Net sales exceeded $1 billion for the second consecutive quarter for specialty building products distributor Gypsum Management & Supply (GMS). Sales increased 41.5% on a year-over-year (YOY) basis in the company’s fiscal second quarter to $1.15 billion, driven by inflationary pricing, healthy residential end markets, strong complementary product performance, and the acquisitions of D.L. Building Materials and Westside Building Material. Organic net sales increased 31.2% YOY for GMS in the three-month period ended October 31, 2021.
Wallboard sales increased 25.4% on a YOY basis to $414.5 million in the fiscal second quarter, ceiling sales increased 25.6% YOY to $140.9 million, steel framing sales increased 144.4% YOY to $272.0 million, and complementary product sales increased 24.8% YOY to $323.2 million.
“I am pleased to report another very strong quarter for GMS,” John Turner, president and CEO of GMS said in a prepared statement as part of the company’s earnings report. “Net sales again topped a billion dollars with record levels of net income and adjusted EBITDA.”
Turner said supply chain dynamics contributed to record high levels of product inflation, which have been the principal driver of GMS’s sales growth and incremental profitability.
GMS reported net income increased 161.2% on a YOY basis to $74.4 million in the fiscal second quarter of 2022. The distributor’s gross profit increased 40.3% compared to the second quarter of fiscal 2021 to $371.9 million. GMS reported a gross margin decrease of 30 basis points to 32.3% during the quarter. The company attributed the gross margin decline due to continued price-cost dynamics related to the timing of the implementation of price actions in the wallboard category.
The company reported an adjusted EBITDA of $149.5 million, an 81.2% increase on a YOY basis. Adjusted EBITDA margin improved 280 basis points to 13.0% from 10.2% in the previous fiscal second quarter.
“While commercial activity remains well below pre-COVID levels, we were pleased to see certain commercial projects that were previously on hold receive approvals to move forward,” Turner said. “With other positive signs also emerging, we believe that we are very well positioned as we head into the next calendar year to benefit from an eventual commercial construction recovery.”
During the second quarter of the company’s fiscal 2022, GMS acquired the EIFS division of DK&B Construction Specialties and opened a greenfield location in Johnson City, Tenn.
Tucker, Ga.-based GMS operates a network of more than 280 distribution centers across the United States and Canada, offering wallboard, suspended ceiling systems, and complementary construction products.
