First quarter sales grow 1.1% to $1.3 billion Gross margin expands 100 basis points to 30.3% Adjusted EBITDA margin expands 100 basis points to 19.8% DAYTONA BEACH, Fla., May 07, 2024 (GLOBE NEWSWIRE) -- TopBuild Corp. (NYSE:BLD) a leading installer and specialty distributor of insulation and building material products to the construction industry in the United States and Canada today reported results for the first quarter ended March 31, 2024. Robert Buck, President and Chief Executive Officer, said, "We are proud of our first quarter results, which reflect the strength of our business, our ongoing drive to improve, and the hard work of our team. We continue to focus on growing the business – both organically and through M&A – and delivering operational improvements, as evidenced by the 100 basis point expansion in our first quarter adjusted EBITDA margin year over year." First Quarter Financial Highlights(comparisons are to the quarter ended March 31, 2023) 3 Months Ended 3/31/24 Reported Change Sales $1,278,717 1.1% Gross Margin 30.3% 100 bps SG&A as % of revenue 13.5% 0 bps Operating Profit $214,508 7.6% Operating Margin 16.8% 100 bps Net Income $152,381 12.2% Net Income per diluted share $4.79 11.9%       3 Months Ended 3/31/24 Adjusted Change Sales $1,278,717 1.1% Gross Margin 30.3% 100 bps SG&A as % of revenue 13.5% 30 bps Operating Profit $214,434 5.6% Operating Margin 16.8% 70 bps Net Income $153,122 10.7% Net Income per diluted share $4.81 10.3% EBITDA $253,818 6.5% EBITDA Margin 19.8% 100 bps       Operating Segment Highlights ($ in 000s)(comparisons are to the period ended March 31, 2023) Installation 3 MonthsEnded3/31/24   SpecialtyDistribution 3 MonthsEnded3/31/24 Sales $798,743   Sales $545,794 Change     Change   Volume 0.3%   Volume (4.2)% Price 1.2%   Price 1.5% M&A 3.5%   M&A 0.4% Dispositions (0.9)%   Dispositions 0.0% Total Change 4.1%   Total Change (2.3)% Operating Margin 19.6%   Operating Margin 14.2% Change 50 bps   Change 110 bps Adj. Operating Margin 19.6%   Adj. Operating Margin 14.1% Change 40 bps   Change 90 bps Adj. EBITDA Margin 22.0%   Adj. EBITDA Margin 16.9% Change 60 bps   Change 110 bps           Capital Allocation 2024 AcquisitionsYear to date, the Company has announced the acquisition of five insulation companies which are expected to generate approximately $68 million in annual revenue. They are listed in the chart below.         TTM Revenue   Company  ($ millions) Month Brabble Insulation (I) $5.2 February Morris Black & Sons (I) $3.8 March Pest Control Insulation (D) $25.4 March Green Space Insulation (I) $6.0 April Insulation Works (I) $28.0 May Total $68.4   I = Installation, D = Specialty Distribution         "We are extremely disciplined regarding capital allocation. We will continue to prioritize reinvesting our free cash flow to make acquisitions and drive increased shareholder value. With a total addressable market of more than $18 billion across our highly fragmented end markets, we are actively evaluating a strong pipeline of opportunities. Year-to-date, we have announced five acquisitions totaling approximately $68 million in annual revenue," continued Buck. New Share Repurchase AuthorizationTopBuild also announced today that its Board of Directors authorized the repurchase of up to $1.0 billion of the Company's outstanding common stock. The new authorization is in addition to the $154.0 million remaining from the prior authorization, bringing the total availability for share repurchases to $1.15 billion. "Our new repurchase authorization demonstrates management and our Board of Directors' continued confidence in and support of our long-term strategy and the importance of returning capital to shareholders," Buck said. 2024 Outlook1"We are confident in our ability to continue delivering strong performance in 2024. Our unique business model, our commitment to driving shareholder value, and our ability to successfully navigate changes in the macro environment position us extremely well for the long term," concluded Buck. The Company's raised its outlook for 2024 in light of strong profitability in the first quarter and to incorporate the acquisitions completed to date in 2024. 2024 Low High Sales $ 5,400   $ 5,600   Adjusted EBITDA* $ 1,065   $ 1,155   * See table for Adjusted EBITDA reconciliation. 1 This outlook reflects management's current view of present and future market conditions and is based on assumptions such as housing starts, general and administrative expenses, and interest rates. These targets do not include any effects related to potential acquisitions or divestitures that may occur after the date of this press release. A reconciliation of non-GAAP targets to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty regarding, and the potential variability of, the costs and expenses that may be incurred in the future and therefore, cannot be reasonably predicted. The effect of these excluded items may be significant. Factors that could cause actual long-term results to differ materially from TopBuild's current expectations are discussed below and are also detailed in the Company's most recent Annual Report on Form 10-K and subsequent SEC reports. Conference Call A conference call to discuss first quarter 2024 financial results is scheduled for today, Tuesday, May 7, at 9:00 a.m. Eastern Time. The call may be accessed by dialing (877) 407-9037. The conference call will be webcast simultaneously on the Company's website at www.topbuild.com. In addition, a copy of management's formal remarks and a presentation will be available immediately prior to the conference call on www.topbuild.com. About TopBuildTopBuild Corp., headquartered in Daytona Beach, Florida, is a leading installer and specialty distributor of insulation and related building material products to the construction industry in the United States and Canada. We provide insulation installation services nationwide through our Installation segment which has approximately 