• TopBuild Reports First Quarter 2022 Results

    ソース: Nasdaq GlobeNewswire / 05 5 2022 06:45:00   America/New_York

    • Sales increased 57.4% to $1.2 billion, same branch revenue increased 18.7%
    • Gross margin expanded 170 basis points to 28.3%, same branch gross margin expanded 290 basis points to 29.6%
    • Same branch adjusted EBITDA margin expanded 310 basis points to 18.7%

    Raises Revenue and Adjusted EBITDA Outlook

    Announces $100 Million Accelerated Share Repurchase

    DAYTONA BEACH, Fla., May 05, 2022 (GLOBE NEWSWIRE) -- TopBuild Corp. (NYSE:BLD), a leading installer and specialty distributor of insulation and building material products to the construction industry in the United States and Canada today reported results for the first quarter ended March 31, 2022.

    Robert Buck, President and Chief Executive Officer, stated, “TopBuild reported another outstanding quarter, once again demonstrating the strength of our operating model. Strong demand, coupled with our ongoing focus on managing price, achieving operational efficiency improvements, and leveraging fixed costs, drove solid conversion of top line growth to the bottom line.

    “We are particularly pleased with our same branch adjusted gross margin and adjusted EBITDA margin, which expanded 290 basis points and 310 basis points, respectively, from the prior year.

    “In addition, the integration of Distribution International is proceeding very well and we are confident we will achieve the $35 million to $40 million of synergies per the timeline outlined at the close of the transaction in October 2021.”

    First Quarter 2022 Financial Highlights 
    ($ in 000s)

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

    3 Months Ended 3/31/22ReportedChange
    Sales$1,168,91857.4%
    Gross Margin28.3%170 bps
    SG&A as % of revenue14.3%60 bps
    Operating Profit$163,95471.0%
    Operating Margin14.0%110 bps
    Net Income$114,71191.7%
    Net Income per diluted share$3.4792.8%

     

    3 Months Ended 3/31/22AdjustedChange
    Sales$1,168,91857.4%
    Gross Margin28.3%160 bps
    SG&A as % of revenue14.0%40 bps
    Operating Profit$167,50372.4%
    Operating Margin14.3%120 bps
    Net Income$115,60472.3%
    Net Income per diluted share$3.5073.3%
    EBITDA$201,72974.2%
    EBITDA Margin17.3%170 bps

     

    3 Months Ended 3/31/22Same BranchChange
    Sales$881,86518.7%
    Adj. Gross Margin29.6%290 bps
    Adj. Operating Margin16.4%330 bps
    Adj. EBITDA Margin18.7%310 bps
    Incremental EBITDA35.2% 

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

    Installation3 Months Ended 3/31/22 Specialty Distribution3 Months Ended 3/31/22
    Sales$676,693 Sales$543,862
    Change  Change 
    Volume3.0% Volume0.0%
    Price14.0% Price22.9%
    M&A10.0% M&A93.3%
    Total Change27.0% Total Change116.2%
    Operating Margin16.7% Operating Margin12.9%
    Change290 bps Change(120) bps
    Adj. Operating Margin16.7% Adj. Operating Margin13.0%
    Change280 bps Change(110) bps
    Adj. EBITDA Margin19.1% Adj. EBITDA Margin15.6%
    Change270 bps Change60 bps

    Capital Allocation

     TTM Revenue at Month
    Company AcquiredAcquisition ($ millions)Acquired
    Southwest Insulation (I)$1.7January
    Billings Insulation (I)$6.5February
    Green Energy Solutions (I)$2.0March
    Assured Insulating (I)$5.5April
    Total $15.7  

    I = Installation

    We have acquired four residential installation companies year-to-date. We continue to look for opportunities to expand our market presence in all three end-markets we serve and generate strong returns for our shareholders.

    “We are also pleased to initiate an accelerated share repurchase, demonstrating our Board’s confidence in TopBuild’s present and future business,” stated Buck.

    Share Repurchases
    In the first quarter, the Company repurchased 238,154 shares at an average price of $209.95 per share.

    Additionally, under its current $200 million share repurchase authorization, the Company intends to enter into an agreement to repurchase $100 million of its common stock under an accelerated share repurchase (ASR) program. This will be the fourth ASR the Company has undertaken since first quarter 2017. Since January 1, 2016, through March 31, 2022, the Company has repurchased approximately 6.4 million shares of its common stock for a total investment of $472.2 million.

