- Net sales increased 26.0%
- Gross margin expanded 250 basis points
- 9.1% operating margin, 9.5% on an adjusted basis, up 170 basis
points
- Adjusted EBITDA increased 62.0%, adjusted EBITDA margin up 260
basis points
- $1.09 net income per diluted share, $1.06 on an adjusted
basis
Raises 2019 Revenue and EBITDA
Outlook
TopBuild Corp. (NYSE:BLD), a
leading installer and distributor of insulation and building
material products today reported results for the first quarter
ended March 31, 2019.
Jerry Volas, Chief Executive Officer, stated, “The strength and
diversity of the TopBuild operating model produced another
outstanding quarter, in both sales and earnings. Our
residential business was solid and our commercial business
outperformed expectations. Our ongoing focus on operational
efficiency improvements and fixed cost leveraging drove strong
conversion of top line growth, both organic and through
acquisitions, to the bottom line.
“We are optimistic 2019 will be another strong
year for TopBuild.”
First Quarter Financial
Highlights(unless otherwise indicated, comparisons are to
the quarter ended March 31, 2018)
- Net Sales increased 26.0% to $619.3
million, primarily driven by acquisitions, price increases and
sales volume growth at TruTeam. Of the 26.0% revenue growth, same
branch sales contributed 7.1%.
- Gross margin increased 250 basis
points to 25.1%.
- Operating profit was $56.6 million,
compared to $33.9 million, a 67.0% increase. On an adjusted
basis, operating profit was $59.1 million, compared to $38.2
million, a 54.8% improvement.
- Operating margin was 9.1% compared
to 6.9%. Adjusted operating margin improved 170 basis points
to 9.5%.
- Net income was $38.0 million, or
$1.09 per diluted share, compared to net income of $26.4 million or
$0.74 per diluted share.
- Adjusted net income was $36.6
million, or $1.06 per diluted share, compared to $26.2 million, or
$0.73 per diluted share.
- Adjusted EBITDA was $74.5 million,
compared to $46.0 million, a 62.0% increase and adjusted EBITDA
margin improved 260 basis points to 12.0%. Incremental
adjusted EBITDA margin was 22.3%.
- On a same branch basis, adjusted
EBITDA was $57.2 million, a 24.3% increase, and incremental
adjusted EBITDA margin was 32.2%.
- Acquisitions contributed $93.2
million of revenue. Incremental adjusted EBITDA related to
these acquisitions was 18.6%.
- At March 31, 2019, the Company had
cash and cash equivalents of $98.3 million and availability under
the revolving credit facility of $182.7 million for total liquidity
of $281.0 million.
Operating Segment Highlights ($
in 000s)(comparisons are to the period ended March 31, 2018)
|
|
|
|
|
|
|
TruTeam |
3 MonthsEnded3/31/19 |
|
Service Partners |
3 MonthsEnded3/31/19 |
Sales |
$449,383 |
|
|
Sales |
$204,464 |
|
Change |
|
|
Change |
|
Price |
6.1 |
% |
|
Price |
6.8 |
% |
Volume |
4.4 |
% |
|
Volume |
-2.4 |
% |
M&A |
26.0 |
% |
|
M&A |
4.5 |
% |
Total Change |
36.4 |
% |
|
Total Change |
8.9 |
% |
Operating Margin |
11.4 |
% |
|
Operating Margin |
10.1 |
% |
Change |
250 |
bps |
|
Change |
60 |
bps |
Adj. Operating Margin |
11.5 |
% |
|
Adj. Operating Margin |
10.1 |
% |
Change |
250 |
bps |
|
Change |
60 |
bps |
|
|
|
|
|
|
|
Capital AllocationVolas stated,
“Since 2016, we have acquired ten companies generating over $500
million of annual revenue and they are performing above our
expectations. Identifying, executing and integrating
acquisitions has become a core competency for TopBuild.
