Installed Building Products Reports Record First Quarter 2023 Results; Declares Regular Quarterly Cash Dividend

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 first quarter ended March 31, 2023.

First Quarter 2023 Highlights (Comparisons are to Prior Year Period)

  • Net revenue increased 12.2% to a first quarter record of $659.3 million
    • Installation revenue increased 10.9% to $622.7 million, driven by growth across both IBP’s residential and commercial new construction markets
    • Other revenue, which includes IBP’s manufacturing and distribution operations, increased from $25.9 million to $36.6 million, driven by strong operating results and recent acquisitions
  • Net income increased 45.7% to $49.3 million
  • Adjusted EBITDA* increased 24.7% to a first quarter record of $105.0 million
  • Net income per diluted share increased 52.6% to $1.74
  • Adjusted net income per diluted share* increased 39.6% to $2.15
  • At March 31, 2023, IBP had $218.7 million in cash and cash equivalents
  • Declared first quarter dividend of $0.33 per share which was paid to shareholders on March 31, 2023
  • Declared annual variable dividend of $0.90 per share which was paid to shareholders on March 31, 2023

Recent Developments

  • IBP’s Board of Directors declared the second quarter regular cash dividend of $0.33 per share

“IBP produced record first-quarter sales and profitability due to the exceptional effort of our employees and the excellent service they provide our residential and commercial customers each day. First-quarter sales benefited from our recent acquisitions and robust same branch growth within our multifamily and light commercial end markets. The ongoing strength in multifamily helped drive first-quarter residential sales growth of 7.4%, more than offsetting deceleration in our single-family revenue growth,” stated Jeff Edwards, Chairman and Chief Executive Officer.

Mr. Edwards continued, “Our first quarter’s top-line performance is especially encouraging, as we continued to prioritize installation job profitability over volume. This focused execution helped drive increases in our gross profit margin.”

“Despite continued economic volatility, we believe the residential housing market will remain resilient through the remainder of 2023 as a result of strong employment trends and relatively low existing home inventory levels. We continue to believe we are well positioned to navigate the cyclicality of the U.S. housing market given our strong customer relationships, experienced leadership team, national scale, and diverse product categories and end markets. In addition, our strong balance sheet and high operating cash flow generating capability, support ongoing acquisition activity, dividend distributions, and opportunistic share repurchases,” concluded Mr. Edwards.

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 $46 million of annual revenue and expects to acquire at least $100 million of revenue for the full year.

During the 2023 first quarter and in April, IBP completed the following acquisitions:

  • In February 2023, IBP acquired Four State Insulation, Inc., a residential installer of fiberglass and spray foam insulation with locations in Maryland and West Virginia, serving customers across its home states as well as Virginia and Delaware with annual revenue of approximately $4 million.
  • In March 2023, IBP acquired Anchor Insulation Co., Inc., a Rhode Island-based installer of residential, mechanical and industrial insulation serving residential, commercial and industrial customers across the Northeast from branches in Rhode Island, Connecticut, and Massachusetts with annual revenue of approximately $39 million.
  • In April 2023, IBP acquired Insulco Insulation, LLC., a Florida-based installer of fiberglass and spray foam insulation serving residential and commercial customers with annual revenue of approximately $3 million.

2023 Second Quarter Cash Dividend

IBP’s Board of Directors has approved the Company’s quarterly cash dividend of $0.33 per share, payable on June 30, 2023, to stockholders of record on June 15, 2023. The second quarter regular cash dividend represents a 5% increase from last year’s second-quarter cash dividend payment.

First Quarter 2023 Results Overview

For the first quarter of 2023, net revenue was a quarterly record of $659.3 million, an increase of 12.2% from $587.5 million for the first quarter of 2022. On a consolidated same branch basis, net revenue improved 7.1% from the prior year quarter, which was partially attributable to a 16.5% increase in price/mix during the first quarter, relative to the same period last year. Residential sales growth within our Installation segment was 3.8% on a same branch basis in the quarter, with continued growth of 37.9% in our multifamily end market contributing meaningfully to the same branch sales. Commercial same branch sales growth continued to improve, increasing 22.4% from the prior year quarter.

Gross profit improved 22.1% to $210.4 million from $172.4 million in the prior year quarter. Adjusted gross profit* as a percent of total revenue was 31.9%, which primarily adjusts for the Company’s share-based compensation expense, compared to 29.4% for the same period last year.

Selling and administrative expense, as a percent of net revenue, was 18.5% compared to 17.8% in the prior year quarter. Adjusted selling and administrative expense*, as a percent of net revenue, was 17.9% compared to 16.9% in the prior year quarter.

