Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 03, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-36050 | |
Entity Registrant Name | BMC Stock Holdings, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 26-4687975 | |
Entity Address, Address Line One | 4800 Falls of Neuse Rd, Suite 400 | |
Entity Address, City or Town | Raleigh, | |
Entity Address, State or Province | NC | |
Entity Address, Postal Zip Code | 27609 | |
City Area Code | 919 | |
Local Phone Number | 431-1000 | |
Title of 12(b) Security | Common stock, par value $0.01 per share | |
Trading Symbol | BMCH | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 67,279,993 | |
Entity Central Index Key | 0001574815 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash and cash equivalents | $ 286,221 | $ 165,496 |
Accounts Receivable, after Allowance for Credit Loss, Current | 393,735 | 325,741 |
Inventories | 413,031 | 331,969 |
Contract assets | 36,422 | 32,125 |
Income taxes receivable | 0 | 7,504 |
Prepaid expenses and other current assets | 76,239 | 66,818 |
Total current assets | 1,205,648 | 929,653 |
Property and equipment, net of accumulated depreciation | 366,444 | 345,466 |
Operating lease right-of-use assets | 131,868 | 139,907 |
Customer relationship intangible assets, net of accumulated amortization | 170,200 | 185,049 |
Other intangible assets, net of accumulated amortization | 385 | 580 |
Goodwill | 295,390 | 297,146 |
Other long-term assets | 7,599 | 8,300 |
Total assets | 2,177,534 | 1,906,101 |
Current liabilities | ||
Accounts payable | 300,075 | 189,644 |
Accrued expenses and other liabilities | 116,285 | 117,825 |
Contract liabilities | 44,980 | 31,094 |
Income taxes payable | 10,395 | 0 |
Interest payable | 9,572 | 4,759 |
Current portion: Long-term debt and finance lease obligations | 3,210 | 5,577 |
Current portion: Operating lease liabilities | 27,635 | 26,147 |
Current portion: Insurance reserves | 16,746 | 16,328 |
Total current liabilities | 528,898 | 391,374 |
Insurance reserves | 43,287 | 43,536 |
Long-term debt | 346,659 | 346,032 |
Long-term portion of finance lease obligations | 4,689 | 6,959 |
Long-term portion of operating lease liabilities | 113,572 | 120,832 |
Deferred income taxes | 22,613 | 15,195 |
Other long-term liabilities | 15,309 | 661 |
Total liabilities | 1,075,027 | 924,589 |
Commitments and contingencies (Note 9) | ||
Stockholders’ equity | ||
Preferred Stock, Value, Issued | 0 | 0 |
Common Stock, Value, Issued | 690 | 683 |
Additional paid-in capital | 702,045 | 687,255 |
Retained earnings | 430,736 | 320,190 |
Treasury Stock, Value | (30,964) | (26,616) |
Total stockholders’ equity | 1,102,507 | 981,512 |
Total liabilities and stockholders’ equity | $ 2,177,534 | $ 1,906,101 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Accounts receivable allowances | $ 9,671 | $ 8,318 |
Stockholders' Equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
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) | 300,000,000 | 300,000,000 |
Common stock, shares issued (shares) | 69,000,000 | 68,300,000 |
Common stock, shares outstanding (in shares) | 67,200,000 | 66,800,000 |
Treasury stock (shares) | 1,800,000 | 1,500,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Net sales | $ 1,090,343 | $ 964,249 | $ 2,991,118 | $ 2,736,029 |
Cost of sales | 817,261 | 709,482 | 2,228,086 | 2,019,363 |
Gross profit | 273,082 | 254,767 | 763,032 | 716,666 |
Selling, general and administrative expenses | 195,143 | 190,579 | 557,010 | 546,116 |
Depreciation expense | 11,767 | 10,501 | 34,990 | 30,117 |
Amortization expense | 5,016 | 4,552 | 15,045 | 13,237 |
Asset Impairment Charges | 0 | 115 | 2,255 | 644 |
Total operating expenses | 211,926 | 205,747 | 609,300 | 590,114 |
Income from operations | 61,156 | 49,020 | 153,732 | 126,552 |
Other income (expense) | ||||
Interest expense | (5,744) | (5,773) | (17,880) | (17,385) |
Other income, net | 3,289 | 3,540 | 9,128 | 10,159 |
Income before income taxes | 58,701 | 46,787 | 144,980 | 119,326 |
Income tax expense | 13,806 | 13,190 | 34,434 | 29,680 |
Net income | $ 44,895 | $ 33,597 | $ 110,546 | $ 89,646 |
Weighted average common shares outstanding | ||||
Basic (in shares) | 67,141 | 66,685 | 67,001 | 66,681 |
Diluted (in shares) | 67,967 | 67,361 | 67,725 | 67,240 |
Net income per common share | ||||
Basic (in dollars per share) | $ 0.67 | $ 0.50 | $ 1.65 | $ 1.34 |
Diluted (in dollars per share) | $ 0.66 | $ 0.50 | $ 1.63 | $ 1.33 |
CONSOLIDATED STATEMENT OF STOCK
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY Statement - USD ($) $ in Thousands | Total | Common Stock [Member] | Treasury Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] |
Stockholders' equity beginning of period at Dec. 31, 2018 | $ 874,659 | $ 677 | $ (8,458) | $ 672,095 | $ 210,345 |
Common stock issued beginning of period (shares) at Dec. 31, 2018 | 67,708,000 | ||||
Treasury stock beginning of period (shares) at Dec. 31, 2018 | 478,000 | ||||
Stockholders' Equity [Abstract] | |||||
Exercise of stock options | 132 | $ 0 | 132 | ||
Exercise of stock options (shares) | 8,000 | ||||
Shares vested for long-term incentive plan | 0 | $ 3 | (3) | ||
Shares vested for long-term incentive plan (shares) | 290,000 | ||||
Repurchases of common stock under share repurchase program | (15,709) | $ (15,709) | |||
Repurchases of common stock under share repurchase program (shares) | 920,000 | ||||
Repurchases of common stock equity related to equity award activity | (1,330) | $ (1,330) | |||
Repurchases of common stock related to equity award activity (shares) | 74,000 | ||||
Stock compensation expense | 2,915 | 2,915 | |||
Net income | 20,350 | 20,350 | |||
Stockholders' equity end of period at Mar. 31, 2019 | 881,017 | $ 680 | $ (25,497) | 675,139 | 230,695 |
Common stock issued end of period (shares) at Mar. 31, 2019 | 68,006,000 | ||||
Treasury stock end of period (shares) at Mar. 31, 2019 | 1,472,000 | ||||
Stockholders' equity beginning of period at Dec. 31, 2018 | 874,659 | $ 677 | $ (8,458) | 672,095 | 210,345 |
Common stock issued beginning of period (shares) at Dec. 31, 2018 | 67,708,000 | ||||
Treasury stock beginning of period (shares) at Dec. 31, 2018 | 478,000 | ||||
Stockholders' Equity [Abstract] | |||||
Repurchases of common stock under share repurchase program | $ (16,400) | ||||
Repurchases of common stock under share repurchase program (shares) | 1,000,000 | ||||
Net income | $ 89,646 | ||||
Stockholders' equity end of period at Sep. 30, 2019 | 957,581 | $ 683 | $ (26,553) | 683,460 | 299,991 |
Common stock issued end of period (shares) at Sep. 30, 2019 | 68,266,000 | ||||
Treasury stock end of period (shares) at Sep. 30, 2019 | 1,526,000 | ||||
Stockholders' equity beginning of period at Mar. 31, 2019 | 881,017 | $ 680 | $ (25,497) | 675,139 | 230,695 |
Common stock issued beginning of period (shares) at Mar. 31, 2019 | 68,006,000 | ||||
Treasury stock beginning of period (shares) at Mar. 31, 2019 | 1,472,000 | ||||
Stockholders' Equity [Abstract] | |||||
Exercise of stock options | 529 | $ 1 | 528 | ||
Exercise of stock options (shares) | 76,000 | ||||
Shares vested for long-term incentive plan | 0 | $ 1 | (1) | ||
Shares vested for long-term incentive plan (shares) | 73,000 | ||||
Repurchases of common stock under share repurchase program | (737) | $ (737) | |||
Repurchases of common stock under share repurchase program (shares) | 41,000 | ||||
Repurchases of common stock equity related to equity award activity | (137) | $ (137) | |||
Repurchases of common stock related to equity award activity (shares) | 6,000 | ||||
Stock compensation expense | 3,248 | 3,248 | |||
Net income | 35,699 | 35,699 | |||
Stockholders' equity end of period at Jun. 30, 2019 | 919,619 | $ 682 | $ (26,371) | 678,914 | 266,394 |
Common stock issued end of period (shares) at Jun. 30, 2019 | 68,155,000 | ||||
Treasury stock end of period (shares) at Jun. 30, 2019 | 1,519,000 | ||||
Stockholders' Equity [Abstract] | |||||
Exercise of stock options | 1,533 | $ 1 | 1,532 | ||
Exercise of stock options (shares) | 84,000 | ||||
Shares vested for long-term incentive plan | $ 0 | $ 0 | 0 | ||
Shares vested for long-term incentive plan (shares) | 27,000 | ||||
Repurchases of common stock under share repurchase program (shares) | 0 | ||||
Repurchases of common stock equity related to equity award activity | $ (182) | $ (182) | |||
Repurchases of common stock related to equity award activity (shares) | 7,000 | ||||
Stock compensation expense | 3,014 | 3,014 | |||
Net income | 33,597 | 33,597 | |||
Stockholders' equity end of period at Sep. 30, 2019 | 957,581 | $ 683 | $ (26,553) | 683,460 | 299,991 |
Common stock issued end of period (shares) at Sep. 30, 2019 | 68,266,000 | ||||
Treasury stock end of period (shares) at Sep. 30, 2019 | 1,526,000 | ||||
Stockholders' equity beginning of period at Dec. 31, 2019 | $ 981,512 | $ 683 | $ (26,616) | 687,255 | 320,190 |
Common stock issued beginning of period (shares) at Dec. 31, 2019 | 68,300,000 | 68,306,000 | |||
