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GMS(GMS) - 2025 Q2 - Earnings Call Transcript
2024-12-05 20:24
Financial Data and Key Metrics Changes - The company reported net sales of $1.47 billion, an increase of 3.5% year-over-year, primarily driven by recent acquisitions and volume growth in Ceilings, Steel Framing, and Complementary Products [7][25] - Organic sales declined by 4.6% due to softened market demand and the impact of hurricanes, with net income decreasing by 33.9% to $53.5 million compared to $81 million a year ago [9][41] - Adjusted EBITDA was $152.2 million, down 9.2% year-over-year, with an EBITDA margin of 10.3%, compared to 11.8% in the prior year [10][41] Business Line Data and Key Metrics Changes - Wallboard sales were $582.1 million, down 0.5% year-over-year, with a 1.6% decline in volume offset by a 1.1% increase in price and mix [28] - Ceilings sales increased by 16.6% year-over-year, with organic sales growing 1.6% despite a 2.5% decrease in volume [31] - Steel Framing sales decreased by 6.3%, with organic sales down 14%, reflecting an 8% decline in volume and a 6% decline in price and mix [32][34] - Complementary Products sales grew 9% year-over-year, marking the 18th consecutive quarter of growth for this category [34] Market Data and Key Metrics Changes - Commercial sales dollars declined by 4.4%, while multifamily sales fell significantly by 16.9% compared to the previous year [26] - Single-family sales dollars were slightly up, less than 1% above the prior year quarter, but below expectations due to high mortgage rates [27] - The company estimates that hurricanes negatively impacted net sales by approximately $20 million and adjusted EBITDA by about $6 million [9] Company Strategy and Development Direction - The company is focused on maintaining and growing market share across core product categories, particularly in Wallboard, Steel Framing, and Complementary Products [15][17] - The company has invested over $1 billion in acquisitions since COVID, targeting both core products and complementary products to enhance its service offerings [21] - The management emphasizes the importance of a diversified customer base and balanced revenue mix to navigate market fluctuations effectively [15] Management's Comments on Operating Environment and Future Outlook - Management noted that the current market conditions are challenging, with expectations for continued headwinds into 2025, particularly in multifamily and commercial sectors [47][48] - There is optimism for a recovery in the housing market driven by favorable demographics and easing regulatory constraints, although the ramp-up will take time [13][14] - The company expects organic Wallboard volumes to decline mid- to high single digits in the upcoming quarter, with a slight improvement in gross margin anticipated [50][52] Other Important Information - The company has renewed its share repurchase program, authorizing the repurchase of up to $250 million of its shares outstanding, reflecting confidence in the business [45] - Capital expenditures for the quarter were $14.1 million, with expectations of $45 million to $50 million for the full fiscal year [44] Q&A Session Summary Question: Wallboard price cost dynamics - Management indicated that approximately 60 basis points of gross margin was still attributed to Wallboard price costs, with slight improvements expected moving forward [61][62] Question: Long-term pricing expectations for Steel Framing and Ceilings - Management noted that tariffs on steel could be beneficial, and they expect the Ceilings market to remain slightly inflationary [66][68] Question: Outlook for multifamily and commercial markets - Management expressed that there is little improvement expected in these categories for the next few quarters, with a need for new structures to drive demand [76][78] Question: Visibility on project delays in multifamily - Management confirmed that while the pipeline exists, many projects are being delayed due to financing issues and anticipation of lower rates [88][90] Question: Expectations for SG&A leverage - Management is optimistic about achieving neutral SG&A in the next quarter, with potential for improvement if volume declines do not continue [91][92] Question: Wallboard pricing and demand - Management stated that low single-digit volume growth would be sufficient to facilitate easier price increases in the future [108][110]
GMS (GMS) Misses Q2 Earnings Estimates
ZACKS· 2024-12-05 13:21
