TopBuild Corp. (NYSE:BLD), a
leading installer and distributor of insulation and building
material products to the U.S. construction industry today reported
results for the fourth quarter and year ended December 31, 2020.
Robert Buck, President and Chief Executive
Officer, stated, “Our fourth quarter results were strong with
operating margins expanding over 200 basis points at both TruTeam
and Service Partners. Same branch residential and commercial
revenue improved sequentially from the third quarter and continues
to strengthen.
“Labor shortages and material constraints are
extending the building cycle and the traditional lag time in our
business. Our ability to share labor and material across our
footprint gives us an advantage in serving our customers and helps
us mitigate these challenges.”
Fourth Quarter Financial Highlights
(unless otherwise indicated, comparisons are to
the quarter ended December 31, 2019)
- Net sales
increased 8.9% to $721.5 million, driven by increased volume and
sales from acquisitions.
- Gross margin
expanded 150 basis points to 27.4%. On an adjusted basis, gross
margin was 27.5%, a 160-basis point increase.
- Operating
profit was $103.1 million, compared to $76.4 million. On an
adjusted basis, operating profit was $104.0 million, compared to
$76.6 million, a 35.7% improvement.
- Operating
margin was 14.3%. Adjusted operating margin improved 280 basis
points to 14.4%.
- Net income was
$70.8 million, or $2.13 per diluted share, compared to $46.0
million, or $1.36 per diluted share.
- Adjusted net
income was $71.3 million, or $2.15 per diluted share, compared to
$50.0 million, or $1.48 per diluted share.
- Adjusted EBITDA was $121.5 million,
compared to $92.5 million, a 31.2% increase and adjusted EBITDA
margin improved 280 basis points to 16.8%. Incremental adjusted
EBITDA margin was 48.9%.
- At December 31, 2020, the Company
had cash and cash equivalents of $330.0 million, availability under
its revolving credit facility of $389.6 million for total liquidity
of $719.6 million.
Full Year 2020 Financial Highlights
(unless otherwise indicated, comparisons are to
twelve months ended December 31, 2019)
- Net sales
increased 3.6% to $2,718.0 million.
- Gross margin
expanded 150 basis points to 27.5%.
- Operating
profit was $355.0 million, compared to operating profit of $289.5
million. On an adjusted basis, operating profit was $359.4 million,
compared to $292.7 million, a 22.8% improvement.
- Operating
margin was 13.1%, up 210 basis points. Adjusted operating margin
improved 200 basis points to 13.2%.
- Net income was $247.0 million, or
$7.42 per diluted share, compared to $191.0 million, or $5.56 per
diluted share. Adjusted net income was $242.5 million, or $7.28 per
diluted share, compared to $188.9 million, or $5.49 per diluted
share.
- Adjusted EBITDA was $436.7 million,
compared to $359.1 million, a 21.6% increase and adjusted EBITDA
margin improved 240 basis points to 16.1%.
Buck added, “Our 2020 financial results demonstrate the strength
of our operating model and the hard work and dedication of our
entire TopBuild team. Despite the challenges resulting from the
pandemic, both of our business segments reported revenue growth and
solid margin expansion.
“In addition, during the year we completed three acquisitions,
strengthening our footprint in the high growth markets of Texas,
Colorado and Tennessee.
“Looking ahead, housing fundamentals remain robust and our
Company should continue to benefit from strong demand for new
housing construction. Our focus remains on driving top line growth
and improving operational efficiencies throughout the Company.”
Operating Segment Highlights
($ in 000s)(comparisons are to the period ended
December 31, 2019)
TruTeam |
3 Months Ended 12/31/20 |
12 Months Ended 12/31/20 |
|
Service Partners |
3 Months Ended 12/31/20 |
12 Months Ended 12/31/20 |
Sales |
$508,812 |
$1,943,461 |
|
Sales |
$251,535 |
$926,207 |
Change |
|
|
|
Change |
|
|
Volume |
2.8% |
-1.0% |
|
Volume |
13.3% |
7.9% |
Price |
-0.3% |
0.9% |
|
Price |
-0.6% |
-0.5% |
M&A |
4.5% |
2.0% |
|
M&A |
0.0% |
0.0% |
Total Change |
6.9% |
1.9% |
|
Total Change |
12.7% |
7.4% |
Operating Margin |
16.0% |
15.2% |
|
Operating Margin |
13.4% |
12.5% |
Change |
260 bps |
190 bps |
|
Change |
210 bps |
200 bps |
Adj. Operating Margin |
16.1% |
15.3% |
|
Adj. Operating Margin |
13.4% |
12.5% |
Change |
270 bps |
200 bps |
|
Change |
210 bps |
200 bps |
Capital
AllocationAcquisitions In 2020, the
Company completed three acquisitions, Hunter Insulation, an
installation company based in Long Island, New York, Cooper Glass a
commercial glass company serving the Memphis market, and Garland
Insulating, a residential and light commercial installation company
serving markets in Texas and Colorado.
