We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register for real-time alerts, custom portfolio, and market movers
| 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 Mar 2020 to Mar 2025
2020 Third 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 third quarter 2020 financial results, provided a COVID-19 (the "COVID-19 Pandemic") business update and issued full year 2020 guidance.
"Despite the challenging market conditions in the third quarter, we have maintained profitability by optimizing our cost structure. We continue to generate strong cash flows to invest in our business while reducing our debt levels to historic lows," said Ruben Mendoza, President and CEO. "We will continue to navigate this challenging environment by focusing on driving organic growth and maximizing profitability to create long-term value for our Company."
2020 Third Quarter Results
Net sales for the three months ended September 30, 2020, were $521.3 million, compared to $564.9 million for the three months ended September 30, 2019, representing a decrease of $43.6 million, or 7.7%. Average daily net sales decreased 9.2% over the prior period. Net sales from base business decreased $51.8 million compared to the prior period, and average daily base business net sales decreased by 11.0% over the prior period. There was one additional 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 $8.1 million, compared to $17.4 million during the three months ended September 30, 2019. Our base business net sales across all of our major product lines decreased during the three months ended September 30, 2020, compared to the three months ended September 30, 2019, primarily as a result of reduced business activity due to the COVID-19 Pandemic.
The COVID-19 Pandemic had a greater impact on commercial construction activity compared to the residential market, and as a result, net sales from our suspended ceiling systems and metal framing product lines have decreased more than our net sales from other product lines. Additionally, our base business in the prior year benefited from a strong commercial construction end-market and product expansion into new geographic areas, with less comparable activity in the current year.
Gross profit for the three months ended September 30, 2020, was $154.4 million, compared to $171.8 million for the three months ended September 30, 2019, representing a decrease of $17.4 million, or 10.1%. The decrease in gross profit was primarily due to lower net sales. Gross margin for the three months ended September 30, 2020, was 29.6%, compared to 30.4% for the three months ended September 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 September 30, 2020, were $115.1 million, compared to $123.9 million for the three months ended September 30, 2019, representing a decrease of $8.8 million, or 7.1%. As a percentage of net sales, SG&A expenses were 22.1% for the three months ended September 30, 2020, compared to 21.9% for the three months ended September 30, 2019. SG&A expenses remained relatively 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 September 30, 2020, was $11.8 million, or $0.27 per share, a decrease of $0.9 million compared to $12.7 million, or $0.30 per share, for the three months ended September 30, 2019. Adjusted net income(1) for the three months ended September 30, 2020, was $13.3 million, or $0.31 per share, a decrease of $1.2 million compared to $14.4 million, or $0.33 per share, for the three months ended September 30, 2019.
Adjusted EBITDA(1) was $41.7 million and adjusted EBITDA margin(1) was 8.0% for the three months ended September 30, 2020, compared to adjusted EBITDA(1) of $50.0 million and adjusted EBITDA margin(1) of 8.9% for the three months ended September 30, 2019.
2020 Year-to-Date Results
Net sales for the nine months ended September 30, 2020, were $1,531.6 million, compared to $1,639.7 million for the nine months ended September 30, 2019, representing a decrease of $108.1 million, or 6.6%. Average daily net sales decreased 7.6% over the prior period. Net sales from base business decreased $130.7 million compared to the prior period, and average daily base business net sales decreased by 9.3% over the prior period. There were two more 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 $22.6 million, compared to $60.4 million during the nine months ended September 30, 2019. Our base business net sales across all of our major product lines decreased during the nine months ended September 30, 2020, compared to the nine months ended September 30, 2019, primarily as a result of reduced business activity due to impacts of the COVID-19 Pandemic.
Gross profit for the nine months ended September 30, 2020, was $462.2 million, compared to $496.3 million for the nine months ended September 30, 2019, representing a decrease of $34.1 million, or 6.9%. The decrease in gross profit was primarily due to lower net sales. Gross margin for the nine months ended September 30, 2020, was 30.2% compared to 30.3% for the nine months ended September 30, 2019. The slight decrease in gross margin was primarily due to COVID-19 Pandemic-related market disruptions.
SG&A expenses for the nine months ended September 30, 2020, were $344.5 million, compared to $363.9 million for the nine months ended September 30, 2019, representing a decrease of $19.4 million, or 5.3%. As a percentage of net sales, SG&A expenses were 22.5% for the nine months ended September 30, 2020, compared to 22.2% for the nine months ended September 30, 2019. The increase in SG&A expenses as a percentage of net sales was primarily due to the 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 response to the decline in net sales.
