TopBuild Corp. (NYSE:BLD), a
leading installer and distributor of insulation and building
material products today reported results for the second quarter
ended June 30, 2019.
Jerry Volas, Chief Executive Officer, stated, “TopBuild reported
another strong quarter, led by TruTeam’s growth in both commercial
and residential new construction. Operating margins at
TruTeam and Service Partners expanded as we continue to drive
operational efficiencies throughout our Company.
“Once again, our results demonstrate the strengths of our
uniquely diversified business model, along with our focus on
profitable growth. We look forward to a solid second half of
the year.”
Second Quarter Financial Highlights
(unless otherwise indicated, comparisons are to
the quarter ended June 30, 2018)
- Net sales increased 8.9% to $660.1 million, primarily driven by
acquisitions and increased selling prices in both operating
segments. Same branch contributed 95.2% of total
revenue.
- Gross margin increased 260 basis points to 26.5%.
- Operating profit was $76.0 million, compared to operating
profit of $43.7 million. On an adjusted basis, operating
profit was $76.4 million, compared to $57.8 million, a 32.2%
improvement.
- Operating margin was 11.5%, up 430 basis points. Adjusted
operating margin improved 210 basis points to 11.6%.
- Net income was $52.1 million, or $1.51 per diluted share,
compared to $27.2 million, or $0.76 per diluted share. Adjusted
income was $49.5 million, or $1.43 per diluted share, compared to
$36.9 million, or $1.03 per diluted share.
- Adjusted EBITDA was $94.0 million, compared to $70.6 million, a
33.2% increase, and adjusted EBITDA margin improved 260 basis
points to 14.2%.
- Incremental EBITDA margin was 43.3%. On a same
branch basis, adjusted EBITDA was $87.7 million, a 24.3% increase,
and incremental EBITDA margin was 76.3%.
- At June 30, 2019, the Company had cash and cash equivalents of
$141.8 million and availability under its revolving credit facility
of $187.1 million for total liquidity of $328.9 million.
Six Month Financial Highlights
(unless otherwise indicated, comparisons are to
six months ended June 30, 2018)
- Net sales increased 16.6% to $1,279.4 million. On a same branch
basis, revenue increased 5.2% to $1,154.5 million.
- Gross margin expanded 250 basis points to 25.8%.
- Operating profit was $132.7 million, compared to operating
profit of $77.6 million. On an adjusted basis,
operating profit was $135.5 million, compared to $96.0 million, a
41.2% improvement.
- Operating margin was 10.4%. On an adjusted basis,
operating margin improved 190 basis points to 10.6%.
- Net income was $90.0 million, or $2.60 per diluted share,
compared to $53.5 million, or $1.49 per diluted share.
Adjusted income was $86.1 million, or $2.49 per diluted share,
compared to $63.1 million, or $1.76 per diluted share.
- Adjusted EBITDA was $168.6 million, compared to $116.6 million,
a 44.6% increase. Adjusted EBITDA margin was 13.2%, a
260-basis point improvement.
- Incremental EBITDA margin was 28.6%. On a same branch
basis, adjusted EBITDA grew 24.3% to $144.9 million and incremental
EBITDA margin was 49.5%.
