• Revenue: 4th quarter net revenue increased 4% to $750 million compared to $721 million in the prior year period.
• Same Branch Sales Growth: Up 1% for the fourth quarter.
• Adjusted Gross Margin: 33.6%, down from 34.1% in the prior year period.
• Adjusted EBITDA: Increased to a record $132 million with a margin of 17.6% for the fourth quarter.
• Net Income: Adjusted income increased to $81 million or $2.88 per diluted share.
• Cash Flow from Operations: $340 million for the year ended December 31, 2024.
• Acquisitions: Nine businesses acquired in 2024 with combined annual revenue of over $100 million.
• Share Repurchases: 383,000 shares repurchased in Q4, totaling $145 million for 2024.
• Dividend Increase: Regular quarterly cash dividend increased by 6% to $0.37 per share; annual variable dividend increased by 6% to $1.70 per share.
• Net Debt to EBITDA Ratio: 1.08 times as of December 31, 2024.

• Warning! GuruFocus has detected 5 Warning Signs with TRS.

Release Date: February 27, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Installed Building Products Inc (NYSE:IBP) achieved record revenue and profitability in 2024, supported by organic growth across residential markets.
• The company invested approximately $87 million in acquisitions and allocated $230 million to dividends and share repurchases in 2024.
• IBP's board approved a 6% increase to both the regular quarterly cash dividend and the annual variable dividend, reflecting confidence in the company's financial position.
• The company completed nine acquisitions in 2024, adding over $100 million in annual revenue, with a strong outlook for further acquisitions in 2025.
• IBP's net income and EBITDA growth in 2024 were driven by a focus on operationally and financially attractive jobs, achieving record diluted net income per share and adjusted EBITDA.

Negative Points

• The company's adjusted gross margin decreased to 33.6% in the fourth quarter, down from 34.1% in the prior year, due to higher sales growth in lower-margin segments.
• IBP experienced a less than 1% decrease in job volumes in the fourth quarter, despite a 1.2% increase in price.
• The company anticipates challenges in the multi-family segment, with a potential 20-25% decline in units under construction over the next six months.
• IBP's selling and administrative expenses as a percentage of sales were slightly higher than expected, impacting overall profitability.
• The company faces a benign inflationary environment, which may limit price mix benefits in the near term.

Q & A Highlights

Q: What is IBP's outlook for multi-family and single-family markets in the new year? A: Michael Miller, CFO, stated that IBP expects to outperform the market in the multi-family segment, despite a projected 20-25% decline in units under construction. For single-family, IBP anticipates low single-digit growth, with a slow start to the year but potential improvement in the second half.

Q: How does IBP view price mix trends at the start of the year? A: Michael Miller noted that the current environment is benign in terms of inflation, with price mix benefits largely carrying over from previous periods. The pricing environment remains stable for both IBP and its suppliers.

Q: Can you elaborate on IBP's growth plans for the multi-family segment? A: Jeffrey Edwards, CEO, highlighted that there is significant opportunity for expansion in multi-family markets. IBP's CQ division is actively expanding into new markets, which could lead to increased market share and product penetration.

Q: How is the M&A pipeline looking compared to 6-12 months ago? A: Jeffrey Edwards mentioned that the M&A pipeline remains strong, with numerous opportunities available. The focus is on acquiring businesses that align with IBP's strategic goals, including potential larger deals within their current wheelhouse.

Q: What are the expectations for gross margins given the current environment? A: Michael Miller explained that while there are headwinds from lower-margin segments like distribution, improvements in complementary product margins are offsetting these impacts. The company is focused on managing expenses to maintain margin stability.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.