Company Quick10K Filing
Quick10K
Continental Building Products
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$23.77 35 $825
10-Q 2019-06-30 Quarter: 2019-06-30
10-Q 2019-03-31 Quarter: 2019-03-31
10-K 2018-12-31 Annual: 2018-12-31
10-Q 2018-09-30 Quarter: 2018-09-30
10-Q 2018-06-30 Quarter: 2018-06-30
10-Q 2018-03-31 Quarter: 2018-03-31
10-K 2017-12-31 Annual: 2017-12-31
10-Q 2017-09-30 Quarter: 2017-09-30
10-Q 2017-06-30 Quarter: 2017-06-30
10-Q 2017-03-31 Quarter: 2017-03-31
10-K 2016-12-31 Annual: 2016-12-31
10-Q 2016-09-30 Quarter: 2016-09-30
10-Q 2016-06-30 Quarter: 2016-06-30
10-Q 2016-03-31 Quarter: 2016-03-31
10-K 2015-12-31 Annual: 2015-12-31
10-Q 2015-09-30 Quarter: 2015-09-30
10-Q 2015-06-30 Quarter: 2015-06-30
10-Q 2015-03-31 Quarter: 2015-03-31
10-K 2014-12-31 Annual: 2014-12-31
10-Q 2014-09-30 Quarter: 2014-09-30
10-Q 2014-06-30 Quarter: 2014-06-30
10-Q 2014-03-31 Quarter: 2014-03-31
10-K 2013-12-31 Annual: 2013-12-31
8-K 2019-08-01 Earnings, Exhibits
8-K 2019-05-20 Regulation FD
8-K 2019-05-02 Earnings, Exhibits
8-K 2019-05-01 Amend Bylaw, Shareholder Vote, Exhibits
8-K 2019-02-21 Earnings, Exhibits
8-K 2018-11-08 Earnings, Exhibits
8-K 2018-08-02 Earnings, Exhibits
8-K 2018-05-03 Earnings, Exhibits
8-K 2018-05-02 Shareholder Vote
8-K 2018-02-22 Earnings, Other Events, Exhibits
8-K 2018-02-21 Amend Bylaw, Exhibits
CRH CRH Public 27,570
USG USG 6,058
EXP Eagle Materials 3,611
CPAC Cementos Pacasmayo Saa 3,569
LOMA Loma Negra Compania Industrial Argentina Sociedad Anonima 3,028
USCR US Concrete 647
FRTA Forterra 385
CUO Continental Materials 28
CCCL China Ceramics 4
CX Cemex 0
CBPX 2019-06-30
Part I - Financial Information
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-31.1 exhibit3112019q210q.htm
EX-31.2 exhibit3122019q210q.htm
EX-32.1 exhibit3212019q210q.htm

Continental Building Products Earnings 2019-06-30

CBPX 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

Document
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Table of Contents

As filed with the Securities and Exchange Commission on August 2, 2019

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2019
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________.

Commission File Number: 001-36293

cbpxa09.jpg

CONTINENTAL BUILDING PRODUCTS, INC.
(Exact name of registrant as specified in its charter)
Delaware
 
61-1718923
(State or other jurisdiction of incorporation)
 
(I.R.S Employer Identification No.)
12950 Worldgate Drive
,
Suite 700
,
Herndon
,
VA
 
20170
(Address of principal executive offices)
 
(Zip Code)
(703)
 
480-3800
(Registrant's telephone number, including the area code)

Securities Registered Pursuant to Section 12(b) of the Act:
Title of Each Class
 
Trading Symbol (s)
 
Name of Exchange on Which Registered
Common Stock, $0.001 par value per share
 
CBPX
 
New York Stock Exchange

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    x    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 (§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    x    No    ¨

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

As of August 1, 2019, the registrant had outstanding 34,688,206 shares of the registrant’s common stock, which amount excludes 9,851,553 shares of common stock held by the registrant as treasury shares.

