• TopBuild Reports Fourth Quarter and Year-End 2023 Financial Results

    Source: Nasdaq GlobeNewswire / 28 Feb 2024 05:45:45   America/Chicago

    Fourth Quarter Highlights

    • Sales increase 1.7% to $1.3 billion
    • Gross margin expands 70 basis points to 30.4%
    • Adjusted EBITDA margin expands 80 basis points to 19.6%

    Full Year Highlights

    • Sales increase 3.7% to $5.2 billion
    • Gross margin expands 120 basis points to 30.9%
    • Adjusted EBITDA margin expands 140 basis points to 20.2%

    Provides 2024 Sales and Adjusted EBITDA Outlook

    DAYTONA BEACH, Fla., Feb. 28, 2024 (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 year ended December 31. 2023.

    Robert Buck, President and Chief Executive Officer, stated, “Our fourth quarter results cap a year of continuous improvement and profitable growth. We are particularly pleased with the performance of our businesses that serve the commercial and industrial end markets, which grew 4.9% in the fourth quarter and 6.2% for the full year.”

    Fourth Quarter Financial Highlights

    (comparisons are to the quarter ended December 31, 2022)

    3 Months Ended 12/31/23ReportedChange
    Sales$1,286,0741.7%
    Gross Margin30.4%70 bps
    SG&A as % of revenue14.5%90 bps
    Operating Profit$204,8000.8%
    Operating Margin15.9%(20 bps)
    Net Income$146,3821.8%
    Net Income per diluted share$4.601.8%
       
    3 Months Ended 12/31/23AdjustedChange
    Sales$1,286,0741.7%
    Gross Margin30.4%70 bps
    SG&A as % of revenue13.9%40 bps
    Operating Profit$212,2223.8%
    Operating Margin16.5%30 bps
    Net Income$149,3056.6%
    Net Income per diluted share$4.696.6%
    EBITDA$251,6416.0%
    EBITDA Margin19.6%80 bps
       

    Full Year 2023 Financial Highlights
    (comparisons are to the twelve months ended December 31, 2022)

    12 Months Ended 12/31/23ReportedChange
    Sales$5,194,6943.7%
    Gross Margin30.9%120 bps
    SG&A as % of revenue14.0%20 bps
    Operating Profit$878,82510.2%
    Operating Margin16.9%100 bps
    Net Income$614,25410.5%
    Net Income per diluted share$19.3312.8%
       
    12 Months Ended 12/31/23AdjustedChange
    Sales$5,194,6943.7%
    Gross Margin30.9%120 bps
    SG&A as % of revenue13.5%(10 bps)
    Operating Profit$900,44611.9%
    Operating Margin17.3%120 bps
    Net Income$626,85713.0%
    Net Income per diluted share$19.7315.3%
    EBITDA$1,049,16011.5%
    EBITDA Margin20.2%140 bps
       

    “2023 was another year of consistent performance and solid execution for TopBuild, demonstrating the strength of our unique operating model and our ability to adapt to changing environments,” noted Buck. “Our unrelenting focus on driving operational efficiencies, striving for operational excellence, and improving sales and labor productivity contributed to our solid revenue growth and year-over-year margin expansion.”

    Operating Segment Highlights ($ in 000s)
    (comparisons are to the periods ended December 31, 2022)

    Installation3 Months
    Ended
    12/31/23
    12 Months
    Ended
    12/31/23
     Specialty
    Distribution
    3 Months
    Ended
    12/31/23
    12 Months
    Ended
    12/31/23
    Sales$790,414$3,188,232 Sales$564,468$2,268,339
    Change   Change  
    Volume-3.0%0.4% Volume-0.2%-1.6%
    Price2.4%3.6% Price0.5%1.1%
    M&A5.1%3.6% M&A0.0%0.0%
    Dispositions-0.7%-0.3% Dispositions0.0%0.0%
    Total Change3.8%7.3% Total Change0.2%-0.4%
    Operating Margin19.0%20.2% Operating Margin14.8%14.6%
    Change40 bps170 bps Change50 bps30 bps
    Adj. Operating Margin19.0%20.3% Adj. Operating Margin14.8%14.6%
    Change30 bps180 bps Change40 bps20 bps
    Adj. EBITDA Margin21.4%22.5% Adj. EBITDA Margin17.5%17.3%
    Change60 bps190 bps Change80 bps40 bps
           

    Capital Allocation
    2023 Acquisitions
    The Company acquired four residential insulation installation companies which are expected to generate over $172 million in annual revenue. They are listed in the chart below.

