Both segments drive growth, resulting in second quarter sales of $1.37 billion
Delivered gross margin of 31% and adjusted EBITDA margin of 20.3%
Revises 2024 guidance to $5.3 to $5.5 billion in revenue and $1.055 to $1.125 billion in adjusted EBITDA
DAYTONA BEACH, Fla., Aug. 06, 2024 (GLOBE NEWSWIRE) -- TopBuild Corp. (:BLD) a leading installer and specialty distributor of insulation and building material products to the construction industry in the United States and Canada today reported results for the second quarter ended June 30, 2024.
“We’re pleased with our solid results in the second quarter, as our teams continued to focus on growth and profitability across the business. We grew sales 3.7% to $1.37 billion and delivered adjusted EBITDA of $277.7 million and adjusted EBITDA margin of 20.3%. Excluding the benefit from higher-than-normal multi-family and commercial margins in the second and third quarter of 2023,1 we delivered our highest level of sales and profitability in our history,” said Robert Buck, President and Chief Executive Officer.
“Both segments delivered sales growth in the second quarter, however volume was less than anticipated due to higher interest rates, project delays and supply constraints that continue to impact results across some residential and commercial end markets. Our residential single-family sales continued to improve, and our backlog continues to support our multi-family sales. Commercial and industrial backlogs and bidding activity remain robust.
“The long-term fundamentals for our business are strong, supported by the undersupply of housing in the United States, increasing household formations, the potential for moderating interest rates, and strengthening demand for greater energy efficiency. We expect to continue driving profitable growth and strong free cash flows for TopBuild to reinvest or return to shareholders.
“Year to date, we have completed 6 acquisitions, and our M&A pipeline is very healthy. We are also returning capital to shareholders, and as of June 30, we repurchased approximately 1.25 million shares totaling $505.2 million, underscoring management and our Board’s continued confidence in our future growth and capital allocation approach,” concluded Mr. Buck.
1 The Company noted that its results for the second quarter of 2023 included an estimated $10 million margin benefit related to certain multi-family/commercial business. In the third quarter of 2023, a similar benefit is estimated to be $15 million.
Financial Highlights
(comparisons are to the periods ended June 30, 2023)
| Three Months Ended June 30 | |||||||||||||
| $ in thousands | Reported | Adjusted | |||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||
| Sales | $ | 1,365,612 | $ | 1,317,262 | $ | 1,365,612 | $ | 1,317,262 | |||||
| Gross Profit | 423,922 | 421,800 | 423,922 | 421,800 | |||||||||
| Gross Margin | 31.0 | % | 32.0 | % | 31.0 | % | 32.0 | % | |||||
| SG&A | 213,530 | 184,697 | 185,893 | 182,597 | |||||||||
| SG&A as % of revenue | 15.6 | % | 14.0 | % | 13.6 | % | 13.9 | % | |||||
| Operating Profit | 210,392 | 237,103 | 238,029 | 239,203 | |||||||||
| Operating Margin | 15.4 | % | 18.0 | % | 17.4 | % | 18.2 | % | |||||
| Net Income | 150,723 | 164,400 | 170,800 | 166,685 | |||||||||
| Net Income per diluted share | $ | 4.78 | $ | 5.18 | $ | 5.42 | $ | 5.25 | |||||
| EBITDA | $ | 277,694 | $ | 275,505 | |||||||||
| EBITDA Margin | 20.3 | % | 20.9 | % | |||||||||
| Six Months Ended June 30 | |||||||||||||
