TopBuild Corp. (NYSE:BLD), the leading purchaser,
installer and distributor of insulation products to the United
States construction industry, today reported results for the fourth
quarter ended December 31, 2017.
Jerry Volas, Chief Executive Officer, stated, “2017 was a year
of profitable growth for TopBuild. We remain focused on
generating top line growth, identifying additional opportunities
that complement our core residential insulation businesses and
improving operational efficiencies.
“Looking ahead, we are very optimistic the housing recovery will
continue to strengthen. Housing supply is tight, demand is
strong and household formations are increasing. TopBuild is
ideally situated to take advantage of this positive environment
through both our TruTeam and Service Partners segments which,
combined, are exposed to 95% of all housing starts.”
Fourth Quarter Financial Highlights
(unless otherwise indicated, comparisons are to
the quarter ended December 31, 2016)
- Net sales increased 12.9% to $501.4 million, driven by sales
volume growth and price increases in both operating segments as
well as through acquisitions. On a same branch basis, net sales
increased 8.3% to $479.6 million.
- Gross margin expanded 60 basis points to 24.3%.
- Operating profit was $50.0 million, compared to $35.9
million. On an adjusted basis, operating profit was $50.8
million, compared to $37.1 million, a 37.2% improvement.
- Operating margin was 10.0%, up 190 basis points. Adjusted
operating margin improved 180 basis points to 10.1%.
- Income from continuing operations was $47.8 million, or $2.93
per diluted share, compared to $34.7 million, or $0.57 per diluted
share. The Company noted that in the fourth quarter of 2017 it
recorded a one-time tax benefit of $74.1 million related to the
passage of the 2017 Tax Reform Bill.
- Adjusted income from continuing operations was $30.1 million,
or $0.84 per diluted share, compared to $22.2 million, or $0.59 per
diluted share.
- Adjusted EBITDA was $57.9 million, compared to $42.1 million, a
37.7% increase. Incremental EBITDA margin was 27.7%. On a
same branch basis, adjusted EBITDA was $55.0 million, a 31.3%
increase, and incremental EBITDA margin was 35.5%.
- The six acquisitions completed in 2017 contributed $21.8
million of revenue. Incremental EBITDA related to these
acquisitions was 13.6%.
- A one-time benefit of $74.1 million from the adjustment of the
Company’s deferred assets and liabilities was taken to reflect the
change in the federal tax rate.
- At December 31, 2017, the Company had cash and cash
equivalents of $56.5 million, availability under its revolving
credit facility of $203.0 million and $100.0 million available
under a delayed draw term loan for total liquidity of $359.5
million.
Full Year 2017 Financial Highlights
(unless otherwise indicated, comparisons are to
twelve months ended December 31, 2016)
- Net sales increased 9.4% to $1,906.3 million. On a same branch
basis, revenue increased 5.2% to $1,831.6 million.
- Gross margin expanded 120 basis points to 24.2%.
- Operating profit was $136.9 million, compared to operating
profit of $121.6 million. On an adjusted basis, operating
profit was $171.9 million, compared to $124.9 million, a 37.6%
improvement.
- Operating margin was 7.2%, up 20 basis points. Adjusted
operating margin improved 180 basis points to 9.0%.
- Income from continuing operations was $128.0 million, or $4.32
per diluted share, compared to $116.3 million, or $1.92 per diluted
share. Adjusted income from continuing operations was $164.1
million, or $2.78 per diluted share, compared to $119.5 million, or
$1.96 per diluted share.
- Adjusted EBITDA was $197.6 million, compared to $144.5 million,
a 36.7% increase. Incremental EBITDA margin was 32.5%. On a
same branch basis, adjusted EBITDA grew 30.1% to $187.7 million and
incremental EBITDA margin was 47.7%.
- The six acquisitions completed in 2017 contributed $74.6
million of revenue. Incremental EBITDA related to these
acquisitions was 13.3%.
