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TopBuild Reports Fourth Quarter and Full Year 2021 Results
ソース: Nasdaq GlobeNewswire / 22 2 2022 06:45:01 America/New_York
4Q Highlights
- Sales increase 47.4% to $1.1 billion, same branch revenue increases 12.5%
- Net income increases 10.7% to $78.4 million, and 44.9% on an adjusted basis
- $2.37 net income per diluted share, $3.12 on an adjusted basis
- Adjusted EBITDA margin expands 30 basis points to 17.1%, 19.0% on a same branch basis, up 220 basis points
Provides 2022 Sales, Adjusted EBITDA Guidance and Long-Term Assumptions DAYTONA BEACH, Fla., Feb. 22, 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 fourth quarter ended December 31, 2021.
Robert Buck, President and Chief Executive Officer, stated, “We are pleased with our fourth quarter results. Our same branch adjusted EBITDA margin was a healthy 19.0% with same branch incremental adjusted margin of 36.0%. The integration of DI, while in the early stages, is proceeding ahead of expectations and we are even more confident we will achieve the $35 million to $40 million of synergies forecasted when we first announced this transaction.”
Fourth Quarter Financial Highlights
(unless otherwise indicated, comparisons are to the quarter ended December 31, 2020)3 Months Ended 12/31/21 Reported Change Sales $1,063,398 47.4% Gross Margin 26.6% (80) bps SG&A $164,718 73.5% SG&A as % of revenue 15.5% 230 bps Operating Profit $118,443 14.9% Operating Margin 11.1% (320) bps Net Income $78,360 10.7% Net Income per diluted share $2.37 11.0% 3 Months Ended 12/31/21 Adjusted Change Sales $1,063,398 47.4% Gross Margin 28.1% 60 bps SG&A $148,268 57.0% SG&A as % of revenue 13.9% 80 bps Operating Profit $150,746 45.0% Operating Margin 14.2% (20) bps Net Income $103,308 44.9% Net Income per diluted share $3.12 45.1% EBITDA $182,072 49.9% EBITDA Margin 17.1% 30 bps EBITDA Margin, Same Branch 19.0% 220 bps “2021 was a strong year for TopBuild with solid top line growth and margin expansion within our legacy business,” Buck added. “Our team did an outstanding job managing multiple material cost increases while also balancing strong demand against persistent supply and labor constraints. During the year we also completed 11 acquisitions which are expected to contribute over $1 billion of annual revenue.
“Looking at 2022, we expect demand to remain solid in all three of the end-markets we serve: residential, commercial and industrial. Our focus throughout all areas of our business remains unchanged: driving top line growth, continuing the successful integration of DI, and improving operational efficiencies.”
Full Year 2021 Financial Highlights
(unless otherwise indicated, comparisons are to twelve months ended December 31, 2020)12 Months Ended 12/31/21 Reported Change Sales $3,486,207 28.3% Gross Margin 27.9% 40 bps SG&A $497,970 27.3% SG&A as % of revenue 14.3% (10) bps Operating Profit $476,419 34.2% Operating Margin 13.7% 60 bps Net Income $324,016 31.2% Net Income per diluted share $9.78 31.8% 12 Months Ended 12/31/21 Adjusted Change Sales $3,486,207 28.3% Gross Margin 28.4% 90 bps SG&A $475,592 22.2% SG&A as % of revenue 13.6% 70 bps Operating Profit $515,242 43.4% Operating Margin 14.8% 160 bps Net Income $359,716 48.3% Net Income per diluted share $10.85 49.0% EBITDA $605,948 38.7% EBITDA Margin 17.4% 130 bps EBITDA Margin, Same Branch 18.1% 200 bps Operating Segment Highlights ($ in 000s)
