GMS
$48.00
Gms
$1.09
2.32%
Earnings Details
Quarter April 2021
Thursday, June 24, 2021 6:00:00 AM
Tweet Share Watch
Summary

Gms (GMS) Recent Earnings

Gms (GMS) reported Quarter April 2021 earnings of $1.07 per share on revenue of $932.2 million. The consensus earnings estimate was $0.85 per share on revenue of $855.6 million. Revenue grew 20.9% on a year-over-year basis.

Results
Reported Earnings
$1.07
Earnings Whisper
-
Consensus Estimate
$0.85
Reported Revenue
$932.2 Mil
Revenue Estimate
$855.6 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

GMS Reports Fourth Quarter and Fiscal Year 2021 Results

Disciplined Execution, Residential Market Strength and Product Inflation Yields Quarterly and Annual Records in Net Sales, Net Income and Adjusted EBITDA

TUCKER, Ga.--(BUSINESS WIRE)--GMS Inc. (NYSE: GMS), a leading North American specialty distributor of interior building products, today reported financial results for the fourth quarter and fiscal year ended April 30, 2021.

Fourth Quarter Fiscal 2021 Highlights
(Comparisons are to the fourth quarter of fiscal 2020, except where noted.)

  • Net sales of $932.2 million increased 20.9%; organic net sales increased 17.1%. On a per day basis, net sales increased 19.1% and organic net sales increased 15.3%.
  • Net income of $33.7 million, or $0.77 per diluted share; adjusted net income of $46.9 million, or $1.07 per diluted share.
  • Gross margin of 31.5% compared to 32.6%.
  • SG&A and Adjusted SG&A as a percentage of sales were 22.2% and 21.9%, representing 320 and 260 basis points of improvement, respectively.
  • Adjusted EBITDA of $91.2 million increased 43.5%; Adjusted EBITDA margin improved 160 basis points to 9.8% from 8.2%.
  • The Company completed one business acquisition and four greenfield location openings.
  • Cash provided by operating activities and free cash flow of $84.8 million and $72.8 million, respectively.
  • Net debt leverage was reduced to 2.5 times as of the end of the fourth quarter of fiscal 2021 from 2.9 times as of the end of the third quarter of fiscal 2021.

Full Year Fiscal 2021 Highlights
(Comparisons are to the full year of fiscal 2020, except where noted.)

  • Net sales of $3.3 billion increased 1.8%; organic net sales increased 0.4%. On a per day basis, net sales increased 2.2% and organic net sales increased 0.8%.
  • Net income of $105.6 million, or $2.44 per diluted share; adjusted net income of $153.3 million, or $3.54 per diluted share.
  • Gross margin of 32.2% compared to 32.8%.
  • SG&A and Adjusted SG&A as a percentage of sales were 23.1% and 22.7%, representing 110 and 100 basis points of improvement, respectively.
  • Adjusted EBITDA of $319.4 million increased 6.5%; Adjusted EBITDA margin improved 50 basis points to 9.7% from 9.2%.
  • The Company completed one business acquisition and six greenfield location openings.
  • Cash provided by operating activities and free cash flow of $153.3 million and $123.4 million, respectively.

“We delivered a strong finish to fiscal 2021 as evidenced by record levels of net sales, net income and Adjusted EBITDA,” said John C. Turner, Jr., President and Chief Executive Officer. “During the fourth quarter, our entire team continued to effectively navigate what remains a very dynamic operating landscape. Through a sharpened focus on execution, we successfully capitalized on opportunities created by tailwinds from a strong residential market and robust demand in complementary products while also continuing to address challenges presented by a continued soft commercial market, supply constraints and meaningful inflation. At the same time, we further optimized our capital structure with a senior notes offering and term loan repricing. We also advanced our platform expansion with an acquisition in Canada and the opening of four greenfield locations in the U.S. and continued this momentum in May with the signing of a definitive agreement to acquire Westside Building Material, affording us a unique opportunity to expand our reach and capture significant growth opportunities in strategically important West Coast markets.”

