Feb 27, 2020

Installed Building Products Reports Record Results for Fourth Quarter and Fiscal Year 2019

Annual Revenue Increased 13.1% to a Record $1.5 Billion
Annual Diluted EPS Increased 30.3% to a Record $2.28 per share
Cash Flow from Operations Increased 27.4% to a Record $123.1 Million
Completed Eight Acquisitions Representing Approximately $64 Million of Annual Revenues

COLUMBUS, Ohio--(BUSINESS WIRE)--Feb. 27, 2020-- Installed Building Products, Inc. (the "Company" or "IBP") (NYSE:IBP), an industry-leading installer of insulation and complementary building products, today announced record results for the fourth quarter and fiscal year ended December 31, 2019.

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

  • Net revenue increased 13.6% to a quarterly record of $401.2 million
  • Large commercial construction revenue increased 10.2%
  • Net income increased 16.5% to a record $19.2 million
  • Adjusted EBITDA* increased 27.5% to a fourth quarter record of $55.6 million
  • Net income per diluted share increased 18.5% to $0.64
  • Adjusted net income per diluted share* increased 27.8% to $0.92
  • In November 2019, acquired Premier Building Supply, LLC., a residential insulation and garage door installer in Utah with annual revenues of $23.0 million
  • In December 2019, acquired Gulf Coast Insulation, a spray foam and fiberglass insulation installer in Florida with annual revenues of $4.7 million
  • In December 2019, the Installed Building Products Foundation announced that the organization exceeded its goal of donating $1 million during the year to nonprofits and individuals
  • In December 2019, the company completed the repricing of its existing $200 million Term Loan B facility

“IBP achieved another strong year of record revenue and earnings,” stated Jeff Edwards, Chairman and Chief Executive Officer. “As expected, 2019 benefited from a pricing environment more in line with historical trends compared to the pricing landscape in 2018, and positive overall market dynamics. In addition, our geographic, end market, and product diversification strategies continue to strengthen our results. Revenue from commercial customers was 18.2% of total revenue in 2019, compared to 16.5% in 2018, while non-insulation revenue was 35.8% of total revenue compared to 34.4% in the prior year. In addition, 2019 was another strong year for acquisition growth as we completed eight acquisitions, representing $64 million of annual revenue during the year.”

“Our record results reflect the ongoing dedication of our more than 8,000 employees across the U.S. Our commitment to our employees through our financial wellness program, longevity stock program, and various community engagement programs continue to have a positive impact on employee retention rates as evidenced by our improved employee turnover in 2019 which remains well below the industry average.”

“As we look to the new year, the housing market remains healthy, the pricing environment continues to follow historic trends, and we expect to continue to benefit from our national platform, profit focused business model, and the increasing diversification of our business. I am extremely proud of the financial and operating accomplishments we achieved in 2019 and remain excited by the continued opportunities IBP has to grow and create even greater value for our shareholders,” concluded Mr. Edwards.

Fourth Quarter 2019 Results Overview

For the fourth quarter of 2019, net revenue was $401.2 million, an increase of 13.6% from $353.1 million in the fourth quarter of 2018. On a same branch basis, net revenue improved 9.7% from the prior year quarter. Residential same branch sales growth was 5.5% in the quarter, attributable to price gains and more favorable customer and product mix, compared to total completions growth of 16.5%. Our large commercial construction end-market had organic growth of 10.2%.

Gross profit improved 21.7% to $120.0 million from $98.6 million in the prior year quarter. Adjusted gross profit* as a percent of total revenue was 29.9%, compared to 27.9% for the same period last year. Selling and administrative expense, as a percent of net revenue, was 19.6% compared to 18.7% in the prior year quarter. Adjusted selling and administrative expense*, as a percent of net revenue, was 18.6% compared to 18.0% in the prior year quarter.

Net income was $19.2 million, or $0.64 per diluted share, compared to $16.5 million, or $0.54 per diluted share, in the prior year quarter. Adjusted net income* was $27.6 million, or $0.92 per diluted share, compared to $21.8 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 $55.6 million, a 27.5% increase from $43.6 million in the prior year quarter, largely due to higher sales and improved gross profit. Adjusted EBITDA, as a percent of net revenue, was 13.9% compared to 12.4% in the prior year quarter.

