TopBuild Reports Fourth Quarter and Year-End 2023 Financial Results

Fourth Quarter Highlights

  • Sales increase 1.7% to $1.3 billion
  • Gross margin expands 70 basis points to 30.4%
  • Adjusted EBITDA margin expands 80 basis points to 19.6%

Full Year Highlights

  • Sales increase 3.7% to $5.2 billion
  • Gross margin expands 120 basis points to 30.9%
  • Adjusted EBITDA margin expands 140 basis points to 20.2%

Provides 2024 Sales and Adjusted EBITDA Outlook

DAYTONA BEACH, Fla., Feb. 28, 2024 (GLOBE NEWSWIRE) — TopBuild Corp. (NYSE:BLD), a leading installer and specialty distributor of insulation and related building material products to the construction industry in the United States and Canada today reported results for the fourth quarter and year ended December 31. 2023.

Robert Buck, President and Chief Executive Officer, stated, “Our fourth quarter results cap a year of continuous improvement and profitable growth. We are particularly pleased with the performance of our businesses that serve the commercial and industrial end markets, which grew 4.9% in the fourth quarter and 6.2% for the full year.”

Fourth Quarter Financial Highlights

(comparisons are to the quarter ended December 31, 2022)

3 Months Ended 12/31/23 Reported Change
Sales $1,286,074 1.7%
Gross Margin 30.4% 70 bps
SG&A as % of revenue 14.5% 90 bps
Operating Profit $204,800 0.8%
Operating Margin 15.9% (20 bps)
Net Income $146,382 1.8%
Net Income per diluted share $4.60 1.8%
     
3 Months Ended 12/31/23 Adjusted Change
Sales $1,286,074 1.7%
Gross Margin 30.4% 70 bps
SG&A as % of revenue 13.9% 40 bps
Operating Profit $212,222 3.8%
Operating Margin 16.5% 30 bps
Net Income $149,305 6.6%
Net Income per diluted share $4.69 6.6%
EBITDA $251,641 6.0%
EBITDA Margin 19.6% 80 bps
     

Full Year 2023 Financial Highlights
(comparisons are to the twelve months ended December 31, 2022)

12 Months Ended 12/31/23 Reported Change
Sales $5,194,694 3.7%
Gross Margin 30.9% 120 bps
SG&A as % of revenue 14.0% 20 bps
Operating Profit $878,825 10.2%
Operating Margin 16.9% 100 bps
Net Income $614,254 10.5%
Net Income per diluted share $19.33 12.8%
     
12 Months Ended 12/31/23 Adjusted Change
Sales $5,194,694 3.7%
Gross Margin 30.9% 120 bps
SG&A as % of revenue 13.5% (10 bps)
Operating Profit $900,446 11.9%
Operating Margin 17.3% 120 bps
Net Income $626,857 13.0%
Net Income per diluted share $19.73 15.3%
EBITDA $1,049,160 11.5%
EBITDA Margin 20.2% 140 bps
     

“2023 was another year of consistent performance and solid execution for TopBuild, demonstrating the strength of our unique operating model and our ability to adapt to changing environments,” noted Buck. “Our unrelenting focus on driving operational efficiencies, striving for operational excellence, and improving sales and labor productivity contributed to our solid revenue growth and year-over-year margin expansion.”

Operating Segment Highlights ($ in 000s)
(comparisons are to the periods ended December 31, 2022)

Installation 3 Months
Ended
12/31/23
12 Months
Ended
12/31/23
  Specialty
Distribution
3 Months
Ended
12/31/23
12 Months
Ended
12/31/23
Sales $790,414 $3,188,232   Sales $564,468 $2,268,339
Change       Change    
Volume -3.0% 0.4%   Volume -0.2% -1.6%
Price 2.4% 3.6%   Price 0.5% 1.1%
M&A 5.1% 3.6%   M&A 0.0% 0.0%
Dispositions -0.7% -0.3%   Dispositions 0.0% 0.0%
Total Change 3.8% 7.3%   Total Change 0.2% -0.4%
Operating Margin 19.0% 20.2%   Operating Margin 14.8% 14.6%
Change 40 bps 170 bps   Change 50 bps 30 bps
Adj. Operating Margin 19.0% 20.3%   Adj. Operating Margin 14.8% 14.6%
Change 30 bps 180 bps   Change 40 bps 20 bps
Adj. EBITDA Margin 21.4% 22.5%   Adj. EBITDA Margin 17.5% 17.3%
Change 60 bps 190 bps   Change 80 bps 40 bps
             

Capital Allocation
2023 Acquisitions
The Company acquired four residential insulation installation companies which are expected to generate over $172 million in annual revenue. They are listed in the chart below.

