EX-99.1 2 ibp-q32023earningsrelease.htm EX-99.1 Document
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INSTALLED BUILDING PRODUCTS REPORTS
THIRD QUARTER 2023 RESULTS;
DECLARES REGULAR QUARTERLY CASH DIVIDEND

Columbus, Ohio, November 8, 2023, Installed Building Products, Inc. (the "Company" or "IBP") (NYSE: IBP), an industry-leading installer of insulation and complementary building products, today announced results for the third quarter ended September 30, 2023.
Third Quarter 2023 Highlights (Comparisons are to Prior Year Period)
Net revenue decreased 1.8% to $706.5 million
Installation revenue decreased 1.7% to $661.2 million, as softer single-family sales were partially offset by multi-family and commercial sales growth, including incremental sales from IBP's recent acquisitions
Other revenue, which includes IBP’s manufacturing and distribution operations, decreased slightly to $45.3 million from $46.2 million
Net income increased 11.5% to a third quarter record of $68.0 million
Adjusted EBITDA* increased to a record of $130.5 million
Net income per diluted share increased 12.7% to a third quarter record of $2.40
Adjusted net income per diluted share* increased 11.2% to a record of $2.79
At September 30, 2023, IBP had $339.8 million in cash and cash equivalents
Completed the repricing of its Term Loan B facility, reducing the borrowing cost by 25 basis points
Published the 2023 annual Environmental, Social and Governance ("ESG") report highlighting the positive impact the Company is making for all stakeholders
Announced retirement of Jay P. Elliott, IBP's Chief Operating Officer, effective December 31, 2023 and the Board of Directors named Brad A. Wheeler, current Regional President as his successor, effective January 1, 2024
Declared third quarter dividend of $0.33 per share which was paid to shareholders on September 30, 2023
Recent Developments
IBP’s Board of Directors declared the fourth quarter regular cash dividend of $0.33 per share
“Our third quarter and year-to-date financial results reflect the continued benefits of our product, end-market and geographic diversification strategies, as softer single-family sales were partially offset by the continuation of robust sales growth in our multi-family end market. While we expect interest rate volatility to exacerbate cyclicality in the housing industry, we believe the long-term opportunities in our residential and commercial end markets remain attractive and as of the end of the third quarter, our multi-family revenue is supported by a stable backlog,” stated Jeff Edwards, Chairman and Chief Executive Officer.
“We also continue to prioritize the value of our services over volume, which drove strong margins during the quarter. As a result, we achieved record quarterly net profit margin and adjusted EBITDA margin for the three months ended September 30, 2023. With our strong balance sheet and asset light business model, we continue to pursue growth through acquisitions, while distributing cash dividends, and opportunistically repurchasing our common stock,” continued Mr. Edwards.
“I am proud of our team’s continued hard work and dedication throughout a rapidly changing economic backdrop for the housing industry. Our focus remains steadfast and we continue to advance toward our goals with the third annual ESG report highlighting a core business value of ‘doing the right thing’ for our employees, customers, communities, and shareholders. I believe our success in 2023, and throughout IBP’s history, demonstrates that ‘doing the right thing’ creates significant value for our stakeholders,” concluded Mr. Edwards.
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Acquisition Update
IBP continues to prioritize profitable growth through its proven strategy of acquiring well-run installers of insulation and complementary building products. To date in 2023, IBP has acquired approximately $58 million of annual revenue. We currently anticipate that certain acquisition targets may be delayed to the first quarter of 2024, which would result in acquired revenue for 2023 being less than our annual goal of $100 million.
During the 2023 third quarter and in October 2023, IBP completed the following acquisitions:
In August 2023, IBP acquired Interior 2000 Products, LLC, a Virginia-based installer of shower, shelving, and mirror products, as well as fireplaces into new and existing residential and commercial construction projects with annual revenue of approximately $6 million.
In August 2023, IBP acquired R-Pro Select, LLC, a North Carolina-based residential installer of fiberglass, spray foam, cellulose insulation, and fireplaces with annual revenue of approximately $2 million.
In October 2023, IBP acquired Interstate Spray Foam, LLC, a North Dakota-based installer of fiberglass and spray foam insulation with multifamily, residential and commercial customers and annual revenue of approximately $2 million.
2023 Fourth Quarter Cash Dividend
IBP’s Board of Directors has approved the Company’s quarterly cash dividend of $0.33 per share, payable on December 31, 2023, to stockholders of record on December 15, 2023. The fourth quarter regular cash dividend represents a 5% increase from last year’s fourth quarter cash dividend payment.
Third Quarter 2023 Results Overview
