Investors

COLUMBUS, Ohio--(BUSINESS WIRE)-- 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 second quarter ended June 30, 2017.

Second Quarter 2017 Highlights

• Net revenue increased 33.2% to a record $282.2 million
• Net income increased 19.8% to a record $12.0 million
• Adjusted EBITDA* increased 49.6% to a record $39.2 million
• Net income per diluted share increased 18.8% to $0.38
• Adjusted net income per diluted share* increased 47.5% to a record $0.59
• In April 2017, refinanced borrowings and closed a $300 million Term Loan B facility and $100 million ABL Revolving Credit facility
• In April 2017, acquired Minnesota based Horizon Electric Company with 2016 revenues of $1.2 million
• In May 2017, acquired Florida based Legacy, & Glass & Supply, Inc., with 2016 revenues of $5.4 million
• In June 2017, acquired South Carolina based Columbia Shelving and Mirror Inc. and Charleston Shelving & Mirror Inc. with 2016 revenues of $11.0 million

Recent Developments

• In July 2017, acquired Kentucky based Energy Savers, LLC with 2016 revenues of $2.0 million

"As expected, the 2017 second quarter benefitted from normal seasonal installation trends, which helped drive sequential improvements in sales and profitability," stated Jeff Edwards, Chairman and Chief Executive Officer. "During the 2017 second quarter, IBP's residential same branch sales increased 14.2%, while multifamily same branch sales grew 59.4%, compared to U.S. housing completions growth of 11.6%. Reflecting IBP's focus on profitability, I am encouraged by the significant improvement in same branch incremental margins IBP achieved in the second quarter, driven by a 70-basis point improvement in gross margin, and IBP's ability to leverage SG&A expenses."

"IBP is well positioned to capitalize on the continued strength of the U.S. housing market. In addition, Alpha Insulation and Waterproofing has had a favorable impact on IBP's sales and profitability and, as a result commercial revenues represented 17% of revenues in the second quarter, compared to 12% for the same period last year. Heading into the second half of 2017, IBP's pipeline of acquisitions remains strong and we expect to close several acquisitions in the coming quarters. As momentum in our business remains strong, we continue to expect 2017 will be another year of record sales and earnings."

Second Quarter 2017 Results Overview

For the second quarter of 2017, net revenue was $282.2 million, an increase of 33.2% from $211.9 million in the second quarter of 2016. On a same branch basis, net revenue improved 11.6% from the prior year quarter, with approximately 75.0% of the increase attributable to growth in the number of completed jobs and the remainder achieved through price gains and more favorable customer and product mix.

Gross profit improved 36.4% to $84.9 million from $62.2 million in the prior year quarter. Gross margin expanded to 30.1% from 29.4% in the prior year quarter, primarily due to higher revenue and a more profitable mix of business. Selling, general and administrative expense, as a percentage of net revenue, improved to 19.6% compared to 20.2% in the prior year quarter.

Net income was $12.0 million, or $0.38 per diluted share, compared to $10.0 million, or $0.32 per diluted share in the prior year quarter. Adjusted net income was $18.7 million, or $0.59 per diluted share, compared to $12.5 million, or $0.40 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 $39.2 million, a 49.6% increase from $26.2 million in the prior year quarter, largely due to higher gross profit and improved leverage in SG&A. Adjusted EBITDA, as a percentage of net revenue, grew 150 basis points to 13.9%, compared to 12.4% in the prior year quarter.

Conference Call and Webcast

The Company will host a conference call and webcast on Friday, August 4, 2017 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 September 4, 2017, by dialing 844-512-2921 (domestic) or 412-317-6671 (international) and entering the passcode 13667137.

