8.6% Operating Margin, 8.9% on an Adjusted
Basis$0.63 Per Diluted Share Income from Continuing Operations$0.67
Per Diluted Share on an Adjusted Basis
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 had another outstanding quarter as we continue to grow our two
business segments and expand operating margins. Commercial
and residential new construction are demonstrating consistent
strength and we continue to benefit from our business model and
national scale.
“Looking ahead, we have strong momentum going
into the second half of the year. Our focus remains on
driving top line growth and improving operational efficiencies
throughout the Company, generating strong results for our
shareholders.”
Second Quarter Financial
Highlights(unless otherwise indicated, comparisons are to
the quarter ended June 30, 2016)
- Net sales increased 9.9% to $474.5 million, primarily driven by
sales volume growth in both operating segments as well as
acquisitions. On a same branch basis, revenue increased 5.1% to
$453.6 million.
- Gross margin expanded 200 basis points to 24.6%.
- Operating profit was $40.8 million, compared to operating
profit of $26.8 million. On an adjusted basis, operating
profit was $42.2 million, compared to $27.4 million, a 53.8%
improvement.
- Operating margin was 8.6%, up 240 basis points. Adjusted
operating margin improved 250 basis points to 8.9%.
- Income from continuing operations was $23.5 million, or $0.63
per diluted share, compared to $15.6 million, or $0.41 per diluted
share. Adjusted income from continuing operations was $25.0
million, or $0.67 per diluted share, compared to $16.2 million, or
$0.43 per diluted share.
- Adjusted EBITDA was $48.2 million, compared to $32.6 million, a
48.1% increase. Incremental EBITDA margin was 36.5%. On a
same branch basis, adjusted EBITDA was $45.6 million, a 40.1%
increase, and incremental EBITDA margin was 59.1%.
- The seven acquisitions completed over the past 12 months
contributed $20.8 million of revenue. Incremental EBITDA
related to these acquisitions improved 680 basis points from first
quarter 2017 to 12.5%.
- At June 30, 2017, the Company had cash and cash equivalents of
$94.2 million, availability under its revolving credit facility of
$201.0 million and $100 million available under a delayed draw term
loan for total liquidity of $395.2 million.
Six Month Financial Highlights(unless otherwise
indicated, comparisons are to six months ended June 30, 2016)
- Net sales increased 8.3% to $915.8 million. On a same branch
basis, revenue increased 4.9% to $887.4 million.
- Gross margin expanded 170 basis points to 23.8%.
- Operating profit was $37.3 million, compared to operating
profit of $46.6 million. In the first quarter of 2017, the
Company reported an operating loss of $3.5 million related to a $30
million legal settlement. On an adjusted basis, operating
profit was $70.8 million, compared to $48.2 million, a 46.8%
improvement.
- Operating margin was 4.1%, down 140 basis points.
Adjusted operating margin improved 200 basis points to 7.7%.
- Income from continuing operations was $21.7 million, or $0.58
per diluted share, compared to $26.7 million, or $0.70 per diluted
share. Adjusted income from continuing operations was $42.0
million, or $1.12 per diluted share, compared to $28.1 million, or
$0.74 per diluted share.
- Adjusted EBITDA was $82.1 million, compared to $57.8 million, a
42.0% increase. Incremental EBITDA margin was 34.6%. On a
same branch basis, adjusted EBITDA grew 36.7% to $79.1 million and
incremental EBITDA margin was 50.8%.
