Cover
Cover - shares | 9 Months Ended | |
Sep. 28, 2019 | Oct. 31, 2019 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 28, 2019 | |
Document Transition Report | false | |
Entity File Number | 1-14315 | |
Entity Registrant Name | Cornerstone Building Brands, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 76-0127701 | |
Entity Address, Address Line One | 5020 Weston Parkway | |
Entity Address, Address Line Two | Suite 400 | |
Entity Address, City or Town | Cary | |
Entity Address, State or Province | NC | |
Entity Address, Postal Zip Code | 27513 | |
City Area Code | 888 | |
Local Phone Number | 975-9436 | |
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 $0.01 par value per share | |
Trading Symbol | CNR | |
Security Exchange Name | NYSE | |
Entity Common Stock, Shares Outstanding | 125,566,409 | |
Entity Central Index Key | 0000883902 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Jul. 29, 2018 | Sep. 28, 2019 | Jul. 29, 2018 | |
Income Statement [Abstract] | ||||
Sales | $ 1,285,043 | $ 548,525 | $ 3,645,332 | $ 1,426,943 |
Cost of sales | 975,240 | 415,124 | 2,844,949 | 1,097,542 |
Gross profit | 309,803 | 133,401 | 800,383 | 329,401 |
Selling, general and administrative expenses | 154,034 | 79,039 | 466,368 | 228,231 |
Intangible asset amortization | 44,725 | 2,412 | 132,699 | 7,237 |
Restructuring and impairment charges, net | 4,984 | (439) | 15,522 | 1,143 |
Strategic development and acquisition related costs | 10,500 | 3,642 | 36,668 | 5,503 |
Loss (gain) on disposition of business | 0 | (1,013) | 0 | 5,673 |
Gain on insurance recovery | 0 | (4,741) | 0 | (4,741) |
Income from operations | 95,560 | 54,501 | 149,126 | 86,355 |
Interest income | 155 | 48 | 491 | 118 |
Interest expense | (56,549) | (4,572) | (173,134) | (16,913) |
Foreign exchange gain (loss) | (616) | (258) | 1,084 | (92) |
Loss on extinguishment of debt | 0 | 0 | 0 | (21,875) |
Other income, net | 717 | 345 | 665 | 1,072 |
Income (loss) before income taxes | 39,267 | 50,064 | (21,768) | 48,665 |
Provision (benefit) for income taxes | 14,103 | 14,078 | (4,448) | 13,114 |
Net income (loss) | 25,164 | 35,986 | (17,320) | 35,551 |
Net income allocated to participating securities | (374) | (221) | 0 | (248) |
Net income (loss) applicable to common shares | $ 24,790 | $ 35,765 | $ (17,320) | $ 35,303 |
Income (loss) per common share: | ||||
Basic (in USD per share) | $ 0.20 | $ 0.54 | $ (0.14) | $ 0.53 |
Diluted income (loss) per common share (in USD per share) | $ 0.20 | $ 0.54 | $ (0.14) | $ 0.53 |
Weighted average number of common shares outstanding: | ||||
Basic (in shares) | 125,557 | 66,335 | 125,526 | 66,361 |
Diluted (in shares) | 125,558 | 66,438 | 125,526 | 66,477 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Jul. 29, 2018 | Sep. 28, 2019 | Jul. 29, 2018 | |
Comprehensive income (loss): | ||||
Net income (loss) | $ 25,164 | $ 35,986 | $ (17,320) | $ 35,551 |
Other comprehensive loss, net of tax: | ||||
Foreign exchange translation gains (losses) | (1,862) | (68) | 4,278 | (92) |
Unrealized loss on derivative instruments | (6,858) | 0 | (29,604) | 0 |
Other comprehensive loss | (8,720) | (68) | (25,326) | (92) |
Comprehensive income (loss) | $ 16,444 | $ 35,918 | $ (42,646) | $ 35,459 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 28, 2019 | Oct. 28, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 105,244,000 | $ 54,272,000 |
Restricted cash | 3,872,000 | 245,000 |
Accounts receivable, less allowances of $9,948 and $6,249, respectively | 594,681,000 | 233,297,000 |
Inventories, net | 467,916,000 | 254,531,000 |
Income taxes receivable | 27,641,000 | 1,012,000 |
Investments in debt and equity securities, at market | 3,569,000 | 5,285,000 |
Prepaid expenses and other | 74,882,000 | 34,821,000 |
Assets held for sale | 5,018,000 | 7,272,000 |
Total current assets | 1,282,823,000 | 590,735,000 |
Property, plant and equipment, less accumulated depreciation of $530,490 and $459,931, respectively | 643,844,000 | 236,240,000 |
Lease right-of-use assets | 308,256,000 | |
Goodwill | 1,677,929,000 | 148,291,000 |
Intangible assets, net | 1,784,937,000 | 127,529,000 |
Deferred income taxes | 0 | 982,000 |
Other assets, net | 10,667,000 | 6,598,000 |
Total assets | 5,708,456,000 | 1,110,375,000 |
Current liabilities: | ||
Current portion of long-term debt | 25,600,000 | 4,150,000 |
Note payable | 0 | 497,000 |
Payable pursuant to a tax receivable agreement | 24,760,000 | 0 |
Accounts payable | 235,247,000 | 170,663,000 |
Accrued compensation and benefits | 84,951,000 | 65,136,000 |
Accrued interest | 31,996,000 | 1,684,000 |
Accrued income taxes | 18,137,000 | 11,685,000 |
Current portion of lease liabilities | 68,993,000 | |
Other accrued expenses | 254,833,000 | 81,884,000 |
Total current liabilities | 744,517,000 | 335,699,000 |
Long-term debt | 3,267,646,000 | 403,076,000 |
Deferred income taxes | 244,062,000 | 2,250,000 |
Long-term lease liabilities | 243,624,000 | |
Other long-term liabilities | 280,722,000 | 39,085,000 |
Total long-term liabilities | 4,036,054,000 | 444,411,000 |
Stockholders’ equity: | ||
Common stock, $0.01 par value; 200,000,000, 125,621,510 and 125,566,409 shares authorized, issued and outstanding at September 28, 2019, respectively; and 100,000,000, 66,264,654 and 66,203,841 shares authorized, issued and outstanding at October 28, 2018, respectively | 1,257,000 | 663,000 |
Additional paid-in capital | 1,247,026,000 | 523,788,000 |
Accumulated deficit | (283,159,000) | (186,291,000) |
Accumulated other comprehensive loss, net | (36,139,000) | (6,708,000) |
Treasury stock, at cost (55,101 and 60,813 shares at September 28, 2019 and October 28, 2018, respectively) | (1,100,000) | (1,187,000) |
Total stockholders’ equity | 927,885,000 | 330,265,000 |
Total liabilities and stockholders’ equity | $ 5,708,456,000 | $ 1,110,375,000 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 28, 2019 | Oct. 28, 2018 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | $ 9,948 | $ 6,249 |
Accumulated depreciation on property, plant and equipment | $ 530,490 | $ 459,931 |
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 200,000,000 | 100,000,000 |
Common stock shares issued (in shares) | 125,621,510 | 66,264,654 |
Common stock, shares outstanding (in shares) | 125,566,409 | 66,203,841 |
Treasury stock, shares (in shares) | 55,101 | 60,813 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 28, 2019 | Jul. 29, 2018 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (17,320) | $ 35,551 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 191,485 | 30,974 |
Non-cash interest expense | 6,233 | 1,140 |
Loss on extinguishment of debt | 0 | 21,875 |
Share-based compensation expense | 10,613 | 8,909 |
Loss on disposition of business, net | 0 | 5,092 |
Gain on insurance recovery | 0 | (4,741) |
Non-cash fair value premium on purchased inventory | 16,249 | 0 |
Gains on asset sales, net | (335) | (875) |
Provision for doubtful accounts | (492) | (177) |
Deferred income taxes | (45,192) | (1,676) |
Changes in operating assets and liabilities, net of effect of acquisitions: | ||
Accounts receivable | (138,329) | (13,512) |
Inventories | 63,327 | (64,882) |
Income taxes | 1,256 | 2,446 |
Prepaid expenses and other | (4,374) | (3,686) |
Accounts payable | 8,486 | 34,567 |
Accrued expenses | (21,005) | 6,088 |
Other, net | (2,783) | (185) |
Net cash provided by operating activities | 67,819 | 56,908 |
Cash flows from investing activities: | ||
Acquisitions, net of cash acquired | (179,184) | 0 |
Capital expenditures | (86,364) | (34,867) |
Proceeds from sale of property, plant and equipment | 873 | 6,338 |
Business disposition, net | 0 | (1,426) |
Proceeds from insurance | 0 | 4,741 |
Net cash used in investing activities | (264,675) | (25,214) |
Cash flows from financing activities: | ||
Proceeds from stock options exercised | 0 | 1,279 |
Proceeds from ABL facility | 290,000 | 85,000 |
Payments on ABL facility | (120,000) | (85,000) |
Proceeds from term loan | 0 | 415,000 |
Payments on term loan | (12,810) | (145,184) |
Payments on senior notes | 0 | (265,470) |
Payments on note payable | 0 | (1,245) |
Payments of financing costs | 0 | (6,521) |
Payments related to tax withholding for share-based compensation | (231) | (5,048) |
Purchases of treasury stock | 0 | (46,705) |
Net cash provided by (used in) financing activities | 156,959 | (53,894) |
Effect of exchange rate changes on cash and cash equivalents | 1,406 | (92) |
Net decrease in cash, cash equivalents and restricted cash | (38,491) | (22,292) |
Cash, cash equivalents and restricted cash at beginning of period | 147,607 | 65,794 |
Cash, cash equivalents and restricted cash at end of period | $ 109,116 | $ 43,502 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Earnings (Deficit) | Accumulated Other Comprehensive Income (Loss) | Treasury Stock |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Cumulative effect of accounting change | $ 0 | $ 1,351 | $ (1,351) | |||
Balance (in shares) at Oct. 29, 2017 | 68,677,684 | (291,128) | ||||
Balance at Oct. 29, 2017 | 305,247 | $ 687 | 562,277 | (248,046) | $ (7,531) | $ (2,140) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Treasury stock purchases (in shares) | (2,938,974) | |||||
Treasury stock purchases | (51,753) | $ (51,753) | ||||
Retirement of treasury shares (in shares) | (2,938,974) | 2,938,974 | ||||
Retirement of treasury shares | $ (29) | (51,743) | $ 51,772 | |||
Issuance of restricted stock (in shares) | 410,379 | 181,439 | ||||
Issuance of restricted stock | $ 4 | (4) | ||||
Other comprehensive loss | (147) | (55) | (92) | |||
Deferred compensation obligation | $ 0 | (954) | $ 954 | |||
Deferred compensation obligation (in shares) | 48,876 | |||||
Stock options exercised (in shares) | 100,000 | 115,424 | ||||
Stock options exercised | $ 1,279 | $ 1 | 1,278 | |||
Share-based compensation | 8,909 | 8,909 | ||||
Net income (loss) | 35,551 | 35,551 | ||||
Balance (in shares) at Jul. 29, 2018 | 66,264,513 | (60,813) | ||||
Balance at Jul. 29, 2018 | 299,086 | $ 663 | 521,059 | (213,846) | (7,623) | $ (1,167) |
Balance (in shares) at Apr. 29, 2018 | 66,252,112 | (109,793) | ||||
Balance at Apr. 29, 2018 | 262,324 | $ 663 | 521,190 | (249,832) | (7,555) | $ (2,142) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Treasury stock purchases (in shares) | (21,940) | |||||
Treasury stock purchases | (436) | $ (436) | ||||
Retirement of treasury shares (in shares) | (22,044) | 22,044 | ||||
Retirement of treasury shares | (457) | $ 457 | ||||
Issuance of restricted stock (in shares) | 12,657 | |||||
Other comprehensive loss | (68) | (68) | ||||
Deferred compensation obligation | 0 | (954) | $ 954 | |||
Deferred compensation obligation (in shares) | 48,876 | |||||
Stock options exercised (in shares) | 21,788 | |||||
Stock options exercised | 239 | 239 | ||||
Share-based compensation | 1,041 | 1,041 | ||||
Net income (loss) | 35,986 | 35,986 | ||||
Balance (in shares) at Jul. 29, 2018 | 66,264,513 | (60,813) | ||||
Balance at Jul. 29, 2018 | 299,086 | $ 663 | 521,059 | (213,846) | (7,623) | $ (1,167) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Cumulative effect of accounting change | (3,358) | (3,358) | ||||
Balance (in shares) at Oct. 28, 2018 | 66,264,654 | (60,813) | ||||
Balance at Oct. 28, 2018 | 330,265 | $ 663 | 523,788 | (186,291) | (6,708) | $ (1,187) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Treasury stock purchases (in shares) | (347,040) | |||||
Treasury stock purchases | (4,128) | $ (4,128) | ||||
Retirement of treasury shares (in shares) | (296,954) | 296,954 | ||||
Retirement of treasury shares | $ (3) | (3,634) | $ 3,637 | |||
Issuance of restricted stock (in shares) | 977,226 | |||||
Issuance of restricted stock | $ 10 | (10) | ||||
Issuance of common stock for the Ply Gem merger (in shares) | 58,638,233 | |||||
Issuance of common stock for the Ply Gem merger | 713,041 | $ 586 | 712,455 | |||
Other comprehensive loss | (4,105) | (4,105) | ||||
Share-based compensation | 4,457 | 4,457 | ||||
Net income (loss) | (76,190) | (76,190) | ||||
Balance (in shares) at Dec. 31, 2018 | 125,583,159 | (110,899) | ||||
Balance at Dec. 31, 2018 | 959,982 | $ 1,256 | 1,237,056 | (265,839) | (10,813) | $ (1,678) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Treasury stock purchases (in shares) | (34,724) | |||||
Treasury stock purchases | (231) | $ (231) | ||||
Retirement of treasury shares (in shares) | (84,810) | 84,810 | ||||
Retirement of treasury shares | $ (1) | (722) | $ 723 | |||
Issuance of restricted stock (in shares) | 109,430 | |||||
Issuance of restricted stock | $ 2 | (2) | ||||
Issuance of common stock for the Ply Gem merger (in shares) | 13,731 | |||||
Issuance of common stock for the Ply Gem merger | 167 | 167 | ||||
Other comprehensive loss | $ (25,326) | (25,326) | ||||
Deferred compensation obligation | (86) | $ 86 | ||||
Deferred compensation obligation (in shares) | 5,712 | |||||
Stock options exercised (in shares) | 0 | |||||
Share-based compensation | $ 10,613 | 10,613 | ||||
Net income (loss) | (17,320) | (17,320) | ||||
Balance (in shares) at Sep. 28, 2019 | 125,621,510 | (55,101) | ||||
Balance at Sep. 28, 2019 | 927,885 | $ 1,257 | 1,247,026 | (283,159) | (36,139) | $ (1,100) |
Balance (in shares) at Jun. 29, 2019 | 125,588,427 | (69,315) | ||||
Balance at Jun. 29, 2019 | 908,204 | $ 1,256 | 1,243,897 | (308,323) | (27,419) | $ (1,207) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Treasury stock purchases (in shares) | (12,612) | |||||
Treasury stock purchases | (64) | $ (64) | ||||
Retirement of treasury shares (in shares) | (26,826) | 26,826 | ||||
Retirement of treasury shares | (171) | $ 171 | ||||
Issuance of restricted stock (in shares) | 46,178 | |||||
Issuance of restricted stock | $ 1 | (1) | ||||
Issuance of common stock for the Ply Gem merger (in shares) | 13,731 | |||||
Issuance of common stock for the Ply Gem merger | 167 | 167 | ||||
Other comprehensive loss | (8,720) | (8,720) | ||||
Share-based compensation | 3,134 | 3,134 | ||||
Net income (loss) | 25,164 | 25,164 | ||||
Balance (in shares) at Sep. 28, 2019 | 125,621,510 | (55,101) | ||||
Balance at Sep. 28, 2019 | $ 927,885 | $ 1,257 | $ 1,247,026 | $ (283,159) | $ (36,139) | $ (1,100) |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 28, 2019 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Change of Name Effective May 23, 2019, NCI Building Systems, Inc. changed its name to Cornerstone Building Brands, Inc. (together with its subsidiaries, unless otherwise indicated, the “Company,” “Cornerstone,” “NCI”, “we,” “us” or “our”). In connection with the name change, the Company changed its NYSE trading symbol from “NCS” to “CNR”. Basis of Presentation The accompanying unaudited consolidated financial statements for Cornerstone Building Brands, Inc. have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles (“GAAP”) for complete financial statements. In the opinion of management, the unaudited consolidated financial statements included herein contain all adjustments, which consist of normal recurring adjustments, necessary to fairly present the Company’s financial position, results of operations and cash flows for the periods indicated. Operating results for the period from January 1, 2019 through September 28, 2019 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2019. For additional information, refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended October 28, 2018 filed with the Securities and Exchange Commission (the “SEC”) on December 19, 2018. Reporting Periods On November 16, 2018, the Company’s Board of Directors approved a change to the Company’s fiscal year end from a 52/53 week year with the Company’s fiscal year end on the Sunday closest to October 31 to a calendar year of the twelve-month period from January 1 to December 31. The Company elected to change its fiscal year end in connection with the Merger (as defined below) to align the Company’s fiscal year end with Ply Gem’s (as defined below). As a result of this change, the Company filed a Transition Report on Form 10-Q that included the financial information for the transition period from October 29, 2018 to December 31, 2018, which period is referred to herein as the “Transition Period”. The financial statements contained herein are being filed as part of a Quarterly Report on Form 10-Q for the period from June 30, 2019 through September 28, 2019. References in this Quarterly Report on Form 10-Q to “fiscal year 2018” or “fiscal 2018” refer to the period from October 30, 2017 through October 28, 2018. The results of operations for the three and nine months ended July 29, 2018 are presented herein as the comparable period to the three and nine months ended September 28, 2019. The Company did not recast the consolidated financial statements for the period from June 30, 2018 to September 28, 2018 or January 1, 2018 to September 28, 2018 because the financial reporting processes in place at that time included certain procedures that were completed only on a quarterly basis. Consequently, to recast this period would have been impractical. The Company’s current fiscal quarters are based on a four-four-five week calendar with periods ending on the Saturday of the last week in the quarter except that December 31st will always be the year-end date. Therefore, the financial results of certain fiscal quarters may not be comparable to prior fiscal quarters. Change in Operating Segments For the Transition Period, the Company began reporting results under three reportable segments: (i) Commercial; (ii) Siding; and (iii) Windows, to align with how the Company manages its business, reviews operating performance and allocates resources following the Merger. The Commercial segment will include the aggregate operating results of the Company’s legacy businesses. The Siding and Windows segments will include the operating results of the legacy Ply Gem operating segments. Gain/Loss on Disposition of Business During the three and nine months ended July 29, 2018, the Company recognized a $1.0 million gain related to the disposal of a non-strategic product line in the Commercial segment. In the second quarter of fiscal 2018, the Company closed on the sale of CENTRIA International LLC, which owned our China manufacturing facility. The Company recognized a $6.7 million loss on the sale, which is included in the Commercial segment financial results for the nine month period ended July 29, 2018. The disposition did not represent a strategic shift that had a major effect on the Company’s operations or financial results. Gain on Insurance Recovery In June 2016, the Company experienced a fire at a facility in the Commercial segment. During the third quarter of fiscal 2018, the Company received final proceeds of $4.7 million as reimbursement for new assets acquired and recognized a $4.7 million gain on insurance recovery in the consolidated statements of operations. Restricted Cash The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that total the amounts shown in the consolidated statements of cash flows (in thousands): September 28, 2019 Cash and cash equivalents $ 105,244 Restricted cash (1) 3,872 Total cash, cash equivalents and restricted cash shown in the consolidated statements of cash flows $ 109,116 (1) Restricted cash at September 28, 2019 primarily relates to an escrow balance held for an outstanding earnout agreement. Net Sales The Company adopted Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), as of October 29, 2018 for the Transition Period. ASU 2014-09 provides enhancements to the quality and consistency of how revenue is reported while also improving comparability in the financial statements of companies reporting using IFRS and GAAP. The core principle of this update is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. We enter into contracts that pertain to products, which are accounted for as separate performance obligations and are typically one year or less in duration. We do not exercise significant judgment in determining the timing for the satisfaction of performance obligations or the transaction price. Revenue is measured as the amount of consideration expected to be received in exchange for our products. We have elected to apply the practical expedient provided for in ASU No. 2014-09 and have not disclosed information regarding remaining performance obligations that have original expected durations of one year or less. Revenue is generally recognized when the product has shipped from our facility and control has transferred to the customer. For a portion of our business, when we process customer owned material, control is deemed to transfer to the customer as the processing is being completed. Our revenues are adjusted for variable consideration, which includes customer volume rebates and prompt payment discounts. We measure variable consideration by estimating expected outcomes using analysis and inputs based upon anticipated performance, historical data, and current and forecasted information. Customer returns are recorded as a reduction to sales on an actual basis throughout the year and also include an estimate at the end of each reporting period for future customer returns related to sales recorded prior to the end of the period. The Company generally estimates customer returns based upon the time lag that historically occurs between the sale date and the return date while also factoring in any new business conditions that might impact the historical analysis such as new product introduction. Measurement of variable consideration is reviewed by management periodically and revenue is adjusted accordingly. We do not have significant financing components. Shipping and handling activities performed by us are considered activities to fulfill the sales of our products. Amounts billed for shipping and handling are included in net sales, while costs incurred for shipping and handling are included in cost of sales. In accordance with certain contractual arrangements, we receive payment from our customers in advance related to performance obligations that are to be satisfied in the future and recognize such payments as deferred revenue, primarily related to our weathertightness warranties (see Note 11 — Warranty). The following table presents disaggregated revenue disclosure details of net sales by segment (in thousands): Three Months Ended Nine Months Ended September 28, July 29, September 28, July 29, Commercial Net Sales Disaggregation: Metal building products $ 320,028 $ 384,311 $ 914,623 $ 964,924 Insulated metal panels 109,322 106,605 332,403 303,910 Metal coil coating 35,556 57,609 123,126 158,109 Total $ 464,906 $ 548,525 $ 1,370,152 $ 1,426,943 Siding Net Sales Disaggregation: Vinyl siding $ 148,912 $ — $ 400,220 $ — Metal 75,933 — 199,265 — Injection molded 17,429 — 47,163 — Stone 32,254 — 70,441 — Other products & services 41,271 — 123,512 — Total $ 315,799 $ — $ 840,601 $ — Windows Net Sales Disaggregation: Vinyl windows $ 481,104 $ — $ 1,355,333 $ — Aluminum windows 11,951 — 39,678 — Other 11,283 — 39,568 — Total $ 504,338 $ — $ 1,434,579 $ — Total Net Sales: $ 1,285,043 $ 548,525 $ 3,645,332 $ 1,426,943 |
ACCOUNTING PRONOUNCEMENTS
ACCOUNTING PRONOUNCEMENTS | 9 Months Ended |
Sep. 28, 2019 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