  TTM Revenue at Month
Company Acquired Acquisition ($ millions) Acquired
SRI Holdings $62.0 January
Best Insulation $100.0 July
Rocky Mountain Spray Foam $5.4 July
Panhandle Insulation $5.3 October
Total $172.7  
     

“Acquisitions remain the best use of our capital, generating strong returns for our shareholders. We continue to work diligently on our planned acquisition of SPI. All three of our end-markets are highly fragmented and present great opportunities to reinvest our strong free cash flow to drive shareholder value,” said Buck.

2024 Acquisitions
Year-to-date, the Company has acquired one residential insulation company, Brabble Insulation, and has entered into an agreement to acquire a second residential insulation installer, Morris Black & Sons, which will close on March 1st. Combined, they are expected to generate approximately $9 million of annual revenue. The Company also previously announced that it had entered into an agreement to acquire the assets of Pest Control Insulation, a specialty distribution company focused on blended, customized insulation products, accessories, and equipment for sale exclusively to the pest control industry. In 2023, Pest Control Insulation generated approximately $24 million of revenue. This transaction is also expected to close on March 1st.

2024 Outlook
“We expect 2024 will be another strong year for TopBuild. We see many opportunities in the year ahead to again demonstrate the unique advantages of our operating model and to take advantage of our multiple avenues for growth,” added Buck.

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

2024 Low High
Sales $ 5,360   $ 5,560  
Adjusted EBITDA* $ 1,040   $ 1,130  
             

*See table for adjusted EBITDA reconciliation.

2024 Assumptions  
Residential Revenue Mid Single Digit Growth
Commercial/Industrial Revenue Mid Single Digit Growth
CapEx (% of Sales) 1.5% to 2.0%
Working Capital Goal (% LTM Sales) 12% to 14%
Income Tax Rate 25% to 27%
Incremental Adjusted EBITDA (Organic) 22% to 27%
Incremental Adjusted EBITDA (Acquisitions Year One) 11% to 16%
   

(1) This outlook reflects management’s current view of present and future market conditions and are based on assumptions such as housing starts, general and administrative expenses, 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 most recent Annual Report on Form 10-K and subsequent SEC reports.

Conference Call
A conference call to discuss fourth quarter 2023 financial results is scheduled for today, Wednesday, February 28, 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 related building material products to the construction industry in the United States and Canada. We provide insulation installation services nationwide through our Installation segment which has approximately 240 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 170 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 stock repurchase transactions. These forward-looking statements can be identified by words such as “will,” “would,” “anticipate,” “expect,” “believe,” “designed,” “plan,” “may,” “project,” “estimate” 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
[email protected]
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,
    2023   2022   2023   2022
Net sales   $ 1,286,074     $ 1,264,543     $ 5,194,694     $ 5,008,744  
Cost of sales     894,958       888,871       3,590,874       3,522,025  
Gross profit     391,116       375,672       1,603,820       1,486,719  
                         
Selling, general, and administrative expense     186,316       172,558       724,995       689,555  
Operating profit     204,800       203,114       878,825       797,164  
                         
Other income (expense), net:                        
Interest expense     (19,187 )     (16,779 )     (74,614 )     (56,716 )
Other, net     8,729       1,585       21,272       1,687  
Other expense, net     (10,458 )     (15,194 )     (53,342 )     (55,029 )
Income before income taxes     194,342       187,920       825,483       742,135  
                         
Income tax expense     (47,960 )     (44,086 )     (211,229 )     (186,146 )
Net income   $ 146,382     $ 143,834     $ 614,254     $ 555,989  
                         
Net income per common share:                        
Basic   $ 4.63     $ 4.54     $ 19.44     $ 17.26  
Diluted   $ 4.60     $ 4.52     $ 19.33     $ 17.14  
                         
Weighted average shares outstanding:                        
Basic     31,623,506       31,648,741       31,597,508       32,213,839  
Diluted     31,805,569       31,838,352       31,776,901       32,440,405  
                         
