# TopBuild Corp (BLD)

Informational only - not investment advice.

CIK: 0001633931
SIC: 1700 Construction - Special Trade Contractors
SIC breadcrumb: [Construction](/division/C/) > [SIC Major Group 17](/major-group/17/) > [SIC 1700 Construction - Special Trade Contractors](/industry/1700/)
Latest 10-K filed: 2026-02-26
SEC page: https://www.sec.gov/edgar/browse/?CIK=1633931
Filing source: https://www.sec.gov/Archives/edgar/data/1633931/000110465926020481/bld-20251231x10k.htm

## Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
| --- | ---: | --- | ---: | --- |
| Revenue | 5409086000 | USD | 2025 | 2026-02-26 |
| Net income | 521727000 | USD | 2025 | 2026-02-26 |
| Assets | 6605312000 | USD | 2025 | 2026-02-26 |

## Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-26. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001633931.json. Derived margins are computed from the extracted annual SEC facts.

| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Revenue |  | 1,906,266,000 | 2,384,249,000 | 2,624,121,000 | 2,718,038,000 | 3,486,207,000 | 5,008,744,000 | 5,194,694,000 | 5,329,803,000 | 5,409,086,000 |
| Net income | 72,606,000 | 158,133,000 | 134,752,000 | 190,995,000 | 247,023,000 | 324,016,000 | 555,989,000 | 614,254,000 | 622,602,000 | 521,727,000 |
| Operating income | 121,604,000 | 136,864,000 | 208,953,000 | 289,523,000 | 355,046,000 | 476,419,000 | 797,164,000 | 878,825,000 | 886,343,000 | 791,933,000 |
| Gross profit | 400,344,000 | 461,109,000 | 576,152,000 | 681,267,000 | 746,361,000 | 974,389,000 | 1,486,719,000 | 1,603,820,000 | 1,624,918,000 | 1,568,997,000 |
| Diluted EPS | 1.92 | 4.32 | 3.78 | 5.56 | 7.42 | 9.78 | 17.14 | 19.33 | 20.29 | 18.28 |
| Assets | 1,690,119,000 | 1,749,549,000 | 2,454,531,000 | 2,603,963,000 | 2,815,283,000 | 4,258,530,000 | 4,606,831,000 | 5,162,851,000 | 4,735,426,000 | 6,605,312,000 |
| Liabilities | 717,572,000 | 753,030,000 | 1,382,433,000 | 1,451,074,000 | 1,466,489,000 | 2,622,096,000 | 2,677,125,000 | 2,599,196,000 | 2,525,808,000 | 4,289,152,000 |
| Stockholders' equity | 972,547,000 | 996,519,000 | 1,072,098,000 | 1,152,889,000 | 1,348,794,000 | 1,636,434,000 | 1,929,706,000 | 2,563,655,000 | 2,209,618,000 | 2,316,160,000 |
| Cash and cash equivalents | 134,375,000 | 56,521,000 | 100,929,000 | 184,807,000 | 330,007,000 | 139,779,000 | 240,069,000 | 848,565,000 | 400,318,000 | 184,742,000 |
| Net margin |  | 8.30% | 5.65% | 7.28% | 9.09% | 9.29% | 11.10% | 11.82% | 11.68% | 9.65% |
| Operating margin |  | 7.18% | 8.76% | 11.03% | 13.06% | 13.67% | 15.92% | 16.92% | 16.63% | 14.64% |

## Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-05. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001633931.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

| Quarter | End date | Revenue | Net income | Diluted EPS | Method |
| --- | --- | ---: | ---: | ---: | --- |
| 2022-Q2 | 2022-06-30 |  |  | 4.41 | reported discrete quarter |
| 2022-Q3 | 2022-09-30 |  |  | 4.76 | reported discrete quarter |
| 2023-Q2 | 2023-03-31 |  | 135,870,000 |  | reported discrete quarter |
| 2023-Q1 | 2023-03-31 |  |  | 4.28 | reported discrete quarter |
| 2023-Q2 | 2023-06-30 | 1,317,262,000 |  | 5.18 | reported discrete quarter |
| 2023-Q3 | 2023-06-30 |  | 164,400,000 |  | reported discrete quarter |
| 2023-Q3 | 2023-09-30 | 1,326,120,000 |  | 5.27 | reported discrete quarter |
| 2023-Q4 | 2023-12-31 | 1,286,074,000 | 146,384,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2024-Q1 | 2024-03-31 | 1,278,717,000 | 152,381,000 | 4.79 | reported discrete quarter |
| 2024-Q2 | 2024-03-31 |  | 152,381,000 |  | reported discrete quarter |
| 2024-Q3 | 2024-06-30 |  | 150,723,000 |  | reported discrete quarter |
| 2024-Q2 | 2024-06-30 | 1,365,612,000 |  | 4.78 | reported discrete quarter |
| 2024-Q3 | 2024-09-30 | 1,373,268,000 |  | 5.65 | reported discrete quarter |
| 2024-Q4 | 2024-12-31 | 1,312,206,000 | 150,538,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2025-Q1 | 2025-03-31 | 1,233,278,000 | 123,385,000 | 4.23 | reported discrete quarter |
| 2025-Q2 | 2025-03-31 |  | 123,385,000 |  | reported discrete quarter |
| 2025-Q3 | 2025-06-30 |  | 151,602,000 |  | reported discrete quarter |
| 2025-Q2 | 2025-06-30 | 1,297,403,000 |  | 5.32 | reported discrete quarter |
| 2025-Q3 | 2025-09-30 | 1,393,158,000 |  | 5.04 | reported discrete quarter |
| 2025-Q4 | 2025-12-31 | 1,485,247,000 | 104,514,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2026-Q1 | 2026-03-31 | 1,445,860,000 | 104,813,000 | 3.73 | reported discrete quarter |

