Installed Building Products Reports Record Third Quarter 2024 Results; Declares Regular Quarterly Cash Dividend
Third Quarter 2024 Highlights (Comparisons are to Prior Year Period)
-
Net revenue increased 7.7% to an all-time record of
$760.6 million -
Installation revenue increased 7.9% to
$713.7 million , as growth across all end markets combined with sales from IBP's recent acquisitions -
Other revenue, net of eliminations, which includes IBP’s manufacturing and distribution operations, increased to
$46.9 million from$45.3 million
-
Installation revenue increased 7.9% to
-
Net income increased 0.9% to a third quarter record of
$68.6 million -
Adjusted EBITDA* increased 1.4% to an all-time record of
$132.3 million -
Net income per diluted share increased 1.7% to an all-time record of
$2.44 -
Adjusted net income* increased 1.5% to
$80.1 million , or$2.85 per diluted share -
At
September 30, 2024 , IBP had$406.2 million in cash and cash equivalents -
Repurchased 100,000 shares of common stock at a total cost of
$20.7 million -
Declared third quarter dividend of
$0.35 per share that was paid to shareholders onSeptember 30, 2024
Recent Developments
-
IBP’s Board of Directors declared the fourth quarter regular cash dividend of
$0.35 per share -
In
October 2024 , acquiredInsulation Supplies , a specialty distributor focused on insulation and related accessories and machinery sales
“I want to acknowledge the emotional devastation and personal loss many people across the Southeast and Mid-Atlantic regions of
“IBP delivered record third-quarter revenue and profitability, with each end market, from residential to commercial, growing organically. Our talented and committed employees across the country focused on what they can control by providing our customers with reliable, high-quality building product installation service. The long-term view on demand for our installed service is unchanged. We believe residential and commercial end market trends are favorable as builders work to meet demand through the increased supply of houses, apartments, and commercial structures,” stated
“Our capital allocation initiatives remain consistent with two additional acquisitions closing in July and October. Year-to-date, we have acquired over
“As we approach the final month of 2024, we are positioned to close out the year on a favorable note and begin 2025 from a position of strength,” concluded
Acquisition Update
IBP continues to prioritize profitable growth through its proven strategy of acquiring well-run installers of insulation and complementary building products. To date in 2024, IBP has acquired over
During the 2024 third quarter and in
-
In
July 2024 , IBP acquiredEuroview Enterprises, LLC ,Contract Mirror and Supply Co. , andCLM Solutions, LLC (collectively “Euroview”), anIllinois -based residential and commercial installer of building products in key construction markets in the Midwest. Euroview has annual revenue of approximately$20 million . -
In
October 2024 , IBP acquiredWholesale Insulation Supply, Inc. doing business asInsulation Supplies , a specialty distributor focused on supplying fiberglass insulation, spray foam insulation, cellulose insulation, and related accessories and machinery to residential and commercial end markets with annual revenue of over$22 million .
2024 Fourth Quarter Cash Dividend
IBP’s Board of Directors has approved the Company’s quarterly cash dividend of
Share Repurchases
During the three months ended
Third Quarter 2024 Results Overview
For the third quarter of 2024, net revenue was
Gross profit improved 6.1% to
Selling and administrative expense, as a percent of total revenue, was 19.1% compared to 18.2% in the prior year quarter. Adjusted selling and administrative expense*, as a percent of net revenue, was 18.5% compared to 17.7% in the prior year quarter.
Net income was
EBITDA* was
Net profit, adjusted net profit, and adjusted EBITDA margin reductions during the quarter were primarily due to a greater proportion of our single-family sales shifting to production builders as well as higher growth in non-insulation product sales relative to a year ago. Additionally, we experienced initial start-up costs related to building out our internal distribution operations and higher insurance expense from the prior year period.
Conference Call and Webcast
The Company will host a conference call and webcast on
About