Net income from continuing operations for the nine months ended September 30, 2020, was $36.0 million, or $0.83 per share, an increase of $3.8 million compared to $32.3 million, or $0.75 per share, for the nine months ended September 30, 2019. Adjusted net income(1) for the nine months ended September 30, 2020, was $34.6 million, or $0.81 per share, a decrease of $1.7 million compared to $36.3 million, or $0.84 per share, for the nine months ended September 30, 2019.
Adjusted EBITDA(1) was $124.3 million and adjusted EBITDA margin(1) was 8.1% for the nine months ended September 30, 2020, compared to adjusted EBITDA(1) of $137.8 million and adjusted EBITDA margin(1) of 8.4% for the nine months ended September 30, 2019.
2020 Full Year Guidance(a)
Net Sales (in billions)
$2.01 to $2.03
Adjusted EBITDA(b)(in millions)
$150.0 to $165.0
Adjusted EPS(b)
$0.90 to $1.00
Net debt leverage ratio(b)
2.60x to 2.75x
(a)Guidance for 2020 includes anticipated contributions from greenfield branches and excludes acquisitions.
(b)Adjusted EBITDA, adjusted EPS and net debt leverage ratio are non-GAAP financial measures.
Due to the COVID-19 Pandemic's impact and the resulting economic uncertainty, on April 8, 2020, we withdrew our 2020 full-year guidance. Although the effects of the COVID-19 Pandemic have adversely impacted our financial results in 2020, we believe we have greater visibility into our business prospects than earlier in the year. As a result, we are providing select full-year 2020 financial guidance. We expect our profitability to remain at current levels through the balance of the year. Please be aware that our decision to provide guidance at this time does not confirm our intention or obligation to provide guidance for any future period. This decision will be based upon information available to management at the time.
COVID-19 Pandemic Business Update
Through October 2020, the COVID-19 Pandemic has had a negative impact on most of the markets in which the Company operates. As a result, October 2020 average daily net sales were down approximately 6% 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.
Third Quarter Earnings Release and Conference Call
In conjunction with this release, Foundation Building Materials, Inc. will host a conference call tomorrow, Tuesday, November 3, 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 Company's anticipated financial performance, operating results and net debt leverage ratio for the fiscal year ending December 31, 2020, 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 pandemic, 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 September 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 September 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 September 30,
Nine Months Ended September 30,
2020
2019
2020
2019
Net sales
$
521,261
$
564,906
$
1,531,609
$
1,639,689
Cost of goods sold
366,846
393,111
1,069,381
1,143,397
Gross profit
154,415
171,795
462,228
496,292
Operating expenses:
Selling, general and administrative expenses
115,125
123,907
344,479
363,872
Depreciation and amortization
19,413
20,218
57,920
60,911
Total operating expenses
134,538
144,125
402,399
424,783
Income from operations
19,877
27,670
59,829
71,509
Interest expense
(6,463)
(9,118)
(21,349)
(26,015)
Gain on legal settlement
—
—
8,556
—
Other income (expense), net
436
(89)
(39)
(4)
Income before income taxes
13,850
18,463
46,997
45,490
Income tax expense
2,049
5,754
10,963
13,232
Income from continuing operations
11,801
12,709
36,034
32,258
Loss on sale of discontinued operations, net of tax
—
(11)
—
(1,401)
Net income
$
11,801
$
12,698
$
36,034
$
30,857
Earnings per share data:
Earnings from continuing operations per share - basic
0.27
0.30
0.83
0.75
Earnings from continuing operations per share - diluted
0.27
0.30
0.83
0.75
Loss from discontinued operations per share - basic
—
—
—
(0.03)
Loss from discontinued operations per share - diluted
—
—
—
(0.03)
Earnings per share - basic
0.27
0.30
