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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2019

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                 to                

Commission File Number 0-51357

 

BUILDERS FIRSTSOURCE, INC.

(Exact name of registrant as specified in its charter)

 

 

Delaware

 

52-2084569

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

 

 

2001 Bryan Street, Suite 1600

 

 

Dallas, Texas

 

75201

(Address of principal executive offices)

 

(Zip Code)

(214880-3500

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of Each Class

Trading Symbol(s)

Name of Each Exchange on Which Registered

Common stock, par value $0.01 per share

BLDR

NASDAQ Stock Market LLC

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

  

Accelerated filer

 

Non-accelerated filer

 

☐  

  

Small reporting company

 

Emerging growth company

 

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act).    Yes      No  

 

The number of shares of the issuer’s common stock, par value $0.01, outstanding as of October 30, 2019 was 115,786,770.

 

 

 

 


 

BUILDERS FIRSTSOURCE, INC.

Index to Form 10-Q

 

 

 

 

 

Page

 

 

PART I — FINANCIAL INFORMATION

 

 

Item 1.

 

Financial Statements

 

3

 

 

Condensed Consolidated Statement of Operations and Comprehensive Income (Unaudited) for the Three and Nine Months Ended September 30, 2019 and 2018

 

3

 

 

Condensed Consolidated Balance Sheet (Unaudited) as of September 30, 2019 and December 31, 2018

 

4

 

 

Condensed Consolidated Statement of Cash Flows (Unaudited) for the Nine Months Ended September 30, 2019 and 2018

 

5

 

 

Condensed Consolidated Statement of Changes in Stockholders’ Equity (Unaudited) for the Three and Nine Months Ended September 30, 2019 and 2018

 

6

 

 

Notes to Condensed Consolidated Financial Statements (Unaudited)

 

7

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

21

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

29

Item 4.

 

Controls and Procedures

 

29

 

 

PART II — OTHER INFORMATION

 

 

Item 1.

 

Legal Proceedings

 

31

Item 1A.

 

Risk Factors

 

31

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

31

Item 3.

 

Defaults Upon Senior Securities

 

32

Item 4.

 

Mine Safety Disclosures

 

32

Item 5.

 

Other Information

 

32

Item 6.

 

Exhibits

 

33

 

 

 

2


 

PART I  — FINANCIAL INFORMATION

 

Item 1. Financial Statements (unaudited)

BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

 

September 30,

 

 

September 30,

 

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

 

 

(Unaudited)

 

 

 

 

(In thousands, except per share amounts)

 

 

Sales

 

$

1,981,035

 

 

$

2,118,467

 

 

$

5,516,858

 

 

$

5,908,791

 

 

Cost of sales

 

 

1,439,893

 

 

 

1,595,686

 

 

 

4,016,585

 

 

 

4,478,630

 

 

Gross margin

 

 

541,142

 

 

 

522,781

 

 

 

1,500,273

 

 

 

1,430,161

 

 

Selling, general and administrative expenses

 

 

411,510

 

 

 

400,993

 

 

 

1,183,105

 

 

 

1,151,670

 

 

Income from operations

 

 

129,632

 

 

 

121,788

 

 

 

317,168

 

 

 

278,491

 

 

Interest expense, net

 

 

27,788

 

 

 

29,106

 

 

 

82,071

 

 

 

84,805

 

 

Income before income taxes

 

 

101,844

 

 

 

92,682

 

 

 

235,097

 

 

 

193,686

 

 

Income tax expense

 

 

23,714

 

 

 

19,354

 

 

 

54,655

 

 

 

40,516

 

 

Net income

 

$

78,130

 

 

$

73,328

 

 

$

180,442

 

 

$

153,170

 

 

Comprehensive income

 

$

78,130

 

 

$

73,328

 

 

$

180,442

 

 

$

153,170

 

 

Net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.68

 

 

$

0.64

 

 

$

1.56

 

 

$

1.34

 

 

Diluted

 

$

0.67

 

 

$

0.63

 

 

$

1.54

 

 

$

1.31

 

 

Weighted average common shares:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

115,732

 

 

 

114,707

 

 

 

115,639

 

 

 

114,480

 

 

Diluted

 

 

117,154

 

 

 

116,456

 

 

 

116,870

 

 

 

116,614

 

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

3


 

BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEET

 

 

 

September 30,

 

 

December 31,

 

 

 

2019

 

 

2018

 

 

 

(Unaudited)

 

 

 

(In thousands, except per share amounts)

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

43,271

 

 

$

10,127

 