For the third quarter of 2023, net revenue was $706.5 million, a decrease of 1.8% from $719.1 million for the third quarter of 2022. On a consolidated same branch basis, net revenue declined 5.2% from the prior year quarter, which was primarily attributable to a 10.8% decline in IBP's reported job volume partially offset by a 3.5% increase in price/mix. Residential sales growth within the Company's Installation segment was down 6.0% on a same branch basis in the quarter, as a 12.2% decline in single-family same branch sales was partially offset by a 28.4% increase in multi-family same branch sales. According to the U.S. Census Bureau, the number of single-family housing units under construction across the industry fell 16% from the prior year quarter while multifamily units were up 14% relative to last year. Commercial same branch sales were down 1.3% from the prior year quarter and total commercial sales increased 3.7%, which includes the Company's recent acquisitions.
Gross profit improved 9.4% to $242.1 million from $221.3 million in the prior year quarter. Gross profit and adjusted gross profit* as a percent of total revenue were both 34.3% up from 30.8% for the same period last year. Adjusted gross profit primarily adjusts for the Company’s share-based compensation expense.
Selling and administrative expense, as a percent of net revenue, was 18.2% compared to 16.1% in the prior year quarter. Adjusted selling and administrative expense*, as a percent of net revenue, was 17.7% compared to 15.7% in the prior year quarter.
Net income was $68.0 million, or $2.40 per diluted share, compared to $61.0 million, or $2.13 per diluted share in the prior year quarter. Net income margin for the third quarter was 9.6% compared to 8.5% in the prior year quarter. Adjusted net income* was $78.9 million, or $2.79 per diluted share, compared to $71.7 million, or $2.51 per diluted share in the prior year quarter. Adjusted net income margin* for the third quarter was 11.2% compared to 10.0% in the prior year quarter. Adjusted net income accounts for the impact of non-core items in both periods, including an addback for non-cash amortization expense related to acquisitions.
EBITDA* was $126.8 million, an 8.3% increase from $117.1 million in the prior year quarter as a result of improved margins of 18.0% and 16.3%, respectively. Adjusted EBITDA* was $130.5 million, an 8.6% increase from $120.2 million in the prior year quarter, representing adjusted EBITDA margins* of 18.5% and 16.7%, respectively. Both EBITDA and Adjusted EBITDA for the third quarter of 2023 represent record results.
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Conference Call and Webcast
The Company will host a conference call and webcast on November 8, 2023 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 December 8, 2023, by dialing 844-512-2921 (domestic) or 412-317-6671 (international) and entering the passcode 13740596.
About Installed Building Products
Installed Building Products, Inc. is one of the nation's largest new residential insulation installers and is a diversified installer of complementary building products, including waterproofing, fire-stopping, fireproofing, garage doors, rain gutters, window blinds, shower doors, closet shelving and mirrors and other products for residential and commercial builders located in the continental United States. The Company manages all aspects of the installation process for its customers, from direct purchase and receipt of materials from national manufacturers to its timely 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 in all 48 continental states and the District of Columbia from its national network of over 240 branch locations.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the federal securities laws, including with respect to the housing market and the commercial market, our operations, industry and economic conditions, our ESG-related performance and initiatives, our financial and business model, payment of dividends, the demand for our services and product offerings, expansion of our national footprint and end markets, diversification of our products, our ability to grow and strengthen our market position, our ability to pursue and integrate value-enhancing acquisitions and the expected amount of acquired revenue, our ability to improve sales and profitability, and expectations for demand for our services and our earnings. 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 results may differ materially from those expressed in or suggested by such forward-looking statements as a result of various factors, including, without limitation, the adverse impact of the ongoing COVID-19 pandemic; general economic and industry conditions; rising home prices; inflation and interest rates; the material price and supply environment; the timing of increases in our selling prices; the risk that the Company may reduce, suspend or eliminate dividend payments in the future; 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, 2022, as the same may be updated from time to time in our subsequent filings with the Securities and Exchange Commission. In addition, any future declaration of dividends will be subject to the final determination of our Board of Directors. 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 EBITDA, 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 EBITDA, 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.
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INSTALLED BUILDING PRODUCTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(unaudited, in thousands, except share and per share amounts)

