GMS Reports Fourth Quarter and Fiscal Year 2022 Results

Record Levels of Net Sales, Net Income and Adjusted EBITDA

Announces Expanded Share Repurchase Authorization

TUCKER, Ga.--()--GMS Inc. (NYSE: GMS), a leading North American specialty building products distributor, today reported financial results for the fourth quarter and fiscal year ended April 30, 2022.

Fourth Quarter Fiscal 2022 Highlights

(Comparisons are to the fourth quarter of fiscal 2021 unless otherwise noted)

  • Net sales of $1,288.7 million increased 38.2%; organic net sales increased 28.9%.
  • Net income of $76.5 million, or $1.75 per diluted share, was more than double the net income of $33.7 million, or $0.77 per diluted share, recorded a year ago; Adjusted net income of $91.3 million, or $2.09 per diluted share, compared to $46.9 million, or $1.07 per diluted share.
  • Adjusted EBITDA of $154.2 million increased $63.0 million, or 69.1%; Adjusted EBITDA margin improved 220 basis points to 12.0% from 9.8%.
  • Cash provided by operating activities of $199.5 million, compared to $84.8 million. Free cash flow of $191.6 million, compared with $72.8 million.
  • Net debt leverage was 1.8 times as of the end of the fourth quarter of fiscal 2022, down from 2.3 at the end of the third quarter and down from 2.5 times at the end of the fourth quarter of fiscal 2021.

Full Year Fiscal 2022 Highlights

(Comparisons are to the full year of fiscal 2021, unless otherwise noted.)

  • Net sales of $4,634.9 million increased 40.5%; organic net sales increased 30.9%.
  • Net income of $273.4 million, or $6.23 per diluted share, compared to net income of $105.6 million or $2.44 per diluted share; Adjusted net income of $328.8 million, or $7.49 per diluted share, compared to $153.3 million, or $3.54 per diluted share.
  • Adjusted EBITDA of $566.9 million increased $247.6 million, or 77.5%; Adjusted EBITDA margin improved 250 basis points to 12.2% from 9.7%.
  • The Company completed five business acquisitions, including the acquisition of Westside Building Material, one of the largest independent distributors of interior building products in the US with nine locations across California and one in Nevada, as well as the acquisition of Ames Taping Tools Holding, LLC, the leading provider of automatic taping and finishing tools and related products to the professional drywall finishing industry. During fiscal 2022, the Company also opened 13 greenfield locations and five new AMES store locations under GMS ownership.

“GMS achieved outstanding results for the fourth quarter and full year fiscal 2022,” said John C. Turner, Jr., President and Chief Executive Officer of GMS. “Our scale, balanced mix of products and customers, commitment to delivering best-in-class service and continued execution of our growth strategy, coupled with strong residential demand and an inflationary pricing environment, enabled us to deliver record levels of net sales, net income and Adjusted EBITDA. We remain optimistic about the year ahead, which, despite rising rates, is supported by a continuing fundamental underbuild of residential housing stock as well as signs of an improving commercial market.”

Turner continued, “We are also very pleased to announce that our Board of Directors has approved the repurchase of up to $200 million of the Company’s common stock. This expanded authorization demonstrates our Board’s continued confidence in the strength and future prospects of our business. We remain focused on the execution of our strategic priorities, including expanding our platform through both acquisitions and greenfield opportunities, as well as enhancing our product and service offerings and delivering improved profitability as we leverage technology and best practices to achieve advancements in productivity. Looking ahead, we are committed to driving long-term shareholder value with a disciplined capital allocation strategy that balances investing in our organic growth initiatives, pursuing accretive M&A transactions and opportunistically leveraging favorable market conditions for share repurchases as they arise.

Fourth Quarter Fiscal 2022 Results

Net sales for the fourth quarter of fiscal 2022 of $1.29 billion increased 38.2% as compared with the prior year quarter, primarily due to inflationary pricing, healthy residential end market demand, strong performance from our complementary products and the acquisitions of Westside Building Material and AMES Taping Tools. Organic net sales increased 28.9%.