Acquisitions remain our number one capital allocation priority and
we have a robust pipeline of prospects we are currently
evaluating. In addition, we have a $200 million share
repurchase authorization in place.”
Share RepurchasesThe Company
completed the $50 million accelerated share repurchase program
announced on November 6, 2018. Under the terms of the
program, the Company repurchased a total of 973,252 shares of the
Company’s common stock at an average price of $51.37 per
share. In addition, in the first quarter the Company
repurchased an additional 72,791 shares at an average price of
$63.49 per share. These shares were purchased as part of the
Company’s $200 million share repurchase program announced on
February 26, 2019. As of March 31, 2019, approximately $195.4
million of the $200 million authorization remained.
2019 Revenue and Adjusted EBITDA
OutlookThe Company has raised the low end of revenue and
adjusted EBITDA guidance by $40 million and $20 million,
respectively, and the high end of revenue and adjusted EBITDA
guidance by $35 million and $20 million, respectively.
|
2019 |
Low |
High |
Revenue |
$2,610M |
$2,670M |
Adjusted EBITDA* |
$330M |
$350M |
|
*See table below for adjusted EBITDA reconciliation
Assumptions ($ in millions)
|
2019 |
Low |
High |
Housing Starts |
1,260K |
1,300K |
Adjusted net
income |
$ |
160.1 |
$ |
183.0 |
Interest Expense and other, net |
$ |
38.9 |
$ |
35.9 |
Income tax expense |
$ |
57.7 |
$ |
66.0 |
Depreciation and Amortization |
$ |
54.0 |
$ |
50.0 |
Share based compensation |
$ |
14.6 |
$ |
12.1 |
|
|
|
|
|
This outlook reflects management’s current view
of present and future market conditions and is based on assumptions
such as housing starts, general and administrative expenses,
weighted average diluted shares outstanding and interest
rates. This outlook does not include any effects related to
potential acquisitions or divestitures that may occur after the
date of this press release. Factors that could cause actual
2019 results to differ materially from TopBuild’s current
expectations are discussed below and are also detailed in the
Company’s 2018 Annual Report on Form 10-K and subsequent SEC
reports.
2019 ENERGY STAR® Partner of the Year
Sustained Excellence Award ReceivedTopBuild Home Services
Group received the 2019 ENERGY STAR® Partner of the Year Sustained
Excellence Award for continued leadership and superior
contributions to ENERGY STAR. TopBuild’s accomplishment was
recognized by the U.S. Environmental Protection Agency and the U.S.
Department of Energy in Washington, D.C. on April 11, 2019.
The Company’s extensively trained Home Energy Raters provide the
evaluation, testing and independent verification required to be
considered an ENERGY STAR compliant home.
“We are honored to once again be recognized for
our leadership role in verifying ENERGY STAR compliant homes.
TopBuild Home Services has been an ENERGY STAR partner for 17
years, working closely with home builders and consumers to create
homes that are more comfortable and energy efficient,” added
Volas.
Additional InformationQuarterly
supplemental materials, including a presentation that will be
referenced on today’s conference call, are available on the
“Investors” section of the Company’s website at
www.topbuild.com.
Conference Call A conference
call to discuss first quarter 2019 financial results is scheduled
for today, Tuesday, May 7, 2019, at 9:00 a.m. Eastern Time.
The call may be accessed by dialing (888) 225-2706. The
conference call will be webcast simultaneously on the “Investors”
section of the Company’s website at www.topbuild.com.
About TopBuildTopBuild Corp.,
headquartered in Daytona Beach, Florida, is a leading installer and
distributor of insulation and building material products to the
U.S. construction industry. We provide insulation and building
material services nationwide through TruTeam®, which has over 200
branches, and through Service Partners® which distributes
insulation and building material products from over 75
branches. We leverage our national footprint to gain
economies of scale while capitalizing on our local market presence
to forge strong relationships with our customers. To learn
more about TopBuild please visit our website at
www.topbuild.com.
