TUCKER, Ga.--(BUSINESS WIRE)--GMS Inc. (NYSE: GMS), a leading North American specialty building products distributor, today reported financial results for the fiscal second quarter ended October 31, 2022.
Second Quarter Fiscal 2023 Highlights
(Comparisons are to the second quarter of fiscal 2022)
- Net sales of $1.43 billion increased 24.4%; organic net sales increased 22.2%.
- 11.6% volume growth in Wallboard, including the second consecutive quarterly year-over-year expansion in commercial Wallboard volume.
- Net income of $103.2 million, or $2.41 per diluted share, increased 38.7% compared to net income of $74.4 million, or $1.69 per diluted share; Adjusted net income of $119.5 million, or $2.79 per diluted share, compared to $87.8 million, or $2.00 per diluted share.
- Adjusted EBITDA of $195.5 million increased $46.0 million, or 30.7%; Adjusted EBITDA margin improved 70 basis points to 13.7% from 13.0%.
- Cash provided by operating activities increased $109.3 million to $107.3 million; Free cash flow improved $107.8 to $96.5 million.
- Net debt leverage was 1.6 times, down from 2.4 times a year ago.
“A significant backlog of homes under construction, continued strength in multi-family, and improving levels of commercial activity helped drive exceptional results for our fiscal second quarter,” said John C. Turner, Jr., President and Chief Executive Officer of GMS. “As a result, with favorable pricing across our product categories, positive volume growth in Wallboard, Ceilings and Complementary Products and the benefit of our AMES acquisition, our team achieved another quarter of record levels of net sales, net income and Adjusted EBITDA and generated significant levels of cash flow.”
Turner continued, “With significant scale, a balanced mix of commercial and residential customers and a wide breadth of product offerings, we are confident in our ability to adjust as needed to meet demand in all of our end markets and believe we are well-positioned ahead of the developing slowdown in residential single-family construction. We remain focused on the execution of our strategic priorities to expand share in our core products, grow Complementary Product offerings, expand our platform, and leverage our scale to achieve improved productivity and profitability through the use of technology and shared best practices.”
Second Quarter Fiscal 2023 Results
Net sales for the second quarter of fiscal 2023 of $1.43 billion increased 24.4% as compared with the prior year quarter, primarily due to a favorable pricing environment along with active residential construction and an improving commercial landscape, both of which helped drive volume growth in Wallboard, Ceilings and Complementary Products. The Company also benefited during the quarter from its acquisition of AMES Taping Tools in December 2021 and one additional selling day during the three months ended October 31, 2022 compared to the prior year period. Partially offsetting these increases was the negative impact of foreign currency translation on net sales during the three months ended October 31, 2022. Organic net sales, which exclude the net sales of acquired businesses until the first anniversary of the acquisition date and the impact of foreign currency translation, increased 22.2%.
Excluding the impact from one additional selling day in the second quarter of fiscal 2023 compared to the same period a year ago, net sales and organic net sales were up 22.5% and 20.3%, respectively.
Year-over-year quarterly sales increases by product category were as follows:
- Wallboard sales of $584.6 million increased 41.0% (up 41.4% on an organic basis).
- Ceilings sales of $159.6 million increased 13.3% (up 13.6% on an organic basis).
- Steel Framing sales of $278.2 million increased 2.3% (up 2.5% on an organic basis).
- Complementary Product sales of $408.7 million increased 26.5% (up 17.8% on an organic basis).
Gross profit of $464.5 million increased 24.9% compared to the second quarter of fiscal 2022 primarily due to the successful pass through of product inflation, continued strength in residential market demand, improving commercial sales, and incremental gross profit from acquisitions. Gross margin of 32.5% increased 20 basis points year-over-year with strong margins in Complementary Products and better-than-expected margins in Steel Framing on focused inventory management and project quoting as steel pricing declined during the quarter.
Selling, general and administrative (“SG&A”) expense as a percentage of net sales improved 50 basis points to 19.5% for the quarter compared to 20.0% in the second quarter of fiscal 2022. Adjusted SG&A expense as a percentage of net sales of 18.9% improved 50 basis points from 19.4% in the prior year quarter as product inflation outpaced increases in operating costs.
Net income increased 38.7% to $103.2 million, or $2.41 per diluted share, compared to net income of $74.4 million, or $1.69 per diluted share, in the second quarter of fiscal 2022. Adjusted net income was $119.5 million, or $2.79 per diluted share, compared to $87.8 million, or $2.00 per diluted share, in the second quarter of the prior fiscal year.
