Company Reports Volume Gains and Resilient Wallboard Pricing Amid Softening End Market Demands and Continued Steel Price Deflation
Announces Acquisition of
First Quarter Fiscal 2025 Highlights
(Comparisons are to the first quarter of fiscal 2024)
-
Net sales of
$1.4 billion increased 2.8%; organic net sales decreased 2.2%. - Volume growth across all four major product categories, inclusive of acquisitions.
-
U.S. single-family Wallboard organic volume growth of 4.1% helped offset a 2.3% decline in multi-family and essentially flat year-over-year demand in commercial. -
Net income of
$57.2 million , or$1.42 per diluted share, decreased from net income of$86.8 million , or$2.09 per diluted share; Net income margin declined 220 basis points to 4.0%. -
Adjusted net income of
$77.6 million , or$1.93 per diluted share, decreased from$103.2 million , or$2.49 per diluted share. -
Adjusted EBITDA of
$145.9 million decreased$27.4 million , or 15.8%; Adjusted EBITDA margin was 10.1%, compared to 12.3%. -
Cash provided by operating activities and free cash flow was a use of
$22.9 million and a use of$31.9 million , respectively, compared to cash provided by operating activities of$6.6 million and a use from free cash flow of$6.9 million in the prior year period; Net debt leverage was 2.1 times at the end of the quarter, up from 1.5 times a year ago. -
Completed the acquisitions of
Howard & Son Building Materials, Inc. and Yvon Building Supply and affiliates. Subsequent to the end of the quarter, acquiredR.S. Elliott Specialty Supply (“R.S. Elliott”).
“During our first quarter of fiscal 2025, the GMS team delivered net sales of
“Despite current market pressure, we continued to focus on the execution of our strategic pillars and adapting to shifting end market demand, and are managing costs more firmly across the business. In addition to our recently closed acquisition of Yvon, we are pleased to announce the acquisition of
Turner continued, “We believe the market pressures we faced this quarter will likely persist over the next several quarters, at least until the expected reduction in interest rates can positively impact demand for our products. As such, we are taking decisive action at this time to implement a
“In spite of near-term headwinds, we remain confident in our model, the resilience of pricing for our major product categories outside of Steel, and our ability to execute and capture the evident growth opportunities ahead, particularly with an improved interest rate environment. Our substantial scale and breadth across the
First Quarter Fiscal 2025 Results
(Comparisons are to the first quarter of fiscal 2024 unless otherwise noted)
Net sales for the first quarter of fiscal 2025 of
Organic net sales were down 2.2%, primarily impacted by price deflation in Steel Framing together with soft Canadian single-family residential activity, which resulted in a year-over-year decline in Complementary Product sales, particularly in roofing and lumber.
Year-over-year quarterly sales changes by product category were as follows:
· Wallboard sales of
· Ceilings sales of
· Steel Framing sales of
· Complementary Product sales of
Gross profit of
Selling, general and administrative (“SG&A”) expenses were
SG&A expense as a percentage of net sales increased 150 basis points to 21.8% for the quarter, compared to 20.3%. Operating cost inflation and activity-based increases impacted SG&A leverage by approximately 85 basis points while steel price deflation contributed approximately 55 basis points of deleverage. Costs associated with recent acquisitions and greenfield openings negatively impacted SG&A leverage by an estimated 10 basis points. Adjusted SG&A expense as a percentage of net sales of 21.2% also increased 140 basis points from 19.8%.
Inclusive of a
Adjusted EBITDA decreased
New Presentation for Adjusted Net Income
Please note, to make the Company’s financial presentation more consistent with other public building products companies, beginning in the first quarter of fiscal 2025, we are now including adjustments for all non-cash amortization expense related to acquisitions. Past practice included non-cash amortization and depreciation for only certain transactions.
Using the new methodology, Adjusted net income was
The tables included herein provide both the legacy and new presentations for reference.
