10-Q

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, 2018

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: 001-36307

Installed Building Products, Inc.

(Exact name of registrant as specified in its charter)

Delaware	45-3707650
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
495 South High Street, Suite 50 Columbus, Ohio	43215
(Address of principal executive offices)	( Zip Code)

(614) 221-3399

(Registrant’s telephone number, including area code)

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 a 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 definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller 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 in Rule 12b–2 of the Exchange Act).    Yes  ☐    No  ☒

On October 26, 2018, the registrant had 31,224,974 shares of common stock, par value $0.01 per share, outstanding.

Table of Contents

PART I – FINANCIAL INFORMATION	1
Item 1. Financial Statements	1
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3. Quantitative and Qualitative Disclosures About Market Risk	34
Item 4. Controls and Procedures	35
PART II – OTHER INFORMATION	35
Item 1. Legal Proceedings	35
Item 1A. Risk Factors	35
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 3. Defaults Upon Senior Securities	36
Item 4. Mine Safety Disclosures	36
Item 5. Other Information	36
Item 6. Exhibits	36
SIGNATURES	37

i

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

INSTALLED BUILDING PRODUCTS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in thousands, except share and per share amounts)

	September 30,			December 31,
	2018			2017
ASSETS
Current assets
Cash and cash equivalents	$	139,089		$	62,510
Investments		15,358			30,053
Accounts receivable (less allowance for doubtful accounts of $5,405 and $4,805 at September 30, 2018 and December 31, 2017, respectively)		219,444			180,725
Inventories		51,491			48,346
Other current assets		32,836			33,308
Total current assets		458,218			354,942
Property and equipment, net		85,505			81,075
Non-current assets
Goodwill		167,738			155,466
Intangibles, net		139,709			137,991
Other non-current assets		11,936			9,272
Total non-current assets		319,383			302,729
Total assets	$	863,106		$	738,746
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Current maturities of long-term debt	$	22,481		$	16,650
Current maturities of capital lease obligations		4,954			5,666
Accounts payable		94,781			87,425
Accrued compensation		25,370			25,399
Other current liabilities		29,510			24,666
Total current liabilities		177,096			159,806
Long-term debt		433,752			330,927
Capital lease obligations, less current maturities		3,870			6,479
Deferred income taxes		7,758			6,444
Other long-term liabilities		26,279			24,562
Total liabilities		648,755			528,218
Commitments and contingencies (Note 13)
Stockholders’ equity
Preferred stock; $0.01 par value: 5,000,000 authorized and 0 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively		—			—
Common stock; $0.01 par value: 100,000,000 authorized, 32,723,972 and 32,524,934 issued and 31,224,974 and 31,862,146 shares outstanding at September 30, 2018 and December 31, 2017, respectively		327			325
Additional paid in capital		180,106			174,043
Retained earnings		88,736			48,434
Treasury stock; at cost: 1,498,998 and 662,788 shares at September 30, 2018 and December 31, 2017, respectively		(57,890	)		(12,781	)
Accumulated other comprehensive income		3,072			507
Total stockholders’ equity		214,351			210,528
Total liabilities and stockholders’ equity	$	863,106		$	738,746

See accompanying notes to consolidated financial statements

1

INSTALLED BUILDING PRODUCTS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE

INCOME (UNAUDITED)

(in thousands, except share and per share amounts)

	Three months ended September 30,				Nine months ended September 30,
	2018		2017		2018		2017
Net revenue	$	348,999	$	295,193	$	983,311	$	833,058
Cost of sales		251,665		209,612		710,358		590,377
Gross profit		97,334		85,581		272,953		242,681
Operating expenses
Selling		17,434		14,865		49,300		42,541
Administrative		48,337		41,657		137,511		122,679
Amortization		5,228		6,824		19,678		19,790
Operating income		26,335		22,235		66,464		57,671
Other expense
Interest expense, net		5,282		4,421		15,013		11,456
Other		132		83		417		366
Income before income taxes		20,921		17,731		51,034		45,849
Income tax provision		5,358		5,721		12,762		15,502
Net income	$	15,563	$	12,010	$	38,272	$	30,347
Other comprehensive income (loss), net of tax:
Unrealized gain (loss) on cash flow hedge, net of tax (provision)/benefit of ($278) and ($21) for the three months ended September 30, 2018 and 2017, respectively, and ($822) and $30 for the nine months ended September 30, 2018 and 2017, respectively		818		32		2,453		(45	)
Comprehensive income	$	16,381	$	12,042	$	40,725	$	30,302
Basic net income per share	$	0.50	$	0.38	$	1.22	$	0.96
Diluted net income per share	$	0.50	$	0.38	$	1.21	$	0.96
Weighted average shares outstanding:
Basic		31,229,086		31,659,503		31,373,871		31,632,400
Diluted		31,312,756		31,766,881		31,512,104		31,712,515

See accompanying notes to consolidated financial statements

2

INSTALLED BUILDING PRODUCTS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)

(in thousands, except share amounts)

					Additional												Accumulated Other
	Common Stock				Paid In			Retained			Treasury Stock						Comprehensive			Stockholders’
	Shares		Amount		Capital			Earnings			Shares			Amount			Loss			Equity
BALANCE - January 1, 2017		32,135,176	$	321	$	158,581		$	7,294			(650,402	)	$	(12,219	)	$	—		$	153,977
Net income									30,347												30,347
Purchase of remaining interest in subsidiary						(1,890	)														(1,890	)
Issuance of common stock for acquisition		282,577		3		10,856															10,859
Issuance of common stock awards to employees		101,241		1		(1	)														—
Surrender of common stock awards by employees												(11,971	)		(550	)					(550	)
Share-based compensation expense						4,360															4,360
Share-based compensation issued to directors		5,940				300															300
Other comprehensive loss, net of tax																		(45	)		(45	)
BALANCE - September 30, 2017		32,524,934	$	325	$	172,206		$	37,641			(662,373	)	$	(12,769	)	$	(45	)	$	197,358
					Additional												Accumulated Other
	Common Stock				Paid In			Retained			Treasury Stock						Comprehensive			Stockholders’
	Shares		Amount		Capital			Earnings			Shares			Amount			Income			Equity
BALANCE - January 1, 2018		32,524,934	$	325	$	174,043		$	48,434			(662,788	)	$	(12,781	)	$	507		$	210,528
Net income									38,272												38,272
Cumulative effect of accounting changes, net of tax									2,030	1								112			2,142
Issuance of common stock awards to employees		194,093		2		(2	)														—
Surrender of common stock awards by employees												(42,799	)		(2,282	)					(2,282	)
Share-based compensation expense						5,965															5,965
Share-based compensation issued to directors		4,945				100															100
Common stock repurchase												(793,411	)		(42,827	)					(42,827	)
Other comprehensive income, net of tax																		2,453			2,453
BALANCE - September 30, 2018		32,723,972	$	327	$	180,106		$	88,736			(1,498,998	)	$	(57,890	)	$	3,072		$	214,351

¹  See Note 3, Revenue Recognition, regarding the change in balance.

See accompanying notes to consolidated financial statements

3

INSTALLED BUILDING PRODUCTS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in thousands)

	Nine months ended September 30,
	2018			2017
Cash flows from operating activities
Net income	$	38,272		$	30,347
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization of property and equipment		24,567			20,732
Amortization of intangibles		19,678			19,790
Amortization of deferred financing costs and debt discount		883			768
Provision for doubtful accounts		2,219			2,208
Write-off of debt issuance costs		1,164			1,201
Gain on sale of property and equipment		(551	)		(329	)
Noncash stock compensation		6,089			4,750
Changes in assets and liabilities, excluding effects of acquisitions
Accounts receivable		(35,953	)		(24,636	)
Inventories		(6,799	)		68
Other assets		(801	)		695
Accounts payable		7,523			2,665
Income taxes receivable / payable		10,542			(10,167	)
Other liabilities		2,016			5,249
Net cash provided by operating activities		68,849			53,341
Cash flows from investing activities
Purchases of investments		(22,818	)		(25,195	)
Maturities of short term investments		37,500			—
Purchases of property and equipment		(27,051	)		(22,947	)
Acquisitions of businesses, net of cash acquired of $0 and $247, respectively		(34,682	)		(130,994	)
Proceeds from sale of property and equipment		1,106			682
Other		(1,590	)		(1,845	)
Net cash used in investing activities		(47,535	)		(180,299	)
Cash flows from financing activities
Proceeds from term loan under credit agreement applicable to respective period (Note 6)		100,000			300,000
Payments on term loan under credit agreement applicable to respective period (Note 6)		(750	)		(97,000	)
Proceeds from delayed draw term loan under credit agreement applicable to respective period (Note 6)		—			112,500
Payments on delayed draw term loan under credit agreement applicable to respective period (Note 6)		—			(125,000	)
Proceeds from vehicle and equipment notes payable		20,657			15,817
Debt issuance costs		(1,992	)		(8,175	)
Principal payments on long-term debt		(10,324	)		(7,201	)
Principal payments on capital lease obligations		(4,316	)		(5,583	)
Acquisition-related obligations		(2,901	)		(3,434	)
Repurchase of common stock		(42,827	)		—
Surrender of common stock awards by employees		(2,282	)		(550	)
Purchase of remaining interest in subsidiary		—			(1,890	)
Net cash provided by financing activities		55,265			179,484
Net change in cash and cash equivalents		76,579			52,526
Cash and cash equivalents at beginning of period		62,510			14,482
Cash and cash equivalents at end of period	$	139,089		$	67,008
Supplemental disclosures of cash flow information
Net cash paid during the period for:
Interest	$	14,110		$	9,733
Income taxes, net of refunds		1,902			26,292
Supplemental disclosure of noncash investing and financing activities
Common stock issued for acquisition of business		—			10,859
Vehicles capitalized under capital leases and related lease obligations		1,034			4,073
Seller obligations in connection with acquisition of businesses		5,420			3,759
Unpaid purchases of property and equipment included in accounts payable		615			1,108

See accompanying notes to consolidated financial statements

4

INSTALLED BUILDING PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1 – ORGANIZATION

Installed Building Products, Inc. (“IBP”), a Delaware corporation formed on October 28, 2011, and its wholly-owned subsidiaries (collectively referred to as the “Company” and “we,” “us” and “our”) primarily install insulation, waterproofing, fire-stopping, fireproofing, garage doors, rain gutters, shower doors, closet shelving and mirrors and other products for residential and commercial builders located in the continental United States. The Company operates in over 125 locations and its corporate office is located in Columbus, Ohio.

We have one operating segment and a single reportable segment. We offer our portfolio of services for new and existing single-family and multi-family residential and commercial building projects from our national network of branch locations. Each of our branches has the capacity to serve all of our end markets. See Note 3, Revenue Recognition, for information on our revenues by product and end market.

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

The accompanying Condensed Consolidated Financial Statements include all of our wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated.

The information furnished in the Condensed Consolidated Financial Statements includes normal recurring adjustments and reflects all adjustments which are, in the opinion of management, necessary for a fair presentation of the results of operations and statements of financial position for the interim periods presented. Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (the “SEC”) have been omitted pursuant to such rules and regulations. We believe that the disclosures are adequate to prevent the information presented from being misleading when read in conjunction with our audited consolidated financial statements and the notes thereto included in Part II, Item 8, Financial Statements and Supplementary Data, of our Annual Report on Form 10-K for the fiscal year ended December 31, 2017 (the “2017 Form 10-K”), as filed with the SEC on February 28, 2018. The December 31, 2017 condensed consolidated balance sheet data herein was derived from the audited consolidated financial statements but does not include all disclosures required by U.S. GAAP.

Our interim operating results for the three and nine months ended September 30, 2018 are not necessarily indicative of the results to be expected in future operating quarters. See Item 1A, Risk Factors, in our 2017 Form 10-K for additional information regarding risk factors that may impact our results.

Note 2 to the audited consolidated financial statements in our 2017 Form 10-K describes the significant accounting policies and estimates used in preparation of the audited consolidated financial statements. During the nine months ended September 30, 2018, we changed certain of our critical accounting policies and estimates from those previously disclosed in our 2017 Form 10-K, in relation to our revenue recognition and our hedge accounting policies as a result of the adoption of new accounting standards on January 1, 2018. Our revenue recognition accounting policy is described in Note 3, Revenue Recognition, and our hedge accounting policy is described in Note 8, Derivatives and Hedging Activities.

5

INSTALLED BUILDING PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Recently Adopted Accounting Pronouncements

Standard	Adoption
ASU 2014-09, Revenue from Contracts with Customers (Topic 606)	ASC 606 sets forth a new revenue recognition model that requires identifying the contract(s) with a customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations and recognizing the revenue upon satisfaction of performance obligations. We adopted the provisions of ASU 2014-09 and related subsequently-issued amendments beginning on January 1, 2018 using the modified retrospective approach and, as such, recognized a $2.1 million cumulative effect, net of tax, of initially applying the standard as an increase to the opening balance of retained earnings on January 1, 2018. See Note 3, Revenue Recognition, for further information regarding our revenue recognition policies and the revisions to correct certain immaterial misstatements.
ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to accounting for Hedging Activities	ASU 2017-12 better aligns a company’s risk management activities and financial reporting for hedging relationships and makes certain improvements to simplify the application of hedge accounting guidance. For public business entities, this update is effective for financial statements issued for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years, with early adoption permitted. We elected to early adopt this ASU effective January 1, 2018 and, as such, recognized a $0.1 million adjustment to our opening retained earnings and accumulated other comprehensive income as of January 1, 2018 to reclassify the cash flow hedge ineffectiveness previously recorded in net income in the fourth quarter of 2017 to accumulated other comprehensive income.
ASU 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118	In March 2018, the Financial Accounting Standards Board issued ASU 2018-05, which became effective immediately. ASU 2018-05 adds various SEC paragraphs pursuant to the issuance of the December 2017 SEC Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”). See Note 11, Income Taxes, for additional information regarding the adoption of ASU 2018-05.
ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force)	ASU 2018-15 amends the existing accounting standards for capitalizing implementation costs of internal-use software by including service contracts in a cloud computing arrangement. For public business entities, this update is effective for financial statements issued for fiscal years beginning after December 15, 2019 and interim periods therein, with early adoption permitted. We elected to early adopt this ASU using the prospective approach effective July 1, 2018 and, as such, have capitalized certain implementation costs associated with service contracts in a cloud computing arrangement. The effects of adoption were not significant.

6

INSTALLED BUILDING PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Recently Issued Accounting Pronouncements Not Yet Adopted

We are currently evaluating the impact of certain ASUs on our Condensed Consolidated Financial Statements or Notes to Consolidated Financial Statements, which are described below:

Standard	Description	Effective Date	Effect on the financial statements or other significant matters
ASU 2016-02, Leases (Topic 842)	This pronouncement and related subsequently-issued amendments change the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASC 842 requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief.	Annual periods beginning after December 15, 2018, including interim periods therein. Early adoption is permitted.	This ASU requires substantially all leases, with the exception of leases with a term of one year or less, to be recorded on the balance sheet as a lease liability measured as the present value of the future lease payments with a corresponding right-of-use asset. This ASU also requires disclosures designed to give financial statement users information on the amount, timing and uncertainty of cash flows. We anticipate taking advantage of the practical expedient options which allow an entity to not reassess whether any existing or expired contracts contain leases, not reassess lease classifications for existing or expired leases and not reassess initial direct costs for an existing lease. We are also evaluating other optional practical expedients and policy elections. The cumulative effect of adoption will be recorded to retained earnings in the period of adoption. We have completed the design phase of our implementation of this standard and are in the process of implementing changes to our systems and processes in conjunction with a review of existing lease agreements. Based on a preliminary assessment, we expect that substantially all of our operating lease commitments will be subject to the new guidance and recognized as operating lease liabilities and right-of-use assets upon adoption. We will adopt these standards effective January 1, 2019.

7

INSTALLED BUILDING PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

ASU 2016-13, Financial Instruments-Credit Losses (Topic 326)	This pronouncement amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. In addition, these amendments require the measurement of all expected credit losses for financial assets, including trade accounts receivable, held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts.	Annual periods beginning after December 15, 2019, including interim periods therein. Early adoption is permitted.	We are currently evaluating whether this ASU will have a material impact on our consolidated financial statements.
ASU 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment	To address concerns over the cost and complexity of the two-step goodwill impairment test, this pronouncement removes the second step of the goodwill impairment test. Going forward, an entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit.	Annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019, including interim periods therein. Early adoption is permitted.	We are currently evaluating the provisions of this ASU and the impact it will have on our disclosures.
ASU 2018-13, Fair Value Measurement (Topic 820):Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement	This pronouncement amends Topic 820 to eliminate, add and modify certain disclosure requirements for fair value measurements.	Annual periods beginning after December 15, 2019, including interim periods therein. Early adoption is permitted.	We are currently evaluating the provisions of this ASU and the impact it will have on our disclosures.

8

INSTALLED BUILDING PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 3 – REVENUE RECOGNITION

Adoption of ASC Topic 606, “Revenue from Contracts with Customers”

On January 1, 2018, we adopted the new accounting standard ASC 606, “Revenue from Contracts with Customers” using the modified retrospective method applied to those contracts that were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Topic 605.

We recorded a $2.1 million cumulative effect adjustment as an increase to opening retained earnings, a $2.8 million increase to other current assets and a $0.7 million increase to deferred income taxes, respectively, on January 1, 2018 due to the impact of adopting Topic 606, with the impact primarily related to the change in accounting for certain of our short-term contracts that were previously accounted for on a completed contract basis, whereas, under ASC 606, we now recognize revenue associated with these contracts over time as service is performed and the transfer of control occurs, based on a percentage-of-completion method using cost-to-cost input methods as a measure of progress. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. The cumulative effect adjustment has been revised from the amount previously disclosed in our interim financial statements filed on Form 10-Q for the quarterly periods ended March 31, 2018 and June 30, 2018 to correct certain immaterial misstatements. The result of correcting these misstatements was an $0.8 million decrease to opening retained earnings, a $1.0 million decrease to other current assets and a $0.2 million decrease to deferred income taxes recorded in the three months ended September 30, 2018.

Impact of New Revenue Recognition Standard on Financial Statement Line Items

The following table summarizes the impact of the new revenue standard on the Condensed Consolidated Balance Sheet as of September 30, 2018, including the cumulative effect of applying the new standard to all contracts upon adoption (in thousands):

	Impact of Change in Accounting Policy
	As reported		Adjustments			Without adoption
Inventories	$	51,491	$	7,003		$	58,494
Other current assets		32,836		(10,689	)		22,147
Total assets		863,106		(3,686	)		859,420
Deferred income taxes		7,758		(921	)		6,837
Retained earnings		88,736		(2,765	)		85,971
Total liabilities and stockholders’ equity		863,106		(3,686	)		859,420

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INSTALLED BUILDING PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The following table summarizes the impact of the new revenue standard on the Condensed Consolidated Statements of Operations and Comprehensive Income (in thousands):

	Three months ended September 30, 2018							Nine months ended September 30, 2018
	As reported		Adjustments			Without adoption		As reported		Adjustments			Without adoption
Net revenue	$	348,999	$	60		$	349,059	$	983,311	$	(2,612	)	$	980,699
Cost of sales		251,665		(207	)		251,458		710,358		(1,781	)		708,577
Income before income taxes	$	20,921	$	267		$	21,188	$	51,034	$	(831	)	$	50,203
Income tax provision		5,358		68			5,426		12,762		(208	)		12,554
Net income	$	15,563	$	199		$	15,762	$	38,272	$	(623	)	$	37,649

Revenue Recognition

Our revenues are derived primarily through contracts with customers whereby we install insulation and other complementary building products and are recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. We account for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. We recognize revenue using the percentage-of-completion method of accounting, utilizing a cost-to-cost input approach as we believe this represents the best measure of when goods and services are transferred to the customer. An insignificant portion of our sales, primarily retail sales, is accounted for on a point-in-time basis when the sale occurs, adjusted accordingly for any return provisions. We do offer assurance-type warranties on certain of our installed products and services that do not represent a separate performance obligation and, as such, do not impact the timing or extent of revenue recognition.

When the percentage-of-completion method is used, we estimate the costs to complete individual contracts and record as revenue that portion of the total contract price that is considered complete based on the relationship of costs incurred to date to total anticipated costs (the cost-to-cost approach). Under the cost-to-cost approach, the use of estimated costs to complete each contract is a significant variable in the process of determining recognized revenue, requires significant judgment and can change throughout the duration of a contract due to contract modifications and other factors impacting job completion. The costs of earned revenue include all direct material and labor costs and those indirect costs related to contract performance, such as indirect labor, supplies, tools and repairs. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined.

Our long-term contracts can be subject to modification to account for changes in contract specifications and requirements. We consider contract modifications to exist when the modification either creates new, or changes the existing, enforceable rights and obligations. Most of our contract modifications are for goods or services that are not distinct from the existing contract due to the significant integration service provided in the context of the contract and are accounted for as if they were part of that existing contract. The effect of a contract modification on the transaction price and our measure of progress for the performance obligation to which it relates, is recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) on a cumulative catch-up basis.

Billing on our long-term contracts occurs primarily on a monthly basis throughout the contract period whereby we submit invoices for customer payment based on actual or estimated costs incurred during the billing period. On certain of our long-term contracts the customer may withhold payment on an invoice equal to a percentage of the invoice amount, which will be subsequently paid after satisfactory completion of each installation project. This amount is referred to as retainage and is common practice in the construction industry, as it allows for customers to ensure the quality of the service performed prior to full payment. Retainage receivables are classified as current or long-term assets based on the expected time to project completion.

10

INSTALLED BUILDING PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

We disaggregate our revenue from contracts with customers by end market and product, as we believe it best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. The following tables present our revenues disaggregated by end market and product (in thousands):

	Three months ended September 30,								Nine months ended September 30,
	2018				2017(1)				2018				2017(1)
Residential new construction	$	268,254	77	%	$	228,526	77	%	$	755,800	77	%	$	637,915	77	%
Repair and remodel		23,107	7	%		18,722	6	%		65,453	7	%		53,597	6	%
Commercial		57,638	16	%		47,945	17	%		162,058	16	%		141,546	17	%
Net revenues	$	348,999	100	%	$	295,193	100	%	$	983,311	100	%	$	833,058	100	%

	Three months ended September 30,								Nine months ended September 30,
	2018				2017(1)				2018				2017(1)
Insulation	$	225,503	65	%	$	195,872	66	%	$	646,270	66	%	$	561,462	67	%
Waterproofing		25,980	7	%		21,571	7	%		73,477	7	%		64,695	8	%
Shower doors, shelving and mirrors		23,190	7	%		21,849	7	%		66,222	7	%		53,107	6	%
Garage doors		21,781	6	%		15,874	6	%		56,574	6	%		45,338	5	%
Rain gutters		12,163	4	%		10,863	4	%		31,429	3	%		29,493	4	%
Blinds		7,811	2	%		2,634	1	%		21,196	2	%		5,909	1	%
Other building products		32,571	9	%		26,530	9	%		88,143	9	%		73,054	9	%
Net revenues	$	348,999	100	%	$	295,193	100	%	$	983,311	100	%	$	833,058	100	%

⁽¹⁾  As noted above, prior period amounts have not been adjusted under the modified retrospective method.

Contract Assets and Liabilities

Our contract assets consist of unbilled amounts typically resulting from sales under contracts when the cost-to-cost method of revenue recognition is utilized and revenue recognized, based on costs incurred, exceeds the amount billed to the customer. Our contract assets are recorded in other current assets in our Consolidated Balance Sheets. Our contract liabilities consist of customer deposits and billings in excess of revenue recognized, based on costs incurred and is included in other current liabilities in our Consolidated Balance Sheets. For presentation purposes, uncompleted contracts as of December 31, 2017 have been restated to reflect the adoption of ASC 606 on January 1, 2018.

Contract assets and liabilities related to our uncompleted contracts and customer deposits were as follows (in thousands):

	September 30,			December 31,
	2018			2017
Contract assets	$	17,229		$	14,476
Contract liabilities		(8,039	)		(7,519	)

11

INSTALLED BUILDING PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Uncompleted contracts were as follows (in thousands):

	September 30, 2018		December 31, 2017
Costs incurred on uncompleted contracts	$	112,444	$	84,563
Estimated earnings		57,834		47,000
Total		170,278		131,563
Less: Billings to date		158,218		122,144
Net under (over) billings	$	12,060	$	9,419

Net under (over) billings were as follows (in thousands):

	September 30, 2018			December 31, 2017
Costs and estimated earnings in excess of billings on uncompleted contracts (contract assets)	$	17,229		$	14,476
Billings in excess of costs and estimated earnings on uncompleted contracts (contract liabilities)		(5,169	)		(5,057	)
Net under (over) billings	$	12,060		$	9,419

During the three and nine months ended September 30, 2018, we recognized $0.1 and $7.0 million of revenue, respectively, that was included in the contract liability balance at December 31, 2017. We did not recognize any impairment losses on our receivables and contract assets during the three and nine months ended September 30, 2018.

Remaining performance obligations represent the transaction price of contracts for which work has not been performed and excludes unexercised contract options and potential modifications. As of September 30, 2018, the aggregate amount of the transaction price allocated to remaining uncompleted contracts was $87.1 million. We expect to recognize revenue on substantially all of these uncompleted contracts over the next 18 months.

Practical Expedients and Exemptions

We generally expense sales commissions and other incremental costs of obtaining a contract when incurred because the amortization period is usually one year or less. Sales commissions are recorded within selling expenses on the Condensed Consolidated Statements of Operations and Comprehensive Income.

We do not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less.

