Installed Building Products, Inc. · NYSE:IBP
Installed Building Products — Debt Investor Presentation (March 2017)
36 slides from Installed Building Products's debt investor presentation, March 2017
Slide 1: Public Lender Presentation
PUBLIC LENDER PRESENTATION March 2017
Slide 2: Disclaimer
Disclaimer This presentation is being delivered on behalf of Installed Building Products, Inc. (the “Company”). The sole purpose of this presentation is to provide information in connection with the Company’s proposed refinancing. This presentation does not purport to be all-inclusive or to contain
Slide 3: Presenters
Presenters Presenter Title Company Michael Miller Executive VP & Chief Financial Officer Jason Niswonger Senior VP, Finance & Investor Relations Jeff Hire President, External Affairs Andrew Schwartz Leveraged Finance Taryn Schott Leveraged Finance Capital Markets PAGE 3
Slide 4: Table of Contents
Table of Contents I Transaction Overview 2 II IBP Company Overview III Credit Highlights IV Historical Financial Performance V Appendix PAGE 4
Slide 5: Transaction Overview
TRANSACTION OVERVIEW SECTION I
Slide 6: Executive Summary
Executive Summary Introduction • Installed Building Products, Inc. (“IBP” or the “Company”) is the second largest new residential insulation installer in the U.S. with over 125 locations serving all 48 continental states and the District of Columbia – #1 or #2 market position for new single-family i
Slide 7: Refinancing Overview
Refinancing Overview ($ in millions) Sources & Uses of Funds Sources of Funds Uses of Funds ABL Revolver ($100 MM) $- Refinance Pro Rata Term Debt $220 Term Loan B 300 Cash to Balance Sheet 70 Fees & Expenses 10 Total Sources $300 Total Uses $300 Pro Forma Capitalization Current Pro Forma Refinancin
Slide 8: Financing Timeline
Financing Timeline March 2017 April 2017 S M T W T F S S M T W T S F 1 2 3 4 1 5 6 7 8 9 10 11 2 3 4 5 6 7 8 12 13 14 15 16 17 18 9 10 11 12 13 14 15 19 20 21 22 23 24 25 16 17 18 19 20 21 22 26 27 28 29 30 31 23 24 25 26 27 28 29 30 - Key Dates Date Event March 21st Lenders’ Meeting March 31st Comm
Slide 9: IBP Company Overview
IBP COMPANY OVERVIEW SECTION II
Slide 10: Leading Platform with Proven Track Record of Growth
Leading Platform with Proven Track Record of Growth Company Overview 2016 Pro Forma Net Revenue1 Breakdown By Product By End-Market • IBP is the second largest new residential insulation installer in New Multi- the U.S. with over 125 locations serving all 48 continental Rain Gutters Other Family 4%
Slide 11: Local Presence on a National Scale
Local Presence on a National Scale IBP is the second largest1 new residential insulation installer in the US with a national platform consisting of over 125 locations serving all 48 continental states and the District of Columbia National Scale Local Presence is served by 39 different IBP branches n
Slide 12: Insulation is a Critical Building Product
Insulation is a Critical Building Product Insulation represents a small portion of total construction costs and has had a stable pricing history Single-Family Home Construction Cost IBP Offers a Wide Range of Insulation Materials • Made of fibrous glass held together by a Insulation thermoset resin
Slide 13: Benefits of a Unique Value Chain Structure
Benefits of a Unique Value Chain Structure Scale provides a direct link between manufacturers and builders through a streamlined value chain Building Products Manufacturer Insulation Manufacturer INSULATION VALUE CHAIN TYPICAL VALUE CHAIN Distributor Wholesaler or Retailer Purchasing / Logistics / I
Slide 14: Significant Advantages vs. Key Competitors
Significant Advantages vs. Key Competitors IBP1 TopBuild2 USI2 Rain Gutters Other Show er Doors, 4% 6% Shelving, & Service Partners Construction Mirrors (Distribution) Services 5% 37% 30% Product Garage Doors Breakdown 5% TruTeam Waterproofing (Installation) Insulation Insulation Installation 8% 72%
Slide 15: Recent Alpha Acquisition
Recent Alpha Acquisition 1 Alpha Overview Acquisition Rationale • Alpha represents IBP’s largest acquisition to date Increased end-markets diversification into large 1 commercial construction opportunities – 2016 Net Revenue: $106 million – 2016 EBITDA2: $20 million (19.2% margin) Expands capabiliti
Slide 16: Experienced, Execution Oriented Management Team with Successful Track Record
Experienced, Execution Oriented Management Team with Successful Track Record ($ in millions) Name / Position Years w/ IBP Prior Experience Significant Performance Enhancements Net Revenue Adj. EBITDA1 Adj. EBITDA1 Margin Jeffrey Edwards Over 25 years of experience in the $130 13% $1,004 President, C
Slide 17: Credit Highlights
CREDIT HIGHLIGHTS SECTION III
Slide 18: Key Credit Highlights
Key Credit Highlights 1 Platform Positioned to Benefit from the Construction Recovery 2 Critical Position in Attractive Industry 3 Strong Supplier & Customer Relationships 4 Multi-Pronged Strategy to Drive Growth & Profitability 5 Track Record of Successful Acquisitions and Proven Integration 6 Asse
Slide 19: Platform Positioned to Benefit from the Construction Recovery
Platform Positioned to Benefit from the 1 Construction Recovery Key end-markets poised for sustained growth IBP End-Market Mix Total Housing Starts (thousands of starts) Single and Multi-Family 1,956 2,068 1,801 2016 - 2018E CAGR: 7.2% 1,355 1,260 1,350 906 925 1,003 1,112 1,174 609 781 554 587 9% 6
