Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 07, 2018 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | BMC Stock Holdings, Inc. | |
Entity Central Index Key | 1,574,815 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 67,236,082 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash and cash equivalents | $ 9,002 | $ 11,750 |
Accounts receivable, net of allowances | 353,749 | 322,892 |
Inventories, net | 338,767 | 309,060 |
Contract assets | 36,613 | 0 |
Costs in excess of billings on uncompleted contracts | 0 | 28,738 |
Income taxes receivable | 2,288 | 3,748 |
Prepaid expenses and other current assets | 55,055 | 57,949 |
Total current assets | 795,474 | 734,137 |
Property and equipment, net of accumulated depreciation | 295,897 | 295,820 |
Customer relationship intangible assets, net of accumulated amortization | 169,783 | 166,306 |
Other intangible assets, net of accumulated amortization | 1,222 | 1,306 |
Goodwill | 263,999 | 261,792 |
Other long-term assets | 17,133 | 13,989 |
Total assets | 1,543,508 | 1,473,350 |
Current liabilities | ||
Accounts payable | 216,558 | 174,583 |
Accrued expenses and other liabilities | 83,052 | 96,262 |
Contract liabilities | 29,089 | 0 |
Billings in excess of costs on uncompleted contracts | 0 | 18,428 |
Interest payable | 9,597 | 4,769 |
Current portion: Long-term debt and capital lease obligations | 7,373 | 7,739 |
Current portion: Insurance reserves | 13,786 | 13,496 |
Total current liabilities | 359,455 | 315,277 |
Insurance reserves | 38,251 | 38,470 |
Long-term debt | 356,971 | 349,059 |
Long-term portion of capital lease obligations | 13,146 | 14,838 |
Deferred income taxes | 5,578 | 1,768 |
Other long-term liabilities | 6,532 | 7,039 |
Total liabilities | 779,933 | 726,451 |
Commitments and contingencies (Note 8) | ||
Stockholders' equity | ||
Preferred stock, $0.01 par value, 50.0 million shares authorized, no shares issued and outstanding at March 31, 2018 and December 31, 2017 | 0 | 0 |
Common stock, $0.01 par value, 300.0 million shares authorized, 67.5 million and 67.3 million shares issued, and 67.2 million and 67.1 million outstanding at March 31, 2018 and December 31, 2017, respectively | 675 | 673 |
Additional paid-in capital | 661,818 | 659,440 |
Retained earnings | 105,966 | 90,607 |
Treasury stock, at cost, 0.3 million and 0.2 million shares at March 31, 2018 and December 31, 2017, respectively | (4,884) | (3,821) |
Total stockholders' equity | 763,575 | 746,899 |
Total liabilities and stockholders' equity | $ 1,543,508 | $ 1,473,350 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares shares in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Stockholders' Equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 50 | 50 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 300 | 300 |
Common stock, shares issued (in shares) | 67.5 | 67.3 |
Common stock, shares outstanding (in shares) | 67.2 | 67.1 |
Treasury stock, shares | 0.3 | 0.2 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Net sales | ||
Building products | $ 645,954 | $ 572,120 |
Construction services | 188,248 | 185,580 |
Net sales | 834,202 | 757,700 |
Cost of sales | ||
Building products | 480,301 | 426,083 |
Construction services | 154,817 | 153,420 |
Cost of sales | 635,118 | 579,503 |
Gross profit | 199,084 | 178,197 |
Selling, general and administrative expenses | 160,204 | 148,888 |
Depreciation expense | 9,506 | 10,561 |
Amortization expense | 3,657 | 3,821 |
Merger and integration costs | 1,687 | 4,441 |
Total operating expenses | 175,054 | 167,711 |
Income from operations | 24,030 | 10,486 |
Other income (expense) | ||
Interest expense | (5,982) | (6,088) |
Other income, net | 1,950 | 319 |
Income before income taxes | 19,998 | 4,717 |
Income tax expense | 4,639 | 973 |
Net income | $ 15,359 | $ 3,744 |
Weighted average common shares outstanding | ||
Basic (in shares) | 67,138 | 66,692 |
Diluted (in shares) | 67,664 | 67,186 |
Net income per common share | ||
Basic (in dollars per share) | $ 0.23 | $ 0.06 |
Diluted (in dollars per share) | $ 0.23 | $ 0.06 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities | ||
Net income | $ 15,359 | $ 3,744 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation expense | 12,024 | 12,992 |
Amortization of intangible assets | 3,657 | 3,821 |
Amortization of debt issuance costs | 421 | 421 |
Deferred income taxes | 3,810 | 760 |
Non-cash stock compensation expense | 1,775 | 1,231 |
Loss on sale of property, equipment and real estate | 38 | 107 |
Other non-cash adjustments | 619 | (314) |
Change in assets and liabilities, net of effects of acquisitions | ||
Accounts receivable, net of allowances | (33,462) | (29,086) |
Inventories, net | (24,042) | (22,030) |
Accounts payable | 40,212 | 30,868 |
Other assets and liabilities | 2,801 | (6,420) |
Net cash provided by (used in) operating activities | 23,212 | (3,906) |
Cash flows from investing activities | ||
Purchases of businesses, net of cash acquired | (20,970) | (6,693) |
Purchases of property, equipment and real estate | (10,244) | (10,662) |
Insurance proceeds | 1,991 | 0 |
Proceeds from sale of property, equipment and real estate | 127 | 866 |
Net cash used in investing activities | (29,096) | (16,489) |
Cash flows from financing activities | ||
Proceeds from revolving line of credit | 235,345 | 175,058 |
Repayments of proceeds from revolving line of credit | (227,616) | (155,313) |
Payments on capital leases obligations | (2,059) | (2,667) |
Principal payments on other notes | 25 | 2,557 |
Other financing activities, net | (2,509) | 1,735 |
Net cash provided by financing activities | 3,136 | 16,256 |
Net decrease in cash and cash equivalents | (2,748) | (4,139) |
Cash and cash equivalents | ||
Beginning of period | 11,750 | 8,917 |
End of period | 9,002 | 4,778 |
Supplemental disclosure of non-cash investing and financing transactions | ||
Acquisition-related holdback payments due at future date | 1,460 | 375 |
Assets acquired under capital lease obligations | $ 0 | $ 1,765 |
Organization
Organization | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization These unaudited financial statements represent the financial statements of BMC Stock Holdings, Inc. and its subsidiaries. All references to “BMC” or the “Company” mean BMC Stock Holdings, Inc. The Company distributes lumber and building materials to new construction and repair and remodeling contractors. Additionally, the Company provides solution-based services to its customers, including component design, product specification and installation services. |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) that permit reduced disclosure for interim periods. The condensed consolidated balance sheet as of December 31, 2017 was derived from audited financial statements, but does not include all necessary disclosures required by accounting principles generally accepted in the United States of America (“GAAP”). The unaudited condensed consolidated financial statements include all accounts of the Company and its subsidiaries and, in the opinion of management, include all recurring adjustments and normal accruals necessary for a fair statement of the Company’s financial position, results of operations and cash flows for the dates and periods presented. These unaudited financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 (“ 2017 Annual Report on Form 10-K”). Results for interim periods are not necessarily indicative of the results to be expected during the remainder of the current year or for any future period. All material intercompany accounts and transactions have been eliminated in consolidation. Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation. Comprehensive income Comprehensive income is equal to the net income for all periods presented. Recently adopted accounting pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers, and issued subsequent amendments to the initial guidance to provide additional clarification on specific topics (“Topic 606”). Topic 606 provides a comprehensive revenue recognition model requiring companies to recognize revenue for the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. The Company adopted Topic 606 on January 1, 2018 using the modified retrospective transition method. See Note 6 for further details. In August 2016, the FASB issued Accounting Standards Update 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”). ASU 2016-15 was issued to decrease the diversity in practice of how certain cash receipts and cash payments are presented and classified in the statement of cash flows by providing guidance on eight specific cash flow issues. Retrospective application is required. ASU 2016-15 became effective for the Company’s annual and interim periods beginning on January 1, 2018. The adoption of the standard did not have an impact on the Company’s current or historical financial statements. In November 2016, the FASB issued Accounting Standards Update 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”). ASU 2016-18 requires that the statement of cash flows include restricted cash in the beginning and end-of-period total amounts shown and that the statement of cash flows explain the changes in restricted cash during the period. Retrospective application is required. ASU 2016-18 became effective for the Company's annual and interim periods beginning on January 1, 2018. The adoption of the standard did not have an impact on the Company’s current or historical financial statements. In January 2017, the FASB issued Accounting Standards Update 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”). ASU 2017-01 provides guidance in determining when a set of assets and activities meets the definition of a business. Prospective application is required. ASU 2017-01 became effective for the Company's annual and interim periods beginning on January 1, 2018. The adoption of the standard did not have an impact on the Company’s current financial statements. In February 2017, the FASB issued Accounting Standards Update 2017-05, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets (“ASU 2017-05”). ASU 2017-05 clarifies the scope of Subtopic 610-20, which provides guidance for recognizing gains and losses