TopBuild Reports Fourth Quarter and Year-End 2022 Results

Fourth Quarter Highlights

  • Sales increase 18.9% to $1.3 billion, with same branch revenue increasing 14.2%
  • Net income increases 83.6% to $143.8 million, or $4.52 per diluted share
  • Adjusted EBITDA margin expands 170 basis points to 18.8%

Full Year Highlights

  • Sales increase 43.7% to $5.0 billion, with same branch revenue increasing 18.8%
  • Net income increases 71.6% to $556.0 million, or $17.14 per diluted share
  • Adjusted EBITDA margin expands 140 basis points to 18.8%

Provides 2023 Sales, Adjusted EBITDA Guidance and Assumptions

DAYTONA BEACH, Fla., Feb. 23, 2023 (GLOBE NEWSWIRE) -- TopBuild Corp. (NYSE:BLD), a leading installer and specialty distributor of insulation and related building material products to the construction industry in the United States and Canada today reported results for the fourth quarter and full-year ended December 31, 2022.

Robert Buck, President and Chief Executive Officer, stated, “We closed 2022 with a solid fourth quarter, completing another outstanding year for TopBuild. The TopBuild team delivered on our objective of achieving strong top and bottom-line growth as our unique operating model continues to differentiate TopBuild, giving us distinct competitive advantages in the three end-markets we serve.

“Throughout 2022, the TopBuild team demonstrated profitable growth, benefitting from a relentless focus on improving operational efficiencies and leveraging fixed costs. We also successfully integrated DI and demonstrated improved operating results with this key acquisition.

“TopBuild’s unique operating model continues to enable our ability to outperform in any environment. Since 2018, revenue has doubled, growing at a compounded annual rate of 20% and our adjusted EBITDA margin has expanded 690 basis points.

“Looking at 2023 and beyond, we see multiple avenues of growth available to us. We have a strong track record of executing on our plan, producing solid results, and creating value for our shareholders.”

Fourth Quarter Financial Highlights

(comparisons are to the quarter ended December 31, 2021)

3 Months Ended 12/31/22 Reported Change
Sales $1,264,543 18.9%
Gross Margin 29.7% 310 bps
SG&A as % of revenue 13.6% (190 bps)
Operating Profit $203,114 71.5%
Operating Margin 16.1% 500 bps
Net Income $143,834 83.6%
Net Income per diluted share $4.52 90.7%
     
3 Months Ended 12/31/22 Adjusted Change
Sales $1,264,543 18.9%
Gross Margin 29.7% 160 bps
SG&A as % of revenue 13.5% (40 bps)
Operating Profit $204,492 35.7%
Operating Margin 16.2% 200 bps
Net Income $140,081 35.6%
Net Income per diluted share $4.40 41.0%
EBITDA $237,413 30.4%
EBITDA Margin 18.8% 170 bps
     
3 Months Ended 12/31/22 Adj. Same Branch Change
Sales $1,214,183 14.2%
Gross Margin 29.8% 170 bps
Operating Margin 16.3% 210 bps
EBITDA Margin 18.8% 170 bps
Incremental EBITDA Margin 30.8%  

Full Year 2022 Financial Highlights

(comparisons are to twelve months ended December 31, 2021)

12 Months Ended 12/31/22 Reported Change
Sales $5,008,744 43.7%
Gross Margin 29.7% 180 bps
SG&A as % of revenue 13.8% (50 bps)
Operating Profit $797,164 67.3%
Operating Margin 15.9% 220 bps
Net Income $555,989 71.6%
Net Income per diluted share $17.14 75.3%
     
12 Months Ended 12/31/22 Adjusted Change
Sales $5,008,744 43.7%
Gross Margin 29.7% 130 bps
SG&A as % of revenue 13.6% 0 bps
Operating Profit $804,966 56.2%
Operating Margin 16.1% 130 bps
Net Income $554,953 54.3%
Net Income per diluted share $17.11 57.7%
EBITDA $940,611 55.2%
EBITDA Margin 18.8% 140 bps
     
12 Months Ended 12/31/22 Adj. Same Branch Change
Sales $4,140,512 18.8%
Gross Margin 30.5% 210 bps
Operating Margin 17.2% 240 bps
EBITDA Margin 19.5% 210 bps
Incremental EBITDA Margin 30.8%  

Operating Segment Highlights ($ in 000s)
(comparisons are to the period ended December 31, 2021)

