8-K
false 0001580905 0001580905 2019-11-01 2019-11-01

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

November 1, 2019

Date of Report (Date of earliest event reported)

 

Installed Building Products, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware

 

001-36307

 

45-3707650

(State or other jurisdiction of

incorporation)

 

(Commission

File No.)

 

(IRS Employer

Identification No.)

495 South High Street, Suite 50

Columbus, Ohio 43215

(Address of principal executive offices, zip code)

(614) 221-3399

(Registrant’s telephone number, including area code)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions (see General Instructions A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange

on which registered

Common stock

 

IBP

 

New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

 

 


Item 2.02 Results of Operations and Financial Condition.

On November 1, 2019, Installed Building Products, Inc. (the “Company”) issued a press release reporting the financial results for the three and nine months ended September 30, 2019. The full text of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

The information contained in this Item 2.02, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. Furthermore, the information contained in this Item 2.02, including Exhibit 99.1 attached hereto, shall not be deemed to be incorporated by reference into any registration statement or other document filed with the Securities and Exchange Commission, except as shall be expressly set forth by specific reference in such filing.

Item 7.01 Regulation FD Disclosure.

One or more representatives of the Company will meet with certain current and prospective investors during the fourth quarter of 2019. The materials used in connection with these meetings have been posted on the Company’s website (www.installeduildingproducts.com) under the Investor Relations section.

The information contained in this Item 7.01 is being furnished and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. Furthermore, the information contained in this Item 7.01 shall not be deemed to be incorporated by reference into any registration statement or other document filed with the Securities and Exchange Commission, except as shall be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit
Number

   

Description

         
 

99.1

   

Press Release, dated November 1, 2019, announcing results for the three and nine months ended September 30, 2019.

         
 

104

   

Cover Page Interactive Data File (formatted in Inline XBRL)


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

INSTALLED BUILDING PRODUCTS, INC.

             

Date: November 1, 2019

 

 

By:

 

/s/ Michael T. Miller

 

 

 

Executive Vice President and

 

 

 

Chief Financial Officer

EX-99.1

Exhibit 99.1

 

LOGO

INSTALLED BUILDING PRODUCTS REPORTS

RECORD THIRD QUARTER 2019 RESULTS

Columbus, Ohio, November 1, 2019. Installed Building Products, Inc. (the “Company” or “IBP”) (NYSE:IBP), an industry-leading installer of insulation and complementary building products, announced today results for the third quarter ended September 30, 2019.

Third Quarter 2019 Highlights (Comparisons are to Prior Year Period)

 

   

Net revenue increased 13.6% to a record $396.4 million

 

   

Revenue from residential non-insulation products increased 14.3%

 

   

Alpha’s large commercial construction revenue increased 19.4%

 

   

Net income increased 36.3% to a record $21.2 million

 

   

Adjusted EBITDA* increased 27.8% to a record $55.9 million

 

   

Net income per diluted share increased 42.0% to a record $0.71

 

   

Adjusted net income per diluted share* increased 37.5% to a record $0.99

 

   

In September 2019, completed an offering of $300 million Senior Notes and entered into a new and increased $200 million ABL Revolving Credit Facility

 

   

In September 2019, acquired Northeast Spray Insulation, an insulation installer serving the Maine and New Hampshire markets with annual revenue of approximately $3.6 million

 

   

In September 2019, acquired Minnesota Spray-Foam, an insulation installer serving the Minnesota market with annual revenue of approximately $1.6 million

 

   

In August 2019, acquired Therm-Con, LLC and Foamtech, Inc., a fireplace, shower doors, closet shelving, and mirror installer serving the Tennessee, Georgia and Alabama markets with annual revenue of approximately $4.7 million

“Favorable pricing trends, stable end-market demand, and the benefits of our geographic and product diversification strategies drove record third quarter sales and earnings,” stated Jeff Edwards, Chairman and Chief Executive Officer. “Our third quarter results demonstrate the power of our financial model and our focus on profitability. I am pleased to report that for the 2019 third quarter IBP generated record quarterly net income of $21.2 million, a 36% increase from the 2018 third quarter, and record adjusted EBITDA* of $55.9 million, a nearly 28% increase from the 2018 third quarter.”