Use of Non-GAAP Financial
Measures EBITDA, incremental EBITDA margin, adjusted
EBITDA margin, the “adjusted” financial measures presented above,
and figures presented on a “same branch basis” are not calculated
in accordance with U.S. generally accepted accounting principles
(“GAAP”). The Company believes that these non-GAAP financial
measures, which are used in managing the business, may provide
users of this financial information with additional meaningful
comparisons between current results and results in prior
periods. We define same branch sales as sales from
branches in operation for at least 12 full calendar months.
Such non-GAAP financial measures are reconciled to their closest
GAAP financial measures in tables contained in this press
release. Non-GAAP financial measures should be viewed in
addition to, and not as an alternative for, the Company’s reported
results under GAAP. Additional information may be found in
the Company’s filings with the Securities and Exchange Commission
which are available on TopBuild’s website under “Investors” at
www.topbuild.com.
Safe Harbor StatementThis press
release contains “forward-looking statements” within the meaning of
the Private Securities Litigation Reform Act. These
forward-looking statements may address, among other things, our
expected financial and operational results and the related
assumptions underlying our expected results. These
forward-looking statements are distinguished by use of words such
as “will,” “would,” “anticipate,” “expect,” “believe,” “designed,”
“plan,” or “intend,” the negative of these terms, and similar
references to future periods. These views involve risks and
uncertainties that are difficult to predict and, accordingly, our
actual results may differ materially from the results discussed in
our forward-looking statements. Our forward-looking
statements contained herein speak only as of the date of this press
release. Factors or events that we cannot predict, including
those described in the risk factors contained in our filings with
the Securities and Exchange Commission, may cause our actual
results to differ from those expressed in forward-looking
statements. Although TopBuild believes the expectations
reflected in such forward-looking statements are based on
reasonable assumptions, the Company can give no assurance that its
expectations will be achieved and it undertakes no obligation to
update publicly any forward-looking statements as a result of new
information, future events, or otherwise, except as required by
applicable law.
Investor Relations and Media
ContactTabitha Zanetabitha.zane@topbuild.com
386-763-8801
(tables follow)
|
|
|
|
|
|
TopBuild
Corp. |
|
|
|
|
|
Condensed Consolidated Statements of Operations
(Unaudited) |
|
|
|
(in
thousands, except share and per common share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March
31, |
|
|
2019 |
|
2018 |
|
Net sales |
$ |
619,330 |
|
|
$ |
491,444 |
|
|
Cost of sales |
|
463,635 |
|
|
|
380,426 |