Net income was $49.3 million, or $1.74 per diluted share, compared to $33.8 million, or $1.14 per diluted share in the prior year quarter. Adjusted net income* was $60.7 million, or $2.15 per diluted share, compared to $45.7 million, or $1.54 per diluted share 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.

Adjusted EBITDA* was $105.0 million, a 24.7% increase from $84.2 million in the prior year quarter, largely due to continued sales growth and higher gross margin.

Conference Call and Webcast

The Company will host a conference call and webcast on May 4, 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 June 4, 2023, by dialing 844-512-2921 (domestic) or 412-317-6671 (international) and entering the passcode 13736413.

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 financial and business model, payment of dividends, the demand for our services and product offerings, the potential impact of the ongoing COVID-19 pandemic, 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 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.

INSTALLED BUILDING PRODUCTS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

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

   

 

Three months ended March 31,

 

2023

 

2022

Net revenue

$

659,309

 

 

$

587,492

 

Cost of sales

 

448,887

 

 

 

415,089

 

Gross profit

 

210,422

 

 

 

172,403

 

Operating expenses

 

 

 

Selling

 

32,607

 

 

 

25,192

 

Administrative

 

89,504

 

 

 

79,144

 

Amortization

 

11,435

 

 

 

11,097

 

Operating income

 

76,876

 

 

 

56,970

 

Other expense, net

 

 

 

Interest expense, net

 

9,670

 

 

 

10,600

 

Other (income) expense

 

(153

)

 

 

145

 

Income before income taxes

 

67,359

 

 

 

46,225

 

Income tax provision

 

18,085

 

 

 

12,403

 

Net income

$

49,274

 

 

$

33,822

 

Other comprehensive (loss) income, net of tax:

 

 

 

Net change on cash flow hedges, net of tax benefit (provision) of $2,252 and $(6,430) for the three months ended March 31, 2023 and 2021, respectively.

 

(6,309

)

 

 

18,111

 

Comprehensive income

$

42,965

 

 

$

51,933

 

Earnings Per Share:

 

 

 

Basic

$

1.76

 

 

$

1.15

 

Diluted

$

1.74

 

 

$

1.14

 

Weighted average shares outstanding:

 

 

 

Basic

 

28,075,678

 

 

 

29,302,396

 

Diluted

 

28,278,220

 

 

 

29,580,731

 

 

 

 

 

Cash dividends declared per share

$

1.23

 

 

$

1.22

 

 

 

 

INSTALLED BUILDING PRODUCTS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

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

   

 

March 31,

 

December 31,

 

2023

 

2022

ASSETS

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

218,690

 

 

$

229,627

 

Accounts receivable (less allowance for credit losses of $10,059 and $9,549 at March 31, 2023 and December 31, 2022, respectively)

 

397,573

 

 

 

397,222

 

Inventories

 

170,115

 

 

 

176,629

 

Prepaid expenses and other current assets

 

76,217

 

 

 

80,933

 

Total current assets

 

862,595

 

 

 

884,411

 

Property and equipment, net

 

126,384

 

 

 

118,774

 

Operating lease right-of-use assets

 

74,602

 

 

 

76,174

 

Goodwill

 

392,625

 

 

 

373,555

 

Customer relationships, net

 

194,850

 

 

 

192,328

 

Other intangibles, net

 

94,751

 

 

 

91,145

 

Other non-current assets

 

33,756

 

 

 

42,545

 

Total assets

$

1,779,563

 

 

$

1,778,932

 

LIABILITIES AND STOCKHOLDER'S EQUITY

 

 

 

Current liabilities

 

 

 

Current maturities of long-term debt

$

31,165

 

 

$

30,983

 

Current maturities of operating lease obligations

 

26,000

 

 

 

26,145

 

Current maturities of finance lease obligations

 

2,588

 

 

 

2,508

 

Accounts payable

 

134,836

 

 

 

149,186

 

Accrued compensation

 

45,613

 

 

 

51,608

 

Other current liabilities

 

76,136

 

 

 

67,631

 

Total current liabilities

 

316,338

 

 

 

328,061

 

Long-term debt

 

830,225

 

 

 

830,171

 

Operating lease obligations

 

48,339

 

 

 

49,789

 

Finance lease obligations

 

6,559

 

 

 

6,397

 

Deferred income taxes

 

25,993

 

 

 

28,458

 

Other long-term liabilities

 

46,887

 

 

 

42,557

 

Total liabilities

 

1,274,341

 

 

 

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 March 31, 2023 and December 31, 2022, respectively

 

 

 

 

 

