TopBuild Reports Fourth Quarter and Full Year 2021 Results

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 12/31/21	12 Months Ended 12/31/21		Specialty Distribution	3 Months Ended 12/31/21	12 Months Ended 12/31/21
Sales	$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