Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 25, 2019 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 29, 2019 | |
Document Transition Report | false | |
Entity File Number | 000-03922 | |
Entity Incorporation, State or Country Code | IN | |
Entity Tax Identification Number | 35-1057796 | |
Entity Address, Address Line One | 107 WEST FRANKLIN STREET, P.O. Box 638 | |
Entity Address, City or Town | ELKHART, | |
Entity Address, State or Province | IN | |
Entity Address, Postal Zip Code | 46515 | |
City Area Code | 574 | |
Local Phone Number | 294-7511 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Title of 12(b) Security | Common Stock, no par value | |
Trading Symbol | PATK | |
Security Exchange Name | NASDAQ | |
Entity Common Stock, Shares Outstanding (in shares) | 23,764,458 | |
Entity Registrant Name | PATRICK INDUSTRIES INC | |
Entity Central Index Key | 0000076605 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current Assets | ||
Cash and cash equivalents | $ 116,712 | $ 6,895 |
Trade and other receivables, net | 129,837 | 82,499 |
Inventories | 262,558 | 272,898 |
Prepaid expenses and other | 18,897 | 22,875 |
Total current assets | 528,004 | 385,167 |
Property, plant and equipment, net | 179,884 | 177,145 |
Operating lease right-of-use assets | 81,064 | 0 |
Goodwill | 308,358 | 281,734 |
Intangible assets, net | 350,216 | 382,982 |
Deferred financing costs, net | 3,130 | 3,688 |
Other non-current assets | 474 | 515 |
TOTAL ASSETS | 1,451,130 | 1,231,231 |
Current Liabilities | ||
Current maturities of long-term debt | 5,000 | 8,750 |
Current operating lease liabilities | 25,990 | 0 |
Accounts payable | 117,862 | 89,803 |
Accrued liabilities | 53,423 | 59,202 |
Total current liabilities | 202,275 | 157,755 |
Long-term debt, less current maturities, net | 670,928 | 621,751 |
Long-term operating lease liabilities | 55,553 | 0 |
Deferred tax liabilities, net | 19,735 | 22,699 |
Other long-term liabilities | 22,701 | 20,272 |
TOTAL LIABILITIES | 971,192 | 822,477 |
SHAREHOLDERS’ EQUITY | ||
Common stock | 169,220 | 161,436 |
Additional paid-in-capital | 25,020 | 25,124 |
Accumulated other comprehensive loss | (5,953) | (2,680) |
Retained earnings | 291,651 | 224,874 |
TOTAL SHAREHOLDERS’ EQUITY | 479,938 | 408,754 |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ 1,451,130 | $ 1,231,231 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
NET SALES | $ 566,186 | $ 575,139 | $ 1,787,622 | $ 1,731,850 |
Cost of goods sold | 461,851 | 468,484 | 1,464,078 | 1,412,649 |
GROSS PROFIT | 104,335 | 106,655 | 323,544 | 319,201 |
Operating Expenses: | ||||
Warehouse and delivery | 23,917 | 19,789 | 74,228 | 55,540 |
Selling, general and administrative | 33,817 | 33,284 | 104,403 | 98,999 |
Amortization of intangible assets | 9,191 | 8,873 | 26,448 | 25,140 |
Total operating expenses | 66,925 | 61,946 | 205,079 | 179,679 |
OPERATING INCOME | 37,410 | 44,709 | 118,465 | 139,522 |
Interest expense, net | 8,603 | 7,338 | 26,222 | 17,980 |
Income before income taxes | 28,807 | 37,371 | 92,243 | 121,542 |
Income taxes | 7,490 | 9,437 | 22,661 | 28,680 |
NET INCOME | $ 21,317 | $ 27,934 | $ 69,582 | $ 92,862 |
BASIC NET INCOME PER COMMON SHARE (in dollars per share) | $ 0.92 | $ 1.17 | $ 3.02 | $ 3.82 |
DILUTED NET INCOME PER COMMON SHARE (in dollars per share) | $ 0.92 | $ 1.15 | $ 2.99 | $ 3.77 |
Weighted average shares outstanding - Basic (in shares) | 23,076 | 23,894 | 23,073 | 24,279 |
Weighted average shares outstanding - Diluted (in shares) | 23,273 | 24,232 | 23,279 | 24,619 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Statement of Other Comprehensive Income [Abstract] | ||||
Net income | $ 21,317 | $ 27,934 | $ 69,582 | $ 92,862 |
Other comprehensive (loss) income, net of tax: | ||||
Unrealized (loss) gain of hedge derivatives | (240) | 80 | (3,225) | 80 |
Foreign currency translation gain (loss) | 19 | (28) | (48) | (31) |
Total other comprehensive (loss) gain | (221) | 52 | (3,273) | 49 |
COMPREHENSIVE INCOME | $ 21,096 | $ 27,986 | $ 66,309 | $ 92,911 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in- Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings |
Balance at Dec. 31, 2017 | $ 370,685 | $ 163,196 | $ 8,243 | $ 66 | $ 199,180 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 92,862 | 92,862 | |||
Other comprehensive income (loss), net of tax | 49 | 49 | |||
Stock repurchases under buyback program | (75,028) | (8,266) | (418) | 0 | (66,344) |
Shares used to pay taxes on stock grants | 3 | 3 | |||
Issuance of shares upon exercise of common stock options | (2,919) | (2,919) | |||
Stock-based compensation expense | 10,911 | 10,911 | |||
Purchase of convertible notes hedges | (31,481) | (31,481) | |||
Proceeds from sale of warrants | 18,147 | 18,147 | |||
Equity component of convertible notes issuance | 30,989 | 30,989 | |||
Balance at Sep. 30, 2018 | 414,218 | 162,925 | 25,480 | 115 | 225,698 |
Balance at Jul. 01, 2018 | 403,620 | 161,648 | 25,552 | 63 | 216,357 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 27,934 | 0 | 27,934 | ||
Other comprehensive income (loss), net of tax | 52 | 0 | 52 | ||
Stock repurchases under buyback program | (20,943) | (2,237) | (113) | 0 | (18,593) |
Shares used to pay taxes on stock grants | 9 | 9 | |||
Issuance of shares upon exercise of common stock options | (37) | (37) | |||
Stock-based compensation expense | 3,542 | 3,542 | |||
Equity component of convertible notes issuance | 41 | 41 | |||
Balance at Sep. 30, 2018 | 414,218 | 162,925 | 25,480 | 115 | 225,698 |
Balance at Dec. 31, 2018 | 408,754 | 161,436 | 25,124 | (2,680) | 224,874 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 69,582 | 69,582 | |||
Other comprehensive income (loss), net of tax | (3,273) | (3,273) | |||
Stock repurchases under buyback program | (3,583) | (674) | (104) | (2,805) | |
Shares used to pay taxes on stock grants | (3,587) | (3,587) | |||
Issuance of shares upon exercise of common stock options | 6 | 6 | |||
Stock-based compensation expense | 12,039 | 12,039 | |||
Balance at Sep. 30, 2019 | 479,938 | 169,220 | 25,020 | (5,953) | 291,651 |
Balance at Jun. 30, 2019 | 458,617 | 166,086 | 25,124 | (5,732) | 273,139 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 21,317 | 21,317 | |||
Other comprehensive income (loss), net of tax | (221) | (221) | |||
Stock repurchases under buyback program | (3,583) | (674) | (104) | (2,805) | |
Shares used to pay taxes on stock grants | (59) | (59) | 0 | 0 | |
Stock-based compensation expense | 3,867 | 3,867 | |||
Balance at Sep. 30, 2019 | $ 479,938 | $ 169,220 | $ 25,020 | $ (5,953) | $ 291,651 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $ 69,582 | $ 92,862 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 46,449 | 39,893 |
Stock-based compensation expense | 12,039 | 10,911 |
Amortization of convertible notes debt discount | 5,123 | 4,495 |
Deferred income taxes | (794) | (1,088) |
Other | 235 | (2,739) |
Change in operating assets and liabilities, net of acquisitions of businesses: | ||
Trade receivables | (44,359) | (29,295) |
Inventories | 9,084 | (13,238) |
Prepaid expenses and other assets | 4,319 | 4,299 |
Accounts payable, accrued liabilities and other | 20,355 | 21,313 |
Net cash provided by operating activities | 122,033 | 127,413 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Capital expenditures | (22,227) | (26,073) |
Proceeds from sale of property, equipment and other investing activities | 4,509 | 5,125 |
Business acquisitions, net of cash acquired | (22,350) | (290,052) |
Net cash used in investing activities | (40,068) | (311,000) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Term debt borrowings | 7,500 | 36,981 |
Term debt repayments | (3,750) | (6,441) |
Borrowings on revolver | 648,460 | 954,535 |
Repayments on revolver | (905,792) | (877,931) |
Stock repurchases under buyback program | (3,583) | (75,028) |
Proceeds from issuance of senior notes | 300,000 | 0 |
Proceeds from convertible notes offering | 0 | 172,500 |
Purchase of convertible notes hedges | 0 | (31,481) |
Proceeds from sale of warrants | 0 | 18,147 |
Payments related to vesting of stock-based awards, net of shares tendered for taxes | (3,359) | (2,659) |
Payment of deferred financing costs | (7,214) | (7,485) |
Payment of contingent consideration from a business acquisition | (4,416) | 0 |
Other financing activities | 6 | (12) |
Net cash provided by financing activities | 27,852 | 181,126 |
Increase (decrease) in cash and cash equivalents | 109,817 | (2,461) |
Cash and cash equivalents at beginning of year | 6,895 | 2,767 |
Cash and cash equivalents at end of period | $ 116,712 | $ 306 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | 1. BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements of Patrick Industries, Inc. (“Patrick”, the “Company”, "we", "our") contain all adjustments (consisting of normal recurring adjustments) that we believe are necessary to present fairly the Company’s financial position as of September 29, 2019 and December 31, 2018 , and its results of operations for the three and nine months ended September 29, 2019 and September 30, 2018 and cash flows for the nine months ended September 29, 2019 and September 30, 2018. Patrick’s unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission and in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to those rules or regulations. Certain immaterial reclassifications have been made to the prior period presentation to conform to the current period presentation. For a description of significant accounting policies used by the Company in the preparation of its consolidated financial statements, please refer to Note 2 to Notes to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 . The December 31, 2018 condensed consolidated statement of financial position data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. Operating results for the third quarter and nine months ended September 29, 2019 are not necessarily indicative of the results to be expected for the full year ending December 31, 2019 . The Company maintains its financial records on the basis of a fiscal year ending on December 31, with the fiscal quarters spanning approximately thirteen weeks. The first quarter ends on the Sunday closest to the end of the first thirteen-week period. The second and third quarters are thirteen weeks in duration and the fourth quarter is the remainder of the year. The third quarter of fiscal year 2019 ended on September 29, 2019 and the third quarter of fiscal year 2018 ended on September 30, 2018. In preparation of Patrick’s condensed consolidated financial statements as of and for the three and nine months ended September 29, 2019 , management evaluated all material subsequent events or transactions that occurred after the balance sheet date through the date of issuance of the Form 10-Q that required recognition or disclosure in the condensed consolidated financial statements. |
RECENTLY ISSUED ACCOUNTING PRON
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | 2. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, " Leases (Topic 842) ", which requires in part that an entity recognize lease assets and lease liabilities on its statement of financial position for leases that were previously classified as operating leases under U.S. GAAP. In July 2018, the FASB issued ASU 2018-11, " Leases (Topic 842): Targeted Improvements ", which offered practical expedient alternatives to the modified retrospective adoption of Accounting Standards Codification (“ASC”) 842. The Company adopted ASC 842 effective January 1, 2019, and recorded approximately $80 million in lease right-of-use assets and corresponding lease liabilities, with no material impact on the condensed consolidated statement of shareholders' equity, income, comprehensive income or cash flows. See Note 12 for further information. Goodwill Impairment In January 2017, the FASB issued ASU 2017-04, " Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ". This ASU simplifies the accounting for goodwill impairments by eliminating step two from the goodwill impairment test. The standard requires that the impairment loss be measured as the excess of the reporting unit's carrying amount over its fair value. It eliminates the second step that requires the impairment to be measured between the implied value of a reporting unit's goodwill and its carrying value. The standard is effective for annual and any interim impairment tests for periods beginning after December 15, 2019 and early adoption is permitted. The Company is currently evaluating the effect of adopting this new accounting standard, which will depend on the outcomes of future goodwill impairment tests. Credit Losses In June 2016, the FASB issued ASU 2016-13 “ Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments ”, which amends certain provisions of ASC 326, “Financial Instruments-Credit Loss”. The ASU changes the impairment model for most financial assets and certain other instruments. For trade and other receivables, held to maturity debt securities, loans and other instruments, entities will be required to use a new forward-looking “expected loss” model that generally will result in the earlier recognition of allowances for losses. Additionally, entities will be required to disclose more information with respect to credit quality indicators, including information used to track credit quality by year of origination for most financing receivables. The ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years and will be applied as a cumulative effect adjustment to retained earnings as of the beginning of the first reporting period for which the guidance is effective. The Company does not expect that the adoption of the ASU will have a material effect on its condensed consolidated financial statements. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | 3. REVENUE RECOGNITION In the following table, revenue from contracts with customers, net of intersegment sales, is disaggregated by market type and by reportable segments, consistent with how the Company believes the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors: Third Quarter Ended September 29, 2019 (thousands) Manufacturing Distribution Total Reportable Segments Market type: Recreational Vehicle $ 218,706 $ 91,313 $ 310,019 Manufactured Housing 44,159 64,959 109,118 Industrial 64,541 7,566 72,107 Marine 72,306 2,636 74,942 Total $ 399,712 $ 166,474 $ 566,186 Nine Months Ended September 29, 2019 (thousands) Manufacturing Distribution Total Reportable Segments Market type: Recreational Vehicle $ 694,261 $ 299,115 $ 993,376 Manufactured Housing 131,101 193,975 325,076 Industrial 188,292 25,149 213,441 Marine 246,017 9,712 255,729 Total $ 1,259,671 $ 527,951 $ 1,787,622 Third Quarter Ended September 30, 2018 (thousands) Manufacturing Distribution Total Reportable Segments Market type: Recreational Vehicle $ 262,936 $ 91,637 $ 354,573 Manufactured Housing 41,428 26,334 67,762 Industrial 63,429 8,906 72,335 Marine 77,421 3,048 80,469 Total $ 445,214 $ 129,925 $ 575,139 ` Nine Months Ended September 30, 2018 (thousands) Manufacturing Distribution Total Reportable Segments Market type: Recreational Vehicle $ 847,944 $ 280,082 $ 1,128,026 Manufactured Housing 124,406 75,946 200,352 Industrial 186,890 25,701 212,591 Marine 184,848 6,033 190,881 Total $ 1,344,088 $ 387,762 $ 1,731,850 The following table provides information about contract balances: (thousands) September 29, 2019 December 31, 2018 Receivables, which are included in trade and other receivables, net $ 128,672 $ 74,196 Contract liabilities $ 2,692 $ 2,642 Significant changes in the contract liabilities balance during the nine months ended September 29, 2019 are as follows: (thousands) Contract Liabilities Revenue recognized that was included in the contract liability balance at the beginning of the period $ (1,006 ) Increases due to cash received, excluding amounts recognized as revenue during the period $ 1,056 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | 5. GOODWILL AND INTANGIBLE ASSETS Changes in the carrying amount of goodwill for the nine months ended September 29, 2019 by segment are as follows: (thousands) Manufacturing Distribution Total Balance - December 31, 2018 $ 235,345 $ 46,389 $ 281,734 Acquisitions 7,177 — 7,177 Adjustments to preliminary purchase price allocations 8,428 11,019 19,447 Balance - September 29, 2019 $ 250,950 $ 57,408 $ 308,358 Intangible assets, net consist of the following as of September 29, 2019 and December 31, 2018 : (thousands) September 29, Weighted Average Useful Life December 31, Weighted Average Useful Life Customer relationships $ 348,947 10.1 $ 366,228 10.1 Non-compete agreements 16,405 4.9 19,159 4.9 Patents 16,338 14.6 1,048 8.9 Trademarks 80,786 Indefinite 82,358 Indefinite 462,476 468,793 Less: accumulated amortization (112,260 ) (85,811 ) Intangible assets, net $ 350,216 $ 382,982 Changes in the carrying value of intangible assets for the nine months ended September 29, 2019 by segment are as follows: (thousands) Manufacturing Distribution Total Balance - December 31, 2018 $ 304,485 $ 78,497 $ 382,982 Acquisitions 8,329 — 8,329 Amortization (21,808 ) (4,640 ) (26,448 ) Adjustments to preliminary purchase price allocations (12,023 ) (2,624 ) (14,647 ) Balance - September 29, 2019 $ 278,983 $ 71,233 $ 350,216 |
INVENTORIES
INVENTORIES | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | 4. INVENTORIES Inventories consist of the following: (thousands) September 29, 2019 December 31, 2018 Raw materials $ 172,775 $ 164,408 Work in process 14,235 12,829 Finished goods 25,403 28,341 Less: reserve for inventory obsolescence (10,258 ) (5,354 ) Total manufactured goods, net 202,155 200,224 Materials purchased for resale (distribution products) 62,616 74,914 Less: reserve for inventory obsolescence (2,213 ) (2,240 ) Total materials purchased for resale (distribution products), net 60,403 72,674 Total inventories $ 262,558 $ 272,898 |
ACQUISITIONS
ACQUISITIONS | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
ACQUISITIONS | 6. ACQUISITIONS General In addition to the acquisitions completed in 2018 as discussed below, the Company completed two acquisitions in the first nine months of 2019. For the third quarter and first nine months ended September 29, 2019, revenue and operating income included in the Company's condensed consolidated statements of income related to the 2019 acquisitions were immaterial. For the third quarter ended September 30, 2018, revenue and operating income of approximately $82.4 million and $8.8 million , respectively, were included in the Company’s condensed consolidated statements of income relating to the businesses acquired in the first nine months of 2018 . The first nine months of 2018 included revenue and operating income of approximately $160.0 million and $17.3 million , respectively, related to these acquisitions. Acquisition-related costs in the aggregate associated with the businesses acquired in the first nine months of 2019 and 2018 were immaterial. Contingent Consideration In connection with certain acquisitions, if certain financial targets for the acquired businesses are achieved, the Company will be required to pay additional cash consideration. The Company has recorded a liability for the fair value of the contingent consideration related to each of these acquisitions as part of the initial purchase price based on the present value of the expected future cash flows and the probability of future payments. As required, the liabilities for the contingent consideration associated with each of these acquisitions will be remeasured quarterly at fair value. As of September 29, 2019 , the aggregate fair value of the estimated contingent consideration payments was $12.0 million, $4.5 million of which is included in the line item "Accrued liabilities" and $7.5 million is included in “Other long-term liabilities” on the condensed consolidated statement of financial position. At December 31, 2018, the aggregate fair value of the estimated contingent consideration payments was $13.8 million , $4.4 million of which was included in the line item "Accrued liabilities" and $9.4 million was included in "Other long-term liabilities". The liabilities for contingent consideration expire at various dates through December 2023. The contingent consideration arrangements are subject to a maximum payment amount of up to $17.2 million in the aggregate. In the first quarter of 2019, the Company made cash payments of approximately $4.4 million related to contingent consideration liabilities, recording a corresponding reduction to accrued liabilities. 2019 Acquisitions The Company completed two acquisitions in the third quarter and first nine months ended September 29, 2019, including the previously announced acquisition of G.G. Schmitt & Sons, Inc. ("G.G. Schmitt"), a Sarasota, Florida-based designer and manufacturer of customized hardware and structural components for the marine industry. The total initial consideration for these acquisitions was $21.1 million, plus subsequent contingent consideration payments over a one -year period based on future performance in connection with the acquisition of G.G. Schmitt. The preliminary purchase price allocation is subject to final review and approval, and thus all required purchase accounting adjustments are subject to change within the measurement period as the Company finalizes its fair value estimates. The results of operations for these acquisitions are included in the Company’s condensed consolidated financial statements and the Manufacturing operating segment from their respective dates of acquisition. 2018 Acquisitions Metal Moulding Corporation ( “ MMC” ) In February 2018, the Company completed the acquisition of the business and certain assets of Madison, Tennessee-based MMC, a manufacturer of custom metal fabricated products, primarily for the marine market, including hinges, arm rests, brackets, panels and trim, as well as plastic products including boxes, inlay tables, steps, and related components, for a net initial purchase price of $19.9 million , plus contingent consideration payments over a one -year period based on future performance. The results of operations for MMC are included in the Company’s condensed consolidated financial statements and the Manufacturing operating segment from the date of acquisition. Aluminum Metals Company, LLC (“AMC” ) In February 2018, the Company completed the acquisition of the business and certain assets of Elkhart, Indiana-based AMC, a manufacturer of aluminum products including coil, fabricated sheets and extrusions, in addition to roofing products, primarily for the recreational vehicle (“RV”), industrial, and marine markets, for a net purchase price of $17.8 million . The results of operations for AMC are included in the Company’s condensed consolidated financial statements and the Manufacturing operating segment from the date of acquisition. IMP Holdings, LLC d/b/a Indiana Marine Products (“IMP”) In March 2018, the Company completed the acquisition of the business and certain assets of Angola, Indiana-based IMP, a manufacturer of fully-assembled helm assemblies, including electrical wiring harnesses, dash panels, instrumentation and gauges, and other products primarily for the marine market, for a net initial purchase price of $18.6 million , plus subsequent contingent consideration payments over a three -year period based on future performance. The results of operations for IMP are included in the Company’s condensed consolidated financial statements and the Manufacturing operating segment from the date of acquisition. Collins & Company, Inc. (“Collins”) In March 2018, the Company completed the acquisition of the business and certain assets of Bristol, Indiana-based Collins, a distributor of appliances, trim products, fuel systems, flooring, tile, and other related building materials primarily to the RV market as well as the housing and industrial markets, for a net purchase price of $40.0 million . The results of operations for Collins are included in the Company’s condensed consolidated financial statements and the Distribution operating segment from the date of acquisition. Changes from previously reported estimated amounts as of December 31, 2018 include a decrease to intangible assets of $3.6 million and a $3.6 million offsetting increase to goodwill. There was no material impact to the condensed consolidated statement of income related to these changes in the period in which the purchase price allocation and all purchase accounting adjustments were finalized. Dehco, Inc. (“Dehco”) In April 2018, the Company completed the acquisition of Dehco, a distributor and manufacturer of flooring, kitchen and bath products, adhesives and sealants, electronics, appliances and accessories, LP tanks, and other related building materials, primarily for the RV market as well as the manufactured housing (“MH”), marine and other industrial markets, for a net purchase price of $52.8 million . Dehco has operating facilities in Indiana, Oregon, Pennsylvania and Alabama. The results of operations for Dehco are included in the Company’s condensed consolidated financial statements and the Manufacturing and Distribution operating segments from the date of acquisition. Changes from previously reported estimated amounts as of December 31, 2018 include a decrease to intangible assets of $0.3 million and a $0.3 million offsetting increase to goodwill. There was no material impact to the condensed consolidated statement of income related to these changes in the period in which the purchase price allocation and all purchase accounting adjustments were finalized. Dowco, Inc. (“Dowco”) In May 2018, the Company completed the acquisition of Dowco, a designer and manufacturer of custom designed boat covers and bimini tops, full boat enclosures, mounting hardware, and other accessories and components for the marine market, for a net purchase price of $56.3 million , net of cash acquired. Dowco has operating facilities in Wisconsin, Missouri, Indiana, and Minnesota. The results of operations for Dowco are included in the Company’s condensed consolidated financial statements and the Manufacturing operating segment from the date of acquisition. Changes from previously reported estimated amounts as of December 31, 2018 include a $2.7 million increase to property, plant and equipment and a $3.3 million increase to goodwill, offset by a $5.9 million decrease to intangible assets and a $0.1 million increase in accounts payable and accrued liabilities. There was no material impact to the condensed consolidated statement of income related to these changes in the period in which the purchase price allocation and all purchase accounting adjustments were finalized. Marine Accessories Corporation (“MAC”) In June 2018, the Company acquired 100% of the membership interests of Maryville, Tennessee-based MAC, a manufacturer, distributor and aftermarket supplier of custom tower and canvas products and other related accessories to OEMs, dealers, retailers and distributors within the marine