In January 2021, the Company acquired LCR
Contractors, a residential and heavy commercial insulation company
serving markets in Texas and Tennessee. Combined, these four
companies are expected to contribute approximately $137 million of
annual revenue
“Acquisitions remain our number one capital allocation priority.
We have a robust pipeline of prospects with the majority
concentrated in our core insulation business. These companies are
located in attractive growth regions with strong management teams,
solid customer bases and experienced installers,” stated Buck.
Share Repurchase ProgramIn
2020, the Company repurchased a total of 616,227 shares of its
common stock for approximately $49.2 million.
Sales and Adjusted EBITDA
Guidance (1) ($ in millions)
2021 |
Low |
High |
Sales |
$ |
3,050.0 |
$ |
3,150.0 |
Adjusted EBITDA* |
$ |
505.0 |
$ |
535.0 |
*See table for adjusted EBITDA
reconciliation.
Assumptions(1)
($ in millions)
2021 |
Low |
High |
Housing Starts |
|
1,425 |
|
1,475 |
Estimated net income |
$ |
297.5 |
$ |
326.7 |
Interest Expense and other, net |
$ |
24.2 |
$ |
21.2 |
Income tax expense |
$ |
104.5 |
$ |
114.8 |
Depreciation and Amortization |
$ |
67.0 |
$ |
63.0 |
Share based compensation |
$ |
11.8 |
$ |
9.3 |
|
|
|
Long-Term Targets (3-Years)
(1)
Metric |
|
Working Capital (% of LTM Sales) |
9.5% to 10.5% |
CapEx (% of Sales) |
2.0% |
Commercial Annual Revenue Growth |
7.5% to 10.0% |
Normalized Tax Rate |
26.0% |
Incremental Adjusted EBITDA (Organic) |
22.0% to 27.0% |
Incremental Adjusted EBITDA (Acquisitions Year One) |
11.0% to 16.0% |
Residential Revenue for Every 50K Increase in Housing Starts |
$90 million |
(1) This guidance and long-term
targets reflect management’s current view of present and future
market conditions and are based on assumptions such as housing
starts, general and administrative expenses, weighted average
diluted shares outstanding and interest rates. These targets do not
include any effects related to potential acquisitions or
divestitures that may occur after the date of this press release. A
reconciliation of non-GAAP targets to corresponding GAAP measures
is not available on a forward-looking basis without unreasonable
effort due to the uncertainty regarding, and the potential
variability of, the costs and expenses that may be incurred in the
future and therefore, cannot be reasonably predicted. The effect of
these excluded items may be significant. Factors that could cause
actual long-term results to differ materially from TopBuild’s
current expectations are discussed below and are also detailed in
the Company’s 2020 Annual Report on Form 10-K and subsequent SEC
reports.
Additional Information
Quarterly supplemental materials, including a
presentation that will be referenced on today’s conference call,
are available on the Company’s website at www.topbuild.com.
Conference Call A conference
call to discuss fourth quarter 2020 financial results is scheduled
for today, Tuesday, February 23, 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 Company’s website at
www.topbuild.com.
