bld_Ex_99

Exhibit 99.1

NYSE:BLD

A leading installer and distributor of insulation and building material products

to the U.S. construction industry.

TopBuild Reports Fourth Quarter and Full Year 2019 Results

Net sales increase 3.6%

Gross margin expands 120 basis points

11.5% operating margin, 11.6% on an adjusted basis, up 110 basis points

Adjusted EBITDA margin expands 110 basis points to 14.0%

$1.36 net income per diluted share, $1.48 on an adjusted basis

Provides 2020 Sales and Adjusted EBITDA Guidance

Fourth Quarter Financial Highlights

(unless otherwise indicated, comparisons are to the quarter ended December 31, 2018)

Net sales increased 3.6% to $662.3 million, driven by increases in price and residential and commercial volume and acquisitions, partially offset by a higher mix of multi-family and smaller, single-family homes which generate lower revenue per unit.

Gross margin expanded 120 basis points to 25.9%.

Operating profit was $76.4 million, compared to $65.2 million. On an adjusted basis, operating profit was $76.6 million, compared to $67.2 million, a 14.1% improvement.

Operating margin was 11.5%. Adjusted operating margin improved 110 basis points to 11.6%.

Net income was $46.0 million, or $1.36 per diluted share, compared to $38.6 million, or $1.10 per diluted share.

Adjusted net income was $50.0 million, or $1.48 per diluted share, compared to $42.2 million, or $1.20 per diluted share.

NYSE:BLD February 25, 2020 topbuild.com

Adjusted EBITDA was $92.5 million, compared to $82.5 million, a 12.2% increase and adjusted EBITDA margin improved 110 basis points to 14.0%. Incremental adjusted EBITDA margin was 44.0%.

At December 31, 2019, the Company had cash and cash equivalents of $184.8 million, availability under its revolving credit facility of $188.6 million for total liquidity of $373.4 million.

Full Year 2019 Financial Highlights

(unless otherwise indicated, comparisons are to twelve months ended December 31, 2018)

Net sales increased 10.1% to $2,624.1 million. On a same branch basis, revenue increased 4.6% to $2,494.5 million.

Gross margin expanded 180 basis points to 26.0%.

Operating profit was $289.5 million, compared to operating profit of $209.0 million. On an adjusted basis, operating profit was $292.7 million, compared to $232.6 million, a 25.8% improvement.

Operating margin was 11.0%, up 220 basis points. Adjusted operating margin improved 140 basis points to 11.2%.

Net income was $191.0 million, or $5.56 per diluted share, compared to $134.8 million, or $3.78 per diluted share. Adjusted net income was $188.9 million, or $5.49 per diluted share, compared to $149.3 million, or $4.19 per diluted share.

Adjusted EBITDA was $359.1 million, compared to $283.4 million, a 26.7% increase and adjusted EBITDA margin improved 180 basis points to 13.7%. Incremental adjusted EBITDA margin was 31.6%.

On a same branch basis, adjusted EBITDA grew 17.9% to $334.1 million and adjusted incremental EBITDA margin was 46.1%.

Acquisitions contributed $129.6 million of revenue. Incremental adjusted EBITDA related to these acquisitions was 19.2%.

NYSE:BLD February 25, 2020 topbuild.com

Operating Segment Highlights ($ in 000s)

(comparisons are to the period ended December 31, 2018)

A screenshot of a cell phone

Description automatically generated

Capital Allocation

Acquisitions

In 2019, the Company completed one acquisition, Viking Insulation, based in Burbank, California. Viking is expected to generate approximately $9.0 million in annual revenue.

In February 2020, the Company acquired Hunter Insulation, an installation company based in Long Island, New York and Cooper Glass, a commercial glass company serving the Memphis market. Combined, these companies are expected to contribute approximately $19 million of annual revenue.

