GMS GMS Inc

Continued Resilience in Wallboard Pricing Offset by Softening End Market Demand, Year-Over-Year Steel Price Deflation and Hurricane-Related Impacts

Share Repurchase Authorization Renewed

GMS Inc. (NYSE: GMS), a leading North American specialty building products distributor, today reported financial results for the fiscal second quarter ended October 31, 2024.

Second Quarter Fiscal 2025 Highlights

(Comparisons are to the second quarter of fiscal 2024)

• Net sales of $1.5 billion increased 3.5%; organic net sales decreased 4.6%.
• Net income of $53.5 million, or $1.35 per diluted share, decreased from net income of $81.0 million, or $1.97 per diluted share; Net income margin declined 200 basis points to 3.6%.
• Adjusted net income of $80.1 million, or $2.02 per diluted share, decreased from $98.4 million, or $2.40 per diluted share.
• Adjusted EBITDA of $152.2 million decreased $15.3 million, or 9.2%; Adjusted EBITDA margin was 10.3%, compared to 11.8%.
• Cash provided by operating activities and free cash flow were $115.6 million and $101.5 million, respectively, compared to cash provided by operating activities and free cash flow of $118.1 million and $102.1 million, respectively, in the prior year period; Net debt leverage was 2.3 times at the end of the quarter, up from 1.5 times a year ago.
• Subsequent to the end of the quarter, the Board of Directors renewed the Company’s share repurchase program, authorizing the Company to repurchase up to $250 million of its outstanding common stock.

“During our second quarter of fiscal 2025, the GMS team delivered net sales of $1.5 billion, net income of $53.5 million and Adjusted EBITDA of $152.2 million, reflecting the team’s continued ability to effectively navigate a challenging and dynamic operating environment,” said John C. Turner, Jr., President and CEO of GMS. “Prices remained resilient across our major product lines, including for Steel Framing where, while lower year-over-year, pricing improved sequentially as compared with the first quarter of fiscal 2025 and monthly as we moved through the quarter. Also, as compared with the second quarter of fiscal 2024, we realized volume growth, inclusive of acquisitions, in Ceilings, Steel Framing and Complementary Products. Partially offsetting this growth were soft multi-family activity and softening commercial shipments. Hurricane-related slowdowns also significantly impacted one of our largest and fastest-growing regions during the quarter, causing operational inefficiencies and holding back demand, particularly in Wallboard.”

Turner continued, “In spite of softening end markets overall, we saw pockets of relative strength in activity in certain commercial sectors, including data centers, public and private education, healthcare and projects backed by government incentive programs, such as the CHIPS and Inflation Reduction Acts. Single-family construction was relatively flat year-over-year. Stubbornly high mortgage rates and generally tight financing availability, however, continued to weaken the broader construction environment for each of our end markets, particularly for multi-family. Despite these near-term challenges, which we expect to continue into the new calendar year, our resilient team and business model are expected to again deliver solid levels of free cash flow as we progress through choppy market conditions. We expect to continue to invest in our business such that when longer-term rates retreat or become the new normal, we are positioned well to capitalize on the likely subsequent improvement in construction activity.”

“We remain focused on the execution of our strategic priorities, including expanding our platform through both acquisitions and greenfield opportunities while maintaining a disciplined capital allocation strategy, as well as enhancing our product and service offerings and delivering improved profitability as we leverage technology and best practices to achieve advancements in productivity. We are confident these actions will position us for long term success as we continue providing our customers outstanding products and service.”

Second Quarter Fiscal 2025 Results

(Comparisons are to the second quarter of fiscal 2024 unless otherwise noted)

Net sales for the second quarter of fiscal 2025 of $1.5 billion increased 3.5% due to contributions from recent acquisitions, which helped drive volume growth in Ceilings, Steel Framing and Complementary Products. While pricing improved sequentially as compared to the first quarter of fiscal 2025 in all of our major product categories, year-over-year deflation in Steel Framing reduced net sales by approximately $18 million, compared to the prior year quarter. Hurricanes Helene and Milton also reduced total net sales and organic net sales by an estimated $20 million during the quarter.

Organic net sales declined 4.6% as softened demand across our multi-family and commercial end markets combined with the hurricane-related impacts. The storms most notably reduced demand for single-family Wallboard.

Year-over-year quarterly sales changes by product category were as follows:

• Wallboard sales of $582.1 million decreased 0.5% (down 5.2% on an organic basis).
• Ceilings sales of $204.4 million increased 16.6% (up 1.6% on an organic basis).
• Steel Framing sales of $217.4 million decreased 6.3% (down 14.0% on an organic basis).
• Complementary Product sales of $466.8 million increased 9.0% (down 1.4% on an organic basis).