    2022 Outlook

    “Our unique operating model and scale are significant competitive advantages that enable us to outperform in any environment. We are optimistic 2022 will be another strong year for TopBuild,” added Buck.

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

    2022LowHigh
    Sales$4,650$4,800
    Adjusted EBITDA*$810$860

    *See table for adjusted EBITDA reconciliation.

    (1)  This outlook reflects management’s current view of present and future market conditions and are based on assumptions such as housing starts and completions, 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 2021 Annual Report on Form 10-K and subsequent SEC reports.

    Additional Information

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

    Conference Call
    A conference call to discuss first quarter 2022 financial results is scheduled for today, Thursday, May 5, 2022, 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., headquartered in Daytona Beach, Florida, is a leading installer and specialty distributor of insulation and building material products to the construction industry in the United States and Canada. We provide insulation installation services nationwide through our contractor services business which has approximately 235 branches located across the United States. We distribute building and mechanical insulation, insulation accessories and other building product materials for the residential, commercial, and industrial end markets through our Specialty Distribution business. Our specialty distribution network encompasses approximately 175 branches. To learn more about TopBuild please visit our website at www.topbuild.com.

    Use of Non-GAAP Financial Measures
    Adjusted EBITDA, incremental EBITDA margin, adjusted EBITDA margin, the “adjusted” financial measures presented above, and figures presented on a “same branch basis” are not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). The Company believes that these non-GAAP financial measures, which are used in managing the business, may provide users of this financial information with additional meaningful comparisons between current results and results in prior periods. We define same branch sales as sales from branches in operation for at least 12 full calendar months. Such non-GAAP financial measures are reconciled to their closest GAAP financial measures in tables contained in this press release. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company’s reported results under GAAP. Additional information may be found in the Company’s filings with the Securities and Exchange Commission which are available on TopBuild’s website under “SEC Filings” at www.topbuild.com.

    Safe Harbor Statement

    This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act. These forward-looking statements may address, among other things, our expected financial and operational results, the related assumptions underlying our expected results, and our plan to repurchase our common stock under stock repurchase transactions. These forward-looking statements 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 any forward-looking statements as a result of new information, future events, or otherwise, except as required by applicable law.

    Investor Relations and Media Contact

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

    (tables follow)



    TopBuild Corp.      
    Condensed Consolidated Statements of Operations (Unaudited)   
    (in thousands, except share and per common share amounts)   
           
      Three Months Ended March 31, 
      2022  2021 
    Net sales    $1,168,918     $742,798 
    Cost of sales  837,717   545,039 
    Gross profit  331,201   197,759 
           
    Selling, general, and administrative expense  167,247   101,872 
    Operating profit  163,954   95,887 
           
    Other income (expense), net:      
    Interest expense  (11,966)  (6,603)
    Loss on extinguishment of debt     (13,862)
    Other, net  684   77 
    Other expense, net  (11,282)  (20,388)
    Income before income taxes  152,672   75,499 
           
    Income tax expense  (37,961)  (15,657)
    Net income $114,711  $59,842 
           
    Net income per common share:      
    Basic $3.50  $1.82 
    Diluted $3.47  $1.80 
           
    Weighted average shares outstanding:      
    Basic  32,738,525   32,826,515 
    Diluted  33,042,490   33,202,563 
           


    TopBuild Corp.      
    Condensed Consolidated Statements of Comprehensive Income (Unaudited)
    (in thousands)      
           
      Three Months Ended March 31, 
      2022 2021
    Net income $114,711 $59,842
    Other comprehensive income:      
    Foreign currency translation adjustment  3,218  
    Comprehensive income $117,929 $59,842
           


    TopBuild Corp.        
    Condensed Consolidated Balance Sheets and Other Financial Data (Unaudited)     
    (dollars in thousands)        
      As of 
      March 31, 2022  December 31, 2021 
    ASSETS        
    Current assets:        
    Cash and cash equivalents $126,553  $139,779 
    Receivables, net of an allowance for credit losses of $10,487 at March 31, 2022, and $8,798 at December 31, 2021  735,452   668,419 
    Inventories, net  390,061   352,801 
    Prepaid expenses and other current assets  29,102   26,692 
    Total current assets  1,281,168   1,187,691 
             
