TopBuild Corp.
(NYSE:BLD), a
leading installer and distributor of insulation and building
material products today reported results for the third quarter
ended September 30, 2020.
Jerry Volas, Chief Executive Officer, stated, “We are pleased
with our overall results that included strong adjusted operating
and EBITDA margins. Our team continues to do an outstanding job of
generating profitable growth. Sales at TruTeam were adversely
impacted by our commercial business where some projects have been
delayed due to COVID-19 safety protocols.
“Looking ahead, we are bullish on the overall fundamentals of
our end markets and our ability to leverage our size and scale to
drive market share.”
Third Quarter Financial
Highlights(unless otherwise indicated, comparisons are to
the quarter ended September 30, 2019)
- Net sales
increased 2.2% to $697.2 million, driven by increased volume and
sales from acquisitions.
- Gross margin
increased 210 basis points to 28.4%.
- Operating
profit was $101.5 million, compared to operating profit of $80.4
million. On an adjusted basis, operating profit was $101.7 million,
compared to $80.6 million, a 26.2% improvement.
- Operating
margin, both reported and adjusted, was 14.6%, up 280 basis
points.
- Net income was
$70.0 million, or $2.11 per diluted share, compared to $55.0
million, or $1.60 per diluted share. Adjusted income was $69.6
million, or $2.10 per diluted share, compared to $52.7 million, or
$1.53 per diluted share.
- Adjusted EBITDA was $119.2 million,
compared to $98.0 million, a 21.6% increase, and adjusted EBITDA
margin improved 270 basis points to 17.1%.
- At September 30, 2020, the Company
had cash and cash equivalents of $315.3 million and availability
under its revolving credit facility of $389.6 million for total
liquidity of $704.9 million.
Nine Month Financial
Highlights(unless otherwise indicated, comparisons are to
nine months ended September 30, 2019)
- Net sales
increased 1.8% to $1,996.6 million.
- Gross margin
expanded 150 basis points to 27.5%.
- Operating
profit was $252.0 million, compared to operating profit of $213.1
million. On an adjusted basis, operating profit was $255.5 million,
compared to $216.1 million, a 18.2% improvement.
- Operating
margin was 12.6% a 170-basis point improvement. On an adjusted
basis, operating margin improved 180 basis points to 12.8%.
- Net income was $176.3 million, or
$5.29 per diluted share, compared to $145.0 million, or $4.20 per
diluted share. Adjusted income was $171.2 million, or $5.14 per
diluted share, compared to $138.8 million, or $4.02 per diluted
share.
- Adjusted EBITDA was $315.3 million,
compared to $266.5 million, a 18.3% increase. Adjusted EBITDA
margin was 15.8%, a 220-basis point improvement.
Operating Segment Highlights
($ in 000s)(comparisons are to the period ended
September 30, 2019)
TruTeam |
3 Months Ended 9/30/20 |
9 Months Ended 9/30/20 |
|
Service Partners |
3 Months Ended 9/30/20 |
9 Months Ended 9/30/20 |
Sales |
$ |
492,206 |
|
$ |
1,434,648 |
|
|
Sales |
$ |
244,113 |
|
$ |
674,672 |
|
Change |
|
|
|
Change |
|
|
Volume |
|
-3.4 |
% |
|
-2.2 |
% |
|
Volume |
|
12.2 |
% |
|
6.0 |
% |
Price |
|
1.2 |
% |
|
1.3 |
% |
|
Price |
|
-1.7 |
% |
|
-0.4 |
% |
M&A |
|
0.9 |
% |
|
1.1 |
% |
|
M&A |
|
0.0 |
% |
|
0.0 |
% |
Total Change |
|
-1.2 |
% |
|
0.3 |
% |
|
Total Change |
|
10.5 |
% |
|
5.6 |
% |
Operating Margin |
|
16.9 |
% |
|
14.9 |
% |
|
Operating Margin |
|
13.4 |
% |
|
12.1 |
% |
Change |
|
290 bps |
|
|
170 bps |
|
|
Change |
|
280 bps |
|
|
190 bps |
|
Adj. Operating Margin |
|
17.0 |
% |
|
15.0 |
% |
|
Adj. Operating Margin |
|
13.4 |
% |
|
12.2 |
% |
Change |
|
300 bps |
|
|
170 bps |
|
|
Change |
|
280 bps |
|
|
200 bps |
|
Capital
AllocationAcquisitions On October 1,
2020, the Company completed the acquisition of Garland Insulating,
one of the largest locally owned and operated insulation
installation companies in Texas. Garland generated approximately
$60 million in revenue for the trailing twelve months ended June
30, 2020.
