IBP Installed Building Products Inc

- Record Annual Revenues and Earnings

- Acquisitions Contributed $97 Million to Annual Revenues

- Management Optimistic 2017 Will Be Another Strong Year

Installed Building Products, Inc. (the "Company" or "IBP") (NYSE:IBP), an industry-leading installer of insulation and complementary building products, today announced record results for the fourth quarter and full year ended December 31, 2016.

Fourth Quarter 2016 Highlights

• Net revenue increased 22.2% to $234 million
• Net income increased 19.3% to $11 million
• Adjusted EBITDA* increased 26.9% to $30 million
• Net income per diluted share increased 16.7% to $0.35
• Adjusted net income per diluted share* increased 29.4% to $0.44
• In October 2016, acquired East Coast Insulators, a provider of installation service to residential and commercial customers with two locations in Virginia, and trailing-twelve month revenues of approximately $20 million
• In November 2016, acquired M.G.D. Inc., a provider of garage doors and services to residential and commercial customers with one location in Indiana, and trailing-twelve month revenues of approximately $1 million
• In November 2016, acquired 3R Products & Services, LLC, an installer of shower doors, shelving, and mirrors to residential homebuilders in the greater Indianapolis, Indiana market, and trailing-twelve month revenues of approximately $5 million

Recent Developments

• In January 2017, closed the previously announced acquisition of Trilok Industries, Inc., Alpha Insulation and Waterproofing, Inc., and Alpha Insulation and Waterproofing Company, a provider of waterproofing, insulation, fireproofing, and fire stopping services to commercial contractors with nine locations throughout the southern U.S., and trailing-twelve month revenues of approximately $89 million

“IBP achieved many milestones during 2016 including record revenues and earnings, the addition of nearly $100 million in acquired revenues, and the announcement of the acquisition of Alpha Insulation and Waterproofing, the largest acquisition we have made to date,” stated Jeff Edwards, Chairman and Chief Executive Officer. “I am extremely pleased with these accomplishments, which have improved our competitiveness and further enhanced our residential and commercial growth opportunities. For the year, total revenues increased 30.2% to a record $863 million driven by single family sales growth of 28.2% and exceptionally strong multi-family sales growth of 54.1%. This growth was due to our nationwide presence in many of the country’s strongest housing markets, our focus on customer service, outstanding customer relations, and the dedication of our team.

“The New Year is off to a great start and I am happy we were able to close the Alpha acquisition in early January. Alpha is an accretive acquisition that allows us to quickly expand and diversify our presence into the commercial end-market. Commercial sales represented approximately 12% of IBP’s 2016 revenues and, as 2017 benefits from the addition of Alpha, we expect a greater proportion of our revenues will be from this market. Our residential and commercial markets are showing continued signs of expansion and we are optimistic these trends will remain throughout 2017. As a result, we expect 2017 to be another strong year of revenue and earnings growth.”

Fourth Quarter 2016 Results Overview

For the fourth quarter of 2016, net revenue was $234.0 million, an increase of 22.2% from $191.5 million in the fourth quarter of 2015. On a same branch basis, net revenue improved 10.6% from the prior year quarter, with approximately 52% of the increase attributable to growth in the number of completed jobs, and the remainder achieved through price gains and more favorable customer and product mix.

Gross profit improved 25.5% to $68.4 million from $54.5 million in the prior year quarter. Gross margin expanded to 29.2% from 28.4% in the prior year quarter, primarily due to higher revenue and a more profitable mix of business.

Selling and administrative expense, as a percentage of net revenue, was 19.8% compared to 19.4% in the prior year quarter. The increase in selling and administrative expenses was primarily due to higher costs needed to support the company’s organic and acquisition growth. The company also incurred higher public company compliance costs, primarily associated with the transition to a large accelerated filer.

Net income was $11.1 million, or $0.35 per diluted share, compared to $9.3 million, or $0.30 per diluted share in the prior year quarter. Adjusted net income was $13.9 million, or $0.44 per diluted share, compared to $10.7 million, or $0.34 per diluted share in the prior year quarter. Adjusted net income adjusts for the impact of non-core items in both periods, and includes an addback for non-cash amortization expense related to acquisitions.

Adjusted EBITDA was $29.8 million, a 26.9% increase from $23.5 million in the prior year quarter, largely due to higher gross profit. Adjusted EBITDA, as a percentage of net revenue, grew 40 basis points to 12.7%, compared to 12.3% in the prior year quarter.

