Specialty building products distributor Gypsum Management & Supply (GMS) reported sales increased 24.4% year-over-year to $1.43 billion in the company’s fiscal second quarter. Net income for GMS increased by 38.7% compared to the second quarter of the previous year to $103.2 million, according to the company’s quarterly earnings report.
“A significant backlog of homes under construction, continued strength in multifamily, and improving levels of commercial activity helped drive exceptional results for our fiscal second quarter,” John Turner, president and CEO of GMS, said in a prepared statement. “As a result, with favorable pricing across our product categories, positive volume growth in wallboard, ceilings, and complementary products, and the benefit of our AMES acquisition, our team achieved another quarter of record levels of net sales, net income, and adjusted EBITDA and generated significant levels of cash flow.”
GMS said the year-over-year sales increase was primarily due to a favorable pricing environment along with active residential construction and an improving commercial landscape. Wallboard sales increased 41.0% year-over-year in the fourth quarter, ceiling sales increased 13.3%, steel framing sales increased 2.3%, and complementary product sales increased 26.5% during the quarter.
Gross profit for GMS increased 24.9% year-over-year to $464.5 million in the fiscal second quarter, primarily due to the successful pass through of product inflation, continued strength in residential market demand, improving commercial sales, and incremental gross profit from acquisitions. The company’s gross margin increased 20 basis points to 32.5%.
Adjusted EBITDA for GMS increased 30.7% to $195.5 million in the fiscal second quarter. Adjusted EBITDA margin improved 70 basis points to 13.7% in the quarter.
“With significant scale, a balanced mix of commercial and residential customers and a wide breadth of product offerings, we are confident in our ability to adjust as needed to meet demand in all of our end markets and believe we are well-positioned ahead of the developing slowdown in residential single-family construction,” Turner said. “We remain focused on the execution of our strategic priorities to expand share in our core products, grow complementary product offerings, expand our platform, and leverage our scale to achieve improved productivity and profitability through the use of technology and shared best practices.”
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.