GlobeNewswire Inc | Aug 3, 2021 06:45AM EDT

August 03, 2021

-- 29.1% increase in net sales -- 150 bps gross margin expansion, 140 bps on an adjusted basis -- 15.4% operating margin, 15.6% on an adjusted basis, up 270 bps -- $2.72 net income per diluted share, $2.76 on an adjusted basis -- 18.0% adjusted EBITDA margin, 18.4% on a same branch basis

Announces New $200 Million Share Repurchase Program

DAYTONA BEACH, Fla., Aug. 03, 2021 (GLOBE NEWSWIRE) -- TopBuild Corp.(NYSE:BLD), a leading installer and distributor of insulation and building material products today reported results for thesecond quarter ended June 30, 2021.

Robert Buck, President and Chief Executive Officer, stated, We are very pleased with our second quarter results. Top line growth was strong and operating margins expanded at both business segments. Our solid performance demonstrates our teams ability to successfully manage pricing in conjunction with multiple material cost increases as well as productivity in a labor and material constrained market.

Looking ahead, we expect the residential housing market to remain solid and the commercial market to continue to strengthen. Our focus will remain on driving profitable growth and creatinglong-term value for our stakeholders.

Second Quarter Financial Highlights(unless otherwise indicated, comparisons are to the quarter ended June 30, 2020)

-- Net sales increased 29.1% to $834.3. million, 18.3% on a same branch basis, primarily driven by increases in both price and volume as well as M&A. -- Gross margin increased 150 basis points to 29.1%. On an adjusted basis, gross margin increased 140 basis points to 29.2%. -- Operating profit was $128.3 million, compared to operating profit of $80.5 million, a 59.5% improvement. On an adjusted basis, operating profit was $129.9 million, compared to $83.5 million, a 55.5% improvement. -- Operating margin was 15.4%, up 290 basis points. Adjusted operating margin improved 270 basis points to 15.6%. -- Net income was $90.4 million, or $2.72 per diluted share, compared to $55.5 million, or $1.67 per diluted share. Adjusted income was $91.6 million, or $2.76 per diluted share, compared to $55.7 million, or $1.68 per diluted share. -- Adjusted EBITDA was $149.8 million, compared to $107.8 million, a 39.1% increase, and adjusted EBITDA margin improved 130 basis points to 18.0%. -- At June 30, 2021, the Company had cash and cash equivalents of $261.7 million and availability under its revolving credit facility of $378.8 million for total liquidity of $640.5 million.

Six Month Financial Highlights(unless otherwise indicated, comparisons are to six months ended June 30, 2020)

-- Net sales increased 21.4% to $1,577.1 million. On a same branch basis, revenue increased 13.9% to $1,479.4 million. -- Gross margin expanded 110 basis points to 28.0%. On an adjusted basis, gross margin expanded 90 basis points to 28.0%. -- Operating profit was $224.2 million, compared to operating profit of $150.4 million, a 49.0% improvement. On an adjusted basis, operating profit was $227.1 million, compared to $153.8 million, a 47.7% improvement. -- Operating margin was 14.2%, and 14.4% on an adjusted basis, a 260-basis point improvement. -- Net income was $150.2 million, or $4.53 per diluted share, compared to $106.3 million, or $3.18 per diluted share. Adjusted income was $158.7 million, or $4.78 per diluted share, compared to $101.6 million, or $3.04 per diluted share. -- Adjusted EBITDA was $265.7 million, compared to $196.1 million, a 35.5% increase. Adjusted EBITDA margin was 16.8%, a 170-basis point improvement.

Operating Segment Highlights ($ in 000s)(comparisons are to the period ended June 30, 2020)

3 Months 6 Months 3 Months 6 MonthsTruTeam Ended Ended Service Partners Ended Ended 6/30/21 6/30/21 6/30/21 6/30/21Sales $605,625 $1,138,378 Sales $273,364 $524,965Change Change Volume 10.4% 7.7% Volume 14.3% 14.0%Price 5.0% 3.0% Price 10.3% 7.0%M&A 14.4% 10.1% M&A 1.8% 0.9%Total Change 29.8% 20.8% Total Change 26.4% 21.9%Operating Margin 16.4% 15.2% Operating Margin 15.7% 14.9%Change 150 bps 140 bps Change 450 bps 360 bpsAdj. Operating 16.6% 15.3% Adj. Operating 15.7% 14.9%Margin MarginChange 140 bps 130 bps Change 410 bps 330 bps

Capital Allocation

AcquisitionsThree companies were acquired in the second quarter, American Building Systems, Creative Conservation and RJ Insulation. Combined, they are expected to generate approximately $155 million of revenue on a pro forma full year basis. Year-to-date, the Company has acquired five companies which are expected to generate approximately $221 million of revenue on a pro forma, full year basis.

