8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): November 1, 2022

TopBuild Corp.

(Exact name of registrant as specified in its charter)

Delaware	001-36870	47-3096382
(State or other Jurisdiction of	(Commission	(IRS Employer
Incorporation)	File Number)	Identification No.)

475 North Williamson Boulevard Daytona Beach, Florida	32114
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (386) 304-2200

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.01 per share	BLD	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02.  Results of Operations and Financial Condition.

On November 1, 2022, TopBuild Corp., a Delaware corporation (the “Company”), issued a press release announcing its financial results for the quarter ended September 30, 2022 (the “Press Release”).  The Press Release, which is furnished as Exhibit 99.1, and the information included in Item 7.01 of this Current Report on Form 8-K (this “Report”) are incorporated by reference in this Item 2.02.

The information in the Press Release and in this Item 2.02 is “furnished” and not “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section.  Such information shall not be incorporated by reference in another filing under the Exchange Act or the Securities Act of 1933, as amended (the “Securities Act”), except to the extent such other filing specifically incorporates such information by reference.

Item 7.01.  Regulation FD Disclosure.

On November 1, 2022, the Company issued the Press Release.  The Press Release, which is furnished as Exhibit 99.1, and the information included in Item 2.02 of this Report are incorporated by reference in this Item 7.01.

The information in the Press Release and in this Item 7.01 is “furnished” and not “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section.  Such information shall not be incorporated by reference in another filing under the Exchange Act or the Securities Act except to the extent such other filing specifically incorporates such information by reference.

Item 9.01.  Financial Statements and Exhibits.

(d)  Exhibits

Exhibit Number	Description
99.1	Press release issued by TopBuild Corp., dated November 1, 2022, announcing its financial results for the quarter ended September 30, 2022.
104	Cover Page Interactive Data File (formatted as Inline XBRL)

2

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	TOPBUILD CORP.
	By:	/s/ Robert Kuhns
		Name:	Robert Kuhns
		Title:	Vice President and Chief Financial Officer (Principal Financial Officer)
Dated: November 1, 2022

3

EX-99.1

Exhibit 99.1

A leading installer and specialty distributor of insulation and related building
material products to the construction industry in the United States and Canada

TopBuild Reports Third Quarter 2022 Results

● 53.8% increase in net sales, 22.6% on a same branch basis

● 130 basis point operating margin expansion to 17.1%

● 190 basis point same branch adjusted EBITDA margin expansion to 20.6%

● Net Debt Leverage improves to 1.49x, from 1.68x at June 30, 2022

Third Quarter Financial Highlights

(unless otherwise indicated, comparisons are to the quarter ended September 30, 2021)

3 Months Ended 9/30/22	Reported	Change
Sales	$1,300,998	53.8%
Gross Margin	30.4%	80 bps
SG&A as % of revenue	13.3%	(50 bps)
Operating Profit	$222,874	66.6%
Operating Margin	17.1%	130 bps
Net Income	$153,746	61.1%
Net Income per diluted share	$4.76	65.3%
3 Months Ended 9/30/22	Adjusted	Change
Sales	$1,300,998	53.8%
Gross Margin	30.4%	80 bps
SG&A as % of revenue	13.2%	(10 bps)
Operating Profit	$224,174	63.1%
Operating Margin	17.2%	90 bps
Net Income	$154,889	58.6%
Net Income per diluted share	$4.80	62.7%
EBITDA	$259,215	63.8%
EBITDA Margin	19.9%	120 bps
3 Months Ended 9/30/22	Adj. Same Branch	Change
Sales	$1,037,278	22.6%
Gross Margin	31.3%	170 bps
Operating Margin	18.5%	220 bps
EBITDA Margin	20.6%	190 bps
Incremental EBITDA Margin	28.8%

“We had another outstanding quarter with revenue growth in all three end-markets we serve: residential, commercial, and industrial. In addition, EBITDA margins at both business segments expanded, driven by operational efficiencies.

“As we look to the rest of this year and next, our focus remains on driving profitable growth and identifying and implementing initiatives that will enhance our Company’s operations. Our entire team remains focused on continuing to deliver strong results and creating shareholder value in every operating environment.”

