Exhibit 99.1

TopBuild (NYSE:BLD), the leading purchaser, installer and distributor of insulation products to the U.S. construction industry, reports strong second quarter 2017 results

·

8.6% Operating Margin, 8.9% on an Adjusted Basis

·

$0.63 Per Diluted Share Income from Continuing Operations,

·

$0.67 Per Diluted Share on an Adjusted Basis

 

Completed Two Acquisitions with ~$40 Million of Annual Revenue

$83 million of anticipated annual incremental revenue from companies acquired in 2017

 

Second Quarter Financial Highlights 

(unless otherwise indicated, comparisons are to the quarter ended June 30, 2016)

 

·

Net sales increased 9.9% to $474.5 million, primarily driven by sales volume growth in both operating segments as well as acquisitions. On a same branch basis, revenue increased 5.1% to $453.6 million. 

·

Gross margin expanded 200 basis points to 24.6%.

·

Operating profit was $40.8 million, compared to operating profit of $26.8 million.  On an adjusted basis, operating profit was $42.2 million, compared to $27.4 million, a 53.8% improvement.

·

Operating margin was 8.6%, up 240 basis points.  Adjusted operating margin improved 250 basis points to 8.9%.

·

Income from continuing operations was $23.5 million, or $0.63 per diluted share, compared to $15.6 million, or $0.41 per diluted share. Adjusted income from continuing operations was $25.0 million, or $0.67 per diluted share, compared to $16.2 million, or $0.43 per diluted share. 

·

Adjusted EBITDA was $48.2 million, compared to $32.6 million, a 48.1% increase.  Incremental EBITDA margin was 36.5%. On a same branch basis, adjusted EBITDA was $45.6 million, a 40.1% increase, and incremental EBITDA margin was 59.1%. 

·

The seven acquisitions completed over the past 12 months contributed $20.8 million of revenue.  Incremental EBITDA related to these acquisitions improved 680 basis points from first quarter 2017 to 12.5%.

·

At June 30, 2017, the Company had cash and cash equivalents of $94.2 million, availability under its revolving credit facility of $201.0 million and $100 million available under a delayed draw term loan for total liquidity of $395.2 million.

 

Jerry Volas, Chief Executive Officer, stated,  “We had another outstanding quarter as we continue to grow our two business segments and expand operating margins.  Commercial and residential new construction are demonstrating consistent strength and we continue to benefit from our business model and national scale.  Looking ahead, we have strong momentum going into the second half of the year.  Our focus remains on driving top line growth and improving operational efficiencies throughout the Company, generating strong results for our shareholders.”

 

Six Month Financial Highlights

(unless otherwise indicated, comparisons are to six months ended June 30, 2016)

 

·

Net sales increased 8.3% to $915.8 million. On a same branch basis, revenue increased 4.9% to $887.4 million. 

·

Gross margin expanded 170 basis points to 23.8%.

·

Operating profit was $37.3 million, compared to operating profit of $46.6 million.  In the first quarter of 2017, the Company reported an operating loss of $3.5 million related to a $30 million legal settlement.  On an adjusted basis, operating profit was $70.8 million, compared to $48.2 million, a 46.8% improvement.

·

Operating margin was 4.1%, down 140 basis points.  Adjusted operating margin improved 200 basis points to 7.7%. 

·

Income from continuing operations was $21.7 million, or $0.58 per diluted share, compared to $26.7 million, or $0.70 per diluted share.  Adjusted income from continuing operations was $42.0 million, or $1.12 per diluted share, compared to $28.1 million, or $0.74 per diluted share. 

·

Adjusted EBITDA was $82.1 million, compared to $57.8 million, a 42.0% increase.  Incremental EBITDA margin was 34.6%. On a same branch basis, adjusted EBITDA grew 36.7% to $79.1 million and incremental EBITDA margin was 50.8%.

