TopBuild Reports Fourth Quarter and Full Year 2021 Results

2/22/2022, 12:45 PM (Source: GlobeNewswire)

4Q Highlights

  • Sales increase 47.4% to $1.1 billion, same branch revenue increases 12.5%

  • Net income increases 10.7% to $78.4 million, and 44.9% on an adjusted basis

  • $2.37 net income per diluted share, $3.12 on an adjusted basis

  • Adjusted EBITDA margin expands 30 basis points to 17.1%, 19.0% on a same branch basis, up 220 basis points
Provides 2022 Sales, Adjusted EBITDA Guidance and Long-Term Assumptions

DAYTONA BEACH, Fla., Feb. 22, 2022 (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 fourth quarter ended December 31, 2021.

Robert Buck, President and Chief Executive Officer, stated, “We are pleased with our fourth quarter results. Our same branch adjusted EBITDA margin was a healthy 19.0% with same branch incremental adjusted margin of 36.0%. The integration of DI, while in the early stages, is proceeding ahead of expectations and we are even more confident we will achieve the $35 million to $40 million of synergies forecasted when we first announced this transaction.”

Fourth Quarter Financial Highlights
(unless otherwise indicated, comparisons are to the quarter ended December 31, 2020)

3 Months Ended 12/31/21ReportedChange 
Sales$1,063,39847.4% 
Gross Margin26.6%(80) bps 
SG&A$164,71873.5% 
SG&A as % of revenue15.5%230 bps 
Operating Profit$118,44314.9% 
Operating Margin11.1%(320) bps 
Net Income$78,36010.7% 
Net Income per diluted share$2.3711.0% 
    
    
3 Months Ended 12/31/21AdjustedChange 
Sales$1,063,39847.4% 
Gross Margin28.1%60 bps 
SG&A$148,26857.0% 
SG&A as % of revenue13.9%80 bps 
Operating Profit$150,74645.0% 
Operating Margin14.2%(20) bps 
Net Income$103,30844.9% 
Net Income per diluted share$3.1245.1% 
EBITDA$182,07249.9% 
EBITDA Margin17.1%30 bps 
EBITDA Margin, Same Branch19.0%220 bps 

2021 was a strong year for TopBuild with solid top line growth and margin expansion within our legacy business,” Buck added. “Our team did an outstanding job managing multiple material cost increases while also balancing strong demand against persistent supply and labor constraints. During the year we also completed 11 acquisitions which are expected to contribute over $1 billion of annual revenue.

“Looking at 2022, we expect demand to remain solid in all three of the end-markets we serve: residential, commercial and industrial. Our focus throughout all areas of our business remains unchanged: driving top line growth, continuing the successful integration of DI, and improving operational efficiencies.”

Full Year 2021 Financial Highlights
(unless otherwise indicated, comparisons are to twelve months ended December 31, 2020)

12 Months Ended 12/31/21ReportedChange 
Sales$3,486,20728.3% 
Gross Margin27.9%40 bps 
SG&A$497,97027.3% 
SG&A as % of revenue14.3%(10) bps 
Operating Profit$476,41934.2% 
Operating Margin13.7%60 bps 
Net Income$324,01631.2% 
Net Income per diluted share$9.7831.8% 
    
    
12 Months Ended 12/31/21AdjustedChange 
Sales$3,486,20728.3% 
Gross Margin28.4%90 bps 
SG&A$475,59222.2% 
SG&A as % of revenue13.6%70 bps 
Operating Profit$515,24243.4% 
Operating Margin14.8%160 bps 
Net Income$359,71648.3% 
Net Income per diluted share$10.8549.0% 
EBITDA$605,94838.7% 
EBITDA Margin17.4%130 bps 
EBITDA Margin, Same Branch18.1%200 bps 
    

Operating Segment Highlights ($ in 000s)
(comparisons are to the period ended December 31, 2020)

