum | 85.00% | ||||
Debt instrument, borrowing base limitation, eligible accounts receivable and inventory, accordion feature, maximum | 2.50% | ||||
Revolver, outstanding borrowings | $ 0 | ||||
Weighted average interest rate | 3.72% | ||||
Fixed charge coverage ratio | 1 | ||||
Line of Credit | 2016 Revolver | Revolving Credit Facility | Canada | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | $ 20,000,000 | ||||
Line of Credit | 2016 Revolver | Revolving Credit Facility | United States | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | $ 280,000,000 | ||||
Line of Credit | 2016 Revolver | Revolving Credit Facility | LIBOR or CDOR | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, collateral covenant, percentage of voting stock, maximum | 65.00% | ||||
Line of Credit | 2016 Revolver | Revolving Credit Facility | LIBOR or CDOR | Minimum | |||||
Debt Instrument [Line Items] | |||||
Margin rate | 1.25% | ||||
Line of Credit | 2016 Revolver | Revolving Credit Facility | LIBOR or CDOR | Maximum | |||||
Debt Instrument [Line Items] | |||||
Margin rate | 1.75% | ||||
Line of Credit | 2016 Revolver | Revolving Credit Facility | Base Rate, Canadian Prime Rate or Canadian Base Rate | Minimum | |||||
Debt Instrument [Line Items] | |||||
Margin rate | 0.25% | ||||
Line of Credit | 2016 Revolver | Revolving Credit Facility | Base Rate, Canadian Prime Rate or Canadian Base Rate | Maximum | |||||
Debt Instrument [Line Items] | |||||
Margin rate | 0.75% | ||||
Line of Credit | 2016 Senior Term Loan | |||||
Debt Instrument [Line Items] | |||||
Proceeds from debt | $ 200,000,000 | ||||
Debt interest rate reduction on effective percentage | 0.50% | ||||
Proceeds from revolver | $ 196,800,000 | ||||
Line of Credit | 2015 Revolver | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Letters of credit outstanding | $ 16,000,000 | ||||
Allowable borrowing base | $ 257,700,000 |
Debt and deferred financing c_5
Debt and deferred financing costs - Future Minimum Principal Payments (Details) - 2016 Senior Term Loan $ in Thousands | Dec. 31, 2019USD ($) |
Debt Instrument [Line Items] | |
2020 | $ 12,510 |
2021 | 12,510 |
2022 | 12,510 |
2023 | 1,085,828 |
Total | $ 1,123,358 |
Other long-term liabilities (De
Other long-term liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Other Liabilities Disclosure [Abstract] | ||
Workers' compensation | $ 9,023 | $ 9,837 |
Deferred rent | 0 | 4,259 |
Employee benefits | 2,945 | 3,307 |
Insurance | 1,345 | 1,550 |
Environmental remediation liability | 872 | 1,001 |
Other miscellaneous long-term liabilities | 7,721 | 2,713 |
Other long term liabilities | $ 21,906 | $ 22,667 |
Derivatives and hedging - Addit
Derivatives and hedging - Additional Information (Details) - USD ($) | Feb. 09, 2017 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Derivative [Line Items] | |||||
Cash outlay of net investment hedges | $ 0 | $ 4,990,000 | $ 0 | ||
Ineffectiveness related to net investment hedges | $ 0 | $ 0 | |||
Foreign exchange forward contracts | Designated as Hedging Instrument | |||||
Derivative [Line Items] | |||||
Cash outlay of net investment hedges | $ 5,000,000 | ||||
Interest rate swaps | Not Designated as Hedging Instrument | |||||
Derivative [Line Items] | |||||
Derivative notional amount | $ 525,000,000 | ||||
Derivative, fixed Interest rate to pay interest | 1.52% | ||||
Derivative, term of contract | 3 years |
Derivatives and hedging - Fair
Derivatives and hedging - Fair Values of Derivative Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Derivative Assets | ||
Derivative assets fair value | $ 258 | $ 6,659 |
Derivative assets, legally enforceable master netting arrangements | 0 | 0 |