0.83
0.72
Earnings per share - diluted
0.27
0.30
0.83
0.72
Weighted average shares outstanding:
Basic
43,206,505
42,988,829
43,152,229
42,969,797
Diluted
43,565,493
43,508,678
43,478,442
43,174,351
FOUNDATION BUILDING MATERIALS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in thousands, except share data)
September 30, 2020
December 31, 2019
Current assets:
Cash and cash equivalents
$
18,675
$
17,766
Accounts receivable—net of allowance for expected credit losses of $2,864 and $3,169, respectively
265,352
262,757
Other receivables
38,928
59,104
Inventories
153,650
178,624
Prepaid expenses and other current assets
11,297
7,965
Total current assets
487,902
526,216
Property and equipment, net
150,801
150,188
Right-of-use assets, net
123,821
120,562
Intangible assets, net
80,101
113,861
Goodwill
494,825
495,724
Other assets
4,663
5,206
Total assets
$
1,342,113
$
1,411,757
Liabilities and stockholders' equity:
Current liabilities:
Accounts payable
$
142,972
$
145,226
Accrued payroll and employee benefits
28,099
31,410
Accrued taxes
10,269
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
32,162
30,307
Other current liabilities
13,694
18,557
Total current liabilities
240,233
266,630
Asset-based revolving credit facility
9,500
89,000
Long-term portion of term loan, net
432,108
434,633
Tax receivable agreement
80,996
89,533
Deferred income taxes, net
22,114
18,972
Long-term portion of lease liabilities
97,290
97,145
Other liabilities
15,446
7,679
Total liabilities
897,687
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; 43,207,120 and 42,991,016 shares issued, respectively
13
13
Additional paid-in capital
340,299
336,362
Retained earnings
110,288
74,254
Accumulated other comprehensive loss
(6,174)
(2,464)
Total stockholders' equity
444,426
408,165
Total liabilities and stockholders' equity
$
1,342,113
$
1,411,757
FOUNDATION BUILDING MATERIALS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands)
Nine Months Ended September 30,
2020
2019
Cash flows from operating activities:
Net income
$
36,034
$
30,857
Less: loss on sale of discontinued operations
—
(1,401)
Net income from continuing operations
36,034
32,258
Adjustments to reconcile net income to net cash provided by operating activities from continuing operations:
Depreciation
22,044
26,173
Amortization of intangible assets
35,876
34,738
Amortization of debt issuance costs and debt discount
1,620
1,617
Inventory fair value purchase accounting adjustment
—
234
Provision for expected credit losses
2,102
2,017
Stock-based compensation
4,319
3,056
Loss (gain) on disposal or sale of assets
807
(54)
Right-of-use assets non-cash expense
22,716
20,586
Deferred income taxes
3,737
63
Change in assets and liabilities, net of effects of acquisitions:
Accounts receivable
(715)
(32,949)
Other receivables
19,744
10,520
Inventories
26,828
5,623
Prepaid expenses and other current assets
(3,361)
(4,198)
Other assets
8
(187)
Accounts payable
(1,720)
2,417
Accrued payroll and employee benefits
(3,219)
214
Accrued taxes
1,495
(860)
Operating lease liabilities
(22,336)
(20,034)
Other liabilities
1,205
6,019
Net cash provided by operating activities from continuing operations
147,184
87,253
Cash flows from investing activities from continuing operations:
Purchases of property and equipment
(22,015)
(29,369)
Proceeds from termination of net investment hedge
—
3,313
Net (payments of) proceeds from net working capital adjustments related to acquisitions
(44)
461
Proceeds from disposal or sale of assets
1,194
2,719
Acquisitions, net of cash acquired
(12,163)
(21,882)
Net cash used in investing activities from continuing operations
(33,028)
(44,758)
Cash flows from financing activities from continuing operations:
Proceeds from asset-based revolving credit facility
403,000
403,454
Repayments of asset-based revolving credit facility
(482,500)
(415,178)
Principal payments for term loan
(3,375)
(3,375)
Payment related to tax receivable agreement
(27,850)
(16,667)
