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What changed in Installed Building Products, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Installed Building Products, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+349 added−331 removedSource: 10-K (2026-02-26) vs 10-K (2025-02-27)

Top changes in Installed Building Products, Inc.'s 2025 10-K

349 paragraphs added · 331 removed · 296 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

73 edited+12 added−8 removed82 unchanged
Biggest changeFor example, across our installer base, we experienced average monthly turnover of 2.8% in 2024 compared with 3.9% for the U.S. construction industry, according to the U.S. Bureau of Labor Statistics. In addition, we offer many benefits and resources to most employees, some of which are above and beyond what others in our industry offer.
Biggest changeWe consider retaining skilled employees to be a competitive advantage and employ various strategies to improve turnover metrics. Our turnover rate is typically better than industry averages. For example, across our installer base, we experienced average monthly turnover of 3.2% in 2025 compared with 4.0% for the U.S. construction industry, according to the U.S. Bureau of Labor Statistics.
For a further discussion of our industry and trends affecting our industry, please refer to Item 7, Management’s Discussion and Analysis of Financial Condition, "Key Factors Affecting our Operating Results" of this Form 10-K. OUR OPERATIONS Segment Overview We have three operating segments consisting of our Installation, Distribution and Manufacturing operations.
For a further discussion of our industry and trends affecting our industry, please refer to Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, "Key Factors Affecting our Operating Results" of this Form 10-K. OUR OPERATIONS Segment Overview We have three operating segments consisting of our Installation, Distribution and Manufacturing operations.
Opportunity for professional growth, training and advancement are strongly encouraged. We focus on the well-being of our employees through our Positive Production Program. This micro-video program is designed to help employees thrive in all aspects of life through learning and practicing research-backed physical, intellectual and emotional skills.
Opportunity for professional growth, training and advancement are 4 strongly encouraged. We focus on the well-being of our employees through our Positive Production Program. This micro-video program is designed to help employees thrive in all aspects of life through learning and practicing research-backed physical, intellectual and emotional skills.
We are committed in policy and practice to providing equal employment opportunities for all applicants and employees based upon their training, experience, and overall qualifications. Employees across all our branches are invited to participate in our regional and national inclusion and belonging committees to determine the standards for how employees should interact with one another and their communities.
We are committed in policy and practice to providing equal employment opportunities for all applicants and employees based upon their training, experience, and overall qualifications. Employees across all our branches are invited to participate in our regional and national inclusion and belonging 9 committees to determine the standards for how employees should interact with one another and their communities.
In addition to offering certain benefits to most employees, including medical insurance, 401k and paid time off, we also offer longevity stock awards, financial wellness training and savings matching in order to recruit and retain employees. Our retention efforts have reduced our 4 employee turnover to a level below industry averages.
In addition to offering certain benefits to most employees, including medical insurance, 401k and paid time off, we also offer longevity stock awards, financial wellness training and savings matching in order to recruit and retain employees. Our retention efforts have reduced our employee turnover to a level below industry averages.
We strive to operate in accordance with applicable laws, codes and regulations. We are responsible for adhering to several federal, state and local regulations covering building codes, labor-related regulations covering minimum wage, employee classification and employee safety, and transportation procedures. Our transportation operations are subject to the regulatory jurisdiction of the U.S.
We strive to operate in accordance with applicable laws, codes and regulations. 10 We are responsible for adhering to several federal, state and local regulations covering building codes, labor-related regulations covering minimum wage, employee classification and employee safety, and transportation procedures. Our transportation operations are subject to the regulatory jurisdiction of the U.S.
ENVIRONMENTAL, SOCIAL AND REGULATORY MATTERS As part of our commitment to socially responsible corporate practices, we have released our annual ESG report since 2021. This ESG report outlines our sustainability targets and objectives and can be found on our corporate website at https://installedbuildingproducts.com/sustainability.
ENVIRONMENTAL, SOCIAL AND REGULATORY MATTERS As part of our commitment to socially responsible corporate practices, we have released our annual environmental, social and governance ("ESG") report since 2021. This ESG report outlines our sustainability targets and objectives and can be found on our corporate website at https://installedbuildingproducts.com/sustainability.
We have not previously incurred material costs to comply with environmental laws and regulations. 10 However, we could be subject to material costs, liabilities or claims relating to environmental compliance in the future, especially in the event of changes in existing laws and regulations or in their interpretation or enforcement.
We have not previously incurred material costs to comply with environmental laws and regulations. However, we could be subject to material costs, liabilities or claims relating to environmental compliance in the future, especially in the event of changes in existing laws and regulations or in their interpretation or enforcement.
We believe our continued emphasis on expanding our product offering, further expansion into other lines of business, and targeting geographies where we look to grow market share will reduce potential future cyclicality of our operations.
We believe our continued emphasis on expanding our product offering, further 5 expansion into other lines of business, and targeting geographies where we look to grow market share will reduce potential future cyclicality of our operations.
We have used, and intend to continue to use, our investor relations website as a means of disclosing material non-public information and for complying with disclosure obligations under Regulation FD.
We have used, and intend to continue to use, our investor relations website as a means of disclosing material non-public information and 11 for complying with disclosure obligations under Regulation FD.
Our current strategic objectives include: 5 • capitalize on the new residential and commercial construction markets; • continue to strengthen our market share position by working with the best customers.
Our current strategic objectives include: • capitalize on the new residential and commercial construction markets; • continue to strengthen our market share position by working with the best customers.
We, through our cellulose manufacturer, are subject to similar laws and regulations that apply to our suppliers. CORPORATE AND AVAILABLE INFORMATION Installed Building Products, Inc. is a holding company that derives all of its operating income from its subsidiaries. Our principal executive offices are located at 495 South High Street, Suite 50, Columbus, Ohio 43215.
We, through our cellulose manufacturers, are subject to similar laws and regulations that apply to our suppliers. CORPORATE AND AVAILABLE INFORMATION Installed Building Products, Inc. is a holding company that derives all of its operating income from its subsidiaries. Our principal executive offices are located at 495 South High Street, Suite 50, Columbus, Ohio 43215.
We design and install closet shelving systems in select markets utilizing some of the highest quality products available from national brands. We also offer standard and custom designed mirrors for our customers. Shower doors, closet shelving and mirror installations comprised approximately 7% of our net revenue for the year ended December 31, 2024.
We design and install closet shelving systems in select markets utilizing some of the highest quality products available from national brands. We also offer standard and custom designed mirrors for our customers. Shower doors, closet shelving and mirror installations comprised approximately 7% of our net revenue for the year ended December 31, 2025.
This diversity in turn contributes to enhanced profitability as compared to branches in our newer, less developed markets. Given the current economic uncertainty, interest rate volatility and inflationary environment, we can provide no assurance that the positive trends reflected in our recent financial and operating results will continue in 2025.
This diversity in turn contributes to enhanced profitability as compared to branches in our newer, less developed markets. Given the current economic uncertainty, interest rate volatility and inflationary environment, we can provide no assurance that the positive trends reflected in our recent financial and operating results will continue in 2026.
Rain gutters are typically constructed from aluminum or copper and are available in a wide variety of colors, shapes and widths. They are generally assembled on the job site using specialized equipment. The installation of rain gutters comprised approximately 4% of our net revenue for the year ended December 31, 2024.
Rain gutters are typically constructed from aluminum or copper and are available in a wide variety of colors, shapes and widths. They are generally assembled on the job site using specialized equipment. The installation of rain gutters comprised approximately 4% of our net revenue for the year ended December 31, 2025.
In addition, inflation has tightened the labor market as competition and expectations for higher wages increased our labor costs in 2024. Despite recent cuts by the Federal Reserve to the federal funds rate, mortgage rates remained elevated from their recent historic lows primarily due to higher treasury yields.
In addition, inflation has tightened the labor market as competition and expectations for higher wages increased our labor costs in 2025. Despite recent cuts by the Federal Reserve to the federal funds rate, mortgage rates remained elevated from their recent historic lows primarily due to higher treasury yields.
The installation and service of waterproofing comprised approximately 5% of our net revenue for the year ended December 31, 2024. Rain Gutters Some of our locations install a wide range of rain gutters, which direct water from a home’s roof away from the structure and foundation.
The installation and service of waterproofing comprised approximately 5% of our net revenue for the year ended December 31, 2025. Rain Gutters Some of our locations install a wide range of rain gutters, which direct water from a home’s roof away from the structure and foundation.
The large increase in home prices combined with lower mortgage financing affordability has reduced housing demand for the last two years. Despite elevated mortgage rates, we believe consumers are beginning to adjust their expectations for lower rates. Demand for our services can also be impacted by the unsold inventory of completed homes if consumer demand decreases.
The large increase in home prices combined with lower mortgage financing affordability has reduced housing demand. Despite elevated mortgage rates, we believe consumers are beginning to adjust their expectations for lower rates. Demand for our services can also be impacted by the unsold inventory of completed homes if consumer demand decreases.
We had zero fatalities in 2022, 2023 and 2024, and are continually finding ways to improve our practices throughout the organization in order to improve the health and safety of our workforce. CUSTOMERS We serve a broad group of national, regional and local homebuilders, multi-family and commercial construction firms, individual homeowners and repair and remodeling contractors.
We had zero fatalities in 2023, 2024 and 2025, and are continually finding ways to improve our practices throughout the organization in order to improve the health and safety of our workforce. 7 CUSTOMERS We serve a broad group of national, regional and local homebuilders, multi-family and commercial construction firms, individual homeowners and repair and remodeling contractors.
We expect to still benefit from our market share gains in the multi-family business 6 in 2025 thanks to an extended backlog in this end market as well as housing shortages in some of the markets that we service. However, we expect a continued decline in multi-family units under construction to negatively impact our business.
We expect to still benefit from our market share gains in the multi-family business in 2026 thanks to an extended backlog in this end market as well as housing shortages in some of the markets that we service. However, we expect a continued decline in multi-family units under construction to negatively impact our business.
These filings are available to the public on the SEC’s website at http://www.sec.gov. Our corporate website is located at http://www.installedbuildingproducts.com, or http://www.ibp.com, and our investor relations website is located at http://investors.installedbuildingproducts.com.
These filings are available to the public on the SEC’s website at http://www.sec.gov. Our corporate website is located at http://www.installedbuildingproducts.com and our investor relations website is located at http://investors.installedbuildingproducts.com.
The proximity of certain of our branch locations to insulation manufacturers’ facilities provides additional mutual benefits, including opportunities for cost savings and joint planning regarding future production. Due to the limited number of large fiberglass insulation manufacturers, our three largest suppliers in the aggregate accounted for approximately 37% of all material purchases for the year ended December 31, 2024.
The proximity of certain of our branch locations to insulation manufacturers’ facilities provides additional mutual benefits, including opportunities for cost savings and joint planning regarding future production. Due to the limited number of large fiberglass insulation manufacturers, our three largest suppliers in the aggregate accounted for approximately 35% of all material purchases for the year ended December 31, 2025.
As a result of this seasonal activity, our quarterly results of operations and financial position for any particular quarter are not necessarily representative of the results seen over a full fiscal year. In the short term, we expect typical seasonality to return, including higher sales in the spring, summer and fall than in the winter in 2025.
As a result of this seasonal activity, our quarterly results of operations and financial position for any particular quarter are not necessarily representative of the results seen over a full fiscal year. In the short term, we expect typical seasonality, including higher sales in the spring, summer and fall than in the winter in 2026.
This segment comprised approximately 1% of our net revenue for the year ended December 31, 2024. Sales and Marketing We seek to attract and retain customers through exceptional customer service, superior installation quality, broad service offerings and competitive pricing. Our strategy is centered on building and maintaining strong customer relationships.
This segment comprised approximately 2% of our net revenue for the year ended December 31, 2025. Sales and Marketing We seek to attract and retain customers through exceptional customer service, superior installation quality, broad service offerings and competitive pricing. Our strategy is centered on building and maintaining strong customer relationships.
While typically having the highest insulating value per inch and sealing effectiveness of all insulation materials that we offer, spray foam is also typically the most expensive on an installed basis. Spray foam insulation accounted for approximately 16% of our insulation installation sales for the year ended December 31, 2024.
While typically having the highest insulating value per inch and sealing effectiveness of all insulation materials that we offer, spray foam is also typically the most expensive on an installed basis. Spray foam insulation accounted for approximately 17% of our insulation installation sales for the year ended December 31, 2025.
We believe the demand for our installation services remains high due to our proven ability to meet our customer's expectations, however, the full effects of these challenges on the homebuilding market are uncertain as we progress through 2025. SAFETY AND QUALITY CONTROL Our quality control process starts with the initial proposal.
We believe the demand for our installation services remains high due to our proven ability to meet our customer's expectations, however, the full effects of these challenges on the homebuilding market are uncertain as we progress into 2026. SAFETY AND QUALITY CONTROL Our quality control process starts with the initial proposal.
The installation of these products collectively comprised approximately 3% of our net revenue for the year ended December 31, 2024. Window Blinds Some of our locations install different types of window blinds, including cordless blinds, shades and shutters. The installation of window blinds comprised approximately 3% of our net revenue for the year ended December 31, 2024.
The installation of these products collectively comprised approximately 4% of our net revenue for the year ended December 31, 2025. Window Blinds Some of our locations install different types of window blinds, including cordless blinds, shades and shutters. The installation of window blinds comprised approximately 3% of our net revenue for the year ended December 31, 2025.
Fiberglass and cellulose insulation accounted for approximately 84% of our insulation installation sales for the year ended December 31, 2024. • Spray Foam Insulation – Spray foam insulation, which is generally a polyurethane foam, is applied at a job site by mixing two chemical components together in specialized application equipment.
Fiberglass and cellulose insulation accounted for approximately 83% of our insulation installation sales for the year ended December 31, 2025. • Spray Foam Insulation – Spray foam insulation, which is generally a polyurethane foam, is applied at a job site by mixing two chemical components together in specialized application equipment.
Unlike the other products we install, the garage door business has an ongoing aftermarket service component, which represented approximately 20% of the net revenue resulting 2 from garage doors for the year ended December 31, 2024. The installation and service of garage doors comprised approximately 6% of our net revenue for the year ended December 31, 2024.
Unlike the other products we install, the garage door business has an ongoing aftermarket service component, which represented approximately 22% of the net revenue resulting 2 from garage doors for the year ended December 31, 2025. The installation and service of garage doors comprised approximately 6% of our net revenue for the year ended December 31, 2025.
Retaining and motivating local employees has been an important component of our acquisition and operating strategies. As of December 31, 2024, we employed approximately 800 sales professionals and our sales force has spent an average of approximately eleven years with our operations.
Retaining and motivating local employees has been an important component of our acquisition and operating strategies. As of December 31, 2025, we employed approximately 800 sales professionals and our sales force has spent an average of approximately 11 years with our operations.
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 manufacturing facility. IBP was formed as a Delaware corporation on October 28, 2011, however our business began in 1977 with one location in Columbus, Ohio.
In addition, we have regional distribution operations that serve the Midwest, Mountain West, Northeast and Mid-Atlantic regions of the United States, and we operate multiple cellulose manufacturing facilities. IBP was formed as a Delaware corporation on October 28, 2011, however our business began in 1977 with one location in Columbus, Ohio.
Backlog is not a guarantee of future revenues as contractual commitments may change. There can be no assurance that backlog will result in revenues within the expected timeframe, if at all. We estimate backlog was $126.3 million as of December 31, 2024 and we estimated it to be $115.7 million as of December 31, 2023.
Backlog is not a guarantee of future revenues as contractual commitments may change. There can be no assurance that backlog will result in revenues within the expected timeframe, if at all. We estimate backlog was $162.9 million as of December 31, 2025 and we estimated it to be $126.3 million as of December 31, 2024.
We have successfully diversified our product offering from the year ended December 31, 2013, when insulation installation comprised approximately 74% of revenues, to the year ended December 31, 2024, when it comprised 60% of revenues.
We have successfully diversified our product offering from the year ended December 31, 2013, when insulation installation comprised approximately 74% of revenues, to the year ended December 31, 2025, when it comprised 58% of revenues.
We have strong long-standing relationships with many of the manufacturers of the materials we use in our business, including the largest manufacturers of fiberglass and spray foam. The fiberglass insulation manufacturing market is highly consolidated and primarily served by four major manufacturers.
We have strong long-standing relationships with many of the manufacturers of the materials we use in our business, including the largest manufacturers of fiberglass and spray foam. The fiberglass insulation manufacturing market is highly consolidated and primarily served by four major manufacturers (Owens Corning, Knauf Insulation, CertainTeed and Johns Manville).
We are proud of our strong workforce, as shown in the table below (workforce data as of February 2025): Employee Demographics Workforce (%) Black or African American 5.0% Hispanic or Latino 51.3% White 41.2% Other 2.5% Our number of Hispanic/Latino employees outpaces the construction industry average, according to the Bureau of Labor Statistics, and our workforce as a whole is comprised of over 50% ethnic minorities.
We are proud of our strong workforce, as shown in the table below (workforce data as of February 2026): Employee Demographics Workforce (%) Black or African American 5.0% Hispanic or Latino 49.5% White 42.8% Other 2.7% Our number of Hispanic/Latino employees outpaces the construction industry average, according to the Bureau of Labor Statistics, and our workforce as a whole is comprised of over 50% ethnic minorities.