Full Year 2019 Results Overview

For the year ended December 31, 2019, net revenue was $1,511.6 million, an increase of 13.1% from $1,336.4 million in 2018. On a same branch basis, net revenue improved 8.6% from the prior year, primarily due to price gains and more favorable customer and product mix, as well as growth in the number of completed jobs. Same branch residential revenue increased 5.9% as compared to a 6.0% increase in total U.S. housing completions.

Gross profit improved 17.0% to $434.8 million from $371.6 million in the prior year. Gross margin was 28.8% compared to 27.8% in the prior year. Adjusted gross profit* as a percent of total revenue was 28.8%, compared to 27.9% for the same period last year. Selling and administrative expense, as a percentage of net revenue, was 19.1% compared to 18.9% in the prior year. Adjusted selling and administrative expense, as a percentage of net revenue was 18.4% compared to 18.1% in the prior year.

Net income was $68.2 million, or $2.28 per diluted share, compared to $54.7 million, or $1.75 per diluted share in the prior year. Adjusted net income was $98.3 million, or $3.29 per diluted share, compared to $83.5 million, or $2.67 per diluted share in the prior year.

For the full year of 2019, adjusted EBITDA* was $196.8 million, a 19.7% increase from $164.4 million in the prior year. Adjusted EBITDA, as a percentage of net revenue, was 13.0%, compared to 12.3% in the prior year. Operating income was $121.2 million, a 30.0% increase from $93.2 million in the prior year. The incremental adjusted EBITDA margin* on same branch revenue growth was 21.0% (please refer to the Supplementary Tables at the end of this Press Release).

Net cash from operating activities was $123.1 million, an increase of 27.4% from $96.6 million in the prior year.

Stock Repurchase Program

The Company currently has approximately $60 million of remaining availability under our stock repurchase program. Our Board of Directors has approved an extension of the current program, which had been scheduled to expire on February 28, 2020, and now will remain in effect until March 1, 2021, unless extended by the Board of Directors. The Company did not make any repurchases under the program in 2019.

Under the repurchase program, the Company may purchase shares of its common stock through open market transactions, accelerated share repurchase transactions, privately negotiated transactions, block purchases or otherwise in accordance with applicable federal securities laws, including Rule 10b-18 of the Securities Exchange Act of 1934, as amended and pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended. The timing and amount of any repurchases under this program will be determined by the Company’s management at its discretion based on a variety of factors, including the market price of our common stock, corporate considerations, general market and economic conditions, and legal requirements. The program may be modified, discontinued or suspended at any time or from time to time. The Company anticipates funding for this program to come from available corporate funds, including cash on hand and future cash flow.

Conference Call and Webcast

The Company will host a conference call and webcast on February 27, 2020 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 March 27, 2020, by dialing 844-512-2921 (domestic) or 412-317-6671 (international) and entering the passcode 13698575.

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 180 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 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.

INSTALLED BUILDING PRODUCTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(unaudited, in thousands, except share and per share amounts)
 

Three months ended December 31,

 

Twelve months ended December 31,

2019

 

2018

 

2019

 

2018

Net revenue

$

401,231

$

353,121

 

$

1,511,629

 

$

1,336,432

 

Cost of sales

 

281,193

 

254,484

 

 

1,076,809

 

 

964,841

 

Gross profit

 

120,038

 

98,637

 

 

434,820

 

 

371,591

 

Operating expenses
Selling

 

20,585

 

17,805

 

 

75,016

 

 

67,105

 

Administrative

 

58,112

 

48,340

 

 

214,134

 

 

185,850

 

Amortization

 

6,445

 

5,740

 

 

24,510

 

 

25,419

 

Operating income

 

34,896

 

26,752

 

 

121,160

 

 

93,217

 

Other expense
Interest expense, net

 

8,321

 

5,483

 

 

28,104

 

 

20,496

 

Other

 

70

 

118

 

 

451

 

 

535

 

