Installed Building Products, Inc.

Previous wording

We are one of the nation’s largest insulation installers for the residential new construction market and are also a diversified installer of complementary building products throughout the United States, including waterproofing, fire-stopping and fireproofing, garage doors, rain gutters, window blinds, shower doors, closet shelving, mirrors and other products. We offer our portfolio of services for new and existing single-family and multi-family residential and commercial building projects in all 48 continental states and the District of Columbia from our national network of over 250 branch locations. During the three months ended September 30, 2024, 94% of our net revenue came from the service-based installation of these products across all of our end markets which forms our Installation operating segment and single reportable segment. In addition, two regional distribution operations serve the Midwest, Mountain West, Northeast and Mid-Atlantic regions of the United States, and we operate a cellulose manufacturing facility. We believe our business is well positioned to continue to profitably grow over the long-term due to our strong balance sheet, liquidity and our continuing acquisition strategy.

Current wording

We are one of the nation’s largest insulation installers for the residential new construction market and are also a diversified installer of complementary building products throughout the United States, including waterproofing, fire-stopping and fireproofing, garage doors, rain gutters, window blinds, shower doors, closet shelving, mirrors and other products. We offer our portfolio of services for new and existing single-family and multi-family residential and commercial building projects in all 48 continental states and the District of Columbia from our national network of over 250 branch locations. During the three months ended March 31, 2025, 95% of our net revenue came from the service-based installation of these products across all of our end markets which forms our Installation operating segment and single reportable segment. In addition, three regional distribution operations serve the Midwest, Mountain West, Northeast and Mid-Atlantic regions of the United States, and we operate a cellulose insulation manufacturing facility. We believe our business is well positioned to continue to profitably grow over the long-term due to our strong balance sheet, liquidity and our continuing acquisition strategy.

Previous wording

Net revenue increased 7.7%, or $54.1 million to $760.6 million, while gross profit increased 6.1% to $256.8 million during the three months ended September 30, 2024 compared to 2023. The increase in net revenue was primarily due to the 8.8% increase in revenue of our largest end market, residential single-family new construction, 7.7% sales growth in the commercial end market, and also by recent acquisitions and selling price increases. The increase in gross profit was primarily driven by sales growth in all end markets, selling price and product mix improvements and volume growth. The 2.7% increase in our price/mix metric for our Installation segment was primarily due to residential end market price growth. Net revenue grew faster than gross profit due to higher material and labor costs compared to the prior year. Certain net revenue and industry metrics we use to monitor our operations are discussed in the "Key Measures of Performance" section below, and further details regarding results of our various end markets are discussed further in the "Net Revenue, Cost of Sales and Gross Profit" section below.

Current wording

Net revenue decreased 1.2%, or $8.1 million to $684.8 million, while gross profit decreased 4.6% to $223.7 million during the three months ended March 31, 2025 compared to 2024. The decrease in net revenue was primarily due to the 5.6% decrease in Installation segment volume, partially offset by the 1.5% increase in our price/mix metric. The decrease in gross profit was primarily driven by higher material and fixed vehicle costs including insurance and depreciation. Certain net revenue and industry metrics we use to monitor our operations are discussed in the "Key Measures of Performance" section below, and further details regarding results of our various end markets are discussed further in the "Net Revenue, Cost of Sales and Gross Profit" section below.

Previous wording

As of September 30, 2024, we had $406.2 million of cash and cash equivalents and we have not drawn on our revolving line of credit. This strong liquidity position allowed us to return capital to shareholders by increasing our regular quarterly dividend 6% over the second quarter of 2023 to $0.35 per share, or $9.8 million in the aggregate, and by repurchasing $20.7 million of our outstanding common stock during the three months ended September 30, 2024.

Current wording

As of March 31, 2025, we had $298.7 million of cash and cash equivalents and we have not drawn on our revolving line of credit. This strong liquidity position allowed us to return capital to shareholders by increasing our regular quarterly dividend 6% over the first quarter of 2024 to $0.37 per share, or $10.2 million in the aggregate. We also increased our annual special dividend from $1.60 per share paid in the first quarter of 2024 to $1.70 a share, or a 6% increase, during the three months ended March 31, 2025. Additionally, we repurchased $34.3 million of our outstanding common stock during the three months ended March 31, 2025 for a total capital return to shareholders of $91.6 million.