 

 

 

 

 

 

1


 

Operating Segment Highlights ($ in 000s)

(comparisons are to the period ended June 30, 2016)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3 Months

 

 

6 Months

 

 

 

3 Months

 

 

6 Months

 

 

Ended

 

 

Ended

 

 

 

Ended

 

 

Ended

 

TruTeam

6/30/2017

 

 

6/30/2017

 

 

Service Partners

6/30/2017

 

 

6/30/2017

 

Sales

$

320,984

 

 

$

611,870

 

 

Sales

$

175,062

 

 

$

345,306

 

Change

 

11.4

%

 

 

9.1

%

 

Change

 

6.6

%

 

 

6.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Margin

 

10.9

%

 

 

4.3

%

 

Operating Margin

 

9.7

%

 

 

9.4

%

Change

 

300 bps

 

 

 

(220) bps

 

 

Change

 

150 bps

 

 

 

80 bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adj. Operating Margin

 

11.0

%

 

 

9.3

%

 

Adj. Operating Margin

 

9.7

%

 

 

9.4

%

Change

 

310 bps

 

 

 

270 bps

 

 

Change

 

150 bps

 

 

 

80 bps

 

 

Capital Allocation

Acquisitions

In the second quarter, the Company acquired Superior Insulation Products, a residential insulation company, and Canyon Insulation, a heavy commercial insulation and firestopping company.  Combined, these companies generated approximately $40 million in revenue for 2016.  Year-to-date, through August 8, 2017, the Company has closed six acquisitions, four concentrating on residential insulation and two on heavy commercial.  Combined, these acquisitions are expected to generate approximately $83 million of incremental revenue on an annual basis. 

 

Volas stated,  “Acquisitions remain our number one capital allocation priority and the pipeline of prospects our M&A team is currently evaluating is robust.  Year-to-date, we’ve completed six acquisitions that are expected to contribute approximately $83 million of incremental annual revenue.” 

 

Share Repurchases

In the second quarter, under the $200 million share repurchase program announced on February 28, 2017, the Company repurchased 461,358 shares at an average price of $47.48 per share.  Year-to-date, through June 30, the Company has acquired 858,393 shares at an average share price of $45.77. 

 

In addition, as previously announced, the Company entered into an agreement with Bank of America Merrill Lynch (BofAML) to repurchase $100 million of the Company’s common stock under an accelerated share repurchase program.  On July 5th,  the Company made a payment of $100.0 million to BofAML, using $30 million of cash on hand and borrowing $70 million under its revolving facility.  In exchange, the Company received approximately 1.5 million shares with a value of approximately $80 million.  The remaining $20 million balance is expected to settle no later than the end of the first quarter of 2018. 

 

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 second quarter 2017 financial results is scheduled for today, Tuesday, August 8, at 9:00 a.m. Eastern Time.  The call may be accessed by dialing (877) 256-5211.  The conference call will be webcast simultaneously on the “Investors” section of the Company’s website at www.topbuild.com.  A replay will be available for one week beginning at 11:00 a.m. Eastern Time and may be accessed by dialing (800) 633-8284 and entering the passcode: 21842821.

 

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 TruTeam®, which has over 175 branches, and through Service Partners® which 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.

 

 

 

2


 

Use of Non-GAAP Financial Measures

EBITDA, incremental 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 “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,” “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 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.

Condensed Consolidated Statements of Operations (Unaudited)

(in thousands, except per common share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 

 

Six Months Ended June 30, 

 

 

2017

 

2016

 

2017

 

2016

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

    

$

474,458

    

$

431,589

    

$

915,821

    

$

845,613

Cost of sales

 

 

357,849

 

 

333,901

 

 

697,584

 

 

658,470

Gross profit

 

 

116,609

 

 

97,688

 

 

218,237

 

 

187,143

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general, and administrative expense (exclusive of significant legal settlement, shown separately below)

 

 

75,813

 

 

70,898

 

 

150,904

 

 

140,586

Significant legal settlement

 

 

 —

 

 

 —

 

 

30,000

 

 

 —

Operating profit

 

 

40,796

 

 

26,790

 

 

37,333

 

 

46,557

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense), net:

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(1,918)

 

 

(1,371)

 

 

(3,288)

 

 

(3,044)

Loss on extinguishment of debt

 

 

(1,086)

 

 

 —

 

 

(1,086)

 

 

 —

Other, net

 

 

105

 

 

