Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2017shares | |
Document and Entity Information | |
Entity Registrant Name | SIMPSON MANUFACTURING CO INC /CA/ |
Entity Central Index Key | 920,371 |
Document Type | 10-Q |
Document Period End Date | Sep. 30, 2017 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 47,313,707 |
Document Fiscal Year Focus | 2,017 |
Document Fiscal Period Focus | Q3 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 |
Current assets | |||
Cash and cash equivalents | $ 204,171 | $ 226,537 | $ 218,720 |
Trade accounts receivable, net | 159,571 | 112,423 | 141,716 |
Inventories | 244,476 | 232,274 | 220,207 |
Other current assets | 13,276 | 14,013 | 12,321 |
Total current assets | 621,494 | 585,247 | 592,964 |
Property, plant and equipment, net | 265,178 | 232,810 | 229,670 |
Goodwill | 137,313 | 124,479 | 126,845 |
Equity investment (see Note 6) | 2,582 | 2,500 | 0 |
Intangible assets, net | 30,050 | 22,864 | 24,629 |
Other noncurrent assets | 11,766 | 12,074 | 10,195 |
Total assets | 1,068,383 | 979,974 | 984,303 |
Current liabilities | |||
Capital lease obligations - current portion | 1,047 | 0 | 0 |
Trade accounts payable | 30,857 | 27,674 | 24,777 |
Accrued liabilities | 87,946 | 60,477 | 62,714 |
Income taxes payable | 360 | 0 | 3,420 |
Accrued profit sharing trust contributions | 5,652 | 6,549 | 5,157 |
Accrued cash profit sharing and commissions | 13,123 | 10,527 | 17,153 |
Accrued workers’ compensation | 3,548 | 3,569 | 4,161 |
Total current liabilities | 142,533 | 108,796 | 117,382 |
Capital lease obligations - net of current portion | 2,875 | 0 | 0 |
Deferred income tax and other long-term liabilities | 6,933 | 5,336 | 5,817 |
Total liabilities | 152,341 | 114,132 | 123,199 |
Commitments and contingencies (see Note 8) | |||
Stockholders’ equity | |||
Common stock, at par value | 476 | 473 | 486 |
Additional paid-in capital | 265,490 | 255,917 | 243,900 |
Retained Earnings | 683,554 | 642,422 | 687,052 |
Treasury stock | (20,000) | 0 | (47,002) |
Accumulated other comprehensive loss | (13,478) | (32,970) | (23,332) |
Total stockholders’ equity | 916,042 | 865,842 | 861,104 |
Total liabilities and stockholders’ equity | $ 1,068,383 | $ 979,974 | $ 984,303 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement [Abstract] | ||||
Net sales | $ 262,476 | $ 230,974 | $ 745,345 | $ 660,470 |
Cost of sales | 142,591 | 117,499 | 401,779 | 342,985 |
Gross profit | 119,885 | 113,475 | 343,566 | 317,485 |
Operating expenses: | ||||
Research and development and other engineering | 8,679 | 10,932 | 35,051 | 33,807 |
Selling | 28,156 | 24,304 | 86,150 | 74,313 |
General and administrative | 36,501 | 32,543 | 108,049 | 96,786 |
Net gain on disposal of assets | (147) | (81) | (147) | (763) |
Total operating expenses | 73,189 | 67,698 | 229,103 | 204,143 |
Income from operations | 46,696 | 45,777 | 114,463 | 113,342 |
Loss in equity method investment, before tax | (13) | 0 | (53) | 0 |
Interest expense, net | (296) | (82) | (685) | (400) |
Gain (adjustment) on bargain purchase of a business | (2,052) | 0 | 6,336 | 0 |
Gain on disposal of a business | 443 | 0 | 443 | 0 |
Income before taxes | 44,778 | 45,695 | 120,504 | 112,942 |
Provision for income taxes | 16,581 | 15,898 | 40,972 | 40,601 |
Net income | $ 28,197 | $ 29,797 | $ 79,532 | $ 72,341 |
Earnings per common share: | ||||
Basic (in dollars per share) | $ 0.60 | $ 0.62 | $ 1.67 | $ 1.50 |
Diluted (in dollars per share) | $ 0.59 | $ 0.62 | $ 1.66 | $ 1.49 |
Number of shares outstanding | ||||
Basic (in shares) | 47,367 | 48,119 | 47,544 | 48,231 |
Diluted (in shares) | 47,686 | 48,352 | 47,843 | 48,429 |
Cash dividends declared per common share (in dollars per share) | $ 0.42 | $ 0.18 | $ 0.81 | $ 0.52 |
Condensed Consolidated Stateme4
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 28,197 | $ 29,797 | $ 79,532 | $ 72,341 |
Other comprehensive income (loss): | ||||
Translation adjustment, net of tax expense (benefit) | 5,543 | 232 | 19,492 | 5,244 |
Comprehensive income | $ 33,740 | $ 30,029 | $ 99,024 | $ 77,585 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock |
Balance at Dec. 31, 2015 | $ 849,824 | $ 481 | $ 238,212 | $ 639,707 | $ (28,576) | |
Balance (in shares) at Dec. 31, 2015 | 48,184 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 72,341 | 72,341 | ||||
Translation adjustment, net of tax | 5,244 | 5,244 | ||||
Options exercised | 6,695 | $ 3 | 6,692 | |||
Options exercised (in shares) | 227 | |||||
Stock-based compensation | 9,039 | 9,039 | ||||
Tax benefit of options exercised | 140 | 140 | ||||
Shares issued from release of Restricted Stock Units | (3,996) | $ 2 | (3,998) | |||
Shares issued from release of Restricted Stock Units (in shares) | 216 | |||||
Repurchase of common stock | (53,502) | (6,500) | $ (47,002) | |||
Repurchase of common stock (in shares) | (1,090) | |||||
Cash dividends declared on common stock | (24,996) | (24,996) | ||||
Common stock issued | 315 | 315 | ||||
Common stock issued (in shares) | 10 | |||||
Balance at Sep. 30, 2016 | 861,104 | $ 486 | 243,900 | 687,052 | (23,332) | (47,002) |
Balance (in shares) at Sep. 30, 2016 | 47,547 | |||||
Balance at Dec. 31, 2015 | 849,824 | $ 481 | 238,212 | 639,707 | (28,576) | |
Balance (in shares) at Dec. 31, 2015 | 48,184 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 17,393 | 17,393 | ||||
Translation adjustment, net of tax | (9,164) | (9,164) | ||||
Pension adjustment, net of tax | (474) | (474) | ||||
Options exercised | 1,281 | $ 0 | 1,281 | |||
Options exercised (in shares) | 43 | |||||
Stock-based compensation | 4,147 | 4,147 | ||||
Tax benefit of options exercised | 111 | 111 | ||||
Shares issued from release of Restricted Stock Units | (22) | $ 0 | (22) | |||
Shares issued from release of Restricted Stock Units (in shares) | 1 | |||||
Repurchase of common stock | 0 | 6,500 | (6,500) | |||
Repurchase of common stock (in shares) | (154) | |||||
Retirement of common stock | 0 | $ (13) | (53,489) | 53,502 | ||
Cash dividends declared on common stock | (8,534) | (8,534) | ||||
Balance at Dec. 31, 2016 | 865,842 | $ 473 | 255,917 | 642,422 | (32,970) | |
Balance (in shares) at Dec. 31, 2016 | 47,437 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 79,532 | 79,532 | ||||
Translation adjustment, net of tax | 19,492 | 19,492 | ||||
Options exercised | 3,566 | $ 1 | 3,565 | |||
Options exercised (in shares) | 120 | |||||
Stock-based compensation | 10,764 | 10,764 | ||||
Tax benefit of options exercised | 0 | |||||
Shares issued from release of Restricted Stock Units | (5,166) | $ 2 | (5,168) | |||
Shares issued from release of Restricted Stock Units (in shares) | 210 | |||||
Repurchase of common stock | (20,000) | 0 | (20,000) | |||
Repurchase of common stock (in shares) | (461) | |||||
Cash dividends declared on common stock | (38,400) | (38,400) | ||||
Common stock issued | 412 | 412 | ||||
Common stock issued (in shares) | 9 | |||||
Balance at Sep. 30, 2017 | $ 916,042 | $ 476 | $ 265,490 | $ 683,554 | $ (13,478) | $ (20,000) |
Balance (in shares) at Sep. 30, 2017 | 47,315 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Statement of Stockholders' Equity [Abstract] | ||
Cash dividends declared per common share (in dollars per share) | $ 0.81 | $ 0.52 |
Common stock issued per share for stock bonus (in USD per share) | $ 44.26 | $ 32.45 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Statement of Cash Flows [Abstract] | ||
Net income | $ 79,532 | $ 72,341 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Gain on sale of assets | (147) | (763) |
Depreciation and amortization | 26,881 | 21,485 |
Write-off of software development project | 0 | 153 |
Loss in equity method investment, before tax | 53 | 0 |
Gain (adjustment) on bargain purchase of a business | (6,336) | 0 |
Gain on disposal of a business | (443) | 0 |
Deferred income taxes | 2,552 | 1,481 |
Noncash compensation related to stock plans | 11,816 | 9,707 |
Excess tax benefit of options exercised and restricted stock units vested | 0 | (162) |
Recovery (provision) of doubtful accounts | 79 | (131) |
Changes in operating assets and liabilities, net of acquisitions: | ||
Trade accounts receivable | (40,607) | (35,463) |
Inventories | 1,813 | (22,992) |
Trade accounts payable | 698 | 2,806 |
Income taxes payable | 1,686 | 6,745 |
Accrued profit sharing trust contributions | (902) | (637) |
Accrued cash profit sharing and commissions | 2,468 | 8,636 |
Other current assets | 132 | (2,751) |
Accrued liabilities | 5,291 | 6,611 |
Long-term liabilities | (234) | (1,222) |
Accrued workers’ compensation | (21) | (432) |
Other noncurrent assets | 280 | 1,471 |
Net cash provided by operating activities | 84,591 | 66,883 |
Cash flows from investing activities | ||
Capital expenditures | (45,106) | (29,934) |
Asset acquisitions, net of cash acquired | (27,921) | (5,361) |
Proceeds from sale of property and equipment | 617 | 1,278 |
Proceeds from sale of a business | 9,613 | 0 |
Net cash used in investing activities | (62,797) | (34,017) |
Cash flows from financing activities | ||
Deferred and contingent consideration paid for asset acquisitions | (205) | (27) |
Repurchase of common stock | (20,000) | (53,502) |
Repayment of long-term borrowings and capital leases | (360) | 0 |
Repayment of debt and line of credit borrowings | (133) | 0 |
Debt issuance costs | 0 | (1,125) |
Issuance of common stock | 3,566 | 6,695 |
Excess tax benefit of options exercised and restricted stock units vested | 0 | 162 |
Dividends paid | (27,044) | (24,152) |
Cash paid on behalf of employees for shares withheld | (5,166) | (3,996) |
Net cash used in financing activities | (49,342) | (75,945) |
Effect of exchange rate changes on cash and cash equivalents | 5,182 | 2,974 |
Net decrease in cash and cash equivalents | (22,366) | (40,105) |
Cash and cash equivalents at beginning of period | 226,537 | 258,825 |
Cash and cash equivalents at end of period | 204,171 | 218,720 |
Noncash activity during the period | ||
Noncash capital expenditures | 892 | 726 |
Capital lease obligations | 4,362 | 0 |
Dividends declared but not paid | 19,891 | 8,559 |
Contingent consideration for acquisition | 1,314 | 0 |
Issuance of Company’s common stock for compensation | $ 412 | $ 315 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Principles of Consolidation The condensed consolidated financial statements include the accounts of Simpson Manufacturing Co., Inc. and its subsidiaries (collectively, the “Company”). There were no investments in affiliates that would render such affiliates to be considered variable interest entities. All significant intercompany transactions have been eliminated. Interim Period Reporting The accompanying unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations for reporting on Form 10-Q. Accordingly, certain information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted. These interim statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016 . The unaudited quarterly condensed consolidated financial statements have been prepared on the same basis as the audited annual consolidated financial statements and, in the opinion of management, contain all adjustments (consisting of only normal recurring adjustments) necessary to state fairly the financial information set forth therein, in accordance with GAAP. The year-end condensed consolidated balance sheet data provided herein were derived from audited financial statements, but do not include all disclosures required by GAAP. The Company’s quarterly results fluctuate. As a result, the Company believes the results of operations for this interim period presented are not indicative of the results to be expected for any future periods. Revenue Recognition The Company recognizes revenue when the earnings process is complete, net of applicable provision for discounts, returns and incentives, whether actual or estimated, based on the Company’s experience. This generally occurs when products are shipped to the customer in accordance with the sales agreement or purchase order, ownership and risk of loss pass to the customer, collectability is reasonably assured and pricing is fixed or determinable. The Company’s general shipping terms are F.O.B. shipping point, and title is transferred and revenue is recognized when the products are shipped to customers. When the Company sells F.O.B. destination point, title is transferred and the Company recognizes revenue on delivery or customer acceptance, depending on terms of the sales agreement. Service sales, representing after-market repair and maintenance, engineering activities and software license sales and services, although less than 1.0% of net sales and not material to the condensed consolidated financial statements, are recognized as the services are completed or the software products and services are delivered. If actual costs of sales returns, incentives and discounts were to significantly exceed the recorded estimated allowance, the Company’s sales would be adversely affected. Net Earnings Per Common Share Basic earnings per common share are computed based on the weighted-average number of common shares outstanding. Potentially dilutive securities, using the treasury stock method, are included in the diluted per-share calculations for all periods when the effect of their inclusion is dilutive. The following is a reconciliation of basic earnings per common share to diluted earnings per share for the three months and nine months ended September 30, 2017 and 2016 , respectively: Three Months Ended Nine Months Ended (in thousands, except per share amounts) 2017 2016 2017 2016 Net income available to common stockholders $ 28,197 $ 29,797 $ 79,532 $ 72,341 Basic weighted-average shares outstanding 47,367 48,119 47,544 48,231 Dilutive effect of potential common stock equivalents — stock options and restricted stock units 319 233 299 198 Diluted weighted-average shares outstanding 47,686 48,352 47,843 48,429 Earnings per common share: Basic $ 0.60 $ 0.62 $ 1.67 $ 1.50 Diluted $ 0.59 $ 0.62 $ 1.66 $ 1.49 