Company Quick10K Filing
Continental Building Products
Price27.40 EPS2
Shares35 P/E15
MCap959 P/FCF15
Net Debt140 EBIT80
TEV1,099 TEV/EBIT14
TTM 2019-09-30, in MM, except price, ratios
10-Q 2019-09-30 Filed 2019-11-12
10-Q 2019-06-30 Filed 2019-08-02
10-Q 2019-03-31 Filed 2019-05-03
10-K 2018-12-31 Filed 2019-02-22
10-Q 2018-09-30 Filed 2018-11-09
10-Q 2018-06-30 Filed 2018-08-03
10-Q 2018-03-31 Filed 2018-05-04
10-K 2017-12-31 Filed 2018-02-23
10-Q 2017-09-30 Filed 2017-11-09
10-Q 2017-06-30 Filed 2017-08-04
10-Q 2017-03-31 Filed 2017-05-05
10-K 2016-12-31 Filed 2017-02-24
10-Q 2016-09-30 Filed 2016-11-08
10-Q 2016-06-30 Filed 2016-08-04
10-Q 2016-03-31 Filed 2016-05-10
10-K 2015-12-31 Filed 2016-02-23
10-Q 2015-09-30 Filed 2015-11-05
10-Q 2015-06-30 Filed 2015-08-06
10-Q 2015-03-31 Filed 2015-05-06
10-K 2014-12-31 Filed 2015-02-25
10-Q 2014-09-30 Filed 2014-11-03
10-Q 2014-06-30 Filed 2014-08-12
10-Q 2014-03-31 Filed 2014-05-13
10-K 2013-12-31 Filed 2014-03-27
8-K 2020-02-03 Leave Agreement, M&A, Off-BS Arrangement, Shareholder Rights, Control, Officers, Amend Bylaw, Exhibits
8-K 2020-01-29 Shareholder Vote, Regulation FD
8-K 2020-01-16 Other Events
8-K 2019-12-03 Officers
8-K 2019-11-12 Enter Agreement, Exhibits
8-K 2019-11-12 Earnings, Other Events, Exhibits
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

CBPX 10Q Quarterly Report

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 exhibit3112019q310q.htm
EX-31.2 exhibit3122019q310q.htm
EX-32.1 exhibit3212019q310q.htm

Continental Building Products Earnings 2019-09-30

Balance SheetIncome StatementCash Flow
0.80.60.50.30.20.02014201620182020
Assets, Equity
0.20.10.10.0-0.0-0.12013201520172020
Rev, G Profit, Net Income
0.10.10.0-0.0-0.1-0.12014201620182020
Ops, Inv, Fin

Document
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As filed with the Securities and Exchange Commission on November 12, 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 September 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

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CONTINENTAL BUILDING PRODUCTS, INC.
(Exact name of registrant as specified in its charter)
Delaware61-1718923
(State or other jurisdiction of incorporation)(I.R.S Employer Identification No.)
12950 Worldgate Drive,Suite 700,Herndon,VA20170
(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 ClassTrading Symbol (s)Name of Exchange on Which Registered
Common Stock, $0.001 par value per shareCBPXNew 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  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  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     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 

As of November 10, 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 Third Quarter 2019 Form 10-Q