Operating Segment Highlights
($ in 000s)(comparisons are to the period ended
June 30, 2018)
TruTeam |
3 MonthsEnded6/30/19 |
6 MonthsEnded6/30/19 |
|
Service Partners |
3 MonthsEnded6/30/19 |
6 MonthsEnded6/30/19 |
Sales |
$ |
483,028 |
|
$ |
932,410 |
|
|
Sales |
$ |
213,487 |
|
$ |
417,951 |
|
Change |
|
|
|
Change |
|
|
Volume |
|
1.4 |
% |
|
2.7 |
% |
|
Volume |
|
(2.6 |
%) |
|
(2.5 |
%) |
Price |
|
4.3 |
% |
|
5.1 |
% |
|
Price |
|
5.1 |
% |
|
5.9 |
% |
M&A |
|
6.8 |
% |
|
15.1 |
% |
|
M&A |
|
1.3 |
% |
|
2.8 |
% |
Total Change |
|
12.5 |
% |
|
22.9 |
% |
|
Total Change |
|
3.8 |
% |
|
6.2 |
% |
Operating Margin |
|
14.2 |
% |
|
12.8 |
% |
|
Operating Margin |
|
9.9 |
% |
|
10.0 |
% |
Change |
|
260 |
bps |
|
240 |
bps |
|
Change |
|
20 |
bps |
|
40 |
bps |
Adj. Operating Margin |
|
14.2 |
% |
|
12.9 |
% |
|
Adj. Operating Margin |
|
9.9 |
% |
|
10.0 |
% |
Change |
|
260 |
bps |
|
240 |
bps |
|
Change |
|
20 |
bps |
|
40 |
bps |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
AllocationAcquisitionsOn July 15, the
Company acquired Viking Insulation based in Burbank,
California. Viking focuses on fiberglass installation in a
wide variety of light commercial and residential projects.
For the trailing twelve months ended March 31, 2019, Viking
generated approximately $9.0 million in revenue.
Volas stated, “Viking Insulation is an outstanding addition to
TruTeam. Viking has operated in Southern California for 35
years with strong customer relationships throughout the
region. Acquisitions remain our top capital allocation
priority. Our dedicated M&A team is working with a
healthy pipeline of prospects, some of which we expect will become
valuable additions to TopBuild over the next several quarters.”
Share RepurchasesIn the second quarter of 2019,
the Company repurchased 196,885 shares at an average price of
$75.57 per share. These shares were purchased as part of the
Company’s $200 million share repurchase authorization announced on
February 26, 2019. As of June 30, 2019, approximately $180
million of the $200 million authorization remained.
2019 Revenue and Adjusted EBITDA OutlookThe
Company has lowered its outlook for housing starts for 2019 to a
range of 1.23 million to 1.27 million from the previous range of
1.26 million to 1.3 million starts. Accordingly, the high end
of the Company’s revenue outlook has been lowered by $30 million
while the low end of its revenue range remains unchanged. The
Company has also raised the low and high end of its adjusted EBITDA
outlook by $15 million and $5 million,
respectively.
|
|
|
2019 |
Low |
High |
Revenue |
$2,610M |
$2,640M |
Adjusted EBITDA* |
$345M |
$355M |
*See table below
for adjusted EBITDA reconciliation |
|
|
Assumptions ($ in millions): |
2019 |
Low |
High |
Housing Starts |
1,230K |
1,270K |
Estimated net income |
$ |
170.5 |
$ |
185.6 |
Interest Expense and other, net |
$ |
38.9 |
$ |
35.9 |
Income tax expense |
$ |
61.5 |
$ |
66.9 |
Depreciation and Amortization |
$ |
54.0 |
$ |
50.0 |
Share based compensation |
$ |
14.6 |
$ |
12.1 |
|
|
|
|
|
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 2019 results
to differ materially from TopBuild’s current expectations are
discussed below and are also detailed in the Company’s 2018 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 2019 financial results is scheduled
for today, Thursday, August 1, at 9:00 a.m. Eastern Time. The
call may be accessed by dialing (888) 225-2706. The
conference call will be webcast simultaneously on the “Investors”
section of the Company’s website at www.topbuild.com.
