Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Oct. 31, 2020 | Nov. 30, 2020 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Oct. 31, 2020 | |
Entity File Number | 001-37784 | |
Entity Registrant Name | GMS INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 46-2931287 | |
Entity Address, Address Line One | 100 Crescent Centre Parkway, Suite 800 | |
Entity Address, City or Town | Tucker | |
Entity Address, State or Province | GA | |
Entity Address, Postal Zip Code | 30084 | |
City Area Code | 800 | |
Local Phone Number | 392-4619 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | GMS | |
Security Exchange Name | NYSE | |
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 | 42,681,068 | |
Entity Central Index Key | 0001600438 | |
Current Fiscal Year End Date | --04-30 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Oct. 31, 2020 | Apr. 30, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 118,168 | $ 210,909 |
Trade accounts and notes receivable, net of allowances of $5,273 and $5,141, respectively | 434,836 | 405,254 |
Inventories, net | 302,357 | 299,815 |
Prepaid expenses and other current assets | 19,042 | 14,972 |
Total current assets | 874,403 | 930,950 |
Property and equipment, net of accumulated depreciation of $174,832 and $158,554, respectively | 300,144 | 305,467 |
Operating lease right-of-use assets | 114,198 | 115,257 |
Goodwill | 557,486 | 553,073 |
Intangible assets, net | 339,918 | 361,884 |
Deferred income taxes | 12,651 | 8,904 |
Other assets | 12,074 | 13,247 |
Total assets | 2,210,874 | 2,288,782 |
Current liabilities: | ||
Accounts payable | 163,927 | 213,230 |
Accrued compensation and employee benefits | 43,843 | 67,590 |
Other accrued expenses and current liabilities | 88,170 | 63,812 |
Current portion of long-term debt | 49,302 | 50,201 |
Current portion of operating lease liabilities | 31,694 | 33,040 |
Total current liabilities | 376,936 | 427,873 |
Non-current liabilities: | ||
Long-term debt, less current portion | 946,721 | 1,047,279 |
Long-term operating lease liabilities | 88,122 | 89,605 |
Deferred income taxes, net | 7,837 | 12,018 |
Other liabilities | 73,361 | 78,026 |
Total liabilities | 1,492,977 | 1,654,801 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Common stock, par value $0.01 per share, 500,000 shares authorized; 42,690 and 42,554 shares issued and outstanding as of October 31, 2020 and April 30, 2020, respectively | 427 | 426 |
Preferred stock, par value $0.01 per share, 50,000 shares authorized; 0 shares issued and outstanding as of October 31, 2020 and April 30, 2020 | ||
Additional paid-in capital | 534,646 | 529,662 |
Retained earnings | 224,663 | 168,975 |
Accumulated other comprehensive loss | (41,839) | (65,082) |
Total stockholders' equity | 717,897 | 633,981 |
Total liabilities and stockholders' equity | $ 2,210,874 | $ 2,288,782 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Oct. 31, 2020 | Apr. 30, 2020 |
Condensed Consolidated Balance Sheets | ||
Trade accounts and notes receivable, allowances (in dollars) | $ 5,273 | $ 5,141 |
Property and equipment, accumulated depreciation (in dollars) | $ 174,832 | $ 158,554 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 500,000 | 500,000 |
Common stock, shares issued | 42,690 | 42,554 |
Common stock, shares outstanding | 42,690 | 42,554 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 50,000 | 50,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2020 | Oct. 31, 2019 | ||
Condensed Consolidated Statements of Operations and Comprehensive Income | |||||
Net sales | $ 812,856 | $ 861,929 | $ 1,615,429 | $ 1,709,105 | |
Cost of sales (exclusive of depreciation and amortization shown separately below) | 547,785 | 577,436 | 1,089,900 | 1,150,958 | |
Gross profit | 265,071 | 284,493 | 525,529 | 558,147 | |
Operating expenses: | |||||
Selling, general and administrative | 188,352 | 200,457 | 371,464 | 395,088 | |
Depreciation and amortization | 27,245 | 29,518 | 54,342 | 58,793 | |
Total operating expenses | 215,597 | 229,975 | 425,806 | 453,881 | |
Operating income | 49,474 | 54,518 | 99,723 | 104,266 | |
Other (expense) income: | |||||
Interest expense | (13,525) | (17,559) | (27,606) | (35,836) | |
Write-off of debt discount and deferred financing fees | (707) | (707) | |||
Other income, net | 797 | 813 | 1,452 | 1,752 | |
Total other expense, net | (12,728) | (17,453) | (26,154) | (34,791) | |
Income before taxes | 36,746 | 37,065 | 73,569 | 69,475 | |
Provision for income taxes | 8,277 | 7,927 | 17,881 | 15,517 | |
Net income | $ 28,469 | $ 29,138 | $ 55,688 | $ 53,958 | |
Weighted average common shares outstanding: | |||||
Basic (in shares) | 42,723 | 41,761 | 42,674 | 41,382 | |
Diluted (in shares) | 43,174 | 42,635 | 43,096 | 42,126 | |
Net income per common share: | |||||
Basic (in dollars per share) | [1] | $ 0.67 | $ 0.70 | $ 1.30 | $ 1.30 |
Diluted (in dollars per share) | [1] | $ 0.66 | $ 0.68 | $ 1.29 | $ 1.27 |
Comprehensive income | |||||
Net income | $ 28,469 | $ 29,138 | $ 55,688 | $ 53,958 | |
Foreign currency translation income (loss) | 3,159 | (409) | 19,440 | 11,451 | |
Changes in other comprehensive income (loss), net of tax | 2,844 | (3,602) | 3,803 | (9,667) | |
Comprehensive income | $ 34,472 | $ 25,127 | $ 78,931 | $ 55,742 | |
[1] | See Note 15 for detailed calculations . |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Common Stock | Exchangeable Shares | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total |
Balance at Apr. 30, 2019 | $ 404 | $ 29,639 | $ 480,113 | $ 145,594 | $ (26,574) | $ 629,176 |
Balance (in shares) at Apr. 30, 2019 | 40,375 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 24,820 | 24,820 | ||||
Exercise of Exchangeable Shares | $ 11 | (29,639) | 29,628 | |||
Exercise of Exchangeable Shares (in shares) | 1,129 | |||||
Foreign currency translation adjustments | 11,860 | 11,860 | ||||
Change in other comprehensive income (loss), net of tax | (6,065) | (6,065) | ||||
Equity-based compensation | 1,349 | 1,349 | ||||
Exercise of stock options | 133 | 133 | ||||
Exercise of stock options (in shares) | 9 | |||||
Issuance of common stock pursuant to employee stock purchase plan | $ 1 | 1,021 | 1,022 | |||
Issuance of common stock pursuant to employee stock purchase plan (in shares) | 76 | |||||
Balance at Jul. 31, 2019 | $ 416 | 512,244 | 170,414 | (20,779) | 662,295 | |
Balance (in shares) at Jul. 31, 2019 | 41,589 | |||||
Balance at Apr. 30, 2019 | $ 404 | $ 29,639 | 480,113 | 145,594 | (26,574) | 629,176 |
Balance (in shares) at Apr. 30, 2019 | 40,375 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 53,958 | |||||
Foreign currency translation adjustments | 11,451 | |||||
Balance at Oct. 31, 2019 | $ 422 | 520,855 | 199,552 | (24,790) | 696,039 | |
Balance (in shares) at Oct. 31, 2019 | 42,169 | |||||
Balance at Jul. 31, 2019 | $ 416 | 512,244 | 170,414 | (20,779) | 662,295 | |
Balance (in shares) at Jul. 31, 2019 | 41,589 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 29,138 | 29,138 | ||||
Foreign currency translation adjustments | (409) | (409) | ||||
Change in other comprehensive income (loss), net of tax | (3,602) | (3,602) | ||||
Equity-based compensation | 2,271 | 2,271 | ||||
Exercise of stock options | $ 5 | 6,623 | 6,628 | |||
Exercise of stock options (in shares) | 525 | |||||
Vesting of restricted stock units | $ 1 | (1) | ||||
Vesting of restricted stock units (in shares) | 55 | |||||
Tax withholding related to net share settlements of stock options/equity awards | (282) | (282) | ||||
Balance at Oct. 31, 2019 | $ 422 | 520,855 | 199,552 | (24,790) | 696,039 | |
Balance (in shares) at Oct. 31, 2019 | 42,169 | |||||
Balance at Apr. 30, 2020 | $ 426 | 529,662 | 168,975 | (65,082) | $ 633,981 | |
Balance (in shares) at Apr. 30, 2020 | 42,554 | 42,554 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 27,219 | $ 27,219 | ||||
Foreign currency translation adjustments | 16,281 | 16,281 | ||||
Change in other comprehensive income (loss), net of tax | 959 | 959 | ||||
Equity-based compensation | 1,575 | 1,575 | ||||
Exercise of stock options | 691 | 691 | ||||
Exercise of stock options (in shares) | 54 | |||||
Vesting of restricted stock units (in shares) | 7 | |||||
Tax withholding related to net share settlements of stock options/equity awards | (105) | (105) | ||||
Issuance of common stock pursuant to employee stock purchase plan | $ 1 | 1,269 | 1,270 | |||
Issuance of common stock pursuant to employee stock purchase plan (in shares) | 58 | |||||
Balance at Jul. 31, 2020 | $ 427 | 533,092 | 196,194 | (47,842) | 681,871 | |
Balance (in shares) at Jul. 31, 2020 | 42,673 | |||||
Balance at Apr. 30, 2020 | $ 426 | 529,662 | 168,975 | (65,082) | $ 633,981 | |
Balance (in shares) at Apr. 30, 2020 | 42,554 | 42,554 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | $ 55,688 | |||||
Foreign currency translation adjustments | 19,440 | |||||
Balance at Oct. 31, 2020 | $ 427 | 534,646 | 224,663 | (41,839) | $ 717,897 | |
Balance (in shares) at Oct. 31, 2020 | 42,690 | 42,690 | ||||
Balance at Jul. 31, 2020 | $ 427 | 533,092 | 196,194 | (47,842) | $ 681,871 | |
Balance (in shares) at Jul. 31, 2020 | 42,673 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 28,469 | 28,469 | ||||
Foreign currency translation adjustments | 3,159 | 3,159 | ||||
Change in other comprehensive income (loss), net of tax | 2,844 | 2,844 | ||||
Repurchase and retirement of common stock | $ (1) | (1,221) | (1,222) | |||
Repurchase and retirement of common stock (in shares) | (50) | |||||
Equity-based compensation | 3,253 | 3,253 | ||||
Exercise of stock options | 172 | 172 | ||||
Exercise of stock options (in shares) | 5 | |||||
Vesting of restricted stock units | $ 1 | (1) | ||||
Vesting of restricted stock units (in shares) | 62 | |||||
Tax withholding related to net share settlements of stock options/equity awards | (649) | (649) | ||||
Balance at Oct. 31, 2020 | $ 427 | $ 534,646 | $ 224,663 | $ (41,839) | $ 717,897 | |
Balance (in shares) at Oct. 31, 2020 | 42,690 | 42,690 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Oct. 31, 2020 | Oct. 31, 2019 | |
Cash flows from operating activities: | ||
Net income | $ 55,688 | $ 53,958 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 54,342 | 58,793 |
Write-off and amortization of debt discount and debt issuance costs | 1,505 | 2,368 |
Equity-based compensation | 6,370 | 5,591 |
Loss (gain) on disposal and impairment of assets | 875 | (742) |
Deferred income taxes | (9,296) | (2,380) |
Other items, net | (1,057) | 1,101 |
Changes in assets and liabilities net of effects of acquisitions: | ||
Trade accounts and notes receivable | (26,137) | (29,932) |
Inventories | (950) | 1,800 |
Prepaid expenses and other assets | (4,776) | 1,573 |
Accounts payable | (50,867) | (5,486) |
Accrued compensation and employee benefits | (23,889) | (12,974) |
Other accrued expenses and liabilities | 22,240 | (3,743) |
Cash provided by operating activities | 24,048 | 69,927 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (11,845) | (14,637) |
Proceeds from sale of assets | 720 | 1,056 |
Acquisition of businesses, net of cash acquired | (51) | (10,633) |
Cash used in investing activities | (11,176) | (24,214) |
Cash flows from financing activities: | ||
Repayments on revolving credit facilities | (102,189) | (558,906) |
Borrowings from revolving credit facilities | 14,750 | 562,698 |
Payments of principal on long-term debt | (4,984) | (54,984) |
Payments of principal on finance lease obligations | (14,629) | (12,310) |
Repurchases of common stock | (1,222) | |
Debt issuance costs | (1,286) | |
Proceeds from exercises of stock options | 863 | 6,761 |
Payments for taxes related to net share settlement of equity awards | (754) | |
Other financing activities | 1,270 | 1,022 |
Cash used in financing activities | (106,895) | (57,005) |
Effect of exchange rates on cash and cash equivalents | 1,282 | 223 |
Decrease in cash and cash equivalents | (92,741) | (11,069) |
Cash and cash equivalents, beginning of period | 210,909 | 47,338 |
Cash and cash equivalents, end of period | 118,168 | 36,269 |
Supplemental cash flow disclosures: | ||
Cash paid for income taxes | 20,224 | 25,642 |
Cash paid for interest | $ 25,726 | $ 33,654 |
Business, Basis of Presentation
Business, Basis of Presentation and Summary of Significant Accounting Policies | 6 Months Ended |
Oct. 31, 2020 | |
Business, Basis of Presentation and Summary of Significant Accounting Policies | |
