• TopBuild Reports Third Quarter Results

    المصدر: Nasdaq GlobeNewswire / 05 نوفمبر 2024 05:45:01   America/Chicago

    Third quarter sales of $1.37 billion driven by 4.2% Installation growth and 5.1% Specialty Distribution growth

    Delivered gross margin of 30.7% and adjusted EBITDA margin of 20.8%

    Narrows 2024 guidance to $5.3 to $5.35 billion in revenue and $1.055 to $1.085 billion in adjusted EBITDA

    DAYTONA BEACH, Fla., Nov. 05, 2024 (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 third quarter ended September 30, 2024.

    “We delivered a strong performance with third quarter sales of $1.37 billion and adjusted EBITDA of $285 million, achieving the highest level of quarterly sales and profit in our history,” said Robert Buck, President and Chief Executive Officer. “Our ongoing focus on growth and profitability enabled us to drive Installation sales growth of 4.2% and Specialty Distribution sales growth of 5.1% in a macro environment that was largely unchanged from the second quarter. Adjusted EBITDA margin of 20.8% improved by 50 basis points excluding the benefit from higher-than-normal multi-family and commercial margins in the third quarter of 2023.1

    “We are narrowing our 2024 outlook based on our assumptions for a continued uneven housing environment and the ongoing delay of certain commercial/industrial projects. We remain optimistic about our business with strengthening requirements for energy efficiency, the U.S. housing supply deficit, increasing household formations, and the prospect of lower interest rates driving growth.

    “Our priority for our strong free cash flow continues to be acquisitions and our M&A pipeline is very healthy. In the quarter we also returned capital to shareholders, with share repurchases totaling $413.9 million or approximately 1.07 million shares, reinforcing our confidence in our outlook and ability to deploy capital successfully and generate strong returns,” concluded Mr. Buck.

    1 The Company noted that its results for the third quarter of 2023 included an estimated $15 million margin benefit related to certain multi-family/commercial business.

    Financial Highlights
    (comparisons are to the periods ended September 30, 2023)

    Three Months Ended September 30, 2024    
     Reported Adjusted
    ($ in thousands) 2024  2023   2024  2023 
    Sales$1,373,268 $1,326,120  $1,373,268 $1,326,120 
    Gross Profit 421,813  420,690   421,813  420,690 
    Gross Margin 30.7% 31.7%  30.7% 31.7%
    SG&A 177,820  183,198   175,888  174,758 
    SG&A as % of Revenue 12.9% 13.8%  12.8% 13.2%
    Operating Profit 243,993  237,492   245,925  245,932 
    Operating Margin 17.8% 17.9%  17.9% 18.5%
    Net Income 168,960  167,601   170,075  172,507 
    Net Income per diluted share$5.65 $5.27  $5.68 $5.43 
    EBITDA       $285,057 $283,690 
    EBITDA Margin        20.8% 21.4%
          
          
    Nine Months Ended September 30, 2024    
     Reported Adjusted
    ($ in thousands) 2024  2023   2024  2023 
    Sales$4,017,597 $3,908,620  $4,017,597 $3,908,620 
    Gross Profit 1,232,885  1,212,704   1,232,885  1,212,704 
    Gross Margin 30.7% 31.0%  30.7% 31.0%
    SG&A 563,992  538,679   534,497  524,480 
    SG&A as % of Revenue 14.0% 13.8%  13.3% 13.4%
    Operating Profit 668,893  674,025   698,388  688,224 
    Operating Margin 16.6% 17.2%  17.4% 17.6%
    Net Income 472,064  467,870   493,997  477,551 
    Net Income per diluted share$15.19 $14.74  $15.89 $15.04 
    EBITDA       $816,570 $797,520 
    EBITDA Margin        20.3% 20.4%
          


    Sales Drivers      
    (comparisons are to the periods ended September 30, 2023)  
           
      Three Months Ended September 30, 2024
      Installation
    		  Specialty
    Distribution
    		  TopBuild,
    net of elims
    		 