Treasury stock beginning of period (shares) at Dec. 31, 2019 | 1,500,000 | 1,528,000 | |||
Stockholders' Equity [Abstract] | |||||
Exercise of stock options | $ 206 | $ 0 | 206 | ||
Exercise of stock options (shares) | 13,000 | ||||
Shares vested for long-term incentive plan | 0 | $ 4 | (4) | ||
Shares vested for long-term incentive plan (shares) | 402,000 | ||||
Repurchases of common stock under share repurchase program | (1,416) | $ (1,416) | |||
Repurchases of common stock under share repurchase program (shares) | 87,000 | ||||
Repurchases of common stock equity related to equity award activity | (2,441) | $ (2,441) | |||
Repurchases of common stock related to equity award activity (shares) | 122,000 | ||||
Stock compensation expense | 3,170 | 3,170 | |||
Net income | 22,029 | 22,029 | |||
Stockholders' equity end of period at Mar. 31, 2020 | 1,003,060 | $ 687 | $ (30,473) | 690,627 | 342,219 |
Common stock issued end of period (shares) at Mar. 31, 2020 | 68,721,000 | ||||
Treasury stock end of period (shares) at Mar. 31, 2020 | 1,737,000 | ||||
Stockholders' equity beginning of period at Dec. 31, 2019 | $ 981,512 | $ 683 | $ (26,616) | 687,255 | 320,190 |
Common stock issued beginning of period (shares) at Dec. 31, 2019 | 68,300,000 | 68,306,000 | |||
Treasury stock beginning of period (shares) at Dec. 31, 2019 | 1,500,000 | 1,528,000 | |||
Stockholders' Equity [Abstract] | |||||
Repurchases of common stock under share repurchase program | $ (1,400) | ||||
Repurchases of common stock under share repurchase program (shares) | 100,000 | ||||
Net income | $ 110,546 | ||||
Stockholders' equity end of period at Sep. 30, 2020 | $ 1,102,507 | $ 690 | $ (30,964) | 702,045 | 430,736 |
Common stock issued end of period (shares) at Sep. 30, 2020 | 69,000,000 | 69,028,000 | |||
Treasury stock end of period (shares) at Sep. 30, 2020 | 1,800,000 | 1,753,000 | |||
Stockholders' equity beginning of period at Mar. 31, 2020 | $ 1,003,060 | $ 687 | $ (30,473) | 690,627 | 342,219 |
Common stock issued beginning of period (shares) at Mar. 31, 2020 | 68,721,000 | ||||
Treasury stock beginning of period (shares) at Mar. 31, 2020 | 1,737,000 | ||||
Stockholders' Equity [Abstract] | |||||
Exercise of stock options | 159 | $ 0 | 159 | ||
Exercise of stock options (shares) | 9,000 | ||||
Shares vested for long-term incentive plan | 0 | $ 1 | (1) | ||
Shares vested for long-term incentive plan (shares) | 75,000 | ||||
Repurchases of common stock equity related to equity award activity | (105) | $ (105) | |||
Repurchases of common stock related to equity award activity (shares) | 6,000 | ||||
Stock compensation expense | 3,328 | 3,328 | |||
Net income | 43,622 | 43,622 | |||
Stockholders' equity end of period at Jun. 30, 2020 | 1,050,064 | $ 688 | $ (30,578) | 694,113 | 385,841 |
Common stock issued end of period (shares) at Jun. 30, 2020 | 68,805,000 | ||||
Treasury stock end of period (shares) at Jun. 30, 2020 | 1,743,000 | ||||
Stockholders' Equity [Abstract] | |||||
Exercise of stock options | 3,322 | $ 2 | 3,320 | ||
Exercise of stock options (shares) | 196,000 | ||||
Shares vested for long-term incentive plan | $ 0 | $ 0 | 0 | ||
Shares vested for long-term incentive plan (shares) | 27,000 | ||||
Repurchases of common stock under share repurchase program (shares) | 0 | ||||
Repurchases of common stock equity related to equity award activity | $ (386) | $ (386) | |||
Repurchases of common stock related to equity award activity (shares) | 10,000 | ||||
Stock compensation expense | 4,612 | 4,612 | |||
Net income | 44,895 | 44,895 | |||
Stockholders' equity end of period at Sep. 30, 2020 | $ 1,102,507 | $ 690 | $ (30,964) | $ 702,045 | $ 430,736 |
Common stock issued end of period (shares) at Sep. 30, 2020 | 69,000,000 | 69,028,000 | |||
Treasury stock end of period (shares) at Sep. 30, 2020 | 1,800,000 | 1,753,000 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash flows from operating activities | ||
Net income | $ 110,546 | $ 89,646 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation expense | 45,702 | 39,722 |
Amortization of intangible assets | 15,045 | 13,237 |
Amortization of debt issuance costs | 952 | 1,124 |
Deferred income taxes | 7,418 | 4,857 |
Non-cash stock compensation expense | 11,110 | 9,177 |
Gain on sale of property, equipment and real estate | (518) | (1,839) |
Other non-cash adjustments | 2,395 | 2,314 |
Change in assets and liabilities, net of effects of acquisitions | ||
Accounts receivable, net of allowances | (68,365) | (24,068) |
Inventories | (81,004) | (494) |
Accounts payable | 121,405 | 68,456 |
Other assets and liabilities | 42,508 | (3,715) |
Net cash provided by operating activities | 207,194 | 198,417 |
Cash flows from investing activities | ||
Purchases of businesses, net of cash acquired | 0 | (85,780) |
Purchases of property, equipment and real estate | (71,037) | (67,582) |
Proceeds from sale of property, equipment and real estate | 1,258 | 4,444 |
Insurance proceeds | 0 | 107 |
Net cash used in investing activities | (69,779) | (148,811) |
Cash flows from financing activities | ||
Proceeds from revolving credit facility | 144,000 | 110,987 |
Repayments of proceeds from revolving credit facility | (144,000) | (110,987) |
Repurchases of common stock under share repurchase program | (1,416) | (16,446) |
Payments on finance lease obligations | (4,613) | (5,094) |
Other financing activities, net | (10,661) | (5,530) |
Net cash used in financing activities | (16,690) | (27,070) |
Net increase in cash and cash equivalents | 120,725 | 22,536 |
Cash and cash equivalents | ||
Beginning of period | 165,496 | 150,723 |
End of period | 286,221 | 173,259 |
Supplemental disclosure of non-cash transactions | ||
Accrued purchases of property and equipment | 4,807 | 4,484 |
Acquisition-related holdback payments due at future date | 3,462 | 4,527 |
Assets acquired under finance lease obligations | 0 | 5,789 |
Right-of-use assets obtained in exchange for operating lease obligations | $ 13,636 | $ 34,836 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2020 | |
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. and its subsidiaries. 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 | 9 Months Ended |
Sep. 30, 2020 | |
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, 2019 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, 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 condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 (“2019 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. Comprehensive income Comprehensive income is equal to the net income for all periods presented. Cash and cash equivalents Cash equivalents are highly liquid investments that are readily convertible to known amounts of cash and have a maturity of three months or less from the time of purchase. As of September 30, 2020, the Company had no cash equivalents and as of December 31, 2019, the Company had cash equivalents of $4.4 million. Cash equivalents are valued at amortized cost, which approximates fair value due to the short-term maturity of these instruments, and were classified as Level 1 or Level 2 measurements in accordance with Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures (“ASC 820”). Book overdrafts occur when purchases on corporate purchasing cards and checks written exceed available bank balances at a specific bank, despite there being cash at the Company’s other financial institutions. For accounting purposes, the Company reclassifies these book overdrafts to accounts payable on the consolidated balance sheets. Book overdrafts included in accounts payable were $19.5 million and $2.5 million at September 30, 2020 and December 31, 2019, respectively. Reclassifications Merger and integration costs of $0.9 million and $2.4 million for the three and nine months ended September 30, 2020, respectively, related to the integration of Building Materials Holding Corporation (“BMHC”) and Stock Building Supply Holdings, Inc. (“SBS”) as a result of the 2015 merger transaction, which were historically presented in merger and integration costs on the condensed consolidated statements of operations, have been reclassified and are presented in selling, general and administrative expenses on the condensed consolidated statements of operations. Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company evaluates these estimates and judgments on an ongoing basis and bases its estimates on historical experience, current conditions and various other assumptions that are believed to be reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities as well as identifying and assessing the accounting treatment with respect to commitments and contingencies. Certain accounting matters that generally require consideration of forecasted financial information were assessed in light of the impact from the COVID-19 pandemic as of September 30, 2020. The accounting matters assessed included, but were not limited to, the Company’s allowance for doubtful accounts, inventory reserves, supplier rebates, goodwill impairment, impairment of tangible and intangible long-lived assets, share-based compensation and valuation allowances for tax assets. While the assessments resulted in no material impacts to the Company’s condensed consolidated financial statements as of and for the three and nine months ended September 30, 2020, the Company believes the full impact of the COVID-19 pandemic remains uncertain and the Company will continue to assess if ongoing developments related to the pandemic may cause future material impacts to our consolidated financial statements. Share repurchase program Utilizing cash from operations, the Company repurchased no shares during the three months ended September 30, 2020, 0.1 million shares at a weighted average price of $16.20 per share for a total cost of $1.4 million during the nine months ended September 30, 2020, no shares during the three months ended September 30, 2019 and 1.0 million shares at a weighted average price of $17.11 per share for a total cost of $16.4 million during the nine months ended September 30, 2019. These repurchases were made under the Company’s $75.0 million share repurchase program authorized by the Company’s board of directors in November 2018. These repurchased shares are available for future issuance and are reflected as treasury stock, at cost, on the condensed consolidated balance sheets. As of September 30, 2020, the Company had approximately $54.2 million of capacity remaining under the current share repurchase authorization. Under the merger agreement with Builders FirstSource, Inc., a Delaware corporation (“Builders FirstSource”), described in Note 3, the Company has generally agreed not to make any share repurchases prior to the effective time of the merger. Statement of cash flows Proceeds from revolving credit facility and repayments of proceeds from revolving credit facility as presented on the condensed consolidated statements of cash flows include all cash activities and transactions between the Company and its associated lenders in relation to the revolving credit facility, excluding interest and fees, and for the nine months ended September 30, 2019, is specifically inclusive of operating cash receipts that were automatically applied to the revolving credit facility pursuant to a voluntary cash sweep arrangement. See Note 6 for further details on the Company’s revolving credit facility. Recently adopted accounting pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and issued subsequent amendments to the initial guidance to provide additional clarification on specific topics (“ASU 2016-13”). ASU 2016-13 amends the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade receivables. ASU 2016-13 became effective for the Company’s annual and interim periods beginning on January 1, 2020. Modified retrospective application is required, with certain exceptions. The adoption of the standard did not have a material impact on the Company’s consolidated financial statements. 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 became 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. Prospective application is required. The adoption of the standard did not have a material impact on the Company’s consolidated financial statements. In August 2018, the FASB issued Accounting Standards Update 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). ASU 2018-13 modifies the disclosure requirements on fair value measurements by removing, modifying and adding certain disclosure requirements in ASC 820. ASU 2018-13 became effective for the Company’s annual and interim periods beginning on January 1, 2020. Certain disclosures in ASU 2018-13 are required to be applied prospectively, while others require retrospective application. The adoption of the standard did not have a material impact on the Company’s consolidated financial statements. Recently issued accounting pronouncements not yet adopted In December 2019, the FASB issued Accounting Standards Update 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 removes certain exceptions to the general principles in ASC 740 and clarifies and amends certain guidance to promote consistent application. ASU 2019-12 is effective for the Company's annual and interim periods beginning on January 1, 2021, with early adoption permitted. Depending on the amendment, adoption may be applied on a retrospective, modified retrospective or prospective basis. The adoption of the standard is not expected to have a material impact on the Company’s consolidated financial statements. In March 2020, the FASB issued Accounting Standards Update 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). ASU 2020-04 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by the expected transition away from reference rates that are expected to be discontinued, such as LIBOR. ASU 2020-04 was effective upon issuance. The Company may elect to apply the guidance prospectively through December 31, 2022. The Company is evaluating the impact of the standard on its consolidated financial statements. |
Merger Agreement with Builders
Merger Agreement with Builders FirstSource, Inc. | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Merger Agreement with Builders FirstSource, Inc. | Merger Agreement with Builders FirstSource, Inc. On August 26, 2020, the Company, Builders FirstSource and Boston Merger Sub I Inc., a Delaware corporation and a direct wholly owned subsidiary of Builders FirstSource (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which the Company and Builders FirstSource will combine in an all-stock merger transaction. Upon the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the Merger (the “Effective Time”), Merger Sub will merge with and into the Company, with the Company continuing as the surviving corporation and becoming a wholly owned subsidiary of Builders FirstSource (the “Merger”), with Builders FirstSource identified as the accounting acquirer. Under the terms of the Merger Agreement, which has been unanimously approved by the board of directors of each company, at the Effective Time, each issued and outstanding share of the Company’s common stock, par value $0.01 per share (the “BMC Common Stock”), will automatically be converted into the right to receive 1.3125 shares (the “Exchange Ratio”) of common stock, par value $0.01 per share, of Builders FirstSource (the “BLDR Common Stock”). No fractional shares of BLDR Common Stock will be issued in the Merger, and holders of shares of BMC Common Stock will receive cash in lieu of any such fractional shares. Upon consummation of the Merger, Builders FirstSource’s stockholders will own approximately 57% and the Company’s stockholders will own approximately 43% of the combined company. Each outstanding BMC stock option held by a current employee or service-provider will become, at the Effective Time, an option to purchase shares of BLDR Common Stock, with the number of shares and the exercise price adjusted by the Exchange Ratio. Each outstanding BMC stock option held by any former BMC employee or service-provider will be converted at the Effective Time into the right to receive cash in an amount equal to the product of (i) the number of shares of BMC Common Stock subject to such BMC stock option as of immediately prior to the Effective Time and (ii) the excess of the market value of 1.3125 shares of BLDR Common Stock over the applicable exercise price per share of such option, subject to applicable withholding taxes. Each outstanding BMC time-vested and performance-vested restricted stock unit will vest and settle at the Effective Time in a number of shares of BLDR Common Stock equal to the number of shares of BMC Common Stock otherwise issuable upon settlement of such BMC restricted stock unit (assuming target level of performance for performance-vested awards), multiplied by the Exchange Ratio, and subject to applicable withholding taxes. The Merger is intended to qualify as a tax-free reorganization under the Internal Revenue Code so that none of the Company, Builders FirstSource, Merger Sub, or any of the Company’s stockholders generally will recognize any gain or loss on the issuance or receipt of BLDR Common Stock in the Merger, except that the Company’s stockholders generally may recognize gain or loss with respect to cash received in lieu of fractional shares of BLDR Common Stock. The Company and Builders FirstSource have made customary representations, warranties and covenants in the Merger Agreement, including covenants regarding the conduct of their respective businesses during the pre-closing period and their use of reasonable best efforts to consummate the Merger. In addition, the Merger Agreement contains restrictions on the Company’s and Builders FirstSource’s ability to (i) solicit competing acquisition proposals and (ii) subject to certain exceptions if their respective boards of directors determine it would be inconsistent with their fiduciary duties, to participate in any discussions or negotiations, or provide any non-public information, or take other actions in furtherance of or relating to