On June 30, GMS Inc. reported financial results for the fourth quarter and fiscal year, which ended April 30.

Fourth Quarter Fiscal 2024 Highlights

Comparisons are to the fourth quarter of fiscal 2023, unless otherwise noted.

• Net sales of $1.413 million, an increase of 8.4 percent, as volume growth across the major product lines was partially offset by steel price deflation, while organic net sales increased by 4 percent. On a per-day basis, net sales were up 6.7 percent and organic net sales increased 2.4 percent.
• A net income of $56.4 million, which was impacted by an increase of $5.9 million in additional tax and financing expenses, decreasing net income by 25.4 percent from $75.6 million. Net income per diluted share was $1.39, compared to $1.80. Net income margin was 4 percent, compared to 5.8 percent. Adjusted net income was $78.1 million, or $1.93 per diluted share, compared to $88.6 million, or $2.11 per diluted share.
• An adjusted EBITDA of $146.6 million, compared to $154.3 million. The adjusted EBITDA margin was 10.4 percent, compared to 11.8 percent.
• The cash provided by operating activities was $204.2 million, compared to $204.8 million. Free cash flow was $186.7 million, compared with $185.4 million.
• Repurchased 174,555 shares of common stock for $16 million at an average cost per share of $91.86, compared to 496,737 shares of common stock for $27.9 million at an average cost per share of $56.15.
• Completed the acquisition of Kamco Supply Corporation, meaningfully expanding the company’s presence in New York City.
• Net debt leverage was 1.7 times the adjusted EBITDA, as of the end of the fourth quarter of fiscal 2024 following the acquisition of Kamco, up from 1.5 times the adjusted EBITDA at the end of the third quarter of fiscal 2024 and 1.4 times at the end of the fourth quarter of fiscal 2023.

Full Year Fiscal 2024 Highlights

Comparisons are to the full year of fiscal 2023, unless otherwise noted.

• Net sales of $5,501.9 million, an increase of 3.2 percent, while organic net sales increased by 0.3 percent. On a per-day basis, net sales were up 2.4 percent and organic net sales were down 0.5 percent.
• A net income of $276.1 million, a decrease of 17.1 percent compared to a net income of $333 million. A net income per diluted share of $6.75, a decrease from $7.82. The net income margin was 5 percent, compared to 6.2 percent. An adjusted net income of $337.3 million, a decrease of 14.8 percent compared to $395.7 million. An adjusted net income per diluted share of $8.25, compared to $9.29.
• An adjusted EBITDA of $615.5 million, a decrease of $50.2 million, or 7.5 percent. The adjusted EBITDA margin decreased 130 basis points to 11.2 percent from 12.5 percent.
• The cash provided by operating activities was $433.2 million, compared to $441.7 million. Free cash flow was $376 million, compared to $389.1 million.
• Repurchased 1.7 million shares of common stock for $115.6 million at an average cost per share of $67.93, compared to 2.3 million shares of common stock for $110.6 million at an average cost per share of $48.74.
• Successfully repriced the company’s Term Loan B, resulting in an expected $3.7 million annualized interest expense savings as compared to the prior terms, or an expected annual $2.6 million benefit to net income.
• Demonstrating the continued execution of its strategic priorities, including platform expansion and complementary products growth, the company completed three strategic acquisitions and opened five greenfield yard locations.

“We were pleased to deliver solid results for our fourth quarter and full year fiscal 2024, including record levels of net sales for the year,” said John C. Turner Jr., president and chief executive officer of GMS. “Versus [the] prior year, despite lower single-family full-year demand, we delivered volume growth across all our major product categories, which helped offset significant steel price deflation that occurred at levels beyond our prior expectations. Solid levels of multi-family construction remained in [a] backlog and commercial project activity continued through the end of our fiscal year. Plus, single-family year-over-year wallboard volume growth for the fourth quarter turned positive for the first time since the fall of 2022. We believe this indicates the start of a mild recovery in an end-market that, with considerable pent-up demand, remains poised for a more robust recovery with the expected eventual relief in mortgage rates.

“As we move into fiscal 2025, we believe we are well prepared for what we expect to be continued changes in end-market dynamics, as an improving single-family end-market should help to offset declining multifamily, and likely commercial, demand as we move throughout the year,” Turner continued. “While we now anticipate some near-term headwinds, particularly in wallboard and steel margins, we expect to deliver improvement in our second quarter and solid results for the full fiscal year. With the typical three- to six-month lag in the realization of wallboard price increases, we expect to see benefits from the implementation of the previously announced pricing actions later this summer. Also, we anticipate recent steel manufacturer price increases to improve stabilization in pricing for that product category, which has softened further into our first fiscal quarter of 2025, pressuring both our top line and our profitability for the quarter. Leveraging the benefits of our scale, a wide breadth of product offerings and a balanced mix of end-markets served, we expect to successfully navigate these shifts in end-market demand and price movement during the year, all while continuing to focus on providing outstanding service and continuing the execution of our strategic priorities.”

Fourth Quarter Fiscal 2024 Results

Comparisons are to the fourth quarter of fiscal 2023, unless otherwise noted.

Net sales for the fourth quarter of fiscal 2024 were $1.41 billion, an increase of 8.4 percent, or 6.7 percent on a same-day basis, primarily due to volume growth in each of the company’s four primary product categories, as commercial, single-family and multifamily each showed improvement in demand over the prior year quarter. This was the first quarter of positive year-over-year growth in single-family wallboard volume since the fall of 2022. Offsetting the volume growth was significant year-over-year steel price deflation, which reduced net sales by an estimated $29 million for the quarter. Organic net sales increased by 4 percent in total, or 2.4 percent on a same-day basis.

Fourth quarter year-over-year sales by product category were as follows:

• Wallboard sales of $586.1 million, an increase of 7.6 percent (up 6 percent on an organic basis).
• Ceilings sales of $188.9 million, an increase of 21.7 percent (up 11.4 percent on an organic basis).
• Steel framing sales of $220.5 million, a decrease of 1.5 percent (down 5.1 percent on an organic basis).
• Complementary product sales of $417.6 million, an increase of 9.8 percent (up 3.5 percent on an organic basis).