ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 94-3196943 | |
(State or other jurisdiction of incorporation | (I.R.S. Employer | |
or organization) | Identification No.) |
Large accelerated filer | ý | Accelerated filer | o | |||
Non-accelerated filer | o | (Do not check if a smaller reporting company) | Smaller reporting company | o | ||
Emerging growth company | o |
March 31, | December 31, | ||||||||||
2017 | 2016 | 2016 | |||||||||
ASSETS | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | 167,059 | $ | 232,028 | $ | 226,537 | |||||
Trade accounts receivable, net | 148,506 | 135,123 | 112,423 | ||||||||
Inventories | 256,271 | 210,787 | 232,274 | ||||||||
Other current assets | 13,744 | 13,284 | 14,013 | ||||||||
Total current assets | 585,580 | 591,222 | 585,247 | ||||||||
Property, plant and equipment, net | 250,465 | 216,660 | 232,810 | ||||||||
Goodwill | 135,113 | 125,614 | 124,479 | ||||||||
Equity investment | 2,607 | — | 2,500 | ||||||||
Intangible assets, net | 31,713 | 26,719 | 22,864 | ||||||||
Other noncurrent assets | 12,722 | 8,746 | 12,074 | ||||||||
Total assets | $ | 1,018,200 | $ | 968,961 | $ | 979,974 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
Current liabilities | |||||||||||
Capital lease obligation - current portion | $ | 521 | $ | — | $ | — | |||||
Trade accounts payable | 38,219 | 29,023 | 27,674 | ||||||||
Accrued liabilities | 67,183 | 49,849 | 60,477 | ||||||||
Income taxes payable | 2,290 | 2,824 | — | ||||||||
Accrued profit sharing trust contributions | 2,514 | 2,245 | 6,549 | ||||||||
Accrued cash profit sharing and commissions | 9,256 | 11,133 | 10,527 | ||||||||
Accrued workers’ compensation | 3,578 | 4,472 | 3,569 | ||||||||
Total current liabilities | 123,561 | 99,546 | 108,796 | ||||||||
Capital lease obligation - net of current portion | 1,610 | — | — | ||||||||
Deferred income tax and other long-term liabilities | 6,076 | 5,159 | 5,336 | ||||||||
Total liabilities | 131,247 | 104,705 | 114,132 | ||||||||
Commitments and contingencies (see Note 8) | |||||||||||
Stockholders’ equity | |||||||||||
Common stock, at par value | 475 | 484 | 473 | ||||||||
Additional paid-in capital | 259,167 | 238,040 | 255,917 | ||||||||
Retained Earnings | 656,959 | 648,321 | 642,422 | ||||||||
Treasury stock | — | (3,502 | ) | — | |||||||
Accumulated other comprehensive loss | (29,648 | ) | (19,087 | ) | (32,970 | ) | |||||
Total stockholders’ equity | 886,953 | 864,256 | 865,842 | ||||||||
Total liabilities and stockholders’ equity | $ | 1,018,200 | $ | 968,961 | $ | 979,974 |
Three Months Ended | |||||||
March 31, | |||||||
2017 | 2016 | ||||||
Net sales | $ | 219,867 | $ | 199,523 | |||
Cost of sales | 119,711 | 107,000 | |||||
Gross profit | 100,156 | 92,523 | |||||
Operating expenses: | |||||||
Research and development and other engineering | 13,108 | 11,423 | |||||
Selling | 29,483 | 25,187 | |||||
General and administrative | 34,986 | 29,298 | |||||
Net gain on disposal of assets | (51 | ) | (26 | ) | |||
77,526 | 65,882 | ||||||
Income from operations | 22,630 | 26,641 | |||||
Loss in equity method investment, before tax | (28 | ) | — | ||||
Interest expense, net | (189 | ) | (235 | ) | |||
Gain on bargain purchase of a business | 8,388 | — | |||||
Income before taxes | 30,801 | 26,406 | |||||
Provision for income taxes | 7,680 | 10,063 | |||||
Net income | $ | 23,121 | $ | 16,343 | |||
Earnings per common share: | |||||||
Basic | $ | 0.49 | $ | 0.34 | |||
Diluted | 0.48 | $ | 0.34 | ||||
Number of shares outstanding | |||||||
Basic | 47,616 | 48,297 | |||||
Diluted | 47,906 | 48,450 | |||||
Cash dividends declared per common share | $ | 0.18 | $ | 0.16 |
Three Months Ended | |||||||
March 31, | |||||||
2017 | 2016 | ||||||
Net income | $ | 23,121 | $ | 16,343 | |||
Other comprehensive income (loss): | |||||||
Translation adjustment, net of tax expense | 3,322 | 9,489 | |||||
Comprehensive income | $ | 26,443 | $ | 25,832 |
Additional | Accumulated Other | |||||||||||||||||||||||||
Common Stock | Paid-in | Retained | Comprehensive | Treasury | ||||||||||||||||||||||
Shares | Par Value | Capital | Earnings | Income (Loss) | Stock | Total | ||||||||||||||||||||
Balance at January 1, 2016 | 48,184 | $ | 481 | $ | 238,212 | $ | 639,707 | $ | (28,576 | ) | $ | — | $ | 849,824 | ||||||||||||
Net income | — | — | — | 16,343 | — | — | 16,343 | |||||||||||||||||||
Translation adjustment, net of tax | — | — | — | — | 9,489 | — | 9,489 | |||||||||||||||||||
Options exercised | 35 | 1 | 1,012 | — | — | — | 1,013 | |||||||||||||||||||
Stock-based compensation | — | — | 2,350 | — | — | — | 2,350 | |||||||||||||||||||
Tax benefit of options exercised | — | — | 24 | — | — | — | 24 | |||||||||||||||||||
Shares issued from release of Restricted Stock Units | 196 | 2 | (3,873 | ) | — | — | — | (3,871 | ) | |||||||||||||||||
Repurchase of common stock | (106 | ) | — | — | — | — | (3,502 | ) | (3,502 | ) | ||||||||||||||||
Cash dividends declared on common stock, $0.16 per share | — | — | — | (7,729 | ) | — | — | (7,729 | ) | |||||||||||||||||
Common stock issued at $32.45 per share for stock bonus | 10 | — | 315 | — | — | — | 315 | |||||||||||||||||||
Balance at March 31, 2016 | 48,319 | 484 | 238,040 | 648,321 | (19,087 | ) | (3,502 | ) | 864,256 | |||||||||||||||||
Net income | — | — | — | 73,391 | — | 73,391 | ||||||||||||||||||||
Translation adjustment, net of tax | — | — | — | — | (13,409 | ) | — | (13,409 | ) | |||||||||||||||||
Pension adjustment, net of tax | — | — | — | — | (474 | ) | — | (474 | ) | |||||||||||||||||
Options exercised | 235 | 2 | 6,961 | — | — | — | 6,963 | |||||||||||||||||||
Stock-based compensation | — | — | 10,836 | — | — | — | 10,836 | |||||||||||||||||||
Tax benefit of options exercised | — | — | 227 | — | — | — | 227 | |||||||||||||||||||
Shares issued from release of Restricted Stock Units | 21 | — | (147 | ) | — | — | — | (147 | ) | |||||||||||||||||
Repurchase of common stock | (1,138 | ) | — | — | — | — | (50,000 | ) | (50,000 | ) | ||||||||||||||||
Retirement of common stock | — | (13 | ) | — | (53,489 | ) | — | 53,502 | — | |||||||||||||||||
Cash dividends declared on common stock, $0.54 per share | — | — | — | (25,801 | ) | — | — | (25,801 | ) | |||||||||||||||||
Balance at December 31, 2016 | 47,437 | 473 | 255,917 | 642,422 | (32,970 | ) | — | 865,842 | ||||||||||||||||||
Net income | — | — | — | 23,121 | — | — | 23,121 | |||||||||||||||||||
Translation adjustment, net of tax | — | — | — | — | 3,322 | — | 3,322 | |||||||||||||||||||
Options exercised | 11 | — | 314 | — | — | — | 314 | |||||||||||||||||||
Stock-based compensation | — | — | 7,650 | — | — | — | 7,650 | |||||||||||||||||||
Shares issued from release of Restricted Stock Units | 197 | 2 | (5,126 | ) | — | — | — | (5,124 | ) | |||||||||||||||||
Cash dividends declared on common stock, $0.18 per share | — | — | — | (8,584 | ) | — | — | (8,584 | ) | |||||||||||||||||
Common stock issued at $44.26 per share for stock bonus | 9 | — | 412 | — | — | — | 412 | |||||||||||||||||||
Balance at March 31, 2017 | 47,654 | $ | 475 | $ | 259,167 | $ | 656,959 | $ | (29,648 | ) | $ | — | $ | 886,953 |
Three Months Ended | |||||||
March 31, | |||||||
2017 | 2016 | ||||||
Cash flows from operating activities | |||||||
Net income | $ | 23,121 | $ | 16,343 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Gain on sale of assets | (51 | ) | (26 | ) | |||
Depreciation and amortization | 8,363 | 7,437 | |||||
Write-off of software development project | — | 153 | |||||
Loss in equity method investment, before tax | 28 | — | |||||
Gain on bargain purchase of a business | (8,388 | ) | — | ||||
Deferred income taxes | 1,163 | 2,499 | |||||
Noncash compensation related to stock plans | 7,976 | 2,750 | |||||
Excess tax benefit of options exercised and restricted stock units vested | — | (28 | ) | ||||
Provision (recovery) for doubtful accounts | 13 | (266 | ) | ||||
Changes in operating assets and liabilities, net of acquisitions: | |||||||
Trade accounts receivable | (30,254 | ) | (28,228 | ) | |||
Inventories | (9,796 | ) | (13,912 | ) | |||
Trade accounts payable | 3,209 | 7,273 | |||||
Income taxes payable | 3,681 | 6,289 | |||||
Accrued profit sharing trust contributions | (4,036 | ) | (3,552 | ) | |||
Accrued cash profit sharing and commissions | (1,287 | ) | 2,605 | ||||
Other current assets | (695 | ) | (3,230 | ) | |||
Accrued liabilities | (845 | ) | (6,192 | ) | |||
Long-term liabilities | 87 | (1,853 | ) | ||||
Accrued workers’ compensation | 9 | (121 | ) | ||||
Other noncurrent assets | 210 | 2,162 | |||||
Net cash used in operating activities | (7,492 | ) | (9,897 | ) | |||
Cash flows from investing activities | |||||||
Capital expenditures | (15,760 | ) | (6,972 | ) | |||
Asset acquisitions, net of cash acquired | (26,289 | ) | — | ||||
Proceeds from sale of property and equipment | 53 | 40 | |||||
Net cash used in investing activities | (41,996 | ) | (6,932 | ) | |||
Cash flows from financing activities | |||||||
Deferred and contingent consideration paid for asset acquisition | (65 | ) | (27 | ) | |||
Repurchase of common stock | — | (3,502 | ) | ||||
Capital lease borrowings | 2,131 | — | |||||
Issuance of common stock | 314 | 1,012 | |||||
Excess tax benefit of options exercised and restricted stock units vested | — | 28 | |||||
Dividends paid | (8,538 | ) | (7,709 | ) | |||
Cash paid on behalf of employees for shares withheld | (5,124 | ) | (3,871 | ) | |||
Net cash used in financing activities | (11,282 | ) | (14,069 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | 1,292 | 4,101 | |||||
Net decrease in cash and cash equivalents | (59,478 | ) | (26,797 | ) | |||
Cash and cash equivalents at beginning of period | 226,537 | 258,825 | |||||
Cash and cash equivalents at end of period | $ | 167,059 | $ | 232,028 | |||
Noncash activity during the period | |||||||
Noncash capital expenditures | $ | 4,817 | $ | 266 | |||
Dividends declared but not paid | 8,578 | $ | 7,729 | ||||
Contingent consideration for acquisition | 1,139 | — | |||||
Issuance of Company’s common stock for compensation | 412 | 315 |
Three Months Ended March 31, | |||||||
(in thousands, except per share amounts) | 2017 | 2016 | |||||
Net income available to common stockholders | $ | 23,121 | $ | 16,343 | |||
Basic weighted-average shares outstanding | 47,616 | 48,297 | |||||
Dilutive effect of potential common stock equivalents — stock options and restricted stock units | 290 | 153 | |||||
Diluted weighted-average shares outstanding | 47,906 | 48,450 | |||||
Earnings per common share: | |||||||
Basic | $ | 0.49 | $ | 0.34 | |||
Diluted | $ | 0.48 | $ | 0.34 | |||
Potentially dilutive securities excluded from earnings per diluted share because their effect is anti-dilutive | — | — |
Three Months Ended March 31, | |||||||
(in thousands) | 2017 | 2016 | |||||
Stock-based compensation expense recognized in operating expenses | $ | 7,586 | $ | 2,480 | |||
Less: Tax benefit of stock-based compensation expense in provision for income taxes | 2,791 | 895 | |||||
Stock-based compensation expense, net of tax | $ | 4,795 | $ | 1,585 | |||
Fair value of shares vested | $ | 7,650 | $ | 2,350 | |||
Proceeds to the Company from the exercise of stock-based compensation | $ | 314 | $ | 1,012 | |||
Tax effect from the exercise of stock-based compensation, including shortfall tax benefits | $ | 1,104 | $ | 24 |
At March 31, | |||||||
(in thousands) | 2017 | 2016 | |||||
Stock-based compensation cost capitalized in inventory | $ | 521 | $ | 253 |
At March 31, | At December 31, | ||||||||||
(in thousands) | 2017 | 2016 | 2016 | ||||||||
United States Treasury securities and money market funds | $ | 3,545 | $ | 71,442 | $ | 2,832 |
Three Months Ended March 31, | |||||||
(in thousands, except percentages) | 2017 | 2016 | |||||
Effective tax rate | 24.9 | % | 38.1 | % | |||
Provision for income taxes | $ | 7,680 | $ | 10,063 |
(In thousands) | ||||
Assets * | ||||
Cash and cash equivalents | $ | 3,956 | ||
Accounts receivable | 4,914 | |||
Inventory | 13,063 | |||
Other current assets | 760 | |||
Property, plant, equipment and noncurrent assets | 5,744 | |||
28,437 | ||||
Liabilities | ||||
Accounts payable | 4,500 | |||
Other current liabilities | 5,381 | |||
9,881 | ||||
Total net assets | 18,556 | |||
Gain on bargain purchase of a business, net of tax | (8,388 | ) | ||
Total purchase price | $ | 10,168 | ||
* | Intangible assets acquired were determined to have little to no value, thus were not recognized. |
At March 31, | At December 31, | ||||||||||
(in thousands) | 2017 | 2016 | 2016 | ||||||||
