Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 29, 2020 | Apr. 24, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 29, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-37760 | |
Entity Registrant Name | SiteOne Landscape Supply, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 46-4056061 | |
Entity Address, Address Line One | 300 Colonial Center Parkway | |
Entity Address, Address Line Two | Suite 600 | |
Entity Address, City or Town | Roswell | |
Entity Address, State or Province | GA | |
Entity Address, Postal Zip Code | 30076 | |
City Area Code | 470 | |
Local Phone Number | 277-7000 | |
Title of 12(b) Security | Common Stock, $0.01 par value per share | |
Trading Symbol | SITE | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 41,877,761 | |
Entity Central Index Key | 0001650729 | |
Current Fiscal Year End Date | --01-03 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Mar. 29, 2020 | Dec. 29, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 22 | $ 19 |
Accounts receivable, net of allowance for doubtful accounts of $9.5 and $8.3, respectively | 295.7 | 283.4 |
Inventory, net | 545 | 427.1 |
Income tax receivable | 22.7 | 7 |
Prepaid expenses and other current assets | 30.8 | 29.3 |
Total current assets | 916.2 | 765.8 |
Property and equipment, net (Note 5) | 111.9 | 104.9 |
Operating lease right-of-use assets, net (Note 7) | 239.5 | 231 |
Goodwill (Note 6) | 207 | 181.3 |
Intangible assets, net (Note 6) | 162.8 | 150.6 |
Deferred tax assets | 1.6 | 1.9 |
Other assets | 7.5 | 7.8 |
Total assets | 1,646.5 | 1,443.3 |
Current liabilities: | ||
Accounts payable | 251.4 | 162.2 |
Current portion of finance leases (Note 7) | 7.9 | |
Current portion of finance leases (Note 7) | 6.7 | |
Current portion of operating leases (Note 7) | 50.5 | 48.6 |
Accrued compensation | 27.3 | 39.7 |
Long-term debt, current portion (Note 9) | 4.5 | 4.5 |
Accrued liabilities | 53.8 | 49.1 |
Total current liabilities | 395.4 | 310.8 |
Other long-term liabilities | 17.4 | 13.2 |
Finance leases, less current portion (Note 7) | 19.7 | |
Finance leases, less current portion (Note 7) | 16.2 | |
Operating leases, less current portion (Note 7) | 193.2 | 186.3 |
Deferred tax liabilities | 3.2 | 3.2 |
Long-term debt, less current portion (Note 9) | 640.1 | 520.4 |
Total liabilities | 1,269 | 1,050.1 |
Commitments and contingencies (Note 11) | ||
Stockholders' equity: | ||
Common stock, par value $0.01; 1,000,000,000 shares authorized; 41,883,358 and 41,591,727 shares issued, and 41,862,447 and 41,570,816 shares outstanding at March 29, 2020 and December 29, 2019, respectively | 0.4 | 0.4 |
Additional paid-in capital | 268 | 261.5 |
Retained earnings | 120.3 | 137.8 |
Accumulated other comprehensive loss | (11.2) | (6.5) |
Total equity | 377.5 | 393.2 |
Total liabilities and equity | $ 1,646.5 | $ 1,443.3 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Millions | Mar. 29, 2020 | Dec. 29, 2019 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 9.5 | $ 8.3 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 41,883,358 | 41,591,727 |
Common stock, shares outstanding | 41,862,447 | 41,570,816 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 29, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
Net sales | $ 459.8 | $ 417.3 |
Cost of goods sold | 317 | 287.3 |
Gross profit | 142.8 | 130 |
Selling, general and administrative expenses | 167.1 | 155.8 |
Other income | 1 | 1.1 |
Operating loss | (23.3) | (24.7) |
Interest and other non-operating expenses, net | 7.7 | 9 |
Loss before taxes | (31) | (33.7) |
Income tax benefit | (13.5) | (9.6) |
Net loss | $ (17.5) | $ (24.1) |
Net loss per common share: | ||
Basic (in dollars per share) | $ (0.42) | $ (0.59) |
Diluted (in dollars per share) | $ (0.42) | $ (0.59) |
Weighted average number of common shares outstanding: | ||
Basic (in shares) | 41,766,317 | 40,964,224 |
Diluted (in shares) | 41,766,317 | 40,964,224 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 29, 2020 | Mar. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (17.5) | $ (24.1) |
Other comprehensive income (loss): | ||
Foreign currency translation adjustments | (0.9) | 0.2 |
Unrealized loss on interest rate swaps, net of taxes of $1.2 and $0.8, respectively | (3.8) | (2.2) |
Total other comprehensive loss | (4.7) | (2) |
Comprehensive loss | $ (22.2) | $ (26.1) |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 29, 2020 | Mar. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Unrealized gain (loss) on interest rate swaps, tax | $ 1.2 | $ 0.8 |
Consolidated Statements of Equi
Consolidated Statements of Equity (Unaudited) - USD ($) $ in Millions | Total | Common Stock | Additional Paid-in-Capital | Retained Earnings | Accumulated Other Comprehensive Loss |
Stockholders' equity, beginning balance (in shares) at Dec. 30, 2018 | 40,890,100 | ||||
Stockholders' equity, beginning balance at Dec. 30, 2018 | $ 301.8 | $ 0.4 | $ 242.1 | $ 60.1 | $ (0.8) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | (24.1) | (24.1) | |||
Other comprehensive loss | (2) | (2) | |||
Issuance of common shares under stock based compensation plan ( in shares) | 89,400 | ||||
Issuance of common shares under stock based compensation plan | 0.2 | 0.2 | |||
Stock based compensation | 1.8 | 1.8 | |||
Stockholders' equity, ending balance (in shares) at Mar. 31, 2019 | 40,979,500 | ||||
Stockholders' equity, ending balance at Mar. 31, 2019 | 277.7 | $ 0.4 | 244.1 | 36 | (2.8) |
Stockholders' equity, beginning balance (in shares) at Dec. 29, 2019 | 41,570,800 | ||||
Stockholders' equity, beginning balance at Dec. 29, 2019 | 393.2 | $ 0.4 | 261.5 | 137.8 | (6.5) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | (17.5) | (17.5) | |||
Other comprehensive loss | (4.7) | (4.7) | |||
Issuance of common shares under stock based compensation plan ( in shares) | 291,600 | ||||
Issuance of common shares under stock based compensation plan | 4 | 4 | |||
Stock based compensation | 2.5 | 2.5 | |||
Stockholders' equity, ending balance (in shares) at Mar. 29, 2020 | 41,862,400 | ||||
Stockholders' equity, ending balance at Mar. 29, 2020 | $ 377.5 | $ 0.4 | $ 268 | $ 120.3 | $ (11.2) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 29, 2020 | Mar. 31, 2019 | |
Cash Flows from Operating Activities: | ||
Net loss | $ (17.5) | $ (24.1) |
Adjustments to reconcile Net income to net cash used in operating activities: | ||
Amortization of finance lease right-of-use assets and depreciation | 7 | 6.8 |
Stock-based compensation | 2.5 | 1.8 |
Amortization of software and intangible assets | 9.3 | 8.6 |
Amortization of debt related costs | 0.5 | 0.5 |
Loss on extinguishment of debt | 0 | 0.4 |
Loss on sale of equipment | 0.1 | 0.1 |
Other | 0.4 | 0.7 |
Changes in operating assets and liabilities, net of the effects of acquisitions: | ||
Receivables | (10.9) | 21.1 |
Inventory | (112.5) | (88.1) |
Income tax receivable | (15.7) | (8.3) |
Prepaid expenses and other assets | (1.6) | 12.8 |
Accounts payable | 84.1 | 42.9 |
Accrued expenses and other liabilities | (11.3) | (23.7) |
Net Cash Used In Operating Activities | (65.6) | (48.5) |
Cash Flows from Investing Activities: | ||
Purchases of property and equipment | (4.6) | (6.4) |
Purchases of intangible assets | (1.1) | (0.2) |
Acquisitions, net of cash acquired | (45.2) | (12.8) |
Proceeds from the sale of property and equipment | 0.2 | 0.2 |
Net Cash Used In Investing Activities | (50.7) | (19.2) |
Cash Flows from Financing Activities: | ||
Equity proceeds from common stock | 5.7 | 0.6 |
Repayments under term loan | (1.1) | (2.2) |
Borrowings on asset-based credit facility | 179.6 | 140.5 |
Repayments on asset-based credit facility | (59.2) | (64.5) |
Payments of debt issuance costs | 0 | (0.9) |
Payments on finance lease obligations | (1.8) | (1.7) |
Payments of acquisition related contingent obligations | (2) | 0 |
Other financing activities | (1.6) | (0.4) |
Net Cash Provided By Financing Activities | 119.6 | 71.4 |
Effect of exchange rate on cash | (0.3) | 0.1 |
Net Change In Cash | 3 | 3.8 |
Cash and cash equivalents: | ||
Beginning | 19 | 17.3 |
Ending | 22 | 21.1 |
Supplemental Disclosures of Cash Flow Information: | ||
Cash paid during the year for interest | 6.7 | 8.9 |
Cash paid during the year for income taxes | $ 0.4 | $ 0.2 |
Nature of Business and Signific
Nature of Business and Significant Accounting Policies | 3 Months Ended |
Mar. 29, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business and Significant Accounting Policies | Nature of Business and Significant Accounting Policies Nature of Business SiteOne Landscape Supply, Inc. (hereinafter collectively with all its consolidated subsidiaries referred to as the “Company” or individually as “Holdings”) is a wholesale distributor of irrigation supplies, fertilizer and control products (e.g., herbicides), landscape accessories, nursery goods, hardscapes (including pavers, natural stone, and blocks), outdoor lighting, and ice melt products to green industry professionals. The Company also provides value-added consultative services to complement its product offering and to help customers operate and grow their businesses. Substantially all of the Company’s sales are to customers located in the United States of America (“U.S.”), with less than two percent of sales and total assets in Canada for all periods presented. As of March 29, 2020 , the Company had over 550 branches. Based on the nature of the Company’s products and customers’ business cycles, historically, sales have been significantly higher in the second and third quarters of each fiscal year. COVID-19 Pandemic As a result of the novel coronavirus (or COVID-19) pandemic, the Company could experience impacts including, but not limited to, charges from potential adjustments of the carrying amounts of receivables and inventory, goodwill and other asset impairment charges, and deferred tax valuation allowances. The extent to which the COVID-19 pandemic impacts the Company's business, results of operations, and financial condition will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to the duration, spread, and severity, of the COVID-19 pandemic, the effects of the COVID-19 pandemic on the Company's customers, suppliers, and vendors and the remedial actions and stimulus measures adopted by local and federal governments, and to what extent normal economic and operating conditions can resume. Even after the COVID-19 pandemic has subsided, the Company may experience an impact to its business as a result of any economic downturn, recession, or depression that has occurred or may occur in the future. Basis of Financial Statement Presentation The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) as applicable to interim financial reporting. In management’s opinion, the unaudited financial information for the interim periods presented includes all adjustments, consisting of normal recurring accruals necessary for a fair statement of the financial position, results of operations and cash flows. Certain information and disclosures normally included in our annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). These interim unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K filed with SEC for the fiscal year ended December 29, 2019 . The interim period unaudited financial results for the three -month periods presented are not necessarily indicative of results to be expected for any other interim period or for the entire year. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and accompanying notes. Actual results could differ materially from these estimates. Fiscal Year The Company’s fiscal year is a 52- or 53-week period ending on the Sunday nearest to December 31. The fiscal year ending January 3, 2021 and the fiscal year ended December 29, 2019 both include 52 weeks. The three months ended March 29, 2020 and March 31, 2019 both include 13 weeks. Principles of Consolidation The Company’s consolidated financial statements include the assets and liabilities used in operating the Company’s business, including entities in which the Company owns or controls more than 50% of the voting shares. All of the Company’s subsidiaries are wholly owned. All intercompany balances and transactions have been eliminated in consolidation. Significant Accounting Policies Except as updated by the Recently Issued and Adopted Accounting Pronouncements section below, a description of the Company’s significant accounting policies is included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 29, 2019 . Recently Issued and Adopted Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, “ Leases (Topic 842) ,” amended by subsequent ASUs (collectively “ASC 842”), which supersedes the guidance for recognition, measurement, presentation and disclosures of lease arrangements. The amended standard requires recognition on the balance sheet for all leases with terms longer than 12 months as a lease liability and as a right-of-use (“ROU”) asset. The lease liability is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and the ROU asset is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The Company adopted ASC 842 when it became effective in the first quarter of fiscal year 2019 using a modified transition approach under which prior comparative periods were not adjusted. The Company elected the package of practical expedients, which permitted not reassessing its prior conclusions about lease identification, lease classification, and initial direct costs. In addition, the Company made the election for certain classes of underlying assets to not separate non-lease components from lease components. However, the Company did not elect the lease term hindsight practical expedient. For leases less than 12 months, the Company made an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities as permitted by the guidance. The adoption of the new standard had a material impact on the Company’s Consolidated Balance Sheets, but an immaterial impact on its Consolidated Statements of Operations and Consolidated Statements of Cash Flows. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases, while the accounting for finance leases remained substantially unchanged. In February 2018, the FASB issued ASU 2018-02, “ Income Statement-Reporting Comprehensive Income (Topic 220) : Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income” (“ASU 2018-02”). The FASB provided ongoing guidance on certain accounting and tax effects of the legislation in the Tax Cuts and Jobs Act (the “2017 Tax Act”), which was enacted in December 2017. ASU 2018-02 allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the 2017 Tax Act. The amendments in ASU 2018-02 also required certain disclosures about stranded tax effects. The Company adopted ASU 2018-02 when it became effective in the first quarter of fiscal year 2019. The Company has elected to not reclassify stranded tax effects resulting from the 2017 Tax Act. The adoption of ASU 2018-02 did not have a material impact on the Company’s consolidated financial statements and related disclosures. In June 2018, the FASB issued ASU 2018-07, “ Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting ” (“ASU 2018-07”) which simplified the accounting for nonemployee share-based payment transactions by expanding the scope of ASC Topic 718, Compensation - Stock Compensation , to include share-based payment transactions for acquiring goods and services from nonemployees. Under the standard, most of the guidance on stock compensation payments to nonemployees was aligned with the requirements for share-based payments granted to employees. The Company adopted ASU 2018-07 when it became effective in the first quarter of fiscal year 2019. The adoption of ASU 2018-07 did not have a material impact on the Company’s consolidated financial statements and related disclosures. In August 2018, the FASB issued ASU 2018-15, “ Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force) ” (“ASU 2018-15”) which amends ASC 350-40 to address a customer’s accounting for implementation costs incurred in a cloud computing arrangement (“CCA”) that is a service contract. ASU 2018-15 amended ASC 350 and clarified that a customer should apply ASC 350-40 to determine which implementation costs should be capitalized in a CCA. The ASU did not expand on existing disclosure requirements except to require a description of the nature of hosting arrangements that are service contracts. Entities are permitted to apply either a retrospective or prospective transition approach to adopt the guidance. The Company early adopted the amended guidance on a prospective application basis during the first quarter of fiscal year 2019. The adoption of ASU 2018-15 did not have a material impact on the Company’s consolidated financial statements and related disclosures. In October 2018, the FASB issued ASU 2018-16, “ Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes ” (“ASU 2018-16”). ASU 2018-16 allows for the use of the OIS rate based on the SOFR as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815, Derivatives and Hedging . The Company adopted ASU 2018-16 when it became effective in the first quarter of fiscal year 2019. The adoption of ASU 2018-16 did not have a material impact on the Company’s consolidated financial statements and related disclosures. In July 2019, the FASB issued ASU 2019-07, “ Codification Updates to SEC Sections - Amendments to SEC Paragraphs Pursuant to SEC Final Rule Releases No. 33-10532, Disclosure Update and Simplification, and Nos. 33-10231 and 33-10442, Investment Company Reporting Modernization and Miscellaneous Updates (SEC Update) ” (“ASU 2019-07”). ASU 2019-07 clarifies or improves the disclosure and presentation requirements of a variety of codification topics by aligning them with the SEC’s regulations, thereby eliminating redundancies and making the codification easier to apply. ASU 2019-07 was effective upon issuance and did not have a material impact on the Company’s consolidated financial statements and related disclosures. In June 2016, the FASB issued ASU 2016-13, “ Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments ,” amended by subsequent ASUs (collectively, “ASU 2016-13”), which changes the way companies evaluate credit losses for most financial assets and certain other instruments. For trade and other receivables, held-to-maturity debt securities, loans and other instruments, entities will be required to use a new forward-looking “expected loss” model to evaluate impairment, potentially resulting in earlier recognition of allowances for losses. The new standard also requires enhanced disclosures, including the requirement to disclose the information used to track credit quality by year of origination for most financing receivables. The Company adopted the amended guidance when it became effective in the first quarter of fiscal year 2020. The adoption of ASU 2016-13 did not have a material impact on its consolidated financial statements and related disclosures. In August 2018, the FASB issued ASU 2018-13, “ Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement ” (“ASU 2018-13”) which changes the fair value measurement disclosure requirements of ASC 820. The ASU adds new disclosure requirements and eliminates and modifies existing disclosure requirements. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments in ASU 2018-13 should be applied retrospectively to all periods presented. The Company adopted ASU 2018-13 when it became effective in the first quarter of fiscal year 2020. The adoption of ASU 2018-13 did not have a material impact on its consolidated financial statements and related disclosures. Accounting Pronouncements Issued But Not Yet Adopted In December 2019, the FASB issued ASU 2019-12, “ Simplifying the Accounting for Income Taxes ” (“ASU 2019-12”). The amendments in ASU 2019-12 simplify the accounting for income taxes by removing certain exceptions to the general principles in ASC Topic 740, Income Taxes. The amendments also improve consistent application of and simplify U.S. GAAP for other areas of ASC Topic 740 by clarifying and amending existing guidance. ASU 2019-12 will be effective for the Company commencing in the first quarter of fiscal year 2021 with early adoption permitted. The transition requirements are dependent upon each amendment within this update and will be applied either prospectively or retrospectively. The Company is currently evaluating the amended guidance and the impact on its consolidated financial statements and related disclosures. In March 2020, the FASB issued ASU 2020-04, “ Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting ” (“ASU 2020-04”). The amendments provide optional guidance for a limited time to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts and hedging relationships that reference the London Interbank Offered Rate (LIBOR) or another reference rate expected to be discontinued due to reference rate reform. These amendments are effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The Company is currently evaluating the amended guidance and the impact on its consolidated financial statements and related disclosures. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 3 Months Ended |
Mar. 29, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Revenue from Contracts with Customers The following table presents Net sales disaggregated by product category: Three Months Ended March 29, 2020 March 31, 2019 Landscaping products (a) $ 320.2 $ 277.3 Agronomic and other products (b) 139.6 140.0 $ 459.8 $ 417.3 ______________ (a) Landscaping products include irrigation, nursery, hardscapes, outdoor lighting, and landscape accessories. (b) Agronomic and other products include fertilizer, control products, ice melt, equipment, and other products. Remaining Performance Obligations Remaining performance obligations related to ASC 606 represent the aggregate transaction price allocated to performance obligations with an original contract term greater than one year which are fully or partially unsatisfied at the end of the period. Remaining performance obligations include the outstanding points balance related to the customer loyalty reward program. The program allows enrolled customers to earn loyalty rewards on purchases to be used on future purchases, to pay for annual customer trips hosted by the Company, or to obtain gift cards to other third-party retailers. As of March 29, 2020 , the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $5.4 million . The Company expects to recognize revenue on the remaining performance obligations over the next 12 months. Contract Balances The timing of revenue recognition, billings, and cash collections results in billed accounts receivable, deferred revenue, and billings in excess of revenue recognized in the Company’s Consolidated Balance Sheets. Contract liabilities As of March 29, 2020 and December 29, 2019 , contract liabilities were $5.4 million and $6.5 million , respectively, and are included within Accrued liabilities in the accompanying Consolidated Balance Sheets. The decrease in the contract liability balance during the three months ended March 29, 2020 is primarily a result of the $3.0 million of revenue recognized and the expiration of points related to the customer loyalty reward program during the period, partially offset by cash payments received in advance of satisfying performance obligations. |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 29, 2020 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions From time to time the Company enters into strategic acquisitions in an effort to better service existing customers and to attract new customers. The Company completed the following acquisitions for an aggregate purchase price of approximately $44.8 million and $12.7 million , and deferred contingent consideration of $6.2 million and zero for the three months ended March 29, 2020 and March 31, 2019 , respectively. • In March 2020, the Company acquired the assets and assumed the liabilities of Big Rock Natural Stone and Hardscapes, Inc. (“Big Rock”). With one location in the greater Greenville, South Carolina market, Big Rock is a distributor of hardscapes and landscape supplies to landscape professionals. • In January 2020, the Company acquired the assets and assumed the liabilities of The Garden Dept. Corp. (“Garden Dept.”). With three locations in the greater Long Island, New York market, Garden Dept. is a distributor of nursery and landscape supplies to landscape professionals. • In January 2020, the Company acquired the assets and assumed the liabilities of Empire Supplies (“Empire”). With three locations in the greater Newark-Union, New Jersey market, Empire is a distributor of hardscapes and landscape supplies to landscape professionals. • In January 2020, the Company acquired the assets and assumed the liabilities of Wittkopf Landscape Supply (“Wittkopf”). With two locations in the Spokane Valley, Washington market, Wittkopf is a distributor of hardscapes and landscape supplies to landscape professionals. • In December 2019, the Company acquired the assets and assumed the liabilities of Daniel Stone & Landscaping Supplies, Inc. (“Daniel Stone”). With one location in the greater Austin, Texas market, Daniel Stone is a distributor of hardscapes and landscape supplies to landscape professionals. • In December 2019, the Company acquired all of the members’ interests of Dirt Doctors, Inc. (“Dirt Doctors”). With three locations in the greater New England market, Dirt Doctors is a distributor of hardscapes and landscape supplies to landscape professionals. • In September 2019, the Company acquired the assets and assumed the liabilities of Design Outdoor, Inc. (“Design Outdoor”). With one location in the greater Reno/Lake Tahoe, Nevada area, Design Outdoor is a distributor of hardscapes products to landscape professionals. • In August 2019, the Company acquired the assets and assumed the liabilities of Trendset Concrete Products, Inc. (“Trendset”). With one location in the Greater Seattle, Washington market, Trendset is a distributor of hardscapes products to landscape professionals. • In July 2019, the Company acquired the assets and assumed the liabilities of L.H. Voss Materials Dublin and its affiliates, Mt. Diablo Landscape Centers and Clark’s Home & Garden (collectively, “Voss”). With five locations across the East Bay in Northern California, Voss is a distributor of hardscapes and landscape supplies to landscape professionals. • In May 2019, the Company acquired the assets and assumed the liabilities of Stone and Soil Depot, Inc. (“Stone and Soil”). With three locations in the Greater San Antonio, Texas market, Stone and Soil is a market leader in the distribution of hardscapes and landscape supplies to landscape professionals. • In April 2019, the Company acquired the assets and assumed the liabilities of Fisher’s Landscape Depot (“Fisher’s”). With two locations in Western Ontario, Canada, Fisher’s is a market leader in the distribution of hardscapes and landscape supplies to landscape professionals. • In April 2019, the Company acquired the assets and assumed the liabilities of Landscape Depot, Inc. (“Landscape Depot”). With three locations in the Greater Boston, Massachusetts market, Landscape Depot is a market leader in the distribution of hardscapes and landscape supplies to landscape professionals. • In February 2019, the Company acquired the assets and assumed the liabilities of All Pro Horticulture, Inc. (“All Pro”). With one location in Long Island, New York, All Pro is a market leader in the distribution of agronomics and erosion control products to landscape professionals. • In January 2019, the Company acquired the assets and assumed the liabilities of Cutting Edge Curbing Sand & Rock (“Cutting Edge”). With one location in Phoenix, Arizona, Cutting Edge is a market leader in the distribution of hardscapes and landscape supplies to landscape professionals. These transactions were accounted for by the acquisition method, and accordingly, the results of operations are included in the Company’s consolidated financial statements from their respective acquisition dates. |
