• TopBuild Reports First Quarter Results, Raises 2024 Outlook and Announces $1B Share Repurchase Authorization

    Источник: Nasdaq GlobeNewswire / 07 май 2024 06:45:01   America/New_York

    First quarter sales grow 1.1% to $1.3 billion

    Gross margin expands 100 basis points to 30.3%

    Adjusted EBITDA margin expands 100 basis points to 19.8%

    DAYTONA BEACH, Fla., May 07, 2024 (GLOBE NEWSWIRE) -- TopBuild Corp. (NYSE: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 first quarter ended March 31, 2024.

    Robert Buck, President and Chief Executive Officer, said, “We are proud of our first quarter results, which reflect the strength of our business, our ongoing drive to improve, and the hard work of our team. We continue to focus on growing the business – both organically and through M&A – and delivering operational improvements, as evidenced by the 100 basis point expansion in our first quarter adjusted EBITDA margin year over year.”

    First Quarter Financial Highlights
    (comparisons are to the quarter ended March 31, 2023)

    3 Months Ended 3/31/24ReportedChange
    Sales$1,278,7171.1%
    Gross Margin30.3%100 bps
    SG&A as % of revenue13.5%0 bps
    Operating Profit$214,5087.6%
    Operating Margin16.8%100 bps
    Net Income$152,38112.2%
    Net Income per diluted share$4.7911.9%
       
    3 Months Ended 3/31/24AdjustedChange
    Sales$1,278,7171.1%
    Gross Margin30.3%100 bps
    SG&A as % of revenue13.5%30 bps
    Operating Profit$214,4345.6%
    Operating Margin16.8%70 bps
    Net Income$153,12210.7%
    Net Income per diluted share$4.8110.3%
    EBITDA$253,8186.5%
    EBITDA Margin19.8%100 bps
       

    Operating Segment Highlights ($ in 000s)
    (comparisons are to the period ended March 31, 2023)

    Installation3 Months
    Ended
    3/31/24    		 Specialty
    Distribution    		3 Months
    Ended
    3/31/24
    Sales$798,743 Sales$545,794
    Change  Change 
    Volume0.3% Volume(4.2)%
    Price1.2% Price1.5%
    M&A3.5% M&A0.4%
    Dispositions(0.9)% Dispositions0.0%
    Total Change4.1% Total Change(2.3)%
    Operating Margin19.6% Operating Margin14.2%
    Change50 bps Change110 bps
    Adj. Operating Margin19.6% Adj. Operating Margin14.1%
    Change40 bps Change90 bps
    Adj. EBITDA Margin22.0% Adj. EBITDA Margin16.9%
    Change60 bps Change110 bps
         

    Capital Allocation

    2024 Acquisitions
    Year to date, the Company has announced the acquisition of five insulation companies which are expected to generate approximately $68 million in annual revenue. They are listed in the chart below.

       
     TTM Revenue  
    Company ($ millions)Month
    Brabble Insulation (I)$5.2February
    Morris Black & Sons (I)$3.8March
    Pest Control Insulation (D)$25.4March
    Green Space Insulation (I)$6.0April
    Insulation Works (I)$28.0May
    Total $68.4 
    I = Installation, D = Specialty Distribution 
       

    “We are extremely disciplined regarding capital allocation. We will continue to prioritize reinvesting our free cash flow to make acquisitions and drive increased shareholder value. With a total addressable market of more than $18 billion across our highly fragmented end markets, we are actively evaluating a strong pipeline of opportunities. Year-to-date, we have announced five acquisitions totaling approximately $68 million in annual revenue,” continued Buck.

    New Share Repurchase Authorization
    TopBuild also announced today that its Board of Directors authorized the repurchase of up to $1.0 billion of the Company’s outstanding common stock. The new authorization is in addition to the $154.0 million remaining from the prior authorization, bringing the total availability for share repurchases to $1.15 billion.

    “Our new repurchase authorization demonstrates management and our Board of Directors’ continued confidence in and support of our long-term strategy and the importance of returning capital to shareholders,” Buck said.

    2024 Outlook1
    “We are confident in our ability to continue delivering strong performance in 2024. Our unique business model, our commitment to driving shareholder value, and our ability to successfully navigate changes in the macro environment position us extremely well for the long term,” concluded Buck.

    The Company’s raised its outlook for 2024 in light of strong profitability in the first quarter and to incorporate the acquisitions completed to date in 2024.