“During the quarter, we strengthened our balance sheet with a $300 million Senior Notes offering. The pricing and structure of our Senior Notes provides us with significant capital to continually invest in our business throughout the housing cycle, while staggering our debt maturities. At September 30, 2019, IBP had $239.9 million of cash, cash equivalents, and short-term investments and nothing drawn on our $200 million ABL Revolving Credit Facility. Our strong capital position, combined with our compelling operating cash flow, provides us with the financial flexibility to support our growth strategies and pursue acquisitions that continue to expand our geography and diversify our end-products and end-markets.”

“Industry trends remain positive and net revenue increased 13.6% year-over-year as a result of stable demand in our single-family markets and double-digit growth in our multi-family and commercial end-markets. In addition, as a result of our product diversification strategy, revenue from complimentary products, not including Alpha’s large commercial construction revenue, increased 14.3% and was accretive to third quarter gross margin. I am extremely encouraged by the positive business and market trends underway and we believe we are well-positioned for continued robust sales and earnings growth,” concluded Mr. Edwards.

 

1


Third Quarter 2019 Results Overview

For the third quarter of 2019, net revenue was $396.4 million, an increase of 13.6% from $349.0 million in the third quarter of 2018. On a same branch basis, net revenue improved 9.3% from the prior year quarter. Residential same branch sales growth was 6.0% in the quarter, attributable to price gains and more favorable customer and product mix. Same branch single-family sales grew 4.9% during the third quarter, compared to growth in U.S. single-family housing completions of 3.8%, while our large commercial construction end market had organic growth of 19.4%.

Gross profit improved 21.3% to $118.1 million from $97.3 million in the prior year quarter. Adjusted gross profit* as a percent of total revenue was 29.8%, compared to 27.9% for the same period last year.

Selling and administrative expense, as a percentage of net revenue, was flat to prior year at 18.8%. Adjusted selling and administrative expense*, as a percentage of net revenue, was 18.2% compared to 17.7% for the same quarter last year.

Net income was $21.2 million, or $0.71 per diluted share, compared to $15.6 million, or $0.50 per diluted share in the prior year quarter. Adjusted net income* was $29.7 million, or $0.99 per diluted share, compared to $22.4 million, or $0.72 per diluted share in the prior year quarter. Adjusted net income adjusts for the impact of non-core items in both periods and includes an addback for non-cash amortization expense related to acquisitions.

Adjusted EBITDA* was $55.9 million, a 27.8% increase from $43.8 million in the prior year quarter, largely due to higher sales and improved gross profit. Adjusted EBITDA, as a percentage of net revenue, was 14.1%, compared to 12.5% in the prior year quarter.

Conference Call and Webcast

The Company will host a conference call and webcast on November 1, 2019 at 9:00 a.m. Eastern Time to discuss these results. To participate in the call, please dial 877-407-0792 (domestic) or 201-689-8263 (international). The live webcast will be available at www.installedbuildingproducts.com in the investor relations section. A replay of the conference call will be available through December 1, 2019, by dialing 844-512-2921 (domestic) or 412-317-6671 (international) and entering the passcode 13695760.

About Installed Building Products

Installed Building Products, Inc. is one of the nation’s largest new residential insulation installers and is a diversified installer of complementary building products, including waterproofing, fire-stopping, fireproofing, garage doors, rain gutters, window blinds, shower doors, closet shelving and mirrors and other products for residential and commercial builders located in the continental United States. The Company manages all aspects of the installation process for its customers, from direct purchase and receipt of materials from national manufacturers to its timely supply of materials to job sites and quality installation. The Company offers its portfolio of services for new and existing single-family and multi-family residential and commercial building projects from its national network of over 175 branch locations.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws, including with respect to the housing market and industry conditions, our financial and business model, our efforts to navigate the material pricing environment, our ability to increase selling prices, the demand for our services and product offerings, expansion of our national footprint and end markets, diversification of our products, our ability to capitalize on the new home and commercial construction recovery, our ability to

 