“Acquisitions continue to be our number one capital allocation
priority. Garland Insulating, which has a great reputation, strong
customer base and outstanding leadership, is a good example of the
type of quality companies we have in our pipeline,” noted
Volas.
Year-to-date, the Company has announced three
acquisitions, which combined, are expected to generate
approximately $79 million in annual revenue.
Share repurchasesIn the third
quarter of 2020, the Company repurchased 57,810 shares at an
average price of $155.63 per share. These shares were
purchased as part of the Company’s $200 million share repurchase
authorization announced on February 26, 2019. As of September
30, 2020, $46 million of the $200 million authorization
remained.
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 third quarter 2020 financial results is scheduled
for today, Tuesday, November 3, at 9:00 a.m. Eastern Time. The call
may be accessed by dialing (877) 407-9037. 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 Adjusted 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 StatementStatements
contained herein reflect our views about future periods, including
our future plans and performance, constitute “forward-looking
statements” under the Private Securities Litigation Reform Act of
1995. Forward-looking statements can be identified by 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. We
caution you against unduly relying on any of these forward-looking
statements. Our future performance may be affected by the
duration and impact of the COVID-19 pandemic on the United States
economy, specifically with respect to residential and commercial
construction; our ability to continue operations in markets
affected by the COVID-19 pandemic and our ability to collect
receivables from our customers; our reliance on residential new
construction, residential repair/remodel, and commercial
construction; our reliance on third-party suppliers and
manufacturers; our ability to attract, develop, and retain talented
personnel and our sales and labor force; our ability to maintain
consistent practices across our locations; and our ability to
maintain our competitive position. We discuss the material
risks we face under the caption entitled “Risk Factors” in our
Annual Report for the year ended December 31, 2019, as
filed with the SEC on February 25, 2020, as well as under the
caption entitled “Risk Factors” in subsequent reports that we file
with the SEC. Our forward-looking statements in this filing
speak only as of the date of this filing. Factors or events
that could cause our actual results to differ may emerge from time
to time and it is not possible for us to predict all of them.
Unless required by law, we undertake no obligation to update
publicly any forward-looking statements as a result of new
information, future events, or otherwise. The Company
believes that the non-GAAP performance measures and ratios that are
contained herein, which management uses to manage our business,
provide users of this financial information with additional
meaningful comparisons between current results and results in our
prior periods. Non-GAAP performance measures and ratios should be
viewed in addition, and not as an alternative, to the Company's
reported results under accounting principles generally accepted in
