Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2020 | May 08, 2020 | |
Cover [Abstract] | ||
Entity Registrant Name | FOUNDATION BUILDING MATERIALS, INC. | |
Entity Central Index Key | 0001688941 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock Shares Outstanding (in shares) | 43,202,787 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Entity Current Reporting Status | Yes | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Shell Company | false | |
Entity Interactive Data Current | Yes | |
Document Quarterly Report | true | |
City Area Code | 714 | |
Local Phone Number | 380-3127 | |
Entity File Number | 001-38009 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 81-4259606 | |
Entity Address, Address Line One | 2520 Red Hill Avenue | |
Entity Address, City or Town | Santa Ana | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92705 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | FBM | |
Security Exchange Name | NYSE | |
Document Transition Report | false |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
Net sales | $ 524,258 | $ 514,872 |
Cost of goods sold | 362,100 | 361,912 |
Gross profit | 162,158 | 152,960 |
Operating expenses: | ||
Selling, general and administrative expenses | 123,097 | 117,230 |
Depreciation and amortization | 19,219 | 20,342 |
Total operating expenses | 142,316 | 137,572 |
Income from operations | 19,842 | 15,388 |
Interest expense | (7,733) | (8,556) |
Gain on legal settlement | 8,556 | 0 |
Other (expense) income, net | (1,022) | 41 |
Income before income taxes | 19,643 | 6,873 |
Income tax expense | 5,267 | 2,045 |
Net income from continuing operations | 14,376 | 4,828 |
Loss on sale of discontinued operations, net of tax | 0 | (1,346) |
Net income | $ 14,376 | $ 3,482 |
Earnings Per Share, Basic and Diluted [Abstract] | ||
Earnings from continuing operations per share - basic | $ 0.33 | $ 0.11 |
Earnings from continuing operations per share - diluted | 0.33 | 0.11 |
Loss from discontinued operations per share - basic (in dollars per share) | 0 | (0.03) |
Loss from discontinued operations per share - diluted (in dollars per share) | 0 | (0.03) |
Earnings per share - basic (in dollars per share) | 0.33 | 0.08 |
Earnings per share - diluted (in dollars per share) | $ 0.33 | $ 0.08 |
Weighted average shares outstanding: | ||
Basic (in shares) | 43,045,692 | 42,932,024 |
Diluted (in shares) | 43,542,819 | 42,944,829 |
Comprehensive income: | ||
Net income | $ 14,376 | $ 3,482 |
Foreign currency translation adjustment | (7,043) | 1,570 |
Unrealized loss on derivatives, net of taxes of $0.2 million and $1.3 million, respectively | (499) | |
Unrealized loss on derivatives, net of taxes of $0.2 million and $1.3 million, respectively | (3,496) | |
Total other comprehensive loss | (7,542) | (1,926) |
Total comprehensive income | $ 6,834 | $ 1,556 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (UNAUDITED) (Parenthetical) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Income Statement [Abstract] | |
Net of tax effect on unrealized gain (loss) on derivatives | $ 0.2 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 141,235,000 | $ 17,766,000 |
Accounts receivable—net of allowance for expected credit losses of $2,212 and $3,169, respectively | 293,504,000 | 262,757,000 |
Other receivables | 41,411,000 | 59,104,000 |
Inventories | 173,284,000 | 178,624,000 |
Prepaid expenses and other current assets | 7,446,000 | 7,965,000 |
Total current assets | 656,880,000 | 526,216,000 |
Property and equipment, net | 154,447,000 | 150,188,000 |
Right-of-use assets, net | 121,700,000 | 120,562,000 |
Intangible assets, net | 101,452,000 | 113,861,000 |
Goodwill | 493,068,000 | 495,724,000 |
Other assets | 9,470,000 | 5,206,000 |
Total assets | 1,537,017,000 | 1,411,757,000 |
Current liabilities: | ||
Accounts payable | 149,474,000 | 145,226,000 |
Accrued payroll and employee benefits | 23,871,000 | 31,410,000 |
Accrued taxes | 9,612,000 | 8,780,000 |
Current portion of tax receivable agreement | 8,537,000 | 27,850,000 |
Current portion of term loan | 4,500,000 | 4,500,000 |
Current portion of lease liabilities | 31,138,000 | 30,307,000 |
Other current liabilities | 12,642,000 | 18,557,000 |
Total current liabilities | 239,774,000 | 266,630,000 |
Asset-based revolving credit facility | 235,000,000 | 89,000,000 |
Long-term portion of term loan, net | 433,791,000 | 434,633,000 |
Tax receivable agreement | 80,996,000 | 89,533,000 |
Deferred income taxes, net | 21,759,000 | 18,972,000 |
Long-term portion of lease liabilities | 96,831,000 | 97,145,000 |
Other liabilities | 12,836,000 | 7,679,000 |
Total liabilities | 1,120,987,000 | 1,003,592,000 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value, authorized 10,000,000 shares; 0 shares issued | 0 | 0 |
Common stock, $0.001 par value, authorized 190,000,000 shares; 43,201,056 and 42,991,016 shares issued, respectively | 13,000 | 13,000 |
Additional paid-in capital | 337,393,000 | 336,362,000 |
Retained earnings | 88,630,000 | 74,254,000 |
Accumulated other comprehensive loss | (10,006,000) | (2,464,000) |
Total stockholders' equity | 416,030,000 | 408,165,000 |
Total liabilities and stockholders' equity | 1,537,017,000 | 1,411,757,000 |
Accounts receivable net of allowance for doubtful accounts | $ 2,212 | $ 3,169 |
Preferred stock par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock shares issued (in shares) | 0 | 0 |
Common stock par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock shares authorized (in shares) | 190,000,000 | 190,000,000 |
Common stock shares issued (in shares) | 43,201,056 | 42,991,016 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Accounts receivable net of allowance for doubtful accounts | $ 2,212 | $ 3,169 |
Preferred stock par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock shares issued (in shares) | 0 | 0 |
Common stock par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock shares authorized (in shares) | 190,000,000 | 190,000,000 |
Common stock shares issued (in shares) | 43,201,056 | 42,991,016 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Jan. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Cash flows from operating activities: | ||||
Net income | $ 14,376 | $ 3,482 | ||
Add: loss on sale of discontinued operations | 0 | (1,346) | ||
Income (Loss) from Continuing Operations, Net of Tax, Attributable to Parent, Total | 14,376 | 4,828 | ||
Adjustments to reconcile net income to net cash provided by operating activities from continuing operations: | ||||
Depreciation | 7,249 | 8,846 | ||
Amortization of intangible assets | 11,970 | 11,496 | ||
Amortization of debt issuance costs and debt discount | 540 | 539 | ||
Inventory fair value purchase accounting adjustment | 0 | 196 | ||
Provision for expected credit losses | 652 | 636 | ||
Stock-based compensation | 1,393 | 829 | ||
Loss on disposal of property and equipment | 51 | 191 | ||
Right-of-use assets non-cash expense | 7,489 | 6,743 | ||
Deferred income taxes | 3,133 | 211 | ||
Change in assets and liabilities, net of effects of acquisitions: | ||||
Accounts receivable | (30,308) | (23,860) | ||
Other receivables | 16,875 | 16,851 | ||
Inventories | 5,924 | (2,917) | ||
Prepaid expenses and other current assets | 460 | (2,206) | ||
Other assets | (24) | (15) | ||
Accounts payable | 6,256 | 9,182 | ||
Accrued payroll and employee benefits | (7,349) | (7,601) | ||
Accrued taxes | 863 | (831) | ||
Operating lease liabilities | (7,335) | (6,618) | ||
Other liabilities | (4,499) | 1,209 | ||
Net cash provided by operating activities from continuing operations | 27,716 | 17,709 | ||
Cash flows from investing activities from continuing operations: | ||||
Purchases of property and equipment | (11,442) | (5,242) | ||
Payments of net working capital adjustments related to acquisitions | 34 | 13 | ||
Proceeds from the disposal of fixed assets | 474 | 238 | ||
Acquisitions, net of cash acquired | (8,638) | (10,757) | ||
Net cash used in investing activities from continuing operations | (19,640) | (15,774) | ||
Cash flows from financing activities from continuing operations: | ||||
Proceeds from asset-based revolving credit facility | 322,500 | 145,276 | ||
Payments of Asset-Based Credit Facility | (176,500) | (137,776) | ||
Repayments of Long-term Debt | (1,125) | (1,125) | ||
Payment related to tax receivable agreement | $ (16,700) | (27,850) | (16,667) | $ (27,900) |
Tax withholding payment related to net settlement of equity awards | (362) | (130) | ||
Principal repayment of finance lease obligations | (678) | (654) | ||
Net cash provided by (used in) financing activities from continuing operations | 115,985 | (11,076) | ||
Net cash used in investing activities from discontinued operations | 0 | (1,346) | ||
Net cash used in discontinued operations | 0 | (1,346) | ||
Effect of exchange rate changes on cash | (592) | 166 | ||
Net increase (decrease) in cash | 123,469 | (10,321) | ||
Cash and cash equivalents at beginning of period | $ 15,299 | 17,766 | 15,299 | 15,299 |
Cash and cash equivalents at end of period | 141,235 | 4,978 | $ 17,766 | |
Supplemental disclosures of cash flow information: | ||||
Cash paid for income taxes | 103 | 79 | ||
Cash paid for interest | 7,665 | 8,613 | ||
Supplemental disclosures of non-cash investing and financing activities: | ||||
Change in fair value of derivatives, net of tax | 499 | 3,496 | ||
Goodwill adjustment for purchase price allocation | $ 55 | $ 187 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Other Comprehensive Loss |
Beginning balance (in shares) at Dec. 31, 2018 | 42,907,326 | ||||
Beginning balance at Dec. 31, 2018 | $ 366,349 | $ 13 | $ 332,330 | $ 34,187 | $ (181) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Adoption of derivative guidance | 0 | (172) | 172 | ||
Stock-based compensation | 829 | 829 | |||
Vesting of restricted stock units (in shares) | 93,014 | ||||
Vesting of restricted stock units | 0 | ||||
Tax withholding payment related to net share settlement of equity awards (in shares) | (13,657) | ||||
Tax withholding payment related to net share settlement of equity awards | (130) | (130) | |||
Other comprehensive loss | (2,098) | (2,098) | |||
Net income | 3,482 | 3,482 | |||
Ending balance (in shares) at Mar. 31, 2019 | 42,986,683 | ||||
Ending balance at Mar. 31, 2019 | 368,432 | $ 13 | 330,339 | 37,497 | (2,107) |
Beginning balance (in shares) at Dec. 31, 2018 | 42,907,326 | ||||
Beginning balance at Dec. 31, 2018 | 366,349 | $ 13 | 332,330 | 34,187 | (181) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Adoption of derivative guidance | 200 | ||||
Ending balance (in shares) at Dec. 31, 2019 | 42,991,016 | ||||
Ending balance at Dec. 31, 2019 | 408,165 | $ 13 | 336,362 | 74,254 | (2,464) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation | 1,393 | 1,393 | |||
Vesting of restricted stock units (in shares) | 237,988 | ||||
Vesting of restricted stock units | 0 | ||||
Tax withholding payment related to net share settlement of equity awards (in shares) | (27,948) | ||||
Tax withholding payment related to net share settlement of equity awards | (362) | (362) | |||
Other comprehensive loss | (7,542) | (7,542) | |||
Net income | 14,376 | 14,376 | |||
Ending balance (in shares) at Mar. 31, 2020 | 43,201,056 | ||||
Ending balance at Mar. 31, 2020 | $ 416,030 | $ 13 | $ 337,393 | $ 88,630 | $ (10,006) |
Business and Basis of Presentat
