Installed Building Products, Inc. (IBP) Q1 2016 Earnings Report, Transcript and Summary

Thank you for standing by. This is the conference operator. Welcome to the Installed Building Products First Quarter 2015 Earnings Conference Call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. [Operator Instructions] I would now like to turn the conference over to Jason Niswonger, Senior Vice President, Finance and Investor Relations. Please go ahead.

Good morning, and welcome to Installed Building Products’ first quarter 2016 earnings conference call. Earlier today we issued a press release on our financial results for the first quarter, which can be found in the Investor Relations section on our website. On today's call, management’s prepared remarks and answers to your questions may contain forward-looking statements within the meaning of the Federal Securities Laws. These forward-looking statements include the demand for our services, expansion of our national footprint, our ability to capitalize on the new home construction recovery, our ability to strengthen our market position, our ability to pursue value-enhancing acquisition, our ability to improve profitability and expectations for demand for our services for the remainder of 2016. Forward-looking statements may generally be identified by the use of words such as anticipate, believe, expect, intend, 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 made by management during this call is not a guarantee of future performance, and actual results may differ materially from those expressed in or suggested by the forward-looking statements as a result of various factors, including without limitation, the factors discussed in the Risk Factors section of the Company's Annual Report on Form 10-K for the year ended December 31, 2015 as the same maybe updated from time to time in subsequent filings with the Securities and Exchange Commission. Any forward-looking statement made by management on this call speaks only as of the date hereof. New risks and uncertainties come up from time to time, and it is impossible for the Company to predict these events or their effects. 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. In addition, management uses certain non-GAAP performance measures on this call, such as adjusted EBITDA, and adjusted net income from continuing operations. A reconciliation of such measures to their nearest GAAP equivalent is contained in the Company's earnings release, which is available on our website. This morning's conference call is hosted by Jeff Edwards, our Chairman and Chief Executive Officer; and Michael Miller, our Chief Financial Officer. I will now turn the call over to Jeff.