Company Performance - GMS reported quarterly earnings of $2.02 per share, missing the Zacks Consensus Estimate of $2.26 per share, and down from $2.30 per share a year ago, representing an earnings surprise of -10.62% [1] - The company posted revenues of $1.47 billion for the quarter ended October 2024, surpassing the Zacks Consensus Estimate by 1.12%, and up from $1.42 billion year-over-year [2] - Over the last four quarters, GMS has not surpassed consensus EPS estimates and has topped consensus revenue estimates only once [2] Future Outlook - The sustainability of GMS's stock price movement will depend on management's commentary during the earnings call and the earnings outlook [3][5] - The current consensus EPS estimate for the coming quarter is $1.73 on revenues of $1.32 billion, and for the current fiscal year, it is $7.95 on revenues of $5.68 billion [8] - The estimate revisions trend for GMS is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [7] Industry Context - The Building Products - Retail industry, to which GMS belongs, is currently in the top 13% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [9]
GMS(GMS) - 2025 Q2 - Quarterly Results
2024-12-05 11:06
Financial Performance - Net sales for the second quarter of fiscal 2025 were $1.5 billion, an increase of 3.5% year-over-year, while organic net sales decreased by 4.6%[3] - Net income decreased by 33.9% to $53.5 million, or $1.35 per diluted share, with a net income margin decline of 200 basis points to 3.6%[18] - Adjusted EBITDA was $152.2 million, a decrease of $15.3 million or 9.2%, with an adjusted EBITDA margin of 10.3% compared to 11.8% in the prior year[19] - Operating income decreased to $94,824 thousand from $124,798 thousand, reflecting a decline of 24% year-over-year[36] - Net income for the quarter was $53,536 thousand, down 33.8% from $80,957 thousand in the prior year[36] - Basic net income per share was $1.37, compared to $2.00 in the same quarter last year, representing a decrease of 31.5%[36] - Net income for the three months ended October 2024 was $53,536 thousand, a decrease of 33.8% compared to $80,957 thousand for the same period in 2023[52] - Adjusted EBITDA for the six months ended October 2024 was $298,105 thousand, down 12.5% from $340,856 thousand for the same period in 2023[52] - Adjusted net income for the three months ended October 2024 was $80,061 thousand, a decrease of 18.6% compared to $98,448 thousand for the same period in 2023[59] - Net income for the last twelve months ended October 31, 2023, was $219,076, down from $308,155 in the previous period, representing a decrease of approximately 29%[62] Cash Flow and Liquidity - Cash provided by operating activities was $115.6 million, down from $118.1 million in the prior year, while free cash flow was $101.5 million compared to $102.1 million[21] - Cash provided by operating activities was $92.662 million, down 25.7% from $124.747 million year-over-year[41] - Cash used in investing activities totaled $233.189 million, significantly higher than $83.809 million in the previous year, primarily due to business acquisitions[41] - Cash provided by financing activities was $57.712 million, a turnaround from cash used of $128.778 million in the same quarter last year[41] - Cash and cash equivalents decreased to $83,928 thousand from $166,148 thousand, indicating a significant reduction in liquidity[38] - Cash and cash equivalents rose to $83,928, up from $76,517, showing an increase of about 9%[62] Sales and Revenue Breakdown - Wallboard sales were $582.1 million, a decrease of 0.5%, while Steel Framing sales decreased by 6.3% to $217.4 million[11][13] - Total net sales for the quarter reached $1.471 billion, representing a 3.5% increase from $1.421 billion in the same quarter of the previous year[44] - Wallboard sales accounted for 39.6% of total net sales, generating $582.119 million, a slight decrease of 0.5% compared to $585.174 million in the prior year[46] - Steel framing sales were $217.388 million, down 6.3% from $232.108 million year-over-year, representing 14.8% of total net sales[46] - Net sales for the six months ended October 2024 were $2,919,232 thousand, an increase of 3.1% compared to $2,830,530 thousand for the same period in 2023[56] Expenses and Costs - SG&A expenses increased to $324.2 million, up from $300.9 million, with a significant portion attributed to recent acquisitions and severance costs[16] - Selling, general and administrative expense for the three months ended October 2024 was $324,225 thousand, an increase of 7.7% compared to $300,894 thousand for the same period in 2023[56] - Adjusted SG&A margin for the three months ended October 2024 was 21.1%, up from 20.6% for the same period in 2023[56] - Interest expense for the three months ended October 2024 was $23,697 thousand, an increase of 26.3% compared to $18,742 thousand for the same period in 