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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Foundation Building Materials Inc | NYSE:FBM | NYSE | Common Stock |
| Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 19.24 | 0 | 00:00:00 |
From Jan 2020 to Jan 2025
2020 Second Quarter Highlights
Foundation Building Materials, Inc. (NYSE: FBM), one of the largest specialty building products distributors of wallboard, suspended ceiling systems, metal framing and complementary and other products in North America, today reported second quarter 2020 financial results and provided a COVID-19 business update.
“Despite the decline in net sales due to the COVID-19 Pandemic, our stable profitability highlighted our second quarter results,” said Ruben Mendoza, President and CEO. “Our long-term strategic focus is unwavering. As we navigate through these challenging market conditions, we remain committed to our strategic priorities that will lead to long-term value creation for our company.”
2020 Second Quarter Results
Net sales for the three months ended June 30, 2020, were $486.1 million compared to $559.9 million for the three months ended June 30, 2019, representing a decrease of $73.8 million, or 13.2%. Net sales from base business decreased $77.4 million compared to the prior period. There was the same number of business days in the current period as compared to the prior period. Net sales from acquired branches and existing branches that were strategically combined increased by $3.6 million. Our base business net sales across all of our major product lines decreased during the three months ended June 30, 2020, compared to the three months ended June 30, 2019, primarily as a result of reduced business activity due to the impacts and disruptions caused by the novel coronavirus COVID-19 (the "COVID-19 Pandemic").
Gross profit for the three months ended June 30, 2020, was $145.7 million compared to $171.5 million for the three months ended June 30, 2019, representing a decrease of $25.9 million, or 15.1%. The decrease in gross profit was primarily due to lower net sales. Gross margin for the three months ended June 30, 2020, was 30.0% compared to 30.6% for the three months ended June 30, 2019. The decrease in gross margin was primarily due to COVID-19 Pandemic related market disruptions.
Selling, general and administrative ("SG&A") expenses for the three months ended June 30, 2020, were $106.3 million compared to $122.7 million for the three months ended June 30, 2019, representing a decrease of $16.5 million, or 13.4%. As a percentage of net sales, SG&A expenses were 21.9% for the three months ended June 30, 2020, compared to 21.9% for the three months ended June 30, 2019. SG&A expenses remained flat as a percentage of net sales primarily due to proactive actions taken to right-size our cost structure in response to a decline in net sales resulting from the COVID-19 Pandemic.
Net income from continuing operations for the three months ended June 30, 2020, was $9.9 million, or $0.23 per share, a decrease of $4.9 million compared to $14.7 million, or $0.34 per share, for the three months ended June 30, 2019. Adjusted net income(1) for the three months ended June 30, 2020, was $11.6 million, or $0.27 per share, a decrease of $4.2 million compared to $15.8 million, or $0.37 per share, for the three months ended June 30, 2019.
Adjusted EBITDA(1) was $42.3 million and adjusted EBITDA margin(1) was 8.7% for the three months ended June 30, 2020, compared to adjusted EBITDA(1) of $50.3 million and adjusted EBITDA margin(1) of 9.0% for the three months ended June 30, 2019.
2020 Year-to-Date Results
Net sales for the six months ended June 30, 2020, were $1,010.3 million compared to $1,074.8 million for the six months ended June 30, 2019, representing a decrease of $64.4 million, or 6.0%. Average daily net sales decreased 6.7% over the prior period. Net sales from base business decreased $78.9 million compared to the prior period, and average daily base business net sales decreased by 8.4% over the prior period. There was one more business day in the current period as compared to the prior period. Net sales from acquired branches and existing branches that were strategically combined increased by $14.5 million. Our base business net sales across all of our major product lines decreased primarily as a result of reduced business activity due to impacts of the COVID-19 Pandemic.
Gross profit for the six months ended June 30, 2020, was $307.8 million compared to $324.5 million for the six months ended June 30, 2019, representing a decrease of $16.7 million, or 5.1%. The decrease in gross profit was primarily due to lower net sales. Gross margin for the six months ended June 30, 2020, was 30.5% compared to 30.2% for the six months ended June 30, 2019. The increase in gross margin was primarily due to improved profitability driven by our ongoing pricing and purchasing initiatives that was partially offset by COVID-19 Pandemic related market disruptions.