     TTM Revenue atMonth
    Company AcquiredAcquisition ($ millions)Acquired
    SRI Holdings$62.0January
    Best Insulation$100.0July
    Rocky Mountain Spray Foam$5.4July
    Panhandle Insulation$5.3October
    Total$172.7 
       

    “Acquisitions remain the best use of our capital, generating strong returns for our shareholders. We continue to work diligently on our planned acquisition of SPI. All three of our end-markets are highly fragmented and present great opportunities to reinvest our strong free cash flow to drive shareholder value,” said Buck.

    2024 Acquisitions
    Year-to-date, the Company has acquired one residential insulation company, Brabble Insulation, and has entered into an agreement to acquire a second residential insulation installer, Morris Black & Sons, which will close on March 1st. Combined, they are expected to generate approximately $9 million of annual revenue. The Company also previously announced that it had entered into an agreement to acquire the assets of Pest Control Insulation, a specialty distribution company focused on blended, customized insulation products, accessories, and equipment for sale exclusively to the pest control industry. In 2023, Pest Control Insulation generated approximately $24 million of revenue. This transaction is also expected to close on March 1st.

    2024 Outlook
    “We expect 2024 will be another strong year for TopBuild. We see many opportunities in the year ahead to again demonstrate the unique advantages of our operating model and to take advantage of our multiple avenues for growth,” added Buck.

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

    2024LowHigh
    Sales$5,360 $5,560 
    Adjusted EBITDA*$1,040 $1,130 
           

    *See table for adjusted EBITDA reconciliation.

    2024 Assumptions 
    Residential RevenueMid Single Digit Growth
    Commercial/Industrial RevenueMid Single Digit Growth
    CapEx (% of Sales)1.5% to 2.0%
    Working Capital Goal (% LTM Sales)12% to 14%
    Income Tax Rate25% to 27%
    Incremental Adjusted EBITDA (Organic)22% to 27%
    Incremental Adjusted EBITDA (Acquisitions Year One)11% to 16%
      

    (1) This outlook reflects management’s current view of present and future market conditions and are based on assumptions such as housing starts, general and administrative expenses, 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 2023 financial results is scheduled for today, Wednesday, February 28, 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 240 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 170 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,
      2023 2022 2023 2022
    Net sales $1,286,074  $1,264,543  $5,194,694  $5,008,744 
    Cost of sales  894,958   888,871   3,590,874   3,522,025 
    Gross profit  391,116   375,672   1,603,820   1,486,719 
                 
    Selling, general, and administrative expense  186,316   172,558   724,995   689,555 
    Operating profit  204,800   203,114   878,825   797,164 
                 
    Other income (expense), net:            
    Interest expense  (19,187)  (16,779)  (74,614)  (56,716)
    Other, net  8,729   1,585   21,272   1,687 
    Other expense, net  (10,458)  (15,194)  (53,342)  (55,029)
    Income before income taxes  194,342   187,920   825,483   742,135 
                 
    Income tax expense  (47,960)  (44,086)  (211,229)  (186,146)
    Net income $146,382  $143,834  $614,254  $555,989 
                 
    Net income per common share:            
    Basic $4.63  $4.54  $19.44  $17.26 
    Diluted $4.60  $4.52  $19.33  $17.14 
                 
    Weighted average shares outstanding:            
    Basic  31,623,506   31,648,741   31,597,508   32,213,839 
    Diluted  31,805,569   31,838,352   31,776,901   32,440,405 
                 


     
    TopBuild Corp.
    Consolidated Statements of Comprehensive Income
    (in thousands)
                   
