GMS Reports First Quarter Fiscal 2026 Results

Net Sales and Adjusted EBITDA Results Consistent With Expectations

TUCKER, Ga., August 28, 2025--(BUSINESS WIRE)--GMS Inc. (NYSE: GMS), a leading North American specialty building products distributor, today reported financial results for the fiscal first quarter ended July 31, 2025.

GMS Inc.

Condensed Consolidated Statements of Operations (Unaudited)

(in thousands, except per share data) ​ Three Months Ended July 31, ​ 2025 2024 Net sales $ 1,414,332 $ 1,448,456 Cost of sales (exclusive of depreciation and amortization shown separately below) 977,807 996,893 Gross profit 436,525 451,563 Operating expenses: Selling, general and administrative 314,379 315,152 Depreciation and amortization 40,919 38,032 Total operating expenses 355,298 353,184 Operating income 81,227 98,379 Other (expense) income: Interest expense (21,068 ) (22,213 ) Other income, net 906 2,028 Total other expense, net (20,162 ) (20,185 ) Income before taxes 61,065 78,194 Provision for income taxes 17,505 20,946 Net income $ 43,560 $ 57,248 Weighted average common shares outstanding: Basic 38,064 39,542 Diluted 38,629 40,226 Net income per common share: Basic $ 1.14 $ 1.45 Diluted $ 1.13 $ 1.42

GMS Inc.

Condensed Consolidated Balance Sheets (Unaudited)

(in thousands, except per share data) ​ July 31,
2025 April 30,
2025 Assets Current assets: ​ Cash and cash equivalents $ 39,931 $ 55,599 Trade accounts and notes receivable, net of allowances of $13,333 and $12,947, respectively 879,287 835,888 Inventories, net 583,801 586,191 Prepaid expenses and other current assets 36,110 42,438 Total current assets 1,539,129 1,520,116 Property and equipment, net of accumulated depreciation of $383,375 and $369,343, respectively 531,047 524,008 Operating lease right-of-use assets 328,972 325,977 Goodwill 882,502 881,334 Intangible assets, net 516,945 536,716 Deferred income taxes 26,588 24,568 Other assets 19,899 18,548 Total assets $ 3,845,082 $ 3,831,267 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 396,249 $ 431,494 Accrued compensation and employee benefits 87,461 126,442 Other accrued expenses and current liabilities 133,347 127,396 Current portion of long-term debt 57,740 57,901 Current portion of operating lease liabilities 53,717 54,325 Total current liabilities 728,514 797,558 Non-current liabilities: Long-term debt, less current portion 1,255,900 1,206,445 Long-term operating lease liabilities 288,464 279,373 Deferred income taxes, net 76,035 76,483 Other liabilities 44,347 51,228 Total liabilities 2,393,260 2,411,087 Commitments and contingencies Stockholders' equity: Common stock, par value $0.01 per share, 500,000 shares authorized; 38,068 and 38,164 shares issued and outstanding as of July 31, 2025 and April 30, 2025, respectively 381 381 Preferred stock, par value $0.01 per share, 50,000 shares authorized; 0 shares issued and outstanding as of July 31, 2025 and April 30, 2025 — — Additional paid-in capital 184,712 189,216 Retained earnings 1,316,076 1,272,516 Accumulated other comprehensive loss (49,347 ) (41,933 ) Total stockholders' equity 1,451,822 1,420,180 Total liabilities and stockholders' equity $ 3,845,082 $ 3,831,267

GMS Inc.

Condensed Consolidated Statements of Cash Flows (Unaudited)

