DAYTONA BEACH, Fla., May 07, 2019 (GLOBE NEWSWIRE) -- TopBuild Corp. (NYSE:BLD), a leading installer and distributor of insulation and building material products today reported results for the first quarter ended March 31, 2019.
Jerry Volas, Chief Executive Officer, stated, “The strength and diversity of the TopBuild operating model produced another outstanding quarter, in both sales and earnings. Our residential business was solid and our commercial business outperformed expectations. Our ongoing focus on operational efficiency improvements and fixed cost leveraging drove strong conversion of top line growth, both organic and through acquisitions, to the bottom line.
“We are optimistic 2019 will be another strong year for TopBuild.”
First Quarter Financial Highlights
(unless otherwise indicated, comparisons are to the quarter ended March 31, 2018)
- Net Sales increased 26.0% to $619.3 million, primarily driven by acquisitions, price increases and sales volume growth at TruTeam. Of the 26.0% revenue growth, same branch sales contributed 7.1%.
- Gross margin increased 250 basis points to 25.1%.
- Operating profit was $56.6 million, compared to $33.9 million, a 67.0% increase. On an adjusted basis, operating profit was $59.1 million, compared to $38.2 million, a 54.8% improvement.
- Operating margin was 9.1% compared to 6.9%. Adjusted operating margin improved 170 basis points to 9.5%.
- Net income was $38.0 million, or $1.09 per diluted share, compared to net income of $26.4 million or $0.74 per diluted share.
- Adjusted net income was $36.6 million, or $1.06 per diluted share, compared to $26.2 million, or $0.73 per diluted share.
- Adjusted EBITDA was $74.5 million, compared to $46.0 million, a 62.0% increase and adjusted EBITDA margin improved 260 basis points to 12.0%. Incremental adjusted EBITDA margin was 22.3%.
- On a same branch basis, adjusted EBITDA was $57.2 million, a 24.3% increase, and incremental adjusted EBITDA margin was 32.2%.
- Acquisitions contributed $93.2 million of revenue. Incremental adjusted EBITDA related to these acquisitions was 18.6%.
- At March 31, 2019, the Company had cash and cash equivalents of $98.3 million and availability under the revolving credit facility of $182.7 million for total liquidity of $281.0 million.
Capital Allocation
Volas stated, “Since 2016, we have acquired ten companies generating over $500 million of annual revenue and they are performing above our expectations. Identifying, executing and integrating acquisitions has become a core competency for TopBuild. Acquisitions remain our number one capital allocation priority and we have a robust pipeline of prospects we are currently evaluating. In addition, we have a $200 million share repurchase authorization in place.”
Share Repurchases
The Company completed the $50 million accelerated share repurchase program announced on November 6, 2018. Under the terms of the program, the Company repurchased a total of 973,252 shares of the Company’s common stock at an average price of $51.37 per share. In addition, in the first quarter the Company repurchased an additional 72,791 shares at an average price of $63.49 per share. These shares were purchased as part of the Company’s $200 million share repurchase program announced on February 26, 2019. As of March 31, 2019, approximately $195.4 million of the $200 million authorization remained.
2019 Revenue and Adjusted EBITDA Outlook
The Company has raised the low end of revenue and adjusted EBITDA guidance by $40 million and $20 million, respectively, and the high end of revenue and adjusted EBITDA guidance by $35 million and $20 million, respectively.
This outlook reflects management’s current view of present and future market conditions and is based on assumptions such as housing starts, general and administrative expenses, weighted average diluted shares outstanding and interest rates. This outlook does not include any effects related to potential acquisitions or divestitures that may occur after the date of this press release. Factors that could cause actual 2019 results to differ materially from TopBuild’s current expectations are discussed below and are also detailed in the Company’s 2018 Annual Report on Form 10-K and subsequent SEC reports.
2019 ENERGY STAR® Partner of the Year Sustained Excellence Award Received
TopBuild Home Services Group received the 2019 ENERGY STAR® Partner of the Year Sustained Excellence Award for continued leadership and superior contributions to ENERGY STAR. TopBuild’s accomplishment was recognized by the U.S. Environmental Protection Agency and the U.S. Department of Energy in Washington, D.C. on April 11, 2019. The Company’s extensively trained Home Energy Raters provide the evaluation, testing and independent verification required to be considered an ENERGY STAR compliant home.
“We are honored to once again be recognized for our leadership role in verifying ENERGY STAR compliant homes. TopBuild Home Services has been an ENERGY STAR partner for 17 years, working closely with home builders and consumers to create homes that are more comfortable and energy efficient,” added Volas.
Additional Information
Quarterly supplemental materials, including a presentation that will be referenced on today’s conference call, are available on the “Investors” section of the Company’s website at www.topbuild.com.
About TopBuild
TopBuild Corp., headquartered in Daytona Beach, Florida, is a leading installer and distributor of insulation and building material products to the U.S. construction industry. We provide insulation and building material services nationwide through TruTeam®, which has over 200 branches, and through Service Partners® which distributes insulation and building material products from over 75 branches. We leverage our national footprint to gain economies of scale while capitalizing on our local market presence to forge strong relationships with our customers. To learn more about TopBuild please visit our website at www.topbuild.com.