Operating
Segment Highlights ($ in
000s)(comparisons are to the quarter ended June 30,
2016)
TruTeam |
3 Months Ended 6/30/17 |
6 Months Ended 6/30/17 |
|
Service Partners |
3 Months Ended 6/30/17 |
6 Months Ended 6/30/17 |
Sales |
$ |
320,984 |
|
$ |
611,870 |
|
|
Sales |
$ |
175,062 |
|
$ |
345,306 |
|
Change |
|
11.4 |
% |
|
9.1 |
% |
|
Change |
|
6.6 |
% |
|
6.2 |
% |
Operating Margin |
|
10.9 |
% |
|
4.3 |
% |
|
Operating Margin |
|
9.7 |
% |
|
9.4 |
% |
Change |
300 bps |
(220) bps |
|
Change |
150 bps |
80 bps |
Adj. Operating Margin |
|
11.0 |
% |
|
9.3 |
% |
|
Adj. Operating Margin |
|
9.7 |
% |
|
9.4 |
% |
Change |
310 bps |
270 bps |
|
Change |
150 bps |
80 bps |
|
|
|
|
|
|
|
Capital Allocation
Acquisitions
In the second quarter, the Company acquired
Superior Insulation Products, a residential insulation company, and
Canyon Insulation, a heavy commercial insulation and firestopping
company. Combined, these companies generated approximately
$40 million in revenue for 2016. Year-to-date, through August
8, 2017, the Company has closed 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, “Acquisitions remain our number one capital
allocation priority and the pipeline of prospects our M&A team
is currently evaluating is robust. Year-to-date, we’ve
completed six acquisitions that are expected to contribute
approximately $83 million of incremental annual revenue.”
Share RepurchasesIn the second
quarter, under the $200 million share repurchase program announced
on February 28, 2017, the Company repurchased 461,358 shares at an
average price of $47.48 per share. Year-to-date, through June
30, the Company has acquired 858,393 shares at an average share
price of $45.77.
In addition, as previously announced, the
Company entered into an agreement with Bank of America Merrill
Lynch (BofAML) to repurchase $100 million of the Company’s common
stock under an accelerated share repurchase program. On July
5th, the Company made a payment of $100.0 million to BofAML, 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.
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 second quarter 2017 financial results is scheduled
for today, Tuesday, August 8, at 9:00 a.m. Eastern Time. The
call may be accessed by dialing (877) 256-5211. 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: 21842821.
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.
(tables follow)
TopBuild
Corp. |
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed
Consolidated Statements of Operations (Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands,
except per common share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
|
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
Net
sales |
|
$ |
474,458 |
|
|
$ |
431,589 |
|
|
$ |
915,821 |
|
|
$ |
845,613 |
|
|
Cost of
sales |
|
|
357,849 |
|
|
|
333,901 |
|
|
|
697,584 |
|
|
|
658,470 |
|
|
Gross
profit |
|
|
116,609 |
|
|
|
97,688 |
|
|
|
218,237 |
|
|
|
187,143 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling,
general, and administrative expense (exclusive of significant legal
settlement, shown separately below) |
|
|
75,813 |
|
|
|
70,898 |
|
|
|
150,904 |
|
|
|
140,586 |
|
|
Significant legal settlement |
|
|
— |
|
|
|
— |
|
|
|
30,000 |
|
|
|
— |
|
|
Operating
profit |
|
|
40,796 |