market, as well as direct to consumers, for a net purchase price of $57.0 million, net of cash acquired. The results of operations for MAC are included in the Company’s condensed consolidated financial statements and the Manufacturing and Distribution operating segments from the date of acquisition. Changes from previously reported estimated amounts as of December 31, 2018 include a $6.5 million decrease to intangible assets and a $1.0 million decrease to property, plant and equipment, offset by a decrease in deferred taxes and other liabilities of $1.1 million and an increase to goodwill of $6.4 million . There was no material impact to the condensed consolidated statement of income related to these changes in the period in which the purchase price allocation and all purchase accounting adjustments were finalized. Engineered Metals and Composites, Inc. (“EMC”) In September 2018, the Company completed the acquisition of the business and certain assets of West Columbia, South Carolina-based EMC, a designer and manufacturer of custom marine towers, frames, and other fabricated component products for OEMs in the marine industry, for a net initial purchase price of $25.3 million , plus contingent consideration over a three -month period based on future performance. The results of operations for EMC are included in the Company’s condensed consolidated financial statements and the Manufacturing operating segment from the date of acquisition. After adjusting for a $0.1 million increase to the estimated purchase price reported at December 31, 2018 due to a final working capital adjustment of $0.1 million , changes from previously reported estimated amounts as of December 31, 2018 include an increase to intangible assets of $1.6 million , an increase to inventory of $0.1 million , a decrease to property, plant and equipment of $0.8 million , a decrease to goodwill of $0.6 million and an increase to accounts payable of $0.2 million . There was no material impact to the condensed consolidated statement of income related to these changes in the period in which the purchase price allocation and all purchase accounting adjustments were finalized. LaSalle Bristol (“LaSalle”) In November 2018, the Company completed the acquisition of LaSalle, a distributor and manufacturer of plumbing, flooring, tile, lighting, air handling and building products for the MH, RV, and industrial markets, for a net purchase price of $51.1 million , net of cash acquired. LaSalle is headquartered in Elkhart, Indiana and operates a total of 15 manufacturing and distribution centers located in North America. The results of operations for LaSalle are included in the Company’s condensed consolidated financial statements and the Manufacturing and Distribution operating segments from the date of acquisition. The preliminary purchase price allocation is subject to final review and approval, and thus all required purchase accounting adjustments are subject to change within the measurement period as the Company finalizes its fair value estimates. After adjusting for a $1.1 million increase in the estimated purchase price reported at December 31, 2018 due to a final working capital adjustment of $1.1 million , changes from previously reported estimated amounts as of December 31, 2018 are related primarily to a $6.7 million decrease to inventory, offset partly by a $0.8 million increase to accounts receivable, a $0.3 million increase to prepaid expenses and a $6.7 million increase to goodwill. There was no material impact to the condensed consolidated statement of income related to these changes. The following table summarizes the fair values of the assets acquired and the liabilities assumed as of the date of the acquisition for the 2019 and 2018 acquisitions: (thousands) Trade receivables Inventories Property, plant and equipment Prepaid expenses & other Intangible assets Goodwill Less: Total liabilities Less: Deferred tax liability, net Total net assets acquired 2019 (1) $ 2,245 $ 5,296 $ 1,650 $ 133 $ 8,329 $ 7,177 $ 1,135 $ — $ 23,695 2018 MMC (2) $ 1,463 $ 2,324 $ 2,085 $ — $ 8,540 $ 7,668 $ 827 $ — $ 21,253 AMC 3,942 5,623 2,321 39 6,550 1,755 2,463 — 17,767 IMP (3) 1,943 4,286 1,463 13 12,920 8,803 2,930 — 26,498 Collins 2,830 9,903 1,188 5 18,430 10,237 2,586 — 40,007 Dehco 4,771 16,923 13,755 208 13,950 6,580 3,392 — 52,795 Dowco 4,053 4,498 8,566 1,240 28,435 13,732 4,178 — 56,346 MAC 3,054 6,815 7,003 284 26,190 25,669 4,226 7,767 57,022 EMC (4) 623 1,678 1,684 — 17,350 7,483 987 — 27,831 LaSalle 9,002 39,344 8,500 6,547 5,885 10,441 28,601 41 51,077 Other 473 329 280 13 1,667 919 195 — 3,486 2018 Totals $ 32,154 $ 91,723 $ 46,845 $ 8,349 $ 139,917 $ 93,287 $ 50,385 $ 7,808 $ 354,082 (1) Total net assets acquired for the 2019 acquisitions reflect the preliminary estimated liability of $2.6 million pertaining to the fair value of contingent consideration based on future performance relating to the acquisition of G.G. Schmitt. (2) Total net assets acquired for MMC reflect the preliminary estimated liability of $1.4 million pertaining to the fair value of the contingent consideration based on future performance. (3) Total net assets acquired for IMP reflect the preliminary estimated liability of $7.9 million pertaining to the fair value of the contingent consideration based on future performance. (4) Total net assets acquired for EMC reflect the preliminary estimated liability of $2.5 million pertaining to the fair value of the contingent consideration based on future performance. Pro Forma Information The following pro forma information for the third quarter and first nine months ended September 29, 2019 and September 30, 2018 assumes the 2019 and 2018 acquisitions occurred as of the beginning of the year immediately preceding each such acquisition. The pro forma information contains the actual operating results of the 2019 and 2018 acquisitions combined with the results prior to their respective acquisition dates, adjusted to reflect the pro forma impact of the acquisitions occurring as of the beginning of the year immediately preceding each such acquisition. The pro forma information includes financing and interest expense charges based on incremental borrowings incurred in connection with each transaction. In addition, the pro forma information includes amortization expense, in the aggregate, related to intangible assets acquired in connection with the transactions of $ 0.2 million and $ 0.5 million for the third quarter and nine months ended September 29, 2019, respectively, and $ 0.7 million and $ 5.7 million for the third quarter and nine months ended September 30, 2018 , respectively. Third Quarter Ended Nine Months Ended (thousands except per share data) September 29, 2019 September 30, 2018 September 29, 2019 September 30, 2018 Revenue $ 571,734 $ 660,873 $ 1,806,933 $ 2,049,540 Net income 21,346 30,377 70,067 103,502 Basic net income per common share 0.93 1.27 3.04 4.26 Diluted net income per common share 0.92 1.25 3.01 4.20 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | 7. STOCK-BASED COMPENSATION The Company recorded expense of $3.8 million and $3.5 million for the third quarter ended September 29, 2019 and September 30, 2018 , respectively, for its stock-based compensation plans in the condensed consolidated statements of income. For the first nine months of 2019 and 2018, the Company recorded $12.0 million and $10.9 million in stock-based compensation expense, respectively. The Board approved various share grants under the Company’s 2009 Omnibus Incentive Plan in the first nine months of 2019 totaling 376,186 shares in the aggregate. As of September 29, 2019 , there was approximately $23.8 million of total unrecognized compensation cost related to stock-based compensation arrangements granted under incentive plans. That cost is expected to be recognized over a weighted-average period of 18.0 months. |
NET INCOME PER COMMON SHARE
NET INCOME PER COMMON SHARE | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
NET INCOME PER COMMON SHARE | 8. NET INCOME PER COMMON SHARE Net income per common share calculated for the third quarter and nine months of 2019 and 2018 is as follows: Third Quarter Ended Nine Months Ended (thousands except per share data) September 29, 2019 September 30, 2018 September 29, 2019 September 30, 2018 Net income for basic and diluted per share calculation $ 21,317 $ 27,934 $ 69,582 $ 92,862 Weighted average common shares outstanding - basic 23,076 23,894 23,073 24,279 Effect of potentially dilutive securities 197 338 206 340 Weighted average common shares outstanding - diluted 23,273 24,232 23,279 24,619 Basic net income per common share $ 0.92 $ 1.17 $ 3.02 $ 3.82 Diluted net income per common share $ 0.92 $ 1.15 $ 2.99 $ 3.77 |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
DEBT | 9. DEBT A summary of total debt outstanding at September 29, 2019 and December 31, 2018 is as follows: (thousands) September 29, 2019 December 31, 2018 Long-term debt: Revolver $ 135,000 $ 392,332 Term Loan 100,000 96,250 Senior Notes 300,000 — Convertible Notes 172,500 172,500 Total long-term debt 707,500 661,082 Less: Convertible Notes debt discount, net (25,023 ) (30,125 ) Less: Senior Notes deferred financing costs, net (5,979 ) — Less: current maturities of long-term debt (5,000 ) (8,750 ) Less: Term Loan deferred financing costs, net (570 ) (456 ) Total long-term debt, less current maturities, net $ 670,928 $ 621,751 Senior Notes On September 17, 2019, the Company issued $300 million aggregate principal amount of 7.50% Senior Notes due 2027 (the “Senior Notes”). The Senior Notes were not registered under the Securities Act of 1933, as amended (the "Securities Act") and were offered under Rule 144A under the Securities Act. The Senior Notes will mature on October 15, 2027. Interest on the Senior Notes will accrue from September 17, 2019 and is payable semi-annually in cash in arrears on April 15 and October 15 of each year, beginning on April 15, 2020. The effective interest rate on the Senior Notes, which includes debt issuance costs, was 7.83% . In connection with the issuance of the Senior Notes, the Company incurred and capitalized as a reduction of the principal amount of the Senior Notes approximately $6.0 million in deferred financing costs which will be amortized using the effective interest rate over the term of the Senior Notes. The Senior Notes are senior unsecured indebtedness of the Company and are guaranteed by each of the Company’s subsidiaries that guarantee the obligations of the Company under the 2019 Credit Facility (as defined herein). The Company may redeem the Senior Notes, in whole or in part, at any time (a) prior to October 15, 2022, at a price equal to 100% of the principal amount thereof, plus the applicable premium described in the associated indenture and accrued and unpaid interest and (b) on or after October 15, 2022 at specified redemption prices set forth in the indenture, plus accrued and unpaid interest. In addition, prior to October 15, 2022, the Company may redeem, in one or more transactions, up to an aggregate of 40% of the original principal amount of the Senior Notes at a redemption price equal to 107.5% of the principal amount thereof, plus accrued and unpaid interest, with the net cash proceeds of one or more equity offerings. If the Company experiences specific kinds of changes of control, the Company must offer to repurchase all of the Senior Notes (unless otherwise redeemed) at a price equal to 101% of the aggregate principal amount thereof, plus accrued and unpaid interest. 2019 Credit Facility Simultaneously with the issuance of the Senior Notes, the Company entered into the Third Amended and Restated Credit Agreement (the “2019 Credit Agreement”). The 2019 Credit Agreement amended and extended the Company’s 2018 Credit Agreement (as defined herein) and consists of a $550 million senior secured revolver (the “2019 Revolver”) and a $100 million senior secured term loan (the “2019 Term Loan” and together with the 2019 Revolver, the “2019 Credit Facility”). The maturity date for borrowings under the 2019 Credit Agreement is September 17, 2024. Upon the satisfaction of certain conditions, and obtaining incremental commitments from its lenders, the Company may be able to increase the borrowing capacity of the 2019 Credit Facility by up to $250 million . Borrowings under the 2019 Credit Facility are secured by substantially all personal property assets of the Company and any domestic subsidiary guarantors. Pursuant to the 2019 Credit Agreement: • The 2019 Term Loan is due in consecutive quarterly installments in the following amounts: (i) beginning September 30, 2019, through and including June 30, 2021, $1,250,000 and (ii) beginning September 30, 2021, and each quarter thereafter, $2,500,000 , with the remaining balance due at maturity; • The interest rates for borrowings under the 2019 Revolver and the 2019 Term Loan are the Prime Rate or LIBOR plus a margin, which ranges from 0.00% to 0.75% for Prime Rate loans and from 1.00% to 1.75% for LIBOR loans depending on the Company’s consolidated total leverage ratio, as defined below. The Company is required to pay fees on unused but committed portions of the 2019 Revolver, which range from 0.15% to 0.225% ; and • Covenants include requirements as to a maximum consolidated total net leverage ratio ( 4.00 :1.00, increasing to 4.50 :1.00 in certain circumstances in connection with Company acquisitions) and a minimum consolidated fixed charge coverage ratio ( 1.50 :1.00) that are tested on a quarterly basis, a minimum liquidity requirement applicable during the six-month period preceding the maturity of the Convertible Notes (as defined herein), and other customary covenants. At September 29, 2019 , the Company had $100.0 million outstanding under the 2019 Term Loan under the LIBOR-based option, and borrowings outstanding under the 2019 Revolver of $135.0 million under the LIBOR-based option. The interest rate for incremental borrowings at September 29, 2019 was LIBOR plus 1.5% (or 3.54% ) for the LIBOR-based option. The fee payable on committed but unused portions of the 2019 Revolver was 0.20% at September 29, 2019 . Total cash interest paid for the third quarter of 2019 and 2018 was $6.9 million and $6.6 million , respectively, and $19.7 million and $12.2 million for the comparative nine month periods, respectively. 