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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, 2021
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period From _________ To ________
Commission File Number: 001-36307
Installed Building Products, Inc.
(Exact name of registrant as specified in its charter)
Delaware 45-3707650
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification No.)
495 South High Street, Suite 50
 
Columbus, Ohio
43215
(Address of principal executive offices) (Zip Code)
(614) 221-3399
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s) Name on each exchange on which registered
Common Stock,$0.01 par value per shareIBP The New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No
Indicate by a check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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
On October 27, 2021, the registrant had 29,707,155 shares of common stock, par value $0.01 per share, outstanding.



Table of Contents
TABLE OF CONTENTS

i

Table of Contents
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
INSTALLED BUILDING PRODUCTS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands, except share and per share amounts)

 September 30,December 31,
 20212020
ASSETS
Current assets
Cash and cash equivalents$191,435 $231,520 
Accounts receivable (less allowance for credit losses of $8,784 and $8,789 at September 30, 2021 and December 31, 2020, respectively)
306,590 266,566 
Inventories118,093 77,179 
Prepaid expenses and other current assets56,803 48,678 
Total current assets672,921 623,943 
Property and equipment, net104,977 104,022 
Operating lease right-of-use assets61,028 53,766 
Goodwill257,106 216,870 
Customer relationships, net133,759 108,504 
Other intangibles, net70,341 62,889 
Other non-current assets26,996 17,682 
Total assets$1,327,128 $1,187,676 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt$24,557 $23,355 
Current maturities of operating lease obligations21,278 18,758 
Current maturities of finance lease obligations1,780 2,073 
Accounts payable119,583 101,462 
Accrued compensation60,623 45,876 
Other current liabilities56,970 44,951 
Total current liabilities284,791 236,475 
Long-term debt542,517 541,957 
Operating lease obligations39,155 34,413 
Finance lease obligations3,038 2,430 
Deferred income taxes9,035 35 
Other long-term liabilities55,866 53,184 
Total liabilities934,402 868,494 
Commitments and contingencies (Note 15)
Stockholders’ equity
Preferred Stock; $0.01 par value: 5,000,000 authorized and 0 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively
  
Common stock; $0.01 par value: 100,000,000 authorized, 33,271,659 and 33,141,879 issued and 29,707,155 and 29,623,272 shares outstanding at September 30, 2021 and December 31, 2020, respectively
333 331 
Additional paid in capital208,535 199,847 
Retained earnings332,087 269,420 
Treasury stock; at cost: 3,564,504 and 3,518,607 shares at September 30, 2021 and December 31, 2020, respectively
(147,228)(141,653)
Accumulated other comprehensive loss(1,001)(8,763)
Total stockholders’ equity392,726 319,182 
Total liabilities and stockholders’ equity$1,327,128 $1,187,676 


1

See accompanying notes to consolidated financial statements

Table of Contents
INSTALLED BUILDING PRODUCTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED)
(in thousands, except share and per share amounts)

 Three months ended September 30,Nine months ended September 30,
 2021202020212020
Net revenue$509,763 $420,486 $1,434,927 $1,211,756 
Cost of sales353,879 288,839 1,001,730 836,710 
Gross profit155,884 131,647 433,197 375,046 
Operating expenses
Selling24,188 20,843 67,677 60,209 
Administrative68,056 58,240 199,607 177,495 
Amortization9,224 6,974 26,798 20,378 
Operating income54,416 45,590 139,115 116,964 
Other expense, net
Interest expense, net7,687 7,564 22,781 22,679 
Other (income) expense (483)176 (494)305 
Income before income taxes47,212 37,850 116,828 93,980 
Income tax provision12,320 9,773 27,432 24,578 
Net income$34,892 $28,077 $89,396 $69,402 
Other comprehensive income (loss), net of tax:
Net change on cash flow hedges, net of tax (provision) benefit of $(454) and $(408) for the three months ended September 30, 2021 and 2020, respectively, and $(2,638) and $1,582 for the nine months ended September 30, 2021 and 2020, respectively
1,292 1,176 7,762 (4,582)
Comprehensive income$36,184 $29,253 $97,158 $64,820 
Basic net income per share$1.19 $0.95 $3.05 $2.35 
Diluted net income per share$1.18 $0.95 $3.02 $2.33 
Weighted average shares outstanding:
Basic29,404,257 29,478,816 29,355,538 29,549,460 
Diluted29,620,748 29,698,028 29,615,162 29,737,716 
Cash dividends declared per share$0.30 $ $0.90 $ 