NOTE 4 – INVESTMENTS

Cash and cash equivalents includes investments in money market funds that are valued based on the net asset value of the funds. The investments in these funds were $117.7 million and $55.6 million as of September 30, 2018 and December 31, 2017, respectively. The increase from December 31, 2017 primarily stems from an additional $100.0 million in loan proceeds received in connection with our term loan amendment that took place on June 19, 2018. See Note 6, Long-Term Debt, for additional information.

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INSTALLED BUILDING PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

All other investments are classified as held-to-maturity and consist of highly liquid instruments, primarily including corporate bonds and commercial paper. As of September 30, 2018 and December 31, 2017, the amortized cost of these investments equaled the net carrying value, which was $15.4 million and $30.1 million, respectively. All held-to-maturity securities as of September 30, 2018 mature in one year or less. See Note 7, Fair Value Measurements, for additional information.

NOTE 5 – GOODWILL AND INTANGIBLES

Goodwill

The change in carrying amount of goodwill was as follows (in thousands):

	Goodwill (Gross)		Accumulated Impairment Losses			Goodwill (Net)
January 1, 2018	$	225,470	$	(70,004	)	$	155,466
Business Combinations		11,771		—			11,771
Other		501		—			501
September 30, 2018	$	237,742	$	(70,004	)	$	167,738

Other changes included in the above table represent minor adjustments for the allocation of certain acquisitions still under measurement and one immaterial acquisition completed during the nine months ended September 30, 2018.

We test goodwill for impairment annually during the fourth quarter of our fiscal year or earlier if there is an impairment indicator. No impairment was recognized during either of the nine month periods ended September 30, 2018 or 2017.

Intangibles, net

The following table provides the gross carrying amount, accumulated amortization and net book value for each major class of intangibles (in thousands):

	As of September 30, 2018						As of December 31, 2017
	Gross Carrying Amount		Accumulated Amortization		Net Book Value		Gross Carrying Amount		Accumulated Amortization		Net Book Value
Amortized intangibles:
Customer relationships	$	135,900	$	48,668	$	87,232	$	121,015	$	38,651	$	82,364
Covenants not-to-compete		13,780		6,826		6,954		11,807		4,773		7,034
Trademarks and trade names		62,248		17,166		45,082		58,136		14,076		44,060
Backlog		14,060		13,619		441		13,600		9,067		4,533
	$	225,988	$	86,279	$	139,709	$	204,558	$	66,567	$	137,991

The gross carrying amount of intangibles increased approximately $21.4 million during the nine months ended September 30, 2018 primarily due to business combinations. See Note 14, Business Combinations, for more information. Remaining estimated aggregate annual amortization expense is as follows (amounts, in thousands, are for the fiscal year ended):

13

INSTALLED BUILDING PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Remainder of 2018	5,442
2019	21,332
2020	20,400
2021	19,094
2022	18,176
Thereafter	55,265

NOTE 6 – LONG-TERM DEBT

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

	As of September 30,			As of December 31,
	2018			2017
Term loan, net of unamortized debt issuance costs of $5,026 and $5,146, respectively	$	392,724		$	293,354
Vehicle and equipment notes, maturing September 2023; payable in various monthly installments, including interest rates ranging from 2.5% to 4.8%		59,992			50,357
Various notes payable, maturing through March 2025; payable in various monthly installments, including interest rates ranging from 4% to 6%		3,517			3,866
		456,233			347,577
Less: current maturities		(22,481	)		(16,650	)
Long-term debt, less current maturities	$	433,752		$	330,927

On April 13, 2017, we entered into, and subsequently amended on November 30, 2017, a term loan credit agreement (the “Term Loan Agreement”) which provided for a seven-year $300.0 million term loan facility (the “Term Loan”) and an asset-based lending credit agreement (the “ABL Credit Agreement”) which provided for up to approximately $100.0 million with a sublimit up to $50.0 million for the issuance of letters of credit (the “ABL Revolver”), which may be reduced or increased pursuant to the ABL Credit Agreement.

On June 19, 2018, we entered into a second amendment to the Term Loan Agreement (the “Term Loan Second Amendment”) to (i) extend the maturity date from April 15, 2024 to April 15, 2025 and (ii) increase the aggregate principal amount of the facility from $297.8 million to $397.8 million. In conjunction with the Term Loan Second Amendment, we wrote off fees of $1.1 million. All other provisions of the Term Loan Agreement were unchanged.

Also on June 19, 2018, we entered into a third amendment to the ABL Credit Agreement (the “ABL Third Amendment”) to (i) extend the maturity date from April 13, 2022 to June 19, 2023, (ii) increase the aggregate revolving loan commitments from $100.0 million to $150.0 million and (iii) provide enhanced borrowing availability against certain types of accounts receivable.

14

INSTALLED BUILDING PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 7 – FAIR VALUE MEASUREMENTS

Assets and Liabilities Measured at Fair Value on a Recurring Basis

In many cases, a valuation technique used to measure fair value includes inputs from multiple levels of the fair value hierarchy. The lowest level of significant input determines the placement of the entire fair value measurement in the hierarchy. During the periods presented, there were no transfers between fair value hierarchical levels.

Assets Measured at Fair Value on a Nonrecurring Basis

Certain assets, specifically other intangible and long-lived assets, are measured at fair value on a nonrecurring basis in periods subsequent to initial recognition. Assets measured at fair value on a nonrecurring basis as of September 30, 2018 and December 31, 2017 are categorized based on the lowest level of significant input to the valuation. The assets are measured at fair value when our impairment assessment indicates a carrying value for each of the assets in excess of the asset’s estimated fair value. Undiscounted cash flows, a Level 3 input, are utilized in determining estimated fair values. During each of the three and nine months ended September 30, 2018 and 2017, we did not record any impairments on these assets required to be measured at fair value on a nonrecurring basis.

Estimated Fair Value of Financial Instruments

Accounts receivable, accounts payable and accrued liabilities as of September 30, 2018 and December 31, 2017 approximate fair value due to the short-term maturities of these financial instruments. The carrying amounts of our long-term debt, including the Term Loan and ABL Revolver as of September 30, 2018 and December 31, 2017, approximate fair value due to the variable rate nature of the agreements. The carrying amounts of the obligations associated with our capital leases and vehicle and equipment notes approximate fair value as of September 30, 2018 and December 31, 2017. All debt classifications represent Level 2 fair value measurements.

Derivative financial instruments are measured at fair value based on observable market information and appropriate valuation methods. Contingent consideration liabilities arise from future earnout payments to the sellers associated with certain acquisitions and are based on predetermined calculations of certain future results. These future payments are estimated by considering various factors, including business risk and projections. The contingent consideration liabilities are measured at fair value by discounting estimated future payments to their net present value using the appropriate weighted average cost of capital (WACC). The fair values of financial assets and liabilities that are recorded at fair value in the Condensed Consolidated Balance Sheets and not described above were as follows (in thousands):

	As of September 30, 2018								As of December 31, 2017
	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Financial assets:
Cash equivalents	$	117,688	$	117,688	$	—	$	—	$	55,634	$	55,634	$	—	$	—
Derivative financial instruments		4,370		—		4,370		—		618		—		618		—
Total financial assets	$	122,058	$	117,688	$	4,370	$	—	$	56,252	$	55,634	$	618	$	—
Financial liabilities:
Derivative financial instruments	$	271	$	—	$	271	$	—	$	—	$	—	$	—	$	—
Contingent consideration		4,900		—		—		4,900		1,834		—		—		1,834
Total financial liabilities	$	5,171	$	—	$	271	$	4,900	$	1,834	$	—	$	—	$	1,834

15

INSTALLED BUILDING PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The change in fair value of the contingent consideration was as follows (in thousands):

Contingent consideration liability - January 1, 2018	$	1,834
Preliminary purchase price		3,653
Fair value adjustments		(586	)
Accretion in value		399
Amounts paid to sellers		(400	)
Contingent consideration liability - September 30, 2018	$	4,900

The accretion in value of contingent consideration liabilities is included within administrative expenses on the Condensed Consolidated Statements of Operations and Comprehensive Income.

The carrying values and associated fair values of financial assets and liabilities that are not recorded at fair value in the Condensed Consolidated Balance Sheets and not described above include investments which represent a Level 2 fair value measurement and are as follows (in thousands):

	As of September 30, 2018				As of December 31, 2017
	Carrying Value		Fair Value		Carrying Value		Fair Value
Financial assets:
Investments	$	15,358	$	15,343	$	30,053	$	30,038

See Note 4, Investments, for more information on cash equivalents and investments included in the table above. Also see Note 8, Derivatives and Hedging Activities, for more information on derivative financial instruments.

NOTE 8 – DERIVATIVES AND HEDGING ACTIVITIES

Cash Flow Hedges of Interest Rate Risk

Our purpose for using interest rate derivatives is to add stability to interest expense and to manage our exposure to interest rate movements. During the first nine months of 2018, such derivatives were used to hedge the variable cash flows associated with existing variable-rate debt. To accomplish these objectives, we primarily use interest rate swaps as part of our interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. As of September 30, 2018, we had two interest rate swaps, each with an associated floor, with a total beginning notional of $200.0 million, one that amortizes quarterly to $95.3 million at a maturity date of May 31, 2022 and one that amortizes quarterly to $93.3 million at a maturity date of April 15, 2025. We also had a forward interest rate swap with an associated floor beginning May 31, 2022 with a beginning notional of $100.0 million that amortizes quarterly to $97.0 million at a maturity date of April 15, 2025. Combined, these three swaps serve to hedge $200.0 million of the variable cash flows on our Term Loan until maturity. As of December 31, 2017, we had one interest rate swap with an associated floor with a beginning notional of $100.0 million that amortizes quarterly to $95.3 million at a maturity date of May 31, 2022.

The changes in the fair value of derivatives designated and that qualify as cash flow hedges are recorded in accumulated other comprehensive income and subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. We had no such changes during the nine months ended September 30, 2018.

16

INSTALLED BUILDING PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense, net as interest payments are made on our variable-rate debt. Over the next twelve months, we estimate that an additional $0.4 million will be reclassified as a decrease to interest expense, net.

Additionally, we do not use derivatives for trading or speculative purposes and we currently do not have any derivatives that are not designated as hedges. As of September 30, 2018, the Company has not posted any collateral related to these agreements.

We elected to early adopt ASU 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.” as of January 1, 2018 and, as such, recognized a $0.1 million adjustment to our opening retained earnings and accumulated other comprehensive income as of January 1, 2018 to reclassify the cash flow hedge ineffectiveness previously recorded in net income in the fourth quarter of 2017 to accumulated other comprehensive income.

NOTE 9 – STOCKHOLDERS’ EQUITY

As of September 30, 2018, we had $3.1 million in accumulated other comprehensive income on our Condensed Consolidated Balance Sheet, which represents the unrealized gain on our derivative instruments. For additional information, see Note 8, Derivatives and Hedging Activities.

On February 28, 2018, we announced that our Board of Directors authorized a $50.0 million stock repurchase program effective March 2, 2018 through February 28, 2019, unless extended by the Board of Directors. See Note 16, Subsequent Events, for information regarding an additional stock repurchase program authorized by the Board of Directors effective November 5, 2018. During the three and nine months ended September 30, 2018, we repurchased approximately 380 thousand and 793 thousand shares of our common stock, respectively. The aggregate purchase price of our 2018 stock repurchase plan was approximately $18.2 million and $42.8 million, or $47.75 and $53.96 average price per share, for the three and nine months ended September 30, 2018, respectively. The effect of these treasury shares reducing the number of common shares outstanding is reflected in our earnings per share calculation.

NOTE 10 – EMPLOYEE BENEFITS

Healthcare

Our healthcare benefit expense (net of employee contributions) for all plans was approximately $4.5 million and $4.1 million for the three months ended September 30, 2018 and 2017, respectively, and $13.3 million and $12.4 million for the nine months ended September 30, 2018 and 2017, respectively. An accrual for estimated healthcare claims incurred but not reported (“IBNR”) is included within accrued compensation on the Condensed Consolidated Balance Sheets and was $2.1 million and $1.9 million as of September 30, 2018 and December 31, 2017, respectively.

Workers’ Compensation

Workers’ compensation expense totaled $4.4 million and $3.1 million for the three months ended September 30, 2018 and 2017, respectively, and $9.7 million and $9.8 million for the nine months ended September 30, 2018 and 2017, respectively. Workers’ compensation known claims and IBNR reserves included on the Condensed Consolidated Balance Sheets were as follows (in thousands):

17

INSTALLED BUILDING PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

	September 30,		December 31,
	2018		2017
Included in other current liabilities	$	5,276	$	5,899
Included in other long-term liabilities		10,190		8,721
	$	15,466	$	14,620

We also had an insurance receivable for claims that exceeded the stop loss limit included on the Condensed Consolidated Balance Sheets. This receivable offsets an equal liability included within the reserve amounts noted above and was as follows (in thousands):

	September 30,		December 31,
	2018		2017
Included in other non-current assets	$	1,894	$	1,826

Retirement Plans

We participate in multiple 401(k) plans, whereby we provide a matching contribution of wages deferred by employees and can also make discretionary contributions to each plan. Certain plans allow for discretionary employer contributions only. These plans cover substantially all our eligible employees. We recognized 401(k) plan expenses of $0.3 million and $1.2 million during the three and nine months ended September 30, 2018 and $0.4 million and $1.3 million during the three and nine months ended September 30, 2017, respectively. These expenses are included in administrative expenses on the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income.

Share-Based Compensation

Common Stock Awards

During the nine months ended September 30, 2018 and 2017, we granted approximately five thousand and six thousand shares of our common stock on June 1, respectively, under our 2014 Omnibus Incentive Plan to non-employee members of our Board of Directors. The stock issued to the Board of Directors on June 1, 2017 vested immediately, whereas the stock issued on June 1, 2018 will vest over a one year service term. Accordingly, for the nine months ended September 30, 2017, we recorded approximately $0.3 million in compensation expense within administrative expenses on the Condensed Consolidated Statements of Operations and Comprehensive Income at the time of the grant, while $25 thousand and $0.1 million of compensation expense was recorded during the three and nine months ending September 30, 2018.

In addition, during each of the nine months ended September 30, 2018 and 2017, we granted approximately 0.1 million shares of our common stock under our 2014 Omnibus Incentive Plan to our employees. The shares granted during each of the nine months ended September 30, 2018 and 2017 vest in three equal installments (rounded to the nearest whole share) annually on April 20^th through 2021.

During the nine months ended September 30, 2018 and 2017, our employees surrendered approximately forty-one thousand shares and ten thousand shares, respectively, of our common stock to satisfy tax withholding obligations arising in connection with the vesting of common stock awards issued under our 2014 Omnibus Incentive Plan. Share-based compensation expense associated with non-performance-based awards issued to employees was $1.0 million and $2.9 million for the three and nine months ended

18

INSTALLED BUILDING PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

September 30, 2018, respectively, and $0.8 million and $1.9 million for the three and nine months ended September 30, 2017, respectively. We recognized excess tax benefits of $0.5 million and $0.6 million within the income tax provision in the Condensed Consolidated Statements of Operations and Comprehensive Income for the nine months ended September 30, 2018 and 2017, respectively. We did not recognize any such excess tax benefits in the three months ended September 30, 2018 or 2017.

As of September 30, 2018, we had $6.1 million of unrecognized compensation expense related to these nonvested common stock awards issued to the Board of Directors and our employees. This expense is subject to future adjustments for forfeitures and is expected to be recognized on a straight-line basis over the remaining weighted-average period of 1.9 years. Shares forfeited are returned as treasury shares and available for future issuances. See the table below for changes in shares and related weighted average fair market value per share.

Employees – Performance-Based Stock Awards

During the nine months ended September 30, 2018, we granted under our 2014 Omnibus Incentive Plan approximately 0.1 million shares of our common stock to certain officers, which vest in two equal installments on each of April 20, 2019 and April 20, 2020. These shares were issued in connection with the performance-based targets established in 2017. In addition, during the nine months ended September 30, 2018, we established, and our Board of Directors approved, performance-based targets in connection with common stock awards to be issued to certain officers in 2019 contingent upon achievement of these 2018 targets. Share-based compensation expense associated with these performance-based awards was $0.6 million and $1.6 million for the three and nine months ended September 30, 2018, respectively, and $0.3 million and $0.7 million for the three and nine months ended September 30, 2017, respectively.

As of September 30, 2018, we had $3.6 million of unrecognized compensation expense related to nonvested performance-based common stock awards. This expense is subject to future adjustments for forfeitures and is expected to be recognized over the remaining weighted-average period of 1.8 years using the graded-vesting method. See the table below for changes in shares and related weighted average fair market value per share.

Employees – Performance-Based Restricted Stock Units

During the nine months ended September 30, 2017, we established, and our Board of Directors approved, performance-based restricted stock units in connection with common stock awards which we issued to certain employees during the nine months ended September 30, 2018. In addition, during the nine months ended September 30, 2018, we established, and our Board of Directors approved, performance-based restricted stock units in connection with common stock awards to be issued to certain employees in 2019 based upon achievement of a performance target. Share-based compensation expense associated with these performance-based awards was $0.3 million and $1.5 million for the three and nine months ended September 30, 2018, respectively, and $1.0 million and $1.7 million for the three and nine months ended September 30, 2017, respectively. All restricted stock units are accounted for as equity-based awards that are settled with a fixed number of common shares.

As of September 30, 2018, we had $0.4 million of unrecognized compensation expense related to nonvested performance-based common stock units. This expense is subject to future adjustments for forfeitures and is expected to be recognized on a straight-line basis over the remaining weighted-average period of 0.5 years. See the table below for changes in shares and related weighted average fair market value per share.

19

INSTALLED BUILDING PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Share-Based Compensation Summary

Amounts for each category of equity-based award for employees as of December 31, 2017 and changes during the nine months ended September 30, 2018 were as follows:

	Common Stock Awards					Performance-Based Stock Awards					Performance-Based Restricted Stock Units
	Awards			Weighted Average Fair Market Value Per Share		Awards			Weighted Average Fair Market Value Per Share		Units			Weighted Average Fair Market Value Per Share
Nonvested awards/units at December 31, 2017		202,331		$	39.09		77,254		$	41.00		72,000		$	52.16
Granted		65,112			57.51		52,892			65.60		14,072			55.92
Vested		(90,952	)		36.10		—			—		(71,120	)		52.15
Forfeited/Cancelled		(2,010	)		48.63		(14,448	)		41.00		(1,564	)		53.14
Nonvested awards/units at September 30, 2018		174,481		$	47.42		115,698		$	52.25		13,388		$	56.05

During the three and nine months ended September 30, 2018 and 2017, we recorded the following stock compensation expense, by income statement category (in thousands):

	Three months ended September 30,				Nine months ended September 30,
	2018		2017		2018		2017
Cost of sales	$	94	$	507	$	749	$	507
Selling		30		292		402		292
Administrative		1,769		1,380		4,938		3,950
	$	1,893	$	2,179	$	6,089	$	4,749

Administrative stock compensation expense includes all stock compensation earned by our administrative personnel, while cost of sales and selling stock compensation represents all stock compensation earned by our installation and sales employees, respectively.

NOTE 11 – INCOME TAXES

Our provision for income taxes as a percentage of pretax earnings is based on a current estimate of the annual effective income tax rate adjusted to reflect the impact of discrete items.

During the three and nine months ended September 30, 2018, our effective tax rate was 25.6% and 25.0%, respectively. This rate was favorably impacted primarily by the enactment of Pub.L. 115–97, an Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018 (the “Tax Act”). The Tax Act reduced the U.S federal corporate tax rate from 35% to 21% effective January 1, 2018, among other changes. ASC Topic 740, Accounting for Income Taxes, requires companies to recognize the effect of tax law changes in the period of enactment. Pursuant to ASU 2018-05 and Staff Accounting Bulletin No. 118 (“SAB 118”) issued by the Securities and Exchange Commission, a company is expected to record a provisional amount when it does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain tax effects of the Tax Act, but a reasonable estimate can be determined. A provisional amount is not required to be recorded if a reasonable estimate cannot be determined.

We have recognized the provisional tax impacts of the Tax Act in our consolidated financial statements for the year ended December 31, 2017 included within our 2017 Form 10-K. Based on a review of the guidance issued by the Internal Revenue Service in the first, second and third quarters of 2018, no

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INSTALLED BUILDING PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

adjustment to the provisional amount recorded in the Condensed Consolidated Financial Statements for the year ended December 31, 2017 was deemed necessary. We continue to assess new guidance and refine our computation of these provisional amounts and will complete our analysis within the one-year measurement period ending December 22, 2018.

NOTE 12 – RELATED PARTY TRANSACTIONS

We sell installation services to other companies related to us through common or affiliated ownership and/or Board of Directors and/or management relationships. We also purchase services and materials and pay rent to companies with common or affiliated ownership.

We lease our headquarters and certain other facilities from related parties. See Note 13, Commitments and Contingencies, for future minimum lease payments to be paid to these related parties.

For the three and nine months ended September 30, 2018 and 2017, the amount of sales to related parties as well as the purchases from and rent expense paid to related parties were as follows (in thousands):

	Three months ended September 30,				Nine months ended September 30,
	2018		2017		2018		2017
Sales	$	3,259	$	2,641	$	9,361	$	7,363
Purchases		372		302		1,207		901
Rent		257		290		829		875

As of September 30, 2018 and December 31, 2017, we had related party balances of approximately $2.4 million and $2.0 million, respectively, included in accounts receivable on our Condensed Consolidated Balance Sheets. These balances primarily represent trade accounts receivable arising during the normal course of business with various related parties. M/I Homes, Inc., a customer whose Chairman, President and Chief Executive Officer is a member of our Board of Directors, accounted for $1.4 million and $1.0 million of these balances as of each of September 30, 2018 and December 31, 2017, respectively.

NOTE 13 – COMMITMENTS AND CONTINGENCIES

Accrued General Liability

Accrued general insurance reserves included on the Condensed Consolidated Balance Sheets were as follows (in thousands):

	September 30,		December 31,
	2018		2017
Included in other current liabilities	$	2,029	$	2,033
Included in other long-term liabilities		7,787		7,073
	$	9,816	$	9,106

We also had insurance receivables and an indemnification asset, totaling $2.5 million and $2.8 million included in other non-current assets on the Condensed Consolidated Balance Sheets as of September 30, 2018 and December 31, 2017, respectively, that, in aggregate, offset an equal liability included within the reserve amounts noted above.

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INSTALLED BUILDING PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Leases

We are obligated under capital leases covering vehicles and certain equipment. The vehicle and equipment leases generally have initial terms ranging from four to six years. Total gross assets relating to capital leases were approximately $60.9 million and $63.4 million as of September 30, 2018 and December 31, 2017, respectively, and a total of approximately $32.3 million and $26.8 million were fully depreciated as of September 30, 2018 and December 31, 2017, respectively. The net book value of assets under capital leases was approximately $9.7 million and $13.0 million as of September 30, 2018 and December 31, 2017, respectively. Amortization of assets held under capital leases is included within cost of sales on the Condensed Consolidated Statements of Operations and Comprehensive Income.

We also have several noncancellable operating leases, primarily for buildings, improvements, equipment and certain vehicles. These leases generally contain renewal options for periods ranging from one to five years and require us to pay all executory costs such as property taxes, maintenance and insurance.

Future minimum lease payments under noncancellable operating leases (with initial or remaining lease terms in excess of one year) with related parties as of September 30, 2018 are as follows (in thousands):

Remainder of 2018	$	294
2019		1,249
2020		1,277
2021		1,154
2022		1,073
Thereafter		51

Other Commitments and Contingencies

From time to time, various claims and litigation are asserted or commenced against us principally arising from contractual matters and personnel and employment disputes. In determining loss contingencies, management considers the likelihood of loss as well as the ability to reasonably estimate the amount of such loss or liability. An estimated loss is recorded when it is considered probable that such a liability has been incurred and when the amount of loss can be reasonably estimated. As litigation is subject to inherent uncertainties, we cannot be certain that we will prevail in these matters. However, we do not believe that the ultimate outcome of any pending matters will have a material adverse effect on our consolidated financial position, results of operations or cash flows.

During the nine months ended September 30, 2018, we entered into an agreement with one of our suppliers to purchase a portion of the insulation materials we utilize across our business. This agreement is effective January 1, 2019 through December 31, 2021 with a purchase obligation of $25.8 million for 2019, $20.8 million for 2020 and $14.6 million for 2021.

NOTE 14 – BUSINESS COMBINATIONS

As part of our ongoing strategy to expand geographically and increase market share in certain markets, we completed eight business combinations and one minor acquisition merged into existing operations during the nine months ended September 30, 2018 and seven business combinations and two minor acquisitions merged into existing operations during the nine months ended September 30, 2017, respectively, in which we acquired 100% of the ownership interests in each.

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INSTALLED BUILDING PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The largest of these acquisitions were Custom Overhead Door, LLC dba Custom Door & Gate (collectively, “CDG”) in March 2018, Trilok Industries, Inc., Alpha Insulation and Waterproofing Inc. and Alpha Insulation and Waterproofing Company (collectively, “Alpha”) in January 2017, Columbia Shelving & Mirror, Inc. and Charleston Shelving & Mirror, Inc. (collectively, “Columbia”) in June 2017, and All In Insulation, LLC d/b/a/ Astro Insulation (collectively, “Astro”) in September 2017. The remaining acquisitions were individually insignificant, but material in the aggregate, and are included in “Other” within each table below. Net Income, as noted below, includes amortization, taxes and interest allocations when appropriate.