Fair Value Measurement and Inte
Fair Value Measurement and Interest Rate Swaps | 3 Months Ended |
Mar. 29, 2020 | |
Fair Value Disclosures and Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair Value Measurement and Interest Rate Swaps | Fair Value Measurement and Interest Rate Swaps Fair value is defined as an exit price, representing an amount that would be received to sell an asset or the amount paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The inputs used to measure fair value are prioritized into the following three-tiered value hierarchy: • Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities. • Level 2: Unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active or inputs, other than quoted prices in active markets, which are observable either directly or indirectly. • Level 3: Unobservable inputs for which there is little or no market data. The hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The classification of fair value measurement within the hierarchy is based upon the lowest level of input that is significant to the measurement. The Company’s financial instruments consist of cash and cash equivalents, accounts receivables, forward-starting interest rate swap contracts and long-term debt. The variable interest rate on the long-term debt is reflective of current market borrowing rates. As such, the Company has determined that the carrying value of these financial instruments approximates fair value. Interest Rate Swaps The Company is subject to interest rate risk with regard to existing and future issuances of debt. The Company utilizes interest rate swap contracts to reduce its exposure to fluctuations in variable interest rates for future interest payments on existing debt. The Company is party to various forward-starting interest rate swap contracts to convert the variable interest rate to a fixed interest rate on portions of the borrowings under the Term Loan Facility. The following table provides additional details related to the swap contracts: Derivatives designated as hedging instruments Inception Date Effective Date Maturity Date Notional Amount Fixed Interest Rate Type of Hedge Forward-starting interest rate swap 1 June 30, 2017 March 11, 2019 June 11, 2021 $ 58.0 2.1345 % Cash flow Forward-starting interest rate swap 2 June 30, 2017 March 11, 2019 June 11, 2021 116.0 2.1510 % Cash flow Forward-starting interest rate swap 3 December 17, 2018 July 14, 2020 January 14, 2024 34.0 2.9345 % Cash flow Forward-starting interest rate swap 4 December 24, 2018 January 14, 2019 January 14, 2023 50.0 2.7471 % Cash flow Forward-starting interest rate swap 5 December 26, 2018 January 14, 2019 January 14, 2023 90.0 2.7250 % Cash flow Forward-starting interest rate swap 6 May 30, 2019 July 15, 2019 January 14, 2023 70.0 2.1560 % Cash flow The Company recognizes the unrealized gains or unrealized losses as either assets or liabilities at fair value on its Consolidated Balance Sheets. The forward-starting interest rate swap contracts are subject to master netting arrangements. The Company has elected not to offset the fair value of assets with the fair value of liabilities related to these contracts. The following table summarizes the fair value of the derivative instruments and the respective lines in which they were recorded in the Consolidated Balance Sheets as of March 29, 2020 and December 29, 2019 (in millions): Derivative Assets Derivative Liabilities March 29, 2020 December 29, 2019 March 29, 2020 December 29, 2019 Balance Sheet Location Fair Value Balance Sheet Location Fair Value Balance Sheet Location Fair Value Balance Sheet Location Fair Value Derivatives designated as hedging instruments Interest rate contracts Prepaid expenses and other current assets $ — Prepaid expenses and other current assets $ — Accrued liabilities $ 4.6 Accrued liabilities $ 2.1 Other assets — Other assets — Other long-term liabilities 7.8 Other long-term liabilities 5.3 Total derivatives $ — $ — $ 12.4 $ 7.4 For determining the fair value of the interest rate swap contracts, the Company uses significant observable market data or assumptions (Level 2 inputs) that market participants would use in pricing similar assets or liabilities, including assumptions about counterparty risk. The fair value estimates reflect an income approach based on the terms of the interest rate swap contracts and inputs corroborated by observable market data including interest rate curves. The Company recognizes any differences between the variable interest rate payments and the fixed interest rate settlements with the swap counterparties as an adjustment to interest expense over the life of the swaps. The Company has designated these swaps as cash flow hedges and records the estimated fair value of the swaps to Accumulated other comprehensive income (loss) (“AOCI”) on its Consolidated Balance Sheets. For the three months ended March 29, 2020 and March 31, 2019 , there was no ineffectiveness recognized in earnings. The after-tax amount of unrealized loss on derivative instruments included in Accumulated other comprehensive loss related to the forward-starting interest rate swap contracts maturing and expected to be reclassified to earnings during the next twelve months was $3.4 million as of March 29, 2020 . The ultimate amount recognized will vary based on fluctuations of interest rates through the maturity dates. The table below details pre-tax amounts in AOCI and gain (loss) reclassified into income for derivatives designated as cash flow hedges for the three months ended March 29, 2020 and March 31, 2019 (in millions): Three Months Ended March 29, 2020 March 31, 2019 Gain (Loss) Recorded in OCI Classification of Gain (Loss) Reclassified from AOCI into Income Gain (Loss) Reclassified from AOCI into Income Gain (Loss) Recorded in OCI Classification of Gain (Loss) Reclassified from AOCI into Income Gain (Loss) Reclassified from AOCI into Income Derivatives in Cash Flow Hedging Relationships Interest rate contracts $ (5.0 ) Interest and other non-operating expenses, net $ (0.6 ) $ (3.0 ) Interest and other non-operating expenses, net $ 0.1 Failure of the swap counterparties to make payments would result in the loss of any potential benefit to the Company under the swap agreements. In this case, the Company would still be obligated to pay the variable interest payments underlying the debt agreements. Additionally, failure of the swap counterparties would not eliminate the Company’s obligation to continue to make payments under the existing swap agreements if it continues to be in a net pay position. |
Property and Equipment, Net
Property and Equipment, Net | 3 Months Ended |
Mar. 29, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Property and Equipment, Net Property and equipment consisted of the following (in millions): March 29, 2020 December 29, 2019 Land $ 12.2 $ 12.2 Buildings and leasehold improvements: Buildings 7.8 7.8 Leasehold improvements 26.8 25.5 Branch equipment 49.3 47.9 Office furniture and fixtures and vehicles: Office furniture and fixtures 20.6 21.4 Vehicles 32.7 30.2 Finance lease right-of-use assets 52.8 46.3 Tooling 0.1 0.1 Construction in progress 3.3 2.9 Total property and equipment, gross 205.6 194.3 Less: accumulated depreciation and amortization 93.7 89.4 Total property and equipment, net $ 111.9 $ 104.9 Amortization of finance ROU assets and depreciation expense was approximately $7.0 million for the three months ended March 29, 2020 , and $6.8 million for the three months ended March 31, 2019 , respectively. Capitalized software has an estimated useful life of three years . The amounts of total capitalized software costs, including purchased and internally developed software, included in Other assets as of March 29, 2020 and December 29, 2019 were approximately $11.1 million and $10.9 million , less accumulated amortization of approximately $7.8 million and $7.4 million , respectively. Amortization of these software costs was approximately $0.6 million and $0.5 million for the three months ended March 29, 2020 and March 31, 2019 , respectively. |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 3 Months Ended |
Mar. 29, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, Net | Goodwill and Intangible Assets, Net Goodwill The changes in the carrying amount of goodwill were as follows (in millions): December 30, 2019 to March 29, 2020 Beginning balance $ 181.3 Goodwill acquired during the period 25.9 Goodwill adjusted during the period (0.2 ) Ending balance $ 207.0 Additions to goodwill during the three months ended March 29, 2020 related to the acquisitions completed in 2020 as described in Note 3. Intangible Assets Intangible assets include customer relationships, and trademarks and other intangibles. Intangible assets with finite useful lives are amortized on an accelerated method or a straight-line method of amortization over their estimated useful lives. An accelerated amortization method reflecting the pattern in which the asset will be consumed is utilized if that pattern can be reliably determined. If that pattern cannot be reliably determined, a straight-line amortization method is used. The Company considers the period of expected cash flows and underlying data used to measure the fair value of the intangible assets when selecting a useful life. During the three months ended March 29, 2020 , the Company recorded $20.9 million of intangible assets which related to customer relationships, and trademarks and other, primarily as a result of the acquisitions completed in 2020 as described in Note 3 and adjustments to purchase price allocations related to prior year acquisitions during the allowable measurement period. The customer relationship intangible assets will be amortized over a weighted-average period of approximately 20 years. The trademarks and other intangible assets recorded will be amortized over a weighted-average period of approximately five years . The following table summarizes the components of intangible assets (in millions, except weighted average remaining useful life): March 29, 2020 December 29, 2019 Weighted Average Remaining Useful Life (Years) Amount Accumulated Amortization Net Amount Accumulated Amortization Net Customer relationships 17.0 $ 287.7 $ 132.3 $ 155.4 $ 267.9 $ 124.4 $ 143.5 Trademarks and other 3.4 18.1 10.7 7.4 17.0 9.9 7.1 Total intangible assets $ 305.8 $ 143.0 $ 162.8 $ 284.9 $ 134.3 $ 150.6 Amortization expense for intangible assets was approximately $8.7 million for the three months ended March 29, 2020 , and $8.1 million for the three months ended March 31, 2019 , respectively. Total future amortization estimated as of March 29, 2020 , is as follows (in millions): Fiscal year ending: 2020 (remainder) $ 24.7 2021 27.9 2022 22.9 2023 18.3 2024 14.3 Thereafter 54.7 Total future amortization $ 162.8 |
Leases
Leases | 3 Months Ended |
Mar. 29, 2020 | |
Leases [Abstract] | |
Leases | Leases The Company determines if an arrangement is a lease at inception of a contract. The Company leases equipment and real estate including office space, branch locations, and distribution centers under operating leases. Finance lease obligations consist primarily of the Company’s vehicle fleet. Most leases include one or more options to renew, with renewal terms that can extend the lease term from 1 to 5 years or more. The exercise of lease renewal options is at the Company’s sole discretion. Certain leases include options to purchase the leased property. The lease agreements do not contain any material residual value guarantees or material restrictive covenants. Leases with an initial term of 12 months or less are not recorded in the Consolidated Balance Sheets. The Company accounts for each separate lease component of a contract and its associated non-lease components as a single lease component. Variable lease payment amounts that cannot be determined at the commencement of the lease such as increases in lease payments based on changes in index rates or usage, are not included in the ROU assets or lease liabilities and are expensed as incurred and recorded as variable lease expense. ROU assets represent the Company's right to use an underlying asset during the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at commencement date based on the net present value of fixed lease payments over the lease term. ROU assets also include any advance lease payments and are adjusted for lease incentives. As most of the Company's operating leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Finance lease agreements generally include an interest rate that is used to determine the present value of future lease payments. Operating fixed lease expense and finance lease amortization expense are recognized on a straight-line basis over the lease term. The components of lease expense were as follows (in millions): Three Months Ended Lease cost Classification March 29, 2020 March 31, 2019 Finance lease cost Amortization of right-of-use assets Selling, general and administrative expenses $ 2.0 $ 1.8 Interest on lease liabilities Interest and other non-operating expenses, net 0.3 0.2 Operating lease cost Cost of goods sold 0.8 0.8 Operating lease cost Selling, general and administrative expenses 16.0 14.8 Short-term lease cost Selling, general and administrative expenses 0.4 0.4 Variable lease cost Selling, general and administrative expenses 0.2 0.1 Sublease income Selling, general and administrative expenses (0.3 ) (0.1 ) Total lease cost $ 19.4 $ 18.0 Supplemental cash flow information related to leases was as follows (in millions): Three Months Ended Other information March 29, 2020 March 31, 2019 Cash paid for amounts included in the measurements of lease liabilities Operating cash flows from finance leases $ 0.3 $ 0.2 Operating cash flows from operating leases $ 16.5 $ 15.0 Financing cash flows from finance leases $ 1.8 $ 1.7 Right-of-use assets obtained in exchange for new lease liabilities Finance leases $ 6.6 $ 3.3 Operating leases $ 21.5 $ 10.6 The aggregate future lease payments for operating and finance leases as of March 29, 2020 were as follows (in millions): Maturity of Lease Liabilities Operating Leases Finance Leases Fiscal year: 2020 (remainder) $ 42.7 $ 6.8 2021 57.9 8.4 2022 47.5 6.7 2023 37.2 5.0 2024 27.9 2.6 2025 18.4 0.4 Thereafter 73.6 — Total lease payments 305.2 29.9 Less: interest 61.5 2.3 Present value of lease liabilities $ 243.7 $ 27.6 Average lease terms and discount rates were as follows: Lease Term and Discount Rate March 29, 2020 Weighted-average remaining lease term (years) Finance leases 3.8 Operating leases 7.0 Weighted-average discount rate Finance leases 4.4 % Operating leases 5.9 % |
