GMS(US:GMS)2023-03-02 19:25Financial Data and Key Metrics Changes - Net income improved by 5.5% to $64.8 million, and adjusted EBITDA grew by 4.3% to $140.8 million [17][41] - Free cash flow improved significantly, exceeding $80 million to reach $122.5 million [17][70] - Adjusted EBITDA margin was 11.4%, compared to 11.7% for the same quarter in the previous year [41] Business Line Data and Key Metrics Changes - Wallboard sales increased by 20.6%, driven by a 20.3% increase in price and mix, with a slight 0.3% increase in volume [148] - Complementary product sales rose by 11.7% year-over-year, with organic growth of 8.2% [68] - Steel Framing sales decreased by 17.1%, with a 13% decline in price and mix and a 4.1% decline in volume [152] Market Data and Key Metrics Changes - Multifamily Wallboard volumes increased nearly 20%, while single-family Wallboard volumes declined by 10.6% [46][149] - Commercial Wallboard volumes grew by 5.6%, sustaining positive year-over-year growth [138][149] - The overall Steel Framing market continues to correct from supply chain disruptions and softening demand, particularly in the office segment [34] Company Strategy and Development Direction - The company is focused on expanding its complementary product offerings and has opened six Greenfield locations this fiscal year [36][140] - The company aims to leverage its scale and technology to improve cost and service, enhancing customer value [37][40] - There is an active pipeline of acquisition opportunities, with a focus on filling service gaps and expanding complementary products [49] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the multifamily market, expecting over 20% year-over-year volume growth in the upcoming quarter [63] - The company remains cautious about single-family demand, projecting a decline of 20% to 25% [101][125] - Management noted that while there are challenges, the overall outlook for commercial demand is improving, with signs of life in the office segment [50][91] Other Important Information - The company repurchased approximately 656,000 shares for $33.2 million during the quarter, compared to 87,000 shares for $4.7 million in the prior year [155] - The company has substantial liquidity, with cash on hand of $186.7 million and $574.4 million available under revolving credit facilities [56] Q&A Session Summary Question: Can you discuss the Wallboard guide for next quarter? - Management indicated expectations for year-over-year pricing growth of mid- to high teens, with a mix benefit from more commercial sales [76][79] Question: What are the trends for nonresidential demand? - Management expects mid-single-digit growth in nonresidential demand for the fourth quarter, with new home construction projected to decline by 20% to 25% [100][101] Question: How is the company addressing SG&A costs in light of volume declines? - Management acknowledged the need for cost management and indicated that SG&A costs may continue to deleverage due to the mix of higher-cost products [124]