TopBuild Corp. (NYSE:BLD), a
leading installer and specialty distributor of insulation and
related building material products to the construction industry in
the United States and Canada today reported results for the second
quarter ended June 30, 2023.
Robert Buck, President and Chief Executive Officer, stated,
“TopBuild once again delivered strong operating results, as we
continue to benefit from a favorable operating environment and
maintain our focus on driving improvements at both business
segments, Installation and Specialty Distribution. We are also
encouraged by the increasing optimism we are hearing from the
homebuilders.
“Our commercial and industrial business performance remains
strong, with a solid backlog of projects and continued robust
bidding activity. We are particularly pleased with how well our
Installation branches have successfully grown their light
commercial work in their respective regions and believe this will
continue to be a growth driver over the long term.”
Second Quarter 2023 Financial Highlights
($ in 000s)(comparisons are to the quarter ended
June 30, 2022)
3 Months Ended 6/30/23 |
Reported |
Change |
Sales |
$1,317,262 |
3.4% |
Gross Margin |
32.0% |
190 bps |
SG&A as % of revenue |
14.0% |
10 bps |
Operating Profit |
$237,103 |
14.4% |
Operating Margin |
18.0% |
170 bps |
Net Income |
$164,400 |
14.4% |
Net Income per diluted share |
$5.18 |
17.5% |
|
|
|
3 Months Ended 6/30/23 |
Adjusted |
Change |
Sales |
$1,317,262 |
3.4% |
Gross Margin |
32.0% |
190 bps |
SG&A as % of revenue |
13.9% |
10 bps |
Operating Profit |
$239,203 |
14.6% |
Operating Margin |
18.2% |
180 bps |
Net Income |
$166,685 |
15.4% |
Net Income per diluted share |
$5.25 |
18.5% |
EBITDA |
$275,505 |
13.7% |
EBITDA Margin |
20.9% |
190 bps |
|
|
|
Six Month Financial Highlights
($ in 000s)(comparisons are to the six months
ended June 30, 2022)
6 Months Ended 6/30/23 |
Reported |
Change |
Sales |
$2,582,500 |
5.7% |
Gross Margin |
30.7% |
140 bps |
SG&A as % of revenue |
13.8% |
(30 bps) |
Operating Profit |
$436,534 |
17.6% |
Operating Margin |
16.9% |
170 bps |
Net Income |
$300,270 |
16.2% |
Net Income per diluted share |
$9.47 |
20.3% |
|
|
|
6 Months Ended 6/30/23 |
Adjusted |
Change |
Sales |
$2,582,500 |
5.7% |
Gross Margin |
30.7% |
140 bps |
SG&A as % of revenue |
13.5% |
(40 bps) |
Operating Profit |
$442,292 |
17.5% |
Operating Margin |
17.1% |
170 bps |
Net Income |
$305,045 |
17.3% |
Net Income per diluted share |
$9.62 |
21.5% |
EBITDA |
$513,830 |
15.7% |
EBITDA Margin |
19.9% |
170 bps |
|
|
|
Operating Segment Highlights
($ in 000s)(comparisons are to the period ended
June 30, 2022)
Installation |
3 Months Ended 6/30/23 |
6 Months Ended 6/30/23 |
Sales |
$809,055 |
$1,576,145 |
Change |
|
|
Volume |
2.9% |
4.1% |
Price |
2.9% |
4.3% |
M&A |
2.2% |
2.2% |
Total Change |
8.0% |
10.6% |
Operating Margin |
21.3% |
20.3% |
Change |
260 bps |
260 bps |
Adj. Operating Margin |
21.3% |
20.3% |
Change |
260 bps |
250 bps |
Adj. EBITDA Margin |
23.4% |
22.4% |
Change |
260 bps |
240 bps |
|
|
|
Specialty Distribution |
3 Months Ended 6/30/23 |
6 Months Ended 6/30/23 |
Sales |
$574,488 |
$1,132,862 |
Change |
|
|
Volume |
-2.9% |
-2.9% |
Price |
0.6% |
3.0% |
M&A |
0.0% |
0.0% |
Total Change |
-2.3% |
0.1% |
Operating Margin |
15.0% |
14.1% |
Change |
20 bps |
20 bps |
Adj. Operating Margin |
15.0% |
14.1% |
Change |
20 bps |
20 bps |
Adj. EBITDA Margin |
17.6% |
16.7% |
Change |
40 bps |
20 bps |
|
|
|
Capital Allocation
“We are pleased with our progress to date on the
acquisition front, welcoming three profitable and well-managed
companies to the TopBuild family. In late July we also announced
that we had signed an agreement to acquire SPI, a leading specialty
distributor generating approximately $703 million in annual
revenue. This acquisition will further enhance our growth platform
in the three end-markets we serve and increase our recurring
revenue stream from maintenance and repair operations.” added
Buck.