2023[52] - Interest expense increased to $83,715 from $72,783, which is an increase of about 15%[62] - Depreciation expense rose to $75,673, compared to $64,416, reflecting an increase of approximately 17%[62] Debt and Leverage - Net debt leverage increased to 2.3 times, up from 1.5 times a year ago, with total debt reported at $1.5 billion[20] - Long-term debt increased to $1,426,564 thousand from $1,229,726 thousand, reflecting a rise of 16%[38] - Total debt increased significantly to $1,481,446 from $1,076,050, reflecting a rise of about 37.5%[62] - Net debt increased to $1,397,518 from $999,533, reflecting a rise of about 40%[62] Strategic Initiatives - The company renewed its share repurchase program, authorizing up to $250 million for repurchase of outstanding common stock[6] - The company successfully acquired R. S. Elliott Specialty Supply, enhancing its distribution capabilities in Florida[24] - The company opened new greenfield locations in Summerville, SC, Middleton, MA, and Clackamas, OR, expanding its service and product offerings[25] - The company plans to continue focusing on market expansion and new product development to drive future growth[41] Other Financial Metrics - Total assets increased to $4,023,009 thousand as of October 31, 2024, up from $3,759,840 thousand as of April 30, 2024[38] - Current liabilities decreased slightly to $748,697 thousand from $757,050 thousand, indicating improved short-term financial stability[38] - The company reported a total stockholders' equity of $1,469,307 thousand, a slight increase from $1,460,521 thousand[38] - EBITDA adjustments totaled $38,288, up from $27,906, indicating an increase of about 37%[62] - Pro Forma Adjusted EBITDA was $603,735, down from $647,410, representing a decrease of approximately 6.7%[62]
GMS to Report Q2 Earnings: Here's What Investors Should Know
ZACKS· 2024-12-02 16:06
Core Viewpoint - GMS Inc. is set to report its second-quarter fiscal 2025 results on December 5, with expectations of mixed performance due to varying demand patterns across product categories and external economic factors [1][5]. Financial Performance - In the last reported quarter, GMS's earnings missed the Zacks Consensus Estimate by 8.5% and declined 19.6% year over year, while net sales also missed the consensus mark by 2.7% but increased 2.8% year over year [1][2]. - The Zacks Consensus Estimate for earnings per share (EPS) has remained stable at $2.26, indicating a 1.7% drop from the year-ago quarter's level of $2.30 [3]. - The consensus mark for net sales is pegged at $1.45 billion, indicating a 2.4% rise from the year-ago period [4]. Product Category Insights - GMS expects its consolidated organic Wallboard volume to have been flat to down low single digits, with pricing slightly up year over year [6]. - Ceilings volume is likely to have increased in the low-to-single digits, while pricing is anticipated to be flat to up low single digits [6]. - Steel Framing is expected to have declined in the mid-to-high single digits, with pricing anticipated to be up in the low-single digits, reflecting the current financing environment [7]. - Sales growth for Complementary Products is anticipated to be in the mid-to-high single digits, while overall sales growth is expected to be up low-to-mid single digits compared to year-ago figures [8]. Segment Performance - The Zacks Consensus Estimate of net sales for Wallboard, Ceilings, and Complementary Products is pegged at $607 million, $195 million, and $449.8 million, respectively, compared to $585.2 million, $175.3 million, and $428.3 million in the year-ago period [9]. - The Zacks Consensus Estimate for Steel Framing is pegged at $205.3 million, down from $232.1 million reported in the year-ago quarter [9]. Margin and Income Expectations - GMS anticipates a decline in the bottom line year over year due to increased labor expenses and inflationary pressures, with expected gross margin in the range of 31.6-31.8% and net income of $67-$69 million [10]. - The company reported a gross margin of 32.3% and a net income of $81 million in the year-ago period [10]. - Adjusted EBITDA is expected to be $163-$168 million, with adjusted EBITDA margins of approximately 11%, compared to $167.6 million and an adjusted EBITDA margin of 11.8% in the year-ago period [11]. Strategic Outlook - GMS's strategic initiatives, diverse product portfolio, and search for accretive inorganic opportunities are expected to benefit its performance, with the housing market remaining undersupplied [12]. - Trends such as AI, reshoring, and infrastructure investment are driving sustained construction demand, positioning GMS to benefit as market conditions stabilize [12].