Trade accounts receivable | $ | 153,542 | $ | 139,198 | $ | 116,368 | |||||
Allowance for doubtful accounts | (1,284 | ) | (918 | ) | (895 | ) | |||||
Allowance for sales discounts and returns | (3,752 | ) | (3,157 | ) | (3,050 | ) | |||||
$ | 148,506 | $ | 135,123 | $ | 112,423 |
At March 31, | At December 31, | ||||||||||
(in thousands) | 2017 | 2016 | 2016 | ||||||||
Raw materials | $ | 90,545 | $ | 82,056 | $ | 86,524 | |||||
In-process products | 26,010 | 20,827 | 20,902 | ||||||||
Finished products | 139,716 | 107,904 | 124,848 | ||||||||
$ | 256,271 | $ | 210,787 | $ | 232,274 |
At March 31, | At December 31, | ||||||||||
(in thousands) | 2017 | 2016 | 2016 | ||||||||
Land | $ | 32,370 | $ | 30,535 | $ | 32,127 | |||||
Buildings and site improvements | 186,974 | 173,605 | 183,882 | ||||||||
Leasehold improvements | 5,515 | 5,616 | 5,550 | ||||||||
Machinery, equipment, and software | 254,405 | 239,264 | 248,861 | ||||||||
479,264 | 449,020 | 470,420 | |||||||||
Less accumulated depreciation and amortization | (279,607 | ) | (264,398 | ) | (273,302 | ) | |||||
199,657 | 184,622 | 197,118 | |||||||||
Capital projects in progress | 50,808 | 32,038 | 35,692 | ||||||||
$ | 250,465 | $ | 216,660 | $ | 232,810 |
At March 31, | At December 31, | ||||||||||
(in thousands) | 2017 | 2016 | 2016 | ||||||||
North America | $ | 95,574 | $ | 86,038 | $ | 85,488 | |||||
Europe | 38,080 | 38,107 | 37,616 | ||||||||
Asia/Pacific | 1,459 | 1,469 | 1,375 | ||||||||
Total | $ | 135,113 | $ | 125,614 | $ | 124,479 |
At March 31, 2017 | |||||||||||
Gross | Net | ||||||||||
Carrying | Accumulated | Carrying | |||||||||
(in thousands) | Amount | Amortization | Amount | ||||||||
North America | $ | 33,862 | $ | (14,815 | ) | $ | 19,047 | ||||
Europe | 28,110 | (15,444 | ) | 12,666 | |||||||
Total | $ | 61,972 | $ | (30,259 | ) | $ | 31,713 |
At March 31, 2016 | |||||||||||
Gross | Net | ||||||||||
(in thousands) | Carrying Amount | Accumulated Amortization | Carrying Amount | ||||||||
North America | $ | 27,490 | $ | (15,743 | ) | $ | 11,747 | ||||
Europe | 30,107 | (15,135 | ) | 14,972 | |||||||
Total | $ | 57,597 | $ | (30,878 | ) | $ | 26,719 |
At December 31, 2016 | |||||||||||
Gross | Net | ||||||||||
(in thousands) | Carrying Amount | Accumulated Amortization | Carrying Amount | ||||||||
North America | $ | 23,562 | $ | (13,811 | ) | $ | 9,751 | ||||
Europe | 27,880 | (14,767 | ) | 13,113 | |||||||
Total | $ | 51,442 | $ | (28,578 | ) | $ | 22,864 |
(in thousands) | |||
Remaining nine months of 2017 | $ | 4,658 | |
2018 | 5,250 | ||
2019 | 5,102 | ||
2020 | 5,072 | ||
2021 | 4,592 | ||
2022 | 2,737 | ||
Thereafter | 3,686 | ||
$ | 31,097 |
Intangible | |||||||
(in thousands) | Goodwill | Assets | |||||
Balance at December 31, 2016 | $ | 124,479 | $ | 22,864 | |||
Acquisitions | 10,066 | 10,301 | |||||
Amortization | (1,683 | ) | |||||
Foreign exchange | 568 | 231 | |||||
Balance at March 31, 2017 | $ | 135,113 | $ | 31,713 |
Shares | Weighted- Average Price | Aggregate Intrinsic Value * | ||||||||
Unvested Restricted Stock Units (RSUs) | (in thousands) | (in thousands) | ||||||||
Outstanding at January 1, 2017 | 615 | $ | 31.81 | 26,915 | ||||||
Awarded | 606 | |||||||||
Vested | (314 | ) | ||||||||
Forfeited | (2 | ) | ||||||||
Outstanding at March 31, 2017 | 905 | $ | 36.90 | $ | 38,993 | |||||
Outstanding and expected to vest at March 31, 2017 | 881 | $ | 36.87 | $ | 37,983 |
* | The intrinsic value is calculated using the closing price per share of $43.09 of the underlying Company's common stock as reported by the New York Stock Exchange on March 31, 2017. |
Shares | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Life | Aggregate Intrinsic Value * | ||||||||||
Non-Qualified Stock Options | (in thousands) | (in years) | (in thousands) | ||||||||||
Outstanding at January 1, 2017 | 251 | $ | 29.66 | 1.1 | 3,538 | ||||||||
Exercised | (11 | ) | |||||||||||
Forfeited | — | ||||||||||||
Outstanding and exercisable at March 31, 2017 | 240 | $ | 29.66 | 0.8 | $ | 3,230 |
* | The intrinsic value represents the amount, if any, by which the fair market value of the underlying Company's common stock exceeds the exercise price of the stock option, using the closing price per share of $43.09 of such stock as reported by the New York Stock Exchange on March 31, 2017. |
Three Months Ended March 31, | |||||||
(in thousands) | 2017 | 2016 | |||||
Net Sales | |||||||
North America | $ | 183,772 | $ | 174,454 | |||
Europe | 34,381 | 23,698 | |||||
Asia/Pacific | 1,714 | 1,371 | |||||
Total | $ | 219,867 | $ | 199,523 | |||
Sales to Other Segments* | |||||||
North America | $ | 850 | $ | 501 | |||
Europe | 147 | 92 | |||||
Asia/Pacific | 4,949 | 5,181 | |||||
Total | $ | 5,946 | $ | 5,774 | |||
Income (Loss) from Operations | |||||||
North America | $ | 26,767 | $ | 30,452 | |||
Europe | (1,835 | ) | (1,618 | ) | |||
Asia/Pacific | (195 | ) | 155 | ||||
Administrative and all other | (2,107 | ) | (2,348 | ) | |||
Total | $ | 22,630 | $ | 26,641 |
At | |||||||||||
At March 31, | December 31, | ||||||||||
(in thousands) | 2017 | 2016 | 2016 | ||||||||
Total Assets | |||||||||||
North America | $ | 877,408 | $ | 771,732 | $ | 853,826 | |||||
Europe | 187,614 | 171,352 | 165,121 | ||||||||
Asia/Pacific | 25,944 | 25,915 | 25,118 | ||||||||
Administrative and all other | (72,766 | ) | (38 | ) | (64,091 | ) | |||||
Total | $ | 1,018,200 | $ | 968,961 | $ | 979,974 |
Three Months Ended March 31, | |||||||
(in thousands) | 2017 | 2016 | |||||
Wood construction products | $ | 190,877 | $ | 171,777 | |||
Concrete construction products | 28,817 | 27,745 | |||||
Other | 173 | 1 | |||||
Total | $ | 219,867 | $ | 199,523 |
Three Months Ended | Three Months Ended | ||||||||||||||||||||||
Increase (Decrease) in Operating Segment | |||||||||||||||||||||||
March 31, | North | Asia/ | Admin & | March 31, | |||||||||||||||||||
(in thousands) | 2016 | America | Europe | Pacific | All Other | 2017 | |||||||||||||||||
Net sales | $ | 199,523 | $ | 9,318 | $ | 10,683 | $ | 343 | $ | — | $ | 219,867 | |||||||||||
Cost of sales | 107,000 | 4,041 | 8,189 | 520 | (39 | ) | 119,711 | ||||||||||||||||
Gross profit | 92,523 | 5,277 | 2,494 | (177 | ) | 39 | 100,156 | ||||||||||||||||
Research and development and other engineering expense | 11,423 | 1,506 | 169 | 10 | — | 13,108 | |||||||||||||||||
Selling expense | 25,187 | 2,752 | 1,433 | 110 | 1 | 29,483 | |||||||||||||||||
General and administrative expense | 29,298 | 4,717 | 1,108 | 66 | (203 | ) | 34,986 | ||||||||||||||||
Gain on sale of assets | (26 | ) | (13 | ) | 1 | (13 | ) | — | (51 | ) | |||||||||||||
Income from operations | 26,641 | (3,685 | ) | (217 | ) | (350 | ) | 241 | 22,630 | ||||||||||||||
Loss in equity method investment, before tax | — | (28 | ) | — | — | — | (28 | ) | |||||||||||||||
Interest expense, net | (235 | ) | 34 | 131 | 3 | (122 | ) | (189 | ) | ||||||||||||||
Gain on bargain purchase of a business | — | — | 8,388 | — | — | 8,388 | |||||||||||||||||
Income before income taxes | 26,406 | (3,679 | ) | 8,302 | (347 | ) | 119 | 30,801 | |||||||||||||||
Provision for income taxes | 10,063 | (1,355 | ) | 230 | (100 | ) | (1,158 | ) | 7,680 | ||||||||||||||
Net income | $ | 16,343 | $ | (2,324 | ) | $ | 8,072 | $ | (247 | ) | $ | 1,277 | 23,121 |
North | Asia/ | ||||||||||||||
(in thousands) | America | Europe | Pacific | Total | |||||||||||
Three months ended | |||||||||||||||
March 31, 2016 | $ | 174,454 | $ | 23,698 | $ | 1,371 | $ | 199,523 | |||||||
March 31, 2017 | 183,772 | 34,381 | 1,714 | 219,867 | |||||||||||
Increase | $ | 9,318 | $ | 10,683 | $ | 343 | $ | 20,344 | |||||||
Percentage increase | 5 | % | 45 | % | 25 | % | 10 | % |
North America | Europe | Asia/ Pacific | Total | ||||||||
Percentage of total 2016 net sales | 87 | % | 12 | % | 1 | % | 100 | % | |||
Percentage of total 2017 net sales | 84 | % | 16 | % | — | % | 100 | % |
North | Asia/ | Admin & | |||||||||||||||||
(in thousands) | America | Europe | Pacific | All Other | Total | ||||||||||||||
Three months ended | |||||||||||||||||||
March 31, 2016 | $ | 83,713 | $ | 8,562 | $ | 306 | $ | (58 | ) | $ | 92,523 | ||||||||
March 31, 2017 | 88,990 | 11,056 | 129 | (19 | ) | 100,156 | |||||||||||||
Increase (decrease) | $ | 5,277 | $ | 2,494 | $ | (177 | ) | $ | 39 | $ | 7,633 | ||||||||
Percentage increase (decrease) | 6 | % | 29 | % | * | * | 8 | % |
(in thousand) | North America | Europe | Asia/ Pacific | Admin & All Other | Total | ||||||||
2016 gross profit percentage | 48 | % | 36 | % | 22 | % | * | 46 | % | ||||
2017 gross profit percentage | 48 | % | 32 | % | 8 | % | * | 46 | % |
• | Net sales increased 5%, mostly due to increased average net sales unit prices in the United States as well as an increase in sales volumes. Canada's net sales increased, primarily due to increased sales volumes on flat average net sales unit prices. Canada's net sales were not significantly affected by foreign currency translation. The recent North America acquisition increased net sales by $1.5 million. |
• | Gross profit margin was unchanged at 48%, as the effects of price increases were offset by increases in factory overhead, partly due to increased stock–based compensation expense, labor, shipping and warehousing costs. |
• | Research and development and engineering expense increased 15% to $11.8 million from $10.3 million, primarily due to an increase of $1.2 million in personnel costs, primarily related to the recent North America acquisition as well as the addition of staff and pay rate increases instituted on January 1, 2017, and a $0.3 million increase in stock-based compensation (see "First Quarter 2017 Consolidated Financial Highlights - Stock-based compensation" above). The recent North America acquisition increased research and development and engineering expense by $1.1 million. |
• | Selling expense increased $2.8 million, primarily due to increases of $1.1 million in personnel costs, mostly related to the addition of staff and pay rate increases instituted on January 1, 2017, $1.1 million in advertising costs, and $0.9 million in stock-based compensation, partly offset by decreases of $0.3 million in cash profit sharing and sales commissions expenses and $0.3 million in professional fees. |
• | General and administrative expense increased $4.7 million, primarily due to increases of $2.8 million in legal and professional fees, $2.2 million in stock-based compensation, $0.8 million in personnel costs, mostly related to the addition of staff and pay rate increases instituted on January 1, 2017, $0.5 million in software licensing and maintenance fees, $0.2 million in intangible amortization expense, and $0.2 million in bad debt expense, partly offset by decreases of $0.9 million in cash profit sharing expense and $0.3 million in depreciation expense, as well as a $0.9 million decrease in net foreign currency losses. The recent North America acquisition increased general and administrative expense by $0.4 million. |
• | Operating profit decreased $3.7 million, mostly due to increased operating expenses, which were partially offset by higher gross profits. |
• | Net sales increased 45%, mostly due to the recent Europe acquisitions. The recent Europe acquisitions had the effect of increasing net sales by $11.1 million, which was offset by the negative effects of approximately 5% or $1.3 million in foreign currency translations, primarily related to the weakening of the British pound against the United States dollar in the latter half of 2016. |
• | Gross profit margin decreased to 32% from 36%, primarily due to recent Europe acquisitions, and our operating profit decreased by $0.2 million. The companies acquired in the recent Europe acquisitions had an average gross profit margin of 21%. |
• | Selling expense increased $1.4 million, primarily due to an increase of $1.3 million in personnel costs, mostly related to the addition of staff, partly offset by a decrease of $0.3 million in professional fees. The recent Europe acquisitions increased selling expense by $1.7 million. |
• | General and administrative expense increased $1.1 million, primarily due to increases of $0.3 million in personnel costs, mostly related to the addition of staff and pay rate increases instituted on January 1, 2017, $0.2 million in stock-based compensation, and $0.2 million in in software licensing and maintenance fees. Recent Europe acquisitions increased general and administrative expense by $0.6 million. |
• | For information about the Company's Asia/Pacific segment, please refer to the additional financial data of the Company for the three months ended March 31, 2017 and 2016, above. |