Gross profit of $461.1 million increased $2.5 million from the prior year quarter. Gross margin was 31.4%, down 90 basis points as compared to 32.3% a year ago, primarily due to price and cost dynamics in Wallboard, a mix shift from commercial and multi-family to single-family Wallboard deliveries, unrealized manufacturer purchasing incentives due to lighter demand and storm disruption, and several operational impacts to cost of sales.

Selling, general and administrative (“SG&A”) expenses were $324.2 million for the quarter, up from $300.9 million. Of the $23.3 million year-over-year increase, approximately $21 million related to recent acquisitions and $5.6 million related to an increase in severance costs primarily associated with the previously disclosed cost containment actions, and $2 million related to higher insurance claims. Despite the headwind of storm-related inefficiencies, these increases were partially offset by lower overall operating costs, reflective of the realized savings from the previously disclosed cost reduction actions and reduced activity from changes in demand.

SG&A expense as a percentage of net sales increased 80 basis points to 22.0% for the quarter, compared to 21.2%. A combination of general operating cost inflation, additional accident claim activity and rent expense, together with steel price deflation negatively impacted SG&A leverage by approximately 105 basis points. Also, costs, primarily severance, related to our previously announced cost containment efforts, negatively impacted SG&A leverage by 45 basis points. These factors were partially offset by lower average operating costs at recently acquired companies, cost improvements from our restructuring actions, and the impacts of Wallboard price inflation. Adjusted SG&A expense as a percentage of net sales of 21.1% increased 50 basis points from 20.6%.

Inclusive of a $5.0 million, or 26.4%, increase in interest expense, net income decreased 33.9% to $53.5 million, or $1.35 per diluted share, compared to net income of $81.0 million, or $1.97 per diluted share. Net income margin declined 200 basis points from 5.7% to 3.6%. Adjusted net income was $80.1 million, or $2.02 per diluted share, for the second quarter of fiscal 2025, compared to $98.4 million, or $2.40 per diluted share.

Adjusted EBITDA decreased $15.3 million, or 9.2%, to $152.2 million compared to the prior year quarter. Adjusted EBITDA margin was 10.3%, compared with 11.8% for the second quarter of fiscal 2024.

Balance Sheet, Liquidity and Cash Flow

As of October 31, 2024, the Company had cash on hand of $83.9 million, total debt of $1.5 billion and $458.6 million of available liquidity under its revolving credit facilities. Net debt leverage was 2.3 times as of the end of the quarter, up from 1.5 times at the end of the second quarter of fiscal 2024.

For the second quarter of fiscal 2025, cash provided by operating activities was $115.6 million, compared to $118.1 million in the prior year period. Free cash flow was $101.5 million for the quarter ended October 31, 2024, compared to $102.1 million for the quarter ended October 31, 2023.

Share Repurchase Activity and Renewed Share Repurchase Authorization

During the Company’s fiscal second quarter, the Company repurchased 593,168 shares of common stock for $52.3 million. As of October 31, 2024, the Company had $102.0 million of share repurchase authorization remaining.

However, on December 2, 2024, the Company’s Board of Directors approved a renewal of the share repurchase program authorizing the Company to repurchase up to $250 million of its outstanding common stock. This authorization replaces the Company’s previous share repurchase authorization of $250 million, which commenced in October 2023 and had $94.6 million of authorization remaining as of November 30, 2024. Repurchases will be made from time to time on the open market at prevailing market prices or in negotiated transactions off the market. The renewal of the Company’s share repurchase authorization reflects the Board’s confidence in the business going forward.

Platform Expansion Activities

During the second quarter of fiscal 2025, the Company continued the execution of its platform expansion strategy. As previously announced, the Company successfully acquired R. S. Elliott Specialty Supply, a leading distributor of exterior building products within the state of Florida, on August 26, 2024.

In addition, during the quarter, the Company established one new greenfield location, expanding its presence to provide enhanced service and product offerings in Summerville, SC. Additionally, subsequent to the end of the quarter, the Company opened two more locations with a facility in Middleton, MA and another facility in Clackamas, OR, which is in the greater Portland, OR market.

Conference Call and Webcast

GMS will host a conference call and webcast to discuss its results for the second quarter of fiscal 2025 ended October 31, 2024 and other information related to its business at 8:30 a.m. Eastern Time on Thursday, December 5, 2024. Investors who wish to participate in the call should dial 877-407-3982 (domestic) or 201-493-6780 (international) at least 5 minutes prior to the start of the call. The live webcast will be available on the Investors section of the Company’s website at www.gms.com. There will be a slide presentation of the results available on that page of the website as well. Replays of the call will be available through January 5, 2025 and can be accessed at 844-512-2921 (domestic) or 412-317-6671 (international) and entering the pass code 13749911.