Slide 20: Critical Position in Attractive Industry
2 Critical Position in Attractive Industry IBP serves an irreplaceable role in the supply chain North American Insulation Homebuilders by Closing Manufacturers (2015) 4% 3% 2% 20% 1% 40% Primary link between a 1% concentrated Other Top 100 14% 20% manufacturer base and a Regional & highly fragmented
Slide 21: Strong Supplier & Customer Relationships
3 Strong Supplier & Customer Relationships Key strategic relationships with manufacturers and an attractive, diversified customer base Strategic Supplier Base Diversified Customer Base Top 5 Customers 12% Other 46% Top 5 Suppliers 54% Other 88% • Predominately purchases materials direct from manufac
Slide 22: Multi-Pronged Strategy to Drive Growth & Profitability
4 Multi-Pronged Strategy to Drive Growth & Profitability Long track record of outpacing the market and gaining market share Improved Operating Acquiror of Choice Building Energy Codes Commercial Insulation Leverage #2 national player with 27% Adoption of new building codes Market potential is sizabl
Slide 23: Track Record of Successful Acquisitions and Proven Integration
5 Track Record of Successful Acquisitions and Proven Integration Undisputed acquiror of choice with over 115 successfully integrated acquisitions Proven M&A Playbook (# of acquisitions) • Ability to realize synergies within scalable infrastructure 54 • Target profitable markets • Acquire operations
Slide 24: Asset-Lite Business Model with Strong Free Cash Flow
6 Asset-Lite Business Model with Strong Free Cash Flow Strong free cash flow provides the ability to quickly de-lever • Combination of Adjusted EBITDA1 growth and limited capital requirements has allowed IBP to complete over 115 acquisitions while maintaining an attractive leverage profile Cumulativ
Slide 25: Conservative Capital Structure
7 Conservative Capital Structure IBP is well-capitalized and positioned for continued growth • Total leverage has trended down even as IBP has been active with strategic acquisition opportunities • Adjusted EBITDA2 growth leads to strong coverage metrics • Pro-forma net leverage and interest coverag
Slide 26: Historical Financial Performance
HISTORICAL FINANCIAL PERFORMANCE SECTION IV
Slide 27: Pro Forma Historical Net Revenue Performance
Pro Forma Historical Net Revenue Performance • Overall growth driven by increased market share with strong organic performance and acquisitions – Market share has increased from 5% in 2005 to 27% in 2016, driven by successful acquisitions and strong organic growth – IBP has grown organically by $186
Slide 28: Historical Cost Structure
Historical Cost Structure ($ in millions) Cost of Goods Sold Operating Expenses • Cost of Goods Sold has decreased as a % of revenue since 2013 • Total operating expenses continue to decrease as a percentage of driven by improved direct labor efficiency, lower fuel prices, product revenue as certain
Slide 29: Organic Financial Performance
Organic Financial Performance • IBP’s revenue has grown 50% organically since 2013 driven by a continued recovery in the U.S. housing market coupled with increased revenue per completion and local market share gains – U.S. housing market has grown from 925 total starts in 2013 to 1,166k total starts
Slide 30: 2016 Pro Forma Net Revenue and Adj. EBITDA Bridge
2016 Pro Forma Net Revenue and Adj. EBITDA 1 Bridge IBP completed 10 acquisitions from January 2016 – January 2017 for a weighted- average purchase price of 5.8x LTM EBITDA # Acquisition Date 1 Key Insulation January 25, 2016 2 Marshall Insulation February 2, 2016 3 Kern Door Company February 29, 20
Slide 31: Appendix
APPENDIX SECTION V
Slide 32: Summary Terms & Conditions: ABL Revolver
Summary Terms & Conditions: ABL Revolver Borrower Installed Building Products, Inc. (the “Borrower”) Guarantors Guaranteed by each of the Borrower’s material direct and indirect domestic subsidiaries, with certain exceptions to be agreed Security 1st priority lien on the Borrower and Guarantors’ acc
Slide 33: Summary Terms & Conditions: Term Loan B
Summary Terms & Conditions: Term Loan B Borrower Installed Building Products, Inc. (the “Borrower”) Guarantors All current and future domestic material subsidiaries of the borrower, subject to certain exceptions Security 1st lien on all the capital stock and substantially all tangible and intangible
Slide 34: Pro Forma Organizational Structure
Pro Forma Organizational Structure $100 million ABL Revolver Installed Building Products Inc. $300 million Term Loan B IBPHL A Holding IBPHL B Holding IBPHL II-A Holding IBPHL II-B Holding Company, Inc. Company, Inc. Company, Inc. Company, Inc. IBP Corporation IBP Holdings, EMPER Holdings, IBP Holdi
Slide 35: Historical EBITDA Reconciliation
Historical EBITDA Reconciliation ($ in millions) Years Ended December 31, Notes 2013 2014 2015 2016 Net (loss) income 6 14 27 38 Interest expense 2 3 4 6 Provision for income taxes 1 4 9 15 21 Depreciation and amortization 12 15 23 35 Gain on bargain purchase - - (1) - EBITDA $24 $41 $68 $101 Legal
Slide 36: Historical EBITDA Reconciliation Notes
Historical EBITDA Reconciliation Notes 1. 1 Excludes income taxes related to discontinued operations. 2. 2 Includes settlement expenses related to two lawsuits against us that were settled in January and February 2014, which were included in administrative expenses for the year ended December 31, 20
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