Thanks, Jason, and good morning to everyone joining us for today's call. I’m happy to have the opportunity to talk to all of you today about our first quarter results. As usual, I will start today's call with some highlights and then turn the call over to Michael Miller, IBP's CFO, who will discuss our results in more detail before we take your questions. As a number of you probably know, many companies operate in our space are off to an impressive start to the year and the housing market recovery continues to improve, especially in the single-family area. In addition, relatively mild winter weather in a few of our regions helped drive strong performance, all of which resulted in what I believe was a really fantastic quarter. We are outperforming the market in large part due to the hard work and experience of our entire team. I’d like to thank them for their contributions to our outstanding first quarter and performance in what is typically our seasonally slowest quarter. Now for the details. First quarter total revenues increased nearly 48% to $192 million, driven by strong organic growth, the contribution of our recent acquisitions and improvements in the rate of housing completions. Similar to last year’s first quarter, we experienced accelerated growth as year-over-year revenue and EBITDA exceeded the growth rates we experienced in the fourth quarter of 2015. The higher revenues we experienced in the first quarter combined with controlled spending and a more favorable mix of installation services helped improve our first quarter profitability with a 155% increase in adjusted EBITDA, a 254% increase in operating income and a 320% increase in adjusted earnings per share. In addition, we generated $19.8 million of operating cash flow during the three-month period ended March 31, 2016, further demonstrating the strength of our business model. As the housing recovery progresses, we plan to continue investing our operating cash flow in the business to support our growth initiatives and acquisition strategy. As we have stated in the past, the first quarter is seasonally our slowest quarter as a result of construction schedules and the type of insulation services we typically install of our homebuilding customers. During 2015, total housing starts outpaced single-family completions by a meaningful margin. During the first quarter of 2016 however, favorable weather and an improvement in residential completions narrowed this gap as the housing market experienced strong single-family completion growth of 16.7% compared to first quarter of 2015. While the weather improvements in housing backlog contributed to our first quarter results, the outsize performance we experienced was also certainly a result of our strong team’s effort in superior execution. As a result of our strong first quarter revenues and the improvement in residential completions, we anticipate that our 2015 revenues and profitability will be somewhat more evenly spread across the year compared to the seasonality we typically experience. Nevertheless, I’m extremely encouraged by our first quarter results and expect 2016 to be a very good year, as U.S. single-family starts increase 22.2% in the first quarter, a strong indicator demand for our core new single-family end market. Turning our acquisition strategy. Acquisitions continue to enhance our financial performance. In the first quarter, we completed three deals which included Key Green Builder Services d/b/a Key Insulation which enhances the Company’s presence in the Austin and San Antonia, Texas markets with 2015 revenues of approximately $11.8 million. Marshall Insulation based in Phoenix, Arizona with 2015 revenues of approximately $4 million, and Kern Door Company based in Bakersfield, California, with 2015 revenues of approximately $4.5 million. Additionally, in April of 2016 we acquired Alpine Insulation based in Sheboygan, Wisconsin with five operating locations throughout the state and approximately $24 million in revenues for 2015. Year-to-date these four acquisitions represent a total of $44.2 million of annualized revenues. We continued to deliver on our acquisition strategy and remain confident in our ability to identify candidates, successfully integrate newly acquired companies and immediately achieve operating synergies through our scale and national buying power. Our pipeline of potential deals over the next 12 months is robust and we anticipate 2016 will be another strong year of acquisition growth. Our business continues to benefit from the recovery housing industry which we believe has significant runway for ongoing improvement. According to the U.S. Census Bureau’s historical data in the April 2016 Blue Chip consensus forecast for housing starts, total U.S. housing starts are forecasted to increase at a 10% compounded annual growth rate from 2015 through 2017. During the 2016 first quarter, total U.S. housing starts increased 14.5% and single-family starts increased 22.2%. We continue to expect residential end markets to benefit from various factors including improving employment, rising household formations and historically low mortgage interest rates. Our core single-family same branch sales grew nearly 28% in the first quarter of 2016, significantly outpacing the market growth of U.S. single-family completions of approximately 17%. We have outperformed the market in each quarter as a public company which speaks to our customer loyalty, which is driven by our execution and leading market position in some of the strongest U.S. housing markets. We also continue to benefit from our national scale longstanding diversified supplier relationships and a broad customer base that includes production and custom homebuilders, multi-family and commercial contractors and homeowners. In closing, I’m very pleased with our strong start and we are extremely excited about our business prospects for the remainder of 2016. Michael, I’d like to now turn the call over to you to provide more details on our first quarter results.

