Core Insights - GMS reported revenue of $1.33 billion for the quarter ended April 2025, a year-over-year decline of 5.6% and an EPS of $1.29 compared to $1.93 a year ago, indicating a significant drop in profitability [1] - The revenue exceeded the Zacks Consensus Estimate of $1.3 billion by 2.81%, while the EPS surpassed the consensus estimate of $1.15 by 12.17% [1] Performance Metrics - GMS shares have returned -2.7% over the past month, contrasting with the Zacks S&P 500 composite's +0.6% change, suggesting underperformance relative to the broader market [3] - The company holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near term [3] Organic Net Sales Analysis - Organic net sales for Wallboard decreased by 12.5%, better than the estimated decline of 15.3% [4] - Organic net sales for Ceilings increased by 2.9%, compared to an estimated decline of 0.9% [4] - Overall organic net sales fell by 9.7%, outperforming the average estimate of a 11.5% decline [4] - Organic net sales for Other products/Complementary products decreased by 7.3%, worse than the estimated decline of 4.1% [4] - Organic net sales for Steel framing dropped by 17.9%, better than the estimated decline of 23.4% [4]

Financial Data and Key Metrics Changes - For the full year, net sales were $5.5 billion, a marginal increase compared to the prior year, driven by contributions from recent acquisitions [6] - Organic sales for the year were $5.2 billion, down 5.4% on a same-day basis compared to the prior year [7] - Net income for the full year was $115.5 million, including a $42.5 million non-cash goodwill impairment charge [7] - Adjusted EBITDA was $500.9 million, and free cash flow for the year was $336.1 million, representing 67% of adjusted EBITDA [7] - In the fourth quarter, net sales were $1.3 billion, with organic sales declining 8.3% per day [8][15] - Net income for the fourth quarter was $26.1 million, and adjusted EBITDA was $109.8 million, at the high end of the outlook [8][29] - Free cash flow generated during the quarter was $183.4 million, or 167% of adjusted EBITDA, marking the highest level of quarterly free cash flow conversion in the company's history [8][29] Business Line Data and Key Metrics Changes - Ceilings saw volume improvement during the quarter, with sales up 6.4% compared to the prior year [8][22] - Wallboard sales for the quarter were $526.6 million, down 10.1% year-over-year, with a 12.1% decrease in volume partially offset by a 1% increase in price and mix [20][21] - Steel framing sales were $189.2 million, down 14.2% for the quarter, with volumes down 2.6% and price and mix down 10.2% [23] - Complementary product sales were nearly flat year-over-year, up 1.4% on a per-day basis, representing the twentieth consecutive quarter of per-day growth [24] Market Data and Key Metrics Changes - Wallboard industry volumes were down 10% in the first calendar quarter, with high interest rates and policy uncertainty as primary impediments to growth [10] - U.S. residential revenues declined 6% per day compared to the prior year, with single-family volumes down 1.9% per day [18][19] - Multifamily revenues fell 32.4% and commercial revenues fell 10.1% on a per-day basis [18] Company Strategy and Development Direction - The company is focused on four strategic pillars: expanding share in core products, growing complementary products, expanding the platform, and driving improved productivity and profitability [13] - A significant cost savings program has been executed, achieving $25 million in annualized cost savings in the fourth quarter, totaling $55 million for the fiscal year [14] - The company aims to maintain a disciplined approach to capital allocation, balancing stock buybacks with debt reduction while pursuing attractive M&A opportunities [32] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about nearing the bottom of the cycle, with expectations for demand recovery as economic conditions improve [10][12] - The company anticipates that the near term will remain challenging, but expects to capitalize on long-term growth opportunities [13][39] - Management highlighted the importance of servicing customers and executing strategic priorities despite macroeconomic difficulties [33] Other Important Information - The company reduced net debt by more than 10% during the quarter, maintaining a target debt leverage range of 1.5 to 2.5 times [14] - Cash on hand was $55.6 million, with $631.3 million of available liquidity under the revolving credit facility [30] Q&A Session Summary Question: Sequential organic trends and expectations - Management noted improvements in the single-family market and share gains with larger customers, contributing to expectations of better performance [41][42] Question: Technology and efficiency optimization efforts - Management confirmed