Year-to-date the Company has completed three
acquisitions; SRI Holdings, Best Insulation, and Rocky Mountain
Spray Foam which, combined, are expected to contribute
approximately $170 million of annual revenue.
2023 Outlook
Sales and Adjusted EBITDA
Outlook (1) ($ in millions)
2023 |
Low |
High |
Sales |
$ |
5,025 |
$ |
5,175 |
Adjusted EBITDA* |
$ |
950 |
$ |
1,000 |
*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 2022 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 second quarter 2023
financial results is scheduled for today, Thursday, August 3, 2023,
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 related building material products to the
construction industry in the United States and Canada. We provide
insulation installation services nationwide through our
Installation segment 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 170 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 can be identified by words such as
“will,” “would,” “anticipate,” “expect,” “believe,” “designed,”
“plan,” “may,” “project,” “estimate” 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
ContactTabitha Zanetabitha.zane@topbuild.com
386-763-8801
TopBuild Corp. |
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Condensed Consolidated Statements of Operations
(Unaudited) |
|
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|
|
|
|
|
|
(in thousands, except share and per common share
amounts) |
|
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|
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Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Net sales |
|
$ |
1,317,262 |
|
|
$ |
1,274,285 |
|
|
$ |
2,582,500 |
|
|
$ |
2,443,203 |
|
Cost of
sales |
|
|
895,462 |
|
|
|
890,188 |
|
|
|
1,790,485 |
|
|
|
1,727,905 |
|
Gross profit |
|
|
421,800 |
|
|
|
384,097 |
|
|
|
792,015 |
|
|
|
715,298 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling,
general, and administrative expense |
|
|
184,697 |
|
|
|
176,876 |
|
|
|
355,481 |
|
|
|
344,123 |
|
Operating profit |
|
|
237,103 |
|
|
|
207,221 |
|
|
|
436,534 |
|
|
|
371,175 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense), net: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
(18,558 |
) |
|
|
(13,410 |
) |
|
|
(36,597 |
) |
|
|
(25,375 |
) |
Other, net |
|
|
4,605 |
|
|
|
(279 |
) |
|
|
6,528 |
|
|
|
406 |
|
Other
expense, net |
|
|
(13,953 |
) |
|
|
(13,689 |
) |
|
|
(30,069 |
) |
|
|
(24,969 |
) |
Income before income taxes |
|
|
223,150 |
|
|
|
193,532 |
|
|
|
406,465 |
|
|
|
346,206 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense |
|
|
(58,750 |
) |
|
|
(49,835 |
) |
|
|
(106,195 |
) |
|
|
(87,796 |
) |
Net income |
|
$ |
164,400 |
|
|
$ |
143,697 |
|
|
$ |
300,270 |
|
|
$ |
258,410 |
|
|
|
|
|
|
|
|
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Net
income per common share: |
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|
|
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|
|
|
|
|
|
|
|
Basic |
|
$ |
5.20 |
|
|
$ |
4.43 |
|
|
$ |
9.51 |
|
|
$ |
7.93 |
|
Diluted |
|
$ |
5.18 |
|
|
$ |
4.41 |
|
|
$ |
9.47 |
|
|
$ |
7.87 |
|
|
|
|
|
|
|
|
|
|
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Weighted average shares outstanding: |
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|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
31,599,744 |
|
|
|
32,405,292 |
|
|
|
31,575,337 |
|
|
|
32,570,988 |
|
Diluted |
|
|
31,731,807 |
|
|
|
32,614,449 |
|
|
|
31,722,660 |
|
|
|
32,827,549 |
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TopBuild Corp. |
