TopBuild (NYSE: BLD) reported Q2 EPS of $1.03, $0.08 better than the analyst estimate of $0.95. Revenue for the quarter came in at $606 million versus the consensus estimate of $593.74 million.

Second Quarter Financial Highlights

(unless otherwise indicated, comparisons are to the quarter ended June 30, 2017)

• Net sales increased 27.7% to $606.0 million, primarily driven by acquisitions, sales volume growth and increased selling prices in both operating segments. Of the 27.7% revenue growth, same branch contributed 10.5%.
• Gross margin, impacted by higher material cost, declined 70 basis points to 23.9%. On an adjusted basis, gross margin declined 60 basis points to 24.0%.
• Operating profit was $43.7 million, compared to operating profit of $40.8 million. On an adjusted basis, operating profit was $57.8 million, compared to $42.2 million, a 37.0% improvement.
• Operating margin was 7.2%, down 140 basis points. Adjusted operating margin improved 60 basis points to 9.5%.
• Adjusted EBITDA was $70.6 million, compared to $48.2 million, a 46.4% increase, and adjusted EBITDA margin improved 140 basis points to 11.6%. Incremental EBITDA margin was 17.0%. On a same branch basis, adjusted EBITDA was $59.9 million, a 31.4% increase, and incremental EBITDA margin was 23.6%.
• Net income was $27.2 million, or $0.76 per diluted share, compared to $23.5 million, or $0.63 per diluted share. Adjusted income was $36.9 million, or $1.03 per diluted share, compared to $25.0 million, or $0.67 per diluted share.
• The five acquisitions completed over the past 12 months contributed $81.9 million of revenue. Incremental EBITDA related to acquisitions was 13.0%.
• At June 30, 2018, the Company had cash and cash equivalents of $65.7 million and availability under its revolving credit facility of $190.7 million for total liquidity of $256.4 million.

Jerry Volas, Chief Executive Officer, stated, “We had another strong quarter with sales benefitting from the continued growth in residential and commercial construction. Our team remains focused on profitable growth which includes successfully managing the multiple supplier cost increases announced this year.

“As a result of the USI acquisition, our national footprint is even stronger, particularly in many of the fastest growing markets. With over 10,000 employees, including almost 7,000 installers, we are well-positioned to take advantage of the continued strength in residential new construction.”

GUIDANCE:

TopBuild sees FY2018 revenue of $2.358-2.398 billion, versus the consensus of $2.37 billion.

For earnings history and earnings-related data on TopBuild (BLD) click here.