Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 01, 2019 | |
Document and Entity Information [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) | 42,989,840 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2019 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Entity Current Reporting Status | Yes | |
Entity Emerging Growth Company | false | |
Entity Smaller Reporting Company | true | |
Entity Shell Company | false | |
Entity Interactive Data Current | Yes |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Net sales | $ 564,906 | $ 542,273 | $ 1,639,689 | $ 1,528,153 |
Cost of goods sold | 393,111 | 388,236 | 1,143,397 | 1,093,412 |
Gross profit | 171,795 | 154,037 | 496,292 | 434,741 |
Operating expenses: | ||||
Selling, general and administrative expenses | 123,907 | 113,279 | 363,872 | 328,088 |
Depreciation and amortization | 20,218 | 19,771 | 60,911 | 56,922 |
Total operating expenses | 144,125 | 133,050 | 424,783 | 385,010 |
Income from operations | 27,670 | 20,987 | 71,509 | 49,731 |
Loss on extinguishment of debt | 0 | (58,475) | 0 | (58,475) |
Interest expense | (9,118) | (12,576) | (26,015) | (43,028) |
Other (expense) income, net | (89) | (8) | (4) | 126 |
Income (loss) before income taxes | 18,463 | (50,072) | 45,490 | (51,646) |
Income tax expense (benefit) | 5,754 | (12,519) | 13,232 | (13,299) |
Income (loss) from continuing operations | 12,709 | (37,553) | 32,258 | (38,347) |
Income from discontinued operations, net of tax | 0 | 2,772 | 0 | 7,913 |
Loss on sale of discontinued operations, net of tax | (11) | 0 | (1,401) | 0 |
Net income (loss) | $ 12,698 | $ (34,781) | $ 30,857 | $ (30,434) |
Earnings (loss) per share data: | ||||
Earnings (Loss) from continuing operations per share - basic (in dollars per share) | $ 0.30 | $ (0.88) | $ 0.75 | $ (0.89) |
Earnings (Loss) from continuing operations per share - diluted (in dollars per share) | 0.30 | (0.88) | 0.75 | (0.89) |
Earnings (loss) earnings from discontinued operations per share - basic (in dollars per share) | 0 | 0.07 | (0.03) | 0.18 |
Earnings (loss) earnings from discontinued operations per share - diluted (in dollars per share) | 0 | 0.07 | (0.03) | 0.18 |
Earnings per share - basic (in dollars per share) | 0.30 | (0.81) | 0.72 | (0.71) |
Earnings per share - diluted (in dollars per share) | $ 0.30 | $ (0.81) | $ 0.72 | $ (0.71) |
Weighted average shares outstanding: | ||||
Basic (in shares) | 42,988,829 | 42,894,474 | 42,969,797 | 42,889,430 |
Diluted (in shares) | 43,508,678 | 42,917,230 | 43,174,351 | 42,905,273 |
Comprehensive income (loss): | ||||
Net income (loss) | $ 12,698 | $ (34,781) | $ 30,857 | $ (30,434) |
Foreign currency translation adjustment | (984) | 1,481 | 2,317 | (2,724) |
Unrealized gain (loss) on derivatives, net of taxes of $0.1 million and $2.2 million respectively | 344 | (6,436) | ||
Unrealized gain (loss) on derivatives, net of taxes of $0.5 million and $0.5 million, respectively, before 2017-12 adoption | (1,420) | 839 | ||
Total other comprehensive (loss) income | (640) | 61 | (4,119) | (1,885) |
Total comprehensive income (loss) | $ 12,058 | $ (34,720) | $ 26,738 | $ (32,319) |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (UNAUDITED) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||
Net of tax effect on unrealized gain (loss) on derivatives | $ 1 | $ 2.2 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 22,668 | $ 15,299 |
Accounts receivable—net of allowance for doubtful accounts of $3,678 and $3,239, respectively | 314,088 | 276,043 |
Other receivables | 49,284 | 57,472 |
Inventories | 163,280 | 165,989 |
Prepaid expenses and other current assets | 13,321 | 9,053 |
Total current assets | 562,641 | 523,856 |
Property and equipment, net | 153,294 | 151,641 |
Right-of-use assets, net | 117,137 | 0 |
Intangible assets, net | 117,894 | 145,876 |
Goodwill | 490,315 | 484,941 |
Other assets | 5,481 | 10,393 |
Total assets | 1,446,762 | 1,316,707 |
Current liabilities: | ||
Accounts payable | 143,958 | 137,773 |
Accrued payroll and employee benefits | 29,113 | 28,830 |
Accrued taxes | 11,092 | 11,867 |
Current portion of tax receivable agreement | 27,676 | 16,667 |
Current portion of term loan, net | 4,500 | 4,500 |
Current portion of lease liabilities | 29,310 | |
Other current liabilities | 23,650 | 19,979 |
Total current liabilities | 269,299 | 219,616 |
Asset-based revolving credit facility | 134,306 | 146,000 |
Long-term portion of term loan, net | 435,475 | 437,999 |
Tax receivable agreement | 90,272 | 117,948 |
Deferred income taxes, net | 18,586 | 20,678 |
Long-term portion of lease liabilities | 95,045 | |
Other liabilities | 7,957 | 8,117 |
Total liabilities | 1,050,940 | 950,358 |
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; 42,989,840 and 42,907,326 shares issued, respectively | 13 | 13 |
Additional paid-in capital | 335,237 | 332,330 |
Retained earnings | 64,872 | 34,187 |
Accumulated other comprehensive loss | (4,300) | (181) |
Total stockholders' equity | 395,822 | 366,349 |
Total liabilities and stockholders' equity | $ 1,446,762 | $ 1,316,707 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Accounts receivable net of allowance for doubtful accounts | $ 3,678 | $ 3,239 |
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) | 42,989,840 | 42,907,326 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 30,857 | $ (30,434) |
Add: loss on sale of discontinued operations | (1,401) | 0 |
Less: net income from discontinued operations | 0 | 7,913 |
Net income (loss) from continuing operations | 32,258 | (38,347) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities from continuing operations: | ||
Depreciation | 26,173 | 24,383 |
Amortization of intangible assets | 34,738 | 32,539 |
Amortization of debt issuance costs and debt discount | 1,617 | 6,834 |
Loss on extinguishment of debt | 0 | 58,475 |
Inventory fair value purchase accounting adjustment | 234 | 413 |
Provision for doubtful accounts | 2,017 | 1,654 |
Stock-based compensation | 3,056 | 1,512 |
Unrealized gain on derivative instruments, net | 0 | (56) |
(Gain) loss on disposal of property and equipment | (54) | 614 |
Right-of-use assets non-cash expense | 20,586 | 0 |
Deferred income taxes | 63 | (13,038) |
Change in assets and liabilities, net of effects of acquisitions: | ||
Accounts receivable | (32,949) | (65,361) |
Other receivables | 10,520 | 5,361 |
Inventories | 5,623 | (3,244) |
Prepaid expenses and other current assets | (4,198) | (496) |
Other assets | (187) | (1,928) |
Accounts payable | 2,417 | (8,940) |
Accrued payroll and employee benefits | 214 | 7,929 |
Accrued taxes | (860) | 4,783 |
Operating lease liability | (20,034) | 0 |
Other liabilities | 6,019 | (13,960) |
Net cash provided by (used in) operating activities from continuing operations | 87,253 | (873) |
Cash flows from investing activities from continuing operations: | ||
Purchases of property and equipment | (29,369) | (28,157) |
Proceeds from termination of net investment hedge | 3,313 | 0 |
Proceeds from net working capital adjustments related to acquisitions | 461 | 115 |
Proceeds from the disposal of fixed assets | 2,719 | 1,605 |
Acquisitions, net of cash acquired | (21,882) | (70,334) |
Net cash used in investing activities from continuing operations | (44,758) | (96,771) |
Cash flows from financing activities from continuing operations: | ||
Proceeds from asset-based revolving credit facility | 403,454 | 757,298 |
Repayments of asset-based revolving credit facility | (415,178) | (498,964) |
Principal payments for term loan | 3,375 | 0 |
Term loan proceeds | 0 | 450,000 |
Term loan original issuance discount and deferred finance costs | 0 | (7,935) |
Repayment of bond principal | 0 | (575,000) |
Prepayment premium on senior secured notes | 0 | (23,872) |
Payment related to tax receivable agreement | (16,667) | 0 |
Tax withholding payment related to net settlement of equity awards | (155) | (61) |
Principal repayment of finance lease obligations | (2,002) | (2,094) |
Net cash (used in) provided by financing activities from continuing operations | (33,923) | 99,372 |
Net cash used in operating activities from discontinued operations | 0 | (2,063) |
Net cash used in investing activities from discontinued operations | (1,401) | (928) |
Net cash used in financing activities of discontinued operations | 0 | (140) |
Net cash used in discontinued operations | (1,401) | (3,131) |
Effect of exchange rate changes on cash | 198 | (138) |
Net increase (decrease) in cash | 7,369 | (1,541) |
Cash and cash equivalents at beginning of period | 15,299 | 12,101 |
Cash and cash equivalents at end of period | 22,668 | 10,560 |
Supplemental disclosures of cash flow information: | ||
Cash paid for income taxes | 10,401 | 1,504 |
Cash paid for interest | 24,150 | 52,288 |
Supplemental disclosures of non-cash investing and financing activities: | ||
Change in fair value of derivatives, net of tax | 5,663 | 839 |
Goodwill adjustment for purchase price allocation | $ 57 | $ 202 |
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, 2017 | 42,865,407 | ||||
Beginning balance at Dec. 31, 2017 | $ 378,664 | $ 13 | $ 330,113 | $ 46,184 | $ 2,354 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Adoption of tax guidance | 0 | 180 | (180) | ||
Stock-based compensation | 271 | 271 | |||
Vesting of restricted stock units (in shares) | 29,050 | ||||
Vesting of restricted stock units | 0 | ||||
Shares withheld related to net settlement of equity awards (in shares) | (3,205) | ||||
Shares withheld related to net settlement of equity awards | (45) | (45) | |||
Other comprehensive loss | (1,028) | (1,028) | |||
Net income | (1,053) | (1,053) | |||
Ending balance (in shares) at Mar. 31, 2018 | 42,891,252 | ||||
Ending balance at Mar. 31, 2018 | 376,809 | $ 13 | 330,339 | 45,311 | 1,146 |
Beginning balance (in shares) at Dec. 31, 2017 | 42,865,407 | ||||