Accounts receivable, less allowances of $14,280 and $13,054 at September 30, 2019 and

   December 31, 2018, respectively

 

 

721,134

 

 

 

654,170

 

Other receivables

 

 

49,526

 

 

 

68,637

 

Inventories, net

 

 

581,543

 

 

 

596,896

 

Other current assets

 

 

34,603

 

 

 

43,921

 

Total current assets

 

 

1,430,077

 

 

 

1,373,751

 

Property, plant and equipment, net

 

 

696,154

 

 

 

670,075

 

Operating lease right-of-use assets, net

 

 

286,971

 

 

 

 

Goodwill

 

 

754,765

 

 

 

740,411

 

Intangible assets, net

 

 

101,303

 

 

 

103,154

 

Deferred income taxes

 

 

5,055

 

 

 

22,766

 

Other assets, net

 

 

23,434

 

 

 

22,152

 

Total assets

 

$

3,297,759

 

 

$

2,932,309

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

499,360

 

 

$

423,168

 

Accrued liabilities

 

 

289,735

 

 

 

292,526

 

Current portion of operating lease liabilities

 

 

60,280

 

 

 

 

Current maturities of long-term debt

 

 

14,370

 

 

 

15,565

 

Total current liabilities

 

 

863,745

 

 

 

731,259

 

Noncurrent portion of operating lease liabilities

 

 

232,475

 

 

 

 

Long-term debt, net of current maturities, debt discount, premium and issuance costs

 

 

1,350,467

 

 

 

1,545,729

 

Deferred income taxes

 

 

18,836

 

 

 

 

Other long-term liabilities

 

 

53,235

 

 

 

58,983

 

Total liabilities

 

 

2,518,758

 

 

 

2,335,971

 

Commitments and contingencies (Note 12)

 

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

 

 

Preferred stock, $0.01 par value, 10,000 shares authorized; zero shares issued and

   outstanding

 

 

 

 

 

 

Common stock, $0.01 par value, 200,000 shares authorized; 115,767 and 115,078 shares

   issued and outstanding at September 30, 2019 and December 31, 2018, respectively

 

 

1,158

 

 

 

1,151

 

Additional paid-in capital

 

 

570,373

 

 

 

560,221

 

Retained earnings

 

 

207,470

 

 

 

34,966

 

Total stockholders' equity

 

 

779,001

 

 

 

596,338

 

Total liabilities and stockholders' equity

 

$

3,297,759

 

 

$

2,932,309

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 

4


 

BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

 

 

 

 

Nine Months Ended

 

 

 

September 30,

 

 

 

2019

 

 

2018

 

 

 

(Unaudited)

(In thousands)

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

180,442

 

 

$

153,170

 

Adjustments to reconcile net income to net cash from operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

71,771

 

 

 

72,691

 

Amortization of debt discount, premium and issuance costs

 

 

3,060

 

 

 

3,479

 

Loss on extinguishment of debt, net

 

 

4,654

 

 

 

 

Deferred income taxes

 

 

36,547

 

 

 

35,829

 

Stock compensation expense

 

 

9,380

 

 

 

9,929

 

Net gain on sale of assets and asset impairments

 

 

(1,502

)

 

 

(480

)

Changes in assets and liabilities, net of assets acquired and liabilities assumed:

 

 

 

 

 

 

 

 

Receivables

 

 

(41,083

)

 

 

(151,092

)

Inventories

 

 

22,263

 

 

 

(86,639

)

Other current assets

 

 

8,968

 

 

 

(1,786

)

Other assets and liabilities

 

 

1,756

 

 

 

1,442

 

Accounts payable

 

 

73,913

 

 

 

(12,792

)

Accrued liabilities

 

 

(9,905

)

 

 

(14,219

)

             Net cash provided by operating activities

 

 

360,264

 

 

 

9,532

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchases of property, plant and equipment

 

 

(77,937

)

 

 

(78,693

)

Proceeds from sale of property, plant and equipment

 

 

5,474

 

 

 

1,890

 

Cash used for acquisitions

 

 

(33,931

)

 

 

 

             Net cash used in investing activities

 

 

(106,394

)

 

 

(76,803

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Borrowings under revolving credit facility

 

 

885,000

 

 

 

1,243,000

 

Repayments under revolving credit facility

 

 

(1,064,000

)

 

 

(1,189,000

)

Proceeds from long-term debt and other loans

 

 

478,375

 

 

 

3,818

 

Repayments of long-term debt and other loans

 

 

(502,062

)

 

 

(11,173

)

