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TopBuild Reports Third Quarter 2021 Results
المصدر: Nasdaq GlobeNewswire / 02 نوفمبر 2021 06:45:01 America/New_York
- 21.3% increase in net sales
- 120 basis point gross margin expansion to 29.6%
- 120 basis point operating margin expansion to 15.8%, 170 basis points on an adjusted basis
- 160 basis point adjusted EBITDA margin expansion to 18.7%
DAYTONA BEACH, Fla., Nov. 02, 2021 (GLOBE NEWSWIRE) -- TopBuild Corp. (NYSE:BLD), a leading installer and specialty distributor of insulation and building material products to the North American construction industry today reported results for the third quarter ended September 30, 2021.
Robert Buck, President and Chief Executive Officer, stated, “We are pleased with our overall results, particularly in this challenging environment characterized by supply chain disruptions and labor shortages across the entire construction industry. These market imbalances have impacted homebuilders’ ability to meet the continuing strong consumer demand, constraining growth for the entire industry.
“Our teams continue to do an excellent job managing inputs costs and pricing as evidenced by our strong EBITDA margin expansion this quarter.
“Looking ahead, we are confident in the overall fundamentals of our three end-markets; residential, commercial, and industrial, and our ability to leverage our size, scale, and operational excellence to continue to drive profitable growth.”
Third Quarter Financial Highlights
(unless otherwise indicated, comparisons are to the quarter ended September 30, 2020)- Net sales increased 21.3% to $845.8 million, 10.6% on a same branch basis, primarily driven by price and acquisitions.
- Gross margin increased 120 basis points to 29.6%.
- Operating profit was $133.8 million, compared to operating profit of $101.5 million. On an adjusted basis, operating profit was $137.4 million, compared to $101.7 million, a 35.2% improvement.
- Operating margin increased 120 basis points, and on an adjusted basis expanded 170 basis points to 16.3%.
- Net income was $95.4 million, or $2.88 per diluted share, compared to $70.0 million, or $2.11 per diluted share. Adjusted income was $97.7 million, or $2.95 per diluted share, compared to $69.6 million, or $2.10 per diluted share.
- Adjusted EBITDA was $158.2 million, compared to $119.2 million, a 32.8% increase, and adjusted EBITDA margin improved 160 basis points to 18.7%.
- At September 30, 2021, the Company had cash and cash equivalents of $327.9 million and availability under its revolving credit facility of $381.9 million for total liquidity of $709.8 million.
Nine Month Financial Highlights
(unless otherwise indicated, comparisons are to nine months ended September 30, 2020)- Net sales increased 21.3% to $2,422.8 million.
- Gross margin expanded 100 basis points to 28.5%.
- Operating profit was $358.0 million, compared to operating profit of $252.0 million. On an adjusted basis, operating profit was $364.5 million, compared to $255.5 million, a 42.7% improvement.
- Operating margin was 14.8% a 220-basis point improvement. On an adjusted basis, operating margin improved 220 basis points to 15.0%.
- Net income was $245.7 million, or $7.41 per diluted share, compared to $176.3 million, or $5.29 per diluted share. Adjusted income was $256.4 million, or $7.73 per diluted share, compared to $171.2 million, or $5.14 per diluted share.
- Adjusted EBITDA was $423.9 million, compared to $315.3 million, a 34.4% increase. Adjusted EBITDA margin was 17.5%, a 170-basis point improvement.