Energy efficiency is central to our mission, and climate-related issues have driven and continue to drive our business strategy. The Nominating and Corporate Governance Committee is responsible for the oversight of ESG matters, including climate matters. Our senior management work closely with this committee to identify and address climate-related risks and opportunities.
Energy efficiency is central to our mission, and climate-related issues have driven and continue to drive our business strategy. The Nominating and Corporate Governance Committee is responsible for overseeing our initiatives, opportunities and reporting on material ESG matters. Our senior management work closely with this committee to identify and address climate-related risks and opportunities.
Commercial demand showed slight growth in 2024, and the commercial sector is predicted to see a modest increase of 6% in investment dollars in 2025 over 2024, according to Dodge Data & Analytics.
Commercial demand showed slight growth in 2025, and the commercial end market is predicted to see a modest increase of 3% in investment dollars in 2026 over 2025, according to Dodge Data & Analytics.
While we serve many national and regional builders across multiple markets, we compete for business at the local level. Given our emphasis on quality service, customer turnover is extremely low. Well established relationships with suppliers.
We continue to enhance our long-standing relationships with some of the largest builders in the country. While we serve many national and regional builders across multiple markets, we compete for business at the local level. Given our emphasis on quality service, customer turnover is extremely low. Well established relationships with suppliers.
Insulation installation comprised approximately 60%, 60% and 61% of our net revenue of $2.9 billion, $2.8 billion and $2.7 billion for the years ended December 31, 2024, 2023 and 2022, respectively.
Insulation installation comprised approximately 58%, 60% and 60% of our net revenue of $3.0 billion, $2.9 billion and $2.8 billion for the years ended December 31, 2025, 2024 and 2023, respectively.
In 2024, the Foundation and the Company awarded over 750 grants and made contributions totaling ove r $4.5 million i n the form of scholarships and financial assistance to our employees as well as donations and matching gifts to various charities supported by our employees .
In 2025, the Foundation and the Company awarded over 240 grants and made contributions totaling ove r $4.1 million i n the form of scholarships and financial assistance to our employees as well as donations and matching gifts to various charities supported by our employees . The Foundation has made over $18.4 million in grants since its inception in 2019.
TRENDS IN THE MARKETPLACE Our business relies on various market factors, one of which is residential housing demand. Following the late 2000s recession in the U.S. economy, housing starts dropped well below historical averages for over a decade.
TRENDS IN THE MARKETPLACE Our business relies on various market factors, one of which is residential housing demand. Following the late 2000s recession in the U.S. economy, housing starts dropped well below historical averages for over a decade. Housing starts recently peaked in 2021 with 1.61 million starts which was a return to early 2000s levels. According to U.S.
Other Building Products Some of our locations install other complementary building products, none of which is an individually significant percentage of net revenue. Installation of other building products comprised approximately 6% of our net revenue for the year ended December 31, 2024. Distribution Operating Segment We have three businesses that comprise our distribution platform. AMD Distribution, Inc.
Other Building Products Some of our locations install other complementary building products, none of which is an individually significant percentage of net revenue. Installation of other building products comprised approximately 6% of our net revenue for the year ended December 31, 2025. Distribution Operating Segment Our distribution operating segment consists of our regional distribution businesses.
We have diversified our end customer demographic from the year ended December 31, 2013, when revenue from the commercial end market comprised approximately 11% of revenues, to the year ended December 31, 2024 when it comprised 16% of revenues. Our exposure to commercial end markets diversifies our customer base and makes our business less dependent on residential new construction.
Revenue from the commercial end market comprised approximately 11% of revenues for the year ended December 31, 2013, and increased to 17% of revenues for the year ended December 31, 2025. Our exposure to commercial end markets diversifies our customer base and makes our business less dependent on residential new construction.
See "Competitive Advantages, Engaged employees” above for further details on the benefits we offer. As described in the Competitive Advantages section above, the Foundation was formed by us primarily to benefit our employees and their families and the communities in which they live and work.
As described in the Competitive Advantages section above, the Foundation was formed by us primarily to benefit our employees and their families and the communities in which they live and work.
The jobCORE software provides in-depth real- 9 time job-level operational and financial performance data from each branch to the corporate office. JobCORE provides us, our branch managers and our sales personnel with an important operational tool for monitoring branch level performance.
The jobCORE software provides in-depth real-time job-level operational and financial performance data from each branch to the corporate office. JobCORE provides us, our branch managers and our sales personnel with an important operational tool for monitoring branch level performance. It assists management in assessing important business questions, including customer analysis, sales staff analysis, branch analysis and other operating activities.
Commercial construction is also driven by longer term projects which tends to provide greater revenue visibility. In periods of declining insulation installation volumes, our sales force is able to leverage our diversity of products and reduce the impact of lost insulation sales by growing sales of complementary building products, further enhancing our ability to perform.
In periods of declining insulation installation volumes, our sales force is able to leverage our diversity of products and reduce the impact of lost insulation sales by growing sales of complementary building products, further enhancing our ability to perform.
Distribution sales can also help offset decreasing sales in our installation segment. Our national geographic footprint provides us a balanced business not concentrated in any single region. Engaged employees. We offer competitive benefits to our employees to ensure an engaged workforce.
Commercial construction is also driven by longer term projects which tends to provide greater revenue visibility. Distribution and manufacturing sales can also help offset decreasing sales in our installation segment. Our national geographic footprint provides us a balanced business not concentrated in any single region. Engaged employees. We offer competitive benefits to our employees to ensure an engaged workforce.
Our regional managers, local branch managers and sales force have significant experience in the industry and have spent an average of more than 12 years with our operations. Commitment to the communities we live and work in.
Our regional managers, local branch managers and sales force have significant experience in the industry and have spent an average of more than 12 years with our operations. Commitment to the communities we live and work in. The Installed Building Products Foundation (the "Foundation") was established to help support our employees for their education, financial and philanthropic needs.
In addition to acquisition and local market share growth, we typically experience an increased rate of product and end market diversification during periods of reduced demand growth rates in the residential end market. As such, our oldest and most established branches tend to exhibit the greatest diversity of service and product offerings.
In addition to acquisition and local market share growth, we typically experience an increased rate of product and end market diversification during periods of reduced demand growth rates in the residential end market.
We believe these programs benefit the safety and physical well-being of our employees. Total hours worked increased 5% from 2023 to 2024, and the OSHA-defined incident rate per 100 employees decreased 9% to 5.10 for the year ended December 31, 2024. This was below our five year average incident rate per 100 employees of 5.86.
We believe these programs benefit the safety and physical well-being of our employees. Our OSHA-defined incident rate per 100 employees was 5.5 for the year ended December 31, 2025, which was below our five year average incident rate per 100 employees of 5.7.
This is an increase from 2023 when the Foundation and the Company awarded 172 grants totaling $2.5 million. We continue to support the Foundation’s mission of supporting our employees for their education, financial and philanthropic needs, as well as providing assistance to employees who have experienced unexpected emergencies or disasters.
We continue to support the Foundation’s mission of supporting our employees for their education, financial and philanthropic needs, as well as providing assistance to employees who have experienced unexpected emergencies or disasters.
We service the residential new construction and repair and remodel markets, both of which consist of single-family and multi-family dwellings, as well as the commercial construction market. The multi-family subset of the residential end market can offset decreasing single-family demand during economic downturns or elevated interest rate environments.
We service the residential new construction and repair and remodel markets, both of which consist of single-family and multi-family dwellings, as well as the commercial construction market. The multi-family subset of the residential end market can offset decreasing single-family demand during housing market downturns. In addition, we have diversified our services by expanding further into the commercial end market.
It assists management in assessing important business questions, including customer analysis, sales staff analysis, branch analysis and other operating activities. INTELLECTUAL PROPERTY We possess intellectual property rights, including trademarks, trade names and know-how and other proprietary rights that are important to our business.
INTELLECTUAL PROPERTY We possess intellectual property rights, including trademarks, trade names and know-how and other proprietary rights that are important to our business.
("AMD") is headquartered in Spring Valley, Minnesota and has eight locations including distribution centers and bonded warehouses. These locations service several states throughout the Midwest and Mountain West. AMD distributes products and materials purchased wholesale from manufacturers such as spray foam insulation, metal building insulation, residential insulation, and mechanical and fabricated Styrofoam insulation.
AMD Distribution ("AMD"), headquartered in Spring Valley, Minnesota, operates nine locations including distribution centers and bonded warehouses and services 28 states across the northern United States. AMD distributes insulation and related products purchased wholesale from manufacturers, including spray foam insulation, metal building insulation, residential insulation, and mechanical and fabricated Styrofoam insulation.
Throughout the construction process, our branch sales and supervisory staff and installation teams make frequent site visits to ensure timely and proper installation and to provide general service support. We believe a high level of service is valued by our customers and generates customer loyalty. Broad and stable customer base.
We have a proven track record of customer satisfaction in managing all aspects of the installation process for our customers. Throughout the construction process, our branch sales and supervisory staff and installation teams make frequent site visits to ensure timely and proper installation and to provide general service support.
Per the Bureau of Labor Statistics, inflation in the United States averaged 2.9% in 2024 as measured by the consumer price index, a decrease from the 3.4% average reported in 2023.
Per the Bureau of Labor Statistics, inflation in the United States averaged 2.7% in 2025 as measured by the consumer price index, a decrease from the 2.9% average reported in 2024. We were successful at realizing selling price increases during 2025 to offset previous cost increases on materials.
AMD sells to a diverse group of independent contractors of various sizes working on projects in the residential, commercial and agricultural markets. AMD is also a distributor of accessories and equipment used throughout the insulation installation process.
AMD sells to a diverse group of independent contractors of varying sizes engaged in residential, commercial and agricultural projects and also distributes accessories and equipment used in the insulation installation process. Central Aluminum Supply Corporation and Central Aluminum Supply of North Jersey, LLC (“CAS”) is a distributor of gutter supplies and accessories headquartered in Trenton, New Jersey.
The Installed Building Products Foundation ("the Foundation") is a separate, not-for-profit organization to help support our employees for their education, financial and philanthropic needs. Our foundation administers our scholarship program for our employees and their families as well as our employee financial assistance program to support our employees who experience financial hardship resulting from an unexpected emergency or disaster.
Our Foundation administers our scholarship program for our employees and their families as well as our employee financial assistance program to support our employees who experience financial hardship resulting from an unexpected emergency or disaster. In addition, the Foundation serves our communities by focusing our impact on supporting education, housing and community-strengthening causes.
We expect to continue to effectively compete in our local markets given our long-standing customer relationships, access to capital, tenure and quality of local staff, quality installation reputation and competitive pricing. 8 HUMAN CAPITAL RESOURCES As of December 31, 2024, we had approximately 10,800 employees, consisting of approximately 7,400 installers, approximately 800 sales professionals, approximately 800 production personnel and approximately 1,800 administrative and management personnel.
We expect to continue to effectively compete in our local markets given our long-standing customer relationships, access to capital, tenure and quality of local staff, quality installation reputation and competitive pricing.
We place an emphasis on having a strong balance sheet which allows us to focus on our strategic initiatives and pursue growth opportunities, drive profitability and generate cash. We have a highly variable cost structure with a significant portion of operating expenses directly linked to volume.
Financial strength, variable cost structure and strong free cash flow. We believe that we are among the most financially sound companies in our industry. We place an emphasis on having a strong balance sheet which allows us to focus on our strategic initiatives and pursue growth opportunities, drive profitability and generate cash.
Insulation Supplies distributes various insulation products including equipment and machines and services several states throughout the Midwest. Our Distribution segment comprised approximately 5% of our net revenue for the year ended December 31, 2024. 3 Manufacturing Operating Segment Our manufacturing operation, Advanced Fiber Technology ("AFT"), operates in Bucyrus, Ohio producing cellulose insulation and specialty industrial fibers.
Our Distribution segment comprised approximately 5% of our net revenue for the year ended December 31, 2025. 3 Manufacturing Operating Segment Our manufacturing operations include Advanced Fiber Technology ("AFT") located in Bucyrus, Ohio, and Carolina Precision Fibers ("CPF"), a 2025 acquisition operating in Ronda, North Carolina. AFT and CPF primarily produce cellulose insulation and specialty industrial fibers.
For example, our largest customer is independently serviced by 91 different IBP branches nationwide despite representing approximately 4% of net revenue for the year ended December 31, 2024. While our largest customers are homebuilders, our customer base is also diverse. We work on a range of commercial projects including office buildings, airports, sports complexes, museums, hospitals, hotels and educational facilities.
We install a variety of products in multiple markets for our largest customers, further diversifying our relationship with them. For example, our largest customer is independently serviced by 96 different IBP branches nationwide despite representing approximately 4% of net revenue for the year ended December 31, 2025. While our largest customers are homebuilders, our customer base is also diverse.
Severe incidents increased from 7 in 2023 to 11 in 2024, and our 2025 target goal is to reduce the number of severe incidents back to our five year average of 8.
We also had a 9% decrease in severe incidents from 2024 to 2025 as we had only 10 severe incidents in 2025, and our 2026 target goal is to reduce the number of severe incidents to below our five year average of 9.4.
We believe that our ability to consistently complete our installations within a customer’s production schedule is recognized by our customers and is a key component of our high level of service. We have a proven track record of customer satisfaction in managing all aspects of the installation process for our customers.
Our minimal capital expenditure requirements support the generation of strong free cash flow. Execution excellence. We believe that our ability to consistently complete our installations within a customer’s production schedule is recognized by our customers and is a key component of our high level of service.
We benefit from a diverse customer base that includes production and custom homebuilders, multi-family, commercial and agricultural construction firms, homeowners and residential repair and remodeling contractors. We continue to enhance our long-standing relationships with some of the largest builders in the country.
We believe a high level of service is valued by our customers and generates customer loyalty. Broad and stable customer base. We benefit from a diverse customer base that includes production and custom homebuilders, multi-family, commercial and agricultural construction firms, homeowners and residential repair and remodeling contractors.
Less than 4% of our employees are covered under collective bargaining agreements. We have never experienced a work stoppage or strike, and we believe that we have good relationships with our employees. We monitor certain financial and operational statistics related to our workforce.
We have never experienced a work stoppage or strike, and we believe that we have good relationships with our employees. We monitor certain financial and operational statistics related to our workforce. For example, we utilize sales per installer per business day to ensure we maintain the proper level of staffing to complete our jobs.
COMPETITION We believe that competition in our industry is based on quality and timeliness of service, knowledge of local building codes, pricing, relationships and reputation in the market. The building products installation industry is highly fragmented. The markets for our non-insulation installation services are even more fragmented than the markets for insulation installation services.
In the past, we have from time to time utilized our borrowing availability under our credit facilities to cover short-term working capital needs. 8 COMPETITION We believe that competition in our industry is based on quality and timeliness of service, knowledge of local building codes, pricing, relationships and reputation in the market. The building products installation industry is highly fragmented.
Of our top 20 customers, 18 represent homebuilders and two represent commercial customers. We have long-term relationships with many of our customers and have served most of our top 20 customers for at least two decades. 7 BACKLOG For contracts that are not complete at the reporting date, we recognize revenue over time utilizing a cost-to-cost input method.
BACKLOG For contracts that are not complete at the reporting date, we recognize revenue over time utilizing a cost-to-cost input method.
Typically, the subsequent collection of receivables and reduction in inventory levels during the winter months has positively impacted cash flow. In the past, we have from time to time utilized our borrowing availability under our credit facilities to cover short-term working capital needs.
Typically, the subsequent collection of receivables and reduction in inventory levels during the winter months has positively impacted cash flow.
Housing starts are forecasted to decrease in 2025, as Fannie Mae predicts 1.32 million starts with an overall decrease of 3.4% compared to 2024. Inflation and elevated mortgage interest rates are expected to continue affecting affordability of new homes, both of which are the primary drivers behind the projected decline for new housing starts forecasted in 2025.
Inflation and elevated mortgage interest rates are expected to continue affecting affordability of new homes, both of which are the primary drivers behind the projected decline for new housing starts forecasted in 2026. Employment remains stable and continues to support demand for residential new construction activity despite the affordability concerns and recent economic uncertainty.
Our top ten customers, which are primarily a combination of national and regional builders, accounted for approximately 15% of net revenue for the year ended December 31, 2024. We install a variety of products in multiple markets for our largest customers, further diversifying our relationship with them.
Our installation customers are primarily single-family homebuilders, a highly fragmented group where the top 100 builders collectively represent about 49% of the market. Our top ten customers, which are primarily a combination of national and regional builders, accounted for approximately 14% of net revenue for the year ended December 31, 2025.
AFT's primary product, cellulose insulation, consists primarily of wastepaper and helps reduce greenhouse emissions by reducing the wastepaper decomposing in landfills which releases methane and carbon dioxide gases. AFT sells its products to a wide range of customers including distributors, retailers and insulation contractors. AFT expanded production to include a second cellulose insulation manufacturing line in 2024.
