avatar Installed Building Products, Inc. Construction
  • Location: Ohio 
  • Founded:
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Download the Report of Installed Building Products, Inc. for year 2014

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    LOCAL PRESENCE ON A NATIONAL SCALE 2014 ANNUAL REPORT

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    PASSION, KNOWLEDGE, SERVICE. INSTALLED BUILDING PRODUCTS, INC. (IBP) IS THE NATION’S SECOND LARGEST INSULATION INSTALLER FOR THE RESIDENTIAL NEW CONSTRUCTION MARKET AND A LEADING INSTALLER OF COMPLEMENTARY BUILDING PRODUCTS, INCLUDING GARAGE DOORS, RAIN GUTTERS, SHOWER DOORS, CLOSET SHELVING, AND MIRRORS, THROUGHOUT THE UNITED STATES. IBP manages all aspects of the installation process for its customers, including direct purchases of materials from national manufacturers, supply of materials to job sites and quality installation. We offer a diverse portfolio of services for new and existing single- family residential, multifamily, and commercial building projects from a national network of over 125 locations across the United States. Our common stock is traded on the New York Stock Exchange under the symbol “IBP.”

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    ($ in thousands) 2014 2013 % Change Net revenue $ 518,020 $ 431,929 19.9% Gross profit $ 140,052 $ 109,688 27.7% Operating income $ 25,586 $ 13,078 95.6% Income before taxes $ 22,587 $ 10,854 108.1% Net Income $ 13,932 $ 6,040 130.7% NET REVENUE NET INCOME ($ in millions) ($ in millions) $6 $14 $(2) $301 $432 $518 2012 2013 2014 2012 2013 2014

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    2014 DELIVERING POSITIVE RESULTS DEAR FELLOW SHAREHOLDERS, 2014 WAS AN EXCEPTIONAL YEAR FOR INSTALLED BUILDING PRODUCTS. WE COMPLETED OUR FIRST YEAR AS A PUBLIC COMPANY, DELIVERED STRONG FINANCIAL RESULTS, OUTPERFORMED THE MARKET IN SAME BRANCH SALES, AND FURTHER GREW OUR NATIONAL FOOTPRINT THROUGH ACQUISITION. OUR ACCOMPLISHMENTS IN 2014 PAVED THE WAY FOR CONTINUED SUCCESS AND GROWTH AS WE LOOK TO 2015 AND BEYOND. During the year, we strengthened our Company’s In June, we successfully completed a secondary equity position as the nation’s second largest installer of offering which increased the liquidity of our publicly insulation products to the new residential construction traded shares and raised net proceeds of approximately market as well as a leading installer of complementary $14.4 million. Following that, we announced a new five- products, including garage doors, rain gutters, shower year $100 million credit facility which further enhances doors, closet shelving, and mirrors throughout the our ability to invest in growth and capitalize on new United States. We accomplished this by producing market opportunities. quarter after quarter of impressive revenue and profit- Exceeding the Market Opportunity ability growth. We also took steps to enhance our bal- Historically, 80 percent of our revenue has been driven ance sheet and capital position to support the ongoing by new residential construction. While 2014 housing expansion of our business into new and existing mar- starts fell short of the market’s expectations, we expect kets. Our employees were committed to meeting our this will only lengthen the industry’s recovery providing operational and financial goals. This dedication helped more opportunity for IBP to grow through acquisition build homes for families across the country and build prior to market stabilization. The ongoing recovery long-term value for our shareholders. of the housing market is beneficial to our Company For the fiscal year ending December 31, 2014, IBP as we are involved in all aspects of the installation delivered solid financial results: process, beginning with the direct purchase of mate- rials from national manufacturers, to the timely supply • Net revenue increased 19.9 percent to $518.0 million of materials to job sites, and finally with the quality compared to full year 2013. installation of these products. • Same branch sales increased 16.4 percent. While housing starts are a good indicator for housing Going Public sales, we believe completions are a better indicator of In February 2014, we completed our initial public IBP revenue. A housing start is defined as excavation offering (IPO) and our shares of common stock began or groundbreaking for the footings or foundation of trading on the New York Stock Exchange under the a residential structure whereas a home is considered symbol “IBP.” The net proceeds of the IPO were used completed when all finished flooring or carpeting has to repurchase all of our previously outstanding pre- been installed. Not all houses with building permits ferred stock and to provide additional financial flexi- are started, and not all started homes are completed. bility as we continue to grow the company organically Housing starts may fluctuate on a month-to-month and through our acquisition strategy. basis, but completions have historically been much