Adjusted EBITDA increased $46.0 million, or 30.7%, to $195.5 million compared to the prior year quarter. Adjusted EBITDA margin of 13.7% improved 70 basis points from 13.0% for the second quarter of fiscal 2022.
Balance Sheet, Liquidity and Cash Flow
As of October 31, 2022, the Company had cash on hand of $124.2 million, total debt of $1.2 billion and $293.8 million of available liquidity under its revolving credit facilities. Net debt leverage was 1.6 times as of the end of the quarter, down from 2.4 times at the end of the second quarter of fiscal 2022.
The Company recorded significantly improved levels of cash flow for the quarter. Cash provided by operating activities and free cash flow were $107.3 million and $96.5 million, respectively, for the quarter ended October 31, 2022. For the quarter ended October 31, 2021, the Company recorded cash used by operating activities and free cash flow of $2.0 million and $11.3 million, respectively.
During the quarter, the Company repurchased common stock of $25.8 million. As of October 31, 2022, the Company had $161.2 million of repurchase authorization remaining.
Conference Call and Webcast
GMS will host a conference call and webcast to discuss its results for the second quarter of fiscal 2023 ended October 31, 2022 and other information related to its business at 8:30 a.m. Eastern Time on Thursday, December 8, 2022. 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 8, 2023 and can be accessed at 844-512-2921 (domestic) or 412-317-6671 (international) and entering the pass code 13733586.
About GMS Inc.
Founded in 1971, GMS operates a network of approximately 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, pricing, the demand for the Company’s products, the Company’s strategic priorities and the results thereof, performance, service levels and the ability to drive value and results 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 8, 2022. 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 8, 2022.
GMS Inc. |
||||||||||||||||
Condensed Consolidated Statements of Operations (Unaudited) |
||||||||||||||||
(in thousands, except per share data) |
||||||||||||||||
|
Three Months Ended |
|
Six Months Ended |
|||||||||||||
|
October 31, |
|
October 31, |
|||||||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|||||||||
Net sales |
$ |
1,430,979 |
|
|
$ |
1,150,551 |
|
|
$ |
2,790,532 |
|
|
$ |
2,192,627 |
|
|
Cost of sales (exclusive of depreciation and amortization shown separately below) |
|
966,479 |
|
|
|
778,681 |
|
|
|
1,891,311 |
|
|
|
1,484,924 |
|
|
Gross profit |
|
464,500 |
|
|
|
371,870 |
|
|
|
899,221 |
|
|
|
707,703 |
|
|
Operating expenses: |
|
|
|
|
|
|
|
|||||||||
Selling, general and administrative |
|
278,994 |
|
|
|
230,531 |
|
|
|
546,683 |
|
|
|
444,612 |
|
|
Depreciation and amortization |
|
32,226 |
|
|
|
29,403 |
|
|
|
64,666 |
|
|
|
57,117 |
|
|
Total operating expenses |
|
311,220 |
|
|
|
259,934 |
|
|
|
611,349 |
|
|
|
501,729 |
|
|
Operating income |
|
153,280 |
|
|
|
111,936 |
|
|
|
287,872 |
|
|
|
205,974 |
|
|
Other (expense) income: |
|
|
|
|
|
|
|
|||||||||
Interest expense |
|
(16,055 |
) |
|
|
(14,744 |
) |
|
|
(30,716 |
) |
|
|
(28,401 |
) |
|
Other income, net |
|
1,923 |
|
|
|
938 |
|
|
|
3,492 |
|
|
|
1,730 |
|
|
Total other expense, net |
|
(14,132 |
) |
|
|
(13,806 |
) |
|
|