## Macro Cross-References
- [CPIAUCSL](/indicator/CPIAUCSL/): Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
- [UNRATE](/indicator/UNRATE/): Unemployment Rate
- [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate
- [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private
- [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit
- [DFEDTARL](/indicator/DFEDTARL/): Federal Funds Target Range - Lower Limit
- [DGS3MO](/indicator/DGS3MO/): Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
- [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
- [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- [DGS30](/indicator/DGS30/): Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
- [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
- [CPILFESL](/indicator/CPILFESL/): Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
- [CPIUFDSL](/indicator/CPIUFDSL/): Consumer Price Index for All Urban Consumers: Food
- [CPIENGSL](/indicator/CPIENGSL/): Consumer Price Index for All Urban Consumers: Energy
- [CUSR0000SAH1](/indicator/CUSR0000SAH1/): Consumer Price Index for All Urban Consumers: Shelter
- [PCEPI](/indicator/PCEPI/): Personal Consumption Expenditures: Chain-type Price Index
- [PCEPILFE](/indicator/PCEPILFE/): Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
- [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities
- [T10YIE](/indicator/T10YIE/): 10-Year Breakeven Inflation Rate
- [U6RATE](/indicator/U6RATE/): Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
- [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm
- [CIVPART](/indicator/CIVPART/): Labor Force Participation Rate
- [EMRATIO](/indicator/EMRATIO/): Employment-Population Ratio
- [UNEMPLOY](/indicator/UNEMPLOY/): Unemployed
- [CE16OV](/indicator/CE16OV/): Employment Level
- [ICSA](/indicator/ICSA/): Initial Claims
- [JTSJOL](/indicator/JTSJOL/): Job Openings: Total Nonfarm
- [JTSQUR](/indicator/JTSQUR/): Quits: Total Nonfarm
- [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product
- [A191RL1Q225SBEA](/indicator/A191RL1Q225SBEA/): Real Gross Domestic Product: Percent Change from Preceding Period
- [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index
- [TCU](/indicator/TCU/): Capacity Utilization: Total Index
- [HOUST](/indicator/HOUST/): New Privately-Owned Housing Units Started: Total Units
- [PERMIT](/indicator/PERMIT/): New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
- [RSAFS](/indicator/RSAFS/): Advance Retail Sales: Retail Trade
- [PCE](/indicator/PCE/): Personal Consumption Expenditures
- [DSPIC96](/indicator/DSPIC96/): Real Disposable Personal Income
- [PSAVERT](/indicator/PSAVERT/): Personal Saving Rate
- [M2SL](/indicator/M2SL/): M2
- [BOPGSTB](/indicator/BOPGSTB/): U.S. International Trade in Goods and Services: Balance
- [MSPUS](/indicator/MSPUS/): Median Sales Price of Houses Sold for the United States
- [HSN1F](/indicator/HSN1F/): New One Family Houses Sold: United States
- [RHORUSQ156N](/indicator/RHORUSQ156N/): Homeownership Rate in the United States
- [TTLCONS](/indicator/TTLCONS/): Total Construction Spending: Total Construction in the United States
- [RRVRUSQ156N](/indicator/RRVRUSQ156N/): Rental Vacancy Rate in the United States
- [TOTALSL](/indicator/TOTALSL/): Total Consumer Credit Owned and Securitized
- [REVOLSL](/indicator/REVOLSL/): Revolving Consumer Credit Owned and Securitized
- [DRCCLACBS](/indicator/DRCCLACBS/): Delinquency Rate on Credit Card Loans, All Commercial Banks
- [GDP](/indicator/GDP/): Gross Domestic Product
- [GPDI](/indicator/GPDI/): Gross Private Domestic Investment
- [GCE](/indicator/GCE/): Government Consumption Expenditures and Gross Investment
- [PCEC](/indicator/PCEC/): Personal Consumption Expenditures
- [NETEXP](/indicator/NETEXP/): Net Exports of Goods and Services
- [GFDEBTN](/indicator/GFDEBTN/): Federal Debt: Total Public Debt
- [GFDEGDQ188S](/indicator/GFDEGDQ188S/): Federal Debt: Total Public Debt as Percent of Gross Domestic Product
- [FYFSD](/indicator/FYFSD/): Federal Surplus or Deficit
- [FGRECPT](/indicator/FGRECPT/): Federal Government Current Receipts
- [FGEXPND](/indicator/FGEXPND/): Federal Government: Current Expenditures
- [MANEMP](/indicator/MANEMP/): All Employees, Manufacturing
- [USCONS](/indicator/USCONS/): All Employees, Construction
- [USTRADE](/indicator/USTRADE/): All Employees, Retail Trade
- [USFIRE](/indicator/USFIRE/): All Employees, Financial Activities
- [USGOVT](/indicator/USGOVT/): All Employees, Government
- [AWHAETP](/indicator/AWHAETP/): Average Weekly Hours of All Employees, Total Private
- [DGORDER](/indicator/DGORDER/): Manufacturers' New Orders: Durable Goods
- [NEWORDER](/indicator/NEWORDER/): Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
- [BUSINV](/indicator/BUSINV/): Total Business Inventories
- [EXPGS](/indicator/EXPGS/): Exports of Goods and Services
- [IMPGS](/indicator/IMPGS/): Imports of Goods and Services
- [IR](/indicator/IR/): Import Price Index (End Use): All Commodities
- [PPIFIS](/indicator/PPIFIS/): Producer Price Index by Commodity: Final Demand

## Latest quarter (10-Q)

Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1633931/000110465926055233/bld-20260331x10q.htm

Extracted between Part I Item 2 and the next Item 3/4 or Part II heading after HTML sanitization.
Confidence: high
Filing date: 2026-05-05
Report date: 2026-03-31

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

​

TopBuild, headquartered in Daytona Beach, Florida, is a leading installer of insulation and commercial roofing and a specialty distributor of insulation and related building products to the construction industry in the United States and Canada.