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the federal securities laws, including with respect to the housing market and the commercial market, our operations, industry and economic conditions, our financial and business model, payment of dividends, the demand for our services and product offerings, expansion of our national footprint and end markets, diversification of our products, our ability to grow and strengthen our market position, our ability to pursue and integrate value-enhancing acquisitions and the expected amount of acquired revenue, our ability to improve sales and profitability, and expectations for demand for our services and our earnings. Forward-looking statements may generally be identified by the use of words such as "anticipate," "believe," "expect," "intends," "plan," and "will" or, in each case, their negative, or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Any forward-looking statements that we make herein and in any future reports and statements are not guarantees of future performance, and actual results may differ materially from those expressed in or suggested by such forward-looking statements as a result of various factors, including, without limitation, general economic and industry conditions; increases in mortgage interest rates and rising home prices; inflation and interest rates; the material price and supply environment; the timing of increases in our selling prices; the risk that the Company may reduce, suspend or eliminate dividend payments in the future; and the factors discussed in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the year ended
*Use of Non-GAAP Financial Measures
In addition to the financial measures prepared in accordance with
During the three months ended
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (unaudited, in millions, except share and per share amounts) |
|||||||||||||||
|
Three months ended |
|
Nine months ended |
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net revenue |
$ |
760.6 |
|
|
$ |
706.5 |
|
|
$ |
2,191.1 |
|
|
$ |
2,057.9 |
|
Cost of sales |
|
503.8 |
|
|
|
464.4 |
|
|
|
1,448.4 |
|
|
|
1,372.9 |
|
Gross profit |
|
256.8 |
|
|
|
242.1 |
|
|
|
742.7 |
|
|
|
685.0 |
|
Operating expenses |
|
|
|
|
|
|
|
||||||||
Selling |
|
35.8 |
|
|
|
32.0 |
|
|
|
103.6 |
|
|
|
97.5 |
|
Administrative |
|
109.2 |
|
|
|
96.8 |
|
|
|
318.5 |
|
|
|
282.3 |
|
Asset impairment |
|
— |
|
|
|
— |
|
|
|
4.9 |
|
|
|
— |
|
Amortization |
|
10.5 |
|
|
|
11.0 |
|
|
|
31.7 |
|
|
|
33.7 |
|
Operating income |
|
101.3 |
|
|
|
102.3 |
|
|
|
284.0 |
|
|
|
271.5 |
|
Other expense, net |
|
|
|
|
|
|
|
||||||||
Interest expense, net |
|
7.7 |
|
|
|
9.7 |
|
|
|
27.8 |
|
|
|
29.2 |
|
Other (income) |
|
(0.3 |
) |
|
|
(0.2 |
) |
|
|
(0.8 |
) |
|
|
(0.5 |
) |
Income before income taxes |
|
93.9 |
|
|
|
92.8 |
|
|
|
257.0 |
|
|
|
242.8 |
|
Income tax provision |
|
25.3 |
|
|
|
24.8 |
|
|
|
67.3 |
|
|
|
63.9 |
|
Net income |
$ |
68.6 |
|
|
$ |
68.0 |
|
|
$ |
189.7 |
|
|
$ |
178.9 |
|
Other comprehensive (loss) income, net of tax: |
|
|
|
|
|
|
|
||||||||
Net change on cash flow hedges, net of tax (provision) benefit of |
|
(10.6 |
) |
|
|
5.5 |
|
|
|
(5.9 |
) |
|
|
4.6 |
|
Comprehensive income |
$ |
58.0 |
|
|
$ |
73.5 |
|
|
$ |
183.8 |
|
|
$ |
183.5 |
|
Earnings Per Share: |
|
|
|
|
|
|
|
||||||||
Basic |
$ |
2.45 |
|
|
$ |
2.41 |
|
|
$ |
6.75 |
|
|
$ |
6.35 |
|
Diluted |
$ |
2.44 |
|
|
$ |
2.40 |
|
|
$ |
6.71 |
|
|
$ |
6.32 |
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
||||||||
Basic |
|
27,986,997 |
|
|
|
28,204,328 |
|
|
|
28,110,587 |
|
|
|
28,151,899 |
|
Diluted |
|
28,116,557 |
|
|
|
28,318,633 |
|
|
|
28,272,667 |
|
|
|
28,290,533 |
|
|
|
|
|
|
|
|
|
||||||||
Cash dividends declared per share |
$ |
0.35 |
|
|
$ |
0.33 |
|
|
$ |
2.65 |
|
|
$ |
1.89 |
|
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited, in millions, except share and per share amounts) |
|||||||
|
|
|
|
||||
|
|
2024 |
|
|
|
2023 |
|
ASSETS |
|
|
|
||||
Current assets |
|
|
|
||||
Cash and cash equivalents |
$ |
406.2 |
|
|
$ |
386.5 |
|
Accounts receivable (less allowance for credit losses of |
|
451.0 |
|
|
|
423.3 |
|
Inventories |
|
182.3 |
|
|
|
162.8 |
|
Prepaid expenses and other current assets |
|
85.3 |
|
|
|
97.4 |
|
Total current assets |
|
1,124.8 |
|
|
|
1,070.0 |
|
Property and equipment, net |
|
167.0 |
|
|
|
137.2 |
|
Operating lease right-of-use assets |
|
86.1 |
|
|
|
78.1 |
|
|
|
415.1 |
|
|
|
398.8 |
|
Customer relationships, net |
|
169.6 |
|
|
|
179.6 |
|
Other intangibles, net |
|
86.2 |
|
|
|
89.1 |
|
Other non-current assets |
|
23.7 |
|
|
|
28.5 |
|
Total assets |
$ |
2,072.5 |
|
|
$ |
1,981.3 |
|
LIABILITIES AND STOCKHOLDER'S EQUITY |
|
|
|
||||
Current liabilities |
|
|
|
||||
Current maturities of long-term debt |
$ |
31.5 |
|
|
$ |
32.2 |
|
Current maturities of operating lease obligations |
|
31.2 |
|
|
|
28.3 |
|
Current maturities of finance lease obligations |
|
2.8 |
|
|
|
2.7 |
|
Accounts payable |
|
169.4 |
|
|
|
158.6 |
|
Accrued compensation |
|
68.6 |
|
|
|
59.6 |
|
Other current liabilities |
|
73.2 |
|
|
|
65.0 |
|
Total current liabilities |
|
376.7 |
|
|
|
346.4 |
|
Long-term debt |
|
840.8 |
|
|
|
835.1 |
|
Operating lease obligations |
|
54.6 |
|
|
|
49.9 |
|
Finance lease obligations |
|
6.0 |
|
|
|
6.6 |
|
Deferred income taxes |
|
22.1 |
|
|
|
24.5 |
|
Other long-term liabilities |
|
55.9 |
|