Excluding the impact from one less selling day in the fourth quarter of fiscal 2022 compared to the same period a year ago, net sales and organic net sales were up 40.4% and 30.9%, respectively.

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

  • Wallboard sales of $491.1 million increased 30.3% (up 26.5% on an organic basis).
  • Ceilings sales of $148.9 million increased 22.7% (up 17.0% on an organic basis).
  • Steel framing sales of $276.9 million increased 93.3% (up 81.6% on an organic basis).
  • Complementary product sales of $371.8 million increased 27.9% (up 11.1% on an organic basis).

Gross profit of $412.8 million increased 40.5% compared to the fourth quarter of fiscal 2021, and gross margin improved 50 basis points to 32.0%, both primarily due to the successful pass through of product price inflation, continued strength in residential market demand and incremental gross profit dollars along with accretive gross margins from acquisitions.

Selling, general and administrative (“SG&A”) expense as a percentage of net sales improved 170 basis points to 20.5% for the quarter compared to 22.2% in the fourth quarter of fiscal 2021. Adjusted SG&A expense as a percentage of net sales of 20.2% improved 170 basis points from 21.9% in the prior year quarter as product price inflation outpaced increases in operating costs.

Net income increased 126.7% to $76.5 million, or $1.75 per diluted share, compared to net income of $33.7 million, or $0.77 per diluted share, in the fourth quarter of fiscal 2021. Adjusted net income was $91.3 million, or $2.09 per diluted share, compared to $46.9 million, or $1.07 per diluted share, in the fourth quarter of the prior fiscal year.

Adjusted EBITDA increased $63.0 million, or 69.1%, to $154.2 million compared to the prior year quarter. Adjusted EBITDA margin of 12.0% improved 220 basis points from 9.8% for the fourth quarter of fiscal 2021.

Balance Sheet, Liquidity and Cash Flow

As of April 30, 2022, the Company had cash on hand of $101.9 million, total debt of $1.2 billion and $330.7 million of available liquidity under its revolving credit facilities. Net debt leverage was 1.8 times as of the end of the quarter, down from 2.5 times at the end of the fourth quarter of fiscal 2021.

The Company generated cash from operating activities and free cash flow of $199.5 million and $191.6 million, respectively, for the quarter ended April 30, 2022. For the quarter ended April 30, 2021, the Company generated cash from operating activities and free cash flow of $84.8 million and $72.8 million, respectively.

Expanded Share Repurchase Authorization

The Company’s Board of Directors has approved an expanded share repurchase program under which the Company is authorized to repurchase up to $200 million of its outstanding common stock. This expanded program replaces the Company’s previous share repurchase authorization of $75 million, which commenced in 2018, and reflects the Board’s confidence in the business going forward. The repurchases will be made from time to time on the open market at prevailing market prices or in negotiated transactions off the market.

Conference Call and Webcast

GMS will host a conference call and webcast to discuss its results for the fourth quarter of fiscal year 2022, which ended on April 30, 2022, and other information related to its business at 8:30 a.m. Eastern Time on Thursday, June 23, 2022. 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 23, 2022 and can be accessed at 844-512-2921 (domestic) or 412-317-6671 (international) and entering the pass code 13728027.

About GMS Inc.

Founded in 1971, GMS operates a network of nearly 300 distribution centers with extensive product offerings of wallboard, ceilings, steel framing and complementary construction products. In addition, GMS operates nearly 100 tool sales, rental and service centers, providing a comprehensive selection of building products and solutions for its residential and commercial contractor customer base across the United States and Canada. The Company’s unique operating model combines the benefits of a national platform and strategy with a local go-to-market focus, enabling GMS to generate significant economies of scale while maintaining high levels of customer service.

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, pricing, the demand for the Company’s products, the Company’s strategic priorities and the results thereof, service levels and the ability to drive value and results contained in this press release may be considered forward-looking statements. In addition, forward looking statements may include statements regarding the Company’s expectations concerning management’s plans for execution of a stock repurchase program, including the maximum amount, manner and duration of the purchase of the Company’s common stock under its authorized stock repurchase program. 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 and future public health issues, economic issues and geopolitical 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 23, 2022. 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 23, 2022.