Previous wording

Net revenue increased during the three months ended September 30, 2024 over the same period in 2023 as we increased same branch sales in all our end markets combined with revenue contributions from our recent acquisitions. Same branch sales growth from the residential end markets increased 5.0% for the three months ended September 30, 2024 over the same period ended September 30, 2023. Installation selling price and product mix improvements also increased 2.7% with same branch sales volume increase of 2.6%. Multi-family same branch sales remained beneficial with period-over-period growth of 2.4%. Lastly, the Distribution operating segment, combined with our Manufacturing operating segment, further supported net revenue growth as it experienced 9.1% growth during the three months ended September 30, 2024.

Current wording

Net revenue decreased during the three months ended March 31, 2025 over the same period in 2024 as same branch sales decreased in all our end markets. Same branch sales from the residential end markets decreased 4.6% for the three months ended March 31, 2025 over the same period ended March 31, 2024. Installation selling price and product mix improvements increased 1.5% which helped partially offset the same branch sales volume decrease of 5.6%. The commercial end market opportunities remained resilient and same branch sales within this end market decreased only 2.8%.

Previous wording

As a percentage of net revenue, gross profit improved during the nine months ended September 30, 2024 compared to the corresponding prior year period primarily on the strength of price/mix growth. Gross profit grew slower than net revenue during the three months ended September 30, 2024 due to higher material and labor costs driven by changes in product and customer mix. We will continue to work with our suppliers to lessen the impact on our margins and with our customers to offset further cost increases through selling price adjustments.

Current wording

As a percentage of net revenue, gross profit decreased during the three months ended March 31, 2025 compared to the corresponding prior year period primarily due to higher material and vehicle costs. We will continue to work with our suppliers to lessen the impact on our margins and with our customers to offset further cost increases through selling price adjustments.

Previous wording

The dollar increase in selling expenses for the three and nine months ended September 30, 2024 compared to 2023 was primarily driven by an increase in selling compensation and commissions to support our increased net revenue. Selling expense as a percentage of sales increased during the three months ended September 30, 2024 compared to 2023 due to increased compensation from changes in product mix. Selling expense as a percentage of sales remains flat for the nine months ended September 30, 2024 compared to 2023.

Current wording

The dollar increase in selling expenses for the three months ended March 31, 2025 compared to 2024 was primarily driven by an increase in selling compensation and increased credit loss expense. Selling expense as a percentage of sales increased during the three months ended March 31, 2025 compared to 2024 due to decreased leverage on salaries from lower revenue.

Previous wording

The dollar increase in administrative expenses for the three and nine months ended September 30, 2024 compared to 2023 was primarily due to an increase in wages and benefits, whichwas attributable to both acquisitions and organic growth as well as favorable company performance. Facility and insurance cost increases due to inflationary pressures also factored into the overall increase in administrative operating expenses. Administrative expenses increased as a percentage of sales for the three and nine months ended September 30, 2024 compared to 2023 primarily due to higher salaries and bonuses due to higher profitability.

Current wording

The dollar increase in administrative expenses for the three months ended March 31, 2025 compared to 2024 was primarily due to an increase in wages and benefits, whichwas attributable to both acquisitions and wage inflation. Facility cost increased due to acquisitions and inflationary pressures also factored into the overall increase in administrative operating expenses. Administrative expenses increased as a percentage of sales for the three months ended March 31, 2025 compared to 2024 primarily due to decreased leverage on wages and benefits from lower revenue.

Previous wording

Amortization expense for the three and nine months ended September 30, 2024 compared to 2023 decreased primarily due to the acquisition of fewer finite-lived intangible assets.

Current wording

Amortization expense for the three months ended March 31, 2025 compared to 2024 decreased primarily due to the acquisition of fewer finite-lived intangible assets.

Previous wording

The decline in interest expense, net during the three and nine months ended September 30, 2024 compared to 2023 was primarily due to increased interest income on various bank accounts, partially offset by decreased interest expense associated with term loan refinancing costs.

Current wording

The decline in interest expense, net during the three months ended March 31, 2025 compared to 2024 was primarily due to decreased interest expense associated with prior year term loan repricing, partially offset by decreased interest income on money market accounts.

Previous wording

The effective tax rate for each of the three months ended September 30, 2024 and 2023 were unfavorably impacted by certain expenses not being deductible for income tax reporting purposes. The effective tax rate for each of the nine months ended September 30, 2024 and 2023 were favorably impacted by recognition of a windfall tax benefit from equity vesting.

