Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 28, 2020 | Jul. 24, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 28, 2020 | |
Document Transition Report | false | |
Entity File Number | 000-03922 | |
Entity Registrant Name | PATRICK INDUSTRIES, INC. | |
Entity Incorporation, State or Country Code | IN | |
Entity Tax Identification Number | 35-1057796 | |
Entity Address, Address Line One | 107 WEST FRANKLIN STREET, P.O. Box 638 | |
Entity Address, City or Town | ELKHART, | |
Entity Address, State or Province | IN | |
Entity Address, Postal Zip Code | 46515 | |
City Area Code | 574 | |
Local Phone Number | 294-7511 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Title of 12(b) Security | Common Stock, no par value | |
Trading Symbol | PATK | |
Security Exchange Name | NASDAQ | |
Entity Common Stock, Shares Outstanding (in shares) | 23,448,725 | |
Entity Central Index Key | 0000076605 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2020 | Jun. 30, 2019 | Jun. 28, 2020 | Jun. 30, 2019 | |
Income Statement [Abstract] | ||||
NET SALES | $ 424,045 | $ 613,218 | $ 1,013,277 | $ 1,221,436 |
Cost of goods sold | 350,324 | 500,557 | 830,075 | 1,002,227 |
GROSS PROFIT | 73,721 | 112,661 | 183,202 | 219,209 |
Operating Expenses: | ||||
Warehouse and delivery | 20,209 | 26,270 | 44,941 | 50,311 |
Selling, general and administrative | 31,628 | 32,894 | 67,497 | 70,586 |
Amortization of intangible assets | 9,778 | 8,268 | 19,379 | 17,257 |
Total operating expenses | 61,615 | 67,432 | 131,817 | 138,154 |
OPERATING INCOME | 12,106 | 45,229 | 51,385 | 81,055 |
Interest expense, net | 10,821 | 8,636 | 21,313 | 17,619 |
Income before income taxes | 1,285 | 36,593 | 30,072 | 63,436 |
Income taxes | 571 | 9,177 | 8,171 | 15,171 |
NET INCOME | $ 714 | $ 27,416 | $ 21,901 | $ 48,265 |
BASIC NET INCOME PER COMMON SHARE (in dollars per share) | $ 0.03 | $ 1.19 | $ 0.96 | $ 2.09 |
DILUTED NET INCOME PER COMMON SHARE (in dollars per share) | $ 0.03 | $ 1.18 | $ 0.95 | $ 2.07 |
Weighted average shares outstanding - Basic (in shares) | 22,667 | 23,102 | 22,840 | 23,071 |
Weighted average shares outstanding - Diluted (in shares) | 22,932 | 23,316 | 23,098 | 23,282 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2020 | Jun. 30, 2019 | Jun. 28, 2020 | Jun. 30, 2019 | |
Statement of Other Comprehensive Income [Abstract] | ||||
Net income | $ 714 | $ 27,416 | $ 21,901 | $ 48,265 |
Other comprehensive (loss) income, net of tax: | ||||
Unrealized gain (loss) of hedge derivatives | 464 | (1,931) | (2,542) | (2,985) |
Other | (15) | (94) | (52) | (67) |
Total other comprehensive income (loss) | 449 | (2,025) | (2,594) | (3,052) |
COMPREHENSIVE INCOME | $ 1,163 | $ 25,391 | $ 19,307 | $ 45,213 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Unaudited) - USD ($) $ in Thousands | Jun. 28, 2020 | Dec. 31, 2019 |
Current Assets | ||
Cash and cash equivalents | $ 111,062 | $ 139,390 |
Trade and other receivables, net | 143,614 | 87,536 |
Inventories | 261,691 | 253,870 |
Prepaid expenses and other | 21,086 | 36,038 |
Total current assets | 537,453 | 516,834 |
Property, plant and equipment, net | 184,797 | 180,849 |
Operating lease right-of-use assets | 96,065 | 93,546 |
Goodwill | 326,478 | 319,349 |
Intangible assets, net | 344,905 | 357,014 |
Deferred financing costs, net | 2,706 | 2,978 |
Other non-current assets | 392 | 423 |
TOTAL ASSETS | 1,492,796 | 1,470,993 |
Current Liabilities | ||
Current maturities of long-term debt | 5,000 | 5,000 |
Current operating lease liabilities | 28,567 | 27,694 |
Accounts payable | 115,838 | 96,208 |
Accrued liabilities | 69,132 | 58,033 |
Total current liabilities | 218,537 | 186,935 |
Long-term debt, less current maturities, net | 673,138 | 670,354 |
Long-term operating lease liabilities | 68,318 | 66,467 |
Deferred tax liabilities, net | 19,056 | 27,284 |
Other long-term liabilities | 20,479 | 22,472 |
TOTAL LIABILITIES | 999,528 | 973,512 |
SHAREHOLDERS’ EQUITY | ||
Common stock | 173,178 | 172,662 |
Additional paid-in-capital | 24,534 | 25,014 |
Accumulated other comprehensive loss | (8,292) | (5,698) |
Retained earnings | 303,848 | 305,503 |
TOTAL SHAREHOLDERS’ EQUITY | 493,268 | 497,481 |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ 1,492,796 | $ 1,470,993 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 28, 2020 | Jun. 30, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $ 21,901 | $ 48,265 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 34,689 | 30,247 |
Stock-based compensation expense | 6,347 | 8,172 |
Amortization of convertible notes debt discount | 3,505 | 3,382 |
Deferred income taxes | (7,346) | 231 |
Other | 3,016 | (810) |
Change in operating assets and liabilities, net of acquisitions of businesses: | ||
Trade receivables | (55,520) | (31,514) |
Inventories | (7,183) | 13,699 |
Prepaid expenses and other assets | 14,908 | 2,368 |
Accounts payable, accrued liabilities and other | 25,055 | 19,774 |
Net cash provided by operating activities | 39,372 | 93,814 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Capital expenditures | (11,305) | (18,177) |
Proceeds from sale of property, equipment and other investing activities | 126 | 4,357 |
Business acquisitions, net of cash acquired | (23,838) | (1,246) |
Net cash used in investing activities | (35,017) | (15,066) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Term debt repayments | (1,250) | (3,750) |
Borrowings on revolver | 8,022 | 389,294 |
Repayments on revolver | (8,022) | (439,627) |
Stock repurchases under buyback program | (15,550) | 0 |
Cash dividends paid to shareholders | (11,607) | 0 |
Payments related to vesting of stock-based awards, net of shares tendered for taxes | (2,860) | (3,303) |
Payment of deferred financing costs | (58) | (276) |
Proceeds from exercise of stock options | 642 | 7 |
Payment of contingent consideration from a business acquisition | (2,000) | (4,416) |
Net cash used in financing activities | (32,683) | (62,071) |
Increase (decrease) in cash and cash equivalents | (28,328) | 16,677 |
Cash and cash equivalents at beginning of year | 139,390 | 6,895 |
Cash and cash equivalents at end of period | $ 111,062 | $ 23,572 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in- Capital | Accumulated Other Comprehensive Loss | Retained Earnings |
Beginning Balance at Dec. 31, 2018 | $ 408,754 | $ 161,436 | $ 25,124 | $ (2,680) | $ 224,874 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 48,265 | 48,265 | |||
Other comprehensive income (loss), net of tax | (3,052) | (3,052) | |||
Issuance of shares upon exercise of common stock options | 6 | 6 | |||
Shares used to pay taxes on stock grants | (3,528) | (3,528) | |||
Stock-based compensation expense | 8,172 | 8,172 | |||
Ending Balance at Jun. 30, 2019 | 458,617 | 166,086 | 25,124 | (5,732) | 273,139 |
Beginning Balance at Mar. 31, 2019 | 429,089 | 161,949 | 25,124 | (3,707) | 245,723 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 27,416 | 27,416 | |||
Other comprehensive income (loss), net of tax | (2,025) | (2,025) | |||
Issuance of shares upon exercise of common stock options | 3 | 3 | |||
Shares used to pay taxes on stock grants | (91) | (91) | |||
Stock-based compensation expense | 4,225 | 4,225 | |||
Ending Balance at Jun. 30, 2019 | 458,617 | 166,086 | 25,124 | (5,732) | 273,139 |
Beginning Balance at Dec. 31, 2019 | 497,481 | 172,662 | 25,014 | (5,698) | 305,503 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 21,901 | 21,901 | |||
Dividends declared | (11,801) | (11,801) | |||
Other comprehensive income (loss), net of tax | (2,594) | (2,594) | 0 | ||
Share repurchases under buyback program | (15,550) | (3,315) | (480) | (11,755) | |
Issuance of shares upon exercise of common stock options | 642 | 642 | |||
Shares used to pay taxes on stock grants | (3,158) | (3,158) | |||
Stock-based compensation expense | 6,347 | 6,347 | |||
Ending Balance at Jun. 28, 2020 | 493,268 | 173,178 | 24,534 | (8,292) | 303,848 |
Beginning Balance at Mar. 29, 2020 | 495,376 | 170,626 | 24,534 | (8,741) | 308,957 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 714 | 714 | |||
Dividends declared | (5,823) | (5,823) | |||
Other comprehensive income (loss), net of tax | 449 | 449 | |||
Issuance of shares upon exercise of common stock options | 642 | 642 | |||
Shares used to pay taxes on stock grants | (126) | (126) | |||
Stock-based compensation expense | 2,036 | 2,036 | |||
Ending Balance at Jun. 28, 2020 | $ 493,268 | $ 173,178 | $ 24,534 | $ (8,292) | $ 303,848 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Jun. 28, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | 1. BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements of Patrick Industries, Inc. (“Patrick”, the “Company”, "we", "our") contain all adjustments (consisting of normal recurring adjustments) that we believe are necessary to present fairly the Company’s financial position as of June 28, 2020 and December 31, 2019 , and its results of operations and cash flows for the second quarter and six months ended June 28, 2020 and June 30, 2019 . Patrick’s unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission and in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to those rules or regulations. Certain immaterial reclassifications have been made to the prior period presentation to conform to the current period presentation. For a description of significant accounting policies used by the Company in the preparation of its consolidated financial statements, please refer to Note 1 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 . The December 31, 2019 condensed consolidated statement of financial position data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. Operating results for the second quarter and six months ended June 28, 2020 are not necessarily indicative of the results to be expected for the full year ending December 31, 2020 . The Company maintains its financial records on the basis of a fiscal year ending on December 31, with the fiscal quarters spanning approximately thirteen weeks. The first quarter ends on the Sunday closest to the end of the first thirteen-week period. The second and third quarters are thirteen weeks in duration and the fourth quarter is the remainder of the year. The second quarter of fiscal year 2020 ended on June 28, 2020 and the second quarter of fiscal year 2019 ended on June 30, 2019. In preparation of Patrick’s condensed consolidated financial statements as of and for the second quarter and six months ended June 28, 2020 |
