DAYTONA BEACH, Fla., Nov. 07, 2017 (GLOBE NEWSWIRE) -- TopBuild Corp. (NYSE:BLD), the leading
purchaser, installer and distributor of insulation products to the United States construction industry, today reported results for
the second quarter ended June 30, 2017.
Jerry Volas, Chief Executive Officer, stated, “We continue to demonstrate the efficiency of our operating model through
margin expansion and bottom line growth. While there was some negative impact to our top line from weather related issues in
the third quarter, this should be recovered in a future period.
“Looking ahead we see continued strength in both the residential and commercial markets. Our national scale should
remain a strong competitive advantage for us as both capacity and labor continue to tighten.”
Third Quarter Financial Highlights
(unless otherwise indicated, comparisons are to the quarter ended September 30, 2016)
- Net sales increased 7.9% to $489.0 million, primarily driven by sales volume growth and price increases in both operating
segments as well as through acquisitions. On a same branch basis, revenue increased 2.7% to $464.6 million.
- Gross margin expanded 80 basis points to 24.7%.
- Operating profit was $49.6 million, compared to $39.1 million. On an adjusted basis, operating profit was $50.3
million, compared to $39.6 million, a 27.0% improvement.
- Operating margin was 10.1%, up 150 basis points. Adjusted operating margin improved 160 basis points to 10.3%.
- Income from continuing operations was $31.4 million, or $0.88 per diluted share, compared to $24.6 million, or $0.65 per
diluted share. Adjusted income from continuing operations was $29.7 million, or $0.83 per diluted share, compared to $23.8
million, or $0.63 per diluted share.
- Adjusted EBITDA was $57.6 million, compared to $44.6 million, a 28.9% increase. Incremental EBITDA margin was 36.0%. On
a same branch basis, adjusted EBITDA was $53.7 million, a 20.3% increase, and incremental EBITDA margin was 74.2%.
Nine Month Financial Highlights
(unless otherwise indicated, comparisons are to nine months ended September 30, 2016)
- Net sales increased 8.2% to $1,404.9 million. On a same branch basis, revenue increased 4.2% to $1,352.0 million.
- Gross margin expanded 140 basis points to 24.1%.
- Operating profit was $86.9 million, compared to operating profit of $85.7 million. On an adjusted basis, operating
profit was $121.0 million, compared to $87.8 million, a 37.9% improvement.
- Operating margin was 6.2%, down 40 basis points. Adjusted operating margin improved 180 basis points to 8.6%.
- Income from continuing operations was $53.1 million, or $1.44 per diluted share, compared to $51.3 million, or $1.35 per
diluted share. Adjusted income from continuing operations was $71.6 million, or $1.94 per diluted share, compared to $51.9
million, or $1.37 per diluted share.
- Adjusted EBITDA was $139.7 million, compared to $102.5 million, a 36.3% increase. Incremental EBITDA margin was 35.0%.
On a same branch basis, adjusted EBITDA grew 29.6% to $132.7 million and incremental EBITDA margin was 56.1%.
Operating Segment Highlights ($ in 000s)
(comparisons are to the period ended September 30, 2016)
|
TruTeam |
3 Months Ended 9/30/17 |
9 Months Ended 9/30/17 |
|
Service Partners |
3 Months Ended 9/30/17 |
9 Months Ended 9/30/17 |
| Sales |
$333,238 |
$945,109 |
|
Sales |
$181,146 |
$526,452 |
| Change |
11.1% |
9.8% |
|
Change |
4.0% |
5.4% |
| Operating Margin |
12.3% |
7.1% |
|
Operating Margin |
10.1% |
9.7% |
| Change |
160 bps |
(90)
bps |
|
Change |
120 bps |
100
bps |
| Adj. Operating Margin |
12.3% |
10.3% |
|
Adj. Operating Margin |
10.1% |
9.7% |
| Change |
150 bps |
220
bps |
|
Change |
120 bps |
100
bps |
Capital Allocation
Acquisitions
Year-to-date, the Company has completed six acquisitions, four concentrating on residential insulation and two on
heavy commercial. Combined, these acquisitions are expected to generate approximately $83 million of incremental revenue on
an annual basis.