|
|
|
26,790 |
|
|
|
37,333 |
|
|
|
46,557 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
income (expense), net: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense |
|
|
(1,918 |
) |
|
|
(1,371 |
) |
|
|
(3,288 |
) |
|
|
(3,044 |
) |
|
Loss on
extinguishment of debt |
|
|
(1,086 |
) |
|
|
— |
|
|
|
(1,086 |
) |
|
|
— |
|
|
Other,
net |
|
|
105 |
|
|
|
61 |
|
|
|
212 |
|
|
|
136 |
|
|
Other
expense, net |
|
|
(2,899 |
) |
|
|
(1,310 |
) |
|
|
(4,162 |
) |
|
|
(2,908 |
) |
|
Income
from continuing operations before income taxes |
|
|
37,897 |
|
|
|
25,480 |
|
|
|
33,171 |
|
|
|
43,649 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
tax expense from continuing operations |
|
|
(14,437 |
) |
|
|
(9,865 |
) |
|
|
(11,422 |
) |
|
|
(16,918 |
) |
|
Income
from continuing operations |
|
|
23,460 |
|
|
|
15,615 |
|
|
|
21,749 |
|
|
|
26,731 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income |
|
$ |
23,460 |
|
|
$ |
15,615 |
|
|
$ |
21,749 |
|
|
$ |
26,731 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
from continuing operations |
|
$ |
0.64 |
|
|
$ |
0.41 |
|
|
$ |
0.59 |
|
|
$ |
0.71 |
|
|
Net
income |
|
$ |
0.64 |
|
|
$ |
0.41 |
|
|
$ |
0.59 |
|
|
$ |
0.71 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
from continuing operations |
|
$ |
0.63 |
|
|
$ |
0.41 |
|
|
$ |
0.58 |
|
|
$ |
0.70 |
|
|
Net
income |
|
$ |
0.63 |
|
|
$ |
0.41 |
|
|
$ |
0.58 |
|
|
$ |
0.70 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TopBuild
Corp. |
|
|
|
|
|
|
|
Condensed Consolidated Balance Sheets and Other Financial
Data (Unaudited) |
|
|
|
|
|
|
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
As of |
|
|
|
June 30, |
|
December 31, |
|
|
|
2017 |
|
2016 |
|
ASSETS |
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
94,233 |
|
$ |
134,375 |
|
Receivables, net of an allowance for doubtful accounts of $3,566
and $3,374 at June 30, 2017, and December 31, 2016,
respectively |
|
|
297,325 |
|
|
252,624 |
|
Inventories, net |
|
|
111,640 |
|
|
116,190 |
|
Prepaid
expenses and other current assets |
|
|
23,391 |
|
|
23,364 |
|
Total
current assets |
|
|
526,589 |
|
|
526,553 |
|
|
|
|
|
|
|
|
|
Property and equipment, net |
|
|
98,185 |
|
|
92,760 |
|
Goodwill |
|
|
1,084,833 |
|
|
1,045,058 |
|
Other
intangible assets, net |
|
|
28,786 |
|
|
2,656 |
|
Deferred tax assets, net |
|
|
19,469 |
|
|
19,469 |
|
Other
assets |
|
|
3,197 |
|
|
3,623 |
|
Total
assets |
|
$ |
1,761,059 |
|
$ |
1,690,119 |
|
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Accounts
payable |
|
$ |
243,000 |
|
$ |
241,534 |
|
Current
portion of long-term debt |
|
|
12,500 |
|
|
20,000 |
|
Accrued
liabilities |
|
|
77,175 |
|
|
64,399 |
|
Total
current liabilities |
|
|
332,675 |
|
|
325,933 |
|
|
|
|
|
|
|
|
|
Long-term debt |
|
|
235,422 |
|
|
158,800 |
|
Deferred tax liabilities, net |
|
|
193,715 |
|
|
193,715 |
|
Long-term portion of insurance reserves |
|
|
38,132 |
|
|
38,691 |
|
Other
liabilities |
|
|
3,151 |
|
|
433 |
|
Total
liabilities |
|
|
803,095 |
|
|
717,572 |
|
|
|
|
|
|
|
|
|
EQUITY |
|
|
957,964 |
|
|
972,547 |
|
Total
liabilities and equity |
|
$ |
1,761,059 |
|
$ |
1,690,119 |
|
|
|
|
|
|
|
|
|
|
|
As
of |
|
|
|
June 30, |
|
June 30, |
|
|
|
2017 |
|
2016 |
|
Other Financial Data |
|
|
|
|
|
|
|
Working Capital Days† |