(comparisons are to the period ended December 31, 2020)Installation 3 Months
Ended
12/31/2112 Months
Ended
12/31/21Specialty
Distribution3 Months
Ended
12/31/2112 Months
Ended
12/31/21Sales $627,123 $2,378,401 Sales $485,813 $1,287,176 Change Change Volume 1.2% 4.5% Volume -6.8% 3.3% Price 11.0% 6.5% Price 22.4% 13.7% M&A 11.1% 11.4% M&A 77.6% 22.0% Total Change 23.3% 22.4% Total Change 93.1% 39.0% Operating Margin 16.9% 16.1% Operating Margin 9.0% 13.2% Change 90 bps 90 bps Change (440) bps 70 bps Adj. Operating Margin 17.0% 16.2% Adj. Operating Margin 12.4% 14.4% Change 90 bps 90 bps Change (100) bps 190 bps Adj. EBITDA Margin 19.4% 18.7% Adj. EBITDA Margin 15.0% 16.0% Change 80 bps 80 bps Change 70 bps 230 bps Capital Allocation TTM Revenue at Month 2021 Acquisitions Acquisition ($ millions) Acquired Business Focus LCR Contractors (I) $58.0 January Heavy Commercial/Fireproofing Ozark Foam (I) $7.7 March Residential, primarily spray foam American Building Systems (I&D) $144.0 April Residential (94%) & Distribution (6%) Creative Conservation (I) $7.4 April Residential insulation RJ Insulation (I) $4.0 June Residential, shower doors/mirrors Valley Gutter Supply (D) $10.0 August Specialty distributor and fabricator California Building Products (I) $18.0 October Residential and light commercial Distribution International (D) $747.0 October Specialty distributor and fabricator Tonks Insulation (I) $4.8 November Residential insulation Shepherds Insulation (I) $1.9 November Residential insulation Insulating Products (D) $11.0 December Residential distributor Total $1,013.8 I = Installation
D = Distribution“We remain focused on acquiring quality installation and specialty distribution companies that fit within our core insulation businesses. Our pipeline is robust, and our team is focused on expanding our presence in all three end markets we serve,” stated Buck.
Share repurchases
In 2021, the Company repurchased a total of 183,136 shares of its common stock for approximately $35.6 million.2022 Outlook
Sales and Adjusted EBITDA Guidance (1)
($ in millions)2022 Low High Sales $ 4,500 $ 4,650 Adjusted EBITDA* $ 770 $ 820 *See table for adjusted EBITDA reconciliation.
Assumptions(1)
($ in millions)2022 Low High Estimated net income $ 423.0 $ 470.1 Interest Expense and other, net $ 50.3 $ 46.2 Income tax expense $ 148.6 $ 165.2 Depreciation and Amortization $ 126.4 $ 121.3 Share based compensation $ 13.7 $ 11.2 Acquisition related costs $ 8.0 $ 6.0 Long-Term Assumptions (3-Years) (1) Metric Working Capital (% of LTM Sales) 11.0% to 13.0% CapEx (% of Sales) 1.5% to 2.0% Non-Residential Revenue Growth (Organic) 5.0% to 7.5% Normalized Tax Rate 25.0% to 27.0% Incremental Adjusted EBITDA (Organic) 22.0% to 27.0% Incremental Adjusted EBITDA (Acquisitions Year One) 11.0% to 16.0% Residential Revenue for every 50K houses insulated $107 million (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.