Potentially dilutive securities excluded from earnings per diluted share because their effect is anti-dilutive — — — — Dividend Declaration and Notice of Annual Meeting On September 28, 2017 , the Board of Directors of the Company (the "Board") declared a cash dividend of $0.21 per share, payable on January 25, 2018 to shareholders of record as of January 4, 2018 and scheduled the Company’s 2018 annual meeting of stockholders for Monday, April 24, 2018. Share Repurchases During the third quarter of 2017, the Company received 35,887 shares of the Company's common stock pursuant to the Company’s $20.0 million accelerated share repurchase program (the “ASR Program”) with Wells Fargo Bank, National Association, which constituted the final delivery under the ASR Program initiated in June 2017. In August 2017, the Board increased its previous $125 million share repurchase authorization by $150 million to $275 million and extended such authorization to December 31, 2018. Accounting for Stock-Based Compensation The Company currently maintains an equity incentive plan, the Simpson Manufacturing Co., Inc. Amended and Restated 2011 Incentive Plan (the “2011 Plan”), which was originally adopted on April 26, 2011, and was subsequently amended and restated on April 21, 2015. The 2011 Plan amended and restated in their entirety, and incorporated and superseded, both the Simpson Manufacturing Co., Inc. 1994 Stock Option Plan (the “1994 Plan”), which was principally for the Company’s employees, and the Simpson Manufacturing Co., Inc. 1995 Independent Director Stock Option Plan (the “1995 Plan”), which was for its independent directors. Awards previously granted under the 1994 Plan or the 1995 Plan were not affected by the adoption of the 2011 Plan and continued to be governed by the 1994 Plan or the 1995 Plan, respectively. Under the 1994 Plan and the 1995 Plan, the Company could grant incentive stock options and non-qualified stock options, although the Company granted only non-qualified stock options thereunder. The Company generally granted stock options under each of the 1994 Plan and the 1995 Plan once every year. Stock options vest and expire according to terms established at the grant date. Stock options granted under the 1994 Plan typically vested evenly over the requisite service period of four years and have a term of seven years . Stock options granted under the 1995 Plan typically fully vest on the date of grant. Shares of common stock issued on exercise of stock options under the 1994 Plan and the 1995 Plan are registered under the Securities Act of 1933, as amended (the "Securities Act"). Under the 2011 Plan, the Company may grant incentive stock options, non-qualified stock options, restricted stock and restricted stock units ("RSUs"), although the Company currently intends to award primarily performance-based and/or time-based RSUs and to a lesser extent, if at all, non-qualified stock options (see "Note 9 Stock-Based Incentive Plans") to its employees. The Company currently intends to grant RSUs that vest on the date of grant to its independent directors. The Company does not currently intend to award incentive stock options or restricted stock. Under the 2011 Plan, no more than 16.3 million shares of the Company’s common stock in aggregate may be issued under the 2011 Plan, including shares already issued pursuant to prior awards and shares reserved for issuance on exercise of options previously granted under the 1994 Plan and the 1995 Plan. Shares of common stock to be issued pursuant to the 2011 Plan are registered under the Securities Act. Subject to certain adjustments, the following limits shall apply with respect to any awards under the 2011 Plan that are intended to qualify for the performance-based exception from the tax deductibility limitations of section 162(m) of the U.S. Internal Revenue Code of 1986, as amended from time to time: (i) the maximum aggregate number of shares of the Company’s common stock that may be subject to stock options granted in any calendar year to any one participant shall be 150,000 shares; and (ii) the maximum aggregate number of shares of the Company’s common stock issuable or deliverable under RSUs granted in any calendar year to any one participant shall be 100,000 shares. The following table represents the Company’s stock-based compensation activity for the three months and nine months ended September 30, 2017 and 2016 , respectively: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2017 2016 2017 2016 Stock-based compensation expense recognized in operating expenses $ 370 $ 3,141 $ 10,942 $ 8,995 Less: Tax benefit of stock-based compensation expense in provision for income taxes 58 1,112 3,962 3,262 Stock-based compensation expense, net of tax $ 312 $ 2,029 $ 6,980 $ 5,733 Fair value of shares vested $ 428 $ 3,088 $ 10,764 $ 9,039 Proceeds to the Company from the exercise of stock-based compensation $ 2,268 $ 4,166 $ 3,566 $ 6,695 Tax effect from the exercise of stock-based compensation, including shortfall tax benefits (1) $ — $ 121 $ — $ 140 (1) Zero balances in the three and nine months ended September 30, 2017 is the result of the Company's adoption of FASB issued Accounting Standards Update No. 2016-09, Compensation - Stock Compensation (Topic 718) Improvements to Employee Share- Based Payment Accounting ("ASU 2016-09") on January 1, 2017, refer to Recently Adopted Accounting Standards below. With respect to certain performance-based RSUs awarded to the Company's employees in February 2017, the achievement of their performance-based metrics was initially estimated as being probable , and therefore, their expense was recognized in the first two quarters of fiscal 2017. Based on updated information, the Company subsequently determined that the likelihood of achievement of the performance-based metrics is no longer probable for certain awards. As a result, the Company ceased recognition of expense in the three-month period ended September 30, 2017 and also reversed $1.6 million of expense during the three-month period ended September 30, 2017 recognized for such RSUs during the six months ended June 30, 2017. The Company allocates stock-based compensation expenses among cost of sales, research and development and other engineering expense, selling expense, or general and administrative expense based on the job functions performed by the employees to whom the stock-based compensation is awarded. The assumptions used to calculate the fair value of stock-based compensation are evaluated and revised, as necessary, to reflect market conditions and the Company’s experience. Stock-based compensation capitalized in inventory was $0.3 million and $0.5 million as of September 30, 2017 and 2016 , respectively. Fair Value of Financial Instruments The “Fair Value Measurements and Disclosures” topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) establishes a valuation hierarchy for disclosure of the inputs used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument; and Level 3 inputs are unobservable inputs based on the Company’s assumptions used to measure assets and liabilities at fair value. A financial asset’s or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. As of September 30, 2017 and 2016 and December 31, 2016 , the Company’s investments consisted of only money market funds, which are the Company’s primary financial instruments, maintained in cash equivalents and carried at cost, approximating fair value, based on Level 1 inputs. The balances of the Company's primary financial instruments at the dates indicated were as follows: At September 30, At December 31, (in thousands) 2017 2016 2016 Money market funds $ 5,409 $ 13,334 $ 2,832 The carrying amounts of trade accounts receivable, accounts payable and accrued liabilities approximate fair value due to the short-term nature of these instruments. The fair value of the Company’s contingent consideration related to acquisitions is classified as Level 3 within the fair value hierarchy as it is based on unobserved inputs, management estimates and entity-specific assumptions and is evaluated on an ongoing basis. As of September 30, 2017, the estimated fair value of the Company's contingent consideration was approximately a total of $1.3 million . Income Taxes The Company uses an estimated annual effective tax rate to measure the tax benefit or tax expense recognized in each interim period. The following table presents the Company’s effective tax rates and income tax expense for the three months and nine months ended September 30, 2017 and 2016 , respectively: Three Months Ended September 30, Nine Months Ended September 30, (in thousands, except percentages) 2017 2016 2017 2016 Effective tax rate 37.0 % 34.8 % 34.0 % 35.9 % Provision for income taxes $ 16,581 $ 15,898 $ 40,972 $ 40,601 For the three months ended September 30, 2017 , the Company's effective income tax rate increased to 37% from 35% , primarily due to a reduction of the nonrecurring bargain purchase gain related to the Gbo Fastening Systems acquisition (see "Gain (adjustment) on bargain purchase of a business" below ), which was not taxable. For the nine months ended September 30, 2017 , the Company's effective income tax rate decreased to 34.0% from 35.9% . The decrease was primarily due to an adjusted nonrecurring bargain purchase gain related to the Gbo Fastening Systems acquisition (see "Gain (adjustment) on bargain purchase of a business" below), which was not taxable, and the adoption of FASB Accounting Standards Update No. 2016-09 on January 1, 2017 (see "Recently Adopted Accounting Standards" below), which recognizes the excess tax benefits of stock-based awards as a reduction to income tax expense instead of the previous methodology which recorded the benefits on the balance sheets as a component of stockholders' equity. Acquisitions Under the business combinations topic of the FASB ASC 805, the Company accounts for acquisitions as business combinations and ascribes acquisition-date fair values to the acquired assets and assumed liabilities. Provisional fair value measurements are made at the time of the acquisitions. Adjustments to those measurements may be made in subsequent periods, up to one year from the acquisition date, as information necessary to complete the analysis is obtained. Fair value of intangible assets are generally based on Level 3 inputs. Multi Services Dêcoupe S.A . In August 2016, the Company purchased all of the outstanding shares of Multi Services Dêcoupe S.A. ("MS Decoupe"), a Belgium public limited company, for $6.9 million . MS Decoupe primarily manufactures and distributes wood construction, plastic, and metal labeling products in Belgium and the Netherlands, including distributing the Company's products manufactured at the Company's production facility in France. With this acquisition, the Company could potentially offer the Belgium market a wider-range of its products, shorten delivery lead times, and expand the Company's sales presence into the Netherlands market. During the third quarter of 2017, the Company finalized its fair value measurement of assets acquired and liabilities assumed in this acquisition. MD Decoupe assets and liabilities included cash and cash equivalents of $1.4 million , other current assets of $1.6 million , noncurrent assets of $5.0 million , current liabilities of $0.6 million and noncurrent deferred income tax liabilities of $1.0 million . Included in noncurrent assets was goodwill of $1.4 million , which was assigned to the Europe segment, and intangible assets of $1.7 million , both of which are not subject to tax-deductible amortization. The estimated weighted-average amortization period for the intangible assets is 10 years. CG Visions, Inc. In January 2017, the Company acquired CG Visions, Inc. ("CG Visions") for up to approximately $20.8 million . CG Visions provides scalable technologies and services in building information modeling ("BIM") technologies, estimation tools and software solutions to a number of the top 100 mid-sized to large builders in the United States, which are expected to complement and support the Company's sales in North America. During the third quarter of 2017, the Company finalized its fair value measurement of assets acquired and liabilities assumed in this acquisition. CG Visions assets and liabilities included other current assets of $0.5 million , noncurrent assets of $20.4 million , current liabilities and contingent consideration of $1.1 million . Included in noncurrent assets was goodwill of $10.1 million , which was assigned to the North America segment, and intangible assets of $10.3 million , both of which are not subject to tax-deductible amortization. The estimated weighted-average amortization period for the intangible assets is 7 years. Gbo Fastening Systems AB In January 2017, the Company acquired Gbo Fastening Systems AB ("Gbo Fastening Systems"), a Sweden limited company, for approximately $10.2 million . Gbo Fastening Systems manufactures and sells a complete line of CE-marked structural fasteners as well as fastener dimensioning software for wood construction applications, currently sold mostly in northern and eastern Europe, which are expected to complement the Company's line of wood construction products in Europe. Gain (Adjustment) on Bargain Purchase of a Business In the first quarter of 2017, the Company recorded a preliminary nontaxable bargain purchase gain of $8.4 million , which was included in the condensed consolidated statements of operations. During the third quarter of 2017, the Company reevaluated the fair value of the assets acquired and liabilities assumed in Gbo Fastening Systems acquisition and recorded that the estimated fair value of the assets acquired and liabilities assumed was approximately $16.5 million . Consequently, a bargain purchase adjustment of $2.1 million was recorded resulting in a total of $6.3 million adjusted gain on bargain purchase of a business, which was included in the condensed consolidated statements of