Exhibit 99.1

TopBuild Announces Financial Results for the Second Quarter

Ended June 30, 2015

·

Spin-off from Masco Corporation successfully completed on June 30th

·

Net sales increases 5.5% to $404M, driven by the Installation segment which was up 9.5%

·

Adjusted EBITDA increases 14% to $24M

·

Adjusted earnings per share was $0.27, an increase of 59% compared to last year

DAYTONA BEACH, August 11, 2015 — TopBuild Corp. (the “Company”) (NYSE: BLD), the leading installer and distributor of insulation products to the United States construction industry based on revenue, today announced financial results for the second quarter ended June 30, 2015. 

Jerry Volas, CEO of TopBuild stated, “Our results for the second quarter reflect continued solid execution against the backdrop of a slowly improving new residential and commercial construction market.”

He continued, “Revenue growth for the second quarter compared favorably to housing start data. Profit margins were impacted by the extended time required to align customer pricing with material cost increases. Consistent with our history, we believe that alignment will improve as the year progresses.”

Second Quarter 2015 Highlights

·

Net sales were $404 million, an increase of 5.5% from $383 million in the second quarter of 2014.  The increase was driven primarily by sales volume growth in the Installation segment, both residential and commercial lines of business.

·

Adjusted operating profit improved to $20 million, as compared with $13 million for the second quarter of 2014.

·

Adjusted operating margins improved to 5.0%, from 3.4% for the comparable period in 2014.

·

Adjusted diluted earnings per share were $0.27 as compared to $0.17 in the prior quarter.

·

Adjusted net income from continuing operations was $10M compared to $6M in the prior year quarter.

·

Adjusted selling, general and administrated expenses as a percentage of sales was 220 bps improved from prior year quarter.

·

The Company had cash and cash equivalents and availability under its revolving credit facility totaling $131M.

·

TopBuild Home Services, the Company’s building science group, was named 2015 Energy Star® Partner of the Year.

Second Quarter 2015 Operating Segment Highlights

·

Installation (TruTeam) net sales increased 9% driven by growth in both residential and commercial lines of business.  Adjusted operating margin for TruTeam was 5.1%, a 220 basis point improvement over prior year.

·

Distribution (Service Partners) net sales were flat, due to prior year accelerated customer purchases ahead of announced price increases at the end of Q2 2014.  Adjusted operating margin for Service Partners was 7.7%, 40 bps lower than prior year.

Additional Information

The 2015 second quarter supplemental materials, including a presentation, are available on the “Investors” section of the Company’s website at www.topbuild.com.

About TopBuild

TopBuild installs insulation and other building products nationwide through its TruTeam installation services business, which has over 190 installation branches located in 43 states. TopBuild distributes insulation and other building products nationwide through its Service Partners business from its 72 distribution centers located in 35 states. TopBuild is based in Daytona Beach, Florida.  To learn more, visit www.topbuild.com.

1

 

Conference Call Details

A conference call to discuss second quarter financial results is scheduled for August 11, 2015 at 8:00 a.m. Eastern Time. Participants in the call are asked to register five to ten minutes prior to the scheduled start time by dialing 1-844-862-9357 and from outside the U.S. at 1-765-507-2656. Please use the conference identification number 98740854. The conference call will be webcast simultaneously and in its entirety on the Company’s website. Shareholders, media representatives and others interested in TopBuild may participate in the webcast by registering through the “Investors” section of the Company’s website at www.topbuild.com.

A replay of the call will be available on TopBuild’s website or by phone by dialing 1-855-859-2056 and from outside the U.S. at 1-404-537-3406. Please use the conference identification number 98740854. The telephone replay will be available approximately two hours after the end of the call through August 25.