About GMS Inc.

Founded in 1971, GMS operates a network of more than 300 distribution centers with extensive product offerings of Wallboard, Ceilings, Steel Framing and Complementary Products. In addition, GMS operates approximately 100 tool sales, rental and service centers, providing a comprehensive selection of building products and solutions for its residential and commercial contractor customer base across the United States and Canada. The Company’s unique operating model combines the benefits of a national platform and strategy with a local go-to-market focus, enabling GMS to generate significant economies of scale while maintaining high levels of customer service.

Use of Non-GAAP Financial Measures

GMS reports its financial results in accordance with GAAP. However, it presents Adjusted net income, free cash flow, Adjusted SG&A, Adjusted EBITDA, and Adjusted EBITDA margin, which are not recognized financial measures under GAAP. GMS believes that Adjusted net income, free cash flow, Adjusted SG&A, Adjusted EBITDA, and Adjusted EBITDA margin assist investors and analysts in comparing its operating performance across reporting periods on a consistent basis by excluding items that the Company does not believe are indicative of its core operating performance. The Company’s management believes Adjusted net income, Adjusted SG&A, free cash flow, Adjusted EBITDA and Adjusted EBITDA margin are helpful in highlighting trends in its operating results, while other measures can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which the Company operates and capital investments. In addition, the Company utilizes Adjusted EBITDA in certain calculations in its debt agreements.

You are encouraged to evaluate each adjustment and the reasons GMS considers it appropriate for supplemental analysis. In addition, in evaluating Adjusted net income, Adjusted SG&A and Adjusted EBITDA, you should be aware that in the future, the Company may incur expenses similar to the adjustments in the presentation of Adjusted net income, Adjusted SG&A and Adjusted EBITDA. The Company’s presentation of Adjusted net income, Adjusted SG&A, Adjusted SG&A margin, Adjusted EBITDA, and Adjusted EBITDA margin should not be construed as an inference that its future results will be unaffected by unusual or non-recurring items. In addition, Adjusted net income, free cash flow, Adjusted SG&A and Adjusted EBITDA may not be comparable to similarly titled measures used by other companies in GMS’s industry or across different industries. Please see the tables at the end of this release for a reconciliation of Adjusted EBITDA, free cash flow, Adjusted SG&A and Adjusted net income to the most directly comparable GAAP financial measures.

When calculating organic net sales growth, the Company excludes from the calculation (i) net sales of acquired businesses until the first anniversary of the acquisition date, and (ii) the impact of foreign currency translation.

Forward-Looking Statements and Information

This press release includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. You can generally identify forward-looking statements by the Company’s use of forward-looking terminology such as “anticipate,” “believe,” “confident,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “seek,” or “should,” or the negative thereof or other variations thereon or comparable terminology. In particular, statements about the markets in which GMS operates, including in particular residential and commercial construction, and the economy generally, end market mix, pricing, volumes, the demand for the Company’s products, including Complementary Products, free cash flow, mortgage and lending rates, the Company’s strategic priorities and the results thereof, stockholder value, performance, growth, and results thereof, and future share repurchases contained in this press release may be considered forward-looking statements. The Company has based forward-looking statements on its current expectations, assumptions, estimates and projections. While the Company believes these expectations, assumptions, estimates, and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond its control, including current and future public health issues that may affect the Company’s business. Forward-looking statements involve risks and uncertainties, including, but not limited to, those described in the “Risk Factors” section in the Company’s most recent Annual Report on Form 10-K, and in its other periodic reports filed with the SEC. In addition, the statements in this release are made as of December 5, 2024. The Company undertakes no obligation to update any of the forward-looking statements made herein, whether as a result of new information, future events, changes in expectation or otherwise. These forward-looking statements should not be relied upon as representing the Company’s views as of any date subsequent to December 5, 2024.

     

GMS Inc. Condensed Consolidated Statements of Operations (Unaudited) (in thousands, except per share data) 

 

​

Three Months Ended

 

Six Months Ended

 

October 31,

 

October 31,

​

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Net sales

$

1,470,776

 

 

$

1,420,930

 

 

$

2,919,232

 

 

$

2,830,530

 

Cost of sales (exclusive of depreciation and amortization shown separately below)

 

1,009,649

 

 

 

962,301

 

 

 

2,006,542

 

 

 

1,921,347

 

Gross profit

 

461,127

 

 

 

458,629

 

 

 

912,690

 

 

 

909,183

 

Operating expenses:

 

 

 

 

 

 

 

Selling, general and administrative

 

324,225

 

 

 

300,894

 

 

 

639,377

 

 

 

587,690

 

Depreciation and amortization

 

42,078

 

 

 

32,937

 

 

 

80,110

 