|
|
Gross profit |
|
155,695 |
|
|
|
111,018 |
|
|
|
|
|
|
|
|
Selling, general, and
administrative expense |
|
99,077 |
|
|
|
77,125 |
|
|
Operating profit |
|
56,618 |
|
|
|
33,893 |
|
|
|
|
|
|
|
|
Other income (expense),
net: |
|
|
|
|
|
Interest expense |
|
(9,602 |
) |
|
|
(2,324 |
) |
|
Other, net |
|
333 |
|
|
|
34 |
|
|
Other expense, net |
|
(9,269 |
) |
|
|
(2,290 |
) |
|
Income before income
taxes |
|
47,349 |
|
|
|
31,603 |
|
|
|
|
|
|
|
|
Income tax expense |
|
(9,366 |
) |
|
|
(5,215 |
) |
|
Net income |
$ |
37,983 |
|
|
$ |
26,388 |
|
|
|
|
|
|
|
|
|
|
Net income per
common share: |
|
|
|
|
|
Basic |
$ |
1.11 |
|
|
$ |
0.75 |
|
|
Diluted |
$ |
1.09 |
|
|
$ |
0.74 |
|
|
|
|
|
|
|
|
Weighted
average shares outstanding: |
|
|
|
|
|
Basic |
|
34,169,315 |
|
|
|
35,059,920 |
|
|
Diluted |
|
34,703,289 |
|
|
|
35,819,242 |
|
|
|
|
|
|
|
|
|
|
|
|
TopBuild
Corp. |
|
|
|
|
|
|
|
|
Condensed
Consolidated Balance Sheets and Other Financial Data
(Unaudited) |
|
|
|
|
|
|
|
|
(dollars in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
As of |
|
|
March 31, |
|
December 31, |
|
|
2019 |
|
2018 |
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and
cash equivalents |
$ |
98,278 |
|
|
$ |
100,929 |
|
|
Receivables, net of an allowance for doubtful accounts of $4,753
and $3,676 at March 31, 2019, and December 31, 2018,
respectively |
|
428,713 |
|
|
|
407,106 |
|
|
Inventories, net |
|
160,689 |
|
|
|
168,977 |
|
|
Prepaid
expenses and other current assets |
|
16,494 |
|
|
|
27,685 |
|
|
Total
current assets |
|
704,174 |
|
|
|
704,697 |
|
|
|
|
|
|
|
|
|
|
|
Right
of use assets |
|
94,222 |
|
|
|
— |
|
|
Property and equipment, net |
|
169,891 |
|
|
|
167,961 |
|
|
Goodwill |
|
1,363,292 |
|
|
|
1,364,016 |
|
|
Other
intangible assets, net |
|
194,214 |
|
|
|
199,387 |
|
|
Deferred tax assets, net |
|
11,875 |
|
|
|
13,176 |
|
|
Other
assets |
|
5,159 |
|
|
|
5,294 |
|
|
Total
assets |
$ |
2,542,827 |
|
|
$ |
2,454,531 |
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
Accounts
payable |
$ |
281,346 |
|
|
$ |
313,172 |
|
|
Current
portion of long-term debt |
|
29,091 |
|
|
|
26,852 |
|
|
Accrued
liabilities |
|
103,412 |
|
|
|
104,236 |
|
|
Short-term lease liabilities |
|
37,501 |
|
|
|
— |
|
|
Total
current liabilities |
|
451,350 |
|
|
|
444,260 |
|
|
|
|
|
|
|
|
|
|
|
Long-term debt |
|
709,172 |
|
|
|
716,622 |
|
|
Deferred tax
liabilities, net |
|
174,227 |
|
|
|
176,212 |
|
|
Long-term portion of
insurance reserves |
|
43,935 |
|
|
|
43,434 |
|
|
Long-term lease
liabilities |
|
59,750 |
|
|
|
— |
|
|
Other liabilities |
|
1,540 |
|
|
|
1,905 |
|
|
Total
liabilities |
|
1,439,974 |
|
|
|
1,382,433 |
|
|
|
|
|
|
|
|
|
|
|
EQUITY |
|
1,102,853 |
|
|
|
1,072,098 |
|
|
Total
liabilities and equity |
$ |
2,542,827 |
|
|
$ |
2,454,531 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of |
|
|
March 31, |
|
March 31, |
|
|
2019 |
|
2018 |
|
Other Financial
Data |
|
|
|
|
|
|
|
|
Receivable days † |
|
53 |
|
|
|
49 |