Payments of debt extinguishment costs

 

 

(2,301

)

 

 

 

Payments of  loan costs

 

 

(8,566

)

 

 

 

Exercise of stock options

 

 

3,220

 

 

 

2,394

 

Repurchase of common stock

 

 

(10,392

)

 

 

(4,855

)

             Net cash provided by (used in) financing activities

 

 

(220,726

)

 

 

44,184

 

Net change in cash and cash equivalents

 

 

33,144

 

 

 

(23,087

)

Cash and cash equivalents at beginning of the period

 

 

10,127

 

 

 

57,533

 

Cash and cash equivalents at end of the period

 

$

43,271

 

 

$

34,446

 

 

Supplemental disclosure of non-cash activities

Purchases of property, plant and equipment included in accounts payable were $2.1 million and $2.5 million for the nine months ended September 30, 2019 and 2018, respectively.

The Company purchased equipment which was financed through finance lease obligations of $11.7 million and capital lease obligations of $9.0 million in the nine months ended September 30, 2019 and 2018, respectively.

The accompanying notes are an integral part of these condensed consolidated financial statements.

5


 

BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

Additional Paid

 

 

Retained

Earnings

 

 

 

 

 

 

Common Stock

 

 

in

 

 

(Accumulated

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit)

 

 

Total

 

 

 

(Unaudited)

 

 

 

(In thousands)

 

Balance at December 31, 2017

 

 

113,572

 

 

$

1,136

 

 

$

546,766

 

 

$

(171,693

)

 

$

376,209

 

Vesting of restricted stock units

 

 

766

 

 

 

7

 

 

 

(7

)

 

 

 

 

 

 

Stock compensation expense

 

 

 

 

 

 

 

 

2,890

 

 

 

 

 

 

2,890

 

Exercise of stock options

 

 

517

 

 

 

5

 

 

 

2,036

 

 

 

 

 

 

2,041

 

Shares withheld for restricted stock units vested

 

 

(236

)

 

 

(2

)

 

 

(4,853

)

 

 

 

 

 

(4,855

)

Cumulative effect adjustment

 

 

 

 

 

 

 

 

 

 

 

1,468

 

 

 

1,468

 

Net income

 

 

 

 

 

 

 

 

 

 

 

23,220

 

 

 

23,220

 

Balance at March 31, 2018

 

 

114,619

 

 

 

1,146

 

 

 

546,832

 

 

 

(147,005

)

 

 

400,973

 

Vesting of restricted stock units

 

 

6

 

 

 

1

 

 

 

(1

)

 

 

 

 

 

 

Stock compensation expense

 

 

 

 

 

 

 

 

3,538

 

 

 

 

 

 

3,538

 

Exercise of stock options

 

 

46

 

 

 

 

 

 

338

 

 

 

 

 

 

338

 

Net income

 

 

 

 

 

 

 

 

 

 

 

56,622

 

 

 

56,622

 

Balance at June 30, 2018

 

 

114,671

 

 

$

1,147

 

 

$

550,707

 

 

$

(90,383

)

 

$

461,471

 

Vesting of restricted stock units

 

 

49

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock compensation expense

 

 

 

 

 

 

 

 

3,501

 

 

 

 

 

 

3,501

 

Exercise of stock options

 

 

5

 

 

 

 

 

 

15

 

 

 

 

 

 

15

 

Net income

 

 

 

 

 

 

 

 

 

 

 

73,328

 

 

 

73,328

 

Balance at September 30, 2018

 

 

114,725

 

 

$

1,147

 

 

$

554,223

 

 

$

(17,055

)

 

$

538,315

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2018

 

 

115,078

 

 

$

1,151

 

 

$

560,221

 

 

$

34,966

 

 

$

596,338

 

Vesting of restricted stock units

 

 

662

 

 

 

7

 

 

 

(7

)

 

 

 

 

 

 

Stock compensation expense

 

 

 

 

 

 

 

 

2,659

 

 

 

 

 

 

2,659

 

Exercise of stock options

 

 

59

 

 

 

 

 

 

216

 

 

 

 

 

 

216

 

Shares withheld for restricted stock units vested

 

 

(196

)

 

 

(2

)

 

 

(2,448

)

 

 

 

 

 

(2,450

)

Net income

 

 

 

 

 

 

 

 

 

 

 

35,708

 

 

 

35,708

 

Balance at March 31, 2019

 

 

115,603

 

 

 

1,156

 

 

 

560,641

 

 

 

70,674

 

 

 

632,471

 

Vesting of restricted stock units

 

 