    Right of use assets  184,762   177,177 
    Property and equipment, net  248,438   244,574 
    Goodwill  1,964,297   1,949,763 
    Other intangible assets, net  669,797   684,209 
    Deferred tax assets, net     1,905 
    Other assets  13,101   13,211 
    Total assets $4,361,563  $4,258,530 
             
    LIABILITIES        
    Current liabilities:        
    Accounts payable $473,918  $461,917 
    Current portion of long-term debt  38,723   38,640 
    Accrued liabilities  207,377   175,891 
    Short-term operating lease liabilities  55,293   54,591 
    Short-term finance lease liabilities  2,610   2,387 
    Total current liabilities  777,921   733,426 
             
    Long-term debt  1,445,473   1,454,483 
    Deferred tax liabilities, net  245,674   248,243 
    Long-term portion of insurance reserves  53,111   51,875 
    Long-term operating lease liabilities  133,297   125,339 
    Long-term finance lease liabilities  7,631   7,770 
    Other liabilities  1,216   960 
    Total liabilities  2,664,323   2,622,096 
             
    EQUITY  1,697,240   1,636,434 
    Total liabilities and equity $4,361,563  $4,258,530 
             
      As of March 31, 
      2022  2021 
    Other Financial Data        
    Receivable days  47   45 
    Inventory days  46   29 
    Accounts payable days  63   76 
    Receivables, net plus inventories, net less accounts payable $651,595  $296,023 
    Receivables, net plus inventories, net less accounts payable as a percent of sales (TTM) †  14.8%  10.2%
             
    † Trailing 12 months sales have been adjusted for the pro forma effect of acquired branches        


    TopBuild Corp.      
    Condensed Consolidated Statement of Cash Flows (Unaudited)      
    (in thousands)      
           
      Three Months Ended March 31, 
      2022  2021 
    Cash Flows Provided by (Used in) Operating Activities:              
    Net income $114,711  $59,842 
    Adjustments to reconcile net income to net cash provided by operating activities:      
    Depreciation and amortization  30,499   15,519 
    Share-based compensation  3,727   3,111 
    Loss on extinguishment of debt     13,862 
    Loss on sale of property and equipment  207   56 
    Amortization of debt issuance costs  706   422 
    Provision for bad debt expense  2,512   1,765 
    Loss from inventory obsolescence  868   653 
    Gain on foreign exchange  (649)   
    Deferred income taxes, net  (81)  (183)
    Change in certain assets and liabilities      
    Receivables, net  (65,031)  (20,831)
    Inventories, net  (38,570)  (2,088)
    Prepaid expenses and other current assets  (2,347)  3,517 
    Accounts payable  12,663   (2,244)
    Accrued liabilities  29,523   16,591 
    Other, net  745   (570)
    Net cash provided by operating activities  89,483   89,422 
           
    Cash Flows Provided by (Used in) Investing Activities:      
    Purchases of property and equipment  (18,413)  (12,284)
    Acquisition of businesses, net of cash acquired  (13,967)  (61,092)
    Proceeds from sale of property and equipment  253   56 
    Net cash used in investing activities  (32,127)  (73,320)
           
    Cash Flows Provided by (Used in) Financing Activities:      
    Proceeds from issuance of long-term debt     411,250 
    Repayment of long-term debt  (9,634)  (415,856)
    Payment of debt issuance costs     (6,500)
    Taxes withheld and paid on employees' equity awards  (11,658)  (11,480)
    Exercise of stock options  808   5,952 
    Repurchase of shares of common stock  (50,000)  (9,856)
    Payment of contingent consideration  (23)   
    Net cash used in financing activities  (70,507)  (26,490)
    Impact of exchange rate changes on cash  (75)   
    Net decrease in cash and cash equivalents  (13,226)  (10,388)
    Cash and cash equivalents- Beginning of period  139,779   330,007 
    Cash and cash equivalents- End of period $126,553  $319,619 
           
    Supplemental disclosure of cash paid for:      
    Leased assets obtained in exchange for new operating lease liabilities $22,449  $20,322 
    Accruals for property and equipment  213   524 
           


    TopBuild Corp.            
    Segment Data (Unaudited)            
    (dollars in thousands)            
                 
      Three Months Ended March 31,      
       2022   2021  Change  
    Installation            
    Sales $676,693  $532,753   27.0%
                 