Safe Harbor Statement

Statements contained in this press release that reflect our view about future performance constitute "forward-looking statements" under the Private Securities Litigation Reform Act of 1995. You can identify these statements by forward-looking words such as "believe," "anticipate," "appear," "may," "might," "will," "should," "intend," "plan," "estimate," "expects," "assume," "seek," "forecast," "anticipates," "appears," "believes," "estimates," "predicts," "potential," or "continue," the negative of these terms and other similar references to future period. 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. We caution you against relying on any of these forward-looking statements. Our future performance may be affected by our reliance on residential new construction, residential repair/remodel and commercial construction, our reliance on third-party suppliers and manufacturers, our ability to attract, develop and retain talented personnel and our sales and labor force, our ability to maintain consistent practices across our locations, our ability to maintain our competitive position, and our ability to realize the expected benefits of our spin-off from Masco Corporation. We discuss many of the risks we face under the caption entitled "Risk Factors" in the information statement filed as part of our Registration Statement on Form 10. Our forward-looking statements in this press release speak only as of the date of this press release. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. Unless required by law, we undertake no obligation to update publicly any forward-looking statements as a result of new information, future events or otherwise.

The Company believes that the non-GAAP performance measures and ratios that are contained herein, used in managing the business, may provide users of this financial information with additional meaningful comparisons between current results and results in prior periods. Non-GAAP performance measures and ratios should be viewed in addition to, and not as an alternative for, the Company’s reported results under accounting principles generally accepted in the United States. Additional information about the Company is contained in the Company’s filings with the Securities and Exchange Commission and is available on TopBuild’s website under “Investors” at www.topbuild.com.

Investor Relations and Media Contact
Idalia Rodriguez
IR@topbuild.com 
386-304-2088

2

 

TopBuild Corp.

Condensed Consolidated Statements of Operations - Unaudited

For the Three and Six Months Ended June 30, 2015 and 2014

(in millions, except per common share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

2015

 

2014

 

2015

 

2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

    

$
404

    

$
383

    

$
762

    

$
716

 

Cost of sales

 

 
318

 

 
298

 

 
603

 

 
566

 

Gross profit

 

 
86

 

 
85

 

 
159

 

 
150

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

 
74

 

 
75

 

 
149

 

 
148

 

Operating profit

 

 
12

 

 
10

 

 
10

 

 
2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense), net:

 

 
(4)

 

 
(3)

 

 
(6)

 

 
(6)

 

Income (loss) from continuing operations before income taxes

 

 
8

 

 
7

 

 
4

 

 
(4)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax (expense) benefit from continuing operations

 

 
(1)

 

 
(1)

 

 
(1)

 

 
2

 

Income (loss) from continuing operations

 

 
7

 

 
6

 

 
3

 

 
(2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from discontinued operations, net

 

 
(1)

 

 

 —

 

 

 —

 

 
(1)

 

Net income (loss)

 

$
6

 

$
6

 

$
3

 

$
(3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic:

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations, net

 

$
0.18

 

$
0.16

 

$
0.08

 

$
(0.05)

 

Loss from discontinued operations

 

 
(0.01)

 

 
(0.01)

 

 
(0.01)

 

 
(0.02)

 

Net income (loss)

 

$
0.17

 

$
0.15

 

$
0.07

 

$
(0.07)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations, net

 

$
0.18

 

$
0.16

 

$
0.08

 

$
(0.05)

 

Loss from discontinued operations

 

 
(0.01)

 

 
(0.01)

 

 
(0.01)

 

 
(0.02)

 

Net income (loss)

 

$
0.17

 

$
0.15

 

$
0.07

 

$
(0.07)

 

 

3

 

TopBuild Corp.