    Sales (in millions) $856  $600  $1,373 
    Sales Drivers      
    Volume  0.5%  3.0%  0.4%
    Price  1.1%  0.8%  1.0%
    M&A  2.9%  1.4%  2.4%
    Dispositions  (0.2%)    (0.1%)
    Total Sales Change  4.2%  5.1%  3.6%
           
           
      Nine Months Ended September 30, 2024
      Installation
    		  Specialty
    Distribution
    		  TopBuild,
    net of elims
    		 
    Sales (in millions) $2,506  $1,739  $4,018 
    Sales Drivers      
    Volume  0.6%  (0.2%)  (0.5%)
    Price  1.2%  1.2%  1.2%
    M&A  3.4%  1.0%  2.5%
    Dispositions  (0.6%)    (0.4%)
    Total Sales Change  4.5%  2.1%  2.8%
           


    Segment Profitability     
    (comparisons are to the periods ended September 30, 2023)   
          
     Three Months Ended September 30, 2024 Nine Months Ended September 30, 2024
    ($ in thousands)Installation
    		 Specialty
    Distribution
    		  Installation
    		 Specialty
    Distribution
    		 
    Operating Profit$172,243 $94,911  $499,717 $261,862 
    Change (1.7%) 7.5%  1.1% 5.8%
    Operating Margin 20.1% 15.8%  19.9% 15.1%
    Adj. Operating Profit$172,274 $95,109  $500,081 $261,320 
    Change (2.7%) 7.7%  0.7% 5.4%
    Adj. Operating Margin 20.1% 15.8%  20.0% 15.0%
    Adj. EBITDA$191,382 $110,600  $556,816 $307,507 
    Change (1.8%) 6.5%  1.5% 4.8%
    Adj. EBITDA Margin 22.3% 18.4%  22.2% 17.7%
          

    Capital Allocation

    2024 Acquisitions
    Year to date, TopBuild has completed or announced a total of 7 acquisitions which are expected to generate approximately $118 million in annual revenue.

    On October 30, the Company announced the acquisition of Shannon Global Energy Services, a leading thermal acoustic blanket insulation fabricator serving the commercial and industrial end markets. The acquisition is expected to close in the fourth quarter.

    CompanyAnnual Revenue
    ($ in millions)    		Month Closed
    Brabble Insulation, Inc. (I)$5.2February
    Morris Black & Sons, Inc. (I) 3.8March
    Pest Control Insulation LLC (D) 25.4March
    Green Space Insulation LLC (I) 6.0April
    Insulation Works, Inc. (I) 28.0May
    Texas Insulation (I) 38.9May
    Shannon Global Energy Services (D) 10.8TBD
    Total$118.1 
    I = Installation, D = Specialty Distribution  
       

    Share Repurchases
    During the third quarter, TopBuild repurchased approximately 1.07 million shares totaling $413.9 million. On a year-to-date basis, the Company repurchased 2.3 million shares totaling $919.2 million, leaving $235.2 million remaining under the current authorization as of September 30, 2024.

    2024 Outlook2
    TopBuild narrowed its full year 2024 outlook based on the Company’s assumptions for a continued uneven housing environment and the ongoing delay of certain commercial/industrial projects. The Company noted that it has not experienced an uptick in project cancellations. 

    $ in millions  
    2024 OutlookLowHigh
    Sales$5,300.0$5,350.0
    Adjusted EBITDA*$1,055.0$1,085.0
    * See table for Adjusted EBITDA reconciliation 
      

    2 This outlook reflects management’s current view of present and future market conditions and is 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 the third quarter 2024 financial results is scheduled for today, Tuesday, November 5, at 9:00 a.m. Eastern Time. The call may be accessed by dialing (877) 407-9037. A simultaneous webcast of the call, along with management’s formal remarks and a presentation, will be available on the Company’s website at www.topbuild.com shortly before the call begins.

    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 250 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.

