TopBuild Corp. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Business Combinations (Tables)

Business Combinations (Tables)

12 Months Ended

Dec. 31, 2017

Schedule of revenue and net income since acquisition date included in the Condensed Consolidated Statements of Operations

Revenue and net income since the respective acquisition dates included in our Consolidated Statements of Operations were as follows, in thousands:


	Year ended December 31, 2017
	Net Sales		Net Income
Midwest	$	17,122	$	304
EcoFoam	$	22,315	$	1,747
Superior	$	9,508	$	922
Canyon	$	13,333	$	1,279
All others	$	8,412	$	892

Schedule of pro forma results

Our pro forma results are presented below, in thousands:


	Pro forma for the year ended December 31,
	2017			2016
Net sales	$	1,928,082	$	1,829,026
Net income	$	159,440	$	76,894

Schedule of additional expense included in the pro forma operating profit and net income

The following table details the additional expense included in the unaudited pro forma net income that would have been recorded had the acquisitions taken place on January 1, 2016, in thousands:


	Pro forma for the year ended December 31,
	2017		2016
Amortization of intangible assets	$	1,131	$	3,663
Income tax expense (using normalized 38% ETR)	$	801	$	2,628

Schedule of estimated fair values of the assets acquired and liabilities assumed for the acquisitions

The estimated fair values of the assets acquired and liabilities assumed for the acquisitions, as well as total consideration paid, approximated the following as of December 31, in thousands:


	2017
	Midwest		EcoFoam		Superior		Canyon		All others		Total
Estimated fair values:
Accounts receivable	$	6,576	$	3,819	$	2,012	$	8,222	$	678	$	21,307
Inventories		75		1,119		321		575		141		2,231
Prepaid and other assets		—		27		1		6		6		40
Property and equipment		655		1,544		361		460		357		3,377
Intangible assets		2,740		6,700		5,280		15,220		3,640		33,580
Goodwill		3,538		10,796		3,662		10,095		4,037		32,128
Accounts payable		(1,359)		(1,378)		(681)		(163)		(26)		(3,607)
Accrued liabilities		—		(302)		(4)		—		—		(306)
Net assets acquired	$	12,225	$	22,325	$	10,952	$	34,415	$	8,833	$	88,750

Schedule of fair value of consideration transferred

The following table details the fair value of consideration transferred as of December 31, in thousands:


	2017
	Midwest		EcoFoam		Superior		Canyon		All others		Total
Fair value of consideration:
Cash	$	12,225	$	20,215	$	10,952	$	31,865	$	8,833	$	84,090
Deferred consideration		—		—		—		2,550		—		2,550
Contingent consideration		—		2,110		—		—		—		2,110
Total consideration transferred	$	12,225	$	22,325	$	10,952	$	34,415	$	8,833	$	88,750

Schedule of estimates of acquired intangible assets related to the acquisitions

Estimates of acquired intangible assets related to the acquisitions are as follows, as of December 31, in thousands:


	2017
	Estimated Fair Value		Weighted Average Estimated Useful Life (Years)
Fair value of intangibles:
Customer relationships	$	26,170		10
Trademarks and trade names		1,780		10
Non-competition agreements		5,630		5
Total intangible assets	$	33,580		9

Schedule of fair value of contingent consideration

The following table presents the fair value of contingent consideration as of December 31, 2017, in thousands:


	Fair Value of Contingent Consideration Recognized at Acquisition Date		Settlement of Contingent Consideration		Adjustment to Contingent Consideration Charged to Expense		Liability Balance for Contingent Consideration
EcoFoam	$	2,110	$	—	$	149	$	2,259