Operating Segment Highlights ($ in 000s)
(comparisons are to the period ended September 30, 2020)TruTeam 3 Months Ended
9/30/219 Months Ended
9/30/21Service Partners 3 Months Ended
9/30/219 Months Ended 9/30/21 Sales $612,900 $1,751,278 Sales $276,398 $801,363 Change Change Volume 1.9% 5.7% Volume -5.2% 7.1% Price 8.4% 4.9% Price 16.5% 10.4% M&A 14.3% 11.5% M&A 1.9% 1.3% Total Change 24.5% 22.1% Total Change 13.2% 18.8% Operating Margin 17.1% 15.9% Operating Margin 17.1% 15.6% Change 20 bps 100 bps Change 370 bps 350 bps Adj. Operating Margin 17.2% 16.0% Adj. Operating Margin 17.1% 15.7% Change 20 bps 100 bps Change 370 bps 350 bps Capital Allocation
AcquisitionsTTM Revenue at Month YTD 2021 Acquisition ($millions) Acquired Business Focus LCR Contractors (I) $58.0 January Heavy Commercial/Fireproofing Ozark Foam (I) $7.7 March Residential, primarily spray foam American Building Systems (I&D) $144.0 April Residential (94%) & Distribution (6%) Creative Conservation (I) $7.4 April Residential RJ Insulation (I) $4.0 June Residential, shower doors/mirrors Valley Gutter Supply (D) $10.0 August Fabricator & distributor California Building Products (I) $18.0 October Residential and light commercial Distribution International (D) $747.0 October Fabricator and specialty distributor Total $996.1 I = Installation
D = DistributionBuck added, “Acquisitions continue to be our number one capital allocation priority and our acquisition of Distribution International has further enhanced our robust M&A pipeline focused on three end-markets: residential, commercial, and industrial. Over the past six years, we have put together a disciplined team to source and integrate deals, and during this timeframe have put almost $2 billion of capital to work for our shareholders.”
Share repurchases
In the third quarter of 2021, the Company repurchased 60,105 shares at an average price of $191.64 per share. Year-to-date the Company has repurchased 183,136 shares as an average price of $194.15 per share.2021 Outlook
Sales and Adjusted EBITDA Guidance (*)
($ in millions)2021 Low High Legacy BLD Sales $ 3,255 $ 3,295 DI Sales $ 170 $ 180 Total Sales $ 3,425 $ 3,475 2021 Low High Legacy BLD Adj. EBITDA* $ 570 $ 585 DI Adj. EBITDA $ 15 $ 20 Total Adj. EBITDA $ 585 $ 605 *See table for adjusted EBITDA reconciliation.
Additional Information
Quarterly supplemental materials, including a presentation that will be referenced on today’s conference call, are available on the Company’s website at www.topbuild.com.Conference Call
A conference call to discuss third quarter 2021 financial results is scheduled for today, Tuesday, November 2, 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.About TopBuild
TopBuild Corp., headquartered in Daytona Beach, Florida, is a leading installer and specialty distributor of insulation and building material products to the North American construction industry. We provide insulation solutions and building material installation services through TruTeam which has approximately 235 branches. We distribute building insulation and building product materials for the residential and commercial end-markets through Service Partners and mechanical insulation and other specialty products for the commercial and industrial end-markets through Distribution International. Our specialty distribution network encompasses 175 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 at www.topbuild.com.Safe Harbor Statement