About TopBuildTopBuild Corp., a Fortune 1000
Company headquartered in Daytona Beach, Florida, is a leading
installer and distributor of insulation and building material
products to the U.S. construction industry. We provide insulation
and building material services nationwide through TruTeam®, which
has close to 200 branches, and through Service Partners® which
distributes insulation and building material products 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, adjusted
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. |
Condensed
Consolidated Statements of Operations (Unaudited) |
(in
thousands, except share and per common share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
Net sales |
$ |
660,112 |
|
|
$ |
605,969 |
|
|
$ |
1,279,442 |
|
|
$ |
1,097,412 |
|
Cost of sales |
|
485,190 |
|
|
|
460,928 |
|
|
|
948,824 |
|
|
|
841,353 |
|
Gross profit |
|
174,922 |
|
|
|
145,041 |
|
|
|
330,618 |
|
|
|
256,059 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general, and
administrative expense |
|
98,883 |
|
|
|
101,360 |
|
|
|
197,960 |
|
|
|
178,486 |
|
Operating profit |
|
76,039 |
|
|
|
43,681 |
|
|
|
132,658 |
|
|
|
77,573 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense),
net: |
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
(9,631 |
) |
|
|
(7,322 |
) |
|
|
(19,232 |
) |
|
|
(9,645 |
) |
Other, net |
|
526 |
|
|
|
82 |
|
|
|
858 |
|
|
|
115 |
|
Other expense, net |
|
(9,105 |
) |
|
|
(7,240 |
) |
|
|
(18,374 |
) |
|
|
(9,530 |
) |
Income before income
taxes |
|
66,934 |
|
|
|
36,441 |
|
|
|
114,284 |
|
|
|
68,043 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
(14,883 |
) |
|
|
(9,288 |
) |
|
|
(24,249 |
) |
|
|
(14,503 |
) |
Net income |
$ |
52,051 |
|
|
$ |
27,153 |
|
|
$ |
90,035 |
|
|
$ |
53,540 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common
share: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
1.53 |
|
|
$ |
0.77 |
|
|
$ |
2.64 |
|
|
$ |
1.53 |
|
Diluted |
$ |
1.51 |
|
|
$ |
0.76 |
|
|
$ |
2.60 |
|
|
$ |
1.49 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
33,976,169 |
|
|
|
35,102,429 |
|
|
|
34,072,314 |
|
|
|
35,081,292 |
|
Diluted |
|
34,557,664 |
|
|
|
35,837,102 |
|
|
|
34,630,048 |
|
|
|
35,828,290 |
|
|
|
|
|
|
|
|
|
|
TopBuild
Corp. |
|
|
|
|
|
|
|
Condensed Consolidated
Balance Sheets and Other Financial Data (Unaudited) |
|
|
|
|
|
|
|
(dollars in
thousands) |
|
|
|
|
|
|
|
|
|
|
As of |
|
|
June 30, |
|
|
December 31, |
|
|
2019 |
|
|
2018 |
|
ASSETS |
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
141,767 |
|
|
$ |
100,929 |
|
Receivables, net of an allowance for doubtful accounts of $5,199
and $3,676 at June 30, 2019, and December 31, 2018,
respectively |
|
444,823 |
|
|
|
407,106 |
|
Inventories, net |
|
150,282 |
|
|
|
168,977 |
|
Prepaid expenses and other current assets |
|
11,416 |
|
|
|
27,685 |
|
Total current assets |
|
748,288 |
|
|
|
704,697 |
|
|
|
|
|
|
|
|
|
Right of use assets |
|
90,735 |
|
|
|
— |
|
Property and equipment, net |
|
172,719 |
|
|
|
167,961 |
|
Goodwill |
|
1,363,738 |
|
|
|
1,364,016 |
|
Other intangible assets, net |
