Cover Page
Cover Page - shares | 9 Months Ended | |
Jun. 30, 2020 | Jul. 31, 2020 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2020 | |
Document Period End Date | Jun. 30, 2020 | |
Current Fiscal Year End Date | --09-30 | |
Entity Registrant Name | AZEK Co Inc. | |
Entity Central Index Key | 0001782754 | |
Entity Tax Identification Number | 90-1017663 | |
Entity Interactive Data Current | Yes | |
Entity Current Reporting Status | No | |
Entity Shell Company | false | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Incorporation, State or Country Code | DE | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Address, Address Line One | 1330 W Fulton Street, Suite 350 | |
Entity Address, City or Town | Chicago | |
Entity Address, State or Province | IL | |
Entity Address, Postal Zip Code | 60607 | |
Title of 12(b) Security | Class A Common Stock, par value $0.001 per share | |
Trading Symbol | AZEK | |
Security Exchange Name | NYSE | |
Common Class A [Member] | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 121,566,577 | |
Common Class B [Member] | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 33,068,963 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2020 | Sep. 30, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 215,111 | $ 105,947 |
Trade receivables, net of allowances | 79,605 | 52,623 |
Inventories | 130,626 | 115,391 |
Prepaid expenses | 10,323 | 6,037 |
Other current assets | 875 | 10,592 |
Total current assets | 436,540 | 290,590 |
Property, plant and equipment, net | 235,229 | 208,694 |
Goodwill | 951,190 | 944,298 |
Intangible assets, net | 306,095 | 342,418 |
Other assets | 1,268 | 2,263 |
Total assets | 1,930,322 | 1,788,263 |
Current liabilities: | ||
Accounts payable | 36,414 | 47,479 |
Accrued rebates | 22,770 | 22,733 |
Accrued interest | 1,185 | 13,578 |
Current portion of long-term debt obligations | 0 | 8,304 |
Accrued expenses and other liabilities | 47,222 | 47,903 |
Total current liabilities | 107,591 | 139,997 |
Deferred income taxes | 26,732 | 34,003 |
Finance lease obligations—less current portion | 10,901 | 11,181 |
Long-term debt—less current portion | 506,656 | 1,103,313 |
Other non-current liabilities | 8,929 | 9,746 |
Total liabilities | 660,809 | 1,298,240 |
Commitments and contingencies (See Note 16) | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value; 1,000,000 shares authorized and no shares issued and outstanding at June 30, 2020 and September 30, 2019, respectively | 0 | |
Additional paid-in capital | 1,488,474 | 652,493 |
Accumulated deficit | (219,116) | (162,578) |
Total stockholders' equity | 1,269,513 | 490,023 |
Total liabilities and stockholders' equity | 1,930,322 | 1,788,263 |
Common Class A [Member] | ||
Stockholders' equity: | ||
Common stock | 122 | 75 |
Total stockholders' equity | 122 | 75 |
Common Class B [Member] | ||
Stockholders' equity: | ||
Common stock | 33 | 33 |
Total stockholders' equity | $ 33 | $ 33 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2020 | Sep. 30, 2019 |
Preferred stock, par value per share | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common Class A [Member] | ||
Common stock, par value per share | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 1,100,000,000 | 1,100,000,000 |
Common stock, shares issued | 121,566,577 | 75,093,778 |
Common stock, shares outstanding | 121,566,577 | 75,093,778 |
Common Class B [Member] | ||
Common stock, par value per share | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 33,068,963 | 33,068,963 |
Common stock, shares outstanding | 33,068,963 | 33,068,963 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net sales | $ 223,711 | $ 221,307 | $ 635,339 | $ 578,669 |
Cost of sales | 148,588 | 145,897 | 429,553 | 394,948 |
Gross margin | 75,123 | 75,410 | 205,786 | 183,721 |
Selling, general and administrative expenses | 65,164 | 50,185 | 158,330 | 136,988 |
Other general expenses | 1,623 | 1,997 | 6,716 | 6,155 |
Loss on disposal of plant, property and equipment | 366 | 36 | 394 | 1,472 |
Operating income (loss) | 7,970 | 23,192 | 40,346 | 39,106 |
Other expenses: | ||||
Interest expense | 25,148 | 21,440 | 64,882 | 63,213 |
Loss on extinguishment of debt | 37,538 | 37,538 | 0 | |
Total other expenses | 62,686 | 21,440 | 102,420 | 63,213 |
Income (loss) before income taxes | (54,716) | 1,752 | (62,074) | (24,107) |
Income tax expense (benefit) | (2,600) | 241 | (4,200) | (4,831) |
Net income (loss) | $ (52,116) | $ 1,511 | $ (57,874) | $ (19,276) |
Net income (loss) per common share: | ||||
Basic and Diluted | $ (0.44) | $ 0.01 | $ (0.51) | $ (0.18) |
Comprehensive income (loss) | $ (52,116) | $ 1,511 | $ (57,874) | $ (19,276) |
Weighted average shares used in calculating net income (loss) per common share: | ||||
Basic and Diluted | 118,738,357 | 108,162,741 | 113,525,537 | 108,162,741 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Adoption of ASU [Member] | Common Class A [Member] | Common Class B [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Accumulated Deficit [Member]Adoption of ASU [Member] |
Beginning balance at Sep. 30, 2018 | $ 505,553 | $ 194 | $ 75 | $ 33 | $ 648,021 | $ (142,576) | $ 194 |
Beginning balance (in shares) at Sep. 30, 2018 | 75,093,778 | 33,068,963 | |||||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201409Member | ||||||
Net income (loss) | $ (19,276) | (19,276) | |||||
Member capital contributions | 1,311 | 1,311 | |||||
Member capital redemptions | (26) | (26) | |||||
Stock-based compensation | 2,599 | 2,599 | |||||
Ending balance at Jun. 30, 2019 | 490,355 | $ 75 | $ 33 | 651,905 | (161,658) | ||
Ending balance (in shares) at Jun. 30, 2019 | 75,093,778 | 33,068,963 | |||||
Beginning balance at Mar. 31, 2019 | 488,133 | $ 75 | $ 33 | 651,194 | (163,169) | ||
Beginning balance (in shares) at Mar. 31, 2019 | 75,093,778 | 33,068,963 | |||||
Net income (loss) | 1,511 | 1,511 | |||||
Member capital redemptions | (26) | (26) | |||||
Stock-based compensation | 737 | 737 | |||||
Ending balance at Jun. 30, 2019 | 490,355 | $ 75 | $ 33 | 651,905 | (161,658) | ||
Ending balance (in shares) at Jun. 30, 2019 | 75,093,778 | 33,068,963 | |||||
Beginning balance at Sep. 30, 2019 | $ 490,023 | $ 1,336 | $ 75 | $ 33 | 652,493 | (162,578) | $ 1,336 |
Beginning balance (in shares) at Sep. 30, 2019 | 75,093,778 | 33,068,963 | |||||
Accounting Standards Update [Extensible List] | azek:AccountingStandardsUpdate201616Member | ||||||
Member contributions prior to initial public offering | $ 1,500 | 1,500 | |||||
Member redemptions prior to initial public offering | (3,553) | (3,553) | |||||
Conversion of profits interests into common shares | $ 9 | (9) | |||||
Conversion of profits interests into common shares (in shares) | 8,235,299 | ||||||
Net proceeds from initial public offering | 819,411 | $ 38 | 819,373 | ||||
Net proceeds from initial public offering (in shares) | 38,237,500 | ||||||
Net income (loss) | (57,874) | (57,874) | |||||
Stock-based compensation | 18,670 | 18,670 | |||||
Ending balance at Jun. 30, 2020 | 1,269,513 | $ 122 | $ 33 | 1,488,474 | (219,116) | ||
Ending balance (in shares) at Jun. 30, 2020 | 121,566,577 | 33,068,963 | |||||
Beginning balance at Mar. 31, 2020 | 485,406 | $ 75 | $ 33 | 652,298 | (167,000) | ||
Beginning balance (in shares) at Mar. 31, 2020 | 75,093,778 | 33,068,963 | |||||
Member contributions prior to initial public offering | (477) | (477) | |||||
Conversion of profits interests into common shares | $ 9 | (9) | |||||
Conversion of profits interests into common shares (in shares) | 8,235,299 | ||||||
Net proceeds from initial public offering | 819,411 | $ 38 | 819,373 | ||||
Net proceeds from initial public offering (in shares) | 38,237,500 | ||||||
Net income (loss) | (52,116) | $ 0 | (52,116) | ||||
Stock-based compensation | 17,289 | 17,289 | |||||
Ending balance at Jun. 30, 2020 | $ 1,269,513 | $ 122 | $ 33 | $ 1,488,474 | $ (219,116) | ||
Ending balance (in shares) at Jun. 30, 2020 | 121,566,577 | 33,068,963 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Operating activities: | ||
Net income (loss) | $ (57,874) | $ (19,276) |
Adjustments to reconcile net income (loss) to net cash flows provided by (used in) operating activities: | ||
Depreciation | 33,603 | 24,155 |
Amortization of intangibles | 41,622 | 45,479 |
Non-cash interest expense | 6,527 | 2,990 |
Deferred income tax benefit | (4,048) | (5,565) |
Non-cash compensation expense | 18,670 | 3,530 |
Fair value adjustment for contingent consideration | 0 | 53 |
Loss on disposition of property, plant and equipment | 394 | 1,472 |
Bad debt provision | 522 | 284 |
Loss on extinguishment of debt | 37,538 | 0 |
Changes in certain assets and liabilities: | ||
Trade receivables | (26,385) | (33,739) |
Inventories | (12,703) | (612) |
Prepaid expenses and other current assets | (4,130) | (3,111) |
Accounts payable | (12,753) | (869) |
Accrued expenses and interest | (8,592) | 1,616 |
Other assets and liabilities | (1,105) | 3,850 |
Net cash provided by (used in) operating activities | 11,286 | 20,257 |
Investing activities: | ||
Purchases of property, plant and equipment | (54,768) | (46,440) |
Proceeds from sale of property, plant and equipment | 223 | 49 |
Acquisition, net of cash acquired | (18,453) | |
Net cash provided by (used in) investing activities | (72,998) | (46,391) |
Financing activities: | ||
Proceeds from initial public offering, net of related costs | 822,630 | |
Proceeds from 2025 Senior Notes | 346,500 | |
Redemption of Senior Notes | (665,000) | |
Payments of debt extinguishment costs | (24,938) | |
Proceeds under revolving credit facility | 129,000 | 40,000 |
Payments under revolving credit facility | (85,000) | (40,000) |
Payments on long-term debt obligations | (341,958) | (6,228) |
Payment of debt issuance costs | (7,704) | 0 |
Proceeds (repayments) of finance lease obligations | (601) | 1,592 |
Payments of contingent consideration | 0 | (2,000) |
Redemption of capital contributions | (3,553) | (26) |
Capital contributions | 1,500 | 1,311 |
Net cash provided by (used in) financing activities | 170,876 | (5,351) |
Net increase (decrease) in cash and cash equivalents | 109,164 | (31,485) |
Cash and cash equivalents – Beginning of period | 105,947 | 82,283 |
Cash and cash equivalents – End of period | 215,111 | 50,798 |
Supplemental cash flow disclosure: | ||
Cash paid for interest, net of amounts capitalized | 70,801 | 66,086 |
Cash paid for income taxes, net | 544 | 803 |
Supplemental non-cash investing and financing disclosure: | ||
Capital expenditures in accounts payable at end of period | 5,058 | 4,142 |
Property, plant and equipment acquired under finance leases | $ 630 | $ 1,549 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 9 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Summary of Significant Accounting Policies | 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES a. Organization The AZEK Company Inc. (the “Company”) is a Delaware corporation that holds all of the limited liability company interests in CPG International LLC, the entity which directly and indirectly holds all of the equity interests in the operating subsidiaries. The Company is a leading manufacturer of premium, low maintenance building products for residential, commercial and industrial markets. The Company’s products include trim, deck, porch, moulding, rail, pavers, bathroom and locker systems, as well as extruded plastic sheet products and other non-fabricated AZEK is a brand name for residential products while the commercial products are branded under the brand names Celtec, Playboard, Seaboard, Flametec, Designboard, Cortec, Sanatec, Scranton Products, Aria Partitions, Eclipse Partitions, Hiny Hiders, Tufftec Lockers and Duralife Lockers. Initial Public Offering On June 16, 2020, the Company completed its initial public offering (the “ IPO”) of its Class A common stock, in which it sold 38,237,500 shares, including 4,987,500 shares pursuant to the underwriters’ over-allotment option. The shares began trading on the New York Stock Exchange on June 12, 2020 under the symbol “AZEK”. The shares were sold at an IPO price of $23.00 per share for net proceeds to the Company of approximately $819.4 million, after deducting underwriting discounts and commissions of $50.6 million and estimated offering expenses of approximately $9.5 million payable by the Company. In addition, the Company used its net proceeds to redeem $350.0 million in aggregate principal of its then- outstanding 2025 Senior Notes , $70.0 million of its and effected a $337.7 million prepayment of its then- outstanding principal amount under the Term Loan Agreement. Refer to Note 8 for additional information. In conjunction with the Company’s conversion from a limited liability company into a corporation (the “Corporate Conversion”) prior to the closing of the IPO, the Company effected a unit split of its then-outstanding limited liability company unit and then converted the units on a one-to-one b. Summary of Significant Accounting Policies Basis of Presentation The Company operates on a fiscal year ending September 30. The accompanying unaudited Condensed Consolidated Financial Statements and notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and in management’s opinion, includes all adjustments, consisting of only normal recurring adjustments, necessary for the fair statement of the Company’s financial position, its results of operations and cash flows for the interim periods presented. The results of operations for the three and nine months ended June 30, 2020, and the cash flows for the nine months ended June 30, 2020, are not necessarily indicative of the results to be expected for the full fiscal year or any other period. The Company’s financial condition and results of operations are being, and are expected to continue to be affected by the current COVID-19 COVID-19 COVID-19 COVID-19 COVID-19 The accompanying unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto contained in the Company’s final prospectus filed pursuant to Rule 424(b) under the Securities Act of 1933, as amended (the “Securities Act”), with the Securities and Exchange Commission (“SEC”) on June 15, 2020 (the “Prospectus”). The Condensed Consolidated Balance Sheet as of September 30, 2019 was derived from the audited financial statements at that date. There have been no material changes in the Company’s significant accounting policies from those that were disclosed in the Prospectus, except as noted below. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Significant estimates include revenue recognition, reserves for excess inventory, inventory obsolescence, product warranties, customer rebates, stock -based compensation, litigation, income taxes, contingent consideration, goodwill and intangible asset valuation and accounting for long-lived assets. Management’s estimates and assumptions are evaluated on an ongoing basis and are based on historical experience, current conditions and available information. Actual results may differ from estimated amounts. Estimates are revised as additional information becomes available. Accounting Policies Refer to the Prospectus for a discussion of the Company’s accounting policies, as updated below and for recently adopted accounting standards. Stock-Based Compensation The Company determines the expense for all employee stock-based compensation awards by estimating their fair value and recognizing such value as an expense, on a straight-line, ratable or cliff basis, depending on the award, in the Consolidated Financial Statements over the requisite service period in which employees earn the awards. The Company estimates the fair value of performance-based awards granted to employees using the Monte Carlo pricing model and for service-based awards granted to employees using the Black Scholes pricing model. The fair value of performance-based awards that are expected to vest is recognized as compensation expense on a straight-line basis over the requisite service period. The fair value of service-based awards that are expected to vest is recognized as compensation expense on either (1) straight-line basis, (2) a ratable vesting basis or (3) a cliff vesting basis. The Company accounts for forfeitures as they occur. To determine the fair value of a stock-based award using the Monte Carlo and Black Scholes models, the Company makes assumptions regarding the risk-free interest post-IPO volatility levels of its common stock in conjunction with the historical volatility levels of public companies that operate in similar industries or are similar in terms of stage of development or size and then projecting this information toward its future expected volatility. The Company exercises judgment in selecting these companies, as well as in evaluating the available historical and implied volatility for these companies. Dividend yield is determined based on the Company’s future plans to pay dividends. The Company calculates the performance period based on the specific market condition to be achieved and derived from estimates of future performance. The Company calculates the expected term in years for each stock option using a simplified method based on the average of each option’s vesting term and original contractual term. The simplified method is used due to the lack of sufficient historical data available to provide a reasonable basis upon which to estimate the expected term of each stock option. Concurrently with the closing of the IPO, the Company granted to certain of its directors, officers and employees restricted stock awards, restricted stock units and stock options, each of which vest upon the satisfaction of a service condition or a performance condition. Earnings Per Share Basic net income per common share is computed based on the weighted average number of common shares outstanding. Potentially dilutive shares are included in the diluted per-share Research and Development Costs Research and development costs primarily relate to new product development, product claims support and manufacturing process improvements. Such costs are expensed as incurred and are included in “Selling, general and administrative expenses” within the Condensed Consolidated Statements of Comprehensive Income (Loss). Total research and development expenses were approximately $1.7 million and $2.1 million, respectively, for the three months ended June 30, 2020 and 2019, and $5.7 million and $5.9 million, respectively, for the nine months ended June 30, 2020 and 2019. Recently Adopted Accounting Pronouncements Under the Jumpstart Our Business Startups (“JOBS”) Act, the Company qualifies as an emerging growth company (“EGC”) and as such, has elected not to opt out of the extended transition period for complying with new or revised accounting pronouncements. During the extended transition period, the Company is not subject to new or revised accounting standards applicable to public companies. The accounting pronouncements pending adoption below reflect effective dates for the Company as an EGC with the extended transition period. On October 1, 2018, the Company early adopted Accounting Standards Update (“ASU”) ASU No. 2014-09, Revenue from Contracts with Customers , which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The update supersedes most current revenue recognition guidance. Under the new standard, entities are required to identify the contract with a customer; identify the separate performance obligations in the contract; determine the transaction price; allocate the transaction price to the separate performance obligations in the contract; and recognize the appropriate amount of revenue when (or as) the entity satisfies each performance obligation. The adoption of this standard did not have a material impact on the Company’s Consolidated Financial Statements. Refer to Note 2 for additional information. On October 1, 2019, the Company adopted ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfer of Assets Other Than Inventory Recently Issued Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-02, Leases (Topic 842), No. 2017-13, No. 2018-01, 2018-10 2018-11, No. 2018-20, No. 2019-01, No. 2019-10 No. 2020-05. right-of-use In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326) No. 2019-05 2019-10 2019-11. off-balance In August 2018, the FASB issued ASU No. 2018-13, Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, Fair Value Measurement In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use 350-40): internal-use In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740)—Simplifying the Accounting for Income Taxes In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting . |
Revenue
Revenue | 9 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | 2. REVENUE The Company sells its products to residential and commercial markets. The Company’s Residential segment principally generates revenue from the manufacture and sale of its premium, low maintenance composite decking, railing, trim, moulding, pavers products and accessories. The Company’s Commercial segment generates revenue from the sale of its partition and locker systems along with plastic sheeting and other non-fabricated The Company recognizes revenues when control of the promised goods is transferred to the Company’s customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods, at a point in time, when shipping occurs. Each product the Company transfers to the customer is considered one performance obligation. The Company has elected to account for shipping and handling costs as activities to fulfill the promise to transfer the goods. As a result of this accounting policy election, the Company does not consider shipping and handling activities as promised services to its customers. Customer contracts are typically fixed price and short-term in nature. The transaction price is based on the product specifications and is determined at the time of order. The Company may offer various sales incentive programs throughout the year. It estimates the amount of sales incentive to allocate to each performance obligation, or product shipped, using the most-likely-amount method of estimation, based on sales to the direct customer or sell-through customer. The estimate is updated each reporting period and any changes are allocated to the performance obligations on the same basis as at inception. Changes in estimate allocated to a previously satisfied performance obligation are recognized as part of net revenue in the period in which the change occurs under the cumulative catch-up The Company also engages in customer rebates, which are recorded in Net s receivables of $3.0 million and $3.5 million as of June 30, 2020 and 2019, respectively. The rebate activity was as follows (in thousands): Three Months Ended June 30, Nine Months Ended June 30, 2020 2019 2020 2019 Beginning balance $ 22,123 $ 31,028 $ 24,858 $ 21,914 Rebate expense 11,545 10,336 44,989 38,335 Rebate payments (7,844 ) (19,578 ) (44,023 ) (38,463 ) Ending balance $ 25,824 $ 21,786 $ 25,824 $ 21,786 The Company records deferred revenue when cash payments are received or due in advance of the Company’s performance. |
Business Combinations
Business Combinations | 9 Months Ended |
Jun. 30, 2020 | |
Business Combinations [Abstract] | |
Business Combinations | 3. BUSINESS COMBINATIONS On January 31, 2020, the Company acquired certain assets and assumed certain liabilities of Return Polymers, Inc. for a total purchase price of approximately $18.5 million, subject to customary post-closing working capital adjustments. Return Polymers is located in Ashland Ohio and is a provider of full-service recycled PVC material processing, sourcing, logistical support, and scrap management programs. The Company financed the acquisition with cash on hand. The acquisition was accounted for as a business combination under Accounting Standards Codification (“ASC”) ASC 805 Business Combinations . The following table represents the preliminary allocation of assets acquired and liabilities assumed on the acquisition date and certain measurement period adjustments attributable to customary working capital adjustments (in thousands): Measurement Acquisition Period Date Adjustments Total Total purchase consideration $ 18,069 $ 384 $ 18,453 Allocation of consideration to assets acquired and liabilities assumed: Cash and cash equivalents $ 204 $ (204 ) $ — Accounts r 1,119 — 1,119 Inventories 2,532 — 2,532 Prepaid expenses and other current assets 39 — 39 Property, plant and equipment 4,080 — 4,080 Intangible assets 5,300 — 5,300 Goodwill 6,304 588 6,892 Accounts payable (947 ) — (947 ) Accrued expenses and other liabilities (562 ) — (562 ) Net assets acquired $ 18,069 $ 384 $ 18,453 At the acquisition date, total intangible assets and goodwill amounted to $11.6 million, comprised of $4.6 million related to customer relationships, and $0.7 million related to trademarks, as well as $6.3 million in goodwill. During the three months ended June 30, 2020, the Company recognized $0.6 million in working capital adjustments, resulting in an increase in goodwill for the same, and $6.9 million in total goodwill as of June 30, 2020. It is expected that $6.9 million of the goodwill is deductible for tax purposes. The estimated useful life for customer relationships is 15 years and trademarks is 10 years. The weighted average useful life at the date of acquisition was 14.3 years. |
Inventories
Inventories | 9 Months Ended |
Jun. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | 4. INVENTORIES Inventories are valued at the lower of cost or net realizable value, and are reduced for slow-moving and obsolete inventory. The inventories cost is recorded at standard cost, which approximates actual cost, on a first-in first-out June 30, 2020 September 30, 2019 Raw materials $ 34,353 $ 36,855 Work in process 19,557 19,514 Finished goods 76,716 59,022 Total inventories $ 130,626 $ 115,391 |
Property, Plant and Equipment -
Property, Plant and Equipment - Net | 9 Months Ended |
Jun. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment - Net | 5. PROPERTY, PLANT AND EQUIPMENT - Property, plant and equipment – net consisted of the following (in thousands): June 30, 2020 September 30, 2019 Land and improvements $ 2,758 $ 2,758 Buildings and improvements 70,042 67,770 Capital lease - 2,021 2,021 Capital lease - 1,026 1,026 Capital lease - 3,685 3,835 Manufacturing equipment 292,176 254,570 Computer equipment 24,742 22,733 Furniture and fixtures 5,855 5,409 Vehicles 410 339 Total property, plant and equipment 402,715 360,461 Construction in progress 32,640 16,453 435,355 376,914 Accumulated depreciation (200,126 ) (168,220 ) Total property, plant and equipment - $ 235,229 $ 208,694 The Company is considered the owner, for accounting purposes only, of leased office space, as it had taken on certain risks of construction build cost overages above normal tenant improvement allowances. Accordingly, the estimated fair value of the leased property was $9.2 million as of both June 30, 2020 and September 30, 2019. The corresponding lease financing obligation was $7.9 million as of both June 30, 2020 and September 30, 2019. The lease financing obligation was recorded in “Finance lease obligations – less current portion” in the Condensed Balance Sheets. Refer to Note 16 for additional information. Depreciation expense was approximately $12.7 million and $8.2 million in the three months ended June 30, 2020 and 2019, respectively, and $33.6 million and $24.2 million in the nine months ended June 30, 2020 and 2019, respectively. During the three months ended June 30, 2020 and 2019, $0.3 million and $0.1 million of interest was capitalized, respectively, and during the nine months ended June 30, 2020 and 2019, $0.8 million and $0.7 million of interest was capitalized, respectively. Accumulated amortization for assets under capital leases was $3.9 million and $3.7 million as of June 30, 2020 and September 30, 2019, respectively. Accumulated amortization for the assets under the build-to-suit |
Goodwill and Intangible Assets
Goodwill and Intangible Assets - Net | 9 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets - Net | 6. GOODWILL AND INTANGIBLE ASSETS – NET Goodwill As of June 30, 2020, the Company had goodwill of $951.2 million with carrying amounts for Residential of $910.8 million and Commercial of $40.4 million. As of September 30, 2019, the Company had goodwill of $944.3 million with carrying amounts for Residential of $903.9 million and Commercial of $40.4 million. As of June 30, 2020, total accumulated goodwill impairments were $32.2 million, all attributable to the Company’s Commercial segment. Intangible assets, net The Company does not have any indefinite lived intangible assets other than goodwill as of June 30, 2020 and September 30, 2019. As of June 30, 2020 Lives in Gross Carrying Accumulated Net Carrying Proprietary knowledge 10 - 15 $ 289,300 $ (189,474 ) $ 99,826 Trademarks 5 - 20 223,840 (120,454 ) 103,386 Customer relationships 15 - 19 146,870 (48,917 ) 97,953 Patents 10 7,000 (2,927 ) 4,073 Other intangibles 3 - 15 4,076 (3,219 ) 857 $ 671,086 $ (364,991 ) $ 306,095 As of September 30, 2019 Lives in Gross Carrying Accumulated Net Carrying Proprietary knowledge 10 - 15 $ 289,300 $ (171,686 ) $ 117,614 Trademarks 5 - 20 223,140 (108,096 ) 115,044 Customer relationships 15 - 19 142,270 (39,084 ) 103,186 Patents 10 7,000 (2,132 ) 4,868 Other intangibles 3 - 15 4,076 (2,370 ) 1,706 $ 665,786 $ (323,368 ) $ 342,418 Amortization expense was approximately $13.9 million and $15.1 million in the three months ended June 30, 2020 and 2019, respectively, and $41.6 million and $45.5 million in the nine months ended June 30, 2020 and 2019, respectively. As of June 30, 2020, the remaining weighted-average amortization period for acquired intangible assets was 13.1 years. Amortization expense relating to these amortizable intangible assets as of June 30, 2020, is expected to be as follows (in thousands): Remaining period of 2020 $ 13,538 2021 49,826 2022 44,369 2023 39,240 2024 34,246 Thereafter 124,876 Total $ 306,095 |
Composition of Certain Balance
Composition of Certain Balance Sheet Accounts | 9 Months Ended |
Jun. 30, 2020 | |
Composition of Certain Balance Sheet Accounts Disclosure [Abstract] | |
Composition of Certain Balance Sheet Accounts | 7. COMPOSITION OF CERTAIN BALANCE SHEET ACCOUNTS Allowance for Doubtful Accounts Allowance for doubtful accounts consisted of the following (in thousands): Three Months Ended June 30, Nine Months Ended June 30, 2020 2019 2020 2019 Beginning balance $ 1,678 $ 1,441 $ 904 $ 1,230 Provision (229 ) 67 522 284 Acquis i n — — 35 — Bad debt write - s (107 ) (703 ) (119 ) (709 ) Ending balance $ 1,342 $ 805 $ 1,342 $ 805 Accrued Expenses and Other Liabilities Accrued expenses consisted of the following (in thousands): June 30, 2020 September 30, 2019 Employee related liabilities $ 23,605 $ 17,202 Professional fees 5,863 14,160 Freight 4,191 4,158 Warranty 3,375 2,543 Marketing 2,794 2,026 Construction in progress 1,547 903 Capital lease 922 721 Contingent consideration — 1,303 Other 4,925 4,887 Total accrued expenses and other current liabilities $ 47,222 $ 47,903 |
Debt
Debt | 9 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | 8. DEBT Debt consisted of the following (in thousands): June 30, 2020 September 30, 2019 Term Loan Agreement due May 5, 2024 — LIBOR + 3.75% (4.75% and 5.93% at June 30, 2020 and September 30, 2019 , respectively $ 467,112 $ 808,507 Revolving Credit Facility through March 9, 2022 — LIBOR + 1.75% (2.75% and 0.00% at June 30, 2020 and September 30, 2019 , respectivel y 44,000 — 2021 — 315,000 Total 511,112 1,123,507 Less: unamortized deferred financing fees (4,456 ) (11,890 ) Less: current portion — (8,304 ) Long-term debt—less current portion and unamortized deferred financing fees $ 506,656 $ 1,103,313 As of June 30, 2020, the Company has scheduled fiscal year debt payments on the Term Loan Agreement and Revolving Credit Facility as follows (in thousands): Remaining period of 2020 $ — 2021 — 2022 44,000 2023 — 2024 467,654 Thereafter — Total $ 511,654 Term Loan Agreement On September 30, 2013, CPG International LLC refinanced its then outstanding long-term debt and entered into (i) a new senior secured revolving credit facility (the “Revolving Credit Facility”) among CPG International LLC (as successor-in-interest successor-in-interest co-syndication co-documentation 2021 The proceeds from borrowings under the amended Term Loan Agreement and the 2021 Senior Notes were used to (i) fund the acquisition of CPG International LLC and (ii) repay all amounts outstanding under the Company’s prior term loan agreement, prior notes and related fees. The Term Loan Agreement matures on May 5, 2024 , since the 2021 Senior Notes were redeemed June 8, 2020 . The Term Loan Agreement provides for interest on outstanding principal thereunder at a fluctuating rate, at CPG International LLC’s option, for (i) alternative base rate (“ABR”) borrowings, the highest of (a) the Federal Funds Rate as of such day plus 50 basis points, (b) the prime commercial lending rate announced as of such day by the Administrative Agent as defined in the Term Loan Agreement, as the “prime rate” as in effect on such day and (c) the LIBOR as of such day for a deposit in U.S. dollars with a maturity of one month plus 100 basis points, provided that in no event shall the ABR be less than 200 basis points, plus the applicable margin of 275 basis points per annum; or (ii) for Eurocurrency borrowings, the adjusted LIBOR of (a) the LIBOR in effect for such interest period divided by one, minus the statutory reserves applicable to such Eurocurrency borrowing, if any, and (b) 100 basis points, plus the applicable margin of 375 basis points per annum. As of June 30, 2020, and September 30, 2019, unamortized deferred financing fees related to the Term Loan Agreement were $4.5 million and $9.1 million, respectively. The Term Loan Agreement may be voluntarily prepaid in whole, or in part, in each case without premium or penalty (other than the Prepayment Premium (as defined in the Term Loan Agreement), if applicable), subject to certain customary conditions. The Company used part of its net proceeds from the IPO to prepay outstanding principal of the Term Loan Agreement in the amount of $337.7 million , , and the Company recognized in interest expense an additional $3.2 million amortization of deferred financing fees associated with the prepayment amounts during the three months ended June 30, 2020. The obligations under the Term Loan Agreement are secured by a first priority security interest in the membership interests of CPG International LLC owned by The AZEK Company Inc. and substantially all of the present and future assets of the borrowers and guarantors including equity interests of their domestic subsidiaries, subject to certain exceptions, (the “Term Loan Priority Collateral”) and a second priority lien on current assets. The obligations under the Term Loan Agreement are guaranteed by the Company and the wholly owned domestic subsidiaries of CPG International LLC other than certain immaterial subsidiaries and other excluded subsidiaries. The Term Loan Agreement requires mandatory prepayments of the term loans thereunder from certain debt issuances, certain asset dispositions (subject to certain reinvestment rights) and a percentage of excess cash flow (subject to step-downs upon CPG International LLC achieving certain leverage ratios). The estimated prepayment of excess cash flow was $6.4 million at September 30, 2019. At the lenders option , the excess cash flow payment made in January 2020 was $2.2 million, with the remaining prepayment declined by the lenders . CPG International LLC is required to repay the outstanding principal amount under the Term Loan Agreement in quarterly installments equal to 0.25253% of the aggregate principal amount under the Term Loan Agreement outstanding on the amendment date of June 18, 2018 and such quarterly payments may be reduced as a result of prepayments. The Term Loan Agreement restricts payments of dividends unless certain conditions are met, as defined in the Term Loan Agreement. Revolving Credit Facility On March 9, 2017, CPG International LLC amended, restated and extended the maturity of the Revolving Credit Facility, and on June 5, 2020, CPG International LLC further amended the Revolving Credit Facility (the “Amendment”) to establish $8.5 million of commitments for FILO loans, which are available to be drawn in a single disbursement on or prior to December 31, 2020. The availability of the FILO Loans will be subject to satisfaction of certain conditions at the time of borrowing, including the value of borrowing-base eligible assets at the time of borrowing. Under the terms of the Revolving Credit Facility, as amended, FILO Loans may be borrowed against increased percentages of borrowing-base eligible assets (as compared to the percentages of borrowing-base eligible assets applicable to all other loans under the Revolving Credit Facility). The Amendment did not increase the total aggregate amount of commitments under the Revolving Credit Facility. Borrowing of FILO Loans under the Revolving Credit Facility will reduce the total aggregate commitments available for revolving loans for so long as the FILO Loans remain outstanding. If borrowed, the FILO Loans will mature on December 4, 2021. As of June 30, 2020, the Company has not drawn on the FILO loans. The Revolving Credit Facility matures on March 9, 2022. The Revolving Credit Facility provides for maximum aggregate borrowings of up to $150.0 million, subject to an asset-based borrowing base. The borrowing base is limited to a set percentage of eligible accounts receivable and inventory, less reserves that may be established by the administrative agent and the collateral agent in the exercise of their reasonable credit judgment. On March 16, 2020, the Company borrowed $89.0 million under the Revolving Credit Facility to enhance financial flexibility in light of uncertainties resulting from the COVID-19 pandemic net then- Facility Facility The Revolving Credit Facility provides for an interest rate on outstanding principal thereunder at a fluctuating rate, at CPG International LLC’s option, at (i) for ABR borrowings, the highest of (a) the Federal Funds Rate plus 50 basis points, (b) the prime rate and (c) the LIBOR as of such date for a deposit in U.S. dollars with a maturity of one month plus 100 basis points, plus, in each case, a spread of 50 to 100 basis points, based on average historical availability, or (ii) for Eurocurrency borrowings, adjusted LIBOR plus a spread of 150 to 200 basis points, based on average historical availability. A “commitment fee” accrues on any unused portion of the commitments under the Revolving Credit Facility during the preceding three calendar month period. If the average daily used percentage is greater than 50%, the commitment fee equals 25 basis points, and if the average daily used percentage is less than or equal to 50%, the commitment fee equals 37.5 basis points. The commitment fees were $0.1 million and $0.1 million for the three months ended June 30, 2020 and 2019, respectively, and $0.3 million and $0.3 million for the nine months ended June 30, 2020 and 2019, respectively. The obligations under the Revolving Credit Facility are guaranteed by The AZEK Company Inc. and its wholly owned domestic subsidiaries other than certain immaterial subsidiaries and other excluded subsidiaries. The obligations under the Revolving Credit Facility are secured by a first priority security interest in substantially all of the accounts receivable, inventory, deposit accounts, securities accounts and cash assets of The AZEK Company Inc., CPG International LLC and the subsidiaries of CPG International LLC that are guarantors under the Revolving Credit Facility , and the proceeds thereof (subject to certain exceptions) (the “Revolver Priority Collateral”), plus a second priority security interest in all of the Term Loan Priority Collateral. The Revolving Credit Facility may be voluntarily prepaid in whole, or in part, in each case without premium or penalty. CPG International LLC is also required to make mandatory prepayments (i) when aggregate borrowings exceed commitments or the applicable borrowing base and (ii) during “cash dominion,” which occurs if (a) the availability under the Revolving Credit Facility is less than the greater of (i) $12.5 million and (ii) 10% of the lesser of (x) $150.0 million and (y) the borrowing base, for five consecutive business days or (b) certain events of default have occurred and are continuing. The Revolving Credit Facility contains affirmative covenants that are customary for financings of this type, including allowing the Revolver Administrative Agent to perform periodic field exams and appraisals to evaluate the borrowing base. The Revolving Credit Facility contains various negative covenants, including limitations on, subject to certain exceptions, the incurrence of indebtedness, the incurrence of liens, dispositions, investments, acquisitions, restricted payments, transactions with affiliates, as well as other negative covenants customary for financings of this type. The Revolving Credit Facility also includes a financial maintenance covenant, applicable only when the excess availability is less than the greater of (i) 10% of the lesser of the aggregate commitments under the Revolving Credit Facility and the borrowing base, and (ii) $12.5 million. In such circumstances, CPG International LLC would be required to maintain a minimum fixed charge coverage ratio (as defined in the Revolving Credit Facility) for the trailing four quarters equal to at least 1.0 to 1.0; subject to CPG International LLC’s ability to make an equity cure (no more than twice in any four quarter period and up to five times over the life of the facility). As of June 30, 2020, CPG International LLC was in compliance with the financial and nonfinancial covenants imposed by the Revolving Credit Facility. The Revolving Credit Facility also includes customary events of default, including the occurrence of a change of control. 