2

See accompanying notes to consolidated financial statements

Table of Contents
INSTALLED BUILDING PRODUCTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED) FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2020 AND SEPTEMBER 30, 2021
(in thousands, except share amounts)


Common StockAdditional
Paid In
Capital
Retained
Earnings
Treasury StockAccumulated
 Other
Comprehensive
Loss
Stockholders’
Equity
SharesAmountSharesAmount
BALANCE - July 1, 202033,124,237 $331 $195,288 $213,506 (3,325,049)$(123,488)$(12,901)$272,736 
Net income28,077 28,077 
Issuance of common stock awards to employees3,073  
Surrender of common stock awards(1,726) 
Share-based compensation expense2,094 2,094 
Share-based compensation issued to directors104 104 
Other comprehensive income, net of tax1,176 1,176 
BALANCE - September 30, 202033,127,310 $331 $197,486 $241,583 (3,326,775)$(123,488)$(11,725)$304,187 
Common StockAdditional
Paid In
Capital
Retained
Earnings
Treasury StockAccumulated Other
Comprehensive
Loss
Stockholders’
Equity
SharesAmountSharesAmount
BALANCE - July 1, 202133,264,517 $333 $205,597 $306,107 (3,562,942)$(147,204)$(2,293)$362,540 
Net income34,892 34,892 
Issuance of common stock awards to employees7,142  
Surrender of common stock awards(1,562)(24)(24)
Share-based compensation expense2,812 2,812 
Share-based compensation issued to directors126 126 
Dividends Declared ($0.30 per share)
(8,912)(8,912)
Other comprehensive income, net of tax1,292 1,292 
BALANCE - September 30, 202133,271,659 $333 $208,535 $332,087 (3,564,504)$(147,228)$(1,001)$392,726 









3

See accompanying notes to consolidated financial statements

Table of Contents

INSTALLED BUILDING PRODUCTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED) FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020 AND SEPTEMBER 30, 2021
(in thousands, except share amounts)

Common StockAdditional
Paid In
Capital
Retained
Earnings
Treasury StockAccumulated
 Other
Comprehensive
Loss
Stockholders’
Equity
SharesAmountSharesAmount
BALANCE - January 1, 202032,871,504 $329 $190,230 $173,371 (2,855,164)$(106,756)$(7,143)$250,031 
Net income69,402 69,402 
Cumulative effect of accounting changes, net of tax(1,190)(1,190)
Issuance of common stock awards to employees249,435 2 (2) 
Surrender of common stock awards(29,069)(973)(973)
Share-based compensation expense7,029 7,029 
Share-based compensation issued to directors6,371 229 229 
Common stock repurchase(442,542)(15,759)(15,759)
Other comprehensive loss, net of tax(4,582)(4,582)
BALANCE - September 30, 202033,127,310 $331 $197,486 $241,583 (3,326,775)$(123,488)$(11,725)$304,187 
Common StockAdditional
Paid In
Capital
Retained
Earnings
Treasury StockAccumulated Other
Comprehensive
Loss
Stockholders’
Equity
SharesAmountSharesAmount
BALANCE - January 1, 202133,141,879 $331 $199,847 $269,420 (3,518,607)$(141,653)$(8,763)$319,182 
Net income89,396 89,396 
Issuance of common stock awards to employees125,550 2 (2) 
Surrender of common stock awards(45,897)(5,575)(5,575)
Share-based compensation expense8,351 8,351 
Share-based compensation issued to directors4,230 339 339 
Dividends declared ($0.90 per share)
(26,729)(26,729)
Other comprehensive income, net of tax7,762 7,762 
BALANCE - September 30, 202133,271,659 $333 $208,535 $332,087 (3,564,504)$(147,228)$(1,001)$392,726 

