Q1 2025 GMS Inc Earnings Call Transcript
Key Points
- Net sales increased by 2.8% to $1.45 billion, driven by volume growth across major product categories.
- Gross margin remained relatively stable at 31.2%, despite a challenging market environment.
- Complementary products saw a 4.1% growth, with specific categories like insulation, tools and fasteners, and EIFS/stucco growing by 9% year-over-year.
- Recent acquisitions, including R.F. Elliott, are expected to be accretive to EBITDA margins and expand GMS Inc (GMS)'s footprint and product offerings.
- The company is implementing a $25 million annualized cost reduction program to optimize efficiency and reduce overhead.
- Organic sales declined by 2.2%, primarily due to softening demand in multi-family and commercial end markets and steel price deflation.
- Net income decreased by 34.1% to $57.2 million compared to $86.8 million a year ago.
- Adjusted EBITDA fell by 15.8% to $145.9 million, with EBITDA margin decreasing to 10.1% from 12.3% a year ago.
- High interest rates continue to create a challenging financing environment, particularly impacting commercial demand.
- Steel price deflation had a significant negative impact, contributing to a 16.8% decline in price and mix for steel framing products.
Greetings. Welcome to the GMS, Inc., first-quarter 2025 earnings conference call. (Operator Instructions) Please note this conference is being recorded.
I will now turn the conference over to Carey Phelps, Vice President of Investor Relation. Thank you. You may begin.
Thank you. Good morning and thank you for joining us for the GMS earnings conference call for the first quarter of fiscal 2025. I am joined today by John Turner, President and Chief Executive Officer; and Scott Deakin, Senior Vice President and Chief Financial Officer. In addition to the press release, we issued this morning. We have posted PowerPoint slides to accompany this call in the Investors section of our website at www.gms.com.
Starting with slide 2. On today's call management's prepared remarks and answers to your questions may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking
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