Turner continued, “As we look ahead to our new fiscal year, I would like to share my appreciation for all of our teammates who met and overcame the numerous challenges presented by the COVID-19 pandemic throughout the past year. Moving forward, we believe there is fundamental support for continued strength in residential construction and, while timing remains uncertain, early, but encouraging, indications of improvement in commercial construction are emerging. I am confident that our team’s continued drive to execute and our relentless commitment to our strategic growth priorities of expanding share in core products, growing our complementary products offering, platform expansion, and improved productivity and profitability, position us to generate value for our shareholders well into the future.”

Fourth Quarter Fiscal 2021 Results

Net sales for the fourth quarter of fiscal 2021 of $932.2 million increased 20.9% year over year, primarily due to strong residential end markets, favorable pricing across product categories and the acquisition of D.L. Building Materials, coupled with the negative impact of COVID-19 related shutdowns in the prior year period. Organic net sales increased 17.1%. As there was one more selling day in the fourth quarter of fiscal 2021 than the same period a year ago, net sales and organic net sales on a per day basis were up 19.1% and 15.3%, respectively.

Year-over-year sales increases by product category, which in all cases resulted from both higher volumes and higher price and mix combined, were as follows:

  • Wallboard sales of $376.9 million increased 16.6% (up 13.3% on an organic basis).
  • Ceilings sales of $121.3 million increased 9.1% (up 7.0% on an organic basis).
  • Steel framing sales of $143.3 million increased 24.2% (up 21.4% on an organic basis).
  • Complementary product sales of $290.7 million increased 31.4% (up 25.4% on an organic basis).

Gross profit of $293.9 million increased 16.8% compared to the fourth quarter of fiscal 2020. As anticipated, gross margin of 31.5% declined from 32.6% a year ago primarily due to a continuation of unfavorable mix and pressured price-cost dynamics for certain product categories.

Selling, general and administrative (“SG&A”) expense as a percentage of net sales was 22.2% for the quarter compared to 25.4% in the fourth quarter of fiscal 2020. Adjusted SG&A expense as a percentage of net sales of 21.9% improved 260 basis points from 24.5 % in the prior year quarter as a result of continued cost discipline as well as favorable operating leverage from higher pricing broadly across the Company’s product lines.

Net income of $33.7 million, or $0.77 per diluted share, compared to a net loss of $41.5 million, or $0.98 per diluted share, in the fourth quarter of the prior fiscal year. Adjusted net income of $46.9 million, or $1.07 per diluted share, compared to $24.0 million, or $0.56 per diluted share, in the fourth quarter of the prior fiscal year. Adjusted EBITDA of $91.2 million increased 43.5% from the prior year quarter. Adjusted EBITDA margin of 9.8% improved 160 basis points from 8.2% a year ago.

Platform Expansion Activity

During the fourth quarter of fiscal 2021, the Company completed the previously announced acquisition of D.L. Building Materials, Inc., providing entrance to the Ottawa-Gatineau market in Canada, and also established four new locations, expanding its presence to two additional markets, Atlantic City, NJ, and Memphis, TN.

Subsequent to the end of the fourth quarter, on May 11, 2021, the Company announced a definitive agreement to acquire substantially all the assets of Westside Building Material, one of the largest independent distributors of interior building products in the U.S., for $135.0 million in cash. The transaction, which expands and enhances GMS’s presence in multiple California metro areas and marks its entry into the Las Vegas market, is expected to close early in the third calendar quarter of 2021, subject to the satisfaction of customary closing conditions.

Balance Sheet, Liquidity and Cash Flow

As of April 30, 2021, the Company had cash on hand of $167.0 million, total debt of $978.4 million and $453.8 million of available liquidity under its revolving credit facilities. Net debt leverage was 2.5 times as of the end of the quarter, down from 2.9 times at the end of both the third quarter of fiscal 2021 and the fourth quarter of fiscal 2020.

During the fourth quarter of fiscal 2021, the Company issued $350.0 million aggregate principal amount of senior unsecured notes due May 2029 (the “Senior Notes”) in a private offering. The Senior Notes bear interest at 4.625% per annum and mature on May 1, 2029. Proceeds from the Senior Notes were used to repay a portion of outstanding borrowings under the Company’s senior secured first lien term loan facility (the “Term Loan Facility”) and to pay related transaction premiums, fees, and expenses. As of April 30, 2021, $509.7 million remained outstanding under the Term Loan Facility. The Company also entered into the Fourth Amendment to its First Lien Credit Agreement (the “Fourth Amendment”) that, among other things, reduced the interest rate to LIBOR plus 2.50%, with a 0% floor, representing a 25 basis point improvement. As a result of the Fourth Amendment, the Company recorded a write-off of debt discount and deferred financing fees of $4.6 million during the fourth quarter of fiscal 2021.