2


grow and strengthen our market position, our ability to pursue and integrate value-enhancing acquisitions, our ability to improve sales and profitability, and expectations for demand for our services and our earnings. Forward-looking statements may generally be identified by the use of words such as “anticipate,” “believe,” “expect,” “intends,” “plan,” and “will” or, in each case, their negative, or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Any forward-looking statements that we make herein and in any future reports and statements are not guarantees of future performance, and actual results may differ materially from those expressed in or suggested by such forward-looking statements as a result of various factors, including, without limitation, general economic and industry conditions, the material price environment, the timing of increases in our selling prices, and the factors discussed in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, as the same may be updated from time to time in our subsequent filings with the Securities and Exchange Commission. Any forward-looking statement made by the Company in this press release speaks only as of the date hereof. New risks and uncertainties arise from time to time, and it is impossible for the Company to predict these events or how they may affect it. The Company has no obligation, and does not intend, to update any forward-looking statements after the date hereof, except as required by federal securities laws.

*Use of Non-GAAP Financial Measures

In addition to the financial measures prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), this press release contains the non-GAAP financial measures of Adjusted EBITDA, Adjusted EBITDA margin (i.e., Adjusted EBITDA divided by net revenue), Adjusted Net Income, Adjusted Net Income per diluted share, Adjusted Gross Profit and Adjusted Selling and Administrative expense. The reasons for the use of these measures, reconciliations of Adjusted EBITDA, Adjusted Net Income, Adjusted Net Income per diluted share, Adjusted Gross Profit, and Adjusted Selling and Administrative expense to the most directly comparable GAAP measures and other information relating to these measures are included below following the unaudited condensed consolidated financial statements. Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for IBP’s financial results prepared in accordance with GAAP.

 

3


INSTALLED BUILDING PRODUCTS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(unaudited, in thousands, except share and per share amounts)

 

     Three months ended September 30,      Nine months ended September 30,  
     2019     2018      2019     2018  

Net revenue

   $ 396,449     $ 348,999      $ 1,110,398     $ 983,311  

Cost of sales

     278,362       251,665        795,616       710,358  
  

 

 

   

 

 

    

 

 

   

 

 

 

Gross profit

     118,087       97,334        314,782       272,953  

Operating expenses

         

Selling

     19,398       17,434        54,431       49,300  

Administrative

     55,098       48,337        156,022       137,511  

Amortization

     6,156       5,228        18,065       19,678  
  

 

 

   

 

 

    

 

 

   

 

 

 

Operating income

     37,435       26,335        86,264       66,464  

Other expense

         

Interest expense, net

     8,458       5,282        19,783       15,013  

Other

     155       132        381       417  
  

 

 

   

 

 

    

 

 

   

 

 

 

Income before income taxes

     28,822       20,921        66,100       51,034  

Income tax provision

     7,610       5,358        17,135       12,762  
  

 

 

   

 

 

    

 

 

   

 

 

 

Net income

   $ 21,212     $ 15,563      $ 48,965     $ 38,272  
  

 

 

   

 

 

    

 

 

   

 

 

 

Other comprehensive (loss) income, net of tax:

         

Unrealized (loss) gain on cash flow hedge, net of tax benefit (provision) of $575 and ($278) for the three months ended September 30, 2019 and 2018, respectively, and $2,676 and ($822) for the nine months ended September 30, 2019 and 2018, respectively

     (1,726     818        (8,021     2,453  
  

 

 

   

 

 

    

 

 

   

 

 

 

Comprehensive income

   $ 19,486     $ 16,381      $ 40,944     $ 40,725  
  

 

 

   

 

 

    

 

 

   

 

 

 

Basic net income per share

   $ 0.71     $ 0.50      $ 1.65     $ 1.22  
  

 

 

   

 

 

    

 

 

   

 

 

 

Diluted net income per share

   $ 0.71     $ 0.50      $ 1.64     $ 1.21  
  

 

 

   

 

 

    

 

 

   

 

 

 

Weighted average shares outstanding:

         

Basic

     29,785,548       31,229,086        29,741,555       31,373,871  

Diluted

     29,877,056       31,312,756        29,839,873       31,512,104  

 

4


INSTALLED BUILDING PRODUCTS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited, in thousands, except share and per share amounts)

 

     September 30,     December 31,  
     2019     2018  

ASSETS

    

Current assets

    