​

We operate in two segments: Installation Services and Specialty Distribution. Our Installation Services segment installs insulation, roofing materials and other building products nationwide. As of March 31, 2026, we had more than 200 Installation Services branches located across the United States. We install various insulation applications, including fiberglass batts and rolls, blown-in loose fill fiberglass, polyurethane spray foam, and blown-in loose fill cellulose. Additionally, we install other building products including glass and windows, rain gutters, garage doors, closet shelving, and fireplaces, among other items. We handle every stage of the installation process, including material procurement supplied by leading manufacturers, project scheduling and logistics, multi-phase professional installation, and installation quality assurance.

​

Our acquisition of Progressive on July 14, 2025 enables us to expand our building envelope offering to general contractor customers and provide a broad suite of solutions. We construct and repair commercial roofs using various construction application types including built-up roofing, single ply, tile, metal, shingle and others. We provide the full lifecycle of comprehensive roofing services spanning non-discretionary re-roofing, recurring maintenance services and new construction to a diverse set of commercial customers including education, technology, industrial, government and healthcare.

​

Our Specialty Distribution segment distributes a comprehensive portfolio of building envelope, specialty products and mechanical and fabricated insulation for the residential and commercial/industrial end markets. We also offer insulation accessories, rain gutters, and other related building products. As of March 31, 2026, we had more than 250 distribution centers across the United States and Canada. Our Specialty Distribution customer base consists of thousands of general contractors of all sizes serving a wide variety of residential and commercial/industrial industries, gutter contractors, weatherization contractors, other contractors, dealers, metal building erectors, and modular home builders.

​

We believe that having both Installation Services and Specialty Distribution provides us with a number of distinct competitive advantages. First, the combined buying power of our two business segments, along with our scale, strengthens our ties to the major manufacturers of insulation, commercial roofing and other building products.  This enables us to buy competitively and ensures the availability of supply to our local branches and distribution centers.  The overall effect drives efficiencies throughout our supply chain.  Second, being a leader in both installation services and specialty distribution allows us to reach a broader set of builders and contractors more effectively, regardless of their size or geographic location in the U.S. and Canada, and leverage residential, commercial, and industrial construction growth regardless of location.  Third, during housing industry downturns, many insulation contractors who buy directly from manufacturers during industry peaks return to purchasing through specialty distributors. This helps to reduce our exposure to cyclical swings in our business. We’ve also increased our exposure to non-cyclical revenue through maintenance and other recurring installation services through acquisitions.

​

For additional details pertaining to our operating results by segment, see Note 7 – Segment Information to our unaudited condensed consolidated financial statements contained in Part I, Item 1 of this Quarterly Report. For additional details regarding our strategy, material trends in our business and seasonality, please refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report for the year ended December 31, 2025, as filed with the SEC on February 26, 2026.

​

23

Table of Contents

Recent Developments

​

To date, tariffs imposed under the International Emergency Economic Powers Act ("IEEPA") and other trade authorities have had a minimal impact on our business because we purchase a limited number of products directly or indirectly from jurisdictions exposed to those tariffs. On February 20, 2026, the U.S. Supreme Court ruled in Learning Resources, Inc. v. Trump that IEEPA does not authorize the President to impose tariffs, and all IEEPA-based tariffs were terminated effective February 24, 2026. Given the minimal impact of tariffs on our business, we do not expect the Court's ruling, or the termination of IEEPA tariffs, to have a material impact on our supply chain costs or our results of operations. In addition, we do not believe we have any material obligation to reimburse customers or other counterparties in connection with tariff-related charges previously collected or passed through. While tariffs remain in effect under other legal authorities, including Sections 232 and 301 of applicable trade statutes, and the President has imposed a temporary 10% global tariff under Section 122 of the Trade Act of 1974, we do not currently anticipate that these measures will have a material impact on our business. We continue to monitor developments in U.S. trade policy, including potential new tariff actions and related litigation, and will update our disclosures as circumstances warrant.

​

FIRST QUARTER 2026 VERSUS FIRST QUARTER 2025

​

The following table sets forth our net sales, gross profit, operating profit, and margins, as reported in our condensed consolidated statements of operations, in thousands:

​

​

​

​

​

​

​

​

​

​

Three Months Ended March 31, 

​

​

​

2026

​

2025

​

Net sales

​

$

1,445,860

​

$

1,233,278

​

Cost of sales

​

​

1,045,607

​

​

881,805

​

Cost of sales ratio

​

​

72.3

%

​

71.5

%

​

​

​

​

​

​

​

​

Gross profit

​

​

400,253

​

​

351,473

​

Gross profit margin

​

​

27.7

%

​

28.5

%

​

​

​

​

​

​

​

​

Selling, general, and administrative expense

​

​

225,210

​

​

173,984

​

Selling, general, and administrative expense to sales ratio

​

​

15.6

%

​

14.1

%

​

​

​

​

​

​

​

​

Operating profit

​

​

175,043

​

​

177,489

​

Operating profit margin

​

​

12.1

%

​

14.4

%

​

​

​

​

​

​

​

​

Other expense, net

​

​

(35,296)

​

​

(11,516)

​

Income tax expense

​

​

(34,934)

​

​

(42,588)

​

Net income

​

$

104,813

​

$

123,385

​

Net margin

​

​

7.2

%

​

10.0

%

​

Sales and Operations

​

Net sales increased by 17.2% for the three months ended March 31, 2026, from the comparable period of 2025. The increase was primarily driven by a 24.3% increase in sales from acquisitions, partially offset by a 5.5% decline in volume and a 1.6% impact from lower selling prices.

​

Gross profit margins were 27.7% and 28.5% for the three months ended March 31, 2026 and 2025, respectively. The decline in gross profit margin is primarily due to lower sales volume and lower customer pricing.

​

Selling, general, and administrative expenses as a percentage of sales were 15.6% and 14.1% for the three months ended March 31, 2026 and 2025, respectively. The increase in the percentage of sales during the three months ended March 31, 2026 is due to incremental selling, general, and administrative expenses from acquisitions, including intangible amortization.

​

Operating profit margins were 12.1% and 14.4% for the three months ended March 31, 2026 and 2025, respectively. Operating profit margins during the three months ended March 31, 2026 as a percentage of sales decreased due to lower sales volume and lower customer pricing, as well as incremental selling, general and administrative expenses from acquisitions, including intangible amortization.