Leases | Leases The Company determines if an arrangement is a lease at inception of a contract. The Company leases equipment and real estate including office space, branch locations, and distribution centers under operating leases. Finance lease obligations consist primarily of the Company’s vehicle fleet. Most leases include one or more options to renew, with renewal terms that can extend the lease term from 1 to 5 years or more. The exercise of lease renewal options is at the Company’s sole discretion. Certain leases include options to purchase the leased property. The lease agreements do not contain any material residual value guarantees or material restrictive covenants. Leases with an initial term of 12 months or less are not recorded in the Consolidated Balance Sheets. The Company accounts for each separate lease component of a contract and its associated non-lease components as a single lease component. Variable lease payment amounts that cannot be determined at the commencement of the lease such as increases in lease payments based on changes in index rates or usage, are not included in the ROU assets or lease liabilities and are expensed as incurred and recorded as variable lease expense. ROU assets represent the Company's right to use an underlying asset during the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at commencement date based on the net present value of fixed lease payments over the lease term. ROU assets also include any advance lease payments and are adjusted for lease incentives. As most of the Company's operating leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Finance lease agreements generally include an interest rate that is used to determine the present value of future lease payments. Operating fixed lease expense and finance lease amortization expense are recognized on a straight-line basis over the lease term. The components of lease expense were as follows (in millions): Three Months Ended Lease cost Classification March 29, 2020 March 31, 2019 Finance lease cost Amortization of right-of-use assets Selling, general and administrative expenses $ 2.0 $ 1.8 Interest on lease liabilities Interest and other non-operating expenses, net 0.3 0.2 Operating lease cost Cost of goods sold 0.8 0.8 Operating lease cost Selling, general and administrative expenses 16.0 14.8 Short-term lease cost Selling, general and administrative expenses 0.4 0.4 Variable lease cost Selling, general and administrative expenses 0.2 0.1 Sublease income Selling, general and administrative expenses (0.3 ) (0.1 ) Total lease cost $ 19.4 $ 18.0 Supplemental cash flow information related to leases was as follows (in millions): Three Months Ended Other information March 29, 2020 March 31, 2019 Cash paid for amounts included in the measurements of lease liabilities Operating cash flows from finance leases $ 0.3 $ 0.2 Operating cash flows from operating leases $ 16.5 $ 15.0 Financing cash flows from finance leases $ 1.8 $ 1.7 Right-of-use assets obtained in exchange for new lease liabilities Finance leases $ 6.6 $ 3.3 Operating leases $ 21.5 $ 10.6 The aggregate future lease payments for operating and finance leases as of March 29, 2020 were as follows (in millions): Maturity of Lease Liabilities Operating Leases Finance Leases Fiscal year: 2020 (remainder) $ 42.7 $ 6.8 2021 57.9 8.4 2022 47.5 6.7 2023 37.2 5.0 2024 27.9 2.6 2025 18.4 0.4 Thereafter 73.6 — Total lease payments 305.2 29.9 Less: interest 61.5 2.3 Present value of lease liabilities $ 243.7 $ 27.6 Average lease terms and discount rates were as follows: Lease Term and Discount Rate March 29, 2020 Weighted-average remaining lease term (years) Finance leases 3.8 Operating leases 7.0 Weighted-average discount rate Finance leases 4.4 % Operating leases 5.9 % |
Employee Benefit and Stock Ince
Employee Benefit and Stock Incentive Plans | 3 Months Ended |
Mar. 29, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Employee Benefit and Stock Incentive Plans | Employee Benefit and Stock Incentive Plans The Company sponsors a defined contribution benefit plan for substantially all of its employees. Company contributions to the plan are based on a percentage of employee wages. The Company’s contributions to the plan were approximately $2.7 million for the three months ended March 29, 2020 , and $2.6 million for the three months ended March 31, 2019 . The Company’s Omnibus Equity Incentive Plan (the “Omnibus Incentive Plan”), which became effective on April 28, 2016, provides for the grant of awards in the form of stock options, which may be either incentive stock options or non-qualified stock options; stock purchase rights; restricted stock; restricted stock units (“RSUs”); performance shares; performance stock units (“PSUs”); stock appreciation rights (“SARs”); dividend equivalents; deferred stock units (“DSUs”); and other stock-based awards. The Company also has outstanding stock-based awards under its stock incentive plan (“Stock Incentive Plan”) which commenced in May 2014 and terminated upon adoption of the Omnibus Incentive Plan. However, awards previously granted under the Stock Incentive Plan were unaffected by the termination of the Stock Incentive Plan. Any shares covered by an award, or any portion thereof, granted under the Omnibus Incentive Plan or Stock Incentive Plan that terminates, is forfeited, is repurchased, expires or lapses for any reason will again be available for the grant of awards. Additionally, any shares tendered or withheld to satisfy the grant or exercise price or tax withholding obligations pursuant to any award under the Omnibus Incentive Plan will again be available for issuance. The aggregate number of shares which may be issued under the Omnibus Incentive Plan is 2,000,000 shares of which 563,176 remain available as of March 29, 2020 . The stock options and RSUs granted to employees vest over a four -year period at 25% per year. The DSUs granted to non-employee directors vest immediately but settlement is deferred until termination of the director’s service on the board or until a change of control of the Company. Stock options and RSUs expire ten years after the date of grant. PSUs granted to employees vest upon the achievement of the performance conditions, over a three-year period , measured by the growth of the Company’s pre-tax income plus amortization relative to a select peer group, subject to adjustment based upon the application of a return on invested capital modifier. The fair value of each stock option is estimated on the date of grant using the Black-Scholes options pricing model. The DSUs, RSUs and PSUs have grant date fair values equal to the fair market value of the underlying stock on the date of grant. Share-based compensation expense is recognized in the financial statements based upon fair value on the date of grant. The compensation cost for stock options and RSUs is recognized on a straight-line basis over the requisite vesting period. The Company recognizes compensation expense for PSUs when it is probable that the performance conditions will be achieved. The Company reassesses the probability of vesting at each reporting period and adjusts its compensation cost accordingly. A summary of stock-based compensation activities during the three months ended March 29, 2020 was as follows (in thousands): Stock Options RSUs DSUs PSUs Outstanding as of December 29, 2019 1,998.8 148.5 32.8 28.4 Granted 137.0 72.0 0.3 16.9 Exercised/Vested/Settled (265.6 ) (41.4 ) — — Expired or forfeited (15.2 ) (4.3 ) — (1.1 ) Outstanding as of March 29, 2020 1,855.0 174.8 33.1 44.2 The weighted average grant date fair value of awards granted during the three months ended March 29, 2020 was as follows: Weighted Average Stock options $ 26.04 RSUs $ 101.77 DSUs $ 70.12 PSUs $ 101.87 A summary of stock-based compensation expenses recognized during the periods was as follows (in millions): Three Months Ended Three Months Ended March 29, 2020 March 31, 2019 Stock options $ 1.2 $ 1.1 RSUs 0.9 0.5 DSUs 0.2 0.1 PSUs 0.2 0.1 Total stock-based compensation $ 2.5 $ 1.8 A summary of unrecognized stock-based compensation expense as of March 29, 2020 was as follows: Unrecognized Compensation Weighted Average Stock options $ 9.9 2.75 RSUs $ 12.1 3.28 DSUs $ 0.3 1.29 PSUs $ 2.5 2.42 |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 29, 2020 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Long-term debt was as follows (in millions): March 29, 2020 December 29, 2019 ABL facility $ 213.1 $ 92.8 Term loan facility 440.7 441.8 Total gross long-term debt 653.8 534.6 Less: unamortized debt issuance costs and discounts on debt (9.2 ) (9.7 ) Total debt $ 644.6 $ 524.9 Less: current portion (4.5 ) (4.5 ) Total long-term debt $ 640.1 $ 520.4 ABL Facility SiteOne Landscape Supply Holding, LLC (“Landscape Holding”) and SiteOne Landscape Supply, LLC (“Landscape,” and together with Landscape Holding, the “Borrowers”), each an indirect wholly-owned subsidiary of the Company, are parties to the credit agreement dated December 23, 2013 (as amended by the First Amendment to the Credit Agreement, dated June 13, 2014, the Second Amendment to the Credit Agreement, dated January 26, 2015, the Third Amendment to the Credit Agreement, dated February 13, 2015, the Fourth Amendment to the Credit Agreement, dated October 20, 2015, the Omnibus Amendment to the Credit Agreement, dated May 24, 2017, and the Sixth Amendment to the Credit Agreement, dated February 1, 2019, the “ABL Credit Agreement”) providing for an asset-based credit facility (the “ABL Facility”) of up to $375.0 million , subject to borrowing base availability. The ABL Facility is secured by a first lien on the inventory and receivables of the Borrowers. The ABL Facility is guaranteed by SiteOne Landscape Supply Bidco, Inc. (“Bidco”), an indirect wholly-owned subsidiary of the Company, and each direct and indirect wholly-owned U.S. restricted subsidiary of Landscape. The availability under the ABL Facility was $155.0 million and $263.4 million as of March 29, 2020 and December 29, 2019 , respectively. Availability is determined using borrowing base calculations of eligible inventory and receivable balances less the current outstanding ABL Facility and letters of credit balances. On February 1, 2019, the Company entered into the Sixth Amendment to Credit Agreement, to among other things, (i) extend the termination date to February 1, 2024, (ii) increase the aggregate principal amount of the commitments under the ABL Credit Agreement to $375.0 million pursuant to an increase via use of the existing “incremental” provisions of the ABL Credit Agreement, and (iii) amend certain terms of the ABL Credit Agreement and Guarantee and Collateral Agreement. The interest rate on the ABL Facility is LIBOR plus an applicable margin ranging from 1.25% to 1.75% or an alternate base rate for U.S. denominated borrowings plus an applicable margin ranging from 0.25% to 0.75% . The interest rates on outstanding balances ranged from 2.86% to 3.50% as of March 29, 2020 and was 3.21% as of December 29, 2019 , respectively. Additionally, the Borrowers paid a commitment fee of 0.25% and 0.25% on the unfunded amount as of March 29, 2020 and December 29, 2019 , respectively. The ABL Facility is subject to mandatory prepayments if the outstanding loans and letters of credit exceed either the aggregate revolving commitments or the current borrowing base, in an amount equal to such excess. Additionally, the ABL Facility is subject to various covenants requiring minimum financial ratios and additional borrowings may be limited by these financial ratios. Failure to meet any of these covenants could result in an event of default under these agreements. If an event of default occurs the lenders could elect to declare all amounts outstanding under these agreements to be immediately due and payable, enforce their interest in collateral pledged under the agreement, or restrict the Borrowers’ ability to obtain additional borrowings under these agreements. The ABL Facility contains customary representations and warranties and customary affirmative and negative covenants. The negative covenants consist of the following: fundamental changes, dividends and distributions, acquisitions, collateral, payments and modifications of restricted indebtedness, negative pledge clauses, changes in line of