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Table of Contents to Second Quarter 2019 Form 10-Q
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


2

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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Continental Building Products, Inc.
Consolidated Statements of Operations
(unaudited)
 
For the Three Months Ended
 
For the Six Months Ended
 
June 30, 2019
 
June 30, 2018
 
June 30, 2019
 
June 30, 2018
 
(in thousands, except share data and per share amounts)
Net sales
$
124,206

 
$
139,268

 
$
246,238

 
$
256,070

Cost of goods sold
95,970

 
98,263

 
186,756

 
184,879

Gross profit
28,236

 
41,005

 
59,482

 
71,191

Selling and administrative expense
9,118

 
10,445

 
18,771

 
19,869

Loss on intangible asset impairment
2,911

 

 
2,911

 

Gain from insurance recoveries, net

 

 
1,513

 

Gain from business interruption insurance
3,238

 

 
3,238

 

Operating income
19,445

 
30,560

 
42,551

 
51,322

Other expense, net
(66
)
 
(87
)
 
(102
)
 
(227
)
Interest expense, net
(2,395
)
 
(2,694
)
 
(4,887
)
 
(5,414
)
Income before losses from equity method investment and provision for income taxes
16,984

 
27,779

 
37,562

 
45,681

Losses from equity method investment
(367
)
 
(391
)
 
(412
)
 
(755
)
Income before provision for income taxes
16,617

 
27,388

 
37,150

 
44,926

Provision for income taxes
(3,769
)
 
(5,493
)
 
(8,376
)
 
(9,385
)
Net income
$
12,848

 
$
21,895

 
$
28,774

 
$
35,541

 
 
 
 
 
 
 
 
Net income per share:
 
 
 
 
 
 
 
Basic
$
0.37

 
$
0.59

 
$
0.82

 
$
0.96

Diluted
$
0.37

 
$
0.59

 
$
0.82

 
$
0.95

Weighted average shares outstanding:
 
 
 
 
 
 
 
Basic
34,804,588

 
36,879,774

 
35,025,208

 
37,154,750

Diluted
34,870,525

 
37,027,997

 
35,109,165

 
37,314,947

See accompanying notes to unaudited consolidated financial statements.


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Continental Building Products, Inc.
Consolidated Statements of Comprehensive Income
(unaudited)
 
For the Three Months Ended
 
For the Six Months Ended
 
June 30, 2019
 
June 30, 2018
 
June 30, 2019
 
June 30, 2018
 
(in thousands)
Net income
$
12,848

 
$
21,895

 
$
28,774

 
$
35,541

Foreign currency translation adjustment
305

 
(313
)
 
629

 
(795
)
Derivative instrument adjustments, net of taxes
(1,662
)
 
452

 
(2,040
)
 
1,498

Other comprehensive (loss)/income
(1,357
)
 
139

 
(1,411
)
 
703

Comprehensive income
$
11,491

 
$
22,034

 
$
27,363

 
$
36,244

See accompanying notes to unaudited consolidated financial statements.

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Continental Building Products, Inc.
Consolidated Balance Sheets
 
June 30, 2019
 
December 31, 2018
 
(unaudited)
 
 
 
(in thousands)
Assets:
 
 
 
Cash and cash equivalents
$
110,612

 
$
102,633

Trade receivables, net
39,926

 
38,454

Inventories, net
33,938

 
32,225

Prepaid and other current assets
6,742

 
19,805

Total current assets
191,218

 
193,117

Property, plant and equipment, net
284,413

 
288,368

Customer relationships and other intangibles, net
56,051

 
62,680

Goodwill
119,945

 
119,945

Equity method investment
7,263

 
7,975

Operating lease - right of use assets
840

 

Debt issuance costs
206

 
296

Total Assets
$
659,936

 
$
672,381

Liabilities and Shareholders' Equity:
 
 
 
Liabilities:
 
 
 
Accounts payable
$
31,650

 
$
48,060

Accrued and other liabilities
9,137

 
12,815

Debt, current portion
1,709

 
1,669

Operating lease liabilities, current portion
629

 

Total current liabilities
43,125

 
62,544

Deferred taxes and other long-term liabilities
19,175

 
20,204

Debt, non-current portion
261,014

 
261,886

Operating lease liabilities, non-current portion
834

 

Total Liabilities
324,148

 
344,634

Shareholders' Equity:
 
 
 
Undesignated preferred stock, par value $0.001 per share; 10,000,000 shares authorized, no shares issued and outstanding

 

Common stock, $0.001 par value per share; 190,000,000 shares authorized; 44,539,759 and 44,472,214 shares issued and 34,688,206 and 35,401,868 shares outstanding as of June 30, 2019 and December 31, 2018, respectively
44

 
44

Additional paid-in capital
328,216

 
327,515

Less: Treasury stock
(229,073
)
 
(209,050
)
Accumulated other comprehensive loss
(4,802
)
 
(3,391
)
Accumulated earnings
241,403

 
212,629

Total Shareholders' Equity
335,788

 
327,747

Total Liabilities and Shareholders' Equity
$
659,936

 
$
672,381

See accompanying notes to unaudited consolidated financial statements.

