GMS posts Q1 sales gain, new acquisition
Gypsum Management and Supply has its reported financial results for the fiscal first quarter ended July 31, 2024.
The drywall giant's Q1 2025 highlights include:
(Comparisons are to the first quarter of fiscal 2024.)
- Net sales of $1.4 billion increased 2.8 percent; organic net sales decreased 2.2 percent.
- Volume growth across all four major product categories, inclusive of acquisitions.
- U.S. single-family Wallboard organic volume growth of 4.1 percent helped offset a 2.3 percent decline in multi-family and essentially flat year-over-year demand in commercial.
- Net income of $57.2 million, or $1.42 per diluted share, decreased from net income of $86.8 million, or $2.09 per diluted share. Net income margin declined 220 basis points to 4.0 percent.
- Adjusted net income of $77.6 million, or $1.93 per diluted share, decreased from $103.2 million, or $2.49 per diluted share.
- Cash provided by operating activities and free cash flow was a use of $22.9 million and a use of $31.9 million, respectively, compared to cash provided by operating activities of $6.6 million and a use from free cash flow of $6.9 million in the prior year period.
The company also shared that it completed the acquisitions of Howard & Son Building Materials, Inc. and Yvon Building Supply and Affiliates. In addition, GMS acquired R.S. Elliott Specialty Supply.
Year-over-year quarterly sales changes by product category were as follows, per GMS:
- Wallboard sales of $587.9 million increased 2.9% (up 1.1% on an organic basis).
- Ceilings sales of $207.2 million increased 18.2% (up 5.7% on an organic basis).
- Steel Framing sales of $209.9 million decreased 11.4% (down 15.3% on an organic basis).
- Complementary Product sales of $443.5 million increased 4.1% (down 2.7% on an organic basis).
“During our first quarter of fiscal 2025, the GMS team delivered net sales of $1.4 billion, net income of $57.2 million and adjusted EBITDA of $145.9 million amid what has quickly become a more challenging market environment,” said John C. Turner, Jr., president and CEO of GMS. “We realized volume growth and improved or resilient pricing in most of our major product lines. Nevertheless, steel price deflation partially offset these results, and economic tightening resulted in weaker than expected activity levels across all of our end markets for the quarter, notably in commercial and multi-family, particularly in July.”
Turner added: “Despite current market pressure, we continued to focus on the execution of our strategic pillars and adapting to shifting end market demand, and are managing costs more firmly across the business. In addition to our recently closed acquisition of Yvon, we are pleased to announce the acquisition of R.S. Elliott, which is another meaningful transaction in the Complementary Products space. With five locations across Florida, R.S. Elliott is a leading distributor of stucco, exterior insulation and finishing systems and other exterior finishing and cladding products in that state."
Turner continued:
“We believe the market pressures we faced this quarter will likely persist over the next several quarters, at least until the expected reduction in interest rates can positively impact demand for our products. As such, we are taking decisive action at this time to implement a $25 million annualized cost reduction program, made possible by prior investments in technology and efficiency optimization.”
For a more detailed view of GMS' Q1 2025 results, click here.