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 fourth quarter 2021 financial results is scheduled for today, Tuesday, February 22, 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. In addition, a copy of management’s formal remarks and a presentation that summarizes management’s formal remarks will be available immediately prior to the conference call on 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 a stock repurchase transaction. 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. Consolidated Statements of Operations (in thousands, except share and per common share amounts) Three Months Ended December 31, Year Ended December 31, 2021 2020 2021 2020 Net sales $ 1,063,398 $ 721,487 $ 3,486,207 $ 2,718,038 Cost of sales 780,237 523,467 2,511,818 1,971,677 Gross profit 283,161 198,020 974,389 746,361 Selling, general, and administrative expense 164,718 94,943 497,970 391,315 Operating profit 118,443 103,077 476,419 355,046 Other income (expense), net: Interest expense (10,933 ) (7,745 ) (29,143 ) (32,456 ) Loss on extinguishment of debt 25 — (13,837 ) (233 ) Other, net (207 ) 85 4 733 Other expense, net (11,115 ) (7,660 ) (42,976 ) (31,956 ) Income before income taxes 107,328 95,417 433,443 323,090 Income tax expense (28,968 ) (24,660 ) (109,427 ) (76,067 ) Net income $ 78,360 $ 70,757 $ 324,016 $ 247,023 Net income per common share: Basic $ 2.39 $ 2.16 $ 9.88 $ 7.50 Diluted $ 2.37 $ 2.13 $ 9.78 $ 7.42 Weighted average shares outstanding: Basic 32,753,719 32,789,911 32,801,906 32,917,971 Diluted 33,117,227 33,189,104 33,146,171 33,299,986 TopBuild Corp. Consolidated Statements of Comprehensive Income (in thousands) Three Months Ended December 31, Year Ended December 31, 2021 2020 2021 2020 Net income $ 78,360 $ 70,757 $ 324,016 $ 247,023 Other comprehensive income (loss): Foreign currency translation adjustment (6,634 ) — (6,634 ) — Comprehensive income $ 71,726 $ 70,757 $ 317,382 $ 247,023 TopBuild Corp. Consolidated Balance Sheets and Other Financial Data (Unaudited) (dollars in thousands) As of December 31, ASSETS 2021 2020 Current assets: Cash and cash equivalents $ 139,779 $ 330,007 Receivables, net of an allowance for credit losses of $8,798 at December 31, 2021, and $6,926 at December 31, 2020 668,419 427,340 Inventories, net 352,801 161,369 Prepaid expenses and other current assets 26,692 17,689 Total current assets 1,187,691 936,405 Right of use assets 177,177 83,490 Property and equipment, net 244,574 180,053 Goodwill 1,949,763 1,410,685 Other intangible assets, net 684,209 190,605 Deferred tax assets, net 1,905 2,728 Other assets 13,211 11,317 Total assets $ 4,258,530 $ 2,815,283 LIABILITIES Current liabilities: Accounts payable $ 461,917 $ 331,710 Current portion of long-term debt 38,640 23,326 Accrued liabilities 175,891 107,949 Short-term operating lease liabilities 54,591 33,492 Short-term finance lease liabilities 2,387 — Total current liabilities 733,426 496,477 Long-term debt 1,454,483 683,396 Deferred tax liabilities, net 248,243 168,568 Long-term portion of insurance reserves 51,875 50,657 Long-term operating lease liabilities 125,339 53,749 Long-term finance lease liabilities 7,770 — Other liabilities 960 13,642 Total liabilities 2,622,096 1,466,489 EQUITY 1,636,434 1,348,794 Total liabilities and equity $ 4,258,530 $ 2,815,283 As of December 31, 2021 2020 Other Financial Data Receivable days 48 48 Inventory days 43 30 Accounts payable days 65 76 Receivables, net plus inventories, net less accounts payable $ 559,303 $ 256,999 Receivables, net plus inventories, net less accounts payable as a percent of sales (TTM) † 13.3 % 9.3 % † Trailing 12 months sales have been