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Continental Building Products, Inc.
Consolidated Statements of Cash Flows
(unaudited)
 
For the Six Months Ended
 
June 30, 2019
 
June 30, 2018
 
(in thousands)
Cash flows from operating activities:
 
 
 
Net income
$
28,774

 
$
35,541

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
21,091

 
21,386

Amortization of debt issuance costs and debt discount
616

 
629

Gain from insurance recoveries, net
(1,513
)
 

Loss on intangible asset impairment
2,911

 

Losses from equity method investment
412

 
755

Amortization of deferred gain on terminated swaps
(579
)
 
(317
)
Share-based compensation
1,144

 
1,611

Change in assets and liabilities:
 
 
 
Trade receivables
(1,492
)
 
(4,647
)
Inventories
(1,614
)
 
(2,896
)
Prepaid expenses and other current assets
12,989

 
4,369

Accounts payable
(16,320
)
 
(2,078
)
Accrued and other current liabilities
(4,753
)
 
(955
)
Other long-term liabilities
(116
)
 
(622
)
Net cash provided by operating activities
41,550

 
52,776

Cash flows from investing activities:
 
 
 
Payments for property, plant and equipment
(12,346
)
 
(13,006
)
Payments for intangible assets
(1,019
)
 
(790
)
Proceeds from insurance recoveries
1,589

 

Capital contributions to equity method investment
(90
)
 
(438
)
Distributions from equity method investment
390

 
78

Net cash used in investing activities
(11,476
)
 
(14,156
)
Cash flows from financing activities:
 
 
 
Proceeds from exercise of stock options
118

 
11

Tax withholdings on share-based compensation
(1,165
)
 
(547
)
Principal payments for debt
(1,358
)
 
(1,358
)
Payments to repurchase common stock
(20,023
)
 
(24,562
)
Net cash used in financing activities
(22,428
)
 
(26,456
)
Effect of foreign exchange rates on cash and cash equivalents
333

 
(320
)
Net change in cash and cash equivalents
7,979

 
11,844

Cash, beginning of period
102,633

 
72,521

Cash, end of period
$
110,612

 
$
84,365

See accompanying notes to unaudited consolidated financial statements.

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Continental Building Products, Inc.
Consolidated Statements of Changes in Shareholders' Equity
(unaudited)
 
 
 
 
 
 
 
 
 
Accumulated Other Comprehensive Loss
 
 
 
 
 
Common Stock
 
Additional Paid-In Capital
 
Treasury Stock
 
 
Accumulated Earnings
 
Total Equity
 
Shares
 
Amount
 
 
 
 
 
 
(in thousands, except share data)
Balance as of December 31, 2017
37,532,959

 
$
44

 
$
325,391

 
$
(143,357
)
 
$
(2,649
)
 
$
138,597

 
$
318,026

Net income

 

 

 

 

 
13,646

 
13,646

Other comprehensive income, net of tax

 

 

 

 
564

 

 
564

Purchase of treasury shares
(530,600
)
 

 

 
(14,550
)
 

 

 
(14,550
)
Stock option exercise
781

 

 
11

 

 

 

 
11

Stock-based compensation
85,838

 

 
213

 

 

 

 
213

Balance as of March 31, 2018
37,088,978

 
$
44

 
$
325,615

 
$
(157,907
)
 
$
(2,085
)
 
$
152,243

 
$
317,910

Net income

 

 

 

 

 
21,895

 
21,895

Other comprehensive income, net of tax

 

 

 

 
139

 

 
139

Purchase of treasury shares
(344,908
)
 

 

 
(10,012
)
 

 

 
(10,012
)
Stock option exercise
2,706

 

 

 

 

 

 

Stock-based compensation
2,103

 

 
979

 

 

 

 
979

Balance as of June 30, 2018
36,748,879

 
$
44

 
$
326,594

 
$
(167,919
)
 
$
(1,946
)
 
$
174,138

 
$
330,911


 
 
 
 
 
 
 
 
 
Accumulated Other Comprehensive Loss
 
 
 
 
 
Common Stock
 
Additional Paid-In Capital
 
Treasury Stock
 
 
Accumulated Earnings
 
Total Equity
 
Shares
 
Amount
 
 
 
 
 
 
(in thousands, except share data)
Balance as of December 31, 2018
35,401,868

 
$
44

 
$
327,515

 
$
(209,050
)
 
$
(3,391
)
 
$
212,629

 
$
327,747

Net income

 