• | General and administrative expenses decreased, primarily due to a decrease of $0.7 million in cash profit sharing expense, partly offset by an increase of $0.6 million in stock-based compensation. |
• | Market prices for steel to remain relatively stable during the second quarter of 2017. |
• | Gross profit margin for the full-year of 2017 to be approximately 45% to 46%. |
• | Depreciation expense for the full-year 2017 to be approximately $25 million to $26 million. |
• | Amortization expense for the full-year 2017 to be approximately $6 million to $7 million. |
• | The effective tax rate for the full-year of 2017 to be between 34% and 36%, affected by the nonrecurring gain on a bargain purchase recorded in this quarter and the adoption of ASU 2016-09. |
At March 31, | At December 31, | At March 31, | ||||||||||
(in thousands) | 2017 | 2016 | 2016 | |||||||||
Cash and cash equivalents | $ | 167,059 | $ | 226,537 | $ | 232,028 | ||||||
Property, plant and equipment, net | 250,465 | 232,810 | 216,660 | |||||||||
Goodwill, intangible assets and equity investment | 169,433 | 149,843 | 152,333 | |||||||||
Working capital | 462,019 | 476,451 | 491,676 |
Three Months Ended March 31, | ||||||||
(in thousands) | 2017 | 2016 | ||||||
Net cash used in: | ||||||||
Operating activities | $ | (7,492 | ) | $ | (9,897 | ) | ||
Investing activities | (41,996 | ) | (6,932 | ) | ||||
Financing activities | (11,282 | ) | (14,069 | ) |
• | In August 2016, we acquired all the stock of MS Decoupe, (a former customer of a subsidiary of Simpson Manufacturing Co., Inc.) for a net cost of approximately $5.4 million. Our preliminary measurement of MS Decoupe assets acquired included goodwill and intangible assets of $3.1 million. In January 2017, we acquired Gbo Fastening Systems for approximately $10.2 million and CG Visions for approximately $20.8 million subject to specified holdback provisions and post-closing adjustments. Our preliminary measurement of Gbo Fastening Systems' assets acquired resulted in a $8.4 million gain on a bargain purchase of a business. Our preliminary measurement of CG Visions assets acquired included goodwill and intangible assets of $20.4 million. See "Note 2 — Acquisitions" to the accompanying unaudited interim condensed consolidated financial statements. |
• | In December 2016, we acquired a 25.0% equity interest in Ruby Sketch Pty Ltd. (“Ruby Sketch”) for $2.5 million, for which we account for our ownership interest using the equity accounting method. See "Note 6 — Investments" to the accompanying unaudited interim condensed consolidated financial statements. |
• | Our capital spending in the first quarter of 2017 was $15.7 million primarily related to our Texas facility expansion to increase warehouse, office and training center capacity and for improving our West Chicago chemical facility. Based on current information and subject to future events and circumstances, we estimate that our full-year 2017 capital spending will be approximately $50 million to $55 million, which includes expenditures finishing the work on our Texas facility and West Chicago chemical facility, as well as for the purchase of manufacturing equipment and development and licensing of software, assuming all such projects will be completed by the end of 2017. Our capital spending in 2016 was $42.0 million and was primarily used for the purchase and build-out of our West Chicago, Illinois, chemical facility, manufacturing equipment and software development. Based on current information and subject to future events and circumstances, we estimate that our full-year 2017 depreciation and amortization expense to be approximately $31 million to $33 million, of which approximately $25 million to $26 million is related to depreciation. |
• | In April 2017, our Board of Directors raised the quarterly cash dividend by 16.7% (compared to the last dividend declared by the Company in January 2017) to $0.21 per share, estimated to be $10.0 million in total. Such dividend is scheduled to be paid on July 27, 2017, to stockholders of record on July 6, 2017. |
(in thousands) | Dividends Paid | Open Market Share Repurchases | Accelerated Share Repurchases | Total | |||||||||||
January 1 - March 31, 2017 | $ | 8,583 | $ | — | $ | — | $ | 8,583 | |||||||
January 1 - December 31, 2016 | 32,711 | 3,502 | 50,000 | 86,213 | |||||||||||
January 1 - December 31, 2015 | 29,352 | 22,144 | 25,000 | 76,496 | |||||||||||
Total | $ | 70,646 | $ | 25,646 | $ | 75,000 | $ | 171,292 |
3.1 | Certificate of Incorporation of Simpson Manufacturing Co., Inc., as amended, is incorporated by reference to Exhibit 3.1 of its Quarterly Report on Form 10-Q for the quarter ended September 30, 2007 and to Exhibit 3.2 of its Current Report on Form 8-K dated March 28, 2017. |
3.2 | Amended and Restated Bylaws of Simpson Manufacturing Co., Inc., as amended, are incorporated by reference to Exhibit 3.2 of its Current Report on Form 8-K dated March 28, 2017. |
4.1 | Certificate of Designation, Preferences and Rights of Series A Participating Preferred Stock of Simpson Manufacturing Co., Inc., dated July 30, 1999, is incorporated by reference to Exhibit 4.2 of its Registration Statement on Form 8-A dated August 4, 1999. |
31.1 | Chief Executive Officer's Rule 13a-14(a)/15d-14(a) Certifications is filed herewith. |
31.2 | Chief Financial Officer's Rule 13a-14(a)/15d-14(a) Certifications is filed herewith. |
32 | Section 1350 Certifications are furnished herewith. |
101 | The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2017 formatted in Extensible Business Reporting Language (XBRL) are filed herewith: (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Comprehensive Income, (iv) the Condensed Consolidated Statements of Stockholders’ Equity, (v) the Condensed Consolidated Statements of Cash Flows and (vi) the Notes to Condensed Consolidated Financial Statements. |
Simpson Manufacturing Co., Inc. | ||||
(Registrant) | ||||
DATE: | May 9, 2017 | By /s/Brian J. Magstadt | ||
Brian J. Magstadt | ||||
Chief Financial Officer | ||||
(principal accounting and financial officer) | ||||
1. | I have reviewed this quarterly report on Form 10-Q of Simpson Manufacturing Co., Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
DATE: | May 9, 2017 | By /s/Karen Colonias | ||
Karen Colonias | ||||
Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Simpson Manufacturing Co., Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
DATE: | May 9, 2017 | By /s/Brian J. Magstadt | ||
Brian J. Magstadt | ||||
Chief Financial Officer |
DATE: | May 9, 2017 | By /s/Karen Colonias | ||
Karen Colonias | ||||
Chief Executive Officer | ||||
By /s/Brian J. Magstadt | ||||
Brian J. Magstadt | ||||
Chief Financial Officer | ||||
Document and Entity Information |
3 Months Ended |
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Mar. 31, 2017
shares
| |
Document and Entity Information | |
Entity Registrant Name | SIMPSON MANUFACTURING CO INC /CA/ |
Entity Central Index Key | 0000920371 |
Document Type | 10-Q |
Document Period End Date | Mar. 31, 2017 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 47,654,309 |
Document Fiscal Year Focus | 2017 |
Document Fiscal Period Focus | Q1 |
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
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Statement of Comprehensive Income [Abstract] | ||
Net income | $ 23,121 | $ 16,343 |
Other comprehensive income (loss): | ||
Translation adjustment, net of tax expense | 3,322 | 9,489 |
Comprehensive income | $ 26,443 | $ 25,832 |
Condensed Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares |
3 Months Ended | |
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Mar. 31, 2017 |
Mar. 31, 2016 |
|
Statement of Stockholders' Equity [Abstract] | ||
Cash dividends declared per common share (in dollars per share) | $ 0.18 | $ 0.16 |
Common stock issued per share for stock bonus (in USD per share) | $ 44.26 | $ 32.45 |
Basis of Presentation |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | Basis of Presentation Principles of Consolidation The condensed consolidated financial statements include the accounts of Simpson Manufacturing Co., Inc. and its subsidiaries (collectively, the “Company”). There were no investments in affiliates that would render such affiliates to be considered variable interest entities. All significant intercompany transactions have been eliminated. Interim Period Reporting The accompanying unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations for reporting on Form 10-Q. Accordingly, certain information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted. These interim statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016. The unaudited quarterly condensed consolidated financial statements have been prepared on the same basis as the audited annual consolidated financial statements and, in the opinion of management, contain all adjustments (consisting of only normal recurring adjustments) necessary to state fairly the financial information set forth therein, in accordance with GAAP. The year-end condensed consolidated balance sheet data provided herein were derived from audited financial statements, but do not include all disclosures required by GAAP. The Company’s quarterly results fluctuate. As a result, the Company believes the results of operations for this interim period presented are not indicative of the results to be expected for any future periods. Revenue Recognition The Company recognizes revenue when the earnings process is complete, net of applicable provision for discounts, returns and incentives, whether actual or estimated, based on the Company’s experience. This generally occurs when products are shipped to the customer in accordance with the sales agreement or purchase order, ownership and risk of loss pass to the customer, collectability is reasonably assured and pricing is fixed or determinable. The Company’s general shipping terms are F.O.B. shipping point, and title is transferred and revenue is recognized when the products are shipped to customers. When the Company sells F.O.B. destination point, title is transferred and the Company recognizes revenue on delivery or customer acceptance, depending on terms of the sales agreement. Service sales, representing after-market repair and maintenance, engineering activities and software license sales and services, though less than 1.0% net sales and not material to the condensed consolidated financial statements, are recognized as the services are completed or the software products and services are delivered. If actual costs of sales returns, incentives and discounts were to significantly exceed the recorded estimated allowance, the Company’s sales would be adversely affected. Net Earnings Per Common Share Basic earnings per common share are computed based on the weighted-average number of common shares outstanding. Potentially dilutive securities, using the treasury stock method, are included in the diluted per-share calculations for all periods when the effect of their inclusion is dilutive. The following is a reconciliation of basic earnings per common share to diluted earnings per share for the three months ended March 31, 2017 and 2016, respectively:
Accounting for Stock-Based Compensation The Company currently maintains an equity incentive plan, the Simpson Manufacturing Co., Inc. Amended and Restated 2011 Incentive Plan (the “2011 Plan”), which was originally adopted on April 26, 2011 and was subsequently amended and restated on April 21, 2015. The 2011 Plan amended and restated in their entirety, and incorporated and superseded, both the Simpson Manufacturing Co., Inc. 1994 Stock Option Plan (the “1994 Plan”), which was principally for the Company’s employees, and the Simpson Manufacturing Co., Inc. 1995 Independent Director Stock Option Plan (the “1995 Plan”), which was for its independent directors. Awards previously granted under the 1994 Plan or the 1995 Plan were not affected by the adoption of the 2011 Plan and continued to be governed by the 1994 Plan or the 1995 Plan, respectively. Under the 1994 Plan and the 1995 Plan, the Company could grant incentive stock options and non-qualified stock options, although the Company granted only non-qualified stock options thereunder. The Company generally granted stock options under each of the 1994 Plan and the 1995 Plan once every year. Stock options vest and expire according to terms established at the grant date. Stock options granted under the 1994 Plan typically vested evenly over the requisite service period of four years and have a term of seven years. Stock options granted under the 1995 Plan typically fully vested on the date of grant. Shares of common stock issued on exercise of stock options under the 1994 Plan and the 1995 Plan are registered under the Securities Act of 1933, as amended (the "Securities Act"). Under the 2011 Plan, the Company may grant incentive stock options, non-qualified stock options, restricted stock and restricted stock units ("RSUs"), although the Company currently intends to award primarily performance-based and/or time-based RSUs and to a lesser extent, if at all, non-qualified stock options (see "Note 9 Stock-Based Incentive Plans"). The Company does not currently intend to award incentive stock options or restricted stock. Under the 2011 Plan, no more than 16.3 million shares of the Company’s common stock in aggregate may be issued under the 2011 Plan, including shares already issued pursuant to prior awards and shares reserved for issuance on exercise of options previously granted under the 1994 Plan and the 1995 Plan. Shares of common stock to be issued pursuant to the 2011 Plan are registered under the Securities Act. Subject to certain adjustments, the following limits shall apply with respect to any awards under the 2011 Plan that are intended to qualify for the performance-based exception from the tax deductibility limitations of section 162(m) of the U.S. Internal Revenue Code of 1986, as amended from time to time: (i) the maximum aggregate number of shares of the Company’s common stock that may be subject to stock options granted in any calendar year to any one participant shall be 150,000 shares; and (ii) the maximum aggregate number of shares of the Company’s common stock issuable or deliverable under RSUs granted in any calendar year to any one participant shall be 100,000 shares. The following table represents the Company’s stock-based compensation activity for the three months ended March 31, 2017 and 2016, respectively:
The Company allocates stock-based compensation expenses among cost of sales, research and development and other engineering expense, selling expense, or general and administrative expense based on the job functions performed by the employees to whom the stock-based compensation is awarded. The assumptions used to calculate the fair value of stock-based compensation are evaluated and revised, as necessary, to reflect market conditions and the Company’s experience. The following table shows the expense related to the Company's stock-based compensation capitalized in inventory for the three months ended March 31, 2017 and 2016, respectively:
Fair Value of Financial Instruments The “Fair Value Measurements and Disclosures” topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) establishes a valuation hierarchy for disclosure of the inputs used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument; and Level 3 inputs are unobservable inputs based on the Company’s assumptions used to measure assets and liabilities at fair value. A financial asset’s or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. As of December 31, 2016 and March 31, 2017, the Company’s investments consisted of only money market funds, and as of March 31, 2016, its investments consisted of only United States Treasury securities and money market funds, which are the Company’s primary financial instruments, maintained in cash equivalents and carried at cost, approximating fair value, based on Level 1 inputs. The balances of the Company's primary financial instruments at the dates indicated were as follows:
The carrying amounts of trade accounts receivable, accounts payable and accrued liabilities approximate fair value due to the short-term nature of these instruments. The fair value of the Company’s contingent consideration related to acquisitions is classified as Level 3 within the fair value hierarchy as it is based on unobserved inputs and assumptions. In 2017, the fair value of the contingent consideration related to the acquisition of CG Visions, Inc. ("CG Visions"), an Indiana company, was $1.1 million. Income Taxes The Company uses an estimated annual effective tax rate to measure the tax benefit or tax expense recognized in each interim period. The following table presents the Company’s effective tax rates and income tax expense for the three months ended March 31, 2017 and 2016, respectively:
The Company's effective income tax rate decreased to 24.9% from 38.1%. The decrease was primarily due to a nonrecurring gain on a bargain purchase related to the Gbo Fastening Systems acquisition (see "Gain on Bargain Purchase" below), which was not taxable, and the adoption of FASB Accounting Standards Update No. 2016-09 in January 1, 2017 (see "Recently Adopted Accounting Standards" below), which recognizes the excess tax benefits of stock-based awards as a reduction to income tax expense instead of the previous methodology which recorded the benefit on the balance sheets as a component of stockholders' equity. Acquisitions Under the business combinations topic of the FASB ASC 805, the Company accounts for acquisitions as business combinations and ascribes acquisition-date fair values to the acquired assets and assumed liabilities. Provisional fair value measurements are made at the time of the acquisitions. Adjustments to those measurements may be made in subsequent periods, up to one year from the acquisition date, as information necessary to complete the analysis is obtained. Fair value of intangible assets are generally based on Level 3 inputs. In August 2016, the Company purchased all of the outstanding shares of Multi Services Dêcoupe S.A. ("MS Decoupe"), a Belgium public limited company, for $6.9 million. MS Decoupe primarily manufactures and distributes wood construction, plastic, and metal labeling products in Belgium and the Netherlands, including distributing the Company's products manufactured at the Company's production facility in France. With this acquisition, the Company could potentially offer the Belgium market a wider-range of its products, shorten delivery lead times, and expand the Company's sales presence into the Netherlands market. The Company's provisional measurement of assets acquired and liabilities assumed included cash and cash equivalents of $1.5 million, other current assets of $2.1 million, noncurrent assets of $5.0 million, current liabilities of $0.7 million and noncurrent deferred income tax liabilities of $1.0 million. Included in noncurrent assets was goodwill of $1.9 million, which was assigned to the Europe segment, and intangible assets of $1.2 million, both of which are not subject to tax-deductible amortization. The estimated weighted-average amortization period for the intangible assets is 7 years. In January 2017, the Company acquired CG Visions for up to approximately $20.8 million subject to specified holdback provisions and post-closing adjustments. CG Visions provides scalable technologies and services in building information modeling ("BIM") technologies, estimation tools and software solutions to a number of the top 100 mid-sized to large builders in the United States, which are expected to complement and support the Company's sales in North America. The Company's provisional measurement of assets acquired and liabilities assumed included other current assets of $0.5 million, noncurrent assets of $20.4 million, current liabilities of $0.07 million and contingent consideration of $1.1 million. Included in noncurrent assets was goodwill of $10.1 million, which was assigned to the North America segment, and intangible assets of $10.3 million, both of which are not subject to tax-deductible amortization. The estimated weighted-average amortization period for the intangible assets is 7 years. In January 2017, the Company acquired Gbo Fastening Systems AB ("Gbo Fastening Systems"), a Sweden limited company, for approximately $10.2 million. Gbo Fastening Systems manufactures and sells a complete line of CE-marked structural fasteners as well as unique fastener dimensioning software for wood construction applications, currently sold mostly in northern and eastern Europe, which are expected to complement the Company's line of wood construction products in Europe. The results of operations of businesses acquired in 2016 through 2017 were included in the Company’s condensed consolidated results of operations since the date of the applicable acquisition. Such businesses are not material to the Company on an individual or aggregate basis, and accordingly, pro forma results of operations are not presented. Gain on Bargain Purchase The Company recorded a preliminary nontaxable bargain purchase gain of $8.4 million, which was included in the condensed consolidated statements of operations. This nonrecurring bargain purchase gain represents an estimate of the excess fair value of the net assets acquired over the consideration exchanged as of the acquisition date. The fair value measurement and recognition of the assets acquired and liabilities assumed were based on preliminary purchase price allocation and pro forma data for future periods, without speculating as to the seller's motivation. The Company concluded that the valuation procedures and resulting measures, including when repeated, appropriately reflect consideration of all available information as of the acquisition date. The following table represents the preliminary allocation of the purchase price to the estimated fair value of the assets acquired and liabilities assumed at the acquisition date of the Gbo Fastening Systems acquisition:
The Company believes it is possible that during the preliminary measurement period or after the final purchase price allocation is determined, the fair value measurement of acquired assets or liabilities could change, which could affect the estimated $8.4 million provisional gain. Recently Adopted Accounting Standards In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Compensation - Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"), which amends existing guidance related to accounting for employee share-based payments affecting the income tax consequences of awards, classification of awards as equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for fiscal years, and interim periods within those fiscal years beginning after December 15, 2016, with early adoption permitted. On January 1, 2017, the Company adopted ASU 2016-09. This new guidance requires all excess tax benefits and tax deficiencies be recognized as income tax expense or benefit in the income statement and classified as an operating activity in the statement of cash flows. The Company prospectively adopted this guidance with the tax impact of a $1.1 million tax benefit recognized in the consolidated income statements and classified it as an operating activity in the consolidated statement of cash flows. The guidance also requires a policy election either to estimate the number of awards that are expected to vest or to account for forfeitures whenever they occur. The Company did not change its policy for calculating accrual compensation costs by estimating the number of awards that are expected to vest. Therefore, when the Company adopted this guidance, there was no recognized cumulative effect adjustment to retained earnings. In addition, this guidance requires cash paid by an employer, when directly withholding shares for tax withholding purposes, to be classified in the statement of cash flows as a financing activity, which differs from the Company's previous method of classification of such cash payments as an operating activity. Accordingly, the Company applied this provision retrospectively and for the first quarter of 2017 and 2016 reclassified $5.1 million and $3.9 million, respectively, from operating activities to financing activities in the condensed consolidated statements of cash flows. In March 2016, the FASB issued Accounting Standards Update No. 2016-07, Simplifying the Transition to the Equity Method of Accounting ("ASU 2016-07"), which eliminates the requirement to apply the equity method of accounting retrospectively when a reporting entity obtains significant influence over a previously held investment. The amendments in ASU 2016-07 are effective for public companies for fiscal years beginning after December 15, 2016, including interim periods therein, with early adoption permitted. The new standard should be applied prospectively for investments that qualify for the equity method of accounting after the effective date. On January 1, 2017, the Company prospectively adopted ASU 