Current wording

The effective tax rate for each of the three months ended March 31, 2025 and 2024 were unfavorably impacted by certain expenses not being deductible for income tax reporting purposes.

Previous wording

During the three and nine months ended September 30, 2024, we recorded unrealized losses of $11.4 million and $8.3 million, net of taxes, respectively, on our cash flow hedges due to the changes in the market's expectations for future long-term interest rates relative to our three active interest rate swaps and our two forward interest rate swaps. We also amortized $1.1 million and $3.3 million of our remaining unrealized gains and losses, net, on our terminated cash flow hedges to interest expense during the three and nine months ended September 30, 2024, respectively, not including the offsetting tax effects of $0.3 million and $0.9 million, respectively.

Current wording

During the three months ended March 31, 2025, we recorded unrealized losses of $6.1 million, net of taxes, on our cash flow hedges due to the market's expectations for lower interest rates in the future relative to our three active interest rate swaps and our two forward interest rate swaps. During the three months ended March 31, 2024, we recorded unrealized gains of $3.9 million, net of taxes, on our cash flow hedges due to the changes in the market's expectations for future long-term interest rates.

Previous wording

Inflation that affected the economy as a whole in 2022 began moderating in 2023 as the Federal Reserve took actions to stabilize inflation by raising the federal funds rate multiple times through July 2023. These rate hikes indirectly raised the 30-year fixed rate mortgage average in the United States to over 7% for the first time since 2008 during periods of 2023 and 2024. These rate-driven pressures began to curtail housing demand beginning in the second half of 2022 as mortgage financing affordability was reduced. Inflation rates in 2024 have remained above the 2% stated target, however the Federal Reserve implemented a 50 basis point cut in September 2024. The Federal Reserve has signaled plans to lower rates further during the remainder of 2024 and into 2025. While a more accommodating Federal Reserve monetary policy does not directly determine mortgage rates, the expected easing likely will contribute to a downward trend in mortgage rates in the near term. We expect to be somewhat impacted by the current elevated rates for the remainder of 2024 but anticipate pressures to lessen over time if mortgage rates are further reduced in the coming months.

Current wording

Inflation that affected the economy as a whole in 2022 began moderating in 2023 as the Federal Reserve took actions to stabilize inflation by raising the federal funds rate multiple times through July 2023. These rate hikes indirectly affected the 30-year fixed rate mortgage average in the United States, resulting in some rates peaking above 7% in recent years. These rate-driven pressures have curtailed housing demand as mortgage financing affordability has been reduced. Inflation rates in 2025 have remained above the 2% stated target, however the Federal Reserve has signaled plans to lower rates further during the remainder of 2025. While a more accommodating Federal Reserve monetary policy does not directly determine mortgage rates, the expected easing of rates will likely contribute to a downward trend in mortgage rates in the near term. We expect to be impacted by the current elevated rates for the remainder of 2025 but anticipate pressures to lessen over time if mortgage rates are further reduced in the coming months.

Previous wording

Activity in the residential homebuilding market remains resilient as non-seasonally adjusted single-family starts, our largest end market, increased 10.1% per the U.S. Census Bureau for the nine months ended September 30, 2024 compared to the same period in 2023. Overall, stable employment and near historic lows in existing home inventory levels continue to support demand for residential new construction activity despite the affordability concerns. As a result, while we expect cyclicality to continue in the housing industry, we believe the long-term opportunities in our residential and commercial end markets are favorable. Our largest customers are publicly traded homebuilders, and these builders have been able to increase affordability by offering mortgage rate buydowns as incentives to their customers. Regarding the repair and remodel markets, many existing homeowners are locked into low interest mortgages and an aging housing stock exists in many areas of the United States. We expect these two factors, combined with incentives from the Inflation Reduction Act of 2022, to drive growth in the repair and remodel markets we service.

