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☐
Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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☒
Definitive Proxy Statement
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☐
Definitive Additional Materials
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☐
Soliciting Material Pursuant to §240.14a-12
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| Sincerely, | | | ||
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James S. Metcalf
Chairman of the NCI Board |
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Donald R. Riley
President and Chief Executive Officer |
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As of or for the
nine months ended |
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Year ended
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July 29, 2018
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October 29,
2017 |
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October 30,
2016 |
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November 1,
2015 |
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November 2,
2014 |
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November 3,
2013 (6) |
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(Unaudited)
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(Audited)
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(In thousands, except per share data)
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Sales
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| | | $ | 1,426,943 | | | | | $ | 1,770,278 | | | | | $ | 1,684,928 | | | | | $ | 1,563,693 | | | | | $ | 1,370,540 | | | | | $ | 1,308,395 | | | | | | | | | | ||||||||||||||
Net income (loss)
|
| | | $ | 35,551 (1) | | | | | $ | 54,724 (2) | | | | | $ | 51,027 (3) | | | | | $ | 17,818 (4) | | | | | $ | 11,185 (5) | | | | | $ | (12,885 ) (7) | | | | | | | | | | ||||||||||||||
Net income (loss)
applicable to common shares |
| | | $ | 35,303 (1) | | | | | $ | 54,399 (2) | | | | | $ | 50,638 (3) | | | | | $ | 17,646 (4) | | | | | $ | 11,085 (5) | | | | | $ | (12,885 ) (7) | | | | | | | | | | ||||||||||||||
Earnings (loss) per common share:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||
Basic
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| | | $ | 0.53 | | | | | $ | 0.77 | | | | | $ | 0.70 | | | | | $ | 0.24 | | | | | $ | 0.15 | | | | | $ | (0.29 ) | | | | | | | | | | ||||||||||||||
Diluted
|
| | | $ | 0.53 (1) | | | | | $ | 0.77 (2) | | | | | $ | 0.70 (3) | | | | | $ | 0.24 (4) | | | | | $ | 0.15 (5) | | | | | $ | (0.29 ) (7) | | | | | | | | | | ||||||||||||||
Cash flow from operating activities
|
| | | $ | 56,908 | | | | | $ | 63,874 | | | | | $ | 68,479 | | | | | $ | 105,785 | | | | | $ | 34,104 | | | | | $ | 65,119 | | | | | | | | | | ||||||||||||||
Total assets
|
| | | $ | 1,081,694 | | | | | $ | 1,031,112 | | | | | $ | 1,025,396 | | | | | $ | 1,049,317 | | | | | $ | 739,025 | | | | | $ | 750,489 | | | | | | | | | | ||||||||||||||
Total debt
|
| | | $ | 407,992 | | | | | $ | 387,290 | | | | | $ | 396,051 | | | | | $ | 434,542 | | | | | $ | 233,709 | | | | | $ | 235,737 | | | | | | | | | | ||||||||||||||
Stockholders’ equity
|
| | | $ | 299,086 | | | | | $ | 305,247 | | | | | $ | 281,317 | | | | | $ | 271,976 | | | | | $ | 246,542 | | | | | $ | 252,758 | | | | | | | | | | ||||||||||||||
Diluted average common shares
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| | | | 66,477 | | | | | | 70,778 | | | | | | 72,857 | | | | | | 73,923 | | | | | | 74,709 | | | | | | 44,761 (8) | | | | | | | | | | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Successor
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Predecessor
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Ply Gem Holdings Predecessor
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As of and for the
period from April 13, 2018 to June 30, 2018 |
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As of and for the
period from January 1, 2018 to April 12, 2018 |
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Year ended December 31,
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2017
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2016
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2015
(1)
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(Amounts in thousands, except per share data)
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(Unaudited)
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(Audited)
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Statement of operations data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net sales
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| | | $ | 597,936 | | | | | $ | 529,643 | | | | | $ | 2,056,303 | | | | | $ | 1,911,844 | | | | | $ | 1,839,726 | | |
Cost of products sold
|
| | | | 479,402 | | | | | | 426,674 | | | | | | 1,587,790 | | | | | | 1,449,570 | | | | | | 1,420,014 | | |
Gross profit
|
| | | | 118,534 | | | | | | 102,969 | | | | | | 468,513 | | | | | | 462,274 | | | | | | 419,712 | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Selling, general and administrative expenses
|
| | | | 69,812 | | | | | | 81,364 | | | | | | 272,984 | | | | | | 268,714 | | | | | | 271,874 | | |
Acquisition related expenses
|
| | | | 11,186 | | | | | | 67,802 | | | | | | — | | | | | | — | | | | | | — | | |
Amortization of intangible assets
|
| | | | 24,096 | | | | | | 6,105 | | | | | | 21,271 | | | | | | 25,064 | | | | | | 25,306 | | |
Total operating expenses
|
| | | | 105,094 | | | | | | 155,271 | | | | | | 294,255 | | | | | | 293,778 | | | | | | 297,180 | | |
Operating earnings
|
| | | | 13,440 | | | | | | (52,302 ) | | | | | | 174,258 | | | | | | 168,496 | | | | | | 122,532 | | |
Foreign currency gain (loss)
|
| | | | (1,516 ) | | | | | | (132 ) | | | | | | 1,363 | | | | | | 299 | | | | | | (3,166 ) | | |
Interest expense
|
| | | | (43,787 ) | | | | | | (19,054 ) | | | | | | (69,361 ) | | | | | | (72,718 ) | | | | | | (74,876 ) | | |
Interest income
|
| | | | 24 | | | | | | 22 | | | | | | 78 | | | | | | 36 | | | | | | 57 | | |
Tax receivable agreement liability adjustment
|
| | | | — | | | | | | (5,237 ) | | | | | | 10,749 | | | | | | (60,874 ) | | | | | | (12,947 ) | | |
Loss on modification or extinguishment of debt
|
| | | | — | | | | | | — | | | | | | (2,106 ) | | | | | | (11,747 ) | | | | | | — | | |
Income (loss) before benefit from income
taxes |
| | | | (31,839 ) | | | | | | (76,703 ) | | | | | | 114,981 | | | | | | 23,492 | | | | | | 31,600 | | |
Provision (Benefit) from income taxes
|
| | | | (11,428 ) | | | | | | (9,923 ) | | | | | | 46,654 | | | | | | (51,995 ) | | | | | | (688 ) | | |
Net income (loss)
|
| | | $ | (20,411 ) | | | | | $ | (66,780 ) | | | | | $ | 68,327 | | | | | $ | 75,487 | | | | | $ | 32,288 | | |
|
| | |
Successor
|
| |
Predecessor
|
| |
Ply Gem Holdings Predecessor
|
| |||||||||||||||||||||
| | |
As of and for the
period from April 13, 2018 to June 30, 2018 |
| |
As of and for the
period from January 1, 2018 to April 12, 2018 |
| |
Year ended December 31,
|
| |||||||||||||||||||||
| | |
2017
|
| |
2016
|
| |
2015
(1)
|
| |||||||||||||||||||||
(Amounts in thousands, except per share data)
|
| |
(Unaudited)
|
| |
(Audited)
|
| ||||||||||||||||||||||||
Per basic common share: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income (loss) applicable to common shares
|
| | | $ | (3.20 ) | | | | | $ | (0.97 ) | | | | | $ | 1.00 | | | | | $ | 1.11 | | | | | $ | 0.47 | | |
Per diluted common share: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income (loss) applicable to common shares
|
| | | $ | (3.20 ) | | | | | $ | (0.97 ) | | | | | $ | 0.99 | | | | | $ | 1.10 | | | | | $ | 0.47 | | |
Total assets
(2)
|
| | | $ | 3,886,246 | | | | | | N/A | | | | | $ | 1,319,567 | | | | | $ | 1,257,741 (3) | | | | | $ | 1,266,572 | | |
Long-term debt, less current maturities
(2)
|
| | | $ | 2,434,598 | | | | | | N/A | | | | | $ | 807,334 | | | | | $ | 836,086 | | | | | $ | 975,531 | | |
(Amounts in thousands, except per share data)
|
| |
As of and for the
three months ended March 31, 2018 |
| |
Year ended December 31,
|
| ||||||||||||||||||
|
2017
|
| |
2016
|
| |
2015
|
| |||||||||||||||||
|
(Unaudited)
|
| |
(Audited)
|
| ||||||||||||||||||||
Statement of operations data: | | | | | | | | | | | | | | | | | | | | | | | | | |
Net sales
|
| | | $ | 72,369 | | | | | $ | 348,844 | | | | | $ | 312,628 | | | | | $ | 300,453 | | |
Cost of goods sold
|
| | | | 50,873 | | | | | | 234,451 | | | | | | 214,688 | | | | | | 201,015 | | |
Gross profit
|
| | | | 21,496 | | | | | | 114,393 | | | | | | 97,940 | | | | | | 99,438 | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | |
Selling, delivery, general and administrative expenses
|
| | | | 16,694 | | | | | | 67,572 | | | | | | 63,364 | | | | | | 63,841 | | |
Amortization expense
|
| | | | 1,722 | | | | | | 6,723 | | | | | | 6,231 | | | | | | 6,432 | | |
Stock compensation expense
|
| | | | — | | | | | | 1 | | | | | | 11 | | | | | | 11 | | |
Total selling, delivery, general and administrative expenses
|
| | | | 18,416 | | | | | | 74,296 | | | | | | 69,606 | | | | | | 70,284 | | |
Impairment of trade name
|
| | | | — | | | | | | 1,560 | | | | | | 200 | | | | | | — | | |
Impaiment of goodwill and other intangible assets
|
| | | | — | | | | | | — | | | | | | — | | | | | | 300 | | |
Loss on disposal of assets, net
|
| | | | — | | | | | | (239 ) | | | | | | 288 | | | | | | 6 | | |
Total operating expenses
|
| | | | 18,416 | | | | | | 75,617 | | | | | | 70,094 | | | | | | 70,590 | | |
Operating income from continuing operations
|
| | | | 3,080 | | | | | | 38,776 | | | | | | 27,846 | | | | | | 28,848 | | |
Interest expense
|
| | | | 9,050 | | | | | | 35,903 | | | | | | 42,479 | | | | | | 39,804 | | |
Other expense (income), net
|
| | | | 61 | | | | | | 226 | | | | | | 546 | | | | | | (519 ) | | |
Income (loss) from continuing operations before income taxes
|
| | | | (6,031 ) | | | | | | 2,647 | | | | | | (15,179 ) | | | | | | (10,437 ) | | |
Income tax expense
|
| | | | (464 ) | | | | | | 1,521 | | | | | | 1,320 | | | | | | 2,229 | | |
Loss from continuing operations
|
| | | | (5,567 ) | | | | | | 1,126 | | | | | | (16,499 ) | | | | | | (12,666 ) | | |
Loss from discontinued operations, net of tax
|
| | | | (436 ) | | | | | | (1,148 ) | | | | | | (8,173 ) | | | | | | (13,402 ) | | |
Net (loss)
|
| | | $ | (6,003 ) | | | | | $ | (22 ) | | | | | $ | (24,672 ) | | | | | $ | (26,068 ) | | |
Total assets
|
| | | $ | 213,690 | | | | | $ | 213,630 | | | | | $ | 203,444 | | | | | $ | 214,829 | | |
Long-term debt, less current maturities
|
| | | $ | 302,549 | | | | | $ | 301,974 | | | | | $ | 299,543 | | | | | $ | 311,814 | | |
Long term debt due to related party
|
| | | $ | 79,709 | | | | | $ | 77,326 | | | | | $ | 68,371 | | | | | $ | 53,556 | | |
| | |
Pro Forma
|
| |||
(in thousands)
|
| |
As of
July 29, 2018 |
| |||
Assets | | | |||||
Current assets: | | | |||||
Cash and cash equivalents
|
| | | | 140,508 | | |
Restricted cash
|
| | | | 180 | | |
Accounts receivable, net
|
| | | | 551,205 | | |
Inventories, net
|
| | | | 517,104 | | |
Income taxes receivable
|
| | | | 1,171 | | |
Investments in debt and equity securities, at market
|
| | | | 5,785 | | |
Prepaid expenses and other current assets
|
| | | | 61,823 | | |
Assets held for sale
|
| | | | 7,272 | | |
Total current assets
|
| | |
|
1,285,048
|
| |
Property and equipment, net
|
| | | | 534,540 | | |
Other assets: | | | |||||
Goodwill
|
| | | | 1,693,486 | | |
Intangible assets, net
|
| | | | 1,792,085 | | |
Deferred income tax assets
|
| | | | 1,701 | | |
Other assets, net
|
| | | | 19,610 | | |
Total other assets
|
| | | | 3,506,882 | | |
Total assets
|
| | | | 5,326,470 | | |
Liabilities | | | |||||
Current liabilities: | | | |||||
Notes payable
|
| | | | 994 | | |
Accounts payable
|
| | | | 293,493 | | |
Accrued compensation and benefits
|
| | | | 81,077 | | |
Accrued interest
|
| | | | 35,659 | | |
Other accrued expenses
|
| | | | 318,107 | | |
Accrued expenses
|
| | | | — | | |
Current portion of payable to related parties pursuant to tax receivable agreement
|
| | | | 24,894 | | |
Current portion of long-term debt
|
| | | | 22,300 | | |
Accrued income taxes
|
| | | | 7,925 | | |
Total current liabilities
|
| | | | 784,449 | | |
Long-term debt, net of deferred financing costs
|
| | | | 2,892,973 | | |
Deferred income taxes
|
| | | | 334,253 | | |
Long-term portion of payable to related parties pursuant to tax receivable agreement
|
| | | | 23,362 | | |
Other long-term liabilities
|
| | | | 109,187 | | |
Total long-term liabilities
|
| | | | 3,359,775 | | |
Total liabilities
|
| | | | 4,144,224 | | |
Stockholders’ Equity | | | |||||
Common stock
|
| | | | 1,257 | | |
Additional paid-in capital
|
| | | | 1,439,742 | | |
Accumulated deficit
|
| | | | (249,963 ) | | |
Accumulated other comprehensive loss
|
| | | | (7,623 ) | | |
Treasury stock, at cost
|
| | | | (1,167 ) | | |
Total stockholders’ equity
|
| | | | 1,182,246 | | |
Total liabilities and stockholders’ equity
|
| | | | 5,326,470 | | |
|
| | |
Pro Forma
|
| |||||||||
(in thousands, except for per share data)
|
| |
For the
nine months ended July 29, 2018 |
| |
For the year ended
October 29, 2017 |
| ||||||
Revenue | | | | | | | | | | | | | |
Net sales
|
| | | | 3,248,501 | | | | | | 4,175,425 | | |
Cost of sales
|
| | | | 2,540,218 | | | | | | 3,194,568 | | |
Loss (gain) on sale of assets and asset recovery
|
| | | | — | | | | | | 137 | | |
Gross profit
|
| | | | 708,283 | | | | | | 980,720 | | |
Engineering, selling, general and administrative expenses
|
| | | | 470,308 | | | | | | 608,817 | | |
Intangible asset amortization
|
| | | | 91,717 | | | | | | 122,260 | | |
Goodwill impairment
|
| | | | — | | | | | | 6,000 | | |
Strategic development and acquisition related costs
|
| | | | 5,503 | | | | | | 1,971 | | |
Restructuring and impairment charges
|
| | | | 1,143 | | | | | | 5,297 | | |
Gain on insurance recovery
|
| | | | (4,741 ) | | | | | | (9,749 ) | | |
Loss on disposition of business
|
| | | | 5,673 | | | | | | — | | |
Operating Earnings
|
| | | | 138,680 | | | | | | 246,124 | | |
Interest income
|
| | | | 236 | | | | | | 335 | | |
Interest expense
|
| | | | (152,684 ) | | | | | | (203,886 ) | | |
Foreign currency gain (loss)
|
| | | | (2,196 ) | | | | | | 1,864 | | |
Other income, net
|
| | | | 1,072 | | | | | | 1,472 | | |
Loss on extinguishment of debt
|
| | | | (21,875 ) | | | | | | — | | |
Tax receivable agreement liability adjustment
|
| | | | 5,512 | | | | | | 10,749 | | |
Income (loss) before income taxes
|
| | | | (31,255 ) | | | | | | 56,658 | | |
(Benefit) provision for income taxes
|
| | | | 8,193 | | | | | | 20,063 | | |
Net income (loss) from continuing operations
|
| | | | (39,448 ) | | | | | | 36,595 | | |
Net income allocated to participating securities
|
| | |
|
(248
)
|
| | | |
|
(325
)
|
| |
Net income (loss) applicable to common shares
|
| | | | (39,696 ) | | | | | | 36,270 | | |
Income (loss) per common share: | | | | | | | | | | | | | |
Basic
|
| | | $ | (0.32 ) | | | | | $ | 0.28 | | |
Diluted
|
| | | $ | (0.32 ) | | | | | $ | 0.28 | | |
Weighted average number of common shares outstanding: | | | | | | | | | | | | | |
Basic
|
| | | | 125,756 | | | | | | 130,024 | | |
Diluted
|
| | | | 125,872 | | | | | | 130,173 | | |
| | |
As of and
for the nine months ended July 29, 2018 |
| |
As of and for the
six months ended June 30, 2018 |
| |
As of and
for the nine months ended July 29, 2018 |
| |
As of and
for the year ended October 29, 2017 |
| |
As of and
for the year ended December 31, 2017 |
| |
As of and
for the year ended October 29, 2017 |
| ||||||||||||||||||||||||||||||||||||
(in thousands, except for per share
data) |
| |
Historical
NCI |
| |
Historical
Ply Gem (successor) April 13, 2018 – June 30, 2018 |
| |
Historical
Ply Gem Holdings (predecessor) January 1, 2018 – April 12, 2018 |
| |
Historical
Atrium |
| |
Pro
Forma (1) |
| |
Historical
NCI |
| |
Historical
Ply Gem Holdings |
| |
Historical
Atrium |
| |
Pro
Forma (1) |
| |||||||||||||||||||||||||||
Income per common share – basic
|
| | | $ | 0.53 | | | |
Note 1
|
| |
Note 1
|
| |
Note 3
|
| | | $ | (0.32 ) | | | | | $ | 0.77 | | | | | $ | 1.00 | | | | | $ | (0.00 ) | | | | | $ | 0.28 | | | |||||||||
Income per common share – diluted
|
| | | $ | 0.53 | | | |
Note 1
|
| |
Note 1
|
| |
Note 3
|
| | | $ | (0.32 ) | | | | | $ | 0.77 | | | | | $ | 0.99 | | | | | $ | (0.00 ) | | | | | $ | 0.28 | | | |||||||||
Weighted average number of common shares outstanding – basic
|
| | | | 66,361 | | | | | | 6,380 | | | | | | 68,558 | | | |
Note 4
|
| | | | 125,756 | | | | | | 70,629 | | | | | | 68,443 | | | | | | 2,010 | | | | | | 130,024 | | | |||
Weighted average number of common shares outstanding – diluted
|
| | | | 66,477 | | | | | | 6,380 | | | | | | 68,558 | | | |
Note 4
|
| | | | 125,872 | | | | | | 70,778 | | | | | | 69,007 | | | | | | 2,010 | | | | | | 130,173 | | | |||
Book value per share of common stock
|
| | | $ | 4.52 | | | | | $ | 0.10 | | | |
Note 2
|
| |
Note 5
|
| | | $ | 9.41 | | | | | $ | 4.46 | | | | | $ | 1.20 | | | | | $ | (113.23 ) | | | | | | | | | ||||||
Dividends declared per share of
common stock |
| | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
| | | | | |
Initial Case
|
| |
Evaluated Case
|
| ||||||||||||||||||||||||||||||
| | | | | |
2018E
|
| |
2019E
|
| |
2020E
|
| |
2018E
|
| |
2019E
|
| |
2020E
|
| ||||||||||||||||||
Ply Gem
|
| | Revenue | | | | $ | 2,651 * | | | | | $ | 2,841 | | | | | $ | 3,054 | | | | | $ | 2,649 | | | | | $ | 2,901 | | | | | $ | 3,148 | | |
| | | EBITDA | | | | $ | 355 | | | | | $ | 418 | | | | | $ | 485 | | | | | $ | 339 | | | | | $ | 410 | | | | | $ | 471 | | |
NCI
|
| | Revenue | | | | $ | 1,866 | | | | | $ | 1,959 | | | | | $ | 2,076 | | | | | $ | 1,950 | | | | | $ | 2,011 | | | | | $ | 2,108 | | |
| | | EBITDA | | | | $ | 199 | | | | | $ | 240 | | | | | $ | 290 | | | | | $ | 199 | | | | | $ | 231 | | | | | $ | 260 | | |
Prospective
|
| | Revenue | | | | $ | 4,517 | | | | | $ | 4,800 | | | | | $ | 5,130 | | | | | $ | 4,599 | | | | | $ | 4,911 | | | | | $ | 5,256 | | |
Operating
|
| |
EBITDA (Pre-Synergies)
|
| | | $ | 554 | | | | | $ | 659 | | | | | $ | 774 | | | | | $ | 538 | | | | | $ | 640 | | | | | $ | 731 | | |
Projections | | |
EBITDA (Post-Synergies)
|
| | | $ | 554 | | | | | $ | 694 | | | | | $ | 844 | | | | | $ | 538 | | | | | $ | 657 | | | | | $ | 766 | | |
Sector
|
| |
Selected Public Company
|
| |
TEV/
NTM EBITDA |
| |
TEV/
2019E EBITDA |
|
Windows, Doors & Siding Company | | | James Hardie Industries plc | | |
13.2x
|
| |
11.9x
|
|
Windows, Doors & Siding Company | | | PGT Innovations, Inc. | | |
11.9x
|
| |
11.4x
|
|
Windows, Doors & Siding Company | | |
Masonite International Corporation
|
| |
8.9x
|
| |
8.4x
|
|
Windows, Doors & Siding Company | | | Quanex Building Products Corporation | | |
7.8x
|
| |
7.7x
|
|
Windows, Doors & Siding Company | | | JELD-WEN Holding, Inc. | | |
7.7x
|
| |
7.2x
|
|
Other Building Product Companies | | | Other Companies (Aggregated) (1) | | |
9.2x
|
| |
8.8x
|
|
Sector
|
| |
Selected Public Company
|
| |
TEV/
NTM EBITDA |
| |
TEV/
2019E EBITDA |
|
Select Building Product Company | | | Kingspan Group plc | | |
16.1x
|
| |
15.4x
|
|
Select Building Product Company | | | Simpson Manufacturing Co., Inc. | | |
12.2x
|
| |
11.3x
|
|
Select Building Product Company | | | Armstrong World Industries, Inc. | | |
11.5x
|
| |
11.1x
|
|
Select Building Product Company | | | USG Corporation | | |
10.4x
|
| |
9.8x
|
|
Select Building Product Company | | | Gibraltar Industries, Inc. | | |
9.3x
|
| |
8.8x
|
|
Select Building Product Company | | | Apogee Enterprises, Inc. | | |
8.3x
|
| |
7.7x
|
|
Select Building Product Company | | | Owens Corning | | |
7.2x
|
| |
6.9x
|
|
Metal Fabrication Company | | | Steel Dynamics, Inc. | | |
6.4x
|
| |
6.7x
|
|
Metal Fabrication Company | | | Nucor Corporation | | |
6.4x
|
| |
6.7x
|
|
Metal Fabrication Company | | | BlueScope Steel Limited | | |
6.1x
|
| |
6.1x
|
|
Date Announced
|
| |
Acquiror
|
| |
Target
|
| |
TEV/
LTM EBITDA |
|
January 2018 | | | The Sponsor Fund X Investor | | | Ply Gem Holdings, Inc. | | |
9.8x
|
|
January 2018 | | | The Sponsor Fund X Investor | | | Atrium Windows & Doors, Inc. | | |
8.1x
|
|
November 2016 | | | Boral Limited | | | Headwaters Incorporated | | |
11.8x
|
|
August 2016 | | | Headwaters Incorporated | | | Krestmark Industries LP | | |
11.6x
|
|
November 2015 | | | PGT, Inc. | | | WinDoor, Inc. | | |
11.8x
|
|
August 2014 | | | Ply Gem Industries, Inc. | | | Fortune Brands Windows, Inc. | | |
10.0x
|
|
July 2014 | | | PGT, Inc. | | | CGI Windows & Doors Holdings, Inc. | | |
11.9x
|
|
August 2013 | | | Ares Management LLC/Ontario Teachers’ Pension Plan | | | CPG International Inc. | | |
11.0x
|
|
September 2010 | | | Hellman & Friedman LLC | | | Associated Materials LLC | | |
11.4x
|
|
| | |
NCI
Contribution |
| |
Ply Gem
Contribution |
| |
Run-Rate
Synergies |
| ||||||
EBITDA | | | | | | | | | | | | | | | | |
2018E
|
| | | | 33 % | | | | | | 60 % | | | |
7%
|
|
2019E
|
| | | | 33 % | | | | | | 60 % | | | |
6%
|
|
2020E
|
| | | | 34 % | | | | | | 61 % | | | |
6%
|
|
EBITDA – CapEx | | | | | | | | | | | | | | | | |
2018E
|
| | | | 30 % | | | | | | 61 % | | | |
9%
|
|
2019E
|
| | | | 30 % | | | | | | 62 % | | | |
8%
|
|
2020E
|
| | | | 31 % | | | | | | 63 % | | | |
7%
|
|
Relative Enterprise Value | | | | | | | | | | | | | | | | |
At Transaction
|
| | | | 33 % | | | | | | 67 % | | | |
N/A
|
|
| | |
Golden Parachute Compensation
|
| |||||||||||||||||||||||||||||||||
Name
|
| |
Cash
($) (1) |
| |
Equity
($) (2) |
| |
Pension/
NQDC ($) (3) |
| |
Perquisites/
Benefits ($) (4) |
| |
Other
($) (5) |
| |
Total
($) |
| ||||||||||||||||||
Donald R. Riley
President and Chief Executive Officer |
| | | | 4,442,466 | | | | | | 4,597,452 | | | | | | 133,554 | | | | | | 30,000 | | | | | | — | | | | | | 9,203,472 | | |
Todd R. Moore
Executive Vice President, Chief Legal, Risk & Compliance Officer |
| | | | 1,580,560 | | | | | | 1,871,726 | | | | | | — | | | | | | 30,000 | | | | | | — | | | | | | 3,482,286 | | |
| | |
Golden Parachute Compensation
|
| |||||||||||||||||||||||||||||||||
Name
|
| |
Cash
($) (1) |
| |
Equity
($) (2) |
| |
Pension/
NQDC ($) (3) |
| |
Perquisites/
Benefits ($) (4) |
| |
Other
($) (5) |
| |
Total
($) |
| ||||||||||||||||||
John L. Kuzdal
President of Group Manufacturing Segment |
| | | | 1,744,066 | | | | | | 2,093,198 | | | | | | 98,816 | | | | | | 30,000 | | | | | | — | | | | | | 3,966,080 | | |
Katy K. Theroux
Executive Vice President, Corporate Marketing and Chief Human Resources Officer |
| | | | 1,676,986 | | | | | | 1,749,282 | | | | | | — | | | | | | 30,000 | | | | | | — | | | | | | 3,456,268 | | |
Bradley S. Little
Interim Chief Financial Officer and Treasurer |
| | | | 755,051 | | | | | | 1,035,950 | | | | | | 44,103 | | | | | | 30,000 | | | | | | 222,500 | | | | | | 2,087,604 | | |
Norman C. Chambers
Former Chief Executive Officer and Executive Chairman (6) |
| | | | — | | | | | | 4,496,609 | | | | | | — | | | | | | — | | | | | | — | | | | | | 4,496,609 | | |
Name
|
| |
Cash
Severance($) |
| |
Pro Rata
Bonus($) |
| |
Total($)
|
| |||||||||
Donald R. Riley
|
| | | | 3,750,000 | | | | | | 692,466 | | | | | | 4,442,466 | | |
Todd R. Moore
|
| | | | 1,319,500 | | | | | | 261,060 | | | | | | 1,580,560 | | |
John L. Kuzdal
|
| | | | 1,456,000 | | | | | | 288,066 | | | | | | 1,744,066 | | |
Katy K. Theroux
|
| | | | 1,400,000 | | | | | | 276,986 | | | | | | 1,676,986 | | |
Bradley S. Little
|
| | | | 530,000 | | | | | | 225,051 | | | | | | 755,051 | | |
Name
|
| |
Single-Trigger
PSU Awards ($) |
| |
Single-Trigger
RSU and Restricted Stock Awards ($) |
| |
Double-Trigger
PSU Awards ($) |
| |
Double-Trigger
RSU Awards ($) |
| |
Total
($) |
| |||||||||||||||
Donald R. Riley
|
| | | | 1,259,070 | | | | | | 235,375 | | | | | | 1,776,161 | | | | | | 1,326,846 | | | | | | 4,597,452 | | |
Todd R. Moore
|
| | | | 854,386 | | | | | | 96,843 | | | | | | 593,493 | | | | | | 327,004 | | | | | | 1,871,726 | | |
John L. Kuzdal
|
| | | | 989,269 | | | | | | 112,123 | | | | | | 642,780 | | | | | | 349,026 | | | | | | 2,093,198 | | |
Katy K. Theroux
|
| | | | 719,469 | | | | | | 113,485 | | | | | | 544,206 | | | | | | 372,122 | | | | | | 1,749,282 | | |
Bradley S. Little
|
| | | | 449,668 | | | | | | 125,924 | | | | | | 299,184 | | | | | | 161,174 | | | | | | 1,035,950 | | |
Name
|
| |
Age
|
| |
Position
|
| |||
James S. Metcalf
|
| | | | 60 | | | | Chairman & Chief Executive Officer | |
Donald R. Riley
|
| | | | 54 | | | | Chief Executive Officer, NCI Division and Head of Supply Chain & Technology | |
Name
|
| |
Age
|
| |
Position
|
| |||
Shawn K. Poe
|
| | | | 56 | | | | Chief Financial Officer | |
Katy K. Theroux
|
| | | | 49 | | | | Executive Vice President, Chief Human Resources Officer | |
Todd R. Moore
|
| | | | 58 | | | | Executive Vice President, Chief Legal, Risk & Compliance Officer and Corporate Secretary | |
| | |
NCI
Historical |
| |
Ply Gem
Historical |
| |
Reclassifications
(Note 5) |
| |
Pro Forma
Adjustments |
| |
(Notes)
|
| |
Pro Forma
|
| ||||||||||||||||||
Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 43,322 | | | | | $ | 53,609 | | | | | $ | — | | | | | $ | 43,577 | | | | | | 6.a | | | | | $ | 140,508 | | |
Restricted cash
|
| | | | 180 | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | 180 | | |
Accounts receivable, net
|
| | | | 211,098 | | | | | | 340,107 | | | | | | — | | | | | | — | | | | | | | | | | | | 551,205 | | |
Inventories, net
|
| | | | 260,879 | | | | | | 256,225 | | | | | | — | | | | | | — | | | | | | | | | | | | 517,104 | | |
Income taxes receivable
|
| | | | 1,171 | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | 1,171 | | |
Investments in debt and equity securities,
at market |
| | | | 5,785 | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | 5,785 | | |
Prepaid expenses and other current
assets |
| | | | 35,859 | | | | | | 25,964 | | | | | | — | | | | | | — | | | | | | | | | | | | 61,823 | | |
Assets held for sale
|
| | | | 7,272 | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | 7,272 | | |
Total current assets
|
| | | | 565,566 | | | | | | 675,905 | | | | | | — | | | | | | 43,577 | | | | | | | | | | | | 1,285,048 | | |
Property and equipment, net
|
| | | | 230,851 | | | | | | 303,689 | | | | | | — | | | | | | — | | | | | | | | | | | | 534,540 | | |
Other assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Goodwill
|
| | | | 148,291 | | | | | | 1,232,392 | | | | | | — | | | | | | 312,803 | | | | | | 6.b | | | | | | 1,693,486 | | |
Intangible assets, net
|
| | | | 129,933 | | | | | | 1,662,152 | | | | | | — | | | | | | — | | | | | | | | | | | | 1,792,085 | | |
Deferred income tax assets
|
| | | | 1,701 | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | 1,701 | | |
Other assets, net
|
| | | | 5,352 | | | | | | 12,108 | | | | | | — | | | | | | 2,150 | | | | | | 6.c | | | | | | 19,610 | | |
Total other assets
|
| | | | 285,277 | | | | | | 2,906,652 | | | | | | — | | | | | | 314,953 | | | | | | | | | | | | 3,506,882 | | |
Total assets
|
| | | | 1,081,694 | | | | | | 3,886,246 | | | | | | — | | | | | | 358,530 | | | | | | | | | | | | 5,326,470 | | |
Liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Notes payable
|
| | | | 994 | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | 994 | | |
Accounts payable
|
| | | | 179,700 | | | | | | 113,793 | | | | | | — | | | | | | — | | | | | | | | | | | | 293,493 | | |
Accrued compensation and benefits
|
| | | | 58,454 | | | | | | — | | | | | | 24,186 | | | | | | (1,563 ) | | | | | | 6.d | | | | | | 81,077 | | |
Accrued interest
|
| | | | 1,488 | | | | | | — | | | | | | 35,659 | | | | | | (1,488 ) | | | | | | 6.e | | | | | | 35,659 | | |
Other accrued expenses
|
| | | | 106,204 | | | | | | — | | | | | | 177,795 | | | | | | 34,108 | | | | | | 6.f,6.g | | | | | | 318,107 | | |
Accrued expenses
|
| | | | — | | | | | | 237,640 | | | | | | (237,640 ) | | | | | | — | | | | | | | | | | | | — | | |
Current portion of payable to related parties
pursuant to tax receivable agreement |
| | | | — | | | | | | 24,894 | | | | | | — | | | | | | — | | | | | | | | | | | | 24,894 | | |
Current portion of long-term debt
|
| | | | 4,150 | | | | | | 17,550 | | | | | | — | | | | | | 600 | | | | | | 6.h | | | | | | 22,300 | | |
Accrued income taxes
|
| | | | 7,925 | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | 7,925 | | |
Total current liabilities
|
| | | | 358,915 | | | | | | 393,877 | | | | | | — | | | | | | 31,657 | | | | | | | | | | | | 784,449 | | |
Long-term debt, net of deferred financing costs
|
| | | | 403,842 | | | | | | 2,434,598 | | | | | | — | | | | | | 54,533 | | | | | | 6.h | | | | | | 2,892,973 | | |
Deferred income taxes
|
| | | | 1,740 | | | | | | 332,513 | | | | | | — | | | | | | — | | | | | | | | | | | | 334,253 | | |
Long-term portion of payable to related parties pursuant to tax receivable agreement
|
| | | | — | | | | | | 23,362 | | | | | | — | | | | | | — | | | | | | | | | | | | 23,362 | | |
Other long-term liabilities
|
| | | | 18,111 | | | | | | 91,076 | | | | | | — | | | | | | — | | | | | | | | | | | | 109,187 | | |
Total long-term liabilities
|
| | | | 423,693 | | | | | | 2,881,549 | | | | | | — | | | | | | 54,533 | | | | | | | | | | | | 3,359,775 | | |
Total liabilities
|
| | | | 782,608 | | | | | | 3,275,426 | | | | | | — | | | | | | 86,190 | | | | | | | | | | | | 4,144,224 | | |
Stockholders’ Equity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Common stock
|
| | | | 663 | | | | | | 64 | | | | | | — | | | | | | 530 | | | | | | 6.i | | | | | | 1,257 | | |
Additional paid-in capital
|
| | | | 521,059 | | | | | | 637,911 | | | | | | — | | | | | | 280,772 | | | | | | 6.i | | | | | | 1,439,742 | | |
Accumulated deficit
|
| | | | (213,846 ) | | | | | | (20,411 ) | | | | | | — | | | | | | (15,706 ) | | | | | | 6.i | | | | | | (249,963 ) | | |
Accumulated other comprehensive loss
|
| | | | (7,623 ) | | | | | | (6,744 ) | | | | | | — | | | | | | 6,744 | | | | | | | | | | | | (7,623 ) | | |
Treasury stock, at cost
|
| | | | (1,167 ) | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | (1,167 ) | | |
Total stockholders’ equity
|
| | | | 299,086 | | | | | | 610,820 | | | | | | — | | | | | | 272,340 | | | | | | | | | | | | 1,182,246 | | |
Total liabilities and stockholders’ equity
|
| | | $ | 1,081,694 | | | | | $ | 3,886,246 | | | | | $ | — | | | | | $ | 358,530 | | | | | | | | | | | $ | 5,326,470 | | |
|
| | |
NCI
Historical |
| |
Ply Gem-
Atrium Merger Pro Forma (Note 7) |
| |
Reclassifications
(Note 5) |
| |
Pro Forma
Adjustments |
| |
(Notes)
|
| |
Pro Forma
|
| |||||||||||||||
Revenue | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net sales
|
| | | $ | 1,426,943 | | | | | $ | 1,821,558 | | | | | $ | — | | | | | $ | — | | | | | | | | $ | 3,248,501 | | |
Cost of sales
|
| | | | 1,097,542 | | | | | | 1,442,814 | | | | | | (138 ) | | | | | | — | | | | | | | | | 2,540,218 | | |
Gross profit
|
| | | | 329,401 | | | | | | 378,744 | | | | | | 138 | | | | | | — | | | | | | | | | 708,283 | | |
Engineering, selling, general and administrative expenses
|
| | | | 228,231 | | | | | | 245,739 | | | | | | 138 | | | | | | (3,800 ) | | | | 6.j | | | | | 470,308 | | |
Intangible asset amortization
|
| | | | 7,237 | | | | | | 84,480 | | | | | | — | | | | | | — | | | | | | | | | 91,717 | | |
Strategic development and acquisition related costs
|
| | | | 5,503 | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | 5,503 | | |
Restructuring and impairment charges
|
| | | | 1,143 | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | 1,143 | | |
Gain on insurance recovery
|
| | | | (4,741 ) | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | (4,741 ) | | |
Loss on disposition of business
|
| | | | 5,673 | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | 5,673 | | |
Operating earnings
|
| | | | 86,355 | | | | | | 48,525 | | | | | | — | | | | | | 3,800 | | | | | | | | | 138,680 | | |
Interest income
|
| | | | 118 | | | | | | 118 | | | | | | — | | | | | | — | | | | | | | | | 236 | | |
Interest expense
|
| | | | (16,913 ) | | | | | | (131,197 ) | | | | | | — | | | | | | (4,574 ) | | | | 6.k | | | | | (152,684 ) | | |
Foreign currency (loss)
|
| | | | (92 ) | | | | | | (2,104 ) | | | | | | — | | | | | | — | | | | | | | | | (2,196 ) | | |
Other income, net
|
| | | | 1,072 | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | 1,072 | | |
Loss on extinguishment of debt
|
| | | | (21,875 ) | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | (21,875 ) | | |
Tax receivable agreement liability adjustment
|
| | | | — | | | | | | 5,512 | | | | | | — | | | | | | — | | | | | | | | | 5,512 | | |
Income (loss) before income taxes
|
| | | | 48,665 | | | | | | (79,146 ) | | | | | | — | | | | | | (774 ) | | | | | | | | | (31,255 ) | | |
