Record Levels of Full Year Net Sales, Net
Income, Adjusted EBITDA and Cash Flow Generation
GMS Inc. (NYSE: GMS), a leading North American specialty
building products distributor, today reported financial results for
the fourth quarter and fiscal year ended April 30, 2023.
Fourth Quarter Fiscal 2023 Highlights
(Comparisons are to the fourth quarter of fiscal 2022 unless
otherwise noted)
- Net sales of $1,304.1 million increased 1.2%; organic net sales
increased 0.7%. On a per day basis, net sales were up 2.8% and
organic net sales increased 2.2%.
- Net income of $75.6 million decreased 1.2% from $76.5 million a
year ago. Net income per diluted share of $1.80 increased from
$1.75 a year ago; Adjusted net income of $88.6 million, or $2.11
per diluted share, compared to $91.3 million, or $2.09 per diluted
share.
- Adjusted EBITDA of $154.3 million compared to $154.2 million;
Adjusted EBITDA margin was 11.8% compared to 12.0% a year ago.
- Cash provided by operating activities of $204.8 million,
compared to $199.5 million. Free cash flow of $185.4 million,
compared with $191.6 million.
- Repurchased 496,737 shares of common stock for $27.9 million at
an average cost per share of $56.15, compared to 348,197 shares for
$17.6 million at an average cost per share of $50.63 in the prior
year quarter.
- Completed two strategic acquisitions, enhancing service,
product offerings and reach in the greater Chicago and Toronto
areas; Also, opened a greenfield yard and two new AMES store
locations.
- Net debt leverage was 1.4 times as of the end of the fourth
quarter of fiscal 2023, down from 1.6 times at the end of the third
quarter of fiscal 2023 and down from 1.8 times at the end of the
fourth quarter of fiscal 2022.
Full Year Fiscal 2023 Highlights
(Comparisons are to the full year of fiscal 2022, unless
otherwise noted.)
- Net sales of $5,329.3 million increased 15.0%; organic net
sales increased 12.7%.
- Net income of $333.0 million increased 21.8% compared to net
income of $273.4 million. Net income per diluted share of $7.82
increased from $6.23 a year ago; Adjusted net income of $395.7
million increased 20.3% compared to $328.8 million. Adjusted net
income per diluted share of $9.29 increased from $7.49 a year
ago.
- Adjusted EBITDA of $665.7 million increased $98.8 million, or
17.4%; Adjusted EBITDA margin improved 30 basis points to 12.5%
from 12.2%.
- Cash provided by operating activities improved from $179.6
million a year ago to $441.7 million. Similarly, free cash flow
grew from $138.5 million in fiscal 2022 to $389.1 million.
- Repurchased 2.3 million shares of common stock for $110.6
million at an average cost per share of $48.74, compared with
715,709 shares repurchased during fiscal 2022 for $35.5 million at
an average cost per share of $49.59.
- Demonstrating the continued execution of its strategic
priorities, including Platform Expansion and Complementary Product
growth, the Company completed four acquisitions, opened six
greenfield yard locations and added 11 AMES stores to its
portfolio.
“GMS’s fourth quarter results marked a solid finish to a year of
record full-year levels of net sales, net income, adjusted EBITDA
and cash flow generation,” said John C. Turner, Jr., President and
Chief Executive Officer of GMS. “Our scale and balanced mix of
products and customers enabled us to capitalize on strong demand in
multi-family residential and continued growth in commercial. These
demand tailwinds, coupled with favorable pricing in Wallboard,
Ceilings and Complementary Products, contributed to our record
results despite significantly lower steel prices and soft
single-family residential activity in the back half of our fiscal
year. Plus, our team closed out the year with our ninth straight
quarter of year-over-year growth in Adjusted EBITDA despite having
one less selling day in the quarter.”