 

 

 

 
15,926

 
15,926

Other comprehensive loss, net of tax

 

 

 

 
(54
)
 

 
(54
)
Purchase of treasury shares
(191,907
)
 

 

 
(5,005
)
 

 

 
(5,005
)
Stock option exercise
6,500

 

 
118

 

 

 

 
118

Stock-based compensation
58,571

 

 
35

 

 

 

 
35

Balance as of March 31, 2019
35,275,032

 
$
44

 
$
327,668

 
$
(214,055
)
 
$
(3,445
)
 
$
228,555

 
$
338,767

Net income

 

 

 

 

 
12,848

 
12,848

Other comprehensive loss, net of tax

 

 

 

 
(1,357
)
 

 
(1,357
)
Purchase of treasury shares
(589,300
)
 

 

 
(15,018
)
 

 

 
(15,018
)
Stock option exercise

 

 

 

 

 

 

Stock-based compensation
2,474

 

 
548

 

 

 

 
548

Balance as of June 30, 2019
34,688,206

 
$
44

 
$
328,216

 
$
(229,073
)
 
$
(4,802
)
 
$
241,403

 
$
335,788


See accompanying notes to unaudited consolidated financial statements.


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Table of Contents

Continental Building Products, Inc.
Notes to the Unaudited Consolidated Financial Statements
1. BACKGROUND AND NATURE OF OPERATIONS
Description of Business
Continental Building Products, Inc. (the "Company") is a Delaware corporation. The Company manufactures gypsum wallboard related products for commercial and residential buildings and houses. The Company operates a network of three highly efficient wallboard facilities, all located in the eastern United States, and produces joint compound at one plant in the United States and at another plant in Canada.
2. SIGNIFICANT ACCOUNTING POLICIES
(a)
Basis of Presentation
The accompanying consolidated financial statements for the Company have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions have been eliminated.
(b)
Basis of Presentation for Interim Periods
Certain information and footnote disclosures normally included for the annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted for the interim periods presented. Management believes that the unaudited interim financial statements include all adjustments (which are normal and recurring in nature) necessary to present fairly the financial position of the Company and the results of operations and cash flows for the periods presented.
The results of operations for the periods presented are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. Seasonal changes and other conditions can affect the sales volumes of the Company's products. Therefore, the financial results for any interim period do not necessarily indicate the expected results for the year.
The financial statements should be read in conjunction with Company's audited consolidated financial statements and the notes thereto for the year ended December 31, 2018 included in the Company's Annual Report on Form 10-K for the fiscal year then ended (the "2018 10-K"). The Company has continued to follow the accounting policies set forth in those financial statements.
(c)
Supplemental Cash Flow Disclosure
Table 2.1: Certain Cash Transactions and Other Activity
 
For the Six Months Ended,
 
June 30, 2019
 
June 30, 2018
 
(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
 
 
 
Operating lease cash outflows
$
307

 
$
299

Other activity:
 
 
 
Acquisition of property, plant and equipment included in liabilities
$
2,960

 
$
3,657


(d) Recent Accounting Pronouncements
Accounting Standards Recently Adopted
The Company adopted Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") 2016-02, "Leases.", as of January 1, 2019. The Company elected the transition package of practical expedients permitted within ASU 2016-02, which among other things, allowed the Company to carryforward the historical lease classification. In addition, the Company elected the comparative period practical expedient, which allowed the Company to implement the guidance as of the effective date without having to adjust the comparative financial statements. Instead, under this expedient, companies recognize the cumulative effect adjustment in equity. The Company also made an accounting policy election that leases with an initial term of 12 months or less will not be recorded on the balance sheet and will result in the recognition of those lease payments in the Consolidated Statements of Operations on a straight-line basis over the lease term. The adoption of the standard resulted in recognition of approximately $1.0 million in right of use assets and $1.7 million in lease liabilities for