4

See accompanying notes to consolidated financial statements

Table of Contents
INSTALLED BUILDING PRODUCTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands)
 Nine months ended September 30,
 20212020
Cash flows from operating activities
Net income$89,396 $69,402 
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization of property and equipment32,498 30,850 
Amortization of operating lease right-of-use assets16,464 13,281 
Amortization of intangibles26,798 20,378 
Amortization of deferred financing costs and debt discount993 1,000 
Provision for credit losses1,135 3,839 
Gain on sale of property and equipment(1,405)(592)
Noncash stock compensation10,228 8,050 
Deferred income taxes (3,405)
Amortization of terminated interest rate swap2,414 508 
Changes in assets and liabilities, excluding effects of acquisitions
Accounts receivable(23,224)(9,624)
Inventories(37,122)5,983 
Other assets(8,116)9,027 
Accounts payable14,120 (14,746)
Income taxes receivable/payable(107)14,192 
Other liabilities(7,594)(4,259)
Net cash provided by operating activities116,478 143,884 
Cash flows from investing activities
Purchases of investments (776)
Maturities of short term investments 37,473 
Purchases of property and equipment(27,898)(25,515)
Acquisitions of businesses, net of cash acquired of $1,640 and $0 in 2021 and 2020, respectively
(94,500)(38,825)
Proceeds from sale of property and equipment2,219 828 
Other(1,430)(2,662)
Net cash used in investing activities(121,609)(29,477)
Cash flows from financing activities
Proceeds from vehicle and equipment notes payable20,753 17,759 
Debt issuance costs (157)
Principal payments on long-term debt(19,688)(19,801)
Principal payments on finance lease obligations(1,573)(1,998)
Dividends paid(26,428) 
Acquisition-related obligations(2,442)(3,896)
Repurchase of common stock (15,759)
Surrender of common stock awards by employees(5,576)(973)
Net cash used in financing activities(34,954)(24,825)
Net change in cash and cash equivalents(40,085)89,582 
Cash and cash equivalents at beginning of period231,520 177,889 
Cash and cash equivalents at end of period$191,435 $267,471 
Supplemental disclosures of cash flow information
Net cash paid during the period for:
Interest$23,748 $24,130 
Income taxes, net of refunds27,428 13,798 
Supplemental disclosure of noncash activities
Right-of-use assets obtained in exchange for operating lease obligations23,543 18,340 
Release of indemnification of acquisition-related debt2,036  
Property and equipment obtained in exchange for finance lease obligations1,918 853 
Seller obligations in connection with acquisition of businesses18,987 6,965 
Unpaid purchases of property and equipment included in accounts payable1,327 1,229 


5

See accompanying notes to consolidated financial statements

Table of Contents
INSTALLED BUILDING PRODUCTS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1 - ORGANIZATION

Installed Building Products (“IBP”), a Delaware corporation formed on October 28, 2011, and its wholly-owned subsidiaries (collectively referred to as the “Company,” and “we,” “us” and “our”) primarily install insulation, waterproofing, fire-stopping, fireproofing, garage doors, rain gutters, window blinds, shower doors, closet shelving and mirrors and other products for residential and commercial builders located in the continental United States. The Company operates in more than 190 locations and its corporate office is located in Columbus, Ohio.

We have one operating segment and a single reportable segment. Substantially all of our sales are derived from the service-based installation of various products in the residential new construction, repair and remodel and commercial construction end markets from our national network of branch locations.

Each of our branches has the capacity to serve all of our end markets. See Note 3, Revenue Recognition, for information on our revenues by product and end market.

