Net Sales Increased 27.7%$0.76 Income Per Diluted
Share$1.03 Income 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, 2018.
Jerry Volas, Chief Executive Officer, stated,
“We had another strong quarter with sales benefitting from the
continued growth in residential and commercial construction. Our
team remains focused on profitable growth which includes
successfully managing the multiple supplier cost increases
announced this year.
“As a result of the USI acquisition, our
national footprint is even stronger, particularly in many of the
fastest growing markets. With over 10,000 employees,
including almost 7,000 installers, we are well-positioned to take
advantage of the continued strength in residential new
construction.”
Second Quarter Financial Highlights
(unless otherwise indicated, comparisons are to
the quarter ended June 30, 2017)
- Net sales increased 27.7% to $606.0 million, primarily driven
by acquisitions, sales volume growth and increased selling prices
in both operating segments. Of the 27.7% revenue growth, same
branch contributed 10.5%.
- Gross margin, impacted by higher material cost, declined 70
basis points to 23.9%. On an adjusted basis, gross margin
declined 60 basis points to 24.0%.
- Operating profit was $43.7 million, compared to operating
profit of $40.8 million. On an adjusted basis, operating
profit was $57.8 million, compared to $42.2 million, a 37.0%
improvement.
- Operating margin was 7.2%, down 140 basis points.
Adjusted operating margin improved 60 basis points to
9.5%.
- Adjusted EBITDA was $70.6 million, compared to $48.2 million, a
46.4% increase, and adjusted EBITDA margin improved 140 basis
points to 11.6%. Incremental EBITDA margin was
17.0%. On a same branch basis, adjusted EBITDA was
$59.9 million, a 31.4% increase, and incremental EBITDA margin was
23.6%.
- Net income was $27.2 million, or $0.76 per diluted share,
compared to $23.5 million, or $0.63 per diluted share. Adjusted
income was $36.9 million, or $1.03 per diluted share, compared to
$25.0 million, or $0.67 per diluted share.
- The five acquisitions completed over the past 12 months
contributed $81.9 million of revenue. Incremental EBITDA
related to acquisitions was 13.0%.
- At June 30, 2018, the Company had cash and cash equivalents of
$65.7 million and availability under its revolving credit facility
of $190.7 million for total liquidity of $256.4 million.
Six Month Financial Highlights
(unless otherwise indicated, comparisons are to
six months ended June 30, 2017)
- Net sales increased 19.8% to $1,097.4 million. On a same branch
basis, revenue increased 12.1% to $994.9 million.
- On both a reported and adjusted basis, gross margin declined 50
basis points to 23.3%.
- Operating profit was $77.6 million, compared to operating
profit of $37.3 million. On an adjusted basis,
operating profit was $96.0 million, compared to $70.8 million, a
35.6% improvement.
- Operating margin was 7.1%. On an adjusted basis,
operating margin improved 100 basis points to 8.7%.
- Net income was $53.5 million, or $1.49 per diluted share,
compared to $21.7 million, or $0.58 per diluted share.
Adjusted income was $63.1 million, or $1.76 per diluted share,
compared to $42.0 million, or $1.12 per diluted share.
- Adjusted EBITDA was $116.6 million, compared to $82.1 million,
a 42.0% increase. Adjusted EBITDA margin was 10.6%, a
160-basis point improvement, and incremental EBITDA margin was
19.0%. On a same branch basis, adjusted EBITDA grew 32.4% to
$104.7 million and incremental EBITDA margin was 28.6%.
Operating Segment Highlights
($ in 000s)(comparisons are to the period ended
June 30, 2017)
TruTeam |
3 Months Ended 6/30/18 |
6 Months Ended 6/30/18 |
|
Service Partners |
3 Months Ended 6/30/18 |
6 Months Ended 6/30/18 |
Sales |
$429,423 |
$758,817 |
|
Sales |
$205,621 |
$393,387 |
Change |
33.8% |
24.0% |
|
Change |
17.5% |
13.9% |
Operating Margin |
11.6% |
10.4% |
|
Operating Margin |
9.7% |
9.6% |
Change |
70 bps |
610 bps |
|
Change |
0 bps |
20 bps |
Adj. Operating Margin |
11.6% |
10.5% |
|
Adj. Operating Margin |
9.7% |
9.6% |
Change |
60 bps |
120 bps |
|
Change |
0 bps |
20 bps |
Capital
AllocationAcquisitions In the second
quarter, the Company acquired USI, a leading provider of insulation
installation and distribution services to the residential and
commercial construction markets, for a purchase price of $475
million. The transaction was financed with proceeds from a
$400 million 5.625% Senior Notes offering which closed on April
25th and a $100 million delayed-draw term loan that was available
under the Company’s existing secured credit facility.
