Gypsum Management & Supply (GMS) reported strong growth in both net sales and net income in the fourth quarter of its fiscal year, according to the fourth quarter earnings report from the company. The Tucker, Ga.-based and ceiling systems distributor saw net sales rise to $780.1 million in the fourth quarter, a 22.7% increase year over year (YOY) compared to the fourth quarter of the previous fiscal year.
Organic net sales increased 7.0% YOY in the fourth quarter for GMS, which the distributor attributes to higher volumes and pricing improvement across all product groups. Wallboard sales increased 15.1% YOY in the fourth quarter, driven by acquisitions, higher organic volumes, and pricing. Ceiling sales increased 17.4% YOY, steel framing sales grew 16.3% YOY, and other product sales grew 44.8% YOY in the fourth quarter for GMS.
For the full fiscal year, GMS’ net sales rose to $3.12 billion, a 24.1% increase from the previous fiscal year. Organic sales increased 7.1% compared to the previous fiscal year.
GMS also reported its net income increased significantly in the fourth quarter compared to the fourth quarter in the prior fiscal year. Reported net income rose to $16.6 million from $9.9 million in the fourth quarter of the prior fiscal year. Reported net income for the full fiscal year, however, decreased 12.5% to $56.0 million.
Adjusted EBITDA—earnings before interest, taxes, depreciation, and amortization—jumped to $73.5 million in the fourth quarter compared to $50.1 million in the prior fiscal year’s fourth quarter. Adjusted EBITDA for the full fiscal year rose to $295.7 million, or 9.5% of net sales, compared to an adjusted EBITDA of $199.3 million, or 7.9% of net sales, in the prior fiscal year.
Gross profit for the distributor increased 24.8% YOY in the fourth quarter to $256.9 million. GMS attributed the rise in gross profit to higher sales, both organically and from acquisitions, as well as pricing improvement. Gross margin in the fourth quarter improved 50 basis points YOY to 32.9%, largely due to the contributions from its acquisition of Canadian company WSB Titan in 2018.
“We were pleased to deliver a strong finish to fiscal 2019 with record net sales and earnings for our fourth fiscal quarter,” CEO Mike Callahan said in a public statement. “Activity levels across our end markets in the United States remain solid and continue to exhibit healthy fundamentals. While long-term factors contributing to housing demand and overall economic growth for Canada remain positive, we currently face some challenging conditions in the Canadian single-family housing market.”
GMS completed three business acquisitions and eight greenfield openings during the 2019 fiscal year, including the acquisition of Commercial Builders Group and greenfield openings in Carrollton, Texas, Fredericksburg, Va., Harrisburg, Pa., and Portland, Maine, in the fourth quarter. GMS repurchased $5.0 million of common stock during the fourth quarter and $16.5 million during the full fiscal year.
The company’s balance sheet as of April 30 showed goodwill accounted $617.3 million of its $2.1 billion in assets. On the liabilities side, the distributor’s long-term debt is $1.1 billion.
GMS operates more than 250 distribution centers across the U.S. and Canada and ranked 8th on the 2019 ProSales 100.
