FBM 3Q18 Earnings Presentation November 1, 2018 DISCLOSURES - PowerPoint PPT Presentation

FBM 3Q18 Earnings Presentation November 1, 2018

DISCLOSURES Forward-Looking Statements This presentation contains “forward - looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and may contain words such as “believe,” “anticipate,” “expect,” “estimate,” “intend,” “project,” “plan,” or words or phrases with similar meaning. Forward -looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward- looking statements are based on 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, Investors are referred to the Company’s filings with the Securities and except as may be required by applicable law. Exchange Commission, including its Annual Reports on Form 10-K and its Quarterly Reports on Form 10-Q for additional information regarding the risks and uncertainties that may cause actual results to differ materially from those expressed or implied by any forward-looking statement. Non-GAAP Financial Measures In addition to results under GAAP, this presentation contains certain non-GAAP financial measures, including adjusted net income (loss), adjusted earnings per share (“EPS”), adjusted EBITDA and adjusted EBITDA margin, 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 related 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 measure is set forth in the Appendix to this presentation. 2

Q3 2018 HIGHLIGHTS – CONTINUING OPERATIONS ▪ Total net sales increased 15.9% YoY ▪ Base business net sales increased 12.5% YoY ✓ Wallboard base business increased 8.5%: wallboard pricing/mix up DELIVERING 2.1%, with 6.4% higher volume SALES GROWTH ✓ Suspended ceilings base business growth of 8.7% ✓ Metal Framing base business growth of 33.8% ✓ Complementary and other products base business growth of 8.5% ▪ Gross profit from continuing operations of $154.0 million, up 13.4% YoY ▪ Gross margin from continuing operations of 28.4% compared to 29.0% YoY CONTINUING ▪ SG&A as a percentage of net sales improved 100bps YoY OPERATIONS Net loss of $37.6 million; adjusted EBITDA 1 from continuing operations of ▪ $43.7M up 20.3% YOY; adjusted EBITDA margin 1 of 8.1% ▪ Completed the acquisition of Ciesco ✓ Added six branches BUILDING ON M&A SUCCESS ✓ Expected to contribute $24M - $27M to 2018 net sales 2 ✓ Entered Northern VA & State College, PA markets ▪ Entered into a definitive agreement to sell the Mechanical Insulation (“MI”) DIVESTITURE OF business for $122.5M NON-CORE ▪ Net proceeds of $116M will be used to pay down the ABL credit facility ASSET 3 Expected closing in the 4 th quarter of 2018 ▪ 1 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 loss to adjusted EBITDA, see the Appendix. 2 Management estimate as of August 1, 2018. 3 On September 26, 2018, we entered into a definitive agreement to sell our MI business, which was previously reported as the MI segment. The previously 3 reported amounts for the MI segment have been reclassified to discontinued operations. Our continuing operations now consist of what was previously reported as the Specialty Business Products (“SBP”) segment. The information presented herein reflects our continuing operati ons unless otherwise noted.

Mechanical Insulation Divestiture Overview ➢ On September 26, 2018, FBM entered into a definitive agreement to sell its MI segment to Dunes Point Capital for $122.5 million in cash, subject to certain working capital and other pre- and post-closing adjustments ➢ Two part transaction: (1) Asset sale of U.S. MI segment of Foundation Building Materials, LLC, and (2) Stock sale of FBM Canada SPI, Inc. ➢ The MI segment had Q3 2018 net sales of $82.5 million ➢ Current and prior period financial results for the MI segment are reported as discontinued operations ➢ MI operates 54 branches and 13 fabrication shops ➢ Operations in 26 states and two Canadian provinces ➢ The transaction is anticipated to close in the fourth quarter of 2018 End Market Mix Shift 3 Product Mix Shift Historical FBM Expected Product Mix Historical FBM End Market Mix Product Mix 1 Post-Close 2 End Market Mix Post-Close Industrial 7% Mechanical Insulation New New 14% Residential Residential Repair & Drywall 20% 23% Remodel 33% Metal 34% Repair & Framing Remodel 15% 29% New Non-Residential New Non- Complementary 44% Residential Ceilings Products and 43% 16% Other 22% 1 For the three month period ended September 30, 2018. 2 Reflects removal of MI for the three month period ended September 30, 2018. 4 3 Management Estimates as of September 30, 2018.