from the sale or transfer of nonfinancial assets in contracts with noncustomers. ASU 2017-05 also provides guidance for partial sales of nonfinancial assets. ASU 2017-05 became effective for the Company’s annual and interim periods beginning on January 1, 2018. The adoption of the standard did not have an impact on the Company’s current or historical financial statements. In May 2017, the FASB issued Accounting Standards Update 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting (“ASU 2017-09”). ASU 2017-09 provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting under Accounting Standards Codification (“ASC”) 718. ASU 2017-09 is to be applied prospectively to an award modified on or after the adoption date. ASU 2017-09 became effective for the Company’s annual and interim periods beginning on January 1, 2018. The adoption of the standard did not have an impact on the Company’s current financial statements. In March 2018, the FASB issued Accounting Standards Update 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (“ASU 2018-05”). ASU 2018-05 adds paragraphs to the codification pursuant to SEC Staff Accounting Bulletin No. 118, which addresses the application of GAAP in situations when a company does not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Cuts and Jobs Act (the “2017 Tax Act”). ASU 2018-05 provides entities with a one year measurement period from the December 22, 2017 enactment date in order to complete the accounting. The Company recognized a provisional net tax benefit of $3.6 million related to the impact of the 2017 Tax Act during the year ended December 31, 2017. The Company may record additional provisional amounts or adjustments to provisional amounts during the measurement period. Recently issued accounting pronouncements not yet adopted In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases (“ASU 2016-02”). ASU 2016-02 establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. ASU 2016-02 is effective for the Company’s annual and interim periods beginning on January 1, 2019. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company is in the process of evaluating the impact of the standard on the Company’s financial statements. As a lessee, certain of the Company’s various leases under existing guidance are classified as operating leases that are not recorded on the balance sheet but are recorded in the statement of operations as expense is incurred. Upon adoption of the standard, the Company will be required to record substantially all leases on the balance sheet as a ROU asset and a lease liability. The timing of expense recognition and classification in the statement of operations could change based on the classification of leases as either operating or financing. In January 2017, the FASB issued Accounting Standards Update 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”). ASU 2017-04 simplifies the accounting for goodwill impairment by removing Step 2 of the goodwill impairment test, which requires computation of the implied fair value of a reporting unit's goodwill. The amount of a goodwill impairment will now be the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. ASU 2017-04 is effective for the Company's annual goodwill impairment test and any interim tests during the Company's annual and interim periods beginning on January 1, 2020. Early adoption is permitted for goodwill impairment tests performed on testing dates after January 1, 2017. Prospective application is required. The adoption of the standard is not expected to have a material impact on the Company’s financial statements. |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions For all acquisitions, the Company allocates the purchase price to assets acquired and liabilities assumed as of the date of acquisition based on the estimated fair values at the date of acquisition. The excess of the fair value of the purchase consideration over the fair values of the identifiable assets and liabilities is recorded as goodwill. Management makes significant estimates and assumptions when determining the fair value of assets acquired and liabilities assumed. These estimates include, but are not limited to, discount rates, projected future net sales, projected future expected cash flows and useful lives. Acquisition of W.E. Shone Co. On March 1, 2018 , the Company acquired substantially all of the assets and assumed certain liabilities of W.E. Shone Co. (“Shone Lumber”), a supplier of building materials in the state of Delaware, for a preliminary purchase price of $22.4 million . This acquisition enhances the Company’s value-added offerings and footprint in the Mid-Atlantic region. The preliminary purchase price includes a holdback which, after certain post-closing adjustments, requires the Company to pay $1.5 million to the sellers one year from the closing date. The holdback amount may be further reduced under certain circumstances. The Company funded the transaction through available cash and borrowings on the Company’s revolving line of credit. The acquisition was accounted for using the acquisition method of accounting under ASC 805, Business Combinations, whereby the results of operations of Shone Lumber are included in the Company’s consolidated financial statements beginning on the acquisition date. The preliminary purchase price allocation resulted in the initial recognition of goodwill of $2.2 million , a customer relationship intangible asset of $7.1 million , accounts receivable of $6.4 million , inventory of $8.8 million , property and equipment of $3.1 million and total current liabilities of $5.2 million , as well as other operating assets. The customer relationship intangible asset has a useful life of 9 years . Goodwill represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition, including assembled workforce and non-contractual relationships, as well as expected future synergies. All of the goodwill recognized is expected to be deductible for tax purposes. The purchase price allocation of Shone Lumber is preliminary and based upon all information available to the Company at the present time, and is subject to change. The Company is in the process of finalizing its valuation of the acquired intangible assets, property and equipment and inventory, and therefore, the initial purchase accounting is not complete. As the Company receives additional information during the measurement period, the fair values assigned to the assets and liabilities may be adjusted. For the year ended December 31, 2017, Shone Lumber generated net sales of approximately $70.7 million . The Company incurred transaction costs of $0.2 million for the three months ended March 31, 2018 . Net sales and estimated pre-tax earnings for Shone Lumber included in the unaudited condensed consolidated statements of operations from the March 1, 2018 acquisition date to March 31, 2018 were $5.4 million and $0.3 million , respectively. The impact of the acquisition was not considered significant for the reporting of pro forma financial information. Acquisition of Code Plus Components, LLC On March 27, 2017 , the Company acquired substantially all of the assets and assumed certain liabilities of Code Plus Components, LLC (“Code Plus”), a manufacturer of structural components located in Martinsburg, West Virginia, for a purchase price of $7.1 million . This acquisition allowed the Company to add truss manufacturing capability to its value-added offerings in the Washington, DC metro area. The acquisition includes an earnout provision that would require the Company to pay the sellers up to an additional $0.8 million upon the acquired operations achieving certain performance targets from the acquisition date through December 31, 2018. The Company funded the transaction through borrowings on the Company’s revolving line of credit. The acquisition was accounted for using the acquisition method of accounting under ASC 805, Business Combinations, whereby the results of operations of Code Plus are included in the Company’s consolidated financial statements beginning on the acquisition date. The purchase price allocation resulted in the recognition of goodwill of $3.4 million , a customer relationship intangible asset of $2.3 million and a non-compete agreement intangible asset of $0.5 million , as well as other operating assets and liabilities. The customer relationship intangible asset and non-compete agreement intangible asset have useful lives of 12 years and 5 years , respectively. Goodwill represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition, including assembled workforce and non-contractual relationships, as well as expected future synergies. All of the goodwill recognized is expected to be deductible for tax purposes. The results of operations of Code Plus included in the Company’s unaudited condensed consolidated statements of operations for the three months ended March 31, 2017 were not material. The impact of the acquisition was not significant for the reporting of pro forma financial information. |
Accounts Receivable
Accounts Receivable | 3 Months Ended |
Mar. 31, 2018 | |
Receivables [Abstract] | |
