Exhibit 99.1

Graphic

NYSE: BLD

A leading installer and distributor of insulation and building material products

to the U.S. construction industry

TopBuild Reports Second Quarter 2021 Results

29.1% increase in net sales
150 bps gross margin expansion, 140 bps on an adjusted basis
15.4% operating margin, 15.6% on an adjusted basis, up 270 bps
$2.72 net income per diluted share, $2.76 on an adjusted basis
18.0% adjusted EBITDA margin, 18.4% on a same branch basis


Announces New $200 Million Share Repurchase Program


Second Quarter Financial Highlights

(unless otherwise indicated, comparisons are to the quarter ended June 30, 2020)

   

Gross margin increased 110 basis points to 27.6%.  On an adjusted basis, gross margin increased 130 basis points to 27.8%

   Operating profit was $80.5 million, compared to operating profit of $76.0 million.  On an adjusted basis, operating profit was $83.5 million, compared to $76.4 million, a 9.3% improvement.

   Net income was $55.5 million, or $1.67 per diluted share, compared to $52.1 million, or $1.51 per diluted share. Adjusted income was $55.7 million, or $1.68 per diluted share, compared to $49.5 million, or $1.43 per diluted share.

   

Net sales increased 29.1% to $834.3. million, 18.3% on a same branch basis, primarily driven by increases in both price and volume as well as M&A.

   Gross margin increased 150 basis points to 29.1%.  On an adjusted basis, gross margin increased 140 basis points to 29.2%.

   Operating profit was $128.3 million, compared to operating profit of $80.5 million, a 59.5% improvement.  On an adjusted basis, operating profit was $129.9 million, compared to $83.5 million, a 55.5% improvement.

   Operating margin was 15.4%, up 290 basis points.  Adjusted operating margin improved 270 basis points to 15.6%.

   Net income was $90.4 million, or $2.72 per diluted share, compared to $55.5 million, or $1.67 per diluted share. Adjusted income was $91.6 million, or $2.76 per diluted share, compared to $55.7 million, or $1.68 per diluted share.

“We are very pleased with our second quarter results. Top line growth was strong and operating margins expanded at both business segments. Our solid performance demonstrates our team’s ability to successfully manage pricing in conjunction with multiple material cost increases as well as productivity in a labor and material constrained market.

“Looking ahead, we expect the residential housing market to remain solid and the commercial market to continue to strengthen. Our focus will remain on driving profitable growth and creating long-term value for our stakeholders.”

ROBERT BUCK, PRESIDENT & CEO, TOPBUILD

NYSE:BLD

August 3, 2021

topbuild.com


   

Adjusted EBITDA was $149.8 million, compared to $107.8 million, a 39.1% increase, and adjusted EBITDA margin improved 130 basis points to 18.0%.  

   

At June 30, 2021, the Company had cash and cash equivalents of $261.7 million and availability under its revolving credit facility of $378.8 million for total liquidity of $640.5 million.

Six Month Financial Highlights

(unless otherwise indicated, comparisons are to six months ended June 30, 2020)

   

Net sales increased 21.4% to $1,577.1 million. On a same branch basis, revenue increased 13.9% to $1,479.4 million.

   

Gross margin expanded 110 basis points to 28.0%. On an adjusted basis, gross margin expanded 90 basis points to 28.0%.

   

Operating profit was $224.2 million, compared to operating profit of $150.4 million, a 49.0% improvement. On an adjusted basis, operating profit was $227.1 million, compared to $153.8 million, a 47.7% improvement.

   

Operating margin was 14.2%, and 14.4% on an adjusted basis, a 260-basis point improvement.

   

Net income was $150.2 million, or $4.53 per diluted share, compared to $106.3 million, or $3.18 per diluted share. Adjusted income was $158.7 million, or $4.78 per diluted share, compared to $101.6 million, or $3.04 per diluted share.

   

Adjusted EBITDA was $265.7 million, compared to $196.1 million, a 35.5% increase. Adjusted EBITDA margin was 16.8%, a 170-basis point improvement.