Share Repurchase Program

In 2019, the Company repurchased a total of 1,291,771 shares of its common stock for approximately $110.9 million. This includes the receipt of 392,501 shares related to its $50 million accelerated share repurchase (“ASR”) program announced October 2019. The ASR is expected to settle no later than the end of the first quarter of 2020.

NYSE:BLD February 25, 2020 topbuild.com

2020 Sales and Adjusted EBITDA Guidance (1)

*See table for adjusted EBITDA reconciliation

Assumptions

($ in millions)

Long-Term Targets (3-Years) (1)

(1) This guidance and long-term targets reflect management’s current view of present and future market conditions and are based on assumptions such as housing starts, general and administrative expenses, weighted average diluted shares outstanding 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 2019 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.

NYSE:BLD February 25, 2020 topbuild.com

Conference Call

A conference call to discuss fourth quarter 2019 financial results is scheduled for today, Tuesday, February 25, at 9:00 a.m. Eastern Time. The call may be accessed by dialing (888) 225-2706. The conference call will be webcast simultaneously on the “Investors” section of the Company’s website at www.topbuild.com.

About TopBuild

TopBuild Corp., a Fortune 1000 Company headquartered in Daytona Beach, Florida, is a leading installer and distributor of insulation and building material products to the U.S. construction industry. We provide insulation and building material services nationwide through TruTeam®, which has approximately 200 branches, and through Service Partners® which distributes insulation and building material products from approximately 75 branches. We leverage our national footprint to gain economies of scale while capitalizing on our local market presence to forge strong relationships with our customers. 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 “Investors” at www.topbuild.com.

Safe Harbor Statement

This 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 the proposed accelerated stock repurchase transaction. These forward-looking statements are distinguished by use of words such as “will,” “would,” “anticipate,” “expect,” “believe,” “designed,” “plan,” 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 publicly any forward-looking statements as a result of new information, future events, or otherwise, except as required by applicable law.

Investor Relations and Media Contact

Tabitha Zane

tabitha.zane@topbuild.com
386-763-8801

(tables follow)

NYSE:BLD February 25, 2020 topbuild.com

TopBuild Corp.

Condensed Consolidated Statements of Operations

(in thousands, except share and per common share amounts)


	Three Months Ended December 31,				Year Ended December 31,
	2019		2018		2019		2018
Net sales	$	662,349	$	639,547	$	2,624,121	$	2,384,249
Cost of sales		491,030		481,321		1,942,854		1,808,097
Gross profit		171,319		158,226		681,267		576,152

Selling, general, and administrative expense		94,898		93,065		391,744		367,199
Operating profit		76,421		65,161		289,523		208,953

Other income (expense), net:
Interest expense		(9,083)		(9,661)		(37,823)		(28,687)
Other, net		566		266		2,078		558
Other expense, net		(8,517)		(9,395)		(35,745)		(28,129)
Income before income taxes		67,904		55,766		253,778		180,824

Income tax expense		(21,919)		(17,213)		(62,783)		(46,072)
Net income	$	45,985	$	38,553	$	190,995	$	134,752

Net income per common share:
Basic	$	1.38	$	1.12	$	5.65	$	3.86
Diluted	$	1.36	$	1.10	$	5.56	$	3.78

Weighted average shares outstanding:
Basic		33,297,613		34,436,518		33,806,104		34,921,318
Diluted		33,886,904		35,012,535		34,376,555		35,613,319

NYSE:BLD February 25, 2020 topbuild.com

TopBuild Corp.