FMR LLC Bolsters Stake in GMS Inc
GuruFocus· 2024-10-07 18:04
Overview of FMR LLC's Recent Transaction - On September 30, 2024, FMR LLC acquired 854,987 shares of GMS Inc, increasing its total holdings to 4,232,170 shares, reflecting a strategic enhancement of its investment portfolio [1] - The shares were purchased at a price of $90.57 each, indicating a significant investment move by FMR LLC [1] FMR LLC's Investment Philosophy and Holdings - FMR LLC, commonly known as Fidelity, has been a leader in investment services since its establishment in 1946, focusing on research-driven strategies for long-term growth [2] - The firm's top holdings include major companies like Apple Inc and Amazon.com Inc, primarily in the technology and healthcare sectors, showcasing its focus on high-growth areas [2] GMS Inc's Market Position and Performance - GMS Inc operates as a key distributor of specialty building products, with a market capitalization of $3.55 billion and a P/E ratio of 14.93, indicating healthy profitability [5] - The company has shown robust growth since its IPO in 2016, particularly in wallboard products, with a year-to-date price increase of 12.76% and a total rise of 302.04% since its IPO [6] Strategic Rationale Behind FMR LLC's Investment - FMR LLC's increased stake in GMS Inc, now approximately 10.77%, reflects confidence in GMS's market position and future prospects, despite a modest overall impact of 0.02% on FMR LLC's portfolio [4] - The decision is likely influenced by GMS's strong Profitability Rank and a GF Score of 81, indicating good potential for outperformance in the building products sector [7] Comparative Analysis with Other Investors - FMR LLC's strategic positioning in GMS Inc aligns it with other major investors like Gotham Asset Management, highlighting a commitment to investing in companies with strong market positions and growth potential [8]
GMS Q1 Earnings & Sales Miss Estimates, Margins Decline Y/Y
ZACKS· 2024-08-30 18:20
Core Insights - GMS Inc. reported disappointing first-quarter fiscal 2025 results, with earnings and net sales missing consensus estimates, although net sales showed a year-over-year increase [1][4] Financial Performance - Adjusted earnings per share (EPS) were $1.93, missing the Zacks Consensus Estimate of $2.11 by 8.5%, and down from $2.40 in the same quarter last year [4] - Net sales reached $1.45 billion, falling short of the consensus mark of $1.49 billion by 2.7%, but increased by 2.8% year over year [4] - Organic net sales declined by 2.2% from the prior year, with volume growth offset by steel price deflation and weaker demand in commercial and multi-family markets [5] Segment Performance - Wallboard sales increased by 2.9% year over year to $587.9 million, with organic growth of 1.1% [6] - Ceilings sales rose by 18.2% year over year to $207.2 million, with organic sales up 5.7% [6] - Steel Framing sales decreased by 11.4% year over year to $209.9 million, with organic sales down 15.3% [6] - Complementary Product sales grew by 4.1% year over year to $443.5 million, but organic sales declined by 2.2% [7] Operating Highlights - Gross profit increased by 0.2% year over year to $451.6 million, with a gross margin contraction of 80 basis points to 32% [8] - Adjusted EBITDA was $145.9 million, down 15.8% from the previous year, with an adjusted EBITDA margin of 10.1%, contracting 220 basis points [9] Financial Position - As of July 31, 2024, cash and cash equivalents were $53.2 million, down from $166.1 million at the end of fiscal 2024 [9] - Available liquidity under revolving credit facilities was $565.3 million, with long-term debt amounting to $1.33 billion, up from $1.23 billion at the end of fiscal 2024 [9] - Cash used in operating activities was $22.9 million, compared to cash provided of $6.6 million in the same period last year [10] Share Repurchase Activity - During the fiscal first quarter, GMS repurchased 538,078 shares for $46.2 million, with $154.3 million of share repurchase authorization remaining as of July 31, 2024 [10]