Thank you, Jeff, and good morning everyone. We continue to make considerable progress, growing revenue and improving profitability. For the first quarter, our revenue increased 47.5% to $191.7 million. Our same branch sales improved 26.1% due to an increase in volume in all of our end markets and favorable improvements in price and mix. Our same branch single-family sales growth of 27.8% exceeded that the 16.7% increase in single-family U.S. housing completions during the first quarter. This outperformance was a result of the dedication and commitment of quality installation services of our local branches. First quarter 2016 gross margin increased 220 basis points to 28.5% compared to 26.3% in the prior year quarter. This improvement was primarily due to operating efficiencies and a more favorable customer and product mix than the prior year quarter. For the 2016 first quarter, selling and administrative expenses as a percentage of net revenue was 21.2% compared to 23.1% for the 2015 period. As a percentage of revenues, administrative expenses declined to 15.8% in the first quarter from 17.1% in the first quarter of 2015. We continue to expect general and administrative expense as a percent of net revenue to continue to improve over time as we further scale our operations and benefit from higher sales. As we have stated in previous earnings calls, it is important to note that as our acquisition strategy continues and as the volume of total acquired business operations become larger, we will incur additional non-cash amortization expense. In the first quarter, we recorded $2.5 million of amortization expense, a 214% increase over the prior year period, and a 14.1% increase over the 2015 fourth quarter expense. This non-cash adjustment impacts net income, which is why we believe, adjusted EBITDA is the most useful measure of profitability. Based on our acquisitions completed to-date, we expect second quarter 2016 amortization expense of approximately $2.9 million and full year amortization expense of approximately $11.2 million. These amounts will change with each subsequent acquisition. For the first quarter of 2016, adjusted EBITDA improved to $19.3 million, representing an increase of 154.8% from $7.6 million in the prior year. As a percent of net revenue, our adjusted EBITDA improved to 10.1% in the first quarter, representing an increase of 430 basis points from 5.8% in the prior year quarter. We are pleased with the successful steps we have taken to enhance our operating efficiencies and significantly increase our adjusted EBITDA margin. We continue to believe our financial model can produce full-year incremental EBITDA margin of 20% to 25%. As we have stated in our previous call, the mix of organic and acquired revenue impacts our combined incremental EBITDA margin and a higher contribution of revenue from acquisitions can temporarily reduce our overall incremental margins. This happened again in the first quarter with our continued success in completing acquisitions. As a result, our combined incremental EBITDA margin was approximately 19% for the first quarter. This trend may continue in 2016 depending upon the size and frequency of acquisitions we complete during the year. To help demonstrate the impact the acquisitions have on our incremental EBITDA margin, this morning's earnings release included a table depicting quarterly same branch and acquired incremental revenues and EBITDA margins. In the first quarter of 2016, same branch revenues had a 25.4% incremental EBITDA margin, and acquired revenues had 11.2% contribution margin. We believe our same branch sales growth in excess of total market completions combined with the strong EBITDA contribution from our acquisitions, will allow us to readily achieved mid-teen EBITDA margins as the single-family housing market approaches stabilization. For the first quarter, our adjusted net income improved to $6.6 million or $0.21 per diluted share compared to $1.4 million or $0.05 per diluted share in the prior year quarter. On a GAAP basis, our first quarter net income was $5.8 million or $0.19 per diluted share compared to net income of $1.2 million or $0.04 per diluted share in the prior year quarter. For the first quarter of 2016, our effective tax rate was 34.8% compared to 45.2% in the prior-year quarter. While we typically experienced a higher effective tax rate during the first half of the year due to the tax valuations related to losses in certain business entities, for the first quarter of 2016 our tax rate was favorably impacted by higher profitability in the quarter compared to last year. For the full-year, we expect an effective tax rate of 36% to 37%. Now moving onto our balance sheet and cash flow. At March 31, 2016, we generated $19.8 million in cash flow from operations, an increase of $13.8 million or 231% from the prior year. We continue to use this cash flow to fund acquisitions and reinvest in our business. Capital expenditures at March 31, 2016, were $6.5 million while total incurred capital leases were $1.2 million. As expected, capital expenditures and incurred capital leases increased consistently with the year-over-year increase in our revenue. We continue to expect gross capital expenditures and the incurred capital leases to trend at approximately 4% of sales during this part of the housing cycle. At March 31, 2016, we had total cash of $11.7 million compared to $6.8 million at December 31, 2015. On March 31, 2016, we announced a new five-year $325 million senior secured credit facility with an Accordion feature that allows us to increase borrowing capacity to $400 million subject to certain approvals. We currently have nothing drawn on our $100 million revolver, and $125 million capacity under our delayed draw term loan, providing us considerable flexibility as we continue to deliver on our growth strategy. With that, I will now turn the call back to Jeff for closing remarks.

Thanks Michael. Well, I think that pretty well sums up the numbers and drivers of what was a fantastic quarter. And as you can see our growth-oriented business strategy continues to drive strong financial results. With the housing industry continue to demonstrate improving trends, we are excited about our opportunities for 2016 and beyond. Operator, lets now open up the call for questions.

Thank you. We will now begin the question-and-answer session. [Operator Instructions] We will pause for a moment as callers join the queue. Thank you. Our first question comes from Susan Maklari from UBS. Please go ahead.

Good morning.

Good morning, Susan.

I'm wondering - you definitely comment on the benefit that you got from the mild weather in the quarter. Can you give us any sense of how much of the delays were builders able to get through, and do you think that there is actually some more to come as we go through the rest of the year?