About TopBuild
TopBuild 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 approximately 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 “SEC Filings” 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, the
related assumptions underlying our expected results, and our plan
to repurchase our common stock under a stock repurchase
transaction. 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 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. |
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Consolidated Statements of Operations |
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|
(in thousands, except share and per common share
amounts) |
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Three Months Ended December 31, |
|
Year Ended December 31, |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Net sales |
|
$ |
721,487 |
|
|
$ |
662,349 |
|
|
$ |
2,718,038 |
|
|
$ |
2,624,121 |
|
Cost of
sales |
|
|
523,467 |
|
|
|
491,030 |
|
|
|
1,971,677 |
|
|
|
1,942,854 |
|
Gross profit |
|
|
198,020 |
|
|
|
171,319 |
|
|
|
746,361 |
|
|
|
681,267 |
|
|
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|
|
|
|
|
|
|
|
|
|
Selling,
general, and administrative expense |
|
|
94,943 |
|
|
|
94,898 |
|
|
|
391,315 |
|
|
|
391,744 |
|
Operating profit |
|
|
103,077 |
|
|
|
76,421 |
|
|
|
355,046 |
|
|
|
289,523 |
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|
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|
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Other income
(expense), net: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
(7,745 |
) |
|
|
(9,083 |
) |
|
|
(32,456 |
) |
|
|
(37,823 |
) |
Loss on extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
|
(233 |
) |
|
|
— |
|
Other, net |
|
|
85 |
|
|
|
566 |
|
|
|
733 |
|
|
|
2,078 |
|
Other
expense, net |
|
|
(7,660 |
) |
|
|
(8,517 |
) |
|
|
(31,956 |
) |
|
|
(35,745 |
) |
Income before income taxes |
|
|
95,417 |
|
|
|
67,904 |
|
|
|
323,090 |
|
|
|
253,778 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense |
|
|
(24,660 |
) |
|
|
(21,919 |
) |
|
|
(76,067 |
) |
|
|
(62,783 |
) |
Net income |
|
$ |
70,757 |
|
|
$ |
45,985 |
|
|
$ |
247,023 |
|
|
$ |
190,995 |
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Net
income per common share: |
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Basic |
|
$ |
2.16 |
|
|
$ |
1.38 |
|
|
$ |
7.50 |
|
|
$ |
5.65 |
|
Diluted |
|
$ |
2.13 |
|
|
$ |
1.36 |
|
|
$ |
7.42 |
|
|
$ |
5.56 |
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Weighted average shares outstanding: |
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|
|
|
|
|
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Basic |
|
|
32,789,911 |
|
|
|
33,297,613 |
|
|
|
32,917,971 |
|
|
|
33,806,104 |
|
Diluted |
|
|
33,189,104 |
|
|
|
33,886,904 |
|
|
|
33,299,986 |
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|
34,376,555 |
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TopBuild Corp. |
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Consolidated Balance Sheets and Other Financial
Data |
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(dollars in thousands) |
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As of December 31, |
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2020 |
|
2019 |
|
ASSETS |
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Current
assets: |
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Cash and cash equivalents |
|
$ |
330,007 |
|
$ |
184,807 |
|
Receivables, net of an allowance for credit losses of $6,926 at
December 31, 2020 and allowance for doubtful accounts of $4,854 at
December 31, 2019 |
|
|
427,340 |
|
|
428,844 |
|
Inventories, net |
|
|
161,369 |
|
|
149,078 |
|
Prepaid expenses and other current assets |
|
|
17,689 |
|
|
17,098 |
|
Total current assets |
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|
936,405 |
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|
779,827 |
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Right of
use assets |
|
|
83,490 |
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|
87,134 |
|
Property
and equipment, net |
|
|
180,053 |
|
|
178,080 |
|
Goodwill |
|
|
1,410,685 |
|
|
1,367,918 |
|
Other
intangible assets, net |
|
|
190,605 |
|
|
181,122 |
|
Deferred
tax assets, net |
|
|
2,728 |
|
|
4,259 |
|
Other
assets |
|
|
11,317 |
|
|
5,623 |
|
Total assets |
|
$ |
2,815,283 |
|
$ |
2,603,963 |