any competing acquisition proposals, or change, withdraw, qualify, or modify the recommendation by the Company’s or Builders FirstSource’s board of directors to their respective stockholders to adopt the Merger Agreement and approve the issuance of BLDR Common Stock in the Merger (the “Stock Issuance”), respectively. The Merger Agreement contains certain termination rights for both the Company and Builders FirstSource, including (i) if the Merger is not consummated on or before the “outside date” of May 26, 2021 (subject to extension to August 26, 2021, under certain circumstances), (ii) if the required approval of the Company’s stockholders or Builders FirstSource’s stockholders is not obtained, (iii) if any law or order prohibiting the Merger or the Stock Issuance has become final and non-appealable, (iv) if the board of directors of the other party changes its recommendation of the Merger prior to the receipt of its stockholder approval, (v) if the other party breaches its obligation not to solicit competing acquisition proposals in any material respect, or (vi) if the other party breaches its representations or warranties or fails to perform its covenants and such breach would cause a failure of the related closing condition and either is not curable by the outside date or is not cured within thirty days of notice of the breach. Upon termination of the Merger Agreement, under certain specified circumstances, the Company may be required to pay a termination fee of $66 million to Builders FirstSource or Builders FirstSource may be required to pay a termination fee of $100 million to the Company. The foregoing description of the Merger Agreement is not complete and is qualified in its entirety by reference to the full text of the Merger Agreement included as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC on August 27, 2020 and incorporated by reference in this Quarterly Report on Form 10-Q. The Company incurred Merger-related costs of $8.5 million and $9.2 million for the three and nine months ended September 30, 2020, respectively, which are included in selling, general and administrative expenses on the condensed consolidated statements of operations. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2020 | |
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. During the measurement period, fair values assigned to the assets and liabilities may be adjusted as the Company receives additional information. The Company accounts for all acquisitions using the acquisition method of accounting under ASC 805, Business Combinations, whereby the results of operations of the acquired company are included in the Company’s consolidated financial statements beginning on the acquisition date. 2019 Acquisitions The Company completed the following acquisitions during the nine months ended September 30, 2019: • On January 14, 2019, the Company acquired substantially all of the assets and assumed certain liabilities of Barefoot and Company (“Barefoot”), a supplier of windows, exterior doors, hardware, specialty products and installation services in the Charlotte, North Carolina metropolitan area. • On February 8, 2019, the Company acquired substantially all of the assets and assumed certain liabilities of Locust Lumber, a supplier of lumber products and building materials primarily to custom homebuilders and professional remodeling contractors in the Charlotte, North Carolina metropolitan area. • On August 1, 2019, the Company acquired substantially all of the assets and assumed certain liabilities of Kingston Lumber, a supplier of lumber products, trusses and other building materials primarily to custom homebuilders and professional remodeling contractors in the Seattle, Washington metropolitan area. • On September 3, 2019, the Company acquired substantially all of the assets and assumed certain liabilities of Heritage One Door & Carpentry (“Heritage One”), a supplier of pre-hung doors, millwork, hardware and finish carpentry services in the Sacramento, California metropolitan area. • On September 16, 2019, the Company acquired substantially all of the assets and assumed certain liabilities of Colorado Fasteners, a supplier of fasteners, tools and other related products in the Denver, Colorado metropolitan area. The Barefoot, Locust Lumber, Kingston Lumber, Heritage One and Colorado Fasteners acquisitions (the “Acquisitions”) enhance the Company’s value-added offerings and footprint in the respective metropolitan areas. The purchase price, in aggregate, for the Acquisitions was $89.5 million. The aggregate purchase price included a holdback which, after certain post-closing adjustments, required the Company to pay $4.2 million, in aggregate, to the sellers of certain of the Acquisitions during the nine months ended September 30, 2020. The Company funded the Acquisitions through available cash. The purchase price allocation for the Acquisitions, in aggregate, resulted in the recognition of goodwill of $19.0 million, customer relationship intangible assets of $33.1 million, non-compete agreement intangible assets of $0.5 million, accounts receivable of $22.1 million, inventory of $14.6 million and property and equipment of $5.6 million, as well as other operating assets and liabilities. The customer relationship and non-compete agreement intangible assets have a weighted average useful life of 9 years and 4 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 is expected to be deductible for tax purposes. |
Accounts Receivable
Accounts Receivable | 9 Months Ended |
Sep. 30, 2020 | |
Receivables [Abstract] | |
Accounts Receivable | Accounts Receivable Accounts receivable consist of the following at September 30, 2020 and December 31, 2019: (in thousands) September 30, December 31, Trade receivables $ 403,406 $ 334,059 Allowance for doubtful accounts (6,635) (5,674) Other allowances (3,036) (2,644) $ 393,735 $ 325,741 The allowance for doubtful accounts is based on an assessment of individual past due accounts, historical write-off experience, accounts receivable aging, customer disputes and the current and forecasted business environment. Account balances are charged off when the potential for recovery is considered remote. The following table shows the changes in the allowance for doubtful accounts for the nine months ended September 30, 2020: (in thousands) 2020 Balance at January 1 $ 5,674 Write-offs (2,185) Recoveries 1,247 Increase in allowance 1,899 Balance at September 30 $ 6,635 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Debt Long-term debt as of September 30, 2020 and December 31, 2019 consists of the following: (in thousands) September 30, December 31, Senior secured notes, due 2024 $ 350,000 $ 350,000 Revolving credit agreement — — 350,000 350,000 Unamortized debt issuance costs related to senior secured notes (3,341) (3,968) 346,659 346,032 Less: Current portion of long-term debt — — $ 346,659 $ 346,032 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 September 30, 2020, the estimated market value of the Senior Notes was approximately $10.3 million higher than 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 |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Disaggregation of revenue The following table shows net sales classified by major product category for the three and nine months ended September 30, 2020 and 2019: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2020 2019 2020 2019 Millwork, doors & windows $ 299,812 $ 285,750 $ 883,480 $ 796,807 Structural components 185,910 175,344 510,789 483,575 Lumber & lumber sheet goods 383,626 274,908 935,582 798,722 Other building products & services 220,995 228,247 661,267 656,925 Total net sales $ 1,090,343 $ 964,249 $ 2,991,118 $ 2,736,029 The following table reflects the Company’s estimate of net sales by each customer type for the three and nine months ended September 30, 2020 and 2019: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2020 2019 2020 2019 Single-family homebuilders $ 811,081 $ 718,690 $ 2,188,240 $ 2,064,382 Remodeling contractors 143,536 115,756 375,904 314,277 Multi-family, commercial & other contractors 135,726 129,803 426,974 357,370 Total net sales $ 1,090,343 $ 964,249 $ 2,991,118 $ 2,736,029 Net sales for the Company's building products contracts was $850.9 million, $728.5 million, $2,276.9 million and $2,061.8 million for the three and nine months ended September 30, 2020 and 2019, respectively. Net sales for the Company's construction services contracts, which includes both products and installation services, was $239.5 million, $235.8 million, $714.2 million and $674.3 million for the three and nine months ended September 30, 2020 and 2019, respectively. Contract balances The following table reflects the Company’s contract balances as of September 30, 2020 and December 31, 2019: (in thousands) September 30, December 31, Change Receivables, including unbilled receivables presented in prepaid expenses and other current assets $ 409,640 $ 333,044 $ 76,596 Contract assets 36,422 32,125 4,297 Contract liabilities $ 44,980 $ 31,094 $ 13,886 During the nine months ended September 30, 2020, the Company’s contract assets increased by $4.3 million and the Company’s contract liabilities increased by $13.9 million. The changes in contract assets and liabilities were primarily due to the timing of revenue recognition, as the balances were not materially impacted by any other factors. For the three and nine months ended September 30, 2020, the Company recognized revenue of $1.4 million and $29.2 million, respectively, that was included in contract liabilities as of December 31, 2019. Revenue recognized related to performance obligations that were satisfied or partially satisfied in previous periods was not material for the three and nine months ended September 30, 2020. As permitted by ASC 606, Revenue from Contracts with Customers, 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 | 9 Months Ended |
