GMS Clocks 41% Sales Growth In Q2, Beats Estimates

GMS Inc GMS reported second-quarter FY22 net sales growth of 41.5% year-over-year to $1.15 billion, +31.2% on an organic basis, beating the consensus of $1.06 billion. Adjusted EPS increased to $2 from $0.93 in 2Q21, beating the consensus of $1.60.

• Sales by product groups: Wallboard $414.52 million (+25.4% Y/Y), Ceilings $140.88 million (+25.6% Y/Y), Steel framing $272 million (+144.4% Y/Y) and Complementary products $323.16 million (+24.8% Y/Y).
• The gross margin contracted by 30 bps to 32.3%.
• GMS' cash used in operating activities year-to-date was $77.05 million, compared to cash provided $24.05 million a year ago. Free cash outflow of $93.21 million.
• The operating income increased by 126.3% Y/Y to $111.94 million, and the margin expanded by 364 bps to 9.7%.
• Adjusted EBITDA increased by 81.2% Y/Y to $149.54 million, and margin expanded by 280 bps to 13%.
• Net debt leverage was 2.4 times as of the end of the quarter, down from 3.0 times a year ago.
• SG&A and Adjusted SG&A as a percentage of sales were 20% and 19.4%, representing 320 bps and 310 bps of improvement, respectively.
• The company had cash on hand of $59.3 million, total debt of $1.1 billion, and $302.2 million of available liquidity under its revolving credit facilities as of October 31, 2021.
• Price Action: GMS shares closed higher by 0.91 % at $56.38 on Wednesday.