Installation3 Months
Ended
12/31/21
12 Months
Ended
12/31/21
 Specialty
Distribution
3 Months
Ended
12/31/21
12 Months
Ended
12/31/21
Sales$627,123$2,378,401 Sales$485,813$1,287,176
Change   Change  
Volume1.2%4.5% Volume-6.8%3.3%
Price11.0%6.5% Price22.4%13.7%
M&A11.1%11.4% M&A77.6%22.0%
Total Change23.3%22.4% Total Change93.1%39.0%
Operating Margin16.9%16.1% Operating Margin9.0%13.2%
Change90 bps90 bps Change(440) bps70 bps
Adj. Operating Margin17.0%16.2% Adj. Operating Margin12.4%14.4%
Change90 bps90 bps Change(100) bps190 bps
Adj. EBITDA Margin19.4%18.7% Adj. EBITDA Margin15.0%16.0%
Change80 bps80 bps Change70 bps230 bps


Capital Allocation   
 TTM Revenue at Month 
2021 AcquisitionsAcquisition ($ millions)Acquired    Business Focus
LCR Contractors (I)$58.0JanuaryHeavy Commercial/Fireproofing
Ozark Foam (I)$7.7MarchResidential, primarily spray foam
American Building Systems (I&D)$144.0AprilResidential (94%) & Distribution (6%)
Creative Conservation (I)$7.4AprilResidential insulation
RJ Insulation (I)$4.0JuneResidential, shower doors/mirrors
Valley Gutter Supply (D)$10.0AugustSpecialty distributor and fabricator
California Building Products (I)$18.0OctoberResidential and light commercial
Distribution International (D)$747.0OctoberSpecialty distributor and fabricator
Tonks Insulation (I)$4.8NovemberResidential insulation
Shepherds Insulation (I)$1.9NovemberResidential insulation
Insulating Products (D)$11.0DecemberResidential distributor
Total $1,013.8  

I = Installation
D = Distribution

“We remain focused on acquiring quality installation and specialty distribution companies that fit within our core insulation businesses. Our pipeline is robust, and our team is focused on expanding our presence in all three end markets we serve,” stated Buck.

Share repurchases
In 2021, the Company repurchased a total of 183,136 shares of its common stock for approximately $35.6 million.

2022 Outlook

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

2022LowHigh
 
Sales$4,500$4,650 
Adjusted EBITDA*$770$820 

*See table for adjusted EBITDA reconciliation.

Assumptions(1)   
($ in millions)
   
2022LowHigh
 
Estimated net income$423.0$470.1 
Interest Expense and other, net$50.3$46.2 
Income tax expense$148.6$165.2 
Depreciation and Amortization$126.4$121.3 
Share based compensation$13.7$11.2 
Acquisition related costs$8.0$6.0 


Long-Term Assumptions (3-Years) (1)  
Metric  
Working Capital (% of LTM Sales)11.0% to 13.0% 
CapEx (% of Sales)1.5% to 2.0% 
Non-Residential Revenue Growth (Organic)5.0% to 7.5% 
Normalized Tax Rate25.0% to 27.0% 
Incremental Adjusted EBITDA (Organic)22.0% to 27.0% 
Incremental Adjusted EBITDA (Acquisitions Year One)11.0% to 16.0% 
Residential Revenue for every 50K houses insulated$107 million 

(1) This guidance and long-term targets reflect management’s current view of present and future market conditions and are based on assumptions such as housing starts, general and administrative expenses, weighted average diluted shares outstanding 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 2020 Annual Report on Form 10-K and subsequent SEC reports.

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 fourth quarter 2021 financial results is scheduled for today, Tuesday, February 22, 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 building material products to the construction industry in the United States and Canada. We provide insulation installation services nationwide through our contractor services business which has approximately 235 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 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 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 a stock repurchase transaction. These forward-looking statements are distinguished by use of 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.  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
tabitha.zane@topbuild.com
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,  
  2021  2020  2021  2020  
Net sales $1,063,398  $721,487     $3,486,207  $2,718,038  
Cost of sales  780,237   523,467   2,511,818   1,971,677  
Gross profit  283,161   198,020   974,389   746,361  
              
Selling, general, and administrative expense  164,718   94,943   497,970   391,315  
Operating profit  118,443   103,077   476,419   355,046  
              
Other income (expense), net:             
Interest expense  (10,933)  (7,745)  (29,143)  (32,456) 
Loss on extinguishment of debt  25      (13,837)  (233) 
Other, net  (207)  85   4   733  
Other expense, net  (11,115)  (7,660)  (42,976)  (31,956) 
Income before income taxes  107,328   95,417   433,443   323,090  
              