Operating Segment Highlights ($ in 000s)

(comparisons are to the period ended June 30, 2020)

Logo

Description automatically generated

3 Months
Ended
6/30/21

6 Months
Ended
6/30/21

Graphic

3 Months
Ended
6/30/21

6 Months
Ended
6/30/21

Sales

$605,625

$1,138,378

Sales

$273,364

$524,965

Change

Change

Volume

10.4%

7.7%

Volume

14.3%

14.0%

Price

5.0%

3.0%

Price

10.3%

7.0%

M&A

14.4%

10.1%

M&A

1.8%

0.9%

Total Change

29.8%

20.8%

Total Change

26.4%

21.9%

Operating Margin

16.4%

15.2%

Operating Margin

15.7%

14.9%

Change

150 bps

140 bps

Change

450 bps

360 bps

Adj. Operating Margin

16.6%

15.3%

Adj. Operating Margin

15.7%

14.9%

Change

140 bps

130 bps

Change

410 bps

330 bps

NYSE:BLD

August 3, 2021

topbuild.com


Capital Allocation

Acquisitions

   

Gross margin increased 110 basis points to 27.6%.  On an adjusted basis, gross margin increased 130 basis points to 27.8%

   Operating profit was $80.5 million, compared to operating profit of $76.0 million.  On an adjusted basis, operating profit was $83.5 million, compared to $76.4 million, a 9.3% improvement.

   Net income was $55.5 million, or $1.67 per diluted share, compared to $52.1 million, or $1.51 per diluted share. Adjusted income was $55.7 million, or $1.68 per diluted share, compared to $49.5 million, or $1.43 per diluted share.

Three companies were acquired in the second quarter, American Building Systems, Creative Conservation and RJ Insulation.  Combined, they are expected to generate approximately $155 million of revenue on a pro forma full year basis.  Year-to-date, the Company has acquired five companies which are expected to generate approximately $221 million of revenue on a pro forma, full year basis.

Share Repurchase Program

In the second quarter, the Company repurchased 73,747 shares at an average price of $192.30 per share.  Year-to-date, the Company has repurchased 123,031 shares at an average price of $195.38 per share.

The Company also announced that its Board of Directors has approved an additional share repurchase program whereby the Company may purchase up to $200 million of its common stock.  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.  The program may be suspended or discontinued at any time.

“M&A remains our number one capital allocation priority. Our prospects center around our core of insulation and related adjacent products that will further strengthen our industry leadership position. Our pipeline is robust, and we expect to stay very busy on this front through the remainder of the year.

“Our strong balance sheet and cash flows also provide us with the flexibility to continue our history of share repurchases, and we are pleased to announce another $200 million share repurchase program.”

ROBERT BUCK, PRESIDENT & CEO, TOPBUILD

2021 Outlook

Sales and Adjusted EBITDA Guidance (1)

($ in millions)

2021

Low

High

Sales

$ 3,290

$ 3,370

Adjusted EBITDA*

$ 565

$ 590

*See table for adjusted EBITDA reconciliation.

Assumptions(1)

($ in millions)

2021

Low

High

Housing Starts

1,475

1,525

Estimated net income

$     339.5

$     363.6

Interest Expense and other, net

$       24.7

$       22.2

Income tax expense

$     119.3

$     127.8

Depreciation and Amortization

$       70.6

$       67.5

Share based compensation

$       10.9

$         8.9

NYSE:BLD

August 3, 2021

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(1) This guidance and long-term targets reflect management’s current view of present and future market conditions and are based on assumptions such as housing starts, general and administrative expenses, weighted average diluted shares outstanding and interest rates.  These targets do not include any effects related to potential acquisitions or divestitures that may occur after the date of this press release.  A reconciliation of non-GAAP targets to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty regarding, and the potential variability of, the costs and expenses that may be incurred in the future and therefore, cannot be reasonably predicted. The effect of these excluded items may be significant.  Factors that could cause actual long-term results to differ materially from TopBuild’s current expectations are discussed below and are also detailed in the Company’s 2020 Annual Report on Form 10-K and subsequent SEC reports.

Conference Call

A conference call to discuss second quarter 2021 financial results is scheduled for today, Tuesday, August 3, 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.

About TopBuild

TopBuild Corp., a Fortune 1000 Company headquartered in Daytona Beach, Florida, is a leading installer and distributor of insulation and building material products to the U.S. construction industry. We provide insulation and building material services nationwide through TruTeam®, which has approximately 235 branches, and through Service Partners® which distributes insulation and building material products from approximately 75 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

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 at www.topbuild.com.

