Exhibit 99.1

TopBuild  (NYSE:BLD), the leading purchaser, installer and distributor of insulation products to the U.S. construction industry, reports strong fourth quarter 2016 results

·

$444.1 Million Total Revenue, up 4.1%

·

$0.57 Diluted Income per Share, $0.59 on an Adjusted Basis, up 13.5%

·

Acquires Two Residential Insulation Installers

o

Four acquisitions completed in the past six months

·

Announces New Share Repurchase Program

 

Fourth Quarter Financial Highlights 

(unless otherwise indicated, comparisons are to the quarter ended December 31, 2015)

 

·

Net Sales increased 4.1% to $444.1 million, primarily driven by sales volume growth in both operating segments.

·

On a reported and adjusted basis, gross margin was 23.7%, down 80 basis points and up 60 basis points, respectively.

·

Operating profit was $35.9 million, down 16.4%.  On an adjusted basis, operating profit was $37.1 million, a 10.8% improvement.

o

2015 reported fourth quarter operating profit included a $9.9 million non-recurring benefit related to an employee benefit policy change.

·

Operating margin was 8.1%, down 200 basis points.  Adjusted operating margin improved 50 basis points to 8.3%. 

·

Income from continuing operations was $21.3 million, or $0.57 per diluted share, compared to $59.7 million, or $1.57 per diluted share.  Adjusted income from continuing operations was $22.2 million, or $0.59 per share, compared to $19.8 million, or $0.52 per diluted share, a 13.5% increase. 

o

2015 reported fourth quarter income from continuing operations included a non-recurring income tax benefit compared to the normal 38% tax rate of $30.3 million due primarily to the release of a valuation allowance against certain federal and state deferred tax assets and the $9.9 million non-recurring benefit related to an employee benefit policy change.

Jerry Volas, Chief Executive Officer, stated, “This was another strong quarter for TopBuild, with solid revenue and earnings growth and expanded adjusted operating margins in both business segments.  For the full year, we outpaced lagged housing starts, expanded adjusted operating margins 160 basis points and achieved incremental EBITDA margin of 29.4%.”

 

“Our team remains focused on growing market share and optimizing our operational performance and we expect 2017 to be another year of solid growth for TopBuild.”

 

Full-Year Financial Highlights

(unless otherwise indicated, comparisons are to the year ended December 31, 2015)

 

·

Net Sales increased 7.8% to $1.7 billion.

·

On a reported and adjusted basis, gross margin was 23.0%, up 90 basis points and 120 basis points, respectively.

·

Operating profit was $121.6 million, up 45.6%.  On an adjusted basis, operating profit was $124.9 million, a 37.7% improvement.

·

Operating margin was 7.0%, up 180 basis points.  Adjusted operating margin improved 160 basis points to 7.2%.

·

Income per diluted share from continuing operations was $1.92, down 8.1%.  Adjusted income per diluted share from continuing operations was $1.96, a 47.4% increase.

 

1


 

Operating Segment Highlights ($ in 000s)

(comparisons are to the quarter and year ended December 31, 2015)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3 Months

 

 

12 Months

 

 

 

3 Months

 

 

12 Months

 

 

Ended

 

 

Ended

 

 

 

Ended

 

 

Ended

 

TruTeam

12/31/2016

 

 

12/31/2016

 

 

Service Partners

12/31/2016

 

 

12/31/2016

 

Sales

$

289,244

 

 

$

1,150,168

 

 

Sales

$

177,404

 

 

$

676,672

 

Change

 

3.6

%

 

 

8.8

%

 

Change

 

4.3

%

 

 

4.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Margin

 

9.9

%

 

 

8.4

%

 

Operating Margin

 

9.2

%

 

 

8.8

%

Change

 

(30 bps)

 

 

 

320 bps

 

 

Change

 

10 bps

 

 

 

20 bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adj. Operating Margin

 

10.0

%

 

 

8.6

%

 

Adj. Operating Margin

 

9.3

%

 

 

8.9

%

Change

 

320 bps

 

 

 

350 bps

 

 

Change

 

20 bps

 

 

 

20 bps

 

 

Acquisitions

In February 2017, the Company completed two acquisitions, EcoFoam/Insulutions and MR Insulfoam.  EcoFoam/Insulutions is a residential and light commercial installation company with locations in Colorado Springs and Denver which generated approximately $23 million of revenue for the twelve months ended December 31, 2016.  MR Insulfoam a residential insulation company with a strong focus on spray foam insulation, is located in Norwalk, Connecticut and had annual revenues of approximately $2 million. 