Susan, this is Michael. Yes, I mean, honestly definitely the mild winter helped to some extent, but if you look at the performance that we had across all of the U.S. Census Bureau regions, on a pro forma basis, so accounting for acquisitions, all of our regions had 20%-plus growth in those markets or in those regions, and we saw even higher growth in that market that are not typically impacted by weather. So we feel very good about the direction of the business and performance of even non, sort of, weather-impacted areas of the country. As it relates to the catch-up in completions from ‘15, there is no doubt that completions were at a higher rate than they have been recently, but at the same time as you know, starts have increased in the first quarter - single-family starts at 22.2% rate, which is a great indicator of future demand for our services. So yes, there was good completions growth in the quarter, we feel as if there seems to be very good strength right now in the broader single family market.

Okay, thank you. And then as you do look at this activity and in sort of what sounds to me like an increased level of perhaps production going on, how does that - or does that at all, change your thoughts around getting to that mid-teen EBITDA margin any earlier than you had initially thought?

Honestly, Susan, we've made such good progress, given at this point where we are in the cycle. Completions on a single-family basis are still less than 700,000 and we believe that a stable single-family housing market is more in that 1/1/2 maybe range from a single-family perspective. So we still have a long way to go before we get to stabilization but we’ve made very considerable progress getting towards that mid-teens EBITDA margin. So we feel as confident as ever of our ability to get there and the acquisitions as they come in, help us get there faster. So we feel very good about our ability to get there at a faster rate than what we would have expected even a year ago given our improved performance.

All right. Thank you very much.

Sure.

The next question comes from Nishu Sood from Deutsche Bank. Please go ahead.

Thanks. Yes, just kind of following up on the question about the first quarter and the impacts. Very, very strong results. Jeff, you mentioned that sales might be more leveled now in ‘16 as a result. Now there is two potential things to consider there. To the extent that there was some catch-up on delivery delays by the builders, you could have had some extra - that catch-up could have boosted 1Q without any subsequent effect on 2Q, but obviously a stronger 1Q would then make the year look flatter, or to the extent that weather pulled forward sales from 2Q that would then depress 2Q a little bit on a relative basis - and against the normal seasonal uptick and make it look a little bit flatter. Which of those two effects are you trying to draw our attention to? Is it the catch-up basis or is it the weather pull-forward basis?

Well, it was the way - I guess, the formal language you explained it more or less I think.

So we don’t see all of these. This is Michael. We definitely don’t feel like we took volumes in the second quarter of ‘16. It was more pent up demand, if you will, from ‘15 that we had talked about and the whole industry has talked about this lag from starts to completion that had been created, and we don’t believe we’ve even worked through all of that. We just work through some of that in the first quarter. So as we’re going into the rest of ‘16, we believe we continue to see good opportunity in terms of single-family growth, which is indicative in the 22.2% increase in single-family starts in the quarter, and what we’re seeing in our business - and there still is a lag, if you will, or a pent up demand coming from ‘15 that still hasn’t been addressed. So we feel very good about the business going into the rest of the year. But no doubt, it was a very good first quarter and it was not as historically weak as a first quarter would be.

And I think that was really the point. I mean, if you look back at the history that you have available to you and clearly it was a great first quarter and it won't necessarily remain in what is an historical position in terms of the overall annual and yearly performance. One of the things I think that we as a company are particularly, and we are particularly pleased with was - and we’ve said this a number of times that we didn't believe that we would be impediment, we as an installer of our products, to catch-up like this. And so we are particularly proud really of the team, and I'd like to say that again to be able to kind of outperform even what was now an outsize kind of bit of catch-up experience.

Again, we believe there still is more catch-up from ‘15 and we are encouraged for what we are seeing in ‘16, particularly at the regional and local builder level. We are seeing very, very good strength in the regional and local builder, which as you know, is very favorable for us as a company from an overall price mix standpoint.

Right. That is very helpful. Another really strong aspect of your performance today was the incremental margins, and it's very helpful to break out that - the new break out that you're giving on incremental on the organic business versus the acquisitions. In the past few years, there was some misunderstanding as people got to know the flow of your financials where incremental EBITDA margins were lower in the first quarter, and so the bulk of the incremental margin gains if you looked at it from your perspective tended to happen in the second and third quarter as opposed to the first quarter. Now this first quarter, you had a tremendous incremental adjusted EBITDA margin, even if you take into - especially if you take into account that acquisition effect. So just wanted to dig into that a little bit. Have we reached the stage now where incrementals will look more smooth across the year and there will be step-changes kind of more evenly spread out throughout the year, or was this a function of that very strong revenue performance? Maybe it was a function of this very favorable price mix that you just mentioned. So just wanted to understand what drove the step-change this year versus last year?