2021 The 2021 had a maturity of 2021 bore 360-day 30-day 20 21 were 2021 declined 2021 2021 were redeemable 2016 106.0 % 2017 104.0 % 2018 102.0 % 2019 and thereafter 100.0 % The indenture relating to the 2021 Senior Notes contained negative covenants that are customary for financings of this type. The indenture did not contain any financial maintenance covenants. As of September 30, 2019, CPG International LLC was in compliance with the negative covenants imposed by the 2021 Senior Notes and the indenture. In connection with the 2025 Senior Notes offering , the Company issued a redemption notice on May 7, 2020 for the full $315.0 million of outstanding 2021 Senior Notes, which were redeemed on June 8, 2020. The Company also paid $4.6 million in accrued interest and recognized a $1.9 million loss on the extinguishment in the “ Loss on the extinguishment of debt” within the Condensed Consolidated Statements of Comprehensive Income (Loss). As of September 30, 2019, the unamortized deferred financing fees related to the 2021 2025 Senior Notes On May 12, 2020, the Company issued $350.0 million of 9.500% 2025 Senior Notes with a maturity of May 15, 2025, and interest was payable on May 15 and November 15 of each year. The Company had the option to redeem all or a portion of the 2025 Senior Notes at any time on or after May 15, 2022 at certain redemption prices, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. In addition, before May 15, 2022, the Company had the option to (i) redeem up to 40% of the aggregate principal amount of the 2025 Senior Notes with the net cash proceeds of certain equity offerings at a redemption price equal to 107.125% of the principal amount of the 2025 Senior Notes redeemed, (ii) redeem (x) up to 40% of the aggregate principal amount of the 2025 Senior Notes or (y) all of the 2025 Senior Notes with the proceeds from a Qualified IPO at a redemption price equal to 107.125% of the principal amount of the 2025 Senior Notes redeemed or (iii) redeem some or all of the 2025 Senior Notes at a price equal to 100% of the principal amount plus a “make-whole” premium, in the case of each of (i), (ii) and (iii), plus accrued and unpaid interest, if any, to, but excluding, the redemption date. The 2025 Senior Notes were redeemable in whole or in part, at any time after May 15, 2022 at the following redemption prices, plus accrued and unpaid interest, if redeemed during the 12-month 2022 104.750 % 2023 102.375 % 2024 and thereafter 100.000 % On June 8, 2020, the Company used the proceeds of the $350.0 million 2025 Senior Notes offering to redeem the 2021 Senior Notes in full and to repay $15.0 million of the outstanding principal amount under the Revolving Credit Facility, and other general corporate purposes. On June 16, 2020, the Company used part of its net proceeds from the IPO to redeem $350.0 million in aggregate principal of the outstanding 2025 Senior Notes, paid $3.9 million in accrued interest and recognized a $35.6 million loss on the extinguishment in the “Loss on extinguishment of debt” within the Condensed Consolidated Statements of Comprehensive Income (Loss). Interest expense consisted of the following (in thousands): For the Three For the Nine 2020 2019 2020 2019 Interest expense Term Loan $ 11,228 $ 13,596 $ 35,584 $ 40,197 2021 Senior Notes 4,550 6,300 17,150 18,900 2025 Senior Notes 3,879 — 3,879 — Revolving Credit Facility 846 274 1,434 751 Other 380 386 1,155 1,077 Amortization Debt issue costs Term Loan 3,630 495 4,620 1,485 2021 Senior Notes 176 352 880 1,056 2025 Senior Notes 180 — 180 — Revolving Credit Facility 107 89 287 268 Original issue discounts 442 60 562 181 Capitalized interest (270 ) (112 ) (849 ) (702 ) Interest expense $ 25,148 $ 21,440 $ 64,882 $ 63,213 See Note 10 for the fair value of the Company’s debt as of June 30, 2020 and September 30, 2019. |
Product Warranties
Product Warranties | 9 Months Ended |
Jun. 30, 2020 | |
Product Warranties Disclosures [Abstract] | |
Product Warranties | 9. PRODUCT WARRANTIES The Company provides product assurance warranties of various lengths ranging from 5 years to lifetime for limited coverage for a variety of material and workmanship defects based on standard terms and conditions between the Company and its customers. Warranty coverage depends on the product involved. The warranty reserve activity consisted of the following (in thousands): Three Months Ended Nine Months Ended 2020 2019 2020 2019 Beginning balance $ 11,984 $ 9,824 $ 11,133 $ 9,304 Ad j ust m ents to res e 35 1,053 2,226 2,403 Warranty claims payment (770 ) (830 ) (2,247 ) (1,797 ) Accretion – purchase accounting valuation 28 41 165 178 Ending balance 11,277 10,088 11,277 10,088 Current portion of accrued warranty (3,375 ) (1,873 ) (3,375 ) (1,873 ) Accrued warranty – less current portion $ 7,902 $ 8,215 $ 7,902 $ 8,215 TimberTech Warranties and Related Indemnification In connection with the acquisition of TimberTech on September 21, 2012 and the acquisition of CPG International LLC on September 30, 2013, the Company recognized the fair value of the related warranty liabilities calculated as the net present value of the expected costs to settle all future warranty claims for products sold prior to the acquisition dates. The Company records accretion expense in “Cost of sales” in the Condensed Consolidated Statement of Comprehensive Income (Loss) in order to increase the value of the liability to reflect the future value of the warranty claims when they are actually settled. In addition, the Company records estimated warranty claims obligations related to current sales on an ongoing basis for the TimberTech product line. Pursuant to the TimberTech purchase agreement, the seller, Crane Group Companies Limited (“Crane”), also agreed to indemnify the Company for claims made up to seven years after the acquisition date for the majority of the costs to settle warranty claims for certain identified problems related to two products which have exhibited a high number of claims related to scorching and fading defects. The products were produced between 2010 and 2011 and have not been sold by the Company since 2011. Similar to its recognition of the warranty liability, the Company recorded an indemnification receivable from Crane on the acquisition date equal to the fair value of the indemnification calculated as the net present value of the expected indemnification payments to be received in the future. At June 30, 2020, $1.9 million was classified as Other Current Assets. As of September 30, 2019, $1.3 million was classified as Other Current Assets and $0.5 million was classified as Other Assets (non-current). The Company will continue to monitor the actual cost to settle warranty claims in the future and will make adjustments to the warranty liability and indemnification receivable if needed. The indemnification period expired on September 21, 2019. Crane disputes the scope of its past indemnification obligations and the Company cannot predict the outcome of the dispute. The Company may need to record additional charges to the Condensed Consolidated Statements of Comprehensive Income (Loss) and the Condensed Consolidated Balance Sheets related to the reserve and any obligations as a result of the indemnification dispute in future periods. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair value of financial instruments | 10. FAIR VALUE OF FINANCIAL INSTRUMENTS The Company measures and records in its consolidated financial statements certain assets and liabilities at fair value. ASC Topic 820, Fair Value Measurement and Disclosures • Level 1 – Assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market. • Level 2 – Assets and liabilities whose values are based on inputs other than those included in Level 1, including quoted market prices in markets that are not active; quoted prices of assets or liabilities with similar attributes in active markets; or valuation models whose inputs are observable or unobservable but corroborated by market data. • Level 3 – Assets and liabilities whose values are based on valuation models or pricing techniques that utilize unobservable inputs that are significant to the overall fair value measurement. Certain assets are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis, but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). Financial instruments with a fair value that approximates carrying value— Financial instruments with a fair value different from carrying value— June 30, 2020 September 30 2019 Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value Term Loan Agreement due May 5, 2024 $ 467,112 $ 461,273 $ 808,507 $ 804,464 2021 — — 315,000 315,000 Revolving Credit Facility, expires March 9, 2022 44,000 44,000 — — The fair values of the debt instruments were determined using trading prices between qualified institutional buyers; therefore, the 2021 Senior Notes are classified as Level 2. In connection with the acquisition of WES, LLC and Ultralox Technology, LLC (together, “Ultralox”) on December 20, 2017, the Company provided a contingent payment to the employees of Ultralox. non-employee The contingent payment made was based on achievement of a minimum EBITDA amount and a multiple of EBITDA, for EBITDA exceeding a higher threshold for calendar 2018. The Company classified the contingent liability as Level 3, due to the lack of observable inputs. Significant assumptions made by the Company included a central estimate of EBITDA and EBITDA volatility of 39%. Changes in assumptions could have an impact on the payout of the contingent consideration payout amount. During the nine months ended June 30, 2019, the Company amended the earnout agreement to include two additional payments totaling $3.4 million to the former owners of Ultralox that are contingent upon the employee owners continued employment through December 31, 2018 and 2019. These additional earnout payments will be recognized as compensation expense over the required employment periods, because they are contingent upon future service from the date of the amendment. During the nine months ended June 30, 2020, the Company paid the remaining $1.7 million as settlement of the amended earnout agreement. At June 30, 2020 and September 30, 2019, the contingent payment liability was $ million The following table provides a roll-forward of the aggregate fair value of the contingent consideration and compensation expense categorized as Level 3 (in thousands) . Three Months Ended June 30, Nine Months Ended June 30, 2020 2019 2020 2019 Beginning balance $ — $ 558 $ 1,303 $ 1,900 Change in fair value of contingent consideration — — — 53 Less: contingent payments — — (1,675 ) (3,675 ) Contingent payment recognized as compensation expense — 373 372 2,653 Ending balance $ — $ 931 $ — $ 931 For the nine months ended June 30, 2020 and 2019, the estimated contingent payment recognized as compensation expense was $0.0 million and $0.9 million, respectively, and was included in Non-cash |
Segments
Segments | 9 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Segments | 11. SEGMENTS Operating segments for the Company are determined based on information used by the chief operating decision maker (“CODM”) in deciding how to evaluate performance and allocate resources to each of the segments. The CODM reviews Adjusted EBITDA and Adjusted EBITDA Margin as the key segment measures of performance. Adjusted EBITDA is defined as segment operating income (loss) plus depreciation and amortization, adjusted by adding thereto or subtracting therefrom stock-based compensation costs, business transformation costs, acquisition costs, capital structure transaction costs, and certain other costs. Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by net sales. The Company has two reportable segments, Residential and Commercial. The reportable segments were determined primarily based on products and end markets as follows: • Residential—The Residential segment manufactures and distributes decking, rail, trim and accessories through a national network of dealers and distributors and multiple home improvement retailers providing extensive geographic coverage and enabling the Company to effectively serve contractors. The additions of Ultralox and Versatex are complementary to the Residential segment railing and trim businesses, respectively. The recent addition of Return Polymers provides a full-service recycled PVC material processing, sourcing, logistical support, and scrap management programs. This segment is impacted by trends in and the strength of home repair and remodel activity. • Commercial—The Commercial segment manufactures, fabricates and distributes resin based extruded sheeting products for a variety of commercial and industrial applications through a widespread distribution network as well as directly to original equipment manufacturers. This segment includes Scranton Products which manufactures lockers and partitions and Vycom which manufactures resin based sheeting products. This segment is impacted by trends in and the strength of the new construction sector. The segment data below includes data for Residential and Commercial for the three and nine months ended June 30, 2020 and 2019 (in t h Three Months Ended June 30, Nine Months Ended June 30, 2020 2019 2020 2019 Net sales to customers Residential $ 192,599 $ 182,553 $ 538,514 $ 476,441 Commercial 31,112 38,754 96,825 102,228 Total $ 223,711 $ 221,307 $ 635,339 $ 578,669 Adjusted EBITDA Residential $ 62,326 $ 54,090 $ 164,047 $ 134,818 Commercial 5,024 6,893 11,179 14,376 Total Adjusted EBITDA for reporting segments $ 67,350 $ 60,983 $ 175,226 $ 149,194 Unallocated net expenses (9,530 ) (8,212 ) (27,782 ) (22,128 ) Adjustments to Income (loss) before income tax provision Depreciation and amortization (26,597 ) (23,243 ) (75,225 ) (69,634 ) Stock-based compensation costs (18,788 ) (737 ) (20,169 ) (2,600 ) Business transformation costs (1) (109 ) (2,831 ) (435 ) (12,608 ) Acquisition costs (2) (182 ) (521 ) (1,538 ) (3,656 ) Initial public offering costs (1,623 ) (1,997 ) (6,716 ) (6,155 ) Other costs (3) (2,551 ) (250 ) (3,015 ) 6,693 Capital structure transaction costs (4) (37,538 ) — (37,538 ) — Interest expense (25,148 ) (21,440 ) (64,882 ) (63,213 ) Income (loss) before income tax provision $ (54,716 ) $ 1,752 $ (62,074 ) $ (24,107 ) (1) Business transformation costs reflect consulting and other costs related to repositioning of brands of $0.0 million and $0.7 for the three months ended June 30, 2020 and 2019, respectively, and $0.0 million and $3.9 million for the nine months ended June 30, 2020 and 2019, respectively, compensation costs related to the transformation of the senior management team of $0.1 million and $0.2 million for the three months ended June 30, 2020 and 2019, respectively, and $0.4 million and $1.9 million for the nine months ended June 30, 2020 and 2019, respectively, costs related to the relocation of the Company’s corporate headquarters of $0.0 million and $1.8 million for the nine months ended June 30, 2020 and 2019, respectively, startup costs of the Company’s new recycling facility of $0.0 million and $1.4 million for the three months ended June 30, 2020 and 2019, respectively and $0.0 million and $2.9 million for the nine months ended June 30, 2020 and 2019, respectively, and other integration-related costs of $0.0 million and $0.5 million for the three months ended June 30, 2020 and 2019, respectively, and $0.0 million and $2.1 million for the nine months ended June 30, 2020 and 2019, respectively. (2) Acquisition costs reflect costs directly related to completed acquisitions $0.1 million and $0.5 million for the three months ended June 30, 2020 and 2019 , respectively , , respectively , step-up (3) Other costs include costs for legal expenses of $0.4 million and $0.2 million for the three months ended June 30, 2020 and 2019, respectively, and $0.4 million and $0.8 million for the nine months ended June 30, 2020 and 2019, respectively, reduction in workforce costs of $0.4 million for the three and nine months ended June 30, 2020, income from an insurance recovery of legal loss of $0.0 million and $7.7 million for the nine months ended June 30, 2020 and 2019, respectively, and costs related to an incentive plan associated with the (4) Capital structure transaction costs include loss on extinguishment of debt of $1.9 million for the 2021 Senior Notes and $35.6 million for the 2025 Senior Notes for the three and nine months ended June 30, 2020. |
Capital Stock
Capital Stock | 9 Months Ended |
Jun. 30, 2020 | |
Stockholders' Equity Note [Abstract] | |