 
TopBuild Corp.
Consolidated Statements of Comprehensive Income
(in thousands)
                             
    Three Months Ended December 31,   Year Ended December 31,
    2023   2022   2023   2022
Net income   $ 146,382     $ 143,834     $ 614,254     $ 555,989  
Other comprehensive income (loss):                            
Foreign currency translation adjustment     4,227       (6,762 )     7,255       (15,286 )
Comprehensive income   $ 150,609     $ 137,072     $ 621,509     $ 540,703  
                             
 
TopBuild Corp.
Consolidated Balance Sheets and Other Financial Data
(dollars in thousands)
    As of December 31,
    2023   2022
ASSETS                
Current assets:                
Cash and cash equivalents   $ 848,565     $ 240,069  
Receivables, net of an allowance for credit losses of $23,948 at December 31, 2023, and $20,014 at December 31, 2022     799,009       836,071  
Inventories     364,731       438,644  
Prepaid expenses and other current assets     36,939       34,257  
Total current assets     2,049,244       1,549,041  
                 
Right of use assets     204,629       205,892  
Property and equipment, net     264,487       253,484  
Goodwill     2,042,568       1,966,994  
Other intangible assets, net     591,058       614,967  
Other assets     10,865       16,453  
Total assets   $ 5,162,851     $ 4,606,831  
                 
LIABILITIES                
Current liabilities:                
Accounts payable   $ 469,585     $ 487,114  
Current portion of long-term debt     47,039       40,068  
Accrued liabilities     187,217       199,370  
Short-term operating lease liabilities     65,780       60,880  
Short-term finance lease liabilities     1,917       2,207  
Total current liabilities     771,538       789,639  
                 
Long-term debt     1,373,028       1,417,257  
Deferred tax liabilities, net     243,930       251,481  
Long-term portion of insurance reserves     58,783       59,783  
Long-term operating lease liabilities     146,213       149,943  
Long-term finance lease liabilities     4,150       6,673  
Other liabilities     1,554       2,349  
Total liabilities     2,599,196       2,677,125  
                 
EQUITY     2,563,655       1,929,706  
Total liabilities and equity   $ 5,162,851     $ 4,606,831  
                 
    As of December 31,
    2023   2022
Other Financial Data                
Receivable days     53       54  
Inventory days     37       45  
Accounts payable days     62       66  
Receivables, net plus inventories less accounts payable   $ 694,155     $ 787,601  
Receivables, net plus inventories less accounts payable as a percent of sales (TTM) †     13.2 %     15.7 %
                 
† 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,
    2023   2022
Cash Flows Provided by (Used in) Operating Activities:          
Net income   $ 614,254     $ 555,989  
Adjustments to reconcile net income to net cash provided by operating activities:            
Depreciation and amortization     132,878       123,335  
Share-based compensation     15,838       12,310  
Loss on sale of assets     2,349       1,833  
Amortization of debt issuance costs     2,881       2,867  
Provision for bad debt expense     6,481       5,510  
Provision for inventory obsolescence     4,794       6,659  
Deferred income taxes, net     (7,476 )     6,041  
Change in certain assets and liabilities:            
Receivables, net     20,812       (169,327 )
Inventories     74,529       (93,874 )
Prepaid expenses and other current assets     (2,598 )     (9,222 )
Accounts payable     (8,867 )     26,581  
Accrued liabilities     (4,444 )     20,703  
Other, net     (2,022 )     6,396  
Net cash provided by operating activities     849,409       495,801  
             
Cash Flows Provided by (Used in) Investing Activities:            
Purchases of property and equipment     (63,998 )     (76,382 )
Acquisition of businesses, net of cash acquired     (149,154 )     (20,500 )
Proceeds from sale of assets     14,982       2,975  
Net cash used in investing activities     (198,170 )     (93,907 )
             
Cash Flows Provided by (Used in) Financing Activities:            
Repayment of long-term debt     (40,138 )     (38,658 )
Proceeds from revolving credit facility           70,000  
Repayment of revolving credit facility           (70,000 )
Taxes withheld and paid on employees’ equity awards     (6,528 )     (11,719 )
Exercise of stock options     3,130       2,028  
Repurchase of shares of common stock           (250,050 )
Payment of contingent consideration     (300 )     (1,674 )
Net cash used in by financing activities     (43,836 )     (300,073 )
Impact of exchange rate changes on cash     1,093       (1,531 )
Net increase in cash and cash equivalents     608,496       100,290  
Cash and cash equivalents – Beginning of period     240,069       139,779  
Cash and cash equivalents – End of period   $ 848,565     $ 240,069  
             