Cash and cash equivalents

   $ 234,950     $ 90,442  

Investments

     4,980       10,060  

Accounts receivable (less allowance for doubtful accounts of $6,712 and $5,085 at September 30, 2019 and December 31, 2018, respectively)

     242,065       214,121  

Inventories

     63,547       61,162  

Other current assets

     32,955       35,760  
  

 

 

   

 

 

 

Total current assets

     578,497       411,545  

Property and equipment, net

     102,148       90,117  

Operating lease right-of-use assets

     42,553       —    

Goodwill

     184,574       173,049  

Intangibles, net

     144,321       149,790  

Other non-current assets

     11,589       10,157  
  

 

 

   

 

 

 

Total assets

   $ 1,063,682     $ 834,658  
  

 

 

   

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

    

Current liabilities

    

Current maturities of long-term debt

   $ 22,734     $ 22,642  

Current maturities of operating lease obligations

     15,032       —    

Current maturities of finance lease obligations

     3,133       4,806  

Accounts payable

     100,181       96,949  

Accrued compensation

     32,793       27,923  

Other current liabilities

     41,576       29,366  
  

 

 

   

 

 

 

Total current liabilities

     215,449       181,686  

Long-term debt

     542,510       432,182  

Operating lease obligations

     27,129       —    

Finance lease obligations

     3,682       3,824  

Deferred income taxes

     3,833       6,695  

Other long-term liabilities

     43,565       27,773  
  

 

 

   

 

 

 

Total liabilities

     836,168       652,160  

Commitments and contingencies

    

Stockholders’ equity

    

Preferred Stock; $0.01 par value: 5,000,000 authorized and 0 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively

     —         —    

Common stock; $0.01 par value: 100,000,000 authorized, 32,871,504 and 32,723,972 issued and 30,016,749 and 29,915,611 shares outstanding at September 30, 2019 and December 31, 2018, respectively

     329       327  

Additional paid in capital

     188,216       181,815  

Retained earnings

     154,177       105,212  

Treasury stock; at cost: 2,854,755 and 2,808,361 shares at September 30, 2019 and December 31, 2018, respectively

     (106,756     (104,425

Accumulated other comprehensive loss

     (8,452     (431
  

 

 

   

 

 

 

Total stockholders’ equity

     227,514       182,498  
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 1,063,682     $ 834,658  
  

 

 

   

 

 

 

 

5


INSTALLED BUILDING PRODUCTS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)

 

     Nine months ended September 30,  
     2019     2018  

Cash flows from operating activities

    

Net income

   $ 48,965     $ 38,272  

Adjustments to reconcile net income to net cash provided by operating activities

    

Depreciation and amortization of property and equipment

     28,575       24,567  

Amortization of operating lease right-of-use assets

     11,597       —    

Amortization of intangibles

     18,065       19,678  

Amortization of deferred financing costs and debt discount

     845       883  

Provision for doubtful accounts

     3,173       2,219  

Write-off of debt issuance costs

     2,774       1,164  

Gain on sale of property and equipment

     (69     (551

Noncash stock compensation

     6,442       6,089  

Changes in assets and liabilities, excluding effects of acquisitions

    

Accounts receivable

     (29,144     (35,953

Inventories

     (852     (6,799

Other assets

     (4,845     (801

Accounts payable

     2,535       7,523  

Income taxes receivable / payable

     13,487       10,542  

Other liabilities

     4,969       2,016  
  

 

 

   

 

 

 

Net cash provided by operating activities

     106,517       68,849  
  

 

 

   

 

 

 

Cash flows from investing activities

    

Purchases of investments

     (17,352     (22,818

Maturities of short term investments

     22,560       37,500  

Purchases of property and equipment

     (37,267     (27,051

Acquisitions of businesses

     (24,740     (34,682

Proceeds from sale of property and equipment

     563       1,106  

Other

     (1,795     (1,590
  

 

 

   

 

 

 

Net cash used in investing activities

     (58,031     (47,535
  

 

 

   

 

 

 

Cash flows from financing activities

    