(27,224 |
) |
|
|
(26,671 |
) |
|
Income before taxes |
|
139,148 |
|
|
|
98,130 |
|
|
|
260,648 |
|
|
|
179,303 |
|
|
Provision for income taxes |
|
35,995 |
|
|
|
23,769 |
|
|
|
68,025 |
|
|
|
43,740 |
|
|
Net income |
$ |
103,153 |
|
|
$ |
74,361 |
|
|
$ |
192,623 |
|
|
$ |
135,563 |
|
|
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|||||||||
Basic |
|
42,232 |
|
|
|
43,135 |
|
|
|
42,390 |
|
|
|
43,112 |
|
|
Diluted |
|
42,887 |
|
|
|
43,894 |
|
|
|
43,102 |
|
|
|
43,933 |
|
|
Net income per common share: |
|
|
|
|
|
|
|
|||||||||
Basic |
$ |
2.44 |
|
|
$ |
1.72 |
|
|
$ |
4.54 |
|
|
$ |
3.14 |
|
|
Diluted |
$ |
2.41 |
|
|
$ |
1.69 |
|
|
$ |
4.47 |
|
|
$ |
3.09 |
|
|
GMS Inc. |
||||||||
Condensed Consolidated Balance Sheets (Unaudited) |
||||||||
(in thousands, except per share data) |
||||||||
|
October 31,
|
|
April 30,
|
|||||
Assets |
||||||||
Current assets: |
|
|
|
|||||
Cash and cash equivalents |
$ |
124,201 |
|
|
$ |
101,916 |
|
|
Trade accounts and notes receivable, net of allowances of $10,751 and $9,346, respectively |
|
872,882 |
|
|
|
750,046 |
|
|
Inventories, net |
|
576,388 |
|
|
|
550,953 |
|
|
Prepaid expenses and other current assets |
|
23,191 |
|
|
|
20,212 |
|
|
Total current assets |
|
1,596,662 |
|
|
|
1,423,127 |
|
|
Property and equipment, net of accumulated depreciation of $245,974 and $227,288, respectively |
|
362,983 |
|
|
|
350,679 |
|
|
Operating lease right-of-use assets |
|
149,544 |
|
|
|
153,271 |
|
|
Goodwill |
|
690,288 |
|
|
|
695,897 |
|
|
Intangible assets, net |
|
411,200 |
|
|
|
454,747 |
|
|
Deferred income taxes |
|
21,168 |
|
|
|
17,883 |
|
|
Other assets |
|
14,100 |
|
|
|
8,795 |
|
|
Total assets |
$ |
3,245,945 |
|
|
$ |
3,104,399 |
|
|
Liabilities and Stockholders’ Equity |
||||||||
Current liabilities: |
|
|
|
|||||
Accounts payable |
$ |
366,143 |
|
|
$ |
367,315 |
|
|
Accrued compensation and employee benefits |
|
90,253 |
|
|
|
107,925 |
|
|
Other accrued expenses and current liabilities |
|
137,404 |
|
|
|
127,938 |
|
|
Current portion of long-term debt |
|
47,618 |
|
|
|
47,605 |
|
|
Current portion of operating lease liabilities |
|
39,349 |
|
|
|
38,415 |
|
|
Total current liabilities |
|
680,767 |
|
|
|
689,198 |
|
|
Non-current liabilities: |
|
|
|
|||||
Long-term debt, less current portion |
|
1,166,544 |
|
|
|
1,136,585 |
|
|
Long-term operating lease liabilities |
|
108,762 |
|
|
|
112,161 |
|
|
Deferred income taxes, net |
|
47,625 |
|
|
|
46,802 |
|
|
Other liabilities |
|
58,308 |
|
|
|
55,155 |
|
|
Total liabilities |
|
2,062,006 |
|
|
|
2,039,901 |
|
|
Commitments and contingencies |
|
|
|
|||||
Stockholders' equity: |
|
|
|
|||||
Common stock, par value $0.01 per share, 500,000 shares authorized; 41,851 and 42,773 shares issued and outstanding as of October 31, 2022 and April 30, 2022, respectively |
|
418 |
|
|
|
428 |
|
|
Preferred stock, par value $0.01 per share, 50,000 shares authorized; 0 shares issued and outstanding as of October 31, 2022 and April 30, 2022 |
|
— |
|
|
|
— |
|
|
Additional paid-in capital |
|
477,558 |
|
|
|
522,136 |
|
|
Retained earnings |
|
740,600 |
|
|
|
547,977 |
|
|
Accumulated other comprehensive loss |
|
(34,637 |
) |
|
|
(6,043 |
) |
|
Total stockholders' equity |
|
1,183,939 |
|
|
|
1,064,498 |
|
|
Total liabilities and stockholders' equity |
$ |
3,245,945 |
|
|