61

 

 

212

 

 

136

Other expense, net

 

 

(2,899)

 

 

(1,310)

 

 

(4,162)

 

 

(2,908)

Income from continuing operations before income taxes

 

 

37,897

 

 

25,480

 

 

33,171

 

 

43,649

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense from continuing operations

 

 

(14,437)

 

 

(9,865)

 

 

(11,422)

 

 

(16,918)

Income from continuing operations

 

 

23,460

 

 

15,615

 

 

21,749

 

 

26,731

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

23,460

 

$

15,615

 

$

21,749

 

$

26,731

 

 

 

 

 

 

 

 

 

 

 

 

 

Income per common share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic:

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

0.64

 

$

0.41

 

$

0.59

 

$

0.71

Net income

 

$

0.64

 

$

0.41

 

$

0.59

 

$

0.71

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted:

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

0.63

 

$

0.41

 

$

0.58

 

$

0.70

Net income

 

$

0.63

 

$

0.41

 

$

0.58

 

$

0.70

 

4


 

TopBuild Corp.

Condensed Consolidated Balance Sheets and Other Financial Data (Unaudited)

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

As of

 

    

June 30, 

 

December 31, 

 

 

2017

    

2016

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

94,233

 

$

134,375

Receivables, net of an allowance for doubtful accounts of $3,566 and $3,374 at June 30, 2017, and December 31, 2016, respectively

 

 

297,325

 

 

252,624

Inventories, net

 

 

111,640

 

 

116,190

Prepaid expenses and other current assets

 

 

23,391

 

 

23,364

Total current assets

 

 

526,589

 

 

526,553

 

 

 

 

 

 

 

Property and equipment, net

 

 

98,185

 

 

92,760

Goodwill

 

 

1,084,833

 

 

1,045,058

Other intangible assets, net

 

 

28,786

 

 

2,656

Deferred tax assets, net

 

 

19,469

 

 

19,469

Other assets

 

 

3,197

 

 

3,623

Total assets

 

$

1,761,059

 

$

1,690,119

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

243,000

 

$

241,534

Current portion of long-term debt

 

 

12,500

 

 

20,000

Accrued liabilities

 

 

77,175

 

 

64,399

Total current liabilities

 

 

332,675

 

 

325,933

 

 

 

 

 

 

 

Long-term debt

 

 

235,422

 

 

158,800

Deferred tax liabilities, net

 

 

193,715

 

 

193,715

Long-term portion of insurance reserves

 

 

38,132

 

 

38,691

Other liabilities

 

 

3,151

 

 

433

Total liabilities

 

 

803,095

 

 

717,572

 

 

 

 

 

 

 

EQUITY

 

 

957,964

 

 

972,547

Total liabilities and equity

 

$

1,761,059

 

$

1,690,119

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of June 30, 

 

 

    

2017

   

2016

 

Other Financial Data

 

 

 

 

 

 

 

Working Capital Days†

 

 

 

 

 

 

 

Receivable days

 

 

45

 

 

46

 

Inventory days

 

 

29

 

 

28

 

Accounts payable days

 

 

83

 

 

82

 

Working capital

 

$

165,965

 

$

143,202

 

Working capital as a percent of sales (LTM)‡

 

 

8.8

%

 

8.4

%

 

 

 

 

† Amounts adjusted for acquisitions for comparability purposes

‡ Last 12 months sales have been adjusted for the pro forma effect of acquired branches

 

5


 

 

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

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 

 

 

2017

 

2016

Net Cash Provided by (Used in) Operating Activities:

 

 

    

    

 

    

Net income

 

$

21,749

 

$

26,731

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

 

 

 

 

 

 

Depreciation and amortization

 

 

6,835

 

 

5,908

Share-based compensation

 

 

5,101

 

 

3,705

Loss on extinguishment of debt

 

 

1,086

 

 

 —

Loss on sale or abandonment of property and equipment

 

 

285

 

 

1,477

Amortization of debt issuance costs

 

 

186

 

 

171

Provision for bad debt expense

 

 

1,750

 

 

1,986

Loss from inventory obsolescence

 

 

826

 

 