operation. The following table represents the final allocation of the purchase price to the estimated fair value of the assets acquired and liabilities assumed in the Gbo Fastening Systems acquisition: (In thousands) Assets * Cash and cash equivalents $ 3,956 Accounts receivable 4,914 Inventory 13,591 Other current assets 760 Property, plant, equipment and noncurrent assets 3,929 27,150 Liabilities Accounts payable 4,500 Other current liabilities 6,146 10,646 Total net assets 16,504 Gain (adjustment) on bargain purchase of a business (6,336 ) Total purchase price $ 10,168 * Intangible assets acquired were determined to have little to no value, thus were not recognized. The results of operations of businesses acquired in 2016 through 2017 were included in the Company’s condensed consolidated results of operations since the date of the applicable acquisition. Such businesses are not material to the Company on an individual or aggregate basis, and accordingly, pro forma results of operations are not presented. Sales of Gbo Poland and Gbo Romania As a result of incompatibility with Simpson's market strategy, the Company completed the sale of all of its equity in Gbo Fastening Systems' Poland and Gbo Romania subsidiaries on September 29, 2017 and October 31, 2017, respectively, for approximately $10.2 million , resulting in a gain of $0.4 million which was presented in the accompanying condensed statements of operations. Recently Adopted Accounting Standards In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Compensation - Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09") , which amends existing guidance related to accounting for employee share-based payments affecting the income tax consequences of awards, classification of awards as equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for fiscal years, and interim periods within those fiscal years beginning after December 15, 2016, with early adoption permitted. On January 1, 2017, the Company adopted ASU 2016-09. This new guidance requires all excess tax benefits and tax deficiencies be recognized as income tax expense or benefit in the income statement and classified as an operating activity in the statement of cash flows. The Company prospectively adopted this guidance with the tax impact of a $1.1 million tax benefit recognized in the consolidated income statements and classified it as an operating activity in the consolidated statement of cash flows. The guidance also requires a policy election either to estimate the number of awards that are expected to vest or to account for forfeitures whenever they occur. The Company did not change its policy for calculating accrual compensation costs by estimating the number of awards that are expected to vest. Therefore, when the Company adopted this guidance, there was no recognized cumulative effect adjustment to retained earnings. In addition, this guidance requires cash paid by an employer, when directly withholding shares for tax withholding purposes, to be classified in the statement of cash flows as a financing activity, which differs from the Company's previous method of classification of such cash payments as an operating activity. Accordingly, the Company applied this provision retrospectively and for the nine months ended September 30, 2017 and 2016 and reclassified $5.2 million and $4.0 million , respectively, from operating activities to financing activities in the condensed consolidated statements of cash flows. In March 2016, the FASB issued Accounting Standards Update No. 2016-07, Simplifying the Transition to the Equity Method of Accountin g ("ASU 2016-07"), which eliminates the requirement to apply the equity method of accounting retrospectively when a reporting entity obtains significant influence over a previously held investment. The amendments in ASU 2016-07 are effective for public companies for fiscal years beginning after December 15, 2016, including interim periods therein, with early adoption permitted. The new standard should be applied prospectively for investments that qualify for the equity method of accounting after the effective date. On January 1, 2017, the Company prospectively adopted ASU 2016-07. Adoption of ASU 2016-07 has had no material effect on the Company's consolidated financial statements and footnote disclosures. In January 2017, the FASB issued Accounting Standards Updated No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business ("ASU 2017-01"), which changes the definition of a business to assist entities with evaluating when a set of transferred assets and activities is a business. The new guidance clarifies that a business must also include at least one substantive process and narrows the definition of outputs by more closely aligning it with how outputs are described in ASC 606, Revenue from Contracts with Customers. ASU 2017-01 is effective for fiscal years, and interim periods within those fiscal years beginning after December 15, 2017, with early adoption permitted. On January 1, 2017, the Company prospectively adopted ASU 2017-01. Adoption of ASU 2017-01 has had no material effect on the Company's consolidated financial statements and footnote disclosures. All other issued and effective accounting standards during 2017 were determined to be not relevant or material to the Company. Recently Issued Accounting Standards Not Yet Adopted Other than the following, there have been no new developments to those recently issued accounting standards disclosed in the Company’s 2016 Annual Report on Form 10-K. In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (later codified as ASC 606), Revenue from Contracts with Customers, which supersedes nearly all existing revenue recognition guidance under GAAP. ASC 606 provides a five-step model for revenue recognition to be applied to all revenue contracts with customers. The five-step model includes: (1) determination of whether a contract, an agreement between two or more parties that creates legally enforceable rights and obligations, exists; (2) identification of the performance obligations in the contract; (3) determination of the transaction price; (4) allocation of the transaction price to the performance obligations in the contract; and (5) recognition of revenue when (or as) the performance obligation is satisfied. The core principle of ASC 606 is that an entity should recognize revenue for the transfer of goods or services equal to the amount that it expects to be entitled to receive for those goods or services. ASC 606 also requires additional disclosures about the nature, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments. ASC 606 is effective for annual and interim periods beginning after December 15, 2017. The Company will adopt the new standard on January 1, 2018. Company management has completed a review of our significant customer contracts and based on that preliminary review, we expect the adoption of ASC 606 will not result in material differences from our accounting for revenues under the current revenue recognition guidance effective for the Company today. The Company has not yet completed the process of quantifying the effects (if any) of changes that will result from adoption. ASC 606 permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (modified retrospective method). The Company will adopt the new standard using the modified retrospective approach through a cumulative-effect adjustment (if any) to retained earnings as of the effective date. The Company is also identifying and preparing to implement changes to our accounting policies and practices, business processes, systems and controls to support the enhanced disclosure requirements from ASC 606. In October 2016, the FASB issued Accounting Standards Update No. 2016-16, Income Taxes (Topic 740), Intra-Entity Transfers of Assets Other Than Inventory ("ASU 2016-16"), which requires companies to account for the income tax effects of intercompany sales and transfers of assets other than inventory when the transfer occurs. Current guidance requires companies to defer the income tax effects of intercompany transfers of assets until the asset has been sold to an outside party or otherwise recognized. The amendment is to be applied using a modified retrospective approach. ASU 2016-16 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. Based on current information and subject to future events and circumstances, the Company does not know whether ASU 2016-16 will have a material impact on its financial statements upon adoption. In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ("ASU 2017-04"), which eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge or Step 2 of the goodwill impairment analysis. Instead, an impairment charge will be recorded based on the excess of a reporting unit's carrying amount over its fair value using Step 1 of the goodwill impairment analysis. The standard is required to be adopted for annual and interim impairment tests performed after December 15, 2019. The amendment is to be applied prospectively. Early adoption is permitted for annual and interim goodwill impairment testing dates after January 1, 2017. Based on current information and subject to future events and circumstances, the Company does not know whether ASU 2017-04 will have a material impact on its financial statements upon adoption. |
Trade Accounts Receivable, Net
Trade Accounts Receivable, Net | 9 Months Ended |
Sep. 30, 2017 | |
Receivables [Abstract] | |
Trade Accounts Receivable, Net | Trade Accounts Receivable, Net Trade accounts receivable at the dates indicated consisted of the following: At September 30, At December 31, (in thousands) 2017 2016 2016 Trade accounts receivable $ 165,101 $ 145,966 $ 116,368 Allowance for doubtful accounts (1,166 ) (945 ) (895 ) Allowance for sales discounts and returns (4,364 ) (3,305 ) (3,050 ) $ 159,571 $ 141,716 $ 112,423 |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories at the dates indicated consisted of the following: At September 30, At December 31, (in thousands) 2017 2016 2016 Raw materials $ 87,100 $ 83,613 $ 86,524 In-process products 26,248 20,313 20,902 Finished products 131,128 116,281 124,848 $ 244,476 $ 220,207 $ 232,274 |
Property, Plant and Equipment,
Property, Plant and Equipment, Net | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment, Net | Property, Plant and Equipment, Net Property, plant and equipment, net, at the dates indicated consisted of the following: At September 30, At December 31, (in thousands) 2017 2016 2016 Land $ 33,030 $ 30,217 $ 32,127 Buildings and site improvements 201,877 176,430 183,882 Leasehold improvements 5,911 5,682 5,550 Machinery, equipment, and software 289,970 249,227 248,861 530,788 461,556 470,420 Less accumulated depreciation and amortization (297,321 ) (275,096 ) (273,302 ) 233,467 186,460 197,118 Capital projects in progress 31,711 43,210 35,692 $ 265,178 $ 229,670 $ 232,810 |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, Net | Goodwill and Intangible Assets, Net Goodwill at the dates indicated was as follows: At September 30, At December 31, (in thousands) 2017 2016 2016 North America $ 95,781 $ 85,988 $ 85,488 Europe 40,038 39,402 37,616 Asia/Pacific 1,494 1,455 1,375 Total $ 137,313 $ 126,845 $ 124,479 Intangible assets, net, at the dates indicated were as follows: At September 30, 2017 Gross Net Carrying Accumulated Carrying (in thousands) Amount Amortization Amount North America $ 33,923 $ (16,728 ) $ 17,195 Europe 29,430 (16,575 ) 12,855 Total $ 63,353 $ (33,303 ) $ 30,050 At September 30, 2016 Gross Net (in thousands) Carrying Amount Accumulated Amortization Carrying Amount North America $ 27,488 $ (17,347 ) $ 10,141 Europe 31,090 (16,602 ) 14,488 Total $ 58,578 $ (33,949 ) $ 24,629 At December 31, 2016 Gross Net (in thousands) Carrying Amount Accumulated Amortization Carrying Amount North America $ 23,562 $ (13,811 ) $ 9,751 Europe 27,880 (14,767 ) 13,113 Total $ 51,442 $ (28,578 ) $ 22,864 Intangible assets consist of definite-lived and indefinite-lived assets. Definite-lived intangible assets include customer relationships, patents, unpatented technology and non-compete agreements. Amortization expense for definite-lived intangible assets during the three months ended September 30, 2017 and 2016 , totaled $1.5 million and $1.5 million , respectively; and during the nine months ended September 30, 2017 and 2016 , totaled $4.7 million and $4.6 million , respectively. The only indefinite-lived intangible asset, consisting of a trade name, totaled $0.6 million at September 30, 2017 . At September 30, 2017 , estimated future amortization of definite-lived intangible assets was as follows: (in thousands) Remaining three months of 2017 $ 1,635 2018 5,505 2019 5,185 2020 5,155 2021 4,675 2022 2,774 Thereafter 4,505 $ 29,434 The changes in the carrying amount of goodwill and intangible assets for the nine months ended September 30, 2017 , were as follows: Intangible (in thousands) Goodwill Assets Balance at December 31, 2016 $ 124,479 $ 22,864 Acquisitions 10,066 10,351 Reclassifications (189 ) 626 Amortization — (4,725 ) Foreign exchange 2,957 934 Balance at September 30, 2017 $ 137,313 $ 30,050 |
Investments
Investments | 9 Months Ended |
Sep. 30, 2017 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments | Investments On December 23, 2016, the Company acquired a 25.0% equity interest in Ruby Sketch Pty Ltd. (“Ruby Sketch”), an Australian proprietary limited company, for $2.5 million , for which the Company accounts for its ownership interest using the equity accounting method. Ruby Sketch develops software that assists in designing residential structures, primarily used in Australia, and potentially for the North America market. The Company has no obligation to make any additional capital contributions to Ruby Sketch. For the three and nine months ended September 30, 2017 , the Company recorded an equity loss of $13 thousand and $53 thousand , respectively, with respect to its Ruby Sketch investment. However, the investment increased $82 thousand due to the foreign currency translation, primarily related to the strengthening Australian dollar against United States dollar, resulting in a $2.6 million balance as of September 30, 2017 . |