Income tax expense  (28,968)  (24,660)  (109,427)  (76,067) 
Net income $78,360  $70,757  $324,016  $247,023  
              
Net income per common share:             
Basic $2.39  $2.16  $9.88  $7.50  
Diluted $2.37  $2.13  $9.78  $7.42  
              
Weighted average shares outstanding:             
Basic  32,753,719   32,789,911   32,801,906   32,917,971  
Diluted  33,117,227   33,189,104   33,146,171   33,299,986  


TopBuild Corp.             
Consolidated Statements of Comprehensive Income          
(in thousands)             
              
  Three Months Ended December 31,  Year Ended December 31,  
  2021  2020 2021  2020 
Net income $78,360  $70,757    $324,016  $247,023 
Other comprehensive income (loss):             
Foreign currency translation adjustment  (6,634)    (6,634)   
Comprehensive income $71,726  $70,757 $317,382  $247,023 


TopBuild Corp.       
Consolidated Balance Sheets and Other Financial Data (Unaudited)      
(dollars in thousands)       
  As of December 31, 
ASSETS 2021 2020 
Current assets:       
Cash and cash equivalents $139,779 $330,007 
Receivables, net of an allowance for credit losses of $8,798 at December 31, 2021, and $6,926 at December 31, 2020  668,419  427,340 
Inventories, net  352,801  161,369 
Prepaid expenses and other current assets  26,692  17,689 
Total current assets  1,187,691  936,405 
        
Right of use assets  177,177  83,490 
Property and equipment, net  244,574  180,053 
Goodwill  1,949,763  1,410,685 
Other intangible assets, net  684,209  190,605 
Deferred tax assets, net  1,905  2,728 
Other assets  13,211  11,317 
Total assets $4,258,530 $2,815,283 
        
LIABILITIES       
Current liabilities:       
Accounts payable $461,917 $331,710 
Current portion of long-term debt  38,640  23,326 
Accrued liabilities  175,891  107,949 
Short-term operating lease liabilities  54,591  33,492 
Short-term finance lease liabilities  2,387   
Total current liabilities  733,426  496,477 
        
Long-term debt  1,454,483  683,396 
Deferred tax liabilities, net  248,243  168,568 
Long-term portion of insurance reserves  51,875  50,657 
Long-term operating lease liabilities  125,339  53,749 
Long-term finance lease liabilities  7,770   
Other liabilities  960  13,642 
Total liabilities  2,622,096  1,466,489 
        
EQUITY  1,636,434  1,348,794 
Total liabilities and equity $4,258,530 $2,815,283 
        
        
  As of December 31,  
     2021 2020 
Other Financial Data       
Receivable days  48  48 
Inventory days  43  30 
Accounts payable days  65  76 
Receivables, net plus inventories, net less accounts payable $559,303 $256,999 
Receivables, net plus inventories, net less accounts payable as a percent of sales (TTM) †  13.3%9.3%
        
† 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, 
  2021  2020 
Cash Flows Provided by (Used in) Operating Activities:              
Net income $324,016  $247,023 
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation and amortization  79,390   62,410 
Share-based compensation  11,316   14,752 
Loss on extinguishment of debt  13,837   233 
Loss (gain) on sale or abandonment of property and equipment  1,356   (88)
Amortization of debt issuance costs  2,036   1,491 
Provision for bad debt expense  7,304   6,270 
Loss from inventory obsolescence  2,637   2,512 
Loss on foreign exchange  255    
Deferred income taxes, net  (2,818)  (4,070)
Change in certain assets and liabilities      
Receivables, net  (69,042)  2,612 
Inventories, net  (46,518)  (11,843)
Prepaid expenses and other current assets  558   (460)
Accounts payable  54,961   16,844 
Accrued liabilities  24,816   20,545 
Payment of contingent consideration  (22)  (413)
Other, net  (1,057)  66 
Net cash provided by operating activities  403,025   357,884 
       
Cash Flows Provided by (Used in) Investing Activities:      
Purchases of property and equipment  (55,546)  (40,938)
Acquisition of businesses, net of cash acquired  (1,267,114)  (83,408)
Proceeds from sale of property and equipment  415   2,463 
Net cash used in investing activities  (1,322,245)  (121,883)
       