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,” “would,” “anticipate,” “expect,” “believe,” “designed,” “plan,” 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. We caution you against unduly relying on any of these forward-looking statements. Our future performance may be affected by the duration and impact of the COVID-19 pandemic on the United States economy, specifically with respect to residential and commercial construction; our ability to continue operations in markets affected by the COVID-19 pandemic and our ability to collect receivables from our customers; our reliance on residential new construction, residential repair/remodel, and commercial construction; our reliance on third-party suppliers and manufacturers; our ability to attract, develop, and retain talented personnel and our sales and labor force; our ability to maintain consistent practices across our locations; and our ability to maintain our competitive position. We discuss the material risks we face under the caption entitled “Risk Factors” in our Annual Report for the year ended December 31, 2020, as filed with the SEC in February 2021, as well as under the caption entitled “Risk Factors” in subsequent reports that we file with the SEC. Our forward-looking statements in this filing speak only as of the date of this filing. Factors or events that could cause our actual results to differ may emerge from time to time and it is not possible for us to predict all of them. Unless required by law, we undertake no obligation to update publicly any forward-looking statements as a result of new information, future events, or otherwise. The Company believes that the non-GAAP performance measures and ratios that are contained herein, which management uses to manage our business, provide users of this financial information with additional meaningful comparisons between current results and results in our prior periods. Non-GAAP performance measures and ratios should be viewed in addition, and not as an alternative, to the Company's reported results under accounting principles generally accepted in the United States. Additional information about the Company is contained in the Company's filings with the SEC and is available on TopBuild's website at www.topbuild.com.Investor Relations and Media Contact
Tabitha Zane
tabitha.zane@topbuild.comTopBuild 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, 2021 2020 2021 2020 Net sales $ 845,757 $ 697,223 $ 2,422,810 $ 1,996,551 Cost of sales 595,466 498,895 1,731,581 1,448,210 Gross profit 250,291 198,328 691,229 548,341 Selling, general, and administrative expense 116,485 96,805 333,252 296,372 Operating profit 133,806 101,523 357,977 251,969 Other income (expense), net: Interest expense (5,503 ) (7,692 ) (18,210 ) (24,711 ) Loss on extinguishment of debt — — (13,862 ) (233 ) Other, net 66 86 210 648 Other expense, net (5,437 ) (7,606 ) (31,862 ) (24,296 ) Income before income taxes 128,369 93,917 326,115 227,673 Income tax expense (32,934 ) (23,921 ) (80,457 ) (51,407 ) Net income $ 95,435 $ 69,996 $ 245,658 $ 176,266 Net income per common share: Basic $ 2.91 $ 2.13 $ 7.49 $ 5.35 Diluted $ 2.88 $ 2.11 $ 7.41 $ 5.29 Weighted average shares outstanding: Basic 32,763,311 32,847,652 32,818,145 33,960,969 Diluted 33,088,680 33,210,545 33,155,995 33,337,259 TopBuild Corp. Condensed Consolidated Balance Sheets and Other Financial Data (Unaudited) (dollars in thousands) As of September 30, December 31, ASSETS 2021 2020 Current assets: Cash and cash equivalents $ 327,906 $ 330,007 Receivables, net of an allowance for credit losses of $8,856 at September 30, 2021, and $6,926 at December 31, 2020 516,941 427,340 Inventories, net 202,018 161,369 Prepaid expenses and other current assets 21,240 17,689 Total current assets 1,068,105 936,405 Right of use assets 104,047 83,490 Property and equipment, net 203,530 180,053 Goodwill 1,496,737 1,410,685 Other intangible assets, net 234,872 190,605 Deferred tax assets, net 2,751 2,728 Other assets 10,646 11,317 Total assets $ 3,120,688 $ 2,815,283 LIABILITIES Current liabilities: Accounts payable $ 