TopBuild Reports Fourth Quarter and Year-End 2022 Results

Rhea-AI Summary

TopBuild Corp. (NYSE:BLD) reported strong financial results for Q4 2022 and full year 2022. Sales rose 18.9% to $1.3 billion in Q4, and 43.7% to $5.0 billion for the year. Net income surged 83.6% to $143.8 million in Q4, with diluted EPS at $4.52. For the full year, net income increased 71.6% to $556 million, translating to $17.14 per diluted share. The company’s adjusted EBITDA margin expanded to 18.8%. TopBuild anticipates continued growth, setting 2023 sales guidance between $4.7 billion and $4.9 billion, with adjusted EBITDA guidance of $820 million to $910 million.

Positive

• Q4 sales increased 18.9% to $1.3 billion.
• Net income surged 83.6% to $143.8 million.
• Adjusted EBITDA margin expanded by 170 basis points to 18.8%.
• Full year sales grew 43.7% to $5.0 billion.
• Net income for the full year rose 71.6% to $556 million.
• Strong track record with 24 acquisitions contributing $1.6 billion in annual revenue.

Negative

• Increased SG&A as a percentage of revenue to 13.6% in Q4.
• Operating margin decreased to 15.9% for the full year.

Fourth Quarter Highlights

• Sales increase 18.9% to $1.3 billion, with same branch revenue increasing 14.2%
• Net income increases 83.6% to $143.8 million, or $4.52 per diluted share
• Adjusted EBITDA margin expands 170 basis points to 18.8%
  

Full Year Highlights

• Sales increase 43.7% to $5.0 billion, with same branch revenue increasing 18.8%
• Net income increases 71.6% to $556.0 million, or $17.14 per diluted share
• Adjusted EBITDA margin expands 140 basis points to 18.8%
  

Provides 2023 Sales, Adjusted EBITDA Guidance and Assumptions

DAYTONA BEACH, Fla., Feb. 23, 2023 (GLOBE NEWSWIRE) -- TopBuild Corp. (NYSE:BLD), a leading installer and specialty distributor of insulation and related building material products to the construction industry in the United States and Canada today reported results for the fourth quarter and full-year ended December 31, 2022.

Robert Buck, President and Chief Executive Officer, stated, “We closed 2022 with a solid fourth quarter, completing another outstanding year for TopBuild. The TopBuild team delivered on our objective of achieving strong top and bottom-line growth as our unique operating model continues to differentiate TopBuild, giving us distinct competitive advantages in the three end-markets we serve.

“Throughout 2022, the TopBuild team demonstrated profitable growth, benefitting from a relentless focus on improving operational efficiencies and leveraging fixed costs. We also successfully integrated DI and demonstrated improved operating results with this key acquisition.

“TopBuild’s unique operating model continues to enable our ability to outperform in any environment. Since 2018, revenue has doubled, growing at a compounded annual rate of 20% and our adjusted EBITDA margin has expanded 690 basis points.

“Looking at 2023 and beyond, we see multiple avenues of growth available to us. We have a strong track record of executing on our plan, producing solid results, and creating value for our shareholders.”

Fourth Quarter Financial Highlights

(comparisons are to the quarter ended December 31, 2021)

3 Months Ended 12/31/22	Reported	Change
Sales	$1,264,543	18.9%
Gross Margin	29.7%	310 bps
SG&A as % of revenue	13.6%	(190 bps)
Operating Profit	$203,114	71.5%
Operating Margin	16.1%	500 bps
Net Income	$143,834	83.6%
Net Income per diluted share	$4.52	90.7%
3 Months Ended 12/31/22	Adjusted	Change
Sales	$1,264,543	18.9%
Gross Margin	29.7%	160 bps
SG&A as % of revenue	13.5%	(40 bps)
Operating Profit	$204,492	35.7%
Operating Margin	16.2%	200 bps
Net Income	$140,081	35.6%
Net Income per diluted share	$4.40	41.0%
EBITDA	$237,413	30.4%
EBITDA Margin	18.8%	170 bps
3 Months Ended 12/31/22	Adj. Same Branch	Change
Sales	$1,214,183	14.2%
Gross Margin	29.8%	170 bps
Operating Margin	16.3%	210 bps
EBITDA Margin	18.8%	170 bps
Incremental EBITDA Margin	30.8%