Income before income taxes

 

26,505

 

21,151

 

 

92,605

 

 

72,186

 

Income tax provision

 

7,311

 

4,676

 

 

24,446

 

 

17,438

 

Net income

$

19,194

$

16,475

 

$

68,159

 

$

54,748

 

Other comprehensive (loss) income, net of tax:
Unrealized gain (loss) on cash flow hedge, net of tax (provision) benefit of ($451) and $1,106 for the three months ended December 31, 2019 and 2018, respectively, and $2,225 and $284 for the twelve months ended December 31, 2019 and 2018, respectively

 

1,309

 

(3,503

)

 

(6,712

)

 

(1,050

)

Comprehensive income

$

20,503

$

12,972

 

$

61,447

 

$

53,698

 

Basic net income per share

$

0.64

$

0.54

 

$

2.29

 

$

1.76

 

Diluted net income per share

$

0.64

$

0.54

 

$

2.28

 

$

1.75

 

Weighted average shares outstanding:
Basic

 

29,785,548

 

30,321,803

 

 

29,752,644

 

 

31,107,231

 

Diluted

 

29,972,444

 

30,396,412

 

 

29,873,106

 

 

31,229,558

 

INSTALLED BUILDING PRODUCTS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands, except share and per share amounts)
 

December 31,

 

December 31,

2019

 

2018

ASSETS
Current assets
Cash and cash equivalents

$

177,889

 

$

90,442

 

Investments

 

37,961

 

 

10,060

 

Accounts receivable (less allowance for doubtful accounts of $6,878 and $5,085 at December 31, 2019 and 2018, respectively)

 

244,519

 

 

214,121

 

Inventories

 

74,606

 

 

61,162

 

Other current assets

 

46,974

 

 

35,760

 

Total current assets

 

581,949

 

 

411,545

 

Property and equipment, net

 

106,410

 

 

90,117

 

Operating lease right-of-use assets

 

45,691

 

 

-

 

Goodwill

 

195,652

 

 

173,049

 

Intangibles, net

 

153,562

 

 

149,790

 

Other non-current assets

 

16,215

 

 

10,157

 

Total assets

$

1,099,479

 

$

834,658

 

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt

$

24,164

 

$

22,642

 

Current maturities of operating lease obligations

 

15,459

 

 

-

 

Current maturities of finance lease obligations

 

2,747

 

 

4,806

 

Accounts payable

 

98,871

 

 

96,949

 

Accrued compensation

 

33,636

 

 

27,923

 

Other current liabilities

 

39,272

 

 

29,366

 

Total current liabilities

 

214,149

 

 

181,686

 

Long-term debt

 

545,031

 

 

432,182

 

Operating lease obligations

 

29,785

 

 

-

 

Finance lease obligations

 

3,597

 

 

3,824

 

Deferred income taxes

 

9,175

 

 

6,695

 

Other long-term liabilities

 

47,711

 

 

27,773

 

Total liabilities

 

849,448

 

 

652,160

 

Commitments and contingencies
Stockholders' equity
Preferred Stock; $0.01 par value: 5,000,000 authorized and 0 shares issued and outstanding at December 31, 2019 and 2018, respectively

 

-

 

 

-

 

Common stock; $0.01 par value: 100,000,000 authorized, 32,871,504 and 32,723,972 issued and 30,016,340 and 29,915,611 shares outstanding at December 31, 2019 and 2018, respectively

 

329

 

 

327

 

Additional paid in capital

 

190,230

 

 

181,815

 

Retained earnings

 

173,371

 

 

105,212

 

Treasury stock; at cost: 2,855,164 and 2,808,361 shares at December 31, 2019 and 2018, respectively

 

(106,756

)

 

(104,425

)

Accumulated other comprehensive loss

 

(7,143

)

 

(431

)

Total stockholders' equity

 

250,031

 

 

182,498

 

Total liabilities and stockholders' equity

$

1,099,479

 

$

834,658

 

INSTALLED BUILDING PRODUCTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
 

Twelve months ended December 31,

2019

 

2018

Cash flows from operating activities
Net income

$

68,159

 