(Benefit) provision for income taxes
|
| | | | 13,114 | | | | | | (4,710 ) | | | | | | — | | | | | | (211 ) | | | | 6.l | | | | | 8,193 | | |
Net income (loss)
|
| | | | 35,551 | | | | | | (74,436 ) | | | | | | — | | | | | | (563 ) | | | | | | | | | (39,448 ) | | |
Net income allocated to participating securities
|
| | | | (248 ) | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | (248 ) | | |
Net income (loss) applicable to common shares
|
| | | $ | 35,303 | | | | | $ | (74,436 ) | | | | | $ | — | | | | | $ | (563 ) | | | | | | | | $ | (39,696 ) | | |
Income (loss) per common share: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic
|
| | | $ | 0.53 | | | | | | | | | | | | | | | | | | | | | | | | | | $ | (0.32 ) | | |
Diluted
|
| | | $ | 0.53 | | | | | | | | | | | | | | | | | | | | | | | | | | $ | (0.32 ) | | |
Weighted average number of common shares
outstanding: |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic
|
| | | | 66,361 | | | | | | | | | | | | | | | | | | 59,395 | | | | 6.m | | | | | 125,756 | | |
Diluted
|
| | | | 66,477 | | | | | | | | | | | | | | | | | | 59,395 | | | | 6.m | | | | | 125,872 | | |
| | |
NCI
Historical |
| |
Ply Gem-
Atrium Merger Pro Forma (Note 7) |
| |
Reclassifications
(Note 5) |
| |
Pro Forma
Adjustments |
| |
(Notes)
|
| |
Pro Forma
|
| |||||||||||||||
Revenue | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net sales
|
| | | $ | 1,770,278 | | | | | $ | 2,405,147 | | | | | $ | — | | | | | $ | — | | | | | | | | $ | 4,175,425 | | |
Cost of sales
|
| | | | 1,354,077 | | | | | | 1,840,769 | | | | | | (278 ) | | | | | | — | | | | | | | | | 3,194,568 | | |
Loss on sale of assets and asset recovery
|
| | | | 137 | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | 137 | | |
Gross profit
|
| | | | 416,064 | | | | | | 564,378 | | | | | | 278 | | | | | | — | | | | | | | | | 980,720 | | |
Engineering, selling, general and administrative expenses
|
| | | | 293,145 | | | | | | 315,394 | | | | | | 278 | | | | | | — | | | | | | | | | 608,817 | | |
Intangible asset amortization
|
| | | | 9,620 | | | | | | 112,640 | | | | | | — | | | | | | — | | | | | | | | | 122,260 | | |
Goodwill impairment
|
| | | | 6,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | 6,000 | | |
Strategic development and acquisition related costs
|
| | | | 1,971 | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | 1,971 | | |
Restructuring and impairment charges
|
| | | | 5,297 | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | 5,297 | | |
Gain on insurance recovery
|
| | | | (9,749 ) | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | (9,749 ) | | |
Operating earnings
|
| | | | 109,780 | | | | | | 136,344 | | | | | | — | | | | | | — | | | | | | | | | 246,124 | | |
Interest income
|
| | | | 238 | | | | | | 97 | | | | | | — | | | | | | — | | | | | | | | | 335 | | |
Interest expense
|
| | | | (28,899 ) | | | | | | (175,116 ) | | | | | | — | | | | | | 129 | | | | 6.k | | | | | (203,886 ) | | |
Foreign currency gain
|
| | | | 547 | | | | | | 1,317 | | | | | | — | | | | | | — | | | | | | | | | 1,864 | | |
Other income, net
|
| | | | 1,472 | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | 1,472 | | |
Tax receivable agreement liability adjustment
|
| | | | — | | | | | | 10,749 | | | | | | — | | | | | | — | | | | | | | | | 10,749 | | |
Income (loss) before income taxes
|
| | | | 83,138 | | | | | | (26,609 ) | | | | | | — | | | | | | 129 | | | | | | | | | 56,658 | | |
(Benefit) provision for income taxes
|
| | | | 28,414 | | | | | | (8,401 ) | | | | | | — | | | | | | 50 | | | | 6.l | | | | | 20,063 | | |
Net income (loss)
|
| | | | 54,724 | | | | | | (18,208 ) | | | | | | — | | | | | | 79 | | | | | | | | | 36,595 | | |
Net income allocated to participating securities
|
| | | | (325 ) | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | (325 ) | | |
Net income (loss) applicable to common shares
|
| | | $ | 54,399 | | | | | $ | (18,208 ) | | | | | $ | — | | | | | $ | 79 | | | | | | | | $ | 36,270 | | |
Income (loss) per common share: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic
|
| | | $ | 0.77 | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 0.28 | | |
Diluted
|
| | | $ | 0.77 | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 0.28 | | |
Weighted average number of common shares
outstanding: |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic
|
| | | | 70,629 | | | | | | | | | | | | | | | | | | 59,395 | | | | 6.m | | | | | 130,024 | | |
Diluted
|
| | | | 70,778 | | | | | | | | | | | | | | | | | | 59,395 | | | | 6.m | | | | | 130,173 | | |
|
Number of NCI shares issued
|
| | | | 58,709,067 |
|
NCI common stock price
|
| | | $ | 15.63 |
|
Estimated purchase price
|
| | | $ | 917,622,717 |
|
(in thousands, except stock price)
|
| |
Stock Price
|
| |
Estimated
Purchase Price |
| |
Total Goodwill
(including acquirer goodwill) |
| |||||||||
Change in stock price | | | | | | | | | | | | | | | | | | | |
Increase of 35%
|
| | | $ | 21.10 | | | | | $ | 1,238,761 | | | | | $ | 2,014,624 | | |
Decrease of 35%
|
| | | | 10.16 | | | | | | 596,484 | | | | | | 1,372,347 | | |
(dollars in thousands)
|
| |
As of
July 29, 2018 |
| |||
Increase/(Decrease) | | | | | | | |
Accrued expenses
|
| | | $ | (24,186 ) | | |
Accrued compensation and benefits
|
| | | | 24,186 | | |
Accrued expenses
|
| | | $ | (35,659 ) | | |
Accrued interest
|
| | | | 35,659 | | |
Accrued expenses
|
| | | $ | (177,795 ) | | |
Other accrued expenses
|
| | | | 177,795 | | |
(dollars in thousands)
|
| |
For the year
ended October 29, 2017 |
| |||
Increase/(Decrease) | | | | | | | |
Cost of sales
|
| | | $ | (278 ) | | |
Engineering, selling, general and administrative expenses
|
| | | | 278 | | |
(dollars in thousands)
|
| |
For the
nine months to July 29, 2018 |
| |||
Increase/(Decrease) | | | | | | | |
Cost of sales
|
| | | $ | (138 ) | | |
Engineering, selling, general and administrative expenses
|
| | | | 138 | | |
(dollars in thousands)
|
| | ||||
Proceeds from the incremental secured term loan facility
|
| | | $ | 475,000 | |
Less: estimated original issue discount on the incremental term loan facility
|
| | | | (2,375 ) | |
Less: payment of estimated debt issuance costs
|
| | | | (11,650 ) | |
Less: repayment of NCI existing term loan (current and non-current)
|
| | | | (413,963 ) | |
Less: repayment of accrued interest on the NCI existing term loan
|
| | | | (1,488 ) | |
Less: cash-settlement of accelerated NCI long-term incentive plan awards
|
| | | | (1,947 ) | |
Net adjustment to cash
|
| | | $ | 43,577 | |
|
(dollars in thousands)
|
| |
Goodwill
|
||
Goodwill in merger
|
| | | $ | 1,545,195 |
Pre-merger goodwill: | | | | | |
Ply Gem acquisition goodwill
|
| | | | 1,232,392 |
Net adjustment to goodwill
|
| | | $ | 312,803 |
|
(dollars in thousands)
|
| | ||||
Proceeds from the incremental secured term loan facility
|
| | | $ | 475,000 | |
Less: estimated original issue discount on the incremental term loan facility
|
| | | | (2,375 ) | |
Less: payment of estimated debt issuance costs
|
| | | | (9,500 ) | |
Less: repayment of NCI existing term loan (current and non-current)
|
| | | | (413,963 ) | |
Plus: debt issuance costs on NCI existing term loan
|
| | | | 5,971 | |
Net adjustment to long-term debt (current and non-current)
|
| | | $ | 55,133 | |
|
Current portion
|
| | |||||
Repayment of NCI existing term loan (current)
|
| | | | (4,150 ) | | |
Current portion of incremental secured term loan facility
|
| | | | 4,750 | | |
Net adjustment to current portion of long-term debt
|
| | | $ | 600 | | |
|
Non-current portion
|
| | |||||
Net adjustment to long-term debt
|
| | | $ | 54,533 | | |
|
(dollars in thousands)
|
| |
Year ended
October 29, 2017 |
| |
Nine months ended
July 29, 2018 |
| ||||||
Cash interest expense
|
| | | $ | (26,876 ) | | | | | $ | (20,034 ) | | |
Amortization of debt issuance cost
|
| | | | (1,601 ) | | | | | | (1,227 ) | | |
Amortization of original issue discount
|
| | | | (293 ) | | | | | | (226 ) | | |
Elimination of historical interest expense
|
| | | | 28,899 | | | | | | 16,913 | | |
Total adjustment to interest expense
|
| | | $ | 129 | | | | | $ | (4,574 ) | | |
|
| | |
Successor
|
| |
Predecessor
|
| | | | | | | ||||||||||||||||||||||||||||||
| | |
Ply Gem
Historical (April 13, 2018 – June 30, 2018) |
| |
Ply Gem
Holdings Historical (October 1, 2017 – April 12, 2018) (Note 7.a) |
| |
Atrium
Historical (October 1, 2017 to April 12, 2018) (Note 7.a, 7.b) |
| |
Ply Gem-
Atrium Merger Adjustments |
| |
(Notes)
|
| |
Ply Gem-
Atrium Financing Adjustments |
| |
(Notes)
|
| |
Ply Gem-
Atrium Merger Pro Forma |
| ||||||||||||||||||
Net sales
|
| | | $ | 597,936 | | | | | $ | 1,046,501 | | | | | $ | 177,121 | | | | | $ | — | | | | | | | | $ | — | | | | | | | | $ | 1,821,558 | | |
Cost of products sold
|
| | | | 479,402 | | | | | | 833,398 | | | | | | 132,967 | | | | | | (2,953 ) | | | | 7.c | | | | | — | | | | | | | | | 1,442,814 | | |
Gross profit
|
| | | | 118,534 | | | | | | 213,103 | | | | | | 44,154 | | | | | | 2,953 | | | | | | | | | — | | | | | | | | | 378,744 | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Selling, general and administrative expenses
|
| | | | 69,812 | | | | | | 151,738 | | | | | | 25,883 | | | | | | (1,694 ) | | | | 7.c,7.d | | | | | — | | | | | | | | | 245,739 | | |
Acquisition related
expenses |
| | | | 11,186 | | | | | | 67,802 | | | | | | 8,281 | | | | | | (87,269 ) | | | | 7.e | | | | | — | | | | | | | | | — | | |
Amortization of intangible assets
|
| | | | 24,096 | | | | | | 11,433 | | | | | | 3,677 | | | | | | 45,274 | | | | 7.f | | | | | — | | | | | | | | | 84,480 | | |
Total operating expenses
|
| | | | 105,094 | | | | | | 230,973 | | | | | | 37,841 | | | | | | (43,689 ) | | | | | | | | | — | | | | | | | | | 330,219 | | |
Operating earnings (loss)
|
| | | | 13,440 | | | | | | (17,870 ) | | | | | | 6,313 | | | | | | 46,642 | | | | | | | | | — | | | | | | | | | 48,525 | | |
Foreign currency (loss)
|
| | | | (1,516 ) | | | | | | (351 ) | | | | | | (237 ) | | | | | | — | | | | | | | | | — | | | | | | | | | (2,104 ) | | |
Interest expense
|
| | | | (43,787 ) | | | | | | (36,585 ) | | | | | | (27,092 ) | | | | | | 63,292 | | | | 7.g | | | | | (87,025 ) | | | | 7.h | | | | | (131,197 ) | | |
Interest income
|
| | | | 24 | | | | | | 40 | | | | | | 54 | | | | | | — | | | | | | | | | — | | | | | | | | | 118 | | |
Tax receivable agreement liability adjustment
|
| | | | — | | | | | | 5,512 | | | | | | — | | | | | | — | | | | | | | | | — | | | | | | | | | 5,512 | | |
Loss on modification or extinguishment of debt
|
| | | | — | | | | | | (2,106 ) | | | | | | — | | | | | | 2,106 | | | | 7.i | | | | | — | | | | | | | | | — | | |
Income (loss) before provision (benefit) for income taxes
|
| | | | (31,839 ) | | | | | | (51,360 ) | | | | | | (20,962 ) | | | | | | 112,040 | | | | | | | | | (87,025 ) | | | | | | | | | (79,146 ) | | |
Provision (benefit) for income taxes
|
| | | | (11,428 ) | | | | | | 849 | | | | | | (759 ) | | | | | | 29,690 | | | | 7.j | | | | | (23,062 ) | | | | 7.j | | | | | (4,710 ) | | |
Net income (loss)
|
| | | $ | (20,411 ) | | | | | $ | (52,209 ) | | | | | $ | (20,203 ) | | | | | $ | 82,350 | | | | | | | | $ | (63,963 ) | | | | | | | | $ | (74,436 ) | | |
| | |
Ply Gem
Holdings Historical (Note 7.a) |
| |
Atrium
Historical (Note 7.a, 7.b) |
| |
Ply Gem-
Atrium Merger Adjustments |
| |
(Notes)
|
| |
Ply Gem-
Atrium Financing Adjustments |
| |
(Notes)
|
| |
Ply Gem-
Atrium Merger Pro Forma (Note 7) |
| |||||||||||||||
Net sales
|
| | | $ | 2,056,303 | | | | | $ | 348,844 | | | | | $ | — | | | | | | | | $ | — | | | | | | | | $ | 2,405,147 | | |
Cost of products sold
|
| | | | 1,587,790 | | | | | | 258,152 | | | | | | (5,173 ) | | | | 7.c | | | | | — | | | | | | | | | 1,840,769 | | |
Gross profit
|
| | | | 468,513 | | | | | | 90,692 | | | | | | 5,173 | | | | | | | | | — | | | | | | | | | 564,378 | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Selling, general and administrative
expenses |
| | | | 272,984 | | | | | | 45,392 | | | | | | (2,982 ) | | | | 7.c,7.d | | | | | — | | | | | | | | | 315,394 | | |
Amortization of intangible assets
|
| | | | 21,271 | | | | | | 6,723 | | | | | | 84,646 | | | | 7.f | | | | | — | | | | | | | | | 112,640 | | |
Total operating expenses
|
| | | | 294,255 | | | | | | 52,115 | | | | | | 81,664 | | | | | | | | | — | | | | | | | | | 428,034 | | |
Operating earnings
|
| | | | 174,258 | | | | | | 38,577 | | | | | | (76,491 ) | | | | | | | | | — | | | | | | | | | 136,344 | | |
Foreign currency gain (loss)
|
| | | | 1,363 | | | | | | (46 ) | | | | | | — | | | | | | | | | — | | | | | | | | | 1,317 | | |
Interest expense
|
| | | | (69,361 ) | | | | | | (35,903 ) | | | | | | 104,742 | | | | 7.g | | | | | (174,594 ) | | | | 7.h | | | | | (175,116 ) | | |
Interest income
|
| | | | 78 | | | | | | 19 | | | | | | — | | | | | | | | | — | | | | | | | | | 97 | | |
Tax receivable agreement liability adjustment
|
| | | | 10,749 | | | | | | — | | | | | | — | | | | | | | | | — | | | | | | | | | 10,749 | | |
Loss on modification or extinguishment of
debt |
| | | | (2,106 ) | | | | | | — | | | | | | 2,106 | | | | 7.i | | | | | — | | | | | | | | | — | | |
Income (loss) before provision (benefit) for income taxes
|
| | | | 114,981 | | | | | | 2,647 | | | | | | 30,357 | | | | | | | | | (174,594 ) | | | | | | | | | (26,609 ) | | |
Provision (benefit) for income taxes
|
| | | | 46,654 | | | | | | 1,521 | | | | | | 11,908 | | | | 7.j | | | | | (68,484 ) | | | | 7.j | | | | | (8,401 ) | | |
Net income (loss)
|
| | | $ | 68,327 | | | | | $ | 1,126 | | | | | $ | 18,449 | | | | | | | | $ | (106,110 ) | | | | | | | | $ | (18,208 ) | | |
|
| | |
Predecessor
|
| |
Predecessor
|
| |
Predecessor
|
| |
Predecessor
|
| |
Predecessor
|
| |
Predecessor
|
| ||||||||||||||||||
(dollars in thousands)
|
| |
Year ended
December 31, 2017 |
| |
Nine months
ended September 30, 2017 |
| |
Three months
ended December 31, 2017 |
| |
Three months
ended March 31, 2018 |
| |
April 1, 2018 to
April 12, 2018 |
| |
October 1, 2017 to
April 12, 2018 |
| ||||||||||||||||||
Net sales
|
| | | $ | 2,056,303 | | | | | $ | 1,539,445 | | | | | $ | 516,858 | | | | | $ | 459,904 | | | | | $ | 69,739 | | | | | $ | 1,046,501 | | |
Cost of products sold
|
| | | | 1,587,790 | | | | | | 1,181,066 | | | | | | 406,724 | | | | | | 371,854 | | | | | | 54,820 | | | | | | 833,398 | | |
Gross profit
|
| | | | 468,513 | | | | | | 358,379 | | | | | | 110,134 | | | | | | 88,050 | | | | | | 14,919 | | | | | | 213,103 | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Selling, general, and administrative
|
| | | | 272,984 | | | | | | 202,610 | | | | | | 70,374 | | | | | | 70,675 | | | | | | 10,689 | | | | | | 151,738 | | |
Acquisition related expenses
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 67,802 | | | | | | 67,802 | | |
Amortization of intangible assets
|
| | | | 21,271 | | | | | | 15,943 | | | | | | 5,328 | | | | | | 5,354 | | | | | | 751 | | | | | | 11,433 | | |
Total operating expenses
|
| | | | 294,255 | | | | | | 218,553 | | | | | | 75,702 | | | | | | 76,029 | | | | | | 79,242 | | | | | | 230,973 | | |
Income from operations
|
| | | | 174,258 | | | | | | 139,826 | | | | | | 34,432 | | | | | | 12,021 | | | | | | (64,323 ) | | | | | | (17,870 ) | | |
Foreign currency gain (loss)
|
| | | | 1,363 | | | | | | 1,582 | | | | | | (219 ) | | | | | | (741 ) | | | | | | 609 | | | | | | (351 ) | | |
Interest expense
|
| | | | (69,361 ) | | | | | | (51,830 ) | | | | | | (17,531 ) | | | | | | (16,455 ) | | | | | | (2,599 ) | | | | | | (36,585 ) | | |
Interest income
|
| | | | 78 | | | | | | 60 | | | | | | 18 | | | | | | 20 | | | | | | 2 | | | | | | 40 | | |
Tax receivable agreement liability adjustment
|
| | | | 10,749 | | | | | | — | | | | | | 10,749 | | | | | | — | | | | | | (5,237 ) | | | | | | 5,512 | | |
Loss on modification or extinguishment
of debt |
| | | | (2,106 ) | | | | | | — | | | | | | (2,106 ) | | | | | | — | | | | | | — | | | | | | (2,106 ) | | |
Income (loss) before provision (benefit) for income taxes
|
| | | | 114,981 | | | | | | 89,638 | | | | | | 25,343 | | | | | | (5,155 ) | | | | | | (71,548 ) | | | | | | (51,360 ) | | |
Provision (benefit) for income taxes
|
| | | | 46,654 | | | | | | 35,882 | | | | | | 10,772 | | | | | | (592 ) | | | | | | (9,331 ) | | | | | | 849 | | |
Net income (loss)
|
| | | $ | 68,327 | | | | | $ | 53,756 | | | | | $ | 14,571 | | | | | $ | (4,563 ) | | | | | $ | (62,217 ) | | | | | $ | (52,209 ) | | |
(dollars in thousands)
|
| |
Year ended
December 31, 2017 |
| |
Nine months
ended September 30, 2017 |
| |
Three months
ended December 31, 2017 |
| |
Three months
ended March 31, 2018 |
| |
April 1, 2018
to April 12, 2018 |
| |
October 1, 2017
to April 12, 2018 |
| ||||||||||||||||||
Net sales
|
| | | $ | 348,844 | | | | | $ | 257,113 | | | | | $ | 91,731 | | | | | $ | 72,369 | | | | | $ | 13,021 | | | | | $ | 177,121 | | |
Cost of products sold
|
| | | | 234,451 | | | | | | 173,824 | | | | | | 60,627 | | | | | | 50,873 | | | | | | 9,380 | | | | | | 120,880 | | |
Gross profit
|
| | | | 114,393 | | | | | | 83,289 | | | | | | 31,104 | | | | | | 21,496 | | | | | | 3,641 | | | | | | 56,241 | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Selling, delivery, general, and administrative
|
| | | | 67,572 | | | | | | 50,208 | | | | | | 17,364 | | | | | | 16,694 | | | | | | 2,452 | | | | | | 36,510 | | |
Acquisition-related costs
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 8,281 | | | | | | 8,281 | | |
Amortization expense
|
| | | | 6,723 | | | | | | 4,997 | | | | | | 1,726 | | | | | | 1,722 | | | | | | 229 | | | | | | 3,677 | | |
Stock compensation expense
|
| | | | 1 | | | | | | 1 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total selling, delivery, general and administrative expenses
|
| | | | 74,296 | | | | | | 55,206 | | | | | | 19,090 | | | | | | 18,416 | | | | | | 10,962 | | | | | | 48,468 | | |
Impairment of trade name
|
| | | | 1,560 | | | | | | — | | | | | | 1,560 | | | | | | — | | | | | | — | | | | | | 1,560 | | |
Loss on disposal of assets, net
|
| | | | (239 ) | | | | | | (228 ) | | | | | | (11 ) | | | | | | — | | | | | | — | | | | | | (11 ) | | |
Total operating expenses
|
| | | | 75,617 | | | | | | 54,978 | | | | | | 20,639 | | | | | | 18,416 | | | | | | 10,962 | | | | | | 50,017 | | |
Operating income from continuing operations
|
| | | | 38,776 | | | | | | 28,311 | | | | | | 10,465 | | | | | | 3,080 | | | | | | (7,321 ) | | | | | | 6,224 | | |
Interest expense
|
| | | | 35,903 | | | | | | 20,259 | | | | | | 15,644 | | | | | | 9,050 | | | | | | 2,398 | | | | | | 27,092 | | |
Interest income
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 26 | | | | | | 26 | | |
Other expense, net
|
| | | | 226 | | | | | | 167 | | | | | | 59 | | | | | | 61 | | | | | | — | | | | | | 120 | | |
Income (loss) from continuing operations
before income taxes |
| | | | 2,647 | | | | | | 7,885 | | | | | | (5,238 ) | | | | | | (6,031 ) | | | | | | (9,693 ) | | | | | | (20,962 ) | | |
Provision (benefit) for income tax
|
| | | | 1,521 | | | | | | 1,880 | | | | | | (359 ) | | | | | | (464 ) | | | | | | 64 | | | | | | (759 ) | | |
Net income (loss) from continuing operations
|
| | | $ | 1,126 | | | | | $ | 6,005 | | | | | $ | (4,879 ) | | | | | $ | (5,567 ) | | | | | $ | (9,757 ) | | | | | $ | (20,203 ) | | |
(dollars in thousands)
Presentation in Atrium’s Historical Financial Statements |
| |
Presentation in Unaudited Pro Forma Condensed
Combined Financial Statements |
| |
Year Ended
December 31, 2017 |
| |
October 1,
2017 to April 12, 2018 |
| ||||||
Cost of goods sold | | | Cost of products sold | | | | $ | 234,451 | | | | | $ | 120,880 | | |
Selling, delivery, general and administrative expenses (Delivery expenses) | | | Cost of products sold | | | | | 23,701 | | | | | | 12,087 | | |
Selling, delivery, general and administrative expenses | | | Selling, general and administrative expenses | | | | | 45,392 | | | | | | 25,883 | | |
Amortization expense | | | Amortization of intangible assets | | | | | 6,723 | | | | | | 3,677 | | |
Stock compensation expense | | | Selling, general and administrative expenses | | | | | 1 | | | | | | — | | |
Impairment of trade names | | | Selling, general and administrative expenses | | | | | 1,560 | | | | | | 1,560 | | |
(Gain) Loss on disposal of assets, net | | | Selling, general and administrative expenses | | | | | (239 ) | | | | | | (11 ) | | |
Other expense, net | | | Selling, general and administrative expenses | | | | | 199 | | | | | | (89 ) | | |
Other expense, net (Realized Gains/Losses) | | | Foreign currency gain (loss) | | | | | (46 ) | | | | | | (237 ) | | |
Other expense, net (Interest income) | | | Interest income | | | | | 19 | | | | | | 28 | | |
Income tax expense | | | Provision (benefit) for income taxes | | | | | 1,521 | | | | | | (759 ) | | |
Description
|
| |
Estimated
Fair Value |
| |
Estimated
Remaining Useful Life |
| |||
Land
|
| | | $ | 7,007 | | | |
N/A
|
|
Building and site improvements
|
| | | | 71,788 | | | |
15 years
|
|
Construction in progress
|
| | | | 30,768 | | | |
N/A
|
|
Personal property
|
| | | | 192,400 | | | |
7 years
|
|
Total
|
| | | $ | 301,963 | | | | | |
|
(dollars in thousands)
|
| |
Year ended
December 31, 2017 |
| |
Nine months
ended June 30, 2018 |
| ||||||
Total Depreciation expense for property and equipment, net
|
| | | $ | 32,272 | | | | | $ | 24,204 | | |
Elimination of pre-acquisition historical depreciation expense | | | | | | | | | | | | | |
Ply Gem (Successor)
|
| | | | | | | | | | (6,985 ) | | |
Ply Gem (Predecessor)
|
| | | | (31,976 ) | | | | | | (17,296 ) | | |
Atrium
|
| | | | (6,701 ) | | | | | | (3,577 ) | | |
Net adjustments to depreciation expense
|
| | | $ | (6,405 ) | | | | | $ | (3,654 ) | | |
Allocation of adjustments: | | | | | | | | | | | | | |
Cost of products sold
|
| | | | (5,173 ) | | | | | | (2,953 ) | | |
Selling, general and administrative expenses
|
| | | | (1,232 ) | | | | | | (701 ) | | |
Total
|
| | | $ | (6,405 ) | | | | | $ | (3,654 ) | | |
|
(dollars in thousands)
|
| |
Year ended
December 31, 2017 |
| |
Nine months
ended June 30, 2018 |
| ||||||
Total Amortization expense for intangible assets
|
| | | $ | 112,640 | | | | | $ | 84,480 | | |
Elimination of pre-acquisition historical amortization expense | | | | | | | | | | | | | |
Ply Gem (Successor)
|
| | | | | | | | | | (24,096 ) | | |
Ply Gem (Predecessor)
|
| | | | (21,271 ) | | | | | | (11,433 ) | | |
Atrium
|
| | | | (6,723 ) | | | | | | (3,677 ) | | |
Net adjustments to amortization expense
|
| | | $ | 84,646 | | | | | $ | 45,274 | | |
|
(dollars in thousands)
|
| |
Year ended
December 31, 2017 |
| |
Nine months
ended June 30, 2018 |
| ||||||
Cash interest expense
|
| | | $ | 163,762 | | | | | $ | 122,326 | | |
Amortization of debt issuance cost
|
| | | | 9,770 | | | | | | 7,557 | | |
Amortization of original issue discount
|
| | | | 1,062 | | | | | | 822 | | |
Total pro forma interest expense on new debt
|
| | | $ | 174,594 | | | | | $ | 130,705 | | |
Less: interest expense on new debt already recorded (successor debt)
|
| | | | — | | | | | | (43,680 ) | | |
Net adjustment to Interest Expense
|
| | | $ | 174,594 | | | | | $ | 87,025 | | |
|
(dollars in thousands)
|
| |
Principal
Amount |
| |
Amount
Drawn |
| |
Capacity
|
| |
Coupon
Rate plus Libor – Drawn |
| |
Undrawn
Fee |
| |
Year ended
December 31, 2017 |
| |
Nine months
ended June 30, 2018 |
| |||||||||||||||||||||
ABL and Cash Flows Revolvers
|
| | | | N/A | | | | | $ | 130,000 | | | | | $ | 360,000 | | | | | | 3.83 % | | | | | | 0.25 % | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | $ | 115,000 | | | | | | 5.33 % | | | | | | 0.50 % | | | | | | | | | | |||||
Cash interest expense
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 6,131 | | | | | $ | 4,598 | | |
Original issue discount amortization
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | — | | | | | | — | | |
Deferred financing costs amortization
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1,712 | | | | | | 1,284 | | |
Total
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 7,843 | | | | | $ | 5,882 | | |
Term Loan
|
| | | $ | 1,755,000 | | | | | | N/A | | | | | | N/A | | | | | | 6.08 % | | | | | | N/A | | | | | | | | | | | | | | |
Cash interest expense
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 106,031 | | | | | $ | 79,028 | | |
Original issue discount amortization
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1,062 | | | | | | 822 | | |
Deferred financing costs amortization
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 5,625 | | | | | | 4,355 | | |
Total
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 112,718 | | | | | $ | 84,205 | | |
Senior notes
|
| | | $ | 645,000 | | | | | | N/A | | | | | | N/A | | | | | | 8.00 % | | | | | | N/A | | | | | | | | | | | | | | |
Cash interest expense
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 51,600 | | | | | $ | 38,700 | | |
Original issue discount amortization
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | — | | | | | | — | | |
Deferred financing costs amortization
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2,433 | | | | | | 1,918 | | |
Total
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 54,033 | | | | | $ | 40,618 | | |
Total interest expense
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 174,594 | | | | | $ | 130,705 | | |
|
| | |
Beneficial Ownership
(1)
|
| |||||||||
Name of Beneficial Owner or Group
|
| |
Number of Shares
Common Stock |
| |
Percent
|
| ||||||
Clayton Dubilier & Rice Fund VIII, L.P.
(2)
|
| | | | 22,744,822 | | | | | | 34.36 | | |
CD&R Friends & Family Fund VIII, L.P.
(2)
|
| | | | 56,941 | | | | | | * | | |
Kathleen J. Affeldt
(3)
|
| | | | 32,736 | | | | | | * | | |
George L. Ball
(3)
|
| | | | 70,211 | | | | | | * | | |
James G. Berges
(3)(4)
|
| | | | 34,630 | | | | | | * | | |
Gary L. Forbes
(3)
|
| | | | 62,273 | | | | | | * | | |
John J. Holland
(3)
|
| | | | 16,000 | | | | | | * | | |
Lawrence J. Kremer
(3)
|
| | | | 30,014 | | | | | | * | | |
John L. Kuzdal
(3)
|
| | | | 91,989 | | | | | | * | | |
George Martinez
(3)
|
| | | | 51,345 | | | | | | * | | |
James S. Metcalf
(3)
|
| | | | 30,000 | | | | | | * | | |
Todd R. Moore
(3)
|
| | | | 35,639 | | | | | | * | | |
Donald R. Riley
(3)
|
| | | | 72,603 | | | | | | * | | |
Nathan K. Sleeper
(3)(4)
|
| | | | 34,630 | | | | | | * | | |
Katy K. Theroux
(3)
|
| | | | 20,428 | | | | | | * | | |
William R. VanArsdale
(3)
|
| | | | 0 | | | | | | * | | |
Jonathan L. Zrebiec
(3)(4)
|
| | | | 34,630 | | | | | | * | | |
All directors and executive officers as a group (19 persons)
(4)(5)
|
| | | | 545,126 | | | | | | 0.82 | | |
| | |
Options
|
| |
Unvested
Restricted Stock (included in the table above) |
| |
Unvested
Restricted Stock Units (not included in the table above) |
| |||||||||||||||
| | |
Exercisable
(included in the table above) |
| |
Not Exercisable
Within 60 Days (not included in the table above) |
| ||||||||||||||||||
Kathleen J. Affeldt
|
| | | | — | | | | | | — | | | | | | 879 | | | | | | 5,580 | | |
George L. Ball
|
| | | | — | | | | | | — | | | | | | 879 | | | | | | 5,580 | | |
James G. Berges
(4)
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Gary L. Forbes
|
| | | | 12,405 | | | | | | 1,758 | | | | | | — | | | | | | 5,580 | | |
John J. Holland
|
| | | | 36,380 | | | | | | 879 | | | | | | 440 | | | | | | 5,580 | | |
Lawrence J. Kremer
|
| | | | 9,234 | | | | | | — | | | | | | 879 | | | | | | 5,580 | | |
John L. Kuzdal
|
| | | | 150,148 | | | | | | — | | | | | | — | | | | | | 27,433 | | |
George Martinez
|
| | | | — | | | | | | — | | | | | | 879 | | | | | | 5,580 | | |
James Metcalf
|
| | | | — | | | | | | — | | | | | | — | | | | | | 11,159 | | |
Todd R. Moore
|
| | | | — | | | | | | — | | | | | | — | | | | | | 25,214 | | |
Donald R. Riley
|
| | | | — | | | | | | — | | | | | | 5,513 | | | | | | 87,421 | | |
Nathan K. Sleeper
(4)
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Katy K. Theroux
|
| | | | — | | | | | | — | | | | | | 1,900 | | | | | | 26,988 | | |
William R. VanArsdale
|
| | | | — | | | | | | — | | | | | | — | | | | | | 5,580 | | |
Jonathan L. Zrebiec
(4)
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | |
Options
|
| |
Unvested
Restricted Stock (included in the table above) |
| |
Unvested
Restricted Stock Units (not included in the table above) |
| |||||||||||||||
| | |
Exercisable
(included in the table above) |
| |
Not Exercisable
Within 60 Days (not included in the table above) |
| ||||||||||||||||||
Bradley S. Little
|
| | | | — | | | | | | — | | | | | | — | | | | | | 17,079 | | |
Robert D. Ronchetto
|
| | | | — | | | | | | — | | | | | | — | | | | | | 14,811 | | |
NCI SEC Filings (File No. 001-32367)
|
| |
Period or File Date
|
|
Annual Report on Form 10-K | | | Year ended October 29, 2017 | |
Quarterly Reports on Form 10-Q | | | Quarterly periods ended January 28, 2018, April 29, 2018 and July 29, 2018 | |
Current Reports on Form 8-K and 8-K/A | | | Filed on June 20, 2018, July 18, 2018, July 19, 2018, July 31, 2018, August 7, 2018 and August 28, 2018 | |
| | | | | F-3 | | | |
| Audited Financial Statements: | | | |||||
| | | | | F-4 | | | |
| | | | | F-5 | | | |
| | | | | F-6 | | | |
| | | | | F-7 | | | |
| | | | | F-8 | | | |
| | | | | F-9 | | | |
| | | | | F-57 | | | |
| Unaudited Financial Statements: | | | |||||
| | | | | F-85 | | | |
| | | | | F-86 | | | |
| | | | | F-87 | | | |
| | | | | F-88 | | | |
| | | | | F-89 | | | |
| | | | | F-121 | | | |
| | | | | F-143 | | | |
| | | | | F-144 | | | |
| Atrium Corporation | | | |||||
| | | | | F-146 | | | |
| Audited Financial Statements: | | | |||||
| | | | | F-147 | | | |
| | | | | F-148 | | | |
| | | | | F-149 | | | |
| | | | | F-150 | | | |
| | | | | F-151 | | | |
| | | | | F-174 | | | |
| | | | | F-187 | | |
(Amounts in thousands, except share and per share data)
|
| |
For the Year Ended December 31,
|
| |||||||||||||||
| | |
2017
|
| |
2016
|
| |
2015
|
| |||||||||
Net sales
|
| | | $ | 2,056,303 | | | | | $ | 1,911,844 | | | | | $ | 1,839,726 | | |
Cost of products sold
|
| | | | 1,587,790 | | | | | | 1,449,570 | | | | | | 1,420,014 | | |
Gross profit
|
| | | | 468,513 | | | | | | 462,274 | | | | | | 419,712 | | |
Operating expenses: | | | | | |||||||||||||||
Selling, general and administrative expenses
|
| | | | 272,984 | | | | | | 268,714 | | | | | | 271,874 | | |
Amortization of intangible assets
|
| | | | 21,271 | | | | | | 25,064 | | | | | | 25,306 | | |
Total operating expenses
|
| | | | 294,255 | | | | | | 293,778 | | | | | | 297,180 | | |
Operating earnings
|
| | | | 174,258 | | | | | | 168,496 | | | | | | 122,532 | | |
Foreign currency gain (loss)
|
| | | | 1,363 | | | | | | 299 | | | | | | (3,166 ) | | |
Interest expense
|
| | | | (69,361 ) | | | | | | (72,718 ) | | | | | | (74,876 ) | | |
Interest income
|
| | | | 78 | | | | | | 36 | | | | | | 57 | | |
Tax receivable agreement liability adjustment
|
| | | | 10,749 | | | | | | (60,874 ) | | | | | | (12,947 ) | | |
Loss on modification or extinguishment of debt
|
| | | | (2,106 ) | | | | | | (11,747 ) | | | | | | — | | |
Income before provision (benefit) for income taxes
|
| | | | 114,981 | | | | | | 23,492 | | | | | | 31,600 | | |
Provision (benefit) for income taxes
|
| | | | 46,654 | | | | | | (51,995 ) | | | | | | (688 ) | | |
Net income
|
| | | $ | 68,327 | | | | | $ | 75,487 | | | | | $ | 32,288 | | |
Net income attributable to common shareholders: | | | | | |||||||||||||||
Basic
|
| | | $ | 1.00 | | | | | $ | 1.11 | | | | | $ | 0.47 | | |
Diluted
|
| | | $ | 0.99 | | | | | $ | 1.10 | | | | | $ | 0.47 | | |
Weighted average shares outstanding: | | | | | |||||||||||||||
Basic
|
| | | | 68,443,480 | | | | | | 68,176,801 | | | | | | 68,003,564 | | |
Diluted
|
| | | | 69,006,968 | | | | | | 68,324,146 | | | | | | 68,106,493 | | |
(Amounts in thousands)
|
| |
For the Year Ended December 31,
|
| |||||||||||||||
| | |
2017
|
| |
2016
|
| |
2015
|
| |||||||||
Net income
|
| | | $ | 68,327 | | | | | $ | 75,487 | | | | | $ | 32,288 | | |
Other comprehensive income (loss), net of tax: | | | | | |||||||||||||||
Currency translation
|
| | | | 3,765 | | | | | | 2,950 | | | | | | (14,690 ) | | |
Unrealized gain (loss) on derivative instruments
|
| | | | (853 ) | | | | | | 29 | | | | | | (465 ) | | |
Minimum pension liability for actuarial gain (loss)
|
| | | | 610 | | | | | | 295 | | | | | | (1,436 ) | | |
Other comprehensive income (loss)
|
| | | | 3,522 | | | | | | 3,274 | | | | | | (16,591 ) | | |
Comprehensive income
|
| | | $ | 71,849 | | | | | $ | 78,761 | | | | | $ | 15,697 | | |
|
(Amounts in thousands, except share amounts)
|
| |
December 31, 2017
|
| |
December 31, 2016
|
| ||||||
ASSETS
|
| | | ||||||||||
Current Assets: | | | | ||||||||||
Cash and cash equivalents
|
| | | $ | 71,416 | | | | | $ | 51,597 | | |
Accounts receivable, less allowances of $3,137 and $2,663, respectively
|