| $ in thousands | Reported | Adjusted | |||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||
| Sales | $ | 2,644,329 | $ | 2,582,500 | $ | 2,644,329 | $ | 2,582,500 | |||||
| Gross Profit | 811,072 | 792,015 | 811,072 | 792,015 | |||||||||
| Gross Margin | 30.7 | % | 30.7 | % | 30.7 | % | 30.7 | % | |||||
| SG&A | 386,172 | 355,481 | 358,609 | 349,723 | |||||||||
| SG&A as % of revenue | 14.6 | % | 13.8 | % | 13.6 | % | 13.5 | % | |||||
| Operating Profit | 424,900 | 436,534 | 452,463 | 442,292 | |||||||||
| Operating Margin | 16.1 | % | 16.9 | % | 17.1 | % | 17.1 | % | |||||
| Net Income | 303,104 | 300,270 | 323,922 | 305,045 | |||||||||
| Net Income per diluted share | $ | 9.56 | $ | 9.47 | $ | 10.22 | $ | 9.62 | |||||
| EBITDA | $ | 531,513 | $ | 513,830 | |||||||||
| EBITDA Margin | 20.1 | % | 19.9 | % | |||||||||
Sales Drivers
(comparisons are to the periods ended June 30, 2023)
| Three Months Ended June 30, 2024 | |||||||||
| Installation | Specialty Distribution | TopBuild, net of elims | |||||||
| Sales (in millions) | $ | 851 | $ | 593 | $ | 1,366 | |||
| Sales Drivers | |||||||||
| Volume | 1.0 | % | 0.6 | % | 0.0 | % | |||
| Price | 1.3 | % | 1.3 | % | 1.3 | % | |||
| M&A | 3.8 | % | 1.3 | % | 2.9 | % | |||
| Dispositions | -0.9 | % | -0.6 | % | |||||
| Total Sales Change | 5.2 | % | 3.2 | % | 3.7 | % | |||
| Six Months Ended June 30, 2024 | |||||||||
| Installation | Specialty Distribution | TopBuild, net of elims | |||||||
| Sales (in millions) | $ | 1,650 | $ | 1,139 | $ | 2,644 | |||
| Sales Drivers | |||||||||
| Volume | 0.7 | % | -1.8 | % | -1.0 | % | |||
| Price | 1.2 | % | 1.4 | % | 1.3 | % | |||
| M&A | 3.7 | % | 0.9 | % | 2.6 | % | |||
| Dispositions | -0.9 | % | -0.5 | % | |||||
| Total Sales Change | 4.7 | % | 0.5 | % | 2.4 | % | |||
Segment Profitability
(comparisons are to the periods ended June 30, 2023)
| Three Months Ended June 30, 2024 | Six Months Ended June 30, 2024 | ||||||||||||
| $ in thousands | Installation | Specialty Distribution | Installation | Specialty Distribution | |||||||||
| Operating Profit | $ | 170,718 | $ | 89,373 | $ | 327,475 | $ | 166,951 | |||||
| Change | -0.9 | % | 3.9 | % | 2.6 | % | 4.8 | % | |||||
| Operating Margin | 20.1 | % | 15.1 | % | 19.9 | % | 14.7 | % | |||||
| Adj. Operating Profit | $ | 171,006 | $ | 89,383 | $ | 327,808 | $ | 166,211 | |||||
| Change | -0.9 | % | 4.0 | % | 2.5 | % | 4.1 | % | |||||
| Adj. Operating Margin | 20.1 | % | 15.1 | % | 19.9 | % | 14.6 | % | |||||
| Adj. EBITDA | $ | 190,036 | $ | 104,810 | $ | 365,435 | $ | 196,907 | |||||
| Change | 0.2 | % | 3.7 | % | 3.3 | % | 3.9 | % | |||||
| Adj. EBITDA Margin | 22.3 | % | 17.7 | % | 22.2 | % | 17.3 | % | |||||
Capital Allocation
2024 Acquisitions
Year to date, the Company has completed the acquisition of 6 insulation companies which are expected to generate approximately $107 million in annual revenue. They are listed in the chart below.
| Annual Revenue | ||||||
| Company | ($ millions) | Month Closed | ||||
| Brabble Insulation (I) | $ | 5.2 | February | |||
| Morris Black & Sons (I) | 3.8 | March | ||||
| Pest Control Insulation (D) | 25.4 | March | ||||
| Green Space Insulation (I) | 6.0 | April | ||||
| Insulation Works (I) | 28.0 | May | ||||
| Texas Insulation (I) | 38.9 | May | ||||
| Total | $ | 107.3 | ||||
| I = Installation, D = Specialty Distribution | ||||||
Share Repurchases
During the quarter, TopBuild repurchased approximately 1.25 million shares totaling $505.2 million (average price of $405.43 per share). $649.2 million remained under the current authorization.