Business and Basis of Presentation | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business and Basis of Presentation | Business and Basis of Presentation Business Foundation Building Materials, Inc. (the "Company") is a specialty building products distributor of wallboard, suspended ceiling systems, and metal framing throughout the U.S. and Canada. The Company is based in Santa Ana, California. Organization The Company was formed on October 27, 2016 (inception). The initial stockholder of the Company was LSF9 Cypress Parent 2 LLC ("Parent 2"), an affiliate of Lone Star Fund IX (U.S.) L.P., which we refer to with certain of its affiliates and associates (excluding us and other companies it owns as a result of its investment activities), as Lone Star. At the Company's inception, Lone Star held all of the Company's authorized, issued and outstanding shares of common stock. Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of the Company and its consolidated subsidiaries. All intercompany balances and transactions have been eliminated. Reorganization On February 8, 2017, FBM Alpha LLC (formerly known as LSF9 Cypress Parent, LLC) ("Alpha"), transferred its wholly owned direct subsidiary, Foundation Building Materials Holding Company LLC (formerly known as FBM Beta LLC and LSF9 Cypress Holdings, LLC) ("Holdco"), and indirectly held subsidiary FBM Finance, Inc., to the Company, thereby transferring the business to be indirectly held by the Company. The Company holds no other operations, cash flows, material assets or liabilities other than the equity interests in Alpha. Alpha holds no other operations, cash flows, material assets or liabilities other than the equity interests in Holdco. Holdco holds no other material assets or liabilities other than the equity interests in FBM Finance, Inc. and Foundation Building Materials, LLC. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP") for interim financial information and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring adjustments necessary for a fair presentation with respect to the interim financial statements, have been included. The results of operations for interim periods are not necessarily indicative of the results for full fiscal years. For further information, refer to the consolidated financial statements and footnotes thereto for the year ended December 31, 2019, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 25, 2020 (the "2019 10-K"). Reclassification to the Condensed Consolidated Statements of Cash Flows For the three months ended March 31, 2019, the Company reclassified the presentation of operating lease payments of $6.6 million, which were previously included in the change in other liabilities in the condensed consolidated statements of cash flows and are now being presented in a separate line item as a change in operating lease liabilities to conform to the current period presentation. There is no impact on the net cash provided by operating activities from continuing operations in the condensed consolidated statements of cash flows. |
Recently Adopted and Issued Acc
Recently Adopted and Issued Accounting Standards | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Recently Adopted and Issued Accounting Standards | Recently Adopted and Issued Accounting Standards Recently Adopted Accounting Standards In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement, which modifies the disclosure requirements on fair value measurements in Topic 820 based on the consideration of costs and benefits to promote the appropriate exercise and discretion by entities when considering fair value measurement disclosures and to clarify that materiality is an appropriate consideration of entities and their auditors when evaluating disclosure requirements. The amendments in this update are effective for reporting periods beginning after December 15, 2019, with early adoption permitted. The Company adopted this guidance on January 1, 2020, and the adoption did not have a material impact on the Company’s consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles — Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment , which eliminates the requirement to calculate the implied fair value of goodwill but rather requires an entity to record an impairment charge based on the excess of a reporting unit’s carrying value over its fair value. This amendment is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019, with early adoption permitted. The Company adopted this guidance on January 1, 2020, and the adoption did not have a material impact on the Company’s consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This ASU changes the impairment model for most financial assets, requiring the use of an expected loss model that requires entities to estimate the lifetime expected credit loss on financial assets measured at amortized cost. Such credit losses will be recorded as an allowance to offset the amortized cost of the financial asset, resulting in a net presentation of the amount expected to be collected on the financial asset. In addition, credit losses relating to available-for-sale debt securities will now be recorded through an allowance for expected credit losses rather than as a direct write-down to the security. The amendments in this update are effective for reporting periods beginning after December 15, 2019, with early adoption permitted for reporting periods beginning after December 15, 2018. The Company adopted this guidance on January 1, 2020. The adoption did not have a material impact on the Company’s consolidated financial statements and did not result in a cumulative-effect adjustment to beginning retained earnings. Recently Issued Accounting Standards In March 2020, the FASB issued ASU No. 2020-04 — Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The amendments in this update are elective and provide optional expedients and exceptions to GAAP for contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this update apply only to contracts, hedging relationships, and other transactions that reference London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued because of reference rate reform. This guidance is effective beginning on March 12, 2020, and the Company may elect to apply the amendments prospectively through December 31, 2022. The Company is currently evaluating the impact this guidance may have on its consolidated financial statements and related disclosures. In December 2019, the FASB issued ASU No. 2019-12 — Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. It also clarifies and simplifies other aspects of the accounting for income taxes. This guidance is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact this guidance may have on its consolidated financial statements and related disclosures. |
Discontinued Operations
Discontinued Operations | 3 Months Ended |
Mar. 31, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued OperationsOn November 1, 2018, the Company completed the sale of its mechanical insulation business (the "Disposed Business") to SPI LLC, an unrelated third party controlled by Dunes Point Capital, for total cash consideration of approximately $122.5 million, and recorded a gain on the sale of $13.7 million, net of taxes. For the three months ended March 31, 2019, the Company recorded a loss on sale of discontinued operations, net of tax of $1.3 million, related to customary purchase price adjustments. |
Current Expected Credit Losses
Current Expected Credit Losses | 3 Months Ended |
Mar. 31, 2020 | |
Credit Loss [Abstract] | |
Current Expected Credit Losses | Current Expected Credit Losses The Company has identified accounts receivable and vendor rebates receivable as portfolio segments in accordance with ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326). Accounts Receivable The allowance for expected credit losses reflects the Company's estimate of credit exposure. This estimate is based on an assessment of historical write-off experience, aging of receivables, significant individual account credit risk, current economic conditions, and the Company’s expectation of future economic conditions. The Company’s accounts receivable are primarily from customers in the construction industry located in the United States and Canada. Concentration of credit risk with respect to accounts receivable is limited due to the large number of customers comprising the Company’s customer base. The Company performs credit evaluations of its customers; however, the Company’s policy is generally not to require collateral. As of March 31, 2020, the Company had no significant concentrations of credit risk . Vendor Rebates Receivable The Company receives rebates from certain vendors based primarily on the volume of inventory purchases. Throughout the year, the amount of vendor rebates receivable for the periodic programs are recorded when the related inventory is received and in certain circumstances are estimated based upon the expected annual level of purchases. The Company continually revises these estimates to reflect actual rebates earned. Historically, actual vendor rebates have not been materially different from management’s original estimates and have been unrelated to the Company’s inability to collect payment from a vendor. The change in the allowance for expected credit losses from December 31, 2019 to March 31, 2020, consists of the following (in thousands): Allowance for Expected Credit Losses Balance at December 31, 2019 $ (3,169) Provision for expected credit losses (652) Write-offs 1,630 Recoveries (21) Balance at March 31, 2020 $ (2,212) |
Right-of-Use ("ROU") Assets and
Right-of-Use ("ROU") Assets and Lease Liabilities | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Right-of-Use (ROU) Assets and Lease Liabilities | Right-of-Use ("ROU") Assets and Lease Liabilities The Company leases the majority of its branch locations and office space and also leases vehicles and equipment for use in its operations. At inception, the Company determines whether an agreement represents a lease and, at commencement, evaluates each lease agreement to determine whether the lease is an operating or finance lease. These leases do not have significant rent escalations, holidays, concessions, leasehold improvement incentives, or other build-out clauses. The Company elected to adopt the practical expedient to account for both lease and non-lease components as a single lease component. Certain leases include one or more options to renew. The exercise of lease renewal options is typically at the Company's discretion. The Company regularly evaluates the renewal options and, when the options are reasonably certain of being exercised, they are included in the lease term. Variable lease costs consist primarily of taxes, insurance, and common area or other maintenance costs for leased facilities and vehicles and equipment, which are paid based on actual costs incurred. Generally, leases do not provide an implicit rate; therefore, the Company uses its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments. The Company uses a portfolio approach for determining the incremental borrowing rate based on the applicable lease terms and the current economic environment. The following table summarizes the Company's operating and finance leases by country as of March 31, 2020 (in thousands): March 31, 2020 United States Canada Total Operating leases: Real estate ROU assets, gross $ 120,607 $ 15,576 $ 136,183 Accumulated amortization (26,651) (4,127) (30,778) Real estate ROU assets, net $ 93,956 $ 11,449 $ 105,405 Real estate lease liabilities $ 93,665 $ 11,562 $ 105,227 Vehicle and equipment ROU assets, gross $ 17,481 $ 2,492 $ 19,973 Accumulated amortization (3,346) (332) (3,678) Vehicle and equipment ROU assets, net $ 14,135 $ 2,160 $ 16,295 Vehicle and equipment lease liabilities $ 14,080 $ 2,149 $ 16,229 Total operating ROU assets, net $ 108,091 $ 13,609 $ 121,700 Total operating lease liabilities $ 107,745 $ 13,711 $ 121,456 Finance leases included in property and equipment, net: Vehicle and equipment ROU assets, gross $ 6,301 $ 2,640 $ 8,941 Accumulated depreciation (2,299) (760) (3,059) Total finance ROU assets, net $ 4,002 $ 1,880 $ 5,882 Total finance lease liabilities $ 4,252 $ 2,261 $ 6,513 The following table summarizes the Company's operating and finance leases by country as of December 31, 2019 (in thousands): December 31, 2019 United States Canada Total Operating leases: Real estate ROU assets, gross $ 114,202 $ 16,544 $ 130,746 Accumulated amortization (21,337) (3,406) (24,743) Real estate ROU assets, net $ 92,865 $ 13,138 $ 106,003 Real estate lease liabilities $ 92,319 $ 13,240 $ 105,559 Vehicle and equipment ROU assets, gross $ 14,665 $ 2,751 $ 17,416 Accumulated amortization (2,592) (265) (2,857) Vehicle and equipment ROU assets, net $ 12,073 $ 2,486 $ 14,559 Vehicle and equipment lease liabilities $ 12,037 $ 2,472 $ 14,509 Total operating ROU assets, net $ 104,938 $ 15,624 $ 120,562 Total operating lease liabilities $ 104,356 $ 15,712 $ 120,068 Finance leases included in property and equipment, net: Vehicle and equipment ROU assets, gross $ 6,341 $ 2,863 $ 9,204 Accumulated depreciation (1,892) (670) (2,562) Total finance ROU assets, net $ 4,449 $ 2,193 $ 6,642 Total finance lease liabilities $ 4,777 $ 2,607 $ 7,384 The components of lease cost are as follows (in thousands): Three Months Ended March 31, 2020 2019 Income Statement Classification Operating leases: Lease cost $ 8,790 $ 8,052 Selling, general and administrative expenses Variable lease cost 1,260 1,053 Selling, general and administrative expenses Operating lease cost 10,050 9,105 Finance leases: Amortization of ROU assets 601 668 Depreciation and amortization Interest on lease liabilities 91 124 Interest expense Finance lease cost 692 792 Total lease cost $ 10,742 $ 9,897 Supplemental cash flow information for leases is as follows (in thousands): Three Months Ended March 31, 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 7,335 $ 