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 June 30, 2020

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)

(214) 880-3500

(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 July 29, 2020 was 116,701,510.

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 Six Months Ended June 30, 2020 and 2019	3
	Condensed Consolidated Balance Sheet (Unaudited) as of June 30, 2020 and December 31, 2019	4
	Condensed Consolidated Statement of Cash Flows (Unaudited) for the Six Months Ended June 30, 2020 and 2019	5
	Condensed Consolidated Statement of Changes in Stockholders’ Equity (Unaudited) for the Three and Six Months Ended June 30, 2020 and 2019	6
	Notes to Condensed Consolidated Financial Statements (Unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25
Item 4.	Controls and Procedures	25
	PART II — OTHER INFORMATION
Item 1.	Legal Proceedings	27
Item 1A.	Risk Factors	27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 3.	Defaults Upon Senior Securities	29
Item 4.	Mine Safety Disclosures	29
Item 5.	Other Information	29
Item 6.	Exhibits	30

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				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
	(Unaudited)
	(In thousands, except per share amounts)
Net sales	$	1,945,643	$	1,904,523	$	3,732,664	$	3,535,823
Cost of sales		1,428,311		1,387,367		2,749,919		2,576,692
Gross margin		517,332		517,156		982,745		959,131
Selling, general and administrative expenses		388,077		401,511		792,543		771,595
Income from operations		129,255		115,645		190,202		187,536
Interest expense, net		26,812		29,382		78,743		54,283
Income before income taxes		102,443		86,263		111,459		133,253
Income tax expense		23,519		19,659		23,768		30,941
Net income	$	78,924	$	66,604	$	87,691	$	102,312
Comprehensive income	$	78,924	$	66,604	$	87,691	$	102,312
Net income per share:
Basic	$	0.68	$	0.58	$	0.75	$	0.89
Diluted	$	0.67	$	0.57	$	0.75	$	0.88
Weighted average common shares:
Basic		116,634		115,757		116,446		115,592
Diluted		117,547		116,919		117,520		116,726

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

3

BUILDERS FIRSTSOURCE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEET

	June 30,		December 31,
	2020		2019
	(Unaudited)
	(In thousands, except per share amounts)
ASSETS
Current assets:
Cash and cash equivalents	$	385,461	$	14,096
Accounts receivable, less allowances of $16,834 and $13,492 at June 30, 2020 and December 31, 2019, respectively		719,684		614,946
Other receivables		45,164		77,447
Inventories, net		615,142		561,255
Other current assets		36,136		39,123
Total current assets		1,801,587		1,306,867
Property, plant and equipment, net		743,542		721,887
Operating lease right-of-use assets, net		286,354		292,684
Goodwill		777,283		769,022
Intangible assets, net		126,519		128,388
Deferred income taxes		7,693		8,417
Other assets, net		21,700		22,225
Total assets	$	3,764,678	$	3,249,490
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	554,394	$	436,823
Accrued liabilities		292,851		308,950
Current portion of operating lease liabilities		61,887		61,653
Current maturities of long-term debt		23,974		13,875
Total current liabilities		933,106		821,301
Noncurrent portion of operating lease liabilities		230,634		236,948
Long-term debt, net of current maturities, debt discount, and debt issuance costs		1,577,884		1,277,398
Deferred income taxes		38,169		36,645
Other long-term liabilities		68,951		52,245
Total liabilities		2,848,744		2,424,537
Commitments and contingencies (Note 10)
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; 116,701 and 116,052 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively		1,167		1,161
Additional paid-in capital		578,239		574,955
Retained earnings		336,528		248,837
Total stockholders' equity		915,934		824,953
Total liabilities and stockholders' equity	$	3,764,678	$	3,249,490
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