ongoing investments in digital initiatives and automation, which have contributed to cost reductions and improved service delivery [44][45][47] Question: Single-family dynamics and share gains - Management discussed leveraging scale to support builder partners and highlighted regional strengths contributing to share gains [52][56] Question: Margin dynamics and market dependency - Management indicated that half of the expected margin improvement is volume-related, while the other half is due to operational efficiencies [58][60] Question: Visibility into the single-family market - Management provided insights on lead times for orders and expressed confidence in a potential uptick in starts moving into the next selling season [66][68] Question: Impact of large homebuilders on distribution - Management emphasized gaining share with large builders due to service quality and efficiency, which positions the company well for future growth [77][80] Question: Return to office trends - Management expressed cautious optimism about future opportunities in tenant improvement work and office-to-residential conversions [82][84] Question: Wallboard pricing and industry dynamics - Management discussed the ability to pass through limited price increases and the resilience of pricing in the current environment [87][89]

Financial Data and Key Metrics Changes - For the full year, net sales were $5.5 billion, a marginal increase compared to the prior year, driven by contributions from recent acquisitions [5] - Organic sales for the year were $5.2 billion, down 5.4% on a same-day basis compared to the prior year [6] - Net income for the full year was $115.5 million, including a $42.5 million non-cash goodwill impairment charge [6] - Adjusted EBITDA was $500.9 million, and free cash flow for the year was $336.1 million, representing 67% of adjusted EBITDA [6] - In the fourth quarter, net sales were $1.3 billion, with organic sales declining 8.3% per day [7][17] - Net income for the fourth quarter was $26.1 million, and adjusted EBITDA was $109.8 million [7][31] - Free cash flow generated during the quarter was $183.4 million, or 167% of adjusted EBITDA, marking the highest level of quarterly free cash flow conversion in the company's history [7][32] Business Line Data and Key Metrics Changes - Ceilings saw volume improvement during the quarter, benefiting from the addition of CAMCO and a focus on architectural specialties projects [8][9] - Wallboard sales for the quarter were $526.6 million, down 10.1% year-over-year, with a 12.1% decrease in volume partially offset by a 1% increase in price and mix [21][22] - Steel framing sales were $189.2 million, down 14.2% for the quarter, with volumes down 2.6% and price and mix down 10.2% [25] - Complementary product sales were nearly flat year-over-year, up 1.4% on a per-day basis, representing the twentieth consecutive quarter of per-day growth in this category [26] Market Data and Key Metrics Changes - Wallboard industry volumes were down 10% in the first calendar quarter, with high interest rates and policy uncertainty being primary impediments to growth [11] - U.S. residential revenues declined 6% per day compared to the prior year, with single-family volumes down 1.9% per day [20][21] - Multifamily revenues fell 32.4% and commercial revenues fell 10.1% on a per-day basis [20] - The company expects to slightly outpace normal seasonal trends in wallboard volumes for the fiscal first quarter [12] Company Strategy and Development Direction - The company is focused on four strategic pillars: expanding share in core products, growing complementary products, expanding the platform, and driving improved productivity and profitability [15] - A significant cost savings program has been executed, achieving $25 million in annualized cost savings in the fiscal fourth quarter, totaling $55 million for the year [16][18] - The company aims to maintain a disciplined approach to capital allocation, balancing stock buybacks with debt reduction while pursuing attractive M&A opportunities [34] Management's Comments on Operating Environment and Future Outlook - Management is cautiously optimistic about nearing the bottom of the cycle, with expectations for recovery tied closely to mortgage rates and the broader macroeconomic environment [10][35] - The company anticipates that pent-up demand will materialize when conditions improve, with expectations for single-family volumes to be flat to slightly up year-over-year for the fiscal first quarter [36] - Management acknowledges the need for market recovery to achieve long-term margin targets of 10% to 12% [62] Other Important Information - The company reduced net debt by more than 10% during the quarter, maintaining a leverage ratio within the target range of 1.5 to 2.5 times [16] - Cash on hand