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LIABILITIES |
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Current
liabilities: |
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Accounts payable |
|
$ |
331,710 |
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$ |
307,970 |
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Current portion of long-term debt |
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23,326 |
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34,272 |
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Accrued liabilities |
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|
107,949 |
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|
98,418 |
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Short-term lease liabilities |
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|
33,492 |
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|
36,094 |
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Total current liabilities |
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496,477 |
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476,754 |
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Long-term
debt |
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683,396 |
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697,955 |
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Deferred
tax liabilities, net |
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|
168,568 |
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|
175,263 |
|
Long-term
portion of insurance reserves |
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50,657 |
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|
45,605 |
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Long-term
lease liabilities |
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|
53,749 |
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|
54,010 |
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Other
liabilities |
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|
13,642 |
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|
1,487 |
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Total liabilities |
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1,466,489 |
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|
1,451,074 |
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EQUITY |
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1,348,794 |
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1,152,889 |
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Total liabilities and equity |
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$ |
2,815,283 |
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$ |
2,603,963 |
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As of December 31, |
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2020 |
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2019 |
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Other Financial Data |
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Receivable days |
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|
48 |
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|
53 |
|
Inventory days |
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30 |
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|
28 |
|
Accounts payable days |
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|
76 |
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|
80 |
|
Receivables, net plus inventories, net less accounts payable |
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$ |
256,999 |
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$ |
269,952 |
|
Receivables, net plus inventories, net less accounts payable as a
percent of sales (TTM) † |
9.3 |
% |
10.3 |
% |
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† Trailing 12 months sales have been adjusted for the pro forma
effect of acquired branches |
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TopBuild Corp. |
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Consolidated Statement of Cash Flows |
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(in
thousands) |
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Year Ended December 31, |
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2020 |
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2019 |
