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GMS Reports First Quarter Fiscal 2021 Results

09/03/2020

Strong Execution Results in Higher Profit Margins Despite Top-Line Challenges Related to COVID-19

TUCKER, Ga.--(BUSINESS WIRE)-- GMS Inc. (NYSE:GMS), a leading North American specialty distributor of interior building products, today reported financial results for the first quarter of fiscal 2021 ended July 31, 2020.

First Quarter Fiscal 2021 Highlights
(Comparisons are to the first quarter of fiscal 2020, except where noted.)

  • Net sales of $802.6 million decreased 5.3%; organic net sales decreased 5.7%.
  • Gross margin of 32.5% improved 20 basis points.
  • Net income of $27.2 million, or $0.63 per diluted share, increased 9.7%.
  • Adjusted net income of $40.3 million, or $0.94 per diluted share, increased 7.5%.
  • Adjusted EBITDA margin of 10.3% improved 40 basis points.
  • Net debt leverage was 3.0 times as of the end of the first quarter of fiscal 2021 compared to 2.9 times as of the end of the fourth quarter of fiscal 2020 and 3.7 times as of the end of the first quarter of fiscal 2020.
  • As of July 31, 2020, the Company had cash on hand of $139.7 million, and $372.5 million of available liquidity under its revolving credit facilities.

“Our first quarter results reflect outstanding execution by our entire team against the backdrop of a business environment that remained challenging throughout the period,” said John C. Turner, Jr., President and Chief Executive Officer. “Despite lower sales resulting from the impact of the COVID-19 pandemic on our business and overall industry, we generated higher net income and Adjusted net income compared to the first quarter of last fiscal year, as well as year-over-year expansion of both gross margin and Adjusted EBITDA margin. This improvement is a result of the rapid alignment of our cost structure to current demand, our balanced product and market mix, which has been strengthened through execution of our growth initiatives, and a relentless focus on serving our customers with operational excellence. At the same time, the health and safety of our employees, business partners and communities remains our top priority, and all of us at GMS continue to express our gratitude to all those who have been and continue to be on the frontlines every day during these unprecedented times.”

Mr. Turner continued, “While there is continued uncertainty regarding the near-term outlook for the construction industry and the broader economy, I am confident in our team’s ability to continue to quickly and nimbly address challenges and leverage opportunities. We firmly believe the foundation we have built at GMS, coupled with our strong liquidity and ability to generate cash, positions us well for the duration of this period and for the long term.”

First Quarter Fiscal 2021 Results

Net sales for the first quarter of fiscal 2021 were $802.6 million, down 5.3%, compared to $847.2 million for the first quarter of the prior fiscal year, as a result of continued COVID-19 related market declines. Organic net sales declined 5.7%.

  • Wallboard sales of $328.0 million decreased 4.0% (4.1% on an organic basis) compared to the first quarter of fiscal 2020, principally due to a decline in both price and mix and, to a lesser extent, lower volumes.
  • Ceilings sales of $113.7 million decreased 11.9% (12.5% on an organic basis) year over year driven by lower volumes and product mix, partially offset by higher pricing.
  • Steel framing sales of $110.5 million decreased 16.2% (16.4% on an organic basis) year over year due primarily to a decline in volumes and pricing, partially offset by higher product mix.
  • Other product sales of $250.4 million increased 2.3% (1.5% on an organic basis) year over year due to positive contributions from acquisitions and execution of growth initiatives.

Year over year sales declines were more pronounced in ceilings and steel framing, as these product categories are tied primarily to commercial construction which remained relatively more challenged than the residential market during the quarter.

Gross profit of $260.5 million decreased 4.8% compared to the first quarter of fiscal 2020 primarily due to lower sales. Gross margin of 32.5% improved 20 basis points year over year as a result of favorable product mix and purchasing initiatives.

Selling, general and administrative (“SG&A”) expense as a percentage of net sales was 22.8% for the quarter compared to 23.0% in the first quarter of fiscal 2020. Adjusted SG&A expense as a percentage of net sales was 22.2% compared to 22.6% in the prior year quarter. This 40 basis point improvement directly resulted from the proactive measures taken to defer or limit non-essential operating and other discretionary expenses and to align the Company’s cost structure with the current demand environment resulting from the COVID-19 pandemic. These benefits were partially offset primarily by deflationary market pricing of certain of the Company’s products.