the United States. Additional information about the Company is
contained in the Company's filings with the SEC and is available on
TopBuild's website at www.topbuild.com.
Investor Relations and Media
ContactTabitha Zanetabitha.zane@topbuild.com
386-763-8801
TopBuild
Corp. |
|
|
|
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|
|
|
|
|
|
|
|
|
Condensed
Consolidated Statements of Operations (Unaudited) |
|
|
|
|
|
|
|
|
|
|
(in
thousands, except share and per common share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months EndedSeptember 30, |
|
Nine Months EndedSeptember 30, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
Net sales |
|
$ |
697,223 |
|
|
$ |
682,330 |
|
|
$ |
1,996,551 |
|
|
$ |
1,961,771 |
|
|
Cost of sales |
|
|
498,895 |
|
|
|
502,999 |
|
|
|
1,448,210 |
|
|
|
1,451,822 |
|
|
Gross profit |
|
|
198,328 |
|
|
|
179,331 |
|
|
|
548,341 |
|
|
|
509,949 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general, and administrative expense |
|
|
96,805 |
|
|
|
98,886 |
|
|
|
296,372 |
|
|
|
296,846 |
|
|
Operating profit |
|
|
101,523 |
|
|
|
80,445 |
|
|
|
251,969 |
|
|
|
213,103 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense), net: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
(7,692 |
) |
|
|
(9,507 |
) |
|
|
(24,711 |
) |
|
|
(28,740 |
) |
|
Loss on extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
|
(233 |
) |
|
|
— |
|
|
Other, net |
|
|
86 |
|
|
|
653 |
|
|
|
648 |
|
|
|
1,512 |
|
|
Other expense, net |
|
|
(7,606 |
) |
|
|
(8,854 |
) |
|
|
(24,296 |
) |
|
|
(27,228 |
) |
|
Income before income taxes |
|
|
93,917 |
|
|
|
71,591 |
|
|
|
227,673 |
|
|
|
185,875 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
|
(23,921 |
) |
|
|
(16,615 |
) |
|
|
(51,407 |
) |
|
|
(40,864 |
) |
|
Net income |
|
$ |
69,996 |
|
|
$ |
54,976 |
|
|
$ |
176,266 |
|
|
$ |
145,011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
2.13 |
|
|
$ |
1.63 |
|
|
$ |
5.35 |
|
|
$ |
4.27 |
|
|
Diluted |
|
$ |
2.11 |
|
|
$ |
1.60 |
|
|
$ |
5.29 |
|
|
$ |
4.20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
32,847,652 |
|
|
|
33,790,857 |
|
|
|
32,960,969 |
|
|
|
33,977,464 |
|
|
Diluted |
|
|
33,210,545 |
|
|
|
34,367,902 |
|
|
|
33,337,259 |
|
|
|
34,541,635 |
|
|
TopBuild
Corp. |
|
|
|
|
|
|
|
|
Condensed Consolidated
Balance Sheets and Other Financial Data (Unaudited) |
|
|
|
|
|
|
|
|
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
As of |
|
|
|
|
September 30, |
|
December 31, |
|
|
|
|
2020 |
|
2019 |
|
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
315,338 |
|
$ |
184,807 |
|
|
Receivables, net of an allowance for credit losses of $8,122 at
September 30, 2020 and allowance for doubtful accounts of $4,854 at
December 31, 2019 |
|
|
436,548 |
|
|
428,844 |
|
|
Inventories, net |
|
|
142,517 |
|
|
149,078 |
|
|
Prepaid expenses and other current assets |
|
|
32,101 |
|
|
17,098 |
|
|
Total current assets |
|
|
926,504 |
|
|
779,827 |
|
|
|
|
|
|
|
|
|
|
|
Right of use assets |
|
|
81,692 |
|
|
87,134 |
|
|
Property and equipment, net |
|
|
172,099 |
|
|
178,080 |
|
|
Goodwill |
|
|
1,379,721 |
|
|
1,367,918 |
|
|
Other intangible assets, net |
|
|
172,390 |
|
|
181,122 |
|
|
Deferred tax assets, net |
|
|
4,397 |
|
|
4,259 |
|
|
Other assets |
|
|
10,998 |
|
|
5,623 |
|
|
Total assets |
|
$ |
2,747,801 |
|
$ |
2,603,963 |
