Group 1 - The housing market is facing challenges due to an increasing gap between supply and demand, leading to a sharp decline in stock prices across the homebuilding industry [1] - This decline in stock prices is viewed as a potential buying opportunity for well-established companies within the sector [1] Group 2 - TopBuild Corporation is highlighted as a notable company in the homebuilding industry amidst the current market conditions [1]

Group 1: Acquisition and Revenue Impact - TopBuild Corp. has acquired Metro Supply Company, expected to generate an additional $35 million in annual revenues and expand its market reach into the New York/New Jersey and Baltimore/Washington areas [1][2] - The acquisition is part of a broader strategy, with TopBuild having acquired seven businesses in 2024, collectively contributing approximately $118 million in annual revenues [3] Group 2: Strategic Focus and Integration - The acquisition of Metro Supply adds two strategically located branches to TopBuild's Specialty Distribution network, enhancing its mechanical and acoustical insulation portfolio [2][4] - TopBuild's disciplined acquisition strategy emphasizes long-term growth and shareholder returns, with expected synergies from integrating Metro Supply's operations [5] Group 3: Market Performance and Outlook - TopBuild's shares have gained 19.6%, underperforming the industry's 41.2% rise, facing challenges in the housing market and project delays [7] - Despite these challenges, the company remains optimistic due to growing demand for energy efficiency, a housing supply shortage, and potential lower interest rates [7]

Core Viewpoint - TopBuild Corp. has announced the acquisition of Metro Supply Company, a mechanical insulation distributor, which is expected to enhance its commercial and industrial offerings and leverage Metro Supply's strong customer relationships, with the acquisition valued at approximately $35 million in annual revenue [1][2]. Group 1: Company Overview - TopBuild Corp. is a leading installer and specialty distributor of insulation and building material products in the United States and Canada, operating approximately 240 branches for installation services and around 170 branches for specialty distribution [3]. - Metro Supply Company is recognized as a leading distributor of mechanical insulation in the New York/New Jersey and Baltimore/Washington metropolitan areas, known for its exceptional customer service and high-quality products [4]. Group 2: Acquisition Details - The acquisition of Metro Supply is anticipated to close in the fourth quarter and is expected to strengthen TopBuild's Specialty Distribution offerings, particularly in mechanical and acoustical insulation [1][2]. - The acquisition aligns with TopBuild's strategy to focus on core competencies and drive future growth opportunities while increasing shareholder returns [2].

Core Insights - TopBuild Corp. reported mixed results for Q3 2024, with earnings exceeding estimates while sales fell short, yet both metrics showed year-over-year growth driven by pricing and increased volumes [1][4][3] Financial Performance - Adjusted EPS was $5.68, surpassing the Zacks Consensus Estimate of $5.62 by 1.1%, and grew 4.6% year over year [4] - Net sales reached $1,373.3 million, the highest in the company's history, but missed the consensus mark of $1,397 million by 1.7%, reflecting a 3.6% year-over-year increase [4] - Adjusted EBITDA improved 0.4% year over year to $285.1 million, although the adjusted EBITDA margin contracted 60 basis points to 20.8% [7] Segment Performance - Installation segment, accounting for 62.3% of total net sales, reported revenues of $856.4 million, up 4.2% year over year, with residential sales growing 3.7% [5] - Specialty Distribution segment, representing 43.4% of net sales, saw a 5.1% year-over-year increase to $600.4 million, with residential sales improving 8.5% compared to the prior year [6] Operational Highlights - Adjusted gross margin contracted 100 basis points year over year to 30.7%, while adjusted SG&A expenses decreased 40 basis points to 12.8% [7] - As of September 30, 2024, TopBuild had cash and cash equivalents of $257.3 million, down from $848.6 million at the end of 2023, and long-term debt decreased to $1.34 billion [7][8] Acquisitions - Year-to-date, TopBuild has acquired seven companies projected to generate approximately $118 million in annual revenues, including notable acquisitions in both the Installation and Distribution segments [9][10] Guidance - The company narrowed its 2024 guidance for net sales to between $5.30 billion and $5.35 billion, indicating growth from $5.19 billion reported in 2023 [11] - Adjusted EBITDA is now projected to be between $1.055 billion and $1.085 billion, suggesting growth from $1.05 billion reported in 2023 [11]