SG&A expenses for the six months ended June 30, 2020, were $229.4 million compared to $240.0 million for the six months ended June 30, 2019, representing a decrease of $10.6 million, or 4.4%. As a percentage of net sales, SG&A expenses were 22.7% for the six months ended June 30, 2020, compared to 22.3% for the six months ended June 30, 2019. The increase in SG&A expenses as a percentage of net sales was primarily due to loss of sales leverage resulting from the COVID-19 Pandemic and our continued investment in various company-wide initiatives, partially offset by actions taken to right-size our cost structure in the second quarter in response to a decline in net sales.
Net income from continuing operations for the six months ended June 30, 2020, was $24.2 million, or $0.56 per share, an increase of $4.7 million compared to $19.5 million, or $0.45 per share, for the six months ended June 30, 2019. Adjusted net income(1) for the six months ended June 30, 2020, was $21.3 million, or $0.49 per share, a decrease of $0.5 million compared to $21.9 million, or $0.51 per share, for the six months ended June 30, 2019.
Adjusted EBITDA(1) was $82.5 million and adjusted EBITDA margin(1) was 8.2% for the six months ended June 30, 2020, compared to adjusted EBITDA(1) of $87.8 million and adjusted EBITDA margin(1) of 8.2% for the six months ended June 30, 2019.
COVID-19 Pandemic Business Update
Through July 2020, the COVID-19 Pandemic has had a negative impact on most of the markets in which the Company operates. In a select number of states, including Washington, California, Michigan, New Jersey, and the Commonwealth of Pennsylvania, the Company continued to have jobsite restrictions, which reduced branch operations. As a result, July 2020 net sales were down approximately 7% year over year. The Company continues to monitor the current environment and anticipates its future financial performance will be adversely impacted due to the effects of the COVID-19 Pandemic.
Second Quarter Earnings Release and Conference Call
In conjunction with this release, Foundation Building Materials, Inc. will host a conference call tomorrow, Tuesday, August 4, 2020, at 8:30 AM Eastern Time. Ruben Mendoza, President and Chief Executive Officer, John Gorey, Chief Financial Officer, Pete Welly, Chief Operating Officer, Kirby Thompson, Senior Vice President of Sales and Marketing and John Moten, Vice President Investor Relations will host the call.
The call can be accessed in three ways:
About Foundation Building Materials
Foundation Building Materials, Inc. is a specialty building products distributor of wallboard, suspended ceiling systems, metal framing, and complementary and other products throughout North America. Based in Santa Ana, California, the Company employs more than 3,400 employees and operates more than 170 branches across the United States and Canada. Learn more at www.fbmsales.com or follow us on LinkedIn, Twitter, Instagram, or Facebook.
Forward-Looking Statements
This press release contains “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and may contain words such as “believe,” “anticipate,” “expect,” “estimate,” “intend,” “project,” “plan,” or words or phrases with similar meaning. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements contained in this press release relate to, among other things, the impact of the COVID-19 Pandemic on the Company’s business and financial performance, the effect of certain strategic actions and cost-saving initiatives taken by the Company, and the Company's ability to create long-term value. The impacts and disruptions caused by the COVID-19 Pandemic are highly uncertain, cannot be accurately predicted, and will depend upon future developments outside the control of the Company, including the scope and duration of the outbreak, as well as the scope and impact of any government orders and restrictions designed to limit the further spread of COVID-19. Forward-looking statements are based on current expectations, forecasts and assumptions that involve risks and uncertainties, including, but not limited to, economic, competitive, governmental, public health and technological factors outside of our control, that may cause our business, strategy or actual results to differ materially from the forward-looking statements. We do not intend and undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable law. Investors are referred to our filings with the Securities and Exchange Commission, including our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, for additional information regarding the risks and uncertainties that may cause actual results to differ materially from those expressed in any forward-looking statement.
(1) Adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted EPS and net debt leverage ratio are non-GAAP financial measures. See the supplementary schedules at the end of this press release, as well as the information provided under the heading "Non-GAAP Financial Measures" for a discussion of how we define and calculate these measures, why we believe they are important and a reconciliation thereof to the most directly comparable GAAP measures. For a calculation of our net debt leverage ratio as of June 30, 2020, see Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations in our Quarterly Report on Form 10-Q for the three months ended June 30, 2020.