Accounts Receivable | Accounts Receivable Accounts receivable consist of the following at March 31, 2018 and December 31, 2017 : (in thousands) March 31, December 31, Trade receivables $ 361,722 $ 333,954 Allowance for doubtful accounts (5,333 ) (4,771 ) Sales returns allowance (a) — (4,127 ) Other allowances (2,640 ) (2,164 ) $ 353,749 $ 322,892 (a) Effective January 1, 2018, as part of the Company’s adoption of Topic 606, the Company has recorded a liability for estimated returns of inventory as a refund liability within accrued expenses and other liabilities. These balances were previously presented as an allowance within accounts receivable. See Note 6 for further details. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Debt Long-term debt as of March 31, 2018 and December 31, 2017 consists of the following: (in thousands) March 31, December 31, Senior secured notes, due 2024 $ 350,000 $ 350,000 Revolving credit agreement 12,191 4,462 Other 311 336 362,502 354,798 Unamortized debt issuance costs related to senior secured notes (5,430 ) (5,639 ) 357,072 349,159 Less: Current portion of long-term debt 101 100 $ 356,971 $ 349,059 Senior Secured Notes On September 15, 2016 , the Company issued $350.0 million of senior secured notes due 2024 (the “Senior Notes”) under an unregistered private placement not subject to the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”). The Senior Notes were issued by BMC East, LLC, a 100% owned subsidiary of the Company, and are guaranteed by the Company and the other subsidiaries that guarantee the Credit Agreement (as defined below). Each of the subsidiary guarantors is 100% owned, directly or indirectly, by the Company, and all guarantees are full and unconditional and joint and several. The interest rate is fixed at 5.5% and is payable semiannually on April 1 and October 1 . As of March 31, 2018 , the estimated market value of the Senior Notes approximated the carrying amount. The fair value is based on institutional trading activity and was classified as a Level 2 measurement in accordance with ASC 820. Revolving Credit Agreement On December 1, 2015 , the Company entered into a senior secured credit agreement with Wells Fargo Capital Finance, as administrative agent, and certain other lenders (the “Original Credit Agreement”), which includes a revolving line of credit (the “Revolver”). The Original Credit Agreement, as amended (the “Credit Agreement”), has an aggregate commitment of $375.0 million . The Company had outstanding borrowings under the Revolver of $12.2 million with net availability of $301.5 million as of March 31, 2018 . The interest rate on borrowings outstanding as of March 31, 2018 , all of which were base rate borrowings, was 5.0% . The Company had $61.3 million in letters of credit outstanding under the Credit Agreement as of March 31, 2018 . The carrying value of the Revolver at March 31, 2018 approximates fair value as the rates are comparable to those at which the Company could currently borrow under similar terms, are variable and incorporate a measure of the Company’s credit risk. As such, the fair value of the Revolver was classified as a Level 2 measurement in accordance with ASC 820. Other Other long-term debt as of March 31, 2018 consists of a $0.3 million term note secured by real property with a maturity of February 2021 . The interest rate is 7.0% and is paid monthly. The estimated market value of other long-term debt approximates the carrying amount. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue [Text Block] | Revenue Adoption of Topic 606 On January 1, 2018, the Company adopted Topic 606 using the modified retrospective method applied to those contracts that were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with the Company’s historic accounting policy under Topic 605, Revenue Recognition. The impact of adopting Topic 606 was not material to the Company’s results of operations for the three months ended March 31, 2018 and as such, comparability between periods is not materially affected. Beginning January 1, 2018, the Company has presented contract assets and contract liabilities on its unaudited condensed consolidated balance sheets, determined on a contract-by-contract basis. Contract assets contain rights to payment that are conditional on something other than the passage of time, such as retainage, which were historically presented within accounts receivable, net of allowances, as well as the balances that were historically presented within costs in excess of billings on uncompleted contracts on the Company’s consolidated balance sheets. Contract liabilities contain advances from customers, which were historically presented within accrued expenses and other liabilities, as well as the balances that were historically presented within billings in excess of costs on uncompleted contracts on the Company’s consolidated balance sheets. Refer to further discussion of the Company’s contract assets and contract liabilities below. Additionally, beginning January 1, 2018, the Company has presented a return asset, which represents inventory the Company expects to receive from customers related to estimated sales returns, within prepaid expenses and other current assets on the Company’s unaudited condensed consolidated balance sheets. This balance was previously presented within inventories, net on the Company’s consolidated balance sheets. Conversely, the Company has recorded a refund liability for estimated returns of inventory within accrued expenses and other liabilities on the Company’s unaudited condensed consolidated balance sheets. These balances were previously presented as an allowance within accounts receivable, net of allowances on the Company’s consolidated balance sheets. The following table reflects the cumulative impact of adoption of Topic 606. As the cumulative impact of adopting Topic 606 on the Company’s historical results of operations was less than $0.1 million , the Company did not record an adjustment to opening retained earnings as of January 1, 2018. (in thousands) December 31, 2017 Adoption of Topic 606 January 1, 2018 Accounts receivable, net of allowances $ 322,892 $ (8,884 ) $ 314,008 Inventories, net 309,060 (3,128 ) 305,932 Contract assets — 38,557 38,557 Costs in excess of billings on uncompleted contracts 28,738 (28,738 ) — Prepaid expenses and other current assets 57,949 3,128 61,077 Total assets 1,473,350 935 1,474,285 Accrued expenses and other liabilities 96,262 (6,967 ) 89,295 Contract liabilities — 26,330 26,330 Billings in excess of costs on uncompleted contracts 18,428 (18,428 ) — Total liabilities 726,451 935 727,386 Total liabilities and stockholders' equity $ 1,473,350 $ 935 $ 1,474,285 The following table reflects the impact of adoption of Topic 606 on the Company’s financial position as of March 31, 2018 . (in thousands) Balances without Adoption of Topic 606 Adjustments As Reported Accounts receivable, net of allowances $ 361,631 $ (7,882 ) $ 353,749 Inventories, net 342,735 (3,968 ) 338,767 Contract assets — 36,613 36,613 Costs in excess of billings on uncompleted contracts 26,912 (26,912 ) — Prepaid expenses and other current assets 51,087 3,968 55,055 Total assets 1,541,689 1,819 1,543,508 Accrued expenses and other liabilities 89,700 (6,648 ) 83,052 Contract liabilities — 29,089 29,089 Billings in excess of costs on uncompleted contracts 20,622 (20,622 ) — Total liabilities 778,114 1,819 779,933 Total liabilities and stockholders' equity $ 1,541,689 $ 1,819 $ 1,543,508 Nature of goods and services A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in Topic 606. The Company’s building products contracts typically contain a promise to supply multiple distinct products and thus, they generally contain multiple performance obligations under Topic 606. Depending on the nature of the promises within the Company’s construction services contracts and whether they are distinct under Topic 606, there may be a single performance obligation or multiple performance obligations. For contracts with multiple performance obligations, the contract’s transaction price is allocated to each distinct performance obligation based on the standalone selling price of each distinct good or service, which is generally determined based on the prices charged to customers. The Company recognizes revenue for its building products contracts when control of the promised goods (the performance obligations) is transferred to the Company’s customers. This generally occurs at a point in time when the products are delivered and the customer obtains physical possession, legal title and the risks and rewards of ownership. However, for certain product offerings, products are customized to customer specifications and the customer benefits from the Company’s performance over time as deliveries are made. As such, the Company has determined that an output method based on units delivered best depicts the transfer of control to the customer. The Company generally recognizes revenue for its construction services contracts over time using cost based input methods. Periodic estimates of progress towards completion are made based on either a comparison of labor costs incurred to date with total estimated contract labor costs or total costs incurred to date with total estimated contract costs. Incurred costs represent work performed, which correspond and best depict transfer of control to the customer. Contract revenues and contract costs to be recognized are dependent on the accuracy of estimates, including quantities of materials, labor productivity and other cost estimates. Historically, the Company has made reasonable estimates of the extent of progress towards completion and contract completion costs. Due to uncertainties inherent in the estimation process, it is possible that actual completion costs may vary from estimates. Revenue recognized for performance obligations satisfied over time for the three months ended March 31, 2018 represented approximately 27% of total revenues for the period. Estimated losses on uncompleted contracts and changes in contract estimates reflect the Company's best estimate of probable losses of unbilled receivables, and are recognized in the period such revisions are known and can be reasonably estimated. These estimates are recognized in cost of sales. Estimated losses on uncompleted contracts and changes in contract estimates are established by assessing estimated costs to complete, change orders and claims for uncompleted contracts. Assumptions for estimated costs to complete include material prices, labor costs, labor productivity and contract claims. Such estimates are inherently uncertain and it is possible that actual completion costs may vary from these estimates. All sales recognized are net of allowances for discounts and estimated returns, based on historical experience. Taxes assessed by governmental authorities that are directly imposed on the Company’s revenue-producing transactions are excluded from sales. The Company accounts for shipping and handling costs associated with its contracts as a fulfillment cost and expenses these as incurred within selling, general and administrative expenses on the unaudited condensed consolidated statements of operations. Disaggregation of revenue