GMS Inc.

Condensed Consolidated Statements of Operations (Unaudited)

(in thousands, except per share data)

 

 

 

 

Three Months Ended

 

Year Ended

 

April 30,

 

April 30,

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Net sales

$

1,288,653

 

 

$

932,203

 

 

$

4,634,875

 

 

$

3,298,823

 

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

 

875,853

 

 

 

638,353

 

 

 

3,146,600

 

 

 

2,236,120

 

Gross profit

 

412,800

 

 

 

293,850

 

 

 

1,488,275

 

 

 

1,062,703

 

Operating expenses:

 

 

 

 

 

 

 

Selling, general and administrative

 

264,473

 

 

 

207,321

 

 

 

950,125

 

 

 

763,629

 

Depreciation and amortization

 

32,365

 

 

 

28,221

 

 

 

119,232

 

 

 

108,125

 

Total operating expenses

 

296,838

 

 

 

235,542

 

 

 

1,069,357

 

 

 

871,754

 

Operating income

 

115,962

 

 

 

58,308

 

 

 

418,918

 

 

 

190,949

 

Other (expense) income:

 

 

 

 

 

 

 

Interest expense

 

(14,267

)

 

 

(12,726

)

 

 

(58,097

)

 

 

(53,786

)

Gain on legal settlement

 

 

 

 

 

 

 

 

 

 

1,382

 

Write-off of debt discount and deferred financing fees

 

 

 

 

(4,606

)

 

 

 

 

 

(4,606

)

Other income, net

 

1,227

 

 

 

714

 

 

 

3,998

 

 

 

3,155

 

Total other expense, net

 

(13,040

)

 

 

(16,618

)

 

 

(54,099

)

 

 

(53,855

)

Income before taxes

 

102,922

 

 

 

41,690

 

 

 

364,819

 

 

 

137,094

 

Provision for income taxes

 

26,426

 

 

 

7,944

 

 

 

91,377

 

 

 

31,534

 

Net income

$

76,496

 

 

$

33,746

 

 

$

273,442

 

 

$

105,560

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

Basic

 

42,977

 

 

 

42,994

 

 

 

43,075

 

 

 

42,765

 

Diluted

 

43,776

 

 

 

43,828

 

 

 

43,898

 

 

 

43,343

 

Net income per common share:

 

 

 

 

 

 

 

Basic

$

1.78

 

 

$

0.78

 

 

$

6.35

 

 

$

2.47

 

Diluted

$

1.75

$

0.77

$

6.23

$

2.44

GMS Inc.

Condensed Consolidated Balance Sheets (Unaudited)

(in thousands, except per share data)

 

 

 

 

April 30,

2022

 

April 30,

2021

Assets

Current assets:

 

 

Cash and cash equivalents

$

101,916

 

 

$

167,012

Trade accounts and notes receivable, net of allowances of $9,346 and $6,282, respectively

 

750,046

 

 

 

558,661

Inventories, net

 

550,953

 

 

 

357,054

Prepaid expenses and other current assets

 

20,212

 

 

 

19,525

Total current assets

 

1,423,127

 

 

 

1,102,252

Property and equipment, net of accumulated depreciation of $227,288 and $193,364, respectively

 

350,679

 

 

 

311,326

Operating lease right-of-use assets

 

153,271

 

 

 

118,413

Goodwill

 

695,897

 

 

 

576,330

Intangible assets, net

 

454,747

 

 

 

350,869

Deferred income taxes

 

17,883

 

 

 

15,715

Other assets

 

8,795

 

 

 

8,993

Total assets

$

3,104,399

 

 

$

2,483,898

Liabilities and Stockholders’ Equity

Current liabilities:

 

 

 

Accounts payable

$

367,315

 

 

$

322,965

Accrued compensation and employee benefits

 

107,925

 

 

 

72,906

Other accrued expenses and current liabilities

 

127,938

 

 

 

87,138

Current portion of long-term debt

 

47,605

 

 

 

46,018

Current portion of operating lease liabilities

 

38,415

 

 

 

33,474

Total current liabilities

 

689,198

 

 

 

