Installed Building Products Reports Record Quarterly Results for the Third Quarter 2022 and Declares Regular Quarterly Cash Dividend

Rhea-AI Summary

Installed Building Products (IBP) reported record third-quarter 2022 results with net revenue of $719.1 million, up 41.1% year-over-year. Installation revenue rose 33.5% to $672.9 million, driven by strong residential construction demand. Net income surged 74.8% to $61 million, with adjusted EBITDA increasing 53.8% to $120.2 million. IBP declared a quarterly dividend of $0.315 per share, paid on September 30, 2022. The company completed the acquisition of All Florida Insulation, contributing to its expansion strategy. IBP expects continued demand into 2023 due to strong unit backlog.

Positive

• Net revenue increased 41.1% to $719.1 million.
• Net income rose 74.8% to $61 million.
• Adjusted EBITDA reached $120.2 million, up 53.8%.
• Quarterly dividend declared at $0.315 per share, supporting shareholder returns.
• Acquired All Florida Insulation, contributing to strategic growth.

Negative

• Gross margin impacted by acquisitions in the Other operating segment.
• Certain distribution businesses had lower gross margins than Installation segment.

COLUMBUS, Ohio--(BUSINESS WIRE)-- Installed Building Products, Inc. (the "Company" or "IBP") (NYSE: IBP), an industry-leading installer of insulation and complementary building products, today announced results for the third quarter ended September 30, 2022.

Third Quarter 2022 Highlights (Comparisons are to Prior Year Period)

• Net revenue increased 41.1% to a quarterly record of $719.1 million
  • Installation revenue increased 33.5% to $672.9 million, driven by strong growth across IBP’s residential new construction markets
  • Other revenue, which includes IBP’s manufacturing and distribution operations, increased from $5.6 million to $46.2 million, driven by strong operating results and recent acquisitions
• Net income increased 74.8% to $61.0 million
• Adjusted EBITDA* increased 53.8% to a record $120.2 million
• Net income per diluted share increased 80.5% to $2.13
• Adjusted net income per diluted share* increased 68.5% to $2.51
• Price/mix growth increased by a record 27.1% during the third quarter
• At September 30, 2022, IBP had $228.4 million in cash, cash equivalents and investments
• Published annual 2022 Environmental, Social and Governance ("ESG") report highlighting the positive impact the Company is making for all stakeholders
• Declared third quarter dividend of $0.315 per share which was paid to shareholders on September 30, 2022
• Returned $21.5 million to shareholders in the third quarter through dividends and share repurchases

Recent Developments

• IBP’s Board of Directors declared the fourth quarter regular cash dividend of $0.315 per share

“IBP achieved another quarter of record net revenue, net income, and adjusted EBITDA, which was led by continued strength across our residential end-markets, a favorable pricing environment, and the hard work of our team members,” stated Jeff Edwards, Chairman and Chief Executive Officer. “During the third quarter, residential housing unit completion growth accelerated and our business was supported by a robust backlog of units under construction. In addition, we continue to benefit from positive price/mix trends, which increased 27.1% in the third quarter and drove further growth in incremental margins and earnings.”

Mr. Edwards continued, “Record cash flow through the 2022 first nine months has allowed us to allocate a growing amount of capital across our proven acquisition strategy, dividend policy and share repurchase program. Year-to-date, we have acquired $73 million of annual revenue across numerous geographic regions. In addition, for the first nine months of 2022, we have returned a total of $166.0 million to shareholders through dividend payments and share repurchases, up from $26.4 million in the same period last year.”

“As we outlined in our second annual ESG report, IBP is focused on promoting positive corporate responsibility and creating lasting value for all of its stakeholders. I am extremely proud of our team's ESG progress as well as the record financial results we continue to produce. Despite macroeconomic headwinds, we expect the meaningful backlog of residential units and extended construction cycle times to support demand for our installation services throughout the remainder of 2022 and into 2023,” concluded Mr. Edwards.

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 2022, IBP has acquired over $73 million of annual revenue and expects to acquire at least $100 million of revenue for the full year.

During the 2022 third quarter, IBP completed the following acquisition:

• In September 2022, IBP acquired All Florida Insulation, LLC, a Longwood, Florida based installer of spray foam and fiberglass insulation to residential, multifamily, and commercial customers with annual revenue of approximately $2.4 million.