Operating Segment Highlights
($ in 000s)(comparisons are to the period ended
December 31, 2016)
|
|
TruTeam |
3 Months Ended 12/31/17 |
12 Months Ended 12/31/17 |
|
Service Partners |
3 Months Ended 12/31/17 |
12 Months Ended 12/31/17 |
|
Sales |
$336,188 |
$1,281,296 |
|
Sales |
$193,306 |
$719,759 |
|
Change |
16.2% |
11.4% |
|
Change |
9.0% |
6.4% |
|
Operating Margin |
12.6% |
8.5% |
|
Operating Margin |
9.3% |
9.5% |
|
Change |
270 bps |
10 bps |
|
Change |
10 bps |
70 bps |
|
Adj. Operating Margin |
12.7% |
11.0% |
|
Adj. Operating Margin |
9.3% |
9.6% |
|
Change |
270 bps |
240 bps |
|
Change |
0 bps |
70 bps |
|
Capital Allocation
AcquisitionsIn 2017, the
Company completed six acquisitions that are expected to generate
approximately $83 million of net annual revenue. The
companies acquired included two heavy commercial and four
residential installation firms.
In 2018, through February 26, the Company has
completed two acquisitions that are expected to generate
approximately $31.6 million of net revenue.
Volas stated, “Strategic acquisitions remain a top priority and
we are encouraged by our robust pipeline of prospects. Since
implementing our acquisition program in 2016, we have acquired six
residential insulation firms, two heavy commercial insulation
companies and an insulation products distributor. Combined,
these nine acquisitions are expected to contribute over $120
million of annual revenue.”
Share RepurchasesIn 2017 the
Company repurchased a total of 2.4 million shares of its common
stock for approximately $139.3 million. This includes the
receipt of approximately 1.5 million shares from Bank of America
Merrill Lynch related to its previously announced $100 million
accelerated share repurchase (“ASR”) program. The ASR is
expected to settle no later than the end of the first quarter of
2018.
2017 Revenue and Adjusted EBITDA
Outlook
|
|
2018 |
Low |
High |
|
|
Revenue |
$2,050M |
$2,115M |
|
|
Adjusted EBITDA |
$222M |
$242M |
|
|
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
2018 results to differ materially from TopBuild’s current
expectations are discussed below and are also detailed in the
Company’s 2017 Annual Report on Form 10-K and subsequent SEC
reports.
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 fourth quarter 2017 financial results is scheduled
for today, Tuesday, February 27, at 9:30 a.m. Eastern Time.
The call may be accessed by dialing (800) 920-2997. 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 the leading purchaser,
installer and distributor of insulation products and other building
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
MeasuresEBITDA, 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 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
TopBuild
Corp. |
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Statements of Operations |
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands,
except common share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31, |
|
Year Ended
December 31, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Net
sales |
|
$ |
501,401 |
|
|
$ |
444,135 |
|
|
$ |
1,906,266 |
|
|
$ |
1,742,850 |
|
Cost of
sales |
|
|
379,368 |
|
|
|
339,073 |
|
|
|
1,445,157 |
|
|
|
1,342,506 |
|
Gross
profit |
|
|
122,033 |
|
|
|
105,062 |
|
|
|
461,109 |
|
|
|
400,344 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling,
general, and administrative expense (exclusive of significant legal
settlement, shown separately below) |
|
|
72,063 |
|
|
|
69,118 |
|
|
|
294,245 |
|
|
|
278,740 |
|
Significant legal settlement |
