FBM 1Q20 Earnings Presentation May 12, 2020 Disclosures - PowerPoint PPT Presentation

FBM 1Q20 Earnings Presentation May 12, 2020

Disclosures Forward-Looking Statements This presentation contains “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and may contain words such as “believe,” “anticipate,” “expect,” “estimate,” “intend,” “project,” “plan,” or words or phrases with similar meaning. Forward-looking statements contained in this presentation relate to, among other things, the Company's projected financial performance and operating results, including projected net sales, gross margin, selling, general and administrative (“SG&A”) expenses, capital expenditures, adjusted EBITDA, net debt leverage ratio, free cash flow, adjusted EBITDA margin and adjusted earnings per share (“EPS”), as well as statements regarding the Company's progress towards its strategic objectives, including the performance of current greenfield branches, the opening of additional greenfield branches, the Company's acquisition pipeline, and the successful integration and performance of the Company's acquisitions. Forward-looking statements also relate to the expected impacts of, and response to, the COVID-19 pandemic. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on our management’s current expectations, forecasts and assumptions that involve risks and uncertainties, including, but not limited to, economic, competitive, governmental and technological factors outside of our control, that may cause our business, strategy or actual results to differ materially from those expressed or implied by the forward-looking statements. We do not intend, and undertake no obligation, to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable law. Investors are referred to the Company’s filings with the Securities and Exchange Commission, including its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, for additional information regarding the risks and uncertainties that may cause actual results to differ materially from those expressed or implied by any forward-looking statement. Non-GAAP Financial Measures In addition to presenting financial results prepared in accordance with generally accepted accounting principles (“GAAP”), this presentation contains certain non-GAAP financial measures, including adjusted net income, adjusted EPS, adjusted EBITDA, adjusted EBITDA margin and net debt leverage ratio, which are provided as supplemental measures of financial performance. These non-GAAP financial measures are presented because they are important metrics used by management as one of the means by which it assesses financial performance. One or more of these measures may also be used by analysts, investors and other interested parties to evaluate companies in our industry. These non-GAAP financial measures, when used in conjunction with the most directly comparable GAAP financial measures, provide investors with an additional financial analytical framework that may be useful in assessing our financial condition and results of operations. These non-GAAP financial measures have certain limitations, which are discussed in greater detail in the Company’s filings with the Securities and Exchange Commission and its earnings releases and should not be considered as an alternative to measures of financial performance prepared in accordance with GAAP. Other companies, including other companies in our industry, may not use such measures or may calculate one or more of the measures differently than we do, limiting their usefulness as a comparative measure. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures is set forth in the Appendix to this presentation. 2

Q1 2020 Highlights  Total net sales of $524.3M, an increase of 1.8% YoY  Total base business net sales decrease of 0.3% YoY  Wallboard base business decrease of 1.5% YoY; 0.1% decline in unit volume, 1.4% decline in price/mix Q1 Results  Suspended ceilings base business increase of 4.8% YoY  Metal framing base business decrease of 6.9% YoY  Complementary and other products base business increase of 3.3% YoY  Gross profit of $162.2M, up 6.0% YoY  Driving Margin Gross margin of 30.9% compared to 29.7% YoY  Net income from continuing operations of $14.4M compared to $4.8M YoY Expansion  EPS of $0.33 from continuing operations compared to $0.11 YoY; adjusted EPS 1 of $0.23 compared to $0.14 YoY Adjusted EBITDA 1 of $40.3M, up 7.5% YoY; adjusted EBITDA margin 1 of 7.7% compared to 7.3% YoY   First and foremost, ensuring the health and safety of our employees, customers and communities  Reduced salaries for exempt employees, led by voluntary salary reductions by Senior Management Action Taken During  Furloughed team members associated with temporary branch closures the COVID-19  Restricted hiring, deferred wage increases and reduced other costs to protect existing jobs  Reduced independent board member compensation Pandemic  Deferring or limiting non-essential operating expenses  Withdrew our full year 2020 financial guidance on April 8, 2020 Net debt leverage ratio 2 of 2.98X at the end of the first quarter  Liquidity and Drawdown of an additional $120M 3 of cash under the ABL Credit Facility with $140M 4 of available borrowing capacity  Capital Resources  Finished the first quarter with cash of $141M on the balance sheet  Next scheduled debt maturity in 2023 1 Adjusted EBITDA, adjusted EBITDA margin, adjusted EPS, and net debt leverage ratio are non-GAAP financial measures. Adjusted EBITDA margin represents adjusted EBITDA divided by net sales. For a reconciliation of net income to adjusted EBITDA and net income to adjusted net income, please refer to the Appendix. 3 2 For a calculation of net debt leverage ratio as of March 31, 2020, see Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2020. 3 The drawdown of the ABL credit facility occurred in March 2020. 4 As of March 31, 2020.

