Installed building products reports results for fourth quarter and
full year 2015
Columbus, ohio--(business wire)--installed building products, inc. (the “company” or “ibp”) (nyse: ibp), an industry-leading installer of insulation and complementary building products, announced today results for the fourth quarter and full year ended december 31, 2015. fourth quarter 2015 highlights net revenue increased 31.8% to $191.5 million adjusted ebitda increased 54.1% to $23.5 million operating income increased 62.1% to $15.1 million adjusted net income from continuing operations per diluted share increased 50.0% to $0.30 full year 2015 highlights net revenue increased 27.9% to a record $662.7 million adjusted ebitda increased 61.7% to a record $71.2 million operating income increased 75.7% to a record $45.0 million adjusted net income from continuing operations per diluted share increased 64.8% to $0.89 “throughout 2015, we achieved strong quarter-over-quarter growth and ended the year with record revenues and earnings,” stated jeff edwards, chairman and chief executive officer. “our results reflect our continued focus and delivery on our growth strategy. revenues increased nearly 28% to a record $662.7 million, inclusive of $84.1 million of acquired revenues, as well as strong same branch sales, which have exceeded the growth in u.s. housing completions for each quarter we have been a public company. we also achieved higher margins in 2015 on greater revenues and improved operating efficiencies, so that we achieved record adjusted ebitda and net income.” “acquisitions remain a strong component of our growth strategy, and we continue to have a robust pipeline of potential acquisitions. we believe 2016 will be another year with strong organic growth, the contribution of additional acquisitions, and a housing market that continues to show signs of recovery,” concluded mr. edwards. fourth quarter 2015 results overview for the fourth quarter of 2015, net revenue was $191.5 million, an increase of 31.8% from $145.3 million in the fourth quarter of 2014. on a same branch basis, net revenue improved 14.8% from the prior year quarter, with over 60% of the growth attributable to an increase in the number of completed jobs, and the remainder through price gains and a more favorable customer and product mix. single family same branch sales increased 18.1% as compared to an increase of 4.6% in single family completions (please refer to the supplementary tables at the end of this press release). gross profit improved 38.9% to $54.5 million for the 2015 fourth quarter from $39.2 million in the prior year quarter. gross margin improved to 28.4% from 27.0% in the prior year quarter, primarily due to favorable leverage on higher net revenue and increased cost efficiencies. selling, general and administrative expense, as a percentage of net revenue, for the 2015 fourth quarter was 19.4% compared to 20.1% in the prior year quarter, primarily due to the company’s ability to leverage costs on higher net revenues. adjusted ebitda for the 2015 fourth quarter was $23.5 million, a 54.1% increase from $15.2 million in the prior year quarter, largely due to higher net revenue and improvements in gross margin and sg&a leverage. adjusted ebitda as a percentage of net revenue grew 180 basis points to 12.3%, compared to 10.5% in the prior year quarter. operating income was $15.1 million, an increase of 62.1% from $9.3 million in the prior year quarter. for the 2015 fourth quarter, adjusted net income from continuing operations was $9.3 million, or $0.30 per diluted share, compared to $6.2 million, or $0.20 per diluted share in the prior year quarter. adjusted net income from continuing operations adjusts for the impact of non-core items in both periods. on a gaap basis, net income attributable to common stockholders was $9.3 million, or $0.30 per diluted share, compared to net income attributable to common stockholders of $5.1 million, or $0.16 per diluted share, in the prior year quarter. the company completed nine acquisitions during 2015, with approximately $109.0 million in annualized revenue. during the 2015 fourth quarter the company made the following three acquisitions: in november 2015, we acquired ontario, california based sierra insulation contractors, inc. and apple valley, california, based eco-tect insulation, inc., both of which enhance the company’s presence in southern, california and had combined trailing twelve month revenues of approximately $7.6 million at september 30, 2015 in november 2015, we acquired the overhead door company of burlington, inc. operating as the overhead door company of burlington and the overhead door company of concord, which enhances the company’s presence in vermont and new hampshire, with trailing twelve month revenues of $7.5 million at september 30, 2015 in december 2015, we acquired biofoam of north carolina, llc d/b/a prime energy group with locations in raleigh and charlotte, north carolina, which enhances the company’s presence in north carolina, with trailing twelve month revenues of approximately $8.9 million at october 30, 2015 full year 2015 results overview for the year ended december 31, 2015, net revenue was $662.7 million, an increase of 27.9% from $518.0 million in 2014. on a same branch basis, net revenue improved 11.7% from the prior year, with approximately 50% of the increase attributable to growth in the number of completed jobs and the remainder achieved through price gains and more favorable customer and product mix. gross profit improved 34.4% to $188.3 million from $140.1 million in the