Proceeds from senior notes

     300,000       —    

Proceeds from term loan

     —         100,000  

Payments on term loan

     (195,750     (750

Proceeds from vehicle and equipment notes payable

     23,767       20,657  

Debt issuance costs

     (5,191     (1,992

Principal payments on long-term debt

     (15,278     (10,324

Principal payments on finance lease obligations

     (3,398     (4,316

Acquisition-related obligations

     (5,797     (2,901

Repurchase of common stock

     —         (42,827

Surrender of common stock awards by employees

     (2,331     (2,282
  

 

 

   

 

 

 

Net cash provided by financing activities

     96,022       55,265  
  

 

 

   

 

 

 

Net change in cash and cash equivalents

     144,508       76,579  

Cash and cash equivalents at beginning of period

     90,442       62,510  
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 234,950     $ 139,089  
  

 

 

   

 

 

 

Supplemental disclosures of cash flow information

    

Net cash paid during the period for:

    

Interest

   $ 17,746     $ 14,110  

Income taxes, net of refunds

     3,790       1,902  

Supplemental disclosure of noncash activities

    

Right-of-use assets obtained in exchange for operating lease obligations

     11,593       —    

Termination of operating lease obligations and right-of-use assets

     (2,814     —    

Property and equipment obtained in exchange for finance lease obligations

     2,175       1,034  

Seller obligations in connection with acquisition of businesses

     4,322       5,420  

Unpaid purchases of property and equipment included in accounts payable

     1,527       615  

 

6


Non-GAAP Financial Measures

Reconciliation of Non-GAAP Financial Measures

Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, Adjusted Gross Profit and Adjusted Selling and Administrative Expense measure performance by adjusting EBITDA, GAAP net income, gross profit and selling and administrative expense, respectively, for certain income or expense items that are not considered part of our core operations. We believe that the presentation of these measures provides useful information to investors regarding our results of operations because it assists both investors and us in analyzing and benchmarking the performance and value of our business.

We believe the Adjusted EBITDA measure is useful to investors and us as a measure of comparative operating performance from period to period as it measures our changes in pricing decisions, cost controls and other factors that impact operating performance, and removes the effect of our capital structure (primarily interest expense), asset base (primarily depreciation and amortization), items outside our control (primarily income taxes) and the volatility related to the timing and extent of other activities such as asset impairments and non-core income and expenses. Accordingly, we believe that this measure is useful for comparing general operating performance from period to period. In addition, we use various EBITDA-based measures in determining the achievement of awards under certain of our incentive compensation programs. Other companies may define Adjusted EBITDA differently and, as a result, our measure may not be directly comparable to measures of other companies. In addition, Adjusted EBITDA may be defined differently for purposes of covenants contained in our revolving credit facility or any future facility.

Although we use the Adjusted EBITDA measure to assess the performance of our business, the use of the measure is limited because it does not include certain material expenses, such as interest and taxes, necessary to operate our business. Adjusted EBITDA should be considered in addition to, and not as a substitute for, GAAP net income as a measure of performance. Our presentation of this measure should not be construed as an indication that our future results will be unaffected by unusual or non-recurring items. This measure has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Because of these limitations, this measure is not intended as an alternative to net income as an indicator of our operating performance, as an alternative to any other measure of performance in conformity with GAAP or as an alternative to cash flow provided by operating activities as a measure of liquidity. You should therefore not place undue reliance on this measure or ratios calculated using this measure.

We also believe the Adjusted Net Income measure is useful to investors and us as a measure of comparative operating performance from period to period as it measures our changes in pricing decisions, cost controls and other factors that impact operating performance, and removes the effect of certain non-core items such as discontinued operations, acquisition related expenses, amortization expense, the tax impact of these certain non-core items, and the volatility related to the timing and extent of other activities such as asset impairments and non-core income and expenses. To make the financial presentation more consistent with other public building products companies, beginning in the fourth quarter 2016 we included an addback for non-cash amortization expense related to acquisitions. Accordingly, we believe that this measure is useful for comparing general operating performance from period to period. Other companies may define Adjusted Net Income differently and, as a result, our measure may not be directly comparable to measures of other companies. In addition, Adjusted Net Income may be defined differently for purposes of covenants contained in our revolving credit facility or any future facility.

 

7


INSTALLED BUILDING PRODUCTS, INC.

