[Installed Building Products First Quarter 2025 Results](index=1&type=section&id=Installed%20Building%20Products%20First%20Quarter%202025%20Results) [Financial & Operational Highlights](index=1&type=section&id=First%20Quarter%202025%20Highlights) Installed Building Products reported solid first-quarter 2025 results despite a challenging housing market, characterized by a slight 1.2% decrease in net revenue to $684.8 million. The company demonstrated strong operating cash flow, which increased by 8.6% to $92.1 million, and actively returned capital to shareholders through $34.3 million in share repurchases and $56.8 million in dividends. Management remains focused on disciplined capital allocation and operational improvements Q1 2025 Key Financial Metrics (vs. Prior Year Period) | Metric | Q1 2025 Value | Change vs. Q1 2024 | | :--- | :--- | :--- | | Net Revenue | $684.8 million | -1.2% | | Net Income | $45.4 million | Decreased | | Adjusted EBITDA* | $102.4 million | Decreased | | Net Income per Diluted Share | $1.64 | Decreased from $1.97 | | Adjusted Net Income per Diluted Share* | $2.08 | Decreased from $2.47 | | Net Cash Flow from Operations | $92.1 million | +8.6% | - Management noted that while the housing market faces affordability challenges and a slower spring selling season, the company's long-term opportunities in residential and commercial markets remain attractive[3](index=3&type=chunk) - The company's business model, which sources products and labor domestically, is not expected to face substantial disruptions from changing import tariffs[4](index=4&type=chunk) [Financial Performance Review](index=2&type=section&id=First%20Quarter%202025%20Results%20Overview) In Q1 2025, IBP's net revenue saw a slight decrease of 1.2% to $684.8 million, driven by a 4.2% decline in consolidated same branch sales. Profitability was impacted, with gross margin contracting to 32.7% from 33.8% and adjusted EBITDA margin falling to 15.0% from 16.9%, primarily due to higher administrative wages, facility costs, and vehicle-related expenses Revenue Performance (Q1 2025 vs Q1 2024) | Revenue Category | Q1 2025 Change YoY | | :--- | :--- | | Net Revenue | -1.2% | | Consolidated Same Branch Sales | -4.2% | | Residential Same Branch Sales | -4.6% | | Commercial Same Branch Sales | -2.8% | Profitability Margin Analysis (Q1 2025 vs Q1 2024) | Margin Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Gross Profit Margin | 32.7% | 33.8% | | Adjusted Gross Profit Margin* | 32.7% | 33.9% | | Adjusted EBITDA Margin* | 15.0% | 16.9% | | Net Profit Margin | 6.6% | 8.1% | - Margin reductions were primarily attributed to increased administrative wages, higher facility costs, and rising vehicle insurance and depreciation expenses[13](index=13&type=chunk) [Capital Allocation and Corporate Developments](index=1&type=section&id=Capital%20Allocation%20and%20Corporate%20Developments) IBP continued its strategy of profitable growth and shareholder returns in Q1 2025. The company executed on its acquisition plan, acquiring over $10 million in annual revenue year-to-date, and returned $91.1 million to shareholders via dividends and buybacks. A 6% increase in the regular quarterly dividend was also announced - Acquisition Strategy: Acquired over **$10 million** of annual revenue year-to-date and expects to acquire at least **$100 million** of annual revenue in 2025. Recent acquisitions include Volunteer Building Products (**$6M revenue**) and Pro Foamers, Inc. (**$4M revenue**)[6](index=6&type=chunk)[14](index=14&type=chunk) - Share Repurchases: Repurchased **200,000 shares** of common stock for a total of **$34.3 million** in Q1 2025. Approximately **$465.7 million** remains available under the stock repurchase program[7](index=7&type=chunk) - Dividends: The Board declared a Q2 2025 regular cash dividend of **$0.37 per share**, a **6% increase** from the prior year's Q2 dividend. In Q1, the company paid a regular dividend of **$0.37** and an annual variable dividend of **$1.70 per share**[5](index=5&type=chunk)[6](index=6&type=chunk) [Segment and End Market Performance](index=9&type=section&id=Segment%20and%20End%20Market%20Performance) The Installation segment remains the core of IBP's business, contributing 95% of total net revenue in Q1 2025. Within this segment, residential new