      Three Months Ended December 31, Year Ended December 31,
      2023 2022 2023 2022
    Net income $146,382  $143,834  $614,254  $555,989 
    Other comprehensive income (loss):              
    Foreign currency translation adjustment  4,227   (6,762)  7,255   (15,286)
    Comprehensive income $150,609  $137,072  $621,509  $540,703 
                   


     
    TopBuild Corp.
    Consolidated Balance Sheets and Other Financial Data
    (dollars in thousands)
      As of December 31,
      2023 2022
    ASSETS        
    Current assets:        
    Cash and cash equivalents $848,565  $240,069 
    Receivables, net of an allowance for credit losses of $23,948 at December 31, 2023, and $20,014 at December 31, 2022  799,009   836,071 
    Inventories  364,731   438,644 
    Prepaid expenses and other current assets  36,939   34,257 
    Total current assets  2,049,244   1,549,041 
             
    Right of use assets  204,629   205,892 
    Property and equipment, net  264,487   253,484 
    Goodwill  2,042,568   1,966,994 
    Other intangible assets, net  591,058   614,967 
    Other assets  10,865   16,453 
    Total assets $5,162,851  $4,606,831 
             
    LIABILITIES        
    Current liabilities:        
    Accounts payable $469,585  $487,114 
    Current portion of long-term debt  47,039   40,068 
    Accrued liabilities  187,217   199,370 
    Short-term operating lease liabilities  65,780   60,880 
    Short-term finance lease liabilities  1,917   2,207 
    Total current liabilities  771,538   789,639 
             
    Long-term debt  1,373,028   1,417,257 
    Deferred tax liabilities, net  243,930   251,481 
    Long-term portion of insurance reserves  58,783   59,783 
    Long-term operating lease liabilities  146,213   149,943 
    Long-term finance lease liabilities  4,150   6,673 
    Other liabilities  1,554   2,349 
    Total liabilities  2,599,196   2,677,125 
             
    EQUITY  2,563,655   1,929,706 
    Total liabilities and equity $5,162,851  $4,606,831 
             
      As of December 31,
      2023 2022
    Other Financial Data        
    Receivable days  53   54 
    Inventory days  37   45 
    Accounts payable days  62   66 
    Receivables, net plus inventories less accounts payable $694,155  $787,601 
    Receivables, net plus inventories less accounts payable as a percent of sales (TTM) †  13.2%  15.7%
             
    † 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,
      2023 2022
    Cash Flows Provided by (Used in) Operating Activities:     
    Net income $614,254  $555,989 
    Adjustments to reconcile net income to net cash provided by operating activities:      
    Depreciation and amortization  132,878   123,335 
    Share-based compensation  15,838   12,310 
    Loss on sale of assets  2,349   1,833 
    Amortization of debt issuance costs  2,881   2,867 
    Provision for bad debt expense  6,481   5,510 
    Provision for inventory obsolescence  4,794   6,659 
    Deferred income taxes, net  (7,476)  6,041 
    Change in certain assets and liabilities:      
    Receivables, net  20,812   (169,327)
    Inventories  74,529   (93,874)
    Prepaid expenses and other current assets  (2,598)  (9,222)
    Accounts payable  (8,867)  26,581 
    Accrued liabilities  (4,444)  20,703 
    Other, net  (2,022)  6,396 
    Net cash provided by operating activities  849,409   495,801 
           
    Cash Flows Provided by (Used in) Investing Activities:      
    Purchases of property and equipment  (63,998)  (76,382)
    Acquisition of businesses, net of cash acquired  (149,154)  (20,500)
    Proceeds from sale of assets  14,982   2,975 
    Net cash used in investing activities  (198,170)  (93,907)
           
    Cash Flows Provided by (Used in) Financing Activities:      
    Repayment of long-term debt  (40,138)  (38,658)
    Proceeds from revolving credit facility     70,000 
    Repayment of revolving credit facility     (70,000)
    Taxes withheld and paid on employees' equity awards  (6,528)  (11,719)
    Exercise of stock options  3,130   2,028 
    Repurchase of shares of common stock     (250,050)
    Payment of contingent consideration  (300)  (1,674)
    Net cash used in by financing activities  (43,836)  (300,073)
    Impact of exchange rate changes on cash  1,093   (1,531)
    Net increase in cash and cash equivalents  608,496   100,290 
    Cash and cash equivalents - Beginning of period  240,069   139,779 
    Cash and cash equivalents - End of period $848,565  $240,069 
           