The Company generated cash provided by operating activities and free cash flow of $84.8 million and $72.8 million, respectively, in the fourth quarter of 2021 compared to $167.7 million and $163.4 million, respectively, a year ago. The decrease from the prior year quarter was primarily due to the Company’s efforts to preserve liquidity at the end of fiscal 2020 in response to the COVID-19 pandemic.

Conference Call and Webcast

GMS will host a conference call and webcast to discuss its results for the fourth quarter of fiscal 2021 ended April 30, 2021 and other information related to its business at 8:30 a.m. Eastern Time on Thursday, June 24, 2021. Investors who wish to participate in the call should dial 877-407-3982 (domestic) or 201-493-6780 (international) at least 5 minutes prior to the start of the call. The live webcast will be available on the Investors section of the Company’s website at www.gms.com. There will be a slide presentation of the results available on that page of the website as well. Replays of the call will be available through July 24, 2021 and can be accessed at 844-512-2921 (domestic) or 412-317-6671 (international) and entering the pass code 13720195.

About GMS Inc.

Celebrating the 50th anniversary of its founding in 1971, GMS operates a network of more than 265 distribution centers across the United States and Canada. GMS’s extensive product offering of wallboard, suspended ceilings systems, or ceilings, and complementary construction products is designed to provide a comprehensive one-stop-shop for our core customer, the interior contractor who installs these products in commercial and residential buildings.

Use of Non-GAAP Financial Measures

GMS reports its financial results in accordance with GAAP. However, it presents Adjusted net income, free cash flow, Adjusted SG&A, Adjusted EBITDA, and Adjusted EBITDA margin, which are not recognized financial measures under GAAP. GMS believes that Adjusted net income, free cash flow, Adjusted SG&A, Adjusted EBITDA, and Adjusted EBITDA margin assist investors and analysts in comparing its operating performance across reporting periods on a consistent basis by excluding items that the Company does not believe are indicative of its core operating performance. The Company’s management believes Adjusted net income, Adjusted SG&A, free cash flow, Adjusted EBITDA and Adjusted EBITDA margin are helpful in highlighting trends in its operating results, while other measures can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which the Company operates and capital investments. In addition, the Company utilizes Adjusted EBITDA in certain calculations in its debt agreements.

You are encouraged to evaluate each adjustment and the reasons GMS considers it appropriate for supplemental analysis. In addition, in evaluating Adjusted net income, Adjusted SG&A and Adjusted EBITDA, you should be aware that in the future, the Company may incur expenses similar to the adjustments in the presentation of Adjusted net income, Adjusted SG&A and Adjusted EBITDA. The Company’s presentation of Adjusted net income, Adjusted SG&A, Adjusted SG&A margin, Adjusted EBITDA, and Adjusted EBITDA margin should not be construed as an inference that its future results will be unaffected by unusual or non-recurring items. In addition, Adjusted net income, free cash flow, Adjusted SG&A and Adjusted EBITDA may not be comparable to similarly titled measures used by other companies in GMS’s industry or across different industries. Please see the tables at the end of this release for a reconciliation of Adjusted EBITDA, free cash flow, Adjusted SG&A and Adjusted net income to the most directly comparable GAAP financial measures.

When calculating organic net sales growth, the Company excludes from the calculation (i) net sales of acquired businesses until the first anniversary of the acquisition date, and (ii) the impact of foreign currency translation.

