Net sales, net income, adjusted EBITDA, and gross profit decreased on a year-over-year (YOY) basis in the second quarter of the fiscal 2021 year at Gypsum Management & Supply (GMS). Net sales for the distributor decreased 5.7% YOY to $812.9 million, as a result of continued coronavirus (COVID-19)-related market declines. Organic sales during the fiscal second quarter decreased 6.4%, according to GMS’s quarterly earning report.
Wallboard sales decreased 5.7% YOY to $330.5 million during the second quarter, largely due to a decline in mix, volume, and price, according to GMS. Ceiling sales decreased 9.4% YOY due to lower volume and steel framing sales decreased 18.3% YOY due to a decline in both volumes, price/mix. The YOY declines were more pronounced in ceilings and steel framing as both categories are tied primarily to commercial construction, which has been more significantly impacted by the pandemic than residential construction. Other product sales for GMS increased 2.9% YOY due to positive contributions from acquisitions and executions of strategic growth initiatives. GMS noted there was one less selling day in the 2021 fiscal second quarter compared to the same period in the 2020 fiscal year.
“Outstanding execution by our entire team enabled us to generate solid second quarter results, with net sales levels exceeding our earlier expectations,” John Turner, president and CEO of GMS, said in a prepared statement. “The overall operating environment remained challenged throughout the period, particularly with respect to commercial construction, although we realized benefits from the strong residential market.”
GMS posted a gross profit during the second quarter of $265.1 million, a 6.8% decrease compared to the fiscal 2020 second quarter. The distributor attributed the lower gross profit to lower sales. The company’s gross margin of 32.6% declined 40 basis points compared to the prior year period, primarily due to challenging mix dynamics, particularly in the commercial segment.
The company reported net income decreased $0.6 million on a YOY basis to $28.5 million in the fiscal second quarter. Adjusted EBITDA for the distributor decreased from $89.9 million in the second quarter of 2020 to $82.5 million in the second quarter of 2021. GMS posted an adjusted EBITDA margin of 10.2% compared to 10.4% from the year-prior period.
During the fiscal 2021 second quarter, GMS completed a greenfield opening in Hillsboro, Ore.
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. GMS ranked 8th on the 2020 ProSales 100 list.