|
|
Inventory
days † |
|
31 |
|
|
|
34 |
|
|
Accounts
payable days † |
|
80 |
|
|
|
80 |
|
|
Receivables, net plus inventories, net less accounts payable † |
$ |
308,056 |
|
|
$ |
197,631 |
|
|
Receivables, net plus inventories, net less accounts payable as a
percent of sales (TTM)‡ |
|
12.1 |
|
% |
|
10.0 |
|
% |
|
|
|
|
|
|
|
|
|
† Adjusted for
remaining acquisition day one balance sheet items. |
|
|
|
|
|
|
|
|
‡ Trailing 12 months
sales have been adjusted for the pro forma effect of acquired
branches. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TopBuild
Corp. |
|
|
|
|
|
Condensed
Consolidated Statements of Cash Flows (Unaudited) |
|
|
|
|
|
(dollars in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
2019 |
|
2018 |
|
Cash Flows
Provided by (Used in) Operating Activities: |
|
|
|
|
|
|
|
Net income |
$ |
37,983 |
|
|
$ |
26,388 |
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities: |
|
|
|
|
|
Depreciation and amortization |
|
12,475 |
|
|
|
5,442 |
|
|
Share-based compensation |
|
2,972 |
|
|
|
2,402 |
|
|
Loss on
sale or abandonment of property and equipment |
|
487 |
|
|
|
200 |
|
|
Amortization of debt issuance costs |
|
390 |
|
|
|
107 |
|
|
Change in
fair value of contingent consideration |
|
44 |
|
|
|
70 |
|
|
Provision
for bad debt expense |
|
1,676 |
|
|
|
760 |
|
|
Loss from
inventory obsolescence |
|
1,109 |
|
|
|
468 |
|
|
Deferred
income taxes, net |
|
95 |
|
|
|
— |
|
|
Change in
certain assets and liabilities |
|
|
|
|
|
Receivables, net |
|
(23,341 |
) |
|
|
(1,092 |
) |
|
Inventories, net |
|
7,125 |
|
|
|
(5,143 |
) |
|
Prepaid
expenses and other current assets |
|
11,192 |
|
|
|
3,912 |
|
|
Accounts
payable |
|
(31,407 |
) |
|
|
(11,429 |
) |
|
Accrued
liabilities |
|
2,100 |
|
|
|
(3,923 |
) |
|
Other,
net |
|
622 |
|
|
|
(597 |
) |
|
Net cash
provided by operating activities |
|
23,522 |
|
|
|
17,565 |
|
|
|
|
|
|
|
|
|
|
Cash Flows
Provided by (Used in) Investing Activities: |
|
|
|
|
|
Purchases
of property and equipment |
|
(10,213 |
) |
|
|
(11,266 |
) |
|
Acquisition of businesses, net of cash acquired of $239 in
2018 |
|
— |
|
|
|
(26,956 |
) |
|
Proceeds
from sale of property and equipment |
|
75 |
|
|
|
70 |
|
|
Other,
net |
|
16 |
|
|
|
13 |
|
|
Net cash
used in investing activities |
|
(10,122 |
) |
|
|
(38,139 |
) |
|
|
|
|
|
|
|
|
|
Cash Flows
Provided by (Used in) Financing Activities: |
|
|
|
|
|
Proceeds
from issuance of long-term debt |
|
— |
|
|
|
10,066 |
|
|
Repayment
of long-term debt |
|
(5,601 |
) |
|
|
(3,125 |
) |
|
Payment
of debt issuance costs |
|
— |
|
|
|
(1,040 |
) |
|
Proceeds
from revolving credit facility |
|
— |
|
|
|
55,000 |
|
|
Repayment
of revolving credit facility |
|
— |
|
|
|
(55,000 |
) |
|
Taxes
withheld and paid on employees' equity awards |
|
(5,578 |
) |
|
|
(4,514 |
) |
|
Repurchase of shares of common stock |
|
(4,622 |
) |
|
|
— |
|
|
Payment
of contingent consideration |
|
(250 |
) |
|
|
— |
|
|
Net cash
(used in) provided by financing activities |