Capital Stock | 12. CAPITAL STOCK The Company completed its IPO on June 16 shares of its Class A common stock, including 4,987,500 shares pursuant to the underwriters’ over-allotment option. The shares were sold at an IPO price of $23.00 per share for net proceeds to the Company of approximately $819.4 million, after deducting underwriting discounts and commissions of $50.6 million and estimated offering expenses of approximately $9.5 million payable by the Company. Immediately prior to the completion of the IPO, the Company converted to a Delaware corporation, from a limited liability company. The Company’s certificate of incorporation provides for two classes of common stock: Class A common stock and Class B common stock. In addition, the certificate of incorporation authorizes shares of undesignated preferred stock, the rights, preferences and privileges of which may be designated from time to time by the board of directors. The Company is authorized to issue up to 1.1 billion shares of Class A common stock, up to 1 hundred million shares of Class B common stock and up to 1 million shares of preferred stock, each par value $0.001 per share, in one or more series. The Class A common stock and Class B common stock provide identical economic rights, but holders of Class B common stock have limited voting rights, specifically that such holders have no right to vote, solely with respect to their shares of Class B common stock, with respect to the election, replacement or removal of directors. Holders of Class A common stock and Class B common stock are not entitled to preemptive rights. Holders of Class B common stock may convert their shares of Class B common stock into shares of Class A common stock on a one-for-one In conjunction with the Corporate Conversion and prior to the closing of the IPO, the Company effected a unit split of its then-outstanding unit, resulting in an aggregate of units, including Class A units and Class B units. Concurrently with the Corporate Conversion, the units were converted to an aggregate of 108,162,741 shares of common stock, including 75,093,778 shares of Class A common stock and 33,068,963 shares of Class B common stock. In addition, a class of the Company’s former indirect parent’s partnership interests referred to as “Profits Interests” were exchanged for an aggregate of shares of Class A common stock and shares of Class A restricted stock, and shares of Class A common stock reserved for issuance upon the exercise of stock options. At June 30, 2020, the following amounts were issued and outstanding : 121,566,577 shares of Class A Common Stock and 33,068,963 shares of Class B Common Stock. The Company has issued any shares of preferred stock. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | 13. STOCK-BASED COMPENSATION The Company grants stock-based awards to attract, retain and motivate key employees and directors. Prior to the completion of the IPO, Profits Interests were issued through an LP Interest Agreement. The Profits Interests were, as part of the Corporate Conversion, converted into shares of common stock, restricted stock and stock options. The 2020 Omnibus Incentive Compensation Plan (“2020 Plan”), became effective as of June 11, 2020, the day of effectiveness of the registration statement filed in connection with the IPO. The 2020 Plan provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalent rights, and performance-based or other equity-related awards to the Company’s employees and directors. The maximum aggregate number of shares that may be issued under the 2020 Plan is 15,555,403 shares with 4,981,836 shares remaining in the reserve. The total aggregate number of shares may be adjusted as determined by the Board of Directors. As part of the Corporate Conversion, the Company modified its terms and conditions of the performance-based awards by changing the vesting conditions. The change was treated as a modification under ASC 718, Stock Compensation, $8.6 million in incremental compensation cost in “Selling, general and administrative expenses” in the Condensed Consolidated Statements of Comprehensive Income (Loss), for the three months ended June 30, 2020. Stock-based compensation expense for the three months ended June 30, 2020 and 2019 was $18.8 million and $0.7 million, respectively, and for the nine months ended June 30, 2020 and 2019 was $20.2 million and $2.6, respectively, recognized in “Selling, general and administrative expenses” in the Condensed Consolidated Statements of Comprehensive Income (Loss). Total income tax benefit for the three months ended June 30, 2020 and 2019 was $1.6 million and $0.0 million, respectively, and for the nine months ended June 30, 2020 and 2019 was $1.6 million and $0.0 million, respectively. As of June 30, 2020, the Company had not yet recognized compensation cost on u The Company’s grant of 199,453 in restricted stock units to certain employees through the 2020 Plan, vest over one to four years at June 30, 2020. The Company uses the Monte Carlo pricing model to estimate the fair value of its performance-based awards as of the grant date, and uses the Black Scholes pricing model to estimate the fair value of its service-based awards as of the grant date. Under the terms of the 2020 Plan, all stock options will expire if not exercised within ten years of the grant date. The following table sets forth the significant assumptions used for the performance-based awards granted during the three months ended June 30, 2020: June 12, 2020 Grant Date Risk-free interest rate 0.75 % Expected volatility 40.00 % Expected term (in years) 0.50 Expected dividend yield 0.00 % The following table sets forth the significant assumptions used for the service-based awards granted during the three months ended June 30, 2020: June 12, 2020 Grant Date Risk-free interest rate 0.47% - 0.56 % Expected volatility 35.00 % Expected term (in years) 6.25 - 7.00 Expected dividend yield 0.00 % Stock Options The following table summarize s Weighted Average Weighted Average Exercise Price Per Remaining Contract Weighted Average Number of Shares Share Term Intrinsic Value (in years) (in thousands) Outstanding at October 1, 2019 — $ — — $ — Granted 1,706,098 23.00 10 14,372 Exercised — — — — Cancelled/Forfeited — — — — Expired — — — — Outstanding at June 30, 2020 1,706,098 23.00 10 14,372 Vested and exercisable at June 30, 2020 — — — — The following table summarize s Weighted Average Weighted Average Exercise Price Per Remaining Contract Weighted Average Number of Shares Share Term Intrinsic Value (in years) (in thousands) Outstanding at October 1, 2019 — $ — — $ — Granted 3,388,557 23.00 10 39,510 Exercised — — — — Cancelled/Forfeited — — — — Expired — — — — Outstanding at June 30, 2020 3,388,557 23.00 10 39,510 Vested and exercisable at June 30, 2020 928,648 23.00 10 7,294 The service-based stock options are subject to a 180-day Restricted Stock Awards A summary of the performance-based restricted stock awards activity during the three months ended June 30, 2020 was as follows: Weighted Average Number of Shares Grant Date Fair Value (in thousands) Outstanding and unvested at October 1, 2019 — $ — Granted 3,884,615 89,032 Vested — — Forfeited — — Outstanding and unvested at June 30, 2020 3,884,615 89,032 A summary of the service-based restricted stock awards activity during the three months ended June 30, 2020 was a Weighted Average Number of Shares Grant Date Fair Value (in thousands) Outstanding and unvested at October 1, 2019 — $ — Granted 1,647,428 5,571 Vested 53,132 147 Forfeited — — Outstanding and unvested at June 30, 2020 1,594,296 5,424 |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 14. EARNINGS PER SHARE The Company computes earnings per common share (“EPS”) under the two-class Basic EPS attributable to common stockholders is calculated by dividing net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding. Diluted EPS is calculated by adjusting weighted average shares outstanding for the dilutive effect of potential common shares, determined using the treasury-stock method. For purposes of the diluted EPS calculation, restricted stock awards, restricted stock units and options to purchase shares of common stock are considered to be potential common shares. The following table sets forth the computation of the Company’s basic and diluted EPS attributable to common stockholders (in thousands, except share and per share amount s Three Months Ended June 30, Nine Months Ended June 30, 2020 2019 2020 2019 Numerator: Net income (loss) $ (52,116 ) $ 1,511 $ (57,874 ) $ (19,276 ) Net income (loss) attributable to common stockholders - basic and diluted (52,116 ) 1,511 (57,874 ) (19,276 ) Denominator: Weighted-average shares of common stock - basic and diluted 118,738,357 108,162,741 113,525,537 108,162,741 Net income (loss) per share attributable to common stockholders: (52,116 ) 1,511 (57,874 ) (19,276 ) Net income (loss) attributable to common stockholders - basic and diluted $ (0.44 ) $ 0.01 $ (0.51 ) $ (0.18 ) The following table includes the number of shares that may be dilutive common shares in the future, and were not included in the computation of diluted net income (loss) per share because the effect was anti-dilutive: Three Months Ended June 30, Nine Months Ended June 30, 2020 2019 2020 2019 Restricted Stock Awards 1,143,949 — 381,316 — Stock Options 992,632 — 330,877 — Restricted Stock Units 32,877 — 10,959 — |
Income Taxes
Income Taxes | 9 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 15. INCOME TAXES The Company calculates the interim tax provision in accordance with the provisions of ASC 740-270, Income Taxes; Interim Reporting ASC-740-270-25-2. ye ar were respectively. For the three and nine months ended June 30, 2020, the Company’s effective tax rate was impacted by nondeductible stock-based compensation related to the IPO conversion, as well as limitations on the deductibility of officer’s compensation as a public company. The Company adopted ASU No. 2016-16 , Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory . |
Commitments And Contingencies
Commitments And Contingencies | 9 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments And Contingencies | 16. COMMITMENTS AND CONTINGENCIES Lease Commitments The Company leases vehicles, machinery and a manufacturing facility under various capital leases. The Company also leases office equipment, vehicles and manufacturing and office facilities under various operating leases. In 2018, the Company entered into a lease agreement for its corporate headquarters in Chicago, IL. The Company was responsible for costs to build out the office space and spent approximately $3.4 million in improvements to meet the Company’s needs. Based on the lease agreement and the changes made to the office space the Company concluded that it was the “deemed owner” of the building (for accounting purposes only) during the construction period. The Company recorded the build out costs as an asset with a corresponding build-to-suit 840-40, Leases—Sale-Leaseback Transactions. Future minimum annual payments under noncancelable leases with initial or remaining noncancelable lease terms in excess of one year as of June 30, 2020 were as follows (in thousands): Capital Financing Operating Remaining period of 2020 $ 405 $ 192 $ 446 2021 1,595 778 1,679 2022 1,439 788 1,303 2023 1,026 808 1,075 2024 648 827 709 Thereafter 2,789 4,607 307 Total Payments $ 7,902 $ 8,000 $ 5,519 Less amount representing interest (4,006 ) Present value of minimum capital lease payments $ 3,896 Total rent expense was approximately $0.4 million and $0.5 million for the three months ended June 30, 2020 and 2019, respectively, and $1.1 million and $1.4 million in the nine months ended June 30, 2020 and 2019, respectively. The future minimum sublease income under a noncancelable sublease was $0.9 million at June 30, 2020. Legal Proceedings In the normal course of the Company’s business, it is at times subject to pending and threatened legal actions, in some cases for which the relief or damages sought may be substantial. Although the Company is not able to predict the outcome of such actions, after reviewing all pending and threatened actions with counsel and based on information currently available, management believes that the outcome of such actions, individually or in the aggregate, will not have a material adverse effect on the Company’s results of operations or financial position. However, it is possible that the ultimate resolution of such matters, if unfavorable, may be material to the Company’s results of operations in a particular future period as the time and amount of any resolution of such actions and its relationship to the future results of operations are not currently known. The Company accrues for losses when they are probable of occurrence and such losses are reasonably estimable. Legal costs expected to be incurred are accounted for as they are incurred. Loss Contingencies On June 18, 2018, the Company acquired Versatex. In connection with a contingent liability assumed by the Company in the acquisition, the Company recorded a contingent liability of $5.8 million as a measurement period adjustment to the opening balance sheet related to the assumption of a contingency related to an automobile accident involving a Versatex employee prior to the acquisition. The case was fully settled during the three months ended June 30, 2020 and payment of $5.8 million was made by the Company’s insurer to the claimants. During the year ended September 30, 2019, the Company was made aware of a worker’s compensation case that became reasonably possible to give rise to a liability. The case is in discovery as the nature and extent of the Company’s exposure is currently being determined. The Company expects a range of loss of $0.4 million to $0.5 million. As of June 30, 2020, there are various other worker’s compensation and personal injury claims that have been made against the Company. All such claims are being contested and the Company does not believe a loss is probable; therefore, no reserve has been recorded related to these matters. In addition, the Company carries insurance for these types of matters and is expecting to recover thereon. The Company is a party to various legal proceedings and claims, which arise in the ordinary course of business. As of June 30, 2020, the Company determined that there was not at least a reasonable possibility that it had incurred a material loss, or a material loss in excess of a recorded accrual, with respect to such proceedings. Gain Contingency During the quarter ended March 31, 2018, the Company paid a litigation settlement of $7.5 million. The Company had previously recorded a reserve in the same amount during the quarter ended March 31, 2017. The Company maintains specialty insurance policies. The Company filed claims under its insurance policies to recover the loss and legal defense costs. During the nine months ended June 30, 2019, the Company received $7.7 million as settlement of its claims under the specialty insurance policies. The settlement of $7.7 million is included in operating income for the nine months ended June 30, 2019. |
Condensed Financial Information
Condensed Financial Information of Registrant (Parent Company Only) | 9 Months Ended |
Jun. 30, 2020 | |
Condensed Financial Information Disclosure [Abstract] | |
Condensed Financial Information of Registrant (Parent Company Only) | 17. CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY ONLY) The AZEK Company Inc. (parent company only) Condensed Balance Sheets (In thousands of dollars, except share and per share amounts) June 30, 2020 September 30, 2019 ASSETS: Non-current Investment in subsidiaries $ 1,269,513 $ 490,023 Total non-current 1,269,513 490,023 Total assets $ 1,269,513 $ 490,023 LIABILITIES AND STOCKHOLDERS’ EQUITY: Total liabilities $ — $ — Stockholders’ equity: Preferred stock, $0.001 par value; 1,000,000 shares authorized and no shares issued and — — Class A common stock, $0.001 par value; 1,100,000,000 shares authorized, 121,566,577 shares issued and outstanding at June 30, 2020 and 75,093,778 shares issued and outstanding at September 30, 2019 122 75 Class B common stock, $0.001 par value; 100,000,000 shares authorized, 33,068,963 shares issued and outstanding at June 30, 2020 and September 30, 2019 , respectively 33 33 Additional paid-in 1,488,474 652,493 Accumulated deficit (219,116 ) (162,578 ) Total stockholders’ equity 1,269,513 490,023 Total liabilities and stockholders’ equity $ 1,269,513 $ 490,023 The AZEK Company Inc. (parent company only) Condensed Statements of Comprehensive Income (Loss) (In thousands of dollars) Three Months Ended June 30, Nine Months Ended June 30, 2020 2019 2020 2019 Net income (loss) of subsidiaries $ (52,116 ) $ 1,511 $ (57,874 ) $ (19,276 ) Net income (loss) of subsidiaries $ (52,116 ) $ 1,511 $ (57,874 ) $ (19,276 ) Comprehensive income (loss) $ (52,116 ) $ 1,511 $ (57,874 ) $ (19,276 ) The AZEK Company Inc. did not have any cash as of June 30, 2020 or Sept e Basis of Presentation The parent company financ i Since the restricted net assets of The AZEK Company Inc. and its subsidiaries exceed 25% of the consolidated net assets of the Company and its subsidiaries, the accompanying condensed parent company financial statements have been prepared in accordance with Rule 12-04, S-X. Dividends from Subsidiaries There were no cash dividends paid to The AZEK Company Inc. from the Company’s consolidated subsidiaries during each of the three and nine months ended June 30, 2020 and 2019. Restricted Payments CPG International LLC is party to the Revolving Credit Facility and the Term Loan Agreement originally executed on September 30, 2013, both of which have been amended and extended from time to time. The obligations under the Revolving Credit Facility and Term Loan Agreement are secured by substantially all of the present and future assets of the borrowers and guarantors, including equity interests of their domestic subsidiaries, subject to certain exceptions. The obligations under the Revolving Credit Facility and Term Loan Agreement are guaranteed by the Company and its wholly owned domestic subsidiaries other than certain immaterial subsidiaries and other excluded subsidiaries. CPG International LLC is not permitted to make certain payments unless those payments are consistent with exceptions outlined in the agreements. These payments include repurchase of equity interests, fees associated with a public offering, income taxes due in |
Subsequent Events
Subsequent Events | 9 Months Ended |
Jun. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | 18. SUBSEQUENT EVENTS The Company has evaluated subsequent events through the date the Consolidated Financial Statements were issued. The Company has determined that there were no subsequent events. |
Organization and Summary of S_2
Organization and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Company operates on a fiscal year ending September 30. The accompanying unaudited Condensed Consolidated Financial Statements and notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and in management’s opinion, includes all adjustments, consisting of only normal recurring adjustments, necessary for the fair statement of the Company’s financial position, its results of operations and cash flows for the interim periods presented. The results of operations for the three and nine months ended June 30, 2020, and the cash flows for the nine months ended June 30, 2020, are not necessarily indicative of the results to be expected for the full fiscal year or any other period. The Company’s financial condition and results of operations are being, and are expected to continue to be affected by the current COVID-19 COVID-19 COVID-19 COVID-19 COVID-19 The accompanying unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto contained in the Company’s final prospectus filed pursuant to Rule 424(b) under the Securities Act of 1933, as amended (the “Securities Act”), with the Securities and Exchange Commission (“SEC”) on June 15, 2020 (the “Prospectus”). The Condensed Consolidated Balance Sheet as of September 30, 2019 was derived from the audited financial statements at that date. There have been no material changes in the Company’s significant accounting policies from those that were disclosed in the Prospectus, except as noted below. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Significant estimates include revenue recognition, reserves for excess inventory, inventory obsolescence, product warranties, customer rebates, stock -based compensation, litigation, income taxes, contingent consideration, goodwill and intangible asset valuation and accounting for long-lived assets. Management’s estimates and assumptions are evaluated on an ongoing basis and are based on historical experience, current conditions and available information. Actual results may differ from estimated amounts. Estimates are revised as additional information becomes available. |