RECENTLY ISSUED ACCOUNTING PRON
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | 6 Months Ended |
Jun. 28, 2020 | |
Accounting Policies [Abstract] | |
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | 2. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS Goodwill Impairment In January 2017, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2017-04, " Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ". This ASU simplifies the accounting for goodwill impairments by eliminating step two from the goodwill impairment test. The standard requires that the impairment loss be measured as the excess of the reporting unit's carrying amount over its fair value. It eliminates the second step that requires the impairment to be measured between the implied value of a reporting unit's goodwill and its carrying value. The Company adopted ASU 2017-04 on January 1, 2020 and the adoption did not have a material impact on the condensed consolidated financial statements. Credit Losses In June 2016, the FASB issued ASU 2016-13, “ Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments ”, which amends certain provisions of Accounting Standards Codification ("ASC") 326, “Financial Instruments-Credit Loss”. The ASU changes the impairment model for most financial assets and certain other instruments. For trade and other receivables, held to maturity debt securities, loans and other instruments, entities are required to use a new forward-looking “expected loss” model that generally will result in the earlier recognition of allowances for losses. Additionally, entities are required to disclose more information with respect to credit quality indicators, including information used to track credit quality by year of origination for most financing receivables. The Company adopted ASU 2016-13 on January 1, 2020 and the adoption did not have a material impact on the condensed consolidated financial statements. Income Taxes In December 2019, the FASB issued ASU 2019-12, " Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ", a new standard to simplify the accounting for income taxes. The guidance eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences related to changes in ownership of equity method investments and foreign subsidiaries. The guidance also simplifies aspects of accounting for franchise taxes and enacted changes in tax laws or rates, and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The standard is effective for fiscal years beginning after December 15, 2020, with early adoption permitted. We are currently evaluating the impact of this standard on our consolidated financial statements. Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, " Reference Rate Reform (Topic 848) ", a new standard providing final guidance to provide temporary optional expedients and exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative reference rates, such as SOFR. Entities can elect not to apply certain modification accounting requirements to contracts affected by what the guidance calls reference rate reform, if certain criteria are met. An entity that makes this election would not have to remeasure the contracts at the modification date or reassess a previous accounting determination. Entities can elect various optional expedients that would allow them to continue applying hedge accounting for hedging relationships affected by reference rate reform, if certain criteria are met. The guidance is effective upon issuance and generally can be applied through December 31, 2022. We are currently evaluating the impact of this standard on our consolidated financial statements. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 6 Months Ended |
Jun. 28, 2020 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | 3. REVENUE RECOGNITION In the following table, revenue from contracts with customers, net of intersegment sales, is disaggregated by market type and by reportable segment, consistent with how the Company believes the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors: Second Quarter Ended June 28, 2020 (thousands) Manufacturing Distribution Total Reportable Segments Market type: Recreational Vehicle $ 139,628 $ 64,498 $ 204,126 Manufactured Housing 36,407 53,907 90,314 Industrial 61,679 8,878 70,557 Marine 54,860 4,188 59,048 Total $ 292,574 $ 131,471 $ 424,045 Six Months Ended June 28, 2020 (thousands) Manufacturing Distribution Total Reportable Segments Market type: Recreational Vehicle $ 366,413 $ 157,933 $ 524,346 Manufactured Housing 82,012 120,671 202,683 Industrial 133,126 16,023 149,149 Marine 130,289 6,810 137,099 Total $ 711,840 $ 301,437 $ 1,013,277 Second Quarter Ended June 30, 2019 (thousands) Manufacturing Distribution Total Reportable Segments Market type: Recreational Vehicle $ 240,677 $ 100,244 $ 340,921 Manufactured Housing 44,739 65,200 109,939 Industrial 62,823 9,534 72,357 Marine 86,036 3,965 90,001 Total $ 434,275 $ 178,943 $ 613,218 ` Six Months Ended June 30, 2019 (thousands) Manufacturing Distribution Total Reportable Segments Market type: Recreational Vehicle $ 475,555 $ 207,802 $ 683,357 Manufactured Housing 86,942 129,016 215,958 Industrial 123,751 17,583 141,334 Marine 173,711 7,076 180,787 Total $ 859,959 $ 361,477 $ 1,221,436 Contract Liabilities Contract liabilities, representing upfront payments from customers received prior to satisfying performance obligations, were immaterial as of the beginning and end of all periods presented and changes in contract liabilities were immaterial during all periods presented. |
INVENTORIES
INVENTORIES | 6 Months Ended |
Jun. 28, 2020 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | 4. INVENTORIES Inventories consist of the following: (thousands) June 28, 2020 December 31, 2019 Raw materials $ 174,758 $ 162,238 Work in process 14,143 14,272 Finished goods 27,617 28,446 Less: reserve for inventory obsolescence (12,054 ) (10,123 ) Total manufactured goods, net 204,464 194,833 Materials purchased for resale (distribution products) 59,523 60,918 Less: reserve for inventory obsolescence (2,296 ) (1,881 ) Total materials purchased for resale (distribution products), net 57,227 59,037 Total inventories $ 261,691 $ 253,870 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 6 Months Ended |
Jun. 28, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | 5. GOODWILL AND INTANGIBLE ASSETS Changes in the carrying amount of goodwill for the six months ended June 28, 2020 by segment are as follows: (thousands) Manufacturing Distribution Total Balance - December 31, 2019 $ 268,402 $ 50,947 $ 319,349 Acquisitions 6,008 — 6,008 Adjustments to preliminary purchase price allocations (603 ) 1,724 1,121 Balance - June 28, 2020 $ 273,807 $ 52,671 $ 326,478 Intangible assets, net consist of the following as of June 28, 2020 and December 31, 2019 : (thousands) June 28, Weighted Average Useful Life December 31, Weighted Average Useful Life Customer relationships $ 360,962 10.1 $ 357,513 10.1 Non-compete agreements 15,149 5.0 16,202 5.0 Patents 16,495 14.6 16,495 14.6 Trademarks 89,058 Indefinite 88,524 Indefinite 481,664 478,734 Less: accumulated amortization (136,759 ) (121,720 ) Intangible assets, net $ 344,905 $ 357,014 Changes in the carrying value of intangible assets for the six months ended June 28, 2020 by segment are as follows: (thousands) Manufacturing Distribution Total Balance - December 31, 2019 $ 282,123 $ 74,891 $ 357,014 Acquisitions 9,220 — 9,220 Amortization (15,838 ) (3,541 ) (19,379 ) Impairment of intangible assets (1) (119 ) (1,831 ) (1,950 ) Adjustments to preliminary purchase price allocations 138 (138 ) — Balance - June 28, 2020 $ 275,524 $ 69,381 $ 344,905 (1) Certain immaterial operations permanently ceased activities during the second quarter of 2020. As a result, we recorded a $2.0 million pre-tax impairment of customer relationships and trademarks of these operations after determining the net carrying value of the assets was no longer recoverable. The impairment was calculated using our internal projections of discounted cash flows, which rely on Level 3 inputs in the fair value hierarchy based on the unobservable nature of the underlying data. The impairment was recorded in selling, general and administrative in our condensed consolidated statements of income for the second quarter and six months ended June 28, 2020. Valuation of Goodwill and Indefinite-Lived Intangibles We test goodwill and indefinite-lived intangible assets (trademarks) for impairment on an annual basis (as of September 30, 2019 for our most recent annual tests) and, if certain events or circumstances indicate that an impairment loss may have been incurred, on an interim basis. Our 2019 tests indicated that there was no impairment, as fair value exceeded carrying values, and we concluded that none of our reporting units or trademarks were at risk of failing the impairment test. Despite the excess fair value identified in our 2019 impairment tests, we assessed during the quarter and six months ended June 28, 2020 whether the impact of the COVID-19 pandemic on overall macroeconomic conditions and our operating income for the second quarter and six months ended June 28, 2020 indicated that at June 28, 2020 it was more likely than not that our goodwill and trademarks were impaired. We evaluated among other factors (i) the results of our 2019 impairment tests; (ii) our market capitalization at June 28, 2020 in relation to the carrying amount of shareholders’ equity at June 28, 2020 and to fair values determined during our 2019 impairment tests; (iii) the results of our operations during the second quarter and six months ended June 28, 2020 in relation to our projections; and (iv) our analysis of the impact on the fair values determined during our 2019 impairment tests using more recent projections and discount rates that account for various risks and uncertainties, including the duration and extent of impact to our business, related to the COVID-19 pandemic. Based on the results of our assessment, and other than immaterial impairments discussed above, we determined it was more likely than not that our goodwill and trademarks were not impaired as of June 28, 2020. However, we are unable to predict how long the COVID-19-related conditions will persist, what additional measures may be introduced by governments or private parties, or what effect any such additional measures may have on demand for our products or those of our customers in each of our end markets. As such, we may be required to perform quantitative impairment tests in future periods preceding our annual impairment test date, and the outcome of such tests could result in an impairment of our goodwill or our trademarks. |