GMS Gears Up to Report Q1 Earnings: Factors to Consider
ZACKS· 2024-08-27 18:18
Core Viewpoint - GMS Inc. is expected to report its first-quarter fiscal 2025 results on August 29, with mixed performance indicators from previous quarters suggesting potential challenges ahead [1][8]. Estimate Revision Trend - The Zacks Consensus Estimate for earnings per share (EPS) has remained stable at $2.11, reflecting a 12.1% decline from the previous year's $2.40 [2]. - The consensus estimate for net sales is projected at $1.49 billion, indicating a 5.6% increase from the year-ago period [2]. Key Factors to Note - GMS's top-line performance is anticipated to improve year over year due to rising single-family demand and contributions from acquired businesses, although declining multi-family and commercial demand may negatively impact sales [3]. - Product category expectations include Wallboard volume growth in low-to-mid single digits, Ceilings volume growth in low-to-mid teens, and Steel Framing volume growth in low-to-mid single digits, with pricing trends varying across categories [4]. Sales Growth Expectations - Overall sales growth is expected to be in the mid-single digits, with specific segment estimates for Wallboard at $605.5 million, Ceilings at $206.7 million, Steel Framing at $224.8 million, and Complementary Products at $455.9 million, all showing year-over-year increases [5]. Bottom Line Expectations - The bottom line is likely to decline year over year due to increased labor costs and inflationary pressures, with anticipated near-term headwinds in Wallboard and Steel margins [6]. - For the fiscal first quarter, GMS expects a gross margin of approximately 31.5%, net income between $77 million and $79 million, and adjusted EBITDA between $160 million and $165 million, compared to last year's figures [7]. Earnings Prediction Model - The Zacks model does not predict an earnings beat for GMS, as the company has an Earnings ESP of +2.84% but carries a Zacks Rank of 4 (Sell) [8].
GMS' Q4 Earnings & Net Sales Lag Estimates, Margins Down Y/Y
ZACKS· 2024-06-21 17:45
GMS Inc. (GMS) reported tepid results for fourth-quarter fiscal 2024 (ended Apr 30, 2024). Both earnings and net sales missed the Zacks Consensus Estimate. Earnings declined on a year-over-year basis. Nonetheless, net sales grew from the prior-year period. Shares of the company lost 6.1% on Jun 20, post-earnings release. The company expects Wallboard and Steel margins-related headwinds to improve from the second quarter. An improving single-family end market will likely offset declining multi-family and com ...
GMS(GMS) - 2024 Q4 - Annual Report
2024-06-20 20:46
For the Transition Period From to Commission File Number: 001-37784 ______________________________________________________________ GMS INC. For the Fiscal Year Ended April 30, 2024 or ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Table of Contents SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF ...
GMS(GMS) - 2024 Q4 - Earnings Call Transcript
2024-06-20 16:31
GMS Inc. (NYSE:GMS) Q4 2024 Earnings Conference Call June 20, 2024 8:30 AM ET Company Participants Carey Phelps - VP, IR John Turner - President and CEO Scott Deakin - SVP and CFO Conference Call Participants Noah Merkousko - Stephens Matthew Bouley - Barclays David Manthey - Baird Brian Biros - Thompson Research Group Mike Dahl - RBC Capital Markets Jeffrey Stevenson - Loop Capital Markets Operator Greetings, and welcome to the GMS, Inc., Fourth Quarter Fiscal Year 2024 Earnings Conference Call. [Operator ...