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
311,696 |
|
$ |
307,970 |
|
|
Current portion of long-term debt |
|
|
23,247 |
|
|
34,272 |
|
|
Accrued liabilities |
|
|
117,456 |
|
|
98,418 |
|
|
Short-term lease liabilities |
|
|
32,747 |
|
|
36,094 |
|
|
Total current liabilities |
|
|
485,146 |
|
|
476,754 |
|
|
|
|
|
|
|
|
|
|
|
Long-term debt |
|
|
688,870 |
|
|
697,955 |
|
|
Deferred tax liabilities, net |
|
|
173,597 |
|
|
175,263 |
|
|
Long-term portion of insurance
reserves |
|
|
49,927 |
|
|
45,605 |
|
|
Long-term lease
liabilities |
|
|
52,672 |
|
|
54,010 |
|
|
Other liabilities |
|
|
15,995 |
|
|
1,487 |
|
|
Total liabilities |
|
|
1,466,207 |
|
|
1,451,074 |
|
|
|
|
|
|
|
|
|
|
|
EQUITY |
|
|
1,281,594 |
|
|
1,152,889 |
|
|
Total liabilities and equity |
|
$ |
2,747,801 |
|
$ |
2,603,963 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of September 30, |
|
|
|
|
2020 |
|
2019 |
|
|
Other Financial
Data |
|
|
|
|
|
|
|
|
Receivable days |
|
|
48 |
|
|
51 |
|
|
Inventory days |
|
|
27 |
|
|
28 |
|
|
Accounts payable days |
|
|
81 |
|
|
77 |
|
|
Receivables, net plus inventories, net less accounts
payable |
|
$ |
267,369 |
|
$ |
301,217 |
|
|
Receivables, net plus inventories, net less accounts payable as a
percent of sales (TTM) |
|
|
10.1 |
% |
|
11.6 |
% |
|
|
|
|
|
|
|
|
|
|
TopBuild
Corp. |
|
|
|
|
|
|
Condensed Consolidated
Statement of Cash Flows (Unaudited) |
|
|
|
|
|
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, |
|
|
2020 |
|
|
2019 |
|
Cash Flows Provided by
(Used in) Operating Activities: |
|
|
|
|
|
|
Net income |
|
$ |
176,266 |
|
|
$ |
145,011 |
|
Adjustments to reconcile net
income to net cash provided by operating activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
|
47,527 |
|
|
|
39,005 |
|
Share-based compensation |
|
|
12,159 |
|
|
|
11,411 |
|
Loss on extinguishment of debt |
|
|
233 |
|
|
|
— |
|
Loss on sale or abandonment of property and equipment |
|
|
290 |
|
|
|
885 |
|
Amortization of debt issuance costs |
|
|
1,103 |
|
|
|
1,169 |
|
Provision for bad debt expense |
|
|
5,625 |
|
|
|
5,697 |
|
Loss from inventory obsolescence |
|
|
1,908 |
|
|
|
1,794 |
|
Deferred income taxes, net |
|
|
(709 |
) |
|
|
(381 |
) |
Change in certain assets and liabilities |
|
|
|
|
|
|
Receivables, net |
|
|
(13,645 |
) |
|
|
(51,585 |
) |
Inventories, net |
|
|
4,759 |
|
|
|
20,637 |
|
Prepaid expenses and other current assets |
|
|
(14,989 |
) |
|
|
10,003 |
|
Accounts payable |
|
|
2,152 |
|
|
|
(12,529 |
) |
Accrued liabilities |
|
|
33,436 |
|
|
|
10,758 |
|
Payment of contingent consideration |
|
|
(413 |
) |
|
|
— |
|
Other, net |
|
|
21 |
|
|
|
904 |
|
Net cash provided by operating activities |
|
|
255,723 |
|
|
|
182,779 |
|
|
|
|
|
|
|
|
Cash Flows Provided by
(Used in) Investing Activities: |
|
|
|
|
|
|
Purchases of property and equipment |
|
|
(27,206 |
) |
|
|
(34,100 |
) |
Acquisition of businesses |
|
|
(21,450 |
) |
|
|
(6,452 |
) |
Proceeds from sale of property and equipment |
|
|
2,332 |
|
|
|
2,239 |
|
Other, net |
|
|
— |
|
|
|
25 |
|
Net cash used in investing activities |
|
|
(46,324 |
) |
|
|
(38,288 |
) |
|
|
|
|
|
|
|
Cash Flows Provided by
(Used in) Financing Activities: |
|
|
|
|
|
|
Proceeds from issuance of long-term debt |
|
|
300,000 |
|
|
|
9,998 |
|
Repayment of long-term debt |
|
|
(319,168 |
) |
|
|
(19,424 |
) |
