Topbuild Corp. · NYSE:BLD
Topbuild — Q1 2022 Earnings Presentation
25 slides from Topbuild's earnings presentation, May 5, 2022
Slide 1: First Quarter
FIRST QUARTER Robert Buck, President & CEO Rob Kuhns, CFO May 5, 2022
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: TopBuild At-a-Glance
TOPBUILD AT-A-GLANCE* SPIN-DATE (from Masco) HEADQUARTERS MARKET-CAP U.S. EMPLOYEES June 30, 2015 Daytona Beach, FL $6.1B 13,000+ Revenue by Segment Revenue by Product Mix Revenue by Business Mix Other Industrial Glass 9% 9% Specialty 4% Distribution Gutters 6% Commercial 42% 28% 58% 63% Installatio
Slide 4: ESG Update
ESG UPDATE ▪ Our business is inherently environmentally friendly • Insulation products we install and distribute significantly enhance energy efficiency • Provide building science solutions through TopBuild Home Services Group ▪ Formal ESG sustainability program in place ▪ Expanding disclosures over
Slide 5: Our Business Model
OUR BUSINESS MODEL Core Strengths Our Values • Focus on safety and employee well-being • Flexible business model, enabling us to quickly adapt to changing market conditions • Unrivaled scale and footprint, creating a strong supply chain ensuring we can meet customer demand • Operational excellence f
Slide 6: First Quarter Financial Highlights
FIRST QUARTER FINANCIAL HIGHLIGHTS* Adjusted ▪ 57.4% sales increase ▪ 28.3% gross margin, up 160 bps ▪ 14.3% operating margin, up 120 bps ▪ 17.3% EBITDA margin, up 170 bps Same Branch, Adjusted ▪ 18.7% sales increase ▪ 29.6% gross margin, up 290 bps ▪ 16.4% operating margin, up 330 bps ▪ 18.7% EBITD
Slide 7: Business Update
BUSINESS UPDATE ▪ Supply chain disruptions and labor shortages continue to impact entire construction industry ▪ Building cycle elongated for residential and commercial projects • Gap continues to widen between housing starts and completions ▪ Demand for residential housing remains strong despite ri
Slide 8: Capital Allocation
CAPITAL ALLOCATION ▪ Four acquisitions completed year-to-date • Residential insulation • Residential insulation • Residential insulation • Residential insulation and glass and mirrors • $6.5M annual revenue • $2.0M annual revenue • $5.5M annual revenue • $1.7M annual revenue ▪ Announced $100M ASR ▪
Slide 9: Financial Overview
FINANCIAL OVERVIEW ($ in 000s except per share amounts) Three Months Ended March 31, 2022 Comparisons are to the quarter ended March 31, 2021 Sales $1,168,918 Change 57.4% Adjusted Operating Profit* $167,503 Change 72.4% Adjusted Operating Margin* 14.3% Change 120 bps Adjusted EBITDA* $201,729 Chang
Slide 10: Capex, Working Capital & Cash Flow
CAPEX, WORKING CAPITAL & CASH FLOW $ in 000s Three Months Ended Three Months Ended March 31, 2022 March 31, 2021 CAPEX $18,413 $12,284 Operating Cash Flow $89,483 $89,422 March 31, 2022 December 31, 2021 Cash Balance $126,553 $139,779 March 31, 2022 March 31, 2021 Working Capital % to 14.8% 10.2% TT
Slide 11: Leverage
LEVERAGE $ in millions Total Debt $1,503.7 ▪ $430.1M available on $500M Revolver Less Cash $126.6 ▪ Significant room under Net Debt $1,377.1 debt covenants TTM Adj. EBITDA* $746.4 Leverage 1.84x STRONG BALANCE SHEET…AMPLE LIQUIDITY * See Appendix for Reconciliation 11
Slide 12: Installation
INSTALLATION Three Months Ended ($ in 000s) March 31, 2022 Sales $676,693 Y-O-Y Change 27.0% Adjusted Operating Profit* $113,232 Y-O-Y Change 52.8% Adjusted Operating Margin* 16.7% Y-O-Y Change 280 bps Adjusted EBITDA Margin* 19.1% Y-O-Y Change 270 bps SOLID GROWTH AND MARGIN EXPANSION * See Appendi
Slide 13: Specialty Distribution