adjusted for the pro forma effect of acquired branches TopBuild Corp. Consolidated Statement of Cash Flows (in thousands) Year Ended December 31, 2021 2020 Cash Flows Provided by (Used in) Operating Activities: Net income $ 324,016 $ 247,023 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 79,390 62,410 Share-based compensation 11,316 14,752 Loss on extinguishment of debt 13,837 233 Loss (gain) on sale or abandonment of property and equipment 1,356 (88 ) Amortization of debt issuance costs 2,036 1,491 Provision for bad debt expense 7,304 6,270 Loss from inventory obsolescence 2,637 2,512 Loss on foreign exchange 255 — Deferred income taxes, net (2,818 ) (4,070 ) Change in certain assets and liabilities Receivables, net (69,042 ) 2,612 Inventories, net (46,518 ) (11,843 ) Prepaid expenses and other current assets 558 (460 ) Accounts payable 54,961 16,844 Accrued liabilities 24,816 20,545 Payment of contingent consideration (22 ) (413 ) Other, net (1,057 ) 66 Net cash provided by operating activities 403,025 357,884 Cash Flows Provided by (Used in) Investing Activities: Purchases of property and equipment (55,546 ) (40,938 ) Acquisition of businesses, net of cash acquired (1,267,114 ) (83,408 ) Proceeds from sale of property and equipment 415 2,463 Net cash used in investing activities (1,322,245 ) (121,883 ) Cash Flows Provided by (Used in) Financing Activities: Proceeds from issuance of long-term debt 1,218,750 300,000 Repayment of long-term debt (433,070 ) (324,948 ) Payment of debt issuance costs (14,965 ) (2,280 ) Taxes withheld and paid on employees' equity awards (8,805 ) (14,932 ) Exercise of stock options 3,303 1,438 Repurchase of shares of common stock (35,556 ) (49,151 ) Payment of contingent consideration (650 ) (928 ) Net cash provided by (used in) financing activities 729,007 (90,801 ) Impact of foreign currency on cash (15 ) — Net (decrease) increase in cash and cash equivalents (190,228 ) 145,200 Cash and cash equivalents- Beginning of period 330,007 184,807 Cash and cash equivalents- End of period $ 139,779 $ 330,007 Supplemental disclosure of cash paid for: Interest $ 22,144 $ 30,896 Income taxes 109,179 77,689 Supplemental disclosure of noncash activities: Leased assets obtained in exchange for new operating lease liabilities $ 131,909 $ 38,646 Leased assets obtained in exchange for new finance lease liabilities 10,469 — Accruals for property and equipment 1,060 645 TopBuild Corp. Segment Data (Unaudited) (dollars in thousands) Three Months Ended December 31, Year Ended December 31, 2021 2020 Change 2021 2020 Change Installation Sales $ 627,123 $ 508,812 23.3 % $ 2,378,401 $ 1,943,461 22.4 % Operating profit, as reported $ 105,975 $ 81,657 $ 383,722 $ 294,793 Operating margin, as reported 16.9 % 16.0 % 16.1 % 15.2 % Rationalization charges — — — 866 Acquisition related costs 362 — 1,642 4 COVID-19 pay — 363 605 1,278 Operating profit, as adjusted $ 106,337 $ 82,020 $ 385,969 $ 296,941 Operating margin, as adjusted 17.0 % 16.1 % 16.2 % 15.3 % Share-based compensation 270 298 1,157 1,555 Depreciation and amortization 15,227 12,146 57,815 50,265 EBITDA, as adjusted $ 121,834 $ 94,464 29.0 % $ 444,941 $ 348,761 27.6 % EBITDA margin, as adjusted 19.4 % 18.6 % 18.7 % 17.9 % Specialty Distribution Sales $ 485,813 $ 251,535 93.1 % $ 1,287,176 $ 926,207 39.0 % Operating profit, as reported $ 43,964 $ 33,731 $ 169,368 $ 115,343 Operating margin, as reported 9.0 % 13.4 % 13.2 % 12.5 % Rationalization charges — — — 783 Acquisition related costs 530 — 530 — Acquisition purchase accounting (inventory step-up) 15,853 — 15,853 — COVID-19 pay — 21 54 90 Operating profit, as adjusted $ 60,347 $ 33,752 $ 185,805 $ 116,216 Operating margin, as adjusted 12.4 % 13.4 % 14.4 % 12.5 % Share-based compensation 304 199 1,032 742 Depreciation and amortization 12,405 2,133 18,743 9,912 EBITDA, as adjusted $ 73,056 $ 36,084 102.5 % $ 205,580 $ 126,870 62.0 % EBITDA margin, as adjusted 15.0 % 14.3 % 16.0 % 13.7 % TopBuild Corp. Adjusted EBITDA (Unaudited) (dollars in thousands) Three Months Ended December 31, Year Ended December 31, 2021 2020 Change 2021 2020 Change Total net sales Sales before eliminations $ 1,112,936 $ 760,347 $ 3,665,577 $ 2,869,668 Intercompany eliminations (49,538 ) (38,860 ) (179,370 ) (151,630 ) Net sales after eliminations $ 1,063,398 $ 721,487 47.4 % $ 3,486,207 $ 2,718,038 28.3 % Operating profit, as reported - segments $ 149,939 $ 115,388 $ 553,090 $ 410,136 General corporate expense, net (22,893 ) (6,174 ) (47,018 ) (30,785 ) Intercompany eliminations (8,603 ) (6,137 ) (29,653 ) (24,305 ) Operating profit, as reported $ 118,443 $ 103,077 $ 476,419 $ 355,046 Operating margin, as reported 11.1 % 14.3 % 13.7 % 13.1 % Rationalization charges — (4 ) 16 2,097 Acquisition related costs † 16,262 518 22,107 855 Acquisition purchase accounting (inventory step-up) 15,853 — 15,853 — Refinancing costs 188 — 188 57 COVID-19 pay — 384 659 1,368 Operating profit, as adjusted $ 150,746 $ 103,975 $ 515,242 $ 359,423 Operating margin, as adjusted 14.2 % 14.4 % 14.8 % 13.2 % Share-based compensation 2,941 2,593 11,316 14,910 Depreciation and amortization 28,385 14,883 79,390 62,410 EBITDA, as adjusted $ 182,072 $ 121,451 49.9 % $ 605,948 $ 436,743 38.7 % EBITDA margin, as adjusted 17.1 % 16.8 % 17.4 % 16.1 % Sales change period over period 341,911 768,169 EBITDA, as adjusted, change period over period 60,621 169,205 Incremental EBITDA, as adjusted, as a percentage of change in sales 17.7 % 22.0 % † 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 December 31, Year Ended December 31, 2021 2020 2021 2020 Gross Profit Reconciliations Net sales $ 1,063,398 $ 721,487 $ 3,486,207 $ 2,718,038 Gross profit, as reported $ 283,161 $ 198,020 $ 974,389 $ 746,361 Acquisition purchase accounting (inventory step-up) 15,853 — 15,853 — Rationalization charges — — — 1,016 COVID-19 pay — 380 592 1,135 Gross profit, as adjusted $ 299,014 $ 198,400 $ 990,834 $ 748,512 Gross margin, as reported 26.6 % 27.4 % 27.9 % 27.5 % Gross margin, as adjusted 28.1 % 27.5 % 28.4 % 27.5 % Sellling, General and Administrative Expense Reconciliation Selling, general, and administrative expense, as reported $ 164,718 $ 94,943 $ 497,970 $ 391,315 Rationalization charges — (4 ) 16 1,081 Acquisition related costs 16,262 518 22,107 855 Refinancing costs 188 — 188 57 COVID-19 pay — 4 67 233 Selling, general, and administrative expense, as adjusted $ 148,268 $ 94,425 $ 475,592 $ 389,089 Operating Profit Reconciliation Operating profit, as reported $ 118,443 $ 103,077 $ 476,419 $ 355,046 Rationalization charges — (4 ) 16 2,097 Acquisition related costs 16,262 518 22,107 855 Acquisition purchase accounting (inventory step-up) 15,853 — 15,853 — Refinancing costs 188 — 188 57 COVID-19 pay — 384 659 1,368 Operating profit, as adjusted $ 150,746 $ 103,975 $ 515,242 $ 359,423 Operating margin, as reported 11.1 % 14.3 % 13.7 % 13.1 % Operating margin, as adjusted 14.2 % 14.4 % 14.8 % 13.2 % Income Per Common Share Reconciliation Income before income taxes, as reported $ 107,328 $ 95,417 $ 433,443 $ 323,090 Rationalization charges — (4 ) 16 2,097 Acquisition related costs 16,262 518 22,107 855 Acquisition purchase accounting (inventory step-up) 15,853 — 15,853 — Refinancing costs and loss on extinguishment of debt 163 — 14,025 290 COVID-19 pay — 384 659 