Exhibit 99.1

 

LOGO

INSTALLED BUILDING PRODUCTS REPORTS RECORD RESULTS

FOR FOURTH QUARTER AND FISCAL YEAR 2018

-     Record Annual Revenues and Earnings

-     Strong Price / Mix Growth in Fourth Quarter

-     Completed 12 Acquisitions Representing Approximately $83 Million of Annual Revenues

-     Returned $89.4 Million of Capital to Shareholders Through Repurchase Program During 2018

Columbus, Ohio, February 28, 2019 Installed Building Products, Inc. (the “Company” or “IBP”) (NYSE:IBP), an industry-leading installer of insulation and complementary building products, today announced record results for the fourth quarter and fiscal year ended December 31, 2018.

Fourth Quarter 2018 Highlights

 

   

Net revenue increased 17.8% to a record $353.1 million

   

Net income increased 52.6% to a record $16.5 million

   

Adjusted EBITDA* increased 20.5% to $43.6 million

   

Net income per diluted share increased 58.8% to $0.54 per diluted share

   

Adjusted net income per diluted share increased 38.5% to $0.72 per diluted share*

   

In October 2018, acquired Advanced Fiber Technology, a manufacturer of cellulose insulation and industrial fibers in Bucyrus, Ohio with annual revenues of approximately $18.0 million

   

In December 2018, acquired Carolina Glass & Mirror, Inc., a commercial and residential glass applications installer in North Carolina with annual revenues of $6.2 million

   

In December 2018, acquired Hamilton Benchmark Inc., a commercial fire-stopping solutions installer in Wisconsin with annual revenues of $1.3 million

   

During the fourth quarter, IBP repurchased 1.3 million shares of its common stock, for a total price of $46.5 million

“IBP ended the year with strong operating and financial momentum, and I am encouraged by our fourth quarter performance,” stated Jeff Edwards, Chairman and Chief Executive Officer. “Throughout the year we worked with our suppliers and customers to successfully manage the atypical pricing environment. During the 2018 fourth quarter, price / mix contributed 7.8% of sales growth during the quarter, which combined with strong operating leverage helped drive record fourth quarter net income.”

“IBP’s record results would not be possible if it wasn’t for the dedication and commitment of our 7,700 employees across the United States. We experienced improved employee retention rates in 2018 as a direct result of our financial wellness program, longevity stock program, and various community engagement programs. In addition, IBP returned $89.4 million of capital back to shareholders through our stock repurchase program.”

“For 2018, sales increased 18.0%, outpacing the 3.4% year-over-year growth in total U.S. housing completions. This performance is a direct result of our ability to grow our core insulation installation business, while diversifying our installation services to new geographies, end markets, and product offerings. During 2018, IBP completed 12 acquisitions representing approximately $83 million of annual revenues. We also saw an 11.5% increase in sales of our large commercial construction installation business in 2018. As our financial results show, IBP continues to build upon its national platform of installation services and I am excited by future opportunities to grow and create greater value for our shareholders,” concluded Mr. Edwards.

 

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Fourth Quarter 2018 Results Overview

For the fourth quarter of 2018, net revenue was $353.1 million, an increase of 17.8% from $299.9 million in the fourth quarter of 2017. On a same branch basis, net revenue improved 11.1% from the prior year quarter. Residential same branch sales growth was 10.9% in the quarter, with more than 70% of the increase attributable to price gains and more favorable customer and product mix with the remainder attributable to the growth in the number of completed jobs. Same branch single-family sales grew 8.6% during the fourth quarter, compared to a decline in U.S. single-family housing completions of -1.1%, while our large commercial construction end-market had organic growth of 13.0%.

Gross profit improved 21.3% to $98.6 million from $81.3 million in the prior year quarter. Adjusted gross profit* as a percent of total revenue was 27.9%, which adjusts for the Company’s share-based compensation expense, branch start-up costs and gain on a facility disposal, compared to 28.1% for the same period last year.

Selling and administrative expense, as a percentage of net revenue, was 18.7% compared to 19.2% in the prior year quarter. Adjusted selling and administrative expense*, as a percentage of net revenue, improved 50 basis points to 18.0% from 18.5%. Higher net revenue in the 2018 fourth quarter more than offset the higher costs needed to support the Company’s growth.