ACQUISITIONS
ACQUISITIONS | 6 Months Ended |
Jun. 28, 2020 | |
Business Combinations [Abstract] | |
ACQUISITIONS | 6. ACQUISITIONS General The Company did not make any acquisitions in the second quarter of 2020 and completed three acquisitions in the first six months of 2020 (the "2020 Acquisitions"). For the second quarter and six months ended June 28, 2020, net sales included in the Company's condensed consolidated statements of income related to the 2020 acquisitions were $3.3 million and $3.8 million , respectively. Acquisition-related costs incurred in the first six months of 2020 were immaterial. The Company made no acquisitions in the first six months of 2019. As of June 28, 2020 , the aggregate fair value of the estimated contingent consideration payments was $7.8 million, $5.9 million of which is included in the line item "Accrued liabilities" and $1.9 million is included in “Other long-term liabilities” on the condensed consolidated statement of financial position. At December 31, 2019, the aggregate fair value of the estimated contingent consideration payments was $9.6 million , $2.0 million of which was included in the line item "Accrued liabilities" and $7.6 million was included in "Other long-term liabilities". The liabilities for contingent consideration expire at various dates through December 2023. The contingent consideration arrangements are subject to a maximum payment amount of up to $12.3 million in the aggregate. In the first six months of 2020, the Company made cash payments of $2.0 million related to contingent consideration arrangements, recording a corresponding reduction to accrued liabilities. 2020 Acquisitions Acquisitions completed in the first six months of 2020 include the previously announced acquisitions of Maple City Woodworking Corporation, a Goshen, Indiana-based manufacturer of hardwood cabinet doors and fascia for the recreational vehicle market, and SEI Manufacturing, Inc., a Cromwell, Indiana-based manufacturer of towers, T-Tops, hardtops, rails, gates and other aluminum exterior products for the marine market. The total cash consideration for the 2020 Acquisitions was $25.0 million . The preliminary purchase price allocations are subject to valuation activities being finalized, and thus all required purchase accounting adjustments are subject to change within the measurement period as the Company finalizes its estimates. The 2020 Acquisitions are included in the Manufacturing segment. 2019 Acquisitions The Company completed three acquisitions in 2019 ( the "2019 Acquisitions"), including the previously announced acquisitions of Topline Counters, LLC, a Sumner, Washington-based designer and manufacturer of kitchen and bathroom countertops for residential and commercial markets, and G.G. Schmitt & Sons, Inc. ("G.G. Schmitt"), a Sarasota, Florida-based designer and manufacturer of customized hardware and structural components for the marine industry. The total cash consideration for the 2019 Acquisitions was $53.1 million , plus contingent consideration over a one -year period based on future performance in connection with the acquisition of G.G. Schmitt. The preliminary purchase price allocations are subject to valuation activities being finalized, and thus all required purchase accounting adjustments are subject to change within the measurement period as the Company finalizes its estimates. Changes to preliminary purchase accounting estimates recorded in the second quarter and first six months of 2020 related to the 2019 Acquisitions were immaterial. The 2019 Acquisitions are included in the Manufacturing segment. The following table summarizes the fair values of the assets acquired and the liabilities assumed as of the date of acquisition for the 2020 Acquisitions and the 2019 Acquisitions: (thousands) Trade receivables Inventories Property, plant and equipment Prepaid expenses & other Intangible assets Goodwill Less: Total liabilities Less: Deferred tax liability, net Total net assets acquired 2020 $ 962 $ 1,883 $ 7,913 $ 17 $ 9,220 $ 6,008 $ 1,005 $ — $ 24,998 2019 (1) $ 9,711 $ 6,012 $ 5,380 $ 104 $ 17,765 $ 25,205 $ 6,512 $ 1,922 $ 55,743 (1) Total net assets acquired for the 2019 Acquisitions reflect the preliminary estimated liability of $2.6 million pertaining to the fair value of contingent consideration based on future performance relating to the acquisition of G.G. Schmitt. Pro Forma Information The following pro forma information for the second quarter and six months ended June 28, 2020 and June 30, 2019 assumes the 2020 Acquisitions and the 2019 Acquisitions occurred as of the beginning of the year immediately preceding each such acquisition. The pro forma information contains the actual operating results of the 2020 Acquisitions and 2019 Acquisitions combined with the results prior to their respective acquisition dates, adjusted to reflect the pro forma impact of the acquisitions occurring as of the beginning of the year immediately preceding each such acquisition. The pro forma information includes financing and interest expense charges based on incremental borrowings incurred in connection with each transaction. In addition, the pro forma information includes amortization expense, in the aggregate, related to intangible assets acquired in connection with the transactions of $ 0.2 million for the six months ended June 28, 2020 and $ 0.6 million and $ 1.2 million for the second quarter and six months ended June 30, 2019, respectively. Second Quarter Ended Six Months Ended (thousands except per share data) June 28, 2020 June 30, 2019 June 28, 2020 June 30, 2019 Revenue $ 424,045 $ 636,454 $ 1,018,631 $ 1,267,907 Net income 714 28,949 22,480 51,140 Basic net income per common share 0.03 1.25 0.98 2.22 Diluted net income per common share 0.03 1.24 0.97 2.20 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended |
Jun. 28, 2020 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | 7. STOCK-BASED COMPENSATION The Company recorded expense of $2.0 million and $6.3 million for the second quarter and six months ended June 28, 2020, respectively, for its stock-based compensation plans in the condensed consolidated statements of income. Stock-based compensation expense for the second quarter and six months ended June 28, 2020 includes a reduction of expense due to certain forfeitures and adjustments in the amount of $2.4 million. For the second quarter and six months ended June 30, 2019, the Company recorded stock-based compensation expense of $4.3 million and $8.2 million , respectively. The Board approved various stock-based grants under the Company’s 2009 Omnibus Incentive Plan in the first six months of 2020 totaling 275,740 shares in the aggregate at an average fair value of $53.78 at grant date for a total fair value at grant date of $14.8 million . In addition, in the second quarter of 2020, the Board approved stock option grants representing 465,000 shares in the aggregate at an exercise price of $41.33 per share. The total cost to be expensed over the three-year vesting period will be $6.6 million , or $14.25 per share, with an underlying volatility of 42% under the Black Scholes option pricing model. As of June 28, 2020, there was approximately $30.3 million of total unrecognized compensation cost related to stock-based compensation arrangements granted under incentive plans. That cost is expected to be recognized over a weighted-average period of 19.9 months. |
NET INCOME PER COMMON SHARE
NET INCOME PER COMMON SHARE | 6 Months Ended |
Jun. 28, 2020 | |
Earnings Per Share [Abstract] | |
NET INCOME PER COMMON SHARE | 8. NET INCOME PER COMMON SHARE Net income per common share calculated for the second quarter and six months of 2020 and 2019 is as follows: Second Quarter Ended Six Months Ended (thousands except per share data) June 28, 2020 June 30, 2019 June 28, 2020 June 30, 2019 Net income for basic and diluted per share calculation $ 714 $ 27,416 $ 21,901 $ 48,265 Weighted average common shares outstanding - basic 22,667 23,102 22,840 23,071 Effect of potentially dilutive securities 265 214 258 211 Weighted average common shares outstanding - diluted 22,932 23,316 23,098 23,282 Basic net income per common share $ 0.03 $ 1.19 $ 0.96 $ 2.09 Diluted net income per common share $ 0.03 $ 1.18 $ 0.95 $ 2.07 |
DEBT
DEBT | 6 Months Ended |
Jun. 28, 2020 | |
Debt Disclosure [Abstract] | |
