Specialty building products distributor Gypsum Management & Supply (GMS) reported net sales increased 30.5% on a year-over-year (YOY) basis in the company’s first fiscal quarter of 2023. Net income in the fiscal quarter increased 46.2% on a YOY basis to $89.5 million.

“Continuing the solid momentum from fiscal 2022, we again achieved record levels of quarterly net sales, net income, and adjusted EBITDA for our fiscal first quarter of 2023,” John Turner, president and CEO of GMS, said in a prepared statement. “Volumes were up in wallboard, ceilings, and complementary products, including our first quarterly year-over-year increase in commercial wallboard volumes since before the pandemic.”

GMS attributed the growth in net sales to inflationary pricing, active residential construction, volume growth in wallboard, ceilings, and complementary products, an improving commercial landscape, and the company’s acquisition of AMES Taping Tools.

Wallboard sales increased 33.7% on a YOY basis in the fiscal first quarter to $521.6 million, ceiling sales increased 21.2% YOY to $167.3 million, steel framing sales increased 40.1% YOY to $274.9 million, and complementary product sales increased 24.6% YOY to $395.8 million.

The distributor’s gross profit increased 29.4% to $434.7 million compared to the first quarter of fiscal 2022, primarily due to the successful pass through of product inflation, continued strength in the residential market demand, an improving commercial landscape, and incremental gross profit from acquisitions. The company’s gross margin declined 20 basis points YOY to 32.0%, primarily due to the timing and elasticity of inflationary price-cost dynamics in the market.

GMS reported an adjusted EBITDA of $175.0 million, a 36.6% increase compared to the first quarter of fiscal 2022. The company’s adjusted EBITDA margin improved 60 basis points to 12.9% in the quarter.

“While builders are reporting an affordability-driven moderation in single-family housing demand, construction activity in this sector remained robust during the first quarter and into our second quarter as the industry works through a sizable backlog of homes started but not yet complete,” Turner said. While single-family home building will likely soften, the degree, timing, and duration is yet to be determined, However, commercial construction is improving and multifamily construction remains strong.”

During the first quarter of fiscal 2023, GMS acquired Construction Supply of Southwest Florida, a distributor of various stucco, building, and waterproofing supplies. GMS said the acquisition further expands its complementary offerings and establishes an inaugural stucco-focused location in the state of Florida. Additionally, the company opened two greenfield yards in Wildwood, Fla., and Cleveland as well as six new AMES stores.

GMS operates a network of nearly 300 distribution centers with product offerings of wallboard, ceilings, steel framing, and complementary construction products. The company also operates nearly 100 tool sales, rental, and service centers across the United States.