Net income was $16.5 million, or $0.54 per diluted share, compared to $10.8 million, or $0.34 per diluted share, in the prior year quarter. Adjusted net income* was $21.8 million, or $0.72 per diluted share, compared to $16.6 million, or $0.52 per diluted share in the prior year quarter. Adjusted net income adjusts for the impact of non-core items in both periods and includes an addback for non-cash amortization expense related to acquisitions.

Adjusted EBITDA* was $43.6 million, a 20.5% increase from $36.2 million in the prior year quarter, largely due to higher sales and better selling and administrative leverage. Adjusted EBITDA, as a percentage of net revenue, was 12.4% compared to 12.1% in the prior year quarter. The incremental Adjusted EBITDA margin* on same branch revenue growth was 15.5% (please refer to the Supplementary Tables at the end of this Press Release).

Full Year 2018 Results Overview

For the year ended December 31, 2018, net revenue was $1,336.4 million, an increase of 18.0% from $1,132.9 million in 2017. On a same branch basis, net revenue improved 11.5% from the prior year, with more than half of the increase attributable to growth in the number of completed jobs and the remainder achieved through price gains and more favorable customer and product mix. Same branch residential revenue increased 11.4% as compared to a 3.4% increase in total U.S. housing completions.

Gross profit improved 14.7% to $371.6 million from $324.0 million in the prior year. Gross margin was 27.8% compared to 28.6% in the prior year. Adjusted gross profit, adjusted for the Company’s share-based compensation expense, financial wellness program, branch start-up costs and gain on a facility disposal, improved 14.0% to $373.2 million for the full year.

Selling and administrative expense, as a percentage of net revenue, was 18.9% compared to 19.7% in the prior year. Adjusted selling and administrative expense, as a percentage of net revenue, improved 80 basis points to 18.1% from 18.9%.

 

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Net income was $54.7 million, or $1.75 per diluted share, compared to $41.1 million, or $1.30 per diluted share in the prior year. Adjusted net income was $83.5 million, or $2.67 per diluted share, compared to $65.0 million, or $2.05 per diluted share in the prior year. Adjusted net income adjusts for the impact of non-core items in both periods, includes an addback for non-cash amortization expense related to acquisitions, and a release of the Company’s deferred tax liability as a result of the Tax Cuts and Jobs Act.

For the full year of 2018, adjusted EBITDA was $164.4 million, a 16.5% increase from $141.1 million in the prior year. Adjusted EBITDA, as a percentage of net revenue was 12.3%, compared to 12.5% in the prior year. Operating income was $93.2 million, a 25.5% increase from $74.3 million in the prior year. The incremental Adjusted EBITDA margin on same branch revenue growth was 11.9% (please refer to the Supplementary Tables at the end of this Press Release).

Net cash from operating activities was $96.6 million, an increase of 40.5% from $68.8 million in the prior year.

Conference Call and Webcast

The Company will host a conference call and webcast on February 28, 2019 at 10:00 a.m. Eastern Time to discuss these results. To participate in the call, please dial 877-407-0792 (domestic) or 201-689-8263 (international). The live webcast will be available at www.installedbuildingproducts.com in the investor relations section. A replay of the conference call will be available through March 28, 2019, by dialing 844-512-2921 (domestic) or 412-317-6671 (international) and entering the passcode 13686963.

About Installed Building Products

Installed Building Products, Inc. is one of the nation’s largest insulation installers for the residential new construction market and is also a diversified installer of complementary building products, including waterproofing, fire-stopping and fireproofing, garage doors, rain gutters, window blinds, shower doors, closet shelving and mirrors, throughout the United States. The Company manages all aspects of the installation process for its customers, including direct purchases of materials from national manufacturers, supply of materials to job sites and quality installation. The Company offers its portfolio of services for new and existing single-family and multi-family residential and commercial building projects from its national network of branch locations.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws, including with respect to our financial and business model, the demand for our services and product offerings, expansion of our national footprint and end markets, diversification of our products, our ability to capitalize on the new home and commercial construction recovery, our ability to grow and strengthen our market position, our ability to pursue and integrate value-enhancing acquisitions, our ability to improve sales and profitability, expectations for demand for our services and our earnings in 2019. Forward-looking statements may generally be identified by the use of words such as “anticipate,” “believe,” “expect,” “intends,” “plan,” and “will” or, in each case, their negative, or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Any forward-looking statements that we make herein and in any future reports and statements are not guarantees of future performance, and actual