2016-07. Adoption of ASU 2016-07 has had no material effect on the Company's consolidated financial statements and footnote disclosures. In January 2017, the FASB issued Accounting Standards Updated No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business ("ASU 2017-01"), which changes the definition of a business to assist entities with evaluating when a set of transferred assets and activities is a business. The new guidance clarifies that a business must also include at least one substantive process and narrows the definition of outputs by more closely aligning it with how outputs are described in ASC 606, Revenue from Contracts with Customers. ASU 2017-01 is effective for fiscal years, and interim periods within those fiscal years beginning after December 15, 2017, with early adoption permitted. On January 1, 2017, the Company prospectively adopted ASU 2017-01. Adoption of ASU 2017-01 has had no material effect on the Company's consolidated financial statements and footnote disclosures. All other issued and effective accounting standards during 2017 were determined to be not relevant or material to the Company. Recently Issued Accounting Standards Not Yet Adopted Other than the following, there have been no new developments to those recently issued accounting standards disclosed in the Company’s 2016 Annual Report on Form 10-K. In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"). ASU 2014-09 supersedes nearly all existing revenue recognition guidance under GAAP. The amendments provide a revenue recognition five-step model to be applied to all revenue contracts with customers. In 2016, the FASB issued final amendments to clarify the implementation guidance for principal versus agent considerations, identifying performance obligations and the accounting for licenses of intellectual property. ASU 2014-09 and its 2016 final amendments are effective for annual and interim periods beginning after December 15, 2017. The Company expects to adopt the new standard on January 1, 2018. The new standard also permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the modified retrospective method). The Company is currently in the process of determining its method of adoption, which depends in part upon the completion of the analysis on the impact this guidance will have on the Company's revenue arrangements. The Company expects to complete its analysis of the impact of the updated revenue-recognition guidance on the Company's revenue arrangements by October 2017. The Company’s approach includes performing a detailed review of key contracts representative of the Company’s products. In addition, comparing historical accounting policies and practices to the new standard on the Company’s revenue arrangements. Based on current information, and subject to future events and circumstances, the Company does not know whether the new revenue recognition standard will have a material impact on its financial statements upon adoption. In February 2016, the FASB issued Accounting Standards Update No. 2016-02, (Topic 842), Leases (“ASU 2016-02”). ASU 2016-02 core requirement is to recognize the assets and liabilities that arise from leases, including those leases classified as operating leases. The amendments require a lessee to recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term. The lessor accounting application is largely unchanged from that applied previously under GAAP. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. While the Company expects adoption to lead to a material increase in the assets and liabilities recorded on its condensed consolidated balance sheets, the Company is still evaluating the overall impact on its consolidated financial statements. In October 2016, the FASB issued Accounting Standards Update No. 2016-16, Income Taxes (Topic 740), Intra-Entity Transfers of Assets Other Than Inventory ("ASU 2016-16"), which requires companies to account for the income tax effects of intercompany sales and transfers of assets other than inventory when the transfer occurs. Current guidance requires companies to defer the income tax effects of intercompany transfers of assets until the asset has been sold to an outside party or otherwise recognized. The amendment is to be applied using a modified retrospective approach. ASU 2016-16 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. Based on current information and subject to future events and circumstances, the Company does not know whether ASU 2016-16 will have a material impact on its financial statements upon adoption. In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ("ASU 2017-04"), which eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge or Step 2 of the goodwill impairment analysis. Instead, an impairment charge will be recorded based on the excess of a reporting unit's carrying amount over its fair value using Step 1 of the goodwill impairment analysis. The standard is required to be adopted for annual and interim impairment tests performed after December 15, 2019. The amendment is to be applied prospectively. Early adoption is permitted for annual and interim goodwill impairment testing dates after January 1, 2017. Based on current information and subject to future events and circumstances, the Company does not know whether ASU 2017-04 will have a material impact on its financial statements upon adoption. |
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Trade Accounts Receivable, Net | Trade Accounts Receivable, Net Trade accounts receivable at the dates indicated consisted of the following:
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Inventories |
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Inventories | Inventories Inventories at the dates indicated consisted of the following:
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Property, Plant and Equipment, Net | Property, Plant and Equipment, Net Property, plant and equipment, net, at the dates indicated consisted of the following:
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets, Net | Goodwill and Intangible Assets, Net Goodwill at the dates indicated was as follows:
Intangible assets, net, at the dates indicated were as follows:
Intangible assets consist of definite-lived and indefinite-lived assets. Definite-lived intangible assets include customer relationships, patents, unpatented technology and non-compete agreements. Amortization expense for definite-lived intangible assets during the three months ended March 31, 2017 and 2016, totaled $1.7 million and $1.5 million, respectively. During the second quarter of 2016, an approximate $1.5 million in-process research and development asset was transferred to definite-lived intangible assets from indefinite-lived intangible assets, which is being amortized on a straight-line basis over the asset's useful life. Indefinite-lived intangible asset, consisting of a trade name, totaled $0.6 million at March 31, 2017. At March 31, 2017, estimated future amortization of definite-lived intangible assets was as follows:
The changes in the carrying amount of goodwill and intangible assets for the three months ended March 31, 2017, were as follows:
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Investments |
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Mar. 31, 2017 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Investments | Investments On December 23, 2016, the Company acquired a 25.0% equity interest in Ruby Sketch Pty Ltd. (“Ruby Sketch”), an Australian proprietary limited company, for $2.5 million, for which the Company accounts for its ownership interest using the equity accounting method. Ruby Sketch develops software that assists in designing residential structures, primarily used in Australia, and potentially for the North America market. The Company has no obligation to make any additional capital contributions to Ruby Sketch. For the three months ended March 31, 2017, the Company recorded an equity loss of $28 thousand with respect to its Ruby Sketch investment. However, the investment increased $135 thousand due to the foreign currency translation, primarily related to the weakening Australian dollar against United States dollar, resulting in a $2.6 million balance as of March 31, 2017. |
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Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt | Debt Credit Facilities The Company has revolving lines of credit with various banks in the United States and Europe. Total available credit at March 31, 2017, was $303.8 million including revolving credit lines and an irrevocable standby letter of credit in support of various insurance deductibles. The Company’s primary credit facility is a revolving line of credit with $300 million in available credit. On July 25, 2016, the Company entered into a second amendment (the "Amendment") to the credit facility. For additional information about the Amendment, see the Company's Current Report on Form 8-K dated July 28, 2016. As amended, this credit facility will expire on July 23, 2021. Amounts borrowed under this credit facility bear interest at an annual rate equal to either, at the Company’s option, (a) the rate for Eurocurrency deposits for the corresponding deposits of U.S. dollars appearing on Reuters LIBOR1screen page (the “LIBOR Rate”), adjusted for any reserve requirement in effect, plus a spread of 0.60% to 1.45%, determined quarterly based on the Company’s leverage ratio (at March 31, 2017, the LIBOR Rate was 0.93%), or (b) a base rate, plus a spread of 0.00% to 0.45%, determined quarterly based on the Company’s leverage ratio. The base rate is defined in a manner such that it will not be less than the LIBOR Rate. The Company will pay fees for standby letters of credit at an annual rate equal to the applicable spread described above, and will pay market-based fees for commercial letters of credit. The Company is required to pay an annual facility fee of 0.15% to 0.30% of the available commitments under the credit facility, regardless of usage, with the applicable fee determined on a quarterly basis based on the Company’s leverage ratio.The Company was also required to pay customary fees as specified in a separate fee agreement to the agent under the credit facility. The Company’s unused borrowing capacity under other revolving credit lines and a term note totaled $3.8 million at March 31, 2017. The other revolving credit lines and the term note charge interest ranging from 0.47% to 8.0%, currently have maturity dates from July 2017 to December 2017. The Company had no outstanding debt balance as of March 31, 2017 and 2016, and December 31, 2016, respectively. The Company was in compliance with its financial covenants at March 31, 2017. Capital Lease Obligation In March 2017, the Company leased office equipment from Cisco Systems Capital Corporation for four years, with lease payments totaling approximately $2.3 million through May, 2021. At the inception of the lease, the Company evaluated the agreement and determined it to be a capital lease. Accordingly, the leased equipment was capitalized and a liability of $2.2 million was recorded. The terms of the lease considered in such evaluation included the transfer of ownership of the equipment to the Company at the end of the lease, a bargain purchase option, the exercise of which can be reasonably assured, and the sum of present value of lease payments, and the leased equipment's residual value amounting to substantially all of its fair value at the end of the lease. As of March 31, 2017, the current portion of the outstanding liability for the leased equipment was approximately $0.5 million and the long-term portion was approximately $1.6 million. |