Derivative assets, net | 258 | 6,659 |
Derivative Liabilities | ||
Derivative liability, fair value, gross liability | 0 | 0 |
Derivative liability, collateral, right to reclaim cash | 0 | 0 |
Derivative liability, net | 0 | 0 |
Interest rate swaps | ||
Derivative Assets | ||
Derivative assets, notional amount | 525,000 | 525,000 |
Derivative assets fair value | 258 | 6,659 |
Derivative Liabilities | ||
Derivative liability, notional amount | 0 | 0 |
Derivative liability, fair value, gross liability | $ 0 | $ 0 |
Derivatives and hedging - Effec
Derivatives and hedging - Effect on Statements of Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Designated as Hedging Instrument | Net Investment Hedging | Foreign exchange forward contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain on derivatives recognized in Accumulated other comprehensive loss | $ 0 | $ 970 |
Not Designated as Hedging Instrument | Interest rate swaps | Interest Expense | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) on derivatives not designated as hedges in other operating income (expense) | $ (6,401) | $ 1,408 |
Leases - Additional Information
Leases - Additional Information (Details) | Dec. 31, 2019renewal_option |
Lessee, Lease, Description [Line Items] | |
Initial term of finance leases | 25 years |
Number of renewal options of finance leases | 1 |
Renewal term of finance leases | 10 years |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Initial term of operating leases | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Initial term of operating leases | 25 years |
Renewal term of operating leases | 10 years |
Leases - Components of Lease Ex
Leases - Components of Lease Expense (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating lease cost | $ 16,464 |
Finance lease cost | |
Amortization of leased assets | 2,276 |
Interest on lease liabilities | $ 18,528 |
Leases - Lease Term and Discoun
Leases - Lease Term and Discount Rate (Details) | Dec. 31, 2019 |
Leases [Abstract] | |
Operating leases | 15 years 6 months |
Finance leases | 33 years 1 month |
Operating leases | 12.60% |
Finance leases | 12.30% |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Cash paid for amounts included in lease liabilities | |
Operating cash flows related to operating leases | $ 14,945 |
Operating cash flows related to finance leases | 16,090 |
Financing cash flows related to finance leases | 583 |
Leased assets obtained in exchange for new finance lease liabilities | 180 |
Leased assets obtained in exchange for new operating lease liabilities | $ 4,925 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Operating leases | |
Right of use assets | $ 60,253 |
Operating lease liabilities - current portion | (8,784) |
Operating lease liabilities - long term portion | (54,411) |
Finance leases | |
Finance lease assets | 49,999 |
Finance lease liabilities - current portion | (16,542) |
Finance lease liabilities - long term portion | $ (137,365) |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Operating leases | |
2020 | $ 13,766 |
2021 | 11,371 |
2022 | 10,500 |
2023 | 10,247 |
2024 | 9,561 |
Thereafter | 109,610 |
Total lease payments | 165,055 |
Less: imputed interest | (101,860) |
Present value of lease liabilities | 63,195 |
Finance leases | |
2020 | 16,894 |
2021 | 17,049 |
2022 | 17,300 |
2023 | 17,516 |
2024 | 17,841 |
Thereafter | 652,367 |
Total lease payments | 738,967 |
Less: imputed interest | (585,060) |
Present value of lease liabilities | 153,907 |
Total | |
2020 | 30,660 |
2021 | 28,420 |
2022 | 27,800 |
2023 | 27,763 |
2024 | 27,402 |
Thereafter | 761,977 |
Total lease payments | 904,022 |
Less: imputed interest | (686,920) |
