GMS - Earnings call transcript Q3 2020

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Operator

Greetings and welcome to the GMS Inc Fiscal Third Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Ms. Investor President, Vice Kratcoski, Relations. Leslie Thank you.

begin. may You

Leslie Kratcoski

by you Thanks, for us third Deakin, of joined Chief thank and and call Michelle good morning quarter today I'm XXXX. and Financial for fiscal Turner, the Scott the President CEO; joining for and John GMS Officer. conference earnings

website release this this Investors the call we to at posted have our gms.com. addition In issued presentation the in section press morning, slides accompany of to

contain answers today's of as forward-looking call, may Management's your On Securities XXXX. Act statements, and in Reform to Private remarks the defined questions prepared Litigation

to Forward-looking beyond and statements address cause from matters that and control today. many are actual are subject which discussed to differ risks those of may results uncertainties, our

company the the obligation and statements with relating assumes any reports. including forward-looking As detailed Listeners the statements future. XX-K update contained no in periodic company's in the current a reminder, forward-looking The represent to in statements encouraged these company's forward-looking other discussions management's the more section filings to are to Risk review Factors SEC, expectations. estimates the and

on slides. non-GAAP note quarter includes provided relate ended the certain these presentation discussion XXXX. release of non-GAAP definitions the call this in quarter the third of Today's presentation fiscal and reconciliations also measures and references the are that to to measures, press of Please XXXX January XX,

one limit will over to call, interest I of the the yourself call of and time, With in we request Turner. once to the question-and-answer kindly that the JT? turn Finally, you session begin one now we John that, question follow-up.

John Turner

before and turn detail. results your our today's questions. call to Scott us joining you it remarks, our begin over Good taking our I'll financial with operating will Leslie. to of you, Thank Thank conclude prepared more I for morning. a then in then review highlights cover today.

to X. Turning Slide

strategic priorities quarter remain against to a in be backdrop our third And focused opportunities the what favorable growth we market. team's execution momentum effective in capitalize the on demonstrate and continues on results our industry. Our of to order our

driven our an including robust This X.X%, steel wallboard growth total U.S. lesser continuation volume in our the X.X%, net increased a a notably, demand of wallboard, wallboard double-digit sales by volume the Partially and environment, lines, where all including increased in of solid reflects our in markets offsetting U.S., four to across in in along was volume. challenging across net increase Canada. growth Total conditions pricing extent performance sales favorable end some almost a softness with in the X% volume. increase product

U.S., our our in focused lines. organic product increased Organic with X.X% growth reflective and the growing core driven demand other of net and products sales in our organic volumes, execution complementary growth penetration of on expanding X.X% strategies, of end the by favorable strong market share

encouragement While unusually our a by were first a X%, notably weather, with just winter down organic in decline severe This, Canadian coupled meaningful adversely approximately fiscal the from forecasts X% with operations Canada, construction to beginning increased quarters, next our in behind which muted several several we've Canada, for the be profitability over for and us. has and are us sales provides the that starts the of in year. of the half were non-residential growth housing declines Western impacted sales past years, improvement experienced consolidated

and well driven purchasing basis favorable synergies by mix. We expansion, as were of margin related XX cost pleased to acquisition report gross as price points dynamics,

ongoing and due was as of sales continuation expected, percentage just a the cost year-over-year price mentioned primarily this other deflation of higher pressures. As quarter, SG&A the again to

to drive In investments the addition, we leverage continue to further profitability in grow and make sales, scale future.

quarter, to growth EBITDA X% adjusted to in and for note EBITDA of capability execute our in new Related will front, the operational focused Austin, growth we adjusted the SG&A our market. footprint locations A and that high the increase our acquisition work, I'm in on a and during an and expansion expanding be second of X.X%. two this Texas. pricing we margin pleased continue very the to through the on challenges to greenfield an location million servicing the $XX.X on Despite generated platform in-town quarter, initiatives, commercial

Ontario Also, Cambridge, our our opening further expands in greenfield with complements acquisition Ontario of our expands Building Kingston, market and and leadership. Supply scale Canadian our along Rigney November in and existing business

Trades represents the increasing our of entrance also important in the New into market. position our acquisition Vermont, states in Supply end and to Trowel we further coverage the which Subsequent the announced our quarter, bolstering to the England XX of thereby Inc, U.S.

to through footprint We greenfield disciplined and acquisitions geographic remain committed accretive expansion openings. of our

we continue debt which also our made reduction with We to progress. balance on priorities this

cash As to reduced generation, a leverage of we strong the continued our free end result as of times quarter. X.X the flow net of

more With provide to that, it I'll now on Scott? to turn perspective results Scott for over financial QX. our