11

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock compensation expense

 

 

 

 

 

 

 

 

3,379

 

 

 

 

 

 

3,379

 

Exercise of stock options

 

 

266

 

 

 

3

 

 

 

1,674

 

 

 

 

 

 

1,677

 

Net income

 

 

 

 

 

 

 

 

 

 

 

66,604

 

 

 

66,604

 

Balance at June 30, 2019

 

 

115,880

 

 

$

1,159

 

 

$

565,694

 

 

$

137,278

 

 

$

704,131

 

Vesting of restricted stock units

 

 

59

 

 

 

 

 

 

 

 

 

 

 

 

 

Repurchase of common stock (1)

 

 

(460

)

 

 

(4

)

 

 

 

 

 

(7,938

)

 

 

(7,942

)

Stock compensation expense

 

 

 

 

 

 

 

 

3,342

 

 

 

 

 

 

3,342

 

Exercise of stock options

 

 

288

 

 

 

3

 

 

 

1,337

 

 

 

 

 

 

1,340

 

Net income

 

 

 

 

 

 

 

 

 

 

 

78,130

 

 

 

78,130

 

Balance at September 30, 2019

 

 

115,767

 

 

$

1,158

 

 

$

570,373

 

 

$

207,470

 

 

$

779,001

 

 

(1) During the three and nine months ended September 30, 2019 we repurchased and retired 460,000 shares of our common stock at an average price of $17.24 per share for $7.9 million pursuant to the repurchase program authorized by our board of directors in February 2019. The primary purpose of the repurchase program is to offset dilution from employee stock awards.

 

The accompanying notes are an integral part of these consolidated financial statements.

6


 

BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

 

1. Basis of Presentation

Builders FirstSource, Inc., a Delaware corporation formed in 1998, is a leading supplier and manufacturer of building materials, manufactured components and construction services to professional homebuilders, sub-contractors, remodelers and consumers.  The Company operates approximately 400 locations in 40 states across the United States. In this quarterly report, references to the “Company,” “we,” “our,” “ours” or “us” refer to Builders FirstSource, Inc. and its consolidated subsidiaries unless otherwise stated or the context otherwise requires.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all recurring adjustments and normal accruals necessary for a fair statement of the Company’s financial position, results of operations and cash flows for the dates and periods presented. Results for interim periods are not necessarily indicative of the results to be expected during the remainder of the current year or for any future period. Intercompany transactions are eliminated in consolidation.

The condensed consolidated balance sheet as of December 31, 2018 is derived from the audited consolidated financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. This condensed consolidated balance sheet as of December 31, 2018 and the unaudited condensed consolidated financial statements included herein should be read in conjunction with the more detailed audited consolidated financial statements for the year ended December 31, 2018 included in our most recent annual report on Form 10-K. Accounting policies used in the preparation of these unaudited condensed consolidated financial statements are consistent with the accounting policies described in the Notes to Consolidated Financial Statements included in our Form 10-K, except as noted below relating to the adoption of updated guidance under the Leases topic of the Accounting Standards Codification (“Codification”).

Recent Accounting Pronouncements

In June 2016, the FASB issued an update to existing guidance under the Investments topic of the Codification. This update introduces a new impairment model for financial assets, known as the current expected credit losses (“CECL”) model that is based on expected losses rather than incurred losses. The CECL model requires an entity to estimate credit losses on financial assets, including trade accounts receivable, based on historical information, current information and reasonable and supportable forecasts. Under this guidance companies will record an allowance through earnings for expected credit losses upon initial recognition of the financial asset. The aspects of this guidance applicable to us will be required to be adopted on a modified retrospective basis. This update is effective for public companies for annual and interim periods beginning after December 15, 2019, with early adoption permitted for annual and interim periods beginning after December 15, 2018.  While we are still evaluating the impact of this guidance on our financial statements, we do not currently expect it to have a material impact.

In February 2016, the FASB issued an update to the existing guidance under the Leases topic of the Codification. Under the new guidance, lessees are now required to recognize the following for all leases, with the exception of short-term leases, at the commencement date: (1) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term.

We adopted this guidance on January 1, 2019 by applying the provisions of this guidance on a modified retrospective basis as of the effective date. As such, comparative periods have not been restated and the disclosures required under the new standard have not been provided for periods prior to January 1, 2019. We elected the package of practical expedients whereby we were not required to: i) reassess whether any expired or existing contracts are or contain leases, ii) reassess the lease classification of existing leases and iii) reassess initial direct costs for any existing leases. We did not elect the hindsight practical expedient or the practical expedient related to land easements. We have assessed and updated our business processes, systems and controls to ensure compliance with the recognition and disclosure requirements of the new standard.