Cash Flows Provided by (Used in) Financing Activities:      
Proceeds from issuance of long-term debt  1,218,750   300,000 
Repayment of long-term debt  (433,070)  (324,948)
Payment of debt issuance costs  (14,965)  (2,280)
Taxes withheld and paid on employees' equity awards  (8,805)  (14,932)
Exercise of stock options  3,303   1,438 
Repurchase of shares of common stock  (35,556)  (49,151)
Payment of contingent consideration  (650)  (928)
Net cash provided by (used in) financing activities  729,007   (90,801)
Impact of foreign currency on cash  (15)   
Net (decrease) increase in cash and cash equivalents  (190,228)  145,200 
Cash and cash equivalents- Beginning of period  330,007   184,807 
Cash and cash equivalents- End of period $139,779  $330,007 
       
Supplemental disclosure of cash paid for:      
Interest $22,144  $30,896 
Income taxes  109,179   77,689 
       
Supplemental disclosure of noncash activities:      
Leased assets obtained in exchange for new operating lease liabilities $131,909  $38,646 
Leased assets obtained in exchange for new finance lease liabilities  10,469    
Accruals for property and equipment  1,060   645 


TopBuild Corp.                      
Segment Data (Unaudited)                      
(dollars in thousands)                      
                       
  Three Months Ended December 31,       Year Ended December 31,      
  2021 2020 Change   2021 2020  Change 
Installation                      
Sales $627,123 $508,812  23.3% $2,378,401 $1,943,461  22.4% 
                       
Operating profit, as reported $105,975 $81,657      $383,722 $294,793     
Operating margin, as reported  16.9%16.0%     16.1%15.2%   
                       
Rationalization charges             866     
Acquisition related costs  362         1,642  4     
COVID-19 pay    363       605  1,278     
Operating profit, as adjusted $106,337 $82,020      $385,969 $296,941     
Operating margin, as adjusted  17.0%16.1%     16.2%15.3%   
                       
Share-based compensation  270  298       1,157  1,555     
Depreciation and amortization  15,227  12,146       57,815  50,265     
EBITDA, as adjusted $121,834 $94,464  29.0% $444,941 $348,761  27.6% 
EBITDA margin, as adjusted  19.4%18.6%     18.7%17.9%   
                       
Specialty Distribution                      
Sales $485,813 $251,535  93.1% $1,287,176 $926,207  39.0% 
                       
Operating profit, as reported $43,964 $33,731      $169,368 $115,343     
Operating margin, as reported  9.0%13.4%     13.2%12.5%   
                       
Rationalization charges             783     
Acquisition related costs  530         530       
Acquisition purchase accounting (inventory step-up)  15,853         15,853       
COVID-19 pay    21       54  90     
Operating profit, as adjusted $60,347 $33,752      $185,805 $116,216     
Operating margin, as adjusted  12.4%13.4%     14.4%12.5%   
                       
Share-based compensation  304  199       1,032  742     
Depreciation and amortization  12,405  2,133       18,743  9,912     
EBITDA, as adjusted $73,056 $36,084  102.5% $205,580 $126,870  62.0% 
EBITDA margin, as adjusted  15.0%14.3%     16.0%13.7%   


TopBuild Corp.                     
Adjusted EBITDA (Unaudited)                     
(dollars in thousands)                     
                      
  Three Months Ended December 31,      Year Ended December 31,      
   2021   2020  Change    2021   2020  Change   
Total net sales                     
Sales before eliminations $1,112,936  $760,347      $3,665,577  $2,869,668      
Intercompany eliminations  (49,538)  (38,860)      (179,370)  (151,630)     
Net sales after eliminations $1,063,398  $721,487   47.4% $3,486,207  $2,718,038   28.3% 
                      
Operating profit, as reported - segments $149,939  $115,388      $553,090  $410,136      
General corporate expense, net  (22,893)  (6,174)      (47,018)  (30,785)     
Intercompany eliminations  (8,603)  (6,137)      (29,653)  (24,305)     
Operating profit, as reported $118,443  $103,077      $476,419  $355,046      
Operating margin, as reported  11.1% 14.3%     13.7% 13.1%    
                      