2024 Outlook2
The Company revised its full year 2024 guidance as indicated below. The sales guidance assumes mid-single digit residential growth and low single digit commercial/industrial growth for the year. The Company noted that the revision largely reflects timing of demand, rather than any underlying changes in the business.
| $ in millions | ||||||
| 2024 Outlook | Low | High | ||||
| Sales | $ | 5,300 | $ | 5,500 | ||
| Adjusted EBITDA* | $ | 1,055 | $ | 1,125 | ||
| * See table for Adjusted EBITDA reconciliation. | ||||||
2 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, 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 most recent Annual Report on Form 10-K and subsequent SEC reports.
Conference Call
A conference call to discuss second quarter 2024 financial results is scheduled for today, Tuesday, August 6, at 9:00 a.m. Eastern Time. The call may be accessed by dialing (877) 407-9037. A simultaneous webcast of the call, along with management’s formal remarks and a presentation, will be available on the Company’s website at www.topbuild.com shortly before the call begins.
About TopBuild
TopBuild Corp., headquartered in Daytona Beach, Florida, is a leading installer and specialty distributor of insulation and related building material products to the construction industry in the United States and Canada. We provide insulation installation services nationwide through our Installation segment which has approximately 250 branches located across the United States. We distribute building and mechanical insulation, insulation accessories and other building product materials for the residential, commercial, and industrial end markets through our Specialty Distribution business. Our Specialty Distribution network encompasses approximately 170 branches. 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 stock repurchase transactions. These forward-looking statements can be identified by words such as “will,” “would,” “anticipate,” “expect,” “believe,” “designed,” “plan,” “may,” “project,” “estimate” 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.
(tables follow)
| 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, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Net sales | $ | 1,365,612 | $ | 1,317,262 | $ | 2,644,329 | $ | 2,582,500 | |||||||
| Cost of sales | 941,690 | 895,462 | 1,833,257 | 1,790,485 | |||||||||||
| Gross profit | 423,922 | 421,800 | 811,072 | 792,015 | |||||||||||
| Selling, general, and administrative expense | 213,530 | 184,697 | 386,172 | 355,481 | |||||||||||
| Operating profit | 210,392 | 237,103 | 424,900 | 436,534 | |||||||||||
| Other income (expense), net: | |||||||||||||||
| Interest expense | (18,568 | ) | (18,558 | ) | (37,363 | ) | (36,597 | ) | |||||||
| Other, net | 11,350 | 4,605 | 22,632 | 6,528 | |||||||||||
| Other expense, net | (7,218 | ) | (13,953 | ) | (14,731 | ) | (30,069 | ) | |||||||
| Income before income taxes | 203,174 | 223,150 | 410,169 | 406,465 | |||||||||||
| Income tax expense | (52,451 | ) | (58,750 | ) | (107,065 | ) | (106,195 | ) | |||||||
| Net income | $ | 150,723 | $ | 164,400 | $ | 303,104 | $ | 300,270 | |||||||
| Net income per common share: | |||||||||||||||
| Basic | $ | 4.81 | $ | 5.20 | $ | 9.63 | $ | 9.51 | |||||||
| Diluted | $ | 4.78 | $ | 5.18 | $ | 9.56 | $ | 9.47 | |||||||
| Weighted average shares outstanding: | |||||||||||||||
| Basic | 31,324,833 | 31,599,744 | 31,483,144 | 31,575,337 | |||||||||||
| Diluted | 31,524,063 | 31,731,807 | 31,693,524 | 31,722,660 | |||||||||||
