GMS Reports Fourth Quarter and Fiscal Year 2024 Results

Volume Growth Across All Four Major Product Categories Drove Record Levels of Full Year Net Sales and Strong Cash Flow

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, 2024.

Fourth Quarter Fiscal 2024 Highlights

(Comparisons are to the fourth quarter of fiscal 2023 unless otherwise noted)

Net sales of $1,413.0 million increased 8.4% as volume growth across the major product lines was partially offset by Steel price deflation; organic net sales increased 4.0%. On a per day basis, net sales were up 6.7% and organic net sales increased 2.4%.
Net income of $56.4 million, which was impacted by an increase of $5.9 million in additional tax and financing expenses, decreased 25.4% from $75.6 million. Net income per diluted share of $1.39, compared to $1.80. Net income margin was 4.0% compared to 5.8%; Adjusted net income of $78.1 million, or $1.93 per diluted share, compared to $88.6 million, or $2.11 per diluted share.
Adjusted EBITDA of $146.6 million compared to $154.3 million; Adjusted EBITDA margin was 10.4% compared to 11.8%.
Cash provided by operating activities of $204.2 million, compared to $204.8 million. Free cash flow of $186.7 million, compared with $185.4 million.
Repurchased 174,555 shares of common stock for $16.0 million at an average cost per share of $91.86, compared to 496,737 shares of common stock for $27.9 million at an average cost per share of $56.15.
Completed the acquisition of Kamco Supply Corporation (“Kamco”), meaningfully expanding the Company’s presence in New York City.
Net debt leverage was 1.7 times Adjusted EBITDA as of the end of the fourth quarter of fiscal 2024 following the acquisition of Kamco, up from 1.5 times Adjusted EBITDA at the end of the third quarter of fiscal 2024 and 1.4 times at the end of the fourth quarter of fiscal 2023.

Full Year Fiscal 2024 Highlights

(Comparisons are to the full year of fiscal 2023, unless otherwise noted)

Net sales of $5,501.9 million increased 3.2%; organic net sales increased 0.3%. On a per day basis, net sales were up 2.4% and organic net sales were down 0.5%.
Net income of $276.1 million decreased 17.1% compared to net income of $333.0 million. Net income per diluted share of $6.75 decreased from $7.82. Net income margin was 5.0% compared to 6.2%; Adjusted net income of $337.3 million decreased 14.8% compared to $395.7 million. Adjusted net income per diluted share of $8.25 compared to $9.29.
Adjusted EBITDA of $615.5 million decreased $50.2 million, or 7.5%; Adjusted EBITDA margin decreased 130 basis points to 11.2% from 12.5%.
Cash provided by operating activities of $433.2 million, compared to $441.7 million. Free cash flow of $376.0 million, compared to $389.1 million.
Repurchased 1.7 million shares of common stock for $115.6 million at an average cost per share of $67.93, compared to 2.3 million shares of common stock for $110.6 million at an average cost per share of $48.74.
Successfully repriced the Company’s Term Loan B, resulting in an expected $3.7 million annualized interest expense savings as compared to the prior terms, or an expected annual $2.6 million benefit to net income.
Demonstrating the continued execution of our strategic priorities, including platform expansion and Complementary Products growth, the Company completed three strategic acquisitions and opened five greenfield yard locations.

“We were pleased to deliver solid results for our fourth quarter and full year fiscal 2024, including record levels of net sales for the year,” said John C. Turner, Jr, President and Chief Executive Officer of GMS. “Versus prior year, despite lower single-family full year demand, we delivered volume growth across all our major product categories, which helped offset significant Steel price deflation that occurred at levels beyond our prior expectations. Solid levels of multi-family construction remained in backlog and commercial project activity continued through the end of our fiscal year. Plus, single-family year-over-year Wallboard volume growth for the fourth quarter turned positive for the first time since the fall of 2022. We believe this indicates the start of a mild recovery in an end market that, with considerable pent-up demand, remains poised for a more robust recovery with the expected eventual relief in mortgage rates.”

Turner continued, “As we move into fiscal 2025, we believe we are well prepared for what we expect to be continued changes in end market dynamics, as an improving single-family end market should help to offset declining multi-family, and likely commercial, demand as we move throughout the year. While we now anticipate some near-term headwinds, particularly in Wallboard and Steel margins, we expect to deliver improvement in our second quarter and solid results for the full fiscal year. With the typical 3-to-6 month lag in the realization of Wallboard price increases, we expect to see benefits from the implementation of the previously announced pricing actions later this summer. Also, we anticipate recent Steel manufacturer price increases to improve stabilization in pricing for that product category, which has softened further into our first fiscal quarter of 2025, pressuring both our top line and our profitability for the quarter. Leveraging the benefits of our scale, a wide breadth of product offerings and a balanced mix of end markets served, we expect to successfully navigate these shifts in end market demand and price movement during the year, all while continuing to focus on providing outstanding service and continuing the execution of our strategic priorities.”