ACCOUNTING PRONOUNCMENTS | ACCOUNTING PRONOUNCEMENTS Adopted Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases , to increase transparency and comparability among organizations by recognizing right-of-use assets and lease liabilities on the balance sheet and disclosing key information about leasing transactions. Effective January 1, 2019, the Company adopted the guidance initially applying the standard to leases existing at, or entered into after, the January 1, 2019 adoption date. The Company has elected only the package of three transition practical expedients available under the new standard. The short-term lease recognition exemption has been elected for all leases that qualify as well as the practical expedient to not separate lease and non-lease components for all leases other than leases of durable tooling. The adoption of the new standard resulted in the recognition of additional operating liabilities of $304.1 million with corresponding right-of-use (“ROU”) assets of $304.1 million, based on the present value of the remaining minimum rental payments. The Company recognized no adjustment to opening balance of accumulated deficit as of January 1, 2019. The new standard also provides for practical expedients for an entity’s ongoing accounting. Additional disclosures on leases are included in Note 8 — Leases. In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software—General (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract , which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The accounting for the service element of a hosting arrangement that is a service contract is not affected by these amendments. Effective January 1, 2019, the Company early adopted this guidance on a prospective basis. The application of ASU 2018-15 did not have a material impact on our consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) as subsequently amended. ASU 2014-09 supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition , and most industry-specific guidance. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. We performed an assessment of the differences between the new revenue standard and current accounting practices. As part of our implementation process, we identified significant revenue streams and evaluated a sample of contracts within each significant revenue stream in order to determine the effect of the standard on our revenue recognition practices. We completed this evaluation and have established new policies, procedures, and internal controls in our adoption of the new revenue standard. We adopted this guidance on a modified retrospective basis, pursuant to which we recorded a $2.6 million adjustment to increase the opening balance of accumulated deficit as of October 29, 2018 (the first day of the Transition Period) for the impact of applying the new revenue standard. The adjustment related to changes in the timing of revenue recognition for our weathertightness warranties in our Commercial segment. Additional disaggregated revenue disclosures are included in Note 1 — Summary of Significant Accounting Policies . In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments , which provides guidance on eight cash flow classification issues with the objective of reducing differences in practice. We adopted this guidance on a retrospective basis in the Transition Period. The application of ASU 2016-15 did not have a material impact on our consolidated financial statements. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other than Inventory , which eliminates the exception that prohibits the recognition of current and deferred income tax effects for intra-entity transfers of assets other than inventory until the asset has been sold to an outside party. We adopted this guidance on a modified retrospective basis, pursuant to which we recorded a $0.7 million adjustment to increase the opening balance of accumulated deficit as of October 29, 2018 (the first day of the Transition Period) for the impact of applying the new standard. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force) , which clarifies how entities should present restricted cash and restricted cash equivalents in the statement of cash flows. Entities will no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. An entity with a material balance of restricted cash and restricted cash equivalents must disclose information about the nature of the restrictions. We adopted this guidance on a retrospective basis in the Transition Period. The adoption of this guidance resulted in restricted cash activity previously included in financing activities on our consolidated statement of cash flows to be included as part of the beginning and ending balances of cash and cash equivalents and restricted cash in our consolidated statements of cash flows. In March 2017, the FASB issued ASU 2017-07, Compensation — Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost , which amends the requirements related to the income statement presentation of the components of net periodic benefit cost for employer sponsored defined benefit pension and other postretirement benefit plans. Under the new guidance, an entity must disaggregate and present the service cost component of net periodic benefit cost in the same income statement line items as other employee compensation costs arising from services rendered during the period, and only the service cost component will be eligible for capitalization. Other components of net periodic benefit cost will be presented separately from the line items that include the service cost. We adopted this guidance in the Transition Period on a retrospective basis to adopt the requirement for separate presentation of the income statement service cost and other components, and on a prospective transition method to adopt the requirement to limit the capitalization of benefit cost to the service component. The adoption of ASU 2017-07 did not have a material impact on our consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting , which provides clarity on the accounting for modifications of stock-based awards. The Company adopted this guidance on a prospective basis in the Transition Period for share-based payment awards modified on or after the adoption date. The adoption of ASU 2017-09 did not have a material impact on our consolidated financial statements. In August 2017, the FASB issued ASU No. 2017-12, Targeted Improvements to Accounting for Hedging Activities . This ASU’s objectives are to (1) improve the transparency and understandability of information conveyed to financial statement users about an entity’s risk management activities by better aligning the entity’s financial reporting for hedging relationships with those risk management activities; and (2) reduce the complexity of and simplify the application of hedge accounting by preparers. ASU No. 2017-12 is effective for interim and annual reporting periods beginning after December 15, 2018. The Company adopted this guidance on a prospective basis for fiscal 2019. The adoption of ASU 2017-12 did not have a material impact on our consolidated financial statements. Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This ASU requires an entity to measure all expected credit losses for financial assets, including trade receivables, held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Entities will now incorporate forward-looking information based on expected losses to estimate credit losses. ASU 2016-13 will be effective for our fiscal year ending December 31, 2020, including interim periods within that fiscal year. We are evaluating the impact that the adoption of this ASU will have on our consolidated financial position, result of operations and cash flows. 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, which modifies disclosure requirements for fair value measurements under ASC 820, Fair Value Measurement. We will be required to adopt this guidance retrospectively in the annual and interim periods for our fiscal year ending December 31, 2020, with early adoption permitted. We are evaluating the impact of adopting this guidance. In August 2018, the FASB issued ASU 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans , which removes disclosures no longer considered cost beneficial, clarifies the specific requirements of disclosures and adds disclosure requirements identified as relevant. We will be required to adopt this guidance for our fiscal year ending December 31, 2020, with early adoption permitted. Certain provisions are applied prospectively while others are applied retrospectively. We are evaluating the impact of adopting this guidance. Additionally, there were various other accounting standards and interpretations issued that the Company has not yet been required to adopt, none of which is expected to have a material impact on the Company’s consolidated financial statements going forward. |
ACQUISITIONS
ACQUISITIONS | 9 Months Ended |
Sep. 28, 2019 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONS Environmental Stoneworks On January 12, 2019, the Company entered into a Unit Purchase Agreement (the “Purchase Agreement”) with Environmental Materials, LLC, a Delaware limited liability company (“Environmental Stoneworks” or “ESW”), the Members of Environmental Materials, LLC (the “Sellers”) and Charles P. Gallagher and Wayne C. Kocourek, solely in their capacity as the Seller Representative (as defined in the Purchase Agreement), pursuant to which, on February 20, 2019, the Company’s wholly-owned subsidiary, Ply Gem Industries, Inc., purchased from the Sellers 100% of the outstanding limited liability company interests of Environmental Stoneworks (the “Environmental Stoneworks Acquisition”) for total consideration of $182.6 million, subject to certain post-closing adjustments, for Environmental Stoneworks. The transaction was financed through borrowings under the Company’s asset-based revolving credit facility. The Environmental Stoneworks Acquisition, when combined with the Company’s existing stone businesses, positions the Company as a market leader in stone veneer. The Company accounted for the transaction as an acquisition in accordance with the provisions of Accounting Standards Codification 805, Business Combinations , which results in a new valuation for the assets and liabilities of Environmental Stoneworks based upon fair values as of the closing date. The Company determined the fair value of the tangible and intangible assets and the liabilities acquired, and recorded goodwill based on the excess of fair value of the acquisition consideration over such fair values, as follows (in thousands): Assets acquired: Restricted cash $ 3,379 Accounts receivable 17,134 Inventories 13,062 Prepaid expenses and other current assets 3,677 Property, plant and equipment 14,295 Lease right of use assets 11,372 Intangible assets (trade names/customer relationships) 91,170 Goodwill 60,487 Other assets 157 Total assets acquired 214,733 Liabilities assumed: Accounts payable 5,910 Other accrued expenses 11,445 Lease liabilities 11,365 Other long-term liabilities 3,450 Total liabilities assumed 32,170 Net assets acquired $ 182,563 The $60.5 million of goodwill was allocated to the Siding segment and none of the goodwill is expected to be deductible for tax purposes. The goodwill is attributable to the workforce of the acquired business and the synergies expected to be realized. During the nine months ended September 28, 2019, the Company incurred $1.5 million of acquisition-related costs for Environmental Stoneworks, which are recorded in strategic development and acquisition related costs in the Company’s consolidated statements of operations. There were no significant acquisition-related costs incurred during the three months ended September 28, 2019. The final acquisition accounting allocation for the Environmental Stoneworks Acquisition remains subject to further adjustments. The specific accounts subject to ongoing acquisition accounting adjustments include accounts receivable, inventories, prepaid expenses and other current assets, goodwill, intangibles, accounts payable, accrued expenses, accrued warranties and other liabilities. Therefore, the measurement period remained open as of September 28, 2019, and the preliminary acquisition accounting allocation detailed above is subject to further adjustment. The Company anticipates completing these acquisition accounting adjustments during the fourth quarter of fiscal 2019. Ply Gem Merger On July 17, 2018, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Ply Gem Parent, LLC (“Ply Gem”), and for certain limited purposes as set forth in the Merger Agreement, Clayton, Dubilier & Rice, LLC (“CD&R”), pursuant to which, at the closing of the merger, Ply Gem would be merged with and into NCI, with NCI continuing its existence as a corporation organized under the laws of the State of Delaware (the “Merger”). On November 15, 2018, at a special meeting of NCI shareholders, NCI’s shareholders approved, among other items, the Merger Agreement and the issuance in the Merger of 58,709,067 shares of NCI common stock, par value $0.01 per share (“NCI Common Stock”) in the aggregate, on a pro rata basis, to the holders of all of the equity interests in Ply Gem (the “Stock Issuance”), representing approximately 47% of the total number of shares of NCI Common Stock outstanding following the consummation of the Merger on November 16, 2018 (the “Closing Date”). The total value of shares of NCI Common Stock issued pursuant to the Stock Issuance was approximately $713.9 million based on the number of shares issued multiplied by the NCI Common Stock closing share price of $12.16 on the Closing Date. There are approximately 57,103 shares of NCI Common Stock of the original 58,709,067 that have not yet been issued pending holder identification and have been accrued as purchase consideration within other current liabilities in the consolidated balance sheet at September 28, 2019. For accounting and legal purposes, NCI was the accounting and legal acquirer of Ply Gem as of the Closing Date and Ply Gem’s results have been included within NCI from the Closing Date. Ply Gem is a leading manufacturer of exterior building products in North America, operating in two segments: Siding and Windows. These two segments produce a comprehensive product line of vinyl siding, designer accents, cellular PVC trim, vinyl fencing, vinyl railing, stone veneer, and vinyl windows and doors used in both the new construction market and the home repair and remodeling market in the United States and Canada. Vinyl building products have the leading share of sales volume in siding and windows in the United States. Ply Gem also manufactures vinyl and aluminum soffit and siding accessories, aluminum trim coil, wood windows, aluminum windows, vinyl and aluminum-clad windows and steel and fiberglass doors, enabling us to bundle complementary and color-matched products and accessories with our core products. Ply Gem strategically fits into NCI’s existing footprint and broadens its service offering to existing and new customers within the building products industry. The Company accounted for the Merger as an acquisition in accordance with the provisions of Accounting Standards Codification 805, Business Combinations , which results in a new valuation for the assets and liabilities of Ply Gem based upon fair values as of the Closing Date. In connection with the Merger, on November 16, 2018, NCI assumed (i) the obligations of the company formerly known as Ply Gem Midco, Inc. (“Ply Gem Midco”), a subsidiary of Ply Gem immediately prior to the consummation of the Merger, as borrower under the Current Cash Flow Credit Agreement (as defined below), (ii) the obligations of Ply Gem Midco as parent borrower under the Current ABL Credit Agreement (as defined below) and (iii) the obligations of Ply Gem Midco as issuer under the Current Indenture (as defined below). On April 12, 2018, Ply Gem Midco entered into a Cash Flow Credit Agreement (the “Current Cash Flow Credit Agreement”), by and among Ply Gem Midco, JP Morgan Chase Bank, N.A., as administrative agent and collateral agent (the “Cash Flow Agent”), and the several banks and other financial institutions from time to time party thereto. As of November 16, 2018, immediately prior to consummation of the Merger, the Current Cash Flow Credit Agreement provided for (i) a term loan facility (the “Current Term Loan Facility”) in an original aggregate principal amount of $1,755.0 million and (ii) a cash flow-based revolving credit facility (the “Current Cash Flow Revolver” and together with the Current Term Loan Facility, the “Current Cash Flow Facilities”) of up to $115.0 million. On November 16, 2018, Ply Gem Midco entered into a Lender Joinder Agreement, by and among Ply Gem Midco, the additional commitment lender party thereto and the Cash Flow Agent, which amended the Current Cash Flow Credit Agreement in order to, among other things, increase the aggregate principal amount of the Current Term Loan Facility by $805.0 million (the “Incremental Term Loans”). Proceeds of the Incremental Term Loans were used to, among other things, (a) finance the Merger and to pay certain fees, premiums and expenses incurred in connection therewith, (b) repay in full amounts outstanding under the Pre-merger Term Loan Credit Agreement and the Pre-merger ABL Credit Agreement (each as defined below) and (c) repay $325.0 million of borrowings outstanding under the Current ABL Facility (as defined below). On November 16, 2018, in connection with the consummation of the Merger, NCI and Ply Gem Midco entered into a joinder agreement with respect to the Current Cash Flow Facilities, and NCI became the Borrower (as defined in the Current Cash Flow Credit Agreement) under the Current Cash Flow Facilities. The Current Term Loan Facility amortizes in nominal quarterly installments equal to one percent of the aggregate initial principal amount thereof per annum, with the remaining balance payable upon final maturity of the Current Term Loan Facility on April 12, 2025. There are no amortization payments under the Current Cash Flow Revolver, and all borrowings under the Current Cash Flow Revolver mature on April 12, 2023. At November 16, 2018, following consummation of the Merger, there was $2,555.6 million outstanding under the Current Term Loan Facility and there w ere no a mounts drawn on the Current Cash Flow Revolver. On April 12, 2018, Ply Gem Midco and certain subsidiaries of Ply Gem Midco entered into an ABL Credit Agreement (the “Current ABL Credit Agreement”), by and among Ply Gem Midco, the subsidiary borrowers from time to time party thereto, UBS AG, Stamford Branch, as administrative agent and collateral agent (the “ABL Agent”), and the several banks and other financial institutions from time to time party thereto, which provided for an asset-based revolving credit facility (the “Current ABL Facility”) of up to $360.0 million, consisting of (i) $285.0 million available to U.S. borrowers (subject to U.S. borrowing base availability) (the “ABL U.S. Facility”) and (ii) $75.0 million available to both U.S. borrowers and Canadian borrowers (subject to U.S. borrowing base and Canadian borrowing base availability) (the “ABL Canadian Facility”). On October 15, 2018, Ply Gem Midco entered into Amendment No. 2 to the Current ABL Credit Agreement, by and among Ply Gem Midco, the incremental lender party thereto and the ABL Agent, which amended the Current ABL Credit Agreement in order to, among other things, increase the aggregate commitments under the Current ABL Facility by $36.0 million to $396.0 million overall, and with the (x) ABL U.S. Facility being increased from $285.0 million to $313.5 million and (y) the ABL Canadian Facility being increased from $75.0 million to $82.5 million. On November 16, 2018, Ply Gem Midco entered into Amendment No. 4 to the Current ABL Credit Agreement, by and among Ply Gem Midco, the incremental lenders party thereto and the ABL Agent, which amended the Current ABL Credit Agreement in order to, among other things, increase the aggregate commitments under the Current ABL Facility by $215.0 million (the “Incremental ABL Commitments”) to $611.0 million overall, and with the (x) ABL U.S. Facility being increased from $313.5 million to approximately $483.7 million and (y) the ABL Canadian Facility being increased from $82.5 million to approximately $127.3 million. On November 16, 2018, in connection with the consummation of the Merger, NCI and Ply Gem Midco entered into a joinder agreement with respect to the Current ABL Facility, and NCI became the Parent Borrower (as defined in the Current ABL Credit Agreement) under the Current ABL Facility. The Company and, at the Company’s option, certain of the Company’s subsidiaries are the borrowers under the Current ABL Facility. As of November 16, 2018, and following consummation of the Merger, (a) Ply Gem Industries, Inc., Atrium Windows and Doors, Inc., NCI Group, Inc. and Robertson-Ceco II Corporation were U.S. subsidiary borrowers under the Current ABL Facility, and (b) Gienow Canada Inc., Mitten Inc., North Star Manufacturing (London) Ltd. and Robertson Building Systems Limited were Canadian borrowers under the Current ABL Facility. All borrowings under the Current ABL Facility mature on April 12, 2023. At November 16, 2018, following consummation of the Merger, there were no amounts drawn and $24.7 million of letters of credit issued under the Current ABL Facility. On April 12, 2018, Ply Gem Midco issued $645.0 million aggregate principal amount of 8.00% Senior Notes due 2026 (the “8.00% Senior Notes”). The 8.00% Senior Notes were issued pursuant to an Indenture, dated as of April 12, 2018 (as supplemented from time to time, the “Current Indenture”), by and among Ply Gem Midco, as issuer, the subsidiary guarantors from time to time party thereto and Wilmington Trust, National Association, as trustee. On November 16, 2018, in connection with the consummation of the Merger, the Company entered into a supplemental indenture and assumed the obligations of Ply Gem Midco as issuer under the Current Indenture and the 8.00% Senior Notes. The 8.00% Senior Notes bear interest at 8.00% per annum and will mature on April 15, 2026. Interest is payable semi-annually in arrears on April 15 and October 15. On November 16, 2018, in connection with the incurrence by Ply Gem Midco of the Incremental Term Loans and the obtaining by Ply Gem Midco of the Incremental ABL Commitments, following consummation of the Merger, the Company (a) terminated all outstanding commitments and repaid all outstanding amounts under the Term Loan Credit Agreement, dated as of February 8, 2018 (the “Pre-merger Term Loan Credit Agreement”), by and among the Company, as borrower, the several banks and other financial institutions from time to time party thereto and Credit Suisse AG, Cayman Islands Branch, as administrative agent and collateral agent, and (b) terminated all outstanding commitments and repaid all outstanding amounts under the ABL Credit Agreement, dated as of February 8, 2018 (the “Pre-merger ABL Credit Agreement”), by and among NCI Group, Inc. and Robertson-Ceco II Corporation, as borrowers, the Company, as a guarantor, the other borrowers from time to time party thereto, the several banks and other financial institutions from time to time party thereto and Wells Fargo Bank, National Association, as administrative agent and collateral agent. Outstanding letters of credit under the Pre-merger ABL Credit Agreement were cash collateralized. In connection with the termination and repayment of the Pre-merger Term Loan Credit Agreement and the Pre-merger ABL Credit Agreement, the Company also terminated (i) the Term Loan Guarantee and Collateral Agreement, dated as of February 8, 2018, made by the Company and certain of its subsidiaries, in favor of Credit Suisse AG, Cayman Islands Branch, as collateral agent, (ii) the ABL Guarantee and Collateral Agreement, dated as of February 8, 2018, made by the Company and certain of its subsidiaries, in favor of Wells Fargo Bank, National Association, as collateral agent, and (iii) the Intercreditor Agreement, dated as of February 8, 2018, between Credit Suisse AG, Cayman Islands Branch and Wells Fargo Bank, National Association, and acknowledged by the Company and certain of its subsidiaries. Purchase Price Allocation The Company’s total purchase consideration in the Merger was equal to $728.9 million and is comprised of the Stock Issuance of $713.9 million and a cash payment of $15.0 million by the Company to settle certain third-party fees and expenses incurred by Ply Gem. The Company determined the fair values of the tangible and intangible assets acquired and the liabilities assumed in the Merger, and recorded goodwill based on the excess of fair value of the acquisition consideration over such fair values, as follows (in thousands): Assets acquired: Cash $ 102,121 Accounts receivable 345,801 Inventories 301,513 Prepaid expenses and other current assets 51,223 Property, plant and equipment 364,981 Intangible assets (trade names/customer relationships) 1,720,000 Goodwill 1,469,563 Other assets 3,262 Total assets acquired 4,358,464 Liabilities assumed: Accounts payable 139,955 Tax receivable agreement liability 47,355 Other accrued expenses (inclusive of $25.3 million for current warranty liabilities) 246,341 Debt (inclusive of current portion) 2,674,767 Other long-term liabilities ($163.6 million for accrued long-term warranty) 163,561 Deferred income taxes 325,593 Other long-term liabilities 31,947 Total liabilities assumed 3,629,519 Net assets acquired $ 728,945 At the acquisition date, $840.6 million of goodwill allocated to the Siding segment and $629.0 million allocated to the Windows segment and none of the goodwill is expected to be deductible for tax purposes. The goodwill is attributable to the workforce of the acquired business and the synergies expected to be realized. The final acquisition accounting allocation for the Merger remains subject to further adjustments. The specific accounts subject to ongoing acquisition accounting adjustments include various income tax assets and liabilities, accounts receivable, inventories, goodwill, intangibles, accrued expenses, accrued warranties and other liabilities. Therefore, the measurement period remained open as of September 28, 2019, and the preliminary acquisition accounting allocation detailed above is subject to further adjustment. The Company anticipates completing these acquisition accounting adjustments during the fourth quarter of fiscal 2019. Unaudited Pro Forma Financial Information During the three and nine months ended September 28, 2019, Environmental Stoneworks contributed net sales of $45.4 million and $108.2 million, respectively, and net income of $2.8 million and $5.8 million, respectively, which has been included within the Company’s consolidated statement of operations. The following table provides unaudited supplemental pro forma results for Cornerstone, prepared in accordance with ASC 805, for the three and nine months ended September 28, 2019 and July 29, 2018 as if the Environmental Stoneworks and Ply Gem (disclosed below) acquisitions had occurred on October 30, 2017 (beginning of the nine months ended July 29, 2018) (in thousands except for per share data): Three Months Ended Nine Months Ended September 28, July 29, September 28, July 29, Net sales $ 1,285,043 $ 1,381,820 $ 3,661,428 $ 3,668,062 Net income (loss) applicable to common shares 28,456 (56,165) 10,532 (221,019) Net income (loss) per common share: Basic $ 0.23 $ (0.45) $ 0.08 $ (1.76) Diluted $ 0.23 $ (0.45) $ 0.08 $ (1.76) The unaudited supplemental pro forma financial information was prepared based on the historical information of Cornerstone, Ply Gem and Environmental Stoneworks. Material pro forma adjustments related to the Environmental Stoneworks and Ply Gem acquisitions include approximately $70.3 million of certain acquisition and compensation costs and $37.9 million of non-cash charges of purchase price allocated to inventories, which were reflected in the pro forma results as if they were incurred on October 30, 2017. Other material pro forma adjustments include adjustments to depreciation and amortization expense and interest expense related to the Environmental Stoneworks and Ply Gem acquisitions. The unaudited supplemental pro forma financial information does not give effect to the potential impact of current financial conditions, any anticipated synergies, operating efficiencies or cost savings that may result from the two acquisitions or any integration costs. Unaudited pro forma balances are not necessarily indicative of operating results had the Environmental Stoneworks and Ply Gem acquisitions occurred on October 30, 2017 or of future results. |