construction is the largest end market, accounting for 72% of installation revenue. Both Installation segment revenue and its gross profit margin saw a slight decline compared to the prior year Installation Segment Performance (Q1 2025 vs Q1 2024) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue | $647.2 million | $655.9 million | | Segment Gross Profit | $229.5 million | $236.6 million | | Segment Gross Profit % | 35.5% | 36.1% | Revenue by End Market (Q1 2025) | End Market | Revenue (in millions) | % of Total Revenue | | :--- | :--- | :--- | | **Installation** | | | | Residential New Construction | $494.4 | 72% (of Installation) | | Repair and Remodel | $42.4 | 6% (of Installation) | | Commercial | $110.4 | 17% (of Installation) | | **Total Installation** | **$647.2** | **95%** | | **Other** | **$37.6** | **5%** | | **Total Net Revenue** | **$684.8** | **100%** | [Supplementary Data](index=15&type=section&id=Supplementary%20Data) Supplementary data for Q1 2025 reveals a consolidated sales decline of 1.2%, with same-branch sales falling 4.2%. The decline in same-branch installation sales was driven by a 5.6% decrease in volume, partially offset by a 1.5% increase in price/mix. Acquired businesses contributed $21.0 million in revenue during the quarter Period-over-Period Growth (Q1 2025 vs Q1 2024) | Metric | Q1 2025 Growth | Q1 2024 Growth | | :--- | :--- | :--- | | Consolidated Sales Growth | (1.2)% | 5.1% | | Consolidated Same Branch Sales Growth | (4.2)% | 2.9% | | Installation Same Branch Sales Growth | (3.7)% | 3.1% | | Installation Same Branch Volume Growth | (5.6)% | (1.4)% | | Installation Same Branch Price/Mix Growth | 1.5% | 3.8% | Incremental Revenue & Adjusted EBITDA (Q1 2025) | Contribution Source | Revenue | Adjusted EBITDA | Adj. EBITDA Margin | | :--- | :--- | :--- | :--- | | Same Branch | ($29.0 M) | ($18.2 M) | (62.8)% (decremental) | | Acquired | $21.0 M | $3.4 M | 16.2% | [Financial Statements](index=5&type=section&id=Financial%20Statements) The unaudited condensed consolidated financial statements for the period ended March 31, 2025, detail the company's financial position and performance. Net income for the quarter was $45.4 million. The balance sheet shows total assets of $2.0 billion and total stockholders' equity of $660.9 million. The company generated $92.1 million in cash from operations [Income Statement](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS%20AND%20COMPREHENSIVE%20INCOME) For the first quarter of 2025, IBP generated $684.8 million in net revenue, a decrease from $692.9 million in the prior-year period. Operating income fell to $69.8 million from $87.9 million, resulting in net income of $45.4 million, or $1.64 per diluted share Q1 2025 Statement of Operations (in millions, except per share) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net revenue | $684.8 | $692.9 | | Gross profit | $223.7 | $234.5 | | Operating income | $69.8 | $87.9 | | Net income | $45.4 | $55.9 | | Diluted EPS | $1.64 | $1.97 | [Balance Sheet](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of March 31, 2025, IBP had total assets of approximately $2.0 billion, a slight decrease from year-end 2024. Cash and cash equivalents stood at $298.7 million. Total liabilities were $1.34 billion, with total stockholders' equity at $660.9 million Balance Sheet Highlights (in millions) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $298.7 | $327.6 | | Total current assets | $994.7 | $1,054.9 | | Total assets | $1,999.3 | $2,059.9 | | Total current liabilities | $344.7 | $359.0 | | Total liabilities | $1,338.4 | $1,354.6 | | Total stockholders' equity | $660.9 | $705.3 | [Cash Flow Statement](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) In Q1 2025, IBP generated $92.1 million in net cash from operating activities, an 8.6% increase year-over-year. Net cash used in investing activities was $26.1 million, primarily for property/equipment purchases and acquisitions. Financing activities used $94.9 million, largely due to dividend payments ($56.8 million) and common stock repurchases ($34.3 million) Q1 2025 Cash Flow Summary (in millions) | Cash Flow Category | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $92.1 | $84.8 | | Net cash used in investing activities | ($26.1) | ($21.1) | | Net cash used in financing