- Financial Tables Follow -
FOUNDATION BUILDING MATERIALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except share and per share data)
Three Months Ended June 30,
Six Months Ended June 30,
2020
2019
2020
2019
Net sales
$
486,090
$
559,911
$
1,010,348
$
1,074,783
Cost of goods sold
340,435
388,374
702,535
750,286
Gross profit
145,655
171,537
307,813
324,497
Operating expenses:
Selling, general and administrative expenses
106,257
122,735
229,354
239,965
Depreciation and amortization
19,288
20,351
38,507
40,693
Total operating expenses
125,545
143,086
267,861
280,658
Income from operations
20,110
28,451
39,952
43,839
Interest expense
(7,153
)
(8,341
)
(14,886
)
(16,897
)
Gain on legal settlement
—
—
8,556
—
Other income (expense), net
547
44
(475
)
85
Income before income taxes
13,504
20,154
33,147
27,027
Income tax expense
3,647
5,433
8,914
7,478
Income from continuing operations
9,857
14,721
24,233
19,549
Loss on sale from discontinued operations, net of tax
—
(44
)
—
(1,390
)
Net income
$
9,857
$
14,677
$
24,233
$
18,159
Earnings per share data:
Earnings from continuing operations per share - basic
0.23
0.34
0.56
0.45
Earnings from continuing operations per share - diluted
0.23
0.34
0.56
0.45
Loss from discontinued operations per share - basic
—
—
—
(0.03
)
Loss from discontinued operations per share - diluted
—
—
—
(0.03
)
Earnings per share - basic
0.23
0.34
0.56
0.42
Earnings per share - diluted
0.23
0.34
0.56
0.42
Weighted average shares outstanding:
Basic
43,203,894
42,987,915
43,124,793
42,960,124
Diluted
43,332,225
43,245,353
43,440,723
43,064,496
FOUNDATION BUILDING MATERIALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands, except share data)
June 30, 2020
December 31, 2019
Current assets:
Cash and cash equivalents
$
31,122
$
17,766
Accounts receivable—net of allowance for expected credit losses of $2,896 and $3,169, respectively
263,340
262,757
Other receivables
35,003
59,104
Inventories
159,615
178,624
Prepaid expenses and other current assets
9,386
7,965
Total current assets
498,466
526,216
Property and equipment, net
149,195
150,188
Right-of-use assets, net
126,290
120,562
Intangible assets, net
89,776
113,861
Goodwill
494,159
495,724
Other assets
6,607
5,206
Total assets
$
1,364,493
$
1,411,757
Liabilities and stockholders' equity:
Current liabilities:
Accounts payable
$
145,267
$
145,226
Accrued payroll and employee benefits
25,458
31,410
Accrued taxes
9,594
8,780
Current portion of tax receivable agreement
8,537
27,850
Current portion of term loan
4,500
4,500
Current portion of lease liabilities
31,508
30,307
Other current liabilities
19,336
18,557
Total current liabilities
244,200
266,630
Asset-based revolving credit facility
40,000
89,000
Long-term portion of term loan, net
432,950
434,633
Tax receivable agreement
80,996
89,533
Deferred income taxes, net
21,670
18,972
Long-term portion of lease liabilities
100,867
97,145
Other liabilities
14,388
7,679
Total liabilities
935,071
1,003,592
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.001 par value, authorized 10,000,000 shares; 0 shares issued
—
—
Common stock, $0.001 par value, authorized 190,000,000 shares; 43,205,678 and 42,991,016 shares issued, respectively
13
13
Additional paid-in capital
338,820
336,362
Retained earnings
98,487
74,254
Accumulated other comprehensive loss
(7,898
)
(2,464
)
Total stockholders' equity
429,422
408,165
Total liabilities and stockholders' equity
$
1,364,493
$
1,411,757
FOUNDATION BUILDING MATERIALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands)
Six Months Ended June 30,
2020
2019
Cash flows from operating activities:
Net income
$
24,233
$
18,159
Less: loss on sale of discontinued operations
—
(1,390
)
Net income from continuing operations
24,233
19,549
Adjustments to reconcile net income to net cash provided by operating activities from continuing operations:
Depreciation
14,598
17,558
Amortization of intangible assets
23,909
23,135
Amortization of debt issuance costs and debt discount
1,080
992
Inventory fair value purchase accounting adjustment
—
234
Provision for expected credit losses
1,366
1,525
Stock-based compensation
2,828
1,939
Loss (gain) on disposal or sale of assets
708
(67