ROBERT BUCK, PRESIDENT & CEO

NYSE:BLD November 1, 2022 topbuild.com

2

Nine Month Financial Highlights

(unless otherwise indicated, comparisons are to nine months ended September 30, 2021)

9 Months Ended 9/30/22	Reported	Change
Sales	$3,744,201	54.5%
Gross Margin	29.7%	120 bps
SG&A as % of revenue	13.8%	0 bps
Operating Profit	$594,049	65.9%
Operating Margin	15.9%	110 bps
Net Income	$412,156	67.8%
Net Income per diluted share	$12.63	70.4%
9 Months Ended 9/30/22	Adjusted	Change
Sales	$3,744,201	54.5%
Gross Margin	29.7%	110 bps
SG&A as % of revenue	13.6%	10 bps
Operating Profit	$600,474	64.7%
Operating Margin	16.0%	100 bps
Net Income	$414,874	61.8%
Net Income per diluted share	$12.71	64.4%
EBITDA	$703,198	65.9%
EBITDA Margin	18.8%	130 bps
9 Months Ended 9/30/22	Adj. Same Branch	Change
Sales	$2,926,330	20.8%
Gross Margin	30.8%	220 bps
Operating Margin	17.6%	260 bps
EBITDA Margin	19.8%	230 bps
Incremental EBITDA	30.8%

NYSE:BLD November 1, 2022 topbuild.com

3

Operating Segment Highlights ($ in 000s)

(comparisons are to the period ended September 30, 2021)

Installation	3 Months Ended 9/30/22	9 Months Ended 9/30/22	Specialty Distribution	3 Months Ended 9/30/22	9 Months Ended 9/30/22
Sales	$783,056	$2,208,717	Sales	$583,543	$1,715,196
Change			Change
Volume	12.3%	8.1%	Volume	5.7%	2.1%
Price	13.8%	13.7%	Price	13.0%	18.5%
M&A	1.7%	4.3%	M&A	92.4%	93.5%
Total Change	27.8%	26.1%	Total Change	111.1%	114.0%
Operating Margin	19.7%	18.4%	Operating Margin	15.1%	14.3%
Change	260 bps	250 bps	Change	(200 bps)	(130 bps)
Adj. Operating Margin	19.6%	18.4%	Adj. Operating Margin	15.3%	14.4%
Change	240 bps	240 bps	Change	(180 bps)	(130 bps)
Adj. EBITDA Margin	21.6%	20.6%	Adj. EBITDA Margin	18.0%	17.0%
Change	200 bps	220 bps	Change	10 bps	50 bps

Capital Allocation

Acquisitions

Through September 30, the Company has completed five acquisitions which are expected to contribute approximately $17.3 million in annual revenue. Share repurchases In the third quarter of 2022, the Company repurchased 269,544 shares at an average price of $185.50 per share.  Year-to-date the Company has repurchased 1,059,361 shares as an average price of $188.79 per share. “Our proven track record of selecting, acquiring, and integrating companies has produced strong returns for our shareholders and we believe acquisitions will continue to be the best use of our capital.  With the successful integration of DI mostly behind us, we continue to build and pursue a robust pipeline of prospects in all three end markets we serve.” ROBERT BUCK, PRESIDENT & CEO

2022 Outlook

Sales and Adjusted EBITDA Guidance ⁽¹⁾

($ in millions)

2022	Low	High
Sales	$ 4,950	$ 5,000
Adjusted EBITDA*	$ 915	$ 935

*See table for adjusted EBITDA reconciliation.

⁽¹⁾ This outlook reflects management’s current view of present and future market conditions and are based on assumptions such as housing starts and completions, 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.

NYSE:BLD November 1, 2022 topbuild.com

4

Conference Call

A conference call to discuss third quarter 2022 financial results is scheduled for today, Tuesday, November 1, at 9:00 a.m. Eastern Time.  The call may be accessed by dialing (877) 407-9037.  The conference call will be webcast simultaneously on the Company’s website at www.topbuild.com.  In addition, a copy of management’s formal remarks and a presentation that summarizes management’s formal remarks will be available immediately prior to the conference call on www.topbuild.com.

About TopBuild

TopBuild Corp., headquartered in Daytona Beach, Florida, is a leading installer and specialty distributor of insulation and related building material products to the construction industry in the United States and Canada.  We provide insulation installation services nationwide through our contractor services business which has approximately 230 branches located across the United States. We distribute building and mechanical insulation, insulation accessories and other building product materials for the residential, commercial, and industrial end markets through our Specialty Distribution business.  Our specialty distribution network encompasses approximately 180 branches.  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 “SEC Filings” 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 stock repurchase transactions.  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 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 November 1, 2022 topbuild.com

TopBuild Corp.