Net income of $27.2 million, or $0.63 per diluted share, increased 9.7% from $24.8 million, or $0.59 per diluted share, in the first quarter of the prior fiscal year. Adjusted net income of $40.3 million, or $0.94 per diluted share, increased 7.5% from $37.5 million, or $0.89 per diluted share, in the first quarter of the prior fiscal year. Adjusted EBITDA of $83.1 million compared to $83.6 million in the first quarter of the prior fiscal year. Adjusted EBITDA margin of 10.3% improved 40 basis points from 9.9% a year ago.

Balance Sheet and Liquidity

As of July 31, 2020, the Company had cash on hand of $139.7 million and total debt of $1.0 billion. Net debt leverage was 3.0 times as of the end of the quarter compared to 2.9 times as of the end of the fourth quarter of fiscal 2020 and 3.7 times as of the end of the first quarter of fiscal 2020.

As is typical during the Company’s first quarter of the fiscal year, the Company recorded a use of cash from operating activities and free cash flow, which totaled $15.7 million and $20.5 million, respectively, in the first quarter. This compared to a use of cash from operating activities and free cash flow of $12.4 million and $18.3 million, respectively, in the first quarter of the prior fiscal year.

Conference Call and Webcast

GMS will host a conference call and webcast to discuss its results for the first quarter of fiscal 2021 ended July 31, 2020 and other information related to its business at 8:30 a.m. Eastern Time on Thursday, September 3, 2020. 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 October 3, 2020 and can be accessed at 844-512-2921 (domestic) or 412-317-6671 (international) and entering the pass code 13708456.

About GMS Inc.

Founded in 1971, GMS operates a network of 260 distribution centers across the United States and Canada. GMS’s extensive product offering of wallboard, suspended ceilings systems, or ceilings, and complementary construction products is designed to provide a comprehensive one-stop-shop for our core customer, the interior contractor who installs these products in commercial and residential buildings.

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 under its senior secured asset based revolving credit facility and its senior secured first lien term loan facility.

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,” “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 and the economy generally, actions taken to optimize our operations and align our business consistent with demand, our ability to continue successfully navigating the evolving operating environment, strategic initiatives and growth potential across the Company’s business, our efforts in response to COVID-19, and the ability to deliver growth, value creation and long-term success contained in this press release may be considered forward-looking statements. 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 public health 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 September 3, 2020. 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 September 3, 2020.

GMS Inc.

Condensed Consolidated Statements of Operations (Unaudited)

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

July 31,

 

 

 

2020

 

 

2019

 

Net sales

 

$

802,573

 

 

$

847,176

 

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

 

 

542,115

 

 

 

573,522

 

Gross profit

 

 

260,458

 

 

 

273,654

 

Operating expenses:

 

 

 

 

 

 

Selling, general and administrative

 

 

183,112

 

 

 

194,631

 

Depreciation and amortization

 

 

27,097

 

 

 

29,275

 

Total operating expenses

 

 

210,209

 

 

 

223,906

 

Operating income

 

 

50,249

 

 

 

49,748

 

Other (expense) income:

 

 

 

 

 

 

Interest expense

 

 

(14,081

)

 

 

(18,277

)

Other income, net

 

 

655

 

 

 

939

 

Total other expense, net

 

 

(13,426

)

 

 

(17,338

)

Income before taxes

 

 

36,823

 

 

 

32,410

 

Provision for income taxes

 

 

9,604

 

 

 

7,590

 

Net income

 

$

27,219

 

 

$

24,820

 

Weighted average common shares outstanding:

 

 

 

 

 

 

Basic

 

 

42,624

 

 

 

41,001

 

Diluted

 

 

43,017

 

 

 

41,615

 

Net income per common share(1):

 

 

 

 

 

 

Basic

 

$

0.64

 

 

$

0.60

 

Diluted

 

$

0.63

 

 

$

0.59

 

(1) The following table sets forth the computation of basic and diluted earnings per share of common stock for periods presented:

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

July 31,

 

 

2020

 

2019

 

 

(in thousands, except per share data)

Net income

 

$

27,219

 

$

24,820

Less: Net income allocated to participating securities

 

 

 

 

319

Net income attributable to common stockholders

 

$

27,219

 

$

24,501

Basic earnings per common share:

 

 

 

 

 

 

Basic weighted average common shares outstanding

 

 

42,624

 

 

41,001

Basic earnings per common share

 

$

0.64

 

$

0.60

Diluted earnings per common share:

 

 

 

 

 

 

Basic weighted average common shares outstanding

 

 

42,624

 

 

41,001

Add: Common Stock Equivalents

 

 

393

 

 

614

Diluted weighted average common shares outstanding

 

 

43,017

 

 

41,615

Diluted earnings per common share

 

$

0.63

 

$

0.59

GMS Inc.