Full Year 2016 Results Overview

For the year ended December 31, 2016, net revenue was $863.0 million, an increase of 30.2% from $662.7 million in 2015. On a same branch basis, net revenue improved 15.6% from the prior year, with approximately 56% of the increase attributable to growth in the number of completed jobs and the remainder achieved through price gains and more favorable customer and product mix. Same branch residential revenue increased 15.3% as compared to a 9.5% increase in total completions.

Gross profit improved 34.1% to $252.4 million from $188.3 million in the prior year. Gross margin expanded to 29.3% from 28.4% in the prior year. Selling, general and administrative expense, as a percentage of net revenue, was 20.3% compared to 20.7% in the prior year.

Net income was $38.4 million, or $1.23 per diluted share, compared to $26.5 million, or $0.85 per diluted share in the prior year. Adjusted net income was $48.4 million, or $1.54 per diluted share, compared to $31.9 million, or $1.02 per diluted share in the prior year. Adjusted net income adjusts for the impact of non-core items in both periods, and includes an addback for non-cash amortization expense related to acquisitions.

For the full year of 2016, adjusted EBITDA was $104.8 million, a 47.3% increase from $71.2 million in the prior year. Adjusted EBITDA, as a percentage of net revenue, improved to 12.1%, or 140 basis points, compared to 10.7% in the prior year. Operating income was $66.1 million, a 46.9% increase from $45.0 million in the prior year. The incremental Adjusted EBITDA margin on same branch revenue growth was 22.2% (please refer to the Supplementary Tables at the end of this Press Release).

Conference Call and Webcast

The Company will host a conference call and webcast on February 27, 2017 at 10:00 a.m. Eastern Time to discuss these results. To participate in the call, please dial 877-407-0792 (domestic) or 201-689-8263 (international). The live webcast will be available at www.installedbuildingproducts.com in the investor relations section. A replay of the conference call will be available through March 27, 2017, by dialing 844-512-2921 (domestic) or 412-317-6671 (international) and entering the passcode 13655039.

About Installed Building Products

Installed Building Products, Inc. is the nation's second largest insulation installer for the residential new construction market and is also a diversified installer of complementary building products, including garage doors, rain gutters, shower doors, closet shelving and mirrors, throughout the United States. The Company manages all aspects of the installation process for its customers, including direct purchases of materials from national manufacturers, supply of materials to job sites and quality installation. The Company offers its portfolio of services for new and existing single-family and multi-family residential and commercial building projects from its national network of branch locations.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws, including with respect to the demand for our services, expansion of our national footprint, our ability to capitalize on the new home construction recovery, our ability to strengthen our market position, our ability to pursue value-enhancing acquisitions, our ability to improve profitability and expectations for demand for our services in 2017. Forward-looking statements may generally be identified by the use of words such as "anticipate," "believe," "expect," "intends," "plan," and "will" or, in each case, their negative, or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Any forward-looking statements that we make herein and in any future reports and statements are not guarantees of future performance, and actual results may differ materially from those expressed in or suggested by such forward-looking statements as a result of various factors, including, without limitation, the factors discussed in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, as the same may be updated from time to time in our subsequent filings with the Securities and Exchange Commission. Any forward-looking statement made by the Company in this press release speaks only as of the date hereof. New risks and uncertainties arise from time to time, and it is impossible for the Company to predict these events or how they may affect it. The Company has no obligation, and does not intend, to update any forward-looking statements after the date hereof, except as required by federal securities laws.

*Use of Non-GAAP Financial Measures

In addition to the financial measures prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), this press release contains the non-GAAP financial measures of Adjusted EBITDA, Adjusted EBITDA margin (i.e., Adjusted EBITDA divided by net revenue), Adjusted Net Income and Adjusted Net Income per diluted share. The reasons for the use of these measures of Adjusted EBITDA and Adjusted Net Income, reconciliations of Adjusted EBITDA, Adjusted Net Income and Adjusted Net Income per diluted share to the most directly comparable GAAP measures and other information relating to these measures are included below following the unaudited condensed consolidated financial statements. Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for IBP’s financial results prepared in accordance with GAAP.