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Cash
Flows Provided by (Used in) Operating Activities: |
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Net income |
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$ |
247,023 |
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$ |
190,995 |
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Adjustments
to reconcile net income to net cash provided by operating
activities: |
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Depreciation and amortization |
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|
62,410 |
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|
52,700 |
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Share-based compensation |
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|
14,752 |
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|
13,658 |
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Loss on extinguishment of debt |
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|
233 |
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|
— |
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(Gain) loss on sale or abandonment of property and equipment |
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(88 |
) |
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|
1,399 |
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Amortization of debt issuance costs |
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|
1,491 |
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|
1,558 |
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Provision for bad debt expense |
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|
6,270 |
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|
7,065 |
|
Loss from inventory obsolescence |
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|
2,512 |
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|
2,622 |
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Deferred income taxes, net |
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|
(4,070 |
) |
|
|
8,888 |
|
Change in certain assets and liabilities |
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|
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Receivables, net |
|
|
2,612 |
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|
|
(27,146 |
) |
Inventories, net |
|
|
(11,843 |
) |
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|
17,433 |
|
Prepaid expenses and other current assets |
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|
(460 |
) |
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|
9,361 |
|
Accounts payable |
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|
16,844 |
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|
(5,124 |
) |
Accrued liabilities |
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|
20,545 |
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|
2,690 |
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Payment of contingent consideration |
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|
(413 |
) |
|
|
— |
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Other, net |
|
|
66 |
|
|
|
1,058 |
|
Net cash provided by operating activities |
|
|
357,884 |
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|
271,777 |
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Cash
Flows Provided by (Used in) Investing Activities: |
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|
Purchases of property and equipment |
|
|
(40,938 |
) |
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|
(45,536 |
) |
Acquisition of businesses |
|
|
(83,408 |
) |
|
|
(6,952 |
) |
Proceeds from sale of property and equipment |
|
|
2,463 |
|
|
|
2,321 |
|
Other, net |
|
|
— |
|
|
|
25 |
|
Net cash used in investing activities |
|
|
(121,883 |
) |
|
|
(50,142 |
) |
|
|
|
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|
|
Cash
Flows Provided by (Used in) Financing Activities: |
|
|
|
|
|
|
Proceeds from issuance of long-term debt |
|
|
300,000 |
|
|
|
14,989 |
|
Repayment of long-term debt |
|
|
(324,948 |
) |
|
|
(27,793 |
) |
Payment of debt issuance costs |
|
|
(2,280 |
) |
|
|
— |
|
Taxes withheld and paid on employees' equity awards |
|
|
(14,932 |
) |
|
|
(12,951 |
) |
Exercise of stock options |
|
|
1,438 |
|
|
|
— |
|
Repurchase of shares of common stock |
|
|
(49,151 |
) |
|
|
(110,911 |
) |
Payment of contingent consideration |
|
|
(928 |
) |
|
|
(1,091 |
) |