M&A remains our number one capital allocation priority. Our prospects center around our core of insulation and related adjacent products that will further strengthen our industry leadership position. Our pipeline is robust, and we expect to stay very busy on this front through the remainder of the year, added Buck.

Our strong balance sheet and cash flows also provide us with the flexibility to continue our history of share repurchases, and we are pleased to announce another $200 million share repurchase program.

Share Repurchase ProgramIn the second quarter, the Company repurchased 73,747 shares at an average price of $192.30 per share. Year-to-date, the Company has repurchased 123,031 shares at an average price of $195.38 per share.

The Company also announced that its Board of Directors has approved an additional share repurchase program whereby the Company may purchase up to $200 million of its common stock. Repurchases will be made from cash on hand as well as from a portion of the free cash flow expected to be generated from the business. The program may be suspended or discontinued at any time.

2021 Outlook

Sales and Adjusted EBITDA Guidance(1)

($ in millions) 2021 Low HighSales $ 3,290 $ 3,370Adjusted EBITDA* $ 565 $ 590

*See table for adjusted EBITDA reconciliation.

Assumptions(1)

($ in millions) 2021 Low HighHousing Starts 1,475 1,525Estimated net income $ 339.5 $ 363.6Interest Expense and other, net $ 24.7 $ 22.2Income tax expense $ 119.3 $ 127.8Depreciation and Amortization $ 70.6 $ 67.5Share based compensation $ 10.9 $ 8.9

(1) This guidance and long-term targets reflect managements current view of present and future market conditions and are based on assumptions such as housing starts, general and administrative expenses, weighted average diluted shares outstanding and interest rates. These targets do not include any effects related to potential acquisitions or divestitures that may occur after the date of this press release. A reconciliation of non-GAAP targets to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty regarding, and the potential variability of, the costs and expenses that may be incurred in the future and therefore, cannot be reasonably predicted. The effect of these excluded items may be significant. Factors that could cause actual long-term results to differ materially from TopBuilds current expectations are discussed below and are also detailed in the Companys 2020 Annual Report on Form 10-K and subsequent SEC reports.

Conference Call A conference call to discuss second quarter 2021 financial results is scheduled for today, Tuesday, August 3, at 9:00 a.m. Eastern time. The call may be accessed by dialing (877) 407-9037. The conference call will be webcast simultaneously on the Companys website at www.topbuild.com.

About TopBuildTopBuild Corp., a Fortune 1000 Company headquartered in Daytona Beach, Florida, is a leading installer and distributor of insulation and building material products to the U.S. construction industry. We provide insulation and building material services nationwide through TruTeam, which has approximately 235 branches, and through Service Partners which distributes insulation and building material products from approximately 75 branches. We leverage our national footprint to gain economies of scale while capitalizing on our local market presence to forge strong relationships with our customers. To learn more about TopBuild please visit our website at www.topbuild.com.

Use of Non-GAAP Financial Measures Adjusted EBITDA, incremental EBITDA margin, adjusted EBITDA margin, the adjusted financial measures presented above, and figures presented on a same branch basis are not calculated in accordance with U.S. generally accepted accounting principles (GAAP). The Company believes that these non-GAAP financial measures, which are used in managing the business, may provide users of this financial information with additional meaningful comparisons between current results and results in prior periods. We define same branch sales as sales from branches in operation for at least 12 full calendar months. Such non-GAAP financial measures are reconciled to their closest GAAP financial measures in tables contained in this press release. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Companys reported results under GAAP. Additional information may be found in the Companys filings with the Securities and Exchange Commission which are available on TopBuilds website at www.topbuild.com.