​

24

Table of Contents

Business Segment Results

​

The following table sets forth our net sales and operating profit margins by business segment, in thousands:

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended March 31, 

​

​

​

​

  ​ ​ ​

2026

  ​ ​ ​

2025

  ​ ​ ​

Percent Change

Net sales by business segment:

​

​

​

​

​

​

​

​

​

Installation Services

​

$

777,329

​

$

745,533

​

4.3

%

Specialty Distribution

​

​

737,080

​

​

559,804

​

31.7

%

Intercompany eliminations

​

​

(68,549)

​

​

(72,059)

​

​

​

Net sales

​

$

1,445,860

​

$

1,233,278

​

17.2

%

​

​

​

​

​

​

​

​

​

​

Operating profit by business segment:

​

​

​

​

​

​

​

​

​

Installation Services

​

$

119,191

​

$

129,616

​

(8.0)

%

Specialty Distribution

​

​

80,008

​

​

69,059

​

15.9

%

Intercompany eliminations

​

​

(13,482)

​

​

(11,927)

​

​

​

Operating profit before general corporate expense

​

​

185,717

​

​

186,748

​

(0.6)

%

General corporate expense, net

​

​

(10,674)

​

​

(9,259)

​

​

​

Operating profit

​

$

175,043

​

$

177,489

​

(1.4)

%

​

​

​

​

​

​

​

​

​

​

Operating profit margins:

​

​

​

​

​

​

​

​

​

Installation Services

​

​

15.3

%

​

17.4

%

​

​

Specialty Distribution

​

​

10.9

%

​

12.3

%

​

​

Operating profit margin before general corporate expense

​

​

12.8

%

​

15.1

%

​

​

Operating profit margin

​

​

12.1

%

​

14.4

%

​

​

​

Installation Services

​

Sales

​

Sales in our Installation Services segment increased $31.8 million, or 4.3%, for the three months ended March 31, 2026, as compared to the same period in 2025. Sales increased 16.9% from acquisitions, partially offset by a 9.8% decline in sales volume and a 2.9% impact from lower selling prices.

​

Operating profit margins

​

Operating profit margins in our Installation Services segment were 15.3% and 17.4% for the three months ended March 31, 2026 and 2025, respectively. The decline in operating profit margin is primarily due to lower sales volume and lower customer pricing, as well as incremental selling, general and administrative expenses from acquisitions, including intangible amortization.

​

Specialty Distribution

​

Sales

​

Sales in our Specialty Distribution segment increased $177.3 million, or 31.7%, for the three months ended March 31, 2026, as compared to the same period in 2025. Sales increased 31.1% from acquisitions, 0.3% from higher selling prices and a 0.3% increase in sales volume.

​

Operating profit margins

​

Operating profit margins in our Specialty Distribution segment were 10.9% and 12.3% for the three months ended March 31, 2026 and 2025, respectively. The decline in operating profit margin is primarily due to incremental selling, general and administrative expenses from acquisitions, including intangible amortization.

25

Table of Contents

OTHER ITEMS

​

Other expense, net

​

Other expense, net, increased to $35.3 million from $11.5 million in the three months ended March 31, 2026 and 2025, respectively. The increase was primarily driven by $20.0 million higher interest expense from Amendment No. 5 and issuance of our 5.625% Senior Notes, along with $2.9 million lower interest income due to lower average levels of invested cash balances during the first quarter of 2026.

​

Income tax expense

​

Income tax expense was $34.9 million, an effective tax rate of 25.0 percent, for the three months ended March 31, 2026, compared to $42.6 million, an effective tax rate of 25.7 percent, for the comparable period in 2025.  The tax rate for the three months ended March 31, 2026, was lower primarily related to an increase in tax benefit related to share-based compensation.

​

Cash Flows and Liquidity

​

Significant sources (

[Excerpt truncated for page length; source filing is linked above.]

## Latest 10-K MD&A

Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization.
Confidence: high

Item 7.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

​

The financial and business analysis below provides information which we believe is relevant to an assessment and understanding of our financial position, results of operations, and cash flows.  This financial and business analysis should be read in conjunction with the financial statements and related notes.

​

In this section, we generally discuss the results of our operations for the year ended December 31, 2025, compared to the year ended December 31, 2024. For a discussion of the year ended December 31, 2024, to the year ended December 31, 2023, please refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 25, 2025, which discussion is hereby incorporated herein by reference.

​

Executive Summary

​

We are a leading installer of insulation and commercial roofing and a specialty distributor of insulation and other building products to the construction industry in the United States and Canada.  Demand for our products and services is driven primarily by residential and commercial/industrial construction and by industrial manufacturing activity.  A number of local and national factors influence activity in each of our lines of business, including demographic trends, interest rates, employment levels, business investment, supply and demand for housing, availability of credit, foreclosure rates, consumer confidence, and general economic conditions.  

​

The core of our business is inherently environmentally friendly.  Our insulation and commercial roofing installation services and our distributed products drive thermal efficiency, lower energy usage, and reduce carbon emissions.  We are a leader in delivering these benefits for new and existing homes and commercial/industrial facilities across the United States and Canada.  

​

Strategy

​

We are committed to creating long-term value for all stakeholders – employees, customers, suppliers, and investors.  Our team is focused on driving operational efficiencies and sharing best practices throughout our organization.  Our core values include:

​

•

Safety – We put the safety of our people first.

•

Integrity – We deliver results with integrity, respect, and accountability.

•

Focus – We are customer-focused, grounded in strong relationships.

•

Innovation – We are continuously improving and encourage idea sharing.

•

Unity – We are united as one team, valuing diversity.

•

Community – We make a difference in the communities we serve.

•

Empowerment – We are empowered to be our best, individually and as a team.