	Six Months Ended
	June 30,
	2020			2019
	(Unaudited) (In thousands)
Cash flows from operating activities:
Net income	$	87,691		$	102,312
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization		57,875			47,390
Amortization of debt issuance costs and debt discount		1,587			2,132
Loss on extinguishment of debt, net		5,349			1,498
Deferred income taxes		2,248			21,390
Stock compensation expense		6,720			6,038
Net gain on sale of assets and asset impairments		(188	)		(1,023	)
Changes in assets and liabilities, net of assets acquired and liabilities assumed:
Receivables		(69,991	)		(47,113	)
Inventories		(53,685	)		(20,631	)
Other current assets		2,987			7,271
Other assets and liabilities		39,452			1,057
Accounts payable		108,152			90,050
Accrued liabilities		(18,311	)		(31,586	)
Net cash provided by operating activities		169,886			178,785
Cash flows from investing activities:
Purchases of property, plant and equipment		(54,809	)		(45,392	)
Proceeds from sale of property, plant and equipment		1,451			4,620
Cash used for acquisitions		(15,893	)		—
Net cash used in investing activities		(69,251	)		(40,772	)
Cash flows from financing activities:
Borrowings under revolving credit facility		791,000			594,000
Repayments under revolving credit facility		(818,000	)		(700,000	)
Proceeds from issuance of notes		895,625			400,000
Repayments of long-term debt and other loans		(557,964	)		(423,743	)
Payments of debt extinguishment costs		(22,686	)		—
Payments of loan costs		(13,800	)		(7,278)
Exercise of stock options		708			1,883
Repurchase of common stock		(4,153	)		(2,450	)
Net cash provided by (used in) financing activities		270,730			(137,588	)
Net change in cash and cash equivalents		371,365			425
Cash and cash equivalents at beginning of the period		14,096			10,127
Cash and cash equivalents at end of the period	$	385,461		$	10,552
Supplemental disclosures of cash flow information:
Cash paid for interest	$	55,356		$	50,046
Cash paid for income taxes		335			2,797
Supplemental disclosures of non-cash activities:
Accrued purchases of property, plant and equipment	$	1,900		$	4,030
Acquisition of assets under operating lease obligations		25,960			35,847
Acquisition of assets under finance lease obligations		10,132			7,036

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
	Common Stock						in			Retained
	Shares			Amount			Capital			Earnings		Total
	(Unaudited)
	(In thousands)
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
Balance at December 31, 2019		116,052		$	1,161		$	574,955		$	248,837	$	824,953
Vesting of restricted stock units		579			6			(6	)		—		—
Stock compensation expense		—			—			3,254			—		3,254
Exercise of stock options		82			—			398			—		398
Shares withheld for restricted stock units vested		(168	)		(2	)		(3,832	)		—		(3,834	)
Net income		—			—			—			8,767		8,767
Balance at March 31, 2020		116,545		$	1,165		$	574,769		$	257,604	$	833,538
Vesting of restricted stock units		130			2			(2)			—		—
Stock compensation expense		—			—			3,466			—		3,466
Exercise of stock options		48			—			325			—		325
Shares withheld for restricted stock units vested		(22	)		—			(319	)		—		(319)
Net income		—			—			—			78,924		78,924
Balance at June 30, 2020		116,701		$	1,167		$	578,239		$	336,528	$	915,934

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, 2019 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, 2019 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, 2019 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.

Recent Accounting Pronouncements

In December 2019, the Financial Accounting Standards Board (“FASB”) issued an update to existing guidance under the Income Taxes topic of the FASB Accounting Standards Codification (“Codification”). This updated guidance simplifies the accounting for income taxes by removing certain exceptions to the general principles in the Income Taxes topic. This guidance is effective for public companies annual and interim periods beginning after December 15, 2020 with early adoption permitted. We are currently evaluating the impact of this update on our consolidated financial statements.

In June 2016, the FASB issued an update to existing guidance under the Investments topic of the Codification. This update introduced 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 record an allowance through earnings for expected credit losses upon initial recognition of the financial asset. We adopted the aspects of this guidance applicable to us on a modified retrospective basis as of January 1, 2020. The adoption of this guidance did not have a material impact on our consolidated financial statements.

2. Revenue

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Lumber & lumber sheet goods	$	622,158	$	601,487	$	1,174,639	$	1,119,176
Manufactured products		365,782		374,299		720,240		691,651
Windows, doors & millwork		404,054		391,049		795,370		744,439
Gypsum, roofing & insulation		125,789		138,388		236,641		259,307
Siding, metal & concrete products		200,575		191,289		369,460		341,207
Other building products & services		227,285		208,011		436,314		380,043
Net sales	$	1,945,643	$	1,904,523	$	3,732,664	$	3,535,823

7

Information regarding disaggregation of sales by segment is discussed in Note 11 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 June 30, 2020 or December 31, 2019. 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 $49.7 million and $38.6 million as of June 30, 2020 and December 31, 2019, 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 June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Numerator:
Net income	$	78,924	$	66,604	$	87,691	$	102,312
Denominator:
Weighted average shares outstanding, basic		116,634		115,757		116,446		115,592
Dilutive effect of options and RSUs		913		1,162		1,074		1,134
Weighted average shares outstanding, diluted		117,547		116,919		117,520		116,726
Net income per share:
Basic	$	0.68	$	0.58	$	0.75	$	0.89
Diluted	$	0.67	$	0.57	$	0.75	$	0.88
Antidilutive and contingent options and RSUs excluded from diluted EPS		651		325		434		659