|
|
|
|
|
|
|
Receivable days |
|
|
45 |
|
|
46 |
|
Inventory
days |
|
|
29 |
|
|
28 |
|
Accounts
payable days |
|
|
83 |
|
|
82 |
|
Working
capital |
|
$ |
165,965 |
|
$ |
143,202 |
|
Working
capital as a percent of sales (LTM)‡ |
|
|
8.8 |
% |
|
8.4 |
% |
|
|
|
|
|
|
|
|
† Amounts adjusted for
acquisitions for comparability purposes |
|
|
|
|
|
|
|
‡ Last 12 months sales
have been adjusted for the pro forma effect of acquired
branches |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TopBuild
Corp. |
|
|
|
|
|
|
Condensed
Consolidated Statements of Cash Flows (Unaudited) |
|
|
|
|
|
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30, |
|
|
2017 |
|
|
2016 |
|
Net Cash
Provided by (Used in) Operating Activities: |
|
|
|
|
|
|
Net income |
|
$ |
21,749 |
|
|
$ |
26,731 |
|
Adjustments to
reconcile net income to net cash provided by operating
activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
|
6,835 |
|
|
|
5,908 |
|
Share-based compensation |
|
|
5,101 |
|
|
|
3,705 |
|
Loss on
extinguishment of debt |
|
|
1,086 |
|
|
|
— |
|
Loss on
sale or abandonment of property and equipment |
|
|
285 |
|
|
|
1,477 |
|
Amortization of debt issuance costs |
|
|
186 |
|
|
|
171 |
|
Provision
for bad debt expense |
|
|
1,750 |
|
|
|
1,986 |
|
Loss from
inventory obsolescence |
|
|
826 |
|
|
|
667 |
|
Deferred
income taxes, net |
|
|
— |
|
|
|
(3 |
) |
Changes
in certain assets and liabilities: |
|
|
|
|
|
|
Receivables, net |
|
|
(25,123 |
) |
|
|
(21,436 |
) |
Inventories, net |
|
|
5,908 |
|
|
|
15,819 |
|
Prepaid
expenses and other current assets |
|
|
7 |
|
|
|
(3,266 |
) |
Accounts
payable |
|
|
(3,124 |
) |
|
|
(39,237 |
) |
Accrued
liabilities |
|
|
9,787 |
|
|
|
13,642 |
|
Other,
net |
|
|
398 |
|
|
|
(18 |
) |
Net cash
provided by operating activities |
|
|
25,671 |
|
|
|
6,146 |
|
|
|
|
|
|
|
|
Cash Flows
Provided by (Used in) Investing Activities: |
|
|
|
|
|
|
Purchases
of property and equipment |
|
|
(8,571 |
) |
|
|
(6,023 |
) |
Acquisition of businesses |
|
|
(83,932 |
) |
|
|
— |
|
Proceeds
from sale of property and equipment |
|
|
126 |
|
|
|
219 |
|
Other,
net |
|
|
147 |
|
|
|
147 |
|
Net cash
used in investing activities |
|
|
(92,230 |
) |
|
|
(5,657 |
) |
|
|
|
|
|
|
|
Cash Flows
Provided by (Used in) Financing Activities: |
|
|
|
|
|
|
Proceeds
from issuance of long-term debt |
|
|
250,000 |
|
|
|
— |
|
Repayment
of long-term debt |
|
|
(180,000 |
) |
|
|
(5,000 |
) |
Payment
of debt issuance costs |
|
|
(2,150 |
) |
|
|
— |
|
Taxes
withheld and paid on employees' equity awards |
|
|
(2,147 |
) |
|
|
(1,285 |
) |
Repurchase of shares of common stock |
|
|
(39,286 |
) |
|
|
(4,962 |
) |
Net cash
provided by (used in) financing activities |
|
|
26,417 |
|
|
|
(11,247 |
) |
|
|
|
|
|
|
|
Cash and Cash Equivalents |
|
|
|
|
|
|
Decrease
for the period |
|
|
(40,142 |
) |
|
|
(10,758 |
) |
Beginning
of year |
|
|
134,375 |
|
|
|
112,848 |
|
End of
year |
|
$ |
94,233 |
|
|
$ |
102,090 |
|
|
|
|
|
|
|
|
Supplemental disclosure
of noncash investing activities: |
|
|
|
|
|
|
Accruals
for property and equipment |
|
$ |
655 |
|
|
$ |
521 |
|
TopBuild
Corp. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Data (Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(dollars in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30, |
