Specialty building products distributor Gypsum Management & Supply (GMS) reported net sales exceeded $1 billion for the third consecutive fiscal quarter. Sales increased 53.6% on a year-over-year (YOY) basis in the distributor’s fiscal third quarter to $1.2 billion. Organic net sales increased 41.5% YOY in the quarter, according to the company’s quarterly earnings report.
GMS attributed the strong growth in net sales during the quarter to inflationary pricing, healthy residential end markets, strong performance from the company’s complementary products, and the acquisitions of D.L. Building Materials, Westside Building Material, and AMES. YOY wallboard sales increased 33.4% to $415.1 million in the quarter, ceiling sales increased 34.9% on a YOY basis to $139.9 million, steel framing sales increased 172.0% compared to the previous third quarter to $282.8 million, and complementary product sales increased 35.9% to $315.8 million in the fiscal third quarter.
“Carrying our momentum into the new calendar year, we achieved record-setting results with higher levels of sales, net income, and adjusted EBITDA than we have ever recorded for our fiscal third quarter,” president and CEO John Turner said in a prepared statement. “Leveraging our significant scale advantages to deliver outstanding customer service in a solid residential market, coupled with an inflationary pricing environment and successful platform expansion activities, helped us more than triple our net income and double our adjusted EBITDA as compared to the prior year.”
GMS reported a gross profit of $367.8 million in the fiscal third quarter, a 51.1% increase compared to the third quarter from the previous fiscal year. The company attributed the growth to the successful pass through of product inflation, continued strength in residential market demand, and incremental gross profit from acquisitions. The distributor’s gross margin declined 50 basis points on a YOY basis to 31.9%, due to the timing and elasticity of inflationary price-cost dynamics in the market, according to GMS.
The distributor's net income in the quarter increased to $61.4 million from $16.1 million in the prior-year period. Adjusted EBITDA for GMS increased $72.5 million on a YOY basis to $135.1 million. The company’s adjusted EBITDA margin improved 340 basis points on a YOY basis to 11.7%.
“The team remains fully focused on the continued execution of our strategic priorities,” Turner said. “Looking ahead to close out our fiscal year in April, similar market dynamics as we experienced in the third quarter along with indications of improving levels of commercial activity, serve as a positive backdrop as we are confident we will continue to deliver exceptional levels of service to provide value to customers and to drive strong results for our stakeholders.”
Tucker, Ga.-based GMS operates a network of more than 280 distribution centers across the United States and Canada, offering wallboard, suspended ceiling systems, and complementary construction products.