Net cash (used in) provided by financing activities |
|
|
(90,801 |
) |
|
|
(137,757 |
) |
|
|
|
|
|
|
|
Cash
and Cash Equivalents |
|
|
|
|
|
|
Increase for the period |
|
|
145,200 |
|
|
|
83,878 |
|
Beginning of period |
|
|
184,807 |
|
|
|
100,929 |
|
End of period |
|
$ |
330,007 |
|
|
$ |
184,807 |
|
|
|
|
|
|
|
|
Supplemental disclosure of cash paid for: |
|
|
|
|
|
|
Interest on long-term debt |
|
$ |
30,896 |
|
|
$ |
36,244 |
|
Income taxes |
|
|
77,689 |
|
|
|
43,310 |
|
|
|
|
|
|
|
|
Supplemental disclosure of noncash
activities: |
|
|
|
|
|
|
Leased assets obtained in exchange for new operating lease
liabilities |
|
$ |
38,646 |
|
|
$ |
128,838 |
|
Accruals for property and equipment |
|
|
645 |
|
|
|
542 |
|
TopBuild Corp. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
|
|
Year Ended December 31, |
|
|
|
|
2020 |
|
2019 |
|
Change |
|
2020 |
|
2019 |
|
Change |
TruTeam |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales |
|
$ |
508,812 |
|
|
$ |
475,929 |
|
|
6.9% |
|
$ |
1,943,461 |
|
|
$ |
1,906,730 |
|
|
1.9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit, as reported |
|
$ |
81,657 |
|
|
$ |
63,661 |
|
|
|
|
$ |
294,793 |
|
|
$ |
253,230 |
|
|
|
Operating margin, as reported |
|
|
16.0 |
% |
|
|
13.4 |
% |
|
|
|
|
15.2 |
% |
|
|
13.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rationalization charges |
|
|
— |
|
|
|
(24 |
) |
|
|
|
|
866 |
|
|
|
159 |
|
|
|
Acquisition related costs |
|
|
— |
|
|
|
177 |
|
|
|
|
|
4 |
|
|
|
636 |
|
|
|
COVID-19 pay |
|
|
363 |
|
|
|
— |
|
|
|
|
|
1,278 |
|
|
|
— |
|
|
|
Operating profit, as adjusted |
|
$ |
82,020 |
|
|
$ |
63,814 |
|
|
|
|
$ |
296,941 |
|
|
$ |
254,025 |
|
|
|
Operating margin, as adjusted |
|
|
16.1 |
% |
|
|
13.4 |
% |
|
|
|
|
15.3 |
% |
|
|
13.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service Partners |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales |
|
$ |
251,535 |
|
|
$ |
223,244 |
|
|
12.7% |
|
$ |
926,207 |
|
|
$ |
862,143 |
|
|
7.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit, as reported |
|
$ |
33,731 |
|
|
$ |
25,234 |
|
|
|
|
$ |
115,343 |
|
|
$ |
90,388 |
|
|
|
Operating margin, as reported |
|
|
13.4 |
% |
|
|
11.3 |
% |
|
|
|
|
12.5 |
% |
|
|
10.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rationalization charges |
|
|
— |
|
|
|
— |
|
|
|
|
|
783 |
|
|
|
109 |
|
|
|
COVID-19 pay |
|
|
21 |
|
|
|
— |
|
|
|
|
|
90 |
|
|
|
— |
|
|
|
Operating profit, as adjusted |
|
$ |
33,752 |
|
|
$ |
25,234 |
|
|
|
|
$ |
116,216 |
|
|
$ |
90,497 |
|
|
|
Operating margin, as adjusted |
|
|
13.4 |
% |
|
|
11.3 |
% |
|
|
|
|
12.5 |
% |
|
|
10.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales before eliminations |
|
$ |
760,347 |
|
|
$ |
699,173 |
|
|
|
|
$ |
2,869,668 |
|
|
$ |
2,768,873 |
|
|
|
Intercompany eliminations |
|
|
(38,860 |
) |
|
|
(36,824 |
) |
|
|
|
|
(151,630 |
) |
|
|
(144,752 |
) |
|
|
Net sales after eliminations |
|
$ |
721,487 |
|
|
$ |
662,349 |
|
|
8.9% |
|
$ |
2,718,038 |
|
|
$ |
2,624,121 |
|
|
3.6% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit, as reported - segments |
|
$ |
115,388 |
|
|
$ |
88,895 |
|
|
|
|
$ |
410,136 |
|
|
$ |
343,618 |
|
|
|
General corporate expense, net |
|
|
(6,174 |
) |
|
|
(6,568 |
) |
|
|
|
|
(30,785 |
) |
|
|
(30,174 |
) |
|
|
Intercompany eliminations |
|
|
(6,137 |
) |
|
|
(5,906 |
) |
|
|
|
|
(24,305 |
) |
|
|
(23,921 |
) |
|
|
Operating profit, as reported |
|
$ |
103,077 |
|
|
$ |
76,421 |
|
|
|
|
$ |
355,046 |
|
|
$ |
289,523 |
|
|
|
Operating margin, as reported |
|
|
14.3 |
% |
|
|
11.5 |
% |
|
|
|
|
13.1 |
% |
|
|
11.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rationalization charges † |
|
|
(4 |
) |
|
|
15 |
|
|
|
|
|
2,097 |
|
|
|
1,992 |
|
|
|
Acquisition related costs † |
|
|
518 |
|
|
|
166 |
|
|
|
|
|
855 |
|
|
|
1,200 |
|
|
|
Refinancing costs |
|
|
— |
|
|
|
— |
|
|
|
|
|
57 |
|
|
|
— |
|
|
|
COVID-19 pay |
|
|
384 |
|
|
|
— |
|
|
|
|
|
1,368 |
|
|
|
— |
|
|
|
Operating profit, as adjusted |
|
$ |
103,975 |
|
|
$ |
76,602 |
|
|
|
|
$ |
359,423 |
|
|
$ |
292,715 |
|
|
|
Operating margin, as adjusted |
|
|
14.4 |
% |
|
|
11.6 |
% |
|
|
|
|
13.2 |
% |
|
|
11.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation |
|
|
2,593 |
|
|
|
2,246 |
|
|
|
|
|
14,910 |
|
|
|
13,658 |
|
|
|
Depreciation and amortization |
|
|
14,883 |
|
|
|
13,696 |
|
|
|
|
|
62,410 |
|
|
|
52,700 |
|
|
|
EBITDA, as adjusted |
|
$ |
121,451 |