Volas stated, “Our plan is to utilize our excess free cash flow to expand our two business segments through strategic
acquisitions. We are very encouraged by our robust pipeline of prospects and are pleased with our successful track record of
integrating the seven firms we’ve acquired these past 18 months. Incremental EBITDA margin on these acquisitions has improved
from 5.7% in the first quarter of 2017 to 16.3% today.”
Share Repurchases
In conjunction with its previously announced accelerated share repurchase program, in the third quarter the Company made a payment
of $100.0 million to Bank of America Merrill Lynch, using $30 million of cash on hand and borrowing $70 million under its revolving
facility. In exchange, the Company received approximately 1.5 million shares with a value of approximately $80 million. The
remaining $20 million balance is expected to settle no later than the end of the first quarter of 2018. Since January 1,
2016, the Company has repurchased 3.0 million shares of its common stock.
2017 Revenue and Adjusted EBITDA Outlook
|
2017 |
Low |
High |
|
Revenue |
$1,890M |
$1,905M |
|
Adjusted EBITDA |
$190M |
$195M |
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 2017 results to differ materially from TopBuild’s current expectations are discussed
below and are also detailed in the Company’s 2016 Annual Report on Form 10-K and subsequent SEC reports.
Amendment to Corporate Governance Guidelines
The Company’s Board of Directors has amended its Corporate Governance Guidelines to adopt a majority voting policy whereby any
nominee for director who receives more “withheld” votes than “for” votes in an uncontested election must submit a written offer to
resign as director. Any such resignation will be reviewed by the Board’s Nominating and Corporate Governance Committee and, within
90 days after the election, the independent members of the Board will determine whether to accept, reject or take other appropriate
action with respect to, the resignation, in furtherance of the best interests of the Company and its shareholders. The Company’s
Corporate Governance Guidelines containing the Majority Voting Policy are available on the Company’s website, at www.topbuild.com on the Investor page under the Corporate Governance section.
Additional Information
Quarterly 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 third quarter 2017 financial results is scheduled for today, Tuesday, November 7, at 9:00 a.m. Eastern
Time. The call may be accessed by dialing (866) 460-4783. The conference call will be webcast simultaneously on the
“Investors” section of the Company’s website at www.topbuild.com. A replay will be available for one week beginning at 11:00
a.m. Eastern Time and may be accessed by dialing (800) 633-8284 and entering the passcode: 21847871.
About TopBuild
TopBuild Corp., headquartered in Daytona Beach, Florida, is the leading purchaser, installer and distributor of
insulation products to the U.S. construction industry. We provide insulation services nationwide through TruTeam®, which
has over 175 branches, and through Service Partners® which distributes insulation from over 70 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, 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 Statement
This 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 Contact