(in thousands) Three Months Ended

July 31, ​ 2025 2024 Cash flows from operating activities: ​ Net income $ 43,560 $ 57,248 Adjustments to reconcile net income to net cash used in operating activities: ​ ​ Depreciation and amortization 40,919 38,032 Write-off and amortization of debt discount and debt issuance costs 649 448 Equity-based compensation 4,697 4,343 Loss on disposal of assets, net 4 858 Deferred income taxes (2,650 ) (1,681 ) Other items, net 1,631 2,288 Changes in assets and liabilities net of effects of acquisitions: ​ ​ Trade accounts and notes receivable (43,108 ) (36,373 ) Inventories 3,089 (20,640 ) Prepaid expenses and other assets 2,694 (3,320 ) Accounts payable (35,320 ) (10,644 ) Accrued compensation and employee benefits (39,005 ) (66,124 ) Other accrued expenses and liabilities (8,104 ) 12,626 Cash used in operating activities (30,944 ) (22,939 ) Cash flows from investing activities: Purchases of property and equipment (8,446 ) (8,976 ) Proceeds from sale of business and sale of assets 1,267 1,218 Acquisition of businesses, net of cash acquired (1,444 ) (118,461 ) Cash used in investing activities (8,623 ) (126,219 ) Cash flows from financing activities: Repayments on revolving credit facility (462,165 ) (378,641 ) Borrowings from revolving credit facility 508,253 468,864 Payments of principal on long-term debt (1,247 ) (1,247 ) Payments of principal on finance lease obligations (12,686 ) (10,839 ) Repurchases of common stock (12,852 ) (46,609 ) Proceeds from exercises of stock options 809 555 Proceeds from issuance of stock pursuant to employee stock purchase plan 3,795 3,207 Cash provided by financing activities 23,907 35,290 Effect of exchange rates on cash and cash equivalents (8 ) 892 Decrease in cash and cash equivalents (15,668 ) (112,976 ) Cash and cash equivalents, beginning of period 55,599 166,148 Cash and cash equivalents, end of period $ 39,931 $ 53,172 Supplemental cash flow disclosures: Cash paid for income taxes $ 6,448 $ 2,881 Cash paid for interest 23,646 26,730

GMS Inc.

Net Sales by Product Group (Unaudited)

(dollars in thousands) ​ Three Months Ended ​ July 31, 2025 % of Total July 31, 2024 % of Total ​ Wallboard $ 556,393 39.3 % $ 587,929 40.6 % Ceilings 220,929 15.6 % 207,156 14.3 % Steel framing 196,553 13.9 % 209,858 14.5 % Complementary products 440,457 31.1 % 443,513 30.6 % Total net sales $ 1,414,332 $ 1,448,456

GMS Inc.

Net Sales and Organic Sales by Product Group (Unaudited)

(dollars in millions) ​ Net Sales Organic Sales ​ Three Months Ended July 31, Three Months Ended July 31, ​ 2025 2024 Change 2025 2024 Change Wallboard $ 556.4 $ 587.9 (5.4 )% $ 547.7 $ 587.9 (6.8 )% Ceilings 220.9 207.2 6.6 % 219.7 207.2 6.1 % Steel framing 196.5 209.9 (6.3 )% 192.6 209.9 (8.2 )% Complementary products 440.5 443.5 (0.7 )% 417.6 443.5 (5.8 )% Total net sales $ 1,414.3 $ 1,448.5 (2.4 )% $ 1,377.6 $ 1,448.5 (4.9 )%

GMS Inc.

Per Day Net Sales and Per Day Organic Sales by Product Group (Unaudited)

(dollars in millions) ​ Per Day Net Sales Per Day Organic Sales ​ Three Months Ended July 31, Three Months Ended July 31, ​ 2025 2024 Change 2025 2024 Change Wallboard $ 8.7 $ 9.2 (5.4 )% $ 8.6 $ 9.2 (6.8 )% Ceilings 3.5 3.2 6.6 % 3.4 3.2 6.1 % Steel framing 3.1 3.3 (6.3 )% 3.0 3.3 (8.2 )% Complementary products 6.9 6.9 (0.7 )% 6.5 6.9 (5.8 )% Total net sales $ 22.2 $ 22.6 (2.4 )% $ 21.5 $ 22.6 (4.9 )%

​ Per Day Growth(a) Per Day Organic Growth(a) Three Months Ended July 31, 2025 Three Months Ended July 31, 2025 ​ Volume Price/Mix/Fx Volume Price/Mix/Fx Wallboard (5.7 )% 0.3 % (7.0 )% 0.2 % Ceilings (4.2 )% 10.8 % (5.0 )% 11.1 % Steel framing (5.4 )% (0.9 )% (8.8 )% 0.6 %

________________________________________ (a) Given the wide breadth of offerings and units of measure in Complementary Products, detailed price vs volume reporting is not available at a consolidated level.

GMS Inc.