Business, Basis of Presentation and Summary of Significant Accounting Policies | 1. Business, Basis of Presentation and Summary of Significant Accounting Policies Business Founded in 1971, GMS Inc. (“we,” “our,” “us,” or the “Company”), through its wholly-owned operating subsidiaries, is a distributor of specialty building products including wallboard, suspended ceilings systems, or ceilings, steel framing and other complementary building products. We purchase products from many manufacturers and then distribute these goods to a customer base consisting of wallboard and ceilings contractors and homebuilders and, to a lesser extent, general contractors and individuals. We operate a network of approximately 260 distribution centers across the United States and Canada. Basis of Presentation The condensed consolidated financial statements included in this Quarterly Report on Form 10-Q have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) that permit reduced disclosure for interim periods. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all normal and recurring adjustments necessary for a fair presentation of the results of operations, financial position and cash flows. All adjustments are of a normal recurring nature unless otherwise disclosed. The results of operations for interim periods are not necessarily indicative of results for any other interim period or the entire fiscal year. As a result, the unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended April 30, 2020. Principles of Consolidation The condensed consolidated financial statements present the results of operations, financial position, stockholders’ equity and cash flows of the Company and its subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation. The results of operations of businesses acquired are included from their respective dates of acquisition. Use of Estimates The preparation of financial statements in conformity with Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Foreign Currency Translation Assets and liabilities of the Company’s Canadian subsidiaries are translated at the exchange rate prevailing at the balance sheet date, while income and expenses are translated at average rates for the period. Translation gains and losses are reported as a separate component of stockholders’ equity and other comprehensive income. Gains and losses on foreign currency transactions are recognized in the Condensed Consolidated Statements of Operations and Comprehensive Income within other (expense) income, net. Insurance Liabilities The Company is self-insured for certain losses related to medical claims. The Company has stop-loss coverage to limit the exposure arising from medical claims. In addition, the Company has deductible-based insurance policies for certain losses related to general liability, workers’ compensation and automobile. The deductible amount per incident is $0.3 million, $0.5 million and $1.0 million for general liability, workers’ compensation and automobile, respectively. The coverage consists of a deductible layer, a primary layer, a self-insured buffer layer, a lead umbrella layer and excess layers. The primary layer of coverage is from $0.3 million, $0.5 million and $1.0 million for deductibles for general liability, workers’ compensation, and automobile liability, respectively, to $5.0 million. The Company self-insures a buffer layer from $5.0 million to $10.0 million. The umbrella and excess layers cover claims from $10.0 million to $100.0 million. The expected ultimate cost for claims incurred as of the balance sheet date is not discounted and is recognized as a liability. Insurance losses for claims filed and claims incurred but not reported are accrued based upon estimates of the aggregate liability for uninsured claims using loss development factors and actuarial assumptions followed in the insurance industry and historical loss development experience. As of October 31, 2020 and April 30, 2020, the aggregate liabilities for medical self-insurance were $4.2 million and $3.8 million, respectively, and are included in other accrued expenses and current liabilities in the Condensed Consolidated Balance Sheets. As of October 31, 2020 and April 30, 2020, reserves for general liability, automobile and workers’ compensation totaled approximately $20.1 million and $19.4 million, respectively, and are included in other accrued expenses and current liabilities and other liabilities in the Condensed Consolidated Balance Sheets. As of October 31, 2020 and April 30, 2020, expected recoveries for medical self-insurance, general liability, automobile and workers’ compensation totaled approximately $8.0 million and $6.0 million, respectively, and are included in prepaid expenses and other current assets and other assets in the Condensed Consolidated Balance Sheets. Income Taxes The Company considers each interim period an integral part of the annual period and measures tax expense (benefit) using an estimated annual effective income tax rate. Estimates of the annual effective income tax rate at the end of interim periods are, out of necessity, based on evaluation of possible future events and transactions and may be subject to subsequent refinement or revision. The Company forecasts its estimated annual effective income tax rate and then applies that rate to its year-to-date pre-tax ordinary income (loss), subject to certain loss limitation provisions. In addition, certain specific transactions are excluded from the Company’s estimated annual effective tax rate computation, but are discretely recognized within income tax expense (benefit) in their respective interim period. Future changes in the forecasted annual income (loss) projections, tax rate changes, or discrete tax items could result in significant adjustments to quarterly income tax expense (benefit) in future periods. The Company evaluates its deferred tax assets quarterly to determine if valuation allowances are required. In this evaluation, 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 primary negative evidence considered includes the cumulative operating losses generated in prior periods. The primary positive evidence considered includes the reversal of deferred tax liabilities primarily related to depreciation and amortization that would occur within the same jurisdiction and during the carryforward period necessary to absorb the federal and state net operating losses and other deferred tax assets. Deferred tax assets and liabilities are computed by applying the federal, provincial and state income tax rates in effect to the gross amounts of temporary differences and other tax attributes, such as net operating loss carry-forwards. In assessing if the deferred tax assets will be realized, the Company considers whether it is more likely than not that some or all of these deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which these deductible temporary differences reverse. Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Authoritative guidance for fair value measurements establishes a three-level hierarchy that prioritizes the inputs to valuation models based upon the degree to which they are observable. The three levels of the fair value measurement hierarchy are as follows: Level 1 Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date. Level 2 Inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 Inputs are unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions. The carrying values of the Company’s cash, cash equivalents, trade receivables and trade payables approximate their fair values because of their short-term nature. Based on borrowing rates available to the Company for loans with similar terms, the carrying values of the Company’s debt instruments approximate fair value. See Note 11, “Fair Value Measurements,” for additional information with respect to the Company’s fair value measurements. Earnings Per Share Basic earnings per share is computed by dividing net income available to common stockholders by the weighted average number of outstanding shares of common stock for the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock, including stock options and restricted stock units (collectively “Common Stock Equivalents”), were exercised or converted into common stock. The dilutive effect of outstanding stock options and restricted stock units is reflected in diluted earnings per share by application of the treasury stock method. In applying the treasury stock method for stock-based compensation arrangements, the assumed proceeds are computed as the sum of the amount the employee must pay upon exercise and the amount of compensation cost attributed to future services and not yet recognized. Diluted earnings per share is computed by increasing the weighted-average number of outstanding shares of common stock computed in basic earnings per share to include the dilutive effect of Common Stock Equivalents for the period. In periods of net loss, the number of shares used to calculate diluted loss per share is the same as basic net loss per share. The holders of the Company’s Exchangeable Shares (as defined in Note 8, “Stockholders’ Equity”) were entitled to receive dividends or distributions that are equal to any dividends or distributions on the Company’s common stock. As a result, when the Exchangeable Shares were outstanding, they were classified as a participating security and thereby required the allocation of income that would have otherwise been available to common stockholders when calculating earnings per share. Diluted earnings per share was calculated by utilizing the most dilutive result of the if-converted and two-class methods. In both methods, net income attributable to common stockholders and the weighted-average common shares outstanding are adjusted to account for the impact of the assumed issuance of potential common shares that are dilutive, subject to dilution sequencing rules. Reclassifications Certain amounts in the prior period financial statements have been reclassified to conform to the current year presentation. Recently Adopted Accounting Pronouncements Credit Losses – 2020 with no material impact to its financial statements. See Note 3, “Accounts Receivable,” for additional information with respect to the Company’s allowance for expected credit losses. Fair Value Measurement Disclosures – Recently Issued Accounting Pronouncements Reference Rate Reform |
Revenue
Revenue | 6 Months Ended |
Oct. 31, 2020 | |
Revenue | |
Revenue | 2. Revenue Revenue Recognition Revenue is recognized upon transfer of control of promised goods to customers at an amount that reflects the consideration the Company expects to receive in exchange for those goods. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities. The Company includes shipping and handling costs billed to customers in net sales. These costs are recognized as a component of selling, general and administrative expenses. See Note 14, “Segments,” for information regarding disaggregation of revenue, including revenue by product and by geographic area. Performance Obligations The Company satisfies its performance obligations at a point in time, which is upon delivery of products. The Company’s payment terms vary by the type and location of its customers. The amount of time between point of sale and when payment is due is not significant and the Company has determined its contracts do not include a significant financing component. The Company’s contracts with customers involve performance obligations that are one year or less. Therefore, the Company applied the standard’s optional exemption that permits the omission of information about its unfulfilled performance obligations as of the balance sheet dates. Significant Judgments The Company’s contracts may include terms that could cause variability in the transaction price, including customer rebates, returns and cash discounts for early payment. Variable consideration is estimated and included in the transaction price based on the expected value method. These estimates are based on historical experience, anticipated performance and other factors known at the time. The Company only includes estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Contract Balances Receivables from contracts with customers, net of allowances, were $418.3 million and $393.6 million as of October 31, 2020 and April 30, 2020, respectively. The Company did not have material amounts of contract assets or liabilities as of October 31, 2020 or April 30, 2020. |
Accounts Receivable
Accounts Receivable | 6 Months Ended |
Oct. 31, 2020 | |
Accounts Receivable | |
Accounts Receivable | 3. Accounts Receivable The Company’s trade accounts and notes receivable consisted of the following: October 31, April 30, 2020 2020 (in thousands) Trade receivables $ 423,603 $ 398,739 Other receivables 16,506 11,656 Allowance for expected credit losses (2,490) (2,861) Other allowances (2,783) (2,280) Trade accounts and notes receivable $ 434,836 $ 405,254 The Company records accounts and notes receivable net of allowances, including the allowance for expected credit losses. The Company maintains an allowance for estimated losses due to the failure of customers to make required payments, as well as allowances for cash discounts. The Company’s estimate of the allowance for expected credit losses is based on an assessment of individual past due accounts, historical loss information, accounts receivable aging and current economic factors and the Company’s expectation of future economic conditions. Account balances are written off when the potential for recovery is considered remote. The Company routinely assesses the financial strength of its customers and generally does not require collateral. Concentrations of credit risk with respect to trade accounts receivable are limited due to the large number of geographically diverse customers comprising the Company’s customer base. The following table presents the change in the allowance for expected credit losses during the six months ended October 31, 2020: (in thousands) Balance as of April 30, 2020 $ 2,861 Provision (40) Recoveries (250) Write-offs (81) Balance as of October 31, 2020 $ 2,490 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Oct. 31, 2020 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | 4. Goodwill and Intangible Assets Goodwill The following table presents changes in the carrying amount of goodwill during the six months ended October 31, 2020: Carrying Amount (in thousands) Balance as of April 30, 2020 Goodwill $ 616,147 Accumulated impairment loss (63,074) 553,073 Working capital settlements (159) Translation adjustment 4,572 Balance as of October 31, 2020 Goodwill 620,560 Accumulated impairment loss (63,074) $ 557,486 Intangible Assets The following tables present the components of the Company’s definite-lived intangible assets: Estimated Weighted October 31, 2020 Useful Average Gross Net Lives Amortization Carrying Accumulated Carrying (years) Period Amount Amortization Value (dollars in thousands) Customer relationships 5 - 16 12.8 $ 526,916 $ 298,246 $ 228,670 Definite-lived tradenames 5 - 20 16.3 56,907 12,448 44,459 Vendor agreements 8 - 10 8.3 6,644 4,970 1,674 Developed technology 5 4.9 5,253 2,582 2,671 Other 3 - 5 3.3 4,272 3,195 1,077 Totals $ 599,992 $ 321,441 $ 278,551 Estimated Weighted April 30, 2020 Useful Average Gross Net Lives Amortization Carrying Accumulated Carrying (years) Period Amount Amortization Value (dollars in thousands) Customer relationships 5 - 16 12.8 $ 516,928 $ 270,029 $ 246,899 Definite-lived tradenames 5 - 20 16.3 55,654 10,474 45,180 Vendor agreements 8 - 10 8.3 6,644 4,567 2,077 Developed technology 5 4.9 5,036 1,963 3,073 Other 1 - 15 5.3 7,836 4,548 3,288 Totals $ 592,098 $ 291,581 $ 300,517 Definite-lived intangible assets are amortized over their estimated useful lives. The Company amortizes its customer relationships using an accelerated method to match the estimated cash flows generated by such assets, and amortizes its other definite-lived intangibles using the straight-line method because a pattern to which the expected benefits will be consumed or otherwise used up cannot be reliably determined. Amortization expense related to definite-lived intangible assets was $14.5 million and $16.9 million for the three months ended October 31, 2020 and 2019, respectively, and $28.8 million and $33.8 million for the six months ended October 31, 2020 and 2019, respectively. Amortization expense is recorded in depreciation and amortization expense in the Condensed Consolidated Statements of Operations and Comprehensive Income. The following table summarizes the estimated future amortization expense for definite-lived intangible assets. Actual amortization expense to be reported in future periods could differ materially from these estimates as a result of acquisitions, changes in useful lives, foreign currency exchange rate fluctuations and other relevant factors. Year Ending April 30, (in thousands) 2021 (remaining six months) $ 26,862 2022 46,613 2023 38,834 2024 31,731 2025 26,223 Thereafter 108,288 Total $ 278,551 The Company’s indefinite-lived intangible assets consist of tradenames that had a carrying amount of $61.4 million as of October 31, 2020 and April 30, 2020. |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Oct. 31, 2020 | |