Payment of debt issuance costs |
|
|
(2,280 |
) |
|
|
— |
|
Taxes withheld and paid on employees' equity awards |
|
|
(14,781 |
) |
|
|
(11,135 |
) |
Exercise of stock options |
|
|
1,438 |
|
|
|
— |
|
Repurchase of shares of common stock |
|
|
(43,149 |
) |
|
|
(52,177 |
) |
Payment of contingent consideration |
|
|
(928 |
) |
|
|
(1,091 |
) |
Net cash used in financing activities |
|
|
(78,868 |
) |
|
|
(73,829 |
) |
|
|
|
|
|
|
|
Cash and Cash
Equivalents |
|
|
|
|
|
|
Increase for the period |
|
|
130,531 |
|
|
|
70,662 |
|
Beginning of period |
|
|
184,807 |
|
|
|
100,929 |
|
End of period |
|
$ |
315,338 |
|
|
$ |
171,591 |
|
|
|
|
|
|
|
|
Supplemental
disclosure of noncash activities: |
|
|
|
|
|
|
Leased assets obtained in exchange for new operating lease
liabilities |
|
$ |
27,098 |
|
|
$ |
120,726 |
|
Accruals for property and equipment |
|
|
278 |
|
|
|
102 |
|
TopBuild
Corp. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Data (Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(dollars in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months EndedSeptember 30, |
|
|
|
|
|
|
Nine Months EndedSeptember 30, |
|
|
|
|
|
|
2020 |
|
|
2019 |
|
|
Change |
|
|
|
2020 |
|
|
2019 |
|
|
Change |
|
TruTeam |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales |
|
$ |
492,206 |
|
|
$ |
498,390 |
|
|
|
(1.2 |
) |
% |
|
|
$ |
1,434,648 |
|
|
$ |
1,430,800 |
|
|
0.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit, as reported |
|
$ |
83,142 |
|
|
$ |
69,846 |
|
|
|
|
|
|
|
$ |
213,136 |
|
|
$ |
189,568 |
|
|
|
|
|
Operating margin, as reported |
|
|
16.9 |
|
% |
|
14.0 |
|
% |
|
|
|
|
|
|
14.9 |
|
% |
|
13.2 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rationalization charges |
|
|
9 |
|
|
|
(16 |
) |
|
|
|
|
|
|
|
866 |
|
|
|
183 |
|
|
|
|
|
Acquisition related costs |
|
|
— |
|
|
|
56 |
|
|
|
|
|
|
|
|
4 |
|
|
|
459 |
|
|
|
|
|
COVID-19 pay |
|
|
278 |
|
|
|
— |
|
|
|
|
|
|
|
|
916 |
|
|
|
— |
|
|
|
|
|
Operating profit, as adjusted |
|
$ |
83,429 |
|
|
$ |
69,886 |
|
|
|
|
|
|
|
$ |
214,922 |
|
|
$ |
190,210 |
|
|
|
|
|
Operating margin, as adjusted |
|
|
17.0 |
|
% |
|
14.0 |
|
% |
|
|
|
|
|
|
15.0 |
|
% |
|
13.3 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service
Partners |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales |
|
$ |
244,113 |
|
|
$ |
220,947 |
|
|
|
10.5 |
|
% |
|
|
$ |
674,672 |
|
|
$ |
638,899 |
|
|
5.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit, as reported |
|
$ |
32,787 |
|
|
$ |
23,406 |
|
|
|
|
|
|
|
$ |
81,612 |
|
|
$ |
65,154 |
|
|
|
|
|
Operating margin, as reported |
|
|
13.4 |
|
% |
|
10.6 |
|
% |
|
|
|
|
|
|
12.1 |
|
% |
|
10.2 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rationalization charges |
|
|
(161 |
) |
|
|
— |
|
|
|
|
|
|
|
|
783 |
|
|
|
109 |
|
|
|
|
|
COVID-19 pay |
|
|
15 |
|
|
|
— |
|
|
|
|
|
|
|
|
70 |
|
|
|
— |
|
|
|
|
|
Operating profit, as adjusted |
|
$ |
32,641 |
|
|
$ |
23,406 |
|
|
|
|
|
|
|
$ |
82,464 |
|
|
$ |
65,263 |
|
|
|
|
|
Operating margin, as adjusted |
|
|
13.4 |
|
% |
|
10.6 |
|
% |
|
|
|
|
|
|
12.2 |
|
% |
|
10.2 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales before eliminations |
|
$ |
736,319 |
|
|
$ |
719,337 |
|
|
|
|
|
|
|
$ |
2,109,320 |
|
|
$ |
2,069,699 |
|
|
|
|
|
Intercompany eliminations |
|
|
(39,096 |
) |
|
|
(37,007 |
) |
|
|
|
|
|
|
|
(112,769 |