| | | | 249,533 | | | | | | 209,919 | | |
Inventories: | | | | ||||||||||
Raw materials
|
| | | | 79,330 | | | | | | 69,639 | | |
Work in process
|
| | | | 36,440 | | | | | | 24,621 | | |
Finished goods
|
| | | | 80,721 | | | | | | 67,696 | | |
Total inventory
|
| | | | 196,491 | | | | | | 161,956 | | |
Prepaid expenses and other current assets
|
| | | | 45,900 | | | | | | 26,850 | | |
Total current assets
|
| | | | 563,340 | | | | | | 450,322 | | |
Property and Equipment, at cost: | | | | ||||||||||
Land
|
| | | | 8,229 | | | | | | 8,249 | | |
Buildings and improvements
|
| | | | 68,005 | | | | | | 67,951 | | |
Machinery and equipment
|
| | | | 450,554 | | | | | | 413,565 | | |
Total property and equipment
|
| | | | 526,788 | | | | | | 489,765 | | |
Less accumulated depreciation
|
| | | | (352,256 ) | | | | | | (324,209 ) | | |
Total property and equipment, net
|
| | | | 174,532 | | | | | | 165,556 | | |
Other Assets: | | | | ||||||||||
Intangible assets, net
|
| | | | 83,675 | | | | | | 104,159 | | |
Goodwill
|
| | | | 480,563 | | | | | | 478,514 | | |
Deferred income taxes
|
| | | | 10,523 | | | | | | 50,347 | | |
Other
|
| | | | 6,934 | | | | | | 8,843 | | |
Total other assets
|
| | | | 581,695 | | | | | | 641,863 | | |
| | | | $ | 1,319,567 | | | | | $ | 1,257,741 | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
| | | ||||||||||
Current Liabilities: | | | | ||||||||||
Accounts payable
|
| | | $ | 85,720 | | | | | $ | 75,398 | | |
Accrued expenses
|
| | | | 185,857 | | | | | | 169,015 | | |
Current portion of payable to related parties pursuant to tax receivable agreement
|
| | | | 51,356 | | | | | | 25,383 | | |
Current portion of long term debt
|
| | | | 4,300 | | | | | | 4,300 | | |
Total current liabilities
|
| | | | 327,233 | | | | | | 274,096 | | |
Deferred income taxes
|
| | | | 1,530 | | | | | | 2,722 | | |
Long-term portion of payable to related parties pursuant to tax receivable
agreement |
| | | | 18,125 | | | | | | 54,336 | | |
Other long-term liabilities
|
| | | | 83,424 | | | | | | 86,395 | | |
Long-term debt
|
| | | | 807,334 | | | | | | 836,086 | | |
Commitments and contingencies
|
| | | ||||||||||
Stockholders’ Equity | | | | ||||||||||
Preferred stock $0.01 par, 50,000,000 shares authorized, none issued and outstanding
|
| | | | — | | | | | | — | | |
Common stock $0.01 par, 250,000,000 shares authorized, 68,515,697 and 68,269,749 issued and outstanding, respectively
|
| | | | 685 | | | | | | 683 | | |
Additional paid-in-capital
|
| | | | 756,096 | | | | | | 751,452 | | |
Accumulated deficit
|
| | | | (645,090 ) | | | | | | (714,737 ) | | |
Accumulated other comprehensive loss
|
| | | | (29,770 ) | | | | | | (33,292 ) | | |
Total stockholders’ equity
|
| | | | 81,921 | | | | | | 4,106 | | |
| | | | $ | 1,319,567 | | | | | $ | 1,257,741 | | |
(Amounts in thousands)
|
| |
For the Year Ended December 31,
|
| |||||||||||||||
| | |
2017
|
| |
2016
|
| |
2015
|
| |||||||||
Cash flows from operating activities: | | | | | |||||||||||||||
Net income
|
| | | $ | 68,327 | | | | | $ | 75,487 | | | | | $ | 32,288 | | |
Adjustments to reconcile net income to cash provided by operating activities | | | | | |||||||||||||||
Depreciation and amortization expense
|
| | | | 53,247 | | | | | | 56,403 | | | | | | 58,400 | | |
Fair-value premium on purchased inventory
|
| | | | — | | | | | | — | | | | | | 54 | | |
Non-cash restructuring costs
|
| | | | 1,321 | | | | | | 427 | | | | | | 704 | | |
Non-cash interest expense, net
|
| | | | 14,044 | | | | | | 13,710 | | | | | | 13,380 | | |
(Gain) loss on foreign currency transactions
|
| | | | (1,363 ) | | | | | | (299 ) | | | | | | 3,166 | | |
Non-cash litigation expense
|
| | | | 650 | | | | | | 1,875 | | | | | | — | | |
Loss on modification or extinguishment of debt
|
| | | | 2,106 | | | | | | 11,747 | | | | | | — | | |
Stock based compensation
|
| | | | 1,345 | | | | | | 1,067 | | | | | | 1,960 | | |
Deferred income taxes
|
| | | | 39,623 | | | | | | (57,989 ) | | | | | | (4,901 ) | | |
Tax receivable agreement liability adjustment
|
| | | | (10,749 ) | | | | | | 60,874 | | | | | | 12,947 | | |
Increase (reduction) in tax uncertainty, net of valuation allowance
|
| | | | 604 | | | | | | 1,059 | | | | | | (199 ) | | |
(Gain) loss on sale of building
|
| | | | (1,880 ) | | | | | | — | | | | | | — | | |
Other
|
| | | | (175 ) | | | | | | (190 ) | | | | | | (28 ) | | |
Changes in operating assets and liabilities: | | | | | |||||||||||||||
Accounts receivable, net
|
| | | | (39,431 ) | | | | | | (14,709 ) | | | | | | (4,562 ) | | |
Inventories
|
| | | | (34,483 ) | | | | | | (11,542 ) | | | | | | 29,921 | | |
Prepaid expenses and other assets
|
| | | | (2,066 ) | | | | | | (2,967 ) | | | | | | 6,729 | | |
Accounts payable
|
| | | | 10,473 | | | | | | 945 | | | | | | (10,563 ) | | |
Accrued expenses
|
| | | | (8,450 ) | | | | | | 9,037 | | | | | | 3,336 | | |
Cash payments on restructuring liabilities
|
| | | | (983 ) | | | | | | (540 ) | | | | | | (1,645 ) | | |
Insurance proceeds in advance of settlement
|
| | | | 8,725 | | | | | | — | | | | | | — | | |
Other
|
| | | | 1,043 | | | | | | 647 | | | | | | (1,624 ) | | |
Net cash provided by operating activities
|
| | | | 101,928 | | | | | | 145,042 | | | | | | 139,363 | | |
Cash flows from investing activities: | | | | | |||||||||||||||
Acquisitions, net of cash acquired and outstanding checks assumed
|
| | | | — | | | | | | — | | | | | | (21,000 ) | | |
Capital expenditures
|
| | | | (40,386 ) | | | | | | (36,001 ) | | | | | | (33,860 ) | | |
Proceeds from sale of assets
|
| | | | 2,514 | | | | | | 183 | | | | | | 122 | | |
Net cash used in investing activities
|
| | | | (37,872 ) | | | | | | (35,818 ) | | | | | | (54,738 ) | | |
Cash flows from financing activities: | | | | | |||||||||||||||
Payments on long-term debt
|
| | | | (44,300 ) | | | | | | (164,300 ) | | | | | | (4,300 ) | | |
Payments to tax authority for employee stock based compensation
|
| | | | (1,186 ) | | | | | | — | | | | | | — | | |
Proceeds from exercises of employee stock options
|
| | | | 1,203 | | | | | | 1,091 | | | | | | 2,198 | | |
Cash payments on tax receivable agreement
|
| | | | — | | | | | | (4,971 ) | | | | | | (48 ) | | |
Debt issuance costs paid
|
| | | | — | | | | | | — | | | | | | (1,412 ) | | |
Net cash used in financing activities
|
| | | | (44,283 ) | | | | | | (168,180 ) | | | | | | (3,562 ) | | |
Impact of exchange rate movements on cash
|
| | | | 46 | | | | | | 1,128 | | | | | | (4,800 ) | | |
Net cash increase (decrease) in cash and cash equivalents
|
| | | | 19,819 | | | | | | (57,828 ) | | | | | | 76,263 | | |
Cash and cash equivalents at the beginning of the period
|
| | | | 51,597 | | | | | | 109,425 | | | | | | 33,162 | | |
Cash and cash equivalents at the end of the period
|
| | | $ | 71,416 | | | | | $ | 51,597 | | | | | $ | 109,425 | | |
Supplemental Information | | | | | |||||||||||||||
Interest paid
|
| | | $ | 54,677 | | | | | $ | 58,745 | | | | | $ | 60,070 | | |
Income taxes paid, net
|
| | | $ | 7,169 | | | | | $ | 7,024 | | | | | $ | 2,607 | | |
(Amounts in thousands)
|
| |
Common Stock
|
| |
Additional
Paid-in- Capital |
| |
Accumulated
Deficit |
| |
Accumulated
Other Comprehensive Income (Loss) |
| |
Total
Stockholders’ Equity (Deficit) |
| |||||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| ||||||||||||||||||||||||||||||
Balance, December 31, 2014
|
| | | | 67,877,587 | | | | | $ | 679 | | | | | $ | 745,140 | | | | | $ | (822,512 ) | | | | | $ | (19,975 ) | | | | | $ | (96,668 ) | | |
Comprehensive loss: | | | | | | | | ||||||||||||||||||||||||||||||
Net income
|
| | | | — | | | | | | — | | | | | | — | | | | | | 32,288 | | | | | | — | | | | | | 32,288 | | |
Other comprehensive loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (16,591 ) | | | | | | (16,591 ) | | |
Stock compensation
|
| | | | — | | | | | | — | | | | | | 1,960 | | | | | | — | | | | | | — | | | | | | 1,960 | | |
Stock option exercises
|
| | | | 249,904 | | | | | | 2 | | | | | | 2,196 | | | | | | — | | | | | | — | | | | | | 2,198 | | |
Balance, December 31, 2015
|
| | | | 68,127,491 | | | | | $ | 681 | | | | | $ | 749,296 | | | | | $ | (790,224 ) | | | | | $ | (36,566 ) | | | | | $ | (76,813 ) | | |
Comprehensive income: | | | | | | | | ||||||||||||||||||||||||||||||
Net income
|
| | | | — | | | | | | — | | | | | | — | | | | | | 75,487 | | | | | | — | | | | | | 75,487 | | |
Other comprehensive income
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 3,274 | | | | | | 3,274 | | |
Stock compensation
|
| | | | — | | | | | | — | | | | | | 1,067 | | | | | | — | | | | | | — | | | | | | 1,067 | | |
Stock option exercises
|
| | | | 142,258 | | | | | | 2 | | | | | | 1,089 | | | | | | — | | | | | | — | | | | | | 1,091 | | |
Balance, December 31, 2016
|
| | | | 68,269,749 | | | | | $ | 683 | | | | | $ | 751,452 | | | | | $ | (714,737 ) | | | | | $ | (33,292 ) | | | | | $ | 4,106 | | |
Comprehensive income: | | | | | | | | ||||||||||||||||||||||||||||||
Net income
|
| | | | — | | | | | | — | | | | | | — | | | | | | 68,327 | | | | | | — | | | | | | 68,327 | | |
Other comprehensive income
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 3,522 | | | | | | 3,522 | | |
Stock compensation
|
| | | | — | | | | | | — | | | | | | 1,345 | | | | | | — | | | | | | — | | | | | | 1,345 | | |
Cumulative-effect adjustment from adoption of ASU 2016-09
|
| | | | — | | | | | | — | | | | | | — | | | | | | 1,320 | | | | | | — | | | | | | 1,320 | | |
Stock issued pursuant to the Long-Term Incentive Plan
|
| | | | 129,176 | | | | | | 1 | | | | | | 2,097 | | | | | | — | | | | | | — | | | | | | 2,098 | | |
Stock option exercises
|
| | | | 116,772 | | | | | | 1 | | | | | | 1,202 | | | | | | — | | | | | | — | | | | | | 1,203 | | |
Balance, December 31, 2017
|
| | | | 68,515,697 | | | | | $ | 685 | | | | | $ | 756,096 | | | | | $ | (645,090 ) | | | | | $ | (29,770 ) | | | | | $ | 81,921 | | |
|
| Buildings and improvements | | | 10 – 37 years | |
| Machinery and equipment, including leases | | | 3 – 15 years | |
| Leasehold improvements | | |
Term of lease or useful life, whichever is shorter
|
|
(Amounts in thousands)
|
| |
December 31,
2017 |
| |
December 31,
2016 |
| ||||||
Foreign currency hedge (included in other assets)
|
| | | $ | 6 | | | | | $ | 962 | | |
Description
(Amounts in thousands)
|
| |
Carrying
Value |
| |
Fair
Value Total |
| |
Quoted Prices
in Active Markets for Identical Assets (Level 1) |
| |
Significant
Other Observable Inputs (Level 2) |
| |
Significant
Unobservable Inputs (Level 3) |
| |||||||||||||||
Liabilities: | | | | | | | |||||||||||||||||||||||||
Senior Notes – 6.50%
|
| | | $ | 650,000 | | | | | $ | 671,970 | | | | | $ | 671,970 | | | | | $ | — | | | | | $ | — | | |
Term Loan Facility
|
| | | | 213,875 | | | | | | 215,479 | | | | | | — | | | | | | 215,479 | | | | | | — | | |
As of December 31, 2017
|
| | | $ | 863,875 | | | | | $ | 887,449 | | | | | $ | 671,970 | | | | | $ | 215,479 | | | | | $ | — | | |
Liabilities: | | | | | | | |||||||||||||||||||||||||
Senior Notes – 6.50%
|
| | | $ | 650,000 | | | | | $ | 676,000 | | | | | $ | 676,000 | | | | | $ | — | | | | | $ | — | | |
Term Loan Facility
|
| | | | 258,175 | | | | | | 260,757 | | | | | | — | | | | | | 260,757 | | | | | | — | | |
As of December 31, 2016
|
| | | $ | 908,175 | | | | | $ | 936,757 | | | | | $ | 676,000 | | | | | $ | 260,757 | | | | | $ | — | | |
|
(Amounts in thousands)
|
| |
Foreign currency
translation |
| |
Unrealized gain
(loss) on derivative instruments |
| |
Minimum
pension liability adjustments |
| |
Accumulated
other comprehensive (loss) income |
| ||||||||||||
Balance, December 31, 2014
|
| | | $ | (6,731 ) | | | | | $ | 1,294 | | | | | $ | (14,538 ) | | | | | $ | (19,975 ) | | |
Net current period change
|
| | | | (14,690 ) | | | | | | (465 ) | | | | | | (1,436 ) | | | | | | (16,591 ) | | |
Balance, December 31, 2015
|
| | | | (21,421 ) | | | | | | 829 | | | | | | (15,974 ) | | | | | | (36,566 ) | | |
Net current period change
|
| | | | 2,950 | | | | | | 29 | | | | | | 295 | | | | | | 3,274 | | |
Balance, December 31, 2016
|
| | | | (18,471 ) | | | | | | 858 | | | | | | (15,679 ) | | | | | | (33,292 ) | | |
Net current period change
|
| | | | 3,765 | | | | | | (853 ) | | | | | | 610 | | | | | | 3,522 | | |
Balance, December 31, 2017
|
| | | $ | (14,706 ) | | | | | $ | 5 | | | | | $ | (15,069 ) | | | | | $ | (29,770 ) | | |
|
(Amounts in thousands) (Unaudited)
|
| |
December 31,
2015 |
| |||
Net sales
|
| | | $ | 1,850,993 | | |
Net income
|
| | | | 32,712 | | |
(Amounts in thousands)
|
| |
December 31,
2017 |
| |
December 31,
2016 |
| ||||||
Siding, Fencing and Stone
|
| | | $ | 349,954 | | | | | $ | 348,553 | | |
Windows and Doors
|
| | | | 130,609 | | | | | | 129,961 | | |
| | | | $ | 480,563 | | | | | $ | 478,514 | | |
|
(Amounts in thousands)
|
| |
Windows and
Doors |
| |
Siding, Fencing
and Stone |
| ||||||
Balance as of January 1, 2016 | | | | ||||||||||
Goodwill
|
| | | $ | 457,554 | | | | | $ | 470,185 | | |
Accumulated impairment losses
|
| | | | (327,773 ) | | | | | | (122,227 ) | | |
| | | | $ | 129,781 | | | | | $ | 347,958 | | |
Currency translation adjustments
|
| | | | 180 | | | | | | 595 | | |
Balance as of December 31, 2016 | | | | ||||||||||
Goodwill
|
| | | | 457,734 | | | | | | 470,780 | | |
Accumulated impairment losses
|
| | | | (327,773 ) | | | | | | (122,227 ) | | |
| | | | $ | 129,961 | | | | | $ | 348,553 | | |
Currency translation adjustments
|
| | | | 648 | | | | | | 1,401 | | |
Balance as of December 31, 2017 | | | | ||||||||||
Goodwill
|
| | | | 458,382 | | | | | | 472,181 | | |
Accumulated impairment losses
|
| | | | (327,773 ) | | | | | | (122,227 ) | | |
| | | | $ | 130,609 | | | | | $ | 349,954 | | |
|
(Amounts in thousands)
|
| |
Average
Amortization Period (in Years) |
| |
Cost
|
| |
Accumulated
Amortization |
| |
Net Carrying
Value |
| ||||||||||||
As of December 31, 2017 | | | | | | ||||||||||||||||||||
Patents
|
| | | | 14 | | | | | $ | 12,770 | | | | | $ | (12,261 ) | | | | | $ | 509 | | |
Trademarks/Tradenames
|
| | | | 12 | | | | | | 117,473 | | | | | | (88,853 ) | | | | | | 28,620 | | |
Customer relationships
|
| | | | 13 | | | | | | 219,614 | | | | | | (166,086 ) | | | | | | 53,528 | | |
Other
|
| | | | 4 | | | | | | 5,750 | | | | | | (4,732 ) | | | | | | 1,018 | | |
Total intangible assets
|
| | | | 12 | | | | | $ | 355,607 | | | | | $ | (271,932 ) | | | | | $ | 83,675 | | |
As of December 31, 2016 | | | | | | ||||||||||||||||||||
Patents
|
| | | | 14 | | | | | $ | 12,770 | | | | | $ | (12,078 ) | | | | | $ | 692 | | |
Trademarks/Tradenames
|
| | | | 12 | | | | | | 117,124 | | | | | | (82,723 ) | | | | | | 34,401 | | |
Customer relationships
|
| | | | 13 | | | | | | 217,861 | | | | | | (150,310 ) | | | | | | 67,551 | | |
Other
|
| | | | 4 | | | | | | 5,661 | | | | | | (4,146 ) | | | | | | 1,515 | | |
Total intangible assets
|
| | | | 12 | | | | | $ | 353,416 | | | | | $ | (249,257 ) | | | | | $ | 104,159 | | |
|
(Amounts in thousands)
|
| |
Amortization
expense |
| |||
2018
|
| | | $ | 19,781 | | |
2019
|
| | | | 15,734 | | |
2020
|
| | | | 11,197 | | |
2021
|
| | | | 6,718 | | |
2022
|
| | | | 4,416 | | |
(Amounts in thousands)
|
| |
December 31,
2017 |
| |
December 31,
2016 |
| ||||||
Senior secured asset based revolving credit facility
|
| | | $ | — | | | | | $ | — | | |
Term Loan due 2021, net of unamortized early tender premium, discount, and debt issuance costs of $10,560 and $17,854, respectively
|
| | |
|
203,315
|
| | | |
|
240,321
|
| |
6.50% Senior notes due 2022, net of unamortized early tender premium, discount, and debt issuance costs of $41,681 and $49,935, respectively
|
| | |
|
608,319
|
| | | |
|
600,065
|
| |
| | | | $ | 811,634 | | | | | $ | 840,386 | | |
Less current portion of long-term debt
|
| | | | (4,300 ) | | | | | | (4,300 ) | | |
| | | | $ | 807,334 | | | | | $ | 836,086 | | |
|
(Amounts in thousands)
|
| |
For the year ended
|
| |||||||||
|
December 31,
2017 |
| |
December 31,
2016 |
| ||||||||
Loss on modification of debt: | | | | ||||||||||
Term Loan Facility unamortized discount
|
| | | $ | (1,681 ) | | | | | $ | (9,375 ) | | |
Term Loan Facility unamortized debt issuance costs
|
| | | | (425 ) | | | | | | (2,372 ) | | |
Total loss on modification or extinguishment of debt
|
| | | $ | (2,106 ) | | | | | $ | (11,747 ) | | |
|
(Amounts in thousands)
|
| |
As of
December 31, 2017 |
| |||
2018
|
| | | $ | 4,300 | | |
2019
|
| | | | 4,300 | | |
2020
|
| | | | 4,300 | | |
2021
|
| | | | 200,975 | | |
2022
|
| | | | 650,000 | | |
Thereafter
|
| | | | — | | |
| | | | $ | 863,875 | | |
|
(Amounts in thousands)
|
| |
December 31,
2017 |
| |
December 31,
2016 |
| ||||||
Change in projected benefit obligation: | | | | ||||||||||
Benefit obligation at beginning of year
|
| | | $ | 47,138 | | | | | $ | 47,652 | | |
Service cost
|
| | | | — | | | | | | — | | |
Interest cost
|
| | | | 1,822 | | | | | | 1,914 | | |
Actuarial (gain) loss
|
| | | | 2,226 | | | | | | (227 ) | | |
Benefits and expenses paid
|
| | | | (2,669 ) | | | | | | (2,201 ) | | |
Projected benefit obligation at end of year
|
| | | $ | 48,517 | | | | | $ | 47,138 | | |
Change in plan assets: | | | | ||||||||||
Fair value of plan assets at beginning of year
|
| | | $ | 31,478 | | | | | $ | 31,972 | | |
Actual return on plan assets
|
| | | | 3,792 | | | | | | 1,060 | | |
Employer and participant contributions
|
| | | | 1,753 | | | | | | 647 | | |
Benefits and expenses paid
|
| | | | (2,669 ) | | | | | | (2,201 ) | | |
Fair value of plan assets at end of year
|
| | | $ | 34,354 | | | | | $ | 31,478 | | |
Funded status and financial position: | | | | ||||||||||
Fair value of plan assets
|
| | | $ | 34,354 | | | | | $ | 31,478 | | |
Benefit obligation at end of year
|
| | | | 48,517 | | | | | | 47,138 | | |
Funded status
|
| | | $ | (14,163 ) | | | | | $ | (15,660 ) | | |
|
(Amounts in thousands)
|
| |
December 31,
2017 |
| |
December 31,
2016 |
| ||||||
Amount recognized in the balance sheet consists of: | | | | ||||||||||
Current liability
|
| | | $ | (1,358 ) | | | | | $ | (1,753 ) | | |
Noncurrent liability
|
| | | | (12,805 ) | | | | | | (13,907 ) | | |
Liability recognized in the balance sheet
|
| | | $ | (14,163 ) | | | | | $ | (15,660 ) | | |
|
(Amounts in thousands)
|
| |
December 31,
2017 |
| |
December 31,
2016 |
| ||||||
Initial net asset (obligation)
|
| | | $ | — | | | | | $ | — | | |
Prior service credit (cost)
|
| | | | — | | | | | | — | | |
Net loss
|
| | | | 17,958 | | | | | | 18,817 | | |
Accumulated other comprehensive loss
|
| | | $ | 17,958 | | | | | $ | 18,817 | | |
|
| | |
For the year ended December 31,
|
| |||||||||||||||
| | |
2017
|
| |
2016
|
| |
2015
|
| |||||||||
Discount rate for projected benefit obligation
|
| | | | 3.50 % | | | | | | 3.97 % | | | | | | 4.18 % | | |
Discount rate for pension costs
|
| | | | 3.97 % | | | | | | 4.18 % | | | | | | 4.25 % | | |
Expected long-term average return on plan assets
|
| | | | 7.00 % | | | | | | 7.00 % | | | | | | 7.00 % | | |
(Amounts in thousands)
|
| |
For the year ended December 31,
|
| |||||||||||||||
|
2017
|
| |
2016
|
| |
2015
|
| |||||||||||
Service cost
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | |
Interest cost
|
| | | | 1,822 | | | | | | 1,914 | | | | | | 1,996 | | |
Expected return on plan assets
|
| | | | (2,184 ) | | | | | | (2,176 ) | | | | | | (2,309 ) | | |
Amortization of (gain) loss
|
| | | | 1,432 | | | | | | 1,348 | | | | | | 1,192 | | |
Net periodic benefit expense
|
| | | $ | 1,070 | | | | | $ | 1,086 | | | | | $ | 879 | | |
|
| | |
Target
Allocation |
| |
Actual allocation
as of December 31, 2017 |
| |
Weighted Average
Expected Long- Term Rate of Return (1) |
| |||||||||
Asset Category
|
| | | | |||||||||||||||
U.S. Large Cap Funds
|
| | | | 25.0 % | | | | | | 22.3 % | | | | | | 3.7 % | | |
U.S. Mid Cap Funds
|
| | | | 5.0 % | | | | | | 8.1 % | | | | | | 0.8 % | | |
U.S. Small Cap Funds
|
| | | | 3.0 % | | | | | | 3.0 % | | | | | | 0.4 % | | |
International Equity
|
| | | | 15.0 % | | | | | | 15.2 % | | | | | | 1.1 % | | |
Fixed income
|
| | | | 45.0 % | | | | | | 44.4 % | | | | | | 0.9 % | | |
Other investments
|
| | | | 7.0 % | | | | | | 7.0 % | | | | | | 0.1 % | | |
| | | | | 100.0 % | | | | | | 100.0 % | | | | | | 7.0 % | | |
| | |
Target
Allocation |
| |
Actual allocation
as of December 31, 2016 |
| |
Weighted Average
Expected Long- Term Rate of Return (1) |
| |||||||||
Asset Category
|
| | | | |||||||||||||||
U.S. Large Cap Funds
|
| | | | 25.0 % | | | | | | 21.6 % | | | | | | 4.2 % | | |
U.S. Mid Cap Funds
|
| | | | 5.0 % | | | | | | 7.9 % | | | | | | 0.7 % | | |
U.S. Small Cap Funds
|
| | | | 3.0 % | | | | | | 3.0 % | | | | | | 0.5 % | | |
International Equity
|
| | | | 15.0 % | | | | | | 14.8 % | | | | | | 1.0 % | | |
Fixed income
|
| | | | 45.0 % | | | | | | 44.3 % | | | | | | 0.5 % | | |
Other investments
|
| | | | 7.0 % | | | | | | 8.4 % | | | | | | 0.1 % | | |
| | | | | 100.0 % | | | | | | 100.0 % | | | | | | 7.0 % | | |
(Amounts in thousands)
|
| |
Fair value as of
December 31, 2017 |
| |
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
| |
Significant
Other Observable Inputs (Level 2) |
| |
Significant
Unobservable Inputs (Level 3) |
| ||||||||||||
Equity Securities (1) | | | | | | ||||||||||||||||||||
U.S. Large Cap Funds
|
| | | $ | 7,660 | | | | | $ | 7,660 | | | | | $ | — | | | | | $ | — | | |
U.S. Mid Cap Funds
|
| | | | 2,797 | | | | | | 1,381 | | | | | | 1,416 | | | | | | — | | |
U.S. Small Cap Funds
|
| | | | 1,038 | | | | | | 515 | | | | | | 523 | | | | | | — | | |
International Funds
|
| | | | 5,203 | | | | | | 5,203 | | | | | | — | | | | | | — | | |
Fixed Income | | | | | | ||||||||||||||||||||
Domestic Bond Funds
(2)
|
| | | | 15,261 | | | | | | — | | | | | | 15,261 | | | | | | — | | |
Other Investments | | | | | | ||||||||||||||||||||
Commodity Funds
(3)
|
| | | | 1,765 | | | | | | — | | | | | | 1,765 | | | | | | — | | |
Cash & Cash Equivalents
|
| | | | 630 | | | | | | 630 | | | | | | — | | | | | | — | | |
| | | | $ | 34,354 | | | | | $ | 15,389 | | | | | $ | 18,965 | | | | | $ | — | | |
|
(Amounts in thousands)
|
| |
Fair value as of
December 31, 2016 |
| |
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
| |
Significant
Other Observable Inputs (Level 2) |
| |
Significant
Unobservable Inputs (Level 3) |
| ||||||||||||
Equity Securities (1) | | | | | | ||||||||||||||||||||
U.S. Large Cap Funds
|
| | | $ | 6,784 | | | | | $ | 6,784 | | | | | $ | — | | | | | $ | — | | |
U.S. Mid Cap Funds
|
| | | | 2,477 | | | | | | 1,226 | | | | | | 1,251 | | | | | | — | | |
U.S. Small Cap Funds
|
| | | | 931 | | | | | | 470 | | | | | | 461 | | | | | | — | | |
International Funds
|
| | | | 4,662 | | | | | | 4,662 | | | | | | — | | | | | | — | | |
Fixed Income | | | | | | ||||||||||||||||||||
Domestic Bond Funds
(2)
|
| | | | 13,954 | | | | | | — | | | | | | 13,954 | | | | | | — | | |
Other Investments | | | | | | ||||||||||||||||||||
Commodity Funds
(3)
|
| | | | 1,584 | | | | | | — | | | | | | 1,584 | | | | | | — | | |
Cash & Cash Equivalents
|
| | | | 1,086 | | | | | | 1,086 | | | | | | — | | | | | | — | | |
| | | | $ | 31,478 | | | | | $ | 14,228 | | | | | $ | 17,250 | | | | | $ | — | | |
|
Fiscal Year
|
| |
Expected Benefit
Payments |
| |||
(Amounts in thousands)
|
| | |||||
2018
|
| | | $ | 2,404 | | |
2019
|
| | | | 2,469 | | |
2020
|
| | | | 2,568 | | |
2021
|
| | | | 2,624 | | |
2022
|
| | | | 2,681 | | |
2023-2027
|
| | | | 14,119 | | |
(Amounts in thousands)
|
| |
Lease
Commitments |
| |
Sublease
Income |
| ||||||
2018
|
| | | $ | 31,590 | | | | | $ | 437 | | |
2019
|
| | | | 27,455 | | | | | | 445 | | |
2020
|
| | | | 22,123 | | | | | | 454 | | |
2021
|
| | | | 17,755 | | | | | | 463 | | |
2022
|
| | | | 15,694 | | | | | | 473 | | |
Thereafter
|
| | | | 25,431 | | | | | | 974 | | |
(Amounts in thousands)
|
| |
December 31,
2017 |
| |
December 31,
2016 |
| ||||||
Product claim liabilities
|
| | | $ | 138 | | | | | $ | 138 | | |
Multiemployer pension plan withdrawal liability
|
| | | | 449 | | | | | | 808 | | |
Other
|
| | | | 439 | | | | | | 500 | | |
| | | | $ | 1,026 | | | | | $ | 1,446 | | |
|
(Amounts in thousands)
|
| |
For the year ended December 31,
|
| |||||||||||||||
|
2017
|
| |
2016
|
| |
2015
|
| |||||||||||
Balance, beginning of period
|
| | | $ | 77,279 | | | | | $ | 76,562 | | | | | $ | 84,423 | | |
Acquisitions – Canyon Stone (2015)
|
| | | | — | | | | | | — | | | | | | 100 | | |
Warranty expense during period
|
| | | | 22,309 | | | | | | 22,266 | | | | | | 21,264 | | |
Adjustments
|
| | | | — | | | | | | — | | | | | | (7,761 ) | | |
Settlements made during period
|
| | | | (22,271 ) | | | | | | (21,549 ) | | | | | | (21,464 ) | | |
Balance, end of period
|
| | | $ | 77,317 | | | | | $ | 77,279 | | | | | $ | 76,562 | | |
|
(Amounts in thousands)
|
| |
December 31,
2017 |
| |
December 31,
2016 |
| ||||||
Insurance
|
| | | $ | 7,637 | | | | | $ | 8,297 | | |
Employee compensation and benefits
|
| | | | 19,720 | | | | | | 27,749 | | |
Sales and marketing
|
| | | | 58,131 | | | | | | 59,655 | | |
Product warranty
|
| | | | 19,652 | | | | | | 19,718 | | |
Accrued freight
|
| | | | 3,696 | | | | | | 2,146 | | |
Accrued interest
|
| | | | 18,027 | | | | | | 17,977 | | |
Accrued environmental liability
|
| | | | 453 | | | | | | 434 | | |
Accrued pension
|
| | | | 1,358 | | | | | | 1,753 | | |
Accrued sales returns and discounts
|
| | | | 1,303 | | | | | | 1,199 | | |
Accrued taxes
|
| | | | 4,735 | | | | | | 4,966 | | |
Litigation accrual
|
| | | | 26,849 | | | | | | 2,575 | | |
Other
|
| | | | 24,296 | | | | | | 22,546 | | |
| | | | $ | 185,857 | | | | | $ | 169,015 | | |
|
(Amounts in thousands)
|
| |
December 31,
2017 |
| |
December 31,
2016 |
| ||||||
Insurance
|
| | | $ | 595 | | | | | $ | 605 | | |
Pension liabilities
|
| | | | 12,805 | | | | | | 13,907 | | |
Multi-employer pension withdrawal liability
|
| | | | 449 | | | | | | 808 | | |
Product warranty
|
| | | | 57,665 | | | | | | 57,575 | | |
Long-term product claim liability
|
| | | | 138 | | | | | | 138 | | |
Long-term environmental liability
|
| | | | 1,075 | | | | | | 1,158 | | |
Liabilities for tax uncertainties
|
| | | | 4,529 | | | | | | 3,925 | | |
Litigation accrual
|
| | | | 731 | | | | | | 731 | | |
Other
|
| | | | 5,437 | | | | | | 7,548 | | |
| | | | $ | 83,424 | | | | | $ | 86,395 | | |
|
(Amounts in thousands)
|
| |
For the year ended December 31,
|
| |||||||||||||||
|
2017
|
| |
2016
|
| |
2015
|
| |||||||||||
Domestic
|
| | | $ | 117,750 | | | | | $ | 35,258 | | | | | $ | 47,901 | | |
Foreign
|
| | | | (2,769 ) | | | | | | (11,766 ) | | | | | | (16,301 ) | | |
| | | | $ | 114,981 | | | | | $ | 23,492 | | | | | $ | 31,600 | | |
|
(Amounts in thousands)
|
| |
For the year ended December 31,
|
| |||||||||||||||
|
2017
|
| |
2016
|
| |
2015
|
| |||||||||||
Federal: | | | | | |||||||||||||||
Current
|
| | | $ | 989 | | | | | $ | 1,043 | | | | | $ | 692 | | |
Deferred
|
| | | | 39,692 | | | | | | (54,692 ) | | | | | | (2,833 ) | | |
| | | | | 40,681 | | | | | | (53,649 ) | | | | | | (2,141 ) | | |
State: | | | | | |||||||||||||||
Current
|
| | | $ | 5,204 | | | | | $ | 4,674 | | | | | $ | 2,688 | | |
Deferred
|
| | | | 1,259 | | | | | | (2,020 ) | | | | | | (779 ) | | |
| | | | | 6,463 | | | | | | 2,654 | | | | | | 1,909 | | |
Foreign: | | | | | |||||||||||||||
Current
|
| | | $ | 838 | | | | | $ | 277 | | | | | $ | 833 | | |
Deferred
|
| | | | (1,328 ) | | | | | | (1,277 ) | | | | | | (1,289 ) | | |
| | | | | (490 ) | | | | | | (1,000 ) | | | | | | (456 ) | | |
Total
|
| | | $ | 46,654 | | | | | $ | (51,995 ) | | | | | $ | (688 ) | | |
|
(Amounts in thousands)
|
| |
For the year ended December 31,
|
| |||||||||||||||
|
2017
|
| |
2016
|
| |
2015
|
| |||||||||||
Income tax provision at the federal statutory rate
|
| | | $ | 40,243 | | | | | $ | 8,222 | | | | | $ | 11,060 | | |
Net change from statutory rate: | | | | | |||||||||||||||
Valuation allowance – US
|
| | | | 165 | | | | | | (88,653 ) | | | | | | (30,446 ) | | |
Valuation allowance – Canada
|
| | | | 207 | | | | | | 1,714 | | | | | | 3,551 | | |
State income tax provision, net of federal income tax benefit
|
| | | | 4,462 | | | | | | 5,937 | | | | | | 4,986 | | |
Taxes at non-U.S. statutory rate
|
| | | | (283 ) | | | | | | 348 | | | | | | (153 ) | | |
Additional provisions/reversals of unrecognized tax benefits
|
| | | | (281 ) | | | | | | 187 | | | | | | (116 ) | | |
Canadian rate differential
|
| | | | 142 | | | | | | 808 | | | | | | 1,284 | | |
Attribute reduction
|
| | | | — | | | | | | (3,118 ) | | | | | | 3,118 | | |
Tax Receivable Agreement
|
| | | | 162 | | | | | | 21,306 | | | | | | 4,531 | | |
Alternative minimum tax
|
| | | | 1,463 | | | | | | 1,483 | | | | | | 1,298 | | |
Minimum tax credit
|
| | | | (1,463 ) | | | | | | (1,483 ) | | | | | | (1,298 ) | | |
Meals and entertainment
|
| | | | 676 | | | | | | 675 | | | | | | 595 | | |
Executive compensation
|
| | | | 748 | | | | | | 599 | | | | | | — | | |
Work opportunity tax credit
|
| | | | (474 ) | | | | | | (438 ) | | | | | | — | | |
Tax Reform – Deferred Taxes
|
| | | | 4,272 | | | | | | — | | | | | | — | | |
Tax Reform – Tax Receivable Agreement
|
| | | | (3,746 ) | | | | | | — | | | | | | — | | |
Other, net
|
| | | | 361 | | | | | | 418 | | | | | | 902 | | |
| | | | $ | 46,654 | | | | | $ | (51,995 ) | | | | | $ | (688 ) | | |
|
(Amounts in thousands)
|
| |
2017
|
| |
2016
|
| ||||||
Deferred tax assets: | | | | ||||||||||
Accounts receivable
|
| | | $ | 615 | | | | | $ | 824 | | |
Insurance reserves
|
| | | | 2,004 | | | | | | 3,302 | | |
Warranty reserves
|
| | | | 18,616 | | | | | | 26,826 | | |
Pension accrual
|
| | | | 3,837 | | | | | | 6,292 | | |
Deferred compensation
|
| | | | 4,683 | | | | | | 10,946 | | |
Inventories
|
| | | | 2,936 | | | | | | 4,898 | | |
Federal, net operating loss carry-forwards
|
| | | | 12,621 | | | | | | 48,732 | | |
State, net operating loss carry-forwards
|
| | | | 12,580 | | | | | | 10,496 | | |
Non-capital losses - foreign jurisdiction
|
| | | | 13,116 | | | | | | 11,743 | | |
Related party interest
|
| | | | 3,347 | | | | | | 18,055 | | |
Professional fees
|
| | | | 1,087 | | | | | | 2,031 | | |
Environmental reserves
|
| | | | 374 | | | | | | 576 | | |
Alternative minimum tax
|
| | | | 4,244 | | | | | | 2,782 | | |
Other assets, net
|
| | | | 5,008 | | | | | | 7,530 | | |
Valuation allowance
|
| | | | (26,553 ) | | | | | | (22,889 ) | | |
Total deferred tax assets
|
| | | | 58,515 | | | | | | 132,144 | | |
Deferred tax liabilities: | | | | ||||||||||
Property and equipment, net
|
| | | | (18,851 ) | | | | | | (27,589 ) | | |
Intangible assets, net
|
| | | | (20,873 ) | | | | | | (36,894 ) | | |
Deferred financing
|
| | | | (8,991 ) | | | | | | (18,063 ) | | |
Other liabilities, net
|
| | | | (807 ) | | | | | | (1,973 ) | | |
Total deferred tax liabilities
|
| | | | (49,522 ) | | | | | | (84,519 ) | | |
Net deferred tax asset
|
| | | $ | 8,993 | | | | | $ | 47,625 | | |
|
| | |
December 31,
2015 |
| |||
Weighted average fair value of options granted
|
| | | $ | 2.62 | | |
Weighted average assumptions used: | | | |||||
Expected volatility
|
| | | | 34 % | | |
Expected term (in years)
|
| | | | 7.00 | | |
Risk-free interest rate
|
| | | | 1.82 % | | |
Expected dividend yield
|
| | | | — % | | |
| | |
Stock Options
|
| |
Weighted-
Average Exercise Price |
| |
Weighted-
Average Remaining Contractual Term (Years) |
| |
Aggregate
Intrinsic Value |
| ||||||||||||
| | | | | | | | | | | | | | | | | | | | |
(in thousands)
|
| |||
Balance at January 1, 2016
|
| | | | 2,613,793 | | | | | $ | 13.75 | | | | | | 5.22 | | | | | | 617 | | |
Granted
|
| | | | — | | | | | $ | — | | | | | | — | | | | |||||
Exercised
|
| | | | (116,594 ) | | | | | $ | 9.35 | | | | | | — | | | | |||||
Forfeited or expired
|
| | | | (1,666 ) | | | | | $ | 12.35 | | | | | | — | | | | |||||
Balance at December 31, 2016
|
| | | | 2,495,533 | | | | | $ | 13.96 | | | | | | 4.35 | | | | | | 5,729 | | |
Granted
|
| | | | — | | | | | $ | — | | | | | | — | | | | |||||
Exercised
|
| | | | (97,352 ) | | | | | $ | 12.35 | | | | | | — | | | | |||||
Forfeited or expired
|
| | | | — | | | | | $ | — | | | | | | — | | | | |||||
Balance at December 31, 2017
|
| | | | 2,398,181 | | | | | $ | 14.02 | | | | | | 3.43 | | | | | | 10,671 | | |
|
(Amounts in thousands)
|
| |
For the year ended December 31,
|
| |||||||||||||||
|
2017
|
| |
2016
|
| |
2015
|
| |||||||||||
Net sales | | | | | |||||||||||||||
Siding, Fencing, and Stone
|
| | | $ | 970,198 | | | | | $ | 886,851 | | | | | $ | 840,118 | | |
Windows and Doors
|
| | | | 1,086,105 | | | | | | 1,024,993 | | | | | | 999,608 | | |
| | | | $ | 2,056,303 | | | | | $ | 1,911,844 | | | | | $ | 1,839,726 | | |
Operating earnings (loss) | | | | | |||||||||||||||
Siding, Fencing, and Stone
|
| | | $ | 146,753 | | | | | $ | 157,058 | | | | | $ | 134,654 | | |
Windows and Doors
|