That's a great question. There really is a combination of the things that you said. We still feel very comfortable talking about full year incremental same branch EBITDA margins of 20% to 25%. There definitely have been positive factors in this first quarter, price mix definitely being one of them. Obviously higher volumes than what we would normally see in a Q1 helped as well. But we feel that the - I guess what we're trying to convey is that this year because of the positives we are seeing from the cyclical recovery in the single-family housing market, the opportunity that wasn’t addressed in ‘15 that we believe is going to get addressed in ‘16 is going to create a situation where you have some things that have historically on a seasonal basis that you may not see as much of this year. So we feel very good going into the second and third quarter of our historically high quarters and feel that the market is there, and that - again, there is still pent up demand that’s left over from ‘15 is still an opportunity for us to address, as well as again the strength of the market. We believe the market is staying on the single-family side.

Got it. And just one clarification on something you just said. You mentioned that the small and medium-sized builders are - you saw a particular strength from them. That isn't showing up in the larger - I’m sorry, the leading volume indicator. The public builder market share has been pretty stable. So does that tell us then that the delays affected the small and medium-sized builders to a greater extent and that's why we saw the catch-up there, just wanted to get a little clarification there?

I'm not sure if I can specifically say that, because I think it would be very market-specific in terms of within that market if it was who saw more catch-up. I think one could argue that the national builders, production builders have more resources, and as a consequence, probably have a better ability to work through their backlogs than some of the local and regional guys. But I would say as a company, one of the things that we believe we excel at is servicing that local and regional guy, so that he can meet his production schedules, and as a consequence, I think we've seen very, very strong growth within that customer base because we've been able to service them very well. This is ultimately about serving the customer and providing them a very good install solution.

Got it. Great. Thanks for the color.

Sure.

The next question comes from Bob Wetenhall from RBC. Please go ahead.

Hi, good morning.

Good morning, Bob.

Just wanted to ask, you got 12% price mix improvement which is a pretty heroic number, and I just wanted to get your kind of a better understanding of what's going on in the pricing trends. Obviously you've got the demand side of the equation [indiscernible] and it sounds like demand is - catch-up demand that end up in ‘15 is spilling over this year, putting you guys in a very firm ground to start the year with lots of positive momentum. And with that said, I’m just trying to understand how we should be thinking about price going forward?

Bob, hi. It’s Jeff. We’re busy. And so when we’re busy, we’ve I think done a pretty good job and our managers do a great job of selecting what work we perform and for whom. And so it gives us an opportunity when we’re this busy to kind of really - we’ve said this before, but to kind of sculpt our customer base to a degree or at least sculpt the jobs that we do. And when we’re given that opportunity, obviously we’re going to drive for more profitable jobs and that’s really what you’re seeing and to the extent that you stay busy as it appears that it’s going to be based on all the figures that we’re all looking at. It’s a great opportunity for us and a great environment for us to keep doing what we’re doing really.

Feel like contextually this is like the 12% boost you got at something you retain going forward during the balance of the year. There is no like get back and this has nothing to do with timing. This is just purely real price because supply/demand is a tailwind in your favor.

Yes, Bob, this is Michael. It's not just price. Price is part of it, but it is - and it's been - a very important component of this is job mix. So its customers, it's again the strength that we are seeing in that local and regional builder. It's good strong solid straight home growth that we are seeing, so it's really a lot of things. It's not necessarily us increasing prices to our customers as much that as exactly what Jeff said is us working consistently with the right customers that are in the right subdivisions that are willing to pay us a fair price for our quality service.

Cool. That’s what the piece I going to get. Thank you for the clarification. Any color on the M&A pipeline, what you are seeing, how valuations are and what you are thinking see now and year end in terms of what’s on the table?