Supplemental disclosure of cash paid for:            
Interest   $ 71,463     $ 49,888  
Income taxes     220,773       186,722  
             
Supplemental disclosure of noncash activities:            
Leased assets obtained in exchange for new operating lease liabilities   $ 56,255     $ 103,997  
Accruals for property and equipment     912       141  
             
 
TopBuild Corp.
Segment Data (Unaudited)
(dollars in thousands)
                                         
    Three Months Ended December 31,         Year Ended December 31,    
    2023
  2022
  Change   2023
  2022   Change
Installation                                        
Sales   $ 790,414     $ 761,261     3.8 %   $ 3,188,232     $ 2,969,978     7.3 %
                                         
Operating profit, as reported   $ 149,999     $ 141,961           $ 644,392     $ 548,795      
Operating margin, as reported     19.0 %     18.6 %           20.2 %     18.5 %    
                                         
Rationalization charges     41       161             1,923       (174 )    
Acquisition related costs     11       23             527       135      
Operating profit, as adjusted   $ 150,051     $ 142,145           $ 646,842     $ 548,756      
Operating margin, as adjusted     19.0 %     18.7 %           20.3 %     18.5 %    
                                         
Share-based compensation     372       339             1,496       1,296      
Depreciation and amortization     18,422       15,869             69,123       62,483      
EBITDA, as adjusted   $ 168,845     $ 158,353     6.6 %   $ 717,461     $ 612,535     17.1 %
EBITDA margin, as adjusted     21.4 %     20.8 %           22.5 %     20.6 %    
                                         
Specialty Distribution                                        
Sales   $ 564,468     $ 563,065     0.2 %   $ 2,268,339     $ 2,278,261     (0.4 )%
                                         
Operating profit, as reported   $ 83,355     $ 80,692           $ 330,938     $ 326,226      
Operating margin, as reported     14.8 %     14.3 %           14.6 %     14.3 %    
                                         
Acquisition related costs           266             350       1,502      
Operating profit, as adjusted   $ 83,355     $ 80,958           $ 331,288     $ 327,728      
Operating margin, as adjusted     14.8 %     14.4 %           14.6 %     14.4 %    
                                         
Share-based compensation     298       104             1,286       1,041      
Depreciation and amortization     15,193       13,184             59,607       56,881      
EBITDA, as adjusted   $ 98,846     $ 94,246     4.9 %   $ 392,181     $ 385,650     1.7 %
EBITDA margin, as adjusted     17.5 %     16.7 %           17.3 %     16.9 %    
                                         
 
TopBuild Corp.
Adjusted EBITDA (Unaudited)
(dollars in thousands)
                                     
    Three Months Ended December 31,         Year Ended December 31,      
    2023   2022   Change   2023   2022   Change
Total net sales                                    
Sales before eliminations   $ 1,354,882     $ 1,324,326           $ 5,456,571     $ 5,248,239        
Intercompany eliminations     (68,808 )     (59,783 )           (261,877 )     (239,495 )      
Net sales after eliminations   $ 1,286,074     $ 1,264,543     1.7 %   $ 5,194,694     $ 5,008,744     3.7 %
                                     
Operating profit, as reported – segments   $ 233,354     $ 222,653           $ 975,330     $ 875,021        
General corporate expense, net     (16,787 )     (9,650 )           (52,067 )     (38,018 )      
Intercompany eliminations     (11,767 )     (9,889 )           (44,438 )     (39,839 )      
Operating profit, as reported   $ 204,800     $ 203,114           $ 878,825     $ 797,164        
Operating margin, as reported     15.9 %     16.1 %           16.9 %     15.9 %      
                                     
Rationalization charges     41       162             1,923       (172 )      
Acquisition related costs †     7,381       1,216             19,698       7,974        
Operating profit, as adjusted   $ 212,222     $ 204,492           $ 900,446     $ 804,966        
Operating margin, as adjusted     16.5 %     16.2 %           17.3 %     16.1 %      
                                     
