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GMS Inc. (GMS - Free Report) recently acquired Tanner Bolt and Nut, Inc. and opened a ceilings-focused greenfield location in New York City or NYC. With the ongoing execution of its platform expansion strategy, the recent moves mark its first entry into the NYC market.
John C. Turner, Jr., president and CEO of GMS, said, “We are pleased to take this first step into such a significant market. With Tanner’s focus on tools and fasteners, these additions, along with the establishment of several new greenfield yard locations and AMES stores over the last several months represent our continued commitment to the execution of our strategic priorities of platform expansion and Complementary Product growth.”
In addition, GMS provided details on other recent openings of greenfield yards and AMES store locations.
Bolt-on Buyout
On Dec 30, 2022, GMS acquired a Brooklyn, NY-based leading distributor of fasteners, tools, safety and related construction products. Building on more than 40 years of legacy in the NYC market, Tanner will partner with the legacy GMS operations of Capitol Building Supply, Inc. — a leader in specialty building products distribution in the Northeast — to serve customers across the region. Moreover, Tanner’s four metro area locations will boost GMS’s inaugural positioning with complementary product offerings. Tanner will continue to work as its namesake brand within GMS.
Expansion Via Greenfield Locations
In the past few months, GMS opened three new greenfield locations, which expand its presence, provide enhanced service and broaden the product offerings in the respective markets. Since the start of fiscal 2023, GMS has added six new greenfield locations.
The NYC market facility is focused on the growth of the acoustical ceilings business, expanding upon its existing USG relationship in other Northeast markets. The North Carolina location within its Colonial Materials, Inc. operations provides services to the Greenville market. The Chester, VA, greenfield location will enhance coverage of the Richmond market within the Commonwealth Building Materials platform.
AMES Expansion Strategy
With the ongoing growth and expansion strategy of the Ames Taping Tools Holding LLC platform since its acquisition in December 2021, GMS added three new AMES store locations in Fresno, CA, Palm Bay, FL and Concord, NC. So far in fiscal 2023, GMS added nine AMES store locations.
The company is well positioned to continue to advance its strategic priorities, backed by a solid liquidity position. As of the fiscal second quarter end, it had $124.2 million in cash on hand and $293.8 million of available liquidity under its revolving credit facilities. Long-term debt (less current portion) of $1.17 billion, will not weigh on the company before September 2024.
Additionally, cash provided by operating activities and free cash flow were $107.3 million and $96.5 million for the fiscal second quarter versus $2 million and $11.3 million a year ago, respectively. This reflects significantly improved levels of cash flow for the quarter.
With a substantial liquidity position, including $124 million in cash on hand as of the end of our most recently ended quarter, the near-term expectation of strong free cash flow generation and the company’s newly expanded ABL Credit Agreement with increased capacity and an extended maturity, GMS remains well-positioned to continue to advance its strategic priorities.
Stock Performance
Shares of GMS have gained 2.41% on Jan 3 post-news release and 13.4% in the past three months. The industry and S&P 500 composite rallied 6.3% and 0.3%, respectively, in the said period.
Image Source: Zacks Investment Research
The company’s solid price performance is mainly driven by a significant backlog of homes under construction, continued strength in multi-family and improving levels of commercial activity. Also, favorable pricing across the product categories, positive volume growth in Wallboard, Ceilings and Complementary Products and the benefit received from AMES acquisition added to the positives.
GMS banks on four core strategic initiatives, namely, expanding scale in the core products; building complementary product offerings; accretive acquisitions and greenfield opportunities and improving productivity and profitability.
Its market-leading position, significant scale, a balanced mix of commercial and residential customers and a wide range of product offerings bode well.
Tecnoglass currently sports a Zacks Rank #1. Shares of the company have gained 17.2% in the past year.
The Zacks Consensus Estimate for TGLS’ 2023 sales and earnings per share (EPS) suggests growth of 11.2% and 9%, respectively, from the year-ago period’s reported levels.
Wingstop currently sports a Zacks Rank #1. WING has a long-term earnings growth rate of 12%. Shares of WING have lost 20.1% in the past year.
The Zacks Consensus Estimate for Wingstop’s 2023 sales and EPS suggests growth of 18.4% and 16.1%, respectively, from the year-ago period’s reported levels.
Yum China currently carries a Zacks Rank #2 (Buy). YUMC has a long-term earnings growth rate of 11%. Shares of YUMC have gained 10.3% in the past year.
The Zacks Consensus Estimate for Yum China’s 2023 sales and EPS suggests growth of 14.2% and 56.7%, respectively, from the year-ago period’s reported levels.
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GMS Buys Tanner & Opens Greenfield Locations, Gives AMES Update
GMS Inc. (GMS - Free Report) recently acquired Tanner Bolt and Nut, Inc. and opened a ceilings-focused greenfield location in New York City or NYC. With the ongoing execution of its platform expansion strategy, the recent moves mark its first entry into the NYC market.