Fourth Quarter Fiscal 2024 Results

(Comparisons are to the fourth quarter of fiscal 2023 unless otherwise noted)

Net sales for the fourth quarter of fiscal 2024 of $1.41 billion increased 8.4%, or 6.7% on a same day basis, primarily due to volume growth in each of the Company’s four primary product categories as commercial, single-family and multi-family each showed improvement in demand over the prior year quarter. This was the first quarter of positive year-over-year growth in single-family Wallboard volume since the fall of 2022. Offsetting the volume growth was significant year-over-year Steel price deflation, which reduced net sales by an estimated $29 million for the quarter. Organic net sales increased 4.0% in total or 2.4% on a same day basis.

Fourth quarter year-over-year sales by product category were as follows1:

· Wallboard sales of $586.1 million increased 7.6% (up 6.0% on an organic basis).

· Ceilings sales of $188.9 million increased 21.7% (up 11.4% on an organic basis).

· Steel framing sales of $220.5 million decreased 1.5% (down 5.1% on an organic basis).

· Complementary product sales of $417.6 million increased 9.8% (up 3.5% on an organic basis).

________________________________________

1 For more details on sales by product category, including per day organic sales change 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 $451.2 million increased 6.3%, primarily due to the favorable impact of our recent acquisitions and the improved volumes we delivered during the quarter. Gross margin decreased 60 basis points to 31.9%, primarily due to the impact of continuing Steel price deflation. Gross margin also includes the negative impact of non-cash purchase accounting adjustments of $1.2 million, compared to $0.5 million.

Selling, general and administrative (“SG&A”) expenses were $315.5 million for the quarter, up from $279.8 million primarily related to our recent acquisitions and greenfield yard openings. Also contributing to the higher SG&A expenses were increased labor costs associated with our improved volume levels across all four of our major product categories, coupled with some inflationary pressures in wages and benefits.

SG&A expense as a percentage of net sales increased 80 basis points to 22.3% for the quarter compared to 21.5%. Reduced revenue from price deflation negatively impacted SG&A leverage by an estimated 55 basis points. Increased wages, benefits and other costs resulting mostly from improved volumes as well as some inflationary pressures in those costs, negatively impacted SG&A leverage by an estimated 15 basis points, and approximately 10 basis points of the remaining variance was primarily due to our recent acquisitions and greenfield yard openings. Adjusted SG&A expense as a percentage of net sales of 21.8% increased 90 basis points from 20.9%.

All in, inclusive of a 4.6% increase in interest expense and a 17.1% increase in income tax expense, net income decreased 25.4% to $56.4 million compared to net income of $75.6 million. Net income per diluted share of $1.39 decreased from $1.80 per diluted share. Adjusted net income was $78.1 million, or $1.93 per diluted share, compared to $88.6 million, or $2.11 per diluted share.

Adjusted EBITDA of $146.6 million compared to $154.3 million. Adjusted EBITDA margin of 10.4% decreased 140 basis points compared to 11.8%.

Balance Sheet, Liquidity and Cash Flow

As of April 30, 2024, the Company had cash on hand of $166.1 million, total debt of $1.3 billion and $655.9 million of available liquidity under its revolving credit facilities. Net debt leverage was 1.7 times Adjusted EBITDA as of the end of the quarter, up from 1.4 times Adjusted EBITDA at the end of the fourth quarter of fiscal 2023.

The Company generated cash from operating activities and free cash flow of $204.2 million and $186.7 million, respectively, for the quarter ended April 30, 2024. For the quarter ended April 30, 2023, the Company generated cash from operating activities and free cash flow of $204.8 million and $185.4 million, respectively.

During the quarter, the Company repurchased 174,555 shares of common stock for $16.0 million. As of April 30, 2024, the Company had $200.5 million of share repurchase authorization remaining.

Platform Expansion Activities

During the fourth quarter of fiscal 2024, the Company continued the execution of its platform expansion activities with the closing of its previously announced acquisition of Kamco Supply Corporation, representing a meaningful expansion for GMS into the New York City market.

