The following is a discussion and analysis of our financial condition and
results of operations as of and for the periods presented below. The following
discussion and analysis should be read in conjunction with the "Condensed
Consolidated Financial Statements" and notes thereto included elsewhere in this
Quarterly Report on Form 10-Q. This section and other parts of this Quarterly
Report on Form 10-Q contain forward-looking statements that involve risks and
uncertainties that could cause actual results to differ materially from the
results expressed or implied by the forward-looking statement. We have made
these statements in reliance on the safe harbor created by the Private
Securities Litigation Reform Act of 1995 (set forth in Section 27A of the
Securities Act of 1933, as amended, or the Securities Act, and Section 21E of
the Securities Exchange Act of 1934, as amended, or the Exchange Act). In some
cases, forward-looking statements can be identified by words such as
"anticipates," "believes," "could," "estimates," "expects," "intends," "may,"
"plans," "potential," "predicts," "projects," "should," "will," "would" or the
negative or similar expressions. All of our forward-looking statements are
subject to risks and uncertainties that may cause actual results to differ
materially from those that we are expecting, including:

•the outbreak of the novel coronavirus COVID-19, or the COVID-19 Pandemic;
•the length and severity of the COVID-19 Pandemic and its impact on the global
economy, our business, operations and financial results;
•the impact of cost-saving initiatives on our financial and liquidity position;
•federal, state and local government initiatives to mitigate the impact of the
COVID-19 Pandemic, including additional restrictions on business activities,
"shelter-in-place" orders, guidelines and other restrictions;
•our ability to qualify as an essential business or service under state, county
or local orders and guidelines;
•the timing, amount and availability of economic stimulus or other initiatives
by federal, state or provincial governments;
•our ability to effectively manage any downturns in the new commercial
construction market, the commercial repair and remodel market and the new
residential construction market;
•our ability to effectively manage any changes in economic, political and social
conditions;
•fluctuating demand for the products and services we offer;
•our ability to effectively compete in a highly competitive industry;
•our ability to realize the anticipated financial and strategic goals of future
acquisitions or investments, including the identification of acquisition targets
and the integration and performance of acquired stores and businesses, including
integration of financial systems;
•our ability to achieve the intended benefits of our recent acquisitions,
including the realization of synergies;
•a diversion of management's attention from ongoing business concerns to matters
related to acquisitions we may make in the future or the integration of previous
acquisitions;
•our ability to maintain our existing contractual and business relationships;
•the change in any exclusive rights or relationships we have with suppliers that
provide us access to leading brands;
•a material disruption at our suppliers' facilities due to weather,
environmental incidents, transportation disruption, natural disasters or public
health emergencies such as the COVID-19 Pandemic and other operational problems;
•the effect of any social unrest upon our branches or our customers' businesses;
•the effects of any changes in environmental, health and safety laws and
regulations on our operations and liquidity;
•our ability to attract and retain key management personnel and other talent
required for our business;
•our exposure to legal claims and proceedings related to our business;
•our ability to manage the impact of debt and equity financing transactions;
•our ability to generate a sufficient amount of cash to service our indebtedness
and fund our operations;
•our ability to operate our business under agreements governing our indebtedness
containing financial covenants and other restrictions;
•the effects of and ability to continue incurring a substantial amount of
indebtedness under our asset-based lending credit facility and our term loan
facility;
•the volatility of the trading price of our common stock;
•our relationship, and actual and potential conflicts of interest, with our
majority shareholder; and
•additional factors discussed under the sections entitled "Risk Factors," and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," as well as in the other reports we file with the Securities and
Exchange Commission, or SEC.