2018 Credit Facility See Note 9 of the Notes to Consolidated Financial Statements section of the Fiscal 2018 Form 10-K regarding the Company's previous credit agreement (the "2018 Credit Agreement") which established an $800 million revolving credit loan (the “2018 Revolver”) and a $100 million term loan (the “2018 Term Loan” and, together with the 2018 Revolver, the “2018 Credit Facility”). The 2018 Credit Agreement was amended by the 2019 Credit Agreement on September 17, 2019 as discussed above. The Company recorded a $0.7 million loss on extinguishment of debt in the third quarter of 2019 in connection with the replacement of the 2018 Credit Facility with the 2019 Credit Facility. Convertible Senior Notes In January 2018, the Company issued $172.5 million aggregate principal amount of 1.00% Convertible Senior Notes due 2023 (the “Convertible Notes”). See Note 9 of the Notes to Consolidated Financial Statements section of the Fiscal 2018 Form 10-K for further information. The effective interest rate on the Convertible Notes, which includes the non-cash interest expense of debt discount amortization and debt issuance costs, was 5.25% as of September 29, 2019 and December 31, 2018. The unamortized portion of the debt discount and debt issuance costs as of September 29, 2019 and December 31, 2018 was $25.0 million and $30.1 million |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 9 Months Ended |
Sep. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS | 10. DERIVATIVE FINANCIAL INSTRUMENTS Convertible Note Hedge Transactions and Warrant Transactions In January 2018, in connection with the Convertible Notes offering, the Company entered into privately negotiated convertible note hedge transactions (together, the “Convertible Note Hedge Transactions”) with each of Bank of America, N.A. and Wells Fargo Bank, National Association (together, the “Hedge Counterparties”), pursuant to which the Company acquired options to purchase the same number of shares of its common stock initially underlying the Convertible Notes. See Note 10 of the Notes to Consolidated Financial Statements section of the Fiscal 2018 Form 10-K for information regarding the Convertible Note Hedge Transactions. At the same time, the Company also entered into separate, privately negotiated warrant transactions (the “Warrant Transactions”) with each of the Hedge Counterparties, pursuant to which the Company sold warrants to purchase the same number of shares of its common stock initially underlying the Convertible Notes. See Note 10 of the Notes to Consolidated Financial Statements section of the Fiscal 2018 Form 10-K for further information regarding the Warrant Transactions. There have been no material changes to the terms of the Convertible Note Hedge Transactions or the Warrant Transactions during the nine month period ended September 29, 2019. As these transactions meet certain accounting criteria, the Convertible Note Hedges Transactions and Warrant Transactions are recorded in shareholders’ equity and are not accounted for as derivatives. Interest Rate Swaps The 2019 Credit Facility exposes the Company to risk associated with the variability in interest expense associated with fluctuations in LIBOR. To partially mitigate this risk, the Company entered into interest rate swaps on a portion of its 2018 Credit Facility, now amended by the 2019 Credit Facility. As of September 29, 2019 , the Company had a combined notional principal amount of $200.0 million of interest rate swap agreements, all of which are designated as cash flow hedges. These swap agreements effectively convert the interest expense associated with a portion of the 2019 Term Loan and a portion of the 2019 Revolver from variable interest rates to fixed interest rates and have maturities ranging from February 2022 to March 2022. Fair Value of Derivative Contracts The following table summarizes the fair value of derivative contracts included in the condensed statement of financial position (in thousands): Fair value of derivative instruments Derivatives accounted for as cash flow hedges Balance sheet location September 29, 2019 December 31, 2018 Interest rate swaps Other long-term liabilities $ 6,974 $ 2,652 The interest rate swaps are comprised of over-the-counter derivatives, which are valued using models that primarily rely on observable inputs such as yield curves, which are classified as Level 2 in the fair value hierarchy. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | 11. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Accumulated other comprehensive income (loss) includes unrealized gains and losses on derivatives that qualify as hedges of cash flows, unrecognized pension-related costs and cumulative foreign currency translation adjustments. The activity in accumulated other comprehensive loss during the three and nine months ended September 29, 2019 and September 30, 2018 was as follows: Third Quarter Ended September 29, 2019 (thousands) Cash Flow Hedges Defined Benefit Pension Foreign Currency Items Total Balance at June 30, 2019 $ (4,958 ) $ (675 ) $ (99 ) $ (5,732 ) Other comprehensive income (loss) (net of tax of $83, $0 and $0) (240 ) — 19 (221 ) Balance at September 29, 2019 $ (5,198 ) $ (675 ) $ (80 ) $ (5,953 ) Nine Months Ended September 29, 2019 (thousands) Cash Flow Hedges Defined Benefit Pension Foreign Currency Items Total Balance at December 31, 2018 $ (1,973 ) $ (675 ) $ (32 ) $ (2,680 ) Other comprehensive loss (net of tax of $1,098, $0 and $0) (3,225 ) — (48 ) (3,273 ) Balance at September 29, 2019 $ (5,198 ) $ (675 ) $ (80 ) $ (5,953 ) Third Quarter Ended September 30, 2018 (thousands) Cash Flow Hedges Defined Benefit Pension Foreign Currency Items Total Balance at July 1, 2018 $ — $ 66 $ (3 ) $ 63 Other comprehensive income (loss) (net of tax of $28, $0 and $0) 80 — (28 ) 52 Balance at September 30, 2018 $ 80 $ 66 $ (31 ) $ 115 Nine Months Ended September 30, 2018 (thousands) Cash Flow Hedges Defined Benefit Pension Foreign Currency Items Total Balance at December 31, 2017 $ — $ 66 $ — $ 66 Other comprehensive income (loss) (net of tax of $28, $0 and $0) 80 — (31 ) 49 Balance at September 30, 2018 $ 80 $ 66 $ (31 ) $ 115 |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
LEASES | 12. LEASES As discussed in Note 2, the Company adopted the provisions of ASC 842 on January 1, 2019 using the modified retrospective approach as of the effective date of ASC 842 (the effective date method). Under the effective date method, financial results in periods reported prior to 2019 are unchanged. As a result of the adoption of ASC 842, operating leases for certain warehouses, buildings, forklifts, trucks, trailers and other equipment are now recognized as right-of-use assets and corresponding short-term and long-term lease liabilities. The Company utilized a package of available practical expedients in the adoption of ASC 842, which, among them, does not require the reassessment of operating versus capital lease classification. Leases with an initial term of 12 months or less are not recorded on the balance sheet and expense related to these short term leases is immaterial. Lease and non-lease components in the fixed base rent of facility and equipment leases are included as a single component and accounted for as a lease. Pursuant to ASC 842, the Company elected to use the remaining non-cancellable lease term as of January 1, 2019 in determining the lease term at the date of adoption and the corresponding incremental borrowing rate for such leases. Variable lease expense, principally related to trucks, forklifts, and index-related facility rent escalators, was immaterial for the third quarter and nine months ended September 29, 2019. Leases have remaining lease terms of one year to eleven years . Certain leases include options to renew for an additional term. Where there is reasonable certainty to utilize a renewal option, we include the renewal option in the lease term used to calculate operating lease right-of-use assets and lease liabilities. Lease expense, supplemental cash flow information, and other information related to leases were as follows: (thousands) Third Quarter Ended Nine Months Ended September 29, 2019 September 29, 2019 Operating lease cost $ 7,848 $ 23,536 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 6,946 $ 20,545 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 5,522 $ 14,767 Balance sheet information related to leases was as follows: (thousands, except lease term and discount rate) September 29, 2019 Assets Operating lease right-of-use assets $ 81,064 Liabilities Operating lease liabilities, current portion $ 25,990 Long-term operating lease liabilities 55,553 Total lease liabilities $ 81,543 Weighted average remaining lease term, operating leases (in years) 4.04 Weighted average discount rate, operating leases 3.83 % Maturities of lease liabilities were as follows at September 29, 2019: (thousands) 2019 (excluding the nine months ended September 29, 2019) $ 8,150 2020 26,916 2021 20,512 2022 13,556 2023 8,954 Thereafter 10,158 Total lease payments 88,246 Less imputed interest (6,703 ) Total $ 81,543 Disclosures related to periods prior to the adoption of ASC 842: Maturities of lease liabilities were as follows at December 31, 2018: (thousands) 2019 $ 29,345 2020 23,344 2021 16,165 2022 9,602 2023 5,357 Thereafter 4,883 Total $ 88,696 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | 13. FAIR VALUE MEASUREMENTS The carrying amounts of cash equivalents, representing government and other money market funds traded in an active market, are reported on the condensed consolidated statements of financial position as a component of "Cash and cash equivalents". The carrying amount of cash equivalents at September 29, 2019 approximated fair value which was approximately $108.0 million, valued using level 1 inputs, with no corresponding amount at December 31, 2018 . The carrying amount of the Senior Notes at September 29, 2019 approximated fair value given their recent issuance and based upon terms and conditions available to the Company, with no corresponding amount at December 31, 2018. The 2019 Term Loan and the 2019 Revolver, valued using level 2 inputs, approximated fair value as of September 29, 2019 and the 2018 Term Loan and the 2018 Revolver, valued using level 2 inputs, approximated fair value ss of December 31, 2018 , respectively, based upon terms and conditions available to the Company at those dates in comparison to the terms and conditions of its outstanding debt. The estimated fair value of the Convertible Notes, calculated using Level 2 inputs, was approximately $152.1 million and $130.3 million as of September 29, 2019 and December 31, 2018, respectively. The estimated fair value of the Company's interest rate swaps is valued using Level 2 inputs and discussed in further detail in Note 10. The estimated fair value of the Company's contingent consideration is valued using Level 3 inputs and is discussed further in Note 6. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 14. INCOME TAXES The effective tax rate in the third quarter of 2019 and 2018 was 26.0% and 25.3% , respectively, and the effective tax rate for the comparable nine month periods was 24.6% and 23.6% , respectively. The effective tax rate for the periods presented includes the impact of the recognition of excess tax benefits on share-based compensation that was recorded as a reduction to income tax expense upon realization in the amount of $0.9 million and $2.2 million for the nine months ended September 29, 2019 and September 30, 2018, respectively, with no corresponding amounts in the corresponding quarterly periods. The Company made income tax payments of $7.4 million and $5.6 million in the third quarter of 2019 and 2018 , respectively, and $30.0 million and $21.0 million |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | 15. SEGMENT INFORMATION The Company has two reportable segments, Manufacturing and Distribution, which are those based on its method of internal reporting, which segregates its businesses based on the manner in which its Chief Operating Decision Maker allocates resources, evaluates financial results, and determines compensation. The tables below present information about the sales and operating income of those segments. Third Quarter Ended September 29, 2019 (thousands) Manufacturing Distribution Total Net outside sales $ 399,712 $ 166,474 $ 566,186 Intersegment sales 8,102 1,078 9,180 Total sales 407,814 167,552 575,366 Operating income 42,353 9,041 51,394 Third Quarter Ended September 30, 2018 (thousands) Manufacturing Distribution Total Net outside sales $ 445,214 $ 129,925 $ 575,139 Intersegment sales 8,182 1,097 9,279 Total sales 453,396 131,022 584,418 Operating income 54,887 7,606 62,493 Nine Months Ended September 29, 2019 (thousands) Manufacturing Distribution Total Net outside sales $ 1,259,671 $ 527,951 $ 1,787,622 Intersegment sales 24,153 3,361 27,514 Total sales 1,283,824 531,312 1,815,136 Operating income 135,577 28,132 163,709 Nine Months Ended September 30, 2018 (thousands) Manufacturing Distribution Total Net outside sales $ 1,344,088 $ 387,762 $ 1,731,850 Intersegment sales 27,464 2,840 30,304 Total sales 1,371,552 390,602 1,762,154 Operating income 172,799 25,092 197,891 The following table presents a reconciliation of segment operating income to consolidated operating income: Third Quarter Ended Nine Months Ended (thousands) September 29, 2019 September 30, 2018 September 29, 2019 September 30, 2018 Operating income for reportable segments $ 51,394 $ 62,493 $ 163,709 $ 197,891 Unallocated corporate expenses (4,793 ) (8,911 ) (18,796 ) (33,229 ) Amortization (9,191 ) (8,873 ) (26,448 ) (25,140 ) Consolidated operating income $ 37,410 $ 44,709 $ 118,465 $ 139,522 Unallocated corporate expenses include corporate general and administrative expenses comprised of wages, insurance, taxes, supplies, travel and entertainment, professional fees and other. |