|
189,041 |
|
|
|
199,387 |
|
Deferred tax assets, net |
|
12,033 |
|
|
|
13,176 |
|
Other assets |
|
4,569 |
|
|
|
5,294 |
|
Total assets |
$ |
2,581,123 |
|
|
$ |
2,454,531 |
|
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Accounts payable |
$ |
288,985 |
|
|
$ |
313,172 |
|
Current portion of long-term debt |
|
32,261 |
|
|
|
26,852 |
|
Accrued liabilities |
|
100,282 |
|
|
|
104,236 |
|
Short-term lease liabilities |
|
36,527 |
|
|
|
— |
|
Total current liabilities |
|
458,055 |
|
|
|
444,260 |
|
|
|
|
|
|
|
|
|
Long-term debt |
|
705,626 |
|
|
|
716,622 |
|
Deferred tax liabilities,
net |
|
174,269 |
|
|
|
176,212 |
|
Long-term portion of insurance
reserves |
|
43,856 |
|
|
|
43,434 |
|
Long-term lease
liabilities |
|
57,312 |
|
|
|
— |
|
Other liabilities |
|
359 |
|
|
|
1,905 |
|
Total liabilities |
|
1,439,477 |
|
|
|
1,382,433 |
|
|
|
|
|
|
|
|
|
EQUITY |
|
1,141,646 |
|
|
|
1,072,098 |
|
Total liabilities and equity |
$ |
2,581,123 |
|
|
$ |
2,454,531 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of |
|
|
June 30, |
|
|
June 30, |
|
|
2019 |
|
|
2018 |
|
Other Financial
Data |
|
|
|
|
|
|
|
Receivable days † |
|
53 |
|
|
|
45 |
|
Inventory days † |
|
29 |
|
|
|
31 |
|
Accounts payable days † |
|
78 |
|
|
|
66 |
|
Receivables, net plus inventories, net less accounts payable † |
$ |
306,119 |
|
|
$ |
271,007 |
|
Receivables, net plus inventories, net less accounts payable as a
percent of sales (TTM)‡ |
|
11.9 |
% |
|
|
11.1 |
% |
|
|
|
|
|
|
|
|
† 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. |
|
|
|
|
|
Condensed Consolidated
Statements of Cash Flows (Unaudited) |
|
|
|
|
|
(dollars in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
|
|
2019 |
|
|
|
2018 |
|
Cash Flows Provided by
(Used in) Operating Activities: |
|
|
|
|
|
Net income |
$ |
90,035 |
|
|
$ |
53,540 |
|
Adjustments to reconcile net
income to net cash provided by operating activities: |
|
|
|
|
|
Depreciation and amortization |
|
25,538 |
|
|
|
15,185 |
|
Share-based compensation |
|
7,485 |
|
|
|
5,397 |
|
Loss on sale or abandonment of property and equipment |
|
561 |
|
|
|
487 |
|
Amortization of debt issuance costs |
|
779 |
|
|
|
422 |
|
Change in fair value of contingent consideration |
|
(50 |
) |
|
|
123 |
|
Provision for bad debt expense |
|
3,688 |
|
|
|
1,672 |
|
Loss from inventory obsolescence |
|
1,251 |
|
|
|
928 |
|
Deferred income taxes, net |
|
(21 |
) |
|
|
375 |
|
Change in certain assets and liabilities |
|
|
|
|
|
Receivables, net |
|
(41,489 |
) |
|
|
(22,382 |
) |
Inventories, net |
|
17,391 |
|
|
|
(11,517 |
) |
Prepaid expenses and other current assets |
|
14,969 |
|
|
|
(5,363 |
) |
Accounts payable |
|
(23,823 |
) |
|
|
220 |
|
Accrued liabilities |
|
(1,131 |
) |
|
|
2,901 |
|
Other, net |
|
1,081 |
|
|
|
(595 |
) |
Net cash provided by operating activities |
|
96,264 |
|
|
|
41,393 |
|
|
|
|
|
|
|
Cash Flows Provided by
(Used in) Investing Activities: |
|
|
|
|
|
Purchases of property and equipment |
|
(21,982 |
) |
|
|
(27,521 |
) |
Acquisition of businesses, net of cash acquired of $15,756 in