Cash Dividend and Share Repurchases

IBP’s Board of Directors has approved the Company’s quarterly cash dividend of $0.315 per share, payable on December 31, 2022, to stockholders of record on December 15, 2022.

During the 2022 nine month period, IBP has repurchased over 1.2 million shares of its common stock at a total cost of $112.2 million, including commissions. At September 30, 2022, the Company had $187.5 million of availability remaining under its stock repurchase program.

Third Quarter 2022 Results Overview

For the third quarter of 2022, net revenue was a quarterly record of $719.1 million, an increase of 41.1% from $509.8 million for the third quarter of 2021. On a consolidated same branch basis, net revenue improved 28.5% from the prior year quarter, which was attributable to a 7.5% increase in the volume of jobs completed and a 27.1% increase in price/mix during the third quarter relative to the same period last year. Residential sales growth within our Installation segment was 34.9% on a same branch basis in the quarter. Commercial sales growth of 16.0% was largely driven by recent acquisitions with same branch sales up 2.8% from the prior year quarter.

Gross profit improved 41.9% to $221.3 million from $155.9 million in the prior year quarter. Adjusted gross profit* as a percent of total revenue was 30.8%, which adjusts for the Company’s share-based compensation expense, as well as expenses directly related to COVID-19, compared to 30.7% for the same period last year. The recently acquired distribution companies disclosed in the Other operating segment have lower gross margins than our Installation operating segment. During the 2022 third quarter, the Other operating segment had a gross margin of 21.1% as compared to 33.1% for the Installation operating segment. Our Other segment includes our more recent acquisitions in the distribution businesses, which had an impact on our consolidated gross profit margin of about 80 basis points. The distribution businesses did not have an impact on the prior year third quarter as they had not been acquired at that time.

Selling and administrative expense, as a percent of net revenue, was 16.1% compared to 18.1% in the prior year quarter. Adjusted selling and administrative expense*, as a percent of net revenue, was 15.7% compared to 17.5% in the prior year quarter.

Net income was $61.0 million, or $2.13 per diluted share, compared to $34.9 million, or $1.18 per diluted share in the prior year quarter. Adjusted net income* was $71.7 million, or $2.51 per diluted share, compared to $44.0 million, or $1.49 per diluted share in the prior year quarter. Adjusted net income accounts for the impact of non-core items in both periods, including an addback for non-cash amortization expense related to acquisitions.

Adjusted EBITDA* was $120.2 million, a 53.8% increase from $78.1 million in the prior year quarter, largely due to strong sales growth and lower selling and administrative expenses as a percent of net revenue compared to the prior year quarter.

Conference Call and Webcast

The Company will host a conference call and webcast on November 3, 2022 at 10:00 a.m. Eastern Time to discuss these results. To participate in the call, please dial 877-407-0792 (domestic) or 201-689-8263 (international). The live webcast will be available at www.installedbuildingproducts.com in the investor relations section. A replay of the conference call will be available through December 3, 2022, by dialing 844-512-2921 (domestic) or 412-317-6671 (international) and entering the passcode 13732584.

About Installed Building Products

Installed Building Products, Inc. is one of the nation's largest new residential insulation installers and is a diversified installer of complementary building products, including waterproofing, fire-stopping, fireproofing, garage doors, rain gutters, window blinds, shower doors, closet shelving and mirrors and other products for residential and commercial builders located in the continental United States. The Company manages all aspects of the installation process for its customers, from direct purchase and receipt of materials from national manufacturers to its timely supply of materials to job sites and quality installation. The Company offers its portfolio of services for new and existing single-family and multi-family residential and commercial building projects in all 48 continental states and the District of Columbia from its national network of over 220 branch locations.

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, our ESG initiatives, industry conditions, our financial and business model, payment of dividends, the demand for our services and product offerings, the impact of the COVID-19 crisis on our business and end markets, supply chain and material constraints, 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, the impact of the COVID-19 crisis on our financial results, 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, the duration, effect and severity of the COVID-19 crisis; the adverse impact of the COVID-19 crisis on our business and financial results, our supply chain, the economy and the markets we serve; 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 December 31, 2021, as the same may be updated from time to time in our subsequent filings with the Securities and Exchange Commission. In addition, any future declaration of dividends will be subject to the final determination of our Board of Directors. Any forward-looking statement made by the Company in this press release speaks only as of the date hereof. New risks and uncertainties arise from time to time, and it is impossible for the Company to predict these events or how they may affect it. The Company has no obligation, and does not intend, to update any forward-looking statements after the date hereof, except as required by federal securities laws.