Financial Performance - Net sales for the third quarter of 2024 increased by 3.6% to $1,373,268, compared to $1,326,120 in the same period of 2023[98] - Gross profit margin decreased to 30.7% in Q3 2024 from 31.7% in Q3 2023, primarily due to higher material costs[99] - Operating profit for Q3 2024 was $243,993, reflecting a 2.7% increase from $237,492 in Q3 2023[103] - Net income for the third quarter of 2024 was $168,960, slightly up from $167,602 in the same quarter of 2023[98] - For the first nine months of 2024, net sales increased by 2.8% to $4,017,597 compared to $3,908,620 in the same period of 2023[110] - Operating profit for the nine months ended September 30, 2024, was $668,893, reflecting a decrease of 0.8% from $674,025 in the prior year[115] Segment Performance - The Installation segment's sales rose by 4.2% to $856,350 in Q3 2024, driven by a 2.9% increase from acquisitions[104] - The Specialty Distribution segment's sales increased by 5.1% to $600,387 in Q3 2024, with a 3.0% rise attributed to higher sales volume[106] - Installation segment sales rose by $108.3 million, or 4.5%, driven by a 3.4% increase from acquisitions and a 1.2% increase from higher selling prices[115] - Specialty Distribution segment sales increased by $35.1 million, or 2.1%, with a 1.2% rise from higher selling prices[116] Profitability Metrics - Selling, general, and administrative expenses as a percentage of sales decreased to 12.9% in Q3 2024 from 13.8% in Q3 2023, due to lower acquisition-related costs[100] - Operating profit margin for the first nine months of 2024 was 16.6%, down from 17.2% in the same period of 2023, impacted by higher material costs[114] - Operating profit margin for the Installation segment decreased to 19.9% from 20.6% due to higher material costs and changes in sales mix[115] - Operating margin for the Specialty Distribution segment improved to 15.1% from 14.5%, attributed to productivity initiatives and higher selling prices[116] Cash Flow and Liquidity - Net cash provided by operating activities decreased by $78.7 million to $509,798 for the nine months ended September 30, 2024[120] - Net cash used in financing activities surged to $957.7 million, primarily due to $919.2 million spent on share repurchases[122] - Total liquidity as of September 30, 2024, was $693,572, down from $1,284,795 at the end of 2023[125] Debt and Interest Rates - The company has a Term Loan with a principal balance of $498.8 million and a revolving facility with a borrowing capacity of $500.0 million[138] - The company has outstanding 3.625% Senior Notes totaling $400.0 million and 4.125% Senior Notes totaling $500.0 million, which bear fixed interest rates[138] - As of September 30, 2024, the applicable interest rate for the Term Loan and Revolving Facility was 5.95%[139] - A 100-basis point increase in the interest rate would lead to an increase of $4.8 million in annualized interest expense based on outstanding borrowings[139] - There was no outstanding balance under the Revolving Facility as of September 30, 2024[139] Market Outlook - The company anticipates continued demand for homes supported by strengthening energy efficiency requirements and moderating interest rates[129]

Financial Data and Key Metrics Changes - In Q3 2024, TopBuild achieved record sales of $1.37 billion, a 3.6% increase year-over-year, with adjusted EBITDA totaling $285.1 million and an adjusted EBITDA margin of 20.8% [10][22][27] - Adjusted earnings per diluted share improved by 4.6% to $5.68 compared to the previous year [29] - Total liquidity at the end of the quarter was $693.6 million, with cash of $257.3 million and net debt of $1.14 billion, resulting in a net debt leverage ratio of 1.06 times trailing 12 months adjusted EBITDA [30][31] Business Line Data and Key Metrics Changes - Installation segment sales grew 4.2% to $856.4 million, with residential sales increasing by 3.7% year-over-year, driven by M&A and single-family growth [23][24] - Specialty Distribution sales rose 5.1% to $600.4 million, with volume improving by 3% and acquisitions contributing 1.4% [24] - Adjusted EBITDA margin for the Installation segment was 22.3%, a 40 basis point improvement, while the Specialty Distribution segment's adjusted EBITDA margin expanded by 20 basis points to 18.4% [28] Market Data and Key Metrics Changes - The multifamily market is experiencing a slowdown, with expectations of continued challenges into 2025, while commercial industrial bidding remains