DEBT | 9. DEBT A summary of total debt outstanding at June 28, 2020 and December 31, 2019 is as follows: (thousands) June 28, 2020 December 31, 2019 Long-term debt: Revolver due 2024 $ 135,000 $ 135,000 Term loan due 2024 96,250 97,500 7.5% senior notes due 2027 300,000 300,000 1.0% convertible notes due 2023 172,500 172,500 Total long-term debt 703,750 705,000 Less: convertible notes debt discount, net (19,755 ) (23,260 ) Less: senior notes deferred financing costs, net (5,365 ) (5,844 ) Less: current maturities of long-term debt (5,000 ) (5,000 ) Less: term loan deferred financing costs, net (492 ) (542 ) Total long-term debt, less current maturities, net $ 673,138 $ 670,354 There were no material changes to any of our debt arrangements during the second quarter and six months ended June 28, 2020. Interest rates for borrowings under the revolver and term loan are the prime rate or LIBOR plus a margin. At June 28, 2020 , all of the Company's borrowings under the revolver and term loan were under the LIBOR-based option. The interest rate for incremental borrowings at June 28, 2020 was LIBOR plus 1.5% (or 1.69% ) for the LIBOR-based option. The fee payable on committed but unused portions of the revolver was 0.20% at June 28, 2020 . Total cash interest paid was $15.6 million and $6.3 million for the second quarter of 2020 and 2019, respectively, and $18.2 million and $12.8 million |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 6 Months Ended |
Jun. 28, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS | 10. DERIVATIVE FINANCIAL INSTRUMENTS The Company's credit facility exposes the Company to risks associated with the variability in interest expense associated with fluctuations in LIBOR. To partially mitigate this risk, the Company has historically entered into interest rate swaps. As of June 28, 2020 , the Company had a combined notional principal amount of $200.0 million of interest rate swap agreements, all of which are designated as cash flow hedges. These swap agreements effectively convert the interest expense associated with a portion of the Company's variable rate debt from variable interest rates to fixed interest rates and have maturities ranging from February 2022 to March 2022. The following table summarizes the fair value of derivative contracts included in the condensed consolidated statements of financial position (in thousands): Fair value of derivative instruments Derivatives accounted for as cash flow hedges Balance sheet location June 28, 2020 December 31, 2019 Interest rate swaps Other long-term liabilities $ 9,292 $ 5,868 The interest rate swaps are comprised of over-the-counter derivatives, which are valued using models that primarily rely on observable inputs such as yield curves, which are classified as Level 2 in the fair value hierarchy. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 6 Months Ended |
Jun. 28, 2020 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | 11. ACCUMULATED OTHER COMPREHENSIVE LOSS Accumulated other comprehensive loss includes unrealized gains and losses on derivatives that qualify as hedges of cash flows, cumulative foreign currency translation and other adjustments. The activity in accumulated other comprehensive loss during the second quarter and six months ended June 28, 2020 and June 30, 2019 was as follows: Second Quarter Ended June 28, 2020 (thousands) Cash Flow Hedges Other Foreign Currency Items Total Balance at March 29, 2020 $ (7,380 ) $ (1,270 ) $ (91 ) $ (8,741 ) Other comprehensive income (loss) (net of tax (benefit) of ($158), $0 and $0) 464 — (15 ) 449 Balance at June 28, 2020 $ (6,916 ) $ (1,270 ) $ (106 ) $ (8,292 ) Six Months Ended June 28, 2020 (thousands) Cash Flow Hedges Other Foreign Currency Items Total Balance at December 31, 2019 $ (4,374 ) $ (1,270 ) $ (54 ) $ (5,698 ) Other comprehensive loss (net of tax of $882, $0 and $0) (2,542 ) — (52 ) (2,594 ) Balance at June 28, 2020 $ (6,916 ) $ (1,270 ) $ (106 ) $ (8,292 ) Second Quarter Ended June 30, 2019 (thousands) Cash Flow Hedges Other Foreign Currency Items Total Balance at March 31, 2019 $ (3,027 ) $ (675 ) $ (5 ) $ (3,707 ) Other comprehensive loss (net of tax of $659, $0 and $0) (1,931 ) — (94 ) (2,025 ) Balance at June 30, 2019 $ (4,958 ) $ (675 ) $ (99 ) $ (5,732 ) Six Months Ended June 30, 2019 (thousands) Cash Flow Hedges Other Foreign Currency Items Total Balance at December 31, 2018 $ (1,973 ) $ (675 ) $ (32 ) $ (2,680 ) Other comprehensive loss (net of tax of $1,015, $0 and $0) (2,985 ) — (67 ) (3,052 ) Balance at June 30, 2019 $ (4,958 ) $ (675 ) $ (99 ) $ (5,732 ) |
LEASES
LEASES | 6 Months Ended |
Jun. 28, 2020 | |
Leases [Abstract] | |
LEASES | 12. LEASES Lease expense, supplemental cash flow information, and other information related to leases were as follows: Second Quarter Ended (thousands) June 28, 2020 June 30, 2019 Operating lease cost $ 8,399 $ 7,901 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 8,279 $ 6,875 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 5,474 $ 8,668 Six Months Ended (thousands) June 28, 2020 June 30, 2019 Operating lease cost $ 16,568 $ 15,688 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 16,362 $ 13,599 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 17,902 $ 9,245 Balance sheet information related to leases was as follows: (thousands, except lease term and discount rate) June 28, 2020 December 31, 2019 Assets Operating lease right-of-use assets $ 96,065 $ 93,546 Liabilities Operating lease liabilities, current portion $ 28,567 $ 27,694 Long-term operating lease liabilities 68,318 66,467 Total lease liabilities $ 96,885 $ 94,161 Weighted average remaining lease term, operating leases (in years) 4.1 4.2 Weighted average discount rate, operating leases 3.7 % 3.7 % Maturities of lease liabilities were as follows at June 28, 2020: (thousands) 2020 (excluding the six months ended June 28, 2020) $ 16,235 2021 28,873 2022 22,920 2023 17,072 2024 11,341 Thereafter 7,955 Total lease payments 104,396 Less imputed interest (7,511 ) Total $ 96,885 Leases have remaining lease terms of one year to ten years . |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jun. 28, 2020 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | 13. FAIR VALUE MEASUREMENTS The carrying amounts of cash equivalents, representing government and other money market funds traded in an active market, are reported on the condensed consolidated statements of financial position as a component of "Cash and cash equivalents". The carrying amount of cash equivalents, valued using Level 1 inputs and approximating fair value because of their relatively short maturities, was approximately $90.0 million and $132.6 million at June 28, 2020 and December 31, 2019, respectively. The estimated fair value of our senior notes, calculated using Level 2 inputs, was approximately $306.2 million and $320.3 million at June 28, 2020 and December 31, 2019, respectively. The carrying amounts of our term loan and our revolver, valued using Level 2 inputs, approximated fair value as of June 28, 2020 and December 31, 2019 based upon terms and conditions available to the Company at those dates in comparison to the terms and conditions of its outstanding debt. The estimated fair value of our convertible notes, calculated using Level 2 inputs, was approximately $166.6 million and $162.5 million as of June 28, 2020 |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 28, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 14. INCOME TAXES The effective tax rate in the second quarter of 2020 and 2019 was 44.4% and 25.1% , respectively, and the effective tax rate for the comparable six month periods was 27.2% and 23.9% , respectively. The effective tax rate for the second quarter and six months of 2020 reflects the impact of $ 2.2 million of permanent tax differences due to certain Coronavirus Aid, Relief, and Economic Security Act payroll tax credits. In addition, the effective tax rate for the first six months of 2019 includes the impact of the recognition of excess tax benefits on share-based compensation that was recorded as a reduction to income tax expense upon realization in the amount of $ 0.9 million. Cash paid for income taxes for the second quarter and six months of 2020 was immaterial. The Company paid income taxes of $21.1 million and $22.6 million in the second quarter and six months of 2019, respectively. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 6 Months Ended |
Jun. 28, 2020 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | 15. SEGMENT INFORMATION The Company has two reportable segments, Manufacturing and Distribution, which are based on its method of internal reporting, which segregates its businesses based on the manner in which its chief operating decision maker allocates resources, evaluates financial results, and determines compensation. The tables below present information about the sales and operating income of those segments. Second Quarter Ended June 28, 2020 (thousands) Manufacturing Distribution Total Net outside sales $ 292,574 $ 131,471 $ 424,045 Intersegment sales 5,114 1,085 6,199 Total sales 297,688 132,556 430,244 Operating income 22,410 6,938 29,348 Second Quarter Ended June 30, 2019 (thousands) Manufacturing Distribution Total Net outside sales $ 434,275 $ 178,943 $ 613,218 Intersegment sales 8,331 1,118 9,449 Total sales 442,606 180,061 622,667 Operating income 48,787 10,800 59,587 Six Months Ended June 28, 2020 (thousands) Manufacturing Distribution Total Net outside sales $ 711,840 $ 301,437 $ 1,013,277 Intersegment sales 12,687 2,385 15,072 Total sales 724,527 303,822 1,028,349 Operating income 68,114 16,906 85,020 Six Months Ended June 30, 2019 (thousands) Manufacturing Distribution Total Net outside sales $ 859,959 $ 361,477 $ 1,221,436 Intersegment sales 16,051 2,283 18,334 Total sales 876,010 363,760 1,239,770 Operating income 93,224 19,091 112,315 The following table presents a reconciliation of segment operating income to consolidated operating income: Second Quarter Ended Six Months Ended (thousands) June 28, 2020 June 30, 2019 June 28, 2020 June 30, 2019 Operating income for reportable segments $ 29,348 $ 59,587 $ 85,020 $ 112,315 Unallocated corporate expenses (7,464 ) (6,090 ) (14,256 ) (14,003 ) Amortization (9,778 ) (8,268 ) (19,379 ) (17,257 ) Consolidated operating income $ 12,106 $ 45,229 $ 51,385 $ 81,055 Unallocated corporate expenses include corporate general and administrative expenses comprised of wages, insurance, taxes, supplies, travel and entertainment, professional fees and other. |
STOCK REPURCHASE PROGRAMS