$ |
3,104,399 |
|
|
GMS Inc. |
||||||||
Condensed Consolidated Statements of Cash Flows (Unaudited) |
||||||||
(in thousands) |
||||||||
|
Six Months Ended |
|||||||
October 31, |
||||||||
|
2022 |
|
2021 |
|||||
Cash flows from operating activities: |
|
|
|
|||||
Net income |
$ |
192,623 |
|
|
$ |
135,563 |
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities: |
|
|
|
|||||
Depreciation and amortization |
|
64,666 |
|
|
|
57,117 |
|
|
Amortization of debt discount and debt issuance costs |
|
802 |
|
|
|
1,392 |
|
|
Equity-based compensation |
|
13,322 |
|
|
|
7,951 |
|
|
Gain on disposal and impairment of assets |
|
(203 |
) |
|
|
(222 |
) |
|
Deferred income taxes |
|
(2,925 |
) |
|
|
(718 |
) |
|
Other items, net |
|
4,662 |
|
|
|
1,682 |
|
|
Changes in assets and liabilities net of effects of acquisitions: |
|
|
|
|||||
Trade accounts and notes receivable |
|
(133,445 |
) |
|
|
(147,359 |
) |
|
Inventories |
|
(32,270 |
) |
|
|
(168,519 |
) |
|
Prepaid expenses and other assets |
|
(4,913 |
) |
|
|
(216 |
) |
|
Accounts payable |
|
3,821 |
|
|
|
16,608 |
|
|
Accrued compensation and employee benefits |
|
(17,859 |
) |
|
|
(3,561 |
) |
|
Other accrued expenses and liabilities |
|
14,580 |
|
|
|
23,187 |
|
|
Cash provided by (used in) operating activities |
|
102,861 |
|
|
|
(77,095 |
) |
|
Cash flows from investing activities: |
|
|
|
|||||
Purchases of property and equipment |
|
(21,670 |
) |
|
|
(16,119 |
) |
|
Proceeds from sale of assets |
|
896 |
|
|
|
466 |
|
|
Acquisition of businesses, net of cash acquired |
|
(2,620 |
) |
|
|
(124,976 |
) |
|
Cash used in investing activities |
|
(23,394 |
) |
|
|
(140,629 |
) |
|
Cash flows from financing activities: |
|
|
|
|||||
Repayments on revolving credit facilities |
|
(251,247 |
) |
|
|
(442,442 |
) |
|
Borrowings from revolving credit facilities |
|
280,113 |
|
|
|
583,233 |
|
|
Payments of principal on long-term debt |
|
(2,555 |
) |
|
|
(2,555 |
) |
|
Payments of principal on finance lease obligations |
|
(16,450 |
) |
|
|
(15,154 |
) |
|
Repurchases of common stock |
|
(49,571 |
) |
|
|
(13,124 |
) |
|
Payment of acquisition holdback liability |
|
(13,500 |
) |
|
|
— |
|
|
Proceeds from exercises of stock options |
|
701 |
|
|
|
1,840 |
|
|
Payments for taxes related to net share settlement of equity awards |
|
(3,960 |
) |
|
|
(2,835 |
) |
|
Proceeds from issuance of stock pursuant to employee stock purchase plan |
|
1,329 |
|
|
|
1,140 |
|
|
Cash (used in) provided by financing activities |
|
(55,140 |
) |
|
|
110,103 |
|
|
Effect of exchange rates on cash and cash equivalents |
|
(2,042 |
) |
|
|
(81 |
) |
|
Increase (decrease) in cash and cash equivalents |
|
22,285 |
|
|
|
(107,702 |
) |
|
Cash and cash equivalents, beginning of period |
|
101,916 |
|
|
|
167,012 |
|
|
Cash and cash equivalents, end of period |
$ |
124,201 |
|
|
$ |
59,310 |
|
|
Supplemental cash flow disclosures: |
|
|
|
|||||
Cash paid for income taxes |
$ |
60,792 |
|
|
$ |
37,784 |
|
|
Cash paid for interest |
|
29,268 |
|
|
|
17,596 |
|
|
GMS Inc. |
||||||||||||||||||||||||
Net Sales by Product Group (Unaudited) |
||||||||||||||||||||||||
(dollars in thousands) |
||||||||||||||||||||||||
|
Three Months Ended |
|
Six Months Ended |
|||||||||||||||||||||
|
October 31,
|
|
% of
|
|
October 31,
|
|
% of
|
|
October 31,
|
|
% of
|
|
October 31,
