Investors

COLUMBUS, Ohio--(BUSINESS WIRE)--Nov. 7, 2024-- Installed Building Products, Inc. (the "Company" or "IBP") (NYSE: IBP), an industry-leading installer of insulation and complementary building products, today announced results for the third quarter ended September 30, 2024.

Third Quarter 2024 Highlights (Comparisons are to Prior Year Period)

• Net revenue increased 7.7% to an all-time record of $760.6 million
  • Installation revenue increased 7.9% to $713.7 million, as growth across all end markets combined with sales from IBP's recent acquisitions
  • Other revenue, net of eliminations, which includes IBP’s manufacturing and distribution operations, increased to $46.9 million from $45.3 million
• Net income increased 0.9% to a third quarter record of $68.6 million
• Adjusted EBITDA* increased 1.4% to an all-time record of $132.3 million
• Net income per diluted share increased 1.7% to an all-time record of $2.44
• Adjusted net income* increased 1.5% to $80.1 million, or $2.85 per diluted share
• At September 30, 2024, IBP had $406.2 million in cash and cash equivalents
• Repurchased 100,000 shares of common stock at a total cost of $20.7 million
• Declared third quarter dividend of $0.35 per share that was paid to shareholders on September 30, 2024

Recent Developments

• IBP’s Board of Directors declared the fourth quarter regular cash dividend of $0.35 per share
• In October 2024, acquired Insulation Supplies, a specialty distributor focused on insulation and related accessories and machinery sales

“I want to acknowledge the emotional devastation and personal loss many people across the Southeast and Mid-Atlantic regions of the United States experienced as a result of two hurricanes that made landfall in late September and early October,” said Brad Wheeler, Chief Operating Officer. “Our thoughts are with all those affected, particularly in Florida and North Carolina. Several of our branches were affected, but thanks to a total team effort and our Employee Financial Assistance program, we were able to swiftly mobilize resources to restore operations and support our employees when they needed it most.”

“IBP delivered record third-quarter revenue and profitability, with each end market, from residential to commercial, growing organically. Our talented and committed employees across the country focused on what they can control by providing our customers with reliable, high-quality building product installation service. The long-term view on demand for our installed service is unchanged. We believe residential and commercial end market trends are favorable as builders work to meet demand through the increased supply of houses, apartments, and commercial structures,” stated Jeff Edwards, Chairman and Chief Executive Officer.

“Our capital allocation initiatives remain consistent with two additional acquisitions closing in July and October. Year-to-date, we have acquired over $73 million in annual revenue. Based on our current acquisition pipeline, we expect more deals to be completed before year end and although deal timing is hard to predict, our outlook for 2025 is positive. In addition, during the nine-month period ending September 2024, we utilized our strong cash flow generation and healthy balance sheet to repurchase approximately $66 million of our common stock and pay $75 million in dividends,” continued Mr. Edwards.

“As we approach the final month of 2024, we are positioned to close out the year on a favorable note and begin 2025 from a position of strength,” concluded Mr. Edwards.

Acquisition Update

IBP continues to prioritize profitable growth through its proven strategy of acquiring well-run installers of insulation and complementary building products. To date in 2024, IBP has acquired over $73 million of annual revenue.

During the 2024 third quarter and in October 2024, IBP completed the following acquisitions:

• In July 2024, IBP acquired Euroview Enterprises, LLC, Contract Mirror and Supply Co., and CLM Solutions, LLC (collectively “Euroview”), an Illinois-based residential and commercial installer of building products in key construction markets in the Midwest. Euroview has annual revenue of approximately $20 million.
• In October 2024, IBP acquired Wholesale Insulation Supply, Inc. doing business as Insulation Supplies, a specialty distributor focused on supplying fiberglass insulation, spray foam insulation, cellulose insulation, and related accessories and machinery to residential and commercial end markets with annual revenue of over $22 million.

2024 Fourth Quarter Cash Dividend

IBP’s Board of Directors has approved the Company’s quarterly cash dividend of $0.35 per share, payable on December 31, 2024, to stockholders of record on December 15, 2024. The fourth quarter regular cash dividend represents a 6% increase from last year’s fourth quarter cash dividend payment.