|
|
48.5 |
|
Total liabilities |
|
1,356.1 |
|
|
|
1,311.0 |
|
Commitments and contingencies (Note 16) |
|
|
|
||||
Stockholders’ equity |
|
|
|
||||
Preferred Stock; |
|
— |
|
|
|
— |
|
Common stock; |
|
0.3 |
|
|
|
0.3 |
|
Additional paid in capital |
|
257.0 |
|
|
|
244.7 |
|
Retained earnings |
|
808.4 |
|
|
|
693.8 |
|
|
|
(377.1 |
) |
|
|
(302.2 |
) |
Accumulated other comprehensive income |
|
27.8 |
|
|
|
33.7 |
|
Total stockholders’ equity |
|
716.4 |
|
|
|
670.3 |
|
Total liabilities and stockholders’ equity |
$ |
2,072.5 |
|
|
$ |
1,981.3 |
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited, in millions) |
|||||||
|
Nine months ended |
||||||
|
|
2024 |
|
|
|
2023 |
|
Cash flows from operating activities |
|
|
|
||||
Net income |
$ |
189.7 |
|
|
$ |
178.9 |
|
Adjustments to reconcile net income to net cash provided by operating activities |
|
|
|
||||
Depreciation and amortization of property and equipment |
|
43.1 |
|
|
|
38.7 |
|
Amortization of operating lease right-of-use assets |
|
24.4 |
|
|
|
21.7 |
|
Amortization of intangibles |
|
31.7 |
|
|
|
33.7 |
|
Amortization of deferred financing costs and debt discount |
|
1.2 |
|
|
|
1.4 |
|
Provision for credit losses |
|
4.9 |
|
|
|
4.4 |
|
Write-off of debt issuance costs |
|
1.1 |
|
|
|
0.9 |
|
Gain on sale of property and equipment |
|
(1.6 |
) |
|
|
(1.5 |
) |
Non-cash stock compensation |
|
13.2 |
|
|
|
10.6 |
|
Asset impairment |
|
4.9 |
|
|
|
— |
|
Other, net |
|
(10.3 |
) |
|
|
(8.8 |
) |
Changes in assets and liabilities, excluding effects of acquisitions |
|
|
|
||||
Accounts receivable |
|
(31.5 |
) |
|
|
(28.7 |
) |
Inventories |
|
(16.4 |
) |
|
|
18.7 |
|
Other assets |
|
5.3 |
|
|
|
10.7 |
|
Accounts payable |
|
7.5 |
|
|
|
(8.3 |
) |
Income taxes receivable/payable |
|
4.6 |
|
|
|
(0.2 |
) |
Other liabilities |
|
(6.6 |
) |
|
|
(21.7 |
) |
Net cash provided by operating activities |
|
265.2 |
|
|
|
250.5 |
|
Cash flows from investing activities |
|
|
|
||||
Purchases of property and equipment |
|
(66.7 |
) |
|
|
(46.9 |
) |
Acquisitions of businesses, net of cash acquired of $— in 2024 and 2023, respectively |
|
(41.9 |
) |
|
|
(44.8 |
) |
Proceeds from sale of property and equipment |
|
2.4 |
|
|
|
2.1 |
|
Settlements with interest rate swap counterparties |
|
13.6 |
|
|
|
12.2 |
|
Other |
|
(1.8 |
) |
|
|
(0.5 |
) |
Net cash used in investing activities |
$ |
(94.4 |
) |
|
$ |
(77.9 |
) |
|
Nine months ended |
||||||
|
|
2024 |
|
|
|
2023 |
|
Cash flows from financing activities |
|
|
|
||||
Proceeds from Term Loan |
$ |
142.9 |
|
|
$ |
— |
|
Payments on Term Loan |
|
(135.5 |
) |
|
|
(3.7 |
) |
Proceeds from vehicle and equipment notes payable |
|
18.8 |
|
|
|
28.4 |
|
Debt issuance costs |
|
(1.5 |
) |
|
|
(0.4 |
) |
Principal payments on long-term debt |
|
(22.7 |
) |
|
|
(22.2 |
) |
Principal payments on finance lease obligations |
|
(2.2 |
) |
|
|
(2.2 |
) |
Dividends paid |
|
(75.0 |
) |
|
|
(53.8 |
) |
Acquisition-related obligations |
|
(1.5 |
) |
|
|
(2.7 |
) |
Repurchase of common stock |
|
(66.4 |
) |
|
|
— |
|
Surrender of common stock awards by employees |
|
(8.0 |
) |
|
|
(5.8 |
) |
Net cash used in financing activities |
|
(151.1 |
) |
|
|
(62.4 |
) |
Net change in cash and cash equivalents |
|
19.7 |
|
|
|
110.2 |
|
Cash and cash equivalents at beginning of period |
|
386.5 |
|
|
|
229.6 |
|
Cash and cash equivalents at end of period |
$ |
406.2 |
|
|
$ |
339.8 |
|
Supplemental disclosures of cash flow information |
|
|
|
||||
Net cash paid during the period for: |
|
|
|
||||
Interest |
$ |
37.0 |
|
|
$ |
36.3 |
|
Income taxes, net of refunds |
|
62.8 |
|
|
|
64.2 |
|
Supplemental disclosure of non-cash activities |
|
|
|
||||
Right-of-use assets obtained in exchange for operating lease obligations |
$ |
31.5 |
|
|
$ |
23.2 |
|
Property and equipment obtained in exchange for finance lease obligations |
|
1.9 |
|
|
|
2.9 |
|
Seller obligations in connection with acquisition of businesses |
|
3.8 |
|
|
|
8.3 |
|
Unpaid purchases of property and equipment included in accounts payable |
|
5.5 |
|
|
|
1.9 |
|
Accrued excise tax on common stock repurchases |
|
0.5 |
|
|
|
— |
|
SEGMENT INFORMATION (unaudited, in millions)
Information on Segments
Our Company has three operating segments consisting of Installation, Distribution and Manufacturing. The Other category reported below reflects the operations of our Distribution and Manufacturing operating segments. |
|||||||||||||||||||||||||||||||
|
Three months ended |
|
Nine months ended |
||||||||||||||||||||||||||||
|
Installation |
|
Other |
|
Eliminations |
|
Consolidated |
|
Installation |
|
Other |
|
Eliminations |
|
Consolidated |
||||||||||||||||
Revenue |
$ |
713.7 |
|
|
$ |
51.7 |
|
|
$ |
(4.8 |
) |
|
$ |
760.6 |
|
|
$ |
2,066.9 |
|
|
$ |
136.0 |
|
|
$ |
(11.8 |
) |
|
$ |
2,191.1 |
|
Cost of sales (1) |
|
455.9 |
|
|
|
37.0 |
|
|
|
(3.3 |
) |
|
|
489.6 |
|
|
|