        INSTALLED BUILDING PRODUCTS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited, in thousands, except share and per share amounts)   Three months ended December 31, Twelve months ended December 31, 2016   2015 2016   2015 Net revenue $ 233,977 $ 191,499 $ 862,980 $ 662,719 Cost of sales   165,623   137,031     610,532   474,426   Gross profit 68,354 54,468 252,448 188,293 Operating expenses Selling 13,429 10,426 49,667 37,702 Administrative 32,794 26,769 125,472 99,375 Amortization   3,081   2,173     11,259   6,264   Operating income 19,050 15,100 66,050 44,952 Other expense Interest expense 1,571 1,084 6,177 3,738 Other   15   (1,072 )   263   (716 ) Income before income taxes 17,464 15,088 59,610 41,930 Income tax provision   6,383   5,801     21,174   15,413   Net income $ 11,081 $ 9,287   $ 38,436 $ 26,517     Basic and diluted net income per share $ 0.35 $ 0.30   $ 1.23 $ 0.85   Weighted average shares outstanding: Basic 31,323,600 31,298,163 31,301,887 31,298,163 Diluted 31,396,857 31,334,569 31,363,290 31,334,569       INSTALLED BUILDING PRODUCTS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited, in thousands, except share and per share amounts)   As of December 31, 2016     2015 ASSETS Current assets Cash $ 14,482 $ 6,818 Accounts receivable (less allowance for doubtful accounts of $3,397 and $2,486 at December 31, 2016 and 2015, respectively) 128,466 103,198 Inventories 40,229 29,337 Other current assets   9,214     10,879   Total current assets 192,391 150,232 Property and equipment, net 67,788 57,592 Non-current assets Goodwill 107,086 90,512 Intangibles, net 86,317 67,218 Other non-current assets   8,513     8,018   Total non-current assets   201,916     165,748   Total assets $ 462,095   $ 373,572     LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Current maturities of long-term debt $ 17,192 $ 10,021 Current maturities of capital lease obligations 6,929 8,411 Accounts payable 67,921 50,867 Accrued compensation 18,212 14,488 Other current liabilities   19,851     13,635   Total current liabilities 130,105 97,422 Long-term debt 134,235 113,214 Capital lease obligations, less current maturities 8,364 12,031 Deferred income taxes 14,239 14,582 Other long-term liabilities   21,175     21,840   Total liabilities 308,118 259,089 Commitments and contingencies Stockholders' equity Preferred Stock; $0.01 par value: 5,000,000 authorized and 0 shares issued and outstanding at December 31, 2016 and 2015, respectively - - Common Stock; $0.01 par value: 100,000,000 authorized, 32,135,176 and 31,982,888 issued and 31,484,774 and 31,366,328 shares outstanding at December 31, 2016 and 2015, respectively 321 320 Additional paid in capital 158,581 156,688 Retained earnings (accumulated deficit) 7,294 (31,142 ) Treasury Stock; at cost: 650,402 and 616,560 shares at December 31, 2016 and 2015, respectively   (12,219 )   (11,383 ) Total stockholders' equity   153,977     114,483   Total liabilities and stockholders' equity $ 462,095   $ 373,572               INSTALLED BUILDING PRODUCTS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited, in thousands)   Twelve months ended December 31, 2016     2015 Cash flows from operating activities Net income $ 38,436 $ 26,517 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization of property and equipment 23,571 16,975 Amortization of intangibles 11,259 6,264 Amortization of deferred financing costs and debt discount 383 264 Provision for doubtful accounts 2,928 919 Write-off of debt issuance costs 286 - Gain on sale of property and equipment (254 ) (409 ) Gain on bargain purchase - (1,116 ) Noncash stock compensation 1,894 2,116 Deferred income taxes (605 ) (1,515 ) Changes in assets and liabilities, excluding effects of acquisitions Accounts receivable (18,760 ) (17,526 ) Inventories (8,677 ) (2,846 ) Other assets 2,803 823 Accounts payable 12,400 (2,511 ) Income taxes payable/receivable 1,484 3,592 Other liabilities   6,118     3,000   Net cash provided by operating activities   73,266     34,547   Cash flows from investing activities Purchases of property and equipment (27,013 ) (27,305 ) Acquisitions of businesses, net of cash acquired of $2,181 and $926, respectively (53,312 ) (84,274 ) Proceeds from sale of property and equipment 691 634 Other   37     (420 ) Net cash used in investing activities   (79,597 )   (111,365 ) Cash flows from financing activities Proceeds from revolving line of credit under credit agreement applicable to respective period 37,975 149,350 Payments on revolving line of credit under credit agreement applicable to respective period (37,975 ) (149,350 ) Proceeds from term loan under credit agreement applicable to respective period 100,000 50,000 Payments on term loan under credit agreement applicable to respective period (51,875 ) (24,688 ) Proceeds from delayed draw term loan under credit agreement applicable to respective period 12,500 50,000 Payments on delayed draw term loan under credit agreement applicable to respective period (50,000 ) - Proceeds from vehicle and equipment notes payable 22,948 21,334 Debt issuance costs (1,238 ) (758 ) Principal payments on long term debt (5,849 ) (4,088 ) Principal payments on capital lease obligations (8,598 ) (9,674 ) Acquisition-related obligations (3,057 ) (3,151 ) Repurchase of common stock - (6,100 ) Surrender of common stock by employees   (836 )   -   Net cash provided by financing activities   13,995     72,875   Net change in cash 7,664 (3,943 ) Cash at beginning of year   6,818     10,761   Cash at end of year $ 14,482   $ 6,818   Supplemental disclosures of cash flow information Net cash paid during the year for: Interest $ 5,342 $ 3,287 Income taxes, net of refunds 18,929 13,493 Supplemental disclosure of noncash investing and financing activities Vehicles capitalized under capital leases and related lease obligations 3,737 3,379 Seller obligations in connection with acquisition of businesses 4,459 13,180 Unpaid purchases of property and equipment included in accounts payable 775 220  

