TopBuild Corp. (BLD) has reported a 64.34 percent plunge in profit for the quarter ended Dec. 31, 2016. The company has earned $21.31 million, or $0.57 a share in the quarter, compared with $59.75 million, or $1.57 a share for the same period last year. On an adjusted basis, earnings per share were at $0.59 for the quarter compared with $0.52 in the same period last year.
Revenue during the quarter grew 4.14 percent to $444.14 million from $426.47 million in the previous year period. Gross margin for the quarter contracted 85 basis points over the previous year period to 23.66 percent. Total expenses were 91.91 percent of quarterly revenues, up from 89.92 percent for the same period last year. That has resulted in a contraction of 199 basis points in operating margin to 8.09 percent.
Operating income for the quarter was $35.94 million, compared with $43 million in the previous year period.
However, the adjusted operating income for the quarter stood at $37.06 million compared to $33.44 million in the prior year period. At the same time, adjusted operating margin improved 50 basis points in the quarter to 8.34 percent from 7.84 percent in the last year period.
Jerry Volas, chief executive officer, stated, "This was another strong quarter for TopBuild, with solid revenue and earnings growth and expanded adjusted operating margins in both business segments. For the full year, we outpaced lagged housing starts, expanded adjusted operating margins 160 basis points and achieved incremental EBITDA margin of 29.4%." "Our team remains focused on growing market share and optimizing our operational performance and we expect 2017 to be another year of solid growth for TopBuild."
Operating cash flow improves significantly
TopBuild Corp. has generated cash of $76.78 million from operating activities during the year, up 37.09 percent or $20.77 million, when compared with the last year.
The company has spent $16.80 million cash to meet investing activities during the year as against cash outgo of $12.21 million in the last year. It has incurred net capital expenditure of $13.44 million on net basis during the year, up 4.67 percent or $0.60 million from year ago.
The company has spent $38.46 million cash to carry out financing activities during the year as against cash inflow of $66.08 million in the last year period.
Cash and cash equivalents stood at $134.38 million as on Dec. 31, 2016, up 19.08 percent or $21.53 million from $112.85 million on Dec. 31, 2015.
Working capital increases sharply
TopBuild Corp. has recorded an increase in the working capital over the last year. It stood at $200.62 million as at Dec. 31, 2016, up 30.54 percent or $46.94 million from $153.68 million on Dec. 31, 2015. Current ratio was at 1.62 as on Dec. 31, 2016, up from 1.47 on Dec. 31, 2015.
Debt comes down
TopBuild Corp. has recorded a decline in total debt over the last one year. It stood at $178.80 million as on Dec. 31, 2016, down 7.58 percent or $14.66 million from $193.46 million on Dec. 31, 2015. Total debt was 10.58 percent of total assets as on Dec. 31, 2016, compared with 11.78 percent on Dec. 31, 2015. Debt to equity ratio was at 0.18 as on Dec. 31, 2016, down from 0.21 as on Dec. 31, 2015. Interest coverage ratio improved to 27.80 for the quarter from 27.37 for the same period last year.
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