| | | | 56,435 | | | | | | 43,579 | | | | | | 18,195 | | |
Unallocated
|
| | | | (28,930 ) | | | | | | (32,141 ) | | | | | | (30,317 ) | | |
| | | | $ | 174,258 | | | | | $ | 168,496 | | | | | $ | 122,532 | | |
Interest (income) expense, net | | | | | |||||||||||||||
Siding, Fencing, and Stone
|
| | | $ | (29 ) | | | | | $ | (16 ) | | | | | $ | (22 ) | | |
Windows and Doors
|
| | | | (21 ) | | | | | | (12 ) | | | | | | (17 ) | | |
Unallocated
|
| | | | 69,333 | | | | | | 72,710 | | | | | | 74,858 | | |
| | | | $ | 69,283 | | | | | $ | 72,682 | | | | | $ | 74,819 | | |
Depreciation and amortization | | | | | |||||||||||||||
Siding, Fencing, and Stone
|
| | | $ | 22,562 | | | | | $ | 25,723 | | | | | $ | 26,539 | | |
Windows and Doors
|
| | | | 30,369 | | | | | | 30,516 | | | | | | 31,549 | | |
Unallocated
|
| | | | 316 | | | | | | 164 | | | | | | 312 | | |
| | | | $ | 53,247 | | | | | $ | 56,403 | | | | | $ | 58,400 | | |
|
(Amounts in thousands)
|
| |
For the year ended December 31,
|
| |||||||||||||||
|
2017
|
| |
2016
|
| |
2015
|
| |||||||||||
Income tax provision (benefit) | | | | | |||||||||||||||
Unallocated
|
| | | $ | 46,654 | | | | | $ | (51,995 ) | | | | | $ | (688 ) | | |
Capital expenditures | | | | | |||||||||||||||
Siding, Fencing, and Stone
|
| | | $ | 17,243 | | | | | $ | 16,472 | | | | | $ | 11,816 | | |
Windows and Doors
|
| | | | 20,613 | | | | | | 17,780 | | | | | | 19,196 | | |
Unallocated
|
| | | | 2,530 | | | | | | 1,749 | | | | | | 2,848 | | |
| | | | $ | 40,386 | | | | | $ | 36,001 | | | | | $ | 33,860 | | |
|
| | |
As of December 31,
|
| | | | |||||||||
| | |
2017
|
| |
2016
|
| | | | ||||||
Total assets | | | | | ||||||||||||
Siding, Fencing, and Stone
|
| | | $ | 728,502 | | | | | $ | 691,930 | | | | | |
Windows and Doors
|
| | | | 500,278 | | | | | | 509,055 | | | | | |
Unallocated
|
| | | | 90,787 | | | | | | 56,756 | | | | | |
| | | | $ | 1,319,567 | | | | | $ | 1,257,741 | | | | | |
|
(Amounts in thousands, except per share data)
|
| |
Quarter Ended
December 31, 2017 |
| |
Quarter Ended
September 30, 2017 |
| |
Quarter Ended
July 1, 2017 |
| |
Quarter Ended
April 1, 2017 |
| ||||||||||||
Net sales
|
| | | $ | 516,858 | | | | | $ | 564,663 | | | | | $ | 544,767 | | | | | $ | 430,015 | | |
Gross profit
|
| | | | 110,134 | | | | | | 131,966 | | | | | | 136,888 | | | | | | 89,525 | | |
Net income (loss)
|
| | | | 14,571 (2)(3) | | | | | | 27,534 | | | | | | 29,859 | | | | | | (3,637 ) | | |
Net income (loss) per share attributable to common shareholders:
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Basic
(1)
|
| | | $ | 0.21 | | | | | $ | 0.40 | | | | | $ | 0.44 | | | | | $ | (0.05 ) | | |
Diluted
(1)
|
| | | $ | 0.21 | | | | | $ | 0.40 | | | | | $ | 0.43 | | | | | $ | (0.05 ) | | |
(Amounts in thousands, except per share data)
|
| |
Quarter Ended
December 31, 2016 |
| |
Quarter Ended
October 1, 2016 |
| |
Quarter Ended
July 2, 2016 |
| |
Quarter Ended
April 2, 2016 |
| ||||||||||||
Net sales
|
| | | $ | 462,293 | | | | | $ | 530,392 | | | | | $ | 510,545 | | | | | $ | 408,614 | | |
Gross profit
|
| | | | 103,484 | | | | | | 136,800 | | | | | | 135,289 | | | | | | 86,701 | | |
Net income (loss)
|
| | | | 6,663 (4 )(5) | | | | | | 54,755 (4 ) | | | | | | 41,646 | | | | | | (27,577p ) (4) | | |
Net income (loss) per share attributable to common shareholders:
|
| | | | | ||||||||||||||||||||
Basic
(1)
|
| | | $ | 0.10 | | | | | $ | 0.80 | | | | | $ | 0.61 | | | | | $ | (0.40 ) | | |
Diluted
(1)
|
| | | $ | 0.10 | | | | | $ | 0.80 | | | | | $ | 0.61 | | | | | $ | (0.40 ) | | |
(Amounts in thousands)
|
| |
Guarantor
Ply Gem Holdings, Inc. |
| |
Issuer
Ply Gem Industries, Inc. |
| |
Guarantor
Subsidiaries |
| |
Non-
Guarantor Subsidiary |
| |
Consolidating
Adjustments |
| |
Consolidated
|
| ||||||||||||||||||
Net sales
|
| | | $ | — | | | | | $ | — | | | | | $ | 1,832,925 | | | | | $ | 223,378 | | | | | $ | — | | | | | $ | 2,056,303 | | |
Cost of products sold
|
| | | | — | | | | | | — | | | | | | 1,419,980 | | | | | | 167,810 | | | | | | — | | | | | | 1,587,790 | | |
Gross profit
|
| | | | — | | | | | | — | | | | | | 412,945 | | | | | | 55,568 | | | | | | — | | | | | | 468,513 | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Selling, general and administrative expenses
|
| | | | — | | | | | | 28,930 | | | | | | 196,622 | | | | | | 47,432 | | | | | | — | | | | | | 272,984 | | |
Intercompany administrative charges
|
| | | | — | | | | | | — | | | | | | 37,437 | | | | | | 3,999 | | | | | | (41,436 ) | | | | | | | | |
Amortization of intangible assets
|
| | | | — | | | | | | — | | | | | | 16,872 | | | | | | 4,399 | | | | | | — | | | | | | 21,271 | | |
Total operating expenses
|
| | | | — | | | | | | 28,930 | | | | | | 250,931 | | | | | | 55,830 | | | | | | (41,436 ) | | | | | | 294,255 | | |
Operating earnings (loss)
|
| | | | — | | | | | | (28,930 ) | | | | | | 162,014 | | | | | | (262 ) | | | | | | 41,436 | | | | | | 174,258 | | |
Foreign currency gain
|
| | | | — | | | | | | — | | | | | | — | | | | | | 1,363 | | | | | | — | | | | | | 1,363 | | |
Intercompany interest
|
| | | | — | | | | | | 56,888 | | | | | | (52,995 ) | | | | | | (3,893 ) | | | | | | — | | | | | | — | | |
Interest expense
|
| | | | — | | | | | | (69,361 ) | | | | | | — | | | | | | — | | | | | | — | | | | | | (69,361 ) | | |
Interest income
|
| | | | — | | | | | | 28 | | | | | | 27 | | | | | | 23 | | | | | | — | | | | | | 78 | | |
Tax receivable agreement liability adjustment
|
| | | | — | | | | | | 10,749 | | | | | | — | | | | | | — | | | | | | — | | | | | | 10,749 | | |
Loss on modification or extinguishment of debt
|
| | | | — | | | | | | (2,106 ) | | | | | | — | | | | | | — | | | | | | — | | | | | | (2,106 ) | | |
Intercompany administrative
income |
| | | | — | | | | | | 41,436 | | | | | | — | | | | | | — | | | | | | (41,436 ) | | | | | | — | | |
Income (loss) before equity in subsidiaries’ income
|
| | | | — | | | | | | 8,704 | | | | | | 109,046 | | | | | | (2,769 ) | | | | | | — | | | | | | 114,981 | | |
Equity in subsidiaries’ income
|
| | | | 68,327 | | | | | | 59,623 | | | | | | — | | | | | | — | | | | | | (127,950 ) | | | | | | | | |
Income (loss) before provision (benefit) for income taxes
|
| | | | 68,327 | | | | | | 68,327 | | | | | | 109,046 | | | | | | (2,769 ) | | | | | | (127,950 ) | | | | | | 114,981 | | |
Provision (benefit) for income taxes
|
| | | | — | | | | | | — | | | | | | 47,144 | | | | | | (490 ) | | | | | | | | | | | | 46,654 | | |
Net income (loss)
|
| | | $ | 68,327 | | | | | $ | 68,327 | | | | | $ | 61,902 | | | | | $ | (2,279 ) | | | | | $ | (127,950 ) | | | | | $ | 68,327 | | |
Other comprehensive income (loss): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Foreign currency translation adjustments
|
| | | | — | | | | | | — | | | | | | — | | | | | | 3,765 | | | | | | — | | | | | | 3,765 | | |
Unrealized loss on derivative instruments
|
| | | | — | | | | | | — | | | | | | — | | | | | | (853 ) | | | | | | — | | | | | | (853 ) | | |
Minimum pension liability for actuarial gain
|
| | | | — | | | | | | — | | | | | | 610 | | | | | | — | | | | | | — | | | | | | 610 | | |
Total comprehensive income (loss)
|
| | | $ | 68,327 | | | | | $ | 68,327 | | | | | $ | 62,512 | | | | | $ | 633 | | | | | $ | (127,950 ) | | | | | $ | 71,849 | | |
|
(Amounts in thousands)
|
| |
Guarantor
Ply Gem Holdings, Inc. |
| |
Issuer
Ply Gem Industries, Inc. |
| |
Guarantor
Subsidiaries |
| |
Non-
Guarantor Subsidiary |
| |
Consolidating
Adjustments |
| |
Consolidated
|
| ||||||||||||||||||
Net sales
|
| | | $ | — | | | | | $ | — | | | | | $ | 1,713,112 | | | | | $ | 198,732 | | | | | $ | — | | | | | $ | 1,911,844 | | |
Cost of products sold
|
| | | | — | | | | | | — | | | | | | 1,298,281 | | | | | | 151,289 | | | | | | — | | | | | | 1,449,570 | | |
Gross profit
|
| | | | — | | | | | | — | | | | | | 414,831 | | | | | | 47,443 | | | | | | — | | | | | | 462,274 | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Selling, general and administrative expenses
|
| | | | — | | | | | | 32,141 | | | | | | 190,444 | | | | | | 46,129 | | | | | | — | | | | | | 268,714 | | |
Intercompany administrative
charges |
| | | | — | | | | | | — | | | | | | 32,487 | | | | | | 5,180 | | | | | | (37,667 ) | | | | | | — | | |
Amortization of intangible assets
|
| | | | — | | | | | | — | | | | | | 20,707 | | | | | | 4,357 | | | | | | — | | | | | | 25,064 | | |
Total operating expenses
|
| | | | — | | | | | | 32,141 | | | | | | 243,638 | | | | | | 55,666 | | | | | | (37,667 ) | | | | | | 293,778 | | |
Operating earnings (loss)
|
| | | | — | | | | | | (32,141 ) | | | | | | 171,193 | | | | | | (8,223 ) | | | | | | 37,667 | | | | | | 168,496 | | |
Foreign currency gain
|
| | | | — | | | | | | — | | | | | | — | | | | | | 299 | | | | | | — | | | | | | 299 | | |
Intercompany interest
|
| | | | — | | | | | | 63,716 | | | | | | (59,859 ) | | | | | | (3,857 ) | | | | | | — | | | | | | — | | |
Interest expense
|
| | | | — | | | | | | (72,716 ) | | | | | | — | | | | | | (2 ) | | | | | | — | | | | | | (72,718 ) | | |
Interest income
|
| | | | — | | | | | | 6 | | | | | | 13 | | | | | | 17 | | | | | | — | | | | | | 36 | | |
Tax receivable agreement liability adjustment
|
| | | | — | | | | | | (60,874 ) | | | | | | — | | | | | | — | | | | | | — | | | | | | (60,874 ) | | |
Loss on modification or extinguishment
of debt |
| | | | — | | | | | | (11,747 ) | | | | | | — | | | | | | — | | | | | | — | | | | | | (11,747 ) | | |
Intercompany administrative income
|
| | | | — | | | | | | 37,667 | | | | | | — | | | | | | — | | | | | | (37,667 ) | | | | | | — | | |
Income (loss) before equity in subsidiaries’ income
|
| | | | — | | | | | | (76,089 ) | | | | | | 111,347 | | | | | | (11,766 ) | | | | | | — | | | | | | 23,492 | | |
Equity in subsidiaries’ income
|
| | | | 75,487 | | | | | | 151,576 | | | | | | — | | | | | | — | | | | | | (227,063 ) | | | | | | — | | |
Income (loss) before provision (benefit) for income taxes
|
| | | | 75,487 | | | | | | 75,487 | | | | | | 111,347 | | | | | | (11,766 ) | | | | | | (227,063 ) | | | | | | 23,492 | | |
Provision (benefit) for income taxes
|
| | | | — | | | | | | — | | | | | | (50,995 ) | | | | | | (1,000 ) | | | | | | | | | | | | (51,995 ) | | |
Net income (loss)
|
| | | $ | 75,487 | | | | | $ | 75,487 | | | | | $ | 162,342 | | | | | $ | (10,766 ) | | | | | $ | (227,063 ) | | | | | $ | 75,487 | | |
Other comprehensive income (loss): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Foreign currency translation adjustments
|
| | | | — | | | | | | — | | | | | | — | | | | | | 2,950 | | | | | | — | | | | | | 2,950 | | |
Unrealized loss on derivative instruments
|
| | | | — | | | | | | — | | | | | | — | | | | | | 29 | | | | | | — | | | | | | 29 | | |
Minimum pension liability for actuarial gain
|
| | | | — | | | | | | — | | | | | | 295 | | | | | | — | | | | | | — | | | | | | 295 | | |
Total comprehensive income (loss)
|
| | | $ | 75,487 | | | | | $ | 75,487 | | | | | $ | 162,637 | | | | | $ | (7,787 ) | | | | | $ | (227,063 ) | | | | | $ | 78,761 | | |
|
(Amounts in thousands)
|
| |
Guarantor
Ply Gem Holdings, Inc. |
| |
Issuer
Ply Gem Industries, Inc. |
| |
Guarantor
Subsidiaries |
| |
Non-
Guarantor Subsidiary |
| |
Consolidating
Adjustments |
| |
Consolidated
|
| ||||||||||||||||||
Net sales
|
| | | $ | — | | | | | $ | — | | | | | $ | 1,616,407 | | | | | $ | 223,319 | | | | | $ | — | | | | | $ | 1,839,726 | | |
Cost of products sold
|
| | | | — | | | | | | — | | | | | | 1,249,887 | | | | | | 170,127 | | | | | | — | | | | | | 1,420,014 | | |
Gross profit
|
| | | | — | | | | | | — | | | | | | 366,520 | | | | | | 53,192 | | | | | | — | | | | | | 419,712 | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Selling, general and administrative expenses
|
| | | | — | | | | | | 30,317 | | | | | | 189,477 | | | | | | 52,080 | | | | | | — | | | | | | 271,874 | | |
Intercompany administrative
charges |
| | | | — | | | | | | — | | | | | | 28,704 | | | | | | 5,943 | | | | | | (34,647 ) | | | | | | — | | |
Amortization of intangible assets
|
| | | | — | | | | | | — | | | | | | 20,737 | | | | | | 4,569 | | | | | | — | | | | | | 25,306 | | |
Total operating expenses
|
| | | | — | | | | | | 30,317 | | | | | | 238,918 | | | | | | 62,592 | | | | | | (34,647 ) | | | | | | 297,180 | | |
Operating earnings (loss)
|
| | | | — | | | | | | (30,317 ) | | | | | | 127,602 | | | | | | (9,400 ) | | | | | | 34,647 | | | | | | 122,532 | | |
Foreign currency loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | (3,166 ) | | | | | | — | | | | | | (3,166 ) | | |
Intercompany interest
|
| | | | — | | | | | | 63,391 | | | | | | (59,641 ) | | | | | | (3,750 ) | | | | | | — | | | | | | — | | |
Interest expense
|
| | | | — | | | | | | (74,863 ) | | | | | | (4 ) | | | | | | (9 ) | | | | | | — | | | | | | (74,876 ) | | |
Interest income
|
| | | | — | | | | | | 5 | | | | | | 28 | | | | | | 24 | | | | | | — | | | | | | 57 | | |
Tax receivable agreement liability adjustment
|
| | | | — | | | | | | (12,947 ) | | | | | | — | | | | | | — | | | | | | — | | | | | | (12,947 ) | | |
Intercompany administrative income
|
| | | | — | | | | | | 34,647 | | | | | | — | | | | | | — | | | | | | (34,647 ) | | | | | | — | | |
Income (loss) before equity in subsidiaries’ income
|
| | | | — | | | | | | (20,084 ) | | | | | | 67,985 | | | | | | (16,301 ) | | | | | | — | | | | | | 31,600 | | |
Equity in subsidiaries’ income (loss)
|
| | | | 32,288 | | | | | | 52,372 | | | | | | — | | | | | | — | | | | | | (84,660 ) | | | | | | — | | |
Income (loss) before provision (benefit) for income taxes
|
| | | | 32,288 | | | | | | 32,288 | | | | | | 67,985 | | | | | | (16,301 ) | | | | | | (84,660 ) | | | | | | 31,600 | | |
Benefit for income taxes
|
| | | | — | | | | | | — | | | | | | (232 ) | | | | | | (456 ) | | | | | | — | | | | | | (688 ) | | |
Net income (loss)
|
| | | $ | 32,288 | | | | | $ | 32,288 | | | | | $ | 68,217 | | | | | $ | (15,845 ) | | | | | $ | (84,660 ) | | | | | $ | 32,288 | | |
Other comprehensive income (loss): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Foreign currency translation adjustments
|
| | | | — | | | | | | — | | | | | | — | | | | | | (14,690 ) | | | | | | — | | | | | | (14,690 ) | | |
Unrealized loss on derivative instruments
|
| | | | — | | | | | | — | | | | | | — | | | | | | (465 ) | | | | | | — | | | | | | (465 ) | | |
Minimum pension liability for actuarial gain
|
| | | | — | | | | | | — | | | | | | (1,436 ) | | | | | | — | | | | | | — | | | | | | (1,436 ) | | |
Total comprehensive income (loss)
|
| | | $ | 32,288 | | | | | $ | 32,288 | | | | | $ | 66,781 | | | | | $ | (31,000 ) | | | | | $ | (84,660 ) | | | | | $ | 15,697 | | |
|
(Amounts in thousands)
|
| |
Guarantor
Ply Gem Holdings, Inc. |
| |
Issuer
Ply Gem Industries, Inc. |
| |
Guarantor
Subsidiaries |
| |
Non-
Guarantor Subsidiary |
| |
Consolidating
Adjustments |
| |
Consolidated
|
| ||||||||||||||||||
ASSETS | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Current Assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | — | | | | | $ | 65,451 | | | | | $ | (12,905 ) | | | | | $ | 18,870 | | | | | $ | — | | | | | $ | 71,416 | | |
Accounts receivable, net
|
| | | | — | | | | | | — | | | | | | 222,847 | | | | | | 26,686 | | | | | | — | | | | | | 249,533 | | |
Inventories: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Raw materials
|
| | | | — | | | | | | — | | | | | | 72,688 | | | | | | 6,642 | | | | | | — | | | | | | 79,330 | | |
Work in process
|
| | | | — | | | | | | — | | | | | | 34,050 | | | | | | 2,390 | | | | | | — | | | | | | 36,440 | | |
Finished goods
|
| | | | — | | | | | | — | | | | | | 65,975 | | | | | | 14,746 | | | | | | — | | | | | | 80,721 | | |
Total inventory
|
| | | | — | | | | | | — | | | | | | 172,713 | | | | | | 23,778 | | | | | | — | | | | | | 196,491 | | |
Prepaid expenses and other current assets
|
| | | | — | | | | | | 19,741 | | | | | | 22,905 | | | | | | 3,254 | | | | | | — | | | | | | 45,900 | | |
Total current assets
|
| | | | — | | | | | | 85,192 | | | | | | 405,560 | | | | | | 72,588 | | | | | | — | | | | | | 563,340 | | |
Investments in subsidiaries
|
| | | | 81,921 | | | | | | (212,967 ) | | | | | | | | | | | | | | | | | | 131,046 | | | | | | — | | |
Property and Equipment, at cost: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Land
|
| | | | — | | | | | | — | | | | | | 7,553 | | | | | | 676 | | | | | | — | | | | | | 8,229 | | |
Buildings and improvements
|
| | | | — | | | | | | 518 | | | | | | 63,058 | | | | | | 4,429 | | | | | | — | | | | | | 68,005 | | |
Machinery and equipment
|
| | | | — | | | | | | 4,173 | | | | | | 422,255 | | | | | | 24,126 | | | | | | — | | | | | | 450,554 | | |
| | | | | — | | | | | | 4,691 | | | | | | 492,866 | | | | | | 29,231 | | | | | | — | | | | | | 526,788 | | |
Less accumulated depreciation
|
| | | | — | | | | | | (981 ) | | | | | | (337,546 ) | | | | | | (13,729 ) | | | | | | — | | | | | | (352,256 ) | | |
Total property and equipment, net
|
| | | | — | | | | | | 3,710 | | | | | | 155,320 | | | | | | 15,502 | | | | | | — | | | | | | 174,532 | | |
Other Assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Intangible assets, net
|
| | | | — | | | | | | — | | | | | | 74,943 | | | | | | 8,732 | | | | | | — | | | | | | 83,675 | | |
Goodwill
|
| | | | — | | | | | | — | | | | | | 449,366 | | | | | | 31,197 | | | | | | — | | | | | | 480,563 | | |
Deferred income taxes
|
| | | | — | | | | | | — | | | | | | 10,523 | | | | | | — | | | | | | — | | | | | | 10,523 | | |
Intercompany note receivable
|
| | | | — | | | | | | 1,139,073 | | | | | | | | | | | | — | | | | | | (1,139,073 ) | | | | | | | | |
Other
|
| | | | — | | | | | | 1,885 | | | | | | 5,049 | | | | | | — | | | | | | — | | | | | | 6,934 | | |
Total other assets
|
| | | | — | | | | | | 1,140,958 | | | | | | 539,881 | | | | | | 39,929 | | | | | | (1,139,073 ) | | | | | | 581,695 | | |
| | | | $ | 81,921 | | | | | $ | 1,016,893 | | | | | $ | 1,100,761 | | | | | $ | 128,019 | | | | | $ | (1,008,027 ) | | | | | $ | 1,319,567 | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Current Liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Accounts payable
|
| | | $ | — | | | | | $ | 257 | | | | | $ | 69,439 | | | | | $ | 16,024 | | | | | $ | — | | | | | $ | 85,720 | | |
Accrued expenses
|
| | | | — | | | | | | 47,114 | | | | | | 120,335 | | | | | | 18,408 | | | | | | — | | | | | | 185,857 | | |
Current portion of payable to related parties
pursuant to tax receivable agreement |
| | | | — | | | | | | 51,356 | | | | | | — | | | | | | — | | | | | | — | | | | | | 51,356 | | |
Current portion of long-term debt
|
| | | | — | | | | | | 4,300 | | | | | | — | | | | | | — | | | | | | — | | | | | | 4,300 | | |
Total current liabilities
|
| | | | — | | | | | | 103,027 | | | | | | 189,774 | | | | | | 34,432 | | | | | | — | | | | | | 327,233 | | |
Deferred income taxes
|
| | | | — | | | | | | — | | | | | | — | | | | | | 1,530 | | | | | | — | | | | | | 1,530 | | |
Intercompany note payable
|
| | | | — | | | | | | — | | | | | | 1,022,988 | | | | | | 116,085 | | | | | | (1,139,073 ) | | | | | | — | | |
Long-term portion of payable to related parties pursuant to tax receivable agreement
|
| | | | — | | | | | | 18,125 | | | | | | — | | | | | | — | | | | | | — | | | | | | 18,125 | | |
Other long-term liabilities
|
| | | | — | | | | | | 6,486 | | | | | | 71,011 | | | | | | 5,927 | | | | | | — | | | | | | 83,424 | | |
Long-term debt
|
| | | | — | | | | | | 807,334 | | | | | | — | | | | | | | | | | | | | | | | | | 807,334 | | |
Commitments and contingencies
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Stockholders’ Equity (Deficit): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Preferred stock
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Common stock
|
| | | | 685 | | | | | | 685 | | | | | | — | | | | | | — | | | | | | (685 ) | | | | | | 685 | | |
Additional paid-in-capital
|
| | | | 756,096 | | | | | | 756,096 | | | | | | 192,777 | | | | | | 23,336 | | | | | | (972,209 ) | | | | | | 756,096 | | |
(Accumulated deficit) retained earnings
|
| | | | (645,090 ) | | | | | | (645,090 ) | | | | | | (360,720 ) | | | | | | (38,591 ) | | | | | | 1,044,401 | | | | | | (645,090 ) | | |
Accumulated other comprehensive loss
|
| | | | (29,770 ) | | | | | | (29,770 ) | | | | | | (15,069 ) | | | | | | (14,700 ) | | | | | | 59,539 | | | | | | (29,770 ) | | |
Total stockholder’s equity (deficit)
|
| | | | 81,921 | | | | | | 81,921 | | | | | | (183,012 ) | | | | | | (29,955 ) | | | | | | 131,046 | | | | | | 81,921 | | |
| | | | $ | 81,921 | | | | | $ | 1,016,893 | | | | | $ | 1,100,761 | | | | | $ | 128,019 | | | | | $ | (1,008,027 ) | | | | | $ | 1,319,567 | | |
|
(Amounts in thousands)
|
| |
Guarantor Ply
Gem Holdings, Inc. |
| |
Issuer
Ply Gem Industries, Inc. |
| |
Guarantor
Subsidiaries |
| |
Non-
Guarantor Subsidiary |
| |
Consolidating
Adjustments |
| |
Consolidated
|
| | ||||||||||||||||||||
ASSETS | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
Current Assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
Cash and cash equivalents
|
| | | $ | — | | | | | $ | 50,035 | | | | | $ | (10,918 ) | | | | | $ | 12,480 | | | | | $ | — | | | | | $ | 51,597 | | | | ||
Accounts receivable, net
|
| | | | — | | | | | | — | | | | | | 189,983 | | | | | | 19,936 | | | | | | — | | | | | | 209,919 | | | | ||
Inventories: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
Raw materials
|
| | | | — | | | | | | — | | | | | | 63,829 | | | | | | 5,810 | | | | | | — | | | | | | 69,639 | | | | ||
Work in process
|
| | | | — | | | | | | — | | | | | | 23,007 | | | | | | 1,614 | | | | | | — | | | | | | 24,621 | | | | ||
Finished goods
|
| | | | — | | | | | | — | | | | | | 54,346 | | | | | | 13,350 | | | | | | — | | | | | | 67,696 | | | | ||
Total inventory
|
| | | | — | | | | | | — | | | | | | 141,182 | | | | | | 20,774 | | | | | | — | | | | | | 161,956 | | | | ||
Prepaid expenses and other current assets
|
| | | | — | | | | | | 1,276 | | | | | | 21,940 | | | | | | 3,634 | | | | | | — | | | | | | 26,850 | | | | ||
Total current assets
|
| | | | — | | | | | | 51,311 | | | | | | 342,187 | | | | | | 56,824 | | | | | | — | | | | | | 450,322 | | | | ||
Investments in subsidiaries
|
| | | | 4,106 | | | | | | (231,236 ) | | | | | | — | | | | | | — | | | | | | 227,130 | | | | | | — | | | | ||
Property and Equipment, at cost: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
Land
|
| | | | — | | | | | | — | | | | | | 7,487 | | | | | | 762 | | | | | | — | | | | | | 8,249 | | | | ||
Buildings and improvements
|
| | | | — | | | | | | 510 | | | | | | 63,000 | | | | | | 4,441 | | | | | | — | | | | | | 67,951 | | | | ||
Machinery and equipment
|
| | | | — | | | | | | 1,675 | | | | | | 392,068 | | | | | | 19,822 | | | | | | — | | | | | | 413,565 | | | | ||
| | | | | — | | | | | | 2,185 | | | | | | 462,555 | | | | | | 25,025 | | | | | | — | | | | | | 489,765 | | | | ||
Less accumulated depreciation
|
| | | | — | | | | | | (665 ) | | | | | | (312,759 ) | | | | | | (10,785 ) | | | | | | — | | | | | | (324,209 ) | | | | ||
Total property and equipment, net
|
| | | | — | | | | | | 1,520 | | | | | | 149,796 | | | | | | 14,240 | | | | | | — | | | | | | 165,556 | | | | ||
Other Assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
Intangible assets, net
|
| | | | — | | | | | | — | | | | | | 91,748 | | | | | | 12,411 | | | | | | — | | | | | | 104,159 | | | | ||
Goodwill
|
| | | | — | | | | | | — | | | | | | 449,366 | | | | | | 29,148 | | | | | | — | | | | | | 478,514 | | | | ||
Deferred income taxes
|
| | | | — | | | | | | — | | | | | | 50,347 | | | | | | — | | | | | | — | | | | | | 50,347 | | | | ||
Intercompany note receivable
|
| | | | — | | | | | | 1,135,073 | | | | | | — | | | | | | — | | | | | | (1,135,073 ) | | | | | | — | | | | ||
Other
|
| | | | — | | | | | | 3,925 | | | | | | 4,918 | | | | | | — | | | | | | — | | | | | | 8,843 | | | | ||
Total other assets
|
| | | | — | | | | | | 1,138,998 | | | | | | 596,379 | | | | | | 41,559 | | | | | | (1,135,073 ) | | | | | | 641,863 | | | | ||
| | | | $ | 4,106 | | | | | $ | 960,593 | | | | | $ | 1,088,362 | | | | | $ | 112,623 | | | | | $ | (907,943 ) | | | | | $ | 1,257,741 | | | | ||
LIABILITIES AND STOCKHOLDERS’EQUITY (DEFICIT)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
Current Liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
Accounts payable
|
| | | | — | | | | | $ | 377 | | | | | $ | 64,206 | | | | | $ | 10,815 | | | | | $ | — | | | | | $ | 75,398 | | | | ||
Accrued expenses
|
| | | | — | | | | | | 29,812 | | | | | | 124,723 | | | | | | 14,480 | | | | | | — | | | | | | 169,015 | | | | ||
Current portion of payable to related parties pursuant to tax receivable agreement
|
| | | | — | | | | | | 25,383 | | | | | | — | | | | | | — | | | | | | — | | | | | | 25,383 | | | | ||
Current portion of long-term debt
|
| | | | — | | | | | | 4,300 | | | | | | — | | | | | | — | | | | | | — | | | | | | 4,300 | | | | ||
Total current liabilities
|
| | | | — | | | | | | 59,872 | | | | | | 188,929 | | | | | | 25,295 | | | | | | — | | | | | | 274,096 | | | | ||
Deferred income taxes
|
| | | | — | | | | | | — | | | | | | — | | | | | | 2,722 | | | | | | — | | | | | | 2,722 | | | | ||
Intercompany note payable
|
| | | | — | | | | | | — | | | | | | 1,026,657 | | | | | | 108,416 | | | | | | (1,135,073 ) | | | | | | — | | | | | |
Long-term portion of payable to related parties pursuant to tax receivable agreement
|
| | | | — | | | | | | 54,336 | | | | | | — | | | | | | — | | | | | | — | | | | | | 54,336 | | | | ||
Other long-term liabilities
|
| | | | — | | | | | | 6,193 | | | | | | 74,835 | | | | | | 5,367 | | | | | | — | | | | | | 86,395 | | | | ||
Long-term debt
|
| | | | — | | | | | | 836,086 | | | | | | — | | | | | | — | | | | | | — | | | | | | 836,086 | | | | ||
Commitments and contingencies
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
Stockholders’ Equity (Deficit): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
Preferred stock
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | ||
Common stock
|
| | | | 683 | | | | | | 683 | | | | | | — | | | | | | — | | | | | | (683 ) | | | | | | 683 | | | | ||
Additional paid-in-capital
|
| | | | 751,452 | | | | | | 751,452 | | | | | | 236,242 | | | | | | 26,464 | | | | | | (1,014,158 ) | | | | | | 751,452 | | | | ||
(Accumulated deficit) retained earnings
|
| | | | (714,737 ) | | | | | | (714,737 ) | | | | | | (422,622 ) | | | | | | (36,312 ) | | | | | | 1,173,671 | | | | | | (714,737 ) | | | | ||
Accumulated other comprehensive loss
|
| | | | (33,292 ) | | | | | | (33,292 ) | | | | | | (15,679 ) | | | | | | (19,329 ) | | | | | | 68,300 | | | | | | (33,292 ) | | | | ||
Total stockholder’s equity (deficit)
|
| | | | 4,106 | | | | | | 4,106 | | | | | | (202,059 ) | | | | | | (29,177 ) | | | | | | 227,130 | | | | | | 4,106 | | | | ||
| | | | $ | 4,106 | | | | | $ | 960,593 | | | | | $ | 1,088,362 | | | | | $ | 112,623 | | | | | $ | (907,943 ) | | | | | $ | 1,257,741 | | | | ||
|
(Amounts in thousands)
|
| |
Guarantor
Ply Gem Holdings, Inc. |
| |
Issuer
Ply Gem Industries, Inc. |
| |
Guarantor
Subsidiaries |
| |
Non-
Guarantor Subsidiary |
| |
Consolidating
Adjustments |
| |
Consolidated
|
| ||||||||||||||||||
Cash flows from operating activities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income (loss)
|
| | | $ | 68,327 | | | | | $ | 68,327 | | | | | $ | 61,902 | | | | | $ | (2,279 ) | | | | | $ | (127,950 ) | | | | | $ | 68,327 | | |
Adjustments to reconcile net income (loss) to cash
provided by (used in) operating activities: |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Depreciation and amortization expense
|
| | | | — | | | | | | 316 | | | | | | 45,892 | | | | | | 7,039 | | | | | | — | | | | | | 53,247 | | |
Non-cash restructuring costs
|
| | | | — | | | | | | — | | | | | | 1,321 | | | | | | — | | | | | | — | | | | | | 1,321 | | |
Non-cash interest expense, net
|
| | | | — | | | | | | 14,044 | | | | | | — | | | | | | — | | | | | | — | | | | | | 14,044 | | |
Gain on foreign currency transactions
|
| | | | — | | | | | | — | | | | | | — | | | | | | (1,363 ) | | | | | | — | | | | | | (1,363 ) | | |
Non-cash litigation expense
|
| | | | — | | | | | | 650 | | | | | | — | | | | | | — | | | | | | — | | | | | | 650 | | |
Loss on modification or extinguishment of debt
|
| | | | — | | | | | | 2,106 | | | | | | — | | | | | | — | | | | | | — | | | | | | 2,106 | | |
Stock based compensation
|
| | | | — | | | | | | 1,345 | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,345 | | |
Deferred income taxes
|
| | | | — | | | | | | — | | | | | | 40,951 | | | | | | (1,328 ) | | | | | | — | | | | | | 39,623 | | |
Tax receivable agreement liability adjustment
|
| | | | — | | | | | | (10,749 ) | | | | | | — | | | | | | — | | | | | | — | | | | | | (10,749 ) | | |
Increase in tax uncertainty, net of valuation allowance
|
| | | | — | | | | | | — | | | | | | 604 | | | | | | — | | | | | | — | | | | | | 604 | | |
Equity in subsidiaries’ net income
|
| | | | (68,327 ) | | | | | | (59,623 ) | | | | | | — | | | | | | — | | | | | | 127,950 | | | | | | — | | |
Gain on sale of building
|
| | | | — | | | | | | — | | | | | | — | | | | | | (1,880 ) | | | | | | — | | | | | | (1,880 ) | | |
Other
|
| | | | — | | | | | | — | | | | | | (175 ) | | | | | | — | | | | | | — | | | | | | (175 ) | | |
Changes in operating assets and liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Accounts receivable, net
|
| | | | — | | | | | | — | | | | | | (34,212 ) | | | | | | (5,219 ) | | | | | | — | | | | | | (39,431 ) | | |
Inventories
|
| | | | — | | | | | | — | | | | | | (32,989 ) | | | | | | (1,494 ) | | | | | | — | | | | | | (34,483 ) | | |
Prepaid expenses and other current assets
|
| | | | — | | | | | | (334 ) | | | | | | (1,497 ) | | | | | | (235 ) | | | | | | — | | | | | | (2,066 ) | | |
Accounts payable
|
| | | | — | | | | | | (120 ) | | | | | | 14,890 | | | | | | (4,297 ) | | | | | | — | | | | | | 10,473 | | |
Accrued expenses
|
| | | | — | | | | | | (4,762 ) | | | | | | (985 ) | | | | | | (2,703 ) | | | | | | — | | | | | | (8,450 ) | | |
Cash payments on restructuring liabilities
|
| | | | — | | | | | | — | | | | | | (983 ) | | | | | | — | | | | | | — | | | | | | (983 ) | | |
Insurance proceeds in advance of settlement
|
| | | | — | | | | | | 8,725 | | | | | | — | | | | | | — | | | | | | — | | | | | | 8,725 | | |
Other
|
| | | | — | | | | | | — | | | | | | — | | | | | | 1,043 | | | | | | — | | | | | | 1,043 | | |
Net cash provided by (used in) operating activities
|
| | | | — | | | | | | 19,925 | | | | | | 94,719 | | | | | | (12,716 ) | | | | | | — | | | | | | 101,928 | | |
Cash flows from investing activities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Capital expenditures
|
| | | | — | | | | | | (2,530 ) | | | | | | (34,687 ) | | | | | | (3,169 ) | | | | | | — | | | | | | (40,386 ) | | |
Proceeds from sale of assets
|
| | | | — | | | | | | — | | | | | | 236 | | | | | | 2,278 | | | | | | — | | | | | | 2,514 | | |
Net cash used in investing activities
|
| | | | — | | | | | | (2,530 ) | | | | | | (34,451 ) | | | | | | (891 ) | | | | | | — | | | | | | (37,872 ) | | |
Cash flows from financing activities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Payments on long-term debt
|
| | | | — | | | | | | (44,300 ) | | | | | | — | | | | | | — | | | | | | — | | | | | | (44,300 ) | | |
Proceeds from intercompany investment
|
| | | | — | | | | | | 42,304 | | | | | | (62,255 ) | | | | | | 19,951 | | | | | | — | | | | | | | | |
Proceeds from exercises of employee stock options
|
| | | | — | | | | | | 1,203 | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,203 | | |
Payments to tax authority for employee stock based compensation
|
| | | | — | | | | | | (1,186 ) | | | | | | — | | | | | | — | | | | | | — | | | | | | (1,186 ) | | |
Net cash provided by (used in) financing activities
|
| | | | — | | | | | | (1,979 ) | | | | | | (62,255 ) | | | | | | 19,951 | | | | | | — | | | | | | (44,283 ) | | |
Impact of exchange rate movement on cash
|
| | | | — | | | | | | — | | | | | | — | | | | | | 46 | | | | | | — | | | | | | 46 | | |
Net increase (decrease) in cash and cash equivalents
|
| | | | — | | | | | | 15,416 | | | | | | (1,987 ) | | | | | | 6,390 | | | | | | — | | | | | | 19,819 | | |
Cash and cash equivalents at the beginning of the period
|
| | | | — | | | | | | 50,035 | | | | | | (10,918 ) | | | | | | 12,480 | | | | | | — | | | | | | 51,597 | | |
Cash and cash equivalents at the end of the period
|
| | | $ | — | | | | | $ | 65,451 | | | | | $ | (12,905 ) | | | | | $ | 18,870 | | | | | $ | — | | | | | $ | 71,416 | | |
|
(Amounts in thousands)
|
| |
Guarantor
Ply Gem Holdings, Inc. |
| |
Issuer
Ply Gem Industries, Inc. |
| |
Guarantor
Subsidiaries |
| |
Non-
Guarantor Subsidiary |
| |
Consolidating
Adjustments |
| |
Consolidated
|
| ||||||||||||||||||
Cash flows from operating activities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income (loss)
|