For the three and nine months ended September 30, 2018 (in thousands):

									Total Purchase Price		Three months ended				Nine months ended
			Acquisition				Seller				September 30, 2018				September 30, 2018
2018 Acquisitions	Date		Type		Cash Paid		Obligations				Revenue		Net Income		Revenue		Net Income
CDG		3/19/2018		Asset	$	9,440	$	1,973	$	11,413	$	3,848	$	164	$	7,572	$	229
Other		Various		Shares/Asset		25,242		3,447		28,689		7,003		42		12,782		423
Total					$	34,682	$	5,420	$	40,102	$	10,851	$	206	$	20,354	$	652

For the three and nine months ended September 30, 2017 (in thousands):

									Fair Value of Common Stock		Total Purchase Price		Three months ended September 30, 2017					Nine months ended September 30, 2017
2017 Acquisitions	Date		Acquisition Type		Cash Paid		Seller Obligations						Revenue		Net (Loss) Income			Revenue		Net Income
Alpha(1)		1/5/2017		Share	$	103,810	$	2,002	$	10,859	$	116,671	$	29,334	$	(271	)	$	87,830	$	190
Columbia		6/26/2017		Asset		8,768		225		—		8,993		3,026		73			3,241		80
Astro		9/18/2017		Asset		9,144		482		—		9,626		264		46			264		46
Other		Various		Asset		9,812		1,042		—		10,854		6,499		84			11,671		366
Total					$	131,534	$	3,751	$	10,859	$	146,144	$	39,123	$	(68	)	$	103,006	$	682

⁽¹⁾  The cash paid included $21.7 million in contingent consideration to satisfy purchase price adjustments related to cash and net working capital requirements, earnout consideration based on Alpha’s change in EBITDA from 2015 and a customary holdback. These payments were based on fair value of each contingent payment at the time of acquisition and subsequently adjusted during the measurement period. We issued 282,577 shares of our common stock with a fair value of $10.9 million.

Acquisition-related costs recorded within administrative expenses on the Condensed Consolidated Statements of Operations and Comprehensive Income amounted to $0.7 million and $1.9 million for the three and nine months ended September 30, 2018, respectively, and $0.9 million and $2.3 million for the three and nine months ended September 30, 2017, respectively. The goodwill recognized in conjunction with these business combinations represents the excess cost of the acquired entity over the net amount assigned to assets acquired and liabilities assumed. We expect to deduct approximately $12.4 million of goodwill for tax purposes as a result of 2018 acquisitions.

Purchase Price Allocations

The estimated fair values of the assets acquired and liabilities assumed for the acquisitions, as well as total purchase prices and cash paid, approximated the following as of September 30 (in thousands):

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INSTALLED BUILDING PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

	2018									2017
	CDG			Other			Total			Alpha			Columbia			Astro			Other			Total
Estimated fair values:
Cash	$	—		$	—		$	—		$	247		$	—		$	—		$	—		$	247
Accounts receivable		1,731			3,306			5,037			29,851			989			924			2,070			33,834
Inventories		514			1,027			1,541			1,852			704			296			1,014			3,866
Other current assets		28			892			920			4,500			8			36			8			4,552
Property and equipment		933			1,893			2,826			1,528			659			640			1,144			3,971
Intangibles		3,711			16,681			20,392			57,200			4,760			5,168			5,939			73,067
Goodwill		4,898			6,873			11,771			38,511			2,209			2,932			2,472			46,124
Other non-current assets		36			19			55			383			36			—			176			595
Accounts payable and other current liabilities		(438	)		(2,002	)		(2,440	)		(17,401	)		(372	)		(370	)		(1,969	)		(20,112	)
Fair value of assets acquired and purchase price		11,413			28,689			40,102			116,671			8,993			9,626			10,854			146,144
Less fair value of common stock issued		—			—			—			10,859			—			—			—			10,859
Less seller obligations		1,973			3,447			5,420			2,002			225			482			1,042			3,751
Cash paid	$	9,440		$	25,242		$	34,682		$	103,810		$	8,768		$	9,144		$	9,812		$	131,534

Contingent consideration is included as “seller obligations” in the above table or within “fair value of assets acquired” if subsequently paid during the period presented. These contingent payments consist primarily of earnouts based on performance that are recorded at fair value at the time of acquisition, and/or non-complete agreements and amounts based on working capital calculations. When these payments are expected to be made over one year from the acquisition date, the contingent consideration is discounted to net present value using our weighted average cost of capital (WACC), when appropriate.

Further adjustments to the allocation for each acquisition still under its measurement period are expected as third-party and internal valuations are finalized, certain tax aspects of the transaction are completed and customary post-closing reviews are concluded during the measurement period attributable to each individual business combination. As a result, insignificant adjustments to the fair value of assets acquired, and in some cases total purchase price, have been made to certain business combinations since the date of acquisition and future adjustments may be made through the end of each measurement period. Goodwill and intangibles per the above table do not agree to the total gross increases of these assets as shown in Note 5, Goodwill and Intangibles, during each of the nine months ended September 30, 2018 and 2017 due to minor adjustments to goodwill for the allocation of certain acquisitions still under measurement. In addition, goodwill and intangibles increased during each of the nine months ended September 30, 2018 and 2017 due to small acquisitions merged into existing operations that do not appear in the above table.

The provisional amounts for Alpha originally reported in our Condensed Consolidated Balance Sheets included in our Quarterly Report on Form 10-Q for the period ended March 31, 2017 were adjusted during the measurement period to reflect the review and ongoing analysis of the fair value measurements. As a result of our continued evaluation during the measurement period, during the twelve months ended December 31, 2017, we increased goodwill by approximately $2.1 million, offset by a corresponding net reduction in various working capital accounts.

The provisional amounts for Columbia originally reported in our Condensed Consolidated Balance Sheets included in our Quarterly Report on Form 10-Q for the period ended June 30, 2017 were adjusted to reflect the review and ongoing analysis of the fair value measurements. As a result of our continued evaluation during the measurement period, we increased goodwill by approximately $0.5 million and our seller obligations by approximately $0.4 million for an adjustment to the fair value of a working capital contingent liability. These adjustments, as well as various other insignificant adjustments, resulted in a total purchase price increase for Columbia of approximately $0.6 million as reflected within the above table and were within applicable measurement period guidelines.

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INSTALLED BUILDING PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Estimates of acquired intangible assets related to the acquisitions are as follows for the nine months ended September 30 (dollars in thousands):

	2018				2017
Acquired intangibles assets	Estimated Fair Value		Weighted Average Estimated Useful Life (yrs.)		Estimated Fair Value		Weighted Average Estimated Useful Life (yrs.)
Customer relationships	$	14,480		8	$	37,533		8
Trademarks and trade names		3,920		14		19,403		15
Non-competition agreements		1,530		5		2,429		5
Backlog		460		2		13,400		1.5

Pro Forma Information

The unaudited pro forma information for the combined results of the Company has been prepared as if the 2018 acquisitions had taken place on January 1, 2017 and the 2017 acquisitions had taken place on January 1, 2016. The unaudited pro forma information is not necessarily indicative of the results that we would have achieved had the transactions actually taken place on January 1, 2017 and 2016, respectively, and the unaudited pro forma information does not purport to be indicative of future financial operating results (in thousands, except per share data):

	Unaudited pro forma for the three months ended September 30,				Unaudited pro forma for the nine months ended September 30,
	2018		2017		2018		2017
Net revenue	$	353,609	$	316,382	$	1,006,313	$	906,283
Net income		16,215		13,020		40,305		34,277
Basic and diluted net income per share		0.52		0.41		1.28		1.08

Unaudited pro forma net income reflects additional intangible asset amortization expense of $0.2 million and $1.2 million for the three and nine months ended September 30, 2018 and $0.9 million and $3.2 million for the three and nine months ended September 30, 2017, respectively, as well as additional income tax expense of $0.2 million and $0.7 million for the three and nine months ended September 30, 2018 and $0.5 million and $2.0 million for the three and nine months ended September 30, 2017, respectively, that would have been recorded had the 2018 acquisitions taken place on January 1, 2017 and the 2017 acquisitions taken place on January 1, 2016.

NOTE 15 –INCOME PER COMMON SHARE

Basic net income per common share is calculated by dividing net income by the weighted average shares outstanding during the period, without consideration for common stock equivalents.

Diluted net income per common share is calculated by adjusting weighted average shares outstanding for the dilutive effect of common stock equivalents outstanding for the period, determined using the treasury stock method. Potential common stock is included in the diluted income per common share calculation when dilutive. The dilutive effect of outstanding restricted stock awards after application of the treasury stock method was 84 thousand and 138 thousand shares for the three and nine months ended September 30, 2018, respectively, and 107 thousand and 80 thousand shares for the three and nine months ended September 30, 2017, respectively.

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INSTALLED BUILDING PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 16 – SUBSEQUENT EVENTS

On October 31, 2018, we acquired substantially all of the assets of Advanced Fiber Technology, a manufacturer of cellulose, asphalt and industrial fibers. The initial accounting for the business combination was not complete at the time the financial statements were issued due to the timing of the acquisition and the filing of this Quarterly Report on Form 10-Q. As a result, disclosures required under ASC 805-10-50, Business Combinations, cannot be made at this time.

On October 31, 2018, IBP’s Board of Directors approved an additional stock repurchase program, effective November 5, 2018, pursuant to which we may purchase up to an additional $100 million of our outstanding common stock. The program will remain in effect until February 28, 2020, unless extended by the Board of Directors.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our consolidated financial statements and related notes in “Item 1. Financial Statements” of this Form 10-Q, as well as our 2017 Form 10-K.

OVERVIEW

We are one of the nation’s largest insulation installers for the residential new construction market and are also a diversified installer of complementary building products, including waterproofing, fire-stopping and fireproofing, garage doors, rain gutters, shower doors, closet shelving, mirrors and other products throughout the United States. We offer our portfolio of services for new and existing single-family and multi-family residential and commercial building projects in all 48 continental states and the District of Columbia from our national network of over 125 branch locations. Substantially all of our net revenue comes from service-based installation of these products in the residential new construction, repair and remodel and commercial construction end markets. We believe our business is well positioned to continue to profitably grow due to our strong balance sheet, liquidity and our continuing acquisition strategy.

A large portion of our net revenue comes from the U.S. residential new construction market, which depends upon a number of economic factors including demographic trends, interest rates, consumer confidence, employment rates, housing inventory levels, foreclosure rates, the health of the economy and availability of mortgage financing.

The recently passed Tax Act has added additional momentum to the economic landscape surrounding our business. While there have been concerns about the impact of the new tax law on housing, initial analyses are suggesting that it is generally stimulative to the economy. Sentiment continues to materialize that state and local tax deductibility changes have caused negative impacts in certain areas of the country where housing affordability has contributed to slowing demand during the first nine months of 2018. We may adjust our strategies based on housing demand and our performance in each of our markets.

2018 Third Quarter Highlights

Net revenue increased 18.2% or $53.8 million to $349.0 million, while gross profit increased 13.7% or $11.8 million, during the three months ended September 30, 2018 compared to 2017. The increase in net revenue and gross profit was primarily driven by the continued recovery of the housing markets, the contribution of our recent acquisitions and growth across our end markets and products, with the increase in gross margin being partially offset by material inflation and labor related expenses.

During the third quarter of 2018, we entered into a seven-year interest rate swap with a beginning notional of $100.0 million that serves to hedge the variable cash flows associated with existing variable-rate debt on the incremental $100.0 million principal borrowings and one-year extension added to our Term Loan during the second quarter of 2018. We also entered into a forward interest rate swap beginning May 31, 2022 with a beginning notional of $100.0 million. Including our pre-existing interest rate swap, these three swaps serve to hedge $200.0 million of the variable cash flows on our Term Loan until maturity.

We believe there are several trends that should drive long-term growth in the housing market. These trends include an aging housing stock, population growth and household formation growth. These positive trends are reflected in Blue Chip Economic Indicators’ October 2018 consensus forecast, which projects housing starts to increase from approximately 1.2 million in 2017 to approximately 1.3 million in 2019. We expect that our net revenue, gross profit and operating income will benefit from this growth. While we are actively increasing pricing with our customers, we have realized selling price increases at a slower rate than the increase in material costs. We have been successful negotiating better pricing with our customers and experienced solid price increase momentum during the first nine months of 2018.

27

While we continue to proactively work with customers and suppliers to mitigate these cost impacts, we continue to experience inflation on our materials and it may take a few quarters for us to fully address the current material price environment.

Sales performance

Net revenues increased during the third quarter and first nine months of 2018 compared to 2017, primarily driven by acquisitions, organic growth from our existing branches and increased selling prices. For the three and nine months ended September 30, 2018, on a same branch basis, net revenue improved 12.2% and 11.6%, respectively, with slightly more than half of the increase for both periods attributable to growth in the number of completed jobs with the rest attributable to price gains and more favorable customer and product mix. We also saw organic growth in our large commercial construction end market of 15.8% and 11.0% during the three and nine months ended, September 30, 2018, respectively, while same branch new residential sales increased 11.3% and 11.6%, compared to growth in U.S. housing completions of 9.6% and 8.7% for the three and nine months ended September 30, 2018, respectively. Net revenue for the three and nine months ended September 30 was as follows (in thousands):

	Three months ended September 30,							Nine months ended September 30,
	2018		Change			2017		2018		Change			2017
Same branch(1)	$	331,205		34.4	%	$	246,486	$	929,752		34.5	%	$	691,290
Acquired branch(2)		17,794		-63.5	%		48,707		53,559		-62.2	%		141,768
Total net revenues	$	348,999		18.2	%	$	295,193	$	983,311		18.0	%	$	833,058

⁽¹⁾  Represents sales for branch locations owned for greater than 12 months as of the financial statement date.

⁽²⁾  Represents sales for branch locations owned for less than 12 months as of the financial statement date.

Cost of sales and gross profit

Gross profit for the three and nine months ended September 30 was as follows (dollars in thousands):

	Three months ended September 30,									Nine months ended September 30,
	2018			Change			2017			2018			Change			2017
Net revenues	$	348,999			18.2	%	$	295,193		$	983,311			18.0	%	$	833,058
Cost of sales		251,665			20.1	%		209,612			710,358			20.3	%		590,377
Gross profit	$	97,334			13.7	%	$	85,581		$	272,953			12.5	%	$	242,681
Gross profit percentage		27.9	%					29.0	%		27.8	%					29.1	%

As a percentage of net revenue, gross profit decreased during the three and nine months ended September 30, 2018 compared to 2017 attributable primarily to industry-wide material cost increases beginning in January of this year as well as the impacts of our financial wellness plan, stock compensation plan for installers and branch start-up costs, partially offset by improvements in labor utilization.

Operating expenses

Operating expenses for the three and nine months ended September 30 were as follows (dollars in thousands):

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	Three months ended September 30,									Nine months ended September 30,
	2018			Change			2017			2018			Change			2017
Selling	$	17,434			17.3	%	$	14,865		$	49,300			15.9	%	$	42,541
Percentage of total net revenue		5.0	%					5.0	%		5.0	%					5.1	%
Administrative	$	48,337			16.0	%	$	41,657		$	137,511			12.1	%	$	122,679
Percentage of total net revenue		13.9	%					14.1	%		14.0	%					14.7	%
Amortization	$	5,228			-23.4	%	$	6,824		$	19,678			-0.6	%	$	19,790
Percentage of total net revenue		1.5	%					2.3	%		2.0	%					2.4	%

Selling

The dollar increases in selling expenses for the three and nine months ended September 30, 2018 were primarily driven by increased selling wages, commissions and bonuses on an increased sales base. Selling expense, as a percentage of sales, decreased slightly for the nine months ended September 30, 2018 compared to 2017 primarily due to lower bad debt expense.

Administrative

The increase in administrative expenses for the three and nine months ended September 30, 2018 was primarily due to an increase in wages, benefits and facility costs attributable to both acquisitions and organic growth, as well as legal expenses as a result of a legal settlement in the state of California amounting to $0.8 million. Administrative expense decreased as a percentage of sales for the three and nine months ended September 30, 2018 compared to 2017 primarily due to lower bonus expense, as well as lower liability and medical insurance expense.

Other expense

Other expense, net for the three and nine months ended September 30 was as follows (dollars in thousands):

	Three months ended September 30,							Nine months ended September 30,
	2018		Change			2017		2018		Change			2017
Interest expense, net	$	5,282		19.5	%	$	4,421	$	15,013		31.0	%	$	11,456
Other		132		59.0	%		83		417		13.9	%		366
Total other expense	$	5,414		20.2	%	$	4,504	$	15,430		30.5	%	$	11,822

The increase in interest expense during the three and nine months ended September 30, 2018 compared to 2017 was due to increased debt balances associated with our borrowings to support acquisition-related growth.

Income tax provision

Income tax provision and effective tax rates for the three and nine months ended September 30 were as follows (dollars in thousands):

	Three months ended September 30,						Nine months ended September 30,
	2018			2017			2018			2017
Income tax provision	$	5,358		$	5,721		$	12,762		$	15,502
Effective tax rate		25.6	%		32.3	%		25.0	%		33.8	%

During the three and nine months ended September 30, 2018, our tax rate was favorably impacted primarily by the effects of the Tax Act, which reduced the U.S federal corporate tax rate from 35% to 21%, usage of net operating losses for a tax filing entity which previously had a full valuation allowance and excess tax benefits from share-based compensation arrangements. This favorability was partially offset by separate tax filing entities in a loss position for which a full valuation allowance will be accounted for against the losses, causing no tax benefit to be recognized on the losses, as well as the loss of the domestic production activities deduction resulting from the enactment of the Tax Act.

29

The ultimate impact of the Tax Act may differ from these provisional amounts, possibly materially, due to, among other things, additional analysis, changes in interpretations and assumptions we have made, additional regulatory guidance that may be issued and actions we may take as a result of the Tax Act. We have recognized the provisional tax impacts of the Tax Act in our Condensed Consolidated Financial Statements for the year ended December 31, 2017 included within our 2017 Form 10-K. Based on a review of the guidance issued by the Internal Revenue Service in the first nine months of 2018, no adjustment to the provisional amount recorded in the Condensed Consolidated Financial Statements for the year ended December 31, 2017 was deemed necessary. We continue to assess new guidance and refine our computation of these provisional amounts and will complete our analysis within the one-year measurement period ending December 22, 2018.

KEY FACTORS AFFECTING OUR OPERATING RESULTS

Cost of materials

We purchase the materials that we install primarily from manufacturers. The industry supply of materials we install was disrupted due to a catastrophic failure at a manufacturer’s facility during the fourth quarter of 2017, resulting in insulation material allocation throughout the industry and, as a result, increased market pricing in 2018. Increased market pricing, regardless of the catalyst, has and could continue to impact our results of operations, to the extent that price increases cannot be passed on to our customers. See Management’s Discussion and Analysis of Financial Conditions and Results of Operations—Overview—2018 Third Quarter Highlights.

Liquidity and capital resources

Our capital resources primarily consist of cash from operations and borrowings under our credit agreement and capital equipment leases and loans. Our primary capital requirements are to fund working capital needs, operating expenses, acquisitions and capital expenditures and meet required principal and interest payments. We also use our resources to fund our stock repurchase program. Our investments consist of highly liquid instruments primarily including corporate bonds and commercial paper. As of September 30, 2018, we had no outstanding borrowings under our ABL Revolver.

On June 19, 2018, we entered into a second amendment to the Term Loan Agreement (the “Term Loan Second Amendment”) to (i) extend the maturity date from April 15, 2024 to April 15, 2025 and (ii) increase the aggregate principal amount of the facility from $297.8 million to $397.8 million. In conjunction with the Term Loan Second Amendment, we wrote off fees of $1.2 million. All other provisions of the Term Loan Agreement were unchanged.

Also on June 19, 2018, we entered into a third amendment to the ABL Credit Agreement (the “ABL Third Amendment”) to (i) extend the maturity date from April 13, 2022 to June 19, 2023, (ii) increase the aggregate revolving loan commitments from $100.0 million to $150.0 million and (iii) provide enhanced borrowing availability against certain types of accounts receivable.

Furthermore, on July 16, 2018, we entered into a seven-year interest rate swap with a beginning notional of $100.0 million, as well as a forward interest rate swap beginning May 31, 2022 with a beginning notional of $100.0 million. These derivatives serve to hedge the variable cash flows associated with existing variable-rate debt on the incremental $100.0 million principal borrowings and one-year extension added to our Term Loan during the second quarter of 2018. Combined with our pre-existing interest rate swap, these three swaps serve to hedge $200.0 million of the variable cash flows on our Term Loan until maturity.

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Our acquisition of Alpha, which was completed on January 5, 2017, required us to commit significant resources to the acquisition and ongoing support of Alpha’s business. This acquisition was funded by drawing on the credit facility in existence at that time.

We believe that our cash flows from operations, combined with our current cash levels and available borrowing capacity, will be adequate to support our ongoing operations and to fund our debt service requirements, capital expenditures and working capital for at least the next 12 months as evidenced by our net positive cash flows from operations for each of the nine months ended September 30, 2018 and 2017. At September 30, 2018, we were in compliance with all applicable covenants under our borrowing agreements.

The following table summarizes our liquidity (in thousands):

	As of September 30, 2018			As of December 31, 2017
Cash and cash equivalents	$	139,089		$	62,510
Short-term investments		15,358			30,053
ABL Revolver(1)		150,000			100,000
Less: outstanding letters of credit and cash-collateral		(28,537	)		(17,902	)
Total liquidity	$	275,910		$	174,661

⁽¹⁾  Liquidity under our ABL Revolver is currently capped by our borrowing base availability. As such, our actual liquidity from this instrument as of September 30, 2018, is less than the amount shown in the above table.

Letters of Credit and Bonds

We may use performance bonds to ensure completion of our work on certain larger customer contracts that can span multiple accounting periods. Performance bonds generally do not have stated expiration dates; rather, we are released from the bonds as the contractual performance is completed. In addition, we occasionally use letters of credit and cash to secure our performance under our general liability and workers’ compensation insurance programs. Permit and license bonds are typically issued for one year and are required by certain municipalities when we obtain licenses and permits to perform work in their jurisdictions. The following table summarizes our outstanding bonds, letters of credit and cash-collateral as of September 30, 2018 (in thousands):

	2018
Performance bonds	$	36,785
Insurance letters of credit and cash-collateral		28,537
Permit and license bonds		6,749
Total bonds and letters of credit	$	72,071

In January 2018, we posted $10.0 million into a trust to serve as additional collateral for our workers’ compensation and general liability policies. This $10.0 million can be converted to a letter of credit at our discretion and is therefore not considered to be restricted cash.

Historical cash flow information

Cash flows from operating activities

Net cash provided by operating activities was $68.8 million and $53.3 million for the nine months ended September 30, 2018 and 2017, respectively. Generally, the primary driver of our cash flows from

31

operating activities is operating income adjusted for certain non-cash items, offset by cash payments for taxes and interest on our outstanding debt. Our cash flows from operations can be impacted by the timing of our cash collections on sales and collection of retainage amounts. In addition, cash flows are seasonally stronger in the third and fourth quarters as a result of increased construction activity.

Cash flows from investing activities

Business Combinations. During the nine months ended September 30, 2018 and 2017, we made cash payments, net of cash acquired, of $34.7 million and $131.0 million, respectively, on business combinations. Our acquisition of Alpha in January 2017 required an investing cash outlay of $103.8 million.

Capital Expenditures. Total cash paid for property and equipment was $27.1 million and $22.9 million for the nine months ended September 30, 2018 and 2017, respectively, and was primarily related to purchases of vehicles and various equipment to support our growing operations. We expect to continue to support any increases in 2018 net revenue through further capital expenditures.

Other. During the nine months ended September 30, 2018 and 2017, we invested $22.8 million and $25.2 million, respectively, in short-term investments consisting primarily of corporate bonds and commercial paper and had $37.5 million in short-term investments that matured during the nine months ended September 30, 2018.

Cash flows from financing activities

We utilize our credit facilities to support our operations and continuing acquisitions, fund our stock repurchase program and finance our fleet expansion. During the nine months ended September 30, 2018 and 2017, we had cash inflows from our credit facilities, net of payments on these instruments and other long-term debt, amounting to $88.9 million and $183.3 million, respectively, to support those initiatives. In addition, we made $4.3 million and $5.6 million in principal payments on our capital leases during the nine months ended September 30, 2018 and 2017, respectively, and received proceeds of $20.7 million and $15.8 million during the nine months ended September 30, 2018 and 2017, respectively, from our fixed asset loans, which serve to offset a significant portion of the capital expenditures included in cash flows from investing activities as described above. Lastly, we repurchased approximately 793 thousand shares of our common stock for $42.8 million during the nine months ended September 30, 2018 as part of our 2018 stock repurchase plan. See Note 9, Stockholders’ Equity for more information surrounding our stock repurchase plan.

Capped Call Agreement

Certain of our stockholders entered into a capped call agreement with the underwriters of the secondary offering of our common stock completed on June 17, 2014. This agreement provided these stockholders with an option to call from the underwriters a total of approximately 1.0 million shares of our common stock at a capped price, with settlement required to be made in cash. During 2016, these stockholders exercised the call option with respect to approximately 0.7 million of the shares. In addition, in the fourth quarter of 2016, these stockholders simultaneously cancelled the remaining portion of the call option and purchased a new call option from the underwriters. This new capped call agreement provided these stockholders with the option to call from the underwriters a total of approximately 0.4 million shares of our common stock at a capped price. The option was exercised on April 16, 2018 and was settled in cash. The capped call agreement is between these stockholders and the underwriters and does not represent compensation to the stockholders for services rendered to us. The price paid for the option represents the fair value of that transaction and we are not a party to the agreement. Accordingly, we have not recorded any expense related to this transaction.

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Contractual Obligations

During the nine months ended September 30, 2018, we entered into an agreement with one of our suppliers to purchase a portion of the insulation materials we utilize across our business. The intention of this agreement, in part, is to purchase a minimum quantity of materials at a set price, ensuring supply and locking in prices at agreed-upon rates. This agreement is effective January 1, 2019 through December 31, 2021 with a purchase obligation of $25.8 million for 2019, $20.8 million for 2020 and $14.6 million for 2021.