 

The Company noted that EcoFoam/Insulutions owner, Bobby Cotten, has been in the industry for almost three decades and Mike Angotta, MR Insulfoam’s owner, has 40 years of industry experience.  Both have joined TruTeam’s management team. 

 

These two acquisitions, combined with the previously announced acquisitions of Midwest Fireproofing, a heavy commercial insulation installer, and Valley Insulation, a residential insulation installer, are expected to contribute almost $41 million of annual revenue. 

 

Volas stated, “As we have consistently stated, the top priority of our capital allocation plan is funding acquisitions that expand our residential and commercial footprint and enhance our capabilities.  Over the past year we have built an M&A team focused on the identification of viable partners, due diligence and integration.  Their initial success is evidenced by the completion of four acquisitions over the past six months.  We also have a solid pipeline of prospects we are currently evaluating and expect to close additional acquisitions throughout this year.”

 

Share Repurchase Program

The Company also announced that its Board of Directors has authorized a new share repurchase program whereby the Company may purchase up to $200 million of its common stock over the next 24 months.  This program replaces the previous one which expires on February 28, 2017.  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.  

 

At quarter end, the Company had cash and cash equivalents of $134.4 million and availability under its revolving credit facility of $75.9 million for total liquidity of $210.3 million. 

 

Volas stated, “Our Board recognizes our financial and operational strengths and understands that we anticipate continuing to generate cash beyond what is required to fund acquisitions, our number one capital allocation priority.  Therefore, to significantly improve the efficiency of the Company’s capital structure, they have approved this $200 million share repurchase program, which we plan to aggressively execute.”

 

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.

2


 

Conference Call

A conference call to discuss fourth quarter and year-end 2016 financial results is scheduled for today, Tuesday, February 28, 2017, at 9:00 a.m. Eastern Time.  The call may be accessed by dialing (800) 705-8289.  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. A telephonic replay will be available for one week beginning at 11:00 a.m. Eastern Time.  To access the telephonic replay please dial (800) 633-8284 and enter the passcode: 21823173.

About TopBuild

TopBuild Corp., headquartered in Daytona Beach, Florida, is the leading purchaser, installer and distributor of insulation products to the U.S. construction industry. We provide insulation services nationwide through TruTeamSM, which has over 170 branches and our Service Partners® business distributes insulation from over 70 branches.  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 please visit our website at www.topbuild.com.

 

Use of Non-GAAP Financial Measures

The “adjusted” financial measures presented above 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.  Such non-GAAP financial measures are reconciled to their closest GAAP financial measures in tables contained in this news 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 “Investors” 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 and the related assumptions underlying our expected results.  These forward-looking statements are distinguished by use of words such as “will,” “would,” “anticipate,” “expect,” “believe,” “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 publicly 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)

 

3


 

TopBuild Corp.

Consolidated Statements of Operations

(in thousands, except per common share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended December 31, 

 

Year Ended December 31, 

 

 

2016

 

2015

 

2016

 

2015

Net sales

    

$

444,135

    

$

426,471

    

$

1,742,850

    

$

1,616,580

Cost of sales

 

 

339,073

 

 

321,950

 

 

1,342,506

 

 

1,258,551

Gross profit

 

 

105,062

 

 

104,521

 

 

400,344

 

 

358,029

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general, and administrative expense

 

 

69,118

 

 

61,524

 

 

278,740

 

 

274,498

Operating profit

 

 

35,944

 

 

42,997

 

 

121,604

 

 

83,531

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense), net:

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(1,293)

 

 

(1,571)

 

 

(5,608)

 

 

(9,465)

Other, net

 

 

77

 

 

35

 

 

277

 

 

49

Other expense, net

 

 

(1,216)

 

 

(1,536)

 

 