Condensed Consolidated Balance Sheets and Other Financial Data

(dollars in thousands)


	As of December 31,
	2019		2018
ASSETS
Current assets:
Cash and cash equivalents	$	184,807	$	100,929
Receivables, net of an allowance for doubtful accounts of $4,854 and $3,676 at December 31, 2019, and December 31, 2018, respectively		428,844		407,106
Inventories, net		149,078		168,977
Prepaid expenses and other current assets		17,098		27,685
Total current assets		779,827		704,697

Right of use assets		87,134		—
Property and equipment, net		178,080		167,961
Goodwill		1,367,918		1,364,016
Other intangible assets, net		181,122		199,387
Deferred tax assets, net		4,259		13,176
Other assets		5,623		5,294
Total assets	$	2,603,963	$	2,454,531

LIABILITIES
Current liabilities:
Accounts payable	$	307,970	$	313,172
Current portion of long-term debt		34,272		26,852
Accrued liabilities		98,418		104,236
Short-term lease liabilities		36,094		—
Total current liabilities		476,754		444,260

Long-term debt		697,955		716,622
Deferred tax liabilities, net		175,263		176,212
Long-term portion of insurance reserves		45,605		43,434
Long-term lease liabilities		54,010		—
Other liabilities		1,487		1,905
Total liabilities		1,451,074		1,382,433

EQUITY		1,152,889		1,072,098
Total liabilities and equity	$	2,603,963	$	2,454,531


	As of December 31,
	2019			2018
Other Financial Data
Receivable days †		53			51
Inventory days †		28			34
Accounts payable days †		80			80
Receivables, net plus inventories, net less accounts payable †	$	269,952		$	262,911
Receivables, net plus inventories, net less accounts payable as a percent of sales (TTM)‡		10.3	%		10.4	%

† Adjusted for remaining acquisition day one balance sheet items.

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

NYSE:BLD February 25, 2020 topbuild.com

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


	Year Ended December 31,
	2019		2018
Cash Flows Provided by (Used in) Operating Activities:
Net income	$	190,995	$	134,752
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		52,700		39,419
Share-based compensation		13,658		11,317
Loss on sale or abandonment of property and equipment		1,399		1,204
Amortization of debt issuance costs		1,558		1,201
Provision for bad debt expense		7,065		3,240
Loss from inventory obsolescence		2,622		2,187
Deferred income taxes, net		8,888		12,936
Change in certain assets and liabilities
Receivables, net		(27,146)		(35,522)
Inventories, net		17,433		(23,297)
Prepaid expenses and other current assets		9,361		(8,360)
Accounts payable		(5,124)		29,687
Accrued liabilities		(2,690)		(660)
Other, net		1,058		(932)
Net cash provided by operating activities		271,777		167,172

Cash Flows Provided by (Used in) Investing Activities:
Purchases of property and equipment		(45,536)		(52,504)
Acquisition of businesses, net of cash acquired of $15,756 in 2018		(6,952)		(500,202)
Proceeds from sale of property and equipment		2,321		849
Other, net		25		38
Net cash used in investing activities		(50,142)		(551,819)

Cash Flows Provided by (Used in) Financing Activities:
Proceeds from issuance of long-term debt		14,989		526,604
Repayment of long-term debt		(27,793)		(18,399)
Payment of debt issuance costs		—		(7,819)
Proceeds from revolving credit facility		—		90,000
Repayment of revolving credit facility		—		(90,000)
Taxes withheld and paid on employees' equity awards		(12,951)		(5,465)
Repurchase of shares of common stock		(110,911)		(65,025)
Payment of contingent consideration		(1,091)		(841)
Net cash (used in) provided by financing activities		(137,757)		429,055

Cash and Cash Equivalents
Increase for the period		83,878		44,408
Beginning of period		100,929		56,521
End of period	$	184,807	$	100,929

Supplemental disclosure of cash paid for:
Interest on long-term debt	$	36,244	$	23,733
Income taxes		43,310		39,010

Supplemental disclosure of noncash activities:
Leased assets obtained in exchange for new operating lease liabilities	$	128,838	$	—
Accruals for property and equipment		542		860

NYSE:BLD February 25, 2020 topbuild.com

TopBuild Corp.