Beginning balance at Dec. 31, 2017 | 378,664 | $ 13 | 330,113 | 46,184 | 2,354 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | (30,434) | ||||
Ending balance (in shares) at Sep. 30, 2018 | 42,894,965 | ||||
Ending balance at Sep. 30, 2018 | 348,085 | $ 13 | 331,667 | 15,936 | 469 |
Beginning balance (in shares) at Mar. 31, 2018 | 42,891,252 | ||||
Beginning balance at Mar. 31, 2018 | 376,809 | $ 13 | 330,339 | 45,311 | 1,146 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation | 667 | 667 | |||
Vesting of restricted stock units (in shares) | 3,525 | ||||
Vesting of restricted stock units | 0 | ||||
Shares withheld related to net settlement of equity awards (in shares) | (795) | ||||
Shares withheld related to net settlement of equity awards | (11) | (11) | |||
Other comprehensive loss | (735) | (735) | |||
Net income | 5,400 | 5,400 | |||
Ending balance (in shares) at Jun. 30, 2018 | 42,893,982 | ||||
Ending balance at Jun. 30, 2018 | 382,130 | $ 13 | 330,995 | 50,711 | 411 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Adoption of tax guidance | 6 | 6 | |||
Stock-based compensation | 677 | 677 | |||
Vesting of restricted stock units (in shares) | 1,327 | ||||
Vesting of restricted stock units | 0 | ||||
Shares withheld related to net settlement of equity awards (in shares) | (344) | ||||
Shares withheld related to net settlement of equity awards | (5) | (5) | |||
Other comprehensive loss | 58 | 58 | |||
Net income | (34,781) | (34,781) | |||
Ending balance (in shares) at Sep. 30, 2018 | 42,894,965 | ||||
Ending balance at Sep. 30, 2018 | 348,085 | $ 13 | 331,667 | 15,936 | 469 |
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] | |||||
Stock-based compensation | 829 | 829 | |||
Vesting of restricted stock units (in shares) | 93,014 | ||||
Vesting of restricted stock units | 0 | ||||
Shares withheld related to net settlement of equity awards (in shares) | (13,657) | ||||
Shares withheld related to net 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 | 333,029 | 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] | |||||
Net income | 30,857 | ||||
Ending balance (in shares) at Sep. 30, 2019 | 42,989,840 | ||||
Ending balance at Sep. 30, 2019 | 395,822 | $ 13 | 335,237 | 64,872 | (4,300) |
Beginning balance (in shares) at Mar. 31, 2019 | 42,986,683 | ||||
Beginning balance at Mar. 31, 2019 | 368,432 | $ 13 | 333,029 | 37,497 | (2,107) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation | 1,110 | 1,110 | |||
Vesting of restricted stock units (in shares) | 2,149 | ||||
Vesting of restricted stock units | 0 | ||||
Shares withheld related to net settlement of equity awards (in shares) | (722) | ||||
Shares withheld related to net settlement of equity awards | (8) | (8) | |||
Other comprehensive loss | (1,553) | (1,553) | |||
Net income | 14,677 | 14,677 | |||
Ending balance (in shares) at Jun. 30, 2019 | 42,988,110 | ||||
Ending balance at Jun. 30, 2019 | 382,658 | $ 13 | 334,131 | 52,174 | (3,660) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation | 1,117 | 1,117 | |||
Vesting of restricted stock units (in shares) | 2,135 | ||||
Vesting of restricted stock units | 0 | ||||
Shares withheld related to net settlement of equity awards (in shares) | (405) | ||||
Shares withheld related to net settlement of equity awards | (11) | (11) | |||
Other comprehensive loss | (640) | (640) | |||
Net income | 12,698 | 12,698 | |||
Ending balance (in shares) at Sep. 30, 2019 | 42,989,840 | ||||
Ending balance at Sep. 30, 2019 | $ 395,822 | $ 13 | $ 335,237 | $ 64,872 | $ (4,300) |
Business and Basis of Presentat
Business and Basis of Presentation | 9 Months Ended |
Sep. 30, 2019 | |
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. Based in Santa Ana, California, the Company employs more than 3,400 people and operates more than 175 branches across the U.S. and Canada. Organization The Company was formed on October 27, 2016 (inception). The initial stockholder of the Company was LSF9 Cypress Parent 2 LLC ("Parent 2") which 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 for which historical financial information is included in these results of operations, 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, 2018, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 26, 2019 (the "2018 10-K"). |
Recently Adopted and Issued Acc
Recently Adopted and Issued Accounting Standards | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Recently Adopted and Issued Accounting Standards | Recently Adopted and Issued Accounting Standards Recently Adopted Accounting Standards In August 2017, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities , which amends the hedge accounting recognition and presentation requirements in Accounting Standards Codification ("ASC") Topic 815. This amendment is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The Company adopted this guidance on January 1, 2019, and the adoption did not have a material impact on the Company’s consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) ("ASU No. 2016-02"). ASU No. 2016-02 establishes a right-of-use model that requires a lessee to record a right-of-use asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases are classified as either "finance" or "operating," with such classification affecting the pattern of expense recognition in the income statement. This update was effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. As a result of the adoption of ASU No. 2016-02, on January 1, 2019, the Company recognized (a) an operating lease liability of $118.3 million , which represented the present value of our remaining lease payments, and (b) a related right-of-use asset of $117.4 million . In addition, on January 1, 2019, the Company reclassified certain intangible assets related to real estate leases to right-of-use assets and reclassified its capital lease liability to a finance lease liability in accordance with the applicable transition guidance. The adoption of ASU No. 2016-02 did not have a material impact on the Company's statement of operations or cash flows. Due to the adoption of the standard using the retrospective cumulative-effect adjustment method, there are no changes to our previously reported results prior to January 1, 2019. Recently Issued Accounting Standards In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement. This ASU 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 does not expect that the adoption of this guidance will have a material impact on its 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. Early adoption is permitted. The Company does not expect that the adoption of this guidance will have a material impact on its 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 which 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 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 does not expect that the adoption of this guidance will have a material impact on its consolidated financial statements. |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations On 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 and nine months ended September 30, 2019, the Company recorded a loss on the sale of discontinued operations of $0 and $1.4 million , respectively, related to customary purchase price adjustments. The Company reclassified the results of operations and cash flows of the Disposed Business to discontinued operations in its accompanying condensed consolidated statements of operations and condensed consolidated statements of cash flows for the three and nine months ended September 30, 2018. The summarized financial information related to the Disposed Business that has been excluded from continuing operations and reported as discontinued operations in the accompanying condensed consolidated statements of operations is as follows (in thousands): Three Months Ended Nine Months Ended Net sales $ 82,533 $ 237,923 Cost of goods sold 60,125 172,682 Gross profit 22,408 65,241 Operating expenses: Selling, general and administrative expenses 17,078 49,481 Depreciation and amortization 1,561 4,637 Total operating expenses 18,639 54,118 Income from operations 3,769 11,123 Interest expense (11 ) (36 ) Other income (expense), net 5 (5 ) Income from discontinued operations before income taxes 3,763 11,082 Income tax expense 991 3,169 Net income from discontinued operations, net of tax $ 2,772 $ 7,913 The operating results reflected above do not fully represent the Disposed Business' historical operating results, as the results reported within net income from discontinued operations only include expenses that are directly attributable to the Disposed Business. |
Right-of-Use ("ROU") Assets and
Right-of-Use ("ROU") Assets and Lease Liabilities | 9 Months Ended |
Sep. 30, 2019 | |