|
|
% of
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Wallboard |
$ |
584,557 |
|
40.9 |
% |
|
$ |
414,522 |
|
36.0 |
% |
|
$ |
1,106,111 |
|
39.6 |
% |
|
$ |
804,657 |
|
36.7 |
% |
|
Ceilings |
|
159,601 |
|
11.2 |
% |
|
|
140,866 |
|
12.2 |
% |
|
|
326,876 |
|
11.7 |
% |
|
|
278,937 |
|
12.7 |
% |
|
Steel framing |
|
278,152 |
|
19.4 |
% |
|
|
272,000 |
|
23.6 |
% |
|
|
553,048 |
|
19.8 |
% |
|
|
468,276 |
|
21.4 |
% |
|
Complementary products |
|
408,669 |
|
28.6 |
% |
|
|
323,163 |
|
28.2 |
% |
|
|
804,497 |
|
28.8 |
% |
|
|
640,757 |
|
29.2 |
% |
|
Total net sales |
$ |
1,430,979 |
|
|
|
$ |
1,150,551 |
|
|
|
$ |
2,790,532 |
|
|
|
$ |
2,192,627 |
|
|
|||||
GMS Inc. |
||||||||||||||||
Reconciliation of Net Income to Adjusted EBITDA (Unaudited) |
||||||||||||||||
(in thousands) |
||||||||||||||||
|
Three Months Ended |
|
Six Months Ended |
|||||||||||||
|
October 31, |
|
October 31, |
|||||||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income |
$ |
103,153 |
|
|
$ |
74,361 |
|
|
$ |
192,623 |
|
|
$ |
135,563 |
|
|
Interest expense |
|
16,055 |
|
|
|
14,744 |
|
|
|
30,716 |
|
|
|
28,401 |
|
|
Interest income |
|
(154 |
) |
|
|
(27 |
) |
|
|
(210 |
) |
|
|
(27 |
) |
|
Provision for income taxes |
|
35,995 |
|
|
|
23,769 |
|
|
|
68,025 |
|
|
|
43,740 |
|
|
Depreciation expense |
|
15,058 |
|
|
|
13,703 |
|
|
|
30,051 |
|
|
|
26,628 |
|
|
Amortization expense |
|
17,168 |
|
|
|
15,700 |
|
|
|
34,615 |
|
|
|
30,489 |
|
|
EBITDA |
$ |
187,275 |
|
|
$ |
142,250 |
|
|
$ |
355,820 |
|
|
$ |
264,794 |
|
|
Stock appreciation expense(a) |
|
3,230 |
|
|
|
983 |
|
|
|
5,574 |
|
|
|
1,875 |
|
|
Redeemable noncontrolling interests and deferred compensation(b) |
|
340 |
|
|
|
593 |
|
|
|
835 |
|
|
|
903 |
|
|
Equity-based compensation(c) |
|
3,781 |
|
|
|
3,215 |
|
|
|
6,913 |
|
|
|
5,173 |
|
|
Severance and other permitted costs(d) |
|
379 |
|
|
|
249 |
|
|
|
731 |
|
|
|
396 |
|
|
Transaction costs (acquisitions and other)(e) |
|
292 |
|
|
|
2,393 |
|
|
|
678 |
|
|
|
2,968 |
|
|
(Gain) loss on disposal of assets(f) |
|
81 |
|
|
|
(144 |
) |
|
|
(203 |
) |
|
|
(222 |
) |
|
Effects of fair value adjustments to inventory(g) |
|
135 |
|
|
|
— |
|
|
|
179 |
|
|
|
1,731 |
|
|
EBITDA addbacks |
|
8,238 |
|
|
|
7,289 |
|
|
|
14,707 |
|
|
|
12,824 |
|
|
Adjusted EBITDA |
$ |
195,513 |
|
|
$ |
149,539 |
|
|
$ |
370,527 |
|
|
$ |
277,618 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Net sales |
$ |
1,430,979 |
|
|
$ |
1,150,551 |
|
|
$ |
2,790,532 |
|
|
$ |
2,192,627 |
|
|
Adjusted EBITDA Margin |
|
13.7 |
% |
|
|
13.0 |
% |
|
|
13.3 |
% |
|
|
12.7 |
% |
|
___________________________________
(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 other costs permitted in the calculation of Adjusted EBITDA 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. |
| GMS Inc. | ||||||||||||||||
Reconciliation of Cash Provided By (Used In) Operating Activities to Free Cash Flow (Unaudited) |
||||||||||||||||
(in thousands) |
||||||||||||||||
|
Three Months Ended |
|
Six Months Ended |
|||||||||||||
|
October 31, |
|
October 31, |
|||||||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|||||||||
Cash provided by (used in) operating activities |
$ |
107,264 |
|
|
$ |
(2,018 |
) |
|
$ |
102,861 |
|
|
$ |
(77,095 |
) |
|
Purchases of property and equipment |
|
(10,727 |
) |
|
|