8

4. Debt

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

	June 30, 2020			December 31, 2019
2023 facility (1)	$	—		$	27,000
2024 notes		—			503,923
2024 term loan (2)		52,000			52,000
2027 notes		777,500			475,000
2030 notes		550,000			—
Other finance obligations		219,264			221,726
Finance lease obligations		23,766			20,333
		1,622,530			1,299,982
Unamortized debt discount and debt issuance costs		(20,672	)		(8,709	)
		1,601,858			1,291,273
Less: current maturities of long-term debt		23,974			13,875
Long-term debt, net of current maturities	$	1,577,884		$	1,277,398

(1) The weighted average interest rate was 3.8% and 4.4% as of June 30, 2020 and December 31, 2019, respectively.

(2) The weighted average interest rate was 4.5% and 5.6% as of June 30, 2020 and December 31, 2019, respectively.

2020 Debt Transactions

During the six months ended June 30, 2020, the Company executed several debt transactions which are described in more detail below.  These transactions include: (i) private offering of $550.0 million in aggregate principal amount of 5.0% unsecured senior notes due 2030 (“2030 notes”), (ii) redemption of the remaining $503.9 million in outstanding aggregate principal amount of 5.625% senior secured notes due 2024 (“2024 notes”) and $47.5 million in aggregate principal amount of 6.75% senior secured notes due 2027 (“2027 notes”), (iii) private offering of $350.0 million in aggregate principal amount of 6.75% senior secured notes due 2027.  These transactions collectively have extended our debt maturity profile and strengthened our liquidity position.  

First Quarter 2020 Refinancing Transactions

In February 2020, the Company completed a private offering of $550.0 million in aggregate principal amount of 2030 notes at an issue price equal to 100% of par value. The net proceeds from the issuance of the 2030 notes were used together with a borrowing on our $900.0 million revolving credit facility (“2023 facility”) to redeem the remaining $503.9 million in outstanding aggregate principal amount of 2024 notes and $47.5 million in aggregate principal amount of 2027 notes and to pay related transaction fees and expenses.

In connection with the issuance of the 2030 notes, we incurred $8.3 million of various third-party fees and expenses. These costs have been recorded as a reduction to long-term debt and are being amortized over the contractual life of the 2030 notes using the effective interest method.

As the Company concluded that the redemption of the 2024 notes and 2027 notes were debt extinguishments, the Company recorded a loss on extinguishment of $28.0 million in interest expense in the first quarter of 2020. Of this loss, approximately $22.7 million was attributable to the payment of redemption premiums on the extinguished notes and $5.3 million was attributable to the write-off of unamortized debt issuance costs and debt premium.

Second Quarter 2020 Debt Transaction

In April 2020, the Company completed a private offering of an additional $350.0 million in aggregate principal amount of 2027 notes at an issue price of 98.75% of par value.  The net proceeds from the issuance of the 2027 notes were used to repay the funds drawn under the 2023 facility and to pay related transaction fees and expenses, with the remaining net proceeds used for general corporate purposes.

9

The Company recognized the $4.4 million in proceeds received below par value as a debt discount, which is recorded as a reduction to long-term debt.  In connection with the issuance of the 2027 notes, we incurred $5.5 million of various third-party fees and expenses, which have been recorded as a reduction to long-term debt.  These third-party costs and the debt discount will be amortized over the contractual life of the 2027 notes using the effective interest method.

Senior Unsecured Notes due 2030

As of June 30, 2020, we have $550.0 million outstanding in aggregate principal amount of the 2030 notes, which mature on March 1, 2030. Interest accrues on the 2030 notes at a rate of 5.00% per annum and is payable semi-annually on March 1 and September 1 of each year, commencing on September 1, 2020.

The terms of the 2030 notes are governed by the indenture, dated as of the February 11, 2020 (the “Indenture”), among the Company, the guarantors named therein and Wilmington Trust, National Association, as trustee. The 2030 notes, subject to certain exceptions, are guaranteed, jointly and severally, on a senior unsecured basis, by each of the Company’s direct and indirect wholly owned subsidiaries (the “Guarantors”) that guarantee its obligations under the Company’s 2023 Facility and existing senior secured term loan facility (the “2024 term loan,” and, together with the 2023 facility, the “Senior Secured Credit Facilities”) and the 2027 Secured Notes. Subject to certain exceptions, future subsidiaries that guarantee the Senior Secured Credit Facilities, the 2027 notes or certain other indebtedness will also guarantee the 2030 notes.

