bld_Ex_99

Exhibit 99.1

TopBuild (NYSE:BLD), the leading purchaser, installer and distributor of insulation products to the U.S. construction industry.

TopBuild reports strong fourth quarter and full year 2017 results

Fourth Quarter Financial Highlights

(unless otherwise indicated, comparisons are to the quarter ended December 31, 2016)

Net sales increased 12.9% to $501.4 million, driven by sales volume growth and price increases in both operating segments as well as through acquisitions. On a same branch basis, net sales increased 8.3% to $479.6 million.

Gross margin expanded 60 basis points to 24.3%.

Operating profit was $50.0 million, compared to $35.9 million. On an adjusted basis, operating profit was $50.8 million, compared to $37.1 million, a 37.2% improvement.

Operating margin was 10.0%, up 190 basis points. Adjusted operating margin improved 180 basis points to 10.1%.

Income from continuing operations was $47.8 million, or $2.93 per diluted share, compared to $34.7 million, or $0.57 per diluted share. The Company noted that in the fourth quarter of 2017 it recorded a one-time tax benefit of $74.1 million related to the passage of the 2017 Tax Reform Bill.

Adjusted income from continuing operations was $30.1 million, or $0.84 per diluted share, compared to $22.2 million, or $0.59 per diluted share.

Adjusted EBITDA was $57.9 million, compared to $42.1 million, a 37.7% increase. Incremental EBITDA margin was 27.7%. On a same branch basis, adjusted EBITDA was $55.0 million, a 31.3% increase, and incremental EBITDA margin was 35.5%.

The six acquisitions completed in 2017 contributed $21.8 million of revenue. Incremental EBITDA related to these acquisitions was 13.6%.

A one-time benefit of $74.1 million from the adjustment of the Company’s deferred assets and liabilities was taken to reflect the change in the federal tax rate.

At December 31, 2017, the Company had cash and cash equivalents of $56.5 million, availability under its revolving credit facility of $203.0 million and $100.0 million available under a delayed draw term loan for total liquidity of $359.5 million.

Jerry Volas, Chief Executive Officer, stated, “2017 was a year of profitable growth for TopBuild. We remain focused on expanding market share, identifying additional avenues of growth that complement our core residential insulation businesses and improving operational efficiencies.”

Full Year 2017 Financial Highlights

(unless otherwise indicated, comparisons are to twelve months ended December 31, 2016)

Net sales increased 9.4% to $1,906.3 million. On a same branch basis, revenue increased 5.2% to $1,831.6 million.

Gross margin expanded 120 basis points to 24.2%.

Operating profit was $136.9 million, compared to operating profit of $121.6 million. On an adjusted basis, operating profit was $171.9 million, compared to $124.9 million, a 37.6% improvement.

Operating margin was 7.2%, up 20 basis points. Adjusted operating margin improved 180 basis points to 9.0%.

Income from continuing operations was $128.0 million, or $4.32 per diluted share, compared to $116.3 million, or $1.92 per diluted share. Adjusted income from continuing operations was $164.1 million, or $2.78 per diluted share, compared to $119.5 million, or $1.96 per diluted share.

Adjusted EBITDA was $197.6 million, compared to $144.5 million, a 36.7% increase. Incremental EBITDA margin was 32.5%. On a same branch basis, adjusted EBITDA grew 30.1% to $187.7 million and incremental EBITDA margin was 47.7%.

The six acquisitions completed in 2017 contributed $74.6 million of revenue. Incremental EBITDA related to these acquisitions was 13.3%.

Jerry Volas, Chief Executive Officer, stated, “Looking ahead, we are very optimistic the housing recovery will continue to strengthen. Inventory is tight, demand is strong and inflation remains in check. TopBuild is ideally situated to take advantage of this positive environment through both our TruTeam and Service Partners segments which, combined, are exposed to 95% of all housing starts.”

Operating Segment Highlights ($ in 000s)

(comparisons are to the period ended December 31, 2016)


	3 Months			12 Months				3 Months			12 Months
	Ended			Ended				Ended			Ended
TruTeam	12/31/2017			12/31/2017			Service Partners	12/31/2017			12/31/2017
Sales	$	336,188		$	1,281,296		Sales	$	193,306		$	719,759
Change		16.2	%		11.4	%	Change		9.0	%		6.4	%

Operating Margin		12.6	%		8.5	%	Operating Margin		9.3	%		9.5	%
Change		270 bps			10 bps		Change		10 bps			70 bps

Adj. Operating Margin		12.7	%		11.0	%	Adj. Operating Margin		9.3	%		9.6	%
Change		270 bps			240 bps		Change		0 bps			70 bps

Capital Allocation

Acquisitions

In 2017 the Company completed six acquisitions that are expected to generate approximately $83 million of net annual revenue. The companies acquired included two heavy commercial and four residential installation firms.