activities | ($94.9) | ($50.3) | | Net change in cash and cash equivalents | ($28.9) | $13.4 | [Reconciliation of GAAP to Non-GAAP Measures](index=11&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) The company provides non-GAAP financial measures such as Adjusted EBITDA, Adjusted Net Income, and Adjusted Gross Profit to offer investors insight into core operational performance by excluding items like amortization, share-based compensation, and acquisition-related expenses. These reconciliations bridge the gap between reported GAAP figures and the adjusted metrics used by management [Reconciliation of Adjusted Net Income](index=12&type=section&id=ADJUSTED%20NET%20INCOME%20CALCULATIONS) Adjusted Net Income for Q1 2025 was $57.6 million, or $2.08 per diluted share. This is reconciled from a GAAP Net Income of $45.4 million by adding back non-cash amortization ($10.1 million), share-based compensation ($5.9 million), and other items, net of tax Adjusted Net Income Reconciliation (Q1 2025, in millions) | Line Item | Amount | | :--- | :--- | | Net income, as reported (GAAP) | $45.4 | | Share-based compensation expense | $5.9 | | Amortization expense | $10.1 | | Acquisition related expenses | $0.5 | | Tax impact of adjusted items | ($4.3) | | **Adjusted net income (Non-GAAP)** | **$57.6** | [Reconciliation of EBITDA and Adjusted EBITDA](index=14&type=section&id=EBITDA%20AND%20ADJUSTED%20EBITDA%20CALCULATIONS) Adjusted EBITDA for Q1 2025 was $102.4 million, resulting in an Adjusted EBITDA margin of 15.0%. This figure is derived from GAAP Net Income of $45.4 million by adding back interest, taxes, D&A, and other adjustments like share-based compensation Adjusted EBITDA Reconciliation (Q1 2025, in millions) | Line Item | Amount | | :--- | :--- | | Net income, as reported (GAAP) | $45.4 | | Interest expense | $8.3 | | Provision for income tax | $15.9 | | Depreciation and amortization | $26.4 | | **EBITDA (Non-GAAP)** | **$96.0** | | Share based compensation expense | $5.9 | | Acquisition related expenses | $0.5 | | **Adjusted EBITDA (Non-GAAP)** | **$102.4** |

Company Overview - IBP has a national platform of over 250 locations serving all 48 continental states and the District of Columbia[16] - In 2024, Insulation accounted for 60% of revenue, while New Single Family represented 57% of the end-market revenue[18] - The company has generated over $1 billion in free cash flow in five years[25] - From 2020 to 2024, IBP allocated $579 million (50%) to acquisitions, $246 million (21%) to share repurchases, and $323 million (28%) to dividends[33] - An established IBP branch generates ~$4,400 per residential permit, while a developing branch generates ~$2,200 per residential permit[43] Financial Performance - IBP's residential sales per completion more than doubled from $555 in 2015 to $1,308 in 2024[55] - Net revenue increased from $16532 million in 2020 to $29413 million in 2024, a 59% growth[57] - Adjusted EBITDA increased from $2456 million in 2020 to $5114 million in 2024[57] - Net Debt / Adjusted EBITDA was 108x as of December 31, 2024[69] - Adjusted Gross Profit margin was 338% in 2024[57]

Financial Data and Key Metrics Changes - Consolidated net revenue for Q4 2024 increased 4% to a record $750 million compared to $721 million in the same period last year [17] - Adjusted net income rose to $81 million or $2.88 per diluted share, reflecting strong operational performance [22] - Adjusted EBITDA for Q4 2024 reached a record $132 million, with an adjusted EBITDA margin of 17.6% [21] Business Line Data and Key Metrics Changes - Single-family sales growth was supported by a diverse mix of builders, contributing to nearly 6% consolidated sales growth for the year [10][11] - Multifamily installation sales grew over 6% on a same-branch basis, indicating resilience in this segment [12] - Commercial sales in the installation segment improved modestly from the prior year, reflecting stable demand [12] Market Data and Key Metrics Changes - Single-family starts in 2024 were up 7%, indicating a positive trend in the housing market [14] - The company expects a relatively stable demand environment for single-family installation services in 2025, despite challenges in housing affordability [15] - The multifamily market is anticipated to face a decline of 20% to 25% in units