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 September 30, 2019 (in thousands): September 30, 2019 United States Canada Total Operating leases: Real estate ROU assets, gross $ 109,139 $ 16,032 $ 125,171 Accumulated amortization (16,143 ) (2,422 ) (18,565 ) Real estate ROU assets, net $ 92,996 $ 13,610 $ 106,606 Real estate lease liability $ 92,074 $ 13,772 $ 105,846 Vehicle and equipment ROU assets, gross $ 11,779 $ 863 $ 12,642 Accumulated amortization (1,934 ) (177 ) (2,111 ) Vehicle and equipment ROU assets, net $ 9,845 $ 686 $ 10,531 Vehicle and equipment lease liability $ 9,822 $ 682 $ 10,504 Total ROU assets, net $ 102,841 $ 14,296 $ 117,137 Total operating lease liability $ 101,896 $ 14,454 $ 116,350 Finance leases included in property and equipment, net: Vehicle and equipment ROU assets, gross $ 6,366 $ 2,834 $ 9,200 Accumulated depreciation (1,468 ) (528 ) (1,996 ) Total vehicle and equipment ROU assets, net $ 4,898 $ 2,306 $ 7,204 Total vehicle and equipment lease liability $ 5,299 $ 2,706 $ 8,005 The components of lease cost for the three and nine months ended September 30, 2019, are as follows (in thousands): Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Income Statement Classification Operating leases: Lease cost $ 8,335 $ 24,469 Selling, general and administrative expenses Variable lease cost 527 2,852 Selling, general and administrative expenses Operating lease cost 8,862 27,321 Finance leases: Amortization of ROU assets 615 2,044 Depreciation and amortization Interest on lease liabilities 106 347 Interest expense Finance lease cost 721 2,391 Total lease cost $ 9,583 $ 29,712 Supplemental cash flow information for leases for the nine months ended September 30, 2019 is as follows (in thousands): Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 20,035 Financing cash flows from finance leases $ 2,002 Right-of-use-assets obtained in exchange for lease obligations: Finance leases $ 203 Operating leases $ 136,204 The weighted-average remaining lease term and weighted-average discount rate for operating and finance leases as of September 30, 2019, are as follows: Operating Leases Finance Leases Weighted average remaining lease term (years) 5.30 3.47 Weighted average discount rate 4.6% 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 at September 30, 2019 (in thousands): Operating Leases Finance Leases Total 2019 (excluding the nine months ended September 30, 2019) $ 7,989 $ 770 $ 8,759 2020 30,941 2,902 33,843 2021 28,521 2,440 30,961 2022 22,564 1,492 24,056 2023 16,667 970 17,637 2024 and thereafter 24,545 150 24,695 Total lease payments 131,227 8,724 139,951 Less amount representing interest (14,877 ) (719 ) (15,596 ) Total $ 116,350 $ 8,005 $ 124,355 Current portion of lease liabilities $ 26,671 $ 2,639 $ 29,310 Long-term portion of lease liabilities $ 89,679 $ 5,366 $ 95,045 The Company's future minimum operating lease commitments, as of December 31, 2018, under ASC Topic 840, the predecessor to Topic 842, were as follows: Years Ending December 31, Total 2019 $ 29,289 2020 26,202 2021 23,796 2022 18,120 2023 12,647 Thereafter 19,856 $ 129,910 |
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 September 30, 2019 (in thousands): September 30, 2019 United States Canada Total Operating leases: Real estate ROU assets, gross $ 109,139 $ 16,032 $ 125,171 Accumulated amortization (16,143 ) (2,422 ) (18,565 ) Real estate ROU assets, net $ 92,996 $ 13,610 $ 106,606 Real estate lease liability $ 92,074 $ 13,772 $ 105,846 Vehicle and equipment ROU assets, gross $ 11,779 $ 863 $ 12,642 Accumulated amortization (1,934 ) (177 ) (2,111 ) Vehicle and equipment ROU assets, net $ 9,845 $ 686 $ 10,531 Vehicle and equipment lease liability $ 9,822 $ 682 $ 10,504 Total ROU assets, net $ 102,841 $ 14,296 $ 117,137 Total operating lease liability $ 101,896 $ 14,454 $ 116,350 Finance leases included in property and equipment, net: Vehicle and equipment ROU assets, gross $ 6,366 $ 2,834 $ 9,200 Accumulated depreciation (1,468 ) (528 ) (1,996 ) Total vehicle and equipment ROU assets, net $ 4,898 $ 2,306 $ 7,204 Total vehicle and equipment lease liability $ 5,299 $ 2,706 $ 8,005 The components of lease cost for the three and nine months ended September 30, 2019, are as follows (in thousands): Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Income Statement Classification Operating leases: Lease cost $ 8,335 $ 24,469 Selling, general and administrative expenses Variable lease cost 527 2,852 Selling, general and administrative expenses Operating lease cost 8,862 27,321 Finance leases: Amortization of ROU assets 615 2,044 Depreciation and amortization Interest on lease liabilities 106 347 Interest expense Finance lease cost 721 2,391 Total lease cost $ 9,583 $ 29,712 Supplemental cash flow information for leases for the nine months ended September 30, 2019 is as follows (in thousands): Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 20,035 Financing cash flows from finance leases $ 2,002 Right-of-use-assets obtained in exchange for lease obligations: Finance leases $ 203 Operating leases $ 136,204 The weighted-average remaining lease term and weighted-average discount rate for operating and finance leases as of September 30, 2019, are as follows: Operating Leases Finance Leases Weighted average remaining lease term (years) 5.30 3.47 Weighted average discount rate 4.6% 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 at September 30, 2019 (in thousands): Operating Leases Finance Leases Total 2019 (excluding the nine months ended September 30, 2019) $ 7,989 $ 770 $ 8,759 2020 30,941 2,902 33,843 2021 28,521 2,440 30,961 2022 22,564 1,492 24,056 2023 16,667 970 17,637 2024 and thereafter 24,545 150 24,695 Total lease payments 131,227 8,724 139,951 Less amount representing interest (14,877 ) (719 ) (15,596 ) Total $ 116,350 $ 8,005 $ 124,355 Current portion of lease liabilities $ 26,671 $ 2,639 $ 29,310 Long-term portion of lease liabilities $ 89,679 $ 5,366 $ 95,045 The Company's future minimum operating lease commitments, as of December 31, 2018, under ASC Topic 840, the predecessor to Topic 842, were as follows: Years Ending December 31, Total 2019 $ 29,289 2020 26,202 2021 23,796 2022 18,120 2023 12,647 Thereafter 19,856 $ 129,910 |
Derivatives and Hedging Activit
Derivatives and Hedging Activities | 9 Months Ended |
Sep. 30, 2019 | |
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. In general, the types of risks hedged are those relating to the variability of future earnings and cash flows caused by foreign currency exchange rate fluctuations and interest rates. 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 London Interbank Offered Rate (“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 September 30, 2019, the fair value of the interest rate swaps was $7.7 million and was recorded in non-current other liabilities. The Company did not have any interest rate swaps as of December 31, 2018. The Company recorded losses of $0.6 million and $5.7 million , net of taxes of $0.2 million and $2.0 million , respectively, for the three and nine months ended September 30, 2019 recorded in comprehensive income (loss). For the three and nine months ended September 30, 2018, the Company did not have interest rate swaps outstanding. 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 (loss). On May 15, 2019, the Company entered into new foreign currency exchange rate contracts with total notional amounts of $81.3 million . As of September 30, 2019, 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 any derivative financial instrument. 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 September 30, 2019, the fair value of the derivative instrument was $0.1 million and was recorded in other non-current liabilities. As of December 31, 2018, the fair value of the net investment hedge was $4.3 million and was recorded in other non-current assets. The Company recognized a gain of $1.0 million and a loss of $0.7 million , net of taxes of $0.3 million and $0.3 million , for the three and nine months ended September 30, 2019, respectively, related to the total change in fair value of the net investment hedge, which was recorded in comprehensive income (loss). The Company recognized a loss of $1.4 million and a gain of $0.8 million , respectively, net of taxes of $0.5 million and $0.5 million , respectively, for the three and nine months ended September 30, 2018, recorded in comprehensive income (loss), related to the effective portion of the net investment hedge. 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 (loss) related to the cumulative ineffective portion of the net investment hedge . |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2019 | |
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 September 30, 2019. 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 allocations for the acquisitions set forth below are preliminary and subject to adjustment as additional information is obtained about facts and circumstances that existed as of the applicable acquisition dates. During the nine months ended September 30, 2019, the Company completed the following acquisitions: Select Acoustic Supply Inc. On May 1, 2019, the Company acquired all of the shares of Select Acoustic Supply Inc. ("Select"). Select was an independent distributor of drywall, steel framing, insulation, basement blanket and spray foam. Select operated one branch in the Greater Toronto Area in Ontario, Canada. Builders' Supplies Limited II On February 1, 2019, the Company acquired certain assets of Builders' Supplies Limited II and all of the shares of 2168828 Alberta Inc. and 2168829 Alberta Inc. (collectively, "BSL"). BSL was an independent distributor of specialty building products including wallboard, suspended ceiling systems, metal framing and insulation in the commercial market. BSL operated three branches in the Greater Toronto Area in Ontario, Canada. During the nine months ended September 30, 2019, the Company completed the Select and BSL acquisitions ("2019 Acquisitions") for a total of $21.9 million , net of cash acquired. These acquisitions are not considered material. The following table summarizes the estimated fair value of the assets acquired and liabilities assumed as of the acquisition date (in thousands): Nine Months Ended September 30, 2019 Assets acquired: Cash $ 88 Accounts receivable 6,095 Other receivables 2,012 Inventories 2,612 Prepaid and other current assets 29 Property and equipment 605 Goodwill 5,019 Intangible assets 8,953 Total assets acquired 25,413 Liabilities assumed: Accounts payable (3,125 ) Accrued expenses and other current liabilities (318 ) Total liabilities assumed (3,443 ) Total net assets acquired $ 21,970 The excess of purchase price over the fair value amounts assigned to the assets acquired and liabilities assumed represents the goodwill amount resulting from the acquisitions. Goodwill attributable to the acquisitions has been recorded as a non-current asset and is not amortized, but is subject to review at least on an annual basis for impairment. Goodwill recognized was primarily attributable to expected operating efficiencies and expansion opportunities in the businesses acquired. 