In 2018, through February 26, the Company has completed two acquisitions that are expected to generate approximately $31.6 million of net revenue.

Share Repurchases

In 2017 the Company repurchased a total of 2.4 million shares of its common stock for approximately $139.3 million. This includes the receipt of approximately 1.5 million shares from Bank of America Merrill Lynch related to its previously announced $100 million accelerated share repurchase (“ASR”) program. The ASR is expected to settle no later than the end of the first quarter of 2018.

Jerry Volas, Chief Executive Officer, stated, “Strategic acquisitions remain a top priority and we are encouraged by our robust pipeline of prospects. Since implementing our acquisition program in 2016, we have acquired six residential insulation firms, two heavy commercial insulation companies and an insulation products distributor. Combined, these nine acquisitions are expected to contribute over $120 million of annual revenue.”

2018 Revenue and Adjusted EBITDA Outlook


2018		Low		High
Revenue	$	2,050M	$	2,115M
Adjusted EBITDA	$	220M	$	240M

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 2018 results to differ materially from TopBuild’s current expectations are discussed below and are also detailed in the Company’s 2017 Annual Report on Form 10-K and subsequent SEC reports.

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.

Conference Call

A conference call to discuss fourth quarter 2017 financial results is scheduled for today, Tuesday, February 27, at 9:30 a.m. Eastern Time. The call may be accessed by dialing (800) 920-2997. The conference call will be webcast simultaneously on the “Investors” section of the Company’s website at www.topbuild.com.

TopBuild Corp.

Condensed Consolidated Statements of Operations

(in thousands, except per common share amounts)


	Three Months Ended December 31,				Year Ended December 31,
	2017		2016		2017		2016
Net sales	$	501,401	$	444,135	$	1,906,266	$	1,742,850
Cost of sales		379,368		339,073		1,445,157		1,342,506
Gross profit		122,033		105,062		461,109		400,344

Selling, general, and administrative expense (exclusive of significant legal settlement, shown separately below)		72,063		69,118		294,245		278,740
Significant legal settlement		—		—		30,000		—
Operating profit		49,970		35,944		136,864		121,604

Other income (expense), net:
Interest expense		(2,252)		(1,293)		(8,019)		(5,608)
Loss on extinguishment of debt		—		—		(1,086)		—
Other, net		42		77		281		277
Other expense, net		(2,210)		(1,216)		(8,824)		(5,331)
Income from continuing operations before income taxes		47,760		34,728		128,040		116,273

Income tax benefit (expense) from continuing operations		57,231		(13,421)		30,093		(43,667)
Income from continuing operations		104,991		21,307		158,133		72,606

Net income	$	104,991	$	21,307	$	158,133	$	72,606

Income per common share:
Basic:
Income from continuing operations	$	3.00	$	0.57	$	4.41	$	1.93
Net income	$	3.00	$	0.57	$	4.41	$	1.93

Diluted:
Income from continuing operations	$	2.93	$	0.57	$	4.32	$	1.92
Net income	$	2.93	$	0.57	$	4.32	$	1.92

TopBuild Corp.

Condensed Consolidated Balance Sheets and Other Financial Data

(dollars in thousands)


	As of December 31,
	2017		2016
ASSETS
Current assets:
Cash and cash equivalents	$	56,521	$	134,375
Receivables, net of an allowance for doubtful accounts of $3,673 and $3,374 at December 31, 2017, and December 31, 2016, respectively		308,508		252,624
Inventories, net		131,342		116,190
Prepaid expenses and other current assets		15,221		23,364
Total current assets		511,592		526,553

Property and equipment, net		107,121		92,760
Goodwill		1,077,186		1,045,058
Other intangible assets, net		33,243		2,656
Deferred tax assets, net		18,129		19,469
Other assets		2,278		3,623
Total assets	$	1,749,549	$	1,690,119

LIABILITIES
Current liabilities:
Accounts payable	$	263,814	$	241,534
Current portion of long-term debt		12,500		20,000
Accrued liabilities		75,087		64,399
Total current liabilities		351,401		325,933

Long-term debt		229,387		158,800
Deferred tax liabilities, net		132,840		193,715
Long-term portion of insurance reserves		36,160		38,691
Other liabilities		3,242		433
Total liabilities		753,030		717,572

EQUITY		996,519		972,547
Total liabilities and equity	$	1,749,549	$	1,690,119


	As of December 31,
	2017			2016
Other Financial Data
Working Capital Days†
Receivable days		50			46
Inventory days		33			31
Accounts payable days		79			82
Working capital	$	176,036		$	127,280
Working capital as a percent of sales (LTM)‡		9.1	%		7.3	%