as of April 30 was $55.6 million, with $631.3 million of available liquidity under the revolving credit facility [32] Q&A Session Summary Question: Can you elaborate on the sequential organic trends and why they might improve? - Management noted improvements primarily in the single-family market and share gains with larger customers, contributing to a more positive outlook [44] Question: What technology and efficiency optimization efforts are being implemented? - The company has continued to invest in digital initiatives, including e-commerce and automation, which have contributed to cost reductions and improved efficiencies [48][49] Question: How does the company view the single-family market dynamics and share gains? - Management indicated that they are leveraging scale to support builder partners and have gained share through strong relationships and geographic focus [56][58] Question: What is the expected timeline for seeing start activity flow into shipments? - Typically, there is a three to six-month lead time for production large builder focus, with visibility comfortable for the current quarter [72] Question: How permanent are the recent cost reductions? - Management estimates that about 50% of the cost reductions are permanent, while the other 50% may return with volume recovery [77]

Financial Performance - FY2025 - Net sales reached $55 billion, a 06% increase per day, driven by acquisitions [5] - Gross margin was 312%, down 110 bps [5] - Net income was $1155 million, a decrease of 582% [5] - Adjusted EBITDA was $5009 million, down 186% [5] - Free cash flow was $3361 million, representing 67% of Adjusted EBITDA [5] Financial Performance - Q4 FY2025 - Net sales were $13 billion, down 41% per day [6] - Gross margin was 312%, down 70 bps [6] - Net income was $261 million, a decrease of 537% [6] - Adjusted EBITDA was $1098 million, down 251% [6] - Free cash flow was $1834 million, representing 167% of Adjusted EBITDA [6] Cost Reduction and Capital Structure - Implemented $55 million of annualized cost reductions during FY25, with full quarterly run rate expected in Q1 FY26 [5, 6] - Share repurchases amounted to 349K shares for $264 million during Q425 [22] - $1920 million repurchase authorization remaining as of April 30, 2025 [22] Q1 FY26 Expectations - Net sales are expected to be down low to mid single digits in total, and down mid to high single digits organically [24] - Gross margin is expected to be approximately 312% [24] - GAAP net income is projected to be between $51 million and $53 million [24] - Adjusted EBITDA is expected to range from $132 million to $137 million, with an Adjusted EBITDA margin of 95% to 98% [24]

Core Insights - GMS reported quarterly earnings of $1.29 per share, exceeding the Zacks Consensus Estimate of $1.15 per share, but down from $1.93 per share a year ago, indicating a 33.2% year-over-year decline [1] - The company achieved revenues of $1.33 billion for the quarter, surpassing the Zacks Consensus Estimate by 2.81%, but down from $1.41 billion in the same quarter last year [2] - GMS shares have underperformed, losing approximately 13.7% year-to-date compared to a 1.7% gain in the S&P 500 [3] Earnings Performance - GMS has surpassed consensus EPS estimates only once in the last four quarters [2] - The recent earnings surprise was 12.17%, following a previous quarter where actual earnings were significantly below expectations, resulting in a -33.81% surprise [1][2] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $1.65, with expected revenues of $1.42 billion, and for the current fiscal year, the EPS estimate is $6.11 on revenues of $5.53 billion [7] - The estimate revisions trend for GMS is mixed, leading to a Zacks Rank of 3 (Hold), suggesting the stock is expected to perform in line with the market [6] Industry Context - The Building Products - Retail industry, to which GMS belongs, is currently in the top 40% of over 250 Zacks industries, indicating a favorable industry outlook [8]

Financial Performance - Net sales for Q4 fiscal 2025 were $1,333.8 million, a decrease of 5.6% year-over-year, with organic net sales down 9.7%[4] - Net income for Q4 fiscal 2025 was $26.1 million, a decline of 53.7% from $56.4 million, resulting in a net income margin of 2.0% compared to 4.0%[4] - Adjusted EBITDA for Q4 fiscal 2025 was $109.8 million, down 25.1% from $146.6 million, with an adjusted EBITDA margin of 8.2%[4] - For the full year fiscal 2025, net sales were $5,513.7 million, a slight increase of 0.2%, while organic net sales decreased by 5.8%[6] - Net income for the year ended April 30, 2025, was $115,469 thousand, a significant decrease of 58.2% from $276,079 thousand in 2024[30] - Total net sales for the year ended April 30, 2025, were $5,513.7 million, a marginal increase of 0.2% compared to $5,501.9 