(5,331)

 

 

(9,416)

Income from continuing operations before income taxes

 

 

34,728

 

 

41,461

 

 

116,273

 

 

74,115

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax (expense) benefit from continuing operations

 

 

(13,421)

 

 

18,208

 

 

(43,667)

 

 

5,008

Income from continuing operations

 

 

21,307

 

 

59,669

 

 

72,606

 

 

79,123

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from discontinued operations, net

 

 

 —

 

 

82

 

 

 —

 

 

(152)

Net income

 

$

21,307

 

$

59,751

 

$

72,606

 

$

78,971

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) per common share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic:

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

0.57

 

$

1.58

 

$

1.93

 

$

2.10

Income (loss) from discontinued operations, net

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Net income

 

$

0.57

 

$

1.58

 

$

1.93

 

$

2.10

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted:

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

0.57

 

$

1.57

 

$

1.92

 

$

2.09

Income (loss) from discontinued operations, net

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Net income

 

$

0.57

 

$

1.57

 

$

1.92

 

$

2.09

 

4


 

TopBuild Corp.

Consolidated Balance Sheets and Other Financial Data

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

As of

 

    

December 31, 

 

December 31, 

 

 

2016

    

2015

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

134,375

 

$

112,848

Receivables, net of an allowance for doubtful accounts of $3,374 and $3,399 at December 31, 2016 and December 31, 2015, respectively

 

 

252,624

 

 

235,549

Inventories, net

 

 

116,190

 

 

118,701

Prepaid expenses and other current assets

 

 

23,364

 

 

13,263

Total current assets

 

 

526,553

 

 

480,361

 

 

 

 

 

 

 

Property and equipment, net

 

 

92,760

 

 

93,066

Goodwill

 

 

1,045,058

 

 

1,044,041

Other intangible assets, net

 

 

2,656

 

 

1,987

Deferred tax assets, net

 

 

19,469

 

 

20,549

Other assets

 

 

3,623

 

 

2,245

Total assets

 

$

1,690,119

 

$

1,642,249

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

241,534

 

$

253,311

Current portion of long-term debt

 

 

20,000

 

 

15,000

Accrued liabilities

 

 

64,399

 

 

58,369

Total current liabilities

 

 

325,933

 

 

326,680

 

 

 

 

 

 

 

Long-term debt

 

 

158,800

 

 

178,457

Deferred tax liabilities, net

 

 

193,715

 

 

181,254

Long-term portion of insurance reserves

 

 

38,691

 

 

39,655

Other liabilities

 

 

433

 

 

474

Total liabilities

 

 

717,572

 

 

726,520

 

 

 

 

 

 

 

EQUITY

 

 

972,547

 

 

915,729

Total liabilities and equity

 

$

1,690,119

 

$

1,642,249

 

 

 

 

 

 

 

 

 

 

 

 

As of December 31, 

 

 

    

2016

   

2015

 

Other Financial Data

 

 

 

 

 

 

 

Working Capital Days

 

 

 

 

 

 

 

Receivable days

 

 

46

 

 

45

 

Inventory days

 

 

31

 

 

34

 

Accounts payable days

 

 

82

 

 

88

 

Working capital

 

$

127,280

 

$

100,939

 

Working capital as a percent of sales (LTM)

 

 

7.3

%

 

6.2

%

 

 

5


 

 

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

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 

 

 

2016

 

2015

Net Cash Provided by (Used in) Operating Activities:

 

 

    

    

 

    

Net income

 

$

72,606

 

$

78,971

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

12,011

 

 

12,108

Share-based compensation

 

 

7,669

 

 

4,651

Loss on sale or abandonment of property and equipment

 

 

2,737

 

 

2,334

Amortization of debt issuance costs

 

 

343

 

 

171

Provision for bad debt expense

 

 

3,292

 

 

4,219

Loss from inventory obsolescence

 

 

1,343

 

 

1,879

Non-cash employee benefit policy change

 

 

 —

 

 

(9,861)

Deferred income taxes, net

 

 

13,540

 

 

(16,556)

Changes in certain assets and liabilities:

 

 

 

 

 

 

Receivables, net

 

 

(19,953)