Share-based compensation     4,757       2,637             15,836       12,310        
Depreciation and amortization     34,662       30,284             132,878       123,335        
EBITDA, as adjusted   $ 251,641     $ 237,413     6.0 %   $ 1,049,160     $ 940,611     11.5 %
EBITDA margin, as adjusted     19.6 %     18.8 %           20.2 %     18.8 %      
                                     
Sales change period over period     21,531                   185,950              
EBITDA, as adjusted, change period over period     14,228                   108,549              
Incremental EBITDA, as adjusted, as a percentage of change in sales     66.1 %                 58.4 %            
                                     
† Acquisition related costs include corporate level adjustments as well as segment operating adjustments
                                     
 
TopBuild Corp.
Same Branch and Acquisition Metrics (Unaudited)
(dollars in thousands)
                         
    Three Months Ended December 31,   Year Ended December 31,
    2023   2022   2023   2022
Net sales                        
Same branch:                        
Installation   $ 751,971     $ 756,330     $ 3,080,770     $ 2,960,926  
Specialty Distribution     564,468       563,065       2,268,339       2,278,261  
Eliminations     (68,808 )     (59,783 )     (261,877 )     (239,495 )
Total same branch   $ 1,247,631     $ 1,259,612     $ 5,087,232     $ 4,999,692  
                         
Acquisitions (a):                        
Installation   $ 38,443     $     $ 107,462     $  
Total acquisitions     38,443             107,462        
                         
Dispositions (b):                        
Installation   $     $ 4,931     $     $ 9,052  
Total dispositions           4,931             9,052  
Total net sales   $ 1,286,074     $ 1,264,543     $ 5,194,694     $ 5,008,744  
                         
EBITDA, as adjusted                        
Same branch   $ 246,769     $ 236,941     $ 1,033,980     $ 939,183  
Acquisitions (a)     4,872             15,180        
Dispositions (b)           472             1,428  
Total   $ 251,641     $ 237,413     $ 1,049,160     $ 940,611  
                         
EBITDA, as adjusted, as a percentage of sales                        
Same branch (c)     19.8 %           20.3 %      
Acquisitions (d)     12.7 %           14.1 %      
Total (e)     19.6 %     18.8 %     20.2 %     18.8 %
                         
As Adjusted Incremental EBITDA, as a percentage of change in sales                        
Same branch (f)     NM             108.3 %      
Acquisitions (d)     12.7 %           14.1 %      
Total (g)     66.1 %           58.4 %      
                         
(a) Represents current year impact of acquisitions in their first twelve months
(b) Represents operating results in prior period previously classified as same branch, including $4,121 net sales and $956 EBITDA, as adjusted, in the third quarter of 2022, respectively
(c) Same branch metric, as adjusted, as a percentage of same branch sales
(d) Acquired metric, as adjusted, as a percentage of acquired sales
(e) Total EBITDA, as adjusted, as a percentage of total sales
(f) Change in same branch EBITDA, as adjusted, as a percentage of change in same branch sales
(g) Change in total EBITDA, as adjusted, as a percentage of change in total sales
NM Not Meaningful
                         
 
TopBuild Corp.
Non-GAAP Reconciliations (Unaudited)
(in thousands, except share and per common share amounts)
                         
    Three Months Ended December 31,   Year Ended December 31,
    2023   2022   2023   2022
Gross Profit Reconciliation                        
                         
Net sales   $ 1,286,074     $ 1,264,543     $ 5,194,694     $ 5,008,744  
                         
Gross profit, as reported   $ 391,116     $ 375,672     $ 1,603,820     $ 1,486,719  
                         
Acquisition related costs           15             135  
Gross profit, as adjusted   $ 391,116     $ 375,687     $ 1,603,820     $ 1,486,854  
                         
Gross margin, as reported     30.4 %     29.7 %     30.9 %     29.7 %
Gross margin, as adjusted     30.4 %     29.7 %     30.9 %     29.7 %
                         
Selling, General and Administrative Expense Reconciliation                        
                         
Selling, general, and administrative expense, as reported   $ 186,316     $ 172,558     $ 724,995     $ 689,555  
                         
Rationalization charges     41       162       1,923       (172 )
Acquisition related costs     7,381       1,201       19,698       7,839  
Selling, general, and administrative expense, as adjusted   $ 178,894     $ 171,195     $ 703,374     $ 681,888  
                         