GOODWILL
GOODWILL | 9 Months Ended |
Sep. 28, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL | GOODWILL The Company’s goodwill balance and changes in the carrying amount of goodwill by segment follows (in thousands): Commercial Siding Windows Total Balance, October 28, 2018 $ 148,291 $ — $ — $ 148,291 Goodwill recognized from Merger — 854,606 639,447 1,494,053 Currency translation — (1,220) (913) (2,133) Balance, December 31, 2018 $ 148,291 $ 853,386 $ 638,534 $ 1,640,211 Goodwill recognized from Environmental Stoneworks Acquisition — 60,487 — 60,487 Currency translation — 985 736 1,721 Purchase accounting adjustments — (14,009) (10,481) (24,490) Balance, September 28, 2019 $ 148,291 $ 900,849 $ 628,789 $ 1,677,929 |
INVENTORIES
INVENTORIES | 9 Months Ended |
Sep. 28, 2019 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES The components of inventory are as follows (in thousands): September 28, October 28, Raw materials $ 265,888 $ 205,902 Work in process and finished goods 202,028 48,629 $ 467,916 $ 254,531 |
INTANGIBLES
INTANGIBLES | 9 Months Ended |
Sep. 28, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLES | INTANGIBLES The table that follows presents the major components of intangible assets as of September 28, 2019 and October 28, 2018 (in thousands): Range of Life (Years) Cost Accumulated Amortization Net Carrying Value As of September 28, 2019 Amortized intangible assets: Trademarks/Trade names (1) 6 – 15 $ 252,942 $ (34,257) $ 218,685 Customer lists and relationships 5 – 20 1,737,060 (170,808) 1,566,252 Total intangible assets $ 1,990,002 $ (205,065) $ 1,784,937 (1) During the nine months ended September 28, 2019, the Company began amortization of trade names previously classified as indefinite-lived over an eight Range of Life (Years) Cost Accumulated Amortization Net Carrying Value As of October 28, 2018 Amortized intangible assets: Trademarks/Trade names 15 $ 29,167 $ (12,657) $ 16,510 Customer lists and relationships 12 – 20 136,210 (38,646) 97,564 Indefinite-lived intangible assets: Trade names 13,455 — 13,455 Total intangible assets $ 178,832 $ (51,303) $ 127,529 |
ASSETS HELD FOR SALE
ASSETS HELD FOR SALE | 9 Months Ended |
Sep. 28, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
ASSETS HELD FOR SALE | ASSETS HELD FOR SALE We record assets held for sale at the lower of the carrying value or fair value less costs to sell. The following criteria are used to determine if property is held for sale: (i) management has the authority and commits to a plan to sell the property; (ii) the property is available for immediate sale in its present condition; (iii) there is an active program to locate a buyer and the plan to sell the property has been initiated; (iv) the sale of the property is probable within one year; (v) the property is being actively marketed at a reasonable sale price relative to its current fair value; and (vi) it is unlikely that the plan to sell will be withdrawn or that significant changes to the plan will be made. In determining the fair value of the assets less cost to sell, we consider factors including current sales prices for comparable assets in the area, recent market analysis studies, appraisals and any recent legitimate offers. If the estimated fair value less cost to sell of an asset is less than its current carrying value, the asset is written down to its estimated fair value less cost to sell. The total carrying value of assets held for sale was $5.0 million and $7.3 million as of September 28, 2019 and October 28, 2018, respectively. All of these assets continued to be actively marketed for sale or were under contract as of September 28, 2019. During the nine months ended September 28, 2019 the Company determined an alternative use for a facility in the Commercial segment that had previously been classified as held for sale and reclassified the net book value of $1.7 million to property, plant and equipment and recorded an immaterial depreciation adjustment. Additionally, during the nine months ended September 28, 2019, the Company closed on the sale of an idled facility in the Commercial segment which had previously been classified as held for sale. In connection with the sale we received net proceeds of $0.9 million and recognized a net gain of $0.3 million, which is included in restructuring and impairment charges, net, in the consolidated statements of operations for the nine months ended September 28, 2019. |
LEASES
LEASES | 9 Months Ended |
Sep. 28, 2019 | |
Leases [Abstract] | |
LEASES | LEASES Effective January 1, 2019, the Company adopted ASU 2016-02, Leases, applying the standard to leases existing at the effective date. For arrangements entered into following the transition date, applicability of the standard is determined at inception. The Company leases certain manufacturing, warehouse and distribution locations, vehicles and equipment, including fleet vehicles. Many of these leases have options to terminate prior to or extend beyond the end of the term. The exercise of the majority of lease renewal options is at the Company’s sole discretion. Some lease agreements have variable payments, the majority of these are real estate agreements in which future increases in rent are based on an index. Lease agreements do not contain any material residual value guarantees or material restrictive covenants. Operating lease liabilities are recognized based on the present value of the future minimum lease payments over the reasonably expected holding period at commencement date. Few of the Company’s lease contracts provide a readily determinable implicit rate. For these contracts, an estimated incremental borrowing rate (“IBR”) is utilized, based on information available at the inception of the lease. The incremental borrowing rate represents an estimate of the interest rate we would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of the lease. Weighted average information about the Company’s lease portfolio as of September 28, 2019 was as follows: Weighted-average remaining lease term 5.6 years Weighted-average IBR 6.08 % Operating lease costs for the three and nine months ended September 28, 2019 were as follows (in thousands): Three Months Ended Nine Months Ended September 28, 2019 September 28, 2019 Operating lease costs Fixed lease costs $ 23,903 $ 77,125 Variable lease costs (1) 8,654 27,868 (1) Includes short-term lease costs, which are immaterial. Cash and non-cash activities for the three and nine months ended September 28, 2019 were as follows (in thousands): Three Months Ended Nine Months Ended September 28, 2019 September 28, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 23,463 $ 66,936 Right-of-use assets obtained in exchange for new operating lease liabilities $ 47,236 $ 372,269 Future minimum lease payments under non-cancelable leases as of September 28, 2019 were as follows (in thousands): Operating Leases 2019 (excluding the nine months ended September 28, 2019) $ 23,640 2020 86,617 2021 76,607 2022 61,548 2023 34,935 Thereafter 119,393 Total future minimum lease payments 402,740 Less: interest 90,123 Present value of future minimum lease payments $ 312,617 As of September 28, 2019 Current portion of lease liabilities $ 68,993 Long-term portion of lease liabilities 243,624 Total $ 312,617 |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 9 Months Ended |
Sep. 28, 2019 | |
Share-based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION Our 2003 Long-Term Stock Incentive Plan, as amended (the “Incentive Plan”), is an equity-based compensation plan that allows us to grant a variety of types of awards, including stock options, restricted stock awards, stock appreciation rights, cash awards, phantom stock awards, restricted stock unit awards and long-term incentive awards with performance conditions (“Performance Share Awards”). Awards are generally granted once per year, with the amounts and types of awards determined by the Compensation Committee of our Board of Directors (the “Committee”). In connection with the Merger, on November 16, 2018 awards were granted to certain senior executives and key employees (the “Founders Awards”), which included stock options, restricted stock units (“RSUs”) and performance share units (“PSUs”). A portion of the Founders Awards was not granted under the Incentive Plan but was instead granted pursuant to a separate equity-based compensation plan, the Long-Term Incentive Plan consisting of award agreements for select Founders Awards. However, these awards were subject to the same terms and provisions as awards of the same type granted under the Incentive Plan. As of September 28, 2019, and for all periods presented, the Founders Awards and our share-based awards under the Incentive Plan have consisted of RSUs, PSUs and stock option grants, none of which can be settled through cash payments, and Performance Share Awards, which are settled in cash. Both our stock options and restricted stock awards are subject only to vesting requirements based on continued employment at the end of a specified time period and typically vest in annual increments over three As a general rule, option awards terminate on the earlier of (i) 10 years from the date of grant, (ii) 60 days after termination of employment or service for a reason other than death, disability or retirement, or (iii) 180 days after death, disability or retirement. Awards are non-transferable except by disposition on death or to certain family members, trusts and other family entities as the Committee may approve. Awards may be paid in cash, shares of our Common Stock or a combination, in lump sum or installments and currently or by deferred payment, all as determined by the Committee. Our time-based restricted stock awards are typically subject to graded vesting over a service period, which is three Founders Awards granted to our senior executives and certain key employees included options, RSUs and PSUs. The options and RSUs vest subject to continued employment 20% per year on the first through fifth anniversary of the award. Vesting of the PSUs is contingent upon the achievement of synergies captured from the Merger and continued employment during a three-year performance period beginning on the grant date. At the end of the performance period, the number of actual shares to be awarded varies between 0% and 200% of target amounts. The PSUs vest pro rata if an executive’s employment terminates after 50% of the service period has passed and prior to the end of the performance period due to death, disability, or termination by the Company without cause or by the executive for good reason. If an executive’s employment terminates for any other reason prior to the end of the performance period, all outstanding unvested PSUs, whether earned or unearned, are forfeited and cancelled. If a change in control of the Company occurs, and the plan is not accepted by the successor entity, prior to the end of the performance period, the PSU payout is calculated and paid assuming that the maximum benefit had been achieved. If the plan is accepted, awards will continue to vest as RSUs with a double trigger acceleration upon termination by the Company without cause or by the executive for good reason. If an executive’s employment terminates due to death or disability while any of the restricted stock is unvested, then all of the unvested restricted stock shall become vested. If an executive’s employment is terminated by the Company without cause or by the executive for good reason, the unvested restricted stock is forfeited. If a change in control of the Company occurs, and the plan is not accepted by the successor entity, prior to the end of the performance period, the restricted stock fully vests. If the plan is accepted, awards will continue to vest with a double trigger acceleration upon termination by the Company without cause or by the executive for good reason. The fair value of the awards is based on the Company’s stock price as of the date of grant. Stock option awards During the nine months ended September 28, 2019, we granted 0.4 million stock options. The average grant date fair value of options granted during the nine months ended September 28, 2019 was $1.97 per share. We did not grant stock options during the nine months ended July 29, 2018. No options were exercised during the nine months ended September 28, 2019. During the nine months ended July 29, 2018, 0.1 million options with an intrinsic value of $0.8 million were exercised and cash received from options exercised was $1.3 million. Restricted stock units and performance share units Annual awards to our key employees generally have a three During the nine months ended September 28, 2019, we granted PSUs with a total fair value of approximately $0.4 million to key employees. During the nine months ended July 29, 2018, we granted PSUs with a total fair value of approximately $3.8 million and $2.8 million, to the Company’s senior executives and key employees, respectively. On November 16, 2018, upon consummation of the Merger, certain PSUs that were issued in fiscal 2017 and fiscal 2018 converted to RSUs at 100% and continue to vest in accordance with the original schedule, as the Board of Directors approved the treatment of existing awards, at the Merger date, as if a change in control had occurred, per the respective agreements governing each award. Share-based compensation expense During the three and nine months ended September 28, 2019 we recorded share-based compensation expense for all awards of $3.1 million and $10.6 million, respectively. During the three and nine months ended July 29, 2018, we recorded share-based compensation expense for all awards of $1.0 million and $8.9 million, respectively. Share-based compensation expense for the nine months ended July 29, 2018 included accelerated awards of $3.6 million due to the retirement of the Company’s former CEO. |
EARNINGS PER COMMON SHARE
EARNINGS PER COMMON SHARE | 9 Months Ended |
Sep. 28, 2019 | |
Earnings Per Share [Abstract] | |
EARNINGS PER COMMON SHARE | EARNINGS PER COMMON SHARE Basic earnings per common share is computed by dividing net income allocated to common shares by the weighted average number of common shares outstanding. Diluted earnings per common share, if applicable, considers the dilutive effect of common stock equivalents. The reconciliation of the numerator and denominator used for the computation of basic and diluted earnings per common share is as follows (in thousands, except per share data): Three Months Ended Nine Months Ended September 28, July 29, September 28, July 29, Numerator for Basic and Diluted Earnings Per Common Share Net income (loss) applicable to common shares $ 24,790 $ 35,765 $ (17,320) $ 35,303 Denominator for Basic and Diluted Income Per Common Share Weighted average basic number of common shares outstanding 125,557 66,335 125,526 66,361 Common stock equivalents: Employee stock options 1 95 — 98 PSUs and Performance Share Awards — 8 — 18 Weighted average diluted number of common shares outstanding 125,558 66,438 125,526 66,477 Basic income (loss) per common share $ 0.20 $ 0.54 $ (0.14) $ 0.53 Diluted income (loss) per common share $ 0.20 $ 0.54 $ (0.14) $ 0.53 Incentive Plan securities excluded from dilution (1) 5,189 — 4,974 — (1) Represents securities not included in the computation of diluted earnings per common share because their effect would have been anti-dilutive. We calculate earnings per share using the “two-class” method, whereby unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents are “participating securities” and, therefore, these participating securities are treated as a separate class in computing earnings per share. The calculation of earnings per share presented here excludes the income attributable to unvested restricted stock units related to our Incentive Plan from the numerator and excludes the dilutive impact of those shares from the denominator. Awards subject to the achievement of performance conditions or market conditions for which such conditions had been met at the end of any of the fiscal periods presented are included in the computation of diluted earnings per common share if their effect was dilutive. |
WARRANTY
WARRANTY | 9 Months Ended |
Sep. 28, 2019 | |
Product Warranties Disclosures [Abstract] | |
WARRANTY | WARRANTYThe Company sells a number of products and offers a number of warranties. The specific terms and conditions of these warranties vary depending on the product sold. Upon the sale of a weathertightness warranty, we record the resulting revenue as deferred revenue, which is included in other accrued expenses and other long-term liabilities on our consolidated balance sheets depending on when the revenues are expected to be recognized. Factors that affect the Company’s warranty liabilities include the number of units sold, historical and anticipated rates of warranty claims, cost per claim and new product introduction. The Company assesses the adequacy of the recorded warranty claims and adjusts the amounts as necessary. The following table represents the rollforward of our accrued warranty obligation and deferred warranty revenue activity for the nine months ended September 28, 2019 and July 29, 2018 (in thousands): Nine Months Ended September 28, 2019 July 29, 2018 Beginning balance $ 134,515 $ 32,418 Purchase accounting adjustments 84,280 — Warranties sold 2,313 2,616 Revenue recognized (2,075) (1,971) Expense 22,006 — Settlements (22,285) (1,654) Ending balance 218,754 31,409 Less: current portion 31,294 5,970 Total, less current portion $ 187,460 $ 25,439 The Company records the current warranty obligation within other accrued expenses and the long-term warranty obligation within other long-term liabilities within the Company’s consolidated balance sheets at September 28, 2019 and October 28, 2018. |
DEFINED BENEFIT PLANS
DEFINED BENEFIT PLANS | 9 Months Ended |
Sep. 28, 2019 | |
Retirement Benefits [Abstract] | |
DEFINED BENEFIT PLANS | DEFINED BENEFIT PLANS RCC Pension Plan — With the acquisition of Robertson-Ceco II Corporation (“RCC”) on April 7, 2006, we assumed a defined benefit plan (the “RCC Pension Plan”). Benefits under the RCC Pension Plan are primarily based on years of service and the employee’s compensation. The RCC Pension Plan is frozen and, therefore, employees do not accrue additional service benefits. Plan assets of the RCC Pension Plan are invested in broadly diversified portfolios of government obligations, mutual funds, stocks, bonds, fixed income securities and master limited partnerships. CENTRIA Benefit Plans — As a result of the CENTRIA Acquisition on January 16, 2015, we assumed noncontributory defined benefit plans covering certain hourly employees (the “CENTRIA Benefit Plans”) which are closed to new participants. Benefits under the CENTRIA Benefit Plans are calculated based on fixed amounts for each year of service rendered, although benefits accruals for one of the plans previously ceased. Plan assets of the CENTRIA Benefit Plans are invested in broadly diversified portfolios of domestic and international equity mutual funds, bonds, mortgages and other funds. CENTRIA also sponsors postretirement medical and life insurance plans that cover certain of its employees and their spouses (the “OPEB Plans”). In addition to the CENTRIA Benefit Plans, CENTRIA contributes to a multi-employer plan, the Steelworkers Pension Trust. The minimum required annual contribution to this plan is $0.3 million. The current contract expires on June 1, 2022. If we were to withdraw our participation from this multi-employer plan, CENTRIA may be required to pay a withdrawal liability representing an amount based on the underfunded status of the plan. The plan is not significant to the Company’s consolidated financial statements. Ply Gem Pension Plans — As a result of the Merger on November 16, 2018, we assumed the Ply Gem Group Pension Plan (the “Ply Gem Plan”) and the MW Manufacturers, Inc Retirement Plan (the “MW Plan”). The Ply Gem Plan was frozen during 1998, and no further increases in benefits for participants may occur as a result of increases in service years or compensation. The MW Plan was frozen for salaried participants during 2004 and non-salaried participants during 2005. No additional participants may enter the plan, but increases in benefits for participants as a result of increase in service years or compensation will occur. We refer to the RCC Pension Plan, the CENTRIA Benefit Plans, the Ply Gem Plan and the MW Plan collectively as the “Defined Benefit Plans” in this Note. The following table sets forth the components of the net periodic benefit cost, before tax, and funding contributions, for the periods indicated (in thousands): Three Months Ended September 28, 2019 Three Months Ended July 29, 2018 Defined OPEB Total Defined OPEB Total Service cost $ 11 $ 6 $ 17 $ 22 $ 7 $ 29 Interest cost 974 66 1,040 494 62 556 Expected return on assets (1,234) — (1,234) (729) — (729) Amortization of prior service cost 15 — 15 15 — 15 Amortization of net actuarial loss 704 — 704 248 — 248 Net periodic benefit cost $ 470 $ 72 $ 542 $ 50 $ 69 $ 119 Nine Months Ended September 28, 2019 Nine Months Ended July 29, 2018 Defined OPEB Total Defined OPEB Total Service cost $ 32 $ 17 $ 49 $ 65 $ 21 $ 86 Interest cost 2,922 197 3,119 1,481 185 1,666 Expected return on assets (3,701) — (3,701) (2,187) — (2,187) Amortization of prior service cost 43 — 43 43 — 43 Amortization of net actuarial loss 2,112 — 2,112 743 — 743 Net periodic benefit cost $ 1,408 $ 214 $ 1,622 $ 145 $ 206 $ 351 We expect to contribute $2.3 million to the Defined Benefit Plans in the year ending December 31, 2019. Our policy is to fund the CENTRIA Benefit Plans as required by minimum funding standards of the Internal Revenue Code. The contributions to the OPEB Plans by retirees vary from none to 25% of the total premiums paid. |
LONG-TERM DEBT AND NOTE PAYABLE
LONG-TERM DEBT AND NOTE PAYABLE | 9 Months Ended |