2018 |
|
— |
|
|
|
(499,050 |
) |
Proceeds from sale of property and equipment |
|
1,961 |
|
|
|
427 |
|
Other, net |
|
22 |
|
|
|
23 |
|
Net cash used in investing activities |
|
(19,999 |
) |
|
|
(526,121 |
) |
|
|
|
|
|
|
Cash Flows Provided by
(Used in) Financing Activities: |
|
|
|
|
|
Proceeds from issuance of long-term debt |
|
4,998 |
|
|
|
515,066 |
|
Repayment of long-term debt |
|
(11,364 |
) |
|
|
(8,033 |
) |
Payment of debt issuance costs |
|
— |
|
|
|
(7,717 |
) |
Proceeds from revolving credit facility |
|
— |
|
|
|
90,000 |
|
Repayment of revolving credit facility |
|
— |
|
|
|
(90,000 |
) |
Taxes withheld and paid on employees' equity awards |
|
(8,471 |
) |
|
|
(4,531 |
) |
Repurchase of shares of common stock |
|
(19,499 |
) |
|
|
— |
|
Payment of contingent consideration |
|
(1,091 |
) |
|
|
(841 |
) |
Net cash (used in) provided by financing activities |
|
(35,427 |
) |
|
|
493,944 |
|
|
|
|
|
|
|
Cash and Cash
Equivalents |
|
|
|
|
|
Increase for the period |
|
40,838 |
|
|
|
9,216 |
|
Beginning of period |
|
100,929 |
|
|
|
56,521 |
|
End of period |
$ |
141,767 |
|
|
$ |
65,737 |
|
|
|
|
|
|
|
Supplemental
disclosure of noncash activities: |
|
|
|
|
|
Leased assets obtained in exchange for new operating lease
liabilities |
$ |
110,192 |
|
|
$ |
— |
|
Accruals for property and equipment |
|
497 |
|
|
864 |
|
|
|
|
|
|
|
|
|
TopBuild
Corp. |
Segment
Data (Unaudited) |
(dollars
in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June
30, |
|
|
|
|
|
Six Months Ended June
30, |
|
|
|
|
2019 |
|
|
2018 |
|
|
Change |
|
|
2019 |
|
|
2018 |
|
|
Change |
|
TruTeam |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales |
$ |
483,028 |
|
|
$ |
429,423 |
|
|
|
12.5 |
% |
|
$ |
932,410 |
|
|
$ |
758,817 |
|
|
22.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit, as reported |
$ |
68,423 |
|
|
$ |
49,635 |
|
|
|
|
|
|
$ |
119,722 |
|
|
$ |
78,965 |
|
|
|
|
Operating margin, as reported |
|
14.2 |
|
% |
|
11.6 |
|
% |
|
|
|
|
|
12.8 |
|
% |
|
10.4 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rationalization charges |
|
81 |
|
|
|
236 |
|
|
|
|
|
|
|
199 |
|
|
|
453 |
|
|
|
|
Acquisition related costs |
|
277 |
|
|
|
— |
|
|
|
|
|
|
|
403 |
|
|
|
— |
|
|
|
|
Operating profit, as adjusted |
$ |
68,781 |
|
|
$ |
49,871 |
|
|
|
|
|
|
$ |
120,324 |
|
|
$ |
79,418 |
|
|
|
|
Operating margin, as adjusted |
|
14.2 |
|
% |
|
11.6 |
|
% |
|
|
|
|
|
12.9 |
|
% |
|
10.5 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service
Partners |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales |
$ |
213,487 |
|
|
$ |
205,621 |
|
|
|
3.8 |
% |
|
$ |
417,951 |
|
|
$ |
393,387 |
|
|
6.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit, as reported |
$ |
21,151 |
|
|
$ |
20,009 |
|
|
|
|
|
|
$ |
41,748 |
|
|
$ |
37,912 |
|
|
|
|
Operating margin, as reported |
|
9.9 |
|
% |
|
9.7 |
|
% |
|
|
|
|
|
10.0 |
|
% |
|
9.6 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rationalization charges |
|
— |
|
|
|
— |
|
|
|
|
|
|
|
109 |
|
|
|
25 |
|
|
|
|
Operating profit, as adjusted |
$ |
21,151 |
|
|
$ |