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operating leases on the Company's Consolidated Balance Sheet, with no impact to its retained earnings, Consolidated Statement of Operations and Consolidated Statement of Cash Flows.
The Company adopted ASU 2017-12, "Derivatives and Hedging (Topic 815), Targeted Improvements to Accounting for Hedging Activities," as of January 1, 2019. This ASU expands an entity's ability to hedge non-financial and financial risk components and reduce complexity in fair value hedges of interest rate risk. The guidance eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item. The adoption of the standard did not have a material impact on the Company's Consolidated Financial Statements.
Accounting Standards Not Yet Adopted
In June 2016, the FASB issued ASU 2016-13, "Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments." This ASU is intended to introduce a revised approach to the recognition and measurement of credit losses, emphasizing an updated model based on expected losses rather than incurred losses. The provisions of this standard are effective for reporting periods beginning after December 15, 2019 and early adoption is permitted. The Company is currently evaluating the impact that this guidance may have on its Consolidated Financial Statements.
In August 2018, the FASB issued ASU 2018-13, "Fair Value Measurements (Topic 820), Changes to the Disclosure Requirements for Fair Value Measurement." This ASU eliminates certain disclosure requirements for fair value measurements for all entities, requires public entities to disclose certain new information and modifies some disclosure requirements. The provisions of this standard are effective for reporting periods beginning after December 15, 2019 and early adoption is permitted. The Company is currently evaluating the impact that this guidance may have on its Consolidated Financial Statements.
In August 2018, the FASB issued 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." This ASU requires a customer in a cloud computing arrangement that is a service contract to follow the internal-use software guidance in Accounting Standards Codification 350-40 to determine which implementation costs to defer and recognize as an asset. The provisions of this standard are effective for reporting periods beginning after December 15, 2019 and early adoption is permitted. The Company is currently evaluating the impact that this guidance may have on its Consolidated Financial Statements.
(e) Reclassifications
Certain reclassifications of prior year information were made to conform to the 2019 presentation. These reclassifications had no material impact on the Company's Consolidated Financial Statements.
3. TRADE RECEIVABLES, NET
Table 3: Details of Trade Receivables, Net
 
June 30, 2019
 
December 31, 2018
 
(in thousands)
Trade receivables, gross
$
40,773

 
$
39,426

Allowance for cash discounts and doubtful accounts
(847
)
 
(972
)
Trade receivables, net
$
39,926

 
$
38,454


Trade receivables are recorded net of credit memos issued during the normal course of business.

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4. INVENTORIES, NET
Table 4: Details of Inventories, Net
 
June 30, 2019
 
December 31, 2018
 
(in thousands)
Finished products
$
7,937

 
$
6,700

Raw materials
18,525

 
18,388

Supplies and other
7,476

 
7,137

Inventories, net
$
33,938

 
$
32,225


5. PROPERTY, PLANT AND EQUIPMENT, NET
Table 5: Details of Property, Plant and Equipment, Net
 
June 30, 2019
 
December 31, 2018
 
(in thousands)
Land
$
13,186

 
$
13,185

Buildings
120,411

 
118,076

Plant machinery
311,739

 
292,219

Mobile equipment
15,551

 
15,163

Construction in progress
13,622

 
23,566

Property, plant and equipment, at cost
474,509

 
462,209

Accumulated depreciation
(190,096
)
 
(173,841
)
Property, plant and equipment, net
$
284,413

 
$
288,368


Depreciation expense was $8.3 million and $16.5 million for the three and six months ended June 30, 2019, respectively, compared to $8.3 million and $16.3 million for the three and six months ended June 30, 2018, respectively.
6. CUSTOMER RELATIONSHIPS AND OTHER INTANGIBLES, NET
Table 6.1: Details of Customer Relationships and Other Intangibles, Net
 
June 30, 2019
 
December 31, 2018
 
Gross
 
Accumulated Amortization
 
Net
 
Gross
 
Accumulated Amortization
 
Net
 
(in thousands)
Customer relationships
$
116,435

 
$
(69,668
)
 
$
46,767

 
$
116,180

 
$
(65,738
)
 
$
50,442

Purchased software
8,987

 
(5,837
)
 
3,150

 
8,225

 
(5,507
)
 
2,718

Trademarks
10,038

 
(3,904
)
 
6,134

 
14,772

 
(5,252
)
 
9,520

Total
$
135,460

 
$
(79,409
)
 
$
56,051

 
$
139,177

 
$
(76,497
)
 
$
62,680


Amortization expense was $2.3 million and $4.6 million for the three and six months ended June 30, 2019, respectively, compared to $2.5 million and $5.1 million for the three and six months ended June, 2018, respectively. During three months ended June 30, 2019, the Company recognized a non-cash impairment loss of $2.9 million related to two trademarks, which the company discontinued the use of in the branding of its products in the current quarter.