Condensed Consolidated Statements of Operations (Unaudited)

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net sales	$	1,300,998	$	845,757	$	3,744,201	$	2,422,810
Cost of sales		905,250		595,466		2,633,155		1,731,581
Gross profit		395,748		250,291		1,111,046		691,229
Selling, general, and administrative expense		172,874		116,485		516,997		333,252
Operating profit		222,874		133,806		594,049		357,977
Other income (expense), net:
Interest expense		(14,561)		(5,503)		(39,936)		(18,210)
Loss on extinguishment of debt		—		—		—		(13,862)
Other, net		(303)		66		103		210
Other expense, net		(14,864)		(5,437)		(39,833)		(31,862)
Income before income taxes		208,010		128,369		554,216		326,115
Income tax expense		(54,264)		(32,934)		(142,060)		(80,457)
Net income	$	153,746	$	95,435	$	412,156	$	245,658
Net income per common share:
Basic	$	4.79	$	2.91	$	12.72	$	7.49
Diluted	$	4.76	$	2.88	$	12.63	$	7.41
Weighted average shares outstanding:
Basic		32,076,285		32,763,311		32,404,275		32,818,145
Diluted		32,279,820		33,088,680		32,643,161		33,155,995

NYSE:BLD November 1, 2022 topbuild.com

TopBuild Corp.

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

(in thousands)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net income	$	153,746	$	95,435	$	412,156	$	245,658
Other comprehensive loss:
Foreign currency translation adjustment		(15,158)		-		(14,133)		-
Comprehensive income	$	138,588	$	95,435	$	398,023	$	245,658

NYSE:BLD November 1, 2022 topbuild.com

TopBuild Corp.

Condensed Consolidated Balance Sheets and Other Financial Data (Unaudited)

(dollars in thousands)

	As of
	September 30, 2022		December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	159,384	$	139,779
Receivables, net of an allowance for credit losses of $14,105 at September 30, 2022, and $8,798 at December 31, 2021		815,633		668,419
Inventories, net		447,100		352,801
Prepaid expenses and other current assets		27,416		26,692
Total current assets		1,449,533		1,187,691
Right of use assets		191,731		177,177
Property and equipment, net		248,623		244,574
Goodwill		1,966,234		1,949,763
Other intangible assets, net		631,005		684,209
Other assets		18,991		15,116
Total assets	$	4,506,117	$	4,258,530
LIABILITIES
Current liabilities:
Accounts payable	$	510,163	$	461,917
Current portion of long-term debt		37,367		38,640
Accrued liabilities		181,455		175,891
Short-term operating lease liabilities		57,268		54,591
Short-term finance lease liabilities		2,328		2,387
Total current liabilities		788,581		733,426
Long-term debt		1,428,935		1,454,483
Deferred tax liabilities, net		244,608		248,243
Long-term portion of insurance reserves		61,243		51,875
Long-term operating lease liabilities		138,923		125,339
Long-term finance lease liabilities		6,170		7,770
Other liabilities		3,218		960
Total liabilities		2,671,678		2,622,096
EQUITY		1,834,439		1,636,434
Total liabilities and equity	$	4,506,117	$	4,258,530

	As of September 30,
	2022			2021
Other Financial Data
Receivable days		48			45
Inventory days		48			33
Accounts payable days		63			75
Receivables, net plus inventories, net less accounts payable	$	752,570		$	336,027
Receivables, net plus inventories, net less accounts payable as a percent of sales (TTM) †		15.5	%		10.3	%