|
|
|
|
|
Six Months
Ended
June 30, |
|
|
|
|
|
|
|
|
2017 |
|
|
|
2016 |
|
|
Change |
|
|
|
2017 |
|
|
|
2016 |
|
|
Change |
|
|
Installation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales |
|
$ |
320,984 |
|
|
$ |
288,042 |
|
|
|
11.4 |
% |
|
$ |
611,870 |
|
|
$ |
560,920 |
|
|
|
9.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit, as reported |
|
$ |
35,086 |
|
|
$ |
22,797 |
|
|
|
|
|
|
$ |
26,123 |
|
|
$ |
36,303 |
|
|
|
|
|
|
Operating
margin, as reported |
|
|
10.9 |
|
% |
|
7.9 |
|
% |
|
|
|
|
|
4.3 |
|
% |
|
6.5 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Significant legal settlement |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
30,000 |
|
|
|
— |
|
|
|
|
|
|
Rationalization charges |
|
|
171 |
|
|
|
66 |
|
|
|
|
|
|
|
582 |
|
|
|
894 |
|
|
|
|
|
|
Operating
profit, as adjusted |
|
$ |
35,257 |
|
|
$ |
22,863 |
|
|
|
|
|
|
$ |
56,705 |
|
|
$ |
37,197 |
|
|
|
|
|
|
Operating
margin, as adjusted |
|
|
11.0 |
|
% |
|
7.9 |
|
% |
|
|
|
|
|
9.3 |
|
% |
|
6.6 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distribution |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales |
|
$ |
175,062 |
|
|
$ |
164,257 |
|
|
|
6.6 |
% |
|
$ |
345,306 |
|
|
$ |
325,145 |
|
|
|
6.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit, as reported |
|
$ |
17,022 |
|
|
$ |
13,547 |
|
|
|
|
|
|
$ |
32,506 |
|
|
$ |
27,880 |
|
|
|
|
|
|
Operating
margin, as reported |
|
|
9.7 |
|
% |
|
8.2 |
|
% |
|
|
|
|
|
9.4 |
|
% |
|
8.6 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rationalization charges |
|
|
17 |
|
|
|
— |
|
|
|
|
|
|
|
17 |
|
|
|
83 |
|
|
|
|
|
|
Operating
profit, as adjusted |
|
$ |
17,039 |
|
|
$ |
13,547 |
|
|
|
|
|
|
$ |
32,523 |
|
|
$ |
27,963 |
|
|
|
|
|
|
Operating
margin, as adjusted |
|
|
9.7 |
|
% |
|
8.2 |
|
% |
|
|
|
|
|
9.4 |
|
% |
|
8.6 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
before eliminations |
|
$ |
496,046 |
|
|
$ |
452,299 |
|
|
|
|
|
|
$ |
957,176 |
|
|
$ |
886,065 |
|
|
|
|
|
|
Intercompany eliminations |
|
|
(21,588 |
) |
|
|
(20,710 |
) |
|
|
|
|
|
|
(41,355 |
) |
|
|
(40,452 |
) |
|
|
|
|
|
Net sales
after eliminations |
|
$ |
474,458 |
|
|
$ |
431,589 |
|
|
|
9.9 |
% |
|
$ |
915,821 |
|
|
$ |
845,613 |
|
|
|
8.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit, as reported - segment |
|
$ |
52,108 |
|
|
$ |
36,344 |
|
|
|
|
|
|
$ |
58,629 |
|
|
$ |
64,183 |
|
|
|
|
|
|
General
corporate expense, net |
|
|
(7,632 |
) |
|
|
(6,030 |
) |
|
|
|
|
|
|
(14,316 |
) |
|
|
(10,750 |
) |
|
|
|
|
|
Intercompany eliminations and other adjustments |
|
|
(3,680 |
) |
|
|
(3,524 |
) |
|
|
|
|
|
|
(6,980 |
) |
|
|
(6,876 |
) |
|
|
|
|
|
Operating
profit, as reported |
|
$ |
40,796 |
|
|
$ |
26,790 |
|
|
|
|
|
|
$ |
37,333 |
|
|
$ |
46,557 |
|
|
|
|
|
|
Operating
margin, as reported |
|
|
8.6 |
|
% |
|
6.2 |
|
% |
|
|
|
|
|
4.1 |
|
% |
|
5.5 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Significant legal settlement |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
30,000 |
|
|
|
— |
|
|
|
|
|
|
Rationalization charges† |
|
|
1,258 |
|
|
|
647 |
|
|
|
|
|
|
|
2,995 |
|
|
|
1,655 |
|
|
|
|
|
|
Acquisition related costs |
|
|
145 |
|
|
|
— |
|
|
|
|
|
|
|
437 |
|
|
|
— |
|
|
|
|
|
|
Operating
profit, as adjusted |