667

Deferred income taxes, net

 

 

 —

 

 

(3)

Changes in certain assets and liabilities:

 

 

 

 

 

 

Receivables, net

 

 

(25,123)

 

 

(21,436)

Inventories, net

 

 

5,908

 

 

15,819

Prepaid expenses and other current assets

 

 

 7

 

 

(3,266)

Accounts payable

 

 

(3,124)

 

 

(39,237)

Accrued liabilities

 

 

9,787

 

 

13,642

Other, net

 

 

398

 

 

(18)

Net cash provided by operating activities

 

 

25,671

 

 

6,146

 

 

 

 

 

 

 

Cash Flows Provided by (Used in) Investing Activities:

 

 

 

 

 

 

Purchases of property and equipment

 

 

(8,571)

 

 

(6,023)

Acquisition of businesses

 

 

(83,932)

 

 

 —

Proceeds from sale of property and equipment

 

 

126

 

 

219

Other, net

 

 

147

 

 

147

Net cash used in investing activities

 

 

(92,230)

 

 

(5,657)

 

 

 

 

 

 

 

Cash Flows Provided by (Used in) Financing Activities:

 

 

 

 

 

 

Proceeds from issuance of long-term debt

 

 

250,000

 

 

 —

Repayment of long-term debt

 

 

(180,000)

 

 

(5,000)

Payment of debt issuance costs

 

 

(2,150)

 

 

 —

Taxes withheld and paid on employees' equity awards

 

 

(2,147)

 

 

(1,285)

Repurchase of shares of common stock

 

 

(39,286)

 

 

(4,962)

Net cash provided by (used in) financing activities

 

 

26,417

 

 

(11,247)

 

 

 

 

 

 

 

Cash and Cash Equivalents

 

 

 

 

 

 

Decrease for the period

 

 

(40,142)

 

 

(10,758)

Beginning of year

 

 

134,375

 

 

112,848

End of period

 

$

94,233

 

$

102,090

 

 

 

 

 

 

 

Supplemental disclosure of noncash investing activities:

 

 

 

 

 

 

Accruals for property and equipment

 

$

655

 

$

521

 

6


 

TopBuild Corp.

Segment Data (Unaudited)

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 

 

 

 

 

 

Six Months Ended June 30, 

 

 

 

 

 

 

2017

 

2016

 

 

Change

 

2017

 

2016

 

 

Change

Installation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$

320,984

 

$

288,042

 

 

11.4

%

 

$

611,870

 

$

560,920

 

 

9.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating profit, as reported

 

$

35,086

 

$

22,797

 

 

 

 

 

$

26,123

 

$

36,303

 

 

 

 

Operating margin, as reported

 

 

10.9

%

 

7.9

%

 

 

 

 

 

4.3

%

 

6.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Significant legal settlement

 

 

 —

 

 

 —

 

 

 

 

 

 

30,000

 

 

 —

 

 

 

 

Rationalization charges

 

 

171

 

 

66

 

 

 

 

 

 

582

 

 

894

 

 

 

 

Operating profit, as adjusted

 

$

35,257

 

$

22,863

 

 

 

 

 

$

56,705

 

$

37,197

 

 

 

 

Operating margin, as adjusted

 

 

11.0

%

 

7.9

%

 

 

 

 

 

9.3

%

 

6.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distribution

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$

175,062

 

$

164,257

 

 

6.6

%

 

$

345,306

 

$

325,145

 

 

6.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating profit, as reported

 

$

17,022

 

$

13,547

 

 

 

 

 

$

32,506

 

$

27,880

 

 

 

 

Operating margin, as reported

 

 

9.7

%

 

8.2

%

 

 

 

 

 

9.4

%

 

8.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rationalization charges

 

 

17

 

 

 —

 

 

 

 

 

 

17

 

 

83

 

 

 

 

Operating profit, as adjusted

 

$

17,039

 

$

13,547

 

 

 

 

 

$

32,523

 

$

27,963

 

 

 

 

Operating margin, as adjusted

 

 

9.7

%

 

8.2

%

 

 

 

 

 

9.4

%

 

8.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales before eliminations

 