Safe Harbor StatementStatements contained herein reflect our views about future periods, including our future plans and performance, constitute forward-looking statements under the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as will, would, anticipate, expect, believe, designed, plan, or intend, the negative of these terms, and similar references to future periods. These views involve risks and uncertainties that are difficult to predict and, accordingly, our actual results may differ materially from the results discussed in our forward-looking statements. We caution you against unduly relying on any of these forward-looking statements. Our future performance may be affected by the duration and impact of the COVID-19 pandemic on the United States economy, specifically with respect to residential and commercial construction; our ability to continue operations in markets affected by the COVID-19 pandemic and our ability to collect receivables from our customers; our reliance on residential new construction, residential repair/remodel, and commercial construction; our reliance on third-party suppliers and manufacturers; our ability to attract, develop, and retain talented personnel and our sales and labor force; our ability to maintain consistent practices across our locations; and our ability to maintain our competitive position. We discuss the material risks we face under the caption entitled Risk Factors in our Annual Report for the year ended December31,2020, as filed with the SEC on February 23, 2021, as well as under the caption entitled Risk Factors in subsequent reports that we file with the SEC. Our forward-looking statements in this filing speak only as of the date of this filing. Factors or events that could cause our actual results to differ may emerge from time to time and it is not possible for us to predict all of them. Unless required by law, we undertake no obligation to update publicly any forward-looking statements as a result of new information, future events, or otherwise. The Company believes that the non-GAAP performance measures and ratios that are contained herein, which management uses to manage our business, provide users of this financial information with additional meaningful comparisons between current results and results in our prior periods. Non-GAAP performance measures and ratios should be viewed in addition, and not as an alternative, to the Company's reported results under accounting principles generally accepted in the United States. Additional information about the Company is contained in the Company's filings with the SEC and is available on TopBuild's website at www.topbuild.com.

Investor Relations and Media ContactTabitha Zanetabitha.zane@topbuild.com386-763-8801

(tables follow)

TopBuild Corp.Condensed Consolidated Statements of Operations (Unaudited)(in thousands, except share and per common share amounts) Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020Net sales $ 834,255 $ 646,099 $ 1,577,053 $ 1,299,327 Cost of sales 591,075 468,045 1,136,114 949,316 Gross profit 243,180 178,054 440,939 350,011 Selling,general, and 114,894 97,600 216,767 199,568 administrativeexpenseOperating 128,286 80,454 224,172 150,443 profit Other income(expense), net:Interest (6,105 ) (8,277 ) (12,707 ) (17,018 )expenseLoss onextinguishment ? ? (13,862 ) (233 )of debtOther, net 66 89 144 561 Other expense, (6,039 ) (8,188 ) (26,425 ) (16,690 )netIncome before 122,247 72,266 197,747 133,753 income taxes Income tax (31,867 ) (16,770 ) (47,525 ) (27,485 )expenseNet income $ 90,380 $ 55,496 $ 150,222 $ 106,268 Net income per common share:Basic $ 2.75 $ 1.69 $ 4.57 $ 3.22 Diluted $ 2.72 $ 1.67 $ 4.53 $ 3.18 Weightedaverage shares outstanding:Basic 32,865,303 32,867,842 32,846,016 33,018,148 Diluted 33,177,435 33,202,423 33,190,107 33,401,135

TopBuild Corp. Condensed Consolidated Balance Sheets and Other Financial Data (Unaudited)(dollars in thousands) As of June 30, December31,ASSETS 2021 2020Current assets: Cash and cash equivalents $ 261,739 $ 330,007 Receivables, net of an allowance for creditlosses of $8,337 at June 30, 2021, and 491,625 427,340 $6,926 at December 31, 2020Inventories, net 178,576 161,369 Prepaid expenses and other current assets 20,523 17,689 Total current assets 952,463 936,405 Right of use assets 100,558 83,490 Property and equipment, net 199,982 180,053 Goodwill 1,494,200 1,410,685 Other intangible assets, net 237,573 190,605 Deferred tax assets, net 2,729 2,728 Other assets 11,213 11,317 Total assets $ 2,998,718 $ 2,815,283 LIABILITIES Current liabilities: Accounts payable $ 356,570 $ 331,710 Current portion of long-term debt 23,476 23,326 Accrued liabilities 126,517 107,949 Short-term lease liabilities 36,673 33,492 Total current liabilities 543,236 496,477 Long-term debt 680,999 683,396 Deferred tax liabilities, net 168,091 168,568 Long-term portion of insurance reserves 49,456 50,657 Long-term lease liabilities 68,457 53,749 Other liabilities 13,663 13,642 Total liabilities 1,523,902 1,466,489 EQUITY 1,474,816 1,348,794 Total liabilities and equity $ 2,998,718 $ 2,815,283 As of June 30, 2021 2020Other Financial Data Receivable days 45 49 Inventory days 30 28 Accounts payable days 74 83 Receivables, net plus inventories, net less $ 313,631 $ 277,080 accounts payableReceivables, net plus inventories, net less 9.9 % 10.5 %accounts payable as a percent of sales (TTM) ? ? Trailing 12 months sales have been adjusted for the pro forma effect of acquired branches