Present value of lease liabilities | $ 217,102 |
Sale-leaseback transaction (Det
Sale-leaseback transaction (Details) $ in Millions, $ in Millions | Jun. 05, 2018USD ($)property | Jun. 05, 2018CAD ($) | Apr. 30, 2016USD ($)property | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Jun. 05, 2018CAD ($)property |
Cost of Good Sold | ||||||
Sale Leaseback Transaction [Line Items] | ||||||
Sale leaseback transaction, rent expense | $ 10 | $ 20.9 | ||||
2016 Sale-leaseback Transaction | ||||||
Sale Leaseback Transaction [Line Items] | ||||||
Number of properties sold | property | 49 | |||||
Sale leaseback transaction, lease term | P20Y | |||||
Number of renewal options | 1 | |||||
Sale leaseback transaction, lease renewal term | 9 years 11 months | |||||
Deferred gain, total | $ 81.5 | |||||
Carrying value of deferred gains | $ 35 | |||||
Deferred rent reclassified to reduce carrying value of assets | 3.1 | |||||
Deferred costs reclassified to reduce carrying value of assets | 2.4 | |||||
Exchange Transaction | ||||||
Sale Leaseback Transaction [Line Items] | ||||||
Deferred gain, total | $ 67.3 | |||||
Number of properties under lease agreements | property | 24 | 24 | ||||
Fair value of assets exchanged back | $ 86.1 | |||||
Sale leaseback transaction, transaction costs | 2.7 | |||||
Carrying value of deferred gains | 100 | |||||
Deferred rent reclassified to reduce carrying value of assets | 3.8 | |||||
Deferred costs reclassified to reduce carrying value of assets | 5.7 | |||||
Capital lease obligations | $ 149 | |||||
Exchange Transaction | United States | ||||||
Sale Leaseback Transaction [Line Items] | ||||||
Number of renewal options | 1 | 1 | ||||
Number of properties under lease agreements | property | 26 | 26 | ||||
Term of contract | 25 years | 25 years | ||||
Lease renewal term | 9 years 11 months | 9 years 11 months | ||||
Annual rental payments | $ 17.1 | |||||
Exchange Transaction | United States | Minimum | ||||||
Sale Leaseback Transaction [Line Items] | ||||||
Sale leaseback transaction, rent escalation percentage | 2.00% | 2.00% | ||||
Rent escalation, percentage of fair market value of properties for first year after extension | 95.00% | 95.00% | ||||
Rent escalation, percentage of prior year's base rent for first year after extension | 102.00% | 102.00% | ||||
Exchange Transaction | United States | Maximum | ||||||
Sale Leaseback Transaction [Line Items] | ||||||
Sale leaseback transaction, rent escalation percentage | 4.00% | 4.00% | ||||
Exchange Transaction | Canada | ||||||
Sale Leaseback Transaction [Line Items] | ||||||
Number of renewal options | 1 | 1 | ||||
Number of properties under lease agreements | property | 2 | 2 | ||||
Term of contract | 25 years | 25 years | ||||
Lease renewal term | 9 years 11 months | 9 years 11 months | ||||
Annual rental payments | $ 1.2 | |||||
Exchange Transaction | Obligations Under Leaseback Transactions | Canada | ||||||
Sale Leaseback Transaction [Line Items] | ||||||
Aggregate contingent liability for obligations under leaseback transaction | $ 5 | $ 6.4 | ||||
Exchange Transaction | Capital Lease Obligations | Valuation Technique, Discounted Cash Flow | Measurement Input, Discount Rate | United States | ||||||
Sale Leaseback Transaction [Line Items] | ||||||
Debt instrument measurement input | 0.1233 | 0.1233 | ||||
Exchange Transaction | Drainage Pipe & Products | ||||||
Sale Leaseback Transaction [Line Items] | ||||||
Number of properties exchanged | property | 21 | 21 | ||||
Exchange Transaction | Drainage Pipe & Products and Water Pipe & Products | ||||||
Sale Leaseback Transaction [Line Items] | ||||||
Number of properties exchanged | property | 1 | 1 | ||||