562,501

Non-current liabilities:

 

 

 

Long-term debt, less current portion

 

1,136,585

 

 

 

932,409

Long-term operating lease liabilities

 

112,161

 

 

 

90,290

Deferred income taxes, net

 

46,802

 

 

 

12,728

Other liabilities

 

55,155

 

 

 

63,508

Total liabilities

 

2,039,901

 

 

 

1,661,436

Commitments and contingencies

 

 

 

Stockholders' equity:

 

 

 

Common stock, par value $0.01 per share, 500,000 shares authorized; 42,773

and 43,073 shares issued and outstanding as of April 30, 2022 and 2021, respectively

 

428

 

 

 

431

Preferred stock, par value $0.01 per share, 50,000 shares authorized; 0 shares issued

and outstanding as of April 30, 2022 and 2021

 

 

 

 

Additional paid-in capital

 

522,136

 

 

 

542,737

Retained earnings

 

547,977

 

 

 

274,535

Accumulated other comprehensive income (loss)

 

(6,043

)

 

 

4,759

Total stockholders' equity

 

1,064,498

 

 

 

822,462

Total liabilities and stockholders' equity

$

3,104,399

 

 

$

2,483,898

GMS Inc.

Condensed Consolidated Statements of Cash Flows (Unaudited)

(in thousands)

 

 

 

Year Ended April 30,

 

2022

 

 

 

2021

 

Cash flows from operating activities:

 

 

Net income

$

273,442

 

 

$

105,560

 

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

 

 

 

Depreciation and amortization

 

119,232

 

 

 

108,125

 

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

 

2,744

 

 

 

7,568

 

Equity-based compensation

 

17,354

 

 

 

12,872

 

Gain on disposal of assets

 

(913

)

 

 

(1,011

)

Deferred income taxes

 

(351

)

 

 

(10,329

)

Other items, net

 

5,706

 

 

 

1,552

 

Changes in assets and liabilities net of effects of acquisitions:

 

 

 

Trade accounts and notes receivable

 

(162,118

)

 

 

(101,617

)

Inventories

 

(156,311

)

 

 

(46,660

)

Prepaid expenses and other assets

 

(92

)

 

 

(2,621

)

Accounts payable

 

28,423

 

 

 

65,446

 

Accrued compensation and employee benefits

 

32,564

 

 

 

4,477

 

Other accrued expenses and liabilities

 

19,931

 

 

 

9,942

 

Cash provided by operating activities

 

179,611

 

 

 

153,304

 

Cash flows from investing activities:

 

 

 

Purchases of property and equipment

 

(41,082

)

 

 

(29,873

)

Proceeds from sale of assets

 

1,922

 

 

 

2,262

 

Acquisition of businesses, net of cash acquired

 

(348,050

)

 

 

(35,976

)

Cash used in investing activities

 

(387,210

)

 

 

(63,587

)

Cash flows from financing activities:

 

 

 

Repayments on revolving credit facilities

 

(1,178,897

)

 

 

(102,189

)

Borrowings from revolving credit facilities

 

1,390,222

 

 

 

14,750

 

Payments of principal on long-term debt

 

(5,110

)

 

 

(8,754

)

Payments of principal on finance lease obligations

 

(31,365

)

 

 

(30,371

)

Borrowings from term loan

 

 

 

 

511,000

 

Repayments of term loan

 

 

 

 

(869,427

)

Issuance of Senior Notes

 

 

 

 

350,000

 

Repurchases of common stock

 

(35,488

)

 

 

(4,160

)

Debt issuance costs

 

 

 

 

(6,299

)

Proceeds from exercises of stock options

 

4,434

 

 

 

7,559

 

Payments for taxes related to net share settlement of equity awards

 

(2,850

)

 

 

(807

)

Proceeds from issuance of stock pursuant to employee stock purchase plan

 

2,332

 

 

 

2,076

 

Cash provided by (used in) financing activities

 

143,278

 

 

 

(136,622

)

Effect of exchange rates on cash and cash equivalents

 

(775

)

 

 

3,008

 

Decrease in cash and cash equivalents

 

(65,096

)

 

 

(43,897

)

Cash and cash equivalents, beginning of year

 

167,012

 

 

 

210,909

 

Cash and cash equivalents, end of year

$

101,916

 

 

$

167,012

 

Supplemental cash flow disclosures:

 

 

 

Cash paid for income taxes

$

86,288

 

 

$

46,417

 

Cash paid for interest

 

46,204

 

 

 

49,650

 

GMS Inc.