RECONCILIATION OF GAAP TO NON-GAAP MEASURES

ADJUSTED NET INCOME CALCULATIONS

(unaudited, in thousands, except share and per share amounts)

The table below reconciles Adjusted Net Income to the most directly comparable GAAP financial measure, net income, for the periods presented therein.

Per share figures may reflect rounding adjustments and consequently totals may not appear to sum.

 

     Three months ended September 30,      Nine months ended September 30,  
     2019      2018      2019      2018  

Net income, as reported

   $ 21,212      $ 15,563      $ 48,965      $ 38,272  

Adjustments for adjusted net income:

           

Writeoff of capitalized loan costs

     2,774        50        2,774        1,164  

Share based compensation expense

     2,099        1,894        6,441        6,089  

Acquisition related expenses

     303        674        1,497        1,874  

Financial Wellness Program 1

     —          —          —          604  

Branch start-up costs 2

     129        166        746        628  

Retirement expense

     —          824        —          824  

Legal settlement

     —          790        —          790  

Gain on sale of assets

     —          (364      —          (364

Amortization expense 3

     6,156        5,228        18,065        19,678  

Tax impact of adjusted items at normalized tax rate 4

     (2,980      (2,408      (7,676      (8,135
  

 

 

    

 

 

    

 

 

    

 

 

 

Adjusted net income

   $ 29,693      $ 22,417      $ 70,812      $ 61,424  
  

 

 

    

 

 

    

 

 

    

 

 

 

Weighted average shares outstanding (diluted)

     29,877,056        31,312,756        29,839,873        31,512,104  

Diluted net income per share, as reported

   $ 0.71      $ 0.50      $ 1.64      $ 1.21  

Adjustments for adjusted net income, net of tax impact, per diluted share 5

     0.28        0.22        0.73        0.74  
  

 

 

    

 

 

    

 

 

    

 

 

 

Diluted adjusted net income per share

   $ 0.99      $ 0.72      $ 2.37      $ 1.95  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

1

Employer match upon completion of the program, net of waived executive bonuses

2

Addback of costs related to organic branch expansion for Alpha locations

3

Addback of all non-cash amortization resulting from business combinations

4

Normalized effective tax rate of 26% applied to both periods represented

5 

Includes adjustments related to the items noted above, net of tax

 

8


INSTALLED BUILDING PRODUCTS, INC.

RECONCILIATION OF GAAP TO NON-GAAP MEASURES

ADJUSTED GROSS PROFIT CALCULATIONS

(unaudited, in thousands)

 

     Three months ended September 30,     Nine months ended September 30,  
     2019     2018     2019     2018  

Gross profit

   $ 118,087     $ 97,334     $ 314,782     $ 272,953  

Share based compensation expense

     97       94       280       749  

Financial Wellness Program 1

     —         —         —         711  

Branch start-up costs 2

     129       166       746       628  

Gain on sale of assets

     —         (364     —         (364
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted gross profit

   $ 118,313     $ 97,230     $ 315,808     $ 274,677  
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted gross profit - % Total Revenue

     29.8     27.9     28.4     27.9

 

1 

Employer match upon completion of the program, partially offset by waived executive bonuses (see below Adjusted Selling & Administrative)

2 

Addback of costs related to organic branch expansion for Alpha locations

INSTALLED BUILDING PRODUCTS, INC.

RECONCILIATION OF GAAP TO NON-GAAP MEASURES

ADJUSTED SELLING AND ADMINISTRATIVE EXPENSE CALCULATIONS

(unaudited, in thousands)

 

     Three months ended September 30,     Nine months ended September 30,  
     2019     2018     2019     2018  

Selling expense

   $ 19,398     $ 17,434     $ 54,431     $ 49,300  

Administrative expense

     55,098       48,337       156,022       137,511  
  

 

 

   

 

 

   

 

 

   

 

 

 

Selling and Administrative

   $ 74,496     $ 65,771     $ 210,453     $ 186,811  
  

 

 

   

 

 

   

 

 

   

 

 

 

Share based compensation expense

     2,002       1,800       6,161       5,340  

Acquisition related expenses

     303       674       1,497       1,874  

Financial Wellness Program 1

     —         —         —         (107

Retirement expense

     —         824       —         824  

Legal settlement

     —         790       —         790  
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted Selling and Administrative

   $ 72,191     $ 61,683     $ 202,795     $ 178,090  
  

 

 

   

 

 

   

 

 

   

 

 

 

Adj. Selling and Administrative - % Total Revenue

     18.2     17.7     18.3     18.1

 

1 

Employer match upon completion of the program, net of waived executive bonuses

 

9


The table below reconciles Adjusted EBITDA to the most directly comparable GAAP financial measure, net income, for the periods presented therein.