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

NYSE:BLD November 1, 2022 topbuild.com

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

	Nine Months Ended September 30,
	2022		2021
Cash Flows Provided by (Used in) Operating Activities:
Net income	$	412,156	$	245,658
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		93,051		51,005
Share-based compensation		9,673		8,375
Loss on extinguishment of debt		—		13,862
Loss on sale of property and equipment		76		1,410
Amortization of debt issuance costs		2,147		1,352
Provision for bad debt expense		8,837		5,215
Loss from inventory obsolescence		5,127		1,667
Change in certain assets and liabilities:
Receivables, net		(152,578)		(62,257)
Inventories, net		(101,148)		(30,115)
Prepaid expenses and other current assets		(807)		(2,984)
Accounts payable		49,079		47,907
Accrued liabilities		3,469		30,397
Other, net		6,548		(1,987)
Net cash provided by operating activities		335,630		309,505
Cash Flows Provided by (Used in) Investing Activities:
Purchases of property and equipment		(56,044)		(42,320)
Acquisition of businesses, net of cash acquired		(20,500)		(205,028)
Proceeds from sale of property and equipment		2,877		298
Net cash used in investing activities		(73,667)		(247,050)
Cash Flows Provided by (Used in) Financing Activities:
Proceeds from issuance of long-term debt		—		411,250
Repayment of long-term debt		(28,968)		(427,563)
Payment of debt issuance costs		—		(6,500)
Proceeds from revolving credit facility		70,000		—
Repayment of revolving credit facility		(70,000)		—
Taxes withheld and paid on employees' equity awards		(11,719)		(11,511)
Exercise of stock options		2,028		5,952
Repurchase of shares of common stock		(200,050)		(35,556)
Payment of contingent consideration		(1,674)		(628)
Net cash used in financing activities		(240,383)		(64,556)
Impact of exchange rate changes on cash		(1,975)		—
Net increase (decrease) in cash and cash equivalents		19,605		(2,101)
Cash and cash equivalents- Beginning of period		139,779		330,007
Cash and cash equivalents- End of period	$	159,384	$	327,906
Supplemental disclosure of noncash activities:
Leased assets obtained in exchange for new operating lease liabilities	$	80,186	$	51,190
Accruals for property and equipment		395		580

NYSE:BLD November 1, 2022 topbuild.com

TopBuild Corp.

Segment Data (Unaudited)

(dollars in thousands)

	Three Months Ended September 30,									Nine Months Ended September 30,
	2022			2021			Change			2022			2021			Change
Installation
Sales	$	783,056		$	612,900			27.8	%	$	2,208,717		$	1,751,278			26.1	%
Operating profit, as reported	$	154,236		$	105,046					$	406,835		$	277,748
Operating margin, as reported		19.7	%		17.1	%					18.4	%		15.9	%
Rationalization charges		(807)			−						(334)			−
Acquisition related costs		15			171						112			1,283
COVID-19 pay		−			−						−			605
Operating profit, as adjusted	$	153,444		$	105,217					$	406,613		$	279,636
Operating margin, as adjusted		19.6	%		17.2	%					18.4	%		16.0	%
Share-based compensation		268			272						956			886
Depreciation and amortization		15,610			14,906						46,615			42,588
EBITDA, as adjusted	$	169,322		$	120,395			40.6	%	$	454,184		$	323,110			40.6	%
EBITDA margin, as adjusted		21.6	%		19.6	%					20.6	%		18.4	%
Specialty Distribution
Sales	$	583,543		$	276,398			111.1	%	$	1,715,196		$	801,363			114.0	%
Operating profit, as reported	$	88,364		$	47,162					$	245,534		$	125,403
Operating margin, as reported		15.1	%		17.1	%					14.3	%		15.6	%
Acquisition related costs		660			−						1,235			−
COVID-19 pay		−			−						−			54
Operating profit, as adjusted	$	89,024		$	47,162					$	246,769		$	125,457
Operating margin, as adjusted		15.3	%		17.1	%					14.4	%		15.7	%
Share-based compensation		296			241						938			729
Depreciation and amortization		15,662			2,138						43,697			6,338
EBITDA, as adjusted	$	104,982		$	49,541			111.9	%	$	291,404		$	132,524			119.9	%
EBITDA margin, as adjusted		18.0	%		17.9	%					17.0	%		16.5	%

NYSE:BLD November 1, 2022 topbuild.com

TopBuild Corp.

Adjusted EBITDA (Unaudited)

(dollars in thousands)