The following tables present the Company’s net sales disaggregated by major product category and customer type. As noted above, prior period amounts have not been adjusted under the modified retrospective method and continue to be reported in accordance with the Company’s historic accounting policy under Topic 605. The following table shows net sales classified by major product category for the three months ended March 31, 2018 and 2017 : Three Months Ended March 31, (in thousands) 2018 2017 Structural components $ 135,829 $ 109,891 Lumber & lumber sheet goods 288,086 244,436 Millwork, doors & windows 229,518 210,751 Other building products & services 180,769 192,622 Total net sales $ 834,202 $ 757,700 The following table reflects the Company’s estimate of net sales by each customer type for the three months ended March 31, 2018 and 2017 : Three Months Ended March 31, (in thousands) 2018 2017 Single-family homebuilders $ 637,308 $ 559,589 Remodeling contractors 95,451 82,075 Multi-family, commercial & other contractors 101,443 116,036 Total net sales $ 834,202 $ 757,700 Contract balances The timing of revenue recognition, invoicing and cash collection affects receivables, contract assets and contract liabilities on the Company’s unaudited condensed consolidated balance sheets. For building products contracts that contain performance obligations satisfied at a point in time, the Company recognizes revenue upon satisfaction of the performance obligation and then bills the customer, resulting in a receivable. For building products contracts that contain performance obligations satisfied over time, the Company recognizes revenue as the performance obligation is satisfied, but prior to billing, resulting in an unbilled receivable, as the Company has an unconditional right to payment. For the Company’s construction services contracts, amounts are generally billed as work progresses in accordance with agreed-upon contractual terms. Revenue is also recognized over time as the performance obligations are satisfied, which can result in contract assets and liabilities, on a contract-by-contract basis, due to timing differences between billing and revenue recognition. Contract assets include unbilled amounts when the revenue recognized exceeds the amount billed to the customer. Conversely, contract liabilities include amounts that have been billed to the customer in excess of the revenue recognized. At times, the Company will have a right to payment from previous performance that is conditional on something other than passage of time, such as retainage, which creates a contract asset. Conversely, the Company may receive advances from customers prior to the Company’s performance, which creates a contract liability. Contract assets are reclassified to a receivable when the right to consideration becomes unconditional. The Company’s terms generally provide for payment within 30 days of being invoiced. On occasion, when necessary to compete in certain circumstances, the Company will offer extended payment terms, which do not exceed one year. The following table reflects the Company’s contract balances as of March 31, 2018 and January 1, 2018, the date that the Company adopted Topic 606: (in thousands) March 31, 2018 January 1, 2018 Change Receivables, including unbilled receivables presented in prepaid expenses and other current assets $ 360,696 $ 321,418 $ 39,278 Contract assets 36,613 38,557 (1,944 ) Contract liabilities $ 29,089 $ 26,330 $ 2,759 During the three months ended March 31, 2018, the Company’s contract assets decreased by $1.9 million and the Company’s contract liabilities increased by $2.8 million . The change in contract assets and liabilities was primarily due to the timing of revenue recognition, as the balances were not materially impacted by any other factors. For the three months ended March 31, 2018 , the Company recognized revenue of $21.6 million that was included in contract liabilities as of January 1, 2018. Revenue recognized related to performance obligations that were satisfied or partially satisfied in previous periods was not material for the three months ended March 31, 2018 . Practical Expedients As permitted by Topic 606, the Company has elected to expense any incremental costs of obtaining a contract as incurred as the amortization period would have been one year or less. Additionally, as permitted by Topic 606, the Company has elected not to adjust the promised amount of consideration for a significant financing component as the Company expects that the period of time between the Company’s satisfaction of the performance obligation and the customer’s payment would have been one year or less. Finally, as permitted by Topic 606, the Company has elected not to disclose the value of unsatisfied performance obligations, as the Company’s contracts generally have an original expected length of one year or less. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company evaluates its deferred tax assets quarterly to determine if valuation allowances are required. In assessing the realizability of deferred tax assets, the Company considers both positive and negative evidence in determining whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company had a valuation allowance of $0.1 million against its deferred tax assets related to certain state tax jurisdictions as of March 31, 2018 and December 31, 2017 . To the extent the Company generates future tax net operating losses, the Company may be required to increase the valuation allowance on deferred tax assets, which may unfavorably impact the effective tax rate. The Company has no material uncertain tax positions as of March 31, 2018 and December 31, 2017 . For the three months ended March 31, 2018 , the Company’s effective tax rate was 23.2% , which varied from the federal statutory rate of 21% primarily due to state income tax expense offset by excess tax windfall benefits from stock compensation. For the three months ended March 31, 2017 , the effective tax rate was 20.6% , which varied from the federal statutory rate of 35% primarily due to the excess tax windfall benefit from stock compensation partially offset by state income tax expense. The 2017 Tax Act was enacted in December 2017. The 2017 Tax Act reduced the U.S. federal corporate tax rate from 35% to 21% , among other provisions. The Company has recognized a net tax benefit of $3.6 million related to the impact of the 2017 Tax Act for the remeasurement of deferred tax assets and liabilities and included this amount in its consolidated financial statements for the year ended December 31, 2017, on a provisional basis based on information currently available. The 2017 Tax Act may be subject to technical amendments, as well as interpretations and implementing regulations by the Department of Treasury and Internal Revenue Service, any of which could increase or decrease one or more impacts of the legislation. As such, the Company may record additional provisional amounts or adjustments to provisional amounts during the measurement period ending no later than December 2018. As of March 31, 2018, the Company has not adjusted the provisional estimates recognized in 2017. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies From time to time, various claims, legal proceedings and litigation are asserted or commenced against the Company principally arising from alleged product liability, warranty, casualty, construction defect, contract, tort, employment and other disputes. In determining loss contingencies, management considers the likelihood of loss as well as the ability to reasonably estimate the amount of such loss or liability. An estimated loss is recorded when it is considered probable that such a liability has been incurred and when the amount of loss can be reasonably estimated. It is not certain that the Company will prevail in these matters. However, the Company does not currently believe that the ultimate outcome of any pending matters will have a material adverse effect on its consolidated financial position, results of operations or cash flows. As of March 31, 2018 , the Company has accrued $3.0 million in relation to pending litigation that was recorded during the year ended December 31, 2017. The amount accrued is based upon currently available information, however, the ultimate obligation may be higher. |
Stock Based Compensation
Stock Based Compensation | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Based Compensation | Stock Based Compensation The following table highlights the expense related to stock based compensation for the three months ended March 31, 2018 and 2017 : Three Months Ended March 31, (in thousands) 2018 2017 Restricted stock units (a) $ 1,658 $ 1,004 Restricted stock 91 136 Stock options 26 91 Stock based compensation $ 1,775 $ 1,231 (a) Includes service-based and performance-based restricted stock units. During the three months ended March 31, 2018 , in addition to grants of service-based restricted stock unit awards, the Company granted performance-based restricted stock units that vest in March 2021 . The weighted average grant date fair value of the performance-based restricted stock units was $19.30 . The number of performance-based restricted stock units that are issued on the vesting date could range from zero to a maximum of 0.2 million , based 50% upon the Company’s average return on invested capital (“Average ROIC”) over the three year period from January 1, 2018 through December 31, 2020 and 50% upon the Company’s cumulative adjusted earnings per share (“Adjusted EPS”) over the same three -year period. During the three months ended March 31, 2017 , in addition to grants of service-based restricted stock unit awards, the Company granted performance-based restricted stock units that vest in March 2020 . The weighted average grant date fair value of the performance-based restricted stock units was $21.35 . The number of performance-based restricted stock units that are issued on the vesting date could range from zero to a maximum of 0.2 million , based 50% upon the Company’s Average ROIC over the three year period from January 1, 2017 through December 31, 2019 and 50% upon the Company’s cumulative Adjusted EPS over the same three -year period. |