|
|
$ |
92,544 |
|
|
|
|
$ |
436,743 |
|
|
$ |
359,073 |
|
|
|
EBITDA margin, as adjusted |
|
|
16.8 |
% |
|
|
14.0 |
% |
|
|
|
|
16.1 |
% |
|
|
13.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales change period over period |
|
|
59,138 |
|
|
|
|
|
|
|
|
93,917 |
|
|
|
|
|
|
EBITDA, as adjusted, change period over period |
|
|
28,907 |
|
|
|
|
|
|
|
|
77,670 |
|
|
|
|
|
|
Incremental EBITDA, as adjusted, as a percentage of change in
sales |
48.9 |
% |
|
|
|
|
|
|
|
82.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
† Rationalization
charges and acquisition related costs include corporate level
adjustments as well as segment operating adjustments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TopBuild Corp. |
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Reconciliations |
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands, except share and per common share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Gross Profit and Operating Profit
Reconciliations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
721,487 |
|
|
$ |
662,349 |
|
|
$ |
2,718,038 |
|
|
$ |
2,624,121 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit, as reported |
|
$ |
198,020 |
|
|
$ |
171,319 |
|
|
$ |
746,361 |
|
|
$ |
681,267 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rationalization charges |
|
|
— |
|
|
|
— |
|
|
|
1,016 |
|
|
|
— |
|
COVID-19
pay |
|
|
380 |
|
|
|
— |
|
|
|
1,135 |
|
|
|
— |
|
Gross profit, as adjusted |
|
$ |
198,400 |
|
|
$ |
171,319 |
|
|
$ |
748,512 |
|
|
$ |
681,267 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
margin, as reported |
|
|
27.4 |
% |
|
|
25.9 |
% |
|
|
27.5 |
% |
|
|
26.0 |
% |
Gross
margin, as adjusted |
|
|
27.5 |
% |
|
|
25.9 |
% |
|
|
27.5 |
% |
|
|
26.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit, as reported |
|
$ |
103,077 |
|
|
$ |
76,421 |
|
|
$ |
355,046 |
|
|
$ |
289,523 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rationalization charges |
|
|
(4 |
) |
|
|
15 |
|
|
|
2,097 |
|
|
|
1,992 |
|
Acquisition
related costs |
|
|
518 |
|
|
|
166 |
|
|
|
855 |
|
|
|
1,200 |
|
Refinancing
costs |
|
|
— |
|
|
|
— |
|
|
|
57 |
|
|
|
— |
|
COVID-19
pay |
|
|
384 |
|
|
|
— |
|
|
|
1,368 |
|
|
|
— |
|
Operating profit, as adjusted |
|
$ |
103,975 |
|
|
$ |
76,602 |
|
|
$ |
359,423 |
|
|
$ |
292,715 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
margin, as reported |
|
|
14.3 |
% |
|
|
11.5 |
% |
|
|
13.1 |
% |
|
|
11.0 |
% |
Operating
margin, as adjusted |
|
|
14.4 |
% |
|
|
11.6 |
% |
|
|
13.2 |
% |
|
|
11.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Per Common Share Reconciliation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes, as reported |
|
$ |
95,417 |
|
|
$ |
67,904 |
|
|
$ |
323,090 |
|
|
$ |
253,778 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rationalization charges |
|
|
(4 |
) |
|
|
15 |
|
|
|
2,097 |
|
|
|
1,992 |
|
Acquisition
related costs |
|
|
518 |
|
|
|
166 |
|
|
|
855 |
|
|
|
1,200 |
|
Refinancing
costs and loss on extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
|
290 |
|
|
|
— |
|
COVID-19
pay |
|
|
384 |
|
|
|
— |
|
|
|
1,368 |
|
|
|
— |
|
Income before income taxes, as adjusted |
|
|
96,315 |
|
|
|
68,085 |
|
|
|
327,700 |
|
|
|
256,970 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax rate at
26.0% and 26.5% for 2020 and 2019, respectively |
|
|
(25,042 |
) |
|
|
(18,043 |
) |
|
|
(85,202 |
) |
|
|
(68,097 |
) |
Income, as adjusted |
|
$ |
71,273 |
|
|
$ |
50,042 |
|
|
$ |
242,498 |
|
|
$ |
188,873 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income per common share, as adjusted |
|
$ |
2.15 |
|
|
$ |
1.48 |
|
|
$ |
7.28 |
|
|
$ |
5.49 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average diluted common shares outstanding |
|
|
33,189,104 |
|
|
|
33,886,904 |
|
|
|
33,299,986 |
|
|
|
34,376,555 |
|
TopBuild Corp. |
|
|
|
|
|
|
|
|
|
|
|
|
Same
Branch and Acquisition Net Sales and Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Net
sales |
|
|
|
|
|
|
|
|
|
|
|
|
Same
branch: |
|
|
|
|
|
|
|
|
|
|
|
|
TruTeam |
|
$ |
487,593 |
|
|
$ |
475,929 |
|
|
$ |
1,906,012 |
|
|
$ |
1,906,730 |
|
Service Partners |
|
|
251,535 |
|
|
|
223,244 |
|
|
|
926,207 |
|
|
|
862,143 |
|
Eliminations |
|
|
(38,860 |
) |
|
|
(36,824 |
) |
|
|
(151,630 |
) |
|
|
(144,752 |
) |
Total same
branch |
|
|
700,268 |
|
|
|
662,349 |
|
|
|
2,680,589 |
|
|
|