1,318.4 |
|
|
|
98.0 |
|
|
|
(8.4 |
) |
|
|
1,408.0 |
|
Segment gross profit |
$ |
257.8 |
|
|
$ |
14.7 |
|
|
$ |
(1.5 |
) |
|
$ |
271.0 |
|
|
$ |
748.5 |
|
|
$ |
38.0 |
|
|
$ |
(3.4 |
) |
|
$ |
783.1 |
|
Segment gross profit percentage |
|
36.1 |
% |
|
|
28.4 |
% |
|
|
30.1 |
% |
|
|
35.6 |
% |
|
|
36.2 |
% |
|
|
27.9 |
% |
|
|
28.5 |
% |
|
|
35.7 |
% |
|
Three months ended |
|
Nine months ended |
||||||||||||||||||||||||||||
|
Installation |
|
Other |
|
Eliminations |
|
Consolidated |
|
Installation |
|
Other |
|
Eliminations |
|
Consolidated |
||||||||||||||||
Revenue |
$ |
661.2 |
|
|
$ |
47.5 |
|
|
$ |
(2.2 |
) |
|
$ |
706.5 |
|
|
$ |
1,935.8 |
|
|
$ |
128.5 |
|
|
$ |
(6.4 |
) |
|
$ |
2,057.9 |
|
Cost of sales (1) |
|
419.5 |
|
|
|
34.0 |
|
|
|
(1.6 |
) |
|
|
451.9 |
|
|
|
1,248.5 |
|
|
|
92.8 |
|
|
|
(4.9 |
) |
|
|
1,336.4 |
|
Segment gross profit |
$ |
241.7 |
|
|
$ |
13.5 |
|
|
$ |
(0.6 |
) |
|
$ |
254.6 |
|
|
$ |
687.3 |
|
|
$ |
35.7 |
|
|
$ |
(1.5 |
) |
|
$ |
721.5 |
|
Segment gross profit percentage |
|
36.6 |
% |
|
|
28.4 |
% |
|
|
26.4 |
% |
|
|
36.0 |
% |
|
|
35.5 |
% |
|
|
27.8 |
% |
|
|
22.4 |
% |
|
|
35.1 |
% |
(1) |
Cost of sales included in segment gross profit is exclusive of depreciation and amortization for the three and nine months ended |
The reconciliation between consolidated segment gross profit for each period as shown in the tables above to consolidated income before income taxes as follows: |
|||||||||||
|
Three months ended |
|
Nine months ended |
||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
Segment gross profit - consolidated |
$ |
271.0 |
|
$ |
254.6 |
|
$ |
783.1 |
|
$ |
721.5 |
Depreciation and amortization (1) |
|
14.2 |
|
|
12.5 |
|
|
40.4 |
|
|
36.5 |
Gross profit, as reported |
|
256.8 |
|
|
242.1 |
|
|
742.7 |
|
|
685.0 |
Operating expenses |
|
155.5 |
|
|
139.8 |
|
|
458.7 |
|
|
413.5 |
Operating income |
|
101.3 |
|
|
102.3 |
|
|
284.0 |
|
|
271.5 |
Other expense, net |
|
7.4 |
|
|
9.5 |
|
|
27.0 |
|
|
28.7 |
Income before income taxes |
$ |
93.9 |
|
$ |
92.8 |
|
$ |
257.0 |
|
$ |
242.8 |
(1) |
Depreciation and amortization is excluded from segment gross profit for the three and nine months ended |
REVENUE BY END MARKET (unaudited, in millions) |
|||||||||||||||||||||||
|
Three months ended |
|
Nine months ended |
||||||||||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||||||||||
Installation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Residential new construction |
$ |
548.8 |
|
72 |
% |
|
$ |
518.1 |
|
73 |
% |
|
$ |
1,594.0 |
|
73 |
% |
|
$ |
1,488.9 |
|
72 |
% |
Repair and remodel |
|
44.9 |
|
6 |
% |
|
|
37.8 |
|
6 |
% |
|
|
127.5 |
|
6 |
% |
|
|
114.4 |
|
6 |
% |
Commercial |
|
120.0 |
|
16 |
% |
|
|
105.3 |
|
15 |
% |
|
|
345.4 |
|
15 |
% |
|
|
332.5 |
|
16 |
% |
Net revenues - Installation |
$ |
713.7 |
|
94 |
% |
|
$ |
661.2 |
|
94 |
% |
|
$ |
2,066.9 |
|
94 |
% |
|
$ |
1,935.8 |
|
94 |
% |
Other |
|
46.9 |
|
6 |
% |
|
|
45.3 |
|
6 |
% |
|
|
124.2 |
|
6 |
% |
|
|
122.1 |
|
6 |
% |
Net revenue, as reported |
$ |
760.6 |
|
100 |
% |
|
$ |
706.5 |
|
100 |
% |
|
$ |
2,191.1 |
|
100 |
% |
|
$ |
2,057.9 |
|
100 |
% |
Reconciliation of Non-GAAP Financial Measures
EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, Adjusted Gross Profit and Adjusted Selling and Administrative Expense measure performance by adjusting GAAP net income, EBITDA, gross profit and selling and administrative expense, respectively, for certain income or expense items that are not considered part of our core operations. We believe that the presentation of these measures provides useful information to investors regarding our results of operations because it assists both investors and us in analyzing and benchmarking the performance and value of our business.
We believe the Adjusted EBITDA measure is useful to investors and us as a measure of comparative operating performance from period to period as it measures our changes in pricing decisions, cost controls and other factors that impact operating performance, and removes the effect of our capital structure (primarily interest expense), asset base (primarily depreciation and amortization), items outside our control (primarily income taxes) and the volatility related to the timing and extent of other activities such as asset impairments and non-core income and expenses. Accordingly, we believe that this measure is useful for comparing general operating performance from period to period. In addition, we use various EBITDA-based measures in determining the achievement of awards under certain of our incentive compensation programs. Other companies may define Adjusted EBITDA differently and, as a result, our measure may not be directly comparable to measures of other companies. In addition, Adjusted EBITDA may be defined differently for purposes of covenants contained in our revolving credit facility or any future facility.