Forward-Looking Statements and Information:

This press release includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. You can generally identify forward-looking statements by the Company’s use of forward-looking terminology such as “anticipate,” “believe,” “confident,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “seek,” or “should,” or the negative thereof or other variations thereon or comparable terminology. In particular, statements about the markets in which GMS operates, including in particular residential and commercial construction, and the economy generally, actions taken to optimize our operations and align our business consistent with demand and in response to COVID-19, our ability to continue successfully navigating the evolving operating environment, our optimized capital structure, strategic growth priorities, growth opportunities from acquisitions, and the ability to generate value for our shareholders contained in this press release may be considered forward-looking statements. The Company has based forward-looking statements on its current expectations, assumptions, estimates and projections. While the Company believes these expectations, assumptions, estimates, and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond its control, including current public health issues that may affect the Company’s business. Forward-looking statements involve risks and uncertainties, including, but not limited to, those described in the “Risk Factors” section in the Company’s most recent Annual Report on Form 10-K, and in its other periodic reports filed with the SEC. In addition, the statements in this release are made as of June 24, 2021. The Company undertakes no obligation to update any of the forward-looking statements made herein, whether as a result of new information, future events, changes in expectation or otherwise. These forward-looking statements should not be relied upon as representing the Company’s views as of any date subsequent to June 24, 2021.

GMS Inc.

Condensed Consolidated Statements of Operations (Unaudited)

(in thousands, except per share data)

 

?

Three Months Ended

 

Year Ended

 

April 30,

 

April 30,

?

2021

 

2020

 

2021

 

2020

Net sales

$

932,203

 

 

$

770,850

 

 

$

3,298,823

 

 

$

3,241,307

 

Cost of sales (exclusive of depreciation and amortization shown separately below)

638,353

 

 

519,256

 

 

2,236,120

 

 

2,178,093

 

Gross profit

293,850

 

 

251,594

 

 

1,062,703

 

 

1,063,214

 

Operating expenses:

 

 

 

 

 

 

 

Selling, general and administrative

207,321

 

 

195,609

 

 

763,629

 

 

784,081

 

Depreciation and amortization

28,221

 

 

28,318

 

 

108,125

 

 

116,533

 

Impairment of goodwill

 

 

63,074

 

 

 

 

63,074

 

Total operating expenses

235,542

 

 

287,001

 

 

871,754

 

 

963,688

 

Operating income (loss)

58,308

 

 

(35,407)

 

 

190,949

 

 

99,526

 

Other (expense) income:

 

 

 

 

 

 

 

Interest expense

(12,726)

 

 

(15,408)

 

 

(53,786)

 

 

(67,718)

 

Gain on legal settlement

 

 

14,029

 

 

1,382

 

 

14,029

 

Write-off of debt discount and deferred financing fees

(4,606)

 

 

(624)

 

 

(4,606)

 

 

(1,331)

 

Other income, net

714

 

 

565

 

 

3,155

 

 

1,819

 

Total other expense, net

(16,618)

 

 

(1,438)

 

 

(53,855)

 

 

(53,201)

 

Income (loss) before taxes

41,690

 

 

(36,845)

 

 

137,094

 

 

46,325

 

Provision for income taxes

7,944

 

 

4,611

 

 

31,534

 

 

22,944

 

Net income (loss)

$

33,746

 

 

$

(41,456)

 

 

$

105,560

 

 

$

23,381

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

Basic

42,994

 

 

42,435

 

 

42,765

 

 

41,853

 

Diluted

43,828

 

 

42,435

 

 

43,343

 

 

42,504

 

Net income (loss) per common share (1):

 

 

 

 

 

 

 

Basic

$

0.78

 

 

$

(0.98)

 

 

$

2.47

 

 

$

0.56

 

Diluted

$

0.77

 

 

$

(0.98)

 

 

$

2.44

 

 

$

0.55

 

(1)

The following table sets forth the computation of basic and diluted earnings (loss) per share of common stock for periods presented:

?

Three Months Ended

 

Year Ended

 

April 30,

 

April 30,

?