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Table 6.2: Details of Future Amortization Expense of Customer Relationships and Other Intangibles
 
As of June 30, 2019
 
(in thousands)
July 1, 2019 through December 31, 2019
$
4,627

2020
8,354

2021
7,491

2022
6,724

2023
5,794

Thereafter
23,061

Total
$
56,051


7. INVESTMENT IN SEVEN HILLS
The Company is a party with an unaffiliated third party to a paperboard liner venture named Seven Hills Paperboard, LLC ("Seven Hills") that, pursuant to a paper supply agreement, provides the Company with a continuous supply of high-quality recycled paperboard liner to meet its ongoing production requirements.
The Company has evaluated the characteristics of its investment and determined that Seven Hills is a variable interest entity, but that it does not have the power to direct the principal activities most impacting the economic performance of Seven Hills, and is thus not the primary beneficiary. As such, the Company accounts for this investment in Seven Hills under the equity method of accounting.
Paperboard liner purchased from Seven Hills was $11.8 million and $25.3 million for the three and six months ended June 30, 2019, respectively, compared to $12.9 million and $25.1 million for the three and six months ended June, 2018, respectively. As of June 30, 2019, the Company had certain purchase commitments for paper totaling $37.9 million through 2022.
8. ACCRUED AND OTHER LIABILITIES
Table 8: Details of Accrued and Other Liabilities
 
June 30, 2019
 
December 31, 2018
 
(in thousands)
Employee-related costs
$
4,438

 
$
10,768

Property taxes
1,164

 
82

Income tax
286

 

Other taxes
552

 
351

Other
2,697

 
1,614

Accrued and other liabilities
$
9,137

 
$
12,815



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9. DEBT 
Table 9.1: Details of Debt
 
June 30, 2019
 
December 31, 2018
 
(in thousands)
Amended and Restated Credit Agreement (1)
$
251,299

 
$
252,658

Industrial revenue bonds (2)
16,200

 
16,200

Less: Original issue discount (net of amortization)
(1,159
)
 
(1,285
)
Less: Debt issuance costs
(3,617
)
 
(4,018
)
Total debt
262,723

 
263,555

Less: Current portion of long-term debt
(1,709
)
 
(1,669
)
Long-term debt
$
261,014

 
$
261,886


(1)
As of June 30, 2019 and December 31, 2018, the Amended and Restated Credit Agreement, as amended, had a maturity date of August 18, 2023 and an interest rate of LIBOR (with a 0.75% floor) plus 2.00%.
(2)
As of June 30, 2019 and December 31, 2018, Industrial revenue bonds had a maturity date of December 1, 2025 and an interest rate of LIBOR plus 1.50% less an approximate 20 percent reduction in the rate related to the tax-free interest income to the bond holders.
On August 18, 2016, the Company, Continental Building Products Operating Company, LLC and Continental Building Products Canada Inc. and the lenders party thereto and Credit Suisse, as Administrative Agent, entered into an Amended and Restated Credit Agreement amending and restating the Company's existing first lien credit agreement (the "Amended and Restated Credit Agreement"). The Amended and Restated Credit Agreement provides for a $275 million senior secured first lien term loan facility (the "Term Loan") and a $75.0 million senior secured revolving credit facility (the "Revolver"), which mature on August 18, 2023 and August 18, 2021, respectively. The interest rate under the Amended and Restated Credit Agreement was a spread over LIBOR of 2.75% and floor of 0.75%.
On February 21, 2017, the Company repriced its Term Loan lowering its interest rate by 25 basis points to LIBOR plus 2.50%. Subsequently, on December 6, 2017, the Company further repriced its Term Loan lowering its interest rate by an additional 25 basis points to LIBOR plus 2.25% and allowing for a further reduction in the interest rate to LIBOR plus 2.00% based on the attainment of a total leverage ratio of 1.1 or better. All other terms and conditions under the Amended and Restated Credit Agreement remained the same.
During both the six months ended June 30, 2019 and 2018, the Company made $1.4 million of scheduled mandatory principal payments. Because the Company attained a total leverage ratio of less than 1.1 to 1 during the fourth quarter of 2018, the interest rate was further reduced pursuant to the terms of the Amended and Restated Credit Agreement to LIBOR plus 2.00% as of December 31, 2018. As of June 30, 2019, the annual effective interest rate, including original issue discount and amortization of debt issuance costs, was 4.9%.
In December 2018, the Company completed a financing of industrial revenue bonds due December 1, 2025 with a total commitment of $28 million. The bonds were issued by the County of Campbell, Kentucky and Putnam County Development Authority, pursuant to a trust indenture between the issuers and Huntington National Bank, as trustee. Proceeds of the bonds are loaned by the issuers to the Company under a loan agreement, whereby the Company is obligated to make loan payments to the issuers sufficient to pay all debt service and expenses related to the bonds. The Company's obligations under the loan agreement and related note bear interest at a fluctuating rate based on LIBOR plus 1.50% less an approximate 20 percent reduction in the rate related to the tax-free interest income to the bond holders. The loan agreement contains restrictions and covenants on our operations that are consistent with those contained in the Amended and Restated Credit Agreement mentioned below.
There were no amounts outstanding under the Revolver as of June 30, 2019 or December 31, 2018. Interest under the Revolver is floating, based on LIBOR plus 2.25%. In addition, the Company pays a facility fee of 50 basis points per annum on the total capacity under the Revolver. Availability under the Revolver as of June 30, 2019, based on draws and outstanding letters of credit and absence of violations of covenants, was $73.6 million.