Reconciliation of Net Income to Adjusted EBITDA (Unaudited)

(in thousands) ​ Three Months Ended ​ July 31, ​ 2025 2024 Net income $ 43,560 $ 57,248 Interest expense 21,068 22,213 Interest income (84 ) (370 ) Provision for income taxes 17,505 20,946 Depreciation expense 21,290 19,228 Amortization expense 19,629 18,804 EBITDA $ 122,968 $ 138,069 Stock appreciation expense(a) 867 243 Redeemable noncontrolling interests and deferred compensation(b) 86 422 Equity-based compensation(c) 3,744 3,678 Severance and other permitted costs(d) 1,185 956 Transaction costs (acquisitions and other)(e) 6,150 1,280 Loss on disposal of assets(f) 4 858 Effects of fair value adjustments to inventory(g) — 375 Change in fair value of contingent consideration(h) 485 — EBITDA adjustments 12,521 7,812 Adjusted EBITDA $ 135,489 $ 145,881 ​ Net sales $ 1,414,332 $ 1,448,456 Adjusted EBITDA Margin 9.6 % 10.1 %

________________________________________ (a) Represents changes in the fair value of stock appreciation rights. (b) Represents changes in the fair values of noncontrolling interests and deferred compensation agreements. (c) Represents non-cash equity-based compensation expense related to the issuance of share-based awards. (d) Represents severance expenses and certain other cost adjustments as permitted under the ABL Facility and the Term Loan Facility. (e) Represents costs related to acquisitions paid to third parties, including costs for the pending merger with The Home Depot. (f) Includes gains and losses from the sale and disposal of assets. (g) Represents the non-cash cost of sales impact of acquisition accounting adjustments to increase inventory to its estimated fair value. (h) Represents the change in fair value of contingent consideration arrangements.

GMS Inc.

Reconciliation of Cash Used In Operating Activities to Free Cash Flow (Unaudited)

(in thousands) ​ Three Months Ended ​ July 31, ​ 2025 2024 Cash used in operating activities $ (30,944 ) $ (22,939 ) Purchases of property and equipment (8,446 ) (8,976 ) Free cash flow (a) $ (39,390 ) $ (31,915 )

________________________________________ (a) Free cash flow is a non-GAAP financial measure that we define as net cash provided by (used in) operations less capital expenditures.

GMS Inc.

Reconciliation of Selling, General and Administrative Expense to Adjusted SG&A (Unaudited)

(in thousands) ​ Three Months Ended ​ July 31, ​ 2025 2024 Selling, general and administrative expense $ 314,379 $ 315,152 Adjustments Stock appreciation expense(a) (867 ) (243 ) Redeemable noncontrolling interests and deferred compensation(b) (86 ) (422 ) Equity-based compensation(c) (3,744 ) (3,678 ) Severance and other permitted costs(d) (1,185 ) (956 ) Transaction costs (acquisitions and other)(e) (6,150 ) (1,280 ) Loss on disposal of assets(f) (4 ) (858 ) Adjusted SG&A $ 302,343 $ 307,715 Net sales $ 1,414,332 $ 1,448,456 Adjusted SG&A margin 21.4 % 21.2 %

________________________________________ (a) Represents changes in the fair value of stock appreciation rights. (b) Represents changes in the fair values of noncontrolling interests and deferred compensation agreements. (c) Represents non-cash equity-based compensation expense related to the issuance of share-based awards. (d) Represents severance expenses and certain other cost adjustments as permitted under the ABL Facility and the Term Loan Facility. (e) Represents costs related to acquisitions paid to third parties, including costs for the pending merger with The Home Depot. (f) Includes gains and losses from the sale and disposal of assets.

GMS Inc.

Reconciliation of Income Before Taxes to Adjusted Net Income (Unaudited)

(in thousands, except per share data) ​ Three Months Ended ​ July 31, ​ 2025 2024 Income before taxes $ 61,065 $ 78,194 EBITDA adjustments 12,521 7,812 Amortization expense (1) 19,629 18,804 Adjusted pre-tax income 93,215 104,810 Adjusted income tax expense 25,168 27,251 Adjusted net income $ 68,047 $ 77,559 Effective tax rate (2) 27.0 % 26.0 % Weighted average shares outstanding: Basic 38,064 39,542 Diluted 38,629 40,226 Adjusted net income per share: Basic $ 1.79 $ 1.96 Diluted $ 1.76 $ 1.93

________________________________________ (1) Represents all non-cash amortization resulting from business combinations. (2) Normalized cash tax rate excluding the impact of acquisition accounting and certain other deferred tax amounts.

GMS Inc.