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The forward-looking statements contained in this Quarterly Report on Form 10-Q
are based on historical performance and management's current plans, estimates
and expectations in light of information currently available to us and are
subject to uncertainty and changes in circumstances. There can be no assurance
that future developments affecting us will be those that we have anticipated.
Actual results may differ materially from these expectations due to changes in
global, regional or local political, economic, business, competitive, market,
regulatory, public health and other factors, many of which are beyond our
control, as well as the other factors described in Item 1A. Risk Factors in this
Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year
ended December 31, 2019, filed with the SEC on February 25, 2020, or the 2019
10-K, as updated by our subsequent filings with the SEC. Additional factors or
events that could cause our actual results to differ may also emerge from time
to time, and it is not possible for us to predict all of them. Comparisons of
results for current and any prior periods are not intended to express any future
trends or indications of future performance, unless expressed as such, and
should only be viewed as historical data. Should one or more of these risks or
uncertainties materialize, or should any of our assumptions prove to be
incorrect, our actual results may vary in material respects from what we may
have expressed or implied by these forward-looking statements. You should not
place undue reliance on any of our forward-looking statements. Any
forward-looking statement made by us in this Quarterly Report on Form 10-Q
speaks only as of the date hereof. We undertake no obligation to publicly update
any forward-looking statement, whether as a result of new information, future
developments or otherwise, except as may be required by applicable securities
laws. We qualify all of our forward-looking statements by these disclaimers.

Overview



We are one of the largest specialty building products distributors of wallboard
and suspended ceiling systems in the United States and Canada. Since 2013, we
have completed 40 acquisitions and we currently have over 170 branches and
30,000 SKUs.

We have a national operating model supported by local market expertise and an
entrepreneurial, customer-centric culture. Our strong national brand and
acquisition expertise have established us as the distributor of choice for
leading suppliers, and we have over 25,000 customers across construction-related
end markets. We believe we are able to maintain our local market excellence due
to our longstanding customer relationships, dependable service and
market-specific product offerings that cater to local market trends and
preferences.

Factors and Trends Affecting Our Business and Results of Operations



See Item 7, Management's Discussion and Analysis of Financial Condition and
Results of Operations, in the 2019 10-K for a discussion of the general and
specific factors and trends affecting our business and results of operations,
which include general economic conditions, new non-residential construction, new
residential construction, non-residential repair and remodel construction,
volume, costs and pricing programs.

The COVID-19 Pandemic's Impact on Our Business



The uncertain macroeconomic environment created by the COVID-19 Pandemic has had
and will continue to have a significant, adverse impact on our business. As of
the date of this filing, significant uncertainty exists concerning the magnitude
of the impact and duration of the disruption, and we are unable to determine or
predict the overall impact the COVID-19 Pandemic will have on our financial
position, results of operations, or cash flows. The following events related to
the COVID-19 Pandemic have resulted and will continue to result in lost or
delayed revenue to our Company:

•limitations on the ability of manufacturers to produce the products we sell;
•limitations on the ability of our suppliers to meet delivery requirements and
commitments;
•limitations on the ability of our employees to perform their work;
•limitations imposed by local, state or federal orders and guidelines affecting
our ability to operate, including additional restrictions after the recent
escalation in COVID-19 diagnoses;
•limitations on the ability of freight carriers to deliver our products to us
and our customers;
•limitations on the ability of our customers to conduct their business and
purchase our products and services;
•delays in starting construction jobs, temporary closure of job sites or
cancellation of jobs;
•disruptions to our customers' supply chains or purchasing; and
•limitations on the ability of our customers to pay us on a timely basis.

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Although the effects of the COVID-19 Pandemic have impacted our financial
position and results of operations as noted above, we have preserved our
liquidity through the pandemic and maintained a strong balance sheet. In
addition, we continue to evaluate and pursue our strategic initiatives. For
example, we launched our e-commerce platform to certain customers during the
third quarter of 2020, which we believe will allow us to enhance our existing
sales channels, increase our product offerings and improve purchasing and
logistics. We currently expect to onboard all of our customers in the first half
of 2021. In spite of the challenging market conditions resulting from the
COVID-19 Pandemic, we continue to seek opportunities for organic growth and to
enhance our financial flexibility. We have taken proactive measures to
right-size our business, and we believe we are positioned to withstand further
changes to market and economic environments.