Critical Accounting Policies and Estimates

During the nine months ended September 30, 2018, we changed certain of our critical accounting policies and estimates, from those previously disclosed in our 2017 Form 10-K, in relation to our revenue recognition and our hedge accounting, as a result of the adoption of new accounting standards on January 1, 2018.

Recently Adopted Accounting Pronouncements

Standard	Adoption
ASU 2014-09, Revenue from Contracts with Customers (Topic 606)	ASC 606 sets forth a new revenue recognition model that requires identifying the contract(s) with a customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations and recognizing the revenue upon satisfaction of performance obligations. We adopted the provisions of ASU 2014-09 and related subsequently-issued amendments beginning on January 1, 2018 using the modified retrospective approach and, as such, recognized a $2.1 million cumulative effect, net of tax, of initially applying the standard as an increase to the opening balance of retained earnings on January 1, 2018. See Note 3, Revenue Recognition, for further information regarding our revenue recognition policies and the revisions to correct certain immaterial misstatements.
ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to accounting for Hedging Activities	ASU 2017-12 better aligns a company’s risk management activities and financial reporting for hedging relationships and makes certain improvements to simplify the application of hedge accounting guidance. For public business entities, this update is effective for financial statements issued for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years, with early adoption permitted. We elected to early adopt this ASU effective January 1, 2018 and, as such, recognized a $0.1 million adjustment to our opening retained earnings and accumulated other comprehensive income as of January 1, 2018 to reclassify the cash flow hedge ineffectiveness previously recorded in net income in the fourth quarter of 2017 to accumulated other comprehensive income.
ASU 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff	In March 2018, the Financial Accounting Standards Board issued ASU 2018-05, which became effective immediately. ASU 2018-05 adds various SEC paragraphs pursuant to the issuance of the December 2017 SEC Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”). See Note 11, Income Taxes, for additional information regarding the adoption of ASU 2018-05.

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ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force) ASU 2018-15 amends the existing accounting standards for capitalizing implementation costs of internal-use software by including service contracts in a cloud computing arrangement. For public business entities, this update is effective for financial statements issued for fiscal years beginning after December 15, 2019 and interim periods therein, with early adoption permitted. We elected to early adopt this ASU using the prospective approach effective July 1, 2018 and, as such, have capitalized certain implementation costs associated with service contracts in a cloud computing arrangement. The effects of adoption were not significant.

Forward-Looking Statements

This report contains forward-looking statements within the meaning of the federal securities laws, including with respect to the housing market, our financial and business model, our efforts to navigate the material pricing environment, our ability to increase selling prices, our material and labor costs, demand for our services and product offerings, expansion of our national footprint and diversification, our ability to capitalize on the new home and commercial construction recovery, our ability to grow and strengthen our market position, our ability to pursue and integrate value-enhancing acquisitions, our ability to improve sales and profitability, expectations for demand for our services and our earnings in 2018 and expectations for 2019. Forward-looking statements may generally be identified by the use of words such as “anticipate,” “believe,” “estimate,” “project,” “predict,” “possible,” “forecast,” “may,” “could,” “would,” “should,” “expect,” “intends,” “plan,” and “will” or, in each case, their negative, or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Any forward-looking statements that we make herein and in any future reports and statements are not guarantees of future performance, and actual results may differ materially from those expressed in or suggested by such forward-looking statements as a result of various factors, including, without limitation, general economic and industry conditions, the material price environment, and the factors discussed in the “Risk Factors” section of our 2017 Form 10-K, as the same may be updated from time to time in our subsequent filings with the SEC. Any forward-looking statement made by the Company in this report speaks only as of the date hereof. New risks and uncertainties arise from time to time and it is impossible for the Company to predict these events or how they may affect it. The Company has no obligation, and does not intend, to update any forward-looking statements after the date hereof, except as required by federal securities laws.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risks related to fluctuations in interest rates on our outstanding variable rate debt. Upon entering the Term Loan Second Amendment during the nine months ended September 30, 2018, we increased the aggregate principal amount of our debt by $100.0 million. On July 16, 2018, we entered a seven-year interest rate swap with a beginning notional of $100.0 million that serves to hedge the additional $100.0 million term loan. We also entered into a forward interest rate swap beginning May 31, 2022 with beginning notional of $100.0 million. All of our derivatives combine to reduce our variable rate debt by $200.0 million, resulting in total variable rate debt exposed to market risks of $198.3 million as of September 30, 2018. A hypothetical one percentage point increase (decrease) in interest rates on our variable rate debt would increase (decrease) our annual interest expense by approximately $2.0 million.

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Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We have evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) as required by Exchange Act Rules 13a-15(e) and 15d-15(e). Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of September 30, 2018.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the three months ended September 30, 2018 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

See Part I, Item 1. Financial Statements, Note 13, Commitments and Contingencies – Other Commitments and Contingencies, for information about existing legal proceedings.

Item 1A. Risk Factors

There have been no material changes for the three months ended September 30, 2018 from the risk factors as disclosed in our 2017 Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table shows the stock repurchase activity for the three months ended September 30, 2018:

	Total Number of Shares Purchased		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Approximate Dollar Value of Shares that May Yet Be Purchased under the Plans or Programs (2)
July 1 - 31, 2018		—	$	—		—		—
August 1 - 31, 2018		333,035		47.49		333,035	$	9.6 million
September 1 - 30, 2018		47,659		49.57		47,659	$	7.2 million
		380,694	$	47.75		380,694	$	7.2 million

⁽¹⁾  On February 28, 2018, we announced that our Board of Directors authorized a $50 million stock repurchase program effective March 2, 2018 through February 28, 2019, unless extended by the Board of Directors. We repurchased 380,694 shares for $18.2 million during the three months ended September 30, 2018 under this stock repurchase program. We repurchased 412,717 shares for $24.6 million in the first quarter of 2018 under this stock repurchase program and did not repurchase any shares in the second quarter of 2018.

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Item 3. Defaults Upon Senior Securities

There have been no material defaults in senior securities.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits

(a)(3) Exhibits

The following exhibits are being filed as part of this Quarterly Report on Form 10-Q:

Exhibit Number	Description
10.1	Retirement and General Release Agreement, dated as of July  31, 2018, by and among Installed Building Products, Inc., Installed Building Products, LLC, TCI Contracting, LLC and J. Michael Nixon (incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on August 3, 2018).
31.1*	CEO Certification pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	CFO Certification pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	CEO Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	CFO Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101 (a)	Financial statements in XBRL Format.

* Filed herewith.

36

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: November 2, 2018

INSTALLED BUILDING PRODUCTS, INC.
By:	/s/ Jeffrey W. Edwards
	Jeffrey W. Edwards
	President and Chief Executive Officer
By:	/s/ Michael T. Miller
	Michael T. Miller
	Executive Vice President and Chief Financial Officer

37

EX-31.1

Exhibit 31.1

INSTALLED BUILDING PRODUCTS, INC.

Certification Required by Rule 13a-14(a) or 15d-14(a)

of the Securities Exchange Act of 1934

I, Jeffrey W. Edwards, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Installed Building Products, 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 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;

5. The registrant’s other certifying officer 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: November 2, 2018	By:	/s/ Jeffrey W. Edwards
		Jeffrey W. Edwards
		President and Chief Executive Officer

EX-31.2

Exhibit 31.2

INSTALLED BUILDING PRODUCTS, INC.

Certification Required by Rule 13a-14(a) or 15d-14(a)

of the Securities Exchange Act of 1934

I, Michael T. Miller, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Installed Building Products, 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 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;

5. The registrant’s other certifying officer 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: November 2, 2018	By:	/s/ Michael T. Miller
		Michael T. Miller
		Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

INSTALLED BUILDING PRODUCTS, INC.

Certification Required by Rule 13a-14(b) or 15d-14(b)

of the Securities Exchange Act of 1934 and

Section 1350 of Chapter 63 of Title 18 of the

United States Code

The certification set forth below is being submitted in connection with the Installed Building Products, Inc. Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2018 (the “Report”) for the purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code.

Jeffrey W. Edwards, the President and Chief Executive Officer, of Installed Building Products, Inc., certifies that, to the best of his knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the consolidated financial condition and results of operations of Installed Building Products, Inc.

Dated: November 2, 2018	By:	/s/ Jeffrey W. Edwards
		Jeffrey W. Edwards
		President and Chief Executive Officer

EX-32.2

Exhibit 32.2

INSTALLED BUILDING PRODUCTS, INC.

Certification Required by Rule 13a-14(b) or 15d-14(b)

of the Securities Exchange Act of 1934 and

Section 1350 of Chapter 63 of Title 18 of the

United States Code

The certification set forth below is being submitted in connection with the Installed Building Products, Inc. Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2018 (the “Report”) for the purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code.

Michael T. Miller, the Executive Vice President and Chief Financial Officer, of Installed Building Products, Inc., certifies that, to the best of his knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the consolidated financial condition and results of operations of Installed Building Products, Inc.

Dated: November 2, 2018	By:	/s/ Michael T. Miller
		Michael T. Miller
		Executive Vice President and Chief Financial Officer

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2018	Oct. 26, 2018
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q3
Trading Symbol	IBP
Entity Registrant Name	INSTALLED BUILDING PRODUCTS, INC.
Entity Central Index Key	0001580905
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		31,224,974

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Current assets
Cash and cash equivalents	$ 139,089	$ 62,510
Investments	15,358	30,053
Accounts receivable (less allowance for doubtful accounts of $5,405 and $4,805 at September 30, 2018 and December 31, 2017, respectively)	219,444	180,725
Inventories	51,491	48,346
Other current assets	32,836	33,308
Total current assets	458,218	354,942
Property and equipment, net	85,505	81,075
Non-current assets
Goodwill	167,738	155,466
Intangibles, net	139,709	137,991
Other non-current assets	11,936	9,272
Total non-current assets	319,383	302,729
Total assets	863,106	738,746
Current liabilities
Current maturities of long-term debt	22,481	16,650
Current maturities of capital lease obligations	4,954	5,666
Accounts payable	94,781	87,425
Accrued compensation	25,370	25,399
Other current liabilities	29,510	24,666
Total current liabilities	177,096	159,806
Long-term debt	433,752	330,927
Capital lease obligations, less current maturities	3,870	6,479
Deferred income taxes	7,758	6,444
Other long-term liabilities	26,279	24,562
Total liabilities	648,755	528,218
Commitments and contingencies (Note 13)
Stockholders' equity
Preferred stock; $0.01 par value: 5,000,000 authorized and 0 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively
Common stock; $0.01 par value: 100,000,000 authorized, 32,723,972 and 32,524,934 issued and 31,224,974 and 31,862,146 shares outstanding at September 30, 2018 and December 31, 2017, respectively	327	325
Additional paid in capital	180,106	174,043
Retained earnings	88,736	48,434
Treasury stock; at cost: 1,498,998 and 662,788 shares at September 30, 2018 and December 31, 2017, respectively	(57,890)	(12,781)
Accumulated other comprehensive income	3,072	507
Total stockholders' equity	214,351	210,528
Total liabilities and stockholders' equity	$ 863,106	$ 738,746

XML

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 5,405	$ 4,805
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	32,723,972	32,524,934
Common stock, shares outstanding	31,224,974	31,862,146
Treasury Stock	1,498,998	662,788

XML

Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Income Statement [Abstract]
Net revenue	$ 348,999	$ 295,193	$ 983,311	$ 833,058
Cost of sales	251,665	209,612	710,358	590,377
Gross profit	97,334	85,581	272,953	242,681
Operating expenses
Selling	17,434	14,865	49,300	42,541
Administrative	48,337	41,657	137,511	122,679
Amortization	5,228	6,824	19,678	19,790
Operating income	26,335	22,235	66,464	57,671
Other expense
Interest expense, net	5,282	4,421	15,013	11,456
Other	132	83	417	366
Income before income taxes	20,921	17,731	51,034	45,849
Income tax provision	5,358	5,721	12,762	15,502
Net income	15,563	12,010	38,272	30,347
Other comprehensive income (loss), net of tax:
Unrealized gain (loss) on cash flow hedge, net of tax (provision)/benefit of ($278) and ($21) for the three months ended September 30, 2018 and 2017, respectively, and ($822) and $30 for the nine months ended September 30, 2018 and 2017, respectively	818	32	2,453	(45)
Comprehensive income	$ 16,381	$ 12,042	$ 40,725	$ 30,302
Basic net income per share	$ 0.50	$ 0.38	$ 1.22	$ 0.96
Diluted net income per share	$ 0.50	$ 0.38	$ 1.21	$ 0.96
Weighted average shares outstanding:
Basic	31,229,086	31,659,503	31,373,871	31,632,400
Diluted	31,312,756	31,766,881	31,512,104	31,712,515

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Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Income Statement [Abstract]
Unrealized gain (loss) on cash flow hedge, tax (provision) benefit	$ (278)	$ (21)	$ (822)	$ 30

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Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Total	Common Stock [Member]	Additional Paid In Capital [Member]	Retained Earnings [Member]	Treasury Stock [Member]	Accumulated Other Comprehensive Income [Member]
BALANCE at Dec. 31, 2016	$ 153,977	$ 321	$ 158,581	$ 7,294
BALANCE, Shares at Dec. 31, 2016		32,135,176
BALANCE, Treasury Stock, Value at Dec. 31, 2016					$ (12,219)
BALANCE, Treasury Stock, Shares at Dec. 31, 2016					(650,402)
Net income	30,347			30,347
Purchase of remaining interest in subsidiary	(1,890)		(1,890)
Issuance of common stock for acquisition, value	10,859	$ 3	10,856
Issuance of common stock for acquisition, shares		282,577
Issuance of common stock awards to employees, value		$ 1	(1)
Issuance of common stock awards to employees, shares		101,241
Surrender of common stock awards by employees, value	(550)				$ (550)
Surrender of common stock awards by employees, shares					(11,971)
Share-based compensation expense	4,360		4,360
Share-based compensation issued to directors, value	300		300
Share-based compensation issued to directors, shares		5,940
Other comprehensive (loss) income, net of tax	(45)					$ (45)
BALANCE at Sep. 30, 2017	197,358	$ 325	172,206	37,641		(45)
BALANCE, Shares at Sep. 30, 2017		32,524,934
BALANCE, Treasury Stock, Value at Sep. 30, 2017					$ (12,769)
BALANCE, Treasury Stock, Shares at Sep. 30, 2017					(662,373)
BALANCE at Dec. 31, 2017	$ 210,528	$ 325	174,043	48,434	$ (12,781)	507
BALANCE, Shares at Dec. 31, 2017	32,524,934	32,524,934
BALANCE, Treasury Stock, Value at Dec. 31, 2017	$ (12,781)				$ (12,781)
BALANCE, Treasury Stock, Shares at Dec. 31, 2017	(662,788)				(662,788)
Net income	$ 38,272			38,272
Cumulative effect of accounting changes, net of tax	2,142			2,030		112
Issuance of common stock awards to employees, value		$ 2	(2)
Issuance of common stock awards to employees, shares		194,093
Surrender of common stock awards by employees, value	(2,282)				$ (2,282)
Surrender of common stock awards by employees, shares					(42,799)
Share-based compensation expense	5,965		5,965
Share-based compensation issued to directors, value	100		100
Share-based compensation issued to directors, shares		4,945
Common stock repurchase, value	(42,827)				$ (42,827)
Common stock repurchase, shares					(793,411)
Other comprehensive (loss) income, net of tax	2,453					2,453
BALANCE at Sep. 30, 2018	$ 214,351	$ 327	$ 180,106	$ 88,736		$ 3,072
BALANCE, Shares at Sep. 30, 2018	32,723,972	32,723,972
BALANCE, Treasury Stock, Value at Sep. 30, 2018	$ (57,890)				$ (57,890)
BALANCE, Treasury Stock, Shares at Sep. 30, 2018	(1,498,998)				(1,498,998)

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Cash flows from operating activities
Net income	$ 38,272	$ 30,347
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization of property and equipment	24,567	20,732
Amortization of intangibles	19,678	19,790
Amortization of deferred financing costs and debt discount	883	768
Provision for doubtful accounts	2,219	2,208
Write-off of debt issuance costs	1,164	1,201
Gain on sale of property and equipment	(551)	(329)
Noncash stock compensation	6,089	4,750
Changes in assets and liabilities, excluding effects of acquisitions
Accounts receivable	(35,953)	(24,636)
Inventories	(6,799)	68
Other assets	(801)	695
Accounts payable	7,523	2,665
Income taxes receivable / payable	10,542	(10,167)
Other liabilities	2,016	5,249
Net cash provided by operating activities	68,849	53,341
Cash flows from investing activities
Purchases of investments	(22,818)	(25,195)
Maturities of short term investments	37,500
Purchases of property and equipment	(27,051)	(22,947)
Acquisitions of businesses, net of cash acquired of $0 and $247, respectively	(34,682)	(130,994)
Proceeds from sale of property and equipment	1,106	682
Other	(1,590)	(1,845)
Net cash used in investing activities	(47,535)	(180,299)
Cash flows from financing activities
Proceeds from term loan under credit agreement applicable to respective period (Note 6)	100,000	300,000
Payments on term loan under credit agreement applicable to respective period (Note 6)	(750)	(97,000)
Proceeds from delayed draw term loan under credit agreement applicable to respective period (Note 6)		112,500
Payments on delayed draw term loan under credit agreement applicable to respective period (Note 6)		(125,000)
Proceeds from vehicle and equipment notes payable	20,657	15,817
Debt issuance costs	(1,992)	(8,175)
Principal payments on long-term debt	(10,324)	(7,201)
Principal payments on capital lease obligations	(4,316)	(5,583)
Acquisition-related obligations	(2,901)	(3,434)
Repurchase of common stock	(42,827)
Surrender of common stock awards by employees	(2,282)	(550)
Purchase of remaining interest in subsidiary		(1,890)
Net cash provided by financing activities	55,265	179,484
Net change in cash and cash equivalents	76,579	52,526
Cash and cash equivalents at beginning of period	62,510	14,482
Cash and cash equivalents at end of period	139,089	67,008
Supplemental disclosures of cash flow information Net cash paid during the period for:
Interest	14,110	9,733
Income taxes, net of refunds	1,902	26,292
Supplemental disclosure of noncash investing and financing activities
Common stock issued for acquisition of business		10,859
Vehicles capitalized under capital leases and related lease obligations	1,034	4,073
Seller obligations in connection with acquisition of businesses	5,420	3,759
Unpaid purchases of property and equipment included in accounts payable	$ 615	$ 1,108

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Condensed Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Statement of Cash Flows [Abstract]
Cash acquired, Net	$ 0	$ 247

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Organization

9 Months Ended

Sep. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization

NOTE 1 – ORGANIZATION

Installed Building Products, Inc. (“IBP”), a Delaware corporation formed on October 28, 2011, and its wholly-owned subsidiaries (collectively referred to as the “Company” and “we,” “us” and “our”) primarily install insulation, waterproofing, fire-stopping, fireproofing, garage doors, rain gutters, shower doors, closet shelving and mirrors and other products for residential and commercial builders located in the continental United States. The Company operates in over 125 locations and its corporate office is located in Columbus, Ohio.

We have one operating segment and a single reportable segment. We offer our portfolio of services for new and existing single-family and multi-family residential and commercial building projects from our national network of branch locations. Each of our branches has the capacity to serve all of our end markets. See Note 3, Revenue Recognition, for information on our revenues by product and end market.

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Significant Accounting Policies

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Significant Accounting Policies

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

The accompanying Condensed Consolidated Financial Statements include all of our wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated.

The information furnished in the Condensed Consolidated Financial Statements includes normal recurring adjustments and reflects all adjustments which are, in the opinion of management, necessary for a fair presentation of the results of operations and statements of financial position for the interim periods presented. Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (the “SEC”) have been omitted pursuant to such rules and regulations. We believe that the disclosures are adequate to prevent the information presented from being misleading when read in conjunction with our audited consolidated financial statements and the notes thereto included in Part II, Item 8, Financial Statements and Supplementary Data, of our Annual Report on Form 10-K for the fiscal year ended December 31, 2017 (the “2017 Form 10-K”), as filed with the SEC on February 28, 2018. The December 31, 2017 condensed consolidated balance sheet data herein was derived from the audited consolidated financial statements but does not include all disclosures required by U.S. GAAP.

Our interim operating results for the three and nine months ended September 30, 2018 are not necessarily indicative of the results to be expected in future operating quarters. See Item 1A, Risk Factors, in our 2017 Form 10-K for additional information regarding risk factors that may impact our results.

Note 2 to the audited consolidated financial statements in our 2017 Form 10-K describes the significant accounting policies and estimates used in preparation of the audited consolidated financial statements. During the nine months ended September 30, 2018, we changed certain of our critical accounting policies and estimates from those previously disclosed in our 2017 Form 10-K, in relation to our revenue recognition and our hedge accounting policies as a result of the adoption of new accounting standards on January 1, 2018. Our revenue recognition accounting policy is described in Note 3, Revenue Recognition, and our hedge accounting policy is described in Note 8, Derivatives and Hedging Activities.

Recently Adopted Accounting Pronouncements

Standard	Adoption
ASU 2014-09, Revenue from Contracts with Customers (Topic 606)	ASC 606 sets forth a new revenue recognition model that requires identifying the contract(s) with a customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations and recognizing the revenue upon satisfaction of performance obligations. We adopted the provisions of ASU 2014-09 and related subsequently-issued amendments beginning on January 1, 2018 using the modified retrospective approach and, as such, recognized a $2.1 million cumulative effect, net of tax, of initially applying the standard as an increase to the opening balance of retained earnings on January 1, 2018. See Note 3, Revenue Recognition, for further information regarding our revenue recognition policies and the revisions to correct certain immaterial misstatements.
ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to accounting for Hedging Activities	ASU 2017-12 better aligns a company’s risk management activities and financial reporting for hedging relationships and makes certain improvements to simplify the application of hedge accounting guidance. For public business entities, this update is effective for financial statements issued for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years, with early adoption permitted. We elected to early adopt this ASU effective January 1, 2018 and, as such, recognized a $0.1 million adjustment to our opening retained earnings and accumulated other comprehensive income as of January 1, 2018 to reclassify the cash flow hedge ineffectiveness previously recorded in net income in the fourth quarter of 2017 to accumulated other comprehensive income.
ASU 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118	In March 2018, the Financial Accounting Standards Board issued ASU 2018-05, which became effective immediately. ASU 2018-05 adds various SEC paragraphs pursuant to the issuance of the December 2017 SEC Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”). See Note 11, Income Taxes, for additional information regarding the adoption of ASU 2018-05.
ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force)	ASU 2018-15 amends the existing accounting standards for capitalizing implementation costs of internal-use software by including service contracts in a cloud computing arrangement. For public business entities, this update is effective for financial statements issued for fiscal years beginning after December 15, 2019 and interim periods therein, with early adoption permitted. We elected to early adopt this ASU using the prospective approach effective July 1, 2018 and, as such, have capitalized certain implementation costs associated with service contracts in a cloud computing arrangement. The effects of adoption were not significant.

Recently Issued Accounting Pronouncements Not Yet Adopted

We are currently evaluating the impact of certain ASUs on our Condensed Consolidated Financial Statements or Notes to Consolidated Financial Statements, which are described below:

Standard	Description	Effective Date	Effect on the financial statements or other significant matters
ASU 2016-02, Leases (Topic 842)	This pronouncement and related subsequently-issued amendments change the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASC 842 requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief.	Annual periods beginning after December 15, 2018, including interim periods therein. Early adoption is permitted.	This ASU requires substantially all leases, with the exception of leases with a term of one year or less, to be recorded on the balance sheet as a lease liability measured as the present value of the future lease payments with a corresponding right-of-use asset. This ASU also requires disclosures designed to give financial statement users information on the amount, timing and uncertainty of cash flows. We anticipate taking advantage of the practical expedient options which allow an entity to not reassess whether any existing or expired contracts contain leases, not reassess lease classifications for existing or expired leases and not reassess initial direct costs for an existing lease. We are also evaluating other optional practical expedients and policy elections. The cumulative effect of adoption will be recorded to retained earnings in the period of adoption. We have completed the design phase of our implementation of this standard and are in the process of implementing changes to our systems and processes in conjunction with a review of existing lease agreements. Based on a preliminary assessment, we expect that substantially all of our operating lease commitments will be subject to the new guidance and recognized as operating lease liabilities and right-of-use assets upon adoption. We will adopt these standards effective January 1, 2019.

ASU 2016-13, Financial Instruments-Credit Losses (Topic 326)	This pronouncement amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. In addition, these amendments require the measurement of all expected credit losses for financial assets, including trade accounts receivable, held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts.	Annual periods beginning after December 15, 2019, including interim periods therein. Early adoption is permitted.	We are currently evaluating whether this ASU will have a material impact on our consolidated financial statements.
ASU 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment	To address concerns over the cost and complexity of the two-step goodwill impairment test, this pronouncement removes the second step of the goodwill impairment test. Going forward, an entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit.	Annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019, including interim periods therein. Early adoption is permitted.	We are currently evaluating the provisions of this ASU and the impact it will have on our disclosures.
ASU 2018-13, Fair Value Measurement (Topic 820):Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement	This pronouncement amends Topic 820 to eliminate, add and modify certain disclosure requirements for fair value measurements.	Annual periods beginning after December 15, 2019, including interim periods therein. Early adoption is permitted.	We are currently evaluating the provisions of this ASU and the impact it will have on our disclosures.