Turner continued, “We continued to make progress on our four
strategic priorities in fiscal 2023. Specifically, we focused on
ensuring product availability and delivering exceptional customer
service in our efforts to grow our share in our core products, and
we took steps to further expand our Complementary Products. During
the fourth quarter, we were pleased to announce the completion of
two acquisitions, a new greenfield yard location and two new AMES
store openings, all of which grow and strengthen our footprint,
scale and product offerings.”
“We ended the year with a strong balance sheet, which we believe
will enable us to continue executing our strategy and to invest in
key growth and expansion opportunities. Looking ahead, given our
scale, expertise, breadth of product offerings and commitment to
providing outstanding service, we believe we are well-positioned to
navigate the current slowdown in single-family activity and the
resultant shift in demand toward multi-family and commercial
projects. Moreover, given the limited inventory of existing homes
and the structural need for residential housing, we are also
encouraged by recent improvement in starts activity and builder
sentiment as we look later into our year.”
Fourth Quarter Fiscal 2023 Results
Net sales for the fourth quarter of fiscal 2023 of $1.30 billion
increased 1.2% as compared with the prior year quarter, primarily
due to strong levels of multi-family construction activity,
continued recovery in commercial construction and resilient pricing
in Wallboard, Ceilings and Complementary Products, partially offset
by declining single-family construction demand and lower
year-over-year prices in Steel framing. Organic net sales increased
0.7%.
Excluding the impact from one less selling day in the fourth
quarter of fiscal 2023 compared to the same period a year ago, net
sales and organic net sales were up 2.8% and 2.2%,
respectively.
Fourth quarter year-over-year sales by product category were as
follows:
- Wallboard sales of $544.7 million increased 10.9% (up 11.4% on
an organic basis).
- Ceilings sales of $155.1 million increased 4.2% (up 3.8% on an
organic basis).
- Steel framing sales of $223.8 million decreased 19.2% (down
19.1% on an organic basis).
- Complementary Product sales of $380.5 million increased 2.3%
(flat on an organic basis).
For more details on sales by product category, including per day
organic sales due to volume and/or price, mix and foreign exchange,
please refer to the tables included at the back of this press
release.
Gross profit of $424.5 million increased 2.8% compared to the
fourth quarter of fiscal 2022, and gross margin improved 50 basis
points to 32.5%, both primarily due to the successful pass through
of product price inflation, favorable product mix from strong
multi-family conditions and improving commercial Wallboard demand.
Solid, double-digit growth in the sales of certain Complementary
Products such as insulation, tools & fasteners and EIFS, along
with accretive gross margins from acquisitions were also
contributors.
Selling, general and administrative (“SG&A”) expense
leverage during the quarter was negatively impacted by deflationary
dynamics related to the price of steel and softened demand in
single-family construction, the latter of which resulted in a
relative mix shift in end market volumes. While this end market
shift was favorable to gross margin, it also requires a higher
operational cost to serve. Inflationary wages and higher facilities
costs also contributed to the year-over-year variance. As a result,
SG&A as a percentage of net sales increased 90 basis points to
21.45% for the quarter compared to 20.52% in the fourth quarter of
fiscal 2022. Adjusted SG&A expense as a percentage of net sales
of 20.89% increased 70 basis points from 20.17% in the prior year
quarter.
All in, and inclusive of a 27.5% increase in interest expense,
net income decreased 1.2% to $75.6 million compared to net income
of $76.5 million in the fourth quarter of fiscal 2022. Including
the impact of increased share repurchase activity, net income per
diluted share of $1.80 increased from $1.75 per diluted share in
the fourth quarter of fiscal 2022. Adjusted net income was $88.6
million, or $2.11 per diluted share, compared to $91.3 million, or
$2.09 per diluted share, a year ago.
Adjusted EBITDA of $154.3 million compared to $154.2 million in
the prior year quarter. Adjusted EBITDA margin of 11.8% decreased
20 basis points compared to 12.0% recorded a year ago.
Balance Sheet, Liquidity and Cash Flow
As of April 30, 2023, the Company had cash on hand of $164.7
million, total debt of $1.1 billion and $759.2 million of available
liquidity under its revolving credit facilities. Net debt leverage
was 1.4 times as of the end of the quarter, down from 1.8 times at
the end of the fourth quarter of fiscal 2022.
