Installed building products reports record results for fourth quarter and fiscal year 2019
Columbus, ohio--(business wire)--installed building products, inc. (the "company" or "ibp") (nyse:ibp), an industry-leading installer of insulation and complementary building products, today announced record results for the fourth quarter and fiscal year ended december 31, 2019. fourth quarter 2019 highlights (comparisons are to prior year period) net revenue increased 13.6% to a quarterly record of $401.2 million large commercial construction revenue increased 10.2% net income increased 16.5% to a record $19.2 million adjusted ebitda* increased 27.5% to a fourth quarter record of $55.6 million net income per diluted share increased 18.5% to $0.64 adjusted net income per diluted share* increased 27.8% to $0.92 in november 2019, acquired premier building supply, llc., a residential insulation and garage door installer in utah with annual revenues of $23.0 million in december 2019, acquired gulf coast insulation, a spray foam and fiberglass insulation installer in florida with annual revenues of $4.7 million in december 2019, the installed building products foundation announced that the organization exceeded its goal of donating $1 million during the year to nonprofits and individuals in december 2019, the company completed the repricing of its existing $200 million term loan b facility “ibp achieved another strong year of record revenue and earnings,” stated jeff edwards, chairman and chief executive officer. “as expected, 2019 benefited from a pricing environment more in line with historical trends compared to the pricing landscape in 2018, and positive overall market dynamics. in addition, our geographic, end market, and product diversification strategies continue to strengthen our results. revenue from commercial customers was 18.2% of total revenue in 2019, compared to 16.5% in 2018, while non-insulation revenue was 35.8% of total revenue compared to 34.4% in the prior year. in addition, 2019 was another strong year for acquisition growth as we completed eight acquisitions, representing $64 million of annual revenue during the year.” “our record results reflect the ongoing dedication of our more than 8,000 employees across the u.s. our commitment to our employees through our financial wellness program, longevity stock program, and various community engagement programs continue to have a positive impact on employee retention rates as evidenced by our improved employee turnover in 2019 which remains well below the industry average.” “as we look to the new year, the housing market remains healthy, the pricing environment continues to follow historic trends, and we expect to continue to benefit from our national platform, profit focused business model, and the increasing diversification of our business. i am extremely proud of the financial and operating accomplishments we achieved in 2019 and remain excited by the continued opportunities ibp has to grow and create even greater value for our shareholders,” concluded mr. edwards. fourth quarter 2019 results overview for the fourth quarter of 2019, net revenue was $401.2 million, an increase of 13.6% from $353.1 million in the fourth quarter of 2018. on a same branch basis, net revenue improved 9.7% from the prior year quarter. residential same branch sales growth was 5.5% in the quarter, attributable to price gains and more favorable customer and product mix, compared to total completions growth of 16.5%. our large commercial construction end-market had organic growth of 10.2%. gross profit improved 21.7% to $120.0 million from $98.6 million in the prior year quarter. adjusted gross profit* as a percent of total revenue was 29.9%, compared to 27.9% for the same period last year. selling and administrative expense, as a percent of net revenue, was 19.6% compared to 18.7% in the prior year quarter. adjusted selling and administrative expense*, as a percent of net revenue, was 