|
|
— |
|
|
|
— |
|
|
|
30,000 |
|
|
|
— |
|
Operating
profit |
|
|
49,970 |
|
|
|
35,944 |
|
|
|
136,864 |
|
|
|
121,604 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
income (expense), net: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense |
|
|
(2,252 |
) |
|
|
(1,293 |
) |
|
|
(8,019 |
) |
|
|
(5,608 |
) |
Loss on
extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
|
(1,086 |
) |
|
|
— |
|
Other,
net |
|
|
42 |
|
|
|
77 |
|
|
|
281 |
|
|
|
277 |
|
Other
expense, net |
|
|
(2,210 |
) |
|
|
(1,216 |
) |
|
|
(8,824 |
) |
|
|
(5,331 |
) |
Income
from continuing operations before income taxes |
|
|
47,760 |
|
|
|
34,728 |
|
|
|
128,040 |
|
|
|
116,273 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
tax benefit (expense) from continuing operations |
|
|
57,231 |
|
|
|
(13,421 |
) |
|
|
30,093 |
|
|
|
(43,667 |
) |
Income
from continuing operations |
|
|
104,991 |
|
|
|
21,307 |
|
|
|
158,133 |
|
|
|
72,606 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income |
|
$ |
104,991 |
|
|
$ |
21,307 |
|
|
$ |
158,133 |
|
|
$ |
72,606 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic: |
|
|
|
|
|
|
|
|
|
|
|
|
Income
from continuing operations |
|
$ |
3.00 |
|
|
$ |
0.57 |
|
|
$ |
4.41 |
|
|
$ |
1.93 |
|
Net
income |
|
$ |
3.00 |
|
|
$ |
0.57 |
|
|
$ |
4.41 |
|
|
$ |
1.93 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
Income
from continuing operations |
|
$ |
2.93 |
|
|
$ |
0.57 |
|
|
$ |
4.32 |
|
|
$ |
1.92 |
|
Net
income |
|
$ |
2.93 |
|
|
$ |
0.57 |
|
|
$ |
4.32 |
|
|
$ |
1.92 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TopBuild
Corp. |
|
|
|
|
|
|
|
Condensed Consolidated Balance Sheets and Other Financial
Data (Unaudited) |
|
|
|
|
|
|
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
As of |
|
|
|
December 31, |
|
December 31, |
|
|
|
2017 |
|
2016 |
|
ASSETS |
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
56,521 |
|
$ |
134,375 |
|
Receivables, net of an allowance for doubtful accounts of $3,673
and $3,374 at December 31, 2017, and December 31, 2016,
respectively |
|
|
308,508 |
|
|
252,624 |
|
Inventories, net |
|
|
131,342 |
|
|
116,190 |
|
Prepaid
expenses and other current assets |
|
|
15,221 |
|
|
23,364 |
|
Total
current assets |
|
|
511,592 |
|
|
526,553 |
|
|
|
|
|
|
|
|
|
Property and equipment, net |
|
|
107,121 |
|
|
92,760 |
|
Goodwill |
|
|
1,077,186 |
|
|
1,045,058 |
|
Other
intangible assets, net |
|
|
33,243 |
|
|
2,656 |
|
Deferred tax assets, net |
|
|
18,129 |
|
|
19,469 |
|
Other
assets |
|
|
2,278 |
|
|
3,623 |
|
Total
assets |
|
$ |
1,749,549 |
|
$ |
1,690,119 |
|
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Accounts
payable |
|
$ |
263,814 |
|
$ |
241,534 |
|
Current
portion of long-term debt |
|
|
12,500 |
|
|
20,000 |
|
Accrued
liabilities |
|
|
75,087 |
|
|
64,399 |
|
Total
current liabilities |
|
|
351,401 |
|
|
325,933 |
|
|
|
|
|
|
|
|
|
Long-term debt |
|
|
229,387 |
|
|
158,800 |
|
Deferred tax liabilities, net |
|
|
132,840 |
|
|
193,715 |
|
Long-term portion of insurance reserves |
|
|
36,160 |
|
|
38,691 |
|
Other
liabilities |
|
|
3,242 |
|
|
433 |
|
Total
liabilities |
|
|
753,030 |
|
|
717,572 |
|
|
|
|
|
|
|
|
|
EQUITY |
|
|
996,519 |
|
|
972,547 |
|
Total
liabilities and equity |
|
$ |
1,749,549 |
|
$ |
1,690,119 |
|
|
|
|
|
|
|
|
|
|
|
As
of |
|
|
|
December 31, |
|
December 31, |
|
|
|
2017 |
|
2016 |
|
Other Financial Data |
|
|
|
|
|
|
|
Working Capital Days† |
|
|
|
|
|
|
|
Receivable days |
|
|
50 |
|
|
46 |
|
Inventory
days |
|
|
33 |
|
|
31 |
|
Accounts
payable days |
|
|
79 |
|
|
82 |
|