Condensed Consolidated Balance Sheets (Unaudited)

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

July 31,

 

April 30,

 

 

2020

 

 

2020

 

Assets

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

139,709

 

 

$

210,909

 

Trade accounts and notes receivable, net of allowances of $5,289 and $5,141, respectively

 

 

430,931

 

 

 

405,254

 

Inventories, net

 

 

287,266

 

 

 

299,815

 

Prepaid expenses and other current assets

 

 

20,957

 

 

 

14,972

 

Total current assets

 

 

878,863

 

 

 

930,950

 

Property and equipment, net of accumulated depreciation of $167,414 and $158,554, respectively

 

 

299,661

 

 

 

305,467

 

Operating lease right-of-use assets

 

 

112,764

 

 

 

115,257

 

Goodwill

 

 

557,247

 

 

 

553,073

 

Intangible assets, net

 

 

354,542

 

 

 

361,884

 

Deferred income taxes

 

 

11,056

 

 

 

8,904

 

Other assets

 

 

11,697

 

 

 

13,247

 

Total assets

 

$

2,225,830

 

 

$

2,288,782

 

Liabilities and Stockholders’ Equity

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

180,558

 

 

$

213,230

 

Accrued compensation and employee benefits

 

 

31,655

 

 

 

67,590

 

Other accrued expenses and current liabilities

 

 

73,648

 

 

 

63,812

 

Current portion of long-term debt

 

 

49,133

 

 

 

50,201

 

Current portion of operating lease liabilities

 

 

32,781

 

 

 

33,040

 

Total current liabilities

 

 

367,775

 

 

 

427,873

 

Non-current liabilities:

 

 

 

 

 

 

Long-term debt, less current portion

 

 

995,390

 

 

 

1,047,279

 

Long-term operating lease liabilities

 

 

87,607

 

 

 

89,605

 

Deferred income taxes, net

 

 

9,373

 

 

 

12,018

 

Other liabilities

 

 

83,814

 

 

 

78,026

 

Total liabilities

 

 

1,543,959

 

 

 

1,654,801

 

Commitments and contingencies

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

Common stock, par value $0.01 per share, 500,000 shares authorized; 42,673 and 42,554 shares issued and outstanding as of July 31, 2020 and April 30, 2020, respectively

 

 

427

 

 

 

426

 

Preferred stock, par value $0.01 per share, 50,000 shares authorized; 0 shares issued and outstanding as of July 31, 2020 and April 30, 2020

 

 

 

 

 

 

Additional paid-in capital

 

 

533,092

 

 

 

529,662

 

Retained earnings

 

 

196,194

 

 

 

168,975

 

Accumulated other comprehensive loss

 

 

(47,842

)

 

 

(65,082

)

Total stockholders' equity

 

 

681,871

 

 

 

633,981

 

Total liabilities and stockholders' equity

 

$

2,225,830

 

 

$

2,288,782

 

GMS Inc.

Condensed Consolidated Statements of Cash Flows (Unaudited)

(in thousands)

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

July 31,

 

 

2020

 

 

2019

 

Cash flows from operating activities:

 

 

 

 

 

 

Net income

 

$

27,219

 

 

$

24,820

 

Adjustments to reconcile net income to net cash used in operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

27,097

 

 

 

29,275

 

Amortization of debt discount and debt issuance costs

 

 

753

 

 

 

835

 

Provision for losses on accounts and notes receivable

 

 

138

 

 

 

657

 

Provision for obsolescence of inventory

 

 

109

 

 

 

119

 

Effects of fair value adjustments to inventory

 

 

 

 

 

151

 

Increase in fair value of contingent consideration

 

 

 

 

 

228

 

Equity-based compensation

 

 

2,619

 

 

 

2,071

 

Loss (gain) on disposal and impairment of assets

 

 

394

 