million in 2024[34] - Adjusted EBITDA for the last twelve months ended April 30, 2025, was $500,922,000, down 18.5% from $615,454,000 in 2024[53] Cash Flow and Debt - The company generated free cash flow of $183.4 million in Q4 fiscal 2025, compared to $186.7 million in Q4 fiscal 2024[14] - Cash provided by operating activities for the year ended April 30, 2025, was $383,574 thousand, a decrease of 11.5% from $433,249 thousand in 2024[30] - The company reported a total of $1,206,445 thousand in long-term debt as of April 30, 2025, down from $1,229,726 thousand in 2024, reflecting a decrease of 1.9%[28] - Total debt as of April 30, 2025, was $1,264,346,000, slightly decreased from $1,280,575,000 in 2024[53] - As of April 30, 2025, net debt leverage was 2.4 times Pro Forma Adjusted EBITDA, up from 1.7 times a year ago[13] - The net debt to pro forma adjusted EBITDA ratio increased to 2.4x from 1.7x in the previous year[53] Shareholder Actions - GMS repurchased 348,599 shares for $26.4 million at an average cost of $75.60 per share during Q4 fiscal 2025[4] - The company repurchased common stock totaling $165,502 thousand during the year ended April 30, 2025[30] Strategic Initiatives - The company implemented an estimated $25 million in annualized cost reductions in Q4 fiscal 2025, totaling $55 million for the full year[4][6] - GMS completed three strategic acquisitions and opened four greenfield locations during fiscal 2025, enhancing its market presence[6] Market Trends and Outlook - The company expressed cautious optimism for fiscal 2026, anticipating pent-up demand as macroeconomic conditions improve[5] Sales Performance by Segment - Wallboard sales accounted for 39.5% of total net sales in the three months ended April 30, 2025, compared to 41.5% in the same period of 2024[32] - Organic sales for Wallboard decreased by 12.5% to $512.8 million in Q2 2025, while Ceilings increased by 2.9% to $194.3 million[34] - The company reported a 14.1% increase in Ceilings sales for the year ended April 30, 2025, reaching $793.3 million[34] - Steel framing sales decreased by 10.8% to $796.2 million for the year ended April 30, 2025[34] - The company experienced a 4.6% increase in sales of Complementary products for the year ended April 30, 2025, totaling $1,725.9 million[34] Other Financial Metrics - Gross profit for the year ended April 30, 2025, was $1,722,024 thousand, down from $1,775,101 thousand in 2024, reflecting a decrease of 3.0%[26] - Operating income for the three months ended April 30, 2025, was $59,575 thousand, a decline of 40.5% compared to $100,077 thousand in the same period of 2024[26] - The company’s interest expense for the three months ended April 30, 2025, was $20.1 million, compared to $19.0 million in the same period of 2024[39] - The effective tax rate for the period was 26.0%, consistent with the previous year[49] - Adjusted net income per diluted share for the year ended April 30, 2025, was $6.18, down from $8.61 in 2024, reflecting a 28.2% decline[49] - Cash and cash equivalents decreased significantly to $55,599,000 from $166,148,000 in the previous year[53] - The company reported an impairment of goodwill amounting to $42,454,000 for the last twelve months[53] - Contributions from acquisitions for the last twelve months were $6,983,000, down from $24,213,000 in 2024[53] - The company made EBITDA adjustments totaling $74,318,000 for the last twelve months, compared to $32,144,000 in 2024[53]

Core Viewpoint - GMS is expected to report a significant decline in quarterly earnings and revenues, indicating potential challenges in its business performance [1]. Financial Performance - Analysts predict GMS will post quarterly earnings of $1.15 per share, a decline of 40.4% year-over-year [1]. - Revenues are forecasted to be $1.3 billion, reflecting a year-over-year decrease of 8.2% [1]. Earnings Estimate Revisions - There have been no revisions in the consensus EPS estimate for the quarter over the past 30 days, indicating stability in analysts' projections [2]. - Revisions to earnings projections are crucial for predicting investor behavior and stock price performance [3]. Key Metrics Analysis - Organic net sales for Wallboard are estimated to decline by 15.3%, contrasting with a 6% increase from the previous year [5]. - Organic net sales for Ceilings are expected to decrease by 0.9%, compared to an 11.4% increase last year [5]. - Organic net sales for Other products/Complementary products are projected to decline by 4.1%, down from a 3.5% increase in the same quarter last year [6]. Market Performance - GMS shares have changed by +2.7% in the past month, compared to a +3.6% move of the Zacks S&P 500 composite [7]. - GMS holds a Zacks Rank 3 (Hold), suggesting it is expected to perform in line with the overall market in the near future [7].