Full Year 2022 Financial Highlights

(comparisons are to twelve months ended December 31, 2021)

12 Months Ended 12/31/22	Reported	Change
Sales	$5,008,744	43.7%
Gross Margin	29.7%	180 bps
SG&A as % of revenue	13.8%	(50 bps)
Operating Profit	$797,164	67.3%
Operating Margin	15.9%	220 bps
Net Income	$555,989	71.6%
Net Income per diluted share	$17.14	75.3%
12 Months Ended 12/31/22	Adjusted	Change
Sales	$5,008,744	43.7%
Gross Margin	29.7%	130 bps
SG&A as % of revenue	13.6%	0 bps
Operating Profit	$804,966	56.2%
Operating Margin	16.1%	130 bps
Net Income	$554,953	54.3%
Net Income per diluted share	$17.11	57.7%
EBITDA	$940,611	55.2%
EBITDA Margin	18.8%	140 bps
12 Months Ended 12/31/22	Adj. Same Branch	Change
Sales	$4,140,512	18.8%
Gross Margin	30.5%	210 bps
Operating Margin	17.2%	240 bps
EBITDA Margin	19.5%	210 bps
Incremental EBITDA Margin	30.8%

Operating Segment Highlights ($ in 000s)
(comparisons are to the period ended December 31, 2021)

Installation	3 Months Ended 12/31/22	12 Months Ended 12/31/22		Specialty Distribution	3 Months Ended 12/31/22	12 Months Ended 12/31/22
Sales	$761,261	$2,969,978		Sales	$563,065	$2,278,261
Change				Change
Volume	12.4%	9.2%		Volume	-5.1%	-0.6%
Price	8.2%	12.2%		Price	11.5%	15.8%
M&A	0.8%	3.4%		M&A	9.5%	61.8%
Total Change	21.4%	24.9%		Total Change	15.9%	77.0%
Operating Margin	18.6%	18.5%		Operating Margin	14.3%	14.3%
Change	170 bps	240 bps		Change	530 bps	110 bps
Adj. Operating Margin	18.7%	18.5%		Adj. Operating Margin	14.4%	14.4%
Change	170 bps	230 bps		Change	200 bps	0 bps
Adj. EBITDA Margin	20.8%	20.6%		Adj. EBITDA Margin	16.7%	16.9%
Change	140 bps	190 bps		Change	170 bps	90 bps

Capital Allocation
“We remain focused on acquiring quality installation and specialty distribution companies that fit within our core insulation businesses. Disciplined identification, analysis, and integration of strategic acquisitions are core competencies as evidenced by our successful track record.

“Over the past five years we have acquired 24 companies that are contributing approximately $1.6 billion of annual revenue,” added Buck.

Acquisitions
In 2022, the Company acquired five residential insulation installation companies which are expected to generate over $17 million in annual revenue. They are listed in the chart below.

	TTM Revenue at		Month
Company Acquired	Acquisition ($ millions)		Acquired
Southwest Insulation	$1.7		January
Billings Insulation	$6.5		February
Green Energy Solutions	$2.0		March
Assured Insulating	$5.5		April
CV Insulation	$1.6		July
Total	$17.3

On January 26, 2023, the Company acquired SRI Holdings, a residential insulation installation company founded in 2012, which generated annual revenue of approximately $62 million for the twelve months ended November 30, 2022.

Share Repurchases
In 2022, the Company repurchased a total of 1,390,667 shares of its common stock for approximately $250.0 million.

2023 Outlook

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

2023	Low		High
Sales	$	4,700	$	4,900
Adjusted EBITDA*	$	820	$	910

*See table for adjusted EBITDA reconciliation.