The COVID-19 pandemic ("COVID-19") has caused significant volatility, uncertainty and economic disruption. Many public health organizations and international, federal, state and local governments implemented measures to combat the spread of COVID-19 during portions of 2020 and 2021 with some of these restrictions still in place as of the date of filing of this Quarterly Report on Form 10-Q. Some of these measures include restrictions on movement such as quarantines, “stay-at-home” orders and social distancing ordinances and restricting or prohibiting outright some or all forms of commercial and business activity. We do not believe the various orders and restrictions significantly impacted our business in the first nine months of 2021. However, COVID-19 has caused disruptions in the building products supply chain, impacting our ability to purchase certain materials we install through typical channels. The extent to which COVID-19 will impact our future operations, customers, suppliers, employees and financial results is uncertain. The future impact on our financial results will depend on numerous factors including government actions and the resulting impact on construction activity, the effect on our customers’ demand for our services, the effects on our supply chain for materials, and the ability of our customers to pay for our services.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements include all of our wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated.

The information furnished in the Condensed Consolidated Financial Statements includes normal recurring adjustments and reflects all adjustments which are, in the opinion of management, necessary for a fair presentation of the results of operations and statements of financial position for the interim periods presented. Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (the “SEC”) have been omitted pursuant to such rules and regulations. We believe that the disclosures are adequate to prevent the information presented from being misleading when read in conjunction with our audited consolidated financial statements and the notes thereto included in Part II, Item 8, Financial Statements and Supplementary Data, of our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 (the “2020 Form 10-K”), as filed with the SEC on February 24, 2021. The December 31, 2020 Condensed Consolidated Balance Sheet data herein was derived from the audited consolidated financial statements but does not include all disclosures required by U.S. GAAP.

Our interim operating results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results to be expected in future operating quarters.

Note 2 to the audited consolidated financial statements in our 2020 Form 10-K describes the significant accounting policies and estimates used in preparation of the audited consolidated financial statements. Other than the recently implemented accounting policies described below, there have been no changes to our significant accounting policies during the three or nine months ended September 30, 2021.
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INSTALLED BUILDING PRODUCTS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Recently Adopted Accounting Pronouncements
Standard  Effective Date  Adoption
ASU 2021-01, Reference Rate Reform (Topic 848):Scope
  Effective upon issuance  
This pronouncement clarifies the scope and application of ASU 2020-04, "Reference Rate Reform: Facilitation of the Effects of Reference Rate Reform on Financial Reporting (Topic 848)." We continue to evaluate the impact of Topic 848 and may apply other elections as applicable as additional changes in the market occur.
ASU 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income TaxesJanuary 1, 2021This pronouncement simplifies the accounting for income taxes by removing certain exceptions to the general principles of Topic 740 and improves the consistent application of GAAP by clarifying and amending existing guidance. The adoption of this standard did not impact our financial statements or have a material effect on our disclosures.

NOTE 3 - REVENUE RECOGNITION

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

For contracts that are not complete at the reporting date, we recognize revenue over time utilizing a cost-to-cost input method as we believe this represents the best measure of when goods and services are transferred to the customer. When this method is used, we estimate the costs to complete individual contracts and record as revenue that portion of the total contract price that is considered complete based on the relationship of costs incurred to date to total anticipated costs. Under the cost-to-cost method, the use of estimated costs to complete each contract is a significant variable in the process of determining recognized revenue, requires judgment and can change throughout the duration of a contract due to contract modifications and other factors impacting job completion. The costs of earned revenue include all direct material and labor costs and those indirect costs related to contract performance, such as indirect labor, supplies, tools and repairs. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined.

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

Payment terms typically do not exceed 30 days for short-term contracts and typically do not exceed 60 days for long-term contracts with customers. All contracts are billed either contractually or as work is performed. Billing on our long-term contracts occurs primarily on a monthly basis throughout the contract period whereby we submit invoices for customer payment based on actual or estimated costs incurred during the billing period. On certain of our long-term contracts the customer may withhold payment on an invoice equal to a percentage of the invoice amount, which will be subsequently paid after satisfactory completion of each installation project. This amount is referred to as retainage and is common practice in the construction industry, as it allows for customers to ensure the quality of the service performed prior to full payment. Retainage receivables are classified as current or long-term assets based on the expected time to project completion.