active with a strong backlog [8][9][34] - Sales to the residential end market improved by 8.5% year-over-year, while sales to commercial and industrial end markets grew by 2.9% [25] Company Strategy and Development Direction - M&A remains a core competency and top capital allocation priority, with seven acquisitions announced in 2024, totaling approximately $118 million in annual revenue [16][31] - The company is focused on driving growth through its differentiated business model and capitalizing on improving demand as 2025 progresses [21][36] Management's Comments on Operating Environment and Future Outlook - Management noted that while the macro environment has been choppy, the fundamentals for demand in the industry remain strong, with expectations for another year of profitable growth in 2024 [20][34] - The company is optimistic about 2025, anticipating it could be the tenth consecutive year of sales and profit growth, despite current headwinds in the multifamily sector [39][88] Other Important Information - The company repurchased 1.07 million shares for a total of $413.9 million in Q3, bringing the year-to-date total to $919.2 million [18][32] - The company is tightening its full-year guidance, expecting sales between $5.3 billion and $5.35 billion, with adjusted EBITDA expectations narrowed to $1.055 billion to $1.085 billion [33][34] Q&A Session Summary Question: How to think about 2025 given current choppiness? - Management remains optimistic about 2025 being the tenth consecutive year of sales and profit growth, despite current market challenges [39] Question: Can you discuss pricing dynamics for fiberglass and spray foam? - Pricing for fiberglass improved, while spray foam saw price decreases due to increased supply and competition [42][48] Question: What is the impact of supply constraints on fiberglass volumes? - Supply constraints had some impact in Q3, but the company is positioned well going into Q4 with expectations for improved supply from new facilities [80][81] Question: What are the expectations for multifamily business in Q4? - Multifamily is expected to be a challenge moving into Q1 and Q2, but the company anticipates performing better than the market [86][88] Question: How does the company view the M&A landscape? - The M&A environment remains robust with a healthy pipeline of opportunities across all end markets [65][68] Question: How is labor availability and wage inflation affecting the company? - Labor availability has improved, but the company does not anticipate significant wage inflation due to its piece rate workforce model [75][76]

TopBuild (BLD) reported $1.37 billion in revenue for the quarter ended September 2024, representing a year-over-year increase of 3.6%. EPS of $5.68 for the same period compares to $5.43 a year ago.The reported revenue represents a surprise of -1.72% over the Zacks Consensus Estimate of $1.4 billion. With the consensus EPS estimate being $5.62, the EPS surprise was +1.07%.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine the ...

TopBuild (BLD) came out with quarterly earnings of $5.68 per share, beating the Zacks Consensus Estimate of $5.62 per share. This compares to earnings of $5.43 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 1.07%. A quarter ago, it was expected that this insulation products company would post earnings of $5.68 per share when it actually produced earnings of $5.42, delivering a surprise of -4.58%.Over the last four quarters, t ...

[Executive Summary](index=1&type=section&id=Executive%20Summary) [Third Quarter 2024 Performance Overview](index=1&type=section&id=1.1%20Third%20Quarter%202024%20Performance%20Overview) TopBuild reported record third-quarter sales of **$1.37 billion** and adjusted EBITDA of **$285 million**, driven by growth in both Installation (**4.2%**) and Specialty Distribution (**5.1%**) segments, achieving the highest quarterly sales and profit in company history | Metric | Q3 2024 Value | | :-------------------------- | :------------ | | Sales | $1.37 billion | | Adjusted EBITDA | $285 million | | Gross Margin | 30.7% | | Adjusted EBITDA Margin | 20.8% | | Installation Sales Growth | 4.2% | | Specialty Distribution Sales Growth | 5.1% | - Achieved the **highest level of quarterly sales and profit** in company history[2](index=2&type=chunk) [CEO Commentary](index=1&type=section&id=1.2%20CEO%20Commentary) CEO Robert Buck highlighted the company's strong performance, attributing it to a focus on growth and profitability, a healthy M&A pipeline, and significant capital return through share repurchases - Ongoing focus on **growth and profitability** enabled strong