240 branches located across the United States. We distribute building and mechanical insulation, insulation accessories and other building product materials for the residential, commercial, and industrial end markets through our Specialty Distribution business. Our Specialty Distribution network encompasses approximately 170 branches. To learn more about TopBuild please visit our website at www.topbuild.com. Use of Non-GAAP Financial Measures Adjusted EBITDA, incremental EBITDA margin, adjusted EBITDA margin, the "adjusted" financial measures presented above, and figures presented on a "same branch basis" are not calculated in accordance with U.S. generally accepted accounting principles ("GAAP"). The Company believes that these non-GAAP financial measures, which are used in managing the business, may provide users of this financial information with additional meaningful comparisons between current results and results in prior periods. We define same branch sales as sales from branches in operation for at least 12 full calendar months. Such non-GAAP financial measures are reconciled to their closest GAAP financial measures in tables contained in this press release. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company's reported results under GAAP. Additional information may be found in the Company's filings with the Securities and Exchange Commission which are available on TopBuild's website under "SEC Filings" at www.topbuild.com. Safe Harbor StatementThis press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act.  These forward-looking statements may address, among other things, our expected financial and operational results, the related assumptions underlying our expected results, and our plan to repurchase our common stock under stock repurchase transactions. These forward-looking statements can be identified by words such as "will," "would," "anticipate," "expect," "believe," "designed," "plan," "may," "project," "estimate" or "intend," the negative of these terms, and similar references to future periods.  These views involve risks and uncertainties that are difficult to predict and, accordingly, our actual results may differ materially from the results discussed in our forward-looking statements.  Our forward-looking statements contained herein speak only as of the date of this press release.  Factors or events that we cannot predict, including those described in the risk factors contained in our filings with the Securities and Exchange Commission, may cause our actual results to differ from those expressed in forward-looking statements.  Although TopBuild believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, the Company can give no assurance that its expectations will be achieved and it undertakes no obligation to update any forward-looking statements as a result of new information, future events, or otherwise, except as required by applicable law. (tables follow)                 TopBuild Corp.             Condensed Consolidated Statements of Operations (Unaudited)       (in thousands, except share and per common share amounts)                         Three Months Ended March 31,      2024     2023   Net sales   $ 1,278,717     $ 1,265,238   Cost of sales     891,567       895,023   Gross profit     387,150       370,215                 Selling, general, and administrative expense     172,642       170,784   Operating profit     214,508       199,431                 Other income (expense), net:             Interest expense     (18,795 )     (18,039 ) Other, net     11,282       1,923   Other expense, net     (7,513 )     (16,116 ) Income before income taxes     206,995       183,315                 Income tax expense     (54,614 )     (47,445 ) Net income   $ 152,381     $ 135,870                 Net income per common share:             Basic   $ 4.82     $ 4.31   Diluted   $ 4.79     $ 4.28                 Weighted average shares outstanding:             Basic     31,641,454       31,550,658   Diluted     31,843,818       31,713,239                 TopBuild Corp.               Condensed Consolidated Statements of Comprehensive Income (Unaudited) (in thousands)                                   Three Months Ended March 31,      2024   2023 Net income   $ 152,381     $ 135,870   Other comprehensive (loss) income:               Foreign currency translation adjustment     (4,092 )     1,753   Comprehensive income   $ 148,289     $ 137,623                   TopBuild Corp.                 Condensed Consolidated Balance Sheets and Other Financial Data (Unaudited)               (dollars in thousands)                     As of     March 31, 2024   December 31, 2023 ASSETS                 Current assets:                 Cash and cash equivalents   $ 968,809     $ 848,565   Receivables, net of an allowance for credit losses of $22,398 at March 31, 2024, and $23,948 at December 31, 2023     829,221       799,009   Inventories     375,056       364,731   Prepaid expenses and other current assets     29,376       36,939   Total current assets     2,202,462       2,049,244                     Right of use assets     201,392       204,629   Property and equipment, net     266,422       264,487   Goodwill     2,052,319       2,042,568   Other intangible assets, net     578,335       591,058   Other assets     9,522       10,865   Total assets   $ 5,310,452     $ 5,162,851                     LIABILITIES                 Current liabilities:                 Accounts payable   $ 467,863     $ 469,585   Current portion of long-term debt     46,230       47,039   Accrued liabilities     201,402       187,217   Short-term operating lease liabilities     67,041       65,780   Short-term finance lease liabilities     1,829       1,917   Total current liabilities     784,365       771,538                     Long-term debt     1,362,498       1,373,028   Deferred tax liabilities, net     243,622       243,930   Long-term portion of insurance reserves     60,179       58,783