4Q Highlights
- Sales increase 47.4% to $1.1 billion, same branch revenue increases 12.5%
- Net income increases 10.7% to $78.4 million, and 44.9% on an adjusted basis
- $2.37 net income per diluted share, $3.12 on an adjusted basis
- Adjusted EBITDA margin expands 30 basis points to 17.1%, 19.0% on a same branch basis, up 220 basis points
| Provides 2022 Sales, Adjusted EBITDA Guidance and Long-Term Assumptions |
DAYTONA BEACH, Fla., Feb. 22, 2022 (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 fourth quarter ended December 31, 2021.
Robert Buck, President and Chief Executive Officer, stated, “We are pleased with our fourth quarter results. Our same branch adjusted EBITDA margin was a healthy 19.0% with same branch incremental adjusted margin of 36.0%. The integration of DI, while in the early stages, is proceeding ahead of expectations and we are even more confident we will achieve the $35 million to $40 million of synergies forecasted when we first announced this transaction.”
Fourth Quarter Financial Highlights
(unless otherwise indicated, comparisons are to the quarter ended December 31, 2020)
| 3 Months Ended 12/31/21 | Reported | Change | |
| Sales | $1,063,398 | 47.4% | |
| Gross Margin | 26.6% | (80) bps | |
| SG&A | $164,718 | 73.5% | |
| SG&A as % of revenue | 15.5% | 230 bps | |
| Operating Profit | $118,443 | 14.9% | |
| Operating Margin | 11.1% | (320) bps | |
| Net Income | $78,360 | 10.7% | |
| Net Income per diluted share | $2.37 | 11.0% | |
| 3 Months Ended 12/31/21 | Adjusted | Change | |
| Sales | $1,063,398 | 47.4% | |
| Gross Margin | 28.1% | 60 bps | |
| SG&A | $148,268 | 57.0% | |
| SG&A as % of revenue | 13.9% | 80 bps | |
| Operating Profit | $150,746 | 45.0% | |
| Operating Margin | 14.2% | (20) bps | |
| Net Income | $103,308 | 44.9% | |
| Net Income per diluted share | $3.12 | 45.1% | |
| EBITDA | $182,072 | 49.9% | |
| EBITDA Margin | 17.1% | 30 bps | |
| EBITDA Margin, Same Branch | 19.0% | 220 bps |
“2021 was a strong year for TopBuild with solid top line growth and margin expansion within our legacy business,” Buck added. “Our team did an outstanding job managing multiple material cost increases while also balancing strong demand against persistent supply and labor constraints. During the year we also completed 11 acquisitions which are expected to contribute over $1 billion of annual revenue.
“Looking at 2022, we expect demand to remain solid in all three of the end-markets we serve: residential, commercial and industrial. Our focus throughout all areas of our business remains unchanged: driving top line growth, continuing the successful integration of DI, and improving operational efficiencies.”
Full Year 2021 Financial Highlights
(unless otherwise indicated, comparisons are to twelve months ended December 31, 2020)
| 12 Months Ended 12/31/21 | Reported | Change | |
| Sales | $3,486,207 | 28.3% | |
| Gross Margin | 27.9% | 40 bps | |
| SG&A | $497,970 | 27.3% | |
| SG&A as % of revenue | 14.3% | (10) bps | |
| Operating Profit | $476,419 | 34.2% | |
| Operating Margin | 13.7% | 60 bps | |
| Net Income | $324,016 | 31.2% | |
| Net Income per diluted share | $9.78 | 31.8% | |
| 12 Months Ended 12/31/21 | Adjusted | Change | |
| Sales | $3,486,207 | 28.3% | |
| Gross Margin | 28.4% | 90 bps | |
| SG&A | $475,592 | 22.2% | |
| SG&A as % of revenue | 13.6% | 70 bps | |
| Operating Profit | $515,242 | 43.4% | |
| Operating Margin | 14.8% | 160 bps | |
| Net Income | $359,716 | 48.3% | |
| Net Income per diluted share | $10.85 | 49.0% | |
| EBITDA | $605,948 | 38.7% | |
| EBITDA Margin | 17.4% | 130 bps | |
| EBITDA Margin, Same Branch | 18.1% | 200 bps | |
Operating Segment Highlights ($ in 000s)