Current wording

Elevated home prices, high mortgage rates, recent economic uncertainty and rising new home inventory were the primary contributors to the decline in demand of new homes thus far in 2025. Activity slowed in the residential homebuilding market as non-seasonally adjusted single-family starts, our largest end market, decreased 5.6% for the three months ended March 31, 2025 compared to the same period in 2024, per the U.S. Census Bureau. Employment remains stable and continues to support demand for residential new construction activity despite the affordability concerns and recent economic uncertainty. As a result, while we expect cyclicality to continue in the housing industry, we believe the long-term opportunities in our residential and commercial end markets are favorable. Our largest customers are publicly traded homebuilders, and these builders have been able to increase affordability by offering mortgage rate buydowns as incentives to their customers. Regarding the repair and remodel markets, many existing homeowners are locked into low interest mortgages and an aging housing stock exists in many areas of the United States, bolstering demand in this end market.

Previous wording

In addition, we experience price increases due to supply shortages and general economic inflationary pressures from our suppliers from time to time, and we anticipate that we will experience additional price increases in 2024. Increased market pricing, regardless of the catalyst, has and could continue to impact our results of operations in 2024, to the extent that price increases cannot be passed on to our customers. Our selling price increases were able to support most material cost increases in 2023 and the first three quarters of 2024, but we may have more difficulty raising prices throughout the remainder of 2024 and into 2025 if housing demand slows. We will continue to work with our customers to adjust selling prices to offset higher costs as they occur.

Current wording

We typically purchase the materials we use in our business directly from manufacturers. The largest fiberglass manufacturers have cut production capacity during past business cycles which has caused periods of industry-wide supply allocations. While we are not currently experiencing material supply shortages, we could incur such shortages in 2025 and beyond if these manufacturers reduce production this year. We also experience price increases from our suppliers from time to time, including multiple increases over the last four years caused by supply shortages and general economic inflationary pressures. We could be subject to increased material pricing on some of the materials we install and sell due to tariffs imposed on goods imported from certain foreign nations. The extent of these increases will depend on a variety of factors including the magnitude of each tariff, the extent our vendors pass on the tariffs they incur, and the number of countries subject to tariffs in the future. Increased market pricing, regardless of the catalyst, has and could continue to impact our results of operations in 2025, to the extent that price increases cannot be passed on to our customers. We may have more difficulty raising prices in 2025 if housing demand contracts further. We will continue to work with our customers to adjust selling prices to offset higher costs as they occur.

Previous wording

Our business is labor intensive and the majority of our employees work as installers on local construction sites. We expect to continue to spend more to hire, train and retain installers to support our growing business, as tight labor availability continues within the construction industry. Our workers’ compensation costs also continue to rise as we increase our coverage for additional personnel. Inflation and market competition caused our labor costs as a percentage of revenue to increase during the nine months ended September 30, 2024 compared to 2023.

Current wording

Our business is labor intensive and the majority of our employees work as installers on local construction sites. We expect to continue to spend more to hire, train and retain installers to support our business, as tight labor availability continues within the construction industry. Our workers’ compensation costs also continue to rise as we increase our coverage for additional personnel.

Previous wording

Our employee retention rates remained better than industry averages in the nine months ended September 30, 2024. We believe this is a result of our strong culture and the various programs meant to benefit our employees, including our financial wellness plan, emotional well-being coaching, longevity stock compensation plan and comprehensive benefit packages we offer. We also provide assistance from the Installed Building Products Foundation meant to benefit our employees, their families and their communities. While improved retention drives lower costs to recruit and train new employees, resulting in greater installer productivity, these improvements are somewhat offset by the additional costs of these incentives.

Current wording

Our employee retention rates remained better than industry averages in the three months ended March 31, 2025. We believe this is a result of our strong culture and the various programs meant to benefit our employees, including our financial wellness plan, emotional well-being coaching, longevity stock compensation plan and comprehensive benefit packages we offer. We also provide assistance from the Installed Building Products Foundation meant to benefit our employees, their families and their communities. While improved retention drives lower costs to recruit and train new employees, resulting in greater installer productivity, these improvements are somewhat offset by the additional costs of these incentives.

Previous wording

Our capital resources primarily consist of cash from operations and borrowings under our various debt agreements and capital equipment leases and loans. As of September 30, 2024, we had cash and cash equivalents of $406.2 million as well as access to $250.0 million under our asset-based lending credit facility (as defined below), less $5.8 million of outstanding letters of credit, resulting in total liquidity of $650.4 million. Liquidity may also be limited in the future by certain cash collateral limitations under our asset-based credit facility (as defined below), depending on the status of our borrowing base availability.