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    I am confident in our ability to deliver continued success and I look forward to what the future holds for our Company. We have the right people in the right markets serving our customers with the right products. more stable as there is a timing lag between when The Right People construction begins and ends. Since IBP’s install Our greatest asset is our team of people. As we’ve services occur during the latter part of the building grown Installed Building Products from one location process, our sales are more closely tied to housing in 1994 to over 100 some 20 plus years later, the completions. talent we’ve added across all our lines of business have created the success we’ve achieved to date. Expanding Our Footprint Our national footprint reaches coast to coast with From the corporate office to the job site, our locations accessing 48 states. The insulation con- employees are committed to providing the best tractor market is highly fragmented and provides service possible to our many stakeholders. Within continued opportunity to grow our core insulation each local market, our IBP sales and install crews installation footprint and introduce other comple- have developed long-lasting relationships with mentary installed products as the housing recov- leading builders and suppliers using their indepen- ery continues. dent brands. The value of these local brands coupled with our company-wide commitment to Since 1999 we have successfully integrated over 100 delivering the highest-quality service and installed acquisitions. In 2014, we added three new compa- products underpinned the foundation of the suc- nies to the IBP family. In March, we acquired US cess we experienced in 2014 as our sales growth Insulation, a private installer operating in the tri-state outpaced the industry. New York area with an established and respected market presence and 2013 revenues of approxi- On the Horizon mately $9 million. Next, Marv’s Insulation brought As we look ahead to 2015, the outlook for the 25 years of experience, extensive customer rela- housing market remains positive. We will continue tionships, and 2013 revenues of approximately $3.5 to execute our three-pronged growth plan of million. Marv’s gave us entry into the Boise, Idaho growing sales organically through the outstanding market. Finally, we completed our 2014 acquisitions customer service provided by our branch loca- with the addition of Installed Building Solutions, a tions, adding revenues through acquisition, and highly complementary installer which enhanced leveraging the benefits of our national scale. our presence in Minnesota, Wisconsin and North I’d like to thank our employees, customers, suppliers Dakota. With trailing 12-month revenues of approx- and shareholders for their support. imately $17.4 million, this acquisition met our stra- tegic objectives with a strong market share and excellent customer service. Jeffrey W. Edwards Chairman, President and CEO While we met our strategic objective of acquiring annually $30–$40 million in revenue in 2014, we strive to do more in 2015. Our acquisition pipeline is robust and our team is working diligently to cul- tivate new opportunities. It’s our goal for the coming year to outperform what we’ve done in the past.

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    LOCAL BRANDS MATTER At IBP, our mission is to be the recognized leader in the markets we serve. Key to this success is maximizing the value of our diverse portfolio of local brands. Ours is a service business. Our corporate footprint may expand nationally, but it’s the one-on-one relationships our local branch staff develop at the community level that brings the greatest value to our company. Many of our branch employees have been in our industry for decades. They are committed to making their communities a better place to live and work. Builders, contractors and homeowners have grown to respect their quality of work, customer service and names. This close-to-home approach to business also provides IBP insight into local and regional building trends. These valuable local relationships, coupled with IBP’s quality products and service, keep our customers coming back to us.

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    HEADQUARTERED IN COLUMBUS, OHIO, IBP HAS OVER 125 LOCATIONS SERVING 48 STATES NATIONWIDE. IBP Branches IBP manages all aspects of the installation process for its customers, including direct purchases of materials from national manufacturers, supply of materials to job sites and quality installation.