Volas stated, “The integration of USI is
proceeding very well and their operating performance was consistent
with our initial expectations. Our team is focused on making
the transition as seamless as possible for our customers, employees
and suppliers. We continue to expect at least $15 million in
cost saving synergies and have begun exploring cross selling
opportunities.
“Acquisitions remain our number one capital
allocation priority and we continue to look for opportunities that
will enhance our customer value proposition, market share and
earnings growth.”
Year-to-date, the Company has closed three
acquisitions which, combined, are expected to generate
approximately $410 million of incremental annual revenue.
2018 Revenue and Adjusted EBITDA
Outlook
|
|
|
2018 |
Low |
High |
Revenue |
$2,358M |
$2,398M |
Adjusted EBITDA |
$269M |
$284M |
|
|
|
Assumptions:
- 2018 housing starts between 1.260k and 1.280k
- Eight months of revenue from USI with $2M to $4M of cost
savings synergies
- $75 million of incremental revenue for every 50,000 increase in
new housing starts
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 second quarter 2018 financial results is scheduled
for today, Tuesday, August 7, at 9:00 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 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 205
branches, and through Service Partners® which distributes
insulation from over 75 branches. We leverage our national
footprint to gain economies of scale while capitalizing on our
local market presence to forge strong relationships with our
customers. To learn more about TopBuild please visit our
website at www.topbuild.com.
Use of Non-GAAP Financial
Measures EBITDA, incremental EBITDA margin, 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
ContactTabitha Zanetabitha.zane@topbuild.com
386-763-8801
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, |
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
Net
sales |
$ |
605,969 |
|
|
$ |
474,458 |
|
|
$ |
1,097,412 |
|
|
$ |
915,821 |
|
Cost of
sales |
|
460,928 |
|
|
|
357,849 |
|
|
|
841,353 |
|
|
|
697,584 |
|
Gross
profit |
|
145,041 |
|
|
|
116,609 |
|
|
|
256,059 |
|
|
|
218,237 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling,
general, and administrative expense (exclusive of significant legal
settlement, shown separately below) |
|
101,360 |
|
|
|
75,813 |
|
|
|
178,486 |
|
|
|
150,904 |
|
Significant legal settlement |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
30,000 |
|
Operating
profit |
|
43,681 |
|
|
|
40,796 |
|
|
|
77,573 |
|
|
|
37,333 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
income (expense), net: |
|
|
|
|
|
|
|
|
|
|
|
Interest
expense |
|
(7,322 |
) |
|
|
(1,918 |
) |
|
|
(9,645 |
) |
|
|
(3,288 |
) |
Loss on
extinguishment of debt |
|
— |
|
|
|
(1,086 |
) |
|
|
— |
|
|
|
(1,086 |
) |
Other,
net |
|
82 |
|
|
|
105 |
|
|
|
115 |
|
|
|
212 |
|
Other
expense, net |
|
(7,240 |
) |
|
|
(2,899 |
) |
|
|
(9,530 |
) |
|
|
(4,162 |
) |
Income
before income taxes |
|
36,441 |
|
|
|
37,897 |
|
|
|
68,043 |
|
|
|
33,171 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
tax expense |
|
(9,288 |
) |
|
|
(14,437 |
) |
|
|
(14,503 |
) |
|
|
(11,422 |
) |
Net
income |
$ |
27,153 |
|
|
$ |
23,460 |
|
|
$ |
53,540 |
|
|
$ |