​

Our strategy is focused on growth and productivity including:

​

•

Attracting and retaining top talent by fostering a culture of respect, local empowerment and entrepreneurship;

•

Improving operational excellence by leveraging technology to drive productivity and efficiency; and

•

Driving profitable growth by expanding our market presence organically and through acquisitions.

​

Our operating results depend on residential new construction activity, commercial construction activity and industrial manufacturing activity, all of which are subject to business and economic cycles.  These cycles have less of an impact on our Specialty Distribution segment due to the repair and replacement component of our mechanical insulation distribution business.  In addition, within our Installation Services segment, our commercial roofing services include re-roofing and maintenance, which are not tied to new construction.  We are also dependent on third-party suppliers and manufacturers providing us with an adequate supply of high-quality products.  

​

30

​

Table of Contents

Recent Developments

Throughout 2025, the U.S. government  announced tariffs and trade restrictions on certain goods produced outside the United States. As a result, certain jurisdictions, including China, Mexico, Canada, and the European Union, also imposed tariffs and restrictions on certain goods produced in the United States. While we have a limited number of products that we purchase directly or indirectly from jurisdictions exposed to effected or proposed tariffs, such products represent a relatively small portion of our current material spend and we believe the direct impact for our business is minimal. We actively work with our supply base to mitigate the anticipated impact of current applicable tariffs and evaluate pricing actions to the extent we believe necessary or appropriate. The potential direct and indirect impacts of tariffs on the broad economy and, in particular, housing demand, are uncertain and we continue to closely monitor and evaluate the ongoing situation.

​

Material Trends in Our Business

​

Residential New Construction

Demand for single-family homes in 2025 weakened throughout the year and continues to be uneven across the country. Multi-family starts have slowly started to improve in certain geographies. We expect our multi-family sales will continue to be slow as we move into 2026.  Multi-family housing units typically require approximately 40% of the insulation that a single-family unit requires.  While the residential end-markets are facing near-term uncertainty due to affordability concerns, interest rates, and overall consumer confidence, we remain optimistic about the longer-term fundamentals due to underbuilding in the United States in prior years.

​

Commercial and Industrial Construction

Our heavy commercial and industrial backlog is strong, our bidding activity is active, and our acquisitions of Progressive and SPI in 2025 all continue to support our positive view of commercial/industrial sales at our Installation Services and Specialty Distribution segments. We remain optimistic that declining interest rates in the future will continue to unlock projects across many industries. In addition, recurring maintenance and repair work on commercial and industrial sites serves as a continued driver for our business.

​

Seasonality

​

Sales across our end markets are typically slower during the winter months due to lower construction activity.

​

Results of Operations

​

We report our financial results in conformity with GAAP.  

​

The following table sets forth our net sales, gross profit, operating profit, and margins, as reported in our Consolidated Statements of Operations, in thousands:

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 

​

​

  ​ ​ ​

2025

  ​ ​ ​

2024

  ​ ​ ​

Net sales

​

$

5,409,086

​

$

5,329,803

​

Cost of sales

​

​

3,840,089

​

​

3,704,885

​

Cost of sales ratio

​

​

71.0

%

​

69.5

%

​

​

​

​

​

​

​

​

Gross profit

​

​

1,568,997

​

​

1,624,918

​

Gross profit margin

​

​

29.0

%

​

30.5

%

​

​

​

​

​

​

​

​

Selling, general, and administrative expense

​

​

777,064

​

​

738,575

​

Selling, general, and administrative expense to sales ratio

​

​

14.4

%

​

13.9

%

​

​

​

​

​

​

​

​

Operating profit

​

​

791,933

​

​

886,343

​

Operating profit margin

​

​

14.6

%

​

16.6

%

​

​

​

​

​

​

​

​

Other expense, net

​

​

(88,350)

​

​

(45,555)

​

Income tax expense

​

​

(181,856)

​

​

(218,186)

​

Net income

​

$

521,727

​

$

622,602

​

Net margin

​

​

9.6

%

​

11.7

%

31

​

Table of Contents

Comparison of the Years Ended December 31, 2025 and December 31, 2024

​

Sales and Operations

​

Net sales for 2025 increased 1.5 percent, or $79.3 million, to $5.4 billion.  The increase was driven by an 8.8 percent increase in sales from acquisitions, and a 0.8 percent impact from higher selling prices, partially offset by an 8.1 percent decline in volume.

​

Our gross profit margins were 29.0 percent and 30.5 percent for 2025 and 2024, respectively. The decline in gross profit margin is primarily due to lower sales volume, and customer price pressures on residential products within our distribution business. In addition, we incurred $12.5 million of one-time expenses in connection with our branch consolidations and headcount reductions and $11.4 million amortization of inventory step-up related to purchase accounting. These impacts were partially offset by savings from branch consolidations and headcount reductions.

​

Selling, general, and administrative expenses as a percentage of sales were 14.4 percent and 13.9 percent for 2025 and 2024, respectively. Increase in the percentage of sales during 2025 is due to incremental selling, general, and administrative expenses from acquisitions, including intangible amortization, and acquisition-related transaction costs.

​

Operating margins were 14.6 percent and 16.6 percent for 2025 and 2024, respectively. The decrease in operating margins was due to lower sales volume, and customer price pressures on residential products within our distribution business along with $14.5 million of one-time expenses in connection with our branch consolidations and headcount reductions, and $11.4 million amortization of inventory step-up related to purchase accounting for SPI. In addition, we incurred incremental selling, general, and administrative expenses from acquisitions, including amortization, and acquisition-related transaction costs, partially offset by savings from these branch consolidations and headcount reductions.  

​

Other Expense, Net

​

Other expense, net, increased $42.8 million to $88.4 million in 2025 from $45.6 million in 2024. The increase is primarily driven by higher interest expense of $30.7 million from Amendment No. 5 and issuance of 5.625% Senior Notes, along with $12.6 million lower interest income due to lower average levels of invested cash balances throughout the year.

​

Income Tax Expense

​

Our effective tax rate decreased from 26.0 percent in 2024 to 25.8 percent in 2025.  The lower 2025 rate was primarily related to state tax adjustments.