SPECIALTY DISTRIBUTION Three Months Ended ($ in 000s) March 31, 2022 Sales $543,862 Y-O-Y Change 116.2% Adjusted Operating Profit* $70,661 Y-O-Y Change 99.5% Adjusted Operating Margin* 13.0% Y-O-Y Change (110) bps Adjusted EBITDA Margin* 15.6% Y-O-Y Change 60 bps DI INTEGRATION ON SCHEDULE * See App
Slide 14: 2022 Team Goals
2022 TEAM GOALS ▪ Striving for ZERO safety incidents ▪ Successfully integrating Distribution International ▪ Acquiring insulation focused installation and specialty distribution companies which serve one or more of our three end-markets ▪ Expanding our efforts to think differently in order to: • Sim
Slide 15: 2022 Outlook
2022 OUTLOOK (as of May 5, 2022) SALES ASSUMPTIONS (in millions) End-Markets $4,650M to $4,800M Low to Mid Single Digit Volume Depreciation & Amortization Share Based Compensation $121.0 to $126.1 $10.5 to $13.0 Growth ADJUSTED EBITDA* Interest Expense & other, net Income Tax Expense Acquisition Rel
Slide 16: Appendix
oN a APPENDIX
Slide 17: Adjusted EBITDA Reconciliation
ADJUSTED EBITDA RECONCILIATION (unaudited) ($ in 000s) Three Months Ended March 31, 2022 2021 Net income, as reported $ 114,711 $ 59,842 Adjustments to arrive at EBITDA, as adjusted: Interest expense and other, net 11,282 6,526 Income tax expense 37,961 15,657 Depreciation and amortization 30,499 15
Slide 18: Segment Data
SEGMENT DATA (unaudited) ($ in 000s) Three Months Ended March 31, 2022 2021 Change Installation Sales $ 676,693 $ 532,753 27.0 % Operating profit, as reported $ 112,679 $ 73,636 Operating margin, as reported 16.7 % 13.8 % Rationalization charges 473 — Acquisition related costs 80 — COVID-19 pay — 48
Slide 19: Margin Reconciliation
MARGIN RECONCILIATION (unaudited) ($ in 000s) Three Months Ended March 31, 2022 2021 Gross profit, as reported $ 331,201 $ 197,759 Gross margin, as reported 28.3 % 26.6 % Acquisition related costs 121 — COVID-19 pay — 470 Gross profit, as adjusted $ 331,322 $ 198,229 Gross margin, as adjusted 28.3 %
Slide 20: Same Branch and Acquisition Metrics
SAME BRANCH AND ACQUISITION METRICS (unaudited) ($ in 000s) Three Months Ended March 31, 2022 2021 Net Sales Same branch $ 881,865 $ 742,798 Acquisitions (a) 287,053 — Total $ 1,168,918 $ 742,798 Gross profit, as adjusted Same branch $ 261,115 $ 198,229 Acquisitions (a) 70,207 — Total $ 331,322 $ 19
Slide 21: Same Branch and Acquisition Metrics
SAME BRANCH AND ACQUISITION METRICS (unaudited) ($ in 000s) Three Months Ended March 31, 2022 2021 EBITDA, as adjusted Same branch $ 164,769 $ 115,809 Acquisitions (a) 36,960 — Total $ 201,729 $ 115,809 EBITDA, as adjusted, as a percentage of sales Same branch (b) 18.7 % Acquisitions (c) 12.9 % Tota
Slide 22: Income Per Common Share Reconciliation
INCOME PER COMMON SHARE RECONCILIATION (unaudited) ($ in 000s except share and per common share amounts) Three Months Ended March 31, 2022 2021 Income before income taxes, as reported $ 152,672 $ 75,499 Rationalization charges 473 16 Acquisition related costs 3,076 753 Refinancing costs and loss on
Slide 23: Acquisition Adjusted Net Sales
ACQUISITION ADJUSTED NET SALES (unaudited) ($ in 000s) Trailing Twelve 2021 2022 Months Ended Q2 Q3 Q4 Q1 March 31, 2022 Net Sales $ 834,255 845,757 1,063,398 1,168,918 $ 3,912,328 † Acquisitions proforma adjustment 220,993 229,760 47,430 2,035 500,219 Net sales, acquisition adjusted $ 1,055,248 $ 1
Slide 24: Reconciliation Guidance Table
RECONCILIATION GUIDANCE TABLE (unaudited) ($ in 000,000) Twelve Months Ending December 31, 2022 Low High Estimated net income $ 447.6 $ 495.4 Adjustments to arrive at estimated EBITDA, as adjusted: Interest expense and other, net 56.0 52.0 Income tax expense 157.3 174.1 Depreciation and amortization
Slide 25: TopBuild
4 TopBuild