Installed Building Products Inc (NYSE: NYSE:IBP) disclosed its Q3 2023 financial results today, showing a 1.8% drop in net revenue to $706.5 million, attributed to a 1.7% decline in installation revenue. However, the company reported an 11.5% rise in net income to $68.0 million and a 12.7% increase in net income per diluted share to $2.40. The company's adjusted EBITDA reached a record high of $130.5 million, marking an 8.6% increase year-on-year.
CEO Jeff Edwards attributed these results to the company's diversification strategies and the prioritization of service value over volume. He also underscored IBP's commitment to ESG principles.
In terms of acquisitions, IBP added approximately $58 million of annual revenue in 2023, though some anticipated acquisitions have been deferred to Q1 2024. The company declared a Q3 dividend of $0.33 per share and announced a 5% increase in the Q4 regular cash dividend compared to the previous year.
The company's gross profit rose by 9.4% to $242.1 million, with gross profit as a percentage of total revenue increasing to 34.3%. The Installation segment experienced a 6.0% decrease in residential sales, while multi-family same-branch sales saw a significant boost of 28.4%. Commercial same-branch sales fell by 1.3%, but total commercial sales, including acquisitions, grew by 3.7%.
As of September 30, 2023, IBP had $339.8 million in cash and cash equivalents and repriced its Term Loan B facility, reducing borrowing costs by 25 basis points.
Despite potential interest rate volatility impacting the housing industry, Edwards expressed confidence in the long-term potential of IBP's residential and commercial end markets. The company's multi-family revenue is supported by a stable backlog, and its growth strategy includes acquisitions, cash dividends, and stock repurchases.
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