Additionally, all of our branches are open for business throughout the United
States and Canada as of the date of this filing. We have taken safety
precautions based on recommendations from federal, state and local authorities
as we continue to operate as part of an "Essential Critical Infrastructure
Sector" in many states, as defined by the United States Department of Homeland
Security. Certain states have re-implemented restrictions and guidelines due to
the recent escalation of local COVID-19 cases. While these restrictions do not
currently affect our ability to operate, they could affect projects where we
deliver our products. During the third quarter of 2020, our branches in several
states, including in Minnesota and Illinois, were impacted by social unrest.
While we continue to operate our branches, such social unrest may negatively
impact our business in the future.
We continue to safeguard our employees and customers and will continue to
actively monitor the disruption caused by the COVID-19 Pandemic. We may take
further actions that alter our business operations as may be required by
federal, state or local authorities or that we determine are in the best
interests of our employees, customers, suppliers and stockholders. From March
through the second quarter of 2020, we furloughed approximately 450 employees in
response to the COVID-19 Pandemic, but as of July 31, 2020, substantially all of
our employees had returned to work. In addition to these furloughs, we have
decreased our workforce by approximately 6% compared to the prior year period,
due to impacts of the COVID-19 Pandemic. We may take further actions in the
future as the situation develops. We restored temporary salary reductions for
all employees and compensation for independent board members during the second
quarter of 2020.

We entered the COVID-19 Pandemic with a strong balance sheet and have taken
steps to enhance our financial flexibility. In March 2020, in response to the
COVID-19 Pandemic, we drew $120.0 million from our 2018 Revolving Credit
Facility to provide financial flexibility and liquidity to respond to volatile
financial market conditions. We repaid the first quarter draw under our 2018
Revolving Credit Facility in June 2020 and reduced our net debt leverage ratio.
See "-Liquidity and Capital Resources-Summary" for additional information.
Additional steps we have taken to maintain cash flow include:

•delaying or reducing capital expenditures that are not anticipated to impact
near-term business;
•deferring or limiting non-essential operating expenses;
•optimizing all areas of working capital; and
•restricting hiring, deferring wage increases and reducing other
employer-related costs.

We do not anticipate any issues in servicing our debt and do not expect to need
additional borrowings for the remainder of 2020 other than for ordinary course
operations.

The Company qualifies for and has deferred certain corporate income tax payments
and employer payroll tax payments pursuant to certain provisions of the
Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act. We
deferred United States corporate income tax payments which would otherwise have
been paid during the three months ended March 31, 2020 to the three months ended
September 30, 2020. We also deferred employer payroll taxes, of which 50% must
be paid by December 2021 and the remaining 50% must be paid by December 2022
under the CARES Act.

We did not record any asset impairments, inventory charges or provision for
expected credit losses related to the COVID-19 Pandemic during the third quarter
of 2020, but future events may require such charges, which could have a material
adverse effect on our financial condition, results of operations, cash flows or
liquidity.

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Third Quarter Update

Financial Results



We reported net sales of $521.3 million for the three months ended September 30,
2020, a decrease of $43.6 million, or 7.7%, compared to the three months ended
September 30, 2019. Our gross margin for the three months ended September 30,
2020, was 29.6% compared to 30.4% for the three months ended September 30, 2019.
The decrease in net sales and gross margin was primarily due to COVID-19
Pandemic-related market disruptions.

2020 Acquisitions



We supplement our organic growth strategy with selective acquisitions. Since
January 2020 through the date of this filing, we have completed two
acquisitions, which resulted in the addition of three branches. See Note 7,
Acquisitions, to the condensed consolidated financial statements for additional
information on our acquisitions and growth strategy. In executing our
acquisition strategy and integrating acquired companies, we focus on the cost
savings we can achieve through combined procurement and pricing programs and
brand consolidation. These 2020 acquisitions contributed $5.0 million to net
sales for the three months ended September 30, 2020 and $13.8 million for the
nine months ended September 30, 2020.

                                               Effective Date of
            Acquisitions                          Acquisition                  Branch Locations                 # of Branches Acquired
Marriott Drywall Materials, Inc.               September 1, 2020                   Wisconsin                               1
Insulation Distributors, Inc.                  February 3, 2020                    Maryland                                2



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