Exchange Transaction | Water Pipe & Products | Canada | ||||||
Sale Leaseback Transaction [Line Items] | ||||||
Number of properties exchanged | property | 3 | 3 |
Commitments and contingencies (
Commitments and contingencies (Details) | Nov. 30, 2018plaintiff | Aug. 14, 2017plaintiff | Oct. 05, 2016USD ($) | Dec. 31, 2016 | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Mar. 13, 2015USD ($) |
LTIP | |||||||
Loss Contingencies [Line Items] | |||||||
Amount accrued for long-term incentive plan | $ 0 | ||||||
Payments for long-term incentive plan | 0 | ||||||
Lone Star | Affiliated Entities | |||||||
Loss Contingencies [Line Items] | |||||||
Certain covered tax benefits paid by related party, percentage | 85.00% | ||||||
Change in tax receivable agreement liability | 46,200,000 | ||||||
Accrued liabilities related to tax receivable agreement | 77,400,000 | $ 88,800,000 | |||||
Payments of tax receivable agreement liability | 11,390,000 | $ 30,400,000 | |||||
Earnout Dispute | Pending Litigation | |||||||
Loss Contingencies [Line Items] | |||||||
Loss contingency, damages sought | $ 100,000,000 | ||||||
Loss contingency liability | $ 0 | ||||||
Securities Actions and Derivatives Actions | |||||||
Loss Contingencies [Line Items] | |||||||
Loss contingency, number of plaintiffs | plaintiff | 2 | 4 | |||||
HeidelbergCement Hanson Building Products | |||||||
Loss Contingencies [Line Items] | |||||||
Business acquisition, possible maximum earn out | $ 100,000,000 |
Earnings per share - Calculatio
Earnings per share - Calculation of Basic and Diluted EPS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||||||||
Net loss | $ (7,676) | $ 22,430 | $ 2,954 | $ (25,039) | $ (16,952) | $ 5,503 | $ 6,994 | $ (19,910) | $ (7,331) | $ (24,365) | $ (2,060) |
Common stock: | |||||||||||
Weighted average basic shares outstanding (in shares) | 64,232 | 63,904 | 63,801 | ||||||||
Weighted average diluted shares outstanding (in shares) | 64,232 | 63,904 | 63,801 | ||||||||
Basic and Diluted earnings (loss) per share: | |||||||||||
Net (loss) (in usd per share) | $ (0.11) | $ (0.38) | $ (0.03) | ||||||||
Stock options | |||||||||||
Common stock: | |||||||||||
Effect of dilutive securities - stock options (in shares) | 0 | 0 | 0 |
Earnings per share - Additional
Earnings per share - Additional Information (Details) - shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Stock options and restricted shares | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of diluted earnings per share (in shares) | 2,192,048 | 2,749,348 | 209,607 |
Employee benefit plans (Details
Employee benefit plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |||
Defined contribution plan, cost recognized | $ 7 | $ 6.6 | $ 11.3 |
Stock-based plans - Additional
Stock-based plans - Additional Information (Details) - USD ($) $ in Millions | Oct. 19, 2016 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Oct. 17, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 7.9 | $ 6.2 | $ 3.7 | ||
Unrecognized compensation expense on stock options | $ 3.5 | ||||
Stock options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Period for recognition of nonvested awards | 1 year 8 months 1 day | ||||
Restricted Stock and Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Period for recognition of nonvested awards | 1 year 9 months 18 days | ||||
Unrecognized compensation expense on restricted stocks | $ 7.4 | ||||
Number of awards granted (in shares) | 2,562,250 | 542,979 | |||
Restricted Stock and Restricted Stock Units | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based incentive plan award vesting period | 1 year | ||||
