bld_Ex_99

Exhibit 99.1

TopBuild (NYSE:BLD), the leading purchaser, installer and distributor of insulation products to the U.S. construction industry, reports strong third quarter 2017 results

10.1% Operating Margin, 10.3% on an Adjusted Basis

$0.88 Per Diluted Share Income from Continuing Operations,

$0.83 Per Diluted Share on an Adjusted Basis

Third Quarter Financial Highlights

(unless otherwise indicated, comparisons are to the quarter ended September 30, 2016)

Net sales increased 7.9% to $489.0 million, primarily driven by sales volume growth and price increases in both operating segments as well as through acquisitions. On a same branch basis, revenue increased 2.7% to $464.6 million.

Gross margin expanded 80 basis points to 24.7%.

Operating profit was $49.6 million, compared to $39.1 million. On an adjusted basis, operating profit was $50.3 million, compared to $39.6 million, a 27.0% improvement.

Operating margin was 10.1%, up 150 basis points. Adjusted operating margin improved 160 basis points to 10.3%.

Income from continuing operations was $31.4 million, or $0.88 per diluted share, compared to $24.6 million, or $0.65 per diluted share. Adjusted income from continuing operations was $29.7 million, or $0.83 per diluted share, compared to $23.8 million, or $0.63 per diluted share.

Adjusted EBITDA was $57.6 million, compared to $44.6 million, a 28.9% increase. Incremental EBITDA margin was 36.0%. On a same branch basis, adjusted EBITDA was $53.7 million, a 20.3% increase, and incremental EBITDA margin was 74.2%.

The seven acquisitions completed over the past 18 months contributed $24.4 million of revenue. Incremental EBITDA related to these acquisitions improved 380 basis points from second quarter 2017 to 16.3%.

At September 30, 2017, the Company had cash and cash equivalents of $18.5 million, availability under its revolving credit facility of $197.9 million and $100.0 million available under a delayed draw term loan for total liquidity of $316.4 million.

Jerry Volas, Chief Executive Officer, stated, “We continue to demonstrate the efficiency of our operating model through margin expansion and bottom line growth. While there was some negative impact to our top line from weather related issues in the third quarter, this should be recovered in a future period. Looking ahead we see continued strength in both the residential and commercial markets. Our national scale should remain a strong competitive advantage for us as both capacity and labor continue to tighten.”

Nine Month Financial Highlights

(unless otherwise indicated, comparisons are to nine months ended September 30, 2016)

Net sales increased 8.2% to $1,404.9 million. On a same branch basis, revenue increased 4.2% to $1,352.0 million.

Gross margin expanded 140 basis points to 24.1%.

Operating profit was $86.9 million, compared to operating profit of $85.7 million. On an adjusted basis, operating profit was $121.0 million, compared to $87.8 million, a 37.9% improvement.

Operating margin was 6.2%, down 40 basis points. Adjusted operating margin improved 180 basis points to 8.6%.

Income from continuing operations was $53.1 million, or $1.44 per diluted share, compared to $51.3 million, or $1.35 per diluted share. Adjusted income from continuing operations was $71.6 million, or $1.94 per diluted share, compared to $51.9 million, or $1.37 per diluted share.

Adjusted EBITDA was $139.7 million, compared to $102.5 million, a 36.3% increase. Incremental EBITDA margin was 35.0%. On a same branch basis, adjusted EBITDA grew 29.6% to $132.7 million and incremental EBITDA margin was 56.1%.

Operating Segment Highlights ($ in 000s)

(comparisons are to the period ended Septebmer 30, 2016)


	3 Months			9 Months				3 Months			9 Months
	Ended			Ended				Ended			Ended
TruTeam	9/30/2017			9/30/2017			Service Partners	9/30/2017			6/30/2017
Sales	$	333,238		$	945,109		Sales	$	181,146		$	526,452
Change		11.1	%		9.8	%	Change		4.0	%		5.4	%

Operating Margin		12.3	%		7.1	%	Operating Margin		10.1	%		9.7	%
Change		160 bps			(90) bps		Change		120 bps			100 bps

Adj. Operating Margin		12.3	%		10.3	%	Adj. Operating Margin		10.1	%		9.7	%
Change		150 bps			220 bps		Change		120 bps			100 bps

Capital Allocation

Acquisitions

Year-to-date, the Company has completed six acquisitions, four concentrating on residential insulation and two on heavy commercial. Combined, these acquisitions are expected to generate approximately $83 million of incremental revenue on an annual basis.

Share Repurchases

In conjunction with its previously announced accelerated share repurchase program, in the third quarter the Company made a payment of $100.0 million to Bank of America Merrill Lynch, using $30 million of cash on hand and borrowing $70 million under its revolving facility. In exchange, the Company received approximately 1.5 million shares with a value of approximately $80 million. The remaining $20 million balance is expected to settle no later than the end of the first quarter of 2018. Since January 1, 2016, the Company has repurchased 3.0 million shares of its common stock.