Installation 3 Months Ended 12/31/22 12 Months Ended 12/31/22   Specialty Distribution 3 Months Ended 12/31/22 12 Months Ended 12/31/22
Sales $761,261 $2,969,978   Sales $563,065 $2,278,261
Change       Change    
Volume 12.4% 9.2%   Volume -5.1% -0.6%
Price 8.2% 12.2%   Price 11.5% 15.8%
M&A 0.8% 3.4%   M&A 9.5% 61.8%
Total Change 21.4% 24.9%   Total Change 15.9% 77.0%
Operating Margin 18.6% 18.5%   Operating Margin 14.3% 14.3%
Change 170 bps 240 bps   Change 530 bps 110 bps
Adj. Operating Margin 18.7% 18.5%   Adj. Operating Margin 14.4% 14.4%
Change 170 bps 230 bps   Change 200 bps 0 bps
Adj. EBITDA Margin 20.8% 20.6%   Adj. EBITDA Margin 16.7% 16.9%
Change 140 bps 190 bps   Change 170 bps 90 bps

Capital Allocation
“We remain focused on acquiring quality installation and specialty distribution companies that fit within our core insulation businesses. Disciplined identification, analysis, and integration of strategic acquisitions are core competencies as evidenced by our successful track record.

“Over the past five years we have acquired 24 companies that are contributing approximately $1.6 billion of annual revenue,” added Buck.

Acquisitions
In 2022, the Company acquired five residential insulation installation companies which are expected to generate over $17 million in annual revenue. They are listed in the chart below.

  TTM Revenue at Month
Company Acquired Acquisition ($ millions) Acquired
Southwest Insulation $1.7 January
Billings Insulation $6.5 February
Green Energy Solutions $2.0 March
Assured Insulating $5.5 April
CV Insulation $1.6 July 
Total $17.3  

On January 26, 2023, the Company acquired SRI Holdings, a residential insulation installation company founded in 2012, which generated annual revenue of approximately $62 million for the twelve months ended November 30, 2022.

Share Repurchases
In 2022, the Company repurchased a total of 1,390,667 shares of its common stock for approximately $250.0 million.

2023 Outlook

Sales and Adjusted EBITDA Guidance (1)
($ in millions)

2023 Low High
Sales $ 4,700 $ 4,900
Adjusted EBITDA* $ 820 $ 910

*See table for adjusted EBITDA reconciliation.

Assumptions(1)     

($ in millions) Range
2023 Low High
Estimated net income $ 445.0 $ 523.0
Interest Expense and other, net   72.0   66.0
Income tax expense   157.0   184.0
Depreciation and Amortization   128.0   123.0
Share based compensation   16.0   13.0
Acquisition related costs   2.0   1.0
Estimated EBITDA, as adjusted $ 820.0 $ 910.0

(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 most recent Annual Report on Form 10-K and subsequent SEC reports.

Conference Call
A conference call to discuss fourth quarter 2022 financial results is scheduled for today, Thursday, 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. 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 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 230 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 180 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.

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,
    2022   2021   2022   2021
Net sales   $ 1,264,543     $ 1,063,398     $ 5,008,744     $ 3,486,207  
Cost of sales     888,871       780,237       3,522,025       2,511,818  
Gross profit     375,672       283,161       1,486,719       974,389  
                         
Selling, general, and administrative expense     172,558       164,718       689,555       497,970  
Operating profit     203,114       118,443       797,164       476,419  
                         
Other income (expense), net:                        
Interest expense     (16,779 )     (10,933 )     (56,716 )     (29,143 )
Loss on extinguishment of debt           25             (13,837 )
Other, net     1,585       (207 )     1,687       4  
Other expense, net     (15,194 )     (11,115 )     (55,029 )     (42,976 )
Income before income taxes     187,920       107,328       742,135       433,443  
                         
Income tax expense     (44,086 )     (28,968 )     (186,146 )     (109,427 )
Net income   $ 143,834     $ 78,360     $ 555,989     $ 324,016  
                         
Net income per common share:                        
Basic   $ 4.54     $ 2.39     $ 17.26     $ 9.88  
Diluted   $ 4.52     $ 2.37     $ 17.14     $ 9.78  
                         
Weighted average shares outstanding:                        
Basic     31,648,741       32,753,719       32,213,839       32,801,906  
Diluted     31,838,352       33,117,227       32,440,405       33,146,171  
                                 

 
TopBuild Corp.
Consolidated Statements of Comprehensive Income
(in thousands)
                         
    Three Months Ended December 31,   Year Ended December 31,
    2022   2021   2022   2021
Net income   $ 143,834     $ 78,360     $ 555,989     $ 324,016  
Other comprehensive loss:                        
Foreign currency translation adjustment     (6,762 )     (6,634 )     (15,286 )     (6,634 )
Comprehensive income   $ 137,072     $ 71,726     $ 540,703     $ 317,382  
                         

 
TopBuild Corp.
Consolidated Balance Sheets and Other Financial Data
(dollars in thousands)
    As of December 31,  
ASSETS   2022     2021  
Current assets:                
Cash and cash equivalents   $ 240,069     $ 139,779  
Receivables, net of an allowance for credit losses of $16,281 at December 31, 2022, and $8,798 at December 31, 2021     836,071       668,419  
Inventories, net     438,644       352,801  
Prepaid expenses and other current assets     34,257       26,692  
Total current assets     1,549,041       1,187,691  
                 
Right of use assets     205,892       177,177  
Property and equipment, net     253,484       244,574  
Goodwill     1,966,994       1,949,763  
Other intangible assets, net     614,967       684,209  
Other assets     16,453       15,116  
Total assets   $ 4,606,831     $ 4,258,530  
                 
LIABILITIES                
Current liabilities:                
Accounts payable   $ 487,114     $ 461,917  
Current portion of long-term debt     40,068       38,640  
Accrued liabilities     199,370       175,891  
Short-term operating lease liabilities     60,880       54,591  
Short-term finance lease liabilities     2,207       2,387  
Total current liabilities     789,639       733,426  
                 
Long-term debt     1,417,257       1,454,483  
Deferred tax liabilities, net     251,481       248,243  
Long-term portion of insurance reserves     59,783       51,875  
Long-term operating lease liabilities     149,943       125,339  
Long-term finance lease liabilities     6,673       7,770  
Other liabilities     2,349       960  
Total liabilities     2,677,125       2,622,096  
                 
EQUITY     1,929,706       1,636,434  
Total liabilities and equity   $ 4,606,831     $ 4,258,530  
                 
                 
    As of December 31,  
    2022     2021  
Other Financial Data                
Receivable days     54       48  
Inventory days     45       43  
Accounts payable days     66       65  
Receivables, net plus inventories, net less accounts payable   $ 787,601     $ 559,303  
Receivables, net plus inventories, net less accounts payable as a percent of sales (TTM) †     15.7 %     13.3 %
                 
† 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,
    2022   2021
Cash Flows Provided by (Used in) Operating Activities:          
Net income   $ 555,989     $ 324,016  
Adjustments to reconcile net income to net cash provided by operating activities:            
Depreciation and amortization     123,335       79,390  
Share-based compensation     12,310       11,316  
Loss on extinguishment of debt           13,837  
Loss on sale of property and equipment     1,833       1,356  
Amortization of debt issuance costs     2,867       2,036  
Provision for bad debt expense     5,510       7,304  
Loss from inventory obsolescence     6,659       2,637  
Deferred income taxes, net     6,041       (2,818 )
Change in certain assets and liabilities            
Receivables, net     (169,327 )     (69,042 )
Inventories, net     (93,874 )     (46,518 )
Prepaid expenses and other current assets     (9,222 )     558  
Accounts payable     26,581       54,961  
Accrued liabilities     20,703       24,816  
Other, net     6,396       (824 )
Net cash provided by operating activities     495,801       403,025  
             
Cash Flows Provided by (Used in) Investing Activities:            
Purchases of property and equipment     (76,382 )     (55,546 )
Acquisition of businesses, net of cash acquired     (20,500 )     (1,267,114 )
Proceeds from sale of property and equipment     2,975       415  
Net cash used in investing activities     (93,907 )     (1,322,245 )
             
Cash Flows Provided by (Used in) Financing Activities:            
Proceeds from issuance of long-term debt           1,218,750  
Repayment of long-term debt     (38,658 )     (433,070 )
Payment of debt issuance costs           (14,965 )
Proceeds from revolving credit facility     70,000        
Repayment of revolving credit facility     (70,000 )      
Taxes withheld and paid on employees' equity awards     (11,719 )     (8,805 )
Exercise of stock options     2,028       3,303  
Repurchase of shares of common stock     (250,050 )     (35,556 )
Payment of contingent consideration     (1,674 )     (650 )
Net cash (used in) provided by financing activities     (300,073 )     729,007  
Impact of exchange rate changes on cash     (1,531 )     (15 )
Net increase (decrease) in cash and cash equivalents     100,290       (190,228 )
Cash and cash equivalents- Beginning of period     139,779       330,007  
Cash and cash equivalents- End of period   $ 240,069     $ 139,779  
             
Supplemental disclosure of cash paid for:            
Interest   $ 49,888     $ 22,144  
Income taxes     186,722       109,179  
             
Supplemental disclosure of noncash activities:            
Leased assets obtained in exchange for new operating lease liabilities   $ 103,997     $ 131,909  
Leased assets obtained in exchange for new finance lease liabilities           10,469  
Accruals for property and equipment     141       1,060  
                 

 
TopBuild Corp.
Segment Data (Unaudited)
(dollars in thousands)
                                     
    Three Months Ended December 31,         Year Ended December 31,      
    2022   2021   Change     2022   2021   Change
Installation                                    
Sales   $ 761,261   $ 627,123   21.4 %   $ 2,969,978     $ 2,378,401   24.9 %
                                     
Operating profit, as reported   $ 141,961   $ 105,975         $ 548,795     $ 383,722      
Operating margin, as reported     18.6 %   16.9 %         18.5   %   16.1 %    
                                     
Rationalization charges     161               (174 )          
Acquisition related costs     23     362           135       1,642      
COVID-19 pay                         605      
Operating profit, as adjusted   $ 142,145   $ 106,337         $ 548,756     $ 385,969      
Operating margin, as adjusted     18.7 %   17.0 %         18.5   %   16.2 %    
                                     
Share-based compensation     339     270           1,296       1,157      
Depreciation and amortization     15,869     15,227           62,483       57,815      
EBITDA, as adjusted   $ 158,353   $ 121,834   30.0 %   $ 612,535     $ 444,941   37.7 %
EBITDA margin, as adjusted     20.8 %   19.4 %         20.6   %   18.7 %    
                                     
Specialty Distribution                                    
Sales   $ 563,065   $ 485,813   15.9 %   $ 2,278,261     $ 1,287,176   77.0 %
                                     
Operating profit, as reported   $ 80,692   $ 43,964         $ 326,226     $ 169,368      
Operating margin, as reported     14.3 %   9.0 %         14.3   %   13.2 %    
                                     
Acquisition related costs     266     530           1,502       530      
Acquisition purchase accounting (inventory step-up)         15,853                 15,853      
COVID-19 pay                         54      
Operating profit, as adjusted   $ 80,958   $ 60,347         $ 327,728     $ 185,805      
Operating margin, as adjusted     14.4 %   12.4 %         14.4   %   14.4 %    
                                     
Share-based compensation     104     304           1,041       1,032      
Depreciation and amortization     13,184     12,405           56,881       18,743      
EBITDA, as adjusted   $ 94,246   $ 73,056   29.0 %   $ 385,650     $ 205,580   87.6 %
EBITDA margin, as adjusted     16.7 % 15.0 %         16.9   %   16.0 %    
                                     

 
TopBuild Corp.
Adjusted EBITDA (Unaudited)
(dollars in thousands)
                                         
    Three Months Ended December 31,           Year Ended December 31,        
    2022   2021   Change     2022   2021   Change  
Total net sales                                        
Sales before eliminations   $ 1,324,326     $ 1,112,936             $ 5,248,239     $ 3,665,577          
Intercompany eliminations     (59,783 )     (49,538 )             (239,495 )     (179,370 )        
Net sales after eliminations   $ 1,264,543     $ 1,063,398       18.9 %   $ 5,008,744     $ 3,486,207       43.7 %
                                         
Operating profit, as reported - segments   $ 222,653     $ 149,939             $ 875,021     $ 553,090          
General corporate expense, net     (9,650 )     (22,893 )             (38,018 )     (47,018 )        
Intercompany eliminations     (9,889 )     (8,603 )             (39,839 )     (29,653 )        
Operating profit, as reported   $ 203,114     $ 118,443             $ 797,164     $ 476,419          
Operating margin, as reported     16.1   %   11.1   %           15.9   %   13.7   %      
                                         