Reconciliation of Net Income to Pro Forma Adjusted EBITDA (Unaudited)

(in thousands) ​ Last Twelve Months Ended ​ July 31, ​ 2025 2024 Net income $ 101,781 $ 246,497 Interest expense 87,935 78,760 Write-off of debt discount and deferred financing fees — 674 Interest income (633 ) (1,650 ) Provision for income taxes 55,385 92,299 Depreciation expense 85,069 72,107 Amortization expense 81,966 67,269 EBITDA $ 411,503 $ 555,956 Impairment of goodwill 42,454 — Stock appreciation expense(a) 2,920 4,416 Redeemable noncontrolling interests and deferred compensation(b) 924 1,369 Equity-based compensation(c) 15,712 15,992 Severance and other permitted costs(d) 12,080 3,178 Transaction costs (acquisitions and other)(e) 8,790 4,751 (Gain) loss on disposal of assets(f) (6,330 ) 260 Effects of fair value adjustments to inventory(g) 110 1,706 Change in fair value of contingent consideration(h) 2,367 — Debt transaction costs(i) — 409 EBITDA adjustments 79,027 32,081 Adjusted EBITDA 490,530 588,037 Contributions from acquisitions(j) 1,111 35,211 Pro Forma Adjusted EBITDA $ 491,641 $ 623,248 Cash and cash equivalents $ 39,931 $ 53,172 Total debt 1,313,640 1,380,438 Net debt $ 1,273,709 $ 1,327,266 Net debt / Pro Forma Adjusted EBITDA 2.6x 2.1x

________________________________________ (a) Represents changes in the fair value of stock appreciation rights. (b) Represents changes in the fair values of noncontrolling interests and deferred compensation agreements. (c) Represents non-cash equity-based compensation expense related to the issuance of share-based awards. (d) Represents severance expenses and certain other cost adjustments as permitted under the ABL Facility and the Term Loan Facility. (e) Represents costs related to acquisitions paid to third parties, including costs for the pending merger with The Home Depot. (f) Includes gains and losses from the sale of assets and the sale of the Company’s Michigan-based installed insulation contracting business, net of losses and impairments. (g) Represents the non-cash cost of sales impact of acquisition accounting adjustments to increase inventory to its estimated fair value. (h) Represents the change in fair value of contingent consideration arrangements. (i) Represents costs paid to third-party advisors related to debt refinancing activities. (j) Represents the pro forma impact of earnings from acquisitions from the beginning of the last twelve month period to the date of acquisition, including synergies.

About GMS Inc.

Founded in 1971, GMS operates a network of more than 320 distribution centers with extensive product offerings of Wallboard, Ceilings, Steel Framing and Complementary Products. In addition, GMS operates nearly 100 tool sales, rental and service centers, providing a comprehensive selection of building products and solutions for its residential and commercial contractor customer base across the United States and Canada. The Company’s unique operating model combines the benefits of a national platform and strategy with a local go-to-market focus, enabling GMS to generate significant economies of scale while maintaining high levels of customer service.

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Use of Non-GAAP Financial Measures

GMS reports its financial results in accordance with GAAP. However, it presents Adjusted net income, free cash flow, Adjusted SG&A, Adjusted EBITDA, and Adjusted EBITDA margin, which are not recognized financial measures under GAAP. GMS believes that Adjusted net income, free cash flow, Adjusted SG&A, Adjusted EBITDA, and Adjusted EBITDA margin assist investors and analysts in comparing its operating performance across reporting periods on a consistent basis by excluding items that the Company does not believe are indicative of its core operating performance. The Company’s management believes Adjusted net income, Adjusted SG&A, free cash flow, Adjusted EBITDA and Adjusted EBITDA margin are helpful in highlighting trends in its operating results, while other measures can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which the Company operates and capital investments. In addition, the Company utilizes Adjusted EBITDA in certain calculations in its debt agreements.

You are encouraged to evaluate each adjustment and the reasons GMS considers it appropriate for supplemental analysis. In addition, in evaluating Adjusted net income, Adjusted SG&A and Adjusted EBITDA, you should be aware that in the future, the Company may incur expenses similar to the adjustments in the presentation of Adjusted net income, Adjusted SG&A and Adjusted EBITDA. The Company’s presentation of Adjusted net income, Adjusted SG&A, Adjusted SG&A margin, Adjusted EBITDA, and Adjusted EBITDA margin should not be construed as an inference that its future results will be unaffected by unusual or non-recurring items. In addition, Adjusted net income, free cash flow, Adjusted SG&A and Adjusted EBITDA may not be comparable to similarly titled measures used by other companies in GMS’s industry or across different industries. Please see the tables at the end of this release for a reconciliation of Adjusted EBITDA, free cash flow, Adjusted SG&A and Adjusted net income to the most directly comparable GAAP financial measures.

When calculating organic net sales growth, the Company excludes from the calculation (i) net sales of acquired businesses until the first anniversary of the acquisition date, and (ii) the impact of foreign currency translation.

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Contacts

Investors:
Carey Phelps
[email protected]
770-723-3369

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