 

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results may differ materially from those expressed in or suggested by such forward-looking statements as a result of various factors, including, without limitation, general economic and industry conditions, the material price environment, and the factors discussed in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, as the same may be updated from time to time in our subsequent filings with the Securities and Exchange Commission. Any forward-looking statement made by the Company in this press release speaks only as of the date hereof. New risks and uncertainties arise from time to time, and it is impossible for the Company to predict these events or how they may affect it. The Company has no obligation, and does not intend, to update any forward-looking statements after the date hereof, except as required by federal securities laws.

*Use of Non-GAAP Financial Measures

In addition to the financial measures prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), this press release contains the non-GAAP financial measures of Adjusted EBITDA, Adjusted EBITDA margin (i.e., Adjusted EBITDA divided by net revenue), Adjusted Net Income, Adjusted Net Income per diluted share, Adjusted Gross Profit and Adjusted Selling and Administrative expense. The reasons for the use of these measures, reconciliations of Adjusted EBITDA, Adjusted Net Income, Adjusted Net Income per diluted share, Adjusted Gross Profit, and Adjusted Selling and Administrative expense to the most directly comparable GAAP measures and other information relating to these measures are included below following the unaudited condensed consolidated financial statements. Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for IBP’s financial results prepared in accordance with GAAP.

 

4


INSTALLED BUILDING PRODUCTS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

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

 

     Three months ended December 31,   Twelve months ended December 31,
     2018   2017   2018   2017

Net revenue

    $ 353,121      $ 299,869      $ 1,336,432      $ 1,132,927  

Cost of sales

     254,484       218,524       964,841       808,901  
  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

     98,637       81,345       371,591       324,026  

Operating expenses

        

Selling

     17,805       15,909       67,105       58,450  

Administrative

     48,340       41,774       185,850       164,453  

Amortization

     5,740       7,067       25,419       26,857  
  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

     26,752       16,595       93,217       74,266  

Other expense

        

Interest expense, net

     5,483       5,925       20,496       17,381  

Other

     118       699       535       1,065  
  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

     21,151       9,971       72,186       55,820  

Income tax provision (benefit)

     4,676       (822     17,438       14,680  
  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

    $ 16,475      $ 10,793      $ 54,748      $ 41,140  
  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive (loss) income, net of tax:

        

Unrealized (loss) gain on cash flow hedge, net of tax benefit (provision) of $1,106 and $(236) for the three months ended December 31, 2018 and 2017, respectively, and $284 and $(206) for the twelve months ended December 31, 2018 and 2017, respectively

     (3,503     552       (1,050     507  
  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive income

    $ 12,972      $ 11,345      $ 53,698      $ 41,647  
  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic net income per share

    $ 0.54      $ 0.34      $ 1.76      $ 1.30  
  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted net income per share

    $ 0.54      $ 0.34      $ 1.75      $ 1.30  
  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

        

Basic

     30,321,803       31,659,710       31,107,231       31,639,283  

Diluted

     30,396,412       31,860,978       31,229,558       31,756,363  

 

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INSTALLED BUILDING PRODUCTS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

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

 

      December 31,     December 31, 
     2018   2017

ASSETS

    

Cash and cash equivalents

    $ 90,442      $ 62,510  

Investments

     10,060       30,053  

Accounts receivable (less allowance for doubtful accounts of $5,085 and $4,805 at December 31, 2018 and 2017, respectively)

     214,121       180,725  

Inventories

     61,162       48,346  

Other current assets

     35,760       33,308  
  

 

 

 

 

 

 

 

Total current assets

     411,545       354,942  

Property and equipment, net

     90,117       81,075  

Non-current assets

    

Goodwill

     173,049       155,466  

Intangibles, net

     149,790       137,991  

Other non-current assets

     10,157       9,272  
  

 

 

 

 

 

 

 

Total non-current assets

     332,996       302,729  
  

 

 

 

 