$

496,046

 

$

452,299

 

 

 

 

 

$

957,176

 

$

886,065

 

 

 

 

Intercompany eliminations

 

 

(21,588)

 

 

(20,710)

 

 

 

 

 

 

(41,355)

 

 

(40,452)

 

 

 

 

Net sales after eliminations

 

$

474,458

 

$

431,589

 

 

9.9

%

 

$

915,821

 

$

845,613

 

 

8.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating profit, as reported - segment

 

$

52,108

 

$

36,344

 

 

 

 

 

$

58,629

 

$

64,183

 

 

 

 

General corporate expense, net

 

 

(7,632)

 

 

(6,030)

 

 

 

 

 

 

(14,316)

 

 

(10,750)

 

 

 

 

Intercompany eliminations and other adjustments

 

 

(3,680)

 

 

(3,524)

 

 

 

 

 

 

(6,980)

 

 

(6,876)

 

 

 

 

Operating profit, as reported

 

$

40,796

 

$

26,790

 

 

 

 

 

$

37,333

 

$

46,557

 

 

 

 

Operating margin, as reported

 

 

8.6

%

 

6.2

%

 

 

 

 

 

4.1

%

 

5.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Significant legal settlement

 

 

 —

 

 

 —

 

 

 

 

 

 

30,000

 

 

 —

 

 

 

 

Rationalization charges†

 

 

1,258

 

 

647

 

 

 

 

 

 

2,995

 

 

1,655

 

 

 

 

Acquisition related costs

 

 

145

 

 

 —

 

 

 

 

 

 

437

 

 

 —

 

 

 

 

Operating profit, as adjusted

 

$

42,199

 

$

27,437

 

 

 

 

 

$

70,765

 

$

48,212

 

 

 

 

Operating margin, as adjusted

 

 

8.9

%

 

6.4

%

 

 

 

 

 

7.7

%

 

5.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share-based compensation ‡

 

 

2,403

 

 

2,105

 

 

 

 

 

 

4,487

 

 

3,705

 

 

 

 

Depreciation and amortization

 

 

3,605

 

 

3,013

 

 

 

 

 

 

6,835

 

 

5,908

 

 

 

 

EBITDA, as adjusted

 

$

48,207

 

$

32,555

 

 

 

 

 

$

82,087

 

$

57,825

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales change period over period

 

 

42,869

 

 

 

 

 

 

 

 

 

70,208

 

 

 

 

 

 

 

EBITDA, as adjusted change period over period

 

 

15,652

 

 

 

 

 

 

 

 

 

24,262

 

 

 

 

 

 

 

EBITDA, as adjusted as percentage of sales change

 

 

36.5

%

 

 

 

 

 

 

 

 

34.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

† Rationalization charges include corporate level adjustments as well as segment operating adjustments.

‡ Amounts for the three and six month periods ending June 30, 2017, exclude $0.6 million of share-based compensation included in the line item, rationalization charges.

 

7


 

TopBuild Corp.

Non-GAAP Reconciliations (Unaudited)

(in thousands, except common share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 

 

Six Months Ended  June 30, 

 

 

 

2017

 

2016

 

2017

 

2016

 

Gross Profit and Operating Profit Reconciliations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

474,458

 

$

431,589

 

$

915,821

 

$

845,613

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit, as reported

 

$

116,609

 

$

97,688

 

$

218,237

 

$

187,143

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit, as adjusted

 

$

116,609

 

$

97,688

 

$

218,237

 

$

187,143

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin, as reported

 

 

24.6

%

 

22.6

%

 

23.8

%

 

22.1

%

Gross margin, as adjusted

 

 

24.6

%

 

22.6

%

 

23.8

%

 

22.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating profit, as reported

 

$

40,796

 

$

26,790

 

$

37,333

 

$

46,557

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Significant legal settlement

 

 

 —

 

 

 —

 

 

30,000

 

 

 —

 

Rationalization charges

 

 

1,258

 

 

647

 

 

2,995

 

 

1,655

 

Acquisition related costs

 

 

145

 

 

 —

 

 

437

 

 

 —

 

Operating profit, as adjusted

 

