GMS(US:GMS)2024-12-05 21:20Financial Performance - Net sales for the three months ended October 31, 2024, were $1,470,776, an increase of 3.7% compared to $1,420,930 for the same period in 2023[19]. - Gross profit for the three months ended October 31, 2024, was $461,127, compared to $458,629 for the same period in 2023, reflecting a slight increase[19]. - Operating income decreased to $94,824 for the three months ended October 31, 2024, down from $124,798 in the same period of 2023, representing a decline of 24%[19]. - Net income for the three months ended October 31, 2024, was $53,536, a decrease of 33.8% from $80,957 in the same period of 2023[19]. - Adjusted EBITDA for the three months ended October 31, 2024, was $152,224 million, compared to $167,558 million for the same period in 2023, indicating a decline of about 9.1%[101]. - Net income for the six months ended October 31, 2024, was $110,784, compared to $167,787 for the same period in 2023, representing a decline of about 34%[25]. - Adjusted EBITDA for the six months ended October 31, 2024, was $298,105 thousand, down 12.5% from $340,856 thousand in the prior year[119]. - Net income for the six months ended October 31, 2024, was $110.8 million, a 34.0% decrease compared to the prior year, with net income as a percentage of sales dropping to 3.8% from 5.9%[135]. Assets and Liabilities - Total current assets increased to $1,670,350 as of October 31, 2024, compared to $1,639,323 as of April 30, 2024[17]. - Total assets rose to $4,023,009 as of October 31, 2024, compared to $3,759,840 as of April 30, 2024, indicating growth in the company's asset base[17]. - Long-term debt increased to $1,426,564 as of October 31, 2024, up from $1,229,726 as of April 30, 2024, reflecting a rise in leverage[17]. - As of October 31, 2024, total stockholders' equity was $1,469,307, a decrease from $1,375,885 as of October 31, 2023, reflecting a year-over-year change of approximately 6.8%[22]. - The company's long-term debt as of October 31, 2024, was $1.43 billion, an increase from $1.23 billion as of April 30, 2024, representing an increase of 16.5%[57]. - The company’s total liabilities for medical self-insurance as of October 31, 2024, were $4,812, down from $6,067 as of April 30, 2024, indicating a decrease of approximately 20.7%[31]. Expenses - Selling, general and administrative expenses increased to $324,225 for the three months ended October 31, 2024, compared to $300,894 for the same period in 2023, indicating rising operational costs[19]. - The company reported depreciation and amortization expenses of $80,110 for the six months ended October 31, 2024, an increase from $64,955 in the same period of 2023, reflecting a rise of about 23.3%[25]. - Interest expense for the three months ended October 31, 2024, was $23,697 thousand, compared to $18,742 thousand in the same period last year, indicating an increase of 26.3%[199]. - Interest expense rose by $4,955 thousand, or 26.4%, to $23,697 thousand, attributed to increased outstanding debt and finance leases[158]. - Total lease cost for the six months ended October 31, 2024, was $70,830,000, an increase of 22.4% from $57,820,000 in the same period of 2023[69]. Share Repurchase and Equity - The company repurchased common stock totaling $99,248 during the six months ended October 31, 2024, compared to $75,356 in the same period of 2023, reflecting an increase of about 31.7%[25]. - The company repurchased approximately 1.1 million shares for $98.5 million under the 2023 Repurchase Plan, with $102.0 million remaining for future repurchases[186]. - The company approved a new share repurchase program authorizing up to $250 million, replacing the previous program with $94.6 million remaining as of November 30, 2024[117]. - The total number of shares repurchased in the three months ended October 31, 2024, was 593,168 shares, with an average price per share of $88.86[216]. Acquisitions and Growth - The company acquired businesses for $207,259 during the six months ended October 31, 2024, compared to $55,964 in the same period of 2023, indicating a significant increase in acquisition activity[25]. - The Company acquired Howard & Sons Building Materials, Inc. on May 1, 2024, and Yvon Building Supply, Inc. and related entities on July 2, 2024, to expand geographical coverage[39][40]. - The total preliminary consideration for fiscal 2025 acquisitions was $242.2 million, including $215.5 million in cash and $26.6 million in contingent consideration[45]. - The Company reported $64.4 million in net sales and $0.4 million in net income from acquisitions made in fiscal 2025 for the six months ended October 31, 2024[42]. - The company completed three acquisitions and opened one greenfield location during the reporting period[138]. Market and Operational Insights - Demand for single-family housing units showed positive wallboard volume growth for the first time since fall 2022, indicating early recovery in this market[124]. - Multi-family construction activity remained robust throughout calendar 2023, but demand for products declined year-over-year during the first half of fiscal 2025 due to completed backlogs[126]. - The company is focused on expanding its core products and complementary product lines, aiming to enhance market share both organically and through acquisitions[128][129]. - Financing availability and cost, along with labor constraints, are expected to be headwinds for commercial projects until conditions improve[122]. Tax and Valuation - The effective income tax rate on continuing operations was 26.4% for the six months ended October 31, 2024, compared to 24.3% in 2023[72]. - The provision for income taxes decreased by $8,315 thousand, or 30.6%, to $18,890 thousand, with an effective tax rate of 26.1%[159]. - The company had a valuation allowance of $12.6 million against its deferred tax assets as of October 31, 2024[73]. Miscellaneous - The company reported a loss on disposal of assets of $507 for the six months ended October 31, 2024, compared to a gain of $441 in the same period of 2023[25]. - The company recorded $6.2 million in restructuring costs during Q2 of fiscal 2025, primarily for workforce reduction and related expenses[32]. - The company reported no material changes in market risks or internal controls over financial reporting during the three months ended October 31, 2024[207][210].