Sep. 28, 2019 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT AND NOTE PAYABLE | LONG-TERM DEBT AND NOTE PAYABLE Debt is comprised of the following (in thousands): September 28, October 28, Asset-based revolving credit facility due April 2023 $ 170,000 $ — Asset-based revolving credit facility due February 2023 — — Term loan facility due April 2025 2,536,397 — Term loan facility due February 2025 — 412,925 Cash flow revolver due April 2023 — — 8.00% senior notes due April 2026 645,000 — Less: unamortized discounts and unamortized deferred financing costs (1) (58,151) (5,699) Total long-term debt, net of unamortized discounts and unamortized deferred financing costs 3,293,246 407,226 Less: current portion of long-term debt 25,600 4,150 Total long-term debt, less current portion $ 3,267,646 $ 403,076 (1) Includes the unamortized deferred financing costs associated with the term loan facilities and senior notes. The unamortized deferred financing costs associated with the asset-based revolving credit facilities of $2.6 million and $1.1 million as of September 28, 2019 and October 28, 2018, respectively, are classified in other assets on the consolidated balance sheets. Recent Debt Transactions In connection with the Merger, on November 16, 2018, the Company assumed (i) the obligations of Ply Gem Midco, a subsidiary of Ply Gem immediately prior to the consummation of the Merger, as borrower under the Current Cash Flow Credit Agreement, (ii) the obligations of Ply Gem Midco as parent borrower under the Current ABL Credit Agreement and (iii) the obligations of Ply Gem Midco as issuer under the Current Indenture. February 2018 Debt Redemption and Refinancing On February 8, 2018, the Company entered into the Pre-merger Term Loan Credit Agreement and the Pre-merger ABL Credit Agreement, the proceeds of which, together, were used to redeem the 8.25% senior notes due 2023 (the “8.25% Senior Notes”) and to refinance the Company’s then-existing term loan credit facility and the Company’s then-existing asset-based revolving credit facility. Term Loan Credit Agreement due February 2025 On February 8, 2018, the Company entered into the Pre-merger Term Loan Credit Agreement which provided for a term loan credit facility in an original aggregate principal amount of $415.0 million (the “Pre-merger Term Loan Credit Facility”). Proceeds from borrowings under the Pre-merger Term Loan Credit Facility were used, together with cash on hand, (i) to refinance the then existing term loan credit agreement, (ii) to redeem and repay the 8.25% Senior Notes and (iii) to pay any fees, premiums and expenses incurred in connection with the refinancing. On November 16, 2018, the Company repaid the remaining $412.9 million aggregate principal amount of the term loans outstanding under the Pre-merger Term Loan Credit Facility for approximately $413.7 million, reflecting remaining principal and interest, using proceeds from the incremental term loan facility entered into in connection with the Merger. Term Loan Facility due April 2025 and Cash Flow Revolver due April 2023 On April 12, 2018, Ply Gem Midco entered into the Current Cash Flow Credit Agreement, which provides for (i) a term loan facility (the “Current Term Loan Facility”) in an original aggregate principal amount of $1,755.0 million, issued with a discount of 0.5%, and (ii) a cash flow-based revolving credit facility (the “Current Cash Flow Revolver” and together with the Term Loan Facility, the “Current Cash Flow Facilities”) of up to $115.0 million. The Current Term Loan Facility amortizes in nominal quarterly installments equal to one percent of the aggregate initial principal amount thereof per annum, with the remaining balance payable upon final maturity of the Current Term Loan Facility on April 12, 2025. There are no amortization payments under the Current Cash Flow Revolver, and all borrowings under the Current Cash Flow Revolver mature on April 12, 2023. On November 16, 2018, the Company entered into an incremental term loan facility in connection with the Merger, which increased the aggregate principal amount of the Current Term Loan Facility by $805.0 million. The proceeds of this incremental term loan facility were used to, among other things, (a) finance the Merger and to pay certain fees, premiums and expenses incurred in connection therewith, (b) repay in full amounts outstanding under the Pre-merger Term Loan Credit Agreement and the Pre-merger ABL Credit Agreement and (c) repay $325.0 million of borrowings outstanding under the ABL Facility. On November 16, 2018, in connection with the consummation of the Merger, NCI and Ply Gem Midco entered into a joinder agreement with respect to the Current Cash Flow Facilities, and the Company became the Borrower (as defined in the Current Cash Flow Credit Agreement) under the Current Cash Flow Facilities. The Current Term Loan Facility bears annual interest at a floating rate measured by reference to, at the Company’s option, either (i) an adjusted LIBOR rate (subject to a floor of 0.00%) plus an applicable margin of 3.75% per annum or (ii) an alternate base rate plus an applicable margin of 2.75% per annum. At September 28, 2019, the interest rates on the Current Term Loan Facility were as follows: September 28, 2019 Interest rate 5.79 % Effective interest rate 6.51 % The Company entered into certain interest rate swap agreements during the nine months ended September 28, 2019 to convert a portion of its variable rate debt to fixed. See Note 16 - Fair Value of Financial Instruments and Fair Value Measurements . Loans outstanding under the Current Cash Flow Revolver bear annual interest at a floating rate measured by reference to, at the Company’s option, either (i) an adjusted LIBOR rate (subject to a floor of 0.00%) plus an applicable margin ranging from 2.50% to 3.00% per annum depending on the Company’s secured leverage ratio or (ii) an alternate base rate plus an applicable margin ranging from 1.50% to 2.00% per annum depending on the Company’s secured leverage ratio. Additionally, unused commitments under the Current Cash Flow Revolver are subject to a fee ranging from 0.25% to 0.50% per annum depending on the Company’s secured leverage ratio. The Current Term Loan Facility may be prepaid at the Company’s option at any time, subject to minimum principal amount requirements. Prepayments of the Current Term Loan Facility in connection with a repricing transaction (as defined in the Current Cash Flow Credit Agreement) on or prior to April 12, 2019 are subject to a 1.00% prepayment premium. Prepayments may otherwise be made without premium or penalty (other than customary breakage costs). The Current Cash Flow Revolver may be prepaid at the Company’s option at any time without premium or penalty (other than customary breakage costs), subject to minimum principal amount requirements. Subject to certain exceptions, the Current Term Loan Facility is subject to mandatory prepayments in an amount equal to: • the net cash proceeds of (1) certain asset sales, (2) certain debt offerings and (3) certain insurance recovery and condemnation events; and • 50% of annual excess cash flow (as defined in the Cash Flow Credit Agreement), subject to reduction to 25% and 0% if specified secured leverage ratio targets are met to the extent that the amount of such excess cash flow exceeds $10.0 million. The annual excess cash flow assessment will begin with the Company’s 2019 fiscal year, payable within five business days after the delivery of the annual financial statements. The obligations under the Current Cash Flow Credit Agreement are guaranteed by each direct and indirect wholly-owned U.S. restricted subsidiary of the Company, subject to certain exceptions, and are secured by: • a perfected security interest in substantially all tangible and intangible assets of the Company and each subsidiary guarantor (other than ABL Priority Collateral (as defined below)), including the capital stock of each direct material wholly-owned U.S. restricted subsidiary owned by the Company and each subsidiary guarantor, and 65% of the capital stock of any non-U.S. subsidiary held directly by the Company or any subsidiary guarantor, subject to certain exceptions (the “Cash Flow Priority Collateral”), which security interest will be senior to the security interest in the foregoing assets securing the Current ABL Facility; and • a perfected security interest in the ABL Priority Collateral, which security interest will be junior to the security interest in the ABL Priority Collateral securing the Current ABL Facility. The Current Cash Flow Revolver includes a financial covenant set at a maximum secured leverage ratio of 7.75:1.00, which will apply if the outstanding amount of loans and drawings under letters of credit which have not then been reimbursed exceeds a specified threshold at the end of any fiscal quarter. ABL Credit Agreement due February 2023 On February 8, 2018, the subsidiaries of the Company, NCI Group, Inc. and Robertson-Ceco II Corporation, and the Company as a guarantor, entered into the Pre-merger ABL Credit Agreement. The Pre-merger ABL Credit Agreement provided for an asset-based revolving credit facility (the “Pre-merger ABL Credit Facility”) which allowed aggregate maximum borrowings by the ABL borrowers of up to $150.0 million, letters of credit of up to $30.0 million and up to $20.0 million for swingline borrowings. Borrowing availability was determined by a monthly borrowing base collateral calculation that is based on specified percentages of the value of accounts receivable, eligible credit card receivables and eligible inventory, less certain reserves and subject to certain other adjustments. Availability was reduced by issuance of letters of credit as well as any borrowings. All borrowings under the Pre-merger ABL Credit Facility would have matured on February 8, 2023. This facility was terminated in connection with the Merger and replaced with the Current ABL Facility (defined below). ABL Facility due April 2023 On April 12, 2018, Ply Gem Midco entered into the Current ABL Credit Agreement, which provides for an asset-based revolving credit facility (the “Current ABL Facility”) of up to $360.0 million, consisting of (i) $285.0 million available to U.S. borrowers (subject to U.S. borrowing base availability) (the “ABL U.S. Facility”) and (ii) $75.0 million available to both U.S. borrowers and Canadian borrowers (subject to U.S. borrowing base and Canadian borrowing base availability) (the “ABL Canadian Facility”). The Company and, at their option, certain of their subsidiaries are the borrowers under the Current ABL Facility. All borrowings under the Current ABL Facility mature on April 12, 2023. On October 15, 2018, Ply Gem Midco entered into an incremental asset-based revolving credit facility of $36.0 million, which upsized the Current ABL Facility to $396.0 million in the aggregate, and with (x) the ABL U.S. Facility being increased from $285.0 million to $313.5 million and (y) the ABL Canadian Facility being increased from $75.0 million to $82.5 million. On November 16, 2018, Ply Gem Midco entered into an incremental asset-based revolving credit facility of $215.0 million in connection with the Merger, which upsized the Current ABL Facility to $611.0 million in the aggregate, and with (x) the ABL U.S. Facility being increased from $313.5 million to approximately $483.7 million and (y) the ABL Canadian Facility being increased from $82.5 million to approximately $127.3 million. On November 16, 2018, in connection with the consummation of the Merger, the Company and Ply Gem Midco entered into a joinder agreement with respect to the Current ABL Facility, and the Company became the Parent Borrower (as defined in the ABL Credit Agreement) under the Current ABL Facility. Borrowing availability under the Current ABL Facility is determined by a monthly borrowing base collateral calculation that is based on specified percentages of the value of eligible inventory, eligible accounts receivable and eligible credit card receivables, less certain reserves and subject to certain other adjustments as set forth in the Current ABL Credit Agreement. Availability is reduced by issuance of letters of credit as well as any borrowings. As of September 28, 2019, the Company had the following in relation to the Current ABL Facility (in thousands): September 28, 2019 Excess availability $ 405,976 Revolving loans outstanding 170,000 Letters of credit outstanding 30,311 Loans outstanding under the Current ABL Facility bear interest at a floating rate measured by reference to, at the Company’s option, either (i) an adjusted LIBOR rate (subject to a LIBOR floor of 0.00%) plus an applicable margin ranging from 1.25% to 1.75% per annum depending on the average daily excess availability under the Current ABL Facility or (ii) an alternate base rate plus an applicable margin ranging from 0.25% to 0.75% per annum depending on the average daily excess availability under the ABL Facility. Additionally, unused commitments under the ABL Facility are subject to a 0.25% per annum fee. At September 28, 2019, the weighted average interest rate on the Current ABL Facility was 3.66%. The obligations under the Current ABL Credit Agreement are guaranteed by each direct and indirect wholly-owned U.S. restricted subsidiary of the Company, subject to certain exceptions, and are secured by: • a perfected security interest in all present and after-acquired inventory, accounts receivable, deposit accounts, securities accounts, and any cash or other assets in such accounts and other related assets owned by the Company and the U.S. subsidiary guarantors and the proceeds of any of the foregoing, except to the extent such proceeds constitute Cash Flow Priority Collateral, and subject to certain exceptions (the “ABL Priority Collateral”), which security interest is senior to the security interest in the foregoing assets securing the Current Cash Flow Facilities; and • a perfected security interest in the Cash Flow Priority Collateral, which security interest will be junior to the security interest in the Cash Flow Collateral securing the Current Cash Flow Facilities. Additionally, the obligations of the Canadian borrowers under the Current ABL Credit Agreement are guaranteed by each direct and indirect wholly-owned Canadian restricted subsidiary of the Canadian borrowers, subject to certain exceptions, and are secured by substantially all assets of the Canadian borrowers and the Canadian subsidiary guarantors, subject to certain exceptions. The Current ABL Credit Agreement includes a minimum fixed charge coverage ratio of 1.00:1.00, which is tested only when specified availability is less than 10.0% of the lesser of (x) the then applicable borrowing base and (y) the then aggregate effective commitments under the Current ABL Facility, and continuing until such time as specified availability has been in excess of such threshold for a period of 20 consecutive calendar days. 8.00% Senior Notes due April 2026 On April 12, 2018, Ply Gem Midco issued $645.0 million at a discount of 2.25% in aggregate principal amount of 8.00% Senior Notes due April 2026 (the “8.00% Senior Notes”). The 8.00% Senior Notes bear interest at 8.00% per annum and will mature on April 15, 2026. Interest is payable semi-annually in arrears on April 15 and October 15. The effective interest rate for the 8.00% Senior Notes was 8.64% as of September 28, 2019, after considering each of the different interest expense components of this instrument, including the coupon payment and the deferred debt issuance costs. On November 16, 2018, in connection with the consummation of the Merger, the Company entered into a supplemental indenture and assumed the obligations of Ply Gem Midco as issuer under the Current Indenture. The 8.00% Senior Notes are guaranteed on a senior unsecured basis by each of the Company’s wholly-owned domestic subsidiaries that guarantee the Company’s obligations under the Current Cash Flow Facilities or the Current ABL Facility (including by reason of being a borrower under the Current ABL Facility on a joint and several basis with the Company or a subsidiary guarantor). The 8.00% Senior Notes are unsecured senior indebtedness and rank equally in right of payment with the Current Cash Flow Facilities and Current ABL Facility. The 8.00% Senior Notes are effectively subordinated to all of the Company’s secured debt, including the Current Cash Flow Facilities and Current ABL Facility, and are senior in right of payment to all subordinated obligations of the Company. The Company may redeem the 8.00% Senior Notes in whole or in part at any time as set forth below: • prior to April 15, 2021, the Company may redeem the 8.00% Senior Notes at a price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to but not including the redemption date, plus the applicable make-whole premium; • prior to April 15, 2021, the Company may redeem up to 40.0% of the original aggregate principal amount of the 8.00% Senior Notes with proceeds of certain equity offerings, at a redemption price of 108%, plus accrued and unpaid interest, if any, to but not including the redemption date; and • on or after April 15, 2021, the Company may redeem the 8.00% Senior Notes at specified redemption prices starting at 104% and declining ratably to 100.0% by April 15, 2023, plus accrued and unpaid interest, if any, to but not including the redemption date. Redemption of 8.25% Senior Notes On January 16, 2015, the Company issued $250.0 million in aggregate principal amount of the 8.25% Senior Notes. On February 8, 2018, the Company redeemed the outstanding $250.0 million aggregate principal amount of the 8.25% Senior Notes for approximately $265.5 million using the proceeds from borrowings under the Pre-merger Term Loan Credit Facility. During the nine months ended July 29, 2018, the Company incurred a pretax loss, primarily on the extinguishment of the Notes, of $21.9 million, of which approximately $15.5 million represents the call premium paid on the redemption of the Notes. Debt Covenants The Company’s debt agreements contain a number of covenants that, among other things, limit or restrict the ability of the Company and its subsidiaries to incur additional indebtedness; make dividends and other restricted payments; incur additional liens; consolidate, merge, sell or otherwise dispose of all or substantially all assets; make investments; transfer or sell assets; enter into restrictive agreements; change the nature of the business; and enter into certain transactions with affiliates. As of September 28, 2019, the Company was in compliance with all covenants that were in effect on such date. Insurance Note Payable As of September 28, 2019, the Company had no notes payable outstanding. As of October 28, 2018, the Company had an outstanding note payable in the amount of $0.5 million related to financed insurance premiums. Insurance premium financings are generally secured by the unearned premiums under such policies. |
CD&R INVESTOR GROUP
CD&R INVESTOR GROUP | 9 Months Ended |
Sep. 28, 2019 | |
Equity [Abstract] | |
CD&R Investor Group | CD&R INVESTOR GROUP On August 14, 2009, the Company entered into an Investment Agreement (as amended, the “Investment Agreement”), by and between the Company and Clayton, Dubilier & Rice Fund VIII, L.P., a Cayman Islands exempted limited partnership (“CD&R Fund VIII”). In connection with the Investment Agreement and the Stockholders Agreement dated October 20, 2009 (the “Old Stockholders Agreement”), CD&R Fund VIII and CD&R Friends & Family Fund VIII, L.P., a Cayman Islands exempted limited partnership (“CD&R FF Fund” and, together with CD&R Fund VIII, the “CD&R Fund VIII Investor Group”) purchased convertible preferred stock of the Company, which was converted into shares of our common stock on May 14, 2013. On December 11, 2017, the CD&R Fund VIII Investor Group completed a registered underwritten offering of 7,150,000 shares of the Company’s Common Stock at a price to the public of $19.36 per share (the “2017 Secondary Offering”). Pursuant to the underwriting agreement, at the CD&R Fund VIII Investor Group request, the Company purchased 1.15 million of the 7.15 million shares of the Company’s Common Stock from the underwriters in the 2017 Secondary Offering at a price per share equal to the price at which the underwriters purchased the shares from the CD&R Fund VIII Investor Group. The total amount the Company spent on these repurchases was $22.3 million. Ply Gem Holdings was acquired by CD&R Fund X and Atrium Intermediate Holdings, LLC, GGC BP Holdings, LLC and AIC Finance Partnership, L.P. (collectively, the “Golden Gate Investor Group”) and merged with Atrium on April 12, 2018 (the “Ply Gem-Atrium Merger”). Pursuant to the terms of the Merger Agreement, on November 16, 2018, the Company entered into (i) a stockholders agreement (the “New Stockholders Agreement”) between the Company, and each of the CD&R Fund VIII Investor Group, CD&R Pisces Holdings, L.P., a Cayman Islands exempted limited partnership (“CD&R Pisces”, and together with the CD&R Fund VIII Investor Group, the “CD&R Investor Group”) and the Golden Gate Investor Group (together with the CD&R Investor Group, the “Investors”), pursuant to which the Company granted to the Investors certain governance, preemptive and subscription rights and (ii) a registration rights agreement (the “New Registration Rights Agreement”) between the Company and each of the Investors, pursuant to which the Company granted the Investors customary demand and piggyback registration rights, including rights to demand registrations and underwritten shelf registration statement offerings with respect to the shares of the Company’s Common Stock that are held by the Investors following the consummation of the Merger. Pursuant to the terms of the New Stockholders Agreement, the Company and the CD&R Fund VIII Investor Group terminated the Old Stockholders Agreement. Pursuant to the terms of the New Registration Rights Agreement, the Company and the CD&R Fund VIII Investor Group terminated the Registration Rights Agreement, dated as of October 20, 2009 (the “Old Registration Rights Agreement”), by and among the Company and the CD&R Fund VIII Investor Group. |
STOCK REPURCHASE PROGRAM
STOCK REPURCHASE PROGRAM | 9 Months Ended |
Sep. 28, 2019 | |
Equity [Abstract] | |
STOCK REPURCHASE PROGRAM | STOCK REPURCHASE PROGRAM On September 8, 2016, the Company announced that its Board of Directors authorized a stock repurchase program for the repurchase of up to an aggregate of $50.0 million of the Company’s outstanding Common Stock. On October 10, 2017 and March 7, 2018, the Company announced that its Board of Directors authorized new stock repurchase programs for the repurchase of up to an aggregate of $50.0 million and an additional $50.0 million, respectively, of the Company’s outstanding Common Stock for a cumulative total of $100.0 million. Under these repurchase programs, the Company is authorized to repurchase shares, if at all, at times and in amounts that it deems appropriate in accordance with all applicable securities laws and regulations. Shares repurchased pursuant to the repurchase programs are usually retired. There is no time limit on the duration of the programs. During the nine months ended September 28, 2019, there were no repurchases under the stock repurchase programs. During the nine months ended July 29, 2018, the Company repurchased approximately 2.7 million shares for $46.7 million under the stock repurchase programs, which included 1.15 million shares for $22.3 million purchased pursuant to the CD&R Fund VIII Investor Group’s 2017 Secondary Offering (see Note 14 — CD&R Investor Group ). As of September 28, 2019, approximately $55.6 million remained available for stock repurchases under the programs. The timing and method of any repurchases, which will depend on a variety of factors, including market conditions, are subject to results of operations, financial conditions, cash requirements and other factors, and may be suspended or discontinued at any time. During the nine months ended September 28, 2019 and July 29, 2018, the Company withheld thirty-five thousand and 0.3 million shares, respectively, of stock to satisfy minimum tax withholding obligations arising in connection with the vesting of stock awards, which are included in treasury stock purchases in the consolidated statements of stockholders’ equity. |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 28, 2019 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS Fair Value of Financial Instruments The carrying amounts of cash and cash equivalents, restricted cash, trade accounts receivable, accounts payable and notes payable approximate fair value as of September 28, 2019 and October 28, 2018, respectively, because of their relatively short maturities. The carrying amounts of the indebtedness under the Current ABL Facility and Current Cash Flow Revolver approximate fair value as the interest rates are variable and reflective of market rates. At September 28, 2019, there was $170.0 million of borrowings outstanding under the Current ABL Facility and no outstanding indebtedness under the Current Cash Flow Revolver. The fair values of the remaining financial instruments not currently recognized at fair value on our consolidated balance sheets at the respective period ends were (in thousands): September 28, 2019 October 28, 2018 Carrying Fair Value Carrying Fair Value Term Loan Facilities $ 2,536,397 $ 2,478,263 $ 412,925 $ 412,409 8.00% Senior Notes 645,000 632,100 — — The fair values of the term loan facility were based on recent trading activities of comparable market instruments, which are level 2 inputs and the fair value of the 8.00% senior notes was based on quoted prices in active markets for the identical liabilities, which are level 1 inputs. Fair Value Measurements ASC Subtopic 820-10, Fair Value Measurements and Disclosures , requires us to use valuation techniques to measure fair value that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized as follows: Level 1 : Observable inputs such as quoted prices for identical assets or liabilities in active markets. Level 2 : Other inputs that are observable directly or indirectly, such as quoted prices for similar assets or liabilities or market-corroborated inputs. Level 3 : Unobservable inputs for which there is little or no market data and which require us to develop our own assumptions about how market participants would price the assets or liabilities. The following is a description of the valuation methodologies used for assets and liabilities measured at fair value. There have been no changes in the methodologies used as of September 28, 2019 and October 28, 2018. Money market: Money market funds have original maturities of three months or less. The original cost of these assets approximates fair value due to their short-term maturity. Mutual funds: Mutual funds are valued at the closing price reported in the active market in which the mutual fund is traded. Assets held for sale: Assets held for sale are valued based on current market conditions, prices of similar assets in similar condition and expected proceeds from the sale of the assets, representative of Level 3 inputs. Deferred compensation plan liability: Deferred compensation plan liability is comprised of phantom investments in the deferred compensation plan and is valued at the closing price reported in the active markets in which the money market and mutual funds are traded. Interest rate swap liability: Interest rate swap liabilities are based on cash flow hedge contracts that have fixed rate structures and are measured against market-based LIBOR yield curves. These interest rate swaps were classified within Level 2 of the fair value hierarchy because they were valued using alternative pricing sources or models that utilized market observable inputs, including current and forward interest rates. Foreign currency hedge: The fair value of the foreign currency forward contract agreement is estimated using industry standard valuation models using market-based observable inputs, including spot rates, forward points, interest rates and volatility inputs (Level 2). The following tables summarize information regarding our financial assets and liabilities that are measured at fair value on a recurring basis as of September 28, 2019 and October 28, 2018, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value (in thousands): September 28, 2019 Level 1 Level 2 Level 3 Total Assets: Short-term investments in deferred compensation plan (1) : Money market $ 27 $ — $ — $ 27 Mutual funds – Growth 991 — — 991 Mutual funds – Blend 1,625 — — 1,625 Mutual funds – Foreign blend 528 — — 528 Mutual funds – Fixed income — 398 — 398 Total short-term investments in deferred compensation plan (2) 3,171 398 — 3,569 Foreign currency hedge (4) — 95 — — Total assets $ 3,171 $ 493 $ — $ 3,664 Liabilities: Deferred compensation plan liability (2) $ — $ 3,564 $ — $ 3,564 Interest rate swap liability (3) — 38,853 — 38,853 Total liabilities $ — $ 42,417 $ — $ 42,417 October 28, 2018 Level 1 Level 2 Level 3 Total Assets: Short-term investments in deferred compensation plan (1) : Money market $ 369 $ — $ — $ 369 Mutual funds – Growth 1,118 — — 1,118 Mutual funds – Blend 2,045 — — 2,045 Mutual funds – Foreign blend 812 — — 812 Mutual funds – Fixed income — 941 — 941 Total short-term investments in deferred compensation plan (2) 4,344 941 — 5,285 Total assets $ 4,344 $ 941 $ — $ 5,285 Liabilities: Deferred compensation plan liability (2) $ — $ 4,639 $ — $ 4,639 Total liabilities $ — $ 4,639 $ — $ 4,639 (1) Unrealized holding gains (losses) for the three months ended September 28, 2019 and July 29, 2018 were $(0.1) million and $0.2 million, respectively. Unrealized holding gains for the nine months ended September 28, 2019 and July 29, 2018 were $0.4 million and $0.3 million, respectively. These unrealized holding gains (losses) were substantially offset by changes in the deferred compensation plan liability. (2) The Company records the short-term investments in deferred compensation plan within investments in debt and equity securities, at market, and the deferred compensation plan liability within accrued compensation and benefits on the consolidated balance sheets. (3) In May 2019, the Company entered into interest rate swaps to mitigate variability in forecasted interest payments on $1,500.0 million of the Company’s unsecured variable debt. The interest rate swaps effectively convert a portion of the floating rate interest payments into a fixed rate interest payment. There are three interest rate swaps that cover $500.0 million of notional debt each and fix the interest rate at 5.918%, 5.906% and 5.907%, respectively. The Company designated the interest rate swaps as qualifying hedging instruments and accounts for these derivatives as cash flow hedges. The interest rate swap liability is included within other long-term liabilities on the consolidated balance sheets. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 28, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Under FASB Accounting Standards Codification 740-270, Income Taxes - Interim Reporting , each interim period is considered an integral part of the annual period and tax expense is measured using an estimated annual effective tax rate. Estimates of the annual effective tax rate at the end of interim periods are, of necessity, based on evaluation of possible future events and transactions and may be subject to subsequent refinement or revision. The Company calculates its quarterly tax provision consistent with the guidance provided by ASC 740-270, whereby the Company forecasts its estimated annual effective tax rate then applies that rate to its year-to-date pre-tax book income (loss). In addition, the Company excludes jurisdictions with a projected loss for the year or the year-to-date loss where the Company cannot recognize a tax benefit from its estimated annual effective tax rate. The impact of such an exclusion could result in a higher or lower effective tax rate during a particular quarter, based upon the mix and timing of actual earnings versus annual projections. In addition to the tax resulting from applying the estimated annual effective tax rate to pre-tax income (loss), the Company includes certain items treated as discrete events to arrive at an estimated effective tax rate. Future changes in the forecasted annual income (loss) projections, tax rate changes, or discrete tax items could result in significant adjustments to quarterly income tax expense in future periods in accordance with ASC 740-270. For the nine months ended September 28, 2019, the Company's estimated annual effective income tax rate was approximately 40.9%, which varied from the statutory rate primarily due to state income tax expense, valuation allowances, foreign income taxes, and the net impact of the Tax Cuts and Jobs Act (“U.S. Tax Reform”). U.S. Tax Reform was enacted by the United States on December 22, 2017. U.S. Tax Reform incorporates significant changes to U.S. corporate income tax laws including, among other things, a reduction in the federal statutory corporate income tax rate from 35% to 21%, an exemption for dividends received from certain foreign subsidiaries, a one-time repatriation tax on deemed repatriated earnings from foreign subsidiaries, immediate expensing of certain depreciable tangible assets, limitations on the deduction for net interest expense and certain executive compensation and the repeal of the Domestic Production Activities Deduction. The effective tax rate including discrete items related to unrecognized tax benefits and adjustments to state income tax rates was 20.4% for the nine months ended September 28, 2019. Valuation allowance As of September 28, 2019, the Company remains in a valuation allowance position, in the amount of $21.4 million, against its deferred tax assets for certain state and Canadian jurisdictions for certain entities as it is currently deemed “ more likely than not ” that the benefit of such net tax assets will not be utilized as the Company continues to be in a three-year cumulative loss position for these states and Canadian jurisdictions. The Company will continue to monitor the positive and negative factors for these jurisdictions and make further changes to the valuation allowances as necessary. As a result of the Merger, net operating losses may be subject to limitation under Section 382. Unrecognized tax benefits Despite the Company’s belief that its tax return positions are consistent with applicable tax laws, the Company believes that certain positions could be challenged by taxing authorities. The Company’s tax reserves reflect the difference between the tax benefit claimed on tax returns and the amount recognized in the consolidated financial statements. These reserves have been established based on management’s assessment as to potential exposure attributable to permanent differences and interest and penalties applicable to both permanent and temporary differences. The tax reserves are reviewed periodically and adjusted in light of changing facts and circumstances, such as progress of tax audits, lapse of applicable statutes of limitations and changes in tax law. The Company is currently under examination by various taxing authorities. During the nine months ended September 28, 2019, the tax reserves increased by approximately $6.9 million. The increase is primarily due to uncertain tax positions that were previously netted against deferred tax assets related to net operating losses in accordance with ASC 740 in addition to interest expense related to previously recorded unrecognized tax benefits. The liability for unrecognized tax benefits as of September 28, 2019 was approximately $11.9 million and is recorded in other long-term liabilities in the accompanying consolidated balance sheet. Tax receivable agreement (“TRA”) liability The TRA liability generally provides for the payment by Ply Gem to a third party entity of 85% of the amount of cash savings, if any, in the U.S. federal, state and local income tax that Ply Gem actually realizes as a result of (i) net operating loss carryovers (“NOLs”) from periods ending before January 1, 2013, (ii) deductible expenses attributable to Ply Gem’s 2013 initial public offering and (iii) deductions related to imputed interest. This liability carried over to the Company in connection with the consummation of the Merger on November 16, 2018. Ply Gem’s future taxable income estimate was used to determine the cumulative NOLs that are expected to be utilized and the TRA liability was accordingly adjusted using the 85% TRA rate as Ply Gem retains the benefit of 15% of the tax savings. As of September 28, 2019, the Company had a $24.8 million current liability for the amount due pursuant to the Tax Receivable Agreement and expects to pay this amount by December 31, 2019. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Sep. 28, 2019 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION Operating segments are defined as components of an enterprise that engage in business activities for which discrete financial information is available and is evaluated on a regular basis by the chief operating decision maker to make decisions regarding the allocation of resources to the segment and assess the performance of the segment. For the transition period ended December 31, 2018, the Company began reporting results under three reportable segments: Commercial, Siding and Windows. The Company’s prior reportable segments, Engineered Building Systems, Metal Components, Insulated Metal Panels, and Metal Coil Coating, are now collectively in the Commercial segment. Prior periods for all periods presented have been recast to conform to the current segment presentation. The Siding segment will include the operating results of the legacy Ply Gem operating segment of Siding, Fencing, and Stone, and the Windows segment will include the operating results of the legacy Ply Gem operating segment of Windows and Doors. These operating segments follow the same accounting policies used for our consolidated financial statements. We evaluate a segment’s performance based primarily upon operating income before corporate expenses. Corporate assets consist primarily of cash, investments, prepaid expenses, current and deferred taxes and property, plant and equipment associated with our headquarters in Cary, North Carolina and office in Houston, Texas. These items (and income and expenses related to these items) are not allocated to the operating segments. During the nine months ended September 28, 2019, the Company changed the manner in which costs were allocated to the Commercial segment for commercial cost centers that had previously been categorized as unallocated corporate costs. Corporate unallocated expenses include share-based compensation expenses, acquisition costs, and other expenses related to executive, legal, finance, tax, treasury, human resources, information technology and strategic sourcing, and corporate travel expenses. Additional unallocated amounts primarily include non-operating items such as interest income, interest expense, loss on extinguishment of debt and other income (expense). The following table represents summary financial data attributable to the segments for the periods indicated (in thousands): Three Months Ended Nine Months Ended September 28, July 29, September 28, July 29, Net sales: Commercial $ 464,906 $ 548,525 $ 1,370,152 $ 1,426,943 Siding 315,799 — 840,601 — Windows 504,338 — 1,434,579 — Total net sales $ 1,285,043 $ 548,525 $ 3,645,332 $ 1,426,943 Operating income: Commercial $ 59,317 $ 79,964 $ 142,436 $ 157,785 Siding 37,063 — 51,346 — Windows 34,446 — 62,039 — Corporate (35,266) (25,463) (106,695) (71,430) Total operating income 95,560 54,501 149,126 86,355 Unallocated other expense, net (56,293) (4,437) (170,894) (37,690) Income (loss) before taxes $ 39,267 $ 50,064 $ (21,768) $ 48,665 September 28, October 28, Total assets: Commercial $ 1,013,517 $ 1,024,433 Siding 2,395,916 — Windows 2,100,574 — Corporate 198,449 85,942 Total assets $ 5,708,456 $ 1,110,375 |
CONTINGENCIES
CONTINGENCIES | 9 Months Ended |
Sep. 28, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES | CONTINGENCIES As a manufacturer of products primarily for use in building construction, the Company is inherently exposed to various types of contingent claims, both asserted and unasserted, in the ordinary course of business. As a result, from time to time, the Company and/or its subsidiaries become involved in various legal proceedings or other contingent matters arising from claims or potential claims. The Company insures against these risks to the extent deemed prudent by its management and to the extent insurance is available. Many of these insurance policies contain deductibles or self-insured retentions in amounts the Company deems prudent and for which the Company is responsible for payment. In determining the amount of self-insurance, it is the Company’s policy to self-insure those losses that are predictable, measurable and recurring in nature. The Company regularly reviews the status of ongoing proceedings and other contingent matters along with legal counsel. Liabilities for such items are recorded when it is probable that the liability has been incurred and when the amount of the liability can be reasonably estimated. Liabilities are adjusted when additional information becomes available. Management believes that the ultimate disposition of these matters will not have a material adverse effect on the Company’s results of operations, financial position or cash flows. However, such matters are subject to many uncertainties and outcomes are not predictable with assurance. Environmental The Company is subject to United States and Canadian federal, state, provincial and local laws and regulations relating to pollution and the protection of the environment, including those governing emissions to air, discharges to water, use, storage, treatment, disposal and transport of hazardous waste and other materials, investigation and remediation of contaminated sites, and protection of worker health and safety. From time to time, the Company’s facilities are subject to investigation by governmental authorities. In addition, the Company has been identified as one of many potentially responsible parties for contamination present at certain offsite locations to which it or its predecessors are alleged to have sent hazardous materials for recycling or disposal. The Company may be held liable, or incur fines or penalties, in connection with such requirements or liabilities for, among other things, releases of hazardous substances occurring on or emanating from current or formerly owned or operated properties or any associated offsite disposal location, or for known or newly-discovered contamination at any of the Company’s properties from activities conducted by it or previous occupants. The amount of any liability, fine or penalty may be material, and certain environmental laws impose strict, and under certain circumstances joint and several, liability for the cost of addressing releases of hazardous substances upon certain classes of persons, including site owners or operators and persons that disposed or arranged for the disposal of hazardous substances at contaminated sites. One of the Company’s subsidiaries entered into an Administrative Order on Consent (the “Consent Order”), effective September 12, 2011, with the United States Environmental Protection Agency (“EPA”), under the Resource Conservation and Recovery Act (“RCRA”), with respect to its Rocky Mount, Virginia property. During 2011, as part of the Consent Order, the Company provided the EPA, among other things, a RCRA Facility Investigation Workplan (the “Workplan”). In 2012, the EPA approved the Workplan, which the Company is currently implementing. Current estimates of remaining costs for predicted assessment, remediation and monitoring activities as of September 28, 2019 are $4.5 million. The Company has recorded approximately $0.3 million of this environmental liability within current liabilities at September 28, 2019 and approximately $4.2 million within other long-term liabilities in the Company’s consolidated balance sheets at September 28, 2019. The Company may incur costs that exceed its recorded environmental liability. The Company will adjust its environmental remediation liability in future periods, if necessary, as further information develops or circumstances change. The EPA is investigating groundwater contamination at a Superfund site in York, Nebraska referred to as the “PCE/TCE Northeast Contamination Site”. A subsidiary of the Company has been named a potentially responsible party (“PRP”) with respect to the PCE/TCE Northeast Contamination Site. As a PRP, the Company could have liability for investigation and remediation costs associated with the contamination. Given the current status of this matter, the Company has recorded a liability of $5.0 million within other long-term liabilities in its consolidated balance sheets as of September 28, 2019. The Company is a party to various acquisition and other agreements pursuant to which third parties agreed to indemnify the Company for certain costs relating to environmental liabilities. For example, the Company may be able to recover some of its Rocky Mount, Virginia investigation and remediation costs from U.S. Industries, Inc. and may be able to recover a portion of costs incurred in connection with the York, Nebraska contamination matter from Novelis Corporation as successor to Alcan Aluminum Corporation, the former owner of the York, Nebraska location. The Company’s ability to seek indemnification from parties that have agreed to indemnify it may be limited. There can be no assurance that the Company would receive any funds from these parties, and any related environmental liabilities or costs could have a material adverse effect on our financial condition and results of operations. Based on current information, the Company is not aware of any environmental compliance obligations, claims or investigations that will have a material adverse effect on its results of operations, cash flows or financial position except as otherwise disclosed in the Company’s consolidated financial statements. However, there can be no guarantee that previously known or newly-discovered matters will not result in material costs or liabilities. Litigation The Company believes it has valid defenses to the outstanding claims discussed below and will vigorously defend all such claims; however, litigation is subject to many uncertainties and there cannot be any assurance that the Company will ultimately prevail or, in the event of an unfavorable outcome or settlement of litigation, that the ultimate liability would not be material and would not have a material adverse effect on the business, results of operations, cash flows or financial position of the Company. In November 2018, Aurora Plastics, LLC (“Aurora”) initiated an arbitration demand against Atrium Windows and Doors, Inc., Atrium Extrusion Systems, Inc., and North Star Manufacturing (London) Ltd. (collectively, “Atrium”) pursuant to a Third Amended and Restated Vinyl Compound and Supply Agreement dated as of December 22, 2016. Aurora alleges that Atrium’s breach of the Agreement has resulted in damages in excess of $48.0 million. Arbitration of the matter is currently stayed but may begin in 2019. On November 14, 2018, an individual stockholder, Gary D. Voigt, filed a putative class action complaint in the Delaware Court of Chancery against CD&R, CD&R Fund VIII, and certain directors of the Company. Voigt purports to assert claims on behalf of himself, on behalf of a class of other similarly situated stockholders of the Company, and derivatively on behalf of the Company, the nominal defendant. An amended complaint was filed on April 11, 2019. The amended complaint asserts claims for breach of fiduciary duty and unjust enrichment against CD&R Fund VIII and CD&R, and for breach of fiduciary duty against the director defendants in connection with the Merger. Voigt seeks damages in an amount to be determined at trial. The Company intends to vigorously defend the litigation. Other contingencies The Company is subject to other contingencies, including legal proceedings and claims arising out of its operations and businesses that cover a wide range of matters, including, among others, environmental, contract, employment, intellectual property, securities, personal injury, property damage, product liability, warranty, and modification, adjustment or replacement of component parts or units sold, which may include product recalls. Product liability, environmental and other legal proceedings also include matters with respect to businesses previously owned. The Company has used various substances in products and manufacturing operations, which have been or may be deemed to be hazardous or dangerous, and the extent of its potential liability, if any, under environmental, product liability and workers’ compensation statutes, rules, regulations and case law is unclear. Further, due to the lack of adequate information and the potential impact of present regulations and any future regulations, there are certain circumstances in which no range of potential exposure may be reasonably estimated. Also, it is not possible to ascertain the ultimate legal and financial liability with respect to certain contingent liabilities, including lawsuits, and therefore no such estimate has been made as of September 28, 2019. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 28, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements for Cornerstone Building Brands, Inc. have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles (“GAAP”) for complete financial statements. In the opinion of management, the unaudited consolidated financial statements included herein contain all adjustments, which consist of normal recurring adjustments, necessary to fairly present the Company’s financial position, results of operations and cash flows for the periods indicated. Operating results for the period from January 1, 2019 through September 28, 2019 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2019. |
Reporting Periods | Reporting Periods On November 16, 2018, the Company’s Board of Directors approved a change to the Company’s fiscal year end from a 52/53 week year with the Company’s fiscal year end on the Sunday closest to October 31 to a calendar year of the twelve-month period from January 1 to December 31. The Company elected to change its fiscal year end in connection with the Merger (as defined below) to align the Company’s fiscal year end with Ply Gem’s (as defined below). As a result of this change, the Company filed a Transition Report on Form 10-Q that included the financial information for the transition period from October 29, 2018 to December 31, 2018, which period is referred to herein as the “Transition Period”. The financial statements contained herein are being filed as part of a Quarterly Report on Form 10-Q for the period from June 30, 2019 through September 28, 2019. References in this Quarterly Report on Form 10-Q to “fiscal year 2018” or “fiscal 2018” refer to the period from October 30, 2017 through October 28, 2018. The results of operations for the three and nine months ended July 29, 2018 are presented herein as the comparable period to the three and nine months ended September 28, 2019. The Company did not recast the consolidated financial statements for the period from June 30, 2018 to September 28, 2018 or January 1, 2018 to September 28, 2018 because the financial reporting processes in place at that time included certain procedures that were completed only on a quarterly basis. Consequently, to recast this period would have been impractical. The Company’s current fiscal quarters are based on a four-four-five week calendar with periods ending on the Saturday of the last week in the quarter except that December 31st will always be the year-end date. Therefore, the financial results of certain fiscal quarters may not be comparable to prior fiscal quarters. |