Current wording

Our capital resources primarily consist of cash from operations and borrowings under our various debt agreements and capital equipment leases and loans. As of March 31, 2025, we had cash and cash equivalents of $298.7 million as well as access to $250.0 million under our asset-based lending credit facility (as defined below), less $4.0 million of outstanding letters of credit, resulting in total liquidity of $544.7 million. Liquidity may also be limited in the future by certain cash collateral limitations under our asset-based credit facility (as defined below), depending on the status of our borrowing base availability.

Previous wording

We believe that our cash flows from operations, combined with our current cash levels and available borrowing capacity, will be adequate to support our ongoing operations and to fund our business needs, commitments and contractual obligations for at least the next 12 months as evidenced by our net positive cash flows from operations for the nine months ended September 30, 2024. We believe that we have access to additional funds, if needed, through the capital markets to obtain further debt financing under the current market conditions, but we cannot guarantee that such financing will be available on favorable terms, or at all. In the short-term, we expect the seasonal trends we typically experience to return, including higher sales in the spring, summer and fall than in the winter. This could affect the timing of cash collections and payments during the rest of 2024 and into 2025.

Current wording

We believe that our cash flows from operations, combined with our current cash levels and available borrowing capacity, will be adequate to support our ongoing operations and to fund our business needs, commitments and contractual obligations for at least the next 12 months as evidenced by our net positive cash flows from operations for the three months ended March 31, 2025. We believe that we have access to additional funds, if needed, through the capital markets to obtain further debt financing under the current market conditions, but we cannot guarantee that such financing will be available on favorable terms, or at all. In the short-term, we expect the seasonal trends we typically experience to return, including higher sales in the spring, summer and fall than in the winter. This could affect the timing of cash collections and payments during the rest of 2025.

Previous wording

In "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our 2023 Form 10-K, we disclosed that we had $1.1 billion aggregate long-term material cash requirements as of December 31, 2023. In addition to these commitments, we have a long-term commitment to purchase 43.7 million pounds of material with variable pricing through March 2026. See Note 16, Commitments and Contingencies, for more information on this commitment. Additionally, we extended our term loan via a refinancing during the nine months ended September 30, 2024 which will extend the maturity date by more than 2 years and require an additional $10.0 million in principal payments. There were no other material changes to our cash requirements during the period covered by this Quarterly Report on Form 10-Q outside of the normal course of our business.

Current wording

In "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our 2024 Form 10-K, we disclosed that we had $1.1 billion aggregate long-term material cash requirements as of December 31, 2024. In addition to these commitments, we have two long-term commitments to purchase material with various pricing through December 2027. See Part I, Item 1. Financial Statements, Note 16, Commitments and Contingencies, for more information on these commitments. There were no other material changes to our cash requirements during the period covered by this Quarterly Report on Form 10-Q outside of the normal course of our business.

Previous wording

Net cash provided by operating activities increased from 2023 to 2024 primarily due to the increases in net income, changes in certain working capital requirements and various non-cash adjustments, partially offset by increases of our accounts receivable and inventory balances.

Current wording

Net cash provided by operating activities increased from 2024 to 2025 primarily due to the increase in the non-cash depreciation expense adjustment and the decrease in accounts receivable and other assets balances, partially offset by the decrease of net income primarily driven by revenue declining.

Previous wording

Net cash used in investing activities increased from 2023 to 2024 primarily due to more spending on purchases of property and equipment to support our growing business during the nine months ended September 30, 2024, partially offset by the decrease in spending on acquisitions of businesses in 2024 compared to 2023.

Current wording

Net cash used in investing activities increased from 2024 to 2025 primarily due to more spending on acquisitions of businesses in 2025 compared to 2024, partially offset by slightly less spending on purchases of property and equipment during the three months ended March 31, 2025.

Previous wording

Net cash used in financing activities increased from 2023 to 2024 primarily due to dividends paid and repurchases of common stock during the nine months ended September 30, 2024. The increase was partially offset by net proceeds from the New Term Loan. See Note 12, Stockholders' Equity, for more information on the dividends paid and stock repurchases.

Current wording

Net cash used in financing activities increased from 2024 to 2025 primarily due to dividends paid and repurchases of common stock during the three months ended March 31, 2025. The increase was partially offset by net proceeds from vehicle and equipment notes. See Part I, Item 1. Financial Statements, Note 12, Stockholders' Equity, for more information on the dividends paid and stock repurchases.