performance[2](index=2&type=chunk) - M&A pipeline is very healthy, with acquisitions being a priority for strong free cash flow[3](index=3&type=chunk) | Metric | Q3 2024 Value | | :------------------- | :------------ | | Share Repurchases | $413.9 million | | Shares Repurchased | 1.07 million | [2024 Outlook Update](index=1&type=section&id=1.3%202024%20Outlook%20Update) The company narrowed its 2024 guidance due to an uneven housing environment and project delays, but remains optimistic about future growth drivers like energy efficiency and housing supply deficit - Narrows 2024 outlook based on assumptions for a continued uneven housing environment and ongoing delay of certain commercial/industrial projects[2](index=2&type=chunk) - Optimistic about business with strengthening requirements for energy efficiency, the U.S. housing supply deficit, increasing household formations, and the prospect of lower interest rates driving growth[2](index=2&type=chunk) [Financial Highlights](index=1&type=section&id=Financial%20Highlights) [Three Months Ended September 30, 2024](index=1&type=section&id=2.1%20Three%20Months%20Ended%20September%2030%2C%202024) For Q3 2024, TopBuild reported sales of **$1.37 billion**, gross profit of **$421.8 million**, net income of **$169.0 million**, diluted EPS of **$5.65**, and adjusted EBITDA of **$285.1 million** | Metric (in thousands) | 2024 Reported | 2023 Reported | 2024 Adjusted | 2023 Adjusted | | :-------------------- | :------------ | :------------ | :------------ | :------------ | | Sales | $1,373,268 | $1,326,120 | $1,373,268 | $1,326,120 | | Gross Profit | $421,813 | $420,690 | $421,813 | $420,690 | | Gross Margin | 30.7% | 31.7% | 30.7% | 31.7% | | SG&A | $177,820 | $183,198 | $175,888 | $174,758 | | Operating Profit | $243,993 | $237,492 | $245,925 | $245,932 | | Operating Margin | 17.8% | 17.9% | 17.9% | 18.5% | | Net Income | $168,960 | $167,601 | $170,075 | $172,507 | | Net Income per diluted share | $5.65 | $5.27 | $5.68 | $5.43 | | EBITDA | | | $285,057 | $283,690 | | EBITDA Margin | | | 20.8% | 21.4% | [Nine Months Ended September 30, 2024](index=2&type=section&id=2.2%20Nine%20Months%20Ended%20September%2030%2C%202024) For the first nine months of 2024, TopBuild's sales reached **$4.02 billion**, with gross profit of **$1.23 billion**, net income of **$472.1 million**, diluted EPS of **$15.19**, and adjusted EBITDA of **$816.6 million** | Metric (in thousands) | 2024 Reported | 2023 Reported | 2024 Adjusted | 2023 Adjusted | | :-------------------- | :------------ | :------------ | :------------ | :------------ | | Sales | $4,017,597 | $3,908,620 | $4,017,597 | $3,908,620 | | Gross Profit | $1,232,885 | $1,212,704 | $1,232,885 | $1,212,704 | | Gross Margin | 30.7% | 31.0% | 30.7% | 31.0% | | SG&A | $563,992 | $538,679 | $534,497 | $524,480 | | Operating Profit | $668,893 | $674,025 | $698,388 | $688,224 | | Operating Margin | 16.6% | 17.2% | 17.4% | 17.6% | | Net Income | $472,064 | $467,870 | $493,997 | $477,551 | | Net Income per diluted share | $15.19 | $14.74 | $15.89 | $15.04 | | EBITDA | | | $816,570 | $797,520 | | EBITDA Margin | | | 20.3% | 20.4% | [Sales Drivers](index=3&type=section&id=Sales%20Drivers) [Three Months Ended September 30, 2024 Sales Drivers](index=3&type=section&id=3.1%20Three%20Months%20Ended%20September%2030%2C%202024%20Sales%20Drivers) In Q3 2024, total sales increased by **3.6%**, driven by M&A (**2.4%**), price increases (**1.0%**), and volume growth (**0.4%**), with Installation sales up **4.2%** and Specialty Distribution up **5.1%** | Sales Driver | Installation | Specialty Distribution | TopBuild, net of elims | | :----------- | :----------- | :--------------------- | :--------------------- | | Volume | 0.5% | 3.0% | 0.4% | | Price | 1.1% | 0.8% | 1.0% | | M&A | 2.9% | 1.4% | 2.4% | | Dispositions | (0.2%) | | (0.1%) | | Total Sales Change | 4.2% | 5.1% | 3.6% | [Nine Months Ended September 30, 2024 Sales Drivers](index=3&type=section&id=3.2%20Nine%20Months%20Ended%20September%2030%2C%202024%20Sales%20Drivers) For the first nine months of 2024, total sales increased by **2.8%**, primarily due to M&A (**2.5%**) and price increases (**1.2%**), despite a slight volume decrease, with Installation sales up **4.5%** and Specialty Distribution up **2.1%** | Sales Driver | Installation | Specialty Distribution | TopBuild, net of elims | | :----------- | :----------- | :--------------------- | :--------------------- | | Volume | 0.6% | (0.2%) | (0.5%) | | Price | 1.2% | 1.2% | 1.2% | | M&A | 3.4% | 1.0% | 2.5% | | Dispositions | (0.6%) | | (0.4%) | | Total Sales Change | 4.5% | 2.1% | 2.8% | [Segment