21,749 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common share: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.77 |
|
|
$ |
0.64 |
|
|
$ |
1.53 |
|
|
$ |
0.59 |
|
Diluted |
$ |
0.76 |
|
|
$ |
0.63 |
|
|
$ |
1.49 |
|
|
$ |
0.58 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
35,102,429 |
|
|
|
36,488,222 |
|
|
|
35,081,292 |
|
|
|
36,803,979 |
|
Diluted |
|
35,837,102 |
|
|
|
37,191,299 |
|
|
|
35,828,290 |
|
|
|
37,404,193 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TopBuild
Corp. |
|
|
|
|
|
|
Condensed
Consolidated Balance Sheets and Other Financial Data
(Unaudited) |
|
|
|
|
|
|
(dollars in thousands) |
|
|
|
|
|
|
|
As of |
|
|
June 30, |
|
December 31, |
|
|
2018 |
|
2017 |
|
ASSETS |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and
cash equivalents |
$ |
65,737 |
|
$ |
56,521 |
|
Receivables, net of an allowance for doubtful accounts of $3,303
and $3,673 at June 30, 2018, and December 31, 2017,
respectively |
|
396,220 |
|
|
308,508 |
|
Inventories, net |
|
158,495 |
|
|
131,342 |
|
Prepaid
expenses and other current assets |
|
23,929 |
|
|
15,221 |
|
Total
current assets |
|
644,381 |
|
|
511,592 |
|
|
|
|
|
|
|
|
Property and equipment, net |
|
159,265 |
|
|
107,121 |
|
Goodwill |
|
1,362,861 |
|
|
1,077,186 |
|
Other
intangible assets, net |
|
210,345 |
|
|
33,243 |
|
Deferred tax assets, net |
|
17,634 |
|
|
18,129 |
|
Other
assets |
|
6,130 |
|
|
2,278 |
|
Total
assets |
$ |
2,400,616 |
|
$ |
1,749,549 |
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts
payable |
$ |
283,708 |
|
$ |
263,814 |
|
Current
portion of long-term debt - term loan |
|
17,500 |
|
|
12,500 |
|
Current
portion of long-term debt - equipment notes |
|
2,800 |
|
|
— |
|
Accrued
liabilities |
|
108,951 |
|
|
75,087 |
|
Total
current liabilities |
|
412,959 |
|
|
351,401 |
|
|
|
|
|
|
|
|
Long-term debt - term loan |
|
315,926 |
|
|
229,387 |
|
Long-term debt - equipment notes |
|
11,734 |
|
|
— |
|
Long-term debt - Senior Notes |
|
393,666 |
|
|
— |
|
Deferred tax liabilities, net |
|
168,590 |
|
|
132,840 |
|
Long-term portion of insurance reserves |
|
43,925 |
|
|
36,160 |
|
Other
liabilities |
|
2,891 |
|
|
3,242 |
|
Total
liabilities |
|
1,349,691 |
|
|
753,030 |
|
|
|
|
|
|
|
|
EQUITY |
|
1,050,925 |
|
|
996,519 |
|
Total
liabilities and equity |
$ |
2,400,616 |
|
$ |
1,749,549 |
|
|
|
|
|
|
|
|
|
As
of |
|
|
June 30, |
|
June 30, |
|
|
2018 |
|
2017 |
|
Other Financial Data |
|
|
|
|
|
|
Receivable days † |
|
45 |
|
|
45 |
|
Inventory
days † |
|
31 |
|
|
29 |
|
Accounts
payable days † |
|
66 |
|
|
83 |
|
Receivables, net plus inventories, net less accounts payable † |
$ |
271,007 |
|
$ |
165,965 |
|
Receivables, net plus inventories, net less accounts payable as a
percent of sales (TTM)‡ |
|
11.1 |
% |
|
8.8 |
% |
|
|
|
|
|
|
|
† Adjusted for
remaining acquisition day one balance sheet items |
|
|
|
|
|
|
‡ Trailing 12 months
sales have been adjusted for the pro forma effect of acquired
branches |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TopBuild
Corp. |
|
|
|
|
|
Consolidated
Statement of Cash Flows |
|
|
|
|
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30, |
|
2018 |
|
2017 |
Net Cash
Provided by (Used in) Operating Activities: |
|
|
|
|
|
Net income |
$ |
53,540 |
|
|
$ |