Debt
Debt | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Debt | Debt Credit Facilities The Company has revolving lines of credit with various banks in the United States and Europe. Total available credit at September 30, 2017 , was $304.0 million including revolving credit lines and an irrevocable standby letter of credit in support of various insurance deductibles. The Company’s primary credit facility is a revolving line of credit with $300 million in available credit. On July 25, 2016, the Company entered into a second amendment (the "Amendment") to the credit facility. For additional information about the Amendment, see the Company's Current Report on Form 8-K dated July 28, 2016. As amended, this credit facility will expire on July 23, 2021. Amounts borrowed under this credit facility bear interest at an annual rate equal to either, at the Company’s option, (a) the rate for Eurocurrency deposits for the corresponding deposits of U.S. dollars appearing on Reuters LIBOR1screen page (the “LIBOR Rate”), adjusted for any reserve requirement in effect, plus a spread of 0.60% to 1.45% , determined quarterly based on the Company’s leverage ratio (at September 30, 2017 , the LIBOR Rate was 1.23% ), or (b) a base rate , plus a spread of 0.00% to 0.45% , determined quarterly based on the Company’s leverage ratio. The base rate is defined in a manner such that it will not be less than the LIBOR Rate. The Company will pay fees for standby letters of credit at an annual rate equal to the applicable spread described above, and will pay market-based fees for commercial letters of credit. The Company is required to pay an annual facility fee of 0.15% to 0.30% of the available commitments under the credit facility, regardless of usage, with the applicable fee determined on a quarterly basis based on the Company’s leverage ratio. The Company was also required to pay customary fees as specified in a separate fee agreement to the agent under the credit facility. The Company’s unused borrowing capacity under other revolving credit lines and a term note totaled $4.0 million at September 30, 2017 . The other revolving credit lines and the term note charge interest ranging from 0.47% to 8.25% , currently have maturity dates from July 2017 to December 2017. The Company had no outstanding debt balance as of September 30, 2017 and 2016, and December 31, 2016 , respectively. The Company was in compliance with its financial covenants at September 30, 2017 . Capital Lease Obligations The Company entered into two four -year lease agreements for certain office equipment with Cisco Systems Capital Corporation for a total of approximately $4.4 million , which was recorded in fixed assets as capital lease obligations. These capital lease obligations are included in current liabilities and other long-term liabilities in the accompanying condensed consolidated balance sheets. The interest rates for these two capital leases are 2.89% and 3.50% , respectively, and the two leases will mature in May 2021 and July 2021, respectively. As of September 30, 2017 , the current portion of the outstanding liability for the leased equipment was approximately $1.0 million and the long-term portion was approximately $2.9 million . |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Environmental The Company’s policy with regard to environmental liabilities is to accrue for future environmental assessments and remediation costs when information becomes available that indicates that it is probable that the Company is liable for any related claims and assessments and the amount of the liability is reasonably estimable. The Company does not believe that any such matters will have a material adverse effect on the Company’s financial condition, cash flows or results of operations. Litigation From time to time, the Company is involved in various legal proceedings and other matters arising in the normal course of business. Corrosion, hydrogen enbrittlement, cracking, material hardness, wood pressure-treating chemicals, misinstallations, misuse, design and assembly flaws, manufacturing defects, labeling defects, product formula defects, inaccurate chemical mixes, adulteration, environmental conditions, or other factors can contribute to failure of fasteners, connectors, anchors, adhesives, specialty chemicals, such as fiber reinforced polymers, and tool products. In addition, inaccuracies may occur in product information, descriptions and instructions found in catalogs, packaging, data sheets, and the Company’s website. As of the date of this Quarterly Report on Form 10-Q, the Company is not a party to any legal proceedings, which the Company expects individually or in the aggregate to have a material adverse effect on the Company’s financial condition, cash flows or results of operations. Nonetheless, the resolution of any claim or litigation is subject to inherent uncertainty and could have a material adverse effect on the Company’s financial condition, cash flows or results of operations. Potential Third-Party Claims Nishimura v. Gentry Homes, Ltd., Civil No. 11-1-1522-07, was filed in the Hawaii First Circuit court on July 20, 2011. The Nishimura case involves claims by homeowners at Ewa by Gentry, a Honolulu development of approximately 2,400 homes. The claims arise out of alleged corrosion of strap-tie holdowns and mud-sill anchor products supplied by the Company. The plaintiff homeowners originally sued the developer, Gentry Homes, Ltd. (“Gentry”), as well as the Company. In 2012 and 2013, the Hawaii First Circuit granted the Company’s motions to dismiss and for summary judgment, resulting in the dismissal of all of the homeowners’ claims against the Company, and the Company has not since then been a party to the proceedings. The dismissed claims against the Company remain subject to potential appeal by the plaintiffs. Gentry and the plaintiff homeowners thereafter moved their dispute to arbitration, and the Hawaii state court stayed the lawsuit pending arbitration. The Company was not a party to the arbitration. Gentry initially reported no significant damage claims related to the Ewa development. In August 2016, Gentry advised the Company for the first time that a substantial number of plaintiff homeowners claimed serious corrosion of mudsill anchors and strap-tie holdowns. The plaintiff homeowners and Gentry proceeded to arbitration in April 2017. During the pendency of the arbitration, Gentry and the plaintiff homeowners reached a settlement of their dispute, pursuant to which Gentry agreed to pay approximately $90 million to the plaintiff homeowners. In October 2017, Gentry demanded that the Company pay Gentry the amount it paid the plaintiff homeowners to settle their claims, asserting the Company was responsible for breach of warranty, negligent misrepresentation and fraud in connection with the supply of strap-tie holdowns and mud-sill anchor products to Gentry. As of the date of this Quarterly Report on Form 10-Q, Gentry had not yet initiated legal proceedings against the Company. The Company admits no liability in connection with the Nishimura case. At this time, the Company cannot reasonably ascertain the likelihood that it will be found responsible for substantial damages to Gentry or to the homeowners should they appeal; whether any legal theory against the Company might be viable, or the extent of the liability the Company might face if Gentry were to proceed against it. The Company will vigorously defend any claims against it, whether appeal by the plaintiff homeowners, or third party claims by Gentry. Based on facts currently known to the Company and subject to future events and circumstances, the Company believes that all or part of any claims that any party might seek to allege against it related to the Nishimura case may be covered by its insurance policies. Charles Vitale, et al. v. D.R. Horton, Inc. and D.R. Horton-Schuler Homes, LLC , Civil No. 15-1-1347-07, a putative class action lawsuit, was filed in the Hawaii First Circuit on July 13, 2015, in which homeowner plaintiffs allege that all homes built by D.R Horton/D.R. Horton-Schuler Homes (collectively "Horton Homes") in the State of Hawaii have strap-tie holdowns that are suffering premature corrosion. The complaint alleges that various manufacturers make strap-tie holdowns that suffer from such corrosion, but does not identify the Company’s products specifically. The Company is not currently a party to the Vitale lawsuit, but the lawsuit in the future could potentially involve the Company’s strap-tie holdowns. If claims are asserted against the Company in the Vitale case, it will vigorously defend any such claims, whether brought by the plaintiff homeowners, or third party claims by Horton Homes. Based on facts currently known to the Company and subject to future events and circumstances, the Company believes that all or part of any claims that any party might seek to allege against it related to the Vitale case may be covered by its insurance policies. Given the nature and the complexities involved in the Nishimura and Vitale proceedings, the Company is unable to estimate reasonably a likelihood of possible loss or range of possible loss until the Company knows, among other factors, (i) whether it will be named in either lawsuit by any party; (ii) the specific claims and the legal theories on which they are based (iii) what claims, if any, might be dismissed without trial, (iv) the extent of the claims, including the size of any potential class, particularly as damages are not specified or are indeterminate, (v) how the discovery process will affect the litigation, (vi) the settlement posture of the other parties to the litigation, (vii) the extent to which the Company’s insurance policies will cover the claims or any part thereof, if at all, (viii) whether class treatment is appropriate; and (ix) any other factors that may have a material effect on the litigation. While it is not feasible to predict the outcome of proceedings to which the Company is not currently a party, or reasonably estimate a possible loss or range of possible loss for the Company related to such matters, in the opinion of the Company, either the likelihood of loss from such proceedings is remote or any reasonably possible loss associated with the resolution of such proceedings is not expected to be material to the Company’s financial position, results of operations or cash flows either individually or in the aggregate. Nonetheless, the resolution of any claim or litigation is subject to inherent uncertainty and could have a material adverse effect on the Company’s financial condition, cash flows or results of operations. |
Stock-Based Incentive Plans
Stock-Based Incentive Plans | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Incentive Plans | Stock-Based Incentive Plans The Company currently has one stock-based incentive plan, the 2011 Plan, which incorporates and supersedes its two previous plans except for awards previously granted under the two plans (see "Note 1 Basis of Presentation — Accounting for Stock-Based Compensation” ). Generally, participants of the 2011 Plan have been granted stock-based awards, only if the applicable Company-wide and/or profit-center operating goals, or strategic goals, established by the Compensation and Leadership Development Committee (the "Committee") of the Board at the beginning of the year, were met. In 2017, some of the grants made will vest only if Company-wide and/or profit-center operating goals established by the Committee at the beginning of the year are met. The Company granted restricted stock units (“RSUs”) under the 2011 Plan in 2015, 2016 and 2017. The fair value of each restricted stock unit award is estimated on the measurement date as determined in accordance with GAAP and is based on the closing market price of the underlying Company's common stock on the day of the grant or the immediately preceding the trading date. The fair value excludes the present value of the dividends that the RSUs do not participate in. The RSUs may be time-based, performance-based or time- and performance-based. The restrictions on the time-based RSUs granted to our named executive officers and certain members of our senior management in 2017 and prior generally lapse on the date of the award and each of the first, second and third anniversaries of the date of the award. The restrictions on the time-based RSUs granted in 2017 generally lapse on the first, second, third and fourth anniversaries of the date of the award. The restrictions on the performance-based RSUs granted to our named executive officers and certain members of the Company’s senior management in 2017 and prior, in addition to their time-based RSUs, generally lapse following a performance period set for the RSUs on the date of the award, and shares of our common stock underlying such awards are subject to performance-based adjustment before becoming vested. In addition, the restrictions on the time- and performance-based RSUs granted to our employees in 2017 generally lapse on the first, second, third and fourth anniversaries of the date of the award, provided that the applicable performance goals are achieved within the year of grant. Generally, performance-based awards (including time- and performance-based awards) granted under the 2011 Plan may vest following the end of the performance periods only if the applicable performance goals are achieved within such periods. Under the 2011 Plan, or the applicable grant agreement, the vesting of RSUs granted thereunder may accelerate in four situations: (1) retirement after meeting certain age and/or service tenure conditions, (2) death, (3) disability, and (4) certain situations linked to a change in our control or our sale of assets. In case of early vesting of performance-based