Summary of TopBuild 2025 Investor Day Company Overview - **Company**: TopBuild (NYSE: BLD) - **Market Cap**: Increased from $3.8 billion in 2017 to $12.5 billion in 2025, more than doubling in value [15] - **Employees**: Over 15,000 employees and more than 450 branches across the U.S. and Canada [15] Key Themes and Strategies 1. **Best-in-Class Industrial Compounder**: TopBuild positions itself as a leading industrial compounder with a clear strategy for profitable growth, driven by strong free cash flow [8] 2. **Market Expansion**: The company has expanded its total addressable market from approximately $16 billion in 2022 to over $90 billion in 2025, focusing on non-discretionary, non-cyclical revenue streams [19][24] 3. **M&A Competency**: TopBuild has completed 24 acquisitions since 2022, totaling 49 acquisitions in the last eight years, contributing to $1.5 billion in revenue [22][19] 4. **Operational Excellence**: Emphasis on leveraging technology and operational excellence to improve customer experience and drive growth [11][12] Financial Performance - **Sales Growth**: Achieved a compounded annual growth rate of over 16% since 2022, maintaining margins in line with long-term targets [19] - **Revenue Diversification**: Increased non-discretionary revenue from 11% in 2022 to 22% in 2025, enhancing revenue resilience [19] Culture and Talent Management 1. **People-First Culture**: TopBuild emphasizes a people-first approach, focusing on employee engagement, safety, and local empowerment [30][31] 2. **Talent Development**: Programs like Manager in Training and leadership academies are in place to develop future leaders, with an 80% success rate of graduates moving into management roles [38][39] 3. **Employee Engagement**: Recent surveys show 85% of employees are engaged, and 93% understand how their roles contribute to the company's success [44] Community Engagement - **Habitat for Humanity Partnership**: TopBuild has a long-standing partnership with Habitat for Humanity, contributing both material and financial resources to support community housing initiatives [2] Future Outlook - **Commercial Roofing Expansion**: TopBuild is entering the commercial roofing market, which is seen as a natural adjacency to its existing insulation business, with a focus on local relationships and operational excellence [24][26] - **Commitment to Safety**: The company has reduced its safety incident rate from 3.58 in 2017 to 1.95 in 2024, reflecting its commitment to employee safety [50] Conclusion TopBuild is positioned for continued growth through strategic market expansion, operational excellence, and a strong focus on its people and community engagement. The company aims to leverage its proven competencies and culture to drive long-term shareholder value.

Core Insights - Ferguson Enterprises Inc. reported strong financial results, achieving a net sales increase of 5.1% year-over-year, driven by organic revenue growth of 4.2% and acquisition growth of 1.0% [4][11] - The company is optimistic about its performance in calendar year 2025, expecting mid-single digit growth in net sales and maintaining a strong balance sheet while returning capital to shareholders [2][12] - Non-residential revenue grew by 12% during the quarter, significantly outperforming the residential market, which faced challenges [8][7] Financial Performance - For the quarter ended October 31, 2025, net sales reached $8.2 billion, up from $7.8 billion in the same period last year [4][37] - Gross margin improved to 30.7%, a 60 basis point increase from the previous year, while operating profit rose to $771 million, reflecting a 15.9% increase [5][37] - Diluted earnings per share increased by 23.9% to $2.90, compared to $2.34 in the prior year [6][37] Segment Analysis - In the U.S. market, net sales increased by 5.3%, with organic revenue growth of 4.4% and a 0.9% contribution from acquisitions [7][11] - The residential market, which constitutes about half of U.S. revenue, showed a decline of 1%, while non-residential markets saw a 12% increase, supported by large capital project activities [8][7] - In Canada, net sales grew by 2.2%, with organic growth of 0.7% and a 4.6% contribution from acquisitions, although the market remained subdued [10][11] Guidance and Future Outlook - The company updated its guidance for calendar year 2025, projecting mid-single digit growth in net sales and an adjusted operating margin of 9.4% to 9.6% [2][12] - Interest expenses are expected to be between $180 million and $200 million, with capital expenditures projected at approximately $300 million to $350 million [2][12] Capital Management - Ferguson completed share repurchases totaling $208 million during the quarter and has approximately $0.8 billion remaining under its current share repurchase program [12][13] - The company declared a quarterly dividend of $0.89, representing a 7% increase from the previous year, to be paid on February 27, 2026 [13][12] Financial Position - As of October 31, 2025, the net debt to adjusted EBITDA ratio was 1.1x, indicating a strong financial leverage position [12][26] - Total assets were reported at $17.7 billion, with total liabilities of $11.6 billion, resulting in stockholders' equity of $6.1 billion [38][37]