    (tables follow)

     
    TopBuild Corp.
    Condensed Consolidated Statements of Operations (Unaudited)
    (in thousands, except share and per common share amounts)
                 
      Three Months Ended September 30,  Nine Months Ended September 30, 
      2024 2023 2024  2023
    Net sales $1,373,268  $1,326,120  $4,017,597  $3,908,620 
    Cost of sales  951,455   905,430   2,784,712   2,695,916 
    Gross profit  421,813   420,690   1,232,885   1,212,704 
                 
    Selling, general, and administrative expense  177,820   183,198   563,992   538,679 
    Operating profit  243,993   237,492   668,893   674,025 
                 
    Other income (expense), net:            
    Interest expense  (18,449)  (18,830)  (55,811)  (55,427)
    Other, net  2,355   6,015   24,987   12,542 
    Other expense, net  (16,094)  (12,815)  (30,824)  (42,885)
    Income before income taxes  227,899   224,677   638,069   631,140 
                 
    Income tax expense  (58,939)  (57,075)  (166,005)  (163,270)
    Net income $168,960  $167,602  $472,064  $467,870 
                 
    Net income per common share:            
    Basic $5.68  $5.30  $15.28  $14.81 
    Diluted $5.65  $5.27  $15.19  $14.74 
                 
    Weighted average shares outstanding:            
    Basic  29,751,713   31,615,110   30,901,788   31,588,740 
    Diluted  29,925,400   31,788,812   31,083,857   31,744,856 
                 

     

    TopBuild Corp.
    Condensed Consolidated Statements of Comprehensive Income (Unaudited)
    (in thousands)
                 
      Three Months Ended September 30,  Nine Months Ended September 30, 
      2024 2023  2024  2023
    Net income $168,960 $167,602  $472,064  $467,870
    Other comprehensive income (loss):            
    Foreign currency translation adjustment  2,463  (3,008)  (3,464)  3,029
    Comprehensive income $171,423 $164,594  $468,600  $470,899
                 


    TopBuild Corp.       
    Condensed Consolidated Balance Sheets and Other Financial Data (Unaudited)       
    (dollars in thousands)       
      As of 
      September 30, 2024 December 31, 2023 
    ASSETS       
    Current assets:       
    Cash and cash equivalents $257,342 $848,565 
    Receivables, net of an allowance for credit losses of $21,829 at September 30, 2024, and $23,948 at December 31, 2023  827,776  799,009 
    Inventories  392,208  364,731 
    Prepaid expenses and other current assets  43,813  36,939 
    Total current assets  1,521,139  2,049,244 
            
    Right of use assets  189,141  204,629 
    Property and equipment, net  270,022  264,487 
    Goodwill  2,092,315  2,042,568 
    Other intangible assets, net  565,440  591,058 
    Other assets  12,460  10,865 
    Total assets $4,650,517 $5,162,851 
            
    LIABILITIES       
    Current liabilities:       
    Accounts payable $461,478 $469,585 
    Current portion of long-term debt  45,137  47,039 
    Accrued liabilities  180,382  187,217 
    Short-term operating lease liabilities  67,509  65,780 
    Short-term finance lease liabilities  1,634  1,917 
    Total current liabilities  756,140  771,538 
            
    Long-term debt  1,341,439  1,373,028 
    Deferred tax liabilities, net  243,176  243,930 
    Long-term portion of insurance reserves  60,799  58,783 
    Long-term operating lease liabilities  130,299  146,213 
    Long-term finance lease liabilities  2,961  4,150 
    Other liabilities  1,434  1,554 
    Total liabilities  2,536,248  2,599,196 
            
    EQUITY  2,114,269  2,563,655 
    Total liabilities and equity $4,650,517 $5,162,851 
            
      As of September 30,  
      2024 2023 
    Other Financial Data       
    Receivable days  49  51 
    Inventory days  38  36 
    Accounts payable days  58  60 
    Receivables, net plus inventories less accounts payable $758,506 $772,229 
    Receivables, net plus inventories less accounts payable as a percent of sales (TTM) †  14.1% 14.6%
            
    † Trailing 12 months sales have been adjusted for the pro forma effect of acquired branches       


           
    TopBuild Corp.      
    Condensed Consolidated Statement of Cash Flows (Unaudited)      
    (in thousands)      
           