Common stock; $0.01 par value: 100,000,000 authorized, 33,498,693 and 33,429,557 issued and 28,375,037 and 28,306,482 shares outstanding at March 31, 2023 and December 31, 2022, respectively

 

335

 

 

 

334

 

Additional paid in capital

 

232,503

 

 

 

228,827

 

Retained earnings

 

527,468

 

 

 

513,095

 

Treasury stock; at cost: 5,123,656 and 5,123,075 shares at March 31, 2023 and December 31, 2022, respectively

 

(289,335

)

 

 

(289,317

)

Accumulated other comprehensive income

 

34,251

 

 

 

40,560

 

Total stockholders’ equity

 

505,222

 

 

 

493,499

 

Total liabilities and stockholders’ equity

$

1,779,563

 

 

$

1,778,932

 

INSTALLED BUILDING PRODUCTS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)

   

 

Three months ended March 31,

 

2023

 

2022

Cash flows from operating activities

 

 

 

Net income

$

49,274

 

 

$

33,822

 

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

 

 

 

Depreciation and amortization of property and equipment

 

12,525

 

 

 

11,329

 

Amortization of operating lease right-of-use assets

 

7,316

 

 

 

6,371

 

Amortization of intangibles

 

11,435

 

 

 

11,097

 

Amortization of deferred financing costs and debt discount

 

475

 

 

 

484

 

Provision for credit losses

 

1,678

 

 

 

653

 

Gain on sale of property and equipment

 

(639

)

 

 

(92

)

Noncash stock compensation

 

3,436

 

 

 

3,418

 

Other, net

 

(2,523

)

 

 

790

 

Changes in assets and liabilities, excluding effects of acquisitions

 

 

 

Accounts receivable

 

1,716

 

 

 

(32,700

)

Inventories

 

7,699

 

 

 

(16,300

)

Other assets

 

4,434

 

 

 

169

 

Accounts payable

 

(16,906

)

 

 

16,486

 

Income taxes receivable/payable

 

16,450

 

 

 

11,433

 

Other liabilities

 

(22,537

)

 

 

1,265

 

Net cash provided by operating activities

 

73,833

 

 

 

48,225

 

Cash flows from investing activities

 

 

 

Purchases of investments

 

 

 

 

(49,957

)

Purchases of property and equipment

 

(14,949

)

 

 

(10,362

)

Acquisitions of businesses, net of cash acquired of $10 and $0 in 2022 and 2021, respectively

 

(38,008

)

 

 

(8,050

)

Proceeds from sale of property and equipment

 

741

 

 

 

265

 

Other

 

4,602

 

 

 

(614

)

Net cash used in investing activities

$

(47,614

)

 

$

(68,718

)

 

Three months ended March 31,

 

2023

 

2022

Cash flows from financing activities

 

 

 

Payments on Term Loan

$

(1,250

)

 

$

(1,250

)

Proceeds from vehicle and equipment notes payable

 

8,119

 

 

 

4,752

 

Debt issuance costs

 

 

 

 

(627

)

Principal payments on long-term debt

 

(7,024

)

 

 

(6,618

)

Principal payments on finance lease obligations

 

(727

)

 

 

(521

)

Dividends paid

 

(34,536

)

 

 

(35,426

)

Acquisition-related obligations

 

(1,720

)

 

 

(6,003

)

Repurchase of common stock

 

 

 

 

(49,865

)

Surrender of common stock awards by employees

 

(18

)

 

 

 

Net cash used in financing activities

 

(37,156

)

 

 

(95,558

)

Net change in cash and cash equivalents

 

(10,937

)

 

 

(116,051

)

Cash and cash equivalents at beginning of period

 

229,627

 

 

 

333,485

 

Cash and cash equivalents at end of period

$

218,690

 

 

$

217,434

 

Supplemental disclosures of cash flow information

 

 

 

Net cash paid during the period for:

 

 

 

Interest

$

14,658

 

 

$

14,293

 

Income taxes, net of refunds

 

1,524

 

 

 

1,088

 

Supplemental disclosure of noncash activities

 

 

 

Right-of-use assets obtained in exchange for operating lease obligations

$

5,650

 

 

$

5,514

 

Property and equipment obtained in exchange for finance lease obligations

 

957

 

 

 

544

 

Seller obligations in connection with acquisition of businesses

 

6,035

 

 

 

1,878

 

Unpaid purchases of property and equipment included in accounts payable

 

2,316

 

 

 

1,884

 

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.

INSTALLED BUILDING PRODUCTS, INC.