Cellulose insulation is made primarily from wastepaper and helps reduce greenhouse emissions by diverting wastepaper from landfills, where it would otherwise decompose and release methane and carbon dioxide gases. Our manufacturers sell their products to a broad range of customers including distributors, retailers and insulation contractors.
For example, we utilize sales per installer per business day to ensure we maintain the proper level of staffing to complete our jobs. We were successful in achieving higher productivity in 2024 as compared to 2023 as evidenced by our annual sales per installer per business day increasing 1%.
We were successful in achieving higher productivity in 2025 as compared to 2024 as evidenced by our annual sales per installer per business day increasing 4%. Our employees are critical to our continued success and are our most important resource. We focus on attracting and retaining talented and experienced individuals to manage and support our operations.
Removed
Central Aluminum Supply Corporation and Central Aluminum Supply of North Jersey, LLC (“CAS”) is a distributor of gutter supplies and accessories headquartered in Trenton, New Jersey. CAS has five locations which primarily sell to high-volume gutter installers and independent contractors in residential, multi-family and commercial markets.
Added
CAS operates six locations that service 12 states throughout the Northeast and Mid-Atlantic regions. CAS primarily supplies high-volume gutter installers and independent contractors serving the residential, multi-family and commercial markets. CAS purchases the majority of its finished painted aluminum from a single supplier and is subject to fluctuations in the commodity pricing of aluminum.
Removed
The products are primarily used in existing or retrofit construction projects across the Northeast and Mid-Atlantic regions. CAS purchases the majority of its finished painted aluminum from one supplier and is subject to the commodity pricing of aluminum metal. Our third distribution business is the recently acquired Insulation Supplies which is headquartered in New Hope, Minnesota.
Added
Wholesale Insulation Supply, Inc. operates in New Hope, Minnesota and services seven states in the Midwest. Wholesale Insulation Supply, Inc. distributes various insulation products including equipment and machines.
Removed
In addition, the Foundation serves our communities by focusing our impact on supporting education, housing and community-strengthening causes. Financial strength, variable cost structure and strong free cash flow. We believe that we are among the most financially sound companies in our industry.
Added
We have a highly variable cost structure with a significant portion of operating expenses directly linked to volume. Our largest expenses are materials and labor and most of our installation employees are paid by completed job. In a softer sales environment, we are able to reduce our inventory levels and our accounts receivable balance, generating significant cash for the business.
Removed
Our largest expenses are materials and labor and most of our installation employees are paid by completed job. Our minimal capital expenditure requirements support the generation of strong free cash flow. Execution excellence.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeChanging market dynamics, global policy developments and increasing frequency and impact of extreme weather events on the U.S. and elsewhere have the potential to disrupt our business. The impact of these types of events on our business may adversely impact quarterly or annual net revenue, cash flows from operations and results of operations.
Biggest changeFor example, we lease facilities and have significant operations in Florida, Texas, California and other coastal areas that experience extreme weather conditions or natural disasters including hurricanes and wildfires. Changing market dynamics, global policy developments and increasing frequency and impact of extreme weather events on the U.S. and elsewhere have the potential to disrupt our business.
Our business is cyclical, seasonal and highly sensitive to economic and housing market conditions over which we have no control, including: • the number of new home and commercial building construction starts; • short- and long-term interest rates; • inflation; • employment levels and job and personal income growth; • housing demand from population growth, household formation and other demographic changes; • housing affordability; • rental housing demand; • availability and cost of labor; • availability and cost of land; • changes in material prices; • local zoning and permitting processes, including the length of building cycles from permit to completion, based on local economic or environmental factors; • federal, state and local energy efficiency programs, regulations, building codes and standards; • availability and pricing of mortgage financing for homebuyers and commercial financing for developers of multi-family homes and commercial projects; • foreclosure rates; • consumer confidence generally and the confidence of potential homebuyers in particular; • U.S. and global financial system and credit market stability; • federal government economic, trade, and spending laws and policies; • private party and government mortgage loan programs and federal and state regulation, oversight and legal action regarding lending, appraisal, foreclosure and short sale practices; • federal and state personal income tax rates and provisions, including provisions for the deduction of mortgage loan interest payments, state and local income and real estate taxes and other expenses; • general economic conditions, including in the markets in which we compete; and • pandemics, natural disasters, war, acts of terrorism and response to these events.
Our business is cyclical, seasonal and highly sensitive to economic and housing market conditions over which we have no control, including: • the number of new home and commercial building construction starts; • short- and long-term interest rates; • inflation; • employment levels and job and personal income growth; • housing demand from population growth, household formation and other demographic changes; • housing affordability; • rental housing demand; • availability and cost of labor; • availability and cost of land; • changes in material prices; • local zoning and permitting processes, including the length of building cycles from permit to completion, based on local economic or environmental factors; • federal, state and local energy efficiency programs, regulations, building codes and standards; • availability and pricing of mortgage financing for homebuyers and commercial financing for developers of multi-family homes and commercial projects; • foreclosure rates; • consumer confidence generally and the confidence of potential homebuyers in particular; • U.S. and global financial system and credit market stability; • federal government economic, trade, tariff and spending laws and policies; • private party and government mortgage loan programs and federal and state regulation, oversight and legal action regarding lending, appraisal, foreclosure and short sale practices; • federal and state personal income tax rates and provisions, including provisions for the deduction of mortgage loan interest payments, state and local income and real estate taxes and other expenses; 12 • general economic conditions, including in the markets in which we compete; and • pandemics, natural disasters, war, acts of terrorism and response to these events.
In addition, our hedging transactions may expose us to certain risks and financial losses, including, among other things: • the risk that the other parties to the agreements would not perform; • the risk that the duration or amount of the hedges may not match the duration or amount of the related liability; 25 • the risk that hedging transactions may be adjusted from time to time in accordance with accounting rules to reflect changes in fair values including downward adjustments which would affect our stockholders’ equity; and • the risk that we may not be able to meet the terms and conditions of the hedging instruments, in which case we may be required to settle the instruments prior to maturity with cash payments that could significantly affect our liquidity.
In addition, our hedging transactions may expose us to certain risks and financial losses, including, among other things: • the risk that the other parties to the agreements would not perform; • the risk that the duration or amount of the hedges may not match the duration or amount of the related liability; • the risk that hedging transactions may be adjusted from time to time in accordance with accounting rules to reflect changes in fair values including downward adjustments which would affect our stockholders’ equity; and • the risk that we may not be able to meet the terms and conditions of the hedging instruments, in which case we may be required to settle the instruments prior to maturity with cash payments that could significantly affect our liquidity.
The full extent and scope of impact of an outbreak of any contagious disease on our business and industry, as well as national, regional and global markets and economies, depends on numerous evolving factors that we may not be able to accurately predict, including the duration and scope of the outbreak, additional government actions taken in response, the impact on construction activity and demand for homes (based on employment levels, consumer spending and consumer confidence).
The full extent and scope of impact of an outbreak of any contagious disease on our business and industry, as well as national, regional and global markets and economies, depends on numerous evolving factors that we may not be able to 17 accurately predict, including the duration and scope of the outbreak, additional government actions taken in response, the impact on construction activity and demand for homes (based on employment levels, consumer spending and consumer confidence).
Our expansion into these businesses may include opening new branches that have higher start-up costs compared to our acquired branches. These factors and any other challenges we encounter could adversely affect our margins, financial condition, operating results and cash flows. In addition, a significant period of economic deflation could have an adverse impact on our business and financial results.
Our expansion into these businesses 20 may include opening new branches that have higher start-up costs compared to our acquired branches. These factors and any other challenges we encounter could adversely affect our margins, financial condition, operating results and cash flows. In addition, a significant period of economic deflation could have an adverse impact on our business and financial results.
Even if 26 we are able to raise capital through equity or debt financings, as to which there can be no assurance, the interest of existing stockholders in our company may be diluted, and the securities we issue may have rights, preferences and privileges that are senior to those of our common stock or may otherwise materially and adversely affect the holdings or rights of our existing stockholders.
Even if we are able to raise capital through equity or debt financings, as to which there can be no assurance, the interest of existing stockholders in our company may be diluted, and the securities we issue may have rights, preferences and privileges that are senior to those of our common stock or may otherwise materially and adversely affect the holdings or rights of our existing stockholders.
This winter slowdown contributes to traditionally lower sales and profitability in our first quarter. 17 In addition, climate change and/or adverse weather conditions, such as unusually prolonged cold conditions, rain, blizzards, hurricanes, earthquakes, fires, other natural disasters, epidemics or other catastrophic events could accelerate, delay or halt construction or installation activity or impact our suppliers.
This winter slowdown contributes to traditionally lower sales and profitability in our first quarter. In addition, climate change and/or adverse weather conditions, such as unusually prolonged cold conditions, rain, blizzards, hurricanes, earthquakes, fires, other natural disasters, epidemics or other catastrophic events could accelerate, delay or halt construction or installation activity or impact our suppliers.
Our business may not generate sufficient cash flow, and future financings may not be available to provide sufficient net proceeds, to meet 24 these obligations or to successfully execute our business strategies. See Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, "Liquidity and Capital Resources, Debt." of this Form 10-K.
Our business may not generate sufficient cash flow, and future financings may not be available to provide sufficient net proceeds, to meet these obligations or to successfully execute our business strategies. See Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, "Liquidity and Capital Resources, Debt." of this Form 10-K.
If the payment of our debt is accelerated, our assets may be insufficient to repay such debt in full, and our stockholders could experience a partial or total loss of their investment. Our use of interest rate hedging instruments could expose us to risks and financial losses that may adversely affect our financial condition, liquidity and results of operations.
If the payment of our debt is accelerated, our assets may be insufficient to repay such debt in full, and our stockholders could experience a partial or total loss of their investment. 25 Our use of interest rate hedging instruments could expose us to risks and financial losses that may adversely affect our financial condition, liquidity and results of operations.
A significant increase in competition, minimum wage or overtime rates in localities where we 15 have employees could have a significant impact on our operating costs and may require that we take steps to mitigate such increases, all of which may cause us to incur additional costs, expend resources responding to such increases and lower our margins.
A significant increase in competition, minimum wage or overtime rates in localities where we have employees could have a significant impact on our operating costs and may require that we take steps to mitigate such increases, all of which may cause us to incur additional costs, expend resources responding to such increases and lower our margins.
Additional risks and uncertainties not presently known to us, or that we currently believe to 11 be immaterial, may also adversely impact our business, financial condition and results of operations. We urge investors to consider carefully the risk factors described below in evaluating the information contained in this report.
Additional risks and uncertainties not presently known to us, or that we currently believe to be immaterial, may also adversely impact our business, financial condition and results of operations. We urge investors to consider carefully the risk factors described below in evaluating the information contained in this report.
Adverse changes or continued uncertainty regarding these and other economic conditions could result in a decline or postponement in spending on commercial construction projects, which could adversely affect our financial condition, results of operations and cash flows. Weakness in the commercial construction market would have a material adverse effect on our business, financial condition and operating results.
Adverse changes or continued uncertainty regarding these and other economic conditions could result in a decline or postponement in spending on commercial construction projects, which could adversely affect our financial condition, results of operations and cash flows. 13 Weakness in the commercial construction market would have a material adverse effect on our business, financial condition and operating results.
We have significant exposure to changes in laws governing our relationships with our employees, including wage and hour laws and regulations, fair labor standards, minimum wage requirements, overtime pay, unemployment tax rates, workers’ compensation rates, citizenship requirements and payroll taxes, which likely would have a direct impact on our operating costs.
We have significant exposure to changes in laws governing our relationships with our employees, including wage and hour laws and regulations, fair labor standards, minimum wage requirements, overtime pay, unemployment tax rates, workers’ 21 compensation rates, citizenship requirements and payroll taxes, which likely would have a direct impact on our operating costs.
We could also become subject to fines, penalties and other costs related to claims that we did 21 not fully comply with all recordkeeping obligations of federal and state immigration laws. These factors could have a material adverse effect on our reputation, business, financial condition and results of operations.
We could also become subject to fines, penalties and other costs related to claims that we did not fully comply with all recordkeeping obligations of federal and state immigration laws. These factors could have a material adverse effect on our reputation, business, financial condition and results of operations.
As some of our systems are maintained or operated by third-party providers, including cloud-based systems, our information, operations and systems could be adversely affected if any of our significant providers, customers or suppliers experience a cybersecurity incident, data breach, reputational damage or disruption to their business operations.
As some of our systems are maintained or operated by third-party providers, including cloud-based systems, our information, operations and 18 systems could be adversely affected if any of our significant providers, customers or suppliers experience a cybersecurity incident, data breach, reputational damage or disruption to their business operations.
Any deterioration in economic or housing market conditions or continuation of uncertain economic or housing market conditions could have a material adverse effect on our business, financial condition, results of operations and prospects. 12 Adverse developments affecting the new residential housing market could materially and unfavorably affect our business and financial results.
Any deterioration in economic or housing market conditions or continuation of uncertain economic or housing market conditions could have a material adverse effect on our business, financial condition, results of operations and prospects. Adverse developments affecting the new residential housing market could materially and unfavorably affect our business and financial results.
If a participating employer stops contributing to the multiemployer plan, the unfunded obligations of the plan may be borne by the remaining participating employers. In addition, if a participating employer chooses to stop participating in these multiemployer plans, the employer may be required to pay those plans a withdrawal liability based upon the underfunded status of the plan.
If a participating employer stops contributing to the multiemployer pension plan, the unfunded obligations of the plan may be borne by the remaining participating employers. In addition, if a participating employer chooses to stop participating in these multiemployer pension plans, the employer may be required to pay those plans a withdrawal liability based upon the underfunded status of the plan.
We did not record any goodwill impairment charges in 2024, 2023, or 2022; however, a decline in the expectation of our future performance, a decline in our market capitalization, sustained periods of economic inflation, prolonged periods of high interest rates, deterioration in expectations regarding the general economy and/or the timing and the extent of new home construction, home improvement and commercial construction activity may cause us to recognize non-cash, pre-tax impairment charges for goodwill or other long-lived assets, which are not determinable at this time.
We did not record any goodwill impairment charges in 2025, 2024, or 2023; however, a decline in the expectation of our future performance, a decline in our market capitalization, sustained periods of economic inflation, prolonged periods of high interest rates, deterioration in expectations regarding the general economy and/or the timing and the extent of new home construction, home improvement and commercial construction activity may cause us to recognize non-cash, pre-tax impairment charges for goodwill or other long-lived assets, which are not determinable at this time.
Acquisitions involve a number of special risks, including: • our inability to manage acquired businesses or control integration costs and other costs relating to acquisitions; • potential adverse short-term effects on operating results from increased costs, business disruption or otherwise; • diversion of management’s attention; • loss of suppliers, customers or other significant business partners of the acquired business; • failure to retain existing key personnel of the acquired business and recruit qualified new employees at the location; • failure to successfully implement infrastructure, logistics and systems integration; • potential impairment of goodwill and other intangible assets; • risks associated with new lines of business and business models; • risks associated with the internal controls of acquired businesses; • exposure to legal claims for activities of the acquired business prior to acquisition and inability to realize on any indemnification claims, including with respect to environmental, employment and immigration claims; 19 • the risks inherent in the systems of the acquired business and risks associated with unanticipated events or liabilities; and • our inability to obtain financing necessary to complete acquisitions on attractive terms or at all.
Acquisitions involve a number of special risks, including: • our inability to manage acquired businesses or control integration costs and other costs relating to acquisitions; 19 • potential adverse short-term effects on operating results from increased costs, business disruption or otherwise; • diversion of management’s attention; • risks associated with assumed contracts or backlog; • loss of suppliers, customers or other significant business partners of the acquired business; • failure to retain existing key personnel of the acquired business and recruit qualified new employees at the location; • failure to successfully implement infrastructure, logistics and systems integration; • potential impairment of goodwill and other intangible assets; • risks associated with new lines of business and business models; • risks associated with the internal controls of acquired businesses; • exposure to legal claims for activities of the acquired business prior to acquisition and inability to realize on any indemnification claims, including with respect to environmental, employment and immigration claims; • the risks inherent in the systems of the acquired business and risks associated with unanticipated events or liabilities; and • our inability to obtain financing necessary to complete acquisitions on attractive terms or at all.
These and other factors may lower the market price of our common stock, regardless of our actual operating performance. Furthermore, in recent years the stock market and the price of our common stock has experienced significant price and volume fluctuations.
These and other factors may lower the market price of our common stock, regardless of our actual operating performance. 27 Furthermore, in recent years the stock market and the price of our common stock has experienced significant price and volume fluctuations.
These concerns have resulted in increasing governmental and societal attention to ESG matters, including expanding mandatory and voluntary reporting, diligence, and disclosure on topics such as climate change, waste production, water usage, human capital, labor, and risk oversight, and could expand the nature, scope, and complexity of matters on which we are required to control, assess, and report.
These concerns have resulted in increasing governmental and societal attention to sustainability matters, including expanding mandatory and voluntary reporting, diligence, and disclosure on topics such as climate change, waste production, water usage, human capital, labor, and risk oversight, and could expand the nature, scope, and complexity of matters on which we are required to control, assess, and report.
(“IBS”), an investment vehicle owned by Jeff Edwards and his siblings, is a party to certain prepaid variable forward sale contracts with an unaffiliated third party buyer. These contracts include 1,150,000 shares of our common stock in the aggregate, with various settlement dates in August 2025, March 2026, November 2026, May 2027 and June 2027.