21,749 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
|
Depreciation and amortization |
|
15,185 |
|
|
|
6,835 |
|
Share-based compensation |
|
5,397 |
|
|
|
5,101 |
|
Loss on
extinguishment of debt |
|
— |
|
|
|
1,086 |
|
Loss on
sale or abandonment of property and equipment |
|
487 |
|
|
|
285 |
|
Amortization of debt issuance costs |
|
422 |
|
|
|
186 |
|
Change in
fair value of contingent consideration |
|
123 |
|
|
|
— |
|
Provision
for bad debt expense |
|
1,672 |
|
|
|
1,750 |
|
Loss from
inventory obsolescence |
|
928 |
|
|
|
826 |
|
Deferred
income taxes, net |
|
375 |
|
|
|
— |
|
Change in
certain assets and liabilities |
|
|
|
|
|
Receivables, net |
|
(22,382 |
) |
|
|
(25,123 |
) |
Inventories, net |
|
(11,517 |
) |
|
|
5,908 |
|
Prepaid
expenses and other current assets |
|
(5,363 |
) |
|
|
7 |
|
Accounts
payable |
|
220 |
|
|
|
(3,124 |
) |
Accrued
liabilities |
|
2,901 |
|
|
|
9,787 |
|
Other,
net |
|
(595 |
) |
|
|
398 |
|
Net cash
provided by operating activities |
|
41,393 |
|
|
|
25,671 |
|
|
|
|
|
|
|
Cash Flows
Provided by (Used in) Investing Activities: |
|
|
|
|
|
Purchases
of property and equipment |
|
(27,521 |
) |
|
|
(8,571 |
) |
Acquisition of businesses, net of cash acquired of $15,756 in
2018 |
|
(499,050 |
) |
|
|
(83,932 |
) |
Proceeds
from sale of property and equipment |
|
427 |
|
|
|
126 |
|
Other,
net |
|
23 |
|
|
|
147 |
|
Net cash
used in investing activities |
|
(526,121 |
) |
|
|
(92,230 |
) |
|
|
|
|
|
|
Cash Flows
Provided by (Used in) Financing Activities: |
|
|
|
|
|
Proceeds
from issuance of Senior Notes |
|
400,000 |
|
|
|
— |
|
Proceeds
from issuance of term loan |
|
100,000 |
|
|
|
250,000 |
|
Repayments of term loan |
|
(7,500 |
) |
|
|
(180,000 |
) |
Proceeds
from equipment notes |
|
15,066 |
|
|
|
— |
|
Repayments of equipment notes |
|
(533 |
) |
|
|
— |
|
Proceeds
from revolving credit facility |
|
90,000 |
|
|
|
— |
|
Repayment
of revolving credit facility |
|
(90,000 |
) |
|
|
— |
|
Payment
of debt issuance costs |
|
(7,717 |
) |
|
|
(2,150 |
) |
Taxes
withheld and paid on employees' equity awards |
|
(4,531 |
) |
|
|
(2,147 |
) |
Repurchase of shares of common stock |
|
— |
|
|
|
(39,286 |
) |
Payment
of contingent consideration |
|
(841 |
) |
|
|
— |
|
Net cash
provided by financing activities |
|
493,944 |
|
|
|
26,417 |
|
|
|
|
|
|
|
Cash and Cash Equivalents |
|
|
|
|
|
Increase
(decrease) for the period |
|
9,216 |
|
|
|
(40,142 |
) |
Beginning
of year |
|
56,521 |
|
|
|
134,375 |
|
End of
period |
$ |
65,737 |
|
|
$ |
94,233 |
|
|
|
|
|
|
|
Supplemental disclosure
of noncash investing activities: |
|
|
|
|
|
Accruals
for property and equipment |
$ |
864 |
|
|
$ |
655 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TopBuild
Corp. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Data (Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(dollars in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30, |
|
|
|
|
Six Months
Ended
June 30, |
|
|
|
|
|
2018 |
|
|
2017 |
|
Change |
|
|
|
2018 |
|
|
2017 |
|
Change |
|
Installation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales |
$ |
429,423 |
|
$ |
320,984 |
|
33.8 |
% |
|
$ |
758,817 |
|
$ |
611,870 |
|
24.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit, as reported |
$ |
49,635 |
|
$ |
35,086 |
|
|
|
|
$ |