Scott Deakin

JT. Thanks

generating increasing and We EBITDA flow. free performance sales, growing gross strong were adjusted expanding pleased margin, quarter, to in significant cash the deliver

to pricing lines. second X. Looking $XXX.X sales greater of this portion from what X.X% market grew much principally volume quarter, million, organic tempered We a we at Slide above through somewhat volume including in be generated believe year-over-year, Similar growth. X.X% growth certain net to growth by gains, product to deflationary was the

increase basis, year, compared a with organic up growth volume organic Sales X.X% decline price the X.X% which of U.S., and an driven X.X%, on X.X% year-over-year. wallboard an same including coupled to by last in volume of in mix, included period double-digit the growth were

declined basis, sequential the marginally quarter. wallboard a On average only from pricing second

volume and a organic basis, Third quarter X.X% in mix. X.X% year-over-year increased ceiling by pricing on sales with X.X% improvement X.X% or growth an including

of an framing in and steel decline on was offset a basis by X.X% corresponding as growth organic X.X% were and increased flat strong price mix. of volume Sales

the more recall, of quarter. mix pronounced reported in You'll and second we steel deflation XX.X% year-over-year pricing

result in for year the quarter further quarter. was a did basis bit third prior the steel of a year-over-year the sequential the difficult in on to case from was the comparison lower second While quarter, pricing decline than a second decline a less the price third the

other net or sales organic quarter up U.S., to X.X% X.X% Sales EIFS compound, complementary of In lower stucco, the an the of which products, other as products, installation, these in consists on partially lumber volume various the weather. tools, joint and of principally increased lower Western in by a of sales result offset were Canada adverse X%, due Canada, in products basis. growth

grow the expand priorities. for efforts robust, products, of products growth all Volume complementary our but important elements also product our core share our groups reflecting only not our was demand strategic solid and two to environment, in

profit end million, year points wallboard, dynamics, of XX as related synergies, basis purchasing due XX.X% mix. favorable in quarter margin improved $XXX.X price primarily products; product cost mostly in over to and X% and other to Gross well XX.X% gross a market steel principally the third Canada; as ago, increased acquisition from from

Favorable increases from initiatives. from focused include incentives, as as multiple cost benefits well in products, supplier across driven procurement dynamics higher purchases by our benefits our volume

At benefits to lapped the basis acquisition, the of in the purchasing Titan million points synergies provided beginning of January, which $XX from benefit XX related we the nevertheless the year-over-year of annualized quarter.

short uncertainty factors contemplates XXXX. for market the range of generate our fourth cost activity Looking fiscal weighting ahead, to may a we of impact XX% dynamics end quarter margin term. of the that range in residential price some well expected around higher an XX.X% to mix, as in as expect the This gross within

primarily by net to was to Slide some realize was sales Turning resulting X. more market and percentage to Approximately a categories. volume delivery Adjusted particularly compared volumes. driven The pressures, continue selling incremental driven partially higher quarter. in XX.X% basis in year this the product to model across to growth as in expense our value-added to gains remainder costs inflationary of continued deflation XXX were delivery half our tight was in ability up market. points in deliver XX.X% and a warehouse of related SG&A from productivity we efficiently prior by cost the prices labor as offset wages, the These

mentioned, in JT to our profitability. we As drive and grow leverage initiatives sales, to continue scale, invest

example, beginning While certain benefits in in initiatives are from realized gross these be purchasing margin. included SG&A, the cost associated those with for initiatives to are

with $XX.X an margin delivered up headwinds level. consistent the the X.X% adjusted were million year-ago able some year-over-year. Despite EBITDA of we coupled to In EBITDA, of of aforementioned pressures, quarter, form the deflation with the X% maintain third in price adjusted selling we meaningful cost

the QX consistent on in somewhat with assumption of remain pricing levels those Based of QX.

in We continue expect price will less the but the quarter, will pronounced SG&A be somewhat fourth deleveraging to related sequentially.

and As achieve margin gross expect a result, for margin the between adjusted for expected full EBITDA range XX% in coupled our fiscal year XXXX. currently with X% an we QX, incremental of to

items, partially changes for of decrease result income higher of X working Slide of first by or increased in $X.X of This net a million improvement Free XXXX the net resulting $X.X to million capital, year-over-year. Turning from for expenditures. $XX.X cash fiscal to adjustments after capital noncash X. cash higher million is primarily a flow XX.X% $XX.X million offset months and