1,368 Income before income taxes, as adjusted 139,606 96,315 486,103 327,700 Tax rate at 26.0% (36,298 ) (25,042 ) (126,387 ) (85,202 ) Income, as adjusted $ 103,308 $ 71,273 $ 359,716 $ 242,498 Income per common share, as adjusted $ 3.12 $ 2.15 $ 10.85 $ 7.28 Weighted average diluted common shares outstanding 33,117,227 33,189,104 33,146,171 33,299,986 TopBuild Corp. Same Branch and Acquisition Metrics (Unaudited) (dollars in thousands) Three Months Ended December 31, Year Ended December 31, 2021 2020 2021 2020 Net sales Same branch: Installation $ 570,675 $ 508,812 $ 2,157,011 $ 1,943,461 Specialty Distribution 290,662 251,535 1,083,497 926,207 Eliminations (49,391 ) (38,860 ) (177,904 ) (151,630 ) Total same branch 811,946 721,487 3,062,604 2,718,038 Acquisitions (a): Installation $ 56,448 $ — $ 221,390 $ — Specialty Distribution 195,151 — 203,679 — Eliminations (147 ) — (1,466 ) — Total acquisitions 251,452 — 423,603 — Total $ 1,063,398 $ 721,487 $ 3,486,207 $ 2,718,038 Gross profit, as adjusted Same branch $ 238,840 $ 198,400 $ 889,252 $ 748,512 Acquisitions (a) 60,174 — 101,582 — Total $ 299,014 $ 198,400 $ 990,834 $ 748,512 Gross margin, as adjusted Same branch (b) 29.4 % 27.5 % 29.0 % 27.5 % Acquisitions (c) 23.9 % 24.0 % Operating profit, as adjusted Same branch $ 135,595 $ 103,975 $ 484,085 $ 359,423 Acquisitions (a) 15,151 — 31,157 — Total $ 150,746 $ 103,975 $ 515,242 $ 359,423 Operating margin, as adjusted Same branch (b) 16.7 % 14.4 % 15.8 % 13.2 % Acquisitions (c) 6.0 % 7.4 % EBITDA, as adjusted Same branch $ 154,051 $ 121,451 $ 554,379 $ 436,743 Acquisitions (a) 28,021 — 51,569 — Total $ 182,072 $ 121,451 $ 605,948 $ 436,743 EBITDA, as adjusted, as a percentage of sales Same branch (b) 19.0 % 18.1 % Acquisitions (c) 11.1 % 12.2 % Total (d) 17.1 % 16.8 % 17.4 % 16.1 % As Adjusted Incremental EBITDA, as a percentage of change in sales Same branch (e) 36.0 % 34.1 % Acquisitions (c) 11.1 % 12.2 % Total (f) 17.7 % 22.0 % (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 December 31, Year Ended December 31, 2021 2020 2021 2020 Net income, as reported $ 78,360 $ 70,757 $ 324,016 $ 247,023 Adjustments to arrive at EBITDA, as adjusted: Interest expense and other, net 11,140 7,660 29,139 31,723 Income tax expense 28,968 24,660 109,427 76,067 Depreciation and amortization 28,385 14,883 79,390 62,410 Share-based compensation 2,941 2,593 11,316 14,910 Rationalization charges — (4 ) 16 2,097 Acquisition related costs 16,262 518 22,107 855 Acquisition purchase accounting (inventory step-up) 15,853 — 15,853 — Refinancing costs and loss on extinguishment of debt 163 — 14,025 290 COVID-19 pay — 384 659 1,368 EBITDA, as adjusted $ 182,072 $ 121,451 $ 605,948 $ 436,743 Proforma acquisition EBITDA (a) 73,898 Proforma TTM EBITDA, as adjusted $ 679,846 (a) Represents the trailing twelve months proforma impact of acquisitions completed in 2021. TopBuild Corp. Acquisition Adjusted Net Sales (Unaudited) (in thousands) 2021 Year Ended Q1 Q2 Q3 Q3 December 31, 2021 Net Sales $ 742,798 $ 834,255 $ 845,757 $ 1,063,398 $ 3,486,207 Acquisitions proforma adjustment † 230,581 218,855 227,621 45,291 722,348 Net sales, acquisition adjusted $ 973,379 $ 1,053,110 $ 1,073,378 $ 1,108,688 $ 4,208,555 † 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 $ 423.0 $ 470.1 Adjustments to arrive at estimated EBITDA, as adjusted: Interest expense and other, net 50.3 46.2 Income tax expense 148.6 165.2 Depreciation and amortization 126.4 121.3 Share-based compensation 13.7 11.2 Acquisition related costs 8.0 6.0 Estimated EBITDA, as adjusted $ 770.0 $ 820.0 
- Sales increase 47.4% to $1.1 billion, same branch revenue increases 12.5%