Subsequent Event - Platform Expansion

On May 16, 2024, GMS announced that it had entered into an agreement to acquire Yvon Building Supply, Inc. and affiliated companies (“Yvon”) for an aggregate purchase price up to CAD$196.5 million. With seven locations across Ontario, Canada, Yvon provides Wallboard, insulation, Steel Framing, Ceilings and other Complementary Products and related services. This transaction is expected to close in July 2024. Also in May 2024, the Company acquired Howard & Sons Building Materials, Inc., a single location distributor of Wallboard, Steel framing and Complementary Products in Pomona, California.

Conference Call and Webcast

GMS will host a conference call and webcast to discuss its results for the fourth quarter and full year fiscal 2024, which ended on April 30, 2024, and other information related to its business at 8:30 a.m. Eastern Time on Thursday, June 20, 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 July 20, 2024 and can be accessed at 844-512-2921 (domestic) or 412-317-6671 (international) and entering the pass code 13746741.

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 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, including interest rates, pricing including, by not limited to, the ability to implement and maintain manufacturers’ price increases, commodities 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 20, 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 June 20, 2024.

GMS Inc.

Condensed Consolidated Statements of Operations (Unaudited)

(in thousands, except per share data)

Three Months Ended

Year Ended

April 30,

2024

2023

2024

2023

Net sales

1,413,029

1,304,102

5,501,907

5,329,252

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

961,831

879,626

3,726,806

3,603,307

Gross profit

451,198

424,476

1,775,101

1,725,945

Operating expenses:

Selling, general and administrative

315,518

279,764

1,198,899

1,093,827

Depreciation and amortization

35,603

30,822

133,362

126,907

Total operating expenses

351,121

310,586

1,332,261

1,220,734

Operating income

100,077

113,890

442,840

505,211

Other (expense) income:

Interest expense

(19,021

)

(18,184

)

(75,461

)

(65,843

)

Write-off of debt discount and deferred financing fees

(674

)

—

(2,075

)

—

Other income, net

2,685

2,677

8,862

8,135

Total other expense, net

(17,010

)

(15,507

)

(68,674

)

(57,708

)

Income before taxes

83,067

98,383

374,166

447,503

Provision for income taxes

26,680

22,790

98,087

114,512

Net income

56,387

75,593

276,079

332,991

Weighted average common shares outstanding:

Basic

39,830

41,239

40,229

41,904

Diluted

40,539

41,913

40,906

42,592

Net income per common share:

Basic

1.42

1.83

6.86

7.95

Diluted

1.39

1.80

6.75

7.82

GMS Inc.

Condensed Consolidated Balance Sheets (Unaudited)

(in thousands, except per share data)

April 30, 2024

April 30, 2023

Assets

Current assets:

Cash and cash equivalents

166,148

164,745

Trade accounts and notes receivable, net of allowances of $16,930 and $13,636, respectively

849,993

792,232

Inventories, net

580,830

575,495

Prepaid expenses and other current assets

42,352

17,051

Total current assets

1,639,323

1,549,523

Property and equipment, net of accumulated depreciation of $309,850 and $264,650, respectively

472,257

396,419

Operating lease right-of-use assets

251,207

189,351

Goodwill

853,767

700,813

Intangible assets, net

502,688

399,660

Deferred income taxes

21,890

19,839

Other assets

18,708

11,403

Total assets

3,759,840

3,267,008

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable

420,237

377,003

Accrued compensation and employee benefits

125,610

119,887

Other accrued expenses and current liabilities

111,204

107,675

Current portion of long-term debt

50,849

54,035

Current portion of operating lease liabilities

49,150

47,681

Total current liabilities

757,050

706,281

Non-current liabilities:

Long-term debt, less current portion

1,229,726

1,044,642

Long-term operating lease liabilities

204,865

141,786

Deferred income taxes, net

62,698

51,223

Other liabilities

44,980

48,319

Total liabilities

2,299,319

1,992,251

Commitments and contingencies

Stockholders' equity:

Common stock, par value $0.01 per share, 500,000 shares authorized; 39,754 and 40,971 shares issued and outstanding as of April 30, 2024 and 2023, respectively

397

410

Preferred stock, par value $0.01 per share, 50,000 shares authorized; 0 shares issued and outstanding as of April 30, 2024 and 2023

—

Additional paid-in capital

334,596

428,508

Retained earnings

1,157,047

880,968

Accumulated other comprehensive loss

(31,519

)

(35,129

)

Total stockholders' equity

1,460,521

1,274,757

Total liabilities and stockholders' equity

3,759,840

3,267,008

GMS Inc.