The Company generated cash from operating activities and free
cash flow of $204.8 million and $185.4 million, respectively, for
the quarter ended April 30, 2023. For the quarter ended April 30,
2022, the Company generated cash from operating activities and free
cash flow of $199.5 million and $191.6 million, respectively. The
increase in cash flow from operating activities was primarily due
to larger increases in inventory and accounts receivable in the
prior year period to support volume and inflationary based sales
growth and ensure product availability amid a constrained supply
chain environment.
During the quarter, the Company repurchased 496,737 shares of
common stock for $27.9 million. As of April 30, 2023, the Company
had $100.2 million of share repurchase authorization remaining.
Platform Expansion Activities
During the fourth quarter of fiscal 2023, the Company continued
the execution of its platform expansion activities with two
strategic acquisitions, both of which closed on April 3, 2023.
First, as a leading distributor of wallboard, ceilings and
related construction products to the greater Chicago, IL area, the
addition of Engler, Meier & Justus, Inc. (“EMJ”) enabled GMS to
expand its presence in that market, enhancing service levels and
extending its reach. Additionally, in the Southeastern U.S., EMJ
distributes EIFS-related products, which is one of the key product
categories that the Company is focused on growing as part of its
drive to expand its Complementary Product offerings. Second, the
acquisition of Blair Building Materials, Inc. (“Blair”) enabled the
further scaling of Complementary Products in the greater Toronto,
Canada area.
Also during this period, the Company opened a greenfield yard in
Ottawa, Canada and two AMES store locations in Myrtle Beach, SC and
Olive Branch, MS.
Subsequent Event - Refinancing Activities
On May 12, 2023, subsequent to the end of its fiscal 2023 fourth
quarter, the Company refinanced its term loan, extending its
maturity date by seven years. The new borrowings consist of a $500
million term loan facility due in 2030, which bears interest at a
floating rate per annum of SOFR plus 3.0%.
Also, in connection with the amendment to the Term Loan
Facility, the Company entered into new interest rate swap
agreements to eliminate the variability of interest payment cash
flows associated with the variable interest rates under the Term
Loan Facility and otherwise hedge exposure to future interest rate
moves.
For additional information on these transactions, please see the
Company’s Form 8-K filed on May 12, 2023.
Conference Call and Webcast
GMS will host a conference call and webcast to discuss its
results for the fourth quarter and full year fiscal 2023, which
ended on April 30, 2023, and other information related to its
business at 8:30 a.m. Eastern Time on Thursday, June 22, 2023.
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 July 22, 2023 and can be accessed at
844-512-2921 (domestic) or 412-317-6671 (international) and
entering the pass code 13738770.
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 construction products. In
addition, GMS operates over 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, service levels and the ability
to drive value and results contained in this press release may be
considered forward-looking statements. In addition, forward looking
statements may include statements regarding the Company’s
expectations concerning management’s plans for execution of a stock
repurchase program, including the maximum amount, manner and
duration of the purchase of the Company’s common stock under its
authorized stock repurchase program. 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 economic issues,
geopolitical issues, 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 June 22, 2023. 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 June 22, 2023.