awards in any one of the four situations, shares of the underlying stock that could eventually vest in favor of the officer will be prorated based on the early-vesting date and the date when the applicable vesting period is scheduled to expire. On February 4, 2017, 606,299 RSUs were awarded to the Company's employees, including officers, at an estimated fair value of $43.42 per share, based on the closing price on February 3, 2017. On May 16, 2017, 10,066 RSUs were awarded to each of the Company's seven independent directors at an estimated value of $41.52 per share based on the closing price of shares of the Company's common stock on May 15, 2017, which RSUs vested fully on the date of the grant. The following table summarizes changes to the Company’s unvested RSUs for the nine months ended September 30, 2017 : Shares Weighted- Average Price Aggregate Intrinsic Value * Unvested Restricted Stock Units (RSUs) (in thousands) (in thousands) Outstanding at January 1, 2017 615 $ 31.81 26,915 Awarded 616 Vested (327 ) Forfeited (38 ) Outstanding at September 30, 2017 866 $ 36.14 $ 42,469 Outstanding and expected to vest at September 30, 2017 844 $ 36.11 $ 41,366 * The intrinsic value is calculated using the closing price per share of $49.04 of the underlying Company's common stock as reported by the New York Stock Exchange on September 30, 2017 . The total intrinsic value of RSUs vested during the nine -month periods ended September 30, 2017 and 2016 , was $11.0 million and $10.8 million , respectively, based on the market value on the award date. No stock options were granted in 2016 or in the first nine months of 2017 . The following table summarizes the changes to the Company’s outstanding non-qualified stock options for the nine months ended September 30, 2017 : Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Life Aggregate Intrinsic Value * Non-Qualified Stock Options (in thousands) (in years) (in thousands) Outstanding at January 1, 2017 251 $ 29.66 1.1 3,558 Exercised (120 ) Forfeited — Outstanding and exercisable at September 30, 2017 131 $ 29.66 0.3 $ 2,534 * The intrinsic value represents the amount, if any, by which the fair market value of the underlying Company's common stock exceeds the exercise price of the stock option, using the closing price per share of $49.04 such stock as reported by the New York Stock Exchange on September 30, 2017 . The total intrinsic value of stock options exercised was $1.7 million and $2.4 million during nine -month periods ended September 30, 2017 and 2016 , respectively. As of September 30, 2017 , there was $17.3 million , unrecognized cost related to unvested stock-based compensation arrangements under the 2011 Plan for awards made through February 2017. The portion of this cost related to RSUs awarded through May 2017 (as discussed above) is expected to be recognized over a weighted-average period of 2.3 years. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company is organized into three reportable segments. The segments are defined by the regions where the Company’s products are manufactured, marketed and distributed to the Company’s customers. The three regional segments are the North America segment, comprising primarily the United States and Canada; the Europe segment, comprising continental Europe and the United Kingdom; and the Asia/Pacific segment, which the Company believes is not significant to its overall performance, comprising the Company’s operations in China, Hong Kong, the South Pacific and the Middle East. China and Hong Kong operations are manufacturing and administrative support locations, respectively. These three reportable segments are similar in several ways, including the types of materials, the production processes, the distribution channels and the product applications. The Company’s measure of profit or loss for its reportable segments is income (loss) from operations. The following tables illustrate certain measurements used by management to assess the performance as of or for the following periods: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2017 2016 2017 2016 Net Sales North America $ 213,254 $ 197,459 $ 612,765 $ 569,198 Europe 47,137 31,485 126,752 86,003 Asia/Pacific 2,085 2,030 5,828 5,269 Total $ 262,476 $ 230,974 $ 745,345 $ 660,470 Sales to Other Segments* North America $ 625 $ 732 $ 2,403 $ 1,994 Europe 175 157 424 338 Asia/Pacific 4,088 10,821 14,657 22,550 Total $ 4,888 $ 11,710 $ 17,484 $ 24,882 Income (Loss) from Operations North America $ 41,972 $ 42,356 $ 110,748 $ 112,924 Europe 5,139 3,899 7,443 4,180 Asia/Pacific (218 ) 250 (341 ) 1,257 Administrative and all other (197 ) (728 ) (3,387 ) (5,019 ) Total $ 46,696 $ 45,777 $ 114,463 $ 113,342 * The sales to other segments are eliminated in consolidation. At At September 30, December 31, (in thousands) 2017 2016 2016 Total Assets North America $ 946,180 $ 795,339 $ 853,826 Europe 211,083 178,428 165,121 Asia/Pacific 26,006 26,291 25,118 Administrative and all other (114,886 ) (15,755 ) (64,091 ) Total $ 1,068,383 $ 984,303 $ 979,974 Cash collected by the Company’s United States subsidiaries is routinely transferred into the Company’s cash management accounts and, therefore, has been included in the total assets of “Administrative and all other.” Cash and cash equivalent balances in the “Administrative and all other” segment were $116.0 million , $128.6 million , and $137.4 million , as of September 30, 2017 and 2016 , and December 31, 2016 , respectively. Total "Administrative and all other" assets are net of inter-segment due to and from accounts eliminated in consolidation. While the Company manages its business by geographic segment, presented as additional information, the following table illustrates the distribution of the Company’s net sales by product group for the following periods: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2017 2016 2017 2016 Wood construction products $ 224,317 $ 193,513 $ 639,207 $ 562,025 Concrete construction products 38,051 37,461 105,785 98,445 Other 108 — 353 — Total $ 262,476 $ 230,974 $ 745,345 $ 660,470 Wood construction products include connectors, truss plates, fastening systems, fasteners and pre-fabricated shearwalls and are used for connecting and strengthening wood-based construction primarily in the residential construction market. Concrete construction products include adhesives, chemicals, mechanical anchors, carbide drill bits, powder actuated tools and fiber reinforcing materials and are used for restoration, protection or strengthening concrete, masonry and steel construction in residential, industrial, commercial and infrastructure construction. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events In the fourth quarter of 2017, the Company announced employee reductions in the North America and Europe segments and related estimated severance expenses of approximately $3.0 million to $3.5 million , most of which to be recorded in the fourth quarter of 2017. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements include the accounts of Simpson Manufacturing Co., Inc. and its subsidiaries (collectively, the “Company”). There were no investments in affiliates that would render such affiliates to be considered variable interest entities. All significant intercompany transactions have been eliminated. |
Interim Period Reporting | Interim Period Reporting The accompanying unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations for reporting on Form 10-Q. Accordingly, certain information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted. These interim statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016 . The unaudited quarterly condensed consolidated financial statements have been prepared on the same basis as the audited annual consolidated financial statements and, in the opinion of management, contain all adjustments (consisting of only normal recurring adjustments) necessary to state fairly the financial information set forth therein, in accordance with GAAP. The year-end condensed consolidated balance sheet data provided herein were derived from audited financial statements, but do not include all disclosures required by GAAP. The Company’s quarterly results fluctuate. As a result, the Company believes the results of operations for this interim period presented are not indicative of the results to be expected for any future periods. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue when the earnings process is complete, net of applicable provision for discounts, returns and incentives, whether actual or estimated, based on the Company’s experience. This generally occurs when products are shipped to the customer in accordance with the sales agreement or purchase order, ownership and risk of loss pass to the customer, collectability is reasonably assured and pricing is fixed or determinable. The Company’s general shipping terms are F.O.B. shipping point, and title is transferred and revenue is recognized when the products are shipped to customers. When the Company sells F.O.B. destination point, title is transferred and the Company recognizes revenue on delivery or customer acceptance, depending on terms of the sales agreement. Service sales, representing after-market repair and maintenance, engineering activities and software license sales and services, although less than 1.0% of net sales and not material to the condensed consolidated financial statements, are recognized as the services are completed or the software products and services are delivered. If actual costs of sales returns, incentives and discounts were to significantly exceed the recorded estimated allowance, the Company’s sales would be adversely affected. |
Net Earnings Per Common Share | Net Earnings Per Common Share Basic earnings per common share are computed based on the weighted-average number of common shares outstanding. Potentially dilutive securities, using the treasury stock method, are included in the diluted per-share calculations for all periods when the effect of their inclusion is dilutive. |
Accounting for Stock-Based Compensation | Accounting for Stock-Based Compensation The Company currently maintains an equity incentive plan, the Simpson Manufacturing Co., Inc. Amended and Restated 2011 Incentive Plan (the “2011 Plan”), which was originally adopted on April 26, 2011, and was subsequently amended and restated on April 21, 2015. The 2011 Plan amended and restated in their entirety, and incorporated and superseded, both the Simpson Manufacturing Co., Inc. 1994 Stock Option Plan (the “1994 Plan”), which was principally for the Company’s employees, and the Simpson Manufacturing Co., Inc. 1995 Independent Director Stock Option Plan (the “1995 Plan”), which was for its independent directors. Awards previously granted under the 1994 Plan or the 1995 Plan were not affected by the adoption of the 2011 Plan and continued to be governed by the 1994 Plan or the 1995 Plan, respectively. Under the 1994 Plan and the 1995 Plan, the Company could grant incentive stock options and non-qualified stock options, although the Company granted only non-qualified stock options thereunder. The Company generally granted stock options under each of the 1994 Plan and the 1995 Plan once every year. Stock options vest and expire according to terms established at the grant date. Stock options granted under the 1994 Plan typically vested evenly over the requisite service period of four years and have a term of seven years . Stock options granted under the 1995 Plan typically fully vest on the date of grant. Shares of common stock issued on exercise of stock options under the 1994 Plan and the 1995 Plan are registered under the Securities Act of 1933, as amended (the "Securities Act"). Under the 2011 Plan, the Company may grant incentive stock options, non-qualified stock options, restricted stock and restricted stock units ("RSUs"), although the Company currently intends to award primarily performance-based and/or time-based RSUs and to a lesser extent, if at all, non-qualified stock options (see "Note 9 Stock-Based Incentive Plans") to its employees. The Company currently intends to grant RSUs that vest on the date of grant to its independent directors. The Company does not currently intend to award incentive stock options or restricted stock. Under the 2011 Plan, no more than 16.3 million shares of the Company’s common stock in aggregate may be issued under the 2011 Plan, including shares already issued pursuant to prior awards and shares reserved for issuance on exercise of options previously granted under the 1994 Plan and the 1995 Plan. Shares of common stock to be issued pursuant to the 2011 Plan are registered under the Securities Act. Subject to certain adjustments, the following limits shall apply with respect to any awards under the 2011 Plan that are intended to qualify for the performance-based exception from the tax deductibility limitations of section 162(m) of the U.S. Internal Revenue Code of 1986, as amended from time to time: (i) the maximum aggregate number of shares of the Company’s common stock that may be subject to stock options granted in any calendar year to any one participant shall be 150,000 shares; and (ii) the maximum aggregate number of shares of the Company’s common stock issuable or deliverable under RSUs granted in any calendar year to any one participant shall be 100,000 shares. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The “Fair Value Measurements and Disclosures” topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) establishes a valuation hierarchy for disclosure of the inputs used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument; and Level 3 inputs are unobservable inputs based on the Company’s assumptions used to measure assets and liabilities at fair value. A financial asset’s or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. As of September 30, 2017 and 2016 and December 31, 2016 , the Company’s investments consisted of only money market funds, which are the Company’s primary financial instruments, maintained in cash equivalents and carried at cost, approximating fair value, based on Level 1 inputs. The balances of the Company's primary financial instruments at the dates indicated were as follows: At September 30, At December 31, (in thousands) 2017 2016 2016 Money market funds $ 5,409 $ 13,334 $ 2,832 The carrying amounts of trade accounts receivable, accounts payable and accrued liabilities approximate fair value due to the short-term nature of these instruments. The fair value of the Company’s contingent consideration related to acquisitions is classified as Level 3 within the fair value hierarchy as it is based on unobserved inputs, management estimates and entity-specific assumptions and is evaluated on an ongoing basis. As of September 30, 2017, the estimated fair value of the Company's contingent consideration was approximately a total of $1.3 million . |