|
(16,051 |
) |
|
|
1,387 |
|
|
|
|
|
|
|
|
|
|
Cash and Cash
Equivalents |
|
|
|
|
|
Decrease
for the period |
|
(2,651 |
) |
|
|
(19,187 |
) |
|
Beginning
of period |
|
100,929 |
|
|
|
56,521 |
|
|
End of
period |
$ |
98,278 |
|
|
$ |
37,334 |
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosure of noncash activities: |
|
|
|
|
|
Leased
assets obtained in exchange for new operating lease
liabilities |
$ |
105,249 |
|
|
$ |
— |
|
|
Accruals
for property and equipment |
|
441 |
|
|
1,116 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TopBuild
Corp. |
|
|
|
|
|
|
|
|
|
|
Segment Data
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
(dollars in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31, |
|
|
|
|
|
|
2019 |
|
2018 |
|
Change |
|
Installation |
|
|
|
|
|
|
|
|
|
|
Sales |
$ |
449,383 |
|
|
$ |
329,394 |
|
|
|
36.4 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
Operating
profit, as reported |
$ |
51,299 |
|
|
$ |
29,330 |
|
|
|
|
|
|
Operating
margin, as reported |
|
11.4 |
|
% |
|
8.9 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rationalization charges |
|
118 |
|
|
|
217 |
|
|
|
|
|
|
Acquisition related costs |
|
125 |
|
|
|
— |
|
|
|
|
|
|
Operating
profit, as adjusted |
$ |
51,542 |
|
|
$ |
29,547 |
|
|
|
|
|
|
Operating
margin, as adjusted |
|
11.5 |
|
% |
|
9.0 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distribution |
|
|
|
|
|
|
|
|
|
|
Sales |
$ |
204,464 |
|
|
$ |
187,766 |
|
|
|
8.9 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
Operating
profit, as reported |
$ |
20,597 |
|
|
$ |
17,902 |
|
|
|
|
|
|
Operating
margin, as reported |
|
10.1 |
|
% |
|
9.5 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rationalization charges |
|
109 |
|
|
|
25 |
|
|
|
|
|
|
Operating
profit, as adjusted |
$ |
20,706 |
|
|
$ |
17,927 |
|
|
|
|
|
|
Operating
margin, as adjusted |
|
10.1 |
|
% |
|
9.5 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
|
|
Sales
before eliminations |
$ |
653,847 |
|
|
$ |
517,160 |
|
|
|
|
|
|
Intercompany eliminations |
|
(34,517 |
) |
|
|
(25,716 |
) |
|
|
|
|
|
Net sales
after eliminations |
$ |
619,330 |
|
|
$ |
491,444 |
|
|
|
26.0 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
Operating
profit, as reported - segment |
$ |
71,896 |
|
|
$ |
47,232 |
|
|
|
|
|
|
General
corporate expense, net |
|
(9,604 |
) |
|
|
(8,893 |
) |
|
|
|
|
|
Intercompany eliminations and other adjustments |
|
(5,674 |
) |
|
|
(4,446 |
) |
|
|
|
|
|
Operating
profit, as reported |
$ |
56,618 |
|
|
$ |
33,893 |
|
|
|
|
|
|
Operating
margin, as reported |
|
9.1 |
|
% |
|
6.9 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rationalization charges † |
|
1,827 |
|
|
|
797 |
|
|
|
|
|
|
Acquisition related costs |
|
652 |
|
|
|
3,482 |
|
|
|
|
|
|
Operating
profit, as adjusted |
$ |
59,097 |
|
|
$ |
38,172 |
|
|
|
|
|
|
Operating
margin, as adjusted |
|
9.5 |
|
% |
|
7.8 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation |
|
2,972 |
|
|
|
2,402 |