*Use of Non-GAAP Financial Measures

In addition to the financial measures prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), this press release contains the non-GAAP financial measures of Adjusted EBITDA, Adjusted EBITDA margin (i.e., Adjusted EBITDA divided by net revenue), Adjusted Net Income, Adjusted Net Income per diluted share, Adjusted Gross Profit and Adjusted Selling and Administrative expense. The reasons for the use of these measures, reconciliations of Adjusted EBITDA, Adjusted Net Income, Adjusted Net Income per diluted share, Adjusted Gross Profit, and Adjusted Selling and Administrative expense to the most directly comparable GAAP measures and other information relating to these measures are included below following the unaudited condensed consolidated financial statements. Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for IBP’s financial results prepared in accordance with GAAP.

INSTALLED BUILDING PRODUCTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(unaudited, in thousands, except share and per share amounts)
	Three months ended September 30,							Nine months ended September 30,
		2022			2021				2022			2021
Net revenue	$	719,114		$	509,763			$	1,983,355		$	1,434,927
Cost of sales		497,837			353,879				1,372,966			1,001,730
Gross profit		221,277			155,884				610,389			433,197
Operating expenses
Selling		31,651			24,188				86,214			67,677
Administrative		84,345			68,056				247,519			199,607
Amortization		11,370			9,224				33,728			26,798
Operating income		93,911			54,416				242,928			139,115
Other expense, net
Interest expense, net		10,668			7,687				31,669			22,781
Other expense (income)		185			(483	)			698			(494	)
Income before income taxes		83,058			47,212				210,561			116,828
Income tax provision		22,080			12,320				55,857			27,432
Net income	$	60,978		$	34,892			$	154,704		$	89,396
Other comprehensive income (loss), net of tax:
Net change on cash flow hedges, net of tax (provision) benefit of $(5,105) and $(454) for the three months ended September 30, 2022 and 2021, respectively, and $(15,138) and $(2,638) for the nine months ended September 30, 2022 and 2021, respectively		14,379			1,292				42,640			7,762
Comprehensive income	$	75,357		$	36,184			$	197,344		$	97,158
Earnings Per Share:
Basic	$	2.14		$	1.19			$	5.36		$	3.05
Diluted	$	2.13		$	1.18			$	5.33		$	3.02
Weighted average shares outstanding:
Basic		28,478,954			29,404,257				28,851,389			29,355,538
Diluted		28,595,707			29,620,748				29,020,509			29,615,162
Cash dividends declared per share	$	0.32		$	0.30			$	1.85		$	0.90

INSTALLED BUILDING PRODUCTS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands, except share and per share amounts)
	September 30,				December 31,
		2022				2021
ASSETS
Current assets
Cash and cash equivalents	$	203,402			$	333,485
Investments		24,996				—
Accounts receivable (less allowance for credit losses of $9,083 and $8,717 at September 30, 2022 and December 31, 2021, respectively)		415,657				312,767
Inventories		182,176				143,039
Prepaid expenses and other current assets		71,790				70,025
Total current assets		898,021				859,316
Property and equipment, net		115,479				105,933
Operating lease right-of-use assets		72,226				69,871
Goodwill		356,612				322,517
Customer relationships, net		184,225				178,264
Other intangibles, net		91,613				86,157
Other non-current assets		45,675				31,144
Total assets	$	1,763,851			$	1,653,202
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities
Current maturities of long-term debt	$	30,494			$	30,839
Current maturities of operating lease obligations		25,414				23,224
Current maturities of finance lease obligations		2,275				1,747
Accounts payable		156,117				132,705
Accrued compensation		61,453				50,964
Other current liabilities		82,809				68,090
Total current liabilities		358,562				307,569
Long-term debt		827,906				832,193
Operating lease obligations		46,640				46,075
Finance lease obligations		5,469				3,297
Deferred income taxes		19,901				4,819
Other long-term liabilities		47,859				42,409
Total liabilities		1,306,337				1,236,362
Commitments and contingencies (Note 16)
Stockholders’ equity		—				—
Preferred Stock; $0.01 par value: 5,000,000 authorized and 0 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively		—				—
Common stock; $0.01 par value: 100,000,000 authorized, 33,429,557 and 33,271,659 issued and 28,604,098 and 29,706,401 shares outstanding at September 30, 2022 and December 31, 2021, respectively		334				333
Additional paid in capital		225,377				211,430
Retained earnings		453,286				352,543
Treasury stock; at cost: 4,825,459and 3,565,258 shares at September 30, 2022 and December 31, 2021, respectively		(263,896	)			(147,239	)
Accumulated other comprehensive income (loss)		42,413				(227	)
Total stockholders’ equity		457,514				416,840
Total liabilities and stockholders’ equity	$	1,763,851			$	1,653,202