Although we use the Adjusted EBITDA measure to assess the performance of our business, the use of the measure is limited because it does not include certain material expenses, such as interest and taxes, necessary to operate our business. Adjusted EBITDA should be considered in addition to, and not as a substitute for, GAAP net income as a measure of performance. Our presentation of this measure should not be construed as an indication that our future results will be unaffected by unusual or non-recurring items. This measure has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Because of these limitations, this measure is not intended as an alternative to net income as an indicator of our operating performance, as an alternative to any other measure of performance in conformity with GAAP or as an alternative to cash flow provided by operating activities as a measure of liquidity. You should therefore not place undue reliance on this measure or ratios calculated using this measure.
We also believe the Adjusted Net Income measure is useful to investors and us as a measure of comparative operating performance from period to period as it measures our changes in pricing decisions, cost controls and other factors that impact operating performance, and removes the effect of certain non-core items such as discontinued operations, acquisition related expenses, amortization expense, the tax impact of these certain non-core items, and the volatility related to the timing and extent of other activities such as asset impairments and non-core income and expenses. To make the financial presentation more consistent with other public building products companies, beginning in the fourth quarter 2016 we included an addback for non-cash amortization expense related to acquisitions. Accordingly, we believe that this measure is useful for comparing general operating performance from period to period. Other companies may define Adjusted Net Income differently and, as a result, our measure may not be directly comparable to measures of other companies. In addition, Adjusted Net Income may be defined differently for purposes of covenants contained in our revolving credit facility or any future facility.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES ADJUSTED NET INCOME CALCULATIONS (unaudited, in millions, except share and per share amounts)
The tables below reconcile Adjusted Net Income, Adjusted Net Income, net of dispositions, and Adjusted Net Loss, dispositions to the most directly comparable GAAP financial measure, net income, for the periods presented therein. We have included Adjusted Net Income, net of dispositions, in this press release because it is a key measure used by our management team to understand the operating performance and profitability of our business. During the three months ended
Per share figures may reflect rounding adjustments and consequently totals may not appear to sum. |
||||||||||||||||
|
|
Three months ended |
|
Nine months ended |
||||||||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net income, as reported |
|
$ |
68.6 |
|
|
$ |
68.0 |
|
|
$ |
189.7 |
|
|
$ |
178.9 |
|
Adjustments for adjusted net income |
|
|
|
|
|
|
|
|
||||||||
Share-based compensation expense |
|
|
4.5 |
|
|
|
3.5 |
|
|
|
13.2 |
|
|
|
10.6 |
|
Acquisition related expenses |
|
|
0.5 |
|
|
|
0.2 |
|
|
|
1.6 |
|
|
|
1.3 |
|
Amortization expense (1) |
|
|
10.5 |
|
|
|
11.0 |
|
|
|
31.7 |
|
|
|
33.7 |
|
Legal reserve |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1.3 |
|
Loan refinancing expenses (2) |
|
|
— |
|
|
|
— |
|
|
|
4.1 |
|
|
|
— |
|
Asset impairment (3) |
|
|
— |
|
|
|
— |
|
|
|
4.9 |
|
|
|
— |
|
Tax impact of adjusted items at a normalized tax rate (4) |
|
|
(4.0 |
) |
|
|
(3.8 |
) |
|
|
(14.4 |
) |
|
|
(12.2 |
) |
Adjusted net income |
|
$ |
80.1 |
|
|
$ |
78.9 |
|
|
$ |
230.8 |
|
|
$ |
213.6 |
|
Less: Adjusted net income (loss), dispositions (5) |
|
|
0.1 |
|
|
|
(1.0 |
) |
|
|
(6.4 |
) |
|
|
(1.7 |
) |
Adjusted net income, net of dispositions |
|
$ |
80.0 |
|
|
$ |
79.9 |
|
|
$ |
237.2 |
|
|
$ |
215.3 |
|
Weighted average shares outstanding (diluted) |
|
|
28,116,557 |
|
|
|
28,318,633 |
|
|
|
28,272,667 |
|
|
|
28,290,533 |
|
Diluted net income per share, as reported |
|
$ |
2.44 |
|
|
$ |
2.40 |
|
|
$ |
6.71 |
|
|
$ |
6.32 |
|
Adjustments for diluted adjusted net income, net of tax impact, per share (6) |
|