STOCK REPURCHASE PROGRAMS | 6 Months Ended |
Jun. 28, 2020 | |
Equity [Abstract] | |
STOCK REPURCHASE PROGRAM | 16. STOCK REPURCHASE PROGRAMS In March 2020, the Board approved a new stock repurchase program for up to $50 million of its common stock, including amounts remaining under previous authorizations. Approximately $43.5 million remains in the amount of the Company's common stock that may be acquired under the current stock repurchase program as of June 28, 2020. No stock repurchases were made in the second quarter of 2020. In the first six months 2020, the Company repurchased 456,155 shares of its common stock at an average price of $34.09 per share at an aggregate cost of $15.6 million. The Company did not repurchase any of its common stock in the second quarter and first six months of 2019. |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 6 Months Ended |
Jun. 28, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | 17. SUBSEQUENT EVENT In August 2020, the Company announced the completion of the acquisition of Inland Plywood Company (“Inland”), a supplier, laminator and wholesale distributor of treated, untreated, and laminated plywood, medium density overlay panels, and other specialty products, primarily serving the marine market as well as the recreational vehicle and industrial markets for a net initial purchase price of $ 46.0 million. Inland is headquartered in Pontiac, Michigan with an additional facility located in Cocoa, Florida. The acquisition of Inland includes the acquisition of working capital, machinery and equipment, and real estate. |
RECENTLY ISSUED ACCOUNTING PR_2
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (Policies) | 6 Months Ended |
Jun. 28, 2020 | |
Accounting Policies [Abstract] | |
Recent Issued Accounting Pronouncements | Goodwill Impairment In January 2017, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2017-04, " Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ". This ASU simplifies the accounting for goodwill impairments by eliminating step two from the goodwill impairment test. The standard requires that the impairment loss be measured as the excess of the reporting unit's carrying amount over its fair value. It eliminates the second step that requires the impairment to be measured between the implied value of a reporting unit's goodwill and its carrying value. The Company adopted ASU 2017-04 on January 1, 2020 and the adoption did not have a material impact on the condensed consolidated financial statements. Credit Losses In June 2016, the FASB issued ASU 2016-13, “ Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments ”, which amends certain provisions of Accounting Standards Codification ("ASC") 326, “Financial Instruments-Credit Loss”. The ASU changes the impairment model for most financial assets and certain other instruments. For trade and other receivables, held to maturity debt securities, loans and other instruments, entities are required to use a new forward-looking “expected loss” model that generally will result in the earlier recognition of allowances for losses. Additionally, entities are required to disclose more information with respect to credit quality indicators, including information used to track credit quality by year of origination for most financing receivables. The Company adopted ASU 2016-13 on January 1, 2020 and the adoption did not have a material impact on the condensed consolidated financial statements. Income Taxes In December 2019, the FASB issued ASU 2019-12, " Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ", a new standard to simplify the accounting for income taxes. The guidance eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences related to changes in ownership of equity method investments and foreign subsidiaries. The guidance also simplifies aspects of accounting for franchise taxes and enacted changes in tax laws or rates, and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The standard is effective for fiscal years beginning after December 15, 2020, with early adoption permitted. We are currently evaluating the impact of this standard on our consolidated financial statements. Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, " Reference Rate Reform (Topic 848) ", a new standard providing final guidance to provide temporary optional expedients and exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative reference rates, such as SOFR. Entities can elect not to apply certain modification accounting requirements to contracts affected by what the guidance calls reference rate reform, if certain criteria are met. An entity that makes this election would not have to remeasure the contracts at the modification date or reassess a previous accounting determination. Entities can elect various optional expedients that would allow them to continue applying hedge accounting for hedging relationships affected by reference rate reform, if certain criteria are met. The guidance is effective upon issuance and generally can be applied through December 31, 2022. We are currently evaluating the impact of this standard on our consolidated financial statements. |
Revenue from Contract with Customer | 3. REVENUE RECOGNITION In the following table, revenue from contracts with customers, net of intersegment sales, is disaggregated by market type and by reportable segment, consistent with how the Company believes the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors: Second Quarter Ended June 28, 2020 (thousands) Manufacturing Distribution Total Reportable Segments Market type: Recreational Vehicle $ 139,628 $ 64,498 $ 204,126 Manufactured Housing 36,407 53,907 90,314 Industrial 61,679 8,878 70,557 Marine 54,860 4,188 59,048 Total $ 292,574 $ 131,471 $ 424,045 Six Months Ended June 28, 2020 (thousands) Manufacturing Distribution Total Reportable Segments Market type: Recreational Vehicle $ 366,413 $ 157,933 $ 524,346 Manufactured Housing 82,012 120,671 202,683 Industrial 133,126 16,023 149,149 Marine 130,289 6,810 137,099 Total $ 711,840 $ 301,437 $ 1,013,277 Second Quarter Ended June 30, 2019 (thousands) Manufacturing Distribution Total Reportable Segments Market type: Recreational Vehicle $ 240,677 $ 100,244 $ 340,921 Manufactured Housing 44,739 65,200 109,939 Industrial 62,823 9,534 72,357 Marine 86,036 3,965 90,001 Total $ 434,275 $ 178,943 $ 613,218 ` Six Months Ended June 30, 2019 (thousands) Manufacturing Distribution Total Reportable Segments Market type: Recreational Vehicle $ 475,555 $ 207,802 $ 683,357 Manufactured Housing 86,942 129,016 215,958 Industrial 123,751 17,583 141,334 Marine 173,711 7,076 180,787 Total $ 859,959 $ 361,477 $ 1,221,436 Contract Liabilities Contract liabilities, representing upfront payments from customers received prior to satisfying performance obligations, were immaterial as of the beginning and end of all periods presented and changes in contract liabilities were immaterial during all periods presented. |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 6 Months Ended |
Jun. 28, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of disaggregation of revenue | In the following table, revenue from contracts with customers, net of intersegment sales, is disaggregated by market type and by reportable segment, consistent with how the Company believes the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors: Second Quarter Ended June 28, 2020 (thousands) Manufacturing Distribution Total Reportable Segments Market type: Recreational Vehicle $ 139,628 $ 64,498 $ 204,126 Manufactured Housing 36,407 53,907 90,314 Industrial 61,679 8,878 70,557 Marine 54,860 4,188 59,048 Total $ 292,574 $ 131,471 $ 424,045 Six Months Ended June 28, 2020 (thousands) Manufacturing Distribution Total Reportable Segments Market type: Recreational Vehicle $ 366,413 $ 157,933 $ 524,346 Manufactured Housing 82,012 120,671 202,683 Industrial 133,126 16,023 149,149 Marine 130,289 6,810 137,099 Total $ 711,840 $ 301,437 $ 1,013,277 Second Quarter Ended June 30, 2019 (thousands) Manufacturing Distribution Total Reportable Segments Market type: Recreational Vehicle $ 240,677 $ 100,244 $ 340,921 Manufactured Housing 44,739 65,200 109,939 Industrial 62,823 9,534 72,357 Marine 86,036 3,965 90,001 Total $ 434,275 $ 178,943 $ 613,218 ` Six Months Ended June 30, 2019 (thousands) Manufacturing Distribution Total Reportable Segments Market type: Recreational Vehicle $ 475,555 $ 207,802 $ 683,357 Manufactured Housing 86,942 129,016 215,958 Industrial 123,751 17,583 141,334 Marine 173,711 7,076 180,787 Total $ 859,959 $ 361,477 $ 1,221,436 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Jun. 28, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | Inventories consist of the following: (thousands) June 28, 2020 December 31, 2019 Raw materials $ 174,758 $ 162,238 Work in process 14,143 14,272 Finished goods 27,617 28,446 Less: reserve for inventory obsolescence (12,054 ) (10,123 ) Total manufactured goods, net 204,464 194,833 Materials purchased for resale (distribution products) 59,523 60,918 Less: reserve for inventory obsolescence (2,296 ) (1,881 ) Total materials purchased for resale (distribution products), net 57,227 59,037 Total inventories $ 261,691 $ 253,870 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 28, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | Changes in the carrying amount of goodwill for the six months ended June 28, 2020 by segment are as follows: (thousands) Manufacturing Distribution Total Balance - December 31, 2019 $ 268,402 $ 50,947 $ 319,349 Acquisitions 6,008 — 6,008 Adjustments to preliminary purchase price allocations (603 ) 1,724 1,121 Balance - June 28, 2020 $ 273,807 $ 52,671 $ 326,478 |
Schedule of intangible assets, net | Intangible assets, net consist of the following as of June 28, 2020 and December 31, 2019 : (thousands) June 28, Weighted Average Useful Life December 31, Weighted Average Useful Life Customer relationships $ 360,962 10.1 $ 357,513 10.1 Non-compete agreements 15,149 5.0 16,202 5.0 Patents 16,495 14.6 16,495 14.6 Trademarks 89,058 Indefinite 88,524 Indefinite 481,664 478,734 Less: accumulated amortization (136,759 ) (121,720 ) Intangible assets, net $ 344,905 $ 357,014 |