)
Right-of-use assets non-cash expense
15,057
13,601
Deferred income taxes
3,334
271
Change in assets and liabilities, net of effects of acquisitions:
Accounts receivable
208
(43,441
)
Other receivables
23,435
13,581
Inventories
20,053
(1,291
)
Prepaid expenses and other current assets
(1,472
)
(3,123
)
Other assets
(6
)
(121
)
Accounts payable
1,333
23,429
Accrued payroll and employee benefits
(5,802
)
(3,057
)
Accrued taxes
827
(2,291
)
Operating lease liabilities
(14,752
)
(13,345
)
Other liabilities
4,365
4,126
Net cash provided by operating activities from continuing operations
115,302
53,204
Cash flows from investing activities from continuing operations:
Purchases of property and equipment
(13,263
)
(15,052
)
Proceeds from termination of net investment hedge
—
3,313
Net (payments of) proceeds from net working capital adjustments related to acquisitions
(34
)
470
Proceeds from disposal or sale of assets
980
2,376
Acquisitions, net of cash acquired
(8,638
)
(21,923
)
Net cash used in investing activities from continuing operations
(20,955
)
(30,816
)
Cash flows from financing activities from continuing operations:
Proceeds from asset-based revolving credit facility
322,500
281,620
Repayments of asset-based revolving credit facility
(371,500
)
(291,371
)
Principal payments for term loan
(2,250
)
(2,250
)
Payment related to tax receivable agreement
(27,850
)
(16,667
)
Tax withholding payment related to net settlement of equity awards
(370
)
(138
)
Principal repayment of finance lease liabilities
(1,355
)
(1,319
)
Net cash used in financing activities from continuing operations
(80,825
)
(30,125
)
Net cash used in investing activities from discontinued operations
—
(1,390
)
Net cash used in discontinued operations
—
(1,390
)
Effect of exchange rate changes on cash
(166
)
282
Net increase (decrease) in cash
13,356
(8,845
)
Cash and cash equivalents at beginning of period
17,766
15,299
Cash and cash equivalents at end of period
$
31,122
$
6,454
Supplemental disclosures of cash flow information:
Cash paid for income taxes
$
190
$
5,091
Cash paid for interest
$
14,186
$
16,477
Supplemental disclosures of non-cash investing and financing activities:
Decrease in fair value of derivatives, net of tax
$
1,525
$
6,012
Net goodwill increase for purchase price allocation
$
47
$
57
FOUNDATION BUILDING MATERIALS, INC.
NET SALES BY MAJOR PRODUCT LINE, GROSS PROFIT AND GROSS MARGIN
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2020 AND 2019 (UNAUDITED)
(dollars in thousands)
Three Months Ended June 30,
Change
2020
2019
$
%
Wallboard
$
188,588
38.8
%
$
214,059
38.2
%
$
(25,471
)
(11.9
)%
Suspended ceiling systems
91,508
18.8
%
106,176
19.0
%
(14,668
)
(13.8
)%
Metal framing
82,188
16.9
%
102,425
18.3
%
(20,237
)
(19.8
)%
Complementary and other products
123,806
25.5
%
137,251
24.5
%
(13,445
)
(9.8
)%
Total net sales
$
486,090
100.0
%
$
559,911
100.0
%
$
(73,821
)
(13.2
)%
Total gross profit
$
145,655
$
171,537
$
(25,882
)
(15.1
)%
Total gross margin
30.0
%
30.6
%
(0.6
)%
Six Months Ended June 30,
Change
2020
2019
$
%
Wallboard
$
390,856
38.7
%
$
416,973
38.8
%
$
(26,117
)
(6.3
)%
Suspended ceiling systems
190,014
18.8
%
195,172
18.2
%
(5,158
)
(2.6
)%
Metal framing
175,522
17.4
%
201,676
18.8
%
(26,154
)
(13.0
)%
Complementary and other products
253,956
25.1
%
260,962
24.2
%
(7,006
)
(2.7
)%
Total net sales
$
1,010,348
100.0
%
$
1,074,783
100.0
%
$
(64,435
)
(6.0
)%
Total gross profit
$
307,813
$
324,497
$
(16,684
)
(5.1
)%
Total gross margin
30.5
%
30.2
%
0.3
%
FOUNDATION BUILDING MATERIALS, INC.
BASE BUSINESS AND ACQUIRED AND COMBINED NET SALES
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2020 AND 2019 (UNAUDITED)
(dollars in thousands)
Three Months Ended June 30,
Change
2020
2019
$
%
Base business (1)
$
457,811
$
535,185
$
(77,374
)
(14.5
)%
Acquired and combined (2)
28,279
24,726
3,553
14.4
%
Net sales
$
486,090
$
559,911
$
(73,821
)
(13.2
)%
(1) Represents net sales from branches that were owned by us since January 1, 2019, and branches that were opened by us during such period. (2) Represents branches acquired and combined after January 1, 2019, primarily as a result of our strategic combination of branches.