About Installed Building Products

Installed Building Products, Inc. is one of the nation's largest insulation installers for the residential new construction market and is also a diversified installer of complementary building products, including waterproofing, fire-stopping and fireproofing, garage doors, rain gutters, shower doors, closet shelving and mirrors, throughout the United States. The Company manages all aspects of the installation process for its customers, including direct purchases of materials from national manufacturers, 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 branch locations.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws, including with respect to our financial model and seasonality, demand for our services, expansion of our national footprint, our ability to capitalize on the new home construction recovery, our ability to strengthen our market position, our ability to pursue, close and integrate value-enhancing acquisitions, the impact of Alpha on our revenue and profitability, our ability to improve sales and profitability, and expectations for demand for our services and our earnings for the remainder of 2017. 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, the factors discussed in the "Risk Factors" section of the Company's Annual Report on Form 10-K for the year ended December 31, 2016, 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 and Adjusted Net Income per diluted share. The reasons for the use of these measures of Adjusted EBITDA and Adjusted Net Income, reconciliations of Adjusted EBITDA, Adjusted Net Income and Adjusted Net Income per diluted share 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.

INSTALLED BUILDING PRODUCTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(unaudited, in thousands, except share and per share amounts)
				Three months ended June 30,							Six months ended June 30,
				2017					2016		2017				2016
Net revenue				$	282,196			$	211,913		$	537,865			$	403,611
Cost of sales					197,268				149,670			380,765				286,777
		Gross profit			84,928				62,243			157,100				116,834
Operating expenses
	Selling				13,650				11,960			27,676				23,211
	Administrative				41,761				30,890			81,022				61,173
	Amortization				6,550				2,810			12,966				5,289
		Operating income			22,967				16,583			35,436				27,161
Other expense
	Interest expense				4,865				1,509			7,035				3,061
	Other				131				121			283				225
		Income before income taxes			17,971				14,953			28,118				23,875
Income tax provision					5,998				4,960			9,781				8,069
Net income				$	11,973			$	9,993		$	18,337			$	15,806
Other comprehensive loss, net of tax:
	Unrealized loss on cash flow hedge, net of tax benefit of $50 for the three and six months ended June 30, 2017				(77	)			-			(77	)			-
Comprehensive income					11,896				9,993			18,260				15,806
Basic net income per share				$	0.38			$	0.32		$	0.58			$	0.51
Diluted net income per share				$	0.38			$	0.32		$	0.58			$	0.50
Weighted average shares outstanding:
	Basic				31,646,460				31,317,632			31,618,624				31,279,935
	Diluted				31,709,554				31,347,067			31,698,460				31,339,019

INSTALLED BUILDING PRODUCTS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands, except share and per share amounts)
							June 30,					December 31,
							2017					2016
ASSETS
Current assets
	Cash and cash equivalents						$	66,690				$	14,482
	Investments							25,293					-
	Accounts receivable (less allowance for doubtful accounts of $4,745 and $3,397 at June 30, 2017 and December 31, 2016, respectively)							176,769					128,466
	Inventories							43,198					40,229
	Other current assets							16,027					9,214
					Total current assets			327,977					192,391
Property and equipment, net								73,971					67,788
Non-current assets
	Goodwill							148,031					107,086
	Intangibles, net							139,426					86,317
	Other non-current assets							10,021					8,513
					Total non-current assets			297,478					201,916
					Total assets		$	699,426				$	462,095
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
	Current maturities of long-term debt						$	13,506				$	17,192
	Current maturities of capital lease obligations							6,204					6,929
	Accounts payable							76,103					67,921
	Accrued compensation							23,083					18,212
	Other current liabilities							24,866					19,851
					Total current liabilities			143,762					130,105
Long-term debt								326,968					134,235
Capital lease obligations, less current maturities								7,715					8,364
Deferred income taxes								13,796					14,239
Other long-term liabilities								22,069					21,175
					Total liabilities			514,310					308,118
Commitments and contingencies
Stockholders' equity
	Preferred Stock; $0.01 par value: 5,000,000 authorized and 0 shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively							-					-
	Common Stock; $0.01 par value: 100,000,000 authorized, 32,524,934 and 32,135,176 issued and 31,862,945 and 31,484,774 shares outstanding at June 30, 2017 and December 31, 2016, respectively							325					321
	Additional paid in capital							172,006					158,581
	Retained earnings							25,631					7,294
	Treasury Stock; at cost: 661,989 and 650,402 shares at June 30, 2017 and December 31, 2016, respectively							(12,769	)				(12,219	)
	Accumulated other comprehensive loss							(77	)				-
					Total stockholders' equity			185,116					153,977
					Total liabilities and stockholders' equity		$	699,426				$	462,095