Condensed Consolidated Balance Sheets and

Other Financial Data - Unaudited

(dollars in millions)

 

 

 

 

 

 

 

 

 

 

    

June 30,

 

December 31,

 

 

    

2015

    

2014

 

ASSETS

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

$
63

 

$
3

 

Receivables, net

 

 
237

 

 
220

 

Inventories, net

 

 
99

 

 
107

 

Deferred income taxes

 

 
6

 

 
1

 

Prepaid expenses and other current assets

 

 
5

 

 
4

 

Total current assets

 

 
410

 

 
335

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 
92

 

 
93

 

Goodwill

 

 
1,044

 

 
1,044

 

Other intangible assets, net

 

 
2

 

 
3

 

Other assets

 

 
2

 

 
1

 

Total assets

 

$
1,550

 

$
1,476

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable

 

$
207

 

$
229

 

Current portion of long-term debt

 

 
10

 

 

 —

 

Accrued liabilities

 

 
76

 

 
73

 

Total current liabilities

 

 
293

 

 
302

 

 

 

 

 

 

 

 

 

Long-term debt

 

 
190

 

 

 —

 

Deferred income taxes

 

 
188

 

 
182

 

Other liabilities

 

 
42

 

 
40

 

Total liabilities

 

 
713

 

 
524

 

 

 

 

 

 

 

 

 

EQUITY

 

 
837

 

 
952

 

Total liabilities and equity

 

$
1,550

 

$
1,476

 

 

 

 

 

 

 

 

 

 

 

As of

 

 

    

June 30,

 

June 30,

 

 

    

2015

    

2014

 

Other Financial Data

 

 

 

 

 

 

 

Working Capital Days

 

 

 

 

 

 

 

Receivable days

 

 
45

 

 
45

 

Inventory days

 

 
30

 

 
32

 

Accounts Payable days

 

 
82

 

 
79

 

Working capital

 

$
129

 

$
119

 

Working capital as a % of sales (LTM)

 

 
8.3

%  

 
8.2

%

4

 

TopBuild Corp.

Condensed Consolidated Statement of Cash Flows - Unaudited

(dollars in millions)

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

 

 

 

June 30,

 

 

    

2015

    

2014

 

 

 

 

 

 

 

 

 

Net Cash (For) From Operating Activities:

    

 

    

    

 

    

 

Net income (loss)

 

$
3 

 

$
(3)

 

Adjustments to reconcile net income (loss) to net cash (used) provided by operating activities:

 

 

 

 

 

 

 

Depreciation and amortization

 

 
6 

 

 
13 

 

Noncash stock compensation

 

 
2 

 

 
2 

 

Loss on sale of property and equipment

 

 
2 

 

 

 — 

 

Deferred income taxes

 

 
1 

 

 
(3)

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

Receivables, net

 

 
(17)

 

 
(13)

 

Inventory, net

 

 
8 

 

 
(2)

 

Accounts payable and accrued liabilities

 

 
(15)

 

 
23 

 

Other, net

 

 
1 

 

 

 — 

 

Cash (used) provided by operations

 

$
(9)

 

$
17 

 

 

 

 

 

 

 

 

 

Cash Flows From (For) Investing Activities:

 

 

 

 

 

 

 

Capital expenditures

 

 
(7)

 

 
(6)

 

Other, net

 

 
1 

 

 
1 

 

Net Cash used by Investing Activities

 

$
(6)

 

$
(5)

 

 

 

 

 

 

 

 

 

Cash Flows From (For) Financing Activities:

 

 

 

 

 

 

 

Net transfer from (to) Former Parent Company

 

 
77 

 

 
(10)

 

Cash distribution paid to Former Parent Company

 

 
(200)

 

 

 — 

 

Proceeds from long-term debt

 

 
200 

 

 

 — 

 

Payment of debt issuance costs

 

 
(2)

 

 

 — 

 

Net Cash provided (used) by Financing Activities

 

$
75 

 

$
(10)

 

 

 

 

 

 

 

 

 

Cash and Cash Equivalents

 

 

 

 

 

 

 

Increase for the period

 

 
60 

 

 
2 

 

At January 1

 

 
3 

 

 
3 

 

At June 30

 

$
63 

 

$
5 

 

 

5

 

TopBuild Corp.