Operating Profit Reconciliation                        
                         
Operating profit, as reported   $ 204,800     $ 203,114     $ 878,825     $ 797,164  
                         
Rationalization charges     41       162       1,923       (172 )
Acquisition related costs     7,381       1,216       19,698       7,974  
Operating profit, as adjusted   $ 212,222     $ 204,492     $ 900,446     $ 804,966  
                         
Operating margin, as reported     15.9 %     16.1 %     16.9 %     15.9 %
Operating margin, as adjusted     16.5 %     16.2 %     17.3 %     16.1 %
                         
Income Per Common Share Reconciliation                        
                         
Income before income taxes, as reported   $ 194,342     $ 187,920     $ 825,483     $ 742,135  
                         
Rationalization charges     41       162       1,923       (172 )
Acquisition related costs     7,381       1,216       19,698       7,974  
Income before income taxes, as adjusted     201,764       189,298       847,104       749,937  
                         
Tax rate at 26.0%     (52,459 )     (49,217 )     (220,247 )     (194,984 )
Income, as adjusted   $ 149,305     $ 140,081     $ 626,857     $ 554,953  
                         
Income per common share, as adjusted   $ 4.69     $ 4.40     $ 19.73     $ 17.11  
                         
Weighted average diluted common shares outstanding     31,805,569       31,838,352       31,776,901       32,440,405  
                         
 
TopBuild Corp.
Reconciliation of Adjusted EBITDA to Net Income (Unaudited)
(in thousands)
                             
    Three Months Ended December 31,   Year Ended December 31,
    2023   2022   2023   2022
Net income, as reported   $ 146,382     $ 143,834     $ 614,254     $ 555,989  
Adjustments to arrive at EBITDA, as adjusted:                            
Interest expense and other, net     10,458       15,194       53,342       55,029  
Income tax expense     47,960       44,086       211,229       186,146  
Depreciation and amortization     34,662       30,284       132,878       123,335  
Share-based compensation     4,757       2,637       15,836       12,310  
Rationalization charges     41       162       1,923       (172 )
Acquisition related costs     7,381       1,216       19,698       7,974  
EBITDA, as adjusted   $ 251,641     $ 237,413     $ 1,049,160     $ 940,611  
                             
Proforma acquisition EBITDA(a)                   $ 6,251        
Proforma disposition EBITDA(b)                     (3,040 )      
Proforma TTM EBITDA, as adjusted                   $ 1,052,371        
                             
(a) Represents the trailing twelve months proforma impact of acquisitions completed in 2023
(b) Represents the trailing twelve months proforma impact of dispositions completed in 2023
                             
 
TopBuild Corp.
Acquisition Adjusted Net Sales (Unaudited)
(in thousands)
  2023   Year Ended
  Q1   Q2   Q3   Q4   December 31, 2023
Net sales $ 1,265,238     $ 1,317,262     $ 1,326,120     $ 1,286,074     $ 5,194,694  
Acquisitions proforma adjustment †   31,847       26,978       5,400       55       64,280  
Net sales, acquisition adjusted $ 1,297,085     $ 1,344,240     $ 1,331,520     $ 1,286,129     $ 5,258,974  
                                       
                                       
† Trailing 12 months sales have been adjusted for the pro forma effect of acquired branches
                                       
 
TopBuild Corp.
Net Sales by Market (Unaudited)
(in thousands)
    Three Months Ended December 31,   Year Ended December 31,
    2023   2022   2023   2022
Residential   $ 830,915     $ 830,789     $ 3,350,003     $ 3,272,001  
Commercial/Industrial     455,159       433,754       1,844,691       1,736,743  
Total net sales   $ 1,286,074     $ 1,264,543     $ 5,194,694     $ 5,008,744  
                                 
 
TopBuild Corp.
2024 Estimated Adjusted EBITDA Range (Unaudited)
(in millions)
               
  Twelve Months Ending December 31, 2024
  Low
  High
Estimated net income, as reported $ 588.0     $ 667.0  
Adjustments to arrive at estimated EBITDA, as adjusted:            
Interest expense and other, net   60.0       54.0  
Income tax expense   206.0       234.0  
Depreciation and amortization   140.0       135.0  
Share-based compensation   21.0       18.0  
Acquisition related costs   25.0       22.0  
Estimated EBITDA, as adjusted $ 1,040.0     $ 1,130.0  
               

 


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