​

32

​

Table of Contents

2025 and 2024 Business Segment Results

​

The following table sets forth our net sales and operating profit information by business segment, in thousands:

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 

​

​

​

​

  ​ ​ ​

2025

  ​ ​ ​

2024

  ​ ​ ​

​

Percent Change

​

Net sales by business segment:

​

​

​

​

​

​

​

​

​

Installation Services

$

3,182,853

​

$

3,294,630

​

​

(3.4)

%

Specialty Distribution

​

2,523,323

​

​

2,340,837

​

​

7.8

%

Intercompany eliminations

​

(297,090)

​

​

(305,664)

​

​

​

​

Net sales

$

5,409,086

​

$

5,329,803

​

​

1.5

%

​

​

​

​

​

​

​

​

​

​

Operating profit by business segment (a):

​

​

​

​

​

​

​

​

​

Installation Services

$

589,494

​

$

649,162

​

​

(9.2)

%

Specialty Distribution

​

322,966

​

​

352,431

​

​

(8.4)

%

Intercompany eliminations

​

(53,880)

​

​

(49,834)

​

​

​

​

Operating profit before general corporate expense

​

858,580

​

​

951,759

​

​

(9.8)

%

General corporate expense, net (b)

​

(66,647)

​

​

(65,416)

​

​

​

​

Operating profit

$

791,933

​

$

886,343

​

​

(10.7)

%

​

​

​

​

​

​

​

​

​

​

Operating profit margins:

​

​

​

​

​

​

​

​

​

Installation Services

​

18.5

%

​

19.7

%

​

​

​

Specialty Distribution

​

12.8

%

​

15.1

%

​

​

​

Operating profit margin before general corporate expense

​

15.9

%

​

17.9

%

​

​

​

Operating profit margin

​

14.6

%

​

16.6

%

​

​

​

(a)

Segment operating profit includes an allocation of general corporate expenses attributable to the operating segments which is based on direct benefit or usage (such as salaries of corporate employees who directly support the segment).  

(b)

General corporate expense, net includes expenses not specifically attributable to our segments for functions such as corporate human resources, finance and legal, including salaries, benefits, and other related costs. In our second quarter of 2024, we incurred an acquisition termination fee of $23.0 million.  See Item 8. Financial Statements and Supplementary Data – Note 8. Segment Information and Note 15. Business Combinations.  

​

2025 and 2024 Business Segment Results Discussion

​

Changes in operating profit margins in the following business segment results discussion exclude general corporate expense, net in 2025 and 2024, as applicable.

​

Installation Services

​

Sales

​

Sales decreased $111.8 million, or 3.4 percent, in 2025 compared to 2024.  Sales decreased 11.2 percent from lower sales volume, partially offset by an increase of 7.6 percent from our acquisitions and 0.2 percent from higher selling prices.  

​

Operating Results

​

Operating margins in the Installation Services segment were 18.5 percent and 19.7 percent for 2025 and 2024, respectively.  The decrease in operating margin is primarily due to lower sales volume, higher acquisition-related amortization, and one-time expenses incurred in connection with our branch consolidations and headcount reductions, but was partially offset by the savings generated by the cost reduction actions taken in the first quarter of 2025.

​

Specialty Distribution

​

Sales

​

Sales increased $182.5 million, or 7.8 percent, in 2025 compared to 2024.  Sales increased 9.4 percent from our acquisitions and 1.4 percent from higher selling prices, partially offset by 3.0 percent lower sales volume.

33

​

Table of Contents

​

Operating Results

​

Operating margins in the Specialty Distribution segment were 12.8 percent and 15.1 percent for 2025 and 2024, respectively.  The decrease in operating margin is primarily due to one-time expenses incurred in connection with our branch consolidations, lower sales volume, and price pressures on residential products, but was partially offset by the savings generated by the cost reduction actions taken in the first quarter of 2025. In addition, we incurred $11.4 million amortization of inventory step-up related to purchase accounting in connection with our acquisition of SPI.

Commitments and Contingencies

​

We are subject to certain claims, charges, litigation, and other proceedings in the ordinary course of our business. We believe we have adequate defenses in these matters, and we do not believe that the ultimate outcome of these matters will have a material adverse effect on us.  For additional information see Item 8. Financial Statements and Supplementary Data – Note 11. Other Commitments and Contingencies.

​

Liquidity and Capital Resources

​

We have access to liquidity through our cash from operations and available borrowing capacity under Amendment No. 5, which provides for borrowing and/or standby letter of credit issuances of up to $1.0 billion under the revolving facility. For additional information regarding our outstanding debt and borrowing capacity see Item 8. Financial Statements and Supplementary Data – Note 6. Long-Term Debt.  

​

The following table summarizes our total liquidity, in thousands:

​

​

​

​

​

​

​

​

​

​

As of December 31,

​

​

2025

​

2024

Cash and cash equivalents (a)

​

$

184,742

​

$

400,318

​

​

​

​

​

​

​

Revolving facility

​

​

1,000,000

​

​

500,000

Less: standby letters of credit

​

​

(66,103)

​

​

(63,770)

Availability under Revolving facility

​

​

933,897

​

​

436,230

​

​

​

​

​

​

​

Total liquidity

​

$

1,118,639

​

$

836,548

(a)

Our cash and cash equivalents consist of AAA-rated money market funds as well as cash held in our demand deposit accounts.

​

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 known contractual obligations including funding our debt service requirements, capital expenditures, lease obligations and working capital needs for at least the next twelve months. We also have adequate liquidity to maintain off-balance sheet arrangements for short-term leases, letters of credit, and performance and license bonds. See Item 8. Financial Statements and Supplementary Data of this Annual Report for related disclosures.

​

We 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.  We also have bonds outstanding for license and insurance.