(“IBS”), an investment vehicle owned by Jeff Edwards and his siblings, is a party to certain prepaid variable forward sale contracts with an unaffiliated third party buyer. These contracts include 1,150,000 shares of our common stock in the aggregate, with various settlement dates in March 2026, November 2026, May 2027 and June 2027.
The majority of revenue from our business comes from the installation of building products in the new residential housing market. Any decline in new home construction may result in lower demand for our services and products and may materially adversely affect our business, financial condition, liquidity, results of operations and cash flows. In 2024, the U.S.
The majority of revenue from our business comes from the installation of building products in the new residential housing market. Any decline in new home construction may result in lower demand for our services and products and may materially adversely affect our business, financial condition, liquidity, results of operations and cash flows. In 2025, the U.S.
Increases in union organizing activity and/or work stoppages could delay or reduce availability of products that we use in our business and increase our costs. Currently, less than 4% percent of our employees are covered by collective bargaining or other similar labor agreements.
Increases in union organizing activity and/or work stoppages could delay or reduce availability of products that we use in our business and increase our costs. Currently, less than 3% percent of our employees are covered by collective bargaining or other similar labor agreements.
Specifically, we had no outstanding borrowings on our Revolver, as hereinafter defined, as of December 31, 2024, but should we have a balance in the future, we would incur interest based on a rate that varies per the conditions set forth in our agreement.
Specifically, we had no outstanding borrowings on our Revolver, as hereinafter defined, as of December 31, 2025, but should we have a balance in the future, we would incur interest based on a rate that varies per the conditions set forth in our agreement.
If our ESG practices do not meet investor, lender, or other industry stakeholder expectations and standards, which continue to evolve, our access to capital may be negatively impacted based on an assessment of our ESG practices.
If our practices do not meet investor, lender, or other industry stakeholder expectations and standards, which continue to evolve, our access to capital may be negatively impacted based on an assessment of our sustainability practices.
Increasing scrutiny, changing expectations from stakeholders and government regulations regarding our ESG practices and disclosure may impose additional costs on us or expose us to new or additional risks.
Increasing scrutiny, changing expectations from stakeholders and government regulations regarding our sustainability practices and disclosure may impose additional costs on us or expose us to new or additional risks.
Our Term Loan, as hereinafter defined, bears interest at either Term SOFR or an alternative base rate plus a margin based on the type of rate applied. Our Term Loan bears interest at a variable rate, however interest rate hedges in place mitigate the risk of interest rate fluctuations associated with a portion of the outstanding debt balance.
Our Term Loan bears interest at either Term SOFR or an alternative base rate plus a margin based on the type of rate applied. Our Term Loan bears interest at a variable rate, however interest rate hedges in place mitigate the risk of interest rate fluctuations associated with a portion of the outstanding debt balance.
Our non-competition agreements may prove to be unenforceable which could have a material adverse effect on our retention of key employees and our customer relationships. We are dependent on attracting, training and retaining qualified employees while controlling labor and benefit costs. The labor market for the construction industry is competitive, including within the sector in which we operate.
Our no n-competition agreements may prove to be unenforceable which could have a material adverse effect on our retention of key employees and our customer relationships. 15 We are dependent on attracting, training and retaining qualified employees while controlling labor and benefit costs. The labor market for the construction industry is competitive, including within the sector in which we operate.
These sales, or the perception that these sales might occur, could depress the market price of our common stock or make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate. We have approximately 27.8 million shares of common stock outstanding as of December 31, 2024.
These sales, or the perception that these sales might occur, could depress the market price of our common stock or make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate. We have approximately 27.0 million shares of common stock outstanding as of December 31, 2025.
If our costs on aluminum rise, this may lead to a temporary decrease in margins, financial condition, operating results and cash flows for this business to the extent we are unable to pass along these price increases to our customers. 20 Our customers could purchase materials directly from manufacturers or other sources.
If our costs of aluminum continue to rise, this may lead to a temporary decrease in margins, financial condition, operating results and cash flows for this business to the extent we are unable to pass along these price increases to our customers. Our customers could purchase materials directly from manufacturers or other sources.
Historically, unexpected events, such as incapacitation of supplier facilities due to extreme weather or fire, have temporarily reduced manufacturing capacity and production. U.S. international trade policy can impact the suppliers of certain 14 materials we use in our business.
Historically, unexpected events, such as incapacitation of supplier facilities due to extreme weather or fire, have temporarily reduced manufacturing capacity and production. U.S. international trade and tariff policies can impact the suppliers of certain materials we use in our business.
Given these factors, we can provide no assurance that recent growth trends will continue, whether overall or in our markets. The economic downturn in 2007-2010 severely affected our business. Another reduction in housing demand in the future could have a similar effect on our business.
Given these factors, we can provide no assurance that our business will continue to grow, whether overall or in our markets. The economic downturn in 2007-2010 severely affected our business. Another reduction in housing demand in the future could have a similar effect on our business.
Investor advocacy groups, certain institutional investors, investment funds, lenders and other market participants, shareholders, and customers have focused on the ESG or “sustainability” practices of companies and have placed importance on the social cost of their investments.
Investor advocacy groups, certain institutional investors, investment funds, lenders and other market participants, shareholders, and customers have focused on the sustainability practices of companies and have placed importance on the social cost of their investments.
Any such limitations, in both the debt and equity markets, may negatively affect our ability to manage our liquidity, our ability to refinance existing debt, grow our businesses, implement our strategies, our results of operations, and the price of our common stock. Federal and state regulations are rapidly evolving in regards to ESG matters.
Any such limitations, in both the debt and equity markets, may negatively affect our ability to manage our liquidity, our ability to refinance existing debt, grow our businesses, implement our strategies, and our results of operations. Federal and state regulations are rapidly evolving in regards to sustainability matters.
As of December 31, 2024, approximately 1.8 million of the 2.1 million shares of common stock authorized for issuance under the 2023 Omnibus Incentive Plans were available for issuance. These shares will become eligible for sale in the public market in the future, subject to certain legal and contractual limitations. Installed Building Systems, Inc.
As of December 31, 2025, approximately 1.7 million of the 2.1 million shares of common stock authorized for issuance under the 2023 Omnibus Incentive Plan were available for issuance. These shares will become eligible for sale in the public market in the future, subject to certain legal and contractual limitations. Installed Building Systems, Inc.
Changes in immigration or work authorization laws may increase our obligations for compliance and oversight, which could subject us to additional costs and potential liability and make our hiring process more cumbersome, or reduce the availability of potential employees. We are subject to regulations of U.S.
Changes in immigration or work authorization laws may increase our obligations for compliance and oversight, which could subject us to additional costs and potential liability and make our hiring process more cumbersome, or reduce the availability of potential employees.
Our indebtedness exposes us to interest expense increases if interest rates increase. If interest rates increase, our debt service obligations on our variable rate indebtedness, if any exists at the balance sheet date, would increase even though the amount borrowed would remain the same, and our net income and cash flows would correspondingly decrease.
If interest rates increase, our debt service obligations on our variable rate indebtedness, if any exists at the balance sheet date, would increase even though the amount borrowed would remain the same, and our net income and cash flows would correspondingly decrease.
If we identify material weaknesses in our internal controls over financial reporting or are unable to comply with the requirements of Section 404 or are unable to assert that our internal controls over financial reporting are effective, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could be negatively affected, and we could become subject to investigations by the SEC or other regulatory authorities, which could require additional financial and management resources. 27 Future sales of our common stock, or the perception in the public markets that these sales may occur, may depress our stock price.
If we identify material weaknesses in our internal controls over financial reporting or are unable to comply with the requirements of Section 404 or are unable to assert that our internal controls over financial reporting are effective, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could be negatively affected, and we could become subject to investigations by the SEC or other regulatory authorities, which could require additional financial and management resources.
If the value of goodwill or other intangible assets in this or other reporting units is impaired, our earnings and stockholders’ equity would be adversely affected. As of December 31, 2024, we had goodwill and other intangible assets in an aggregate amount of $703.1 million, or approximately 34% of our total assets.
If the value of goodwill or other intangible assets in this or other reporting units is impaired, our earnings and stockholders’ equity would be adversely affected. As of December 31, 2025, we had goodwill and other intangible assets in an aggregate amount of $711.9 million, or approximately 34% of our total assets.
The extent of these increases would 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.
The extent of these increases would 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. On February 20, 2026, the U.S.
Our board of directors approves any quarterly or annual cash dividend. However, part of our business strategy includes retaining our future earnings, if any, in order to reinvest in the development and growth of our business, including our continued growth by acquisition strategy, and, therefore, we may reduce, suspend or eliminate dividend payments in the future.
However, part of our business strategy includes retaining our future earnings, if any, in order to reinvest in the development and growth of our business, including our continued growth by acquisition strategy, and, therefore, we may reduce, suspend or eliminate dividend payments in the future.
According to Dodge Data & Analytics, commercial building starts in 2025, measured by investment dollars, are expected to increase 6% from 2024 while institutional building starts (a subset of the nonresidential construction market in which we participate) are expected to increase 4% from 2024.
According to Dodge Data & Analytics, commercial building starts in 2026, measured by investment dollars, are expected to increase 3% from 2025 while institutional building starts (another subset of the nonresidential construction market in which we participate) are expected to increase 6% from 2025.
Advancements in artificial intelligence could be used by threat actors to attack our systems by creating increasingly effective phishing emails, false images or voice cloning to access our data.
Advancements in artificial intelligence could be used by threat actors to attack our systems in various ways including, but not limited to, creating increasingly effective phishing emails, false images or voice cloning to access our data.
Jeff Edwards has significant ownership of our common stock and may have interests that conflict with those of our other stockholders. As of December 31, 2024, Jeff Edwards beneficially owned approximately 15.7% of our outstanding common stock.
Jeff Edwards has significant ownership of our common stock and may have interests that conflict with those of our other stockholders. As of December 31, 2025, Jeff Edwards beneficially owned approximately 14.5% of our outstanding common stock.
Our degree of leverage and level of interest expense may have important consequences, including: • our leverage may place us at a competitive disadvantage as compared with our less leveraged competitors and make us more vulnerable in the event of a downturn in general economic conditions or in any of our businesses; • our flexibility in planning for, or reacting to, changes in our businesses and the industries in which we operate may be limited; • a substantial portion of our cash flow from operations will be dedicated to the payment of interest and principal on our indebtedness, thereby reducing the funds available to us for operations, capital expenditures, acquisitions, future business opportunities or obligations to pay rent in respect of our operating leases; and Our ability to service our debt and other obligations will depend on our future operating performance, which will be affected by prevailing economic conditions and financial, business and other factors, many of which are beyond our control.
Our degree of leverage and level of interest expense may have important consequences, including: • our leverage may place us at a competitive disadvantage as compared with our less leveraged competitors and make us more vulnerable in the event of a downturn in general economic conditions or in any of our businesses; • our flexibility in planning for, or reacting to, changes in our businesses and the industries in which we operate may be limited; • a substantial portion of our cash flow from operations will be dedicated to the payment of interest and principal on our indebtedness, thereby reducing the funds available to us for operations, capital expenditures, acquisitions, future business opportunities or obligations to pay rent in respect of our operating leases; and • our operations are restricted by our debt instruments, which contain certain financial and operating covenants, and those restrictions may limit, among other things, our ability to borrow money in the future for working capital, capital expenditures, acquisitions, rent expense or other purposes.
The value of our common stock following the completion of an acquisition could be adversely affected if we are unable to realize the expected benefits from the acquisition on a timely basis or at all.
We may also be unable to achieve expected improvements or achievements in businesses that we acquire. The value of our common stock following the completion of an acquisition could be adversely affected if we are unable to realize the expected benefits from the acquisition on a timely basis or at all.
Our ability to obtain performance bonds and licensing bonds primarily depends on our credit rating, capitalization, working capital, past performance, management expertise and certain external factors, including the overall capacity of the surety market and the underwriting practices of surety bond issuers.
In addition, the commercial construction end market also requires higher levels of performance bonding. Our ability to obtain performance bonds and licensing bonds primarily depends on our credit rating, capitalization, working capital, past performance, management expertise and certain external factors, including the overall capacity of the surety market and the underwriting practices of surety bond issuers.
Regulatory restrictions and industry standards may require us to alter our installation processes and our sourcing, increase our operating expenses and limit the availability of suitable building lots for our customers, any of which could negatively affect our business, financial condition and results of operations.
Regulatory restrictions and industry standards may require us to alter our installation processes and our sourcing, increase our operating expenses and limit the availability of suitable building lots for our customers, any of which could negatively affect our business, financial condition and results of operations. 23 Changes in laws, regulations or rules, or a failure to comply with any laws, regulations or rules, may adversely affect our business.
In particular, we are required to comply with certain SEC, NYSE and other legal or regulatory requirements in the U.S. Compliance with, and monitoring of, applicable laws, regulations and rules may be difficult, time consuming and costly.
We are subject to laws, regulations and rules enacted by national, regional and local governments and the New York Stock Exchange ("NYSE"). In particular, we are required to comply with certain SEC, NYSE and other legal or regulatory requirements in the U.S. Compliance with, and monitoring of, applicable laws, regulations and rules may be difficult, time consuming and costly.
We could also incur additional costs and require additional resources to monitor, report, and comply with various ESG practices. Also, our failure, or perceived failure, to meet the standards or targets set forth in the sustainability report could negatively impact our reputation and stock price, employee retention, and the willingness of our customers and suppliers to do business with us.
Also, our failure, or perceived failure, to meet the standards or targets set forth in the sustainability report could negatively impact our reputation and stock price, employee retention, and the willingness of our customers and suppliers to do business with us.
For example, one of our distribution businesses uses aluminum in many of its products. Aluminum commodity prices have experienced volatile fluctuations in the recent past which has reduced our selling prices while related inventory costs remained high.
For example, one of our distribution businesses uses aluminum in many of its products. Aluminum commodity prices have experienced volatile fluctuations in the recent past which has reduced our selling prices while related inventory costs remained high. Aluminum prices have experienced significant increases as the tariffs imposed on imported aluminum increased to 50% in 2025.
Any delay or prevention of a change of control transaction or changes in our board of directors and management could deter potential acquirers or prevent the completion of a transaction in which our stockholders could receive a substantial premium over the then-current market price for their shares of our common stock. 28 We pay dividends to holders of our common stock, but may reduce, suspend, or eliminate dividend payments in the future.
Any delay or prevention of a change of control transaction or changes in our board of directors and management could deter potential acquirers or prevent the completion of a transaction in which our stockholders could receive a substantial premium over the then-current market price for their shares of our common stock.
We maintain our Lead with Safety program to help reduce jobsite, warehouse and plant injuries. Product liability, workmanship warranty, casualty, negligence, construction defect, breach of contract and other claims and legal proceedings can be expensive to defend and can divert the attention of management and other personnel for significant periods of time, regardless of the ultimate outcome.
Product liability, workmanship warranty, casualty, negligence, construction defect, breach of contract and other claims and legal proceedings can be expensive to defend and can divert the attention of management and other personnel for significant periods of time, regardless of the ultimate outcome.
The impacts of climate change may subject us to increased costs, regulations, reporting requirements, standards or expectations regarding the environmental impacts of our business. Most, if not all, of our locations may be vulnerable to the adverse effects of climate change. For example, we lease facilities in regions that experience extreme weather conditions.
The impacts of climate change may subject us to increased costs, regulations, reporting requirements, standards or expectations regarding the environmental impacts of our business. Most, if not all, of our locations may be vulnerable to the adverse effects of climate change.
While these threats have not had a material impact on our business or operations to date, if such an event occurred, it could have a material adverse effect on our business, financial condition, results of operations and cash flows. 18 Terrorist attacks or acts of war against the United States or increased domestic or international instability could have an adverse effect on our operations.
While these threats have not had a material impact on our business or operations to date, if such an event occurred, it could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Adverse developments in the war on terrorism, terrorist attacks against the United States or any outbreak or escalation of hostilities between the United States and any foreign power may cause disruption to the economy.
Terrorist attacks or acts of war against the United States or increased domestic or international instability could have an adverse effect on our operations. Adverse developments in the war on terrorism, terrorist attacks against the United States or any outbreak or escalation of hostilities between the United States and any foreign power may cause disruption to the economy.
The Federal Reserve began easing monetary policy in September 2024, however mortgage rates remained elevated due to other economic factors such as treasury yields and sticky inflation concerns. According to the January 2025 Fannie Mae forecast, 2025 housing starts are projected to decrease slightly to 1.32 million.
The Federal Reserve began easing monetary policy in September 2024 after raising the federal funds rates in 2022 and 2023, however, mortgage rates have remained elevated due to other economic factors such as treasury yields and sticky inflation concerns. 2026 housing starts are projected to remain relatively stable at 1.31 million starts according to the January 2026 Fannie Mae forecast.
In addition, the operating results of an individual branch may differ from those of another branch for a variety of reasons, including market size, management practices, competitive landscape, building codes and other regulatory requirements, state and local taxes and local economic conditions. As a result, certain of our branches may experience higher or lower levels of growth than other branches.