$

54,748

 

Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization of property and equipment

 

38,862

 

 

33,306

 

Amortization of operating lease right-of-use assets

 

15,691

 

 

-

 

Amortization of intangibles

 

24,510

 

 

25,419

 

Amortization of deferred financing costs and debt discount

 

1,184

 

 

1,164

 

Provision for doubtful accounts

 

4,312

 

 

2,630

 

Write-off of debt issuance costs

 

3,725

 

 

1,164

 

Gain on sale of property and equipment

 

(140

)

 

(1,098

)

Noncash stock compensation

 

8,727

 

 

7,839

 

Deferred income taxes

 

5,341

 

 

470

 

Changes in assets and liabilities, excluding effects of acquisitions
Accounts receivable

 

(29,582

)

 

(30,166

)

Inventories

 

(10,597

)

 

(15,717

)

Other assets

 

(16,959

)

 

(4,552

)

Accounts payable

 

947

 

 

8,146

 

Income taxes receivable / payable

 

(3,944

)

 

10,273

 

Other liabilities

 

12,831

 

 

3,007

 

Net cash provided by operating activities

 

123,067

 

 

96,633

 

Cash flows from investing activities
Purchases of investments

 

(52,795

)

 

(22,818

)

Maturities of short term investments

 

25,061

 

 

42,782

 

Purchases of property and equipment

 

(50,167

)

 

(35,232

)

Acquisitions of businesses, net of cash acquired of $334 and $0, respectively

 

(51,706

)

 

(57,740

)

Proceeds from sale of property and equipment

 

761

 

 

1,958

 

Other

 

(2,887

)

 

(3,019

)

Net cash used in investing activities

 

(131,733

)

 

(74,069

)

Cash flows from financing activities
Proceeds from senior notes

 

300,000

 

 

-

 

Proceeds from term loan

 

-

 

 

100,000

 

Payments on term loan

 

(195,750

)

 

(2,750

)

Proceeds from vehicle and equipment notes payable

 

33,090

 

 

25,443

 

Debt issuance costs

 

(6,691

)

 

(1,992

)

Principal payments on long-term debt

 

(21,316

)

 

(14,130

)

Principal payments on finance lease obligations

 

(4,157

)

 

(5,604

)

Acquisition-related obligations

 

(6,732

)

 

(3,954

)

Repurchase of common stock

 

-

 

 

(89,363

)

Surrender of common stock awards by employees

 

(2,331

)

 

(2,282

)

Net cash provided by financing activities

 

96,113

 

 

5,368

 

Net change in cash and cash equivalents

 

87,447

 

 

27,932

 

Cash and cash equivalents at beginning of period

 

90,442

 

 

62,510

 

Cash and cash equivalents at end of period

$

177,889

 

$

90,442

 

Supplemental disclosures of cash flow information
Net cash paid during the period for:
Interest

$

20,943

 

$

20,075

 

Income taxes, net of refunds

 

22,633

 

 

4,950

 

Supplemental disclosure of noncash activities
Right-of-use assets obtained in exchange for operating lease obligations

 

18,907

 

 

-

 

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

 

(2,946

)

 

-

 

Property and equipment obtained in exchange for finance lease obligations

 

2,809

 

 

2,208

 

Seller obligations in connection with acquisition of businesses

 

7,543

 

 

7,540

 

Unpaid purchases of property and equipment included in accounts payable

 

1,903

 

 

1,773

 

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.

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 December 31,

 

Twelve months ended December 31,

2019

 

2018

 

2019

 

2018

 
Net income, as reported

$

19,194

 

$

16,475

 

$

68,159

 

$

54,748

 

Adjustments for adjusted net income:
Write-off of capitalized loan costs

 

951

 

 

-

 

 

3,725

 

 

1,164

 

Share based compensation expense

 

2,286

 

 

1,756

 

 

8,727

 

 

7,846

 

Acquisition related expenses

 

560

 

 

800

 

 

2,058

 

 

2,674

 

Financial Wellness Program 1

 

-

 

 

-

 

 

-

 

 

604

 

Branch start-up costs 2

 

-

 