| TopBuild Corp. | |||||||||||||||
| Condensed Consolidated Statements of Comprehensive Income (Unaudited) | |||||||||||||||
| (in thousands) | |||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Net income | $ | 150,723 | $ | 164,400 | $ | 303,104 | $ | 300,270 | |||||||
| Other comprehensive (loss) income: | |||||||||||||||
| Foreign currency translation adjustment | (1,836 | ) | 4,283 | (5,928 | ) | 6,037 | |||||||||
| Comprehensive income | $ | 148,887 | $ | 168,683 | $ | 297,176 | $ | 306,307 | |||||||
| TopBuild Corp. | |||||||
| Condensed Consolidated Balance Sheets and Other Financial Data (Unaudited) | |||||||
| (dollars in thousands) | |||||||
| As of | |||||||
| June 30, 2024 | December 31, 2023 | ||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 463,221 | $ | 848,565 | |||
| Receivables, net of an allowance for credit losses of $22,718 at June 30, 2024, and $23,948 at December 31, 2023 | 859,725 | 799,009 | |||||
| Inventories | 393,810 | 364,731 | |||||
| Prepaid expenses and other current assets | 43,550 | 36,939 | |||||
| Total current assets | 1,760,306 | 2,049,244 | |||||
| Right of use assets | 191,048 | 204,629 | |||||
| Property and equipment, net | 267,523 | 264,487 | |||||
| Goodwill | 2,090,788 | 2,042,568 | |||||
| Other intangible assets, net | 583,141 | 591,058 | |||||
| Other assets | 10,187 | 10,865 | |||||
| Total assets | $ | 4,902,993 | $ | 5,162,851 | |||
| LIABILITIES | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 461,139 | $ | 469,585 | |||
| Current portion of long-term debt | 45,665 | 47,039 | |||||
| Accrued liabilities | 176,753 | 187,217 | |||||
| Short-term operating lease liabilities | 66,953 | 65,780 | |||||
| Short-term finance lease liabilities | 1,739 | 1,917 | |||||
| Total current liabilities | 752,249 | 771,538 | |||||
| Long-term debt | 1,351,969 | 1,373,028 | |||||
| Deferred tax liabilities, net | 243,790 | 243,930 | |||||
| Long-term portion of insurance reserves | 60,402 | 58,783 | |||||
| Long-term operating lease liabilities | 132,529 | 146,213 | |||||
| Long-term finance lease liabilities | 3,318 | 4,150 | |||||
| Other liabilities | 1,422 | 1,554 | |||||
| Total liabilities | 2,545,679 | 2,599,196 | |||||
| EQUITY | 2,357,314 | 2,563,655 | |||||
| Total liabilities and equity | $ | 4,902,993 | $ | 5,162,851 | |||
| As of June 30, | |||||||
| 2024 | 2023 | ||||||
| Other Financial Data | |||||||
| Receivable days | 51 | 50 | |||||
| Inventory days | 39 | 39 | |||||
| Accounts payable days | 57 | 64 | |||||
| Receivables, net plus inventories less accounts payable | $ | 792,396 | $ | 774,111 | |||
| Receivables, net plus inventories less accounts payable as a percent of sales (TTM) †| 14.8 | % | 14.9 | % | |||
| †Trailing 12 months sales have been adjusted for the pro forma effect of acquired branches | |||||||
| TopBuild Corp. | |||||||
| Condensed Consolidated Statement of Cash Flows (Unaudited) | |||||||
| (in thousands) | |||||||
| Six Months Ended June 30, | |||||||
| 2024 | 2023 | ||||||
| Cash Flows Provided by (Used in) Operating Activities: | |||||||
| Net income | $ | 303,104 | $ | 300,270 | |||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
| Depreciation and amortization | 69,291 | 64,652 | |||||
| Share-based compensation | 9,759 | 6,886 | |||||
| (Gain)/loss on sale of assets | (131 | ) | 621 | ||||
| Amortization of debt issuance costs | 1,440 | 1,440 | |||||
| Provision for bad debt expense | 9,874 | 4,031 | |||||
| Provision for inventory obsolescence | 4,892 | 3,290 | |||||