Three months ended September 30,Nine months ended September 30,
2023202220232022
Net revenue$706,465 $719,114 $2,057,874 $1,983,355 
Cost of sales464,371 497,837 1,372,883 1,372,966 
Gross profit242,094 221,277 684,991 610,389 
Operating expenses
Selling31,966 31,651 97,475 86,214 
Administrative96,789 84,345 282,277 247,519 
Amortization11,031 11,370 33,722 33,728 
Operating income102,308 93,911 271,517 242,928 
Other expense, net
Interest expense, net9,718 10,668 29,216 31,669 
Other (income) expense(205)185 (544)698 
Income before income taxes92,795 83,058 242,845 210,561 
Income tax provision24,803 22,080 63,982 55,857 
Net income$67,992 $60,978 $178,863 $154,704 
Other comprehensive income, net of tax:
Net change on cash flow hedges, net of tax provision of $(1,956) and $(5,105) for the three months ended September 30, 2023 and 2022, respectively, and $(1,633) and $(15,138) for the nine months ended September 30, 2023 and 2022, respectively
5,482 14,379 4,575 42,640 
Comprehensive income$73,474 $75,357 $183,438 $197,344 
Earnings Per Share:
Basic$2.41 $2.14 $6.35 $5.36 
Diluted $2.40 $2.13 $6.32 $5.33 
Weighted average shares outstanding:
Basic28,204,328 28,478,954 28,151,899 28,851,389 
Diluted28,318,633 28,595,707 28,290,533 29,020,509 
Cash dividends declared per share$0.33 $0.32 $1.89 $1.85 
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INSTALLED BUILDING PRODUCTS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands, except share and per share amounts)

 September 30,December 31,
 20232022
ASSETS
Current assets
Cash and cash equivalents$339,759 $229,627 
Accounts receivable (less allowance for credit losses of $10,919 and $9,549 at September 30, 2023 and December 31, 2022, respectively)
427,093 397,222 
Inventories159,675 176,629 
Prepaid expenses and other current assets73,292 80,933 
Total current assets999,819 884,411 
Property and equipment, net134,031 118,774 
Operating lease right-of-use assets77,808 76,174 
Goodwill395,213 373,555 
Customer relationships, net181,672 192,328 
Other intangibles, net89,637 91,145 
Other non-current assets42,780 42,545 
Total assets$1,920,960 $1,778,932 
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities
Current maturities of long-term debt$31,803 $30,983 
Current maturities of operating lease obligations27,769 26,145 
Current maturities of finance lease obligations2,694 2,508 
Accounts payable143,556 149,186 
Accrued compensation61,151 51,608 
Other current liabilities57,703 67,631 
Total current liabilities324,676 328,061 
Long-term debt833,458 830,171 
Operating lease obligations50,085 49,789 
Finance lease obligations6,909 6,397 
Deferred income taxes29,836 28,458 
Other long-term liabilities47,814 42,557 
Total liabilities1,292,778 1,285,433 
Commitments and contingencies (Note 16)
Stockholders’ equity
Preferred Stock; $0.01 par value: 5,000,000 authorized and 0 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively
— — 
Common stock; $0.01 par value: 100,000,000 authorized, 33,582,449 and 33,429,557 issued and 28,409,655 and 28,306,482 shares outstanding at September 30, 2023 and December 31, 2022, respectively
336 334 
Additional paid in capital239,546 228,827 
Retained earnings638,309 513,095 
Treasury stock; at cost: 5,172,794 and 5,123,075 shares at September 30, 2023 and December 31, 2022, respectively
(295,144)(289,317)
Accumulated other comprehensive income 45,135 40,560 
Total stockholders’ equity628,182 493,499 
Total liabilities and stockholders’ equity$1,920,960 $1,778,932 