under construction, which may take six months to normalize [35][36] Company Strategy and Development Direction - The company continues to invest in growth opportunities, with approximately $87 million allocated for acquisitions in 2024 [8] - A new stock buyback program has been authorized, expanding repurchase capacity to $500 million, reflecting confidence in financial stability [26] - The company aims to maintain a disciplined approach to capital allocation while focusing on profitable growth and maximizing shareholder returns [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term demand for installed services, despite current market challenges [15][89] - The company anticipates a slow start to the spring selling season, with expectations of low single-family starts growth in 2025 [38][41] - Management remains committed to delivering high service levels and operational improvements in 2025 and beyond [16] Other Important Information - The board approved a 6% increase in both the regular quarterly cash dividend and the annual variable dividend for 2025 [8][27] - The company generated $340 million in cash flow from operations for the year, maintaining strong liquidity [24] - The net debt to trailing twelve-month adjusted EBITDA leverage ratio was 1.08 times, well below the target of 2 times [25] Q&A Session Summary Question: Expectations for multifamily and single-family work in 2025 - Management believes multifamily will continue to outperform the market, but acknowledges a potential decline in units under construction [34][36] - For single-family, a good case scenario is low single-family starts growth, with expectations of negative comps in the first half of the year [38][41] Question: Outlook on price mix at the beginning of the year - Current price mix benefits are carryover from prior periods, with a benign inflationary environment impacting pricing [42][44] Question: Growth plans for multifamily and CQ's role - CQ is expected to expand into new markets, with significant opportunities for growth in multifamily sales [50][56] Question: Competitive dynamics and pricing pressures - The environment is competitive, but management emphasizes maintaining relationships with builders and prioritizing fair pricing over volume [86][88] Question: Impact of inventory levels on builders - Builders are managing high inventory levels, and the company is observing varied conditions across different markets [136][139] Question: Internal distribution capabilities and margin impact - Progress is being made in expanding internal distribution capabilities, with expectations that it will not significantly drag margins [142][143]

Revenue Breakdown - Insulation installation accounted for approximately 60% of net revenue, totaling $2.9 billion for the year ended December 31, 2024[27]. - The installation and service of garage doors represented approximately 6% of net revenue for the year ended December 31, 2024[33]. - The distribution segment comprised approximately 5% of net revenue for the year ended December 31, 2024[41]. - The manufacturing segment, focused on cellulose insulation, accounted for approximately 1% of net revenue for the year ended December 31, 2024[43]. - The company’s top ten customers accounted for approximately 15% of net revenue for the year ended December 31, 2024[67]. Market Presence and Growth - The company completed over 200 acquisitions since 1999, significantly expanding its market presence and product offerings[22]. - The company has diversified its product offerings, with insulation installation decreasing from 74% of revenues in 2013 to 60% in 2024[47]. - Commercial end market revenue increased from approximately 11% in 2013 to 16% in 2024, enhancing revenue visibility[47]. - The company operates approximately 250 branch locations across 48 states and the District of Columbia[21]. - The company’s expansion into new geographic markets may present competitive and operational challenges, potentially affecting future sales growth[141]. Employee and Operational Efficiency - Employee retention efforts have reduced turnover to below industry averages, contributing to operational efficiency[49]. - The average monthly turnover rate for installers was 2.8% in 2024, compared to 3.9% for the U.S. construction industry[74]. - The workforce is