Income Taxes | Income Taxes The Company uses an estimated annual effective tax rate to measure the tax benefit or tax expense recognized in each interim period. |
Acquisitions | Acquisitions Under the business combinations topic of the FASB ASC 805, the Company accounts for acquisitions as business combinations and ascribes acquisition-date fair values to the acquired assets and assumed liabilities. Provisional fair value measurements are made at the time of the acquisitions. Adjustments to those measurements may be made in subsequent periods, up to one year from the acquisition date, as information necessary to complete the analysis is obtained. Fair value of intangible assets are generally based on Level 3 inputs |
Recently Issued Accounting Standards | Recently Adopted Accounting Standards In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Compensation - Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09") , which amends existing guidance related to accounting for employee share-based payments affecting the income tax consequences of awards, classification of awards as equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for fiscal years, and interim periods within those fiscal years beginning after December 15, 2016, with early adoption permitted. On January 1, 2017, the Company adopted ASU 2016-09. This new guidance requires all excess tax benefits and tax deficiencies be recognized as income tax expense or benefit in the income statement and classified as an operating activity in the statement of cash flows. The Company prospectively adopted this guidance with the tax impact of a $1.1 million tax benefit recognized in the consolidated income statements and classified it as an operating activity in the consolidated statement of cash flows. The guidance also requires a policy election either to estimate the number of awards that are expected to vest or to account for forfeitures whenever they occur. The Company did not change its policy for calculating accrual compensation costs by estimating the number of awards that are expected to vest. Therefore, when the Company adopted this guidance, there was no recognized cumulative effect adjustment to retained earnings. In addition, this guidance requires cash paid by an employer, when directly withholding shares for tax withholding purposes, to be classified in the statement of cash flows as a financing activity, which differs from the Company's previous method of classification of such cash payments as an operating activity. Accordingly, the Company applied this provision retrospectively and for the nine months ended September 30, 2017 and 2016 and reclassified $5.2 million and $4.0 million , respectively, from operating activities to financing activities in the condensed consolidated statements of cash flows. In March 2016, the FASB issued Accounting Standards Update No. 2016-07, Simplifying the Transition to the Equity Method of Accountin g ("ASU 2016-07"), which eliminates the requirement to apply the equity method of accounting retrospectively when a reporting entity obtains significant influence over a previously held investment. The amendments in ASU 2016-07 are effective for public companies for fiscal years beginning after December 15, 2016, including interim periods therein, with early adoption permitted. The new standard should be applied prospectively for investments that qualify for the equity method of accounting after the effective date. On January 1, 2017, the Company prospectively adopted ASU 2016-07. Adoption of ASU 2016-07 has had no material effect on the Company's consolidated financial statements and footnote disclosures. In January 2017, the FASB issued Accounting Standards Updated No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business ("ASU 2017-01"), which changes the definition of a business to assist entities with evaluating when a set of transferred assets and activities is a business. The new guidance clarifies that a business must also include at least one substantive process and narrows the definition of outputs by more closely aligning it with how outputs are described in ASC 606, Revenue from Contracts with Customers. ASU 2017-01 is effective for fiscal years, and interim periods within those fiscal years beginning after December 15, 2017, with early adoption permitted. On January 1, 2017, the Company prospectively adopted ASU 2017-01. Adoption of ASU 2017-01 has had no material effect on the Company's consolidated financial statements and footnote disclosures. All other issued and effective accounting standards during 2017 were determined to be not relevant or material to the Company. Recently Issued Accounting Standards Not Yet Adopted Other than the following, there have been no new developments to those recently issued accounting standards disclosed in the Company’s 2016 Annual Report on Form 10-K. In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (later codified as ASC 606), Revenue from Contracts with Customers, which supersedes nearly all existing revenue recognition guidance under GAAP. ASC 606 provides a five-step model for revenue recognition to be applied to all revenue contracts with customers. The five-step model includes: (1) determination of whether a contract, an agreement between two or more parties that creates legally enforceable rights and obligations, exists; (2) identification of the performance obligations in the contract; (3) determination of the transaction price; (4) allocation of the transaction price to the performance obligations in the contract; and (5) recognition of revenue when (or as) the performance obligation is satisfied. The core principle of ASC 606 is that an entity should recognize revenue for the transfer of goods or services equal to the amount that it expects to be entitled to receive for those goods or services. ASC 606 also requires additional disclosures about the nature, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments. ASC 606 is effective for annual and interim periods beginning after December 15, 2017. The Company will adopt the new standard on January 1, 2018. Company management has completed a review of our significant customer contracts and based on that preliminary review, we expect the adoption of ASC 606 will not result in material differences from our accounting for revenues under the current revenue recognition guidance effective for the Company today. The Company has not yet completed the process of quantifying the effects (if any) of changes that will result from adoption. ASC 606 permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (modified retrospective method). The Company will adopt the new standard using the modified retrospective approach through a cumulative-effect adjustment (if any) to retained earnings as of the effective date. The Company is also identifying and preparing to implement changes to our accounting policies and practices, business processes, systems and controls to support the enhanced disclosure requirements from ASC 606. In October 2016, the FASB issued Accounting Standards Update No. 2016-16, Income Taxes (Topic 740), Intra-Entity Transfers of Assets Other Than Inventory ("ASU 2016-16"), which requires companies to account for the income tax effects of intercompany sales and transfers of assets other than inventory when the transfer occurs. Current guidance requires companies to defer the income tax effects of intercompany transfers of assets until the asset has been sold to an outside party or otherwise recognized. The amendment is to be applied using a modified retrospective approach. ASU 2016-16 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. Based on current information and subject to future events and circumstances, the Company does not know whether ASU 2016-16 will have a material impact on its financial statements upon adoption. In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ("ASU 2017-04"), which eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge or Step 2 of the goodwill impairment analysis. Instead, an impairment charge will be recorded based on the excess of a reporting unit's carrying amount over its fair value using Step 1 of the goodwill impairment analysis. The standard is required to be adopted for annual and interim impairment tests performed after December 15, 2019. The amendment is to be applied prospectively. Early adoption is permitted for annual and interim goodwill impairment testing dates after January 1, 2017. Based on current information and subject to future events and circumstances, the Company does not know whether ASU 2017-04 will have a material impact on its financial statements upon adoption. |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Reconciliation of basic earnings per share ("EPS") to diluted EPS | The following is a reconciliation of basic earnings per common share to diluted earnings per share for the three months and nine months ended September 30, 2017 and 2016 , respectively: Three Months Ended Nine Months Ended (in thousands, except per share amounts) 2017 2016 2017 2016 Net income available to common stockholders $ 28,197 $ 29,797 $ 79,532 $ 72,341 Basic weighted-average shares outstanding 47,367 48,119 47,544 48,231 Dilutive effect of potential common stock equivalents — stock options and restricted stock units 319 233 299 198 Diluted weighted-average shares outstanding 47,686 48,352 47,843 48,429 Earnings per common share: Basic $ 0.60 $ 0.62 $ 1.67 $ 1.50 Diluted $ 0.59 $ 0.62 $ 1.66 $ 1.49 Potentially dilutive securities excluded from earnings per diluted share because their effect is anti-dilutive — — — — |
Stock option and restricted stock unit activity of the entity | The following table represents the Company’s stock-based compensation activity for the three months and nine months ended September 30, 2017 and 2016 , respectively: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2017 2016 2017 2016 Stock-based compensation expense recognized in operating expenses $ 370 $ 3,141 $ 10,942 $ 8,995 Less: Tax benefit of stock-based compensation expense in provision for income taxes 58 1,112 3,962 3,262 Stock-based compensation expense, net of tax $ 312 $ 2,029 $ 6,980 $ 5,733 Fair value of shares vested $ 428 $ 3,088 $ 10,764 $ 9,039 Proceeds to the Company from the exercise of stock-based compensation $ 2,268 $ 4,166 $ 3,566 $ 6,695 Tax effect from the exercise of stock-based compensation, including shortfall tax benefits (1) $ — $ 121 $ — $ 140 (1) Zero balances in the three and nine months ended September 30, 2017 is the result of the Company's adoption of FASB issued Accounting Standards Update No. 2016-09, Compensation - Stock Compensation (Topic 718) Improvements to Employee Share- Based Payment Accounting ("ASU 2016-09") on January 1, 2017, refer to Recently Adopted Accounting Standards below. |
Summary of financial instruments | As of September 30, 2017 and 2016 and December 31, 2016 , the Company’s investments consisted of only money market funds, which are the Company’s primary financial instruments, maintained in cash equivalents and carried at cost, approximating fair value, based on Level 1 inputs. The balances of the Company's primary financial instruments at the dates indicated were as follows: At September 30, At December 31, (in thousands) 2017 2016 2016 Money market funds $ 5,409 $ 13,334 $ 2,832 |
Schedule of effective tax rates and income tax expense | The following table presents the Company’s effective tax rates and income tax expense for the three months and nine months ended September 30, 2017 and 2016 , respectively: Three Months Ended September 30, Nine Months Ended September 30, (in thousands, except percentages) 2017 2016 2017 2016 Effective tax rate 37.0 % 34.8 % 34.0 % 35.9 % Provision for income taxes $ 16,581 $ 15,898 $ 40,972 $ 40,601 |
Schedule of business acquisitions | The following table represents the final allocation of the purchase price to the estimated fair value of the assets acquired and liabilities assumed in the Gbo Fastening Systems acquisition: (In thousands) Assets * Cash and cash equivalents $ 3,956 Accounts receivable 4,914 Inventory 13,591 Other current assets 760 Property, plant, equipment and noncurrent assets 3,929 27,150 Liabilities Accounts payable 4,500 Other current liabilities 6,146 10,646 Total net assets 16,504 Gain (adjustment) on bargain purchase of a business (6,336 ) Total purchase price $ 10,168 * Intangible assets acquired were determined to have little to no value, thus were not recognized. |
Trade Accounts Receivable, Net
Trade Accounts Receivable, Net (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Receivables [Abstract] | |
Schedule of trade accounts receivable, net | Trade accounts receivable at the dates indicated consisted of the following: At September 30, At December 31, (in thousands) 2017 2016 2016 Trade accounts receivable $ 165,101 $ 145,966 $ 116,368 Allowance for doubtful accounts (1,166 ) (945 ) (895 ) Allowance for sales discounts and returns (4,364 ) (3,305 ) (3,050 ) $ 159,571 $ 141,716 $ 112,423 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of carrying values of inventories | Inventories at the dates indicated consisted of the following: At September 30, At December 31, (in thousands) 2017 2016 2016 Raw materials $ 87,100 $ 83,613 $ 86,524 In-process products 26,248 20,313 20,902 Finished products 131,128 116,281 124,848 $ 244,476 $ 220,207 $ 232,274 |