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Condensed Consolidated Statements of Comprehensive Income
(Unaudited) |
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|
|
(in
thousands) |
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|
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|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2023 |
|
2022 |
|
|
2023 |
|
2022 |
Net income |
|
$ |
164,400 |
|
$ |
143,697 |
|
|
$ |
300,270 |
|
$ |
258,410 |
Other
comprehensive income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustment |
|
|
4,283 |
|
|
(2,193 |
) |
|
|
6,037 |
|
|
1,026 |
Comprehensive income |
|
$ |
168,683 |
|
$ |
141,504 |
|
|
$ |
306,307 |
|
$ |
259,436 |
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TopBuild Corp. |
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Condensed Consolidated Balance Sheets and Other Financial
Data (Unaudited) |
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(dollars in thousands) |
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|
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As of |
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|
June 30, 2023 |
|
|
December 31, 2022 |
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ASSETS |
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Current
assets: |
|
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|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
526,327 |
|
|
$ |
240,069 |
|
Receivables, net of an allowance for credit losses of $16,778 at
June 30, 2023, and $16,281 at December 31, 2022 |
|
|
857,664 |
|
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|
836,071 |
|
Inventories, net |
|
|
385,049 |
|
|
|
438,644 |
|
Prepaid expenses and other current assets |
|
|
25,556 |
|
|
|
34,257 |
|
Total current assets |
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|
1,794,596 |
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|
1,549,041 |
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|
|
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Right of
use assets |
|
|
204,044 |
|
|
|
205,892 |
|
Property
and equipment, net |
|
|
258,746 |
|
|
|
253,484 |
|
Goodwill |
|
|
1,991,949 |
|
|
|
1,966,994 |
|
Other
intangible assets, net |
|
|
595,706 |
|
|
|
614,967 |
|
Other
assets |
|
|
12,905 |
|
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|
16,453 |
|
Total assets |
|
$ |
4,857,946 |
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$ |
4,606,831 |
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LIABILITIES |
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Current
liabilities: |
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Accounts payable |
|
$ |
468,602 |
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$ |
487,114 |
|
Current portion of long-term debt |
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|
45,142 |
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|
40,068 |
|
Accrued liabilities |
|
|
180,594 |
|
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|
199,370 |
|
Short-term operating lease liabilities |
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|
61,825 |
|
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|
60,880 |
|
Short-term finance lease liabilities |
|
|
2,180 |
|
|
|
2,207 |
|
Total current liabilities |
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|
758,343 |
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|
789,639 |
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Long-term
debt |
|
|
1,394,794 |
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|