382,932 $ 331,710 Current portion of long-term debt 23,557 23,326 Accrued liabilities 141,261 107,949 Short-term lease liabilities 37,048 33,492 Total current liabilities 584,798 496,477 Long-term debt 675,567 683,396 Deferred tax liabilities, net 166,240 168,568 Long-term portion of insurance reserves 47,775 50,657 Long-term lease liabilities 71,290 53,749 Other liabilities 13,307 13,642 Total liabilities 1,558,977 1,466,489 EQUITY 1,561,711 1,348,794 Total liabilities and equity $ 3,120,688 $ 2,815,283 As of September 30, 2021 2020 Other Financial Data Receivable days 45 48 Inventory days 33 27 Accounts payable days 75 81 Receivables, net plus inventories, net less accounts payable $ 336,027 $ 267,369 Receivables, net plus inventories, net less accounts payable as a percent of sales (TTM) † 10.3 % 10.1 % † 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, 2021 2020 Cash Flows Provided by (Used in) Operating Activities: Net income $ 245,658 $ 176,266 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 51,005 47,527 Share-based compensation 8,375 12,159 Loss on extinguishment of debt 13,862 233 Loss on sale or abandonment of property and equipment 1,410 290 Amortization of debt issuance costs 1,352 1,103 Provision for bad debt expense 5,215 5,625 Loss from inventory obsolescence 1,667 1,908 Deferred income taxes, net (1,661 ) (709 ) Change in certain assets and liabilities Receivables, net (62,257 ) (13,645 ) Inventories, net (30,115 ) 4,759 Prepaid expenses and other current assets (2,984 ) (14,989 ) Accounts payable 47,907 2,152 Accrued liabilities 30,397 33,436 Payment of contingent consideration (22 ) (413 ) Other, net (304 ) 21 Net cash provided by operating activities 309,505 255,723 Cash Flows Provided by (Used in) Investing Activities: Purchases of property and equipment (42,320 ) (27,206 ) Acquisition of businesses (205,028 ) (21,450 ) Proceeds from sale of property and equipment 298 2,332 Net cash used in investing activities (247,050 ) (46,324 ) Cash Flows Provided by (Used in) Financing Activities: Proceeds from issuance of long-term debt 411,250 300,000 Repayment of long-term debt (427,563 ) (319,168 ) Payment of debt issuance costs (6,500 ) (2,280 ) Taxes withheld and paid on employees' equity awards (11,511 ) (14,781 ) Exercise of stock options 5,952 1,438 Repurchase of shares of common stock (35,556 ) (43,149 ) Payment of contingent consideration (628 ) (928 ) Net cash used in financing activities (64,556 ) (78,868 ) Cash and Cash Equivalents (Decrease) increase for the period (2,101 ) 130,531 Beginning of period 330,007 184,807 End of period $ 327,906 $ 315,338 Supplemental disclosure of noncash activities: Leased assets obtained in exchange for new operating lease liabilities $ 51,190 $ 27,098 Accruals for property and equipment 580 278 TopBuild Corp. Segment Data (Unaudited) (dollars in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 Change 2021 2020 Change TruTeam Sales $ 612,900 $ 492,206 24.5 % $ 1,751,278 $ 1,434,648 22.1 % Operating profit, as reported $ 105,046 $ 83,142 277,748 $ 213,136 Operating margin, as reported 17.1 % 16.9 % 15.9 % 14.9 % Rationalization charges — 9 — 866 Acquisition related costs 171 — 1,283 4 COVID-19 pay — 278 605 916 Operating profit, as adjusted $ 105,217 $ 83,429 $ 279,636 $ 214,922 Operating margin, as adjusted 17.2 % 17.0 % 16.0 % 15.0 % Service Partners Sales $ 276,398 $ 244,113 13.2 % $ 801,363 $ 674,672 18.8 % Operating profit, as reported $ 47,162 $ 32,787 125,403 $ 81,612 Operating margin, as reported 17.1 % 13.4 % 15.6 % 12.1 % Rationalization charges — (161 ) — 783 COVID-19 pay — 15 54 70 Operating profit, as adjusted $ 47,162 $ 32,641 $ 125,457 $ 82,464 Operating margin, as adjusted 17.1 % 13.4 % 15.7 % 12.2 % Total Sales before eliminations $ 