Segments
Segments | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Segments | Segments ASC 280, Segment Reporting, defines operating segments as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. The Company’s operating segments consist of the Mid-Atlantic, Southeast, Texas, Intermountain and Western divisions. The CODM reviews aggregate information to allocate resources and assess performance. Based on the CODM’s review, as well as the similar economic characteristics, nature of products, distribution methods and customers of the divisions, the Company has aggregated its operating segments into one reportable segment, “Geographic divisions.” In addition to the Company’s reportable segment, the Company’s consolidated results include “Other reconciling items.” Other reconciling items is comprised of the Company’s corporate activities and other income and expenses not allocated to the operating segments. The following tables present Net Sales, Adjusted EBITDA and certain other measures for the reportable segment and total Company operations for the three months ended March 31, 2018 and 2017 . Adjusted EBITDA is used as a performance metric by the CODM in determining how to allocate resources and assess performance. Three Months Ended March 31, 2018 (in thousands) Net Sales Gross Profit Depreciation & Amortization Adjusted EBITDA Geographic divisions $ 834,202 $ 199,084 $ 15,211 $ 63,674 Other reconciling items — — 470 (16,494 ) $ 834,202 $ 199,084 $ 15,681 Three Months Ended March 31, 2017 (in thousands) Net Sales Gross Profit Depreciation & Amortization Adjusted EBITDA Geographic divisions $ 757,700 $ 178,197 $ 16,227 $ 47,403 Other reconciling items — — 586 (13,840 ) $ 757,700 $ 178,197 $ 16,813 Reconciliation to consolidated financial statements: Three Months Ended March 31, (in thousands) 2018 2017 Income before income taxes $ 19,998 $ 4,717 Interest expense 5,982 6,088 Depreciation and amortization 15,681 16,813 Merger and integration costs 1,687 4,441 Non-cash stock compensation expense 1,775 1,231 Acquisition costs 234 273 Other items (a) 1,823 — Adjusted EBITDA of other reconciling items 16,494 13,840 Adjusted EBITDA of geographic divisions reportable segment $ 63,674 $ 47,403 (a) Represents severance and executive search costs incurred in connection with the departure of the Company’s former chief executive officer and the search for his permanent replacement. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic net income per share (“EPS”) is calculated by dividing net income attributable to common stockholders by the weighted average shares outstanding during the period. Diluted EPS is calculated by adjusting weighted average shares outstanding for the dilutive effect of potential common shares, determined using the treasury-stock method. For purposes of the diluted EPS calculation, stock options, restricted stock and restricted stock unit awards are considered to be potential common shares. Performance-based restricted stock units are not included in the calculation of diluted EPS until they are contingently issuable. The basic and diluted EPS calculations for the three months ended March 31, 2018 and 2017 are presented below: Three Months Ended March 31, (in thousands, except per share amounts) 2018 2017 Income attributable to common stockholders $ 15,359 $ 3,744 Weighted average common shares outstanding, basic 67,138 66,692 Effect of dilutive securities: Restricted stock units 299 178 Stock options 172 233 Restricted stock 55 83 Weighted average common shares outstanding, diluted 67,664 67,186 Basic income per common share $ 0.23 $ 0.06 Diluted income per common share $ 0.23 $ 0.06 The following table provides the securities that could potentially dilute EPS in the future, but were not included in the computation of diluted EPS for the periods presented because to do so would have been anti-dilutive. The amounts included in this table exclude performance-based restricted stock units. As of March 31, 2018 , the number of currently outstanding performance-based restricted stock units that are issued upon vesting could range from zero to a maximum of 0.4 million . Three Months Ended March 31, (in thousands) 2018 2017 Restricted stock units 21 21 Stock options — 303 |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of presentation | Basis of Presentation The unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) that permit reduced disclosure for interim periods. The condensed consolidated balance sheet as of December 31, 2017 was derived from audited financial statements, but does not include all necessary disclosures required by accounting principles generally accepted in the United States of America (“GAAP”). The unaudited condensed consolidated financial statements include all accounts of the Company and its subsidiaries and, in the opinion of management, include all recurring adjustments and normal accruals necessary for a fair statement of the Company’s financial position, results of operations and cash flows for the dates and periods presented. These unaudited financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 (“ 2017 Annual Report on Form 10-K”). Results for interim periods are not necessarily indicative of the results to be expected during the remainder of the current year or for any future period. All material intercompany accounts and transactions have been eliminated in consolidation. |
Reclassifications | Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation. |
Comprehensive income | Comprehensive income Comprehensive income is equal to the net income for all periods presented. |
Recently issued accounting pronouncements | Recently adopted accounting pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers, and issued subsequent amendments to the initial guidance to provide additional clarification on specific topics (“Topic 606”). Topic 606 provides a comprehensive revenue recognition model requiring companies to recognize revenue for the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. The Company adopted Topic 606 on January 1, 2018 using the modified retrospective transition method. See Note 6 for further details. In August 2016, the FASB issued Accounting Standards Update 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”). ASU 2016-15 was issued to decrease the diversity in practice of how certain cash receipts and cash payments are presented and classified in the statement of cash flows by providing guidance on eight specific cash flow issues. Retrospective application is required. ASU 2016-15 became effective for the Company’s annual and interim periods beginning on January 1, 2018. The adoption of the standard did not have an impact on the Company’s current or historical financial statements. In November 2016, the FASB issued Accounting Standards Update 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”). ASU 2016-18 requires that the statement of cash flows include restricted cash in the beginning and end-of-period total amounts shown and that the statement of cash flows explain the changes in restricted cash during the period. Retrospective application is required. ASU 2016-18 became effective for the Company's annual and interim periods beginning on January 1, 2018. The adoption of the standard did not have an impact on the Company’s current or historical financial statements. In January 2017, the FASB issued Accounting Standards Update 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”). ASU 2017-01 provides guidance in determining when a set of assets and activities meets the definition of a business. Prospective application is required. ASU 2017-01 became effective for the Company's annual and interim periods beginning on January 1, 2018. The adoption of the standard did not have an impact on the Company’s current financial statements. In February 2017, the FASB issued Accounting Standards Update 2017-05, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets (“ASU 2017-05”). ASU 2017-05 clarifies the scope of Subtopic 610-20, which provides guidance for recognizing gains and losses from the sale or transfer of nonfinancial assets in contracts with noncustomers. ASU 2017-05 also provides guidance for partial sales of nonfinancial assets. ASU 2017-05 became effective for the Company’s annual and interim periods beginning on January 1, 2018. The adoption of the standard did not have an impact on the Company’s current or historical financial statements. In May 2017, the FASB issued Accounting Standards Update 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting (“ASU 2017-09”). ASU 2017-09 provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting under Accounting Standards Codification (“ASC”) 718. ASU 2017-09 is to be applied prospectively to an award modified on or after the adoption date. ASU 2017-09 became effective for the Company’s annual and interim periods beginning on January 1, 2018. The adoption of the standard did not have an impact on the Company’s current financial statements. In March 2018, the FASB issued Accounting Standards Update 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (“ASU 2018-05”). ASU 2018-05 adds paragraphs to the codification pursuant to SEC Staff Accounting Bulletin No. 118, which addresses the application of GAAP in situations when a company does not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Cuts and Jobs Act (the “2017 Tax Act”). ASU 2018-05 provides entities with a one year measurement period from the December 22, 2017 enactment date in order to complete the accounting. The Company recognized a provisional net tax benefit of $3.6 million related to the impact of the 2017 Tax Act during the year ended December 31, 2017. The Company may record additional provisional amounts or adjustments to provisional amounts during the measurement period. Recently issued accounting pronouncements not yet adopted In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases (“ASU 2016-02”). ASU 2016-02 establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. ASU 2016-02 is effective for the Company’s annual and interim periods beginning on January 1, 2019. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company is in the process of evaluating the impact of the standard on the Company’s financial statements. As a lessee, certain of the Company’s various leases under existing guidance are classified as operating leases that are not recorded on the balance sheet but are recorded in the statement of operations as expense is incurred. Upon adoption of the standard, the Company will be required to record substantially all leases on the balance sheet as a ROU asset and a lease liability. The timing of expense recognition and classification in the statement of operations could change based on the classification of leases as either operating or financing. In January 2017, the FASB issued Accounting Standards Update 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”). ASU 2017-04 simplifies the accounting for goodwill impairment by removing Step 2 of the goodwill impairment test, which requires computation of the implied fair value of a reporting unit's goodwill. The amount of a goodwill impairment will now be the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. ASU 2017-04 is effective for the Company's annual goodwill impairment test and any interim tests during the Company's annual and interim periods beginning on January 1, 2020. Early adoption is permitted for goodwill impairment tests performed on testing dates after January 1, 2017. Prospective application is required. The adoption of the standard is not expected to have a material impact on the Company’s financial statements. |