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

Three months ended September 30,Nine months ended September 30,
2021202020212020
Residential new construction$386,346 76 %$315,434 75 %$1,091,414 76 %$912,095 75 %
Repair and remodel34,506 7 %28,625 7 %94,142 7 %75,702 6 %
Commercial88,911 17 %76,427 18 %249,371 17 %223,959 19 %
Net revenue$509,763 100 %$420,486 100 %$1,434,927 100 %$1,211,756 100 %

 Three months ended September 30,Nine months ended September 30,
 2021202020212020
Insulation$324,360 64 %$268,292 64 %$921,181 64 %$779,045 64 %
Waterproofing34,514 7 %33,272 8 %98,727 7 %89,855 7 %
Shower doors, shelving and mirrors35,411 7 %29,282 7 %101,830 7 %85,199 7 %
Garage doors26,951 5 %24,001 6 %77,434 5 %68,655 6 %
Rain gutters21,807 4 %17,295 4 %62,270 4 %41,942 4 %
Fireproofing/firestopping(1)
17,684 3 %11,047 2 %43,156 3 %36,325 3 %
Window blinds13,197 3 %12,166 3 %37,398 3 %34,651 3 %
Other building products35,839 7 %25,131 6 %92,931 7 %76,084 6 %
Net revenue$509,763 100 %$420,486 100 %$1,434,927 100 %$1,211,756 100 %

(1)Combined with "Other building products" in previous years.

Contract Assets and Liabilities

Our contract assets consist of unbilled amounts typically resulting from sales under contracts when the cost-to-cost method of revenue recognition is utilized and revenue recognized, based on costs incurred, exceeds the amount billed to the customer. Our contract assets are recorded in other current assets in our Condensed Consolidated Balance Sheets. Our contract liabilities consist of customer deposits and billings in excess of revenue recognized, based on costs incurred and are included in other current liabilities in our Condensed Consolidated Balance Sheets.

Contract assets and liabilities related to our uncompleted contracts and customer deposits were as follows (in thousands):
 September 30, 2021December 31, 2020
Contract assets$32,265 $24,334 
Contract liabilities(10,611)(8,965)

Uncompleted contracts were as follows (in thousands):
 September 30, 2021December 31, 2020
Costs incurred on uncompleted contracts$216,929 $169,544 
Estimated earnings112,854 90,737 
Total329,783 260,281 
Less: Billings to date301,626 240,665 
Net under billings$28,157 $19,616 


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INSTALLED BUILDING PRODUCTS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Net under billings were as follows (in thousands):
 September 30, 2021December 31, 2020
Costs and estimated earnings in excess of billings on uncompleted contracts (contract assets)$32,265 $24,334 
Billings in excess of costs and estimated earnings on uncompleted contracts (contract liabilities)(4,108)(4,718)
Net under billings$28,157 $19,616 

The difference between contract assets and contract liabilities as of September 30, 2021 compared to December 31, 2020 is primarily the result of timing differences between our performance of obligations under contracts and customer payments. During the three and nine months ended September 30, 2021, we recognized $0.1 million and $8.6 million of revenue that was included in the contract liability balance at December 31, 2020. We did not recognize any impairment losses on our receivables and contract assets during the three and nine months ended September 30, 2021 or 2020.

Remaining performance obligations represent the transaction price of contracts for which work has not been performed and excludes unexercised contract options and potential modifications. As of September 30, 2021, the aggregate amount of the transaction price allocated to remaining uncompleted contracts was $94.9 million. We expect to satisfy remaining performance obligations and recognize revenue on substantially all of these uncompleted contracts over the next 18 months.

Practical Expedients and Exemptions

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

We do not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less.
NOTE 4 - CREDIT LOSSES

Our expected loss allowance methodology for accounts receivable is developed using historical losses, current economic conditions and future market forecasts. We also perform ongoing evaluations of our existing and potential customer’s creditworthiness. To date, the COVID-19 pandemic has not had a material impact on the collectability of our existing trade receivables.

