Revenue during the quarter grew 5.89 percent to $453.10 million from $427.89 million in the previous year period. Gross margin for the quarter expanded 190 basis points over the previous year period to 23.87 percent. Total expenses were 91.37 percent of quarterly revenues, down from 92.94 percent for the same period last year. This has led to an improvement of 157 basis points in operating margin to 8.63 percent.

Operating income for the quarter was $39.10 million, compared with $30.19 million in the previous year period.

However, the adjusted operating income for the quarter stood at $39.59 million compared to $31.24 million in the prior year period. At the same time, adjusted operating margin improved 144 basis points in the quarter to 8.74 percent from 7.30 percent in the last year period.

Jerry Volas, Chief Executive Officer of TopBuild stated, "We continue to successfully leverage our existing platform to generate sales growth, outpacing the increase in lagged housing starts. We believe the trajectory of housing starts will continue to be positive, as there is a limited supply of new construction, and increasing household formations are driving demand. This is an excellent external environment for TopBuild to drive market share and sales growth.

The company has spent $13.09 million cash to meet investing activities during the nine month period as against cash outgo of $9.32 million in the last year period. It has incurred net capital expenditure of $13.18 million on net basis during the nine month period, up 34.24 percent or $3.36 million from year ago period.

The company has spent $23.20 million cash to carry out financing activities during the nine month period as against cash inflow of $71.55 million in the last year period.

Cash and cash equivalents stood at $104.50 million as on Sep. 30, 2016, down 3.55 percent or $3.84 million from $108.34 million on Sep. 30, 2015.

Working capital increases sharply
TopBuild Corp has recorded an increase in the working capital over the last year. It stood at $180.95 million as at Sep. 30, 2016, up 36.81 percent or $48.69 million from $132.26 million on Sep. 30, 2015. Current ratio was at 1.58 as on Sep. 30, 2016, up from 1.39 on Sep. 30, 2015.

Cash conversion cycle (CCC) has decreased to 8 days for the quarter from 19 days for the last year period. Days sales outstanding went down to 51 days for the quarter compared with 52 days for the same period last year.

Days inventory outstanding has decreased to 14 days for the quarter compared with 28 days for the previous year period. At the same time, days payable outstanding went down to 57 days for the quarter from 61 for the same period last year.