Long-Term Debt | |
Long-Term Debt | 5. Long-Term Debt The Company’s long-term debt consisted of the following: October 31, April 30, 2020 2020 (in thousands) Term Loan Facility $ 871,919 $ 876,903 Unamortized discount and deferred financing costs on Term Loan Facility (9,540) (10,602) ABL Facility — 80,000 Finance lease obligations 122,058 128,767 Installment notes at fixed rates up to 5.0%, due in monthly and annual installments through 2024 12,506 16,316 Unamortized discount on installment notes (920) (1,098) Canadian Facility — 7,194 Carrying value of debt 996,023 1,097,480 Less current portion 49,302 50,201 Long-term debt $ 946,721 $ 1,047,279 Term Loan Facility The Company has a senior secured first lien term loan facility (the “ ” Asset Based Lending Facility The Company has an asset based revolving credit facility (the “ABL Facility”) that provides for aggregate revolving commitments of $445.0 million (including same day swing line borrowings of $44.5 million). Extensions of credit under the ABL Facility are limited by a borrowing base calculated periodically based on specified percentages of the value of eligible inventory and eligible accounts receivable, subject to certain reserves and other adjustments. At the Company’s option, the interest rates applicable to the loans under the ABL Facility are based on LIBOR or base rate plus, in each case, an applicable margin. The margins applicable for each elected interest rate are subject to a pricing grid, as defined in the ABL Facility agreement, based on average daily availability for the most recent fiscal quarter. The ABL Facility also contains an unused commitment fee. As of October 31, 2020, the Company had available borrowing capacity of approximately $392.9 million under the ABL Facility. The ABL Facility matures on September 30, 2024 unless the individual affected lenders agree to extend the maturity of their respective loans under the ABL Facility upon the Company’s request and without the consent of any other lender. The ABL Facility contains a cross default provision with the Term Loan Facility. Covenants under the Term Loan Facility and ABL Facility The Term Loan Facility contains a number of covenants that limit our ability and the ability of our restricted subsidiaries, as described in the respective credit agreement, to: incur more indebtedness; pay dividends, redeem or repurchase stock or make other distributions; make investments; create restrictions on the ability of our restricted subsidiaries to pay dividends to us or make other intercompany transfers; create liens securing indebtedness; transfer or sell assets; merge or consolidate; enter into certain transactions with our affiliates; and prepay or amend the terms of certain indebtedness. The Company was in compliance with all restrictive covenants as of October 31, 2020. The ABL Facility contains certain affirmative covenants, including financial and other reporting requirements. The Company was in compliance with all such covenants as of October 31, 2020. Canadian Revolving Credit Facility Through its WSB Titan (“Titan”) subsidiary, the Company has a revolving credit facility (the “Canadian Facility”) that provides for aggregate revolving commitments of $22.5 million ($30.0 million Canadian dollars). The Canadian Facility bears interest at the Canadian prime rate plus a marginal rate based on the level determined by Titan ’ Debt Maturities As of October 31, 2020, the maturities of long-term debt were as follows Term Loan Finance Installment Facility Leases Notes Total Year ending April 30, (in thousands) 2021 (remaining six months) $ 4,984 $ 17,878 $ 964 $ 23,826 2022 9,968 34,324 4,458 48,750 2023 9,968 29,049 4,424 43,441 2024 9,968 22,039 1,800 33,807 2025 9,968 12,110 860 22,938 Thereafter 827,063 6,658 — 833,721 $ 871,919 $ 122,058 $ 12,506 $ 1,006,483 |
Leases
Leases | 6 Months Ended |
Oct. 31, 2020 | |
Leases | |
Leases | 6. Leases The Company leases office and warehouse facilities, distribution equipment and its fleet of vehicles. The Company’s leases have lease terms ranging from one one Any payment deemed probable is included in the Company’s lease liability. The Company’s lease agreements do not contain any material restrictive covenants. The Company determines if an arrangement is a lease at inception and evaluates whether the lease meets the classification criteria of a finance or operating lease. Operating leases are included in operating lease right-of-use assets, current portion of operating lease liabilities and long-term operating lease liabilities in the Condensed Consolidated Balance Sheets. Finance leases are included in property and equipment, current portion of long-term debt and long-term debt in the Condensed Consolidated Balance Sheets. Lease ROU assets and lease liabilities are recognized at the commencement date based on the present value of the future lease payments over the lease term. For leases that do not provide an implicit rate, the Company uses its incremental borrowing rate in determining the present value of future payments. The Company determines its incremental borrowing rate based on the applicable lease terms and the current economic environment. Lease ROU assets also include any lease payments made in advance and excludes lease incentives and initial direct costs incurred. Some of the Company’s lease agreements contain rent escalation clauses (including index-based escalations), rent holidays, capital improvements funding or other lease concessions. Lease expense is recognized on a straight-line basis based on the fixed component over the lease term. Variable lease costs consist primarily of taxes, insurance and common area or other maintenance costs for leased facilities and vehicles and equipment, which are expensed as incurred. The components of lease expense were as follows: Three Months Ended Six Months Ended October 31, October 31, 2020 2019 2020 2019 (in thousands) Finance lease cost: Amortization of right-of-use assets $ 5,960 $ 6,054 $ 12,099 $ 12,113 Interest on lease liabilities 2,863 3,367 5,925 6,789 Operating lease cost 10,630 10,289 21,329 20,709 Variable lease cost 3,157 3,414 6,132 6,613 Total lease cost $ 22,610 $ 23,124 $ 45,485 $ 46,224 Operating lease cost, including variable lease cost, is included in selling, general and administrative expenses; amortization of finance ROU assets is included in depreciation and amortization; and interest on finance lease liabilities is included in interest expense in the Condensed Consolidated Statements of Operations and Comprehensive Income. Supplemental cash flow information related to leases was as follows: Six Months Ended October 31, 2020 2019 (in thousands) Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 21,479 $ 20,377 Operating cash flows from finance leases 5,925 6,789 Financing cash flows from finance leases 14,629 12,310 Right-of-use assets obtained in exchange for lease obligations Operating leases 17,216 12,810 Finance leases 12,342 22,812 Other information related to leases was as follows: October 31, April 30, 2020 2020 (in thousands) Finance leases included in property and equipment Property and equipment $ 170,868 $ 171,380 Accumulated depreciation (47,342) (41,737) Property and equipment, net $ 123,526 $ 129,643 Weighted-average remaining lease term (years) Operating leases 5.0 4.9 Finance leases 3.5 3.6 Weighted-average discount rate Operating leases 5.5 % 5.5 % Finance leases 4.9 % 5.0 % Future minimum lease payments under non-cancellable leases as of October 31, 2020 were as follows: Finance Operating Year Ending April 30, (in thousands) 2021 (remaining six months) $ 25,683 $ 19,870 2022 41,454 33,301 2023 32,727 26,613 2024 23,445 21,766 2025 12,541 15,068 Thereafter 6,746 21,474 Total lease payments 142,596 138,092 Less imputed interest 20,538 18,276 Total $ 122,058 $ 119,816 |
Income Taxes
Income Taxes | 6 Months Ended |
Oct. 31, 2020 | |
Income Taxes | |
Income Taxes | 7. Income Taxes General. Valuation allowance Uncertain tax positions |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Oct. 31, 2020 | |
Stockholders' Equity | |
Stockholders' Equity | 8. Stockholders’ Equity Exchangeable Shares In connection with the acquisition of Titan on June 1, 2018, the Company issued 1.1 million shares of equity that were exchangeable for the Company’s common stock on a one-for-one basis (“Exchangeable Shares”). The Exchangeable Shares were issued by an indirect wholly-owned subsidiary of the Company. The Exchangeable Shares ranked senior to the Company’s common stock with respect to dividend rights and rights on liquidation, dissolution and winding-up. The holders of the Exchangeable Shares were entitled to receive dividends or distributions that were equal to any dividends or distributions on the Company’s common stock. The holders of the Exchangeable Shares did not have voting rights. The Exchangeable Shares contained rights that allowed the holders to exchange their Exchangeable Shares for GMS common stock at any time on a one-for-one basis. On June 13, 2019, the holders of the Exchangeable Shares exchanged all of the Exchangeable Shares for 1.1 million shares of the Company’s common stock. Following such exchange, the Exchangeable Shares ceased to be outstanding. Share Repurchase Program The Company has a common stock repurchase program authorized by its Board of Directors to repurchase up to $75.0 million of outstanding common stock. The Company may conduct repurchases under the share repurchase program through open market transactions, under trading plans in accordance with SEC Rule 10b5-1 and/or in privately negotiated transactions, in compliance with Rule 10b-18 under the Exchange Act of 1934, as amended. These repurchases are subject to a variety of factors, including, but not limited to, our liquidity, credit availability, general business and market conditions, our debt covenant restrictions and the availability of alternative investment opportunities. The share repurchase program does not obligate us to acquire any particular amount of common stock, and it may be suspended or terminated at any time at the Company’s discretion. The Company repurchased approximately 50 thousand shares of its common stock for $1.2 million during the six months ended October 31, 2020. The Company did not repurchase any shares of its common stock during the six months ended October 31, 2019. As of October 31, 2020, the Company had $57.3 million remaining repurchase authorization. Accumulated Other Comprehensive Loss The following table sets forth the changes to accumulated other comprehensive loss, net of tax, by component for the six months ended October 31, 2020: Accumulated Foreign Derivative Other Currency Financial Comprehensive Translation Instruments Loss (in thousands) Balance as of April 30, 2020 $ (40,577) $ (24,505) $ (65,082) Other comprehensive income (loss) before reclassification 19,440 (530) 18,910 Reclassification to earnings from accumulated other comprehensive loss — 4,333 4,333 Balance as of October 31, 2020 $ (21,137) $ (20,702) $ (41,839) Other comprehensive loss on derivative instruments for the six months ended October 31, 2020 is net of $0.2 million of tax and reclassification to earnings from accumulated other comprehensive loss is net of $1.4 million of tax. |
Equity-Based Compensation
Equity-Based Compensation | 6 Months Ended |
Oct. 31, 2020 | |
Equity-Based Compensation | |