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    COMMITTED TO OUR STRATEGY BUILDING ON OUR BASE and to diversify our product offering while expand- The single-family new home construction market ing into some of the most attractive housing is rebounding. As housing starts increase, IBP is markets in the U.S. there installing insulation and other products to As IBP has expanded nationwide, we have devel- help turn these new houses into homes. In 2014, oped a successful acquisition strategy that has led single-family completions increased 8.8 percent to significant growth for our company. In 2014, we and IBP same branch single-family sales increased met our target goal of acquiring $30–$40 million in 16.7 percent with total same branch sales increas- revenue through acquisition and added three new ing 16.4 percent. We believe our size, scale, supply local brands to our portfolio. Each brings a strong chain management, and logistical support to branch customer base, talented sales and installation teams, locations, makes IBP well-positioned to benefit and a desire to further grow with IBP. from increases in new home construction and grow market share. Additionally, we will use this oppor- MAINTAINING AN ENTREPRENEURIAL SPIRIT tunity to increase the introduction of our comple- The insulation installer market is very fragmented. mentary products—garage doors, rain gutters, We have a robust pipeline of acquisition targets shower doors, closet shelving, and mirrors—into including successful small, local and regional insu- the markets we serve. lation installers in a variety of attractive markets. Our practical management approach and status as GROWING THROUGH ACQUISITION a public company makes joining IBP an attractive Our business began in 1977 with one location in opportunity and brings peace of mind to many Columbus, Ohio. In the late 1990s, we began our locally-owned installers. Once an installer is acquired acquisition strategy with the goal of growing a by IBP, our Support Group team offers back office national platform. Since then, we have successfully efficiencies that free up resources to focus on cus- completed and integrated over 100 acquisitions, tomer support and sales growth. We consciously which has allowed us to generate significant scale minimize the impact we have on local operations by encouraging owners to stay and manage their crews in the way that built their success prior to becoming a part of the IBP team. INSTALLED BUILDING PRODUCTS KEY ACQUISITION TIMELINE 1996 2000 2002 2003 2004 • Mooney & Moses of • Closet Creations • Midwest Seamless • Bay Therm Insulation • J.A. Williams, Inc. Ohio • Environmental Insulation Gutters • Forest City Seamless • Maple Leaf Exteriors • M&D Insulation • Jones Brothers Gutters • Superior Insulation 1998 Insulation • Northwest Insulation • Blue Ridge Insulation • Momper Insulation 2001 • Comfort Insulation • Rogers Insulation • GTG, Inc. • Custom Closets & • CJ Insulating • Metro Home Insulation & • Res-comm Insulation 1999 Mirrors • Mollett Seamless Waterproofing • American Insulation & • Brian Insulation • Suburban Insulation Gutters / CGS • KSG Seamless Gutters Energy Services • Royalty Insulation • K&L Insulation • Pompili Insulation • ThermaSeal Insulation • Water-Tite Waterproofing • Aerolite Insulation • Rockford Companies • A-1 Seamless • DMI Companies • Spec 7 Insulation • Ft. Wayne Urethane Guttering • Foundations-4- • Dreier Insulation • HAAB Insulation Energy • National Waterproofing • FiberClass Insulation • Cornhusker Insulation • All Construction • Overhead Door Services 1996 2000 — — 2002 2003 2004 1999 2001

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    OVER 125 LOCATIONS NATIONWIDE The success of IBP’s acquisition history is the people who operate our branch locations. Their relationships with local builders and contractors, knowledge of the market, and customer-focused employees are where the true value lies for our company. In 1998, Momper Insulation based in Northern Indiana, became IBP’s first acquisition outside of Ohio. Matt Momper, offers a few of his thoughts on the value IBP provided his family-owned business and how the Momper brand continues to deliver success for IBP today. “Momper Insulation has been in business since 1956. Many of our employees have been with us I’ve been with IBP for 16 years. Today, I am a for over 30 years. Local contractors know Momper Regional President overseeing nine branches as the go-to installer. We are the trusted name in from northwest Ohio to Wisconsin. Like me, many our community. New home builders want to do owners of acquired companies stay with IBP after business with us because their dad or neighbor did becoming a part of the IBP team because IBP is a business with us in the past and were pleased with professional operation that offers the highest qual- the services we delivered. IBP sees the intrinsic ity products and services but with the atmosphere value of this longevity and the respect our name of a family-owned business.” brings to the company and in our community. 2005 2006 2007 2008 2012 2013 • The Closet Magician • OJ Insulation • Diamondback • Hinkle Insulation & Dry- • Tim Hughes Custom • Ace Insulation • William Coffin, Inc. • Perry Gutter Insulation wall Homes/Ricardo Contractors, Inc. • Bayside Insulation • All-Weatherization • Celco Insulation • Insulation Northwest / Guerrero • KMB Contracting • B-Organized Insulation Contractors • Complete Northwest Builder • Rogers Weatherization Services & Specialty Products • Gold Star Residential Services • PFDF, Inc. dba Superior • Accurate Insulation Insulation • CLS Insulation • All Pro Insulation, LLC Insulation Systems 2014 • Freedom Insulation • Professional • Palicom 2000 • TCI Contracting, LLC • U.S. Insulation Corp. • Aaron’s Fireplaces Insulation • Tidewater 2009 • Leonard Mountain Farm • Marv’s Insulation & Insulation, Inc. • Superior Insulators • Hi-R Foam Enterprises • Universal Insulation • Installed Building • Better Blown of Georgia Insulation • Skyline Insulation • Roger’s Air-Tite • Insulation Investments, Solutions • Absolute Basement • Any Season • Quality II Insulation, LLC LLC (Accurate Insulation) Waterproofing Insulation Insulators 2011 • SM Waterproofing • InsulVail, LLC • Garland • Key Insulation • Thomas Insulating East • TX Pro Contractors • Wilson Insulation Insulation • Loveday & • Rocky Mountain • Erie Insulation Company Insulation, LLC 2008 2013 2005 2006 2007 — 2012 2011 — 2014