|
0.41 |
|
|
|
0.39 |
|
|
|
1.45 |
|
|
|
1.23 |
|
Diluted adjusted net income per share |
|
$ |
2.85 |
|
|
$ |
2.79 |
|
|
$ |
8.16 |
|
|
$ |
7.55 |
|
Less: Diluted adjusted net income (loss), dispositions, net of tax impact, per share (5) |
|
|
— |
|
|
|
(0.04 |
) |
|
|
(0.23 |
) |
|
|
(0.06 |
) |
Diluted adjusted net income, net of dispositions per share |
|
$ |
2.85 |
|
|
$ |
2.83 |
|
|
$ |
8.39 |
|
|
$ |
7.61 |
|
(1) |
Addback of all non-cash amortization resulting from business combinations. |
(2) |
Includes |
(3) |
During the nine months ended |
(4) |
Normalized effective tax rate of 26.0% applied to periods presented. |
(5) |
Represents adjusted net income (loss) and diluted adjusted net income (loss), per share of a single branch. Please see preceding paragraph at the beginning of this section for additional information. |
(6) |
Includes adjustments related to the items noted above, net of tax. |
|
|
Three months ended |
|
Nine months ended |
|||||||||||
|
|
|
2024 |
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net income (loss), dispositions, as reported |
|
$ |
0.1 |
|
$ |
(1.1 |
) |
|
$ |
(10.2 |
) |
|
$ |
(1.9 |
) |
Amortization expense |
|
|
— |
|
|
0.1 |
|
|
|
0.2 |
|
|
|
0.3 |
|
Asset impairment (1) |
|
|
— |
|
|
— |
|
|
|
4.9 |
|
|
|
— |
|
Tax impact of adjusted items at a normalized tax rate (2) |
|
|
— |
|
|
— |
|
|
|
(1.3 |
) |
|
|
(0.1 |
) |
Adjusted net income (loss), dispositions (3) |
|
$ |
0.1 |
|
$ |
(1.0 |
) |
|
$ |
(6.4 |
) |
|
$ |
(1.7 |
) |
(1) |
During the nine months ended |
(2) |
Normalized effective tax rate of 26.0% applied to periods presented. |
(3) |
Represents Adjusted net income (loss) of a single branch. Please see preceding paragraph at the beginning of this section for additional information. |
RECONCILIATION OF GAAP TO NON-GAAP MEASURES ADJUSTED GROSS PROFIT CALCULATIONS (unaudited, in millions)
The table below reconciles Adjusted Gross Profit to the most directly comparable GAAP financial measure, gross profit, for the periods presented therein. |
||||||||||||||||
|
|
Three months ended |
|
Nine months ended |
||||||||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Gross profit |
|
$ |
256.8 |
|
|
$ |
242.1 |
|
|
$ |
742.7 |
|
|
$ |
685.0 |
|
Share-based compensation expense |
|
|
0.2 |
|
|
|
0.3 |
|
|
|
0.8 |
|
|
|
0.7 |
|
Adjusted gross profit |
|
$ |
257.0 |
|
|
$ |
242.4 |
|
|
$ |
743.5 |
|
|
$ |
685.7 |
|
|
|
|
|
|
|
|
|
|
||||||||
Gross profit margin |
|
|
33.8 |
% |
|
|
34.3 |
% |
|
|
33.9 |
% |
|
|
33.3 |
% |
Adjusted gross profit margin |
|
|
33.8 |
% |
|
|
34.3 |
% |
|
|
33.9 |
% |
|
|
33.3 |
% |
RECONCILIATION OF GAAP TO NON-GAAP MEASURES ADJUSTED SELLING AND ADMINISTRATIVE EXPENSE CALCULATIONS (unaudited, in millions)
The table below reconciles Adjusted Selling and Administrative to the most directly comparable GAAP financial measure, selling and administrative, for the periods presented therein. |
||||||||||||||||
|
|
Three months ended |
|
Nine months ended |
||||||||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Selling expense |
|
$ |
35.8 |
|
|
$ |
32.0 |
|
|
$ |
103.6 |
|
|
$ |
97.5 |
|
Administrative expense |
|
|
109.2 |
|
|
|
96.8 |
|
|
|
318.5 |
|
|
|
282.3 |
|
Selling and Administrative expense, as reported |
|
|
145.0 |
|
|
|
128.8 |
|
|
|
422.1 |
|
|
|
379.8 |
|
Share-based compensation expense |
|
|
4.1 |
|
|
|
3.3 |
|
|
|
12.3 |
|
|
|
10.0 |
|
Acquisition related expenses |
|
|
0.5 |
|
|
|
0.2 |
|
|
|
1.6 |
|
|
|
1.3 |
|
Legal reserve |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1.3 |
|
Adjusted Selling and Administrative expense |
|
$ |
140.4 |
|
|
$ |
125.3 |
|
|
$ |
408.2 |
|
|
$ |
367.2 |
|
|
|
|
|
|
|
|
|
|
||||||||
Selling and Administrative expense - % Total revenue |
|
|
19.1 |
% |
|
|
18.2 |
% |
|
|
19.3 |
% |
|
|
18.5 |
% |
Adjusted Selling and Administrative expense - % Total revenue |
|
|
18.5 |
% |
|
|
17.7 |
% |
|
|
18.6 |
% |
|
|
17.8 |
% |
RECONCILIATION OF GAAP TO NON-GAAP MEASURES EBITDA AND ADJUSTED EBITDA CALCULATIONS (unaudited, in millions)
The tables below reconcile EBITDA, Adjusted EBITDA, Adjusted EBITDA, net of dispositions and Adjusted EBITDA, dispositions to the most directly comparable GAAP financial measure, net income, for the periods presented therein. We have included Adjusted EBITDA, net of dispositions, in this press release because it is a key measure used by our management team to understand the operating performance and profitability of our business. During the three months ended |