 

 

64,955

 

Total operating expenses

 

366,303

 

 

 

333,831

 

 

 

719,487

 

 

 

652,645

 

Operating income

 

94,824

 

 

 

124,798

 

 

 

193,203

 

 

 

256,538

 

Other (expense) income:

 

 

 

 

 

 

 

Interest expense

 

(23,697

)

 

 

(18,742

)

 

 

(45,910

)

 

 

(37,656

)

Write-off of debt discount and deferred financing fees

 

—

 

 

 

—

 

 

 

—

 

 

 

(1,401

)

Other income, net

 

1,299

 

 

 

2,106

 

 

 

3,327

 

 

 

4,245

 

Total other expense, net

 

(22,398

)

 

 

(16,636

)

 

 

(42,583

)

 

 

(34,812

)

Income before taxes

 

72,426

 

 

 

108,162

 

 

 

150,620

 

 

 

221,726

 

Provision for income taxes

 

18,890

 

 

 

27,205

 

 

 

39,836

 

 

 

53,939

 

Net income

$

53,536

 

 

$

80,957

 

 

$

110,784

 

 

$

167,787

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

Basic

 

39,126

 

 

 

40,466

 

 

 

39,334

 

 

 

40,608

 

Diluted

 

39,703

 

 

 

41,088

 

 

 

39,964

 

 

 

41,282

 

Net income per common share:

 

 

 

 

 

 

 

Basic

$

1.37

 

 

$

2.00

 

 

$

2.82

 

 

$

4.13

 

Diluted

$

1.35

 

 

$

1.97

 

 

$

2.77

 

 

$

4.06

 

       

GMS Inc. Condensed Consolidated Balance Sheets (Unaudited) (in thousands, except per share data) 

 

​

October 31,

2024

 

April 30,

2024

Assets

Current assets:

​

 

 

Cash and cash equivalents

$

83,928

 

 

$

166,148

 

Trade accounts and notes receivable, net of allowances of $15,984 and $16,930, respectively

 

943,682

 

 

 

849,993

 

Inventories, net

 

594,311

 

 

 

580,830

 

Prepaid expenses and other current assets

 

48,429

 

 

 

42,352

 

Total current assets

 

1,670,350

 

 

 

1,639,323

 

Property and equipment, net of accumulated depreciation of $336,513 and $309,850, respectively

 

513,650

 

 

 

472,257

 

Operating lease right-of-use assets

 

295,024

 

 

 

251,207

 

Goodwill

 

936,504

 

 

 

853,767

 

Intangible assets, net

 

562,423

 

 

 

502,688

 

Deferred income taxes

 

25,528

 

 

 

21,890

 

Other assets

 

19,530

 

 

 

18,708

 

Total assets

$

4,023,009

 

 

$

3,759,840

 

Liabilities and Stockholders’ Equity

Current liabilities:

 

 

 

Accounts payable

$

417,799

 

 

$

420,237

 

Accrued compensation and employee benefits

 

99,816

 

 

 

125,610

 

Other accrued expenses and current liabilities

 

124,315

 

 

 

111,204

 

Current portion of long-term debt

 

54,882

 

 

 

50,849

 

Current portion of operating lease liabilities

 

51,885

 

 

 

49,150

 

Total current liabilities

 

748,697

 

 

 

757,050

 

Non-current liabilities:

 

 

 

Long-term debt, less current portion

 

1,426,564

 

 

 

1,229,726

 

Long-term operating lease liabilities

 

248,006

 

 

 

204,865

 

Deferred income taxes, net

 

79,808

 

 

 

62,698

 

Other liabilities

 

50,627

 

 

 

44,980

 

Total liabilities

 

2,553,702

 

 

 

2,299,319

 

Commitments and contingencies

 

 

 

Stockholders' equity:

 

 

 

Common stock, par value $0.01 per share, 500,000 shares authorized; 38,870 and 39,754 shares issued and outstanding as of October 31, 2024 and April 30, 2024, respectively

 

389

 

 

 

397

 

Preferred stock, par value $0.01 per share, 50,000 shares authorized; 0 shares issued and outstanding as of October 31, 2024 and April 30, 2024

 

—

 

 

 

—

 

Additional paid-in capital

 

244,698

 

 

 

334,596

 

Retained earnings

 

1,267,831

 

 

 

1,157,047

 

Accumulated other comprehensive loss

 

(43,611

)

 

 

(31,519

)

Total stockholders' equity

 

1,469,307

 

 

 

1,460,521

 

Total liabilities and stockholders' equity

$

4,023,009

 

 

$

3,759,840

 

       

GMS Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) (in thousands) 

 

Six Months Ended

October 31,

​

 

2024

 

 

 

2023

 

Cash flows from operating activities:

 

 

​

Net income

$

110,784

 

 

$

167,787

 

Adjustments to reconcile net income to net cash provided by operating activities:

​

 

​

Depreciation and amortization

 

80,110

 

 

 

64,955

 

Write-off and amortization of debt discount and debt issuance costs

 

895

 

 

 

2,726

 

Equity-based compensation

 

10,358

 

 

 

10,698

 

Loss (gain) on disposal and impairment of assets

 

507

 

 

 

(441

)

Deferred income taxes

 

(4,464

)

 

 

(5,085

)

Other items, net

 

3,765

 

 

 

3,590

 

Changes in assets and liabilities net of effects of acquisitions:

​

 

​

Trade accounts and notes receivable

 

(48,203

)

 

 

(89,384

)

Inventories

 

(4,201

)

 

 

20,267

 

Prepaid expenses and other assets

 

(9,107

)

 

 

(19,578

)

Accounts payable

 

(17,848

)

 

 

(9,849

)

Accrued compensation and employee benefits

 

(25,712

)

 

 

(36,293

)

Other accrued expenses and liabilities

 

(4,222

)

 

 

15,354

 

Cash provided by operating activities

 

92,662

 

 

 

124,747

 

Cash flows from investing activities:

 

 

 

Purchases of property and equipment

 

(23,052

)

 

 

(29,546

)

Proceeds from sale of assets

 

2,322

 

 

 

1,701

 

Acquisition of businesses, net of cash acquired

 

(207,259

)

 

 

(55,964

)

Other investing activities

 

(5,200

)

 

 

—

 

Cash used in investing activities

 

(233,189

)

 

 

(83,809

)

Cash flows from financing activities:

 

 

 

Repayments on revolving credit facility

 

(828,511

)

 

 

(389,409

)

Borrowings from revolving credit facility

 

1,009,060

 

 

 

360,173

 

Payments of principal on long-term debt

 

(2,494

)

 

 

—

 

Borrowings from term loan amendment

 

—

 

 

 

288,266

 

Repayments from term loan amendment

 

—

 

 

 

(287,768

)

Payments of principal on finance lease obligations

 

(21,834

)

 

 

(19,304

)

Repurchases of common stock

 

(99,248

)

 

 

(75,356

)

Payment for debt issuance costs

 

—

 

 

 

(5,825

)

Proceeds from exercises of stock options

 

2,460

 

 

 

1,756

 

Payments for taxes related to net share settlement of equity awards

 

(4,928

)

 

 

(3,975

)

Proceeds from issuance of stock pursuant to employee stock purchase plan

 

3,207

 

 

 

2,664

 

Cash provided by (used in) financing activities

 

57,712

 

 

 

(128,778

)

Effect of exchange rates on cash and cash equivalents

 

595

 

 

 

(388

)

Decrease in cash and cash equivalents

 

(82,220

)

 

 

(88,228

)

Cash and cash equivalents, beginning of period

 

166,148

 

 

 

164,745

 

Cash and cash equivalents, end of period

$

83,928

 

 

$

76,517

 

Supplemental cash flow disclosures:

 

 

 

Cash paid for income taxes

$

46,014

 

 

$

69,224

 

Cash paid for interest

 

45,909

 

 

 

35,321

       

GMS Inc. Net Sales by Product Group (Unaudited) (dollars in thousands) 

 

Three Months Ended

 

Six Months Ended

​

October 31,

2024

 

% of

Total

 

October 31,

2023

 

% of

Total

 

October 31,

2024

 

% of

Total

 

October 31,

2023

 

% of

Total

​

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wallboard

$

582,119

 

39.6

%

 

$

585,174

 

41.2

%

 

$

1,170,048

 

40.1

%

 

$

1,156,599

 

40.9

%

Ceilings

 

204,441

 

13.9

%

 

 

175,329

 

12.3

%

 

 

411,597

 

14.1

%

 

 

350,534

 

12.4

%

Steel framing

 

217,388

 

14.8

%

 

 

232,108

 

16.3

%

 

 

427,246

 

14.6

%

 

 

468,868

 

16.6

%

Complementary products

 

466,828

 

31.7

%

 

 

428,319

 

30.1

%

 

 

910,341

 

31.2

%

 

 

854,529

 

30.2

%

Total net sales

$

1,470,776

 

 

 

$

1,420,930

 

 

 

$

2,919,232

 

 

 

$

2,830,530

 

 

   

GMS Inc. Net Sales and Organic Sales by Product Group (Unaudited) (dollars in millions) 

 

​

Net Sales

 

 

 

Organic Sales

 

 

​

Three Months Ended October 31,

 

 

 

Three Months Ended October 31,

 

 

​

2024

 

2023

 

Change

 

