IBP(US:IBP)2025-05-08 11:34Installed Building Products First Quarter 2025 Results Financial & Operational Highlights 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 attractive3 - The company's business model, which sources products and labor domestically, is not expected to face substantial disruptions from changing import tariffs4 Financial Performance Review 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 expenses13 Capital Allocation and Corporate Developments 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)614 - 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 program7 - 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 share56 Segment and End Market Performance 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 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 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 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 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 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 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 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 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 |