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TopBuild's (BLD) Q4 Earnings and Revenues Beat Estimates
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TopBuild Corp. (BLD - Free Report) reported better-than-expected results for fourth-quarter 2020. Its earnings and revenues not only surpassed the Zacks Consensus Estimate but also grew impressively from the prior-year quarter, backed by solid revenue growth and margin improvement in both the segments.
Robert Buck, president and chief executive officer of TopBuild, stated, “Looking ahead, housing fundamentals remain robust and our Company should continue to benefit from strong demand for new housing construction. Our focus remains on driving top line growth and improving operational efficiencies throughout the Company.”
Inside the Headlines
TopBuild reported adjusted earnings of $2.15 per share, which surpassed the consensus estimate of $1.90 by 13.2% and grew 45.3% from the prior-year period.
Total net sales of $721.5 million surpassed the consensus mark of $702.9 million by 0.9%. The top line grew 8.9% on a year-over-year basis on the back of increased volume and sales from acquisitions.
For the fourth quarter, Installation (TruTeam) revenues increased 6.9% year over year to $508.8 million. Acquisitions and selling price added 4.5% to revenues. Volumes climbed 2.8% from the prior-year quarter. However, pricing had a 0.3% negative impact on sales. Adjusted operating margin for the quarter expanded 270 basis points (bps) to 16.1%.
For the quarter, revenues at the Distribution (Service Partners) segment grew 10.5% year over year to $251.5 million driven by 12.7% volume growth, partially offset by a 0.6% lower selling price. Adjusted operating margin improved 210 bps from the year-ago level to 13.4%.
Operating Highlights
Adjusted gross margin of 27.5% expanded 160 bps. Adjusted operating margin improved 280 bps from the year-ago period to 14.4%. The gross margin improvement was driven by operational efficiencies and cost-reduction initiatives, while the operating margin increase was primarily backed by reduced travel and entertainment activity.
Adjusted EBITDA for the fourth quarter grew 31.2% from the year-ago quarter to $92.5 million. Adjusted EBITDA margin improved 280 bps to 16.8% for the quarter.
2020 Highlights
Adjusted earnings for 2020 of $7.28 per share grew 32.6% year over year. Net sales advanced 3.6% from a year ago to $2.72 billion. Adjusted operating margin expanded 200 bps to 13.2%. Adjusted EBITDA margin improved 240 bps to 16.1%. Despite the pandemic-induced challenges, both of its business segments reported revenue growth and solid margin expansion.
Financial Update
As of Dec 31, 2020, cash and cash equivalents were $330 million, up from $184.8 million at 2019-end. The company has $389.6 million of borrowing capacity available under the revolving facility.
At 2020-end, long-term debt came in at $683.4 million compared with $698 million at 2019-end. For 2020, net cash provided by operating activities was $357.9 million compared with $271.8 million a year ago.
In 2020, it repurchased 616,227 shares for $49.2 million.
Other Updates
During 2020, TopBuild completed three acquisitions, thereby strengthening footprint in high-growth markets of Texas, Colorado and Tennessee.
Masco Corporation (MAS - Free Report) reported impressive fourth-quarter 2020 results, with the top and bottom lines beating the Zacks Consensus Estimate and increasing year over year. Notably, sturdy performance of Plumbing Products and Decorative Architectural Products segments led to better-than-expected results.
Owens Corning (OC - Free Report) reported fourth-quarter 2020 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate. While earnings beat the consensus estimate for the seventh straight quarter, revenues outpaced the same for the third consecutive quarter. Moreover, both the metrics improved year over year for the fourth quarter.
Beacon Roofing Supply, Inc. (BECN - Free Report) posted impressive first-quarter fiscal 2021 results. The bottom line surpassed the Zacks Consensus Estimate, mainly backed by solid residential backdrop, stronger gross margins and reduced operating expenses.