Accounting Policies | Accounting Policies Refer to the Prospectus for a discussion of the Company’s accounting policies, as updated below and for recently adopted accounting standards. |
Stock-Based Compensation | Stock-Based Compensation The Company determines the expense for all employee stock-based compensation awards by estimating their fair value and recognizing such value as an expense, on a straight-line, ratable or cliff basis, depending on the award, in the Consolidated Financial Statements over the requisite service period in which employees earn the awards. The Company estimates the fair value of performance-based awards granted to employees using the Monte Carlo pricing model and for service-based awards granted to employees using the Black Scholes pricing model. The fair value of performance-based awards that are expected to vest is recognized as compensation expense on a straight-line basis over the requisite service period. The fair value of service-based awards that are expected to vest is recognized as compensation expense on either (1) straight-line basis, (2) a ratable vesting basis or (3) a cliff vesting basis. The Company accounts for forfeitures as they occur. To determine the fair value of a stock-based award using the Monte Carlo and Black Scholes models, the Company makes assumptions regarding the risk-free interest rate, expected future volatility, expected dividend yield and performance period. The risk-free rate is based on the U.S. treasury yield curve in effect at the time of grant. The Company estimates the expected volatility of the share price by reviewing the estimated post-IPO volatility levels of its common stock in conjunction with the historical volatility levels of public companies that operate in similar industries or are similar in terms of stage of development or size and then projecting this information toward its future expected volatility. The Company exercises judgment in selecting these companies, as well as in evaluating the available historical and implied volatility for these companies. Dividend yield is determined based on the Company’s future plans to pay dividends. The Company calculates the performance period based on the specific market condition to be achieved and derived from estimates of future performance. The Company calculates the expected term in years for each stock option using a simplified method based on the average of each option’s vesting term and original contractual term. The simplified method is used due to the lack of sufficient historical data available to provide a reasonable Concurrently with the closing of the IPO, the Company granted to certain of its directors, officers and employees restricted stock awards, restricted stock units and stock options, each of which vest upon the satisfaction of a service condition or a performance condition. |
Earnings Per Share | Earnings Per Share Basic net income per common share is computed based on the weighted average number of common shares outstanding. Potentially dilutive shares are included in the diluted per-share |
Research and Development Costs | Research and Development Costs Research and development costs primarily relate to new product development, product claims support and manufacturing process improvements. Such costs are expensed as incurred and are included in “Selling, general and administrative expenses” within the Condensed Consolidated Statements of Comprehensive Income (Loss). Total research and development expenses were approximately $1.7 million and $2.1 million, respectively, for the three months ended June 30, 2020 and 2019, and $5.7 million and $5.9 million, respectively, for the nine months ended June 30, 2020 and 2019. |
Recently Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements Under the Jumpstart Our Business Startups (“JOBS”) Act, the Company qualifies as an emerging growth company (“EGC”) and as such, has elected not to opt out of the extended transition period for complying with new or revised accounting pronouncements. During the extended transition period, the Company is not subject to new or revised accounting standards applicable to public companies. The accounting pronouncements pending adoption below reflect effective dates for the Company as an EGC with the extended transition period. On October 1, 2018, the Company early adopted Accounting Standards Update (“ASU”) ASU No. 2014-09, Revenue from Contracts with Customers , which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The update supersedes most current revenue recognition guidance. Under the new standard, entities are required to identify the contract with a customer; identify the separate performance obligations in the contract; determine the transaction price; allocate the transaction price to the separate performance obligations in the contract; and recognize the appropriate amount of revenue when (or as) the entity satisfies each performance obligation. The adoption of this standard did not have a material impact on the Company’s Consolidated Financial Statements. Refer to Note 2 for additional information. On October 1, 2019, the Company adopted ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfer of Assets Other Than Inventory Recently Issued Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-02, Leases (Topic 842), No. 2017-13, No. 2018-01, 2018-10 2018-11, No. 2018-20, No. 2019-01, No. 2019-10 No. 2020-05. right-of-use In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326) No. 2019-05 2019-10 2019-11. off-balance In August 2018, the FASB issued ASU No. 2018-13, Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, Fair Value Measurement In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use 350-40): internal-use In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740)—Simplifying the Accounting for Income Taxes In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting . |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Rebate Activity | The rebate activity was as follows (in thousands): Three Months Ended June 30, Nine Months Ended June 30, 2020 2019 2020 2019 Beginning balance $ 22,123 $ 31,028 $ 24,858 $ 21,914 Rebate expense 11,545 10,336 44,989 38,335 Rebate payments (7,844 ) (19,578 ) (44,023 ) (38,463 ) Ending balance $ 25,824 $ 21,786 $ 25,824 $ 21,786 |
Business Combinations (Tables)
Business Combinations (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
Return Polymers Inc [Member] | |
Business Acquisition [Line Items] | |
Summary of Preliminary Allocation of Assets Acquired and Liabilities Assumed | The following table represents the preliminary allocation of assets acquired and liabilities assumed on the acquisition date and certain measurement period adjustments attributable to customary working capital adjustments (in thousands): Measurement Acquisition Period Date Adjustments Total Total purchase consideration $ 18,069 $ 384 $ 18,453 Allocation of consideration to assets acquired and liabilities assumed: Cash and cash equivalents $ 204 $ (204 ) $ — Accounts r 1,119 — 1,119 Inventories 2,532 — 2,532 Prepaid expenses and other current assets 39 — 39 Property, plant and equipment 4,080 — 4,080 Intangible assets 5,300 — 5,300 Goodwill 6,304 588 6,892 Accounts payable (947 ) — (947 ) Accrued expenses and other liabilities (562 ) — (562 ) Net assets acquired $ 18,069 $ 384 $ 18,453 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consisted of the following (in thousands): June 30, 2020 September 30, 2019 Raw materials $ 34,353 $ 36,855 Work in process 19,557 19,514 Finished goods 76,716 59,022 Total inventories $ 130,626 $ 115,391 |
Property, Plant and Equipment_2
Property, Plant and Equipment - Net (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property, Plant and Equipment - Net | Property, plant and equipment – net consisted of the following (in thousands): June 30, 2020 September 30, 2019 Land and improvements $ 2,758 $ 2,758 Buildings and improvements 70,042 67,770 Capital lease - 2,021 2,021 Capital lease - 1,026 1,026 Capital lease - 3,685 3,835 Manufacturing equipment 292,176 254,570 Computer equipment 24,742 22,733 Furniture and fixtures 5,855 5,409 Vehicles 410 339 Total property, plant and equipment 402,715 360,461 Construction in progress 32,640 16,453 435,355 376,914 Accumulated depreciation (200,126 ) (168,220 ) Total property, plant and equipment - $ 235,229 $ 208,694 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Net (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Finite-lived Intangible Assets | Finite-lived intangible assets consisted of the following (in thousands): As of June 30, 2020 Lives in Gross Carrying Accumulated Net Carrying Proprietary knowledge 10 - 15 $ 289,300 $ (189,474 ) $ 99,826 Trademarks 5 - 20 223,840 (120,454 ) 103,386 Customer relationships 15 - 19 146,870 (48,917 ) 97,953 Patents 10 7,000 (2,927 ) 4,073 Other intangibles 3 - 15 4,076 (3,219 ) 857 $ 671,086 $ (364,991 ) $ 306,095 As of September 30, 2019 Lives in Gross Carrying Accumulated Net Carrying Proprietary knowledge 10 - 15 $ 289,300 $ (171,686 ) $ 117,614 Trademarks 5 - 20 223,140 (108,096 ) 115,044 Customer relationships 15 - 19 142,270 (39,084 ) 103,186 Patents 10 7,000 (2,132 ) 4,868 Other intangibles 3 - 15 4,076 (2,370 ) 1,706 $ 665,786 $ (323,368 ) $ 342,418 |
Summary of Expected Amortization Expense Relating to Intangible Assets | Amortization expense relating to these amortizable intangible assets as of June 30, 2020, is expected to be as follows (in thousands): Remaining period of 2020 $ 13,538 2021 49,826 2022 44,369 2023 39,240 2024 34,246 Thereafter 124,876 Total $ 306,095 |
Composition of Certain Balanc_2
Composition of Certain Balance Sheet Accounts (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
Composition of Certain Balance Sheet Accounts Disclosure [Abstract] | |
Summary of Allowance for Doubtful Accounts | Allowance for Doubtful Accounts Allowance for doubtful accounts consisted of the following (in thousands): Three Months Ended June 30, Nine Months Ended June 30, 2020 2019 2020 2019 Beginning balance $ 1,678 $ 1,441 $ 904 $ 1,230 Provision (229 ) 67 522 284 Acquis i n — — 35 — Bad debt write - s (107 ) (703 ) (119 ) (709 ) Ending balance $ 1,342 $ 805 $ 1,342 $ 805 |
Schedule of Accrued Expenses and Other Liabilities | Accrued expenses consisted of the following (in thousands): June 30, 2020 September 30, 2019 Employee related liabilities $ 23,605 $ 17,202 Professional fees 5,863 14,160 Freight 4,191 4,158 Warranty 3,375 2,543 Marketing 2,794 2,026 Construction in progress 1,547 903 Capital lease 922 721 Contingent consideration — 1,303 Other 4,925 4,887 Total accrued expenses and other current liabilities $ 47,222 $ 47,903 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
Debt Instrument [Line Items] | |
Summary of Long-term Debt | Debt consisted of the following (in thousands): June 30, 2020 September 30, 2019 Term Loan Agreement due May 5, 2024 — LIBOR + 3.75% (4.75% and 5.93% at June 30, 2020 and September 30, 2019 , respectively $ 467,112 $ 808,507 Revolving Credit Facility through March 9, 2022 — LIBOR + 1.75% (2.75% and 0.00% at June 30, 2020 and September 30, 2019 , respectivel y 44,000 — 2021 — 315,000 Total 511,112 1,123,507 Less: unamortized deferred financing fees (4,456 ) (11,890 ) Less: current portion — (8,304 ) Long-term debt—less current portion and unamortized deferred financing fees $ 506,656 $ 1,103,313 |
Summary of Maturities of Long Term Debt | As of June 30, 2020, the Company has scheduled fiscal year debt payments on the Term Loan Agreement and Revolving Credit Facility as follows (in thousands): Remaining period of 2020 $ — 2021 — 2022 44,000 2023 — 2024 467,654 Thereafter — Total $ 511,654 |
Summary of Interest Expense | Interest expense consisted of the following (in thousands): For the Three For the Nine 2020 2019 2020 2019 Interest expense Term Loan $ 11,228 $ 13,596 $ 35,584 $ 40,197 2021 Senior Notes 4,550 6,300 17,150 18,900 2025 Senior Notes 3,879 — 3,879 — Revolving Credit Facility 846 274 1,434 751 Other 380 386 1,155 1,077 Amortization Debt issue costs Term Loan 3,630 495 4,620 1,485 2021 Senior Notes 176 352 880 1,056 2025 Senior Notes 180 — 180 — Revolving Credit Facility 107 89 287 268 Original issue discounts 442 60 562 181 Capitalized interest (270 ) (112 ) (849 ) (702 ) Interest expense $ 25,148 $ 21,440 $ 64,882 $ 63,213 |
2021 Senior Notes [Member] | |
Debt Instrument [Line Items] | |
Summary of Debt Instrument Redemption | The 2021 were redeemable 2016 106.0 % 2017 104.0 % 2018 102.0 % 2019 and thereafter 100.0 % |
2025 Senior Notes [Member] | |
Debt Instrument [Line Items] | |
Summary of Debt Instrument Redemption | The 2025 Senior Notes were redeemable in whole or in part, at any time after May 15, 2022 at the following redemption prices, plus accrued and unpaid interest, if redeemed during the 12-month 2022 104.750 % 2023 102.375 % 2024 and thereafter 100.000 % |
Product Warranties (Tables)
Product Warranties (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
Product Warranties Disclosures [Abstract] | |
Summary of Warranty Reserve Activity | The warranty reserve activity consisted of the following (in thousands): Three Months Ended Nine Months Ended 2020 2019 2020 2019 Beginning balance $ 11,984 $ 9,824 $ 11,133 $ 9,304 Ad j ust m ents to res e 35 1,053 2,226 2,403 Warranty claims payment (770 ) (830 ) (2,247 ) (1,797 ) Accretion – purchase accounting valuation 28 41 165 178 Ending balance 11,277 10,088 11,277 10,088 Current portion of accrued warranty (3,375 ) (1,873 ) (3,375 ) (1,873 ) Accrued warranty – less current portion $ 7,902 $ 8,215 $ 7,902 $ 8,215 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Summary of Carrying Values and the Estimated Fair Values of the Debt Financial Instruments | The carrying values and the estimated fair values of the debt financial instruments (Level 2 measurements) consisted of the following (in thousands): June 30, 2020 September 30 2019 Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value Term Loan Agreement due May 5, 2024 $ 467,112 $ 461,273 $ 808,507 $ 804,464 2021 — — 315,000 315,000 Revolving Credit Facility, expires March 9, 2022 44,000 44,000 — — |
Summary of Aggregate Fair Value of the Contingent Consideration and Compensation Expense | The following table provides a roll-forward of the aggregate fair value of the contingent consideration and compensation expense categorized as Level 3 (in thousands) . Three Months Ended June 30, Nine Months Ended June 30, 2020 2019 2020 2019 Beginning balance $ — $ 558 $ 1,303 $ 1,900 Change in fair value of contingent consideration — — — 53 Less: contingent payments — — (1,675 ) (3,675 ) Contingent payment recognized as compensation expense — 373 372 2,653 Ending balance $ — $ 931 $ — $ 931 |
Segments (Tables)
Segments (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Summary of Residential and Commercial Segment Reporting Information | The segment data below includes data for Residential and Commercial for the three and nine months ended June 30, 2020 and 2019 (in t h Three Months Ended June 30, Nine Months Ended June 30, 2020 2019 2020 2019 Net sales to customers Residential $ 192,599 $ 182,553 $ 538,514 $ 476,441 Commercial 31,112 38,754 96,825 102,228 Total $ 223,711 $ 221,307 $ 635,339 $ 578,669 Adjusted EBITDA Residential $ 62,326 $ 54,090 $ 164,047 $ 134,818 Commercial 5,024 6,893 11,179 14,376 Total Adjusted EBITDA for reporting segments $ 67,350 $ 60,983 $ 175,226 $ 149,194 Unallocated net expenses (9,530 ) (8,212 ) (27,782 ) (22,128 ) Adjustments to Income (loss) before income tax provision Depreciation and amortization (26,597 ) (23,243 ) (75,225 ) (69,634 ) Stock-based compensation costs (18,788 ) (737 ) (20,169 ) (2,600 ) Business transformation costs (1) (109 ) (2,831 ) (435 ) (12,608 ) Acquisition costs (2) (182 ) (521 ) (1,538 ) (3,656 ) Initial public offering costs (1,623 ) (1,997 ) (6,716 ) (6,155 ) Other costs (3) (2,551 ) (250 ) (3,015 ) 6,693 Capital structure transaction costs (4) (37,538 ) — (37,538 ) — Interest expense (25,148 ) (21,440 ) (64,882 ) (63,213 ) Income (loss) before income tax provision $ (54,716 ) $ 1,752 $ (62,074 ) $ (24,107 ) (1) Business transformation costs reflect consulting and other costs related to repositioning of brands of $0.0 million and $0.7 for the three months ended June 30, 2020 and 2019, respectively, and $0.0 million and $3.9 million for the nine months ended June 30, 2020 and 2019, respectively, compensation costs related to the transformation of the senior management team of $0.1 million and $0.2 million for the three months ended June 30, 2020 and 2019, respectively, and $0.4 million and $1.9 million for the nine months ended June 30, 2020 and 2019, respectively, costs related to the relocation of the Company’s corporate headquarters of $0.0 million and $1.8 million for the nine months ended June 30, 2020 and 2019, respectively, startup costs of the Company’s new recycling facility of $0.0 million and $1.4 million for the three months ended June 30, 2020 and 2019, respectively and $0.0 million and $2.9 million for the nine months ended June 30, 2020 and 2019, respectively, and other integration-related costs of $0.0 million and $0.5 million for the three months ended June 30, 2020 and 2019, respectively, and $0.0 million and $2.1 million for the nine months ended June 30, 2020 and 2019, respectively. (2) Acquisition costs reflect costs directly related to completed acquisitions $0.1 million and $0.5 million for the three months ended June 30, 2020 and 2019 , respectively , , respectively , step-up (3) Other costs include costs for legal expenses of $0.4 million and $0.2 million for the three months ended June 30, 2020 and 2019, respectively, and $0.4 million and $0.8 million for the nine months ended June 30, 2020 and 2019, respectively, reduction in workforce costs of $0.4 million for the three and nine months ended June 30, 2020, income from an insurance recovery of legal loss of $0.0 million and $7.7 million for the nine months ended June 30, 2020 and 2019, respectively, and costs related to an incentive plan associated with the (4) Capital structure transaction costs include loss on extinguishment of debt of $1.9 million for the 2021 Senior Notes and $35.6 million for the 2025 Senior Notes for the three and nine months ended June 30, 2020. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
Performance Shares And Restricted Awards [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of Share-Based Payment Award Valuation Assumptions | The following table sets forth the significant assumptions used for the performance-based awards granted during the three months ended June 30, 2020: June 12, 2020 Grant Date Risk-free interest rate 0.75 % Expected volatility 40.00 % Expected term (in years) 0.50 Expected dividend yield 0.00 % |