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Revenue Recognition

9 Months Ended

Sep. 30, 2018

Revenue from Contract with Customer [Abstract]

Revenue Recognition

NOTE 3 – REVENUE RECOGNITION

Adoption of ASC Topic 606, “Revenue from Contracts with Customers”

On January 1, 2018, we adopted the new accounting standard ASC 606, “Revenue from Contracts with Customers” using the modified retrospective method applied to those contracts that were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Topic 605.

We recorded a $2.1 million cumulative effect adjustment as an increase to opening retained earnings, a $2.8 million increase to other current assets and a $0.7 million increase to deferred income taxes, respectively, on January 1, 2018 due to the impact of adopting Topic 606, with the impact primarily related to the change in accounting for certain of our short-term contracts that were previously accounted for on a completed contract basis, whereas, under ASC 606, we now recognize revenue associated with these contracts over time as service is performed and the transfer of control occurs, based on a percentage-of-completion method using cost-to-cost input methods as a measure of progress. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. The cumulative effect adjustment has been revised from the amount previously disclosed in our interim financial statements filed on Form 10-Q for the quarterly periods ended March 31, 2018 and June 30, 2018 to correct certain immaterial misstatements. The result of correcting these misstatements was an $0.8 million decrease to opening retained earnings, a $1.0 million decrease to other current assets and a $0.2 million decrease to deferred income taxes recorded in the three months ended September 30, 2018.

Impact of New Revenue Recognition Standard on Financial Statement Line Items

The following table summarizes the impact of the new revenue standard on the Condensed Consolidated Balance Sheet as of September 30, 2018, including the cumulative effect of applying the new standard to all contracts upon adoption (in thousands):

	Impact of Change in Accounting Policy
	As reported		Adjustments			Without adoption
Inventories	$	51,491	$	7,003		$	58,494
Other current assets		32,836		(10,689	)		22,147
Total assets		863,106		(3,686	)		859,420
Deferred income taxes		7,758		(921	)		6,837
Retained earnings		88,736		(2,765	)		85,971
Total liabilities and stockholders’ equity		863,106		(3,686	)		859,420

The following table summarizes the impact of the new revenue standard on the Condensed Consolidated Statements of Operations and Comprehensive Income (in thousands):

	Three months ended September 30, 2018							Nine months ended September 30, 2018
	As reported		Adjustments			Without adoption		As reported		Adjustments			Without adoption
Net revenue	$	348,999	$	60		$	349,059	$	983,311	$	(2,612	)	$	980,699
Cost of sales		251,665		(207	)		251,458		710,358		(1,781	)		708,577
Income before income taxes	$	20,921	$	267		$	21,188	$	51,034	$	(831	)	$	50,203
Income tax provision		5,358		68			5,426		12,762		(208	)		12,554
Net income	$	15,563	$	199		$	15,762	$	38,272	$	(623	)	$	37,649

Revenue Recognition

Our revenues are derived primarily through contracts with customers whereby we install insulation and other complementary building products and are recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. We account for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. We recognize revenue using the percentage-of-completion method of accounting, utilizing a cost-to-cost input approach as we believe this represents the best measure of when goods and services are transferred to the customer. An insignificant portion of our sales, primarily retail sales, is accounted for on a point-in-time basis when the sale occurs, adjusted accordingly for any return provisions. We do offer assurance-type warranties on certain of our installed products and services that do not represent a separate performance obligation and, as such, do not impact the timing or extent of revenue recognition.

When the percentage-of-completion method is used, we estimate the costs to complete individual contracts and record as revenue that portion of the total contract price that is considered complete based on the relationship of costs incurred to date to total anticipated costs (the cost-to-cost approach). Under the cost-to-cost approach, the use of estimated costs to complete each contract is a significant variable in the process of determining recognized revenue, requires significant judgment and can change throughout the duration of a contract due to contract modifications and other factors impacting job completion. The costs of earned revenue include all direct material and labor costs and those indirect costs related to contract performance, such as indirect labor, supplies, tools and repairs. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined.

Our long-term contracts can be subject to modification to account for changes in contract specifications and requirements. We consider contract modifications to exist when the modification either creates new, or changes the existing, enforceable rights and obligations. Most of our contract modifications are for goods or services that are not distinct from the existing contract due to the significant integration service provided in the context of the contract and are accounted for as if they were part of that existing contract. The effect of a contract modification on the transaction price and our measure of progress for the performance obligation to which it relates, is recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) on a cumulative catch-up basis.

Billing on our long-term contracts occurs primarily on a monthly basis throughout the contract period whereby we submit invoices for customer payment based on actual or estimated costs incurred during the billing period. On certain of our long-term contracts the customer may withhold payment on an invoice equal to a percentage of the invoice amount, which will be subsequently paid after satisfactory completion of each installation project. This amount is referred to as retainage and is common practice in the construction industry, as it allows for customers to ensure the quality of the service performed prior to full payment. Retainage receivables are classified as current or long-term assets based on the expected time to project completion.

We disaggregate our revenue from contracts with customers by end market and product, as we believe it best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. The following tables present our revenues disaggregated by end market and product (in thousands):

	Three months ended September 30,								Nine months ended September 30,
	2018				2017(1)				2018				2017(1)
Residential new construction	$	268,254	77	%	$	228,526	77	%	$	755,800	77	%	$	637,915	77	%
Repair and remodel		23,107	7	%		18,722	6	%		65,453	7	%		53,597	6	%
Commercial		57,638	16	%		47,945	17	%		162,058	16	%		141,546	17	%
Net revenues	$	348,999	100	%	$	295,193	100	%	$	983,311	100	%	$	833,058	100	%

	Three months ended September 30,								Nine months ended September 30,
	2018				2017(1)				2018				2017(1)
Insulation	$	225,503	65	%	$	195,872	66	%	$	646,270	66	%	$	561,462	67	%
Waterproofing		25,980	7	%		21,571	7	%		73,477	7	%		64,695	8	%
Shower doors, shelving and mirrors		23,190	7	%		21,849	7	%		66,222	7	%		53,107	6	%
Garage doors		21,781	6	%		15,874	6	%		56,574	6	%		45,338	5	%
Rain gutters		12,163	4	%		10,863	4	%		31,429	3	%		29,493	4	%
Blinds		7,811	2	%		2,634	1	%		21,196	2	%		5,909	1	%
Other building products		32,571	9	%		26,530	9	%		88,143	9	%		73,054	9	%
Net revenues	$	348,999	100	%	$	295,193	100	%	$	983,311	100	%	$	833,058	100	%

⁽¹⁾  As noted above, prior period amounts have not been adjusted under the modified retrospective method.

Contract Assets and Liabilities

Our contract assets consist of unbilled amounts typically resulting from sales under contracts when the cost-to-cost method of revenue recognition is utilized and revenue recognized, based on costs incurred, exceeds the amount billed to the customer. Our contract assets are recorded in other current assets in our Consolidated Balance Sheets. Our contract liabilities consist of customer deposits and billings in excess of revenue recognized, based on costs incurred and is included in other current liabilities in our Consolidated Balance Sheets. For presentation purposes, uncompleted contracts as of December 31, 2017 have been restated to reflect the adoption of ASC 606 on January 1, 2018.

Contract assets and liabilities related to our uncompleted contracts and customer deposits were as follows (in thousands):

	September 30,			December 31,
	2018			2017
Contract assets	$	17,229		$	14,476
Contract liabilities		(8,039	)		(7,519	)

Uncompleted contracts were as follows (in thousands):

	September 30, 2018		December 31, 2017
Costs incurred on uncompleted contracts	$	112,444	$	84,563
Estimated earnings		57,834		47,000
Total		170,278		131,563
Less: Billings to date		158,218		122,144
Net under (over) billings	$	12,060	$	9,419

Net under (over) billings were as follows (in thousands):

	September 30, 2018			December 31, 2017
Costs and estimated earnings in excess of billings on uncompleted contracts (contract assets)	$	17,229		$	14,476
Billings in excess of costs and estimated earnings on uncompleted contracts (contract liabilities)		(5,169	)		(5,057	)
Net under (over) billings	$	12,060		$	9,419

During the three and nine months ended September 30, 2018, we recognized $0.1 and $7.0 million of revenue, respectively, that was included in the contract liability balance at December 31, 2017. We did not recognize any impairment losses on our receivables and contract assets during the three and nine months ended September 30, 2018.

Remaining performance obligations represent the transaction price of contracts for which work has not been performed and excludes unexercised contract options and potential modifications. As of September 30, 2018, the aggregate amount of the transaction price allocated to remaining uncompleted contracts was $87.1 million. We expect to recognize revenue on substantially all of these uncompleted contracts over the next 18 months.

Practical Expedients and Exemptions

We generally expense sales commissions and other incremental costs of obtaining a contract when incurred because the amortization period is usually one year or less. Sales commissions are recorded within selling expenses on the Condensed Consolidated Statements of Operations and Comprehensive Income.

We do not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less.

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Investments

9 Months Ended

Sep. 30, 2018

Investments, Debt and Equity Securities [Abstract]

Investments

NOTE 4 – INVESTMENTS

Cash and cash equivalents includes investments in money market funds that are valued based on the net asset value of the funds. The investments in these funds were $117.7 million and $55.6 million as of September 30, 2018 and December 31, 2017, respectively. The increase from December 31, 2017 primarily stems from an additional $100.0 million in loan proceeds received in connection with our term loan amendment that took place on June 19, 2018. See Note 6, Long-Term Debt, for additional information.

All other investments are classified as held-to-maturity and consist of highly liquid instruments, primarily including corporate bonds and commercial paper. As of September 30, 2018 and December 31, 2017, the amortized cost of these investments equaled the net carrying value, which was $15.4 million and $30.1 million, respectively. All held-to-maturity securities as of September 30, 2018 mature in one year or less. See Note 7, Fair Value Measurements, for additional information.

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Goodwill and Intangibles

9 Months Ended

Sep. 30, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangibles

NOTE 5 – GOODWILL AND INTANGIBLES

Goodwill

The change in carrying amount of goodwill was as follows (in thousands):

	Goodwill (Gross)		Accumulated Impairment Losses			Goodwill (Net)
January 1, 2018	$	225,470	$	(70,004	)	$	155,466
Business Combinations		11,771		—			11,771
Other		501		—			501
September 30, 2018	$	237,742	$	(70,004	)	$	167,738

Other changes included in the above table represent minor adjustments for the allocation of certain acquisitions still under measurement and one immaterial acquisition completed during the nine months ended September 30, 2018.

We test goodwill for impairment annually during the fourth quarter of our fiscal year or earlier if there is an impairment indicator. No impairment was recognized during either of the nine month periods ended September 30, 2018 or 2017.

Intangibles, net

The following table provides the gross carrying amount, accumulated amortization and net book value for each major class of intangibles (in thousands):

	As of September 30, 2018						As of December 31, 2017
	Gross Carrying Amount		Accumulated Amortization		Net Book Value		Gross Carrying Amount		Accumulated Amortization		Net Book Value
Amortized intangibles:
Customer relationships	$	135,900	$	48,668	$	87,232	$	121,015	$	38,651	$	82,364
Covenants not-to-compete		13,780		6,826		6,954		11,807		4,773		7,034
Trademarks and trade names		62,248		17,166		45,082		58,136		14,076		44,060
Backlog		14,060		13,619		441		13,600		9,067		4,533
	$	225,988	$	86,279	$	139,709	$	204,558	$	66,567	$	137,991

The gross carrying amount of intangibles increased approximately $21.4 million during the nine months ended September 30, 2018 primarily due to business combinations. See Note 14, Business Combinations, for more information. Remaining estimated aggregate annual amortization expense is as follows (amounts, in thousands, are for the fiscal year ended):

Remainder of 2018	5,442
2019	21,332
2020	20,400
2021	19,094
2022	18,176
Thereafter	55,265

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Long-Term Debt

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

Long-Term Debt

NOTE 6 – LONG-TERM DEBT

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

	As of September 30,			As of December 31,
	2018			2017
Term loan, net of unamortized debt issuance costs of $5,026 and $5,146, respectively	$	392,724		$	293,354
Vehicle and equipment notes, maturing September 2023; payable in various monthly installments, including interest rates ranging from 2.5% to 4.8%		59,992			50,357
Various notes payable, maturing through March 2025; payable in various monthly installments, including interest rates ranging from 4% to 6%		3,517			3,866
		456,233			347,577
Less: current maturities		(22,481	)		(16,650	)
Long-term debt, less current maturities	$	433,752		$	330,927

On April 13, 2017, we entered into, and subsequently amended on November 30, 2017, a term loan credit agreement (the “Term Loan Agreement”) which provided for a seven-year $300.0 million term loan facility (the “Term Loan”) and an asset-based lending credit agreement (the “ABL Credit Agreement”) which provided for up to approximately $100.0 million with a sublimit up to $50.0 million for the issuance of letters of credit (the “ABL Revolver”), which may be reduced or increased pursuant to the ABL Credit Agreement.

On June 19, 2018, we entered into a second amendment to the Term Loan Agreement (the “Term Loan Second Amendment”) to (i) extend the maturity date from April 15, 2024 to April 15, 2025 and (ii) increase the aggregate principal amount of the facility from $297.8 million to $397.8 million. In conjunction with the Term Loan Second Amendment, we wrote off fees of $1.1 million. All other provisions of the Term Loan Agreement were unchanged.

Also on June 19, 2018, we entered into a third amendment to the ABL Credit Agreement (the “ABL Third Amendment”) to (i) extend the maturity date from April 13, 2022 to June 19, 2023, (ii) increase the aggregate revolving loan commitments from $100.0 million to $150.0 million and (iii) provide enhanced borrowing availability against certain types of accounts receivable.

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Fair Value Measurements

9 Months Ended

Sep. 30, 2018

Fair Value Disclosures [Abstract]

Fair Value Measurements

NOTE 7 – FAIR VALUE MEASUREMENTS

Assets and Liabilities Measured at Fair Value on a Recurring Basis

In many cases, a valuation technique used to measure fair value includes inputs from multiple levels of the fair value hierarchy. The lowest level of significant input determines the placement of the entire fair value measurement in the hierarchy. During the periods presented, there were no transfers between fair value hierarchical levels.

Assets Measured at Fair Value on a Nonrecurring Basis

Certain assets, specifically other intangible and long-lived assets, are measured at fair value on a nonrecurring basis in periods subsequent to initial recognition. Assets measured at fair value on a nonrecurring basis as of September 30, 2018 and December 31, 2017 are categorized based on the lowest level of significant input to the valuation. The assets are measured at fair value when our impairment assessment indicates a carrying value for each of the assets in excess of the asset’s estimated fair value. Undiscounted cash flows, a Level 3 input, are utilized in determining estimated fair values. During each of the three and nine months ended September 30, 2018 and 2017, we did not record any impairments on these assets required to be measured at fair value on a nonrecurring basis.

Estimated Fair Value of Financial Instruments

Accounts receivable, accounts payable and accrued liabilities as of September 30, 2018 and December 31, 2017 approximate fair value due to the short-term maturities of these financial instruments. The carrying amounts of our long-term debt, including the Term Loan and ABL Revolver as of September 30, 2018 and December 31, 2017, approximate fair value due to the variable rate nature of the agreements. The carrying amounts of the obligations associated with our capital leases and vehicle and equipment notes approximate fair value as of September 30, 2018 and December 31, 2017. All debt classifications represent Level 2 fair value measurements.

Derivative financial instruments are measured at fair value based on observable market information and appropriate valuation methods. Contingent consideration liabilities arise from future earnout payments to the sellers associated with certain acquisitions and are based on predetermined calculations of certain future results. These future payments are estimated by considering various factors, including business risk and projections. The contingent consideration liabilities are measured at fair value by discounting estimated future payments to their net present value using the appropriate weighted average cost of capital (WACC). The fair values of financial assets and liabilities that are recorded at fair value in the Condensed Consolidated Balance Sheets and not described above were as follows (in thousands):

	As of September 30, 2018								As of December 31, 2017
	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Financial assets:
Cash equivalents	$	117,688	$	117,688	$	—	$	—	$	55,634	$	55,634	$	—	$	—
Derivative financial instruments		4,370		—		4,370		—		618		—		618		—
Total financial assets	$	122,058	$	117,688	$	4,370	$	—	$	56,252	$	55,634	$	618	$	—
Financial liabilities:
Derivative financial instruments	$	271	$	—	$	271	$	—	$	—	$	—	$	—	$	—
Contingent consideration		4,900		—		—		4,900		1,834		—		—		1,834
Total financial liabilities	$	5,171	$	—	$	271	$	4,900	$	1,834	$	—	$	—	$	1,834

The change in fair value of the contingent consideration was as follows (in thousands):

Contingent consideration liability - January 1, 2018	$	1,834
Preliminary purchase price		3,653
Fair value adjustments		(586	)
Accretion in value		399
Amounts paid to sellers		(400	)
Contingent consideration liability - September 30, 2018	$	4,900

The accretion in value of contingent consideration liabilities is included within administrative expenses on the Condensed Consolidated Statements of Operations and Comprehensive Income.

The carrying values and associated fair values of financial assets and liabilities that are not recorded at fair value in the Condensed Consolidated Balance Sheets and not described above include investments which represent a Level 2 fair value measurement and are as follows (in thousands):

	As of September 30, 2018				As of December 31, 2017
	Carrying Value		Fair Value		Carrying Value		Fair Value
Financial assets:
Investments	$	15,358	$	15,343	$	30,053	$	30,038

See Note 4, Investments, for more information on cash equivalents and investments included in the table above. Also see Note 8, Derivatives and Hedging Activities, for more information on derivative financial instruments.

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Derivatives and Hedging Activities

9 Months Ended

Sep. 30, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives and Hedging Activities

NOTE 8 – DERIVATIVES AND HEDGING ACTIVITIES

Cash Flow Hedges of Interest Rate Risk

Our purpose for using interest rate derivatives is to add stability to interest expense and to manage our exposure to interest rate movements. During the first nine months of 2018, such derivatives were used to hedge the variable cash flows associated with existing variable-rate debt. To accomplish these objectives, we primarily use interest rate swaps as part of our interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. As of September 30, 2018, we had two interest rate swaps, each with an associated floor, with a total beginning notional of $200.0 million, one that amortizes quarterly to $95.3 million at a maturity date of May 31, 2022 and one that amortizes quarterly to $93.3 million at a maturity date of April 15, 2025. We also had a forward interest rate swap with an associated floor beginning May 31, 2022 with a beginning notional of $100.0 million that amortizes quarterly to $97.0 million at a maturity date of April 15, 2025. Combined, these three swaps serve to hedge $200.0 million of the variable cash flows on our Term Loan until maturity. As of December 31, 2017, we had one interest rate swap with an associated floor with a beginning notional of $100.0 million that amortizes quarterly to $95.3 million at a maturity date of May 31, 2022.

The changes in the fair value of derivatives designated and that qualify as cash flow hedges are recorded in accumulated other comprehensive income and subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. We had no such changes during the nine months ended September 30, 2018.

Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense, net as interest payments are made on our variable-rate debt. Over the next twelve months, we estimate that an additional $0.4 million will be reclassified as a decrease to interest expense, net.

Additionally, we do not use derivatives for trading or speculative purposes and we currently do not have any derivatives that are not designated as hedges. As of September 30, 2018, the Company has not posted any collateral related to these agreements.

We elected to early adopt ASU 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.” as of January 1, 2018 and, as such, recognized a $0.1 million adjustment to our opening retained earnings and accumulated other comprehensive income as of January 1, 2018 to reclassify the cash flow hedge ineffectiveness previously recorded in net income in the fourth quarter of 2017 to accumulated other comprehensive income.

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Stockholders' Equity

9 Months Ended

Sep. 30, 2018

Federal Home Loan Banks [Abstract]

Stockholders' Equity

NOTE 9 – STOCKHOLDERS’ EQUITY

As of September 30, 2018, we had $3.1 million in accumulated other comprehensive income on our Condensed Consolidated Balance Sheet, which represents the unrealized gain on our derivative instruments. For additional information, see Note 8, Derivatives and Hedging Activities.

On February 28, 2018, we announced that our Board of Directors authorized a $50.0 million stock repurchase program effective March 2, 2018 through February 28, 2019, unless extended by the Board of Directors. See Note 16, Subsequent Events, for information regarding an additional stock repurchase program authorized by the Board of Directors effective November 5, 2018. During the three and nine months ended September 30, 2018, we repurchased approximately 380 thousand and 793 thousand shares of our common stock, respectively. The aggregate purchase price of our 2018 stock repurchase plan was approximately $18.2 million and $42.8 million, or $47.75 and $53.96 average price per share, for the three and nine months ended September 30, 2018, respectively. The effect of these treasury shares reducing the number of common shares outstanding is reflected in our earnings per share calculation.

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Employee Benefits

9 Months Ended

Sep. 30, 2018

Postemployment Benefits [Abstract]

Employee Benefits

NOTE 10 – EMPLOYEE BENEFITS

Healthcare

Our healthcare benefit expense (net of employee contributions) for all plans was approximately $4.5 million and $4.1 million for the three months ended September 30, 2018 and 2017, respectively, and $13.3 million and $12.4 million for the nine months ended September 30, 2018 and 2017, respectively. An accrual for estimated healthcare claims incurred but not reported (“IBNR”) is included within accrued compensation on the Condensed Consolidated Balance Sheets and was $2.1 million and $1.9 million as of September 30, 2018 and December 31, 2017, respectively.

Workers’ Compensation

Workers’ compensation expense totaled $4.4 million and $3.1 million for the three months ended September 30, 2018 and 2017, respectively, and $9.7 million and $9.8 million for the nine months ended September 30, 2018 and 2017, respectively. Workers’ compensation known claims and IBNR reserves included on the Condensed Consolidated Balance Sheets were as follows (in thousands):

	September 30,		December 31,
	2018		2017
Included in other current liabilities	$	5,276	$	5,899
Included in other long-term liabilities		10,190		8,721
	$	15,466	$	14,620

We also had an insurance receivable for claims that exceeded the stop loss limit included on the Condensed Consolidated Balance Sheets. This receivable offsets an equal liability included within the reserve amounts noted above and was as follows (in thousands):

	September 30,		December 31,
	2018		2017
Included in other non-current assets	$	1,894	$	1,826

Retirement Plans

We participate in multiple 401(k) plans, whereby we provide a matching contribution of wages deferred by employees and can also make discretionary contributions to each plan. Certain plans allow for discretionary employer contributions only. These plans cover substantially all our eligible employees. We recognized 401(k) plan expenses of $0.3 million and $1.2 million during the three and nine months ended September 30, 2018 and $0.4 million and $1.3 million during the three and nine months ended September 30, 2017, respectively. These expenses are included in administrative expenses on the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income.

Share-Based Compensation

Common Stock Awards

During the nine months ended September 30, 2018 and 2017, we granted approximately five thousand and six thousand shares of our common stock on June 1, respectively, under our 2014 Omnibus Incentive Plan to non-employee members of our Board of Directors. The stock issued to the Board of Directors on June 1, 2017 vested immediately, whereas the stock issued on June 1, 2018 will vest over a one year service term. Accordingly, for the nine months ended September 30, 2017, we recorded approximately $0.3 million in compensation expense within administrative expenses on the Condensed Consolidated Statements of Operations and Comprehensive Income at the time of the grant, while $25 thousand and $0.1 million of compensation expense was recorded during the three and nine months ending September 30, 2018.

In addition, during each of the nine months ended September 30, 2018 and 2017, we granted approximately 0.1 million shares of our common stock under our 2014 Omnibus Incentive Plan to our employees. The shares granted during each of the nine months ended September 30, 2018 and 2017 vest in three equal installments (rounded to the nearest whole share) annually on April 20^th through 2021.

During the nine months ended September 30, 2018 and 2017, our employees surrendered approximately forty-one thousand shares and ten thousand shares, respectively, of our common stock to satisfy tax withholding obligations arising in connection with the vesting of common stock awards issued under our 2014 Omnibus Incentive Plan. Share-based compensation expense associated with non-performance-based awards issued to employees was $1.0 million and $2.9 million for the three and nine months ended September 30, 2018, respectively, and $0.8 million and $1.9 million for the three and nine months ended September 30, 2017, respectively. We recognized excess tax benefits of $0.5 million and $0.6 million within the income tax provision in the Condensed Consolidated Statements of Operations and Comprehensive Income for the nine months ended September 30, 2018 and 2017, respectively. We did not recognize any such excess tax benefits in the three months ended September 30, 2018 or 2017.

As of September 30, 2018, we had $6.1 million of unrecognized compensation expense related to these nonvested common stock awards issued to the Board of Directors and our employees. This expense is subject to future adjustments for forfeitures and is expected to be recognized on a straight-line basis over the remaining weighted-average period of 1.9 years. Shares forfeited are returned as treasury shares and available for future issuances. See the table below for changes in shares and related weighted average fair market value per share.

Employees – Performance-Based Stock Awards

During the nine months ended September 30, 2018, we granted under our 2014 Omnibus Incentive Plan approximately 0.1 million shares of our common stock to certain officers, which vest in two equal installments on each of April 20, 2019 and April 20, 2020. These shares were issued in connection with the performance-based targets established in 2017. In addition, during the nine months ended September 30, 2018, we established, and our Board of Directors approved, performance-based targets in connection with common stock awards to be issued to certain officers in 2019 contingent upon achievement of these 2018 targets. Share-based compensation expense associated with these performance-based awards was $0.6 million and $1.6 million for the three and nine months ended September 30, 2018, respectively, and $0.3 million and $0.7 million for the three and nine months ended September 30, 2017, respectively.

As of September 30, 2018, we had $3.6 million of unrecognized compensation expense related to nonvested performance-based common stock awards. This expense is subject to future adjustments for forfeitures and is expected to be recognized over the remaining weighted-average period of 1.8 years using the graded-vesting method. See the table below for changes in shares and related weighted average fair market value per share.