Financial Performance - Net sales for the three months ended January 31, 2025, were $1,260,710, a slight increase from $1,258,348 in the same period of 2024, representing a growth of 0.1%[19] - Gross profit for the three months ended January 31, 2025, was $393,090, down from $414,720 in the prior year, reflecting a decrease of 5.2%[19] - Operating income decreased significantly to $4,784 for the three months ended January 31, 2025, compared to $86,225 in the same period of 2024, a decline of 94.4%[19] - The company reported a net loss of $21,409 for the three months ended January 31, 2025, compared to a net income of $51,905 in the same period of 2024[19] - The company's Adjusted EBITDA for the three months ended January 31, 2025, was $93,041 thousand, down from $128,020 thousand for the same period in 2024, indicating a decrease of about 27.4%[100] - The company’s net income for the nine months ended January 31, 2025, was $89,375 thousand, compared to $219,692 thousand for the same period in 2024, reflecting a decline of approximately 59.3%[100] - Adjusted EBITDA of $391.1 million during the nine months ended January 31, 2025, a 16.6% decrease compared to the prior year, with Adjusted EBITDA as a percentage of net sales decreasing to 9.4%[120] Assets and Liabilities - Total assets as of January 31, 2025, were $3,793,036, a slight increase from $3,759,840 as of April 30, 2024[17] - Current liabilities decreased to $648,207 as of January 31, 2025, from $757,050 as of April 30, 2024, a reduction of 14.4%[17] - Long-term debt increased to $1,352,873 as of January 31, 2025, compared to $1,229,726 as of April 30, 2024, an increase of 10.0%[17] - The total stockholders' equity decreased to $1,393,608 as of January 31, 2025, from $1,460,521 as of April 30, 2024, a decline of 4.6%[17] Cash Flow and Investments - The company experienced a total cash flow from operating activities of $186,806 thousand for the nine months ended January 31, 2025, compared to $229,026 thousand for the same period in 2024[28] - Cash used in investing activities totaled $227,738 thousand for the nine months ended January 31, 2025, compared to $93,182 thousand in the prior year[28] - The company repurchased $138,902 thousand of common stock during the nine months ended January 31, 2025[28] - As of January 31, 2025, GMS Inc. had cash and cash equivalents of $59,029 thousand, down from $88,341 thousand at the end of the previous year[28] Acquisitions and Business Operations - On May 1, 2024, the Company acquired Howard & Sons Building Materials, Inc., expanding its distribution capabilities in California[43] - On July 2, 2024, the Company acquired Yvon Building Supply, Inc. and related entities for a total consideration of $239.0 million, including $212.4 million in cash and $26.6 million in contingent consideration[44][47] - The Company recorded $114.3 million in net sales and a net loss of $0.1 million from acquisitions made in fiscal 2025[46] - The company completed three acquisitions and opened three greenfield locations during the nine months ended January 31, 2025[125] Market and Economic Conditions - Demand for wallboard in the commercial sector declined year-over-year during the first half of fiscal 2025, reflecting an uncertain economic climate[114] - Single-family housing starts are expected to remain muted in the near term due to affordability challenges and high mortgage rates[116] - Multi-family construction activity was robust throughout calendar 2023, but demand for products declined year-over-year during the first three quarters of fiscal 2025[117] Stock and Shareholder Activities - The company approved a share repurchase program authorizing up to $250.0 million, with $218.4 million remaining for repurchase as of January 31, 2025[77] - The company repurchased approximately 1.6 million shares of common stock for $137.8 million during the nine months ended January 31, 2025, with $218.4 million remaining under the 2024 Repurchase Plan[165] - The average price paid per share for repurchases in January 2025 was $83.47, with a total of 168,791 shares repurchased during that month[189] Impairments and Expenses - The company recognized a non-cash goodwill impairment charge of $42.5 million during the three months ended January 31, 2025, primarily due to decreased forecasted future cash flows[137] - Selling, general and administrative expenses increased by 5.1% to $310,815 for the three months ended January 31, 2025, attributed to incremental expenses from acquisitions[135] - Interest expense increased by 22.8% to $23,069 for the three months ended January 31, 2025, due to higher outstanding debt and finance leases[140] Tax and Compliance - The company's effective income tax rate on continuing operations was 33.0% for the nine months ended January 31, 2025, compared to 24.5% for the same period in 2024[74] - The company was in compliance with all debt covenants as of January 31, 2025[167] - Certifications of the Chief Executive Officer and Chief Financial Officer were submitted in compliance with the Securities Exchange Act of 1934[31.1][31.2]