INSTALLED BUILDING PRODUCTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
									Six months ended June 30,
									2017				2016
Cash flows from operating activities
Net income									$	18,337			$	15,806
Adjustments to reconcile net income to net cash
	provided by operating activities
		Depreciation and amortization of property and equipment								13,482				11,281
		Amortization of intangibles								12,966				5,289
		Amortization of deferred financing costs and debt discount								424				179
		Provision for doubtful accounts								1,807				1,181
		Write-off of debt issuance costs								1,201				286
		Gain on sale of property and equipment								(190	)			(173	)
		Noncash stock compensation								2,570				1,171
		Deferred income taxes								-				708
		Changes in assets and liabilities, excluding effects of acquisitions
			Accounts receivable							(17,421	)			(9,742	)
			Inventories							342				(3,310	)
			Other assets							(1,263	)			2,442
			Accounts payable							(2,043	)			6,632
			Income taxes payable/receivable							(4,102	)			(873	)
			Other liabilities							2,316				5,283
					Net cash provided by operating activities					28,426				36,160
Cash flows from investing activities
	Purchases of investments									(25,328	)			-
	Purchases of property and equipment									(14,681	)			(13,424	)
	Acquisitions of businesses, net of cash acquired of $247 and $0, respectively									(116,883	)			(29,948	)
	Proceeds from sale of property and equipment									451				384
	Other									(1,532	)			-
					Net cash used in investing activities					(157,973	)			(42,988	)
Cash flows from financing activities
	Proceeds from revolving line of credit under credit agreement applicable to respective period									-				37,975
	Payments on revolving line of credit under credit agreement applicable to respective period									-				(37,975	)
	Proceeds from term loan under credit agreement applicable to respective period									300,000				100,000
	Payments on term loan under credit agreement applicable to respective period									(96,250	)			(49,375	)
	Proceeds from delayed draw term loan under credit agreement applicable to respective period									112,500				12,500
	Payments on delayed draw term loan under credit agreement applicable to respective period									(125,000	)			(50,000	)
	Proceeds from vehicle and equipment notes payable									9,317				11,039
	Debt issuance costs									(7,940	)			(1,238	)
	Principal payments on long term debt									(4,915	)			(2,591	)
	Principal payments on capital lease obligations									(3,738	)			(4,556	)
	Acquisition-related obligations									(1,669	)			(1,191	)
	Surrender of common stock awards by employees									(550	)			(836	)
					Net cash provided by financing activities					181,755				13,752
Net change in cash										52,208				6,924
Cash at beginning of period										14,482				6,818
Cash at end of period									$	66,690			$	13,742
Supplemental disclosures of cash flow information
	Net cash paid during the period for:
		Interest							$	5,634			$	2,537
		Income taxes, net of refunds								13,401				8,355
Supplemental disclosure of noncash investing and financing activities
	Common stock issued for acquisition of business									10,859				-
	Vehicles capitalized under capital leases and related lease obligations									2,519				2,033
	Seller obligations in connection with acquisition of businesses									3,025				2,430
	Unpaid purchases of property and equipment included in accounts payable									658				-

Non-GAAP Financial Measures

Adjusted EBITDA, Adjusted EBITDA margin and Adjusted Net Income measure performance by adjusting EBITDA and GAAP net income, 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 (loss) 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 (loss) 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 (used in) 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.