Employees – Performance-Based Restricted Stock Units

During the nine months ended September 30, 2017, we established, and our Board of Directors approved, performance-based restricted stock units in connection with common stock awards which we issued to certain employees during the nine months ended September 30, 2018. In addition, during the nine months ended September 30, 2018, we established, and our Board of Directors approved, performance-based restricted stock units in connection with common stock awards to be issued to certain employees in 2019 based upon achievement of a performance target. Share-based compensation expense associated with these performance-based awards was $0.3 million and $1.5 million for the three and nine months ended September 30, 2018, respectively, and $1.0 million and $1.7 million for the three and nine months ended September 30, 2017, respectively. All restricted stock units are accounted for as equity-based awards that are settled with a fixed number of common shares.

As of September 30, 2018, we had $0.4 million of unrecognized compensation expense related to nonvested performance-based common stock units. This expense is subject to future adjustments for forfeitures and is expected to be recognized on a straight-line basis over the remaining weighted-average period of 0.5 years. See the table below for changes in shares and related weighted average fair market value per share.

Share-Based Compensation Summary

Amounts for each category of equity-based award for employees as of December 31, 2017 and changes during the nine months ended September 30, 2018 were as follows:

	Common Stock Awards					Performance-Based Stock Awards					Performance-Based Restricted Stock Units
	Awards			Weighted Average Fair Market Value Per Share		Awards			Weighted Average Fair Market Value Per Share		Units			Weighted Average Fair Market Value Per Share
Nonvested awards/units at December 31, 2017		202,331		$	39.09		77,254		$	41.00		72,000		$	52.16
Granted		65,112			57.51		52,892			65.60		14,072			55.92
Vested		(90,952	)		36.10		—			—		(71,120	)		52.15
Forfeited/Cancelled		(2,010	)		48.63		(14,448	)		41.00		(1,564	)		53.14
Nonvested awards/units at September 30, 2018		174,481		$	47.42		115,698		$	52.25		13,388		$	56.05

During the three and nine months ended September 30, 2018 and 2017, we recorded the following stock compensation expense, by income statement category (in thousands):

	Three months ended September 30,				Nine months ended September 30,
	2018		2017		2018		2017
Cost of sales	$	94	$	507	$	749	$	507
Selling		30		292		402		292
Administrative		1,769		1,380		4,938		3,950
	$	1,893	$	2,179	$	6,089	$	4,749

Administrative stock compensation expense includes all stock compensation earned by our administrative personnel, while cost of sales and selling stock compensation represents all stock compensation earned by our installation and sales employees, respectively.

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Income Taxes

9 Months Ended

Sep. 30, 2018

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 11 – INCOME TAXES

Our provision for income taxes as a percentage of pretax earnings is based on a current estimate of the annual effective income tax rate adjusted to reflect the impact of discrete items.

During the three and nine months ended September 30, 2018, our effective tax rate was 25.6% and 25.0%, respectively. This rate was favorably impacted primarily by the enactment of Pub.L. 115–97, an Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018 (the “Tax Act”). The Tax Act reduced the U.S federal corporate tax rate from 35% to 21% effective January 1, 2018, among other changes. ASC Topic 740, Accounting for Income Taxes, requires companies to recognize the effect of tax law changes in the period of enactment. Pursuant to ASU 2018-05 and Staff Accounting Bulletin No. 118 (“SAB 118”) issued by the Securities and Exchange Commission, a company is expected to record a provisional amount when it does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain tax effects of the Tax Act, but a reasonable estimate can be determined. A provisional amount is not required to be recorded if a reasonable estimate cannot be determined.

We have recognized the provisional tax impacts of the Tax Act in our consolidated financial statements for the year ended December 31, 2017 included within our 2017 Form 10-K. Based on a review of the guidance issued by the Internal Revenue Service in the first, second and third quarters of 2018, no adjustment to the provisional amount recorded in the Condensed Consolidated Financial Statements for the year ended December 31, 2017 was deemed necessary. We continue to assess new guidance and refine our computation of these provisional amounts and will complete our analysis within the one-year measurement period ending December 22, 2018.

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Related Party Transactions

9 Months Ended

Sep. 30, 2018

Related Party Transactions [Abstract]

Related Party Transactions

NOTE 12 – RELATED PARTY TRANSACTIONS

We sell installation services to other companies related to us through common or affiliated ownership and/or Board of Directors and/or management relationships. We also purchase services and materials and pay rent to companies with common or affiliated ownership.

We lease our headquarters and certain other facilities from related parties. See Note 13, Commitments and Contingencies, for future minimum lease payments to be paid to these related parties.

For the three and nine months ended September 30, 2018 and 2017, the amount of sales to related parties as well as the purchases from and rent expense paid to related parties were as follows (in thousands):

	Three months ended September 30,				Nine months ended September 30,
	2018		2017		2018		2017
Sales	$	3,259	$	2,641	$	9,361	$	7,363
Purchases		372		302		1,207		901
Rent		257		290		829		875

As of September 30, 2018 and December 31, 2017, we had related party balances of approximately $2.4 million and $2.0 million, respectively, included in accounts receivable on our Condensed Consolidated Balance Sheets. These balances primarily represent trade accounts receivable arising during the normal course of business with various related parties. M/I Homes, Inc., a customer whose Chairman, President and Chief Executive Officer is a member of our Board of Directors, accounted for $1.4 million and $1.0 million of these balances as of each of September 30, 2018 and December 31, 2017, respectively.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

NOTE 13 – COMMITMENTS AND CONTINGENCIES

Accrued General Liability

Accrued general insurance reserves included on the Condensed Consolidated Balance Sheets were as follows (in thousands):

	September 30,		December 31,
	2018		2017
Included in other current liabilities	$	2,029	$	2,033
Included in other long-term liabilities		7,787		7,073
	$	9,816	$	9,106

We also had insurance receivables and an indemnification asset, totaling $2.5 million and $2.8 million included in other non-current assets on the Condensed Consolidated Balance Sheets as of September 30, 2018 and December 31, 2017, respectively, that, in aggregate, offset an equal liability included within the reserve amounts noted above.

Leases

We are obligated under capital leases covering vehicles and certain equipment. The vehicle and equipment leases generally have initial terms ranging from four to six years. Total gross assets relating to capital leases were approximately $60.9 million and $63.4 million as of September 30, 2018 and December 31, 2017, respectively, and a total of approximately $32.3 million and $26.8 million were fully depreciated as of September 30, 2018 and December 31, 2017, respectively. The net book value of assets under capital leases was approximately $9.7 million and $13.0 million as of September 30, 2018 and December 31, 2017, respectively. Amortization of assets held under capital leases is included within cost of sales on the Condensed Consolidated Statements of Operations and Comprehensive Income.

We also have several noncancellable operating leases, primarily for buildings, improvements, equipment and certain vehicles. These leases generally contain renewal options for periods ranging from one to five years and require us to pay all executory costs such as property taxes, maintenance and insurance.

Future minimum lease payments under noncancellable operating leases (with initial or remaining lease terms in excess of one year) with related parties as of September 30, 2018 are as follows (in thousands):

Remainder of 2018	$	294
2019		1,249
2020		1,277
2021		1,154
2022		1,073
Thereafter		51

Other Commitments and Contingencies

From time to time, various claims and litigation are asserted or commenced against us principally arising from contractual matters and personnel and employment disputes. In determining loss contingencies, management considers the likelihood of loss as well as the ability to reasonably estimate the amount of such loss or liability. An estimated loss is recorded when it is considered probable that such a liability has been incurred and when the amount of loss can be reasonably estimated. As litigation is subject to inherent uncertainties, we cannot be certain that we will prevail in these matters. However, we do not believe that the ultimate outcome of any pending matters will have a material adverse effect on our consolidated financial position, results of operations or cash flows.

During the nine months ended September 30, 2018, we entered into an agreement with one of our suppliers to purchase a portion of the insulation materials we utilize across our business. This agreement is effective January 1, 2019 through December 31, 2021 with a purchase obligation of $25.8 million for 2019, $20.8 million for 2020 and $14.6 million for 2021.

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Business Combinations

9 Months Ended

Sep. 30, 2018

Business Combinations [Abstract]

Business Combinations

NOTE 14 – BUSINESS COMBINATIONS

As part of our ongoing strategy to expand geographically and increase market share in certain markets, we completed eight business combinations and one minor acquisition merged into existing operations during the nine months ended September 30, 2018 and seven business combinations and two minor acquisitions merged into existing operations during the nine months ended September 30, 2017, respectively, in which we acquired 100% of the ownership interests in each.

The largest of these acquisitions were Custom Overhead Door, LLC dba Custom Door & Gate (collectively, “CDG”) in March 2018, Trilok Industries, Inc., Alpha Insulation and Waterproofing Inc. and Alpha Insulation and Waterproofing Company (collectively, “Alpha”) in January 2017, Columbia Shelving & Mirror, Inc. and Charleston Shelving & Mirror, Inc. (collectively, “Columbia”) in June 2017, and All In Insulation, LLC d/b/a/ Astro Insulation (collectively, “Astro”) in September 2017. The remaining acquisitions were individually insignificant, but material in the aggregate, and are included in “Other” within each table below. Net Income, as noted below, includes amortization, taxes and interest allocations when appropriate.

For the three and nine months ended September 30, 2018 (in thousands):

									Total Purchase Price		Three months ended				Nine months ended
			Acquisition				Seller				September 30, 2018				September 30, 2018
2018 Acquisitions	Date		Type		Cash Paid		Obligations				Revenue		Net Income		Revenue		Net Income
CDG		3/19/2018		Asset	$	9,440	$	1,973	$	11,413	$	3,848	$	164	$	7,572	$	229
Other		Various		Shares/Asset		25,242		3,447		28,689		7,003		42		12,782		423
Total					$	34,682	$	5,420	$	40,102	$	10,851	$	206	$	20,354	$	652

For the three and nine months ended September 30, 2017 (in thousands):

									Fair Value of Common Stock		Total Purchase Price		Three months ended September 30, 2017					Nine months ended September 30, 2017
2017 Acquisitions	Date		Acquisition Type		Cash Paid		Seller Obligations						Revenue		Net (Loss) Income			Revenue		Net Income
Alpha(1)		1/5/2017		Share	$	103,810	$	2,002	$	10,859	$	116,671	$	29,334	$	(271	)	$	87,830	$	190
Columbia		6/26/2017		Asset		8,768		225		—		8,993		3,026		73			3,241		80
Astro		9/18/2017		Asset		9,144		482		—		9,626		264		46			264		46
Other		Various		Asset		9,812		1,042		—		10,854		6,499		84			11,671		366
Total					$	131,534	$	3,751	$	10,859	$	146,144	$	39,123	$	(68	)	$	103,006	$	682

⁽¹⁾  The cash paid included $21.7 million in contingent consideration to satisfy purchase price adjustments related to cash and net working capital requirements, earnout consideration based on Alpha’s change in EBITDA from 2015 and a customary holdback. These payments were based on fair value of each contingent payment at the time of acquisition and subsequently adjusted during the measurement period. We issued 282,577 shares of our common stock with a fair value of $10.9 million.

Acquisition-related costs recorded within administrative expenses on the Condensed Consolidated Statements of Operations and Comprehensive Income amounted to $0.7 million and $1.9 million for the three and nine months ended September 30, 2018, respectively, and $0.9 million and $2.3 million for the three and nine months ended September 30, 2017, respectively. The goodwill recognized in conjunction with these business combinations represents the excess cost of the acquired entity over the net amount assigned to assets acquired and liabilities assumed. We expect to deduct approximately $12.4 million of goodwill for tax purposes as a result of 2018 acquisitions.

Purchase Price Allocations

The estimated fair values of the assets acquired and liabilities assumed for the acquisitions, as well as total purchase prices and cash paid, approximated the following as of September 30 (in thousands):

	2018									2017
	CDG			Other			Total			Alpha			Columbia			Astro			Other			Total
Estimated fair values:
Cash	$	—		$	—		$	—		$	247		$	—		$	—		$	—		$	247
Accounts receivable		1,731			3,306			5,037			29,851			989			924			2,070			33,834
Inventories		514			1,027			1,541			1,852			704			296			1,014			3,866
Other current assets		28			892			920			4,500			8			36			8			4,552
Property and equipment		933			1,893			2,826			1,528			659			640			1,144			3,971
Intangibles		3,711			16,681			20,392			57,200			4,760			5,168			5,939			73,067
Goodwill		4,898			6,873			11,771			38,511			2,209			2,932			2,472			46,124
Other non-current assets		36			19			55			383			36			—			176			595
Accounts payable and other current liabilities		(438	)		(2,002	)		(2,440	)		(17,401	)		(372	)		(370	)		(1,969	)		(20,112	)
Fair value of assets acquired and purchase price		11,413			28,689			40,102			116,671			8,993			9,626			10,854			146,144
Less fair value of common stock issued		—			—			—			10,859			—			—			—			10,859
Less seller obligations		1,973			3,447			5,420			2,002			225			482			1,042			3,751
Cash paid	$	9,440		$	25,242		$	34,682		$	103,810		$	8,768		$	9,144		$	9,812		$	131,534

Contingent consideration is included as “seller obligations” in the above table or within “fair value of assets acquired” if subsequently paid during the period presented. These contingent payments consist primarily of earnouts based on performance that are recorded at fair value at the time of acquisition, and/or non-complete agreements and amounts based on working capital calculations. When these payments are expected to be made over one year from the acquisition date, the contingent consideration is discounted to net present value using our weighted average cost of capital (WACC), when appropriate.

Further adjustments to the allocation for each acquisition still under its measurement period are expected as third-party and internal valuations are finalized, certain tax aspects of the transaction are completed and customary post-closing reviews are concluded during the measurement period attributable to each individual business combination. As a result, insignificant adjustments to the fair value of assets acquired, and in some cases total purchase price, have been made to certain business combinations since the date of acquisition and future adjustments may be made through the end of each measurement period. Goodwill and intangibles per the above table do not agree to the total gross increases of these assets as shown in Note 5, Goodwill and Intangibles, during each of the nine months ended September 30, 2018 and 2017 due to minor adjustments to goodwill for the allocation of certain acquisitions still under measurement. In addition, goodwill and intangibles increased during each of the nine months ended September 30, 2018 and 2017 due to small acquisitions merged into existing operations that do not appear in the above table.

The provisional amounts for Alpha originally reported in our Condensed Consolidated Balance Sheets included in our Quarterly Report on Form 10-Q for the period ended March 31, 2017 were adjusted during the measurement period to reflect the review and ongoing analysis of the fair value measurements. As a result of our continued evaluation during the measurement period, during the twelve months ended December 31, 2017, we increased goodwill by approximately $2.1 million, offset by a corresponding net reduction in various working capital accounts.

The provisional amounts for Columbia originally reported in our Condensed Consolidated Balance Sheets included in our Quarterly Report on Form 10-Q for the period ended June 30, 2017 were adjusted to reflect the review and ongoing analysis of the fair value measurements. As a result of our continued evaluation during the measurement period, we increased goodwill by approximately $0.5 million and our seller obligations by approximately $0.4 million for an adjustment to the fair value of a working capital contingent liability. These adjustments, as well as various other insignificant adjustments, resulted in a total purchase price increase for Columbia of approximately $0.6 million as reflected within the above table and were within applicable measurement period guidelines.

Estimates of acquired intangible assets related to the acquisitions are as follows for the nine months ended September 30 (dollars in thousands):

	2018				2017
Acquired intangibles assets	Estimated Fair Value		Weighted Average Estimated Useful Life (yrs.)		Estimated Fair Value		Weighted Average Estimated Useful Life (yrs.)
Customer relationships	$	14,480		8	$	37,533		8
Trademarks and trade names		3,920		14		19,403		15
Non-competition agreements		1,530		5		2,429		5
Backlog		460		2		13,400		1.5

Pro Forma Information

The unaudited pro forma information for the combined results of the Company has been prepared as if the 2018 acquisitions had taken place on January 1, 2017 and the 2017 acquisitions had taken place on January 1, 2016. The unaudited pro forma information is not necessarily indicative of the results that we would have achieved had the transactions actually taken place on January 1, 2017 and 2016, respectively, and the unaudited pro forma information does not purport to be indicative of future financial operating results (in thousands, except per share data):

	Unaudited pro forma for the three months ended September 30,				Unaudited pro forma for the nine months ended September 30,
	2018		2017		2018		2017
Net revenue	$	353,609	$	316,382	$	1,006,313	$	906,283
Net income		16,215		13,020		40,305		34,277
Basic and diluted net income per share		0.52		0.41		1.28		1.08

Unaudited pro forma net income reflects additional intangible asset amortization expense of $0.2 million and $1.2 million for the three and nine months ended September 30, 2018 and $0.9 million and $3.2 million for the three and nine months ended September 30, 2017, respectively, as well as additional income tax expense of $0.2 million and $0.7 million for the three and nine months ended September 30, 2018 and $0.5 million and $2.0 million for the three and nine months ended September 30, 2017, respectively, that would have been recorded had the 2018 acquisitions taken place on January 1, 2017 and the 2017 acquisitions taken place on January 1, 2016.

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Income Per Common Share

9 Months Ended

Sep. 30, 2018

Earnings Per Share [Abstract]

Income Per Common Share

NOTE 15 –INCOME PER COMMON SHARE

Basic net income per common share is calculated by dividing net income by the weighted average shares outstanding during the period, without consideration for common stock equivalents.

Diluted net income per common share is calculated by adjusting weighted average shares outstanding for the dilutive effect of common stock equivalents outstanding for the period, determined using the treasury stock method. Potential common stock is included in the diluted income per common share calculation when dilutive. The dilutive effect of outstanding restricted stock awards after application of the treasury stock method was 84 thousand and 138 thousand shares for the three and nine months ended September 30, 2018, respectively, and 107 thousand and 80 thousand shares for the three and nine months ended September 30, 2017, respectively.

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Subsequent Events

9 Months Ended

Sep. 30, 2018

Subsequent Events [Abstract]

Subsequent Events

NOTE 16 – SUBSEQUENT EVENTS

On October 31, 2018, we acquired substantially all of the assets of Advanced Fiber Technology, a manufacturer of cellulose, asphalt and industrial fibers. The initial accounting for the business combination was not complete at the time the financial statements were issued due to the timing of the acquisition and the filing of this Quarterly Report on Form 10-Q. As a result, disclosures required under ASC 805-10-50, Business Combinations, cannot be made at this time.

On October 31, 2018, IBP’s Board of Directors approved an additional stock repurchase program, effective November 5, 2018, pursuant to which we may purchase up to an additional $100 million of our outstanding common stock. The program will remain in effect until February 28, 2020, unless extended by the Board of Directors.

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Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Basis of Presentation and Principles of Consolidation

Basis of Presentation and Principles of Consolidation

The accompanying Condensed Consolidated Financial Statements include all of our wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated.

The information furnished in the Condensed Consolidated Financial Statements includes normal recurring adjustments and reflects all adjustments which are, in the opinion of management, necessary for a fair presentation of the results of operations and statements of financial position for the interim periods presented. Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (the “SEC”) have been omitted pursuant to such rules and regulations. We believe that the disclosures are adequate to prevent the information presented from being misleading when read in conjunction with our audited consolidated financial statements and the notes thereto included in Part II, Item 8, Financial Statements and Supplementary Data, of our Annual Report on Form 10-K for the fiscal year ended December 31, 2017 (the “2017 Form 10-K”), as filed with the SEC on February 28, 2018. The December 31, 2017 condensed consolidated balance sheet data herein was derived from the audited consolidated financial statements but does not include all disclosures required by U.S. GAAP.

Our interim operating results for the three and nine months ended September 30, 2018 are not necessarily indicative of the results to be expected in future operating quarters. See Item 1A, Risk Factors, in our 2017 Form 10-K for additional information regarding risk factors that may impact our results.

Note 2 to the audited consolidated financial statements in our 2017 Form 10-K describes the significant accounting policies and estimates used in preparation of the audited consolidated financial statements. During the nine months ended September 30, 2018, we changed certain of our critical accounting policies and estimates from those previously disclosed in our 2017 Form 10-K, in relation to our revenue recognition and our hedge accounting policies as a result of the adoption of new accounting standards on January 1, 2018. Our revenue recognition accounting policy is described in Note 3, Revenue Recognition, and our hedge accounting policy is described in Note 8, Derivatives and Hedging Activities.

Recently Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements

Standard	Adoption
ASU 2014-09, Revenue from Contracts with Customers (Topic 606)	ASC 606 sets forth a new revenue recognition model that requires identifying the contract(s) with a customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations and recognizing the revenue upon satisfaction of performance obligations. We adopted the provisions of ASU 2014-09 and related subsequently-issued amendments beginning on January 1, 2018 using the modified retrospective approach and, as such, recognized a $2.1 million cumulative effect, net of tax, of initially applying the standard as an increase to the opening balance of retained earnings on January 1, 2018. See Note 3, Revenue Recognition, for further information regarding our revenue recognition policies and the revisions to correct certain immaterial misstatements.
ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to accounting for Hedging Activities	ASU 2017-12 better aligns a company’s risk management activities and financial reporting for hedging relationships and makes certain improvements to simplify the application of hedge accounting guidance. For public business entities, this update is effective for financial statements issued for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years, with early adoption permitted. We elected to early adopt this ASU effective January 1, 2018 and, as such, recognized a $0.1 million adjustment to our opening retained earnings and accumulated other comprehensive income as of January 1, 2018 to reclassify the cash flow hedge ineffectiveness previously recorded in net income in the fourth quarter of 2017 to accumulated other comprehensive income.
ASU 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118	In March 2018, the Financial Accounting Standards Board issued ASU 2018-05, which became effective immediately. ASU 2018-05 adds various SEC paragraphs pursuant to the issuance of the December 2017 SEC Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”). See Note 11, Income Taxes, for additional information regarding the adoption of ASU 2018-05.
ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force)	ASU 2018-15 amends the existing accounting standards for capitalizing implementation costs of internal-use software by including service contracts in a cloud computing arrangement. For public business entities, this update is effective for financial statements issued for fiscal years beginning after December 15, 2019 and interim periods therein, with early adoption permitted. We elected to early adopt this ASU using the prospective approach effective July 1, 2018 and, as such, have capitalized certain implementation costs associated with service contracts in a cloud computing arrangement. The effects of adoption were not significant.

Recently Issued Accounting Pronouncements Not Yet Adopted

Recently Issued Accounting Pronouncements Not Yet Adopted

We are currently evaluating the impact of certain ASUs on our Condensed Consolidated Financial Statements or Notes to Consolidated Financial Statements, which are described below:

Standard	Description	Effective Date	Effect on the financial statements or other significant matters
ASU 2016-02, Leases (Topic 842)	This pronouncement and related subsequently-issued amendments change the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASC 842 requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief.	Annual periods beginning after December 15, 2018, including interim periods therein. Early adoption is permitted.	This ASU requires substantially all leases, with the exception of leases with a term of one year or less, to be recorded on the balance sheet as a lease liability measured as the present value of the future lease payments with a corresponding right-of-use asset. This ASU also requires disclosures designed to give financial statement users information on the amount, timing and uncertainty of cash flows. We anticipate taking advantage of the practical expedient options which allow an entity to not reassess whether any existing or expired contracts contain leases, not reassess lease classifications for existing or expired leases and not reassess initial direct costs for an existing lease. We are also evaluating other optional practical expedients and policy elections. The cumulative effect of adoption will be recorded to retained earnings in the period of adoption. We have completed the design phase of our implementation of this standard and are in the process of implementing changes to our systems and processes in conjunction with a review of existing lease agreements. Based on a preliminary assessment, we expect that substantially all of our operating lease commitments will be subject to the new guidance and recognized as operating lease liabilities and right-of-use assets upon adoption. We will adopt these standards effective January 1, 2019.

ASU 2016-13, Financial Instruments-Credit Losses (Topic 326)	This pronouncement amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. In addition, these amendments require the measurement of all expected credit losses for financial assets, including trade accounts receivable, held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts.	Annual periods beginning after December 15, 2019, including interim periods therein. Early adoption is permitted.	We are currently evaluating whether this ASU will have a material impact on our consolidated financial statements.
ASU 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment	To address concerns over the cost and complexity of the two-step goodwill impairment test, this pronouncement removes the second step of the goodwill impairment test. Going forward, an entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit.	Annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019, including interim periods therein. Early adoption is permitted.	We are currently evaluating the provisions of this ASU and the impact it will have on our disclosures.
ASU 2018-13, Fair Value Measurement (Topic 820):Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement	This pronouncement amends Topic 820 to eliminate, add and modify certain disclosure requirements for fair value measurements.	Annual periods beginning after December 15, 2019, including interim periods therein. Early adoption is permitted.	We are currently evaluating the provisions of this ASU and the impact it will have on our disclosures.