Tabitha Zane
tabitha.zane@topbuild.com
386-763-8801
| |
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|
|
|
|
|
|
|
|
| TopBuild Corp. |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Condensed Consolidated Statements of Operations (Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| (in thousands, except per common share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
|
| |
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
| Net sales |
|
$ |
489,044 |
|
|
$ |
453,102 |
|
|
$ |
1,404,865 |
|
|
$ |
1,298,715 |
|
|
| Cost of sales |
|
|
368,205 |
|
|
|
344,963 |
|
|
|
1,065,789 |
|
|
|
1,003,433 |
|
|
| Gross profit |
|
|
120,839 |
|
|
|
108,139 |
|
|
|
339,076 |
|
|
|
295,282 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Selling, general, and administrative expense (exclusive of
significant legal settlement, shown separately below) |
|
|
71,277 |
|
|
|
69,038 |
|
|
|
222,181 |
|
|
|
209,623 |
|
|
| Significant legal settlement |
|
|
— |
|
|
|
— |
|
|
|
30,000 |
|
|
|
— |
|
|
| Operating profit |
|
|
49,562 |
|
|
|
39,101 |
|
|
|
86,895 |
|
|
|
85,659 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other income (expense), net: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest expense |
|
|
(2,479 |
) |
|
|
(1,271 |
) |
|
|
(5,767 |
) |
|
|
(4,315 |
) |
|
| Loss on extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
|
(1,086 |
) |
|
|
— |
|
|
| Other, net |
|
|
27 |
|
|
|
65 |
|
|
|
239 |
|
|
|
201 |
|
|
| Other expense, net |
|
|
(2,452 |
) |
|
|
(1,206 |
) |
|
|
(6,614 |
) |
|
|
(4,114 |
) |
|
| Income from continuing operations before income taxes |
|
|
47,110 |
|
|
|
37,895 |
|
|
|
80,281 |
|
|
|
81,545 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income tax expense from continuing operations |
|
|
(15,717 |
) |
|
|
(13,329 |
) |
|
|
(27,139 |
) |
|
|
(30,246 |
) |
|
| Income from continuing operations |
|
|
31,393 |
|
|
|
24,566 |
|
|
|
53,142 |
|
|
|
51,299 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income |
|
$ |
31,393 |
|
|
$ |
24,566 |
|
|
$ |
53,142 |
|
|
$ |
51,299 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income from continuing operations |
|
$ |
0.90 |
|
|
$ |
0.65 |
|
|
$ |
1.47 |
|
|
$ |
1.36 |
|
|
| Net income |
|
$ |
0.90 |
|
|
$ |
0.65 |
|
|
$ |
1.47 |
|
|
$ |
1.36 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income from continuing operations |
|
$ |
0.88 |
|
|
$ |
0.65 |
|
|
$ |
1.44 |
|
|
$ |
1.35 |
|
|
| Net income |
|
$ |
0.88 |
|
|
$ |
0.65 |
|
|
$ |
1.44 |
|
|
$ |
1.35 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| TopBuild Corp. |
|
|
|
|
|
|
|
| Condensed Consolidated Balance Sheets and Other Financial Data
(Unaudited) |
|
|
|
|
|
|
| (dollars in thousands) |
|
|
|
|
|
|
|
| |
|
As of |
|
| |
|
September 30, |
|
December 31, |
|
| |
|
2017 |
|
2016 |
|
| ASSETS |
|
|
|
|
|
|
|
| Current assets: |
|
|
|
|
|
|
|
| Cash and cash equivalents |
|
$ |
18,460 |
|
$ |
134,375 |
|
| Receivables, net of an allowance for doubtful accounts of $3,729 and
$3,374 at September 30, 2017, and December 31, 2016, respectively |
|
|
315,382 |
|
|
252,624 |
|
| Inventories, net |
|
|
116,781 |
|
|
116,190 |
|
| Prepaid expenses and other current assets |
|
|
15,043 |
|
|
23,364 |
|
| Total current assets |
|
|
465,666 |
|
|
526,553 |
|
| |
|
|
|
|
|
|
|
