GMS Inc. (GMS - Free Report) reported mixed results for first-quarter fiscal 2021 (ended Jul 31, 2020), wherein earnings topped the Zacks Consensus Estimate but revenues missed the same. Earnings also increased on a year-over-year basis, courtesy of strong execution despite top-line challenges due to the COVID-19 outbreak. Shares of this North American specialty distributor of interior building products dropped more than 10% on Sep 3, following the earnings release.
Quarter in Detail
GMS reported adjusted earnings of 94 cents per share, which topped the consensus mark of 83 cents by 13.3% and grew 7.5% from the year-ago figure of 89 cents. Meanwhile, net sales of $802.6 million missed the consensus mark of $823 million by 2.5% and fell 5.3% year over year. The downside was mainly due to persistent COVID-19-related market declines. Organic net sales dropped 5.7% from the prior-year quarter.
Despite low revenues, aggressive cost-cutting actions — including defer/reduction in non-essential operating or other discretionary expenses — aided the bottom line.
Segment Discussion
Wallboard sales were down 4% from a year ago to $328 million for the quarter due to lower price and mix, as well as reduced volumes, to a lesser extent. Sales were down 4.1% year over year organically. Ceilings sales decreased 11.9% year over year to $113.7 million for the quarter, given lower volumes and product mix, partially offset by higher pricing. Organically, this segment’s sales were down 12.5% from the year-ago quarter. Steel framing sales of $110.5 million were down 16.2% from the prior-year figure due to lower volumes and pricing. Organically, the segment sales dropped 16.4% from the year-ago figure. Nonetheless, Other product sales grew 2.3% from the prior-year period to $250.4 million, courtesy of contributions from acquisitions and execution of growth initiatives. Organically, sales grew 1.5% from the year-ago period.
Operating Highlights
Gross margin expanded 20 basis points (bps) to 32.5% for the quarter, given favorable product mix and purchasing initiatives. Adjusted selling, general and administrative expenses — as a percentage of net sales — improved 40 bps to 22.2% for the quarter. The company benefited from the measures taken to defer or limit non-essential operating and other discretionary expenses. Also, prudent alignment of its cost structure with the current demand environment that is affected by the COVID-19 pandemic also added to the positives.
Adjusted EBITDA margin of 10.3% improved 40 bps from a year ago.
Financials
At fiscal first quarter-end, the company had cash on hand of $139.7 million, down from $210.9 million at fiscal 2020-end. Long-term debt (less current portion) amounted to $995.4 million at fiscal first quarter-end, down from $1,047.3 million at fiscal 2020-end.
Zacks Rank & Peer Release
GMS — which shares space with Builders Tecnoglass Inc. (TGLS - Free Report) and Lumber Liquidators Holdings, Inc. (LL - Free Report) in the Zacks Building Products – Retail industry — currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Beacon Roofing Supply, Inc. (BECN - Free Report) reported impressive third-quarter fiscal 2020 results. The top and bottom lines surpassed the Zacks Consensus Estimate, mainly backed by exceptional operating cost and cash flow performance for the quarter.
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GMS Inc. (GMS - Free Report) reported mixed results for first-quarter fiscal 2021 (ended Jul 31, 2020), wherein earnings topped the Zacks Consensus Estimate but revenues missed the same. Earnings also increased on a year-over-year basis, courtesy of strong execution despite top-line challenges due to the COVID-19 outbreak. Shares of this North American specialty distributor of interior building products dropped more than 10% on Sep 3, following the earnings release.
Quarter in Detail
GMS reported adjusted earnings of 94 cents per share, which topped the consensus mark of 83 cents by 13.3% and grew 7.5% from the year-ago figure of 89 cents. Meanwhile, net sales of $802.6 million missed the consensus mark of $823 million by 2.5% and fell 5.3% year over year. The downside was mainly due to persistent COVID-19-related market declines. Organic net sales dropped 5.7% from the prior-year quarter.
Despite low revenues, aggressive cost-cutting actions — including defer/reduction in non-essential operating or other discretionary expenses — aided the bottom line.
Segment Discussion
Wallboard sales were down 4% from a year ago to $328 million for the quarter due to lower price and mix, as well as reduced volumes, to a lesser extent. Sales were down 4.1% year over year organically. Ceilings sales decreased 11.9% year over year to $113.7 million for the quarter, given lower volumes and product mix, partially offset by higher pricing. Organically, this segment’s sales were down 12.5% from the year-ago quarter. Steel framing sales of $110.5 million were down 16.2% from the prior-year figure due to lower volumes and pricing. Organically, the segment sales dropped 16.4% from the year-ago figure. Nonetheless, Other product sales grew 2.3% from the prior-year period to $250.4 million, courtesy of contributions from acquisitions and execution of growth initiatives. Organically, sales grew 1.5% from the year-ago period.
Operating Highlights
Gross margin expanded 20 basis points (bps) to 32.5% for the quarter, given favorable product mix and purchasing initiatives. Adjusted selling, general and administrative expenses — as a percentage of net sales — improved 40 bps to 22.2% for the quarter. The company benefited from the measures taken to defer or limit non-essential operating and other discretionary expenses. Also, prudent alignment of its cost structure with the current demand environment that is affected by the COVID-19 pandemic also added to the positives.
Adjusted EBITDA margin of 10.3% improved 40 bps from a year ago.
Financials
At fiscal first quarter-end, the company had cash on hand of $139.7 million, down from $210.9 million at fiscal 2020-end. Long-term debt (less current portion) amounted to $995.4 million at fiscal first quarter-end, down from $1,047.3 million at fiscal 2020-end.
Zacks Rank & Peer Release
GMS — which shares space with Builders Tecnoglass Inc. (TGLS - Free Report) and Lumber Liquidators Holdings, Inc. (LL - Free Report) in the Zacks Building Products – Retail industry — currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Beacon Roofing Supply, Inc. (BECN - Free Report) reported impressive third-quarter fiscal 2020 results. The top and bottom lines surpassed the Zacks Consensus Estimate, mainly backed by exceptional operating cost and cash flow performance for the quarter.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.
Click here for the 6 trades >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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