Installed Building Products (
Seven other companies are scheduled for the week of
The manager and joint managers are
IBP scheduled a
Revenue was up 26% for 2012 vs 2011, and was up 49% for the nine months ended
IBP depends on residential new constrution for most of its revenue. But single family homes sales were down in December '13 relative to the year earlier period.
Gross margin is only 25% and 25% of IPO proceeds are going to shareholders.
IBP does expect growth from increased adoption by states and municipalities of the 2012 IECC (see below).
Installed Building Products (IBP)
*Earnings, p1 & 49
These companies also install insulation, among other items
Avoid. Price-to-book is 1, which is sometimes attractive to institutions and is in the same range as MAS and OC.
But the P/E ratio annualized for the nine months ended September '13 is 351, and IBP was unprofitable in 2011 and 2011. The business is extremely cyclical and IBP expects to pay no dividends.
Even though IBP expects government regulations to drive growth, the annualized P/E for the nine months ended September '13 is too high, especially compared to MAS and OC.
The amount of insulation in a new home is regulated by various building and energy codes, which establish minimum thermal and air sealing performance requirements.
These codes are typically updated with more stringent requirements every three years.
The most recent of these code enhancements to be adopted is the 2012 International Energy Conservation Code, or the 2012 IECC.
IBP believes that new residential insulation demand will increase as a result of increased adoption of the 2012 IECC by states and municipalities.
More about IBP's business
IBP also installs complementary building products, including garage doors, rain gutters, shower doors, closet shelving and mirrors.
Insulation installation comprised approximately 74% of its net revenue for the nine-month period ended
The new single-family end market comprised approximately 73% of its net revenue for the nine-month period ended
Substantially all of
At the same time,
IBP tends to have higher sales during the second half of the year as homebuilder customers complete construction of homes placed under contract for sale in the traditionally stronger spring selling season.
In addition, some of the larger branches operate in states more impacted by winter weather and as such experience a slowdown in construction activity during the first quarter of the calendar year. This winter slowdown contributes to traditionally lower sales in the first quarter.
Cetus Capital II, LLC22.7%
Use of proceeds
Company proceeds are allocated as follows:
to purchase additional shares of its common stock) to repurchase all of its outstanding preferred stock from Littlejohn for total consideration of