GMS Inc. Condensed
Consolidated Statements of Operations (Unaudited) (in thousands,
except per share data)
Three Months Ended
Year Ended
April 30,
April 30,
2023
2022
2023
2022
Net sales
$
1,304,102
$
1,288,653
$
5,329,252
$
4,634,875
Cost of sales (exclusive of depreciation
and amortization shown separately below)
879,626
875,853
3,603,307
3,146,600
Gross profit
424,476
412,800
1,725,945
1,488,275
Operating expenses:
Selling, general and administrative
279,764
264,473
1,093,827
950,125
Depreciation and amortization
30,822
32,365
126,907
119,232
Total operating expenses
310,586
296,838
1,220,734
1,069,357
Operating income
113,890
115,962
505,211
418,918
Other (expense) income:
Interest expense
(18,184
)
(14,267
)
(65,843
)
(58,097
)
Other income, net
2,677
1,227
8,135
3,998
Total other expense, net
(15,507
)
(13,040
)
(57,708
)
(54,099
)
Income before taxes
98,383
102,922
447,503
364,819
Provision for income taxes
22,790
26,426
114,512
91,377
Net income
$
75,593
$
76,496
$
332,991
$
273,442
Weighted average common shares
outstanding:
Basic
41,239
42,977
41,904
43,075
Diluted
41,913
43,776
42,592
43,898
Net income per common share:
Basic
$
1.83
$
1.78
$
7.95
$
6.35
Diluted
$
1.80
$
1.75
$
7.82
$
6.23
GMS Inc. Condensed
Consolidated Balance Sheets (Unaudited) (in thousands, except per
share data)
April 30,
2023
April 30,
2022
Assets
Current assets:
Cash and cash equivalents
$
164,745
$
101,916
Trade accounts and notes receivable, net
of allowances of $13,636 and $9,346, respectively
792,232
750,046
Inventories, net
575,495
550,953
Prepaid expenses and other current
assets
17,051
20,212
Total current assets
1,549,523
1,423,127
Property and equipment, net of accumulated
depreciation of $264,650 and $227,288, respectively
396,419
350,679
Operating lease right-of-use assets
189,351
153,271
Goodwill
700,813
695,897
Intangible assets, net
399,660
454,747
Deferred income taxes
19,839
17,883
Other assets
11,403
8,795
Total assets
$
3,267,008
$
3,104,399
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable
$
377,003
$
367,315
Accrued compensation and employee
benefits
119,887
107,925
Other accrued expenses and current
liabilities
107,675
127,938
Current portion of long-term debt
54,035
47,605
Current portion of operating lease
liabilities
47,681
38,415
Total current liabilities
706,281
689,198
Non-current liabilities:
Long-term debt, less current portion
1,044,642
1,136,585
Long-term operating lease liabilities
141,786
112,161
Deferred income taxes, net
51,223
46,802
Other liabilities
48,319
55,155
Total liabilities
1,992,251
2,039,901
Commitments and contingencies
Stockholders' equity:
Common stock, par value $0.01 per share,
500,000 shares authorized; 40,971 and 42,773 shares issued and
outstanding as of April 30, 2023 and 2022, respectively
410
428
Preferred stock, par value $0.01 per
share, 50,000 shares authorized; 0 shares issued and outstanding as
of April 30, 2023 and 2022
—
—
Additional paid-in capital
428,508
522,136
Retained earnings
880,968
547,977
Accumulated other comprehensive loss
(35,129
)
(6,043
)
Total stockholders' equity
1,274,757
1,064,498
Total liabilities and stockholders'
equity
$
3,267,008
$
3,104,399
GMS Inc. Condensed
Consolidated Statements of Cash Flows (Unaudited) (in
thousands)
Year Ended April 30,
2023
2022
Cash flows from operating
activities:
Net income
$
332,991
$
273,442
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
126,907
119,232
Write-off and amortization of debt
discount and debt issuance costs
1,468
2,744
Equity-based compensation