| Property and equipment, net |
|
|
98,144 |
|
|
92,760 |
|
| Goodwill |
|
|
1,077,102 |
|
|
1,045,058 |
|
| Other intangible assets, net |
|
|
34,280 |
|
|
2,656 |
|
| Deferred tax assets, net |
|
|
19,469 |
|
|
19,469 |
|
| Other assets |
|
|
3,033 |
|
|
3,623 |
|
| Total assets |
|
$ |
1,697,694 |
|
$ |
1,690,119 |
|
| |
|
|
|
|
|
|
|
| LIABILITIES |
|
|
|
|
|
|
|
| Current liabilities: |
|
|
|
|
|
|
|
| Accounts payable |
|
$ |
242,617 |
|
$ |
241,534 |
|
| Revolving credit facility |
|
|
5,000 |
|
|
— |
|
| Current portion of long-term debt |
|
|
12,500 |
|
|
20,000 |
|
| Accrued liabilities |
|
|
81,199 |
|
|
64,399 |
|
| Total current liabilities |
|
|
341,316 |
|
|
325,933 |
|
| |
|
|
|
|
|
|
|
| Long-term debt |
|
|
232,405 |
|
|
158,800 |
|
| Deferred tax liabilities, net |
|
|
193,980 |
|
|
193,715 |
|
| Long-term portion of insurance reserves |
|
|
37,396 |
|
|
38,691 |
|
| Other liabilities |
|
|
3,196 |
|
|
433 |
|
| Total liabilities |
|
|
808,293 |
|
|
717,572 |
|
| |
|
|
|
|
|
|
|
| EQUITY |
|
|
889,401 |
|
|
972,547 |
|
| Total liabilities and equity |
|
$ |
1,697,694 |
|
$ |
1,690,119 |
|
| |
|
|
|
|
|
|
|
| |
|
As of |
|
| |
|
September 30, |
|
September 30, |
|
| |
|
2017 |
|
2016 |
|
| Other Financial Data |
|
|
|
|
|
|
|
| Working Capital Days† |
|
|
|
|
|
|
|
| Receivable days |
|
|
49 |
|
|
45 |
|
| Inventory days |
|
|
30 |
|
|
29 |
|
| Accounts payable days |
|
|
80 |
|
|
76 |
|
| Working capital |
|
$ |
189,547 |
|
$ |
153,553 |
|
| Working capital as a percent of sales (LTM)‡ |
|
|
10.0 |
% |
|
8.9 |
% |
| |
|
|
|
|
|
|
|
| † Adjusted for remaining acquisition day one balance sheet items |
|
|
|
|
|
|
|
| ‡ Last 12 months sales have been adjusted for the pro forma effect of acquired
branches |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| TopBuild Corp. |
|
|
|
|
|
|
|
| Consolidated Statement of Cash Flows (Unaudited) |
|
|
|
|
|
|
|
| (dollars in thousands) |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| |
|
Nine Months Ended
September 30, |
|
| |
|
2017 |
|
|
2016 |
|
|
| Net Cash Provided by (Used in) Operating Activities: |
|
|
|
|
|
|
|
| Net income |
|
$ |
53,142 |
|
|
$ |
51,299 |
|
|
| Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
|
|
|
| Depreciation and amortization |
|
|
11,753 |
|
|
|
8,923 |
|
|
| Share-based compensation |
|
|
7,473 |
|
|
|
5,743 |
|
|
| Loss on extinguishment of debt |
|
|
1,086 |
|
|
|
— |
|
|
| Loss on sale or abandonment of property and equipment |
|
|
614 |
|
|
|
2,399 |
|
|
| Amortization of debt issuance costs |
|
|
293 |
|
|
|
257 |
|
|
| Amortization of contingent consideration |
|
|
98 |
|
|
|
— |
|
|
| Provision for bad debt expense |
|
|
2,498 |
|
|
|
2,696 |
|
|
| Loss from inventory obsolescence |
|
|
1,390 |
|
|
|
970 |
|
|
| Deferred income taxes, net |
|
|
266 |
|
|
|
476 |
|
|
| Changes in certain assets and liabilities: |
|
|
|
|
|
|
|
| Receivables, net |
|
|
(43,931 |
) |
|
|
(32,294 |
) |
|
| Inventories, net |
|
|
249 |
|
|
|
12,103 |
|
|
| Prepaid expenses and other current assets |
|
|
8,362 |
|
|
|
(3,162 |
) |
|
| Accounts payable |
|
|
(2,280 |
) |
|
|
(35,023 |
) |
|
| Long-term portion of insurance reserves |
|
|
— |
|
|
|
(1,599 |
) |
|
| Accrued liabilities |
|
|
13,633 |
|
|
|
15,159 |
|
|
| Other, net |
|
|
(28 |
) |
|
|
(13 |
) |
|