SEGMENT INFORMATION

(unaudited, in thousands)

   

 

Three months ended March 31, 2023

 

Installation

 

Other

 

Eliminations

 

Consolidated

Revenue

$

622,742

 

 

$

38,722

 

 

$

(2,155

)

 

$

659,309

 

Cost of sales (1)

 

410,384

 

 

 

28,459

 

 

 

(1,766

)

 

 

437,077

 

Segment gross profit

$

212,358

 

 

$

10,263

 

 

$

(389

)

 

$

222,232

 

Segment gross profit percentage

 

34.1

%

 

 

26.5

%

 

 

18.1

%

 

 

33.7

%

 

Three months ended March 31, 2022

 

Installation

 

Other

 

Eliminations

 

Consolidated

Revenue

$

561,631

 

 

$

26,650

 

 

$

(789

)

 

$

587,492

 

Cost of sales (1)

 

385,692

 

 

 

19,373

 

 

 

(609

)

 

$

404,456

 

Segment gross profit

$

175,939

 

 

$

7,277

 

 

$

(180

)

 

$

183,036

 

Segment gross profit percentage

 

31.3

%

 

 

27.3

%

 

 

22.8

%

 

 

31.2

%

(1)

 

Cost of sales included in segment gross profit is exclusive of depreciation and amortization for the three months ended March 31, 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 March 31,

 

2023

 

2022

Segment gross profit - consolidated

$

222,232

 

 

$

183,036

 

Depreciation and amortization (1)

 

11,810

 

 

 

10,633

 

Gross profit, as reported

 

210,422

 

 

 

172,403

 

Operating expenses

 

133,546

 

 

 

115,433

 

Operating income

 

76,876

 

 

 

56,970

 

Other expense, net

 

9,517

 

 

 

10,745

 

Income before income taxes

$

67,359

 

$

46,225

(1)

 

Depreciation and amortization is excluded from segment gross profit for the three months ended March 31, 2023 and 2022.

INSTALLED BUILDING PRODUCTS, INC.

REVENUE BY END MARKET

(unaudited, in thousands)

   

 

Three months ended March 31,

 

2023

 

 

 

2022

 

 

Installation:

 

 

 

 

 

 

 

Residential new construction

$

475,095

 

72

%

 

$

442,404

 

75

%

Repair and remodel

 

37,675

 

6

%

 

 

32,641

 

6

%

Commercial

 

109,972

 

16

%

 

 

86,586

 

15

%

Net revenue, Installation

 

622,742

 

94

%

 

 

561,631

 

96

%

Other

 

36,567

 

6

%

 

 

25,861

 

4

%

Net revenue, as reported

$

659,309

 

100

%

 

$

587,492

 

100

%

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.

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 March 31,

 

2023

 

2022

Net income, as reported

$

49,274

 

 

$

33,822

 

Adjustments for adjusted net income

 

 

 

Share based compensation expense

 

3,436

 

 

 

3,418

 

Acquisition related expenses

 

569

 

 

 

664

 

COVID-19 expenses (1)

 

1

 

 

 

301

 

Amortization expense (2)

 

11,435

 

 

 

11,097

 

Legal Reserve

 

 

 

 

565

 

Tax impact of adjusted items at a normalized tax rate (3)

 

(4,015

)

 

 

(4,172

)

Adjusted net income

$

60,700

 

 

$

45,695

 

Weighted average shares outstanding (diluted)

 

28,278,220

 

 

 

29,580,731

 

Diluted net income per share, as reported

$

1.74

 

 

$

1.14

 

Adjustments for adjusted net income, net of tax impact, per diluted share (4)

 

0.41

 

 

 

0.40

 

Diluted adjusted net income per share

$

2.15

 

 

$

1.54

 

(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.

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 March 31,

 

 

2023

 

2022

Gross profit, as reported

 

$

210,422

 

 

$

172,403

 

Share based compensation expense

 

 

165

 

 

 

149

 

COVID-19 expense(1)

 

 

1

 

 

 

2

 

Adjusted gross profit

 

$

210,588

 

 

$

172,554

 

  

 

 

 

 

Gross profit margin

 

 

31.9

%

 

 

29.3

%

Adjusted gross profit margin

 

 

31.9

%

 

 

29.4

%

(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 March 31,

 

 

2023

 

2022

Selling expense

 

$

32,607

 

 

$

25,192

 

Administrative expense

 

 

89,504

 

 

 

79,144

 

Selling and administrative, as reported

 

 

122,111

 

 

 

104,336

 

Share based compensation expense

 

 

3,271

 

 

 

3,269

 

Acquisition related expense

 

 

569

 

 

 

664

 

COVID-19 expenses(1)

 

 

1

 

 

 

299

 

Legal reserve

 

 

 

 

 

565

 

Adjusted selling and administrative

 

$

118,270

 

 

$

99,539

 

  

 

 

 

 

Selling and administrative - % Net revenue

 

 

18.5

%

 

 

17.8

%

Adjusted selling and administrative - % Net revenue

 

 

17.9

%

 

 

16.9

%

(1)

 

Addback of employee pay and employee medical expenses directly attributable to COVID-19.