Equity-Based Compensation | 9. Equity-Based Compensation General The Company measures compensation cost for all share-based awards at fair value on the grant date (or measurement date if different) and recognizes compensation expense, net of estimated forfeitures, over the requisite service period for awards expected to vest. The Company estimates the fair value of stock options using the Black-Scholes valuation model, and determines the fair value of restricted stock units based on the quoted price of GMS ’ . Equity-based compensation expense related to stock options and restricted stock units was $4.6 million and $3.4 million during the six months ended October 31, 2020 and 2019, respectively, and is included in selling, general and administrative expenses in the Condensed Consolidated Statements of Operations and Comprehensive Income. Stock Option Awards The following table presents stock option activity for the six months ended October 31, 2020: Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Options Price Life (years) Value (shares and dollars in thousands) Outstanding as of April 30, 2020 1,487 $ 18.85 6.4 $ 3,895 Options granted 321 23.43 Options exercised (43) 14.55 Options forfeited (48) 25.98 Outstanding as of October 31, 2020 1,717 $ 19.62 6.4 $ 6,958 Exercisable as of October 31, 2020 1,082 $ 17.45 4.8 $ 6,585 Vested and expected to vest as of October 31, 2020 1,709 $ 19.60 6.4 $ 6,957 The aggregate intrinsic value represents the excess of the Company’s closing stock price on the last trading day of the period over the weighted average exercise price multiplied by the number of options outstanding, exercisable or expected to vest. Options expected to vest are unvested shares net of expected forfeitures. The total intrinsic value of options exercised during the six months ended October The fair value of stock options granted during the six months ended October 31, 2020 and 2019 estimated using the Black-Scholes option-pricing model with the following assumptions: Six Months Ended October 31, 2020 2019 Volatility 51.28 % 49.94 % Expected life (years) 6.0 6.0 Risk-free interest rate 0.30 % 1.97 % Dividend yield — % — % The weighted average grant date fair value of options granted during the $11.13 per share and $10.55 per share, respectively. Restricted Stock Units The following table presents restricted stock unit activity for the six months ended October 31, 2020: Weighted Number of Average Restricted Grant Date Stock Units Fair Value (shares in thousands) Outstanding as of April 30, 2020 286 $ 22.71 Granted 212 23.43 Vested (103) 22.43 Forfeited (28) 23.91 Outstanding as of October 31, 2020 367 $ 23.12 As of October 31, 2020, there was $6.2 million of total unrecognized compensation cost related to nonvested restricted stock units. That cost is expected to be recognized over a weighted-average period of 2.0 years. Employee Stock Purchase Plan The Company has an employee stock purchase plan (“ESPP”), the terms of which allow for qualified employees to participate in the purchase of shares of the Company’s common stock at a price equal to 90% of the lower of the closing price at the beginning or end of the purchase period, which is a six-month period ending on December 31 and June 30 of each year. During the six months ended October 31, 2020, 0.1 million shares of the Company’s common stock were purchased under the ESPP at a price of $22.13 per share. The Company recognized $0.3 million and $0.3 million of stock-based compensation expense during the six months ended October 31, 2020 and 2019, respectively, related to the ESPP. |
Stock Appreciation Rights, Defe
Stock Appreciation Rights, Deferred Compensation and Redeemable Noncontrolling Interests | 6 Months Ended |
Oct. 31, 2020 | |
Stock Appreciation Rights, Deferred Compensation and Redeemable Noncontrolling Interests | |
Stock Appreciation Rights, Deferred Compensation and Redeemable Noncontrolling Interests | 10. Stock Appreciation Rights, Deferred Compensation and Redeemable Noncontrolling Interests The following table presents a summary of changes to the liabilities for stock appreciation rights, deferred compensation and redeemable noncontrolling interests for the six months ended October 31, 2020: Stock Redeemable Appreciation Deferred Noncontrolling Rights Compensation Interests (in thousands) Balance as of April 30, 2020 $ 24,205 $ 1,660 $ 8,300 Amounts redeemed (181) — — Change in fair value 1,106 73 365 Balance as of October 31, 2020 $ 25,130 $ 1,733 $ 8,665 Classified as current as of April 30, 2020 $ 624 $ — $ — Classified as long-term as of April 30, 2020 23,581 1,660 8,300 Classified as current as of October 31, 2020 $ 650 $ — $ — Classified as long-term as of October 31, 2020 24,480 1,733 8,665 Total expense related to these instruments was $1.5 million and $2.0 million during the six months ended October 31, 2020 and 2019, respectively, and was included in selling, general and administrative expenses in the Condensed Consolidated Statements of Operations and Comprehensive Income. Current and long-term liabilities for stock appreciation rights, deferred compensation and redeemable noncontrolling interests are included in other accrued expenses and liabilities and other liabilities, respectively, in the Condensed Consolidated Balance Sheets. Stock Appreciation Rights Certain subsidiaries have granted stock appreciation rights to certain employees under which payments are dependent on the appreciation in the book value per share, adjusted for certain provisions, of the applicable subsidiary. Settlements of the awards can be made in a combination of cash or installment notes, generally paid over five years, upon a triggering event. As of October 31, 2020, all stock appreciation rights were vested. Liabilities related to these agreements are classified as share-based liability awards and are measured at fair value. Deferred Compensation Subsidiaries’ stockholders have entered into other deferred compensation agreements that granted the stockholders a payment based on a percentage in excess of book value, adjusted for certain provisions, upon an occurrence as defined in the related agreements. These instruments are redeemed in cash or installment notes, generally paid in annual installments over the five years following termination of employment. Liabilities related to these agreements are classified as share-based liability awards and are measured at fair value. Redeemable Noncontrolling Interests Noncontrolling interests were issued to certain employees of certain of the Company’s subsidiaries. All of the noncontrolling interest awards are subject to mandatory redemption on termination of employment for any reason. These instruments are redeemed in cash or installment notes, generally paid in annual installments over the five years following termination of employment. Liabilities related to these agreements are classified as share-based liability awards and are measured at fair value. Under the terms of the employee agreements, the redemption value is determined based on the book value of the subsidiary, as adjusted for certain items. Upon the termination of employment or other triggering events including death or disability of the noncontrolling stockholders in the Company’s subsidiaries, we are obligated to purchase, or redeem, the noncontrolling interests at either an agreed upon price or a formula value provided in the stockholder agreements. This formula value is typically based on the book value per share of the subsidiary’s equity, including certain adjustments. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Oct. 31, 2020 | |
Fair Value Measurements | |
Fair Value Measurements | 11. Fair Value Measurements Assets and Liabilities Measured at Fair Value on a Recurring Basis The following table presents the estimated carrying amount and fair value of the Company’s liabilities measured at fair value on a recurring basis: October 31, April 30, 2020 2020 (in thousands) Interest rate swaps (Level 2) $ 27,180 $ 32,218 Stock appreciation rights (Level 3) 25,130 24,205 Deferred compensation (Level 3) 1,733 1,660 Noncontrolling interest holders (Level 3) 8,665 8,300 Derivative instruments convert the variable interest rate on its Term Loan Facility to a fixed interest rate . The contracts were effective on and terminate on The fair value of derivative instruments is determined using Level 2 inputs. Generally, the Company obtains the Level 2 inputs from its counterparties. Substantially all of the inputs throughout the full term of the instruments can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. The fair value of the Company’s interest rate swap was determined using widely accepted valuation techniques including a discounted cash flow analysis on the expected cash flows of the derivative. This analysis reflected the contractual terms of the derivatives, including the period to maturity, and used observable market-based inputs, including interest rate curves and implied volatilities. Stock appreciation rights, deferred compensation and redeemable noncontrolling interests Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Disclosures are required for certain assets and liabilities that are measured at fair value on a nonrecurring basis in periods subsequent to initial recognition. Such measurements of fair value relate primarily to assets and liabilities measured at fair value in connection with business combinations and long-lived asset impairments. The Company recorded a $1.0 million impairment of operating lease right-of-use assets during the six months ended October 31, 2020. There were no other material long-lived asset impairments during the six months ended October 31, 2020 or 2019. |
Transactions With Related Parti
Transactions With Related Parties | 6 Months Ended |
Oct. 31, 2020 | |
Transactions With Related Parties | |
Transactions With Related Parties | 12. Transactions With Related Parties The Company purchases inventories from Southern Wall Products, Inc. (“SWP”) on a continuing basis. During the six months ended October 31, 2020 and 2019, certain former executive officers and stockholders and certain directors and stockholders of the Company were stockholders of SWP. As of October 31, 2020, these executive officers and directors were no longer with the Company. The Company purchased inventory from SWP for distribution in the amount of $3.8 million and $3.7 million during the three months ended October 31, 2020 and 2019, respectively, and $7.3 million and $7.3 million during the six months ended October 31, 2020 and 2019, respectively. Amounts due to SWP for purchases of inventory for distribution was $1.2 million as of April 30, 2020 and is included in accounts payable in the Condensed Consolidated Balance Sheets. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Oct. 31, 2020 | |
Commitments and Contingencies | |
Commitments and Contingencies | 13. Commitments and Contingencies The Company is a defendant in various lawsuits and administrative actions associated with personal injuries, claims of former employees and other events arising in the normal course of business. As discussed in Note 1 “—Insurance Liabilities”, the Company records liabilities for these claims, and assets for amounts recoverable from the insurer, for claims covered by insurance. |
Segments
Segments | 6 Months Ended |
Oct. 31, 2020 | |
Segments | |
Segments | 14. Segments General The Company has eight operating segments based on geographic operations that it aggregates into one reportable segment. The Company defines operating segments as components of the organization for which discrete financial information is available and operating results are evaluated on a regular basis by the Chief Operating Decision Maker (“CODM”) in order to assess performance and allocate resources. The Company’s CODM is its Chief Executive Officer. The Company determined it has eight operating segments based on the Company’s eight geographic divisions, which are Central, Midwest, Northeast, Southern, Southeast, Southwest, Western and Canada. During the six months ended October 31, 2020, the Company divided its Southern operating segment into two operating segments, Southern and Southwest, which resulted in an increase (from seven to eight) in the number of operating segments. The Company performed a goodwill impairment test immediately before and after the change in operating segments, which indicated the fair values of the Company’s reporting units exceeded their carrying values. The Company aggregates its operating segments into a single reportable segment based on similarities between the operating segments’ economic characteristics, nature of products sold, production process, type of customer and methods of distribution. The accounting policies of the operating segments are the same as those described in the summary of significant policies. In addition to the Company’s reportable segment, the Company’s consolidated results include both corporate activities and certain other activities. Corporate includes the Company’s corporate office building and support services provided to its subsidiaries. Other includes Tool Source Warehouse, Inc., which functions primarily as an internal distributor of tools. Segment Results The CODM assesses the Company’s performance based on the periodic review of net sales, Adjusted EBITDA and certain other measures for each of the operating segments. Adjusted EBITDA is not a recognized financial measure under GAAP. However, we believe it assists investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. Management believes Adjusted EBITDA is helpful in highlighting trends in our operating results, while other measures can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which companies operate and capital investments. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations -- Non-GAAP Financial Measures” for a further discussion of this non-GAAP measure. The following tables present segment results: Three Months Ended October 31, 2020 Depreciation and Adjusted Net Sales Gross Profit Amortization EBITDA (in thousands) Geographic divisions $ 805,074 $ 262,534 $ 26,783 $ 82,169 Other 7,782 2,537 91 353 Corporate — — 371 — $ 812,856 $ 265,071 $ 27,245 $ 82,522 Three Months Ended October 31, 2019 Depreciation and Adjusted Net Sales Gross Profit Amortization EBITDA (in thousands) Geographic divisions $ 854,853 $ 281,900 $ 29,024 $ 89,171 Other 7,076 2,593 55 734 Corporate — — 439 — $ 861,929 $ 284,493 $ 29,518 $ 89,905 Six Months Ended October 31, 2020 Depreciation and Adjusted Net Sales Gross Profit Amortization EBITDA (in thousands) Geographic divisions $ 1,599,546 $ 520,372 $ 53,565 $ 164,673 Other 15,883 5,157 182 903 Corporate — — 595 — $ 1,615,429 $ 525,529 $ 54,342 $ 165,576 Six Months Ended October 31, 2019 Depreciation and Adjusted Net Sales Gross Profit Amortization EBITDA (in thousands) Geographic divisions $ 1,695,010 $ 553,254 $ 57,956 $ 172,254 Other 14,095 4,893 108 1,239 Corporate — — 729 — $ 1,709,105 $ 558,147 $ 58,793 $ 173,493 The following table presents a reconciliation of Adjusted EBITDA to net income: Three Months Ended Six Months Ended October 31, October 31, 2020 2019 2020 2019 (in thousands) Net income $ 28,469 $ 29,138 $ 55,688 $ 53,958 Interest expense 13,525 17,559 27,606 35,836 Write-off of debt discount and deferred financing fees 707 — 707 Interest income (14) (6) (51) (18) Provision for income taxes 8,277 7,927 17,881 15,517 Depreciation expense 12,710 12,592 25,537 25,014 Amortization expense 14,535 16,926 28,805 33,779 Stock appreciation expense(a) 314 1,267 1,106 1,327 Redeemable noncontrolling interests(b) 186 (18) 438 644 Equity-based compensation(c) 3,252 2,315 4,857 3,710 Severance and other permitted costs(d) 762 1,394 2,709 1,948 Transaction costs (acquisitions and other)(e) 25 327 125 1,299 Loss (gain) on disposal and impairment of assets(f) 481 (586) 875 (742) Effects of fair value adjustments to inventory(g) — — — 151 Secondary public offering costs(h) — 363 — 363 Adjusted EBITDA $ 82,522 $ 89,905 $ 165,576 $ 173,493 (a) Represents non-cash expense related to stock appreciation rights agreements. (b) Represents non-cash compensation expense related to changes in the fair values of noncontrolling interests . (c) Represents non-cash equity-based compensation expense related to the issuance of share-based awards. (d) Represents severance expenses and other costs permitted in the calculation of Adjusted EBITDA under the ABL Facility and the Term Loan Facility, including certain unusual, nonrecurring costs due to the COVID-19 pandemic. (e) Represents costs related to acquisitions paid to third parties. (f) Includes impairment of assets resulting from restructuring plans to close certain facilities and gains from the sale of assets. (g) Represents the non-cash cost of sales impact of acquisition accounting adjustments to increase inventory to its estimated fair value. (h) Represents costs paid to third-party advisors related to secondary offerings of our common stock. Revenues by Product The following table presents the Company’s net sales to external customers by main product lines: Three Months Ended Six Months Ended October 31, October 31, 2020 2019 2020 2019 (in thousands) Wallboard $ 330,515 $ 350,618 $ 658,512 $ 692,213 Ceilings 111,293 122,807 224,995 251,917 Steel framing 111,293 136,159 221,780 267,988 Other products 259,755 252,345 510,142 496,987 Total net sales $ 812,856 $ 861,929 $ 1,615,429 $ 1,709,105 Geographic Information The following table presents the Company’s net sales by major geographic area: Three Months Ended Six Months Ended October 31, October 31, 2020 2019 2020 2019 (in thousands) United States $ 684,131 $ 744,134 $ 1,363,452 $ 1,475,477 Canada 128,725 117,795 251,977 233,628 Total net sales $ 812,856 $ 861,929 $ 1,615,429 1,709,105 The following table presents the Company’s property and equipment, net, by major geographic area: October 31, April 30, 2020 2020 (in thousands) United States $ 265,941 $ 270,855 Canada 34,203 34,612 Total property and equipment, net $ 300,144 $ 305,467 |
Earnings Per Common Share
Earnings Per Common Share | 6 Months Ended |
Oct. 31, 2020 | |
Earnings Per Common Share | |
Earnings Per Common Share | 15. Earnings Per Common Share The following table sets forth the computation of basic and diluted earnings per share of common stock: Three Months Ended Six Months Ended October 31, October 31, 2020 2019 2020 2019 (in thousands, except per share data) Net income $ 28,469 $ 29,138 $ 55,688 $ 53,958 Less: Net income allocated to participating securities — — — 342 Net income attributable to common stockholders $ 28,469 $ 29,138 $ 55,688 $ 53,616 Basic earnings per common share: Basic weighted average common shares outstanding 42,723 41,761 42,674 41,382 Basic earnings per common share $ 0.67 $ 0.70 $ 1.30 $ 1.30 Diluted earnings per common share: Basic weighted average common shares outstanding 42,723 41,761 42,674 41,382 Add: Common Stock Equivalents 451 874 422 744 Diluted weighted average common shares outstanding 43,174 42,635 43,096 42,126 Diluted earnings per common share $ 0.66 $ 0.68 $ 1.29 $ 1.27 During the three and six months ended October 31, 2020, approximately 0.5 million and 0.4 million, respectively, Common Stock Equivalents were excluded from the calculation of diluted earnings per share because their effect would have been anti-dilutive. Anti-dilutive securities could be dilutive in future periods. |
Business, Basis of Presentati_2
Business, Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Oct. 31, 2020 | |
Business, Basis of Presentation and Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The condensed consolidated financial statements included in this Quarterly Report on Form 10-Q have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) that permit reduced disclosure for interim periods. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all normal and recurring adjustments necessary for a fair presentation of the results of operations, financial position and cash flows. All adjustments are of a normal recurring nature unless otherwise disclosed. The results of operations for interim periods are not necessarily indicative of results for any other interim period or the entire fiscal year. As a result, the unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended April 30, 2020. |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements present the results of operations, financial position, stockholders’ equity and cash flows of the Company and its subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation. The results of operations of businesses acquired are included from their respective dates of acquisition. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Foreign Currency Translation | Foreign Currency Translation Assets and liabilities of the Company’s Canadian subsidiaries are translated at the exchange rate prevailing at the balance sheet date, while income and expenses are translated at average rates for the period. Translation gains and losses are reported as a separate component of stockholders’ equity and other comprehensive income. Gains and losses on foreign currency transactions are recognized in the Condensed Consolidated Statements of Operations and Comprehensive Income within other (expense) income, net. |
Insurance Liabilities | Insurance Liabilities The Company is self-insured for certain losses related to medical claims. The Company has stop-loss coverage to limit the exposure arising from medical claims. In addition, the Company has deductible-based insurance policies for certain losses related to general liability, workers’ compensation and automobile. The deductible amount per incident is $0.3 million, $0.5 million and $1.0 million for general liability, workers’ compensation and automobile, respectively. The coverage consists of a deductible layer, a primary layer, a self-insured buffer layer, a lead umbrella layer and excess layers. The primary layer of coverage is from $0.3 million, $0.5 million and $1.0 million for deductibles for general liability, workers’ compensation, and automobile liability, respectively, to $5.0 million. The Company self-insures a buffer layer from $5.0 million to $10.0 million. The umbrella and excess layers cover claims from $10.0 million to $100.0 million. The expected ultimate cost for claims incurred as of the balance sheet date is not discounted and is recognized as a liability. Insurance losses for claims filed and claims incurred but not reported are accrued based upon estimates of the aggregate liability for uninsured claims using loss development factors and actuarial assumptions followed in the insurance industry and historical loss development experience. As of October 31, 2020 and April 30, 2020, the aggregate liabilities for medical self-insurance were $4.2 million and $3.8 million, respectively, and are included in other accrued expenses and current liabilities in the Condensed Consolidated Balance Sheets. As of October 31, 2020 and April 30, 2020, reserves for general liability, automobile and workers’ compensation totaled approximately $20.1 million and $19.4 million, respectively, and are included in other accrued expenses and current liabilities and other liabilities in the Condensed Consolidated Balance Sheets. As of October 31, 2020 and April 30, 2020, expected recoveries for medical self-insurance, general liability, automobile and workers’ compensation totaled approximately $8.0 million and $6.0 million, respectively, and are included in prepaid expenses and other current assets and other assets in the Condensed Consolidated Balance Sheets. |
Income Taxes | Income Taxes The Company considers each interim period an integral part of the annual period and measures tax expense (benefit) using an estimated annual effective income tax rate. Estimates of the annual effective income tax rate at the end of interim periods are, out of necessity, based on evaluation of possible future events and transactions and may be subject to subsequent refinement or revision. The Company forecasts its estimated annual effective income tax rate and then applies that rate to its year-to-date pre-tax ordinary income (loss), subject to certain loss limitation provisions. In addition, certain specific transactions are excluded from the Company’s estimated annual effective tax rate computation, but are discretely recognized within income tax expense (benefit) in their respective interim period. Future changes in the forecasted annual income (loss) projections, tax rate changes, or discrete tax items could result in significant adjustments to quarterly income tax expense (benefit) in future periods. The Company evaluates its deferred tax assets quarterly to determine if valuation allowances are required. In this evaluation, 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 primary negative evidence considered includes the cumulative operating losses generated in prior periods. The primary positive evidence considered includes the reversal of deferred tax liabilities primarily related to depreciation and amortization that would occur within the same jurisdiction and during the carryforward period necessary to absorb the federal and state net operating losses and other deferred tax assets. Deferred tax assets and liabilities are computed by applying the federal, provincial and state income tax rates in effect to the gross amounts of temporary differences and other tax attributes, such as net operating loss carry-forwards. In assessing if the deferred tax assets will be realized, the Company considers whether it is more likely than not that some or all of these deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which these deductible temporary differences reverse. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Authoritative guidance for fair value measurements establishes a three-level hierarchy that prioritizes the inputs to valuation models based upon the degree to which they are observable. The three levels of the fair value measurement hierarchy are as follows: Level 1 Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date. Level 2 Inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 Inputs are unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions. The carrying values of the Company’s cash, cash equivalents, trade receivables and trade payables approximate their fair values because of their short-term nature. Based on borrowing rates available to the Company for loans with similar terms, the carrying values of the Company’s debt instruments approximate fair value. See Note 11, “Fair Value Measurements,” for additional information with respect to the Company’s fair value measurements. |
Earnings Per Share | Earnings Per Share Basic earnings per share is computed by dividing net income available to common stockholders by the weighted average number of outstanding shares of common stock for the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock, including stock options and restricted stock units (collectively “Common Stock Equivalents”), were exercised or converted into common stock. The dilutive effect of outstanding stock options and restricted stock units is reflected in diluted earnings per share by application of the treasury stock method. In applying the treasury stock method for stock-based compensation arrangements, the assumed proceeds are computed as the sum of the amount the employee must pay upon exercise and the amount of compensation cost attributed to future services and not yet recognized. Diluted earnings per share is computed by increasing the weighted-average number of outstanding shares of common stock computed in basic earnings per share to include the dilutive effect of Common Stock Equivalents for the period. In periods of net loss, the number of shares used to calculate diluted loss per share is the same as basic net loss per share. The holders of the Company’s Exchangeable Shares (as defined in Note 8, “Stockholders’ Equity”) were entitled to receive dividends or distributions that are equal to any dividends or distributions on the Company’s common stock. As a result, when the Exchangeable Shares were outstanding, they were classified as a participating security and thereby required the allocation of income that would have otherwise been available to common stockholders when calculating earnings per share. Diluted earnings per share was calculated by utilizing the most dilutive result of the if-converted and two-class methods. In both methods, net income attributable to common stockholders and the weighted-average common shares outstanding are adjusted to account for the impact of the assumed issuance of potential common shares that are dilutive, subject to dilution sequencing rules. |