TopBuild Corp.Condensed Consolidated Statement of Cash Flows (Unaudited)(in thousands) Six Months Ended June 30, 2021 2020Cash Flows Provided by (Used in) Operating Activities:Net income $ 150,222 $ 106,268 Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization 33,221 33,311 Share-based compensation 5,377 9,038 Loss on extinguishment of debt 13,862 233 Loss on sale or abandonment of property and 833 320 equipmentAmortization of debt issuance costs 858 716 Provision for bad debt expense 4,037 3,756 Loss from inventory obsolescence 1,129 1,313 Deferred income taxes, net (206 ) (38 )Change in certain assets and liabilities Receivables, net (36,277 ) 1,894 Inventories, net (8,055 ) 538 Prepaid expenses and other current assets (2,273 ) 9,151 Accounts payable 21,782 (16,390 )Accrued liabilities 17,693 28,188 Payment of contingent consideration ? (413 )Other, net ? 277 Net cash provided by operating activities 202,203 178,162 Cash Flows Provided by (Used in) Investing Activities:Purchases of property and equipment (28,560 ) (20,937 )Acquisition of businesses (195,411 ) (20,526 )Proceeds from sale of property and equipment 193 763 Net cash used in investing activities (223,778 ) (40,700 ) Cash Flows Provided by (Used in) Financing Activities:Proceeds from issuance of long-term debt 411,250 300,000 Repayment of long-term debt (421,716 ) (313,407 )Payment of debt issuance costs (6,500 ) (2,280 )Taxes withheld and paid on employees' equity (11,491 ) (13,165 )awardsExercise of stock options 5,952 ? Repurchase of shares of common stock (24,038 ) (34,152 )Payment of contingent consideration (150 ) (428 )Net cash used in financing activities (46,693 ) (63,432 ) Cash and Cash Equivalents (Decrease) increase for the period (68,268 ) 74,030 Beginning of period 330,007 184,807 End of period $ 261,739 $ 258,837 Supplemental disclosure of noncash activities: Leased assets obtained in exchange for new $ 39,135 $ 19,257 operating lease liabilitiesAccruals for property and equipment 460 323