|
|
|
|
|
|
Depreciation and amortization |
|
12,475 |
|
|
|
5,442 |
|
|
|
|
|
|
EBITDA,
as adjusted |
$ |
74,544 |
|
|
$ |
46,016 |
|
|
|
|
|
|
EBITDA
margin, as adjusted |
|
12.0 |
|
% |
|
9.4 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
change period over period |
|
127,886 |
|
|
|
|
|
|
|
|
|
EBITDA,
as adjusted, change period over period |
|
28,528 |
|
|
|
|
|
|
|
|
|
EBITDA,
as adjusted, as percentage of sales change |
|
22.3 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
†
Rationalization charges include corporate level adjustments as well
as segment operating adjustments. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TopBuild
Corp. |
|
|
|
|
|
|
Non-GAAP
Reconciliations (Unaudited) |
|
|
|
|
|
|
(in
thousands, except share and per common share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31, |
|
|
2019 |
|
2018 |
|
Gross Profit
and Operating Profit Reconciliations |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales |
$ |
619,330 |
|
|
$ |
491,444 |
|
|
|
|
|
|
|
|
|
Gross profit,
as reported |
$ |
155,695 |
|
|
$ |
111,018 |
|
|
|
|
|
|
|
|
|
Gross profit,
as adjusted |
$ |
155,695 |
|
|
$ |
111,018 |
|
|
|
|
|
|
|
|
|
Gross margin, as
reported |
|
25.1 |
|
% |
|
22.6 |
|
% |
Gross margin, as
adjusted |
|
25.1 |
|
% |
|
22.6 |
|
% |
|
|
|
|
|
|
|
Operating
profit, as reported |
$ |
56,618 |
|
|
$ |
33,893 |
|
|
|
|
|
|
|
|
|
Rationalization
charges |
|
1,827 |
|
|
|
797 |
|
|
Acquisition related
costs |
|
652 |
|
|
|
3,482 |
|
|
Operating
profit, as adjusted |
$ |
59,097 |
|
|
$ |
38,172 |
|
|
|
|
|
|
|
|
|
Operating margin, as
reported |
|
9.1 |
|
% |
|
6.9 |
|
% |
Operating margin, as
adjusted |
|
9.5 |
|
% |
|
7.8 |
|
% |
|
|
|
|
|
|
|
Income Per
Common Share Reconciliation |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before
income taxes, as reported |
$ |
47,349 |
|
|
$ |
31,603 |
|
|
|
|
|
|
|
|
|
Rationalization
charges |
|
1,827 |
|
|
|
797 |
|
|
Acquisition related
costs |
|
652 |
|
|
|
3,482 |
|
|
Income before
income taxes, as adjusted |
|
49,828 |
|
|
|
35,882 |
|
|
|
|
|
|
|
|
|
Tax rate at 26.5% and
27.0% for 2019 and 2018, respectively |
|
(13,204 |
) |
|
|
(9,688 |
) |
|
Income, as
adjusted |
$ |
36,624 |
|
|
$ |
26,194 |
|
|
|
|
|
|
|
|
|
Income per
common share, as adjusted |
$ |
1.06 |
|
|
$ |
0.73 |
|
|
|
|
|
|
|
|
|
Weighted average
diluted common shares outstanding |
|
34,703,289 |
|
|
|
35,819,242 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TopBuild
Corp. |
|
|
|
|
|
|
Same Branch and Acquisition Net
Sales and Adjusted EBITDA
(Unaudited) |
|
|
|
|
|
|
(dollars in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March
31, |
|
|
2019 |
|
2018 |
|
Net
sales |
|
|
|
|
|
|
Same branch: |
|
|
|
|
|
|
Installation
segment |
$ |
363,898 |
|
|
$ |
329,394 |
|
|
Distribution segment |
|
196,076 |
|
|
|
187,766 |
|
|
Eliminations |
|
(33,817 |
) |
|
|
(25,716 |
) |
|
Total same branch |
|
526,157 |
|
|
|
491,444 |
|
|
|
|
|
|
|
|
|
Acquisitions (a): |
|
|
|