1,417,257 |
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Deferred
tax liabilities, net |
|
|
254,777 |
|
|
|
251,481 |
|
Long-term
portion of insurance reserves |
|
|
57,217 |
|
|
|
59,783 |
|
Long-term
operating lease liabilities |
|
|
148,709 |
|
|
|
149,943 |
|
Long-term
finance lease liabilities |
|
|
4,519 |
|
|
|
6,673 |
|
Other
liabilities |
|
|
1,541 |
|
|
|
2,349 |
|
Total liabilities |
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|
2,619,900 |
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|
|
2,677,125 |
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EQUITY |
|
|
2,238,046 |
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|
1,929,706 |
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Total liabilities and equity |
|
$ |
4,857,946 |
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$ |
4,606,831 |
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As of June 30, |
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|
2023 |
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|
2022 |
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Other Financial Data |
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Receivable days |
|
|
50 |
|
|
|
46 |
|
Inventory days |
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|
39 |
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|
48 |
|
Accounts payable days |
|
|
64 |
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|
62 |
|
Receivables, net plus inventories, net less accounts payable |
|
$ |
774,111 |
|
|
$ |
696,615 |
|
Receivables, net plus inventories, net less accounts payable as a
percent of sales (TTM) † |
|
|
14.9 |
% |
|
|
15.0 |
% |
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† Trailing
12 months sales have been adjusted for the pro forma effect of
acquired branches |
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TopBuild Corp. |
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Condensed Consolidated Statement of Cash Flows
(Unaudited) |
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(in
thousands) |
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Six Months Ended June 30, |
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|
2023 |
|
|
2022 |
|
Cash
Flows Provided by (Used in) Operating Activities: |
|
|
|
|
|
Net income |
|
$ |
300,270 |
|
|
$ |
258,410 |
|
Adjustments
to reconcile net income to net cash provided by operating
activities: |
|
|
|
|
|
|
Depreciation
and amortization |
|
|
64,652 |
|
|
|
60,621 |
|
Share-based
compensation |
|
|
6,886 |
|
|
|
7,061 |
|
Loss on sale
of property and equipment |
|
|
621 |
|
|
|
525 |
|
Amortization
of debt issuance costs |
|
|
1,440 |
|
|
|
1,427 |
|
Provision
for bad debt expense |
|
|
4,031 |
|
|
|
6,404 |
|
Loss from
inventory obsolescence |
|
|
3,290 |
|
|
|
3,610 |
|
Change in
certain assets and liabilities: |
|
|
|
|
|
|
Receivables,
net |
|
|
(37,247 |
) |
|
|
(107,739 |
) |
Inventories,
net |
|
|
54,623 |
|
|
|
(82,621 |
) |
Prepaid
expenses and other current assets |
|
|
8,897 |
|
|
|
648 |
|
Accounts
payable |
|
|
(8,806 |
) |
|
|
47,540 |
|
Accrued
liabilities |
|
|
(13,872 |
) |
|
|
16,884 |
|
Other,
net |
|
|
1,012 |
|
|
|
4,927 |
|
Net cash
provided by operating activities |
|
|
385,797 |
|
|
|
217,697 |
|
|
|
|
|
|
|
|
Cash
Flows Provided by (Used in) Investing Activities: |
|
|
|
|
|
|
Purchases of
property and equipment |
|
|
(30,672 |
) |
|
|
(36,034 |
) |
Acquisition
of businesses, net of cash acquired |
|
|
(45,948 |
) |
|
|
(18,746 |
) |
Proceeds
from sale of property and equipment |