    2024LowHigh
    Sales$5,400 $5,600 
    Adjusted EBITDA*$1,065 $1,155 


    * See table for Adjusted EBITDA reconciliation.

    1 This outlook reflects management’s current view of present and future market conditions and is based on assumptions such as housing starts, general and administrative expenses, 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 first quarter 2024 financial results is scheduled for today, Tuesday, May 7, 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. In addition, a copy of management’s formal remarks and a presentation will be available immediately prior to the conference call on www.topbuild.com.

    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 240 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 March 31, 
      2024  2023 
    Net sales $1,278,717  $1,265,238 
    Cost of sales  891,567   895,023 
    Gross profit  387,150   370,215 
           
    Selling, general, and administrative expense  172,642   170,784 
    Operating profit  214,508   199,431 
           
    Other income (expense), net:      
    Interest expense  (18,795)  (18,039)
    Other, net  11,282   1,923 
    Other expense, net  (7,513)  (16,116)
    Income before income taxes  206,995   183,315 
           
    Income tax expense  (54,614)  (47,445)
    Net income $152,381  $135,870 
           
    Net income per common share:      
    Basic $4.82  $4.31 
    Diluted $4.79  $4.28 
           
    Weighted average shares outstanding:      
    Basic  31,641,454   31,550,658 
    Diluted  31,843,818   31,713,239 
           


    TopBuild Corp.       
    Condensed Consolidated Statements of Comprehensive Income (Unaudited)
    (in thousands)       
            
      Three Months Ended March 31, 
      2024 2023
    Net income $152,381  $135,870 
    Other comprehensive (loss) income:       
    Foreign currency translation adjustment  (4,092)  1,753 
    Comprehensive income $148,289  $137,623 
            


    TopBuild Corp.        
    Condensed Consolidated Balance Sheets and Other Financial Data (Unaudited)       
    (dollars in thousands)        
      As of
      March 31, 2024 December 31, 2023
    ASSETS        
    Current assets:        
    Cash and cash equivalents $968,809  $848,565 
    Receivables, net of an allowance for credit losses of $22,398 at March 31, 2024, and $23,948 at December 31, 2023  829,221   799,009 
    Inventories  375,056   364,731 
    Prepaid expenses and other current assets  29,376   36,939 
    Total current assets  2,202,462   2,049,244 
             
    Right of use assets  201,392   204,629 
    Property and equipment, net  266,422   264,487 
    Goodwill  2,052,319   2,042,568 
    Other intangible assets, net  578,335   591,058 
    Other assets  9,522   10,865 
    Total assets $5,310,452  $5,162,851 
             
    LIABILITIES        
    Current liabilities:        
    Accounts payable $467,863  $469,585 
    Current portion of long-term debt  46,230   47,039 
    Accrued liabilities  201,402   187,217 
    Short-term operating lease liabilities  67,041   65,780 
    Short-term finance lease liabilities  1,829   1,917 
    Total current liabilities  784,365   771,538 
             
    Long-term debt  1,362,498   1,373,028 
    Deferred tax liabilities, net  243,622   243,930 
    Long-term portion of insurance reserves  60,179   58,783 
    Long-term operating lease liabilities  142,552   146,213 
    Long-term finance lease liabilities  3,716   4,150 
    Other liabilities  1,487   1,554 
    Total liabilities  2,598,419   2,599,196 
             
    EQUITY  2,712,033   2,563,655 
    Total liabilities and equity $5,310,452  $5,162,851 
             
      As of March 31, 
      2024 2023
    Other Financial Data        
    Receivable days  52   52 
    Inventory days  38   43 
    Accounts payable days  62   60 
    Receivables, net plus inventories less accounts payable $736,414  $805,225 
    Receivables, net plus inventories less accounts payable as a percent of sales (TTM) †  14.0%  15.6%
             
    † 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)      
           
      Three Months Ended March 31, 
      2024 2023
    Cash Flows Provided by (Used in) Operating Activities:              
    Net income $152,381  $135,870 
    Adjustments to reconcile net income to net cash provided by operating activities:      
    Depreciation and amortization  34,257   32,100 
    Share-based compensation  5,127   3,135 
    (Gain)/loss on sale of assets  (561)  185 
    Amortization of debt issuance costs  720   720 
    Provision for bad debt expense  4,464   1,338 
    Provision for inventory obsolescence  2,902   1,642 
    Deferred income taxes, net  (240)  563 
    Change in certain assets and liabilities:      
    Receivables, net  (28,486)  (10,847)
    Inventories  (12,056)  20,096 
    Prepaid expenses and other current assets  7,541   11,579 
    Accounts payable  (2,659)  (25,480)
    Accrued liabilities  16,170   (3,339)
    Other, net  (783)  2,239 
    Net cash provided by operating activities  178,777   169,801 
           