Segment Data - Unaudited

For the Three and Six Months Ended June 30, 2015 and 2014

(dollars in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

Six Months Ended

 

 

 

 

 

June 30,

 

 

 

June 30,

 

 

 

 

 

2015

 

2014

 

Change

 

2015

 

2014

 

Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Installation

    

    

 

    

 

 

    

 

    

    

 

    

    

 

    

 

 

Net sales

 

$
265

 

$
242

 
9% 

 

$
499

 

$
454

 
10% 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating profit, as reported

 

$
7

 

$
7

 

 

 

$
6

 

$

—

 

 

 

Operating margin, as reported

 

 
2.7

%  

 
2.9

%  

 

 

 
1.2

%  

 

n/a

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rationalization/spin-off charges

 

 
3

 

 

—

 

 

 

 
4

 

 

 —

 

 

 

Charge for litigation settlements, net

 

 
1

 

 

—

 

 

 

 
1

 

 

 —

 

 

 

Fixed asset disposal (truck mounted devices)

 

 
2

 

 

—

 

 

 

 
2

 

 

 —

 

 

 

Operating profit, as adjusted

 

$
13

 

$
7

 

 

 

$
13

 

$

 —

 

 

 

Operating margin, as adjusted

 

 
5.1

%  

 
2.9

%

 

 

 
2.7%

 

 

n/a

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distribution 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$
161

 

$
160

 

n/a 

 

$
305

 

$
298

 
2% 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating profit, as reported

 

$
12

 

$
13

 

 

 

$
23

 

$
22

 

 

 

Operating margin, as reported

 

 
7.4

%  

 
8.1

%  

 

 

 
7.6

%  

 
7.3

%  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rationalization charges

 

$
1

 

$

—

 

 

 

$
1

 

$

 —

 

 

 

Operating profit, as adjusted

 

 
13

 

 
13

 

 

 

 
24

 

 
22

 

 

 

Operating margin, as adjusted

 

 
7.7

%  

 
8.1

%

 

 

 
7.8

%

 
7.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales before eliminations

 

$
426

 

$
402

 

 

 

$
804

 

$
752

 

 

 

Intercompany eliminations

 

 
(22)

 

 
(19)

 

 

 

 
(42)

 

 
(36)

 

 

 

Net sales after eliminations

 

$
404

 

$
383

 
5% 

 

$
762

 

$
716

 
6% 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating profit, as reported – segment

 

$
19

 

$
20

 

 

 

$
29

 

$
22

 

 

 

General corporate expense, net (GCE)

 

 
(6)

 

 
(6)

 

 

 

 
(14)

 

 
(11)

 

 

 

Intercompany eliminations and other adjustments

 

 
(1)

 

 
(4)

 

 

 

 
(5)

 

 
(9)

 

 

 

Operating profit, as reported

 

 
12

 

 
10

 

 

 

 
10

 

 
2

 

 

 

Operating margin, as reported

 

 
2.8

%

 
2.7

%

 

 

 
1.4

%

 
0.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rationalization/spin-off  charges – segment

 

 
4

 

 

 —

 

 

 

 
4

 

 

 —

 

 

 

Charge for litigation settlements, net

 

 
1

 

 

 —

 

 

 

 
1

 

 

 —

 

 

 

Fixed asset disposal (truck mounted devices)

 

 
2

 

 

 —

 

 

 

 
2

 

 

 —

 

 

 

General corporate expense, net (GCE)

 

 
6

 

 
6

 

 

 

 
14

 

 
11

 

 

 

Direct corporate expense

 

 
1

 

 
3

 

 

 

 
6

 

 
8

 

 

 

Expected stand-alone corporate expenses

 

 
(6)

 

 
(6)

 

 

 

 
(11)

 

 
(11)

 

 

 

Operating profit, as adjusted

 

 
20

 

 
13

 

 

 

 
26

 

 
10

 

 

 

Operating margin, as adjusted

 