business, currency, commodity and other hedging transactions, transactions with affiliates, investments, limitations on indebtedness, and liens. The negative covenants are subject to the customary exceptions and also permit the payment of dividends and distributions, investments, permitted acquisitions and payments or redemptions of junior indebtedness upon satisfaction of a payment condition. As of March 29, 2020 , the Company is in compliance with all of the ABL Facility covenants. Term Loan Facility The Borrowers entered into a syndicated senior term loan facility dated April 29, 2016, which was amended on November 23, 2016, May 24, 2017, December 12, 2017 and August 14, 2018 (the “Term Loan Facility”). The Term Loan Facility is guaranteed by Bidco and each direct and indirect wholly-owned U.S. restricted subsidiary of Landscape. The Term Loan Facility has a first lien on Property and equipment, Intangibles, and equity interests of Landscape, and a second lien on ABL Facility assets. In connection with the amendment on August 14, 2018, the final maturity date of the Term Loan Facility was extended to October 29, 2024. Term Loan Facility Amendments On August 14, 2018, the Company amended the Term Loan Facility (the “Fourth Amendment”) to, among other things, (i) add an additional credit facility under the Term Loan Facility consisting of additional term loans (the “Tranche E Term Loans”) in an aggregate principal amount of $347.4 million and (ii) increase the aggregate principal amount of Tranche E Term Loans under the Term Loan Facility to $447.4 million . Proceeds of the Tranche E Term Loans were used to, among other things, (i) repay in full the Tranche D Term Loans and (ii) repay approximately $96.8 million of borrowings outstanding under the ABL Facility. The Tranche E Term Loans bear interest, at Landscape Holding’s option, at either (i) an adjusted LIBOR rate (as defined in the Term Loan Facility) plus an applicable margin equal to 2.75% or (ii) an alternative base rate plus an applicable margin equal to 1.75% . The other terms of the Tranche E Term Loans are generally the same as the terms applicable to the previously existing term loans under the Term Loan Facility, provided that certain terms of the Term Loan Facility were modified by the Fourth Amendment. The interest rate on the outstanding balance was 4.36% at March 29, 2020 . The Term Loan Facility contains customary representations and warranties and customary affirmative and negative covenants, which fully restrict retained earnings of the Borrowers. The negative covenants are limited to the following: limitations on indebtedness, restricted payments, restrictive agreements, sales of assets and subsidiary stock, transactions with affiliates, liens, fundamental changes, amendments, lines of business, and limitations on certain actions of the parent borrower. The negative covenants are subject to the customary exceptions. The Term Loan Facility is payable in consecutive quarterly installments equal to 0.25% of the aggregate initial principal amount of the Tranche E Term Loans until the maturity date. In addition, the Term Loan Facility is subject to annual mandatory prepayments in an amount equal to 50% of excess cash flow, as defined in the Term Loan Credit Agreement for the applicable fiscal year if 50% of excess cash flow exceeds $10.0 million and the secured leverage ratio is greater than 3.00 to 1.00. As of March 29, 2020 , the Company is in compliance with all of the Term Loan Facility covenants. During the three months ended March 29, 2020 , the Company incurred total interest expense of $7.7 million . Of this total, $6.9 million related to interest on the ABL Facility and the Term Loan Facility for the three months ended March 29, 2020 . The debt issuance costs and discounts are amortized as interest expense over the life of the debt. Amortization expense related to debt issuance costs and discounts were $0.5 million for the three months ended March 29, 2020 . The remaining $0.3 million of interest is primarily related to interest attributable to finance leases for the three months ended March 29, 2020 . During the three months ended March 31, 2019, the Company incurred total interest expense of $9.0 million . Of this total, $7.9 million related to interest on the ABL Facility and the Term Loan Facility. The debt issuance costs and discounts are amortized as interest expense over the life of the debt. As a result of the Sixth Amendment of the ABL Facility, unamortized debt issuance costs and discounts in the amount of $0.4 million were written off to expense and new debt fees and issuance costs of $0.9 million were capitalized during the three months ended March 31, 2019. Amortization expense related to debt issuance costs and discounts were $0.5 million . The remaining $0.2 million interest expense primarily related to interest attributable to finance leases. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 29, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company’s effective tax rate was approximately 43.5% for the three months ended March 29, 2020 and 28.5% for the three months ended March 31, 2019 . The beneficial change in the effective rate was due primarily to an increase in the amount of excess tax benefits from stock-based compensation recognized as a component of Income tax benefit in the Company’s Consolidated Statements of Operations. The Company recognized excess tax benefits of $5.5 million for the three months ended March 29, 2020 and $0.8 million for the three months ended March 31, 2019 . The Company’s effective tax rate differs from its statutory rate based on a variety of factors, including overall profitability, the geographical mix of income taxes, and the related tax rates in the jurisdictions in which it operates. In accordance with the provisions of ASC Topic 740, Income Taxes , the Company provides a valuation allowance against deferred tax assets when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The assessment considers all available positive and negative evidence and is measured quarterly. The Company maintains a valuation allowance against certain state deferred tax assets where sufficient negative evidence exists to require a valuation allowance. During the three months ended March 29, 2020 and March 31, 2019 , the Company recorded no |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 29, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Environmental liability : As part of the sale by LESCO, Inc. of its manufacturing assets in 2005, the Company retained the environmental liability associated with those assets. Remediation activities can vary substantially in duration and cost and it is difficult to develop precise estimates of future site remediation costs. The Company estimated in accrued liabilities the undiscounted cost of future remediation efforts to be approximately $3.6 million and $3.6 million as of March 29, 2020 and December 29, 2019 , respectively. The Company’s exposure is capped at $2.4 million . The Company has recorded an indemnification asset in Other Assets against the liability as a result of these actions of approximately $1.2 million and $1.2 million as of March 29, 2020 and December 29, 2019 , respectively. Letters of credit : As of March 29, 2020 and December 29, 2019 , outstanding letters of credit were $6.9 million and $5.3 million , respectively. There were no amounts drawn on the letters of credit for either period presented. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 3 Months Ended |
Mar. 29, 2020 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | Earnings (Loss) Per Share The Company computes basic earnings (loss) per share (“EPS”) by dividing Net income (loss) attributable to common shares by the weighted average number of common shares outstanding for the period. The Company includes vested DSUs in the basic weighted average number of common shares calculation. The Company’s computation of diluted EPS reflects the potential dilution that could occur if dilutive securities or other obligations to issue common stock were exercised or converted into common stock, which include in-the-money outstanding stock options and RSUs. PSUs are excluded from the calculation of dilutive potential common shares until the performance conditions have been achieved. Using the treasury stock method, the effect of dilutive securities includes the additional shares of common stock that would have been outstanding based on the assumption that these potentially dilutive securities had been issued. The calculation of the effect of dilutive securities excludes any derived excess tax benefits or deficiencies from assumed future proceeds. RSUs and stock options with exercise prices that are higher than the average market prices of our common stock for the periods presented are excluded from the diluted EPS calculation because the effect is anti-dilutive. For the three months ended March 29, 2020 and March 31, 2019 , the assumed exercises of a portion of the Company’s employee stock options and RSUs were anti-dilutive and, therefore, the following potential shares of common stock were not included in the diluted earnings (loss) per common share calculation: Three Months Ended March 29, 2020 March 31, 2019 Weighted average potential common shares excluded because anti-dilutive Employee stock options and RSUs 2,099,487 2,720,452 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 29, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On April 1, 2020, the Company borrowed approximately $100 million under the ABL Facility, resulting in approximately $319 million outstanding. The Company elected to borrow such amount as a precautionary measure in order to increase its cash position and preserve financial flexibility in light of uncertainty in the global markets resulting from the COVID-19 pandemic. The Company currently does not have plans to deploy these new funds other than seasonal investments in working capital. Borrowings under the ABL Facility are scheduled to mature on February 1, 2024. |
Nature of Business and Signif_2
Nature of Business and Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 29, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Financial Statement Presentation | Basis of Financial Statement Presentation The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) as applicable to interim financial reporting. In management’s opinion, the unaudited financial information for the interim periods presented includes all adjustments, consisting of normal recurring accruals necessary for a fair statement of the financial position, results of operations and cash flows. Certain information and disclosures normally included in our annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). These interim unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K filed with SEC for the fiscal year ended December 29, 2019 . The interim period unaudited financial results for the three -month periods presented are not necessarily indicative of results to be expected for any other interim period or for the entire year. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and accompanying notes. Actual results could differ materially from these estimates. |
Fiscal Year | Fiscal Year The Company’s fiscal year is a 52- or 53-week period ending on the Sunday nearest to December 31. The fiscal year ending January 3, 2021 and the fiscal year ended December 29, 2019 both include 52 weeks. The three months ended March 29, 2020 and March 31, 2019 both include 13 weeks. |
Principles of Consolidation | Principles of Consolidation The Company’s consolidated financial statements include the assets and liabilities used in operating the Company’s business, including entities in which the Company owns or controls more than 50% of the voting shares. All of the Company’s subsidiaries are wholly owned. All intercompany balances and transactions have been eliminated in consolidation. |