20,009 |
|
|
|
|
|
|
$ |
41,857 |
|
|
$ |
37,937 |
|
|
|
|
Operating margin, as adjusted |
|
9.9 |
|
% |
|
9.7 |
|
% |
|
|
|
|
|
10.0 |
|
% |
|
9.6 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales before eliminations |
$ |
696,515 |
|
|
$ |
635,044 |
|
|
|
|
|
|
$ |
1,350,361 |
|
|
$ |
1,152,204 |
|
|
|
|
Intercompany eliminations |
|
(36,403 |
) |
|
|
(29,075 |
) |
|
|
|
|
|
|
(70,919 |
) |
|
|
(54,792 |
) |
|
|
|
Net sales after eliminations |
$ |
660,112 |
|
|
$ |
605,969 |
|
|
|
8.9 |
% |
|
$ |
1,279,442 |
|
|
$ |
1,097,412 |
|
|
16.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit, as reported - segments |
$ |
89,574 |
|
|
$ |
69,644 |
|
|
|
|
|
|
$ |
161,470 |
|
|
$ |
116,877 |
|
|
|
|
General corporate expense, net |
|
(7,130 |
) |
|
|
(20,686 |
) |
|
|
|
|
|
|
(16,734 |
) |
|
|
(29,579 |
) |
|
|
|
Intercompany eliminations and other adjustments |
|
(6,405 |
) |
|
|
(5,277 |
) |
|
|
|
|
|
|
(12,078 |
) |
|
|
(9,725 |
) |
|
|
|
Operating profit, as reported |
$ |
76,039 |
|
|
$ |
43,681 |
|
|
|
|
|
|
$ |
132,658 |
|
|
$ |
77,573 |
|
|
|
|
Operating margin, as reported |
|
11.5 |
|
% |
|
7.2 |
|
% |
|
|
|
|
|
10.4 |
|
% |
|
7.1 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rationalization charges † |
|
142 |
|
|
|
4,341 |
|
|
|
|
|
|
|
1,969 |
|
|
|
5,138 |
|
|
|
|
Acquisition related costs |
|
251 |
|
|
|
9,799 |
|
|
|
|
|
|
|
903 |
|
|
|
13,281 |
|
|
|
|
Operating profit, as adjusted |
$ |
76,432 |
|
|
$ |
57,821 |
|
|
|
|
|
|
$ |
135,530 |
|
|
$ |
95,992 |
|
|
|
|
Operating margin, as adjusted |
|
11.6 |
|
% |
|
9.5 |
|
% |
|
|
|
|
|
10.6 |
|
% |
|
8.7 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation |
|
4,513 |
|
|
|
2,995 |
|
|
|
|
|
|
|
7,485 |
|
|
|
5,397 |
|
|
|
|
Depreciation and amortization |
|
13,062 |
|
|
|
9,743 |
|
|
|
|
|
|
|
25,538 |
|
|
|
15,185 |
|
|
|
|
EBITDA, as adjusted |
$ |
94,007 |
|
|
$ |
70,559 |
|
|
|
|
|
|
$ |
168,553 |
|
|
$ |
116,574 |
|
|
|
|
EBITDA margin, as adjusted |
|
14.2 |
|
% |
|
11.6 |
|
% |
|
|
|
|
|
13.2 |
|
% |
|
10.6 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales change period over period |
|
54,143 |
|
|
|
|
|
|
|
|
|
|
182,030 |
|
|
|
|
|
|
|
EBITDA, as adjusted, change period over period |
|
23,448 |
|
|
|
|
|
|
|
|
|
|
51,979 |
|
|
|
|
|
|
|
EBITDA, as adjusted, as percentage of sales change |
|
43.3 |
|
% |
|
|
|
|
|
|
|
|
28.6 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
† Rationalization
charges include corporate level adjustments as well as segment
operating adjustments. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
|
Gross Profit and
Operating Profit Reconciliations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales |
$ |
660,112 |
|
|
$ |
605,969 |
|
|
$ |
1,279,442 |
|
|
$ |
1,097,412 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit, as
reported |
$ |
174,922 |
|
|
$ |
145,041 |
|
|
$ |
330,618 |
|
|
$ |
256,059 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rationalization charges |
|
— |
|
|
|
155 |
|
|
|
— |
|
|
|
155 |
|
|
Gross profit, as
adjusted |
$ |
174,922 |
|
|
$ |
145,196 |
|
|
$ |
330,618 |
