BLD TopBuild Corp

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

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FORM 8-K

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CURRENT REPORT

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

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Date of report (Date of earliest event reported): August 6, 2024

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TopBuild Corp.

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(Exact name of registrant as specified in its charter)

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

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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):

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☐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))

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

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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).

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Emerging growth company ☐

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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. ☐

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Item 2.02.  Results of Operations and Financial Condition.

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On August 6, 2024, TopBuild Corp., a Delaware corporation (the “Company”), issued a press release announcing its financial results for the quarter ended June 30, 2024 (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.

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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.

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Item 7.01.  Regulation FD Disclosure.

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On August 6, 2024, 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.

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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.

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Item 9.01.  Financial Statements and Exhibits.

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(d)  Exhibits

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SIGNATURES

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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.

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Exhibit 99.1

TopBuild Reports Second Quarter Results

Both segments drive growth, resulting in second quarter sales of $1.37 billion

Delivered gross margin of 31% and adjusted EBITDA margin of 20.3%

Revises 2024 guidance to $5.3 to $5.5 billion in revenue and $1.055 to $1.125 billion in adjusted EBITDA

DAYTONA BEACH, FL – August 6, 2024 — TopBuild Corp. (NYSE:BLD) a leading installer and specialty distributor of insulation and building material products to the construction industry in the United States and Canada today reported results for the second quarter ended June 30, 2024.

“We’re pleased with our solid results in the second quarter, as our teams continued to focus on growth and profitability across the business. We grew sales 3.7% to $1.37 billion and delivered adjusted EBITDA of $277.7 million and adjusted EBITDA margin of 20.3%. Excluding the benefit from higher-than-normal multi-family and commercial margins in the second and third quarter of 2023,¹ we delivered our highest level of sales and profitability in our history,” said Robert Buck, President and Chief Executive Officer.

“Both segments delivered sales growth in the second quarter, however volume was less than anticipated due to higher interest rates, project delays and supply constraints that continue to impact results across some residential and commercial end markets. Our residential single-family sales continued to improve, and our backlog continues to support our multi-family sales. Commercial and industrial backlogs and bidding activity remain robust.

“The long-term fundamentals for our business are strong, supported by the undersupply of housing in the United States, increasing household formations, the potential for moderating interest rates, and strengthening demand for greater energy efficiency. We expect to continue driving profitable growth and strong free cash flows for TopBuild to reinvest or return to shareholders.

“Year to date, we have completed 6 acquisitions, and our M&A pipeline is very healthy. We are also returning capital to shareholders, and as of June 30, we repurchased approximately 1.25 million shares totaling $505.2 million, underscoring management and our Board’s continued confidence in our future growth and capital allocation approach,” concluded Mr. Buck.

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¹ The Company noted that its results for the second quarter of 2023 included an estimated $10 million margin benefit related to certain multi-family/commercial business. In the third quarter of 2023, a similar benefit is estimated to be $15 million.

Financial Highlights

(comparisons are to the periods ended June 30, 2023)

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Sales Drivers

(comparisons are to the periods ended June 30, 2023)

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Segment Profitability

(comparisons are to the periods ended June 30, 2023)

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Capital Allocation

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2024 Acquisitions

Year to date, the Company has completed the acquisition of 6 insulation companies which are expected to generate approximately $107 million in annual revenue. They are listed in the chart below.

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Share Repurchases

During the quarter, TopBuild repurchased approximately 1.25 million shares totaling $505.2 million (average price of $405.43 per share). $649.2 million remained under the current authorization.

2024 Outlook²

The Company revised its full year 2024 guidance as indicated below. The sales guidance assumes mid-single digit residential growth and low single digit commercial/industrial growth for the year. The Company noted that the revision largely reflects timing of demand, rather than any underlying changes in the business.

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² This outlook reflects management’s current view of present and future market conditions and is based on assumptions such as housing starts, general and administrative expenses, 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.  A reconciliation of non-GAAP targets to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty regarding, and the potential variability of, the costs and expenses that may be incurred in the future and therefore, cannot be reasonably predicted. The effect of these excluded items may be significant.  Factors that could cause actual long-term results to differ materially from TopBuild’s current expectations are discussed below and are also detailed in the Company’s most recent Annual Report on Form 10-K and subsequent SEC reports.

Conference Call

A conference call to discuss second quarter 2024 financial results is scheduled for today, Tuesday, August 6, at 9:00 a.m. Eastern Time. The call may be accessed by dialing (877) 407-9037. A simultaneous webcast of the call, along with management’s formal remarks and a presentation, will be available on the Company’s website at www.topbuild.com shortly before the call begins.

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 Installation segment which has approximately 250 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 170 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 can be identified by words such as “will,” “would,” “anticipate,” “expect,” “believe,” “designed,” “plan,” “may,” “project,” “estimate” 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

PI Aquino

pi.aquino@topbuild.com
386-763-8801

(tables follow)

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TopBuild Corp.

Condensed Consolidated Statements of Operations (Unaudited)

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

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TopBuild Corp.

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

(in thousands)

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TopBuild Corp.

Condensed Consolidated Balance Sheets and Other Financial Data (Unaudited)

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

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

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TopBuild Corp.

Segment Data (Unaudited)

(dollars in thousands)

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