Property, Plant and Equipment23
Property, Plant and Equipment, Net (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, plant and equipment | Property, plant and equipment, net, at the dates indicated consisted of the following: At September 30, At December 31, (in thousands) 2017 2016 2016 Land $ 33,030 $ 30,217 $ 32,127 Buildings and site improvements 201,877 176,430 183,882 Leasehold improvements 5,911 5,682 5,550 Machinery, equipment, and software 289,970 249,227 248,861 530,788 461,556 470,420 Less accumulated depreciation and amortization (297,321 ) (275,096 ) (273,302 ) 233,467 186,460 197,118 Capital projects in progress 31,711 43,210 35,692 $ 265,178 $ 229,670 $ 232,810 |
Goodwill and Intangible Asset24
Goodwill and Intangible Assets, Net (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill, by segment | Goodwill at the dates indicated was as follows: At September 30, At December 31, (in thousands) 2017 2016 2016 North America $ 95,781 $ 85,988 $ 85,488 Europe 40,038 39,402 37,616 Asia/Pacific 1,494 1,455 1,375 Total $ 137,313 $ 126,845 $ 124,479 |
Schedule of net intangible assets, by segment | ntangible assets, net, at the dates indicated were as follows: At September 30, 2017 Gross Net Carrying Accumulated Carrying (in thousands) Amount Amortization Amount North America $ 33,923 $ (16,728 ) $ 17,195 Europe 29,430 (16,575 ) 12,855 Total $ 63,353 $ (33,303 ) $ 30,050 At September 30, 2016 Gross Net (in thousands) Carrying Amount Accumulated Amortization Carrying Amount North America $ 27,488 $ (17,347 ) $ 10,141 Europe 31,090 (16,602 ) 14,488 Total $ 58,578 $ (33,949 ) $ 24,629 At December 31, 2016 Gross Net (in thousands) Carrying Amount Accumulated Amortization Carrying Amount North America $ 23,562 $ (13,811 ) $ 9,751 Europe 27,880 (14,767 ) 13,113 Total $ 51,442 $ (28,578 ) $ 22,864 |
Schedule of estimated future amortization of intangible assets | At September 30, 2017 , estimated future amortization of definite-lived intangible assets was as follows: (in thousands) Remaining three months of 2017 $ 1,635 2018 5,505 2019 5,185 2020 5,155 2021 4,675 2022 2,774 Thereafter 4,505 $ 29,434 |
Changes in the carrying amount of goodwill and intangible assets | The changes in the carrying amount of goodwill and intangible assets for the nine months ended September 30, 2017 , were as follows: Intangible (in thousands) Goodwill Assets Balance at December 31, 2016 $ 124,479 $ 22,864 Acquisitions 10,066 10,351 Reclassifications (189 ) 626 Amortization — (4,725 ) Foreign exchange 2,957 934 Balance at September 30, 2017 $ 137,313 $ 30,050 |
Stock-Based Incentive Plans (Ta
Stock-Based Incentive Plans (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Restricted Stock | |
Stock-Based Compensation | |
Schedule of unvested restricted stock unit activity | The following table summarizes changes to the Company’s unvested RSUs for the nine months ended September 30, 2017 : Shares Weighted- Average Price Aggregate Intrinsic Value * Unvested Restricted Stock Units (RSUs) (in thousands) (in thousands) Outstanding at January 1, 2017 615 $ 31.81 26,915 Awarded 616 Vested (327 ) Forfeited (38 ) Outstanding at September 30, 2017 866 $ 36.14 $ 42,469 Outstanding and expected to vest at September 30, 2017 844 $ 36.11 $ 41,366 * The intrinsic value is calculated using the closing price per share of $49.04 of the underlying Company's common stock as reported by the New York Stock Exchange on September 30, 2017 . |
Non-Qualified Stock Options | |
Stock-Based Compensation | |
Summary of stock option activity | The following table summarizes the changes to the Company’s outstanding non-qualified stock options for the nine months ended September 30, 2017 : Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Life Aggregate Intrinsic Value * Non-Qualified Stock Options (in thousands) (in years) (in thousands) Outstanding at January 1, 2017 251 $ 29.66 1.1 3,558 Exercised (120 ) Forfeited — Outstanding and exercisable at September 30, 2017 131 $ 29.66 0.3 $ 2,534 * The intrinsic value represents the amount, if any, by which the fair market value of the underlying Company's common stock exceeds the exercise price of the stock option, using the closing price per share of $49.04 such stock as reported by the New York Stock Exchange on September 30, 2017 . |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Schedule of performance of reportable segments | The following tables illustrate certain measurements used by management to assess the performance as of or for the following periods: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2017 2016 2017 2016 Net Sales North America $ 213,254 $ 197,459 $ 612,765 $ 569,198 Europe 47,137 31,485 126,752 86,003 Asia/Pacific 2,085 2,030 5,828 5,269 Total $ 262,476 $ 230,974 $ 745,345 $ 660,470 Sales to Other Segments* North America $ 625 $ 732 $ 2,403 $ 1,994 Europe 175 157 424 338 Asia/Pacific 4,088 10,821 14,657 22,550 Total $ 4,888 $ 11,710 $ 17,484 $ 24,882 Income (Loss) from Operations North America $ 41,972 $ 42,356 $ 110,748 $ 112,924 Europe 5,139 3,899 7,443 4,180 Asia/Pacific (218 ) 250 (341 ) 1,257 Administrative and all other (197 ) (728 ) (3,387 ) (5,019 ) Total $ 46,696 $ 45,777 $ 114,463 $ 113,342 * The sales to other segments are eliminated in consolidation. At At September 30, December 31, (in thousands) 2017 2016 2016 Total Assets North America $ 946,180 $ 795,339 $ 853,826 Europe 211,083 178,428 165,121 Asia/Pacific 26,006 26,291 25,118 Administrative and all other (114,886 ) (15,755 ) (64,091 ) Total $ 1,068,383 $ 984,303 $ 979,974 |
Schedule of net sales distributed by product group | While the Company manages its business by geographic segment, presented as additional information, the following table illustrates the distribution of the Company’s net sales by product group for the following periods: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2017 2016 2017 2016 Wood construction products $ 224,317 $ 193,513 $ 639,207 $ 562,025 Concrete construction products 38,051 37,461 105,785 98,445 Other 108 — 353 — Total $ 262,476 $ 230,974 $ 745,345 $ 660,470 |
Basis of Presentation - Revenue
Basis of Presentation - Revenue from External Customers (Details) | 9 Months Ended |
Sep. 30, 2017 | |
Maximum | |
Revenue from External Customer [Line Items] | |
Service sales percentage of net sales, less than | 1.00% |
Basis of Presentation - Reconci
Basis of Presentation - Reconciliation of BEPS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Reconciliation of basic earnings per share ("EPS") to diluted EPS | |||||
Net income available to common stockholders | $ 28,197 | $ 29,797 | $ 79,532 | $ 72,341 | $ 17,393 |
Basic weighted-average shares outstanding (in shares) | 47,367 | 48,119 | 47,544 | 48,231 | |
Dilutive effect of potential common stock equivalents — stock options and restricted stock units (in shares) | 319 | 233 | 299 | 198 | |
Diluted weighted-average shares outstanding (in shares) | 47,686 | 48,352 | 47,843 | 48,429 | |
Earnings per common share: | |||||
Basic (in dollars per share) | $ 0.60 | $ 0.62 | $ 1.67 | $ 1.50 | |
Diluted (in dollars per share) | $ 0.59 | $ 0.62 | $ 1.66 | $ 1.49 | |
Potentially dilutive securities excluded from earnings per diluted share because their effect is anti-dilutive | 0 | 0 | 0 | 0 |
Basis of Presentation Dividend
Basis of Presentation Dividend Declaration (Details) - $ / shares | Sep. 28, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 |
Dividend Declaration [Abstract] | ||||||
Dividends Payable, Date Declared | Sep. 28, 2017 | |||||
Cash dividends declared per common share (in dollars per share) | $ 0.21 | $ 0.42 | $ 0.18 | $ 0.81 | $ 0.52 | $ 0.18 |
Dividends Payable, Date of Record | Jan. 4, 2018 |
Basis of Presentation Shares Re
Basis of Presentation Shares Repurchases (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Aug. 01, 2017 | Aug. 19, 2016 |
Shares Repurchases [Abstract] | |||
Stock Repurchased During the Period | 35,887 | ||
Accelerated Share Repurchases, Settlement (Payment) or Receipt | $ 20 | ||
Stock Repurchase Program, Authorized Amount | $ 275 | $ 125 | |
Authorized Amount Increase Under Share Repurchase Program | $ 150 |
Basis of Presentation - Account
Basis of Presentation - Accounting for Stock-Based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Stock-based compensation activity, including both continuing and discontinued operations | |||||
Stock-based compensation expense recognized in operating expenses | $ 370 | $ 3,141 | $ 10,942 | $ 8,995 | |
Less: Tax benefit of stock-based compensation expense in provision for income taxes | 58 | 1,112 | 3,962 | 3,262 | |
Stock-based compensation expense, net of tax | 312 | 2,029 | 6,980 | 5,733 | |
Fair value of shares vested | 428 | 3,088 | 10,764 | 9,039 | |
Proceeds to the Company from the exercise of stock-based compensation | 2,268 | 4,166 | 3,566 | 6,695 | |
Tax effect from the exercise of stock-based compensation, including shortfall tax benefits (1) | 0 | 121 | 0 | 140 | $ 111 |
Fair value of financial instruments | |||||
Money Market Funds | 5,409 | 13,334 | 5,409 | 13,334 | $ 2,832 |
Contingent Consideration | $ 1,314 | $ 0 | $ 1,314 | $ 0 | |
Income Taxes | |||||
Effective tax rate (as a percent) | 37.00% | 34.80% | 34.00% | 35.90% | |
Provision for income taxes | $ 16,581 | $ 15,898 | $ 40,972 | $ 40,601 | |
Stock Compensation Plan | |||||
Stock-based compensation activity, including both continuing and discontinued operations | |||||
Stock-based compensation cost capitalized in inventory | 300 | $ 500 | $ 300 | $ 500 | |
Restricted Stock Units | |||||
Stock-based compensation activity, including both continuing and discontinued operations | |||||
Reversed Stock-Based Compensation Expense | $ 1,600 | ||||
1994 Plan | |||||
Stock-Based Compensation | |||||
Requisite service period | 4 years | ||||
Expiration period | 7 years | ||||
2011 Plan | |||||
Stock-Based Compensation | |||||
Maximum common stock shares that may be issued under plan (in shares) | 150,000 | 150,000 | |||
2011 Plan | Stock Options | |||||
Stock-Based Compensation | |||||
Maximum common stock shares that may be issued under plan (in shares) | 16,300,000 | 16,300,000 | |||
2011 Plan | Restricted Stock Units | |||||
Stock-Based Compensation | |||||
Maximum common stock shares that may be issued under plan (in shares) | 100,000 | 100,000 |
Basis of Presentation - Schedul
Basis of Presentation - Schedule of Business Acquisition (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Jan. 31, 2017 | Aug. 31, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Acquisitions | |||||||
Maximum period for payment for adjustments to provisional fair value measurements | 1 year | ||||||
Goodwill | $ 137,313 | $ 126,845 | $ 137,313 | $ 126,845 | $ 124,479 | ||
Liabilities | |||||||
Gain (adjustment) on bargain purchase of a business | (2,052) | 0 | 6,336 | 0 | |||
North America | |||||||
Acquisitions | |||||||
Goodwill | 95,781 | $ 85,988 | 95,781 | $ 85,988 | $ 85,488 | ||
North America | MS Decoupe | |||||||
Acquisitions | |||||||
Business combination, cash and cash equivalents acquired | $ 1,400 | ||||||
Assets | |||||||
Cash and cash equivalents | 1,400 | ||||||
North America | CG Visions, Inc. [Member] | |||||||
Acquisitions | |||||||
Payments to acquire business | $ 20,800 | ||||||
Goodwill | 10,100 | ||||||
Business combination, intangible assets acquired | $ 10,300 | ||||||
Business combination, intangible assets acquired, weighted average useful life | 7 years | ||||||
Business combination, other current assets acquired | $ 500 | ||||||
Contingent consideration | 1,100 | ||||||
Assets | |||||||
Other current assets | 500 | ||||||
Property, plant, equipment and noncurrent assets | 20,400 | ||||||
Europe Segment | MS Decoupe | |||||||
Acquisitions | |||||||
Payments to acquire business | 6,900 | ||||||
Goodwill | 1,400 | ||||||
Business combination, intangible assets acquired | $ 1,700 | ||||||
Business combination, intangible assets acquired, weighted average useful life | 10 years | ||||||
Business combination, other current assets acquired | $ 1,600 | ||||||
Business combination, non-current assets acquired | 5,000 | ||||||
Business combination, current liabilities assumed | 600 | ||||||
Business combination, non-current deferred tax liabilities assumed | 1,000 | ||||||
Assets | |||||||
Other current assets | 1,600 | ||||||
Liabilities | |||||||
Other current liabilities | $ 600 | ||||||
Europe Segment | Gbo Fastening Systems | |||||||
Acquisitions | |||||||
Payments to acquire business | 10,200 | ||||||
Business combination, cash and cash equivalents acquired | 3,956 | ||||||
Business combination, other current assets acquired | 760 | ||||||
Business combination, current liabilities assumed | 6,146 | ||||||
Assets | |||||||
Cash and cash equivalents | 3,956 | ||||||
Accounts receivable | 4,914 | ||||||
Inventory | 13,591 | ||||||
Other current assets | 760 | ||||||
Property, plant, equipment and noncurrent assets | 3,929 | $ 16,500 | 16,500 | ||||
Total assets | 27,150 | ||||||
Bargain Purchase Gain Adjustment | 2,100 | ||||||
Liabilities | |||||||
Accounts payable | 4,500 | ||||||
Other current liabilities | 6,146 | ||||||
Total liabilities | 10,646 | ||||||
Total net assets | 16,504 | ||||||
Gain (adjustment) on bargain purchase of a business | 8,400 | $ (6,336) | |||||
Total purchase price | $ 10,168 |
Basis of Presentation - Sale of
Basis of Presentation - Sale of Gbo Poland and Romania (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Sales of Gbo Poland and Gbo Romania [Abstract] | ||||
Proceeds from Sales of Business, Affiliate and Productive Assets | $ 10,200 | |||
Gain on disposal of a business | $ 443 | $ 0 | $ 443 | $ 0 |
Basis of Presentation - Recentl