Financial Data and Key Metrics Changes - The company reported net sales of $1.3 billion for Q3 2025, roughly flat compared to the same period a year ago, with organic sales declining by 6.7% [10][25] - Gross margin for the quarter was 31.2%, slightly down from 31.4% in the previous quarter and down from 33% a year ago [10][42] - Adjusted EBITDA decreased by 27.3% year-over-year to $93 million, with an adjusted EBITDA margin declining from 10.2% to 7.4% [48] Business Line Data and Key Metrics Changes - Wallboard sales dollars were $501.7 million, down 3.6% year-over-year, with a volume decline of 4.9% partially offset by a 1.3% increase in price and mix [33] - Complementary product sales grew 5.3% year-over-year to $398.6 million, marking the 19th consecutive quarter of growth, although organic sales decreased by 4.3% [40] - Steel framing sales were down 11.6% for the quarter, with a 6% decline in price and mix and a volume decline of 5.6% [37] Market Data and Key Metrics Changes - US commercial revenues were down 7.8% organically compared to last year, with the Architectural Billings Index indicating a decline for 17 out of the last 18 months [13] - In Canada, residential building permit activity ended 2024 on a high note, with a total value of permits reaching the highest level since 2017, indicating a more positive market compared to the US [20][32] - The company noted that multifamily revenues in the US were down 27% year-over-year, while single-family revenues were up 1.9%, leading to a total US residential sales dollar decline of 6.4% [31] Company Strategy and Development Direction - The company is focusing on four strategic pillars: expanding share in core products, growing complementary products, expanding the platform, and driving improved productivity and profitability [21] - The company is implementing an additional estimated $20 million in annualized cost reductions, bringing the total annualized run rate of cost reductions to $50 million since the start of the fiscal year [22] - The company remains confident in its ability to generate significant cash flow and maintain a solid balance sheet, positioning itself for long-term growth opportunities [22][63] Management's Comments on Operating Environment and Future Outlook - Management indicated that the challenging demand backdrop experienced in the last half of Q3 is expected to continue through the end of the fiscal year and likely beyond [55] - The company anticipates that the current macro conditions will persist through most of calendar 2025, but expects to see improvement in demand towards the end of 2025 and into 2026 [62] - Management expressed optimism about future growth, citing the need for affordable housing and the potential for recovery in the single-family market [19][62] Other Important Information - The company recognized a $42.5 million non-cash goodwill impairment charge during the quarter, contributing to a GAAP net loss of $21.4 million compared to net income of $51.9 million in the prior year [46] - Cash provided by operating activities for the quarter was $94.1 million, with free cash flow of $83.1 million, representing 89% of adjusted EBITDA for the quarter [50] Q&A Session Summary Question: Regarding steel pricing expectations - Management acknowledged that while there may be some inflation in steel prices, it is likely to occur post the current quarter due to existing inventory levels and demand conditions [67][68] Question: April quarter outlook and cost reductions - Management confirmed that the full run rate of the $20 million cost reductions will be realized in the first quarter of fiscal 2026, with some benefits expected in the current quarter [71][76] Question: Deterioration in commercial sectors - Management noted that the commercial sector is experiencing significant declines, particularly in retail and private financing projects, while data centers remain strong [82][84] Question: Ceiling pricing dynamics - Management indicated that the strong performance in ceiling pricing is due to a focus on architectural specialties and successful project closures, which are expected to continue [100][102] Question: Wallboard pricing and volume growth - Management stated that volume growth across any end market would be beneficial for pricing, with a particular emphasis on the single-family market as a key driver [109]