| Net cash provided by operating activities |
|
|
54,618 |
|
|
|
27,934 |
|
|
| |
|
|
|
|
|
|
|
| Cash Flows Provided by (Used in) Investing Activities: |
|
|
|
|
|
|
|
| Purchases of property and equipment |
|
|
(13,088 |
) |
|
|
(10,083 |
) |
|
| Acquisition of businesses |
|
|
(84,040 |
) |
|
|
(3,476 |
) |
|
| Proceeds from sale of property and equipment |
|
|
453 |
|
|
|
379 |
|
|
| Other, net |
|
|
178 |
|
|
|
93 |
|
|
| Net cash used in investing activities |
|
|
(96,497 |
) |
|
|
(13,087 |
) |
|
| |
|
|
|
|
|
|
|
| Cash Flows Provided by (Used in) Financing Activities: |
|
|
|
|
|
|
|
| Net transfer to Former Parent |
|
|
— |
|
|
|
(153 |
) |
|
| Proceeds from issuance of long-term debt |
|
|
250,000 |
|
|
|
— |
|
|
| Repayment of long-term debt |
|
|
(183,125 |
) |
|
|
(10,000 |
) |
|
| Payment of debt issuance costs |
|
|
(2,150 |
) |
|
|
— |
|
|
| Proceeds from revolving credit facility |
|
|
170,000 |
|
|
|
— |
|
|
| Repayments of revolving credit facility |
|
|
(165,000 |
) |
|
|
— |
|
|
| Taxes withheld and paid on employees' equity awards |
|
|
(4,475 |
) |
|
|
(1,668 |
) |
|
| Repurchase of shares of common stock |
|
|
(139,286 |
) |
|
|
(11,377 |
) |
|
| Net cash used in financing activities |
|
|
(74,036 |
) |
|
|
(23,198 |
) |
|
| |
|
|
|
|
|
|
|
| Cash and Cash Equivalents |
|
|
|
|
|
|
|
| Decrease for the period |
|
|
(115,915 |
) |
|
|
(8,351 |
) |
|
| Beginning of year |
|
|
134,375 |
|
|
|
112,848 |
|
|
| End of period |
|
$ |
18,460 |
|
|
$ |
104,497 |
|
|
| |
|
|
|
|
|
|
|
| Supplemental disclosure of noncash investing activities: |
|
|
|
|
|
|
|
| Accruals for property and equipment |
|
$ |
154 |
|
|
$ |
110 |
|
|
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| TopBuild Corp. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Segment Data (Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended
September 30, |
|
|
|
|
|
Nine Months
Ended September 30, |
|
|
|
|
|
| |
|
|
2017 |
|
|
|
2016 |
|
|
Change |
|
|
|
2017 |
|
|
|
2016 |
|
|
Change |
|
|
| Installation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Sales |
|
$ |
333,238 |
|
|
$ |
300,005 |
|
|
|
11.1 |
% |
|
$ |
945,109 |
|
|
$ |
860,924 |
|
|
|
9.8 |
% |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating profit, as reported |
|
$ |
40,862 |
|
|
$ |
32,196 |
|
|
|
|
|
|
$ |
66,985 |
|
|
$ |
68,499 |
|
|
|
|
|
|
| Operating margin, as reported |
|
|
12.3 |
% |
|
|
10.7 |
% |
|
|
|
|
|
|
7.1 |
% |
|
|
8.0 |
% |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Significant legal settlement |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
30,000 |
|
|
|
— |
|
|
|
|
|
|
| Rationalization charges |
|
|
139 |
|
|
|
115 |
|
|
|
|
|
|
|
720 |
|
|
|
1,009 |
|
|
|
|
|
|
| Operating profit, as adjusted |
|
$ |
41,001 |
|
|
$ |
32,311 |
|
|
|
|
|
|
$ |
97,705 |
|
|
$ |
69,508 |
|
|
|
|
|
|
| Operating margin, as adjusted |
|
|
12.3 |
% |
|
|
10.8 |
% |
|
|
|
|
|
|
10.3 |
% |
|
|
8.1 |
% |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Distribution |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Sales |
|
$ |
181,146 |
|
|
$ |
174,123 |
|
|
|
4.0 |
% |
|
$ |
526,452 |
|
|
$ |
499,268 |
|
|
|
5.4 |
% |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating profit, as reported |
|
$ |
18,300 |
|
|
$ |
15,536 |
|
|
|
|
|
|
$ |
50,806 |
|
|
$ |
43,416 |
|
|
|
|
|
|