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Revenue Recognition (Tables)

9 Months Ended

Sep. 30, 2018

Revenue from Contract with Customer [Abstract]

Summary of Impact of Adopting Topic 606 on Condensed Consolidated Balance Sheet, Condensed Consolidated Statements of Operations and Comprehensive Income

The following table summarizes the impact of the new revenue standard on the Condensed Consolidated Balance Sheet as of September 30, 2018, including the cumulative effect of applying the new standard to all contracts upon adoption (in thousands):

	Impact of Change in Accounting Policy
	As reported		Adjustments			Without adoption
Inventories	$	51,491	$	7,003		$	58,494
Other current assets		32,836		(10,689	)		22,147
Total assets		863,106		(3,686	)		859,420
Deferred income taxes		7,758		(921	)		6,837
Retained earnings		88,736		(2,765	)		85,971
Total liabilities and stockholders’ equity		863,106		(3,686	)		859,420

The following table summarizes the impact of the new revenue standard on the Condensed Consolidated Statements of Operations and Comprehensive Income (in thousands):

	Three months ended September 30, 2018							Nine months ended September 30, 2018
	As reported		Adjustments			Without adoption		As reported		Adjustments			Without adoption
Net revenue	$	348,999	$	60		$	349,059	$	983,311	$	(2,612	)	$	980,699
Cost of sales		251,665		(207	)		251,458		710,358		(1,781	)		708,577
Income before income taxes	$	20,921	$	267		$	21,188	$	51,034	$	(831	)	$	50,203
Income tax provision		5,358		68			5,426		12,762		(208	)		12,554
Net income	$	15,563	$	199		$	15,762	$	38,272	$	(623	)	$	37,649

Summary of Revenues Disaggregated by End Market and Product

The following tables present our revenues disaggregated by end market and product (in thousands):

	Three months ended September 30,								Nine months ended September 30,
	2018				2017(1)				2018				2017(1)
Residential new construction	$	268,254	77	%	$	228,526	77	%	$	755,800	77	%	$	637,915	77	%
Repair and remodel		23,107	7	%		18,722	6	%		65,453	7	%		53,597	6	%
Commercial		57,638	16	%		47,945	17	%		162,058	16	%		141,546	17	%
Net revenues	$	348,999	100	%	$	295,193	100	%	$	983,311	100	%	$	833,058	100	%

	Three months ended September 30,								Nine months ended September 30,
	2018				2017(1)				2018				2017(1)
Insulation	$	225,503	65	%	$	195,872	66	%	$	646,270	66	%	$	561,462	67	%
Waterproofing		25,980	7	%		21,571	7	%		73,477	7	%		64,695	8	%
Shower doors, shelving and mirrors		23,190	7	%		21,849	7	%		66,222	7	%		53,107	6	%
Garage doors		21,781	6	%		15,874	6	%		56,574	6	%		45,338	5	%
Rain gutters		12,163	4	%		10,863	4	%		31,429	3	%		29,493	4	%
Blinds		7,811	2	%		2,634	1	%		21,196	2	%		5,909	1	%
Other building products		32,571	9	%		26,530	9	%		88,143	9	%		73,054	9	%
Net revenues	$	348,999	100	%	$	295,193	100	%	$	983,311	100	%	$	833,058	100	%

⁽¹⁾  As noted above, prior period amounts have not been adjusted under the modified retrospective method.

Summary of Assets and Liabilities Related to Uncompleted Contracts and Customer Deposits

Contract assets and liabilities related to our uncompleted contracts and customer deposits were as follows (in thousands):

	September 30,			December 31,
	2018			2017
Contract assets	$	17,229		$	14,476
Contract liabilities		(8,039	)		(7,519	)

Schedule of Cost and Estimated Earnings on Uncompleted Contracts

Uncompleted contracts were as follows (in thousands):

	September 30, 2018		December 31, 2017
Costs incurred on uncompleted contracts	$	112,444	$	84,563
Estimated earnings		57,834		47,000
Total		170,278		131,563
Less: Billings to date		158,218		122,144
Net under (over) billings	$	12,060	$	9,419

Schedule of Net Under (Over) Billings

Net under (over) billings were as follows (in thousands):

	September 30, 2018			December 31, 2017
Costs and estimated earnings in excess of billings on uncompleted contracts (contract assets)	$	17,229		$	14,476
Billings in excess of costs and estimated earnings on uncompleted contracts (contract liabilities)		(5,169	)		(5,057	)
Net under (over) billings	$	12,060		$	9,419

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Goodwill and Intangibles (Tables)

9 Months Ended

Sep. 30, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Summary of Change in Carrying Amount of Goodwill

The change in carrying amount of goodwill was as follows (in thousands):

	Goodwill (Gross)		Accumulated Impairment Losses			Goodwill (Net)
January 1, 2018	$	225,470	$	(70,004	)	$	155,466
Business Combinations		11,771		—			11,771
Other		501		—			501
September 30, 2018	$	237,742	$	(70,004	)	$	167,738

Schedule of Gross Carrying Amount, Accumulated Amortization and Net Book Value

The following table provides the gross carrying amount, accumulated amortization and net book value for each major class of intangibles (in thousands):

	As of September 30, 2018						As of December 31, 2017
	Gross Carrying Amount		Accumulated Amortization		Net Book Value		Gross Carrying Amount		Accumulated Amortization		Net Book Value
Amortized intangibles:
Customer relationships	$	135,900	$	48,668	$	87,232	$	121,015	$	38,651	$	82,364
Covenants not-to-compete		13,780		6,826		6,954		11,807		4,773		7,034
Trademarks and trade names		62,248		17,166		45,082		58,136		14,076		44,060
Backlog		14,060		13,619		441		13,600		9,067		4,533
	$	225,988	$	86,279	$	139,709	$	204,558	$	66,567	$	137,991

Schedule of Estimated Aggregate Annual Amortization

Remaining estimated aggregate annual amortization expense is as follows (amounts, in thousands, are for the fiscal year ended):

Remainder of 2018	5,442
2019	21,332
2020	20,400
2021	19,094
2022	18,176
Thereafter	55,265

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Long-Term Debt (Tables)

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

Schedule of Debt

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

	As of September 30,			As of December 31,
	2018			2017
Term loan, net of unamortized debt issuance costs of $5,026 and $5,146, respectively	$	392,724		$	293,354
Vehicle and equipment notes, maturing September 2023; payable in various monthly installments, including interest rates ranging from 2.5% to 4.8%		59,992			50,357
Various notes payable, maturing through March 2025; payable in various monthly installments, including interest rates ranging from 4% to 6%		3,517			3,866
		456,233			347,577
Less: current maturities		(22,481	)		(16,650	)
Long-term debt, less current maturities	$	433,752		$	330,927

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2018

Fair Value Disclosures [Abstract]

Schedule of Fair Values of Financial Assets and Liabilities

The fair values of financial assets and liabilities that are recorded at fair value in the Condensed Consolidated Balance Sheets and not described above were as follows (in thousands):

	As of September 30, 2018								As of December 31, 2017
	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Financial assets:
Cash equivalents	$	117,688	$	117,688	$	—	$	—	$	55,634	$	55,634	$	—	$	—
Derivative financial instruments		4,370		—		4,370		—		618		—		618		—
Total financial assets	$	122,058	$	117,688	$	4,370	$	—	$	56,252	$	55,634	$	618	$	—
Financial liabilities:
Derivative financial instruments	$	271	$	—	$	271	$	—	$	—	$	—	$	—	$	—
Contingent consideration		4,900		—		—		4,900		1,834		—		—		1,834
Total financial liabilities	$	5,171	$	—	$	271	$	4,900	$	1,834	$	—	$	—	$	1,834

Summary of Change in Fair Value of Contingent Consideration

The change in fair value of the contingent consideration was as follows (in thousands):

Contingent consideration liability - January 1, 2018	$	1,834
Preliminary purchase price		3,653
Fair value adjustments		(586	)
Accretion in value		399
Amounts paid to sellers		(400	)
Contingent consideration liability - September 30, 2018	$	4,900

Summary of Carrying Values and Associated Fair Values of Financial Assets and Liabilities

The carrying values and associated fair values of financial assets and liabilities that are not recorded at fair value in the Condensed Consolidated Balance Sheets and not described above include investments which represent a Level 2 fair value measurement and are as follows (in thousands):

	As of September 30, 2018				As of December 31, 2017
	Carrying Value		Fair Value		Carrying Value		Fair Value
Financial assets:
Investments	$	15,358	$	15,343	$	30,053	$	30,038

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Employee Benefits (Tables)

9 Months Ended

Sep. 30, 2018

Postemployment Benefits [Abstract]

Summary of Workers' Compensation Known Claims and IBNR Reserves

Workers’ compensation known claims and IBNR reserves included on the Condensed Consolidated Balance Sheets were as follows (in thousands):

	September 30,		December 31,
	2018		2017
Included in other current liabilities	$	5,276	$	5,899
Included in other long-term liabilities		10,190		8,721
	$	15,466	$	14,620

Schedule of Insurance Receivable for Claims

This receivable offsets an equal liability included within the reserve amounts noted above and was as follows (in thousands):

	September 30,		December 31,
	2018		2017
Included in other non-current assets	$	1,894	$	1,826

Summary of Equity-based Awards for Employees

Amounts for each category of equity-based award for employees as of December 31, 2017 and changes during the nine months ended September 30, 2018 were as follows:

	Common Stock Awards					Performance-Based Stock Awards					Performance-Based Restricted Stock Units
	Awards			Weighted Average Fair Market Value Per Share		Awards			Weighted Average Fair Market Value Per Share		Units			Weighted Average Fair Market Value Per Share
Nonvested awards/units at December 31, 2017		202,331		$	39.09		77,254		$	41.00		72,000		$	52.16
Granted		65,112			57.51		52,892			65.60		14,072			55.92
Vested		(90,952	)		36.10		—			—		(71,120	)		52.15
Forfeited/Cancelled		(2,010	)		48.63		(14,448	)		41.00		(1,564	)		53.14
Nonvested awards/units at September 30, 2018		174,481		$	47.42		115,698		$	52.25		13,388		$	56.05

Summary of Stock Compensation Expenses

During the three and nine months ended September 30, 2018 and 2017, we recorded the following stock compensation expense, by income statement category (in thousands):

	Three months ended September 30,				Nine months ended September 30,
	2018		2017		2018		2017
Cost of sales	$	94	$	507	$	749	$	507
Selling		30		292		402		292
Administrative		1,769		1,380		4,938		3,950
	$	1,893	$	2,179	$	6,089	$	4,749

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Related Party Transactions (Tables)

9 Months Ended

Sep. 30, 2018

Related Party Transactions [Abstract]

Schedule of Common or Related Party Transactions

For the three and nine months ended September 30, 2018 and 2017, the amount of sales to related parties as well as the purchases from and rent expense paid to related parties were as follows (in thousands):

	Three months ended September 30,				Nine months ended September 30,
	2018		2017		2018		2017
Sales	$	3,259	$	2,641	$	9,361	$	7,363
Purchases		372		302		1,207		901
Rent		257		290		829		875

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Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Schedule of Accrued General Insurance Reserves

Accrued general insurance reserves included on the Condensed Consolidated Balance Sheets were as follows (in thousands):

	September 30,		December 31,
	2018		2017
Included in other current liabilities	$	2,029	$	2,033
Included in other long-term liabilities		7,787		7,073
	$	9,816	$	9,106

Future Minimum Lease Payments Under Noncancellable Operating Leases

Future minimum lease payments under noncancellable operating leases (with initial or remaining lease terms in excess of one year) with related parties as of September 30, 2018 are as follows (in thousands):

Remainder of 2018	$	294
2019		1,249
2020		1,277
2021		1,154
2022		1,073
Thereafter		51

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Business Combinations (Tables)

9 Months Ended

Sep. 30, 2018

Business Combinations [Abstract]

Schedule of Business Combinations

As part of our ongoing strategy to expand geographically and increase market share in certain markets, we completed eight business combinations and one minor acquisition merged into existing operations during the nine months ended September 30, 2018 and seven business combinations and two minor acquisitions merged into existing operations during the nine months ended September 30, 2017, respectively, in which we acquired 100% of the ownership interests in each.

The largest of these acquisitions were Custom Overhead Door, LLC dba Custom Door & Gate (collectively, “CDG”) in March 2018, Trilok Industries, Inc., Alpha Insulation and Waterproofing Inc. and Alpha Insulation and Waterproofing Company (collectively, “Alpha”) in January 2017, Columbia Shelving & Mirror, Inc. and Charleston Shelving & Mirror, Inc. (collectively, “Columbia”) in June 2017, and All In Insulation, LLC d/b/a/ Astro Insulation (collectively, “Astro”) in September 2017. The remaining acquisitions were individually insignificant, but material in the aggregate, and are included in “Other” within each table below. Net Income, as noted below, includes amortization, taxes and interest allocations when appropriate.

For the three and nine months ended September 30, 2018 (in thousands):

									Total Purchase Price		Three months ended				Nine months ended
			Acquisition				Seller				September 30, 2018				September 30, 2018
2018 Acquisitions	Date		Type		Cash Paid		Obligations				Revenue		Net Income		Revenue		Net Income
CDG		3/19/2018		Asset	$	9,440	$	1,973	$	11,413	$	3,848	$	164	$	7,572	$	229
Other		Various		Shares/Asset		25,242		3,447		28,689		7,003		42		12,782		423
Total					$	34,682	$	5,420	$	40,102	$	10,851	$	206	$	20,354	$	652

For the three and nine months ended September 30, 2017 (in thousands):

									Fair Value of Common Stock		Total Purchase Price		Three months ended September 30, 2017					Nine months ended September 30, 2017
2017 Acquisitions	Date		Acquisition Type		Cash Paid		Seller Obligations						Revenue		Net (Loss) Income			Revenue		Net Income
Alpha(1)		1/5/2017		Share	$	103,810	$	2,002	$	10,859	$	116,671	$	29,334	$	(271	)	$	87,830	$	190
Columbia		6/26/2017		Asset		8,768		225		—		8,993		3,026		73			3,241		80
Astro		9/18/2017		Asset		9,144		482		—		9,626		264		46			264		46
Other		Various		Asset		9,812		1,042		—		10,854		6,499		84			11,671		366
Total					$	131,534	$	3,751	$	10,859	$	146,144	$	39,123	$	(68	)	$	103,006	$	682

⁽¹⁾  The cash paid included $21.7 million in contingent consideration to satisfy purchase price adjustments related to cash and net working capital requirements, earnout consideration based on Alpha’s change in EBITDA from 2015 and a customary holdback. These payments were based on fair value of each contingent payment at the time of acquisition and subsequently adjusted during the measurement period. We issued 282,577 shares of our common stock with a fair value of $10.9 million.

Summary of Estimated Fair Value of Assets Acquired and Liabilities Assumed

The estimated fair values of the assets acquired and liabilities assumed for the acquisitions, as well as total purchase prices and cash paid, approximated the following as of September 30 (in thousands):

	2018									2017
	CDG			Other			Total			Alpha			Columbia			Astro			Other			Total
Estimated fair values:
Cash	$	—		$	—		$	—		$	247		$	—		$	—		$	—		$	247
Accounts receivable		1,731			3,306			5,037			29,851			989			924			2,070			33,834
Inventories		514			1,027			1,541			1,852			704			296			1,014			3,866
Other current assets		28			892			920			4,500			8			36			8			4,552
Property and equipment		933			1,893			2,826			1,528			659			640			1,144			3,971
Intangibles		3,711			16,681			20,392			57,200			4,760			5,168			5,939			73,067
Goodwill		4,898			6,873			11,771			38,511			2,209			2,932			2,472			46,124
Other non-current assets		36			19			55			383			36			—			176			595
Accounts payable and other current liabilities		(438	)		(2,002	)		(2,440	)		(17,401	)		(372	)		(370	)		(1,969	)		(20,112	)
Fair value of assets acquired and purchase price		11,413			28,689			40,102			116,671			8,993			9,626			10,854			146,144
Less fair value of common stock issued		—			—			—			10,859			—			—			—			10,859
Less seller obligations		1,973			3,447			5,420			2,002			225			482			1,042			3,751
Cash paid	$	9,440		$	25,242		$	34,682		$	103,810		$	8,768		$	9,144		$	9,812		$	131,534

Estimates of Acquired Intangible Assets

Estimates of acquired intangible assets related to the acquisitions are as follows for the nine months ended September 30 (dollars in thousands):

	2018				2017
Acquired intangibles assets	Estimated Fair Value		Weighted Average Estimated Useful Life (yrs.)		Estimated Fair Value		Weighted Average Estimated Useful Life (yrs.)
Customer relationships	$	14,480		8	$	37,533		8
Trademarks and trade names		3,920		14		19,403		15
Non-competition agreements		1,530		5		2,429		5
Backlog		460		2		13,400		1.5

Pro Forma Results of Operations

The unaudited pro forma information for the combined results of the Company has been prepared as if the 2018 acquisitions had taken place on January 1, 2017 and the 2017 acquisitions had taken place on January 1, 2016. The unaudited pro forma information is not necessarily indicative of the results that we would have achieved had the transactions actually taken place on January 1, 2017 and 2016, respectively, and the unaudited pro forma information does not purport to be indicative of future financial operating results (in thousands, except per share data):

	Unaudited pro forma for the three months ended September 30,				Unaudited pro forma for the nine months ended September 30,
	2018		2017		2018		2017
Net revenue	$	353,609	$	316,382	$	1,006,313	$	906,283
Net income		16,215		13,020		40,305		34,277
Basic and diluted net income per share		0.52		0.41		1.28		1.08

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Organization - Additional Information (Detail)	9 Months Ended
	Sep. 30, 2018 Location Segment
Basis Of Presentation And Organization [Line Items]
Number of operating segment | Segment	1
United States [Member]
Basis Of Presentation And Organization [Line Items]
Number of locations the company operates | Location	125

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Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Thousands		3 Months Ended	9 Months Ended
	Jan. 01, 2018	Sep. 30, 2018	Sep. 30, 2018
Accounting Policies and General Information [Line Items]
Cumulative effect, net of tax			$ 2,142
Accounting Standards Update 2014-09 [Member]
Accounting Policies and General Information [Line Items]
Cumulative effect, net of tax	$ 2,100	$ (800)
Accounting Standards Update 2017-12 [Member]
Accounting Policies and General Information [Line Items]
Adjustment to retained earnings and accumulated other comprehensive income to reclassify cash flow hedge	$ 100

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Revenue Recognition - Additional Information (Detail) - USD ($) $ in Thousands			3 Months Ended	9 Months Ended
	Sep. 30, 2018	Jan. 01, 2018	Sep. 30, 2018	Sep. 30, 2018
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cumulative effect adjustment as an increase to opening retained earnings, net of tax				$ 2,142
Contract liability revenue recognized			$ 100	7,000
Transaction price allocated to uncompleted contracts	$ 87,100		87,100	$ 87,100
Expected time of revenue recognition	Over the next 18 months.
Performance obligation, description of timing				One year or less.
Accounting Standards Update 2014-09 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cumulative effect adjustment as an increase to opening retained earnings, net of tax		$ 2,100	(800)
Increase (decrease) in other current assets		2,800	(1,000)
Increase (decrease) in deferred income taxes		$ 700	$ (200)

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Revenue Recognition - Summary of Impact of Adopting Topic 606 on Condensed Consolidated Balance Sheet (Detail) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Revenue from Contract with Customers [Line Items]
Inventories	$ 51,491	$ 48,346
Other current assets	32,836	33,308
Total assets	863,106	738,746
Deferred income taxes	7,758	6,444
Retained earnings	88,736	48,434
Total liabilities and stockholders' equity	863,106	$ 738,746
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Accounting Standards Update 2014-09 [Member]
Revenue from Contract with Customers [Line Items]
Inventories	7,003
Other current assets	(10,689)
Total assets	(3,686)
Deferred income taxes	(921)
Retained earnings	(2,765)
Total liabilities and stockholders' equity	(3,686)
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | Accounting Standards Update 2014-09 [Member]
Revenue from Contract with Customers [Line Items]
Inventories	58,494
Other current assets	22,147
Total assets	859,420
Deferred income taxes	6,837
Retained earnings	85,971
Total liabilities and stockholders' equity	$ 859,420

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Revenue Recognition - Summary of Impact of Adopting Topic 606 on Condensed Consolidated Statements of Operations and Comprehensive Income (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Revenue from Contract with Customers [Line Items]
Net revenue	$ 348,999	$ 295,193	$ 983,311	$ 833,058
Cost of sales	251,665	209,612	710,358	590,377
Income before income taxes	20,921	17,731	51,034	45,849
Income tax provision	5,358	5,721	12,762	15,502
Net income	15,563	$ 12,010	38,272	$ 30,347
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Accounting Standards Update 2014-09 [Member]
Revenue from Contract with Customers [Line Items]
Net revenue	60		(2,612)
Cost of sales	(207)		(1,781)
Income before income taxes	267		(831)
Income tax provision	68		(208)
Net income	199		(623)
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | Accounting Standards Update 2014-09 [Member]
Revenue from Contract with Customers [Line Items]
Net revenue	349,059		980,699
Cost of sales	251,458		708,577
Income before income taxes	21,188		50,203
Income tax provision	5,426		12,554
Net income	$ 15,762		$ 37,649

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Revenue Recognition - Summary of Revenues Disaggregated by End Market and Product (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Disaggregation of Revenue [Line Items]
Net revenues	$ 348,999	$ 295,193	$ 983,311	$ 833,058
Revenue [Member] | Customer Concentration Risk [Member]
Disaggregation of Revenue [Line Items]
Percentage of Net revenues	100.00%	100.00%	100.00%	100.00%
Insulation [Member]
Disaggregation of Revenue [Line Items]
Net revenues	$ 225,503	$ 195,872	$ 646,270	$ 561,462
Insulation [Member] | Revenue [Member] | Customer Concentration Risk [Member]
Disaggregation of Revenue [Line Items]
Percentage of Net revenues	65.00%	66.00%	66.00%	67.00%
Waterproofing [Member]
Disaggregation of Revenue [Line Items]
Net revenues	$ 25,980	$ 21,571	$ 73,477	$ 64,695
Waterproofing [Member] | Revenue [Member] | Customer Concentration Risk [Member]
Disaggregation of Revenue [Line Items]
Percentage of Net revenues	7.00%	7.00%	7.00%	8.00%
Shower Doors, Shelving and Mirrors [Member]
Disaggregation of Revenue [Line Items]
Net revenues	$ 23,190	$ 21,849	$ 66,222	$ 53,107
Shower Doors, Shelving and Mirrors [Member] | Revenue [Member] | Customer Concentration Risk [Member]
Disaggregation of Revenue [Line Items]
Percentage of Net revenues	7.00%	7.00%	7.00%	6.00%
Garage Doors [Member]
Disaggregation of Revenue [Line Items]
Net revenues	$ 21,781	$ 15,874	$ 56,574	$ 45,338
Garage Doors [Member] | Revenue [Member] | Customer Concentration Risk [Member]
Disaggregation of Revenue [Line Items]
Percentage of Net revenues	6.00%	6.00%	6.00%	5.00%
Rain Gutters [Member]
Disaggregation of Revenue [Line Items]
Net revenues	$ 12,163	$ 10,863	$ 31,429	$ 29,493
Rain Gutters [Member] | Revenue [Member] | Customer Concentration Risk [Member]
Disaggregation of Revenue [Line Items]
Percentage of Net revenues	4.00%	4.00%	3.00%	4.00%
Blinds [Member]
Disaggregation of Revenue [Line Items]
Net revenues	$ 7,811	$ 2,634	$ 21,196	$ 5,909
Blinds [Member] | Revenue [Member] | Customer Concentration Risk [Member]
Disaggregation of Revenue [Line Items]
Percentage of Net revenues	2.00%	1.00%	2.00%	1.00%
Other Building Products [Member]
Disaggregation of Revenue [Line Items]
Net revenues	$ 32,571	$ 26,530	$ 88,143	$ 73,054
Other Building Products [Member] | Revenue [Member] | Customer Concentration Risk [Member]
Disaggregation of Revenue [Line Items]
Percentage of Net revenues	9.00%	9.00%	9.00%	9.00%
Residential New Construction [Member]
Disaggregation of Revenue [Line Items]
Net revenues	$ 268,254	$ 228,526	$ 755,800	$ 637,915
Residential New Construction [Member] | Revenue [Member] | Customer Concentration Risk [Member]
Disaggregation of Revenue [Line Items]
Percentage of Net revenues	77.00%	77.00%	77.00%	77.00%
Repair and Remodel[Member]
Disaggregation of Revenue [Line Items]
Net revenues	$ 23,107	$ 18,722	$ 65,453	$ 53,597
Repair and Remodel[Member] | Revenue [Member] | Customer Concentration Risk [Member]
Disaggregation of Revenue [Line Items]
Percentage of Net revenues	7.00%	6.00%	7.00%	6.00%
Commercial [Member]
Disaggregation of Revenue [Line Items]
Net revenues	$ 57,638	$ 47,945	$ 162,058	$ 141,546
Commercial [Member] | Revenue [Member] | Customer Concentration Risk [Member]
Disaggregation of Revenue [Line Items]
Percentage of Net revenues	16.00%	17.00%	16.00%	17.00%

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Revenue Recognition - Summary of Assets and Liabilities Related to Uncompleted Contracts and Customer Deposits (Detail) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Contract with Customer, Asset and Liability [Abstract]
Contract assets	$ 17,229	$ 14,476
Contract liabilities	$ (8,039)	$ (7,519)

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Revenue Recognition - Schedule of Cost and Estimated Earnings on Uncompleted Contracts (Detail) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Contractors [Abstract]
Costs incurred on uncompleted contracts	$ 112,444	$ 84,563
Estimated earnings	57,834	47,000
Total	170,278	131,563
Less: Billings to date	158,218	122,144
Net under (over) billings	$ 12,060	$ 9,419

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Revenue Recognition - Schedule of Net Under (Over) Billings (Detail) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Contractors [Abstract]
Costs and estimated earnings in excess of billings on uncompleted contracts (contract assets)	$ 17,229	$ 14,476
Billings in excess of costs and estimated earnings on uncompleted contracts (contract liabilities)	(5,169)	(5,057)
Net under (over) billings	$ 12,060	$ 9,419

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Investments - Additional Information (Detail) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Schedule of Held-to-maturity Securities [Line Items]
Cash and cash equivalents	$ 117,700		$ 55,600
Proceeds received in connection with term loan amendment	100,000	$ 300,000
Held-to-Maturity Securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Investments	$ 15,400		$ 30,100