18.6% compared to 18.0% in the prior year quarter. net income was $19.2 million, or $0.64 per diluted share, compared to $16.5 million, or $0.54 per diluted share, in the prior year quarter. adjusted net income* was $27.6 million, or $0.92 per diluted share, compared to $21.8 million, or $0.72 per diluted share in the prior year quarter. adjusted net income adjusts for the impact of non-core items in both periods and includes an addback for non-cash amortization expense related to acquisitions. adjusted ebitda* was $55.6 million, a 27.5% increase from $43.6 million in the prior year quarter, largely due to higher sales and improved gross profit. adjusted ebitda, as a percent of net revenue, was 13.9% compared to 12.4% in the prior year quarter. full year 2019 results overview for the year ended december 31, 2019, net revenue was $1,511.6 million, an increase of 13.1% from $1,336.4 million in 2018. on a same branch basis, net revenue improved 8.6% from the prior year, primarily due to price gains and more favorable customer and product mix, as well as growth in the number of completed jobs. same branch residential revenue increased 5.9% as compared to a 6.0% increase in total u.s. housing completions. gross profit improved 17.0% to $434.8 million from $371.6 million in the prior year. gross margin was 28.8% compared to 27.8% in the prior year. adjusted gross profit* as a percent of total revenue was 28.8%, compared to 27.9% for the same period last year. selling and administrative expense, as a percentage of net revenue, was 19.1% compared to 18.9% in the prior year. adjusted selling and administrative expense, as a percentage of net revenue was 18.4% compared to 18.1% in the prior year. net income was $68.2 million, or $2.28 per diluted share, compared to $54.7 million, or $1.75 per diluted share in the prior year. adjusted net income was $98.3 million, or $3.29 per diluted share, compared to $83.5 million, or $2.67 per diluted share in the prior year. for the full year of 2019, adjusted ebitda* was $196.8 million, a 19.7% increase from $164.4 million in the prior year. adjusted ebitda, as a percentage of net revenue, was 13.0%, compared to 12.3% in the prior year. operating income was $121.2 million, a 30.0% increase from $93.2 million in the prior year. the incremental adjusted ebitda margin* on same branch revenue growth was 21.0% (please refer to the supplementary tables at the end of this press release). net cash from operating activities was $123.1 million, an increase of 27.4% from $96.6 million in the prior year. stock repurchase program the company currently has approximately $60 million of remaining availability under our stock repurchase program. our board of directors has approved an extension of the current program, which had been scheduled to expire on february 28, 2020, and now will remain in effect until march 1, 2021, unless extended by the board of directors. the company did not make any repurchases under the program in 2019. under the repurchase program, the company may purchase shares of its common stock through open market transactions, accelerated share repurchase transactions, privately negotiated transactions, block purchases or otherwise in accordance with applicable federal securities laws, including rule 10b-18 of the securities exchange act of 1934, as amended and pursuant to any trading plan that may be adopted in accordance with rule 10b5-1 of the securities exchange act of 1934, as amended. the timing and amount of any repurchases under this program will be determined by the company’s management at its discretion based on a variety of factors, including the market price of our common stock, corporate considerations, general market and economic conditions, and legal requirements. the program may be modified, discontinued or suspended at any time or from time to time. the company anticipates funding for this program to come from available corporate funds, including cash on hand and future cash flow. conference call and webcast the company will host a conference call and webcast on february 27, 2020 at 10:00 a.m. eastern time to discuss these results. to participate in the call, please dial 877-407-0792 (domestic) or 201-689-8263 (international). the live webcast will be available at www.installedbuildingproducts.com in the investor relations section. a replay of the conference call will be available through march 27, 2020, by dialing 844-512-2921 (domestic) or 412-317-6671 (international) and entering the passcode 13698575. 