STOCK REPURCHASE PROGRAMS
STOCK REPURCHASE PROGRAMS | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
STOCK REPURCHASE PROGRAM | 16. STOCK REPURCHASE PROGRAMS In 2018, the Board approved a new stock repurchase program for up to $50 million of its common stock as well as two additions totaling $87.9 million to this program. Approximately $26.7 million remains in the amount of the Company's common stock that may be acquired under the current stock repurchase program. In the third quarter and first nine months ended September 29, 2019, the Company repurchased 98,201 shares of its common stock at an average price of $36.50 per share at an aggregate cost of $3.6 million. In the third quarter of 2018, the Company repurchased 347,235 shares of its common stock at an average price of $60.32 per share at an aggregate cost of $20.9 million . In the first nine months of 2018, the Company repurchased 1,282,930 shares of its common stock at an average price of $58.48 per share at an aggregate cost of $75.0 million |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 17. RELATED PARTY TRANSACTIONS In the first nine months of 2019 , the Company entered into transactions with companies affiliated with two of its independent Board members. The Company purchased approximately $0.8 million of corrugated packaging materials from Welch Packaging Group, an independently owned company established by M. Scott Welch who serves as its President and CEO. The Company also sold approximately $0.4 million |
RECENTLY ISSUED ACCOUNTING PR_2
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Recent Issued Accounting Pronouncements | Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, " Leases (Topic 842) ", which requires in part that an entity recognize lease assets and lease liabilities on its statement of financial position for leases that were previously classified as operating leases under U.S. GAAP. In July 2018, the FASB issued ASU 2018-11, " Leases (Topic 842): Targeted Improvements ", which offered practical expedient alternatives to the modified retrospective adoption of Accounting Standards Codification (“ASC”) 842. The Company adopted ASC 842 effective January 1, 2019, and recorded approximately $80 million in lease right-of-use assets and corresponding lease liabilities, with no material impact on the condensed consolidated statement of shareholders' equity, income, comprehensive income or cash flows. See Note 12 for further information. Goodwill Impairment In January 2017, the FASB issued ASU 2017-04, " Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ". This ASU simplifies the accounting for goodwill impairments by eliminating step two from the goodwill impairment test. The standard requires that the impairment loss be measured as the excess of the reporting unit's carrying amount over its fair value. It eliminates the second step that requires the impairment to be measured between the implied value of a reporting unit's goodwill and its carrying value. The standard is effective for annual and any interim impairment tests for periods beginning after December 15, 2019 and early adoption is permitted. The Company is currently evaluating the effect of adopting this new accounting standard, which will depend on the outcomes of future goodwill impairment tests. Credit Losses In June 2016, the FASB issued ASU 2016-13 “ Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments ”, which amends certain provisions of ASC 326, “Financial Instruments-Credit Loss”. The ASU changes the impairment model for most financial assets and certain other instruments. For trade and other receivables, held to maturity debt securities, loans and other instruments, entities will be required to use a new forward-looking “expected loss” model that generally will result in the earlier recognition of allowances for losses. Additionally, entities will be required to disclose more information with respect to credit quality indicators, including information used to track credit quality by year of origination for most financing receivables. The ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years and will be applied as a cumulative effect adjustment to retained earnings as of the beginning of the first reporting period for which the guidance is effective. The Company does not expect that the adoption of the ASU will have a material effect on its condensed consolidated financial statements. |
Revenue from Contract with Customer | 3. REVENUE RECOGNITION In the following table, revenue from contracts with customers, net of intersegment sales, is disaggregated by market type and by reportable segments, consistent with how the Company believes the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors: Third Quarter Ended September 29, 2019 (thousands) Manufacturing Distribution Total Reportable Segments Market type: Recreational Vehicle $ 218,706 $ 91,313 $ 310,019 Manufactured Housing 44,159 64,959 109,118 Industrial 64,541 7,566 72,107 Marine 72,306 2,636 74,942 Total $ 399,712 $ 166,474 $ 566,186 Nine Months Ended September 29, 2019 (thousands) Manufacturing Distribution Total Reportable Segments Market type: Recreational Vehicle $ 694,261 $ 299,115 $ 993,376 Manufactured Housing 131,101 193,975 325,076 Industrial 188,292 25,149 213,441 Marine 246,017 9,712 255,729 Total $ 1,259,671 $ 527,951 $ 1,787,622 Third Quarter Ended September 30, 2018 (thousands) Manufacturing Distribution Total Reportable Segments Market type: Recreational Vehicle $ 262,936 $ 91,637 $ 354,573 Manufactured Housing 41,428 26,334 67,762 Industrial 63,429 8,906 72,335 Marine 77,421 3,048 80,469 Total $ 445,214 $ 129,925 $ 575,139 ` Nine Months Ended September 30, 2018 (thousands) Manufacturing Distribution Total Reportable Segments Market type: Recreational Vehicle $ 847,944 $ 280,082 $ 1,128,026 Manufactured Housing 124,406 75,946 200,352 Industrial 186,890 25,701 212,591 Marine 184,848 6,033 190,881 Total $ 1,344,088 $ 387,762 $ 1,731,850 The following table provides information about contract balances: (thousands) September 29, 2019 December 31, 2018 Receivables, which are included in trade and other receivables, net $ 128,672 $ 74,196 Contract liabilities $ 2,692 $ 2,642 Significant changes in the contract liabilities balance during the nine months ended September 29, 2019 are as follows: (thousands) Contract Liabilities Revenue recognized that was included in the contract liability balance at the beginning of the period $ (1,006 ) Increases due to cash received, excluding amounts recognized as revenue during the period $ 1,056 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | In the following table, revenue from contracts with customers, net of intersegment sales, is disaggregated by market type and by reportable segments, consistent with how the Company believes the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors: Third Quarter Ended September 29, 2019 (thousands) Manufacturing Distribution Total Reportable Segments Market type: Recreational Vehicle $ 218,706 $ 91,313 $ 310,019 Manufactured Housing 44,159 64,959 109,118 Industrial 64,541 7,566 72,107 Marine 72,306 2,636 74,942 Total $ 399,712 $ 166,474 $ 566,186 Nine Months Ended September 29, 2019 (thousands) Manufacturing Distribution Total Reportable Segments Market type: Recreational Vehicle $ 694,261 $ 299,115 $ 993,376 Manufactured Housing 131,101 193,975 325,076 Industrial 188,292 25,149 213,441 Marine 246,017 9,712 255,729 Total $ 1,259,671 $ 527,951 $ 1,787,622 Third Quarter Ended September 30, 2018 (thousands) Manufacturing Distribution Total Reportable Segments Market type: Recreational Vehicle $ 262,936 $ 91,637 $ 354,573 Manufactured Housing 41,428 26,334 67,762 Industrial 63,429 8,906 72,335 Marine 77,421 3,048 80,469 Total $ 445,214 $ 129,925 $ 575,139 ` Nine Months Ended September 30, 2018 (thousands) Manufacturing Distribution Total Reportable Segments Market type: Recreational Vehicle $ 847,944 $ 280,082 $ 1,128,026 Manufactured Housing 124,406 75,946 200,352 Industrial 186,890 25,701 212,591 Marine 184,848 6,033 190,881 Total $ 1,344,088 $ 387,762 $ 1,731,850 |
Schedule of Contract Assets and Liabilities | The following table provides information about contract balances: (thousands) September 29, 2019 December 31, 2018 Receivables, which are included in trade and other receivables, net $ 128,672 $ 74,196 Contract liabilities $ 2,692 $ 2,642 Significant changes in the contract liabilities balance during the nine months ended September 29, 2019 are as follows: (thousands) Contract Liabilities Revenue recognized that was included in the contract liability balance at the beginning of the period $ (1,006 ) Increases due to cash received, excluding amounts recognized as revenue during the period $ 1,056 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | Changes in the carrying amount of goodwill for the nine months ended September 29, 2019 by segment are as follows: (thousands) Manufacturing Distribution Total Balance - December 31, 2018 $ 235,345 $ 46,389 $ 281,734 Acquisitions 7,177 — 7,177 Adjustments to preliminary purchase price allocations 8,428 11,019 19,447 Balance - September 29, 2019 $ 250,950 $ 57,408 $ 308,358 |
Schedule of intangible assets, net | Intangible assets, net consist of the following as of September 29, 2019 and December 31, 2018 : (thousands) September 29, Weighted Average Useful Life December 31, Weighted Average Useful Life Customer relationships $ 348,947 10.1 $ 366,228 10.1 Non-compete agreements 16,405 4.9 19,159 4.9 Patents 16,338 14.6 1,048 8.9 Trademarks 80,786 Indefinite 82,358 Indefinite 462,476 468,793 Less: accumulated amortization (112,260 ) (85,811 ) Intangible assets, net $ 350,216 $ 382,982 |
Schedule of changes in intangible assets | Changes in the carrying value of intangible assets for the nine months ended September 29, 2019 by segment are as follows: (thousands) Manufacturing Distribution Total Balance - December 31, 2018 $ 304,485 $ 78,497 $ 382,982 Acquisitions 8,329 — 8,329 Amortization (21,808 ) (4,640 ) (26,448 ) Adjustments to preliminary purchase price allocations (12,023 ) (2,624 ) (14,647 ) Balance - September 29, 2019 $ 278,983 $ 71,233 $ 350,216 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventories consist of the following: (thousands) September 29, 2019 December 31, 2018 Raw materials $ 172,775 $ 164,408 Work in process 14,235 12,829 Finished goods 25,403 28,341 Less: reserve for inventory obsolescence (10,258 ) (5,354 ) Total manufactured goods, net 202,155 200,224 Materials purchased for resale (distribution products) 62,616 74,914 Less: reserve for inventory obsolescence (2,213 ) (2,240 ) Total materials purchased for resale (distribution products), net 60,403 72,674 Total inventories $ 262,558 $ 272,898 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Schedule of assets acquired and liabilities assumed | The following table summarizes the fair values of the assets acquired and the liabilities assumed as of the date of the acquisition for the 2019 and 2018 acquisitions: (thousands) Trade receivables Inventories Property, plant and equipment Prepaid expenses & other Intangible assets Goodwill Less: Total liabilities Less: Deferred tax liability, net Total net assets acquired 2019 (1) $ 2,245 $ 5,296 $ 1,650 $ 133 $ 8,329 $ 7,177 $ 1,135 $ — $ 23,695 2018 MMC (2) $ 1,463 $ 2,324 $ 2,085 $ — $ 8,540 $ 7,668 $ 827 $ — $ 21,253 AMC 3,942 5,623 2,321 39 6,550 1,755 2,463 — 17,767 IMP (3) 1,943 4,286 1,463 13 12,920 8,803 2,930 — 26,498 Collins 2,830 9,903 1,188 5 18,430 10,237 2,586 — 40,007 Dehco 4,771 16,923 13,755 208 13,950 6,580 3,392 — 52,795 Dowco 4,053 4,498 8,566 1,240 28,435 13,732 4,178 — 56,346 MAC 3,054 6,815 7,003 284 26,190 25,669 4,226 7,767 57,022 EMC (4) 623 1,678 1,684 — 17,350 7,483 987 — 27,831 LaSalle 9,002 39,344 8,500 6,547 5,885 10,441 28,601 41 51,077 Other 473 329 280 13 1,667 919 195 — 3,486 2018 Totals $ 32,154 $ 91,723 $ 46,845 $ 8,349 $ 139,917 $ 93,287 $ 50,385 $ 7,808 $ 354,082 (1) Total net assets acquired for the 2019 acquisitions reflect the preliminary estimated liability of $2.6 million pertaining to the fair value of contingent consideration based on future performance relating to the acquisition of G.G. Schmitt. (2) Total net assets acquired for MMC reflect the preliminary estimated liability of $1.4 million pertaining to the fair value of the contingent consideration based on future performance. (3) Total net assets acquired for IMP reflect the preliminary estimated liability of $7.9 million pertaining to the fair value of the contingent consideration based on future performance. (4) Total net assets acquired for EMC reflect the preliminary estimated liability of $2.5 million pertaining to the fair value of the contingent consideration based on future performance. |