| | | $ | 75,487 | | | | | $ | 75,487 | | | | | $ | 162,342 | | | | | $ | (10,766 ) | | | | | $ | (227,063 ) | | | | | $ | 75,487 | | |
Adjustments to reconcile net income (loss) to
cash provided by (used in) operating activities: |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Depreciation and amortization expense
|
| | | | — | | | | | | 164 | | | | | | 49,484 | | | | | | 6,755 | | | | | | — | | | | | | 56,403 | | |
Non-cash restructuring costs
|
| | | | — | | | | | | — | | | | | | — | | | | | | 427 | | | | | | — | | | | | | 427 | | |
Non-cash interest expense, net
|
| | | | — | | | | | | 13,710 | | | | | | — | | | | | | — | | | | | | — | | | | | | 13,710 | | |
Gain on foreign currency transactions
|
| | | | — | | | | | | — | | | | | | — | | | | | | (299 ) | | | | | | — | | | | | | (299 ) | | |
Non-cash litigation expense
|
| | | | — | | | | | | — | | | | | | 1,875 | | | | | | — | | | | | | — | | | | | | 1,875 | | |
Loss on modification or extinguishment of debt
|
| | | | — | | | | | | 11,747 | | | | | | — | | | | | | — | | | | | | — | | | | | | 11,747 | | |
Stock based compensation
|
| | | | — | | | | | | 1,067 | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,067 | | |
Deferred income taxes
|
| | | | — | | | | | | — | | | | | | (56,712 ) | | | | | | (1,277 ) | | | | | | — | | | | | | (57,989 ) | | |
Tax receivable agreement liability adjustment
|
| | | | — | | | | | | 60,874 | | | | | | — | | | | | | — | | | | | | — | | | | | | 60,874 | | |
Increase in tax uncertainty, net of valuation allowance
|
| | | | — | | | | | | — | | | | | | 1,059 | | | | | | — | | | | | | — | | | | | | 1,059 | | |
Equity in subsidiaries’ net income
|
| | | | (75,487 ) | | | | | | (151,576 ) | | | | | | — | | | | | | — | | | | | | 227,063 | | | | | | — | | |
Gain on sale of building
|
| | | | — | | | | | | — | | | | | | (190 ) | | | | | | — | | | | | | — | | | | | | (190 ) | | |
Other
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Changes in operating assets and liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Accounts receivable, net
|
| | | | — | | | | | | — | | | | | | (18,122 ) | | | | | | 3,413 | | | | | | — | | | | | | (14,709 ) | | |
Inventories
|
| | | | — | | | | | | — | | | | | | (12,355 ) | | | | | | 813 | | | | | | — | | | | | | (11,542 ) | | |
Prepaid expenses and other current assets
|
| | | | — | | | | | | (28 ) | | | | | | (3,166 ) | | | | | | 227 | | | | | | — | | | | | | (2,967 ) | | |
Accounts payable
|
| | | | — | | | | | | 142 | | | | | | (2,449 ) | | | | | | 3,252 | | | | | | — | | | | | | 945 | | |
Accrued expenses
|
| | | | — | | | | | | 201 | | | | | | 8,253 | | | | | | 583 | | | | | | — | | | | | | 9,037 | | |
Cash payments on restructuring liabilities
|
| | | | — | | | | | | — | | | | | | (112 ) | | | | | | (428 ) | | | | | | — | | | | | | (540 ) | | |
Other
|
| | | | — | | | | | | — | | | | | | — | | | | | | 647 | | | | | | — | | | | | | 647 | | |
Net cash provided by (used in) operating activities
|
| | | | — | | | | | | 11,788 | | | | | | 129,907 | | | | | | 3,347 | | | | | | — | | | | | | 145,042 | | |
Cash flows from investing activities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Capital expenditures
|
| | | | — | | | | | | (1,749 ) | | | | | | (31,070 ) | | | | | | (3,182 ) | | | | | | — | | | | | | (36,001 ) | | |
Proceeds from sale of assets
|
| | | | — | | | | | | — | | | | | | 55 | | | | | | 128 | | | | | | — | | | | | | 183 | | |
Net cash used in investing activities
|
| | | | — | | | | | | (1,749 ) | | | | | | (31,015 ) | | | | | | (3,054 ) | | | | | | — | | | | | | (35,818 ) | | |
Cash flows from financing activities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Payments on long-term debt
|
| | | | — | | | | | | (164,300 ) | | | | | | — | | | | | | — | | | | | | — | | | | | | (164,300 ) | | |
Proceeds from intercompany investment
|
| | | | — | | | | | | 113,484 | | | | | | (104,866 ) | | | | | | (8,618 ) | | | | | | — | | | | | | — | | |
Proceeds from exercises of employee stock options
|
| | | | — | | | | | | 1,091 | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,091 | | |
Cash payments on tax receivable agreement
|
| | | | — | | | | | | (4,971 ) | | | | | | — | | | | | | — | | | | | | — | | | | | | (4,971 ) | | |
Net cash used in financing activities
|
| | | | — | | | | | | (54,696 ) | | | | | | (104,866 ) | | | | | | (8,618 ) | | | | | | — | | | | | | (168,180 ) | | |
Impact of exchange rate movement on cash
|
| | | | — | | | | | | — | | | | | | — | | | | | | 1,128 | | | | | | — | | | | | | 1,128 | | |
Net decrease in cash and cash equivalents
|
| | | | — | | | | | | (44,657 ) | | | | | | (5,974 ) | | | | | | (7,197 ) | | | | | | — | | | | | | (57,828 ) | | |
Cash and cash equivalents at the beginning of the period
|
| | | | — | | | | | | 94,692 | | | | | | (4,944 ) | | | | | | 19,677 | | | | | | — | | | | | | 109,425 | | |
Cash and cash equivalents at the end of the period
|
| | | $ | — | | | | | $ | 50,035 | | | | | $ | (10,918 ) | | | | | $ | 12,480 | | | | | $ | — | | | | | $ | 51,597 | | |
|
(Amounts in thousands)
|
| |
Guarantor
Ply Gem Holdings, Inc. |
| |
Issuer
Ply Gem Industries, Inc. |
| |
Guarantor
Subsidiaries |
| |
Non-
Guarantor Subsidiary |
| |
Consolidating
Adjustments |
| |
Consolidated
|
| ||||||||||||||||||
Cash flows from operating activities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income (loss)
|
| | | $ | 32,288 | | | | | $ | 32,288 | | | | | $ | 68,217 | | | | | $ | (15,845 ) | | | | | $ | (84,660 ) | | | | | $ | 32,288 | | |
Adjustments to reconcile net income (loss) to cash
provided by (used in) operating activities: |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Depreciation and amortization expense
|
| | | | — | | | | | | 312 | | | | | | 51,079 | | | | | | 7,009 | | | | | | — | | | | | | 58,400 | | |
Fair-value premium on purchased inventory
|
| | | | — | | | | | | — | | | | | | 54 | | | | | | — | | | | | | — | | | | | | 54 | | |
Non-cash restructuring costs
|
| | | | — | | | | | | — | | | | | | — | | | | | | 704 | | | | | | — | | | | | | 704 | | |
Non-cash interest expense, net
|
| | | | — | | | | | | 13,380 | | | | | | — | | | | | | — | | | | | | — | | | | | | 13,380 | | |
Loss on foreign currency transactions
|
| | | | — | | | | | | — | | | | | | — | | | | | | 3,166 | | | | | | — | | | | | | 3,166 | | |
Stock based compensation
|
| | | | — | | | | | | 1,960 | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,960 | | |
Deferred income taxes
|
| | | | — | | | | | | — | | | | | | (3,612 ) | | | | | | (1,289 ) | | | | | | — | | | | | | (4,901 ) | | |
Tax receivable agreement liability adjustment
|
| | | | — | | | | | | 12,947 | | | | | | — | | | | | | — | | | | | | — | | | | | | 12,947 | | |
Reduction in tax uncertainty, net of valuation allowance
|
| | | | — | | | | | | — | | | | | | (199 ) | | | | | | — | | | | | | — | | | | | | (199 ) | | |
Equity in subsidiaries’ net income (loss)
|
| | | | (32,288 ) | | | | | | (52,372 ) | | | | | | — | | | | | | — | | | | | | 84,660 | | | | | | — | | |
Gain on sale of building
|
| | | | — | | | | | | — | | | | | | (28 ) | | | | | | — | | | | | | — | | | | | | (28 ) | | |
Other
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Changes in operating assets and liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Accounts receivable, net
|
| | | | — | | | | | | — | | | | | | (10,949 ) | | | | | | 6,387 | | | | | | — | | | | | | (4,562 ) | | |
Inventories
|
| | | | — | | | | | | — | | | | | | 27,963 | | | | | | 1,958 | | | | | | — | | | | | | 29,921 | | |
Prepaid expenses and other current assets
|
| | | | — | | | | | | 1,165 | | | | | | 5,348 | | | | | | 216 | | | | | | — | | | | | | 6,729 | | |
Accounts payable
|
| | | | — | | | | | | (4 ) | | | | | | (11,712 ) | | | | | | 1,153 | | | | | | — | | | | | | (10,563 ) | | |
Accrued expenses
|
| | | | — | | | | | | 1,682 | | | | | | 2,452 | | | | | | (798 ) | | | | | | — | | | | | | 3,336 | | |
Cash payments on restructuring liabilities
|
| | | | — | | | | | | — | | | | | | (201 ) | | | | | | (1,444 ) | | | | | | — | | | | | | (1,645 ) | | |
Other
|
| | | | — | | | | | | — | | | | | | (1,624 ) | | | | | | — | | | | | | — | | | | | | (1,624 ) | | |
Net cash provided by operating activities
|
| | | | — | | | | | | 11,358 | | | | | | 126,788 | | | | | | 1,217 | | | | | | — | | | | | | 139,363 | | |
Cash flows from investing activities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Acquisitions, net of cash acquired
|
| | | | | | | | | | — | | | | | | (21,000 ) | | | | | | — | | | | | | — | | | | | | (21,000 ) | | |
Capital expenditures
|
| | | | — | | | | | | (2,848 ) | | | | | | (28,181 ) | | | | | | (2,831 ) | | | | | | — | | | | | | (33,860 ) | | |
Proceeds from sale of assets
|
| | | | — | | | | | | — | | | | | | 85 | | | | | | 37 | | | | | | — | | | | | | 122 | | |
Net cash used in investing activities
|
| | | | | | | | | | (2,848 ) | | | | | | (49,096 ) | | | | | | (2,794 ) | | | | | | — | | | | | | (54,738 ) | | |
Cash flows from financing activities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Payments on long-term debt
|
| | | | — | | | | | | (4,300 ) | | | | | | — | | | | | | — | | | | | | — | | | | | | (4,300 ) | | |
Proceeds from intercompany investment
|
| | | | — | | | | | | 66,189 | | | | | | (76,791 ) | | | | | | 10,602 | | | | | | — | | | | | | — | | |
Proceeds from exercises of employee stock options
|
| | | | — | | | | | | 2,198 | | | | | | — | | | | | | — | | | | | | — | | | | | | 2,198 | | |
Cash payments on tax receivable agreement
|
| | | | — | | | | | | (48 ) | | | | | | — | | | | | | — | | | | | | — | | | | | | (48 ) | | |
Debt issuance costs paid
|
| | | | — | | | | | | (1,412 ) | | | | | | — | | | | | | — | | | | | | — | | | | | | (1,412 ) | | |
Net cash provided by (used in) financing activities
|
| | | | — | | | | | | 62,627 | | | | | | (76,791 ) | | | | | | 10,602 | | | | | | — | | | | | | (3,562 ) | | |
Impact of exchange rate movement on cash
|
| | | | — | | | | | | — | | | | | | — | | | | | | (4,800 ) | | | | | | — | | | | | | (4,800 ) | | |
Net decrease in cash and cash equivalents
|
| | | | — | | | | | | 71,137 | | | | | | 901 | | | | | | 4,225 | | | | | | — | | | | | | 76,263 | | |
Cash and cash equivalents at the beginning of the period
|
| | | | — | | | | | | 23,555 | | | | | | (5,845 ) | | | | | | 15,452 | | | | | | — | | | | | | 33,162 | | |
Cash and cash equivalents at the end of the period
|
| | | $ | — | | | | | $ | 94,692 | | | | | $ | (4,944 ) | | | | | $ | 19,677 | | | | | $ | — | | | | | $ | 109,425 | | |
|
| | |
Siding, Fencing, and Stone
|
| |||||||||||||||
| | |
As of
November 25, 2017 |
| |
As of
November 26, 2016 |
| |
As of
November 28, 2015 |
| |||||||||
Assumptions: | | | | | | | | | | | | | | | | | | | |
Income approach: | | | | | | | | | | | | | | | | | | | |
Estimated housing starts in terminal year
|
| | | | 1,049,000 | | | | | | 1,100,000 | | | | | | 1,100,000 | | |
Terminal growth rate
|
| |
3.0%
|
| |
3.0%
|
| |
3.0%
|
| |||||||||
Discount rate
|
| |
11.5%
|
| |
11.0%
|
| |
11.5%
|
| |||||||||
Market approach: | | | | | | | | | | | | | | | | | | | |
Control premiums
|
| |
5.0%
|
| |
5.0%
|
| |
5.0%
|
| |||||||||
Sensitivities: | | | | | | | | | | | | | | | | | | | |
(Amounts in thousands) | | | | | | | | | | | | | | | | | | | |
Estimated fair value decrease in the event of a 1% decrease in the terminal year growth
|
| | | $ | 121,553 | | | | | $ | 116,628 | | | | | $ | 104,863 | | |
Estimated fair value decrease in the event of a 1% increase in the discount rate
|
| | | | 203,109 | | | | | | 203,838 | | | | | | 189,363 | | |
Estimated fair value decrease in the event of a 1% decrease in the control premium
|
| | | | 17,141 | | | | | | 17,363 | | | | | | 16,790 | | |
| | |
Windows and Doors
|
| |||||||||||||||
| | |
As of
November 25, 2017 |
| |
As of
November 26, 2016 |
| |
As of
November 28, 2015 |
| |||||||||
Assumptions: | | | | | | | | | | | | | | | | | | | |
Income approach: | | | | | | | | | | | | | | | | | | | |
Estimated housing starts in terminal year
|
| | | | 1,049,000 | | | | | | 1,100,000 | | | | | | 1,100,000 | | |
Terminal growth rate
|
| | | | 3.5 % | | | | | | 3.5 % | | | | | | 3.5 % | | |
Discount rate
|
| | | | 18.0 % | | | | | | 16.0 % | | | | | | 17.0 % | | |
Market approach: | | | | | |||||||||||||||
Control premiums
|
| | | | 10.0 % | | | | | | 10.0 % | | | | | | 10.0 % | | |
Sensitivities: | | | | | |||||||||||||||
(Amounts in thousands) | | | | | | | | | | | | | | | | | | | |
Estimated fair value decrease in the event of a 1% decrease in the terminal year growth
|
| | | $ | 18,582 | | | | | $ | 14,695 | | | | | $ | 12,554 | | |
Estimated fair value decrease in the event of a 1% increase in the discount rate
|
| | | | 43,485 | | | | | | 37,662 | | | | | | 35,285 | | |
Estimated fair value decrease in the event of a 1% decrease in the control premium
|
| | | | 5,568 | | | | | | 4,885 | | | | | | 4,451 | | |
(Amounts in thousands)
|
| |
As of
November 25, 2017 |
| |
As of
November 26, 2016 |
| |
As of
November 28, 2015 |
| | |||||||||||
Estimated Windows and Doors reporting unit fair value increase (decrease) in the event of a 10% increase in the weighting of the market multiples method
|
| | | $ | (5,000 ) | | | | | $ | 4,000 | | | | | $ | 3,000 | | | | ||
Estimated Siding, Fencing, and Stone reporting unit fair value increase (decrease) in the event of a 10% increase in the weighting of the market multiples method
|
| | | | (10,000 ) | | | | | | 3,000 | | | | | | 2,000 | | | | | |
| | |
Year ended December 31,
|
| |||||||||||||||
(Amounts in thousands)
|
| |
2017
|
| |
2016
|
| |
2015
|
| |||||||||
Net Sales | | | | | | | | | | | | | | | | | | | |
Siding, Fencing, and Stone
|
| | | $ | 970,198 | | | | | $ | 886,851 | | | | | $ | 840,118 | | |
Windows and Doors
|
| | | | 1,086,105 | | | | | | 1,024,993 | | | | | | 999,608 | | |
Operating earnings (loss) | | | | | | | | | | | | | | | | | | | |
Siding, Fencing, and Stone
|
| | | | 146,753 | | | | | | 157,058 | | | | | | 134,654 | | |
Windows and Doors
|
| | | | 56,435 | | | | | | 43,579 | | | | | | 18,195 | | |
Unallocated
|
| | | | (28,930 ) | | | | | | (32,141 ) | | | | | | (30,317 ) | | |
Foreign currency gain (loss) | | | | | | | | | | | | | | | | | | | |
Siding, Fencing, and Stone
|
| | | | 303 | | | | | | 204 | | | | | | (954 ) | | |
Windows and Doors
|
| | | | 1,060 | | | | | | 95 | | | | | | (2,212 ) | | |
Interest income (expense), net | | | | | | | | | | | | | | | | | | | |
Siding, Fencing, and Stone
|
| | | | 29 | | | | | | 16 | | | | | | 22 | | |
Windows and Doors
|
| | | | 21 | | | | | | 12 | | | | | | 17 | | |
Unallocated
|
| | | | (69,333 ) | | | | | | (72,710 ) | | | | | | (74,858 ) | | |
Income tax benefit (expense) | | | | | | | | | | | | | | | | | | | |
Unallocated
|
| | | | (46,654 ) | | | | | | 51,995 | | | | | | 688 | | |
| | |
Year ended December 31,
|
| |||||||||||||||||||||||||||||||||
(Amounts in thousands)
|
| |
2017
|
| |
2016
|
| |
2015
|
| |||||||||||||||||||||||||||
Statement of operations data: | | | | | | | | ||||||||||||||||||||||||||||||
Net sales
|
| | | $ | 970,198 | | | | | | 100.0 % | | | | | $ | 886,851 | | | | | | 100.0 % | | | | | $ | 840,118 | | | | | | 100.0 % | | |
Gross profit
|
| | | | 248,249 | | | | | | 25.6 % | | | | | | 259,485 | | | | | | 29.3 % | | | | | | 238,326 | | | | | | 28.4 % | | |
SG&A expense
|
| | | | 92,541 | | | | | | 9.5 % | | | | | | 89,704 | | | | | | 10.1 % | | | | | | 90,760 | | | | | | 10.8 % | | |
Amortization of intangible assets
|
| | | | 8,955 | | | | | | 0.9 % | | | | | | 12,723 | | | | | | 1.4 % | | | | | | 12,912 | | | | | | 1.5 % | | |
Operating earnings
|
| | | | 146,753 | | | | | | 15.1 % | | | | | | 157,058 | | | | | | 17.7 % | | | | | | 134,654 | | | | | | 16.0 % | | |
Currency transaction gain (loss)
|
| | | | 303 | | | | | | — % | | | | | | 204 | | | | | | — % | | | | | | (954 ) | | | | | | (0.1 )% | | |
| | |
Year ended December 31,
|
| |||||||||||||||||||||||||||||||||
(Amounts in thousands)
|
| |
2017
|
| |
2016
|
| |
2015
|
| |||||||||||||||||||||||||||
Statement of operations data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net sales
|
| | | $ | 1,086,105 | | | | | | 100.0 % | | | | | $ | 1,024,993 | | | | | | 100.0 % | | | | | $ | 999,608 | | | | | | 100.0 % | | |
Gross profit
|
| | | | 220,264 | | | | | | 20.3 % | | | | | | 202,789 | | | | | | 19.8 % | | | | | | 181,386 | | | | | | 18.1 % | | |
SG&A expense
|
| | | | 151,513 | | | | | | 14.0 % | | | | | | 146,869 | | | | | | 14.3 % | | | | | | 150,797 | | | | | | 15.1 % | | |
Amortization of intangible assets
|
| | | | 12,316 | | | | | | 1.1 % | | | | | | 12,341 | | | | | | 1.2 % | | | | | | 12,394 | | | | | | 1.2 % | | |
Operating earnings
|
| | | | 56,435 | | | | | | 5.2 % | | | | | | 43,579 | | | | | | 4.3 % | | | | | | 18,195 | | | | | | 1.8 % | | |
Currency transaction gain (loss)
|
| | | | 1,060 | | | | | | 0.1 % | | | | | | 95 | | | | | | — % | | | | | | (2,212 ) | | | | | | (0.2 )% | | |
| | |
Year ended December 31,
|
| |||||||||||||||
(Amounts in thousands)
|
| |
2017
|
| |
2016
|
| |
2015
|
| |||||||||
Statement of operations data: | | | | | | | | | | | | | | | | | | | |
SG&A expense
|
| | | $ | (28,930 ) | | | | | $ | (32,141 ) | | | | | $ | (30,317 ) | | |
Operating loss
|
| | | | (28,930 ) | | | | | | (32,141 ) | | | | | | (30,317 ) | | |
Interest expense
|
| | | | (69,363 ) | | | | | | (72,716 ) | | | | | | (74,863 ) | | |
Interest income
|
| | | | 30 | | | | | | 6 | | | | | | 5 | | |
Tax receivable agreement liability adjustment
|
| | | | 10,749 | | | | | | (60,874 ) | | | | | | (12,947 ) | | |
Loss on modification or extinguishment of debt
|
| | | | (2,106 ) | | | | | | (11,747 ) | | | | | | — | | |
(Provision) benefit for income taxes
|
| | | $ | (46,654 ) | | | | | $ | 51,995 | | | | | $ | 688 | | |
(Amounts in thousands)
|
| |
For the year ended
|
| |||||||||
|
December 31,
2017 |
| |
December 31,
2016 |
| ||||||||
Loss on modification of debt: | | | | | | | | | | | | | |
Term Loan Facility unamortized discount
|
| | | $ | (1,681 ) | | | | | $ | (9,375 ) | | |
Term Loan Facility unamortized debt issuance costs
|
| | | | (425 ) | | | | | | (2,372 ) | | |
Total loss on modification or extinguishment of debt
|
| | | $ | (2,106 ) | | | | | $ | (11,747 ) | | |
|
(Amounts in thousands)
|
| |
Total
Amount |
| |
Less Than
1 Year |
| |
1 – 3 Years
|
| |
3 – 5 Years
|
| |
More than
5 Years |
| |||||||||||||||
Long-term debt
(1)
|
| | | $ | 883,875 | | | | | $ | 4,300 | | | | | $ | 28,600 | | | | | $ | 850,975 | | | | | $ | — | | |
Interest payments
(2)
|
| | | | 225,142 | | | | | | 53,841 | | | | | | 105,489 | | | | | | 65,812 | | | | | | — | | |
Non-cancelable lease commitments
(3)
|
| | | | 140,048 | | | | | | 31,590 | | | | | | 49,578 | | | | | | 33,449 | | | | | | 25,431 | | |
Purchase obligations
(4)
|
| | | | 120,600 | | | | | | 120,600 | | | | | | — | | | | | | — | | | | | | — | | |
Other long-term liabilities
(5)
|
| | | | 13,581 | | | | | | 1,358 | | | | | | 2,716 | | | | | | 2,716 | | | | | | 6,791 | | |
| | | | $ | 1,383,246 | | | | | $ | 211,689 | | | | | $ | 186,383 | | | | | $ | 952,952 | | | | | $ | 32,222 | | |
|
(Amounts in thousands, except shares and per share data)
|
| |
Successor
|
| | |
Predecessor
|
| |
Predecessor
|
| |||||||||
|
April 13, 2018 –
June 30, 2018 |
| | |
April 1, 2018 –
April 12, 2018 |
| |
Three months ended
July 1, 2017 |
| |||||||||||
Net sales
|
| | | $ | 597,936 | | | | | | $ | 69,739 | | | | | $ | 544,767 | | |
Cost of products sold
|
| | | | 479,402 | | | | | | | 54,820 | | | | | | 407,879 | | |
Gross profit
|
| | | | 118,534 | | | | | | | 14,919 | | | | | | 136,888 | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | |
Selling, general and administrative expenses
|
| | | | 69,812 | | | | | | | 10,689 | | | | | | 65,531 | | |
Acquisition related expenses
|
| | | | 11,186 | | | | | | | 67,802 | | | | | | — | | |
Amortization of intangible assets
|
| | | | 24,096 | | | | | | | 751 | | | | | | 5,258 | | |
Total operating expenses
|
| | | | 105,094 | | | | | | | 79,242 | | | | | | 70,789 | | |
Operating earnings (loss)
|
| | | | 13,440 | | | | | | | (64,323 ) | | | | | | 66,099 | | |
Foreign currency gain (loss)
|
| | | | (1,516 ) | | | | | | | 609 | | | | | | 617 | | |
Interest expense
|
| | | | (43,787 ) | | | | | | | (2,599 ) | | | | | | (17,399 ) | | |
Interest income
|
| | | | 24 | | | | | | | 2 | | | | | | 19 | | |
Tax receivable agreement liability adjustment
|
| | | | — | | | | | | | (5,237 ) | | | | | | — | | |
Income (loss) before provision (benefit) for income taxes
|
| | | | (31,839 ) | | | | | | | (71,548 ) | | | | | | 49,336 | | |
Provision (benefit) for income taxes
|
| | | | (11,428 ) | | | | | | | (9,331 ) | | | | | | 19,477 | | |
Net income (loss)
|
| | | $ | (20,411 ) | | | | | | $ | (62,217 ) | | | | | $ | 29,859 | | |
Comprehensive income (loss)
|
| | | $ | (27,155 ) | | | | | | $ | (61,623 ) | | | | | $ | 30,708 | | |
Net income (loss) attributable to common shareholders per share:
|
| | | | | | | | | | | | | | | | | | | |
Basic
|
| | | $ | (3.20 ) | | | | | | $ | (0.91 ) | | | | | $ | 0.44 | | |
Diluted
|
| | | $ | (3.20 ) | | | | | | $ | (0.91 ) | | | | | $ | 0.43 | | |
Weighted average shares outstanding: | | | | | | | | | | | | | | | | | | | | |
Basic
|
| | | | 6,379,748 | | | | | | | 68,644,725 | | | | | | 68,435,315 | | |
Diluted
|
| | | | 6,379,748 | | | | | | | 68,644,725 | | | | | | 69,019,692 | | |
(Amounts in thousands, except shares and per share data)
|
| |
Successor
|
| | |
Predecessor
|
| |
Predecessor
|
| |||||||||
|
April 13, 2018 –
June 30, 2018 |
| | |
January 1, 2018 –
April 12, 2018 |
| |
Six months ended
July 1, 2017 |
| |||||||||||
Net sales
|
| | | $ | 597,936 | | | | | | $ | 529,643 | | | | | $ | 974,782 | | |
Cost of products sold
|
| | | | 479,402 | | | | | | | 426,674 | | | | | | 748,369 | | |
Gross profit
|
| | | | 118,534 | | | | | | | 102,969 | | | | | | 226,413 | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | |
Selling, general and administrative expenses
|
| | | | 69,812 | | | | | | | 81,364 | | | | | | 137,886 | | |
Acquisition related expenses
|
| | | | 11,186 | | | | | | | 67,802 | | | | | | — | | |
Amortization of intangible assets
|
| | | | 24,096 | | | | | | | 6,105 | | | | | | 10,602 | | |
Total operating expenses
|
| | | | 105,094 | | | | | | | 155,271 | | | | | | 148,488 | | |
Operating earnings (loss)
|
| | | | 13,440 | | | | | | | (52,302 ) | | | | | | 77,925 | | |
Foreign currency gain (loss)
|
| | | | (1,516 ) | | | | | | | (132 ) | | | | | | 772 | | |
Interest expense
|
| | | | (43,787 ) | | | | | | | (19,054 ) | | | | | | (34,285 ) | | |
Interest income
|
| | | | 24 | | | | | | | 22 | | | | | | 33 | | |
Tax receivable agreement liability adjustment
|
| | | | — | | | | | | | (5,237 ) | | | | | | — | | |
Income (loss) before provision (benefit) for income taxes
|
| | | | (31,839 ) | | | | | | | (76,703 ) | | | | | | 44,445 | | |
Provision (benefit) for income taxes
|
| | | | (11,428 ) | | | | | | | (9,923 ) | | | | | | 18,223 | | |
Net income (loss)
|
| | | $ | (20,411 ) | | | | | | $ | (66,780 ) | | | | | $ | 26,222 | | |
Comprehensive income (loss)
|
| | | $ | (27,155 ) | | | | | | $ | (67,106 ) | | | | | $ | 27,090 | | |
Net income (loss) attributable to common shareholders per share:
|
| | | | | | | | | | | | | | | | | | | |
Basic
|
| | | $ | (3.20 ) | | | | | | $ | (0.97 ) | | | | | $ | 0.38 | | |
Diluted
|
| | | $ | (3.20 ) | | | | | | $ | (0.97 ) | | | | | $ | 0.38 | | |
Weighted average shares outstanding: | | | | | | | | | | | | | | | | | | | | |
Basic
|
| | | | 6,379,748 | | | | | | | 68,557,814 | | | | | | 68,417,602 | | |
Diluted
|
| | | | 6,379,748 | | | | | | | 68,557,814 | | | | | | 68,988,527 | | |
(Amounts in thousands, except share amounts)
|
| |
Successor
|
| |
Predecessor
|
| ||||||
|
June 30, 2018
|
| |
December 31, 2017
|
| ||||||||
ASSETS
|
| | | | | | | | | | | | |
Current Assets: | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 53,609 | | | | | $ | 71,416 | | |
Accounts receivable, less allowances of $4,287 and $3,137, respectively
|
| | | | 340,107 | | | | | | 249,533 | | |
Inventories: | | | | | | | | | | | | | |
Raw materials
|
| | | | 111,123 | | | | | | 79,330 | | |
Work in process
|
| | | | 41,882 | | | | | | 36,440 | | |
Finished goods
|
| | | | 103,220 | | | | | | 80,721 | | |
Total inventory
|
| | | | 256,225 | | | | | | 196,491 | | |
Prepaid expenses and other current assets
|
| | | | 25,964 | | | | | | 45,900 | | |
Total current assets
|
| | | | 675,905 | | | | | | 563,340 | | |
Property and Equipment: | | | | | | | | | | | | | |
Land
|
| | | | 7,007 | | | | | | 8,229 | | |
Buildings and improvements
|
| | | | 71,859 | | | | | | 68,005 | | |
Machinery and equipment
|
| | | | 231,808 | | | | | | 450,554 | | |
Total property and equipment
|
| | | | 310,674 | | | | | | 526,788 | | |
Less accumulated depreciation
|
| | | | (6,985 ) | | | | | | (352,256 ) | | |
Total property and equipment, net
|
| | | | 303,689 | | | | | | 174,532 | | |
Other Assets: | | | | | | | | | | | | | |
Intangible assets, net
|
| | | | 1,662,152 | | | | | | 83,675 | | |
Goodwill
|
| | | | 1,232,392 | | | | | | 480,563 | | |
Deferred income taxes
|
| | | | — | | | | | | 10,523 | | |
Other
|
| | | | 12,108 | | | | | | 6,934 | | |
Total other assets
|
| | | | 2,906,652 | | | | | | 581,695 | | |
| | | | $ | 3,886,246 | | | | | $ | 1,319,567 | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
| | | | | | | | | | | | |
Current Liabilities: | | | | | | | | | | | | | |
Accounts payable
|
| | | $ | 113,793 | | | | | $ | 85,720 | | |
Accrued expenses
|
| | | | 237,640 | | | | | | 185,857 | | |
Current portion of payable to related parties pursuant to tax receivable agreement
|
| | | | 24,894 | | | | | | 51,356 | | |
Current portion of long-term debt
|
| | | | 17,550 | | | | | | 4,300 | | |
Total current liabilities
|
| | | | 393,877 | | | | | | 327,233 | | |
Deferred income taxes
|
| | | | 332,513 | | | | | | 1,530 | | |
Long-term portion of payable to related parties pursuant to tax receivable agreement
|
| | | | 23,362 | | | | | | 18,125 | | |
Other long-term liabilities
|
| | | | 91,076 | | | | | | 83,424 | | |
Long-term debt
|
| | | | 2,434,598 | | | | | | 807,334 | | |
Commitments and contingencies | | | | | | | | | | | | | |
Stockholders’ Equity: | | | | | | | | | | | | | |
Preferred stock $0.01 par, 50,000,000 shares authorized, none issued and outstanding at December 31, 2017 (Predecessor)
|
| | | | — | | | | | | — | | |
Common stock $0.01 par, 6,379,748 issued and outstanding at June 30, 2018 (Successor) and common stock $0.01 par, 250,000,000 shares authorized 68,515,697 issued and outstanding at December 31, 2017 (Predecessor)
|
| | | | 64 | | | | | | 685 | | |
Additional paid-in-capital
|
| | | | 637,911 | | | | | | 756,096 | | |
Accumulated deficit
|
| | | | (20,411 ) | | | | | | (645,090 ) | | |
Accumulated other comprehensive loss
|
| | | | (6,744 ) | | | | | | (29,770 ) | | |
Total stockholders’ equity
|
| | | | 610,820 | | | | | | 81,921 | | |
| | | | $ | 3,886,246 | | | | | $ | 1,319,567 | | |
|
(Amounts in thousands)
|
| |
Successor
|
| | |
Predecessor
|
| |
Predecessor
|
| |||||||||
|
April 13, 2018 –
June 30, 2018 |
| | |
January 1, 2018 –
April 12, 2018 |
| |
Six months ended
July 1, 2017 |
| |||||||||||
Cash flows from operating activities: | | | | | | | | | | | | | | | | | | | | |
Net income (loss)
|
| | | $ | (20,411 ) | | | | | | $ | (66,780 ) | | | | | $ | 26,222 | | |
Adjustments to reconcile net income (loss) to cash used in operating activities:
|
| | | | | | | | | | | | | | | | | | | |
Depreciation and amortization expense
|
| | | | 31,081 | | | | | | | 15,274 | | | | | | 26,555 | | |
Fair-value premium on purchased inventory
|
| | | | 35,443 | | | | | | | — | | | | | | — | | |
Non-cash acquisition costs
|
| | | | — | | | | | | | 37,922 | | | | | | — | | |
Non-cash restructuring costs
|
| | | | 1,121 | | | | | | | 127 | | | | | | 1,064 | | |
Non-cash interest expense, net
|
| | | | 8,004 | | | | | | | 3,748 | | | | | | 6,997 | | |
(Gain) loss on foreign currency transactions
|
| | | | 1,516 | | | | | | | 132 | | | | | | (772 ) | | |
Stock based compensation
|
| | | | — | | | | | | | 239 | | | | | | 422 | | |
Deferred income taxes
|
| | | | (22,944 ) | | | | | | | (108 ) | | | | | | 15,508 | | |
Tax receivable agreement liability adjustment
|
| | | | — | | | | | | | 5,237 | | | | | | — | | |
Increase (reduction) in tax uncertainty
|
| | | | 2 | | | | | | | 93 | | | | | | (65 ) | | |
Gain on sale of building
|
| | | | — | | | | | | | — | | | | | | (1,880 ) | | |
Other
|
| | | | 22 | | | | | | | (2 ) | | | | | | (54 ) | | |
Changes in operating assets and liabilities: | | | | | | | | | | | | | | | | | | | | |
Accounts receivable, net
|
| | | | (69,797 ) | | | | | | | 5,251 | | | | | | (85,918 ) | | |
Inventories
|
| | | | (3,326 ) | | | | | | | (38,638 ) | | | | | | (32,870 ) | | |
Prepaid expenses and other assets
|
| | | | 15,341 | | | | | | | 27,760 | | | | | | (1,858 ) | | |
Accounts payable
|
| | | | (6,188 ) | | | | | | | 14,253 | | | | | | 27,227 | | |
Accrued expenses
|
| | | | 49,619 | | | | | | | (7,372 ) | | | | | | (6,909 ) | | |
Cash payments on restructuring liabilities
|
| | | | (339 ) | | | | | | | (218 ) | | | | | | (257 ) | | |
Securities litigation settlement payment
|
| | | | — | | | | | | | (9,299 ) | | | | | | — | | |
Cash payments on acquisition related expenses
|
| | | | (52,673 ) | | | | | | | (20,343 ) | | | | | | — | | |
Other
|
| | | | (1,614 ) | | | | | | | (630 ) | | | | | | (311 ) | | |
Net cash used in operating activities
|
| | | | (35,143 ) | | | | | | | (33,354 ) | | | | | | (26,899 ) | | |
Cash flows from investing activities: | | | | | | | | | | | | | | | | | | | | |
Acquisitions, net of cash acquired
|
| | | | (2,754,799 ) | | | | | | | — | | | | | | — | | |
Capital expenditures
|
| | | | (10,008 ) | | | | | | | (11,288 ) | | | | | | (17,895 ) | | |
Proceeds from sale of assets
|
| | | | — | | | | | | | 11 | | | | | | 2,424 | | |
Net cash used in investing activities
|
| | | | (2,764,807 ) | | | | | | | (11,277 ) | | | | | | (15,471 ) | | |
Cash flows from financing activities: | | | | | | | | | | | | | | | | | | | | |
Proceeds from long-term debt
|
| | | | 2,376,712 | | | | | | | — | | | | | | — | | |
Net revolver borrowings
|
| | | | 130,000 | | | | | | | 40,000 | | | | | | — | | |
Payments on long-term debt
|
| | | | — | | | | | | | (1,075 ) | | | | | | (2,150 ) | | |
Cash payments on tax receivable agreement
|
| | | | — | | | | | | | (26,462 ) | | | | | | — | | |
Proceeds from equity contribution
|
| | | | 425,203 | | | | | | | — | | | | | | — | | |
Payments to tax authority for employee stock based compensation
|
| | | | — | | | | | | | — | | | | | | (1,186 ) | | |
Proceeds from exercises of employee stock options
|
| | | | — | | | | | | | 2,862 | | | | | | 745 | | |
Cash payments on appraisal shares liability
|
| | | | (19,537 ) | | | | | | | — | | | | | | — | | |
Debt issuance costs paid
|
| | | | (56,892 ) | | | | | | | — | | | | | | — | | |
Net cash provided by (used in) financing activities
|
| | | | 2,855,486 | | | | | | | 15,325 | | | | | | (2,591 ) | | |
Impact of exchange rate movements on cash
|
| | | | (1,927 ) | | | | | | | (55 ) | | | | | | 536 | | |
Net increase (decrease) in cash and cash equivalents
|
| | | | 53,609 | | | | | | | (29,361 ) | | | | | | (44,425 ) | | |
Cash and cash equivalents at the beginning of the period
|
| | | | — | | | | | | | 71,416 | | | | | | 51,597 | | |
Cash and cash equivalents at the end of the period
|
| | | $ | 53,609 | | | | | | $ | 42,055 | | | | | $ | 7,172 | | |
| | | | | | | | | | | |
Siding, Fencing, and Stone Net Sales Disaggregation
|
| |
For the three months ended
|
| |||||||||
|
June 30, 2018
|
| |
July 1, 2017
|
| ||||||||
Vinyl siding
|
| | | $ | 145,014 | | | | | $ | 146,612 | | |
Metal
|
| | | | 76,846 | | | | | | 67,275 | | |
Injection molded
|
| | | | 22,049 | | | | | | 20,506 | | |
Stone
|
| | | | 3,664 | | | | | | 4,519 | | |
Other products
|
| | | | 29,414 | | | | | | 24,681 | | |
Total
|
| | | $ | 276,987 | | | | | $ | 263,593 | | |
|
Siding, Fencing, and Stone Net Sales Disaggregation
|
| |
For the six months ended
|
| |||||||||
|
June 30, 2018
|
| |
July 1, 2017
|
| ||||||||
Vinyl siding
|
| | | $ | 250,495 | | | | | $ | 250,016 | | |
Metal
|
| | | | 126,439 | | | | | | 117,910 | | |
Injection molded
|
| | | | 34,540 | | | | | | 35,086 | | |
Stone
|
| | | | 12,636 | | | | | | 13,011 | | |
Other products
|
| | | | 49,022 | | | | | | 38,407 | | |
Total
|
| | | $ | 473,132 | | | | | $ | 454,430 | | |
|
Windows and Doors Net Sales Disaggregation
|
| |
For the three months ended
|
| |
For the three months ended
|
| ||||||||||||||||||
|
June 30, 2018
|
| |
July 1, 2017
|
| ||||||||||||||||||||
|
New
Construction |
| |
Repair &
Remodel |
| |
New
Construction |
| |
Repair &
Remodel |
| ||||||||||||||
Vinyl
|