Restricted Stock and Restricted Stock Units | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based incentive plan award vesting period | 4 years | ||||
Restricted Stock and Restricted Stock Units | Employees | Three year vesting | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based incentive plan award vesting period | 3 years | ||||
Restricted Stock and Restricted Stock Units | Employees | Four year vesting | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based incentive plan award vesting period | 4 years | ||||
Restricted Stock and Restricted Stock Units | Independent Directors | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based incentive plan award vesting period | 1 year | ||||
Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of awards granted (in shares) | 2,600,000 | ||||
Time-vested Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of awards granted (in shares) | 1,200,000 | ||||
Performance-based Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of awards granted (in shares) | 1,400,000 | ||||
Day volume weighted average price trading period | 20 days | ||||
Performance-based Restricted Stock Units | Vesting immediately | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting percentage | 25.00% | ||||
Performance-based Restricted Stock Units | Vesting one year after performance conditions are met | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based incentive plan award vesting period | 1 year | ||||
Award vesting percentage | 75.00% | ||||
2016 Stock Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares authorized for issuance (in shares) | 5,000,000 | ||||
Term of share-based incentive plan | 10 years | ||||
2016 Stock Incentive Plan | Stock options | Employees | Three year vesting | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based incentive plan award vesting period | 3 years | ||||
2016 Stock Incentive Plan | Stock options | Employees | Four year vesting | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based incentive plan award vesting period | 4 years | ||||
2016 Stock Incentive Plan | Stock options | Independent Directors | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based incentive plan award vesting period | 1 year | ||||
2018 Stock Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares authorized for issuance (in shares) | 5,000,000 |
Stock-based plans - Weighted Av
Stock-based plans - Weighted Average Assumptions in Estimating Fair Value of Options (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Payment Arrangement [Abstract] | |||
Expected dividends | 0.00% | 0.00% | 0.00% |
Expected volatility | 32.08% | 32.90% | 39.60% |
Risk-free interest rate | 2.43% | 1.71% | 0.86% |
Expected lives in years | 6 years | 6 years | 6 years |
Weighted-average fair value of options: | |||
Granted at fair value (in usd per share) | $ 1.54 | $ 2.76 | $ 4.16 |
Weighted Average Exercise Price | |||
Granted at fair value (in usd per share) | $ 4.29 | $ 7.92 | $ 10.76 |
Stock-based plans - Stock Optio
Stock-based plans - Stock Options Activity (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Shares | |||
Outstanding, beginning of year (in shares) | 3,101,419 | 1,254,429 | |
Granted (in shares) | 2,771,930 | 2,189,216 | |
Exercised (in shares) | (224,266) | 0 | |
Forfeited (in shares) | (1,975,987) | (342,226) | |
Outstanding, end of year (in shares) | 3,673,096 | 3,101,419 | 1,254,429 |
Options vested or expected to vest at year end (in shares) | 3,673,096 | ||
Options exercisable at year end (in shares) | 927,863 | ||
Weighted Average Exercise Price | |||
Outstanding, beginning of year (in usd per share) | $ 9.19 | $ 12.31 | |
Granted (in usd per share) | 4.29 | 7.92 | $ 10.76 |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price | 7.60 | ||