6,618 Financing cash flows from finance leases $ 678 $ 654 Right-of-use-assets obtained in exchange for lease obligations: Finance leases $ 20 $ 185 Operating leases $ 10,152 $ 120,555 The weighted-average remaining lease term and weighted-average discount rate for operating and finance leases are as follows: March 31, 2020 December 31, 2019 Operating Leases Finance Leases Operating Leases Finance Leases Weighted average remaining lease term (years) 5.26 3.04 5.32 3.26 Weighted average discount rate 4.3% 5.2% 4.4% 5.2% The following table reconciles the undiscounted future lease payments for operating and finance leases to operating and finance lease liabilities recorded on the balance sheet as of March 31, 2020 (in thousands): Operating Leases Finance Leases Total 2020 (excluding the three months ended March 31, 2020) $ 25,028 $ 2,108 $ 27,136 2021 31,244 2,400 33,644 2022 25,817 1,456 27,273 2023 20,220 921 21,141 2024 13,437 88 13,525 2025 and thereafter 19,925 54 19,979 Total lease payments 135,671 7,027 142,698 Less: amount representing interest (14,215) (514) (14,729) Total $ 121,456 $ 6,513 $ 127,969 Current portion of lease liabilities $ 28,636 $ 2,502 $ 31,138 Long-term portion of lease liabilities $ 92,820 $ 4,011 $ 96,831 The following table reconciles the undiscounted future lease payments for operating and finance leases to operating and finance lease liabilities recorded on the balance sheet as of December 31, 2019 (in thousands): Operating Leases Finance Leases Total 2020 $ 32,257 $ 2,908 $ 35,165 2021 29,816 2,445 32,261 2022 24,429 1,496 25,925 2023 18,704 976 19,680 2024 11,882 95 11,977 2025 and thereafter 17,730 87 17,817 Total lease payments 134,818 8,007 142,825 Less: amount representing interest (14,750) (623) (15,373) Total $ 120,068 $ 7,384 $ 127,452 Current portion of lease liabilities $ 27,689 $ 2,618 $ 30,307 Long-term portion of lease liabilities $ 92,379 $ 4,766 $ 97,145 |
Right-of-Use (ROU) Assets and Lease Liabilities | Right-of-Use ("ROU") Assets and Lease Liabilities The Company leases the majority of its branch locations and office space and also leases vehicles and equipment for use in its operations. At inception, the Company determines whether an agreement represents a lease and, at commencement, evaluates each lease agreement to determine whether the lease is an operating or finance lease. These leases do not have significant rent escalations, holidays, concessions, leasehold improvement incentives, or other build-out clauses. The Company elected to adopt the practical expedient to account for both lease and non-lease components as a single lease component. Certain leases include one or more options to renew. The exercise of lease renewal options is typically at the Company's discretion. The Company regularly evaluates the renewal options and, when the options are reasonably certain of being exercised, they are included in the lease term. Variable lease costs consist primarily of taxes, insurance, and common area or other maintenance costs for leased facilities and vehicles and equipment, which are paid based on actual costs incurred. Generally, leases do not provide an implicit rate; therefore, the Company uses its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments. The Company uses a portfolio approach for determining the incremental borrowing rate based on the applicable lease terms and the current economic environment. The following table summarizes the Company's operating and finance leases by country as of March 31, 2020 (in thousands): March 31, 2020 United States Canada Total Operating leases: Real estate ROU assets, gross $ 120,607 $ 15,576 $ 136,183 Accumulated amortization (26,651) (4,127) (30,778) Real estate ROU assets, net $ 93,956 $ 11,449 $ 105,405 Real estate lease liabilities $ 93,665 $ 11,562 $ 105,227 Vehicle and equipment ROU assets, gross $ 17,481 $ 2,492 $ 19,973 Accumulated amortization (3,346) (332) (3,678) Vehicle and equipment ROU assets, net $ 14,135 $ 2,160 $ 16,295 Vehicle and equipment lease liabilities $ 14,080 $ 2,149 $ 16,229 Total operating ROU assets, net $ 108,091 $ 13,609 $ 121,700 Total operating lease liabilities $ 107,745 $ 13,711 $ 121,456 Finance leases included in property and equipment, net: Vehicle and equipment ROU assets, gross $ 6,301 $ 2,640 $ 8,941 Accumulated depreciation (2,299) (760) (3,059) Total finance ROU assets, net $ 4,002 $ 1,880 $ 5,882 Total finance lease liabilities $ 4,252 $ 2,261 $ 6,513 The following table summarizes the Company's operating and finance leases by country as of December 31, 2019 (in thousands): December 31, 2019 United States Canada Total Operating leases: Real estate ROU assets, gross $ 114,202 $ 16,544 $ 130,746 Accumulated amortization (21,337) (3,406) (24,743) Real estate ROU assets, net $ 92,865 $ 13,138 $ 106,003 Real estate lease liabilities $ 92,319 $ 13,240 $ 105,559 Vehicle and equipment ROU assets, gross $ 14,665 $ 2,751 $ 17,416 Accumulated amortization (2,592) (265) (2,857) Vehicle and equipment ROU assets, net $ 12,073 $ 2,486 $ 14,559 Vehicle and equipment lease liabilities $ 12,037 $ 2,472 $ 14,509 Total operating ROU assets, net $ 104,938 $ 15,624 $ 120,562 Total operating lease liabilities $ 104,356 $ 15,712 $ 120,068 Finance leases included in property and equipment, net: Vehicle and equipment ROU assets, gross $ 6,341 $ 2,863 $ 9,204 Accumulated depreciation (1,892) (670) (2,562) Total finance ROU assets, net $ 4,449 $ 2,193 $ 6,642 Total finance lease liabilities $ 4,777 $ 2,607 $ 7,384 The components of lease cost are as follows (in thousands): Three Months Ended March 31, 2020 2019 Income Statement Classification Operating leases: Lease cost $ 8,790 $ 8,052 Selling, general and administrative expenses Variable lease cost 1,260 1,053 Selling, general and administrative expenses Operating lease cost 10,050 9,105 Finance leases: Amortization of ROU assets 601 668 Depreciation and amortization Interest on lease liabilities 91 124 Interest expense Finance lease cost 692 792 Total lease cost $ 10,742 $ 9,897 Supplemental cash flow information for leases is as follows (in thousands): Three Months Ended March 31, 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 7,335 $ 6,618 Financing cash flows from finance leases $ 678 $ 654 Right-of-use-assets obtained in exchange for lease obligations: Finance leases $ 20 $ 185 Operating leases $ 10,152 $ 120,555 The weighted-average remaining lease term and weighted-average discount rate for operating and finance leases are as follows: March 31, 2020 December 31, 2019 Operating Leases Finance Leases Operating Leases Finance Leases Weighted average remaining lease term (years) 5.26 3.04 5.32 3.26 Weighted average discount rate 4.3% 5.2% 4.4% 5.2% The following table reconciles the undiscounted future lease payments for operating and finance leases to operating and finance lease liabilities recorded on the balance sheet as of March 31, 2020 (in thousands): Operating Leases Finance Leases Total 2020 (excluding the three months ended March 31, 2020) $ 25,028 $ 2,108 $ 27,136 2021 31,244 2,400 33,644 2022 25,817 1,456 27,273 2023 20,220 921 21,141 2024 13,437 88 13,525 2025 and thereafter 19,925 54 19,979 Total lease payments 135,671 7,027 142,698 Less: amount representing interest (14,215) (514) (14,729) Total $ 121,456 $ 6,513 $ 127,969 Current portion of lease liabilities $ 28,636 $ 2,502 $ 31,138 Long-term portion of lease liabilities $ 92,820 $ 4,011 $ 96,831 The following table reconciles the undiscounted future lease payments for operating and finance leases to operating and finance lease liabilities recorded on the balance sheet as of December 31, 2019 (in thousands): Operating Leases Finance Leases Total 2020 $ 32,257 $ 2,908 $ 35,165 2021 29,816 2,445 32,261 2022 24,429 1,496 25,925 2023 18,704 976 19,680 2024 11,882 95 11,977 2025 and thereafter 17,730 87 17,817 Total lease payments 134,818 8,007 142,825 Less: amount representing interest (14,750) (623) (15,373) Total $ 120,068 $ 7,384 $ 127,452 Current portion of lease liabilities $ 27,689 $ 2,618 $ 30,307 Long-term portion of lease liabilities $ 92,379 $ 4,766 $ 97,145 |
Derivatives and Hedging Activit
Derivatives and Hedging Activities | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging Activities | Derivatives and Hedging Activities The Company uses derivatives to manage selected foreign currency exchange rate risk for its investments in foreign subsidiaries and interest rate risk related to its variable rate debt. The Company documents its risk management strategy and hedge effectiveness at the inception of and during the term of each hedge. Interest Rate Swap On January 31, 2019, the Company executed two interest rate swaps for a total notional amount of $310.0 million to fix the LIBOR portion of its interest rate on its variable rate debt at 2.52% through January 31, 2022. There is no significant credit risk associated with the potential failure of any counterparty to perform under the terms of the interest rate swaps. The interest rate swaps are measured at fair value within the accompanying condensed consolidated balance sheets either as an asset or a liability. As of March 31, 2020 and December 31, 2019, the fair value of the interest rate swaps was $12.9 million and $6.2 million, respectively, and was recorded in other non-current liabilities. For the three months ended March 31, 2020, the Company recognized a loss of $4.9 million, net of taxes of $1.7 million, in comprehensive income. For the three months ended March 31, 2019, the Company recognized a loss of $2.2 million, net of taxes of $0.8 million, in comprehensive income. Net Investment Hedge On May 15, 2019, the Company terminated its foreign currency exchange rate contracts with total notional amounts of approximately $88.0 million. The Company recognized a gain of $2.5 million, net of taxes of $0.8 million, upon termination of the contracts, which was recorded in comprehensive income. On May 15, 2019, the Company entered into new foreign currency exchange rate contracts with total notional amounts of $81.3 million. As of March 31, 2020, the amount of notional foreign currency exchange rate contracts outstanding was approximately $81.3 million. There is no significant credit risk associated with the potential failure of any counterparty to perform under the terms of the foreign currency exchange rate contracts. The net investment hedge is measured at fair value within the accompanying condensed consolidated balance sheets either as an asset or a liability. As of March 31, 2020, the fair value of the derivative instrument was $4.5 million and was recorded in other non-current assets. As of December 31, 2019, the fair value of the net investment hedge was $1.4 million and was recorded in other non-current liabilities. For the three months ended March 31, 2020, the Company recognized a gain of $4.4 million, net of taxes of $1.5 million, related to the change in fair value of the net investment hedge, which was recorded in comprehensive income. For the three months ended March 31, 2019, the Company recognized a loss of $1.4 million, net of taxes of $0.5 million, related to the change in fair value of the net investment hedge, which was recorded in comprehensive income. On January 1, 2019, the Company adopted ASU No. 2017-12, Targeted Improvements to Accounting for Hedging Activities , and reclassified $0.2 million from retained earnings to other comprehensive income related to the cumulative ineffective portion of the net investment hedge |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2020 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions The Company accounts for its acquisitions under the acquisition method, and accordingly, the results of operations of acquired entities are included in the Company’s consolidated financial statements from the acquisition date. Acquisition related costs are expensed as incurred. The purchase price is allocated to the assets acquired and liabilities assumed based on estimated fair values at the acquisition date, with the excess of purchase price over the estimated fair value of the net assets acquired recorded as goodwill. Purchase accounting adjustments associated with the intangible asset valuations have been recorded as of March 31, 2020. The fair value of acquired intangible assets, primarily related to customer relationships, was estimated by applying a discounted cash flow model. That measure is based on significant Level 3 inputs not observable in the market. Key assumptions were developed based on the Company’s historical experience, future projections and comparable market data including future cash flows, long-term growth rates, implied royalty rates, attrition rates and discount rates. The purchase price allocation for the acquisition set forth below is preliminary and subject to adjustment as additional information is obtained about facts and circumstances that existed as of the acquisition date. During the three months ended March 31, 2020, the Company completed the following acquisition: Insulation Distributors, Inc. On February 3, 2020, the Company acquired the operations and certain assets of Insulation Distributors, Inc. (“IDI”) with respect to IDI’s two specialty building products branches in Maryland, for a total purchase price of $8.6 million. This acquisition is not considered material. The following table summarizes the estimated fair value of the assets acquired as of the acquisition date (in thousands): Three Months Ended March 31, 2020 Assets acquired: Accounts receivable $ 4,210 Inventories 2,228 Property and equipment 1,810 Other assets 18 Intangible assets 372 Total assets acquired $ 8,638 Goodwill and intangible assets recognized from asset acquisitions are expected to be tax deductible. Generally, the most significant intangible asset acquired is customer relationships. The Company's acquisitions are generally subject to working capital adjustments; however, the Company does not expect any such adjustments to have a material impact on its consolidated financial statements. Any adjustments to the purchase price allocation of this acquisition will be made as soon as practicable but no later than one year from the acquisition date. The pro forma impact of the acquisition was not presented as the acquisition was not considered material to the Company's consolidated financial statements. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The change in goodwill from December 31, 2019 to March 31, 2020, consists of the following (in thousands): Carrying Value Balance at December 31, 2019 $ 495,724 Goodwill acquired — Purchase price allocation adjustments from prior periods 89 Impact of foreign currency exchange rates (2,745) Balance at March 31, 2020 $ 493,068 Identifiable intangible assets that are separable and have determinable useful lives are valued separately and amortized over their benefit period. The following is the gross carrying value and accumulated amortization of the Company’s identifiable intangible assets as of March 31, 2020 and December 31, 2019 (in thousands): March 31, 2020 December 31, 2019 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Tradenames $ 15,980 $ (14,348) $ 1,632 $ 15,980 $ (13,563) $ 2,417 Customer relationships 266,577 (166,757) 99,820 267,781 (156,337) 111,444 $ 282,557 $ (181,105) $ 101,452 $ 283,761 $ (169,900) $ 113,861 On January 1, 2019, the Company reclassified certain other intangible assets related to real estate leases to right-of-use assets in accordance with the applicable transition guidance in ASC 840, the predecessor to ASU No. 2016-02 — Leases (Topic 842). |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Debt consists of the following as of March 31, 2020 and December 31, 2019 (in thousands): March 31, 2020 December 31, 2019 2018 Term Loan Facility $ 444,375 $ 445,500 Unamortized deferred financing and issuance costs - term loan (6,083) (6,367) 2018 Revolving Credit Facility 235,000 89,000 Unamortized deferred financing costs - revolving credit facility (3,420) (3,677) $ 669,872 $ 524,456 2018 Term Loan Facility On August 13, 2018, the Company entered into a credit agreement by and among Alpha, Holdco, Royal Bank of Canada, as administrative agent and collateral agent, and the lenders party thereto (the “2018 Term Loan Facility”). The 2018 Term Loan Facility provides senior secured debt financing in an aggregate principal amount of $450.0 million and the right, at the Company’s option, to request additional tranches of term loans. Availability of such additional tranches of term loans will be subject to the absence of any default, and, among other things, the receipt of commitments by existing or additional financial institutions. Borrowings under the 2018 Term Loan Facility will bear interest at Holdco’s option at either (a) LIBOR determined rate by reference to the costs of funds for United States dollar deposits for the interest period relevant to such borrowing adjusted for certain additional costs, which shall be no less than 0.00%, plus an applicable margin of 3.25% (or 3.00% if the first lien net leverage ratio (as defined in the 2018 Term Loan Facility) is no greater than 4.00 to 1.00), or (b) a base rate determined by reference to the highest of (i) the prime commercial lending rate published by Royal Bank of Canada as its “prime rate,” (ii) the federal funds effective rate plus 0.50% and (iii) one-month LIBOR plus 1.0%, plus an applicable margin of 2.25% (or 2.00% if the first lien net leverage ratio is no greater than 4.00 to 1.00). The Company is required to make scheduled quarterly payments in an aggregate annual amount equal to 0.25% of the aggregate principal amount of the initial term loans made on August 13, 2018, with the balance due on August 13, 2025, seven Obligations under the 2018 Term Loan Facility are secured by a first priority lien on all Term Priority Collateral (as defined in the 2018 Term Loan Facility) and a second priority lien on all ABL Priority Collateral (as defined in the 2018 Term Loan Facility). The 2018 Term Loan Facility contains a number of covenants that are subject to certain exceptions, restrict Alpha’s ability and the ability of its subsidiaries to incur additional indebtedness, pay dividends on its equity securities or redeem, repurchase or retire its equity securities or other indebtedness, make investments, loans and acquisitions, create restrictions on the payment of dividends or other amounts to the Company from its restricted subsidiaries, engage in transactions with its affiliates, sell assets, including equity securities of its subsidiaries, alter the business it conducts, consolidate or merge and incur liens. 2018 Revolving Credit Facility On August 13, 2018, Alpha, Holdco, as the lead borrower, the additional U.S. borrowers party thereto from time to time, the Canadian borrowers party thereto from time to time (collectively, the “ABL Borrowers”), the lenders party thereto from time to time, Bank of America, N.A., as administrative agent and collateral agent (the “ABL Agent”), and the other agents party thereto, entered into the ABL Credit Agreement (the “2018 ABL Credit Agreement”), including the exhibits and schedules thereto (collectively, the “2018 Revolving Credit Facility”). The 2018 Revolving Credit Facility provides for senior secured revolving credit financing, including a United States revolving credit facility of initially up to $375.0 million (the “United States Revolving Credit Facility”), a Canadian revolving credit subfacility of initially up to $75.0 million (the “Canadian Revolving Credit Subfacility”) and a “first-in-last-out” (“FILO”) subfacility in an amount of up to $25.0 million in amortizing loans (the “FILO Subfacility”), subject, in each case, to availability under the respective borrowing bases for each facility. On November 9, 2018, the Company terminated the $25.0 million FILO Subfacility. The aggregate amount of the 2018 Revolving Credit Facility is $375.0 million. The 2018 Revolving Credit Facility includes a letter of credit subfacility, which permits up to $10.0 million of letters of credit under the United States Revolving Credit Facility (which may be denominated in United States dollars) and up to the dollar equivalent of $5.0 million of letters of credit under the Canadian Revolving Credit Subfacility (which may be denominated in Canadian dollars or United States dollars). In addition, pursuant to the 2018 Revolving Credit Facility, up to $50.0 million in the case of the United States Revolving Credit Facility, and $10.0 million in the case of the Canadian Revolving Credit Subfacility, may be short-term borrowings upon same-day notice. The 2018 Revolving Credit Facility is scheduled to mature on August 13, 2023. The amount of available credit for each of the United States Revolving Credit Facility and the Canadian Revolving Credit Subfacility changes every month, depending on the amount of eligible trade accounts, eligible credit card receivables, eligible inventory, eligible qualifying equipment and eligible cash the United States and Canadian loan parties have available to serve as collateral. Generally, each of the United States Revolving Credit Facility and the Canadian Revolving Credit Subfacility is limited to the sum of (a) 85% of eligible trade accounts (as defined in the 2018 Revolving Credit Facility), plus (b) 90% of eligible credit card accounts (as defined in the 2018 Revolving Credit Facility), plus (c) the lesser of (i) 75% of the value of the eligible inventory (as defined in the 2018 Revolving Credit Facility) and (ii) 85% of the net orderly liquidation value of the eligible inventory, plus (d) the lesser of (i) 85% of the net orderly liquidation value of eligible qualifying equipment and (ii) the amount obtained by multiplying (A) the amount obtained by dividing (x) the amount set forth in clause (c)(i) above by (y) the net book value of all eligible qualifying equipment as of the most recent annual appraisal, by (B) the net book value of eligible qualifying equipment (subject to amounts contributed to the borrowing base pursuant to this clause (d) being capped at the lesser of $50.0 million and 15% of the loan limit (as defined in the 2018 Revolving Credit Facility)), plus (e) eligible cash (as defined in the 2018 Revolving Credit Facility), minus (f) any eligible reserves on the borrowing base (as defined in the 2018 Revolving Credit Facility). Available credit for each tranche is calculated separately, and the borrowing base components are subject to customary reserves and eligibility criteria. Borrowings under the 2018 Revolving Credit Facility bear interest, at the Company’s option, at either an alternate base rate or Canadian prime rate, as applicable, plus an applicable margin (ranging from 0.25% to 0.75% pursuant to a grid based on average excess availability) or the LIBOR or Canadian CDOR rate (as defined in the 2018 Revolving Credit Facility), as applicable, plus an applicable margin (ranging from 1.25% to 1.75% pursuant to a grid based on average excess availability). In addition to paying interest on outstanding principal under the 2018 Revolving Credit Facility, the ABL Borrowers are required to pay a commitment fee in respect of the unutilized commitments under the 2018 Revolving Credit Facility ranging from 0.250% to 0.375% per annum and determined based on average utilization of the 2018 Revolving Credit Facility (increasing when utilization is low and decreasing when utilization is high). As long as commitments are outstanding under the 2018 Revolving Credit Facility, the Company is subject to certain restrictions under the facility if the Company’s Pro Forma Adjusted EBITDA to debt ratio (the “Total Net Leverage Ratio”) exceeds a certain total. The Total Net Leverage Ratio is defined as the ratio of Consolidated Total Debt to the aggregate amount of Consolidated EBITDA for the Relevant Reference Period (as such terms are defined in the 2018 Revolving Credit Facility). Consolidated Total Debt is defined in the 2018 Revolving Credit Facility and is generally calculated as an amount equal to the aggregate outstanding principal amount of all third-party debt for borrowed money, unreimbursed drawings under letters of credit, capital lease obligations and third-party debt obligations evidenced by notes or similar instruments on a consolidated basis and determined in accordance with GAAP, subject to certain exclusions. Consolidated EBITDA is defined in the 2018 Revolving Credit Facility and is calculated in a similar manner to the Company’s calculation of Adjusted EBITDA, except that the 2018 Revolving Credit Facility permits pro forma adjustments in order to give effect to, among other things, the pro forma results of the Company’s acquisitions as if the Company had owned such acquired companies for the entirety of the Relevant Reference Period. These pro forma adjustments give effect to all acquisitions consummated in the four quarters ended March 31, 2020, as though they had been consummated on the first day of the first quarter for the four quarters ended March 31, 2020. The 2018 Revolving Credit Facility requires the Company to maintain a Total Net Leverage Ratio no greater than 6.00:1.00 to incur additional junior lien and unsecured indebtedness. As of March 31, 2020, the Company had $235.0 million of outstanding borrowings and $140.0 million of available aggregate undrawn borrowing capacity under the 2018 Revolving Credit Facility. The weighted average interest rate for borrowings under the 2018 Revolving Credit Facility for the three months ended March 31, 2020 was 2.7%. Deferred Financing and Debt Issuance Costs Unamortized deferred financing and debt issuance costs as of March 31, 2020, were $9.5 million, of which $6.1 million was included in long-term portion of term loan, net, and $3.4 million for the 2018 Revolving Credit Facility was included in other long-term assets in the accompanying condensed consolidated balance sheets. Unamortized deferred financing and debt issuance costs as of December 31, 2019 were $10.0 million, of which $6.4 million was included in long-term portion of term loan, net, and $3.6 million for the 2018 Revolving Credit Facility was included in other long-term assets in the accompanying condensed consolidated balance sheets. As of March 31, 2020, the Company was in compliance with all debt covenants under the 2018 Revolving Credit Facility and the 2018 Term Loan Facility. |