Volas stated, “Our plan is to utilize our excess free cash flow to expand our two business segments through strategic acquisitions. We are very encouraged by our robust pipeline of prospects and are pleased with our successful track record of integrating the seven firms we’ve acquired these past 18 months. Incremental EBITDA margin on these acquisitions has improved from 5.7% in the first quarter of 2017 to 16.3% today.”

2017 Revenue and Adjusted EBITDA Outlook


2017		Low		High
Revenue	$	1,890M	$	1,905M
Adjusted EBITDA	$	190M	$	195M

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, weighted average diluted shares outstanding and interest rates. This outlook does not include any effects related to potential acquisitions or divestitures that may occur after the date of this press release. Factors that could cause actual 2017 results to differ materially from TopBuild’s current expectations are discussed below and are also detailed in the Company’s 2016 Annual Report on Form 10-K and subsequent SEC reports.

Amendment to Corporate Governance Guidelines

The Company’s Board of Directors has amended its Corporate Governance Guidelines to adopt a majority voting policy whereby any nominee for director who receives more “withheld” votes than “for” votes in an uncontested election must submit a written offer to resign as director. Any such resignation will be reviewed by the Board’s Nominating and Corporate Governance Committee and, within 90 days after the election, the independent members of the Board will determine whether to accept, reject or take other appropriate action with respect to, the resignation, in furtherance of the best interests of the Company and its shareholders.

Additional Information

Quarterly supplemental materials, including a presentation that will be referenced on today’s conference call, are available on the “Investors” section of the Company’s website at www.topbuild.com.

TopBuild Corp.

Condensed Consolidated Statements of Operations (Unaudited)

(in thousands, except per common share amounts)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
Net sales	$	489,044	$	453,102	$	1,404,865	$	1,298,715
Cost of sales		368,205		344,963		1,065,789		1,003,433
Gross profit		120,839		108,139		339,076		295,282

Selling, general, and administrative expense (exclusive of significant legal settlement, shown separately below)		71,277		69,038		222,181		209,623
Significant legal settlement		—		—		30,000		—
Operating profit		49,562		39,101		86,895		85,659

Other income (expense), net:
Interest expense		(2,479)		(1,271)		(5,767)		(4,315)
Loss on extinguishment of debt		—		—		(1,086)		—
Other, net		27		65		239		201
Other expense, net		(2,452)		(1,206)		(6,614)		(4,114)
Income from continuing operations before income taxes		47,110		37,895		80,281		81,545

Income tax expense from continuing operations		(15,717)		(13,329)		(27,139)		(30,246)
Income from continuing operations		31,393		24,566		53,142		51,299

Net income	$	31,393	$	24,566	$	53,142	$	51,299

Income per common share:
Basic:
Income from continuing operations	$	0.90	$	0.65	$	1.47	$	1.36
Net income	$	0.90	$	0.65	$	1.47	$	1.36

Diluted:
Income from continuing operations	$	0.88	$	0.65	$	1.44	$	1.35
Net income	$	0.88	$	0.65	$	1.44	$	1.35

TopBuild Corp.

Condensed Consolidated Balance Sheets and Other Financial Data (Unaudited)

(dollars in thousands)


	As of
	September 30,		December 31,
	2017		2016
ASSETS
Current assets:
Cash and cash equivalents	$	18,460	$	134,375
Receivables, net of an allowance for doubtful accounts of $3,729 and $3,374 at September 30, 2017, and December 31, 2016, respectively		315,382		252,624
Inventories, net		116,781		116,190
Prepaid expenses and other current assets		15,043		23,364
Total current assets		465,666		526,553

Property and equipment, net		98,144		92,760
Goodwill		1,077,102		1,045,058
Other intangible assets, net		34,280		2,656
Deferred tax assets, net		19,469		19,469
Other assets		3,033		3,623
Total assets	$	1,697,694	$	1,690,119

LIABILITIES
Current liabilities:
Accounts payable	$	242,617	$	241,534
Revolving credit facility		5,000		—
Current portion of long-term debt		12,500		20,000
Accrued liabilities		81,199		64,399
Total current liabilities		341,316		325,933

Long-term debt		232,405		158,800
Deferred tax liabilities, net		193,980		193,715
Long-term portion of insurance reserves		37,396		38,691
Other liabilities		3,196		433
Total liabilities		808,293		717,572

EQUITY		889,401		972,547
Total liabilities and equity	$	1,697,694	$	1,690,119


	As of September 30,
	2017			2016
Other Financial Data
Working Capital Days†
Receivable days		49			45
Inventory days		30			29
Accounts payable days		80			76
Working capital	$	189,547		$	153,553
Working capital as a percent of sales (LTM)‡		10	%		8.9	%