Profitability](index=3&type=section&id=Segment%20Profitability) [Three Months Ended September 30, 2024 Segment Profitability](index=3&type=section&id=4.1%20Three%20Months%20Ended%20September%2030%2C%202024%20Segment%20Profitability) In Q3 2024, Installation operating profit decreased by **1.7%** to **$172.2 million** (20.1% margin), while Specialty Distribution operating profit increased by **7.5%** to **$94.9 million** (15.8% margin) | Metric (in thousands) | Installation | Specialty Distribution | | :-------------------- | :----------- | :--------------------- | | Operating Profit | $172,243 | $94,911 | | Change (YoY) | (1.7%) | 7.5% | | Operating Margin | 20.1% | 15.8% | | Adj. Operating Profit | $172,274 | $95,109 | | Adj. Operating Margin | 20.1% | 15.8% | | Adj. EBITDA | $191,382 | $110,600 | | Change (YoY) | (1.8%) | 6.5% | | Adj. EBITDA Margin | 22.3% | 18.4% | [Nine Months Ended September 30, 2024 Segment Profitability](index=3&type=section&id=4.2%20Nine%20Months%20Ended%20September%2030%2C%202024%20Segment%20Profitability) For the first nine months of 2024, Installation operating profit increased by **1.1%** to **$499.7 million** (19.9% margin), and Specialty Distribution operating profit rose by **5.8%** to **$261.9 million** (15.1% margin) | Metric (in thousands) | Installation | Specialty Distribution | | :-------------------- | :----------- | :--------------------- | | Operating Profit | $499,717 | $261,862 | | Change (YoY) | 1.1% | 5.8% | | Operating Margin | 19.9% | 15.1% | | Adj. Operating Profit | $500,081 | $261,320 | | Adj. Operating Margin | 20.0% | 15.0% | | Adj. EBITDA | $556,816 | $307,507 | | Change (YoY) | 1.5% | 4.8% | | Adj. EBITDA Margin | 22.2% | 17.7% | [Capital Allocation](index=4&type=section&id=Capital%20Allocation) [Acquisitions](index=4&type=section&id=5.1%20Acquisitions) Year-to-date, TopBuild completed or announced **7 acquisitions**, projected to add approximately **$118 million** in annual revenue, with Shannon Global Energy Services being the most recent - Completed or announced **7 acquisitions** year-to-date[8](index=8&type=chunk) - Acquisitions are expected to generate approximately **$118 million** in annual revenue[8](index=8&type=chunk) | Company Name | Annual Revenue ($millions) | Month Closed | | :-------------------------- | :------------------------- | :----------- | | Brabble Insulation, Inc. (I) | 5.2 | February | | Morris Black & Sons, Inc (I) | 3.8 | March | | Pest Control Insulation LLC (D) | 25.4 | March | | Green Space Insulation LLC (I) | 6.0 | April | | Insulation Works, Inc. (I) | 28.0 | May | | Texas Insulation (I) | 38.9 | May | | Shannon Global Energy Services (D) | 10.8 | TBD | | **Total** | **118.1** | | [Share Repurchases](index=4&type=section&id=5.2%20Share%20Repurchases) In Q3 2024, TopBuild repurchased **1.07 million shares** for **$413.9 million**, bringing year-to-date repurchases to **2.3 million shares** totaling **$919.2 million**, with **$235.2 million** remaining | Metric | Q3 2024 | YTD 2024 | | :-------------------------------- | :------ | :------- | | Shares Repurchased (millions) | 1.07 | 2.3 | | Total Value of Repurchases (millions) | $413.9 | $919.2 | | Remaining Authorization (millions) | | $235.2 | [2024 Outlook](index=4&type=section&id=2024%20Outlook) TopBuild narrowed its full-year 2024 outlook, projecting sales between **$5.3 billion** and **$5.35 billion** and adjusted EBITDA between **$1.055 billion** and **$1.085 billion**, reflecting caution in housing and commercial/industrial markets - Narrows full year 2024 outlook based on assumptions for a continued uneven housing environment and ongoing delay of certain commercial/industrial projects[11](index=11&type=chunk) - The Company has not experienced an uptick in project cancellations[11](index=11&type=chunk) | Metric (in millions) | Low | High | | :------------------- | :--------- | :--------- | | Sales | $5,300.0 | $5,350.0 | | Adjusted EBITDA | $1,055.0 | $1,085.0 | [Company Information & Disclosures](index=4&type=section&id=Company%20Information%20%26%20Disclosures) [Conference Call Details](index=4&type=section&id=7.1%20Conference%20Call%20Details) A conference call to discuss Q3 2024 financial results was scheduled for November 5, 2024, at 9:00 a.m. Eastern Time, with a webcast available - Conference call to discuss Q3 2024 results scheduled for November 5, 2024, at 9:00 a.m. Eastern Time[13](index=13&type=chunk) [About TopBuild](index=5&type=section&id=7.2%20About%20TopBuild) TopBuild Corp. is a leading installer and specialty distributor of insulation and related building materials in the US and Canada, operating approximately 250 Installation and 170 Specialty Distribution