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INSTALLED BUILDING PRODUCTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
Nine months ended September 30,
20232022
Cash flows from operating activities
Net income$178,863 $154,704 
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization of property and equipment38,702 35,153 
Amortization of operating lease right-of-use assets21,716 19,832 
Amortization of intangibles33,722 33,728 
Amortization of deferred financing costs and debt discount1,415 1,436 
Provision for credit losses4,380 2,754 
Write-off of debt issuance costs928 — 
Gain on sale of property and equipment(1,518)(1,048)
Noncash stock compensation10,637 10,290 
Other, net(8,824)1,509 
Changes in assets and liabilities, excluding effects of acquisitions
Accounts receivable(28,695)(98,528)
Inventories18,715 (23,071)
Proceeds from termination of interest rate swap agreements— 25,462 
Other assets10,701 4,773 
Accounts payable(8,269)20,290 
Income taxes receivable/payable(198)12,354 
Other liabilities(21,736)(971)
Net cash provided by operating activities250,539 198,667 
Cash flows from investing activities
Purchases of investments— (344,388)
Maturities of short term investments— 320,000 
Purchases of property and equipment(46,902)(35,212)
Acquisitions of businesses, net of cash acquired of $10 and $330 in 2023 and 2022, respectively
(44,845)(75,779)
Proceeds from sale of property and equipment2,054 1,418 
Settlements with interest rate swap counterparties12,165 1,287 
Other(350)(7,261)
Net cash used in investing activities$(77,878)$(139,935)
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INSTALLED BUILDING PRODUCTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(unaudited, in thousands)
Nine months ended September 30,
20232022
Cash flows from financing activities
Payments on Term Loan$(3,731)$(3,750)
Proceeds from vehicle and equipment notes payable28,359 20,492 
Debt issuance costs(438)(655)
Principal payments on long-term debt(22,193)(23,340)
Principal payments on finance lease obligations(2,199)(1,661)
Dividends paid(53,779)(53,821)
Acquisition-related obligations(2,721)(9,423)
Repurchase of common stock— (112,193)
Surrender of common stock awards by employees(5,827)(4,464)
Net cash used in financing activities(62,529)(188,815)
Net change in cash and cash equivalents110,132 (130,083)
Cash and cash equivalents at beginning of period229,627 333,485 
Cash and cash equivalents at end of period$339,759 $203,402 
Supplemental disclosures of cash flow information
Net cash paid during the period for:
Interest$36,332 $40,639 
Income taxes, net of refunds64,177 43,512 
Supplemental disclosure of noncash activities
Right-of-use assets obtained in exchange for operating lease obligations$23,188 $22,056 
Release of indemnification of acquisition-related debt— 980 
Property and equipment obtained in exchange for finance lease obligations2,905 4,411 
Seller obligations in connection with acquisition of businesses8,290 25,534 
Unpaid purchases of property and equipment included in accounts payable1,943 857 
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INSTALLED BUILDING PRODUCTS, INC.
SEGMENT INFORMATION
(unaudited, in thousands)