Working
capital |
|
$ |
176,036 |
|
$ |
127,280 |
|
Working
capital as a percent of sales (LTM)‡ |
|
|
9.1 |
% |
|
7.3 |
% |
|
|
|
|
|
|
|
|
† Adjusted for
remaining acquisition day one balance sheet items |
|
|
|
|
|
|
|
‡ Last 12 months sales
have been adjusted for the pro forma effect of acquired
branches |
|
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|
|
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|
|
|
|
|
|
|
|
TopBuild
Corp. |
|
|
|
|
|
|
Condensed
Consolidated Statements of Cash Flows (Unaudited) |
|
|
|
|
|
|
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31, |
|
|
2017 |
|
2016 |
Net Cash
Provided by (Used in) Operating Activities: |
|
|
|
|
|
|
Net income |
|
$ |
158,133 |
|
|
$ |
72,606 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
|
16,453 |
|
|
|
12,011 |
|
Share-based compensation |
|
|
9,889 |
|
|
|
7,669 |
|
Loss on
extinguishment of debt |
|
|
1,086 |
|
|
|
— |
|
Loss on
sale or abandonment of property and equipment |
|
|
998 |
|
|
|
2,737 |
|
Amortization of debt issuance costs |
|
|
401 |
|
|
|
343 |
|
Amortization of contingent consideration |
|
|
149 |
|
|
|
— |
|
Provision
for bad debt expense |
|
|
3,231 |
|
|
|
3,292 |
|
Loss from
inventory obsolescence |
|
|
1,979 |
|
|
|
1,343 |
|
Deferred
income taxes, net |
|
|
(59,535 |
) |
|
|
13,540 |
|
Changes
in certain assets and liabilities: |
|
|
|
|
|
|
Receivables, net |
|
|
(37,943 |
) |
|
|
(19,953 |
) |
Inventories, net |
|
|
(14,901 |
) |
|
|
1,370 |
|
Prepaid
expenses and other current assets |
|
|
8,184 |
|
|
|
(10,102 |
) |
Accounts
payable |
|
|
17,936 |
|
|
|
(11,698 |
) |
Accrued
liabilities |
|
|
7,160 |
|
|
|
3,633 |
|
Other,
net |
|
|
(28 |
) |
|
|
(6 |
) |
Net cash
provided by operating activities |
|
|
113,192 |
|
|
|
76,785 |
|
|
|
|
|
|
|
|
Cash Flows
Provided by (Used in) Investing Activities: |
|
|
|
|
|
|
Purchases
of property and equipment |
|
|
(25,308 |
) |
|
|
(14,156 |
) |
Acquisition of businesses |
|
|
(84,090 |
) |
|
|
(3,476 |
) |
Proceeds
from sale of property and equipment |
|
|
603 |
|
|
|
718 |
|
Other,
net |
|
|
199 |
|
|
|
113 |
|
Net cash
used in investing activities |
|
|
(108,596 |
) |
|
|
(16,801 |
) |
|
|
|
|
|
|
|
Cash Flows
Provided by (Used in) Financing Activities: |
|
|
|
|
|
|
Net
transfer from Former Parent |
|
|
— |
|
|
|
664 |
|
Proceeds
from issuance of long-term debt |
|
|
250,000 |
|
|
|
— |
|
Repayment
of long-term debt |
|
|
(186,250 |
) |
|
|
(15,000 |
) |
Payment
of debt issuance costs |
|
|
(2,150 |
) |
|
|
— |
|
Proceeds
from revolving credit facility |
|
|
225,000 |
|
|
|
— |
|
Repayments of revolving credit facility |
|
|
(225,000 |
) |
|
|
— |
|
Taxes
withheld and paid on employees' equity awards |
|
|
(4,764 |
) |
|
|
(1,825 |
) |
Repurchase of shares of common stock |
|
|
(139,286 |
) |
|
|
(22,296 |
) |
Net cash
(used in) provided by financing activities |
|
|
(82,450 |
) |
|
|
(38,457 |
) |
|
|
|
|
|
|
|
Cash and Cash Equivalents |
|
|
|
|
|
|
(Decrease) increase for the period |
|
|
(77,854 |
) |
|
|
21,527 |
|
Beginning
of year |
|
|
134,375 |
|
|
|
112,848 |
|
End of
year |
|
$ |
56,521 |
|
|
$ |
134,375 |
|
|
|
|
|
|
|
|
Supplemental disclosure
of noncash investing activities: |
|
|
|
|
|
|
Accruals
for property and equipment |
|
$ |
1,123 |
|
|
$ |
387 |
|
|
|
|
|
|
|
|
TopBuild
Corp. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Data (Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(dollars in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31, |
|
|
|
|
|
Year Ended
December 31, |
|
|
|
|
|
|
2017 |
|
2016 |
|
Change |
|