| Change in certain assets and liabilities: | |||||||
| Receivables, net | (58,411 | ) | (37,247 | ) | |||
| Inventories | (30,758 | ) | 54,623 | ||||
| Prepaid expenses and other current assets | (6,595 | ) | 8,897 | ||||
| Accounts payable | (17,480 | ) | (8,806 | ) | |||
| Accrued liabilities | (13,348 | ) | (13,872 | ) | |||
| Other, net | (2,509 | ) | 1,012 | ||||
| Net cash provided by operating activities | 269,128 | 385,797 | |||||
| Cash Flows Provided by (Used in) Investing Activities: | |||||||
| Purchases of property and equipment | (35,974 | ) | (30,672 | ) | |||
| Acquisition of businesses, net of cash acquired | (88,123 | ) | (45,948 | ) | |||
| Proceeds from sale of assets | 2,150 | 782 | |||||
| Net cash used in investing activities | (121,947 | ) | (75,838 | ) | |||
| Cash Flows Provided by (Used in) Financing Activities: | |||||||
| Repayment of long-term debt | (23,873 | ) | (18,829 | ) | |||
| Taxes withheld and paid on employees' equity awards | (6,059 | ) | (6,350 | ) | |||
| Exercise of stock options | 3,224 | 1,497 | |||||
| Repurchase of shares of common stock | (505,241 | ) | — | ||||
| Payment of contingent consideration | — | (300 | ) | ||||
| Net cash used in financing activities | (531,949 | ) | (23,982 | ) | |||
| Impact of exchange rate changes on cash | (576 | ) | 281 | ||||
| Net (decrease) increase in cash and cash equivalents | (385,344 | ) | 286,258 | ||||
| Cash and cash equivalents - Beginning of period | 848,565 | 240,069 | |||||
| Cash and cash equivalents - End of period | $ | 463,221 | $ | 526,327 | |||
| Supplemental disclosure of noncash activities: | |||||||
| Leased assets obtained in exchange for new operating lease liabilities | $ | 20,180 | $ | 26,310 | |||
| Accruals for property and equipment | 277 | 1,449 | |||||
| Excise taxes capitalized to treasury stock | 5,202 | — | |||||
| TopBuild Corp. | |||||||||||||||||||||||
| Segment Data (Unaudited) | |||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2024 | 2023 | Change | 2024 | 2023 | Change | ||||||||||||||||||
| Installation | |||||||||||||||||||||||
| Sales | $ | 850,983 | $ | 809,055 | 5.2 | % | $ | 1,649,726 | $ | 1,576,145 | 4.7 | % | |||||||||||
| Operating profit, as reported | $ | 170,718 | $ | 172,278 | $ | 327,475 | $ | 319,176 | |||||||||||||||
| Operating margin, as reported | 20.1 | % | 21.3 | % | 19.9 | % | 20.3 | % | |||||||||||||||
| Acquisition related costs | 288 | 227 | 333 | 490 | |||||||||||||||||||
| Operating profit, as adjusted | $ | 171,006 | $ | 172,505 | $ | 327,808 | $ | 319,666 | |||||||||||||||
| Operating margin, as adjusted | 20.1 | % | 21.3 | % | 19.9 | % | 20.3 | % | |||||||||||||||
| Share-based compensation | 318 | 310 | 648 | 689 | |||||||||||||||||||
| Depreciation and amortization | 18,712 | 16,791 | 36,979 | 33,284 | |||||||||||||||||||
| EBITDA, as adjusted | $ | 190,036 | $ | 189,606 | 0.2 | % | $ | 365,435 | $ | 353,639 | 3.3 | % | |||||||||||
| EBITDA margin, as adjusted | 22.3 | % | 23.4 | % | 22.2 | % | 22.4 | % | |||||||||||||||
| Specialty Distribution | |||||||||||||||||||||||
| Sales | $ | 592,826 | $ | 574,488 | 3.2 | % | $ | 1,138,620 | $ | 1,132,862 | 0.5 | % | |||||||||||
| Operating profit, as reported | $ | 89,373 | $ | 85,980 | $ | 166,951 | $ | 159,313 | |||||||||||||||
| Operating margin, as reported | 15.1 | % | 15.0 | % | 14.7 | % | 14.1 | % | |||||||||||||||
| Rationalization charges | — | — | (750 | ) | — | ||||||||||||||||||
| Acquisition related costs | 10 | — | 10 | 340 | |||||||||||||||||||