Safe Harbor Statement

Statements contained herein reflect our views about future periods, including our future plans and performance, and 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,” “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.  We caution you against unduly relying on any of these forward-looking statements.  Our future performance may be affected by the duration and impact of the COVID-19 pandemic on the United States economy, specifically with respect to residential and commercial construction; our ability to continue operations in markets affected by the COVID-19 pandemic and our ability to collect receivables from our customers; 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; and our ability to maintain our competitive position.  We discuss the material risks we face

NYSE:BLD

August 3, 2021

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under the caption entitled “Risk Factors” in our Annual Report for the year ended December 31, 2020, as filed with the SEC on February 23, 2021, as well as under the caption entitled “Risk Factors” in subsequent reports that we file with the SEC.  Our forward-looking statements in this filing speak only as of the date of this filing.  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.  The Company believes that the non-GAAP performance measures and ratios that are contained herein, which management uses to manage our business, provide users of this financial information with additional meaningful comparisons between current results and results in our prior periods. Non-GAAP performance measures and ratios should be viewed in addition, and not as an alternative, to the Company's reported results under accounting principles generally accepted in the United States. Additional information about the Company is contained in the Company's filings with the SEC and is available on TopBuild's website at www.topbuild.com.

Investor Relations and Media Contact

Tabitha Zane

tabitha.zane@topbuild.com

386-763-8801

(tables follow)

NYSE:BLD

August 3, 2021

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TopBuild Corp.

Condensed Consolidated Statements of Operations (Unaudited)

(in thousands, except share and per common share amounts)

Three Months Ended June 30, 

Six Months Ended June 30, 

2021

2020

2021

2020

Net sales

$

834,255

    

$

646,099

    

$

1,577,053

    

$

1,299,327

Cost of sales

591,075

468,045

1,136,114

949,316

Gross profit

243,180

178,054

440,939

350,011

Selling, general, and administrative expense

114,894

97,600

216,767

199,568

Operating profit

128,286

80,454

224,172

150,443

Other income (expense), net:

Interest expense

(6,105)

(8,277)

(12,707)

(17,018)

Loss on extinguishment of debt

(13,862)

(233)

Other, net

66

89

144

561

Other expense, net

(6,039)

(8,188)

(26,425)

(16,690)

Income before income taxes

122,247

72,266

197,747

133,753

Income tax expense

(31,867)

(16,770)

(47,525)

(27,485)

Net income

$

90,380

$

55,496

$

150,222

$

106,268

Net income per common share:

Basic

$

2.75

$

1.69

$

4.57

$

3.22

Diluted

$

2.72

$

1.67

$

4.53

$

3.18

 

Weighted average shares outstanding:

Basic

32,865,303

32,867,842

32,846,016

33,018,148

Diluted

33,177,435

33,202,423

33,190,107

33,401,135

NYSE:BLD

August 3, 2021

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TopBuild Corp.

Condensed Consolidated Balance Sheets and Other Financial Data (Unaudited)

(dollars in thousands)

As of

June 30, 2021

December 31, 2020

ASSETS

Current assets:

Cash and cash equivalents

$

261,739

$

330,007

Receivables, net of an allowance for credit losses of $8,337 at June 30, 2021, and $6,926 at December 31, 2020

491,625

 

427,340

Inventories, net

178,576

 

161,369

Prepaid expenses and other current assets

20,523

 

17,689

Total current assets

952,463

 

936,405

Right of use assets

100,558

 

83,490

Property and equipment, net

199,982

 

180,053

Goodwill

1,494,200

 

1,410,685

Other intangible assets, net

237,573

 

190,605

Deferred tax assets, net

2,729

 

2,728

Other assets

11,213

 

11,317

Total assets

$

2,998,718

$

2,815,283

LIABILITIES

Current liabilities:

Accounts payable

$

356,570

$

331,710

Current portion of long-term debt

23,476

23,326

Accrued liabilities

126,517

 

107,949

Short-term lease liabilities

36,673

 

33,492

Total current liabilities

543,236

 

496,477

Long-term debt

680,999

 

683,396

Deferred tax liabilities, net

168,091

 

168,568

Long-term portion of insurance reserves

49,456

50,657

Long-term lease liabilities

68,457

53,749

Other liabilities

13,663

 

13,642

Total liabilities

1,523,902

 

1,466,489

EQUITY

1,474,816

 

1,348,794

Total liabilities and equity

$

2,998,718

$

2,815,283

As of June 30, 

    

2021

2020

Other Financial Data

Receivable days

45

49

Inventory days

30

28

Accounts payable days

74

83

Receivables, net plus inventories, net less accounts payable

$

313,631

$

277,080

Receivables, net plus inventories, net less accounts payable as a percent of sales (TTM) †

9.9

%

10.5

%

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

NYSE:BLD

August 3, 2021

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

Six Months Ended June 30, 

2021

2020

Cash Flows Provided by (Used in) Operating Activities:

    

    

    

Net income

$

150,222

$

106,268

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

Depreciation and amortization

33,221

33,311

Share-based compensation

5,377

9,038

Loss on extinguishment of debt

13,862

233

Loss on sale or abandonment of property and equipment

833

320

Amortization of debt issuance costs

858

716

Provision for bad debt expense

4,037

3,756

Loss from inventory obsolescence

1,129

1,313

Deferred income taxes, net

(206)

(38)

Change in certain assets and liabilities

Receivables, net

(36,277)

1,894

Inventories, net

(8,055)

538

Prepaid expenses and other current assets

(2,273)

9,151

Accounts payable

21,782

(16,390)

Accrued liabilities

17,693

28,188

Payment of contingent consideration

(413)

Other, net

277

Net cash provided by operating activities

202,203

178,162

Cash Flows Provided by (Used in) Investing Activities:

Purchases of property and equipment

(28,560)

(20,937)

Acquisition of businesses

(195,411)

(20,526)

Proceeds from sale of property and equipment

193

763

Net cash used in investing activities

(223,778)

(40,700)

Cash Flows Provided by (Used in) Financing Activities:

Proceeds from issuance of long-term debt

411,250

300,000

Repayment of long-term debt

(421,716)

(313,407)

Payment of debt issuance costs

(6,500)

(2,280)

Taxes withheld and paid on employees' equity awards

(11,491)

(13,165)

Exercise of stock options

5,952

Repurchase of shares of common stock

(24,038)

(34,152)

Payment of contingent consideration

(150)

(428)

Net cash used in financing activities

(46,693)

(63,432)

Cash and Cash Equivalents

(Decrease) increase for the period

(68,268)

74,030

Beginning of period

 

330,007

 

184,807

End of period

$

261,739

$

258,837

Supplemental disclosure of noncash activities:

Leased assets obtained in exchange for new operating lease liabilities

$

39,135

$

19,257

Accruals for property and equipment

460

323

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August 3, 2021

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TopBuild Corp.

Segment Data (Unaudited)

(dollars in thousands)

TruTeam

Three Months Ended June 30, 

Six Months Ended June 30, 

2021

2020

Change

2021

2020

Change

TruTeam

Sales

$

605,625

$

466,569

29.8

%

$

1,138,378

$

942,442

20.8

%

Operating profit, as reported

$

99,066

$

69,643

$

172,702

$

129,994

Operating margin, as reported

16.4

%

14.9

%

15.2

%

13.8

%

Rationalization charges

857

857

Acquisition related costs

1,112

1,112

4

COVID-19 pay

116

638

605

638

Operating profit, as adjusted

$

100,294

$

71,138

$

174,419

$

131,493

Operating margin, as adjusted

16.6

%

15.2

%

15.3

%

14.0

%

Service Partners

Sales

$

273,364

$

216,336

26.4

%

$

524,965

$

430,558

21.9

%

Operating profit, as reported

$

42,856

$

24,155

$

78,241

$

48,825

Operating margin, as reported

15.7

%

11.2

%

14.9

%

11.3

%

Rationalization charges

944

944

COVID-19 pay

20

54

54

54

Operating profit, as adjusted

$

42,876

$

25,153

$

78,295

$

49,823

Operating margin, as adjusted

15.7

%

11.6

%

14.9

%

11.6

%

Total

Sales before eliminations

$

878,989

$

682,905

$

1,663,343

$

1,373,000

Intercompany eliminations

(44,734)

(36,806)

(86,290)

(73,673)

Net sales after eliminations

$

834,255

$

646,099

29.1

%

$

1,577,053

$

1,299,327

21.4

%

Operating profit, as reported - segments

$

141,922

$

93,798

$

250,943

$

178,819

General corporate expense, net

(6,704)

(7,383)

(13,311)

(16,581)

Intercompany eliminations

(6,932)

(5,961)

(13,460)

(11,795)

Operating profit, as reported

$

128,286

$

80,454

$

224,172

$

150,443

Operating margin, as reported

15.4

%

12.5

%

14.2

%

11.6

%

Rationalization charges

2,376

16

2,376

Acquisition related costs †

1,457

(40)

2,210

196

Refinancing costs

20

57

COVID-19 pay

136

692

659

692

Operating profit, as adjusted

$

129,879

$

83,502

$

227,057

$

153,764

Operating margin, as adjusted

15.6

%

12.9

%

14.4

%

11.8

%

Share-based compensation

2,266

5,130

5,377

9,038

Depreciation and amortization

17,703

19,121

33,221

33,311

EBITDA, as adjusted

$

149,848

$

107,753

$

265,655

$

196,113

EBITDA margin, as adjusted

18.0

%

16.7

%

16.8

%

15.1

%

Sales change period over period

188,156

277,726

EBITDA, as adjusted, change period over period

42,095

69,542

Incremental EBITDA, as adjusted, as a percentage of change in sales

22.4

%

25.0

%

† Acquisition related costs include corporate level adjustments as well as segment operating adjustments.