Acquisitions (Policies)
Acquisitions (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions For all acquisitions, the Company allocates the purchase price to assets acquired and liabilities assumed as of the date of acquisition based on the estimated fair values at the date of acquisition. The excess of the fair value of the purchase consideration over the fair values of the identifiable assets and liabilities is recorded as goodwill. Management makes significant estimates and assumptions when determining the fair value of assets acquired and liabilities assumed. These estimates include, but are not limited to, discount rates, projected future net sales, projected future expected cash flows and useful lives. |
Revenue Revenue (Policies)
Revenue Revenue (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue recognition | The Company recognizes revenue for its building products contracts when control of the promised goods (the performance obligations) is transferred to the Company’s customers. This generally occurs at a point in time when the products are delivered and the customer obtains physical possession, legal title and the risks and rewards of ownership. However, for certain product offerings, products are customized to customer specifications and the customer benefits from the Company’s performance over time as deliveries are made. As such, the Company has determined that an output method based on units delivered best depicts the transfer of control to the customer. The Company generally recognizes revenue for its construction services contracts over time using cost based input methods. Periodic estimates of progress towards completion are made based on either a comparison of labor costs incurred to date with total estimated contract labor costs or total costs incurred to date with total estimated contract costs. Incurred costs represent work performed, which correspond and best depict transfer of control to the customer. Contract revenues and contract costs to be recognized are dependent on the accuracy of estimates, including quantities of materials, labor productivity and other cost estimates. Historically, the Company has made reasonable estimates of the extent of progress towards completion and contract completion costs. Due to uncertainties inherent in the estimation process, it is possible that actual completion costs may vary from estimates. Revenue recognized for performance obligations satisfied over time for the three months ended March 31, 2018 represented approximately 27% of total revenues for the period. Estimated losses on uncompleted contracts and changes in contract estimates reflect the Company's best estimate of probable losses of unbilled receivables, and are recognized in the period such revisions are known and can be reasonably estimated. These estimates are recognized in cost of sales. Estimated losses on uncompleted contracts and changes in contract estimates are established by assessing estimated costs to complete, change orders and claims for uncompleted contracts. Assumptions for estimated costs to complete include material prices, labor costs, labor productivity and contract claims. Such estimates are inherently uncertain and it is possible that actual completion costs may vary from these estimates. All sales recognized are net of allowances for discounts and estimated returns, based on historical experience. Taxes assessed by governmental authorities that are directly imposed on the Company’s revenue-producing transactions are excluded from sales. |
Income Taxes (Policies)
Income Taxes (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Income Taxes The Company evaluates its deferred tax assets quarterly to determine if valuation allowances are required. In assessing the realizability of deferred tax assets, the Company considers both positive and negative evidence in determining whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. |
Commitments and Contingencies (
Commitments and Contingencies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Commitments and Contingencies From time to time, various claims, legal proceedings and litigation are asserted or commenced against the Company principally arising from alleged product liability, warranty, casualty, construction defect, contract, tort, employment and other disputes. In determining loss contingencies, management considers the likelihood of loss as well as the ability to reasonably estimate the amount of such loss or liability. An estimated loss is recorded when it is considered probable that such a liability has been incurred and when the amount of loss can be reasonably estimated. |
Earnings Per Share (Policies)
Earnings Per Share (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings Per Share Basic net income per share (“EPS”) is calculated by dividing net income attributable to common stockholders by the weighted average shares outstanding during the period. Diluted EPS is calculated by adjusting weighted average shares outstanding for the dilutive effect of potential common shares, determined using the treasury-stock method. For purposes of the diluted EPS calculation, stock options, restricted stock and restricted stock unit awards are considered to be potential common shares. Performance-based restricted stock units are not included in the calculation of diluted EPS until they are contingently issuable. |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Receivables [Abstract] | |
Schedule of accounts receivable | Accounts receivable consist of the following at March 31, 2018 and December 31, 2017 : (in thousands) March 31, December 31, Trade receivables $ 361,722 $ 333,954 Allowance for doubtful accounts (5,333 ) (4,771 ) Sales returns allowance (a) — (4,127 ) Other allowances (2,640 ) (2,164 ) $ 353,749 $ 322,892 (a) Effective January 1, 2018, as part of the Company’s adoption of Topic 606, the Company has recorded a liability for estimated returns of inventory as a refund liability within accrued expenses and other liabilities. These balances were previously presented as an allowance within accounts receivable. See Note 6 for further details. |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of debt | Long-term debt as of March 31, 2018 and December 31, 2017 consists of the following: (in thousands) March 31, December 31, Senior secured notes, due 2024 $ 350,000 $ 350,000 Revolving credit agreement 12,191 4,462 Other 311 336 362,502 354,798 Unamortized debt issuance costs related to senior secured notes (5,430 ) (5,639 ) 357,072 349,159 Less: Current portion of long-term debt 101 100 $ 356,971 $ 349,059 |
Revenue Revenue (Tables)
Revenue Revenue (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Impact of Adoption of Topic 606 [Table Text Block] | The following table reflects the cumulative impact of adoption of Topic 606. As the cumulative impact of adopting Topic 606 on the Company’s historical results of operations was less than $0.1 million , the Company did not record an adjustment to opening retained earnings as of January 1, 2018. (in thousands) December 31, 2017 Adoption of Topic 606 January 1, 2018 Accounts receivable, net of allowances $ 322,892 $ (8,884 ) $ 314,008 Inventories, net 309,060 (3,128 ) 305,932 Contract assets — 38,557 38,557 Costs in excess of billings on uncompleted contracts 28,738 (28,738 ) — Prepaid expenses and other current assets 57,949 3,128 61,077 Total assets 1,473,350 935 1,474,285 Accrued expenses and other liabilities 96,262 (6,967 ) 89,295 Contract liabilities — 26,330 26,330 Billings in excess of costs on uncompleted contracts 18,428 (18,428 ) — Total liabilities 726,451 935 727,386 Total liabilities and stockholders' equity $ 1,473,350 $ 935 $ 1,474,285 The following table reflects the impact of adoption of Topic 606 on the Company’s financial position as of March 31, 2018 . (in thousands) Balances without Adoption of Topic 606 Adjustments As Reported Accounts receivable, net of allowances $ 361,631 $ (7,882 ) $ 353,749 Inventories, net 342,735 (3,968 ) 338,767 Contract assets — 36,613 36,613 Costs in excess of billings on uncompleted contracts 26,912 (26,912 ) — Prepaid expenses and other current assets 51,087 3,968 55,055 Total assets 1,541,689 1,819 1,543,508 Accrued expenses and other liabilities 89,700 (6,648 ) 83,052 Contract liabilities — 29,089 29,089 Billings in excess of costs on uncompleted contracts 20,622 (20,622 ) — Total liabilities 778,114 1,819 779,933 Total liabilities and stockholders' equity $ 1,541,689 $ 1,819 $ 1,543,508 |