Rationalization charges     (4)      16   2,097      
Acquisition related costs   16,262   518       22,107   855      
Acquisition purchase accounting (inventory step-up)  15,853          15,853         
Refinancing costs  188          188   57      
COVID-19 pay     384       659   1,368      
Operating profit, as adjusted $150,746  $103,975      $515,242  $359,423      
Operating margin, as adjusted  14.2% 14.4%     14.8% 13.2%    
                      
Share-based compensation  2,941   2,593       11,316   14,910      
Depreciation and amortization  28,385   14,883       79,390   62,410      
EBITDA, as adjusted $182,072  $121,451   49.9% $605,948  $436,743   38.7% 
EBITDA margin, as adjusted  17.1% 16.8%     17.4% 16.1%    
                      
Sales change period over period  341,911          768,169         
EBITDA, as adjusted, change period over period  60,621          169,205         
Incremental EBITDA, as adjusted, as a percentage of change in sales  17.7%        22.0%       
                      
                      
† 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 December 31,  Year Ended December 31,   
  2021  2020  2021  2020   
Gross Profit Reconciliations              
               
Net sales $1,063,398  $721,487  $3,486,207  $2,718,038   
               
Gross profit, as reported $283,161  $198,020  $974,389  $746,361   
               
Acquisition purchase accounting (inventory step-up)  15,853      15,853      
Rationalization charges           1,016   
COVID-19 pay     380   592   1,135   
Gross profit, as adjusted $299,014  $198,400  $990,834  $748,512   
               
Gross margin, as reported  26.6% 27.4% 27.9% 27.5% 
Gross margin, as adjusted  28.1% 27.5% 28.4% 27.5% 
               
Sellling, General and Administrative Expense Reconciliation           
               
Selling, general, and administrative expense, as reported $164,718  $94,943  $497,970  $391,315   
               
Rationalization charges     (4)  16   1,081   
Acquisition related costs  16,262   518   22,107   855   
Refinancing costs  188      188   57   
COVID-19 pay     4   67   233   
Selling, general, and administrative expense, as adjusted $148,268  $94,425  $475,592  $389,089   
               
Operating Profit Reconciliation              
               
Operating profit, as reported $118,443  $103,077  $476,419  $355,046   
               
Rationalization charges     (4)  16   2,097   
Acquisition related costs  16,262   518   22,107   855   
Acquisition purchase accounting (inventory step-up)  15,853      15,853      
Refinancing costs  188      188   57   
COVID-19 pay     384   659   1,368   
Operating profit, as adjusted $150,746  $103,975  $515,242  $359,423   
               
Operating margin, as reported  11.1% 14.3% 13.7% 13.1% 
Operating margin, as adjusted  14.2% 14.4% 14.8% 13.2% 
               
Income Per Common Share Reconciliation              
               
Income before income taxes, as reported $107,328  $95,417  $433,443  $323,090   
               
Rationalization charges     (4)  16   2,097   
Acquisition related costs  16,262   518   22,107   855   
Acquisition purchase accounting (inventory step-up)  15,853      15,853      
Refinancing costs and loss on extinguishment of debt  163      14,025   290   
COVID-19 pay     384   659   1,368   
Income before income taxes, as adjusted  139,606   96,315   486,103   327,700   
               
Tax rate at 26.0%  (36,298)  (25,042)  (126,387)  (85,202)  
Income, as adjusted $103,308  $71,273  $359,716  $242,498   
               
Income per common share, as adjusted $3.12  $2.15  $10.85  $7.28   
               
Weighted average diluted common shares outstanding  33,117,227   33,189,104   33,146,171   33,299,986   


TopBuild Corp.              
Same Branch and Acquisition Metrics (Unaudited)           
(dollars in thousands)              
               
  Three Months Ended December 31,  Year Ended December 31,   
  2021  2020  2021  2020  
Net sales              
Same branch:              
Installation $570,675  $508,812  $2,157,011  $1,943,461   
Specialty Distribution  290,662   251,535   1,083,497   926,207   
Eliminations  (49,391)  (38,860)  (177,904)  (151,630)  
Total same branch  811,946   721,487   3,062,604   2,718,038   
               