† Adjusted for remaining acquisition day one balance sheet items

‡ Last 12 months sales have been adjusted for the pro forma effect of acquired branches

TopBuild Corp.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(dollars in thousands)


	Nine Months Ended September 30,
	2017		2016
Net Cash Provided by (Used in) Operating Activities:
Net income	$	53,142	$	51,299
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		11,753		8,923
Share-based compensation		7,473		5,743
Loss on extinguishment of debt		1,086		—
Loss on sale or abandonment of property and equipment		614		2,399
Amortization of debt issuance costs		293		257
Amortization of contingent consideration		98		—
Provision for bad debt expense		2,498		2,696
Loss from inventory obsolescence		1,390		970
Deferred income taxes, net		266		476
Changes in certain assets and liabilities:
Receivables, net		(43,931)		(32,294)
Inventories, net		249		12,103
Prepaid expenses and other current assets		8,362		(3,162)
Accounts payable		(2,280)		(35,023)
Long-term portion of insurance reserves		—		(1,599)
Accrued liabilities		13,633		15,159
Other, net		(28)		(13)
Net cash provided by operating activities		54,618		27,934

Cash Flows Provided by (Used in) Investing Activities:
Purchases of property and equipment		(13,088)		(10,083)
Acquisition of businesses		(84,040)		(3,476)
Proceeds from sale of property and equipment		453		379
Other, net		178		93
Net cash used in investing activities		(96,497)		(13,087)

Cash Flows Provided by (Used in) Financing Activities:
Net transfer to Former Parent		—		(153)
Proceeds from issuance of long-term debt		250,000		—
Repayment of long-term debt		(183,125)		(10,000)
Payment of debt issuance costs		(2,150)		—
Proceeds from revolving credit facility		170,000		—
Repayments of revolving credit facility		(165,000)		—
Taxes withheld and paid on employees' equity awards		(4,475)		(1,668)
Repurchase of shares of common stock		(139,286)		(11,377)
Net cash used in financing activities		(74,036)		(23,198)

Cash and Cash Equivalents
Decrease for the period		(115,915)		(8,351)
Beginning of year		134,375		112,848
End of period	$	18,460	$	104,497

Supplemental disclosure of noncash investing activities:
Accruals for property and equipment	$	154	$	110

TopBuild Corp.

Segment Data (Unaudited)

(dollars in thousands)


	Three Months Ended September 30,								Nine Months Ended September 30,
	2017			2016			Change		2017			2016			Change
Installation
Sales	$	333,238		$	300,005		11.1	%	$	945,109		$	860,924		9.8	%

Operating profit, as reported	$	40,862		$	32,196				$	66,985		$	68,499
Operating margin, as reported		12.3	%		10.7	%				7.1	%		8.0	%

Significant legal settlement		—			—					30,000			—
Rationalization charges		139			115					720			1,009
Operating profit, as adjusted	$	41,001		$	32,311				$	97,705		$	69,508
Operating margin, as adjusted		12.3	%		10.8	%				10.3	%		8.1	%

Distribution
Sales	$	181,146		$	174,123		4.0	%	$	526,452		$	499,268		5.4	%

Operating profit, as reported	$	18,300		$	15,536				$	50,806		$	43,416
Operating margin, as reported		10.1	%		8.9	%				9.7	%		8.7	%

Rationalization charges		5			—					23			83
Operating profit, as adjusted	$	18,305		$	15,536				$	50,829		$	43,499
Operating margin, as adjusted		10.1	%		8.9	%				9.7	%		8.7	%

Total
Sales before eliminations	$	514,384		$	474,128				$	1,471,561		$	1,360,192
Intercompany eliminations		(25,340)			(21,026)					(66,696)			(61,477)
Net sales after eliminations	$	489,044		$	453,102		7.9	%	$	1,404,865		$	1,298,715		8.2	%

Operating profit, as reported - segment	$	59,162		$	47,732				$	117,791		$	111,915
General corporate expense, net		(5,187)			(4,966)					(19,503)			(15,716)
Intercompany eliminations and other adjustments		(4,413)			(3,665)					(11,393)			(10,540)
Operating profit, as reported	$	49,562		$	39,101				$	86,895		$	85,659
Operating margin, as reported		10.1	%		8.6	%				6.2	%		6.6	%

Significant legal settlement		—			—					30,000			—
Rationalization charges†		404			435					3,399			2,090
Acquisition related costs		310			55					748			55
Operating profit, as adjusted	$	50,276		$	39,591				$	121,042		$	87,804
Operating margin, as adjusted		10.3	%		8.7	%				8.6	%		6.8	%

Share-based compensation ‡		2,372			2,037					6,859			5,743
Depreciation and amortization		4,918			3,015					11,753			8,923
EBITDA, as adjusted	$	57,566		$	44,643				$	139,654		$	102,470

Sales change period over period		35,942								106,150
EBITDA, as adjusted change period over period		12,923								37,184
EBITDA, as adjusted as percentage of sales change		36.0	%							35.0	%

† Rationalization charges include corporate level adjustments as well as segment operating adjustments.