Balance Sheet, Liquidity and Cash Flow
As of
For the first quarter of fiscal 2025, which seasonally represents the highest use of cash for the Company, cash used by operating activities was
Share Repurchases
During the quarter, the Company repurchased 538,078 shares of common stock for
Platform Expansion Activities, Including Subsequent Event: Purchase of
During the first quarter of fiscal 2025, the Company continued the execution of its platform expansion strategy with the closing of its previously announced acquisition of Yvon Building Supply and affiliates, representing a strategic expansion to the Company’s presence in the
Also, after the end of the quarter, on
Headquartered in
For the twelve months ended
Conference Call and Webcast
GMS will host a conference call and webcast to discuss its results for the first quarter of fiscal 2025 ended
About
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
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, backlog, pricing, volumes, the demand for the Company’s products, including Complementary Products, 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
|
Condensed Consolidated Statements of Operations (Unaudited) (in thousands, except per share data) |
|||||||
|
|
Three Months Ended |
||||||
|
|
|
||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
Net sales |
$ |
1,448,456 |
|
|
$ |
1,409,600 |
|
|
Cost of sales (exclusive of depreciation and amortization shown separately below) |
|
996,893 |
|
|
|
959,046 |
|
|
Gross profit |
|
451,563 |
|
|
|
450,554 |
|
|
Operating expenses: |
|
|
|
||||
|
Selling, general and administrative |
|
315,152 |
|
|
|
286,796 |
|
|
Depreciation and amortization |
|
38,032 |
|
|
|
32,018 |
|
|
Total operating expenses |
|
353,184 |
|
|
|
318,814 |
|
|
Operating income |
|
98,379 |
|
|
|
131,740 |
|
|
Other (expense) income: |
|
|
|
||||
|
Interest expense |
|
(22,213 |
) |
|
|
(18,914 |
) |
|
Write-off of debt discount and deferred financing fees |
|
— |
|
|
|
(1,401 |
) |
|
Other income, net |
|
2,028 |
|
|
|
2,139 |
|
|
Total other expense, net |
|
(20,185 |
) |
|
|
(18,176 |
) |
|
Income before taxes |
|
78,194 |
|
|
|
113,564 |
|
|
Provision for income taxes |
|
20,946 |
|
|
|
26,734 |
|
|
Net income |
$ |
57,248 |
|
|
$ |
86,830 |
|
|
Weighted average common shares outstanding: |
|
|
|
||||
|
Basic |
|
39,542 |
|
|
|
40,749 |
|
|
Diluted |
|
40,226 |
|
|
|
41,477 |
|
|
Net income per common share: |
|
|
|
||||
|
Basic |
$ |
1.45 |
|
|
$ |
2.13 |
|
|
Diluted |
$ |
1.42 |
|
|
$ |
2.09 |
|
|
Condensed Consolidated Balance Sheets (Unaudited) (in thousands, except per share data) |
|||||||
|
|
|
|
|
||||
|
Assets |
|||||||
|
Current assets: |
|
|
|
||||
|
Cash and cash equivalents |
$ |
53,172 |
|
|
$ |
166,148 |
|
|
Trade accounts and notes receivable, net of allowances of |
|
929,508 |
|
|
|
849,993 |
|
|
Inventories, net |
|
607,403 |
|
|
|
580,830 |
|
|
Prepaid expenses and other current assets |
|
43,183 |
|
|
|
42,352 |
|
|
Total current assets |
|
1,633,266 |
|
|
|
1,639,323 |
|
|
Property and equipment, net of accumulated depreciation of |
|
490,713 |
|
|
|
472,257 |
|
|
Operating lease right-of-use assets |
|
288,335 |
|
|
|
251,207 |