​

The following table summarizes our outstanding performance, licensing, insurance, and other bonds, in thousands:

​

​

​

​

​

​

​

​

​

​

As of December 31,

​

​

2025

​

2024

Outstanding bonds:

​

​

​

​

​

​

Performance bonds

​

$

251,622

​

$

146,479

Licensing, insurance, and other bonds

​

​

30,656

​

​

28,462

Total bonds

​

$

282,278

​

$

174,941

​

34

​

Table of Contents

The acquisition of Progressive in 2025 accounts for $123.2 million of the increase in outstanding bonds as of December 31, 2025 compared to the prior year.

​

Cash Flows

​

The following table presents a summary of our cash flows provided by (used in) operating, investing and financing activities for the periods indicated, in thousands:

​

​

​

​

​

​

​

​

  ​ ​ ​

Year Ended December 31, 

​

​

2025

  ​ ​ ​

2024

Changes in cash and cash equivalents:

​

​

​

​

​

​

Net cash provided by operating activities

​

$

756,319

​

$

776,026

Net cash used in investing activities

​

(1,990,441)

​

(203,523)

Net cash provided by (used in) financing activities

​

​

1,016,767

​

​

(1,016,272)

Impact of exchange rate changes on cash

​

​

1,779

​

​

(4,478)

Net decrease in cash and cash equivalents

​

$

(215,576)

​

$

(448,247)

​

Net cash flows provided by operating activities decreased $19.7 million for the year ended December 31, 2025, as compared to December 31, 2024.  Net income decreased $100.9 million, or 16.2 percent, compared with the prior year period, driven by lower sales volume and acquisition-related expenses.  The decline in net income was partially offset by decreases in working capital accounts, specifically in accounts receivable and inventory, leading to less cash used in operations compared to the prior year.

​

Net cash used in investing activities was $2.0 billion for the year ended December 31, 2025, primarily comprised of $1.9 billion for acquisitions and $59.4 million for purchases of property and equipment (primarily vehicles, equipment and computer hardware and software).  Net cash used in investing activities was $203.5 million for the year ended December 31, 2024, primarily comprised of $136.8 million for acquisitions and $69.3 million for purchases of property and equipment (primarily vehicles, equipment and computer hardware and software). Those uses were partially offset by $2.6 million of proceeds received from the sale of assets.

​

Net cash provided by financing activities was $1.0 billion for the year ended December 31, 2025. During the year ended December 31, 2025, we refinanced our Term Loan, drew on our delayed draw term loan, and issued our 5.625% Senior Notes. These activities generated a total of $2.0 billion in long-term debt issuance, offset by repayment of $515.6 million principal, including normal quarterly payments, and one-time payments of $17.4 million in related debt issuance costs. Additionally, we borrowed and repaid $178.0 million on our revolving facility, all within the fourth quarter of 2025. We also used $434.2 million for the repurchase of our common stock, paid $9.4 million of excise taxes on share repurchases, repaid $3.6 million in principal on finance lease obligations, and incurred $3.0 million net cash outflow related to exercise of share-based incentive awards and stock options. Net cash used in financing activities was $1.0 billion for the year ended December 31, 2024. During the year ended December 31, 2024, we used $966.4 million for the repurchase of common stock, $47.0 million for debt repayments, and $2.9 million net activity related to exercise of share-based incentive awards and stock options.

​

Critical Accounting Policies and Estimates

​

We prepare our Consolidated Financial Statements in conformity with GAAP.  The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts and disclosure of assets and liabilities, and any related contingencies, at the date of the financial statements, as well as the reported amounts of sales and expenses during the reporting period.  Actual results could differ from those estimates. 

​

Our significant accounting policies are more fully described in Item 8. Financial Statements and Supplementary Data – Note 1. Summary of Significant Accounting Policies.  However, certain of our accounting policies considered critical are those we believe are both most important to the portrayal of our financial condition and operating results and require our most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.  Judgments and uncertainties affecting the application of those policies may result in materially different amounts being reported under different conditions or using different assumptions.  We consider the following policies to be most critical in understanding the judgments that are involved in preparing our Consolidated Financial Statements. 

35

​

Table of Contents

​

Revenue Recognition and Receivables

​

Revenue is disaggregated between our Installation Services and Specialty Distribution segments.  A reconciliation of disaggregated revenue by segment is included in Item 8. Financial Statements and Supplementary Data – Note 8. Segment Information. We recognize revenue for our Installation Services segment over time as the related performance obligation is satisfied with respect to each particular order within a given customer’s contract. Progress toward complete satisfaction of the performance obligation is measured using a cost-to-cost measure of progress method. The cost input is based on the amount of material installed at that customer’s location and the associated labor costs, as compared to the total expected cost for the particular order. The total expected cost is an estimate in the revenue recognition process, requires judgment, and is subject to variability throughout the duration of the contract as a result of contract modifications and other circumstances impacting job completion. Generally, this results in revenue being recognized as the customer is able to receive and utilize the benefits provided by our services. Each contract contains one or more individual orders, which are based on services delivered. When material and installation services are bundled in a contract, we combine these items into one performance obligation as the overall promise is to transfer the combined item.

​

Revenue from our Specialty Distribution segment is recognized when title to products and risk of loss transfers to our customers. This represents the point in time when the customer is able to direct the use of and obtain substantially all the benefits from the product. The determination of when control is deemed transferred depends on the delivery terms that are agreed upon in the contract.

​

The transaction price is the amount of consideration the Company expects to receive based on the arrangement with the customer. The duration of our residential contracts with customers is relatively short, generally less than a 90-day period, whereas our commercial projects often span multiple quarters. There is not a significant financing component in either residential or commercial projects when considering the determination of the transaction price which gets allocated to the individual performance obligations, generally based on standalone selling prices. Additionally, we consider shipping costs charged to a customer as a fulfillment cost rather than a promised service and expense as incurred. Sales taxes, when incurred, are recorded as a liability and excluded from revenue on a net basis.

​

We record a contract asset when we have satisfied our performance obligation prior to billing and a contract liability when a customer payment is received prior to the satisfaction of our performance obligation. The difference between the beginning and ending balances of our contract assets and liabilities primarily results from the timing of our performance and the customers’ payment. See Note 3 – Revenue Recognition for more information.