|
|
$ |
256,214 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin, as reported |
|
26.5 |
|
% |
|
23.9 |
|
% |
|
25.8 |
|
% |
|
23.3 |
|
% |
Gross margin, as adjusted |
|
26.5 |
|
% |
|
24.0 |
|
% |
|
25.8 |
|
% |
|
23.3 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit, as
reported |
$ |
76,039 |
|
|
$ |
43,681 |
|
|
$ |
132,658 |
|
|
$ |
77,573 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rationalization charges |
|
142 |
|
|
|
4,341 |
|
|
|
1,969 |
|
|
|
5,138 |
|
|
Acquisition related costs |
|
251 |
|
|
|
9,799 |
|
|
|
903 |
|
|
|
13,281 |
|
|
Operating profit, as
adjusted |
$ |
76,432 |
|
|
$ |
57,821 |
|
|
$ |
135,530 |
|
|
$ |
95,992 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin, as
reported |
|
11.5 |
|
% |
|
7.2 |
|
% |
|
10.4 |
|
% |
|
7.1 |
|
% |
Operating margin, as
adjusted |
|
11.6 |
|
% |
|
9.5 |
|
% |
|
10.6 |
|
% |
|
8.7 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Per Common
Share Reconciliation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes, as reported |
$ |
66,934 |
|
|
$ |
36,441 |
|
|
$ |
114,284 |
|
|
$ |
68,043 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rationalization charges |
|
142 |
|
|
|
4,341 |
|
|
|
1,969 |
|
|
|
5,138 |
|
|
Acquisition related costs |
|
251 |
|
|
|
9,799 |
|
|
|
903 |
|
|
|
13,281 |
|
|
Income before income
taxes, as adjusted |
|
67,327 |
|
|
|
50,581 |
|
|
|
117,156 |
|
|
|
86,462 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax rate at 26.5% and 27.0%
for 2019 and 2018, respectively |
|
(17,842 |
) |
|
|
(13,657 |
) |
|
|
(31,046 |
) |
|
|
(23,345 |
) |
|
Income, as
adjusted |
$ |
49,485 |
|
|
$ |
36,924 |
|
|
$ |
86,110 |
|
|
$ |
63,117 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income per common
share, as adjusted |
$ |
1.43 |
|
|
$ |
1.03 |
|
|
$ |
2.49 |
|
|
$ |
1.76 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average diluted
common shares outstanding |
|
34,557,664 |
|
|
|
35,837,102 |
|
|
|
34,630,048 |
|
|
|
35,828,290 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TopBuild
Corp. |
|
|
|
|
|
|
|
|
|
|
|
|
Same
Branch and Acquisition Net Sales and Adjusted EBITDA
(Unaudited) |
|
|
|
|
|
|
|
(dollars in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
|
Net
sales |
|
|
|
|
|
|
|
|
|
|
|
|
Same branch: |
|
|
|
|
|
|
|
|
|
|
|
|
Installation segment |
$ |
453,820 |
|
|
$ |
429,423 |
|
|
$ |
817,717 |
|
|
$ |
758,817 |
|
|
Distribution segment |
|
210,805 |
|
|
|
205,621 |
|
|
|
406,881 |
|
|
|
393,387 |
|
|
Eliminations |
|
(36,241 |
) |
|
|
(29,075 |
) |
|
|
(70,057 |
) |
|
|
(54,792 |
) |
|
Total same branch |
|
628,384 |
|
|
|
605,969 |
|
|
|
1,154,541 |
|
|
|
1,097,412 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisitions (a): |
|
|
|
|
|
|
|
|
|
|
|
|
Installation segment |
$ |
29,208 |
|
|
$ |
— |
|
|
$ |
114,693 |
|
|
$ |
— |
|
|
Distribution segment |
|
2,682 |
|
|
|
— |
|
|
|
11,070 |
|
|
|
— |
|
|
Eliminations |
|
(162 |
) |
|
|
— |
|
|
|
(862 |
) |
|
|
— |
|
|
Total acquisitions |
|
31,728 |
|
|
|
— |
|
|
|
124,901 |
|
|
|
— |
|
|
Total |
$ |
660,112 |
|
|
$ |