Forfeited (in usd per share) | 7.50 | 12.53 | |
Outstanding, end of year (in usd per share) | 6.50 | $ 9.19 | $ 12.31 |
Options vested or expected to vest at year end (in usd per share) | 6.50 | ||
Options exercisable at year end (in usd per share) | $ 8.81 |
Stock-based plans - Restricted
Stock-based plans - Restricted Stock and Restricted Stock Unit Awards Activity (Details) - Restricted Stock and Restricted Stock Units - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Shares | ||
Unvested balance, beginning of year (in shares) | 744,363 | 441,350 |
Grants (in shares) | 2,562,250 | 542,979 |
Vested (in shares) | (508,799) | (155,260) |
Forfeitures (in shares) | (640,172) | (84,706) |
Unvested balance, end of year (in shares) | 2,157,642 | 744,363 |
Weighted Average Grant Date Fair Value | ||
Unvested balance, beginning of year (in usd per share) | $ 9.68 | $ 13.60 |
Grants (in usd per share) | 4.58 | 7.98 |
Vested (in usd per share) | 7.74 | 13.11 |
Forfeitures (in usd per share) | 6.21 | 12.98 |
Unvested balance, end of year (in usd per share) | $ 5.11 | $ 9.68 |
Income taxes - Additional Infor
Income taxes - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2017 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Provisional amount recorded for the reduction in net deferred tax liabilities due to changes in tax rate | $ 28,700,000 | ||
Recognition of one-time transition tax on foreign earnings | $ 1,700,000 | ||
Decrease in allowance for deferred tax assets | $ 2,000,000 | ||
Liability for uncertain tax positions | $ 0 | $ 0 |
Income taxes - Income (loss) fr
Income taxes - Income (loss) from continuing operations before income taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||||||||||
U.S. companies | $ (21,557) | $ (36,317) | $ (54,690) | ||||||||
Foreign companies | 10,947 | 15,037 | 11,958 | ||||||||
Loss before income taxes | $ (10,436) | $ 28,327 | $ 3,835 | $ (32,336) | $ (20,218) | $ 8,296 | $ 14,237 | $ (23,595) | $ (10,610) | $ (21,280) | $ (42,732) |
Income taxes - Income tax (expe
Income taxes - Income tax (expense) benefit from continuing operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Current income tax | |||
U.S. companies | $ (9,510) | $ (13,225) | $ 21,539 |
State | (4,260) | (5,779) | (1,479) |
Foreign companies | (3,018) | (4,849) | (4,884) |
Total current tax (expense) benefit | (16,788) | (23,853) | 15,176 |
Deferred income tax | |||
U.S. companies | 16,180 | 17,273 | 26,866 |
State | 4,232 | 3,306 | (1,658) |
Foreign companies | (345) | 189 | 288 |
Total deferred tax (expense) benefit | 20,067 | 20,768 | 25,496 |
Income tax (expense) benefit - continuing operations | $ 3,279 | $ (3,085) | $ 40,672 |
Income taxes - Tax rate reconci
Income taxes - Tax rate reconciliation from continuing operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||||||||||
U.S. Federal statutory tax rate | 21.00% | 35.00% | 35.00% | ||||||||
Loss from continuing operations | $ (10,436) | $ 28,327 | $ 3,835 | $ (32,336) | $ (20,218) | $ 8,296 | $ 14,237 | $ (23,595) | $ (10,610) | $ (21,280) | $ (42,732) |
Income tax benefit at statutory rate of 21% and 35% | 2,228 | 4,469 | 14,956 | ||||||||
State income taxes, net of federal benefit | 113 | 1,494 | 1,470 | ||||||||
Foreign rate differential | (361) | (568) | 1,586 | ||||||||
Non-deductible executive compensation | (1,011) | (129) | 0 | ||||||||
Tax effect of equity compensation | (496) | (310) | (13) | ||||||||
M&E and other non-deductible expenses | (763) | (452) | (1,220) | ||||||||
Change in valuation allowance | 1,927 | (6,601) | (4,141) | ||||||||
Divestiture of assets | 0 | (1,559) | 0 | ||||||||
Goodwill impairment | 0 | 0 | (1,147) | ||||||||