$

42,199

 

$

27,437

 

$

70,765

 

$

48,212

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating margin, as reported

 

 

8.6

%

 

6.2

%

 

4.1

%

 

5.5

%

Operating margin, as adjusted

 

 

8.9

%

 

6.4

%

 

7.7

%

 

5.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Per Common Share Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations before income taxes, as reported

 

$

37,897

 

$

25,480

 

$

33,171

 

$

43,649

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Significant legal settlement

 

 

 —

 

 

 —

 

 

30,000

 

 

 —

 

Rationalization charges

 

 

1,258

 

 

647

 

 

2,995

 

 

1,655

 

Acquisition related costs

 

 

145

 

 

 —

 

 

437

 

 

 —

 

Loss on extinguishment of debt

 

 

1,086

 

 

 —

 

 

1,086

 

 

 —

 

Income from continuing operations before income taxes, as adjusted

 

 

40,386

 

 

26,127

 

 

67,689

 

 

45,304

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax at 38% rate

 

 

(15,347)

 

 

(9,928)

 

 

(25,722)

 

 

(17,216)

 

Income from continuing operations, as adjusted

 

$

25,039

 

$

16,199

 

$

41,967

 

$

28,088

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income per common share, as adjusted

 

$

0.67

 

$

0.43

 

$

1.12

 

$

0.74

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average diluted common shares outstanding

 

 

37,191,299

 

 

37,976,703

 

 

37,404,193

 

 

37,938,108

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8


 

TopBuild Corp.

 Same Branch Net Sales and Adjusted EBITDA (Unaudited)

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 

 

 

Six Months Ended June 30, 

 

 

 

2017

 

2016

 

 

2017

 

2016

 

Net sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Same branch

 

$

453,648

 

$

431,589

 

 

$

887,425

 

$

845,613

 

Acquired

 

 

20,810

 

 

 —

 

 

 

28,396

 

 

 —

 

Total

 

$

474,458

 

$

431,589

 

 

$

915,821

 

$

845,613

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA, as adjusted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Same branch

 

 

45,599

 

 

32,555

 

 

 

79,050

 

 

57,825

 

Acquired

 

 

2,608

 

 

 —

 

 

 

3,037

 

 

 —

 

Total

 

$

48,207

 

$

32,555

 

 

$

82,087

 

$

57,825

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Same branch EBITDA, as adjusted as percentage of sales change

 

 

59.1

%

 

33.3

%

 

 

50.8

%

 

28.8

%

Acquired EBITDA, as adjusted as percentage of sales change

 

 

12.5

%

 

 —

%

 

 

10.7

%

 

 —

%

 

9


 

TopBuild Corp.

 Reconciliation of EBITDA to Net Income (Unaudited)

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 

 

Six Months Ended June 30, 

 

 

2017

 

2016

 

2017

 

2016

Net income, as reported

 

$

23,460

 

$

15,615

 

$

21,749

 

$

26,731

Adjustments to arrive at EBITDA, as adjusted:

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense and other, net

 

 

1,813

 

 

1,310

 

 

3,076

 

 

2,908

Income tax expense from continuing operations

 

 

14,437

 

 

9,865

 

 

11,422

 

 

16,918

Depreciation and amortization

 

 

3,605

 

 

3,013

 

 

6,835

 

 

5,908

Share-based compensation †

 

 

2,403

 

 

2,105

 

 

4,487

 

 

3,705

Significant legal settlement

 

 

 —

 

 

 —

 

 

30,000

 

 

 —

Rationalization charges

 

 

1,258

 

 

647

 

 

2,995

 

 

1,655

Loss on extinguishment of debt

 

 

1,086

 

 

 —

 

 

1,086

 

 

 —

Acquisition related costs

 

 

145

 

 

 —

 

 

437

 

 

 —

EBITDA, as adjusted

 

$

48,207

 

$

32,555

 

$

82,087

 

$

57,825

 

 

 

 

 

 

 

 

 

 

 

 

 

† Amounts for the three and six month periods ending June 30, 2017, exclude $0.6 million of share-based compensation included in the line item, rationalization charges.

 

10