605,969 |
|
|
$ |
1,279,442 |
|
|
$ |
1,097,412 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA, as
adjusted |
|
|
|
|
|
|
|
|
|
|
|
|
Same branch |
$ |
87,671 |
|
|
$ |
70,559 |
|
|
$ |
144,875 |
|
|
$ |
116,574 |
|
|
Acquisitions (a) |
|
6,336 |
|
|
|
— |
|
|
|
23,678 |
|
|
|
— |
|
|
Total |
$ |
94,007 |
|
|
$ |
70,559 |
|
|
$ |
168,553 |
|
|
$ |
116,574 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA, as adjusted,
as a percentage of sales |
|
|
|
|
|
|
|
|
|
|
|
|
Same branch (b) |
|
14.0 |
|
% |
|
|
|
|
12.5 |
|
% |
|
|
|
Acquisitions (c) |
|
20.0 |
|
% |
|
|
|
|
19.0 |
|
% |
|
|
|
Total (d) |
|
14.2 |
|
% |
|
11.6 |
|
% |
|
13.2 |
|
% |
|
10.6 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
As Adjusted
Incremental EBITDA, as a percentage of incremental
sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
Same branch (e) |
|
76.3 |
|
% |
|
|
|
|
49.5 |
|
% |
|
|
|
Acquisitions (c) |
|
20.0 |
|
% |
|
|
|
|
19.0 |
|
% |
|
|
|
Total
(f) |
|
43.3 |
|
% |
|
|
|
|
28.6 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Represents
current year impact of acquisitions in their first twevle
months |
(b) Same branch
EBITDA, as adjusted, as a percentage of same branch sales |
(c) Acquired
EBITDA, as adjusted, as a percentage of acquired sales |
(d) Total EBITDA,
as adjusted, as a percentage of total sales |
(e) Change in
same branch EBITDA, as adjusted, as a percentage of change in same
branch sales |
(f) Change in
total EBITDA, as adjusted, as a percentage of change in total
sales |
|
|
TopBuild
Corp. |
Reconciliation of Adjusted EBITDA to Net Income
(Unaudited) |
(dollars
in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Net income, as
reported |
$ |
52,051 |
|
$ |
27,153 |
|
$ |
90,035 |
|
$ |
53,540 |
Adjustments to arrive at
EBITDA, as adjusted: |
|
|
|
|
|
|
|
|
|
|
|
Interest expense and other, net |
|
9,105 |
|
|
7,240 |
|
|
18,374 |
|
|
9,530 |
Income tax expense |
|
14,883 |
|
|
9,288 |
|
|
24,249 |
|
|
14,503 |
Depreciation and amortization |
|
13,062 |
|
|
9,743 |
|
|
25,538 |
|
|
15,185 |
Share-based compensation |
|
4,513 |
|
|
2,995 |
|
|
7,485 |
|
|
5,397 |
Rationalization charges |
|
142 |
|
|
4,341 |
|
|
1,969 |
|
|
5,138 |
Acquisition related costs |
|
251 |
|
|
9,799 |
|
|
903 |
|
|
13,281 |
EBITDA, as
adjusted |
$ |
94,007 |
|
$ |
70,559 |
|
$ |
168,553 |
|
$ |
116,574 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TopBuild
Corp. |
2019
Estimated Adjusted EBITDA Range (Unaudited) |
(dollars
in millions) |
|
|
|
|
|
|
|
|
|
Twelve Months Ending December 31, 2019 |
|
|
Low |
|
|
High |
Estimated net
income |
$ |
170.5 |
|
$ |
185.6 |
Adjustments to arrive at
estimated EBITDA, as adjusted: |
|
|
|
|
|
Interest expense and other, net |
|
38.9 |
|
|
35.9 |
Income tax expense |
|
61.5 |
|
|
66.9 |
Depreciation and amortization |
|
54.0 |
|
|
50.0 |
Share-based compensation |
|
14.6 |
|
|
12.1 |
Rationalization charges |
|
4.0 |
|
|
2.5 |
Acquisition related costs |
|
1.5 |
|
|
2.0 |
Estimated EBITDA, as
adjusted |
$ |
345.0 |
|
$ |
355.0 |
|
|
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