INSTALLED BUILDING PRODUCTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
	Nine months ended September 30,
		2022				2021
Cash flows from operating activities
Net income	$	154,704			$	89,396
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization of property and equipment		35,153				32,498
Amortization of operating lease right-of-use assets		19,832				16,464
Amortization of intangibles		33,728				26,798
Amortization of deferred financing costs and debt discount		1,436				993
Provision for credit losses		2,754				1,135
Gain on sale of property and equipment		(1,048	)			(1,405	)
Noncash stock compensation		10,290				10,228
Other, net		1,509				2,414
Changes in assets and liabilities, excluding effects of acquisitions
Accounts receivable		(98,528	)			(23,224	)
Inventories		(23,071	)			(37,122	)
Proceeds from termination of interest rate swap agreements		25,462				—
Other assets		4,773				(8,116	)
Accounts payable		20,290				14,120
Income taxes receivable/payable		12,354				(107	)
Other liabilities		(971	)			(7,594	)
Net cash provided by operating activities		198,667				116,478
Cash flows from investing activities
Purchases of investments		(344,388	)			—
Maturities of short term investments		320,000				—
Purchases of property and equipment		(35,212	)			(27,898	)
Acquisitions of businesses, net of cash acquired of $330 and $1,640 in 2022 and 2021, respectively		(75,779	)			(94,500	)
Proceeds from sale of property and equipment		1,418				2,219
Other		(5,974	)			(1,430	)
Net cash used in investing activities		(139,935	)			(121,609	)
Cash flows from financing activities
Payments on Term Loan		(3,750	)			—
Proceeds from vehicle and equipment notes payable		20,492				20,753
Debt issuance costs		(655	)			—
Principal payments on long-term debt		(23,340	)			(19,688	)
Principal payments on finance lease obligations		(1,661	)			(1,573	)
Dividends paid		(53,821	)			(26,428	)
Acquisition-related obligations		(9,423	)			(2,442	)
Repurchase of common stock		(112,193	)			—
Surrender of common stock awards by employees		(4,464	)			(5,576	)
Net cash used in financing activities		(188,815	)			(34,954	)
Net change in cash and cash equivalents		(130,083	)			(40,085	)
Cash and cash equivalents at beginning of period		333,485				231,520
Cash and cash equivalents at end of period	$	203,402			$	191,435
Supplemental disclosures of cash flow information
Net cash paid during the period for:
Interest	$	40,639			$	23,748
Income taxes, net of refunds		43,512				27,428
Supplemental disclosure of noncash activities
Right-of-use assets obtained in exchange for operating lease obligations		22,056				23,543
Release of indemnification of acquisition-related debt		980				2,036
Property and equipment obtained in exchange for finance lease obligations		4,411				1,918
Seller obligations in connection with acquisition of businesses		25,534				18,987
Unpaid purchases of property and equipment included in accounts payable		857				1,327

Information on Segments

In the first quarter of 2022, we realigned our operating segments. This change resulted in our Company having three operating segments consisting of Installation, Distribution and Manufacturing. The Other category reported below reflects the operations of our Distribution and Manufacturing operating segments.