|
$ |
42,199 |
|
|
$ |
27,437 |
|
|
|
|
|
|
$ |
70,765 |
|
|
$ |
48,212 |
|
|
|
|
|
|
Operating
margin, as adjusted |
|
|
8.9 |
|
% |
|
6.4 |
|
% |
|
|
|
|
|
7.7 |
|
% |
|
5.7 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation ‡ |
|
|
2,403 |
|
|
|
2,105 |
|
|
|
|
|
|
|
4,487 |
|
|
|
3,705 |
|
|
|
|
|
|
Depreciation and amortization |
|
|
3,605 |
|
|
|
3,013 |
|
|
|
|
|
|
|
6,835 |
|
|
|
5,908 |
|
|
|
|
|
|
EBITDA,
as adjusted |
|
$ |
48,207 |
|
|
$ |
32,555 |
|
|
|
|
|
|
$ |
82,087 |
|
|
$ |
57,825 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
change period over period |
|
|
42,869 |
|
|
|
|
|
|
|
|
|
|
70,208 |
|
|
|
|
|
|
|
|
|
EBITDA,
as adjusted change period over period |
|
|
15,652 |
|
|
|
|
|
|
|
|
|
|
24,262 |
|
|
|
|
|
|
|
|
|
EBITDA,
as adjusted as percentage of sales change |
|
|
36.5 |
|
% |
|
|
|
|
|
|
|
|
34.6 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
† Rationalization charges include corporate level adjustments
as well as segment operating adjustments. |
|
|
|
|
|
|
|
|
|
|
|
‡ Amounts
for the three and six month periods ending June 30, 2017, exclude
$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
June 30, |
|
Six Months
Ended
June 30, |
|
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
Gross Profit and Operating Profit
Reconciliations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales |
|
$ |
474,458 |
|
|
$ |
431,589 |
|
|
$ |
915,821 |
|
|
$ |
845,613 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit, as reported |
|
$ |
116,609 |
|
|
$ |
97,688 |
|
|
$ |
218,237 |
|
|
$ |
187,143 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit, as adjusted |
|
$ |
116,609 |
|
|
$ |
97,688 |
|
|
$ |
218,237 |
|
|
$ |
187,143 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
margin, as reported |
|
|
24.6 |
|
% |
|
22.6 |
|
% |
|
23.8 |
|
% |
|
22.1 |
|
% |
Gross
margin, as adjusted |
|
|
24.6 |
|
% |
|
22.6 |
|
% |
|
23.8 |
|
% |
|
22.1 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit, as reported |
|
$ |
40,796 |
|
|
$ |
26,790 |
|
|
$ |
37,333 |
|
|
$ |
46,557 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Significant legal settlement |
|
|
— |
|
|
|
— |
|
|
|
30,000 |
|
|
|
— |
|
|
Rationalization charges |
|
|
1,258 |
|
|
|
647 |
|
|
|
2,995 |
|
|
|
1,655 |
|
|
Acquisition related
costs |
|
|
145 |
|
|
|
— |
|
|
|
437 |
|
|
|
— |
|
|
Operating profit, as adjusted |
|
$ |
42,199 |
|
|
$ |
27,437 |
|
|
$ |
70,765 |
|
|
$ |
48,212 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin, as
reported |
|
|
8.6 |
|
% |
|
6.2 |
|
% |
|
4.1 |
|
% |
|
5.5 |
|
% |
Operating margin, as
adjusted |
|
|
8.9 |
|
% |
|
6.4 |
|
% |
|
7.7 |
|
% |
|
5.7 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Per Common Share Reconciliation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations before income taxes, as
reported |
|
$ |
37,897 |
|
|
$ |
25,480 |
|
|
$ |
33,171 |
|
|
$ |
43,649 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Significant legal settlement |
|
|
— |
|
|
|
— |
|
|
|
30,000 |
|
|
|
— |
|
|
Rationalization charges |
|
|
1,258 |
|
|
|
647 |
|
|
|
2,995 |
|
|
|
1,655 |
|
|
Acquisition related costs |
|
|
145 |
|
|
|
— |
|
|
|
437 |
|
|
|
— |
|
|
Loss on
extinguishment of debt |
|
|
1,086 |
|
|
|
— |
|
|
|
1,086 |
|
|
|
— |
|
|