INSTALLED BUILDING PRODUCTS, INC.

RECONCILIATION OF GAAP TO NON-GAAP MEASURES

ADJUSTED EBITDA CALCULATIONS

(unaudited, in thousands) 

 

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

   

 

 

Three months ended March 31,

 

 

2023

 

2022

Net income, as reported

 

$

49,274

 

 

$

33,822

 

Interest expense

 

 

9,670

 

 

 

10,600

 

Provision for income tax

 

 

18,085

 

 

 

12,403

 

Depreciation and amortization

 

 

23,960

 

 

 

22,425

 

EBITDA

 

 

100,989

 

 

 

79,250

 

Acquisition related expenses

 

 

569

 

 

 

664

 

Share based compensation expense

 

 

3,436

 

 

 

3,418

 

COVID-19 expenses(1)

 

 

1

 

 

 

301

 

Legal reserve

 

 

 

 

 

565

 

Adjusted EBITDA

 

$

104,995

 

 

$

84,198

 

 

 

 

 

 

Net profit margin

 

 

7.5

%

 

 

5.8

%

EBITDA margin

 

 

15.3

%

 

 

13.5

%

Adjusted EBITDA margin

 

 

15.9

%

 

 

14.3

%

(1)

 

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

INSTALLED BUILDING PRODUCTS, INC.

SUPPLEMENTARY TABLE

(unaudited)

   

 

 

Three months ended March 31,

 

 

2023

 

2022

Period-over-period Growth

 

 

 

 

Consolidated Sales Growth

 

12.2%

 

34.4%

Consolidated Same Branch Sales Growth

 

7.1%

 

22.5%

 

 

 

 

 

Installation

 

 

 

 

Sales Growth

 

10.9%

 

30.0%

Same Branch Sales Growth

 

7.0%

 

22.2%

 

 

 

 

 

Single-Family Sales Growth

 

1.6%

 

37.4%

Single-Family Same Branch Sales Growth

 

(2.6)%

 

29.4%

 

 

 

 

 

Multi-Family Sales Growth

 

38.1%

 

24.6%

Multi-Family Same Branch Sales Growth

 

37.9%

 

23.1%

 

 

 

 

 

Residential Sales Growth

 

7.4%

 

35.2%

Residential Same Branch Sales Growth

 

3.8%

 

28.3%

 

 

 

 

 

Commercial Sales Growth(1)

 

27.0%

 

13.0%

Commercial Same Branch Sales Growth

 

22.4%

 

5.9%

 

 

 

 

 

Other (2)

 

 

 

 

Sales Growth

 

45.3%

 

407.3%

Same Branch Sales Growth

 

12.9%

 

50.8%

 

 

 

 

 

Same Branch Sales Growth - Installation

 

 

 

 

Volume Growth(3)

 

(9.3)%

 

9.7%

Price/Mix Growth(3)

 

16.5%

 

14.6%

 

 

 

 

 

U.S. Housing Market(4)

 

 

 

 

Total Completions Growth

 

11.7%

 

(3.4)%

Single-Family Completions Growth

 

1.4%

 

1.5%

Multi-Family Completions Growth

 

50.8%

 

(18.7)%

(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.

INSTALLED BUILDING PRODUCTS, INC.

INCREMENTAL REVENUE AND ADJUSTED EBITDA MARGINS

(unaudited, in thousands)

 

Revenue Increase

 

 

Three months ended March 31,

 

 

2023

 

% Total

 

2022

 

% Total

Same Branch

 

$

41,430

 

57.7

%

 

$

98,267

 

65.3

%

Acquired

 

 

30,387

 

42.3

%

 

 

52,159

 

34.7

%

Total

 

$

71,817

 

100.0

%

 

$

150,426

 

100.0

%

Adjusted EBITDA Margin Contributions

 

 

Three months ended March 31,

 

 

2023

 

% Margin

 

2022

 

% Margin

Same Branch

 

$

16,332

 

39.4

%

 

$

22,529

 

22.9

%

Acquired

 

 

4,465

 

14.7

%

 

 

7,186

 

13.8

%

Total

 

$

20,797

 

29.0

%

 

$

29,715

 

19.8

%

 

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