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    FINANCIAL HIGHLIGHTS GROSS PROFIT 1 SELLING AND ADMINISTRATIVE 2 ($ in millions and % margin) ($ in millions and % of net revenue) 27% 27% 25% 25% 24% 24% 21% 21% $57 $74 $110 $142 $64 $71 $91 $110 2011 2012 2013 2014 2011 2012 2013 2014 NET INCOME WORKING CAPITAL 3 ($ in millions and % of net revenue) ($ in millions and % of net revenue) 7% 3% 6% 6% 6% 1% (1)% $6 $14 $(9) $(2) (4)% $16 $19 $27 $32 2011 2012 2013 2014 2011 2012 2013 2014 1 Gross profit in 2014 adjusted for adverse development in workers’ compensation. 2 Selling and Administrative adjusted for: 2014 IPO and follow-on costs, share based compensation, SOX initial implementation and gain from redeemable preferred stock, 2013 legal settlement and 2012 non-cash stock compensation. 3 Working Capital excludes cash on hand of: 2011—$2,528; 2012—$3,898; 2013—$4,065; 2014—$10,761. Forward-looking Statements This Annual Report includes forward-looking statements within the meaning of U.S. federal securities laws, which involve risks and uncertain- ties. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms “believe,” “estimate,” “project,” “aim,” “anticipate,” “expect,” “seek,” “predict,” “contemplate,” “continue,” “possible,” “intend,” “may,” “plan,” “forecast,” “future,” “might,” “could,” “would” or “should” or, in each case, their negative, or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this Annual Report and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our results of operations, financial con- dition, liquidity, prospects, growth strategies, the industry in which we operate and potential acquisitions. We derive many of our forward- looking statements from our operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and, of course, it is impossible for us to anticipate all factors that could affect our actual results. Factors that could cause actual results to differ from those implied by such forward- looking statements are more fully described in “Risk Factors” and elsewhere in our Annual Report and subsequent quarterly reports that we file with the Securities and Exchange Commission. The risks described in “Risk Factors” are not exhaustive. All forward-looking statements are based upon information available to us on the date of this Annual Report. 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.

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    BOARD OF DIRECTORS JEFFREY W. EDWARDS LAWRENCE A. HILSHEIMER STEVEN G. RAICH President, Chief Executive Officer, Executive Vice President Partner and Chairman and Chief Financial Officer Littlejohn Management Holdings, LLC Installed Building Products, Inc. Greif, Inc. ROBERT H. SCHOTTENSTEIN MICHAEL T. MILLER JANET E. JACKSON President, Chief Executive Officer, Executive Vice President, President and Chief Executive Officer and Chairman Chief Financial Officer United Way of Central Ohio M/I Homes, Inc. Installed Building Products, Inc. J. MICHAEL NIXON MICHAEL H. THOMAS MARGOT L. CARTER Founder Partner (Retired) President and Founder TCI Contracting, LLC Stonehenge Partners, Inc. Living Mountain Capital LLC EXECUTIVE OFFICERS JEFFREY W. EDWARDS MICHAEL T. MILLER JAY P. ELLIOTT President, Chief Executive Officer, and Executive Vice President, Chief Financial Chief Operating Officer Chairman Officer, and Director INVESTOR INFORMATION STOCK INFORMATION TRANSFER AGENT AND ADDITIONAL INFORMATION Ticker Symbol: IBP REGISTRAR Additional information about the Exchange: NYSE American Stock Transfer & Trust Company, LLC Company and copies of this Annual 6201 15th Avenue Report, along with our periodic filings INDEPENDENT REGISTERED Brooklyn, NY 11219 with the Securities and Exchange Com- PUBLIC ACCOUNTING FIRM (800) 937-5449 mission, are available on our website at Deloitte & Touche LLP www.amstock.com www.installedbuildingproducts.com. Columbus, OH Printed copies are also available upon ANNUAL MEETING OF request, free of charge, by contacting: STOCKHOLDERS June 3, 2015 at 10:00 a.m. ET INVESTOR RELATIONS www.virtualshareholdermeeting.com/IBP2015 Installed Building Products, Inc. 495 S. High Street, Suite 50 Columbus, OH 43215 (614) 221-9944 Annual Report Design by Curran & Connors, Inc. / www.curran-connors.com

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    AT IBP, WE BELIEVE IN FOSTERING LEADERSHIP AT THE LOCAL LEVEL THROUGH COMPREHENSIVE TRAINING AND A NATIONAL SUPPORT SYSTEM. OUR MISSION consists of three guiding principles: personal integrity, customer satisfaction and a passion for winning. Quite simply, we strive to be the recognized industry leader in every market we serve. Installed Building Products, Inc. 495 South High St., Suite 50 Columbus, OH 43215 www.installedbuildingproducts.com

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