comprised of 51.3% Hispanic or Latino employees, exceeding the construction industry average, with over 50% ethnic minorities overall[77][78]. - The company experienced a 5% increase in total hours worked from 2023 to 2024, while the OSHA-defined incident rate per 100 employees decreased by 9% to 5.10 for the year ended December 31, 2024[66]. Financial Performance and Backlog - The company reported a backlog of $126.3 million as of December 31, 2024, down from $115.7 million as of December 31, 2023[68]. - The estimated backlog associated with the commercial end market was approximately $126.3 million as of December 31, 2024[146]. Economic and Market Conditions - Housing starts in 2024 were reported at 1.37 million, a 3.9% decrease from 1.42 million in 2023, with a forecasted decline to 1.32 million in 2025[59]. - Inflation in the U.S. averaged 2.9% in 2024, down from 3.4% in 2023, impacting material costs and housing affordability[62]. - The commercial sector is predicted to see a modest increase of 6% in investment dollars in 2025 over 2024[61]. - The commercial construction market increased by 7% in 2024 compared to 2023, as measured by investment dollars[103]. - Commercial building starts are expected to rise by 6% in 2025 from 2024, while institutional building starts are projected to increase by 4%[104]. Corporate Social Responsibility - The Installed Building Products Foundation supports employee education and community initiatives, enhancing corporate social responsibility[50]. - In 2024, the Foundation and the Company awarded over 750 grants totaling over $4.5 million, an increase from 172 grants totaling $2.5 million in 2023[75]. - The company is committed to socially responsible practices, including giving back to communities and providing financial wellness training to employees[86]. Regulatory and Compliance Risks - The company is subject to various federal, state, and local regulations, including those related to employee safety and environmental compliance, with no material costs incurred to date[86][91]. - Federal and state regulations regarding ESG practices are evolving, potentially increasing compliance costs and impacting access to capital[131]. - The company is subject to various federal, state, and local laws and regulations that could impose substantial costs and restrictions on its operations[165]. Competition and Market Risks - The company faces significant competition in the building products installation industry, which could adversely affect its financial condition and results of operations[109]. - Increased fuel costs could negatively impact the cost of delivering products, affecting net income if selling prices cannot be adjusted accordingly[125]. - The commercial construction market's strength is influenced by various economic factors, including capital availability, material costs, and interest rates[105]. Financial Obligations and Capital Needs - The company has significant debt obligations that may restrict future operations and impair the ability to meet obligations[171]. - A substantial portion of cash flow from operations will be dedicated to interest and principal payments on indebtedness, reducing funds available for operations and growth[171]. - The company anticipates needing additional capital for growth, which may not be available on favorable terms[185]. Cybersecurity and Risk Management - The Board of Directors oversees the company's Enterprise Risk Management program, including cybersecurity risks[208]. - The company maintains a cybersecurity program aligned with industry standards, including the CIS Control framework[204]. - The company has experienced cybersecurity incidents in the normal course of business but is not currently aware of any that materially affect operations[202]. Legal and Liability Risks - The company is exposed to product liability and other claims related to the products it installs or manufactures, which could adversely affect its financial condition[157]. - Legal claims and lawsuits, including wage and hour lawsuits, could materially affect the company's results of operations and financial condition[156]. - Changes in employment laws could adversely impact operating costs, particularly in areas such as wage and hour laws, minimum wage requirements, and workers' compensation rates[152].

