TopBuild Corp. (NYSE:BLD), the leading purchaser, installer and distributor of insulation products to the United States construction industry, reported financial results for the third quarter ended September 30, 2016.
Jerry Volas, Chief Executive Officer of TopBuild stated, “We continue to successfully leverage our existing platform to generate sales growth, outpacing the increase in lagged housing starts. We believe the trajectory of housing starts will continue to be positive, as there is a limited supply of new construction, and increasing household formations are driving demand. This is an excellent external environment for TopBuild to drive market share and sales growth.
“Our operational improvement initiatives are also generating positive results. The 8.7% adjusted operating margin for the third quarter is an increase of 140 basis points year-over-year and 230 basis points sequentially. Year-to-date, our adjusted operating profit margin has expanded 200 basis points. In summary, we remain focused on balancing top line growth with margin performance.”
Third Quarter Financial Highlights
(unless otherwise indicated, comparisons are to the quarter ended September 30, 2015)
| · | Net sales increased 5.9% to $453.1 million, primarily driven by sales volume growth in both operating segments. | ||
| · | Gross margin was up 190 basis points year-over-year and 170 basis points on an adjusted basis. |
| · | Selling, general, and administrative (“SG&A”) expenses as a percentage of sales were 15.2%, compared to 14.9%. | ||
| · | Operating profit was $39.1 million compared to $30.2 million. On an adjusted basis, operating profit was $39.6 million compared to $31.2 million, a 26.7% improvement. |
| · | Operating margins improved 150 basis points to 8.6%. On an adjusted basis, operating margins were 8.7%, up 140 basis points. | ||
| · | Net income from continuing operations was $24.6 million, or $0.65 per diluted share, compared to $16.6 million or $0.44 per diluted share. On an adjusted basis, net income from continuing operations was $23.8 million, or $0.63 per diluted share compared to $19.0 million or $0.50 per diluted share. |
| · | At quarter end, the Company had cash and cash equivalents of $104.5 million and availability under its revolving credit facility of $75.9 million for total liquidity of $180.4 million. |
Operating Segment Highlights
(all comparisons are to quarter ended September 30, 2015)
| · | TruTeamSM (Installation) | |||||
| o | Net sales increased 7.2% driven primarily by increased volume. | |||||
| o | Operating margin was 10.7%, a 330 basis point improvement. On an adjusted basis, operating margin was 10.8%, a 300 basis point improvement. | |||||
| · | Service Partners® (Distribution) | |||||
| o | Net sales rose 1.9%, negatively impacted by a decrease in selling prices. | ||
| o | Operating margin was 8.9% compared to 9.9%, with the margin decline primarily attributable to lower selling prices. |
Additional Information
A presentation that will be referenced on today’s conference call is available on the “Investors” section of the Company’s website at www.topbuild.com.
Conference Call Details
A conference call to discuss the Company’s third quarter financial results for 2016 is scheduled for today, Wednesday, November 9, 2016, at 9:00 a.m. Eastern Time. The call may be accessed by dialing (800) 624-0538. The conference call will be webcast simultaneously on the “Investors” section of the Company’s website at www.topbuild.com.
A replay of the call will be available on TopBuild’s website or it may be accessed by phone by dialing (800) 633-8284. The replay passcode is 21817553.
About TopBuild
TopBuild Corp., headquartered in Daytona Beach, Florida, is the leading purchaser, installer and distributor of insulation products to the U.S. construction industry. We provide insulation services nationwide through TruTeamSM, which has over 170 branches and our Service Partners® business distributes insulation from over 70 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.