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 these acquisitions will be made as soon as practicable but no later than one year from the acquisition dates. The pro forma impact of the acquisitions is not presented as the acquisitions were not considered material to the Company's condensed consolidated financial statements. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The change in goodwill from December 31, 2018 to September 30, 2019, consisted of the following (in thousands): Carrying Value Balance at December 31, 2018 $ 484,941 Goodwill acquired 5,019 Purchase price allocation adjustments from prior periods (403 ) Impact of foreign currency exchange rates 758 Balance at September 30, 2019 $ 490,315 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 September 30, 2019 and December 31, 2018 (in thousands): September 30, 2019 December 31, 2018 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Tradenames $ 15,980 $ (12,778 ) $ 3,202 $ 15,980 $ (10,423 ) $ 5,557 Customer relationships 259,756 (145,064 ) 114,692 250,498 (112,757 ) 137,741 Other intangible assets — — — 3,489 (911 ) 2,578 $ 275,736 $ (157,842 ) $ 117,894 $ 269,967 $ (124,091 ) $ 145,876 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 Topic 842. The weighted average amortization period of these intangible assets in the aggregate is 3.7 years. |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Debt consisted of the following at September 30, 2019 and December 31, 2018 (in thousands): September 30, 2019 December 31, 2018 2018 Term Loan Facility $ 446,625 $ 450,000 Unamortized deferred financing and issuance costs - term loan (6,650 ) (7,500 ) 2018 Revolving Credit Facility 134,306 146,000 Unamortized deferred financing costs - revolving credit facility (3,933 ) (4,673 ) $ 570,348 $ 583,827 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 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 will be 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 years after the closing date for the initial term loans (as defined in the 2018 Term Loan Facility). 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 September 30, 2019, as though they had been consummated on the first day of the first quarter for the four quarters ended September 30, 2019. 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 September 30, 2019, the Company had $134.3 million of outstanding borrowings and $240.7 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 and nine months ended September 30, 2019 was 3.8% and 4.0% , respectively. 2016 ABL Credit Facility On August 13, 2018, Alpha terminated its revolving commitments under its $300.0 million 2016 asset-backed line of credit facility (the "2016 ABL Credit Facility"). The weighted average interest rate for borrowings under the 2016 ABL Credit Facility up to August 13, 2018 was 3.4% . Upon termination of the 2016 ABL Credit Facility, the Company expensed $0.7 million in deferred financing costs and carried over $2.6 million of deferred financing costs to the 2018 Revolving Credit Facility. Senior Secured Notes On August 15, 2018, the Company redeemed the entire $575.0 million principal amount of its outstanding Senior Secured Notes (the "Notes") at a redemption price equal to 104.125% of the principal amount of Notes being redeemed plus accrued and unpaid interest. The Notes were issued in a private placement on August 9, 2016, at an issue price of 100% of the principal with a stated interest rate of 8.25% . Upon redemption of the Notes, the Company expensed $57.8 million of deferred financing costs, original issuance discounts and prepayment premiums, which were included in the condensed consolidated statements of operations in loss on extinguishment of debt. Debt Issuance Costs Unamortized deferred financing and issuance costs as of September 30, 2019 were $10.6 million , of which $6.7 million was included in long-term portion of term loan, net and $3.9 million for the 2018 Revolving Credit Facility was included in other long-term assets in the accompanying condensed consolidated balance sheets. Unamortized debt issuance costs as of December 31, 2018 were $12.2 million , of which $7.5 million was included in long-term portion of term loan, net and $4.7 million for the 2018 Revolving Credit Facility was included in other long-term assets in the accompanying condensed consolidated balance sheets. As of September 30, 2019, 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 | 9 Months Ended |
Sep. 30, 2019 | |
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, and any offset to taxable income and gain or increase to taxable loss, resulting from the tax basis the Company has in its assets at the consummation of the IPO, (b) net operating losses, (c) tax credits and (d) certain other tax attributes. At the end of each reporting period, any changes in the Company's estimate of the liability will be recorded in the condensed consolidated statement 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 September 30, 2019 and December 31, 2018, the TRA liability balance was $117.9 million and $134.6 million , respectively. The first payment related to the TRA was made in January 2019 for $16.7 million . The next TRA payment is anticipated to be made in the first quarter of 2020. This payment is estimated to be $27.7 million , and is reflected as a current liability as of September 30, 2019. Income Taxes Income tax expense for the three and nine months ended September 30, 2019, was $5.8 million and $13.2 million , respectively, compared to an income tax benefit of $12.5 million and $13.3 million for the three and nine months ended September 30, 2018, respectively. For the three and nine months ended September 30, 2019, the Company's effective tax rates were 31.2% and 29.1% , respectively. The variance from the statutory federal tax rate of 21.0% for the three and nine months ended September 30, 2019, was primarily due to state taxes, Global Intangible Low Taxed Income provision, non-deductible items and foreign rate differential. For the three and nine months ended September 30, 2018, the Company's effective tax rates were 25.0% and 25.8% , respectively. The variance from the statutory federal tax rate of 21.0% for the three months ended September 30, 2018 was primarily due to state income taxes, non-deductible items and a foreign rate differential partially offset by a reduction in valuation allowance treated as a discrete item during the quarter. The variance from the statutory federal rate of 21.0% for the nine months ended September 30, 2018 was primarily due to the same items impacting the three-month rate, partially offset by a refinement of the provisional estimate of the one-time repatriation tax under the 2017 Tax Cuts and Jobs Act treated as a discrete item during the first quarter. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 9 Months Ended |
Sep. 30, 2019 | |
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. The components of accumulated other comprehensive loss for the nine months ended September 30, 2019, were as follows (in thousands): Foreign Currency Translation (Losses) Gains Unrealized Gain (Loss) on Derivatives, Net of Taxes Total Balance at December 31, 2018 $ (3,085 ) $ 2,904 $ (181 ) Other comprehensive income (loss) 2,317 (6,436 ) (4,119 ) Balance at September 30, 2019 $ (768 ) $ (3,532 ) $ (4,300 ) |
Contingencies
Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
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 results of operations, cash flows or financial position of the Company. As of September 30, 2019, 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 | 9 Months Ended |
Sep. 30, 2019 | |
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 September 30, 2019, is as follows (in thousands): Fair Value Measurements as of September 30, 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 liability (Note 5) $ — $ (7,781 ) $ — $ (7,781 ) 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, 2018, is as follows (in thousands): Fair Value Measurements as of December 31, 2018 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Fair Value Recurring: Non-current assets Derivative asset (Note 5) $ — $ 4,344 $ — $ 4,344 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 | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 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, and any offset to taxable income and gain or increase to taxable loss, resulting from the tax basis the Company has in its assets at the consummation of the IPO, (b) net operating losses, (c) tax credits and (d) certain other tax attributes. At the end of each reporting period, any changes in the Company's estimate of the liability will be recorded in the condensed consolidated statement 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 September 30, 2019 and December 31, 2018, the TRA liability balance was $117.9 million and $134.6 million , respectively. The first payment related to the TRA was made in January 2019 for $16.7 million . The next TRA payment is anticipated to be made in the first quarter of 2020. This payment is estimated to be $27.7 million , and is reflected as a current liability as of September 30, 2019. Income Taxes Income tax expense for the three and nine months ended September 30, 2019, was $5.8 million and $13.2 million , respectively, compared to an income tax benefit of $12.5 million and $13.3 million for the three and nine months ended September 30, 2018, respectively. For the three and nine months ended September 30, 2019, the Company's effective tax rates were 31.2% and 29.1% , respectively. The variance from the statutory federal tax rate of 21.0% for the three and nine months ended September 30, 2019, was primarily due to state taxes, Global Intangible Low Taxed Income provision, non-deductible items and foreign rate differential. For the three and nine months ended September 30, 2018, the Company's effective tax rates were 25.0% and 25.8% , respectively. The variance from the statutory federal tax rate of 21.0% for the three months ended September 30, 2018 was primarily due to state income taxes, non-deductible items and a foreign rate differential partially offset by a reduction in valuation allowance treated as a discrete item during the quarter. The variance from the statutory federal rate of 21.0% for the nine months ended September 30, 2018 was primarily due to the same items impacting the three-month rate, partially offset by a refinement of the provisional estimate of the one-time repatriation tax under the 2017 Tax Cuts and Jobs Act treated as a discrete item during the first quarter. |