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Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Environmental The Company’s policy with regard to environmental liabilities is to accrue for future environmental assessments and remediation costs when information becomes available that indicates that it is probable that the Company is liable for any related claims and assessments and the amount of the liability is reasonably estimable. The Company does not believe that any such matters will have a material adverse effect on the Company’s financial condition, cash flows or results of operations. Litigation From time to time, the Company is involved in various legal proceedings and other matters arising in the normal course of business. Corrosion, hydrogen enbrittlement, cracking, material hardness, wood pressure-treating chemicals, misinstallations, misuse, design and assembly flaws, manufacturing defects, labeling defects, product formula defects, inaccurate chemical mixes, adulteration, environmental conditions, or other factors can contribute to failure of fasteners, connectors, anchors, adhesives, specialty chemicals, such as fiber reinforced polymers, and tool products. In addition, inaccuracies may occur in product information, descriptions and instructions found in catalogs, packaging, data sheets, and the Company’s website. As of the date of this Quarterly Report on Form 10-Q, the Company is not a party to any legal proceedings, which the Company expects individually or in the aggregate to have a material adverse effect on the Company’s financial condition, cash flows or results of operations. Nonetheless, the resolution of any claim or litigation is subject to inherent uncertainty and could have a material adverse effect on the Company’s financial condition, cash flows or results of operations. Potential Third-Party Claims Nishimura v. Gentry Homes, Ltd., Civil No. 11-1-1522-07, was filed in the Hawaii First Circuit court on July 20, 2011. The Nishimura case involves claims by homeowners at a Honolulu development, Ewa by Gentry, related to alleged corrosion of strap-tie holdowns and mud-sill anchor products supplied by the Company. Ewa by Gentry consists of approximately 2,400 homes. The Company is not currently a party to the Nishimura case. The plaintiff homeowners originally sued the developer Gentry Homes, Ltd. (“Gentry”) as well as the Company. In 2012 and 2013, the Hawaii First Circuit granted the Company’s motions to dismiss and for summary judgment, resulting in the dismissal of all of the plaintiff homeowners’ claims against the Company, and the Company is not currently a party to the proceedings. The dismissed claims against the Company remain subject to potential appeal by the plaintiffs. Further, Gentry may in the future seek to sue the Company for indemnity or contribution if Gentry is ultimately found liable for any loss suffered by the plaintiff homeowners. The Company initially understood from Gentry there were no significant damages claims related to Ewa by Gentry development. In May 2015, the plaintiff homeowners filed a second amended complaint to name a new representative plaintiff because the original representative plaintiffs had not suffered damage. In August 2016, Gentry advised the Company for the first time that other plaintiff homeowners had claimed serious corrosion of mudsill anchors and strap-tie holdowns in a substantial number of homes. The plaintiff homeowners and Gentry are currently proceeding in arbitration and the Hawaii state court lawsuit has been stayed pending the conclusion of arbitration. Gentry has not asserted any third party claim against the Company, but has reserved the right to seek to do so. In the Nishimura case and in the arbitration, the plaintiff homeowners seek damages according to proof. At this time, the Company cannot reasonably ascertain the likelihood that Gentry will be found responsible for substantial damages to the homeowners; whether, if so, Gentry would proceed against the Company; whether any legal theory against the Company might be viable, or the extent of the liability the Company might face if Gentry were to proceed against it. The Company admits no liability in connection with the Nishimura case. It will vigorously defend any claims, whether appeal by the plaintiff homeowners, or third party claims by Gentry. Based on facts currently known to the Company and subject to future events and circumstances, the Company believes that all or part of any claims that any party might seek to allege against it related to the Nishimura case may be covered by its insurance policies. Charles Vitale, et al. v. D.R. Horton, Inc. and D.R. Horton-Schuler Homes, LLC, Civil No. 15-1-1347-07, a putative class action lawsuit, was filed in the Hawaii First Circuit on July 13, 2015, in which homeowner plaintiffs allege that all homes built by D.R Horton/D.R. Horton-Schuler Homes (collectively "Horton Homes") in the State of Hawaii have strap-tie holdowns that are suffering premature corrosion. The complaint alleges that various manufacturers make strap-tie holdowns that suffer from such corrosion, but does not identify the Company’s products specifically. The Company is not currently a party to the Vitale lawsuit, but the lawsuit in the future could potentially involve the Company’s strap-tie holdowns. If claims are asserted against the Company in the Vitale case, it will vigorously defend any such claims, whether brought by the plaintiff homeowners, or third party claims by Horton Homes. Based on facts currently known to the Company and subject to future events and circumstances, the Company believes that all or part of any claims that any party might seek to allege against it related to the Vitale case may be covered by its insurance policies. Given the nature and the complexities involved in the Nishimura and Vitale proceedings, the Company is unable to estimate reasonably a likelihood of possible loss or range of possible loss until the Company knows, among other factors, (i) whether it will be named in the lawsuit by any party; (ii) the specific claims and the legal theories on which they are based (iii) what claims, if any, will survive dispositive motion practice, (iv) the extent of the claims, including the size of any potential class, particularly as damages are not specified or are indeterminate, (v) how the discovery process will affect the litigation, (vi) the settlement posture of the other parties to the litigation, (vii) the extent to which the Company’s insurance policies will cover the claims or any part thereof, if at all, (viii) whether class treatment is appropriate; and (ix) any other factors that may have a material effect on the litigation. While it is not feasible to predict the outcome of proceedings, to which the Company is not currently a party, or reasonably estimate a possible loss or range of possible loss for the Company related to such matters, in the opinion of the Company, either the likelihood of loss from such proceedings is remote or any reasonably possible loss associated with the resolution of such proceedings is not expected to be material to the Company’s financial position, results of operations or cash flows either individually or in the aggregate. Nonetheless, the resolution of any claim or litigation is subject to inherent uncertainty and could have a material adverse effect on the Company’s financial condition, cash flows or results of operations. |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Incentive Plans | Stock-Based Incentive Plans The Company currently has one stock-based incentive plan, the 2011 Plan, which incorporates and supersedes its two previous plans except for awards previously granted under the two plans (see "Note 1 Basis of Presentation — Accounting for Stock-Based Compensation”). Generally, participants of the 2011 Plan have been granted stock-based awards, only if the applicable Company-wide and/or profit-center operating goals, or strategic goals, established by the Compensation and Leadership Development Committee (the "Committee") of the Company's Board of Directors at the beginning of the year, were met. In 2017, some of the grants made will vest only if Company-wide and/or profit-center operating goals established by the Committee at the beginning of the year are met. The Company granted restricted stock units (“RSUs”) under the 2011 Plan in 2015, 2016 and 2017. The fair value of each restricted stock unit award is estimated on the measurement date as determined in accordance with GAAP and is based on the closing market price of the underlying Company's common stock on the day of the grant or the immediately preceding the trading date. The fair value excludes the present value of the dividends that the RSUs do not participate in. The RSUs may be time-based, performance-based or time- and performance-based. The restrictions on the time-based RSUs granted to our named executive officers and certain members of our senior management in 2017 and prior generally lapse on the date of the award and each of the first, second and third anniversaries of the date of the award. The restrictions on the time-based RSUs granted in 2017 generally lapse on the first, second, third and fourth anniversaries of the date of the award. The restrictions on the performance-based RSUs granted to our named executive officers and certain members of the Company’s senior management in 2017 and prior, in addition to their time-based RSUs, generally lapse following a performance period set for the RSUs on the date of the award, and shares of our common stock underlying such awards are subject to performance-based adjustment before becoming vested. In addition, the restrictions on the time- and performance-based RSUs granted to our employees in 2017 generally lapse on the first, second, third and fourth anniversaries of the date of the award, provided that the applicable performance goals are achieved within the year of grant. Generally, performance-based awards (including time- and performance-based awards) granted under the 2011 Plan may vest following the end of the performance periods only if the applicable performance goals are achieved within such periods. Under the 2011 Plan, or the applicable grant agreement, the vesting of RSUs granted thereunder may accelerate in four situations: (1) retirement after meeting certain age and/or service tenure conditions, (2) death, (3) disability, and (4) certain situations linked to a change in our control or our sale of assets. In case of early vesting of performance-based awards in any one of the four situations, shares of the underlying stock that could eventually vest in favor of the officer will be prorated based on the early-vesting date and the date when the applicable vesting period is scheduled to expire. On February 4, 2017, 606,299 RSUs were awarded to the Company's employees, including officers, at an estimated fair value of $43.42 per share, based on the closing price on February 4, 2017. The following table summarizes changes to the Company’s unvested restricted stock units for the three months ended March 31, 2017:
The total intrinsic value of RSUs vested during the three-month periods ended March 31, 2017 and 2016, was $10.8 million and $10.3 million, respectively, based on the market value on the award date. No stock options were granted in 2016 or in the first three months of 2017. The following table summarizes the changes to the Company’s outstanding non-qualified stock options for the three months ended March 31, 2017:
The total intrinsic value of stock options exercised was $0.2 million during both three-month periods ended March 31, 2017 and 2016. As of March 31, 2017, there was $20.0 million unrecognized cost related to unvested stock-based compensation arrangements under the 2011 Plan for awards made through February 2017. The portion of this cost related to restricted stock units awarded through February 2017 (as discussed above) is expected to be recognized over a weighted-average period of 2.5 years. |
Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information The Company is organized into three reportable segments. The segments are defined by the regions where the Company’s products are manufactured, marketed and distributed to the Company’s customers. The three regional segments are the North America segment, comprising primarily the United States and Canada; the Europe segment, comprising continental Europe and the United Kingdom; and the Asia/Pacific segment, which the Company believes is not significant to its overall performance, comprising the Company’s operations in China, Hong Kong, the South Pacific and the Middle East. China and Hong Kong operations are manufacturing and administrative support locations, respectively. These three reportable segments are similar in several ways, including the types of materials, the production processes, the distribution channels and the product applications. The Company’s measure of profit or loss for its reportable segments is income (loss) from operations. The reconciling amount between consolidated income before tax and consolidated income from operations is interest expense, which is primarily attributed to the "Administrative and all other" segment. The following tables illustrate certain measurements used by management to assess the performance as of or for the following periods:
* The sales to other segments are eliminated in consolidation.