2021

 

2020

 

2021

 

2020

Net income (loss)

$

33,746

 

 

$

(41,456)

 

 

$

105,560

 

 

$

23,381

 

Less: Net income allocated to participating securities

 

 

 

 

 

 

74

 

Net income (loss) attributable to common stockholders

$

33,746

 

 

$

(41,456)

 

 

$

105,560

 

 

$

23,307

 

Basic earnings (loss) per common share:

 

 

 

 

 

 

 

Basic weighted average common shares outstanding

42,994

 

 

42,435

 

 

42,765

 

 

41,853

 

Basic earnings (loss) per common share

$

0.78

 

 

$

(0.98)

 

 

$

2.47

 

 

$

0.56

 

Diluted earnings (loss) per common share:

 

 

 

 

 

 

 

Basic weighted average common shares outstanding

42,994

 

 

42,435

 

 

42,765

 

 

41,853

 

Add: Common Stock Equivalents

834

 

 

 

 

578

 

 

651

 

Diluted weighted average common shares outstanding

43,828

 

 

42,435

 

 

43,343

 

 

42,504

 

Diluted earnings (loss) per common share

$

0.77

 

 

$

(0.98)

 

 

$

2.44

 

 

$

0.55

 

GMS Inc.

Condensed Consolidated Balance Sheets (Unaudited)

(in thousands, except per share data)

 

?

April 30,
2021

 

April 30,
2020

Assets

Current assets:

?

 

 

Cash and cash equivalents

$

167,012

 

 

$

210,909

 

Trade accounts and notes receivable, net of allowances of $6,282 and $5,141,

respectively

558,661

 

 

440,926

 

Inventories, net

357,054

 

 

299,815

 

Prepaid expenses and other current assets

19,525

 

 

14,972

 

Total current assets

1,102,252

 

 

966,622

 

Property and equipment, net of accumulated depreciation of $193,364 and

$158,554, respectively

311,326

 

 

305,467

 

Operating lease right-of-use assets

118,413

 

 

115,257

 

Goodwill

576,330

 

 

553,073

 

Intangible assets, net

350,869

 

 

361,884

 

Deferred income taxes

15,715

 

 

8,904

 

Other assets

8,993

 

 

13,247

 

Total assets

$

2,483,898

 

 

$

2,324,454

 

Liabilities and Stockholders’ Equity

Current liabilities:

 

 

 

Accounts payable

$

322,965

 

 

$

248,902

 

Accrued compensation and employee benefits

72,906

 

 

67,590

 

Other accrued expenses and current liabilities

87,138

 

 

75,326

 

Current portion of long-term debt

46,018

 

 

50,201

 

Current portion of operating lease liabilities

33,474

 

 

33,040

 

Total current liabilities

562,501

 

 

475,059

 

Non-current liabilities:

 

 

 

Long-term debt, less current portion

932,409

 

 

1,047,279

 

Long-term operating lease liabilities

90,290

 

 

89,605

 

Deferred income taxes, net

12,728

 

 

12,018

 

Other liabilities

63,508

 

 

66,512

 

Total liabilities

1,661,436

 

 

1,690,473

 

Commitments and contingencies

 

 

 

Stockholders' equity:

 

 

 

Common stock, par value $0.01 per share, 500,000 shares authorized; 43,073

and 42,554 shares issued and outstanding as of April 30, 2021 and 2020, respectively

431

 

 

426

 

Preferred stock, par value $0.01 per share, 50,000 shares authorized; 0 shares issued and outstanding as of April 30, 2021 and 2020

 

 

 

Additional paid-in capital

542,737

 

 

529,662

 

Retained earnings

274,535

 

 

168,975

 

Accumulated other comprehensive income (loss)

4,759

 

 

(65,082)

 

Total stockholders' equity

822,462

 

 

633,981

 

Total liabilities and stockholders' equity

$

2,483,898

 

 

$

2,324,454

 

?

GMS Inc.

Condensed Consolidated Statements of Cash Flows (Unaudited)

(in thousands)

 

?

Year Ended April 30,

?

2021

 

2020

Cash flows from operating activities:

 

 

?

Net income

$

105,560

 

 

$

23,381

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

Depreciation and amortization

108,125

 

 

116,533

 

Impairment of goodwill

 

 

63,074

 

Write-off and amortization of debt discount and debt issuance costs

7,568

 

 

4,541

 

Equity-based compensation

12,872

 

 

8,970

 

(Gain) loss on disposal and impairment of assets

(1,011)

 

 

658

 

Change in fair value of financial instruments

 

 

 

Deferred income taxes

(10,329)

 

 

926

 

Other items, net

1,552

 

 

4,110

 

Changes in assets and liabilities net of effects of acquisitions:

 

 

 

Trade accounts and notes receivable

(101,617)

 

 

50,215

 