branches - TopBuild Corp. is a leading installer and specialty distributor of insulation and related building material products to the construction industry in the United States and Canada[14](index=14&type=chunk) - Operates approximately **250 Installation branches** and **170 Specialty Distribution branches**[14](index=14&type=chunk) [Use of Non-GAAP Financial Measures](index=5&type=section&id=7.3%20Use%20of%20Non-GAAP%20Financial%20Measures) TopBuild uses non-GAAP measures like Adjusted EBITDA for meaningful comparisons, with reconciliations to GAAP provided in the press release - Non-GAAP financial measures (e.g., Adjusted EBITDA) are used to provide additional meaningful comparisons between current and prior period results[15](index=15&type=chunk) - These measures are reconciled to their closest GAAP financial measures in tables within the press release[15](index=15&type=chunk) [Safe Harbor Statement](index=5&type=section&id=7.4%20Safe%20Harbor%20Statement) This section clarifies that the press release contains forward-looking statements subject to risks and uncertainties, and the company disclaims any obligation to update them - The press release contains forward-looking statements regarding expected financial and operational results, subject to risks and uncertainties[16](index=16&type=chunk) - Actual results may differ materially from forward-looking statements due to unpredictable factors[16](index=16&type=chunk) [Condensed Consolidated Financial Statements (Unaudited)](index=5&type=section&id=Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) [Condensed Consolidated Statements of Operations](index=5&type=section&id=8.1%20Condensed%20Consolidated%20Statements%20of%20Operations) This section presents unaudited condensed consolidated statements of operations for Q3 and YTD 2024 and 2023, detailing net sales, cost of sales, gross profit, SG&A, operating profit, and net income | Metric (in thousands) | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :-------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net sales | $1,373,268 | $1,326,120 | $4,017,597 | $3,908,620 | | Cost of sales | 951,455 | 905,430 | 2,784,712 | 2,695,916 | | Gross profit | 421,813 | 420,690 | 1,232,885 | 1,212,704 | | SG&A expense | 177,820 | 183,198 | 563,992 | 538,679 | | Operating profit | 243,993 | 237,492 | 668,893 | 674,025 | | Interest expense | (18,449) | (18,830) | (55,811) | (55,427) | | Other, net | 2,355 | 6,015 | 24,987 | 12,542 | | Income before income taxes | 227,899 | 224,677 | 638,069 | 631,140 | | Income tax expense | (58,939) | (57,075) | (166,005) | (163,270) | | Net income | $168,960 | $167,602 | $472,064 | $467,870 | | Diluted EPS | $5.65 | $5.27 | $15.19 | $14.74 | [Condensed Consolidated Statements of Comprehensive Income](index=7&type=section&id=8.2%20Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) This section provides unaudited condensed consolidated statements of comprehensive income for Q3 and YTD 2024 and 2023, showing net income and other comprehensive income (loss) from foreign currency translation | Metric (in thousands) | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :-------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net income | $168,960 | $167,602 | $472,064 | $467,870 | | Foreign currency translation adjustment | 2,463 | (3,008) | (3,464) | 3,029 | | Comprehensive income | $171,423 | $164,594 | $468,600 | $470,899 | [Condensed Consolidated Balance Sheets and Other Financial Data](index=8&type=section&id=8.3%20Condensed%20Consolidated%20Balance%20Sheets%20and%20Other%20Financial%20Data) This section presents unaudited condensed consolidated balance sheets as of September 30, 2024, and December 31, 2023, detailing assets, liabilities, and equity, along with receivable and inventory days | Metric (in thousands) | Sep 30, 2024 | Dec 31, 2023 | | :-------------------- | :----------- | :----------- | | Cash and cash equivalents | $257,342 | $848,565 | | Total current assets | 1,521,139 | 2,049,244 | | Total assets | $4,650,517 | $5,162,851 | | Total current liabilities | 756,140 | 771,538 | | Total liabilities | 2,536,248 | 2,599,196 | | Total liabilities and equity | $4,650,517 | $5,162,851 | | Other Financial Data | 2024 | 2023 | | :------------------- | :--- | :--- | | Receivable days | 49 | 51 | | Inventory days | 38 | 36 | | Accounts payable days | 58 | 60 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=8.4%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section provides unaudited condensed consolidated statements of cash flows for YTD 2024 and 2023, categorizing cash flows from operating, investing, and financing activities | Cash