Tax Receivable Agreement
Tax Receivable Agreement | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Tax Receivable Agreement | Tax Receivable Agreement In connection with the Company's initial public offering ("IPO"), the Company entered into a tax receivable agreement ("TRA") with Parent 2 that provides for the payment by the Company to Parent 2 of 90% of the amount of cash savings, if any, in U.S. federal, state, local and non-U.S. income tax that the Company realizes (or in some circumstances is deemed to realize) as a result of the utilization of the Company's and the Company’s subsidiaries’ (a) depreciation and amortization deductions, (b) net operating losses, (c) tax credits and (d) certain other tax attributes, and any offset to taxable income and gain or increase to taxable loss, resulting from the tax basis the Company had in its assets at the consummation of the IPO, At the end of each reporting period, any changes in the Company's estimate of the liability will be recorded in the condensed consolidated statements of operations as a component of other income (expense). The timing and amount of future tax benefits associated with the TRA are subject to change, and future payments may be required which could be materially different from the current estimated liability. The TRA will remain in effect until all tax benefits have been used or expired, unless the TRA is terminated early. As of March 31, 2020 and December 31, 2019, the TRA liability balance was $89.5 million and $117.4 million, respectively. The first TRA payment was made in January 2019 for $16.7 million. The second TRA payment was made in January 2020 for $27.9 million and was reflected as a current liability as of December 31, 2019. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss Accumulated other comprehensive loss consists of cumulative unrealized foreign currency translation adjustments and unrealized changes in fair value on certain derivative instruments. For the year ended December 31, 2019, $0.2 million was reclassified from retained earnings to other comprehensive income as a result of the adoption of ASU No. 2017-12, Targeted Improvements to Accounting for Hedging Activities, related to the cumulative ineffective portion of the net investment hedge. The components of accumulated other comprehensive loss for the three months ended March 31, 2020, are as follows (in thousands): Foreign Currency Translation Gains (Losses) Unrealized Loss on Derivatives, Net of Taxes Total Balance at December 31, 2019 $ 848 $ (3,312) $ (2,464) Other comprehensive loss (7,043) (499) (7,542) Balance at March 31, 2020 $ (6,195) $ (3,811) $ (10,006) |
Contingencies
Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies The Company is involved in certain legal actions arising in the ordinary course of business. The Company regularly assesses such matters to determine the degree of probability that the Company will incur a material loss as a result of such matters as well as the range of possible loss. An estimated loss contingency is accrued in the Company’s financial statements if it is probable the Company will incur a loss and the amount of the loss can be reasonably estimated. The Company reviews all claims, proceedings and investigations at least quarterly and establishes or adjusts any accruals for such matters to reflect the impact of negotiations, settlements, advice of legal counsel and other information and events pertaining to a particular matter. All legal costs associated with such matters are expensed as incurred. Because of uncertainties related to pending actions, the Company is currently unable to predict the ultimate outcome of such legal actions, and, with respect to any legal action where no liability has been accrued, to make a meaningful estimate of the reasonably possible loss or range of loss that could result from an adverse outcome.Historically, the claims, proceedings and investigations brought against the Company, individually and in the aggregate, have not had a material adverse effect on the consolidated financial position, results of operations, or cash flows of the Company. In February 2020, the Company received a one-time class action legal settlement of $8.6 million. The Company does not expect to receive any further payments as a result of this settlement. As of March 31, 2020, there were no proceedings or litigation involving the Company that management believes would have a material adverse impact on its business, financial position, results of operations, or cash flows. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company’s financial instruments consist primarily of cash and cash equivalents, trade and other receivables, derivative instruments, accounts payable, long-term debt and accrued liabilities. The carrying value of the Company’s trade receivables, accounts payable, the 2018 Revolving Credit Facility and accrued liabilities approximates fair value due to their short-term maturity. The Company may adjust the carrying amount of certain nonfinancial 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 and other assets and liabilities measured and recorded at fair value on a recurring basis as of March 31, 2020, is as follows (in thousands): Fair Value Measurements as of March 31, 2020 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Fair Value Recurring: Non-current assets and liabilities Derivative assets (Note 6) $ — $ 4,508 $ — $ 4,508 Derivative liabilities (Note 6) $ — $ (12,851) $ — $ (12,851) The estimated carrying amount and fair value of the Company’s financial instruments and other assets and liabilities measured and recorded at fair value on a recurring basis as of December 31, 2019, is as follows (in thousands): Fair Value Measurements as of 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 Recurring: Non-current liabilities Derivative liabilities (Note 6) $ — $ (7,649) $ — $ (7,649) The fair value of derivative assets and liabilities is 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. A majority of market inputs is actively quoted and can be validated through external sources, including brokers, market transactions and third-party pricing services. The fair value of derivative assets and liabilities includes adjustments for market liquidity, counterparty 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 counterparties, and fair value for net long exposures is adjusted for counterparty credit risk while the fair value for net short exposures is adjusted for the Company’s own credit risk. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income tax expense for the three months ended March 31, 2020 and 2019, was $5.3 million and $2.0 million, respectively. For the three months ended March 31, 2020 and 2019, the Company's effective tax rates were 26.8% and 29.8%, respectively. The variance from the statutory federal tax rate of 21.0% for the three months ended March 31, 2020, was primarily due to state taxes and non-deductible items, partially offset by a benefit recorded under the Foreign Derived Intangible Income provisions. The variance from the statutory federal tax rate of 21.0% for the three months ended March 31, 2019, was primarily due to state taxes, an unfavorable tax charge associated with stock-based compensation recorded as a discrete item, and foreign rate differential. |
Segments
Segments | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Segments | Segments 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 customers, 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. Resources are allocated and performance is assessed by the CODM. Based on the provisions of ASC 280, the Company has defined its operating segment by considering management structure and product offerings. This evaluation resulted in one reportable segment. Revenues are attributed to each country based on the location in which sales originate and in which assets are located. The Company generates the majority of its revenue in the United States with the remainder being generated in Canada. For the three months ended March 31, 2020, 90.5% and 9.5% of the Company's revenue was generated in the United States and Canada, respectively. For the three months ended March 31, 2019, 90.6% and 9.4% of the Company's revenue was generated in the United States and Canada, respectively. The following table sets forth property, plant and equipment, right-of-use assets, goodwill and intangibles by geographic area (in thousands): March 31, 2020 December 31, 2019 Property, plant and equipment, net United States $ 141,045 $ 135,907 Canada 13,402 14,281 Total property, plant and equipment, net $ 154,447 $ 150,188 Right-of-use assets, net United States $ 108,091 $ 104,938 Canada 13,609 15,624 Total right-of-use assets, net $ 121,700 $ 120,562 Goodwill United States $ 463,298 $ 463,208 Canada 29,770 32,516 Total goodwill $ 493,068 $ 495,724 Intangibles, net United States $ 91,802 $ 102,563 Canada 9,650 11,298 Total intangibles, net $ 101,452 $ 113,861 The Company’s net sales by major product line are as follows (dollars in thousands): Three Months Ended March 31, Change 2020 2019 $ % Wallboard $ 202,268 38.6 % $ 202,914 39.4 % $ (646) (0.3) % Suspended ceiling systems 98,506 18.8 % 88,996 17.3 % 9,510 10.7 % Metal framing 93,334 17.8 % 99,251 19.3 % (5,917) (6.0) % Complementary and other products 130,150 24.8 % 123,711 24.0 % 6,439 5.2 % Total net sales $ 524,258 100.0 % $ 514,872 100.0 % $ 9,386 1.8 % |
Other Current Liabilities
Other Current Liabilities | 3 Months Ended |
Mar. 31, 2020 | |
Other Liabilities Disclosure [Abstract] | |
Other Current Liabilities | Other Current Liabilities The balance in other current liabilities consists of the following (in thousands): March 31, 2020 December 31, 2019 Accrued expenses $ 2,989 $ 5,652 Accrued interest 342 74 Accrued other 9,311 12,831 Total other current liabilities $ 12,642 $ 18,557 |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic earnings (loss) per share represents net income (loss) for the period divided by the weighted average number of shares of common stock outstanding for the period. The following are the number of shares of common stock used to compute the basic and diluted earnings (loss) per share for each period: Three Months Ended March 31, 2020 2019 Weighted average shares used in basic computations 43,045,692 42,932,024 Dilutive effect of stock options and restricted stock units 497,127 12,805 Weighted average shares used in diluted computations 43,542,819 42,944,829 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events The recent outbreak of the novel coronavirus COVID-19, which was declared a pandemic by the World Health Organization on March 11, 2020 (the “COVID-19 Pandemic”), has led to adverse impacts on the United States and global economies and created uncertainty regarding potential impacts to the Company’s supply chain, operations, and customer demand. The COVID-19 Pandemic has impacted and could further impact the Company’s operations and the operations of the Company’s customers and vendors as a result of quarantines, branch closures, and travel and logistics restrictions. The extent to which the COVID-19 Pandemic impacts the Company’s business, financial condition and results of operations will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to the duration, spread, severity, and impact of the COVID-19 Pandemic, the effects of the COVID-19 Pandemic on the Company’s customers, suppliers, and vendors and the remedial actions and stimulus measures adopted by local and federal governments, and to what extent normal economic and operating conditions can resume. The Company continues to monitor and evaluate the impacts of the COVID-19 Pandemic with regards to its supply chain, operations, and customer demand. Even after the COVID-19 Pandemic has subsided, the Company may continue to experience adverse impacts to its business as a result of any economic recession or depression that has occurred or may occur in the future. Therefore, the Company cannot reasonably estimate the impact at this time. |