​

We maintain allowances for estimated losses resulting from the inability of customers to make required payments.  In addition, we monitor our customer receivable balances and the credit worthiness of our customers on an on-going basis.  During downturns in our markets, declines in the financial condition and creditworthiness of customers impact the credit risk of the receivables involved and we have incurred additional bad debt expense related to customer defaults.

​

Business Combinations

​

The purchase price for business combinations is allocated to the estimated fair values of acquired tangible and intangible assets, including goodwill, and assumed liabilities, where applicable.  Additionally, we recognize customer relationships, trademarks and trade names, and non-compete agreements as identifiable intangible assets, which are recorded at fair value as of the transaction date. The fair value of the customer relationships intangible assets are determined by management using the multi-period excess earnings method under the income approach. Assumptions used in determining the fair value of the customer relationships intangible asset include forecasted revenue growth rate, earnings before interest, taxes, depreciation and amortization (EBITDA) margins, customer attrition rate,  discount rate and contributory asset charges, which are Level 3 inputs. The fair value of other intangible assets is determined primarily using current industry information.  Goodwill is recorded when consideration transferred exceeds the fair value of identifiable assets and liabilities.  Measurement-period adjustments to assets acquired and liabilities assumed with a corresponding offset to goodwill are recorded in the period they occur, which may include up to one year from the acquisition date.  Contingent consideration is recorded at fair value at the acquisition date.  Key assumptions used in estimating future cash flows included short-term revenue growth rates, earnings before interest, taxes, depreciation and amortization (EBITDA) margins, discount rates, customer attrition rates and contributory asset charges.

​

36

​

Table of Contents

Goodwill and Other Intangible Assets

​

Prior to the acquisition of Progressive on July 14, 2025, we had two reporting units which were also our operating and reportable segments: Installation and Specialty Distribution. Progressive became its own reporting unit for goodwill testing. Our three reporting units contain goodwill.  Our reporting units engage in business activities for which discrete financial information including long range forecasts is available, and we complete the impairment testing of goodwill at this level, as defined by accounting guidance. Assets acquired and liabilities assumed are assigned to the applicable reporting unit based on whether the acquired assets and liabilities relate to the operations of such unit and determination of its fair value.  Goodwill assigned to the reporting unit is the excess of the fair value of the acquired business over the fair value of the individual assets acquired and liabilities assumed for the reporting unit.

​

We perform our annual impairment testing of goodwill in the fourth quarter of each year, or as events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. When assessing goodwill for impairment, we have the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, we determine it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then we recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. If we conclude otherwise, then no further action is taken. We also have the option to bypass the qualitative assessment and only perform a quantitative assessment. For the years ended December 31, 2025 and 2024, we performed quantitative and qualitative assessments, respectively.

​

Fair value for our reporting units is determined using a discounted cash flow method and a market multiple approach (with a 50% weighting of each), both which include significant unobservable inputs (Level 3 inputs).  We believe these methodologies are comparable to what would be used by other market participants.  Using the discounted cash flow method requires us to make significant estimates and assumptions, including long term projections of cash flows, market conditions, and appropriate discount rates.  Our judgments are based on historical experience, current market trends, consultations with external valuation specialists and other information.  The market approach includes a comparison of the multiple of a reporting unit's carrying value to its earnings before interest, taxes, depreciation and amortization with the multiples of similar businesses or guideline companies whose securities are actively traded in the public markets.  While we believe that the estimates and assumptions underlying the valuation methodologies are reasonable, changes to estimates and assumptions could result in different outcomes.  In estimating future cash flows, we rely on internally generated long-range forecasts for sales and operating profits, and a long term assumed annual growth rate of cash flows for periods after the long-range forecast.  We generally develop these forecasts based upon, among other things, recent sales data for existing products, and estimated U.S. housing starts.

​

When necessary, an impairment loss is recognized to the extent that a reporting unit’s recorded goodwill exceeds its fair value. In the fourth quarters of 2025 and 2024, we performed an assessment on our goodwill and determined that the estimated fair value of each reporting unit exceeded its carrying value, and therefore the goodwill was not impaired.

​

We did not recognize any impairment charges for goodwill for the years ended December 31, 2025, 2024, and 2023. As of December 31, 2025, net goodwill reflected $762.0 million of accumulated impairment losses, relating primarily to impairment charges taken in 2008-2010 following the substantial decrease in U.S. housing starts after the financial crisis of 2007-2008.

​

Intangible assets with finite useful lives are amortized using the straight-line method over their estimated useful lives. We evaluate the remaining useful lives of amortizable identifiable intangible assets at each reporting period to determine whether events and circumstances warrant a revision to the remaining periods of amortization.

​

Income Taxes

​

If, based upon all available evidence, both positive and negative, it is more likely than not (more than 50 percent likely) deferred tax assets will not be realized, a valuation allowance is recorded.  Significant weight is given to positive and negative evidence that is objectively verifiable.  A company’s three-year cumulative loss position is significant negative evidence in considering whether deferred tax assets are realizable and the accounting guidance restricts the amount of reliance we can place on projected taxable income to support the recovery of deferred tax assets.

37

​

Table of Contents

​

While we believe we have adequately assessed for our uncertain tax positions, amounts asserted by taxing authorities could vary from our assessment of uncertain tax positions.  Accordingly, provisions for tax-related matters, including interest and penalties, could be recorded in income tax expense in the period revised assessments are made. These unrecognized tax positions including associated interest and penalties are not material to our consolidated financial statements for the periods presented.

​

Additionally, we generally do not provide for taxes related to undistributed earnings as such earnings would not be taxable when remitted or would be considered to be indefinitely reinvested.

​

Recently Issued Accounting Pronouncements

​

Recently issued accounting pronouncements and their expected or actual effect on our reported results of operations are addressed in Item 8. Financial Statements and Supplementary Data – Note 1. Summary of Significant Accounting Policies.

​