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Impairment of BMHC ERP System Impairment of BMHC ERP System
6 Months Ended
Jun. 30, 2017
Property, Plant and Equipment [Abstract]  
Impairment of BMHC ERP System
Impairment of BMHC ERP System
During 2013, Building Materials Holding Corporation (“BMHC” or “Legacy BMHC”) selected a new third-party software vendor for its planned Enterprise Resource Planning (“New ERP”) system and began incurring costs related to design, development and implementation of the New ERP. BMHC also began paying an annual licensing fee. During March 2016, the Company decided to integrate all operations under the Enterprise Resource Planning system utilized by Stock Building Supply Holdings, Inc. (“SBS” and the “Legacy SBS ERP system”) and to discontinue use of the New ERP. In connection with this decision, the Company recorded asset impairment charges of approximately $11.9 million in its unaudited condensed consolidated statement of operations for the six months ended June 30, 2016 related to capitalized software development costs for New ERP functionality that the Company had intended to implement in future periods. These costs had previously been recorded as construction-in-progress within property and equipment on the condensed consolidated balance sheets.

The Company continues to be obligated under non-cancellable license and service contracts related to the New ERP. During June 2017, the Company determined that it had ceased receiving economic benefit from these contracts. In accordance with ASC 420, Exit or Disposal Cost Obligations, as of the cease use date, the Company recognized approximately $2.8 million of expense within merger and integration costs in its unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2017, consisting of the recognition of a liability of $2.1 million within accrued expenses and other liabilities on the unaudited condensed consolidated balance sheets for future contractual payments and the acceleration of expense recognition of unamortized prepaid costs of $0.7 million.