Recently Adopted and Issued A_2
Recently Adopted and Issued Accounting Standards (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement, which modifies the disclosure requirements on fair value measurements in Topic 820 based on the consideration of costs and benefits to promote the appropriate exercise and discretion by entities when considering fair value measurement disclosures and to clarify that materiality is an appropriate consideration of entities and their auditors when evaluating disclosure requirements. The amendments in this update are effective for reporting periods beginning after December 15, 2019, with early adoption permitted. The Company adopted this guidance on January 1, 2020, and the adoption did not have a material impact on the Company’s consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles — Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment , which eliminates the requirement to calculate the implied fair value of goodwill but rather requires an entity to record an impairment charge based on the excess of a reporting unit’s carrying value over its fair value. This amendment is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019, with early adoption permitted. The Company adopted this guidance on January 1, 2020, and the adoption did not have a material impact on the Company’s consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This ASU changes the impairment model for most financial assets, requiring the use of an expected loss model that requires entities to estimate the lifetime expected credit loss on financial assets measured at amortized cost. Such credit losses will be recorded as an allowance to offset the amortized cost of the financial asset, resulting in a net presentation of the amount expected to be collected on the financial asset. In addition, credit losses relating to available-for-sale debt securities will now be recorded through an allowance for expected credit losses rather than as a direct write-down to the security. The amendments in this update are effective for reporting periods beginning after December 15, 2019, with early adoption permitted for reporting periods beginning after December 15, 2018. The Company adopted this guidance on January 1, 2020. The adoption did not have a material impact on the Company’s consolidated financial statements and did not result in a cumulative-effect adjustment to beginning retained earnings. Recently Issued Accounting Standards In March 2020, the FASB issued ASU No. 2020-04 — Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The amendments in this update are elective and provide optional expedients and exceptions to GAAP for contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this update apply only to contracts, hedging relationships, and other transactions that reference London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued because of reference rate reform. This guidance is effective beginning on March 12, 2020, and the Company may elect to apply the amendments prospectively through December 31, 2022. The Company is currently evaluating the impact this guidance may have on its consolidated financial statements and related disclosures. In December 2019, the FASB issued ASU No. 2019-12 — Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. It also clarifies and simplifies other aspects of the accounting for income taxes. This guidance is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact this guidance may have on its consolidated financial statements and related disclosures. |
Credit Loss, Financial Instrument | The Company has identified accounts receivable and vendor rebates receivable as portfolio segments in accordance with ASU No. 2016-13, Financial Instruments - Credit Losses |
Current Expected Credit Losses
Current Expected Credit Losses (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Credit Loss [Abstract] | |
Accounts Receivable, Allowance for Credit Loss | The change in the allowance for expected credit losses from December 31, 2019 to March 31, 2020, consists of the following (in thousands): Allowance for Expected Credit Losses Balance at December 31, 2019 $ (3,169) Provision for expected credit losses (652) Write-offs 1,630 Recoveries (21) Balance at March 31, 2020 $ (2,212) |
Right-of-Use ("ROU") Assets a_2
Right-of-Use ("ROU") Assets and Lease Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Schedule Of Operating And Finance Lease Liabilities | The following table summarizes the Company's operating and finance leases by country as of March 31, 2020 (in thousands): March 31, 2020 United States Canada Total Operating leases: Real estate ROU assets, gross $ 120,607 $ 15,576 $ 136,183 Accumulated amortization (26,651) (4,127) (30,778) Real estate ROU assets, net $ 93,956 $ 11,449 $ 105,405 Real estate lease liabilities $ 93,665 $ 11,562 $ 105,227 Vehicle and equipment ROU assets, gross $ 17,481 $ 2,492 $ 19,973 Accumulated amortization (3,346) (332) (3,678) Vehicle and equipment ROU assets, net $ 14,135 $ 2,160 $ 16,295 Vehicle and equipment lease liabilities $ 14,080 $ 2,149 $ 16,229 Total operating ROU assets, net $ 108,091 $ 13,609 $ 121,700 Total operating lease liabilities $ 107,745 $ 13,711 $ 121,456 Finance leases included in property and equipment, net: Vehicle and equipment ROU assets, gross $ 6,301 $ 2,640 $ 8,941 Accumulated depreciation (2,299) (760) (3,059) Total finance ROU assets, net $ 4,002 $ 1,880 $ 5,882 Total finance lease liabilities $ 4,252 $ 2,261 $ 6,513 The following table summarizes the Company's operating and finance leases by country as of December 31, 2019 (in thousands): December 31, 2019 United States Canada Total Operating leases: Real estate ROU assets, gross $ 114,202 $ 16,544 $ 130,746 Accumulated amortization (21,337) (3,406) (24,743) Real estate ROU assets, net $ 92,865 $ 13,138 $ 106,003 Real estate lease liabilities $ 92,319 $ 13,240 $ 105,559 Vehicle and equipment ROU assets, gross $ 14,665 $ 2,751 $ 17,416 Accumulated amortization (2,592) (265) (2,857) Vehicle and equipment ROU assets, net $ 12,073 $ 2,486 $ 14,559 Vehicle and equipment lease liabilities $ 12,037 $ 2,472 $ 14,509 Total operating ROU assets, net $ 104,938 $ 15,624 $ 120,562 Total operating lease liabilities $ 104,356 $ 15,712 $ 120,068 Finance leases included in property and equipment, net: Vehicle and equipment ROU assets, gross $ 6,341 $ 2,863 $ 9,204 Accumulated depreciation (1,892) (670) (2,562) Total finance ROU assets, net $ 4,449 $ 2,193 $ 6,642 Total finance lease liabilities $ 4,777 $ 2,607 $ 7,384 |
Lease, Cost | The components of lease cost are as follows (in thousands): Three Months Ended March 31, 2020 2019 Income Statement Classification Operating leases: Lease cost $ 8,790 $ 8,052 Selling, general and administrative expenses Variable lease cost 1,260 1,053 Selling, general and administrative expenses Operating lease cost 10,050 9,105 Finance leases: Amortization of ROU assets 601 668 Depreciation and amortization Interest on lease liabilities 91 124 Interest expense Finance lease cost 692 792 Total lease cost $ 10,742 $ 9,897 Supplemental cash flow information for leases is as follows (in thousands): Three Months Ended March 31, 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 7,335 $ 6,618 Financing cash flows from finance leases $ 678 $ 654 Right-of-use-assets obtained in exchange for lease obligations: Finance leases $ 20 $ 185 Operating leases $ 10,152 $ 120,555 The weighted-average remaining lease term and weighted-average discount rate for operating and finance leases are as follows: March 31, 2020 December 31, 2019 Operating Leases Finance Leases Operating Leases Finance Leases Weighted average remaining lease term (years) 5.26 3.04 5.32 3.26 Weighted average discount rate 4.3% 5.2% 4.4% 5.2% |
Finance Lease, Liability, Maturity | The following table reconciles the undiscounted future lease payments for operating and finance leases to operating and finance lease liabilities recorded on the balance sheet as of March 31, 2020 (in thousands): Operating Leases Finance Leases Total 2020 (excluding the three months ended March 31, 2020) $ 25,028 $ 2,108 $ 27,136 2021 31,244 2,400 33,644 2022 25,817 1,456 27,273 2023 20,220 921 21,141 2024 13,437 88 13,525 2025 and thereafter 19,925 54 19,979 Total lease payments 135,671 7,027 142,698 Less: amount representing interest (14,215) (514) (14,729) Total $ 121,456 $ 6,513 $ 127,969 Current portion of lease liabilities $ 28,636 $ 2,502 $ 31,138 Long-term portion of lease liabilities $ 92,820 $ 4,011 $ 96,831 The following table reconciles the undiscounted future lease payments for operating and finance leases to operating and finance lease liabilities recorded on the balance sheet as of December 31, 2019 (in thousands): Operating Leases Finance Leases Total 2020 $ 32,257 $ 2,908 $ 35,165 2021 29,816 2,445 32,261 2022 24,429 1,496 25,925 2023 18,704 976 19,680 2024 11,882 95 11,977 2025 and thereafter 17,730 87 17,817 Total lease payments 134,818 8,007 142,825 Less: amount representing interest (14,750) (623) (15,373) Total $ 120,068 $ 7,384 $ 127,452 Current portion of lease liabilities $ 27,689 $ 2,618 $ 30,307 Long-term portion of lease liabilities $ 92,379 $ 4,766 $ 97,145 |
Lessee, Operating Lease, Liability, Maturity | The following table reconciles the undiscounted future lease payments for operating and finance leases to operating and finance lease liabilities recorded on the balance sheet as of March 31, 2020 (in thousands): Operating Leases Finance Leases Total 2020 (excluding the three months ended March 31, 2020) $ 25,028 $ 2,108 $ 27,136 2021 31,244 2,400 33,644 2022 25,817 1,456 27,273 2023 20,220 921 21,141 2024 13,437 88 13,525 2025 and thereafter 19,925 54 19,979 Total lease payments 135,671 7,027 142,698 Less: amount representing interest (14,215) (514) (14,729) Total $ 121,456 $ 6,513 $ 127,969 Current portion of lease liabilities $ 28,636 $ 2,502 $ 31,138 Long-term portion of lease liabilities $ 92,820 $ 4,011 $ 96,831 The following table reconciles the undiscounted future lease payments for operating and finance leases to operating and finance lease liabilities recorded on the balance sheet as of December 31, 2019 (in thousands): Operating Leases Finance Leases Total 2020 $ 32,257 $ 2,908 $ 35,165 2021 29,816 2,445 32,261 2022 24,429 1,496 25,925 2023 18,704 976 19,680 2024 11,882 95 11,977 2025 and thereafter 17,730 87 17,817 Total lease payments 134,818 8,007 142,825 Less: amount representing interest (14,750) (623) (15,373) Total $ 120,068 $ 7,384 $ 127,452 Current portion of lease liabilities $ 27,689 $ 2,618 $ 30,307 Long-term portion of lease liabilities $ 92,379 $ 4,766 $ 97,145 |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the estimated fair value of the assets acquired as of the acquisition date (in thousands): Three Months Ended March 31, 2020 Assets acquired: Accounts receivable $ 4,210 Inventories 2,228 Property and equipment 1,810 Other assets 18 Intangible assets 372 Total assets acquired $ 8,638 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The change in goodwill from December 31, 2019 to March 31, 2020, consists of the following (in thousands): Carrying Value Balance at December 31, 2019 $ 495,724 Goodwill acquired — Purchase price allocation adjustments from prior periods 89 Impact of foreign currency exchange rates (2,745) Balance at March 31, 2020 $ 493,068 |