78,965 |
|
$ |
26,123 |
|
|
|
Operating
margin, as reported |
|
11.6 |
% |
|
10.9 |
% |
|
|
|
|
10.4 |
%
|
|
4.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Significant legal settlement |
|
— |
|
|
— |
|
|
|
|
|
— |
|
|
30,000 |
|
|
|
Rationalization charges |
|
236 |
|
|
171 |
|
|
|
|
|
453 |
|
|
582 |
|
|
|
Operating
profit, as adjusted |
$ |
49,871 |
|
$ |
35,257 |
|
|
|
|
$ |
79,418 |
|
$ |
56,705 |
|
|
|
Operating
margin, as adjusted |
|
11.6 |
% |
|
11.0 |
% |
|
|
|
|
10.5 |
% |
|
9.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distribution |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales |
$ |
205,621 |
|
$ |
175,062 |
|
17.5 |
% |
|
$ |
393,387 |
|
$ |
345,306 |
|
13.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit, as reported |
$ |
20,009 |
|
$ |
17,022 |
|
|
|
|
$ |
37,912 |
|
$ |
32,506 |
|
|
|
Operating
margin, as reported |
|
9.7 |
% |
|
9.7 |
% |
|
|
|
|
9.6 |
% |
|
9.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rationalization charges |
|
— |
|
|
17 |
|
|
|
|
|
25 |
|
|
17 |
|
|
|
Operating
profit, as adjusted |
$ |
20,009 |
|
$ |
17,039 |
|
|
|
|
$ |
37,937 |
|
$ |
32,523 |
|
|
|
Operating
margin, as adjusted |
|
9.7 |
% |
|
9.7 |
% |
|
|
|
|
9.6 |
% |
|
9.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
before eliminations |
$ |
635,044 |
|
$ |
496,046 |
|
|
|
|
$ |
1,152,204 |
|
$ |
957,176 |
|
|
|
Intercompany eliminations |
|
(29,075 |
) |
|
(21,588 |
) |
|
|
|
|
(54,792 |
) |
|
(41,355 |
) |
|
|
Net sales
after eliminations |
$ |
605,969 |
|
$ |
474,458 |
|
27.7 |
% |
|
$ |
1,097,412 |
|
$ |
915,821 |
|
19.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit, as reported - segment |
$ |
69,644 |
|
$ |
52,108 |
|
|
|
|
$ |
116,877 |
|
$ |
58,629 |
|
|
|
General
corporate expense, net |
|
(20,686 |
) |
|
(7,632 |
) |
|
|
|
|
(29,579 |
) |
|
(14,316 |
) |
|
|
Intercompany eliminations and other adjustments |
|
(5,277 |
) |
|
(3,680 |
) |
|
|
|
|
(9,725 |
) |
|
(6,980 |
) |
|
|
Operating
profit, as reported |
$ |
43,681 |
|
$ |
40,796 |
|
|
|
|
$ |
77,573 |
|
$ |
37,333 |
|
|
|
Operating
margin, as reported |
|
7.2 |
% |
|
8.6 |
% |
|
|
|
|
7.1 |
% |
|
4.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Significant legal settlement |
|
— |
|
|
— |
|
|
|
|
|
— |
|
|
30,000 |
|
|
|
Rationalization charges † |
|
4,341 |
|
|
1,258 |
|
|
|
|
|
5,138 |
|
|
2,995 |
|
|
|
Acquisition related costs |
|
9,799 |
|
|
145 |
|
|
|
|
|
13,281 |
|
|
437 |
|
|
|
Operating
profit, as adjusted |
$ |
57,821 |
|
$ |
42,199 |
|
|
|
|
$ |
95,992 |
|
$ |
70,765 |
|
|
|
Operating
margin, as adjusted |
|
9.5 |
% |
|
8.9 |
% |
|
|
|
|
8.7 |
% |
|
7.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation ‡ |
|
2,995 |
|
|
2,403 |
|
|
|
|
|
5,397 |
|
|
4,487 |
|
|
|
Depreciation and amortization |
|
9,743 |
|
|
3,605 |
|
|
|
|
|
15,185 |
|
|
6,835 |
|
|
|
EBITDA,
as adjusted |
$ |
70,559 |
|
$ |
48,207 |
|
|
|
|
$ |
116,574 |
|
$ |
82,087 |
|
|
|
EBITDA
margin, as adjusted |
|
11.6 |
% |
|
10.2 |
% |
|
|
|
|
10.6 |
% |
|
9.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
change period over period |
|
131,511 |
|
|
|
|
|
|
|
|
181,591 |
|
|
|
|
|
|
EBITDA,
as adjusted, change period over period |
|
22,352 |
|
|
|
|
|
|
|
|
34,487 |
|
|
|
|
|
|
EBITDA,
as adjusted, as percentage of sales change |