INSTALLED BUILDING PRODUCTS, INC.
SEGMENT INFORMATION
(unaudited, in thousands)
	Three months ended September 30, 2022																Three months ended September 30, 2021
	Installation				Other				Eliminations				Consolidated				Installation				Other				Eliminations				Consolidated
Revenue	$	672,916			$	47,748			$	(1,550	)		$	719,114			$	504,161			$	6,305			$	(703	)		$	509,763
Cost of sales (exclusive of depreciation and amortization shown separately below)		450,017				37,659				(1,116	)			486,560				339,308				4,837				(539	)			343,606
Segment gross profit		222,899				10,089				(434	)			232,554				164,853				1,468				(164	)			166,157
Depreciation and amortization														11,277																10,273
Gross profit, as reported														221,277																155,884
Selling														31,651																24,188
Administrative														84,345																68,056
Amortization														11,370																9,224
Operating income														93,911																54,416
Interest expense, net														10,668																7,687
Other expense (income)														185																(483	)
Income before income taxes													$	83,058															$	47,212
	Three months ended June 30, 2022																Three months ended June 30, 2021
	Installation				Other				Eliminations				Consolidated				Installation				Other				Eliminations				Consolidated
Segment gross profit percentage		33.1	%			21.1	%			28.0	%			32.3	%			32.7	%			23.3	%			23.3	%			32.6	%
	Nine months ended September 30, 2022																Nine months ended September 30, 2021
	Installation				Other				Eliminations				Consolidated				Installation				Other				Eliminations				Consolidated
Revenue	$	1,872,544			$	114,690			$	(3,879	)		$	1,983,355			$	1,419,302			$	17,182			$	(1,557	)		$	1,434,927
Cost of sales (exclusive of depreciation and amortization shown separately below)		1,255,521				87,425				(3,015	)			1,339,931				959,384				12,980				(1,207	)			971,157
Segment gross profit		617,023				27,265				(864	)			643,424				459,918				4,202				(350	)			463,770
Depreciation and amortization														33,035																30,573
Gross profit, as reported														610,389																433,197
Selling														86,214																67,677
Administrative														247,519																199,607
Amortization														33,728																26,798
Operating income														242,928																139,115
Interest expense, net														31,669																22,781
Other expense (income)														698																(494	)
Income before income taxes													$	210,561															$	116,828
	Nine months ended September 30, 2022																Nine months ended September 30, 2021
	Installation				Other				Eliminations				Consolidated				Installation				Other				Eliminations				Consolidated
Segment gross profit percentage		33.0	%			23.8	%			22.3	%			32.4	%			32.4	%			24.5	%			22.5	%			32.3	%

The prior period disclosures in the above table have been recast to conform to the current period segment presentation.

INSTALLED BUILDING PRODUCTS, INC.
REVENUE BY END MARKET
(unaudited, in thousands)
	Three months ended September 30,												Nine months ended September 30,
	2022						2021						2022						2021
Installation
Residential new construction	$	532,299		74	%		$	385,401		76	%		$	1,480,214		75	%		$	1,082,379		75	%
Repair and remodel		39,139		6	%			31,276		6	%			109,745		5	%			89,810		7	%
Commercial		101,478		14	%			87,484		17	%			282,585		14	%			247,113		17	%
Net revenue - Installation		672,916		94	%			504,161		99	%			1,872,544		94	%			1,419,302		99	%
Other 1		46,198		6	%			5,602		1	%			110,811		6	%			15,625		1	%
Net revenue, as reported	$	719,114		100	%		$	509,763		100	%		$	1,983,355		100	%		$	1,434,927		100	%

1	Net revenue for manufacturing operations are included in Other category for all periods presented to conform with our change in composition of operating segments.

Reconciliation of Non-GAAP Financial Measures

Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, Adjusted Gross Profit and Adjusted Selling and Administrative Expense measure performance by adjusting EBITDA, GAAP net income, 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.

INSTALLED BUILDING PRODUCTS, INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
ADJUSTED NET INCOME CALCULATIONS
(unaudited, in thousands, except share and per share amounts)
The table below reconciles Adjusted Net Income to the most directly comparable GAAP financial measure, net income, for the periods presented therein.
Per share figures may reflect rounding adjustments and consequently totals may not appear to sum.
	Three months ended September 30,								Nine months ended September 30,
		2022				2021				2022				2021
Net income, as reported	$	60,978			$	34,892			$	154,704			$	89,396
Adjustments for adjusted net income
Share based compensation expense		3,212				3,535				10,290				10,228
Acquisition related expenses		(94	)			(252	)			1,307				1,649
COVID-19 expenses 1		2				311				303				365
Gain on sale of assets		—				(499	)			—				(499	)
Amortization expense 2		11,370				9,224				33,728				26,798
Legal Reserve		—				—				845				—
Tax impact of adjusted items at a normalized tax rate 3		(3,767	)			(3,203	)			(12,083	)			(10,021	)
Adjusted net income	$	71,701			$	44,008			$	189,094			$	117,916
Weighted average shares outstanding (diluted)		28,595,707				29,620,748				29,020,509				29,615,162
Diluted net income per share, as reported	$	2.13			$	1.18			$	5.33			$	3.02
Adjustments for adjusted net income, net of tax impact, per diluted share 4		0.38				0.31				1.19				0.96
Diluted adjusted net income per share	$	2.51			$	1.49			$	6.52			$	3.98