We continue, as I said, obviously earlier in the call, to feel that we’ve got a robust pipeline ahead of us and we’ve already done four deals year-to-date, and we feel good about our prospects for the rest of year. I don’t know that the environment still is really any different than we have felt kind of it had feeling up over the last 24 months or so continue to be excited by those prospects also.

And Bob, as you know, we've put in place the new credit facility that gives us substantial capacity to get deals done and have quite a bit of liquidity available to us.

Got it. So you got the firepower. And just final question, where you are year-to-date versus your plan? Would you say this was, how things turned out in the first quarter and what you’re seeing quarter-to-date in line with your expectations or better? I’m just trying to understand and gauge. Are you just optimistic or have results, demand and pricing now come out ahead. Thanks and good luck for next quarter.

Thanks. We were very encouraged by the results in the first quarter. I would say that as a company, we do have very good job of forecasting, so we weren’t surprise but we were pleased with the results in the first quarter.

And I guess I would add, as a company, we are not adverse to the idea or afraid of the idea of setting the bar high at least internally.

The next question comes from Scott Rednor from Zelman & Associates. Please go ahead.

Hi, good morning, Jeff and Michael. Congrats on a nice quarter.

Thanks Scott.

I want to ask back to the forecasting question. Last year you provided guidance at this time that first quarter represents about 20% to 21% of full year revenue, and about 10% to 11% of your annual EBITDA, and you finished right in line with that in 1Q ‘15 in terms of where you projected for the year. So trying to get some more quantification around, I guess, that 1Q will be a bigger impact this year. How should we think about that as relative to the total year?

Well, as you know, we don't provide guidance. And, I guess, if we gave you sort of a range of percentage, we probably end up giving you guidance, right. What I - maybe how I'll answer that question is to say that as a percentage of full-year revenue, we would not have expected the first quarter - it will definitely be - we would expect to see continued improvement in the second and third, fourth quarter, relative to overall revenue. And from adjusted EBITDA perspective, we still think we'll see a typical or we’ll see some seasonality in adjusted EBITDA. It just won't be as dramatic as it was in say, 2015, which as you know, we generate more than 60% of our adjusted EBITDA in the second half of the year in 2015 keeping in mind that the acquisition impact as well and the pace of the acquisition impact as well, the adjusted EBITDA contribution on a full-year basis.

So I guess - yes.

Go ahead.

If you might finish, that would be great.

I was just going to say, I mean, I don't mean to give you a non-answer. But as you know, we’ve chosen not to provide guidance but we did want to give some level of context of the quarter in relation to a typical seasonal year. And as we said earlier, we believe this year is really setting up to be quite interesting, given the fact that we still have ‘15 backlog that we're working on and the ‘16 single-family sales growth seems to be very solid. So it's just there is a confluence of events that we think are making ‘16 really an exceptional here.

Normally all the pieces are in place for us to have a really good year.

Yes.

And so just within that hopefully you could clarify this to some degree, is with Alpine now announced, what are your acquired margins and backlog in essence for 2Q?

I would expect there is going to be a significant difference in the changed of that. This is Jason by the way. I wouldn’t expect to see a significant change in the contribution from acquired sales from what we saw in the first quarter or on an LTM basis.

Yes, I think more - we will look at it more - and one of the new disclosure that we did, we debated whether or not we should just present that on an LTM basis versus a quarterly basis, because it really is much more meaningful we believe on an LTM basis. So to Jason's point, if you look at the acquired EBITDA margin contribution on an LTM basis, it’s over 15% versus what it was in the first quarter. So if we think of that on an LTM basis with the contribution of outlined, we wouldn't expect a material change on an LTM basis for the acquired EBITDA margins.

So you should - so just to phrase that differently, you should see a pickup from the 11% in 1Q because you will have a bigger pipeline also out there, or yes, the big acquisition that in April coming through?

There is seasonality associated with it and then there is again looking at it on an LTM basis, and that's probably the best way to look at it. And again, that EBITDA margin contribution was at 15 or over 15 and we would expect that Alpine is not going to materially impact that number.

Okay. Thank you.

Yes.

The next question comes from Keith Hughes from SunTrust. Please go ahead.