Financial Data and Key Metrics Changes - Consolidated second quarter sales were $1.7 billion, down 3% from 2024 [7] - Net income was $62 million or $1.64 per share, compared to $112.3 million or $2.84 per share in the prior year quarter [7] - Included in the results were a $7.7 million pre-tax gain on asset sales [7] Business Line Data and Key Metrics Changes - Wood Products sales were $447.2 million, down 9% year-over-year, with segment EBITDA at $37.3 million compared to $95.1 million in the prior year [10] - Building Materials Distribution (BMD) sales were $1.6 billion, down 2% from the previous year, with segment EBITDA of $91.8 million compared to $97.1 million [10] - BMD's gross margin was 15.4%, a 60 basis point year-over-year improvement despite increased selling and distribution expenses [11] Market Data and Key Metrics Changes - U.S. housing starts and single-family housing starts decreased by 18% compared to the prior year quarter [7] - Plywood sales volume was 356 million feet, down from 383 million feet in the second quarter of 2024 [13] - Average plywood net sales price was $342 per 1,000 feet, down 6% year-over-year [13] Company Strategy and Development Direction - The company is focused on addressing near-term challenges while maintaining service standards and investing in sustainable growth opportunities [9] - The modernization project at the Oakdale Mill is substantially complete, enhancing operational efficiency and reliability [8] - The company aims to solidify and expand its market-leading national distribution presence [16] Management's Comments on Operating Environment and Future Outlook - Management expects headwinds for residential construction activity to persist, with a range of potential EBITDA outcomes for the third quarter [19] - Long-term demand drivers for residential construction remain robust, supported by structural and generational factors [22][23] - The company anticipates consumer confidence to improve with lower interest rates and greater clarity on U.S. economic policy [23] Other Important Information - Capital expenditures for the first half of 2025 were $132 million, with a commitment to a capital spending range of $220 million to $240 million for the year [15] - The company paid $18 million in regular dividends and repurchased approximately $96 million of common stock in 2025 [18] Q&A Session Summary Question: Performance gap between LVL and I-joist volumes - Management noted that LVL has better resiliency due to diverse application opportunities, while I-joist is more limited [27] Question: EWP destocking and its impact - Management indicated that purchase profiles are changing, with less mill directs and more activity in distribution [47] Question: Operating rates and EWP pricing outlook - Operating rates were in the low 80s for EWP, with expectations of a decline to 65-70% depending on demand [49] Question: Update on the strike at the Billings facility - The strike involves 19 employees at one BMD location, with no anticipated material impact on operations [51][52] Question: General line business performance - General line categories performed well, with expectations to remain strong due to customer reliance on distribution inventories [58]

Financial Data and Key Metrics Changes - Consolidated second quarter sales were $1.7 billion, down 3% from 2024 [6] - Net income was $62 million or $1.64 per share, compared to $112.3 million or $2.84 per share in the prior year quarter [6] - Included in the results were a $7.7 million pre-tax gain on asset sales [6] Business Line Data and Key Metrics Changes - Wood Products sales were $447.2 million, down 9% year-over-year, with segment EBITDA of $37.3 million compared to $95.1 million in the prior year [9] - Building Material Distribution (BMD) sales were $1.6 billion, down 2% year-over-year, with segment EBITDA of $91.8 million compared to $97.1 million in the prior year [11] - LVL volumes increased by 818% year-over-year, while I-joist volumes decreased by 5% [12] Market Data and Key Metrics Changes - U.S. housing starts and single-family housing starts decreased by 18% compared to the prior year quarter [6] - Plywood sales volume was 356 million feet, down from 383 million feet in the prior year quarter [13] - BMD's gross margin was 15.4%, a 60 basis point year-over-year improvement [11] Company Strategy and Development Direction - The company is focused on addressing near-term challenges while maintaining service standards [8] - Investments are being made to drive sustainable growth, supported by strong structural demand drivers in residential construction [8] - The modernization project at the Oakdale Mill is substantially complete, enhancing operational efficiency [7] Management's Comments on Operating Environment and Future Outlook - Management expects headwinds for residential construction activity to persist [19] - Anticipated third quarter EBITDA for Wood Products is estimated between $20 million and $30 million [19] - Long-term demand drivers for residential construction remain robust, supported by demographic trends [23] Other Important Information - Capital expenditures for the first half of 2025 were $132 million, with a capital spending range for 2025 unchanged at $220 million to $240 million [15] - The company paid $18 million in regular dividends and repurchased approximately $96 million of common stock in 2025 [17] Q&A Session Summary Question: What has driven the performance gap between LVL and I-joist volumes? - Management noted that LVL has better resiliency due to diverse application opportunities, while I-joist is more limited [27] Question: How do you see EWP pricing going forward? - Management indicated that operating rates were in the low 80s for EWP, with expectations of a potential decline in rates depending on demand [52] Question: Can you provide an update on the strike at the Billings facility? - The strike involves 19 employees and is limited to one of the 38 BMD locations, with no anticipated material impact [55]

Core Viewpoint - TopBuild Corp. has successfully extended and increased its senior secured credit facilities to $2.25 billion, enhancing its liquidity and financial flexibility to support its capital allocation strategy [1][2]. Group 1: Financial Details - The new credit facilities consist of a $1.0 billion term loan, a $1.0 billion revolving credit facility, and a $250.0 million delayed draw term loan, all maturing in May 2030 [1]. - The amended credit facilities will incur interest at the Secured Overnight Financing Rate (SOFR) plus 1.25% per annum, subject to adjustments based on a leverage-based pricing grid [2]. Group 2: Company Overview - TopBuild Corp. is a leading installer and specialty distributor of insulation and building material products in the construction industry across the United States and Canada [3]. - The company operates more than 200 branches for insulation installation services and over 150 branches for its Specialty Distribution business, which includes building and mechanical insulation and related products [3].