|
|
782 |
|
|
|
618 |
|
Net cash
used in investing activities |
|
|
(75,838 |
) |
|
|
(54,162 |
) |
|
|
|
|
|
|
|
Cash
Flows Provided by (Used in) Financing Activities: |
|
|
|
|
|
|
Repayment of
long-term debt |
|
|
(18,829 |
) |
|
|
(19,287 |
) |
Proceeds
from revolving credit facility |
|
|
— |
|
|
|
70,000 |
|
Repayment of
revolving credit facility |
|
|
— |
|
|
|
(70,000 |
) |
Taxes
withheld and paid on employees' equity awards |
|
|
(6,350 |
) |
|
|
(11,667 |
) |
Exercise of
stock options |
|
|
1,497 |
|
|
|
1,452 |
|
Repurchase
of shares of common stock |
|
|
— |
|
|
|
(150,050 |
) |
Payment of
contingent consideration |
|
|
(300 |
) |
|
|
(35 |
) |
Net cash
used in financing activities |
|
|
(23,982 |
) |
|
|
(179,587 |
) |
Impact of
exchange rate changes on cash |
|
|
281 |
|
|
|
142 |
|
Net increase
(decrease) in cash and cash equivalents |
|
|
286,258 |
|
|
|
(15,910 |
) |
Cash and
cash equivalents- Beginning of period |
|
|
240,069 |
|
|
|
139,779 |
|
Cash and
cash equivalents- End of period |
|
$ |
526,327 |
|
|
$ |
123,869 |
|
|
|
|
|
|
|
|
Supplemental disclosure of noncash
activities: |
|
|
|
|
|
|
Leased
assets obtained in exchange for new operating lease
liabilities |
|
$ |
26,310 |
|
|
$ |
36,129 |
|
Accruals for
property and equipment |
|
|
1,449 |
|
|
|
563 |
|
|
|
|
|
|
|
|
TopBuild Corp. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Data (Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
|
|
Six Months Ended June 30, |
|
|
|
|
|
|
|
2023 |
|
|
|
2022 |
|
|
Change |
|
|
2023 |
|
|
|
2022 |
|
|
Change |
|
Installation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales |
|
$ |
809,055 |
|
|
$ |
748,968 |
|
|
8.0 |
% |
|
$ |
1,576,145 |
|
|
$ |
1,425,661 |
|
|
10.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit, as reported |
|
$ |
172,278 |
|
|
$ |
139,919 |
|
|
|
|
$ |
319,176 |
|
|
$ |
252,598 |
|
|
|
|
Operating margin, as reported |
|
|
21.3 |
% |
|
|
18.7 |
% |
|
|
|
|
20.3 |
% |
|
|
17.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rationalization charges |
|
|
— |
|
|
|
— |
|
|
|
|
|
— |
|
|
|
473 |
|
|
|
|
Acquisition related costs |
|
|
227 |
|
|
|
16 |
|
|
|
|
|
490 |
|
|
|
96 |
|
|
|
|
Operating profit, as adjusted |
|
$ |
172,505 |
|
|
$ |
139,935 |
|
|
|
|
$ |
319,666 |
|
|
$ |
253,167 |
|
|
|
|
Operating margin, as adjusted |
|
|
21.3 |
% |
|
|
18.7 |
% |
|
|
|
|
20.3 |
% |
|
|
17.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation |
|
|
310 |
|
|
|
282 |
|
|
|
|
|
689 |
|
|
|
689 |
|
|
|
|
Depreciation and amortization |
|
|
16,791 |
|
|
|
15,319 |
|
|
|
|
|
33,284 |
|
|
|
31,004 |
|
|
|
|
EBITDA, as adjusted |
|
$ |
189,606 |
|
|
$ |
155,536 |
|
|
21.9 |
% |
|
$ |
353,639 |
|
|
$ |
284,860 |
|
|
24.1 |
% |
EBITDA margin, as adjusted |
|
|
23.4 |
% |
|
|
20.8 |
% |
|
|
|
|
22.4 |
% |
|
|
20.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Specialty Distribution |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales |
|
$ |
574,488 |
|
|
$ |
587,791 |
|
|
(2.3 |
)% |
|
$ |
1,132,862 |
|
|
$ |
1,131,653 |
|
|
0.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit, as reported |
|
$ |
85,980 |
|
|
$ |
86,749 |
|
|
|
|
$ |
159,313 |
|
|
$ |
157,170 |
|
|
|
|
Operating margin, as reported |
|
|
15.0 |
% |
|
|
14.8 |
% |
|
|
|
|
14.1 |
% |
|
|
13.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition related costs |
|
|
— |
|
|
|
334 |
|
|
|
|
|
340 |
|
|
|
575 |
|
|
|
|
Operating profit, as adjusted |
|
$ |
85,980 |
|
|
$ |
87,083 |
|
|
|
|
$ |
159,653 |
|
|
$ |
157,745 |
|
|
|
|
Operating margin, as adjusted |
|
|