(9,305 |
) |
|
|
(21,670 |
) |
|
|
(16,119 |
) |
|
Free cash flow (a) |
$ |
96,537 |
|
|
$ |
(11,323 |
) |
|
$ |
81,191 |
|
|
$ |
(93,214 |
) |
|
________________________________________
(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, |
|||||||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|||||||||
Selling, general and administrative expense |
$ |
278,994 |
|
|
$ |
230,531 |
|
|
$ |
546,683 |
|
|
$ |
444,612 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Adjustments |
|
|
|
|
|
|
|
|||||||||
Stock appreciation expense(a) |
|
(3,230 |
) |
|
|
(983 |
) |
|
|
(5,574 |
) |
|
|
(1,875 |
) |
|
Redeemable noncontrolling interests and deferred compensation(b) |
|
(340 |
) |
|
|
(593 |
) |
|
|
(835 |
) |
|
|
(903 |
) |
|
Equity-based compensation(c) |
|
(3,781 |
) |
|
|
(3,215 |
) |
|
|
(6,913 |
) |
|
|
(5,173 |
) |
|
Severance and other permitted costs(d) |
|
(411 |
) |
|
|
(251 |
) |
|
|
(748 |
) |
|
|
(412 |
) |
|
Transaction costs (acquisitions and other)(e) |
|
(292 |
) |
|
|
(2,393 |
) |
|
|
(678 |
) |
|
|
(2,968 |
) |
|
Gain (loss) on disposal of assets(f) |
|
(81 |
) |
|
|
144 |
|
|
|
203 |
|
|
|
222 |
|
|
Adjusted SG&A |
$ |
270,859 |
|
|
$ |
223,240 |
|
|
$ |
532,138 |
|
|
$ |
433,503 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Net sales |
$ |
1,430,979 |
|
|
$ |
1,150,551 |
|
|
$ |
2,790,532 |
|
|
$ |
2,192,627 |
|
|
Adjusted SG&A margin |
|
18.9 |
% |
|
|
19.4 |
% |
|
|
19.1 |
% |
|
|
19.8 |
% |
|
___________________________________
(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 other costs permitted in the calculation of Adjusted EBITDA 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. |
| 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, |
|||||||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|||||||||
|
|
|
|
|
|
|
|
|||||||||
Income before taxes |
$ |
139,148 |
|
|
$ |
98,130 |
|
|
$ |
260,648 |
|
|
$ |
179,303 |
|
|
EBITDA add-backs |
|
8,238 |
|
|
|
7,289 |
|
|
|
14,707 |
|
|
|
12,824 |
|
|
Acquisition accounting depreciation and amortization (1) |
|
13,057 |
|
|
|
10,811 |
|
|
|
26,335 |
|
|
|
21,129 |
|
|
Adjusted pre-tax income |
|
160,443 |
|
|
|
116,230 |
|
|
|
301,690 |
|
|
|
213,256 |
|
|
Adjusted income tax expense |
|
40,913 |
|
|
|
28,476 |
|
|
|
76,931 |
|
|
|
52,248 |
|
|
Adjusted net income |
$ |
119,530 |
|
|
$ |
87,754 |
|
|
$ |
224,759 |
|
|
$ |
161,008 |
|
|
Effective tax rate (2) |
|
25.5 |
% |
|
|
24.5 |
% |
|
|
25.5 |
% |
|
|
24.5 |
% |
|
|
|
|
|
|
|
|
|
|||||||||
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|||||||||
Basic |
|
42,232 |
|
|
|
43,135 |
|
|
|
42,390 |
|
|
|
43,112 |
|
|
Diluted |
|
42,887 |
|
|
|
43,894 |
|
|
|
43,102 |
|
|
|
43,933 |
|
|
Adjusted net income per share: |
|
|
|
|
|
|
|
|||||||||
Basic |
$ |
2.83 |
|
|
$ |
2.03 |
|
|
$ |
5.30 |
|
|
$ |
3.73 |
|
|
Diluted |
$ |
2.79 |
|
|
$ |
2.00 |
|
|
$ |
5.21 |
|
|
$ |
3.66 |
|
|
________________________________________
(1) |
Depreciation and amortization from the increase in value of certain long-term assets associated with the April 1, 2014 acquisition of the predecessor company and amortization of intangible assets from the acquisitions of Titan, Westside Building Material and Ames Taping Tools. |
|
|
||
(2) |
Normalized cash tax rate excluding the impact of acquisition accounting and certain other deferred tax amounts. |