Inventories

(46,660)

 

 

(4,579)

 

Prepaid expenses and other assets

(2,621)

 

 

6,623

 

Accounts payable

65,446

 

 

31,499

 

Accrued compensation and employee benefits

4,477

 

 

4,740

 

Other accrued expenses and liabilities

9,942

 

 

(7,612)

 

Cash provided by operating activities

153,304

 

 

303,079

 

Cash flows from investing activities:

 

 

 

Purchases of property and equipment

(29,873)

 

 

(25,193)

 

Proceeds from sale of assets

2,262

 

 

2,229

 

Acquisition of businesses, net of cash acquired

(35,976)

 

 

(24,136)

 

Cash used in investing activities

(63,587)

 

 

(47,100)

 

Cash flows from financing activities:

 

 

 

Repayments on revolving credit facilities

(102,189)

 

 

(837,424)

 

Borrowings from revolving credit facilities

14,750

 

 

880,698

 

Payments of principal on long-term debt

(8,754)

 

 

(109,968)

 

Payments of principal on finance lease obligations

(30,371)

 

 

(25,275)

 

Borrowings from term loan

511,000

 

 

 

Repayments of term loan

(869,427)

 

 

 

Issuance of Senior Notes

350,000

 

 

 

Repurchases of common stock

(4,160)

 

 

 

Payments for contingent consideration

 

 

(11,133)

 

Debt issuance costs

(6,299)

 

 

(1,286)

 

Proceeds from exercises of stock options

7,559

 

 

11,793

 

Payments for taxes related to net share settlement of equity awards

(807)

 

 

(532)

 

Proceeds from issuance of stock pursuant to employee stock purchase plan

2,076

 

 

1,793

 

Cash used in financing activities

(136,622)

 

 

(91,334)

 

Effect of exchange rates on cash and cash equivalents

3,008

 

 

(1,074)

 

(Decrease) increase in cash and cash equivalents

(43,897)

 

 

163,571

 

Cash and cash equivalents, beginning of year

210,909

 

 

47,338

 

Cash and cash equivalents, end of year

$

167,012

 

 

$

210,909

 

Supplemental cash flow disclosures:

 

 

 

Cash paid for income taxes

$

46,417

 

 

$

29,761

 

Cash paid for interest

49,650

 

 

63,745

 

?

GMS Inc.

Net Sales by Product Group (Unaudited)

(dollars in thousands)

 

?

Three Months Ended

 

Year Ended

?

April 30, 2021

 

% of
Total

 

April 30, 2020

 

% of
Total

 

April 30, 2021

 

% of
Total

 

April 30, 2020

 

% of
Total

?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wallboard

$

376,926

 

 

40.4%

 

$

323,171

 

 

41.9%

 

$

1,346,560

 

 

40.8%

 

$

1,329,775

 

 

41.0%

Ceilings

121,285

 

 

13.0%

 

111,142

 

 

14.4%

 

450,524

 

 

13.7%

 

475,827

 

 

14.7%

Steel framing

143,266

 

 

15.4%

 

115,311

 

 

15.0%

 

469,002

 

 

14.2%

 

502,122

 

 

15.5%

Complementary products

290,726

 

 

31.2%

 

221,226

 

 

28.7%

 

1,032,737

 

 

31.3%

 

933,583

 

 

28.8%

Total net sales

$

932,203

 

 

 

 

$

770,850

 

 

 

 

$

3,298,823

 

 

 

 

$

3,241,307

 

 

 

?

GMS Inc.

Reconciliation of Net Income (Loss) to Adjusted EBITDA (Unaudited)

(in thousands)

 

?

Three Months Ended

 

Year Ended

?

April 30,

 

April 30,

?