15.0 |
% |
|
|
14.8 |
% |
|
|
|
|
14.1 |
% |
|
|
13.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation |
|
|
316 |
|
|
|
287 |
|
|
|
|
|
554 |
|
|
|
641 |
|
|
|
|
Depreciation and amortization |
|
|
14,740 |
|
|
|
14,005 |
|
|
|
|
|
29,312 |
|
|
|
28,034 |
|
|
|
|
EBITDA, as adjusted |
|
$ |
101,036 |
|
|
$ |
101,375 |
|
|
(0.3 |
)% |
|
$ |
189,519 |
|
|
$ |
186,420 |
|
|
1.7 |
% |
EBITDA margin, as adjusted |
|
|
17.6 |
% |
|
|
17.2 |
% |
|
|
|
|
16.7 |
% |
|
|
16.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TopBuild Corp. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
|
|
Six Months Ended June 30, |
|
|
|
|
|
|
2023 |
|
2022 |
|
Change |
|
2023 |
|
2022 |
|
Change |
Total net sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales before eliminations |
|
$ |
1,383,543 |
|
|
$ |
1,336,759 |
|
|
|
|
|
$ |
2,709,007 |
|
|
$ |
2,557,314 |
|
|
|
|
|
Intercompany eliminations |
|
|
(66,281 |
) |
|
|
(62,474 |
) |
|
|
|
|
|
(126,507 |
) |
|
|
(114,111 |
) |
|
|
|
|
Net sales after eliminations |
|
$ |
1,317,262 |
|
|
$ |
1,274,285 |
|
|
3.4 |
% |
|
$ |
2,582,500 |
|
|
$ |
2,443,203 |
|
|
|
5.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit, as reported - segments |
|
$ |
258,258 |
|
|
$ |
226,668 |
|
|
|
|
|
$ |
478,489 |
|
|
$ |
409,768 |
|
|
|
|
|
General corporate expense, net |
|
|
(9,957 |
) |
|
|
(9,012 |
) |
|
|
|
|
|
(20,786 |
) |
|
|
(19,449 |
) |
|
|
|
|
Intercompany eliminations |
|
|
(11,198 |
) |
|
|
(10,435 |
) |
|
|
|
|
|
(21,169 |
) |
|
|
(19,144 |
) |
|
|
|
|
Operating profit, as reported |
|
$ |
237,103 |
|
|
$ |
207,221 |
|
|
|
|
|
$ |
436,534 |
|
|
$ |
371,175 |
|
|
|
|
|
Operating margin, as reported |
|
|
18.0 |
% |
|
|
16.3 |
% |
|
|
|
|
|
16.9 |
% |
|
|
15.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rationalization charges |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
473 |
|
|
|
|
|
Acquisition related costs † |
|
|
2,100 |
|
|
|
1,577 |
|
|
|
|
|
|
5,758 |
|
|
|
4,654 |
|
|
|
|
|
Operating profit, as adjusted |
|
$ |
239,203 |
|
|
$ |
208,798 |
|
|
|
|
|
$ |
442,292 |
|
|
$ |
376,302 |
|
|
|
|
|
Operating margin, as adjusted |
|
|
18.2 |
% |
|
|
16.4 |
% |
|
|
|
|
|
17.1 |
% |
|
|
15.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation |
|
|
3,751 |
|
|
|
3,334 |
|
|
|
|
|
|
6,886 |
|
|
|
7,061 |
|
|
|
|
|
Depreciation and amortization |
|
|
32,551 |
|
|
|
30,122 |
|
|
|
|
|
|
64,652 |
|
|
|
60,621 |
|
|
|
|
|
EBITDA, as adjusted |
|
$ |
275,505 |
|
|
$ |
242,254 |
|
|
13.7 |
% |
|
$ |
513,830 |
|
|
$ |
443,984 |
|
|
|
15.7 |
% |
EBITDA margin, as adjusted |
|
|
20.9 |
% |
|
|
19.0 |
% |
|
|
|
|
|
19.9 |
% |
|
|
18.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales change period over period |
|
|
42,977 |
|
|
|
|
|
|
|
|
|
139,297 |
|
|
|
|
|
|
|
|
EBITDA, as adjusted, change period over period |
|
|
33,251 |
|
|
|
|
|
|
|
|
|
69,846 |
|
|
|
|
|
|
|
|
Incremental EBITDA, as adjusted, as a percentage of change in
sales |
|
|
77.4 |
% |
|
|
|
|
|
|
|
|
50.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
† 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 June 30, |
|
|
Six Months Ended June 30, |
|
|
2023 |
|
2022 |
|
|
2023 |
|
2022 |
Gross Profit Reconciliation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
1,317,262 |
|
|
$ |
1,274,285 |
|
|
|
$ |
2,582,500 |
|
|
$ |
2,443,203 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit, as reported |
|
$ |
421,800 |
|
|
$ |
384,097 |
|
|
|
$ |
792,015 |
|
|
$ |
715,298 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition
related costs |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
121 |
|
Gross profit, as adjusted |
|
$ |
421,800 |
|
|
$ |
384,097 |
|
|
|
$ |
792,015 |
|
|
$ |
715,419 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
margin, as reported |
|
|
32.0 |
% |
|
|
30.1 |
% |
|
|
|
30.7 |
% |
|
|
29.3 |
% |
Gross
margin, as adjusted |
|
|
32.0 |
% |
|
|
30.1 |
% |
|
|
|
30.7 |
% |
|
|
29.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, General and Administrative Expense
Reconciliation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general, and administrative expense, as
reported |
|
$ |
184,697 |
|
|
$ |
176,876 |
|
|
|
$ |
355,481 |
|
|
$ |
344,123 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rationalization charges |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
473 |
|
Acquisition
related costs |
|
|
2,100 |
|
|
|
1,577 |
|
|
|
|
5,758 |
|
|
|
4,533 |
|
Selling, general, and administrative expense, as
adjusted |
|
$ |
182,597 |
|
|
$ |
175,299 |
|
|
|
$ |
349,723 |
|
|
$ |
339,117 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Profit Reconciliation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit, as reported |
|
$ |
237,103 |
|
|
$ |
207,221 |
|
|
|
$ |
436,534 |
|
|
$ |
371,175 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rationalization charges |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
473 |
|
Acquisition
related costs |
|
|
2,100 |
|
|
|
1,577 |
|
|
|
|
5,758 |
|
|
|
4,654 |
|
Operating profit, as adjusted |
|
$ |
239,203 |
|
|
$ |
208,798 |
|
|
|
$ |
442,292 |
|
|
$ |
376,302 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
margin, as reported |
|
|
18.0 |
% |
|
|
16.3 |
% |
|
|
|
16.9 |
% |
|
|
15.2 |
% |
Operating
margin, as adjusted |
|
|
18.2 |
% |
|
|
16.4 |
% |
|
|
|
17.1 |
% |
|
|
15.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Per Common Share Reconciliation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes, as reported |
|
$ |
223,150 |
|
|
$ |
193,532 |
|
|
|
$ |
406,465 |
|
|
$ |
346,206 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rationalization charges |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
473 |
|
Acquisition
related costs |
|
|
2,100 |
|
|
|
1,577 |
|
|
|
|
5,758 |
|
|
|
4,654 |
|
Income before income taxes, as adjusted |
|
|
225,250 |
|
|
|
195,109 |
|
|
|
|
412,223 |
|
|
|
351,333 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax rate at
26.0% |
|
|
(58,565 |
) |
|
|
(50,728 |
) |
|
|
|
(107,178 |
) |
|
|
(91,347 |
) |
Income, as adjusted |
|
$ |
166,685 |
|
|
$ |
144,381 |
|
|
|
$ |
305,045 |
|
|
$ |
259,986 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income per common share, as adjusted |
|
$ |
5.25 |
|
|
$ |
4.43 |
|
|
|
$ |
9.62 |
|
|
$ |
7.92 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average diluted common shares outstanding |
|
|
31,731,807 |
|
|
|
32,614,449 |
|
|
|
|
31,722,660 |
|
|
|
32,827,549 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TopBuild Corp. |
|
|
|
|
|
|
|
|
|
|
|
|
Same
Branch and Acquisition Metrics (Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Net
sales |
|
|
|
|
|
|
|
|
|
|
|
|
Same
branch: |
|
|
|
|
|
|
|
|
|
|
|
|
Installation |
|
$ |
792,529 |
|
|
$ |
748,968 |
|
|
$ |
1,544,775 |
|
|
$ |
1,425,661 |
|
Specialty Distribution |
|
|
574,488 |
|
|
|
587,791 |
|
|
|
1,132,862 |
|
|
|
1,131,653 |
|
Eliminations |
|
|
(66,281 |
) |
|
|
(62,474 |
) |
|
|
(126,507 |
) |
|
|
(114,111 |
) |
Total same
branch |
|
|
1,300,736 |
|
|
|
1,274,285 |
|
|
|
2,551,130 |
|
|
|
2,443,203 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisitions
(a): |
|
|
|
|
|
|
|
|
|
|
|
|
Installation |
|
$ |
16,526 |
|
|
$ |
— |
|
|
$ |
31,370 |
|
|
$ |
— |
|
Total
acquisitions |
|
|
16,526 |
|
|
|
— |
|
|
|
31,370 |
|
|
|
— |
|
Total |
|
$ |
1,317,262 |
|
|
$ |
1,274,285 |
|
|
$ |
2,582,500 |
|
|
$ |
2,443,203 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA, as adjusted |
|
|
|
|
|
|
|
|
|
|
|
|
Same
branch |
|
$ |
272,939 |
|
|
$ |
242,254 |
|
|
$ |
509,715 |
|
|
$ |
443,984 |
|
Acquisitions
(a) |
|
|
2,566 |
|
|
|
— |
|
|
|
4,115 |
|
|
|
— |
|
Total |
|
$ |
275,505 |
|
|
$ |
242,254 |
|
|
$ |
513,830 |
|
|
$ |
443,984 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA, as adjusted, as a percentage of sales |
|
|
|
|
|
|
|
|
|
|
|
|
Same branch
(b) |
|
|
21.0 |
% |
|
|
|
|
|
20.0 |
% |
|
|
|
Acquisitions
(c) |
|
|
15.5 |
% |
|
|
|
|
|
13.1 |
% |
|
|
|
Total (d) |
|
|
20.9 |
% |
|
|
19.0 |
% |
|
|
19.9 |
% |
|
|
18.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Adjusted Incremental EBITDA, as a percentage of change in
sales |
|
|
|
|
|
|
|
|
|
|
|
|
Same branch
(e) |
|
|
116.0 |
% |
|
|
|
|
|
60.9 |
% |
|
|
|
Acquisitions
(c) |
|
|
15.5 |
% |
|
|
|
|
|
13.1 |
% |
|
|
|
Total (f) |
|
|
77.4 |
% |
|
|
|
|
|
50.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 June 30, |
|
Six Months Ended June 30, |
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Net
income, as reported |
|
$ |
164,400 |
|
$ |
143,697 |
|
$ |
300,270 |
|
$ |
258,410 |
Adjustments
to arrive at EBITDA, as adjusted: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense and other, net |
|
|
13,953 |
|
|
13,689 |
|
|
30,069 |
|
|
24,969 |
Income tax expense |
|
|
58,750 |
|
|
49,835 |
|
|
106,195 |
|
|
87,796 |
Depreciation and amortization |
|
|
32,551 |
|
|
30,122 |
|
|
64,652 |
|
|
60,621 |
Share-based compensation |
|
|
3,751 |
|
|
3,334 |
|
|
6,886 |
|
|
7,061 |
Rationalization charges |
|
|
— |
|
|
— |
|
|
— |
|
|
473 |
Acquisition related costs |
|
|
2,100 |
|
|
1,577 |
|
|
5,758 |
|
|
4,654 |
EBITDA, as adjusted |
|
$ |
275,505 |
|
$ |
242,254 |
|
$ |
513,830 |
|
$ |
443,984 |
|
|
|
|
|
|
|
|
|
|
|
|
|
TopBuild Corp. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition Adjusted Net Sales (Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2022 |
|
2023 |
|
Trailing
Twelve Months Ended |
|
Q3 |
|
Q4 |
|
Q1 |
|
Q2 |
|
June 30, 2023 |
Net
Sales |
$ |
1,300,998 |
|
$ |
1,264,543 |
|
$ |
1,265,238 |
|
$ |
1,317,262 |
|
$ |
5,148,041 |
Acquisitions
proforma adjustment † |
|
17,576 |
|
|
18,279 |
|
|
6,187 |
|
|
- |
|
|
42,042 |
Net sales,
acquisition adjusted |
$ |
1,318,574 |
|
$ |
1,282,822 |
|
$ |
1,271,425 |
|
$ |
1,317,262 |
|
$ |
5,190,083 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
† Trailing 12 months sales have been adjusted for the pro forma
effect of acquired branches |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TopBuild Corp. |
|
|
|
|
|
|
2023 Estimated Adjusted EBITDA Range
(Unaudited) |
|
|
|
|
|
(in
millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ending December 31, 2023 |
|
|
|
Low |
|
|
High |
|
Estimated net income |
$ |
543.0 |
|
|
586.0 |
|
Adjustments to arrive at estimated EBITDA, as adjusted: |
|
|
|
|
|
Interest expense and other, net |
|
62.0 |
|
|
59.0 |
|
Income tax expense |
|
191.0 |
|
|
206.0 |
|
Depreciation and amortization |
|
131.0 |
|
|
128.0 |
|
Share-based compensation |
|
15.0 |
|
|
14.0 |
|
Acquisition related costs |
|
8.0 |
|
|
7.0 |
|
Estimated EBITDA, as adjusted |
$ |
950.0 |
|
$ |
1,000.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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