| Operating profit, as adjusted | $ | 89,383 | $ | 85,980 | $ | 166,211 | $ | 159,653 | |||||||||||||||
| Operating margin, as adjusted | 15.1 | % | 15.0 | % | 14.6 | % | 14.1 | % | |||||||||||||||
| Share-based compensation | 380 | 316 | 813 | 554 | |||||||||||||||||||
| Depreciation and amortization | 15,047 | 14,740 | 29,883 | 29,312 | |||||||||||||||||||
| EBITDA, as adjusted | $ | 104,810 | $ | 101,036 | 3.7 | % | $ | 196,907 | $ | 189,519 | 3.9 | % | |||||||||||
| EBITDA margin, as adjusted | 17.7 | % | 17.6 | % | 17.3 | % | 16.7 | % | |||||||||||||||
| TopBuild Corp. | |||||||||||||||||||||||
| Adjusted EBITDA (Unaudited) | |||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2024 | 2023 | Change | 2024 | 2023 | Change | ||||||||||||||||||
| Total net sales | |||||||||||||||||||||||
| Sales before eliminations | $ | 1,443,809 | $ | 1,383,543 | $ | 2,788,346 | $ | 2,709,007 | |||||||||||||||
| Intercompany eliminations | (78,197 | ) | (66,281 | ) | (144,017 | ) | (126,507 | ) | |||||||||||||||
| Net sales after eliminations | $ | 1,365,612 | $ | 1,317,262 | 3.7 | % | $ | 2,644,329 | $ | 2,582,500 | 2.4 | % | |||||||||||
| Operating profit, as reported - segments | $ | 260,091 | $ | 258,258 | $ | 494,426 | $ | 478,489 | |||||||||||||||
| General corporate expense, net | (36,859 | ) | (9,957 | ) | (45,926 | ) | (20,786 | ) | |||||||||||||||
| Intercompany eliminations | (12,840 | ) | (11,198 | ) | (23,600 | ) | (21,169 | ) | |||||||||||||||
| Operating profit, as reported | $ | 210,392 | $ | 237,103 | $ | 424,900 | $ | 436,534 | |||||||||||||||
| Operating margin, as reported | 15.4 | % | 18.0 | % | 16.1 | % | 16.9 | % | |||||||||||||||
| Rationalization charges | 258 | — | (492 | ) | — | ||||||||||||||||||
| Acquisition related costs †| 4,379 | 2,100 | 5,055 | 5,758 | |||||||||||||||||||
| Acquisition termination fee | 23,000 | — | 23,000 | — | |||||||||||||||||||
| Operating profit, as adjusted | $ | 238,029 | $ | 239,203 | $ | 452,463 | $ | 442,292 | |||||||||||||||
| Operating margin, as adjusted | 17.4 | % | 18.2 | % | 17.1 | % | 17.1 | % | |||||||||||||||
| Share-based compensation | 4,632 | 3,751 | 9,759 | 6,886 | |||||||||||||||||||
| Depreciation and amortization | 35,033 | 32,551 | 69,291 | 64,652 | |||||||||||||||||||
| EBITDA, as adjusted | $ | 277,694 | $ | 275,505 | 0.8 | % | $ | 531,513 | $ | 513,830 | 3.4 | % | |||||||||||
| EBITDA margin, as adjusted | 20.3 | % | 20.9 | % | 20.1 | % | 19.9 | % | |||||||||||||||
| Sales change period over period | 48,350 | 61,829 | |||||||||||||||||||||
| EBITDA, as adjusted, change period over period | 2,189 | 17,683 | |||||||||||||||||||||
| Incremental EBITDA, as adjusted, as a percentage of change in sales | 4.5 | % | 28.6 | % | |||||||||||||||||||
| †Acquisition related costs include corporate level adjustments as well as segment operating adjustments | |||||||||||||||||||||||
| TopBuild Corp. | |||||||||||||||
| Same Branch and Acquisition Metrics (Unaudited) | |||||||||||||||
| (dollars in thousands) | |||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Net sales | |||||||||||||||
| Same branch: | |||||||||||||||
| Installation | $ | 820,243 | $ | 802,086 | $ | 1,592,184 | $ | 1,562,737 | |||||||
| Specialty Distribution | 585,181 | 574,488 | 1,128,626 | 1,132,862 | |||||||||||
| Eliminations | (78,197 | ) | (66,281 | ) | (144,017 | ) | (126,507 | ) | |||||||
| Total same branch | $ | 1,327,227 | $ | 1,310,293 | $ | 2,576,793 | $ | 2,569,092 | |||||||
| Acquisitions (a): | |||||||||||||||