 

214

 

 

746

 

 

843

 

Retirement expense

 

-

 

 

-

 

 

-

 

 

824

 

Legal settlement

 

1,200

 

 

200

 

 

1,200

 

 

990

 

Gain on sale of assets

 

-

 

 

(466

)

 

-

 

 

(831

)

Amortization expense 3

 

6,445

 

 

5,740

 

 

24,510

 

 

25,419

 

Tax impact of adjusted items at normalized tax rate 4

 

(3,021

)

 

(2,086

)

 

(10,815

)

 

(10,002

)

2017 Tax Cuts and Jobs Act - Release of deferred tax liability 5

 

-

 

 

(810

)

 

-

 

 

(810

)

Adjusted net income

$

27,615

 

$

21,823

 

$

98,310

 

$

83,469

 

Weighted average shares outstanding (diluted)

 

29,972,444

 

 

30,396,412

 

 

29,873,106

 

 

31,229,558

 

Diluted net income per share, as reported

$

0.64

 

$

0.54

 

$

2.28

 

$

1.75

 

Adjustments for adjusted net income, net of tax impact, per diluted share 6

 

0.28

 

 

0.18

 

 

1.01

 

 

0.92

 

Diluted adjusted net income per share

$

0.92

 

$

0.72

 

$

3.29

 

$

2.67

 

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 26.4% applied to 2019 period and 25.3% applied to 2018
5 Tax impacts on deferred tax and uncertain tax positions recorded as a result of the 2017 Tax Cuts and Jobs Act
6 Includes adjustments related to the items noted above, net of tax
INSTALLED BUILDING PRODUCTS, INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
ADJUSTED GROSS PROFIT CALCULATIONS
(unaudited, in thousands)
 

Three months ended December 31,

 

Twelve months ended December 31,

2019

 

2018

 

2019

 

2018

 
Gross profit

$

120,038

 

$

98,637

 

$

434,820

 

$

371,591

 

Share based compensation expense

 

94

 

 

96

 

 

374

 

 

846

 

Financial Wellness Program 1

 

-

 

 

-

 

 

-

 

 

711

 

Branch start-up costs 2

 

-

 

 

214

 

 

746

 

 

843

 

Gain on sale of assets

 

-

 

 

(466

)

 

-

 

 

(831

)

Adjusted gross profit

$

120,132

 

$

98,481

 

$

435,940

 

$

373,160

 

Adjusted gross profit - % Total Revenue

 

29.9

%

 

27.9

%

 

28.8

%

 

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 December 31,

 

Twelve months ended December 31,

2019

 

2018

 

2019

 

2018

 
Selling expense

$

20,585

 

$

17,805

 

$

75,016

 

$

67,105

 

Administrative expense

 

58,112

 

 

48,340

 

 

214,134

 

 

185,850

 

Selling and Administrative

$

78,697

 

$

66,145

 

$

289,150

 

$

252,955

 

Share based compensation expense

 

2,192

 

 

1,660

 

 

8,353

 

 

7,000

 

Acquisition related expenses

 

560

 

 

800

 

 

2,058

 

 

2,674

 

Financial Wellness Program 1

 

-

 

 

-

 

 

-

 

 

(107

)

Retirement expense

 

-

 

 

-

 

 

-

 

 

824

 

Legal settlement

 

1,200

 

 

200

 

 

1,200

 

 

990

 

Adjusted Selling and Administrative

$

74,745

 

$

63,485

 

$

277,539

 

$

241,574

 

Adj. Selling and Administrative - % Total Revenue

 

18.6

%

 

18.0

%

 

18.4

%

 

18.1

%

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

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

INSTALLED BUILDING PRODUCTS, INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
ADJUSTED EBITDA CALCULATIONS
(unaudited, in thousands)
 

Three months ended December 31,

 

Twelve months ended December 31,

2019

 

2018

 

2019

 

2018

Adjusted EBITDA:
Net income (GAAP)

$

19,194

 

$

16,475

 

$

68,159

 

$

54,748

 

Interest expense

 

8,321

 

 

5,483

 

 

28,104

 

 