|
|
|
|
890,699 |
|
|
|
853,767 |
|
|
Intangible assets, net |
|
553,341 |
|
|
|
502,688 |
|
|
Deferred income taxes |
|
22,591 |
|
|
|
21,890 |
|
|
Other assets |
|
14,357 |
|
|
|
18,708 |
|
|
Total assets |
$ |
3,893,302 |
|
|
$ |
3,759,840 |
|
|
Liabilities and Stockholders’ Equity |
|||||||
|
Current liabilities: |
|
|
|
||||
|
Accounts payable |
$ |
420,288 |
|
|
$ |
420,237 |
|
|
Accrued compensation and employee benefits |
|
59,451 |
|
|
|
125,610 |
|
|
Other accrued expenses and current liabilities |
|
122,346 |
|
|
|
111,204 |
|
|
Current portion of long-term debt |
|
53,743 |
|
|
|
50,849 |
|
|
Current portion of operating lease liabilities |
|
52,372 |
|
|
|
49,150 |
|
|
Total current liabilities |
|
708,200 |
|
|
|
757,050 |
|
|
Non-current liabilities: |
|
|
|
||||
|
Long-term debt, less current portion |
|
1,326,695 |
|
|
|
1,229,726 |
|
|
Long-term operating lease liabilities |
|
241,041 |
|
|
|
204,865 |
|
|
Deferred income taxes, net |
|
80,403 |
|
|
|
62,698 |
|
|
Other liabilities |
|
66,660 |
|
|
|
44,980 |
|
|
Total liabilities |
|
2,422,999 |
|
|
|
2,299,319 |
|
|
Commitments and contingencies |
|
|
|
||||
|
Stockholders' equity: |
|
|
|
||||
|
Common stock, par value
and 39,754 shares issued and outstanding as of |
|
393 |
|
|
|
397 |
|
|
Preferred stock, par value |
|
— |
|
|
|
— |
|
|
Additional paid-in capital |
|
295,431 |
|
|
|
334,596 |
|
|
Retained earnings |
|
1,214,295 |
|
|
|
1,157,047 |
|
|
Accumulated other comprehensive loss |
|
(39,816 |
) |
|
|
(31,519 |
) |
|
Total stockholders' equity |
|
1,470,303 |
|
|
|
1,460,521 |
|
|
Total liabilities and stockholders' equity |
$ |
3,893,302 |
|
|
$ |
3,759,840 |
|
|
Condensed Consolidated Statements of Cash Flows (Unaudited) (in thousands) |
|||||||
|
|
Three Months Ended
|
||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
Cash flows from operating activities: |
|
|
|
||||
|
Net income |
$ |
57,248 |
|
|
$ |
86,830 |
|
|
Adjustments to reconcile net income to net cash (used in) provided by operating activities: |
|
|
|
||||
|
Depreciation and amortization |
|
38,032 |
|
|
|
32,018 |
|
|
Write-off and amortization of debt discount and debt issuance costs |
|
448 |
|
|
|
2,077 |
|
|
Equity-based compensation |
|
4,343 |
|
|
|
5,002 |
|
|
Loss (gain) on disposal and impairment of assets |
|
858 |
|
|
|
(131 |
) |
|
Deferred income taxes |
|
(1,681 |
) |
|
|
(2,587 |
) |
|
Other items, net |
|
2,288 |
|
|
|
820 |
|
|
Changes in assets and liabilities net of effects of acquisitions: |
|
|
|
||||
|
Trade accounts and notes receivable |
|
(36,373 |
) |
|
|
(38,244 |
) |
|
Inventories |
|
(20,640 |
) |
|
|
(1,359 |
) |
|
Prepaid expenses and other assets |
|
(3,320 |
) |
|
|
(19,331 |
) |
|
Accounts payable |
|
(10,644 |
) |
|
|
(28,280 |
) |
|
Accrued compensation and employee benefits |
|
(66,124 |
) |
|
|
(64,038 |
) |
|
Other accrued expenses and liabilities |
|
12,626 |
|
|
|
33,870 |
|
|
Cash (used in) provided by operating activities |
|
(22,939 |
) |
|
|
6,647 |
|
|
Cash flows from investing activities: |
|
|
|
||||
|
Purchases of property and equipment |
|
(8,976 |
) |
|
|
(13,538 |
) |
|
Proceeds from sale of assets |
|
1,218 |
|
|
|
982 |
|
|