Income from continuing operations before income taxes, as
adjusted |
|
|
40,386 |
|
|
|
26,127 |
|
|
|
67,689 |
|
|
|
45,304 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax at
38% rate |
|
|
(15,347 |
) |
|
|
(9,928 |
) |
|
|
(25,722 |
) |
|
|
(17,216 |
) |
|
Income from continuing operations, as
adjusted |
|
$ |
25,039 |
|
|
$ |
16,199 |
|
|
$ |
41,967 |
|
|
$ |
28,088 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income per common share, as adjusted |
|
$ |
0.67 |
|
|
$ |
0.43 |
|
|
$ |
1.12 |
|
|
$ |
0.74 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
diluted common shares outstanding |
|
|
37,191,299 |
|
|
|
37,976,703 |
|
|
|
37,404,193 |
|
|
|
37,938,108 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TopBuild
Corp. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same Branch Net
Sales and Adjusted EBITDA (Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30, |
|
|
Six Months Ended
June 30, |
|
|
|
|
2017 |
|
2016 |
|
|
2017 |
|
2016 |
|
|
Net
sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same branch |
|
$ |
453,648 |
|
$ |
431,589 |
|
|
$ |
887,425 |
|
$ |
845,613 |
|
|
Acquired |
|
|
20,810 |
|
|
— |
|
|
|
28,396 |
|
|
— |
|
|
Total |
|
$ |
474,458 |
|
$ |
431,589 |
|
|
$ |
915,821 |
|
$ |
845,613 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA, as
adjusted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same branch |
|
|
45,599 |
|
|
32,555 |
|
|
|
79,050 |
|
|
57,825 |
|
|
Acquired |
|
|
2,608 |
|
|
— |
|
|
|
3,037 |
|
|
— |
|
|
Total |
|
$ |
48,207 |
|
$ |
32,555 |
|
|
$ |
82,087 |
|
$ |
57,825 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same branch EBITDA, as
adjusted as percentage of sales change |
|
|
59.1 |
% |
33.3 |
% |
|
50.8 |
% |
28.8 |
% |
Acquired EBITDA, as
adjusted as percentage of sales change |
|
|
12.5 |
% |
— |
% |
|
10.7 |
% |
— |
% |
TopBuild
Corp. |
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
of EBITDA to Net Income (Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
(in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Net income, as
reported |
|
$ |
23,460 |
|
$ |
15,615 |
|
$ |
21,749 |
|
$ |
26,731 |
Adjustments to arrive
at EBITDA, as adjusted: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense and other, net |
|
|
1,813 |
|
|
1,310 |
|
|
3,076 |
|
|
2,908 |
Income
tax expense from continuing operations |
|
|
14,437 |
|
|
9,865 |
|
|
11,422 |
|
|
16,918 |
Depreciation and amortization |
|
|
3,605 |
|
|
3,013 |
|
|
6,835 |
|
|
5,908 |
Share-based compensation † |
|
|
2,403 |
|
|
2,105 |
|
|
4,487 |
|
|
3,705 |
Significant legal settlement |
|
|
— |
|
|
— |
|
|
30,000 |
|
|
— |
Rationalization charges |
|
|
1,258 |
|
|
647 |
|
|
2,995 |
|
|
1,655 |
Loss on
extinguishment of debt |
|
|
1,086 |
|
|
— |
|
|
1,086 |
|
|
— |
Acquisition related costs |
|
|
145 |
|
|
— |
|
|
437 |
|
|
— |
EBITDA, as
adjusted |
|
$ |
48,207 |
|
$ |
32,555 |
|
$ |
82,087 |
|
$ |
57,825 |
|
|
|
|
|
|
|
|
|
|
|
|
|
† Amounts for the three and six month periods ending June 30,
2017, exclude $0.6 million of share-based compensation included in
the line item, rationalization charges. |
|
|
|
|
|
|
|
|
|
|
|
|
|
Investor Relations and Media Contact
Tabitha Zane
tabitha.zane@topbuild.com
386-763-8801
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