GMS Inc. (GMS - Free Report) reported impressive results for first-quarter fiscal 2022, wherein earnings and revenues topped the Zacks Consensus Estimate. Also, the metrics increased on a year-over-year basis. Following the results, shares of the company rose 5.7% during trading hours on Sep 2.
President and CEO of GMS, John C. Turner, Jr, said, " As we look ahead to the remainder of fiscal 2022 and beyond, we expect to continue both greenfields and acquisitions to enter underserved markets and boost our product offerings. I am confident that our focus on our strategic priorities and our team’s continued drive to execute will position us to generate value for our shareholders well into the future."
Quarter in Detail
GMS reported adjusted earnings of $1.67 per share, which topped the consensus mark of $1.30 by 28.5% and grew 77.7% from the year-ago 94 cents.
Meanwhile, net sales of $1,042.1 million surpassed the consensus mark of $962 million by 8.3% and grew 29.8% year over year. The upside was mainly driven by robust residential market, an inflationary environment and strong demand for the company’s complementary products. Organic net sales expanded 23.2% from the prior-year quarter.
Segment Discussion
Wallboard sales increased 18.9% from a year ago to $390.1 million. This upside was driven by contribution from acquisitions and strong residential volume growth. Sales were up 14% year over year organically.
Ceilings sales increased 20.4% year over year to $138.1 million for the quarter, primarily owing to increased volumes and benefits from acquisitions. Organically, this segment’s sales rose 16.7% from the year-ago quarter.
Steel framing sales of $196.3 million increased 77.6% from the prior year. This improvement was driven by the rise in volume along with benefits from acquisitions. Organically, the segment’s sales rose 68.7% from the year-ago figure.
Furthermore, Complementary product sales grew 27.4% from the prior-year period to $317.6 million, courtesy of contributions from acquisitions, continued strength in Canadian business and strong pricing in certain product categories. Organically, sales grew 18.1% from the year-ago period.
Operating Highlights
Gross margin contracted 30 basis points (bps) to 32.2% for the quarter, primarily owing to price-cost dynamics related to the timing of the implementation of price actions.
Adjusted selling, general and administrative expenses — as a percentage of net sales — improved 200 bps to 20.2% for the quarter. This was mainly owing to the significant rise of product price which outpaced the spike in operating costs.
Adjusted EBITDA margin of 12.3% improved 200 bps from a year ago.
Financials
At fiscal first quarter-end, the company had cash on hand of $43.6 million, down from $167 million at fiscal 2021-end. Long-term debt (less current portion) amounted to $1016 million at fiscal first quarter-end, up from $932.4 million at fiscal 2021-end.
Zacks Rank
GMS — which shares space with Fastenal Company (FAST - Free Report) , Beacon Roofing Supply Inc. (BECN - Free Report) and Builders FirstSource, Inc. (BLDR - 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.
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GMS Inc. (GMS - Free Report) reported impressive results for first-quarter fiscal 2022, wherein earnings and revenues topped the Zacks Consensus Estimate. Also, the metrics increased on a year-over-year basis. Following the results, shares of the company rose 5.7% during trading hours on Sep 2.
President and CEO of GMS, John C. Turner, Jr, said, " As we look ahead to the remainder of fiscal 2022 and beyond, we expect to continue both greenfields and acquisitions to enter underserved markets and boost our product offerings. I am confident that our focus on our strategic priorities and our team’s continued drive to execute will position us to generate value for our shareholders well into the future."
Quarter in Detail
GMS reported adjusted earnings of $1.67 per share, which topped the consensus mark of $1.30 by 28.5% and grew 77.7% from the year-ago 94 cents.
Meanwhile, net sales of $1,042.1 million surpassed the consensus mark of $962 million by 8.3% and grew 29.8% year over year. The upside was mainly driven by robust residential market, an inflationary environment and strong demand for the company’s complementary products. Organic net sales expanded 23.2% from the prior-year quarter.
Segment Discussion
Wallboard sales increased 18.9% from a year ago to $390.1 million. This upside was driven by contribution from acquisitions and strong residential volume growth. Sales were up 14% year over year organically.
Ceilings sales increased 20.4% year over year to $138.1 million for the quarter, primarily owing to increased volumes and benefits from acquisitions. Organically, this segment’s sales rose 16.7% from the year-ago quarter.
Steel framing sales of $196.3 million increased 77.6% from the prior year. This improvement was driven by the rise in volume along with benefits from acquisitions. Organically, the segment’s sales rose 68.7% from the year-ago figure.
Furthermore, Complementary product sales grew 27.4% from the prior-year period to $317.6 million, courtesy of contributions from acquisitions, continued strength in Canadian business and strong pricing in certain product categories. Organically, sales grew 18.1% from the year-ago period.
Operating Highlights
Gross margin contracted 30 basis points (bps) to 32.2% for the quarter, primarily owing to price-cost dynamics related to the timing of the implementation of price actions.
Adjusted selling, general and administrative expenses — as a percentage of net sales — improved 200 bps to 20.2% for the quarter. This was mainly owing to the significant rise of product price which outpaced the spike in operating costs.
Adjusted EBITDA margin of 12.3% improved 200 bps from a year ago.
Financials
At fiscal first quarter-end, the company had cash on hand of $43.6 million, down from $167 million at fiscal 2021-end. Long-term debt (less current portion) amounted to $1016 million at fiscal first quarter-end, up from $932.4 million at fiscal 2021-end.
Zacks Rank
GMS — which shares space with Fastenal Company (FAST - Free Report) , Beacon Roofing Supply Inc. (BECN - Free Report) and Builders FirstSource, Inc. (BLDR - 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.
Zacks Naming Top 10 Stocks for 2024
Want to be tipped off early to our 10 top picks for the entirety of 2024?
History suggests their performance could be sensational.
From 2012 (when our Director of Research, Sheraz Mian assumed responsibility for the portfolio) through November, 2023, the Zacks Top 10 Stocks gained +974.1%, nearly TRIPLING the S&P 500’s +340.1%. Now Sheraz is combing through 4,400 companies to handpick the best 10 tickers to buy and hold in 2024. Don’t miss your chance to get in on these stocks when they’re released on January 2.
Be First to New Top 10 Stocks >>
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