Acquisitions (a):              
Installation $56,448  $  $221,390  $   
Specialty Distribution  195,151      203,679      
Eliminations  (147)     (1,466)     
Total acquisitions  251,452      423,603      
Total $1,063,398  $721,487  $3,486,207  $2,718,038   
               
Gross profit, as adjusted              
Same branch $238,840  $198,400  $889,252  $748,512   
Acquisitions (a)  60,174      101,582      
Total $299,014  $198,400  $990,834  $748,512   
               
Gross margin, as adjusted              
Same branch (b)  29.4 % 27.5 % 29.0 %27.5 % 
Acquisitions (c)  23.9 %    24.0 %   
               
Operating profit, as adjusted              
Same branch $135,595  $103,975  $484,085  $359,423   
Acquisitions (a)  15,151      31,157      
Total $150,746  $103,975  $515,242  $359,423   
               
Operating margin, as adjusted              
Same branch (b)  16.7 % 14.4 % 15.8 %13.2 % 
Acquisitions (c)  6.0 %    7.4 %   
               
EBITDA, as adjusted              
Same branch $154,051  $121,451  $554,379  $436,743   
Acquisitions (a)  28,021      51,569      
Total $182,072  $121,451  $605,948  $436,743   
               
EBITDA, as adjusted, as a percentage of sales              
Same branch (b)  19.0 %    18.1 %   
Acquisitions (c)  11.1 %    12.2 %   
Total (d)  17.1 % 16.8 % 17.4 %16.1 % 
               
As Adjusted Incremental EBITDA, as a percentage of change in sales           
Same branch (e)  36.0 %    34.1 %   
Acquisitions (c)  11.1 %    12.2 %   
Total (f)  17.7 %    22.0 %   
               
(a) Represents current year impact of acquisitions in their first twelve months           
(b) Same branch metric, as adjusted, as a percentage of same branch sales            
(c) Acquired metric, 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.             
Reconciliation of Adjusted EBITDA to Net Income (Unaudited)          
(in thousands)             
              
  Three Months Ended December 31, Year Ended December 31, 
  2021 2020  2021 2020 
Net income, as reported $78,360 $70,757  $324,016 $247,023 
Adjustments to arrive at EBITDA, as adjusted:             
Interest expense and other, net  11,140  7,660   29,139  31,723 
Income tax expense  28,968  24,660   109,427  76,067 
Depreciation and amortization  28,385  14,883   79,390  62,410 
Share-based compensation  2,941  2,593   11,316  14,910 
Rationalization charges    (4)  16  2,097 
Acquisition related costs  16,262  518   22,107  855 
Acquisition purchase accounting (inventory step-up)15,853     15,853   
Refinancing costs and loss on extinguishment of debt  163     14,025  290 
COVID-19 pay    384   659  1,368 
EBITDA, as adjusted $182,072 $121,451  $605,948 $436,743 
              
Proforma acquisition EBITDA (a)        73,898    
Proforma TTM EBITDA, as adjusted       $679,846    
              
(a) Represents the trailing twelve months proforma impact of acquisitions completed in 2021.       


TopBuild Corp.              
Acquisition Adjusted Net Sales (Unaudited)            
(in thousands)              
 2021 Year Ended
 Q1 Q2 Q3 Q3 December 31, 2021
Net Sales$742,798 $834,255 $845,757 $1,063,398 $3,486,207
Acquisitions proforma adjustment † 230,581  218,855  227,621  45,291  722,348
Net sales, acquisition adjusted$973,379 $1,053,110 $1,073,378 $1,108,688 $4,208,555
               
               
† Trailing 12 months sales have been adjusted for the pro forma effect of acquired branches      


TopBuild Corp.      
2022 Estimated Adjusted EBITDA Range (Unaudited)    
(in millions)      
       
 Twelve Months Ending December 31, 2022 
  Low  High 
Estimated net income$423.0 $470.1 
Adjustments to arrive at estimated EBITDA, as adjusted:    
Interest expense and other, net 50.3  46.2 
Income tax expense 148.6  165.2 
Depreciation and amortization 126.4  121.3 
Share-based compensation 13.7  11.2 
Acquisition related costs 8.0  6.0 
Estimated EBITDA, as adjusted$770.0 $820.0 

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