Earnings Review and Free Research Report: GMS’ Net Sales Jumped 16.8%; EPS Soared 67.5%

Research Desk Line-up: Apogee Enterprises Post Earnings Coverage

LONDON, UK / ACCESSWIRE / September 29, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on GMS Inc. (NYSE: GMS), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=GMS, following the Company’s posting of its first quarter fiscal 2018 financial results on September 06, 2017. The leading North American distributor of wallboard and suspended ceilings systems achieved double-digit sales gains for the 25th consecutive quarter. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member’s account at:

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Get more of our free earnings reports coverage from other constituents of the General Building Materials industry. Pro-TD has currently selected Apogee Enterprises, Inc. (NASDAQ: APOG) for due-diligence and potential coverage as the Company announced on September 19, 2017, its financial results for Q2 FY18. Register for a free membership today, and be among the early birds that get access to our report on Apogee Enterprises when we publish it.

At Pro-TD, we make it our mission to bring you news that matter about the stock you follow. Today, our research desk covers a blog story on GMS; also brushing on APOG. With the links below you can directly download the report of your stock of interest free of charge at:

http://protraderdaily.com/optin/?symbol=GMS

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Earnings Reviewed

GMS’ net sales for the first quarter of fiscal 2018 ended July 31, 2017, were $642.2 million, up 16.8% compared to net sales of $549.8 million for the first quarter of fiscal 2017 ended July 31, 2016. The Company’s reported quarter sales benefited from price gains in each product category, stronger end market demand, particularly in commercial and the contribution of successful acquisitions. GMS’ revenue lagged behind analysts’ estimates of $645.19 million.

During Q1 FY18, GMS’ base business’ net sales increased 7.8% on the strength of higher end-market demand, cross-selling initiatives, and new branch openings. The Company noted that acquisitions completed over the past 2 years contributed the remaining half of net sales growth during the reported quarter.

For Q1 FY18, GMS’ gross profit of $205.1 million grew 14.8% compared to $178.6 million in Q1 FY17, primarily attributable to higher pricing and increased sales. The Company’s gross margin was 31.9% for the reported quarter, compared to 32.5% in the prior year’s same quarter, largely due to higher cost material purchases in wallboard, along with product mix.

GMS’ net income was $15.34 million, or $0.36 per diluted share, compared to earnings of $9.16 million, or $0.24 per diluted share, in Q1 FY17. The Company’s adjusted net income totaled $19.7 million, or $0.47 per diluted share, in the reported quarter, compared to $17.8 million, or $0.46 per diluted share, in the prior year’s corresponding quarter. GMS’ earnings met Wall Street’s estimates of $0.47 per share.

During Q1 FY18, GMS’ adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) of $52.8 million rose 14.8% compared to $45.9 million in Q1 FY17. As a percentage of net sales, the Company’s adjusted EBITDA margin was 8.2% compared to 8.4% in the year-earlier quarter, reflecting a lower gross margin which outweighed an improvement in selling, general, and administrative (SG&A) expense as a percent of net sales.

GMS’ Segment Results

During Q1 FY18, Wallboard’s sales jumped 13.3% to $284.7 million on a y-o-y basis driven by wallboard’s unit volume growth of 11.8% to 914 million square feet and price gains. The Company’s Wallboard volumes benefitted from steady end-market demand and positive contribution from acquisitions.

For Q1 FY18, Ceilings’ sales rose 15.5% to $99.7 million on a y-o-y basis, mainly due to greater commercial activity, price gains, and the positive impact of acquisitions. The Company’s steel framing sales of $104.7 million grew 24.1% compared to the year-ago same period due to strong commercial activity, price gains as a result of higher industry steel prices, and acquisitions.

For Q1 FY18, Other Product’s sales advanced 19.8% to $153.1 million as a result of strategic initiatives, price gains, and acquisitions.

Capital Resources

At July 31, 2017, GMS had cash of $19.7 million and total debt of $602.9 million compared to cash of $14.6 million and total debt of $594.9 million at April 30, 2017. In the reported quarter, the Company expanded the borrowing base by another $100 million to $578 million and used the additional net proceeds to pay down $94 million on the ABL facility. GMS also extended the maturity by 2 years to 2023 and reduced the interest rate by 50 basis points.

During Q1 FY18, GMS’ operating cash flow improved $36.5 million to $5.9 million, which was largely influenced by improved working capital turns and lower cash taxes. At July 31, 2017, the Company’s net debt to LTM pro-forma adjusted EBITDA stood at 2.9x, consistent with 2.9x at April 30 and down from 3.4x y-o-y.

Outlook

For FY18, GMS is forecasting its base business to continue to grow approximately 2% faster than the market through organic share gains and the addition of 3 to 5 Greenfields per year. The Company expects FY18 capital investments to be in the band of $12 million to $14 million.

Stock Performance

On Thursday, September 28, 2017, the stock closed the trading session at $35.41, rising 1.87% from its previous closing price of $34.76. A total volume of 416.46 thousand shares have exchanged hands. GMS Inc.’s stock price skyrocketed 13.75% in the last one month, 25.43% in the past three months, and 55.72% in the previous twelve months. Furthermore, since the start of the year, shares of the Company have surged 20.94%. The stock is trading at a PE ratio of 26.89 and currently has a market cap of $1.44 billion.

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