| Installation | $ | 30,740 | $ | — | $ | 57,542 | $ | — | |||||||
| Specialty Distribution | 7,645 | — | 9,994 | — | |||||||||||
| Total acquisitions | 38,385 | — | 67,536 | — | |||||||||||
| Dispositions (b): | |||||||||||||||
| Installation | $ | — | $ | 6,969 | $ | — | $ | 13,408 | |||||||
| Total dispositions | — | 6,969 | — | 13,408 | |||||||||||
| Total net sales | $ | 1,365,612 | $ | 1,317,262 | $ | 2,644,329 | $ | 2,582,500 | |||||||
| EBITDA, as adjusted | |||||||||||||||
| Same branch | $ | 271,096 | $ | 274,113 | $ | 521,202 | $ | 511,305 | |||||||
| Acquisitions (a) | 6,598 | — | 10,311 | — | |||||||||||
| Dispositions (b) | — | 1,392 | — | 2,525 | |||||||||||
| Total | $ | 277,694 | $ | 275,505 | $ | 531,513 | $ | 513,830 | |||||||
| EBITDA, as adjusted, as a percentage of sales | |||||||||||||||
| Same branch (c) | 20.4 | % | 20.2 | % | |||||||||||
| Acquisitions (d) | 17.2 | % | 15.3 | % | |||||||||||
| Total (e) | 20.3 | % | 20.9 | % | 20.1 | % | 19.9 | % | |||||||
| As Adjusted Incremental EBITDA, as a percentage of change in sales | |||||||||||||||
| Same branch (f) | NM | 128.5 | |||||||||||||
| Acquisitions (d) | 17.2 | % | 15.3 | % | |||||||||||
| Total (g) | 4.5 | % | 28.6 | % | |||||||||||
| (a) Represents current year impact of acquisitions in their first twelve months | |||||||||||||||
| (b) Represents operating results in prior period previously classified as same branch | |||||||||||||||
| (c) Same branch metric, as adjusted, as a percentage of same branch sales | |||||||||||||||
| (d) Acquired metric, as adjusted, as a percentage of acquired sales | |||||||||||||||
| (e) Total EBITDA, as adjusted, as a percentage of total sales | |||||||||||||||
| (f) Change in same branch EBITDA, as adjusted, as a percentage of change in same branch sales | |||||||||||||||
| (g) Change in total EBITDA, as adjusted, as a percentage of change in total sales | |||||||||||||||
| NM Not Meaningful | |||||||||||||||
| 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, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Gross Profit Reconciliation | |||||||||||||||
| Net sales | $ | 1,365,612 | $ | 1,317,262 | $ | 2,644,329 | $ | 2,582,500 | |||||||
| Gross profit, as reported | $ | 423,922 | $ | 421,800 | $ | 811,072 | $ | 792,015 | |||||||
| Acquisition related costs | — | — | — | — | |||||||||||
| Gross profit, as adjusted | $ | 423,922 | $ | 421,800 | $ | 811,072 | $ | 792,015 | |||||||
| Gross margin, as reported | 31.0 | % | 32.0 | % | 30.7 | % | 30.7 | % | |||||||
| Gross margin, as adjusted | 31.0 | % | 32.0 | % | 30.7 | % | 30.7 | % | |||||||
| Selling, General and Administrative Expense Reconciliation | |||||||||||||||
| Selling, general, and administrative expense, as reported | $ | 213,530 | $ | 184,697 | $ | 386,172 | $ | 355,481 | |||||||
| Rationalization charges | 258 | — | (492 | ) | — | ||||||||||
| Acquisition related costs | 4,379 | 2,100 | 5,055 | 5,758 | |||||||||||
| Acquisition termination fee | 23,000 | — | 23,000 | — | |||||||||||
| Selling, general, and administrative expense, as adjusted | $ | 185,893 | $ | 182,597 | $ | 358,609 | $ | 349,723 | |||||||
| Operating Profit Reconciliation | |||||||||||||||
| Operating profit, as reported | $ | 210,392 | $ | 237,103 | $ | 424,900 | $ | 436,534 | |||||||
| Rationalization charges | 258 | — | (492 | ) | — | ||||||||||
| Acquisition related costs | 4,379 | 2,100 | 5,055 | 5,758 | |||||||||||
| Acquisition termination fee | 23,000 | — | 23,000 | — | |||||||||||