Schedule of pro forma information | Third Quarter Ended Nine Months Ended (thousands except per share data) September 29, 2019 September 30, 2018 September 29, 2019 September 30, 2018 Revenue $ 571,734 $ 660,873 $ 1,806,933 $ 2,049,540 Net income 21,346 30,377 70,067 103,502 Basic net income per common share 0.93 1.27 3.04 4.26 Diluted net income per common share 0.92 1.25 3.01 4.20 |
NET INCOME PER COMMON SHARE (Ta
NET INCOME PER COMMON SHARE (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per share | Net income per common share calculated for the third quarter and nine months of 2019 and 2018 is as follows: Third Quarter Ended Nine Months Ended (thousands except per share data) September 29, 2019 September 30, 2018 September 29, 2019 September 30, 2018 Net income for basic and diluted per share calculation $ 21,317 $ 27,934 $ 69,582 $ 92,862 Weighted average common shares outstanding - basic 23,076 23,894 23,073 24,279 Effect of potentially dilutive securities 197 338 206 340 Weighted average common shares outstanding - diluted 23,273 24,232 23,279 24,619 Basic net income per common share $ 0.92 $ 1.17 $ 3.02 $ 3.82 Diluted net income per common share $ 0.92 $ 1.15 $ 2.99 $ 3.77 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of total debt outstanding | A summary of total debt outstanding at September 29, 2019 and December 31, 2018 is as follows: (thousands) September 29, 2019 December 31, 2018 Long-term debt: Revolver $ 135,000 $ 392,332 Term Loan 100,000 96,250 Senior Notes 300,000 — Convertible Notes 172,500 172,500 Total long-term debt 707,500 661,082 Less: Convertible Notes debt discount, net (25,023 ) (30,125 ) Less: Senior Notes deferred financing costs, net (5,979 ) — Less: current maturities of long-term debt (5,000 ) (8,750 ) Less: Term Loan deferred financing costs, net (570 ) (456 ) Total long-term debt, less current maturities, net $ 670,928 $ 621,751 |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Liabilities at Fair Value | The following table summarizes the fair value of derivative contracts included in the condensed statement of financial position (in thousands): Fair value of derivative instruments Derivatives accounted for as cash flow hedges Balance sheet location September 29, 2019 December 31, 2018 Interest rate swaps Other long-term liabilities $ 6,974 $ 2,652 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The activity in accumulated other comprehensive loss during the three and nine months ended September 29, 2019 and September 30, 2018 was as follows: Third Quarter Ended September 29, 2019 (thousands) Cash Flow Hedges Defined Benefit Pension Foreign Currency Items Total Balance at June 30, 2019 $ (4,958 ) $ (675 ) $ (99 ) $ (5,732 ) Other comprehensive income (loss) (net of tax of $83, $0 and $0) (240 ) — 19 (221 ) Balance at September 29, 2019 $ (5,198 ) $ (675 ) $ (80 ) $ (5,953 ) Nine Months Ended September 29, 2019 (thousands) Cash Flow Hedges Defined Benefit Pension Foreign Currency Items Total Balance at December 31, 2018 $ (1,973 ) $ (675 ) $ (32 ) $ (2,680 ) Other comprehensive loss (net of tax of $1,098, $0 and $0) (3,225 ) — (48 ) (3,273 ) Balance at September 29, 2019 $ (5,198 ) $ (675 ) $ (80 ) $ (5,953 ) Third Quarter Ended September 30, 2018 (thousands) Cash Flow Hedges Defined Benefit Pension Foreign Currency Items Total Balance at July 1, 2018 $ — $ 66 $ (3 ) $ 63 Other comprehensive income (loss) (net of tax of $28, $0 and $0) 80 — (28 ) 52 Balance at September 30, 2018 $ 80 $ 66 $ (31 ) $ 115 Nine Months Ended September 30, 2018 (thousands) Cash Flow Hedges Defined Benefit Pension Foreign Currency Items Total Balance at December 31, 2017 $ — $ 66 $ — $ 66 Other comprehensive income (loss) (net of tax of $28, $0 and $0) 80 — (31 ) 49 Balance at September 30, 2018 $ 80 $ 66 $ (31 ) $ 115 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Lease Expense, Supplemental Cash Flow and Other Lease Information | Lease expense, supplemental cash flow information, and other information related to leases were as follows: (thousands) Third Quarter Ended Nine Months Ended September 29, 2019 September 29, 2019 Operating lease cost $ 7,848 $ 23,536 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 6,946 $ 20,545 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 5,522 $ 14,767 |
Lease Assets and Liabilities | Balance sheet information related to leases was as follows: (thousands, except lease term and discount rate) September 29, 2019 Assets Operating lease right-of-use assets $ 81,064 Liabilities Operating lease liabilities, current portion $ 25,990 Long-term operating lease liabilities 55,553 Total lease liabilities $ 81,543 Weighted average remaining lease term, operating leases (in years) 4.04 Weighted average discount rate, operating leases 3.83 % |
Operating Lease Liability Maturity | Maturities of lease liabilities were as follows at September 29, 2019: (thousands) 2019 (excluding the nine months ended September 29, 2019) $ 8,150 2020 26,916 2021 20,512 2022 13,556 2023 8,954 Thereafter 10,158 Total lease payments 88,246 Less imputed interest (6,703 ) Total $ 81,543 |
Future Minimum Minimum Lease Payments | Maturities of lease liabilities were as follows at December 31, 2018: (thousands) 2019 $ 29,345 2020 23,344 2021 16,165 2022 9,602 2023 5,357 Thereafter 4,883 Total $ 88,696 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting information | The tables below present information about the sales and operating income of those segments. Third Quarter Ended September 29, 2019 (thousands) Manufacturing Distribution Total Net outside sales $ 399,712 $ 166,474 $ 566,186 Intersegment sales 8,102 1,078 9,180 Total sales 407,814 167,552 575,366 Operating income 42,353 9,041 51,394 Third Quarter Ended September 30, 2018 (thousands) Manufacturing Distribution Total Net outside sales $ 445,214 $ 129,925 $ 575,139 Intersegment sales 8,182 1,097 9,279 Total sales 453,396 131,022 584,418 Operating income 54,887 7,606 62,493 Nine Months Ended September 29, 2019 (thousands) Manufacturing Distribution Total Net outside sales $ 1,259,671 $ 527,951 $ 1,787,622 Intersegment sales 24,153 3,361 27,514 Total sales 1,283,824 531,312 1,815,136 Operating income 135,577 28,132 163,709 Nine Months Ended September 30, 2018 (thousands) Manufacturing Distribution Total Net outside sales $ 1,344,088 $ 387,762 $ 1,731,850 Intersegment sales 27,464 2,840 30,304 Total sales 1,371,552 390,602 1,762,154 Operating income 172,799 25,092 197,891 |
Summary of the reconciliation of segment operations | The following table presents a reconciliation of segment operating income to consolidated operating income: Third Quarter Ended Nine Months Ended (thousands) September 29, 2019 September 30, 2018 September 29, 2019 September 30, 2018 Operating income for reportable segments $ 51,394 $ 62,493 $ 163,709 $ 197,891 Unallocated corporate expenses (4,793 ) (8,911 ) (18,796 ) (33,229 ) Amortization (9,191 ) (8,873 ) (26,448 ) (25,140 ) Consolidated operating income $ 37,410 $ 44,709 $ 118,465 $ 139,522 |
RECENTLY ISSUED ACCOUNTING PR_3
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease right-of-use assets | $ 81,064 | $ 0 | |
Operating Lease Liability | $ 81,543 | ||
Accounting Standards Update 2016-02 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease right-of-use assets | $ 80,000 | ||
Operating Lease Liability | $ 80,000 |
REVENUE RECOGNITION - Schedule
REVENUE RECOGNITION - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
NET SALES | $ 566,186 | $ 575,139 | $ 1,787,622 | $ 1,731,850 |
Recreational Vehicle | ||||
Disaggregation of Revenue [Line Items] | ||||
NET SALES | 310,019 | 354,573 | 993,376 | 1,128,026 |
Manufactured Housing | ||||
Disaggregation of Revenue [Line Items] | ||||
NET SALES | 109,118 | 67,762 | 325,076 | 200,352 |
Industrial | ||||
Disaggregation of Revenue [Line Items] | ||||
NET SALES | 72,107 | 72,335 | 213,441 | 212,591 |
Marine | ||||
Disaggregation of Revenue [Line Items] | ||||
NET SALES | 74,942 | 80,469 | 255,729 | 190,881 |
Manufacturing | ||||
Disaggregation of Revenue [Line Items] | ||||
NET SALES | 399,712 | 445,214 | 1,259,671 | 1,344,088 |
Manufacturing | Recreational Vehicle | ||||
Disaggregation of Revenue [Line Items] | ||||
NET SALES | 218,706 | 262,936 | 694,261 | 847,944 |
Manufacturing | Manufactured Housing | ||||
Disaggregation of Revenue [Line Items] | ||||
NET SALES | 44,159 | 41,428 | 131,101 | 124,406 |
Manufacturing | Industrial | ||||
Disaggregation of Revenue [Line Items] | ||||
NET SALES | 64,541 | 63,429 | 188,292 | 186,890 |
Manufacturing | Marine | ||||
Disaggregation of Revenue [Line Items] | ||||
NET SALES | 72,306 | 77,421 | 246,017 | 184,848 |
Distribution | ||||
Disaggregation of Revenue [Line Items] | ||||
NET SALES | 166,474 | 129,925 | 527,951 | 387,762 |
Distribution | Recreational Vehicle | ||||
Disaggregation of Revenue [Line Items] | ||||
NET SALES | 91,313 | 91,637 | 299,115 | 280,082 |
Distribution | Manufactured Housing | ||||
Disaggregation of Revenue [Line Items] | ||||
NET SALES | 64,959 | 26,334 | 193,975 | 75,946 |
Distribution | Industrial | ||||
Disaggregation of Revenue [Line Items] | ||||
NET SALES | 7,566 | 8,906 | 25,149 | 25,701 |
Distribution | Marine | ||||
Disaggregation of Revenue [Line Items] | ||||
NET SALES | $ 2,636 | $ 3,048 | $ 9,712 | $ 6,033 |
REVENUE RECOGNITION - Schedul_2
REVENUE RECOGNITION - Schedule of Contract Assets and Liabilities (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | ||
Receivables, which are included in trade and other receivables, net | $ 128,672 | $ 74,196 |
Contract liabilities | 2,692 | $ 2,642 |
Contract Liabilities | ||
Revenue recognized that was included in the contract liability balance at the beginning of the period | (1,006) | |
Increases due to cash received, excluding amounts recognized as revenue during the period | $ 1,056 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Carrying Amount of Goodwill by Segment (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Goodwill [Roll Forward] | |
Balance - December 31, 2018 | $ 281,734 |
Acquisitions | 7,177 |
Adjustments to preliminary purchase price allocations | 19,447 |
Balance - September 29, 2019 | 308,358 |
Manufacturing | |
Goodwill [Roll Forward] | |
Balance - December 31, 2018 | 235,345 |
Acquisitions | 7,177 |
Adjustments to preliminary purchase price allocations | 8,428 |
Balance - September 29, 2019 | 250,950 |
Distribution | |
Goodwill [Roll Forward] | |
Balance - December 31, 2018 | 46,389 |
Acquisitions | 0 |
Adjustments to preliminary purchase price allocations | 11,019 |
Balance - September 29, 2019 | $ 57,408 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Inventory [Line Items] | ||
Raw materials | $ 172,775 | $ 164,408 |
Work in process | 14,235 | 12,829 |
Finished goods | 25,403 | 28,341 |
Total manufactured goods, net | 202,155 | 200,224 |
Materials purchased for resale (distribution products) | 62,616 | 74,914 |
Total materials purchased for resale (distribution products), net | 60,403 | 72,674 |
Total inventories | 262,558 | 272,898 |
Manufactured Goods | ||
Inventory [Line Items] | ||
Less: reserve for inventory obsolescence | (10,258) | (5,354) |
Distributed Goods | ||
Inventory [Line Items] | ||
Less: reserve for inventory obsolescence | $ (2,213) | $ (2,240) |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Intangible Assets, Net, by Major Class (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Intangible Assets [Line Items] | ||
Total other intangible assets, net, excluding accumulated amortization | $ 462,476 | $ 468,793 |
Less: accumulated amortization | (112,260) | (85,811) |
Intangible assets, net | 350,216 | 382,982 |
Trademarks | ||
Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | 80,786 | 82,358 |
Customer relationships | ||
Intangible Assets [Line Items] | ||
Finite-lived intangible assets | $ 348,947 | $ 366,228 |
Intangible assets, weighted average useful life | 10 years 1 month 6 days | 10 years 1 month 6 days |
Non-compete agreements | ||
Intangible Assets [Line Items] | ||
Finite-lived intangible assets | $ 16,405 | $ 19,159 |
Intangible assets, weighted average useful life | 4 years 10 months 24 days | 4 years 10 months 24 days |
Patents | ||
Intangible Assets [Line Items] | ||
Finite-lived intangible assets | $ 16,338 | $ 1,048 |
Intangible assets, weighted average useful life | 14 years 7 months 6 days | 8 years 10 months 24 days |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - Intangible Assets by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Intangible Assets [Roll Forward] | ||||
Balance - December 31, 2018 | $ 382,982 | |||
Acquisitions | 8,329 | |||
Amortization | $ (9,191) | $ (8,873) | (26,448) | $ (25,140) |
Adjustments to preliminary purchase price allocations | (14,647) | |||
Balance - September 29, 2019 | 350,216 | 350,216 | ||
Manufacturing | ||||
Intangible Assets [Roll Forward] | ||||
Balance - December 31, 2018 | 304,485 | |||
Acquisitions | 8,329 | |||
Amortization | (21,808) | |||
Adjustments to preliminary purchase price allocations | (12,023) | |||
Balance - September 29, 2019 | 278,983 | 278,983 | ||