Six Months Ended June 30,
Change
2020
2019
$
%
Base business (1)
$
951,189
$
1,030,103
$
(78,914
)
(7.7
)%
Acquired and combined (2)
59,159
44,680
14,479
32.4
%
Net sales
$
1,010,348
$
1,074,783
$
(64,435
)
(6.0
)%
(1) Represents net sales from branches that were owned by us since January 1, 2019, and branches that were opened by us during such period. (2) Represents branches acquired and combined after January 1, 2019, primarily as a result of our strategic combination of branches.
FOUNDATION BUILDING MATERIALS, INC.
BASE BUSINESS AND ACQUIRED AND COMBINED NET SALES BY MAJOR PRODUCT LINE
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2020 AND 2019 (UNAUDITED)
(dollars in thousands)
Three Months Ended June 30, 2019
Base Business Net Sales Change
Acquired and Combined Net Sales Change
Three Months Ended June 30, 2020
Total Net Sales % Change
Base Business Net Sales % Change(1)
Acquired and Combined Net Sales % Change(2)
Wallboard
$
214,059
$
(27,410
)
$
1,939
$
188,588
(11.9
)%
(13.3
)%
23.4
%
Suspended ceiling systems
106,176
(15,112
)
444
91,508
(13.8
)%
(15.0
)%
8.2
%
Metal framing
102,425
(20,272
)
35
82,188
(19.8
)%
(20.6
)%
0.9
%
Complementary and other products
137,251
(14,580
)
1,135
123,806
(9.8
)%
(11.2
)%
16.1
%
Net sales
$
559,911
$
(77,374
)
$
3,553
$
486,090
(13.2
)%
(14.5
)%
14.4
%
Average daily net sales(3)
$
8,749
$
(1,209
)
$
55
$
7,595
(13.2
)%
(14.5
)%
14.4
%
(1) Represents base business net sales change as a percentage of base business net sales for the three months ended June 30, 2019. (2) Represents acquired and combined net sales change as a percentage of acquired and combined net sales for the three months ended June 30, 2019. (3) The number of business days for the three months ended June 30, 2020 and 2019 was 64 for both periods.
Six Months Ended June 30, 2019
Base Business Net Sales Change
Acquired and Combined Net Sales Change
Six Months Ended June 30, 2020
Total Net Sales % Change
Base Business Net Sales % Change(1)
Acquired and Combined Net Sales % Change(2)
Wallboard
$
416,973
$
(30,383
)
$
4,266
$
390,856
(6.3
)%
(7.6
)%
26.7
%
Suspended ceiling systems
195,172
(10,995
)
5,837
190,014
(2.6
)%
(5.9
)%
73.1
%
Metal framing
201,676
(26,888
)
734
175,522
(13.0
)%
(13.9
)%
9.4
%
Complementary and other products
260,962
(10,648
)
3,642
253,956
(2.7
)%
(4.3
)%
28.2
%
Net sales
$
1,074,783
$
(78,914
)
$
14,479
$
1,010,348
(6.0
)%
(7.7
)%
32.4
%
Average daily net sales(3)
$
8,463
$
(680
)
$
110
$
7,893
(6.7
)%
(8.4
)%
31.4
%
(1) Represents base business net sales change as a percentage of base business net sales for the six months ended June 30, 2019. (2) Represents acquired and combined net sales change as a percentage of acquired and combined net sales for the six months ended June 30, 2019. (3) The numbers of business days for the six months ended June 30, 2020 and 2019 were 128 and 127, respectively.
Non-GAAP Financial Measures
In addition to presenting financial results prepared in accordance with Generally Accepted Accounting Principles ("GAAP"), this press release contains certain non-GAAP financial measures, including adjusted EBITDA, adjusted EBITDA margin, adjusted net income, net debt leverage ratio and adjusted earnings per share, which are provided as supplemental measures of financial performance. These measures are not required by, or presented in accordance with, GAAP. The Company calculates adjusted EBITDA as net income from continuing operations before interest expense, net, income tax expense, depreciation and amortization, stock-based compensation, and other non-recurring adjustments such as loss (gain) on disposal or sale of assets, gain on legal settlement and transaction costs. The Company calculates adjusted EBITDA margin as adjusted EBITDA divided by net sales. The Company calculates adjusted net income as net income from continuing operations before stock-based compensation, and other non-recurring adjustments such as loss (gain) on disposal or sale of assets, gain on legal settlement and transaction costs. The Company calculates adjusted earnings per share as adjusted net income on a per weighted average share outstanding basis. For a calculation of net debt leverage ratio, see Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations in our Quarterly Report on Form 10-Q for the three months ended June 30, 2020.