Condensed Consolidated Statements of Cash Flows (Unaudited)

(in thousands)

Year Ended April 30,

2024

2023

Cash flows from operating activities:

Net income

276,079

332,991

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

Depreciation and amortization

133,362

126,907

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

4,704

1,468

Equity-based compensation

22,436

22,098

Gain on disposal of assets

(729

)

(1,413

)

Deferred income taxes

3,685

220

Other items, net

8,766

13,270

Changes in assets and liabilities net of effects of acquisitions:

Trade accounts and notes receivable

(26,573

)

(37,024

)

Inventories

17,067

(16,802

)

Prepaid expenses and other assets

(18,652

)

1,367

Accounts payable

22,147

6,665

Accrued compensation and employee benefits

5,795

11,754

Other accrued expenses and liabilities

(14,838

)

(19,764

)

Cash provided by operating activities

433,249

441,737

Cash flows from investing activities:

Purchases of property and equipment

(57,247

)

(52,672

)

Proceeds from sale of assets

2,668

2,879

Acquisition of businesses, net of cash acquired

(376,192

)

(61,677

)

Cash used in investing activities

(430,771

)

(111,470

)

Cash flows from financing activities:

Repayments on revolving credit facility

(605,409

)

(647,247

)

Borrowings from revolving credit facility

765,373

546,113

Payments of principal on long-term debt

(2,500

)

(5,110

)

Payments of principal on finance lease obligations

(41,786

)

(35,845

)

Borrowings from term loan amendments

390,574

—

Repayments of term loan amendments

(390,076

)

—

Repurchases of common stock

(116,439

)

(110,776

)

Payment of acquisition holdback liability

—

(13,500

)

Debt issuance costs

(7,070

)

(3,157

)

Proceeds from exercises of stock options

6,336

4,715

Payments for taxes related to net share settlement of equity awards

(4,026

)

(4,005

)

Proceeds from issuance of stock pursuant to employee stock purchase plan

4,586

3,203

Cash used in financing activities

(437

)

(265,609

)

Effect of exchange rates on cash and cash equivalents

(638

)

(1,829

)

Increase in cash and cash equivalents

1,403

62,829

Cash and cash equivalents, beginning of year

164,745

101,916

Cash and cash equivalents, end of year

166,148

164,745

Supplemental cash flow disclosures:

Cash paid for income taxes

120,352

110,366

Cash paid for interest

70,798

61,752

GMS Inc.

Net Sales by Product Group (Unaudited)

(dollars in thousands)

Three Months Ended

Year Ended

April 30, 2024

% of Total

April 30, 2023

% of Total

April 30, 2024

% of Total

April 30, 2023

% of Total

Wallboard

586,052

41.5

544,684

41.8

2,263,337

41.1

2,151,505

40.4

Ceilings

188,873

13.4

155,135

11.9

695,151

12.6

628,821

11.8

Steel framing

220,499

15.6

223,810

17.2

892,730

16.2

1,011,309

19.0

Complementary products

417,605

29.5

380,473

29.1

1,650,689

29.9

1,537,617

28.9

Total net sales

1,413,029

1,304,102

5,501,907

5,329,252

GMS Inc.

Net Sales and Organic Sales by Product Group (Unaudited)

(dollars in millions)

Net Sales

Organic Sales

Three Months Ended April 30,

2024

2023

Change

2024

2023

Change

Wallboard

586.0

544.7

7.6

577.4

544.7

6.0

Ceilings

188.9

155.1

21.7

172.8

155.1

11.4

Steel framing

220.5

223.8

(1.5

212.4

223.8

(5.1

Complementary products

417.6

380.5

9.8

393.7

380.5

3.5

Total net sales

1,413.0

1,304.1

8.4

1,356.3

1,304.1

4.0

Net Sales

Organic Sales

Year Ended April 30,

2024

2023

Change

2024

2023

Change

Wallboard

2,263.3

2,151.5

5.2

2,248.1

2,151.5

4.5

Ceilings

695.2

628.8

10.6

667.4

628.8

6.1

Steel framing

892.7

1,011.3

(11.7

877.6

1,011.3

(13.2

Complementary products

1,650.7

1,537.6

7.4

1,554.0

1,537.6

1.1

Total net sales

5,501.9

5,329.2

3.2

5,347.1

5,329.2

0.3

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,

2024

2023

Change

2024

2023

Change

Wallboard

9.2

8.6

5.9

9.0

8.6

4.3

Ceilings

3.0

2.5

19.8

2.7

2.5

9.7

Steel framing

3.4

3.6

(3.0

3.3

3.6

(6.6

Complementary products

6.5

6.0

8.0

6.2

6.0

1.9

Total net sales

22.1

20.7

6.7

21.2

20.7

2.4

Per Day Net Sales

Per Day Organic Sales

Year Ended April 30,

2024

2023

Change

2024

2023

Change

Wallboard

8.9

8.5

4.4

8.8

8.5

3.7

Ceilings

2.7

2.5

9.7

2.6

2.5

5.3

Steel framing

3.5

4.0

(12.4

3.4

4.0

(13.9

Complementary products

6.5

6.1

6.5

6.1

0.3

Total net sales

21.6

21.1

2.4

20.9

21.1

(0.5

Per Day Organic Growth(a)