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 June 30,								Six months ended June 30,
		2017				2016				2017				2016
Net income, as reported		$	11,973			$	9,993			$	18,337			$	15,806
Adjustments for adjusted net income:
Write-off of capitalized loan costs			1,201				-				1,201				286
Share based compensation expense			2,091				635				2,570				1,171
Acquisition related expenses			794				460				1,347				823
Amortization expense 1			6,550				2,810				12,966				5,289
Tax impact of adjusted items at normalized tax rate 2			(3,935	)			(1,445	)			(6,691	)			(2,801	)
Adjusted net income		$	18,674			$	12,453			$	29,730			$	20,574
Weighted average shares outstanding (diluted)			31,709,554				31,347,067				31,698,460				31,339,019
Diluted net income per share, as reported		$	0.38			$	0.32			$	0.58			$	0.50
Adjustments for adjusted net income, net of tax impact, per diluted share 3			0.21			$	0.08				0.36				0.16
Diluted adjusted net income per share		$	0.59			$	0.40			$	0.94			$	0.66

1 Addback of all non-cash amortization resulting from business combinations

2 Normalized tax rate of 37.0% applied to each period in 2017 and 2016

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

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 June 30,								Six months ended June 30,
							2017				2016				2017				2016
Adjusted EBITDA:
	Net income (GAAP)						$	11,973			$	9,993			$	18,337			$	15,806
			Interest expense					4,865				1,509				7,035				3,061
			Provision for income taxes					5,998				4,960				9,781				8,069
			Depreciation and amortization					13,481				8,648				26,448				16,569
	EBITDA							36,317				25,110				61,601				43,505
			Acquisition related expenses					794				460				1,347				823
			Share based compensation expense					2,091				635				2,570				1,171
	Adjusted EBITDA						$	39,202			$	26,205			$	65,518			$	45,499
	Adjusted EBITDA margin							13.9	%			12.4	%			12.2	%			11.3	%

INSTALLED BUILDING PRODUCTS, INC.
SUPPLEMENTARY TABLE
(unaudited)
		Three months ended June 30,				Six months ended June 30,
		2017		2016		2017		2016
Period-over-period Growth
Sales Growth		33.2%		32.7%		33.3%		39.3%
Same Branch Sales Growth		11.6%		16.9%		10.2%		21.0%
Single-Family Sales Growth		19.4%		28.1%		17.0%		36.8%
Single-Family Same Branch Sales Growth		9.8%		13.2%		7.2%		19.7%
Residential Sales Growth		28.1%		31.4%		25.9%		38.9%
Residential Same Branch Sales Growth		14.2%		16.3%		11.2%		20.9%
U.S. Housing Market1
Total Completions Growth		11.6%		3.6%		11.0%		10.8%
Single-Family Completions Growth		8.0%		11.3%		9.3%		13.6%
Same Branch Sales Growth
Volume Growth		8.7%		10.5%		6.8%		12.0%
Price/Mix Growth		2.8%		6.4%		3.4%		9.0%

1U.S. Census Bureau data, as revised

INSTALLED BUILDING PRODUCTS, INC.
COMPONENTS OF INCREASE IN REVENUE AND ADJUSTED EBITDA
(unaudited, in thousands)
		Three months ended June 30,										Six months ended June 30,
		2017			% Total		2016			% Total		2017			% Total		2016			% Total
Revenue Increase
Same Branch		$	24,510		34.9%		$	27,012		51.7%		$	41,193		30.7%		$	60,961		53.5%
Acquired			45,774		65.1%			25,208		48.3%			93,062		69.3%			53,009		46.5%
Total		$	70,283		100.0%		$	52,220		100.0%		$	134,254		100.0%		$	113,970		100.0%
					Adj EBITDA					Adj EBITDA					Adj EBITDA					Adj EBITDA
					Contribution					Contribution					Contribution					Contribution
Adjusted EBITDA
Same Branch		$	6,202		25.3%		$	5,993		22.2%		$	6,398		15.5%		$	14,611		24.0%
Acquired			6,795		14.8%			2,543		10.1%			13,623		14.6%			5,647		10.7%
Total		$	12,997		18.5%		$	8,536		16.3%		$	20,021		14.9%		$	20,258		17.8%

View source version on businesswire.com: http://www.businesswire.com/news/home/20170804005108/en/

Installed Building Products, Inc.
Investor Relations, 614-221-9944
investorrelations@installed.net

Source: Installed Building Products, Inc.

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