| Operating margin, as reported |
|
|
10.1 |
% |
|
|
8.9 |
%
|
|
|
|
|
|
|
9.7 |
% |
|
|
8.7 |
% |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Rationalization charges |
|
|
5 |
|
|
|
— |
|
|
|
|
|
|
|
23 |
|
|
|
83 |
|
|
|
|
|
|
| Operating profit, as adjusted |
|
$ |
18,305 |
|
|
$ |
15,536 |
|
|
|
|
|
|
$ |
50,829 |
|
|
$ |
43,499 |
|
|
|
|
|
|
| Operating margin, as adjusted |
|
|
10.1 |
% |
|
|
8.9 |
% |
|
|
|
|
|
|
9.7 |
% |
|
|
8.7 |
% |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Sales before eliminations |
|
$ |
514,384 |
|
|
$ |
474,128 |
|
|
|
|
|
|
$ |
1,471,561 |
|
|
$ |
1,360,192 |
|
|
|
|
|
|
| Intercompany eliminations |
|
|
(25,340 |
) |
|
|
(21,026 |
) |
|
|
|
|
|
|
(66,696 |
) |
|
|
(61,477 |
) |
|
|
|
|
|
| Net sales after eliminations |
|
$ |
489,044 |
|
|
$ |
453,102 |
|
|
|
7.9 |
% |
|
$ |
1,404,865 |
|
|
$ |
1,298,715 |
|
|
|
8.2 |
% |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating profit, as reported - segment |
|
$ |
59,162 |
|
|
$ |
47,732 |
|
|
|
|
|
|
$ |
117,791 |
|
|
$ |
111,915 |
|
|
|
|
|
|
| General corporate expense, net |
|
|
(5,187 |
) |
|
|
(4,966 |
) |
|
|
|
|
|
|
(19,503 |
) |
|
|
(15,716 |
) |
|
|
|
|
|
| Intercompany eliminations and other adjustments |
|
|
(4,413 |
) |
|
|
(3,665 |
) |
|
|
|
|
|
|
(11,393 |
) |
|
|
(10,540 |
) |
|
|
|
|
|
| Operating profit, as reported |
|
$ |
49,562 |
|
|
$ |
39,101 |
|
|
|
|
|
|
$ |
86,895 |
|
|
$ |
85,659 |
|
|
|
|
|
|
| Operating margin, as reported |
|
|
10.1 |
% |
|
|
8.6 |
% |
|
|
|
|
|
|
6.2 |
% |
|
|
6.6 |
% |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Significant legal settlement |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
30,000 |
|
|
|
— |
|
|
|
|
|
|
| Rationalization charges† |
|
|
404 |
|
|
|
435 |
|
|
|
|
|
|
|
3,399 |
|
|
|
2,090 |
|
|
|
|
|
|
| Acquisition related costs |
|
|
310 |
|
|
|
55 |
|
|
|
|
|
|
|
748 |
|
|
|
55 |
|
|
|
|
|
|
| Operating profit, as adjusted |
|
$ |
50,276 |
|
|
$ |
39,591 |
|
|
|
|
|
|
$ |
121,042 |
|
|
$ |
87,804 |
|
|
|
|
|
|
| Operating margin, as adjusted |
|
|
10.3 |
% |
|
|
8.7 |
% |
|
|
|
|
|
|
8.6 |
% |
|
|
6.8 |
% |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Share-based compensation ‡ |
|
|
2,372 |
|
|
|
2,037 |
|
|
|
|
|
|
|
6,859 |
|
|
|
5,743 |
|
|
|
|
|
|
| Depreciation and amortization |
|
|
4,918 |
|
|
|
3,015 |
|
|
|
|
|
|
|
11,753 |
|
|
|
8,923 |
|
|
|
|
|
|
| EBITDA, as adjusted |
|
$ |
57,566 |
|
|
$ |
44,643 |
|
|
|
|
|
|
$ |
139,654 |
|
|
$ |
102,470 |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Sales change period over period |
|
|
35,942 |
|
|
|
|
|
|
|
|
|
|
106,150 |
|
|
|
|
|
|
|
|
|
| EBITDA, as adjusted change period over period |
|
|
12,923 |
|
|
|
|
|
|
|
|
|
|
37,184 |
|
|
|
|
|
|
|
|
|
| EBITDA, as adjusted as percentage of sales change |
|
|
36.0 |
% |
|
|
|
|
|
|
|
|
|
35.0 |
% |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| † Rationalization charges include corporate level
adjustments as well as segment operating adjustments. |
|
|
|
|
|
|
|
|
|
|
|
| ‡ Amounts for the nine month period ending September 30, 2017,
excludes $0.6 million of share-based compensation included in the line item, rationalization charges. |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| TopBuild Corp. |
| Non-GAAP Reconciliations (Unaudited) |
| (in thousands, except common share