    Operating profit, as reported $112,679  $73,636     
    Operating margin, as reported  16.7%  13.8%    
                 
    Rationalization charges  473        
    Acquisition related costs  80        
    COVID-19 pay     489     
    Operating profit, as adjusted $113,232  $74,125     
    Operating margin, as adjusted  16.7%  13.9%    
                 
    Share-based compensation  407   341     
    Depreciation and amortization  15,685   12,826     
    EBITDA, as adjusted $129,324  $87,292   48.2%
    EBITDA margin, as adjusted  19.1%  16.4%    
                 
    Specialty Distribution            
    Sales $543,862  $251,601   116.2%
                 
    Operating profit, as reported $70,420  $35,385     
    Operating margin, as reported  12.9%  14.1%    
                 
    Acquisition related costs  241        
    COVID-19 pay     34     
    Operating profit, as adjusted $70,661  $35,419     
    Operating margin, as adjusted  13.0%  14.1%    
                 
    Share-based compensation  353   243     
    Depreciation and amortization  14,030   2,088     
    EBITDA, as adjusted $85,044  $37,750   125.3%
    EBITDA margin, as adjusted  15.6%  15.0%    
                 


    TopBuild Corp.          
    Adjusted EBITDA (Unaudited)          
    (dollars in thousands)          
               
      Three Months Ended March 31,     
       2022 2021  Change  
    Total net sales          
    Sales before eliminations $1,220,555  $784,354     
    Intercompany eliminations  (51,637)  (41,556)    
    Net sales after eliminations $1,168,918  $742,798   57.4%
               
    Operating profit, as reported - segments $183,099  $109,021     
    General corporate expense, net  (10,437)  (6,606)    
    Intercompany eliminations  (8,708)  (6,528)    
    Operating profit, as reported $163,954  $95,887     
    Operating margin, as reported  14.0  12.9    
               
    Rationalization charges  473   16     
    Acquisition related costs   3,076   753     
    COVID-19 pay     523     
    Operating profit, as adjusted $167,503  $97,179     
    Operating margin, as adjusted  14.3  13.1    
               
    Share-based compensation  3,727   3,111     
    Depreciation and amortization  30,499   15,519     
    EBITDA, as adjusted $201,729  $115,809   74.2%
    EBITDA margin, as adjusted  17.3  15.6    
               
    Sales change period over period  426,120        
    EBITDA, as adjusted, change period over period  85,920        
    Incremental EBITDA, as adjusted, as a percentage of change in sales  20.2       
               
    † Acquisition related costs include corporate level adjustments as well as segment operating adjustments.
               


    TopBuild Corp.      
    Non-GAAP Reconciliations (Unaudited)      
    (in thousands, except share and per common share amounts)      
           
      Three Months Ended March 31, 
      2022 2021
    Gross Profit Reconciliation      
           
    Net sales $1,168,918  $742,798 
           
    Gross profit, as reported $331,201  $197,759 
           
    Acquisition related costs  121    
    COVID-19 pay     470 
    Gross profit, as adjusted $331,322  $198,229 
           
    Gross margin, as reported  28.3  26.6
    Gross margin, as adjusted  28.3%  26.7
           
    Selling, General and Administrative Expense Reconciliation      
           
    Selling, general, and administrative expense, as reported $167,247  $101,872 
           
    Rationalization charges  473   16 
    Acquisition related costs  2,955   753 
    COVID-19 pay     53 
    Selling, general, and administrative expense, as adjusted $163,819  $101,050 
           
    Operating Profit Reconciliation      
           
    Operating profit, as reported $163,954  $95,887 
           
    Rationalization charges  473   16 
    Acquisition related costs  3,076   753 
    COVID-19 pay     523 
    Operating profit, as adjusted $167,503  $97,179 
           
    Operating margin, as reported  14.0  12.9
    Operating margin, as adjusted  14.3  13.1
           
    Income Per Common Share Reconciliation      
           
    Income before income taxes, as reported $152,672  $75,499 
           
    Rationalization charges  473   16 
    Acquisition related costs  3,076   753 
    Refinancing costs and loss on extinguishment of debt     13,862 
    COVID-19 pay     523 
    Income before income taxes, as adjusted  156,221   90,653 
           