20,496

 

Provision for income taxes

 

7,311

 

 

4,676

 

 

24,446

 

 

17,438

 

Depreciation and amortization

 

16,732

 

 

14,480

 

 

63,372

 

 

58,725

 

EBITDA

 

51,558

 

 

41,114

 

 

184,081

 

 

151,407

 

Acquisition related expenses

 

560

 

 

800

 

 

2,058

 

 

2,674

 

Share based compensation expense

 

2,286

 

 

1,756

 

 

8,727

 

 

7,846

 

Financial Wellness Program

 

-

 

 

-

 

 

-

 

 

604

 

Branch start-up costs

 

-

 

 

214

 

 

746

 

 

843

 

Retirement expense

 

-

 

 

-

 

 

-

 

 

824

 

Legal settlement

 

1,200

 

 

200

 

 

1,200

 

 

990

 

Gain on sale of assets

 

-

 

 

(466

)

 

-

 

 

(831

)

Adjusted EBITDA

$

55,604

 

$

43,618

 

$

196,812

 

$

164,357

 

Adjusted EBITDA margin

 

13.9

%

 

12.4

%

 

13.0

%

 

12.3

%

INSTALLED BUILDING PRODUCTS, INC.
SUPPLEMENTARY TABLE
(unaudited)
 

Three months ended December 31,

 

Twelve months ended December 31,

2019

 

2018

 

2019

 

2018

Period-over-period Growth
Sales Growth

13.6

%

17.8

%

13.1

%

18.0

%

Same Branch Sales Growth

9.7

%

11.1

%

8.6

%

11.5

%

 
Single-Family Sales Growth

8.5

%

16.6

%

10.5

%

20.0

%

Single-Family Same Branch Sales Growth

3.5

%

8.6

%

4.8

%

12.1

%

 
Residential Sales Growth

10.0

%

18.1

%

10.9

%

18.4

%

Residential Same Branch Sales Growth

5.5

%

10.9

%

5.9

%

11.4

%

 
Same Branch Sales Growth
Volume Growth1

3.3

%

3.1

%

2.6

%

6.1

%

Price/Mix Growth1

6.3

%

7.8

%

5.4

%

5.4

%

Large Commercial Construction Sales Growth

10.2

%

13.0

%

14.3

%

11.5

%

 
U.S. Housing Market2
Total Completions Growth

16.5

%

-7.5

%

6.0

%

2.8

%

Single-Family Completions Growth

14.9

%

-2.9

%

7.6

%

5.6

%

1 Excludes the large commercial end market
2U.S. Census Bureau data, as revised
INSTALLED BUILDING PRODUCTS, INC.
INCREMENTAL REVENUE AND ADJUSTED EBITDA MARGINS
(unaudited, in thousands)
 

Three months ended December 31,

 

Twelve months ended December 31,

2019

 

% Total

 

2018

 

% Total

 

2019

 

% Total

 

2018

 

% Total

Revenue Increase
Same Branch

$

34,109

70.9

%

$

33,276

62.5

%

$

114,863

65.6

%

$

129,969

63.9

%

Acquired

 

14,001

29.1

%

 

19,976

37.5

%

 

60,334

34.4

%

 

73,536

36.1

%

Total

$

48,110

100.0

%

$

53,252

100.0

%

$

175,197

100.0

%

$

203,505

100.0

%

 
 
 

Adj EBITDA

Adj EBITDA

Adj EBITDA

Adj EBITDA

Contribution

Contribution

Contribution

Contribution

Adjusted EBITDA
Same Branch

$

10,048

29.5

%

$

5,152

15.5

%

$

24,084

21.0

%

$

15,434

11.9

%

Acquired

 

1,938

13.8

%

 

2,262

11.3

%

 

8,371

13.9

%

 

7,870

10.7

%

Total

$

11,986

24.9

%

$

7,414

13.9

%

$

32,455

18.5

%

$

23,304

11.5

%

 

Investor Relations:
614-221-9944
investorrelations@installed.net

Source: Installed Building Products, Inc.

Investor Relations:
614-221-9944
investorrelations@installed.net