GMS(GMS) - 2025 Q3 - Quarterly Results

Financial Performance - Net sales for Q3 fiscal 2025 were $1.3 billion, a slight increase of 0.2$21.4 million, or $0.55 per diluted share, compared to a net income of$51.9 million, or $1.28 per diluted share in the prior year[9] - Adjusted EBITDA decreased by$35.0 million, or 27.3%, to $93.0 million, with an adjusted EBITDA margin of 7.4$393.1 million, down $21.6 million from the prior year, with a gross margin of 31.2$4.8 million, significantly lower than $86.2 million in the same period last year, indicating a decline of 94.4$(21.4) million, compared to net income of $51.9 million in the prior year, representing a change of 141.2$36.2 million, down from $68.8 million in the same period of 2024[43] - Net income for the last twelve months ended January 31, 2025, was$145,762, a decrease of 50.7% compared to 295,285 for the same period in 2024[47] Expenses and Cost Management - Selling, general and administrative (SG&A) expenses increased to 310.8 million, up from 295.7 million, with SG&A as a percentage of net sales rising to 24.7%[6][7] - The company is implementing an additional estimated 20 million in annualized cost reductions, bringing total reductions to 50 million since the start of the fiscal year[3] - The company reported a total adjusted SG&A margin of 23.9% for the three months ended January 31, 2025, compared to 22.9% in the same period of 2024[39] Cash Flow and Liquidity - Cash provided by operating activities was 94.1 million, down from $104.3 million in the prior year, while free cash flow was$83.1 million compared to $94.1 million[13] - Cash and cash equivalents decreased to$59.0 million as of January 31, 2025, down from $166.1 million at the beginning of the period, a decrease of 64.5$186.8 million for the nine months ended January 31, 2025, down from $229.0 million in the prior year, a decrease of 18.4$83.1 million, compared to $94.1 million in the same period of 2024[38] Debt and Leverage - As of January 31, 2025, total debt was$1.4 billion, with net debt leverage increasing to 2.4 times from 1.5 times a year ago[12] - Total liabilities increased to $2,399.4 million as of January 31, 2025, compared to$2,299.3 million as of April 30, 2024, reflecting an increase of 4.4%[25] - Total debt increased to $1,409,977, up 36.7$1,030,761 in the prior year[47] - Net debt rose to $1,350,948, compared to$942,420, marking an increase of 43.3%[47] - The net debt to Pro Forma Adjusted EBITDA ratio is now 2.4x, up from 1.5x in the previous year[47] Impairment and Goodwill - The company recognized a $42.5 million non-cash goodwill impairment charge during the quarter, primarily due to decreased expected future cash flows[11] - The company incurred an impairment of goodwill of$42.5 million for the three months ended January 31, 2025, which was not present in the same period last year[29] - Impairment of goodwill was recorded at $42,454, indicating a new expense not present in the previous year[47] Sales Performance - Wallboard sales were$501.7 million, down 3.6%, while Ceilings sales increased by 16.0% to $180.7 million[8] - Wallboard sales for the three months ended January 31, 2025, were$501.7 million, a decrease of 3.6% from $520.7 million in the same period last year[30] - Wallboard per day net sales decreased by 3.6$8.1 million in the three months ended January 31, 2025, compared to $8.4 million in the same period of 2024[33] - Steel framing per day net sales decreased by 11.6$2.9 million in the three months ended January 31, 2025, compared to $3.3 million in the same period of 2024[33] Asset Management - Total current assets decreased to$1,491.5 million as of January 31, 2025, from $1,639.3 million as of April 30, 2024, a decline of 9.0$59,029, down 33.2% from $88,341[47] - Contributions from acquisitions increased to$16,572, compared to $6,276, representing a growth of 164.5$4,745 in transaction costs related to acquisitions, slightly up from $4,180[47]