 
5.0

%

 
3.4

%

 

 

 
3.4

%

 
1.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 
1

 

 
1

 

 

 

 
2

 

 
2

 

 

 

Depreciation and amortization – segment

 

 
3

 

 
7

 

 

 

 
6

 

 
13

 

 

 

EBITDA, as adjusted

 

$
24

 

$
21

 

 

 

$
34

 

$
25

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales change period over period

 

$
21

 

 

 

 

 

 

$
46

 

 

 

 

 

 

EBITDA, as adjusted change period over period

 

$
3

 

 

 

 

 

 

$
9

 

 

 

 

 

 

EBITDA, as adjusted as percentage of Sales change

 

 
14

%  

 

 

 

 

 

 
20

%  

 

 

 

 

 

 

6

 

TopBuild Corp.

Non-GAAP Reconciliations - Unaudited

For the Three and Six Months Ended June 30, 2015 and 2014

(in millions, except per common share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

2015

 

2014

 

2015

 

2014

 

Gross Profit and Operating Profit Reconciliations

    

 

 

    

 

 

    

 

 

    

 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$
404

 

$
383

 

$
762

 

$
716

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit, as reported

 

$
86

 

$
85

 

$
159

 

$
150

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit, as adjusted

 

$
86

 

$
85

 

$
159

 

$
150

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin, as reported

 

 
21.2

%  

 
22.2

%  

 
20.9

%  

 
21.0

% 

Gross margin, as adjusted

 

 
21.2

%  

 
22.2

%  

 
20.9

%  

 
21.0

% 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating profit, as reported

 

$
12

 

$
10

 

$
10

 

$
2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rationalization/spin-off charges

 

 
4

 

 

 —

 

 
4

 

 

 —

 

Charge for litigation settlements, net

 

 
1

 

 

 —

 

 
1

 

 

 —

 

Fixed asset disposal (truck mounted device)

 

 
2

 

 

 —

 

 
2

 

 

 —

 

General corporate expense, net (GCE)

 

 
6

 

 
6

 

 
14

 

 
11

 

Direct corporate expense

 

 
1

 

 
3

 

 
6

 

 
8

 

Expected standalone corporate expenses

 

 
(6)

 

 
(6)

 

 
(11)

 

 
(11)

 

Operating profit, as adjusted

 

$
20

 

$
13

 

$
26

 

$
10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating margin, as reported

 

 
2.8

%  

 
2.7

%  

 
1.4

%  

 
0.3

% 

Operating margin, as adjusted

 

 
5.0

%  

 
3.4

%  

 
3.4

%  

 
1.4

% 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings Per Common Share Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations before income taxes, as reported

 

$
8

 

$
7

 

$
4

 

$
(4)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rationalization/spin-off charges

 

 
4

 

 

 —

 

 
4

 

 

 —

 

Charge for litigation settlements, net

 

 
1

 

 

 —

 

 
1

 

 

 —

 

Fixed asset disposal (truck mounted device)

 

 
2

 

 

 —

 

 
2

 

 

 —

 

General corporate expense, net (GCE)

 

 
6

 

 
6

 

 
14

 

 
11

 

Direct corporate expense

 

 
1

 

 
3

 

 
6

 

 
8

 

Expected standalone corporate expenses

 

 
(6)

 

 
(6)

 

 
(11)

 

 
(11)

 

Income from continuing operations before income taxes, as adjusted

 

 
16

 

 
10

 

 
20

 

 
4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax at 36% rate

 

 
(6)

 

 
(4)

 

 
(7)

 

 
(1)

 

Income from continuing operations, as adjusted

 

$
10

 

$
6

 

$
13

 

$
3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income per common share, as adjusted

 

$
0.27

 

$
0.17

 

$
0.34

 

$
0.07

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average diluted common shares outstanding

 

 
38

 

 
38

 

 
38

 

 
38

 

 

7