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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 Nine Months Ended
September 30, 2019September 30, 2018September 30, 2019September 30, 2018
(in thousands, except share data and per share amounts)
Net sales$127,439  $131,234  $373,677  $387,304  
Cost of goods sold99,532  94,306  286,288  279,185  
Gross profit27,907  36,928  87,389  108,119  
Selling and administrative expense9,626  9,957  28,397  29,826  
Loss on intangible asset impairment    2,911    
Gain from insurance recoveries, net    1,513    
Gain from business interruption insurance1,623    4,861    
Operating income19,904  26,971  62,455  78,293  
Other expense, net(66) (29) (168) (256) 
Interest expense, net(2,220) (2,549) (7,107) (7,963) 
Income before losses from equity method investment and provision for income taxes17,618  24,393  55,180  70,074  
Losses from equity method investment(191) (393) (603) (1,148) 
Income before provision for income taxes17,427  24,000  54,577  68,926  
Provision for income taxes(3,979) (5,436) (12,355) (14,821) 
Net income$13,448  $18,564  $42,222  $54,105  
Net income per share:
Basic$0.39  $0.51  $1.21  $1.46  
Diluted$0.39  $0.50  $1.21  $1.46  
Weighted average shares outstanding:
Basic34,688,206  36,732,746  34,911,640  37,012,536  
Diluted34,775,451  36,918,904  34,996,694  37,181,387  
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 Nine Months Ended
September 30, 2019September 30, 2018September 30, 2019September 30, 2018
(in thousands) 
Net income$13,448  $18,564  $42,222  $54,105  
Foreign currency translation adjustment(179) 298  450  (496) 
Derivative instrument adjustments, net of taxes(7) (8) (2,047) 1,489  
Other comprehensive (loss)/income(186) 290  (1,597) 993  
Comprehensive income$13,262  $18,854  $40,625  $55,098  
See accompanying notes to unaudited consolidated financial statements.
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Continental Building Products, Inc.
Consolidated Balance Sheets
September 30, 2019December 31, 2018
(unaudited)
(in thousands)
Assets:
Cash and cash equivalents$126,433  $102,633  
Trade receivables, net43,098  38,454  
Inventories, net35,486  32,225  
Prepaid and other current assets7,275  19,805  
Total current assets212,292  193,117  
Property, plant and equipment, net281,802  288,368  
Customer relationships and other intangibles, net54,450  62,680  
Goodwill119,945  119,945  
Equity method investment7,216  7,975  
Operating lease - right of use assets760  —  
Debt issuance costs160  296  
Total Assets$676,625  $672,381  
Liabilities and Shareholders' Equity:
Liabilities:
Accounts payable$31,037  $48,060  
Accrued and other liabilities13,165  12,815  
Debt, current portion1,695  1,669  
Operating lease liabilities, current portion633  —  
Total current liabilities46,530  62,544  
Deferred taxes and other long-term liabilities19,173  20,204  
Debt, non-current portion260,617  261,886  
Operating lease liabilities, non-current portion690  —  
Total Liabilities327,010  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 September 30, 2019 and December 31, 2018, respectively
44  44  
Additional paid-in capital328,781  327,515  
Less: Treasury stock(229,073) (209,050) 
Accumulated other comprehensive loss(4,988) (3,391) 
Accumulated earnings254,851  212,629  
Total Shareholders' Equity349,615  327,747  
Total Liabilities and Shareholders' Equity$676,625  $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 Nine Months Ended
September 30, 2019September 30, 2018
(in thousands)
Cash flows from operating activities:
Net income$42,222  $54,105  
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization32,234  32,966  
Amortization of debt issuance costs and debt discount930  931  
Gain from insurance recoveries, net(1,513)   
Loss on intangible asset impairment2,911    
Losses from equity method investment603  1,148  
Amortization of deferred gain on terminated swaps(873) (632) 
Share-based compensation1,706  2,459  
Deferred taxes  (457) 
Change in assets and liabilities:
Trade receivables(4,678) (914) 
Inventories(3,190) (7,627) 
Prepaid expenses and other current assets12,453  1,264  
Accounts payable(16,451) (52) 
Accrued and other current liabilities(433) 1,089  
Other long-term liabilities(176) (226) 
Net cash provided by operating activities65,745  84,054  
Cash flows from investing activities:
Payments for property, plant and equipment(19,287) (19,761) 
Payments for intangible assets(1,551) (1,359) 
Proceeds from insurance recoveries1,589  125  
Capital contributions to equity method investment(407) (548) 
Distributions from equity method investment564  468  
Net cash used in investing activities(19,092) (21,075) 
Cash flows from financing activities:
Proceeds from exercise of stock options118  145  
Tax withholdings on share-based compensation(1,165) (547) 
Principal payments for debt(2,037) (2,037) 
Payments to repurchase common stock(20,023) (27,425) 
Net cash used in financing activities(23,107) (29,864) 
Effect of foreign exchange rates on cash and cash equivalents254  (184) 
Net change in cash and cash equivalents23,800  32,931  
Cash, beginning of period102,633  72,521  
Cash, end of period$126,433  $105,452  
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 StockAdditional Paid-In CapitalTreasury StockAccumulated EarningsTotal Equity
SharesAmount
(in thousands, except share data)
Balance as of December 31, 201737,532,959  $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 exercise781    11  —  —  —  11  
Stock-based compensation85,838    213  —  —  —  213  
Balance as of March 31, 201837,088,978  $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 exercise2,706      —  —  —    
Stock-based compensation2,103    979  —  —  —  979  
Balance as of June 30, 201836,748,879  $44  $326,594  $(167,919) $(1,946) $174,138  $330,911  
Net income—  —  —  —  —  18,564  18,564  
Other comprehensive income, net of tax—  —  —  —  290  —  290  
Purchase of treasury shares(76,600)   —  (2,863) —  —  (2,863) 
Stock option exercise9,600    199  —  —  —  199  
Stock-based compensation    850  —  —  —  850  
Balance as of September 30, 201836,681,879  $44  $327,643  $(170,782) $(1,656) $192,702  $347,951  

See accompanying notes to unaudited consolidated financial statements.

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Continental Building Products, Inc.
Consolidated Statements of Changes in Shareholders' Equity - continued
(unaudited)
Accumulated Other Comprehensive Loss
Common StockAdditional Paid-In CapitalTreasury StockAccumulated EarningsTotal Equity
SharesAmount
(in thousands, except share data)
Balance as of December 31, 201835,401,868  $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 exercise6,500    118  —  —  —  118  
Stock-based compensation58,571    35  —  —  —  35  
Balance as of March 31, 201935,275,032  $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-based compensation2,474    548  —  —  —  548  
Balance as of June 30, 201934,688,206  $44  $328,216  $(229,073) $(4,802) $241,403  $335,788  
Net income—  —  —  —  —  13,448  13,448  
Other comprehensive loss, net of tax—  —  —  —  (186) —  (186) 
Stock-based compensation    565  —  —  —  565  
Balance as of September 30, 201934,688,206  $44  $328,781  $(229,073) $(4,988) $254,851  $349,615  

See accompanying notes to unaudited consolidated financial statements.

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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 Nine Months Ended
September 30, 2019September 30, 2018
(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating lease cash outflows $464  $451  
Other activity:
Acquisition of property, plant and equipment included in liabilities$2,486  $3,432  
(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.
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 early adopted this ASU. 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 in the process of evaluating the impact of adoption, which is not expected to have a material impact on the Company's 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 in the process of evaluating the impact of adoption, which is not expected to have a material impact on the Company's 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
September 30, 2019December 31, 2018
(in thousands) 
Trade receivables, gross$44,042  $39,426  
Allowance for cash discounts and doubtful accounts(944) (972) 
Trade receivables, net$43,098  $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
September 30, 2019December 31, 2018
(in thousands)