Financial Data and Key Metrics Changes - Consolidated net revenue for Q4 2024 increased 4% to a record $750 million compared to $721 million in Q4 2023 [13] - Adjusted net income rose to $81 million or $2.88 per diluted share [16] - Adjusted EBITDA for Q4 2024 reached a record $132 million, reflecting an adjusted EBITDA margin of 17.6% [16] - Same branch sales growth was up 1% for Q4 2024, with a 1.2% increase in price mix offsetting a less than 1% decrease in job volumes [13][14] Business Line Data and Key Metrics Changes - Single-family sales growth was supported by a diverse mix of builders, contributing to nearly 6% consolidated sales growth for the year [8] - Multifamily installation sales growth remained resilient, with same branch sales increasing over 6% in 2024 [9] - Commercial sales in the installation segment improved modestly from the prior year [9] Market Data and Key Metrics Changes - Single-family starts in 2024 were up 7%, indicating a stable demand environment for installation services [10] - The company expects a 20% to 25% decline in multifamily units under construction, which will take at least six months to normalize [24][66] Company Strategy and Development Direction - The company continues to invest in growth opportunities, with approximately $87 million allocated to acquisitions and $230 million towards dividends and share repurchases in 2024 [6][7] - The Board approved a 6% increase in both the regular quarterly cash dividend and the annual variable dividend, reflecting confidence in the financial position [6][19] - The company aims to expand its geographic footprint and product offerings, particularly in the multifamily segment [9][34] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term demand for installed services despite current challenges in housing affordability and regulatory uncertainties [11] - The company anticipates stable demand for single-family installation services in 2025, with expectations of low single-family starts growth [26] - Management noted that while the environment is softer, it is not dire, and they remain constructive about medium and long-term demand for new construction [62][63] Other Important Information - The company generated $340 million in cash flow from operations for the year, maintaining a strong liquidity position [17] - The net debt to trailing twelve-month adjusted EBITDA leverage ratio was 1.08x, well below the target of 2x [18] - The company repurchased 383,000 shares in Q4 2024, totaling $145 million for the year, with a new stock buyback program authorized for $500 million [18][19] Q&A Session Summary Question: Expectations for multifamily and single-family work in the New Year - Management expects to outperform the multifamily market despite a projected decline in units under construction, while single-family growth is anticipated to be low to mid-single digits [24][26] Question: Outlook on price mix at the beginning of the year - The current environment is benign for inflation, with price mix benefits primarily from prior periods [28] Question: Growth plans for multifamily and CQ's role - CQ is expected to expand into new markets, with significant opportunities for growth in multifamily [33][36] Question: Competitive dynamics and pricing pressures - The company acknowledges a competitive environment but emphasizes maintaining relationships and fair pricing over volume [60][62] Question: Impact of inventory levels on builders - Builders are managing high inventory levels, and the company is observing varied conditions across different regions [95][98] Question: Internal distribution capabilities and margin impact - The company is making progress in internal distribution, which is expected to benefit margins over time [101][103]

Core Viewpoint - Installed Building Products (IBP) reported quarterly earnings of $2.90 per share, slightly missing the Zacks Consensus Estimate of $2.91 per share, but showing an increase from $2.72 per share a year ago, indicating a mixed performance in earnings expectations [1][2]. Financial Performance - The company posted revenues of $750.2 million for the quarter ended December 2024, which was 2.72% below the Zacks Consensus Estimate, but an increase from $720.7 million in the same quarter last year [2]. - Over the last four quarters, IBP has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2]. Stock Performance - IBP shares have declined approximately 1.9% since the beginning of the year, contrasting with the S&P 500's gain of 1.3%, indicating underperformance relative to the broader market [3]. - The current Zacks Rank for IBP is 3 (Hold), suggesting that the shares are expected to perform in line with the market in the near future [6]. Earnings Outlook - The consensus EPS estimate for the upcoming quarter is $2.39, with expected revenues of $692.45 million, and for the current fiscal year, the estimate is $11.53 on $3.07 billion in revenues [7]. - The trend of estimate revisions for IBP is mixed, which could change following the recent earnings report [6]. Industry Context - The Building Products - Miscellaneous industry, to which IBP belongs, is currently ranked in the bottom 25% of over 250 Zacks industries, suggesting potential challenges ahead [8].