| | | $ | 234,193 | | | | | $ | 139,254 | | | | | $ | 176,919 | | | | | $ | 83,700 | | |
Aluminum
|
| | | | 6,439 | | | | | | 40 | | | | | | 10,484 | | | | | | — | | |
Other
|
| | | | 9,403 | | | | | | 1,359 | | | | | | 10,023 | | | | | | 48 | | |
Total
|
| | | $ | 250,035 | | | | | $ | 140,653 | | | | | $ | 197,426 | | | | | $ | 83,748 | | |
|
Windows and Doors Net Sales Disaggregation
|
| |
For the six months ended
|
| |
For the six months ended
|
| ||||||||||||||||||
|
June 30, 2018
|
| |
July 1, 2017
|
| ||||||||||||||||||||
|
New
Construction |
| |
Repair &
Remodel |
| |
New
Construction |
| |
Repair &
Remodel |
| ||||||||||||||
Vinyl
|
| | | $ | 402,470 | | | | | $ | 207,269 | | | | | $ | 332,273 | | | | | $ | 146,618 | | |
Aluminum
|
| | | | 24,393 | | | | | | 40 | | | | | | 19,826 | | | | | | — | | |
Other
|
| | | | 18,861 | | | | | | 1,414 | | | | | | 21,564 | | | | | | 71 | | |
Total
|
| | | $ | 445,724 | | | | | $ | 208,723 | | | | | $ | 373,663 | | | | | $ | 146,689 | | |
|
| Buildings and improvements | | | 8 – 25 years | |
| Machinery and equipment, including leases | | | 5 – 8 years | |
| Leasehold improvements | | | Term of lease or useful life, whichever is shorter | |
(Amounts in thousands)
|
| |
June 30,
2018 |
| |
December 31,
2017 |
| ||||||
Foreign currency hedge included in other current assets
|
| | | $ | 988 | | | | | $ | 6 | | |
(Amounts in thousands)
Description |
| |
Carrying
Value |
| |
Fair
Value Total |
| |
Quoted Prices
in Active Markets for Identical Assets (Level 1) |
| |
Significant
Other Observable Inputs (Level 2) |
| |
Significant
Unobservable Inputs (Level 3) |
| |||||||||||||||
Liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Senior Notes – 8.00%
|
| | | $ | 645,000 | | | | | $ | 665,963 | | | | | $ | 665,963 | | | | | $ | — | | | | | $ | — | | |
Term Loan Facility
|
| | | | 1,755,000 | | | | | | 1,749,524 | | | | | | — | | | | | | 1,749,524 | | | | | | — | | |
As of June 30, 2018
|
| | | $ | 2,400,000 | | | | | $ | 2,415,487 | | | | | $ | 665,963 | | | | | $ | 1,749,524 | | | | | $ | — | | |
Liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Senior Notes – 6.50%
|
| | | $ | 650,000 | | | | | $ | 671,970 | | | | | $ | 671,970 | | | | | $ | — | | | | | $ | — | | |
Term Loan Facility
|
| | | | 213,875 | | | | | | 215,479 | | | | | | — | | | | | | 215,479 | | | | | | — | | |
As of December 31, 2017
|
| | | $ | 863,875 | | | | | $ | 887,449 | | | | | $ | 671,970 | | | | | $ | 215,479 | | | | | $ | — | | |
|
|
Professional fees
|
| | | $ | 32,059 | | |
|
Long-term incentive plan liability acceleration based on change of control
|
| | | | 29,626 | | |
|
Transaction bonuses
|
| | | | 8,900 | | |
|
Other
|
| | | | 8,403 | | |
| | | | | $ | 78,988 | | |
|
| | |
Successor
|
| |
Predecessor
|
| ||||||
(Amounts in thousands)
|
| |
June 30, 2018
|
| |
December 31, 2017
|
| ||||||
Siding, Fencing and Stone
|
| | | $ | 713,649 | | | | | $ | 349,954 | | |
Windows and Doors
|
| | | | 518,743 | | | | | | 130,609 | | |
| | | | $ | 1,232,392 | | | | | $ | 480,563 | | |
|
(Amounts in thousands)
|
| |
Windows and
Doors |
| |
Siding, Fencing
and Stone |
| ||||||
Balance as of December 31, 2017 | | | | | | | | | | | | | |
Goodwill
|
| | | $ | 458,382 | | | | | $ | 472,181 | | |
Accumulated impairment losses
|
| | | | (327,773 ) | | | | | | (122,227 ) | | |
| | | | $ | 130,609 | | | | | $ | 349,954 | | |
Currency translation adjustments
|
| | | | (267 ) | | | | | | (577 ) | | |
Balance as of April 12, 2018 | | | | | | | | | | | | | |
Goodwill
|
| | | | 458,115 | | | | | | 471,604 | | |
Accumulated impairment losses
|
| | | | (327,773 ) | | | | | | (122,227 ) | | |
| | | | $ | 130,342 | | | | | $ | 349,377 | | |
Elimination of Predecessor goodwill
|
| | | | (130,342 ) | | | | | | (349,377 ) | | |
Goodwill recognized from Merger
|
| | | | 520,365 | | | | | | 714,731 | | |
Currency translation adjustments
|
| | | | (1,622 ) | | | | | | (1,082 ) | | |
Balance as of June 30, 2018 | | | | | | | | | | | | | |
Goodwill
|
| | | $ | 518,743 | | | | | $ | 713,649 | | |
|
(Amounts in thousands)
|
| |
Average
Amortization Period (in Years) |
| |
Cost
|
| |
Accumulated
Amortization |
| |
Net Carrying
Value |
| ||||||||||||
As of June 30, 2018 | | | | | | | | | | | | | | | | | | | | | | | | | |
Trademarks/Tradenames
|
| | | | 15 | | | | | $ | 182,700 | | | | | $ | (2,636 ) | | | | | $ | 180,064 | | |
Customer relationships
|
| | | | 15 | | | | | | 1,503,548 | | | | | | (21,460 ) | | | | | | 1,482,088 | | |
Total intangible assets
|
| | | | 15 | | | | | $ | 1,686,248 | | | | | $ | (24,096 ) | | | | | $ | 1,662,152 | | |
As of December 31, 2017 | | | | | | | | | | | | | | | | | | | | | | | | | |
Patents
|
| | | | 14 | | | | | $ | 12,770 | | | | | $ | (12,261 ) | | | | | $ | 509 | | |
Trademarks/Tradenames
|
| | | | 12 | | | | | | 117,473 | | | | | | (88,853 ) | | | | | | 28,620 | | |
Customer relationships
|
| | | | 13 | | | | | | 219,614 | | | | | | (166,086 ) | | | | | | 53,528 | | |
Other
|
| | | | 4 | | | | | | 5,750 | | | | | | (4,732 ) | | | | | | 1,018 | | |
Total intangible assets
|
| | | | 12 | | | | | $ | 355,607 | | | | | $ | (271,932 ) | | | | | $ | 83,675 | | |
|
| | |
Successor
|
| | |
Predecessor
|
| |
Predecessor
|
| |||||||||
(Amounts in thousands)
|
| |
April 13, 2018 –
June 30, 2018 |
| | |
April 1, 2018 –
April 12, 2018 |
| |
Three months ended
July 1, 2017 |
| |||||||||
Amortization expense
|
| | | $ | 24,096 | | | | | | $ | 751 | | | | | $ | 5,258 | | |
| | |
Successor
|
| | |
Predecessor
|
| |
Predecessor
|
| |||||||||
(Amounts in thousands)
|
| |
April 13, 2018 –
June 30, 2018 |
| | |
January 1, 2018 –
April 12, 2018 |
| |
Six months ended
July 1, 2017 |
| |||||||||
Amortization expense
|
| | | $ | 24,096 | | | | | | $ | 6,105 | | | | | $ | 10,602 | | |
(Amounts in thousands)
|
| |
Amortization
expense |
| |||
2018 (remainder of year)
|
| | | $ | 57,067 | | |
2019
|
| | | | 112,640 | | |
2020
|
| | | | 112,640 | | |
2021
|
| | | | 112,640 | | |
2022
|
| | | | 112,640 | | |
(Amounts in thousands)
|
| |
Successor
|
| | |
Predecessor
|
| |
Predecessor
|
| |||||||||
|
April 13, 2018 –
June 30, 2018 |
| | |
April 1, 2018 –
April 12, 2018 |
| |
Three months ended
July 1, 2017 |
| |||||||||||
Net income (loss)
|
| | | $ | (20,411 ) | | | | | | $ | (62,217 ) | | | | | $ | 29,859 | | |
Foreign currency translation adjustment
|
| | | | (7,486 ) | | | | | | | 1,204 | | | | | | 1,279 | | |
Unrealized gain (loss) on derivative instruments
|
| | | | 742 | | | | | | | (610 ) | | | | | | (430 ) | | |
Comprehensive income (loss)
|
| | | $ | (27,155 ) | | | | | | $ | (61,623 ) | | | | | $ | 30,708 | | |
| | | | | | | | | | | |
(Amounts in thousands)
|
| |
Successor
|
| | |
Predecessor
|
| |
Predecessor
|
| |||||||||
|
April 13, 2018 –
June 30, 2018 |
| | |
January 1, 2018 –
April 12, 2018 |
| |
Six months ended
July 1, 2017 |
| |||||||||||
Net income (loss)
|
| | | $ | (20,411 ) | | | | | | $ | (66,780 ) | | | | | $ | 26,222 | | |
Foreign currency translation adjustment
|
| | | | (7,486 ) | | | | | | | (643 ) | | | | | | 1,844 | | |
Unrealized gain (loss) on derivative instruments
|
| | | | 742 | | | | | | | 317 | | | | | | (976 ) | | |
Comprehensive income (loss)
|
| | | $ | (27,155 ) | | | | | | $ | (67,106 ) | | | | | $ | 27,090 | | |
| | | | | | | | | | | |
| | |
Successor
|
| |
Predecessor
|
| ||||||
(Amounts in thousands)
|
| |
June 30, 2018
|
| |
December 31, 2017
|
| ||||||
Senior secured asset based revolving credit facility
|
| | | $ | 130,000 | | | | | $ | — | | |
Term Loan Facility due 2021, net of unamortized early tender premium, discount, and debt issuance costs of $0 and $10,560, respectively
|
| | | | — | | | | | | 203,315 | | |
Cash Flow Revolver
|
| | | | — | | | | | | — | | |
6.50% Senior Notes due 2022, net of unamortized early tender premium, discount, and debt issuance costs of $0 and $41,681, respectively
|
| | | | — | | | | | | 608,319 | | |
Term Loan Facility due 2025, net of unamortized discount, and debt issuance costs of $51,144 and $0, respectively
|
| | | | 1,703,856 | | | | | | — | | |
8.00% Senior Notes due 2026, net of unamortized discount, and debt issuance costs of $26,708 and $0, respectively
|
| | | | 618,292 | | | | | | — | | |
| | | | $ | 2,452,148 | | | | | $ | 811,634 | | |
Less current portion of long-term debt
|
| | | | (17,550 ) | | | | | | (4,300 ) | | |
| | | | $ | 2,434,598 | | | | | $ | 807,334 | | |
|
| | |
Rate
|
| |||
Interest rate
|
| | | | 6.09 % | | |
Effective interest rate
|
| | | | 7.95 % | | |
(in thousands)
|
| |
June 30, 2018
|
| |||
Excess availability
|
| | | $ | 183,812 | | |
Revolving loans outstanding
|
| | | | 130,000 | | |
Letters of credit outstanding
|
| | | | 14,341 | | |
(Amounts in thousands)
|
| |
Successor
|
| | |
Predecessor
|
| |
Predecessor
|
| |||||||||
|
April 13, 2018 –
June 30, 2018 |
| | |
April 1, 2018 –
April 12, 2018 |
| |
Three months ended
July 1, 2017 |
| |||||||||||
Service cost
|
| | | $ | — | | | | | | $ | — | | | | | $ | — | | |
Interest cost
|
| | | | 360 | | | | | | | 55 | | | | | | 459 | | |
Expected return on plan assets
|
| | | | (514 ) | | | | | | | (79 ) | | | | | | (546 ) | | |
Amortization of loss
|
| | | | 306 | | | | | | | 47 | | | | | | 351 | | |
Net periodic benefit expense
|
| | | $ | 152 | | | | | | $ | 23 | | | | | $ | 264 | | |
| | | | | | | | | | | |
(Amounts in thousands)
|
| |
Successor
|
| | |
Predecessor
|
| |
Predecessor
|
| |||||||||
|
April 13, 2018 –
June 30, 2018 |
| | |
January 1, 2018 –
April 12, 2018 |
| |
Six months ended
July 1, 2017 |
| |||||||||||
Service cost
|
| | | $ | — | | | | | | $ | — | | | | | $ | — | | |
Interest cost
|
| | | | 360 | | | | | | | 470 | | | | | | 917 | | |
Expected return on plan assets
|
| | | | (514 ) | | | | | | | (672 ) | | | | | | (1,093 ) | | |
Amortization of loss
|
| | | | 306 | | | | | | | 400 | | | | | | 702 | | |
Net periodic benefit expense
|
| | | $ | 152 | | | | | | $ | 198 | | | | | $ | 526 | | |
| | | | | | | | | | | |
(Amounts in thousands)
|
| |
June 30,
2018 |
| |
December 31,
2017 |
| ||||||
Product claim liabilities
|
| | | $ | 138 | | | | | $ | 138 | | |
Multi-employer pension plan withdrawal liability
|
| | | | 269 | | | | | | 449 | | |
Other
|
| | | | 241 | | | | | | 439 | | |
| | | | $ | 648 | | | | | $ | 1,026 | | |
|
| | |
Successor
|
| | |
Predecessor
|
| |
Predecessor
|
| |||||||||
(Amounts in thousands)
|
| |
April 13, 2018 –
June 30, 2018 |
| | |
April 1, 2018 –
April 12, 2018 |
| |
Three months ended
July 1, 2017 |
| |||||||||
Balance, beginning of period
|
| | | $ | 78,184 | | | | | | $ | 76,999 | | | | | $ | 78,451 | | |
Acquisition – Atrium
|
| | | | 8,047 | | | | | | | — | | | | | | — | | |
Warranty expense during period
|
| | | | 5,895 | | | | | | | 1,961 | | | | | | 5,545 | | |
Settlements made during period
|
| | | | (6,005 ) | | | | | | | (776 ) | | | | | | (5,782 ) | | |
Balance, end of period
|
| | | $ | 86,121 | | | | | | $ | 78,184 | | | | | $ | 78,214 | | |
| | | | | | | | | | | |
| | |
Successor
|
| | |
Predecessor
|
| |
Predecessor
|
| |||||||||
(Amounts in thousands)
|
| |
April 13, 2018 –
June 30, 2018 |
| | |
January 1, 2018 –
April 12, 2018 |
| |
Six months ended
July 1, 2017 |
| |||||||||
Balance, beginning of period
|
| | | $ | 78,184 | | | | | | $ | 77,317 | | | | | $ | 77,293 | | |
Acquisition – Atrium
|
| | | | 8,047 | | | | | | | — | | | | | | — | | |
Warranty expense during period
|
| | | | 5,895 | | | | | | | 7,226 | | | | | | 11,708 | | |
Settlements made during period
|
| | | | (6,005 ) | | | | | | | (6,359 ) | | | | | | (10,787 ) | | |
Balance, end of period
|
| | | $ | 86,121 | | | | | | $ | 78,184 | | | | | $ | 78,214 | | |
| | | | | | | | | | | |
| | |
Successor
|
| |
Predecessor
|
| ||||||
(Amounts in thousands)
|
| |
June 30,
2018 |
| |
December 31,
2017 |
| ||||||
Insurance
|
| | | $ | 9,489 | | | | | $ | 7,637 | | |
Employee compensation and benefits
|
| | | | 24,186 | | | | | | 19,720 | | |
Sales and marketing
|
| | | | 51,405 | | | | | | 58,131 | | |
Product warranty
|
| | | | 21,923 | | | | | | 19,652 | | |
Accrued freight
|
| | | | 4,000 | | | | | | 3,696 | | |
Accrued interest
|
| | | | 35,659 | | | | | | 18,027 | | |
Accrued pension
|
| | | | 1,358 | | | | | | 1,358 | | |
Accrued sales returns and discounts
|
| | | | 2,022 | | | | | | 1,303 | | |
Accrued taxes
|
| | | | 12,416 | | | | | | 4,735 | | |
Undistributed appraisal shares liability
|
| | | | 25,362 | | | | | | — | | |
Litigation accrual
|
| | | | 700 | | | | | | 26,849 | | |
Other
|
| | | | 49,120 | | | | | | 24,749 | | |
| | | | $ | 237,640 | | | | | $ | 185,857 | | |
|
| | |
Successor
|
| |
Predecessor
|
| ||||||
(Amounts in thousands)
|
| |
June 30,
2018 |
| |
December 31,
2017 |
| ||||||
Insurance
|
| | | $ | 3,750 | | | | | $ | 595 | | |
Pension liabilities
|
| | | | 12,677 | | | | | | 12,805 | | |
Multi-employer pension withdrawal liability
|
| | | | 269 | | | | | | 449 | | |
Product warranty
|
| | | | 64,198 | | | | | | 57,665 | | |
Long-term environmental liability
|
| | | | 1,069 | | | | | | 1,075 | | |
Liabilities for tax uncertainties
|
| | | | 4,717 | | | | | | 4,529 | | |
Litigation accrual
|
| | | | 644 | | | | | | 731 | | |
Other
|
| | | | 3,752 | | | | | | 5,575 | | |
| | | | $ | 91,076 | | | | | $ | 83,424 | | |
|
| | |
Stock Options
|
| |
Weighted-
Average Exercise Price |
| |
Weighted-
Average Remaining Contractual Term (Years) |
| |||||||||
Balance at January 1, 2018
|
| | | | 2,398,181 | | | | | $ | 14.02 | | | | | | 3.43 | | |
Granted
|
| | | | — | | | | | | — | | | | | | — | | |
Exercised
|
| | | | (231,878 ) | | | | | | 12.35 | | | | | | — | | |
Forfeited or expired
|
| | | | — | | | | | | — | | | | | | — | | |
April 12, 2018
|
| | | | 2,166,303 | | | | | $ | 14.20 | | | | | | 3.34 | | |
|
(Amounts in thousands)
|
| |
Successor
|
| | |
Predecessor
|
| |
Predecessor
|
| |||||||||
|
April 13, 2018 –
June 30, 2018 |
| | |
April 1, 2018 –
April 12, 2018 |
| |
Three months ended
July 1, 2017 |
| |||||||||||
Net sales | | | | | | | | | | | | | | | | | | | | |
Siding, Fencing and Stone
|
| | | $ | 247,193 | | | | | | $ | 29,794 | | | | | $ | 263,593 | | |
Windows and Doors
|
| | | | 350,743 | | | | | | | 39,945 | | | | | | 281,174 | | |
| | | | $ | 597,936 | | | | | | $ | 69,739 | | | | | $ | 544,767 | | |
Operating earnings (loss) | | | | | | | | | | | | | | | | | | | | |
Siding, Fencing and Stone
|
| | | $ | 6,815 | | | | | | $ | 2,175 | | | | | $ | 47,580 | | |
Windows and Doors
|
| | | | 24,704 | | | | | | | 2,417 | | | | | | 24,725 | | |
Unallocated
|
| | | | (18,079 ) | | | | | | | (68,915 ) | | | | | | (6,206 ) | | |
| | | | $ | 13,440 | | | | | | $ | (64,323 ) | | | | | $ | 66,099 | | |
| | | | | | | | | | | |
| | |
Successor
|
| | |
Predecessor
|
| |
Predecessor
|
| |||||||||
| | |
April 13, 2018 –
June 30, 2018 |
| | |
January 1, 2018 –
April 12, 2018 |
| |
Six months ended
July 1, 2017 |
| |||||||||
Net sales | | | | | | | | | | | | | | | | | | | | |
Siding, Fencing and Stone
|
| | | $ | 247,193 | | | | | | $ | 225,940 | | | | | $ | 454,430 | | |
Windows and Doors
|
| | | | 350,743 | | | | | | | 303,703 | | | | | | 520,352 | | |
| | | | $ | 597,936 | | | | | | $ | 529,643 | | | | | $ | 974,782 | | |
Operating earnings (loss) | | | | | | | | | | | | | | | | | | | | |
Siding, Fencing and Stone
|
| | | $ | 6,815 | | | | | | $ | 15,974 | | | | | $ | 67,403 | | |
Windows and Doors
|
| | | | 24,704 | | | | | | | 7,625 | | | | | | 26,154 | | |
Unallocated
|
| | | | (18,079 ) | | | | | | | (75,901 ) | | | | | | (15,632 ) | | |
| | | | $ | 13,440 | | | | | | $ | (52,302 ) | | | | | $ | 77,925 | | |
| | | | | | | | | | | |
| | |
Total assets as of
|
| |||||||||
| | |
Successor
|
| |
Predecessor
|
| ||||||
| | |
June 30, 2018
|
| |
December 31, 2017
|
| ||||||
Total assets | | | | | | | | | | | | | |
Siding, Fencing and Stone
|
| | | $ | 1,949,149 | | | | | $ | 728,502 | | |
Windows and Doors
|
| | | | 1,880,625 | | | | | | 500,278 | | |
Unallocated
|
| | | | 56,472 | | | | | | 90,787 | | |
| | | | $ | 3,886,246 | | | | | $ | 1,319,567 | | |
|
| | |
Successor
|
| | |
Predecessor
|
| |
Predecessor
|
| |||||||||
(Amounts in thousands)
|
| |
April 13, 2018 –
June 30, 2018 |
| | |
April 1, 2018 –
April 12, 2018 |
| |
Three months ended
July 1, 2017 |
| |||||||||
| | |
(unaudited)
|
| | |
(unaudited)
|
| |
(unaudited)
|
| |||||||||
Net sales | | | | | | | | | | | | | | | | | | | | |
Siding, Fencing and Stone
|
| | | $ | 247,193 | | | | | | $ | 29,794 | | | | | $ | 263,593 | | |
Windows and Doors
|
| | | | 350,743 | | | | | | | 39,945 | | | | | | 281,174 | | |
Operating earnings (loss) | | | | | | | | | | | | | | | | | | | | |
Siding, Fencing and Stone
|
| | | | 6,815 | | | | | | | 2,175 | | | | | | 47,580 | | |
Windows and Doors
|
| | | | 24,704 | | | | | | | 2,417 | | | | | | 24,725 | | |
Unallocated
|
| | | | (18,079 ) | | | | | | | (68,915 ) | | | | | | (6,206 ) | | |
Foreign currency gain (loss) | | | | | | | | | | | | | | | | | | | | |
Siding, Fencing and Stone
|
| | | | (386 ) | | | | | | | 148 | | | | | | 224 | | |
Windows and Doors
|
| | | | (1,130 ) | | | | | | | 461 | | | | | | 393 | | |
Interest income (expense), net | | | | | | | | | | | | | | | | | | | | |
Siding, Fencing and Stone
|
| | | | 5 | | | | | | | 2 | | | | | | 5 | | |
Windows and Doors
|
| | | | (39 ) | | | | | | | — | | | | | | 4 | | |
Unallocated
|
| | | | (43,729 ) | | | | | | | (2,599 ) | | | | | | (17,389 ) | | |
Income tax benefit (expense) | | | | | | | | | | | | | | | | | | | | |
Unallocated
|
| | | | 11,428 | | | | | | | 9,331 | | | | | | (19,477 ) | | |
Tax Receivable Agreement liability adjustment | | | | | | | | | | | | | | | | | | | | |
Unallocated
|
| | | | — | | | | | | | (5,237 ) | | | | | | — | | |
Net income (loss)
|
| | | $ | (20,411 ) | | | | | | $ | (62,217 ) | | | | | $ | 29,859 | | |
| | |
Successor
|
| | |
Predecessor
|
| |
Predecessor
|
| |||||||||
(Amounts in thousands)
|
| |
April 13, 2018 –
June 30, 2018 |
| | |
January 1, 2018 –
April 12, 2018 |
| |
Six months ended
July 1, 2017 |
| |||||||||
| | |
(unaudited)
|
| | |
(unaudited)
|
| |
(unaudited)
|
| |||||||||
Net sales | | | | | | | | | | | | | | | | | | | | |
Siding, Fencing and Stone
|
| | | $ | 247,193 | | | | | | $ | 225,940 | | | | | $ | 454,430 | | |
Windows and Doors
|
| | | | 350,743 | | | | | | | 303,703 | | | | | | 520,352 | | |
Operating earnings (loss) | | | | | | | | | | | | | | | | | | | | |
Siding, Fencing and Stone
|
| | | | 6,815 | | | | | | | 15,974 | | | | | | 67,403 | | |
Windows and Doors
|
| | | | 24,704 | | | | | | | 7,625 | | | | | | 26,154 | | |
Unallocated
|
| | | | (18,079 ) | | | | | | | (75,901 ) | | | | | | (15,632 ) | | |
Foreign currency gain (loss) | | | | | | | | | | | | | | | | | | | | |
Siding, Fencing and Stone
|
| | | | (386 ) | | | | | | | (103 ) | | | | | | 243 | | |
Windows and Doors
|
| | | | (1,130 ) | | | | | | | (29 ) | | | | | | 529 | | |
Interest income (expense), net | | | | | | | | | | | | | | | | | | | | |
Siding, Fencing and Stone
|
| | | | 5 | | | | | | | 1 | | | | | | 13 | | |
Windows and Doors
|
| | | | (39 ) | | | | | | | 13 | | | | | | 8 | | |
Unallocated
|
| | | | (43,729 ) | | | | | | | (19,046 ) | | | | | | (34,273 ) | | |
Income tax benefit (expense) | | | | | | | | | | | | | | | | | | | | |
Unallocated
|
| | | | 11,428 | | | | | | | 9,923 | | | | | | (18,223 ) | | |
Tax Receivable Agreement liability adjustment | | | | | | | | | | | | | | | | | | | | |
Unallocated
|
| | | | — | | | | | | | (5,237 ) | | | | | | — | | |
Net income (loss)
|
| | | $ | (20,411 ) | | | | | | $ | (66,780 ) | | | | | $ | 26,222 | | |
| | |
Successor
|
| | |
Predecessor
|
| |
Predecessor
|
| |||||||||
(Amounts in thousands)
|
| |
April 13, 2018 –
June 30, 2018 |
| | |
April 1, 2018 –
April 12, 2018 |
| |
Three months ended
July 1, 2017 |
| |||||||||
Net income (loss)
|
| | | $ | (20,411 ) | | | | | | $ | (62,217 ) | | | | | $ | 29,859 | | |
Interest expense, net
|
| | | | 43,763 | | | | | | | 2,597 | | | | | | 17,380 | | |
Provision (benefit) for income taxes
|
| | | | (11,428 ) | | | | | | | (9,331 ) | | | | | | 19,477 | | |
Depreciation and amortization
|
| | | | 31,081 | | | | | | | 1,839 | | | | | | 13,102 | | |
EBITDA
|
| | | | 43,005 | | | | | | | (67,112 ) | | | | | | 79,818 | | |
Non cash loss (gain) on foreign currency transactions
|
| | | | 1,516 | | | | | | | (609 ) | | | | | | (617 ) | | |
Acquisition costs
|
| | | | 11,186 | | | | | | | 67,802 | | | | | | — | | |
Customer inventory buybacks
|
| | | | 339 | | | | | | | 66 | | | | | | 632 | | |
Restructuring/integration expense
|
| | | | 1,325 | | | | | | | 6 | | | | | | 455 | | |
Non cash charge of purchase price allocated to inventories
|
| | | | 35,443 | | | | | | | — | | | | | | — | | |
Public company costs
|
| | | | — | | | | | | | — | | | | | | 337 | | |
Retention expense
|
| | | | 89 | | | | | | | — | | | | | | 361 | | |
Long term incentive plan compensation
|
| | | | — | | | | | | | 229 | | | | | | 1,238 | | |
Stock option expense
|
| | | | — | | | | | | | — | | | | | | 92 | | |
Litigation – class action charges, net
|
| | | | — | | | | | | | — | | | | | | 825 | | |
Tax receivable agreement liability adjustment
|
| | | | — | | | | | | | 5,237 | | | | | | — | | |
Adjusted EBITDA
|
| | | $ | 92,903 | | | | | | $ | 5,619 | | | | | $ | 83,141 | | |
| | | | | | | | | | | |
| | |
Successor
|
| | |
Predecessor
|
| |
Predecessor
|
| |||||||||
(Amounts in thousands)
|
| |
April 13, 2018 –
June 30, 2018 |
| | |
January 1, 2018 –
April 12, 2018 |
| |
Six months ended
July 1, 2017 |
| |||||||||
Net income (loss)
|
| | | $ | (20,411 ) | | | | | | $ | (66,780 ) | | | | | $ | 26,222 | | |
Interest expense, net
|
| | | | 43,763 | | | | | | | 19,032 | | | | | | 34,252 | | |
Provision (benefit) for income taxes
|
| | | | (11,428 ) | | | | | | | (9,923 ) | | | | | | 18,223 | | |
Depreciation and amortization
|
| | | | 31,081 | | | | | | | 15,274 | | | | | | 26,555 | | |
EBITDA
|
| | | | 43,005 | | | | | | | (42,397 ) | | | | | | 105,252 | | |
Non cash loss (gain) on foreign currency transactions
|
| | | | 1,516 | | | | | | | 132 | | | | | | (772 ) | | |
Acquisition costs
|
| | | | 11,186 | | | | | | | 67,802 | | | | | | — | | |
Customer inventory buybacks
|
| | | | 339 | | | | | | | 1,518 | | | | | | 1,198 | | |
Restructuring/integration expense
|
| | | | 1,325 | | | | | | | 224 | | | | | | 1,412 | | |
Non cash charge of purchase price allocated to inventories
|
| | | | 35,443 | | | | | | | — | | | | | | — | | |
Public company costs
|
| | | | — | | | | | | | 500 | | | | | | 774 | | |
Retention expense
|
| | | | 89 | | | | | | | 103 | | | | | | 722 | | |
Long term incentive plan compensation
|
| | | | — | | | | | | | 985 | | | | | | 2,672 | | |
Stock option expense
|
| | | | — | | | | | | | 36 | | | | | | 263 | | |
Litigation – class action charges, net
|
| | | | — | | | | | | | — | | | | | | 1,113 | | |
Tax receivable agreement liability adjustment
|
| | | | — | | | | | | | 5,237 | | | | | | — | | |
Adjusted EBITDA
|
| | | $ | 92,903 | | | | | | $ | 34,140 | | | | | $ | 112,634 | | |
| | | | | | | | | | | |
| | |
Successor
|
| | |
Predecessor
|
| |
Predecessor
|
| |||||||||||||||||||||||||||
(Amounts in thousands)
|
| |
April 13, 2018 –
June 30, 2018 |
| | |
April 1, 2018 –
April 12, 2018 |
| |
For the three months ended
July 1, 2017 |
| |||||||||||||||||||||||||||
| | |
(unaudited)
|
| | |
(unaudited)
|
| |
(unaudited)
|
| |||||||||||||||||||||||||||
Statement of operations data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net sales
|
| | | $ | 247,193 | | | | | | 100.0 % | | | | | | $ | 29,794 | | | | | | 100.0 % | | | | | $ | 263,593 | | | | | | 100.0 % | | |
Gross profit
|
| | | | 38,460 | | | | | | 15.6 % | | | | | | | 6,119 | | | | | | 20.5 % | | | | | | 73,032 | | | | | | 27.7 % | | |
SG&A expense (including acquisition costs)
|
| | | | 19,589 | | | | | | 7.9 % | | | | | | | 3,620 | | | | | | 12.2 % | | | | | | 23,270 | | | | | | 8.8 % | | |
Amortization of intangible assets
|
| | | | 12,056 | | | | | | 4.9 % | | | | | | | 324 | | | | | | 1.1 % | | | | | | 2,182 | | | | | | 0.8 % | | |
Operating earnings
|
| | | | 6,815 | | | | | | 2.8 % | | | | | | | 2,175 | | | | | | 7.3 % | | | | | | 47,580 | | | | | | 18.1 % | | |
Currency transaction gain (loss)
|
| | | | (386 ) | | | | | | (0.2 )% | | | | | | | 148 | | | | | | 0.5 % | | | | | | 224 | | | | | | 0.1 % | | |
| | |
Successor
|
| | |
Predecessor
|
| |
Predecessor
|
| |||||||||||||||||||||||||||
(Amounts in thousands)
|
| |
April 13, 2018 –
June 30, 2018 |
| | |
January 1, 2018 –
April 12, 2018 |
| |
For the six months ended
July 1, 2017 |
| |||||||||||||||||||||||||||
| | |
(unaudited)
|
| | |
(unaudited)
|
| |
(unaudited)
|
| |||||||||||||||||||||||||||
Statement of operations data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net sales
|
| | | $ | 247,193 | | | | | | 100.0 % | | | | | | $ | 225,940 | | | | | | 100.0 % | | | | | $ | 454,430 | | | | | | 100.0 % | | |
Gross profit
|
| | | | 38,460 | | | | | | 15.6 % | | | | | | | 46,809 | | | | | | 20.7 % | | | | | | 118,995 | | | | | | 26.2 % | | |
SG&A expense (including acquisition costs)
|
| | | | 19,589 | | | | | | 7.9 % | | | | | | | 28,236 | | | | | | 12.5 % | | | | | | 47,146 | | | | | | 10.4 % | | |
Amortization of intangible assets
|
| | | | 12,056 | | | | | | 4.9 % | | | | | | | 2,599 | | | | | | 1.2 % | | | | | | 4,446 | | | | | | 1.0 % | | |
Operating earnings
|
| | | | 6,815 | | | | | | 2.8 % | | | | | | | 15,974 | | | | | | 7.1 % | | | | | | 67,403 | | | | | | 14.8 % | | |
Currency transaction gain (loss)
|
| | | | (386 ) | | | | | | (0.2 )% | | | | | | | (103 ) | | | | | | — % | | | | | | 243 | | | | | | 0.1 % | | |
| | |
Successor
|
| | |
Predecessor
|
| |
Predecessor
|
| |||||||||||||||||||||||||||
(Amounts in thousands)
|
| |
April 13, 2018 –
June 30, 2018 |
| | |
April 1, 2018 –
April 12, 2018 |
| |
For the three months ended
July 1, 2017 |
| |||||||||||||||||||||||||||
| | |
(unaudited)
|
| | |
(unaudited)
|
| |
(unaudited)
|
| |||||||||||||||||||||||||||
Statement of operations data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net sales
|
| | | $ | 350,743 | | | | | | 100.0 % | | | | | | $ | 39,945 | | | | | | 100.0 % | | | | | $ | 281,174 | | | | | | 100.0 % | | |
Gross profit
|
| | | | 80,074 | | | | | | 22.8 % | | | | | | | 8,800 | | | | | | 22.0 % | | | | | | 63,856 | | | | | | 22.7 % | | |
SG&A expense (including acquisition costs)
|
| | | | 43,330 | | | | | | 12.4 % | | | | | | | 5,956 | | | | | | 14.9 % | | | | | | 36,055 | | | | | | 12.8 % | | |
Amortization of intangible assets
|
| | | | 12,040 | | | | | | 3.4 % | | | | | | | 427 | | | | | | 1.1 % | | | | | | 3,076 | | | | | | 1.1 % | | |
Operating earnings
|
| | | | 24,704 | | | | | | 7.0 % | | | | | | | 2,417 | | | | | | 6.1 % | | | | | | 24,725 | | | | | | 8.8 % | | |
Currency transaction gain (loss)
|
| | | | (1,130 ) | | | | | | (0.3 )% | | | | | | | 461 | | | | | | 1.2 % | | | | | | 393 | | | | | | 0.1 % | | |
| | |
Successor
|
| | |
Predecessor
|
| |
Predecessor
|
| |||||||||||||||||||||||||||
(Amounts in thousands)
|
| |
April 13, 2018 –
June 30, 2018 |
| | |
January 1, 2018 –
April 12, 2018 |
| |
For the six months ended
July 1, 2017 |
| |||||||||||||||||||||||||||
| | |
(unaudited)
|
| | |
(unaudited)
|
| |
(unaudited)
|
| |||||||||||||||||||||||||||
Statement of operations data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net sales
|
| | | $ | 350,743 | | | | | | 100.0 % | | | | | | $ | 303,703 | | | | | | 100.0 % | | | | | $ | 520,352 | | | | | | 100.0 % | | |
Gross profit
|
| | | | 80,074 | | | | | | 22.8 % | | | | | | | 56,160 | | | | | | 18.5 % | | | | | | 107,418 | | | | | | 20.6 % | | |
SG&A expense (including acquisition costs)
|
| | | | 43,330 | | | | | | 12.4 % | | | | | | | 45,029 | | | | | | 14.8 % | | | | | | 75,108 | | | | | | 14.4 % | | |
Amortization of intangible assets
|
| | | | 12,040 | | | | | | 3.4 % | | | | | | | 3,506 | | | | | | 1.2 % | | | | | | 6,156 | | | | | | 1.2 % | | |
Operating earnings
|
| | | | 24,704 | | | | | | 7.0 % | | | | | | | 7,625 | | | | | | 2.5 % | | | | | | 26,154 | | | | | | 5.0 % | | |
Currency transaction gain (loss)
|
| | | | (1,130 ) | | | | | | (0.3 )% | | | | | | | (29 ) | | | | | | — % | | | | | | 529 | | | | | | 0.1 % | | |
| | |
Successor
|
| | |
Predecessor
|
| |
Predecessor
|
| |||||||||
(Amounts in thousands)
|
| |
April 13, 2018 –
June 30, 2018 |
| | |
April 1, 2018 –
April 12, 2018 |
| |
For the three months ended
July 1, 2017 |
| |||||||||
| | |
(unaudited)
|
| | |
(unaudited)
|
| |
(unaudited)
|
| |||||||||
Statement of operations data: | | | | | | | | | | | | | | | | | | | | |
SG&A expense
|
| | | $ | (8,557 ) | | | | | | $ | (1,149 ) | | | | | $ | (6,206 ) | | |
Acquisition related expenses
|
| | | | (9,522 ) | | | | | | | (67,766 ) | | | | | | — | | |
Operating loss
|
| | | | (18,079 ) | | | | | | | (68,915 ) | | | | | | (6,206 ) | | |
Interest expense
|
| | | | (43,736 ) | | | | | | | (2,599 ) | | | | | | (17,399 ) | | |
Interest income
|
| | | | 7 | | | | | | | — | | | | | | 10 | | |
Tax Receivable Agreement liability adjustment
|
| | | | — | | | | | | | (5,237 ) | | | | | | — | | |
Income tax benefit (provision) for income taxes
|
| | | $ | 11,428 | | | | | | $ | 9,331 | | | | | $ | (19,477 ) | | |
| | |
Successor
|
| | |
Predecessor
|
| |
Predecessor
|
| |||||||||
(Amounts in thousands)
|
| |
April 13, 2018 –
June 30, 2018 |
| | |
January 1, 2018 –
April 12, 2018 |
| |
For the six months ended
July 1, 2017 |
| |||||||||
| | |
(unaudited)
|
| | |
(unaudited)
|
| |
(unaudited)
|
| |||||||||
Statement of operations data: | | | | | | | | | | | | | | | | | | | | |
SG&A expense
|
| | | $ | (8,557 ) | | | | | | $ | (8,135 ) | | | | | $ | (15,632 ) | | |
Acquisition related expenses
|
| | | | (9,522 ) | | | | | | | (67,766 ) | | | | | | — | | |
Operating loss
|
| | | | (18,079 ) | | | | | | | (75,901 ) | | | | | | (15,632 ) | | |
Interest expense
|
| | | | (43,736 ) | | | | | | | (19,054 ) | | | | | | (34,285 ) | | |
Interest income
|
| | | | 7 | | | | | | | 8 | | | | | | 12 | | |
Tax receivable agreement liability adjustment
|
| | | | — | | | | | | | (5,237 ) | | | | | | — | | |
Income tax benefit (provision) for income taxes
|
| | | $ | 11,428 | | | | | | $ | 9,923 | | | | | $ | (18,223 ) | | |
|
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
|
| |
Grant Thornton LLP
201 S College Street, Suite 2500 Charlotte, NC 28244-0100 T 704.632.3500 F 704.334.7701 www.GrantThornton.com |
|
| | |
2017
|
| |
2016
|
| ||||||
NET SALES
|
| | | $ | 348,844 | | | | | $ | 312,628 | | |
COST OF GOODS SOLD
|
| | | | 234,451 | | | | | | 214,688 | | |
Gross profit
|
| | | | 114,393 | | | | | | 97,940 | | |
OPERATING EXPENSES: | | | | | | | | | | | | | |
Selling, delivery, general and administrative expenses
|
| | | | 67,572 | | | | | | 63,364 | | |
Amortization expense
|
| | | | 6,723 | | | | | | 6,231 | | |
Stock compensation expense
|
| | | | 1 | | | | | | 11 | | |
Total selling, delivery, general and administrative expenses
|
| | | | 74,296 | | | | | | 69,606 | | |
Impairment of trade names
|
| | | | 1,560 | | | | | | 200 | | |
(Gain) loss on disposal of assets, net
|
| | | | (239 ) | | | | | | 288 | | |
Total operating expenses
|
| | | | 75,617 | | | | | | 70,094 | | |
OPERATING INCOME FROM CONTINUING OPERATIONS
|
| | | | 38,776 | | | | | | 27,846 | | |
Interest expense
|
| | | | 35,903 | | | | | | 42,479 | | |
Other expense, net
|
| | | | 226 | | | | | | 546 | | |
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
| | | | 2,647 | | | | | | (15,179 ) | | |
Income tax expense
|
| | | | 1,521 | | | | | | 1,320 | | |
INCOME (LOSS) FROM CONTINUING OPERATIONS
|
| | | | 1,126 | | | | | | (16,499 ) | | |
Loss from discontinued operations, net of tax
|
| | | | (1,148 ) | | | | | | (8,173 ) | | |
NET LOSS
|
| | | | (22 ) | | | | | | (24,672 ) | | |
Other comprehensive income, net of taxes: | | | | | | | | | | | | | |
Foreign currency translation adjustment
|
| | | | 6,994 | | | | | | 2,481 | | |
Comprehensive income (loss)
|
| | | $ | 6,972 | | | | | $ | (22,191 ) | | |
|
| | |
Series A
Preferred Stock |
| |
Series B
Preferred Stock |
| |
Common Stock
|
| |
Additional
Paid-in Capital |
| |
Accumulated
Deficit |
| |
Accumulated
Other Comprehensive Income (Loss) |
| |
Total
|
| |||||||||||||||||||||||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| ||||||||||||||||||||||||||||||||||||||||||
BALANCES, JANUARY 1, 2016
|
| | | | 321,494 | | | | | $ | 2 | | | | | | — | | | | | $ | — | | | | | | 2,009,964 | | | | | $ | 20 | | | | | $ | 232,994 | | | | | $ | (428,921 ) | | | | | $ | (31,969 ) | | | | | $ | (227,874 ) | | |
Equity based compensation
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 11 | | | | | | — | | | | | | — | | | | | | 11 | | |
Issuance preferred stock
|
| | | | — | | | | | | — | | | | | | 10,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | 7,000 | | | | | | — | | | | | | — | | | | | | 7,000 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (24,672 ) | | | | | | — | | | | | | (24,672 ) | | |