|
17.0 |
% |
|
|
|
|
|
|
|
19.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
† 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 share and per common share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30, |
|
Six Months
Ended
June 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
Gross Profit and Operating Profit
Reconciliations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales |
$ |
605,969 |
|
$ |
474,458 |
|
$ |
1,097,412 |
|
$ |
915,821 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit, as reported |
$ |
145,041 |
|
$ |
116,609 |
|
$ |
256,059 |
|
$ |
218,237 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rationalization
charges |
|
155 |
|
|
— |
|
|
155 |
|
|
— |
|
Gross profit, as adjusted |
$ |
145,196 |
|
$ |
116,609 |
|
$ |
256,214 |
|
$ |
218,237 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
margin, as reported |
|
23.9 |
% |
|
24.6 |
% |
|
23.3 |
% |
|
23.8 |
% |
Gross
margin, as adjusted |
|
24.0 |
% |
|
24.6 |
% |
|
23.3 |
% |
|
23.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit, as reported |
$ |
43,681 |
|
$ |
40,796 |
|
$ |
77,573 |
|
$ |
37,333 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Significant legal settlement |
|
— |
|
|
— |
|
|
— |
|
|
30,000 |
|
Rationalization charges |
|
4,341 |
|
|
1,258 |
|
|
5,138 |
|
|
2,995 |
|
Acquisition related
costs |
|
9,799 |
|
|
145 |
|
|
13,281 |
|
|
437 |
|
Operating profit, as adjusted |
$ |
57,821 |
|
$ |
42,199 |
|
$ |
95,992 |
|
$ |
70,765 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin, as
reported |
|
7.2 |
% |
|
8.6 |
% |
|
7.1 |
% |
|
4.1 |
% |
Operating margin, as
adjusted |
|
9.5 |
% |
|
8.9 |
% |
|
8.7 |
% |
|
7.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Per Common Share Reconciliation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes, as reported |
$ |
36,441 |
|
$ |
37,897 |
|
$ |
68,043 |
|
$ |
33,171 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Significant legal settlement |
|
— |
|
|
— |
|
|
— |
|
|
30,000 |
|
Rationalization charges |
|
4,341 |
|
|
1,258 |
|
|
5,138 |
|
|
2,995 |
|
Acquisition related costs |
|
9,799 |
|
|
145 |
|
|
13,281 |
|
|
437 |
|
Loss on
extinguishment of debt |
|
— |
|
|
1,086 |
|
|
— |
|
|
1,086 |
|
Income before income taxes, as adjusted |
|
50,581 |
|
|
40,386 |
|
|
86,462 |
|
|
67,689 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax rate
at 27% and 38% for 2018 and 2017, respectively |
|
(13,657 |
) |
|
(15,347 |
) |
|
(23,345 |
) |
|
(25,722 |
) |
Income, as adjusted |
$ |
36,924 |
|
$ |
25,039 |
|
$ |
63,117 |
|
$ |
41,967 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income per common share, as adjusted |
$ |
1.03 |
|
$ |
0.67 |
|
$ |
1.76 |
|
$ |
1.12 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average diluted common shares outstanding |
|
35,837,102 |
|
|
37,191,299 |
|
|
35,828,290 |
|
|
37,404,193 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TopBuild
Corp. |
|
|
|
|
|
|
|
|
|
|
|
|
Same Branch Net
Sales and Adjusted EBITDA (Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
(dollars in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
Net
sales |
|
|
|
|
|
|
|
|
|
|
|
|
Same branch |
$ |
524,067 |
|
$ |
453,648 |
|
$ |
994,942 |
|
$ |
887,425 |
|
Acquired |
|
81,902 |
|
|
20,810 |
|
|