In addition, the operating results of an individual branch may differ from those of another branch for a variety of reasons, including market size, end markets served, management practices, competitive landscape, building codes and other regulatory requirements, state and local taxes and local economic conditions.
Furthermore, immigration laws have been an area of considerable political focus in recent years, and the U.S. Congress, Department of Homeland Security and the Executive Branch of the U.S. government from time to time consider or implement changes to federal immigration laws, regulations or enforcement programs.
Congress, Department of Homeland Security and the Executive Branch of the U.S. government from time to time consider or implement changes to federal immigration laws, regulations or enforcement programs.
For example, the COVID-19 pandemic affected the global economy and caused our business significant supply chain disruptions, increased material costs and caused a slowdown in commercial construction demand.
Pandemics have, including in the recent past, affected the global economy and caused our business significant supply chain disruptions, increased material costs and caused a slowdown in commercial construction demand.
In addition, expenditures may be required in the future as a result of releases of, or exposure to, hazardous or toxic substances or petroleum products, the discovery of currently unknown environmental conditions or changes in environmental laws and regulations or their interpretation or enforcement and, in certain instances, such expenditures may be material.
In addition, expenditures may be required in the future as a result of releases of, or exposure to, hazardous or toxic substances or petroleum products, the discovery of currently unknown environmental conditions or changes in environmental laws and regulations or their interpretation or enforcement and, in certain instances, such expenditures may be material. 24 RISKS RELATED TO OUR INDEBTEDNESS We have debt principal and interest payment requirements that may restrict our future operations and impair our ability to meet our obligations.
Despite providing a benefit to the environment by making structures more energy efficient, certain types of insulation, particularly spray foam applications, require our employees to handle potentially hazardous or toxic substances.
Our primary manufacturing facility is also subject to additional laws and regulations which may increase our exposure to environmental liabilities. Despite providing a benefit to the environment by making structures more energy efficient, certain types of insulation, particularly spray foam applications, require our employees to handle potentially hazardous or toxic substances.
Provisions of our charter documents and Delaware law could delay, discourage or prevent an acquisition of us, even if the acquisition would be beneficial to our stockholders, and could make it more difficult for our stockholders to change our management.
In addition, under our amended and restated certificate of incorporation, Jeff Edwards is permitted to pursue corporate opportunities for himself, rather than for us . 28 Provisions of our charter documents and Delaware law could delay, discourage or prevent an acquisition of us, even if the acquisition would be beneficial to our stockholders, and could make it more difficult for our stockholders to change our management.
Our transportation operations, which we depend on to transport materials from our locations to job sites or customers, are subject to the regulatory jurisdiction of the DOT. The DOT has broad administrative powers with respect to our transportation operations.
This could raise home and/or commercial building prices which would reduce affordability and negatively impact demand for our services and products. Our transportation operations, which we depend on to transport materials from our locations to job sites or customers, are subject to the regulatory jurisdiction of the DOT. The DOT has broad administrative powers with respect to our transportation operations.
Census Bureau reported an estimated 1.37 million non-seasonally adjusted total housing starts, down from 1.42 million starts in 2023. Mortgage interest rates are affected by the Federal Reserve's monetary policies and significantly impact the affordability of housing. The Federal Reserve raised the federal funds rate significantly in 2022 and 2023 to stabilize inflation. This contributed to higher mortgage interest rates.
Census Bureau reported an estimated 1.36 million non-seasonally adjusted total housing starts, as compared to 1.37 million starts in 2024. Mortgage interest rates are indirectly affected by the Federal Reserve's monetary policies and significantly impact the affordability of housing.
Restrictions in our existing credit facilities, senior notes, and any future facilities or any other indebtedness we may incur in the future, limit our ability to take certain actions and could adversely affect our business, financial condition, results of operations, and the value of our common stock.
Restrictions in our existing credit facilities, senior notes, and any future facilities or any other indebtedness we may incur in the future, limit our ability to take certain actions and breaches thereof could impair our liquidity.
Therefore, our overall financial performance and results of operations may not be indicative of the performance and results of operations of any individual branch. 16 In the ordinary course of business, we are required to obtain performance bonds and licensing bonds, the unavailability of which could adversely affect our business, financial condition, results of operations and/or cash flows.
In the ordinary course of business, we are required to obtain performance bonds and licensing bonds, the unavailability of which could adversely affect our business, financial condition, results of operations and/or cash flows. We are often required to obtain performance bonds and licensing bonds to secure our performance under certain contracts and other arrangements.
Because we operate our business through highly dispersed locations across the United States, our operations may be materially adversely affected by inconsistent practices and the operating results of individual branches may vary.
If we are unable to increase the selling price of our products to our customers to cover any increases in fuel costs, our net income may be adversely affected. 16 Because we operate our business through highly dispersed locations across the United States, our operations may be materially adversely affected by inconsistent practices and the operating results of individual branches may vary.
We must attract, train and retain a large number of qualified employees to install our products while controlling related labor costs. We face significant competition for these employees from our industry as well as from other industries. Tighter labor markets may make it even more difficult for us to hire and retain installers and control labor costs.
We must attract, train and retain a large number of qualified employees to install our products while controlling related labor costs. We face significant competition for these employees from our industry as well as from other industries. Immigration policies could further reduce the availability of labor from other trades.
We currently have two long-term agreements with suppliers and may enter into other short- or long-term supply agreements at any time.
We do not typically enter into long-term agreements with our suppliers but have done so from time to time. We currently have three long-term agreements with suppliers and may enter into other short- or long-term supply agreements at any 14 time.
If participants in these industries postpone spending in response to tighter credit, negative financial news and declines in income or asset values or other factors, this could have a material negative effect on the demand for our products and services and on our business, financial condition and results of operations. 13 A decline in the economy, a deterioration in expectations regarding the housing market or the commercial construction market, a failure to integrate acquisitions, especially within our distribution operations, and/or a general decline in operations or financial results of any of our segments could cause us to record significant non-cash impairment charges, which could negatively affect our earnings and reduce stockholders’ equity.
A decline in the economy, a deterioration in expectations regarding the housing market or the commercial construction market, a failure to integrate acquisitions, especially within our distribution operations, and/or a general decline in operations or financial results of any of our segments could cause us to record significant non-cash impairment charges, which could negatively affect our earnings and reduce stockholders’ equity.
The market price of our common stock could decline significantly as a result of sales of a large number of shares of our common stock.
Future sales of our common stock, or the perception in the public markets that these sales may occur, may depress our stock price. The market price of our common stock could decline significantly as a result of sales of a large number of shares of our common stock.
These factors and any other challenges we encounter could adversely affect our margins, financial condition, operating results and cash flows. As of December 31, 2024, our estimated backlog associated with the commercial end market was approximately $126.3 million.
Our expansion into this market may include opening new branches that have higher start-up costs compared to our acquired branches. These factors and any other challenges we encounter could adversely affect our margins, financial condition, operating results and cash flows. As of December 31, 2025, our estimated backlog associated with the commercial end market was approximately $162.9 million.
If this market does not grow in the future, the growth potential of our business, and our financial condition, results of operations and cash flows could be adversely affected. The commercial construction market, as measured by investment dollars, increased 7% in 2024 from 2023 per the U.S. Census Bureau.
If this market does not grow in the future, the growth potential of our business, and our financial condition, results of operations and cash flows could be adversely affected.
In addition, health care coverage requirements, changes in workplace regulations and any future legislation could cause us to experience higher health care and labor costs in the future. Additionally, periods of economic inflation can cause wage expectations to increase and we may have difficulty retaining employees if we do not, or cannot, meet these expectations.
Additionally, periods of economic inflation can cause wage expectations to increase and we may have difficulty retaining employees if we do not, or cannot, meet these expectations.
For example, we are subject to increased ESG regulation, including California Senate Bills 253, 261 and 219 that go into effect in 2026 and mandate certain climate disclosure and reporting. 23 These laws, regulations or rules and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our business, financial condition, results of operations and cash flows.
These laws, regulations or rules and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our business, financial condition, results of operations and cash flows.
These laws and regulations will increase our ongoing costs of compliance. We have released our ESG report annually since 2021. The report includes our policies and practices on a variety of social and environmental matters. It is possible that stakeholders may not be satisfied with our ESG practices or the speed of their adoption.
The report includes our policies and practices on a variety of social and environmental matters. It is possible that stakeholders may not be satisfied with our sustainability practices or the speed of their adoption. We could also incur additional costs and require additional resources to monitor, report, and comply with various sustainability practices.
New types of materials or changes in requirements in our existing markets could require us to develop relationships with unfamiliar vendors and suppliers and we may not be able to secure commercially advantageous pricing. Product shortages or the loss of key suppliers could affect our business, financial condition, results of operations and cash flows.
Competitors could use artificial intelligence to develop new products or methods of enhancing internal operations to gain advantages if we are unable to develop similar changes. New types of materials or changes in requirements in our existing markets could require us to develop relationships with unfamiliar vendors and suppliers and we may not be able to secure commercially advantageous pricing.
In addition, during prior economic downturns in the housing industry, manufacturers have reduced capacity by closing plants and production lines within plants. Even if such capacity reductions are not permanent, there may be a delay in manufacturers’ ability to increase capacity in times of rising demand.
Even if such capacity reductions are not permanent, there may be a delay in manufacturers’ ability to increase capacity in times of rising demand.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeAs discussed in more detail below, we have policies and procedures in place as part of our overall risk management strategy to, among other things, monitor our systems, train and raise awareness of cybersecurity threats amongst employees, and detect intrusions on our systems.
Biggest changeAs discussed in more detail below, we have policies and procedures in place as part of our overall risk management strategy to, among other things, monitor our systems, train and raise awareness of cybersecurity threats amongst employees, and detect intrusions on our systems. 29 Notwithstanding our efforts at cybersecurity, no system of prevention is impenetrable, and we cannot guarantee that we will be successful in preventing or mitigating a cybersecurity incident that could have a material adverse effect on the Company.
Our Vice President of Internal Audit also provides the Audit Committee with an assessment of any material changes to cybersecurity risks and controls as a result of cybersecurity threats on at least a semi-annual basis. Management’s Role in Assessing and Managing Material Risks from Cybersecurity Threats Management is responsible for assessing and managing our cybersecurity risk management program.
Our Vice President of Internal 30 Audit also provides the Audit Committee with an assessment of any material changes to cybersecurity risks and controls as a result of cybersecurity threats on at least a semi-annual basis. Management’s Role in Assessing and Managing Material Risks from Cybersecurity Threats Management is responsible for assessing and managing our cybersecurity risk management program.
This committee is comprised of a cross functional team of various senior members of management including the areas of Finance, Accounting, Legal, IT Security, and Risk. If a cybersecurity incident is deemed to have the potential for a material impact on the Company, our Incident Response, Reporting and Management Policy dictates procedures for promptly briefing the Audit Committee.
This committee is comprised of a cross functional team of various senior members of management including the areas of Finance, Accounting, Legal, IT, IS and Risk. If a cybersecurity incident is deemed to have the potential for a material impact on the Company, our Incident Response, Reporting and Management Policy dictates procedures for promptly briefing the Audit Committee.
The CIO also is responsible for reporting on cybersecurity matters to the Board. IT and/or IS inform the CIO concerning cybersecurity risks and events, including any mitigation and remediation efforts. Cybersecurity incidents are escalated to an incident response team (“IRT”), which is headed by the CIO. The IRT is responsible for overseeing our incident response strategy, including remediation.
The CIO also is responsible for reporting on cybersecurity matters to the Board. IT and/or IS inform the CIO concerning cybersecurity risks and events, including any mitigation and remediation efforts. Cybersecurity incidents are escalated to the Incident Response Team (“IRT”), which is headed by the CIO. The IRT is responsible for overseeing our incident response strategy, including remediation.
For ongoing events, those responsible for investigating the incident are required to continuously update the IRT and the CIO until the event is considered to be resolved. Significant 30 cybersecurity incidents are referred to a committee responsible for evaluating whether the incident is material using criteria based on our ERM program.
For ongoing events, those responsible for investigating the incident are required to continuously update the IRT and the CIO until the event is considered to be resolved. Significant cybersecurity incidents are referred to a committee responsible for evaluating whether the incident is material using criteria based on our ERM program.
Senior leadership, including our CIO, briefs the Board of Directors and the Audit Committee on cybersecurity risks and the effectiveness of our cybersecurity program as part of updates on our overall ERM program.
Senior leadership, including our CIO, briefs the Board and the Audit Committee on cybersecurity risks and the effectiveness of our cybersecurity program as part of updates on our overall ERM program.
This oversight is facilitated primarily through the Audit Committee of the Board of Directors, which is responsible for oversight of our cybersecurity risk management processes.
This oversight is facilitated primarily through the Audit Committee of the Board, which is responsible for oversight of our cybersecurity risk management processes.
As of the date of this report, we are not aware of any cybersecurity incident or threat that has materially affected or is reasonably likely to materially affect the Company, including our business strategy, results of operations, or financial condition. However, future cybersecurity incidents could materially affect our strategy, results of operations or financial condition. See Item 1A.
From time to time, we have experienced cybersecurity incidents in the normal course of our business. As of the date of this report, we are not aware of any cybersecurity incident or threat that has materially affected or is reasonably likely to materially affect the Company, including our business strategy, results of operations, or financial condition.
Risk Factors for additional information on how risks could materially affect the Company. CYBERSECURITY RISK MANAGEMENT AND STRATEGY As part of our Enterprise Risk Management (“ERM”) program, we maintain processes to assess, identify, manage, mitigate, and respond to material risks from cybersecurity threats.
CYBERSECURITY RISK MANAGEMENT AND STRATEGY As part of our Enterprise Risk Management (“ERM”) program, we maintain processes to assess, identify, manage, mitigate, and respond to material risks from cybersecurity threats.
Our cybersecurity program, where appropriate, aligns with the Center of Internet Security (“CIS”) Control framework, which itself is modeled after the National Institute of Standards and Technology's ("NIST") Cybersecurity Framework (“CSF”). 29 Our policies and procedures concerning cybersecurity matters include processes to safeguard our information systems, monitor these systems, protect the confidentiality and integrity of our data, detect intrusions into our systems, and respond to cybersecurity incidents.
Our cybersecurity program, where appropriate, aligns with the Center of Internet Security (“CIS”) Control framework, which itself is modeled after the National Institute of Standards and Technology's ("NIST") Cybersecurity Framework (“CSF”).
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Notwithstanding our efforts at cybersecurity, no system of prevention is impenetrable, and we cannot guarantee that we will be successful in preventing or mitigating a cybersecurity incident that could have a material adverse effect on us. From time to time, we have experienced cybersecurity incidents in the normal course of our business.
Added
However, future cybersecurity incidents could materially affect our strategy, results of operations or financial condition. See Item 1A. Risk Factors for additional information on how risks could materially affect the Company.
Added
Our policies and procedures concerning cybersecurity matters include processes to safeguard our information systems, monitor these systems, protect the confidentiality and integrity of our data, detect intrusions into our systems, and respond to cybersecurity incidents.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeState Number of Locations Approximate Total Square Footage State Number of Locations Approximate Total Square Footage Alabama 2 24,250 Nevada 2 20,310 Arizona 3 54,631 New Hampshire 10 81,365 California 28 305,841 New Jersey 8 128,037 Colorado 13 175,148 New York 9 101,430 Connecticut 4 48,357 North Carolina 19 330,574 Delaware 5 53,575 North Dakota 2 9,752 Florida 30 306,033 Ohio 16 562,155 Georgia 12 192,316 Oklahoma 5 48,743 Idaho 3 43,000 Oregon 2 32,928 Illinois 8 128,891 Pennsylvania 7 108,909 Indiana 12 255,319 Rhode Island 4 31,654 Kansas 2 74,206 South Carolina 8 120,739 Kentucky 4 47,350 South Dakota 3 59,932 Louisiana 2 19,535 Tennessee 8 184,592 Maine 3 51,860 Texas 19 399,916 Maryland 5 65,110 Utah 5 123,309 Massachusetts 5 51,303 Vermont 1 31,020 Michigan 3 42,192 Virginia 7 97,582 Minnesota 10 250,718 Washington 13 190,616 Missouri 2 17,536 West Virginia 1 2,080 Montana 5 46,740 Wisconsin 9 208,808 Nebraska 2 23,241 Our Fleet As of December 31, 2024, our fleet consisted of approximately 6,300 total vehicles that we either leased or owned, including approximately 6,000 installation vehicles that our installers use to deliver and install products from our locations to job sites, and approximately 300 other vehicles that are utilized for various purposes, primarily by our distribution operations, sales staff, branch managers and various senior management personnel.