1	Addback of employee pay, employee medical expenses, and legal fees directly attributable to COVID-19.
2	Addback of all non-cash amortization resulting from business combinations.
3	Normalized effective tax rate of 26.0% applied to periods presented.
4	Includes adjustments related to the items noted above, net of tax.

INSTALLED BUILDING PRODUCTS, INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
ADJUSTED GROSS PROFIT CALCULATIONS
(unaudited, in thousands)
		Three months ended September 30,								Nine months ended September 30,
			2022				2021				2022				2021
Gross profit, as reported		$	221,277			$	155,884			$	610,389			$	433,197
Share based compensation expense			164				161				484				287
COVID-19 expense 1			2				310				4				360
Adjusted gross profit		$	221,443			$	156,355			$	610,877			$	433,844
Adjusted gross profit - % Total Revenue			30.8	%			30.7	%			30.8	%			30.2	%

1	Addback of employee pay, employee medical expenses, and legal fees directly attributable to COVID-19.

INSTALLED BUILDING PRODUCTS, INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
ADJUSTED SELLING AND ADMINISTRATIVE EXPENSE CALCULATIONS
(unaudited, in thousands)
		Three months ended September 30,								Nine months ended September 30,
			2022				2021				2022				2021
Selling expense		$	31,651			$	24,188			$	86,214			$	67,677
Administrative expense			84,345				68,056				247,519				199,607
Selling and Administrative, as reported			115,996				92,244				333,733				267,284
Share based compensation expense			3,048				3,374				9,806				9,941
Acquisition related expense			(94	)			(252	)			1,307				1,649
COVID-19 expenses 1			—				1				299				5
Legal reserve			—				—				845				—
Adjusted Selling and Administrative		$	113,042			$	89,121			$	321,476			$	255,689
Adjusted Selling and Administrative - % Total Revenue			15.7	%			17.5	%			16.2	%			17.8	%

1	Addback of employee pay, employee medical expenses, and legal fees directly attributable to COVID-19.

INSTALLED BUILDING PRODUCTS, INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
ADJUSTED EBITDA CALCULATIONS
(unaudited, in thousands)
The table below reconciles Adjusted EBITDA to the most directly comparable GAAP financial measure, net income, for the periods presented therein.
Per share figures may reflect rounding adjustments and consequently totals may not appear to sum.
		Three months ended September 30,								Nine months ended September 30,
			2022				2021				2022				2021
Adjusted EBITDA
Net income, as reported		$	60,978			$	34,892			$	154,704			$	89,396
Interest expense			10,668				7,687				31,669				22,781
Provision for income tax			22,080				12,320				55,857				27,432
Depreciation and amortization			23,361				20,152				68,881				59,296
EBITDA			117,087				75,051				311,111				198,905
Acquisition related expenses			(94	)			(252	)			1,307				1,649
Share based compensation expense			3,212				3,535				10,290				10,228
COVID-19 expenses 1			2				311				303				365
Gain on sale of assets			—				(499	)			—				(499	)
Legal reserve			—				—				845				—
Adjusted EBITDA		$	120,207			$	78,146			$	323,856			$	210,648
Adjusted EBITDA Margin			16.7	%			15.3	%			16.3	%			14.7	%