Looking estimate XXXX ahead, we million expenditures million. for maintain our full year current of $XX $XX to capital fiscal

we stated At was of down leverage Consistent is quarter. the our with from fiscal other priorities, second X.X during capital cash quarter, continued generation. end our positive our net year. intend which $XX.X stated allocation the we million the debt to strategies, to by X.X times with this Balanced net reduced the continue free times, at the through our flow delever quarter of of end

million $XX.X majority million of end our under large on due of as total facilities available in liquidity healthy XXXX. sheet and the the not cash substantial remains of of is hand the balance debt, $XXX.X long-term Our our until quarter with resulting third

back the before let turn call Now your for the open we over questions. JT me to line

John Turner

Thanks Scott.

pleased flow. sales gross and third we increased the with cash margin our expansion, higher performance in strong adjusted quarter again, are Once EBITDA, with volume, free

continue balanced product expand position our our leading market We portfolio. and to

and an but our our managing believe construction market and pursuit diversified of not residential, exposure in to markets commercial advantage, as growth well repair also continues remodel be cycles. We and as only across new in

with providing and is none. entrepreneurial to Our to business network, and continues embrace second day expansive exceptional to our that line customers’ complete earn service North America dedicated our team geographic every our products by strong culture of throughout

we construction the residential in rates, to favorable Furthermore, XXXX. Canadian markets activity. With low for consensus construction and presently respect commercial our and with interest suggest a employment, end both healthy and growth strong forecast calendar construction markets, see currently outlook U.S.

the future. the are on shared you, strategic growth I in opportunities significant pursuing quarter in priorities to with order capitalize Last the four we

on we the some progress categories for results an our steel, excess third which initial product gains. each achieved of and excess Our growth quarter volume market market and wallboard, fronts. We growth of is in share ceilings reflects core for believe X% of these reflect of

products in expand profitably and tools, our the U.S. growth EIFS other of of X.X% important and offering. to X% product with double-digit fasteners, categories diversify efforts including underscores Growth including in our

profitability our initiatives scale We continue further to adjusted gross us greenfield margin. two across acquisition expand platform practices leverage margin our and platform And our to best one innings, excellence maintain our and our in through operational our although expand openings. and enabled EBITDA to early

GMS There in lot going exciting and industry. things are of on a at our

We for our strategies positioned confident the we execution growth and long-term of create are value through ahead that to capitalize well on are opportunities these shareholders.

ready now are questions. we the Operator, call to open for

Operator

Instructions] from Grooms of first your line proceed Please the [Operator with question Stephens Trey Our question. comes with Inc.

Noah Merkousko

This is Noah actually Merkousko, on Trey. for

a of to that of So benefiting the quarter. on ask couple we're I the moving in pieces gross sort questions margin wanted

product like ago I was it period. but unchanged year the think guys mix mix mentioned, was that benefit, you a from looks

impacting any kind price you about just higher And also, about maybe that to think of So the you volume that's benefit help how guys that. long expect tailwind talked persist? on and purchasing cost. commentary And of how us

John Turner

that, the supplier Well, significant significant steel, mean hit activity. volumes and incentives as and volume bought we sold some of two that wallboard I a we and you result points. received in

feel really more business, about growing part the So gain and objective, of obviously more actually good money. products we that of of sell share as the earn

the pretty in we think quarter. pretty was good, that So a good result

to mix far the very margins. had when that's we because concerns, as a it mostly and mix strong our As gross commercial commercial comes quarter, a is still product stronger little

higher commercial, gross with our is which normal between a margin and And kind experienced between volume, slightly I all in in of would say, than mix wallboard going the higher we steel mix. out so commercial

Scott Deakin

Yes.

So absolutely you're right.

you the And et at of lines, what product mix If but look types the in cetera. there it's types across of consistent, terms mix, is the of the other of wallboard mix we're that's the business markets, referring. within elements

Noah Merkousko

mentioned give there just And just right housing U.S. Canada. you're right. sense. looks and us a little makes you color what market, really expecting then All stabilization it a follow-up. in and healthy Canada? That specifically of on on bit now signs more Maybe

John Turner

what exactly I and does I yet, specifically of think know don't think anybody really going to know Canada. they're that out don't we get

it's there we're in seeing up huge words the have lumber past. it If again by talked is in but price I the we're a we what as there. - well, think we some use about stabilization encouraged not issue