Acquisition of businesses, net of cash acquired |
|
(118,461 |
) |
|
|
(38,976 |
) |
|
Cash used in investing activities |
|
(126,219 |
) |
|
|
(51,532 |
) |
|
Cash flows from financing activities: |
|
|
|
||||
|
Repayments on revolving credit facility |
|
(378,641 |
) |
|
|
(187,784 |
) |
|
Borrowings from revolving credit facility |
|
468,864 |
|
|
|
190,673 |
|
|
Payments of principal on long-term debt |
|
(1,247 |
) |
|
|
— |
|
|
Borrowings from term loan amendment |
|
— |
|
|
|
288,266 |
|
|
Repayments from term loan amendment |
|
— |
|
|
|
(287,768 |
) |
|
Payments of principal on finance lease obligations |
|
(10,839 |
) |
|
|
(9,793 |
) |
|
Repurchases of common stock |
|
(46,609 |
) |
|
|
(30,784 |
) |
|
Payment for debt issuance costs |
|
— |
|
|
|
(5,825 |
) |
|
Proceeds from exercises of stock options |
|
555 |
|
|
|
1,248 |
|
|
Proceeds from issuance of stock pursuant to employee stock purchase plan |
|
3,207 |
|
|
|
2,664 |
|
|
Cash provided by (used in) financing activities |
|
35,290 |
|
|
|
(39,103 |
) |
|
Effect of exchange rates on cash and cash equivalents |
|
892 |
|
|
|
692 |
|
|
Decrease in cash and cash equivalents |
|
(112,976 |
) |
|
|
(83,296 |
) |
|
Cash and cash equivalents, beginning of period |
|
166,148 |
|
|
|
164,745 |
|
|
Cash and cash equivalents, end of period |
$ |
53,172 |
|
|
$ |
81,449 |
|
|
Supplemental cash flow disclosures: |
|
|
|
||||
|
Cash paid for income taxes |
$ |
2,881 |
|
|
$ |
3,167 |
|
|
Cash paid for interest |
|
26,730 |
|
|
|
21,853 |
|
|
(dollars in thousands) |
|||||||||||
|
|
Three Months Ended |
||||||||||
|
|
|
|
% of
|
|
|
|
% of
|
||||
|
|
|
|
|
|
|
|
|
||||
|
Wallboard |
$ |
587,929 |
|
40.6 |
% |
|
$ |
571,425 |
|
40.5 |
% |
|
Ceilings |
|
207,156 |
|
14.3 |
% |
|
|
175,205 |
|
12.4 |
% |
|
Steel framing |
|
209,858 |
|
14.5 |
% |
|
|
236,760 |
|
16.8 |
% |
|
Complementary products |
|
443,513 |
|
30.6 |
% |
|
|
426,210 |
|
30.2 |
% |
|
Total net sales |
$ |
1,448,456 |
|
|
|
$ |
1,409,600 |
|
|
||
|
(dollars in millions) |
|||||||||||||||
|
|
|
|
|
Organic Sales |
|
||||||||||
|
|
Three Months Ended |
|
|
Three Months Ended |
|
||||||||||
|
|
|
2024 |
|
|
2023 |
Change |
|
|
2024 |
|
|
2023 |
Change |
||
|
Wallboard |
$ |
587.9 |
|
$ |
571.4 |
2.9 |
% |
|
$ |
577.4 |
|
$ |
571.4 |
1.1 |
% |
|
Ceilings |
|
207.2 |
|
|
175.2 |
18.2 |
% |
|
|
185.2 |
|
|
175.2 |
5.7 |
% |
|
Steel framing |
|
209.9 |
|
|
236.8 |
(11.4 |
)% |
|
|
200.5 |
|
|
236.8 |
(15.3 |
)% |
|
Complementary products |
|
443.5 |
|
|
426.2 |
4.1 |
% |
|
|
414.9 |
|
|
426.2 |
(2.7 |
)% |
|
Total net sales |
$ |
1,448.5 |
|
$ |
1,409.6 |
2.8 |
% |
|
$ |
1,378.0 |
|
$ |
1,409.6 |
(2.2 |
)% |
|
Per Day Net Sales and Per Day Organic Sales by (dollars in millions) |
|||||||||||||||
|
|
|
|
|
|
|||||||||||
|
|
Per Day Net Sales |
|
|
Per Day Organic Sales |
|
||||||||||
|
|
Three Months Ended |
|
|
Three Months Ended |
|
||||||||||
|
|
|
2024 |
|
|
2023 |
Change |
|
|
2024 |
|
|
2023 |
Change |
||
|
Wallboard |
$ |
9.2 |
|
$ |
8.9 |
2.9 |
% |
|
$ |
9.0 |
|
$ |
8.9 |
1.1 |
% |
|
Ceilings |
|
3.2 |
|
|
2.7 |
18.2 |
% |
|
|
2.9 |
|
|
2.7 |
5.7 |
% |
|
Steel framing |
|
3.3 |
|
|
3.7 |
(11.4 |
)% |
|
|
3.1 |
|