 

 

 

Total assets

    $ 834,658      $ 738,746  
  

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

    

Current liabilities

    

Current maturities of long-term debt

    $ 22,642      $ 16,650  

Current maturities of capital lease obligations

     4,806       5,666  

Accounts payable

     96,949       87,425  

Accrued compensation

     27,923       25,399  

Other current liabilities

     29,366       24,666  
  

 

 

 

 

 

 

 

Total current liabilities

     181,686       159,806  

Long-term debt

     432,182       330,927  

Capital lease obligations, less current maturities

     3,824       6,479  

Deferred income taxes

     6,695       6,444  

Other long-term liabilities

     27,773       24,562  
  

 

 

 

 

 

 

 

Total liabilities

     652,160       528,218  

Commitments and contingencies

    

Stockholders’ equity

    

Preferred stock; $0.01 par value: 5,000,000 authorized and 0 shares issued and outstanding at December 31, 2018 and 2017, respectively

     -       -  

Common stock; $0.01 par value: 100,000,000 authorized, 32,723,972 and 32,524,934 issued and 29,915,611 and 31,862,146 shares outstanding at December 31, 2018 and 2017, respectively

     327       325  

Additional paid in capital

     181,815       174,043  

Retained earnings

     105,212       48,434  

Treasury stock; at cost: 2,808,361 and 662,788 shares at December 31, 2018 and 2017, respectively

     (104,425     (12,781

Accumulated other comprehensive income

     (431     507  
  

 

 

 

 

 

 

 

Total stockholders’ equity

     182,498       210,528  
  

 

 

 

 

 

 

 

Total liabilities and stockholders’ equity

    $ 834,658      $ 738,746  
  

 

 

 

 

 

 

 

 

6


INSTALLED BUILDING PRODUCTS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)

 

     Twelve months ended December 31,
     2018   2017

Net income

   $ 54,748     $ 41,140  

Adjustments to reconcile net income to net cash provided by operating activities

    

Depreciation and amortization of property and equipment

     33,306       28,285  

Amortization of intangibles

     25,419       26,857  

Amortization of deferred financing costs and debt discount

     1,164       1,093  

Provision for doubtful accounts

     2,630       2,834  

Write-off of debt issuance costs

     1,164       2,113  

Gain on sale of property and equipment

     (1,098     (492

Noncash stock compensation

     7,839       6,592  

Deferred income taxes

     470       (6,160

Changes in assets and liabilities, excluding effects of acquisitions

    

Accounts receivable

     (30,166     (19,955

Inventories

     (15,717     (3,667

Other assets

     (4,552     (4,602

Accounts payable

     8,146       6,303  

Income taxes receivable / payable

     10,273       (18,605

Other liabilities

     3,007       7,036  
  

 

 

 

 

 

 

 

Net cash provided by operating activities

     96,633       68,772  
  

 

 

 

 

 

 

 

Cash flows from investing activities

    

Purchases of investments

     (22,818     (30,194

Maturities of short term investments

     42,782       -  

Purchases of property and equipment

     (35,232     (31,668

Acquisitions of businesses, net of cash acquired of $0 and $247, respectively

     (57,740     (137,120

Proceeds from sale of property and equipment

     1,958       959  

Other

     (3,019     (2,420
  

 

 

 

 

 

 

 

Net cash used in investing activities

     (74,069     (200,443
  

 

 

 

 

 

 

 

Cash flows from financing activities

    

Proceeds from term loan under credit agreement applicable to respective period

     100,000       300,000  

Payments on term loan under credit agreement applicable to respective period

     (2,750     (97,750

Proceeds from delayed draw term loan under credit agreement applicable to respective period

     -       112,500  

Payments on delayed draw term loan under credit agreement applicable to respective period

     -       (125,000

Proceeds from vehicle and equipment notes payable

     25,443       22,460  

Debt issuance costs

     (1,992     (8,281

Principal payments on long-term debt

     (14,130     (10,002

Principal payments on capital lease obligations

     (5,604     (7,314

Acquisition-related obligations

     (3,954     (4,464

Repurchase of common stock

     (89,363     -  

Surrender of common stock awards by employees

     (2,282     (562

Purchase of remaining interest in subsidiary

     -       (1,888
  

 