) |
|
|
(107,928 |
) |
|
|
|
|
Net sales after eliminations |
|
$ |
697,223 |
|
|
$ |
682,330 |
|
|
|
2.2 |
|
% |
|
|
$ |
1,996,551 |
|
|
$ |
1,961,771 |
|
|
1.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit, as reported - segments |
|
$ |
115,929 |
|
|
$ |
93,252 |
|
|
|
|
|
|
|
$ |
294,748 |
|
|
$ |
254,722 |
|
|
|
|
|
General corporate expense, net |
|
|
(8,032 |
) |
|
|
(6,872 |
) |
|
|
|
|
|
|
|
(24,610 |
) |
|
|
(23,606 |
) |
|
|
|
|
Intercompany eliminations |
|
|
(6,374 |
) |
|
|
(5,935 |
) |
|
|
|
|
|
|
|
(18,169 |
) |
|
|
(18,013 |
) |
|
|
|
|
Operating profit, as reported |
|
$ |
101,523 |
|
|
$ |
80,445 |
|
|
|
|
|
|
|
$ |
251,969 |
|
|
$ |
213,103 |
|
|
|
|
|
Operating margin, as reported |
|
|
14.6 |
|
% |
|
11.8 |
|
% |
|
|
|
|
|
|
12.6 |
|
% |
|
10.9 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rationalization charges † |
|
|
(274 |
) |
|
|
8 |
|
|
|
|
|
|
|
|
2,102 |
|
|
|
1,977 |
|
|
|
|
|
Acquisition related costs † |
|
|
142 |
|
|
|
131 |
|
|
|
|
|
|
|
|
338 |
|
|
|
1,034 |
|
|
|
|
|
Refinancing costs |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
57 |
|
|
|
— |
|
|
|
|
|
COVID-19 pay |
|
|
293 |
|
|
|
— |
|
|
|
|
|
|
|
|
984 |
|
|
|
— |
|
|
|
|
|
Operating profit, as adjusted |
|
$ |
101,684 |
|
|
$ |
80,584 |
|
|
|
|
|
|
|
$ |
255,450 |
|
|
$ |
216,114 |
|
|
|
|
|
Operating margin, as adjusted |
|
|
14.6 |
|
% |
|
11.8 |
|
% |
|
|
|
|
|
|
12.8 |
|
% |
|
11.0 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation |
|
|
3,280 |
|
|
|
3,926 |
|
|
|
|
|
|
|
|
12,317 |
|
|
|
11,411 |
|
|
|
|
|
Depreciation and amortization |
|
|
14,216 |
|
|
|
13,467 |
|
|
|
|
|
|
|
|
47,527 |
|
|
|
39,005 |
|
|
|
|
|
EBITDA, as adjusted |
|
$ |
119,180 |
|
|
$ |
97,977 |
|
|
|
|
|
|
|
$ |
315,294 |
|
|
$ |
266,530 |
|
|
|
|
|
EBITDA margin, as adjusted |
|
|
17.1 |
|
% |
|
14.4 |
|
% |
|
|
|
|
|
|
15.8 |
|
% |
|
13.6 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales change period over period |
|
|
14,893 |
|
|
|
|
|
|
|
|
|
|
|
34,780 |
|
|
|
|
|
|
|
|
EBITDA, as adjusted, change period over period |
|
|
21,203 |
|
|
|
|
|
|
|
|
|
|
|
48,764 |
|
|
|
|
|
|
|
|
Incremental EBITDA, as adjusted, as a percentage of change in
sales |
|
142.4 |
|
% |
|
|
|
|
|
|
|
|
|
140.2 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
† Rationalization
charges and acquisition related costs 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 EndedSeptember 30, |
|
Nine Months EndedSeptember 30, |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Gross Profit and
Operating Profit Reconciliations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
697,223 |
|
|
$ |
682,330 |
|
|
$ |
1,996,551 |
|
|
$ |
1,961,771 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit, as
reported |
|
$ |
198,328 |
|
|
$ |
179,331 |
|
|
$ |
548,341 |
|
|
$ |
509,949 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rationalization charges |
|
|
(63 |
) |
|
|
— |
|
|
|
1,016 |
|
|
|
— |
|
COVID-19 pay |
|
|
273 |
|
|
|
— |
|
|
|
755 |
|
|
|
— |
|
Gross profit, as
adjusted |
|
$ |
198,538 |
|
|
$ |
179,331 |
|
|
$ |
550,111 |
|
|
$ |
509,949 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin, as reported |
|
|
28.4 |
% |
|
|
26.3 |
% |
|
|
27.5 |
% |
|
|
26.0 |
% |
Gross margin, as adjusted |
|
|
28.5 |
% |
|
|
26.3 |
% |
|
|
27.6 |
% |
|
|
26.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit, as