	Three Months Ended September 30,									Nine Months Ended September 30,
	2022			2021			Change			2022			2021			Change
Total net sales
Sales before eliminations	$	1,366,599		$	889,298					$	3,923,913		$	2,552,641
Intercompany eliminations		(65,601)			(43,541)						(179,712)			(129,831)
Net sales after eliminations	$	1,300,998		$	845,757			53.8	%	$	3,744,201		$	2,422,810			54.5	%
Operating profit, as reported - segments	$	242,600		$	152,208					$	652,369		$	403,151
General corporate expense, net		(8,920)			(10,812)						(28,371)			(24,124)
Intercompany eliminations		(10,806)			(7,590)						(29,949)			(21,050)
Operating profit, as reported	$	222,874		$	133,806					$	594,049		$	357,977
Operating margin, as reported		17.1	%		15.8	%					15.9	%		14.8	%
Rationalization charges		(807)			-						(334)			16
Acquisition related costs †		2,107			3,634						6,759			5,844
COVID-19 pay		-			-						-			659
Operating profit, as adjusted	$	224,174		$	137,440					$	600,474		$	364,496
Operating margin, as adjusted		17.2	%		16.3	%					16.0	%		15.0	%
Share-based compensation		2,611			2,998						9,673			8,375
Depreciation and amortization		32,430			17,784						93,051			51,005
EBITDA, as adjusted	$	259,215		$	158,222			63.8	%	$	703,198		$	423,876			65.9	%
EBITDA margin, as adjusted		19.9	%		18.7	%					18.8	%		17.5	%
Sales change period over period		455,241									1,321,391
EBITDA, as adjusted, change period over period		100,993									279,322
Incremental EBITDA, as adjusted, as a percentage of change in sales		22.2	%								21.1	%

† Acquisition related costs include corporate level adjustments as well as segment operating adjustments.

NYSE:BLD November 1, 2022 topbuild.com

TopBuild Corp.

Non-GAAP Reconciliations (Unaudited)

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

	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Gross Profit Reconciliation
Net sales	$	1,300,998		$	845,757		$	3,744,201		$	2,422,810
Gross profit, as reported	$	395,748		$	250,291		$	1,111,046		$	691,229
Acquisition related costs		-			-			121			-
COVID-19 pay		-			-			-			592
Gross profit, as adjusted	$	395,748		$	250,291		$	1,111,167		$	691,821
Gross margin, as reported		30.4	%		29.6	%		29.7	%		28.5	%
Gross margin, as adjusted		30.4	%		29.6	%		29.7	%		28.6	%
Selling, General and Administrative Expense Reconciliation
Selling, general, and administrative expense, as reported	$	172,874		$	116,485		$	516,997		$	333,252
Rationalization charges		(807)			-			(334)			16
Acquisition related costs		2,107			3,634			6,638			5,844
COVID-19 pay		-			-			-			67
Selling, general, and administrative expense, as adjusted	$	171,574		$	112,851		$	510,693		$	327,325
Operating Profit Reconciliation
Operating profit, as reported	$	222,874		$	133,806		$	594,049		$	357,977
Rationalization charges		(807)			-			(334)			16
Acquisition related costs		2,107			3,634			6,759			5,844
COVID-19 pay		-			-			-			659
Operating profit, as adjusted	$	224,174		$	137,440		$	600,474		$	364,496
Operating margin, as reported		17.1	%		15.8	%		15.9	%		14.8	%
Operating margin, as adjusted		17.2	%		16.3	%		16.0	%		15.0	%
Income Per Common Share Reconciliation
Income before income taxes, as reported	$	208,010		$	128,369		$	554,216		$	326,115
Rationalization charges		(807)			-			(334)			16
Acquisition related costs		2,107			3,634			6,759			5,844
Refinancing costs and loss on extinguishment of debt		-			-			-			13,862
COVID-19 pay		-			-			-			659
Income before income taxes, as adjusted		209,310			132,003			560,641			346,496
Tax rate at 26.0%		(54,421)			(34,321)			(145,767)			(90,089)
Income, as adjusted	$	154,889		$	97,682		$	414,874		$	256,407
Income per common share, as adjusted	$	4.80		$	2.95		$	12.71		$	7.73
Weighted average diluted common shares outstanding		32,279,820			33,088,680			32,643,161			33,155,995

NYSE:BLD November 1, 2022 topbuild.com

TopBuild Corp.

Same Branch and Acquisition Metrics (Unaudited)