Flow Activity (in thousands) | Nine Months 2024 | Nine Months 2023 | | :-------------------------------- | :--------------- | :--------------- | | Net cash provided by operating activities | $509,798 | $588,478 | | Net cash used in investing activities | (142,918) | (181,016) | | Net cash used in financing activities | (957,701) | (31,872) | | Net (decrease) increase in cash and cash equivalents | (591,223) | 375,543 | | Cash and cash equivalents - End of period | $257,342 | $615,612 | [Segment Data & Non-GAAP Reconciliations (Unaudited)](index=10&type=section&id=Segment%20Data%20%26%20Non-GAAP%20Reconciliations%20(Unaudited)) [Segment Data](index=10&type=section&id=9.1%20Segment%20Data) This section details segment-level financial data for Installation and Specialty Distribution, including sales, operating profit, and adjusted EBITDA for Q3 and YTD 2024 and 2023 | Metric (in thousands) | Installation Q3 2024 | Installation Q3 2023 | Specialty Distribution Q3 2024 | Specialty Distribution Q3 2023 | | :-------------------- | :------------------- | :------------------- | :----------------------------- | :----------------------------- | | Sales | $856,350 | $821,673 | $600,387 | $571,009 | | Operating profit, as reported | $172,243 | $175,218 | $94,911 | $88,269 | | Operating margin, as reported | 20.1% | 21.3% | 15.8% | 15.5% | | EBITDA, as adjusted | $191,382 | $194,979 | $110,600 | $103,815 | | EBITDA margin, as adjusted | 22.3% | 23.7% | 18.4% | 18.2% | | Metric (in thousands) | Installation YTD 2024 | Installation YTD 2023 | Specialty Distribution YTD 2024 | Specialty Distribution YTD 2023 | | :-------------------- | :-------------------- | :-------------------- | :------------------------------ | :------------------------------ | | Sales | $2,506,076 | $2,397,818 | $1,739,007 | $1,703,871 | | Operating profit, as reported | $499,717 | $494,394 | $261,862 | $247,583 | | Operating margin, as reported | 19.9% | 20.6% | 15.1% | 14.5% | | EBITDA, as adjusted | $556,816 | $548,616 | $307,507 | $293,334 | | EBITDA margin, as adjusted | 22.2% | 22.9% | 17.7% | 17.2% | [Adjusted EBITDA Reconciliation](index=10&type=section&id=9.2%20Adjusted%20EBITDA%20Reconciliation) This section reconciles total net sales and operating profit to adjusted EBITDA for Q3 and YTD 2024 and 2023, detailing adjustments for rationalization charges, acquisition costs, and share-based compensation | Metric (in thousands) | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 | | :-------------------- | :------ | :------ | :------- | :------- | | Net sales after eliminations | $1,373,268 | $1,326,120 | $4,017,597 | $3,908,620 | | Operating profit, as reported | $243,993 | $237,492 | $668,893 | $674,025 | | Rationalization charges | 485 | 1,882 | (7) | 1,882 | | Acquisition related costs | 1,447 | 6,558 | 6,502 | 12,317 | | Acquisition termination fee | - | - | 23,000 | - | | Operating profit, as adjusted | $245,925 | $245,932 | $698,388 | $688,224 | | Share-based compensation | 3,646 | 4,194 | 13,405 | 11,080 | | Depreciation and amortization | 35,486 | 33,564 | 104,777 | 98,216 | | EBITDA, as adjusted | $285,057 | $283,690 | $816,570 | $797,520 | [Non-GAAP Reconciliations](index=13&type=section&id=9.3%20Non-GAAP%20Reconciliations) This section provides detailed reconciliations of various GAAP financial measures to their corresponding non-GAAP adjusted figures for Q3 and YTD 2024 and 2023 [Gross Profit Reconciliation](index=13&type=section&id=9.3.1%20Gross%20Profit%20Reconciliation) | Metric (in thousands) | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 | | :-------------------- | :------ | :------ | :------- | :------- | | Net sales | $1,373,268 | $1,326,120 | $4,017,597 | $3,908,620 | | Gross profit, as reported | $421,813 | $420,690 | $1,232,885 | $1,212,704 | | Acquisition related costs | - | - | - | - | | Gross profit, as adjusted | $421,813 | $420,690 | $1,232,885 | $1,212,704 | | Gross margin, as reported | 30.7% | 31.7% | 30.7% | 31.0% | | Gross margin, as adjusted | 30.7% | 31.7% | 30.7% | 31.0% | [Selling, General and Administrative Expense Reconciliation](index=13&type=section&id=9.3.2%20Selling%2C%20General%20and%20Administrative%20Expense%20Reconciliation) | Metric (in thousands) | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 | | :-------------------- | :------ | :------ | :------- | :------- | | SG&A expense, as reported | $177,820 | $183,198 | $563,992 | $538,679 | | Rationalization charges | 485 | 1,882 | (7) | 1,882 | | Acquisition related costs | 1,447 | 6,558 | 6,502 | 12,317 | | Acquisition termination fee | - | - | 23,000 | - | | SG&A expense, as adjusted | $175,888 | $174,758 | $534,497 | $524,480 | [Operating Profit Reconciliation](index=13&type=section&id=9.3.3%20Operating%20Profit%20Reconciliation) | Metric (in thousands) | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 | | :-------------------- | :------ | :------ | :------- | :------- | | Operating profit, as reported | $243,993 | $237,492 | $668,893 | $674,025 | | Rationalization charges | 485 | 1,882 | (7) | 1,882 | | Acquisition related costs | 1,447 | 6,558 | 6,502 | 12,317 | | Acquisition termination fee | - | - | 23,000 | - | | Operating profit, as adjusted | $245,925 | $245,932 | $698,388 | $688,224 | | Operating margin, as reported | 17.8% | 17.9% | 16.6% | 17.2% | | Operating margin, as adjusted | 17.9% | 18.5% | 17.4% | 17.6% | [Income Per Common Share Reconciliation](index=13&type=section&id=9.3.4%20Income%20Per%20Common%20Share%20Reconciliation) | Metric (in thousands) | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 | | :-------------------- | :------ | :------ | :------- | :------- | | Income before income taxes, as reported | $227,899 | $224,677 | $638,069 | $631,140 | | Rationalization charges | 485 | 1,882 | (7) | 1,882 | | Acquisition related costs | 1,447 | 6,558 | 6,502 | 12,317 | | Acquisition termination fee | - | - | 23,000 | - | | Income before income taxes, as adjusted | 229,831 | 233,117 | 667,564 | 645,339 | | Tax rate at 26.0% | (59,756) | (60,610) | (173,567) | (167,788) | | Income, as adjusted | $170,075 | $172,507 | $493,997 | $477,551 | | Income per common share, as adjusted | $5.68 | $5.43 | $15.89 | $15.04 | [Reconciliation of Adjusted EBITDA to Net Income](index=14&type=section&id=9.4%20Reconciliation%20of%20Adjusted%20EBITDA%20to%20Net%20Income) This section reconciles net income to adjusted EBITDA for Q3 and YTD 2024 and 2023, detailing adjustments for interest, tax, depreciation, share-based compensation, rationalization, and acquisition costs | Metric (in thousands) | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 | | :-------------------- | :------ | :------ | :------- | :------- | | Net income, as reported | $168,960 | $167,602 | $472,064 | $467,870 | | Interest expense and other, net | 16,094 | 12,815 | 30,824 | 42,885 | | Income tax expense | 58,939 | 57,075 | 166,005 | 163,270 | | Depreciation and amortization | 35,486 | 33,564 | 104,777 | 98,216 | | Share-based compensation | 3,646 | 4,194 | 13,405 | 11,080 | | Rationalization charges | 485 | 1,882 | (7) | 1,882 | | Acquisition related costs | 1,447 | 6,558 | 6,502 | 12,317 | | Acquisition termination fee | - | - | 23,000 | - | | EBITDA, as adjusted | $285,057 | $283,690 | $816,570 | $797,520 | [Acquisition Adjusted Net Sales](index=15&type=section&id=9.5%20Acquisition%20Adjusted%20Net%20Sales) This section presents net sales adjusted for the pro forma effect of acquired branches for the trailing twelve months ended September 30, 2024, and quarterly data from Q4 2023 to Q3 2024 | Metric (in thousands) | 2023 Q4 | 2024 Q1 | 2024 Q2 | 2024 Q3 | Trailing Twelve Months Ended Sep 30, 2024 | | :-------------------- | :------ | :------ | :------ | :------ | :---------------------------------------- | | Net Sales | $1,286,074 | $1,278,717 | $1,365,612 | $1,373,268 | $5,303,671 | | Acquisitions proforma adjustment | 28,367 | 24,075 | 10,603 | - | 63,045 | | Net sales, acquisition adjusted | $1,314,441 | $1,302,792 | $1,376,215 | $1,373,268 | $5,366,716 | [2024 Estimated Adjusted EBITDA Range](index=16&type=section&id=9.6%202024%20Estimated%20Adjusted%20EBITDA%20Range) This section outlines the estimated adjusted EBITDA range for the twelve months ending December 31, 2024, from **$1.055 billion** to **$1.085 billion**, with a reconciliation from estimated net income | Metric (in millions) | Low | High | | :------------------- | :------ | :------ | | Estimated net income, as reported | $606.0 | $634.0 | | Interest expense and other, net | 48.0 | 45.0 | | Income tax expense | 213.0 | 222.0 | | Depreciation and amortization | 142.0 | 140.0 | | Share-based compensation | 17.0 | 16.0 | | Acquisition related costs & rationalization charges | 29.0 | 28.0 | | Estimated EBITDA, as adjusted | $1,055.0 | $1,085.0 |

Third quarter sales of $1.37 billion driven by 4.2% Installation growth and 5.1% Specialty Distribution growth Delivered gross margin of 30.7% and adjusted EBITDA margin of 20.8% Narrows 2024 guidance to $5.3 to $5.35 billion in revenue and $1.055 to $1.085 billion in adjusted EBITDA DAYTONA BEACH, Fla., Nov. 05, 2024 (GLOBE NEWSWIRE) -- TopBuild Corp. (NYSE:BLD) a leading installer and specialty distributor of insulation and building material products to the construction industry in the United States and C ...