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Goodwill and Intangibles - Summary of Change in Carrying Amount of Goodwill (Detail) $ in Thousands	9 Months Ended
	Sep. 30, 2018 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill (Gross), beginning balance	$ 225,470
Business Combinations	11,771
Other	501
Goodwill (Gross), ending balance	237,742
Accumulated Impairment Losses, beginning balance	(70,004)
Accumulated Impairment Losses, ending balance	(70,004)
Goodwill (Net), beginning balance	155,466
Business Combinations	11,771
Other	501
Goodwill (Net), ending balance	$ 167,738

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Goodwill and Intangibles - Additional Information (Detail)	9 Months Ended
	Sep. 30, 2018 USD ($) Acquisition	Sep. 30, 2017 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
Number of immaterial acquisitions | Acquisition	1
Goodwill impairment	$ 0	$ 0
Increase in gross carrying amount of intangibles	$ 21,400,000

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Goodwill and Intangibles - Schedule of Gross Carrying Amount and Accumulated Amortization (Detail) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 225,988	$ 204,558
Accumulated Amortization	86,279	66,567
Net Book Value	139,709	137,991
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	135,900	121,015
Accumulated Amortization	48,668	38,651
Net Book Value	87,232	82,364
Covenants Not-to-Compete [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	13,780	11,807
Accumulated Amortization	6,826	4,773
Net Book Value	6,954	7,034
Trademarks and Trade Names [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	62,248	58,136
Accumulated Amortization	17,166	14,076
Net Book Value	45,082	44,060
Backlog [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	14,060	13,600
Accumulated Amortization	13,619	9,067
Net Book Value	$ 441	$ 4,533

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Goodwill and Intangibles - Schedule of Estimated Aggregate Annual Amortization (Detail) $ in Thousands	Sep. 30, 2018 USD ($)
Finite Lived Intangible Assets Net Amortization Expense Rolling Maturity [Abstract]
Remainder of 2018	$ 5,442
2019	21,332
2020	20,400
2021	19,094
2022	18,176
Thereafter	$ 55,265

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Long-term Debt - Schedule of Debt (Detail) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Debt Disclosure [Abstract]
Term loan, net of unamortized debt issuance costs of $5,026 and $5,146, respectively	$ 392,724	$ 293,354
Vehicle and equipment notes, maturing September 2023; payable in various monthly installments, including interest rates ranging from 2.5% to 4.8%	59,992	50,357
Various notes payable, maturing through March 2025; payable in various monthly installments, including interest rates ranging from 4% to 6%	3,517	3,866
Total long term debt	456,233	347,577
Total long term debt	456,233	347,577
Less: current maturities	(22,481)	(16,650)
Long-term debt, less current maturities	$ 433,752	$ 330,927

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Long-term Debt - Schedule of Debt (Parenthetical) (Detail) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Notes payable maturity date	2025-03
Minimum [Member]
Debt Instrument [Line Items]
Notes payable Interest rate	4.00%
Maximum [Member]
Debt Instrument [Line Items]
Notes payable Interest rate	6.00%
Term Loan Agreement [Member]
Debt Instrument [Line Items]
Unamortized debt issuance costs	$ 5,026	$ 5,146
Vehicle and Equipment [Member]
Debt Instrument [Line Items]
Notes payable maturity date	2023-09
Vehicle and Equipment [Member] | Minimum [Member]
Debt Instrument [Line Items]
Notes payable Interest rate	2.50%
Vehicle and Equipment [Member] | Maximum [Member]
Debt Instrument [Line Items]
Notes payable Interest rate	4.80%

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Long-term Debt - Additional Information (Detail) - USD ($)			9 Months Ended
	Jun. 19, 2018	Apr. 13, 2017	Sep. 30, 2018	Sep. 30, 2017	Nov. 30, 2017
Debt Instrument [Line Items]
Debt instrument, wrote off fees			$ 1,164,000	$ 1,201,000
Term Loan Agreement [Member] | Term Loan [Member]
Debt Instrument [Line Items]
Debt instrument, face amount		$ 300,000,000
Term loan facility maturity period		7 years
ABL Credit Agreement [Member] | Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Line of credit maximum borrowing capacity		$ 100,000,000
ABL Credit Agreement [Member] | Letter of Credit [Member]
Debt Instrument [Line Items]
Line of credit maximum borrowing capacity		$ 50,000,000
Term Loan Second Amendment [Member] | Term Loan [Member]
Debt Instrument [Line Items]
Debt instrument, face amount	$ 397,800,000
Debt instrument, extended maturity date range, start	Apr. 15, 2024
Debt instrument, extended maturity date range, end	Apr. 15, 2025
Debt instrument, wrote off fees	$ 1,100,000
Amended Term Loan Agreement [Member] | Term Loan [Member]
Debt Instrument [Line Items]
Debt instrument, face amount					$ 297,800,000
ABL Third Amendment [Member] | Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Line of credit maximum borrowing capacity	$ 150,000,000
Debt instrument, extended maturity date range, start	Apr. 13, 2022
Debt instrument, extended maturity date range, end	Jun. 19, 2023

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Fair Value Measurements - Schedule of Fair Values of Financial Assets and Liabilities (Detail) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Financial assets:
Cash equivalents	$ 117,688	$ 55,634
Derivative financial instruments	4,370	618
Total financial assets	122,058	56,252
Financial liabilities:
Derivative financial instruments	271
Contingent consideration	4,900	1,834
Total financial liabilities	5,171	1,834
Level 1 [Member]
Financial assets:
Cash equivalents	117,688	55,634
Total financial assets	117,688	55,634
Level 2 [Member]
Financial assets:
Derivative financial instruments	4,370	618
Total financial assets	4,370	618
Financial liabilities:
Derivative financial instruments	271
Total financial liabilities	271
Level 3 [Member]
Financial liabilities:
Contingent consideration	4,900	1,834
Total financial liabilities	$ 4,900	$ 1,834

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Fair value measurements - Summary of Change in Fair Value of Contingent Consideration (Detail) $ in Thousands	9 Months Ended
	Sep. 30, 2018 USD ($)
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Purchases, (Sales), Issuances, (Settlements) [Abstract]
Beginning Balance	$ 1,834
Preliminary purchase price	3,653
Fair value adjustments	(586)
Accretion in value	399
Amounts paid to sellers	(400)
Ending Balance	$ 4,900

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Fair Value measurements - Summary of Carrying Values and Associated Fair Values of Financial Assets and Liabilities (Detail) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Carrying Value [Member]
Financial assets:
Investments	$ 15,358	$ 30,053
Level 2 [Member]
Financial assets:
Investments	$ 15,343	$ 30,038

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Derivative and Hedging Activities - Additional Information (Detail)	9 Months Ended	12 Months Ended
	Sep. 30, 2018 USD ($) Instruments Swap	Dec. 31, 2017 USD ($) Instruments	Jan. 01, 2018 USD ($)
Term Loan [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Number of swaps | Swap	3
Accounting Standards Update 2017-12 [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Adjustment to retained earnings and accumulated other comprehensive income to reclassify cash flow hedge			$ 100,000
Designated as Hedging Instrument [Member] | Term Loan [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Debt instrument, face amount	$ 200,000,000
Interest Expense [Member] | Designated as Hedging Instrument [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Reclassification from accumulated other comprehensive income to interest expense	400,000
Interest Rate Swap [Member] | Cash Flow Hedging [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Notional amount of derivative instruments	$ 200,000,000	$ 100,000,000
Derivatives, number of instruments held | Instruments	2	1
Notional amount amortized		$ 95,300,000
Notional amount maturity date		May 31, 2022
Interest Rate Swap [Member] | Cash Flow Hedging [Member] | Interest Rate Swap Matured on May 31, 2022 [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Notional amount amortized	$ 95,300,000
Notional amount maturity date	May 31, 2022
Derivatives, number of instruments amortized | Instruments	1
Interest Rate Swap [Member] | Cash Flow Hedging [Member] | Interest Rate Swap Matured on April 15, 2025 [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Notional amount amortized	$ 93,300,000
Notional amount maturity date	Apr. 15, 2025
Derivatives, number of instruments amortized | Instruments	1
Forward Interest Rate Swaps [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Notional amount of derivative instruments	$ 100,000,000
Notional amount amortized	$ 97,000,000
Notional amount maturity date	Apr. 15, 2025
Notional amount beginning date	May 31, 2022

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Stockholder's Equity - Additional Information (Detail) - USD ($) $ / shares in Units, shares in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2018	Oct. 31, 2018	Mar. 02, 2018	Dec. 31, 2017
Statement Of Shareholders Equity [Line Items]
Effective portion of unrealized gain on derivative instruments	$ 3,072,000	$ 3,072,000			$ 507,000
Stock repurchase program, authorized			$ 100,000,000
Share repurchase, amount		$ 42,827,000
2018 Stock Repurchase Plan [Member]
Statement Of Shareholders Equity [Line Items]
Common Stock Repurchase, Shares	380	793
Stock repurchase program, authorized				$ 50,000,000
Share repurchase, amount	$ 18,200,000	$ 42,800,000
Share repurchase, price per share	$ 47.75	$ 53.96

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Employee Benefits - Additional Information (Detail) pure in Millions		3 Months Ended		9 Months Ended
	Sep. 30, 2018 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($) Installments shares	Sep. 30, 2017 USD ($) Installments shares	Dec. 31, 2017 USD ($)
Pension Plans, Postretirement and Other Employee Benefits [Line Items]
Healthcare benefit expense, net of employee contributions		$ 4,500,000	$ 4,100,000	$ 13,300,000	$ 12,400,000
Accrued compensation	$ 25,370,000	25,370,000		25,370,000		$ 25,399,000
Administration expense related to employee contribution plan		300,000	400,000	1,200,000	1,300,000
Share-based compensation expense		1,893,000	2,179,000	6,089,000	4,749,000
Unrecognized compensation expense	$ 6,100,000	6,100,000		6,100,000
Compensation cost not yet recognized, period for recognition	1 year 10 months 24 days
Cost of Sales [Member]
Pension Plans, Postretirement and Other Employee Benefits [Line Items]
Workers' compensation expense		4,400,000	3,100,000	9,700,000	9,800,000
Share-based compensation expense		94,000	507,000	749,000	507,000
Administrative [Member]
Pension Plans, Postretirement and Other Employee Benefits [Line Items]
Share-based compensation expense		1,769,000	1,380,000	$ 4,938,000	3,950,000
Performance Based Restricted Stock Units [Member]
Pension Plans, Postretirement and Other Employee Benefits [Line Items]
Number of shares granted | shares				14,072
Share-based compensation expense		300,000	1,000,000	$ 1,500,000	$ 1,700,000
Unrecognized compensation expense	$ 400,000	400,000		$ 400,000
Compensation cost not yet recognized, period for recognition	6 months
2014 Omnibus Incentive Plan [Member]
Pension Plans, Postretirement and Other Employee Benefits [Line Items]
Number of shares granted | shares				100,000	100,000
Number of equal installments for common stock | Installments				3	3
Number of shares surrendered to satisfy tax withholding obligations | shares				41,000	10,000
Share based compensation, recognized tax benefits		0	0	$ 500,000	$ 600,000
2014 Omnibus Incentive Plan [Member] | Non-Performance-Based Awards [Member] | Administrative [Member]
Pension Plans, Postretirement and Other Employee Benefits [Line Items]
Share-based compensation expense		1,000,000	800,000	$ 2,900,000	1,900,000
2014 Omnibus Incentive Plan [Member] | Officer [Member] | Performance Shares [Member] | Common Stock [Member]
Pension Plans, Postretirement and Other Employee Benefits [Line Items]
Number of shares granted | shares				2
Share-based compensation expense		600,000	$ 300,000	$ 1,600,000	$ 700,000
Number of equal installments for common stock				0.1
2014 Omnibus Incentive Plan [Member] | Officer [Member] | Performance Based Restricted Stock Units [Member] | Common Stock [Member]
Pension Plans, Postretirement and Other Employee Benefits [Line Items]
Unrecognized compensation expense	$ 3,600,000	3,600,000		$ 3,600,000
Compensation cost not yet recognized, period for recognition	1 year 9 months 18 days
2014 Omnibus Incentive Plan [Member] | Directors [Member]
Pension Plans, Postretirement and Other Employee Benefits [Line Items]
Number of shares granted | shares				5,000	6,000
Common stock vesting period				1 year
Share-based compensation expense		25,000		$ 100,000	$ 300,000
Medical IBNR Included in Accrued Compensation [Member]
Pension Plans, Postretirement and Other Employee Benefits [Line Items]
Accrued compensation	$ 2,100,000	$ 2,100,000		$ 2,100,000		$ 1,900,000

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Employee Benefits - Summary of Workers' Compensation Known Claims and IBNR Reserves (Detail) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Employee-related Liabilities [Abstract]
Included in other current liabilities	$ 5,276	$ 5,899
Included in other long-term liabilities	10,190	8,721
Workers' Compensation Liability	$ 15,466	$ 14,620

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Employee Benefits - Schedule of Insurance Receivable for Claims (Detail) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Workers' Compensation [Member]
Malpractice Insurance [Line Items]
Included in other non-current assets	$ 1,894	$ 1,826

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Employee Benefits - Summary of Equity-Based Awards for Employees (Detail)	9 Months Ended
	Sep. 30, 2018 $ / shares shares
Common Stock Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Nonvested common stock awards, Beginning balance | shares	202,331
Granted | shares	65,112
Vested | shares	(90,952)
Forfeited/Cancelled | shares	(2,010)
Nonvested common stock awards, Ending balance | shares	174,481
Nonvested performance-based stock awards, Beginning balance | $ / shares	$ 39.09
Granted | $ / shares	57.51
Vested | $ / shares	36.10
Forfeited/Cancelled | $ / shares	48.63
Nonvested performance-based stock awards, Ending balance | $ / shares	$ 47.42
Performance Based Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Nonvested performance-based stock awards/units, Beginning balance | shares	77,254
Granted | shares	52,892
Forfeited/Cancelled | shares	(14,448)
Nonvested performance-based stock awards/units, Ending balance | shares	115,698
Nonvested performance-based stock awards/units, Beginning balance | $ / shares	$ 41.00
Granted | $ / shares	65.60
Forfeited/Cancelled | $ / shares	41.00
Nonvested performance-based stock awards/units, Ending balance | $ / shares	$ 52.25
Performance Based Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Nonvested performance-based stock awards/units, Beginning balance | shares	72,000
Granted | shares	14,072
Vested | shares	(71,120)
Forfeited/Cancelled | shares	(1,564)
Nonvested performance-based stock awards/units, Ending balance | shares	13,388
Nonvested performance-based stock awards/units, Beginning balance | $ / shares	$ 52.16
Granted | $ / shares	55.92
Vested | $ / shares	52.15
Forfeited/Cancelled | $ / shares	53.14
Nonvested performance-based stock awards/units, Ending balance | $ / shares	$ 56.05

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Employee Benefits - Summary of Stock Compensation Expense (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock compensation expense	$ 1,893	$ 2,179	$ 6,089	$ 4,749
Cost of Sales [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock compensation expense	94	507	749	507
Selling [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock compensation expense	30	292	402	292
Administrative [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock compensation expense	$ 1,769	$ 1,380	$ 4,938	$ 3,950

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Income Taxes - Additional Information (Detail) - USD ($)	3 Months Ended	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Sep. 30, 2018	Dec. 31, 2017
Income Tax Disclosure [Abstract]
Federal corporate tax rate		21.00%	35.00%
Effective tax rate	25.60%	25.00%
Adjustment to provisional tax			$ 0

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Related Party Transactions - Schedule of Related Party Transactions (Detail) - Affiliated Entity [Member] - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Related Party Transaction [Line Items]
Sales	$ 3,259	$ 2,641	$ 9,361	$ 7,363
Purchases	372	302	1,207	901
Rent	$ 257	$ 290	$ 829	$ 875

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Related Party Transactions - Additional Information (Detail) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Affiliated Entity [Member]
Related Party Transaction [Line Items]
Accounts receivable, related parties	$ 2.4	$ 2.0
M/I Homes Inc [Member]
Related Party Transaction [Line Items]
Accounts receivable, related parties	$ 1.4	$ 1.0

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Commitments and Contingencies - Schedule of Accrued General Insurance Reserves (Detail) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Commitments and Contingencies Disclosure [Abstract]
Included in other current liabilities	$ 2,029	$ 2,033
Included in other long-term liabilities	7,787	7,073
Total	$ 9,816	$ 9,106

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Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Millions	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Commitments And Contingencies Disclosure [Line Items]
Capital lease assets	$ 60.9	$ 63.4
Assets fully depreciated	32.3	26.8
Capital leased assets, net book value	9.7	13.0
Purchase obligation, 2019	25.8
Purchase obligation, 2020	20.8
Purchase obligation, 2021	14.6
Other Non-Current Assets [Member]
Commitments And Contingencies Disclosure [Line Items]
Insurance receivable and indemnification asset	$ 2.5	$ 2.8
Minimum [Member]
Commitments And Contingencies Disclosure [Line Items]
Estimated life of capital lease	4 years
Noncancellable operating leases, renewal period	1 year
Maximum [Member]
Commitments And Contingencies Disclosure [Line Items]
Estimated life of capital lease	6 years
Noncancellable operating leases, renewal period	5 years

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Commitments and Contingencies - Future Minimum Lease Payments Under Noncancellable Operating Leases (Detail) $ in Thousands	Sep. 30, 2018 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Remainder of 2018	$ 294
2019	1,249
2020	1,277
2021	1,154
2022	1,073
Thereafter	$ 51

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Business Combinations - Additional Information (Detail) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($) Business	Sep. 30, 2017 USD ($) Business	Dec. 31, 2017 USD ($)
Business Acquisition [Line Items]
Number of businesses acquired | Business			8	7
Percentage of voting equity interests acquired	100.00%	100.00%	100.00%	100.00%
Number of minor businesses acquired | Business			1	2
Goodwill acquired expected to be tax deductible	$ 12,400		$ 12,400
Amortization of intangibles	5,228	$ 6,824	19,678	$ 19,790
Income tax expense (benefit)	5,358	5,721	12,762	15,502
Administrative [Member]
Business Acquisition [Line Items]
Acquisition-related costs	700	900	1,900	2,300
Alpha [Member]
Business Acquisition [Line Items]
Increase in goodwill					$ 2,100
Combined Business Acquisitions [Member]
Business Acquisition [Line Items]
Amortization of intangibles	200	900	1,200	3,200
Income tax expense (benefit)	$ 200	$ 500	700	$ 2,000
Columbia [Member]
Business Acquisition [Line Items]
Increase in goodwill			500
Increase in seller obligations			400
Increase in purchase price			$ 600

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Business Combinations - Summary of Business Acquisitions (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Business Acquisition [Line Items]
Seller Obligations			$ 5,420	$ 3,759
Revenue	$ 348,999	$ 295,193	983,311	833,058
Net income	15,563	12,010	$ 38,272	$ 30,347
CDG Acquisition [Member]
Business Acquisition [Line Items]
Date			Mar. 19, 2018
Acquisition Type			Asset
Cash paid			$ 9,440
Seller Obligations			1,973
Total Purchase Price			11,413
Revenue	3,848		7,572
Net income	164		$ 229
Other Acquisition [Member]
Business Acquisition [Line Items]
Acquisition Type			Shares/Asset	Asset
Cash paid			$ 25,242	$ 9,812
Seller Obligations			3,447	1,042
Total Purchase Price			28,689	10,854
Revenue	7,003	6,499	12,782	11,671
Net income	42	84	423	366
Combined Business Acquisitions [Member]
Business Acquisition [Line Items]
Cash paid			34,682	131,534
Seller Obligations			5,420	3,751
Fair Value of Common Stock Issued		10,859		10,859
Total Purchase Price			40,102	$ 146,144
2018 Acquisitions [Member]
Business Acquisition [Line Items]
Revenue	10,851		20,354
Net income	206		652
Alpha [Member]
Business Acquisition [Line Items]
Date				Jan. 05, 2017
Acquisition Type				Share
Cash paid				$ 103,810
Seller Obligations				2,002
Fair Value of Common Stock Issued	$ 10,900	10,859	$ 10,900	10,859
Total Purchase Price				116,671
Revenue		29,334		87,830
Net income		(271)		$ 190
Columbia [Member]
Business Acquisition [Line Items]
Date				Jun. 26, 2017
Acquisition Type				Asset
Cash paid				$ 8,768
Seller Obligations				225
Total Purchase Price				8,993
Revenue		3,026		3,241
Net income		73		80
2017 Acquisitions [Member]
Business Acquisition [Line Items]
Revenue		39,123		103,006
Net income		(68)		$ 682
Astro [Member]
Business Acquisition [Line Items]
Date				Sep. 18, 2017
Acquisition Type				Asset
Cash paid				$ 9,144
Seller Obligations				482
Total Purchase Price				9,626
Revenue		264		264
Net income		$ 46		$ 46

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Business Combinations - Summary of Business Acquisitions (Parenthetical) (Detail) - Alpha [Member] - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Business Acquisition [Line Items]
Business combination contingencies amount recognized	$ 21,700
Purchase consideration, number of shares issued	282,577
Purchase consideration, value of shares issued	$ 10,900	$ 10,859

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Business Combinations - Summary of Estimated Fair Value of Assets Acquired and Liabilities Assumed (Detail) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Business Acquisition [Line Items]
Goodwill	$ 167,738		$ 155,466
Less seller obligations	5,420	$ 3,759
CDG Acquisition [Member]
Business Acquisition [Line Items]
Accounts receivable	1,731
Inventories	514
Other current assets	28
Property and equipment	933
Intangibles	3,711
Goodwill	4,898
Other non-current assets	36
Accounts payable and other current liabilities	(438)
Fair value of assets acquired and purchase price	11,413
Less seller obligations	1,973
Cash paid	9,440
Other Acquisition [Member]
Business Acquisition [Line Items]
Accounts receivable	3,306	2,070
Inventories	1,027	1,014
Other current assets	892	8
Property and equipment	1,893	1,144
Intangibles	16,681	5,939
Goodwill	6,873	2,472
Other non-current assets	19	176
Accounts payable and other current liabilities	(2,002)	(1,969)
Fair value of assets acquired and purchase price	28,689	10,854
Less seller obligations	3,447	1,042
Cash paid	25,242	9,812
Combined Business Acquisitions [Member]
Business Acquisition [Line Items]
Cash		247
Accounts receivable	5,037	33,834
Inventories	1,541	3,866
Other current assets	920	4,552
Property and equipment	2,826	3,971
Intangibles	20,392	73,067
Goodwill	11,771	46,124
Other non-current assets	55	595
Accounts payable and other current liabilities	(2,440)	(20,112)
Fair value of assets acquired and purchase price	40,102	146,144
Less fair value of common stock issued		10,859
Less seller obligations	5,420	3,751
Cash paid	$ 34,682	131,534
Alpha [Member]
Business Acquisition [Line Items]
Cash		247
Accounts receivable		29,851
Inventories		1,852
Other current assets		4,500
Property and equipment		1,528
Intangibles		57,200
Goodwill		38,511
Other non-current assets		383
Accounts payable and other current liabilities		(17,401)
Fair value of assets acquired and purchase price		116,671
Less fair value of common stock issued		10,859
Less seller obligations		2,002
Cash paid		103,810
Columbia [Member]
Business Acquisition [Line Items]
Accounts receivable		989
Inventories		704
Other current assets		8
Property and equipment		659
Intangibles		4,760
Goodwill		2,209
Other non-current assets		36
Accounts payable and other current liabilities		(372)
Fair value of assets acquired and purchase price		8,993
Less seller obligations		225
Cash paid		8,768
Astro [Member]
Business Acquisition [Line Items]
Accounts receivable		924
Inventories		296
Other current assets		36
Property and equipment		640
Intangibles		5,168
Goodwill		2,932
Accounts payable and other current liabilities		(370)
Fair value of assets acquired and purchase price		9,626
Less seller obligations		482
Cash paid		$ 9,144

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Business Combinations - Estimates of Acquired Intangible Assets (Detail) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Customer Relationships [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Estimated Fair Value	$ 14,480	$ 37,533
Weighted Average Estimated Useful Life (yrs)	8 years	8 years
Trademarks and Trade Names [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Estimated Fair Value	$ 3,920	$ 19,403
Weighted Average Estimated Useful Life (yrs)	14 years	15 years
Covenants Not-to-Compete [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Estimated Fair Value	$ 1,530	$ 2,429
Weighted Average Estimated Useful Life (yrs)	5 years	5 years
Backlog [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Estimated Fair Value	$ 460	$ 13,400
Weighted Average Estimated Useful Life (yrs)	2 years	1 year 6 months

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Business Combinations - Pro Forma Results of Operations (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Business Acquisition, Pro Forma Information [Abstract]
Net revenue	$ 353,609	$ 316,382	$ 1,006,313	$ 906,283
Net income	$ 16,215	$ 13,020	$ 40,305	$ 34,277
Basic and diluted net income per share	$ 520	$ 410	$ 1,280	$ 1,080

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Income Per Common Share - Additional Information (Detail) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Earnings Per Share [Abstract]
Dilutive effect of outstanding restricted stock awards after application of the Treasury Stock Method	84,000	107,000	138,000	80,000

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Subsequent Events - Additional Information (Detail) $ in Millions	Oct. 31, 2018 USD ($)
Subsequent Event [Line Items]
Common stock purchased under stock repurchase program	$ 100
Effective date of common stock repurchase program	Nov. 05, 2018
Expiration date of common stock repurchase program	Feb. 28, 2020
Subsequent Event [Member] | Advanced Fiber Technology [Member]
Subsequent Event [Line Items]
Business acquisition date	Oct. 31, 2018