22,098
17,354
Gain on disposal of assets
(1,413
)
(913
)
Deferred income taxes
220
(351
)
Other items, net
13,270
5,706
Changes in assets and liabilities net of
effects of acquisitions:
Trade accounts and notes receivable
(37,024
)
(162,118
)
Inventories
(16,802
)
(156,311
)
Prepaid expenses and other assets
1,367
(92
)
Accounts payable
6,665
28,423
Accrued compensation and employee
benefits
11,754
32,564
Other accrued expenses and liabilities
(19,764
)
19,931
Cash provided by operating activities
441,737
179,611
Cash flows from investing
activities:
Purchases of property and equipment
(52,672
)
(41,082
)
Proceeds from sale of assets
2,879
1,922
Acquisition of businesses, net of cash
acquired
(61,677
)
(348,050
)
Cash used in investing activities
(111,470
)
(387,210
)
Cash flows from financing
activities:
Repayments on revolving credit
facilities
(647,247
)
(1,178,897
)
Borrowings from revolving credit
facilities
546,113
1,390,222
Payments of principal on long-term
debt
(5,110
)
(5,110
)
Payments of principal on finance lease
obligations
(35,845
)
(31,365
)
Repurchases of common stock
(110,776
)
(35,488
)
Payment of acquisition holdback
liability
(13,500
)
—
Debt issuance costs
(3,157
)
—
Proceeds from exercises of stock
options
4,715
4,434
Payments for taxes related to net share
settlement of equity awards
(4,005
)
(2,850
)
Proceeds from issuance of stock pursuant
to employee stock purchase plan
3,203
2,332
Cash (used in) provided by financing
activities
(265,609
)
143,278
Effect of exchange rates on cash and cash
equivalents
(1,829
)
(775
)
Increase (decrease) in cash and cash
equivalents
62,829
(65,096
)
Cash and cash equivalents, beginning of
year
101,916
167,012
Cash and cash equivalents, end of year
$
164,745
$
101,916
Supplemental cash flow disclosures:
Cash paid for income taxes
$
110,366
$
86,288
Cash paid for interest
61,752
46,204
GMS Inc. Net Sales by Product
Group (Unaudited) (dollars in thousands)
Three Months Ended
Year Ended
April 30,
2023
% of
Total
April 30,
2022
% of
Total
April 30,
2023
% of
Total
April 30,
2022
% of
Total
Wallboard
$
544,684
41.8
%
$
491,062
38.1
%
$
2,151,505
40.4
%
$
1,710,851
36.9
%
Ceilings
155,135
11.9
%
148,869
11.6
%
628,821
11.8
%
567,700
12.2
%
Steel framing
223,810
17.2
%
276,901
21.5
%
1,011,309
19.0
%
1,027,941
22.2
%
Complementary products
380,473
29.1
%
371,821
28.8
%
1,537,617
28.8
%
1,328,383
28.7
%
Total net sales
$
1,304,102
$
1,288,653
$
5,329,252
$
4,634,875
GMS Inc. Net Sales and Organic
Sales by Product Group (Unaudited) (dollars in millions)
Net Sales
Organic Sales
Three Months Ended April
30,
Three Months Ended April
30,
2023
2022
Change
2023
2022
Change
Wallboard
$
544.7
$
491.1
10.9
%
$
546.8
$
491.1
11.4
%
Ceilings
155.1
148.9
4.2
%
154.5
148.9
3.8
%
Steel framing
223.8
276.9
(19.2
)%
224.0
276.9
(19.1
)%
Complementary products
380.5
371.8
2.3
%
371.7
371.8
—
%
Total net sales
$
1,304.1
$
1,288.7
1.2
%
$
1,297.0
$
1,288.7
0.7
%
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 April
30,
Three Months Ended April
30,
2023
2022
Change
2023
2022
Change
Wallboard
$
8.6
$
7.7
12.7
%
$
8.7
$
7.7
13.1
%
Ceilings
2.5
2.3
5.9
%
2.5
2.3
5.4
%
Steel framing
3.6
4.3
(17.9
)%
3.6
4.3
(17.8
)%
Complementary products
6.0
5.8
4.0
%
5.9
5.8
1.5
%
Total net sales
$
20.7
$
20.1
2.8
%
$
20.7
$
20.1
2.2
%
Per Day Organic Growth
Three Months Ended April 30,
2023
Volume
Price/Mix/Fx
Wallboard
(2.5
)%
15.7
%
Ceilings
(1.0
)%
6.4
%
Steel framing
6.4
%
(24.2
)%
GMS Inc. Reconciliation of Net
Income to Adjusted EBITDA (Unaudited) (in thousands)