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August 3, 2021

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TopBuild Corp.

Non-GAAP Reconciliations (Unaudited)

(in thousands, except share and per common share amounts)

Three Months Ended June 30, 

Six Months Ended June 30, 

2021

2020

2021

2020

Gross Profit and Operating Profit Reconciliations

Net sales

$

834,255

$

646,099

$

1,577,053

$

1,299,327

Gross profit, as reported

$

243,180

$

178,054

$

440,939

$

350,011

Rationalization charges

1,079

1,079

COVID-19 pay

122

482

592

482

Gross profit, as adjusted

$

243,302

$

179,615

$

441,531

$

351,572

Gross margin, as reported

29.1

%

27.6

%

28.0

%

26.9

%

Gross margin, as adjusted

29.2

%

27.8

%

28.0

%

27.1

%

Operating profit, as reported

$

128,286

$

80,454

$

224,172

$

150,443

Rationalization charges

2,376

16

2,376

Acquisition related costs

1,457

(40)

2,210

196

Refinancing costs

20

57

COVID-19 pay

136

692

659

692

Operating profit, as adjusted

$

129,879

$

83,502

$

227,057

$

153,764

Operating margin, as reported

15.4

%

12.5

%

14.2

%

11.6

%

Operating margin, as adjusted

15.6

%

12.9

%

14.4

%

11.8

%

Income Per Common Share Reconciliation

Income before income taxes, as reported

$

122,247

$

72,266

$

197,747

$

133,753

Rationalization charges

2,376

16

2,376

Acquisition related costs

1,457

(40)

2,210

196

Refinancing costs and loss on extinguishment of debt

20

13,862

290

COVID-19 pay

136

692

659

692

Income before income taxes, as adjusted

123,840

75,314

214,494

137,307

Tax rate at 26.0%

(32,198)

(19,582)

(55,769)

(35,700)

Income, as adjusted

$

91,642

$

55,732

$

158,725

$

101,607

Income per common share, as adjusted

$

2.76

$

1.68

$

4.78

$

3.04

Weighted average diluted common shares outstanding

33,177,435

33,202,423

33,190,107

33,401,135

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August 3, 2021

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TopBuild Corp.

Same Branch and Acquisition Net Sales and Adjusted EBITDA (Unaudited)

(dollars in thousands)

Three Months Ended June 30, 

Six Months Ended June 30, 

2021

2020

2021

2020

Net sales

Same branch:

TruTeam

$

538,360

$

466,569

$

1,043,657

$

942,442

Service Partners

269,473

216,336

521,074

430,558

Eliminations

(43,750)

(36,806)

(85,305)

(73,673)

Total same branch

764,083

646,099

1,479,426

1,299,327

Acquisitions (a):

TruTeam

$

67,265

$

$

94,721

$

Service Partners

3,891

3,891

Eliminations

(984)

(985)

Total acquisitions

70,172

97,627

Total

$

834,255

$

646,099

$

1,577,053

$

1,299,327

EBITDA, as adjusted

Same branch

$

140,425

$

107,753

$

253,554

$

196,113

Acquisitions (a)

9,423

12,101

Total

$

149,848

$

107,753

$

265,655

$

196,113

EBITDA, as adjusted, as a percentage of sales

Same branch (b)

18.4

%

17.1

%

Acquisitions (c)

13.4

%

12.4

%

Total (d)

18.0

%

16.7

%

16.8

%

15.1

%

As Adjusted Incremental EBITDA, as a percentage of change in sales

Same branch (e)

27.7

%

31.9

%

Acquisitions (c)

13.4

%

12.4

%

Total (f)

22.4

%

25.0

%


(a) Represents current year impact of acquisitions in their first twelve months

(b) Same branch EBITDA, as adjusted, as a percentage of same branch sales

(c) Acquired EBITDA, 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

NYSE:BLD

August 3, 2021

topbuild.com


TopBuild Corp.

Same Branch and Acquisition Net Sales by Market (Unaudited)

(in thousands)