Basis of Presentation - Recently Adopted Accounting Standards (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Tax benefit | $ 1,100 | |
Cash paid on behalf of employees for shares withheld | $ 5,166 | $ 3,996 |
Trade Accounts Receivable, Ne35
Trade Accounts Receivable, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 |
Receivables [Abstract] | |||
Trade accounts receivable | $ 165,101 | $ 116,368 | $ 145,966 |
Allowance for doubtful accounts | (1,166) | (895) | (945) |
Allowance for sales discounts and returns | (4,364) | (3,050) | (3,305) |
Trade accounts receivable, net | $ 159,571 | $ 112,423 | $ 141,716 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 |
Inventory Disclosure [Abstract] | |||
Raw materials | $ 87,100 | $ 86,524 | $ 83,613 |
In-process products | 26,248 | 20,902 | 20,313 |
Finished products | 131,128 | 124,848 | 116,281 |
Total inventories | $ 244,476 | $ 232,274 | $ 220,207 |
Property, Plant and Equipment37
Property, Plant and Equipment, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 |
Property, Plant and Equipment | |||
Property, plant and equipment, gross | $ 530,788 | $ 470,420 | $ 461,556 |
Less accumulated depreciation and amortization | (297,321) | (273,302) | (275,096) |
Property, plant and equipment excluding capital projects in progress, net | 233,467 | 197,118 | 186,460 |
Capital projects in progress | 31,711 | 35,692 | 43,210 |
Property, plant and equipment, net | 265,178 | 232,810 | 229,670 |
Land | |||
Property, Plant and Equipment | |||
Property, plant and equipment, gross | 33,030 | 32,127 | 30,217 |
Buildings and site improvements | |||
Property, Plant and Equipment | |||
Property, plant and equipment, gross | 201,877 | 183,882 | 176,430 |
Leasehold improvements | |||
Property, Plant and Equipment | |||
Property, plant and equipment, gross | 5,911 | 5,550 | 5,682 |
Machinery, equipment, and software | |||
Property, Plant and Equipment | |||
Property, plant and equipment, gross | $ 289,970 | $ 248,861 | $ 249,227 |
Goodwill and Intangible Asset38
Goodwill and Intangible Assets, Net, Goodwill (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 |
Carrying amount of goodwill by reportable segment | |||
Goodwill | $ 137,313 | $ 124,479 | $ 126,845 |
North America | |||
Carrying amount of goodwill by reportable segment | |||
Goodwill | 95,781 | 85,488 | 85,988 |
Europe | |||
Carrying amount of goodwill by reportable segment | |||
Goodwill | 40,038 | 37,616 | 39,402 |
Asia/Pacific | |||
Carrying amount of goodwill by reportable segment | |||
Goodwill | $ 1,494 | $ 1,375 | $ 1,455 |
Goodwill and Intangible Asset39
Goodwill and Intangible Assets, Net, Intangible Assets, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 |
Changes in gross carrying amount of finite-lived intangible assets | |||
Gross carrying amount | $ 63,353 | $ 51,442 | $ 58,578 |
Accumulated amortization | (33,303) | (28,578) | (33,949) |
Net carrying amount | 30,050 | 22,864 | 24,629 |
North America | |||
Changes in gross carrying amount of finite-lived intangible assets | |||
Gross carrying amount | 33,923 | 23,562 | 27,488 |
Accumulated amortization | (16,728) | (13,811) | (17,347) |
Net carrying amount | 17,195 | 9,751 | 10,141 |
Europe | |||
Changes in gross carrying amount of finite-lived intangible assets | |||
Gross carrying amount | 29,430 | 27,880 | 31,090 |
Accumulated amortization | (16,575) | (14,767) | (16,602) |
Net carrying amount | $ 12,855 | $ 13,113 | $ 14,488 |
Goodwill and Intangible Asset40
Goodwill and Intangible Assets, Net, Estimated Future Amortization (Details) $ in Thousands | Sep. 30, 2017USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remaining three months of 2017 | $ 1,635 |
2,018 | 5,505 |
2,019 | 5,185 |
2,020 | 5,155 |
2,021 | 4,675 |
2,022 | 2,774 |
Thereafter | 4,505 |
Total | $ 29,434 |
Goodwill and Intangible Asset41
Goodwill and Intangible Assets, Net, Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Indefinite-lived Intangible Assets [Line Items] | ||||
Amortization of intangibles | $ 1,500 | $ 1,500 | $ 4,725 | $ 4,600 |
Trade Names | ||||
Indefinite-lived Intangible Assets [Line Items] | ||||
Indefinite-lived intangible assets | $ 600 | $ 600 |
Goodwill and Intangible Asset42
Goodwill and Intangible Assets, Net, Carrying Amount of Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Goodwill | ||||
Balance at the beginning of the period | $ 124,479 | |||
Acquisitions | 10,066 | |||
Reclassifications | (189) | |||
Foreign exchange | 2,957 | |||
Balance at the end of the period | $ 137,313 | $ 126,845 | 137,313 | $ 126,845 |
Intangible Assets | ||||
Balance at the beginning of the period | 22,864 | |||
Acquisitions | 10,351 | |||
Reclassifications | 626 | |||
Amortization | (1,500) | (1,500) | (4,725) | (4,600) |
Foreign exchange | 934 | |||
Balance at the end of the period | $ 30,050 | $ 24,629 | $ 30,050 | $ 24,629 |
Investments (Details)
Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 23, 2016 | |
Equity Method Investment | ||||||
Equity investment | $ 2,582 | $ 0 | $ 2,582 | $ 0 | $ 2,500 | $ 2,500 |
Loss in equity method investment, before tax | 13 | $ 0 | 53 | $ 0 | ||
Rudy Sketch | ||||||
Equity Method Investment | ||||||
Ownership percentage | 25.00% | |||||
Equity investment | 2,600 | 2,600 | ||||
Loss in equity method investment, before tax | 13 | 53 | ||||
Foreign currency translation | $ 82 | $ 82 |
Debt (Details)
Debt (Details) | 9 Months Ended | ||
Sep. 30, 2017USD ($)lease | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | |
Debt | |||
Number of capital lease obligations | lease | 2 | ||
Capital lease obligations, term | 4 years | ||
Capital lease obligations | $ 4,362,000 | $ 0 | |
Current portion of the outstanding liability | 1,000,000 | ||
Capital lease obligation - net of current portion | $ 2,900,000 | ||
Minimum | |||
Debt | |||
Capital lease obligations, Interest Rate, Stated Percentage | 2.89% | ||
Maximum | |||
Debt | |||
Capital lease obligations, Interest Rate, Stated Percentage | 3.50% | ||
Revolving Credit Facility | Base Rate | |||
Debt | |||
Credit facility, interest rate basis | base rate | ||
Line of Credit | |||
Debt | |||
Credit facility, total available credit | $ 304,000,000 | ||
Revolving Credit Facility | |||
Debt | |||
Credit facility, total available credit | 300,000,000 | ||
Credit facility, unused borrowing capacity | 4,000,000 | ||
Line of credit and notes payable | $ 0 | $ 0 | $ 0 |
Revolving Credit Facility | Minimum | |||
Debt | |||
Facility fees on the available commitment of the facility (as a percent) | 0.15% | ||
Interest rate during period | 0.47% | ||
Revolving Credit Facility | Maximum | |||
Debt | |||
Facility fees on the available commitment of the facility (as a percent) | 0.30% | ||
Interest rate during period | 8.25% | ||
Revolving Credit Facility | LIBOR | |||
Debt | |||
LIBOR rate | 1.23% | ||
Credit facility, interest rate basis | LIBOR | ||
Revolving Credit Facility | LIBOR | Minimum | |||
Debt | |||
Credit facility, interest rate spread (as a percent) | 0.60% | ||
Revolving Credit Facility | LIBOR | Maximum | |||
Debt | |||
Credit facility, interest rate spread (as a percent) | 1.45% | ||
Revolving Credit Facility | Base Rate | Minimum | |||
Debt | |||
Credit facility, interest rate spread (as a percent) | 0.00% | ||
Revolving Credit Facility | Base Rate | Maximum | |||
Debt | |||
Credit facility, interest rate spread (as a percent) | 0.45% |
Commitments and Contingencies (
Commitments and Contingencies (Details) - Nishimura v. Gentry Homes, Ltd $ in Millions | Jul. 20, 2017home | Apr. 30, 2017USD ($) |
Loss Contingencies [Line Items] | ||
Number of homes impacted | home | 2,400 | |
Settlement amount | $ | $ 90 |
Stock-Based Incentive Plans - N
Stock-Based Incentive Plans - Narrative (Details) $ / shares in Units, $ in Millions | May 16, 2017shares | May 15, 2017$ / shares | Feb. 04, 2017$ / sharesshares | Sep. 30, 2017USD ($)planshares | Sep. 30, 2016USD ($) | Dec. 31, 2016shares |
Stock-Based Compensation | ||||||
Number of stock-based incentive plans | plan | 1 | |||||
Number of stock option plans superseded | plan | 2 | |||||
Granted (in shares) | shares | 0 | 0 | ||||
Total intrinsic value of options exercised (in dollars) | $ | $ 1.7 | $ 2.4 | ||||
Unrecognized compensation cost and vesting period | ||||||
Unrecognized compensation costs related to unvested share-based compensation arrangements | $ | $ 17.3 | |||||
Weighted-average period for recognition of unrecognized stock-based compensation expense | 2 years 3 months 30 days | |||||
Restricted Stock Units | ||||||
Stock-Based Compensation | ||||||
Awarded (in shares) | shares | 606,299 | 616,000 | ||||
Total intrinsic value of awards vested (in dollars) | $ | $ 11 | $ 10.8 | ||||
Non Employee Directors | Restricted Stock Units | ||||||
Stock-Based Compensation | ||||||
Awarded (in shares) | shares | 10,066 | |||||
Weighted average granted date fair value (in dollars per share) | $ / shares | $ 41.52 | $ 43.42 |
Stock-Based Incentive Plans - U
Stock-Based Incentive Plans - Unvested Restricted Stock Unit Activity (Details) - Restricted Stock Units - USD ($) $ / shares in Units, $ in Thousands | Feb. 04, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Restricted stock unit activity | |||
Outstanding at the beginning of the period (in shares) | 615,000 | ||
Awarded (in shares) | 606,299 | 616,000 | |
Vested (in shares) | (327,000) | ||
Forfeited (in shares) | (38,000) | ||
Outstanding at the end of the period (in shares) | 866,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | |||
Weighted-average exercise price at beginning of the period (in dollars per share) | $ 31.81 | ||
Weighted-average exercise price at end of the period (in dollars per share) | $ 36.14 | ||
Outstanding at the end of the period (in dollars) | $ 42,469 | $ 26,915 | |
Outstanding and expected to vest at end of the period (in shares) | 844,000 | ||
Outstanding and expected to vest at the end of the period (in dollars per share) | $ 36.11 | ||
Outstanding and expected to vest at end of the period (in dollars) | $ 41,366 |
Stock-Based Incentive Plans - S
Stock-Based Incentive Plans - Stock Option Activity (Details) - Non-Qualified Stock Options - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Shares | ||
Exercisable at the start of the period (in shares) | 251 | |
Exercised (in shares) | (120) | |
Forfeited (in shares) | 0 | |
Exercisable at the end of the period (in shares) | 131 | 251 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Weighted-average exercise price at beginning of the period (in dollars per share) | $ 29.66 | |
Weighted-average exercise price at end of the period (in dollars per share) | $ 29.66 | $ 29.66 |
Weighted-average remaining contractual life | 3 months 8 days | 1 year 1 month 12 days |
Outstanding at the end of the period (in dollars) | $ 2,534 | $ 3,558 |
Closing price per share (in dollars per share) | $ 49.04 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)segment | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Segment Reporting [Abstract] | ||||||
Number of reportable segments | segment | 3 | |||||
Segment Information | ||||||
Net sales | $ 262,476 | $ 230,974 | $ 745,345 | $ 660,470 | ||
Income (Loss) from Operations | 46,696 | 45,777 | 114,463 | 113,342 | ||
Total Assets | 1,068,383 | 984,303 | 1,068,383 | 984,303 | $ 979,974 | |
Cash and cash equivalent | 204,171 | 218,720 | 204,171 | 218,720 | 226,537 | $ 258,825 |
Intersegment elimination | ||||||
Segment Information | ||||||
Net sales | 4,888 | 11,710 | 17,484 | 24,882 | ||
Administrative and all other | ||||||
Segment Information | ||||||
Income (Loss) from Operations | (197) | (728) | (3,387) | (5,019) | ||
Total Assets | (114,886) | (15,755) | (114,886) | (15,755) | (64,091) | |
Cash and cash equivalent | 116,000 | 128,600 | 116,000 | 128,600 | 137,400 | |
North America | ||||||
Segment Information | ||||||
Net sales | 213,254 | 197,459 | 612,765 | 569,198 | ||
Income (Loss) from Operations | 41,972 | 42,356 | 110,748 | 112,924 | ||
Total Assets | 946,180 | 795,339 | 946,180 | 795,339 | 853,826 | |
North America | Intersegment elimination | ||||||
Segment Information | ||||||
Net sales | 625 | 732 | 2,403 | 1,994 | ||
Europe | ||||||
Segment Information | ||||||
Net sales | 47,137 | 31,485 | 126,752 | 86,003 | ||
Income (Loss) from Operations | 5,139 | 3,899 | 7,443 | 4,180 | ||
Total Assets | 211,083 | 178,428 | 211,083 | 178,428 | 165,121 | |
Europe | Intersegment elimination | ||||||
Segment Information | ||||||
Net sales | 175 | 157 | 424 | 338 | ||
Asia/Pacific | ||||||
Segment Information | ||||||
Net sales | 2,085 | 2,030 | 5,828 | 5,269 | ||
Income (Loss) from Operations | (218) | 250 | (341) | 1,257 | ||
Total Assets | 26,006 | 26,291 | 26,006 | 26,291 | $ 25,118 | |
Asia/Pacific | Intersegment elimination | ||||||
Segment Information | ||||||
Net sales | $ 4,088 | $ 10,821 | $ 14,657 | $ 22,550 |
Segment Information (Details 2)
Segment Information (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Net sales and long-lived assets by geographical area | ||||||
Cash and cash equivalents | $ 204,171 | $ 218,720 | $ 204,171 | $ 218,720 | $ 226,537 | $ 258,825 |
Net sales | 262,476 | 230,974 | 745,345 | 660,470 | ||
Wood construction products | ||||||
Net sales and long-lived assets by geographical area | ||||||
Net sales | 224,317 | 193,513 | 639,207 | 562,025 | ||
Concrete construction products | ||||||
Net sales and long-lived assets by geographical area | ||||||
Net sales | 38,051 | 37,461 | 105,785 | 98,445 | ||
Other | ||||||
Net sales and long-lived assets by geographical area | ||||||
Net sales | 108 | 0 | 353 | 0 | ||
Corporate, Non-Segment [Member] | ||||||
Net sales and long-lived assets by geographical area | ||||||
Cash and cash equivalents | $ 116,000 | $ 128,600 | $ 116,000 | $ 128,600 | $ 137,400 |
Subsequent Events (Details)
Subsequent Events (Details) - Forecast $ in Millions | 3 Months Ended |
Dec. 31, 2017USD ($) | |
Minimum | |
Subsequent Event [Line Items] | |
Severance Costs | $ 3 |
Maximum | |
Subsequent Event [Line Items] | |
Severance Costs | $ 3.5 |