FBM 1Q18 Earnings Presentation May 9, 2018 DISCLOSURES - PowerPoint PPT Presentation

FBM 1Q18 Earnings Presentation May 9, 2018

DISCLOSURES Forward-Looking Statements This presentation contains “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and may contain words such as “believe,” “anticipate,” “expect,” “estimate,” “intend,” “project,” “plan,” or words or phrases with similar meaning. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on current expectations, forecasts and assumptions that involve risks and uncertainties, including, but not limited to, economic, competitive, governmental and technological factors outside of our control, that may cause our business, strategy or actual results to differ materially from the forward-looking statements. We do not intend, and undertake no obligation, to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable law. Investors are referred to the Company’s filings with the Securities and Exchange Commission, including its Annual Reports on Form 10-K and its Quarterly Reports on Form 10-Q for additional information regarding the risks and uncertainties that may cause actual results to differ materially from those expressed in any forward-looking statement. Non-GAAP Financial Measures In addition to results under GAAP, this presentation contains certain non-GAAP financial measures, including adjusted net income (loss), adjusted earnings per share (“EPS”), EBITDA, adjusted EBITDA and adjusted EBITDA margin, which are provided as supplemental measures of financial performance. These measures are presented because they are important metrics used by management as one of the means by which it assesses financial performance. Adjusted net income (loss), adjusted EPS, EBITDA, adjusted EBITDA and adjusted EBITDA margin are also frequently used by analysts, investors and other interested parties to evaluate companies in our industry. These measures, when used in conjunction with related GAAP financial measures, provide investors with an additional financial analytical framework that may be useful in assessing our company and its results of operations. Adjusted net income (loss), adjusted EPS, EBITDA, adjusted EBITDA and adjusted EBITDA margin have certain limitations, which are discussed in greater detail in the Company’s filings with the Securities and Exchange Commission and its earnings releases, and should not be considered as an alternative to net income, reported EPS or any other measures of financial performance prepared in accordance with GAAP. Other companies, including other companies in our industry, may not use such measures or may calculate one or more of the measures differently than we do, limiting their usefulness as a comparative measure. A reconciliation of these non-GAAP measures to the most directly comparable GAAP measure is set forth in the appendix to this presentation. 2

Q1 2018 HIGHLIGHTS  Total net sales increased 11.9% YoY  Base business net sales increased 4.9% YoY  Wallboard base business decline of 1.0% YoY: wallboard pricing/mix DELIVERING up 3.0% YoY, partially offset by 4.0% lower volume SALES GROWTH  Suspended ceiling systems base business growth of 9.7%  Complementary and other products base business growth of 7.0%  Mechanical Insulation base business growth of 15.5%  Consolidated gross margin of 28.8% compared to 29.2% YoY  SBP gross margin of 29.0% compared to 29.3% YoY  MI gross margin of 27.5% compared to 28.7% YoY SUSTAINING  MARGINS SG&A as a percentage of net sales improved 100bps YoY  Net loss of $1.1M Adjusted EBITDA 1 of $35.0M; adjusted EBITDA margin 1 of 6.5%   Two acquisitions, adding seven SBP branches  Further expansion in Minnesota, Missouri and Nebraska BUILDING ON  Entered North Dakota and South Dakota markets M&A SUCCESS  Expected to contribute $27M to $29M to net sales for 2018  LEVERAGING Non-residential construction backlog solid into 2018  FAVORABLE R&R construction activity remains solid  MACRO Residential construction markets remain strong  U.S. economy continues to expand at moderate pace TAILWINDS 1 Adjusted EBITDA and adjusted EBITDA margin are non-GAAP measures. Adjusted EBITDA margin represents adjusted EBITDA divided by net sales. 3 For a reconciliation of net loss to adjusted EBITDA, see the Appendix.

LONG-TERM STRATEGIC PRIORITIES 1 PROFITABLY GROW MARKET SHARE   Increase market share by strengthening existing Grow complementary products net sales key supplier relationships  Grow wallboard market share  Increase suspended ceiling systems net sales 2 CONTINUE PLATFORM EXPANSION   Strong acquisition pipeline; significant availability Greenfield expansion opportunities in on ABL credit facility underserved adjacent markets  Scalable infrastructure facilitates efficient integration 3 DRIVE OPERATIONAL EFFICIENCIES   Leverage entrepreneurial and customer-centric Drive procurement savings that expand gross culture margins   Logistical tracking system and investment in Incremental margin improvement through electronic data interchange overhead cost reductions 4 CREATE LONG-TERM SHAREHOLDER VALUE   Proven operating model focused on local market Reduce debt leverage over the next couple of expertise years  Grow asset base through disciplined M&A 4

Q1 NET SALES PERFORMANCE 1Q18 Net Sales By Product Net Sales ($M) FBM Product Mix $536 +11.9% 13% 34% 23% $479 16% 14% 1Q17 1Q18 Wallboard Ceilings Metal Framing Complementary MI & Other  Total net sales growth of 11.9% YoY driven by strong base business growth of 4.9%  SBP net sales increased 10.8% YoY due to contributions from suspended ceilings systems and complementary and other products  MI net sales increased 19.1% due to continued strength in industrial markets 5

Q1 MARGINS SG&A Leverage 1 Adj. EBITDA Margin 2 Gross Margin 23.6% 29.2% 28.8% 22.6% 6.8% 6.5% 1Q17 1Q18 1Q17 1Q18 1Q17 1Q18 Adjusted EBITDA 2 ($M) SG&A ($M) Gross Profit ($M) $139.9 $154.4 $113.1 $121.4 $32.6 $35.0  Gross margin decreased 40bps YoY primarily due to a change in product mix with higher net sales contributions from suspended ceilings and mechanical insulation  SG&A leverage improved primarily due to lower non-recurring expenses; SG&A leverage excluding non-recurring expenses was 22.3% compared to 22.4% YoY 3 1 SG&A leverage is calculated as SG&A expense divided by net sales. 2 Adjusted EBITDA and adjusted EBITDA margin are non-GAAP measures. Adjusted EBITDA margin represents adjusted EBITDA divided by net sales. For a reconciliation of net income to adjusted EBITDA, see the Appendix. 3 Excludes non-recurring adjustments of $1.6 million and 6 $5.6 million, respectively

Q1 OVERVIEW SPECIALTY BUILDING PRODUCTS YoY Net Sales YoY Net Sales Mix ($M) +10.8% $464 40% 39% $418 26% 26% 1Q17 1Q18 19% 17% 17% 16% YoY Gross Profit & Margin ($M) $134 +9.8% $122 $160 100.0% 90.0% $140 80.0% $120 70.0% $100 Wallboard Suspended Metal Framing Complementary 60.0% $80 50.0% 29.3% 29.0% 40.0% Ceiling Systems & Other $60 30.0% $40 Products 20.0% $20 10.0% 1Q17 1Q18 $0 0.0% 1Q17 1Q18  Net sales growth of 10.8% YoY  Base business net sales increased 3.3% mainly due to higher net sales contributions from suspended ceilings systems and complementary and other products  Gross margin decrease of 30bps YoY reflects change in product mix 7