Schedule of changes in intangible assets | Changes in the carrying value of intangible assets for the six months ended June 28, 2020 by segment are as follows: (thousands) Manufacturing Distribution Total Balance - December 31, 2019 $ 282,123 $ 74,891 $ 357,014 Acquisitions 9,220 — 9,220 Amortization (15,838 ) (3,541 ) (19,379 ) Impairment of intangible assets (1) (119 ) (1,831 ) (1,950 ) Adjustments to preliminary purchase price allocations 138 (138 ) — Balance - June 28, 2020 $ 275,524 $ 69,381 $ 344,905 (1) Certain immaterial operations permanently ceased activities during the second quarter of 2020. As a result, we recorded a $2.0 million pre-tax impairment of customer relationships and trademarks of these operations after determining the net carrying value of the assets was no longer recoverable. The impairment was calculated using our internal projections of discounted cash flows, which rely on Level 3 inputs in the fair value hierarchy based on the unobservable nature of the underlying data. The impairment was recorded in selling, general and administrative in our condensed consolidated statements of income for the second quarter and six months ended June 28, 2020. |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 6 Months Ended |
Jun. 28, 2020 | |
Business Combinations [Abstract] | |
Schedule of assets acquired and liabilities assumed | The following table summarizes the fair values of the assets acquired and the liabilities assumed as of the date of acquisition for the 2020 Acquisitions and the 2019 Acquisitions: (thousands) Trade receivables Inventories Property, plant and equipment Prepaid expenses & other Intangible assets Goodwill Less: Total liabilities Less: Deferred tax liability, net Total net assets acquired 2020 $ 962 $ 1,883 $ 7,913 $ 17 $ 9,220 $ 6,008 $ 1,005 $ — $ 24,998 2019 (1) $ 9,711 $ 6,012 $ 5,380 $ 104 $ 17,765 $ 25,205 $ 6,512 $ 1,922 $ 55,743 (1) Total net assets acquired for the 2019 Acquisitions reflect the preliminary estimated liability of $2.6 million pertaining to the fair value of contingent consideration based on future performance relating to the acquisition of G.G. Schmitt. |
Schedule of pro forma information | The pro forma information includes financing and interest expense charges based on incremental borrowings incurred in connection with each transaction. In addition, the pro forma information includes amortization expense, in the aggregate, related to intangible assets acquired in connection with the transactions of $ 0.2 million for the six months ended June 28, 2020 and $ 0.6 million and $ 1.2 million for the second quarter and six months ended June 30, 2019, respectively. Second Quarter Ended Six Months Ended (thousands except per share data) June 28, 2020 June 30, 2019 June 28, 2020 June 30, 2019 Revenue $ 424,045 $ 636,454 $ 1,018,631 $ 1,267,907 Net income 714 28,949 22,480 51,140 Basic net income per common share 0.03 1.25 0.98 2.22 Diluted net income per common share 0.03 1.24 0.97 2.20 |
NET INCOME PER COMMON SHARE (Ta
NET INCOME PER COMMON SHARE (Tables) | 6 Months Ended |
Jun. 28, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per share | Net income per common share calculated for the second quarter and six months of 2020 and 2019 is as follows: Second Quarter Ended Six Months Ended (thousands except per share data) June 28, 2020 June 30, 2019 June 28, 2020 June 30, 2019 Net income for basic and diluted per share calculation $ 714 $ 27,416 $ 21,901 $ 48,265 Weighted average common shares outstanding - basic 22,667 23,102 22,840 23,071 Effect of potentially dilutive securities 265 214 258 211 Weighted average common shares outstanding - diluted 22,932 23,316 23,098 23,282 Basic net income per common share $ 0.03 $ 1.19 $ 0.96 $ 2.09 Diluted net income per common share $ 0.03 $ 1.18 $ 0.95 $ 2.07 |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended |
Jun. 28, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of total debt outstanding | A summary of total debt outstanding at June 28, 2020 and December 31, 2019 is as follows: (thousands) June 28, 2020 December 31, 2019 Long-term debt: Revolver due 2024 $ 135,000 $ 135,000 Term loan due 2024 96,250 97,500 7.5% senior notes due 2027 300,000 300,000 1.0% convertible notes due 2023 172,500 172,500 Total long-term debt 703,750 705,000 Less: convertible notes debt discount, net (19,755 ) (23,260 ) Less: senior notes deferred financing costs, net (5,365 ) (5,844 ) Less: current maturities of long-term debt (5,000 ) (5,000 ) Less: term loan deferred financing costs, net (492 ) (542 ) Total long-term debt, less current maturities, net $ 673,138 $ 670,354 |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 6 Months Ended |
Jun. 28, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of derivative liabilities at fair value | The following table summarizes the fair value of derivative contracts included in the condensed consolidated statements of financial position (in thousands): Fair value of derivative instruments Derivatives accounted for as cash flow hedges Balance sheet location June 28, 2020 December 31, 2019 Interest rate swaps Other long-term liabilities $ 9,292 $ 5,868 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 6 Months Ended |
Jun. 28, 2020 | |
Equity [Abstract] | |
Schedule of accumulated other comprehensive income (Loss) | The activity in accumulated other comprehensive loss during the second quarter and six months ended June 28, 2020 and June 30, 2019 was as follows: Second Quarter Ended June 28, 2020 (thousands) Cash Flow Hedges Other Foreign Currency Items Total Balance at March 29, 2020 $ (7,380 ) $ (1,270 ) $ (91 ) $ (8,741 ) Other comprehensive income (loss) (net of tax (benefit) of ($158), $0 and $0) 464 — (15 ) 449 Balance at June 28, 2020 $ (6,916 ) $ (1,270 ) $ (106 ) $ (8,292 ) Six Months Ended June 28, 2020 (thousands) Cash Flow Hedges Other Foreign Currency Items Total Balance at December 31, 2019 $ (4,374 ) $ (1,270 ) $ (54 ) $ (5,698 ) Other comprehensive loss (net of tax of $882, $0 and $0) (2,542 ) — (52 ) (2,594 ) Balance at June 28, 2020 $ (6,916 ) $ (1,270 ) $ (106 ) $ (8,292 ) Second Quarter Ended June 30, 2019 (thousands) Cash Flow Hedges Other Foreign Currency Items Total Balance at March 31, 2019 $ (3,027 ) $ (675 ) $ (5 ) $ (3,707 ) Other comprehensive loss (net of tax of $659, $0 and $0) (1,931 ) — (94 ) (2,025 ) Balance at June 30, 2019 $ (4,958 ) $ (675 ) $ (99 ) $ (5,732 ) Six Months Ended June 30, 2019 (thousands) Cash Flow Hedges Other Foreign Currency Items Total Balance at December 31, 2018 $ (1,973 ) $ (675 ) $ (32 ) $ (2,680 ) Other comprehensive loss (net of tax of $1,015, $0 and $0) (2,985 ) — (67 ) (3,052 ) Balance at June 30, 2019 $ (4,958 ) $ (675 ) $ (99 ) $ (5,732 ) |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jun. 28, 2020 | |
Leases [Abstract] | |
Lease expense, supplemental cash flow and other lease information | Lease expense, supplemental cash flow information, and other information related to leases were as follows: Second Quarter Ended (thousands) June 28, 2020 June 30, 2019 Operating lease cost $ 8,399 $ 7,901 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 8,279 $ 6,875 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 5,474 $ 8,668 Six Months Ended (thousands) June 28, 2020 June 30, 2019 Operating lease cost $ 16,568 $ 15,688 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 16,362 $ 13,599 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 17,902 $ 9,245 |
Lease assets and liabilities | Balance sheet information related to leases was as follows: (thousands, except lease term and discount rate) June 28, 2020 December 31, 2019 Assets Operating lease right-of-use assets $ 96,065 $ 93,546 Liabilities Operating lease liabilities, current portion $ 28,567 $ 27,694 Long-term operating lease liabilities 68,318 66,467 Total lease liabilities $ 96,885 $ 94,161 Weighted average remaining lease term, operating leases (in years) 4.1 4.2 Weighted average discount rate, operating leases 3.7 % 3.7 % |
Operating lease liability maturity | Maturities of lease liabilities were as follows at June 28, 2020: (thousands) 2020 (excluding the six months ended June 28, 2020) $ 16,235 2021 28,873 2022 22,920 2023 17,072 2024 11,341 Thereafter 7,955 Total lease payments 104,396 Less imputed interest (7,511 ) Total $ 96,885 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 6 Months Ended |
Jun. 28, 2020 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting information | The tables below present information about the sales and operating income of those segments. Second Quarter Ended June 28, 2020 (thousands) Manufacturing Distribution Total Net outside sales $ 292,574 $ 131,471 $ 424,045 Intersegment sales 5,114 1,085 6,199 Total sales 297,688 132,556 430,244 Operating income 22,410 6,938 29,348 Second Quarter Ended June 30, 2019 (thousands) Manufacturing Distribution Total Net outside sales $ 434,275 $ 178,943 $ 613,218 Intersegment sales 8,331 1,118 9,449 Total sales 442,606 180,061 622,667 Operating income 48,787 10,800 59,587 Six Months Ended June 28, 2020 (thousands) Manufacturing Distribution Total Net outside sales $ 711,840 $ 301,437 $ 1,013,277 Intersegment sales 12,687 2,385 15,072 Total sales 724,527 303,822 1,028,349 Operating income 68,114 16,906 85,020 Six Months Ended June 30, 2019 (thousands) Manufacturing Distribution Total Net outside sales $ 859,959 $ 361,477 $ 1,221,436 Intersegment sales 16,051 2,283 18,334 Total sales 876,010 363,760 1,239,770 Operating income 93,224 19,091 112,315 |
Summary of the reconciliation of segment operations | The following table presents a reconciliation of segment operating income to consolidated operating income: Second Quarter Ended Six Months Ended (thousands) June 28, 2020 June 30, 2019 June 28, 2020 June 30, 2019 Operating income for reportable segments $ 29,348 $ 59,587 $ 85,020 $ 112,315 Unallocated corporate expenses (7,464 ) (6,090 ) (14,256 ) (14,003 ) Amortization (9,778 ) (8,268 ) (19,379 ) (17,257 ) Consolidated operating income $ 12,106 $ 45,229 $ 51,385 $ 81,055 |
REVENUE RECOGNITION - Schedule
REVENUE RECOGNITION - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2020 | Jun. 30, 2019 | Jun. 28, 2020 | Jun. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
NET SALES | $ 424,045 | $ 613,218 | $ 1,013,277 | $ 1,221,436 |
Recreational Vehicle | ||||
Disaggregation of Revenue [Line Items] | ||||
NET SALES | 204,126 | 340,921 | 524,346 | 683,357 |
Manufactured Housing | ||||
Disaggregation of Revenue [Line Items] | ||||
NET SALES | 90,314 | 109,939 | 202,683 | 215,958 |
Industrial | ||||
Disaggregation of Revenue [Line Items] | ||||
NET SALES | 70,557 | 72,357 | 149,149 | 141,334 |
Marine | ||||
Disaggregation of Revenue [Line Items] | ||||
NET SALES | 59,048 | 90,001 | 137,099 | 180,787 |
Manufacturing | ||||
Disaggregation of Revenue [Line Items] | ||||
NET SALES | 292,574 | 434,275 | 711,840 | 859,959 |
Manufacturing | Recreational Vehicle | ||||
Disaggregation of Revenue [Line Items] | ||||
NET SALES | 139,628 | 240,677 | 366,413 | 475,555 |
Manufacturing | Manufactured Housing | ||||
Disaggregation of Revenue [Line Items] | ||||
NET SALES | 36,407 | 44,739 | 82,012 | 86,942 |
Manufacturing | Industrial | ||||
Disaggregation of Revenue [Line Items] | ||||
NET SALES | 61,679 | 62,823 | 133,126 | 123,751 |
Manufacturing | Marine | ||||
Disaggregation of Revenue [Line Items] | ||||
NET SALES | 54,860 | 86,036 | 130,289 | 173,711 |
Distribution | ||||
Disaggregation of Revenue [Line Items] | ||||
NET SALES | 131,471 | 178,943 | 301,437 | 361,477 |
Distribution | Recreational Vehicle | ||||
Disaggregation of Revenue [Line Items] | ||||
NET SALES | 64,498 | 100,244 | 157,933 | 207,802 |
Distribution | Manufactured Housing | ||||
Disaggregation of Revenue [Line Items] | ||||
NET SALES | 53,907 | 65,200 | 120,671 | 129,016 |
Distribution | Industrial | ||||
Disaggregation of Revenue [Line Items] | ||||
NET SALES | 8,878 | 9,534 | 16,023 | 17,583 |
Distribution | Marine | ||||
Disaggregation of Revenue [Line Items] | ||||
NET SALES | $ 4,188 | $ 3,965 | $ 6,810 | $ 7,076 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Jun. 28, 2020 | Dec. 31, 2019 |
Inventory [Line Items] | ||
Raw materials | $ 174,758 | $ 162,238 |
Work in process | 14,143 | 14,272 |
Finished goods | 27,617 | 28,446 |
Total manufactured goods, net | 204,464 | 194,833 |
Materials purchased for resale (distribution products) | 59,523 | 60,918 |
Total materials purchased for resale (distribution products), net | 57,227 | 59,037 |
Total inventories | 261,691 | 253,870 |
Manufactured Goods | ||
Inventory [Line Items] | ||
Less: reserve for inventory obsolescence | (12,054) | (10,123) |
Distributed Goods | ||
Inventory [Line Items] | ||
Less: reserve for inventory obsolescence | $ (2,296) | $ (1,881) |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Carrying Amount of Goodwill by Segment (Details) $ in Thousands | 6 Months Ended |
Jun. 28, 2020USD ($) | |
Goodwill [Roll Forward] | |
Balance - December 31, 2019 | $ 319,349 |
Acquisitions | 6,008 |
Adjustments to preliminary purchase price allocations | 1,121 |
Balance - June 28, 2020 | 326,478 |
Manufacturing | |
Goodwill [Roll Forward] | |
Balance - December 31, 2019 | 268,402 |
Acquisitions | 6,008 |
Adjustments to preliminary purchase price allocations | (603) |
Balance - June 28, 2020 | 273,807 |
Distribution | |
Goodwill [Roll Forward] | |
Balance - December 31, 2019 | 50,947 |
Acquisitions | 0 |
Adjustments to preliminary purchase price allocations | 1,724 |
Balance - June 28, 2020 | $ 52,671 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Intangible Assets, Net, by Major Class (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 28, 2020 | Dec. 31, 2019 | |
Intangible Assets [Line Items] | ||
Total other intangible assets, net, excluding accumulated amortization | $ 481,664 | $ 478,734 |
Less: accumulated amortization | (136,759) | (121,720) |
Intangible assets, net | 344,905 | 357,014 |
Trademarks | ||
Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | 89,058 | 88,524 |
Customer relationships | ||
Intangible Assets [Line Items] | ||
Finite-lived intangible assets | $ 360,962 | $ 357,513 |
Intangible assets, weighted average useful life | 10 years 1 month 6 days | 10 years 1 month 6 days |
Non-compete agreements | ||
Intangible Assets [Line Items] | ||
Finite-lived intangible assets | $ 15,149 | $ 16,202 |
Intangible assets, weighted average useful life | 5 years | 5 years |
Patents | ||
Intangible Assets [Line Items] | ||
Finite-lived intangible assets | $ 16,495 | $ 16,495 |
Intangible assets, weighted average useful life | 14 years 7 months 6 days | 14 years 7 months 6 days |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - Intangible Assets by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2020 | Jun. 30, 2019 | Jun. 28, 2020 | Jun. 30, 2019 | |
Intangible Assets [Roll Forward] | ||||
Balance - December 31, 2019 | $ 357,014 | |||
Acquisitions | 9,220 | |||
Amortization | $ (9,778) | $ (8,268) | (19,379) | $ (17,257) |
Impairment of intangible assets | (2,000) | (1,950) | ||
Adjustments to preliminary purchase price allocations | 0 | |||
Balance - June 28, 2020 | 344,905 | 344,905 | ||
Manufacturing | ||||
Intangible Assets [Roll Forward] | ||||
Balance - December 31, 2019 | 282,123 | |||
Acquisitions | 9,220 | |||
Amortization | (15,838) | |||
Impairment of intangible assets | (119) | |||
Adjustments to preliminary purchase price allocations | 138 | |||
Balance - June 28, 2020 | 275,524 | 275,524 | ||
Distribution | ||||
Intangible Assets [Roll Forward] | ||||
Balance - December 31, 2019 | 74,891 | |||
Acquisitions | 0 | |||
Amortization | (3,541) | |||
Impairment of intangible assets | (1,831) | |||
Adjustments to preliminary purchase price allocations | (138) | |||
Balance - June 28, 2020 | $ 69,381 | $ 69,381 |
ACQUISITIONS - Narrative (Detai
ACQUISITIONS - Narrative (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 28, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 28, 2020USD ($)acquisition | Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($)acquisition | |
Business Acquisition [Line Items] | |||||
Number of acquisitions | acquisition | 3 | 3 | |||
Excluding assessed tax | $ 424,045 | $ 613,218 | $ 1,013,277 | $ 1,221,436 | |
Fair value of estimated contingent consideration payments | 7,800 | 7,800 | $ 9,600 | ||
Contingent consideration arrangements maximum payments amount | 12,300 | 12,300 | |||
Cash payments related to contingent consideration liabilities | 2,000 | 4,416 | |||
Business combination contingent consideration | 1 year | ||||
Net initial purchase price | $ 53,100 | ||||
Amortization expense | $ 600 | 200 | $ 1,200 | ||
Acquired Entities | |||||
Business Acquisition [Line Items] | |||||
Excluding assessed tax | 3,300 | 3,800 | |||
Maple City Woodworking Corporation | |||||
Business Acquisition [Line Items] | |||||
Net initial purchase price | 25,000 | ||||
Accrued Liabilities | |||||
Business Acquisition [Line Items] | |||||
Fair value of estimated contingent consideration payments | 5,900 | 5,900 | 2,000 | ||
Other Long-term Liabilities | |||||
Business Acquisition [Line Items] | |||||
Fair value of estimated contingent consideration payments | $ 1,900 | $ 1,900 | $ 7,600 |
ACQUISITIONS - Fair Value of As
ACQUISITIONS - Fair Value of Assets Acquired, Summary (Details) - USD ($) $ in Thousands | Jun. 28, 2020 | Dec. 31, 2019 |
Business Acquisition [Line Items] | ||
Goodwill | $ 326,478 | $ 319,349 |
Contingent consideration liability | 7,800 | 9,600 |
Acquired Entities | ||
Business Acquisition [Line Items] | ||
Trade receivables | 962 | 9,711 |
Inventories | 1,883 | 6,012 |
Property, plant and equipment | 7,913 | 5,380 |
Prepaid expenses & other | 17 | 104 |
Intangible assets | 9,220 | 17,765 |
Goodwill | 6,008 | 25,205 |
Less: Total liabilities | 1,005 | 6,512 |
Less: Deferred tax liability, net | 0 | 1,922 |
Total net assets acquired | $ 24,998 | 55,743 |
G.G. Schmitt & Sons, Inc. | ||
Business Acquisition [Line Items] | ||
Contingent consideration liability | $ 2,600 |
ACQUISITIONS - Pro Forma Inform
ACQUISITIONS - Pro Forma Information Related to Acquisitions (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2020 | Jun. 30, 2019 | Jun. 28, 2020 | Jun. 30, 2019 | |
Business Combinations [Abstract] | ||||
Revenue | $ 424,045 | $ 636,454 | $ 1,018,631 | $ 1,267,907 |
Net income | $ 714 | $ 28,949 | $ 22,480 | $ 51,140 |
Basic net income per common share (in dollars per share) | $ 0.03 | $ 1.25 | $ 0.98 | $ 2.22 |
Diluted net income per common share (in dollars per share) | $ 0.03 | $ 1.24 | $ 0.97 | $ 2.20 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2020 | Jun. 30, 2019 | Jun. 28, 2020 | Jun. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 2 | $ 4.3 | $ 6.3 | $ 8.2 |
Share-based compensation expense, forfeitures and modifications | 2.4 | $ 2.4 | ||
Granted shares (in shares) | 275,740 | |||
Average fair value of shares granted (in dollars per share) | $ 53.78 | |||
Fair value of shares granted, amount | $ 14.8 | |||
Weighted average exercise price (in dollars per share) | $ 41.33 | |||
Cost to be expensed | $ 6.6 | $ 6.6 | ||
Cost to be expensed (in dollars per share) | $ 14.25 | $ 14.25 | ||
Underlying volatility (percent) | 42.00% | |||
Unrecognized compensation cost | $ 30.3 | $ 30.3 | ||
Weighted average recognition period | 19 months 27 days | |||
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares approved (in shares) | 465,000 | 465,000 | ||
Vesting period | 3 years |
NET INCOME PER COMMON SHARE - I
NET INCOME PER COMMON SHARE - Income Per Share Calculation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2020 | Jun. 30, 2019 | Jun. 28, 2020 | Jun. 30, 2019 | |
Earnings Per Share [Abstract] | ||||
Net income for basic and diluted per share calculation | $ 714 | $ 27,416 | $ 21,901 | $ 48,265 |