Reclassifications | Reclassifications Certain amounts in the prior period financial statements have been reclassified to conform to the current year presentation. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements Credit Losses – 2020 with no material impact to its financial statements. See Note 3, “Accounts Receivable,” for additional information with respect to the Company’s allowance for expected credit losses. Fair Value Measurement Disclosures – Recently Issued Accounting Pronouncements Reference Rate Reform |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 6 Months Ended |
Oct. 31, 2020 | |
Accounts Receivable | |
Schedule of trade accounts and notes receivable | October 31, April 30, 2020 2020 (in thousands) Trade receivables $ 423,603 $ 398,739 Other receivables 16,506 11,656 Allowance for expected credit losses (2,490) (2,861) Other allowances (2,783) (2,280) Trade accounts and notes receivable $ 434,836 $ 405,254 |
Schedule of change in allowance for expected credit losses | (in thousands) Balance as of April 30, 2020 $ 2,861 Provision (40) Recoveries (250) Write-offs (81) Balance as of October 31, 2020 $ 2,490 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Oct. 31, 2020 | |
Goodwill and Intangible Assets | |
Schedule of changes in the carrying amount of goodwill | Carrying Amount (in thousands) Balance as of April 30, 2020 Goodwill $ 616,147 Accumulated impairment loss (63,074) 553,073 Working capital settlements (159) Translation adjustment 4,572 Balance as of October 31, 2020 Goodwill 620,560 Accumulated impairment loss (63,074) $ 557,486 |
Schedule of components of definite-lived intangible assets | Estimated Weighted October 31, 2020 Useful Average Gross Net Lives Amortization Carrying Accumulated Carrying (years) Period Amount Amortization Value (dollars in thousands) Customer relationships 5 - 16 12.8 $ 526,916 $ 298,246 $ 228,670 Definite-lived tradenames 5 - 20 16.3 56,907 12,448 44,459 Vendor agreements 8 - 10 8.3 6,644 4,970 1,674 Developed technology 5 4.9 5,253 2,582 2,671 Other 3 - 5 3.3 4,272 3,195 1,077 Totals $ 599,992 $ 321,441 $ 278,551 Estimated Weighted April 30, 2020 Useful Average Gross Net Lives Amortization Carrying Accumulated Carrying (years) Period Amount Amortization Value (dollars in thousands) Customer relationships 5 - 16 12.8 $ 516,928 $ 270,029 $ 246,899 Definite-lived tradenames 5 - 20 16.3 55,654 10,474 45,180 Vendor agreements 8 - 10 8.3 6,644 4,567 2,077 Developed technology 5 4.9 5,036 1,963 3,073 Other 1 - 15 5.3 7,836 4,548 3,288 Totals $ 592,098 $ 291,581 $ 300,517 |
Schedule of estimated future aggregate amortization expense | Year Ending April 30, (in thousands) 2021 (remaining six months) $ 26,862 2022 46,613 2023 38,834 2024 31,731 2025 26,223 Thereafter 108,288 Total $ 278,551 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended |
Oct. 31, 2020 | |
Long-Term Debt | |
Schedule of long-term debt | October 31, April 30, 2020 2020 (in thousands) Term Loan Facility $ 871,919 $ 876,903 Unamortized discount and deferred financing costs on Term Loan Facility (9,540) (10,602) ABL Facility — 80,000 Finance lease obligations 122,058 128,767 Installment notes at fixed rates up to 5.0%, due in monthly and annual installments through 2024 12,506 16,316 Unamortized discount on installment notes (920) (1,098) Canadian Facility — 7,194 Carrying value of debt 996,023 1,097,480 Less current portion 49,302 50,201 Long-term debt $ 946,721 $ 1,047,279 |
Scheduled of maturities of long-term debt | Term Loan Finance Installment Facility Leases Notes Total Year ending April 30, (in thousands) 2021 (remaining six months) $ 4,984 $ 17,878 $ 964 $ 23,826 2022 9,968 34,324 4,458 48,750 2023 9,968 29,049 4,424 43,441 2024 9,968 22,039 1,800 33,807 2025 9,968 12,110 860 22,938 Thereafter 827,063 6,658 — 833,721 $ 871,919 $ 122,058 $ 12,506 $ 1,006,483 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Oct. 31, 2020 | |
Leases | |
Summary of components of lease expense | Three Months Ended Six Months Ended October 31, October 31, 2020 2019 2020 2019 (in thousands) Finance lease cost: Amortization of right-of-use assets $ 5,960 $ 6,054 $ 12,099 $ 12,113 Interest on lease liabilities 2,863 3,367 5,925 6,789 Operating lease cost 10,630 10,289 21,329 20,709 Variable lease cost 3,157 3,414 6,132 6,613 Total lease cost $ 22,610 $ 23,124 $ 45,485 $ 46,224 |
Summary of components of supplemental cash flow information related to leases | Six Months Ended October 31, 2020 2019 (in thousands) Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 21,479 $ 20,377 Operating cash flows from finance leases 5,925 6,789 Financing cash flows from finance leases 14,629 12,310 Right-of-use assets obtained in exchange for lease obligations Operating leases 17,216 12,810 Finance leases 12,342 22,812 |
Summary of other lease information | October 31, April 30, 2020 2020 (in thousands) Finance leases included in property and equipment Property and equipment $ 170,868 $ 171,380 Accumulated depreciation (47,342) (41,737) Property and equipment, net $ 123,526 $ 129,643 Weighted-average remaining lease term (years) Operating leases 5.0 4.9 Finance leases 3.5 3.6 Weighted-average discount rate Operating leases 5.5 % 5.5 % Finance leases 4.9 % 5.0 % |
Schedule of maturities for finance leases | Finance Operating Year Ending April 30, (in thousands) 2021 (remaining six months) $ 25,683 $ 19,870 2022 41,454 33,301 2023 32,727 26,613 2024 23,445 21,766 2025 12,541 15,068 Thereafter 6,746 21,474 Total lease payments 142,596 138,092 Less imputed interest 20,538 18,276 Total $ 122,058 $ 119,816 |
Schedule of maturities for operating leases | Finance Operating Year Ending April 30, (in thousands) 2021 (remaining six months) $ 25,683 $ 19,870 2022 41,454 33,301 2023 32,727 26,613 2024 23,445 21,766 2025 12,541 15,068 Thereafter 6,746 21,474 Total lease payments 142,596 138,092 Less imputed interest 20,538 18,276 Total $ 122,058 $ 119,816 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Oct. 31, 2020 | |
Stockholders' Equity | |
Schedule of changes to accumulated other comprehensive loss, net of tax, by component | Accumulated Foreign Derivative Other Currency Financial Comprehensive Translation Instruments Loss (in thousands) Balance as of April 30, 2020 $ (40,577) $ (24,505) $ (65,082) Other comprehensive income (loss) before reclassification 19,440 (530) 18,910 Reclassification to earnings from accumulated other comprehensive loss — 4,333 4,333 Balance as of October 31, 2020 $ (21,137) $ (20,702) $ (41,839) |
Equity-Based Compensation - (Ta
Equity-Based Compensation - (Tables) | 6 Months Ended |
Oct. 31, 2020 | |
Equity-Based Compensation | |
Summary of stock option activity | Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Options Price Life (years) Value (shares and dollars in thousands) Outstanding as of April 30, 2020 1,487 $ 18.85 6.4 $ 3,895 Options granted 321 23.43 Options exercised (43) 14.55 Options forfeited (48) 25.98 Outstanding as of October 31, 2020 1,717 $ 19.62 6.4 $ 6,958 Exercisable as of October 31, 2020 1,082 $ 17.45 4.8 $ 6,585 Vested and expected to vest as of October 31, 2020 1,709 $ 19.60 6.4 $ 6,957 |
Schedule of weighted average assumptions used in Black-Scholes option-pricing model | Six Months Ended October 31, 2020 2019 Volatility 51.28 % 49.94 % Expected life (years) 6.0 6.0 Risk-free interest rate 0.30 % 1.97 % Dividend yield — % — % |
Summary of restricted stock unity activity | Weighted Number of Average Restricted Grant Date Stock Units Fair Value (shares in thousands) Outstanding as of April 30, 2020 286 $ 22.71 Granted 212 23.43 Vested (103) 22.43 Forfeited (28) 23.91 Outstanding as of October 31, 2020 367 $ 23.12 |
Stock Appreciation Rights, De_2
Stock Appreciation Rights, Deferred Compensation and Redeemable Noncontrolling Interests (Tables) | 6 Months Ended |
Oct. 31, 2020 | |
Stock Appreciation Rights, Deferred Compensation and Redeemable Noncontrolling Interests | |
Summary of changes to the liabilities for stock appreciation rights, deferred compensation and redeemable noncontrolling interests | Stock Redeemable Appreciation Deferred Noncontrolling Rights Compensation Interests (in thousands) Balance as of April 30, 2020 $ 24,205 $ 1,660 $ 8,300 Amounts redeemed (181) — — Change in fair value 1,106 73 365 Balance as of October 31, 2020 $ 25,130 $ 1,733 $ 8,665 Classified as current as of April 30, 2020 $ 624 $ — $ — Classified as long-term as of April 30, 2020 23,581 1,660 8,300 Classified as current as of October 31, 2020 $ 650 $ — $ — Classified as long-term as of October 31, 2020 24,480 1,733 8,665 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Oct. 31, 2020 | |
Fair Value Measurements | |
Schedule of liabilities measured at fair value on a recurring basis | October 31, April 30, 2020 2020 (in thousands) Interest rate swaps (Level 2) $ 27,180 $ 32,218 Stock appreciation rights (Level 3) 25,130 24,205 Deferred compensation (Level 3) 1,733 1,660 Noncontrolling interest holders (Level 3) 8,665 8,300 |
Segments (Tables)
Segments (Tables) | 6 Months Ended |
Oct. 31, 2020 | |
Segments | |
Schedule of segment results | |
Reconciliation of Adjusted EBITDA to net income | Three Months Ended Six Months Ended October 31, October 31, 2020 2019 2020 2019 (in thousands) Net income $ 28,469 $ 29,138 $ 55,688 $ 53,958 Interest expense 13,525 17,559 27,606 35,836 Write-off of debt discount and deferred financing fees 707 — 707 Interest income (14) (6) (51) (18) Provision for income taxes 8,277 7,927 17,881 15,517 Depreciation expense 12,710 12,592 25,537 25,014 Amortization expense 14,535 16,926 28,805 33,779 Stock appreciation expense(a) 314 1,267 1,106 1,327 Redeemable noncontrolling interests(b) 186 (18) 438 644 Equity-based compensation(c) 3,252 2,315 4,857 3,710 Severance and other permitted costs(d) 762 1,394 2,709 1,948 Transaction costs (acquisitions and other)(e) 25 327 125 1,299 Loss (gain) on disposal and impairment of assets(f) 481 (586) 875 (742) Effects of fair value adjustments to inventory(g) — — — 151 Secondary public offering costs(h) — 363 — 363 Adjusted EBITDA $ 82,522 $ 89,905 $ 165,576 $ 173,493 (a) Represents non-cash expense related to stock appreciation rights agreements. (b) Represents non-cash compensation expense related to changes in the fair values of noncontrolling interests . (c) Represents non-cash equity-based compensation expense related to the issuance of share-based awards. (d) Represents severance expenses and other costs permitted in the calculation of Adjusted EBITDA under the ABL Facility and the Term Loan Facility, including certain unusual, nonrecurring costs due to the COVID-19 pandemic. (e) Represents costs related to acquisitions paid to third parties. (f) Includes impairment of assets resulting from restructuring plans to close certain facilities and gains from the sale of assets. (g) Represents the non-cash cost of sales impact of acquisition accounting adjustments to increase inventory to its estimated fair value. (h) Represents costs paid to third-party advisors related to secondary offerings of our common stock. |
Schedule of net sales to external customers by main product lines | Three Months Ended Six Months Ended October 31, October 31, 2020 2019 2020 2019 (in thousands) Wallboard $ 330,515 $ 350,618 $ 658,512 $ 692,213 Ceilings 111,293 122,807 224,995 251,917 Steel framing 111,293 136,159 221,780 267,988 Other products 259,755 252,345 510,142 496,987 Total net sales $ 812,856 $ 861,929 $ 1,615,429 $ 1,709,105 |
Schedule of net sales by major geographic area | Three Months Ended Six Months Ended October 31, October 31, 2020 2019 2020 2019 (in thousands) United States $ 684,131 $ 744,134 $ 1,363,452 $ 1,475,477 Canada 128,725 117,795 251,977 233,628 Total net sales $ 812,856 $ 861,929 $ 1,615,429 1,709,105 |
Schedule of property and equipment by major geographic area | October 31, April 30, 2020 2020 (in thousands) United States $ 265,941 $ 270,855 Canada 34,203 34,612 Total property and equipment, net $ 300,144 $ 305,467 |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 6 Months Ended |
Oct. 31, 2020 | |
Earnings Per Common Share | |
Schedule of computation of basic and diluted earnings per share of common stock | Three Months Ended Six Months Ended October 31, October 31, 2020 2019 2020 2019 (in thousands, except per share data) Net income $ 28,469 $ 29,138 $ 55,688 $ 53,958 Less: Net income allocated to participating securities — — — 342 Net income attributable to common stockholders $ 28,469 $ 29,138 $ 55,688 $ 53,616 Basic earnings per common share: Basic weighted average common shares outstanding 42,723 41,761 42,674 41,382 Basic earnings per common share $ 0.67 $ 0.70 $ 1.30 $ 1.30 Diluted earnings per common share: Basic weighted average common shares outstanding 42,723 41,761 42,674 41,382 Add: Common Stock Equivalents 451 874 422 744 Diluted weighted average common shares outstanding 43,174 42,635 43,096 42,126 Diluted earnings per common share $ 0.66 $ 0.68 $ 1.29 $ 1.27 |
Business, Basis of Presentati_3
Business, Basis of Presentation and Summary of Significant Accounting Policies - Business (Details) | 6 Months Ended |
Oct. 31, 2020item | |
Business | |
Number of distribution centers | 260 |
Business, Basis of Presentati_4
Business, Basis of Presentation and Summary of Significant Accounting Policies - Insurance Liabilities (Details) - USD ($) $ in Millions | Oct. 31, 2020 | Apr. 30, 2020 |
Other accrued expenses and current liabilities. | ||
Insurance Liabilities | ||
Aggregate liabilities for medical self-insurance | $ 4.2 | $ 3.8 |
General liability | ||
Insurance Liabilities | ||
Deductible amount | 0.3 | |
Primary layer of insurance coverage | 0.3 | |
Workers' compensation | ||
Insurance Liabilities | ||
Deductible amount | 0.5 | |
Primary layer of insurance coverage | 0.5 | |
Automobile | ||
Insurance Liabilities | ||
Deductible amount | 1 | |
Primary layer of insurance coverage | 1 | |