Information on Segments
Our Company has three operating segments consisting of Installation, Distribution and Manufacturing. The Other category reported below reflects the operations of our Distribution and Manufacturing operating segments.
Three months ended September 30, 2023Nine months ended September 30, 2023
InstallationOtherEliminationsConsolidatedInstallationOtherEliminationsConsolidated
Revenue$661,191 $47,435 $(2,161)$706,465 $1,935,799 $128,440 $(6,365)$2,057,874 
Cost of sales (1)
419,479 33,942 (1,591)451,830 1,248,524 92,771 (4,940)1,336,355 
Segment gross profit$241,712 $13,493 $(570)$254,635 $687,275 $35,669 $(1,425)$721,519 
Segment gross profit percentage36.6 %28.4 %26.4 %36.0 %35.5 %27.8 %22.4 %35.1 %
Three months ended September 30, 2022Nine months ended September 30, 2022
InstallationOtherEliminationsConsolidatedInstallationOtherEliminationsConsolidated
Revenue$672,916 $47,748 $(1,550)$719,114 $1,872,544 $114,690 $(3,879)$1,983,355 
Cost of sales (1)
450,017 37,659 (1,116)$486,560 1,255,521 87,425 (3,015)1,339,931 
Segment gross profit$222,899 $10,089 $(434)$232,554 $617,023 $27,265 $(864)$643,424 
Segment gross profit percentage33.1 %21.1 %28.0 %32.3 %33.0 %23.8 %22.3 %32.4 %
(1)    Cost of sales included in segment gross profit is exclusive of depreciation and amortization for the three and nine months ended September 30, 2023 and 2022.
The reconciliation between consolidated segment gross profit for each period as shown in the tables above to consolidated income before income taxes as follows:
Three months ended September 30,Nine months ended September 30,
2023202220232022
Segment gross profit - consolidated$254,635 $232,554 $721,519 $643,424 
Depreciation and amortization (1)
12,541 11,277 36,528 33,035 
Gross profit, as reported242,094 221,277 684,991 610,389 
Operating expenses139,786 127,366 413,474 367,461 
Operating income 102,308 93,911 271,517 242,928 
Other expense, net9,513 10,853 28,672 32,367 
Income before income taxes$92,795 $83,058 $242,845 $210,561 
(1)    Depreciation and amortization is excluded from segment gross profit for the three and nine months ended September 30, 2023 and 2022.




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INSTALLED BUILDING PRODUCTS, INC.
REVENUE BY END MARKET
(unaudited, in thousands)

Three months ended September 30,Nine months ended September 30,
2023202220232022
Installation:
Residential new construction$518,080 73 %$532,299 74 %$1,488,875 72 %$1,480,214 75 %
Repair and remodel37,839 %39,139 %114,452 %109,745 %
Commercial105,272 15 %101,478 14 %332,472 16 %282,585 14 %
Net revenue, Installation661,191 94 %672,916 94 %1,935,799 94 %1,872,544 94 %
Other
45,274 %46,198 %122,075 %110,811 %
Net revenue, as reported$706,465 100 %$719,114 100 %$2,057,874 100 %$1,983,355 100 %


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Reconciliation of Non-GAAP Financial Measures
EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, Adjusted Gross Profit and Adjusted Selling and Administrative Expense measure performance by adjusting GAAP net income, EBITDA, 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 September 30,Nine months ended September 30,
2023202220232022
Net income, as reported$67,992 $60,978 $178,863 $154,704 
   Adjustments for adjusted net income
   Share based compensation expense3,516 3,212 10,637 10,290 
   Acquisition related expenses 157 (94)1,260 1,307 
   COVID-19 expenses (1)
— 303 
   Amortization expense (2)
11,031 11,370 33,722 33,728 
   Legal Reserve— — 1,283 845 
   Tax impact of adjusted items at a normalized tax rate (3)
(3,823)(3,767)(12,195)(12,083)
Adjusted net income$78,873 $71,701 $213,571 $189,094 
Weighted average shares outstanding (diluted)28,318,633 28,595,707 28,290,533 29,020,509 
Diluted net income per share, as reported$2.40 $2.13 $6.32 $5.33 
Adjustments for adjusted net income, net of tax impact, per diluted share (4)
0.39 0.38 1.23 1.19 
Diluted adjusted net income per share$2.79 $2.51 $7.55 $6.52 