Disaggregation of Revenue [Table Text Block] | The following table shows net sales classified by major product category for the three months ended March 31, 2018 and 2017 : Three Months Ended March 31, (in thousands) 2018 2017 Structural components $ 135,829 $ 109,891 Lumber & lumber sheet goods 288,086 244,436 Millwork, doors & windows 229,518 210,751 Other building products & services 180,769 192,622 Total net sales $ 834,202 $ 757,700 The following table reflects the Company’s estimate of net sales by each customer type for the three months ended March 31, 2018 and 2017 : Three Months Ended March 31, (in thousands) 2018 2017 Single-family homebuilders $ 637,308 $ 559,589 Remodeling contractors 95,451 82,075 Multi-family, commercial & other contractors 101,443 116,036 Total net sales $ 834,202 $ 757,700 |
Contract Assets and Liabilities [Table Text Block] | The following table reflects the Company’s contract balances as of March 31, 2018 and January 1, 2018, the date that the Company adopted Topic 606: (in thousands) March 31, 2018 January 1, 2018 Change Receivables, including unbilled receivables presented in prepaid expenses and other current assets $ 360,696 $ 321,418 $ 39,278 Contract assets 36,613 38,557 (1,944 ) Contract liabilities $ 29,089 $ 26,330 $ 2,759 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of expenses related to share-based payments | The following table highlights the expense related to stock based compensation for the three months ended March 31, 2018 and 2017 : Three Months Ended March 31, (in thousands) 2018 2017 Restricted stock units (a) $ 1,658 $ 1,004 Restricted stock 91 136 Stock options 26 91 Stock based compensation $ 1,775 $ 1,231 (a) Includes service-based and performance-based restricted stock units. |
Segments (Tables)
Segments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of net sales, adjusted EBITDA and certain other measures by reportable segment | The following tables present Net Sales, Adjusted EBITDA and certain other measures for the reportable segment and total Company operations for the three months ended March 31, 2018 and 2017 . Adjusted EBITDA is used as a performance metric by the CODM in determining how to allocate resources and assess performance. Three Months Ended March 31, 2018 (in thousands) Net Sales Gross Profit Depreciation & Amortization Adjusted EBITDA Geographic divisions $ 834,202 $ 199,084 $ 15,211 $ 63,674 Other reconciling items — — 470 (16,494 ) $ 834,202 $ 199,084 $ 15,681 Three Months Ended March 31, 2017 (in thousands) Net Sales Gross Profit Depreciation & Amortization Adjusted EBITDA Geographic divisions $ 757,700 $ 178,197 $ 16,227 $ 47,403 Other reconciling items — — 586 (13,840 ) $ 757,700 $ 178,197 $ 16,813 |
Reconciliation to consolidated financial statements | Reconciliation to consolidated financial statements: Three Months Ended March 31, (in thousands) 2018 2017 Income before income taxes $ 19,998 $ 4,717 Interest expense 5,982 6,088 Depreciation and amortization 15,681 16,813 Merger and integration costs 1,687 4,441 Non-cash stock compensation expense 1,775 1,231 Acquisition costs 234 273 Other items (a) 1,823 — Adjusted EBITDA of other reconciling items 16,494 13,840 Adjusted EBITDA of geographic divisions reportable segment $ 63,674 $ 47,403 (a) Represents severance and executive search costs incurred in connection with the departure of the Company’s former chief executive officer and the search for his permanent replacement. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted EPS calculations | The basic and diluted EPS calculations for the three months ended March 31, 2018 and 2017 are presented below: Three Months Ended March 31, (in thousands, except per share amounts) 2018 2017 Income attributable to common stockholders $ 15,359 $ 3,744 Weighted average common shares outstanding, basic 67,138 66,692 Effect of dilutive securities: Restricted stock units 299 178 Stock options 172 233 Restricted stock 55 83 Weighted average common shares outstanding, diluted 67,664 67,186 Basic income per common share $ 0.23 $ 0.06 Diluted income per common share $ 0.23 $ 0.06 |
Schedule of anti-dilutive securities excluded from computation of earnings per share | The following table provides the securities that could potentially dilute EPS in the future, but were not included in the computation of diluted EPS for the periods presented because to do so would have been anti-dilutive. The amounts included in this table exclude performance-based restricted stock units. As of March 31, 2018 , the number of currently outstanding performance-based restricted stock units that are issued upon vesting could range from zero to a maximum of 0.4 million . Three Months Ended March 31, (in thousands) 2018 2017 Restricted stock units 21 21 Stock options — 303 |
Basis of Presentation Summary o
Basis of Presentation Summary of Significant Accounting Policies (Narrative) (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Organization Consolidation And Presentation [Line Items] | |
Deferred tax benefit, 2017 Tax Act | $ 3.6 |
Acquisitions (Narrative) (Detai
Acquisitions (Narrative) (Details) - USD ($) $ in Thousands | Mar. 01, 2018 | Mar. 27, 2017 | Mar. 31, 2018 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 |
Business Acquisition [Line Items] | ||||||
Acquisition holdback | $ 1,460 | $ 375 | ||||
Goodwill | $ 263,999 | 263,999 | $ 261,792 | |||
Transaction costs | 234 | $ 273 | ||||
Shone Lumber [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Date of acquisition | Mar. 1, 2018 | |||||
Purchase price | $ 22,400 | |||||
Acquisition holdback | 1,500 | |||||
Goodwill | 2,200 | |||||
Accounts receivable | 6,400 | |||||
Inventory | 8,800 | |||||
Property and equipment | 3,100 | |||||
Current liabilities | 5,200 | |||||
Pre-acquisition sales | $ 70,700 | |||||
Transaction costs | $ 200 | |||||
Net sales of acquiree since acquisition date | 5,400 | |||||
Estimated pre-tax earnings of acquiree since acquisition date | $ 300 | |||||
Code Plus [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Date of acquisition | Mar. 27, 2017 | |||||
Purchase price | $ 7,100 | |||||
Earnout provision | 800 | |||||
Goodwill | 3,400 | |||||
Customer relationships [Member] | Shone Lumber [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Intangible assets | $ 7,100 | |||||
Useful life | 9 years | |||||
Customer relationships [Member] | Code Plus [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Intangible assets | $ 2,300 | |||||
Useful life | 12 years | |||||
Non-compete agreements [Member] | Code Plus [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Intangible assets | $ 500 | |||||
Useful life | 5 years |
Accounts Receivable (Accounts R
Accounts Receivable (Accounts Receivable) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | |
Receivables [Abstract] | |||
Trade receivables | $ 361,722 | $ 333,954 | |
Allowance for doubtful accounts | (5,333) | (4,771) | |
Sales returns allowance | [1] | 0 | (4,127) |
Other allowances | (2,640) | (2,164) | |
Accounts receivable, net | $ 353,749 | $ 322,892 | |
[1] | Effective January 1, 2018, as part of the Company’s adoption of Topic 606, the Company has recorded a liability for estimated returns of inventory as a refund liability within accrued expenses and other liabilities. These balances were previously presented as an allowance within accounts receivable. See Note 6 for further details. |
Debt (Debt Table) (Details)
Debt (Debt Table) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 15, 2016 |
Debt Instrument [Line Items] | |||
Outstanding borrowings | $ 362,502 | $ 354,798 | |
Unamortized debt issuance costs related to senior secured notes | (5,430) | (5,639) | |
Total debt | 357,072 | 349,159 | |
Less: Current portion of long-term debt | 101 | 100 | |
Long-term debt | 356,971 | 349,059 | |
Senior secured notes, due 2024 [Member] | |||
Debt Instrument [Line Items] | |||
Outstanding borrowings | 350,000 | 350,000 | $ 350,000 |
Revolving credit agreement [Member] | |||
Debt Instrument [Line Items] | |||
Outstanding borrowings | 12,191 | 4,462 | |
Other debt [Member] | |||
Debt Instrument [Line Items] | |||
Outstanding borrowings | $ 311 | $ 336 |
Debt Debt (Narrative) (Details)
Debt Debt (Narrative) (Details) - USD ($) $ in Thousands | Sep. 15, 2016 | Dec. 01, 2015 | Mar. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||||
Outstanding borrowings | $ 362,502 | $ 354,798 | ||
Senior secured notes, due 2024 [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt issuance date | Sep. 15, 2016 | |||
Outstanding borrowings | $ 350,000 | 350,000 | 350,000 | |
Maturity date, year | 2,024 | |||
Interest rate | 5.50% | |||
Interest payment dates | payable semiannually on April 1 and October 1 | |||
Revolving credit agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 375,000 | |||
Outstanding borrowings | 12,191 | 4,462 | ||
Net availability | 301,500 | |||
Letters of credit outstanding | $ 61,300 | |||
Date entered into agreement | Dec. 1, 2015 | |||
Other debt [Member] | ||||
Debt Instrument [Line Items] | ||||
Maturity date | Feb. 28, 2021 | |||
Outstanding borrowings | $ 311 | $ 336 | ||
Interest rate | 7.00% | |||
Base Rate Option [Member] | Revolving credit agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 5.00% | |||
Guarantor Subsidiaries [Member] | Senior secured notes, due 2024 [Member] | ||||
Debt Instrument [Line Items] | ||||
Ownership percent | 100.00% | |||
BMC East, LLC [Member] | Senior secured notes, due 2024 [Member] | ||||
Debt Instrument [Line Items] | ||||
Ownership percent | 100.00% |
Revenue Revenue (Impact of Adop
Revenue Revenue (Impact of Adoption of Topic 606) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Accounts receivable, net of allowances | $ 353,749 | $ 322,892 | |
Inventories, net | 338,767 | 309,060 | |
Contract assets | 36,613 | 0 | |
Costs in excess of billings on uncompleted contracts | 0 | 28,738 | |
Prepaid expenses and other current assets | 55,055 | 57,949 | |
Total assets | 1,543,508 | 1,473,350 | |
Accrued expenses and other liabilities | 83,052 | 96,262 | |
Contract liabilities | 29,089 | 0 | |
Billings in excess of costs on uncompleted contracts | 0 | 18,428 | |
Total liabilities | 779,933 | 726,451 | |
Total liabilities and stockholders' equity | 1,543,508 | $ 1,473,350 | |