Service Based Stock Options And Restricted Stock Awards [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of Share-Based Payment Award Valuation Assumptions | The following table sets forth the significant assumptions used for the service-based awards granted during the three months ended June 30, 2020: June 12, 2020 Grant Date Risk-free interest rate 0.47% - 0.56 % Expected volatility 35.00 % Expected term (in years) 6.25 - 7.00 Expected dividend yield 0.00 % |
Performance Shares [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of Share-Based Compensation Stock Options Activity | The following table summarized the performance-based stock option activity for the three months ended June 30, 2020: Weighted Average Weighted Average Exercise Price Per Remaining Contract Weighted Average Number of Shares Share Term Intrinsic Value (in years) (in thousands) Outstanding at October 1, 2019 — $ — — $ — Granted 1,706,098 23.00 10 14,372 Exercised — — — — Cancelled/Forfeited — — — — Expired — — — — Outstanding at June 30, 2020 1,706,098 23.00 10 14,372 Vested and exercisable at June 30, 2020 — — — — |
Service Based Stock Option Activity [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of Share-Based Compensation Stock Options Activity | The following table summarize s Weighted Average Weighted Average Exercise Price Per Remaining Contract Weighted Average Number of Shares Share Term Intrinsic Value (in years) (in thousands) Outstanding at October 1, 2019 — $ — — $ — Granted 3,388,557 23.00 10 39,510 Exercised — — — — Cancelled/Forfeited — — — — Expired — — — — Outstanding at June 30, 2020 3,388,557 23.00 10 39,510 Vested and exercisable at June 30, 2020 928,648 23.00 10 7,294 |
Performance Based Restricted Stock [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of Non-Vested Restricted Stock Activity | A summary of the performance-based restricted stock awards activity during the three months ended June 30, 2020 was as follows: Weighted Average Number of Shares Grant Date Fair Value (in thousands) Outstanding and unvested at October 1, 2019 — $ — Granted 3,884,615 89,032 Vested — — Forfeited — — Outstanding and unvested at June 30, 2020 3,884,615 89,032 |
Service Based Restricted Stock [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of Non-Vested Restricted Stock Activity | A summary of the service-based restricted stock awards activity during the three months ended June 30, 2020 was a Weighted Average Number of Shares Grant Date Fair Value (in thousands) Outstanding and unvested at October 1, 2019 — $ — Granted 1,647,428 5,571 Vested 53,132 147 Forfeited — — Outstanding and unvested at June 30, 2020 1,594,296 5,424 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Summary of Computation of Basic And Diluted Earnings Per Share | The following table sets forth the computation of the Company’s basic and diluted EPS attributable to common stockholders (in thousands, except share and per share amount s Three Months Ended June 30, Nine Months Ended June 30, 2020 2019 2020 2019 Numerator: Net income (loss) $ (52,116 ) $ 1,511 $ (57,874 ) $ (19,276 ) Net income (loss) attributable to common stockholders - basic and diluted (52,116 ) 1,511 (57,874 ) (19,276 ) Denominator: Weighted-average shares of common stock - basic and diluted 118,738,357 108,162,741 113,525,537 108,162,741 Net income (loss) per share attributable to common stockholders: (52,116 ) 1,511 (57,874 ) (19,276 ) Net income (loss) attributable to common stockholders - basic and diluted $ (0.44 ) $ 0.01 $ (0.51 ) $ (0.18 ) |
Summary of Antidilutive Securities Excluded From Computation of Earnings Per Share | The following table includes the number of shares that may be dilutive common shares in the future, and were not included in the computation of diluted net income (loss) per share because the effect was anti-dilutive: Three Months Ended June 30, Nine Months Ended June 30, 2020 2019 2020 2019 Restricted Stock Awards 1,143,949 — 381,316 — Stock Options 992,632 — 330,877 — Restricted Stock Units 32,877 — 10,959 — |
Commitments And Contingencies (
Commitments And Contingencies (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of Future Minimum Annual Payments Under Noncancelable Leases | Future minimum annual payments under noncancelable leases with initial or remaining noncancelable lease terms in excess of one year as of June 30, 2020 were as follows (in thousands): Capital Financing Operating Remaining period of 2020 $ 405 $ 192 $ 446 2021 1,595 778 1,679 2022 1,439 788 1,303 2023 1,026 808 1,075 2024 648 827 709 Thereafter 2,789 4,607 307 Total Payments $ 7,902 $ 8,000 $ 5,519 Less amount representing interest (4,006 ) Present value of minimum capital lease payments $ 3,896 |
Condensed Financial Informati_2
Condensed Financial Information of Registrant (Parent Company Only) (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
Schedule of Condensed Balance Sheets | The AZEK Company Inc. (parent company only) Condensed Balance Sheets (In thousands of dollars, except share and per share amounts) June 30, 2020 September 30, 2019 ASSETS: Non-current Investment in subsidiaries $ 1,269,513 $ 490,023 Total non-current 1,269,513 490,023 Total assets $ 1,269,513 $ 490,023 LIABILITIES AND STOCKHOLDERS’ EQUITY: Total liabilities $ — $ — Stockholders’ equity: Preferred stock, $0.001 par value; 1,000,000 shares authorized and no shares issued and — — Class A common stock, $0.001 par value; 1,100,000,000 shares authorized, 121,566,577 shares issued and outstanding at June 30, 2020 and 75,093,778 shares issued and outstanding at September 30, 2019 122 75 Class B common stock, $0.001 par value; 100,000,000 shares authorized, 33,068,963 shares issued and outstanding at June 30, 2020 and September 30, 2019 , respectively 33 33 Additional paid-in 1,488,474 652,493 Accumulated deficit (219,116 ) (162,578 ) Total stockholders’ equity 1,269,513 490,023 Total liabilities and stockholders’ equity $ 1,269,513 $ 490,023 |
Parent Company [Member] | |
Schedule of Condensed Statements of Comprehensive Income (Loss) | The AZEK Company Inc. (parent company only) Condensed Statements of Comprehensive Income (Loss) (In thousands of dollars) Three Months Ended June 30, Nine Months Ended June 30, 2020 2019 2020 2019 Net income (loss) of subsidiaries $ (52,116 ) $ 1,511 $ (57,874 ) $ (19,276 ) Net income (loss) of subsidiaries $ (52,116 ) $ 1,511 $ (57,874 ) $ (19,276 ) Comprehensive income (loss) $ (52,116 ) $ 1,511 $ (57,874 ) $ (19,276 ) |
Organization and Summary of S_3
Organization and Summary of Significant Accounting Policies - Additional Information (Detail) $ / shares in Units, $ in Thousands | Jun. 16, 2020USD ($)$ / sharesshares | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Oct. 01, 2019USD ($) | Sep. 30, 2019USD ($) |
Organization And Summary Of Significant Accounting Policies [Line Items] | |||||||
Proceeds from issuance initial public offering | $ 819,400 | $ 822,630 | |||||
Underwriting discounts and commissions payments | 50,600 | ||||||
Estimated offering expenses payable | 9,500 | ||||||
Prepayment of senior notes | 665,000 | ||||||
Research and development expenses | $ 1,700 | $ 2,100 | 5,700 | $ 5,900 | |||
Retained earnings | (219,116) | $ (219,116) | $ (162,578) | ||||
Stock split conversion ratio | 173 | ||||||
Revolving Credit Facility [Member] | |||||||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||||||
Revolving Credit Facility, outstanding amount | 70,000 | $ 44,000 | $ 44,000 | $ 0 | |||
Revision of Prior Period, Adjustment [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member] | |||||||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||||||
Retained earnings | $ 1,300 | ||||||
2020 Senior Notes [Member] | |||||||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||||||
Senior notes outstanding | 350,000 | ||||||
Prepayment of senior notes | $ 337,700 | ||||||
IPO [Member] | |||||||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||||||
Shares issued during period | shares | 38,237,500 | ||||||
Shares issued price | $ / shares | $ 23 | ||||||
Over-Allotment Option [Member] | |||||||
Organization And Summary Of Significant Accounting Policies [Line Items] | |||||||
Shares issued during period | shares | 4,987,500 |
Revenue - Additional Informatio
Revenue - Additional Information (Detail) - USD ($) $ in Thousands | Jun. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2019 |
Revenue from Contract with Customer [Abstract] | |||
Accrued rebates | $ 22,770 | $ 22,733 | $ 18,300 |
Contra trade receivable | $ 3,000 | $ 3,500 |
Revenue - Summary of Rebate Act
Revenue - Summary of Rebate Activity (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | ||||
Beginning balance | $ 22,123 | $ 31,028 | $ 24,858 | $ 21,914 |
Rebate expense | 11,545 | 10,336 | 44,989 | 38,335 |
Rebate payments | (7,844) | (19,578) | (44,023) | (38,463) |
Ending balance | $ 25,824 | $ 21,786 | $ 25,824 | $ 21,786 |
Business Combinations - Additio
Business Combinations - Additional Information (Detail) - USD ($) $ in Thousands | Jan. 31, 2020 | Jun. 30, 2020 | Jun. 30, 2020 | Sep. 30, 2019 |
Business Combinations [Line Items] | ||||
Goodwill | $ 951,190 | $ 951,190 | $ 944,298 | |
Acquired finite lived intangible assets weighted average useful life | 13 years 1 month 6 days | |||
Working capital adjustment recognized | 600 | |||
Return Polymers Inc [Member] | ||||
Business Combinations [Line Items] | ||||
Business combination, total purchase price | $ 18,453 | |||
Business combination, date of acquisition | Jan. 31, 2020 | |||
Business combination, recognized identifiable assets acquired and liabilities assumed, intangible assets including goodwill | $ 11,600 | |||
Goodwill | $ 6,892 | 6,900 | $ 6,900 | |
Goodwill, expected tax deductible amount | $ 6,900 | $ 6,900 | ||
Acquired finite lived intangible assets weighted average useful life | 14 years 3 months 18 days | |||
Return Polymers Inc [Member] | Acquisition date | ||||
Business Combinations [Line Items] | ||||
Business combination, total purchase price | $ 18,069 | |||
Goodwill | 6,304 | |||
Customer relationships [Member] | Return Polymers Inc [Member] | ||||
Business Combinations [Line Items] | ||||
Business combination, recognized identifiable assets acquired and liabilities assumed, finite-lived intangibles | $ 4,600 | |||
Acquired finite lived intangible assets useful life | 15 years | |||
Trademarks [Member] | Return Polymers Inc [Member] | ||||
Business Combinations [Line Items] | ||||
Business combination, recognized identifiable assets acquired and liabilities assumed, finite-lived intangibles | $ 700 | |||
Acquired finite lived intangible assets useful life | 10 years |
Business Combinations - Summary
Business Combinations - Summary of Preliminary Allocation of Assets Acquired and Liabilities Assumed (Detail) - USD ($) $ in Thousands | Jan. 31, 2020 | Jun. 30, 2020 | Sep. 30, 2019 |
Allocation of consideration to assets acquired and liabilities assumed: | |||
Goodwill | $ 951,190 | $ 944,298 | |
Return Polymers Inc [Member] | |||
Business combination recognized identifiable assets acquired goodwill and liabilities assumed net abstract [Line Items] | |||
Total purchase consideration | $ 18,453 | ||
Allocation of consideration to assets acquired and liabilities assumed: | |||
Cash and cash equivalents | 0 | ||
Accounts receivable | 1,119 | ||
Inventories | 2,532 | ||
Prepaid expenses and other current assets | 39 | ||
Property, plant and equipment | 4,080 | ||
Intangible assets | 5,300 | ||
Goodwill | 6,892 | $ 6,900 | |
Accounts payable | (947) | ||
Accrued expenses and other liabilities | (562) | ||
Net assets acquired | 18,453 | ||
Return Polymers Inc [Member] | Measurement Period Adjustments | |||
Business combination recognized identifiable assets acquired goodwill and liabilities assumed net abstract [Line Items] | |||
Total purchase consideration | 384 | ||
Allocation of consideration to assets acquired and liabilities assumed: | |||
Cash and cash equivalents | (204) | ||
Goodwill | 588 | ||
Net assets acquired | 384 | ||
Return Polymers Inc [Member] | Acquisition date | |||
Business combination recognized identifiable assets acquired goodwill and liabilities assumed net abstract [Line Items] | |||
Total purchase consideration | 18,069 | ||
Allocation of consideration to assets acquired and liabilities assumed: | |||
Cash and cash equivalents | 204 | ||
Accounts receivable | 1,119 | ||
Inventories | 2,532 | ||
Prepaid expenses and other current assets | 39 | ||
Property, plant and equipment | 4,080 | ||
Intangible assets | 5,300 | ||
Goodwill | 6,304 | ||
Accounts payable | (947) | ||
Accrued expenses and other liabilities | (562) | ||
Net assets acquired | $ 18,069 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Detail) - USD ($) $ in Thousands | Jun. 30, 2020 | Sep. 30, 2019 |
Inventory [Line Items] | ||
Raw materials | $ 34,353 | $ 36,855 |
Work in process | 19,557 | 19,514 |
Finished goods | 76,716 | 59,022 |
Total inventories | $ 130,626 | $ 115,391 |
Property, Plant and Equipment_3
Property, Plant and Equipment - Net - Summary of Property, Plant and Equipment - Net (Detail) - USD ($) $ in Thousands | Jun. 30, 2020 | Sep. 30, 2019 |
Property, Plant and Equipment [Line Items] | ||
Property Plant and Equipment Excluding Construction in Progress Gross | $ 402,715 | $ 360,461 |
Property, Plant and Equipment, Gross | 435,355 | 376,914 |
Accumulated depreciation | (200,126) | (168,220) |
Total property, plant and equipment - net | 235,229 | 208,694 |
Land and Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 2,758 | 2,758 |
Buildings and Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 70,042 | 67,770 |
Capital Lease Building [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 2,021 | 2,021 |
Capital Lease Manufacturing Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 1,026 | 1,026 |
Capital Lease Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 3,685 | 3,835 |
Manufacturing Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 292,176 | 254,570 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 24,742 | 22,733 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 5,855 | 5,409 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 410 | 339 |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 32,640 | $ 16,453 |
Property, Plant and Equipment_4
Property, Plant and Equipment - Net - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Sep. 30, 2019 | |
Property, Plant and Equipment [Line Items] | |||||
Finance lease right of use asset | $ 9,200 | $ 9,200 | $ 9,200 | ||
Finance lease obligation | 7,900 | 7,900 | 7,900 | ||
Depreciation | 12,700 | $ 8,200 | 33,603 | $ 24,155 | |
Interest Capitalized | 300 | $ 100 | 800 | $ 700 | |
Assets Under Capital Lease [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Accumulated amortization leased assets | 3,900 | 3,900 | 3,700 | ||
Assets under Build to Suit lease [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Accumulated amortization leased assets | $ 500 | $ 500 | $ 300 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Net - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Sep. 30, 2019 | |
Goodwill [Line Items] | |||||
Goodwill | $ 951,190 | $ 951,190 | $ 944,298 | ||
Accumulated goodwill impairments | 32,200 | 32,200 | |||
Amortization expense | 13,900 | $ 15,100 | $ 41,622 | $ 45,479 | |
Acquired finite lived intangible assets weighted average useful life | 13 years 1 month 6 days | ||||
Residential Segment [Member] | |||||
Goodwill [Line Items] | |||||
Goodwill | 910,800 | $ 910,800 | 903,900 | ||
Commercial Segment [Member] | |||||
Goodwill [Line Items] | |||||
Goodwill | $ 40,400 | $ 40,400 | $ 40,400 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Net - Summary of Finite-Lived Intangible Assets (Detail) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | |
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Value | $ 671,086 | $ 665,786 | |
Accumulated Amortization | (364,991) | (323,368) | |
Total | 306,095 | 342,418 | |
Proprietary knowledge [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Value | 289,300 | 289,300 | |
Accumulated Amortization | (189,474) | (171,686) | |
Total | $ 99,826 | 117,614 | |
Proprietary knowledge [Member] | Minimum [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Lives in Years | 10 years | 10 years | |
Proprietary knowledge [Member] | Maximum [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Lives in Years | 15 years | 15 years | |
Trademarks [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Value | $ 223,840 | 223,140 | |
Accumulated Amortization | (120,454) | (108,096) | |
Total | $ 103,386 | 115,044 | |
Trademarks [Member] | Minimum [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Lives in Years | 5 years | 5 years | |
Trademarks [Member] | Maximum [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Lives in Years | 20 years | 20 years | |
Customer relationships [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Value | $ 146,870 | 142,270 | |
Accumulated Amortization | (48,917) | (39,084) | |
Total | $ 97,953 | 103,186 | |
Customer relationships [Member] | Minimum [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Lives in Years | 15 years | 15 years | |
Customer relationships [Member] | Maximum [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Lives in Years | 19 years | 19 years | |
Patents [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Lives in Years | 10 years | 10 years | |
Gross Carrying Value | $ 7,000 | 7,000 | |
Accumulated Amortization | (2,927) | (2,132) | |
Total | 4,073 | 4,868 | |
Other intangible [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Value | 4,076 | 4,076 | |
Accumulated Amortization | (3,219) | (2,370) | |
Total | $ 857 | $ 1,706 | |
Other intangible [Member] | Minimum [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Lives in Years | 3 years | 3 years | |
Other intangible [Member] | Maximum [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Lives in Years | 15 years | 15 years |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Net - Summary of Expected Amortization Expense Relating to Intangible Assets (Detail) - USD ($) $ in Thousands | Jun. 30, 2020 | Sep. 30, 2019 |
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | ||
Remaining period of 2020 | $ 13,538 | |
2021 | 49,826 | |
2022 | 44,369 | |
2023 | 39,240 | |
2024 | 34,246 | |
Thereafter | 124,876 | |
Total | $ 306,095 | $ 342,418 |
Composition of Certain Balanc_3
Composition of Certain Balance Sheet Accounts - Summary of Allowance for Doubtful Accounts (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Allowance for Credit Loss [Abstract] | ||||
Beginning balance | $ 1,678 | $ 1,441 | $ 904 | $ 1,230 |
Provision | (229) | 67 | 522 | 284 |
Acquisition | 35 | |||
Bad debt write-offs | (107) | (703) | (119) | (709) |
Ending balance | $ 1,342 | $ 805 | $ 1,342 | $ 805 |
Composition of Certain Balanc_4
Composition of Certain Balance Sheet Accounts - Summary of Accrued Expenses and Other Liabilities (Detail) - USD ($) $ in Thousands | Jun. 30, 2020 | Sep. 30, 2019 |
Accrued Liabilities and Other Liabilities [Abstract] | ||
Employee related liabilities | $ 23,605 | $ 17,202 |
Professional fees | 5,863 | 14,160 |
Freight | 4,191 | 4,158 |
Warranty | 3,375 | 2,543 |
Marketing | 2,794 | 2,026 |
Construction in progress | 1,547 | 903 |
Capital lease | 922 | 721 |
Contingent consideration | 1,303 | |
Other | 4,925 | 4,887 |
Total accrued expenses and other current liabilities | $ 47,222 | $ 47,903 |
Debt - Summary of Long-Term Deb
Debt - Summary of Long-Term Debt (Detail) - USD ($) $ in Thousands | Jun. 30, 2020 | Sep. 30, 2019 |
Debt Instrument [Line Items] | ||
Long-term Debt, Gross | $ 511,112 | $ 1,123,507 |
Less: unamortized deferred financing fees | (4,456) | (11,890) |
Less: current portion | 0 | (8,304) |