Biggest changeState Number of Locations Approximate Total Square Footage State Number of Locations Approximate Total Square Footage Alabama 2 24,250 Nebraska 2 23,241 Arizona 3 54,631 Nevada 3 20,310 California 30 324,719 New Hampshire 10 81,365 Colorado 14 175,148 New Jersey 8 128,037 Connecticut 3 47,057 New York 10 102,930 Delaware 5 53,575 North Carolina 21 475,109 Florida 30 304,065 North Dakota 2 9,752 Georgia 13 198,231 Ohio 15 469,674 Idaho 3 43,000 Oklahoma 5 50,523 Illinois 8 128,891 Oregon 2 32,928 Indiana 13 269,371 Pennsylvania 6 101,909 Kansas 2 74,206 Rhode Island 5 35,188 Kentucky 2 24,000 South Carolina 9 129,006 Louisiana 2 25,535 South Dakota 4 77,713 Maine 2 46,530 Tennessee 8 235,317 Maryland 5 65,110 Texas 17 365,981 Massachusetts 5 51,303 Utah 5 123,309 Michigan 3 42,192 Vermont 2 37,320 Minnesota 11 292,299 Virginia 7 97,582 Missouri 2 17,536 Washington 13 196,816 Montana 4 42,376 Wisconsin 11 212,327 Our Fleet As of December 31, 2025, our fleet consisted of approximately 6,100 total vehicles that we either leased or owned, including approximately 5,800 installation vehicles that our installers use to deliver and install products from our locations to job sites, and approximately 300 other vehicles that are utilized for various purposes, primarily by our distribution operations, sales staff, branch managers and various senior management personnel.
Item 2. Properties Real Property We lease office and warehouse space in 43 states, including our corporate office in Columbus, Ohio. Our leases are typically short in duration with customary extensions at our option. We believe suitable alternative space is available in all of our markets. We also own our cellulose manufacturing facility in Bucyrus, Ohio.
Item 2. Properties Real Property We lease office and warehouse space in 42 states, including our corporate office in Columbus, Ohio. Our leases are typically short in duration with customary extensions at our option. We believe suitable alternative space is available in all of our markets.
For additional information, see Note 8, Long-term Debt, and Note 17, Commitments and Contingencies, in Part II, Item 8, Financial Statements and Supplementary Data, of this Form 10-K.
For additional information on our fleet financing, see Note 8, Long-term Debt in Part II, Item 8, Financial Statements and Supplementary Data, of this Form 10-K.
We believe that our facilities are suitable and adequate for present purposes, and that the productive capacity in such facilities is substantially being utilized. The table below summarizes our locations as of December 31, 2024.
We also own one of our cellulose manufacturing facilities that is located in Bucyrus, Ohio. We believe that our facilities are suitable and adequate for present purposes, and that the productive capacity in such facilities is substantially being utilized. The table below summarizes our locations as of December 31, 2025.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe graph assumes investments of $100 in our common stock and in each of the four indices and the reinvestment of dividends for the last five fiscal years through December 31, 2024. 12/31/2019 12/31/2020 12/31/2021 12/30/2022 12/29/2023 12/31/2024 IBP 100 148 205 129 280 271 Russell 2000 100 120 138 109 128 143 S&P 500 Industrials 100 111 134 127 150 176 S&P 600 Building Products 100 127 159 132 200 225 33 Issuer Purchases of Equity Securities The following table shows the stock repurchase activity, including shares surrendered by employees in connection with the vesting of restricted stock awards, for the three months ended December 31, 2024: Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased under the Plans or Programs (1) October 1 - 31, 2024 — $ — — $ — November 1 - 30, 2024 250,000 206.50 250,000 — December 1 - 31, 2024 132,924 205.04 132,924 154.7 million 382,924 $ 205.99 382,924 $ 154.7 million (1 ) On February 22, 2024, we announced that our board of directors authorized a stock repurchase program that allows for the repurchase of up to $300.0 million of our outstanding common stock.
Biggest changeThe graph assumes investments of $100 in our common stock and in each of the four indices and the reinvestment of dividends for the last five fiscal years through December 31, 2025. 12/31/2020 12/31/2021 12/30/2022 12/29/2023 12/31/2024 12/31/2025 IBP 100 138 87 189 183 276 Russell 2000 100 115 91 107 119 134 S&P 500 Industrials 100 121 114 135 158 189 S&P 600 Building Products 100 125 104 137 177 193 33 Issuer Purchases of Equity Securities The following table shows the stock repurchase activity, including shares surrendered by employees in connection with the vesting of restricted stock awards, for the three months ended December 31, 2025: Total Number of Shares Purchased (2) (3) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased under the Plans or Programs (1) October 1 - October 31, 2025 32 $ 240.32 — $ 365.0 million November 1 - November 30, 2025 150,006 250.96 150,000 327.4 million December 1 - December 31, 2025 — — — 327.4 million 150,038 $ 250.96 150,000 $ 327.4 million (1 ) O ur board of directors authorized a stock repurchase program that we announced on February 27, 2025 that allows for the repurchase of up to $500.0 million of our outstanding common stock throug h March 1, 2026.
In addition to the quarterly cash dividend, our board of directors has approved an annual variable dividend payable since 2022, with the 2025 dividend payable on March 31, 2025 at a rate of $1.70 per common share.
In addition to the quarterly cash dividend, our board of directors has approved an annual variable dividend payable since 2022, with the 2026 dividend payable on March 31, 2026 at a rate of $1.80 per common share.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information for Common Stock Our common stock is traded on the NYSE under the symbol “IBP.” Holders of Record As of February 20, 2025, there were 1,430 h older s of record of our common stock, one of which was Cede & Co., which is the holder of shares held through the Depository Trust Company.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information for Common Stock Our common stock is traded on the NYSE under the symbol “IBP.” Holders of Record As of February 19, 2026, there wer e 1,547 h older s of record of our common stock, one of which was Cede & Co., which is the holder of shares held through the Depository Trust Company.
On February 27, 2025, we announced that our board of directors authorized a new stock repurchase program that allows for the repurchase of up to $500.0 million of our outstanding common stock . The new program replaces the previous program and is in effect through March 1, 2026.
We repurchase d $172.6 million o f common stock under our stock repurchase program during the year ended December 31, 2025. On February 26, 2026, we announced that our board of directors authorized a new stock repurchase program that allows for the repurchase of up to $500.0 million of our outstanding common stock.
For further information about our stock repurchase programs, see Note 13, Stockholders' Equity, in Part II, Item 8, Financial Statements and Supplementary Data, of this Form 10-K. Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities During 2024, we did not issue or sell any unregistered equity securities. Item 6. [Reserved] 34
The new program replaces the previous program and is in effect through March 1, 2027. For further information about our stock repurchase programs, see Note 13, Stockholders' Equity, in Part II, Item 8, Financial Statements and Supplementary Data, of this Form 10-K.
Removed
The new program replaced the previous program and is in effect through March 1, 2025. We repurchase d $145.3 million o f common stock under our stock repurchase program during the year ended December 31, 2024.
Added
(2 ) Includes 150 thousand shares purchased from PJAM IBP Holdings, Inc. as part of the Company's stock repurchase program in a privately negotiated transaction for an aggregate price of $37.6 million, or $250.96 per share. For additional information, see Part II, Item 8, Financial Statements and Supplementary Data, Note 16, Related Party Transactions.
Added
(3 ) Includes 38 shares surrendered to the Company by employees to satisfy tax withholding obligations arising in connection with the vesting of 108 shares of restricted stock awarded under our 2014 and 2023 Omnibus Incentive Plans. Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities During 2025, we did not issue or sell any unregistered equity securities.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

106 edited+23 added−15 removed66 unchanged
Biggest changeIncome Tax Provision Income tax provision and effective tax rates for the years ended December 31, 2024 , 2023 and 2022 were as follows (in millions): 2024 2023 2022 Income tax provision $ 89.8 $ 89.4 $ 79.9 Effective tax rate 25.9 % 26.8 % 26.3 % During the years ended December 31, 2024 and 2023 , our tax rate was unfavorably impacted by certain expenses not being deductible for income tax reporting purposes. 39 Other comprehensive income (loss), net of tax Other comprehensiv e income (loss), net of tax for the years ended December 31, 2024 , 2023 and 2022 were as follows (in millions): 2024 2023 2022 Unrealized gain (loss) on cash flow hedge, net of taxes $ 1.3 $ (6.9) $ 40.8 During the year ended December 31, 2024, we recorded unrealized losses, net of taxes, of $2.0 million on our cash flow hedges primarily due to the market's expectations for interest rates to decline in the future which offset the previous unrealized gains on our existing and forward swaps.
Biggest changeOther comprehensive (loss) income, net of tax Other comprehensiv e (loss) income, net of tax for the years ended December 31, 2025 , 2024 and 2023 were as follows (in millions): 2025 2024 2023 Unrealized (loss) gain on cash flow hedge, net of taxes $ (12.9) $ 1.3 $ (6.9) During the year ended December 31, 2025, we recorded unrealized losses, net of taxes, of $14.0 million on our cash flow hedges primarily due to the market's expectations for interest rates to decline in the future which offset the previous unrealized gains on our swaps.
Climate change and/or adverse weather conditions such as unusually prolonged cold conditions, rain, blizzards, hurricanes, earthquakes, 41 fires, or other natural disasters could accelerate, delay or halt construction or installation activity or impact our suppliers. The impacts of climate change may subject us to increased costs, regulations, reporting requirements, standards or expectations regarding the environmental impacts of our business.
Climate change and/or adverse weather conditions such as unusually prolonged cold conditions, rain, blizzards, hurricanes, earthquakes, fires, or other natural disasters could accelerate, delay or halt construction or installation activity or impact our suppliers. The impacts of climate change may subject us to increased costs, regulations, reporting requirements, standards or expectations regarding the environmental impacts of our business.
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. There have been housing shortages in some of the markets we serve and the backlog in our multi-family business demonstrates continued need for multi-family housing.
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. There have been chronic housing shortages in some of the markets we serve and the backlog in our multi-family business demonstrates continued need for multi-family housing.
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 more than 250 branch locations. 94% of our net revenue comes from the service-based installation of these products across all of our end markets and forms our Installation operating segment and single reportable segment.
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 more than 250 branch locations. 93% of our net revenue comes from the service-based installation of these products across all of our end markets and forms our Installation operating segment and single reportable segment.
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 years ended December 31, 2024, 2023 and 2022.
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 years ended December 31, 2025, 2024 and 2023.
In addition, we expect to use cash and cash equivalents to acquire various companies with at least $100.0 million in aggregate net revenue each fiscal year. The amount of cash paid for an acquisition is dependent on various factors, including the size and determined value of the business being acquired.
In addition, we expect to use cash and cash equivalents to acquire various companies with a goal of at least $100.0 million in aggregate net revenue each fiscal year. The amount of cash paid for an acquisition is dependent on various factors, including the size and determined value of the business being acquired.
Our cost estimation process is based on the knowledge, significant experience and judgement of project management, finance professionals and operational management to assess a variety of factors to determine revenues on uncompleted contracts. Such factors include historical performance, costs of materials and labor, change orders and the nature of the work to be performed.
Our cost estimation process is based on the knowledge, significant experience and judgment of project management, finance professionals and operational management to assess a variety of factors to determine revenues on uncompleted contracts. Such factors include historical performance, costs of materials and labor, change orders and the nature of the work to be performed.
KEY FACTORS AFFECTING OUR OPERATING RESULTS Inflation, Housing Affordability and Mortgage Interest Rates Inflation affected the economy as a whole in 2022 but began moderating in 2023 as the Federal Reserve took actions to stabilize inflation by raising the federal funds rate multiple times through July 2023.
KEY FACTORS AFFECTING OUR OPERATING RESULTS Inflation, Housing Affordability and Mortgage Interest Rates Inflation has affected the economy as a whole since 2022, but began moderating in 2023 as the Federal Reserve took actions to stabilize inflation by raising the federal funds rate multiple times through July 2023.
An accrual for estimated healthcare claims incurred but not reported (“IBNR”) is included within accrued compensation on the Consolidated Balance Sheets and was $4.8 million and $3.9 million as of December 31, 2024 and 2023, respectively. We participate in multiple workers’ compensation plans covering a significant portion of our business.
An accrual for estimated healthcare claims incurred but not reported (“IBNR”) is included within accrued compensation on the Consolidated Balance Sheets and was $4.9 million and $4.8 million as of December 31, 2025 and 2024, respectively. We participate in multiple workers’ compensation plans covering a significant portion of our business.
Actual results may differ from these estimates and assumptions used in preparation of our consolidated financial statements. We believe the following critical accounting estimates require judgement and estimation in the preparation of our consolidated financial statements and to be fundamental to our results of operations.
Actual results may differ from these estimates and assumptions used in preparation of our consolidated financial statements. We believe the following critical accounting estimates require judgment and estimation in the preparation of our consolidated financial statements and to be fundamental to our results of operations.
Operating income is adjusted for certain non-cash items, and our cash flows from operations can be impacted by the timing of our cash collections on sales and collection of retainage amounts. Our primary uses of cash from operating activities include payments for installation materials, compensation costs, leases, income taxes and other general corporate expenditures included in net income.
Operating income is adjusted for certain non-cash items, and our cash flows from operations can be impacted by the timing of our cash collections on sales and collection of retainage amounts. Our primary uses of cash from operating activities include payments for inventory, compensation costs, leases, income taxes and other general corporate expenditures included in net income.
We have not made any material changes in our methodology used to establish our insurance reserves during the years ended December 31, 2024 and 2023, and none of the adjustments to our estimates have been material.
We have not made any material changes in our methodology used to establish our insurance reserves during the years ended December 31, 2025 and 2024, and none of the adjustments to our estimates have been material.
The assets associated with the forward interest rate swap are included in other current and other non-current assets on the Consolidated Balance Sheets at their fair value amounts as described in Note 10, Fair Value Measurements, in Item 8, Financial Statements and Supplementary Data, of this Form 10-K.
The assets associated with the interest rate swaps are included in other current assets and other non-current assets on the Consolidated Balance Sheets at their fair value amounts as described in Note 10, Fair Value Measurements, in Item 8, Financial Statements and Supplementary Data, of this Form 10-K.
Cash used in financing activities consists primarily of debt repayments, acquisition-related obligations, dividends and stock repurchases. We had a net use of cash in financing activities in both 2024 and 2023.
Cash used in financing activities consists primarily of debt repayments, acquisition-related obligations, dividends and stock repurchases. We had a net use of cash in financing activities in both 2025 and 2024.
The indenture covering the Senior Notes contains restrictive covenants that, among other things, limit the ability of the Company and certain of our subsidiaries (subject to certain exceptions) to: (i) incur additional debt and issue preferred stock; (ii) pay dividends on, redeem or repurchase stock in an aggregate amount exceeding 2.0% of market capitalization per fiscal year, or in an aggregate amount exceeding certain applicable restricted payment baskets; (iii) prepay subordinated debt; (iv) create liens; (v) make specified types of investments; (vi) apply net proceeds from certain asset sales; (vii) engage in transactions with affiliates; (viii) merge, consolidate or sell substantially all of our assets; and (ix) pay dividends and make other distributions from subsidiaries.
The indenture contained restrictive covenants that, among other things, limited the ability of the Company and certain of our subsidiaries (subject to certain exceptions) to: (i) incur additional debt and issue preferred stock; (ii) pay dividends on, redeem or repurchase stock in an aggregate amount exceeding 2.0% of market capitalization per fiscal year, or in an aggregate amount exceeding certain applicable restricted payment baskets; (iii) prepay subordinated debt; (iv) create liens; (v) make specified types of investments; (vi) apply net proceeds from certain asset sales; (vii) engage in transactions with affiliates; (viii) merge, consolidate or sell substantially all of our assets; and (ix) pay dividends and make other distributions from subsidiaries.
The estimate of the reporting unit’s fair value was determined by placing a 75% weighting on a discounted cash flow model and a 25% weighting on market-related model using current industry information that involve significant unobservable inputs (Level 3 inputs).
The estimate of the reporting unit’s fair value was determined by placing a 50% weighting on a discounted cash flow model and a 50% weighting on market-related model using current industry information that involve significant unobservable inputs (Level 3 inputs).
The ABL Credit Agreement and the Term Loan Agreement contain restrictive covenants that, among other things, limit the ability of the 44 Company and certain of our subsidiaries (subject to certain exceptions) to: (i) incur additional debt and issue preferred stock; (ii) pay dividends on, redeem or repurchase stock in an aggregate amount exceeding the greater of 2.0% of market capitalization per fiscal year or certain applicable restricted payment basket amounts' (iii) prepay subordinated debt; (iv) create liens; (v) make specified types of investments; (vi) apply net proceeds from certain asset sales; (vii) engage in transactions with affiliates; (viii) merge, consolidate or sell substantially all of our assets; and (ix) pay dividends and make other distributions from subsidiaries.
The ABL Credit Agreement and the Term Loan Agreement contain restrictive covenants that, among other things, limit the ability of the Company and certain of our subsidiaries (subject to certain exceptions) to: (i) incur additional debt and issue preferred stock; (ii) pay dividends on, redeem or repurchase stock in an aggregate amount exceeding the greater of 2.0% of market capitalization per fiscal year or certain applicable restricted payment basket amounts' (iii) prepay subordinated debt; (iv) create liens; (v) make specified types of investments; (vi) apply net proceeds from certain asset sales; (vii) engage in transactions with affiliates; (viii) merge, consolidate or sell substantially all of our assets; and (ix) pay dividends and make other distributions from subsidiaries. 44 In March 2024, we entered into Amendment No. 3 to our Term loan Credit Agreement ("Third Amendment").
