Segments

12 Months Ended

Apr. 30, 2021

Segment Reporting [Abstract]

Segments

Segments

General

The Company has eight operating segments based on geographic operations that it aggregates into one reportable segment. The Company defines operating segments as components of the organization for which discrete financial information is available and operating results are evaluated on a regular basis by the Chief Operating Decision Maker (“CODM”) in order to assess performance and allocate resources. The Company’s CODM is its Chief Executive Officer. The Company determined it has eight operating segments based on the Company’s eight geographic divisions, which are Central, Midwest, Northeast, Southern, Southeast, Southwest, Western and Canada. During the year ended April 30, 2021, the Company divided its Southern operating segment into two operating segments, Southern and Southwest, which resulted in an increase (from seven to eight) in the number of operating segments. The Company performed a goodwill impairment test immediately before and after the change in operating segments, which indicated the fair values of the Company’s reporting units exceeded their carrying values.

The Company aggregates its operating segments into a single reportable segment based on similarities between the operating segments’ economic characteristics, nature of products sold, production process, type of customer and methods of distribution. The accounting policies of the operating segments are the same as those described in the summary of significant policies. In addition to the Company’s reportable segment, the Company’s consolidated results include both corporate activities and certain other activities. Corporate includes the Company’s corporate office building and support services provided to its subsidiaries. Other includes Tool Source Warehouse, Inc., which functions primarily as an internal distributor of tools.

Segment Results

The CODM assesses the Company’s performance based on the periodic review of net sales, Adjusted EBITDA and certain other measures for each of the operating segments. Adjusted EBITDA is not a recognized financial measure under GAAP. However, we believe it assists investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. Management believes Adjusted EBITDA is helpful in highlighting trends in our operating results, while other measures can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which companies operate and capital investments. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations -- Non-GAAP Financial Measures” for a further discussion of this non-GAAP measure.

The following tables present segment results:

	Year Ended April 30, 2021								April 30, 2021
	Net Sales		Gross Profit		Depreciation and Amortization		Adjusted EBITDA		Total Assets
	(in thousands)
Geographic divisions	$	3,263,893	$	1,051,741	$	106,152	$	316,774	$	2,459,344
Other	34,930		10,962		364		2,597		20,339
Corporate	—		—		1,609		—		4,215
	$	3,298,823	$	1,062,703	$	108,125	$	319,371	$	2,483,898

	Year Ended April 30, 2020								April 30, 2020
	Net Sales		Gross Profit		Depreciation and Amortization		Adjusted EBITDA		Total Assets
	(in thousands)
Geographic divisions	$	3,213,938	$	1,053,555	$	114,279	$	297,646	$	2,299,880
Other	27,369		9,659		233		2,113		18,745
Corporate	—		—		2,021		—		5,829
	$	3,241,307	$	1,063,214	$	116,533	$	299,759	$	2,324,454

	Year Ended April 30, 2019								April 30, 2019
	Net Sales		Gross Profit		Depreciation and  Amortization		Adjusted EBITDA		Total Assets
	(in thousands)
Geographic divisions	$	3,090,314	$	994,981	$	114,558	$	293,190	$	2,169,981
Other	25,718		9,138		220		2,479		16,897
Corporate	—		—		2,681		—		7,139
	$	3,116,032	$	1,004,119	$	117,459	$	295,669	$	2,194,017

The following table presents a reconciliation of Adjusted EBITDA to net income:

	Year Ended April 30,
	2021		2020		2019
	(in thousands)
Net income	$	105,560	$	23,381	$	56,002
Interest expense	53,786		67,718		73,677
Write-off of debt discount and deferred financing fees	4,606		1,331		—
Interest income	(86)		(88)		(66)
Provision for income taxes	31,534		22,944		14,039
Depreciation expense	50,480		51,332		46,456
Amortization expense	57,645		65,201		71,003
Impairment of goodwill	—		63,074		—
Stock appreciation expense(a)	3,173		1,572		2,730
Redeemable noncontrolling interests(b)	1,288		520		1,188
Equity-based compensation(c)	8,442		7,060		3,906
Severance and other permitted costs(d)	2,948		5,733		8,152
Transaction costs (acquisitions and other)(e)	1,068		2,414		7,858
(Gain) loss on disposal and impairment of assets(f)	(1,011)		658		(525)
Effects of fair value adjustments to inventory(g)	788		575		4,176
Change in fair value of financial instruments(h)	—		—		6,395
Gain on legal settlement	(1,382)		(14,029)		—
Secondary public offering costs(i)	—		363		—
Debt transaction costs(j)	532		—		678
Adjusted EBITDA	$	319,371	$	299,759	$	295,669

__________________________________________

(a)Represents changes in the fair value of stock appreciation rights.

(b)Represents changes in the fair values of noncontrolling interests.

(c)Represents non-cash equity-based compensation expense related to the issuance of share-based awards.

(d)Represents severance expenses and other costs permitted in the calculation of Adjusted EBITDA under the ABL Facility and the Term Loan Facility, including certain unusual, nonrecurring costs and credits due to COVID-19.

(e)Represents costs related to acquisitions paid to third parties.

(f)Includes gains from the sale of assets and impairment of assets resulting from restructuring plans to close certain facilities.

(g)Represents the non-cash cost of sales impact of purchase accounting adjustments to increase inventory to its estimated fair value.

(h)Represents the mark-to-market adjustments for derivative financial instruments.

(i)Represents costs paid to third-party advisors related to secondary offerings of our common stock.

(j)Represents costs paid to third-party advisors related to debt refinancing activities.

Revenues by Product

The following table presents Company’s net sales to external customers by main product line:

	Year Ended April 30,
	2021		2020		2019
	(in thousands)
Wallboard	$	1,346,560	$	1,329,775	$	1,272,068
Ceilings	450,524		475,827		451,695
Steel framing	469,002		502,122		506,805
Complementary products	1,032,737		933,583		885,464
Total net sales	$	3,298,823	$	3,241,307	$	3,116,032

Geographic Information

The following table presents the Company’s net sales by major geographic area:

	Year Ended April 30,
	2021		2020		2019
	(in thousands)
United States	$	2,770,450	$	2,805,920	$	2,701,678
Canada	528,373		435,387		414,354
Total net sales	$	3,298,823	$	3,241,307	$	3,116,032

The following table presents the Company’s property and equipment by major geographic area:

	April 30, 2021		April 30, 2020
	(in thousands)
United States	$	271,346	$	270,855
Canada	39,980		34,612
Total property and equipment, net	$	311,326	$	305,467