(1)    Addback of employee pay, employee medical expenses, and legal fees directly attributable to COVID-19.
(2)    Addback of all non-cash amortization resulting from business combinations.
(3)     Normalized effective tax rate of 26.0% applied to periods presented.
(4)     Includes adjustments related to the items noted above, net of tax.


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INSTALLED BUILDING PRODUCTS, INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
ADJUSTED GROSS PROFIT CALCULATIONS
(unaudited, in thousands)

The table below reconciles Adjusted Gross Profit to the most directly comparable GAAP financial measure, gross profit, for the periods presented therein.
Three months ended September 30,Nine months ended September 30,
2023202220232022
Gross profit, as reported$242,094 $221,277 $684,991 $610,389 
  Share based compensation expense253 164 658 484 
  COVID-19 expense(1)
— 
Adjusted gross profit$242,347 $221,443 $685,650 $610,877 
Gross profit margin34.3 %30.8 %33.3 %30.8 %
Adjusted gross profit margin34.3 %30.8 %33.3 %30.8 %
(1)     Addback of employee pay and employee medical expenses directly attributable to COVID-19.

The table below reconciles Adjusted Selling and Administrative to the most directly comparable GAAP financial measure, selling and administrative, for the periods presented therein.

INSTALLED BUILDING PRODUCTS, INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
ADJUSTED SELLING AND ADMINISTRATIVE EXPENSE CALCULATIONS
(unaudited, in thousands)
Three months ended September 30,Nine months ended September 30,
2023202220232022
Selling expense$31,966 $31,651 $97,475 $86,214 
Administrative expense96,789 84,345 282,277 247,519 
Selling and administrative, as reported128,755 115,996 379,752 333,733 
  Share based compensation expense3,263 3,048 9,979 9,806 
  Acquisition related expense157 (94)1,260 1,307 
  COVID-19 expenses(1)
— — 299 
  Legal reserve— — 1,283 845 
Adjusted selling and administrative$125,335 $113,042 $367,229 $321,476 
Selling and administrative - % Net revenue18.2 %16.1 %18.5 %16.8 %
Adjusted selling and administrative - % Net revenue17.7 %15.7 %17.8 %16.2 %
(1)    Addback of employee pay and employee medical expenses directly attributable to COVID-19.


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INSTALLED BUILDING PRODUCTS, INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
EBITDA AND ADJUSTED EBITDA CALCULATIONS
(unaudited, in thousands)

The table below reconciles EBITDA and Adjusted EBITDA to the most directly comparable GAAP financial measure, net income, for the periods presented therein.
Three months ended September 30,Nine months ended September 30,
2023202220232022
Net income, as reported$67,992 $60,978 $178,863 $154,704 
Interest expense9,718 10,668 29,216 31,669 
Provision for income tax24,803 22,080 63,982 55,857 
Depreciation and amortization24,317 23,361 72,424 68,881 
EBITDA126,830 117,087 344,485 311,111 
Acquisition related expenses157 (94)1,260 1,307 
Share based compensation expense3,516 3,212 10,637 10,290 
COVID-19 expenses(1)
— 303 
Legal reserve— — 1,283 845 
Adjusted EBITDA$130,503 $120,207 $357,666 $323,856 
Net profit margin9.6 %8.5 %8.7 %7.8 %
EBITDA margin18.0 %16.3 %16.7 %15.7 %
Adjusted EBITDA margin18.5 %16.7 %17.4 %16.3 %

(1) Addback of employee pay and employee medical expenses, and legal fees directly attributable to COVID-19.