(comparisons are to the period ended December 31, 2020)
| Installation | 3 Months Ended 12/31/21 | 12 Months Ended 12/31/21 | Specialty Distribution | 3 Months Ended 12/31/21 | 12 Months Ended 12/31/21 | |
| Sales | $627,123 | $2,378,401 | Sales | $485,813 | $1,287,176 | |
| Change | Change | |||||
| Volume | 1.2% | 4.5% | Volume | -6.8% | 3.3% | |
| Price | 11.0% | 6.5% | Price | 22.4% | 13.7% | |
| M&A | 11.1% | 11.4% | M&A | 77.6% | 22.0% | |
| Total Change | 23.3% | 22.4% | Total Change | 93.1% | 39.0% | |
| Operating Margin | 16.9% | 16.1% | Operating Margin | 9.0% | 13.2% | |
| Change | 90 bps | 90 bps | Change | (440) bps | 70 bps | |
| Adj. Operating Margin | 17.0% | 16.2% | Adj. Operating Margin | 12.4% | 14.4% | |
| Change | 90 bps | 90 bps | Change | (100) bps | 190 bps | |
| Adj. EBITDA Margin | 19.4% | 18.7% | Adj. EBITDA Margin | 15.0% | 16.0% | |
| Change | 80 bps | 80 bps | Change | 70 bps | 230 bps |
| Capital Allocation | ||||
| TTM Revenue at | Month | |||
| 2021 Acquisitions | Acquisition ($ millions) | Acquired | Business Focus | |
| LCR Contractors (I) | $58.0 | January | Heavy Commercial/Fireproofing | |
| Ozark Foam (I) | $7.7 | March | Residential, primarily spray foam | |
| American Building Systems (I&D) | $144.0 | April | Residential (94%) & Distribution (6%) | |
| Creative Conservation (I) | $7.4 | April | Residential insulation | |
| RJ Insulation (I) | $4.0 | June | Residential, shower doors/mirrors | |
| Valley Gutter Supply (D) | $10.0 | August | Specialty distributor and fabricator | |
| California Building Products (I) | $18.0 | October | Residential and light commercial | |
| Distribution International (D) | $747.0 | October | Specialty distributor and fabricator | |
| Tonks Insulation (I) | $4.8 | November | Residential insulation | |
| Shepherds Insulation (I) | $1.9 | November | Residential insulation | |
| Insulating Products (D) | $11.0 | December | Residential distributor | |
| Total | $1,013.8 | |||
I = Installation
D = Distribution
“We remain focused on acquiring quality installation and specialty distribution companies that fit within our core insulation businesses. Our pipeline is robust, and our team is focused on expanding our presence in all three end markets we serve,” stated Buck.
Share repurchases
In 2021, the Company repurchased a total of 183,136 shares of its common stock for approximately $35.6 million.
2022 Outlook
Sales and Adjusted EBITDA Guidance (1)
($ in millions)
| 2022 | Low | High | |||
| Sales | $ | 4,500 | $ | 4,650 | |
| Adjusted EBITDA* | $ | 770 | $ | 820 | |
*See table for adjusted EBITDA reconciliation.
| Assumptions(1) ($ in millions) | |||||
| 2022 | Low | High | |||
| Estimated net income | $ | 423.0 | $ | 470.1 | |
| Interest Expense and other, net | $ | 50.3 | $ | 46.2 | |
| Income tax expense | $ | 148.6 | $ | 165.2 | |
| Depreciation and Amortization | $ | 126.4 | $ | 121.3 | |
| Share based compensation | $ | 13.7 | $ | 11.2 | |
| Acquisition related costs | $ | 8.0 | $ | 6.0 | |
| Long-Term Assumptions (3-Years) (1) | ||
| Metric | ||
| Working Capital (% of LTM Sales) | 11.0% to 13.0% | |
| CapEx (% of Sales) | 1.5% to 2.0% | |
| Non-Residential Revenue Growth (Organic) | 5.0% to 7.5% | |
| Normalized Tax Rate | 25.0% to 27.0% | |
| 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 houses insulated | $107 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 2021 financial results is scheduled for today, Tuesday, February 22, 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 that summarizes management’s formal remarks 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 building material products to the construction industry in the United States and Canada. We provide insulation installation services nationwide through our contractor services business which has approximately 235 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 175 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 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 Contact
Tabitha Zane
tabitha.zane@topbuild.com
386-763-8801
(tables follow)
| TopBuild Corp. | |||||||||||||||||
| Consolidated Statements of Operations | |||||||||||||||||
| (in thousands, except share and per common share amounts) | |||||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||
| Net sales | $ | 1,063,398 | $ | 721,487 | $ | 3,486,207 | $ | 2,718,038 | |||||||||
| Cost of sales | 780,237 | 523,467 | 2,511,818 | 1,971,677 | |||||||||||||
| Gross profit | 283,161 | 198,020 | 974,389 | 746,361 | |||||||||||||
| Selling, general, and administrative expense | 164,718 | 94,943 | 497,970 | 391,315 | |||||||||||||
| Operating profit | 118,443 | 103,077 | 476,419 | 355,046 | |||||||||||||
| Other income (expense), net: | |||||||||||||||||
| Interest expense | (10,933 | ) | (7,745 | ) | (29,143 | ) | (32,456 | ) | |||||||||
| Loss on extinguishment of debt | 25 | — | (13,837 | ) | (233 | ) | |||||||||||
| Other, net | (207 | ) | 85 | 4 | 733 | ||||||||||||
| Other expense, net | (11,115 | ) | (7,660 | ) | (42,976 | ) | (31,956 | ) | |||||||||
| Income before income taxes | 107,328 | 95,417 | 433,443 | 323,090 | |||||||||||||
| Income tax expense | (28,968 | ) | (24,660 | ) | (109,427 | ) | (76,067 | ) | |||||||||
| Net income | $ | 78,360 | $ | 70,757 | $ | 324,016 | $ | 247,023 | |||||||||
| Net income per common share: | |||||||||||||||||
| Basic | $ | 2.39 | $ | 2.16 | $ | 9.88 | $ | 7.50 | |||||||||
| Diluted | $ | 2.37 | $ | 2.13 | $ | 9.78 | $ | 7.42 | |||||||||
| Weighted average shares outstanding: | |||||||||||||||||
| Basic | 32,753,719 | 32,789,911 | 32,801,906 | 32,917,971 | |||||||||||||
| Diluted | 33,117,227 | 33,189,104 | 33,146,171 | 33,299,986 | |||||||||||||
| TopBuild Corp. | |||||||||||||||
| Consolidated Statements of Comprehensive Income | |||||||||||||||
| (in thousands) | |||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||
| Net income | $ | 78,360 | $ | 70,757 | $ | 324,016 | $ | 247,023 | |||||||
| Other comprehensive income (loss): | |||||||||||||||
| Foreign currency translation adjustment | (6,634 | ) | — | (6,634 | ) | — | |||||||||
| Comprehensive income | $ | 71,726 | $ | 70,757 | $ | 317,382 | $ | 247,023 | |||||||
| TopBuild Corp. | |||||||
| Consolidated Balance Sheets and Other Financial Data (Unaudited) | |||||||
| (dollars in thousands) | |||||||
| As of December 31, | |||||||
| ASSETS | 2021 | 2020 | |||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 139,779 | $ | 330,007 | |||
| Receivables, net of an allowance for credit losses of $8,798 at December 31, 2021, and $6,926 at December 31, 2020 | 668,419 | 427,340 | |||||
| Inventories, net | 352,801 | 161,369 | |||||
| Prepaid expenses and other current assets | 26,692 | 17,689 | |||||
| Total current assets | 1,187,691 | 936,405 | |||||
| Right of use assets | 177,177 | 83,490 | |||||
| Property and equipment, net | 244,574 | 180,053 | |||||
| Goodwill | 1,949,763 | 1,410,685 | |||||
| Other intangible assets, net | 684,209 | 190,605 | |||||
| Deferred tax assets, net | 1,905 | 2,728 | |||||
| Other assets | 13,211 | 11,317 | |||||
| Total assets | $ | 4,258,530 | $ | 2,815,283 | |||
| LIABILITIES | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 461,917 | $ | 331,710 | |||
| Current portion of long-term debt | 38,640 | 23,326 | |||||
| Accrued liabilities | 175,891 | 107,949 | |||||
| Short-term operating lease liabilities | 54,591 | 33,492 | |||||
| Short-term finance lease liabilities | 2,387 | — | |||||
| Total current liabilities | 733,426 | 496,477 | |||||
| Long-term debt | 1,454,483 | 683,396 | |||||
| Deferred tax liabilities, net | 248,243 | 168,568 | |||||
| Long-term portion of insurance reserves | 51,875 | 50,657 | |||||
| Long-term operating lease liabilities | 125,339 | 53,749 | |||||
| Long-term finance lease liabilities | 7,770 | — | |||||
| Other liabilities | 960 | 13,642 | |||||
| Total liabilities | 2,622,096 | 1,466,489 | |||||
| EQUITY | 1,636,434 | 1,348,794 | |||||
| Total liabilities and equity | $ | 4,258,530 | $ | 2,815,283 | |||
| As of December 31, | |||||||
| 2021 | 2020 | ||||||
| Other Financial Data | |||||||
| Receivable days | 48 | 48 | |||||
| Inventory days | 43 | 30 | |||||
| Accounts payable days | 65 | 76 | |||||
| Receivables, net plus inventories, net less accounts payable | $ | 559,303 | $ | 256,999 | |||
| Receivables, net plus inventories, net less accounts payable as a percent of sales (TTM) † | 13.3 | % | 9.3 | % | |||
| † Trailing 12 months sales have been adjusted for the pro forma effect of acquired branches | |||||||
| TopBuild Corp. | ||||||||
| Consolidated Statement of Cash Flows | ||||||||
| (in thousands) | ||||||||
| Year Ended December 31, | ||||||||
| 2021 | 2020 | |||||||
| Cash Flows Provided by (Used in) Operating Activities: | ||||||||
| Net income | $ | 324,016 | $ | 247,023 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 79,390 | 62,410 | ||||||
| Share-based compensation | 11,316 | 14,752 | ||||||
| Loss on extinguishment of debt | 13,837 | 233 | ||||||
| Loss (gain) on sale or abandonment of property and equipment | 1,356 | (88 | ) | |||||
| Amortization of debt issuance costs | 2,036 | 1,491 | ||||||
| Provision for bad debt expense | 7,304 | 6,270 | ||||||
| Loss from inventory obsolescence | 2,637 | 2,512 | ||||||
| Loss on foreign exchange | 255 | — | ||||||
| Deferred income taxes, net | (2,818 | ) | (4,070 | ) | ||||
| Change in certain assets and liabilities | ||||||||
| Receivables, net | (69,042 | ) | 2,612 | |||||
| Inventories, net | (46,518 | ) | (11,843 | ) | ||||
| Prepaid expenses and other current assets | 558 | (460 | ) | |||||
| Accounts payable | 54,961 | 16,844 | ||||||
| Accrued liabilities | 24,816 | 20,545 | ||||||
| Payment of contingent consideration | (22 | ) | (413 | ) | ||||
| Other, net | (1,057 | ) | 66 | |||||
| Net cash provided by operating activities | 403,025 | 357,884 | ||||||
| Cash Flows Provided by (Used in) Investing Activities: | ||||||||
| Purchases of property and equipment | (55,546 | ) | (40,938 | ) | ||||
| Acquisition of businesses, net of cash acquired | (1,267,114 | ) | (83,408 | ) | ||||
| Proceeds from sale of property and equipment | 415 | 2,463 | ||||||
| Net cash used in investing activities | (1,322,245 | ) | (121,883 | ) | ||||
| Cash Flows Provided by (Used in) Financing Activities: | ||||||||
| Proceeds from issuance of long-term debt | 1,218,750 | 300,000 | ||||||
| Repayment of long-term debt | (433,070 | ) | (324,948 | ) | ||||
| Payment of debt issuance costs | (14,965 | ) | (2,280 | ) | ||||
| Taxes withheld and paid on employees' equity awards | (8,805 | ) | (14,932 | ) | ||||
| Exercise of stock options | 3,303 | 1,438 | ||||||
| Repurchase of shares of common stock | (35,556 | ) | (49,151 | ) | ||||
| Payment of contingent consideration | (650 | ) | (928 | ) | ||||
| Net cash provided by (used in) financing activities | 729,007 | (90,801 | ) | |||||
| Impact of foreign currency on cash | (15 | ) | — | |||||
| Net (decrease) increase in cash and cash equivalents | (190,228 | ) | 145,200 | |||||
| Cash and cash equivalents- Beginning of period | 330,007 | 184,807 | ||||||
| Cash and cash equivalents- End of period | $ | 139,779 | $ | 330,007 | ||||
| Supplemental disclosure of cash paid for: | ||||||||
| Interest | $ | 22,144 | $ | 30,896 | ||||
| Income taxes | 109,179 | 77,689 | ||||||
| Supplemental disclosure of noncash activities: | ||||||||
| Leased assets obtained in exchange for new operating lease liabilities | $ | 131,909 | $ | 38,646 | ||||
| Leased assets obtained in exchange for new finance lease liabilities | 10,469 | — | ||||||
| Accruals for property and equipment | 1,060 | 645 | ||||||
| TopBuild Corp. | ||||||||||||||||||||||
| Segment Data (Unaudited) | ||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||
| 2021 | 2020 | Change | 2021 | 2020 | Change | |||||||||||||||||
| Installation | ||||||||||||||||||||||
| Sales | $ | 627,123 | $ | 508,812 | 23.3 | % | $ | 2,378,401 | $ | 1,943,461 | 22.4 | % | ||||||||||
| Operating profit, as reported | $ | 105,975 | $ | 81,657 | $ | 383,722 | $ | 294,793 | ||||||||||||||
| Operating margin, as reported | 16.9 | % | 16.0 | % | 16.1 | % | 15.2 | % | ||||||||||||||
| Rationalization charges | — | — | — | 866 | ||||||||||||||||||
| Acquisition related costs | 362 | — | 1,642 | 4 | ||||||||||||||||||
| COVID-19 pay | — | 363 | 605 | 1,278 | ||||||||||||||||||
| Operating profit, as adjusted | $ | 106,337 | $ | 82,020 | $ | 385,969 | $ | 296,941 | ||||||||||||||
| Operating margin, as adjusted | 17.0 | % | 16.1 | % | 16.2 | % | 15.3 | % | ||||||||||||||
| Share-based compensation | 270 | 298 | 1,157 | 1,555 | ||||||||||||||||||
| Depreciation and amortization | 15,227 | 12,146 | 57,815 | 50,265 | ||||||||||||||||||
| EBITDA, as adjusted | $ | 121,834 | $ | 94,464 | 29.0 | % | $ | 444,941 | $ | 348,761 | 27.6 | % | ||||||||||
| EBITDA margin, as adjusted | 19.4 | % | 18.6 | % | 18.7 | % | 17.9 | % | ||||||||||||||
| Specialty Distribution | ||||||||||||||||||||||
| Sales | $ | 485,813 | $ | 251,535 | 93.1 | % | $ | 1,287,176 | $ | 926,207 | 39.0 | % | ||||||||||
| Operating profit, as reported | $ | 43,964 | $ | 33,731 | $ | 169,368 | $ | 115,343 | ||||||||||||||
| Operating margin, as reported | 9.0 | % | 13.4 | % | 13.2 | % | 12.5 | % | ||||||||||||||
| Rationalization charges | — | — | — | 783 | ||||||||||||||||||
| Acquisition related costs | 530 | — | 530 | — | ||||||||||||||||||
| Acquisition purchase accounting (inventory step-up) | 15,853 | — | 15,853 | — | ||||||||||||||||||
| COVID-19 pay | — | 21 | 54 | 90 | ||||||||||||||||||
| Operating profit, as adjusted | $ | 60,347 | $ | 33,752 | $ | 185,805 | $ | 116,216 | ||||||||||||||
| Operating margin, as adjusted | 12.4 | % | 13.4 | % | 14.4 | % | 12.5 | % | ||||||||||||||
| Share-based compensation | 304 | 199 | 1,032 | 742 | ||||||||||||||||||
| Depreciation and amortization | 12,405 | 2,133 | 18,743 | 9,912 | ||||||||||||||||||
| EBITDA, as adjusted | $ | 73,056 | $ | 36,084 | 102.5 | % | $ | 205,580 | $ | 126,870 | 62.0 | % | ||||||||||
| EBITDA margin, as adjusted | 15.0 | % | 14.3 | % | 16.0 | % | 13.7 | % | ||||||||||||||
| TopBuild Corp. | |||||||||||||||||||||||||
| Adjusted EBITDA (Unaudited) | |||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||||
| 2021 | 2020 | Change | 2021 | 2020 | Change | ||||||||||||||||||||
| Total net sales | |||||||||||||||||||||||||
| Sales before eliminations | $ | 1,112,936 | $ | 760,347 | $ | 3,665,577 | $ | 2,869,668 | |||||||||||||||||
| Intercompany eliminations | (49,538 | ) | (38,860 | ) | (179,370 | ) | (151,630 | ) | |||||||||||||||||
| Net sales after eliminations | $ | 1,063,398 | $ | 721,487 | 47.4 | % | $ | 3,486,207 | $ | 2,718,038 | 28.3 | % | |||||||||||||
| Operating profit, as reported - segments | $ | 149,939 | $ | 115,388 | $ | 553,090 | $ | 410,136 | |||||||||||||||||
| General corporate expense, net | (22,893 | ) | (6,174 | ) | (47,018 | ) | (30,785 | ) | |||||||||||||||||
| Intercompany eliminations | (8,603 | ) | (6,137 | ) | (29,653 | ) | (24,305 | ) | |||||||||||||||||
| Operating profit, as reported | $ | 118,443 | $ | 103,077 | $ | 476,419 | $ | 355,046 | |||||||||||||||||
| Operating margin, as reported | 11.1 | % | 14.3 | % | 13.7 | % | 13.1 | % | |||||||||||||||||
| Rationalization charges | — | (4 | ) | 16 | 2,097 | ||||||||||||||||||||
| Acquisition related costs † | 16,262 | 518 | 22,107 | 855 | |||||||||||||||||||||
| Acquisition purchase accounting (inventory step-up) | 15,853 | — | 15,853 | — | |||||||||||||||||||||
| Refinancing costs | 188 | — | 188 | 57 | |||||||||||||||||||||
| COVID-19 pay | — | 384 | 659 | 1,368 | |||||||||||||||||||||
| Operating profit, as adjusted | $ | 150,746 | $ | 103,975 | $ | 515,242 | $ | 359,423 | |||||||||||||||||
| Operating margin, as adjusted | 14.2 | % | 14.4 | % | 14.8 | % | 13.2 | % | |||||||||||||||||
| Share-based compensation | 2,941 | 2,593 | 11,316 | 14,910 | |||||||||||||||||||||
| Depreciation and amortization | 28,385 | 14,883 | 79,390 | 62,410 | |||||||||||||||||||||
| EBITDA, as adjusted | $ | 182,072 | $ | 121,451 | 49.9 | % | $ | 605,948 | $ | 436,743 | 38.7 | % | |||||||||||||
| EBITDA margin, as adjusted | 17.1 | % | 16.8 | % | 17.4 | % | 16.1 | % | |||||||||||||||||
| Sales change period over period | 341,911 | 768,169 | |||||||||||||||||||||||
| EBITDA, as adjusted, change period over period | 60,621 | 169,205 | |||||||||||||||||||||||
| Incremental EBITDA, as adjusted, as a percentage of change in sales | 17.7 | % | 22.0 | % | |||||||||||||||||||||
| † Acquisition related costs include corporate level adjustments as well as segment operating adjustments. | |||||||||||||||||||||||||
| TopBuild Corp. | ||||||||||||||||||
| Non-GAAP Reconciliations (Unaudited) | ||||||||||||||||||
| (in thousands, except share and per common share amounts) | ||||||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||||
| Gross Profit Reconciliations | ||||||||||||||||||
| Net sales | $ | 1,063,398 | $ | 721,487 | $ | 3,486,207 | $ | 2,718,038 | ||||||||||
| Gross profit, as reported | $ | 283,161 | $ | 198,020 | $ | 974,389 | $ | 746,361 | ||||||||||
| Acquisition purchase accounting (inventory step-up) | 15,853 | — | 15,853 | — | ||||||||||||||
| Rationalization charges | — | — | — | 1,016 | ||||||||||||||
| COVID-19 pay | — | 380 | 592 | 1,135 | ||||||||||||||
| Gross profit, as adjusted | $ | 299,014 | $ | 198,400 | $ | 990,834 | $ | 748,512 | ||||||||||
| Gross margin, as reported | 26.6 | % | 27.4 | % | 27.9 | % | 27.5 | % | ||||||||||
| Gross margin, as adjusted | 28.1 | % | 27.5 | % | 28.4 | % | 27.5 | % | ||||||||||
| Sellling, General and Administrative Expense Reconciliation | ||||||||||||||||||
| Selling, general, and administrative expense, as reported | $ | 164,718 | $ | 94,943 | $ | 497,970 | $ | 391,315 | ||||||||||
| Rationalization charges | — | (4 | ) | 16 | 1,081 | |||||||||||||
| Acquisition related costs | 16,262 | 518 | 22,107 | 855 | ||||||||||||||
| Refinancing costs | 188 | — | 188 | 57 | ||||||||||||||
| COVID-19 pay | — | 4 | 67 | 233 | ||||||||||||||
| Selling, general, and administrative expense, as adjusted | $ | 148,268 | $ | 94,425 | $ | 475,592 | $ | 389,089 | ||||||||||
| Operating Profit Reconciliation | ||||||||||||||||||
| Operating profit, as reported | $ | 118,443 | $ | 103,077 | $ | 476,419 | $ | 355,046 | ||||||||||
| Rationalization charges | — | (4 | ) | 16 | 2,097 | |||||||||||||
| Acquisition related costs | 16,262 | 518 | 22,107 | 855 | ||||||||||||||
| Acquisition purchase accounting (inventory step-up) | 15,853 | — | 15,853 | — | ||||||||||||||
| Refinancing costs | 188 | — | 188 | 57 | ||||||||||||||
| COVID-19 pay | — | 384 | 659 | 1,368 | ||||||||||||||
| Operating profit, as adjusted | $ | 150,746 | $ | 103,975 | $ | 515,242 | $ | 359,423 | ||||||||||
| Operating margin, as reported | 11.1 | % | 14.3 | % | 13.7 | % | 13.1 | % | ||||||||||
| Operating margin, as adjusted | 14.2 | % | 14.4 | % | 14.8 | % | 13.2 | % | ||||||||||
| Income Per Common Share Reconciliation | ||||||||||||||||||
| Income before income taxes, as reported | $ | 107,328 | $ | 95,417 | $ | 433,443 | $ | 323,090 | ||||||||||
| Rationalization charges | — | (4 | ) | 16 | 2,097 | |||||||||||||
| Acquisition related costs | 16,262 | 518 | 22,107 | 855 | ||||||||||||||
| Acquisition purchase accounting (inventory step-up) | 15,853 | — | 15,853 | — | ||||||||||||||
| Refinancing costs and loss on extinguishment of debt | 163 | — | 14,025 | 290 | ||||||||||||||
| COVID-19 pay | — | 384 | 659 | 1,368 | ||||||||||||||
| Income before income taxes, as adjusted | 139,606 | 96,315 | 486,103 | 327,700 | ||||||||||||||
| Tax rate at 26.0% | (36,298 | ) | (25,042 | ) | (126,387 | ) | (85,202 | ) | ||||||||||
| Income, as adjusted | $ | 103,308 | $ | 71,273 | $ | 359,716 | $ | 242,498 | ||||||||||
| Income per common share, as adjusted | $ | 3.12 | $ | 2.15 | $ | 10.85 | $ | 7.28 | ||||||||||
| Weighted average diluted common shares outstanding | 33,117,227 | 33,189,104 | 33,146,171 | 33,299,986 | ||||||||||||||
| TopBuild Corp. | ||||||||||||||||||
| Same Branch and Acquisition Metrics (Unaudited) | ||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||||
| Net sales | ||||||||||||||||||
| Same branch: | ||||||||||||||||||
| Installation | $ | 570,675 | $ | 508,812 | $ | 2,157,011 | $ | 1,943,461 | ||||||||||
| Specialty Distribution | 290,662 | 251,535 | 1,083,497 | 926,207 | ||||||||||||||
| Eliminations | (49,391 | ) | (38,860 | ) | (177,904 | ) | (151,630 | ) | ||||||||||
| Total same branch | 811,946 | 721,487 | 3,062,604 | 2,718,038 | ||||||||||||||
| Acquisitions (a): | ||||||||||||||||||
| Installation | $ | 56,448 | $ | — | $ | 221,390 | $ | — | ||||||||||
| Specialty Distribution | 195,151 | — | 203,679 | — | ||||||||||||||
| Eliminations | (147 | ) | — | (1,466 | ) | — | ||||||||||||
| Total acquisitions | 251,452 | — | 423,603 | — | ||||||||||||||
| Total | $ | 1,063,398 | $ | 721,487 | $ | 3,486,207 | $ | 2,718,038 | ||||||||||
| Gross profit, as adjusted | ||||||||||||||||||
| Same branch | $ | 238,840 | $ | 198,400 | $ | 889,252 | $ | 748,512 | ||||||||||
| Acquisitions (a) | 60,174 | — | 101,582 | — | ||||||||||||||
| Total | $ | 299,014 | $ | 198,400 | $ | 990,834 | $ | 748,512 | ||||||||||
| Gross margin, as adjusted | ||||||||||||||||||
| Same branch (b) | 29.4 | % | 27.5 | % | 29.0 | % | 27.5 | % | ||||||||||
| Acquisitions (c) | 23.9 | % | 24.0 | % | ||||||||||||||
| Operating profit, as adjusted | ||||||||||||||||||
| Same branch | $ | 135,595 | $ | 103,975 | $ | 484,085 | $ | 359,423 | ||||||||||
| Acquisitions (a) | 15,151 | — | 31,157 | — | ||||||||||||||
| Total | $ | 150,746 | $ | 103,975 | $ | 515,242 | $ | 359,423 | ||||||||||
| Operating margin, as adjusted | ||||||||||||||||||
| Same branch (b) | 16.7 | % | 14.4 | % | 15.8 | % | 13.2 | % | ||||||||||
| Acquisitions (c) | 6.0 | % | 7.4 | % | ||||||||||||||
| EBITDA, as adjusted | ||||||||||||||||||
| Same branch | $ | 154,051 | $ | 121,451 | $ | 554,379 | $ | 436,743 | ||||||||||
| Acquisitions (a) | 28,021 | — | 51,569 | — | ||||||||||||||
| Total | $ | 182,072 | $ | 121,451 | $ | 605,948 | $ | 436,743 | ||||||||||