Tax withholding payment related to net settlement of equity awards
(382)
(155)
Principal repayment of finance lease liabilities
(2,066)
(2,002)
Net cash used in financing activities from continuing operations
(113,173)
(33,923)
Net cash used in investing activities from discontinued operations
—
(1,401)
Net cash used in discontinued operations
—
(1,401)
Effect of exchange rate changes on cash
(74)
198
Net increase in cash
909
7,369
Cash and cash equivalents at beginning of period
17,766
15,299
Cash and cash equivalents at end of period
$
18,675
$
22,668
Supplemental disclosures of cash flow information:
Cash paid for income taxes
$
8,109
$
10,401
Cash paid for interest
$
19,736
$
24,150
Supplemental disclosures of non-cash investing and financing activities:
Decrease in fair value of derivatives, net of tax
$
1,532
$
5,663
Net goodwill increase for purchase price allocation
$
33
$
57
FOUNDATION BUILDING MATERIALS, INC. NET SALES BY MAJOR PRODUCT LINE, GROSS PROFIT AND GROSS MARGIN FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019 (UNAUDITED) (dollars in thousands)
Three Months Ended September 30,
Change
2020
2019
$
%
Wallboard
$
199,448
38.3
%
$
207,326
36.7
%
$
(7,878)
(3.8)
%
Suspended ceiling systems
97,323
18.7
%
118,873
21.0
%
(21,550)
(18.1)
%
Metal framing
90,333
17.3
%
98,817
17.5
%
(8,484)
(8.6)
%
Complementary and other products
134,157
25.7
%
139,890
24.8
%
(5,733)
(4.1)
%
Total net sales
$
521,261
100.0
%
$
564,906
100.0
%
$
(43,645)
(7.7)
%
Total gross profit
$
154,415
$
171,795
$
(17,380)
(10.1)
%
Total gross margin
29.6
%
30.4
%
(0.8)
%
Nine Months Ended September 30,
Change
2020
2019
$
%
Wallboard
$
590,304
38.5
%
$
624,299
38.1
%
$
(33,995)
(5.4)
%
Suspended ceiling systems
287,337
18.8
%
314,045
19.2
%
(26,708)
(8.5)
%
Metal framing
265,855
17.4
%
300,493
18.3
%
(34,638)
(11.5)
%
Complementary and other products
388,113
25.3
%
400,852
24.4
%
(12,739)
(3.2)
%
Total net sales
$
1,531,609
100.0
%
$
1,639,689
100.0
%
$
(108,080)
(6.6)
%
Total gross profit
$
462,228
$
496,292
$
(34,064)
(6.9)
%
Total gross margin
30.2
%
30.3
%
(0.1)
%
FOUNDATION BUILDING MATERIALS, INC. BASE BUSINESS AND ACQUIRED AND COMBINED NET SALES FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019 (UNAUDITED) (dollars in thousands)
Three Months Ended September 30,
Change
2020
2019
$
%
Base business (1)
$
487,167
$
538,936
$
(51,769)
(9.6)
%
Acquired and combined (2)
34,094
25,970
8,124
31.3
%
Net sales
$
521,261
$
564,906
$
(43,645)
(7.7)
%
(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.
Nine Months Ended September 30,
Change
2020
2019
$
%
Base business (1)
$
1,438,355
$
1,569,039
$
(130,684)
(8.3)
%
Acquired and combined (2)
93,254
70,650
22,604
32.0
%
Net sales
$
1,531,609
$
1,639,689
$
(108,080)
(6.6)
%
(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 NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019 (UNAUDITED) (dollars in thousands)
Three Months Ended September 30, 2019
Base Business Net Sales Change
Acquired and Combined Net Sales Change
Three Months Ended September 30, 2020
Total Net Sales % Change
Base Business Net Sales % Change(1)
Acquired and Combined Net Sales % Change(2)
Wallboard
$
207,326
$
(12,156)
$
4,278
$
199,448
(3.8)
%
(6.1)
%
55.7
%
Suspended ceiling systems
118,873
(22,239)
689
97,323
(18.1)
%
(19.9)
%
9.9
%
Metal framing
98,817
(8,709)
225
90,333
(8.6)
%
(9.2)
%
5.2
%
Complementary and other products
139,890
(8,665)
2,932
134,157
(4.1)
%
(6.5)
%
41.8
%
Net sales
$
564,906
$
(51,769)
$
8,124
$
521,261
(7.7)
%
(9.6)
%
31.3
%
Average daily net sales(3)
$
8,967
$
(943)
$
121
$
8,145
(9.2)
%
(11.0)
%
29.2
%
(1) Represents base business net sales change as a percentage of base business net sales for the three months ended September 30, 2019.
(2) Represents acquired and combined net sales change as a percentage of acquired and combined net sales for the three months ended September 30, 2019.
(3) The numbers of business days for the three months ended September 30, 2020 and 2019 were 64 and 63, respectively.