Net Sales by Product Group (Unaudited)

(dollars in thousands)

 

 

 

 

Three Months Ended

 

Year Ended

April 30,

2022

 

% of

Total

 

April 30,

2021

 

% of

Total

 

April 30,

2022

 

% of

Total

 

April 30,

2021

 

% of

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wallboard

$ 491,062

 

38.1%

 

$ 376,926

 

40.4%

 

$ 1,710,851

 

36.9%

 

$ 1,346,648

 

40.8%

Ceilings

148,869

 

11.6%

 

121,286

 

13.0%

 

567,700

 

12.2%

 

451,766

 

13.7%

Steel framing

276,901

 

21.5%

 

143,266

 

15.4%

 

1,027,941

 

22.2%

 

469,048

 

14.2%

Complementary products

371,821

 

28.8%

 

290,725

 

31.2%

 

1,328,383

 

28.7%

 

1,031,361

 

31.3%

Total net sales

$ 1,288,653

 

 

 

$ 932,203

 

 

 

$ 4,634,875

 

 

 

$ 3,298,823

 

 

GMS Inc.

Reconciliation of Net Income to Adjusted EBITDA (Unaudited)

(in thousands)

 

 

 

 

Three Months Ended

 

Year Ended

April 30,

 

April 30,

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

 

 

 

 

 

 

 

Net income

$

76,496

 

 

$

33,746

 

 

$

273,442

 

 

$

105,560

 

Interest expense

 

14,267

 

 

 

12,726

 

 

 

58,097

 

 

 

53,786

 

Write-off of debt discount and deferred financing fees

 

 

 

 

4,606

 

 

 

 

 

 

4,606

 

Interest income

 

(96

)

 

 

(29

)

 

 

(163

)

 

 

(86

)

Provision for income taxes

 

26,426

 

 

 

7,944

 

 

 

91,377

 

 

 

31,534

 

Depreciation expense

 

14,993

 

 

 

13,572

 

 

 

55,437

 

 

 

50,480

 

Amortization expense

 

17,372

 

 

 

14,649

 

 

 

63,795

 

 

 

57,645

 

EBITDA

$

149,458

 

 

$

87,214

 

 

$

541,985

 

 

$

303,525

 

Stock appreciation expense(a)

 

1,277

 

 

 

621

 

 

 

4,403

 

 

 

3,173

 

Redeemable noncontrolling interests(b)

 

898

 

 

 

226

 

 

 

1,983

 

 

 

1,288

 

Equity-based compensation(c)

 

2,718

 

 

 

1,708

 

 

 

10,968

 

 

 

8,442

 

Severance and other permitted costs(d)

 

463

 

 

 

322

 

 

 

1,132

 

 

 

2,948

 

Transaction costs (acquisitions and other)(e)

 

(344

)

 

 

279

 

 

 

3,545

 

 

 

1,068

 

Gain on disposal of assets(f)

 

(439

)

 

 

(482

)

 

 

(913

)

 

 

(1,011

)

Effects of fair value adjustments to inventory(g)

 

217

 

 

 

788

 

 

 

3,818

 

 

 

788

 

Gain on legal settlement

 

 

 

 

 

 

 

 

 

 

(1,382

)

Debt transaction costs(h)

 

 

 

 

532

 

 

 

 

 

 

532

 

EBITDA addbacks

 

4,790

 

 

 

3,994

 

 

 

24,936

 

 

 

15,846

 

Adjusted EBITDA

$

154,248

 

 

$

91,208

 

 

$

566,921

 

 

$

319,371

 

 

 

 

 

 

 

 

Net sales

$

1,288,653

 

 

$

932,203

 

 

$

4,634,875

 

 

$

3,298,823

 

Adjusted EBITDA Margin

 

12.0

%

 

 

9.8

%

 

 

12.2

%

 

 

9.7

%

___________________________________

(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.