Long-term debt—less current portion and unamortized deferred financing fees | 506,656 | 1,103,313 |
Term Loan [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Gross | 467,112 | 808,507 |
2021 Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Gross | 315,000 | |
Less: unamortized deferred financing fees | (2,800) | |
Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Gross | 44,000 | |
Less: unamortized deferred financing fees | $ (900) | $ (900) |
Debt - Summary of Long-Term D_2
Debt - Summary of Long-Term Debt (Detail) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2013 | Jun. 30, 2020 | Sep. 30, 2019 |
Term Loan [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument maturity date | May 5, 2024 | ||
Debt instrument, description of variable rate basis | LIBOR + 3.75% | ||
Debt instrument, basis spread on variable rate | 3.75% | ||
Debt instrument rate | 4.75% | 5.93% | |
Debt instrument unamortized discount | $ 542 | $ 1,105 | |
2021 Senior Notes [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument maturity date | Oct. 1, 2021 | Oct. 1, 2021 | |
Debt instrument fixed interest rate | 8.00% | 8.00% | |
Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument maturity date | Mar. 9, 2022 | ||
Debt instrument, description of variable rate basis | LIBOR + 1.75% | ||
Debt instrument, basis spread on variable rate | 1.75% | ||
Debt instrument rate | 2.75% | 0.00% |
Debt - Summary of Maturities of
Debt - Summary of Maturities of Long Term Debt (Detail) $ in Thousands | Jun. 30, 2020USD ($) |
Maturities of Long-term Debt [Abstract] | |
Remaining period of 2020 | |
2021 | |
2022 | 44,000 |
2023 | |
2024 | 467,654 |
Thereafter | |
Total | $ 511,654 |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) $ in Thousands | Jun. 16, 2020 | Jun. 08, 2020 | May 12, 2020 | May 07, 2020 | Mar. 16, 2020 | Jan. 31, 2020 | Sep. 30, 2013 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Sep. 30, 2019 | Mar. 09, 2017 |
Debt Instrument [Line Items] | |||||||||||||
Proceeds from senior notes | $ 346,500 | ||||||||||||
Accrued interest paid | 70,801 | 66,086 | |||||||||||
Gain (loss) on extinguishment of debt | $ (37,538) | (37,538) | 0 | ||||||||||
Deferred financing cost | 4,456 | $ 4,456 | $ 11,890 | ||||||||||
Prepay of outstanding principal of term loan agreement | $ 2,200 | ||||||||||||
Amortization of deferred financing fee | 3,200 | ||||||||||||
CPG International LLC [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument, covenant description | CPG International LLC is also required to make mandatory prepayments (i) when aggregate borrowings exceed commitments or the applicable borrowing base and (ii) during “cash dominion,”which occurs if (a) the availability under the Revolving Credit Facility is less than the greater of (i) $12.5 million and (ii) 10% of the lesser of (x) $150.0 million and (y) the borrowing base, for five consecutive business days or (b) certain events of default have occurred and are continuing. | ||||||||||||
Senor Notes Due Two Thousand And Twenty One [Member] | CPG International LLC [Member] | Wilmington Trust National Association [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument maturity date | Oct. 1, 2021 | ||||||||||||
Debt instrument interest rate | 8.00% | ||||||||||||
Maximum [Member] | CPG International LLC [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Minimum fixed charge coverage ratio | 100 | ||||||||||||
Minimum [Member] | CPG International LLC [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Minimum fixed charge coverage ratio | 100 | ||||||||||||
Revolving Credit Facility [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument maturity date | Mar. 9, 2022 | ||||||||||||
Deferred financing cost | 900 | $ 900 | 900 | ||||||||||
Aggregate maximum borrowing capacity | $ 150,000 | ||||||||||||
Loan borrowed | $ 89,000 | ||||||||||||
Outstanding borrowings capacity | $ 70,000 | 44,000 | 44,000 | 0 | |||||||||
Outstanding letters of credit held | 3,900 | $ 3,900 | 3,000 | ||||||||||
Debt Instrument, Basis spread on variable rate | 1.75% | ||||||||||||
Line of credit facility, commitment fee description | If the average daily used percentage is greater than 50%, the commitment fee equals 25 basis points, and if the average daily used percentage is less than or equal to 50%, the commitment fee equals 37.5 basis points. | ||||||||||||
Debt instrument, description of variable rate basis | LIBOR + 1.75% | ||||||||||||
Line of credit facility, commitment fee amount | 100 | $ 100 | $ 300 | 300 | |||||||||
Debt instrument, covenant description | (i) 10% of the lesser of the aggregate commitments under the Revolving Credit Facility and the borrowing base, and (ii) $12.5 million. | ||||||||||||
Amortization of deferred financing fee | 107 | 89 | $ 287 | 268 | |||||||||
Revolving Credit Facility [Member] | CPG International LLC [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Available borrowing capacity | 97,000 | 97,000 | |||||||||||
Option to increase the commitments | 100,000 | $ 100,000 | |||||||||||
Revolving Credit Facility [Member] | ABR Borrowings [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument interest rate description | (i) for ABR borrowings, the highest of (a) the Federal Funds Rate plus 50 basis points, (b) the prime rate and (c) the LIBOR as of such date for a deposit in U.S. dollars with a maturity of one month plus 100 basis points, plus, in each case, a spread of 50 to 100 basis points, based on average historical availability | ||||||||||||
Revolving Credit Facility [Member] | ABR Borrowings [Member] | Fed Funds Effective Rate Overnight Index Swap Rate [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt Instrument, Basis spread on variable rate | 0.50% | ||||||||||||
Debt instrument, description of variable rate basis | Federal Funds Rate plus 50 basis points | ||||||||||||
Revolving Credit Facility [Member] | ABR Borrowings [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt Instrument, Basis spread on variable rate | 1.00% | ||||||||||||
Debt instrument, description of variable rate basis | LIBOR as of such date for a deposit in U.S. dollars with a maturity of one month plus 100 basis points, plus, in each case, a spread of 50 to 100 basis points | ||||||||||||
Revolving Credit Facility [Member] | ABR Borrowings [Member] | Prime Rate [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument, description of variable rate basis | prime rate | ||||||||||||
Revolving Credit Facility [Member] | Eurocurrency Borrowings [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument interest rate description | for Eurocurrency borrowings, adjusted LIBOR plus a spread of 150 to 200 basis points, based on average historical availability | ||||||||||||
Revolving Credit Facility [Member] | Eurocurrency Borrowings [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument, description of variable rate basis | LIBOR plus a spread of 150 to 200 basis points | ||||||||||||
Revolving Credit Facility [Member] | FILO Loans [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Aggregate maximum borrowing capacity | $ 8,500 | ||||||||||||
Revolving Credit Facility [Member] | Maximum [Member] | ABR Borrowings [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt Instrument, Basis spread on variable rate | 1.00% | ||||||||||||
Revolving Credit Facility [Member] | Maximum [Member] | Eurocurrency Borrowings [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt Instrument, Basis spread on variable rate | 2.00% | ||||||||||||
Revolving Credit Facility [Member] | Minimum [Member] | ABR Borrowings [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt Instrument, Basis spread on variable rate | 0.50% | ||||||||||||
Revolving Credit Facility [Member] | Minimum [Member] | Eurocurrency Borrowings [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt Instrument, Basis spread on variable rate | 1.50% | ||||||||||||
Amended Agreement For Term Loan [Member] | CPG International LLC [Member] | Wilmington Trust National Association [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument maturity date | May 5, 2024 | ||||||||||||
Deferred financing cost | 4,500 | $ 4,500 | 9,100 | ||||||||||
Prepay of outstanding principal of term loan agreement | 337,700 | ||||||||||||
Payment of accrued interest | $ 4,300 | ||||||||||||
Cumulative term loan prepayments estimated | 6,400 | ||||||||||||
Percentage of principal amount to be repaid by way of instalments | 0.25253% | ||||||||||||
Term loan frequency of instalment payment | quarterly installments | ||||||||||||
Amended Agreement For Term Loan [Member] | CPG International LLC [Member] | London Interbank Offered Rate (LIBOR) [Member] | Wilmington Trust National Association [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument base rate | 1.00% | 1.00% | |||||||||||
Amended Agreement For Term Loan [Member] | CPG International LLC [Member] | Federal Funds Rate [Member] | Wilmington Trust National Association [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt Instrument, Basis spread on variable rate | 0.50% | ||||||||||||
Amended Agreement For Term Loan [Member] | CPG International LLC [Member] | Adjusted Libor [Member] | Wilmington Trust National Association [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt Instrument, Basis spread on variable rate | 0.375% | ||||||||||||
Debt instrument base rate | 1.00% | 1.00% | |||||||||||
Amended Agreement For Term Loan [Member] | Minimum [Member] | CPG International LLC [Member] | Alternative Base Rate [Member] | Wilmington Trust National Association [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt Instrument, Basis spread on variable rate | 2.75% | ||||||||||||
Debt instrument base rate | 2.00% | 2.00% | |||||||||||
2021 Senior Notes [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument face amount | $ 315,000 | ||||||||||||
Debt instrument maturity date | Oct. 1, 2021 | Oct. 1, 2021 | |||||||||||
Accrued interest paid | $ 4,600 | ||||||||||||
Gain (loss) on extinguishment of debt | $ 1,900 | $ (1,900) | |||||||||||
Debt instrument interest rate | 8.00% | 8.00% | 8.00% | ||||||||||
Debt instrument, repurchase amount | $ 315,000 | ||||||||||||
Debt Instrument, Repurchase Date | Jun. 8, 2020 | ||||||||||||
Deferred financing cost | $ 2,800 | ||||||||||||
Amortization of deferred financing fee | $ 176 | $ 352 | $ 880 | $ 1,056 | |||||||||
2025 Senior Notes [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument face amount | $ 350,000 | ||||||||||||
Debt instrument maturity date | May 15, 2025 | ||||||||||||
Proceeds from senior notes | $ 350,000 | ||||||||||||
Repayment of debt | 350,000 | ||||||||||||
Accrued interest paid | 3,900 | ||||||||||||
Gain (loss) on extinguishment of debt | $ (35,600) | 35,600 | |||||||||||
Debt instrument interest rate | 9.50% | ||||||||||||
Amortization of deferred financing fee | $ 180 | $ 180 | |||||||||||
2025 Senior Notes [Member] | Revolving Credit Facility [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Repayments of credit | $ 15,000 | $ 15,000 | |||||||||||
Debt Instrument Redemption Option One [Member] | 2025 Senior Notes [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt Instrument, Redemption Price, Percentage of Principal Amount Redeemed | 40.00% | ||||||||||||
Debt Instrument, Redemption Price, Percentage | 107.125% | ||||||||||||
Debt Instrument Redemption Option Two [Member] | 2025 Senior Notes [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt Instrument, Redemption Price, Percentage of Principal Amount Redeemed | 40.00% | ||||||||||||
Debt Instrument, Redemption Price, Percentage | 107.125% | ||||||||||||
Debt Instrument Redemption Option Three [Member] | 2025 Senior Notes [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt Instrument, Redemption Price, Percentage | 100.00% |
Debt - Disclosure of Debt Instr
Debt - Disclosure of Debt Instrument Redemption (Detail) | 12 Months Ended | |
May 14, 2023 | Sep. 30, 2017 | |
2021 Senior Notes [Member] | Debt Instrument, Redemption, Period One [Member] | ||
Debt Instrument, Redemption [Line Items] | ||
Debt Instrument, Redemption Price, Percentage | 106.00% | |
2021 Senior Notes [Member] | Debt Instrument, Redemption, Period Two [Member] | ||
Debt Instrument, Redemption [Line Items] | ||
Debt Instrument, Redemption Price, Percentage | 104.00% | |
2021 Senior Notes [Member] | Debt Instrument, Redemption, Period Three [Member] | ||
Debt Instrument, Redemption [Line Items] | ||
Debt Instrument, Redemption Price, Percentage | 102.00% | |
2021 Senior Notes [Member] | Debt Instrument, Redemption, Period Four [Member] | ||
Debt Instrument, Redemption [Line Items] | ||
Debt Instrument, Redemption Price, Percentage | 100.00% | |
2025 Senior Notes [Member] | Debt Instrument, Redemption, Period One [Member] | ||
Debt Instrument, Redemption [Line Items] | ||
Debt Instrument, Redemption Price, Percentage | 104.75% | |
2025 Senior Notes [Member] | Debt Instrument, Redemption, Period Two [Member] | ||
Debt Instrument, Redemption [Line Items] | ||
Debt Instrument, Redemption Price, Percentage | 102.375% | |
2025 Senior Notes [Member] | Debt Instrument, Redemption, Period Three [Member] | ||
Debt Instrument, Redemption [Line Items] | ||
Debt Instrument, Redemption Price, Percentage | 100.00% |
Debt - Summary of Interest Expe
Debt - Summary of Interest Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Interest expense | ||||
Other | $ 380 | $ 386 | $ 1,155 | $ 1,077 |
Debt issuance costs | ||||
Amortization of debt issuance costs | 3,200 | |||
Original issue discounts | 442 | 60 | 562 | 181 |
Capitalized interest | (270) | (112) | (849) | (702) |
Interest expense | 25,148 | 21,440 | 64,882 | 63,213 |
Term Loan [Member] | ||||
Interest expense | ||||
Interest expense, debt | 11,228 | 13,596 | 35,584 | 40,197 |
Debt issuance costs | ||||
Amortization of debt issuance costs | 3,630 | 495 | 4,620 | 1,485 |
2021 Senior Notes [Member] | ||||
Interest expense | ||||
Interest expense, debt | 4,550 | 6,300 | 17,150 | 18,900 |
Debt issuance costs | ||||
Amortization of debt issuance costs | 176 | 352 | 880 | 1,056 |
2025 Senior Notes [Member] | ||||
Interest expense | ||||
Interest expense, debt | 3,879 | 3,879 | ||
Debt issuance costs | ||||
Amortization of debt issuance costs | 180 | 180 | ||
Revolving Credit Facility [Member] | ||||
Interest expense | ||||
Interest expense, debt | 846 | 274 | 1,434 | 751 |
Debt issuance costs | ||||
Amortization of debt issuance costs | $ 107 | $ 89 | $ 287 | $ 268 |
Product Warranties - Additional
Product Warranties - Additional Information (Detail) - USD ($) $ in Millions | 9 Months Ended | |
Jun. 30, 2020 | Sep. 30, 2019 | |
Product Warranty Liability [Line Items] | ||
Assurance of product | The Company provides product assurance warranties of various lengths ranging from 5 years to lifetime for limited coverage for a variety of material and workmanship defects based on standard terms and conditions between the Company and its customers. | |
Product warranty classified as noncurrent | $ 0.5 | |
Other Current Assets [Member] | ||
Product Warranty Liability [Line Items] | ||
Product warranty classified as current | $ 1.9 | $ 1.3 |
Product Warranties - Summary of
Product Warranties - Summary of Warranty Reserve Activity (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Product Warranty Liability [Line Items] | ||||
Beginning balance | $ 11,984 | $ 9,824 | $ 11,133 | $ 9,304 |
Adjustments to reserve | 35 | 1,053 | 2,226 | 2,403 |
Warranty claims payment | (770) | (830) | (2,247) | (1,797) |
Accretion – purchase accounting valuation | 28 | 41 | 165 | 178 |
Ending balance | 11,277 | 10,088 | 11,277 | 10,088 |
Current portion of accrued warranty | (3,375) | (1,873) | (3,375) | (1,873) |
Accrued warranty – less current portion | $ 7,902 | $ 8,215 | $ 7,902 | $ 8,215 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Summary of Carrying Values and the Estimated Fair Values of the Debt Financial Instruments (Detail) - Fair Value, Inputs, Level 2 [Member] - USD ($) $ in Thousands | Jun. 30, 2020 | Sep. 30, 2019 |
Carrying Value [Member] | ||
Schedule of carrying values and the estimated fair values of the debt financial instruments [Line Items] | ||
Term Loan Agreement due May 5, 2024 | $ 467,112 | $ 808,507 |
2021 Senior Notes due October 1, 2021 | 315,000 | |
Revolving Credit Facility, expires March 9, 2022 | 44,000 | |
Estimated Fair Value [Member] | ||
Schedule of carrying values and the estimated fair values of the debt financial instruments [Line Items] | ||
Term Loan Agreement due May 5, 2024 | 461,273 | 804,464 |
2021 Senior Notes due October 1, 2021 | $ 315,000 | |
Revolving Credit Facility, expires March 9, 2022 | $ 44,000 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Additional Information (Detail) $ in Thousands | 9 Months Ended | ||
Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Sep. 30, 2019USD ($) | |
Business combination, contingent consideration, liability | $ 1,303 | ||
Non cash compensation expense contingent payment | 0 | $ 900 | |
Accrued Expenses And Other Liabilities [Member] | |||
Business combination, contingent consideration, liability | 0 | $ 1,300 | |
Ultralox [Member] | |||
Business combination, contingent consideration arrangements, range of outcomes, value, low | 0 | ||
Business combination, contingent consideration arrangements, range of outcomes, value, high | 30,000 | ||
Contingent liability, payments | 1,700 | 2,000 | |
Business combination, recognized identifiable assets acquired and liabilities assumed, contingent liability | 5,300 | ||
Contingent consideration related to non-employee owners | 2,800 | ||
Contingent consideration related compensation expenses | 2,500 | ||
Adjustment in fair value of contingent payment | $ 900 | ||
Additional contingent liability, payments | $ 3,400 | ||
Ultralox [Member] | Measurement Input, EBITDA Multiple [Member] | |||
Business combination, contingent consideration, liability, measurement input | 39 |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Summary of Aggregate Fair Value of the Contingent Consideration and Compensation Expense (Detail) - Contingent Consideration Liability [Member] - Fair Value, Inputs, Level 3 [Member] - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Fair value, liabilities measured on recurring basis, unobservable input reconciliation [Line Items] | ||||
Beginning balance | $ 558 | $ 1,303 | $ 1,900 | |
Change in fair value of contingent consideration | 53 | |||
Less: contingent payments | (1,675) | (3,675) | ||
Contingent payment recognized as compensation expense | 373 | 372 | 2,653 | |
Ending balance | $ 931 | $ 931 |
Segments - Summary of Residenti
Segments - Summary of Residential and Commercial Segment Reporting Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Segment Reporting Information [Line Items] | ||||
Net sales to customers | $ 223,711 | $ 221,307 | $ 635,339 | $ 578,669 |
Adjusted EBITDA | ||||
Total Adjusted EBITDA for reporting segments | 67,350 | 60,983 | 175,226 | 149,194 |
Unallocated net expenses | (9,530) | (8,212) | (27,782) | (22,128) |
Adjustments to Income (loss) before income tax provision | ||||
Depreciation and amortization | (26,597) | (23,243) | (75,225) | (69,634) |
Stock-based compensation costs | (18,788) | (737) | (20,169) | (2,600) |
Business transformation costs | (109) | (2,831) | (435) | (12,608) |
Acquisition costs | (182) | (521) | (1,538) | (3,656) |
Initial public offering costs | (1,623) | (1,997) | (6,716) | (6,155) |
Other costs | (2,551) | (250) | (3,015) | 6,693 |
Capital structure transaction costs | (37,538) | (37,538) | 0 | |
Interest expense | (25,148) | (21,440) | (64,882) | (63,213) |
Income (loss) before income tax provision | (54,716) | 1,752 | (62,074) | (24,107) |