Assumptions⁽¹⁾     

($ in millions)	Range
2023	Low		High
Estimated net income	$	445.0	$	523.0
Interest Expense and other, net		72.0		66.0
Income tax expense		157.0		184.0
Depreciation and Amortization		128.0		123.0
Share based compensation		16.0		13.0
Acquisition related costs		2.0		1.0
Estimated EBITDA, as adjusted	$	820.0	$	910.0

⁽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 most recent Annual Report on Form 10-K and subsequent SEC reports.

Conference Call
A conference call to discuss fourth quarter 2022 financial results is scheduled for today, Thursday, February 23, 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 related building material products to the construction industry in the United States and Canada. We provide insulation installation services nationwide through our Installation segment, which has approximately 230 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 180 branches. To learn more about TopBuild please visit our website at www.topbuild.com.

Use of Non-GAAP Financial Measures
Adjusted EBITDA, incremental EBITDA margin, adjusted EBITDA margin, the “adjusted” financial measures presented above, and figures presented on a “same branch basis” are not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). The Company believes that these non-GAAP financial measures, which are used in managing the business, may provide users of this financial information with additional meaningful comparisons between current results and results in prior periods. We define same branch sales as sales from branches in operation for at least 12 full calendar months. Such non-GAAP financial measures are reconciled to their closest GAAP financial measures in tables contained in this press release. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company’s reported results under GAAP. Additional information may be found in the Company’s filings with the Securities and Exchange Commission which are available on TopBuild’s website under “SEC Filings” at www.topbuild.com.

Safe Harbor Statement
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act.  These forward-looking statements may address, among other things, our expected financial and operational results, the related assumptions underlying our expected results, and our plan to repurchase our common stock under stock repurchase transactions. These forward-looking statements can be identified by words such as “will,” “would,” “anticipate,” “expect,” “believe,” “designed,” “plan,” “may,” “project,” “estimate” or “intend,” the negative of these terms, and similar references to future periods.  These views involve risks and uncertainties that are difficult to predict and, accordingly, our actual results may differ materially from the results discussed in our forward-looking statements.  Our forward-looking statements contained herein speak only as of the date of this press release.  Factors or events that we cannot predict, including those described in the risk factors contained in our filings with the Securities and Exchange Commission, may cause our actual results to differ from those expressed in forward-looking statements.  Although TopBuild believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, the Company can give no assurance that its expectations will be achieved and it undertakes no obligation to update any forward-looking statements as a result of new information, future events, or otherwise, except as required by applicable law.

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,
		2022				2021				2022				2021
Net sales		$	1,264,543			$	1,063,398			$	5,008,744			$	3,486,207
Cost of sales			888,871				780,237				3,522,025				2,511,818
Gross profit			375,672				283,161				1,486,719				974,389
Selling, general, and administrative expense			172,558				164,718				689,555				497,970
Operating profit			203,114				118,443				797,164				476,419
Other income (expense), net:
Interest expense			(16,779	)			(10,933	)			(56,716	)			(29,143	)
Loss on extinguishment of debt			—				25				—				(13,837	)
Other, net			1,585				(207	)			1,687				4
Other expense, net			(15,194	)			(11,115	)			(55,029	)			(42,976	)
Income before income taxes			187,920				107,328				742,135				433,443
Income tax expense			(44,086	)			(28,968	)			(186,146	)			(109,427	)
Net income		$	143,834			$	78,360			$	555,989			$	324,016
Net income per common share:
Basic		$	4.54			$	2.39			$	17.26			$	9.88
Diluted		$	4.52			$	2.37			$	17.14			$	9.78
Weighted average shares outstanding:
Basic			31,648,741				32,753,719				32,213,839				32,801,906
Diluted			31,838,352				33,117,227				32,440,405				33,146,171

TopBuild Corp.
Consolidated Statements of Comprehensive Income
(in thousands)
		Three Months Ended December 31,								Year Ended December 31,
		2022				2021				2022				2021
Net income		$	143,834			$	78,360			$	555,989			$	324,016
Other comprehensive loss:
Foreign currency translation adjustment			(6,762	)			(6,634	)			(15,286	)			(6,634	)
Comprehensive income		$	137,072			$	71,726			$	540,703			$	317,382

