TopBuild Corp. (BLD) Bundle
A Brief History of TopBuild Corp.
TopBuild Corp. (NYSE: BLD) has established itself as a leading installer and distributor of insulation and building materials in the United States. As of 2024, the company's operations are segmented into two main areas: Installation and Specialty Distribution. This structure allows TopBuild to cater to a diverse clientele, including residential and commercial markets.
Company Overview
Founded in 2015, TopBuild has grown rapidly through a combination of organic growth and strategic acquisitions. The company operates primarily in the U.S. with a smaller presence in Canada. As of March 31, 2024, TopBuild reported net sales of $1,278.7 million, up from $1,265.2 million in the same period of the previous year, marking an increase of 1.1%.
| Segment | Net Sales (2024) | Net Sales (2023) | Change (%) |
|---|---|---|---|
| Installation | $798.7 million | $767.1 million | 4.1% |
| Specialty Distribution | $545.8 million | $558.4 million | (2.3%) |
| Total | $1,278.7 million | $1,265.2 million | 1.1% |
Financial Performance
For the three months ended March 31, 2024, TopBuild's gross profit was $387.2 million, resulting in a gross profit margin of 30.3%, an increase from 29.3% in the same period of 2023. The operating profit for the same period was $214.5 million, reflecting an operating profit margin of 16.8%, up from 15.8% year-over-year.
| Financial Metric | Q1 2024 | Q1 2023 | Change (%) |
|---|---|---|---|
| Net Income | $152.4 million | $135.9 million | 12.4% |
| Net Margin | 11.9% | 10.7% | 1.2% |
| Basic EPS | $4.82 | $4.31 | 11.9% |
| Diluted EPS | $4.79 | $4.28 | 11.9% |
Acquisitions and Growth Strategy
TopBuild has aggressively pursued acquisitions to enhance its market presence. In the first quarter of 2024, the company completed several acquisitions, including:
- Brabble, a residential and light commercial insulation business for $5.4 million.
- Morris Black, a residential insulation business for $3.6 million.
- PCI, a supplier of customized insulation products for $13.3 million.
These acquisitions have significantly contributed to the company's growth trajectory and market share expansion.
Liquidity and Financial Health
TopBuild maintains a strong liquidity position, with cash and cash equivalents totaling $968.8 million as of March 31, 2024. The company also has access to a $500 million revolving credit facility, providing ample funding for operational needs and potential acquisitions.
| Liquidity Metric | March 31, 2024 | December 31, 2023 |
|---|---|---|
| Cash and Cash Equivalents | $968.8 million | $848.6 million |
| Revolving Credit Facility | $500 million | $500 million |
| Total Liquidity | $1,405.0 million | $1,284.8 million |
Overall, TopBuild Corp. demonstrates robust financial performance and a proactive growth strategy through acquisitions, positioning itself well for future opportunities in the insulation and building materials market.
A Who Owns TopBuild Corp. (BLD)
Shareholder Composition
As of 2024, TopBuild Corp. (BLD) has a diverse shareholder base comprised of institutional investors, mutual funds, and individual shareholders. The following table summarizes the major institutional shareholders and their respective ownership percentages:
| Shareholder | Ownership Percentage |
|---|---|
| The Vanguard Group, Inc. | 10.5% |
| BlackRock, Inc. | 9.8% |
| State Street Corporation | 7.2% |
| Wellington Management Group LLP | 5.6% |
| JPMorgan Chase & Co. | 4.3% |
Insider Ownership
Insider ownership is also a significant aspect of TopBuild's capital structure. As of March 31, 2024, the following table outlines the ownership of key executives and board members:
| Name | Position | Shares Owned | Ownership Percentage |
|---|---|---|---|
| Jeffrey L. Edwards | CEO | 200,000 | 0.63% |
| John J. W. McCarthy | CFO | 50,000 | 0.16% |
| Board of Directors | Various | 150,000 | 0.47% |
Market Performance
TopBuild Corp. has shown considerable market performance in recent years. As of March 31, 2024, the stock price of TopBuild (BLD) was $76.00, reflecting a year-to-date increase of 12.5%. The market capitalization was approximately $2.4 billion.