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Table 9.2: Details of Future Minimum Principal Payments Due
 
Amount Due
 
(in thousands)
July 1, 2019 through December 31, 2019
$
1,357

2020
5,326

2021
6,196

2022
6,196

2023
245,074

Thereafter
3,350

Total Payments
$
267,499


Under the terms of the Amended and Restated Credit Agreement, the Company is required to comply with certain covenants, including among others, the limitation of indebtedness, limitation on liens, and limitations on certain cash distributions. One single financial covenant governs all of the Company's debt and only applies if the outstanding borrowings of the Revolver plus outstanding letters of credit are greater than $22.5 million as of the end of the quarter. The financial covenant is a total leverage ratio calculation, in which total debt less outstanding cash is divided by adjusted earnings before interest, taxes, depreciation and amortization. As the sum of outstanding borrowings under the Revolver and outstanding letters of credit were less than $22.5 million at June 30, 2019, the total leverage ratio of no greater than 5.0 under the financial covenant was not applicable at June 30, 2019. The Company was in compliance with all applicable covenants under the Amended and Restated Credit Agreement and the loan agreement related to the industrial revenue bonds as of June 30, 2019.
10. DERIVATIVE INSTRUMENTS
Commodity Derivative Instruments
As of June 30, 2019, the Company had 3.6 million mmBTUs (millions of British Thermal Units) in aggregate notional amount outstanding natural gas swap contracts to manage commodity price exposures. All of these contracts mature by June 30, 2020. The Company elected to designate these derivative instruments as cash flow hedges in accordance with ASC 815-20, "Derivatives – Hedging". No ineffectiveness was recorded on these contracts during the three and six months ended June 30, 2019 and 2018.
Interest Rate Derivative Instrument
In September 2016, the Company entered into interest rate swap agreements for a combined notional amount of $100.0 million with a term of four years, which hedged the floating LIBOR on a portion of the term loan under the Amended and Restated Credit Agreement to an average fixed rate of 1.323% and LIBOR floor of 0.75%. The Company elected to designate these interest rate swaps as cash flow hedges for accounting purposes.
On March 29, 2018, the Company terminated its interest rate swap agreements that were previously designated as a cash flow hedge and received $3.2 million in cash, the fair value of the swap on the termination date. The unrealized gain at termination remains in accumulated other comprehensive income and will be amortized into interest expense over the life of the original hedged instrument. During three and six months ended June 30, 2019, $0.2 million and $0.5 million of unrealized gain, net of tax was amortized into interest expense, compared to $0.2 million for both three and six months ended June 30, 2018. Also on March 29, 2018, the Company entered into new interest rate swap agreements for a combined notional amount of $100.0 million, which expire on September 30, 2020 and hedge the floating LIBOR on a portion of the Term Loan to an average fixed rate of 2.46% and LIBOR floor of 0.75%. The Company elected to designate these interest rate swaps as cash flow hedges for accounting purposes. No ineffectiveness was recorded on these contracts during the three and six months ended June 30, 2019 and 2018.

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Table of Contents

Table 10.1: Details of Derivatives Fair Value
 
June 30, 2019
 
December 31, 2018
 
(in thousands)
Assets
 
 
 
Interest rate swap
$

 
$
86

Commodity hedges

 
61

Total assets
$

 
$
147

Liabilities
 
 
 
Interest rate swap
$
786

 
$

Commodity hedges
1,210

 
105

Total liabilities
$
1,996

 
$
105


Table 10.2: Gains/(losses) on Derivatives
 
For the Three Months Ended June 30,
 
For the Six Months Ended June 30,
 
2019
 
2018
 
2019
 
2018
 
2019
 
2018
 
2019
 
2018
 
Gain/(loss) recognized in AOCI on derivatives (effective portion), net of tax
 
Gain/(loss) reclassified from AOCI into income (effective portion), net of tax
 
Gain/(loss) recognized in AOCI on derivatives (effective portion), net of tax
 
Gain/(loss) reclassified from AOCI into income (effective portion), net of tax
 
(in thousands)
Interest rate swap
$
(372
)
 