amounts) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended
September 30, |
|
Nine Months
Ended September 30, |
| |
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
| Gross Profit and Operating Profit
Reconciliations |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Net sales |
|
$ |
489,044 |
|
|
$ |
453,102 |
|
|
$ |
1,404,865 |
|
|
$ |
1,298,715 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Gross profit, as reported |
|
$ |
120,839 |
|
|
$ |
108,139 |
|
|
$ |
339,076 |
|
|
$ |
295,282 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Gross profit, as adjusted |
|
$ |
120,839 |
|
|
$ |
108,139 |
|
|
$ |
339,076 |
|
|
$ |
295,282 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Gross margin, as reported |
|
|
24.7 |
% |
|
|
23.9 |
% |
|
|
24.1 |
% |
|
|
22.7 |
% |
| Gross margin, as adjusted |
|
|
24.7 |
% |
|
|
23.9 |
% |
|
|
24.1 |
% |
|
|
22.7 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Operating profit, as reported |
|
$ |
49,562 |
|
|
$ |
39,101 |
|
|
$ |
86,895 |
|
|
$ |
85,659 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Significant legal settlement |
|
|
— |
|
|
|
— |
|
|
|
30,000 |
|
|
|
— |
|
| Rationalization charges |
|
|
404 |
|
|
|
435 |
|
|
|
3,399 |
|
|
|
2,090 |
|
| Acquisition related costs |
|
|
310 |
|
|
|
55 |
|
|
|
748 |
|
|
|
55 |
|
| Operating profit, as adjusted |
|
$ |
50,276 |
|
|
$ |
39,591 |
|
|
$ |
121,042 |
|
|
$ |
87,804 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Operating margin, as reported |
|
|
10.1 |
% |
|
|
8.6 |
% |
|
|
6.2 |
% |
|
|
6.6 |
% |
| Operating margin, as adjusted |
|
|
10.3 |
% |
|
|
8.7 |
% |
|
|
8.6 |
% |
|
|
6.8 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Income Per Common Share
Reconciliation |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Income from continuing operations before income taxes, as
reported |
|
$ |
47,110 |
|
|
$ |
37,895 |
|
|
$ |
80,281 |
|
|
$ |
81,545 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Significant legal settlement |
|
|
— |
|
|
|
— |
|
|
|
30,000 |
|
|
|
— |
|
| Rationalization charges |
|
|
404 |
|
|
|
435 |
|
|
|
3,399 |
|
|
|
2,090 |
|
| Acquisition related costs |
|
|
310 |
|
|
|
55 |
|
|
|
748 |
|
|
|
55 |
|
| Loss on extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
|
1,086 |
|
|
|
— |
|
| Income from continuing operations before income taxes, as
adjusted |
|
|
47,824 |
|
|
|
38,385 |
|
|
|
115,514 |
|
|
|
83,690 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Tax at 38% rate |
|
|
(18,173 |
) |
|
|
(14,586 |
) |
|
|
(43,895 |
) |
|
|
(31,802 |
) |
| Income from continuing operations, as adjusted |
|
$ |
29,651 |
|
|
$ |
23,799 |
|
|
$ |
71,619 |
|
|
$ |
51,888 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Income per common share, as adjusted |
|
$ |
0.83 |
|
|
$ |
0.63 |
|
|
$ |
1.94 |
|
|
$ |
1.37 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Average diluted common shares outstanding |
|
|
35,737,629 |
|
|
|
37,952,333 |
|
|
|
36,842,144 |
|
|
|
37,942,540 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| TopBuild Corp. |
| Same Branch Net Sales and Adjusted EBITDA
(Unaudited) |
| (dollars in thousands) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended
September 30, |
|
|
Nine Months Ended
September 30, |
|
|
| |
|
2017 |
|
2016 |
|
|
2017 |
|
2016 |
|