2024

 

2023

 

Change

Wallboard

$

582.1

 

$

585.2

 

(0.5

)%

 

$

554.7

 

$

585.2

 

(5.2

)%

Ceilings

 

204.4

 

 

175.3

 

16.6

%

 

 

178.2

 

 

175.3

 

1.6

%

Steel framing

 

217.4

 

 

232.1

 

(6.3

)%

 

 

199.6

 

 

232.1

 

(14.0

)%

Complementary products

 

466.8

 

 

428.3

 

9.0

%

 

 

422.5

 

 

428.3

 

(1.4

)%

Total net sales

$

1,470.7

 

$

1,420.9

 

3.5

%

 

$

1,355.0

 

$

1,420.9

 

(4.6

)%

   

GMS Inc. Per Day Net Sales and Per Day Organic Sales by Product Group (Unaudited) (dollars in millions) 

 

​

Per Day Net Sales

 

 

 

Per Day Organic Sales

 

 

​

Three Months Ended October 31,

 

 

 

Three Months Ended October 31,

 

 

​

2024

 

2023

 

Change

 

2024

 

2023

 

Change

Wallboard

$

9.0

 

$

9.0

 

(0.5

)%

 

$

8.5

 

$

9.0

 

(5.2

)%

Ceilings

 

3.1

 

 

2.7

 

16.6

%

 

 

2.7

 

 

2.7

 

1.6

%

Steel framing

 

3.3

 

 

3.6

 

(6.3

)%

 

 

3.1

 

 

3.6

 

(14.0

)%

Complementary products

 

7.2

 

 

6.6

 

9.0

%

 

 

6.5

 

 

6.6

 

(1.4

)%

Total net sales

$

22.6

 

$

21.9

 

3.5

%

 

$

20.8

 

$

21.9

 

(4.6

)%

   

​

Per Day Organic Growth

               

 

Three Months Ended

October 31, 2024

               

​

Volume

 

Price/Mix/Fx

               

Wallboard

(5.2

)%

 

—

%

               

Ceilings

(2.5

)%

 

4.1

%

               

Steel framing

(8.0

)%

 

(6.0

)%

               

___________________________________

(a) Given the wide breadth of offerings and units of measure in Complementary Products, detailed price vs volume reporting is not available at a consolidated level.

       

GMS Inc. Reconciliation of Net Income to Adjusted EBITDA (Unaudited) (in thousands) 

 

​

Three Months Ended

 

Six Months Ended

​

October 31,

 

October 31,

​

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

 

 

 

 

 

 

 

 

Net income

$

53,536

 

 

$

80,957

 

 

$

110,784

 

 

$

167,787

 

Interest expense

 

23,697

 

 

 

18,742

 

 

 

45,910

 

 

 

37,656

 

Write-off of debt discount and deferred financing fees

 

—

 

 

 

—

 

 

 

—

 

 

 

1,401

 

Interest income

 

(193

)

 

 

(292

)

 

 

(563

)

 

 

(766

)

Provision for income taxes

 

18,890

 

 

 

27,205

 

 

 

39,836

 

 

 

53,939

 

Depreciation expense

 

20,529

 

 

 

16,963

 

 

 

39,757

 

 

 

33,290

 

Amortization expense

 

21,549

 

 

 

15,974

 

 

 

40,353

 

 

 

31,665

 

EBITDA

$

138,008

 

 

$

159,549

 

 

$

276,077

 

 

$

324,972

 

Stock appreciation expense(a)

 

397

 

 

 

401

 

 

 

640

 

 

 

1,619

 

Redeemable noncontrolling interests and deferred compensation(b)

 

693

 

 

 

184

 

 

 

1,115

 

 

 

664

 

Equity-based compensation(c)

 

4,925

 

 

 

5,111

 

 

 

8,603

 

 

 

8,415

 

Severance and other permitted costs(d)

 

6,460

 

 

 

882

 

 

 

7,416

 

 

 

1,288

 

Transaction costs (acquisitions and other)(e)

 

1,193

 

 

 

1,223

 

 

 

2,473

 

 

 

2,608

 

(Gain) loss on disposal of assets(f)

 

(351

)

 

 

(310

)

 

 

507

 

 

 

(441

)

Effects of fair value adjustments to inventory(g)

 

106

 

 

 

140

 

 

 

481

 

 

 

442

 

Change in fair value of contingent consideration(h)

 

793

 

 

 

—

 

 

 

793

 

 

 

—

 

Debt transaction costs(i)

 

—

 

 

 

378

 

 

 

—

 

 

 

1,289

 

EBITDA adjustments

 

14,216

 

 

 

8,009

 

 

 

22,028

 

 

 

15,884

 

Adjusted EBITDA

$

152,224

 

 

$

167,558

 

 

$

298,105

 

 

$

340,856

 

​

 

 

 

 

 

 

 

Net sales

$

1,470,776

 

 

$

1,420,930

 

 

$

2,919,232

 

 

$

2,830,530

 

Adjusted EBITDA Margin

 

10.3

%

 

 

11.8

%

 

 

10.2

%

 

 

12.0

%

___________________________________

(a)

Represents changes in the fair value of stock appreciation rights.