The 2030 notes constitute senior unsecured obligations of the Company and the Guarantors, pari passu in right of payment with all of the existing and future senior indebtedness of the Company, including indebtedness under the Senior Secured Credit Facilities and the 2027 notes. The 2030 notes are also (i) effectively subordinated to all existing and future secured indebtedness of the Company and the Guarantors (including under the Senior Secured Credit Facilities and the 2027 notes) to the extent of the value of the assets securing such indebtedness, (ii) senior to all of the future subordinated indebtedness of the Company and the Guarantors, and (iii) structurally subordinated to any existing and future indebtedness and other liabilities, including preferred stock, of the Company’s subsidiaries that do not guarantee the 2030 notes.

The Indenture contains restrictive covenants that limit the ability of the Company and its restricted subsidiaries to, among other things, incur additional debt or issue preferred stock, create liens, create restrictions on the Company’s subsidiaries’ ability to make payments to the Company, pay dividends and make other distributions in respect of the Company’s and its subsidiaries’ capital stock, make certain investments or certain other restricted payments, guarantee indebtedness, designate unrestricted subsidiaries, sell certain kinds of assets, enter into certain types of transactions with affiliates, and effect mergers and consolidations.

At any time prior to March 1, 2025, the Company may redeem the 2030 notes in whole or in part at a redemption price equal to 100% of the principal amount of the 2030 notes plus the “applicable premium” set forth in the Indenture. In addition, at any time prior to March 1, 2023, the Company may redeem up to 40% of the aggregate principal amount of the 2030 notes with the net cash proceeds of one or more equity offerings, as described in the Indenture, at a price equal to 105.0% of the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date.  At any time on or after March 1, 2025, the Company may redeem the 2030 notes at the redemption prices set forth in the Indenture, plus accrued and unpaid interest, if any, to the redemption date. If the Company experiences certain change of control events, holders of the 2030 notes may require it to repurchase all or part of their 2030 notes at 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the repurchase date.

We were not in violation of any covenants or restrictions imposed by any of our debt agreements at June 30, 2020.

Fair Value

As of June 30, 2020 and December 31, 2019, the Company does not have any financial instruments which are measured at fair value on a recurring basis. We have elected to report the value of our 2027 notes, 2030 notes, 2024 term loan and 2023 facility at amortized cost. The fair values of the 2027 notes, 2030 notes and the 2024 term loan at June 30, 2020 were approximately $797.5 million, $519.8 million and $50.2 million, respectively, and were determined using Level 2 inputs based on market prices.

5. Business Combination

On January 9, 2020, we acquired certain assets and operations of Bianchi & Company, Inc. (“Bianchi”) for $15.9 million in cash. Located in Charlotte, North Carolina, Bianchi is a supplier and installer of interior and exterior millwork. This acquisition was funded with a combination of cash on hand and borrowings under our 2023 facility.

10

This transaction was accounted for by the acquisition method, and accordingly the results of operations have been included in the Company’s consolidated financial statements from the acquisition date. The purchase price was allocated to the assets acquired and liabilities assumed based on estimated fair values at the acquisition date, with the excess of purchase price over the estimated fair value of the net assets acquired recorded as goodwill. The fair value of acquired intangible assets of $9.4 million, primarily related to customer relationships, was estimated by applying an income approach. That measure is based on significant Level 3 inputs not observable in the market. Key assumptions developed based on the Company’s historical experience, future projections and comparable market data include future cash flows, long-term growth rates, attrition rates and discount rates. Pro forma results of operations as well as net sales and income attributable to Bianchi are not presented as this acquisition did not have a material impact on our results of operations. We did not incur any significant acquisition related costs attributable to this transaction.

The following table summarizes the aggregate fair values of the assets acquired and liabilities assumed at the acquisition date (in thousands):

Accounts receivable	$	2,353
Inventory		202
Property, plant and equipment		74
Other assets		94
Goodwill (Note 6)		8,261
Intangible assets (Note 7)		9,440
Total assets acquired		20,424
Accounts payable and accrued liabilities		(4,531	)
Total liabilities assumed		(4,531	)
Total net assets acquired	$	15,893

6. Goodwill

The following table sets forth the changes in the carrying amount of goodwill by reportable segment for the six months ended June 30, 2020 (in thousands):

		Northeast			Southeast			South			West		Total
Balance as of December 31, 2019
Goodwill	$	97,102		$	60,691		$	343,919		$	311,946	$	813,658
Accumulated impairment losses		(494	)		(615	)		(43,527	)		—		(44,636	)
		96,608			60,076			300,392			311,946		769,022
Acquisitions		—			8,261			—			—		8,261
Balance as of June 30, 2020
Goodwill	$	97,102		$	68,952		$	343,919		$	311,946	$	821,919
Accumulated impairment losses		(494	)		(615	)		(43,527	)		—