| Operating profit, as adjusted | $ | 238,029 | $ | 239,203 | $ | 452,463 | $ | 442,292 | |||||||
| Operating margin, as reported | 15.4 | % | 18.0 | % | 16.1 | % | 16.9 | % | |||||||
| Operating margin, as adjusted | 17.4 | % | 18.2 | % | 17.1 | % | 17.1 | % | |||||||
| Income Per Common Share Reconciliation | |||||||||||||||
| Income before income taxes, as reported | $ | 203,174 | $ | 223,150 | $ | 410,169 | $ | 406,465 | |||||||
| Rationalization charges | 258 | — | (492 | ) | — | ||||||||||
| Acquisition related costs | 4,379 | 2,100 | 5,055 | 5,758 | |||||||||||
| Acquisition termination fee | 23,000 | — | 23,000 | — | |||||||||||
| Income before income taxes, as adjusted | 230,811 | 225,250 | 437,732 | 412,223 | |||||||||||
| Tax rate at 26.0% | (60,011 | ) | (58,565 | ) | (113,810 | ) | (107,178 | ) | |||||||
| Income, as adjusted | $ | 170,800 | $ | 166,685 | $ | 323,922 | $ | 305,045 | |||||||
| Income per common share, as adjusted | $ | 5.42 | $ | 5.25 | $ | 10.22 | $ | 9.62 | |||||||
| Weighted average diluted common shares outstanding | 31,524,063 | 31,731,807 | 31,693,524 | 31,722,660 | |||||||||||
| TopBuild Corp. | |||||||||||||||
| Reconciliation of Adjusted EBITDA to Net Income (Unaudited) | |||||||||||||||
| (in thousands) | |||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Net income, as reported | $ | 150,723 | $ | 164,400 | $ | 303,104 | $ | 300,270 | |||||||
| Adjustments to arrive at EBITDA, as adjusted: | |||||||||||||||
| Interest expense and other, net | 7,218 | 13,953 | 14,731 | 30,069 | |||||||||||
| Income tax expense | 52,451 | 58,750 | 107,065 | 106,195 | |||||||||||
| Depreciation and amortization | 35,033 | 32,551 | 69,291 | 64,652 | |||||||||||
| Share-based compensation | 4,632 | 3,751 | 9,759 | 6,886 | |||||||||||
| Rationalization charges | 258 | — | (492 | ) | — | ||||||||||
| Acquisition related costs | 4,379 | 2,100 | 5,055 | 5,758 | |||||||||||
| Acquisition termination fee | 23,000 | — | 23,000 | — | |||||||||||
| EBITDA, as adjusted | $ | 277,694 | $ | 275,505 | $ | 531,513 | $ | 513,830 | |||||||
| TopBuild Corp. | |||||||||||||||||||
| Acquisition Adjusted Net Sales (Unaudited) | |||||||||||||||||||
| (in thousands) | |||||||||||||||||||
| 2023 | 2024 | Trailing Twelve Months Ended | |||||||||||||||||
| Q3 | Q4 | Q1 | Q2 | June 30, 2024 | |||||||||||||||
| Net sales | $ | 1,326,120 | $ | 1,286,074 | $ | 1,278,717 | $ | 1,365,612 | $ | 5,256,523 | |||||||||
| Acquisitions proforma adjustment †| 33,549 | 28,367 | 24,075 | 10,603 | 96,594 | ||||||||||||||
| Net sales, acquisition adjusted | $ | 1,359,669 | $ | 1,314,441 | $ | 1,302,792 | $ | 1,376,215 | $ | 5,353,117 | |||||||||
| †Trailing 12 months sales have been adjusted for the pro forma effect of acquired branches | |||||||||||||||||||
| TopBuild Corp. | |||||||
| 2024 Estimated Adjusted EBITDA Range (Unaudited) | |||||||
| (in millions) | |||||||
| Twelve Months Ending December 31, 2024 | |||||||
| Low | High | ||||||
| Estimated net income, as reported | $ | 603.0 | $ | 663.0 | |||
| Adjustments to arrive at estimated EBITDA, as adjusted: | |||||||
| Interest expense and other, net | 48.0 | 45.0 | |||||
| Income tax expense | 212.0 | 230.0 | |||||
| Depreciation and amortization | 144.0 | 141.0 | |||||
| Share-based compensation | 19.0 | 18.0 | |||||
| Acquisition related costs & rationalization charges | 29.0 | 28.0 | |||||
| Estimated EBITDA, as adjusted | $ | 1,055.0 | $ | 1,125.0 | |||
Investor Relations and Media Contact PI Aquino [email protected] 386-763-8801