Three Months Ended April 30, 2024

Year Ended April 30, 2024

Volume

Price/Mix/Fx

Volume

Price/Mix/Fx

Wallboard

6.3

(1.9

2.0

1.7

Ceilings

5.5

4.2

3.5

1.8

Steel framing

6.9

(13.5

10.8

(24.7

________________________________________

(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

Year Ended

April 30,

2024

2023

2024

2023

Net income

56,387

75,593

276,079

332,991

Interest expense

19,021

18,184

75,461

65,843

Write-off of debt discount and deferred financing fees

674

—

2,075

—

Interest income

(610

)

(897

)

(1,754

)

(1,287

)

Provision for income taxes

26,680

22,790

98,087

114,512

Depreciation expense

18,640

15,964

69,206

61,177

Amortization expense

16,963

14,858

64,156

65,730

EBITDA

137,755

146,492

583,310

638,966

Stock appreciation expense(a)

1,983

1,815

5,391

7,703

Redeemable noncontrolling interests(b)

302

(25

)

1,427

1,178

Equity-based compensation(c)

3,644

3,019

15,618

13,217

Severance and other permitted costs(d)

307

2,372

2,628

2,788

Transaction costs (acquisitions and other)(e)

1,483

807

4,856

1,961

Gain on disposal of assets(f)

(66

)

(799

)

(729

)

(1,413

)

Effects of fair value adjustments to inventory(g)

1,183

487

1,633

1,123

Debt transaction costs(h)

(13

)

173

1,320

173

EBITDA adjustments

8,823

7,849

32,144

26,730

Adjusted EBITDA

146,578

154,341

615,454

665,696

Net sales

1,413,029

1,304,102

5,501,907

5,329,252

Adjusted EBITDA Margin

10.4

11.8

11.2

12.5

___________________________________

(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,

2024

2023

2024

2023

Cash provided by operating activities

204,223

204,810

433,249

441,737

Purchases of property and equipment

(17,519

)

(19,422

)

(57,247

)

(52,672

)

Free cash flow (a)

186,704

185,388

376,002

389,065

________________________________________

(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,

2024

2023

2024

2023

Selling, general and administrative expense

315,518

279,764

1,198,899

1,093,827

Adjustments

Stock appreciation expense(a)

(1,983

)

(1,815

)

(5,391

)

(7,703

)

Redeemable noncontrolling interests(b)

(302

)

(1,427

)

(1,178

)

Equity-based compensation(c)

(3,644

)

(3,019

)

(15,618

)

(13,217

)

Severance and other permitted costs(d)

(307

)

(2,384

)

(2,628

)

(2,875

)

Transaction costs (acquisitions and other)(e)

(1,483

)

(807

)

(4,856

)

(1,961

)

Gain on disposal of assets(f)

799

729

1,413

Debt transaction costs(g)

(173

)

(1,320

)

(173

)

Adjusted SG&A

307,878

272,390

1,168,388

1,068,133

Net sales

1,413,029

1,304,102

5,501,907

5,329,252

Adjusted SG&A margin

21.8

20.9

21.2

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,

2024

2023

2024

2023

Income before taxes

83,067

98,383

374,166

447,503

EBITDA adjustments

8,823

7,849

32,144

26,730

Write-off of discount and deferred financing fees

674

—

2,075

—

Acquisition accounting depreciation and amortization (1)

12,243

11,111

44,377

49,931

Adjusted pre-tax income

104,807

117,343

452,762

524,164

Adjusted income tax expense

26,726

28,749

115,454

128,420

Adjusted net income

78,081

88,594

337,308

395,744

Effective tax rate (2)

25.5

24.5

25.5

24.5

Weighted average shares outstanding:

Basic

39,830

41,239

40,229

41,904

Diluted

40,539

41,913

40,906

42,592

Adjusted net income per share:

Basic

1.96

2.15

8.38

9.44

Diluted

1.93

2.11

8.25

9.29

________________________________________

(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 Materials, Ames Taping Tools and Kamco Supply Corporation.

(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/20240620433554/en/

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

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