Exhibit 99.1

TopBuild Reports Fourth Quarter 2015 Financial Results 

·

Net sales increased 7.1% to $426 million

·

$43.0 Million Operating Profit; $33.4 million on an adjusted basis, up 18%

·

$1.57 Diluted Earnings Per Share; $0.52 on an adjusted basis, up 27%

DAYTONA BEACH, March 3, 2016TopBuild Corp. (NYSE: BLD), the leading installer and distributor of insulation products to the United States construction industry, reported financial results for the fourth quarter and full-year ended December 31, 2015.  The Company also announced its capital allocation plan. 

 

Jerry Volas, Chief Executive Officer, stated, “Our fourth quarter results were solid as we continued to perform well within the growing new residential housing industry.  Compared to the fourth quarter of 2014, revenue increased 7.1% and our adjusted operating profit margin improved 70 basis points to 7.8%.  Although the labor market remains tight, extending the building cycle and the traditional lag time in our business, increasing new household formations are creating demand for new construction that will continue to drive the housing recovery.

 

“Our Company changed significantly in 2015.  On July 1, we became a separate public company and began trading on the New York Stock Exchange.  We emerged with the primary goals of positioning TopBuild to capitalize on the U.S. housing recovery and to exploit opportunities to increase market share throughout our national footprint.  Today, we have our team in place and our entire organization is focused on optimizing our operating margin by leveraging top line growth and improving efficiency throughout our operations.  Prospectively, we see our Company expanding both organically and through strategically selected accretive acquisitions and returning capital to our shareholders through a share repurchase program.”

 

Fourth Quarter Financial Highlights 

(unless otherwise indicated, comparisons are to quarter ended December 31, 2014)

 

The Company noted that fourth quarter operating adjustments included $0.3 million related to rationalization charges and $9.9 million of non-recurring income related to a change to an employee benefit policy. 

 

·

Net sales increased 7.1% to $426.5 million.

·

Reported gross margin was 24.5%, up 120 basis points.  On an adjusted basis, gross margin was 23.1%, a 20 basis point decline as a result of higher insurance costs.  Sequentially, adjusted gross margin increased 90 basis points. 

·

Operating profit increased 74.9% to $43.0 million.  Adjusted operating profit was $33.4 million compared to $28.2 million, an 18.4% improvement.

·

Operating margin improved 390 basis points to 10.1%.  Adjusted operating margin was 7.8%, up 70 basis points.

·

Net income from continuing operations was $59.7 million, or $1.57 per diluted share, compared to $5.9 million or $0.16 per diluted share.  2015 net income included a non-recurring income tax benefit of $18.2 million.  Excluding the income tax benefit of $18.2 million and other adjustments noted above, adjusted net income from continuing operations was $19.8 million, or $0.52 per diluted share, compared to $15.6 million or $0.41 per diluted share. 

·

Adjusted net income and diluted net income per share utilized an effective tax rate of 38%, up 200 basis points from previously disclosed estimates of a 36% normalized rate. 

 

At quarter end, the Company had cash and cash equivalents of $113 million and availability under its revolving credit facility of $70 million for total liquidity of $183 million. 

 

As previously disclosed, in the fourth quarter of 2014, the Company was incorrectly allocated a favorable legal settlement which overstated operating profit by $1.9 million (corrected in an out-of-period adjustment in first quarter 2015).  The Company also noted that in the fourth quarters of 2014 and 2015, it received favorable insurance adjustments of approximately $5.2 million and $5.6 million, respectively.  However, the 2015 positive adjustment was offset by charges impacting TruTeam relating to insurance expenses which were approximately $5.0 million higher than what the Company has historically incurred for these items.  Going forward, the Company believes the charges related to these items will revert to their historical run rate. 

 

1


 

Operating Segment Highlights

(all comparisons are to quarter ended December 31, 2014)

 

·

Installation (TruTeamSM)  

o

Net sales increased 10.9%.

o

Operating margin was 10.2%.  On an adjusted basis, operating margin was 6.8%, a 130 basis point improvement. 

·

Distribution (Service Partners®)

o

Net sales rose 1%.

o

Operating margin was 9.1%, a decrease of 20 basis points. 

 

Capital Allocation Plan

The Company also announced that it will use its free cash flow to fund strategic acquisitions and implement a share repurchase program approved by its Board of Directors.  Under the plan, the Company may purchase up to $50 million in shares of its common stock over the next 12 months.  Repurchases will be made from cash on hand as well as from a portion of the free cash flow expected to be generated from the business during that timeframe. 

 

Volas stated, "Our strong balance sheet provides us with the flexibility to initiate this $50 million share repurchase program while continuing to execute our strategic growth initiatives, including accretive acquisitions.  This program reflects our commitment to enhancing shareholder value and our confidence in TopBuild’s ability to generate top line growth and expand margins.” 

 

Repurchases will be made from time to time at the Company’s discretion, based on ongoing assessments of the capital needs of the business, the market price of its common stock and general market conditions.  The program may be suspended or discontinued at any time.

 

Additional Information

Quarterly supplemental materials, including a presentation that will be referenced on today’s conference call, are available on the “Investors” section of the Company’s website at www.topbuild.com.

 

Conference Call

A conference call to discuss fourth quarter and year-end 2015 financial results is scheduled for today, Thursday, March 3, 2016, at 9:00 a.m. Eastern Time.  Call participants may access the call by dialing (888) 221-6243.  The conference call will be webcast simultaneously on the “Investors” section of the Company’s website at www.topbuild.com.  

 

A replay of the call will be available on TopBuild’s website or by phone by dialing
(800) 633-8284.  The replay passcode is 21803958. 

 

Use of Non-GAAP Financial Measures

The “adjusted” financial measures and ratios presented above are not calculated in accordance with generally accepted accounting principles (“GAAP”).  The Company believes that these non-GAAP financial measures and ratios, 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.  Such non-GAAP financial measures are reconciled to their closest GAAP financial measures in a table incorporated in this news release.  Non-GAAP financial measures and ratios should be viewed in addition to, and not as an alternative for, the Company’s reported results under generally accepted accounting principles.  Additional information may be found in the Company’s filings with the Securities and Exchange Commission (“SEC”) which are available on TopBuild’s website under “Investors” at www.topbuild.com.

 

About TopBuild

TopBuild Corp., headquartered in Daytona Beach, Florida, is the leading installer and distributor of insulation products to the United States construction industry.  We provide insulation services nationwide through TruTeamSM, which has over 180 branches in 43 states.  Our Service Partners® business distributes insulation from over 70 branches in 35 states.  We leverage our national footprint to gain economies of scale while capitalizing on our local market presence to forge strong relationships with our customers.  To learn more about TopBuild visit our website at www.topbuild.com.

 

Safe Harbor Statement

Statements contained in this press release that reflect our views about our future performance constitute “forward-looking statements” under the Private Securities Litigation Reform Act of 1995.  Forward-looking statements can be identified by words such as “will,” “would,” “anticipate,” “expect,” “believe,” 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.  We caution you against relying on any of these forward-looking statements.  Our future performance may be

2


 

affected by our reliance on residential new construction, residential repair/remodel, and commercial construction; our reliance on third-party suppliers and manufacturers; our ability to attract, develop and retain talented personnel and our sales and labor force; our ability to maintain consistent practices across our locations; our ability to maintain our competitive position; and our ability to realize the expected benefits of the Company’s spin-off from Masco Corporation.  We discuss many of the risks we face under the caption entitled “Risk Factors” in our Registration Statement on Form 10 filed with the SEC.  Our forward-looking statements contained herein speak only as of the date of this press release.  Factors or events that could cause our actual results to differ may emerge from time to time and it is not possible for us to predict all of them.  Unless required by law, we undertake no obligation to update publicly any forward-looking statements as a result of new information, future events, or otherwise.

 

Investor Relations and Media Contact

Tabitha Zane

tabitha.zane@topbuild.com 
386-763-8801

 

(tables follow)

 

3


 

TopBuild Corp.

Consolidated Statements of Operations

(in thousands, except per common share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

December 31, 

 

December 31, 

 

 

2015

 

2014

 

2015

 

2014

Net sales

    

$

426,471

    

$

398,057

    

$

1,616,580

    

$

1,512,077

Cost of sales

 

 

321,950

 

 

305,292

 

 

1,258,551

 

 

1,180,409

Gross profit

 

 

104,521

 

 

92,765

 

 

358,029

 

 

331,668

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general, and administrative expense

 

 

61,524

 

 

68,183

 

 

274,498

 

 

290,951

Operating profit

 

 

42,997

 

 

24,582

 

 

83,531

 

 

40,717

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense), net:

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(1,571)

 

 

(3,106)

 

 

(9,465)

 

 

(12,404)

Other, net

 

 

35

 

 

8

 

 

49

 

 

25

Other expense, net:

 

 

(1,536)

 

 

(3,098)

 

 

(9,416)

 

 

(12,379)

Income from continuing operations before income taxes

 

 

41,461

 

 

21,484

 

 

74,115

 

 

28,338

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax benefit (expense) from continuing operations

 

 

18,208

 

 

(15,543)

 

 

5,008

 

 

(17,842)

Income from continuing operations

 

 

59,669

 

 

5,941

 

 

79,123

 

 

10,496

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from discontinued operations, net

 

 

82

 

 

(170)

 

 

(152)

 

 

(1,093)

Net income

 

$

59,751

 

$

5,771

 

$

78,971

 

$

9,403

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) per common share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic:

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

1.58

 

$

0.16

 

$

2.10

 

$

0.28

Loss from discontinued operations, net

 

 

 —

 

 

 —

 

 

 —

 

 

(0.03)

Net income

 

$

1.58

 

$

0.16

 

$

2.10

 

$

0.25

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted:

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

1.57

 

$

0.16

 

 

2.09

 

$

0.28

Loss from discontinued operations, net

 

 

 —

 

 

 —

 

 

 —

 

 

(0.03)

Net income

 

$

1.57

 

$

0.16

 

$

2.09

 

$

0.25

 

4


 

TopBuild Corp.

Consolidated Balance Sheets and Other Financial Data

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

As of December 31, 

 

 

2015

 

2014

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

112,848

 

$

2,965

Receivables, net of an allowance for doubtful accounts of $3,399 and $3,961 at December 31, 2015 and 2014, respectively

 

 

235,549

 

 

220,176

Inventories, net

 

 

118,701

 

 

106,972

Prepaid expenses and other current assets

 

 

13,263

 

 

5,117

Total current assets

 

 

480,361

 

 

335,230

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

93,066

 

 

93,157

Goodwill

 

 

1,044,041

 

 

1,044,041

Other intangible assets, net

 

 

1,987

 

 

2,962

Deferred tax assets, net

 

 

20,549

 

 

 —

Other assets

 

 

2,245

 

 

1,034

Total assets

 

$

1,642,249

 

$

1,476,424

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

253,311

 

$

228,720

Current portion of long-term debt

 

 

15,000

 

 

 —

Accrued liabilities

 

 

58,369

 

 

72,747

Total current liabilities

 

 

326,680

 

 

301,467

 

 

 

 

 

 

 

Long-term debt

 

 

178,457

 

 

 —

Deferred tax liabilities, net

 

 

181,254

 

 

182,281

Other liabilities

 

 

40,129

 

 

40,385

Total liabilities

 

 

726,520

 

 

524,133

 

 

 

 

 

 

 

EQUITY

 

 

915,729

 

 

952,291

Total liabilities and equity

 

$

1,642,249

 

$

1,476,424

 

 

 

 

 

 

 

 

 

 

 

 

As of

 

 

 

December 31, 

    

December 31, 

 

 

    

2015

 

2014

 

Other Financial Data

 

 

 

 

 

 

 

Working Capital Days

 

 

 

 

 

 

 

Receivable days

 

 

45

 

 

46

 

Inventory days

 

 

34

 

 

33

 

Accounts payable days

 

 

88

 

 

85

 

Working capital

 

$

100,939

 

$

98,428

 

Working capital as a % of sales (LTM)

 

 

6.2%

 

 

6.5%

 

 

 

5


 

 

TopBuild Corp.
Consolidated Statements of Cash Flows
(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

Twelve Months Ended

 

 

December 31, 

 

 

2015

 

2014

Net Cash From (For) Operating Activities:

 

 

 

 

 

 

Net income

 

$

78,971

 

$

9,403

Adjustments to reconcile net income to net cash from (for) operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

12,108

 

 

26,079

Share-based compensation

 

 

4,651

 

 

3,762

Loss on sale of property and equipment

 

 

2,334

 

 

364

Provision for bad debt expense

 

 

4,219

 

 

3,563

Loss from inventory obsolescence

 

 

1,879

 

 

1,302

Non-cash employee benefit policy change

 

 

(9,861)

 

 

 —

Deferred income taxes, net

 

 

(16,556)

 

 

16,711

Changes in certain assets and liabilities:

 

 

 

 

 

 

Receivables, net

 

 

(19,591)

 

 

(19,225)

Inventories, net

 

 

(13,608)

 

 

(10,287)

Prepaids and other current assets

 

 

(9,054)

 

 

100

Accounts payable

 

 

24,008

 

 

44,941

Accrued liabilities

 

 

(3,746)

 

 

(4,768)

Other, net

 

 

257

 

 

(84)

Net cash from operating activities

 

 

56,011

 

 

71,861

 

 

 

 

 

 

 

Cash Flows From (For) Investing Activities:

 

 

 

 

 

 

Purchases of property and equipment

 

 

(13,644)

 

 

(13,141)

Proceeds from sale of property and equipment

 

 

805

 

 

999

Other, net

 

 

632

 

 

880

Net cash for investing activities

 

 

(12,207)

 

 

(11,262)

 

 

 

 

 

 

 

Cash Flows From (For) Financing Activities:

 

 

 

 

 

 

Net transfer from (to) Former Parent

 

 

72,965

 

 

(60,655)

Cash distribution paid to Former Parent

 

 

(200,000)

 

 

 —

Proceeds from issuance of long-term debt

 

 

200,000

 

 

 —

Repayment of long-term debt

 

 

(5,000)

 

 

 —

Payment of debt issuance costs

 

 

(1,715)

 

 

 —

Other, net

 

 

(171)

 

 

 —

Net cash from (for) financing activities

 

 

66,079

 

 

(60,655)

 

 

 

 

 

 

 

Cash and Cash Equivalents

 

 

 

 

 

 

Increase (decrease) for the year

 

 

109,883

 

 

(56)

Beginning of year

 

 

2,965

 

 

3,021

End of year

 

$

112,848

 

$

2,965

 

 

 

 

 

 

 

Supplemental disclosure of cash paid for:

 

 

 

 

 

 

Cash interest on long-term debt

 

$

2,233

 

$

 —

Income taxes

 

 

20,992

 

 

1,134

 

 

 

 

 

 

 

Supplemental disclosure of noncash investing activities:

 

 

 

 

 

 

Accruals for property and equipment

 

$

583

 

$

 —

 

6


 

TopBuild Corp.

Segment Data (Unaudited)

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

 

 

Twelve Months Ended

 

 

 

 

 

 

December 31, 

 

 

 

 

 

December 31, 

 

 

 

 

 

 

2015

 

 

 

2014

 

Change

 

 

2015

 

 

 

2014

 

Change

Installation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

279,084

 

 

$

251,637

 

10.9

%

 

$

1,057,553

 

 

$

963,351

 

9.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating profit, as reported

 

$

28,519

 

 

$

12,763

 

 

 

 

$

55,232

 

 

$

23,970

 

 

 

Operating margin, as reported

 

 

10.2

%

 

 

5.1

%

 

 

 

 

5.2

%

 

 

2.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rationalization/spin-off charges

 

 

308

 

 

 

1,000

 

 

 

 

 

4,160

 

 

 

2,000

 

 

 

Legal and insurance adjustments, net

 

 

 —

 

 

 

 —

 

 

 

 

 

2,430

 

 

 

 —

 

 

 

Fixed asset disposal (truck mounted devices)

 

 

 —

 

 

 

 —

 

 

 

 

 

1,690

 

 

 

 —

 

 

 

Employee benefit policy change

 

 

(9,861)

 

 

 

 —

 

 

 

 

 

(9,861)

 

 

 

 —

 

 

 

Operating profit, as adjusted

 

$

18,966

 

 

$

13,763

 

 

 

 

$

53,651

 

 

$

25,970

 

 

 

Operating margin, as adjusted

 

 

6.8

%

 

 

5.5

%

 

 

 

 

5.1

%

 

 

2.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distribution

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

170,109

 

 

$

168,471

 

1.0

%

 

$

646,441

 

 

$

628,810

 

2.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating profit, as reported

 

$

15,517

 

 

$

15,612

 

 

 

 

$

55,700

 

 

$

52,334

 

 

 

Operating margin, as reported

 

 

9.1

%

 

 

9.3

%

 

 

 

 

8.6

%

 

 

8.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rationalization/spin-off charges

 

 

 —

 

 

 

 —

 

 

 

 

 

512

 

 

 

 —

 

 

 

Operating profit, as adjusted

 

$

15,517

 

 

$

15,612

 

 

 

 

$

56,212

 

 

$

52,334

 

 

 

Operating margin, as adjusted

 

 

9.1

%

 

 

9.3

%

 

 

 

 

8.7

%

 

 

8.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales before eliminations

 

$

449,193

 

 

$

420,108

 

 

 

 

$

1,703,994

 

 

$

1,592,161

 

 

 

Intercompany eliminations

 

 

(22,722)

 

 

 

(22,051)

 

 

 

 

 

(87,414)

 

 

 

(80,084)

 

 

 

Net sales after eliminations

 

$

426,471

 

 

$

398,057

 

7.1

%

 

$

1,616,580

 

 

$

1,512,077

 

6.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating profit, as reported - segment

 

$

44,036

 

 

$

28,375

 

 

 

 

$

110,932

 

 

$

76,304

 

 

 

General corporate expense, net

 

 

(4,583)

 

 

 

(4,917)

 

 

 

 

 

(22,605)

 

 

 

(21,948)

 

 

 

Intercompany eliminations and other adjustments

 

 

3,544

 

 

 

1,124

 

 

 

 

 

(4,796)

 

 

 

(13,639)

 

 

 

Operating profit, as reported

 

$

42,997

 

 

$

24,582

 

 

 

 

$

83,531

 

 

$

40,717

 

 

 

Operating margin, as reported

 

 

10.1

%

 

 

6.2

%

 

 

 

 

5.2

%

 

 

2.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rationalization/spin-off  charges - segment

 

 

308

 

 

 

1,000

 

 

 

 

 

4,672

 

 

 

2,000

 

 

 

Legal and insurance adjustments, net

 

 

 —

 

 

 

 —

 

 

 

 

 

2,430

 

 

 

 —

 

 

 

Fixed asset disposal (truck mounted devices)

 

 

 —

 

 

 

 —

 

 

 

 

 

1,690

 

 

 

 —

 

 

 

Masco general corporate expense, net

 

 

 —

 

 

 

4,917

 

 

 

 

 

13,627

 

 

 

21,948

 

 

 

Masco direct corporate expense

 

 

 —

 

 

 

3,248

 

 

 

 

 

5,604

 

 

 

17,782

 

 

 

Expected standalone corporate expense

 

 

 —

 

 

 

(5,500)

 

 

 

 

 

(11,000)

 

 

 

(22,000)

 

 

 

Employee benefit policy change

 

 

(9,861)

 

 

 

 —

 

 

 

 

 

(9,861)

 

 

 

 —

 

 

 

Operating profit, as adjusted

 

$

33,444

 

 

$

28,247

 

 

 

 

$

90,693

 

 

$

60,447

 

 

 

Operating margin, as adjusted

 

 

7.8

%

 

 

7.1

%

 

 

 

 

5.6

%

 

 

4.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share-based compensation

 

 

1,500

 

 

 

865

 

 

 

 

 

4,651

 

 

 

3,762

 

 

 

Depreciation and amortization

 

 

3,038

 

 

 

6,498

 

 

 

 

 

12,108

 

 

 

26,079

 

 

 

EBITDA, as adjusted

 

$

37,982

 

 

$

35,610

 

 

 

 

$

107,452

 

 

$

90,288

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales change period over period

 

 

28,414

 

 

 

 

 

 

 

 

 

104,503

 

 

 

 

 

 

 

EBITDA, as adjusted change period over period

 

 

2,372

 

 

 

 

 

 

 

 

 

17,164

 

 

 

 

 

 

 

EBITDA, as adjusted as percentage of sales change

 

 

8.3

%

 

 

 

 

 

 

 

 

16.4

%

 

 

 

 

 

 

 

7


 

TopBuild Corp.

Non-GAAP Reconciliations (Unaudited)

(in thousands, except common share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Three Months Ended

    

Twelve Months Ended

 

 

    

December 31, 

    

December 31, 

 

 

    

2015

    

2014

    

2015

    

2014

 

Gross Profit and Operating Profit Reconciliations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

426,471

 

$

398,057

 

$

1,616,580

 

$

1,512,077

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit, as reported

 

$

104,521

 

$

92,765

 

$

358,029

 

$

331,668

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Insurance adjustment

 

 

 —

 

 

 —

 

 

1,000

 

 

 —

 

Employee benefit policy change

 

 

(6,017)

 

 

 —

 

 

(6,017)

 

 

 —

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit, as adjusted

 

$

98,504

 

$

92,765

 

$

353,012

 

$

331,668

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin, as reported

 

 

24.5

%

 

23.3

%

 

22.1

%

 

21.9

%

Gross margin, as adjusted

 

 

23.1

%

 

23.3

%

 

21.8

%

 

21.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating profit, as reported

 

$

42,997

 

$

24,582

 

$

83,531

 

$

40,717

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rationalization/spin-off charges

 

 

308

 

 

1,000

 

 

4,672

 

 

2,000

 

Legal and insurance adjustments, net

 

 

 —

 

 

 —

 

 

2,430

 

 

 —

 

Fixed asset disposal (truck mounted device)

 

 

 —

 

 

 —

 

 

1,690

 

 

 —

 

Masco general corporate expense, net

 

 

 —

 

 

4,917

 

 

13,627

 

 

21,948

 

Masco direct corporate expense

 

 

 —

 

 

3,248

 

 

5,604

 

 

17,782

 

Expected standalone corporate expense

 

 

 —

 

 

(5,500)

 

 

(11,000)

 

 

(22,000)

 

Employee benefit policy change

 

 

(9,861)

 

 

 —

 

 

(9,861)

 

 

 —

 

Operating profit, as adjusted

 

$

33,444

 

$

28,247

 

$

90,693

 

$

60,447

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating margin, as reported

 

 

10.1

%

 

6.2

%

 

5.2

%

 

2.7

%

Operating margin, as adjusted

 

 

7.8

%

 

7.1

%

 

5.6

%

 

4.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Per Common Share Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

 

 

 

 

 

 

 

 

 

 

 

 

before income taxes, as reported

 

$

41,461

 

$

21,484

 

$

74,115

 

$

28,338

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rationalization/spin-off charges

 

 

308

 

 

1,000

 

 

4,672

 

 

2,000

 

Legal and insurance adjustments, net

 

 

 —

 

 

 —

 

 

2,430

 

 

 —

 

Fixed asset disposal (truck mounted device)

 

 

 —

 

 

 —

 

 

1,690

 

 

 —

 

Masco general corporate expense, net

 

 

 —

 

 

4,917

 

 

13,627

 

 

21,948

 

Masco direct corporate expense

 

 

 —

 

 

3,248

 

 

5,604

 

 

17,782

 

Expected standalone corporate expense

 

 

 —

 

 

(5,500)

 

 

(11,000)

 

 

(22,000)

 

Employee benefit policy change

 

 

(9,861)

 

 

 —

 

 

(9,861)

 

 

 —

 

Income from continuing operations

 

 

 

 

 

 

 

 

 

 

 

 

 

before income taxes, as adjusted