Segment Data

(dollars in thousands)


	Three Months Ended December 31,									Year Ended December 31,
	2019			2018			Change			2019			2018			Change
TruTeam
Sales	$	475,929		$	457,610			4.0	%	$	1,906,730		$	1,680,967			13.4	%

Operating profit, as reported	$	63,661		$	57,016					$	253,230		$	196,986
Operating margin, as reported		13.4	%		12.5	%					13.3	%		11.7	%

Rationalization charges		(24)			216						159			845
Acquisition related costs		177			—						636			—
Operating profit, as adjusted	$	63,814		$	57,232					$	254,025		$	197,831
Operating margin, as adjusted		13.4	%		12.5	%					13.3	%		11.8	%

Service Partners
Sales	$	223,244		$	213,974			4.3	%	$	862,143		$	820,309			5.1	%

Operating profit, as reported	$	25,234		$	21,598					$	90,388		$	78,739
Operating margin, as reported		11.3	%		10.1	%					10.5	%		9.6	%

Rationalization charges		—			—						109			159
Operating profit, as adjusted	$	25,234		$	21,598					$	90,497		$	78,898
Operating margin, as adjusted		11.3	%		10.1	%					10.5	%		9.6	%

Total
Sales before eliminations	$	699,173		$	671,584					$	2,768,873		$	2,501,276
Intercompany eliminations		(36,824)			(32,037)						(144,752)			(117,027)
Net sales after eliminations	$	662,349		$	639,547			3.6	%	$	2,624,121		$	2,384,249			10.1	%

Operating profit, as reported - segments	$	88,895		$	78,614					$	343,618		$	275,725
General corporate expense, net		(6,568)			(7,936)						(30,174)			(45,873)
Intercompany eliminations		(5,906)			(5,517)						(23,921)			(20,899)
Operating profit, as reported	$	76,421		$	65,161					$	289,523		$	208,953
Operating margin, as reported		11.5	%		10.2	%					11.0	%		8.8	%

Rationalization charges †		15			929						1,992			7,736
Acquisition related costs		166			1,066						1,200			15,925
Operating profit, as adjusted	$	76,602		$	67,156					$	292,715		$	232,614
Operating margin, as adjusted		11.6	%		10.5	%					11.2	%		9.8	%

Share-based compensation		2,246			3,072						13,658			11,317
Depreciation and amortization		13,696			12,286						52,700			39,419
EBITDA, as adjusted	$	92,544		$	82,514					$	359,073		$	283,350
EBITDA margin, as adjusted		14.0	%		12.9	%					13.7	%		11.9	%

Sales change period over period		22,802									239,872
EBITDA, as adjusted, change period over period		10,030									75,723
EBITDA, as adjusted, as percentage of sales change		44.0	%								31.6	%

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

NYSE:BLD February 25, 2020 topbuild.com

TopBuild Corp.

Non-GAAP Reconciliations

(in thousands, except share and per common share amounts)


	Three Months Ended December 31,						Year Ended December 31,
	2019			2018			2019			2018
Gross Profit and Operating Profit Reconciliations

Net sales	$	662,349		$	639,547		$	2,624,121		$	2,384,249

Gross profit, as reported	$	171,319		$	158,226		$	681,267		$	576,152

Rationalization charges		—			—			—			176
Gross profit, as adjusted	$	171,319		$	158,226		$	681,267		$	576,328

Gross margin, as reported		25.9	%		24.7	%		26.0	%		24.2	%
Gross margin, as adjusted		25.9	%		24.7	%		26.0	%		24.2	%

Operating profit, as reported	$	76,421		$	65,161		$	289,523		$	208,953

Rationalization charges		15			929			1,992			7,736
Acquisition related costs		166			1,066			1,200			15,925
Operating profit, as adjusted	$	76,602		$	67,156		$	292,715		$	232,614

Operating margin, as reported		11.5	%		10.2	%		11.0	%		8.8	%
Operating margin, as adjusted		11.6	%		10.5	%		11.2	%		9.8	%

Income Per Common Share Reconciliation

Income before income taxes, as reported	$	67,904		$	55,766		$	253,778		$	180,824

Rationalization charges		15			929			1,992			7,736
Acquisition related costs		166			1,066			1,200			15,925
Income before income taxes, as adjusted		68,085			57,761			256,970			204,485