Recently Issued and Adopted Accounting Pronouncements and Accounting Pronouncements Issued But Not Yet Adopted | Recently Issued and Adopted Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, “ Leases (Topic 842) ,” amended by subsequent ASUs (collectively “ASC 842”), which supersedes the guidance for recognition, measurement, presentation and disclosures of lease arrangements. The amended standard requires recognition on the balance sheet for all leases with terms longer than 12 months as a lease liability and as a right-of-use (“ROU”) asset. The lease liability is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and the ROU asset is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The Company adopted ASC 842 when it became effective in the first quarter of fiscal year 2019 using a modified transition approach under which prior comparative periods were not adjusted. The Company elected the package of practical expedients, which permitted not reassessing its prior conclusions about lease identification, lease classification, and initial direct costs. In addition, the Company made the election for certain classes of underlying assets to not separate non-lease components from lease components. However, the Company did not elect the lease term hindsight practical expedient. For leases less than 12 months, the Company made an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities as permitted by the guidance. The adoption of the new standard had a material impact on the Company’s Consolidated Balance Sheets, but an immaterial impact on its Consolidated Statements of Operations and Consolidated Statements of Cash Flows. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases, while the accounting for finance leases remained substantially unchanged. In February 2018, the FASB issued ASU 2018-02, “ Income Statement-Reporting Comprehensive Income (Topic 220) : Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income” (“ASU 2018-02”). The FASB provided ongoing guidance on certain accounting and tax effects of the legislation in the Tax Cuts and Jobs Act (the “2017 Tax Act”), which was enacted in December 2017. ASU 2018-02 allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the 2017 Tax Act. The amendments in ASU 2018-02 also required certain disclosures about stranded tax effects. The Company adopted ASU 2018-02 when it became effective in the first quarter of fiscal year 2019. The Company has elected to not reclassify stranded tax effects resulting from the 2017 Tax Act. The adoption of ASU 2018-02 did not have a material impact on the Company’s consolidated financial statements and related disclosures. In June 2018, the FASB issued ASU 2018-07, “ Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting ” (“ASU 2018-07”) which simplified the accounting for nonemployee share-based payment transactions by expanding the scope of ASC Topic 718, Compensation - Stock Compensation , to include share-based payment transactions for acquiring goods and services from nonemployees. Under the standard, most of the guidance on stock compensation payments to nonemployees was aligned with the requirements for share-based payments granted to employees. The Company adopted ASU 2018-07 when it became effective in the first quarter of fiscal year 2019. The adoption of ASU 2018-07 did not have a material impact on the Company’s consolidated financial statements and related disclosures. In August 2018, the FASB issued ASU 2018-15, “ Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force) ” (“ASU 2018-15”) which amends ASC 350-40 to address a customer’s accounting for implementation costs incurred in a cloud computing arrangement (“CCA”) that is a service contract. ASU 2018-15 amended ASC 350 and clarified that a customer should apply ASC 350-40 to determine which implementation costs should be capitalized in a CCA. The ASU did not expand on existing disclosure requirements except to require a description of the nature of hosting arrangements that are service contracts. Entities are permitted to apply either a retrospective or prospective transition approach to adopt the guidance. The Company early adopted the amended guidance on a prospective application basis during the first quarter of fiscal year 2019. The adoption of ASU 2018-15 did not have a material impact on the Company’s consolidated financial statements and related disclosures. In October 2018, the FASB issued ASU 2018-16, “ Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes ” (“ASU 2018-16”). ASU 2018-16 allows for the use of the OIS rate based on the SOFR as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815, Derivatives and Hedging . The Company adopted ASU 2018-16 when it became effective in the first quarter of fiscal year 2019. The adoption of ASU 2018-16 did not have a material impact on the Company’s consolidated financial statements and related disclosures. In July 2019, the FASB issued ASU 2019-07, “ Codification Updates to SEC Sections - Amendments to SEC Paragraphs Pursuant to SEC Final Rule Releases No. 33-10532, Disclosure Update and Simplification, and Nos. 33-10231 and 33-10442, Investment Company Reporting Modernization and Miscellaneous Updates (SEC Update) ” (“ASU 2019-07”). ASU 2019-07 clarifies or improves the disclosure and presentation requirements of a variety of codification topics by aligning them with the SEC’s regulations, thereby eliminating redundancies and making the codification easier to apply. ASU 2019-07 was effective upon issuance and did not have a material impact on the Company’s consolidated financial statements and related disclosures. In June 2016, the FASB issued ASU 2016-13, “ Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments ,” amended by subsequent ASUs (collectively, “ASU 2016-13”), which changes the way companies evaluate credit losses for most financial assets and certain other instruments. For trade and other receivables, held-to-maturity debt securities, loans and other instruments, entities will be required to use a new forward-looking “expected loss” model to evaluate impairment, potentially resulting in earlier recognition of allowances for losses. The new standard also requires enhanced disclosures, including the requirement to disclose the information used to track credit quality by year of origination for most financing receivables. The Company adopted the amended guidance when it became effective in the first quarter of fiscal year 2020. The adoption of ASU 2016-13 did not have a material impact on its consolidated financial statements and related disclosures. In August 2018, the FASB issued ASU 2018-13, “ Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement ” (“ASU 2018-13”) which changes the fair value measurement disclosure requirements of ASC 820. The ASU adds new disclosure requirements and eliminates and modifies existing disclosure requirements. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments in ASU 2018-13 should be applied retrospectively to all periods presented. The Company adopted ASU 2018-13 when it became effective in the first quarter of fiscal year 2020. The adoption of ASU 2018-13 did not have a material impact on its consolidated financial statements and related disclosures. Accounting Pronouncements Issued But Not Yet Adopted In December 2019, the FASB issued ASU 2019-12, “ Simplifying the Accounting for Income Taxes ” (“ASU 2019-12”). The amendments in ASU 2019-12 simplify the accounting for income taxes by removing certain exceptions to the general principles in ASC Topic 740, Income Taxes. The amendments also improve consistent application of and simplify U.S. GAAP for other areas of ASC Topic 740 by clarifying and amending existing guidance. ASU 2019-12 will be effective for the Company commencing in the first quarter of fiscal year 2021 with early adoption permitted. The transition requirements are dependent upon each amendment within this update and will be applied either prospectively or retrospectively. The Company is currently evaluating the amended guidance and the impact on its consolidated financial statements and related disclosures. In March 2020, the FASB issued ASU 2020-04, “ Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting ” (“ASU 2020-04”). The amendments provide optional guidance for a limited time to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts and hedging relationships that reference the London Interbank Offered Rate (LIBOR) or another reference rate expected to be discontinued due to reference rate reform. These amendments are effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The Company is currently evaluating the amended guidance and the impact on its consolidated financial statements and related disclosures. |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 3 Months Ended |
Mar. 29, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Net Sales From External Customers By Product Category | The following table presents Net sales disaggregated by product category: Three Months Ended March 29, 2020 March 31, 2019 Landscaping products (a) $ 320.2 $ 277.3 Agronomic and other products (b) 139.6 140.0 $ 459.8 $ 417.3 ______________ (a) Landscaping products include irrigation, nursery, hardscapes, outdoor lighting, and landscape accessories. (b) Agronomic and other products include fertilizer, control products, ice melt, equipment, and other products. |
Fair Value Measurement and In_2
Fair Value Measurement and Interest Rate Swaps (Tables) | 3 Months Ended |
Mar. 29, 2020 | |
Fair Value Disclosures and Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Interest Rate Swap Contracts | The following table provides additional details related to the swap contracts: Derivatives designated as hedging instruments Inception Date Effective Date Maturity Date Notional Amount Fixed Interest Rate Type of Hedge Forward-starting interest rate swap 1 June 30, 2017 March 11, 2019 June 11, 2021 $ 58.0 2.1345 % Cash flow Forward-starting interest rate swap 2 June 30, 2017 March 11, 2019 June 11, 2021 116.0 2.1510 % Cash flow Forward-starting interest rate swap 3 December 17, 2018 July 14, 2020 January 14, 2024 34.0 2.9345 % Cash flow Forward-starting interest rate swap 4 December 24, 2018 January 14, 2019 January 14, 2023 50.0 2.7471 % Cash flow Forward-starting interest rate swap 5 December 26, 2018 January 14, 2019 January 14, 2023 90.0 2.7250 % Cash flow Forward-starting interest rate swap 6 May 30, 2019 July 15, 2019 January 14, 2023 70.0 2.1560 % Cash flow The Company recognizes the unrealized gains or unrealized losses as either assets or liabilities at fair value on its Consolidated Balance Sheets. The forward-starting interest rate swap contracts are subject to master netting arrangements. The Company has elected not to offset the fair value of assets with the fair value of liabilities related to these contracts. The following table summarizes the fair value of the derivative instruments and the respective lines in which they were recorded in the Consolidated Balance Sheets as of March 29, 2020 and December 29, 2019 (in millions): Derivative Assets Derivative Liabilities March 29, 2020 December 29, 2019 March 29, 2020 December 29, 2019 Balance Sheet Location Fair Value Balance Sheet Location Fair Value Balance Sheet Location Fair Value Balance Sheet Location Fair Value Derivatives designated as hedging instruments Interest rate contracts Prepaid expenses and other current assets $ — Prepaid expenses and other current assets $ — Accrued liabilities $ 4.6 Accrued liabilities $ 2.1 Other assets — Other assets — Other long-term liabilities 7.8 Other long-term liabilities 5.3 Total derivatives $ — $ — $ 12.4 $ 7.4 |
Schedule of Pre-tax Amounts of Derivatives Designated as Cash Flow Hedges in AOCI | The table below details pre-tax amounts in AOCI and gain (loss) reclassified into income for derivatives designated as cash flow hedges for the three months ended March 29, 2020 and March 31, 2019 (in millions): Three Months Ended March 29, 2020 March 31, 2019 Gain (Loss) Recorded in OCI Classification of Gain (Loss) Reclassified from AOCI into Income Gain (Loss) Reclassified from AOCI into Income Gain (Loss) Recorded in OCI Classification of Gain (Loss) Reclassified from AOCI into Income Gain (Loss) Reclassified from AOCI into Income Derivatives in Cash Flow Hedging Relationships Interest rate contracts $ (5.0 ) Interest and other non-operating expenses, net $ (0.6 ) $ (3.0 ) Interest and other non-operating expenses, net $ 0.1 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 3 Months Ended |
Mar. 29, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and equipment consisted of the following (in millions): March 29, 2020 December 29, 2019 Land $ 12.2 $ 12.2 Buildings and leasehold improvements: Buildings 7.8 7.8 Leasehold improvements 26.8 25.5 Branch equipment 49.3 47.9 Office furniture and fixtures and vehicles: Office furniture and fixtures 20.6 21.4 Vehicles 32.7 30.2 Finance lease right-of-use assets 52.8 46.3 Tooling 0.1 0.1 Construction in progress 3.3 2.9 Total property and equipment, gross 205.6 194.3 Less: accumulated depreciation and amortization 93.7 89.4 Total property and equipment, net $ 111.9 $ 104.9 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, Net (Tables) | 3 Months Ended |
Mar. 29, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in Carrying Amount of Goodwill | The changes in the carrying amount of goodwill were as follows (in millions): December 30, 2019 to March 29, 2020 Beginning balance $ 181.3 Goodwill acquired during the period 25.9 Goodwill adjusted during the period (0.2 ) Ending balance $ 207.0 |
Summary of Components of Intangible Assets | The following table summarizes the components of intangible assets (in millions, except weighted average remaining useful life): March 29, 2020 December 29, 2019 Weighted Average Remaining Useful Life (Years) Amount Accumulated Amortization Net Amount Accumulated Amortization Net Customer relationships 17.0 $ 287.7 $ 132.3 $ 155.4 $ 267.9 $ 124.4 $ 143.5 Trademarks and other 3.4 18.1 10.7 7.4 17.0 9.9 7.1 Total intangible assets $ 305.8 $ 143.0 $ 162.8 $ 284.9 $ 134.3 $ 150.6 |
Future Amortization Expense | Total future amortization estimated as of March 29, 2020 , is as follows (in millions): Fiscal year ending: 2020 (remainder) $ 24.7 2021 27.9 2022 22.9 2023 18.3 2024 14.3 Thereafter 54.7 Total future amortization $ 162.8 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 29, 2020 | |
Leases [Abstract] | |
Schedule of Lease Costs | Average lease terms and discount rates were as follows: Lease Term and Discount Rate March 29, 2020 Weighted-average remaining lease term (years) Finance leases 3.8 Operating leases 7.0 Weighted-average discount rate Finance leases 4.4 % Operating leases 5.9 % The components of lease expense were as follows (in millions): Three Months Ended Lease cost Classification March 29, 2020 March 31, 2019 Finance lease cost Amortization of right-of-use assets Selling, general and administrative expenses $ 2.0 $ 1.8 Interest on lease liabilities Interest and other non-operating expenses, net 0.3 0.2 Operating lease cost Cost of goods sold 0.8 0.8 Operating lease cost Selling, general and administrative expenses 16.0 14.8 Short-term lease cost Selling, general and administrative expenses 0.4 0.4 Variable lease cost Selling, general and administrative expenses 0.2 0.1 Sublease income Selling, general and administrative expenses (0.3 ) (0.1 ) Total lease cost $ 19.4 $ 18.0 Supplemental cash flow information related to leases was as follows (in millions): Three Months Ended Other information March 29, 2020 March 31, 2019 Cash paid for amounts included in the measurements of lease liabilities Operating cash flows from finance leases $ 0.3 $ 0.2 Operating cash flows from operating leases $ 16.5 $ 15.0 Financing cash flows from finance leases $ 1.8 $ 1.7 Right-of-use assets obtained in exchange for new lease liabilities Finance leases $ 6.6 $ 3.3 Operating leases $ 21.5 $ 10.6 |