(dollars in thousands)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Net sales
Same branch:
Installation	$	772,589		$	612,900		$	2,132,833		$	1,751,278
Specialty Distribution		328,127			276,398			966,145			801,363
Eliminations		(63,438)			(43,541)			(172,648)			(129,831)
Total same branch		1,037,278			845,757			2,926,330			2,422,810
Acquisitions (a):
Installation	$	10,467		$	-		$	75,884		$	-
Specialty Distribution		255,416			-			749,051			-
Eliminations		(2,163)			-			(7,064)			-
Total acquisitions		263,720			-			817,871			-
Total	$	1,300,998		$	845,757		$	3,744,201		$	2,422,810
Gross profit, as adjusted
Same branch	$	324,832		$	250,291		$	899,959		$	691,821
Acquisitions (a)		70,916			-			211,208			-
Total	$	395,748		$	250,291		$	1,111,167		$	691,821
Gross margin, as adjusted
Same branch (b)		31.3	%		29.6	%		30.8	%		28.6	%
Acquisitions (c)		26.9	%					25.8	%
Operating profit, as adjusted
Same branch	$	192,249		$	137,440		$	516,374		$	364,496
Acquisitions (a)		31,925			-			84,100			-
Total	$	224,174		$	137,440		$	600,474		$	364,496
Operating margin, as adjusted
Same branch (b)		18.5	%		16.3	%		17.6	%		15.0	%
Acquisitions (c)		12.1	%					10.3	%
EBITDA, as adjusted
Same branch	$	213,412		$	158,222		$	578,847		$	423,876
Acquisitions (a)		45,803			-			124,351			-
Total	$	259,215		$	158,222		$	703,198		$	423,876
EBITDA, as adjusted, as a percentage of sales
Same branch (b)		20.6	%					19.8	%
Acquisitions (c)		17.4	%					15.2	%
Total (d)		19.9	%		18.7	%		18.8	%		17.5	%
As Adjusted Incremental EBITDA, as a percentage of change in sales
Same branch (e)		28.8	%					30.8	%
Acquisitions (c)		17.4	%					15.2	%
Total (f)		22.2	%					21.1	%

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

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

(c) Acquired metric, as adjusted, as a percentage of acquired 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

TopBuild Corp.

Reconciliation of Adjusted EBITDA to Net Income (Unaudited)

NYSE:BLD November 1, 2022 topbuild.com

(in thousands)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net income, as reported	$	153,746	$	95,435	$	412,156	$	245,658
Adjustments to arrive at EBITDA, as adjusted:
Interest expense and other, net		14,864		5,437		39,833		18,000
Income tax expense		54,264		32,934		142,060		80,457
Depreciation and amortization		32,430		17,784		93,051		51,005
Share-based compensation		2,611		2,998		9,673		8,375
Rationalization charges		(807)		-		(334)		16
Acquisition related costs		2,107		3,634		6,759		5,844
Refinancing costs and loss on extinguishment of debt		-		-		-		13,862
COVID-19 pay		-		-		-		659
EBITDA, as adjusted	$	259,215	$	158,222	$	703,198	$	423,876

NYSE:BLD November 1, 2022 topbuild.com

TopBuild Corp.

Acquisition Adjusted Net Sales (Unaudited)

(in thousands)

	2021		2022						Trailing Twelve Months Ended
	Q4		Q1		Q2		Q3		September 30, 2022
Net Sales	$	1,063,398	$	1,168,918	$	1,274,285	$	1,300,998	$	4,807,599
Acquisitions proforma adjustment †		49,639		2,934		438		-		53,011
Net sales, acquisition adjusted	$	1,113,037	$	1,171,852	$	1,274,723	$	1,300,998	$	4,860,610

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

NYSE:BLD November 1, 2022 topbuild.com

TopBuild Corp.

2022 Estimated Adjusted EBITDA Range (Unaudited)
(in millions)

	Twelve Months Ending December 31, 2022
		Low		High
Estimated net income	$	525.0		545.7
Adjustments to arrive at estimated EBITDA, as adjusted:
Interest expense and other, net		56.5		54.5
Income tax expense		184.5		191.8
Depreciation and amortization		125.0		123.0
Share-based compensation		13.0		12.0
Rationalization charges		1.0		-
Acquisition related costs		10.0		8.0
Estimated EBITDA, as adjusted	$	915.0	$	935.0

NYSE:BLD November 1, 2022 topbuild.com

XML

Document and Entity Information	Nov. 01, 2022
Document and Entity Information [Abstract]
Document Type	8-K
Document Period End Date	Nov. 01, 2022
Entity File Number	001-36870
Entity Registrant Name	TopBuild Corp
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	47-3096382
Entity Address, Address Line One	475 North Williamson Boulevard
Entity Address, State or Province	FL
Entity Address, City or Town	Daytona Beach
Entity Address, Postal Zip Code	32114
City Area Code	386
Local Phone Number	304-2200
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common stock, par value $0.01 per share
Trading Symbol	BLD
Security Exchange Name	NYSE
Entity Emerging Growth Company	false
Entity Central Index Key	0001633931
Amendment Flag	false