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TopBuild's (BLD) Q4 Earnings and Revenues Beat Estimates
TopBuild Corp. (BLD - Free Report) reported better-than-expected results for fourth-quarter 2020. Its earnings and revenues not only surpassed the Zacks Consensus Estimate but also grew impressively from the prior-year quarter, backed by solid revenue growth and margin improvement in both the segments.
Robert Buck, president and chief executive officer of TopBuild, stated, “Looking ahead, housing fundamentals remain robust and our Company should continue to benefit from strong demand for new housing construction. Our focus remains on driving top line growth and improving operational efficiencies throughout the Company.”
Inside the Headlines
TopBuild reported adjusted earnings of $2.15 per share, which surpassed the consensus estimate of $1.90 by 13.2% and grew 45.3% from the prior-year period.
Total net sales of $721.5 million surpassed the consensus mark of $702.9 million by 0.9%. The top line grew 8.9% on a year-over-year basis on the back of increased volume and sales from acquisitions.
TopBuild Corp. Price, Consensus and EPS Surprise
TopBuild Corp. price-consensus-eps-surprise-chart | TopBuild Corp. Quote
Segmental Performance
For the fourth quarter, Installation (TruTeam) revenues increased 6.9% year over year to $508.8 million. Acquisitions and selling price added 4.5% to revenues. Volumes climbed 2.8% from the prior-year quarter. However, pricing had a 0.3% negative impact on sales. Adjusted operating margin for the quarter expanded 270 basis points (bps) to 16.1%.
For the quarter, revenues at the Distribution (Service Partners) segment grew 10.5% year over year to $251.5 million driven by 12.7% volume growth, partially offset by a 0.6% lower selling price. Adjusted operating margin improved 210 bps from the year-ago level to 13.4%.
Operating Highlights
Adjusted gross margin of 27.5% expanded 160 bps. Adjusted operating margin improved 280 bps from the year-ago period to 14.4%. The gross margin improvement was driven by operational efficiencies and cost-reduction initiatives, while the operating margin increase was primarily backed by reduced travel and entertainment activity.
Adjusted EBITDA for the fourth quarter grew 31.2% from the year-ago quarter to $92.5 million. Adjusted EBITDA margin improved 280 bps to 16.8% for the quarter.
2020 Highlights
Adjusted earnings for 2020 of $7.28 per share grew 32.6% year over year. Net sales advanced 3.6% from a year ago to $2.72 billion. Adjusted operating margin expanded 200 bps to 13.2%. Adjusted EBITDA margin improved 240 bps to 16.1%. Despite the pandemic-induced challenges, both of its business segments reported revenue growth and solid margin expansion.
Financial Update
As of Dec 31, 2020, cash and cash equivalents were $330 million, up from $184.8 million at 2019-end. The company has $389.6 million of borrowing capacity available under the revolving facility.
At 2020-end, long-term debt came in at $683.4 million compared with $698 million at 2019-end. For 2020, net cash provided by operating activities was $357.9 million compared with $271.8 million a year ago.
In 2020, it repurchased 616,227 shares for $49.2 million.
Other Updates
During 2020, TopBuild completed three acquisitions, thereby strengthening footprint in high-growth markets of Texas, Colorado and Tennessee.
Zacks Rank & Peer Releases
TopBuild currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Masco Corporation (MAS - Free Report) reported impressive fourth-quarter 2020 results, with the top and bottom lines beating the Zacks Consensus Estimate and increasing year over year. Notably, sturdy performance of Plumbing Products and Decorative Architectural Products segments led to better-than-expected results.
Owens Corning (OC - Free Report) reported fourth-quarter 2020 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate. While earnings beat the consensus estimate for the seventh straight quarter, revenues outpaced the same for the third consecutive quarter. Moreover, both the metrics improved year over year for the fourth quarter.
Beacon Roofing Supply, Inc. (BECN - Free Report) posted impressive first-quarter fiscal 2021 results. The bottom line surpassed the Zacks Consensus Estimate, mainly backed by solid residential backdrop, stronger gross margins and reduced operating expenses.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
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