2021

 

2020

 

2021

 

2020

 

 

 

 

 

 

 

 

Net income (loss)

$

33,746

 

 

$

(41,456)

 

 

$

105,560

 

 

$

23,381

 

Interest expense

12,726

 

 

15,408

 

 

53,786

 

 

67,718

 

Write-off of debt discount and deferred financing fees

4,606

 

 

624

 

 

4,606

 

 

1,331

 

Interest income

(29)

 

 

(62)

 

 

(86)

 

 

(88)

 

Provision for income taxes

7,944

 

 

4,611

 

 

31,534

 

 

22,944

 

Depreciation expense

13,572

 

 

13,388

 

 

50,480

 

 

51,332

 

Amortization expense

14,649

 

 

14,930

 

 

57,645

 

 

65,201

 

EBITDA

$

87,214

 

 

$

7,443

 

 

$

303,525

 

 

$

231,819

 

Impairment of goodwill

 

 

63,074

 

 

 

 

63,074

 

Stock appreciation expense(a)

621

 

 

592

 

 

3,173

 

 

1,572

 

Redeemable noncontrolling interests(b)

226

 

 

194

 

 

1,288

 

 

520

 

Equity-based compensation(c)

1,708

 

 

1,885

 

 

8,442

 

 

7,060

 

Severance and other permitted costs(d)

322

 

 

2,085

 

 

2,948

 

 

5,733

 

Transaction costs (acquisitions and other)(e)

279

 

 

681

 

 

1,068

 

 

2,414

 

(Gain) loss on disposal and impairment of assets(f)

(482)

 

 

1,530

 

 

(1,011)

 

 

658

 

Effects of fair value adjustments to inventory(g)

788

 

 

114

 

 

788

 

 

575

 

Gain on legal settlement

 

 

(14,029)

 

 

(1,382)

 

 

(14,029)

 

Secondary public offering costs(h)

 

 

 

 

 

 

363

 

Debt transaction costs(i)

532

 

 

 

 

532

 

 

 

EBITDA addbacks

3,994

 

 

56,126

 

 

15,846

 

 

67,940

 

Adjusted EBITDA

$

91,208

 

 

$

63,569

 

 

$

319,371

 

 

$

299,759

 

?

 

 

 

 

 

 

 

Net sales

$

932,203

 

 

$

770,850

 

 

$

3,298,823

 

 

$

3,241,307

 

Adjusted EBITDA Margin

9.8

%

 

8.2

%

 

9.7

%

 

9.2

%

(a)

Represents changes in the fair value of stock appreciation rights.

(b)

Represents changes in the fair values of noncontrolling interests.

(c)

Represents non-cash equity-based compensation expense related to the issuance of share-based awards.

(d)

Represents severance expenses and other costs permitted in the calculation of Adjusted EBITDA under the ABL Facility and the Term Loan Facility, including certain unusual, nonrecurring costs and credits due to COVID-19.

(e)

Represents costs related to acquisitions paid to third parties.

(f)

Includes gains from the sale of assets and impairment of assets resulting from restructuring plans to close certain facilities.

(g)

Represents the non-cash cost of sales impact of acquisition accounting adjustments to increase inventory to its estimated fair value.

(h)

Represents costs paid to third-party advisors related to secondary offerings of our common stock.

(i)

Represents costs paid to third-party advisors related to debt refinancing activities.

GMS Inc.

Reconciliation of Cash Provided by Operating Activities to Free Cash Flow (Unaudited)

(in thousands)

 

 

 

 

?

Three Months Ended

 

Year Ended

?

April 30,

 

April 30,

?

2021

 

2020

 

2021

 

2020

Cash provided by operating activities

$

84,808

 

 

$

167,712

 

 

$

153,304

 

 

$

303,079

 

Purchases of property and equipment

(12,016)

 

 

(4,309)

 

 

(29,873)

 

 

(25,193)

 

Free cash flow (a)

$

72,792

 

 

$

163,403

 

 

$

123,431

 

 

$

277,886

 

(a)

Free cash flow is a non-GAAP financial measure that we define as net cash provided by operations less capital expenditures.

GMS Inc.

Reconciliation of Selling, General and Administrative Expense to Adjusted SG&A (Unaudited)

(in thousands)

 

?

Three Months Ended

 

Year Ended

?

April 30,

 

April 30,

?