889,298 $ 736,319 $ 2,552,641 $ 2,109,320 Intercompany eliminations (43,541 ) (39,096 ) (129,831 ) (112,769 ) Net sales after eliminations $ 845,757 $ 697,223 21.3 % $ 2,422,810 $ 1,996,551 21.3 % Operating profit, as reported - segments $ 152,208 $ 115,929 $ 403,151 $ 294,748 General corporate expense, net (10,812 ) (8,032 ) (24,124 ) (24,610 ) Intercompany eliminations (7,590 ) (6,374 ) (21,050 ) (18,169 ) Operating profit, as reported $ 133,806 $ 101,523 $ 357,977 $ 251,969 Operating margin, as reported 15.8 % 14.6 % 14.8 % 12.6 % Rationalization charges — (274 ) 16 2,102 Acquisition related costs † 3,634 142 5,844 338 Refinancing costs — — — 57 COVID-19 pay — 293 659 984 Operating profit, as adjusted $ 137,440 $ 101,684 $ 364,496 $ 255,450 Operating margin, as adjusted 16.3 % 14.6 % 15.0 % 12.8 % Share-based compensation 2,998 3,280 8,375 12,317 Depreciation and amortization 17,784 14,216 51,005 47,527 EBITDA, as adjusted $ 158,222 $ 119,180 $ 423,876 $ 315,294 EBITDA margin, as adjusted 18.7 % 17.1 % 17.5 % 15.8 % Sales change period over period 148,534 426,259 EBITDA, as adjusted, change period over period 39,042 108,582 Incremental EBITDA, as adjusted, as a percentage of change in sales 26.3 % 25.5 % † Acquisition related costs include corporate level adjustments as well as segment operating adjustments. 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, 2021 2020 2021 2020 Gross Profit and Operating Profit Reconciliations Net sales $ 845,757 $ 697,223 $ 2,422,810 $ 1,996,551 Gross profit, as reported $ 250,291 $ 198,328 $ 691,229 $ 548,341 Rationalization charges — (63 ) — 1,016 COVID-19 pay — 273 592 755 Gross profit, as adjusted $ 250,291 $ 198,538 $ 691,821 $ 550,111 Gross margin, as reported 29.6 % 28.4 % 28.5 % 27.5 % Gross margin, as adjusted 29.6 % 28.5 % 28.6 % 27.6 % Operating profit, as reported $ 133,806 $ 101,523 $ 357,977 $ 251,969 Rationalization charges — (274 ) 16 2,102 Acquisition related costs 3,634 142 5,844 338 Refinancing costs — — — 57 COVID-19 pay — 293 659 984 Operating profit, as adjusted $ 137,440 $ 101,684 $ 364,496 $ 255,450 Operating margin, as reported 15.8 % 14.6 % 14.8 % 12.6 % Operating margin, as adjusted 16.3 % 14.6 % 15.0 % 12.8 % Income Per Common Share Reconciliation Income before income taxes, as reported $ 128,369 $ 93,917 $ 326,115 $ 227,673 Rationalization charges — (274 ) 16 2,102 Acquisition related costs 3,634 142 5,844 338 Refinancing costs and loss on extinguishment of debt — — 13,862 290 COVID-19 pay — 293 659 984 Income before income taxes, as adjusted 132,003 94,078 346,496 231,387 Tax rate at 26.0% (34,321 ) (24,460 ) (90,089 ) (60,161 ) Income, as adjusted $ 97,682 $ 69,618 $ 256,407 $ 171,226 Income per common share, as adjusted $ 2.95 $ 2.10 $ 7.73 $ 5.14 Weighted average diluted common shares outstanding 33,088,680 33,210,545 33,155,995 33,337,259 TopBuild Corp. Same Branch and Acquisition Net Sales and Adjusted EBITDA (Unaudited) (dollars in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Net sales Same branch: TruTeam $ 542,679 $ 492,206 $ 1,586,336 $ 1,434,648 Service Partners 271,760 244,113 792,834 674,672 Eliminations (43,206 ) (39,096 ) (128,511 ) (112,769 ) Total same branch 771,233 697,223 2,250,659 1,996,551 Acquisitions (a): TruTeam $ 70,221 $ — $ 164,942 $ — Service Partners 4,638 — 8,529 — Eliminations (335 ) — (1,320 ) — Total acquisitions 74,524 — 172,151 — Total $ 845,757 $ 697,223 $ 2,422,810 $ 1,996,551 EBITDA, as adjusted Same branch $ 146,774 $ 119,180 $ 400,328 $ 315,294 Acquisitions (a) 11,448 — 23,548 — Total $ 158,222 $ 119,180 $ 423,876 $ 315,294 EBITDA, as adjusted, as a percentage of sales Same branch (b) 19.0 % 17.8 % Acquisitions (c) 15.4 % 13.7 % Total (d) 18.7 % 17.1 % 17.5 % 15.8 % As Adjusted Incremental EBITDA, as a