Slide 1: Fourth Quarter 2020
2020 Fourth QUARTER Robert Buck, President & CEO John Peterson, CFO February 23, 2021
Slide 2: Safe Harbor
SAFE HARBOR Statements contained herein reflect our views about future periods, including our future plans and performance, constitute “forward- looking statements” under the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as “will,” “woul
Slide 3: Business Update
BUSINESS UPDATE ▪ Residential • Builders reporting record-setting order growth • Long-term industry fundamentals positive • Historically low interest rates • Increasing household formations • Low inventory • COVID-19 Impacts • Buyers looking to escape dense urban environments • Work from home polici
Slide 4: Full Year 2020 Financial Highlights
FULL YEAR 2020 FINANCIAL HIGHLIGHTS* ▪ 3.6% net sales increase ▪ 27.5% gross margin, up 150 bps ▪ 13.2% adjusted operating margin, up 200 bps ▪ 16.1% adjusted EBITDA margin, up 240 bps ▪ 32.6% increase in adjusted EPS to $7.28 per diluted share BUSINESS MODEL EXECUTING WELL * See slide 15-18 for GAA
Slide 5: Capital Allocation
CAPITAL ALLOCATION ▪ Three acquisitions completed in 2020 • Garland Insulating • Residential and light commercial insulation, $60M annual revenue • Hunter Insulation • Residential insulation, $10M annual revenue • Cooper Glass • Commercial glass, $9M annual revenue ▪ First 2021 acquisition completed
Slide 6: Industry Trends Extending Build Cycle
INDUSTRY TRENDS EXTENDING BUILD CYCLE MATERIAL CONSTRAINED LABOR CONSTRAINED ▪ All trades experiencing constrained capacity ▪ “Friends and Family” referral program successful and rising prices • Added several hundred installers 2H 2020 ▪ Additional fiberglass capacity coming online ▪ Improving insta
Slide 7: 2021 Team Goals
2021 TEAM GOALS Focused on: ▪ Driving organic growth ▪ Successfully integrating acquisitions into our family of companies ▪ Expanding our efforts to think differently in order to: • Simplify processes • Leverage fixed overhead • Manage expenses • Improve productivity ▪ Developing and building the ta
Slide 8: Financial Overview
FINANCIAL OVERVIEW ($ in 000s except per share Three Months Ended Twelve Months Ended amounts) December 31, 2020 December 31, 2020 Sales $721,487 $2,718,038 Y-O-Y Change 8.9% 3.6% Adjusted Operating Profit* $103,975 $359,423 Y-O-Y Change 35.7% 22.8% Adjusted Operating Margin* 14.4% 13.2% Y-O-Y Chang
Slide 9: CAPEX, Working Capital & Cash Flow
CAPEX, WORKING CAPITAL & CASH FLOW $ in 000s Twelve Months Ended Twelve Months Ended December 31, 2020 December 31, 2019 CAPEX $40,938 $45,536 Operating Cash Flow $357,884 $271,777 December 31, 2020 December 31, 2019 Cash Balance $330,007 $184,807 December 31, 2020 December 31, 2019 Working Capital
Slide 10: Leverage
LEVERAGE $ in millions Total Debt $714.2 ▪ $389.6M available on $450M Revolver Less Cash 330.0 ▪ Significant room under Net Debt $384.2 debt covenants TTM Adj. EBITDA* $436.7 Leverage 0.88x STRONG BALANCE SHEET…AMPLE LIQUIDITY * See slide 15 for adjusted EBITDA reconciliation 10
Slide 11: Operational Excellence Driving Strong Margin Expansion
($ in 000s) Three Months Ended Twelve Months Ended December 31, 2020 December 31, 2020 Sales $508,812 $1,943,461 Y-O-Y Change 6.9% 1.9% Adjusted Operating Profit* $82,020 $296,941 Y-O-Y Change 28.5% 16.9% Adjusted Operating Margin* 16.1% 15.3% Y-O-Y Change 270 bps 200 bps OPERATIONAL EXCELLENCE DRIV
Slide 12: Robust Sales Growth, Strong Margin Expansion
($ in 000s) Three Months Ended Twelve Months Ended December 31, 2020 December 31, 2020 Sales $251,535 $926,207 Y-O-Y Change 12.7% 7.4% Adjusted Operating Profit* $33,752 $116,216 Y-O-Y Change 33.8% 28.4% Adjusted Operating Margin* 13.4% 12.5% Y-O-Y Change 210 bps 200 bps ROBUST SALES GROWTH…STRONG M
Slide 13: 2021 Outlook
2021 Outlook SALES 3-YEAR TARGETS 7.5% to 10.0% 11.0% to 16.0% Commercial Annual Same $3,050M to $3,150M Branch Revenue Growth Incremental EBITDA % (M&A) 9.5% to 10.5% 22.0% to 27.0% Working Capital (% of Sales) Incremental EBITDA % (Organic) ADJUSTED EBITDA* 2.0% 26.0% Capex (% of Sales) Normalized
Slide 14: Appendix
oN a APPENDIX
Slide 15: Adjusted EBITDA Reconciliation
ADJUSTED EBITDA RECONCILIATION ($ in 000s) Three Months Ended December 31, Year Ended December 31, 2020 2019 2020 2019 Net income, as reported $ 70,757 $ 45,985 $ 247,023 $ 190,995 Adjustments to arrive at EBITDA, as adjusted: Interest expense and other, net 7,660 8,517 31,723 35,745 Income tax expe
Slide 16: Segment GAAP to Non-GAAP Reconciliation
SEGMENT GAAP TO NON-GAAP RECONCILIATION ($ in 000s) Three Months Ended December 31, Year Ended December 31, 2020 2019 Change 2020 2019 Change TruTeam Sales $ 508,812 $ 475,929 6.9 % $ 1,943,461 $ 1,906,730 1.9 % Operating profit, as reported $ 81,657 $ 63,661 $ 294,793 $ 253,230 Operating margin, as
Slide 17: Income per Common Share Reconciliation
INCOME PER COMMON SHARE RECONCILIATION ($ in 000s) Three Months Ended December 31, Year Ended December 31, 2020 2019 2020 2019 Income before income taxes, as reported $ 95,417 $ 67,904 $ 323,090 $ 253,778 Rationalization charges (4) 15 2,097 1,992 Acquisition related costs 518 166 855 1,200 Refinanc
Slide 18: Same Branch and Acquisition Net Sales Reconciliation
SAME BRANCH AND ACQUISITION NET SALES RECONCILIATION ($ in 000s) Three Months Ended December 31, Year Ended December 31, 2020 2019 2020 2019 Same branch: Residential $ 550,960 $ 512,715 $ 2,104,233 $ 2,016,016 Commercial 149,308 149,364 576,356 608,105 Same branch net sales 700,268 662,349 2,680,589
Slide 19: Reconciliation Guidance Table
Reconciliation Guidance Table ($ in 000,000) Twelve Months Ending December 31, 2021 Low High Estimated net income $ 291.9 $ 321.2 Adjustments to arrive at estimated EBITDA, as adjusted: Interest expense and other, net 31.7 28.7 Income tax expense 102.6 112.8 Depreciation and amortization 67.0 63.0 S
Slide 20: TopBuild
4 TopBuild