102,470 |
|
|
28,396 |
|
Total |
$ |
605,969 |
|
$ |
474,458 |
|
$ |
1,097,412 |
|
$ |
915,821 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA, as
adjusted |
|
|
|
|
|
|
|
|
|
|
|
|
Same branch |
$ |
59,933 |
|
$ |
45,599 |
|
$ |
104,690 |
|
$ |
79,050 |
|
Acquired |
|
10,626 |
|
|
2,608 |
|
|
11,884 |
|
|
3,037 |
|
Total |
$ |
70,559 |
|
$ |
48,207 |
|
$ |
116,574 |
|
$ |
82,087 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in total EBITDA,
as adjusted, as percentage of total sales change |
|
17.0 |
% |
|
36.5 |
% |
|
19.0 |
% |
|
34.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in same branch
EBITDA, as adjusted, as percentage of same branch sales change |
|
20.4 |
% |
|
59.1 |
% |
|
23.8 |
% |
|
50.8 |
% |
Change in acquired
EBITDA, as adjusted, as percentage of acquired sales change |
|
13.1 |
% |
|
12.5 |
% |
|
11.9 |
% |
|
10.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Same branch change in
EBITDA, as adjusted, and total prior year EBITDA (inclusive of
prior year acquired EBITDA), as adjusted, as a percentage of
the change in current period same branch sales and total prior year
sales (inclusive of prior year acquired sales) |
|
23.6 |
% |
|
59.1 |
% |
|
28.6 |
% |
|
50.8 |
% |
Acquired EBITDA, as
adjusted, as a percentage of acquired sales |
|
13.0 |
% |
|
12.5 |
% |
|
11.6 |
% |
|
10.7 |
% |
|
|
|
|
|
|
|
|
|
TopBuild
Corp. |
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
of EBITDA to Net Income (Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
(in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Net income, as
reported |
$ |
27,153 |
|
$ |
23,460 |
|
$ |
53,540 |
|
$ |
21,749 |
Adjustments to arrive
at EBITDA, as adjusted:
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense and other, net |
|
7,240 |
|
|
1,813 |
|
|
9,530 |
|
|
3,076 |
Income
tax expense |
|
9,288 |
|
|
14,437 |
|
|
14,503 |
|
|
11,422 |
Depreciation and amortization |
|
9,743 |
|
|
3,605 |
|
|
15,185 |
|
|
6,835 |
Share-based compensation † |
|
2,995 |
|
|
2,403 |
|
|
5,397 |
|
|
4,487 |
Significant legal settlement |
|
— |
|
|
— |
|
|
— |
|
|
30,000 |
Rationalization charges |
|
4,341 |
|
|
1,258 |
|
|
5,138 |
|
|
2,995 |
Loss on
extinguishment of debt |
|
— |
|
|
1,086 |
|
|
— |
|
|
1,086 |
Acquisition related costs |
|
9,799 |
|
|
145 |
|
|
13,281 |
|
|
437 |
EBITDA, as
adjusted |
$ |
70,559 |
|
$ |
48,207 |
|
$ |
116,574 |
|
$ |
82,087 |
|
|
|
|
|
|
|
|
|
|
|
|
† 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. |
|
|
|
|
|
2018 Estimated
Adjusted EBITDA Range (Unaudited) |
|
|
|
|
|
(dollars in
millions) |
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ending December 31,
2018 |
|
Low |
|
High |
Estimated net
income |
$ |
117.7 |
|
$ |
134.7 |
Adjustments to arrive at estimated EBITDA, as adjusted:
|
|
|
|
|
|
Interest
expense and other, net |
|
29.7 |
|
|
28.1 |
Income
tax expense |
|
43.5 |
|
|
49.9 |
Depreciation and amortization |
|
39.5 |
|
|
36.3 |
Share-based compensation |
|
12.8 |
|
|
11.7 |
Rationalization charges |
|
11.5 |
|
|
9.5 |
Acquisition related costs |
|
14.3 |
|
|
13.8 |
Estimated
EBITDA, as adjusted |
$ |
269.0 |
|
$ |
284.0 |
|
|
|
|
|
|
TopBuild (NYSE:BLD)
Historical Stock Chart
From Sep 2024 to Oct 2024
TopBuild (NYSE:BLD)
Historical Stock Chart
From Oct 2023 to Oct 2024