|
| Net sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Same branch |
|
$ |
464,622 |
|
$ |
452,430 |
|
|
$ |
1,352,048 |
|
$ |
1,298,043 |
|
|
| Acquired |
|
|
24,422 |
|
|
672 |
|
|
|
52,817 |
|
|
672 |
|
|
| Total |
|
$ |
489,044 |
|
$ |
453,102 |
|
|
$ |
1,404,865 |
|
$ |
1,298,715 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| EBITDA, as adjusted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Same branch |
|
|
53,652 |
|
|
44,602 |
|
|
|
132,703 |
|
|
102,429 |
|
|
| Acquired |
|
|
3,914 |
|
|
41 |
|
|
|
6,951 |
|
|
41 |
|
|
| Total |
|
$ |
57,566 |
|
$ |
44,643 |
|
|
$ |
139,654 |
|
$ |
102,470 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Same branch EBITDA, as adjusted as percentage of sales change |
|
|
74.2 |
% |
36.4 |
% |
|
56.1 |
% |
30.5 |
% |
| Acquired EBITDA, as adjusted as percentage of sales change |
|
|
16.3 |
% |
6.1 |
% |
|
13.3 |
% |
6.1 |
% |
| |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| TopBuild Corp. |
| Reconciliation of EBITDA to Net Income
(Unaudited) |
| (dollars in thousands) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
|
| |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
| Net income, as reported |
|
$ |
31,393 |
|
$ |
24,566 |
|
$ |
53,142 |
|
$ |
51,299 |
|
| Adjustments to arrive at EBITDA, as adjusted: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest expense and other, net |
|
|
2,452 |
|
|
1,206 |
|
|
5,528 |
|
|
4,114 |
|
| Income tax expense from continuing operations |
|
|
15,717 |
|
|
13,329 |
|
|
27,139 |
|
|
30,246 |
|
| Depreciation and amortization |
|
|
4,918 |
|
|
3,015 |
|
|
11,753 |
|
|
8,923 |
|
| Share-based compensation † |
|
|
2,372 |
|
|
2,037 |
|
|
6,859 |
|
|
5,743 |
|
| Significant legal settlement |
|
|
— |
|
|
— |
|
|
30,000 |
|
|
— |
|
| Rationalization charges |
|
|
404 |
|
|
435 |
|
|
3,399 |
|
|
2,090 |
|
| Loss on extinguishment of debt |
|
|
— |
|
|
— |
|
|
1,086 |
|
|
— |
|
| Acquisition related costs |
|
|
310 |
|
|
55 |
|
|
748 |
|
|
55 |
|
| EBITDA, as adjusted |
|
$ |
57,566 |
|
$ |
44,643 |
|
$ |
139,654 |
|
$ |
102,470 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| † Amounts for the nine month period ending September
30, 2017, excludes $0.6 million of share-based compensation included in the line item, rationalization charges. |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
| TopBuild Corp. |
2017 Estimated Adjusted EBITDA Range (Unaudited)
|
| (dollars in millions) |
| |
|
|
|
|
|
| |
Twelve Months Ending
December 31, 2017
|
| |
|
Low |
|
|
High |
| Estimated net income |
$ |
75.1 |
|
$ |
78.8 |
| Adjustments to arrive at estimated EBITDA, as
adjusted: |
|
|
|
|
| Interest expense and other, net |
|
8.0 |
|
|
7.7 |
| Income tax expense from continuing operations |
|
46.0 |
|
|
48.3 |
| Depreciation and amortization |
|
16.1 |
|
|
15.7 |
| Share-based compensation † |
|
9.5 |
|
|
9.2 |
| Significant legal settlement |
|
30.0 |
|
|
30.0 |
| Rationalization charges |
|
3.4 |
|
|
3.4 |
| Loss on extinguishment of debt |
|
1.1 |
|
|
1.1 |
| Acquisition related costs |
|
0.8 |
|
|
0.8 |
| Estimated EBITDA, as adjusted |
$ |
190.0 |
|
$ |
195.0 |
| |
|
|
|
|
|
| † Amounts for the twelve month period ending December
31, 2017, excludes $0.6 million of share-based compensation included in the line item, rationalization charges. |
| |