 

 

 

 

 

 

Net cash provided by financing activities

     5,368       179,699  
  

 

 

 

 

 

 

 

Net change in cash and cash equivalents

     27,932       48,028  

Cash and cash equivalents at beginning of period

     62,510       14,482  
  

 

 

 

 

 

 

 

Cash and cash equivalents at end of period

   $ 90,442     $ 62,510  
  

 

 

 

 

 

 

 

Supplemental disclosures of cash flow information

    

Net cash paid during the period for:

    

Interest

   $ 20,075     $ 13,758  

Income taxes, net of refunds

     -       38,887  

Supplemental disclosure of noncash investing and financing activities

    

Common stock issued for acquisition of business

     -       10,859  

Vehicles capitalized under capital leases and related lease obligations

     2,208       4,440  

Seller obligations in connection with acquisition of businesses

     7,540       5,128  

Unpaid purchases of property and equipment included in accounts payable

     1,773       2,003  

 

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Reconciliation of Non-GAAP Financial Measures

Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, Adjusted Gross Profit and Adjusted Selling and Administrative Expense measure performance by adjusting EBITDA, GAAP net income, gross profit and selling and administrative expense, respectively, for certain income or expense items that are not considered part of our core operations. We believe that the presentation of these measures provides useful information to investors regarding our results of operations because it assists both investors and us in analyzing and benchmarking the performance and value of our business.

We believe the Adjusted EBITDA measure is useful to investors and us as a measure of comparative operating performance from period to period as it measures our changes in pricing decisions, cost controls and other factors that impact operating performance, and removes the effect of our capital structure (primarily interest expense), asset base (primarily depreciation and amortization), items outside our control (primarily income taxes) and the volatility related to the timing and extent of other activities such as asset impairments and non-core income and expenses. Accordingly, we believe that this measure is useful for comparing general operating performance from period to period. In addition, we use various EBITDA-based measures in determining the achievement of awards under certain of our incentive compensation programs. Other companies may define Adjusted EBITDA differently and, as a result, our measure may not be directly comparable to measures of other companies. In addition, Adjusted EBITDA may be defined differently for purposes of covenants contained in our revolving credit facility or any future facility.

Although we use the Adjusted EBITDA measure to assess the performance of our business, the use of the measure is limited because it does not include certain material expenses, such as interest and taxes, necessary to operate our business. Adjusted EBITDA should be considered in addition to, and not as a substitute for, GAAP net income as a measure of performance. Our presentation of this measure should not be construed as an indication that our future results will be unaffected by unusual or non-recurring items. This measure has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Because of these limitations, this measure is not intended as an alternative to net income as an indicator of our operating performance, as an alternative to any other measure of performance in conformity with GAAP or as an alternative to cash flow provided by operating activities as a measure of liquidity. You should therefore not place undue reliance on this measure or ratios calculated using this measure.

We also believe the Adjusted Net Income measure is useful to investors and us as a measure of comparative operating performance from period to period as it measures our changes in pricing decisions, cost controls and other factors that impact operating performance, and removes the effect of certain non-core items such as discontinued operations, acquisition related expenses, amortization expense, the tax impact of these certain non-core items, and the volatility related to the timing and extent of other activities such as asset impairments and non-core income and expenses. To make the financial presentation more consistent with other public building products companies, beginning in the fourth quarter 2016 we included an addback for non-cash amortization expense related to acquisitions. Accordingly, we believe that this measure is useful for comparing general operating performance from period to period. Other companies may define Adjusted Net Income differently and, as a result, our measure may not be directly comparable to measures of other companies. In addition, Adjusted Net Income may be defined differently for purposes of covenants contained in our revolving credit facility or any future facility.

 

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INSTALLED BUILDING PRODUCTS, INC.

RECONCILIATION OF GAAP TO NON-GAAP MEASURES

ADJUSTED NET INCOME CALCULATIONS

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

The table below reconciles Adjusted Net Income to the most directly comparable GAAP financial measure, net income, for the periods presented therein.

Per share figures may reflect rounding adjustments and consequently totals may not appear to sum.