reported |
|
$ |
101,523 |
|
|
$ |
80,445 |
|
|
$ |
251,969 |
|
|
$ |
213,103 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rationalization charges |
|
|
(274 |
) |
|
|
8 |
|
|
|
2,102 |
|
|
|
1,977 |
|
Acquisition related costs |
|
|
142 |
|
|
|
131 |
|
|
|
338 |
|
|
|
1,034 |
|
Refinancing costs |
|
|
— |
|
|
|
— |
|
|
|
57 |
|
|
|
— |
|
COVID-19 pay |
|
|
293 |
|
|
|
— |
|
|
|
984 |
|
|
|
— |
|
Operating profit, as
adjusted |
|
$ |
101,684 |
|
|
$ |
80,584 |
|
|
$ |
255,450 |
|
|
$ |
216,114 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin, as
reported |
|
|
14.6 |
% |
|
|
11.8 |
% |
|
|
12.6 |
% |
|
|
10.9 |
% |
Operating margin, as
adjusted |
|
|
14.6 |
% |
|
|
11.8 |
% |
|
|
12.8 |
% |
|
|
11.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Per Common
Share Reconciliation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes, as reported |
|
$ |
93,917 |
|
|
$ |
71,591 |
|
|
$ |
227,673 |
|
|
$ |
185,875 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rationalization charges |
|
|
(274 |
) |
|
|
8 |
|
|
|
2,102 |
|
|
|
1,977 |
|
Acquisition related costs |
|
|
142 |
|
|
|
131 |
|
|
|
338 |
|
|
|
1,034 |
|
Refinancing costs and loss on
extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
|
290 |
|
|
|
— |
|
COVID-19 pay |
|
|
293 |
|
|
|
— |
|
|
|
984 |
|
|
|
— |
|
Income before income
taxes, as adjusted |
|
|
94,078 |
|
|
|
71,730 |
|
|
|
231,387 |
|
|
|
188,886 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax rate at 26.0% and 26.5%
for 2020 and 2019, respectively |
|
|
(24,460 |
) |
|
|
(19,008 |
) |
|
|
(60,161 |
) |
|
|
(50,055 |
) |
Income, as
adjusted |
|
$ |
69,618 |
|
|
$ |
52,722 |
|
|
$ |
171,226 |
|
|
$ |
138,831 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income per common
share, as adjusted |
|
$ |
2.10 |
|
|
$ |
1.53 |
|
|
$ |
5.14 |
|
|
$ |
4.02 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average diluted
common shares outstanding |
|
|
33,210,545 |
|
|
|
34,367,902 |
|
|
|
33,337,259 |
|
|
|
34,541,635 |
|
TopBuild
Corp. |
|
|
|
|
|
|
|
|
|
|
|
|
Same Branch and
Acquisition Net Sales and Adjusted EBITDA (Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
(dollars in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Net
sales |
|
|
|
|
|
|
|
|
|
|
|
|
Same branch: |
|
|
|
|
|
|
|
|
|
|
|
|
TruTeam |
|
$ |
487,590 |
|
|
$ |
498,390 |
|
|
$ |
1,418,418 |
|
|
$ |
1,430,800 |
|
Service Partners |
|
|
244,113 |
|
|
|
220,947 |
|
|
|
674,672 |
|
|
|
638,899 |
|
Eliminations |
|
|
(39,096 |
) |
|
|
(37,007 |
) |
|
|
(112,769 |
) |
|
|
(107,928 |
) |
Total same branch |
|
|
692,607 |
|
|
|
682,330 |
|
|
|
1,980,321 |
|
|
|
1,961,771 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisitions (a): |
|
|
|
|
|
|
|
|
|
|
|
|
TruTeam |
|
$ |
4,616 |
|
|
$ |
— |
|
|
$ |
16,230 |
|
|
$ |
— |
|
Service Partners |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Eliminations |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total acquisitions |
|
|
4,616 |
|
|
|
— |
|
|
|
16,230 |
|
|
|
— |
|
Total |
|
$ |
697,223 |
|
|
$ |
682,330 |
|
|
$ |
1,996,551 |
|
|
$ |
1,961,771 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA, as
adjusted |
|
|
|
|
|
|
|
|
|
|
|
|
Same branch |
|
$ |
118,506 |
|
|
$ |
97,977 |
|
|
$ |
312,099 |
|
|
$ |
266,530 |
|
Acquisitions (a) |
|
|
674 |
|
|
|
— |
|
|
|