Cash collected by the Company’s United States subsidiaries is routinely transferred into the Company’s cash management accounts and, therefore, has been included in the total assets of “Administrative and all other.” Cash and cash equivalent balances in the “Administrative and all other” segment were $92.1 million, $153.0 million, and $137.4 million, as of March 31, 2017 and 2016, and December 31, 2016, respectively. Total "Administrative and all other" assets are net of inter-segment due to and from accounts eliminated in consolidation. While the Company manages its business by geographic segment, presented as additional information, the following table illustrates the distribution of the Company’s net sales by product group for the following periods:
Wood construction products include connectors, truss plates, fastening systems, fasteners and pre-fabricated shearwalls and are used for connecting and strengthening wood-based construction primarily in the residential construction market. Concrete construction products include adhesives, chemicals, mechanical anchors, carbide drill bits, powder actuated tools and fiber reinforcing materials and are used for restoration, protection or strengthening concrete, masonry and steel construction in residential, industrial, commercial and infrastructure construction. |
Subsequent Events |
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Mar. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events In April 2017, the Company’s Board of Directors declared a quarterly cash dividend of $0.21 per share, estimated to be $10.0 million in total, to be paid on July 27, 2017, to stockholders of record on July 6, 2017. This is an increase of $0.03 per share, or 17%, over the last dividend declared by the Company in January 2017. |
Basis of Presentation (Policies) |
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Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements include the accounts of Simpson Manufacturing Co., Inc. and its subsidiaries (collectively, the “Company”). There were no investments in affiliates that would render such affiliates to be considered variable interest entities. All significant intercompany transactions have been eliminated. |
Interim Period Reporting | Interim Period Reporting The accompanying unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations for reporting on Form 10-Q. Accordingly, certain information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted. These interim statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016. The unaudited quarterly condensed consolidated financial statements have been prepared on the same basis as the audited annual consolidated financial statements and, in the opinion of management, contain all adjustments (consisting of only normal recurring adjustments) necessary to state fairly the financial information set forth therein, in accordance with GAAP. The year-end condensed consolidated balance sheet data provided herein were derived from audited financial statements, but do not include all disclosures required by GAAP. The Company’s quarterly results fluctuate. As a result, the Company believes the results of operations for this interim period presented are not indicative of the results to be expected for any future periods. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue when the earnings process is complete, net of applicable provision for discounts, returns and incentives, whether actual or estimated, based on the Company’s experience. This generally occurs when products are shipped to the customer in accordance with the sales agreement or purchase order, ownership and risk of loss pass to the customer, collectability is reasonably assured and pricing is fixed or determinable. The Company’s general shipping terms are F.O.B. shipping point, and title is transferred and revenue is recognized when the products are shipped to customers. When the Company sells F.O.B. destination point, title is transferred and the Company recognizes revenue on delivery or customer acceptance, depending on terms of the sales agreement. Service sales, representing after-market repair and maintenance, engineering activities and software license sales and services, though less than 1.0% net sales and not material to the condensed consolidated financial statements, are recognized as the services are completed or the software products and services are delivered. If actual costs of sales returns, incentives and discounts were to significantly exceed the recorded estimated allowance, the Company’s sales would be adversely affected. |
Net Earnings Per Common Share | Net Earnings Per Common Share Basic earnings per common share are computed based on the weighted-average number of common shares outstanding. Potentially dilutive securities, using the treasury stock method, are included in the diluted per-share calculations for all periods when the effect of their inclusion is dilutive. |
Accounting for Stock-Based Compensation | Accounting for Stock-Based Compensation The Company currently maintains an equity incentive plan, the Simpson Manufacturing Co., Inc. Amended and Restated 2011 Incentive Plan (the “2011 Plan”), which was originally adopted on April 26, 2011 and was subsequently amended and restated on April 21, 2015. The 2011 Plan amended and restated in their entirety, and incorporated and superseded, both the Simpson Manufacturing Co., Inc. 1994 Stock Option Plan (the “1994 Plan”), which was principally for the Company’s employees, and the Simpson Manufacturing Co., Inc. 1995 Independent Director Stock Option Plan (the “1995 Plan”), which was for its independent directors. Awards previously granted under the 1994 Plan or the 1995 Plan were not affected by the adoption of the 2011 Plan and continued to be governed by the 1994 Plan or the 1995 Plan, respectively. Under the 1994 Plan and the 1995 Plan, the Company could grant incentive stock options and non-qualified stock options, although the Company granted only non-qualified stock options thereunder. The Company generally granted stock options under each of the 1994 Plan and the 1995 Plan once every year. Stock options vest and expire according to terms established at the grant date. Stock options granted under the 1994 Plan typically vested evenly over the requisite service period of four years and have a term of seven years. Stock options granted under the 1995 Plan typically fully vested on the date of grant. Shares of common stock issued on exercise of stock options under the 1994 Plan and the 1995 Plan are registered under the Securities Act of 1933, as amended (the "Securities Act"). Under the 2011 Plan, the Company may grant incentive stock options, non-qualified stock options, restricted stock and restricted stock units ("RSUs"), although the Company currently intends to award primarily performance-based and/or time-based RSUs and to a lesser extent, if at all, non-qualified stock options (see "Note 9 Stock-Based Incentive Plans"). The Company does not currently intend to award incentive stock options or restricted stock. Under the 2011 Plan, no more than 16.3 million shares of the Company’s common stock in aggregate may be issued under the 2011 Plan, including shares already issued pursuant to prior awards and shares reserved for issuance on exercise of options previously granted under the 1994 Plan and the 1995 Plan. Shares of common stock to be issued pursuant to the 2011 Plan are registered under the Securities Act. Subject to certain adjustments, the following limits shall apply with respect to any awards under the 2011 Plan that are intended to qualify for the performance-based exception from the tax deductibility limitations of section 162(m) of the U.S. Internal Revenue Code of 1986, as amended from time to time: (i) the maximum aggregate number of shares of the Company’s common stock that may be subject to stock options granted in any calendar year to any one participant shall be 150,000 shares; and (ii) the maximum aggregate number of shares of the Company’s common stock issuable or deliverable under RSUs granted in any calendar year to any one participant shall be 100,000 shares. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The “Fair Value Measurements and Disclosures” topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) establishes a valuation hierarchy for disclosure of the inputs used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument; and Level 3 inputs are unobservable inputs based on the Company’s assumptions used to measure assets and liabilities at fair value. A financial asset’s or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. |
Income Taxes | Income Taxes The Company uses an estimated annual effective tax rate to measure the tax benefit or tax expense recognized in each interim period. |
Acquisitions | Acquisitions Under the business combinations topic of the FASB ASC 805, the Company accounts for acquisitions as business combinations and ascribes acquisition-date fair values to the acquired assets and assumed liabilities. Provisional fair value measurements are made at the time of the acquisitions. Adjustments to those measurements may be made in subsequent periods, up to one year from the acquisition date, as information necessary to complete the analysis is obtained. Fair value of intangible assets are generally based on Level 3 inputs. |
Recently Issued Accounting Standards | Recently Adopted Accounting Standards In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Compensation - Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"), which amends existing guidance related to accounting for employee share-based payments affecting the income tax consequences of awards, classification of awards as equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for fiscal years, and interim periods within those fiscal years beginning after December 15, 2016, with early adoption permitted. On January 1, 2017, the Company adopted ASU 2016-09. This new guidance requires all excess tax benefits and tax deficiencies be recognized as income tax expense or benefit in the income statement and classified as an operating activity in the statement of cash flows. The Company prospectively adopted this guidance with the tax impact of a $1.1 million tax benefit recognized in the consolidated income statements and classified it as an operating activity in the consolidated statement of cash flows. The guidance also requires a policy election either to estimate the number of awards that are expected to vest or to account for forfeitures whenever they occur. The Company did not change its policy for calculating accrual compensation costs by estimating the number of awards that are expected to vest. Therefore, when the Company adopted this guidance, there was no recognized cumulative effect adjustment to retained earnings. In addition, this guidance requires cash paid by an employer, when directly withholding shares for tax withholding purposes, to be classified in the statement of cash flows as a financing activity, which differs from the Company's previous method of classification of such cash payments as an operating activity. Accordingly, the Company applied this provision retrospectively and for the first quarter of 2017 and 2016 reclassified $5.1 million and $3.9 million, respectively, from operating activities to financing activities in the condensed consolidated statements of cash flows. In March 2016, the FASB issued Accounting Standards Update No. 2016-07, Simplifying the Transition to the Equity Method of Accounting ("ASU 2016-07"), which eliminates the requirement to apply the equity method of accounting retrospectively when a reporting entity obtains significant influence over a previously held investment. The amendments in ASU 2016-07 are effective for public companies for fiscal years beginning after December 15, 2016, including interim periods therein, with early adoption permitted. The new standard should be applied prospectively for investments that qualify for the equity method of accounting after the effective date. On January 1, 2017, the Company prospectively adopted ASU 2016-07. Adoption of ASU 2016-07 has had no material effect on the Company's consolidated financial statements and footnote disclosures. In January 2017, the FASB issued Accounting Standards Updated No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business ("ASU 2017-01"), which changes the definition of a business to assist entities with evaluating when a set of transferred assets and activities is a business. The new guidance clarifies that a business must also include at least one substantive process and narrows the definition of outputs by more closely aligning it with how outputs are described in ASC 606, Revenue from Contracts with Customers. ASU 2017-01 is effective for fiscal years, and interim periods within those fiscal years beginning after December 15, 2017, with early adoption permitted. On January 1, 2017, the Company prospectively adopted ASU 2017-01. Adoption of ASU 2017-01 has had no material effect on the Company's consolidated financial statements and footnote disclosures. All other issued and effective accounting standards during 2017 were determined to be not relevant or material to the Company. Recently Issued Accounting Standards Not Yet Adopted Other than the following, there have been no new developments to those recently issued accounting standards disclosed in the Company’s 2016 Annual Report on Form 10-K. In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"). ASU 2014-09 supersedes nearly all existing revenue recognition guidance under GAAP. The amendments provide a revenue recognition five-step model to be applied to all revenue contracts with customers. In 2016, the FASB issued final amendments to clarify the implementation guidance for principal versus agent considerations, identifying performance obligations and the accounting for licenses of intellectual property. ASU 2014-09 and its 2016 final amendments are effective for annual and interim periods beginning after December 15, 2017. The Company expects to adopt the new standard on January 1, 2018. The new standard also permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the modified retrospective method). The Company is currently in the process of determining its method of adoption, which depends in part upon the completion of the analysis on the impact this guidance will have on the Company's revenue arrangements. The Company expects to complete its analysis of the impact of the updated revenue-recognition guidance on the Company's revenue arrangements by October 2017. The Company’s approach includes performing a detailed review of key contracts representative of the Company’s products. In addition, comparing historical accounting policies and practices to the new standard on the Company’s revenue arrangements. Based on current information, and subject to future events and circumstances, the Company does not know whether the new revenue recognition standard will have a material impact on its financial statements upon adoption. In February 2016, the FASB issued Accounting Standards Update No. 2016-02, (Topic 842), Leases (“ASU 2016-02”). ASU 2016-02 core requirement is to recognize the assets and liabilities that arise from leases, including those leases classified as operating leases. The amendments require a lessee to recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term. The lessor accounting application is largely unchanged from that applied previously under GAAP. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. While the Company expects adoption to lead to a material increase in the assets and liabilities recorded on its condensed consolidated balance sheets, the Company is still evaluating the overall impact on its consolidated financial statements. In October 2016, the FASB issued Accounting Standards Update No. 2016-16, Income Taxes (Topic 740), Intra-Entity Transfers of Assets Other Than Inventory ("ASU 2016-16"), which requires companies to account for the income tax effects of intercompany sales and transfers of assets other than inventory when the transfer occurs. Current guidance requires companies to defer the income tax effects of intercompany transfers of assets until the asset has been sold to an outside party or otherwise recognized. The amendment is to be applied using a modified retrospective approach. ASU 2016-16 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. Based on current information and subject to future events and circumstances, the Company does not know whether ASU 2016-16 will have a material impact on its financial statements upon adoption. In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ("ASU 2017-04"), which eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge or Step 2 of the goodwill impairment analysis. Instead, an impairment charge will be recorded based on the excess of a reporting unit's carrying amount over its fair value using Step 1 of the goodwill impairment analysis. The standard is required to be adopted for annual and interim impairment tests performed after December 15, 2019. The amendment is to be applied prospectively. Early adoption is permitted for annual and interim goodwill impairment testing dates after January 1, 2017. Based on current information and subject to future events and circumstances, the Company does not know whether ASU 2017-04 will have a material impact on its financial statements upon adoption. |
Basis of Presentation (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of basic earnings per share ("EPS") to diluted EPS | The following is a reconciliation of basic earnings per common share to diluted earnings per share for the three months ended March 31, 2017 and 2016, respectively:
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Stock option and restricted stock unit activity of the entity | The following table represents the Company’s stock-based compensation activity for the three months ended March 31, 2017 and 2016, respectively:
The Company allocates stock-based compensation expenses among cost of sales, research and development and other engineering expense, selling expense, or general and administrative expense based on the job functions performed by the employees to whom the stock-based compensation is awarded. The assumptions used to calculate the fair value of stock-based compensation are evaluated and revised, as necessary, to reflect market conditions and the Company’s experience. The following table shows the expense related to the Company's stock-based compensation capitalized in inventory for the three months ended March 31, 2017 and 2016, respectively:
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Summary of financial instruments | As of December 31, 2016 and March 31, 2017, the Company’s investments consisted of only money market funds, and as of March 31, 2016, its investments consisted of only United States Treasury securities and money market funds, which are the Company’s primary financial instruments, maintained in cash equivalents and carried at cost, approximating fair value, based on Level 1 inputs. The balances of the Company's primary financial instruments at the dates indicated were as follows:
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Schedule of effective tax rates and income tax expense | The following table presents the Company’s effective tax rates and income tax expense for the three months ended March 31, 2017 and 2016, respectively:
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Schedule of business acquisitions | The following table represents the preliminary allocation of the purchase price to the estimated fair value of the assets acquired and liabilities assumed at the acquisition date of the Gbo Fastening Systems acquisition:
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Trade Accounts Receivable, Net (Tables) |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of trade accounts receivable, net | Trade accounts receivable at the dates indicated consisted of the following:
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Inventories (Tables) |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of carrying values of inventories | Inventories at the dates indicated consisted of the following:
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Property, Plant and Equipment, Net (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of property, plant and equipment | Property, plant and equipment, net, at the dates indicated consisted of the following:
|
Goodwill and Intangible Assets, Net (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of goodwill, by segment | Goodwill at the dates indicated was as follows:
|
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Schedule of net intangible assets, by segment | ntangible assets, net, at the dates indicated were as follows:
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Schedule of estimated future amortization of intangible assets | At March 31, 2017, estimated future amortization of definite-lived intangible assets was as follows:
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Changes in the carrying amount of goodwill and intangible assets | The changes in the carrying amount of goodwill and intangible assets for the three months ended March 31, 2017, were as follows:
|
Stock-Based Incentive Plans (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of unvested restricted stock unit activity | The following table summarizes changes to the Company’s unvested restricted stock units for the three months ended March 31, 2017:
|
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Non-Qualified Stock Options | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of stock option activity | The following table summarizes the changes to the Company’s outstanding non-qualified stock options for the three months ended March 31, 2017:
|
Segment Information (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of performance of reportable segments | The following tables illustrate certain measurements used by management to assess the performance as of or for the following periods:
* The sales to other segments are eliminated in consolidation.