Financial Performance - Net revenue for Q4 2024 reached a record $750.2 million, an increase of 4.1% from $720.7 million in Q4 2023[8] - For the full year 2024, net revenue was a record $2.9 billion, up 5.9% from $2.8 billion in 2023[13] - Total consolidated net revenue for the twelve months ended December 31, 2024, reached $2,941.3 million, compared to $2,778.6 million in 2023, reflecting a growth of 5.9%[35] - Net income rose 3.1% to $66.9 million, with net income per diluted share increasing 4.4% to $2.39[11] - Net income for the twelve months ended December 31, 2024, was $256.6 million, compared to $243.7 million in 2023, reflecting a 5.9% increase[26] - The net income for the three months ended December 31, 2024, was $66.9 million, compared to $64.9 million in the same period of 2023[57] Revenue Segmentation - Installation revenue increased by 3.8% to $695.0 million, driven by growth across all end markets and contributions from recent acquisitions[5] - Installation segment revenue for Q4 2024 was $695.0 million, up from $669.8 million in Q4 2023, representing an increase of 3.5%[35] - Residential new construction accounted for 71% of installation revenue in both Q4 2024 and Q4 2023, with revenues of $533.3 million and $510.5 million respectively[38] - Other revenue for Q4 2024 was $60.9 million, up from $53.6 million in Q4 2023, representing an increase of 6.1%[35] Profitability Metrics - Adjusted EBITDA for Q4 2024 was $132.0 million, a 2.9% increase from $128.3 million in the prior year quarter, representing an adjusted EBITDA margin of 17.6%[12] - Adjusted EBITDA for the twelve months ended December 31, 2024, was $511.4 million, compared to $485.9 million for the same period in 2023, reflecting an adjusted EBITDA margin of 17.4%[57] - The total adjusted EBITDA margin for the twelve months ended December 31, 2024, was 16.7%, compared to 41.0% in 2023, indicating a decline in profitability[66] - The total adjusted EBITDA for the three months ended December 31, 2024, was $0.8 million, with a margin of 2.7%, down from $15.2 million and a margin of 37.9% in the same period of 2023[66] Expenses and Dividends - Selling and administrative expenses for the twelve months ended December 31, 2024, totaled $564.6 million, compared to $517.1 million in 2023, with an adjusted selling and administrative expense margin of 18.5%[54] - The Board of Directors declared a 6% increase in the regular quarterly cash dividend to $0.37 per share and an annual variable dividend of $1.70 per share[5] - The company declared cash dividends of $3.00 per share for the year 2024, up from $2.22 in 2023, representing a 35.2% increase[26] Acquisitions and Growth Strategy - The company completed nine acquisitions in 2024, contributing over $100 million in annual revenue, with plans for at least $100 million in additional acquisitions in 2025[6] - The company authorized a new stock repurchase program allowing for the repurchase of up to $500 million of outstanding common stock, effective through March 1, 2026[7] Asset Management - Cash and cash equivalents at December 31, 2024, totaled $328 million[5] - Total assets increased to $2,059.9 million as of December 31, 2024, compared to $1,981.3 million in 2023, marking a growth of 4.0%[28] - The company reported a total stockholders' equity of $705.3 million at the end of 2024, up from $670.3 million in 2023, indicating a 5.2% increase[28] - Cash and cash equivalents decreased to $327.6 million at the end of 2024 from $386.5 million at the end of 2023, a decline of 15.2%[28] Operational Challenges - The company recognized intangible and asset impairment charges of $4.9 million during the twelve months ended December 31, 2024, related to winding down a non-core branch[48] - The company expects to complete the closure of the non-core branch by March 31, 2025, which is anticipated to impact future financial results[56] - The company’s performance metrics suggest a need for strategic adjustments to enhance profitability and revenue growth moving forward[67]

Group 1: Acquisition and Revenue Growth - Installed Building Products, Inc. (IBP) has acquired Capital Insulation, LLC and CBS & Mirror, LLC, adding over $12 million in annual revenues and strengthening its position in the Houston market [1] - IBP has completed acquisitions that contributed to an 8% revenue growth in the third quarter, marking a record performance [5] - The company has acquired more than $100 million in annual revenues to date, indicating a strong growth strategy through acquisitions [3] Group 2: Strategic Expansion - The acquisition of Tatum Insulation III, LLC expands IBP's geographic reach and revenue streams, particularly in North Carolina [4] - Acquisitions are central to IBP's capital allocation strategy, enabling geographic expansion and product diversification [6] - IBP anticipates further deals before year-end and has a strong acquisition pipeline for 2025, driven by demand in residential construction [6] Group 3: Market Performance - Shares of IBP declined 1.7% during trading hours but increased 5% in after-hours trading [2] - Over the past year, IBP's shares have gained 9%, compared to the Zacks Building Products – Miscellaneous industry's growth of 21.7% [7]