John C. Turner, Jr., president and CEO of GMS, said, “We are pleased to take this first step into such a significant market. With Tanner’s focus on tools and fasteners, these additions, along with the establishment of several new greenfield yard locations and AMES stores over the last several months represent our continued commitment to the execution of our strategic priorities of platform expansion and Complementary Product growth.”
In addition, GMS provided details on other recent openings of greenfield yards and AMES store locations.
Bolt-on Buyout
On Dec 30, 2022, GMS acquired a Brooklyn, NY-based leading distributor of fasteners, tools, safety and related construction products. Building on more than 40 years of legacy in the NYC market, Tanner will partner with the legacy GMS operations of Capitol Building Supply, Inc. — a leader in specialty building products distribution in the Northeast — to serve customers across the region. Moreover, Tanner’s four metro area locations will boost GMS’s inaugural positioning with complementary product offerings. Tanner will continue to work as its namesake brand within GMS.
Expansion Via Greenfield Locations
In the past few months, GMS opened three new greenfield locations, which expand its presence, provide enhanced service and broaden the product offerings in the respective markets. Since the start of fiscal 2023, GMS has added six new greenfield locations.
The NYC market facility is focused on the growth of the acoustical ceilings business, expanding upon its existing USG relationship in other Northeast markets. The North Carolina location within its Colonial Materials, Inc. operations provides services to the Greenville market. The Chester, VA, greenfield location will enhance coverage of the Richmond market within the Commonwealth Building Materials platform.
AMES Expansion Strategy
With the ongoing growth and expansion strategy of the Ames Taping Tools Holding LLC platform since its acquisition in December 2021, GMS added three new AMES store locations in Fresno, CA, Palm Bay, FL and Concord, NC. So far in fiscal 2023, GMS added nine AMES store locations.
The company is well positioned to continue to advance its strategic priorities, backed by a solid liquidity position. As of the fiscal second quarter end, it had $124.2 million in cash on hand and $293.8 million of available liquidity under its revolving credit facilities. Long-term debt (less current portion) of $1.17 billion, will not weigh on the company before September 2024.
Additionally, cash provided by operating activities and free cash flow were $107.3 million and $96.5 million for the fiscal second quarter versus $2 million and $11.3 million a year ago, respectively. This reflects significantly improved levels of cash flow for the quarter.
With a substantial liquidity position, including $124 million in cash on hand as of the end of our most recently ended quarter, the near-term expectation of strong free cash flow generation and the company’s newly expanded ABL Credit Agreement with increased capacity and an extended maturity, GMS remains well-positioned to continue to advance its strategic priorities.
Stock Performance
Shares of GMS have gained 2.41% on Jan 3 post-news release and 13.4% in the past three months. The industry and S&P 500 composite rallied 6.3% and 0.3%, respectively, in the said period.
Image Source: Zacks Investment Research
The company’s solid price performance is mainly driven by a significant backlog of homes under construction, continued strength in multi-family and improving levels of commercial activity. Also, favorable pricing across the product categories, positive volume growth in Wallboard, Ceilings and Complementary Products and the benefit received from AMES acquisition added to the positives.
GMS banks on four core strategic initiatives, namely, expanding scale in the core products; building complementary product offerings; accretive acquisitions and greenfield opportunities and improving productivity and profitability.
Its market-leading position, significant scale, a balanced mix of commercial and residential customers and a wide range of product offerings bode well.
Zacks Rank & Key Picks
Currently, GMS carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the Zacks Retail-Wholesale sector are Tecnoglass Inc. (TGLS - Free Report) , Wingstop Inc. (WING - Free Report) and Yum China Holdings, Inc. (YUMC - Free Report) .
Tecnoglass currently sports a Zacks Rank #1. Shares of the company have gained 17.2% in the past year.
The Zacks Consensus Estimate for TGLS’ 2023 sales and earnings per share (EPS) suggests growth of 11.2% and 9%, respectively, from the year-ago period’s reported levels.
Wingstop currently sports a Zacks Rank #1. WING has a long-term earnings growth rate of 12%. Shares of WING have lost 20.1% in the past year.
The Zacks Consensus Estimate for Wingstop’s 2023 sales and EPS suggests growth of 18.4% and 16.1%, respectively, from the year-ago period’s reported levels.
Yum China currently carries a Zacks Rank #2 (Buy). YUMC has a long-term earnings growth rate of 11%. Shares of YUMC have gained 10.3% in the past year.
The Zacks Consensus Estimate for Yum China’s 2023 sales and EPS suggests growth of 14.2% and 56.7%, respectively, from the year-ago period’s reported levels.