    Cash Flows Provided by (Used in) Investing Activities:      
    Purchases of property and equipment  (19,881)  (15,580)
    Acquisition of businesses, net of cash acquired  (22,240)  (45,845)
    Proceeds from sale of assets  1,608   455 
    Net cash used in investing activities  (40,513)  (60,970)
           
    Cash Flows Provided by (Used in) Financing Activities:      
    Repayment of long-term debt  (12,059)  (9,743)
    Taxes withheld and paid on employees' equity awards  (6,059)  (6,350)
    Exercise of stock options  1,020   1,029 
    Net cash used in by financing activities  (17,098)  (15,064)
    Impact of exchange rate changes on cash  (922)  (58)
    Net increase in cash and cash equivalents  120,244   93,709 
    Cash and cash equivalents - Beginning of period  848,565   240,069 
    Cash and cash equivalents - End of period $968,809  $333,778 
           
    Supplemental disclosure of noncash activities:      
    Leased assets obtained in exchange for new operating lease liabilities $13,737  $18,271 
    Accruals for property and equipment  307   835 
           


    TopBuild Corp.           
    Segment Data (Unaudited)           
    (dollars in thousands)           
                
      Three Months Ended March 31,     
       2024   2023  Change  
    Installation           
    Sales $798,743  $767,090   4.1 %
                
    Operating profit, as reported $156,757  $146,897     
    Operating margin, as reported  19.6 % 19.1 %   
                
    Acquisition related costs  45   263     
    Operating profit, as adjusted $156,802  $147,160     
    Operating margin, as adjusted  19.6 % 19.2 %   
                
    Share-based compensation  330   379     
    Depreciation and amortization  18,267   16,493     
    EBITDA, as adjusted $175,399  $164,032   6.9 %
    EBITDA margin, as adjusted  22.0 % 21.4 %   
                
    Specialty Distribution           
    Sales $545,794  $558,375   (2.3)%
                
    Operating profit, as reported $77,579  $73,333     
    Operating margin, as reported  14.2 % 13.1 %   
                
    Rationalization charges  (750)  —     
    Acquisition related costs  —   340     
    Operating profit, as adjusted $76,829  $73,673     
    Operating margin, as adjusted  14.1 % 13.2 %   
                
    Share-based compensation  433   238     
    Depreciation and amortization  14,836   14,572     
    EBITDA, as adjusted $92,098  $88,483   4.1 %
    EBITDA margin, as adjusted  16.9 % 15.8 %   
                


    TopBuild Corp.           
    Adjusted EBITDA (Unaudited)           
    (dollars in thousands)           
                
      Three Months Ended March 31,      
      2024 2023  Change 
    Total net sales           
    Sales before eliminations $1,344,537  $1,325,465      
    Intercompany eliminations  (65,820)  (60,227)     
    Net sales after eliminations $1,278,717  $1,265,238   1.1 %
                
    Operating profit, as reported - segments $234,336  $220,230      
    General corporate expense, net  (9,067)  (10,828)     
    Intercompany eliminations  (10,761)  (9,971)     
    Operating profit, as reported $214,508  $199,431      
    Operating margin, as reported  16.8 % 15.8 %    
                
    Rationalization charges  (750)  —      
    Acquisition related costs †  676   3,658      
    Operating profit, as adjusted $214,434  $203,089      
    Operating margin, as adjusted  16.8 % 16.1 %    
                
    Share-based compensation  5,127   3,135      
    Depreciation and amortization  34,257   32,100      
    EBITDA, as adjusted $253,818  $238,324   6.5 %
    EBITDA margin, as adjusted  19.8 % 18.8 %    
                
    Sales change period over period  13,479         
    EBITDA, as adjusted, change period over period  15,494         
    Incremental EBITDA, as adjusted, as a percentage of change in sales  114.9 %       
                
    † 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 March 31,  
      2024 2023 
    Net sales       
    Same branch:       
    Installation $771,942  $760,652  
    Specialty Distribution  543,445   558,375  
    Eliminations  (65,820)  (60,227) 
    Total same branch $1,249,567  $1,258,800  
            