|
2017 |
|
2016 |
|
Change |
|
Installation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales |
|
$ |
336,188 |
|
|
$ |
289,244 |
|
|
|
16.2 |
% |
|
$ |
1,281,296 |
|
|
$ |
1,150,168 |
|
|
|
11.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit, as reported |
|
$ |
42,331 |
|
|
$ |
28,641 |
|
|
|
|
|
|
$ |
109,316 |
|
|
$ |
97,140 |
|
|
|
|
|
Operating
margin, as reported |
|
|
12.6 |
|
% |
|
9.9 |
|
% |
|
|
|
|
|
8.5 |
|
% |
|
8.4 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Significant legal settlement |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
30,000 |
|
|
|
— |
|
|
|
|
|
Rationalization charges |
|
|
336 |
|
|
|
202 |
|
|
|
|
|
|
|
1,056 |
|
|
|
1,211 |
|
|
|
|
|
Operating
profit, as adjusted |
|
$ |
42,667 |
|
|
$ |
28,843 |
|
|
|
|
|
|
$ |
140,372 |
|
|
$ |
98,351 |
|
|
|
|
|
Operating
margin, as adjusted |
|
|
12.7 |
|
% |
|
10.0 |
|
% |
|
|
|
|
|
11.0 |
|
% |
|
8.6 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distribution |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales |
|
$ |
193,306 |
|
|
$ |
177,404 |
|
|
|
9.0 |
% |
|
$ |
719,759 |
|
|
$ |
676,672 |
|
|
|
6.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit, as reported |
|
$ |
17,927 |
|
|
$ |
16,238 |
|
|
|
|
|
|
$ |
68,733 |
|
|
$ |
59,654 |
|
|
|
|
|
Operating
margin, as reported |
|
|
9.3 |
|
% |
|
9.2 |
|
% |
|
|
|
|
|
9.5 |
|
% |
|
8.8 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rationalization charges |
|
|
— |
|
|
|
173 |
|
|
|
|
|
|
|
23 |
|
|
|
256 |
|
|
|
|
|
Operating
profit, as adjusted |
|
$ |
17,927 |
|
|
$ |
16,411 |
|
|
|
|
|
|
$ |
68,756 |
|
|
$ |
59,910 |
|
|
|
|
|
Operating
margin, as adjusted |
|
|
9.3 |
|
% |
|
9.3 |
|
% |
|
|
|
|
|
9.6 |
|
% |
|
8.9 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
before eliminations |
|
$ |
529,494 |
|
|
$ |
466,648 |
|
|
|
|
|
|
$ |
2,001,055 |
|
|
$ |
1,826,840 |
|
|
|
|
|
Intercompany eliminations |
|
|
(28,093 |
) |
|
|
(22,513 |
) |
|
|
|
|
|
|
(94,789 |
) |
|
|
(83,990 |
) |
|
|
|
|
Net sales
after eliminations |
|
$ |
501,401 |
|
|
$ |
444,135 |
|
|
|
12.9 |
% |
|
$ |
1,906,266 |
|
|
$ |
1,742,850 |
|
|
|
9.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit, as reported - segment |
|
$ |
60,258 |
|
|
$ |
44,879 |
|
|
|
|
|
|
$ |
178,049 |
|
|
$ |
156,794 |
|
|
|
|
|
General
corporate expense, net |
|
|
(5,218 |
) |
|
|
(5,084 |
) |
|
|
|
|
|
|
(24,722 |
) |
|
|
(20,802 |
) |
|
|
|
|
Intercompany eliminations and other adjustments |
|
|
(5,070 |
) |
|
|
(3,851 |
) |
|
|
|
|
|
|
(16,463 |
) |
|
|
(14,388 |
) |
|
|
|
|
Operating
profit, as reported |
|
$ |
49,970 |
|
|
$ |
35,944 |
|
|
|
|
|
|
$ |
136,864 |
|
|
$ |
121,604 |
|
|
|
|
|
Operating
margin, as reported |
|
|
10.0 |
|
% |
|
8.1 |
|
% |
|
|
|
|
|
7.2 |
|
% |
|
7.0 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Significant legal settlement |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
30,000 |
|
|
|
— |
|
|
|
|
|
Rationalization charges† |
|
|
356 |
|
|
|
1,049 |
|
|
|
|
|
|
|
3,755 |
|
|
|
3,139 |
|
|
|
|
|
Acquisition related costs |
|
|
508 |
|
|
|
69 |
|
|
|
|
|
|
|
1,256 |
|
|
|
124 |
|
|
|
|
|
Operating
profit, as adjusted |
|
$ |
50,834 |
|
|
$ |
37,062 |
|
|
|
|
|
|
$ |
171,875 |
|
|
$ |
124,867 |
|
|
|
|
|
Operating
margin, as adjusted |
|
|
10.1 |
|
% |
|
8.3 |
|
% |
|
|
|
|
|
9.0 |
|
% |
|
7.2 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation ‡ |
|
|
2,415 |
|
|
|
1,926 |
|
|
|
|
|
|
|
9,274 |
|
|
|
7,669 |
|
|
|
|
|
Depreciation and amortization |
|
|
4,700 |
|
|
|
3,088 |
|
|
|
|
|
|
|
16,453 |
|
|
|
12,011 |
|
|
|