Financial Data and Key Metrics Changes - The company reported net sales of $1.3 billion for Q3 2025, roughly flat compared to the same period a year ago, with organic sales declining by 6.7% [10][25] - Gross margin for the quarter was 31.2%, slightly down from 31.4% in the previous quarter and down from 33% a year ago [10][42] - Adjusted EBITDA decreased by 27.3% year-over-year to $93 million, with adjusted EBITDA margin declining from 10.2% to 7.4% [48][61] Business Line Data and Key Metrics Changes - Wallboard sales dollars were $501.7 million, down 3.6% year-over-year, with a 4.9% decline in volume partially offset by a 1.3% increase in price and mix [33] - Multifamily Wallboard volumes declined by 31.4%, while single-family Wallboard volumes were down 3.7% [34] - Complementary product sales grew 5.3% year-over-year, although organic sales decreased by 4.3% due to soft commercial and multifamily conditions [40] Market Data and Key Metrics Changes - US commercial revenues were down 7.8% organically compared to last year, with the Architectural Billings Index indicating a decline for 17 out of the last 18 months [13] - In Canada, housing sales data showed reductions in market inventory, and residential construction permits surged, indicating more positive conditions compared to the US [32][20] - The company expects single-family housing starts to remain muted for the calendar year due to affordability challenges and economic uncertainty [19] Company Strategy and Development Direction - The company is focusing on four strategic pillars: expanding share in core products, growing complementary products, expanding the platform, and driving improved productivity and profitability [21] - The company is implementing an additional estimated $20 million in annualized cost reductions, bringing total cost reductions to $50 million since the start of the fiscal year [22] - The company aims to maintain a balanced approach to capital allocation, investing in the business while also repaying debt and repurchasing shares [52] Management's Comments on Operating Environment and Future Outlook - Management indicated that the challenging demand backdrop is expected to continue through the end of the fiscal year and likely beyond, with no near-term catalysts for improvement [55] - The company remains optimistic about future growth as it navigates current uncertainties, expecting to be well-positioned when demand improves [62] - Management noted that the current macro conditions are anticipated to persist through most of calendar 2025, but they are confident in their strategy and operational adjustments [21][22] Other Important Information - The company recognized a $42.5 million non-cash goodwill impairment charge during the quarter, contributing to a GAAP net loss of $21.4 million compared to net income of $51.9 million in the prior year [46][47] - Cash provided by operating activities was $94.1 million, with free cash flow of $83.1 million, representing 89% of adjusted EBITDA for the quarter [50] Q&A Session Summary Question: Steel pricing outlook and expectations - Management acknowledged that while there may be some inflation in steel prices, it is expected to be post-quarter due to current demand conditions [67][68] Question: April quarter outlook and cost reductions - Management confirmed that the full run rate of the $20 million cost reductions will be realized in the first quarter of fiscal 2026, with some benefits expected in the current quarter [71][76] Question: Deterioration in commercial sectors - Management noted that commercial sectors are experiencing significant declines, particularly in retail and private financing projects, while data centers remain strong [82][84] Question: Ceiling pricing dynamics - Management indicated that the strong performance in ceiling pricing is due to a focus on architectural specialties and successful project closures [100][102] Question: Wallboard pricing and volume growth - Management stated that volume growth across any end market would be beneficial for pricing, with a particular emphasis on the importance of single-family housing for Wallboard demand [109][110] Question: Long-term EBITDA margin expectations - Management reaffirmed that long-term EBITDA margin expectations remain above 10%, with a target of around 9% for the current year despite current challenges [125][126]