 

 

(19,591)

Inventories, net

 

 

1,370

 

 

(13,608)

Prepaid expenses and other current assets

 

 

(10,102)

 

 

(9,054)

Accounts payable

 

 

(11,698)

 

 

24,008

Accrued liabilities

 

 

3,633

 

 

(3,746)

Other, net

 

 

(6)

 

 

86

Net cash provided by operating activities

 

 

76,785

 

 

56,011

 

 

 

 

 

 

 

Cash Flows Provided by (Used in) Investing Activities:

 

 

 

 

 

 

Purchases of property and equipment

 

 

(14,156)

 

 

(13,644)

Acquisition of a business

 

 

(3,476)

 

 

 —

Proceeds from sale of property and equipment

 

 

718

 

 

805

Other, net

 

 

113

 

 

632

Net cash used in investing activities

 

 

(16,801)

 

 

(12,207)

 

 

 

 

 

 

 

Cash Flows Provided by (Used in) Financing Activities:

 

 

 

 

 

 

Net transfer from Former Parent

 

 

664

 

 

72,965

Cash distribution paid to Former Parent

 

 

 —

 

 

(200,000)

Proceeds from issuance of long-term debt

 

 

 —

 

 

200,000

Repayment of long-term debt

 

 

(15,000)

 

 

(5,000)

Payment of debt issuance costs

 

 

 —

 

 

(1,715)

Taxes withheld and paid on employees' equity awards

 

 

(1,825)

 

 

(171)

Repurchase of shares of common stock

 

 

(22,296)

 

 

 —

Net cash (used in) provided by financing activities

 

 

(38,457)

 

 

66,079

 

 

 

 

 

 

 

Cash and Cash Equivalents

 

 

 

 

 

 

Increase for the period

 

 

21,527

 

 

109,883

Beginning of year

 

 

112,848

 

 

2,965

End of period

 

$

134,375

 

$

112,848

 

 

 

 

 

 

 

Supplemental disclosure of cash paid for:

 

 

 

 

 

 

Cash interest on long-term debt

 

$

4,130

 

$

2,233

Income taxes

 

 

39,508

 

 

20,992

 

 

 

 

 

 

 

Supplemental disclosure of noncash investing activities:

 

 

 

 

 

 

Accruals for property and equipment

 

$

387

 

$

583

 

6


 

TopBuild Corp.

Segment Data (Unaudited)

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended December 31, 

 

 

 

 

 

Year Ended December 31, 

 

 

 

 

 

 

 

2016

 

2015

 

 

Change

 

2016

 

2015

 

 

Change

 

Installation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$

289,244

 

$

279,084

 

 

3.6

%

 

$

1,150,168

 

$

1,057,553

 

 

8.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating profit, as reported

 

$

28,641

 

$

28,519

 

 

 

 

 

$

97,140

 

$

55,232

 

 

 

 

 

Operating margin, as reported

 

 

9.9

%

 

10.2

%

 

 

 

 

 

8.4

%

 

5.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rationalization charges†

 

 

202

 

 

308

 

 

 

 

 

 

1,211

 

 

4,160

 

 

 

 

 

Legal adjustments, net

 

 

 —

 

 

 —

 

 

 

 

 

 

 —

 

 

2,430

 

 

 

 

 

Fixed asset disposal (truck mounted devices)

 

 

 —

 

 

 —

 

 

 

 

 

 

 —

 

 

1,690

 

 

 

 

 

Employee benefit policy change

 

 

 —

 

 

(9,861)

 

 

 

 

 

 

 —

 

 

(9,861)

 

 

 

 

 

Operating profit, as adjusted

 

$

28,843

 

$

18,966

 

 

 

 

 

$

98,351

 

$

53,651

 

 

 

 

 

Operating margin, as adjusted

 

 

10.0

%

 

6.8

%

 

 

 

 

 

8.6

%

 

5.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distribution

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$

177,404

 

$

170,109

 

 

4.3

%

 

$

676,672

 

$

646,441

 

 

4.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating profit, as reported

 

$

16,238

 

$

15,517

 

 

 

 

 

$

59,654

 

$

55,700

 

 

 

 

 