Segments
Segments | 9 Months Ended |
Sep. 30, 2019 | |
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. As discussed in Note 3, Discontinued Operations, the Company closed the sale of the Disposed Business on November 1, 2018, which was previously reported as the Mechanical Insulation segment. The previously reported amounts for the Mechanical Insulation segment have been reclassified to discontinued operations for all periods presented. The Company’s continuing operations now consist of what was previously reported as the Specialty Building Products segment for the three and nine months ended September 30, 2018. 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 September 30, 2019, 90.1% and 9.9% of the Company's revenue was generated in the United States and Canada, respectively. For the nine months ended September 30, 2019, 90.4% and 9.6% of the Company's revenue was generated in the United States and Canada, respectively. For the three months ended September 30, 2018, 90.0% and 10.0% of the Company's revenue was generated in the United States and Canada, respectively. For the nine months ended September 30, 2018, 88.6% and 11.4% 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): September 30, 2019 December 31, 2018 Property, plant and equipment, net United States $ 138,738 $ 137,252 Canada 14,556 14,389 Total property, plant and equipment, net $ 153,294 $ 151,641 Right-of-use assets, net United States $ 102,841 $ — Canada 14,296 — Total right-of-use assets, net $ 117,137 $ — Goodwill United States $ 459,978 $ 460,384 Canada 30,337 24,557 Total goodwill $ 490,315 $ 484,941 Intangibles, net United States $ 105,959 $ 141,186 Canada 11,935 4,690 Total intangibles, net $ 117,894 $ 145,876 The Company’s net sales by major product line are as follows (dollars in thousands): Three Months Ended September 30, Change 2019 2018 $ % Wallboard $ 207,326 36.7 % $ 203,991 37.6 % $ 3,335 1.6 % Suspended ceiling systems 118,873 21.0 % 104,422 19.3 % 14,451 13.8 % Metal framing 98,817 17.5 % 98,576 18.2 % 241 0.2 % Complementary and other products 139,890 24.8 % 135,284 24.9 % 4,606 3.4 % Total net sales $ 564,906 100.0 % $ 542,273 100.0 % $ 22,633 4.2 % Nine Months Ended September 30, Change 2019 2018 $ % Wallboard $ 624,299 38.1 % $ 583,242 38.2 % $ 41,057 7.0 % Suspended ceiling systems 314,045 19.2 % 288,356 18.9 % $ 25,689 8.9 % Metal framing 300,493 18.3 % 264,019 17.3 % $ 36,474 13.8 % Complementary and other products 400,852 24.4 % 392,536 25.7 % 8,316 2.1 % Total net sales $ 1,639,689 100.0 % $ 1,528,153 100.0 % $ 111,536 7.3 % |
Other Current Liabilities
Other Current Liabilities | 9 Months Ended |
Sep. 30, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Other Current Liabilities | Other Current Liabilities The balance of other current liabilities consisted of the following (in thousands): September 30, 2019 December 31, 2018 Accrued expenses $ 5,496 $ 5,080 Accrued interest 152 1,315 Accrued other 18,002 13,584 Total other current liabilities $ 23,650 $ 19,979 |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 9 Months Ended |
Sep. 30, 2019 | |
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 September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Weighted average shares used in basic computations 42,988,829 42,894,474 42,969,797 42,889,430 Dilutive effect of stock options and restricted stock units 519,849 22,756 204,554 15,843 Weighted average shares used in diluted computations 43,508,678 42,917,230 43,174,351 42,905,273 For the three and nine months ended September 30, 2019, there were 324,495 and 525,012 shares, respectively, not included in the computation of diluted weighted average shares because their effect would have been antidilutive. For the three and nine months ended September 30, 2018, there were 66,619 and 135,780 shares, respectively, not included in the computation of diluted weighted average shares because their effect would have been antidilutive. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On October 1, 2019, the Company acquired the operations and substantially all of the assets of Joe's Wallboard Supply Co. of Colorado Springs, Inc. (“Wallboard Supply”). Wallboard Supply was a distributor of drywall and accessories, steel framing, insulation, tools and fasteners. Wallboard Supply operated one branch in Colorado Springs, Colorado. On October 1, 2019, the Company acquired the operations and substantially all of the assets of The Supply Guy, Inc. (“TSG”). TSG was a distributor of tools, fasteners, and other related products. TSG operated one branch in Lakewood, Washington. |
Recently Adopted and Issued A_2
Recently Adopted and Issued Accounting Standards (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In August 2017, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities , which amends the hedge accounting recognition and presentation requirements in Accounting Standards Codification ("ASC") Topic 815. This amendment is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The Company adopted this guidance on January 1, 2019, and the adoption did not have a material impact on the Company’s consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) ("ASU No. 2016-02"). ASU No. 2016-02 establishes a right-of-use model that requires a lessee to record a right-of-use asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases are classified as either "finance" or "operating," with such classification affecting the pattern of expense recognition in the income statement. This update was effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. As a result of the adoption of ASU No. 2016-02, on January 1, 2019, the Company recognized (a) an operating lease liability of $118.3 million , which represented the present value of our remaining lease payments, and (b) a related right-of-use asset of $117.4 million . In addition, on January 1, 2019, the Company reclassified certain intangible assets related to real estate leases to right-of-use assets and reclassified its capital lease liability to a finance lease liability in accordance with the applicable transition guidance. The adoption of ASU No. 2016-02 did not have a material impact on the Company's statement of operations or cash flows. Due to the adoption of the standard using the retrospective cumulative-effect adjustment method, there are no changes to our previously reported results prior to January 1, 2019. Recently Issued Accounting Standards In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement. This ASU 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 does not expect that the adoption of this guidance will have a material impact on its 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. Early adoption is permitted. The Company does not expect that the adoption of this guidance will have a material impact on its 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 which 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 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 does not expect that the adoption of this guidance will have a material impact on its consolidated financial statements. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Discontinued Operations | The summarized financial information related to the Disposed Business that has been excluded from continuing operations and reported as discontinued operations in the accompanying condensed consolidated statements of operations is as follows (in thousands): Three Months Ended Nine Months Ended Net sales $ 82,533 $ 237,923 Cost of goods sold 60,125 172,682 Gross profit 22,408 65,241 Operating expenses: Selling, general and administrative expenses 17,078 49,481 Depreciation and amortization 1,561 4,637 Total operating expenses 18,639 54,118 Income from operations 3,769 11,123 Interest expense (11 ) (36 ) Other income (expense), net 5 (5 ) Income from discontinued operations before income taxes 3,763 11,082 Income tax expense 991 3,169 Net income from discontinued operations, net of tax $ 2,772 $ 7,913 |
Right-of-Use ("ROU") Assets a_2
Right-of-Use ("ROU") Assets and Lease Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Schedule Of Operating And Finance Lease Liabilities | The following table summarizes the Company's operating and finance leases by country as of September 30, 2019 (in thousands): September 30, 2019 United States Canada Total Operating leases: Real estate ROU assets, gross $ 109,139 $ 16,032 $ 125,171 Accumulated amortization (16,143 ) (2,422 ) (18,565 ) Real estate ROU assets, net $ 92,996 $ 13,610 $ 106,606 Real estate lease liability $ 92,074 $ 13,772 $ 105,846 Vehicle and equipment ROU assets, gross $ 11,779 $ 863 $ 12,642 Accumulated amortization (1,934 ) (177 ) (2,111 ) Vehicle and equipment ROU assets, net $ 9,845 $ 686 $ 10,531 Vehicle and equipment lease liability $ 9,822 $ 682 $ 10,504 Total ROU assets, net $ 102,841 $ 14,296 $ 117,137 Total operating lease liability $ 101,896 $ 14,454 $ 116,350 Finance leases included in property and equipment, net: Vehicle and equipment ROU assets, gross $ 6,366 $ 2,834 $ 9,200 Accumulated depreciation (1,468 ) (528 ) (1,996 ) Total vehicle and equipment ROU assets, net $ 4,898 $ 2,306 $ 7,204 Total vehicle and equipment lease liability $ 5,299 $ 2,706 $ 8,005 |