So Western that's we business. where a Canada good thing have for a have, we bigger particular us in lumber in

year. in think I general, last that really single-family year allowed the had

the now and itself. okay I and okay come a multifamily saw numbers most think out and And we down the then single it's back, maybe up digits, in and was to low going encouraging few percent forecast it to looks like were XX-plus last year, be year. stay, this that's

it I signs with calendar growth that what market around be into. just wouldn't I same having extent. we as not of to 'XX, go end 'XX to to optimism in double-digit seeing that of and our this rate be okay in anywhere sell going type So is of market near is that we're fiscal off but expect we basically decline think the year, dealt into to and coming in some an

Operator

comes Our question. with question the with line next proceed of Research. from your Please Kevin Northcoast Hocevar

Kevin Hocevar

accepting in I'm those some comments, really these some point? that shaking versus how there due there versus there? baked had know price passing curious in wondering, driving of for of you on you you're along? if give the cost. quarters. that the you terms have color and uncertainty increases cost that XX.X% at could you're curious fourth and a could I this there several you give there if margin to some what's price in been gross those implementation in outlook, benefit you're price some to what color the are you're XX% just kind what quarter; last still of Is seeing in price I'm I'm seeing nice for cost for were out uncertainty what mentioned

Scott Deakin

you. Thank

exactly uncertainty marketplace pricing action recognized there out as referring just to the what at is to the that we part - out of we that aware the there. with as everybody want we're works and getting terms You're in as system well Like it, as recognize market to outlook. of comes there was a is there a it that bit little our part a through way of its just and

So, keep right. exactly and it getting

Kevin Hocevar

look into progressed and we're then And - terms as your throughout, Okay. through third say quarter. the, has in here how fourth fiscal you would fiscal quarter you month this demand a

what seeing you're far so February? wondering of So, kind in

John Turner

a looks the last lot February like quarter.

very the So, we see conditions being similar.

Operator

Barclays. Our next question proceed question. comes from the line of Matthew with Bouley Please with your

Matthew Bouley

questions. the guess, I Thank wallboard the side. you my share I about for wanted to gains, on market focusing taking ask just

then double-digit pricing, we volume path. expected. suggests did than least that it that wallboard guess, come at in well down the you're organic little had a So, But the U.S., on more I

traction? really the you. from Thank how that discuss of are other versus pricing kind just of is sort gain you organic can gaining making that the are market guys you So, much this coming share efforts of

Scott Deakin

fully I in I gains. mean, driver including after We've invested really do We've that in sequentially, every capability. price I I things. think see key service. with additional continue our is fleet in that's in our pricing salespeople some the that some added believe there, engaged we've don't to out being being getting a we basically into invested opportunity market. the team flat

leveraging doing, superiority being our and adding business. it's service really what additional to and sales in people mostly past think a of we're I the result So, service committed

that's growth. really bulk that been think the what's I of driving wallboard

that's for having - on sequential think us. a declining I price that indicator I good a think Not basis,

Matthew Bouley

SG&A. I That's ask it. Got then secondly, helpful. to wanted about And

from QX. quarter heard about percentage the correctly, that increase you that and I of the half lessen selling prices came you should in pressure think, I in lower mentioned if

wage break at up you basis SG&A to You've point inflation; and Can lever of more pricing investments around go-forward little on begin three out got detail? a going and what market moving buckets Thank those given again? Just guess, market coming might some then inflation the etc. the product you a I you. kind pieces and in on

Scott Deakin

get stability, steel. view pricing, but inflating very only little steel. It's we get I expensive inflation in levering when bit of all not get and steel, some, that are doing The associated cost we we on mean, price would deliver particularly service - with my as and be comes SG&A to a normal.

good out have that. we there that The based did productivity, the measure but way guys investments we productivity. had our Although, productivity in nice implementing some technology, of are practices our we across on also

SG&A commodity leverage see the the I our way that measured. that because happen, think you'll when our it see traditional in I definition But That's think inflation investments we will of some are pricing. us in really that

I upon near look. a as view we future moderate think term what they're to smart. They're based

for So, a money salespeople and years with - ground, to I those them don't of all X off to as as out out, get little and we're new months we're greenfields. not product. our investing well And the X XX with investing of up cost XX bit things

in down So, this that time I investment the slow making. think don't point we'll at we're

it's Although, with general X% a inflation, I range inflation some wage and being it's higher. then little And even that prudent and side warehouse delivery in and very just on and the think moderate. labor

in when of it get leverage commodity some we'll some pricing. these So, inflation we

John Turner

addition prior the more versus slightly that, favorable in year. have we I quarter a fourth would add, comp In of to the quarter just fourth