2021

 

2020

 

2021

 

2020

Selling, general and administrative expense

$

207,321

 

 

$

195,609

 

 

$

763,629

 

 

$

784,081

 

 

 

 

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 

Stock appreciation expense(a)

(621)

 

 

(592)

 

 

(3,173)

 

 

(1,572)

 

Redeemable noncontrolling interests(b)

(226)

 

 

(194)

 

 

(1,288)

 

 

(520)

 

Equity-based compensation(c)

(1,708)

 

 

(1,885)

 

 

(8,442)

 

 

(7,060)

 

Severance and other permitted costs(d)

(275)

 

 

(1,874)

 

 

(2,864)

 

 

(4,284)

 

Transaction costs (acquisitions and other)(e)

(279)

 

 

(681)

 

 

(1,068)

 

 

(2,414)

 

Gain (loss) on disposal and impairment of assets(f)

482

 

 

(1,530)

 

 

1,011

 

 

(658)

 

Secondary public offering costs(g)

 

 

 

 

 

 

(363)

 

Debt transaction costs(h)

(532)

 

 

 

 

(532)

 

 

 

Adjusted SG&A

$

204,162

 

 

$

188,853

 

 

$

747,273

 

 

$

767,210

 

 

 

 

 

 

 

 

 

Net sales

$

932,203

 

 

$

770,850

 

 

$

3,298,823

 

 

$

3,241,307

 

Adjusted SG&A margin

21.9

%

 

24.5

%

 

22.7

%

 

23.7

%

(a)

Represents changes in the fair value of stock appreciation rights.

(b)

Represents changes in the fair values of noncontrolling interests.

(c)

Represents non-cash equity-based compensation expense related to the issuance of share-based awards.

(d)

Represents severance expenses and other costs permitted in the calculation of Adjusted EBITDA under the ABL Facility and the Term Loan Facility, including certain unusual, nonrecurring costs and credits due to COVID-19.

(e)

Represents costs related to acquisitions paid to third parties.

(f)

Includes gains from the sale of assets and impairment of assets resulting from restructuring plans to close certain facilities.

(g)

Represents costs paid to third-party advisors related to secondary offerings of our common stock.

(h)

Represents costs paid to third-party advisors related to debt refinancing activities.?

GMS Inc.

Reconciliation of Income (Loss) Before Taxes to Adjusted Net Income (Unaudited)

(in thousands, except per share data)

 

 

 

 

?

Three Months Ended

 

Year Ended

?

April 30,

 

April 30,

?

2021

 

2020

 

2021

 

2020

 

 

 

 

 

 

 

 

Income (loss) before taxes

$

41,690

 

 

$

(36,845)

 

 

$

137,094

 

 

$

46,325

 

EBITDA add-backs

3,994

 

 

56,126

 

 

15,846

 

 

67,940

 

Write-off of debt discount and deferred financing fees

4,606

 

 

624

 

 

4,606

 

 

1,331

 

Purchase accounting depreciation and amortization (1)

10,257

 

 

11,038

 

 

40,311

 

 

47,568

 

Adjusted pre-tax income

60,547

 

 

30,943

 

 

197,857

 

 

163,164

 

Adjusted income tax expense

13,623

 

 

6,962

 

 

44,518

 

 

36,712

 

Adjusted net income

$

46,924

 

 

$

23,981

 

 

$

153,339

 

 

$

126,452

 

Effective tax rate (2)

22.5

%

 

22.5

%

 

22.5

%

 

22.5

%

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

Basic

42,994

 

 

42,435

 

 

42,765

 

 

41,853

 

Diluted (3)

43,828

 

 

42,826

 

 

43,343

 

 

42,637

 

Adjusted net income per share:

 

 

 

 

 

 

 

Basic

$

1.09

 

 

$

0.57

 

 

$

3.59

 

 

$

3.02

 

Diluted

$

1.07

 

 

$

0.56

 

 

$

3.54

 

 

$

2.97

 

(1)

Depreciation and amortization from the increase in value of certain long-term assets associated with the April 1, 2014 acquisition of the predecessor company and the acquisition of Titan.

(2)

Normalized cash tax rate excluding the impact of purchase accounting and certain other deferred tax amounts.

(3)

Diluted shares outstanding for periods prior to June 13, 2019 have been adjusted to include the effect of 1.1 million shares of equity issued in connection with the acquisition of Titan that were exchangeable for the Company’s common stock. On June 13, 2019, the holders exchanged all of the exchangeable shares for 1.1 million shares of the Company’s common stock.

 

Investors:
Leslie H. Kratcoski
ir@gms.com
770-723-3306

Source: GMS Inc.