Foreign currency translation gain
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 2,481 | | | | | | 2,481 | | |
BALANCES, DECEMBER 31, 2016
|
| | | | 321,494 | | | | | | 2 | | | | | | 10,000 | | | | | | — | | | | | | 2,009,964 | | | | | | 20 | | | | | | 240,005 | | | | | | (453,593 ) | | | | | | (29,488 ) | | | | | | (243,054 ) | | |
Equity based compensation
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1 | | | | | | — | | | | | | — | | | | | | 1 | | |
Issuance preferred stock
|
| | | | — | | | | | | — | | | | | | 12,141 | | | | | | — | | | | | | — | | | | | | — | | | | | | 8,499 | | | | | | — | | | | | | — | | | | | | 8,499 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (22 ) | | | | | | — | | | | | | (22 ) | | |
Foreign currency translation gain
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 6,994 | | | | | | 6,994 | | |
BALANCES, DECEMBER 31, 2017
|
| | | | 321,494 | | | | | $ | 2 | | | | | | 22,141 | | | | | $ | — | | | | | | 2,009,964 | | | | | $ | 20 | | | | | $ | 248,505 | | | | | $ | (453,615 ) | | | | | $ | (22,494 ) | | | | | $ | (227,582 ) | | |
|
| | |
2017
|
| |
2016
|
| ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | | | | | | |
Net loss
|
| | | $ | (22 ) | | | | | $ | (24,672 ) | | |
Adjustments to reconcile net loss to net cash provided by operating activities:
|
| | | | | | | | | | | | |
Depreciation and amortization
|
| | | | 13,424 | | | | | | 13,776 | | |
Amortization of deferred financing costs
|
| | | | 1,620 | | | | | | 1,506 | | |
Accretion of notes discount
|
| | | | 903 | | | | | | 8,045 | | |
Non-cash interest
|
| | | | 8,955 | | | | | | 7,692 | | |
Impairment of trade names
|
| | | | 1,560 | | | | | | 200 | | |
Loss on sales of divisions
|
| | | | — | | | | | | 5,783 | | |
(Gain) loss on disposal of assets
|
| | | | (240 ) | | | | | | 301 | | |
Non-cash equity based compensation
|
| | | | 1 | | | | | | 11 | | |
Deferred taxes
|
| | | | (2,106 ) | | | | | | (2,004 ) | | |
Changes in assets and liabilities
|
| | | | | | | | | | | | |
Accounts receivable
|
| | | | (1,230 ) | | | | | | (3,748 ) | | |
Inventories
|
| | | | 1,287 | | | | | | (1,124 ) | | |
Prepaid expenses and other assets
|
| | | | (331 ) | | | | | | 1,414 | | |
Other long-term assets
|
| | | | 531 | | | | | | (68 ) | | |
Accounts payable
|
| | | | (3,480 ) | | | | | | 3,763 | | |
Accrued and other long-term liabilities
|
| | | | (9,617 ) | | | | | | 3,366 | | |
Net cash provided by operating activities
|
| | | | 11,255 | | | | | | 14,241 | | |
CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | | | | | | |
Purchases of property, plant and equipment
|
| | | | (6,862 ) | | | | | | (9,347 ) | | |
Proceeds from sales of assets
|
| | | | 361 | | | | | | 117 | | |
Proceeds from sales of divisions
|
| | | | — | | | | | | 12,939 | | |
Purchase of entry door company
|
| | | | (9,036 ) | | | | | | — | | |
Purchase of window and door company
|
| | | | (332 ) | | | | | | (6,703 ) | | |
Net cash used in investing activities
|
| | | | (15,869 ) | | | | | | (2,994 ) | | |
CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | | | | | | |
Borrowings under previous ABL credit facility
|
| | | | — | | | | | | 17,600 | | |
Payments on previous ABL credit facility
|
| | | | — | | | | | | (32,200 ) | | |
Borrowings under current ABL credit facility
|
| | | | 14,466 | | | | | | 275 | | |
Payments on current ABL credit facility
|
| | | | (14,741 ) | | | | | | — | | |
Proceeds stock issuances
|
| | | | 8,499 | | | | | | 7,000 | | |
Payments on term note
|
| | | | (1,500 ) | | | | | | (2,000 ) | | |
Payment on contingent consideration
|
| | | | (1,199 ) | | | | | | — | | |
Payments on capital leases
|
| | | | (33 ) | | | | | | (101 ) | | |
Net cash provided by (used in) financing activities
|
| | | | 5,492 | | | | | | (9,426 ) | | |
EFFECT OF EXCHANGE RATE CHANGES
|
| | | $ | 347 | | | | | $ | (66 ) | | |
NET INCREASE IN CASH AND CASH EQUIVALENTS
|
| | | | 1,225 | | | | | | 1,755 | | |
CASH AND CASH EQUIVALENTS – Beginning of period
|
| | | | 1,810 | | | | | | 55 | | |
CASH AND CASH EQUIVALENTS – End of period
|
| | | $ | 3,035 | | | | | $ | 1,810 | | |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | | | | | | | | | | | | | |
Cash paid for: | | | | | | | | | | | | | |
Interest
|
| | | $ | 23,758 | | | | | $ | 23,918 | | |
Income taxes
|
| | | $ | 3,187 | | | | | $ | 2,087 | | |
Non-cash investing activities: | | | | | | | | | | | | | |
Purchase of intangibles and goodwill through contingent consideration
|
| | | $ | — | | | | | $ | 1,882 | | |
Purchases of property, plant and equipment
|
| | | $ | 95 | | | | | $ | 334 | | |
Purchases of property, plant and equipment on capital lease
|
| | | $ | 83 | | | | | $ | 335 | | |
|
| | |
Estimated
Useful Life |
|
Buildings and improvements
|
| |
20 – 30 years
|
|
Machinery and equipment
|
| |
3 – 10 years
|
|
Software implementation costs
|
| |
3 years
|
|
| | |
2017
|
| |
2016
|
| ||||||
Beginning reserve for warranties
|
| | | $ | (3,829 ) | | | | | $ | (3,267 ) | | |
Change in provision
|
| | | | (4,961 ) | | | | | | (5,169 ) | | |
Settlements
|
| | | | 4,923 | | | | | | 4,607 | | |
Ending reserve for warranties
|
| | | $ | (3,867 ) | | | | | $ | (3,829 ) | | |
|
| | |
2017
|
| |
2016
|
| ||||||
Beginning deferred revenue
|
| | | $ | (2,330 ) | | | | | $ | (1,813 ) | | |
Sales
|
| | | | (1,211 ) | | | | | | (1,214 ) | | |
Amortization
|
| | | | 834 | | | | | | 697 | | |
Ending deferred revenue
|
| | | $ | (2,707 ) | | | | | $ | (2,330 ) | | |
|
| | |
2017
|
| |
2016
|
| ||||||
Raw materials
|
| | | $ | 12,906 | | | | | $ | 13,422 | | |
Work in process
|
| | | | 336 | | | | | | 244 | | |
Finished goods
|
| | | | 2,523 | | | | | | 2,990 | | |
Total
|
| | | $ | 15,765 | | | | | $ | 16,656 | | |
|
| | |
2017
|
| |
2016
|
| ||||||
Land
|
| | | $ | 638 | | | | | $ | 596 | | |
Buildings and leasehold improvements
|
| | | | 11,799 | | | | | | 10,089 | | |
Machinery and equipment
|
| | | | 63,420 | | | | | | 58,258 | | |
Internally developed software
|
| | | | 2,688 | | | | | | 2,684 | | |
Construction-in-process
|
| | | | 1,059 | | | | | | 1,374 | | |
Total
|
| | | | 79,604 | | | | | | 73,001 | | |
Less accumulated depreciation
|
| | | | (50,212 ) | | | | | | (43,309 ) | | |
Net property, plant and equipment
|
| | | $ | 29,392 | | | | | $ | 29,692 | | |
|
| | |
2017
|
| |
2016
|
| ||||||
Hardware
|
| | | $ | 449 | | | | | $ | 449 | | |
Vehicles
|
| | | | 88 | | | | | | — | | |
Machinery and equipment
|
| | | | 29 | | | | | | 29 | | |
Office equipment
|
| | | | 44 | | | | | | 55 | | |
Total
|
| | | | 610 | | | | | | 533 | | |
Less accumulated depreciation
|
| | | | (527 ) | | | | | | (490 ) | | |
Net capital lease assets
|
| | | $ | 83 | | | | | $ | 43 | | |
|
| | |
Goodwill
|
| |||
Balance, December 31, 2015
|
| | | $ | 26,734 | | |
Foreign currency translation adjustments
|
| | | | 655 | | |
Goodwill on acquisition of window and door company
|
| | | | 4,103 | | |
Balance, December 31, 2016
|
| | | | 31,492 | | |
Foreign currency translation adjustments
|
| | | | 2,016 | | |
Goodwill on acquisition of entry door company
|
| | | | 3,272 | | |
Balance, December 31, 2017
|
| | | $ | 36,780 | | |
|
2017
|
| ||||||||||||||||||||||||||||||||||||
| | |
Beginning
|
| |
Additions
|
| |
Amortization
|
| |
Impairment
|
| |
Currency
Translation Adjustments |
| |
Ending
|
| ||||||||||||||||||
Intangible assets with finite lives | | | | | | | | ||||||||||||||||||||||||||||||
Customer relationships
|
| | | $ | 105,653 | | | | | $ | 4,518 | | | | | $ | — | | | | | $ | — | | | | | $ | 5,661 | | | | | $ | 115,832 | | |
Accumulated amortization
|
| | | | (31,140 ) | | | | | | — | | | | | | (5,071 ) | | | | | | — | | | | | | (1,554 ) | | | | | | (37,765 ) | | |
Net intangible assets with finite lives
|
| | | | 74,513 | | | | | | 4,518 | | | | | | (5,071 ) | | | | | | — | | | | | | 4,107 | | | | | | 78,067 | | |
Intangible assets with indefinite lives
|
| | | | | | | | | | | | |||||||||||||||||||||||||
Trade names
|
| | | | 14,683 | | | | | | 580 | | | | | | — | | | | | | (1,560 ) | | | | | | 739 | | | | | | 14,442 | | |
Intangible assets, net
|
| | | $ | 89,196 | | | | | $ | 5,098 | | | | | $ | (5,071 ) | | | | | $ | (1,560 ) | | | | | $ | 4,846 | | | | | $ | 92,509 | | |
|
2016
|
| ||||||||||||||||||||||||||||||||||||
| | |
Beginning
|
| |
Additions
|
| |
Amortization
|
| |
Impairment
|
| |
Currency
Translation Adjustments |
| |
Ending
|
| ||||||||||||||||||
Intangible assets with finite lives | | | | | | | | ||||||||||||||||||||||||||||||
Customer relationships
|
| | | $ | 103,352 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 2,301 | | | | | $ | 105,653 | | |
Accumulated amortization
|
| | | | (25,948 ) | | | | | | — | | | | | | (4,711 ) | | | | | | — | | | | | | (481 ) | | | | | | (31,140 ) | | |
Net intangible assets with finite lives
|
| | | | 77,404 | | | | | | — | | | | | | (4,711 ) | | | | | | — | | | | | | 1,820 | | | | | | 74,513 | | |
Intangible assets with indefinite lives
|
| | | | | | | | | | | | |||||||||||||||||||||||||
Trade names
|
| | | | 10,599 | | | | | | 4,096 | | | | | | — | | | | | | (200 ) | | | | | | 188 | | | | | | 14,683 | | |
Intangible assets, net
|
| | | $ | 88,003 | | | | | $ | 4,096 | | | | | $ | (4,711 ) | | | | | $ | (200 ) | | | | | $ | 2,008 | | | | | $ | 89,196 | | |
|
| | |
Amount
|
| |||
2018
|
| | | $ | 5,167 | | |
2019
|
| | | | 5,167 | | |
2020
|
| | | | 5,167 | | |
2021
|
| | | | 5,167 | | |
2022
|
| | | | 5,167 | | |
Thereafter
|
| | | | 52,232 | | |
Total
|
| | | $ | 78,067 | | |
|
| | |
2017
|
| |
2016
|
| ||||||
Notes receivable
|
| | | $ | 289 | | | | | $ | 289 | | |
Deposits
|
| | | | 558 | | | | | | 1,322 | | |
Samples and displays, net
|
| | | | 2,481 | | | | | | 2,510 | | |
Insurance receivable
|
| | | | 1,143 | | | | | | 1,022 | | |
Deferred financing costs, net
|
| | | | 414 | | | | | | 554 | | |
Other
|
| | | | 147 | | | | | | — | | |
Total other assets, net
|
| | | $ | 5,032 | | | | | $ | 5,697 | | |
|
| | |
2017
|
| |
2016
|
| ||||||
Salaries and payroll taxes
|
| | | $ | 3,927 | | | | | $ | 3,777 | | |
Advertising allowances and customer rebates
|
| | | | 4,395 | | | | | | 3,225 | | |
Sales, use and property taxes
|
| | | | 336 | | | | | | 894 | | |
Warranty, current
|
| | | | 1,783 | | | | | | 1,312 | | |
Management fees, related party
|
| | | | — | | | | | | 8,750 | | |
Professional services
|
| | | | 637 | | | | | | 614 | | |
Restructuring charges
|
| | | | 162 | | | | | | 559 | | |
Interest
|
| | | | 3,994 | | | | | | 3,943 | | |
Insurance reserves, current
|
| | | | 1,880 | | | | | | 2,192 | | |
Unearned revenue, current
|
| | | | 1,953 | | | | | | 1,305 | | |
Contingent consideration, net
|
| | | | 1,080 | | | | | | 995 | | |
Income taxes
|
| | | | 1,001 | | | | | | 470 | | |
Other
|
| | | | 422 | | | | | | 1,247 | | |
Total accrued liabilities
|
| | | $ | 21,570 | | | | | $ | 29,283 | | |
|
| | |
2017
|
| |
2016
|
| ||||||
Warranty
|
| | | $ | 2,084 | | | | | $ | 2,517 | | |
Unearned revenue
|
| | | | 1,984 | | | | | | 1,706 | | |
Insurance reserves
|
| | | | 3,087 | | | | | | 3,860 | | |
Contingent consideration
|
| | | | — | | | | | | 887 | | |
Legal loss – contingencies
|
| | | | 380 | | | | | | 750 | | |
Deferred rent
|
| | | | 380 | | | | | | 252 | | |
Other
|
| | | | 359 | | | | | | 437 | | |
Total other long-term liabilities
|
| | | $ | 8,274 | | | | | $ | 10,409 | | |
|
| Present value of purchase price: | | | |||||
|
Cash paid
|
| | | $ | 9,036 | | |
|
Total purchase price
|
| | | $ | 9,036 | | |
| Fair value of assets acquired: | | | | | | | |
|
Working capital
|
| | | $ | 75 | | |
|
Fixed assets
|
| | | | 591 | | |
|
Customer relationships
|
| | | | 4,518 | | |
|
Trade name
|
| | | | 580 | | |
|
Goodwill
|
| | | | 3,272 | | |
|
Total fair value of assets acquired
|
| | | $ | 9,036 | | |
|
| Present value of purchase price: | | | | | | | |
|
Cash paid
|
| | | $ | 6,703 | | |
|
Contingent payable
|
| | | | 1,882 | | |
|
Working capital adjustment
|
| | | | 827 | | |
|
Total purchase price
|
| | | $ | 9,412 | | |
| Fair value of assets acquired: | | | | | | | |
|
Accounts receivable
|
| | | $ | 1,186 | | |
|
Inventories
|
| | | | 675 | | |
|
Deposits and prepaid
|
| | | | 118 | | |
|
Property, plant and equipment
|
| | | | 167 | | |
|
Trade name
|
| | | | 4,096 | | |
|
Goodwill
|
| | | | 4,103 | | |
|
Accounts payable
|
| | | | (290 ) | | |
|
Customer deposits
|
| | | | (643 ) | | |
|
Total fair value of assets acquired
|
| | | $ | 9,412 | | |
|
| | |
2017
|
| |
2016
|
| ||||||
Senior secured asset based revolving credit facility
|
| | | $ | — | | | | | $ | 275 | | |
Senior Secured Notes, including net unamortized discount and deferred financing costs of $3,133 and $5,483, respectively
|
| | | | 301,867 | | | | | | 299,517 | | |
Related party notes, including paid-in-kind interest of $27,326 and $18,371 respectively
|
| | | | 77,326 | | | | | | 68,371 | | |
Other long-term payable
|
| | | | 50 | | | | | | — | | |
Capital lease obligations
|
| | | | 99 | | | | | | 38 | | |
Total debt
|
| | | | 379,342 | | | | | | 368,201 | | |
Less current portion of long-term debt: | | | | | | | | | | | | | |
Senior secured asset based revolving credit facility
|
| | | | — | | | | | | (275 ) | | |
Other long-term payable
|
| | | | (10 ) | | | | | | — | | |
Capital lease obligations
|
| | | | (32 ) | | | | | | (12 ) | | |
Current portion of long-term debt
|
| | | | (42 ) | | | | | | (287 ) | | |
Long-term debt
|
| | | $ | 379,300 | | | | | $ | 367,914 | | |
|
|
2018
|
| | | $ | 1,292 | | |
|
2019
|
| | | | 383,118 | | |
|
2020
|
| | | | 36 | | |
|
2021
|
| | | | 22 | | |
|
2022
|
| | | | 7 | | |
|
Thereafter
|
| | | | — | | |
|
Total
|
| | | $ | 384,475 | | |
|
| | |
2017
|
| |
2016
|
|||||
Deferred income tax assets: | | | | | | | | | | | |
Accounts receivable allowance
|
| | | $ | 97 | | | | | $ | 299 |
Inventory cost capitalization and valuation
|
| | | | 226 | | | | | | 675 |
Accrued vacation and bonuses
|
| | | | 157 | | | | | | 267 |
Other accrued liabilities
|
| | | | 519 | | | | | | 978 |
Currency translation adjustment
|
| | | | 384 | | | | | | 344 |
Warranty
|
| | | | 1,049 | | | | | | 426 |
Workers’ compensation
|
| | | | 90 | | | | | | 359 |
Alternative minimum tax carryforwards and other
|
| | | | 319 | | | | | | 384 |
Related party interest
|
| | | | 6,386 | | | | | | 6,981 |
Net operating loss carryforwards
|
| | | | 128,248 | | | | | | 202,625 |
Total deferred income tax assets
|
| | | | 137,475 | | | | | | 213,338 |
Valuation allowance
|
| | | | (130,306 ) | | | | | | (204,817 ) |
Net deferred income tax assets
|
| | | | 7,169 | | | | | | 8,521 |
Deferred income tax liabilities: | | | | | | | | | | | |
Fixed and intangible assets
|
| | | | (24,314 ) | | | | | | (26,558 ) |
Total deferred income tax liabilities
|
| | | | (24,314 ) | | | | | | (26,558 ) |
Net deferred income taxes
|
| | | | (17,145 ) | | | | | | (18,037 ) |
Non-current deferred income tax liabilities
|
| | | $ | (17,145 ) | | | | | $ | (18,037 ) |
|
| | |
2017
|
| |
2016
|
| ||||||
Federal income tax provision (benefit): | | | | | | | | | | | | | |
Current
|
| | | $ | 45 | | | | | $ | — | | |
Deferred
|
| | | | (797 ) | | | | | | — | | |
State income tax provision (benefit): | | | | | | | | | | | | | |
Current
|
| | | | 177 | | | | | | 47 | | |
Deferred
|
| | | | 28 | | | | | | (228 ) | | |
Foreign income tax provision (benefit): | | | | | | | | | | | | | |
Current
|
| | | | 3,405 | | | | | | 2,308 | | |
Deferred
|
| | | | (1,337 ) | | | | | | (807 ) | | |
Income tax expense
|
| | | $ | 1,521 | | | | | $ | 1,320 | | |
|
| | |
2017
|
| |
2016
|
| ||||||
Tax benefit computed at statutory rate
|
| | | $ | 926 | | | | | $ | (5,313 ) | | |
State taxes, net of federal tax effects
|
| | | | 205 | | | | | | (181 ) | | |
Foreign rate difference
|
| | | | (795 ) | | | | | | (640 ) | | |
Impact of federal US rate change
|
| | | | (792 ) | | | | | | — | | |
Valuation allowance
|
| | | | 245 | | | | | | 5,966 | | |
Other permanent differences
|
| | | | 1,732 | | | | | | 1,488 | | |
Income tax expense
|
| | | $ | 1,521 | | | | | $ | 1,320 | | |
|
| | | | | | | | |
Operating Leases
|
| | ||||||||||||||
| | |
Capital
Leases |
| |
Vehicle, Office
and Warehouse Equipment |
| |
Facility
and Real Property |
| |
Total
|
| ||||||||||||
2018
|
| | | $ | 32 | | | | | $ | 811 | | | | | $ | 5,477 | | | | | $ | 6,320 | | |
2019
|
| | | | 32 | | | | | | 594 | | | | | | 5,351 | | | | | | 5,977 | | |
2020
|
| | | | 25 | | | | | | 469 | | | | | | 5,182 | | | | | | 5,676 | | |
2021
|
| | | | 10 | | | | | | 421 | | | | | | 4,537 | | | | | | 4,968 | | |
2022
|
| | | | — | | | | | | 420 | | | | | | 1,673 | | | | | | 2,093 | | |
Thereafter
|
| | | | — | | | | | | 2,111 | | | | | | 7,973 | | | | | | 10,084 | | |
Total
|
| | | $ | 99 | | | | | $ | 4,826 | | | | | $ | 30,193 | | | | | $ | 35,118 | | |
|
| | |
2017
|
| |
2016
|
| ||||||
Franchise tax
|
| | | $ | 378 | | | | | $ | 401 | | |
Other (income) expense
|
| | | | (152 ) | | | | | | 145 | | |
Total expense, net
|
| | | $ | 226 | | | | | $ | 546 | | |
|
| | |
2017
|
| |
2016
|
| ||||||
Assets: | | | | | | | | | | | | | |
Accounts receivable, net
|
| | | $ | 15 | | | | | $ | 251 | | |
Prepaid expenses and other current assets
|
| | | | 48 | | | | | | 69 | | |
Other long-term assets, net
|
| | | | — | | | | | | 4 | | |
Assets of discontinued operations
|
| | | $ | 63 | | | | | $ | 324 | | |
Liabilities: | | | | | | | | | | | | | |
Current portion of long-term debt
|
| | | $ | 1,250 | | | | | $ | 1,500 | | |
Accounts payable
|
| | | | 20 | | | | | | 8 | | |
Accrued liabilities
|
| | | | 500 | | | | | | 1,091 | | |
Current liabilities of discontinued operations
|
| | | | 1,770 | | | | | | 2,599 | | |
Long-term debt, net of current
|
| | | | 722 | | | | | | 1,939 | | |
Long-term liabilities of discontinued operations
|
| | | | 722 | | | | | | 1,939 | | |
Liabilities of discontinued operations
|
| | | $ | 2,492 | | | | | $ | 4,538 | | |
|
| | |
2017
|
| |
2016
|
| ||||||
Net Sales
|
| | | $ | — | | | | | $ | 45,913 | | |
Loss on disposal
|
| | | $ | — | | | | | $ | 5,783 | | |
Loss before income taxes
|
| | | | 1,148 | | | | | | 3,354 | | |
Income tax expense
|
| | | | — | | | | | | (964 ) | | |
Loss from discontinued operations
|
| | | $ | 1,148 | | | | | $ | 8,173 | | |
Depreciation
|
| | | $ | — | | | | | $ | 1,069 | | |
Amortization
|
| | | $ | — | | | | | $ | 18 | | |
(dollars in thousands)
|
| |
2016
|
| |
2017
|
| ||||||||||||||||||
Net Sales
|
| | | $ | 312,628 | | | | | | 100.0 % | | | | | $ | 348,844 | | | | | | 100.0 % | | |
Cost of Goods Sold
|
| | | | 214,688 | | | | | | 68.7 % | | | | | | 234,451 | | | | | | 67.2 % | | |
Gross profit
|
| | | | 97,940 | | | | | | 31.3 % | | | | | | 114,393 | | | | | | 32.8 % | | |
Operating Expenses: | | | | | | ||||||||||||||||||||
Selling, delivery, general and administrative expenses
|
| | | | 63,364 | | | | | | 20.3 % | | | | | | 67,572 | | | | | | 19.4 % | | |
Amortization expense
|
| | | | 6,231 | | | | | | 2.0 % | | | | | | 6,723 | | | | | | 1.9 % | | |
Stock compensation expense
|
| | | | 11 | | | | | | 0.0 % | | | | | | 1 | | | | | | 0.0 % | | |
Total selling, delivery, general and administrative expenses
|
| | | | 69,606 | | | | | | 22.3 % | | | | | | 74,296 | | | | | | 21.3 % | | |
Impairment of trade names
|
| | | | 200 | | | | | | 0.1 % | | | | | | 1,560 | | | | | | 0.4 % | | |
(Gain) loss on disposal of assets, net
|
| | | | 288 | | | | | | 0.1 % | | | | | | (239 ) | | | | | | (0.1 %) | | |
Total operating expenses
|
| | | | 70,094 | | | | | | 22.4 % | | | | | | 75,617 | | | | | | 21.7 % | | |
Operating Income from Continuing Operations
|
| | | | 27,846 | | | | | | 8.9 % | | | | | | 38,776 | | | | | | 11.1 % | | |
Interest expense
|
| | | | 42,479 | | | | | | 13.6 % | | | | | | 35,903 | | | | | | 10.3 % | | |
Other expense, net
|
| | | | 546 | | | | | | 0.2 % | | | | | | 226 | | | | | | 0.1 % | | |
Income (Loss) from Continuing Operations before Taxes
|
| | | | (15,179 ) | | | | | | (4.9 %) | | | | | | 2,647 | | | | | | 0.8 % | | |
Income tax expense
|
| | | | 1,320 | | | | | | 0.4 % | | | | | | 1,521 | | | | | | 0.4 % | | |
Income (Loss) from Continuing Operations
|
| | | | (16,499 ) | | | | | | (5.3 %) | | | | | | 1,126 | | | | | | 0.3 % | | |
Loss from discontinued operations, net of tax
|
| | | | (8,173 ) | | | | | | (2.6 %) | | | | | | (1,148 ) | | | | | | (0.3 %) | | |
Net Loss
|
| | | | (24,672 ) | | | | | | (7.9 %) | | | | | | (22 ) | | | | | | 0.0 % | | |
|
(dollars in thousands)
|
| |
2015
|
| |
2016
|
| ||||||||||||||||||
Net Sales
|
| | | $ | 300,453 | | | | | | 100.0 % | | | | | $ | 312,628 | | | | | | 100.0 % | | |
Cost of Goods Sold
|
| | | | 201,015 | | | | | | 66.9 % | | | | | | 214,688 | | | | | | 68.7 % | | |
Gross profit
|
| | | | 99,438 | | | | | | 33.1 % | | | | | | 97,940 | | | | | | 31.3 % | | |
Operating Expenses: | | | | | | ||||||||||||||||||||
Selling, delivery, general and administrative expenses
|
| | | | 63,841 | | | | | | 21.2 % | | | | | | 63,364 | | | | | | 20.3 % | | |
Amortization expense
|
| | | | 6,432 | | | | | | 2.1 % | | | | | | 6,231 | | | | | | 2.0 % | | |
Stock compensation expense
|
| | | | 11 | | | | | | 0.0 % | | | | | | 11 | | | | | | 0.0 % | | |
Total selling, delivery, general and administrative expenses
|
| | | | 70,284 | | | | | | 23.4 % | | | | | | 69,606 | | | | | | 22.3 % | | |
Impairment of trade name
|
| | | | 300 | | | | | | 0.1 % | | | | | | 200 | | | | | | 0.1 % | | |
Loss on disposal of assets, net
|
| | | | 6 | | | | | | 0.0 % | | | | | | 288 | | | | | | 0.1 % | | |
Total operating expenses
|
| | | | 70,590 | | | | | | 23.5 % | | | | | | 70,094 | | | | | | 22.4 % | | |
Operating Income from Continuing Operations
|
| | | | 28,848 | | | | | | 9.6 % | | | | | | 27,846 | | | | | | 8.9 % | | |
Interest expense
|
| | | | 39,804 | | | | | | 13.2 % | | | | | | 42,479 | | | | | | 13.6 % | | |
Other expense (income), net
|
| | | | (519 ) | | | | | | (0.2 %) | | | | | | 546 | | | | | | 0.2 % | | |
Loss from Continuing Operations before Income Taxes
|
| | | | (10,437 ) | | | | | | (3.5 %) | | | | | | (15,179 ) | | | | | | (4.9 %) | | |
Income tax expense
|
| | | | 2,229 | | | | | | 0.7 % | | | | | | 1,320 | | | | | | 0.4 % | | |
Loss from Continuing Operations
|
| | | | (12,666 ) | | | | | | (4.2 %) | | | | | | (16,499 ) | | | | | | (5.3 %) | | |
Loss from discontinued operations, net of tax
|
| | | | (13,402 ) | | | | | | (4.5 %) | | | | | | (8,173 ) | | | | | | (2.6 %) | | |
Net Loss
|
| | | | (26,068 ) | | | | | | (8.7 %) | | | | | | (24,672 ) | | | | | | (7.9 %) | | |
|
(dollars in thousands)
|
| |
2015
|
| |
2016
|
| |
2017
|
| |||||||||
Net cash flows provided by operating activities
|
| | | $ | 9,385 | | | | | $ | 14,241 | | | | | $ | 11,255 | | |
Net cash flows used in investing activities
|
| | | | (6,480 ) | | | | | | (2,994 ) | | | | | | (15,869 ) | | |
Net cash flows provided by (used in) financing activities
|
| | | | (3,915 ) | | | | | | (9,426 ) | | | | | | 5,492 | | |
Effect of exchange rate changes
|
| | | | (209 ) | | | | | | (66 ) | | | | | | 347 | | |
Total increase (decrease) in cash and cash equivalents
|
| | | $ | (1,219 ) | | | | | $ | 1,755 | | | | | $ | 1,225 | | |
(dollars in thousands)
|
| |
Total
|
| |
Less Than
1 Year |
| |
1 – 3 Years
|
| |
3 – 5 Years
|
| |
More Than
5 Years |
| |||||||||||||||
Long-term debt obligations
|
| | | $ | 307,051 | | | | | $ | 1,260 | | | | | $ | 305,772 | | | | | $ | 19 | | | | | $ | — | | |
Cash interest
(1)
|
| | | | 35,576 | | | | | | 23,692 | | | | | | 11,884 | | | | | | — | | | | | | — | | |
Capital lease obligations
|
| | | | 99 | | | | | | 32 | | | | | | 57 | | | | | | 10 | | | | | | — | | |
Operating lease obligations
|
| | | | 35,019 | | | | | | 6,288 | | | | | | 11,596 | | | | | | 7,051 | | | | | | 10,084 | | |
Purchase obligations
(2)
|
| | | | 140,858 | | | | | | 23,826 | | | | | | 47,453 | | | | | | 46,386 | | | | | | 23,193 | | |
Other long-term liabilities reflected on the balance sheet
(3)
|
| | | | 12,448 | | | | | | 4,456 | | | | | | 5,552 | | | | | | 1,647 | | | | | | 793 | | |
Total
|
| | | $ | 531,051 | | | | | $ | 59,554 | | | | | $ | 382,314 | | | | | $ | 55,113 | | | | | $ | 34,070 | | |
|
| | |
2016
|
| |
2015
|
| ||||||
ASSETS
|
| | | | | | | | | | | | |
CURRENT ASSETS: | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 1,810 | | | | | $ | 55 | | |
Restricted cash
|
| | | | 100 | | | | | | 100 | | |
Accounts receivable, net of allowance for doubtful accounts of $237 and $228, respectively
|
| | | | 24,997 | | | | | | 20,107 | | |
Inventories, net
|
| | | | 16,656 | | | | | | 14,898 | | |
Prepaid expenses and other current assets
|
| | | | 3,480 | | | | | | 4,422 | | |
Assets of discontinued operations
|
| | | | 324 | | | | | | 26,004 | | |
Total current assets
|
| | | | 47,367 | | | | | | 65,586 | | |
LONG-TERM ASSETS: | | | | | | | | | | | | | |
Property, plant and equipment, net
|
| | | | 29,692 | | | | | | 29,472 | | |
Goodwill
|
| | | | 31,492 | | | | | | 26,734 | | |
Intangible assets, net
|
| | | | 89,196 | | | | | | 88,003 | | |
Other assets, net
|
| | | | 5,697 | | | | | | 5,034 | | |
Total long-term assets
|
| | | | 156,077 | | | | | | 149,243 | | |
Total assets
|
| | | $ | 203,444 | | | | | $ | 214,829 | | |
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
| | | | | | | | | | | | |
CURRENT LIABILITIES: | | | | | | | | | | | | | |
Current portion of long-term debt
|
| | | $ | 287 | | | | | $ | 91 | | |
Accounts payable
|
| | | | 16,030 | | | | | | 14,368 | | |
Accrued liabilities
|
| | | | 29,283 | | | | | | 22,361 | | |
Liabilities of discontinued operations
|
| | | | 2,599 | | | | | | 7,564 | | |
Total current liabilities
|
| | | | 48,199 | | | | | | 44,384 | | |
LONG-TERM LIABILITIES: | | | | | | | | | | | | | |
Long-term debt, net of current
|
| | | | 299,543 | | | | | | 311,814 | | |
Long-term debt due to related party
|
| | | | 68,371 | | | | | | 53,556 | | |
Long-term liabilities of discontinued operations
|
| | | | 1,939 | | | | | | 3,645 | | |
Deferred tax liabilities
|
| | | | 18,037 | | | | | | 19,523 | | |
Other long-term liabilities
|
| | | | 10,409 | | | | | | 9,781 | | |
Total long-term liabilities
|
| | | | 398,299 | | | | | | 398,319 | | |
Total liabilities
|
| | | | 446,498 | | | | | | 442,703 | | |
COMMITMENTS AND CONTINGENCIES | | | | | | | | | | | | | |
STOCKHOLDERS’ DEFICIT: | | | | | | | | | | | | | |
Series A Preferred stock $.01 par value, 600,000 shares authorized, 321,494 shares issued and outstanding
|
| | | | 2 | | | | | | 2 | | |
Series B Preferred stock $0.01 par and 10,000 shares issued and outstanding
|
| | | | — | | | | | | — | | |
Common stock $.01 par value, 3,000,000 shares authorized 2,009,964 shares issued and outstanding
|
| | | | 20 | | | | | | 20 | | |
Paid-in capital
|
| | | | 240,005 | | | | | | 232,994 | | |
Accumulated deficit
|
| | | | (453,593 ) | | | | | | (428,921 ) | | |
Accumulated other comprehensive income (loss)
|
| | | | (29,488 ) | | | | | | (31,969 ) | | |
Total stockholders’ deficit
|
| | | | (243,054 ) | | | | | | (227,874 ) | | |
Total liabilities and stockholders’ deficit
|
| | | $ | 203,444 | | | | | $ | 214,829 | | |
|
| | |
2016
|
| |
2015
|
| ||||||
NET SALES
|
| | | $ | 312,628 | | | | | $ | 300,453 | | |
COST OF GOODS SOLD
|
| | | | 214,688 | | | | | | 201,015 | | |
Gross profit
|
| | | | 97,940 | | | | | | 99,438 | | |
OPERATING EXPENSES: | | | | | | | | | | | | | |
Selling, delivery, general and administrative expenses
|
| | | | 63,364 | | | | | | 63,841 | | |
Amortization expense
|
| | | | 6,231 | | | | | | 6,432 | | |
Stock compensation expense
|
| | | | 11 | | | | | | 11 | | |
Total selling, delivery, general and administrative expenses
|
| | | | 69,606 | | | | | | 70,284 | | |
Impairment of goodwill and other intangible assets
|
| | | | 200 | | | | | | 300 | | |
Loss on disposal of assets, net
|
| | | | 288 | | | | | | 6 | | |
Total operating expenses
|
| | | | 70,094 | | | | | | 70,590 | | |
OPERATING INCOME FROM CONTINUING OPERATIONS
|
| | | | 27,846 | | | | | | 28,848 | | |
Interest expense
|
| | | | 42,479 | | | | | | 39,804 | | |
Other expense (income), net
|
| | | | 546 | | | | | | (519 ) | | |
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
| | | | (15,179 ) | | | | | | (10,437 ) | | |
Income tax expense
|
| | | | 1,320 | | | | | | 2,229 | | |
LOSS FROM CONTINUING OPERATIONS
|
| | | | (16,499 ) | | | | | | (12,666 ) | | |
Loss from discontinued operations, net of tax
|
| | | | (8,173 ) | | | | | | (13,402 ) | | |
NET LOSS
|
| | | | (24,672 ) | | | | | | (26,068 ) | | |
Other comprehensive loss, net of taxes: | | | | | | | | | | | | | |
Foreign currency translation adjustment
|
| | | | 2,481 | | | | | | (15,729 ) | | |
Comprehensive loss
|
| | | $ | (22,191 ) | | | | | $ | (41,797 ) | | |
|
| | |
Series A
Preferred Stock |
| |
Series B
Preferred Stock |
| |
Common Stock
|
| |
Additional
Paid-in Capital |
| |
Accumulated
Deficit |
| |
Accumulated
Other Comprehensive Income (Loss) |
| |
Total
|
| |||||||||||||||||||||||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| ||||||||||||||||||||||||||||||||||||||||||
BALANCES, JANUARY 1, 2015
|
| | | | 321,494 | | | | | $ | 2 | | | | | | — | | | | | $ | — | | | | | | 2,009,964 | | | | | $ | 20 | | | | | $ | 232,983 | | | | | $ | (402,853 ) | | | | | $ | (16,240 ) | | | | | $ | (186,088 ) | | |
Equity based compensation
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 11 | | | | | | — | | | | | | — | | | | | | 11 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (26,068 ) | | | | | | — | | | | | | (26,068 ) | | |
Foreign currency translation gain
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (15,729 ) | | | | | | (15,729 ) | | |
BALANCES, DECEMBER 31, 2015
|
| | | | 321,494 | | | | | | 2 | | | | | | — | | | | | | — | | | | | | 2,009,964 | | | | | | 20 | | | | | | 232,994 | | | | | | (428,921 ) | | | | | | (31,969 ) | | | | | | (227,874 ) | | |
Equity based compensation
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 11 | | | | | | — | | | | | | — | | | | | | 11 | | |
Issuance preferred stock
|
| | | | — | | | | | | — | | | | | | 10,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | 7,000 | | | | | | — | | | | | | — | | | | | | 7,000 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (24,672 ) | | | | | | — | | | | | | (24,672 ) | | |
Foreign currency translation loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 2,481 | | | | | | 2,481 | | |
BALANCES, DECEMBER 31, 2016
|
| | | | 321,494 | | | | | $ | 2 | | | | | | 10,000 | | | | | $ | — | | | | | | 2,009,964 | | | | | $ | 20 | | | | | $ | 240,005 | | | | | $ | (453,593 ) | | | | | $ | (29,488 ) | | | | | $ | (243,054 ) | | |
|
| | |
2016
|
| |
2015
|
| ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | | | | | | |
Net loss
|
| | | $ | (24,672 ) | | | | | $ | (26,068 ) | | |
Adjustments to reconcile net loss to net cash used in operating activities:
|
| | | | | | | | | | | | |
Depreciation and amortization
|
| | | | 13,776 | | | | | | 15,940 | | |
Amortization of deferred financing costs
|
| | | | 1,506 | | | | | | 1,654 | | |
Accretion of notes discount
|
| | | | 8,045 | | | | | | 6,855 | | |
Non-cash interest
|
| | | | 7,692 | | | | | | 6,504 | | |
Impairment of property, plant and equipment
|
| | | | — | | | | | | 1,643 | | |
Impairment of goodwill and other intangible assets
|
| | | | 200 | | | | | | 300 | | |
Loss on sale of divisions
|
| | | | 5,783 | | | | | | — | | |
Loss (gain) on disposal of assets
|
| | | | 301 | | | | | | (83 ) | | |
Non-cash equity based compensation
|
| | | | 11 | | | | | | 11 | | |
Deferred taxes
|
| | | | (2,004 ) | | | | | | 191 | | |
Changes in assets and liabilities
|
| | | | | | | | | | | | |
Accounts receivable
|
| | | | (3,748 ) | | | | | | 7,474 | | |
Inventories
|
| | | | (1,124 ) | | | | | | 4,554 | | |
Prepaid expenses and other assets
|
| | | | 1,414 | | | | | | 2,092 | | |
Other long-term assets
|
| | | | (68 ) | | | | | | (6,656 ) | | |
Accounts payable
|
| | | | 3,763 | | | | | | (6,833 ) | | |
Long term vendor payable
|
| | | | — | | | | | | 1,927 | | |
Accrued and other long-term liabilities
|
| | | | 3,366 | | | | | | (120 ) | | |
Net cash provided by operating activities
|
| | | | 14,241 | | | | | | 9,385 | | |
CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | | | | | | |
Purchases of property, plant, and equipment
|
| | | | (9,347 ) | | | | | | (9,068 ) | | |
Proceeds from sales of assets
|
| | | | 117 | | | | | | 588 | | |
Proceeds from sale of divisions
|
| | | | 12,939 | | | | | | 2,000 | | |
Purchase of woindow and door company
|
| | | | (6,703 ) | | | | | | — | | |
Net cash used in investing activities
|
| | | | (2,994 ) | | | | | | (6,480 ) | | |
CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | | | | | | |
Borrowings under previous ABL credit facility
|
| | | | 17,600 | | | | | | 33,628 | | |
Payments on previous ABL credit facility