Adopted Accounting Pronouncements and Recent Accounting Pronouncements | Adopted Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases , to increase transparency and comparability among organizations by recognizing right-of-use assets and lease liabilities on the balance sheet and disclosing key information about leasing transactions. Effective January 1, 2019, the Company adopted the guidance initially applying the standard to leases existing at, or entered into after, the January 1, 2019 adoption date. The Company has elected only the package of three transition practical expedients available under the new standard. The short-term lease recognition exemption has been elected for all leases that qualify as well as the practical expedient to not separate lease and non-lease components for all leases other than leases of durable tooling. The adoption of the new standard resulted in the recognition of additional operating liabilities of $304.1 million with corresponding right-of-use (“ROU”) assets of $304.1 million, based on the present value of the remaining minimum rental payments. The Company recognized no adjustment to opening balance of accumulated deficit as of January 1, 2019. The new standard also provides for practical expedients for an entity’s ongoing accounting. Additional disclosures on leases are included in Note 8 — Leases. In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software—General (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract , which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The accounting for the service element of a hosting arrangement that is a service contract is not affected by these amendments. Effective January 1, 2019, the Company early adopted this guidance on a prospective basis. The application of ASU 2018-15 did not have a material impact on our consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) as subsequently amended. ASU 2014-09 supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition , and most industry-specific guidance. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. We performed an assessment of the differences between the new revenue standard and current accounting practices. As part of our implementation process, we identified significant revenue streams and evaluated a sample of contracts within each significant revenue stream in order to determine the effect of the standard on our revenue recognition practices. We completed this evaluation and have established new policies, procedures, and internal controls in our adoption of the new revenue standard. We adopted this guidance on a modified retrospective basis, pursuant to which we recorded a $2.6 million adjustment to increase the opening balance of accumulated deficit as of October 29, 2018 (the first day of the Transition Period) for the impact of applying the new revenue standard. The adjustment related to changes in the timing of revenue recognition for our weathertightness warranties in our Commercial segment. Additional disaggregated revenue disclosures are included in Note 1 — Summary of Significant Accounting Policies . In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments , which provides guidance on eight cash flow classification issues with the objective of reducing differences in practice. We adopted this guidance on a retrospective basis in the Transition Period. The application of ASU 2016-15 did not have a material impact on our consolidated financial statements. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other than Inventory , which eliminates the exception that prohibits the recognition of current and deferred income tax effects for intra-entity transfers of assets other than inventory until the asset has been sold to an outside party. We adopted this guidance on a modified retrospective basis, pursuant to which we recorded a $0.7 million adjustment to increase the opening balance of accumulated deficit as of October 29, 2018 (the first day of the Transition Period) for the impact of applying the new standard. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force) , which clarifies how entities should present restricted cash and restricted cash equivalents in the statement of cash flows. Entities will no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. An entity with a material balance of restricted cash and restricted cash equivalents must disclose information about the nature of the restrictions. We adopted this guidance on a retrospective basis in the Transition Period. The adoption of this guidance resulted in restricted cash activity previously included in financing activities on our consolidated statement of cash flows to be included as part of the beginning and ending balances of cash and cash equivalents and restricted cash in our consolidated statements of cash flows. In March 2017, the FASB issued ASU 2017-07, Compensation — Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost , which amends the requirements related to the income statement presentation of the components of net periodic benefit cost for employer sponsored defined benefit pension and other postretirement benefit plans. Under the new guidance, an entity must disaggregate and present the service cost component of net periodic benefit cost in the same income statement line items as other employee compensation costs arising from services rendered during the period, and only the service cost component will be eligible for capitalization. Other components of net periodic benefit cost will be presented separately from the line items that include the service cost. We adopted this guidance in the Transition Period on a retrospective basis to adopt the requirement for separate presentation of the income statement service cost and other components, and on a prospective transition method to adopt the requirement to limit the capitalization of benefit cost to the service component. The adoption of ASU 2017-07 did not have a material impact on our consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting , which provides clarity on the accounting for modifications of stock-based awards. The Company adopted this guidance on a prospective basis in the Transition Period for share-based payment awards modified on or after the adoption date. The adoption of ASU 2017-09 did not have a material impact on our consolidated financial statements. In August 2017, the FASB issued ASU No. 2017-12, Targeted Improvements to Accounting for Hedging Activities . This ASU’s objectives are to (1) improve the transparency and understandability of information conveyed to financial statement users about an entity’s risk management activities by better aligning the entity’s financial reporting for hedging relationships with those risk management activities; and (2) reduce the complexity of and simplify the application of hedge accounting by preparers. ASU No. 2017-12 is effective for interim and annual reporting periods beginning after December 15, 2018. The Company adopted this guidance on a prospective basis for fiscal 2019. The adoption of ASU 2017-12 did not have a material impact on our consolidated financial statements. Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This ASU requires an entity to measure all expected credit losses for financial assets, including trade receivables, held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Entities will now incorporate forward-looking information based on expected losses to estimate credit losses. ASU 2016-13 will be effective for our fiscal year ending December 31, 2020, including interim periods within that fiscal year. We are evaluating the impact that the adoption of this ASU will have on our consolidated financial position, result of operations and cash flows. 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, which modifies disclosure requirements for fair value measurements under ASC 820, Fair Value Measurement. We will be required to adopt this guidance retrospectively in the annual and interim periods for our fiscal year ending December 31, 2020, with early adoption permitted. We are evaluating the impact of adopting this guidance. In August 2018, the FASB issued ASU 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans , which removes disclosures no longer considered cost beneficial, clarifies the specific requirements of disclosures and adds disclosure requirements identified as relevant. We will be required to adopt this guidance for our fiscal year ending December 31, 2020, with early adoption permitted. Certain provisions are applied prospectively while others are applied retrospectively. We are evaluating the impact of adopting this guidance. Additionally, there were various other accounting standards and interpretations issued that the Company has not yet been required to adopt, none of which is expected to have a material impact on the Company’s consolidated financial statements going forward. |
Leases | Effective January 1, 2019, the Company adopted ASU 2016-02, Leases, applying the standard to leases existing at the effective date. For arrangements entered into following the transition date, applicability of the standard is determined at inception. The Company leases certain manufacturing, warehouse and distribution locations, vehicles and equipment, including fleet vehicles. Many of these leases have options to terminate prior to or extend beyond the end of the term. The exercise of the majority of lease renewal options is at the Company’s sole discretion. Some lease agreements have variable payments, the majority of these are real estate agreements in which future increases in rent are based on an index. Lease agreements do not contain any material residual value guarantees or material restrictive covenants. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Cash and Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that total the amounts shown in the consolidated statements of cash flows (in thousands): September 28, 2019 Cash and cash equivalents $ 105,244 Restricted cash (1) 3,872 Total cash, cash equivalents and restricted cash shown in the consolidated statements of cash flows $ 109,116 (1) Restricted cash at September 28, 2019 primarily relates to an escrow balance held for an outstanding earnout agreement. |
Restrictions on Cash and Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that total the amounts shown in the consolidated statements of cash flows (in thousands): September 28, 2019 Cash and cash equivalents $ 105,244 Restricted cash (1) 3,872 Total cash, cash equivalents and restricted cash shown in the consolidated statements of cash flows $ 109,116 (1) Restricted cash at September 28, 2019 primarily relates to an escrow balance held for an outstanding earnout agreement. |
Disaggregation of Revenue by Segment | The following table presents disaggregated revenue disclosure details of net sales by segment (in thousands): Three Months Ended Nine Months Ended September 28, July 29, September 28, July 29, Commercial Net Sales Disaggregation: Metal building products $ 320,028 $ 384,311 $ 914,623 $ 964,924 Insulated metal panels 109,322 106,605 332,403 303,910 Metal coil coating 35,556 57,609 123,126 158,109 Total $ 464,906 $ 548,525 $ 1,370,152 $ 1,426,943 Siding Net Sales Disaggregation: Vinyl siding $ 148,912 $ — $ 400,220 $ — Metal 75,933 — 199,265 — Injection molded 17,429 — 47,163 — Stone 32,254 — 70,441 — Other products & services 41,271 — 123,512 — Total $ 315,799 $ — $ 840,601 $ — Windows Net Sales Disaggregation: Vinyl windows $ 481,104 $ — $ 1,355,333 $ — Aluminum windows 11,951 — 39,678 — Other 11,283 — 39,568 — Total $ 504,338 $ — $ 1,434,579 $ — Total Net Sales: $ 1,285,043 $ 548,525 $ 3,645,332 $ 1,426,943 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Business Acquisition [Line Items] | |
Schedule of Estimated Fair Value of Assets and Liabilities Assumed from Acquisition | The Company determined the fair values of the tangible and intangible assets acquired and the liabilities assumed in the Merger, and recorded goodwill based on the excess of fair value of the acquisition consideration over such fair values, as follows (in thousands): Assets acquired: Cash $ 102,121 Accounts receivable 345,801 Inventories 301,513 Prepaid expenses and other current assets 51,223 Property, plant and equipment 364,981 Intangible assets (trade names/customer relationships) 1,720,000 Goodwill 1,469,563 Other assets 3,262 Total assets acquired 4,358,464 Liabilities assumed: Accounts payable 139,955 Tax receivable agreement liability 47,355 Other accrued expenses (inclusive of $25.3 million for current warranty liabilities) 246,341 Debt (inclusive of current portion) 2,674,767 Other long-term liabilities ($163.6 million for accrued long-term warranty) 163,561 Deferred income taxes 325,593 Other long-term liabilities 31,947 Total liabilities assumed 3,629,519 Net assets acquired $ 728,945 |
Business Acquisition, Pro Forma Information | The following table provides unaudited supplemental pro forma results for Cornerstone, prepared in accordance with ASC 805, for the three and nine months ended September 28, 2019 and July 29, 2018 as if the Environmental Stoneworks and Ply Gem (disclosed below) acquisitions had occurred on October 30, 2017 (beginning of the nine months ended July 29, 2018) (in thousands except for per share data): Three Months Ended Nine Months Ended September 28, July 29, September 28, July 29, Net sales $ 1,285,043 $ 1,381,820 $ 3,661,428 $ 3,668,062 Net income (loss) applicable to common shares 28,456 (56,165) 10,532 (221,019) Net income (loss) per common share: Basic $ 0.23 $ (0.45) $ 0.08 $ (1.76) Diluted $ 0.23 $ (0.45) $ 0.08 $ (1.76) |
Environmental Stoneworks | |
Business Acquisition [Line Items] | |
Schedule of Estimated Fair Value of Assets and Liabilities Assumed from Acquisition | The Company determined the fair value of the tangible and intangible assets and the liabilities acquired, and recorded goodwill based on the excess of fair value of the acquisition consideration over such fair values, as follows (in thousands): Assets acquired: Restricted cash $ 3,379 Accounts receivable 17,134 Inventories 13,062 Prepaid expenses and other current assets 3,677 Property, plant and equipment 14,295 Lease right of use assets 11,372 Intangible assets (trade names/customer relationships) 91,170 Goodwill 60,487 Other assets 157 Total assets acquired 214,733 Liabilities assumed: Accounts payable 5,910 Other accrued expenses 11,445 Lease liabilities 11,365 Other long-term liabilities 3,450 Total liabilities assumed 32,170 Net assets acquired $ 182,563 |
GOODWILL (Tables)
GOODWILL (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The Company’s goodwill balance and changes in the carrying amount of goodwill by segment follows (in thousands): Commercial Siding Windows Total Balance, October 28, 2018 $ 148,291 $ — $ — $ 148,291 Goodwill recognized from Merger — 854,606 639,447 1,494,053 Currency translation — (1,220) (913) (2,133) Balance, December 31, 2018 $ 148,291 $ 853,386 $ 638,534 $ 1,640,211 Goodwill recognized from Environmental Stoneworks Acquisition — 60,487 — 60,487 Currency translation — 985 736 1,721 Purchase accounting adjustments — (14,009) (10,481) (24,490) Balance, September 28, 2019 $ 148,291 $ 900,849 $ 628,789 $ 1,677,929 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory Components | The components of inventory are as follows (in thousands): September 28, October 28, Raw materials $ 265,888 $ 205,902 Work in process and finished goods 202,028 48,629 $ 467,916 $ 254,531 |
INTANGIBLES (Tables)
INTANGIBLES (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | The table that follows presents the major components of intangible assets as of September 28, 2019 and October 28, 2018 (in thousands): Range of Life (Years) Cost Accumulated Amortization Net Carrying Value As of September 28, 2019 Amortized intangible assets: Trademarks/Trade names (1) 6 – 15 $ 252,942 $ (34,257) $ 218,685 Customer lists and relationships 5 – 20 1,737,060 (170,808) 1,566,252 Total intangible assets $ 1,990,002 $ (205,065) $ 1,784,937 (1) During the nine months ended September 28, 2019, the Company began amortization of trade names previously classified as indefinite-lived over an eight Range of Life (Years) Cost Accumulated Amortization Net Carrying Value As of October 28, 2018 Amortized intangible assets: Trademarks/Trade names 15 $ 29,167 $ (12,657) $ 16,510 Customer lists and relationships 12 – 20 136,210 (38,646) 97,564 Indefinite-lived intangible assets: Trade names 13,455 — 13,455 Total intangible assets $ 178,832 $ (51,303) $ 127,529 |
Schedule of Indefinite-Lived Intangible Assets | The table that follows presents the major components of intangible assets as of September 28, 2019 and October 28, 2018 (in thousands): Range of Life (Years) Cost Accumulated Amortization Net Carrying Value As of September 28, 2019 Amortized intangible assets: Trademarks/Trade names (1) 6 – 15 $ 252,942 $ (34,257) $ 218,685 Customer lists and relationships 5 – 20 1,737,060 (170,808) 1,566,252 Total intangible assets $ 1,990,002 $ (205,065) $ 1,784,937 (1) During the nine months ended September 28, 2019, the Company began amortization of trade names previously classified as indefinite-lived over an eight Range of Life (Years) Cost Accumulated Amortization Net Carrying Value As of October 28, 2018 Amortized intangible assets: Trademarks/Trade names 15 $ 29,167 $ (12,657) $ 16,510 Customer lists and relationships 12 – 20 136,210 (38,646) 97,564 Indefinite-lived intangible assets: Trade names 13,455 — 13,455 Total intangible assets $ 178,832 $ (51,303) $ 127,529 |
Intangible Assets, Goodwill and
Intangible Assets, Goodwill and Other (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
ASSETS HELD FOR SALE | ASSETS HELD FOR SALE We record assets held for sale at the lower of the carrying value or fair value less costs to sell. The following criteria are used to determine if property is held for sale: (i) management has the authority and commits to a plan to sell the property; (ii) the property is available for immediate sale in its present condition; (iii) there is an active program to locate a buyer and the plan to sell the property has been initiated; (iv) the sale of the property is probable within one year; (v) the property is being actively marketed at a reasonable sale price relative to its current fair value; and (vi) it is unlikely that the plan to sell will be withdrawn or that significant changes to the plan will be made. In determining the fair value of the assets less cost to sell, we consider factors including current sales prices for comparable assets in the area, recent market analysis studies, appraisals and any recent legitimate offers. If the estimated fair value less cost to sell of an asset is less than its current carrying value, the asset is written down to its estimated fair value less cost to sell. The total carrying value of assets held for sale was $5.0 million and $7.3 million as of September 28, 2019 and October 28, 2018, respectively. All of these assets continued to be actively marketed for sale or were under contract as of September 28, 2019. During the nine months ended September 28, 2019 the Company determined an alternative use for a facility in the Commercial segment that had previously been classified as held for sale and reclassified the net book value of $1.7 million to property, plant and equipment and recorded an immaterial depreciation adjustment. Additionally, during the nine months ended September 28, 2019, the Company closed on the sale of an idled facility in the Commercial segment which had previously been classified as held for sale. In connection with the sale we received net proceeds of $0.9 million and recognized a net gain of $0.3 million, which is included in restructuring and impairment charges, net, in the consolidated statements of operations for the nine months ended September 28, 2019. |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Leases [Abstract] | |
Schedules of Lease Costs | Weighted average information about the Company’s lease portfolio as of September 28, 2019 was as follows: Weighted-average remaining lease term 5.6 years Weighted-average IBR 6.08 % Operating lease costs for the three and nine months ended September 28, 2019 were as follows (in thousands): Three Months Ended Nine Months Ended September 28, 2019 September 28, 2019 Operating lease costs Fixed lease costs $ 23,903 $ 77,125 Variable lease costs (1) 8,654 27,868 (1) Includes short-term lease costs, which are immaterial. |
Cash and Non-cash Activities of Leases | Cash and non-cash activities for the three and nine months ended September 28, 2019 were as follows (in thousands): Three Months Ended Nine Months Ended September 28, 2019 September 28, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 23,463 $ 66,936 Right-of-use assets obtained in exchange for new operating lease liabilities $ 47,236 $ 372,269 |
Schedule of Future Minimum Lease Payments | Future minimum lease payments under non-cancelable leases as of September 28, 2019 were as follows (in thousands): Operating Leases 2019 (excluding the nine months ended September 28, 2019) $ 23,640 2020 86,617 2021 76,607 2022 61,548 2023 34,935 Thereafter 119,393 Total future minimum lease payments 402,740 Less: interest 90,123 Present value of future minimum lease payments $ 312,617 As of September 28, 2019 Current portion of lease liabilities $ 68,993 Long-term portion of lease liabilities 243,624 Total $ 312,617 |
EARNINGS PER COMMON SHARE (Tabl
EARNINGS PER COMMON SHARE (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The reconciliation of the numerator and denominator used for the computation of basic and diluted earnings per common share is as follows (in thousands, except per share data): Three Months Ended Nine Months Ended September 28, July 29, September 28, July 29, Numerator for Basic and Diluted Earnings Per Common Share Net income (loss) applicable to common shares $ 24,790 $ 35,765 $ (17,320) $ 35,303 Denominator for Basic and Diluted Income Per Common Share Weighted average basic number of common shares outstanding 125,557 66,335 125,526 66,361 Common stock equivalents: Employee stock options 1 95 — 98 PSUs and Performance Share Awards — 8 — 18 Weighted average diluted number of common shares outstanding 125,558 66,438 125,526 66,477 Basic income (loss) per common share $ 0.20 $ 0.54 $ (0.14) $ 0.53 Diluted income (loss) per common share $ 0.20 $ 0.54 $ (0.14) $ 0.53 Incentive Plan securities excluded from dilution (1) 5,189 — 4,974 — (1) Represents securities not included in the computation of diluted earnings per common share because their effect would have been anti-dilutive. |
WARRANTY (Tables)
WARRANTY (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Product Warranties Disclosures [Abstract] | |
Schedule of Acquired Accrued Warranty Obligation and Deferred Warranty Revenue | The following table represents the rollforward of our accrued warranty obligation and deferred warranty revenue activity for the nine months ended September 28, 2019 and July 29, 2018 (in thousands): Nine Months Ended September 28, 2019 July 29, 2018 Beginning balance $ 134,515 $ 32,418 Purchase accounting adjustments 84,280 — Warranties sold 2,313 2,616 Revenue recognized (2,075) (1,971) Expense 22,006 — Settlements (22,285) (1,654) Ending balance 218,754 31,409 Less: current portion 31,294 5,970 Total, less current portion $ 187,460 $ 25,439 |
DEFINED BENEFIT PLANS (Tables)
DEFINED BENEFIT PLANS (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Retirement Benefits [Abstract] | |
Schedule of Accumulated and Projected Benefit Obligations | The following table sets forth the components of the net periodic benefit cost, before tax, and funding contributions, for the periods indicated (in thousands): Three Months Ended September 28, 2019 Three Months Ended July 29, 2018 Defined OPEB Total Defined OPEB Total Service cost $ 11 $ 6 $ 17 $ 22 $ 7 $ 29 Interest cost 974 66 1,040 494 62 556 Expected return on assets (1,234) — (1,234) (729) — (729) Amortization of prior service cost 15 — 15 15 — 15 Amortization of net actuarial loss 704 — 704 248 — 248 Net periodic benefit cost $ 470 $ 72 $ 542 $ 50 $ 69 $ 119 Nine Months Ended September 28, 2019 Nine Months Ended July 29, 2018 Defined OPEB Total Defined OPEB Total Service cost $ 32 $ 17 $ 49 $ 65 $ 21 $ 86 Interest cost 2,922 197 3,119 1,481 185 1,666 Expected return on assets (3,701) — (3,701) (2,187) — (2,187) Amortization of prior service cost 43 — 43 43 — 43 Amortization of net actuarial loss 2,112 — 2,112 743 — 743 Net periodic benefit cost $ 1,408 $ 214 $ 1,622 $ 145 $ 206 $ 351 |
LONG-TERM DEBT AND NOTE PAYAB_2
LONG-TERM DEBT AND NOTE PAYABLE (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Debt Instrument [Line Items] | |
Schedule Of Debt | Debt is comprised of the following (in thousands): September 28, October 28, Asset-based revolving credit facility due April 2023 $ 170,000 $ — Asset-based revolving credit facility due February 2023 — — Term loan facility due April 2025 2,536,397 — Term loan facility due February 2025 — 412,925 Cash flow revolver due April 2023 — — 8.00% senior notes due April 2026 645,000 — Less: unamortized discounts and unamortized deferred financing costs (1) (58,151) (5,699) Total long-term debt, net of unamortized discounts and unamortized deferred financing costs 3,293,246 407,226 Less: current portion of long-term debt 25,600 4,150 Total long-term debt, less current portion $ 3,267,646 $ 403,076 (1) Includes the unamortized deferred financing costs associated with the term loan facilities and senior notes. The unamortized deferred financing costs associated with the asset-based revolving credit facilities of $2.6 million and $1.1 million as of September 28, 2019 and October 28, 2018, respectively, are classified in other assets on the consolidated balance sheets. |
Schedule of Long-term Debt Instruments | As of September 28, 2019, the Company had the following in relation to the Current ABL Facility (in thousands): September 28, 2019 Excess availability $ 405,976 Revolving loans outstanding 170,000 Letters of credit outstanding 30,311 |
Term Loan Facility | |
Debt Instrument [Line Items] | |