Share Repurchases

During the three months ended September 30, 2024, IBP repurchased 100,000 shares of its common stock in a privately negotiated transaction at a total cost of $20.7 million. At September 30, 2024, the Company had approximately $234 million available under its stock repurchase program.

Third Quarter 2024 Results Overview

For the third quarter of 2024, net revenue was $760.6 million, an increase of 7.7% from $706.5 million for the third quarter of 2023. On a consolidated same branch basis, net revenue increased 5.2% from the prior year quarter, supported by growth in our residential and commercial end markets. Residential sales growth within the Company's Installation segment was up 5.0% on a same branch basis in the quarter, both single-family and multi-family same branch sales increased from the prior year quarter. Commercial sales in the Installation segment were up 6.1% from the prior year quarter on a same branch basis.

Gross profit improved 6.1% to $256.8 million from $242.1 million in the prior year quarter. Gross profit and adjusted gross profit* as a percent of net revenue were both 33.8%, compared to 34.3% in the same period last year. Adjusted gross profit primarily adjusts for the Company’s share-based compensation expense.

Selling and administrative expense, as a percent of total revenue, was 19.1% compared to 18.2% in the prior year quarter. Adjusted selling and administrative expense*, as a percent of net revenue, was 18.5% compared to 17.7% in the prior year quarter.

Net income was $68.6 million, or $2.44 per diluted share, compared to $68.0 million, or $2.40 per diluted share in the prior year quarter. Net profit margin for the third quarter was 9.0% compared to 9.6% in the prior year quarter. Adjusted net income* was $80.1 million, or $2.85 per diluted share, compared to $78.9 million, or $2.79 per diluted share in the prior year quarter. Adjusted net profit margin* for the third quarter was 10.5% compared to 11.2% in the prior year quarter. Adjusted net income accounts for the impact of non-core items in both periods, including an addback for non-cash amortization expense related to acquisitions.

EBITDA* was $127.3 million, a 0.4% increase from $126.8 million in the prior year quarter. Adjusted EBITDA* was $132.3 million, a 1.4% increase from $130.5 million in the prior year quarter, representing an adjusted EBITDA margin* of 17.4% and 18.5%, respectively.

Net profit, adjusted net profit, and adjusted EBITDA margin reductions during the quarter were primarily due to a greater proportion of our single-family sales shifting to production builders as well as higher growth in non-insulation product sales relative to a year ago. Additionally, we experienced initial start-up costs related to building out our internal distribution operations and higher insurance expense from the prior year period.

Conference Call and Webcast

The Company will host a conference call and webcast on November 7, 2024 at 10:00 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 7, 2024, by dialing 844-512-2921 (domestic) or 412-317-6671 (international) and entering the passcode 13748499.

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 in all 48 continental states and the District of Columbia from its national network of over 250 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 the commercial market, our operations, industry and economic conditions, our financial and business model, payment of dividends, the demand for our services and product offerings, expansion of our national footprint and end markets, diversification of our products, our ability to grow and strengthen our market position, our ability to pursue and integrate value-enhancing acquisitions and the expected amount of acquired revenue, 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; increases in mortgage interest rates and rising home prices; inflation and interest rates; the material price and supply environment; the timing of increases in our selling prices; the risk that the Company may reduce, suspend or eliminate dividend payments in the future; 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, 2023, as the same may be updated from time to time in our subsequent filings with the Securities and Exchange Commission. In addition, any future declaration of dividends will be subject to the final determination of our Board of Directors. 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 EBITDA, Adjusted EBITDA, Adjusted EBITDA, net of dispositions, Adjusted EBITDA margin (i.e., Adjusted EBITDA divided by net revenue), Adjusted Net Income, Adjusted Net Income, net of dispositions, 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 EBITDA, 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.

During the three months ended June 30, 2024, we decided to wind down the operations of a single new commercial end market-oriented branch that focused on the installation of a non-core end product, due to shifting market conditions, an unfavorable contract settlement, and sub-standard operating performance. All dispositions figures reflect the results of this single branch. All net of dispositions figures reflect the exclusion of the results of this single branch.

Reconciliation of Non-GAAP Financial Measures

EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, Adjusted Gross Profit and Adjusted Selling and Administrative Expense measure performance by adjusting GAAP net income, EBITDA, 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.