Sep. 30, 2020 | |
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 $0.2 million against its deferred tax assets related to certain state tax jurisdictions as of September 30, 2020 and $0.1 million as of December 31, 2019. 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 September 30, 2020 and December 31, 2019. For the three and nine months ended September 30, 2020, the Company’s effective tax rate was 23.5% and 23.8%, respectively, which varied from the federal statutory rate of 21% primarily due to state income taxes and nondeductible Merger-related costs. For the three and nine months ended September 30, 2019, the Company’s effective tax rate was 28.2% and 24.9%, respectively, which varied from the federal statutory rate of 21% primarily due to state income taxes and an out of period expense. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and ContingenciesFrom 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. |
Stock Based Compensation
Stock Based Compensation | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock Based Compensation | Stock Based Compensation The following table highlights stock based compensation for the three and nine months ended September 30, 2020 and 2019: Three Months Ended Nine Months Ended 2020 2019 2020 2019 Restricted stock units (a) $ 4,612 $ 3,014 $ 10,748 $ 9,177 Stock options (b) — — 362 — Stock based compensation $ 4,612 $ 3,014 $ 11,110 $ 9,177 (a) Includes service-based and performance-based restricted stock units. (b) Represents expense related to a modification of vested stock options. During the three and nine months ended September 30, 2020, the Company granted less than 0.1 million and 0.4 million service-based restricted stock unit awards, respectively. In addition, during the nine months ended September 30, 2020, the Company granted performance-based restricted stock units that allow for a maximum of 0.2 million performance-based restricted stock units to be earned. During the nine months ended September 30, 2019, the Company granted 0.5 million service-based restricted stock unit awards and performance-based restricted stock units that allow for a maximum of 0.4 million performance-based restricted stock units to be earned. |
Segments
Segments | 9 Months Ended |
Sep. 30, 2020 | |
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 comprises 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 and nine months ended September 30, 2020 and 2019. Adjusted EBITDA is used as a performance metric by the CODM in determining how to allocate resources and assess performance. Three Months Ended September 30, 2020 (in thousands) Net Sales Gross Profit Depreciation & Amortization Adjusted EBITDA Geographic divisions $ 1,090,343 $ 273,082 $ 19,941 $ 114,149 Other reconciling items — — 512 (14,961) $ 1,090,343 $ 273,082 $ 20,453 Three Months Ended September 30, 2019 (in thousands) Net Sales Gross Profit Depreciation & Amortization Adjusted EBITDA Geographic divisions $ 964,249 $ 254,767 $ 17,974 $ 96,752 Other reconciling items — — 561 (22,094) $ 964,249 $ 254,767 $ 18,535 Nine Months Ended September 30, 2020 (in thousands) Net Sales Gross Profit Depreciation & Amortization Adjusted EBITDA Geographic divisions $ 2,991,118 $ 763,032 $ 59,218 $ 300,991 Other reconciling items — — 1,529 (50,448) $ 2,991,118 $ 763,032 $ 60,747 Nine Months Ended September 30, 2019 (in thousands) Net Sales Gross Profit Depreciation & Amortization Adjusted EBITDA Geographic divisions $ 2,736,029 $ 716,666 $ 51,121 $ 260,537 Other reconciling items — — 1,838 (58,150) $ 2,736,029 $ 716,666 $ 52,959 Reconciliation to consolidated financial statements: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2020 2019 2020 2019 Income before income taxes $ 58,701 $ 46,787 $ 144,980 $ 119,326 Interest expense 5,744 5,773 17,880 17,385 Interest income (224) (1,047) (1,146) (2,832) Depreciation and amortization 20,453 18,535 60,747 52,959 Merger-related costs 8,488 — 9,150 — Acquisition and integration costs (a) 1,377 1,524 4,566 6,294 Non-cash stock compensation expense 4,612 3,014 11,110 9,177 Business reorganization costs (b) 37 72 3,256 300 Other items (c) — — — (222) Adjusted EBITDA of other reconciling items 14,961 22,094 50,448 58,150 Adjusted EBITDA of geographic divisions reportable segment $ 114,149 $ 96,752 $ 300,991 $ 260,537 (a) Represents costs for acquisitions and related integration costs, as well as system integration and other costs related to the integration of BMHC and SBS as a result of the 2015 merger transaction. (b) For the three and nine months ended September 30, 2020, represents asset impairment and other charges related to the closure or relocation of the operations of certain of the Company’s facilities, which were not related to the COVID-19 pandemic, and severance expense related to permanent headcount reductions due to the impact of the COVID-19 pandemic. For the three and nine months ended September 30, 2019, represents asset impairment charges and the effect of certain customary post-closing adjustments related to the November 1, 2018 disposition of the Company’s Coleman Floor business. (c) For the nine months ended September 30, 2019, represents income from a recovery made by the Company related to a fire at one of the Company’s facilities during 2015 and the effect of the settlement of pending litigation for an amount below what was previously accrued. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per ShareBasic 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 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 and nine months ended September 30, 2020 and 2019 are presented below: Three Months Ended September 30, Nine Months Ended September 30, (in thousands, except per share amounts) 2020 2019 2020 2019 Income attributable to common stockholders $ 44,895 $ 33,597 $ 110,546 $ 89,646 Weighted average common shares outstanding, basic 67,141 66,685 67,001 66,681 Effect of dilutive securities: Restricted stock units (a) 682 544 602 450 Stock options 144 132 122 109 Weighted average common shares outstanding, diluted 67,967 67,361 67,725 67,240 Basic income per common share $ 0.67 $ 0.50 $ 1.65 $ 1.34 Diluted income per common share $ 0.66 $ 0.50 $ 1.63 $ 1.33 (a) Includes service-based and contingently issuable performance-based restricted stock units. For the three and nine months ended September 30, 2020 and 2019, there were no anti-dilutive restricted stock units or stock options. As of September 30, 2020, the number of currently outstanding performance-based restricted stock units that are issued upon vesting could range from zero to a maximum of 0.9 million. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of presentation | Basis of PresentationThe 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, 2019 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, 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 condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 (“2019 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. |
Comprehensive income | Comprehensive income Comprehensive income is equal to the net income for all periods presented. |
Cash and cash equivalents | Cash and cash equivalents Cash equivalents are highly liquid investments that are readily convertible to known amounts of cash and have a maturity of three months or less from the time of purchase. As of September 30, 2020, the Company had no cash equivalents and as of December 31, 2019, the Company had cash equivalents of $4.4 million. Cash equivalents are valued at amortized cost, which approximates fair value due to the short-term maturity of these instruments, and were classified as Level 1 or Level 2 measurements in accordance with Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures (“ASC 820”). Book overdrafts occur when purchases on corporate purchasing cards and checks written exceed available bank balances at a specific bank, despite there being cash at the Company’s other financial institutions. For accounting purposes, the Company reclassifies these book overdrafts to accounts payable on the consolidated balance sheets. Book overdrafts included in accounts payable were $19.5 million and $2.5 million at September 30, 2020 and December 31, 2019, respectively. |