RECONCILIATION OF GAAP TO NON-GAAP MEASURES

ADJUSTED EBITDA CALCULATIONS

(unaudited, in thousands)

 

     Three months ended September 30,     Nine months ended September 30,  
     2019     2018     2019     2018  

Adjusted EBITDA:

        

Net income (GAAP)

   $ 21,212     $ 15,563     $ 48,965     $ 38,272  

Interest expense

     8,458       5,282       19,783       15,013  

Provision for income taxes

     7,610       5,358       17,135       12,762  

Depreciation and amortization

     16,117       13,563       46,640       44,245  
  

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA

     53,397       39,766       132,523       110,292  
  

 

 

   

 

 

   

 

 

   

 

 

 

Acquisition related expenses

     303       674       1,497       1,874  

Share based compensation expense

     2,099       1,894       6,441       6,089  

Financial Wellness Program

     —         —         —         604  

Branch start-up costs

     129       166       746       628  

Retirement expense

     —         824       —         824  

Legal settlement

     —         790       —         790  

Gain on sale of assets

     —         (364     —         (364
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 55,928     $ 43,750     $ 141,207     $ 120,737  
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA margin

     14.1     12.5     12.7     12.3

INSTALLED BUILDING PRODUCTS, INC.

SUPPLEMENTARY TABLE

(unaudited)

 

 

 

 

     Three months ended September 30,     Nine months ended September 30,  
     2019     2018     2019     2018  

Period-over-period Growth

        

Sales Growth

     13.6     18.2     12.9     18.0

Same Branch Sales Growth

     9.3     12.2     8.2     11.6

Single-Family Sales Growth

     10.3     19.5     11.3     21.2

Single-Family Same Branch Sales Growth

     4.9     12.9     5.3     13.4

Residential Sales Growth

     10.7     17.4     11.2     18.5

Residential Same Branch Sales Growth

     6.0     11.3     6.0     11.6

U.S. Housing Market1

        

Total Completions Growth

     2.2     5.4     2.8     6.7

Single-Family Completions Growth

     3.8     10.2     4.9     9.0

Same Branch Sales Growth 2

        

Volume Growth

     2.9     7.6     2.3     7.2

Price/Mix Growth

     5.4     4.2     5.1     4.5

Alpha Sales Growth

     19.4     15.8     15.7     11.0

 

1 

U.S. Census Bureau data, as revised

2 

Same branch volume and price/mix growth excludes Alpha sales growth

 

10


INSTALLED BUILDING PRODUCTS, INC.

INCREMENTAL REVENUE AND ADJUSTED EBITDA MARGINS

(unaudited, in thousands)

 

     Three months ended September 30,     Nine months ended September 30,  
     2019      % Total     2018      % Total     2019      % Total     2018      % Total  

Revenue Increase

                    

Same Branch

   $ 32,570        68.6   $ 36,011        66.9   $ 80,753        63.5   $ 96,694        64.4

Acquired

     14,880        31.4     17,794        33.1     46,333        36.5     53,559        35.6
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total

   $ 47,450        100.0   $ 53,806        100.0   $ 127,087        100.0   $ 150,253        100.0
            Adj EBITDA            Adj EBITDA            Adj EBITDA            Adj EBITDA  
            Contribution            Contribution            Contribution            Contribution  

Adjusted EBITDA

                    

Same Branch

   $ 9,589        29.4   $ 2,668        7.4   $ 14,037        17.4   $ 10,279        10.6

Acquired

     2,589        17.4     1,751        9.8     6,433        13.9     5,608        10.5
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total

   $ 12,178        25.7   $ 4,419        8.2   $ 20,470        16.1   $ 15,887        10.6

Source: Installed Building Products, Inc.

Contact Information:

Investor Relations:

614-221-9944

investorrelations@installed.net

 

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