TopBuild Corp.
Consolidated Balance Sheets and Other Financial Data
(dollars in thousands)
		As of December 31,
ASSETS		2022				2021
Current assets:
Cash and cash equivalents		$	240,069			$	139,779
Receivables, net of an allowance for credit losses of $16,281 at December 31, 2022, and $8,798 at December 31, 2021			836,071				668,419
Inventories, net			438,644				352,801
Prepaid expenses and other current assets			34,257				26,692
Total current assets			1,549,041				1,187,691
Right of use assets			205,892				177,177
Property and equipment, net			253,484				244,574
Goodwill			1,966,994				1,949,763
Other intangible assets, net			614,967				684,209
Other assets			16,453				15,116
Total assets		$	4,606,831			$	4,258,530
LIABILITIES
Current liabilities:
Accounts payable		$	487,114			$	461,917
Current portion of long-term debt			40,068				38,640
Accrued liabilities			199,370				175,891
Short-term operating lease liabilities			60,880				54,591
Short-term finance lease liabilities			2,207				2,387
Total current liabilities			789,639				733,426
Long-term debt			1,417,257				1,454,483
Deferred tax liabilities, net			251,481				248,243
Long-term portion of insurance reserves			59,783				51,875
Long-term operating lease liabilities			149,943				125,339
Long-term finance lease liabilities			6,673				7,770
Other liabilities			2,349				960
Total liabilities			2,677,125				2,622,096
EQUITY			1,929,706				1,636,434
Total liabilities and equity		$	4,606,831			$	4,258,530
		As of December 31,
		2022				2021
Other Financial Data
Receivable days			54				48
Inventory days			45				43
Accounts payable days			66				65
Receivables, net plus inventories, net less accounts payable		$	787,601			$	559,303
Receivables, net plus inventories, net less accounts payable as a percent of sales (TTM) †			15.7	%			13.3	%
† 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,
		2022				2021
Cash Flows Provided by (Used in) Operating Activities:
Net income		$	555,989			$	324,016
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			123,335				79,390
Share-based compensation			12,310				11,316
Loss on extinguishment of debt			—				13,837
Loss on sale of property and equipment			1,833				1,356
Amortization of debt issuance costs			2,867				2,036
Provision for bad debt expense			5,510				7,304
Loss from inventory obsolescence			6,659				2,637
Deferred income taxes, net			6,041				(2,818	)
Change in certain assets and liabilities
Receivables, net			(169,327	)			(69,042	)
Inventories, net			(93,874	)			(46,518	)
Prepaid expenses and other current assets			(9,222	)			558
Accounts payable			26,581				54,961
Accrued liabilities			20,703				24,816
Other, net			6,396				(824	)
Net cash provided by operating activities			495,801				403,025
Cash Flows Provided by (Used in) Investing Activities:
Purchases of property and equipment			(76,382	)			(55,546	)
Acquisition of businesses, net of cash acquired			(20,500	)			(1,267,114	)
Proceeds from sale of property and equipment			2,975				415
Net cash used in investing activities			(93,907	)			(1,322,245	)
Cash Flows Provided by (Used in) Financing Activities:
Proceeds from issuance of long-term debt			—				1,218,750
Repayment of long-term debt			(38,658	)			(433,070	)
Payment of debt issuance costs			—				(14,965	)
Proceeds from revolving credit facility			70,000				—
Repayment of revolving credit facility			(70,000	)			—
Taxes withheld and paid on employees' equity awards			(11,719	)			(8,805	)
Exercise of stock options			2,028				3,303
Repurchase of shares of common stock			(250,050	)			(35,556	)
Payment of contingent consideration			(1,674	)			(650	)
Net cash (used in) provided by financing activities			(300,073	)			729,007
Impact of exchange rate changes on cash			(1,531	)			(15	)
Net increase (decrease) in cash and cash equivalents			100,290				(190,228	)
Cash and cash equivalents- Beginning of period			139,779				330,007
Cash and cash equivalents- End of period		$	240,069			$	139,779
Supplemental disclosure of cash paid for:
Interest		$	49,888			$	22,144
Income taxes			186,722				109,179
Supplemental disclosure of noncash activities:
Leased assets obtained in exchange for new operating lease liabilities		$	103,997			$	131,909
Leased assets obtained in exchange for new finance lease liabilities			—				10,469
Accruals for property and equipment			141				1,060