(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 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,

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Cash provided by operating activities

$

199,498

 

 

$

84,808

 

 

$

179,611

 

 

$

153,304

 

Purchases of property and equipment

 

(7,921

)

 

 

(12,016

)

 

 

(41,082

)

 

 

(29,873

)

Free cash flow (a)

$

191,577

 

 

$

72,792

 

 

$

138,529

 

 

$

123,431

 

________________________________________

(a) Free cash flow is a non-GAAP financial measure that we define as net cash provided by (used in) 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,

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Selling, general and administrative expense

$

264,473

 

 

$

207,321

 

 

$

950,125

 

 

$

763,629

 

 

 

 

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 

Stock appreciation expense(a)

 

(1,277

)

 

 

(621

)

 

 

(4,403

)

 

 

(3,173

)

Redeemable noncontrolling interests(b)

 

(898

)

 

 

(226

)

 

 

(1,983

)

 

 

(1,288

)

Equity-based compensation(c)

 

(2,718

)

 

 

(1,708

)

 

 

(10,968

)

 

 

(8,442

)

Severance and other permitted costs(d)

 

(476

)

 

 

(275

)

 

 

(1,216

)

 

 

(2,864

)

Transaction costs (acquisitions and other)(e)

 

344

 

 

 

(279

)

 

 

(3,545

)

 

 

(1,068

)

Gain on disposal of assets(f)

 

439

 

 

 

482

 

 

 

913

 

 

 

1,011

 

Debt transaction costs(g)

 

 

 

 

(532

)

 

 

 

 

 

(532

)

Adjusted SG&A

$

259,887

 

 

$

204,162

 

 

$

928,923

 

 

$

747,273

 

 

 

 

 

 

 

 

 

Net sales

$

1,288,653

 

 

$

932,203

 

 

$

4,634,875

 

 

$

3,298,823

 

Adjusted SG&A margin

 

20.2

%

 

 

21.9

%

 

 

20.0

%

 

 

22.7

%

___________________________________

(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.

(g)

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

GMS Inc.

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

(in thousands, except per share data)

 

Three Months Ended

 

Year Ended

April 30,

 

April 30,

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

 

 

 

 

 

 

 

Income before taxes

$

102,922

 

 

$

41,690

 

 

$

364,819

 

 

$

137,094

 

EBITDA add-backs

 

4,790

 

 

 

3,994

 

 

 

24,936

 

 

 

15,846

 

Write-off of debt discount and deferred financing fees

 

 

 

 

4,606

 

 

 

 

 

 

4,606

 

Acquisition accounting depreciation and amortization (1)

 

13,226

 

 

 

10,257

 

 

 

45,779

 

 

 

40,311

 

Adjusted pre-tax income

 

120,938

 

 

 

60,547

 

 

 

435,534

 

 

 

197,857

 

Adjusted income tax expense

 

29,630

 

 

 

13,623

 

 

 

106,706

 

 

 

44,518

 

Adjusted net income

$

91,308

 

 

$

46,924

 

 

$

328,828

 

 

$

153,339

 

Effective tax rate (2)

 

24.5

%

 

 

22.5

%

 

 

24.5

%

 

 

22.5

%

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

Basic

 

42,977

 

 

 

42,994

 

 

 

43,075

 

 

 

42,765

 

Diluted

 

43,776

 

 

 

43,828

 

 

 

43,898

 

 

 

43,343

 

Adjusted net income per share:

 

 

 

 

 

 

 

Basic

$

2.12

 

 

$

1.09

 

 

$

7.63

 

 

$

3.59

 

Diluted

$

2.09

 

 

$

1.07

 

 

$

7.49

 

 

$

3.54

 

________________________________________

(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 amortization of intangible assets from the acquisitions of Titan, Westside Building Material and Ames Taping Tools.

(2)

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

 

Contacts

Investors:
Carey Phelps
ir@gms.com
770-723-3369

Contacts

Investors:
Carey Phelps
ir@gms.com
770-723-3369