Nine Months Ended September 30, 2019
Base Business Net Sales Change
Acquired and Combined Net Sales Change
Nine Months Ended September 30, 2020
Total Net Sales % Change
Base Business Net Sales % Change(1)
Acquired and Combined Net Sales % Change(2)
Wallboard
$
624,299
$
(42,540)
$
8,545
$
590,304
(5.4)
%
(7.1)
%
36.1
%
Suspended ceiling systems
314,045
(33,233)
6,525
287,337
(8.5)
%
(11.1)
%
43.6
%
Metal framing
300,493
(35,597)
959
265,855
(11.5)
%
(12.3)
%
7.9
%
Complementary and other products
400,852
(19,314)
6,575
388,113
(3.2)
%
(5.1)
%
33.0
%
Net sales
$
1,639,689
$
(130,684)
$
22,604
$
1,531,609
(6.6)
%
(8.3)
%
32.0
%
Average daily net sales(3)
$
8,630
$
(767)
$
114
$
7,977
(7.6)
%
(9.3)
%
30.6
%
(1) Represents base business net sales change as a percentage of base business net sales for the nine months ended September 30, 2019.
(2) Represents acquired and combined net sales change as a percentage of acquired and combined net sales for the nine months ended September 30, 2019.
(3) The numbers of business days for the nine months ended September 30, 2020 and 2019 were 192 and 190, 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, adjusted earnings per share and net debt leverage ratio, 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, offering and public company readiness expenses, stock-based compensation, and other non-recurring adjustments such as (gain) loss 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 offering and public company readiness expenses, stock-based compensation, tax effects on adjustments, and other non-recurring adjustments such as (gain) loss 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 September 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 September 30,
Nine Months Ended September 30,
2020
2019
2020
2019
(dollars in thousands)
Net income from continuing operations
$
11,801
$
12,709
36,034
32,258
Interest expense, net
6,447
9,012
21,265
25,999
Income tax expense
2,049
5,754
10,963
13,232
Depreciation and amortization
19,413
20,218
57,920
60,911
Offering and public company readiness expenses(a)
—
378
—
378
Stock-based compensation
1,491
1,117
4,319
3,056
(Gain) loss on disposal or sale of assets
(294)
13
414
(54)
Gain on legal settlement
—
—
(8,556)
—
Transaction costs(b)
811
819
1,895
2,046
Adjusted EBITDA
$
41,718
$
50,020
$
124,254
$
137,826
Adjusted EBITDA margin(c)
8.0
%
8.9
%
8.1
%
8.4
%
(a) Represents costs related to our initial public offering, secondary offering, and public company readiness expenses.
(b) Represents costs related to our transactions, including fees paid 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.
(c) 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 September 30,
Nine Months Ended September 30,
2020
2019
2020
2019
(in thousands, except share and per share data)
Net income from continuing operations
$
11,801
$
12,709
$
36,034
$
32,258
Offering and public company readiness expenses(a)
—
378
—
378
Stock-based compensation
1,491
1,117
4,319
3,056
(Gain) loss on disposal or sale of assets
(294)
13
414
(54)
Gain on legal settlement
—
—
(8,556)
—
Transaction costs(b)
811
819
1,895
2,046
Tax effects(c)
(517)
(594)
497
(1,386)
Adjusted net income
$
13,292
$
14,442
$
34,603
$
36,298
Earnings per share data as reported:
Basic
$
0.27
$
0.30
$
0.83
$
0.75
Diluted
$
0.27
$
0.30
$
0.83
$
0.75
Earnings per share data as adjusted:
Basic
$
0.31
$
0.33
$
0.81
$
0.84
Diluted
$
0.31
$
0.33
$
0.80
$
0.84
Weighted average shares outstanding:
Basic
43,206,505
42,988,829
43,152,229
42,969,797
Diluted
43,565,493
43,508,678
43,478,442
43,174,351
(a) Represents costs related to our initial public offering, secondary offering, and public company readiness expenses.
(b) Represents costs related to our transactions, including fees paid 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.
(c) Represents the impact of corporate income taxes. The tax rate applied to these adjustments is calculated by using a forecasted blended federal and state statutory rate, which amounted to 25.76% during both the three and nine months ended September 30, 2020.
View source version on businesswire.com: https://www.businesswire.com/news/home/20201102006016/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
1 Year Foundation Building Mate... Chart |
1 Month Foundation Building Mate... Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
Hot Features
Premium