3,195 |
|
|
|
— |
|
Total |
|
$ |
119,180 |
|
|
$ |
97,977 |
|
|
$ |
315,294 |
|
|
$ |
266,530 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA, as adjusted,
as a percentage of sales |
|
|
|
|
|
|
|
|
|
|
|
|
Same branch (b) |
|
|
17.1 |
% |
|
|
|
|
|
15.8 |
% |
|
|
|
Acquisitions (c) |
|
|
14.6 |
% |
|
|
|
|
|
19.7 |
% |
|
|
|
Total (d) |
|
|
17.1 |
% |
|
|
14.4 |
% |
|
|
15.8 |
% |
|
|
13.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
As Adjusted
Incremental EBITDA, as a percentage of change in
sales |
|
|
|
|
|
|
|
|
|
|
|
|
Same branch (e) |
|
|
199.8 |
% |
|
|
|
|
|
245.7 |
% |
|
|
|
Acquisitions (c) |
|
|
14.6 |
% |
|
|
|
|
|
19.7 |
% |
|
|
|
Total (f) |
|
|
142.4 |
% |
|
|
|
|
|
140.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Represents
current year impact of acquisitions in their first twelve
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. |
|
|
|
|
|
|
|
|
|
|
|
|
Same Branch and Acquisition Net
Sales by Market (Unaudited) |
|
|
|
|
|
|
|
|
|
|
(in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months EndedSeptember 30, |
|
Nine Months EndedSeptember 30, |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
Same
branch: |
|
|
|
|
|
|
|
|
|
|
|
|
Residential |
$ |
543,658 |
|
$ |
522,506 |
|
$ |
1,553,273 |
|
$ |
1,503,300 |
|
Commercial |
|
148,949 |
|
|
159,824 |
|
|
427,048 |
|
|
458,471 |
|
Same branch net sales |
|
692,607 |
|
|
682,330 |
|
|
1,980,321 |
|
|
1,961,771 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisitions
(a): |
|
|
|
|
|
|
|
|
|
|
|
|
Residential |
$ |
2,030 |
|
$ |
— |
|
$ |
4,681 |
|
$ |
— |
|
Commercial |
|
2,586 |
|
|
— |
|
|
11,549 |
|
|
— |
|
Acquisitions net sales |
|
4,616 |
|
|
— |
|
|
16,230 |
|
|
— |
|
Total net
sales |
$ |
697,223 |
|
$ |
682,330 |
|
$ |
1,996,551 |
|
$ |
1,961,771 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Represents
current year impact of acquisitions in their first twelve
months |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TopBuild
Corp. |
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Adjusted EBITDA to Net Income
(Unaudited) |
|
|
|
|
|
|
|
|
|
(in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months EndedSeptember 30, |
|
Nine Months Ended September 30, |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Net income, as reported |
|
$ |
69,996 |
|
|
$ |
54,976 |
|
$ |
176,266 |
|
$ |
145,011 |
Adjustments to arrive at
EBITDA, as adjusted: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense and other, net |
|
|
7,606 |
|
|
|
8,854 |
|
|
24,063 |
|
|
27,228 |
Income tax expense |
|
|
23,921 |
|
|
|
16,615 |
|
|
51,407 |
|
|
40,864 |
Depreciation and amortization |
|
|
14,216 |
|
|
|
13,467 |
|
|
47,527 |
|
|
39,005 |
Share-based compensation |
|
|
3,280 |
|
|
|
3,926 |
|
|
12,317 |
|
|
11,411 |
Rationalization charges |
|
|
(274 |
) |
|
|
8 |
|
|
2,102 |
|
|
1,977 |
Acquisition related costs |
|
|
142 |
|
|
|
131 |
|
|
338 |
|
|
1,034 |
Refinancing costs and loss on extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
290 |
|
|
— |
COVID-19 pay |
|
|
293 |
|
|
|
— |
|
|
984 |
|
|
— |
EBITDA, as
adjusted |
|
$ |
119,180 |
|
|
$ |
97,977 |
|
$ |
315,294 |
|
$ |
266,530 |
|
|
|
|
|
|
|
|
|
|
|
|
|
TopBuild (NYSE:BLD)
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From May 2024 to Jun 2024
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