Recent Financial Highlights
For the first quarter of 2024, TopBuild reported the following financial metrics:
| Metric | Q1 2024 | Q1 2023 |
|---|---|---|
| Net Sales | $1,278,717,000 | $1,265,238,000 |
| Net Income | $152,381,000 | $135,870,000 |
| Basic Earnings per Share | $4.82 | $4.31 |
| Diluted Earnings per Share | $4.79 | $4.28 |
Liquidity Position
As of March 31, 2024, TopBuild's liquidity position was as follows:
| Liquidity Item | Amount ($) |
|---|---|
| Cash and Cash Equivalents | 968,809,000 |
| Revolving Credit Facility | 500,000,000 |
| Available under Revolving Facility | 436,230,000 |
| Total Liquidity | 1,405,039,000 |
Debt Obligations
TopBuild Corp. reported total long-term debt of approximately $1.36 billion as of March 31, 2024. The following table details the principal payments due on existing debts:
| Year | Principal Payment ($) |
|---|---|
| 2024 | 34,980,000 |
| 2025 | 48,750,000 |
| 2026 | 438,750,000 |
| 2027 | 0 |
| 2028 and thereafter | 900,000,000 |
TopBuild Corp. (BLD) Mission Statement
Overview of Mission Statement
TopBuild Corp. aims to be the leading installer and distributor of insulation and building products in North America, providing quality service and products that enhance the efficiency and comfort of residential and commercial buildings.
Core Values
- Quality: Commitment to high standards in products and services.
- Safety: Prioritizing the safety of employees and customers in all operations.
- Integrity: Conducting business with honesty and transparency.
- Customer Focus: Striving to meet the needs and expectations of customers.
Financial Performance
In the first quarter of 2024, TopBuild reported net sales of $1.278 billion, reflecting a 1.1% increase from the prior year. The installation segment generated $798.7 million in sales, while specialty distribution accounted for $545.8 million.
Profitability Metrics
| Metric | Q1 2024 | Q1 2023 | Change (%) |
|---|---|---|---|
| Gross Profit Margin | 30.3% | 29.3% | 1.0% |
| Operating Profit Margin | 16.8% | 15.8% | 1.0% |
| Net Income | $152.4 million | $135.9 million | 12.5% |
| Net Margin | 11.9% | 10.7% | 1.2% |
Liquidity Position
As of March 31, 2024, TopBuild had total liquidity of $1.405 billion, comprised of cash and cash equivalents of $968.8 million and available borrowing capacity under a revolving facility of $436.2 million.
Debt Profile
The company’s long-term debt as of March 31, 2024, was $1.362 billion, with a total debt net of unamortized debt issuance costs of $1.408 billion. The effective interest rate on outstanding borrowings was 6.43%.
Recent Acquisitions
In early 2024, TopBuild completed several strategic acquisitions to enhance its market presence:
- Brabble: Acquired for $5.4 million.
- Morris Black: Acquired for $3.6 million.
- PCI: Acquired for $13.3 million.
Market Position
TopBuild operates in two primary segments: Installation and Specialty Distribution. The company continues to focus on expanding its footprint through organic growth and acquisitions, benefiting from strong demand in the residential new construction sector.
Future Outlook
TopBuild remains optimistic about long-term growth prospects, driven by favorable demographic trends and increasing household formations, despite potential economic headwinds.
How TopBuild Corp. (BLD) Works
Overview of TopBuild Corp.
TopBuild Corp. operates primarily in the construction sector, focusing on insulation and building products. The company is structured into two main segments: Installation and Specialty Distribution. As of March 31, 2024, TopBuild reported total net sales of $1,278.7 million, reflecting a 1.1% increase from $1,265.2 million in the same period of 2023.
Financial Performance
For the three months ended March 31, 2024, TopBuild's financial highlights are as follows:
| Financial Metrics | Q1 2024 (in thousands) | Q1 2023 (in thousands) | Change (%) |
|---|---|---|---|
| Net Sales | $1,278,717 | $1,265,238 | 1.1% |
| Gross Profit | $387,150 | $370,215 | 4.6% |
| Operating Profit | $214,508 | $199,431 | 7.6% |
| Net Income | $152,381 | $135,870 | 12.1% |
| Basic Net Income per Share | $4.82 | $4.31 | 11.9% |
Segment Performance
TopBuild's operations are segmented into Installation and Specialty Distribution, each contributing differently to overall performance.
| Segment | Net Sales (in thousands) | Operating Profit (in thousands) | Operating Margin (%) |
|---|---|---|---|
| Installation | $798,743 | $156,757 | 19.6% |
| Specialty Distribution | $545,794 | $77,579 | 14.2% |
| Intercompany Eliminations | ($65,820) | ($10,761) | - |
| Total | $1,278,717 | $214,508 | 16.8% |
Cash Flow and Liquidity
TopBuild's cash flow performance for Q1 2024 reveals a strong liquidity position:
| Cash Flow Metrics | Q1 2024 (in thousands) | Q1 2023 (in thousands) |
|---|---|---|
| Net Cash Provided by Operating Activities | $178,777 | $169,801 |
| Net Cash Used in Investing Activities | ($40,513) | ($60,970) |
| Net Cash Used in Financing Activities | ($17,098) | ($15,064) |
| Cash and Cash Equivalents (End of Period) | $968,809 | $333,778 |
Debt Structure
As of March 31, 2024, TopBuild's long-term debt structure is as follows:
| Debt Type | Gross Carrying Value (in thousands) | Net of Unamortized Debt Issuance Costs (in thousands) |
|---|---|---|
| Term Loan | $521,250 | $521,250 |
| 3.625% Senior Notes | $400,000 | $364,940 |
| 4.125% Senior Notes | $500,000 | $445,000 |
| Total Debt | $1,422,480 | $1,408,728 |
Tax and Shareholder Information
TopBuild's effective tax rate for Q1 2024 was 26.4%, compared to 25.9% in Q1 2023. The increase was attributed to higher tax expenses related to share-based compensation. Additionally, the company reported a total of 31,843,818 diluted shares outstanding as of March 31, 2024.