Schedule of Long-term Debt Instruments | At September 28, 2019, the interest rates on the Current Term Loan Facility were as follows: September 28, 2019 Interest rate 5.79 % Effective interest rate 6.51 % |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Not Currently Recognized on Balance sheet | The fair values of the remaining financial instruments not currently recognized at fair value on our consolidated balance sheets at the respective period ends were (in thousands): September 28, 2019 October 28, 2018 Carrying Fair Value Carrying Fair Value Term Loan Facilities $ 2,536,397 $ 2,478,263 $ 412,925 $ 412,409 8.00% Senior Notes 645,000 632,100 — — |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following tables summarize information regarding our financial assets and liabilities that are measured at fair value on a recurring basis as of September 28, 2019 and October 28, 2018, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value (in thousands): September 28, 2019 Level 1 Level 2 Level 3 Total Assets: Short-term investments in deferred compensation plan (1) : Money market $ 27 $ — $ — $ 27 Mutual funds – Growth 991 — — 991 Mutual funds – Blend 1,625 — — 1,625 Mutual funds – Foreign blend 528 — — 528 Mutual funds – Fixed income — 398 — 398 Total short-term investments in deferred compensation plan (2) 3,171 398 — 3,569 Foreign currency hedge (4) — 95 — — Total assets $ 3,171 $ 493 $ — $ 3,664 Liabilities: Deferred compensation plan liability (2) $ — $ 3,564 $ — $ 3,564 Interest rate swap liability (3) — 38,853 — 38,853 Total liabilities $ — $ 42,417 $ — $ 42,417 October 28, 2018 Level 1 Level 2 Level 3 Total Assets: Short-term investments in deferred compensation plan (1) : Money market $ 369 $ — $ — $ 369 Mutual funds – Growth 1,118 — — 1,118 Mutual funds – Blend 2,045 — — 2,045 Mutual funds – Foreign blend 812 — — 812 Mutual funds – Fixed income — 941 — 941 Total short-term investments in deferred compensation plan (2) 4,344 941 — 5,285 Total assets $ 4,344 $ 941 $ — $ 5,285 Liabilities: Deferred compensation plan liability (2) $ — $ 4,639 $ — $ 4,639 Total liabilities $ — $ 4,639 $ — $ 4,639 (1) Unrealized holding gains (losses) for the three months ended September 28, 2019 and July 29, 2018 were $(0.1) million and $0.2 million, respectively. Unrealized holding gains for the nine months ended September 28, 2019 and July 29, 2018 were $0.4 million and $0.3 million, respectively. These unrealized holding gains (losses) were substantially offset by changes in the deferred compensation plan liability. (2) The Company records the short-term investments in deferred compensation plan within investments in debt and equity securities, at market, and the deferred compensation plan liability within accrued compensation and benefits on the consolidated balance sheets. (3) In May 2019, the Company entered into interest rate swaps to mitigate variability in forecasted interest payments on $1,500.0 million of the Company’s unsecured variable debt. The interest rate swaps effectively convert a portion of the floating rate interest payments into a fixed rate interest payment. There are three interest rate swaps that cover $500.0 million of notional debt each and fix the interest rate at 5.918%, 5.906% and 5.907%, respectively. The Company designated the interest rate swaps as qualifying hedging instruments and accounts for these derivatives as cash flow hedges. The interest rate swap liability is included within other long-term liabilities on the consolidated balance sheets. |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Sales, Operating Income, and Total Assets for Operating Segments | The following table represents summary financial data attributable to the segments for the periods indicated (in thousands): Three Months Ended Nine Months Ended September 28, July 29, September 28, July 29, Net sales: Commercial $ 464,906 $ 548,525 $ 1,370,152 $ 1,426,943 Siding 315,799 — 840,601 — Windows 504,338 — 1,434,579 — Total net sales $ 1,285,043 $ 548,525 $ 3,645,332 $ 1,426,943 Operating income: Commercial $ 59,317 $ 79,964 $ 142,436 $ 157,785 Siding 37,063 — 51,346 — Windows 34,446 — 62,039 — Corporate (35,266) (25,463) (106,695) (71,430) Total operating income 95,560 54,501 149,126 86,355 Unallocated other expense, net (56,293) (4,437) (170,894) (37,690) Income (loss) before taxes $ 39,267 $ 50,064 $ (21,768) $ 48,665 September 28, October 28, Total assets: Commercial $ 1,013,517 $ 1,024,433 Siding 2,395,916 — Windows 2,100,574 — Corporate 198,449 85,942 Total assets $ 5,708,456 $ 1,110,375 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Reconciliation of Cash, Cash Equivalents and Restricted Cash (Details) $ in Thousands | 2 Months Ended | 3 Months Ended | 9 Months Ended | |||||
Dec. 31, 2018USD ($)reporting_segment | Dec. 31, 2018USD ($)operating_segment | Sep. 28, 2019USD ($) | Jul. 29, 2018USD ($) | Sep. 28, 2019USD ($) | Jul. 29, 2018USD ($) | Oct. 28, 2018USD ($) | Oct. 29, 2017USD ($) | |
Restructuring Cost and Reserve [Line Items] | ||||||||
Number of reportable segments | 3 | 3 | ||||||
Loss (gain) on disposition of business | $ 0 | $ (1,013) | $ 0 | $ 5,673 | ||||
Cash and cash equivalents | 105,244 | 105,244 | $ 54,272 | |||||
Restricted cash | 3,872 | 3,872 | ||||||
Total cash, cash equivalents and restricted cash shown in the consolidated statements of cash flows | $ 147,607 | $ 147,607 | $ 109,116 | 43,502 | $ 109,116 | 43,502 | $ 65,794 | |
Commercial | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Loss (gain) on disposition of business | (1,000) | (1,000) | ||||||
Commercial | CENTRIA International LLC | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Loss (gain) on disposition of business | $ 6,700 | |||||||
Natural Disasters and Other Casualty Events | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Insurance settlement contingent replacement cost receivable maximum | 4,700 | |||||||
Gain on insurance recovery | $ 4,700 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Jul. 29, 2018 | Sep. 28, 2019 | Jul. 29, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Total net sales | $ 1,285,043 | $ 548,525 | $ 3,645,332 | $ 1,426,943 |
Commercial | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales | 464,906 | 548,525 | 1,370,152 | 1,426,943 |
Commercial | Metal building products | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales | 320,028 | 384,311 | 914,623 | 964,924 |
Commercial | Insulated metal panels | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales | 109,322 | 106,605 | 332,403 | 303,910 |
Commercial | Metal coil coating | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales | 35,556 | 57,609 | 123,126 | 158,109 |
Siding | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales | 315,799 | 0 | 840,601 | 0 |
Siding | Vinyl siding | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales | 148,912 | 0 | 400,220 | 0 |
Siding | Metal | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales | 75,933 | 0 | 199,265 | 0 |
Siding | Injection molded | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales | 17,429 | 0 | 47,163 | 0 |
Siding | Stone | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales | 32,254 | 0 | 70,441 | 0 |
Siding | Other Products and Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales | 41,271 | 0 | 123,512 | 0 |
Windows | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales | 504,338 | 0 | 1,434,579 | 0 |
Windows | Other Products and Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales | 11,283 | 0 | 39,568 | 0 |
Windows | Vinyl windows | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales | 481,104 | 0 | 1,355,333 | 0 |
Windows | Aluminum windows | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales | $ 11,951 | $ 0 | $ 39,678 | $ 0 |
ACCOUNTING PRONOUNCEMENTS (Deta
ACCOUNTING PRONOUNCEMENTS (Details) - USD ($) | Sep. 28, 2019 | Jan. 01, 2019 | Oct. 29, 2018 | Oct. 28, 2018 | Oct. 29, 2017 |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Lease liabilities | $ 312,617,000 | $ 304,100,000 | |||
Lease right-of-use assets | $ 308,256,000 | 304,100,000 | |||
Cumulative effect of accounting change | $ (3,358,000) | $ 0 | |||
Retained Earnings (Deficit) | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Cumulative effect of accounting change | $ (3,358,000) | $ (1,351,000) | |||
Accounting Standards Update 2016-02 | Retained Earnings (Deficit) | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Cumulative effect of accounting change | $ 0 | ||||
Accounting Standards Update 2014-09 | Retained Earnings (Deficit) | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Cumulative effect of accounting change | $ 2,600,000 | ||||
Accounting Standards Update 2016-16 | Retained Earnings (Deficit) | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Cumulative effect of accounting change | $ 700,000 |
ACQUISITIONS - Narrative (Detai
ACQUISITIONS - Narrative (Details) | Feb. 20, 2019USD ($) | Nov. 16, 2018USD ($)$ / shares | Nov. 15, 2018USD ($)$ / sharesshares | Oct. 15, 2018USD ($) | Sep. 28, 2019USD ($)$ / shares | Sep. 28, 2019USD ($)operating_segment$ / shares | Jul. 29, 2018USD ($) | Dec. 31, 2018USD ($) | Oct. 28, 2018USD ($)$ / shares | Oct. 14, 2018USD ($) | Apr. 12, 2018USD ($) | Feb. 08, 2018USD ($) |
Business Acquisition [Line Items] | ||||||||||||
Goodwill | $ 1,677,929,000 | $ 1,677,929,000 | $ 1,640,211,000 | $ 148,291,000 | ||||||||
Common stock, par value (in USD per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |||||||||
Payment on outstanding borrowings | $ 120,000,000 | $ 85,000,000 | ||||||||||
Proceeds from ABL facility | 290,000,000 | $ 85,000,000 | ||||||||||
Environmental Stoneworks | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Percentage of outstanding interests acquired | 100.00% | |||||||||||
Total cash consideration transferred | $ 182,600,000 | |||||||||||
Goodwill | $ 60,487,000 | |||||||||||
Acquisition related expenses | $ 0 | 1,500,000 | ||||||||||
Net sales of acquiree included in our financial statements | 45,400,000 | 108,200,000 | ||||||||||
Net income (loss) of acquiree included in our financial statements | $ 2,800,000 | 5,800,000 | ||||||||||
Pro forma acquisition and compensation costs | 70,300,000 | |||||||||||
Pro forma purchase price allocation of inventories | $ 37,900,000 | |||||||||||
Ply Gem | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Total cash consideration transferred | $ 728,900,000 | |||||||||||
Goodwill | $ 1,469,563,000 | |||||||||||
Shares issued in transaction (in shares) | shares | 58,709,067 | |||||||||||
Common stock, par value (in USD per share) | $ / shares | $ 0.01 | |||||||||||
Sale of stock, ownership percentage issued | 47.00% | |||||||||||
Business acquisition, share price (in dollars per share) | $ / shares | $ 12.16 | |||||||||||
Equity not issued in merger (in shares) | shares | 57,103 | |||||||||||
Consideration transferred, stock issuance | $ 713,900,000 | |||||||||||
Cash payment for acquisition | 15,000,000 | |||||||||||
Term Loan Facility | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Debt instrument, face amount | 1,755,000,000 | |||||||||||
Increase in borrowing capacity | 805,000,000 | |||||||||||
Line of credit outstanding | 2,555,600,000 | |||||||||||
Term Loan Facility | Ply Gem | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Debt instrument, face amount | $ 1,755,000,000 | |||||||||||
Increase in borrowing capacity | 805,000,000 | |||||||||||
Cash Flow Revolver | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Line of credit facility, maximum borrowing capacity | 115,000,000 | $ 115,000,000 | ||||||||||
Proceeds from ABL facility | $ 0 | |||||||||||
8.00% Senior Notes | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Debt instrument, interest rate, stated percentage | 8.00% | 8.00% | 8.00% | 8.00% | ||||||||
ABL Facility | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Proceeds from ABL facility | $ 0 | |||||||||||
ABL Facility | Revolving Credit Facility | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Line of credit facility, maximum borrowing capacity | 611,000,000 | $ 396,000,000 | $ 360,000,000 | $ 150,000,000 | ||||||||
Increase in borrowing capacity | 215,000,000 | 36,000,000 | ||||||||||
Payment on outstanding borrowings | $ 325,000,000 | |||||||||||
Debt instrument, quarterly debt amortization, percent of aggregate principal amount | 1.00% | |||||||||||
ABL Facility | Revolving Credit Facility | ABL U.S. Facility | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Line of credit facility, maximum borrowing capacity | $ 483,700,000 | $ 313,500,000 | 313,500,000 | $ 285,000,000 | 285,000,000 | |||||||
ABL Facility | Revolving Credit Facility | ABL Canadian Facility | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Line of credit facility, maximum borrowing capacity | 127,300,000 | $ 82,500,000 | $ 82,500,000 | $ 75,000,000 | 75,000,000 | |||||||
Letter of Credit | ABL Facility | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Line of credit facility, maximum borrowing capacity | $ 30,000,000 | |||||||||||
Line of credit outstanding | 24,700,000 | |||||||||||
Ply Gem | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Number of segments | operating_segment | 2 | |||||||||||
Ply Gem | 8.00% Senior Notes | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Debt instrument, face amount | $ 645,000,000 | |||||||||||
Siding | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Goodwill | $ 900,849,000 | $ 900,849,000 | 853,386,000 | $ 0 | ||||||||
Siding | Ply Gem | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Goodwill | 840,600,000 | |||||||||||
Windows | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Goodwill | $ 628,789,000 | $ 628,789,000 | $ 638,534,000 | $ 0 | ||||||||
Windows | Ply Gem | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Goodwill | $ 629,000,000 |
ACQUISITIONS - Schedule of Asse
ACQUISITIONS - Schedule of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Sep. 28, 2019 | Feb. 20, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | Nov. 16, 2018 | Oct. 28, 2018 |
Assets acquired: | ||||||
Goodwill | $ 1,677,929 | $ 1,640,211 | $ 148,291 | |||
Liabilities assumed: | ||||||
Lease liabilities | $ 312,617 | $ 304,100 | ||||
Environmental Stoneworks | ||||||
Assets acquired: | ||||||
Restricted cash | $ 3,379 | |||||
Accounts receivable | 17,134 | |||||
Inventories | 13,062 | |||||
Prepaid expenses and other current assets | 3,677 | |||||
Property, plant and equipment | 14,295 | |||||
Lease right of use assets | 11,372 | |||||
Intangible assets (trade names/customer relationships) | 91,170 | |||||
Goodwill | 60,487 | |||||
Other assets | 157 | |||||
Total assets acquired | 214,733 | |||||
Liabilities assumed: | ||||||
Accounts payable | 5,910 | |||||
Other accrued expenses | 11,445 | |||||
Lease liabilities | 11,365 | |||||
Other long-term liabilities | 3,450 | |||||
Total liabilities assumed | 32,170 | |||||
Net assets acquired | $ 182,563 | |||||
Ply Gem | ||||||
Assets acquired: | ||||||
Cash | $ 102,121 | |||||
Accounts receivable | 345,801 | |||||
Inventories | 301,513 | |||||
Prepaid expenses and other current assets | 51,223 | |||||
Property, plant and equipment | 364,981 | |||||
Intangible assets (trade names/customer relationships) | 1,720,000 | |||||
Goodwill | 1,469,563 | |||||
Other assets | 3,262 | |||||
Total assets acquired | 4,358,464 | |||||
Liabilities assumed: | ||||||
Accounts payable | 139,955 | |||||
Other accrued expenses | 246,341 | |||||
Other long-term liabilities | 31,947 | |||||
Other long-term liabilities ($163.6 million for accrued long-term warranty) | 163,561 | |||||
Tax receivable agreement liability | 47,355 | |||||
Current warranty liabilities | 25,300 | |||||
Debt (inclusive of current portion) | 2,674,767 | |||||
Deferred income taxes | 325,593 | |||||
Total liabilities assumed | 3,629,519 | |||||
Net assets acquired | 728,945 | |||||
Current warranty liabilities | 25,300 | |||||
Accrued long-term warranty | $ 163,600 |
ACQUISITIONS - Schedule of Pro
ACQUISITIONS - Schedule of Pro Forma Information (Details) - Environmental Stoneworks - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Jul. 29, 2018 | Sep. 28, 2019 | Jul. 29, 2018 | |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Net sales | $ 1,285,043 | $ 1,381,820 | $ 3,661,428 | $ 3,668,062 |
Net income (loss) applicable to common shares | $ 28,456 | $ (56,165) | $ 10,532 | $ (221,019) |
Net income (loss) per common share: | ||||
Basic (in dollars per share) | $ 0.23 | $ (0.45) | $ 0.08 | $ (1.76) |
Diluted (in dollars per share) | $ 0.23 | $ (0.45) | $ 0.08 | $ (1.76) |
GOODWILL (Details)
GOODWILL (Details) - USD ($) $ in Thousands | 2 Months Ended | 9 Months Ended |
Dec. 31, 2018 | Sep. 28, 2019 | |
Goodwill [Roll Forward] | ||
Balance | $ 148,291 | $ 1,640,211 |
Goodwill recognized from merger and acquisition | 1,494,053 | 60,487 |
Currency translation | (2,133) | 1,721 |
Purchase accounting adjustments | (24,490) | |
Balance | 1,640,211 | 1,677,929 |
Commercial | ||
Goodwill [Roll Forward] | ||
Balance | 148,291 | 148,291 |
Goodwill recognized from merger and acquisition | 0 | 0 |
Currency translation | 0 | 0 |
Purchase accounting adjustments | 0 | |
Balance | 148,291 | 148,291 |
Siding | ||
Goodwill [Roll Forward] | ||
Balance | 0 | 853,386 |
Goodwill recognized from merger and acquisition | 854,606 | 60,487 |
Currency translation | (1,220) | 985 |
Purchase accounting adjustments | (14,009) | |
Balance | 853,386 | 900,849 |
Windows | ||
Goodwill [Roll Forward] | ||
Balance | 0 | 638,534 |
Goodwill recognized from merger and acquisition | 639,447 | 0 |
Currency translation | (913) | 736 |
Purchase accounting adjustments | (10,481) | |
Balance | $ 638,534 | $ 628,789 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Sep. 28, 2019 | Oct. 28, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 265,888 | $ 205,902 |
Work in process and finished goods | 202,028 | 48,629 |
Inventories, net | $ 467,916 | $ 254,531 |
INTANGIBLES (Details)
INTANGIBLES (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 28, 2019 | Oct. 28, 2018 | |
Finite-Lived Intangible Assets [Line Items] | ||
Accumulated amortization | $ (205,065) | $ (51,303) |
Indefinite-lived trade names | 13,455 | |
Total intangible assets, cost | 1,990,002 | 178,832 |
Total intangible assets, net carrying value | 1,784,937 | $ 127,529 |
Trademarks and Trade Names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful life (in years) | 15 years | |
Amortized intangible assets | 252,942 | $ 29,167 |
Accumulated amortization | (34,257) | (12,657) |
Net carrying value | $ 218,685 | 16,510 |
Trademarks and Trade Names | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful life (in years) | 6 years | |
Trademarks and Trade Names | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful life (in years) | 15 years | |
Customer Lists and Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortized intangible assets | $ 1,737,060 | 136,210 |
Accumulated amortization | (170,808) | (38,646) |
Net carrying value | $ 1,566,252 | $ 97,564 |
Customer Lists and Relationships | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful life (in years) | 5 years | 12 years |
Customer Lists and Relationships | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful life (in years) | 20 years | 20 years |
Trade Names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful life (in years) | 8 years |
ASSETS HELD FOR SALE (Details)
ASSETS HELD FOR SALE (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 28, 2019 | Oct. 28, 2018 | |
Long Lived Assets Held-for-sale [Line Items] | ||
Assets held for sale, carrying value, current | $ 5,018 | $ 7,272 |
Proceeds from sale of assets held for sale | 900 | |
Net gain on sale of facility | 300 | |
Assets held-for-sale, fair value | 5,000 | |
Commercial | ||
Long Lived Assets Held-for-sale [Line Items] | ||
Decrease in assets-held-for-sale | $ 1,700 |
LEASES - Summary of Lease Costs
LEASES - Summary of Lease Costs (Details) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 28, 2019USD ($) | Sep. 28, 2019USD ($) | |
Leases [Abstract] | ||
Weighted-average remaining lease term | 5 years 7 months 6 days | 5 years 7 months 6 days |
Weighted-average IBR (as a percent) | 6.08% | 6.08% |
Fixed lease costs | $ 23,903 | $ 77,125 |
Variable lease costs | $ 8,654 | $ 27,868 |
LEASES - Summary of Cash Flow I
LEASES - Summary of Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 28, 2019 | Sep. 28, 2019 | |
Leases [Abstract] | ||
Operating cash flows from operating leases | $ 23,463 | $ 66,936 |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 47,236 | $ 372,269 |
LEASES - Schedule of Future Min
LEASES - Schedule of Future Minimum Lease Payments (Details) - USD ($) $ in Thousands | Sep. 28, 2019 | Jan. 01, 2019 |
Leases [Abstract] | ||
2019 (excluding the nine months ended September 28, 2019) | $ 23,640 | |
2020 | 86,617 | |
2021 | 76,607 | |
2022 | 61,548 | |
2023 | 34,935 | |
Thereafter | 119,393 | |
Total future minimum lease payments | 402,740 | |
Less: interest | 90,123 | |
Present value of future minimum lease payments | 312,617 | $ 304,100 |
Current portion of lease liabilities | 68,993 | |
Long-term portion of lease liabilities | $ 243,624 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) - USD ($) | Nov. 16, 2018 | Sep. 28, 2019 | Jul. 29, 2018 | Sep. 28, 2019 | Jul. 29, 2018 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock option awards, termination period from grant date | 10 years | ||||
Expiration period, after termination of employment | 60 days | ||||
Expiration period, after death, disability or retirement | 180 days | ||||
Stock options, grants in period (in shares) | 400,000 | 0 | |||
Stock options, grant date fair value (in dollars per share) | $ 1.97 | ||||
Stock options exercised (in shares) | 0 | 100,000 | |||
Stock options exercised, intrinsic value | $ 800,000 | ||||
Proceeds from stock options exercised | $ 0 | 1,279,000 | |||
Conversion of stock, percentage | 100.00% | ||||
Allocated share-based compensation expense | $ 3,100,000 | $ 1,000,000 | $ 10,600,000 | 8,900,000 | |
Accelerated awards due to retirement | 3,600,000 | ||||
Employee stock options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting percentage per year | 20.00% | ||||
PSUs and Performance Share Awards | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock awards, targeted number of shares (as a percent) | 0.00% | 0.00% | |||
PSUs and Performance Share Awards | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock awards, targeted number of shares (as a percent) | 200.00% | 200.00% | |||
Restricted Stock Units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting percentage per year | 20.00% | ||||
Value, restricted stock award, gross | $ 2,800,000 | $ 6,800,000 | |||
Shares, restricted stock award, gross (in shares) | 300,000 | ||||
Performance Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock awards, minimum service period required for vesting (as a percent) | 50.00% | ||||
Incentive Plan | Employee stock options | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 3 years | ||||
Incentive Plan | Employee stock options | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 5 years | ||||
Incentive Plan | PSUs and Performance Share Awards | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 3 years | ||||
Incentive Plan | Restricted Stock Units (RSUs) | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 3 years | ||||
Incentive Plan | Restricted Stock Units (RSUs) | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 5 years | ||||
Key Employee Awards | Restricted Stock Units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares, restricted stock award, gross (in shares) | 500,000 | ||||
Key Employee Awards | Performance Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock award grants, fair value | $ 400,000 | $ 2,800,000 | |||
Executive Awards | Performance Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock award grants, fair value | $ 3,800,000 |
EARNINGS PER COMMON SHARE (Deta
EARNINGS PER COMMON SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Jul. 29, 2018 | Sep. 28, 2019 | Jul. 29, 2018 | |
Numerator for Basic and Diluted Earnings Per Common Share | ||||
Net income (loss) applicable to common shares | $ 24,790 | $ 35,765 | $ (17,320) | $ 35,303 |
Denominator for Basic and Diluted Income Per Common Share | ||||
Weighted average basic number of common shares outstanding (in shares) | 125,557 | 66,335 | 125,526 | 66,361 |
Weighted average diluted number of common shares outstanding (in shares) | 125,558 | 66,438 | 125,526 | 66,477 |
Basic income (loss) per common share (in USD per share) | $ 0.20 | $ 0.54 | $ (0.14) | $ 0.53 |
Diluted income (loss) per common share (in USD per share) | $ 0.20 | $ 0.54 | $ (0.14) | $ 0.53 |
Incentive Plan securities excluded from dilution (in shares) | 5,189 | 0 | 4,974 | 0 |
Employee stock options | ||||
Denominator for Basic and Diluted Income Per Common Share | ||||
Incremental common shares attributable to dilutive effect of share-based payment arrangements (in shares) | 1 | 95 | 0 | 98 |
PSUs and Performance Share Awards | ||||
Denominator for Basic and Diluted Income Per Common Share | ||||
Incremental common shares attributable to dilutive effect of share-based payment arrangements (in shares) | 0 | 8 | 0 | 18 |
WARRANTY (Details)
WARRANTY (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 28, 2019 | Jul. 29, 2018 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Beginning balance | $ 134,515 | $ 32,418 |
Purchase accounting adjustments | 84,280 | 0 |
Warranties sold | 2,313 | 2,616 |
Revenue recognized | (2,075) | (1,971) |
Expense | 22,006 | 0 |
Settlements | (22,285) | (1,654) |
Ending balance | 218,754 | 31,409 |
Less: current portion | 31,294 | 5,970 |
Total, less current portion | $ 187,460 | $ 25,439 |
DEFINED BENEFIT PLANS - Narrati
DEFINED BENEFIT PLANS - Narrative (Details) | 9 Months Ended |
Sep. 28, 2019USD ($) | |