|
| | | | (32,200 ) | | | | | | (35,428 ) | | |
Borrowings under current ABL credit facility
|
| | | | 275 | | | | | | — | | |
Proceeds of series B preferred stock issuance
|
| | | | 7,000 | | | | | | — | | |
Payments on Term Note
|
| | | | (2,000 ) | | | | | | (2,000 ) | | |
Addition to capital leases
|
| | | | — | | | | | | 36 | | |
Payments on capital leases
|
| | | | (101 ) | | | | | | (151 ) | | |
Net cash used in financing activities
|
| | | | (9,426 ) | | | | | | (3,915 ) | | |
EFFECT OF EXCHANGE RATE CHANGES
|
| | | | (66 ) | | | | | | (209 ) | | |
NET DECREASE IN CASH AND CASH EQUIVALENTS
|
| | | | 1,755 | | | | | | (1,219 ) | | |
CASH AND CASH EQUIVALENTS – Beginning of period
|
| | | | 55 | | | | | | 1,274 | | |
CASH AND CASH EQUIVALENTS – End of period
|
| | | $ | 1,810 | | | | | $ | 55 | | |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | | | | | | | | | | | | | |
Cash paid for: | | | | | | | | | | | | | |
Interest
|
| | | $ | 23,918 | | | | | $ | 24,726 | | |
Income taxes
|
| | | $ | 2,087 | | | | | $ | 1,352 | | |
Non-cash investing activities: | | | | | | | | | | | | | |
Purchase of intangibles and goodwill through the Term Note
|
| | | $ | 1,882 | | | | | $ | — | | |
Purchases of property, plant and equipment
|
| | | $ | 334 | | | | | $ | 769 | | |
|
| | |
Estimated
Useful Life |
|
Buildings and improvements
|
| |
20 – 30 years
|
|
Machinery and equipment
|
| |
3 – 10 years
|
|
Software implementation costs
|
| |
3 years
|
|
| | |
2016
|
| |
2015
|
| ||||||
Beginning reserve for warranties
|
| | | $ | (3,267 ) | | | | | $ | (4,635 ) | | |
Change in provision
|
| | | | (5,169 ) | | | | | | (2,411 ) | | |
Settlements
|
| | | | 4,607 | | | | | | 3,779 | | |
Ending reserve for warranties
|
| | | $ | (3,829 ) | | | | | $ | (3,267 ) | | |
|
| | |
2016
|
| |
2015
|
| ||||||
Beginning deferred revenue
|
| | | $ | (1,813 ) | | | | | $ | (1,309 ) | | |
Sales
|
| | | | (1,214 ) | | | | | | (970 ) | | |
Amortization
|
| | | | 697 | | | | | | 466 | | |
Ending deferred revenue
|
| | | $ | (2,330 ) | | | | | $ | (1,813 ) | | |
|
| | |
2016
|
| |
2015
|
| ||||||
Raw materials
|
| | | $ | 13,422 | | | | | $ | 11,052 | | |
Work in process
|
| | | | 244 | | | | | | 239 | | |
Finished goods
|
| | | | 2,990 | | | | | | 3,607 | | |
Total
|
| | | $ | 16,656 | | | | | $ | 14,898 | | |
|
| | |
2016
|
| |
2015
|
| ||||||
Land
|
| | | $ | 596 | | | | | $ | 578 | | |
Buildings and leasehold improvements
|
| | | | 10,089 | | | | | | 8,953 | | |
Machinery and equipment
|
| | | | 58,258 | | | | | | 52,485 | | |
Internally developed software
|
| | | | 2,684 | | | | | | 1,946 | | |
Construction-in-process
|
| | | | 1,374 | | | | | | 2,963 | | |
Total
|
| | | | 73,001 | | | | | | 66,925 | | |
Less accumulated depreciation
|
| | | | (43,309 ) | | | | | | (37,453 ) | | |
Net property, plant and equipment
|
| | | $ | 29,692 | | | | | $ | 29,472 | | |
|
| | |
2016
|
| |
2015
|
| ||||||
Hardware
|
| | | | 449 | | | | | | 449 | | |
Machinery and equipment
|
| | | | 29 | | | | | | 29 | | |
Office equipment
|
| | | | 55 | | | | | | 45 | | |
Total
|
| | | | 533 | | | | | | 523 | | |
Less accumulated depreciation
|
| | | | (490 ) | | | | | | (479 ) | | |
Net capital lease assets
|
| | | $ | 43 | | | | | $ | 44 | | |
|
|
Balance, December 31, 2014
|
| | | $ | 30,834 | | |
|
Foreign currency translation adjustments
|
| | | | (4,100 ) | | |
|
Balance, December 31, 2015
|
| | | | 26,734 | | |
|
Foreign currency translation adjustments
|
| | | | 655 | | |
|
Goodwill on acquisition of window and door company
|
| | | | 4,103 | | |
|
Balance, December 31, 2016
|
| | | $ | 31,492 | | |
|
2016
|
| ||||||||||||||||||||||||||||||||||||
| | |
Beginning
|
| |
Additions
|
| |
Amortization
|
| |
Impairment
|
| |
Currency
Translation Adjustments |
| |
Ending
|
| ||||||||||||||||||
Intangible assets with finite lives | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Customer relationships
|
| | | $ | 103,352 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 2,301 | | | | | $ | 105,653 | | |
Accumulated amortization
|
| | | | (25,948 ) | | | | | | — | | | | | | (4,711 ) | | | | | | — | | | | | | (481 ) | | | | | | (31,140 ) | | |
Net intangible assets with finite lives
|
| | | | 77,404 | | | | | | — | | | | | | (4,711 ) | | | | | | — | | | | | | 1,820 | | | | | | 74,513 | | |
Intangible assets with indefinite lives
Trade names |
| | | | 10,599 | | | | | | 4,096 | | | | | | — | | | | | | (200 ) | | | | | | 188 | | | | | | 14,683 | | |
Intangible assets, net
|
| | | $ | 88,003 | | | | | $ | 4,096 | | | | | $ | (4,711 ) | | | | | $ | (200 ) | | | | | $ | 2,008 | | | | | $ | 89,196 | | |
|
2015
|
| ||||||||||||||||||||||||||||||||||||
| | |
Beginning
|
| |
Additions
|
| |
Amortization
|
| |
Impairment
|
| |
Currency
Translation Adjustments |
| |
Ending
|
| ||||||||||||||||||
Intangible assets with finite lives | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Customer relationships
|
| | | $ | 117,747 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | (14,395 ) | | | | | $ | 103,352 | | |
Accumulated amortization
|
| | | | (24,056 ) | | | | | | — | | | | | | (4,829 ) | | | | | | — | | | | | | 2,937 | | | | | | (25,948 ) | | |
Net intangible assets with finite lives
|
| | | | 93,691 | | | | | | — | | | | | | (4,829 ) | | | | | | — | | | | | | (11,458 ) | | | | | | 77,404 | | |
Intangible assets with indefinite lives
Trade names |
| | | | 12,077 | | | | | | — | | | | | | — | | | | | | (300 ) | | | | | | (1,178 ) | | | | | | 10,599 | | |
Intangible assets, net
|
| | | $ | 105,768 | | | | | $ | — | | | | | $ | (4,829 ) | | | | | $ | (300 ) | | | | | $ | (12,636 ) | | | | | $ | 88,003 | | |
|
|
2017
|
| | | $ | 4,829 | | |
|
2018
|
| | | | 4,829 | | |
|
2019
|
| | | | 4,829 | | |
|
2020
|
| | | | 4,829 | | |
|
2021
|
| | | | 4,829 | | |
|
Thereafter
|
| | | | 50,368 | | |
|
Total
|
| | | $ | 74,513 | | |
|
| | |
2016
|
| |
2015
|
| ||||||
Warranty
|
| | | $ | 2,517 | | | | | $ | 2,393 | | |
Unearned revenue
|
| | | | 1,706 | | | | | | 1,547 | | |
Insurance reserves
|
| | | | 3,860 | | | | | | 4,060 | | |
Contingent consideration
|
| | | | 887 | | | | | | — | | |
Legal loss-contingencies
|
| | | | 750 | | | | | | 1,500 | | |
Deferred rent
|
| | | | 252 | | | | | | 108 | | |
Other
|
| | | | 437 | | | | | | 173 | | |
Total other long-term liabilities
|
| | | $ | 10,409 | | | | | $ | 9,781 | | |
|
| | |
2016
|
| |
2015
|
| ||||||
Notes receivable
|
| | | $ | 289 | | | | | $ | 289 | | |
Deposits
|
| | | | 1,322 | | | | | | 1,049 | | |
Samples and displays, net
|
| | | | 2,510 | | | | | | 2,098 | | |
Insurance receivable
|
| | | | 1,022 | | | | | | 1,008 | | |
Deferred financing costs, net
|
| | | | 554 | | | | | | 580 | | |
Other
|
| | | | — | | | | | | 10 | | |
Total other assets, net
|
| | | $ | 5,697 | | | | | $ | 5,034 | | |
|
| Present value of purchase price: | | | | | | | |
|
Cash paid
|
| | | $ | 6,703 | | |
|
Contingent payable
|
| | | | 1,882 | | |
|
Working capital adjustment
|
| | | | 827 | | |
|
Total purchase price
|
| | | $ | 9,412 | | |
| Fair value of assets acquired: | | | | | | | |
|
Accounts receivable
|
| | | $ | 1,186 | | |
|
Inventories
|
| | | | 675 | | |
|
Deposits and prepaid
|
| | | | 118 | | |
|
Property, plant and equipment
|
| | | | 167 | | |
|
Trade name
|
| | | | 4,096 | | |
|
Goodwill
|
| | | | 4,103 | | |
|
Accounts payable
|
| | | | (290 ) | | |
|
Customer deposits
|
| | | | (643 ) | | |
|
Total fair value of assets acquired:
|
| | | $ | 9,412 | | |
|
| | |
2016
|
| |
2015
|
| ||||||
Senior secured asset based revolving credit facility
|
| | | $ | 275 | | | | | $ | 14,600 | | |
Senior Secured Notes, including net unamortized discount and deffered financing costs of $5,483 and $4,932, respectively
|
| | | | 299,517 | | | | | | 297,168 | | |
Related party notes, including paid-in-kind interest of $18,371 and
$10,679 respectively, and net of unamortized discount of $0 and $7,123, respectively |
| | | | 68,371 | | | | | | 53,556 | | |
Capital lease obligations
|
| | | | 38 | | | | | | 137 | | |
Total debt
|
| | | | 368,201 | | | | | | 365,461 | | |
Less current portion of long-term debt: | | | | | | | | | | | | | |
Senior secured asset based revolving credit facility
|
| | | | (275 ) | | | | | | — | | |
Capital lease obligations
|
| | | | (12 ) | | | | | | (91 ) | | |
Current portion of long-term debt
|
| | | | (287 ) | | | | | | (91 ) | | |
Long-term debt
|
| | | $ | 367,914 | | | | | $ | 365,370 | | |
|
|
2017
|
| | | $ | 1,512 | | |
|
2018
|
| | | | 1,258 | | |
|
2019
|
| | | | 374,129 | | |
|
2020
|
| | | | 8 | | |
|
2021
|
| | | | 277 | | |
|
Thereafter
|
| | | | — | | |
|
Total
|
| | | $ | 377,184 | | |
|
| | |
2016
|
| |
2015
|
| ||||||
Salaries and payroll taxes
|
| | | $ | 3,777 | | | | | $ | 4,281 | | |
Advertising allowances and customer rebates
|
| | | | 3,225 | | | | | | 1,464 | | |
Sales, use and property taxes
|
| | | | 894 | | | | | | 270 | | |
Warranty, current
|
| | | | 1,312 | | | | | | 874 | | |
Management fees, related party
|
| | | | 8,750 | | | | | | 7,000 | | |
Professional services
|
| | | | 614 | | | | | | 709 | | |
Restructuring charges
|
| | | | 559 | | | | | | 23 | | |
Interest
|
| | | | 3,943 | | | | | | 4,216 | | |
Insurance reserves, current
|
| | | | 2,192 | | | | | | 2,374 | | |
Unearned revenue, current
|
| | | | 1,305 | | | | | | 480 | | |
Contingent consideration, net
|
| | | | 995 | | | | | | — | | |
Income taxes
|
| | | | 470 | | | | | | 456 | | |
Other
|
| | | | 1,247 | | | | | | 214 | | |
Total accrued liabilities
|
| | | $ | 29,283 | | | | | $ | 22,361 | | |
|
| | |
2016
|
| |
2015
|
|||||
Deferred income tax assets: | | | | | | | | | | | |
Accounts receivable allowance
|
| | | $ | 299 | | | | | $ | 550 |
Inventory cost capitalization and valuation
|
| | | | 675 | | | | | | 1,067 |
Accrued vacation and bonuses
|
| | | | 267 | | | | | | 1,000 |
Other accrued liabilities
|
| | | | 978 | | | | | | 805 |
Currency translation adjustment
|
| | | | 344 | | | | | | 346 |
Warranty
|
| | | | 426 | | | | | | 1,529 |
Workers’ compensation
|
| | | | 359 | | | | | | 152 |
Alternative minimum tax carryforwards and other
|
| | | | 372 | | | | | | 373 |
Related party interest
|
| | | | 6,981 | | | | | | 4,058 |
Forward contract
|
| | | | 12 | | | | | | — |
Net operating loss carryforwards
|
| | | | 202,625 | | | | | | 195,127 |
Total deferred income tax assets
|
| | | | 213,338 | | | | | | 205,007 |
Valuation allowance
|
| | | | (204,817 ) | | | | | | (197,370 ) |
Net deferred income tax assets
|
| | | | 8,521 | | | | | | 7,637 |
Deferred income tax liabilities: | | | | | | | | | | | |
Fixed and intangible assets
|
| | | | (26,558 ) | | | | | | (27,160 ) |
Total deferred income tax liabilities
|
| | | | (26,558 ) | | | | | | (27,160 ) |
Net deferred income taxes
|
| | | $ | (18,037 ) | | | | | $ | (19,523 ) |
|
| | |
2016
|
| |
2015
|
| ||||||
Federal income tax provision (benefit): | | | | | | | | | | | | | |
Current
|
| | | $ | — | | | | | $ | — | | |
Deferred
|
| | | | — | | | | | | 309 | | |
State income tax provision (benefit): | | | | | | | | | | | | | |
Current
|
| | | | 47 | | | | | | 134 | | |
Deferred
|
| | | | (228 ) | | | | | | 770 | | |
Foreign income tax provision (benefit): | | | | | | | | | | | | | |
Current
|
| | | | 2,308 | | | | | | 1,839 | | |
Deferred
|
| | | | (807 ) | | | | | | (823 ) | | |
Income tax expense
|
| | | $ | 1,320 | | | | | $ | 2,229 | | |
|
| | |
2016
|
| |
2015
|
| ||||||
Tax benefit computed at statutory rate
|
| | | $ | (5,313 ) | | | | | $ | (3,658 ) | | |
State taxes, net of federal tax effects
|
| | | | (181 ) | | | | | | 857 | | |
Foreign rate difference
|
| | | | (640 ) | | | | | | (407 ) | | |
Valuation allowance
|
| | | | 5,966 | | | | | | 7,495 | | |
Other permanent differences
|
| | | | 1,488 | | | | | | (2,058 ) | | |
Income tax expense
|
| | | $ | 1,320 | | | | | $ | 2,229 | | |
|
| | | | | | | | |
Operating Leases
|
| | ||||||||||||||
| | |
Capital
Leases |
| |
Vehicle, Office
and Warehouse Equipment |
| |
Facility and
Real Property |
| |
Total
|
| ||||||||||||
2017
|
| | | $ | 12 | | | | | $ | 1,036 | | | | | $ | 5,676 | | | | | $ | 6,724 | | |
2018
|
| | | | 8 | | | | | | 765 | | | | | | 4,994 | | | | | | 5,767 | | |
2019
|
| | | | 8 | | | | | | 460 | | | | | | 4,914 | | | | | | 5,382 | | |
2020
|
| | | | 8 | | | | | | 385 | | | | | | 4,927 | | | | | | 5,320 | | |
2021
|
| | | | 2 | | | | | | 349 | | | | | | 4,426 | | | | | | 4,777 | | |
Thereafter
|
| | | | — | | | | | | 1,871 | | | | | | 9,595 | | | | | | 11,466 | | |
Total
|
| | | $ | 38 | | | | | $ | 4,866 | | | | | $ | 34,532 | | | | | $ | 39,436 | | |
|
| | |
2016
|
| |
2015
|
| ||||||
Franchise tax
|
| | | $ | 401 | | | | | $ | 173 | | |
Legal settlement, net of expenses
|
| | | | — | | | | | | (992 ) | | |
Other
|
| | | | 145 | | | | | | 300 | | |
Total expense (income), net
|
| | | $ | 546 | | | | | $ | (519 ) | | |
|
| | |
2016
|
| |
2015
|
| ||||||
Assets: | | | | | | | | | | | | | |
Accounts receivable, net
|
| | | $ | 251 | | | | | $ | 8,736 | | |
Inventories, net
|
| | | | — | | | | | | 6,444 | | |
Prepaid expenses and other current assets
|
| | | | 69 | | | | | | 643 | | |
Property, plant and equipment, net
|
| | | | — | | | | | | 6,015 | | |
Goodwill
|
| | | | — | | | | | | 2,663 | | |
Intangible assets, net
|
| | | | — | | | | | | 1,154 | | |
Other long-term assets, net
|
| | | | 4 | | | | | | 349 | | |
Assets of discontinued operations
|
| | | $ | 324 | | | | | $ | 26,004 | | |
Liabilities: | | | | | | | | | | | | | |
Current portion of long-term debt
|
| | | $ | 1,500 | | | | | $ | 2,000 | | |
Accounts payable
|
| | | | 8 | | | | | | 2,125 | | |
Accrued liabilities
|
| | | | 1,091 | | | | | | 3,439 | | |
Current liabilities of discontinued operations
|
| | | | 2,599 | | | | | | 7,564 | | |
Long-term debt, net of current
|
| | | | 1,939 | | | | | | 3,386 | | |
Other long-term liabilities
|
| | | | — | | | | | | 259 | | |
Long-term liabilities of discontinued operations
|
| | | | 1,939 | | | | | | 3,645 | | |
Liabilities of discontinued operations
|
| | | $ | 4,538 | | | | | $ | 11,209 | | |
|
| | |
2016
|
| |
2015
|
| ||||||
Net Sales
|
| | | $ | 45,913 | | | | | $ | 105,383 | | |
Loss on disposal
|
| | | $ | 5,783 | | | | | $ | 897 | | |
Loss before income taxes
|
| | | | 3,354 | | | | | | 12,482 | | |
Income tax (benefit)/expense
|
| | | | (964 ) | | | | | | 23 | | |
Loss from discontinued operations
|
| | | $ | 8,173 | | | | | $ | 13,402 | | |
Depreciation
|
| | | $ | 1,069 | | | | | $ | 2,398 | | |
Amortization
|
| | | $ | 18 | | | | | $ | 286 | | |
| | |
March 31,
2018 |
| |
December 31,
2017 |
| ||||||
ASSETS
|
| ||||||||||||
CURRENT ASSETS: | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 5,785 | | | | | $ | 3,035 | | |
Restricted cash
|
| | | | 99 | | | | | | 100 | | |
Accounts receivable, net of allowance for doubtful accounts of $392 and $373,
respectively |
| | | | 26,379 | | | | | | 27,081 | | |
Inventories
|
| | | | 19,309 | | | | | | 15,765 | | |
Prepaid expenses and other current assets
|
| | | | 3,671 | | | | | | 3,873 | | |
Assets of discontinued operations
|
| | | | 48 | | | | | | 63 | | |
Total current assets
|
| | | | 55,291 | | | | | | 49,917 | | |
LONG-TERM ASSETS: | | | | | | | | | | | | | |
Property, plant and equipment, net
|
| | | | 28,339 | | | | | | 29,392 | | |
Goodwill
|
| | | | 35,936 | | | | | | 36,780 | | |
Intangible assets, net
|
| | | | 89,274 | | | | | | 92,509 | | |
Other assets, net
|
| | | | 4,850 | | | | | | 5,032 | | |
Total long-term assets
|
| | | | 158,399 | | | | | | 163,713 | | |
Total assets
|
| | | $ | 213,690 | | | | | $ | 213,630 | | |
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
| ||||||||||||
CURRENT LIABILITIES: | | | | | | | | | | | | | |
Current portion of long-term debt
|
| | | $ | 42 | | | | | $ | 42 | | |
Accounts payable
|
| | | | 13,702 | | | | | | 12,389 | | |
Accrued liabilities
|
| | | | 26,894 | | | | | | 21,570 | | |
Liabilities of discontinued operations
|
| | | | 1,680 | | | | | | 1,770 | | |
Total current liabilities
|
| | | | 42,318 | | | | | | 35,771 | | |
LONG-TERM LIABILITIES: | | | | | | | | | | | | | |
Long-term debt, net of current
|
| | | | 302,549 | | | | | | 301,974 | | |
Long-term debt due to related party
|
| | | | 79,709 | | | | | | 77,326 | | |
Long-term liabilities of discontinued operations
|
| | | | 728 | | | | | | 722 | | |
Deferred tax liabilities
|
| | | | 16,223 | | | | | | 17,145 | | |
Other long-term liabilities
|
| | | | 8,641 | | | | | | 8,274 | | |
Total long-term liabilities
|
| | | | 407,850 | | | | | | 405,441 | | |
Total liabilities
|
| | | | 450,168 | | | | | | 441,212 | | |
COMMITMENTS AND CONTINGENCIES | | | | | | | | | | | | | |
STOCKHOLDERS’ DEFICIT: | | | | | | | | | | | | | |
Series A Preferred stock $.01 par value, 600,000 shares authorized, 321,494 shares issued and outstanding
|
| | | | 2 | | | | | | 2 | | |
Series B Preferred stock $0.01 par and 22,141 shares issued and outstanding
|
| | | | — | | | | | | — | | |
Common stock $.01 par value, 3,000,000 shares authorized 2,009,964 shares issued and outstanding
|
| | | | 20 | | | | | | 20 | | |
Paid-in capital
|
| | | | 248,505 | | | | | | 248,505 | | |
Accumulated deficit
|
| | | | (459,618 ) | | | | | | (453,615 ) | | |
Accumulated other comprehensive loss
|
| | | | (25,387 ) | | | | | | (22,494 ) | | |
Total stockholders’ deficit
|
| | | | (236,478 ) | | | | | | (227,582 ) | | |
Total liabilities and stockholders’ deficit
|
| | | $ | 213,690 | | | | | $ | 213,630 | | |
|
| | |
March 31,
2018 |
| |
March 31,
2017 |
|||||
NET SALES
|
| | | $ | 72,369 | | | | | $ | 69,465 |
COST OF GOODS SOLD
|
| | | | 50,873 | | | | | | 49,304 |
Gross profit
|
| | | | 21,496 | | | | | | 20,161 |
OPERATING EXPENSES: | | | | | | | | | | | |
Selling, delivery, general and administrative expenses
|
| | | | 16,694 | | | | | | 16,499 |
Amortization expense
|
| | | | 1,722 | | | | | | 1,588 |
Total selling, delivery, general and administrative expenses
|
| | | | 18,416 | | | | | | 18,087 |
Gain on disposal of assets, net
|
| | | | — | | | | | | (201 ) |
Total operating expenses
|
| | | | 18,416 | | | | | | 17,886 |
OPERATING INCOME FROM CONTINUING OPERATIONS
|
| | | | 3,080 | | | | | | 2,275 |
Interest expense
|
| | | | 9,050 | | | | | | 8,852 |
Other expense, net
|
| | | | 61 | | | | | | 64 |
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
| | | | (6,031 ) | | | | | | (6,641 ) |
Income tax expense (benefit)
|
| | | | (464 ) | | | | | | 120 |
LOSS FROM CONTINUING OPERATIONS
|
| | | | (5,567 ) | | | | | | (6,761 ) |
Loss from discontinued operations, net of tax
|
| | | | (436 ) | | | | | | (241 ) |
NET LOSS
|
| | | | (6,003 ) | | | | | | (7,002 ) |
Other comprehensive (loss) income, net of taxes: | | | | | | | | | | | |
Foreign currency translation adjustment
|
| | | | (2,893 ) | | | | | | 656 |
Comprehensive loss
|
| | | $ | (8,896 ) | | | | | $ | (6,346 ) |
|
| | |
March 31,
2018 |
| |
March 31,
2017 |
| ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | | | | | | |
Net loss
|
| | | $ | (6,003 ) | | | | | $ | (7,002 ) | | |
Adjustments to reconcile net loss to net cash provided by operating activities:
|
| | | | | | | | | | | | |
Depreciation and amortization
|
| | | | 3,361 | | | | | | 3,207 | | |
Amortization of deferred financing costs
|
| | | | 414 | | | | | | 380 | | |
Accretion of notes discount
|
| | | | 223 | | | | | | 226 | | |
Non-cash interest
|
| | | | 2,383 | | | | | | 2,128 | | |
Gain on disposal of assets
|
| | | | — | | | | | | (201 ) | | |
Deferred taxes
|
| | | | (489 ) | | | | | | — | | |
Changes in assets and liabilities:
|
| | | | | | | | | | | | |
Accounts receivable
|
| | | | 609 | | | | | | (1,632 ) | | |
Inventories
|
| | | | (3,710 ) | | | | | | (1,650 ) | | |
Prepaid expenses and other assets
|
| | | | 164 | | | | | | 173 | | |
Other long-term assets
|
| | | | 26 | | | | | | 653 | | |
Accounts payable
|
| | | | 1,434 | | | | | | (219 ) | | |
Accrued and other long-term liabilities
|
| | | | 5,787 | | | | | | 6,481 | | |
Net cash provided by operating activities
|
| | | | 4,199 | | | | | | 2,544 | | |
CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | | | | | | |
Purchases of property, plant, and equipment
|
| | | | (1,339 ) | | | | | | (2,794 ) | | |
Proceeds from sales of assets
|
| | | | — | | | | | | 268 | | |
Purchase of entry door company
|
| | | | — | | | | | | (9,036 ) | | |
Net cash used in investing activities
|
| | | | (1,339 ) | | | | | | (11,562 ) | | |
CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | | | | | | |
Borrowings under ABL Credit Facility
|
| | | | — | | | | | | 5,058 | | |
Payments under ABL Credit Facility
|
| | | | — | | | | | | (3,050 ) | | |
Proceeds from capital contributions
|
| | | | — | | | | | | 6,700 | | |
Payments on capital leases
|
| | | | (8 ) | | | | | | (3 ) | | |
Net cash (used in) provided by financing activities
|
| | | | (8 ) | | | | | | 8,705 | | |
EFFECT OF EXCHANGE RATE CHANGES
|
| | | | (102 ) | | | | | | (75 ) | | |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
| | | | 2,750 | | | | | | (388 ) | | |
CASH AND CASH EQUIVALENTS – Beginning of period
|
| | | | 3,035 | | | | | | 1,810 | | |
CASH AND CASH EQUIVALENTS – End of period
|
| | | $ | 5,785 | | | | | $ | 1,422 | | |
|
| | |
31-Mar-18
|
| |
31-Dec-17
|
| ||||||
Raw materials
|
| | | $ | 14,705 | | | | | $ | 12,906 | | |
Work in process
|
| | | | 449 | | | | | | 336 | | |
Finished goods
|
| | | | 4,155 | | | | | | 2,523 | | |
Total
|
| | | $ | 19,309 | | | | | $ | 15,765 | | |
|
| | |
31-Mar-18
|
| |
31-Dec-17
|
| ||||||
Land
|
| | | $ | 620 | | | | | $ | 638 | | |
Buildings and leasehold improvements
|
| | | | 11,797 | | | | | | 11,799 | | |
Machinery and equipment
|
| | | | 63,486 | | | | | | 63,420 | | |
Internally developed software
|
| | | | 2,859 | | | | | | 2,688 | | |
Construction-in-process
|
| | | | 1,160 | | | | | | 1,059 | | |
Total
|
| | | | 79,922 | | | | | | 79,604 | | |
Less accumulated depreciation
|
| | | | (51,583 ) | | | | | | (50,212 ) | | |
Net property, plant and equipment
|
| | | $ | 28,339 | | | | | $ | 29,392 | | |
|
| | |
31-Mar-18
|
| |
31-Dec-17
|
| ||||||
Hardware
|
| | | $ | 449 | | | | | $ | 449 | | |
Vehicles
|
| | | | 86 | | | | | | 88 | | |
Machinery and equipment
|
| | | | 29 | | | | | | 29 | | |
Office equipment
|
| | | | 42 | | | | | | 44 | | |
Total
|
| | | | 606 | | | | | | 610 | | |
Less accumulated depreciation
|
| | | | (524 ) | | | | | | (527 ) | | |
Net capital lease assets
|
| | | $ | 82 | | | | | $ | 83 | | |
|
| | |
Goodwill
|
| |||
Balance, December 31, 2017
|
| | | $ | 36,780 | | |
Foreign currency translation adjustments
|
| | | | (844 ) | | |
Balance, March 31, 2018
|
| | | $ | 35,936 | | |
|
| | |
31-Dec-17
|
| |
Additions
|
| |
Amortization
|
| |
Currency
Translation Adjustments |
| |
31-Mar-18
|
| |||||||||||||||
Intangible assets with finite lives | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Customer relationships
|
| | | $ | 115,832 | | | | | $ | — | | | | | $ | — | | | | | $ | (2,348 ) | | | | | $ | 113,484 | | |
Accumulated amortization
|
| | | | (37,765 ) | | | | | | — | | | | | | (1,314 ) | | | | | | 706 | | | | | | (38,373 ) | | |
Net intangible assets with finite lives
|
| | | | 78,067 | | | | | | — | | | | | | (1,314 ) | | | | | | (1,642 ) | | | | | | 75,111 | | |
Intangible assets with indefinite lives | | | | | | | |||||||||||||||||||||||||
Trade names
|
| | | | 14,442 | | | | | | — | | | | | | — | | | | | | (279 ) | | | | | | 14,163 | | |
Intangible assets, net
|
| | | $ | 92,509 | | | | | $ | — | | | | | $ | (1,314 ) | | | | | $ | (1,921 ) | | | | | $ | 89,274 | | |
|
| | |
For the Three Months Ended
|
| |||||||||
| | |
31-Mar-18
|
| |
31-Mar-17
|
| ||||||
Net loss
|
| | | $ | (6,003 ) | | | | | $ | (7,002 ) | | |
Foreign currency translation (loss) gain
|
| | | | (2,893 ) | | | | | | 656 | | |
Comprehensive loss
|
| | | $ | (8,896 ) | | | | | $ | (6,346 ) | | |
|
| | |
31-Mar-18
|
| |
31-Dec-17
|
| ||||||
Salaries and payroll taxes
|
| | | $ | 5,763 | | | | | $ | 3,927 | | |
Advertising allowances and customer rebates
|
| | | | 2,281 | | | | | | 4,395 | | |
Sales, use and property taxes
|
| | | | 397 | | | | | | 336 | | |
Warranty, current
|
| | | | 1,760 | | | | | | 1,783 | | |
Management fees, related party
|
| | | | 438 | | | | | | — | | |
Professional services
|
| | | | 347 | | | | | | 637 | | |
Restructuring charges
|
| | | | 73 | | | | | | 162 | | |
Interest
|
| | | | 9,902 | | | | | | 3,994 | | |
Insurance reserves, current
|
| | | | 1,994 | | | | | | 1,880 | | |
Unearned revenue, current
|
| | | | 1,933 | | | | | | 1,953 | | |
Contingent consideration, net
|
| | | | 1,077 | | | | | | 1,080 | | |
Income taxes
|
| | | | 565 | | | | | | 1,001 | | |
Other
|
| | | | 364 | | | | | | 422 | | |
Total accrued liabilities
|
| | | $ | 26,894 | | | | | $ | 21,570 | | |
|
| | |
31-Mar-18
|
| |
31-Dec-17
|
| ||||||
Senior Secured Notes, including net unamortized discount and deferred financing fees of $2,546 and $3,133 respectively
|
| | | $ | 302,454 | | | | | $ | 301,867 | | |
Related party notes, including paid-in-kind interest of $29,709 and $27,326 respectively
|
| | | | 79,709 | | | | | | 77,326 | | |
Other long term payable
|
| | | | 48 | | | | | | 50 | | |
Capital lease obligations
|
| | | | 89 | | | | | | 99 | | |
Total debt
|
| | | | 382,300 | | | | | | 379,342 | | |
Less current portion of long-term debt: | | | | ||||||||||
Other long term payable
|
| | | | (10 ) | | | | | | (10 ) | | |
Capital lease obligations
|
| | | | (32 ) | | | | | | (32 ) | | |
Current portion of long-term debt
|
| | | | (42 ) | | | | | | (42 ) | | |
Long-term debt
|
| | | $ | 382,258 | | | | | $ | 379,300 | | |
|
|
April 2018 – March 2019
|
| | | $ | 1,282 | | |
|
April 2019 – March 2020
|
| | | | 385,488 | | |
|
April 2020 – March 2021
|
| | | | 21 | | |
|
April 2021 – March 2022
|
| | | | 7 | | |
|
Total
|
| | | $ | 386,798 | | |
|
| | |
Capital Leases
|
| |
Operating Leases
|
| |
Total
|
| |||||||||||||||
| | |
Vehicle, Office
and Warehouse Equipment |
| |
Facility and
Real Property |
| ||||||||||||||||||
Apr 2018 – Mar 2019
|
| | | $ | 32 | | | | | $ | 748 | | | | | $ | 5,575 | | | | | $ | 6,355 | | |
Apr 2019 – Mar 2020
|
| | | | 29 | | | | | | 577 | | | | | | 5,418 | | | | | | 6,024 | | |
Apr 2020 – Mar 2021
|
| | | | 21 | | | | | | 472 | | | | | | 5,132 | | | | | | 5,625 | | |
Apr 2021 – Mar 2022
|
| | | | 7 | | | | | | 434 | | | | | | 3,901 | | | | | | 4,342 | | |
Apr 2022 – Mar 2023
|
| | | | — | | | | | | 433 | | | | | | 1,659 | | | | | | 2,092 | | |
Thereafter
|
| | | | — | | | | | | 1,021 | | | | | | 7,568 | | | | | | 8,589 | | |
Total
|
| | | $ | 89 | | | | | $ | 3,685 | | | | | $ | 29,253 | | | | | $ | 33,027 | | |
|
| | |
31-Mar-18
|
| |
31-Dec-17
|
| ||||||
Assets: | | | | | | | | | | | | | |
Accounts receivable, net
|
| | | $ | — | | | | | $ | 15 | | |
Prepaid expenses and other current assets
|
| | | | 48 | | | | | | 48 | | |
Assets of discontinued operations
|
| | | $ | 48 | | | | | $ | 63 | | |
Liabilities: | | | | | | | | | | | | | |
Current portion of long-term debt
|
| | | $ | 1,250 | | | | | $ | 1,250 | | |
Accounts payable
|
| | | | 4 | | | | | | 20 | | |
Accrued liabilities
|
| | | | 426 | | | | | | 500 | | |
Liabilities of discontinued operations
|
| | | | 1,680 | | | | | | 1,770 | | |
Long-term debt, net of current
|
| | | | 728 | | | | | | 722 | | |
Long-term liabilities of discontinued operations
|
| | | | 728 | | | | | | 722 | | |
Liabilities of discontinued operations
|
| | | $ | 2,408 | | | | | $ | 2,492 | | |
|
| | |
For the Three Months Ended
|
| |||||||||
| | |
31-Mar-18
|
| |
31-Mar-17
|
| ||||||
Net sales
|
| | | $ | — | | | | | $ | — | | |
Loss before income taxes
|
| | | $ | (436 ) | | | | | $ | (241 ) | | |
Income tax expense
|
| | | | — | | | | | | — | | |
Loss from discontinued operations
|
| | | $ | (436 ) | | | | | $ | (241 ) | | |
Depreciation
|
| | | $ | — | | | | | $ | — | | |
Amortization
|
| | | $ | — | | | | | $ | — | | |
| Present value of purchase price: | | | | | | | |
|
Cash paid
|
| | | $ | 9,036 | | |
|
Total purchase price
|
| | | $ | 9,036 | | |
| Fair value of assets acquired: | | | | | | | |
|
Working capital
|
| | | $ | 75 | | |
|
Fixed assets
|
| | | | 591 | | |
|
Customer relationships
|
| | | | 4,518 | | |
|
Trade name
|
| | | | 580 | | |
|
Goodwill
|
| | | | 3,272 | | |
|
Total fair value of assets acquired
|
| | | $ | 9,036 | | |
|
| | |
For the Three Months Ended
|
| |||||||||
| | |
31-Mar-18
|
| |
31-Mar-17
|
| ||||||
Net loss
|
| | | $ | (6,003 ) | | | | | $ | (7,002 ) | | |
Interest
|
| | | | 9,077 | | | | | | 8,861 | | |
Taxes
|
| | | | (464 ) | | | | | | 120 | | |
Depreciation and amortization
|
| | | | 3,361 | | | | | | 3,207 | | |
Reported EBITDA
|
| | | $ | 5,971 | | | | | $ | 5,186 | | |
Discontinued Operations
(a)
|
| | | | 409 | | | | | | 233 | | |
Transaction, Management and Board fees
(b)
|
| | | | 831 | | | | | | 811 | | |
Restructuring/Severance Expenses
(c)
|
| | | | — | | | | | | 714 | | |
Foreign Currency and Asset Sale (Gain)/Loss
(d)
|
| | | | (64 ) | | | | | | (133 ) | | |
Other
(e)
|
| | | | 132 | | | | | | 171 | | |
Adjusted EBITDA
|
| | | $ | 7,279 | | | | | $ | 6,982 | | |
Pro Forma Impact of G&A Restructuring and acquisitions
(f)
|
| | | | — | | | | | | 492 | | |
Impact of Extrusion Insourcing and Contracted Resin Savings
(g)
|
| | | | 274 | | | | | | 524 | | |
Pro Forma Adjustments
|
| | | $ | 274 | | | | | $ | 1,016 | | |
Pro Forma Adjusted EBITDA
|
| | | $ | 7,553 | | | | | $ | 7,998 | | |
|
| | |
31-Mar-18
|
| |
31-Mar-17
|
| ||||||
Net cash flows provided by operating activities
|
| | | $ | 4,199 | | | | | $ | 2,544 | | |
Net cash flowzs used in investing activities
|
| | | | (1,339 ) | | | | | | (11,562 ) | | |
Net cash flows (used in) provided by financing activities
|
| | | | (8 ) | | | | | | 8,705 | | |
Effect of exchange rate changes
|
| | | | (102 ) | | | | | | (75 ) | | |
Total increase (decrease) in cash and cash equivalents
|
| | | $ | 2,750 | | | | | $ | (388 ) | | |
|
| | |
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| Exhibits | | | ||
| Exhibit A | | | Form of Certificate of Incorporation | |
| Exhibit B | | | Form of Bylaws | |
| Exhibit C | | | Form of Stockholders Agreement | |
| Exhibit D | | | Form of Registration Rights Agreement | |
| Schedules | | | ||
| Schedule I | | | Surviving Corporation Board | |
| Schedule II | | | Senior Management | |
| Schedule III | | | Percentage Interests of Holders | |
| Schedule IV | | | Recused Directors | |
| | | | PLY GEM PARENT, LLC | |
| | | |
By:
/s/ Gary E. Robinette
Name: Gary E. Robinette
Title: Chief Executive Officer |
|
| | | | Clayton, Dubilier & Rice, LLC solely for the purposes of Sections 6.1(e) , 6.5(a)(i) , 6.5(a)(ii) , 6.5(a)(iv) , 6.5(b) and 6.5(c) . | |
| | | |
By:
/s/ Theresa A. Gore
Name: Theresa A. Gore
Title: Vice President, Treasurer and Assistant Secretary |
|
| | | | NCI BUILDING SYSTEMS, INC. | |
| | | |
By:
/s/ Todd R. Moore
Name: Todd R. Moore
Title: EVP & General Counsel |
|
| | |
Page
|
| |||
ARTICLE I
DEFINITIONS |
| | |||||
| | | | B-1 | | | |
ARTICLE II
REPRESENTATIONS AND WARRANTIES |
| | |||||
| | | | B-9 | | | |
| | | | B-10 | | | |
| | | | B-10 | | | |
ARTICLE III
GOVERNANCE MATTERS; VOTING; STANDSTILL PROVISIONS |
| | |||||
| | | | B-10 | | | |
| | | | B-15 | | | |
| | | | B-15 | | | |
ARTICLE IV
TRANSFER AND HEDGING RESTRICTIONS |
| | |||||
| | | | B-16 | | | |
| | | | B-18 | | | |
ARTICLE V
SUBSCRIPTION RIGHTS |
| | |||||
| | | | B-18 | | | |
| | | | B-18 | | | |
| | | | B-19 | | | |
| | | | B-20 | | | |
| | | | B-21 | | | |
| | | | B-21 | | | |
| | | | B-21 | | | |
| | | | B-21 | | | |
ARTICLE VI
CONSENT RIGHTS |
| | |||||
| | | | B-21 | | | |
ARTICLE VII
EFFECTIVENESS AND TERMINATION |
| | |||||
| | | | B-23 | | | |
ARTICLE VIII
ACCESS, INFORMATION AND CONFIDENTIALITY |
| | |||||
| | | | B-23 | | | |
| | | | B-24 | | |
| | |
Page
|
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ARTICLE IX
MISCELLANEOUS |
| | |||||
| | | | B-24 | | | |
| | | | B-24 | | | |
| | | | B-25 | | | |
| | | | B-25 | | | |
| | | | B-26 | | | |
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| | | | B-27 | | | |
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| | | | B-28 | | | |
| | | | B-28 | | | |
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| | | | B-28 | | | |
| | | | B-28 | | | |
| | | | B-29 | | |
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| | | | F-13 | | | |
| | | | F-13 | | | |
| | | | F-13 | | | |
| | | | F-13 | | | |
| | | | F-13 | | | |
| | | | F-13 | | | |
| | | | F-13 | | | |
| | | | F-14 | | | |
| | | | F-14 | | | |
| | | | F-14 | | | |
| | | | F-14 | | | |
| | | | F-14 | | | |
| | | | F-15 | | | |
| | | | F-15 | | | |
| | | | F-15 | | | |
| | | | F-15 | | | |
| | | | F-15 | | | |
| | | | F-15 | | | |
| | | | F-15 | | | |
| | | | F-15 | | | |
| | | | F-15 | | | |
| | | | F-15 | | | |
| | | | F-15 | | | |
| | | | F-16 | | |