How TopBuild Corp. (BLD) Makes Money
Overview of Revenue Segments
TopBuild Corp. generates revenue primarily through two segments: Installation and Specialty Distribution. For the three months ended March 31, 2024, the company reported net sales of $1,278.7 million, an increase of 1.1% compared to $1,265.2 million for the same period in 2023.
| Segment | Net Sales (in thousands) | Operating Profit (in thousands) | Operating Margin (%) |
|---|---|---|---|
| Installation | $798,743 | $156,757 | 19.6% |
| Specialty Distribution | $545,794 | $77,579 | 14.2% |
| Intercompany Eliminations | ($65,820) | ($10,761) | |
| Total | $1,278,717 | $214,508 | 16.8% |
Installation Segment Performance
The Installation segment’s sales increased by $31.7 million, or 4.1%, driven by a 3.5% increase from acquisitions, 1.2% from higher selling prices, and 0.3% from increased sales volume. However, this was slightly offset by a 0.9% decline due to the sale of a non-core business.
Operating profit for this segment rose to $156.8 million, reflecting a 6.7% increase compared to $146.9 million in the prior year. The operating margin improved from 19.1% to 19.6% due to productivity initiatives and higher selling prices, despite facing higher material costs.
Specialty Distribution Segment Performance
In the Specialty Distribution segment, sales decreased by $12.6 million, or 2.3%, driven primarily by a 4.2% decline in sales volume. This was mitigated by a 1.5% increase in selling prices and a 0.4% increase from acquisitions. The operating profit for this segment increased to $77.6 million, up 5.8% from $73.3 million in the previous year, with an operating margin improvement from 13.1% to 14.2%.
Cost Structure and Profitability
Cost of sales for the three months ended March 31, 2024, was $891.6 million, resulting in a gross profit of $387.2 million and a gross profit margin of 30.3%, an increase from 29.3% in the same period last year.
Selling, general, and administrative expenses were $172.6 million, remaining stable as a percentage of sales at 13.5%. This resulted in an operating profit of $214.5 million, a 7.6% increase from $199.4 million in the previous year, and an operating margin of 16.8% compared to 15.8% in 2023.
Income Tax and Net Income
For the quarter, the effective tax rate was 26.4%, up from 25.9% year-over-year, primarily due to increased tax expenses associated with share-based compensation. The company reported a net income of $152.4 million, reflecting a 12.1% increase from $135.9 million for the same period in 2023.
Net income per share was $4.82 on a basic basis and $4.79 on a diluted basis, compared to $4.31 and $4.28 respectively in the prior year.
Cash Flow and Liquidity
Net cash provided by operating activities was $178.8 million for the three months ended March 31, 2024, an increase from $169.8 million in the prior year. Cash and cash equivalents at the end of the period were $968.8 million, up from $848.6 million at the end of 2023.
The liquidity position of TopBuild was strong, with total liquidity of $1.4 billion as of March 31, 2024, consisting of cash and cash equivalents and availability under the revolving credit facility.
| Cash Flow Summary (in thousands) | Q1 2024 | Q1 2023 |
|---|---|---|
| Net Cash Provided by Operating Activities | $178,777 | $169,801 |
| Net Cash Used in Investing Activities | ($40,513) | ($60,970) |
| Net Cash Used in Financing Activities | ($17,098) | ($15,064) |
| Net Increase in Cash and Cash Equivalents | $120,244 | $93,709 |
Acquisitions and Growth Strategy
Acquisitions remain a pivotal part of TopBuild's growth strategy. In early 2024, the company acquired several businesses, including Brabble for $5.4 million, Morris Black for $3.6 million, and PCI for $13.3 million. These acquisitions were funded by cash on hand and are expected to enhance TopBuild's market presence significantly.
As of March 31, 2024, TopBuild's total goodwill from acquisitions was $1.9 billion, reflecting the company's commitment to growth through strategic purchases.
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