      Nine Months Ended September 30, 
      2024 2023
    Cash Flows Provided by (Used in) Operating Activities:     
    Net income $472,064  $467,870 
    Adjustments to reconcile net income to net cash provided by operating activities:      
    Depreciation and amortization  104,777   98,216 
    Share-based compensation  13,405   11,080 
    Loss on sale of assets  672   2,733 
    Amortization of debt issuance costs  2,161   2,161 
    Provision for bad debt expense  13,730   7,380 
    Provision for inventory obsolescence  6,713   3,617 
    Change in certain assets and liabilities, net of effects of businesses acquired:      
    Receivables, net  (30,294)  (52,482)
    Inventories  (30,916)  82,960 
    Prepaid expenses and other current assets  (6,849)  (3,267)
    Accounts payable  (17,441)  (21,361)
    Accrued liabilities  (15,695)  (9,027)
    Other, net  (2,529)  (1,402)
    Net cash provided by operating activities  509,798   588,478 
           
    Cash Flows Provided by (Used in) Investing Activities:      
    Purchases of property and equipment  (56,794)  (48,076)
    Acquisition of businesses, net of cash acquired  (88,460)  (147,614)
    Proceeds from sale of assets  2,336   14,674 
    Net cash used in investing activities  (142,918)  (181,016)
           
    Cash Flows Provided by (Used in) Financing Activities:      
    Repayment of long-term debt  (35,651)  (27,711)
    Taxes withheld and paid on employees' equity awards  (6,088)  (6,350)
    Exercise of stock options  3,224   2,489 
    Repurchase of shares of common stock  (919,186)  — 
    Payment of contingent consideration  —   (300)
    Net cash used in financing activities  (957,701)  (31,872)
    Impact of exchange rate changes on cash  (402)  (47)
    Net (decrease) increase in cash and cash equivalents  (591,223)  375,543 
    Cash and cash equivalents - Beginning of period  848,565   240,069 
    Cash and cash equivalents - End of period $257,342  $615,612 
           
    Supplemental disclosure of noncash activities:      
    Leased assets obtained in exchange for new operating lease liabilities $35,718  $45,525 
    Accruals for property and equipment  227   305 
    Excise taxes capitalized to treasury stock  9,342   — 
           


    TopBuild Corp.
    Segment Data (Unaudited)
    (dollars in thousands)
                         
      Three Months Ended September 30,    Nine Months Ended September 30,    
      2024 2023 Change  2024 2023 Change 
    Installation                    
    Sales $856,350  $821,673  4.2% $2,506,076  $2,397,818  4.5%
                         
    Operating profit, as reported $172,243  $175,218    $499,717  $494,394    
    Operating margin, as reported  20.1%  21.3%    19.9%  20.6%   
                         
    Rationalization charges  —   1,882     —   1,882    
    Acquisition related costs  31   26     364   516    
    Operating profit, as adjusted $172,274  $177,126    $500,081  $496,792    
    Operating margin, as adjusted  20.1%  21.6%    20.0%  20.7%   
                         
    Share-based compensation  71   436     719   1,124    
    Depreciation and amortization  19,037   17,417     56,016   50,700    
    EBITDA, as adjusted $191,382  $194,979  (1.8)% $556,816  $548,616  1.5%
    EBITDA margin, as adjusted  22.3%  23.7%    22.2%  22.9%   
                         
    Specialty Distribution                    
    Sales $600,387  $571,009  5.1% $1,739,007  $1,703,871  2.1%
                         
    Operating profit, as reported $94,911  $88,269    $261,862  $247,583    
    Operating margin, as reported  15.8%  15.5%    15.1%  14.5%   
                         
    Rationalization charges  194   —     (556)  —    
    Acquisition related costs  4   10     14   350    
    Operating profit, as adjusted $95,109  $88,279    $261,320  $247,933    
    Operating margin, as adjusted  15.8%  15.5%    15.0%  14.6%   
                         
    Share-based compensation  374   434     1,187   987    
    Depreciation and amortization  15,117   15,102     45,000   44,414    
    EBITDA, as adjusted $110,600  $103,815  6.5% $307,507  $293,334  4.8%
    EBITDA margin, as adjusted  18.4%  18.2%    17.7%  17.2%   
                         


    TopBuild Corp.
    Adjusted EBITDA (Unaudited)
    (dollars in thousands)
                       