‡ Amounts for the nine month period ending September 30, 2017, excludes $0.6 million of share-based compensation included in the line item rationalization charges.

TopBuild Corp.

Non-GAAP Reconciliations (Unaudited)

(in thousands, except common share amounts)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Gross Profit and Operating Profit Reconciliations

Net sales	$	489,044		$	453,102		$	1,404,865		$	1,298,715

Gross profit, as reported	$	120,839		$	108,139		$	339,076		$	295,282

Gross profit, as adjusted	$	120,839		$	108,139		$	339,076		$	295,282

Gross margin, as reported		24.7	%		23.9	%		24.1	%		22.7	%
Gross margin, as adjusted		24.7	%		23.9	%		24.1	%		22.7	%

Operating profit, as reported	$	49,562		$	39,101		$	86,895		$	85,659

Significant legal settlement		—			—			30,000			—
Rationalization charges		404			435			3,399			2,090
Acquisition related costs		310			55			748			55
Operating profit, as adjusted	$	50,276		$	39,591		$	121,042		$	87,804

Operating margin, as reported		10.1	%		8.6	%		6.2	%		6.6	%
Operating margin, as adjusted		10.3	%		8.7	%		8.6	%		6.8	%

Income Per Common Share Reconciliation

Income from continuing operations before income taxes, as reported	$	47,110		$	37,895		$	80,281		$	81,545

Significant legal settlement		—			—			30,000			—
Rationalization charges		404			435			3,399			2,090
Acquisition related costs		310			55			748			55
Loss on extinguishment of debt		—			—			1,086			—
Income from continuing operations before income taxes, as adjusted		47,824			38,385			115,514			83,690

Tax at 38% rate		(18,173)			(14,586)			(43,895)			(31,802)
Income from continuing operations, as adjusted	$	29,651		$	23,799		$	71,619		$	51,888

Income per common share, as adjusted	$	0.83		$	0.63		$	1.94		$	1.37

Average diluted common shares outstanding		35,737,629			37,952,333			36,842,144			37,942,540

TopBuild Corp.

Same Branch Net Sales and Adjusted EBITDA (Unaudited)

(dollars in thousands)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Net sales
Same branch	$	464,622		$	452,430		$	1,352,048		$	1,298,043
Acquired		24,422			672			52,817			672
Total	$	489,044		$	453,102		$	1,404,865		$	1,298,715

EBITDA, as adjusted
Same branch		53,652			44,602			132,703			102,429
Acquired		3,914			41			6,951			41
Total	$	57,566		$	44,643		$	139,654		$	102,470

Same branch EBITDA, as adjusted as percentage of sales change		74.2	%		36.4	%		56.1	%		30.5	%
Acquired EBITDA, as adjusted as percentage of sales change		16.3	%		6.1	%		13.3	%		6.1	%

TopBuild Corp.

Reconciliation of EBITDA to Net Income (Unaudited)

(dollars in thousands)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
Net income, as reported	$	31,393	$	24,566	$	53,142	$	51,299
Adjustments to arrive at EBITDA, as adjusted:
Interest expense and other, net		2,452		1,206		5,528		4,114
Income tax expense from continuing operations		15,717		13,329		27,139		30,246
Depreciation and amortization		4,918		3,015		11,753		8,923
Share-based compensation †		2,372		2,037		6,859		5,743
Significant legal settlement		—		—		30,000		—
Rationalization charges		404		435		3,399		2,090
Loss on extinguishment of debt		—		—		1,086		—
Acquisition related costs		310		55		748		55
EBITDA, as adjusted	$	57,566	$	44,643	$	139,654	$	102,470

† Amounts for the nine month period ending September 30, 2017, excludes $0.6 million of share-based compensation included in the line item rationalization charges.


	Twelve Months Ending December 31, 2017
		Low		High
Estimated net income	$	75.1	$	78.8
Adjustments to arrive at estimated EBITDA, as adjusted:
Interest expense and other, net		8.0		7.7
Income tax expense from continuing operations		46.0		48.3
Depreciation and amortization		16.1		15.7
Share-based compensation †		9.5		9.2
Significant legal settlement		30.0		30.0
Rationalization charges		3.4		3.4
Loss on extinguishment of debt		1.1		1.1
Acquisition related costs		0.8		0.8
Estimated EBITDA, as adjusted	$	190.0	$	195.0