† 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
(dollars in thousands)


	Year Ended December 31,
	2017		2016
Net Cash Provided by (Used in) Operating Activities:
Net income	$	158,133	$	72,606
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		16,453		12,011
Share-based compensation		9,889		7,669
Loss on extinguishment of debt		1,086		—
Loss on sale or abandonment of property and equipment		998		2,737
Amortization of debt issuance costs		401		343
Amortization of contingent consideration		149		—
Provision for bad debt expense		3,231		3,292
Loss from inventory obsolescence		1,979		1,343
Deferred income taxes, net		(59,535)		13,540
Changes in certain assets and liabilities:
Receivables, net		(37,943)		(19,953)
Inventories, net		(14,901)		1,370
Prepaid expenses and other current assets		8,184		(10,102)
Accounts payable		17,936		(11,698)
Accrued liabilities		7,160		3,633
Other, net		(28)		(6)
Net cash provided by operating activities		113,192		76,785

Cash Flows Provided by (Used in) Investing Activities:
Purchases of property and equipment		(25,308)		(14,156)
Acquisition of businesses		(84,090)		(3,476)
Proceeds from sale of property and equipment		603		718
Other, net		199		113
Net cash used in investing activities		(108,596)		(16,801)

Cash Flows Provided by (Used in) Financing Activities:
Net transfer from Former Parent		—		664
Proceeds from issuance of long-term debt		250,000		—
Repayment of long-term debt		(186,250)		(15,000)
Payment of debt issuance costs		(2,150)		—
Proceeds from revolving credit facility		225,000		—
Repayments of revolving credit facility		(225,000)		—
Taxes withheld and paid on employees' equity awards		(4,764)		(1,825)
Repurchase of shares of common stock		(139,286)		(22,296)
Net cash (used in) provided by financing activities		(82,450)		(38,457)

Cash and Cash Equivalents
(Decrease) increase for the period		(77,854)		21,527
Beginning of year		134,375		112,848
End of year	$	56,521	$	134,375

Supplemental disclosure of noncash investing activities:
Accruals for property and equipment	$	1,123	$	387

TopBuild Corp.

Segment Data (Unaudited)

(dollars in thousands)


	Three Months Ended December 31,								Year Ended December 31,
	2017			2016			Change		2017			2016			Change
Installation
Sales	$	336,188		$	289,244		16.2	%	$	1,281,296		$	1,150,168		11.4	%

Operating profit, as reported	$	42,331		$	28,641				$	109,316		$	97,140
Operating margin, as reported		12.6	%		9.9	%				8.5	%		8.4	%

Significant legal settlement		—			—					30,000			—
Rationalization charges		336			202					1,056			1,211
Operating profit, as adjusted	$	42,667		$	28,843				$	140,372		$	98,351
Operating margin, as adjusted		12.7	%		10.0	%				11.0	%		8.6	%

Distribution
Sales	$	193,306		$	177,404		9.0	%	$	719,759		$	676,672		6.4	%

Operating profit, as reported	$	17,927		$	16,238				$	68,733		$	59,654
Operating margin, as reported		9.3	%		9.2	%				9.5	%		8.8	%

Rationalization charges		—			173					23			256
Operating profit, as adjusted	$	17,927		$	16,411				$	68,756		$	59,910
Operating margin, as adjusted		9.3	%		9.3	%				9.6	%		8.9	%

Total
Sales before eliminations	$	529,494		$	466,648				$	2,001,055		$	1,826,840
Intercompany eliminations		(28,093)			(22,513)					(94,789)			(83,990)
Net sales after eliminations	$	501,401		$	444,135		12.9	%	$	1,906,266		$	1,742,850		9.4	%

Operating profit, as reported - segment	$	60,258		$	44,879				$	178,049		$	156,794
General corporate expense, net		(5,218)			(5,084)					(24,722)			(20,802)
Intercompany eliminations and other adjustments		(5,070)			(3,851)					(16,463)			(14,388)
Operating profit, as reported	$	49,970		$	35,944				$	136,864		$	121,604
Operating margin, as reported		10.0	%		8.1	%				7.2	%		7.0	%

Significant legal settlement		—			—					30,000			—
Rationalization charges†		356			1,049					3,755			3,139
Acquisition related costs		508			69					1,256			124
Operating profit, as adjusted	$	50,834		$	37,062				$	171,875		$	124,867
Operating margin, as adjusted		10.1	%		8.3	%				9.0	%		7.2	%

