GMS Inc., the wallboard and ceilings systems dealer better known as Gypsum Management and Supply, reported today its net income for the fiscal third quarter ended Jan. 31 swung to an $8.2 million profit from a year-earlier net loss of $2.2 million, in part because sales jumped 33.8% to $562.5 million.
Mike Callahan, president and CEO of the Tucker, Ga.-based firm, credited the gains to stronger residential and commercial business and taking market share from competitors. Those factors “allowed us to generate double-digit organic revenue growth in each product group,” he said in the company’s earnings announcement.
There’s another growth factor to consider as well: GMS has been one of the most active companies in the mergers and acquisitions markets lately. Since last spring, it has taken over eight firms with annual sales totaling nearly $216 million, and the company is actively looking to buy more businesses.
Gross profit rose 38.4% to $185.7 million. That’s a gross margin of 33%, up 1.1 percentage point from a year earlier. GMS credited that to “pricing discipline, improved purchasing opportunities and product mix.”
Wallboard sales rose 29.5% in dollar terms to $255 million and 30.5% in volume terms to 842 million square feet. Ceiling systems sales totaled $81.8 million, a 25.1% increase, while sales of steel framing shot up 41.8% to $93.5 million.
GMS prefers to measure itself in terms of adjusted EBITDA: earnings before interest, taxes, depreciation, amortization and other factors that aren’t part of the normal course of business. By that metric, adjusted EBITDA rose 58.4% to $40.7 million. That works out to 7.2% of net sales, up from 6.1% for the quarter ended in January 2016.
GMS operates more than 200 facilities nationwide, all under local brand names.