Lease, Cost | The components of lease cost for the three and nine months ended September 30, 2019, are as follows (in thousands): Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Income Statement Classification Operating leases: Lease cost $ 8,335 $ 24,469 Selling, general and administrative expenses Variable lease cost 527 2,852 Selling, general and administrative expenses Operating lease cost 8,862 27,321 Finance leases: Amortization of ROU assets 615 2,044 Depreciation and amortization Interest on lease liabilities 106 347 Interest expense Finance lease cost 721 2,391 Total lease cost $ 9,583 $ 29,712 Supplemental cash flow information for leases for the nine months ended September 30, 2019 is as follows (in thousands): Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 20,035 Financing cash flows from finance leases $ 2,002 Right-of-use-assets obtained in exchange for lease obligations: Finance leases $ 203 Operating leases $ 136,204 The weighted-average remaining lease term and weighted-average discount rate for operating and finance leases as of September 30, 2019, are as follows: Operating Leases Finance Leases Weighted average remaining lease term (years) 5.30 3.47 Weighted average discount rate 4.6% 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 at September 30, 2019 (in thousands): Operating Leases Finance Leases Total 2019 (excluding the nine months ended September 30, 2019) $ 7,989 $ 770 $ 8,759 2020 30,941 2,902 33,843 2021 28,521 2,440 30,961 2022 22,564 1,492 24,056 2023 16,667 970 17,637 2024 and thereafter 24,545 150 24,695 Total lease payments 131,227 8,724 139,951 Less amount representing interest (14,877 ) (719 ) (15,596 ) Total $ 116,350 $ 8,005 $ 124,355 Current portion of lease liabilities $ 26,671 $ 2,639 $ 29,310 Long-term portion of lease liabilities $ 89,679 $ 5,366 $ 95,045 |
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 at September 30, 2019 (in thousands): Operating Leases Finance Leases Total 2019 (excluding the nine months ended September 30, 2019) $ 7,989 $ 770 $ 8,759 2020 30,941 2,902 33,843 2021 28,521 2,440 30,961 2022 22,564 1,492 24,056 2023 16,667 970 17,637 2024 and thereafter 24,545 150 24,695 Total lease payments 131,227 8,724 139,951 Less amount representing interest (14,877 ) (719 ) (15,596 ) Total $ 116,350 $ 8,005 $ 124,355 Current portion of lease liabilities $ 26,671 $ 2,639 $ 29,310 Long-term portion of lease liabilities $ 89,679 $ 5,366 $ 95,045 |
Schedule of Future Minimum Rental Payments for Operating Leases | The Company's future minimum operating lease commitments, as of December 31, 2018, under ASC Topic 840, the predecessor to Topic 842, were as follows: Years Ending December 31, Total 2019 $ 29,289 2020 26,202 2021 23,796 2022 18,120 2023 12,647 Thereafter 19,856 $ 129,910 |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the estimated fair value of the assets acquired and liabilities assumed as of the acquisition date (in thousands): Nine Months Ended September 30, 2019 Assets acquired: Cash $ 88 Accounts receivable 6,095 Other receivables 2,012 Inventories 2,612 Prepaid and other current assets 29 Property and equipment 605 Goodwill 5,019 Intangible assets 8,953 Total assets acquired 25,413 Liabilities assumed: Accounts payable (3,125 ) Accrued expenses and other current liabilities (318 ) Total liabilities assumed (3,443 ) Total net assets acquired $ 21,970 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The change in goodwill from December 31, 2018 to September 30, 2019, consisted of the following (in thousands): Carrying Value Balance at December 31, 2018 $ 484,941 Goodwill acquired 5,019 Purchase price allocation adjustments from prior periods (403 ) Impact of foreign currency exchange rates 758 Balance at September 30, 2019 $ 490,315 |
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 September 30, 2019 and December 31, 2018 (in thousands): September 30, 2019 December 31, 2018 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Tradenames $ 15,980 $ (12,778 ) $ 3,202 $ 15,980 $ (10,423 ) $ 5,557 Customer relationships 259,756 (145,064 ) 114,692 250,498 (112,757 ) 137,741 Other intangible assets — — — 3,489 (911 ) 2,578 $ 275,736 $ (157,842 ) $ 117,894 $ 269,967 $ (124,091 ) $ 145,876 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable | Debt consisted of the following at September 30, 2019 and December 31, 2018 (in thousands): September 30, 2019 December 31, 2018 2018 Term Loan Facility $ 446,625 $ 450,000 Unamortized deferred financing and issuance costs - term loan (6,650 ) (7,500 ) 2018 Revolving Credit Facility 134,306 146,000 Unamortized deferred financing costs - revolving credit facility (3,933 ) (4,673 ) $ 570,348 $ 583,827 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Loss | The components of accumulated other comprehensive loss for the nine months ended September 30, 2019, were as follows (in thousands): Foreign Currency Translation (Losses) Gains Unrealized Gain (Loss) on Derivatives, Net of Taxes Total Balance at December 31, 2018 $ (3,085 ) $ 2,904 $ (181 ) Other comprehensive income (loss) 2,317 (6,436 ) (4,119 ) Balance at September 30, 2019 $ (768 ) $ (3,532 ) $ (4,300 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
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 September 30, 2019, is as follows (in thousands): Fair Value Measurements as of September 30, 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 liability (Note 5) $ — $ (7,781 ) $ — $ (7,781 ) 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, 2018, is as follows (in thousands): Fair Value Measurements as of December 31, 2018 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Fair Value Recurring: Non-current assets Derivative asset (Note 5) $ — $ 4,344 $ — $ 4,344 |
Segments (Tables)
Segments (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
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): September 30, 2019 December 31, 2018 Property, plant and equipment, net United States $ 138,738 $ 137,252 Canada 14,556 14,389 Total property, plant and equipment, net $ 153,294 $ 151,641 Right-of-use assets, net United States $ 102,841 $ — Canada 14,296 — Total right-of-use assets, net $ 117,137 $ — Goodwill United States $ 459,978 $ 460,384 Canada 30,337 24,557 Total goodwill $ 490,315 $ 484,941 Intangibles, net United States $ 105,959 $ 141,186 Canada 11,935 4,690 Total intangibles, net $ 117,894 $ 145,876 |
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 September 30, Change 2019 2018 $ % Wallboard $ 207,326 36.7 % $ 203,991 37.6 % $ 3,335 1.6 % Suspended ceiling systems 118,873 21.0 % 104,422 19.3 % 14,451 13.8 % Metal framing 98,817 17.5 % 98,576 18.2 % 241 0.2 % Complementary and other products 139,890 24.8 % 135,284 24.9 % 4,606 3.4 % Total net sales $ 564,906 100.0 % $ 542,273 100.0 % $ 22,633 4.2 % Nine Months Ended September 30, Change 2019 2018 $ % Wallboard $ 624,299 38.1 % $ 583,242 38.2 % $ 41,057 7.0 % Suspended ceiling systems 314,045 19.2 % 288,356 18.9 % $ 25,689 8.9 % Metal framing 300,493 18.3 % 264,019 17.3 % $ 36,474 13.8 % Complementary and other products 400,852 24.4 % 392,536 25.7 % 8,316 2.1 % Total net sales $ 1,639,689 100.0 % $ 1,528,153 100.0 % $ 111,536 7.3 % |
Other Current Liabilities (Tabl
Other Current Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Other Current Liabilities | The balance of other current liabilities consisted of the following (in thousands): September 30, 2019 December 31, 2018 Accrued expenses $ 5,496 $ 5,080 Accrued interest 152 1,315 Accrued other 18,002 13,584 Total other current liabilities $ 23,650 $ 19,979 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
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 September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Weighted average shares used in basic computations 42,988,829 42,894,474 42,969,797 42,889,430 Dilutive effect of stock options and restricted stock units 519,849 22,756 204,554 15,843 Weighted average shares used in diluted computations 43,508,678 42,917,230 43,174,351 42,905,273 |
Business and Basis of Present_2
Business and Basis of Presentation (Details) | Sep. 30, 2019employeebranch |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of employees (more than) | employee | 3,400 |
Number of branch locations (more than) | branch | 175 |
Recently Adopted and Issued A_3
Recently Adopted and Issued Accounting Standards (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Summary Of Significant Accounting Policies [Line Items] | |||
Operating lease liability | $ 116,350 | ||
Right-of-use asset | $ 117,137 | $ 0 | |
Accounting Standards Update 2016-02 | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Operating lease liability | $ 118,300 | ||
Right-of-use asset | $ 117,400 |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) $ in Thousands | Nov. 01, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 |
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 | $ (11) | $ 0 | $ (1,401) | $ 0 | |
Operating expenses: | |||||
Net income from discontinued operations, net of tax | 0 | $ 2,772 | 0 | $ 7,913 | |
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 | 0 | (1,400) | ||
Net sales | 82,533 | 237,923 | |||
Cost of goods sold | 60,125 | 172,682 | |||
Gross profit | 22,408 | 65,241 | |||
Operating expenses: | |||||
Selling, general and administrative expenses | 17,078 | 49,481 | |||
Depreciation and amortization | 1,561 | 4,637 | |||
Total operating expenses | 18,639 | 54,118 | |||
Income from operations | 3,769 | 11,123 | |||
Interest expense | (11) | (36) | |||
Other income (expense), net | 5 | (5) | |||
Income from discontinued operations before income taxes | 3,763 | 11,082 | |||
Income tax expense | 991 | 3,169 | |||
Net income from discontinued operations, net of tax | $ 2,772 | $ 7,913 |
Right-of-Use ("ROU") Assets a_3