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 from its national network of over 180 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 industry conditions, our financial and business model, our efforts to navigate the material pricing environment, our ability to increase selling prices, the demand for our services and product offerings, expansion of our national footprint and end markets, diversification of our products, our ability to capitalize on the new home and commercial construction recovery, our ability to grow and strengthen our market position, our ability to pursue and integrate value-enhancing acquisitions, our ability to improve sales and profitability, 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, general economic and industry conditions, the material price environment, the timing of increases in our selling prices, 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, 2018, as the same may be updated from time to time in our subsequent filings with the securities and exchange commission. any forward-looking statement made by the company in this press release speaks only as of the date hereof. new risks and uncertainties arise from time to time, and it is impossible for the company to predict these events or how they may affect it. the company has no obligation, and does not intend, to update any forward-looking statements after the date hereof, except as required by federal securities laws. *use of non-gaap financial measures in addition to the financial measures prepared in accordance with u.s. generally accepted accounting principles (“gaap”), this press release contains the non-gaap financial measures of adjusted ebitda, adjusted ebitda margin (i.e., adjusted ebitda divided by net revenue), adjusted net income, adjusted net income per diluted share, adjusted gross profit and adjusted selling and administrative expense. the reasons for the use of these measures, reconciliations of adjusted ebitda, adjusted net income, adjusted net income per diluted share, adjusted gross profit, and adjusted selling and administrative expense to the most directly comparable gaap measures and other information relating to these measures are included below following the unaudited condensed consolidated financial statements. non-gaap financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for ibp’s financial results prepared in accordance with gaap. three months ended december 31, twelve months ended december 31, 2019 2018 2019 2018 $ 401,231 $ 353,121 $ 1,511,629 $ 1,336,432 281,193 254,484 1,076,809 964,841 120,038 98,637 434,820 371,591 20,585 17,805 75,016 67,105 58,112 48,340 214,134 185,850 6,445 5,740 24,510 25,419 34,896 26,752 121,160 93,217 8,321 5,483 28,104 20,496 70 118 451 535 26,505 21,151 92,605 72,186 7,311 4,676 24,446 17,438 $ 19,194 $ 16,475 $ 68,159 $ 54,748 1,309 (3,503 ) (6,712 ) (1,050 ) $ 20,503 $ 12,972 $ 61,447 $ 53,698 $ 0.64 $ 0.54 $ 2.29 $ 1.76 $ 0.64 $ 0.54 $ 2.28 $ 1.75 29,785,548 30,321,803 29,752,644 31,107,231 29,972,444 30,396,412 29,873,106 31,229,558 december 31, december 31, 2019 2018 $ 177,889 $ 90,442 37,961 10,060 244,519 214,121 74,606 61,162 46,974 35,760 581,949 411,545 106,410 90,117 45,691 - 195,652 173,049 153,562 149,790 16,215 10,157 $ 1,099,479 $ 834,658 $ 24,164 $ 22,642 15,459 - 2,747 4,806 98,871 96,949 33,636 27,923 39,272 29,366 214,149 181,686 545,031 432,182 29,785 - 3,597 3,824 9,175 