Distribution | ||||
Intangible Assets [Roll Forward] | ||||
Balance - December 31, 2018 | 78,497 | |||
Acquisitions | 0 | |||
Amortization | (4,640) | |||
Adjustments to preliminary purchase price allocations | (2,624) | |||
Balance - September 29, 2019 | $ 71,233 | $ 71,233 |
ACQUISITIONS - Narrative (Detai
ACQUISITIONS - Narrative (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2019USD ($) | Nov. 30, 2018USD ($)facility | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | May 31, 2018USD ($) | Apr. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Feb. 28, 2018USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)acquisition | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($) | |
Business Acquisition [Line Items] | |||||||||||||
Number of acquisitions | acquisition | 2 | ||||||||||||
Total sales | $ 566,186,000 | $ 575,139,000 | $ 1,787,622,000 | $ 1,731,850,000 | |||||||||
Operating Income | 37,410,000 | 44,709,000 | 118,465,000 | 139,522,000 | |||||||||
Fair value of estimated contingent consideration payments | $ 12,000,000 | 12,000,000 | 12,000,000 | $ 13,800,000 | |||||||||
Contingent consideration arrangements maximum payments amount | 17,200,000 | 17,200,000 | 17,200,000 | ||||||||||
Cash payments related to contingent consideration liabilities | 4,416,000 | 0 | |||||||||||
Decrease intangible asset adjustment | 14,647,000 | ||||||||||||
Increase in goodwill adjustment | 19,447,000 | ||||||||||||
Business acquisitions, net of cash acquired | 22,350,000 | 290,052,000 | |||||||||||
Pro forma amortization expense | 200,000 | 700,000 | 500,000 | 5,700,000 | |||||||||
Acquired Entities | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Total sales | 82,400,000 | 160,000,000 | |||||||||||
Operating Income | 8,800,000 | 17,300,000 | |||||||||||
G.G. Schmitt & Sons, Inc. | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Fair value of estimated contingent consideration payments | $ 2,600,000 | ||||||||||||
Net initial purchase price | 21,100,000 | ||||||||||||
Metal Moulding Corporation | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Fair value of estimated contingent consideration payments | 1,400,000 | ||||||||||||
Net initial purchase price | $ 19,900,000 | ||||||||||||
Contingent consideration performance period | 1 year | ||||||||||||
Aluminum Metals Company | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Net initial purchase price | $ 17,800,000 | ||||||||||||
Indiana Marine Products | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Fair value of estimated contingent consideration payments | $ 7,900,000 | ||||||||||||
Net initial purchase price | $ 18,600,000 | ||||||||||||
Contingent consideration performance period | 3 years | ||||||||||||
Collins & Company | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Net initial purchase price | $ 40,000,000 | ||||||||||||
Decrease intangible asset adjustment | 3,600,000 | ||||||||||||
Increase in goodwill adjustment | 3,600,000 | ||||||||||||
Dehco Inc | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Net initial purchase price | $ 52,800,000 | ||||||||||||
Decrease intangible asset adjustment | 300,000 | ||||||||||||
Increase in goodwill adjustment | 300,000 | ||||||||||||
Dowco Inc. | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Net initial purchase price | $ 56,300,000 | ||||||||||||
Decrease intangible asset adjustment | (5,900,000) | ||||||||||||
Increase in property, plant and equipment | 2,700,000 | ||||||||||||
Increase (decrease) in initial purchase price | 3,300,000 | ||||||||||||
Increase to accounts payable adjustment | 0.1 | ||||||||||||
Marine Accessories Corporation | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Net initial purchase price | $ 57,000,000 | ||||||||||||
Decrease intangible asset adjustment | (6,500,000) | ||||||||||||
Increase in property, plant and equipment | 1,000,000 | ||||||||||||
Increase (decrease) in initial purchase price | 6,400,000 | ||||||||||||
Percentage of voting interests acquired | 100.00% | ||||||||||||
Decrease in deferred taxes and other liabilities | 1,100,000 | ||||||||||||
Engineered Metals and Composites | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Fair value of estimated contingent consideration payments | $ 2,500,000 | $ 2,500,000 | $ 2,500,000 | ||||||||||
Decrease intangible asset adjustment | (1,600,000) | ||||||||||||
Increase in property, plant and equipment | 800,000 | ||||||||||||
Increase (decrease) in initial purchase price | 19,900,000 | 100,000 | |||||||||||
Increase to accounts payable adjustment | 25,900,000 | 200,000 | |||||||||||
Business acquisitions, net of cash acquired | $ 25,300,000 | ||||||||||||
Decrease in Goodwill | 600,000 | ||||||||||||
Contingent consideration payout term | 3 months | ||||||||||||
Increase to working capital adjustment | 100,000 | ||||||||||||
Decrease to inventory adjustment | (100,000) | ||||||||||||
LaSalle | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Net initial purchase price | $ 51,100,000 | ||||||||||||
Increase in goodwill adjustment | 6,700,000 | ||||||||||||
Increase (decrease) in initial purchase price | 1,100,000 | ||||||||||||
Number of manufacturing and distribution centers located in North America | facility | 15 | ||||||||||||
Increase to working capital adjustment | 18,600,000 | 1,100,000 | |||||||||||
Decrease to inventory adjustment | 6,700,000 | ||||||||||||
Increase to accounts receivable | 800,000 | ||||||||||||
Increase to prepaid expenses | 300,000 | ||||||||||||
Accrued Liabilities | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Fair value of estimated contingent consideration payments | 4,500,000 | 4,500,000 | 4,500,000 | 4,400,000 | |||||||||
Other Long-term Liabilities | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Fair value of estimated contingent consideration payments | $ 7,500,000 | $ 7,500,000 | $ 7,500,000 | $ 9,400,000 |
ACQUISITIONS - Fair Value of As
ACQUISITIONS - Fair Value of Assets Acquired, Summary (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | |||||||||
Sep. 30, 2019 | Nov. 30, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | May 31, 2018 | Apr. 30, 2018 | Mar. 31, 2018 | Feb. 28, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Business Acquisition [Line Items] | |||||||||||
Goodwill | $ 308,358 | $ 308,358 | $ 281,734 | ||||||||
Contingent consideration liability | 12,000 | 12,000 | 13,800 | ||||||||
Net cash paid for business | 22,350 | $ 290,052 | |||||||||
Metal Moulding Corporation | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Trade receivables | $ 1,463 | ||||||||||
Inventories | 2,324 | ||||||||||
Property, plant and equipment | 2,085 | ||||||||||
Prepaid expenses & other | 0 | ||||||||||
Intangible assets | 8,540 | ||||||||||
Goodwill | 7,668 | ||||||||||
Less: Total liabilities | 827 | ||||||||||
Less: Deferred tax liability, net | 0 | ||||||||||
Total net assets acquired | 21,253 | ||||||||||
Contingent consideration liability | 1,400 | ||||||||||
Net purchase price | 19,900 | ||||||||||
Aluminum Metals Company | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Trade receivables | 3,942 | ||||||||||
Inventories | 5,623 | ||||||||||
Property, plant and equipment | 2,321 | ||||||||||
Prepaid expenses & other | 39 | ||||||||||
Intangible assets | 6,550 | ||||||||||
Goodwill | 1,755 | ||||||||||
Less: Total liabilities | 2,463 | ||||||||||
Less: Deferred tax liability, net | 0 | ||||||||||
Total net assets acquired | 17,767 | ||||||||||
Net purchase price | 17,800 | ||||||||||
Indiana Marine Products | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Trade receivables | $ 1,943 | ||||||||||
Inventories | 4,286 | ||||||||||
Property, plant and equipment | 1,463 | ||||||||||
Prepaid expenses & other | 13 | ||||||||||
Intangible assets | 12,920 | ||||||||||
Goodwill | 8,803 | ||||||||||
Less: Total liabilities | 2,930 | ||||||||||
Less: Deferred tax liability, net | 0 | ||||||||||
Total net assets acquired | 26,498 | ||||||||||
Contingent consideration liability | 7,900 | ||||||||||
Net purchase price | 18,600 | ||||||||||
Collins & Company | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Trade receivables | 2,830 | ||||||||||
Inventories | 9,903 | ||||||||||
Property, plant and equipment | 1,188 | ||||||||||
Prepaid expenses & other | 5 | ||||||||||
Intangible assets | 18,430 | ||||||||||
Goodwill | 10,237 | ||||||||||
Less: Total liabilities | 2,586 | ||||||||||
Less: Deferred tax liability, net | 0 | ||||||||||
Total net assets acquired | 40,007 | ||||||||||
Net purchase price | $ 40,000 | ||||||||||
Dehco Inc | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Trade receivables | $ 4,771 | ||||||||||
Inventories | 16,923 | ||||||||||
Property, plant and equipment | 13,755 | ||||||||||
Prepaid expenses & other | 208 | ||||||||||
Intangible assets | 13,950 | ||||||||||
Goodwill | 6,580 | ||||||||||
Less: Total liabilities | 3,392 | ||||||||||
Less: Deferred tax liability, net | 0 | ||||||||||
Total net assets acquired | 52,795 | ||||||||||
Net purchase price | $ 52,800 | ||||||||||
Dowco Inc. | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Trade receivables | $ 4,053 | ||||||||||
Inventories | 4,498 | ||||||||||
Property, plant and equipment | 8,566 | ||||||||||
Prepaid expenses & other | 1,240 | ||||||||||
Intangible assets | 28,435 | ||||||||||
Goodwill | 13,732 | ||||||||||
Less: Total liabilities | 4,178 | ||||||||||
Less: Deferred tax liability, net | 0 | ||||||||||
Total net assets acquired | 56,346 | ||||||||||
Net purchase price | $ 56,300 | ||||||||||
Marine Accessories Corporation | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Trade receivables | $ 3,054 | ||||||||||
Inventories | 6,815 | ||||||||||
Property, plant and equipment | 7,003 | ||||||||||
Prepaid expenses & other | 284 | ||||||||||
Intangible assets | 26,190 | ||||||||||
Goodwill | 25,669 | ||||||||||
Less: Total liabilities | 4,226 | ||||||||||
Less: Deferred tax liability, net | 7,767 | ||||||||||
Total net assets acquired | 57,022 | ||||||||||
Net purchase price | $ 57,000 | ||||||||||
Engineered Metals and Composites | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Trade receivables | $ 623 | 623 | |||||||||
Inventories | 1,678 | 1,678 | |||||||||
Property, plant and equipment | 1,684 | 1,684 | |||||||||
Prepaid expenses & other | 0 | 0 | |||||||||
Intangible assets | 17,350 | 17,350 | |||||||||
Goodwill | 7,483 | 7,483 | |||||||||
Less: Total liabilities | 987 | 987 | |||||||||
Less: Deferred tax liability, net | 0 | 0 | |||||||||
Total net assets acquired | 27,831 | 27,831 | |||||||||
Contingent consideration liability | 2,500 | $ 2,500 | |||||||||
Net cash paid for business | $ 25,300 | ||||||||||
LaSalle | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Trade receivables | $ 9,002 | ||||||||||
Inventories | 39,344 | ||||||||||
Property, plant and equipment | 8,500 | ||||||||||
Prepaid expenses & other | 6,547 | ||||||||||
Intangible assets | 5,885 | ||||||||||
Goodwill | 10,441 | ||||||||||
Less: Total liabilities | 28,601 | ||||||||||
Less: Deferred tax liability, net | 41 | ||||||||||
Total net assets acquired | 51,077 | ||||||||||
Net purchase price | $ 51,100 | ||||||||||
G.G. Schmitt & Sons, Inc. | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Contingent consideration liability | $ 2,600 | ||||||||||
Net purchase price | 21,100 | ||||||||||
Other | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Trade receivables | 473 | ||||||||||
Inventories | 329 | ||||||||||
Property, plant and equipment | 280 | ||||||||||
Prepaid expenses & other | 13 | ||||||||||
Intangible assets | 1,667 | ||||||||||
Goodwill | 919 | ||||||||||
Less: Total liabilities | 195 | ||||||||||
Less: Deferred tax liability, net | 0 | ||||||||||
Total net assets acquired | 3,486 | ||||||||||
Acquired Entities | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Trade receivables | 2,245 | 2,245 | 32,154 | ||||||||
Inventories | 5,296 | 5,296 | 91,723 | ||||||||
Property, plant and equipment | 1,650 | 1,650 | 46,845 | ||||||||
Prepaid expenses & other | 133 | 133 | 8,349 | ||||||||
Intangible assets | 8,329 | 8,329 | 139,917 | ||||||||
Goodwill | 7,177 | 7,177 | 93,287 | ||||||||
Less: Total liabilities | 1,135 | 1,135 | 50,385 | ||||||||
Less: Deferred tax liability, net | 0 | 0 | 7,808 | ||||||||
Total net assets acquired | $ 23,695 | $ 23,695 | $ 354,082 |
ACQUISITIONS - Pro Forma Inform
ACQUISITIONS - Pro Forma Information Related to Acquisitions (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Business Combinations [Abstract] | ||||
Revenue | $ 571,734 | $ 660,873 | $ 1,806,933 | $ 2,049,540 |
Net income | $ 21,346 | $ 30,377 | $ 70,067 | $ 103,502 |
Basic net income per common share (in dollars per share) | $ 0.93 | $ 1.27 | $ 3.04 | $ 4.26 |
Diluted net income per common share (in dollars per share) | $ 0.92 | $ 1.25 | $ 3.01 | $ 4.20 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Payment Arrangement [Abstract] | ||||
Share-based compensation expense | $ 3.8 | $ 3.5 | $ 12 | $ 10.9 |
Granted shares (in shares) | 376,186 | |||
Unrecognized compensation cost | $ 23.8 | $ 23.8 | ||
Weighted average recognition period | 1 year 6 months |
NET INCOME PER COMMON SHARE - I
NET INCOME PER COMMON SHARE - Income Per Share Calculation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Earnings Per Share [Abstract] | ||||
Net income for basic and diluted per share calculation | $ 21,317 | $ 27,934 | $ 69,582 | $ 92,862 |
Weighted average shares outstanding - basic (in shares) | 23,076 | 23,894 | 23,073 | 24,279 |