Effect of TCJA | 0 | 0 | 26,932 | ||||||||
Net US tax cost on foreign income | (221) | (390) | 0 | ||||||||
Tax credits | 552 | 390 | 497 | ||||||||
Other prior year adjustments | 1,311 | 571 | 1,752 | ||||||||
Income tax (expense) benefit - continuing operations | $ 3,279 | $ (3,085) | $ 40,672 |
Income taxes - Deferred tax ass
Income taxes - Deferred tax assets (liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets: | ||
Inventory | $ 6,891 | $ 6,424 |
Reserves | 4,112 | 2,263 |
Accrued liabilities | 4,656 | 4,347 |
Net operating losses | 2,964 | 3,243 |
Capitalized transaction costs | 3,599 | 3,407 |
Finance leases | 55,063 | 39,512 |
Deferred gain on sale-leaseback | 0 | 2,521 |
Interest expense limitation | 6,566 | 2,780 |
Tax receivable agreement | 1,655 | 1,645 |
Other assets | 4,687 | 1,110 |
Total deferred tax assets | 90,193 | 67,252 |
Valuation allowance | (13,555) | (15,427) |
Total deferred tax assets, net | 76,638 | 51,825 |
Deferred tax liabilities: | ||
Fixed assets | (53,156) | (50,686) |
Lease assets | (25,378) | (11,543) |
Deferred financing costs | (6,812) | (8,631) |
Intangible assets | (20,221) | (27,580) |
Total deferred tax liabilities | (105,567) | (98,440) |
Net deferred tax asset (liability) | $ (28,929) | $ (46,615) |
Income taxes - Net operating lo
Income taxes - Net operating losses (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Federal net operating losses | |
Income Tax Contingency [Line Items] | |
Amount | $ 0 |
State net operating losses | |
Income Tax Contingency [Line Items] | |
Amount | 29,048 |
Foreign net operating losses | |
Income Tax Contingency [Line Items] | |
Amount | $ 5,848 |
Segment reporting (Details)
Segment reporting (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2019USD ($)geographic_area | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Segment Reporting Information [Line Items] | |||||||||||
Number of geographic areas | geographic_area | 3 | ||||||||||
Net sales | $ 363,149 | $ 464,526 | $ 410,219 | $ 291,858 | $ 339,155 | $ 434,510 | $ 416,087 | $ 289,960 | $ 1,529,752 | $ 1,479,712 | $ 1,580,413 |
Depreciation and amortization | 97,258 | 105,423 | 115,659 | ||||||||
Interest expense | (94,970) | (78,337) | (59,408) | ||||||||
Loss before income taxes | (10,436) | $ 28,327 | $ 3,835 | $ (32,336) | (20,218) | $ 8,296 | $ 14,237 | $ (23,595) | (10,610) | (21,280) | (42,732) |
Capital expenditures | 39,873 | 48,681 | |||||||||
Total assets | 1,740,058 | 1,793,252 | 1,740,058 | 1,793,252 | |||||||
Earnings from equity method investee | 10,466 | 10,162 | 12,360 | ||||||||
Investment in equity method investee | 50,034 | 50,607 | 50,034 | 50,607 | |||||||
Property, plant and equipment and right-of-use assets, net | 475,575 | 475,575 | |||||||||
Property, plant and equipment, net | 492,167 | 492,167 | |||||||||
United States | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 1,448,492 | 1,389,115 | 1,485,092 | ||||||||
Property, plant and equipment and right-of-use assets, net | 422,486 | 422,486 | |||||||||
Property, plant and equipment, net | 441,773 | 441,773 | |||||||||
Canada | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 73,270 | 80,868 | 82,529 | ||||||||
Property, plant and equipment and right-of-use assets, net | 43,754 | 43,754 | |||||||||
Property, plant and equipment, net | 40,331 | 40,331 | |||||||||
Mexico | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 7,990 | 9,729 | 12,792 | ||||||||
Property, plant and equipment and right-of-use assets, net | 9,335 | 9,335 | |||||||||
Property, plant and equipment, net | 10,063 | 10,063 | |||||||||
