Net Income (Loss) Per Share

6 Months Ended

Jun. 30, 2022

Basic net income (loss) per share is calculated by dividing net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration for common share equivalents or the conversion of Preferred Stock (as defined below). Common share equivalents consist of the incremental common shares issuable upon the exercise of stock options and vesting of restricted stock unit awards. Diluted net income (loss) per common share is calculated by dividing net income (loss) attributable to common stockholders by the fully diluted weighted-average number of common shares outstanding during the period.

In connection with the acquisition of Allied Building Products Corp. on January 2, 2018 (the “Allied Acquisition”), the Company completed the sale of 400,000 shares of Series A Cumulative Convertible Participating Preferred Stock, par value $0.01 per share (the “Preferred Stock”), with an aggregate liquidation preference of $400.0 million, at a purchase price of $1,000 per share, to CD&R Boulder Holdings, L.P. The Preferred Stock is convertible perpetual participating preferred stock of the Company, and conversion of the Preferred Stock into $0.01 par value shares of the Company’s common stock will be at a conversion price of $41.26 per share (or 9,694,619 shares of common stock). The Preferred Stock accumulates dividends at a rate of 6.0% per annum (payable quarterly in cash or in-kind, subject to certain conditions). The Preferred Stock is not mandatorily redeemable; therefore, it is classified as mezzanine equity in the Company’s condensed consolidated balance sheets. Holders of Preferred Stock participate in dividends on an as-converted basis when declared on common shares. As a result, Preferred Stock is classified as a participating security and thereby requires the allocation of income that would have otherwise been available to common stockholders when calculating net income (loss) per share.

Diluted net income (loss) per share is calculated by utilizing the most dilutive result of the if-converted and two-class methods. In both methods, net income (loss) attributable to common stockholders and the weighted-average common shares outstanding are adjusted to account for the impact of the assumed issuance of potential common shares that are dilutive, subject to dilution sequencing rules.

The following table presents the components and calculations of basic and diluted net income (loss) per share (in millions, except per share amounts; certain amounts may not recalculate due to rounding):


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Numerator:
Net income (loss) from continuing operations	$	174.5	$	79.8	$	230.3	$	69.3
Dividends on Preferred Stock	(6.0)		(6.0)		(12.0)		(12.0)
Undistributed income from continuing operations allocated to participating securities	(20.9)		(9.0)		(26.8)		(6.9)


Net income (loss) from continuing operations attributable to common stockholders – Basic and Diluted	147.6		64.8		191.5		50.4

Net income (loss) from discontinued operations – Basic	—		(3.3)		—		0.9
Undistributed income from discontinued operations allocated to participating securities	—		0.4		—		(0.2)
Net income (loss) from discontinued operations attributable to common stockholders – Basic and Diluted	—		(2.9)		—		0.7
Net income (loss) attributable to common stockholders – Basic and Diluted	$	147.6	$	61.9	$	191.5	$	51.1


Denominator:
Weighted-average common shares outstanding – Basic	68.1		69.9		69.1		69.8
Effect of common share equivalents	1.4		1.4		1.3		1.2

Weighted-average common shares outstanding – Diluted	69.5		71.3		70.4		71.0

Net income (loss) per share:
Basic – Continuing operations	$	2.17	$	0.93	$	2.77	$	0.72
Basic – Discontinued operations	—		(0.04)		—		0.01
Basic net income (loss) per share	$	2.17	$	0.89	$	2.77	$	0.73

Diluted – Continuing operations	$	2.12	$	0.91	$	2.72	$	0.71
Diluted – Discontinued operations	—		(0.04)		—		0.01
Diluted net income (loss) per share	$	2.12	$	0.87	$	2.72	$	0.72

The following table includes the number of shares that may be dilutive common shares in the future (in millions). These shares were not included in the computation of diluted net income (loss) per share because the effect was either anti-dilutive or the requisite performance conditions were not met:


	Three Months Ended June 30,		Six Months Ended June 30,
	2022	2021	2022	2021
Stock options	0.2	—	0.1	0.3

Preferred Stock	9.7	9.7	9.7	9.7
Equity forward contract	0.9	—	0.9	—