    Acquisitions (a):       
    Installation $26,801  $—  
    Specialty Distribution  2,349   —  
    Total acquisitions  29,150   —  
            
    Dispositions (b):       
    Installation $—  $6,438  
    Total dispositions  —   6,438  
    Total net sales $1,278,717  $1,265,238  
            
    EBITDA, as adjusted       
    Same branch $250,105  $237,190  
    Acquisitions (a)  3,713   —  
    Dispositions (b)  —   1,134  
    Total $253,818  $238,324  
            
    EBITDA, as adjusted, as a percentage of sales       
    Same branch (c)  20.0 %   
    Acquisitions (d)  12.7 %   
    Total (e)  19.8 % 18.8 %
            
    As Adjusted Incremental EBITDA, as a percentage of change in sales       
    Same branch (f)  NM     
    Acquisitions (d)  12.7 %   
    Total (g)  114.9 %   
            
    (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 March 31,  
      2024 2023 
    Gross Profit Reconciliation       
            
    Net sales $1,278,717  $1,265,238  
            
    Gross profit, as reported $387,150  $370,215  
            
    Acquisition related costs  —   —  
    Gross profit, as adjusted $387,150  $370,215  
            
    Gross margin, as reported  30.3 % 29.3 %
    Gross margin, as adjusted  30.3 % 29.3 %
            
    Selling, General and Administrative Expense Reconciliation       
            
    Selling, general, and administrative expense, as reported $172,642  $170,784  
            
    Rationalization charges  (750)  —  
    Acquisition related costs  676   3,658  
    Selling, general, and administrative expense, as adjusted $172,716  $167,126  
            
    Operating Profit Reconciliation       
            
    Operating profit, as reported $214,508  $199,431  
            
    Rationalization charges  (750)  —  
    Acquisition related costs  676   3,658  
    Operating profit, as adjusted $214,434  $203,089  
            
    Operating margin, as reported  16.8 % 15.8 %
    Operating margin, as adjusted  16.8 % 16.1 %
            
    Income Per Common Share Reconciliation       
            
    Income before income taxes, as reported $206,995  $183,315  
            
    Rationalization charges  (750)  —  
    Acquisition related costs  676   3,658  
    Income before income taxes, as adjusted  206,921   186,973  
            
    Tax rate at 26.0%  (53,799)  (48,613) 
    Income, as adjusted $153,122  $138,360  
            
    Income per common share, as adjusted $4.81  $4.36  
            
    Weighted average diluted common shares outstanding  31,843,818   31,713,239  
            


    TopBuild Corp.       
    Reconciliation of Adjusted EBITDA to Net Income (Unaudited)       
    (in thousands)       
            
      Three Months Ended March 31, 
      2024 2023
    Net income, as reported $152,381  $135,870 
    Adjustments to arrive at EBITDA, as adjusted:       
    Interest expense and other, net  7,513   16,116 
    Income tax expense  54,614   47,445 
    Depreciation and amortization  34,257   32,100 
    Share-based compensation  5,127   3,135 
    Rationalization charges  (750)  — 
    Acquisition related costs  676   3,658 
    EBITDA, as adjusted $253,818  $238,324 
            


    TopBuild Corp.  
    Acquisition Adjusted Net Sales (Unaudited) 
    (in thousands) 
     2023 2024 Trailing Twelve
    Months Ended
     Q2 Q3 Q4 Q1 March 31, 2024
    Net sales$1,317,262  $1,326,120  $1,286,074  $1,278,717  $5,208,173 
    Acquisitions proforma adjustment † 35,527   13,815   9,525   5,691   64,558 
    Net sales, acquisition adjusted$1,352,789  $1,339,935  $1,295,599  $1,284,408  $5,272,731 
                        
                        
    † 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$611.0  $689.0 
    Adjustments to arrive at estimated EBITDA, as adjusted:      
    Interest expense and other, net 47.0   43.0 
    Income tax expense 216.0   241.0 
    Depreciation and amortization 143.0   139.0 
    Share-based compensation 19.0   17.0 
    Acquisition related costs 29.0   26.0 
    Estimated EBITDA, as adjusted$1,065.0  $1,155.0 

    Investor Relations and Media Contact
PI Aquino        
pi.aquino@topbuild.com
386-763-8801

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