      Three Months Ended September 30,     Nine Months Ended September 30,    
      2024 2023 Change  2024 2023 Change 
    Total net sales                  
    Sales before eliminations $1,456,737  $1,392,682     $4,245,083  $4,101,689    
    Intercompany eliminations  (83,469)  (66,562)     (227,486)  (193,069)   
    Net sales after eliminations $1,373,268  $1,326,120  3.6% $4,017,597  $3,908,620  2.8%
                       
    Operating profit, as reported - segments $267,154  $263,487     $761,579  $741,977    
    General corporate expense, net  (9,685)  (14,494)     (55,610)  (35,280)   
    Intercompany eliminations  (13,476)  (11,501)     (37,076)  (32,672)   
    Operating profit, as reported $243,993  $237,492     $668,893  $674,025    
    Operating margin, as reported  17.8%  17.9%     16.6%  17.2%   
                       
    Rationalization charges  485   1,882      (7)  1,882    
    Acquisition related costs †  1,447   6,558      6,502   12,317    
    Acquisition termination fee  —   —      23,000   —    
    Operating profit, as adjusted $245,925  $245,932     $698,388  $688,224    
    Operating margin, as adjusted  17.9%  18.5%     17.4%  17.6%   
                       
    Share-based compensation  3,646   4,194      13,405   11,080    
    Depreciation and amortization  35,486   33,564      104,777   98,216    
    EBITDA, as adjusted $285,057  $283,690  0.5% $816,570  $797,520  2.4%
    EBITDA margin, as adjusted  20.8%  21.4%     20.3%  20.4%   
                       
    Sales change period over period  47,148         108,977       
    EBITDA, as adjusted, change period over period  1,367         19,050       
    Incremental EBITDA, as adjusted, as a percentage of change in sales  2.9%        17.5%      
                       
    † 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 September 30,  Nine Months Ended September 30, 
      2024 2023 2024 2023
    Net sales            
    Same branch:            
    Installation $832,780  $819,702  $2,424,965  $2,382,440 
    Specialty Distribution  592,641   571,009   1,721,267   1,703,871 
    Eliminations  (83,469)  (66,562)  (227,486)  (193,069)
    Total same branch $1,341,952  $1,324,149  $3,918,746  $3,893,242 
                 
    Acquisitions (a):            
    Installation $23,570  $—  $81,111  $— 
    Specialty Distribution  7,746   —   17,740   — 
    Total acquisitions  31,316   —   98,851   — 
                 
    Dispositions (b):            
    Installation $—  $1,971  $—  $15,378 
    Total dispositions  —   1,971   —   15,378 
    Total net sales $1,373,268  $1,326,120  $4,017,597  $3,908,620 
                 
    EBITDA, as adjusted            
    Same branch $280,333  $283,175  $801,535  $794,480 
    Acquisitions (a)  4,724   —   15,035   — 
    Dispositions (b)  —   515   —   3,040 
    Total $285,057  $283,690  $816,570  $797,520 
                 
    EBITDA, as adjusted, as a percentage of sales            
    Same branch (c)  20.9%     20.5%   
    Acquisitions (d)  15.1%     15.2%   
    Total (e)  20.8%  21.4% 20.3%  20.4%
                 
    As Adjusted Incremental EBITDA, as a percentage of change in sales            
    Same branch (f)  NM      27.7%   
    Acquisitions (d)  15.1%     15.2%   
    Total (g)  2.9%     17.5%   
                 
    (a) Represents current year impact of acquisitions in their first twelve months
    (b) Represents operating results in prior period previously classified as same branch
    (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 September 30,  Nine Months Ended September 30, 
      2024 2023 2024 2023
    Gross Profit Reconciliation                
                     
    Net sales $1,373,268  $1,326,120  $4,017,597  $3,908,620 
                     
    Gross profit, as reported $421,813  $420,690  $1,232,885  $1,212,704 
    Acquisition related costs  —   —   —   — 
    Gross profit, as adjusted $421,813  $420,690  $1,232,885  $1,212,704 
                     