TopBuild Corp.
Segment Data (Unaudited)
(dollars in thousands)
		Three Months Ended December 31,									Year Ended December 31,
		2022			2021			Change			2022				2021			Change
Installation
Sales		$	761,261		$	627,123		21.4	%		$	2,969,978			$	2,378,401		24.9	%
Operating profit, as reported		$	141,961		$	105,975					$	548,795			$	383,722
Operating margin, as reported			18.6	%		16.9	%					18.5		%		16.1	%
Rationalization charges			161			—						(174	)			—
Acquisition related costs			23			362						135				1,642
COVID-19 pay			—			—						—				605
Operating profit, as adjusted		$	142,145		$	106,337					$	548,756			$	385,969
Operating margin, as adjusted			18.7	%		17.0	%					18.5		%		16.2	%
Share-based compensation			339			270						1,296				1,157
Depreciation and amortization			15,869			15,227						62,483				57,815
EBITDA, as adjusted		$	158,353		$	121,834		30.0	%		$	612,535			$	444,941		37.7	%
EBITDA margin, as adjusted			20.8	%		19.4	%					20.6		%		18.7	%
Specialty Distribution
Sales		$	563,065		$	485,813		15.9	%		$	2,278,261			$	1,287,176		77.0	%
Operating profit, as reported		$	80,692		$	43,964					$	326,226			$	169,368
Operating margin, as reported			14.3	%		9.0	%					14.3		%		13.2	%
Acquisition related costs			266			530						1,502				530
Acquisition purchase accounting (inventory step-up)			—			15,853						—				15,853
COVID-19 pay			—			—						—				54
Operating profit, as adjusted		$	80,958		$	60,347					$	327,728			$	185,805
Operating margin, as adjusted			14.4	%		12.4	%					14.4		%		14.4	%
Share-based compensation			104			304						1,041				1,032
Depreciation and amortization			13,184			12,405						56,881				18,743
EBITDA, as adjusted		$	94,246		$	73,056		29.0	%		$	385,650			$	205,580		87.6	%
EBITDA margin, as adjusted			16.7	%		15.0	%					16.9		%		16.0	%