Schedule of Future Lease Payments for Operating Leases | The aggregate future lease payments for operating and finance leases as of March 29, 2020 were as follows (in millions): Maturity of Lease Liabilities Operating Leases Finance Leases Fiscal year: 2020 (remainder) $ 42.7 $ 6.8 2021 57.9 8.4 2022 47.5 6.7 2023 37.2 5.0 2024 27.9 2.6 2025 18.4 0.4 Thereafter 73.6 — Total lease payments 305.2 29.9 Less: interest 61.5 2.3 Present value of lease liabilities $ 243.7 $ 27.6 |
Schedule of Future Lease Payments for Finance Leases | The aggregate future lease payments for operating and finance leases as of March 29, 2020 were as follows (in millions): Maturity of Lease Liabilities Operating Leases Finance Leases Fiscal year: 2020 (remainder) $ 42.7 $ 6.8 2021 57.9 8.4 2022 47.5 6.7 2023 37.2 5.0 2024 27.9 2.6 2025 18.4 0.4 Thereafter 73.6 — Total lease payments 305.2 29.9 Less: interest 61.5 2.3 Present value of lease liabilities $ 243.7 $ 27.6 |
Employee Benefit and Stock In_2
Employee Benefit and Stock Incentive Plans (Tables) | 3 Months Ended |
Mar. 29, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Stock Option Activity | A summary of stock-based compensation activities during the three months ended March 29, 2020 was as follows (in thousands): Stock Options RSUs DSUs PSUs Outstanding as of December 29, 2019 1,998.8 148.5 32.8 28.4 Granted 137.0 72.0 0.3 16.9 Exercised/Vested/Settled (265.6 ) (41.4 ) — — Expired or forfeited (15.2 ) (4.3 ) — (1.1 ) Outstanding as of March 29, 2020 1,855.0 174.8 33.1 44.2 The weighted average grant date fair value of awards granted during the three months ended March 29, 2020 was as follows: Weighted Average Stock options $ 26.04 RSUs $ 101.77 DSUs $ 70.12 PSUs $ 101.87 |
Summary of DSU Activity | A summary of stock-based compensation activities during the three months ended March 29, 2020 was as follows (in thousands): Stock Options RSUs DSUs PSUs Outstanding as of December 29, 2019 1,998.8 148.5 32.8 28.4 Granted 137.0 72.0 0.3 16.9 Exercised/Vested/Settled (265.6 ) (41.4 ) — — Expired or forfeited (15.2 ) (4.3 ) — (1.1 ) Outstanding as of March 29, 2020 1,855.0 174.8 33.1 44.2 The weighted average grant date fair value of awards granted during the three months ended March 29, 2020 was as follows: Weighted Average Stock options $ 26.04 RSUs $ 101.77 DSUs $ 70.12 PSUs $ 101.87 |
Summary of PSU Activity | A summary of stock-based compensation activities during the three months ended March 29, 2020 was as follows (in thousands): Stock Options RSUs DSUs PSUs Outstanding as of December 29, 2019 1,998.8 148.5 32.8 28.4 Granted 137.0 72.0 0.3 16.9 Exercised/Vested/Settled (265.6 ) (41.4 ) — — Expired or forfeited (15.2 ) (4.3 ) — (1.1 ) Outstanding as of March 29, 2020 1,855.0 174.8 33.1 44.2 The weighted average grant date fair value of awards granted during the three months ended March 29, 2020 was as follows: Weighted Average Stock options $ 26.04 RSUs $ 101.77 DSUs $ 70.12 PSUs $ 101.87 |
Summary of RSU Activity | A summary of stock-based compensation activities during the three months ended March 29, 2020 was as follows (in thousands): Stock Options RSUs DSUs PSUs Outstanding as of December 29, 2019 1,998.8 148.5 32.8 28.4 Granted 137.0 72.0 0.3 16.9 Exercised/Vested/Settled (265.6 ) (41.4 ) — — Expired or forfeited (15.2 ) (4.3 ) — (1.1 ) Outstanding as of March 29, 2020 1,855.0 174.8 33.1 44.2 The weighted average grant date fair value of awards granted during the three months ended March 29, 2020 was as follows: Weighted Average Stock options $ 26.04 RSUs $ 101.77 DSUs $ 70.12 PSUs $ 101.87 |
Summary of Stock-based Compensation Expense Recognized | A summary of stock-based compensation expenses recognized during the periods was as follows (in millions): Three Months Ended Three Months Ended March 29, 2020 March 31, 2019 Stock options $ 1.2 $ 1.1 RSUs 0.9 0.5 DSUs 0.2 0.1 PSUs 0.2 0.1 Total stock-based compensation $ 2.5 $ 1.8 |
Summary of Unrecognized Stock-based Compensation Expense | A summary of unrecognized stock-based compensation expense as of March 29, 2020 was as follows: Unrecognized Compensation Weighted Average Stock options $ 9.9 2.75 RSUs $ 12.1 3.28 DSUs $ 0.3 1.29 PSUs $ 2.5 2.42 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 29, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | Long-term debt was as follows (in millions): March 29, 2020 December 29, 2019 ABL facility $ 213.1 $ 92.8 Term loan facility 440.7 441.8 Total gross long-term debt 653.8 534.6 Less: unamortized debt issuance costs and discounts on debt (9.2 ) (9.7 ) Total debt $ 644.6 $ 524.9 Less: current portion (4.5 ) (4.5 ) Total long-term debt $ 640.1 $ 520.4 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 3 Months Ended |
Mar. 29, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | For the three months ended March 29, 2020 and March 31, 2019 , the assumed exercises of a portion of the Company’s employee stock options and RSUs were anti-dilutive and, therefore, the following potential shares of common stock were not included in the diluted earnings (loss) per common share calculation: Three Months Ended March 29, 2020 March 31, 2019 Weighted average potential common shares excluded because anti-dilutive Employee stock options and RSUs 2,099,487 2,720,452 |
Nature of Business and Signif_3
Nature of Business and Significant Accounting Policies - Additional Information (Details) - store | 3 Months Ended | |
Mar. 29, 2020 | Mar. 31, 2019 | |
Concentration Risk [Line Items] | ||
Number of stores (over) | 550 | |
Geographic Concentration Risk | Sales | Canada | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage (less than) | 2.00% | |
Geographic Concentration Risk | Total Assets | Canada | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage (less than) | 2.00% |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Net Sales Disaggregated by Product Category (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 29, 2020 | Mar. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 459.8 | $ 417.3 |
Landscaping products | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 320.2 | 277.3 |
Agronomic and other products | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 139.6 | $ 140 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Remaining Performance Obligation (Details) | Mar. 29, 2020 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-03-30 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected timing of remaining performance obligations | 12 months |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 29, 2020 | Dec. 29, 2019 | |
Revenue from Contract with Customer [Abstract] | ||
Transaction price allocated to remaining performance obligations | $ 5.4 | |
Contract liabilities | 5.4 | $ 6.5 |
Revenue recognized during period that was previously included in contract liability balance | $ 3 |
Acquisitions (Details)
Acquisitions (Details) | 3 Months Ended | ||||||||||
Mar. 29, 2020USD ($)locationstore | Mar. 31, 2019USD ($) | Jan. 31, 2020location | Dec. 29, 2019location | Sep. 29, 2019location | Aug. 31, 2019location | Jul. 31, 2019location | May 31, 2019location | Apr. 30, 2019location | Feb. 28, 2019location | Jan. 31, 2019location | |
Business Acquisition [Line Items] | |||||||||||
Cash consideration | $ | $ 44,800,000 | $ 12,700,000 | |||||||||
Deferred contingent consideration | $ | $ 6,200,000 | $ 0 | |||||||||
Number of locations | store | 550 | ||||||||||
Big Rock | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Number of locations | 1 | ||||||||||
Garden Dept | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Number of locations | 3 | ||||||||||
Empire | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Number of locations | 3 | ||||||||||
Wittkopf | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Number of locations | 2 | ||||||||||
Daniel Stone | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Number of locations | 1 | ||||||||||
Dirt Doctors | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Number of locations | 3 | ||||||||||
Design Outdoor | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Number of locations | 1 | ||||||||||
Trendset | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Number of locations | 1 | ||||||||||
Voss | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Number of locations | 5 | ||||||||||
Stone and Soil | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Number of locations | 3 | ||||||||||
Fisher's | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Number of locations | 2 | ||||||||||
Landscape Depot | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Number of locations | 3 | ||||||||||
All Pro | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Number of locations | 1 | ||||||||||
Cutting Edge | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Number of locations | 1 |
Fair Value Measurement and In_3
Fair Value Measurement and Interest Rate Swaps - Interest Rate Swap Contracts (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 29, 2020 | Dec. 29, 2019 | |
Interest rate swap | ||
Derivative [Line Items] | ||
Amount to be reclassified to earnings during the next twelve months | $ 3.4 | |
Derivatives accounted for as hedges | Interest rate swap | Cash flow | ||
Derivative [Line Items] | ||
Fair Value of Hedge Assets | 0 | $ 0 |
Fair Value of Hedge Liabilities | 12.4 | 7.4 |
Derivatives accounted for as hedges | Interest rate swap | Cash flow | Prepaid expenses and other current assets | ||
Derivative [Line Items] | ||
Fair Value of Hedge Assets | 0 | 0 |
Derivatives accounted for as hedges | Interest rate swap | Cash flow | Other assets | ||
Derivative [Line Items] | ||
Fair Value of Hedge Assets | 0 | 0 |
Derivatives accounted for as hedges | Interest rate swap | Cash flow | Accrued liabilities | ||
Derivative [Line Items] | ||
Fair Value of Hedge Liabilities | 4.6 | 2.1 |
Derivatives accounted for as hedges | Interest rate swap | Cash flow | Other long-term liabilities | ||
Derivative [Line Items] | ||
Fair Value of Hedge Liabilities | 7.8 | $ 5.3 |
Derivatives accounted for as hedges | Forward-starting interest rate swap 1 | ||
Derivative [Line Items] | ||
Notional Amount | $ 58 | |
Fixed Interest Rate | 2.1345% | |
Derivatives accounted for as hedges | Forward-starting interest rate swap 2 | ||
Derivative [Line Items] | ||
Notional Amount | $ 116 | |
Fixed Interest Rate | 2.151% | |
Derivatives accounted for as hedges | Forward-starting interest rate swap 3 | ||
Derivative [Line Items] | ||
Notional Amount | $ 34 | |
Fixed Interest Rate | 2.9345% | |
Derivatives accounted for as hedges | Forward-starting interest rate swap 4 | ||
Derivative [Line Items] | ||
Notional Amount | $ 50 | |
Fixed Interest Rate | 2.7471% | |
Derivatives accounted for as hedges | Forward-starting interest rate swap 5 | ||
Derivative [Line Items] | ||
Notional Amount | $ 90 | |
Fixed Interest Rate | 2.725% | |
Derivatives accounted for as hedges | Forward-starting interest rate swap 6 | ||
Derivative [Line Items] | ||
Notional Amount | $ 70 | |
Fixed Interest Rate | 2.156% |
Fair Value Measurement and In_4
Fair Value Measurement and Interest Rate Swaps - Pre-tax Amounts of Derivatives Designated as Cash Flow Hedges in AOCI (Details) - Interest rate swap - Interest and other non-operating expenses, net - USD ($) $ in Millions | 3 Months Ended | |
Mar. 29, 2020 | Mar. 31, 2019 | |
Derivative [Line Items] | ||
Gain (Loss) Recorded in OCI | $ (5) | $ (3) |
Gain (Loss) Reclassified from AOCI into Income | $ (0.6) | $ 0.1 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) $ in Millions | Mar. 29, 2020 | Dec. 29, 2019 |
Property, Plant and Equipment [Line Items] | ||
Finance lease right-of-use assets | $ 52.8 | $ 46.3 |
Total property and equipment, gross | 205.6 | 194.3 |
Less: accumulated depreciation and amortization | 93.7 | 89.4 |
Total property and equipment, net | 111.9 | 104.9 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 12.2 | 12.2 |
Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 7.8 | 7.8 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 26.8 | 25.5 |
Branch equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 49.3 | 47.9 |
Office furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 20.6 | 21.4 |
Vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 32.7 | 30.2 |
Tooling | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 0.1 | 0.1 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 3.3 | $ 2.9 |
Property and Equipment, Net - A
Property and Equipment, Net - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 29, 2020 | Mar. 31, 2019 | Dec. 29, 2019 | |
Property, Plant and Equipment [Line Items] | |||
Amortization of finance lease right-of-use assets and depreciation | $ 7 | $ 6.8 | |
Capitalized software, gross | 11.1 | $ 10.9 | |
Capitalized software, accumulated amortization | 7.8 | $ 7.4 | |
Capitalized software, amortization | $ 0.6 | $ 0.5 | |
Capitalized software | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 3 years |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets, Net - Changes in the Carrying Amount of Goodwill (Details) $ in Millions | 3 Months Ended |
Mar. 29, 2020USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 181.3 |
Goodwill acquired during the period | 25.9 |
Goodwill adjusted during the period | (0.2) |
Ending balance | $ 207 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets, Net - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 29, 2020 | Mar. 31, 2019 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | $ 8.7 | $ 8.1 |