Drainage Pipe & Products | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Earnings from equity method investee | 10,500 | 10,200 | 12,400 | ||||||||
Investment in equity method investee | 50,034 | 50,607 | 50,034 | 50,607 | |||||||
Operating segments | Drainage Pipe & Products | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 894,722 | 811,477 | 834,810 | ||||||||
Depreciation and amortization | 37,331 | 41,495 | 45,750 | ||||||||
EBITDA | 171,413 | 156,735 | 129,618 | ||||||||
Capital expenditures | 23,096 | 27,761 | |||||||||
Total assets | 819,373 | 800,454 | 819,373 | 800,454 | |||||||
Operating segments | Water Pipe & Products | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 635,030 | 668,235 | 745,555 | ||||||||
Depreciation and amortization | 58,476 | 62,917 | 69,089 | ||||||||
EBITDA | 84,424 | 64,547 | 47,587 | ||||||||
Capital expenditures | 14,246 | 18,529 | |||||||||
Total assets | 862,542 | 922,162 | 862,542 | 922,162 | |||||||
Corporate and Other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 0 | 0 | 48 | ||||||||
Depreciation and amortization | 1,451 | 1,011 | 820 | ||||||||
EBITDA | (74,219) | (58,802) | $ (44,870) | ||||||||
Capital expenditures | 2,531 | 2,391 | |||||||||
Total assets | $ 58,143 | $ 70,636 | $ 58,143 | $ 70,636 |
Related party transactions (Det
Related party transactions (Details) - Affiliated Entities - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Lone Star | ||||
Related Party Transaction [Line Items] | ||||
Certain covered tax benefits paid by related party, percentage | 85.00% | |||
CP&P | ||||
Related Party Transaction [Line Items] | ||||
Sales to related party | $ 400 | $ 100 | $ 100 | |
Purchases from related party | 500 | 200 | $ 100 | |
Bricks Joint Venture | Transition Service Agreement | ||||
Related Party Transaction [Line Items] | ||||
Proceeds from affiliates, collection of transition service agreement | 10 | $ 1,600 | ||
Net receivable due from affiliate | $ 4,400 |
Quarterly financial data (una_3
Quarterly financial data (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Net sales | $ 363,149 | $ 464,526 | $ 410,219 | $ 291,858 | $ 339,155 | $ 434,510 | $ 416,087 | $ 289,960 | $ 1,529,752 | $ 1,479,712 | $ 1,580,413 |
Cost of goods sold | 296,550 | 362,362 | 324,405 | 250,053 | 280,400 | 357,374 | 340,774 | 255,595 | 1,233,370 | 1,234,143 | 1,327,305 |
Gross profit | 66,599 | 102,164 | 85,814 | 41,805 | 58,755 | 77,136 | 75,313 | 34,365 | 296,382 | 245,569 | 253,108 |
Income (loss) from continuing operations before taxes | (10,436) | 28,327 | 3,835 | (32,336) | (20,218) | 8,296 | 14,237 | (23,595) | (10,610) | (21,280) | (42,732) |
Net loss | $ (7,676) | $ 22,430 | $ 2,954 | $ (25,039) | $ (16,952) | $ 5,503 | $ 6,994 | $ (19,910) | $ (7,331) | $ (24,365) | $ (2,060) |
Basic earnings (loss) per share: | |||||||||||
Net income (loss) (in usd per share) | $ (0.12) | $ 0.35 | $ 0.05 | $ (0.39) | $ (0.27) | $ 0.09 | $ 0.11 | $ (0.31) | |||
Diluted earnings (loss) per share: | |||||||||||
Net income (loss) (in usd per share) | $ (0.12) | $ 0.34 | $ 0.05 | $ (0.39) | $ (0.27) | $ 0.09 | $ 0.11 | $ (0.31) |
Supplemental cash flow disclo_3
Supplemental cash flow disclosures (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
SUPPLEMENTAL DISCLOSURES (in thousands): | |||
Cash interest paid | $ 77,086 | $ 69,381 | $ 54,676 |
Income taxes paid, net of refunds received | 12,343 | 11,068 | 28,086 |
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING DISCLOSURES: | |||
Assets and liabilities acquired in non-cash exchange | 0 | 18,140 | 0 |
Capital lease obligation resulting from the sale-leaseback exchange transaction | 0 | (148,962) | 0 |
Fair value changes of derivatives recorded in OCI, net of tax | $ 0 | $ 970 | $ (3,548) |