|
|
|
Installation segment |
$ |
85,485 |
|
|
$ |
— |
|
|
Distribution segment |
|
8,388 |
|
|
|
— |
|
|
Eliminations |
|
(700 |
) |
|
|
— |
|
|
Total acquisitions |
|
93,173 |
|
|
|
— |
|
|
Total |
$ |
619,330 |
|
|
$ |
491,444 |
|
|
|
|
|
|
|
|
|
EBITDA, as
adjusted |
|
|
|
|
|
|
Same branch |
$ |
57,202 |
|
|
$ |
46,016 |
|
|
Acquisitions (a) |
|
17,342 |
|
|
|
— |
|
|
Total |
$ |
74,544 |
|
|
$ |
46,016 |
|
|
|
|
|
|
|
|
|
EBITDA, as
adjusted, as a percentage of sales |
|
|
|
|
|
|
Same branch (b) |
|
10.9 |
|
% |
|
|
|
Acquisitions (c) |
|
18.6 |
|
% |
|
|
|
Total (d) |
|
12.0 |
|
% |
|
9.4 |
|
% |
|
|
|
|
|
|
|
As Adjusted
Incremental EBITDA, as a percentage of incremental
sales |
|
|
|
|
|
|
Same branch (e) |
|
32.2 |
|
% |
|
|
|
Acquisitions (c) |
|
18.6 |
|
% |
|
|
|
Total (f) |
|
22.3 |
|
% |
|
|
|
____________________________________ |
|
|
|
|
|
|
(a) Represents current
year impact of acquisitions in their first twelve months |
|
|
|
|
|
|
(b) Same branch EBITDA,
as adjusted, as a percentage of same branch sales |
|
|
|
|
|
|
(c) Acquired EBITDA, as
adjusted, as a percentage of acquired sales |
|
|
|
|
|
|
(d) Total EBITDA, as
adjusted, as a percentage of total sales |
|
|
|
|
|
|
(e) Change in same
branch EBITDA, as adjusted, as a percentage of change in same
branch sales |
|
|
|
|
|
|
(f) Change in total
EBITDA, as adjusted, as a percentage of change in total sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TopBuild
Corp. |
|
|
|
|
|
|
|
|
Reconciliation of Adjusted EBITDA to Net Income
(Unaudited) |
|
|
|
|
|
(dollars in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31, |
|
|
2019 |
|
2018 |
|
Net income, as
reported |
$ |
37,983 |
|
|
$ |
26,388 |
|
|
Adjustments to arrive
at EBITDA, as adjusted: |
|
|
|
|
|
|
|
|
Interest
expense and other, net |
|
9,269 |
|
|
|
2,290 |
|
|
Income
tax expense |
|
9,366 |
|
|
|
5,215 |
|
|
Depreciation and amortization |
|
12,475 |
|
|
|
5,442 |
|
|
Share-based compensation |
|
2,972 |
|
|
|
2,402 |
|
|
Rationalization charges |
|
1,827 |
|
|
|
797 |
|
|
Acquisition related costs |
|
652 |
|
|
|
3,482 |
|
|
EBITDA, as
adjusted |
$ |
74,544 |
|
|
$ |
46,016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TopBuild
Corp. |
|
|
|
|
|
|
|
|
2019 Estimated Adjusted EBITDA Range
(Unaudited) |
|
|
|
|
|
|
|
(dollars in
millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ending December 31,
2019 |
|
|
Low |
|
High |
|
Estimated net
income |
$ |
160.1 |
|
|
$ |
183.0 |
|
|
Adjustments to arrive
at estimated EBITDA, as adjusted: |
|
|
|
|
|
|
|
|
Interest
expense and other, net |
|
38.9 |
|
|
|
35.9 |
|
|
Income
tax expense |
|
57.7 |
|
|
|
66.0 |
|
|
Depreciation and amortization |
|
54.0 |
|
|
|
50.0 |
|
|
Share-based compensation |
|
14.6 |
|
|
|
12.1 |
|
|
Rationalization charges |
|
4.0 |
|
|
|
2.0 |
|
|
Acquisition related costs |
|
0.7 |
|
|
|
1.0 |
|
|
Estimated
EBITDA, as adjusted |
$ |
330.0 |
|
|
$ |
350.0 |
|
|
|
|
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