|
3.7 |
(15.3 |
)% |
|
Complementary products |
|
6.9 |
|
|
6.7 |
4.1 |
% |
|
|
6.5 |
|
|
6.7 |
(2.7 |
)% |
|
Total net sales |
$ |
22.6 |
|
$ |
22.0 |
2.8 |
% |
|
$ |
21.5 |
|
$ |
22.0 |
(2.2 |
)% |
|
|
Per Day Organic Growth |
||||
|
|
Three Months Ended |
||||
|
|
Volume |
|
Price/Mix/Fx |
||
|
Wallboard |
0.9 |
% |
|
0.2 |
% |
|
Ceilings |
1.1 |
% |
|
4.6 |
% |
|
Steel framing |
(0.6 |
)% |
|
(14.7 |
)% |
| _____________________ |
|
(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. |
|
Reconciliation of Net Income to Adjusted EBITDA (Unaudited) (in thousands) |
|||||||
|
|
Three Months Ended |
||||||
|
|
|
||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
|
||||
|
Net income |
$ |
57,248 |
|
|
$ |
86,830 |
|
|
Interest expense |
|
22,213 |
|
|
|
18,914 |
|
|
Write-off of debt discount and deferred financing fees |
|
— |
|
|
|
1,401 |
|
|
Interest income |
|
(370 |
) |
|
|
(474 |
) |
|
Provision for income taxes |
|
20,946 |
|
|
|
26,734 |
|
|
Depreciation expense |
|
19,228 |
|
|
|
16,327 |
|
|
Amortization expense |
|
18,804 |
|
|
|
15,691 |
|
|
EBITDA |
$ |
138,069 |
|
|
$ |
165,423 |
|
|
Stock appreciation expense(a) |
|
243 |
|
|
|
1,218 |
|
|
Redeemable noncontrolling interests and deferred compensation(b) |
|
422 |
|
|
|
480 |
|
|
Equity-based compensation(c) |
|
3,678 |
|
|
|
3,304 |
|
|
Severance and other permitted costs(d) |
|
956 |
|
|
|
406 |
|
|
Transaction costs (acquisitions and other)(e) |
|
1,280 |
|
|
|
1,385 |
|
|
Loss (gain) on disposal of assets(f) |
|
858 |
|
|
|
(131 |
) |
|
Effects of fair value adjustments to inventory(g) |
|
375 |
|
|
|
302 |
|
|
Debt transaction costs(h) |
|
— |
|
|
|
911 |
|
|
EBITDA adjustments |
|
7,812 |
|
|
|
7,875 |
|
|
Adjusted EBITDA |
$ |
145,881 |
|
|
$ |
173,298 |
|
|
|
|
|
|
||||
|
Net sales |
$ |
1,448,456 |
|
|
$ |
1,409,600 |
|
|
Adjusted EBITDA Margin |
|
10.1 |
% |
|
|
12.3 |
% |
| ____________________ | |
|
(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 costs paid to third-party advisors related to debt refinancing activities. |
|
Reconciliation of Cash Provided By (Used In) Operating Activities to Free Cash Flow (Unaudited) (in thousands) |
|||||||
|
|
Three Months Ended |
||||||
|
|
|
||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
Cash provided by (used in) operating activities |
$ |
(22,939 |
) |
|
$ |
6,647 |
|
|
Purchases of property and equipment |
|
(8,976 |
) |
|
|
(13,538 |
) |
|
Free cash flow (a) |
$ |
(31,915 |
) |
|
$ |
(6,891 |
) |
| ____________________ |
|
(a) Free cash flow is a non-GAAP financial measure that we define as net cash provided by (used in) operations less capital expenditures. |
|
Reconciliation of Selling, General and Administrative Expense to Adjusted SG&A (Unaudited) (in thousands) |
|||||||
|
|
Three Months Ended |
||||||
|
|
|
||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
Selling, general and administrative expense |
$ |
315,152 |
|
|
$ |
286,796 |
|
|
|
|
|
|
||||
|
Adjustments |
|
|
|
||||
|
Stock appreciation expense(a) |
|
(243 |
) |
|
|
(1,218 |
) |
|
Redeemable noncontrolling interests and deferred compensation(b) |
|
(422 |
) |
|
|
(480 |
) |
|
Equity-based compensation(c) |
|
(3,678 |