    Gross margin, as reported  30.7%  31.7%  30.7%  31.0%
    Gross margin, as adjusted  30.7%  31.7%  30.7%  31.0%
                     
    Selling, General and Administrative Expense Reconciliation                
                     
    Selling, general, and administrative expense, as reported $177,820  $183,198  $563,992  $538,679 
                     
    Rationalization charges  485   1,882   (7)  1,882 
    Acquisition related costs  1,447   6,558   6,502   12,317 
    Acquisition termination fee  —   —   23,000   — 
    Selling, general, and administrative expense, as adjusted $175,888  $174,758  $534,497  $524,480 
                     
    Operating Profit Reconciliation                
                     
    Operating profit, as reported $243,993  $237,492  $668,893  $674,025 
                     
    Rationalization charges  485   1,882   (7)  1,882 
    Acquisition related costs  1,447   6,558   6,502   12,317 
    Acquisition termination fee  —   —   23,000   — 
    Operating profit, as adjusted $245,925  $245,932  $698,388  $688,224 
                     
    Operating margin, as reported  17.8%  17.9%  16.6%  17.2%
    Operating margin, as adjusted  17.9%  18.5%  17.4%  17.6%
                     
    Income Per Common Share Reconciliation                
                     
    Income before income taxes, as reported $227,899  $224,677  $638,069  $631,140 
                     
    Rationalization charges  485   1,882   (7)  1,882 
    Acquisition related costs  1,447   6,558   6,502   12,317 
    Acquisition termination fee  —   —   23,000   — 
    Income before income taxes, as adjusted  229,831   233,117   667,564   645,339 
                     
    Tax rate at 26.0%  (59,756)  (60,610)  (173,567)  (167,788)
    Income, as adjusted $170,075  $172,507  $493,997  $477,551 
                     
    Income per common share, as adjusted $5.68  $5.43  $15.89  $15.04 
                     
    Weighted average diluted common shares outstanding  29,925,400   31,788,812   31,083,857   31,744,856 
                     


    TopBuild Corp.
    Reconciliation of Adjusted EBITDA to Net Income (Unaudited)
    (in thousands)            
                 
      Three Months Ended September 30,  Nine Months Ended September 30, 
      2024 2023 2024 2023
    Net income, as reported $168,960 $167,602 $472,064  $467,870
    Adjustments to arrive at EBITDA, as adjusted:            
    Interest expense and other, net  16,094  12,815  30,824   42,885
    Income tax expense  58,939  57,075  166,005   163,270
    Depreciation and amortization  35,486  33,564  104,777   98,216
    Share-based compensation  3,646  4,194  13,405   11,080
    Rationalization charges  485  1,882  (7)  1,882
    Acquisition related costs  1,447  6,558  6,502   12,317
    Acquisition termination fee  —  —  23,000   —
    EBITDA, as adjusted $285,057 $283,690 $816,570  $797,520
                 


    TopBuild Corp.
    Acquisition Adjusted Net Sales (Unaudited)
    (in thousands)
     2023 2024 Trailing Twelve
    Months Ended
     Q4 Q1 Q2 Q3 September 30, 2024
    Net sales$1,286,074 $1,278,717 $1,365,612 $1,373,268 $5,303,671
    Acquisitions proforma adjustment † 28,367  24,075  10,603  —  63,045
    Net sales, acquisition adjusted$1,314,441 $1,302,792 $1,376,215 $1,373,268 $5,366,716
                   
                   
    † Trailing 12 months sales have been adjusted for the pro forma effect of acquired branches
                   


    TopBuild Corp.      
    2024 Estimated Adjusted EBITDA Range (Unaudited)     
    (in millions)      
           
     Twelve Months Ending December 31, 2024 
     Low High 
    Estimated net income, as reported$606.0 $634.0 
    Adjustments to arrive at estimated EBITDA, as adjusted:     
    Interest expense and other, net 48.0  45.0 
    Income tax expense 213.0  222.0 
    Depreciation and amortization 142.0  140.0 
    Share-based compensation 17.0  16.0 
    Acquisition related costs & rationalization charges 29.0  28.0 
    Estimated EBITDA, as adjusted$1,055.0 $1,085.0 


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