Core Insights - Installed Building Products, Inc. (IBP) has acquired Tatum Insulation III, LLC, enhancing its geographic reach and revenue streams in North Carolina [1][2] - The acquisition is expected to add over $17 million in annual revenues, aligning with IBP's growth-focused acquisition strategy [2][3] - IBP's strategy emphasizes acquisitions as a primary growth driver, allowing for market expansion and service diversification [3][4] Revenue Growth and Market Expansion - The acquisition of Tatum contributes more than $17 million in annual revenues, significantly boosting IBP's financial performance [2] - IBP has achieved over $90 million in revenues from acquisitions in 2024, indicating a robust growth strategy [2] - The company reported an 8% revenue growth in the third quarter, marking a record performance [4] Strategic Focus on Acquisitions - Acquisitions are central to IBP's capital allocation strategy, facilitating geographic expansion and product diversification [5] - The integration of Tatum's operations is expected to strengthen IBP's competitive position in the Southeastern U.S. market [3] - IBP anticipates further acquisitions before year-end and has a strong pipeline for 2025 [5] Share Price Performance - IBP's shares have increased by 49.1% over the past year, outperforming the Zacks Building Products – Miscellaneous industry's growth of 43.6% [5]

Financial Data and Key Metrics Changes - Consolidated net revenue for Q3 2024 increased 8% to a record $761 million compared to $707 million in Q3 2023 [19] - Adjusted net income rose to $80 million or $2.85 per diluted share [24] - Adjusted EBITDA reached an all-time record of $132 million, reflecting an adjusted EBITDA margin of 17.4% [23] - Adjusted gross margin was 33.8%, down from 34.3% in the prior-year period [21] Business Line Data and Key Metrics Changes - Residential same-branch installation sales increased approximately 5% during Q3 2024 [19] - Multifamily installation sales growth was resilient, with same-branch sales increasing over 2% [11] - Commercial organic sales increased 6%, driven primarily by the heavy commercial business [88] Market Data and Key Metrics Changes - Single-family starts year-to-date through September 2024 increased by 10% [15] - The company noted a favorable long-term demand outlook for installed services across residential and commercial markets [9] Company Strategy and Development Direction - Acquisitions remain a top priority for the company, with over $73 million of annual revenue acquired to date [14] - The company is focused on expanding geographic presence and diversifying the mix of building products installed [13] - The management emphasized the importance of local market expertise to efficiently complete attractive jobs [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term demand for installed services, citing favorable trends in residential and commercial markets [9] - The company remains focused on profitability and effective capital allocation to drive earnings growth [17] - Management acknowledged challenges from recent hurricanes but noted that all employees were safe and operations were being restored [8] Other Important Information - The company repurchased 100,000 shares of common stock for a total cost of $21 million during Q3 2024 [29] - A fourth quarter dividend of $0.35 per share was approved, representing a 6% increase over the prior-year period [29] Q&A Session Summary Question: Can you elaborate on the margin factors and their impacts? - Management noted that production builder growth and non-insulation sales impacted gross margin, with spray foam pricing decline affecting EBITDA by $1 million to $1.5 million [32][34] Question: What is the impact of the election on energy efficiency initiatives? - Management stated they do not bank on significant changes from the election and expect gradual adoption of stricter energy codes [40][41] Question: How do you see the demand outlook by customer type? - Management indicated that production builders are growing faster than regional builders, but both are seeing positive demand despite rate increases [72] Question: What is the expectation for price/mix normalization? - Management expects price/mix to show headwinds due to a shift towards production builders and other products, impacting overall margins [95] Question: How is the company positioned regarding supply constraints? - Management confirmed that supply remains tight but has not led to uncompleted jobs, and internal sourcing is helping manage inventory effectively [91][92]