During the year ended December 31, 2023, we recorded unrealized losses, net of taxes, of $10.2 million on our cash flow hedges primarily due to the market's expectations for interest rates to decline in the future which offset the previous unrealized gains on our existing and forward swaps.
During the year ended December 31, 2024, we recorded unrealized losses, net of taxes, of $2.0 million on our cash flow hedges primarily due to the market's expectations for interest rates to decline in the future which offset the previous unrealized gains on our existing and forward swaps.
For a summary of notional amounts, maturity dates and interest rates for each of these swaps, see Note 12, Derivatives and Hedging Activities, in Item 8, Financial Statements and Supplementary Data of this Form 10-K. Together, these five swaps serve to hedge $400.0 million of the variable cash flows on our variable rate Term Loan through maturity.
For a summary of notional amounts, maturity dates and interest rates for each of these swaps, see Note 12, Derivatives and Hedging Activities, in Item 8, Financial Statements and Supplementary Data of this Form 10-K. Together, these two swaps serve to hedge $400.0 million of the variable cash flows on our variable rate Term Loan through December 14, 2028.
(9) Calculated based on period-over-period change in the number of completed same branch jobs within our Installation segment for all markets we serve except the heavy commercial end market.
(9) Calculated as period-over-period change in the number of completed same-branch jobs within our Installation segment for all markets we serve except the heavy commercial end market.
As of December 31, 2024 and 2023, offsets of these liabilities were $4.4 million and $3.0 million, respectively, with insurance receivables and indemnification assets for claims under fully insured policies or claims that exceeded the stop loss limit. We also participate in a high retention general liability insurance program and a high deductible auto insurance program.
As of December 31, 2025 and 2024, offsets of these liabilities were $4.8 million and $4.4 million, respectively, with insurance receivables and indemnification assets for claims under fully insured policies or claims that exceeded the stop loss limit. We also participate in a high retention general liability insurance program and a high deductible auto insurance program.
Finally, we have two product supply agreements with various vendors that requires us to purchase a minimum quantity of inventory with variable and fixed rate pricing in 2025. Payments for income taxes cannot be estimated at this time, but our effective tax rate was 25.9% for the year ended December 31, 2024.
Finally, we have various product supply agreements with several vendors that requires us to purchase a minimum quantity of inventory with variable and fixed rate pricing in 2026. Payments for income taxes cannot be estimated at this time, but our effective tax rate was 25.6% for the year ended December 31, 2025.
The end market is excluded from the volume growth and price/mix growth calculations as to not skew the growth rates given its much larger per-job revenue compared to the average jobs in our remaining end markets.
This end market is excluded from the volume growth and price/mix growth calculations for our Installation segment as to not skew the growth rates given its much larger per-job revenue compared to the average jobs in our remaining end markets.
According to Dodge Data & Analytics, commercial building starts in 2025, measured by investment dollars, are expected to increase 6% from 2024 while institutional building starts (a subset of the nonresidential construction market in which we participate) are expected to increase 4% from 2024.
According to Dodge Data & Analytics, commercial building starts in 2026, measured by investment dollars, are expected to increase 3% from 2025 while institutional building starts (a subset of the nonresidential construction market in which we participate) are expected to increase 6% from 2025.
We also amortized $4.5 million of the remaining unrealized gains, off-market terms and unrealized losses on our terminated cash flow hedges to interest expense, net during the year ended December 31, 2024, not including tax effects of $1.2 million.
We also amortized $1.5 million of the remaining unrealized gains, off-market terms and unrealized losses 39 on our terminated cash flow hedges to interest expense, net during the year ended December 31, 2025, not including tax effects of $0.4 million.
We also utilize gross profit percentage as shown in the following section to monitor our most significant variable costs and to evaluate labor efficiency and success at passing increasing costs of materials to customers. 36 The following table shows certain key measures of performance we utilize to evaluate our results: Years ended December 31, 2024 2023 2022 Period-over-period Growth Consolidated Sales Growth 5.9 % 4.1 % 35.6 % Consolidated Same Branch Sales Growth (1) 3.5 % 0.2 % 24.6 % Installation Sales Growth (2) 6.0 % 3.7 % 29.5 % Same Branch Sales Growth (1)(2) 3.8 % (0.1) % 24.5 % Single-Family Sales Growth (3) 6.4 % (5.4) % 33.5 % Single-Family Same Branch Sales Growth (1)(3) 3.6 % (9.0) % 28.9 % Multi-Family Sales Growth (4) 6.5 % 35.0 % 31.8 % Multi-Family Same Branch Sales Growth (1)(4) 5.6 % 33.3 % 31.0 % Residential Sales Growth (5) 6.4 % 1.0 % 33.2 % Residential Same Branch Sales Growth (1)(5) 4.0 % (2.3) % 29.2 % Commercial Sales Growth (6) 3.0 % 17.2 % 15.2 % Commercial Same Branch Sales Growth (1)(6) 1.2 % 11.5 % 6.6 % Other Sales Growth (7) 8.2 % 12.1 % 453.8 % Same Branch Sales Growth (1)(7) 3.6 % 6.7 % 41.5 % Same Branch Sales Growth - Installation (8) Volume Growth (1)(9) (0.2) % (9.0) % 5.5 % Price/Mix Growth (1)(10) 3.7 % 7.7 % 23.0 % U.S.
We also utilize gross profit percentage as shown in the following section to monitor our most significant variable costs and to evaluate labor efficiency and success at passing increasing costs of materials to customers. 36 The following table shows certain key measures of performance we utilize to evaluate our results: Years ended December 31, 2025 2024 2023 Period-over-Period Growth Consolidated Sales Growth 1.0 % 5.9 % 4.1 % Consolidated Same Branch Sales Growth (1) (1.3) % 3.5 % 0.2 % Installation Sales Growth (2) 0.1 % 6.0 % 3.7 % Same Branch Sales Growth (1)(2) (1.5) % 3.8 % (0.1) % Single-Family Sales Growth (3) (1.9) % 6.4 % (5.4) % Single-Family Same Branch Sales Growth (1)(3) (4.1) % 3.6 % (9.0) % Multi-Family Sales Growth (4) (5.4) % 6.5 % 35.0 % Multi-Family Same Branch Sales Growth (1)(4) (5.7) % 5.6 % 33.3 % Residential Sales Growth (5) (2.6) % 6.4 % 1.0 % Residential Same Branch Sales Growth (1)(5) (4.4) % 4.0 % (2.3) % Commercial Sales Growth (6) 11.2 % 3.0 % 17.2 % Commercial Same Branch Sales Growth (1)(6) 10.4 % 1.2 % 11.5 % Other, net of Eliminations Sales Growth (7)(11) 15.5 % 3.7 % 10.7 % Same Branch Sales Growth (1)(7)(11) 2.3 % (1.0) % 5.2 % Same Branch Sales Growth - Installation (8) Volume Growth (1)(9)(11) (5.7) % 0.2 % (8.4) % Price/Mix Growth (1)(10)(11) 1.6 % 3.7 % 7.2 % U.S.
The Term Loan amortizes in quarterly principal payments of $1.25 million, with any remaining unpaid balances due on the maturity date of March 28, 2031. As of December 31, 2024, we had $492.5 million, net of unamortized debt issuance costs, due on our Term Loan.
The Term Loan amortizes in quarterly principal payments of $1.25 million, with any remaining unpaid balances due on the maturity date of March 28, 2031. As of December 31, 2025, we had $488.1 million, net of unamortized debt issuance costs, due on our Term Loan.
We also support the industry transition to hydrofluoro-olefin ("HFO") spray foam types which have lower greenhouse gas emissions than hydrofluorocarbon ("HFC") materials. We utilized more HFO materials than HFC materials and expect this to continue to increase. Certain effects of climate change that may cause severe weather events could have a material effect on our operations.
We also support the industry transition to hydrofluoro-olefin ("HFO") spray foam types which have lower greenhouse gas emissions than hydrofluorocarbon ("HFC") materials. Certain effects of climate change that may cause severe weather events could have a material effect on our operations.
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 manufacturing facility. We believe our business is well positioned to continue to profitably grow due to our strong balance sheet, liquidity and our continuing acquisition strategy.
In addition, we have regional distribution operations that serve the Midwest, Mountain West, Northeast and Mid-Atlantic regions of the United States, and we operate multiple cellulose manufacturing facilities. We believe our business is well positioned to continue to profitably grow due to our strong balance sheet, liquidity and our continuing acquisition strategy.
The following table presents our cash flows (in millions): Years ended December 31, 2024 2023 2022 Net cash provided by operating activities $ 340.0 $ 340.2 $ 277.9 Net cash used in investing activities (159.1) (103.4) (158.7) Net cash used in financing activities (239.8) (79.9) (223.1) Cash Flows from Operating Activities Our primary source of cash provided by operations is revenues generated from installing or selling building products and the resulting operating income generated by these revenues.
The following table presents our cash flows (in millions): Years ended December 31, 2025 2024 2023 Net cash provided by operating activities $ 371.4 $ 340.0 $ 340.2 Net cash used in investing activities (112.0) (159.1) (103.4) Net cash used in financing activities (265.1) (239.8) (79.9) Cash Flows from Operating Activities Our primary source of cash provided by operations is revenues generated from installing or selling building products and the resulting operating income generated by these revenues.
Regular payments are due under each note for a period of typically 60 consecutive months after the incurrence of the obligation. 45 Total outstanding loan balances relating to our master loan and equipment agreements were $82.3 million and $83.0 million as of December 31, 2024 and 2023, respectively.
Regular payments are due under each note for a period of typically 60 consecutive months after the incurrence of the obligation. Total outstanding loan balances relating to our master loan and equipment agreements were $98.5 million and $82.3 million as of December 31, 2025 and 2024, respectively.
As of December 31, 2024 and 2023, offsets of these liabilities were $2.8 million and $1.8 million, respectively, with insurance receivables and indemnification assets for claims under fully insured policies or claims that exceeded the stop loss limit.
As of December 31, 2025 and 2024, offsets of these liabilities were $5.4 47 million and $2.8 million, respectively, with insurance receivables and indemnification assets for claims under fully insured policies or claims that exceeded the stop loss limit.
A significant portion of these capital expenditures were subsequently reimbursed via various vehicle and equipment notes payable, with related cash inflows shown in cash flows from financing activities. Cash Flows from Financing Activities Our sources of cash from financing activities consist of proceeds from the issuance of debt and new vehicle and equipment notes payable.
A significant portion of these capital expenditures were subsequently reimbursed via various vehicle and equipment notes payable, with related cash inflows shown in cash flows from financing activities. 43 Cash Flows from Financing Activities Our sources of cash from financing activities consist of proceeds from periodic new issuances of debt (including the 2026 Offering) and from new vehicle and equipment notes payable.
(2) Calculated based on period-over-period growth of all end markets for our Installation segment. (3) Calculated based on period-over-period growth in the single-family subset of the residential new construction end market for our Installation segment. (4) Calculated based on period-over-period growth in the multi-family subset of the residential new construction end market for our Installation segment.
(2) Calculated based on period-over-period change in sales of all end markets for our Installation segment. (3) Calculated based on period-over-period change in sales in the single-family subset of the residential new construction end market for our Installation segment.
Additionally, we maintain certain production vehicles under a finance lease structure which will require $3.4 million in interest and principal payments under current agreements in 2025. We lease certain locations, vehicles and equipment under operating lease agreements that will require $38.8 million in funds over the next twelve months.
Additionally, we maintain certain production vehicles under a finance lease structure which will require $3.1 million in interest and principal payments under current agreements in 2026. We lease certain locations, vehicles and equipment under operating lease agreements that will require $41.1 million in funds over the next twelve months.
Our liquidity remains strong despite investing $88.6 million in our acquisition strategy, and we more than tripled the 2023 amount of shareholder return through repurchasing $145.3 million of our Company's stock and paying $84.7 million in dividends during the year ended December 31, 2024.
Our liquidity remains strong despite investing $88.6 million in our acquisition strategy, and more than tripling the 2023 amount of returned to shareholders through repurchasing $145.3 million of our Company's stock and paying $84.7 million in dividends during the year ended December 31, 2024.
Housing Market (11) Total Completions Growth 12.3 % 4.2 % 3.7 % Single-Family Completions Growth 1.8 % (2.3) % 5.7 % Multi-Family Completions Growth 35.4 % 22.1 % (1.3) % (1) Same branch basis represents period-over-period growth for branch locations owned greater than 12 months as of each financial statement date.
Housing Market (12) Total Completions Growth (7.9) % 12.3 % 4.2 % Single-Family Completions Growth (0.8) % 1.8 % (2.3) % Multi-Family Completions Growth (20.3) % 35.4 % 22.1 % (1) Same-branch basis represents period-over-period change in sales for branch locations owned greater than 12 months as of each financial statement date.
The Senior Notes will mature on February 1, 2028 and interest will be payable semi-annually in cash in arrears on February 1 and August 1, commencing on February 1, 2020. The net proceeds from the Senior Notes offering were $295.0 million after debt issuance costs.
The 2028 Senior Notes would have matured on February 1, 2028 and interest was payable semi-annually in cash in arrears on February 1 and August 1, commencing on February 1, 2020. The net proceeds from the 2028 Senior Notes offering were $295.0 million after debt issuance costs.
As of December 31, 2024 and 2023, we estimated total short-term and long-term known and IBNR claims for workers' compensation to be $27.7 million and $26.5 million, respectively.
As of December 31, 2025 and 2024, we estimated total short-term and long-term known and IBNR claims for workers' compensation to be $30.9 million and $27.7 million, respectively.
The following table summarizes our outstanding bonds, letters of credit and cash-collateral (in millions): As of December 31, 2024 Performance bonds $ 77.3 Insurance letters of credit and cash collateral 72.3 Permit and license bonds 11.0 Total bonds and letters of credit $ 160.6 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.
The following table summarizes our outstanding bonds, letters of credit and cash-collateral (in millions): As of December 31, 2025 Performance bonds $ 142.7 Insurance letters of credit and cash collateral 72.4 Permit and license bonds 11.4 Total bonds and letters of credit $ 226.5 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.
As of December 31, 2024, we were in compliance with all applicable covenants under the Term Loan Agreement, ABL Credit Agreement, and the Senior Notes. Derivative Instruments As of December 31, 2024, we had five total interest rate swaps including two forward interest rate swaps.
As of December 31, 2025, we were in compliance with all applicable covenants under the Term Loan Agreement, ABL Credit Agreement, and the 2028 Senior Notes. Derivative Instruments As of December 31, 2025, we had two active interest rate swaps.
The amendment also allows for modification of specified fees depend 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 December 31, 2024 was $246.0 million. The ABL Revolver provides incremental revolving credit facility commitments of up to $50.0 million.
The amendment also allows for modification of specified fees depend 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 December 31, 2025 was $246.5 million.
During 2025, we anticipate discretionary spending for capital improvements and quarterly dividends to approximate 2024 levels of approximately $88.6 million and $39.4 million, respectively, as well as approximately $47.2 million for our annual variable dividend to be paid March 31, 2025.
During 2026, we anticipate discretionary spending for capital improvements and quarterly dividends to approximate 2025 levels of approximately $70.6 million and $40.4 million, respectively, as well as approximately $48.6 million for our annual variable dividend to be paid March 31, 2026.
As of December 31, 2024 and 2023, general liability and auto insurance reserves included in other current and long-term liabilities 47 were $32.0 million and $25.4 million, respectively.
As of December 31, 2025 and 2024, general liability and auto insurance reserves included in other current and long-term liabilities were $43.3 million and $32.0 million, respectively.
We have omitted discussion of 2022 results in the sections that follow where it would be redundant to the discussion previously included in Part II, Item 7, of Form 10-K for the year ended December 31, 2023. 2024 Highlights Net revenues increased 5.9%, or $162.7 million, while gross profit increased 6.9% to $994.5 million during the year ended December 31, 2024 compared to 2023.
We have omitted discussion of 2023 results in the sections that follow where it would be redundant to the discussion previously included in Part II, Item 7, of Form 10-K for the year ended December 31, 2024. 2025 Highlights Net revenues increased 1.0%, or $29.5 million to $2,970.8 million, while gross profit increased 1.5% to $1,009.3 million during the year ended December 31, 2025 compared to 2024.
As of December 31, 2024, we had cash and cash equivalents of $327.6 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 $573.6 million.
As of December 31, 2025, we had cash and cash equivalents of $321.9 million as well as access to $250.0 million under our asset-based lending credit facility (as defined below), less $3.5 million of outstanding letters of credit, resulting in total liquidity of $568.4 million.
Operating Expenses Operating expenses for the years ended December 31, 2024 , 2023 and 2022 were as follows (in millions): 2024 Change 2023 Change 2022 Selling $ 139.8 6.1 % $ 131.8 10.7 % $ 119.0 Percentage of total net revenue 4.8 % 4.7 % 4.5 % Administrative $ 424.8 10.3 % $ 385.3 14.8 % $ 335.7 Percentage of total net revenue 14.4 % 13.9 % 12.6 % Gains on acquisition earnouts $ — — % $ — (100.0) % $ (16.1) Percentage of total net revenue — % — % (0.6) % Asset impairment $ 4.9 100.0 % $ — — % $ — Percentage of total net revenue 0.2 % — % — % Amortization $ 42.5 (4.5) % $ 44.5 1.7 % $ 43.8 Percentage of total net revenue 1.4 % 1.6 % 1.6 % Selling The dollar increase in selling expenses in 2024 was primarily driven by a year-over-year increase in selling wages and commissions to support our increased net revenue of 5.9%.