TopBuild Corp.Segment Data (Unaudited)(dollars in thousands) Three Months Ended June Six Months Ended June 30, 30, 2021 2020 Change 2021 2020 ChangeTruTeam Sales $ 605,625 $ 466,569 29.8 % $ 1,138,378 $ 942,442 20.8 % Operatingprofit, as $ 99,066 $ 69,643 172,702 129,994 reportedOperatingmargin, as 16.4 % 14.9 % 15.2 % 13.8 % reported Rationalization ? 857 ? 857 chargesAcquisition 1,112 ? 1,112 4 related costsCOVID-19 pay 116 638 605 638 Operatingprofit, as $ 100,294 $ 71,138 $ 174,419 $ 131,493 adjustedOperatingmargin, as 16.6 % 15.2 % 15.3 % 14.0 % adjusted Service PartnersSales $ 273,364 $ 216,336 26.4 % $ 524,965 $ 430,558 21.9 % Operatingprofit, as $ 42,856 $ 24,155 78,241 48,825 reportedOperatingmargin, as 15.7 % 11.2 % 14.9 % 11.3 % reported Rationalization ? 944 ? 944 chargesCOVID-19 pay 20 54 54 54 Operatingprofit, as $ 42,876 $ 25,153 $ 78,295 $ 49,823 adjustedOperatingmargin, as 15.7 % 11.6 % 14.9 % 11.6 % adjusted Total Sales before $ 878,989 $ 682,905 $ 1,663,343 $ 1,373,000 eliminationsIntercompany (44,734 ) (36,806 ) (86,290 ) (73,673 ) eliminationsNet sales after $ 834,255 $ 646,099 29.1 % $ 1,577,053 $ 1,299,327 21.4 %eliminations Operatingprofit, as $ 141,922 $ 93,798 $ 250,943 $ 178,819 reported -segmentsGeneralcorporate (6,704 ) (7,383 ) (13,311 ) (16,581 ) expense, netIntercompany (6,932 ) (5,961 ) (13,460 ) (11,795 ) eliminationsOperatingprofit, as $ 128,286 $ 80,454 $ 224,172 $ 150,443 reportedOperatingmargin, as 15.4 % 12.5 % 14.2 % 11.6 % reported Rationalization ? 2,376 16 2,376 chargesAcquisition 1,457 (40 ) 2,210 196 related costs ?Refinancing ? 20 ? 57 costsCOVID-19 pay 136 692 659 692 Operatingprofit, as $ 129,879 $ 83,502 $ 227,057 $ 153,764 adjustedOperatingmargin, as 15.6 % 12.9 % 14.4 % 11.8 % adjusted Share-based 2,266 5,130 5,377 9,038 compensationDepreciationand 17,703 19,121 33,221 33,311 amortizationEBITDA, as $ 149,848 $ 107,753 $ 265,655 $ 196,113 adjustedEBITDA margin, 18.0 % 16.7 % 16.8 % 15.1 % as adjusted Sales changeperiod over 188,156 277,726 periodEBITDA, asadjusted, 42,095 69,542 change periodover periodIncrementalEBITDA, asadjusted, as a 22.4 % 25.0 % percentage ofchange in sales ? Acquisition related costs include corporate level adjustments as well assegment operating adjustments.

TopBuild Corp.Non-GAAP Reconciliations (Unaudited)(in thousands, except share and per common share amounts) Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020Gross Profitand Operating ProfitReconciliations Net sales $ 834,255 $ 646,099 $ 1,577,053 $ 1,299,327 Gross profit, $ 243,180 $ 178,054 $ 440,939 $ 350,011 as reported Rationalization ? 1,079 ? 1,079 chargesCOVID-19 pay 122 482 592 482 Gross profit, $ 243,302 $ 179,615 $ 441,531 $ 351,572 as adjusted Gross margin, 29.1 % 27.6 % 28.0 % 26.9 %as reportedGross margin, 29.2 % 27.8 % 28.0 % 27.1 %as adjusted Operatingprofit, as $ 128,286 $ 80,454 $ 224,172 $ 150,443 reported Rationalization ? 2,376 16 2,376 chargesAcquisition 1,457 (40 ) 2,210 196 related costsRefinancing ? 20 ? 57 costsCOVID-19 pay 136 692 659 692 Operatingprofit, as $ 129,879 $ 83,502 $ 227,057 $ 153,764 adjusted Operatingmargin, as 15.4 % 12.5 % 14.2 % 11.6 %reportedOperatingmargin, as 15.6 % 12.9 % 14.4 % 11.8 %adjusted Income PerCommon Share Reconciliation Income beforeincome taxes, $ 122,247 $ 72,266 $ 197,747 $ 133,753 as reported Rationalization ? 2,376 16 2,376 chargesAcquisition 1,457 (40 ) 2,210 196 related costsRefinancingcosts and losson ? 20 13,862 290 extinguishmentof debtCOVID-19 pay 136 692 659 692 Income beforeincome taxes, 123,840 75,314 214,494 137,307 as adjusted Tax rate at (32,198 ) (19,582 ) (55,769 ) (35,700 )26.0%Income, as $ 91,642 $ 55,732 $ 158,725 $ 101,607 adjusted Income percommon share, $ 2.76 $ 1.68 $ 4.78 $ 3.04 as adjusted Weightedaverage diluted 33,177,435 33,202,423 33,190,107 33,401,135 common sharesoutstanding