Residential [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales to customers | 192,599 | 182,553 | 538,514 | 476,441 |
Adjusted EBITDA | ||||
Total Adjusted EBITDA for reporting segments | 62,326 | 54,090 | 164,047 | 134,818 |
Commercial [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales to customers | 31,112 | 38,754 | 96,825 | 102,228 |
Adjusted EBITDA | ||||
Total Adjusted EBITDA for reporting segments | $ 5,024 | $ 6,893 | $ 11,179 | $ 14,376 |
Segments - Summary of Residen_2
Segments - Summary of Residential and Commercial Segment Reporting Information (Parenthetical) (Detail) - USD ($) $ in Thousands | Jun. 16, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 |
Business Transformation Costs [Line Items] | |||||
Business acquisition acquisition costs completed acquistions | $ 182 | $ 521 | $ 1,538 | $ 3,656 | |
Inventory step up adjustments relating to business acquisitions | 100 | 0 | 600 | 0 | |
legal expenses | 400 | 200 | 400 | 800 | |
Capital structure transaction costs | (37,538) | (37,538) | 0 | ||
Costs of reduction in workforce | 400 | 400 | |||
2021 Senior Notes [Member] | |||||
Business Transformation Costs [Line Items] | |||||
Capital structure transaction costs | 1,900 | (1,900) | |||
2025 Senior Notes [Member] | |||||
Business Transformation Costs [Line Items] | |||||
Capital structure transaction costs | $ (35,600) | 35,600 | |||
IPO [Member] | |||||
Business Transformation Costs [Line Items] | |||||
Costs related to an incentive plan | 1,800 | 100 | 2,200 | 200 | |
Insurance Claims [Member] | |||||
Business Transformation Costs [Line Items] | |||||
Income from insurance recovery of legal loss | 0 | 7,700 | |||
Business Transformation Costs [Member] | |||||
Business Transformation Costs [Line Items] | |||||
Consulting and other costs | 0 | 700 | 0 | 3,900 | |
Compensation costs for transformation | 100 | 200 | 400 | 1,900 | |
Relocation costs | 0 | 1,800 | |||
Start up costs | 0 | 1,400 | 0 | 2,900 | |
Operations related integration costs | $ 0 | $ 500 | $ 0 | $ 2,100 |
Capital Stock - Additional Info
Capital Stock - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | Jun. 16, 2020 | Jun. 30, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Sep. 30, 2019 |
Class of Stock [Line Items] | |||||
Proceeds from initial public offering, net of related costs | $ 819,400 | $ 822,630 | |||
Underwriting commision and discounts | 50,600 | ||||
Estimated offering expenses payable | $ 9,500 | ||||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | 1,000,000 | ||
Common stock description of voting rights | The Class A common stock and Class B common stock provide identical economic rights, but holders of Class B common stock have limited voting rights, specifically that such holders have no right to vote, solely with respect to their shares of Class B common stock, with respect to the election, replacement or removal of directors. | ||||
Common stock description of conversion rights | Class A Common Stock and Class B Common Stock are not entitled to preemptive rights. Holders of Class B Common Stock may convert their shares of Class B Common Stock into shares of Class A Common Stock on a one-for-one basis, in whole or in part, at any time and from time to time at their option. | ||||
Preferred stock par or stated value per share | $ 0.001 | $ 0.001 | $ 0.001 | ||
Preferred stock, shares issued | 0 | 0 | 0 | ||
Conversion of Units of Limited Liability Company [Member] | |||||
Class of Stock [Line Items] | |||||
Common stock member interests converted | 108,162,741 | ||||
Conversion of Membership Interests in Limited Liability Company [Member] | |||||
Class of Stock [Line Items] | |||||
Common stock member interests converted | 108,162,741 | ||||
Common Class A [Member] | |||||
Class of Stock [Line Items] | |||||
Shares issued during period | 38,237,500 | 38,237,500 | |||
Common stock, shares authorized | 1,100,000,000 | 1,100,000,000 | 1,100,000,000 | ||
Common stock par or stated value per share | $ 0.001 | $ 0.001 | $ 0.001 | ||
Common stock, shares issued | 121,566,577 | 121,566,577 | 75,093,778 | ||
Common stock, shares outstanding | 121,566,577 | 121,566,577 | 75,093,778 | ||
Common Class A [Member] | Conversion of Units of Limited Liability Company [Member] | |||||
Class of Stock [Line Items] | |||||
Common stock member interests converted | 75,093,778 | ||||
Common Class A [Member] | Conversion of Profit Interests [Member] | |||||
Class of Stock [Line Items] | |||||
Common stock member interests converted | 2,703,243 | ||||
Common Class A [Member] | Conversion of Membership Interests in Limited Liability Company [Member] | |||||
Class of Stock [Line Items] | |||||
Common stock member interests converted | 75,093,778 | ||||
Common Class B [Member] | |||||
Class of Stock [Line Items] | |||||
Common stock, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 | ||
Common stock par or stated value per share | $ 0.001 | $ 0.001 | $ 0.001 | ||
Common stock, shares issued | 33,068,963 | 33,068,963 | 33,068,963 | ||
Common stock, shares outstanding | 33,068,963 | 33,068,963 | 33,068,963 | ||
Common Class B [Member] | Conversion of Units of Limited Liability Company [Member] | |||||
Class of Stock [Line Items] | |||||
Common stock member interests converted | 33,068,963 | ||||
Common Class B [Member] | Conversion of Membership Interests in Limited Liability Company [Member] | |||||
Class of Stock [Line Items] | |||||
Common stock member interests converted | 33,068,963 | ||||
Class A Restricted Stock [Member] | Conversion of Profit Interests [Member] | |||||
Class of Stock [Line Items] | |||||
Common stock member interests converted | 5,532,166 | ||||
IPO [Member] | |||||
Class of Stock [Line Items] | |||||
Shares issued during period | 38,237,500 | ||||
Shares issued price | $ 23 | ||||
IPO [Member] | Common Class A [Member] | |||||
Class of Stock [Line Items] | |||||
Shares issued during period | 38,237,500 | ||||
Over-Allotment Option [Member] | |||||
Class of Stock [Line Items] | |||||
Shares issued during period | 4,987,500 | ||||
Employee Stock [Member] | Common Class A [Member] | |||||
Class of Stock [Line Items] | |||||
Common stock shares reserved for future issuance | 4,214,576 | 4,214,576 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) $ in Thousands | Jun. 30, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock based compensation expenses | $ 18,788 | $ 737 | $ 20,169 | $ 2,600 | |
Income tax benefit stock based compensation expenses | 1,600 | 0 | 1,600 | 0 | |
Unvested stock compensation not recognised | $ 136,300 | 136,300 | $ 136,300 | ||
Unvested stock awards weighted average remaining period of recognition | 2 years 8 months 12 days | ||||
Selling, General and Administrative Expenses [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share based compensation by share based payment arrangement incremental compensation | 8,600 | ||||
Stock based compensation expenses | $ 18,800 | $ 700 | $ 20,200 | $ 2,600 | |
2020 Omnibus Incentive Compensation Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Maximum number of shares authorised under share based compensation plan | 15,555,403 | 15,555,403 | 15,555,403 | ||
Common stock shares reserved for future issuance | 4,981,836 | 4,981,836 | 4,981,836 | ||
Number of options granted under stock based payment arrangement | 199,453 | ||||
Stock based compensation period of expiry of stock options | 10 years | ||||
2020 Omnibus Incentive Compensation Plan [Member] | Service Based Stock Options [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share based payment lock in description | 180-day | ||||
2020 Omnibus Incentive Compensation Plan [Member] | Minimum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share based compensation by share based payment arrangement vesting period | 1 year | ||||
2020 Omnibus Incentive Compensation Plan [Member] | Maximum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share based compensation by share based payment arrangement vesting period | 4 years |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Restricted Stock Awards Granted (Detail) | 3 Months Ended |
Jun. 30, 2020 | |
Performance Shares And Restricted Awards [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate | 0.75% |
Expected volatility | 40.00% |
Expected term (in years) | 6 months |
Expected dividend yield | 0.00% |
Service Based Stock Options And Restricted Stock Awards [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected volatility | 35.00% |
Expected dividend yield | 0.00% |
Service Based Stock Options And Restricted Stock Awards [Member] | Minimum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate | 0.47% |
Expected term (in years) | 6 years 3 months |
Service Based Stock Options And Restricted Stock Awards [Member] | Maximum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate | 0.56% |
Expected term (in years) | 7 years |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of Stock Option Activities (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended |
Jun. 30, 2020 | |
Performance Shares [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Option, Outstanding | 0 |
Number of Option, Granted | 1,706,098 |
Number of Option, Outstanding | 1,706,098 |
Weighted Average Exercise Price Per Share, Outstanding | $ 0 |
Weighted Average Exercise Price Per Share, Granted | 23 |
Weighted Average Exercise Price Per Share, Outstanding | $ 23 |
Weighted Average Remaining Contract Term, Outstanding | 10 years |
Weighted Average Remaining Contract Term, Granted | 10 years |
Weighted Average Intrinsic Value, Outstanding | $ 14,372 |
Weighted Average Intrinsic Value, Granted | $ 14,372 |
Service Based Stock Option Activity [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Option, Outstanding | 0 |
Number of Option, Granted | 3,388,557 |
Number of Option, Outstanding | 3,388,557 |
Number of Option, Vested and exercisable | 928,648 |
Weighted Average Exercise Price Per Share, Outstanding | $ 0 |
Weighted Average Exercise Price Per Share, Granted | 23 |
Weighted Average Exercise Price Per Share, Outstanding | 23 |
Weighted Average Exercise Price Per Share, Vested and exercisable | $ 23 |
Weighted Average Remaining Contract Term, Outstanding | 10 years |
Weighted Average Remaining Contract Term, Granted | 10 years |
Weighted Average Remaining Contract Term, Vested and exercisable | 10 years |
Weighted Average Intrinsic Value, Outstanding | $ 39,510 |
Weighted Average Intrinsic Value, Granted | 39,510 |
Weighted Average Intrinsic Value, Vested and exercisable | $ 7,294 |
Stock-Based Compensation - Su_3
Stock-Based Compensation - Summary of Stock Awards Activity Other Than Options (Detail) | 3 Months Ended |
Jun. 30, 2020$ / sharesshares | |
Performance Based Restricted Stock [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Shares, Outstanding and unvested | shares | |
Number of Shares, Granted | shares | 3,884,615 |
Number of Shares, Outstanding and unvested | shares | 3,884,615 |
Weighted Average Grant Date Fair Value, Outstanding and unvested | $ / shares | |
Weighted Average Grant Date Fair Value, Granted | $ / shares | 89,032 |
Weighted Average Grant Date Fair Value, Outstanding and unvested | $ / shares | $ 89,032 |
Service Based Restricted Stock [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Shares, Outstanding and unvested | shares | |
Number of Shares, Granted | shares | 1,647,428 |
Number of Shares, Vested | shares | 53,132 |
Number of Shares, Outstanding and unvested | shares | 1,594,296 |
Weighted Average Grant Date Fair Value, Outstanding and unvested | $ / shares | |
Weighted Average Grant Date Fair Value, Granted | $ / shares | 5,571 |
Weighted Average Grant Date Fair Value, Vested | $ / shares | 147 |
Weighted Average Grant Date Fair Value, Outstanding and unvested | $ / shares | $ 5,424 |
Earnings Per Share - Summary of
Earnings Per Share - Summary of Computation of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Numerator: | ||||
Net income (loss) | $ (52,116) | $ 1,511 | $ (57,874) | $ (19,276) |
Net income (loss) attributable to common stockholders - basic and diluted | $ (52,116) | $ 1,511 | $ (57,874) | $ (19,276) |
Denominator: | ||||
Weighted-average shares of common stock - basic and diluted | 118,738,357 | 108,162,741 | 113,525,537 | 108,162,741 |
Net income (loss) per share attributable to common stockholders: | $ (52,116) | $ 1,511 | $ (57,874) | $ (19,276) |
Net income (loss) attributable to common stockholders - basic and diluted | $ (0.44) | $ 0.01 | $ (0.51) | $ (0.18) |
Earnings Per Share - Summary _2
Earnings Per Share - Summary of Antidilutive Securities Excluded From Computation of Earnings Per Share (Detail) - shares | 3 Months Ended | 9 Months Ended |
Jun. 30, 2020 | Jun. 30, 2020 | |
Restricted Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,143,949 | 381,316 |
Stock Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 992,632 | 330,877 |
Restricted Stock Units [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 32,877 | 10,959 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax reconcilation percentage | 4.80% | 13.80% | 6.80% | 20.00% |
Commitments And Contingencies -
Commitments And Contingencies - Additional Information (Detail) - USD ($) $ in Millions | Jun. 18, 2018 | Jun. 30, 2020 | Jun. 30, 2019 | Mar. 31, 2018 | Jun. 30, 2020 | Jun. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 |
Loss Contingencies [Line Items] | ||||||||
Finance lease right of use asset | $ 9.2 | $ 9.2 | $ 9.2 | |||||
Finance lease incremental borrowing rate | 8.40% | 8.40% | ||||||
Lease rental expenses | $ 0.4 | $ 0.5 | $ 1.1 | $ 1.4 | ||||
Future minimum sublease income receivable | 0.9 | 0.9 | ||||||
Litigation settlement amount | $ 5.8 | $ 7.5 | ||||||
Insurance Claims [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Litigation claims received | 7.7 | |||||||
Litigation settlment income | $ 0 | $ 7.7 | ||||||
Workmen Compensation [Member] | Minimum [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Estimate Of Possible Loss | 0.4 | |||||||
Workmen Compensation [Member] | Maximum [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Estimate Of Possible Loss | $ 0.5 | |||||||
Versatex [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Loss Contingency Accrual | $ 5.8 | |||||||
Leasehold Improvements [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Lease improvements expenditure incurred | $ 3.4 |
Commitments And Contingencies_2
Commitments And Contingencies - Summary of Future Minimum Annual Payments Under Noncancelable Leases (Detail) $ in Thousands | Jun. 30, 2020USD ($) |
Disclosure Of Future Minimum Lease Payments [Line Items] | |
Capital Remaining period of 2020 | $ 405 |
2021 | 1,595 |
2022 | 1,439 |
2023 | 1,026 |
2024 | 648 |
Thereafter | 2,789 |
Total Payments | 7,902 |
Less amount representing interest | (4,006) |
Present value of minimum capital lease payments | 3,896 |
Finance Remaining period of 2020 | 192 |
2021 | 778 |
2022 | 788 |
2023 | 808 |
2024 | 827 |
Thereafter | 4,607 |
Total Payments | 8,000 |
Operating Remaining period of 2020 | 446 |
2021 | 1,679 |
2022 | 1,303 |
2023 | 1,075 |
2024 | 709 |
Thereafter | 307 |
Total Payments | $ 5,519 |
Condensed Financial Informati_3
Condensed Financial Information of Registrant (Parent Company Only) - Schedule of Condensed Balance Sheets (Detail) - USD ($) $ in Thousands | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 |
Non-current assets: | ||||||
Total assets | $ 1,930,322 | $ 1,788,263 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY: | ||||||
Total liabilities | 660,809 | 1,298,240 | ||||
Stockholders' equity: | ||||||
Preferred stock, $0.001 par value; 1,000,000 shares authorized and no shares issued and outstanding at June 30, 2020 and September 30, 2019, respectively | 0 | |||||
Additional paid-in capital | 1,488,474 | 652,493 | ||||
Accumulated deficit | (219,116) | (162,578) | ||||
Total stockholders' equity | 1,269,513 | $ 485,406 | 490,023 | $ 490,355 | $ 488,133 | $ 505,553 |
Total liabilities and stockholders' equity | 1,930,322 | 1,788,263 | ||||
Parent Company [Member] | ||||||
Non-current assets: | ||||||
Investment in subsidiaries | 1,269,513 | 490,023 | ||||
Total non-current assets | 1,269,513 | 490,023 | ||||
Total assets | 1,269,513 | 490,023 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY: | ||||||
Total liabilities | ||||||
Stockholders' equity: | ||||||
Preferred stock, $0.001 par value; 1,000,000 shares authorized and no shares issued and outstanding at June 30, 2020 and September 30, 2019, respectively | ||||||
Additional paid-in capital | 1,488,474 | 652,493 | ||||
Accumulated deficit | (219,116) | (162,578) | ||||
Total stockholders' equity | 1,269,513 | 490,023 | ||||
Total liabilities and stockholders' equity | 1,269,513 | 490,023 | ||||
Common Class A [Member] | ||||||
Stockholders' equity: | ||||||
Common stock value | 122 | 75 | ||||
Total stockholders' equity | 122 | 75 | 75 | 75 | 75 | 75 |
Common Class A [Member] | Parent Company [Member] | ||||||
Stockholders' equity: | ||||||
Common stock value | 122 | 75 | ||||
Common Class B [Member] | ||||||
Stockholders' equity: | ||||||
Common stock value | 33 | 33 | ||||
Total stockholders' equity | 33 | $ 33 | 33 | $ 33 | $ 33 | $ 33 |
Common Class B [Member] | Parent Company [Member] | ||||||
Stockholders' equity: | ||||||
Common stock value | $ 33 | $ 33 |
Condensed Financial Informati_4
Condensed Financial Information of Registrant (Parent Company Only) - Schedule of Condensed Balance Sheets (Parenthetical) (Detail) - $ / shares | Jun. 30, 2020 | Sep. 30, 2019 |
Preferred stock, par value per share | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common Class A [Member] | ||
Common stock par or stated value per share | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 1,100,000,000 | 1,100,000,000 |
Common stock, shares issued | 121,566,577 | 75,093,778 |
Common stock, shares outstanding | 121,566,577 | 75,093,778 |
Common Class B [Member] | ||
Common stock par or stated value per share | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 33,068,963 | 33,068,963 |
Common stock, shares outstanding | 33,068,963 | 33,068,963 |
Parent Company [Member] | ||
Preferred stock, par value per share | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Parent Company [Member] | Common Class A [Member] | ||
Common stock par or stated value per share | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 1,100,000,000 | 1,100,000,000 |
Common stock, shares issued | 121,566,577 | 75,093,778 |
Common stock, shares outstanding | 121,566,577 | 75,093,778 |
Parent Company [Member] | Common Class B [Member] | ||
Common stock par or stated value per share | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 33,068,963 | 33,068,963 |
Common stock, shares outstanding | 33,068,963 | 33,068,963 |
Condensed Financial Informati_5
Condensed Financial Information of Registrant (Parent Company Only) - Schedule of Condensed Statements of Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Condensed Statement of Income Captions [Line Items] | ||||
Comprehensive income (loss) | $ (52,116) | $ 1,511 | $ (57,874) | $ (19,276) |
Parent Company [Member] | ||||
Condensed Statement of Income Captions [Line Items] | ||||
Net income (loss) of subsidiaries | (52,116) | 1,511 | (57,874) | (19,276) |
Net income (loss) of subsidiaries | (52,116) | 1,511 | (57,874) | (19,276) |
Comprehensive income (loss) | $ (52,116) | $ 1,511 | $ (57,874) | $ (19,276) |
Condensed Financial Informati_6
Condensed Financial Information of Registrant (Parent Company Only) - Additional Information (Detail) | Jun. 30, 2020 |
Parent Company [Member] | |
Condensed Statement of Income Captions [Line Items] | |
Minimum threshold percentage of restricted net assets | 25.00% |