    Tax rate at 26.0%  (40,617)  (23,570)
    Income, as adjusted $115,604  $67,083 
           
    Income per common share, as adjusted $3.50  $2.02 
           
    Weighted average diluted common shares outstanding  33,042,490   33,202,563 
           


    TopBuild Corp.      
    Same Branch and Acquisition Metrics (Unaudited)      
    (dollars in thousands)      
           
      Three Months Ended March 31, 
      2022 2021
    Net sales      
    Same branch:      
    Installation $623,600  $532,753 
    Specialty Distribution  309,211   251,601 
    Eliminations  (50,946)  (41,556)
    Total same branch  881,865   742,798 
           
    Acquisitions (a):      
    Installation $53,093  $ 
    Specialty Distribution  234,651    
    Eliminations  (691)   
    Total acquisitions  287,053    
    Total $1,168,918  $742,798 
           
    Gross profit, as adjusted      
    Same branch $261,115  $198,229 
    Acquisitions (a)  70,207    
    Total $331,322  $198,229 
           
    Gross margin, as adjusted      
    Same branch (b)  29.6  26.7
    Acquisitions (c)  24.5   
           
    Operating profit, as adjusted      
    Same branch $144,616  $97,179 
    Acquisitions (a)  22,887    
    Total $167,503  $97,179 
           
    Operating margin, as adjusted      
    Same branch (b)  16.4  13.1
    Acquisitions (c)  8.0   
           
    EBITDA, as adjusted      
    Same branch $164,769  $115,809 
    Acquisitions (a)  36,960    
    Total $201,729  $115,809 
           
    EBITDA, as adjusted, as a percentage of sales      
    Same branch (b)  18.7   
    Acquisitions (c)  12.9   
    Total (d)  17.3  15.6
           
    As Adjusted Incremental EBITDA, as a percentage of change in sales      
    Same branch (e)  35.2   
    Acquisitions (c)  12.9   
    Total (f)  20.2   
           
    (a) Represents current year impact of acquisitions in their first twelve months      
    (b) Same branch metric, as adjusted, as a percentage of same branch sales      
    (c) Acquired metric, as adjusted, as a percentage of acquired sales      
    (d) Total EBITDA, as adjusted, as a percentage of total sales      
    (e) Change in same branch EBITDA, as adjusted, as a percentage of change in same branch sales   
    (f) Change in total EBITDA, as adjusted, as a percentage of change in total sales      
           


    TopBuild Corp.      
    Reconciliation of Adjusted EBITDA to Net Income (Unaudited)      
    (in thousands)      
           
      Three Months Ended March 31, 
      2022 2021
    Net income, as reported $114,711 $59,842
    Adjustments to arrive at EBITDA, as adjusted:      
    Interest expense and other, net  11,282  6,526
    Income tax expense  37,961  15,657
    Depreciation and amortization  30,499  15,519
    Share-based compensation  3,727  3,111
    Rationalization charges  473  16
    Acquisition related costs  3,076  753
    Refinancing costs and loss on extinguishment of debt    13,862
    COVID-19 pay    523
    EBITDA, as adjusted $201,729 $115,809
           



    TopBuild Corp.               
    Acquisition Adjusted Net Sales (Unaudited)              
    (in thousands)              
     2021 2022 Trailing Twelve Months Ended
     Q2 Q3 Q4 Q1 March 31, 2022
    Net Sales$834,255 $845,757 $1,063,398 $1,168,918 $3,912,328
    Acquisitions proforma adjustment † 220,993  229,760  47,430  2,035  500,218
    Net sales, acquisition adjusted$1,055,248 $1,075,517 $1,110,828 $1,170,953 $4,412,546
                   
                   
    † Trailing 12 months sales have been adjusted for the pro forma effect of acquired branches           
                   


    TopBuild Corp.     
    2022 Estimated Adjusted EBITDA Range (Unaudited)    
    (in millions)     
          
     Twelve Months Ending December 31, 2022
      Low  High
    Estimated net income$447.6  495.4
    Adjustments to arrive at estimated EBITDA, as adjusted:    
    Interest expense and other, net 56.0  52.0
    Income tax expense 157.3  174.1
    Depreciation and amortization 126.1  121.0
    Share-based compensation 13.0  10.5
    Rationalization charges 2.0  1.0
    Acquisition related costs 8.0  6.0
    Estimated EBITDA, as adjusted$810.0 $860.0
          
     
          

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