6,695 47,711 27,773 849,448 652,160 - - 329 327 190,230 181,815 173,371 105,212 (106,756 ) (104,425 ) (7,143 ) (431 ) 250,031 182,498 $ 1,099,479 $ 834,658 twelve months ended december 31, 2019 2018 $ 68,159 $ 54,748 38,862 33,306 15,691 - 24,510 25,419 1,184 1,164 4,312 2,630 3,725 1,164 (140 ) (1,098 ) 8,727 7,839 5,341 470 (29,582 ) (30,166 ) (10,597 ) (15,717 ) (16,959 ) (4,552 ) 947 8,146 (3,944 ) 10,273 12,831 3,007 123,067 96,633 (52,795 ) (22,818 ) 25,061 42,782 (50,167 ) (35,232 ) (51,706 ) (57,740 ) 761 1,958 (2,887 ) (3,019 ) (131,733 ) (74,069 ) 300,000 - - 100,000 (195,750 ) (2,750 ) 33,090 25,443 (6,691 ) (1,992 ) (21,316 ) (14,130 ) (4,157 ) (5,604 ) (6,732 ) (3,954 ) - (89,363 ) (2,331 ) (2,282 ) 96,113 5,368 87,447 27,932 90,442 62,510 $ 177,889 $ 90,442 $ 20,943 $ 20,075 22,633 4,950 18,907 - (2,946 ) - 2,809 2,208 7,543 7,540 1,903 1,773 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. the table below reconciles adjusted net income to the most directly comparable gaap financial measure, net income, for the periods presented therein. per share figures may reflect rounding adjustments and consequently totals may not appear to sum. three months ended december 31, twelve months ended december 31, 2019 2018 2019 2018 $ 19,194 $ 16,475 $ 68,159 $ 54,748 951 - 3,725 1,164 2,286 1,756 8,727 7,846 560 800 2,058 2,674 - - - 604 - 214 746 843 - - - 824 1,200 200 1,200 990 - (466 ) - (831 ) 6,445 5,740 24,510 25,419 (3,021 ) (2,086 ) (10,815 ) (10,002 ) - (810 ) - (810 ) $ 27,615 $ 21,823 $ 98,310 $ 83,469 29,972,444 30,396,412 29,873,106 31,229,558 $ 0.64 $ 0.54 $ 2.28 $ 1.75 0.28 0.18 1.01 0.92 $ 0.92 $ 0.72 $ 3.29 $ 2.67 three months ended december 31, twelve months ended december 31, 2019 2018 2019 2018 $ 120,038 $ 98,637 $ 434,820 $ 371,591 94 96 374 846 - - - 711 - 214 746 843 - (466 ) - (831 ) $ 120,132 $ 98,481 $ 435,940 $ 373,160 29.9 % 27.9 % 28.8 % 27.9 % 1 employer match upon completion of the program, partially offset by waived executive bonuses (see below adjusted selling & administrative) 2 addback of costs related to organic branch expansion for alpha locations three months ended december 31, twelve months ended december 31, 2019 2018 2019 2018 $ 20,585 $ 17,805 $ 75,016 $ 67,105 58,112 48,340 214,134 185,850 $ 78,697 $ 66,145 $ 289,150 $ 252,955 2,192 1,660 8,353 7,000 560 800 2,058 2,674 - - - (107 ) - - - 824 1,200 200 1,200 990 $ 74,745 $ 63,485 $ 277,539 $ 241,574 18.6 % 18.0 % 18.4 % 18.1 % the table below reconciles adjusted ebitda to the most directly comparable gaap financial measure, net income, for the periods presented therein. three months ended december 31, twelve months ended december 31, 2019 2018 2019 2018 $ 19,194 $ 16,475 $ 68,159 $ 54,748 8,321 5,483 28,104 20,496 7,311 4,676 24,446 17,438 16,732 14,480 63,372 58,725 51,558 41,114 184,081 151,407 560 800 2,058 2,674 2,286 1,756 8,727 7,846 - - - 604 - 214 746 843 - - - 824 1,200 200 1,200 990 - (466 ) - (831 ) $ 55,604 $ 43,618 $ 196,812 $ 164,357 13.9 % 12.4 % 13.0 % 12.3 % three months ended december 31, twelve months ended december 31, 2019 2018 2019 2018 13.6 % 17.8 % 13.1 % 18.0 % 9.7 % 11.1 % 8.6 % 11.5 % 8.5 % 16.6 % 10.5 % 20.0 % 3.5 % 8.6 % 4.8 % 12.1 % 10.0 % 18.1 % 10.9 % 18.4 % 5.5 % 10.9 % 5.9 % 11.4 % 3.3 % 3.1 % 2.6 % 6.1 % 6.3 % 7.8 % 5.4 % 5.4 % 10.2 % 13.0 % 14.3 % 11.5 % 16.5 % -7.5 % 6.0 % 2.8 % 14.9 % -2.9 % 7.6 % 5.6 % three months ended december 31, twelve months ended december 31, 2019 % total 2018 % total 2019 % total 2018 % total $ 34,109 70.9 % $ 33,276 62.5 % $ 114,863 65.6 % $ 129,969 63.9 % 14,001 29.1 % 19,976 37.5 % 60,334 34.4 % 73,536 36.1 % $ 48,110 100.0 % $ 53,252 100.0 % $ 175,197 100.0 % $ 203,505 100.0 % adj ebitda adj ebitda adj ebitda adj ebitda contribution contribution contribution contribution $ 10,048 29.5 % $ 5,152 15.5 % $ 24,084 21.0 % $ 15,434 11.9 % 1,938 13.8 % 2,262 11.3 % 8,371 13.9 % 7,870 10.7 % $ 11,986 24.9 % $ 7,414 13.9 % $ 32,455 18.5 % $ 23,304 11.5 %