Effect of potentially dilutive securities (in shares) | 197 | 338 | 206 | 340 |
Weighted average common shares outstanding - diluted (in shares) | 23,273 | 24,232 | 23,279 | 24,619 |
Basic net income per common share (in dollars per share) | $ 0.92 | $ 1.17 | $ 3.02 | $ 3.82 |
Diluted net income per common share (in dollars per share) | $ 0.92 | $ 1.15 | $ 2.99 | $ 3.77 |
DEBT - Schedule of Long-term De
DEBT - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Sep. 17, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | |||
Total long-term debt | $ 707,500 | $ 661,082 | |
Senior Notes | 300,000 | 0 | |
Less: Convertible Notes debt discount, net | (25,023) | (30,125) | |
Less: current maturities of long-term debt | (5,000) | (8,750) | |
Less: Term Loan deferred financing costs, net | (570) | (456) | |
Total long-term debt, less current maturities, net | 670,928 | 621,751 | |
Line of Credit | |||
Debt Instrument [Line Items] | |||
Total long-term debt | 135,000 | 392,332 | |
Term Loan | |||
Debt Instrument [Line Items] | |||
Total long-term debt | 100,000 | 96,250 | |
Convertible Debt | |||
Debt Instrument [Line Items] | |||
Total long-term debt | 172,500 | 172,500 | |
7.50% Senior Notes Due 2027 | Senior Notes | |||
Debt Instrument [Line Items] | |||
Debt Issuance Costs, Gross | $ (5,979) | $ (6,000) | $ 0 |
DEBT - Narrative (Details)
DEBT - Narrative (Details) | Sep. 17, 2019USD ($) | Jan. 31, 2018USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($) | Jun. 05, 2018USD ($) |
Line of Credit Facility [Line Items] | ||||||||
Outstanding debt | $ 707,500,000 | $ 707,500,000 | $ 661,082,000 | |||||
Interest paid | 6,900,000 | $ 6,600,000 | 19,700,000 | $ 12,200,000 | ||||
Debt discount | 25,023,000 | 25,023,000 | 30,125,000 | |||||
Line of Credit | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Outstanding debt | 135,000,000 | 135,000,000 | 392,332,000 | |||||
Term Loan | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Outstanding debt | 100,000,000 | 100,000,000 | 96,250,000 | |||||
Convertible Debt | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Outstanding debt | 172,500,000 | $ 172,500,000 | 172,500,000 | |||||
Revolving Credit Facility | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Unused capacity, commitment fee percentage | 0.20% | |||||||
Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Long-term line of credit | $ 135,000,000 | $ 135,000,000 | ||||||
Debt instrument, basis spread on variable rate | 1.50% | |||||||
Debt instrument, effective interest rate | 3.54% | 3.54% | ||||||
Revolving Credit Facility | Line of Credit | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Consolidated leverage ratio | 4.50 | 4.50 | ||||||
7.50% Senior Notes Due 2027 | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Debt Instrument, Redemption Price, Percentage | 100.00% | |||||||
7.50% Senior Notes Due 2027 | Senior Notes | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Aggregate principal amount | $ 300,000,000 | |||||||
Debt instrument, effective interest rate | 7.83% | |||||||
Debt Issuance Costs, Gross | $ 6,000,000 | $ 5,979,000 | $ 5,979,000 | $ 0 | ||||
Debt Instrument, Redemption Price, Percentage | 107.50% | |||||||
Redemption price if company experiences specific kinds of changes in control | 101.00% | |||||||
Stated interest rate | 7.50% | |||||||
2019 Credit Facility | Term Loan | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Aggregate principal amount | $ 100,000,000 | |||||||
Increase in borrowing capacity | 250,000,000 | |||||||
2019 Credit Facility | Revolving Credit Facility | Line of Credit | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Maximum borrowing capacity | 550,000,000 | |||||||
Consolidated leverage ratio | 4 | 4 | ||||||
Consolidated fixed charge coverage ratio | 150.00% | |||||||
2018 Credit Facility | Term Loan | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Aggregate principal amount | $ 100,000,000 | |||||||
Gain (loss) on extinguishment of debt | (700,000) | |||||||
2018 Credit Facility | Revolving Credit Facility | Line of Credit | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Maximum borrowing capacity | $ 800,000,000 | |||||||
Convertible Senior Notes Due 2023 | Convertible Debt | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Aggregate principal amount | $ 172,500,000 | |||||||
Debt instrument, effective interest rate | 5.25% | 5.25% | 5.25% | |||||
Stated interest rate | 1.00% | |||||||
Debt discount | $ 36,000,000 | $ 25,000,000 | $ 25,000,000 | $ 30,100,000 | ||||
Value of Future Cash Flow | 31,900,000 | |||||||
Debt discount portion of issuance cost | $ 4,100,000 | |||||||
Debt conversion ratio | 0.0113785 | |||||||
Maximum | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Debt Instrument, Unused Borrowing Capacity, Fee | $ 0.00225 | |||||||
Maximum | Base Rate | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Debt instrument, basis spread on variable rate | 0.75% | |||||||
Maximum | London Interbank Offered Rate (LIBOR) | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Debt instrument, basis spread on variable rate | 1.75% | |||||||
Maximum | 7.50% Senior Notes Due 2027 | Senior Notes | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Debt Instrument, Redemption Price, Percentage | 40.00% | |||||||
Minimum | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Debt Instrument, Unused Borrowing Capacity, Fee | $ 0.0015 | |||||||
Minimum | Base Rate | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Debt instrument, basis spread on variable rate | 0.00% | |||||||
Minimum | London Interbank Offered Rate (LIBOR) | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Debt instrument, basis spread on variable rate | 1.00% | |||||||
September 30, 2019 through June 30, 2021 | 2019 Credit Facility | Term Loan | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Debt Instrument, Periodic Payment | 1,250,000 | |||||||
September 30, 2021 and Thereafter | 2019 Credit Facility | Term Loan | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Debt Instrument, Periodic Payment | $ 2,500,000 |
DERIVATIVE FINANCIAL INSTRUME_3
DERIVATIVE FINANCIAL INSTRUMENTS - Narrative (Details) $ in Millions | Sep. 30, 2019USD ($) |
Designated as Hedging Instrument | Interest Rate Swap | |
Derivative [Line Items] | |
Derivative amount | $ 200 |
DERIVATIVE FINANCIAL INSTRUME_4
DERIVATIVE FINANCIAL INSTRUMENTS - Derivative Assets and Liabilities at Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Designated as Hedging Instrument | Interest Rate Swap | ||
Derivative [Line Items] | ||
Fair value of derivative instruments | $ 6,974 | $ 2,652 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - Schedule of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning Balance | $ 408,754 | |||
Other comprehensive loss (net of tax of $1,098, $0 and $0) | $ (221) | $ 52 | (3,273) | $ 49 |
Ending Balance | 479,938 | 479,938 | ||
Accumulated Other Comprehensive Income (Loss) | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning Balance | (5,732) | 63 | (2,680) | 66 |
Ending Balance | (5,953) | 115 | (5,953) | 115 |
Cash Flow Hedges | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning Balance | (4,958) | 0 | (1,973) | 0 |
Other comprehensive loss (net of tax of $1,098, $0 and $0) | (240) | 80 | (3,225) | 80 |
Ending Balance | (5,198) | 80 | (5,198) | 80 |
Other Comprehensive Income (Loss), Tax | 83 | 28 | 1,098 | 28 |
Defined Benefit Pension | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning Balance | (675) | 66 | (675) | 66 |
Other comprehensive loss (net of tax of $1,098, $0 and $0) | 0 | 0 | 0 | 0 |
Ending Balance | (675) | 66 | (675) | 66 |
Other Comprehensive Income (Loss), Tax | 0 | 0 | 0 | 0 |
Foreign Currency Items | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning Balance | (99) | (3) | (32) | 0 |
Other comprehensive loss (net of tax of $1,098, $0 and $0) | 19 | (28) | (48) | (31) |
Ending Balance | (80) | (31) | (80) | (31) |
Other Comprehensive Income (Loss), Tax | $ 0 | $ 0 | $ 0 | $ 0 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) | Sep. 30, 2019 |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 4 years 14 days |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 11 years |
LEASES - Lease Expense, Supplem
LEASES - Lease Expense, Supplemental Cash Flow and Other Lease Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Leases [Abstract] | ||
Operating lease cost | $ 7,848 | $ 23,536 |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows for operating leases | 6,946 | 20,545 |
Right-of-use assets obtained in exchange for lease obligations: | ||
Operating leases | $ 5,522 | $ 14,767 |
LEASES - Lease Assets and Liabi
LEASES - Lease Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Assets | ||
Operating lease right-of-use assets | $ 81,064 | $ 0 |
Liabilities | ||
Operating lease liabilities, current portion | 25,990 | 0 |
Long-term operating lease liabilities | 55,553 | $ 0 |
Total lease liabilities | $ 81,543 | |
Weighted average remaining lease term, operating leases (in years) | 4 years 14 days | |
Weighted average discount rate, operating leases | 3.83% |
LEASES - Operating Lease Liabil
LEASES - Operating Lease Liability Maturity (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Leases [Abstract] | |
2019 (excluding the nine months ended September 29, 2019) | $ 8,150 |
2020 | 26,916 |
2021 | 20,512 |
2022 | 13,556 |
2023 | 8,954 |
Thereafter | 10,158 |
Total lease payments | 88,246 |
Less imputed interest | (6,703) |
Total lease liabilities | $ 81,543 |
LEASES - Future Minimum Lease P
LEASES - Future Minimum Lease Payments (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Leases [Abstract] | |
2019 | $ 29,345 |
2020 | 23,344 |
2021 | 16,165 |
2022 | 9,602 |
2023 | 5,357 |
Thereafter | 4,883 |
Total | $ 88,696 |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and Cash Equivalents, Fair Value Disclosure | $ 108 | |
Fair Value, Inputs, Level 2 | Convertible Debt | Convertible Senior Notes Due 2023 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of convertible debt | $ 152.1 | $ 130.3 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 26.00% | 25.30% | 24.60% | 23.60% |
Excess tax benefit tax | $ 0.9 | $ 2.2 | ||
Income taxes paid | $ 7.4 | $ 5.6 | $ 30 | $ 21 |
SEGMENT INFORMATION - Sales and
SEGMENT INFORMATION - Sales and Operating Income of Segments (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)segment | Sep. 30, 2018USD ($) | |
Segment Reporting Information [Line Items] | ||||
Number of Reportable Segments (in segments) | segment | 2 | |||
Total sales | $ 566,186 | $ 575,139 | $ 1,787,622 | $ 1,731,850 |
Operating income | 37,410 | 44,709 | 118,465 | 139,522 |
Intersegment sales | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | 9,180 | 9,279 | 27,514 | 30,304 |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | 575,366 | 584,418 | 1,815,136 | 1,762,154 |
Operating income | 51,394 | 62,493 | 163,709 | 197,891 |
Manufacturing | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | 399,712 | 445,214 | 1,259,671 | 1,344,088 |
Manufacturing | Intersegment sales | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | 8,102 | 8,182 | 24,153 | 27,464 |
Manufacturing | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | 407,814 | 453,396 | 1,283,824 | 1,371,552 |
Operating income | 42,353 | 54,887 | 135,577 | 172,799 |
Distribution | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | 166,474 | 129,925 | 527,951 | 387,762 |
Distribution | Intersegment sales | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | 1,078 | 1,097 | 3,361 | 2,840 |
Distribution | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | 167,552 | 131,022 | 531,312 | 390,602 |
Operating income | $ 9,041 | $ 7,606 | $ 28,132 | $ 25,092 |
SEGMENT INFORMATION - Reconcili
SEGMENT INFORMATION - Reconciliation of Segment Operating Income to Consolidated Operating Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Segment Reporting Information [Line Items] | ||||
OPERATING INCOME | $ 37,410 | $ 44,709 | $ 118,465 | $ 139,522 |
Unallocated corporate expenses | (66,925) | (61,946) | (205,079) | (179,679) |
Amortization | (9,191) | (8,873) | (26,448) | (25,140) |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
OPERATING INCOME | 51,394 | 62,493 | 163,709 | 197,891 |
Segment Reconciling Items | ||||
Segment Reporting Information [Line Items] | ||||
Unallocated corporate expenses | 4,793 | 8,911 | 18,796 | 33,229 |
Amortization | $ 9,191 | $ 8,873 | $ 26,448 | $ 25,140 |
STOCK REPURCHASE PROGRAMS - Nar
STOCK REPURCHASE PROGRAMS - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Equity [Abstract] | |||||
Authorized share repurchase program amount | $ 50,000,000 | ||||
Additional authorized share repurchase program amount | 87,900,000 | ||||
Remaining authorized shares to be purchased amount | $ 26,700,000 | ||||
Shares repurchased (in shares) | 98,201 | 347,235 | 98,201 | 1,282,930 | |
Average cost per share repurchased (in dollars per share) | $ 36.50 | $ 60.32 | $ 36.50 | $ 58.48 | |
Cost to repurchase the company's common stock | $ 3,600,000 | $ 20,900,000 | $ 0 | ||
Shares repurchased amount | $ 75,000,000 | $ 75,000,000 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2019USD ($)employee | |
Board Member | |
Related Party Transaction [Line Items] | |
Number of independent board members with transactions with the Company | employee | 2 |
Welch Packaging Group | |
Related Party Transaction [Line Items] | |
Purchases from related parties | $ 0.8 |
DNA Enterprise Inc | |
Related Party Transaction [Line Items] | |
Revenue from related parties | $ 0.4 |