Tax rate at 26.5% and 27.0% for 2019 and 2018, respectively		(18,043)			(15,595)			(68,097)			(55,211)
Income, as adjusted	$	50,042		$	42,166		$	188,873		$	149,274

Income per common share, as adjusted	$	1.48		$	1.20		$	5.49		$	4.19

Weighted average diluted common shares outstanding		33,886,904			35,012,535			34,376,555			35,613,319

NYSE:BLD February 25, 2020 topbuild.com

TopBuild Corp.

Same Branch and Acquisition Net Sales and Adjusted EBITDA

(dollars in thousands)


	Three Months Ended December 31,						Year Ended December 31,
	2019			2018			2019			2018
Net sales
Same branch:
Installation segment	$	473,298		$	457,610		$	1,787,357		$	1,680,967
Distribution segment		223,244			213,974			851,073			820,309
Eliminations		(36,824)			(32,037)			(143,890)			(117,027)
Total same branch		659,718			639,547			2,494,540			2,384,249

Acquisitions (a):
Installation segment	$	2,631		$	—		$	119,373		$	—
Distribution segment		—			—			11,070			—
Eliminations		—			—			(862)			—
Total acquisitions		2,631			—			129,581			—
Total	$	662,349		$	639,547		$	2,624,121		$	2,384,249

EBITDA, as adjusted
Same branch	$	91,781		$	82,514		$	334,146		$	283,350
Acquisitions (a)		763			—			24,927			—
Total	$	92,544		$	82,514		$	359,073		$	283,350

EBITDA, as adjusted, as a percentage of sales
Same branch (b)		13.9	%					13.4	%
Acquisitions (c)		29.0	%					19.2	%
Total (d)		14.0	%		12.9	%		13.7	%		11.9	%

As Adjusted Incremental EBITDA, as a percentage of incremental sales
Same branch (e)		45.9	%					46.1	%
Acquisitions (c)		29.0	%					19.2	%
Total (f)		44.0	%					31.6	%

(a) Represents current year impact of acquisitions in their first twelve months

(b) Same branch EBITDA, as adjusted, as a percentage of same branch sales

(d) Total EBITDA, as adjusted, as a percentage of total sales

(e) Change in same branch EBITDA, as adjusted, as a percentage of change in same branch sales

(f) Change in total EBITDA, as adjusted, as a percentage of change in total sales

NYSE:BLD February 25, 2020 topbuild.com

TopBuild Corp.

Reconciliation of Adjusted EBITDA to Net Income

(dollars in thousands)


	Three Months Ended December 31,				Year Ended December 31,
	2019		2018		2019		2018
Net income, as reported	$	45,985	$	38,553	$	190,995	$	134,752
Adjustments to arrive at EBITDA, as adjusted:
Interest expense and other, net		8,517		9,395		35,745		28,129
Income tax expense		21,919		17,213		62,783		46,072
Depreciation and amortization		13,696		12,286		52,700		39,419
Share-based compensation		2,246		3,072		13,658		11,317
Rationalization charges		15		929		1,992		7,736
Acquisition related costs		166		1,066		1,200		15,925
EBITDA, as adjusted	$	92,544	$	82,514	$	359,073	$	283,350

NYSE:BLD February 25, 2020 topbuild.com

TopBuild Corp.

2020 Estimated Adjusted EBITDA Range

(dollars in millions)


	Twelve Months Ending December 31, 2020
		Low		High
Estimated net income	$	206.5	$	232.0
Adjustments to arrive at estimated EBITDA, as adjusted:
Interest expense and other, net		34.0		31.0
Income tax expense		72.5		81.5
Depreciation and amortization		60.0		56.0
Share-based compensation		14.0		11.5
Estimated EBITDA, as adjusted	$	387.0	$	412.0

NYSE:BLD February 25, 2020 topbuild.com