Right-of-Use ("ROU") Assets and Lease Liabilities - Operating and Finance Lease Liability (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019USD ($)renewal_option | Dec. 31, 2018USD ($) | |
Leases [Abstract] | ||
Number of renewal options | renewal_option | 1 | |
Operating leases: | ||
Right-of-use asset | $ 117,137 | $ 0 |
Operating lease liability | 116,350 | |
Finance leases included in property and equipment, net: | ||
Vehicle and equipment ROU assets, gross | 9,200 | |
Accumulated depreciation | (1,996) | |
Total vehicle and equipment ROU assets, net | 7,204 | |
Total vehicle and equipment lease liability | 8,005 | |
Real Estate | ||
Operating leases: | ||
Operating lease, right-of-use asset | 125,171 | |
Operating lease, accumulated amortization | (18,565) | |
Right-of-use asset | 106,606 | |
Operating lease liability | 105,846 | |
Vehicles and equipment | ||
Operating leases: | ||
Operating lease, right-of-use asset | 12,642 | |
Operating lease, accumulated amortization | (2,111) | |
Right-of-use asset | 10,531 | |
Operating lease liability | 10,504 | |
United States | ||
Operating leases: | ||
Right-of-use asset | 102,841 | 0 |
Operating lease liability | 101,896 | |
Finance leases included in property and equipment, net: | ||
Vehicle and equipment ROU assets, gross | 6,366 | |
Accumulated depreciation | (1,468) | |
Total vehicle and equipment ROU assets, net | 4,898 | |
Total vehicle and equipment lease liability | 5,299 | |
United States | Real Estate | ||
Operating leases: | ||
Operating lease, right-of-use asset | 109,139 | |
Operating lease, accumulated amortization | (16,143) | |
Right-of-use asset | 92,996 | |
Operating lease liability | 92,074 | |
United States | Vehicles and equipment | ||
Operating leases: | ||
Operating lease, right-of-use asset | 11,779 | |
Operating lease, accumulated amortization | (1,934) | |
Right-of-use asset | 9,845 | |
Operating lease liability | 9,822 | |
Canada | ||
Operating leases: | ||
Right-of-use asset | 14,296 | $ 0 |
Operating lease liability | 14,454 | |
Finance leases included in property and equipment, net: | ||
Vehicle and equipment ROU assets, gross | 2,834 | |
Accumulated depreciation | (528) | |
Total vehicle and equipment ROU assets, net | 2,306 | |
Total vehicle and equipment lease liability | 2,706 | |
Canada | Real Estate | ||
Operating leases: | ||
Operating lease, right-of-use asset | 16,032 | |
Operating lease, accumulated amortization | (2,422) | |
Right-of-use asset | 13,610 | |
Operating lease liability | 13,772 | |
Canada | Vehicles and equipment | ||
Operating leases: | ||
Operating lease, right-of-use asset | 863 | |
Operating lease, accumulated amortization | (177) | |
Right-of-use asset | 686 | |
Operating lease liability | $ 682 |
Right-of-Use ("ROU") Assets a_4
Right-of-Use ("ROU") Assets and Lease Liabilities - Lease Cost (Details) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019USD ($) | Sep. 30, 2019USD ($) | |
Operating leases: | ||
Lease cost | $ 8,335 | $ 24,469 |
Variable lease cost | 527 | 2,852 |
Operating lease cost | 8,862 | 27,321 |
Finance leases: | ||
Amortization of ROU assets | 615 | 2,044 |
Interest on lease liabilities | 106 | 347 |
Finance lease cost | 721 | 2,391 |
Total lease cost | $ 9,583 | 29,712 |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | 20,035 | |
Financing cash flows from finance leases | 2,002 | |
Right-of-use-assets obtained in exchange for lease obligations: | ||
Finance leases | 203 | |
Operating leases | $ 136,204 | |
Operating Leases | ||
Weighted average remaining lease term (years) | 5 years 3 months 20 days | 5 years 3 months 20 days |
Weighted average discount rate | 4.60% | 4.60% |
Finance Leases | ||
Weighted average remaining lease term (years) | 5.20% | 5.20% |
Weighted average discount rate | 3 years 5 months 20 days | 3 years 5 months 20 days |
Right-of-Use ("ROU") Assets a_5
Right-of-Use ("ROU") Assets and Lease Liabilities - Schedule of Operating and Finance Lease Maturity (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Operating Leases | |
2019 (excluding the nine months ended September 30, 2019) | $ 7,989 |
2020 | 30,941 |
2021 | 28,521 |
2022 | 22,564 |
2023 | 16,667 |
2024 and thereafter | 24,545 |
Total lease payments | 131,227 |
Less amount representing interest | (14,877) |
Total | 116,350 |
Current portion of lease liabilities | 26,671 |
Long-term portion of lease liabilities | 89,679 |
Finance Leases | |
2019 (excluding the nine months ended September 30, 2019) | 770 |
2020 | 2,902 |
2021 | 2,440 |
2022 | 1,492 |
2023 | 970 |
2024 and thereafter | 150 |
Total lease payments | 8,724 |
Less amount representing interest | (719) |
Total | 8,005 |
Current portion of lease liabilities | 2,639 |
Long-term portion of lease liabilities | 5,366 |
Total | |
2019 (excluding the nine months ended September 30, 2019) | 8,759 |
2020 | 33,843 |
2021 | 30,961 |
2022 | 24,056 |
2023 | 17,637 |
2024 and thereafter | 24,695 |
Total lease payments | 139,951 |
Less amount representing interest | (15,596) |
Total | 124,355 |
Current portion of lease liabilities | 29,310 |
Long-term portion of lease liabilities | $ 95,045 |
Right-of-Use ("ROU") Assets a_6
Right-of-Use ("ROU") Assets and Lease Liabilities - Schedule of Future Minimum Lease Payments (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Leases [Abstract] | |
2019 | $ 29,289 |
2020 | 26,202 |
2021 | 23,796 |
2022 | 18,120 |
2023 | 12,647 |
Thereafter | 19,856 |
Future minimum payments due | $ 129,910 |
Derivatives and Hedging Activ_2
Derivatives and Hedging Activities (Details) $ in Thousands | May 15, 2019USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Jan. 31, 2019USD ($)interest_rate_swap | Jan. 01, 2019USD ($) | Dec. 31, 2018USD ($) |
Derivative [Line Items] | ||||||||
Gain (loss) on derivatives | $ 344 | $ (6,436) | ||||||
Gain (loss) related to change in fair value of net investment hedge before 2017-12 adoption | $ 500 | $ 500 | ||||||
Interest Rate Swap | ||||||||
Derivative [Line Items] | ||||||||
Gain (loss) on derivatives | (600) | (5,700) | ||||||
Gain (loss) related to change in fair value of net investment hedge | (200) | (2,000) | ||||||
Interest Rate Swap | Other Noncurrent Liabilities | ||||||||
Derivative [Line Items] | ||||||||
Fair value asset of derivative instrument | 7,700 | 7,700 | ||||||
Designated as Hedging Instrument | Foreign Exchange Contract | ||||||||
Derivative [Line Items] | ||||||||
Notional foreign exchange contract outstanding | $ 88,000 | 81,300 | 81,300 | |||||
Gain (loss) on derivatives | 2,500 | 1,000 | (700) | |||||
Gain (loss) related to change in fair value of net investment hedge | $ 800 | 300 | 300 | |||||
Gain (loss) on derivatives, before 2017-12 adoption | (1,400) | 800 | ||||||
Gain (loss) related to change in fair value of net investment hedge before 2017-12 adoption | $ 500 | $ 500 | ||||||
Designated as Hedging Instrument | Foreign Exchange Contract | Other Noncurrent Assets | ||||||||
Derivative [Line Items] | ||||||||
Fair value asset of derivative instrument | $ 100 | $ 100 | $ 4,300 | |||||
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 | Adoption of derivatives guidance | ||||||||
Derivative [Line Items] | ||||||||
Cumulative effect of new accounting principle | $ 172 | |||||||
Other Comprehensive Loss | Adoption of derivatives guidance | Designated as Hedging Instrument | ||||||||
Derivative [Line Items] | ||||||||
Cumulative effect of new accounting principle | 200 | |||||||
Retained Earnings | Adoption of derivatives guidance | ||||||||
Derivative [Line Items] | ||||||||
Cumulative effect of new accounting principle | (172) | |||||||
Retained Earnings | Adoption of derivatives guidance | Designated as Hedging Instrument | ||||||||
Derivative [Line Items] | ||||||||
Cumulative effect of new accounting principle | $ (200) |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) $ in Millions | 9 Months Ended | ||
Sep. 30, 2019USD ($)branch | May 01, 2019branch | Feb. 01, 2019branch | |
Business Acquisition [Line Items] | |||
Number of branch locations | 175 | ||
Consideration transferred | $ | $ 21.9 | ||
Canada | BSL | |||
Business Acquisition [Line Items] | |||
Number of branch locations | 1 | 3 |
Acquisitions - Schedule of Reco
Acquisitions - Schedule of Recognized Identified Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Assets acquired: | ||
Goodwill | $ 490,315 | $ 484,941 |
Select and BSL | ||
Assets acquired: | ||
Cash | 88 | |
Accounts receivable | 6,095 | |
Other receivables | 2,012 | |
Inventories | 2,612 | |
Prepaid and other current assets | 29 | |
Property and equipment | 605 | |
Goodwill | 5,019 | |
Intangible assets | 8,953 | |
Total assets acquired | 25,413 | |
Liabilities assumed: | ||
Accounts payable | (3,125) | |
Accrued expenses and other current liabilities | (318) | |
Total liabilities assumed | (3,443) | |
Total net assets acquired | $ 21,970 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Schedule of Goodwill (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 484,941 |
Goodwill acquired | 5,019 |
Purchase price allocation adjustments from prior periods | (403) |
Impact of foreign currency exchange rates | 758 |
Ending balance | $ 490,315 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Schedule of Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 275,736 | $ 269,967 |
Accumulated Amortization | (157,842) | (124,091) |
Net Carrying Amount | 117,894 | 145,876 |
Tradenames | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 15,980 | 15,980 |
Accumulated Amortization | (12,778) | (10,423) |
Net Carrying Amount | 3,202 | 5,557 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 259,756 | 250,498 |
Accumulated Amortization | (145,064) | (112,757) |
Net Carrying Amount | 114,692 | 137,741 |
Other intangible assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 0 | 3,489 |
Accumulated Amortization | 0 | (911) |
Net Carrying Amount | $ 0 | $ 2,578 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Narrative (Details) | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Weighted average useful life | 3 years 8 months |