Changes in our allowance for credit losses were as follows (in thousands):

Balance as of January 1, 2021$8,789 
Current period provision1,135 
Recoveries collected and additions506 
Amounts written off(1,646)
Balance as of September 30, 2021$8,784 

NOTE 5 - CASH AND CASH EQUIVALENTS

Cash and cash equivalents include highly liquid instruments with insignificant interest rate risk and original or remaining maturities of three months or less at the time of purchase. These instruments were $166.5 million and $170.4 million as of September 30, 2021 and December 31, 2020, respectively. See Note 9, Fair Value Measurements, for additional information.

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INSTALLED BUILDING PRODUCTS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 6 - GOODWILL AND INTANGIBLES
We anticipate that the COVID-19 pandemic could continue to have an impact on the homebuilding industry in general, as it could result in further business interruptions (government-mandated or otherwise) and could affect, among other factors, employment levels, consumer spending and consumer confidence, which could decrease demand for homes, adversely affecting our business. As such, we considered whether impairment indicators arose through the date of filing of this Quarterly Report on Form 10-Q for our goodwill, long-lived assets and other intangible assets and concluded that no such factors existed to cause us to test for goodwill impairment during the nine months ended September 30, 2021. While we ultimately concluded that our goodwill, long-lived assets and other intangibles assets were not impaired as of September 30, 2021, we will continue to assess impairment indicators related to the impact of the COVID-19 pandemic on our business.

Goodwill

The change in carrying amount of goodwill was as follows (in thousands):
 Goodwill
(Gross)
Accumulated
Impairment
Losses
Goodwill
(Net)
January 1, 2021$286,874 $(70,004)$216,870 
Business Combinations40,206 — 40,206 
Other30 — 30 
September 30, 2021$327,110 $(70,004)$257,106 

Other changes included in the above table primarily include minor adjustments for the purchase price allocation of certain acquisitions still under measurement. For additional information regarding changes to goodwill resulting from acquisitions, see Note 16, Business Combinations.

We test goodwill for impairment annually during the fourth quarter of our fiscal year or earlier if there is an impairment indicator. Accumulated impairment losses included within the above table were incurred over multiple periods, with the latest impairment charge being recorded during the year ended December 31, 2010.

Intangibles, net

The following table provides the gross carrying amount, accumulated amortization and net book value for each major class of intangibles (in thousands):
 As of September 30,As of December 31,
 20212020
 Gross
Carrying
Amount
Accumulated
Amortization
Net
Book
Value
Gross
Carrying
Amount
Accumulated
Amortization
Net
Book
Value
Amortized intangibles:      
Customer relationships$240,756 $106,997 $133,759 $197,641 $89,137 $108,504 
Covenants not-to-compete24,973 15,628 9,345 20,309 13,436 6,873 
Trademarks and tradenames89,804 31,164 58,640 79,657 27,245 52,412 
Backlog20,425 18,069 2,356 18,847 15,243 3,604 
 $375,958 $171,858 $204,100 $316,454 $145,061 $171,393 


10

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INSTALLED BUILDING PRODUCTS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
The gross carrying amount of intangibles increased approximately $59.5 million during the nine months ended September 30, 2021 primarily due to business combinations. For more information, see Note 16, Business Combinations. Remaining estimated aggregate annual amortization expense is as follows (amounts, in thousands, are for the fiscal year ended):

Remainder of 2021$9,509 
202234,971 
202330,650 
202427,136 
202521,731 
Thereafter80,103 

NOTE 7 - LONG-TERM DEBT

Long-term debt consisted of the following (in thousands):
 As of September 30,As of December 31,
 20212020
Senior Notes due 2028, net of unamortized debt issuance costs of $3,783 and $4,230, respectively
$296,217 $295,770 
Term Loan, net of unamortized debt issuance costs of $1,094 and $1,343, respectively
198,906 198,657 
Vehicle and equipment notes, maturing through September 2026; payable in various monthly installments, including interest rates ranging from 1.9% to 4.8%
68,759 67,493 
Various notes p