|
|
EBITDA,
as adjusted |
|
$ |
57,949 |
|
|
$ |
42,076 |
|
|
|
|
|
|
$ |
197,602 |
|
|
$ |
144,547 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
change period over period |
|
|
57,266 |
|
|
|
|
|
|
|
|
|
|
163,416 |
|
|
|
|
|
|
|
|
EBITDA,
as adjusted change period over period |
|
|
15,873 |
|
|
|
|
|
|
|
|
|
|
53,055 |
|
|
|
|
|
|
|
|
EBITDA,
as adjusted as percentage of sales change |
|
|
27.7 |
|
% |
|
|
|
|
|
|
|
|
32.5 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
† Rationalization charges include corporate level adjustments
as well as segment operating adjustments. |
|
|
|
|
|
|
|
|
|
|
‡ 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. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TopBuild
Corp. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Reconciliations (Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands,
except common share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31, |
|
Year Ended
December 31, |
|
|
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
Gross Profit and Operating Profit
Reconciliations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales |
|
$ |
501,401 |
|
|
$ |
444,135 |
|
|
$ |
1,906,266 |
|
|
$ |
1,742,850 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit, as reported |
|
$ |
122,033 |
|
|
$ |
105,062 |
|
|
$ |
461,109 |
|
|
$ |
400,344 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit, as adjusted |
|
$ |
122,033 |
|
|
$ |
105,062 |
|
|
$ |
461,109 |
|
|
$ |
400,344 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
margin, as reported |
|
|
24.3 |
|
% |
|
23.7 |
|
% |
|
24.2 |
|
% |
|
23.0 |
|
% |
|
Gross
margin, as adjusted |
|
|
24.3 |
|
% |
|
23.7 |
|
% |
|
24.2 |
|
% |
|
23.0 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit, as reported |
|
$ |
49,970 |
|
|
$ |
35,944 |
|
|
$ |
136,864 |
|
|
$ |
121,604 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Significant legal settlement |
|
|
— |
|
|
|
— |
|
|
|
30,000 |
|
|
|
— |
|
|
|
Rationalization charges |
|
|
356 |
|
|
|
1,049 |
|
|
|
3,755 |
|
|
|
3,139 |
|
|
|
Acquisition related
costs |
|
|
508 |
|
|
|
69 |
|
|
|
1,256 |
|
|
|
124 |
|
|
|
Operating profit, as adjusted |
|
$ |
50,834 |
|
|
$ |
37,062 |
|
|
$ |
171,875 |
|
|
$ |
124,867 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin, as
reported |
|
|
10.0 |
|
% |
|
8.1 |
|
% |
|
7.2 |
|
% |
|
7.0 |
|
% |
|
Operating margin, as
adjusted |
|
|
10.1 |
|
% |
|
8.3 |
|
% |
|
9.0 |
|
% |
|
7.2 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Per Common Share Reconciliation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations before income taxes, as
reported |
|
$ |
47,760 |
|
|
$ |
34,728 |
|
|
$ |
128,040 |
|
|
$ |
116,273 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Significant legal settlement |
|
|
— |
|
|
|
— |
|
|
|
30,000 |
|
|
|
— |
|
|
|
Rationalization charges |
|
|
356 |
|
|
|
1,049 |
|
|
|
3,755 |
|
|
|
3,139 |
|
|
|
Acquisition related costs |
|
|
508 |
|
|
|
69 |
|
|
|
1,256 |
|
|
|
124 |
|
|
|
Loss on
extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
|
1,086 |
|
|
|
— |
|
|
|
Income from continuing operations before income taxes, as
adjusted |
|
|
48,624 |
|
|
|
35,846 |
|
|
|
164,137 |
|
|
|
119,536 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax at
38% rate |
|
|
(18,477 |
) |
|
|
(13,621 |
) |
|
|
(62,372 |
) |
|
|
(45,424 |
) |
|
|
Income from continuing operations, as
adjusted |
|
$ |
30,147 |
|
|
$ |
22,225 |
|
|
$ |
101,765 |
|
|
$ |
74,112 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income per common share, as adjusted |
