Pricing resilience for wallboard, ceilings, and complementary products helped drive “solid” financial results in the fiscal first quarter of 2024 for Gypsum Management & Supply (GMS). Net sales for the company increased 3.7% year-over-year to $1.4 billion while net income decreased 3.0% to $86.8 million.

“Multifamily and commercial construction demand remained strong during the quarter, which helped to offset declines in steel pricing and tempered single-family demand as we felt the impacts of the lower level of housing starts recorded earlier this year and in the latter half of calendar 2022,” John Turner, president and CEO of GMS, said in a prepared statement.

GMS attributed the increase in net sales to contributions from recent acquisitions, resilient pricing for wallboard, ceiling tiles, and complementary products, and strong multifamily and commercial demand. Wallboard sales increased 9.6% year-over-year to $571.4 million, ceiling sales increased 4.7% year-over-year to $175.2 million, steel framing sales decreased 13.9% to $236.8 million, and complementary product sales increased 7.7% to $426.2 million.

“Despite our realizing the expected near-term year-over-year declines for single-family construction activity amid 20-year highs in interest rates, we are seeing favorable demand conditions develop as we look forward,” Turner said. “While steel framing pricing and soft office demand remain headwinds, we are seeing sequentially improving U.S. single-family permits and starts, still solid multifamily activity, and put-in-place construction spending growth in most commercial applications. Given our scale, wide range of product offerings, and expertise in providing outstanding service to each of our end markets, we believe we are well positioned for future growth and to deliver value to our shareholders.”

Gross profit in the quarter for GMS increased 3.6% to $450.6 million, largely due to incremental gross profit from acquisitions, the continued pass through of product inflation in wallboard, ceilings, and complementary products, and growth in commercial and multifamily sales volume. Gross margin was unchanged year-over-year at 32.0%. Adjusted EBITDA decreased 1.0% to $173.3 million and adjusted EBITDA margin fell 60 basis points to 12.3%.

During the quarter, GMS expanded its platform through the acquisition of Home Lumber and Building Supplies in the Vancouver Island market and the opening of a new AMES store location in San Antonio.

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