Defined Benefit Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Defined benefit plan, expected contribution amount | $ 2,300,000 |
Other Postretirement Benefit Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Defined benefit plan, minimum annual contribution, percent | 0.00% |
Defined contribution plan, maximum annual contributions per employee, percent | 25.00% |
The Steelworkers Pension Trust | CENTRIA Benefit Plan | Multiemployer Plans, Pension | |
Defined Benefit Plan Disclosure [Line Items] | |
Multiemployer plans, minimum contribution | $ 300,000 |
DEFINED BENEFIT PLANS - Periodi
DEFINED BENEFIT PLANS - Periodic Benefits Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Jul. 29, 2018 | Sep. 28, 2019 | Jul. 29, 2018 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 17 | $ 29 | $ 49 | $ 86 |
Interest cost | 1,040 | 556 | 3,119 | 1,666 |
Expected return on assets | (1,234) | (729) | (3,701) | (2,187) |
Amortization of prior service cost | 15 | 15 | 43 | 43 |
Amortization of net actuarial loss | 704 | 248 | 2,112 | 743 |
Net periodic benefit cost | 542 | 119 | 1,622 | 351 |
Defined Benefit Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 11 | 22 | 32 | 65 |
Interest cost | 974 | 494 | 2,922 | 1,481 |
Expected return on assets | (1,234) | (729) | (3,701) | (2,187) |
Amortization of prior service cost | 15 | 15 | 43 | 43 |
Amortization of net actuarial loss | 704 | 248 | 2,112 | 743 |
Net periodic benefit cost | 470 | 50 | 1,408 | 145 |
OPEB Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 6 | 7 | 17 | 21 |
Interest cost | 66 | 62 | 197 | 185 |
Expected return on assets | 0 | 0 | 0 | 0 |
Amortization of prior service cost | 0 | 0 | 0 | 0 |
Amortization of net actuarial loss | 0 | 0 | 0 | 0 |
Net periodic benefit cost | $ 72 | $ 69 | $ 214 | $ 206 |
LONG-TERM DEBT AND NOTE PAYAB_3
LONG-TERM DEBT AND NOTE PAYABLE - Schedule of Debt (Details) - USD ($) $ in Thousands | Sep. 28, 2019 | Nov. 16, 2018 | Oct. 28, 2018 | Apr. 12, 2018 |
Debt Instrument [Line Items] | ||||
Unamortized discounts and unamortized deferred financing costs | $ (58,151) | $ (5,699) | ||
Total long-term debt, net of unamortized discounts and unamortized deferred financing costs | 3,293,246 | 407,226 | ||
Less: current portion of long-term debt | 25,600 | 4,150 | ||
Total long-term debt, less current portion | 3,267,646 | 403,076 | ||
Asset-based revolving credit facility due April 2023 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | 170,000 | 0 | ||
Asset-based revolving credit facility due February 2023 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | 0 | 0 | ||
Term loan facility due April 2025 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | 2,536,397 | 0 | ||
Term loan facility due February 2025 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | 0 | 412,925 | ||
Cash flow revolver due April 2023 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | 0 | 0 | ||
8.00% senior notes due April 2026 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | 645,000 | 0 | ||
Total long-term debt, net of unamortized discounts and unamortized deferred financing costs | $ 645,000 | 0 | ||
Debt instrument, interest rate, stated percentage | 8.00% | 8.00% | 8.00% | |
Other Assets | ABL Facility | Asset-based lending credit facility, due 2023 | ||||
Debt Instrument [Line Items] | ||||
Unamortized deferred financing costs | $ 2,600 | $ 1,100 |
LONG-TERM DEBT AND NOTE PAYAB_4
LONG-TERM DEBT AND NOTE PAYABLE - Additional Information (Details) - USD ($) | Nov. 16, 2018 | Oct. 15, 2018 | Apr. 12, 2018 | Feb. 08, 2018 | Sep. 28, 2019 | Jul. 29, 2018 | Sep. 28, 2019 | Jul. 29, 2018 | Nov. 15, 2018 | Oct. 28, 2018 | Oct. 14, 2018 | Jan. 16, 2015 |
Line of Credit Facility [Line Items] | ||||||||||||
Payment on outstanding borrowings | $ 120,000,000 | $ 85,000,000 | ||||||||||
Loss on extinguishment of debt | $ 0 | $ 0 | 0 | 21,875,000 | ||||||||
Note payable | $ 0 | $ 0 | $ 497,000 | |||||||||
8.25% Senior Notes Due January 2023 | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, interest rate, stated percentage | 8.25% | 8.25% | ||||||||||
Debt instrument, face amount | $ 250,000,000 | $ 250,000,000 | ||||||||||
Repayment of debt | 265,500,000 | |||||||||||
Loss on extinguishment of debt | 21,900,000 | |||||||||||
Redemption premium paid | $ 15,500,000 | |||||||||||
Term loan facility due February 2025 | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Term loan principal amount | 415,000,000 | |||||||||||
Aggregate principal amount redeemed | $ 412,900,000 | |||||||||||
Repayment of debt principal, including interest | 413,700,000 | |||||||||||
Installment payment as a percentage of principal | 1.00% | |||||||||||
Debt instrument, repricing premium | 1.00% | |||||||||||
Mandatory prepayment, percentage of annual excess cash flow | 50.00% | |||||||||||
Term Loan Facility due April 2025 | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, face amount | 1,755,000,000 | |||||||||||
Increase in borrowing capacity | 805,000,000 | |||||||||||
Debt instrument, interest rate during period | 5.79% | |||||||||||
Debt instrument, effective rate | 6.51% | 6.51% | ||||||||||
Debt instrument, covenant compliance, excess cash flow, minimum | $ 10,000,000 | |||||||||||
Line of credit outstanding | 2,555,600,000 | |||||||||||
ABL Facility | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Remaining borrowing capacity on line of credit | $ 405,976,000 | $ 405,976,000 | ||||||||||
Revolving loans outstanding | 170,000,000 | 170,000,000 | ||||||||||
Line of credit outstanding | $ 30,311,000 | $ 30,311,000 | ||||||||||
Weighted average interest rate on debt | 3.66% | 3.66% | ||||||||||
Cash Flow Revolver | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Line of credit facility, maximum borrowing capacity | $ 115,000,000 | $ 115,000,000 | ||||||||||
Secured debt, percentage of capital stock held by foreign subsidiary | 65.00% | |||||||||||
Debt instrument, covenant compliance, secured leverage ratio, maximum | 7.75 | |||||||||||
8.00% Senior Notes | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, interest rate, stated percentage | 8.00% | 8.00% | 8.00% | 8.00% | ||||||||
Debt instrument, effective rate | 8.64% | 8.64% | ||||||||||
Debt instrument, redemption price, percentage of principal amount redeemed | 40.00% | |||||||||||
ABL Facility | Revolving Credit Facility | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Line of credit facility, maximum borrowing capacity | $ 611,000,000 | $ 396,000,000 | $ 360,000,000 | 150,000,000 | ||||||||
Increase in borrowing capacity | 215,000,000 | 36,000,000 | ||||||||||
Payment on outstanding borrowings | 325,000,000 | |||||||||||
Fixed charge coverage ratio | 1 | |||||||||||
Debt instrument, covenant compliance, percentage of specified availability | 10.00% | |||||||||||
Debt instrument, covenant terms, specific availability In excess of threshold of calendar days | 20 days | |||||||||||
ABL Facility | Revolving Credit Facility | ABL U.S. Facility | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Line of credit facility, maximum borrowing capacity | 483,700,000 | 313,500,000 | $ 285,000,000 | $ 313,500,000 | $ 285,000,000 | |||||||
ABL Facility | Revolving Credit Facility | ABL Canadian Facility | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Line of credit facility, maximum borrowing capacity | 127,300,000 | $ 82,500,000 | $ 75,000,000 | $ 82,500,000 | $ 75,000,000 | |||||||
London Interbank Offered Rate (LIBOR) | Term Loan Facility due April 2025 | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, basis spread on variable rate, floor | 0.00% | |||||||||||
Debt instrument, basis spread on variable rate | 3.75% | |||||||||||
London Interbank Offered Rate (LIBOR) | ABL Facility | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, basis spread on variable rate, floor | 0.00% | |||||||||||
London Interbank Offered Rate (LIBOR) | Cash Flow Revolver | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, basis spread on variable rate, floor | 0.00% | |||||||||||
Base Rate | Term Loan Facility due April 2025 | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, basis spread on variable rate | 2.75% | |||||||||||
Minimum | London Interbank Offered Rate (LIBOR) | ABL Facility | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, basis spread on variable rate | 1.25% | |||||||||||
Minimum | London Interbank Offered Rate (LIBOR) | Cash Flow Revolver | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, basis spread on variable rate | 2.50% | |||||||||||
Minimum | Base Rate | ABL Facility | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, basis spread on variable rate | 0.25% | |||||||||||
Minimum | Base Rate | Cash Flow Revolver | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, basis spread on variable rate | 1.50% | |||||||||||
Maximum | London Interbank Offered Rate (LIBOR) | ABL Facility | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, basis spread on variable rate | 1.75% | |||||||||||
Maximum | London Interbank Offered Rate (LIBOR) | Cash Flow Revolver | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, basis spread on variable rate | 3.00% | |||||||||||
Maximum | Base Rate | ABL Facility | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, basis spread on variable rate | 0.75% | |||||||||||
Maximum | Base Rate | Cash Flow Revolver | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, basis spread on variable rate | 2.00% | |||||||||||
Letter of Credit | ABL Facility | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Line of credit facility, maximum borrowing capacity | 30,000,000 | |||||||||||
Line of credit outstanding | $ 24,700,000 | |||||||||||
Swingline Borrowings | ABL Facility | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Line of credit facility, maximum borrowing capacity | $ 20,000,000 | |||||||||||
Commitment Fee Percentage One | Minimum | ABL Facility | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Unused commitment fee | 0.25% | |||||||||||
Commitment Fee Percentage One | Minimum | Cash Flow Revolver | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Unused commitment fee | 0.25% | |||||||||||
Commitment Fee Percentage One | Maximum | Cash Flow Revolver | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Unused commitment fee | 0.50% | |||||||||||
Debt Instrument, Redemption, Period One | 8.00% Senior Notes | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, redemption price, percentage | 100.00% | |||||||||||
Debt Instrument, Redemption, Period Two | 8.00% Senior Notes | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, redemption price, percentage | 108.00% | |||||||||||
Debt Instrument, Redemption, Period Three | 8.00% Senior Notes | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, redemption price, percentage | 104.00% | |||||||||||
Debt Instrument, Redemption, Period Four | 8.00% Senior Notes | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, redemption price, percentage | 100.00% | |||||||||||
Leverage Ratio Target Achieved | Minimum | Term loan facility due February 2025 | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Mandatory prepayment, percentage of annual excess cash flow | 25.00% | |||||||||||
Leverage Ratio Target Achieved | Maximum | Term loan facility due February 2025 | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Mandatory prepayment, percentage of annual excess cash flow | 0.00% | |||||||||||
Ply Gem | 8.00% Senior Notes | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, face amount | $ 645,000,000 | |||||||||||
Ply Gem | Term Loan Facility due April 2025 | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, face amount | $ 1,755,000,000 | |||||||||||
Debt instrument, discount rate | 0.50% | |||||||||||
Increase in borrowing capacity | $ 805,000,000 | |||||||||||
Ply Gem | 8.00% Senior Notes | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, discount rate | 2.25% |
CD&R INVESTOR GROUP (Details)
CD&R INVESTOR GROUP (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 11, 2017 | Sep. 28, 2019 | Jul. 29, 2018 | Oct. 28, 2018 |
Class of Stock [Line Items] | ||||
Payments for repurchase of common stock | $ 0 | $ 46,705 | ||
CD&R Funds | ||||
Class of Stock [Line Items] | ||||
Ownership percentage | 49.30% | 34.40% | ||
Secondary Offering | CD&R Funds | ||||
Class of Stock [Line Items] | ||||
Common stock offered (in shares) | 7,150,000 | |||
Common stock price per share (in USD per share) | $ 19.36 | |||
Common stock repurchased (in shares) | 1,150,000 | |||
Payments for repurchase of common stock | $ 22,300 |
STOCK REPURCHASE PROGRAM (Detai
STOCK REPURCHASE PROGRAM (Details) - USD ($) | 2 Months Ended | 3 Months Ended | 9 Months Ended | |||||
Dec. 31, 2018 | Sep. 28, 2019 | Jul. 29, 2018 | Sep. 28, 2019 | Jul. 29, 2018 | Mar. 07, 2018 | Oct. 10, 2017 | Sep. 08, 2016 | |
Class of Stock [Line Items] | ||||||||
Payments for repurchase of common stock | $ 0 | $ 46,705,000 | ||||||
Available for stock repurchases | $ 55,600,000 | $ 55,600,000 | ||||||
Shares withheld to satisfy minimum tax withholding obligations (in shares) | 35,000 | 300,000 | ||||||
Retirement of treasury stock previously withheld or repurchased (in shares) | 100,000 | 2,900,000 | ||||||
2016 Stock Repurchase Program | ||||||||
Class of Stock [Line Items] | ||||||||
Authorized stock repurchase amount | $ 50,000,000 | |||||||
2017 Stock Repurchase Program | ||||||||
Class of Stock [Line Items] | ||||||||
Authorized stock repurchase amount | $ 50,000,000 | |||||||
2018 Stock Repurchase Program | ||||||||
Class of Stock [Line Items] | ||||||||
Authorized stock repurchase amount | $ 50,000,000 | |||||||
Stock Repurchase Programs | ||||||||
Class of Stock [Line Items] | ||||||||
Authorized stock repurchase amount | $ 100,000,000 | $ 100,000,000 | ||||||
Treasury stock purchases (in shares) | 0 | 2,700,000 | ||||||
Payments for repurchase of common stock | $ 46,700,000 | |||||||
Additional Paid-in Capital | ||||||||
Class of Stock [Line Items] | ||||||||
Decrease in treasury stock and additional paid in capital due to retirement of shares previously withheld or repurchased | $ 700,000 | $ 51,800,000 | ||||||
Treasury Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Treasury stock purchases (in shares) | 347,040 | 12,612 | 21,940 | 34,724 | 2,938,974 | |||
Decrease in treasury stock and additional paid in capital due to retirement of shares previously withheld or repurchased | $ (700,000) | $ (51,800,000) | ||||||
CDR Fund VIII Investor Group | Secondary Offering | ||||||||
Class of Stock [Line Items] | ||||||||
Treasury stock purchases (in shares) | 1,150,000 | |||||||
Payments for repurchase of common stock | $ 22,300,000 |
FAIR VALUE OF FINANCIAL INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS - Schedule of Fair Values of Financial Instruments (Details) - USD ($) | Sep. 28, 2019 | Nov. 16, 2018 | Oct. 28, 2018 | Apr. 12, 2018 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Long term debt, carrying amount | $ 3,293,246,000 | $ 407,226,000 | ||
8.00% Senior Notes | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Long term debt, carrying amount | 645,000,000 | 0 | ||
Long-term debt, fair value | $ 632,100,000 | 0 | ||
Debt instrument, interest rate, stated percentage | 8.00% | 8.00% | 8.00% | |
ABL Facility | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Long term debt, carrying amount | $ 170,000,000 | |||
Cash Flow Revolver | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Long term debt, carrying amount | 0 | |||
Term Loan Facilities | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Long term debt, carrying amount | 2,536,397,000 | 412,925,000 | ||
Long-term debt, fair value | $ 2,478,263,000 | $ 412,409,000 |
FAIR VALUE OF FINANCIAL INSTR_4
FAIR VALUE OF FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS - Fair Value by Level (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 28, 2019USD ($) | Jul. 29, 2018USD ($) | Sep. 28, 2019USD ($) | Jul. 29, 2018USD ($) | Jul. 31, 2019USD ($) | May 31, 2019USD ($)instrument | Oct. 28, 2018USD ($) | |
Assets: | |||||||
Short-term investments in deferred compensation plan | $ 3,569 | $ 3,569 | $ 5,285 | ||||
Total assets | 3,664 | 3,664 | 5,285 | ||||
Liabilities: | |||||||
Fair value of liabilities | 42,417 | 42,417 | 4,639 | ||||
Short-term investments, unrealized holding gain (loss) | (100) | $ 200 | 400 | $ 300 | |||
Foreign Currency Hedge | |||||||
Assets: | |||||||
Foreign currency hedge | 0 | 0 | |||||
Liabilities: | |||||||
Forward contract agreement, amount of hedge | $ 21,900 | ||||||
Realized gain on foreign currency hedge | 100 | ||||||
Level 1 | |||||||
Assets: | |||||||
Short-term investments in deferred compensation plan | 3,171 | 3,171 | 4,344 | ||||
Total assets | 3,171 | 3,171 | 4,344 | ||||
Liabilities: | |||||||
Fair value of liabilities | 0 | 0 | 0 | ||||
Level 1 | Foreign Currency Hedge | |||||||
Assets: | |||||||
Foreign currency hedge | 0 | 0 | |||||
Level 2 | |||||||
Assets: | |||||||
Short-term investments in deferred compensation plan | 398 | 398 | 941 | ||||
Total assets | 493 | 493 | 941 | ||||
Liabilities: | |||||||
Fair value of liabilities | 42,417 | 42,417 | 4,639 | ||||
Level 2 | Foreign Currency Hedge | |||||||
Assets: | |||||||
Foreign currency hedge | 95 | 95 | |||||
Level 3 | |||||||
Assets: | |||||||
Short-term investments in deferred compensation plan | 0 | 0 | 0 | ||||
Total assets | 0 | 0 | 0 | ||||
Liabilities: | |||||||
Fair value of liabilities | 0 | 0 | 0 | ||||
Level 3 | Foreign Currency Hedge | |||||||
Assets: | |||||||
Foreign currency hedge | 0 | 0 | |||||
Deferred compensation plan liability | |||||||
Liabilities: | |||||||
Fair value of liabilities | 3,564 | 3,564 | 4,639 | ||||
Deferred compensation plan liability | Level 1 | |||||||
Liabilities: | |||||||
Fair value of liabilities | 0 | 0 | 0 | ||||
Deferred compensation plan liability | Level 2 | |||||||
Liabilities: | |||||||
Fair value of liabilities | 3,564 | 3,564 | 4,639 | ||||
Deferred compensation plan liability | Level 3 | |||||||
Liabilities: | |||||||
Fair value of liabilities | 0 | 0 | 0 | ||||
Interest Rate Swap | |||||||
Liabilities: | |||||||
Fair value of liabilities | 38,853 | 38,853 | |||||
Interest Rate Swap | Level 1 | |||||||
Liabilities: | |||||||
Fair value of liabilities | 0 | 0 | |||||
Interest Rate Swap | Level 2 | |||||||
Liabilities: | |||||||
Fair value of liabilities | 38,853 | 38,853 | |||||
Interest Rate Swap | Level 3 | |||||||
Liabilities: | |||||||
Fair value of liabilities | 0 | 0 | |||||
Money market | |||||||
Assets: | |||||||
Short-term investments in deferred compensation plan | 27 | 27 | 369 | ||||
Money market | Level 1 | |||||||
Assets: | |||||||
Short-term investments in deferred compensation plan | 27 | 27 | 369 | ||||
Money market | Level 2 | |||||||
Assets: | |||||||
Short-term investments in deferred compensation plan | 0 | 0 | 0 | ||||
Money market | Level 3 | |||||||
Assets: | |||||||
Short-term investments in deferred compensation plan | 0 | 0 | 0 | ||||
Mutual funds – Growth | |||||||
Assets: | |||||||
Short-term investments in deferred compensation plan | 991 | 991 | 1,118 | ||||
Mutual funds – Growth | Level 1 | |||||||
Assets: | |||||||
Short-term investments in deferred compensation plan | 991 | 991 | 1,118 | ||||
Mutual funds – Growth | Level 2 | |||||||
Assets: | |||||||
Short-term investments in deferred compensation plan | 0 | 0 | 0 | ||||
Mutual funds – Growth | Level 3 | |||||||
Assets: | |||||||
Short-term investments in deferred compensation plan | 0 | 0 | 0 | ||||
Mutual funds – Blend | |||||||
Assets: | |||||||
Short-term investments in deferred compensation plan | 1,625 | 1,625 | 2,045 | ||||
Mutual funds – Blend | Level 1 | |||||||
Assets: | |||||||
Short-term investments in deferred compensation plan | 1,625 | 1,625 | 2,045 | ||||
Mutual funds – Blend | Level 2 | |||||||
Assets: | |||||||
Short-term investments in deferred compensation plan | 0 | 0 | 0 | ||||
Mutual funds – Blend | Level 3 | |||||||
Assets: | |||||||
Short-term investments in deferred compensation plan | 0 | 0 | 0 | ||||
Mutual funds – Foreign blend | |||||||
Assets: | |||||||
Short-term investments in deferred compensation plan | 528 | 528 | 812 | ||||
Mutual funds – Foreign blend | Level 1 | |||||||
Assets: | |||||||
Short-term investments in deferred compensation plan | 528 | 528 | 812 | ||||
Mutual funds – Foreign blend | Level 2 | |||||||
Assets: | |||||||
Short-term investments in deferred compensation plan | 0 | 0 | 0 | ||||
Mutual funds – Foreign blend | Level 3 | |||||||
Assets: | |||||||
Short-term investments in deferred compensation plan | 0 | 0 | 0 | ||||
Mutual funds – Fixed income | |||||||
Assets: | |||||||
Short-term investments in deferred compensation plan | 398 | 398 | 941 | ||||
Mutual funds – Fixed income | Level 1 | |||||||
Assets: | |||||||
Short-term investments in deferred compensation plan | 0 | 0 | 0 | ||||
Mutual funds – Fixed income | Level 2 | |||||||
Assets: | |||||||
Short-term investments in deferred compensation plan | 398 | 398 | 941 | ||||
Mutual funds – Fixed income | Level 3 | |||||||
Assets: | |||||||
Short-term investments in deferred compensation plan | $ 0 | $ 0 | $ 0 | ||||
Designated as Hedging Instrument | Interest Rate Swap | |||||||
Liabilities: | |||||||
Notional amount of derivative liabilities | $ 1,500,000 | ||||||
Cash Flow Hedging | Designated as Hedging Instrument | Interest Rate Swap | |||||||
Liabilities: | |||||||
Number of interest rate swaps | instrument | 3 | ||||||
Cash Flow Hedging | Designated as Hedging Instrument | Interest Rate Swap One | |||||||
Liabilities: | |||||||
Derivative, fixed interest rate | 5.918% | ||||||
Notional amount of derivative liabilities | $ 500,000 | ||||||
Cash Flow Hedging | Designated as Hedging Instrument | Interest Rate Swap Two | |||||||
Liabilities: | |||||||
Derivative, fixed interest rate | 5.906% | ||||||
Notional amount of derivative liabilities | $ 500,000 | ||||||
Cash Flow Hedging | Designated as Hedging Instrument | Interest Rate Swap Three | |||||||
Liabilities: | |||||||
Derivative, fixed interest rate | 5.907% | ||||||
Notional amount of derivative liabilities | $ 500,000 |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 28, 2019 | Oct. 28, 2018 | |
Valuation Allowance [Line Items] | ||
Effective tax rate (as a percent) | 40.90% | |
Effective tax rate, after unrecognized tax benefits and state income taxes (as a percent) | 20.40% | |
Increase in tax reserves | $ 6,900 | |
Liability for unrecognized tax benefits | 11,900 | |
Payable pursuant to a tax receivable agreement | 24,760 | $ 0 |
Canadian Jurisdiction | ||
Valuation Allowance [Line Items] | ||
Valuation allowance | $ 21,400 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) $ in Thousands | 2 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Dec. 31, 2018reporting_segment | Dec. 31, 2018operating_segment | Sep. 28, 2019USD ($) | Jul. 29, 2018USD ($) | Sep. 28, 2019USD ($) | Jul. 29, 2018USD ($) | Oct. 28, 2018USD ($) | |
Segment Reporting Information [Line Items] | |||||||
Number of reportable segments | 3 | 3 | |||||
Total net sales | $ 1,285,043 | $ 548,525 | $ 3,645,332 | $ 1,426,943 | |||
Total operating income | 95,560 | 54,501 | 149,126 | 86,355 | |||
Unallocated other expense, net | (56,293) | (4,437) | (170,894) | (37,690) | |||
Income (loss) before income taxes | 39,267 | 50,064 | (21,768) | 48,665 | |||
Total assets | 5,708,456 | 5,708,456 | $ 1,110,375 | ||||
Commercial | |||||||
Segment Reporting Information [Line Items] | |||||||
Total net sales | 464,906 | 548,525 | 1,370,152 | 1,426,943 | |||
Siding | |||||||
Segment Reporting Information [Line Items] | |||||||
Total net sales | 315,799 | 0 | 840,601 | 0 | |||
Windows | |||||||
Segment Reporting Information [Line Items] | |||||||
Total net sales | 504,338 | 0 | 1,434,579 | 0 | |||
Operating Segments | Commercial | |||||||
Segment Reporting Information [Line Items] | |||||||
Total net sales | 464,906 | 548,525 | 1,370,152 | 1,426,943 | |||
Total operating income | 59,317 | 79,964 | 142,436 | 157,785 | |||
Total assets | 1,013,517 | 1,013,517 | 1,024,433 | ||||
Operating Segments | Siding | |||||||
Segment Reporting Information [Line Items] | |||||||
Total net sales | 315,799 | 0 | 840,601 | 0 | |||
Total operating income | 37,063 | 0 | 51,346 | 0 | |||
Total assets | 2,395,916 | 2,395,916 | 0 | ||||
Operating Segments | Windows | |||||||
Segment Reporting Information [Line Items] | |||||||
Total net sales | 504,338 | 0 | 1,434,579 | 0 | |||
Total operating income | 34,446 | 0 | 62,039 | 0 | |||
Total assets | 2,100,574 | 2,100,574 | 0 | ||||
Corporate | |||||||
Segment Reporting Information [Line Items] | |||||||
Total operating income | (35,266) | $ (25,463) | (106,695) | $ (71,430) | |||
Total assets | $ 198,449 | $ 198,449 | $ 85,942 |
CONTINGENCIES (Details)
CONTINGENCIES (Details) - USD ($) $ in Millions | 1 Months Ended | |
Nov. 30, 2018 | Sep. 28, 2019 | |
RCRA Facility Investigation | ||
Loss Contingencies [Line Items] | ||
Environmental liability accrual | $ 4.5 | |
PCE/TCE Northeast Contamination Site | ||
Loss Contingencies [Line Items] | ||
Environmental liability accrual | 5 | |
Aurora Plastics LLC vs. Atrium | Minimum | ||
Loss Contingencies [Line Items] | ||
Loss contingency, damages sought | $ 48 | |
Current Liabilities | RCRA Facility Investigation | ||
Loss Contingencies [Line Items] | ||
Environmental liability accrual | 0.3 | |
Other Noncurrent Liabilities | RCRA Facility Investigation | ||
Loss Contingencies [Line Items] | ||
Environmental liability accrual | $ 4.2 |