1	Addback of employee pay, employee medical expenses, and legal fees directly attributable to COVID-19.

INSTALLED BUILDING PRODUCTS, INC.
SUPPLEMENTARY TABLE
(unaudited)
		Three months ended September 30,				Nine months ended September 30,
		2022		2021		2022		2021
Period-over-period Growth
Consolidated Sales Growth		41.1%		21.2%		38.2%		18.4%
Consolidated Same Branch Sales Growth		28.5%		11.2%		26.2%		8.9%
Installation 1
Sales Growth		33.5%		21.3%		31.9%		18.2%
Same Branch Sales Growth		28.4%		11.2%		26.2%		8.6%
Single-Family Sales Growth		39.2%		24.1%		38.2%		20.1%
Single-Family Same Branch Sales Growth		35.3%		16.0%		32.8%		12.8%
Multi-Family Sales Growth		33.9%		18.2%		29.7%		17.0%
Multi-Family Same Branch Sales Growth		32.9%		10.9%		28.9%		7.0%
Residential Sales Growth		38.4%		23.2%		36.8%		19.6%
Residential Same Branch Sales Growth		34.9%		15.1%		32.1%		11.8%
Commercial Sales Growth 2		16.0%		17.5%		14.4%		12.1%
Commercial Same Branch Sales Growth		2.8%		(0.2)%		4.4%		(5.0)%
Other 1,3
Sales Growth		657.3%		23.0%		567.5%		44.0%
Same Branch Sales Growth		44.3%		23.0%		43.8%		44.0%
Same Branch Sales Growth - Installation
Volume Growth 4		7.5%		4.7%		7.9%		10.4%
Price/Mix Growth 4		27.1%		7.4%		22.2%		(0.3)%
U.S. Housing Market 5
Total Completions Growth		6.5%		(2.1)%		2.3%		5.9%
Single-Family Completions Growth		8.1%		1.5%		5.4%		6.9%
Multi-Family Completions Growth		5.6%		(9.6)%		(5.3)%		4.3%

1	During the three months ended March 31, 2022, we realigned our operating segments to reflect recent changes in our business. Prior period disclosures in the above table have been recast to conform to the current period segment presentation. The segment change has no impact on the Company's previously reported consolidated U.S. GAAP financial results.
2	Our commercial end market consists of heavy and light commercial projects.
3	Other business segment category includes our manufacturing and distribution businesses operating segments. As of 1Q22, Installation segment end market growth metrics exclude the manufacturing and distribution businesses. Our distribution businesses were acquired in December, 2021 and April, 2022.
4	The heavy commercial end market is excluded from these metrics given its much larger per-job revenue compared to our average job.
5	U.S. Census Bureau data, as revised.

INSTALLED BUILDING PRODUCTS, INC.
INCREMENTAL REVENUE AND ADJUSTED EBITDA MARGINS
(unaudited, in thousands)
Revenue Increase
		Three months ended September 30,												Nine months ended September 30,
			2022		% Total				2021		% Total				2022		% Total				2021		% Total
Same Branch		$	145,083		69.3	%		$	47,216		52.9	%		$	376,491		68.6	%		$	107,467		48.2	%
Acquired			64,269		30.7	%			42,060		47.1	%			171,937		31.4	%			115,704		51.8	%
Total		$	209,352		100.0	%		$	89,276		100.0	%		$	548,428		100.0	%		$	223,171		100.0	%
Adjusted EBITDA Margin Contributions
		Three months ended September 30,												Nine months ended September 30,
			2022		% Margin				2021		% Margin				2022		% Margin				2021		% Margin
Same Branch		$	35,873		24.7	%		$	6,220		13.2	%		$	92,808		24.7	%		$	14,011		13.0	%
Acquired			6,187		9.6	%			5,726		13.6	%			20,400		11.9	%			18,172		15.7	%
Total		$	42,060		20.1	%		$	11,946		13.4	%		$	113,208		20.6	%		$	32,183		14.4	%

 

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Investor Relations:

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Source: Installed Building Products, Inc.

FAQ

What were the third quarter 2022 financial results for IBP?

IBP reported net revenue of $719.1 million, a 41.1% increase, with net income of $61 million.

What is the dividend amount declared by IBP for the fourth quarter of 2022?

IBP declared a fourth quarter dividend of $0.315 per share.

When will IBP's fourth quarter dividend be paid?

The fourth quarter dividend will be paid on December 31, 2022.

What acquisitions did IBP make in 2022?

In September 2022, IBP acquired All Florida Insulation, which has annual revenue of approximately $2.4 million.

What are the expectations for IBP's business in 2023?

IBP expects strong demand for its installation services due to a robust backlog of residential units.