TopBuild Corp.
Adjusted EBITDA (Unaudited)
(dollars in thousands)
		Three Months Ended December 31,												Year Ended December 31,
		2022				2021				Change				2022				2021				Change
Total net sales
Sales before eliminations		$	1,324,326			$	1,112,936							$	5,248,239			$	3,665,577
Intercompany eliminations			(59,783	)			(49,538	)							(239,495	)			(179,370	)
Net sales after eliminations		$	1,264,543			$	1,063,398				18.9	%		$	5,008,744			$	3,486,207				43.7	%
Operating profit, as reported - segments		$	222,653			$	149,939							$	875,021			$	553,090
General corporate expense, net			(9,650	)			(22,893	)							(38,018	)			(47,018	)
Intercompany eliminations			(9,889	)			(8,603	)							(39,839	)			(29,653	)
Operating profit, as reported		$	203,114			$	118,443							$	797,164			$	476,419
Operating margin, as reported			16.1		%		11.1		%						15.9		%		13.7		%
Rationalization charges			162				—								(172	)			16
Acquisition related costs†			1,216				16,262								7,974				22,107
Acquisition purchase accounting (inventory step-up)			—				15,853								—				15,853
Refinancing costs			—				188								—				188
COVID-19 pay			—				—								—				659
Operating profit, as adjusted		$	204,492			$	150,746							$	804,966			$	515,242
Operating margin, as adjusted			16.2		%		14.2		%						16.1		%		14.8		%
Share-based compensation			2,637				2,941								12,310				11,316
Depreciation and amortization			30,284				28,385								123,335				79,390
EBITDA, as adjusted		$	237,413			$	182,072				30.4	%		$	940,611			$	605,948				55.2	%
EBITDA margin, as adjusted			18.8		%		17.1		%						18.8		%		17.4		%
Sales change period over period			201,145												1,522,537
EBITDA, as adjusted, change period over period			55,341												334,663
Incremental EBITDA, as adjusted, as a percentage of change in sales			27.5		%										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,
		2022				2021				2022				2021
Gross Profit Reconciliation
Net sales		$	1,264,543			$	1,063,398			$	5,008,744			$	3,486,207
Gross profit, as reported		$	375,672			$	283,161			$	1,486,719			$	974,389
Acquisition purchase accounting (inventory step-up)			—				15,853				—				15,853
Rationalization charges			15				—				135				—
COVID-19 pay			—				—				—				592
Gross profit, as adjusted		$	375,687			$	299,014			$	1,486,854			$	990,834
Gross margin, as reported			29.7		%		26.6		%		29.7		%		27.9		%
Gross margin, as adjusted			29.7		%		28.1		%		29.7		%		28.4		%
Sellling, General and Administrative Expense Reconciliation
Selling, general, and administrative expense, as reported		$	172,558			$	164,718			$	689,555			$	497,970
Rationalization charges			162				—				(172	)			16
Acquisition related costs			1,201				16,262				7,839				22,107
Refinancing costs			—				188				—				188
COVID-19 pay			—				—				—				67
Selling, general, and administrative expense, as adjusted		$	171,195			$	148,268			$	681,888			$	475,592
Operating Profit Reconciliation
Operating profit, as reported		$	203,114			$	118,443			$	797,164			$	476,419
Rationalization charges			162				—				(172	)			16
Acquisition related costs			1,216				16,262				7,974				22,107
Acquisition purchase accounting (inventory step-up)			—				15,853				—				15,853
Refinancing costs			—				188				—				188
COVID-19 pay			—				—				—				659
Operating profit, as adjusted		$	204,492			$	150,746			$	804,966			$	515,242
Operating margin, as reported			16.1		%		11.1		%		15.9		%		13.7		%
Operating margin, as adjusted			16.2		%		14.2		%		16.1		%		14.8		%
Income Per Common Share Reconciliation
Income before income taxes, as reported		$	187,920			$	107,328			$	742,135			$	433,443
Rationalization charges			162				—				(172	)			16
Acquisition related costs			1,216				16,262				7,974				22,107
Acquisition purchase accounting (inventory step-up)			—				15,853				—				15,853
Refinancing costs and loss on extinguishment of debt			—				163				—				14,025
COVID-19 pay			—				—				—				659
Income before income taxes, as adjusted			189,298				139,606				749,937				486,103
Tax rate at 26.0%			(49,217	)			(36,298	)			(194,984	)			(126,387	)
Income, as adjusted		$	140,081			$	103,308			$	554,953			$	359,716
Income per common share, as adjusted		$	4.40			$	3.12			$	17.11			$	10.85
Weighted average diluted common shares outstanding			31,838,352				33,117,227				32,440,405				33,146,171