Accounting Standards Update 2014-09 [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Accounts receivable, net of allowances | $ 314,008 | ||
Inventories, net | 305,932 | ||
Contract assets | 38,557 | ||
Costs in excess of billings on uncompleted contracts | 0 | ||
Prepaid expenses and other current assets | 61,077 | ||
Total assets | 1,474,285 | ||
Accrued expenses and other liabilities | 89,295 | ||
Contract liabilities | 26,330 | ||
Billings in excess of costs on uncompleted contracts | 0 | ||
Total liabilities | 727,386 | ||
Total liabilities and stockholders' equity | 1,474,285 | ||
Balances without adoption of Topic 606 [Member] | Accounting Standards Update 2014-09 [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Accounts receivable, net of allowances | 361,631 | ||
Inventories, net | 342,735 | ||
Contract assets | 0 | ||
Costs in excess of billings on uncompleted contracts | 26,912 | ||
Prepaid expenses and other current assets | 51,087 | ||
Total assets | 1,541,689 | ||
Accrued expenses and other liabilities | 89,700 | ||
Contract liabilities | 0 | ||
Billings in excess of costs on uncompleted contracts | 20,622 | ||
Total liabilities | 778,114 | ||
Total liabilities and stockholders' equity | 1,541,689 | ||
Adoption of Topic 606 [Member] | Accounting Standards Update 2014-09 [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Accounts receivable, net of allowances | (7,882) | (8,884) | |
Inventories, net | (3,968) | (3,128) | |
Contract assets | 36,613 | 38,557 | |
Costs in excess of billings on uncompleted contracts | (26,912) | (28,738) | |
Prepaid expenses and other current assets | 3,968 | 3,128 | |
Total assets | 1,819 | 935 | |
Accrued expenses and other liabilities | (6,648) | (6,967) | |
Contract liabilities | 29,089 | 26,330 | |
Billings in excess of costs on uncompleted contracts | (20,622) | (18,428) | |
Total liabilities | 1,819 | 935 | |
Total liabilities and stockholders' equity | $ 1,819 | $ 935 |
Revenue Revenue (Disaggregation
Revenue Revenue (Disaggregation of Revenue) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 834,202 | $ 757,700 |
Single-family homebuilders [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 637,308 | 559,589 |
Remodeling contractors [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 95,451 | 82,075 |
Multi-family, commercial & other contractors [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 101,443 | 116,036 |
Structural components [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 135,829 | 109,891 |
Lumber & lumber sheet goods [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 288,086 | 244,436 |
Millwork, doors & windows [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 229,518 | 210,751 |
Other building products & services [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 180,769 | $ 192,622 |
Revenue Revenue (Contract Asset
Revenue Revenue (Contract Assets and Liabilities) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | |
Receivables, including unbilled receivables | $ 360,696 | $ 321,418 | |
Receivables, including unbilled receivables change | 39,278 | ||
Contract assets | 36,613 | $ 0 | |
Contract assets change | (1,944) | ||
Contract liabilities | 29,089 | $ 0 | |
Contract liabilities change | $ 2,759 |
Revenue Revenue (Narrative) (De
Revenue Revenue (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Jan. 01, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Revenue recognized for performance obligations satisfied over time | 27.00% | |
Contract assets change | $ (1,944) | |
Contract liabilities change | 2,759 | |
Revenue recognized previously included in contract liabilities | $ 21,600 | |
Accounting Standards Update 2014-09 [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative impact of adopting Topic 606 not recorded | $ 100 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Income Tax Contingency [Line Items] | |||
Valuation allowance | $ 0.1 | $ 0.1 | |
Income tax expense at statutory rate | 21.00% | 35.00% | |
Effective income tax rate | 23.20% | 20.60% | |
Deferred tax benefit, 2017 Tax Act | $ 3.6 |
Commitments and Contingencies39
Commitments and Contingencies (Narrative) (Details) $ in Millions | Mar. 31, 2018USD ($) |
Pending Litigation [Member] | |
Loss Contingencies [Line Items] | |
Pending litigation accrued | $ 3 |
Stock Based Compensation (Stock
Stock Based Compensation (Stock based compensation expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock based compensation | $ 1,775 | $ 1,231 | |
Restricted stock units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock based compensation | [1] | 1,658 | 1,004 |
Restricted stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock based compensation | 91 | 136 | |
Stock options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock based compensation | $ 26 | $ 91 | |
[1] | Includes service-based and performance-based restricted stock units. |
Stock Based Compensation (Narra
Stock Based Compensation (Narrative) (Details) - Performance-based restricted stock units [Member] - $ / shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Performance-based shares available for vesting | 0 | |
Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Performance-based shares available for vesting | 400,000 | |
2018 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting date | Mar. 31, 2021 | |
Weighted average grant date fair value (in dollars per share) | $ 19.30 | |
Award vesting period (in years) | 3 years | |
Percent of performance measurement based on ROIC | 50.00% | |
Percent of performance measurement based on Adjusted EPS | 50.00% | |
Performance period (start date) | Jan. 1, 2018 | |
Performance period (end date) | Dec. 31, 2020 | |
2018 [Member] | Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock units granted | 0 | |
2018 [Member] | Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock units granted | 200,000 | |
2017 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting date | Mar. 31, 2020 | |
Weighted average grant date fair value (in dollars per share) | $ 21.35 | |
Award vesting period (in years) | 3 years | |
Percent of performance measurement based on ROIC | 50.00% | |
Percent of performance measurement based on Adjusted EPS | 50.00% | |
Performance period (start date) | Jan. 1, 2017 | |
Performance period (end date) | Dec. 31, 2019 | |
2017 [Member] | Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock units granted | 0 | |
2017 [Member] | Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock units granted | 200,000 |
Segments (Schedule of net sales
Segments (Schedule of net sales, adjusted EBITDA and certain other measures by reportable segment) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Segment Reporting Information [Line Items] | ||
Net sales | $ 834,202 | $ 757,700 |
Gross profit | 199,084 | 178,197 |
Depreciation & amortization | 15,681 | 16,813 |
Operating segments [Member] | Geographic divisions [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales | 834,202 | 757,700 |
Gross profit | 199,084 | 178,197 |
Depreciation & amortization | 15,211 | 16,227 |
Adjusted EBITDA | 63,674 | 47,403 |
Other reconciling items [Member] | Other reconciling items [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales | 0 | 0 |
Gross profit | 0 | 0 |
Depreciation & amortization | 470 | 586 |
Adjusted EBITDA | $ (16,494) | $ (13,840) |
Segments (Reconciliation of adj
Segments (Reconciliation of adjusted EBITDA to consolidated financial statements) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Income before income taxes | $ 19,998 | $ 4,717 | |
Interest expense | 5,982 | 6,088 | |
Depreciation and amortization | 15,681 | 16,813 | |
Merger and integration costs | 1,687 | 4,441 | |
Non-cash stock compensation expense | 1,775 | 1,231 | |
Acquisition costs | 234 | 273 | |
Other items | [1] | 1,823 | 0 |
Other reconciling items [Member] | Other reconciling items [Member] | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Depreciation and amortization | 470 | 586 | |
Adjusted EBITDA | 16,494 | 13,840 | |
Operating segments [Member] | Geographic divisions [Member] | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Depreciation and amortization | 15,211 | 16,227 | |
Adjusted EBITDA | $ (63,674) | $ (47,403) | |
[1] | Represents severance and executive search costs incurred in connection with the departure of the Company’s former chief executive officer and the search for his permanent replacement. |
Segments (Narrative) (Details)
Segments (Narrative) (Details) | 3 Months Ended |
Mar. 31, 2018segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 1 |
Earnings Per Share (Basic and D
Earnings Per Share (Basic and Diluted EPS) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Income attributable to common stockholders | $ 15,359 | $ 3,744 |
Weighted average common shares outstanding, basic (in shares) | 67,138 | 66,692 |
Weighted average common shares outstanding, diluted (in shares) | 67,664 | 67,186 |
Basic income per common share (in dollars per share) | $ 0.23 | $ 0.06 |
Diluted income per common share (in dollars per share) | $ 0.23 | $ 0.06 |
Restricted stock units [Member] | ||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Stock based payment arrangements (in shares) | 299 | 178 |
Stock options [Member] | ||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Stock based payment arrangements (in shares) | 172 | 233 |
Restricted stock [Member] | ||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Stock based payment arrangements (in shares) | 55 | 83 |
Earnings Per Share (Schedule of
Earnings Per Share (Schedule of anti-dilutive securities) (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Restricted stock units [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 21 | 21 |
Stock options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 0 | 303 |
Earnings Per Share Earnings Per
Earnings Per Share Earnings Per Share (Narrative) (Details) - Performance-based restricted stock units [Member] | 3 Months Ended |
Mar. 31, 2018shares | |
Minimum [Member] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Performance-based shares available for vesting | 0 |
Maximum [Member] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Performance-based shares available for vesting | 400,000 |