(b)

Represents changes in the fair values of noncontrolling interests and deferred compensation agreements.

(c)

Represents non-cash equity-based compensation expense related to the issuance of share-based awards.

(d)

Represents severance expenses and certain other cost adjustments as permitted under the ABL Facility and the Term Loan Facility.

(e)

Represents costs related to acquisitions paid to third parties.

(f)

Includes gains and losses from the sale and disposal of assets.

(g)

Represents the non-cash cost of sales impact of acquisition accounting adjustments to increase inventory to its estimated fair value.

(h)

Represents the change in fair value of contingent consideration arrangements.

(i)

Represents costs paid to third-party advisors related to debt refinancing activities.

       

GMS Inc. Reconciliation of Cash Provided By Operating Activities to Free Cash Flow (Unaudited) (in thousands) 

 

​

Three Months Ended

 

Six Months Ended

​

October 31,

 

October 31,

​

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Cash provided by operating activities

$

115,601

 

 

$

118,100

 

 

$

92,662

 

 

$

124,747

 

Purchases of property and equipment

 

(14,076

)

 

 

(16,008

)

 

 

(23,052

)

 

 

(29,546

)

Free cash flow (a)

$

101,525

 

 

$

102,092

 

 

$

69,610

 

 

$

95,201

 

___________________________________

(a)

Free cash flow is a non-GAAP financial measure that we define as net cash provided by (used in) operations less capital expenditures.

       

GMS Inc. Reconciliation of Selling, General and Administrative Expense to Adjusted SG&A (Unaudited) (in thousands) 

 

​

Three Months Ended

 

Six Months Ended

​

October 31,

 

October 31,

​

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Selling, general and administrative expense

$

324,225

 

 

$

300,894

 

 

$

639,377

 

 

$

587,690

 

 

 

 

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 

Stock appreciation expense(a)

 

(397

)

 

 

(401

)

 

 

(640

)

 

 

(1,619

)

Redeemable noncontrolling interests and deferred compensation(b)

 

(693

)

 

 

(184

)

 

 

(1,115

)

 

 

(664

)

Equity-based compensation(c)

 

(4,925

)

 

 

(5,111

)

 

 

(8,603

)

 

 

(8,415

)

Severance and other permitted costs(d)

 

(6,460

)

 

 

(882

)

 

 

(7,416

)

 

 

(1,288

)

Transaction costs (acquisitions and other)(e)

 

(1,193

)

 

 

(1,223

)

 

 

(2,473

)

 

 

(2,608

)

Gain (loss) on disposal of assets(f)

 

351

 

 

 

310

 

 

 

(507

)

 

 

441

 

Debt transaction costs(g)

 

—

 

 

 

(378

)

 

 

—

 

 

 

(1,289

)

Adjusted SG&A

$

310,908

 

 

$

293,025

 

 

$

618,623

 

 

$

572,248

 

 

 

 

 

 

 

 

 

Net sales

$

1,470,776

 

 

$

1,420,930

 

 

$

2,919,232

 

 

$

2,830,530

 

Adjusted SG&A margin

 

21.1

%

 

 

20.6

%

 

 

21.2

%

 

 

20.2

%

___________________________________

(a)

Represents changes in the fair value of stock appreciation rights.

(b)

Represents changes in the fair values of noncontrolling interests and deferred compensation agreements.

(c)

Represents non-cash equity-based compensation expense related to the issuance of share-based awards.

(d)

Represents severance expenses and certain other cost adjustments as permitted under the ABL Facility and the Term Loan Facility.

(e)

Represents costs related to acquisitions paid to third parties.

(f)

Includes gains and losses from the sale and disposal of assets.

(g)

Represents costs paid to third-party advisors related to debt refinancing activities.