) |
|
|
(3,304 |
) |
|
Severance and other permitted costs(d) |
|
(956 |
) |
|
|
(406 |
) |
|
Transaction costs (acquisitions and other)(e) |
|
(1,280 |
) |
|
|
(1,385 |
) |
|
(Loss) gain on disposal of assets(f) |
|
(858 |
) |
|
|
131 |
|
|
Debt transaction costs(g) |
|
— |
|
|
|
(911 |
) |
|
Adjusted SG&A |
$ |
307,715 |
|
|
$ |
279,223 |
|
|
|
|
|
|
||||
|
Net sales |
$ |
1,448,456 |
|
|
$ |
1,409,600 |
|
|
Adjusted SG&A margin |
|
21.2 |
% |
|
|
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 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. |
|
Reconciliation of Income Before Taxes to Adjusted Net Income (Unaudited) (in thousands, except per share data)
Legacy Presentation |
|||||||
|
|
Three Months Ended |
||||||
|
|
|
||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
|
||||
|
Income before taxes |
$ |
78,194 |
|
|
$ |
113,564 |
|
|
EBITDA adjustments |
|
7,812 |
|
|
|
7,875 |
|
|
Write-off of debt discount and deferred financing fees |
|
— |
|
|
|
1,401 |
|
|
Acquisition accounting depreciation and amortization (1) |
|
14,157 |
|
|
|
10,915 |
|
|
Adjusted pre-tax income |
|
100,163 |
|
|
|
133,755 |
|
|
Adjusted income tax expense |
|
26,042 |
|
|
|
34,108 |
|
|
Adjusted net income |
$ |
74,121 |
|
|
$ |
99,647 |
|
|
Effective tax rate (2) |
|
26.0 |
% |
|
|
25.5 |
% |
|
|
|
|
|
||||
|
Weighted average shares outstanding: |
|
|
|
||||
|
Basic |
|
39,542 |
|
|
|
40,749 |
|
|
Diluted |
|
40,226 |
|
|
|
41,477 |
|
|
Adjusted net income per share: |
|
|
|
||||
|
Basic |
$ |
1.87 |
|
|
$ |
2.45 |
|
|
Diluted |
$ |
1.84 |
|
|
$ |
2.40 |
|
| ____________________ | |
|
(1) |
Depreciation and amortization from the increase in value of certain long-term assets associated with the |
|
|
|
|
(2) |
Normalized cash tax rate excluding the impact of acquisition accounting and certain other deferred tax amounts. |
|
Reconciliation of Income Before Taxes to Adjusted Net Income (Unaudited) (in thousands, except per share data)
New Presentation |
|||||||
|
|
Three Months Ended |
||||||
|
|
|
||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
|
||||
|
Income before taxes |
$ |
78,194 |
|
|
$ |
113,564 |
|
|
EBITDA adjustments |
|
7,812 |
|
|
|
7,875 |
|
|
Write-off of debt discount and deferred financing fees |
|
— |
|
|
|
1,401 |
|
|
Amortization expense (1) |
|
18,804 |
|
|
|
15,691 |
|
|
Adjusted pre-tax income |
|
104,810 |
|
|
|
138,531 |
|
|
Adjusted income tax expense |
|
27,251 |
|
|
|
35,325 |
|
|
Adjusted net income |
$ |
77,559 |
|
|
$ |
103,206 |
|
|
Effective tax rate (2) |
|
26.0 |
% |
|
|
25.5 |
% |
|
|
|
|
|
||||
|
Weighted average shares outstanding: |
|
|
|
||||
|
Basic |
|
39,542 |
|
|
|
40,749 |
|
|
Diluted |
|
40,226 |
|
|
|
41,477 |
|
|
Adjusted net income per share: |
|
|
|
||||
|
Basic |
$ |
1.96 |
|
|
$ |
2.53 |
|
|
Diluted |
$ |
1.93 |
|
|
$ |
2.49 |
|
| ____________________ | |
|
(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. |
|
Reconciliation of Income Before Taxes to Adjusted Net Income (Unaudited) (in thousands, except per share data)
Historical New Presentation |
|||||||||||||||
|
|
Three Months Ended |
||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