Thank you. Going back to the price mix discussion, particularly on the mix, as we move through the rest of the year, our force is going to come in place that we would see the mixed contribution still be up year-over-year but not quite as much as in the first quarter.

The trends that we saw in the first quarter continued through April, and the delta relative to - the delta from a mix perspective, that is going to more spread from going to more local and regional builders. While we've seen great growth within the national builder business, that delta continues to expand in terms of the growth rates of both of those customer basis. So obviously we can't predict the future, but the can current trends continue to support favorable price mix.

But I don't think - this is Jeff. There is no fundamental change which was kind of the way I guess you asked that question. I don't think we see fundamentally anything happening in the market, or in the industry, that would make us feel differently about kind of the opportunities we have in front of us and the market condition.

I guess, the second part to that question would be, you’re in a very good environment here over the last six months and then we get periods of times, I know the builders are much more focused on getting the work done than particularly pricing, and that could change as you move into the season because they are beginning that effect of cost. Again the numbers still be up strong year-over-year, but maybe not quite as strong as in the first quarter.

Anything as we get into the season and things get busier and we start working through the backlog, if you will, that's been created from 22.2% increase in single-family starts and I think which has been a growth spring selling season for that whole market. I know there have been some builders that have disclosed a little bit of disappointing number there that I think has been unique to those builders. But we’ve seen that demand increasing and that provides us a good opportunity, going back to what Jeff said, to continue to sculpt our customer base to make sure we're getting the fair price for our quality in place [ph].

Final question on this topic. Is it fair to say that mix was a much bigger driver of this number than price?

This is Jason. I think that’s fair to say. And it’s challenging because as we’ve said before no one house is identical. So when we look over as year-over-year it changes in the type of house we’re doing, the type of customer we’re doing that work for, There is a number of sort of factors that get sort of lumped into this price, and that plays much of a part in this price increase.

Okay. Great. Excellent results guys. Thank you.

Thank you.

The next question comes from Ken Zener from KeyBanc. Please go ahead.

Good morning, gentlemen.

Good morning, Ken.

So one of the large installation producers results indicated that there was rising pressure, I think, from some installers indicating the builders might be pushing back a lot on pricing and they were looking for some leverage to enhance their EBIT, the cost position. Your results today, and specifically the price mix which would be nice if you guys really could break that down in terms of the [indiscernible], the net pricing square footage that type of thing, if you would do that obviously. It seems as though you’re operating in a whole different environment from what the manufacturer seem to indicate is occurring in the market. Could you perhaps tie off those to your results and perhaps what they are seeing? I mean, you must be crossing some of those issues out there. But the price competitiveness from - or it is simply your homebuilders that you’re choosing to service and your regional focus just so different do you think?

At this point in the cycle and in this point in the market and the quality execution that our team is doing at the local level is absolutely critical. We are again making sure that we’re working with the right customers that are willing to pay us a fair price in this environment for the quality of our services. And we continue to believe that that is absolutely the critical focus of our teams. And there - as Jeff said several times, they are just - they are doing a great job and we couldn’t be more proud of the job that they are doing every single day at the local level from the installer to the branch manager. They are doing what they should be doing and that’s reflected in the price mix that we get.

It’s very impressive. All right. Thank you very much.

All right.

[Operator Instructions] Our next question comes from Matt McCall from BB&T Capital Markets. Please go ahead.

Thanks. Good morning, guys.

Good morning.

So is the 12% price mix, I mean, you gave for the company overall. Is that a good number to use for the single-family business specifically?

It’s Jason. I’m not sure I would apply that specifically to the single-family only because the mix of the other work we do, multi-family, et cetera, will have an impact on that mixed component.

Was it much greater, little less? I mean, I’m just trying to get an idea of the volume number for single-family.

It’s somewhat similar if you look at it on an overall basis, but I would say that within our end markets, we saw the highest growth in multi-family and commercial. So we saw a very good growth across all of our end markets, and honestly, all of our end products, while on average - I mean, we do so many jobs, right, that on average you can equate the volume price mix to the different end market. But to Jason’s point, there is not an absolute direct correlation.