Share-based compensation ‡		2,415			1,926					9,274			7,669
Depreciation and amortization		4,700			3,088					16,453			12,011
EBITDA, as adjusted	$	57,949		$	42,076				$	197,602		$	144,547

Sales change period over period		57,266								163,416
EBITDA, as adjusted change period over period		15,873								53,055
EBITDA, as adjusted as percentage of sales change		27.7	%							32.5	%

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

‡ Amounts for the twelve month period ending December 31, 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 December 31,						Year Ended December 31,
	2017			2016			2017			2016
Gross Profit and Operating Profit Reconciliations

Net sales	$	501,401		$	444,135		$	1,906,266		$	1,742,850

Gross profit, as reported	$	122,033		$	105,062		$	461,109		$	400,344

Gross profit, as adjusted	$	122,033		$	105,062		$	461,109		$	400,344

Gross margin, as reported		24.3	%		23.7	%		24.2	%		23.0	%
Gross margin, as adjusted		24.3	%		23.7	%		24.2	%		23.0	%

Operating profit, as reported	$	49,970		$	35,944		$	136,864		$	121,604

Significant legal settlement		—			—			30,000			—
Rationalization charges		356			1,049			3,755			3,139
Acquisition related costs		508			69			1,256			124
Operating profit, as adjusted	$	50,834		$	37,062		$	171,875		$	124,867

Operating margin, as reported		10.0	%		8.1	%		7.2	%		7.0	%
Operating margin, as adjusted		10.1	%		8.3	%		9.0	%		7.2	%

Income Per Common Share Reconciliation

Income from continuing operations before income taxes, as reported	$	47,760		$	34,728		$	128,040		$	116,273

Significant legal settlement		—			—			30,000			—
Rationalization charges		356			1,049			3,755			3,139
Acquisition related costs		508			69			1,256			124
Loss on extinguishment of debt		—			—			1,086			—
Income from continuing operations before income taxes, as adjusted		48,624			35,846			164,137			119,536

Tax at 38% rate		(18,477)			(13,621)			(62,372)			(45,424)
Income from continuing operations, as adjusted	$	30,147		$	22,225		$	101,765		$	74,112

Income per common share, as adjusted	$	0.84		$	0.59		$	2.78		$	1.96

Average diluted common shares outstanding		35,772,124			37,644,065			36,572,146			37,867,212

TopBuild Corp.

Same Branch Net Sales and Adjusted EBITDA (Unaudited)

(dollars in thousands)


	Three Months Ended December 31,						Year Ended December 31,
	2017			2016			2017			2016
Net sales
Same branch	$	479,593		$	442,688		$	1,831,641		$	1,740,731
Acquired		21,808			1,447			74,625			2,119
Total	$	501,401		$	444,135		$	1,906,266		$	1,742,850

EBITDA, as adjusted
Same branch	$	55,006		$	41,900		$	187,708		$	144,330
Acquired		2,943			176			9,894			217
Total	$	57,949		$	42,076		$	197,602		$	144,547

Same branch EBITDA, as adjusted as percentage of sales change		35.5	%		24.2	%		47.7	%		29.7	%
Acquired EBITDA, as adjusted as percentage of sales change		13.6	%		12.2	%		13.3	%		10.2	%

TopBuild Corp.

Reconciliation of EBITDA to Net Income (Unaudited)

(dollars in thousands)


	Three Months Ended December 31,				Year Ended December 31,
	2017		2016		2017		2016
Net income, as reported	$	104,991	$	21,307	$	158,133	$	72,606
Adjustments to arrive at EBITDA, as adjusted:
Interest expense and other, net		2,210		1,216		7,738		5,331
Income tax (benefit) expense from continuing operations		(57,231)		13,421		(30,093)		43,667
Depreciation and amortization		4,700		3,088		16,453		12,011
Share-based compensation †		2,415		1,926		9,274		7,669
Significant legal settlement		—		—		30,000		—
Rationalization charges		356		1,049		3,755		3,139
Loss on extinguishment of debt		—		—		1,086		—
Acquisition related costs		508		69		1,256		124
EBITDA, as adjusted	$	57,949	$	42,076	$	197,602	$	144,547

† Amounts for the twelve month period ending December 31, 2017, excludes $0.6 million of share-based compensation included in the line item, rationalization charges.


	Twelve Months Ending December 31, 2018
		Low		High
Estimated net income	$	126.0	$	145.6
Adjustments to arrive at estimated EBITDA, as adjusted:
Interest expense and other, net		13.6		12.0
Income tax expense from continuing operations		46.6		53.8
Depreciation and amortization		21.7		18.5
Share-based compensation		14.1		12.1
Estimated EBITDA, as adjusted	$	222.0	$	242.0