2,624,121 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisitions
(a): |
|
|
|
|
|
|
|
|
|
|
|
|
TruTeam |
|
$ |
21,219 |
|
|
$ |
— |
|
|
$ |
37,449 |
|
|
$ |
— |
|
Service Partners |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Eliminations |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total
acquisitions |
|
|
21,219 |
|
|
|
— |
|
|
|
37,449 |
|
|
|
— |
|
Total |
|
$ |
721,487 |
|
|
$ |
662,349 |
|
|
$ |
2,718,038 |
|
|
$ |
2,624,121 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisitions
proforma adjustment † |
|
|
|
|
|
|
|
$ |
48,469 |
|
|
|
|
TTM net sales, acquisition adjusted |
|
|
|
|
|
|
|
$ |
2,766,507 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA, as adjusted |
|
|
|
|
|
|
|
|
|
|
|
|
Same
branch |
|
$ |
118,413 |
|
|
$ |
92,544 |
|
|
$ |
430,510 |
|
|
$ |
359,073 |
|
Acquisitions
(a) |
|
|
3,038 |
|
|
|
— |
|
|
|
6,233 |
|
|
|
— |
|
Total |
|
$ |
121,451 |
|
|
$ |
92,544 |
|
|
$ |
436,743 |
|
|
$ |
359,073 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA, as adjusted, as a percentage of sales |
|
|
|
|
|
|
|
|
|
|
|
|
Same branch
(b) |
|
|
16.9 |
% |
|
|
|
|
|
16.1 |
% |
|
|
|
Acquisitions
(c) |
|
|
14.3 |
% |
|
|
|
|
|
16.6 |
% |
|
|
|
Total (d) |
|
|
16.8 |
% |
|
|
14.0 |
% |
|
|
16.1 |
% |
|
|
13.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Adjusted Incremental EBITDA, as a percentage of change in
sales |
|
|
|
|
|
|
|
|
|
|
|
|
Same branch
(e) |
|
|
68.2 |
% |
|
|
|
|
|
126.5 |
% |
|
|
|
Acquisitions
(c) |
|
|
14.3 |
% |
|
|
|
|
|
16.6 |
% |
|
|
|
Total (f) |
|
|
48.9 |
% |
|
|
|
|
|
82.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 |
† Trailing 12 months
sales have been adjusted for the pro forma effect of acquired
branches |
|
|
|
|
|
|
|
|
|
|
|
|
TopBuild Corp. |
|
|
|
|
|
|
|
|
|
|
|
Same Branch and Acquisition Net Sales by
Market |
|
|
|
|
|
|
|
|
|
(in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Same
branch: |
|
|
|
|
|
|
|
|
|
|
|
Residential |
$ |
550,960 |
|
$ |
512,715 |
|
$ |
2,104,233 |
|
$ |
2,016,016 |
Commercial |
|
149,308 |
|
|
149,364 |
|
|
576,356 |
|
|
608,105 |
Same branch
net sales |
|
700,268 |
|
|
662,349 |
|
|
2,680,589 |
|
|
2,624,121 |
|
|
|
|
|
|
|
|
|
|
|
|
Acquisitions (a): |
|
|
|
|
|
|
|
|
|
|
|
Residential |
$ |
18,969 |
|
$ |
— |
|
$ |
23,650 |
|
$ |
— |
Commercial |
|
2,250 |
|
|
— |
|
|
13,799 |
|
|
— |
Acquisitions
net sales |
|
21,219 |
|
|
— |
|
|
37,449 |
|
|
— |
Total net sales |
$ |
721,487 |
|
$ |
662,349 |
|
$ |
2,718,038 |
|
$ |
2,624,121 |
|
|
|
|
|
|
|
|
|
|
|
|
(a) Represents current year impact of acquisitions in their first
twelve months |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TopBuild Corp. |
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Adjusted EBITDA to Net
Income |
|
|
|
|
|
|
|
|
|
|
|
(in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
|
2020 |
|
|
2019 |
|
2020 |
|
2019 |
Net income, as reported |
|
$ |
70,757 |
|
|
$ |
45,985 |
|
$ |
247,023 |
|
$ |
190,995 |
Adjustments
to arrive at EBITDA, as adjusted: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense and other, net |
|
|
7,660 |
|
|
|
8,517 |
|
|
31,723 |
|
|
35,745 |
Income tax expense |
|
|
24,660 |
|
|
|
21,919 |
|
|
76,067 |
|
|
62,783 |
Depreciation and amortization |
|
|
14,883 |
|
|
|
13,696 |
|
|
62,410 |
|
|
52,700 |
Share-based compensation |
|
|
2,593 |
|
|
|
2,246 |
|
|
14,910 |
|
|
13,658 |
Rationalization charges |
|
|
(4 |
) |
|
|
15 |
|
|
2,097 |
|
|
1,992 |
Acquisition related costs |
|
|
518 |
|
|
|
166 |
|
|
855 |
|
|
1,200 |
Refinancing costs and loss on extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
290 |
|
|
— |
COVID-19 pay |
|
|
384 |
|
|
|
— |
|
|
1,368 |
|
|
— |
EBITDA, as adjusted |
|
$ |
121,451 |
|
|
$ |
92,544 |
|
$ |
436,743 |
|
$ |
359,073 |
|
|
|
|
|
|
|
|
|
|
|
|
|
TopBuild Corp. |
|
|
|
|
|
|
2021
Estimated Adjusted EBITDA Range |
|
|
|
|
|
|
(in
millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ending December 31, 2021 |
|
|
|
Low |
|
|
High |
|
Estimated net income |
$ |
297.5 |
|
$ |
326.7 |
|
Adjustments
to arrive at estimated EBITDA, as adjusted: |
|
|
|
|
|
|
Interest expense and other, net |
|
24.2 |
|
|
21.2 |
|
Income tax expense |
|
104.5 |
|
|
114.8 |
|
Depreciation and amortization |
|
67.0 |
|
|
63.0 |
|
Share-based compensation |
|
11.8 |
|
|
9.3 |
|
Estimated EBITDA, as adjusted |
$ |
505.0 |
|
$ |
535.0 |
|
|
|
|
|
|
|
|
|
|
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