TopBuild Corp.
Same Branch and Acquisition Metrics (Unaudited)
(dollars in thousands)
		Three Months Ended December 31,								Year Ended December 31,
		2022				2021				2022				2021
Net sales
Same branch:
Installation		$	756,312			$	627,123			$	2,889,145			$	2,378,401
Specialty Distribution			517,010				485,813				1,483,155				1,287,176
Eliminations			(59,139	)			(49,538	)			(231,788	)			(179,370	)
Total same branch			1,214,183				1,063,398				4,140,512				3,486,207
Acquisitions (a):
Installation		$	4,949			$	—			$	80,833			$	—
Specialty Distribution			46,055				—				795,106				—
Eliminations			(644	)			—				(7,707	)			—
Total acquisitions			50,360				—				868,232				—
Total		$	1,264,543			$	1,063,398			$	5,008,744			$	3,486,207
Gross profit, as adjusted
Same branch		$	361,974			$	299,014			$	1,261,934			$	990,834
Acquisitions (a)			13,713				—				224,920				—
Total		$	375,687			$	299,014			$	1,486,854			$	990,834
Gross margin, as adjusted
Same branch (b)			29.8		%		28.1		%		30.5		%		28.4		%
Acquisitions (c)			27.2		%						25.9		%
Operating profit, as adjusted
Same branch		$	197,680			$	150,746			$	714,058			$	515,242
Acquisitions (a)			6,812				—				90,908				—
Total		$	204,492			$	150,746			$	804,966			$	515,242
Operating margin, as adjusted
Same branch (b)			16.3		%		14.2		%		17.2		%		14.8		%
Acquisitions (c)			13.5		%						10.5		%
EBITDA, as adjusted
Same branch		$	228,459			$	182,072			$	807,309			$	605,948
Acquisitions (a)			8,954				—				133,302				—
Total		$	237,413			$	182,072			$	940,611			$	605,948
EBITDA, as adjusted, as a percentage of sales
Same branch (b)			18.8		%						19.5		%
Acquisitions (c)			17.8		%						15.4		%
Total (d)			18.8		%		17.1		%		18.8		%		17.4		%
As Adjusted Incremental EBITDA, as a percentage of change in sales
Same branch (e)			30.8		%						30.8		%
Acquisitions (c)			17.8		%						15.4		%
Total (f)			27.5		%						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,
		2022				2021				2022				2021
Net income, as reported		$	143,834			$	78,360			$	555,989			$	324,016
Adjustments to arrive at EBITDA, as adjusted:
Interest expense and other, net			15,194				11,140				55,029				29,139
Income tax expense			44,086				28,968				186,146				109,427
Depreciation and amortization			30,284				28,385				123,335				79,390
Share-based compensation			2,637				2,941				12,310				11,316
Rationalization charges			162				—				(172	)			16
Acquisition related costs			1,216				16,262				7,974				22,107
Acquisition purchase accounting (inventory step-up)			—				15,853				—				15,853
Refinancing costs and loss on extinguishment of debt			—				163				—				14,025
COVID-19 pay			—				—				—				659
EBITDA, as adjusted		$	237,413			$	182,072			$	940,611			$	605,948
Proforma acquisition EBITDA(a)											548
Proforma TTM EBITDA, as adjusted										$	941,159
(a) Represents the trailing twelve months proforma impact of acquisitions completed in 2022.

TopBuild Corp.
Acquisition Adjusted Net Sales (Unaudited)
(in thousands)
	2022												Year Ended
	Q1			Q2			Q3			Q4			December 31, 2022
Net Sales	$	1,168,918		$	1,274,285		$	1,300,998		$	1,264,543		$	5,008,744
Acquisitions proforma adjustment †		2,934			438			-			-			3,372
Net sales, acquisition adjusted	$	1,171,852		$	1,274,723		$	1,300,998		$	1,264,543		$	5,012,116
† Trailing 12 months sales have been adjusted for the pro forma effect of acquired branches

TopBuild Corp.
2023 Estimated Adjusted EBITDA Range (Unaudited)
(in millions)
	Twelve Months Ending December 31, 2023
	Low				High
Estimated net income	$	445.0			$	523.0
Adjustments to arrive at estimated EBITDA, as adjusted:
Interest expense and other, net		72.0				66.0
Income tax expense		157.0				184.0
Depreciation and amortization		128.0				123.0
Share-based compensation		16.0				13.0
Acquisition related costs		2.0				1.0
Estimated EBITDA, as adjusted	$	820.0			$	910.0

 

 

 

FAQ

What were TopBuild's sales figures for Q4 2022?

TopBuild's sales for Q4 2022 increased by 18.9% to $1.3 billion.

How much did TopBuild's net income increase in Q4 2022?

TopBuild's net income rose 83.6% to $143.8 million in Q4 2022.

What is the adjusted EBITDA margin for TopBuild in 2022?

TopBuild's adjusted EBITDA margin expanded to 18.8% in 2022.

What is TopBuild's sales guidance for 2023?

TopBuild's sales guidance for 2023 is between $4.7 billion and $4.9 billion.

How many acquisitions did TopBuild make in 2022?

TopBuild acquired five residential insulation installation companies in 2022.