Sales increased on a year-over-year basis while net income fell relative to last year in the third fiscal quarter of 2024, ended Jan. 31, at Gypsum Management & Supply (GMS).
“Continued solid demand in our multifamily and commercial end markets, coupled with an improving single-family backdrop and revenues from our recently acquired businesses, helped our team deliver higher year-over-year net sales along with net income and adjusted EBITDA that exceeded our previously communicated expectations,” John Turner, president and CEO of GMS, said. “While steel price deflation tempered our sales dollar growth as expected, sales volumes increased as compared with a year ago for each of our four major product categories, including wallboard, ceilings, steel framing, and complementary products.”
Net sales for the third quarter of fiscal 2024 increased 1.9% year-over-year to $1.3 billion. Despite weather-related project delays in January, which pushed an estimated $15 million of net sales into the next quarter, continued solid demand in commercial and multifamily construction drove solid results, according to GMS.
Wallboard sales increased 4.0% to $520.7 million in the third quarter, ceilings sales increased 6.1% to $155.7 million, steel framing sales decreased 13.3% to $203.4 million, and complementary product sales increased 7.3% to $378.6 million.
“We remain focused on the continued execution of our strategic priorities and, as such, we were excited to announce during the quarter our agreement to purchase Kamco Supply Corporation, a leading specialty building products distributor in the New York City market,” Turner said. “We expect this transaction to close in the coming days. With a solid pipeline of additional M&A opportunities, we expect to continue our disciplined approach to capital allocation, balancing investing in our strategic initiatives while opportunistically leveraging favorable market conditions for share repurchases.”
Gross profit increased $12.5 million year-over-year to $414.7 million in the third quarter, reflecting improved volumes and the associated attainment of calendar year-end volume incentive targets. Gross margin was 33.0%, up 40 basis points as compared to 32.6% a year ago.
Net income slid year-over-year to $51.9 million from $64.8 million in the prior-year period. Adjusted EBITDA decreased 9.1% year-over-year to $128.0 million while adjusted EBITDA margin fell to 10.2% from 11.4% in the third quarter of fiscal 2023.
“Looking ahead, with a wide breadth of product offerings, significant scale across the U.S. and Canada and the expertise to flex our operations as demand dynamics fluctuate, we feel well-positioned to deliver a strong close to our fiscal year,” Turner said. “We expect our multifamily backlog to continue to support year-over-year growth and commercial activity to remain solid in most of our verticals for our fiscal fourth quarter. Single-family is also expected to show year-over-year growth for the fourth quarter as lower interest rates have resulted in a higher activity levels.”