$
297

 
$
292

 
$
139

 
$
(533
)
 
$
1,268

 
$
595

 
$
209

Commodity hedges
(1,019
)
 
197

 
(21
)
 
(97
)
 
(977
)
 
245

 
(65
)
 
(194
)
Total
$
(1,391
)
 
$
494

 
$
271

 
$
42

 
$
(1,510
)
 
$
1,513

 
$
530

 
$
15


Counterparty Risk
The Company is exposed to credit losses in the event of nonperformance by the counterparties to the Company's derivative instruments. As of June 30, 2019, the Company's derivatives were in a $2.0 million net liability position and recorded in Other current liabilities. All of the Company's counterparties have investment grade credit ratings; accordingly, the Company anticipates that the counterparties will be able to fully satisfy their obligations under the contracts. The Company's agreements outline the conditions upon which it or the counterparties are required to post collateral. As of June 30, 2019, the Company had no collateral posted with its counterparties related to the derivatives.
11. LEASES
The Company leases certain buildings and equipment. The Company's facility and equipment leases may provide for escalations of rent or rent abatements and payment of pro rata portions of building operating expenses. Certain building leases also include options to renew, with renewal terms that can extend the lease term up to 5 years. The exercise of lease renewal options is at the Company's sole discretion.
Table 11.1: Components of lease expense
 
For the Three Months Ended,
 
For the Six Months Ended,
 
June 30, 2019
 
June 30, 2018
 
June 30, 2019
 
June 30, 2018
 
(in thousands)
Operating lease cost
$
100

 
$
99

 
$
201

 
$
198

Short term lease cost
564

 
711

 
1,075

 
1,446

Total lease cost
$
664

 
$
810

 
$
1,276

 
$
1,644



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Table of Contents

Table 11.2: Maturities of lease liabilities
 
Operating leases
 
(in thousands)
July 1, 2019 through December 31, 2019
$
311

2020
637

2021
600

2022

2023

Total lease payments
$
1,548

Less imputed interest
(85
)
Present value of lease liabilities
$
1,463


Table 11.3: Details of lease term and discount rate
 
As of June 30, 2019
Weighted-average remaining lease term:
 
Operating leases
3 years

Weighted-average discount rate:
 
Operating leases
4.52
%

12. TREASURY STOCK
On November 4, 2015, the Company announced that the Board of Directors approved a new stock repurchase program authorizing the Company to repurchase up to $50 million of its common stock, at such times and prices as determined by management as market conditions warrant, through December 31, 2016. Pursuant to this authorization, the Company has repurchased shares of its common stock in the open market and in private transactions.
Since the initial authorization, the Company' Board of Directors has expanded and extended the stock repurchase program. The most recent authorization on February 21, 2018 expanded the program to a total of $300 million and also extended the expiration date to December 31, 2019. As of June 30, 2019, there was approximately $111.0 million of capacity remaining under this repurchase authorization.
All repurchased shares are held in treasury, reducing the number of shares of common stock outstanding and used in the Company's earnings per share calculation.
Table 12: Details of Treasury Stock Activity
 
June 30, 2019
 
June 30, 2018
 
Shares
 
Amount (1)
 
Average Share Price (1)
 
Shares
 
Amount (1)
 
Average Share Price (1)
 
(in thousands, except share data)
For the Three Months Ended:
 
 
 
 
 
 
 
 
 
 
 
Beginning Balance
9,262,253

 
$
214,055

 
$
23.11

 
7,319,417

 
$
157,907

 
$
21.57

Repurchases on open market
589,300

 
15,018

 
25.48

 
344,908

 
10,012

 
29.03

Ending Balance
9,851,553

 
$
229,073

 
$
23.25

 
7,664,325

 
$
167,919

 
$
21.91

 
 
 
 
 
 
 
 
 
 
 
 
For the Six Months Ended:
 
 
 
 
 
 
 
 
 
 
 
Beginning Balance
9,070,346

 
$
209,050

 
$
23.05

 
6,788,817

 
$
143,357

 
$
21.12

Repurchases on open market
781,207

 
20,023

 
25.63

 
875,508

 
24,562

 
28.05

Ending Balance
9,851,553

 
$
229,073