GMS(GMS) - 2025 Q1 - Quarterly Results

Financial Performance - Net sales for the first quarter of fiscal 2025 were $1.4 billion, an increase of 2.8% compared to the first quarter of fiscal 2024; however, organic net sales decreased by 2.2%[2] - Net income decreased by 34.1% to $57.2 million, or $1.42 per diluted share, with a net income margin decline of 220 basis points to 4.0%[3] - Adjusted EBITDA was $145.9 million, a decrease of $27.4 million or 15.8%, resulting in an adjusted EBITDA margin of 10.1% compared to 12.3% in the prior year[3] - Operating income decreased to $98,379 thousand from $131,740 thousand, reflecting a decline of 25.3%[20] - Net income for the quarter was $57,248 thousand, down 34.2% from $86,830 thousand in the prior year[20] - Basic net income per share was $1.45, compared to $2.13 in the same quarter last year, representing a decrease of 31.9%[20] - Adjusted net income for the three months ended July 31, 2024, was $74.1 million, down from $99.6 million in the prior year[36] - GMS Inc. reported a net income of $246,497 thousand for the last twelve months ended July 31, 2024, compared to $330,351 thousand for the previous period[45] Cash Flow and Debt - The company reported cash used by operating activities of $22.9 million and free cash flow usage of $31.9 million for the quarter, compared to cash provided in the prior year[10] - Cash and cash equivalents decreased significantly to $53,172 thousand from $166,148 thousand, a decline of 68.0%[23] - Free cash flow for the three months ended July 31, 2024, was $(31.9) million, a decline from $(6.9) million in the same period last year[32] - As of July 31, 2024, total debt was $1.4 billion, with net debt leverage increasing to 2.1 times from 1.5 times a year ago[10] Sales and Market Trends - Wallboard sales increased by 2.9% to $587.9 million, while Steel Framing sales decreased by 11.4% to $209.9 million, reflecting a shift in market demand[6] - Wallboard sales accounted for 40.6% of total net sales, increasing from 40.5% in the prior year[25] - Organic sales for the same period were $1,378.0 million, reflecting a decrease of 2.2% from $1,409.6 million in the prior year[26] - Steel framing sales decreased by 11.4% to $209.9 million, and complementary products saw a 4.1% increase to $443.5 million[26] Expenses and Cost Management - SG&A expenses rose to $315.2 million, up from $286.8 million, with SG&A as a percentage of net sales increasing by 150 basis points to 21.8%[7] - The company announced a $25 million annualized cost reduction program to manage current market pressures and improve operational efficiency[4] - Selling, general and administrative expenses increased to $315.2 million from $286.8 million year-over-year[33] Acquisitions and Growth - The company completed acquisitions of Howard & Son Building Materials, Inc., Yvon Building Supply, and R.S. Elliott Specialty Supply, enhancing its product offerings and market presence[3][11] - R.S. Elliott generated approximately $70 million in net revenues for the twelve months ended June 2024, expected to be accretive to GMS's complementary business[12] - Contributions from acquisitions for the last twelve months amounted to $35,211 thousand, significantly higher than $13,583 thousand in the prior period[45] Tax and Adjustments - The effective tax rate for the three months ended July 31, 2024, was 26.0%, compared to 25.5% in the same period last year[36] - The effective tax rate remained stable at 25.5% across the reported periods[42] - The company reported EBITDA adjustments totaling $32,081 thousand for the last twelve months, an increase from $28,136 thousand in the previous period[45]