Rationalization charges     162                     (172 )     16          
Acquisition related costs     1,216       16,262               7,974       22,107          
Acquisition purchase accounting (inventory step-up)           15,853                     15,853          
Refinancing costs           188                     188          
COVID-19 pay                               659          
Operating profit, as adjusted   $ 204,492     $ 150,746             $ 804,966     $ 515,242          
Operating margin, as adjusted     16.2   %   14.2   %           16.1   %   14.8   %      
                                         
Share-based compensation     2,637       2,941               12,310       11,316          
Depreciation and amortization     30,284       28,385               123,335       79,390          
EBITDA, as adjusted   $ 237,413     $ 182,072       30.4 %   $ 940,611     $ 605,948       55.2 %
EBITDA margin, as adjusted     18.8   %   17.1   %           18.8   %   17.4   %      
                                         
Sales change period over period     201,145                     1,522,537                
EBITDA, as adjusted, change period over period     55,341                     334,663                
Incremental EBITDA, as adjusted, as a percentage of change in sales     27.5   %                 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,  
    2022   2021   2022   2021  
Gross Profit Reconciliation                          
                           
Net sales   $ 1,264,543     $ 1,063,398     $ 5,008,744     $ 3,486,207    
                           
Gross profit, as reported   $ 375,672     $ 283,161     $ 1,486,719     $ 974,389    
                           
Acquisition purchase accounting (inventory step-up)           15,853             15,853    
Rationalization charges     15             135          
COVID-19 pay                       592    
Gross profit, as adjusted   $ 375,687     $ 299,014     $ 1,486,854     $ 990,834    
                           
Gross margin, as reported     29.7   %   26.6   %   29.7   %   27.9   %
Gross margin, as adjusted     29.7   %   28.1   %   29.7   %   28.4   %
                           
Sellling, General and Administrative Expense Reconciliation                    
                           
Selling, general, and administrative expense, as reported   $ 172,558     $ 164,718     $ 689,555     $ 497,970    
                           
Rationalization charges     162             (172 )     16    
Acquisition related costs     1,201       16,262       7,839       22,107    
Refinancing costs           188             188    
COVID-19 pay                       67    
Selling, general, and administrative expense, as adjusted   $ 171,195     $ 148,268     $ 681,888     $ 475,592    
                           
Operating Profit Reconciliation                          
                           
Operating profit, as reported   $ 203,114     $ 118,443     $ 797,164     $ 476,419    
                           
Rationalization charges     162             (172 )     16    
Acquisition related costs     1,216       16,262       7,974       22,107    
Acquisition purchase accounting (inventory step-up)           15,853             15,853    
Refinancing costs           188             188    
COVID-19 pay                       659    
Operating profit, as adjusted   $ 204,492     $ 150,746     $ 804,966     $ 515,242    
                           
Operating margin, as reported     16.1   %   11.1   %   15.9   %   13.7   %
Operating margin, as adjusted     16.2   %   14.2   %   16.1   %   14.8   %
                           
Income Per Common Share Reconciliation                          
                           
Income before income taxes, as reported   $ 187,920     $ 107,328     $ 742,135     $ 433,443    
                           
Rationalization charges     162             (172 )     16    
Acquisition related costs     1,216       16,262       7,974       22,107    
Acquisition purchase accounting (inventory step-up)           15,853             15,853    
Refinancing costs and loss on extinguishment of debt           163             14,025    
COVID-19 pay                       659    
Income before income taxes, as adjusted     189,298       139,606       749,937       486,103    
                           
Tax rate at 26.0%     (49,217 )     (36,298 )     (194,984 )     (126,387 )  
Income, as adjusted   $ 140,081     $ 103,308     $ 554,953     $ 359,716    
                           
Income per common share, as adjusted   $ 4.40     $ 3.12     $ 17.11     $ 10.85    
                           
Weighted average diluted common shares outstanding     31,838,352       33,117,227       32,440,405       33,146,171    
                                   

 
TopBuild Corp.
Same Branch and Acquisition Metrics (Unaudited)
(dollars in thousands)
                           
    Three Months Ended December 31,   Year Ended December 31,  
    2022   2021   2022   2021  
Net sales                          
Same branch:                          
Installation   $ 756,312     $ 627,123     $ 2,889,145     $ 2,378,401    
Specialty Distribution     517,010       485,813       1,483,155       1,287,176    
Eliminations     (59,139 )     (49,538 )     (231,788 )     (179,370 )  
Total same branch     1,214,183       1,063,398       4,140,512       3,486,207    
                           
Acquisitions (a):                          
Installation   $ 4,949     $     $ 80,833     $    
Specialty Distribution     46,055             795,106          
Eliminations     (644 )           (7,707 )        
Total acquisitions     50,360             868,232          
Total   $ 1,264,543     $ 1,063,398     $ 5,008,744     $ 3,486,207    
                           
Gross profit, as adjusted                          
Same branch   $ 361,974     $ 299,014     $ 1,261,934     $ 990,834    
Acquisitions (a)     13,713             224,920          
Total   $ 375,687     $ 299,014     $ 1,486,854     $ 990,834    
                           
Gross margin, as adjusted                          
Same branch (b)     29.8   %   28.1   %   30.5   %   28.4   %
Acquisitions (c)     27.2   %         25.9   %      
                           
Operating profit, as adjusted                          
Same branch   $ 197,680     $ 150,746     $ 714,058     $ 515,242    
Acquisitions (a)     6,812             90,908          
Total   $ 204,492     $ 150,746     $ 804,966     $ 515,242    
                           
Operating margin, as adjusted                          
Same branch (b)     16.3   %   14.2   %   17.2   %   14.8   %
Acquisitions (c)     13.5   %         10.5   %      
                           
EBITDA, as adjusted                          
Same branch   $ 228,459     $ 182,072     $ 807,309     $ 605,948    
Acquisitions (a)     8,954             133,302          
Total   $ 237,413     $ 182,072     $ 940,611     $ 605,948    
                           
EBITDA, as adjusted, as a percentage of sales                          
Same branch (b)     18.8   %         19.5   %      
Acquisitions (c)     17.8   %         15.4   %      
Total (d)     18.8   %   17.1   %   18.8   %   17.4   %
                           
As Adjusted Incremental EBITDA, as a percentage of change in sales                    
Same branch (e)     30.8   %         30.8   %      
Acquisitions (c)     17.8   %         15.4   %      
Total (f)     27.5   %         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,
    2022   2021   2022   2021
Net income, as reported   $ 143,834     $ 78,360     $ 555,989     $ 324,016  
Adjustments to arrive at EBITDA, as adjusted:                              
Interest expense and other, net     15,194       11,140       55,029       29,139  
Income tax expense     44,086       28,968       186,146       109,427  
Depreciation and amortization     30,284       28,385       123,335       79,390  
Share-based compensation     2,637       2,941       12,310       11,316  
Rationalization charges     162             (172 )     16  
Acquisition related costs     1,216       16,262       7,974       22,107  
Acquisition purchase accounting (inventory step-up)       15,853             15,853  
Refinancing costs and loss on extinguishment of debt       163             14,025  
COVID-19 pay                       659  
EBITDA, as adjusted   $ 237,413     $ 182,072     $ 940,611     $ 605,948  
                               
Proforma acquisition EBITDA(a)                     548          
Proforma TTM EBITDA, as adjusted                   $ 941,159          
                               
(a) Represents the trailing twelve months proforma impact of acquisitions completed in 2022.
                               

 
TopBuild Corp.
Acquisition Adjusted Net Sales (Unaudited)
(in thousands)
  2022   Year Ended
  Q1   Q2   Q3   Q4   December 31, 2022
Net Sales $ 1,168,918   $ 1,274,285   $ 1,300,998   $ 1,264,543   $ 5,008,744
Acquisitions proforma adjustment †   2,934     438     -     -     3,372
Net sales, acquisition adjusted $ 1,171,852   $ 1,274,723   $ 1,300,998   $ 1,264,543   $ 5,012,116
                             
                             
† Trailing 12 months sales have been adjusted for the pro forma effect of acquired branches
 

 
TopBuild Corp.
2023 Estimated Adjusted EBITDA Range (Unaudited)
(in millions)
               
  Twelve Months Ending December 31, 2023
  Low
  High
Estimated net income $ 445.0     $ 523.0  
Adjustments to arrive at estimated EBITDA, as adjusted:        
Interest expense and other, net   72.0       66.0  
Income tax expense   157.0       184.0  
Depreciation and amortization   128.0       123.0  
Share-based compensation   16.0       13.0  
Acquisition related costs   2.0       1.0  
Estimated EBITDA, as adjusted $ 820.0     $ 910.0  
               

 

 

 


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Source: TopBuild Corp.