Use of estimates | Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company evaluates these estimates and judgments on an ongoing basis and bases its estimates on historical experience, current conditions and various other assumptions that are believed to be reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities as well as identifying and assessing the accounting treatment with respect to commitments and contingencies. |
Statement of cash flows | Statement of cash flows Proceeds from revolving credit facility and repayments of proceeds from revolving credit facility as presented on the condensed consolidated statements of cash flows include all cash activities and transactions between the Company and its associated lenders in relation to the revolving credit facility, excluding interest and fees, and for the nine months ended September 30, 2019, is specifically inclusive of operating cash receipts that were automatically applied to the revolving credit facility pursuant to a voluntary cash sweep arrangement. See Note 6 for further details on the Company’s revolving credit facility. |
Recently issued accounting pronouncements | Recently adopted accounting pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and issued subsequent amendments to the initial guidance to provide additional clarification on specific topics (“ASU 2016-13”). ASU 2016-13 amends the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade receivables. ASU 2016-13 became effective for the Company’s annual and interim periods beginning on January 1, 2020. Modified retrospective application is required, with certain exceptions. The adoption of the standard did not have a material impact on the Company’s consolidated financial statements. 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 became 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. Prospective application is required. The adoption of the standard did not have a material impact on the Company’s consolidated financial statements. In August 2018, the FASB issued Accounting Standards Update 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). ASU 2018-13 modifies the disclosure requirements on fair value measurements by removing, modifying and adding certain disclosure requirements in ASC 820. ASU 2018-13 became effective for the Company’s annual and interim periods beginning on January 1, 2020. Certain disclosures in ASU 2018-13 are required to be applied prospectively, while others require retrospective application. The adoption of the standard did not have a material impact on the Company’s consolidated financial statements. Recently issued accounting pronouncements not yet adopted In December 2019, the FASB issued Accounting Standards Update 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 removes certain exceptions to the general principles in ASC 740 and clarifies and amends certain guidance to promote consistent application. ASU 2019-12 is effective for the Company's annual and interim periods beginning on January 1, 2021, with early adoption permitted. Depending on the amendment, adoption may be applied on a retrospective, modified retrospective or prospective basis. The adoption of the standard is not expected to have a material impact on the Company’s consolidated financial statements. In March 2020, the FASB issued Accounting Standards Update 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). ASU 2020-04 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by the expected transition away from reference rates that are expected to be discontinued, such as LIBOR. ASU 2020-04 was effective upon issuance. The Company may elect to apply the guidance prospectively through December 31, 2022. The Company is evaluating the impact of the standard on its consolidated financial statements. |
Acquisitions (Policies)
Acquisitions (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Acquisitions | AcquisitionsFor 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. During the measurement period, fair values assigned to the assets and liabilities may be adjusted as the Company receives additional information.The Company accounts for all acquisitions using the acquisition method of accounting under ASC 805, Business Combinations, whereby the results of operations of the acquired company are included in the Company’s consolidated financial statements beginning on the acquisition date. |
Income Taxes (Policies)
Income Taxes (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
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) | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Commitments and ContingenciesFrom 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) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings Per ShareBasic 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 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) | 9 Months Ended |
Sep. 30, 2020 | |
Receivables [Abstract] | |
Schedule of accounts receivable | Accounts receivable consist of the following at September 30, 2020 and December 31, 2019: (in thousands) September 30, December 31, Trade receivables $ 403,406 $ 334,059 Allowance for doubtful accounts (6,635) (5,674) Other allowances (3,036) (2,644) $ 393,735 $ 325,741 |
Allowance For Doubtful Accounts [Table Text Block] | The following table shows the changes in the allowance for doubtful accounts for the nine months ended September 30, 2020: (in thousands) 2020 Balance at January 1 $ 5,674 Write-offs (2,185) Recoveries 1,247 Increase in allowance 1,899 Balance at September 30 $ 6,635 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of debt | Long-term debt as of September 30, 2020 and December 31, 2019 consists of the following: (in thousands) September 30, December 31, Senior secured notes, due 2024 $ 350,000 $ 350,000 Revolving credit agreement — — 350,000 350,000 Unamortized debt issuance costs related to senior secured notes (3,341) (3,968) 346,659 346,032 Less: Current portion of long-term debt — — $ 346,659 $ 346,032 |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of revenue | The following table shows net sales classified by major product category for the three and nine months ended September 30, 2020 and 2019: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2020 2019 2020 2019 Millwork, doors & windows $ 299,812 $ 285,750 $ 883,480 $ 796,807 Structural components 185,910 175,344 510,789 483,575 Lumber & lumber sheet goods 383,626 274,908 935,582 798,722 Other building products & services 220,995 228,247 661,267 656,925 Total net sales $ 1,090,343 $ 964,249 $ 2,991,118 $ 2,736,029 The following table reflects the Company’s estimate of net sales by each customer type for the three and nine months ended September 30, 2020 and 2019: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2020 2019 2020 2019 Single-family homebuilders $ 811,081 $ 718,690 $ 2,188,240 $ 2,064,382 Remodeling contractors 143,536 115,756 375,904 314,277 Multi-family, commercial & other contractors 135,726 129,803 426,974 357,370 Total net sales $ 1,090,343 $ 964,249 $ 2,991,118 $ 2,736,029 |
Contract balances | The following table reflects the Company’s contract balances as of September 30, 2020 and December 31, 2019: (in thousands) September 30, December 31, Change Receivables, including unbilled receivables presented in prepaid expenses and other current assets $ 409,640 $ 333,044 $ 76,596 Contract assets 36,422 32,125 4,297 Contract liabilities $ 44,980 $ 31,094 $ 13,886 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of expenses related to share-based payments | The following table highlights stock based compensation for the three and nine months ended September 30, 2020 and 2019: Three Months Ended Nine Months Ended 2020 2019 2020 2019 Restricted stock units (a) $ 4,612 $ 3,014 $ 10,748 $ 9,177 Stock options (b) — — 362 — Stock based compensation $ 4,612 $ 3,014 $ 11,110 $ 9,177 (a) Includes service-based and performance-based restricted stock units. (b) Represents expense related to a modification of vested stock options. |
Segments (Tables)
Segments (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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 and nine months ended September 30, 2020 and 2019. Adjusted EBITDA is used as a performance metric by the CODM in determining how to allocate resources and assess performance. Three Months Ended September 30, 2020 (in thousands) Net Sales Gross Profit Depreciation & Amortization Adjusted EBITDA Geographic divisions $ 1,090,343 $ 273,082 $ 19,941 $ 114,149 Other reconciling items — — 512 (14,961) $ 1,090,343 $ 273,082 $ 20,453 Three Months Ended September 30, 2019 (in thousands) Net Sales Gross Profit Depreciation & Amortization Adjusted EBITDA Geographic divisions $ 964,249 $ 254,767 $ 17,974 $ 96,752 Other reconciling items — — 561 (22,094) $ 964,249 $ 254,767 $ 18,535 Nine Months Ended September 30, 2020 (in thousands) Net Sales Gross Profit Depreciation & Amortization Adjusted EBITDA Geographic divisions $ 2,991,118 $ 763,032 $ 59,218 $ 300,991 Other reconciling items — — 1,529 (50,448) $ 2,991,118 $ 763,032 $ 60,747 Nine Months Ended September 30, 2019 (in thousands) Net Sales Gross Profit Depreciation & Amortization Adjusted EBITDA Geographic divisions $ 2,736,029 $ 716,666 $ 51,121 $ 260,537 Other reconciling items — — 1,838 (58,150) $ 2,736,029 $ 716,666 $ 52,959 |