Weighted average shares outstanding - basic (in shares) | 22,667 | 23,102 | 22,840 | 23,071 |
Effect of potentially dilutive securities (in shares) | 265 | 214 | 258 | 211 |
Weighted average common shares outstanding - diluted (in shares) | 22,932 | 23,316 | 23,098 | 23,282 |
Basic net income per common share (in dollars per share) | $ 0.03 | $ 1.19 | $ 0.96 | $ 2.09 |
Diluted net income per common share (in dollars per share) | $ 0.03 | $ 1.18 | $ 0.95 | $ 2.07 |
DEBT - Schedule of Long-term De
DEBT - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands | Jun. 28, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Total long-term debt | $ 703,750 | $ 705,000 |
Less: convertible notes debt discount, net | (19,755) | (23,260) |
Less: current maturities of long-term debt | (5,000) | (5,000) |
Less: term loan deferred financing costs, net | (492) | (542) |
Total long-term debt, less current maturities, net | 673,138 | 670,354 |
Revolver due 2024 | ||
Debt Instrument [Line Items] | ||
Total long-term debt | 135,000 | 135,000 |
Term loan due 2024 | ||
Debt Instrument [Line Items] | ||
Total long-term debt | $ 96,250 | 97,500 |
1.0% convertible notes due 2023 | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 1.00% | |
Total long-term debt | $ 172,500 | 172,500 |
7.5% senior notes due 2027 | Senior Notes | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 7.50% | |
7.5% senior notes due 2027 | $ 300,000 | 300,000 |
Less: senior notes deferred financing costs, net | $ (5,365) | $ (5,844) |
DEBT - Narrative (Details)
DEBT - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2020 | Jun. 30, 2019 | Jun. 28, 2020 | Jun. 30, 2019 | |
Line of Credit Facility [Line Items] | ||||
Interest paid | $ 15.6 | $ 6.3 | $ 18.2 | $ 12.8 |
Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Unused capacity, commitment fee percentage | 0.20% | |||
Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | ||||
Line of Credit Facility [Line Items] | ||||
Debt instrument, basis spread on variable rate | 1.50% | |||
Debt instrument, effective interest rate | 1.69% | 1.69% |
DERIVATIVE FINANCIAL INSTRUME_3
DERIVATIVE FINANCIAL INSTRUMENTS - Narrative (Details) $ in Millions | Jun. 28, 2020USD ($) |
Designated as Hedging Instrument | Interest Rate Swap | |
Derivative [Line Items] | |
Derivative amount | $ 200 |
DERIVATIVE FINANCIAL INSTRUME_4
DERIVATIVE FINANCIAL INSTRUMENTS - Derivative Assets and Liabilities at Fair Value (Details) - USD ($) $ in Thousands | Jun. 28, 2020 | Dec. 31, 2019 |
Designated as Hedging Instrument | Interest Rate Swap | ||
Derivative [Line Items] | ||
Fair value of derivative instruments | $ 9,292 | $ 5,868 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE LOSS - Schedule of Accumulated Other Comprehensive Income Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2020 | Jun. 30, 2019 | Jun. 28, 2020 | Jun. 30, 2019 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning Balance | $ 495,376 | $ 429,089 | $ 497,481 | $ 408,754 |
Other comprehensive income (loss), net of tax | 449 | (2,025) | (2,594) | (3,052) |
Ending Balance | 493,268 | 458,617 | 493,268 | 458,617 |
Accumulated Other Comprehensive Loss | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning Balance | (8,741) | (3,707) | (5,698) | (2,680) |
Other comprehensive income (loss), net of tax | 449 | (2,025) | (2,594) | (3,052) |
Ending Balance | (8,292) | (5,732) | (8,292) | (5,732) |
Cash Flow Hedges | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning Balance | (7,380) | (3,027) | (4,374) | (1,973) |
Other comprehensive income (loss), net of tax | 464 | (1,931) | (2,542) | (2,985) |
Ending Balance | (6,916) | (4,958) | (6,916) | (4,958) |
Other comprehensive income (loss), tax | 158 | 659 | 882 | 1,015 |
Other | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning Balance | (1,270) | (675) | (1,270) | (675) |
Other comprehensive income (loss), net of tax | 0 | 0 | 0 | 0 |
Ending Balance | (1,270) | (675) | (1,270) | (675) |
Other comprehensive income (loss), tax | 0 | 0 | 0 | 0 |
Foreign Currency Items | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning Balance | (91) | (5) | (54) | (32) |
Other comprehensive income (loss), net of tax | (15) | (94) | (52) | (67) |
Ending Balance | (106) | (99) | (106) | (99) |
Other comprehensive income (loss), tax | $ 0 | $ 0 | $ 0 | $ 0 |
LEASES - Lease Expense, Supplem
LEASES - Lease Expense, Supplemental Cash Flow and Other Lease Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2020 | Jun. 30, 2019 | Jun. 28, 2020 | Jun. 30, 2019 | |
Leases [Abstract] | ||||
Operating lease cost | $ 8,399 | $ 7,901 | $ 16,568 | $ 15,688 |
Cash paid for amounts included in the measurement of lease liabilities: | ||||
Operating cash flows for operating leases | 8,279 | 6,875 | 16,362 | 13,599 |
Right-of-use assets obtained in exchange for lease obligations: | ||||
Operating leases | $ 5,474 | $ 8,668 | $ 17,902 | $ 9,245 |
LEASES - Lease Assets and Liabi
LEASES - Lease Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 28, 2020 | Dec. 31, 2019 |
Assets | ||
Operating lease right-of-use assets | $ 96,065 | $ 93,546 |
Liabilities | ||
Operating lease liabilities, current portion | 28,567 | 27,694 |
Long-term operating lease liabilities | 68,318 | 66,467 |
Total lease liabilities | $ 96,885 | $ 94,161 |
Weighted average remaining lease term, operating leases (in years) | 4 years 1 month 6 days | 4 years 2 months 12 days |
Weighted average discount rate, operating leases | 3.70% | 3.70% |
LEASES - Operating Lease Liabil
LEASES - Operating Lease Liability Maturity (Details) - USD ($) $ in Thousands | Jun. 28, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
2020 (excluding the six months ended June 28, 2020) | $ 16,235 | |
2021 | 28,873 | |
2022 | 22,920 | |
2023 | 17,072 | |
2024 | 11,341 | |
Thereafter | 7,955 | |
Total lease payments | 104,396 | |
Less imputed interest | (7,511) | |
Total lease liabilities | $ 96,885 | $ 94,161 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) | 6 Months Ended |
Jun. 28, 2020 | |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 10 years |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) $ in Millions | Jun. 28, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents, fair value | $ 90 | $ 132.6 |
Fair Value, Inputs, Level 2 | Senior Notes | 7.50% Senior Notes Due 2027 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of senior notes | 306.2 | 320.3 |
Fair Value, Inputs, Level 2 | 1.0% Convertible Notes Due 2023 | Convertible Senior Notes Due 2023 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of convertible debt | $ 166.6 | $ 162.5 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2020 | Jun. 30, 2019 | Jun. 28, 2020 | Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 44.40% | 25.10% | 27.20% | 23.90% |
Income tax impact on permanent tax | $ 2.2 | $ 2.2 | ||
Excess tax benefit tax | $ 0.9 | |||
Income taxes paid | $ 21.1 | $ 22.6 |
SEGMENT INFORMATION - Sales and
SEGMENT INFORMATION - Sales and Operating Income of Segments (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 28, 2020USD ($)segment | Jun. 30, 2019USD ($) | |
Segment Reporting Information [Line Items] | ||||
Number of reportable segments (in segments) | segment | 2 | |||
Total sales | $ 424,045 | $ 613,218 | $ 1,013,277 | $ 1,221,436 |
Operating income | 12,106 | 45,229 | 51,385 | 81,055 |
Intersegment Sales | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | (6,199) | (9,449) | (15,072) | (18,334) |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | 430,244 | 622,667 | 1,028,349 | 1,239,770 |
Operating income | 29,348 | 59,587 | 85,020 | 112,315 |
Manufacturing | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | 292,574 | 434,275 | 711,840 | 859,959 |
Manufacturing | Intersegment Sales | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | (5,114) | (8,331) | (12,687) | (16,051) |
Manufacturing | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | 297,688 | 442,606 | 724,527 | 876,010 |
Operating income | 22,410 | 48,787 | 68,114 | 93,224 |
Distribution | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | 131,471 | 178,943 | 301,437 | 361,477 |
Distribution | Intersegment Sales | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | (1,085) | (1,118) | (2,385) | (2,283) |
Distribution | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | 132,556 | 180,061 | 303,822 | 363,760 |
Operating income | $ 6,938 | $ 10,800 | $ 16,906 | $ 19,091 |
SEGMENT INFORMATION - Reconcili
SEGMENT INFORMATION - Reconciliation of Segment Operating Income to Consolidated Operating Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2020 | Jun. 30, 2019 | Jun. 28, 2020 | Jun. 30, 2019 | |
Segment Reporting Information [Line Items] | ||||
Operating income | $ 12,106 | $ 45,229 | $ 51,385 | $ 81,055 |
Unallocated corporate expenses | (61,615) | (67,432) | (131,817) | (138,154) |
Amortization | (9,778) | (8,268) | (19,379) | (17,257) |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Operating income | 29,348 | 59,587 | 85,020 | 112,315 |
Segment Reconciling Items | ||||
Segment Reporting Information [Line Items] | ||||
Unallocated corporate expenses | (7,464) | (6,090) | (14,256) | (14,003) |
Amortization | $ (9,778) | $ (8,268) | $ (19,379) | $ (17,257) |
STOCK REPURCHASE PROGRAMS - Nar
STOCK REPURCHASE PROGRAMS - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |
Jun. 28, 2020 | Jun. 28, 2020 | Mar. 29, 2020 | |
Equity [Abstract] | |||
Authorized share repurchase program amount | $ 50,000,000 | ||
Remaining authorized shares to be purchased amount | $ 43,500,000 | $ 43,500,000 | |
Shares repurchased (in shares) | 0 | 456,155 | |
Average cost per share repurchased (in dollars per share) | $ 34.09 | ||
Cost to repurchase the company's common stock | $ 15,600,000 |
SUBSEQUENT EVENT (Details)
SUBSEQUENT EVENT (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended |
Aug. 31, 2020 | Dec. 31, 2019 | |
Subsequent Event [Line Items] | ||
Net initial purchase price | $ 53.1 | |
Inland Plywood Company | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Net initial purchase price | $ 46 |