    Supplemental disclosure of cash paid for:      
    Interest $71,463  $49,888 
    Income taxes  220,773   186,722 
           
    Supplemental disclosure of noncash activities:      
    Leased assets obtained in exchange for new operating lease liabilities $56,255  $103,997 
    Accruals for property and equipment  912   141 
           


     
    TopBuild Corp.
    Segment Data (Unaudited)
    (dollars in thousands)
                         
      Three Months Ended December 31,    Year Ended December 31,  
      2023
     2022
     Change 2023
     2022 Change
    Installation                    
    Sales $790,414  $761,261  3.8% $3,188,232  $2,969,978  7.3%
                         
    Operating profit, as reported $149,999  $141,961     $644,392  $548,795   
    Operating margin, as reported  19.0%  18.6%     20.2%  18.5%  
                         
    Rationalization charges  41   161      1,923   (174)  
    Acquisition related costs  11   23      527   135   
    Operating profit, as adjusted $150,051  $142,145     $646,842  $548,756   
    Operating margin, as adjusted  19.0%  18.7%     20.3%  18.5%  
                         
    Share-based compensation  372   339      1,496   1,296   
    Depreciation and amortization  18,422   15,869      69,123   62,483   
    EBITDA, as adjusted $168,845  $158,353  6.6% $717,461  $612,535  17.1%
    EBITDA margin, as adjusted  21.4%  20.8%     22.5%  20.6%  
                         
    Specialty Distribution                    
    Sales $564,468  $563,065  0.2% $2,268,339  $2,278,261  (0.4)%
                         
    Operating profit, as reported $83,355  $80,692     $330,938  $326,226   
    Operating margin, as reported  14.8%  14.3%     14.6%  14.3%  
                         
    Acquisition related costs     266      350   1,502   
    Operating profit, as adjusted $83,355  $80,958     $331,288  $327,728   
    Operating margin, as adjusted  14.8%  14.4%     14.6%  14.4%  
                         
    Share-based compensation  298   104      1,286   1,041   
    Depreciation and amortization  15,193   13,184      59,607   56,881   
    EBITDA, as adjusted $98,846  $94,246  4.9% $392,181  $385,650  1.7%
    EBITDA margin, as adjusted  17.5%  16.7%     17.3%  16.9%  
                         


     
    TopBuild Corp.
    Adjusted EBITDA (Unaudited)
    (dollars in thousands)
                       
      Three Months Ended December 31,    Year Ended December 31,   
      2023 2022 Change 2023 2022 Change
    Total net sales                  
    Sales before eliminations $1,354,882  $1,324,326     $5,456,571  $5,248,239    
    Intercompany eliminations  (68,808)  (59,783)     (261,877)  (239,495)   
    Net sales after eliminations $1,286,074  $1,264,543  1.7% $5,194,694  $5,008,744  3.7%
                       
    Operating profit, as reported - segments $233,354  $222,653     $975,330  $875,021    
    General corporate expense, net  (16,787)  (9,650)     (52,067)  (38,018)   
    Intercompany eliminations  (11,767)  (9,889)     (44,438)  (39,839)   
    Operating profit, as reported $204,800  $203,114     $878,825  $797,164    
    Operating margin, as reported  15.9%  16.1%     16.9%  15.9%   
                       
    Rationalization charges  41   162      1,923   (172)   
    Acquisition related costs †  7,381   1,216      19,698   7,974    
    Operating profit, as adjusted $212,222  $204,492     $900,446  $804,966    
    Operating margin, as adjusted  16.5%  16.2%     17.3%  16.1%   
                       