|
$ |
0.84 |
|
|
$ |
0.59 |
|
|
$ |
2.78 |
|
|
$ |
1.96 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
diluted common shares outstanding |
|
|
35,772,124 |
|
|
|
37,644,065 |
|
|
|
36,572,146 |
|
|
|
37,867,212 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TopBuild
Corp. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same Branch Net
Sales and Adjusted EBITDA (Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(dollars in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31, |
|
|
Year Ended
December 31, |
|
|
|
2017 |
|
2016 |
|
|
2017 |
|
2016 |
|
Net
sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same branch |
|
$ |
479,593 |
|
$ |
442,688 |
|
|
$ |
1,831,641 |
|
$ |
1,740,731 |
|
Acquired |
|
|
21,808 |
|
|
1,447 |
|
|
|
74,625 |
|
|
2,119 |
|
Total |
|
$ |
501,401 |
|
$ |
444,135 |
|
|
$ |
1,906,266 |
|
$ |
1,742,850 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA, as
adjusted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same branch |
|
$ |
55,006 |
|
$ |
41,900 |
|
|
$ |
187,708 |
|
$ |
144,330 |
|
Acquired |
|
|
2,943 |
|
|
176 |
|
|
|
9,894 |
|
|
217 |
|
Total |
|
$ |
57,949 |
|
$ |
42,076 |
|
|
$ |
197,602 |
|
$ |
144,547 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same branch EBITDA, as
adjusted as percentage of sales change |
|
|
35.5 |
% |
24.2 |
% |
|
47.7 |
% |
29.7 |
% |
Acquired EBITDA, as
adjusted as percentage of sales change |
|
|
13.6 |
% |
12.2 |
% |
|
13.3 |
% |
10.2 |
% |
|
|
|
TopBuild
Corp. |
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
of EBITDA to Net Income (Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
(dollars in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31, |
|
Year Ended
December 31, |
|
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
Net income, as
reported |
|
$ |
104,991 |
|
|
$ |
21,307 |
|
$ |
158,133 |
|
|
$ |
72,606 |
|
Adjustments to arrive
at EBITDA, as adjusted: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense and other, net |
|
|
2,210 |
|
|
|
1,216 |
|
|
7,738 |
|
|
|
5,331 |
|
Income
tax (benefit) expense from continuing operations |
|
|
(57,231 |
) |
|
|
13,421 |
|
|
(30,093 |
) |
|
|
43,667 |
|
Depreciation and amortization |
|
|
4,700 |
|
|
|
3,088 |
|
|
16,453 |
|
|
|
12,011 |
|
Share-based compensation † |
|
|
2,415 |
|
|
|
1,926 |
|
|
9,274 |
|
|
|
7,669 |
|
Significant legal settlement |
|
|
— |
|
|
|
— |
|
|
30,000 |
|
|
|
— |
|
Rationalization charges |
|
|
356 |
|
|
|
1,049 |
|
|
3,755 |
|
|
|
3,139 |
|
Loss on
extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
1,086 |
|
|
|
— |
|
Acquisition related costs |
|
|
508 |
|
|
|
69 |
|
|
1,256 |
|
|
|
124 |
|
EBITDA, as
adjusted |
|
$ |
57,949 |
|
|
$ |
42,076 |
|
$ |
197,602 |
|
|
$ |
144,547 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
† 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. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TopBuild
Corp. |
|
|
|
|
|
|
2018 Estimated
Adjusted EBITDA Range (Unaudited) |
|
|
|
|
|
|
(dollars in
millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ending December 31,
2018 |
|
|
Low |
|
High |
|
Estimated net
income |
$ |
126.0 |
|
$ |
145.6 |
|
Adjustments to arrive at estimated EBITDA, as adjusted: |
|
|
|
|
|
|
Interest
expense and other, net |
|
13.6 |
|
|
12.0 |
|
Income
tax expense from continuing operations |
|
46.6 |
|
|
53.8 |
|
Depreciation and amortization |
|
21.7 |
|
|
18.5 |
|
Share-based compensation |
|
14.1 |
|
|
12.1 |
|
Estimated
EBITDA, as adjusted |
$ |
222.0 |
|
$ |
242.0 |
|
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