Non-GAAP Financial Measures

Adjusted EBITDA, Adjusted EBITDA margin and Adjusted Net Income measure performance by adjusting EBITDA and GAAP net income, respectively, for certain income or expense items that are not considered part of our core operations. We believe that the presentation of these measures provides useful information to investors regarding our results of operations because it assists both investors and us in analyzing and benchmarking the performance and value of our business.

We believe the Adjusted EBITDA measure is useful to investors and us as a measure of comparative operating performance from period to period as it measures our changes in pricing decisions, cost controls and other factors that impact operating performance, and removes the effect of our capital structure (primarily interest expense), asset base (primarily depreciation and amortization), items outside our control (primarily income taxes) and the volatility related to the timing and extent of other activities such as asset impairments and non-core income and expenses. Accordingly, we believe that this measure is useful for comparing general operating performance from period to period. In addition, we use various EBITDA-based measures in determining the achievement of awards under certain of our incentive compensation programs. Other companies may define Adjusted EBITDA differently and, as a result, our measure may not be directly comparable to measures of other companies. In addition, Adjusted EBITDA may be defined differently for purposes of covenants contained in our revolving credit facility or any future facility.

Although we use the Adjusted EBITDA measure to assess the performance of our business, the use of the measure is limited because it does not include certain material expenses, such as interest and taxes, necessary to operate our business. Adjusted EBITDA should be considered in addition to, and not as a substitute for, GAAP net income as a measure of performance. Our presentation of this measure should not be construed as an indication that our future results will be unaffected by unusual or non-recurring items. This measure has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Because of these limitations, this measure is not intended as an alternative to net income as an indicator of our operating performance, as an alternative to any other measure of performance in conformity with GAAP or as an alternative to cash flow (used in) provided by operating activities as a measure of liquidity. You should therefore not place undue reliance on this measure or ratios calculated using this measure.

We also believe the Adjusted Net Income measure is useful to investors and us as a measure of comparative operating performance from period to period as it measures our changes in pricing decisions, cost controls and other factors that impact operating performance, and removes the effect of certain non-core items such as discontinued operations, acquisition related expenses, amortization expense, the tax impact of these certain non-core items, and the volatility related to the timing and extent of other activities such as asset impairments and non-core income and expenses. To make the financial presentation more consistent with other public building products companies, beginning in the fourth quarter 2016 we included an addback for non-cash amortization expense related to acquisitions. Accordingly, we believe that this measure is useful for comparing general operating performance from period to period. Other companies may define Adjusted Net Income differently and, as a result, our measure may not be directly comparable to measures of other companies. In addition, Adjusted Net Income may be defined differently for purposes of covenants contained in our revolving credit facility or any future facility.

The table below reconciles Adjusted Net Income to the most directly comparable GAAP financial measure, net income, for the periods presented therein.