Long-Term Strategic Priorities 1 Strengthen Balance Sheet   Disciplined capital spending Reduce net debt leverage  Drive working capital efficiency Drive Organic Growth 2   Greenfield expansion opportunities in Optimize the pricing of the products we sell underserved markets to our customers   Expand the products we offer our customers Grow market share 3 Expand Profit Margins   Drive procurement savings Execute our cost-out initiatives   Leverage our economies of scale Grow wallboard net sales 4 Platform Expansion   Grow asset base through strategic Grow complementary and other products acquisitions net sales   Scalable infrastructure facilitates efficient Expand the E-Commerce platform integration of acquisitions 4

Q1 Overview YoY Net Sales Mix YoY Net Sales 39.4% 38.6% ($M) 1.8% $524 24.8% $515 24.0% 19.3% 18.8% 17.3% 17.8% 1Q19 1Q20 Wallboard Suspended Ceilings Metal Framing Complementary YoY Gross Profit & Margin & Other Products 1Q19 1Q20 ($M) $162 +6.0% $153  Shift in product mix reflects strong commercial repair and remodel activity in suspended ceilings 29.7% 30.9%  Net sales increase of 1.8% YoY 1Q19  Gross profit up 6.0% YoY 1Q20 5

Q1 Net Sales By Product Wallboard Net Sales Suspended Ceilings Net Sales ($M) ($M) $99 $203 -0.3% $202 +10.7% $89 1Q19 1Q20 1Q19 1Q20 -1.5% YoY Base Business Growth 4.8% YoY Base Business Growth Complementary & Other Products Net Metal Framing Net Sales ($M) Sales ($M) $130 -6.0% $99 +5.2% $124 $93 1Q19 1Q20 1Q19 1Q20 -6.9% YoY Base Business Growth 3.3% YoY Base Business Growth 6

Q1 2020 Trends SG&A Leverage 1 Adj. EBITDA Margin 2 Gross Margin 30.9% 23.5% 29.7% 22.8% 7.7% 7.3% 1Q19 1Q20 1Q19 1Q20 1Q19 1Q20 Adjusted EBITDA 2 ($M) Gross Profit ($M) SG&A Expenses ($M) $153.0 $162.2 $117.2 $123.1 $37.5 $40.3  Gross margin increased 120bps primarily due to improved profitability across our product lines driven by our ongoing pricing and purchasing initiatives SG&A leverage 1 increased YoY primarily due to loss of sales leverage resulting from the impacts of the COVID-19 pandemic and  investments in company-wide initiatives Adjusted EBITDA 2 of $40.3M and 7.7% adjusted EBITDA margin 2  7 1 SG&A leverage is calculated as SG&A expenses divided by net sales. 2 Adjusted EBITDA and adjusted EBITDA margin are non-GAAP financial measures. Adjusted EBITDA margin represents adjusted EBITDA divided by net sales. For a reconciliation of net income to adjusted EBITDA, please refer to the Appendix.