 

     Three months ended December 31,   Twelve months ended December 31,
     2018   2017   2018   2017

Net income, as reported

      $ 16,475      $ 10,793      $ 54,748      $ 41,140

Adjustments for adjusted net income:

                

Writeoff of capitalized loan costs

       -       1,791       1,164       2,113

Share based compensation expense

       1,756       1,842       7,846       6,591

Acquisition related expenses

       800       928       2,674       3,201

Financial Wellness Program 1

       -       2,206       604       2,206

Branch start-up costs 2

       214       -       843       -

Retirement expense

       -       -       824       -

Legal settlement

       200       -       990       -

Gain on sale of assets

       (466 )       -       (831 )       -

Amortization expense 3

       5,740       7,067       25,419       26,857

Tax impact of adjusted items at normalized tax rate 4

       (2,086 )       (4,648 )       (10,002 )       (13,765 )

2017 Tax Cuts and Jobs Act - Release of deferred tax liability 5

       (810 )       (3,386 )       (810 )       (3,386 )
    

 

 

     

 

 

     

 

 

     

 

 

 

Adjusted net income

      $ 21,823      $ 16,594      $ 83,469      $ 64,958
    

 

 

     

 

 

     

 

 

     

 

 

 

Weighted average shares outstanding (diluted)

       30,396,412       31,860,978       31,229,558       31,756,363

Diluted net income per share, as reported

      $ 0.54      $ 0.34      $ 1.75      $ 1.30

Adjustments for adjusted net income, net of tax impact, per diluted share 6

       0.18       0.18       0.92       0.75
    

 

 

     

 

 

     

 

 

     

 

 

 

Diluted adjusted net income per share

      $ 0.72      $ 0.52      $ 2.67      $ 2.05
    

 

 

     

 

 

     

 

 

     

 

 

 

1 Employer match upon completion of the program, net of waived executive bonuses

2 Addback of costs related to organic branch expansion for Alpha locations

3 Addback of all non-cash amortization resulting from business combinations

4 Normalized effective tax rate of 25.3% applied to 2018 period, normalized rate of 33.6% applied to 2017 period

5 Tax impacts on deferred tax and uncertain tax positions recorded as a result of the 2017 Tax Cuts and Jobs Act

6 Includes adjustments related to the items noted above, net of tax

 

9


INSTALLED BUILDING PRODUCTS, INC.

RECONCILIATION OF GAAP TO NON-GAAP MEASURES

ADJUSTED GROSS PROFIT CALCULATIONS

(unaudited, in thousands)

 

     Three months ended December 31,    Twelve months ended December 31,
     2018    2017    2018    2017

Gross profit

     $ 98,637         $ 81,345         $ 371,591         $ 324,026   

Share based compensation expense

     96         458         846         965   

Financial Wellness Program 1

            2,412         711         2,412   

Branch start-up costs

     214                843          

Gain on sale of assets

     (466)               (831)         
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Adjusted gross profit

     $ 98,481         $ 84,215         $ 373,160         $ 327,403   
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Adjusted gross profit - % Total Revenue

     27.9%         28.1%         27.9%         28.9%   

1 Employer match upon completion of the program, partially offset by waived executive bonuses (see below Adjusted Selling & Administrative)

INSTALLED BUILDING PRODUCTS, INC.

RECONCILIATION OF GAAP TO NON-GAAP MEASURES

ADJUSTED SELLING AND ADMINISTRATIVE EXPENSE CALCULATIONS

(unaudited, in thousands)

 

     Three months ended December 31,    Twelve months ended December 31,
     2018    2017    2018    2017

Selling expense

     $ 17,805         $ 15,909         $ 67,105         $ 58,450   

Administrative expense

     48,340         41,774         185,850         164,453   
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Selling and Administrative

     $ 66,145         $ 57,683         $ 252,955         $ 222,903   
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Share based compensation expense

     1,660         1,384         7,000         5,626   

Acquisition related expenses

     800         928         2,674         3,201   

Financial Wellness Program 1

            (206)        (107)        (206)  

Retirement expense

                   824          

Legal settlement

     200                990          
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Adjusted Selling and Administrative

     $ 63,485         $ 55,577         $ 241,574         $ 214,282   
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Adj. Selling and Administrative - % Total Revenue

     18.0%         18.5%         18.1%         18.9%   

1 Employer match upon completion of the program, net of waived executive bonuses

 

10


The table below reconciles Adjusted EBITDA to the most directly comparable GAAP financial measure, net income, for the periods presented therein.