| EBITDA, as adjusted, as a percentage of sales | ||||||||||||||||||
| Same branch (b) | 19.0 | % | 18.1 | % | ||||||||||||||
| Acquisitions (c) | 11.1 | % | 12.2 | % | ||||||||||||||
| Total (d) | 17.1 | % | 16.8 | % | 17.4 | % | 16.1 | % | ||||||||||
| As Adjusted Incremental EBITDA, as a percentage of change in sales | ||||||||||||||||||
| Same branch (e) | 36.0 | % | 34.1 | % | ||||||||||||||
| Acquisitions (c) | 11.1 | % | 12.2 | % | ||||||||||||||
| Total (f) | 17.7 | % | 22.0 | % | ||||||||||||||
| (a) Represents current year impact of acquisitions in their first twelve months | ||||||||||||||||||
| (b) Same branch metric, as adjusted, as a percentage of same branch sales | ||||||||||||||||||
| (c) Acquired metric, as adjusted, as a percentage of acquired sales | ||||||||||||||||||
| (d) Total EBITDA, as adjusted, as a percentage of total sales | ||||||||||||||||||
| (e) Change in same branch EBITDA, as adjusted, as a percentage of change in same branch sales | ||||||||||||||||||
| (f) Change in total EBITDA, as adjusted, as a percentage of change in total sales | ||||||||||||||||||
| TopBuild Corp. | ||||||||||||||
| Reconciliation of Adjusted EBITDA to Net Income (Unaudited) | ||||||||||||||
| (in thousands) | ||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||
| Net income, as reported | $ | 78,360 | $ | 70,757 | $ | 324,016 | $ | 247,023 | ||||||
| Adjustments to arrive at EBITDA, as adjusted: | ||||||||||||||
| Interest expense and other, net | 11,140 | 7,660 | 29,139 | 31,723 | ||||||||||
| Income tax expense | 28,968 | 24,660 | 109,427 | 76,067 | ||||||||||
| Depreciation and amortization | 28,385 | 14,883 | 79,390 | 62,410 | ||||||||||
| Share-based compensation | 2,941 | 2,593 | 11,316 | 14,910 | ||||||||||
| Rationalization charges | — | (4 | ) | 16 | 2,097 | |||||||||
| Acquisition related costs | 16,262 | 518 | 22,107 | 855 | ||||||||||
| Acquisition purchase accounting (inventory step-up) | 15,853 | — | 15,853 | — | ||||||||||
| Refinancing costs and loss on extinguishment of debt | 163 | — | 14,025 | 290 | ||||||||||
| COVID-19 pay | — | 384 | 659 | 1,368 | ||||||||||
| EBITDA, as adjusted | $ | 182,072 | $ | 121,451 | $ | 605,948 | $ | 436,743 | ||||||
| Proforma acquisition EBITDA (a) | 73,898 | |||||||||||||
| Proforma TTM EBITDA, as adjusted | $ | 679,846 | ||||||||||||
| (a) Represents the trailing twelve months proforma impact of acquisitions completed in 2021. | ||||||||||||||
| TopBuild Corp. | ||||||||||||||
| Acquisition Adjusted Net Sales (Unaudited) | ||||||||||||||
| (in thousands) | ||||||||||||||
| 2021 | Year Ended | |||||||||||||
| Q1 | Q2 | Q3 | Q3 | December 31, 2021 | ||||||||||
| Net Sales | $ | 742,798 | $ | 834,255 | $ | 845,757 | $ | 1,063,398 | $ | 3,486,207 | ||||
| Acquisitions proforma adjustment † | 230,581 | 218,855 | 227,621 | 45,291 | 722,348 | |||||||||
| Net sales, acquisition adjusted | $ | 973,379 | $ | 1,053,110 | $ | 1,073,378 | $ | 1,108,688 | $ | 4,208,555 | ||||
| † Trailing 12 months sales have been adjusted for the pro forma effect of acquired branches | ||||||||||||||
| TopBuild Corp. | ||||||
| 2022 Estimated Adjusted EBITDA Range (Unaudited) | ||||||
| (in millions) | ||||||
| Twelve Months Ending December 31, 2022 | ||||||
| Low | High | |||||
| Estimated net income | $ | 423.0 | $ | 470.1 | ||
| Adjustments to arrive at estimated EBITDA, as adjusted: | ||||||
| Interest expense and other, net | 50.3 | 46.2 | ||||
| Income tax expense | 148.6 | 165.2 | ||||
| Depreciation and amortization | 126.4 | 121.3 | ||||
| Share-based compensation | 13.7 | 11.2 | ||||
| Acquisition related costs | 8.0 | 6.0 | ||||
| Estimated EBITDA, as adjusted | $ | 770.0 | $ | 820.0 | ||