LONG-TERM STRATEGIC PRIORITIES 1 PROFITABLY GROW MARKET SHARE ▪ ▪ Increase market share by strengthening existing Grow complementary products net sales key customer and supplier relationships ▪ Grow wallboard net sales ▪ Increase suspended ceilings net sales 2 CONTINUE PLATFORM EXPANSION ▪ ▪ Strong acquisition pipeline Organic growth with greenfield expansion opportunities in underserved adjacent markets ▪ Scalable infrastructure facilitates efficient integration and generates economies of scale 3 DRIVE OPERATIONAL EFFICIENCIES ▪ ▪ Leverage entrepreneurial and customer-centric Drive procurement savings that expand gross culture margins ▪ ▪ Logistical tracking system and investment in Incremental margin improvement through electronic data interchange overhead cost reductions 4 CREATE LONG-TERM SHAREHOLDER VALUE ▪ ▪ Proven operating model focused on local market Optimize cash flow through reduced debt expertise leverage ▪ Grow asset base through disciplined M&A 5

Q3 OVERVIEW – CONTINUING OPERATIONS YoY Net Sales YoY Net Sales Mix ($M) $542 +15.9% $468 3Q17 3Q18 38.3% 37.6% YoY Gross Profit & Margin 26.8% 24.9% ($M) 19.6% 19.3% 18.2% $154 15.3% $136 $160 100.0% 90.0% $140 +13.4% 80.0% $120 70.0% $100 Wallboard Suspended Metal Framing Complementary 60.0% $80 50.0% 28.4% 29.0% 40.0% Ceilings & Other $60 30.0% $40 20.0% Products $20 10.0% 3Q17 3Q18 $0 0.0% 3Q17 3Q18 ▪ Shift in product mix reflects strong commercial building and R&R activity ▪ Net sales growth of 15.9% YoY driven by strong base business growth of 12.5% ▪ Gross profit increased 13.4% due to higher net sales across our product lines 6

Q3 NET SALES BY PRODUCT – CONTINUING OPERATIONS Suspended Ceilings Net Sales Wallboard Net Sales $104 $204 +13.6% +13.7% $92 $179 3Q17 3Q18 3Q17 3Q18 8.7% YoY Base Business Growth 8.5% YoY Base Business Growth Metal Framing Net Sales Complementary & Other Net Sales $135 $99 +8.1% +38.0% $71 $125 3Q17 3Q18 3Q17 3Q18 8.5% YoY Base Business Growth 33.8% YoY Base Business Growth 7

Q3 TRENDS – CONTINUING OPERATIONS SG&A Leverage 1 Adj. EBITDA Margin 2 Gross Margin 8.1% 7.8% 29.0% 28.4% 21.9% 20.9% 3Q17 3Q18 3Q17 3Q18 3Q17 3Q18 Adjusted EBITDA 2 ($M) Gross Profit ($M) SG&A Expenses ($M) $135.9 $154.0 $102.3 $113.3 $36.4 $43.7 ▪ Gross margin decreased YoY primarily due to higher product costs ▪ SG&A leverage improved YoY primarily due to higher net sales, continued focus on operating efficiencies and ongoing cost reduction initiatives Adjusted EBITDA 2 of $43.7 or 8.1% margin 2 from continuing operations ▪ 1 SG&A leverage is calculated as SG&A expense divided by net sales. 2 Adjusted EBITDA and adjusted EBITDA margin are non-GAAP measures. Adjusted EBITDA margin represents adjusted EBITDA divided by net sales. For a reconciliation of net loss 8 to adjusted EBITDA, see the Appendix.