Operating margin, as reported

 

 

9.2

%

 

9.1

%

 

 

 

 

 

8.8

%

 

8.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rationalization charges

 

 

173

 

 

 —

 

 

 

 

 

 

256

 

 

512

 

 

 

 

 

Operating profit, as adjusted

 

$

16,411

 

$

15,517

 

 

 

 

 

$

59,910

 

$

56,212

 

 

 

 

 

Operating margin, as adjusted

 

 

9.3

%

 

9.1

%

 

 

 

 

 

8.9

%

 

8.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales before eliminations

 

$

466,648

 

$

449,193

 

 

 

 

 

$

1,826,840

 

$

1,703,994

 

 

 

 

 

Intercompany eliminations

 

 

(22,513)

 

 

(22,722)

 

 

 

 

 

 

(83,990)

 

 

(87,414)

 

 

 

 

 

Net sales after eliminations

 

$

444,135

 

$

426,471

 

 

4.1

%

 

$

1,742,850

 

$

1,616,580

 

 

7.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating profit, as reported - segment

 

$

44,879

 

$

44,036

 

 

 

 

 

$

156,794

 

$

110,932

 

 

 

 

 

General corporate expense, net

 

 

(5,084)

 

 

(4,583)

 

 

 

 

 

 

(20,802)

 

 

(22,605)

 

 

 

 

 

Intercompany eliminations and other adjustments

 

 

(3,851)

 

 

3,544

 

 

 

 

 

 

(14,388)

 

 

(4,796)

 

 

 

 

 

Operating profit, as reported

 

$

35,944

 

$

42,997

 

 

 

 

 

$

121,604

 

$

83,531

 

 

 

 

 

Operating margin, as reported

 

 

8.1

%

 

10.1

%

 

 

 

 

 

7.0

%

 

5.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rationalization charges†‡

 

 

1,049

 

 

308

 

 

 

 

 

 

3,139

 

 

4,672

 

 

 

 

 

Legal adjustments, net

 

 

 —

 

 

 —

 

 

 

 

 

 

 —

 

 

2,430

 

 

 

 

 

Acquisition costs

 

 

69

 

 

 —

 

 

 

 

 

 

124

 

 

 —

 

 

 

 

 

Fixed asset disposal (truck mounted devices)

 

 

 —

 

 

 —

 

 

 

 

 

 

 —

 

 

1,690

 

 

 

 

 

Masco general corporate expense, net

 

 

 —

 

 

 —

 

 

 

 

 

 

 —

 

 

13,627

 

 

 

 

 

Masco direct corporate expense

 

 

 —

 

 

 —

 

 

 

 

 

 

 —

 

 

5,604

 

 

 

 

 

Expected standalone corporate expense

 

 

 —

 

 

 —

 

 

 

 

 

 

 —

 

 

(11,000)

 

 

 

 

 

Employee benefit policy change

 

 

 —

 

 

(9,861)

 

 

 

 

 

 

 —

 

 

(9,861)

 

 

 

 

 

Operating profit, as adjusted

 

$

37,062

 

$

33,444

 

 

 

 

 

$

124,867

 

$

90,693

 

 

 

 

 

Operating margin, as adjusted

 

 

8.3

%

 

7.8

%

 

 

 

 

 

7.2

%

 

5.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share-based compensation

 

 

1,926

 

 

1,500

 

 

 

 

 

 

7,669

 

 

4,651

 

 

 

 

 

Depreciation and amortization

 

 

3,088

 

 

3,038

 

 

 

 

 

 

12,011

 

 

12,108

 

 

 

 

 

EBITDA, as adjusted

 

$

42,076

 

$

37,982

 

 

 

 

 

$

144,547

 

$

107,452

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales change period over period

 

 

17,664

 

 

 

 

 

 

 

 

 

126,270

 

 

 

 

 

 

 

 

EBITDA, as adjusted change period over period

 

 

4,094

 

 

 

 

 

 

 

 

 

37,095

 

 

 

 

 

 

 

 

EBITDA, as adjusted as percentage of sales change

 

 

23.2

%

 

 

 

 

 

 

 

 

29.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

† 2015 Rationalization charges included spin-off charges.