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Schedule of net sales distributed by product group | the following table illustrates the distribution of the Company’s net sales by product group for the following periods:
|
Basis of Presentation - Revenue from External Customers (Details) |
3 Months Ended |
---|---|
Mar. 31, 2017 | |
Maximum | |
Revenue from External Customer [Line Items] | |
Service sales percentage of net sales, less than | 1.00% |
Basis of Presentation - Reconciliation of BEPS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
Dec. 31, 2016 |
|
Reconciliation of basic earnings per share ("EPS") to diluted EPS | |||
Net income available to common stockholders | $ 23,121 | $ 16,343 | $ 73,391 |
Basic weighted-average shares outstanding (in shares) | 47,616 | 48,297 | |
Dilutive effect of potential common stock equivalents — stock options and restricted stock units (in shares) | 290 | 153 | |
Diluted weighted-average shares outstanding (in shares) | 47,906 | 48,450 | |
Earnings per common share: | |||
Basic (in dollars per share) | $ 0.49 | $ 0.34 | |
Diluted (in dollars per share) | $ 0.48 | $ 0.34 | |
Potentially dilutive securities excluded from earnings per diluted share because their effect is anti-dilutive | 0 | 0 |
Basis of Presentation - Recently Adopted Accounting Standards (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Tax benefit | $ 1,100 | |
Cash paid on behalf of employees for shares withheld | $ 5,124 | $ 3,871 |
Trade Accounts Receivable, Net (Details) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
Mar. 31, 2016 |
---|---|---|---|
Receivables [Abstract] | |||
Trade accounts receivable | $ 153,542 | $ 116,368 | $ 139,198 |
Allowance for doubtful accounts | (1,284) | (895) | (918) |
Allowance for sales discounts and returns | (3,752) | (3,050) | (3,157) |
Trade accounts receivable, net | $ 148,506 | $ 112,423 | $ 135,123 |
Inventories (Details) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
Mar. 31, 2016 |
---|---|---|---|
Inventory Disclosure [Abstract] | |||
Raw materials | $ 90,545 | $ 86,524 | $ 82,056 |
In-process products | 26,010 | 20,902 | 20,827 |
Finished products | 139,716 | 124,848 | 107,904 |
Total inventories | $ 256,271 | $ 232,274 | $ 210,787 |
Property, Plant and Equipment, Net (Details) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
Mar. 31, 2016 |
---|---|---|---|
Property, Plant and Equipment | |||
Property, plant and equipment, gross | $ 479,264 | $ 470,420 | $ 449,020 |
Less accumulated depreciation and amortization | (279,607) | (273,302) | (264,398) |
Property, plant and equipment excluding capital projects in progress, net | 199,657 | 197,118 | 184,622 |
Capital projects in progress | 50,808 | 35,692 | 32,038 |
Property, plant and equipment, net | 250,465 | 232,810 | 216,660 |
Land | |||
Property, Plant and Equipment | |||
Property, plant and equipment, gross | 32,370 | 32,127 | 30,535 |
Buildings and site improvements | |||
Property, Plant and Equipment | |||
Property, plant and equipment, gross | 186,974 | 183,882 | 173,605 |
Leasehold improvements | |||
Property, Plant and Equipment | |||
Property, plant and equipment, gross | 5,515 | 5,550 | 5,616 |
Machinery, equipment, and software | |||
Property, Plant and Equipment | |||
Property, plant and equipment, gross | $ 254,405 | $ 248,861 | $ 239,264 |
Goodwill and Intangible Assets, Net, Goodwill (Details) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
Mar. 31, 2016 |
---|---|---|---|
Carrying amount of goodwill by reportable segment | |||
Goodwill | $ 135,113 | $ 124,479 | $ 125,614 |
North America | |||
Carrying amount of goodwill by reportable segment | |||
Goodwill | 95,574 | 85,488 | 86,038 |
Europe | |||
Carrying amount of goodwill by reportable segment | |||
Goodwill | 38,080 | 37,616 | 38,107 |
Asia/Pacific | |||
Carrying amount of goodwill by reportable segment | |||
Goodwill | $ 1,459 | $ 1,375 | $ 1,469 |
Goodwill and Intangible Assets, Net, Finite-Lived Intangible Assets (Details 2) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
Mar. 31, 2016 |
---|---|---|---|
Changes in gross carrying amount of finite-lived intangible assets | |||
Gross carrying amount | $ 61,972 | $ 51,442 | $ 57,597 |
Accumulated amortization | (30,259) | (28,578) | (30,878) |
Net carrying amount | 31,713 | 22,864 | 26,719 |
Estimated future amortization of intangible assets | |||
Remaining six months of 2016 | 4,658 | ||
2017 | 5,250 | ||
2018 | 5,102 | ||
2019 | 5,072 | ||
2020 | 4,592 | ||
2021 | 2,737 | ||
Thereafter | 3,686 | ||
Total | 31,097 | ||
North America | |||
Changes in gross carrying amount of finite-lived intangible assets | |||
Gross carrying amount | 33,862 | 23,562 | 27,490 |
Accumulated amortization | (14,815) | (13,811) | (15,743) |
Net carrying amount | 19,047 | 9,751 | 11,747 |
Europe | |||
Changes in gross carrying amount of finite-lived intangible assets | |||
Gross carrying amount | 28,110 | 27,880 | 30,107 |
Accumulated amortization | (15,444) | (14,767) | (15,135) |
Net carrying amount | $ 12,666 | $ 13,113 | $ 14,972 |
Goodwill and Intangible Assets, Net, Indefinite-lived intangibles (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2017 |
Jun. 30, 2016 |
Mar. 31, 2016 |
|
Indefinite-lived Intangible Assets [Line Items] | |||
Amortization of intangibles | $ 1,683 | $ 1,500 | |
Trade Names | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Indefinite-lived intangible assets | $ 600 | ||
In Process Research and Development | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets transferred | $ 1,500 |
Goodwill and Intangible Assets, Net (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Changes in the carrying amount of goodwill | ||
Balance at the beginning of the period | $ 124,479 | |
Foreign exchange | 568 | |
Balance at the end of the period | 135,113 | $ 125,614 |
Changes in the carrying amount of intangible assets | ||
Balance at the beginning of the period | 22,864 | |
Goodwill, Acquired During Period | 10,066 | |
Finite-lived Intangible Assets Acquired | 10,301 | |
Amortization | (1,683) | (1,500) |
Foreign exchange | 231 | |
Balance at the end of the period | $ 31,713 | $ 26,719 |
Investments (Details) $ in Thousands |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2017
USD ($)
|
Mar. 31, 2016
USD ($)
|
Dec. 31, 2016
USD ($)
|
Dec. 23, 2016
USD ($)
|
|
Equity Method Investment | ||||
Equity Method Investment, Ownership Percentage | 25.00% | |||
Equity investment | $ 2,607 | $ 0 | $ 2,500 | $ 2,500 |
Loss in equity method investment, before tax | $ 28 | $ 0 | ||
Foreign Currency Exchange Rate, Translation | 135,000.000 |
Stock-Based Incentive Plans - Stock Option Activity (Details) - Non-Qualified Stock Options - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2017 |
Dec. 31, 2016 |
|
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Exercisable at the start of the period (in shares) | 251 | |
Exercised (in shares) | (11) | |
Forfeited (in shares) | 0 | |
Exercisable at the end of the period (in shares) | 240 | 251 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Weighted-average exercise price at beginning of the period (in dollars per share) | $ 29.66 | |
Weighted-average exercise price at end of the period (in dollars per share) | $ 29.66 | $ 29.66 |
Weighted-average remaining contractual life | 9 months 18 days | 1 year 1 month 12 days |
Outstanding at the end of the period (in dollars) | $ 3,230 | $ 3,538 |
Closing price per share (in dollars per share) | $ 43.09 |
Segment Information (Details 2) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Net sales and long-lived assets by geographical area | ||
Net sales | $ 219,867 | $ 199,523 |
Wood construction products | ||
Net sales and long-lived assets by geographical area | ||
Net sales | 190,877 | 171,777 |
Concrete construction products | ||
Net sales and long-lived assets by geographical area | ||
Net sales | 28,817 | 27,745 |
Other | ||
Net sales and long-lived assets by geographical area | ||
Net sales | $ 173 | $ 1 |
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Thousands |
1 Months Ended | 3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Apr. 30, 2017 |
Jan. 31, 2017 |
Mar. 31, 2017 |
Mar. 31, 2016 |
Dec. 31, 2016 |
|
Subsequent Event [Line Items] | |||||
Cash dividends declared per common share (in dollars per share) | $ 0.18 | $ 0.16 | $ 0.54 | ||
Estimated total cash dividend | $ 8,584 | $ 7,729 | $ 25,801 | ||
Increase in cash dividends declared per common share (in dollars per share) | $ 0.03 | ||||
Percent increase in cash dividends declared per common share | 17.00% | ||||
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Cash dividends declared per common share (in dollars per share) | $ 0.21 | ||||
Estimated total cash dividend | $ 10,000 | ||||
Dividends payable, date to be paid | Jul. 27, 2017 | ||||
Dividends payable, date of record | Jul. 06, 2017 |
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