 

 

(156

)

Deferred income taxes

 

 

(5,241

)

 

 

(1,440

)

Changes in assets and liabilities net of effects of acquisitions:

 

 

 

 

 

 

Trade accounts and notes receivable

 

 

(23,013

)

 

 

(23,230

)

Inventories

 

 

14,008

 

 

 

18

 

Prepaid expenses and other assets

 

 

(3,782

)

 

 

(1,359

)

Accounts payable

 

 

(33,887

)

 

 

(9,526

)

Accrued compensation and employee benefits

 

 

(36,062

)

 

 

(26,347

)

Other accrued expenses and liabilities

 

 

13,937

 

 

 

(8,556

)

Cash used in operating activities

 

 

(15,711

)

 

 

(12,440

)

Cash flows from investing activities:

 

 

 

 

 

 

Purchases of property and equipment

 

 

(4,745

)

 

 

(5,891

)

Proceeds from sale of assets

 

 

342

 

 

 

232

 

Acquisition of businesses, net of cash acquired

 

 

(210

)

 

 

(10,633

)

Cash used in investing activities

 

 

(4,613

)

 

 

(16,292

)

Cash flows from financing activities:

 

 

 

 

 

 

Repayments on revolving credit facilities

 

 

(58,083

)

 

 

(262,107

)

Borrowings from revolving credit facilities

 

 

14,421

 

 

 

274,810

 

Payments of principal on long-term debt

 

 

(2,492

)

 

 

(2,492

)

Payments of principal on finance lease obligations

 

 

(7,521

)

 

 

(6,021

)

Proceeds from exercises of stock options

 

 

691

 

 

 

133

 

Payments for taxes related to net share settlement of equity awards

 

 

(105

)

 

 

 

Other financing activities

 

 

1,270

 

 

 

1,022

 

Cash (used in) provided by financing activities

 

 

(51,819

)

 

 

5,345

 

Effect of exchange rates on cash and cash equivalents

 

 

943

 

 

 

172

 

Decrease in cash and cash equivalents

 

 

(71,200

)

 

 

(23,215

)

Cash and cash equivalents, beginning of period

 

 

210,909

 

 

 

47,338

 

Cash and cash equivalents, end of period

 

$

139,709

 

 

$

24,123

 

Supplemental cash flow disclosures:

 

 

 

 

 

 

Cash paid for income taxes

 

$

3,478

 

 

$

18,776

 

Cash paid for interest

 

 

13,115

 

 

 

17,011

 

GMS Inc.

Net Sales by Product Group (Unaudited)

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

July 31,

 

% of

 

 

 

July 31,

 

% of

 

 

 

2020

 

Total

 

 

 

2019

 

Total

 

 

 

Wallboard

 

$

327,997

 

40.9

%

 

$

341,595

 

40.3

%

Ceilings

 

 

113,702

 

14.2

%

 

 

129,110

 

15.2

%

Steel framing

 

 

110,487

 

13.8

%

 

 

131,829

 

15.6

%

Other products

 

 

250,387

 

31.2

%

 

 

244,642

 

28.9

%

Total net sales

 

$

802,573

 

 

 

 

$

847,176

 

 

 

GMS Inc.

Reconciliation of Net Income to Adjusted EBITDA (Unaudited)

(in thousands)

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

July 31,

 

 

 

 

2020

 

 

2019

 

 

 

 

 

 

 

 

 

 

Net income

 

$

27,219

 

 

$

24,820

 

 

Interest expense

 

 

14,081

 

 

 

18,277

 

 

Interest income

 

 

(37

)

 

 

(12

)

 

Provision for income taxes

 

 

9,604

 

 

 

7,590

 

 

Depreciation expense

 

 

12,827

 

 

 

12,422

 

 

Amortization expense

 

 

14,270

 

 

 

16,853

 

 

EBITDA

 

$

77,964

 

 

$

79,950

 

 

Stock appreciation expense(a)

 

 

792

 

 

 

60

 

 

Redeemable noncontrolling interests(b)

 

 

252

 

 

 

662

 

 

Equity-based compensation(c)

 

 

1,605

 

 

 

1,395

 

 

Severance and other permitted costs(d)

 

 

1,947

 

 

 

554

 

 

Transaction costs (acquisitions and other)(e)

 

 

100

 

 

 

972

 

 

Loss (gain) on disposal and impairment of assets(f)

 

 

394

 

 

 

(156

)

 

Effects of fair value adjustments to inventory(g)

 

 

 

 

 

151

 

 

EBITDA add-backs

 

 

5,090

 

 

 

3,638

 

 

Adjusted EBITDA

 

$

83,054

 

 

$

83,588

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

802,573

 

 

$

847,176

 

 

Adjusted EBITDA margin

 

 

10.3

%

 

9.9

%

_____________

(a)

Represents non-cash expense related to stock appreciation rights agreements.