RECONCILIATION OF GAAP TO NON-GAAP MEASURES

ADJUSTED EBITDA CALCULATIONS

(unaudited, in thousands)

 

     Three months ended December 31,   Twelve months ended December 31,
     2018   2017   2018   2017

Adjusted EBITDA:

        

Net income (GAAP)

     $ 16,475       $ 10,793       $ 54,748       $ 41,140  

Interest expense

     5,483       5,925       20,496       17,381  

Provision for income taxes

     4,676       (822     17,438       14,680  

Depreciation and amortization

     14,480       14,619       58,725       55,141  
  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

     41,114       30,515       151,407       128,342  
  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition related expenses

     800       928       2,674       3,201  

Share based compensation expense

     1,756       1,842       7,846       6,591  

Financial Wellness Program

     -       2,206       604       2,206  

Write-off of uncertain tax position

     -       713       -       713  

Branch start-up costs

     214       -       843       -  

Retirement expense

     -       -       824       -  

Legal settlement

     200       -       990       -  

Gain on sale of assets

     (466     -       (831     -  
  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

     $     43,618       $     36,204       $     164,357       $     141,053  
  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA margin

     12.4%       12.1%       12.3%       12.5%  

 

11


INSTALLED BUILDING PRODUCTS, INC.

SUPPLEMENTARY TABLE

(unaudited)

 

          Three months ended December 31,                   Twelve months ended December 31,      
    2018     2017     2018     2017  

Period-over-period Growth

       

Sales Growth

    17.8%       28.2%       18.0%       31.3%  

Same Branch Sales Growth

    11.1%       9.4%       11.5%       9.8%  

Single-Family Sales Growth

    16.6%       18.2%       20.0%       17.6%  

Single-Family Same Branch Sales Growth

    8.6%       9.8%       12.1%       7.9%  

Residential Sales Growth

    18.1%       21.3%       18.4%       24.6%  

Residential Same Branch Sales Growth

    10.9%       11.1%       11.4%       11.3%  

U.S. Housing Market1

       

Total Completions Growth

    -5.3%       5.0%       3.4%       8.8%  

Single-Family Completions Growth

    -1.1%       5.4%       6.1%       7.7%  

Same Branch Sales Growth 2

       

Volume Growth

    3.1%       5.9%       6.1%       5.8%  

Price/Mix Growth

    7.8%       3.5%       5.4%       4.0%  

Alpha Sales Growth

    13.0%       N/A       11.5%       N/A  

1 U.S. Census Bureau data, as revised

2 Same branch volume and price/mix growth excludes Alpha sales growth

INSTALLED BUILDING PRODUCTS, INC.

INCREMENTAL REVENUE AND ADJUSTED EBITDA MARGINS

(unaudited, in thousands)

 

             Three months ended December 31,                    Twelve months ended December 31,        
     2018    % Total    2017    % Total    2018    % Total    2017    % Total

Revenue Increase

                       

Same Branch

     $ 33,276        62.5%        $ 21,959        33.3%        $ 129,969        63.9%        $ 84,245        31.2%  

Acquired

     19,976        37.5%        43,933        66.7%        73,536        36.1%        185,701        68.8%  
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Total

     $ 53,252        100.0%        $ 65,892        100.0%        $ 203,505        100.0%        $ 269,946        100.0%  
          Adj EBITDA
    Contribution    
        Adj EBITDA
    Contribution    
        Adj EBITDA
    Contribution    
        Adj EBITDA
    Contribution    

Adjusted EBITDA

                    

Same Branch

     $     5,152        15.5%        $     1,849        8.4%        $     15,434        11.9%        $     11,598        13.8%  

Acquired

     2,262        11.3%        4,558        10.4%        7,870        10.7%        24,627        13.3%  
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Total

     $ 7,414        13.9%        $ 6,407        9.7%        $ 23,304        11.5%        $ 36,225        13.4%  

Source: Installed Building Products, Inc.

Contact Information:

Investor Relations:

614-221-9944

investorrelations@installed.net

 

12

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