Reconciliation to consolidated financial statements | Reconciliation to consolidated financial statements: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2020 2019 2020 2019 Income before income taxes $ 58,701 $ 46,787 $ 144,980 $ 119,326 Interest expense 5,744 5,773 17,880 17,385 Interest income (224) (1,047) (1,146) (2,832) Depreciation and amortization 20,453 18,535 60,747 52,959 Merger-related costs 8,488 — 9,150 — Acquisition and integration costs (a) 1,377 1,524 4,566 6,294 Non-cash stock compensation expense 4,612 3,014 11,110 9,177 Business reorganization costs (b) 37 72 3,256 300 Other items (c) — — — (222) Adjusted EBITDA of other reconciling items 14,961 22,094 50,448 58,150 Adjusted EBITDA of geographic divisions reportable segment $ 114,149 $ 96,752 $ 300,991 $ 260,537 (a) Represents costs for acquisitions and related integration costs, as well as system integration and other costs related to the integration of BMHC and SBS as a result of the 2015 merger transaction. (b) For the three and nine months ended September 30, 2020, represents asset impairment and other charges related to the closure or relocation of the operations of certain of the Company’s facilities, which were not related to the COVID-19 pandemic, and severance expense related to permanent headcount reductions due to the impact of the COVID-19 pandemic. For the three and nine months ended September 30, 2019, represents asset impairment charges and the effect of certain customary post-closing adjustments related to the November 1, 2018 disposition of the Company’s Coleman Floor business. (c) For the nine months ended September 30, 2019, represents income from a recovery made by the Company related to a fire at one of the Company’s facilities during 2015 and the effect of the settlement of pending litigation for an amount below what was previously accrued. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted EPS calculations | The basic and diluted EPS calculations for the three and nine months ended September 30, 2020 and 2019 are presented below: Three Months Ended September 30, Nine Months Ended September 30, (in thousands, except per share amounts) 2020 2019 2020 2019 Income attributable to common stockholders $ 44,895 $ 33,597 $ 110,546 $ 89,646 Weighted average common shares outstanding, basic 67,141 66,685 67,001 66,681 Effect of dilutive securities: Restricted stock units (a) 682 544 602 450 Stock options 144 132 122 109 Weighted average common shares outstanding, diluted 67,967 67,361 67,725 67,240 Basic income per common share $ 0.67 $ 0.50 $ 1.65 $ 1.34 Diluted income per common share $ 0.66 $ 0.50 $ 1.63 $ 1.33 (a) Includes service-based and contingently issuable performance-based restricted stock units. |
Summary of Significant Accounti
Summary of Significant Accounting Policies (Narrative) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Organization Consolidation And Presentation [Line Items] | ||||||||
Cash equivalents | $ 0 | $ 0 | $ 4,400,000 | |||||
Repurchases of common stock under share repurchase program (shares) | 0 | 0 | 100,000 | 1,000,000 | ||||
Weighted average cost of repurchased shares | $ 16.20 | $ 17.11 | ||||||
Repurchases of common stock under share repurchase program | $ 1,416,000 | $ 737,000 | $ 15,709,000 | $ 1,400,000 | $ 16,400,000 | |||
Share repurchase program authorized | $ 75,000,000 | 75,000,000 | ||||||
Remaining under current repurchase authorization | 54,200,000 | 54,200,000 | ||||||
Selling, General and Administrative Expenses [Member] | ||||||||
Organization Consolidation And Presentation [Line Items] | ||||||||
Merger and integration costs | 900,000 | 2,400,000 | ||||||
Accounts Payable [Member] | ||||||||
Organization Consolidation And Presentation [Line Items] | ||||||||
Book Overdraft | $ 19,500,000 | $ 19,500,000 | $ 2,500,000 |
Merger Agreement with Builder_2
Merger Agreement with Builders FirstSource, Inc. (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020USD ($)$ / shares | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)$ / shares | Sep. 30, 2019USD ($) | Dec. 31, 2019$ / shares | |
Business Acquisition [Line Items] | |||||
Par value | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | ||
Exchange ratio | 1.3125 | ||||
Merger related costs | $ | $ 8,488 | $ 0 | $ 9,150 | $ 0 | |
BMC Stock Holdings, Inc. [Member] | |||||
Business Acquisition [Line Items] | |||||
Par value | $ / shares | $ 0.01 | $ 0.01 | |||
Ownership percent | 43.00% | 43.00% | |||
Termination fee | $ | $ 66,000 | ||||
Builders FirstSource [Member] | |||||
Business Acquisition [Line Items] | |||||
Par value | $ / shares | $ 0.01 | $ 0.01 | |||
Ownership percent | 57.00% | 57.00% | |||
Termination fee | $ | $ 100,000 |
Acquisitions (Narrative) (Detai
Acquisitions (Narrative) (Details) - USD ($) $ in Thousands | Sep. 16, 2019 | Sep. 03, 2019 | Aug. 01, 2019 | Feb. 08, 2019 | Jan. 14, 2019 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 |
Business Acquisition [Line Items] | |||||||||
Acquisition holdback | $ 3,462 | $ 4,527 | |||||||
Goodwill | 295,390 | $ 297,146 | |||||||
Barefoot [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Date of acquisition | Jan. 14, 2019 | ||||||||
Locust [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Date of acquisition | Feb. 8, 2019 | ||||||||
Kingston Lumber [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Date of acquisition | Aug. 1, 2019 | ||||||||
Heritage One [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Date of acquisition | Sep. 3, 2019 | ||||||||
Colorado Fasteners [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Date of acquisition | Sep. 16, 2019 | ||||||||
2019 Acquisitions [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Purchase price | $ 89,500 | 89,500 | |||||||
Acquisition holdback | 4,200 | ||||||||
Payment of acquisition holdback | $ 4,200 | ||||||||
Goodwill | 19,000 | 19,000 | |||||||
Accounts receivable | 22,100 | 22,100 | |||||||
Inventory | 14,600 | 14,600 | |||||||
Property and equipment | 5,600 | 5,600 | |||||||
Net sales of acquiree since acquisition date | 38,700 | 84,600 | |||||||
Estimated pre-tax earnings of acquiree since acquisition date | 2,900 | 7,100 | |||||||
Customer relationships [Member] | 2019 Acquisitions [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Intangible assets | 33,100 | $ 33,100 | |||||||
Useful life | 9 years | ||||||||
Non-compete agreements [Member] | 2019 Acquisitions [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Intangible assets | $ 500 | $ 500 | |||||||
Useful life | 4 years |
Accounts Receivable (Accounts R
Accounts Receivable (Accounts Receivable) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Receivables [Abstract] | ||
Trade receivables | $ 403,406 | $ 334,059 |
Allowance for doubtful accounts | (6,635) | (5,674) |
Other allowances | (3,036) | (2,644) |
Accounts receivable, net | $ 393,735 | $ 325,741 |
Accounts Receivable (Allowance)
Accounts Receivable (Allowance) (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |
Balance at January 1 | $ 5,674 |
Write-offs | (2,185) |
Recoveries | 1,247 |
Increase in allowance | 1,899 |
Balance at September 30 | $ 6,635 |
Debt (Debt Table) (Details)
Debt (Debt Table) (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 15, 2016 |
Debt Instrument [Line Items] | |||
Outstanding borrowings | $ 350,000,000 | $ 350,000,000 | |
Unamortized debt issuance costs related to senior secured notes | (3,341,000) | (3,968,000) | |
Total debt | 346,659,000 | 346,032,000 | |
Less: Current portion of long-term debt | 0 | 0 | |
Long-term debt | 346,659,000 | 346,032,000 | |
Senior secured notes, due 2024 [Member] | |||
Debt Instrument [Line Items] | |||
Outstanding borrowings | 350,000,000 | 350,000,000 | $ 350,000,000 |
Revolving credit agreement [Member] | |||
Debt Instrument [Line Items] | |||
Outstanding borrowings | $ 0 | $ 0 |
Debt (Narrative) (Details)
Debt (Narrative) (Details) - USD ($) | Sep. 15, 2016 | Dec. 01, 2015 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 |
Debt Instrument [Line Items] | |||||
Outstanding borrowings | $ 350,000,000 | $ 350,000,000 | |||
Repayment of revolver borrowings | 144,000,000 | $ 110,987,000 | |||
Senior secured notes, due 2024 [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt issuance date | Sep. 15, 2016 | ||||
Interest rate | 5.50% | ||||
Estimated market value above (below) carrying amount | 10,300,000 | ||||
Outstanding borrowings | $ 350,000,000 | 350,000,000 | 350,000,000 | ||
Revolving credit agreement [Member] | |||||
Debt Instrument [Line Items] | |||||
Date entered into agreement | Dec. 1, 2015 | ||||