Three Months Ended
Year Ended
April 30,
April 30,
2023
2022
2023
2022
Net income
$
75,593
$
76,496
$
332,991
$
273,442
Interest expense
18,184
14,267
65,843
58,097
Interest income
(897
)
(96
)
(1,287
)
(163
)
Provision for income taxes
22,790
26,426
114,512
91,377
Depreciation expense
15,964
14,993
61,177
55,437
Amortization expense
14,858
17,372
65,730
63,795
EBITDA
$
146,492
$
149,458
$
638,966
$
541,985
Stock appreciation expense(a)
1,815
1,277
7,703
4,403
Redeemable noncontrolling interests(b)
(25
)
898
1,178
1,983
Equity-based compensation(c)
3,019
2,718
13,217
10,968
Severance and other permitted costs(d)
2,372
463
2,788
1,132
Transaction costs (acquisitions and
other)(e)
807
(344
)
1,961
3,545
Gain on disposal of assets(f)
(799
)
(439
)
(1,413
)
(913
)
Effects of fair value adjustments to
inventory(g)
487
217
1,123
3,818
Debt transaction costs(h)
173
—
173
—
EBITDA adjustments
7,849
4,790
26,730
24,936
Adjusted EBITDA
$
154,341
$
154,248
$
665,696
$
566,921
Net sales
$
1,304,102
$
1,288,653
$
5,329,252
$
4,634,875
Adjusted EBITDA Margin
11.8
%
12.0
%
12.5
%
12.2
%
___________________________________
(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 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.
(h)
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
Year Ended
April 30,
April 30,
2023
2022
2023
2022
Cash provided by operating activities
$
204,810
$
199,498
$
441,737
$
179,611
Purchases of property and equipment
(19,422
)
(7,921
)
(52,672
)
(41,082
)
Free cash flow (a)
$
185,388
$
191,577
$
389,065
$
138,529
___________________________________
(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
Year Ended
April 30,
April 30,
2023
2022
2023
2022
Selling, general and administrative
expense
$
279,764
$
264,473
$
1,093,827
$
950,125
Adjustments
Stock appreciation expense(a)
(1,815
)
(1,277
)
(7,703
)
(4,403
)
Redeemable noncontrolling interests(b)
25
(898
)
(1,178
)
(1,983
)
Equity-based compensation(c)
(3,019
)
(2,718
)
(13,217
)
(10,968
)
Severance and other permitted costs(d)
(2,384
)
(476
)
(2,875
)
(1,216
)
Transaction costs (acquisitions and
other)(e)
(807
)
344
(1,961
)
(3,545
)
Gain on disposal of assets(f)
799
439
1,413
913
Debt transaction costs(g)
(173
)
—
(173
)
—
Adjusted SG&A
$
272,390
$
259,887
$
1,068,133
$
928,923
Net sales
$
1,304,102
$
1,288,653
$
5,329,252
$
4,634,875
Adjusted SG&A margin
20.9
%
20.2
%
20.0
%
20.0
%
___________________________________
(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 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 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
Year Ended
April 30,
April 30,
2023
2022
2023
2022
Income before taxes
$
98,383
$
102,922
$
447,503
$
364,819
EBITDA adjustments
7,849
4,790
26,730
24,936
Acquisition accounting depreciation and
amortization (1)
11,111
13,226
49,931
45,779
Adjusted pre-tax income
117,343
120,938
524,164
435,534
Adjusted income tax expense
28,749
29,630
128,420
106,706
Adjusted net income
$
88,594
$
91,308
$
395,744
$
328,828
Effective tax rate (2)
24.5
%
24.5
%
24.5
%
24.5
%
Weighted average shares outstanding:
Basic
41,239
42,977
41,904
43,075
Diluted
41,913
43,776
42,592
43,898
Adjusted net income per share:
Basic
$
2.15
$
2.12
$
9.44
$
7.63
Diluted
$
2.11
$
2.09
$
9.29
$
7.49
___________________________________
(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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230622787545/en/
Investors: Carey Phelps ir@gms.com 770-723-3369
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