prior year. gross margin expanded to 28.4% from 27.0% in the prior year. selling, general and administrative expense, as a percentage of net revenue, was 20.7% compared to 21.5% in the prior year. for the full year of 2015, adjusted ebitda was $71.2 million, a 61.7% increase from $44.0 million in the prior year. adjusted ebitda, as a percentage of net revenue, improved to 10.7%, or 220 basis points, compared to 8.5% in the prior year. operating income was $45.0 million, a 75.7% increase from $25.6 million in the prior year. the incremental adjusted ebitda margin on same branch revenue growth was 23.3% (please refer to the supplementary tables at the end of this press release). adjusted net income from continuing operations was $27.9 million, or $0.89 per share, compared to $16.2 million, or $0.54 per share in the prior year. adjusted net income from continuing operations adjusts for the impact of non-core items in both periods. on a gaap basis, net income attributable to common stockholders was $26.5 million, or $0.85 per diluted share, compared to a net loss of $6.0 million, or a $0.20 net loss per share, in the prior year. conference call and webcast the company will host a conference call and webcast on wednesday, march 2, 2016 at 10:00 a.m. eastern time to discuss these results. to participate in the call, please dial 877-407-9039 (domestic) or 201-689-8470 (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 april 2, 2016, by dialing 877-870-5176 (domestic) or 858-384-5517 (international) and entering the passcode 13630353. about installed building products installed building products, inc. is the nation's second largest insulation installer for the residential new construction market and is also a diversified installer of complementary building products, including garage doors, rain gutters, shower doors, closet shelving and mirrors, throughout the united states. the company manages all aspects of the installation process for its customers, including direct purchases of materials from national manufacturers, 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 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 demand for our services, expansion of our national footprint, our ability to capitalize on the new home construction recovery, our ability to strengthen our market position, our ability to pursue value-enhancing acquisitions, our ability to improve profitability and expectations for demand for our services for the remainder of 2016. 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 factors discussed in the “risk factors” section of the company’s annual report on form 10-k for the year ended december 31, 2014, 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. 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 and adjusted net income from continuing operations. the reasons for the use of adjusted ebitda, adjusted net income from continuing operations and adjusted eps, reconciliations of adjusted ebitda and adjusted net income from continuing operations to the most directly comparable gaap measures and other information relating to adjusted ebitda and adjusted net income from continuing operations are included below following the unaudited condensed consolidated financial statements. reconciliation of non-gaap financial measures adjusted ebitda and adjusted net income from continuing operations measure performance by adjusting ebitda and gaap net income attributable to common stockholders, 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 (loss) 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 (loss) 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 (used in) 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 from continuing operations 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 accretion charges on redeemable preferred stock, discontinued operations, public offering costs, 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. accordingly, we believe that this measure is useful for comparing general operating performance from period to period. other companies may define adjusted net income from continuing operations differently and, as a result, our measure may not be directly comparable to measures of other companies. in addition, adjusted net income from continuing operations 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(unaudited, in thousands, except share and per share amounts) the table below reconciles adjusted net income from continuing operations to the most directly comparable gaap financial measure, net income (loss) attributable to common stockholders, for the periods presented therein. per share figures may reflect rounding adjustments and consequently totals may not appear to sum. tax impact of adjusted items at 36.8% effective tax rate 1 diluted net income (loss) per share attributable to common stockholders, as reported 1 full year effective tax rate of 36.8% and 38.1% in 2015 and 2014, respectively, applied to the adjustments 2 includes adjustments related to accretion charges on redeemable preferred stock and loss from discontinued operations, net of income taxes 3 includes adjustments related to share based compensation expense, acquisition related expenses, expensed initial public offering costs and gain from put option on redeemable preferred stock the table below reconciles adjusted ebitda to the most directly comparable gaap financial measure, net income, for the periods presented therein. period-over-period growth us housing market 1 same branch sales growth 1 source: us census bureau adjusted incremental revenue and ebitda margins