||||||||||||||||
|
|
Three months ended |
|
Nine months ended |
||||||||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net income, as reported |
|
$ |
68.6 |
|
|
$ |
68.0 |
|
|
$ |
189.7 |
|
|
$ |
178.9 |
|
Interest expense |
|
|
7.7 |
|
|
|
9.7 |
|
|
|
27.8 |
|
|
|
29.2 |
|
Provision for income tax |
|
|
25.3 |
|
|
|
24.8 |
|
|
|
67.3 |
|
|
|
63.9 |
|
Depreciation and amortization |
|
|
25.7 |
|
|
|
24.3 |
|
|
|
74.9 |
|
|
|
72.4 |
|
EBITDA |
|
|
127.3 |
|
|
|
126.8 |
|
|
|
359.7 |
|
|
|
344.4 |
|
Acquisition related expenses |
|
|
0.5 |
|
|
|
0.2 |
|
|
|
1.6 |
|
|
|
1.3 |
|
Share based compensation expense |
|
|
4.5 |
|
|
|
3.5 |
|
|
|
13.2 |
|
|
|
10.6 |
|
Legal reserve |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1.3 |
|
Asset impairment (1) |
|
|
— |
|
|
|
— |
|
|
|
4.9 |
|
|
|
— |
|
Adjusted EBITDA |
|
$ |
132.3 |
|
|
$ |
130.5 |
|
|
$ |
379.4 |
|
|
$ |
357.6 |
|
Adjusted EBITDA, dispositions (2) |
|
|
0.2 |
|
|
|
(1.2 |
) |
|
|
(8.4 |
) |
|
|
(1.7 |
) |
Adjusted EBITDA, net of dispositions (3) |
|
$ |
132.1 |
|
|
$ |
131.7 |
|
|
$ |
387.8 |
|
|
$ |
359.3 |
|
|
|
|
|
|
|
|
|
|
||||||||
Net profit margin |
|
|
9.0 |
% |
|
|
9.6 |
% |
|
|
8.7 |
% |
|
|
8.7 |
% |
EBITDA margin |
|
|
16.7 |
% |
|
|
18.0 |
% |
|
|
16.4 |
% |
|
|
16.7 |
% |
Adjusted EBITDA margin |
|
|
17.4 |
% |
|
|
18.5 |
% |
|
|
17.3 |
% |
|
|
17.4 |
% |
Adjusted EBITDA margin, net of dispositions (3) |
|
|
17.4 |
% |
|
|
18.7 |
% |
|
|
17.7 |
% |
|
|
17.6 |
% |
(1) |
During the nine months ended |
(2) |
Represents Adjusted EBITDA of a single branch. Please see preceding paragraph at the beginning of this section for additional information. |
(3) |
Adjusted EBITDA, net of dispositions and Adjusted EBITDA margin, net of dispositions exclude the results of a single branch. Please see preceding paragraph at the beginning of this section for additional information. |
|
|
Three months ended |
|
Nine months ended |
||||||||
|
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
Net revenue, as reported |
|
$ |
760.6 |
|
$ |
706.5 |
|
$ |
2,191.1 |
|
$ |
2,057.9 |
Less: net revenue, dispositions (1) |
|
|
3.3 |
|
|
3.3 |
|
|
2.8 |
|
|
14.8 |
Net revenue, net of dispositions |
|
$ |
757.3 |
|
$ |
703.2 |
|
$ |
2,188.3 |
|
$ |
2,043.1 |
(1) |
Represents net revenue of a single branch. Please see preceding paragraph at the beginning of this section for additional information. |
|
|
Three months ended |
|
Nine months ended |
|||||||||||
|
|
|
2024 |
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net income (loss), dispositions, as reported |
|
$ |
0.1 |
|
$ |
(1.1 |
) |
|
$ |
(10.2 |
) |
|
$ |
(1.9 |
) |
Interest expense |
|
|
0.1 |
|
|
0.1 |
|
|
|
0.2 |
|
|
|
0.4 |
|
(Benefit) for income tax |
|
|
— |
|
|
(0.4 |
) |
|
|
(3.6 |
) |
|
|
(0.7 |
) |
Depreciation and amortization |
|
|
— |
|
|
0.2 |
|
|
|
0.3 |
|
|
|
0.5 |
|
EBITDA, dispositions |
|
|
0.2 |
|
|
(1.2 |
) |
|
|
(13.3 |
) |
|
|
(1.7 |
) |
Asset impairment (1) |
|
|
— |
|
|
— |
|
|
|
4.9 |
|
|
|
— |
|
Adjusted EBITDA, dispositions (2) |
|
$ |
0.2 |
|
$ |
(1.2 |
) |
|
$ |
(8.4 |
) |
|
$ |
(1.7 |
) |
(1) |
During the nine months ended |
(2) |
Represents Adjusted EBITDA of a single branch. Please see preceding paragraph at the beginning of this section for additional information. |
SUPPLEMENTARY TABLE (unaudited) |
||||||||
|
|
Three months ended |
|
Nine months ended |
||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
Period-over-period Growth |
|
|
|
|
|
|
|
|
Consolidated Sales Growth |
|
7.7% |
|
(1.8)% |
|
6.5% |
|
3.8% |
Consolidated Same Branch Sales Growth |
|
5.2% |
|
(5.2)% |
|
4.3% |
|
(0.3)% |
|
|
|
|
|
|
|
|
|
Installation |
|
|
|
|
|
|
|
|
Sales Growth |
|
7.9% |
|
(1.7)% |
|
6.8% |
|
3.4% |
Same Branch Sales Growth |
|
5.4% |
|
(5.4)% |
|
4.6% |
|
(0.5)% |
|
|
|
|
|
|
|
|
|
Single-Family Sales Growth |
|
8.8% |
|
(8.7)% |
|
7.7% |
|
(6.0)% |
Single-Family Same Branch Sales Growth |
|
5.7% |
|
(12.2)% |
|
5.1% |
|
(9.7)% |
|
|
|
|
|
|
|
|
|
Multi-Family Sales Growth |
|
3.6% |
|
30.9% |
|
7.5% |
|
36.4% |
Multi-Family Same Branch Sales Growth |
|
2.4% |
|
28.4% |
|
6.6% |
|
34.7% |
|
|
|
|
|
|
|
|
|
Residential Sales Growth |
|
7.7% |
|
(2.7)% |
|
7.7% |
|
0.6% |
Residential Same Branch Sales Growth |
|
5.0% |
|
(6.0)% |
|
5.4% |
|
(2.8)% |
|
|
|
|
|
|
|
|
|
Commercial Sales Growth(1) |