Customer relationships, trademarks and other | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets acquired | $ 20.9 | |
Customer relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted-average useful life of intangible assets acquired | 20 years | |
Trademarks and other | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted-average useful life of intangible assets acquired | 5 years |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets, Net - Summary of the Components of Intangible Assets (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 29, 2020 | Dec. 29, 2019 | |
Finite-Lived Intangible Assets [Line Items] | ||
Amount | $ 305.8 | $ 284.9 |
Accumulated Amortization | 143 | 134.3 |
Net | $ 162.8 | 150.6 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Useful Life (Years) | 17 years | |
Amount | $ 287.7 | 267.9 |
Accumulated Amortization | 132.3 | 124.4 |
Net | $ 155.4 | 143.5 |
Trademarks and other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Useful Life (Years) | 3 years 4 months 24 days | |
Amount | $ 18.1 | 17 |
Accumulated Amortization | 10.7 | 9.9 |
Net | $ 7.4 | $ 7.1 |
Goodwill and Intangible Asset_6
Goodwill and Intangible Assets, Net - Total Future Amortization (Details) - USD ($) $ in Millions | Mar. 29, 2020 | Dec. 29, 2019 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2020 (remainder) | $ 24.7 | |
2021 | 27.9 | |
2022 | 22.9 | |
2023 | 18.3 | |
2024 | 14.3 | |
Thereafter | 54.7 | |
Net | $ 162.8 | $ 150.6 |
Leases - Additional Information
Leases - Additional Information (Details) | 3 Months Ended |
Mar. 29, 2020 | |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Lease renewal term | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Lease renewal term | 5 years |
Leases - Components of Lease Ex
Leases - Components of Lease Expense (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 29, 2020 | Mar. 31, 2019 | |
Lessee, Lease, Description [Line Items] | ||
Finance lease cost, amortization of right-of-use assets | $ 2 | $ 1.8 |
Finance lease cost, interest on lease liabilities | 0.3 | 0.2 |
Short-term lease cost | 0.4 | 0.4 |
Variable lease cost | 0.2 | 0.1 |
Sublease income | (0.3) | (0.1) |
Total lease cost | 19.4 | 18 |
Cost of goods sold | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease cost | 0.8 | 0.8 |
Selling, general and administrative expenses | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease cost | $ 16 | $ 14.8 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 29, 2020 | Mar. 31, 2019 | |
Leases [Abstract] | ||
Cash paid for amounts included in the measurements of lease liabilities, operating cash flows from finance leases | $ 0.3 | $ 0.2 |
Cash paid for amounts included in the measurements of lease liabilities, operating cash flows from operating leases | 16.5 | 15 |
Cash paid for amounts included in the measurements of lease liabilities, financing cash flows from finance leases | 1.8 | 1.7 |
Right-of-use assets obtained in exchange for new lease liabilities, finance leases | 6.6 | 3.3 |
Right-of-use assets obtained in exchange for new lease liabilities, operating leases | $ 21.5 | $ 10.6 |
Leases - Future Lease Payments
Leases - Future Lease Payments for Operating and Finance Leases (Details) $ in Millions | Mar. 29, 2020USD ($) |
Operating Leases | |
2020 (remainder) | $ 42.7 |
2021 | 57.9 |
2022 | 47.5 |
2023 | 37.2 |
2024 | 27.9 |
2025 | 18.4 |
Thereafter | 73.6 |
Total lease payments | 305.2 |
Less: interest | 61.5 |
Present value of lease liabilities | 243.7 |
Finance Leases | |
2020 (remainder) | 6.8 |
2021 | 8.4 |
2022 | 6.7 |
2023 | 5 |
2024 | 2.6 |
2025 | 0.4 |
Thereafter | 0 |
Total lease payments | 29.9 |
Less: interest | 2.3 |
Present value of lease liabilities | $ 27.6 |
Leases - Lease Term and Discoun
Leases - Lease Term and Discount Rate (Details) | Mar. 29, 2020 |
Leases [Abstract] | |
Weighted-average remaining lease term, finance leases | 3 years 9 months 18 days |
Weighted-average remaining lease term, operating leases | 7 years |
Weighted-average discount rate, finance leases | 4.40% |
Weighted-average discount rate, operating leases | 5.90% |
Employee Benefit and Stock In_3
Employee Benefit and Stock Incentive Plans - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 29, 2020 | Mar. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Contributions to the defined contribution benefit plan made by Company | $ 2.7 | $ 2.6 |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 2,000,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 563,176 | |
RSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 4 years | |
Expiration period | 10 years | |
RSUs | 25% vested in year 1 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting percentage | 25.00% | |
RSUs | 25% vested in year 2 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting percentage | 25.00% | |
RSUs | 25% vested in year 3 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting percentage | 25.00% | |
RSUs | 25% vested in year 4 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting percentage | 25.00% | |
Stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 4 years | |
Expiration period | 10 years | |
Stock options | 25% vested in year 1 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting percentage | 25.00% | |
Stock options | 25% vested in year 2 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting percentage | 25.00% | |
Stock options | 25% vested in year 3 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting percentage | 25.00% | |
Stock options | 25% vested in year 4 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting percentage | 25.00% | |
PSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 3 years |
Employee Benefit and Stock In_4
Employee Benefit and Stock Incentive Plans - Summary of Stock-based Compensation Activities (Details) | 3 Months Ended |
Mar. 29, 2020shares | |
Stock Options | |
Outstanding, beginning balance (in shares) | 1,998,800 |
Granted (in shares) | 137,000 |
Exercised/Vested/Settled (in shares) | (265,600) |
Expired or forfeited (in shares) | (15,200) |
Outstanding, ending balance (in shares) | 1,855,000 |
RSUs | |
RSUs, DSUs and PSUs | |
Outstanding, beginning balance (in shares) | 148,500 |
Granted (in shares) | 72,000 |
Exercised/Vested/Settled (in shares) | (41,400) |
Expired or forfeited (in shares) | (4,300) |
Outstanding, ending balance (in shares) | 174,800 |
DSUs | |
RSUs, DSUs and PSUs | |
Outstanding, beginning balance (in shares) | 32,800 |
Granted (in shares) | 300 |
Exercised/Vested/Settled (in shares) | 0 |
Expired or forfeited (in shares) | 0 |
Outstanding, ending balance (in shares) | 33,100 |
PSUs | |
RSUs, DSUs and PSUs | |
Outstanding, beginning balance (in shares) | 28,400 |
Granted (in shares) | 16,900 |
Exercised/Vested/Settled (in shares) | 0 |
Expired or forfeited (in shares) | (1,100) |
Outstanding, ending balance (in shares) | 44,200 |
Employee Benefit and Stock In_5
Employee Benefit and Stock Incentive Plans - Weighted-average Grant Date Fair Value of Awards Granted (Details) | 3 Months Ended |
Mar. 29, 2020$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted Average Grant Date Fair Value (in dollars per share) | $ 26.04 |
RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted Average Grant Date Fair Value (in dollars per share) | 101.77 |
DSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted Average Grant Date Fair Value (in dollars per share) | 70.12 |
PSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted Average Grant Date Fair Value (in dollars per share) | $ 101.87 |
Employee Benefit and Stock In_6
Employee Benefit and Stock Incentive Plans - Summary of Stock-based Compensation Expense (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 29, 2020 | Mar. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $ 2.5 | $ 1.8 |
Stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | 1.2 | 1.1 |
RSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | 0.9 | 0.5 |
DSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | 0.2 | 0.1 |
PSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $ 0.2 | $ 0.1 |
Employee Benefit and Stock In_7
Employee Benefit and Stock Incentive Plans - Unrecognized Stock-based Compensation Expense (Details) $ in Millions | 3 Months Ended |
Mar. 29, 2020USD ($) | |
Stock options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation | $ 9.9 |
Weighted Average Remaining Period | 2 years 9 months |
RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation | $ 12.1 |
Weighted Average Remaining Period | 3 years 3 months 10 days |
DSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation | $ 0.3 |
Weighted Average Remaining Period | 1 year 3 months 14 days |
PSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation | $ 2.5 |
Weighted Average Remaining Period | 2 years 5 months 1 day |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-term Debt (Details) - USD ($) $ in Millions | Mar. 29, 2020 | Dec. 29, 2019 |
Debt Instrument [Line Items] | ||
Loan facility | $ 653.8 | $ 534.6 |
Less: unamortized debt issuance costs and discounts on debt | (9.2) | (9.7) |
Total debt | 644.6 | 524.9 |
Less: current portion | (4.5) | (4.5) |
Total long-term debt | 640.1 | 520.4 |
ABL facility | ||
Debt Instrument [Line Items] | ||
Loan facility | 213.1 | 92.8 |
Term loan facility | ||
Debt Instrument [Line Items] | ||
Loan facility | $ 440.7 | $ 441.8 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Details) - USD ($) | Aug. 14, 2018 | Mar. 29, 2020 | Mar. 31, 2019 | Dec. 29, 2019 | Feb. 01, 2019 |
Debt Instrument [Line Items] | |||||
Repayments on asset-based credit facility | $ 59,200,000 | $ 64,500,000 | |||
Interest expense | 7,700,000 | 9,000,000 | |||
Interest expense related to ABL facility and Term Loan Facility | 6,900,000 | 7,900,000 | |||
Unamortized debt issuance costs and discounts | 400,000 | ||||
Capitalized debt issuance costs | 900,000 | ||||
Amortization expense related to debt issuance costs | 500,000 | 500,000 | |||
Interest expense incurred related to capital leases | 300,000 | $ 200,000 | |||
ABL facility | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | $ 375,000,000 | ||||
Remaining borrowing capacity under credit facility | $ 155,000,000 | $ 263,400,000 | |||
Interest rate on credit facility (percent) | 3.21% | ||||
Commitment fee for the unfunded amount (percent) | 0.25% | 0.25% | |||
Repayments on asset-based credit facility | $ 96,800,000 | ||||
ABL facility | Minimum | |||||
Debt Instrument [Line Items] | |||||
Interest rate on credit facility (percent) | 2.86% | ||||
ABL facility | Maximum | |||||
Debt Instrument [Line Items] | |||||
Interest rate on credit facility (percent) | 3.50% | ||||
ABL facility | LIBOR | Minimum | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, basis spread on variable rate (percent) | 1.25% | ||||
ABL facility | LIBOR | Maximum | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, basis spread on variable rate (percent) | 1.75% | ||||
ABL facility | Base Rate | Minimum | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, basis spread on variable rate (percent) | 0.25% | ||||
ABL facility | Base Rate | Maximum | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, basis spread on variable rate (percent) | 0.75% | ||||
Term loan facility | |||||
Debt Instrument [Line Items] | |||||
Face amount of loan | 447,400,000 | ||||
Percentage of excess cash flow to be paid for annual mandatory prepayments | 50.00% | ||||
Threshold for mandatory annual prepayments | $ 10,000,000 | ||||
Leverage ratio | 3 | ||||
Term loan facility | Tranche E Term Loans | |||||
Debt Instrument [Line Items] | |||||
Face amount of loan | $ 347,400,000 | ||||
Interest rate (percent) | 4.36% | ||||
Quarterly payment as percentage of initial principal amount | 0.25% | ||||
Term loan facility | Tranche E Term Loans | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, basis spread on variable rate (percent) | 2.75% | ||||
Term loan facility | Tranche E Term Loans | Base Rate | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, basis spread on variable rate (percent) | 1.75% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 29, 2020 | Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate (percent) | 43.50% | 28.50% |
Excess tax benefits as a result of change in tax rate | $ 5.5 | $ 0.8 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 29, 2020 | Mar. 31, 2019 | Dec. 29, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Undiscounted cost of future remediation efforts | $ 3,600,000 | $ 3,600,000 | |
Maximum amount of Company's exposure to environmental liability | 2,400,000 | ||
Indemnification asset recorded against the liability | 1,200,000 | 1,200,000 | |
Letter of credit, amount outstanding | 6,900,000 | 5,300,000 | |
Line of Credit Facility [Line Items] | |||
Amount drawn on letters of credit | 179,600,000 | $ 140,500,000 | |
Letter of credit | |||
Line of Credit Facility [Line Items] | |||
Amount drawn on letters of credit | $ 0 | $ 0 |
Earnings (Loss) Per Share (Deta
Earnings (Loss) Per Share (Details) - shares | 3 Months Ended | |
Mar. 29, 2020 | Mar. 31, 2019 | |
Employee stock options and RSUs | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Weighted average potential common shares excluded because anti-dilutive (in shares) | 2,099,487 | 2,720,452 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Millions | Apr. 01, 2020 | Mar. 29, 2020 | Mar. 31, 2019 |
Subsequent Event [Line Items] | |||
Amount drawn on letters of credit | $ 179.6 | $ 140.5 | |
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Amount drawn on letters of credit | $ 100 | ||
ABL facility | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Amount outstanding | $ 319 |