TopBuild Corp.Same Branch and Acquisition Net Sales and Adjusted EBITDA (Unaudited)(dollars in thousands) Three Months Ended June Six Months Ended June 30, 30, 2021 2020 2021 2020Net sales Same branch: TruTeam $ 538,360 $ 466,569 $ 1,043,657 $ 942,442 Service Partners 269,473 216,336 521,074 430,558 Eliminations (43,750 ) (36,806 ) (85,305 ) (73,673 )Total same branch 764,083 646,099 1,479,426 1,299,327 Acquisitions (a): TruTeam $ 67,265 $ ? $ 94,721 $ ? Service Partners 3,891 ? 3,891 ? Eliminations (984 ) ? (985 ) ? Total acquisitions 70,172 ? 97,627 ? Total $ 834,255 $ 646,099 $ 1,577,053 $ 1,299,327 EBITDA, as adjusted Same branch $ 140,425 $ 107,753 $ 253,554 $ 196,113 Acquisitions (a) 9,423 ? 12,101 ? Total $ 149,848 $ 107,753 $ 265,655 $ 196,113 EBITDA, asadjusted, as a percentage of salesSame branch (b) 18.4 % 17.1 % Acquisitions (c) 13.4 % 12.4 % Total (d) 18.0 % 16.7 % 16.8 % 15.1 % As AdjustedIncremental EBITDA, as a percentage ofchange in salesSame branch (e) 27.7 % 31.9 % Acquisitions (c) 13.4 % 12.4 % Total (f) 22.4 % 25.0 % (a) Represents current year impact of acquisitions in their first twelve months(b) Same branch EBITDA, as adjusted, as a percentage of same branch sales(c) Acquired EBITDA, as adjusted, as a percentage of acquired sales(d) Total EBITDA, as adjusted, as a percentage of total sales(e) Change in same branch EBITDA, as adjusted, as a percentage of change insame branch sales(f) Change in total EBITDA, as adjusted, as a percentage of change in totalsales

TopBuild Corp.Same Branch and Acquisition Net Sales by Market (Unaudited)(in thousands) Three Months Ended June Six Months Ended June 30, 30, 2021 2020 2021 2020Same branch: Residential $ 594,259 $ 505,534 $ 1,151,253 $ 1,012,266Commercial 169,824 140,565 328,173 287,061Same branch net sales 764,083 646,099 1,479,426 1,299,327 Acquisitions (a): Residential $ 58,351 $ ? $ 78,141 $ ?Commercial 11,821 ? 19,486 ?Acquisitions net sales 70,172 ? 97,627 ?Total net sales $ 834,255 $ 646,099 $ 1,577,083 $ 1,299,327 (a) Represents current year impact of acquisitions in their first twelve months

TopBuild Corp.Reconciliation of Adjusted EBITDA to Net Income (Unaudited)(in thousands) Three Months Ended June Six Months Ended June 30, 30, 2021 2020 2021 2020Net income, as reported $ 90,380 $ 55,496 $ 150,222 $ 106,268Adjustments to arrive at EBITDA, as adjusted:Interest expense and other, 6,039 8,188 12,563 16,457netIncome tax expense 31,867 16,770 47,525 27,485Depreciation and amortization 17,703 19,121 33,221 33,311Share-based compensation 2,266 5,130 5,377 9,038Rationalization charges ? 2,376 16 2,376Acquisition related costs 1,457 (40 ) 2,210 196Refinancing costs and loss on ? 20 13,862 290extinguishment of debtCOVID-19 pay 136 692 659 692EBITDA, as adjusted $ 149,848 $ 107,753 $ 265,655 $ 196,113

TopBuild Corp.Acquisition Adjusted Net Sales (Unaudited)(in thousands) Trailing 2020 2021 Twelve Months Ended Q3 Q4 Q1 Q2 June 30, 2021Net Sales $ 697,223 $ 721,487 $ 742,798 $ 834,255 $ 2,995,763Acquisitionsproforma adjustment 73,677 55,303 44,199 2,204 175,383?Net sales,acquisition $ 770,900 $ 776,790 $ 786,997 $ 836,459 $ 3,171,146adjusted ? Trailing 12 months sales have been adjusted for the pro forma effect ofacquired branches

TopBuild Corp.2021 Estimated Adjusted EBITDA Range (Unaudited)(in millions) Twelve Months Ending December 31, 2021 Low HighEstimated net income $ 339.5 $ 363.6Adjustments to arrive at estimated EBITDA, as adjusted:Interest expense and other, net 24.7 22.2Income tax expense 119.3 127.8Depreciation and amortization 70.6 67.5Share-based compensation 10.9 8.9Estimated EBITDA, as adjusted $ 565.0 $ 590.0