|
7.7% |
|
3.7% |
|
2.0% |
|
17.7% |
Commercial Same Branch Sales Growth |
|
6.1% |
|
(1.3)% |
|
(0.1)% |
|
11.8% |
|
|
|
|
|
|
|
|
|
Other (2) |
|
|
|
|
|
|
|
|
Sales Growth |
|
9.1% |
|
(0.7)% |
|
6.0% |
|
12.0% |
Same Branch Sales Growth |
|
7.2% |
|
(0.7)% |
|
4.7% |
|
4.5% |
|
|
|
|
|
|
|
|
|
Same Branch Sales Growth - Installation |
|
|
|
|
|
|
|
|
Volume Growth(3) |
|
2.6% |
|
(10.8)% |
|
0.0% |
|
(10.1)% |
Price/Mix Growth(3) |
|
2.7% |
|
3.5% |
|
4.3% |
|
8.6% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Completions Growth |
|
22.7% |
|
(1.4)% |
|
13.7% |
|
5.0% |
Single-Family Completions Growth |
|
5.7% |
|
(4.7)% |
|
2.5% |
|
(2.1)% |
Multi-Family Completions Growth |
|
62.3% |
|
5.0% |
|
37.7% |
|
24.6% |
(1) |
Our commercial end market consists of heavy and light commercial projects. |
(2) |
Other business segment category includes our manufacturing and distribution businesses operating segments. |
(3) |
The heavy commercial end market is excluded from these metrics given its much larger per-job revenue compared to our average job. |
(4) |
|
INCREMENTAL REVENUE AND ADJUSTED EBITDA MARGINS (unaudited, in millions) |
||||||||||||||||||||||||||
Revenue Increase |
|
|
|
|
|
|
|
|
||||||||||||||||||
|
|
Three months ended |
|
Nine months ended |
||||||||||||||||||||||
|
|
|
2024 |
|
% Total |
|
|
2023 |
|
|
% Total |
|
|
2024 |
|
% Total |
|
|
2023 |
|
|
% Total |
||||
Same Branch |
|
$ |
36.6 |
|
67.7 |
% |
|
$ |
(37.4 |
) |
|
295.9 |
% |
|
$ |
88.5 |
|
66.4 |
% |
|
$ |
(6.5 |
) |
|
(8.7 |
)% |
Acquired |
|
|
17.5 |
|
32.3 |
% |
|
|
24.8 |
|
|
(195.9 |
)% |
|
|
44.7 |
|
33.6 |
% |
|
|
81.0 |
|
|
108.7 |
% |
Total |
|
$ |
54.1 |
|
100.0 |
% |
|
$ |
(12.6 |
) |
|
100.0 |
% |
|
$ |
133.2 |
|
100.0 |
% |
|
$ |
74.5 |
|
|
100.0 |
% |
Adjusted EBITDA Margin Contributions * |
|||||||||||||||||||||||||
|
|
Three months ended |
|
Nine months ended |
|||||||||||||||||||||
|
|
|
2024 |
|
|
% Margin |
|
|
2023 |
|
% Margin |
|
|
2024 |
|
% Margin |
|
|
2023 |
|
% Margin |
||||
Same Branch(1) |
|
$ |
(1.4 |
) |
|
(3.8 |
)% |
|
$ |
5.5 |
|
(14.7 |
)% |
|
$ |
13.7 |
|
15.5 |
% |
|
$ |
19.1 |
|
(293.8 |
)% |
Acquired |
|
|
3.3 |
|
|
18.9 |
% |
|
|
4.8 |
|
19.4 |
% |
|
|
8.1 |
|
18.1 |
% |
|
|
14.7 |
|
18.1 |
% |
Total |
|
$ |
1.9 |
|
|
3.5 |
% |
|
$ |
10.3 |
|
(81.7 |
)% |
|
$ |
21.8 |
|
16.4 |
% |
|
$ |
33.8 |
|
45.4 |
% |
(1) |
Same branch adjusted EBITDA margin contribution percentage is a percentage of same branch revenue increase. |
* |
During the three months ended |
Revenue Increase, Net of Dispositions (1) |
||||||||||||||||||||||||||
|
|
Three months ended |
|
Nine months ended |
||||||||||||||||||||||
|
|
|
2024 |
|
% Total |
|
|
2023 |
|
|
% Total |
|
|
2024 |
|
% Total |
|
|
2023 |
|
|
% Total |
||||
Same Branch |
|
$ |
36.6 |
|
67.7 |
% |
|
$ |
(30.7 |
) |
|
520.3 |
% |
|
$ |
100.5 |
|
69.2 |
% |
|
$ |
(1.1 |
) |
|
(1.4 |
)% |
Acquired |
|
|
17.5 |
|
32.3 |
% |
|
|
24.8 |
|
|
(420.3 |
)% |
|
|
44.7 |
|
30.8 |
% |
|
|
81.0 |
|
|
101.4 |
% |
Total |
|
$ |
54.1 |
|
100.0 |
% |
|
$ |
(5.9 |
) |
|
100.0 |
% |
|
$ |
145.2 |
|
100.0 |
% |
|
$ |
79.9 |
|
|
100.0 |
% |
(1) |
Please see the section - Reconciliation of GAAP to Non-GAAP measures EBITDA and Adjusted EBITDA calculations - in this press release for additional information. |
Adjusted EBITDA, Net of Dispositions Margin Contributions (1) * |
|||||||||||||||||||||||||
|
|
Three months ended |
|
Nine months ended |
|||||||||||||||||||||
|
|
|
2024 |
|
|
% Margin |
|
|
2023 |
|
% Margin |
|
|
2024 |
|
% Margin |
|
|
2023 |
|
% Margin |
||||
Same Branch(2) |
|
$ |
(2.8 |
) |
|
(7.7 |
)% |
|
$ |
6.5 |
|
(21.2 |
)% |
|
$ |
20.4 |
|
20.3 |
% |
|
$ |
19.3 |
|
(1754.5 |
)% |
Acquired |
|
|
3.3 |
|
|
18.9 |
% |
|
|
4.8 |
|
19.4 |
% |
|
|
8.1 |
|
18.1 |
% |
|
|
14.7 |
|
18.1 |
% |
Total |
|
$ |
0.5 |
|
|
0.9 |
% |
|
$ |
11.3 |
|
(191.5 |
)% |
|
$ |
28.5 |
|
19.6 |
% |
|
$ |
34.0 |
|
42.6 |
% |
(1) |
Please see the section - Reconciliation of GAAP to Non-GAAP measures EBITDA and Adjusted EBITDA calculations - in this press release for additional information. |
(2) |
Same branch adjusted EBITDA margin contribution percentage is a percentage of same branch revenue increase. |
* |
During the three months ended |
View source version on businesswire.com: https://www.businesswire.com/news/home/20241106262424/en/
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