Schedule of Finite-Lived Intangible Assets | The following is the gross carrying value and accumulated amortization of the Company’s identifiable intangible assets as of March 31, 2020 and December 31, 2019 (in thousands): March 31, 2020 December 31, 2019 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Tradenames $ 15,980 $ (14,348) $ 1,632 $ 15,980 $ (13,563) $ 2,417 Customer relationships 266,577 (166,757) 99,820 267,781 (156,337) 111,444 $ 282,557 $ (181,105) $ 101,452 $ 283,761 $ (169,900) $ 113,861 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable | Debt consists of the following as of March 31, 2020 and December 31, 2019 (in thousands): March 31, 2020 December 31, 2019 2018 Term Loan Facility $ 444,375 $ 445,500 Unamortized deferred financing and issuance costs - term loan (6,083) (6,367) 2018 Revolving Credit Facility 235,000 89,000 Unamortized deferred financing costs - revolving credit facility (3,420) (3,677) $ 669,872 $ 524,456 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Loss | The components of accumulated other comprehensive loss for the three months ended March 31, 2020, are as follows (in thousands): Foreign Currency Translation Gains (Losses) Unrealized Loss on Derivatives, Net of Taxes Total Balance at December 31, 2019 $ 848 $ (3,312) $ (2,464) Other comprehensive loss (7,043) (499) (7,542) Balance at March 31, 2020 $ (6,195) $ (3,811) $ (10,006) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The estimated carrying amount and fair value of the Company’s financial instruments and other assets and liabilities measured and recorded at fair value on a recurring basis as of March 31, 2020, is as follows (in thousands): Fair Value Measurements as of March 31, 2020 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Fair Value Recurring: Non-current assets and liabilities Derivative assets (Note 6) $ — $ 4,508 $ — $ 4,508 Derivative liabilities (Note 6) $ — $ (12,851) $ — $ (12,851) The estimated carrying amount and fair value of the Company’s financial instruments and other assets and liabilities measured and recorded at fair value on a recurring basis as of December 31, 2019, is as follows (in thousands): Fair Value Measurements as of 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 Recurring: Non-current liabilities Derivative liabilities (Note 6) $ — $ (7,649) $ — $ (7,649) |
Segments (Tables)
Segments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Reconciliation of Operating Profit (Loss) from Segments to Consolidated | The following table sets forth property, plant and equipment, right-of-use assets, goodwill and intangibles by geographic area (in thousands): March 31, 2020 December 31, 2019 Property, plant and equipment, net United States $ 141,045 $ 135,907 Canada 13,402 14,281 Total property, plant and equipment, net $ 154,447 $ 150,188 Right-of-use assets, net United States $ 108,091 $ 104,938 Canada 13,609 15,624 Total right-of-use assets, net $ 121,700 $ 120,562 Goodwill United States $ 463,298 $ 463,208 Canada 29,770 32,516 Total goodwill $ 493,068 $ 495,724 Intangibles, net United States $ 91,802 $ 102,563 Canada 9,650 11,298 Total intangibles, net $ 101,452 $ 113,861 |
Schedule of Revenue from External Customers by Products and Services | The Company’s net sales by major product line are as follows (dollars in thousands): Three Months Ended March 31, Change 2020 2019 $ % Wallboard $ 202,268 38.6 % $ 202,914 39.4 % $ (646) (0.3) % Suspended ceiling systems 98,506 18.8 % 88,996 17.3 % 9,510 10.7 % Metal framing 93,334 17.8 % 99,251 19.3 % (5,917) (6.0) % Complementary and other products 130,150 24.8 % 123,711 24.0 % 6,439 5.2 % Total net sales $ 524,258 100.0 % $ 514,872 100.0 % $ 9,386 1.8 % |
Other Current Liabilities (Tabl
Other Current Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Other Current Liabilities | The balance in other current liabilities consists of the following (in thousands): March 31, 2020 December 31, 2019 Accrued expenses $ 2,989 $ 5,652 Accrued interest 342 74 Accrued other 9,311 12,831 Total other current liabilities $ 12,642 $ 18,557 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following are the number of shares of common stock used to compute the basic and diluted earnings (loss) per share for each period: Three Months Ended March 31, 2020 2019 Weighted average shares used in basic computations 43,045,692 42,932,024 Dilutive effect of stock options and restricted stock units 497,127 12,805 Weighted average shares used in diluted computations 43,542,819 42,944,829 |
Business and Basis of Present_2
Business and Basis of Presentation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Restructuring Cost and Reserve [Line Items] | ||
Operating cash flows from operating leases | $ 7,335 | $ 6,618 |
Reclassification, Statement of Cash Flows | ||
Restructuring Cost and Reserve [Line Items] | ||
Operating cash flows from operating leases | $ 6,600 |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) $ in Thousands | Nov. 01, 2018 | Mar. 31, 2020 | Mar. 31, 2019 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Gain (loss) on sale of discontinued operations, net of tax | $ 0 | $ (1,346) | |
Discontinued Operations, Disposed of by Sale | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Total cash consideration | $ 122,500 | ||
Gain (loss) on sale of discontinued operations, net of tax | $ 13,700 | $ (1,300) |
Current Expected Credit Losse_2
Current Expected Credit Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Accounts Receivable, Allowance for Credit Loss | $ (3,169) | |
Provision for expected credit losses | (652) | $ (636) |
Write-offs | 1,630 | |
Recoveries | (21) | |
Accounts Receivable, Allowance for Credit Loss | $ (2,212) |
Right-of-Use ("ROU") Assets a_3
Right-of-Use ("ROU") Assets and Lease Liabilities - Operating and Finance Lease Liability (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020USD ($)renewal_option | Dec. 31, 2019USD ($) | |
Leases [Abstract] | ||
Number of renewal options | renewal_option | 1 | |
Operating leases: | ||
Right-of-use asset | $ 121,700 | $ 120,562 |
Operating lease liability | 121,456 | 120,068 |
Finance leases included in property and equipment, net: | ||
Vehicle and equipment ROU assets, gross | 8,941 | 9,204 |
Accumulated depreciation | (3,059) | (2,562) |
Total finance ROU assets, net | 5,882 | 6,642 |
Total finance lease liabilities | 6,513 | 7,384 |
Real Estate | ||
Operating leases: | ||
Operating lease, right-of-use asset, gross | 136,183 | 130,746 |
Accumulated amortization | (30,778) | (24,743) |
Right-of-use asset | 105,405 | 106,003 |
Operating lease liability | 105,227 | 105,559 |
Vehicles and equipment | ||
Operating leases: | ||
Operating lease, right-of-use asset, gross | 19,973 | 17,416 |
Accumulated amortization | (3,678) | (2,857) |
Right-of-use asset | 16,295 | 14,559 |
Operating lease liability | 16,229 | 14,509 |
United States | ||
Operating leases: | ||
Right-of-use asset | 108,091 | 104,938 |
Operating lease liability | 107,745 | 104,356 |
Finance leases included in property and equipment, net: | ||
Vehicle and equipment ROU assets, gross | 6,301 | 6,341 |
Accumulated depreciation | (2,299) | (1,892) |
Total finance ROU assets, net | 4,002 | 4,449 |
Total finance lease liabilities | 4,252 | 4,777 |
United States | Real Estate | ||
Operating leases: | ||
Operating lease, right-of-use asset, gross | 120,607 | 114,202 |
Accumulated amortization | (26,651) | (21,337) |
Right-of-use asset | 93,956 | 92,865 |
Operating lease liability | 93,665 | 92,319 |
United States | Vehicles and equipment | ||
Operating leases: | ||
Operating lease, right-of-use asset, gross | 17,481 | 14,665 |
Accumulated amortization | (3,346) | (2,592) |
Right-of-use asset | 14,135 | 12,073 |
Operating lease liability | 14,080 | 12,037 |
Canada | ||
Operating leases: | ||
Right-of-use asset | 13,609 | 15,624 |
Operating lease liability | 13,711 | 15,712 |
Finance leases included in property and equipment, net: | ||
Vehicle and equipment ROU assets, gross | 2,640 | 2,863 |
Accumulated depreciation | (760) | (670) |
Total finance ROU assets, net | 1,880 | 2,193 |
Total finance lease liabilities | 2,261 | 2,607 |
Canada | Real Estate | ||
Operating leases: | ||
Operating lease, right-of-use asset, gross | 15,576 | 16,544 |
Accumulated amortization | (4,127) | (3,406) |
Right-of-use asset | 11,449 | 13,138 |
Operating lease liability | 11,562 | 13,240 |
Canada | Vehicles and equipment | ||
Operating leases: | ||
Operating lease, right-of-use asset, gross | 2,492 | 2,751 |
Accumulated amortization | (332) | (265) |
Right-of-use asset | 2,160 | 2,486 |
Operating lease liability | $ 2,149 | $ 2,472 |
Right-of-Use ("ROU") Assets a_4
Right-of-Use ("ROU") Assets and Lease Liabilities - Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Operating leases: | |||
Lease cost | $ 8,790 | $ 8,052 | |
Variable lease cost | 1,260 | 1,053 | |
Operating lease cost | 10,050 | 9,105 | |
Finance leases: | |||
Amortization of ROU assets | 601 | 668 | |
Interest on lease liabilities | 91 | 124 | |
Finance lease cost | 692 | 792 | |
Total lease cost | 10,742 | 9,897 | |
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash flows from operating leases | 7,335 | 6,618 | |
Financing cash flows from finance leases | 678 | 654 | |
Right-of-use-assets obtained in exchange for lease obligations: | |||
Finance leases | 20 | 185 | |
Operating leases | $ 10,152 | $ 120,555 | |
Operating Leases | |||
Weighted average remaining lease term (years) | 5 years 3 months 3 days | 5 years 3 months 25 days | |
Weighted average discount rate | 4.30% | 4.40% | |
Finance Leases | |||
Weighted average remaining lease term (years) | 5.20% | 5.20% | |
Weighted average discount rate | 3 years 14 days | 3 years 3 months 3 days |
Right-of-Use ("ROU") Assets a_5
Right-of-Use ("ROU") Assets and Lease Liabilities - Schedule of Operating and Finance Lease Maturity (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Operating Leases | ||
2020 (excluding the three months ended March 31, 2020) | $ 25,028 | $ 32,257 |
2021 | 31,244 | 29,816 |
2022 | 25,817 | 24,429 |
2023 | 20,220 | 18,704 |
2024 | 13,437 | 11,882 |
2025 and thereafter | 19,925 | 17,730 |
Total lease payments | 135,671 | 134,818 |
Less: amount representing interest | (14,215) | (14,750) |
Total | 121,456 | 120,068 |
Current portion of lease liabilities | 28,636 | 27,689 |
Long-term portion of lease liabilities | 92,820 | 92,379 |
Finance Leases | ||
2020 (excluding the three months ended March 31, 2020) | 2,108 | 2,908 |
2021 | 2,400 | 2,445 |
2022 | 1,456 | 1,496 |
2023 | 921 | 976 |
2024 | 88 | 95 |
2025 and thereafter | 54 | 87 |
Total lease payments | 7,027 | 8,007 |
Less: amount representing interest | (514) | (623) |
Total | 6,513 | 7,384 |
Current portion of lease liabilities | 2,502 | 2,618 |
Long-term portion of lease liabilities | 4,011 | 4,766 |
Total | ||
2020 (excluding the three months ended March 31, 2020) | 27,136 | 35,165 |
2021 | 33,644 | 32,261 |
2022 | 27,273 | 25,925 |
2023 | 21,141 | 19,680 |
2024 | 13,525 | 11,977 |
2025 and thereafter | 19,979 | 17,817 |
Total lease payments | 142,698 | 142,825 |
Less: amount representing interest | (14,729) | (15,373) |
Total | 127,969 | 127,452 |
Current portion of lease liabilities | 31,138 | 30,307 |
Long-term portion of lease liabilities | $ 96,831 | $ 97,145 |
Derivatives and Hedging Activ_2
Derivatives and Hedging Activities (Details) $ in Thousands | May 15, 2019USD ($) | Jan. 01, 2019USD ($) | Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($) | Jan. 31, 2019USD ($)interest_rate_swap |
Derivative [Line Items] | ||||||
Gain (loss) on derivatives | $ (499) | |||||
Net of tax effect on unrealized gain (loss) on derivatives before 2017-12 adoption | $ (1,300) | |||||
Adoption of derivative guidance | 0 | |||||
Interest Rate Swap | ||||||
Derivative [Line Items] | ||||||
Gain (loss) on derivatives | (4,900) | (2,200) | ||||
Derivative tax amount | 1,700 | 800 | ||||
Interest Rate Swap | Other Noncurrent Liabilities | ||||||
Derivative [Line Items] | ||||||
Fair value asset of derivative instrument | 12,900 | $ 6,200 | ||||
Designated as Hedging Instrument | Foreign Exchange Contract | ||||||
Derivative [Line Items] | ||||||
Notional foreign exchange contract outstanding | 81,300 | |||||
Gain (loss) on derivatives | $ 2,500 | 4,400 | ||||
Derivative tax amount | 800 | 1,500 | ||||
Loss related to other comprehensive income | 1,400 | |||||
Net of tax effect on unrealized gain (loss) on derivatives before 2017-12 adoption | (500) | |||||
Designated as Hedging Instrument | Foreign Exchange Contract | Contract Termination | ||||||
Derivative [Line Items] | ||||||
Notional foreign exchange contract outstanding | $ 88,000 | |||||
Designated as Hedging Instrument | Foreign Exchange Contract | New Foreign Exchange Contract | ||||||
Derivative [Line Items] | ||||||
Notional foreign exchange contract outstanding | 81,300 | |||||
Designated as Hedging Instrument | Foreign Exchange Contract | Other Noncurrent Assets | ||||||
Derivative [Line Items] | ||||||
Fair value asset of derivative instrument | $ 4,500 | 1,400 | ||||
London Interbank Offered Rate (LIBOR) | Interest Rate Swap | ||||||
Derivative [Line Items] | ||||||
Number of interest rate swaps | interest_rate_swap | 2 | |||||
Notional foreign exchange contract outstanding | $ 310,000 | |||||
Variable interest rate | 2.52% | |||||
Other Comprehensive Loss | ||||||
Derivative [Line Items] | ||||||
Adoption of derivative guidance | 172 | |||||
Other Comprehensive Loss | Adoption of derivatives guidance | Designated as Hedging Instrument | ||||||
Derivative [Line Items] | ||||||