2023 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2024 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Income before taxes |
$ |
113,564 |
|
|
$ |
108,162 |
|
|
$ |
69,373 |
|
|
$ |
83,067 |
|
|
EBITDA adjustments |
|
7,875 |
|
|
|
8,009 |
|
|
|
7,437 |
|
|
|
8,823 |
|
|
Write-off of discount and deferred financing fees |
|
1,401 |
|
|
|
— |
|
|
|
— |
|
|
|
674 |
|
|
Amortization expense (1) |
|
15,691 |
|
|
|
15,974 |
|
|
|
15,528 |
|
|
|
16,963 |
|
|
Adjusted pre-tax income |
|
138,531 |
|
|
|
132,145 |
|
|
|
92,338 |
|
|
|
109,527 |
|
|
Adjusted income tax expense |
|
35,325 |
|
|
|
33,697 |
|
|
|
23,546 |
|
|
|
27,929 |
|
|
Adjusted net income |
$ |
103,206 |
|
|
$ |
98,448 |
|
|
$ |
68,792 |
|
|
$ |
81,598 |
|
|
Effective tax rate (2) |
|
25.5 |
% |
|
|
25.5 |
% |
|
|
25.5 |
% |
|
|
25.5 |
% |
|
|
|
|
|
|
|
|
|
||||||||
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
||||||||
|
Basic |
|
40,749 |
|
|
|
40,466 |
|
|
|
39,864 |
|
|
|
39,830 |
|
|
Diluted |
|
41,477 |
|
|
|
41,088 |
|
|
|
40,512 |
|
|
|
40,539 |
|
|
Adjusted net income per share: |
|
|
|
|
|
|
|
||||||||
|
Basic |
$ |
2.53 |
|
|
$ |
2.43 |
|
|
$ |
1.73 |
|
|
$ |
2.05 |
|
|
Diluted |
$ |
2.49 |
|
|
$ |
2.40 |
|
|
$ |
1.70 |
|
|
$ |
2.01 |
|
| ____________________ | |
|
(1) |
Represents all non-cash amortization resulting from business combinations. |
|
|
|
|
(2) |
Normalized cash tax rate excluding the impact of acquisition accounting and certain other deferred tax amounts. |
|
Reconciliation of Net Income to Pro Forma Adjusted EBITDA (Unaudited) (in thousands) |
|||||||
|
|
Last Twelve Months Ended |
||||||
|
|
|
||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
|
||||
|
Net income |
$ |
246,497 |
|
|
$ |
330,351 |
|
|
Interest expense |
|
78,760 |
|
|
|
70,096 |
|
|
Write-off of debt discount and deferred financing fees |
|
674 |
|
|
|
1,401 |
|
|
Interest income |
|
(1,650 |
) |
|
|
(1,705 |
) |
|
Provision for income taxes |
|
92,299 |
|
|
|
109,216 |
|
|
Depreciation expense |
|
72,107 |
|
|
|
62,511 |
|
|
Amortization expense |
|
67,269 |
|
|
|
63,974 |
|
|
EBITDA |
$ |
555,956 |
|
|
$ |
635,844 |
|
|
Stock appreciation expense(a) |
|
4,416 |
|
|
|
6,577 |
|
|
Redeemable noncontrolling interests and deferred compensation(b) |
|
1,369 |
|
|
|
1,163 |
|
|
Equity-based compensation(c) |
|
15,992 |
|
|
|
13,389 |
|
|
Severance and other permitted costs(d) |
|
3,178 |
|
|
|
2,842 |
|
|
Transaction costs (acquisitions and other)(e) |
|
4,751 |
|
|
|
2,960 |
|
|
Loss (gain) on disposal of assets(f) |
|
260 |
|
|
|
(1,260 |
) |
|
Effects of fair value adjustments to inventory(g) |
|
1,706 |
|
|
|
1,381 |
|
|
Debt transaction costs(h) |
|
409 |
|
|
|
1,084 |
|
|
EBITDA adjustments |
|
32,081 |
|
|
|
28,136 |
|
|
Adjusted EBITDA |
|
588,037 |
|
|
|
663,980 |
|
|
Contributions from acquisitions(i) |
|
35,211 |
|
|
|
13,583 |
|
|
Pro Forma Adjusted EBITDA |
$ |
623,248 |
|
|
$ |
677,563 |
|
| ____________________ | |
|
(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 costs paid to third-party advisors related to debt refinancing activities. |
|
(i) |
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/20240829033904/en/
Investors:
ir@gms.com
770-723-3369
Source:
