• TopBuild Reports First Quarter 2021 Results

    来源: Nasdaq GlobeNewswire / 06 5月 2021 06:45:00   America/New_York

    • Net sales increased 13.7%
    • Gross margin expanded 30 basis points
    • 12.9% operating margin, 13.1% on an adjusted basis, up 230 basis points
    • Adjusted EBITDA increased 31.1%, adjusted EBITDA margin up 210 basis points
    • $1.80 net income per diluted share, $2.02 on an adjusted basis

    DAYTONA BEACH, Fla., May 06, 2021 (GLOBE NEWSWIRE) --  TopBuild Corp. (NYSE:BLD), a leading installer and distributor of insulation and building material products today reported results for the first quarter ended March 31, 2021.

    Robert Buck, President and Chief Executive Officer, stated, “TopBuild reported another solid quarter with sales benefitting from the strong growth in both our residential and commercial businesses. Adjusted operating margins expanded at both TruTeam and Service Partners, despite the impact of severe weather in February, most notably in Texas where we have significant operations.

    “Our team is executing well and remains focused on profitable growth, which includes successfully managing the multiple material cost increases announced this year, leveraging our fixed cost base and continuing to focus on operational efficiency.”

    First Quarter 2021 Financial Highlights

    (unless otherwise indicated, comparisons are to the quarter ended March 31, 2020)

    • Net Sales increased 13.7% to $742.8 million, 9.5% on a same branch basis. The increase was primarily driven by increased sales volume, contributions from acquisitions and price.
    • Gross margin increased 30 basis points to 26.6%. On an adjusted basis, gross margin increased 40 basis points to 26.7%.
    • Operating profit was $95.9 million, compared to $70.0 million, a 37.0% increase. On an adjusted basis, operating profit was $97.2 million, compared to $70.3 million, a 38.3% improvement.
    • Operating margin was 12.9% compared to 10.7%. Adjusted operating margin improved 230 basis points to 13.1%.
    • Net income was $59.8 million, or $1.80 per diluted share, compared to net income of $50.8 million or $1.51 per diluted share. Adjusted net income was $67.1 million, or $2.02 per diluted share, compared to $45.9 million, or $1.37 per diluted share.

    • Adjusted EBITDA was $115.8 million, compared to $88.4 million, a 31.1% increase and adjusted EBITDA margin improved 210 basis points to 15.6%. Incremental adjusted EBITDA margin was 30.6%, 39.9% on a same branch basis.

    • At March 31, 2021, the Company had cash and cash equivalents of $319.6 million and availability under the revolving credit facility of approximately $389.6 million for total liquidity of $709.2 million.

    Operating Segment Highlights ($ in 000s)
    (comparisons are to the quarter ended March 31, 2020)

           
     TruTeam3 Months
    Ended
    3/31/21
     Service Partners3 Months
    Ended
    3/31/21
     
     Sales$532,753  Sales$251,601  
     Change  Change  
     Volume 5.1%  Volume 13.8%  
     Price 1.1%  Price 3.7%  
     M&A 5.8%  M&A 0.0%  
     Total Change 12.0%  Total Change 17.4%  
     Operating Margin 13.8%  Operating Margin 14.1%  
     Change110 bps Change260 bps 
     Adj. Operating Margin 13.9%  Adj. Operating Margin 14.1%  
     Change120 bps Change260 bps 
           

    Capital Allocation
    Acquisitions
    Year-to-date, the Company has completed four acquisitions.

        
     ForecastedMonth 
    YTD 2021Annual Revenue ($millions)AcquiredBusiness Focus
    LCR Contractors$58.0JanuaryHeavy Commercial/Fireproofing
    Ozark Foam$7.7MarchResidential, primarily spray foam
    American Building Systems$144.0AprilResidential (94%) & Distribution (6%)
    Creative Conservation$7.4AprilResidential
    Total$217.1   
        

    “We were pleased to acquire LCR Contractors and Ozark Foam in the first quarter and ABS and Creative Conservation in April. Combined, these four acquisitions are expected to produce approximately $217 million of annual revenue,” added Buck.

    “Targeted M&A remains our number one capital allocation priority and our team has demonstrated its skill at identifying, executing and integrating acquisitions, thereby maximizing the synergies inherent in each transaction and creating long-term value for our shareholders.”

    Share Repurchases
    In the first quarter the Company repurchased 49,284 shares at an average price of $199.98 per share. These shares were purchased as part of the Company’s $200 million share repurchase program announced on February 26, 2019. As of March 31, 2021, approximately $30.1 million of the $200 million authorization remained.

    Senior Notes Offering
    On March 15, 2021, the Company closed its private offering of $400 million in aggregate principal amount of 3.625% senior notes due 2029. The Company used the net proceeds from the offering, together with cash on hand, to redeem its existing $400 million 5.625% senior unsecured notes maturing in 2026 and to pay fees and expenses related to the offering.

    2021 Outlook

    Sales and Adjusted EBITDA Guidance (1)
    ($ in millions)

         
     2021LowHigh 
     Sales$3,220$3,320 
     Adjusted EBITDA*$532$562 
         

    *See table for adjusted EBITDA reconciliation.

    Assumptions (1)
    ($ in millions)

           
     2021LowHigh 
     Housing Starts 1,450 1,500 
     Estimated net income$315.3$344.6 
     Interest Expense and other, net$23.8$20.8 
     Income tax expense$110.8$121.0 
     Depreciation and Amortization$70.9$66.9 
     Share based compensation$11.2$8.7 
         

    (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 first quarter 2021 financial results is scheduled for today, Thursday, May 6, 2021, 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 200 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 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.       
    Condensed Consolidated Statements of Operations (Unaudited)     
    (in thousands, except share and per common share amounts)    
            
      Three Months Ended March 31,  
      2021  2020  
    Net sales $742,798  $653,228     
    Cost of sales  545,039   481,272  
    Gross profit  197,759   171,956  
            
    Selling, general, and administrative expense  101,872   101,967  
    Operating profit  95,887   69,989  
            
    Other income (expense), net:       
    Interest expense  (6,603)  (8,742) 
    Loss on extinguishment of debt  (13,862)  (233) 
    Other, net  77   472  
    Other expense, net  (20,388)  (8,503) 
    Income before income taxes  75,499   61,486  
            
    Income tax expense  (15,657)  (10,715) 
    Net income $59,842  $50,771  
            
    Net income per common share:       
    Basic $1.82  $1.53  
    Diluted $1.80  $1.51  
            
    Weighted average shares outstanding:       
    Basic  32,826,515   33,168,453  
    Diluted  33,202,563   33,599,847  



    TopBuild Corp.       
    Condensed Consolidated Balance Sheets and Other Financial Data (Unaudited)       
    (dollars in thousands)       
      As of 
      March 31,     December 31,  
    ASSETS 2021 2020 
    Current assets:       
    Cash and cash equivalents $319,619 $330,007 
    Receivables, net of an allowance for credit losses of $7,171 at March 31, 2021, and $6,926 at December 31, 2020  462,848  427,340 
    Inventories, net  163,988  161,369 
    Prepaid expenses and other current assets  14,255  17,689 
    Total current assets  960,710  936,405 
            
    Right of use assets  94,094  83,490 
    Property and equipment, net  187,033  180,053 
    Goodwill  1,430,913  1,410,685 
    Other intangible assets, net  205,513  190,605 
    Deferred tax assets, net  2,767  2,728 
    Other assets  11,072  11,317 
    Total assets $2,892,102 $2,815,283 
            
    LIABILITIES       
    Current liabilities:       
    Accounts payable $330,813 $331,710 
    Current portion of long-term debt  23,406  23,326 
    Accrued liabilities  124,946  107,949 
    Short-term lease liabilities  35,119  33,492 
    Total current liabilities  514,284  496,477 
            
    Long-term debt  686,493  683,396 
    Deferred tax liabilities, net  168,424  168,568 
    Long-term portion of insurance reserves  50,197  50,657 
    Long-term lease liabilities  62,688  53,749 
    Other liabilities  13,653  13,642 
    Total liabilities  1,495,739  1,466,489 
            
    EQUITY  1,396,363  1,348,794 
    Total liabilities and equity $2,892,102 $2,815,283 
            
            
      As of March 31,  
         2021 2020 
    Other Financial Data       
    Receivable days  45  51 
    Inventory days  29  29 
    Accounts payable days  76  79 
    Receivables, net plus inventories, net less accounts payable $296,023 $278,756 
    Receivables, net plus inventories, net less accounts payable as a percent of sales (TTM) †10.2% 10.5%
            
    † 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, 
      2021  2020 
    Cash Flows Provided by (Used in) Operating Activities:               
    Net income $59,842  $50,771 
    Adjustments to reconcile net income to net cash provided by operating activities:      
    Depreciation and amortization  15,519   14,190 
    Share-based compensation  3,111   3,908 
    Loss on extinguishment of debt  13,862   233 
    Loss on sale or abandonment of property and equipment  56   383 
    Amortization of debt issuance costs  422   328 
    Provision for bad debt expense  1,765   1,670 
    Loss from inventory obsolescence  653   529 
    Deferred income taxes, net  (183)  (39)
    Change in certain assets and liabilities      
    Receivables, net  (20,831)  (5,048)
    Inventories, net  (2,088)  (3,964)
    Prepaid expenses and other current assets  3,517   6,193 
    Accounts payable  (2,244)  (4,173)
    Accrued liabilities  16,591   9,981 
    Other, net  (570)  (2,032)
    Net cash provided by operating activities  89,422   72,930 
           
    Cash Flows Provided by (Used in) Investing Activities:      
    Purchases of property and equipment  (12,284)  (15,892)
    Acquisition of businesses  (61,092)  (20,526)
    Proceeds from sale of property and equipment  56   194 
    Other, net      
    Net cash used in investing activities  (73,320)  (36,224)
           
    Cash Flows Provided by (Used in) Financing Activities:      
    Proceeds from issuance of long-term debt  411,250   300,000 
    Repayment of long-term debt  (415,856)  (307,668)
    Payment of debt issuance costs  (6,500)  (2,280)
    Taxes withheld and paid on employees' equity awards  (11,480)  (10,399)
    Exercise of stock options  5,952    
    Repurchase of shares of common stock  (9,856)  (14,127)
    Net cash used in financing activities  (26,490)  (34,474)
           
    Cash and Cash Equivalents      
    (Decrease) increase for the period  (10,388)  2,232 
    Beginning of period  330,007   184,807 
    End of period $319,619  $187,039 
           
    Supplemental disclosure of noncash activities:      
    Leased assets obtained in exchange for new operating lease liabilities $20,322  $9,167 
    Accruals for property and equipment  524   496 



    TopBuild Corp.          
    Segment Data (Unaudited)          
    (dollars in thousands)          
               
      Three Months Ended March 31,     
      2021  2020  Change 
    TruTeam          
    Sales $532,753  $475,873   12.0%
               
    Operating profit, as reported $73,636  $60,351     
    Operating margin, as reported  13.8 % 12.7 %   
               
    Acquisition related costs     4     
    COVID-19 pay  489        
    Operating profit, as adjusted $74,125  $60,355     
    Operating margin, as adjusted  13.9 % 12.7 %   
               
    Service Partners          
    Sales $251,601  $214,223   17.4%
               
    Operating profit, as reported $35,385  $24,669     
    Operating margin, as reported  14.1 % 11.5 %   
               
    COVID-19 pay  34        
    Operating profit, as adjusted $35,419  $24,669     
    Operating margin, as adjusted  14.1 % 11.5 %   
               
    Total          
    Sales before eliminations $784,354  $690,096     
    Intercompany eliminations  (41,556)  (36,868)    
    Net sales after eliminations $742,798  $653,228   13.7%
               
    Operating profit, as reported - segments $109,021  $85,020     
    General corporate expense, net  (6,606)  (9,198)    
    Intercompany eliminations  (6,528)  (5,833)    
    Operating profit, as reported $95,887  $69,989     
    Operating margin, as reported  12.9 % 10.7 %   
               
    Rationalization charges  16        
    Acquisition related costs †  753   235     
    Refinancing costs     37     
    COVID-19 pay  523        
    Operating profit, as adjusted $97,179  $70,261     
    Operating margin, as adjusted  13.1 % 10.8 %   
               
    Share-based compensation  3,111   3,908     
    Depreciation and amortization  15,519   14,190     
    EBITDA, as adjusted $115,809  $88,359     
    EBITDA margin, as adjusted  15.6 % 13.5 %   
               
    Sales change period over period  89,570        
    EBITDA, as adjusted, change period over period  27,450        
    Incremental EBITDA, as adjusted, as a percentage of change in sales30.6 %      
               
    † 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,  
      2021  2020  
    Gross Profit and Operating Profit Reconciliations       
            
    Net sales $742,798  $653,228  
            
    Gross profit, as reported $197,759  $171,956  
            
    COVID-19 pay  470     
    Gross profit, as adjusted $198,229  $171,956  
            
    Gross margin, as reported  26.6 %26.3 %
    Gross margin, as adjusted  26.7 %26.3 %
            
    Operating profit, as reported $95,887  $69,989  
            
    Rationalization charges  16     
    Acquisition related costs  753   235  
    Refinancing costs     37  
    COVID-19 pay  523     
    Operating profit, as adjusted $97,179  $70,261  
            
    Operating margin, as reported  12.9 %10.7 %
    Operating margin, as adjusted  13.1 %10.8 %
            
    Income Per Common Share Reconciliation       
            
    Income before income taxes, as reported $75,499  $61,486  
            
    Rationalization charges  16     
    Acquisition related costs  753   235  
    Refinancing costs and loss on extinguishment of debt  13,862   270  
    COVID-19 pay  523     
    Income before income taxes, as adjusted  90,653   61,991  
            
    Tax rate at 26.0%  (23,570)  (16,118) 
    Income, as adjusted $67,083  $45,873  
            
    Income per common share, as adjusted $2.02  $1.37  
            
    Weighted average diluted common shares outstanding  33,202,563   33,599,847  



    TopBuild Corp.       
    Same Branch and Acquisition Net Sales and Adjusted EBITDA (Unaudited)       
    (dollars in thousands)       
            
      Three Months Ended March 31,  
      2021  2020  
    Net sales       
    Same branch:       
    TruTeam $505,297  $475,873  
    Service Partners  251,601   214,223  
    Eliminations  (41,556)  (36,868) 
    Total same branch  715,342   653,228  
            
    Acquisitions (a):       
    TruTeam $27,456  $  
    Service Partners       
    Eliminations       
    Total acquisitions  27,456     
    Total $742,798  $653,228  
            
    EBITDA, as adjusted       
    Same branch $113,132  $88,359  
    Acquisitions (a)  2,677     
    Total $115,809  $88,359  
            
    EBITDA, as adjusted, as a percentage of sales       
    Same branch (b)  15.8 %   
    Acquisitions (c)  9.8 %   
    Total (d)  15.6 % 13.5 %
            
    As Adjusted Incremental EBITDA, as a percentage of change in sales       
    Same branch (e)  39.9 %   
    Acquisitions (c)  9.8 %   
    Total (f)  30.6 %   
            
    (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       
            


    TopBuild Corp.      
    Same Branch and Acquisition Net Sales by Market (Unaudited)   
    (in thousands)      
           
     Three Months Ended March 31,  
     2021 2020 
    Same branch:      
    Residential$556,993 $506,731 
    Commercial 158,349  146,497 
    Same branch net sales 715,342  653,228 
           
    Acquisitions (a):      
    Residential$19,791 $ 
    Commercial 7,665   
    Acquisitions net sales 27,456   
    Total net sales$742,798 $653,228 
           
    (a) Represents current year impact of acquisitions in their first twelve months   
           


    TopBuild Corp.       
    Reconciliation of Adjusted EBITDA to Net Income (Unaudited)    
    (in thousands)       
            
      Three Months Ended March 31,  
      2021 2020 
    Net income, as reported $59,842 $50,771 
    Adjustments to arrive at EBITDA, as adjusted:       
    Interest expense and other, net  6,526  8,270 
    Income tax expense  15,657  10,715 
    Depreciation and amortization  15,519  14,190 
    Share-based compensation  3,111  3,908 
    Rationalization charges  16   
    Acquisition related costs  753  235 
    Refinancing costs and loss on extinguishment of debt  13,862  270 
    COVID-19 pay  523   
    EBITDA, as adjusted $115,809 $88,359 
            


    TopBuild Corp.              
    Acquisition Adjusted Net Sales (Unaudited)            
    (in thousands)              
     2020 2021 Trailing Twelve
    Months Ended
     Q2 Q3 Q4 Q1 March 31, 2021
    Net Sales$646,099 $697,223 $721,487 $742,798 $2,807,607
    Acquisitions proforma adjustment † 32,607  34,823  16,056  3,652  87,138
    Net sales, acquisition adjusted$678,706 $732,046 $737,543 $746,450 $2,894,745
                   
                   
    † Trailing 12 months sales have been adjusted for the pro forma effect of acquired branches


    TopBuild Corp.      
    2021 Estimated Adjusted EBITDA Range (Unaudited)      
    (in millions)      
           
     Twelve Months Ending December 31, 2021 
      Low  High 
    Estimated net income$315.3 $344.6 
    Adjustments to arrive at estimated EBITDA, as adjusted:      
    Interest expense and other, net 23.8  20.8 
    Income tax expense 110.8  121.0 
    Depreciation and amortization 70.9  66.9 
    Share-based compensation 11.2  8.7 
    Estimated EBITDA, as adjusted$532.0 $562.0 
           

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