Adoption of derivative guidance | $ 200 | |||||
Retained Earnings | ||||||
Derivative [Line Items] | ||||||
Adoption of derivative guidance | $ (172) | $ 200 | ||||
Retained Earnings | Adoption of derivatives guidance | Designated as Hedging Instrument | ||||||
Derivative [Line Items] | ||||||
Adoption of derivative guidance | $ 200 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) $ in Millions | Feb. 03, 2020USD ($)branch |
Business Acquisition [Line Items] | |
Consideration transferred | $ | $ 8.6 |
Insulation Distributors, Inc. | |
Business Acquisition [Line Items] | |
Number of branch locations | branch | 2 |
Acquisitions - Schedule of Reco
Acquisitions - Schedule of Recognized Identified Assets Acquired and Liabilities Assumed (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Assets acquired: | |
Accounts receivable | $ 4,210 |
Inventories | 2,228 |
Property and equipment | 1,810 |
Other assets | 18 |
Intangible assets | 372 |
Total assets acquired | $ 8,638 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Schedule of Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 495,724 |
Goodwill acquired | 0 |
Purchase price allocation adjustments from prior periods | 89 |
Impact of foreign currency exchange rates | (2,745) |
Ending balance | $ 493,068 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Schedule of Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 282,557 | $ 283,761 |
Accumulated Amortization | (181,105) | (169,900) |
Net Carrying Amount | 101,452 | 113,861 |
Tradenames | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 15,980 | 15,980 |
Accumulated Amortization | (14,348) | (13,563) |
Net Carrying Amount | 1,632 | 2,417 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 266,577 | 267,781 |
Accumulated Amortization | (166,757) | (156,337) |
Net Carrying Amount | $ 99,820 | $ 111,444 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Narrative (Details) | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Weighted average useful life | 3 years 9 months 18 days |
Long-Term Debt - Schedule of No
Long-Term Debt - Schedule of Notes Payable (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Long-term debt | $ 669,872 | $ 524,456 |
2018 Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 235,000 | 89,000 |
Unamortized deferred financing and issuance costs - term loan | (3,420) | (3,677) |
2018 Term Loan Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 444,375 | 445,500 |
Unamortized deferred financing and issuance costs - term loan | $ (6,083) | $ (6,367) |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) - USD ($) | Aug. 13, 2018 | Mar. 31, 2020 | Dec. 31, 2019 | Nov. 09, 2018 |
2018 Term Loan Facility | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | $ 444,375,000 | $ 445,500,000 | ||
Revolving asset-based credit facility | 6,083,000 | 6,367,000 | ||
2018 U.S. Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | $ 50,000,000 | |||
Maximum borrowing capacity | 375,000,000 | |||
2018 Canadian Revolving Credit Subfacility | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | 10,000,000 | |||
Maximum borrowing capacity | 75,000,000 | |||
2018 FILO Facility | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 25,000,000 | |||
Terminated debt amount | $ 25,000,000 | |||
2018 ABL Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | 375,000,000 | |||
Maximum borrowing capacity | 235,000,000 | |||
Percentage of eligible trade accounts | 85.00% | |||
Percentage of eligible credit card accounts | 90.00% | |||
Percentage of eligible inventory | 75.00% | |||
Percentage of net orderly liquidation value of eligible inventory | 85.00% | |||
Percentage of net orderly liquidation value of eligible qualifying equipment | 85.00% | |||
Percentage of capped loan limit of eligible qualifying equipment | 15.00% | |||
Total net leverage ratio (not more than) | 6 | |||
Remaining borrowing capacity | $ 140,000,000 | |||
Weighted average interest rate | 2.70% | |||
2018 ABL Credit Facility | Minimum | ||||
Debt Instrument [Line Items] | ||||
Commitment fee percentage | 0.25% | |||
2018 ABL Credit Facility | Maximum | ||||
Debt Instrument [Line Items] | ||||
Commitment fee percentage | 0.375% | |||
2018 ABL Credit Facility | Alternate Base Rate Or Canadian Prime Rate, Plus An Applicable Margin | Minimum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 0.25% | |||
2018 ABL Credit Facility | Alternate Base Rate Or Canadian Prime Rate, Plus An Applicable Margin | Maximum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 0.75% | |||
2018 ABL Credit Facility | LIBOR Or Canadian CDOR Rate Plus An Applicable Margin | Minimum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 1.25% | |||
2018 ABL Credit Facility | LIBOR Or Canadian CDOR Rate Plus An Applicable Margin | Maximum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 1.75% | |||
Senior Notes | 2018 Term Loan Facility | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | $ 450,000,000 | |||
Percentage of scheduled quarterly payments | 0.25% | |||
Period of closing date for initial term loan | 7 years | |||
Senior Notes | 2018 Term Loan Facility | London Interbank Offered Rate (LIBOR) | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 0.00% | |||
First lien net leverage ratio | 4 | |||
Senior Notes | 2018 Term Loan Facility | LIBOR Applicable Margin Rate | Minimum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 3.00% | |||
Senior Notes | 2018 Term Loan Facility | LIBOR Applicable Margin Rate | Maximum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 3.25% | |||
Senior Notes | 2018 Term Loan Facility | Federal Funds Effective Swap Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 0.50% | |||
Senior Notes | 2018 Term Loan Facility | Base Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 1.00% | |||
First lien net leverage ratio | 4 | |||
Senior Notes | 2018 Term Loan Facility | Base Rate Applicable Margin Rate | Minimum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 2.00% | |||
Senior Notes | 2018 Term Loan Facility | Base Rate Applicable Margin Rate | Maximum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 2.25% | |||
Letter of Credit | 2018 Canadian Revolving Credit Subfacility | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | $ 5,000,000 | |||
Letter of Credit | 2018 ABL Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | $ 10,000,000 | |||
Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | $ 235,000,000 | 89,000,000 | ||
Revolving asset-based credit facility | 3,420,000 | 3,677,000 | ||
Revolving Credit Facility | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Unamortized debt issuance costs | 9,500,000 | 10,000,000 | ||
Notes Payable, Noncurrent | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Revolving asset-based credit facility | 6,100,000 | 6,400,000 | ||
Other Long-term Assets | Revolving Credit Facility | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Revolving asset-based credit facility | $ 3,400,000 | $ 3,600,000 |
Tax Receivable Agreement (Detai
Tax Receivable Agreement (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Jan. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Tax receivable agreement, percentage of income taxes | 90.00% | |||
Liability for tax receivable agreement | $ 89,500 | $ 117,400 | ||
Reduction in tax receivable agreement liability | $ 16,700 | $ 27,850 | $ 16,667 | $ 27,900 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | $ 408,165 | ||
Other comprehensive loss | (7,542) | $ (1,926) | |
Ending balance | 416,030 | $ 408,165 | |
Adoption of derivative guidance | 0 | ||
Retained Earnings | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Adoption of derivative guidance | (172) | 200 | |
Foreign Currency Translation Gains (Losses) | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | 848 | ||
Other comprehensive loss | (7,043) | ||
Ending balance | (6,195) | 848 | |
Unrealized Loss on Derivatives, Net of Taxes | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (3,312) | ||
Other comprehensive loss | (499) | ||
Ending balance | (3,811) | (3,312) | |
AOCI Attributable to Parent | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (2,464) | ||
Ending balance | $ (10,006) | $ (2,464) | |
Adoption of derivative guidance | $ 172 |
Commitment and Contingencies (D
Commitment and Contingencies (Details) $ in Millions | 1 Months Ended |
Feb. 29, 2020USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Payments for legal settlements | $ 8.6 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Non-current assets and liabilities | ||
Derivative assets | $ 4,508 | |
Derivative liability | (12,851) | $ (7,649) |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Non-current assets and liabilities | ||
Derivative assets | 0 | |
Derivative liability | 0 | 0 |
Significant Other Observable Inputs (Level 2) | ||
Non-current assets and liabilities | ||
Derivative assets | 4,508 | |
Derivative liability | (12,851) | (7,649) |
Significant Unobservable Inputs (Level 3) | ||
Non-current assets and liabilities | ||
Derivative assets | 0 | |
Derivative liability | $ 0 | $ 0 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Income tax expense (benefit) | $ 5,267 | $ 2,045 |
Effective tax rate | 26.80% | 29.80% |
Segments - Narrative (Details)
Segments - Narrative (Details) - segment | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Segment Reporting [Abstract] | ||
Number of reportable segments | 1 | |
Segment Reporting Information [Line Items] | ||
Number of reportable segments | 1 | |
Sales Revenue, Net | Geographic Concentration Risk | United States | ||
Segment Reporting Information [Line Items] | ||
Concentration risk, percentage | 90.50% | 90.60% |
Sales Revenue, Net | Geographic Concentration Risk | Canada | ||
Segment Reporting Information [Line Items] | ||
Concentration risk, percentage | 9.50% | 9.40% |
Segments - Schedule of Geograph
Segments - Schedule of Geographic Areas (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Segment Reporting Information [Line Items] | ||
Total property, plant and equipment, net | $ 154,447 | $ 150,188 |
Right-of-use assets, net | 121,700 | 120,562 |
Goodwill | 493,068 | 495,724 |
Intangibles, net | 101,452 | 113,861 |
United States | ||
Segment Reporting Information [Line Items] | ||
Total property, plant and equipment, net | 141,045 | 135,907 |
Right-of-use assets, net | 108,091 | 104,938 |
Goodwill | 463,298 | 463,208 |
Intangibles, net | 91,802 | 102,563 |
Canada | ||
Segment Reporting Information [Line Items] | ||
Total property, plant and equipment, net | 13,402 | 14,281 |
Right-of-use assets, net | 13,609 | 15,624 |
Goodwill | 29,770 | 32,516 |
Intangibles, net | $ 9,650 | $ 11,298 |
Segments - Schedule of Net Sale
Segments - Schedule of Net Sales From External Customers (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenue from External Customer [Line Items] | ||
Net sales | $ 524,258 | $ 514,872 |
Percentage of net sales | 100.00% | 100.00% |
Change in net sales | $ 9,386 | |
Percentage change in net sales | 1.80% | |
Wallboard | ||
Revenue from External Customer [Line Items] | ||
Net sales | $ 202,268 | $ 202,914 |
Percentage of net sales | 38.60% | 39.40% |
Change in net sales | $ (646) | |
Percentage change in net sales | (0.30%) | |
Suspended ceiling systems | ||
Revenue from External Customer [Line Items] | ||
Net sales | $ 98,506 | $ 88,996 |
Percentage of net sales | 18.80% | 17.30% |
Change in net sales | $ 9,510 | |
Percentage change in net sales | 10.70% | |
Metal framing | ||
Revenue from External Customer [Line Items] | ||
Net sales | $ 93,334 | $ 99,251 |
Percentage of net sales | 17.80% | 19.30% |
Change in net sales | $ (5,917) | |
Percentage change in net sales | (6.00%) | |
Complementary and other products | ||
Revenue from External Customer [Line Items] | ||
Net sales | $ 130,150 | $ 123,711 |
Percentage of net sales | 24.80% | 24.00% |
Change in net sales | $ 6,439 | |
Percentage change in net sales | 5.20% |
Other Current Liabilities (Deta
Other Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Other Liabilities Disclosure [Abstract] | ||
Accrued expenses | $ 2,989 | $ 5,652 |
Accrued interest | 342 | 74 |
Accrued other | 9,311 | 12,831 |
Total other current liabilities | $ 12,642 | $ 18,557 |
Earnings (Loss) Per Share (Deta
Earnings (Loss) Per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Earnings Per Share [Abstract] | ||
Weighted average shares used in basic computations (in shares) | 43,045,692 | 42,932,024 |
Dilutive effect of stock options and restricted stock units (in shares) | 497,127 | 12,805 |
Weighted average shares used in diluted computations (in shares) | 43,542,819 | 42,944,829 |
Antidilutive securities (in shares) | 960,191 | 628,220 |