Okay. Well, I guess so far if I assume maybe the volume is a little bit below the completions rate. The completions growth in the quarter I think was 16%. That’s below starts, and your organic volume is a little bit below that. I guess, the question is, you keep talking about catch-up. I’m trying to figure out where the catch-up is because completions still are trailing starts and maybe your volume is a little bit below completions. I’m just trying to understand where that catch-up is showing up?

We did see catch-up in the single-family end market. And we talked about the mix between the multi-family commercial compared to single-family, we still have double-digit growth in the completion and single-family jobs year-over-year.

But as long as completions trailing starts, I mean, is it - I’m trying to figure out how the catch-up is going to be eliminator of the opportunity - the catch-up is going to be eliminated when starts continue to outpace completions on a growth rate basis. That’s kind of where I’m going with it.

Yes, I don’t - I mean, we would say that completions don’t actually catch-up to starts until we reach stabilization. So this opportunity to continue to work on say that backlog that’s been created or that pent up demand as well has a lot of legs to it, just given the rate of forecasted rates and what the absolute Census Bureau has reported from the starts growth perspective. So it goes back to what Jeff said in his comments that we feel very good about what ‘16 is being set up for relative to that delta between starts and completions and what the starts growth indicates for future demand in ‘16.

Okay. Thank you guys.

Sure.

The next question comes from Trey Grooms from Stephens Incorporated. Please go ahead.

Yes, good morning, guys. This is Drew Lipke on for Trey. Congrats on a great quarter.

Thank you.

Lot of my questions have been asked, but not the beat the dead horse, but would you completely rule out possibility of 1Q representing that 10% to 11% of full-year EBITDA. I mean, is there any reason to believe, I guess, that if you work through the pent up demand that we’ve been talking about and if starts continue to remain strong, you’re working through the backlog, renovating the buildings, what I guess - do we need to be mindful of that could keep that historical seasonality from taking place from such a strong market backdrop?

Well, I mean, using the historical context of 10% to 11% and $19 million would imply $190 million of EBITDA for the full year, and that is a good aspirational number, but we believe that we definitely have a lot of things go right in the first quarter, but things that what will ultimately determine, as I said based on Scott’s question, what will ultimately determine the percentage of EBITDA that the first quarter represents for the full year is not only going to be the organic same branch business but it’s also going to be the pace and level and timing of acquisitions. So there is still a lot of things that happen over the course of the next three quarters that will impact where that percentage lines up. So we think it’s appropriate to look at it in the context of the year that this year may not have a typical seasonality because of the positive cyclicality thing, or cyclical things that are happening, and look at it more in that context than the typical seasonality we would see in the business.

And this doesn’t mean it won't be seasonal or continue to be a seasonal business for us this year, because it will be. But there were two primary, I guess, drivers or enablers in the first quarter that will influence that somewhat. One being weather in a couple of our regions and the second being the cleaning up of the backlog.

I agree.

But we still wouldn’t expect it to be smooth in terms of - we would still expect - so we’re still expecting there to be seasonality just not at the same extent that that seasonality exists in prior periods that you would have. So we definitely would expect to see continued improvement in both revenue and EBITDA as we go through the year.

Okay. And just last question for me. As these activity levels continues to accelerate to the degree that we’re now seeing, how quickly can you ramp your installer personnel, are you guys actively working to add labor today? What kind of constraints are you seeing there as these volumes tramp?

I think the key to that is it is very reflective in the numbers. We grew sales on a same branch basis 26% and at the same time increased profitability significantly. And I think that’s highly indicative of our ability to attract and retain good labor and maintain those expenses as an appropriate level. So the company that can size out to the degree that we have, I think is just indicative again of the continued performance, outperformance of our team in the field in getting the job done and getting it done very effectively.

We work on every day and not just in the field, we’re trying to do what we can from here at our corporate offices that aid in any way that we can and sourcing those good future workers too. So it’s something again like we work on it every day all day.

All right. Thanks guys. Best of luck for rest of the year.

Thank you.

Thank you.

This concludes the question-and-answer session. I would now like to turn the conference back over to Jeff Edwards.

Thank you for your questions, and I look forward to our next quarterly call. Thanks again.