Previous wording

In March 2024, we entered into Amendment No. 3 to our Term Loan Credit Agreement ("Third Amendment"). The Third Amendment amended certain terms of the existing Term Loan Credit Agreement and allowed for the issuance of a new term loan ("New Term Loan") in the amount of $500.0 million which will mature on March 28, 2031. Net proceeds of the New Term Loan were used to refinance the remaining $490.0 million on our previous term loan, pay fees and increase working capital. The New Term Loan does not have any financial maintenance covenants, eliminates the credit spread adjustment and the floor is reduced to 0.00%. The New Term Loan bears interest, at our option, at a rate equal to either: Term SOFR plus 2.00% per annum, or an alternative base rate plus 1.00%. The New Term Loan also includes (i) a six-month “soft call” protection provision during which a 1.00% premium will be charged in connection with certain repricing transactions, and (ii) a 50 basis points most favored nation protection for 12 months following the effective date. The New Term Loan amortizes in quarterly principal payments of $1.25 million starting on June 30, 2024, with any remaining unpaid balances due on the maturity date of March 28, 2031. As of September 30, 2024, we had $493.2 million, net of unamortized debt issuance costs, due on our New Term Loan.

Current wording

In March 2024, we entered into Amendment No. 3 to our Term Loan Credit Agreement ("Third Amendment"). The Third Amendment amended certain terms of the previous seven-year term loan facility with Royal Bank of Canada as the administrative agent and collateral agent thereunder under our credit agreement (the “Term Loan Agreement”), dated as of December 14, 2021 (as previously amended by the First Amendment thereto dated April 28, 2023 and the Second Amendment thereto dated August 14, 2023). The Third Amendment allowed for the issuance of a new term loan (the "Term Loan") in the amount of $500 million which will mature on March 28, 2031. Net proceeds of the Term Loan were used to refinance the remaining $490.0 million on our previous term loan, pay fees and increase working capital. In November 2024, we repriced our Term Loan by entering into Amendment No. 4 to our Term loan Credit Agreement ("Fourth Amendment"). The amended Term Loan now bears interest, at our option, at a rate equal to either: the adjusted Term SOFR plus 1.75% per annum, or an alternative base rate plus 0.75%.

Previous wording

Subject to certain exceptions, the New Term Loan will be subject to mandatory prepayments of (i) 100% of the net cash proceeds from issuances or incurrence of debt by the Company or any of its restricted subsidiaries (other than with respect to certain permitted indebtedness (excluding any refinancing indebtedness); (ii) 100% (with step-downs to 50% and 0% based on achievement of specified net leverage ratios) of the net cash proceeds from certain sales or dispositions of assets by the Company or any of its restricted subsidiaries in excess of a certain amount and subject to reinvestment provision and certain other exception; and (iii) 50% (with step-downs to 25% and 0% based upon achievement of specified net leverage ratios) of excess cash flow of the Company and its restricted subsidiaries in excess of $15.0 million, subject to certain exceptions and limitations.

Current wording

Subject to certain exceptions, the Term Loan will be subject to mandatory prepayments of (i) 100% of the net cash proceeds from issuances or incurrence of debt by the Company or any of its restricted subsidiaries (other than with respect to certain permitted indebtedness (excluding any refinancing indebtedness); (ii) 100% (with step-downs to 50% and 0% based on achievement of specified net leverage ratios) of the net cash proceeds from certain sales or dispositions of assets by the Company or any of its restricted subsidiaries in excess of a certain amount and subject to reinvestment provision and certain other exception; and (iii) 50% (with step-downs to 25% and 0% based upon achievement of specified net leverage ratios) of excess cash flow of the Company and its restricted subsidiaries in excess of $15.0 million, subject to certain exceptions and limitations.

Previous wording

In February 2022, we amended and extended the term of our asset-based lending credit agreement (the “ABL Credit Agreement”). The ABL Credit Agreement increased the commitment under the asset-based lending credit facility (the “ABL Revolver”) to $250.0 million from $200.0 million, and permits us to further increase the commitment amount up to $300.0 million. The amendment also extends the maturity date from September 26, 2024 to February 17, 2027. The ABL Revolver bears interest at either the base rate or the Secured Overnight Financing Rate ("Term SOFR"), at our election, plus a margin of 0.25% or 0.50% in the case of base rate loans or 1.25% or 1.50% for Term SOFR advances (in each case based on a measure of availability under the ABL Credit Agreement). The amendment also allows for modification of specified fees dependent upon achieving certain sustainability targets, in addition to making other modifications to the ABL Credit Agreement. In connection with the Term Loan Agreement, we entered into a third amendment to the ABL/Term Loan Intercreditor Agreement with Bank of America, N.A., as ABL Agent for the lenders under the ABL Credit Agreement, and Royal Bank of Canada as collateral agent under the Term Loan Agreement. Including outstanding letters of credit, our remaining availability under the ABL Revolver as of September 30, 2024 was $244.2 million.

Current wording

In February 2022, we amended and extended the term of our asset-based lending credit agreement (the "ABL Credit Agreement"). The ABL Credit Agreement increased the commitment under the asset-based lending credit facility (the "ABL Revolver") to $250 million from $200.0 million, and permits us to further increase the commitment amount up to $300.0 million. The amendment also extends the maturity date from September 26, 2024 to February 17, 2027. The ABL Revolver bears interest at either the base rate or the Secured Overnight Financing Rate ("Term SOFR"), at our election, plus a margin of 0.25% or 0.50% in the case of base rate loans or 1.25% or 1.50% for Term SOFR advances (in each case based on a measure of availability under the ABL Credit Agreement). The amendment also allows for modification of specified fees dependent upon achieving certain sustainability targets, in addition to making other modifications to the ABL Credit Agreement. Including outstanding letters of credit, our remaining availability under the ABL Revolver as of March 31, 2025 was $246.0 million.

Previous wording

The ABL Revolver also provides incremental revolving credit facility commitments of up to $50.0 million. The terms and conditions of any incremental revolving credit facility commitments must be no more favorable than the terms of the ABL Revolver. The ABL Revolver also allows for the issuance of letters of credit of up to $100.0 million in aggregate and borrowing of swingline loans of up to $25.0 million in aggregate.

Current wording

The ABL Revolver provides incremental revolving credit facility commitments of up to $50.0 million. The terms and conditions of any incremental revolving credit facility commitments must be no more favorable than the terms of the ABL Revolver. The ABL Revolver also allows for the issuance of letters of credit of up to $100.0 million in aggregate and borrowing of swingline loans of up to $25.0 million in aggregate.

Previous wording

As of September 30, 2024, we had three active interest rate swaps with maturity dates of December 31, 2025 and two forward interest rate swaps with maturity dates of December 14, 2028. When combined, these five swaps serve to hedge $400.0 million of the variable cash flows on our Term Loan through December 14, 2028. For further information about our interest rate swaps, see Note 11, Derivatives and Hedging Activities. The assets associated with the interest rate swaps are included in current assets and other non-current assets on the Consolidated Balance Sheets at their fair value amounts as described in Note 9, Fair Value Measurements.

Current wording

As of March 31, 2025, we had three active interest rate swaps with maturity dates of December 31, 2025 and two forward interest rate swaps with maturity dates of December 14, 2028. When combined, these five swaps serve to hedge $400.0 million of the variable cash flows on our Term Loan through December 14, 2028. For further information about our interest rate swaps, see Part I, Item 1. Financial Statements, Note 11, Derivatives and Hedging Activities. The assets associated with the interest rate swaps are included in current assets and other non-current assets on the Consolidated Balance Sheets at their fair value amounts as described in Note 9, Fair Value Measurements.

Previous wording

Total outstanding loan balances relating to our Master Loan and Equipment Agreements were $79.7 million as of September 30, 2024 and $83.0 million as of December 31, 2023, respectively. Depreciation of assets held under these agreements is included within cost of sales on the Condensed Consolidated Statements of Operations and Comprehensive Income.

Current wording

Total outstanding loan balances relating to our Master Loan and Equipment Agreements were $80.9 million as of March 31, 2025 and $82.3 million as of December 31, 2024. Depreciation of assets held under these agreements is included within cost of sales on the Condensed Consolidated Statements of Operations and Comprehensive Income included herein.

Previous wording

We have $62.9 million included in our insurance letters of credit in the above table that are unsecured and therefore do not reduce total liquidity.

Current wording

We have $65.3 million included in our insurance letters of credit in the above table that are unsecured and therefore do not reduce total liquidity.

Previous wording

Management’s discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of our consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. Certain accounting policies involve judgments and uncertainties to such an extent that there is a reasonable likelihood that materially different amounts could have been reported using different assumptions or under different conditions. We evaluate our estimates and assumptions on a regular basis. We base our estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of our assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates and assumptions used in preparation of our consolidated financial statements. There have been no significant changes to our critical accounting policies and estimates during the nine months ended September 30, 2024 from those disclosed in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of our 2023 Form 10-K.

Current wording

Management’s discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of our consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. Certain accounting policies involve judgments and uncertainties to such an extent that there is a reasonable likelihood that materially different amounts could have been reported using different assumptions or under different conditions. We evaluate our estimates and assumptions on a regular basis. We base our estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of our assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates and assumptions used in preparation of our consolidated financial statements. There have been no significant changes to our critical accounting policies and estimates during the three months ended March 31, 2025 from those disclosed in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of our 2024 Form 10-K.

Previous wording

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws, including with respect to the housing market and the commercial market, our operations, economic and industry conditions, our financial and business model, payments of dividends, the demand for our services and product offerings, trends in the commercial business, expansion of our national footprint and diversification, our ability to grow and strengthen our market position, our ability to pursue and integrate value-enhancing acquisitions, our ability to improve sales and profitability, our efforts to navigate the material pricing environment, our ability to increase selling prices, our material and labor costs, supply chain and material constraints and expectations for demand for our services and our earnings in 2024 and 2025. Forward-looking statements may generally be identified by the use of words such as “anticipate,” “believe,” “estimate,” “project,” “predict,” “possible,” “forecast,” “may,” “could,” “would,” “should,” “expect,” “intends,” “plan,” and “will” or, in each case, their negative, or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Any forward-looking statements that we make herein and in any future reports and statements are not guarantees of future performance, and actual results may differ materially from those expressed in or suggested by such forward-looking statements as a result of various factors, including, without limitation the general economic and industry conditions; increases in mortgage interest rates and rising home prices; inflation and interest rates; the material price and supply environment; the timing of increases in our selling prices; the risk that the Company may reduce, suspend or eliminate dividend payments in the future; and the factors discussed in the “Risk Factors” section of our 2023 Form 10-K, as the same may be updated from time to time in our subsequent filings with the SEC. In addition, any future declaration of dividends will be subject to the final determination of our Board of Directors. Any forward-looking statement made by the Company in this report speaks only as of the date hereof. New risks and uncertainties arise from time to time and it is impossible for the Company to predict these events or how they may affect it. The Company has no obligation, and does not intend, to update any forward-looking statements after the date hereof, except as required by federal securities laws.

Current wording

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws, including with respect to the housing market and the commercial market, our operations, economic and industry conditions, our financial and business model, payment of dividends, the demand for our services and product offerings, trends in the commercial business, expansion of our national footprint and diversification, our ability to grow and strengthen our market position, our ability to pursue and integrate value-enhancing acquisitions, our ability to improve sales and profitability, our efforts to navigate the material pricing environment, our ability to increase selling prices, our material and labor costs, supply chain and material constraints and expectations for demand for our services and our earnings in 2025. Forward-looking statements may generally be identified by the use of words such as “anticipate,” “believe,” “estimate,” “project,” “predict,” “possible,” “forecast,” “may,” “could,” “would,” “should,” “expect,” “intends,” “plan,” and “will” or, in each case, their negative, or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Any forward-looking statements that we make herein and in any future reports and statements are not guarantees of future performance, and actual results may differ materially from those expressed in or suggested by such forward-looking statements as a result of various factors, including, without limitation the general economic and industry conditions; increases in mortgage interest rates and rising home prices; inflation and interest rates; the material price and supply environment; increased tariffs; the timing of increases in our selling prices; the risk that the Company may reduce, suspend or eliminate dividend payments in the future; and the factors discussed in the “Risk Factors” section of our 2024 Form 10-K, as the same may be updated from time to time in our subsequent filings with the SEC. In addition, any future declaration of dividends will be subject to the final determination of our Board of Directors. Any forward-looking statement made by the Company in this report speaks only as of the date hereof. New risks and uncertainties arise from time to time and it is impossible for the Company to predict these events or how they may affect it. The Company has no obligation, and does not intend, to update any forward-looking statements after the date hereof, except as required by federal securities laws.