General liability, workers' compensation and automobile | Other accrued expenses and current liabilities. | ||
Insurance Liabilities | ||
Reserve for insurance | 20.1 | 19.4 |
General liability, workers' compensation and automobile | Prepaid expenses and other current assets | ||
Insurance Liabilities | ||
Insurance recovery receivable | 8 | $ 6 |
General liability, workers' compensation and automobile | Minimum | ||
Insurance Liabilities | ||
Buffer layer of insurance coverage | 5 | |
Excess layer of insurance coverage | 10 | |
General liability, workers' compensation and automobile | Maximum | ||
Insurance Liabilities | ||
Primary layer of insurance coverage | 5 | |
Buffer layer of insurance coverage | 10 | |
Excess layer of insurance coverage | $ 100 |
Revenue (Details)
Revenue (Details) - USD ($) $ in Millions | 6 Months Ended | |
Oct. 31, 2020 | Apr. 30, 2020 | |
Revenue | ||
Revenue, Practical Expedient, Financing Component [true false] | true | |
Revenue, Practical Expedient, Remaining Performance Obligation [true/false] | true | |
Receivables from contracts with customers | $ 418.3 | $ 393.6 |
Accounts Receivable - Trade Acc
Accounts Receivable - Trade Accounts And Notes Receivable (Details) - USD ($) $ in Thousands | Oct. 31, 2020 | Apr. 30, 2020 |
Accounts Receivable | ||
Trade receivables | $ 423,603 | $ 398,739 |
Other receivables | 16,506 | 11,656 |
Allowance for expected credit losses | (2,490) | (2,861) |
Other allowances | (2,783) | (2,280) |
Trade accounts and notes receivable | $ 434,836 | $ 405,254 |
Accounts Receivable - Change In
Accounts Receivable - Change In Allowance (Details) $ in Thousands | 6 Months Ended |
Oct. 31, 2020USD ($) | |
Change in allowance | |
Beginning balance | $ 2,861 |
Ending balance | 2,490 |
Accounts receivable. | |
Change in allowance | |
Beginning balance | 2,861 |
Provision | (40) |
Recoveries | (250) |
Write-offs | (81) |
Ending balance | $ 2,490 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Goodwill (Details) $ in Thousands | 6 Months Ended |
Oct. 31, 2020USD ($) | |
Carrying Amount of Goodwill | |
Goodwill | $ 616,147 |
Accumulated impairment loss | (63,074) |
Balance | 553,073 |
Working capital settlement | (159) |
Translation adjustment | 4,572 |
Goodwill | 620,560 |
Accumulated impairment loss | (63,074) |
Balance | $ 557,486 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Definite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Oct. 31, 2020 | Apr. 30, 2020 | |
Definite-lived intangible assets | ||
Gross Carrying Amount | $ 599,992 | $ 592,098 |
Accumulated Amortization | 321,441 | 291,581 |
Total | $ 278,551 | $ 300,517 |
Customer relationships | ||
Definite-lived intangible assets | ||
Weighted Average Amortization Period (in years) | 12 years 9 months 18 days | 12 years 9 months 18 days |
Gross Carrying Amount | $ 526,916 | $ 516,928 |
Accumulated Amortization | 298,246 | 270,029 |
Total | $ 228,670 | $ 246,899 |
Customer relationships | Minimum | ||
Definite-lived intangible assets | ||
Estimated Useful Lives (years) | 5 years | 5 years |
Customer relationships | Maximum | ||
Definite-lived intangible assets | ||
Estimated Useful Lives (years) | 16 years | 16 years |
Tradenames | ||
Definite-lived intangible assets | ||
Weighted Average Amortization Period (in years) | 16 years 3 months 18 days | 16 years 3 months 18 days |
Gross Carrying Amount | $ 56,907 | $ 55,654 |
Accumulated Amortization | 12,448 | 10,474 |
Total | $ 44,459 | $ 45,180 |
Tradenames | Minimum | ||
Definite-lived intangible assets | ||
Estimated Useful Lives (years) | 5 years | 5 years |
Tradenames | Maximum | ||
Definite-lived intangible assets | ||
Estimated Useful Lives (years) | 20 years | 20 years |
Vendor agreements | ||
Definite-lived intangible assets | ||
Weighted Average Amortization Period (in years) | 8 years 3 months 18 days | 8 years 3 months 18 days |
Gross Carrying Amount | $ 6,644 | $ 6,644 |
Accumulated Amortization | 4,970 | 4,567 |
Total | $ 1,674 | $ 2,077 |
Vendor agreements | Minimum | ||
Definite-lived intangible assets | ||
Estimated Useful Lives (years) | 8 years | 8 years |
Vendor agreements | Maximum | ||
Definite-lived intangible assets | ||
Estimated Useful Lives (years) | 10 years | 10 years |
Developed technology | ||
Definite-lived intangible assets | ||
Estimated Useful Lives (years) | 5 years | 5 years |
Weighted Average Amortization Period (in years) | 4 years 10 months 24 days | 4 years 10 months 24 days |
Gross Carrying Amount | $ 5,253 | $ 5,036 |
Accumulated Amortization | 2,582 | 1,963 |
Total | $ 2,671 | $ 3,073 |
Other intangible assets | ||
Definite-lived intangible assets | ||
Weighted Average Amortization Period (in years) | 3 years 3 months 18 days | 5 years 3 months 18 days |
Gross Carrying Amount | $ 4,272 | $ 7,836 |
Accumulated Amortization | 3,195 | 4,548 |
Total | $ 1,077 | $ 3,288 |
Other intangible assets | Minimum | ||
Definite-lived intangible assets | ||
Estimated Useful Lives (years) | 3 years | 1 year |
Other intangible assets | Maximum | ||
Definite-lived intangible assets | ||
Estimated Useful Lives (years) | 5 years | 15 years |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Amortization (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2020 | Oct. 31, 2019 | |
Intangible assets | ||||
Amortization expense | $ 14,535 | $ 16,926 | $ 28,805 | $ 33,779 |
Depreciation and amortization expense | ||||
Intangible assets | ||||
Amortization expense | $ 14,500 | $ 16,900 | $ 28,800 | $ 33,800 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Estimated Aggregate Amortization Expense (Details) - USD ($) $ in Thousands | Oct. 31, 2020 | Apr. 30, 2020 |
Estimated aggregate future amortization expense | ||
2021 (remaining six months) | $ 26,862 | |
2022 | 46,613 | |
2023 | 38,834 | |
2024 | 31,731 | |
2025 | 26,223 | |
Thereafter | 108,288 | |
Total | $ 278,551 | $ 300,517 |
Goodwill and Intangible Asset_6
Goodwill and Intangible Assets - Indefinite-Lived Intangible Assets (Details) - USD ($) $ in Millions | Oct. 31, 2020 | Apr. 30, 2020 |
Goodwill and Intangible Assets | ||
Tradenames | $ 61.4 | $ 61.4 |
Long-Term Debt - Components (De
Long-Term Debt - Components (Details) - USD ($) $ in Thousands | Oct. 31, 2020 | Apr. 30, 2020 |
Long-term debt | ||
Carrying value of debt | $ 996,023 | $ 1,097,480 |
Less current portion | 49,302 | 50,201 |
Long-term debt | 946,721 | 1,047,279 |
Term Loan Facility | ||
Long-term debt | ||
Carrying value of debt | 871,919 | 876,903 |
Unamortized discount and deferred financing costs | (9,540) | (10,602) |
ABL Facility | ||
Long-term debt | ||
Carrying value of debt | 80,000 | |
Finance lease obligations | ||
Long-term debt | ||
Carrying value of debt | 122,058 | 128,767 |
Installment notes | ||
Long-term debt | ||
Carrying value of debt | $ 12,506 | $ 16,316 |
Interest rate | 5.00% | 5.00% |
Unamortized discount | $ (920) | $ (1,098) |
Canadian Facility | ||
Long-term debt | ||
Carrying value of debt | $ 7,194 |
Long-Term Debt - Acquisition De
Long-Term Debt - Acquisition Debt (Details) - Term Loan Facility $ in Millions | 6 Months Ended |
Oct. 31, 2020USD ($) | |
Long-term debt | |
Aggregate principal amount | $ 871.9 |
Borrowing interest rate (as a percent) | 2.90% |
Loan quarterly payments | $ 2.5 |
Loan quarterly payments of the principal amount (as a percent) | 0.25% |
LIBOR | |
Long-term debt | |
Margin added to variable rate (as a percent) | 2.75% |
Variable rate floor (as a percent) | 0.00% |
Long-Term Debt - Asset-Based Le
Long-Term Debt - Asset-Based Lending Facility (Details) - ABL Facility $ in Millions | Oct. 31, 2020USD ($) |
Long-term debt | |
Maximum amount under the facility | $ 445 |
Available borrowings under the facility | 392.9 |
Swing-line | |
Long-term debt | |
Maximum amount under the facility | $ 44.5 |
Long-Term Debt - Canadian Revol
Long-Term Debt - Canadian Revolving Credit Facility (Details) - Canadian Facility $ in Millions, $ in Millions | Oct. 31, 2020USD ($) | Jun. 01, 2018USD ($) | Jun. 01, 2018CAD ($) |
Debt Instrument [Line Items] | |||
Maximum amount under the facility | $ 22.5 | $ 30 | |
Available borrowings under the facility | $ 22.5 |
Long-Term Debt - Maturities (De
Long-Term Debt - Maturities (Details) - USD ($) $ in Thousands | Oct. 31, 2020 | Apr. 30, 2020 |
Debt maturities | ||
2021 (remaining six months) | $ 23,826 | |
2022 | 48,750 | |
2023 | 43,441 | |
2024 | 33,807 | |
2025 | 22,938 | |
Thereafter | 833,721 | |
Total | 1,006,483 | |
Term Loan Facility | ||
Debt maturities | ||
2021 (remaining six months) | 4,984 | |
2022 | 9,968 | |
2023 | 9,968 | |
2024 | 9,968 | |
2025 | 9,968 | |
Thereafter | 827,063 | |
Total | 871,919 | |
Finance lease obligations | ||
Debt maturities | ||
2021 (remaining six months) | 17,878 | |
2022 | 34,324 | |
2023 | 29,049 | |
2024 | 22,039 | |
2025 | 12,110 | |
Thereafter | 6,658 | |
Total | 122,058 | |
Installment notes | ||
Debt maturities | ||
2021 (remaining six months) | 964 | |
2022 | 4,458 | |
2023 | 4,424 | |
2024 | 1,800 | |
2025 | 860 | |
Total | 12,506 | |
Long Term Debt | ||
Unamortized discount | $ 920 | $ 1,098 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2020 | Oct. 31, 2019 | |
Leases | ||||
Option to extend | true | |||
Finance lease cost: | ||||
Amortization of right-of-use assets | $ 5,960 | $ 6,054 | $ 12,099 | $ 12,113 |
Interest on lease liabilities | 2,863 | 3,367 | 5,925 | 6,789 |
Operating lease cost | 10,630 | 10,289 | 21,329 | 20,709 |
Variable lease cost | 3,157 | 3,414 | 6,132 | 6,613 |
Total lease cost | $ 22,610 | $ 23,124 | $ 45,485 | $ 46,224 |
Minimum | ||||
Leases | ||||
Lease term (in years) | 1 year | 1 year | ||
Renewal lease term (in years) | 1 year | 1 year | ||
Maximum | ||||
Leases | ||||
Lease term (in years) | 11 years | 11 years | ||
Renewal lease term (in years) | 5 years | 5 years |
Leases - Supplemental cash flow
Leases - Supplemental cash flow information (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Oct. 31, 2020 | Oct. 31, 2019 | |
Cash paid for amounts included in the measurement of lease liabilities | ||
Operating cash flows from operating leases | $ 21,479 | $ 20,377 |
Operating cash flows from finance leases | 5,925 | 6,789 |
Financing cash flows from finance leases | 14,629 | 12,310 |
Right-of-use assets obtained in exchange for lease obligations - Operating leases | 17,216 | 12,810 |
Right-of-use assets obtained in exchange for lease obligations - Finance leases | $ 12,342 | $ 22,812 |
Leases - Other information (Det
Leases - Other information (Details) - USD ($) $ in Thousands | Oct. 31, 2020 | Apr. 30, 2020 |
Finance leases included in property and equipment | ||
Accumulated depreciation | $ (174,832) | $ (158,554) |
Property and equipment, net | $ 300,144 | $ 305,467 |
Weighted-average remaining lease term (years) - Operating leases | 5 years | 4 years 10 months 24 days |
Weighted-average remaining lease term (years) - Finance leases | 3 years 6 months | 3 years 7 months 6 days |
Weighted-average discount rate - Operating leases | 5.50% | 5.50% |
Weighted-average discount rate - Finance leases | 4.90% | 5.00% |
Finance Leased Assets | ||
Finance leases included in property and equipment | ||
Property and equipment | $ 170,868 | $ 171,380 |
Accumulated depreciation | (47,342) | (41,737) |
Property and equipment, net | $ 123,526 | $ 129,643 |
Leases - Future minimum lease p
Leases - Future minimum lease payments under non-cancellable leases (Details) $ in Thousands | Oct. 31, 2020USD ($) |
Finance lease | |
2021 (remaining six months) | $ 25,683 |
2022 | 41,454 |
2023 | 32,727 |
2024 | 23,445 |
2025 | 12,541 |
Thereafter | 6,746 |
Total lease payments | 142,596 |
Less imputed interest | 20,538 |
Total | 122,058 |
Operating lease | |
2021 (remaining six months) | 19,870 |
2022 | 33,301 |
2023 | 26,613 |
2024 | 21,766 |
2025 | 15,068 |
Thereafter | 21,474 |
Total lease payments | 138,092 |
Less imputed interest | 18,276 |
Total | $ 119,816 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Oct. 31, 2020 | Oct. 31, 2019 | Apr. 30, 2020 | |
Effective income tax rate (as a percent) | 24.30% | 22.30% | |
Valuation allowance | $ 10.6 | $ 10.2 | |
Reserve for uncertain tax positions | $ 0 | $ 0 | |
Domestic | |||
Federal statutory rate (as a percent) | 21.00% |
Stockholders' Equity - Exchange
Stockholders' Equity - Exchangeable Shares, Share Repurchase Program and Secondary Public Offering (Details) shares in Thousands, $ in Millions | Jun. 13, 2019shares | Jun. 01, 2018shares | Oct. 31, 2020USD ($)shares | Nov. 30, 2018USD ($) |
Exchangeable Shares and Share Repurchase Program | ||||
Number of shares repurchased | shares | 50 | |||
Shares repurchased, cost | $ | $ 1.2 | |||
Remaining amount under repurchase program | $ | $ 57.3 | |||
Maximum | ||||
Exchangeable Shares and Share Repurchase Program | ||||
Stock repurchase program, authorized amount | $ | $ 75 | |||
Titan | ||||
Exchangeable Shares and Share Repurchase Program | ||||
Issuance of shares to current shareholders of Titan (in shares) | shares | 1,100 | |||
Exchangeable shares converted | shares | 1,100 | |||
Exchangeable shares conversion ratio | 1 |
Stockholders' Equity - Accumula
Stockholders' Equity - Accumulated Other Comprehensive Loss (Details) $ in Thousands | 6 Months Ended |
Oct. 31, 2020USD ($) | |
Accumulated other comprehensive (loss) income | |
Balance | $ 633,981 |
Balance | 717,897 |
Other comprehensive loss on derivative instruments before reclassification, tax | 200 |
Reclassification of (decrease) increase in fair value financial instruments from Accumulated other comprehensive income (loss) | |
Amount expected to be reclassified to earnings during next twelve months | (1,400) |
Accumulated Other Comprehensive Loss | |
Accumulated other comprehensive (loss) income | |
Balance | (65,082) |
Other comprehensive income before reclassification | 18,910 |
Reclassification to earnings from accumulated other comprehensive loss | 4,333 |
Balance | (41,839) |
Foreign Currency Translation | |
Accumulated other comprehensive (loss) income | |