 

 

 

 

 

‡ 2016 Rationalization charges include corporate level adjustments as well as segment operating adjustments.

 

 

 

 

 

 

7


 

TopBuild Corp.

Non-GAAP Reconciliations (Unaudited)

(in thousands, except common share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended December 31, 

 

Year Ended  December 31, 

 

 

 

2016

 

2015

 

2016

 

2015

 

Gross Profit and Operating Profit Reconciliations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

444,135

 

$

426,471

 

$

1,742,850

 

$

1,616,580

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit, as reported

 

$

105,062

 

$

104,521

 

$

400,344

 

$

358,029

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Insurance adjustment

 

 

 —

 

 

 —

 

 

 —

 

 

1,000

 

Employee benefit policy change

 

 

 —

 

 

(6,017)

 

 

 —

 

 

(6,017)

 

Gross profit, as adjusted

 

$

105,062

 

$

98,504

 

$

400,344

 

$

353,012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin, as reported

 

 

23.7

%

 

24.5

%

 

23.0

%

 

22.1

%

Gross margin, as adjusted

 

 

23.7

%

 

23.1

%

 

23.0

%

 

21.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating profit, as reported

 

$

35,944

 

$

42,997

 

$

121,604

 

$

83,531

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rationalization charges†

 

 

1,049

 

 

308

 

 

3,139

 

 

4,672

 

Acquisition costs

 

 

69

 

 

 —

 

 

124

 

 

 —

 

Legal adjustments, net

 

 

 —

 

 

 —

 

 

 —

 

 

2,430

 

Fixed asset disposal (truck mounted device)

 

 

 —

 

 

 —

 

 

 —

 

 

1,690

 

Masco general corporate expense, net

 

 

 —

 

 

 —

 

 

 —

 

 

13,627

 

Masco direct corporate expense

 

 

 —

 

 

 —

 

 

 —

 

 

5,604

 

Expected standalone corporate expense

 

 

 —

 

 

 —

 

 

 —

 

 

(11,000)

 

Employee benefit policy change

 

 

 —

 

 

(9,861)

 

 

 —

 

 

(9,861)

 

Operating profit, as adjusted

 

$

37,062

 

$

33,444

 

$

124,867

 

$

90,693

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating margin, as reported

 

 

8.1

%

 

10.1

%

 

7.0

%

 

5.2

%

Operating margin, as adjusted

 

 

8.3

%

 

7.8

%

 

7.2

%

 

5.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Per Common Share Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations before income taxes, as reported

 

$

34,728

 

$

41,461

 

$

116,273

 

$

74,115

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rationalization charges†

 

 

1,049

 

 

308

 

 

3,139

 

 

4,672

 

Acquisition costs

 

 

69

 

 

 —

 

 

124

 

 

 —

 

Legal adjustments, net

 

 

 —

 

 

 —

 

 

 —

 

 

2,430

 

Fixed asset disposal (truck mounted device)

 

 

 —

 

 

 —

 

 

 —

 

 

1,690

 

Masco general corporate expense, net

 

 

 —

 

 

 —

 

 

 —

 

 

13,627

 

Masco direct corporate expense

 

 

 —

 

 

 —

 

 

 —

 

 

5,604

 

Expected standalone corporate expense

 

 

 —

 

 

 —

 

 

 —

 

 

(11,000)

 

Employee benefit policy change

 

 

 —

 

 

(9,861)

 

 

 —

 

 

(9,861)

 

Income from continuing operations before income taxes, as adjusted

 

 

35,846

 

 

31,908

 

 

119,536

 

 

81,277

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax rate at 38% rate

 

 

(13,621)

 

 

(12,125)

 

 

(45,424)

 

 

(30,885)

 

Income from continuing operations, as adjusted

 

$

22,225

 

$

19,783

 

$

74,112

 

$

50,392

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income per common share, as adjusted

 

$

0.59

 

$

0.52

 

$

1.96

 

$

1.33

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average diluted common shares outstanding

 

 

37,644,065

 

 

37,910,642

 

 

37,867,212

 

 

37,780,875

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

† 2015 Rationalization charges included spin-off charges.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8