Maximum borrowing capacity | 425,000,000 | ||||
Outstanding borrowings | 0 | $ 0 | |||
Net availability | 362,300,000 | ||||
Letters of credit outstanding | $ 61,600,000 | ||||
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 by Product Cat
Revenue (Revenue by Product Category) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 1,090,343 | $ 964,249 | $ 2,991,118 | $ 2,736,029 |
Millwork, doors & windows [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 299,812 | 285,750 | 883,480 | 796,807 |
Structural components [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 185,910 | 175,344 | 510,789 | 483,575 |
Lumber & lumber sheet goods [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 383,626 | 274,908 | 935,582 | 798,722 |
Other building products & services [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 220,995 | $ 228,247 | $ 661,267 | $ 656,925 |
Revenue (Revenue by Customer Ty
Revenue (Revenue by Customer Type) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 1,090,343 | $ 964,249 | $ 2,991,118 | $ 2,736,029 |
Single-family homebuilders [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 811,081 | 718,690 | 2,188,240 | 2,064,382 |
Remodeling contractors [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 143,536 | 115,756 | 375,904 | 314,277 |
Multi-family, commercial & other contractors [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 135,726 | $ 129,803 | $ 426,974 | $ 357,370 |
Revenue (Contract Assets and Li
Revenue (Contract Assets and Liabilities) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Receivables, including unbilled receivables presented in prepaid expenses and other current assets | $ 409,640 | $ 333,044 |
Receivables, including unbilled receivables change | 76,596 | |
Contract assets | 36,422 | 32,125 |
Contract assets change | 4,297 | |
Contract liabilities | 44,980 | $ 31,094 |
Contract liabilities change | $ 13,886 |
Revenue (Narrative) (Details)
Revenue (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 1,090,343 | $ 964,249 | $ 2,991,118 | $ 2,736,029 |
Contract assets change | 4,297 | |||
Contract liabilities change | 13,886 | |||
Revenue recognized previously included in contract liabilities | 1,400 | 29,200 | ||
Building Products [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 850,900 | 728,500 | 2,276,900 | 2,061,800 |
Construction Services [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 239,500 | $ 235,800 | $ 714,200 | $ 674,300 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Income Tax Contingency [Line Items] | |||||
Valuation allowance | $ 200 | $ 200 | $ 100 | ||
Effective income tax rate | 23.50% | 28.20% | 23.80% | 24.90% | |
Federal statutory rate | 21.00% | 21.00% | 21.00% | 21.00% | |
Change in income tax payable related to CARES Act | $ (1,400) | ||||
Deferred income tax benefit, CARES Act | $ 1,400 |
Stock Based Compensation (Stock
Stock Based Compensation (Stock based compensation expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock based compensation | $ 4,612 | $ 3,014 | $ 11,110 | $ 9,177 | |||
Restricted stock units [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock based compensation | [1] | 4,612 | 3,014 | 10,748 | 9,177 | ||
Stock options [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock based compensation | $ 0 | [2] | $ 0 | $ 362 | [2] | $ 0 | |
[1] | Includes service-based and performance-based restricted stock units. | ||||||
[2] | Represents expense related to a modification of vested stock options. |
Stock Based Compensation (Narra
Stock Based Compensation (Narrative) (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | |
Restricted stock units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Restricted stock units granted | 0.1 | 0.4 | 0.5 |
Maximum [Member] | Performance-based restricted stock units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance-based shares available for vesting | 0.2 | 0.4 |
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 | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Segment Reporting Information [Line Items] | ||||
Net sales | $ 1,090,343 | $ 964,249 | $ 2,991,118 | $ 2,736,029 |
Gross profit | 273,082 | 254,767 | 763,032 | 716,666 |
Depreciation & amortization | 20,453 | 18,535 | 60,747 | 52,959 |
Operating segments [Member] | Geographic divisions [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 1,090,343 | 964,249 | 2,991,118 | 2,736,029 |
Gross profit | 273,082 | 254,767 | 763,032 | 716,666 |
Depreciation & amortization | 19,941 | 17,974 | 59,218 | 51,121 |
Adjusted EBITDA | 114,149 | 96,752 | 300,991 | 260,537 |
Other reconciling items [Member] | Other reconciling items [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 0 | 0 | 0 | 0 |
Gross profit | 0 | 0 | 0 | 0 |
Depreciation & amortization | 512 | 561 | 1,529 | 1,838 |
Adjusted EBITDA | $ (14,961) | $ (22,094) | $ (50,448) | $ (58,150) |
Segments (Reconciliation of adj
Segments (Reconciliation of adjusted EBITDA to consolidated financial statements) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||
Income before income taxes | $ 58,701 | $ 46,787 | $ 144,980 | $ 119,326 | |||
Interest expense | 5,744 | 5,773 | 17,880 | 17,385 | |||
Interest income | (224) | (1,047) | (1,146) | (2,832) | |||
Depreciation and amortization | 20,453 | 18,535 | 60,747 | 52,959 | |||
Merger related costs | 8,488 | 0 | 9,150 | 0 | |||
Acquisition and integration costs | [1] | 1,377 | 1,524 | 4,566 | 6,294 | ||
Non-cash stock compensation expense | 4,612 | 3,014 | 11,110 | 9,177 | |||
Business reorganization costs | [2] | 37 | 72 | 3,256 | 300 | ||
Other items | 0 | 0 | [3] | 0 | (222) | [3] | |
Other reconciling items [Member] | Other reconciling items [Member] | |||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||
Depreciation and amortization | 512 | 561 | 1,529 | 1,838 | |||
Adjusted EBITDA | 14,961 | 22,094 | 50,448 | 58,150 | |||
Operating segments [Member] | Geographic divisions [Member] | |||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||
Depreciation and amortization | 19,941 | 17,974 | 59,218 | 51,121 | |||
Adjusted EBITDA | $ (114,149) | $ (96,752) | $ (300,991) | $ (260,537) | |||
[1] | Represents costs for acquisitions and related integration costs, as well as system integration and other costs related to the integration of BMHC and SBS as a result of the 2015 merger transaction. | ||||||
[2] | For the nine months ended September 30, 2019, represents income from a recovery made by the Company related to a fire at one of the Company’s facilities during 2015 and the effect of the settlement of pending litigation for an amount below what was previously accrued. | ||||||
[3] | For the three and nine months ended September 30, 2020, represents asset impairment and other charges related to the closure or relocation of the operations of certain of the Company’s facilities, which were not related to the COVID-19 pandemic, and severance expense related to permanent headcount reductions due to the impact of the COVID-19 pandemic. For the three and nine months ended September 30, 2019, represents asset impairment charges and the effect of certain customary post-closing adjustments related to the November 1, 2018 disposition of the Company’s Coleman Floor business. |
Segments (Narrative) (Details)
Segments (Narrative) (Details) | 9 Months Ended |
Sep. 30, 2020segment | |
Segment Reporting Information [Line Items] | |
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 | 9 Months Ended | |||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |||||||||
Income attributable to common stockholders | $ 44,895 | $ 43,622 | $ 22,029 | $ 33,597 | $ 35,699 | $ 20,350 | $ 110,546 | $ 89,646 | |
Weighted average common shares outstanding, basic (in shares) | 67,141 | 66,685 | 67,001 | 66,681 | |||||
Weighted average common shares outstanding, diluted (in shares) | 67,967 | 67,361 | 67,725 | 67,240 | |||||
Basic income per common share (in dollars per share) | $ 0.67 | $ 0.50 | $ 1.65 | $ 1.34 | |||||
Diluted income per common share (in dollars per share) | $ 0.66 | $ 0.50 | $ 1.63 | $ 1.33 | |||||
Restricted stock units [Member] | |||||||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |||||||||
Stock based payment arrangements (in shares) | [1] | 682 | 544 | 602 | 450 | ||||
Stock options [Member] | |||||||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |||||||||
Stock based payment arrangements (in shares) | 144 | 132 | 122 | 109 | |||||
[1] | Includes service-based and contingently issuable performance-based restricted stock units. |
Earnings Per Share (Narrative)
Earnings Per Share (Narrative) (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 0 | 0 | 0 | 0 |
Performance-based restricted stock units [Member] | Minimum [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Performance-based restricted stock units that could be issued upon vesting | 0 | 0 | ||
Performance-based restricted stock units [Member] | Maximum [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Performance-based restricted stock units that could be issued upon vesting | 900,000 | 900,000 |