Net sales contracted slightly while net income increased significantly for Gypsum Management & Supply (GMS) in its third quarter fiscal 2021, a three month period that ended on January 31. GMS attributed the decrease in net sales to “continued COVID-19 related market declines” according to the company’s quarterly earnings report.
For GMS, its third quarter net sales were $751.2 million, down less than 1.5% on a year-over-year (YOY) basis from the $761.4 million it reported in the fiscal third quarter for 2020. Wallboard sales decreased 1.0%, including 1.4% on an organic basis, during the third quarter, largely due to a modest decline in price and mix, according to GMS. Ceiling sales decreased 9.6% YOY and other product sales increased 8.7% YOY. GMS said YOY sales declines are more pronounced in ceilings and steel framing, as these product categories are primarily tied to the commercial construction sector, which remained challenged through the quarter. There was also one less day in the third quarter of fiscal 2021 for GMS compared to the same period a year ago.
The distributor reported gross profit decreased 4.0% YOY to $243.3 million. The company’s gross margin of 32.4% remained largely consistent with the prior year period, declining 90 basis points due to unfavorable mix and price-cost dynamics for certain product categories, according to GMS.
Net income for GMS increased from $10.9 million in the prior year period to $16.1 million in the third quarter of fiscal 2021. Adjusted EBITDA was $62.6 million compared to $62.7 million in the prior year period and GMS’ adjusted EBITDA margin improved 10 basis points to 8.3% during the third quarter.
“As a result of our team’s ability to seize opportunities and address challenges in dynamic market conditions, we delivered better than expected sales, higher net income, and an improved adjusted EBITDA margin in the third quarter,” John Turner, president and CEO of GMS, said in a news release. “We continued to realize benefits from our ongoing commitment to our strategic priorities of 1) expanding share in core products, 2) growing our complementary other products offering, 3) platform expansion, and 4) improved productivity and profitability.”
During the fiscal third quarter, GMS opened a new greenfield location in Waco, Texas. The company also completed its acquisition of D.L. Building Materials, providing the distributor entrance into the Ottawa-Gatineau market in Canada and established four new locations, expanding its footprint into Atlantic City, N.J., and Memphis, Tenn.
Tucker, Ga.-based GMS operates a network of more than 260 distribution centers across the United States and Canada, offering wallboard, suspended ceiling systems, and complementary construction products.