    Share-based compensation  4,757   2,637      15,836   12,310    
    Depreciation and amortization  34,662   30,284      132,878   123,335    
    EBITDA, as adjusted $251,641  $237,413  6.0% $1,049,160  $940,611  11.5%
    EBITDA margin, as adjusted  19.6%  18.8%     20.2%  18.8%   
                       
    Sales change period over period  21,531         185,950       
    EBITDA, as adjusted, change period over period  14,228         108,549       
    Incremental EBITDA, as adjusted, as a percentage of change in sales  66.1%        58.4%      
                       
    † Acquisition related costs include corporate level adjustments as well as segment operating adjustments
                       


     
    TopBuild Corp.
    Same Branch and Acquisition Metrics (Unaudited)
    (dollars in thousands)
                 
      Three Months Ended December 31, Year Ended December 31,
      2023 2022 2023 2022
    Net sales            
    Same branch:            
    Installation $751,971  $756,330  $3,080,770  $2,960,926 
    Specialty Distribution  564,468   563,065   2,268,339   2,278,261 
    Eliminations  (68,808)  (59,783)  (261,877)  (239,495)
    Total same branch $1,247,631  $1,259,612  $5,087,232  $4,999,692 
                 
    Acquisitions (a):            
    Installation $38,443  $  $107,462  $ 
    Total acquisitions  38,443      107,462    
                 
    Dispositions (b):            
    Installation $  $4,931  $  $9,052 
    Total dispositions     4,931      9,052 
    Total net sales $1,286,074  $1,264,543  $5,194,694  $5,008,744 
                 
    EBITDA, as adjusted            
    Same branch $246,769  $236,941  $1,033,980  $939,183 
    Acquisitions (a)  4,872      15,180    
    Dispositions (b)     472      1,428 
    Total $251,641  $237,413  $1,049,160  $940,611 
                 
    EBITDA, as adjusted, as a percentage of sales            
    Same branch (c)  19.8%     20.3%   
    Acquisitions (d)  12.7%     14.1%   
    Total (e)  19.6%  18.8%  20.2%  18.8%
                 
    As Adjusted Incremental EBITDA, as a percentage of change in sales            
    Same branch (f)  NM      108.3%   
    Acquisitions (d)  12.7%     14.1%   
    Total (g)  66.1%     58.4%   
                 
    (a) Represents current year impact of acquisitions in their first twelve months
    (b) Represents operating results in prior period previously classified as same branch, including $4,121 net sales and $956 EBITDA, as adjusted, in the third quarter of 2022, respectively
    (c) Same branch metric, as adjusted, as a percentage of same branch sales
    (d) Acquired metric, as adjusted, as a percentage of acquired sales
    (e) Total EBITDA, as adjusted, as a percentage of total sales
    (f) Change in same branch EBITDA, as adjusted, as a percentage of change in same branch sales
    (g) Change in total EBITDA, as adjusted, as a percentage of change in total sales
    NM Not Meaningful
                 


     
    TopBuild Corp.
    Non-GAAP Reconciliations (Unaudited)
    (in thousands, except share and per common share amounts)
                 
      Three Months Ended December 31, Year Ended December 31,
      2023 2022 2023 2022
    Gross Profit Reconciliation            
                 
    Net sales $1,286,074  $1,264,543  $5,194,694  $5,008,744 
                 
    Gross profit, as reported $391,116  $375,672  $1,603,820  $1,486,719 
                 
    Acquisition related costs     15      135 
    Gross profit, as adjusted $391,116  $375,687  $1,603,820  $1,486,854 
                 
    Gross margin, as reported  30.4%  29.7%  30.9%  29.7%
    Gross margin, as adjusted  30.4%  29.7%  30.9%  29.7%
                 
    Selling, General and Administrative Expense Reconciliation            
                 
    Selling, general, and administrative expense, as reported $186,316  $172,558  $724,995  $689,555 
                 
    Rationalization charges  41   162   1,923   (172)
    Acquisition related costs  7,381   1,201   19,698   7,839 
    Selling, general, and administrative expense, as adjusted $178,894  $171,195  $703,374  $681,888 
                 