       

GMS Inc. Reconciliation of Income Before Taxes to Adjusted Net Income (Unaudited) (in thousands, except per share data) 

 

​

Three Months Ended

 

Six Months Ended

​

October 31,

 

October 31,

​

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

 

 

 

 

 

 

 

 

Income before taxes

$

72,426

 

 

$

108,162

 

 

$

150,620

 

 

$

221,726

 

EBITDA adjustments

 

14,216

 

 

 

8,009

 

 

 

22,028

 

 

 

15,884

 

Write-off of debt discount and deferred financing fees

 

—

 

 

 

—

 

 

 

—

 

 

 

1,401

 

Amortization expense (1)

 

21,549

 

 

 

15,974

 

 

 

40,353

 

 

 

31,665

 

Adjusted pre-tax income

 

108,191

 

 

 

132,145

 

 

 

213,001

 

 

 

270,676

 

Adjusted income tax expense

 

28,130

 

 

 

33,697

 

 

 

55,380

 

 

 

69,022

 

Adjusted net income

$

80,061

 

 

$

98,448

 

 

$

157,621

 

 

$

201,654

 

Effective tax rate (2)

 

26.0

%

 

 

25.5

%

 

 

26.0

%

 

 

25.5

%

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

Basic

 

39,126

 

 

 

40,466

 

 

 

39,334

 

 

 

40,608

 

Diluted

 

39,703

 

 

 

41,088

 

 

 

39,964

 

 

 

41,282

 

Adjusted net income per share:

 

 

 

 

 

 

 

Basic

$

2.05

 

 

$

2.43

 

 

$

4.01

 

 

$

4.97

 

Diluted

$

2.02

 

 

$

2.40

 

 

$

3.94

 

 

$

4.88

 

___________________________________

(1)

Represents all non-cash amortization resulting from business combinations. To make the financial presentation more consistent with other public building products companies, beginning in the first quarter 2025 we are now including an adjustment for all non-cash amortization expense related to acquisitions, as opposed to non-cash amortization and depreciation for select acquisitions.

(2)

Normalized cash tax rate excluding the impact of acquisition accounting and certain other deferred tax amounts.

       

GMS Inc. Reconciliation of Net Income to Pro Forma Adjusted EBITDA (Unaudited) (in thousands) 

 

​

Last Twelve Months Ended

​

October 31,

​

 

2024

 

 

 

2023

 

Net income

$

219,076

 

 

$

308,155

 

Interest expense

 

83,715

 

 

 

72,783

 

Write-off of debt discount and deferred financing fees

 

674

 

 

 

1,401

 

Interest income

 

(1,551

)

 

 

(1,843

)

Provision for income taxes

 

83,984

 

 

 

100,426

 

Depreciation expense

 

75,673

 

 

 

64,416

 

Amortization expense

 

72,844

 

 

 

62,780

 

EBITDA

$

534,415

 

 

$

608,118

 

Stock appreciation expense(a)

 

4,412

 

 

 

3,748

 

Redeemable noncontrolling interests and deferred compensation(b)

 

1,878

 

 

 

1,007

 

Equity-based compensation(c)

 

15,806

 

 

 

14,719

 

Severance and other permitted costs(d)

 

8,756

 

 

 

3,345

 

Transaction costs (acquisitions and other)(e)

 

4,721

 

 

 

3,905

 

Loss (gain) on disposal of assets(f)

 

219

 

 

 

(1,651

)

Effects of fair value adjustments to inventory(g)

 

1,672

 

 

 

1,386

 

Change in fair value of contingent consideration(h)

 

793

 

 

 

—

 

Debt transaction costs(i)

 

31

 

 

 

1,447

 

EBITDA adjustments

 

38,288

 

 

 

27,906

 

Adjusted EBITDA

 

572,703

 

 

 

636,024

 

Contributions from acquisitions(j)

 

31,032

 

 

 

11,386

 

Pro Forma Adjusted EBITDA

$

603,735

 

 

$

647,410

 

 

 

 

 

Cash and cash equivalents

$

83,928

 

 

$

76,517

 

Total debt

 

1,481,446

 

 

 

1,076,050

 

Net debt

$

1,397,518

 

 

$

999,533

 

Net debt / Pro Forma Adjusted EBITDA

 

2.3

x

 

 

1.5

x

___________________________________

(a)

Represents changes in the fair value of stock appreciation rights.

(b)

Represents changes in the fair values of noncontrolling interests and deferred compensation agreements.

(c)

Represents non-cash equity-based compensation expense related to the issuance of share-based awards.

(d)

Represents severance expenses and certain other cost adjustments as permitted under the ABL Facility and the Term Loan Facility.

(e)

Represents costs related to acquisitions paid to third parties.

(f)

Includes gains and losses from the sale and disposal of assets.

(g)

Represents the non-cash cost of sales impact of acquisition accounting adjustments to increase inventory to its estimated fair value.

(h)

Represents the change in fair value of contingent consideration arrangements.

(i)

Represents costs paid to third-party advisors related to debt refinancing activities.

(j)

Represents the pro forma impact of earnings from acquisitions from the beginning of the last twelve month period to the date of acquisition, including synergies. 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241205635786/en/

Investors: Carey Phelps ir@gms.com 770-723-3369