These non-GAAP financial measures are presented because they are important metrics used by management as a means by which it assesses financial performance. We believe these measures are also frequently used by analysts, investors and other interested parties to evaluate companies in the Company’s industry. These measures, when used in conjunction with the most directly comparable GAAP financial measures, provide investors with an additional financial analytical framework that may be useful in assessing the Company’s financial condition and results of operations.
These non-GAAP financial measures have certain limitations, which are discussed in greater detail in the Company's filings with the Securities and Exchange Commission. These measures should not be considered as alternatives to measures of financial performance prepared in accordance with GAAP. In addition, these measures should not be construed as an inference that the Company’s future results will be unaffected by unusual or non-recurring items. Furthermore, these measures are not intended to be considered liquidity measures. Other companies, including other companies in the Company’s industry, may not use these measures or may calculate one or more of these measures differently than the Company does, limiting their usefulness as comparative measures.
The following is a reconciliation of adjusted EBITDA to the most directly comparable GAAP measure, net income from continuing operations (unaudited):
Three Months Ended June 30,
Six Months Ended June 30,
2020
2019
2020
2019
(dollars in thousands)
Net income from continuing operations
9,857
$
14,721
24,233
19,549
Interest expense, net
7,127
8,402
14,818
16,987
Income tax expense
3,647
5,433
8,914
7,478
Depreciation and amortization
19,288
20,351
38,507
40,693
Stock-based compensation
1,435
1,110
2,828
1,939
Loss (gain) on disposal or sale of assets
657
(258
)
708
(67
)
Gain on legal settlement
—
—
(8,556
)
—
Transaction costs(a)
245
582
1,084
1,227
Adjusted EBITDA
$
42,256
50,341
82,536
87,806
Adjusted EBITDA margin(b)
8.7
%
9.0
%
8.2
%
8.2
%
(a)
Represents costs related to our transactions, including fees to financial advisors, accountants, attorneys, and other professionals, as well as certain internal corporate development costs. The costs also include non-cash purchase accounting effects to adjust for the effect of the purchase accounting step-up in the value of inventory to fair value recognized as a result of acquisitions.
(b)
Adjusted EBITDA margin represents adjusted EBITDA divided by net sales.
The following is a reconciliation of adjusted net income to the most directly comparable GAAP measure, net income from continuing operations (unaudited):
Three Months Ended June 30,
Six Months Ended June 30,
2020
2019
2020
2019
(in thousands, except share and per share data)
Net income from continuing operations
$
9,857
$
14,721
$
24,233
$
19,549
Stock-based compensation
1,435
1,110
2,828
1,939
Loss (gain) on disposal or sale of assets
657
(258
)
708
(67
)
Gain on legal settlement
—
—
(8,556
)
—
Transaction costs(a)
245
582
1,084
1,227
Tax effects(b)
(602
)
(366
)
1,014
(792
)
Adjusted net income
$
11,592
$
15,789
$
21,311
$
21,856
Earnings per share data as reported:
Basic
$
0.23
$
0.34
$
0.56
$
0.45
Diluted
$
0.23
$
0.34
$
0.56
$
0.45
Earnings per share data as adjusted:
Basic
$
0.27
$
0.37
$
0.49
$
0.51
Diluted
$
0.27
$
0.37
$
0.49
$
0.51
Weighted average shares outstanding:
Basic
43,203,894
42,987,915
43,124,793
42,960,124
Diluted
43,332,225
43,245,353
43,440,723
43,064,496
(a)
Represents costs related to our transactions, including fees to financial advisors, accountants, attorneys, and other professionals, as well as certain internal corporate development costs. The costs also include non-cash purchase accounting effects to adjust for the effect of the purchase accounting step-up in the value of inventory to fair value recognized as a result of acquisitions.
(b)
Represents the impact of corporate income taxes.
View source version on businesswire.com: https://www.businesswire.com/news/home/20200803005772/en/
Investor Relations: John Moten, IRC Foundation Building Materials, Inc. 657-900-3200 Investors@fbmsales.com
Media Relations: Joele Frank, Wilkinson Brimmer Katcher Jed Repko or Ed Trissel 212-355-4449
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