    INSTALLED BUILDING PRODUCTS, INC. RECONCILIATION OF GAAP TO NON-GAAP MEASURES ADJUSTED NET INCOME CALCULATIONS (unaudited, in thousands, except share and per share amounts)   Three months ended December 31, Twelve months ended December 31, 2016   2015 2016   2015   Net income, as reported $ 11,081 $ 9,287 $ 38,436 $ 26,517 Adjustments for adjusted net income: Write-off of capitalized loan costs - - 286 - Share based compensation expense 362 584 1,894 2,116 Acquisition related expenses 989 460 2,320 1,149 Legal settlements and reserves - 104 - 104 Amortization expense 1 3,081 2,173 11,259 6,264 Gain on bargain purchase - (1,116 ) - (1,116 ) Tax impact of adjusted items at marginal tax rate 2   (1,640 )   (816 )   (5,831 )   (3,151 ) Adjusted net income $ 13,873   $ 10,676   $ 48,364   $ 31,883     Weighted average shares outstanding (diluted) 31,396,857 31,334,569 31,363,290 31,334,569   Diluted net income per share, as reported $ 0.35 $ 0.30 $ 1.23 $ 0.85 Adjustments for adjusted net income, net of tax impact, per diluted share 3   0.09     0.04     0.31     0.17   Diluted adjusted net income per share $ 0.44   $ 0.34   $ 1.54   $ 1.02  

1 Addback of all non-cash amortization resulting from business combinations

2 Normalized tax rate of 37.0% applied to each period in 2016 and 2015

3 Includes adjustments related to the items noted above, net of tax

The table below reconciles Adjusted EBITDA to the most directly comparable GAAP financial measure, net income, for the periods presented therein.

              RECONCILIATION OF GAAP TO NON-GAAP MEASURES ADJUSTED EBITDA CALCULATIONS (unaudited, in thousands)   Three months ended December 31, Twelve months ended December 31, 2016   2015 2016   2015 Adjusted EBITDA:   Net income (GAAP) $ 11,081 $ 9,287 $ 38,436 $ 26,517 Interest expense 1,571 1,084 6,177 3,738 Provision for income taxes 6,383 5,801 21,174 15,413 Depreciation and amortization 9,411 7,276 34,830 23,239 Gain on bargain purchase   -     (1,116 )   -     (1,116 ) EBITDA   28,446     22,332     100,617     67,791     Acquisition related expenses 989 460 2,320 1,149 Share based compensation expense 362 584 1,894 2,116 Legal settlements and reserves   -     104     -     104   Adjusted EBITDA $ 29,797   $ 23,480   $ 104,831   $ 71,160     Adjusted EBITDA margin 12.7 % 12.3 % 12.1 % 10.7 %       INSTALLED BUILDING PRODUCTS, INC. SUPPLEMENTARY TABLE (unaudited)   Three months ended December 31, Twelve months ended December 31, 2016   2015 2016   2015  

Period-over-period Growth

Sales Growth 22.2% 31.8% 30.2% 27.9% Same Branch Sales Growth 10.6% 14.8% 15.6% 11.7%   Single-Family Sales Growth 21.4% 34.5% 28.2% 30.7% Single-Family Same Branch Sales Growth 7.7% 18.1% 13.5% 13.6%   Residential Sales Growth 23.0% 32.8% 30.1% 29.9% Residential Same Branch Sales Growth 9.9% 15.3% 15.3% 12.7%  

U.S. Housing Market 1

Total Completions Growth 13.2% 8.5% 9.5% 9.5% Single-Family Completions Growth 15.3% 4.8% 14.0% 4.6%  

Same Branch Sales Growth

Volume Growth 5.5% 7.3% 8.8% 5.7% Price/Mix Growth 5.1% 7.5% 6.8% 6.0%

1 U.S. Census Bureau data, as revised

    INSTALLED BUILDING PRODUCTS, INC. INCREMENTAL REVENUE AND ADJUSTED EBITDA MARGINS (unaudited, in thousands)   Three months ended December 31, Twelve months ended December 31, 2016   % Total   2015   % Total 2016   % Total   2015   % Total Revenue Increase   Same Branch $ 20,294 47.8% $ 21,464 46.4% $ 103,406 51.6% $ 60,603 41.9% Acquired   22,184 52.2%   24,765 53.6%   96,855 48.4%   84,096 58.1% Total $ 42,478 100.0% $ 46,229 100.0% $ 200,261 100.0% $ 144,699 100.0%       Adj EBITDA Adj EBITDA Adj EBITDA Adj EBITDA Contribution Contribution Contribution Contribution Adjusted EBITDA   Same Branch $ 4,054 20.0% $ 4,856 22.6% $ 22,983 22.2% $ 14,116 23.3% Acquired   2,263 10.2%   3,387 13.7%   10,687 11.0%   13,032 15.5% Total $ 6,317 14.9% $ 8,243 17.8% $ 33,670 16.8% $ 27,148 18.8%

View source version on businesswire.com: http://www.businesswire.com/news/home/20170227005188/en/

Installed Building Products, Inc.Investor Relations, 614-221-9944investorrelations@installed.net