    Operating Profit Reconciliation            
                 
    Operating profit, as reported $204,800  $203,114  $878,825  $797,164 
                 
    Rationalization charges  41   162   1,923   (172)
    Acquisition related costs  7,381   1,216   19,698   7,974 
    Operating profit, as adjusted $212,222  $204,492  $900,446  $804,966 
                 
    Operating margin, as reported  15.9%  16.1%  16.9%  15.9%
    Operating margin, as adjusted  16.5%  16.2%  17.3%  16.1%
                 
    Income Per Common Share Reconciliation            
                 
    Income before income taxes, as reported $194,342  $187,920  $825,483  $742,135 
                 
    Rationalization charges  41   162   1,923   (172)
    Acquisition related costs  7,381   1,216   19,698   7,974 
    Income before income taxes, as adjusted  201,764   189,298   847,104   749,937 
                 
    Tax rate at 26.0%  (52,459)  (49,217)  (220,247)  (194,984)
    Income, as adjusted $149,305  $140,081  $626,857  $554,953 
                 
    Income per common share, as adjusted $4.69  $4.40  $19.73  $17.11 
                 
    Weighted average diluted common shares outstanding  31,805,569   31,838,352   31,776,901   32,440,405 
                 


     
    TopBuild Corp.
    Reconciliation of Adjusted EBITDA to Net Income (Unaudited)
    (in thousands)
                   
      Three Months Ended December 31, Year Ended December 31,
      2023 2022 2023 2022
    Net income, as reported $146,382  $143,834  $614,254  $555,989 
    Adjustments to arrive at EBITDA, as adjusted:              
    Interest expense and other, net  10,458   15,194   53,342   55,029 
    Income tax expense  47,960   44,086   211,229   186,146 
    Depreciation and amortization  34,662   30,284   132,878   123,335 
    Share-based compensation  4,757   2,637   15,836   12,310 
    Rationalization charges  41   162   1,923   (172)
    Acquisition related costs  7,381   1,216   19,698   7,974 
    EBITDA, as adjusted $251,641  $237,413  $1,049,160  $940,611 
                   
    Proforma acquisition EBITDA(a)         $6,251    
    Proforma disposition EBITDA(b)          (3,040)   
    Proforma TTM EBITDA, as adjusted         $1,052,371    
                   
    (a) Represents the trailing twelve months proforma impact of acquisitions completed in 2023
    (b) Represents the trailing twelve months proforma impact of dispositions completed in 2023
                   


     
    TopBuild Corp.
    Acquisition Adjusted Net Sales (Unaudited)
    (in thousands)
     2023 Year Ended
     Q1 Q2 Q3 Q4 December 31, 2023
    Net sales$1,265,238  $1,317,262  $1,326,120  $1,286,074  $5,194,694 
    Acquisitions proforma adjustment † 31,847   26,978   5,400   55   64,280 
    Net sales, acquisition adjusted$1,297,085  $1,344,240  $1,331,520  $1,286,129  $5,258,974 
                        
                        
    † Trailing 12 months sales have been adjusted for the pro forma effect of acquired branches
                        


     
    TopBuild Corp.
    Net Sales by Market (Unaudited)
    (in thousands)
      Three Months Ended December 31, Year Ended December 31,
      2023 2022 2023 2022
    Residential $830,915  $830,789  $3,350,003  $3,272,001 
    Commercial/Industrial  455,159   433,754   1,844,691   1,736,743 
    Total net sales $1,286,074  $1,264,543  $5,194,694  $5,008,744 
                     


     
    TopBuild Corp.
    2024 Estimated Adjusted EBITDA Range (Unaudited)
    (in millions)
            
     Twelve Months Ending December 31, 2024
     Low
     High
    Estimated net income, as reported$588.0  $667.0 
    Adjustments to arrive at estimated EBITDA, as adjusted:      
    Interest expense and other, net 60.0   54.0 
    Income tax expense 206.0   234.0 
    Depreciation and amortization 140.0   135.0 
    Share-based compensation 21.0   18.0 
    Acquisition related costs 25.0   22.0 
    Estimated EBITDA, as adjusted$1,040.0  $1,130.0 
            

     


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