Balance | (40,577) |
Other comprehensive income before reclassification | 19,440 |
Balance | (21,137) |
Derivative Financial Instruments | |
Accumulated other comprehensive (loss) income | |
Balance | (24,505) |
Other comprehensive income before reclassification | (530) |
Reclassification to earnings from accumulated other comprehensive loss | 4,333 |
Balance | $ (20,702) |
Equity-Based Compensation - Sto
Equity-Based Compensation - Stock Option Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2020 | Oct. 31, 2019 | Apr. 30, 2020 | |
Other disclosures | |||||
Equity-based compensation | $ 3,252 | $ 2,315 | $ 4,857 | $ 3,710 | |
Selling, general and administrative expenses | |||||
Other disclosures | |||||
Equity-based compensation | $ 4,600 | 3,400 | |||
Stock Options | |||||
Number of Options | |||||
Outstanding, beginning of the period (in shares) | 1,487 | ||||
Options granted (in shares) | 321 | ||||
Options exercised (in shares) | (43) | ||||
Options forfeited (in shares) | (48) | ||||
Outstanding, end of the period (in shares) | 1,717 | 1,717 | 1,487 | ||
Exercisable at end of period (in shares) | 1,082 | 1,082 | |||
Vested and expected to vest at end of period (in shares) | 1,709 | 1,709 | |||
Weighted Average Exercise Price | |||||
Outstanding, beginning of period (in dollars per share) | $ 18.85 | ||||
Options granted (in dollars per share) | 23.43 | ||||
Options exercised (in dollars per share) | 14.55 | ||||
Options forfeited (in dollars per share) | 25.98 | ||||
Outstanding, end of the period (in dollars per share) | $ 19.62 | 19.62 | $ 18.85 | ||
Exercisable at end of period (in dollars per share) | 17.45 | 17.45 | |||
Vested and expected to vest at end of period (in dollars per share) | $ 19.60 | $ 19.60 | |||
Other disclosures | |||||
Weighted Average Remaining Contractual Life, Outstanding (in years) | 6 years 4 months 24 days | 6 years 4 months 24 days | |||
Weighted Average Remaining Contractual Life, Exercisable at end of period (in years) | 4 years 9 months 18 days | ||||
Weighted Average Remaining Contractual Life, Vested and expected to vest at end of period (in years) | 6 years 4 months 24 days | ||||
Aggregate Intrinsic Value, Outstanding | $ 6,958 | $ 6,958 | $ 3,895 | ||
Aggregate Intrinsic Value, Exercisable at end of period | 6,585 | 6,585 | |||
Aggregate Intrinsic Value, Vested and expected to vest at end of period | 6,957 | 6,957 | |||
Intrinsic value of options exercised | 300 | $ 8,600 | |||
Unrecognized compensation cost | $ 5,400 | $ 5,400 | |||
Weighted-average period for recognition of unrecognized compensation expense (in years) | 2 years 2 months 12 days | ||||
Options granted (in shares) | 321 |
Equity-Based Compensation - Bla
Equity-Based Compensation - Black Scholes Options - Pricing Model (Details) - Stock Options - $ / shares | 6 Months Ended | |
Oct. 31, 2020 | Oct. 31, 2019 | |
Stock options | ||
Volatility (as a percent) | 51.28% | 49.94% |
Expected life (years) | 6 years | 6 years |
Risk-free interest rate (as a percent) | 0.30% | 1.97% |
Dividend yield (as a percent) | 0.00% | 0.00% |
Weighted average grant date fair value (in dollars per share) | $ 11.13 | $ 10.55 |
Equity-Based Compensation - Res
Equity-Based Compensation - Restricted Stock Units (Details) - Restricted stock units $ / shares in Units, shares in Thousands, $ in Millions | 6 Months Ended |
Oct. 31, 2020USD ($)$ / sharesshares | |
Number of Restricted Stock Units | |
Outstanding, beginning of the period (in shares) | shares | 286 |
Granted (in shares) | shares | 212 |
Vested (in shares) | shares | (103) |
Forfeited (in shares) | shares | (28) |
Outstanding, end of the period (in shares) | shares | 367 |
Weighted Average Exercise Price | |
Outstanding, beginning of period (in dollars per share) | $ / shares | $ 22.71 |
Granted (in dollars per share) | $ / shares | 23.43 |
Vested (in dollars per share) | $ / shares | 22.43 |
Forfeited (in dollars per share) | $ / shares | 23.91 |
Outstanding, end of the period (in dollars per share) | $ / shares | $ 23.12 |
Unrecognized compensation cost | $ | $ 6.2 |
Weighted-average period for recognition of unrecognized compensation expense (in years) | 2 years |
Equity-Based Compensation - Emp
Equity-Based Compensation - Employee Stock Purchase Plan (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | 3 Months Ended | 6 Months Ended | ||
Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2020 | Oct. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 3,252 | $ 2,315 | $ 4,857 | $ 3,710 |
ESPP | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of common stock price based on closing price at the beginning or end of the last day of the purchase period | 90.00% | |||
Purchase period | 6 months | |||
Number of shares purchased under ESPP | 0.1 | |||
Average price per share | $ 22.13 | $ 22.13 | ||
Share-based compensation expense | $ 300 | $ 300 |
Stock Appreciation Rights, De_3
Stock Appreciation Rights, Deferred Compensation and Redeemable Noncontrolling Interests (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Oct. 31, 2020 | Oct. 31, 2019 | Apr. 30, 2020 | |
Selling, general and administrative expenses | |||
Equity based compensation arrangements | |||
Expense related to equity based compensation arrangements | $ 1,500 | $ 2,000 | |
Stock Appreciation Rights | |||
Equity based compensation arrangements | |||
Award liability as of beginning of period | 24,205 | ||
Amounts redeemed | (181) | ||
Change in fair value | 1,106 | ||
Award liability as of end of period | 25,130 | ||
Current liabilities related to plans | 650 | $ 624 | |
Long-term liabilities related to plans | $ 24,480 | 23,581 | |
Settlement period | 5 years | ||
Deferred Compensation | |||
Equity based compensation arrangements | |||
Award liability as of beginning of period | $ 1,660 | ||
Change in fair value | 73 | ||
Award liability as of end of period | 1,733 | ||
Long-term liabilities related to plans | $ 1,733 | 1,660 | |
Settlement period | 5 years | ||
Redeemable Noncontrolling Interests | |||
Equity based compensation arrangements | |||
Award liability as of beginning of period | $ 8,300 | ||
Change in fair value | 365 | ||
Award liability as of end of period | 8,665 | ||
Long-term liabilities related to plans | $ 8,665 | $ 8,300 | |
Settlement period | 5 years |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Oct. 31, 2020 | Oct. 31, 2020 | Apr. 30, 2020 | Feb. 28, 2019 | |
Fair Value Measurements | ||||
Impairment charges | $ 1,000 | |||
Fair Value, Measurements, Recurring | Level 3 | ||||
Fair Value Measurements | ||||
Stock appreciation rights | $ 25,130 | 25,130 | $ 24,205 | |
Deferred compensation | 1,733 | 1,733 | 1,660 | |
Noncontrolling interest holders | 8,665 | 8,665 | 8,300 | |
Interest rate swap agreements | ||||
Fair Value Measurements | ||||
Interest rate swap gains (losses) | (2,200) | (4,300) | ||
Expected amount of pre-tax net losses will be reclassified from accumulated other comprehensive income (loss) into earnings during the next twelve months | 11,700 | |||
Interest rate swap agreements | Fair Value, Measurements, Recurring | Level 2 | ||||
Fair Value Measurements | ||||
Derivative liabilities | 27,180 | 27,180 | $ 32,218 | |
Interest rate swap agreements | Term Loan Facility | ||||
Fair Value Measurements | ||||
Notional amount | $ 500,000 | |||
Interest rate swap agreements | LIBOR | Term Loan Facility | ||||
Fair Value Measurements | ||||
Fixed interest rate | 2.46% | |||
Other accrued expenses and current liabilities | Interest rate swap agreements | ||||
Fair Value Measurements | ||||
Derivative liabilities | 11,700 | 11,700 | ||
Other liabilities | Interest rate swap agreements | ||||
Fair Value Measurements | ||||
Derivative liabilities | $ 15,500 | $ 15,500 |
Transactions With Related Par_2
Transactions With Related Parties - Purchased Inventories (Details) - Southern Wall Products, Inc. - Inventory purchases - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2020 | Oct. 31, 2019 | Apr. 30, 2020 | |
Transactions with related parties | |||||
Purchases from related party | $ 3.8 | $ 3.7 | $ 7.3 | $ 7.3 | |
Accounts payable | |||||
Transactions with related parties | |||||
Due to SWP | $ 1.2 |
Segments (Details)
Segments (Details) | Apr. 30, 2020segment | Oct. 31, 2020segmentdivision |
Segments | ||
Number of operating segments | segment | 7 | 8 |
Number of reportable segments | segment | 1 | |
Number of geographic divisions | division | 8 | |
Number of operating segment, divisions | division | 2 |
Segments - Net Sales, Adjusted
Segments - Net Sales, Adjusted EBITDA and Certain Other Measures (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2020 | Oct. 31, 2019 | Apr. 30, 2020 | |
Segment information | |||||
Net sales | $ 812,856 | $ 861,929 | $ 1,615,429 | $ 1,709,105 | |
Gross Profit | 265,071 | 284,493 | 525,529 | 558,147 | |
Depreciation and Amortization | 27,245 | 29,518 | 54,342 | 58,793 | |
Adjusted EBITDA | 82,522 | 89,905 | 165,576 | 173,493 | |
Total assets | 2,210,874 | 2,210,874 | $ 2,288,782 | ||
Geographic divisions | |||||
Segment information | |||||
Net sales | 805,074 | 854,853 | 1,599,546 | 1,695,010 | |
Gross Profit | 262,534 | 281,900 | 520,372 | 553,254 | |
Depreciation and Amortization | 26,783 | 29,024 | 53,565 | 57,956 | |
Adjusted EBITDA | 82,169 | 89,171 | 164,673 | 172,254 | |
Other. | |||||
Segment information | |||||
Net sales | 7,782 | 7,076 | 15,883 | 14,095 | |
Gross Profit | 2,537 | 2,593 | 5,157 | 4,893 | |
Depreciation and Amortization | 91 | 55 | 182 | 108 | |
Adjusted EBITDA | 353 | 734 | 903 | 1,239 | |
Corporate | |||||
Segment information | |||||
Depreciation and Amortization | $ 371 | $ 439 | $ 595 | $ 729 |
Segments - Reconciliation of Ne
Segments - Reconciliation of Net Income to Adjusted EBITDA (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Oct. 31, 2020 | Jul. 31, 2020 | Oct. 31, 2019 | Jul. 31, 2019 | Oct. 31, 2020 | Oct. 31, 2019 | |
Segments | ||||||
Net income | $ 28,469 | $ 27,219 | $ 29,138 | $ 24,820 | $ 55,688 | $ 53,958 |
Interest expense | 13,525 | 17,559 | 27,606 | 35,836 | ||
Write-off of debt discount and deferred financing fees | 707 | 707 | ||||
Interest income | (14) | (6) | (51) | (18) | ||
Provision for income taxes | 8,277 | 7,927 | 17,881 | 15,517 | ||
Depreciation expense | 12,710 | 12,592 | 25,537 | 25,014 | ||
Amortization expense | 14,535 | 16,926 | 28,805 | 33,779 | ||
Stock appreciation expense | 314 | 1,267 | 1,106 | 1,327 | ||
Redeemable noncontrolling interests | 186 | (18) | 438 | 644 | ||
Equity-based compensation | 3,252 | 2,315 | 4,857 | 3,710 | ||
Severance and other permitted costs | 762 | 1,394 | 2,709 | 1,948 | ||
Transaction costs (acquisitions and other) | 25 | 327 | 125 | 1,299 | ||
Loss (gain) on disposal and impairment of assets | 481 | (586) | 875 | (742) | ||
Effects of fair value adjustments to inventory | 151 | |||||
Secondary public offering costs | 363 | 363 | ||||
Adjusted EBITDA | $ 82,522 | $ 89,905 | $ 165,576 | $ 173,493 |
Segments - Net Sales by Main Pr
Segments - Net Sales by Main Product Lines (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2020 | Oct. 31, 2019 | |
Revenue from external customers | ||||
Total net sales | $ 812,856 | $ 861,929 | $ 1,615,429 | $ 1,709,105 |
Wallboard | ||||
Revenue from external customers | ||||
Total net sales | 330,515 | 350,618 | 658,512 | 692,213 |
Ceilings | ||||
Revenue from external customers | ||||
Total net sales | 111,293 | 122,807 | 224,995 | 251,917 |
Steel framing | ||||
Revenue from external customers | ||||
Total net sales | 111,293 | 136,159 | 221,780 | 267,988 |
Other products | ||||
Revenue from external customers | ||||
Total net sales | $ 259,755 | $ 252,345 | $ 510,142 | $ 496,987 |
Segments - Net sales by major g
Segments - Net sales by major geographic area (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2020 | Oct. 31, 2019 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total net sales | $ 812,856 | $ 861,929 | $ 1,615,429 | $ 1,709,105 |
United States | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total net sales | 684,131 | 744,134 | 1,363,452 | 1,475,477 |
Canada | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total net sales | $ 128,725 | $ 117,795 | $ 251,977 | $ 233,628 |
Segments - Property and equipme
Segments - Property and equipment, net, by major geographic area (Details) - USD ($) $ in Thousands | Oct. 31, 2020 | Apr. 30, 2020 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment, net | $ 300,144 | $ 305,467 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment, net | 265,941 | 270,855 |
Canada | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment, net | $ 34,203 | $ 34,612 |
Earnings Per Common Share (Deta
Earnings Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Oct. 31, 2020 | Jul. 31, 2020 | Oct. 31, 2019 | Jul. 31, 2019 | Oct. 31, 2020 | Oct. 31, 2019 | ||
Computation of basic and diluted earnings per share of common stock | |||||||
Net income | $ 28,469 | $ 27,219 | $ 29,138 | $ 24,820 | $ 55,688 | $ 53,958 | |
Less: Net income allocated to participating securities | 342 | ||||||
Net income attributable to common stockholders | $ 28,469 | $ 29,138 | $ 55,688 | $ 53,616 | |||
Basic earnings per common share: | |||||||
Basic weighted average common shares outstanding (in shares) | 42,723 | 41,761 | 42,674 | 41,382 | |||
Basic earnings per common share (in dollars per share) | [1] | $ 0.67 | $ 0.70 | $ 1.30 | $ 1.30 | ||
Diluted earnings per common share: | |||||||
Basic weighted average common shares outstanding (in shares) | 42,723 | 41,761 | 42,674 | 41,382 | |||
Add: Common Stock Equivalents | 451 | 874 | 422 | 744 | |||
Diluted weighted average common shares outstanding (in shares) | 43,174 | 42,635 | 43,096 | 42,126 | |||
Diluted earnings per common share (in dollars per share) | [1] | $ 0.66 | $ 0.68 | $ 1.29 | $ 1.27 | ||
Shares were not included in the calculation of Diluted loss per common share | |||||||
Anti-dilutive shares | 500 | 400 | |||||
[1] | See Note 15 for detailed calculations . |