(b)

Represents non-cash compensation expense related to changes in the 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 calculations under the ABL Facility and the Term Loan Facility, including certain unusual, nonrecurring costs due to COVID-19.

(e)

Represents costs related to acquisitions paid to third parties.

(f)

Includes impairment of assets resulting from restructuring plans to close certain facilities and 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.

GMS Inc.

Reconciliation of Cash Used In Operating Activities to Free Cash Flow (Unaudited)

(in thousands)

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

July 31,

 

 

 

 

2020

 

 

2019

 

 

 

 

 

 

 

 

 

 

Cash used in operating activities

 

$

(15,711

)

 

$

(12,440

)

 

Purchases of property and equipment

 

 

(4,745

)

 

 

(5,891

)

 

Free cash flow(a)

 

$

(20,456

)

 

$

(18,331

)

 

_____________

(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

 

 

 

July 31,

 

 

 

 

2020

 

 

2019

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expense

 

$

183,112

 

 

$

194,631

 

 

 

 

 

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 

Stock appreciation expense(a)

 

 

(792

)

 

 

(60

)

 

Redeemable noncontrolling interests(b)

 

 

(252

)

 

 

(662

)

 

Equity-based compensation(c)

 

 

(1,605

)

 

 

(1,395

)

 

Severance and other permitted costs(d)

 

 

(1,881

)

 

 

(554

)

 

Transaction costs (acquisitions and other)(e)

 

 

(100

)

 

 

(972

)

 

(Loss) gain on disposal and impairment of assets(f)

 

 

(394

)

 

 

156

 

 

Adjusted SG&A

 

$

178,088

 

 

$

191,144

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

802,573

 

 

$

847,176

 

 

Adjusted SG&A margin

 

 

22.2

%

 

22.6

%

_____________

(a)

Represents non-cash expense related to stock appreciation rights agreements.

(b)

Represents non-cash compensation expense related to changes in the 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 calculations under the ABL Facility and the Term Loan Facility, including certain unusual, nonrecurring costs due to COVID-19.

(e)

Represents costs related to acquisitions paid to third parties.

(f)

Includes impairment of assets resulting from restructuring plans to close certain facilities and gains from the sale of assets.

GMS Inc.

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

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

July 31,

 

 

 

2020

 

 

2019

 

Income before taxes

 

$

36,823

 

 

$

32,410

 

EBITDA add-backs

 

 

5,090

 

 

 

3,638

 

Purchase accounting depreciation and amortization (1)

 

 

10,135

 

 

 

12,385

 

Adjusted pre-tax income

 

 

52,048

 

 

 

48,433

 

Adjusted income tax expense

 

 

11,711

 

 

 

10,897

 

Adjusted net income

 

$

40,337

 

 

$

37,536

 

Effective tax rate (2)

 

 

22.5

%

 

 

22.5

%

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

Basic

 

 

42,624

 

 

 

41,001

 

Diluted (3)

 

 

43,017

 

 

 

42,148

 

Adjusted net income per share:

 

 

 

 

 

 

 

 

Basic

 

$

0.95

 

 

$

0.92

 

Diluted

 

$

0.94

 

 

$

0.89

 

_____________

(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 the acquisition of Titan.

(2)

Normalized cash tax rate determined based on our estimated taxes excluding the impact of purchase accounting and certain other deferred tax amounts.

(3)

Diluted shares outstanding for periods prior to June 13, 2019 have been adjusted to include the effect of 1.1 million shares of equity issued in connection with the acquisition of Titan that were exchangeable for the Company’s common stock. On June 13, 2019, the holders exchanged all of the exchangeable shares for 1.1 million shares of the Company’s common stock.

 

Investors:
Leslie H. Kratcoski
ir@gms.com
770-723-3306

Source: GMS Inc.

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