Long-Term Debt - Schedule of No
Long-Term Debt - Schedule of Notes Payable (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
Long-term debt | $ 570,348 | $ 583,827 |
2018 Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 134,306 | 146,000 |
Unamortized deferred financing and issuance costs - term loan | (3,933) | (4,673) |
2018 Term Loan Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 446,625 | 450,000 |
Unamortized deferred financing and issuance costs - term loan | $ (6,650) | $ (7,500) |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) | Aug. 15, 2018USD ($) | Aug. 13, 2018USD ($) | Aug. 09, 2016 | Sep. 30, 2019USD ($) | Sep. 30, 2019USD ($) | Aug. 13, 2018USD ($) | Dec. 31, 2018USD ($) | Nov. 09, 2018USD ($) |
2018 Term Loan Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Long-term debt, gross | $ 446,625,000 | $ 446,625,000 | $ 450,000,000 | |||||
Revolving asset-based credit facility | 6,650,000 | 6,650,000 | 7,500,000 | |||||
2018 U.S. Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, face amount | $ 50,000,000 | $ 50,000,000 | ||||||
Maximum borrowing capacity | 375,000,000 | 375,000,000 | ||||||
2018 Canadian Revolving Credit Subfacility | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, face amount | 10,000,000 | 10,000,000 | ||||||
Maximum borrowing capacity | 75,000,000 | 75,000,000 | ||||||
2018 FILO Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | $ 25,000,000 | 25,000,000 | ||||||
Terminated debt amount | $ 25,000,000 | |||||||
2018 ABL Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, face amount | 375,000,000 | 375,000,000 | ||||||
Maximum borrowing capacity | 134,300,000 | 134,300,000 | ||||||
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 | $ 240,700,000 | $ 240,700,000 | ||||||
Weighted average interest rate | 3.80% | 4.00% | ||||||
Deferred financing cost expensed | $ 2,600,000 | |||||||
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% | |||||||
2016 ABL Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, face amount | $ 300,000,000 | $ 300,000,000 | ||||||
Weighted average interest rate | 3.40% | |||||||
Deferred financing cost expensed | 700,000 | |||||||
Senior Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Deferred financing cost expensed | $ 57,800,000 | |||||||
Long-term debt, gross | $ 575,000,000 | |||||||
Redemption price, percentage | 104.125% | |||||||
Percentage of issue price of a private placement | 100.00% | |||||||
Interest rate, stated percentage | 8.25% | |||||||
Senior Notes | 2018 Term Loan Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, face amount | $ 450,000,000 | $ 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 | 5,000,000 | ||||||
Letter of Credit | 2018 ABL Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, face amount | $ 10,000,000 | $ 10,000,000 | ||||||
Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Long-term debt, gross | $ 134,306,000 | $ 134,306,000 | 146,000,000 | |||||
Revolving asset-based credit facility | 3,933,000 | 3,933,000 | 4,673,000 | |||||
Revolving Credit Facility | Line of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Unamortized debt issuance costs | 10,600,000 | 10,600,000 | 12,200,000 | |||||
Notes Payable, Noncurrent | Line of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Revolving asset-based credit facility | 6,700,000 | 6,700,000 | 7,500,000 | |||||
Other Long-term Assets | Revolving Credit Facility | Line of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Revolving asset-based credit facility | $ 3,900,000 | $ 3,900,000 | $ 4,700,000 |
Tax Receivable Agreement (Detai
Tax Receivable Agreement (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Jan. 31, 2019 | Mar. 31, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Income Tax Contingency [Line Items] | |||||
Tax receivable agreement, percentage of income taxes | 90.00% | ||||
Liability for tax receivable agreement | $ 117,900 | $ 134,600 | |||
Reduction in tax receivable agreement liability | $ 16,700 | $ 16,667 | $ 0 | ||
Forecast | |||||
Income Tax Contingency [Line Items] | |||||
Reduction in tax receivable agreement liability | $ 27,700 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | $ 366,349 | |||
Other comprehensive income (loss) | $ (640) | $ 61 | (4,119) | $ (1,885) |
Ending balance | 395,822 | 395,822 | ||
Foreign Currency Translation (Losses) Gains | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (3,085) | |||
Other comprehensive income (loss) | 2,317 | |||
Ending balance | (768) | (768) | ||
Unrealized Gain (Loss) on Derivatives, Net of Taxes | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | 2,904 | |||
Other comprehensive income (loss) | (6,436) | |||
Ending balance | (3,532) | (3,532) | ||
AOCI Attributable to Parent | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (181) | |||
Ending balance | $ (4,300) | $ (4,300) |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Non-current liabilities | ||
Derivative liability | $ (7,781) | |
Assets | ||
Derivative assets | $ 4,344 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Non-current liabilities | ||
Derivative liability | 0 | |
Assets | ||
Derivative assets | 0 | |
Significant Other Observable Inputs (Level 2) | ||
Non-current liabilities | ||
Derivative liability | (7,781) | |
Assets | ||
Derivative assets | 4,344 | |
Significant Unobservable Inputs (Level 3) | ||
Non-current liabilities | ||
Derivative liability | $ 0 | |
Assets | ||
Derivative assets | $ 0 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense (benefit) | $ 5,754 | $ (12,519) | $ 13,232 | $ (13,299) |
Effective tax rate | 31.20% | 25.00% | 29.10% | 25.80% |
Segments - Narrative (Details)
Segments - Narrative (Details) - segment | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Segment Reporting [Abstract] | ||||
Number of reportable segments | 1 | |||
Sales Revenue, Net | Geographic Concentration Risk | United States | ||||
Segment Reporting Information [Line Items] | ||||
Concentration risk, percentage | 90.10% | 90.00% | 90.40% | 88.60% |
Sales Revenue, Net | Geographic Concentration Risk | Canada | ||||
Segment Reporting Information [Line Items] | ||||
Concentration risk, percentage | 9.90% | 10.00% | 9.60% | 11.40% |
Segments - Schedule of Geograph
Segments - Schedule of Geographic Areas (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Segment Reporting Information [Line Items] | ||
Total property, plant and equipment, net | $ 153,294 | $ 151,641 |
Right-of-use assets, net | 117,137 | 0 |
Goodwill | 490,315 | 484,941 |
Intangibles, net | 117,894 | 145,876 |
United States | ||
Segment Reporting Information [Line Items] | ||
Total property, plant and equipment, net | 138,738 | 137,252 |
Right-of-use assets, net | 102,841 | 0 |
Goodwill | 459,978 | 460,384 |
Intangibles, net | 105,959 | 141,186 |
Canada | ||
Segment Reporting Information [Line Items] | ||
Total property, plant and equipment, net | 14,556 | 14,389 |
Right-of-use assets, net | 14,296 | 0 |
Goodwill | 30,337 | 24,557 |
Intangibles, net | $ 11,935 | $ 4,690 |
Segments - Schedule of Net Sale
Segments - Schedule of Net Sales From External Customers (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenue from External Customer [Line Items] | ||||
Net sales | $ 564,906 | $ 542,273 | $ 1,639,689 | $ 1,528,153 |
Percentage of net sales | 100.00% | 100.00% | 100.00% | 100.00% |
Change in net sales | $ 22,633 | $ 111,536 | ||
Percentage change in net sales | 4.20% | 7.30% | ||
Wallboard | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | $ 207,326 | $ 203,991 | $ 624,299 | $ 583,242 |
Percentage of net sales | 36.70% | 37.60% | 38.10% | 38.20% |
Change in net sales | $ 3,335 | $ 41,057 | ||
Percentage change in net sales | 1.60% | 7.00% | ||
Suspended ceiling systems | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | $ 118,873 | $ 104,422 | $ 314,045 | $ 288,356 |
Percentage of net sales | 21.00% | 19.30% | 19.20% | 18.90% |
Change in net sales | $ 14,451 | $ 25,689 | ||
Percentage change in net sales | 13.80% | 8.90% | ||
Metal framing | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | $ 98,817 | $ 98,576 | $ 300,493 | $ 264,019 |
Percentage of net sales | 17.50% | 18.20% | 18.30% | 17.30% |
Change in net sales | $ 241 | $ 36,474 | ||
Percentage change in net sales | 0.20% | 13.80% | ||
Complementary and other products | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | $ 139,890 | $ 135,284 | $ 400,852 | $ 392,536 |
Percentage of net sales | 24.80% | 24.90% | 24.40% | 25.70% |
Change in net sales | $ 4,606 | $ 8,316 | ||
Percentage change in net sales | 3.40% | 2.10% |
Other Current Liabilities (Deta
Other Current Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Other Liabilities Disclosure [Abstract] | ||
Accrued expenses | $ 5,496 | $ 5,080 |
Accrued interest | 152 | 1,315 |
Accrued other | 18,002 | 13,584 |
Total other current liabilities | $ 23,650 | $ 19,979 |
Earnings (Loss) Per Share (Deta
Earnings (Loss) Per Share (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Earnings Per Share [Abstract] | ||||
Weighted average shares used in basic computations (in shares) | 42,988,829 | 42,894,474 | 42,969,797 | 42,889,430 |
Dilutive effect of stock options and restricted stock units (in shares) | 519,849 | 22,756 | 204,554 | 15,843 |
Weighted average shares used in diluted computations (in shares) | 43,508,678 | 42,917,230 | 43,174,351 | 42,905,273 |
Antidilutive securities (in shares) | 324,495 | 66,619 | 525,012 | 135,780 |
Subsequent Events (Details)
Subsequent Events (Details) - branch | Oct. 01, 2019 | Sep. 30, 2019 |
Subsequent Event [Line Items] | ||
Number of branch locations | 175 | |
Wallboard | Colorado | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Number of branch locations | 1 | |
The Supply Guy, Inc. | Colorado | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Number of branch locations | 1 |