Operating Expenses Operating expenses for the years ended December 31, 2025 , 2024 and 2023 were as follows (in millions): 2025 Change 2024 Change 2023 Selling $ 144.6 3.4 % $ 139.8 6.1 % $ 131.8 Percentage of total net revenue 4.9 % 4.8 % 4.7 % Administrative $ 437.2 2.9 % $ 424.8 10.3 % $ 385.3 Percentage of total net revenue 14.7 % 14.4 % 13.9 % Asset impairment $ — 100.0 % $ 4.9 100.0 % $ — Percentage of total net revenue — % 0.2 % — % Amortization $ 41.1 (3.3) % $ 42.5 (4.5) % $ 44.5 Percentage of total net revenue 1.4 % 1.4 % 1.6 % Selling The dollar increase in selling expenses in 2025 was primarily driven by a year-over-year increase in selling compensation and credit losses on our increased net revenue of 1.0%.
Cash Flows from Investing Activities Sources of cash from investing activities consist primarily of proceeds from the sales of property and equipment and, periodically, maturities from short term investments.
Cash Flows from Investing Activities Sources of cash from investing activities consist primarily of proceeds from the sales of property and equipment and, periodically, maturities from short term investments. Cash used in investing activities consists primarily of purchases of property and equipment, payments for acquisitions and, periodically, purchases of short term investments.
In addition, some of our larger branches operate in states impacted by winter weather and as such experience a slowdown in construction activity during the first quarter of the calendar year. This winter slowdown contributes to traditionally lower sales and profitability in our first quarter. See Part I, Item 1, Business, of this Form 10-K for further information.
In addition, some of our larger branches operate in states impacted by winter weather and as such experience a slowdown in construction activity during the first quarter of the calendar year. This winter slowdown contributes to traditionally lower sales and profitability in our first quarter.
In addition, our finance leases will require $5.9 million in interest and principal payments under current agreements through 2029. Operating lease obligations will require $66.6 million in payments beyond the next twelve months.
In addition, our finance leases will require $4.4 million in interest and principal payments under current agreements through 2030. 42 Operating lease obligations will require $67.0 million in payments beyond the next twelve months.
We did not recognize any impairment losses on our tangible or intangible assets during the year ended December 31, 2023. Amortization Our intangible assets include non-competes, customer relationships, trade names and backlog established upon acquisition of most businesses we acquire. Amortization expense decreased in 2024 primarily due to larger 2024 acquisitions occurring later in the year as compared to 2023.
Amortization Our intangible assets include non-competes, customer relationships, trade names and other and backlog established upon acquisition of most businesses we acquire. Amortization expense decreased in 2025 primarily due to larger 2025 acquisitions occurring later in the year as compared to 2024.
Interest expense, net decreased primarily due to term loan repricing, which was offset by an increase in the write-off of debt issuance costs . See Note 8, Long-term Debt, in Item 8, Financial Statements and Supplementary Data, of this Form 10-K for further information regarding debt balances.
Interest expense, net decreased primarily due to prior year term loan repricing, which was offset by a decrease in interest income on money market accounts . See Note 8, Long-term Debt, in Item 8, Financial Statements and Supplementary Data, of this Form 10-K for further information regarding debt balances.
U.S. economic growth and employment data is healthy and we anticipate our business will continue to grow organically, although we could be negatively impacted by a temporary slowdown in the homebuilding industry in the near term. 2023 Highlights Net revenues increased 4.1%, or $108.8 million, while gross profit increased 12.4% to $930.7 million during the year ended December 31, 2023 compared to 2022.
While U.S. economic growth and employment data remain healthy, and we anticipate our business will continue to grow organically, a temporary slowdown in the homebuilding industry could negatively impact our results in the near term. 2024 Highlights Net revenues increased 5.9%, or $162.7 million, while gross profit increased 6.9% to $994.5 million during the year ended December 31, 2024 compared to 2023.
Net cash provided by operating activities slightly decreased from 2023 to 2024 primarily driven by the increase in accounts receivable and inventory due to higher sales and material cost inflation and the decrease in accounts payable. The decrease was partially offset by higher net income due to increased consolidated sales of 5.9%.
Net cash provided by operating activities increased from 2024 to 2025 primarily driven by higher net income due to increased consolidated sales of 1.0%. The increase was partially offset by the increase in accounts receivable and inventory due to higher sales and expanded distribution operations and the decrease in accounts payable.
Additional funds may be spent on acquisitions, capital improvements and dividend payments, at our discretion. Known obligations beyond the next twelve months are as follows (in millions): 2026 $ 94.3 2027 86.1 2028 360.7 2029 38.7 Thereafter 513.3 Known obligations above include $1.0 billion in interest and principal payments on long-term debt obligations through 2029.
Additional funds may be spent on acquisitions, capital improvements and dividend payments, at our discretion. Known obligations beyond the next twelve months as of December 31, 2025 are as follows (in millions): 2027 $ 105.0 2028 378.0 2029 53.6 2030 41.0 Thereafter 477.6 Known obligations above include $1.0 billion in interest and principal payments on long-term debt obligations through 2031.
Other Expense, net Other expense, net for the years ended December 31, 2024 , 2023 and 2022 was as follows (in millions): 2024 Change 2023 Change 2022 Interest expense, net $ 36.9 (0.3) % $ 37.0 (11.0) % $ 41.6 Other (income) expense (0.8) 20.0 % (1.0) (288.7) % 0.5 Total other expense, net $ 36.1 0.3 % $ 36.0 (14.5) % $ 42.1 Other expense, net did not significantly change during 2024.
Other Expense, net Other expense, net for the years ended December 31, 2025 , 2024 and 2023 was as follows (in millions): 2025 Change 2024 Change 2023 Interest expense, net $ 31.7 (14.1) % $ 36.9 (0.3) % $ 37.0 Other income (2.3) 187.5 % (0.8) 20.0 % (1.0) Total other expense, net $ 29.4 (18.6) % $ 36.1 0.3 % $ 36.0 Other expense, net decreased during 2025 compared to 2024.
Census Bureau data, as revised. 37 Net revenue, cost of sales and gross profit The components of gross profit for the years ended December 31, 2024 , 2023 and 2022 were as follows (in millions): 2024 Change 2023 Change 2022 Net revenue $ 2,941.3 5.9 % $ 2,778.6 4.1 % $ 2,669.8 Cost of sales 1,946.8 5.4 % 1,847.9 0.3 % 1,842.0 Gross profit $ 994.5 6.9 % $ 930.7 12.4 % $ 827.8 Gross profit percentage 33.8 % 33.5 % 31.0 % Net revenue increased during the year ended December 31, 2024 compared to the year ended December 31, 2023 primarily due to increased sales in all of our end markets and price/mix growth as sh own in the Key Measures of Performance section above.
Census Bureau data, as revised. 37 Net revenue, cost of sales and gross profit The components of gross profit for the years ended December 31, 2025 , 2024 and 2023 were as follows (in millions): 2025 Change 2024 Change 2023 Net revenue $ 2,970.8 1.0 % $ 2,941.3 5.9 % $ 2,778.6 Cost of sales 1,961.5 0.8 % 1,946.8 5.4 % 1,847.9 Gross profit $ 1,009.3 1.5 % $ 994.5 6.9 % $ 930.7 Gross profit percentage 34.0 % 33.8 % 33.5 % Net revenue increased during the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily due to increased sales in our commercial end market and contributions from our recent acquisitions .
Based on the results of this evaluation, we concluded that there were no impairments of goodwill as the estimated fair value exceeded its carrying value. The estimated fair value exceeded the Distribution operating segment's carrying value by 32.1%.
Based on the results of this evaluation, we concluded 46 that there were no impairments of goodwill, as the estimated fair value exceeded its carrying value by 18.4%. This is a decrease from the estimated fair value exceeding the carrying value by 32.1% on October 1, 2024.
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.
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.
Firm commitments for funds include $67.2 million in interest and principals payments on long-term debt obligations including our Senior Notes, Term Loan, notes payable to sellers of acquisitions and vehicles purchased under the Master Loan and Security Agreement, the Master Equipment Agreement and the Master Loan Agreements.
Firm commitments for funds as of December 31, 2025 included $79.0 million in interest and principals payments on long-term debt obligations including our 2028 Senior Notes (which, as described below, have now been redeemed in full), Term Loan, notes payable to sellers of acquisitions and vehicles purchased under the Master Loan and Security Agreement, the Master Equipment Agreement and the Master Loan Agreements.
While total housing starts are currently projected to be slightly lower in 2025 than 2024, we believe there are several trends that should drive long-term growth in the housing market, even if there are temporary periods of slowed growth. These long-term trends include an aging housing stock, population growth, demographic changes and household formation growth.
W e believe there are several trends that should drive long-term growth in the housing market, even if there are temporary periods of slowed growth. These favorable long-term trends include an aging housing stock, population growth, persistent housing shortages, demographic changes and household formation growth.
We generally review and reassess our estimates for each uncompleted contract at least quarterly to reflect the latest reliable information available.
We generally review and reassess our estimates for each uncompleted contract at least quarterly to reflect the latest reliable information available. Changes in these estimates could favorably or unfavorably impact revenues and their related profits.
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.
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.
The remaining overall growth in net revenue for the year December 31, 2024 is attributable to growth in our Distribution and Manufacturing operating segments. Net revenue in these operating segments combined grew from $182.0 million to $197.9 million for the year ended December 31, 2024 over 2023.
The remaining overall growth in net revenue for the year ended December 31, 2025 is attributable to growth in our Distribution and Manufacturing operating segments.
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. 40 Our operating results may vary based on our product mix and the mix of our end markets among new single-family, multi-family and commercial builders and owners of existing homes.
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.
While we purchase the large majority of the products we install and sell domestically, our business could be impacted if overall home affordability is further reduced by higher material prices due to increased tariffs. Trends in the Construction Industry Higher inflation and interest rates, as discussed above, reduced the demand and affordability of new homes in 2024.
While we purchase the large majority of the products we install and sell domestically, our business could be impacted if overall home affordability is further reduced by higher material prices due to increased tariffs. Trends in the Construction Industry According to Fannie Mae's January 2026 forecast, 1.31 million housing starts are forecasted in 2026.
Selling expense increased as a percentage of sales primarily due to increased commissions due to higher profitability and margins. Administrative The dollar increase in administrative expenses in 2024 was primarily due to an increase in wages and benefits, which was attributable to both acquisitions and organic growth as well as favorable company performance.
Selling expense increased as a percentage of sales primarily due to increased selling wages. Administrative The dollar increase in administrative expenses in 2025 was primarily due to an increase in compensation, which was attributable to both acquisitions and wage inflation.
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. 42 Long-Term Material Cash Requirements Beyond the next twelve months, our principal demands for funds will be to fund working capital needs and operating expenses, to meet principal and interest obligations on our long-term debts and finance leases as they become due or mature, and to make required income tax payments.
Long-Term Material Cash Requirements Beyond the next twelve months, our principal demands for funds will be to fund working capital needs and operating expenses, to meet principal and interest obligations on our long-term debts and finance leases as they become due or mature, and to make required income tax payments.
The increase in cash used in financing activities in 2024 w as primarily due to common stock repurchases increasing to $145.3 million during the year ended December 31, 2024 from $6.3 million during the year ended December 31, 2023 . Dividends paid also increased by $21.6 million in 2024 compared to 2023.
The increase in cash used in financing activities in 2025 w as primarily due to common stock repurchases increasing to $172.6 million during the year ended December 31, 2025 from $145.3 million during the year ended December 31, 2024 . This was partially offset by increase in net proceeds from vehicle and equipment notes.
In addition, we occasionally use letters of credit and cash to secure our performance under our general liability and workers’ compensation insurance programs. Permit and license bonds are typically issued for one year and are required by certain municipalities when we obtain licenses and permits to perform work in their jurisdictions.
Permit and license bonds are typically issued for one year and are required by certain municipalities when we obtain licenses and permits to perform work in their jurisdictions.
Changes in these estimates could favorably or unfavorably impact revenues and their related profits. 46 Goodwill Impairment We performed an annual quantitative goodwill impairment test as of October 1, 2024 on our Distribution operating segment which we have determined is also a reporting unit.
Goodwill Impairment We performed an annual quantitative goodwill impairment test as of October 1, 2025 on our Distribution operating segment which we have determined is also a reporting unit.
Our employee retention rates remained better than industry averages in the year ended December 31, 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 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 Foundation meant to benefit our employees, their families and their communities.
See Note 8, Long-term Debt, in Item 8, Financial Statements and Supplementary Data, of this Form 10-K for more information on our revolving line of credit.
Overall, we increased the amount of capital returned to shareholders in 2024 by 13.1% during the year ended December 31, 2025. See Note 8, Long-term Debt, in Item 8, Financial Statements and Supplementary Data, of this Form 10-K for more information on our revolving line of credit.
LIQUIDITY AND CAPITAL RESOURCES Our capital resources primarily consist of cash from operations and borrowings under our various debt agreements and capital equipment leases and loans.
See Part I, Item 1, Business, of this Form 10-K for further information. 41 LIQUIDITY AND CAPITAL RESOURCES Our capital resources primarily consist of cash from operations and borrowings under our various debt agreements and capital equipment leases and loans.
The multi-family subset of the residential new construction market grew 2024 revenue 6.5% over the same period in 2023 based on the backlog of jobs in that end market.
The multi-family subset of the residential new construction market grew 6.5% over the same period in 2023 based on the backlog of jobs in that end market. Our commercial end market experienced sales growth of 3.0% during the year ended December 31, 2024 primarily through contributions from our recent acquisitions.
We expect our business to be somewhat impacted by the current mortgage rates in 2025 since they remain elevated compared to recent history. In addition, housing affordability is impacted by international trade as certain housing inputs are more reliant on imports than domestic production.
We expect to be impacted by the current elevated rates into 2026 but anticipate pressures to lessen over time if mortgage rates are further reduced. In addition, housing affordability is impacted by international trade as certain housing inputs such as lumber are more reliant on imports than domestic production.
According to Fannie Mae's January 2025 forecast, 1.32 million housing starts are forecasted in 2025 which is a decline of 3% from 2024. These headwinds may impact our business in the near term, but stable employment and lower existing home inventory levels in some markets continue to support demand for residential new construction activity despite the affordability concerns.
Higher inflation and interest rates, as discussed above, reduced the demand and affordability of new homes in 2025. These headwinds may impact our business in the near term, but stable employment and lower existing home inventory levels in some markets continue to support demand for residential new construction activity despite the affordability concerns.
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.
Despite a reduction in the number of installation jobs completed, we were able to increase gross profit as we continue to prioritize profitability over volume. 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.
The increase in net revenue was primarily driven by the 33.3% growth in same branch multi-family sales, selling price and product mix improvements and the contribution of our recent acquisitions. The 7.7% increase in our price/mix metric for our Installation segment was primarily due to a higher mix of multi-family and commercial jobs.
The increase in net revenue was primarily due to the 10.4% increase in commercial end market same branch sales growth, selling price and product mix improvements, and the contribution of our recent acquisitions, partially offset by sales decreases in the residential end markets.
The mix of end customer and product would have an impact on the year-over-year price per job. (11) U.S.
The mix of end customer and product would have an impact on the year-over-year price per job. (11) We revised this calculation to exclude certain intercompany sales. Percentages in all periods presented conform to this revised method. (12) U.S.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+0 added−0 removed2 unchanged
Biggest changeWe had three active interest rate swaps which, when combined with our two forward interest rate swaps, serve to hedge $400.0 million of the variable cash flows on our Term Loan until its maturity as of December 31, 2024. As a result, total variable rate debt of $96.3 million was exposed to market risks as of December 31, 2024.
Biggest changeWe had two active interest rate swaps which serve to hedge $400.0 million of the variable cash flows on our Term Loan until its maturity as of December 31, 2025. As a result, total variable rate debt of $91.3 million was exposed to market risks as of December 31, 2025.
A hypothetical one percentage point increase (decrease) in interest rates on our variable rate debt would increase (decrease) our annual interest expense by approximately $1.0 million. Our Senior Notes accrued interest at a fixed rate of 5.75%.
A hypothetical one percentage point increase (decrease) in interest rates on our variable rate debt would increase (decrease) our annual interest expense by approximately $0.9 million. Our 2028 Senior Notes accrued interest at a fixed rate of 5.75%.
As of December 31, 2024, we had $492.5 million outstanding on the Term Loan, net of unamortized debt issuance costs, no outstanding borrowings on the ABL Revolver and no outstanding borrowings under finance leases subject to variable interest rates.
As of December 31, 2025, we had $491.3 million outstanding on the Term Loan, net of unamortized debt issuance costs, no outstanding borrowings on the ABL Revolver and no outstanding borrowings under finance leases subject to variable interest rates.

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