Adoption of the new standard resulted in the recording of right-of-use assets and lease liabilities of $269.7 million and $267.5 million, respectively, as of January 1, 2019 to recognize operating leases, primarily related to real estate and rolling stock, which were not recognized on our balance sheet under previous guidance. Further, the adoption of this guidance had no impact to our remaining other finance obligations as they continue to fail to meet the sale-leaseback requirements of the new standard. The adoption of this guidance did not have a material impact on our condensed consolidated statement of operations and comprehensive income or on our condensed consolidated statement of cash flows as our leases retained their classifications as determined under previous guidance.

7


 

2. Revenue

The following table disaggregates our sales by product category (in thousands):

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Lumber & lumber sheet goods

 

$

605,494

 

 

$

818,693

 

 

$

1,724,670

 

 

$

2,273,761

 

Manufactured products

 

 

401,245

 

 

 

385,894

 

 

 

1,092,896

 

 

 

1,050,963

 

Windows, doors & millwork

 

 

407,397

 

 

 

372,453

 

 

 

1,151,836

 

 

 

1,080,120

 

Gypsum, roofing & insulation

 

 

149,676

 

 

 

146,648

 

 

 

408,983

 

 

 

400,797

 

Siding, metal & concrete products

 

 

201,068

 

 

 

196,591

 

 

 

542,275

 

 

 

528,290

 

Other building products & services

 

 

216,155

 

 

 

198,188

 

 

 

596,198

 

 

 

574,860

 

Net sales

 

$

1,981,035

 

 

$

2,118,467

 

 

$

5,516,858

 

 

$

5,908,791

 

 

Information regarding disaggregation of sales by segment is discussed in Note 13 to the condensed consolidated financial statements. Sales related to contracts with service elements represents less than 10% of the Company’s net sales for each period presented.

The timing of revenue recognition, billings and cash collections results in accounts receivable, unbilled receivables, contract assets and contract liabilities. Contract asset balances were not significant as of September 30, 2019 or December 31, 2018. Contract liabilities consist of deferred revenue and customer advances and deposits. Contract liability balances are included in accrued liabilities on our consolidated balance sheet and were $48.3 million and $42.1 million as of September 30, 2019 and December 31, 2018, respectively.

 

3. Net Income per Common Share

Net income per common share (“EPS”) is calculated in accordance with the Earnings per Share topic of the Codification, which requires the presentation of basic and diluted EPS. Basic EPS is computed using the weighted average number of common shares outstanding during the period. Diluted EPS is computed using the weighted average number of common shares outstanding during the period, plus the dilutive effect of potential common shares.

The table below presents the calculation of basic and diluted EPS (in thousands, except per share amounts):  

 

 

Three Months Ended

September 30,

 

 

Nine Months Ended

September 30,

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Numerator:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

$

78,130

 

 

$

73,328

 

 

$

180,442

 

 

$

153,170

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Denominator:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding, basic

 

115,732

 

 

 

114,707

 

 

 

115,639

 

 

 

114,480

 

Dilutive effect of options and RSUs

 

1,422

 

 

 

1,749

 

 

 

1,231

 

 

 

2,134

 

Weighted average shares outstanding, diluted

 

117,154

 

 

 

116,456

 

 

 

116,870

 

 

 

116,614

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

0.68

 

 

$

0.64

 

 

$

1.56

 

 

$

1.34

 

Diluted

$

0.67

 

 

$

0.63

 

 

$

1.54

 

 

$

1.31

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Antidilutive and contingent options and RSUs excluded

   from diluted EPS

 

151

 

 

 

1,035

 

 

 

488

 

 

 

578

 

 

 

8


 

4. Debt

Long-term debt consisted of the following (in thousands):

 

 

 

September 30,

 

 

December 31,

 

 

 

2019

 

 

2018

 

2023 facility (1)

 

$

 

 

$

179,000

 

2024 notes

 

 

503,923

 

 

 

696,361

 

2024 term loan (2)

 

 

157,075

 

 

 

458,250

 

2027 notes

 

 

475,000

 

 

 

 

Other finance obligations (Note 5)

 

 

222,606

 

 

 

227,071

 

Finance lease obligations (Note 5)

 

 

18,915

 

 

 

16,445

 

d

 

 

1,377,519

 

 

 

1,577,127

 

Unamortized debt discount/premium and debt issuance costs

 

 

(12,682