percentage of change in sales Same branch (e) 37.3 % 33.5 % Acquisitions (c) 15.4 % 13.7 % Total (f) 26.3 % 25.5 % (a) Represents current year impact of acquisitions in their first twelve months (b) Same branch EBITDA, as adjusted, as a percentage of same branch sales (c) Acquired EBITDA, as adjusted, as a percentage of acquired sales (d) Total EBITDA, as adjusted, as a percentage of total sales (e) Change in same branch EBITDA, as adjusted, as a percentage of change in same branch sales (f) Change in total EBITDA, as adjusted, as a percentage of change in total sales TopBuild Corp. Same Branch and Acquisition Net Sales by Market (Unaudited) (in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Same branch: Residential $ 610,377 $ 545,688 $ 1,761,630 $ 1,557,954 Commercial 160,856 151,535 489,029 438,597 Same branch net sales 771,233 697,223 2,250,659 1,996,551 Acquisitions (a): Residential $ 62,050 $ — $ 140,190 $ — Commercial 12,474 — 31,961 — Acquisitions net sales 74,524 — 172,151 — Total net sales $ 845,757 $ 697,223 $ 2,422,810 $ 1,996,551 (a) Represents current year impact of acquisitions in their first twelve months TopBuild Corp. Reconciliation of Adjusted EBITDA to Net Income (Unaudited) (in thousands) Three Months Ended September 30, Nine Months Ended September 30, Trailing Twelve Months Ended 2021 2020 2021 2020 September 30, 2021 Net income, as reported $ 95,435 $ 69,996 $ 245,658 $ 176,266 $ 316,415 Adjustments to arrive at EBITDA, as adjusted: Interest expense and other, net 5,437 7,606 18,000 24,063 25,660 Income tax expense 32,934 23,921 80,457 51,407 105,117 Depreciation and amortization 17,784 14,216 51,005 47,527 65,888 Share-based compensation 2,998 3,280 8,375 12,317 10,968 Rationalization charges — (274 ) 16 2,102 12 Acquisition related costs 3,634 142 5,844 338 6,362 Refinancing costs and loss on extinguishment of debt — — 13,862 290 13,862 COVID-19 pay — 293 659 984 1,043 EBITDA, as adjusted $ 158,222 $ 119,180 $ 423,876 $ 315,294 $ 545,327 Proforma acquisition EBITDA (a) 105,148 Proforma combined EBITDA, as adjusted $ 650,475 Net Debt Calculation Long-term debt, gross $ 711,694 Acquisition debt (b) 807,500 Total long-term debt, gross $ 1,519,194 Cash and cash equivalents $ 327,906 Acquisition cash, net (c) (243,746 ) Total cash and cash equivalents $ 84,160 Net debt, total $ 1,435,034 (a) Represents the trailing twelve months proforma impact of acquisitions completed through the date of this release. (b) Represents the trailing twelve months proforma impact of debt incurred to fund the acquisition of Distribution International. (c) Represents the trailing twelve months proforma impact of cash used to fund the acquisition of Distribution International. TopBuild Corp. Acquisition Adjusted Net Sales (Unaudited) (in thousands) 2020 2021 Trailing Twelve
Months EndedQ4 Q1 Q2 Q3 September 30, 2021 Net Sales $ 721,487 $ 742,798 $ 834,255 $ 845,757 $ 3,144,297 Acquisitions proforma adjustment † 57,830 46,727 4,731 1,336 110,624 Net sales, acquisition adjusted $ 779,317 $ 789,525 $ 838,986 $ 847,093 $ 3,254,921 † Trailing 12 months sales have been adjusted for the pro forma effect of acquired branches TopBuild Corp. 2021 Estimated Adjusted EBITDA Range (Unaudited) (in millions) Twelve Months Ending December 31, 2021 Low High Estimated net income $ 273.0 $ 308.7 Adjustments to arrive at estimated EBITDA, as adjusted: Interest expense and other, net 29.8 27.8 Income tax expense 95.8 108.4 Depreciation and amortization 80.6 78.5 Share-based compensation 11.8 10.8 Rationalization charges 0.9 0.7 Acquisition related costs 18.2 16.2 Refinancing costs and loss on extinguishment of debt 14.9 13.9 Acquisition purchase accounting, including inventory step-up 60.0 40.0 Estimated EBITDA, as adjusted $ 585.0 $ 605.0