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INSTALLED BUILDING PRODUCTS, INC.
SUPPLEMENTARY TABLE
(unaudited)
Three months ended September 30,Nine months ended September 30,
2023202220232022
Period-over-period Growth
Consolidated Sales Growth(1.8)%41.1%3.8%38.2%
Consolidated Same Branch Sales Growth(5.2)%28.5%(0.3)%26.2%
Installation
Sales Growth(1.7)%33.5%3.4%31.9%
Same Branch Sales Growth(5.4)%28.4%(0.5)%26.2%
Single-Family Sales Growth(8.7)%39.2%(6.0)%38.2%
Single-Family Same Branch Sales Growth(12.2)%35.3%(9.7)%32.8%
Multi-Family Sales Growth30.9%33.9%36.4%29.7%
Multi-Family Same Branch Sales Growth28.4%32.9%34.7%28.9%
Residential Sales Growth(2.7)%38.4%0.6%36.8%
Residential Same Branch Sales Growth(6.0)%34.9%(2.8)%32.1%
Commercial Sales Growth(1)
3.7%16.0%17.7%14.4%
Commercial Same Branch Sales Growth(1.3)%2.8%11.8%4.4%
Other (2)
Sales Growth(0.7)%657.3%12.0%567.5%
Same Branch Sales Growth(0.7)%44.3%4.5%43.8%
Same Branch Sales Growth - Installation
Volume Growth(3)
(10.8)%7.5%(10.1)%7.9%
Price/Mix Growth(3)
3.5%27.1%8.6%22.2%
U.S. Housing Market(4)
Total Completions Growth(1.8)%7.0%4.8%2.4%
Single-Family Completions Growth(4.7)%8.7%(2.2)%5.7%
Multi-Family Completions Growth3.9%4.8%24.1%(6.0)%

(1)    Our commercial end market consists of heavy and light commercial projects.
(2)    Other business segment category includes our manufacturing and distribution businesses operating segments. As of 1Q22, Installation segment end market growth metrics exclude the manufacturing and distribution businesses. Our distribution businesses were acquired in December, 2021 and April, 2022.
(3)    The heavy commercial end market is excluded from these metrics given its much larger per-job revenue compared to our average job.
(4)    U.S. Census Bureau data, as revised.
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INSTALLED BUILDING PRODUCTS, INC.
INCREMENTAL REVENUE AND ADJUSTED EBITDA MARGINS
(unaudited, in thousands)
Revenue Increase
Three months ended September 30,Nine months ended September 30,
2023% Total2022% Total2023% Total2022% Total
Same Branch$(37,426)295.9 %$145,082 69.3 %$(6,451)(8.7)%$376,491 68.6 %
Acquired24,777 (195.9)%64,270 30.7 %80,970 108.7 %171,938 31.4 %
Total$(12,649)100.0 %$209,352 100.0 %$74,519 100.0 %$548,429 100.0 %

Adjusted EBITDA Margin Contributions
Three months ended September 30,Nine months ended September 30,
2023% Margin2022% Margin2023% Margin2022% Margin
Same Branch(1)
$5,492 *$35,873 24.7 %$19,124 *$92,808 24.7 %
Acquired4,804 19.4 %6,187 9.6 %14,686 18.1 %20,400 11.9 %
Total$10,296 *$42,060 20.1 %$33,810 45.4 %$113,208 20.6 %

(1)    Same branch adjusted EBITDA margin contribution percentage is a percentage of same branch revenue increase (decrease).
* During the three months ended September 30, 2023, same branch and total revenue declined while same branch and total adjusted EBITDA increased. During the nine months ended September 30, 2023, same branch revenue declined while same branch adjusted EBITDA increased. The negative % margin result in both periods does not reflect a decremental margin, but rather, a quotient with mixed signs for the numerator and denominator.

Source: Installed Building Products, Inc.

Contact Information:
Investor Relations:
614-221-9944
investorrelations@installed.net


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