So, benefit well. little that will a bit us as

Operator

Capital line Our next Mike question your Markets. of proceed comes Please Dahl question. with with from RBC the

Mike Dahl

strong volumes double-digit number. and really specifically My question commentary. the first the just on Obviously, wallboard

was? growth the if the was the U.S.? what's split what what residential and your was organic What estimate Just that in in year-on-year, give double-digit commercial and us you of market wondering can of terms

Scott Deakin

in be - Gypsum mean, the general. we than numbers, Association in points would so, basis I we're stronger volume XXX

was. was residential points Our couple than higher volume a of volume our commercial

strong we're So, course there, of good we're seeing commercial which pretty out activity very still at.

good say I a that's growth residential high encouraging. us So, also very for thing. single-digit would is

better residential strong would anybody have but thought. very have business, I We X%] was even think [X%, than

Mike Dahl

sounds after side, That sitting And out competitors talking good. one more I about residential was some okay. Right, into aggressively to push year. U.S. looking with residential guess, of of your the sticking other last back

sustainability for So, dynamics seen volumes, from as talk to, can to next market. respect with any you've you share go think But the change tailwind around these we growth your of color the you to expectations through you got quarters? competitive anything few about talk whether obviously other you've market can residential or residential the as

John Turner

construction new of that it's probably business competitive most the - by the part easy we no It's forward, is the of growing any an competitive. Again, the is it to surprise pie. and in, stretch certainly forecast upon going While residential going piece imagination. that everybody's of want a it's participate business the not based

I experience decades in think that. got market understands that got selling team a it. we're into think we've I We've of good end at pretty and that

with relationships but wonderful both have community also community contracting residential. in the We residential, the in builder

whatever to expect than So, better market being. I us may still end be the up that market,

we're little a competitive. will able to going of be albeit to bit gain share, I it certainly be think

Operator

Manthey from David question Baird. line Please comes next the with Our your of proceed with question.

David Manthey

quarter growth you off, can relative give you to organic the if SG&A First have that? of comparable the sales growth third X.X%, organic us

Scott Deakin

to prior year SG&A growth relative QX?

David Manthey

sort on to that the Yes, that an business just organic organic in basis compares growth. X.X% core of

Scott Deakin

acquisition say I I there's really it I minor don't organic David, guess, off activity. relatively would on an hand. basis, have

think the a math I running indication. is good just pretty So, correctly,

David Manthey

Pretty close.

I that SG&A the I'm the quarter reading Okay. imply other the normal. SG&A of more based I think - correctly, which costs you insurance than on quarter, some running it things. had seems seasonally and other outlook? is quarter, it And is your the guidance year, timing third modestly fourth in if last and pretty higher then that only And All right seems to right. some fourth Am

Scott Deakin

I think right. that's about

David Manthey

All right. Okay. And then finally…

Scott Deakin

percentage a term be just on think clear. to I

David Manthey

Yes.

Scott Deakin

So QX QX, are versus you year-over-year? or saying QX

David Manthey

dollars comparing SG&A. the from was SG&A No, of your guidance to relative QX I implied your XQ dollars in

Scott Deakin

given will but the higher, It's the basis, consistent all the higher a of definitely fact roughly of be percentage just sheer There on business. volume year-over-year.

David Manthey

late the labor outlook lately, it feeding shortages you, tone XXXX better it than then up, Thank And that backlogs that today whether based was fair non-res your It firmed just on it ago? slightly market or or is what the right. of all is was outlook were X to market. finally X that seems Okay, outlook is participants say it on non-res the and seemed months or have many you. on like

John Turner

so. think it. And I you that of I said that's Yes, macro months or further strong, X We but was can our kind on activity out of than reporting at always look the our much activity reflective think seeing so. just you're

we low-single real like than So were, all talking digits being flat, it's better or maybe when it a and little to that. growth you, moderating we it even maybe that were about type going into be looks

So that's where we are.

Operator

from Our question. line Steven with next Research with Ramsey question Group. Please Thompson comes proceed your the of

Steven Ramsey

sales in X% On was organic, other growth you then clarify, U.S. up maybe can products on to talk you to were said correct. ex-lumber, Canada Canada ex-lumber? And that

John Turner

for Canada, about Oh boy, ex-lumber us we talked number I'm an front have think we've don't ever in I not it. and of sure

that business very little there differently product residential of fundamental the small. for is think other market is a again We than I business is It where our it U.S. very the in U.S., bigger well, number installation U.S. reasons. sell the Canada in very, to in insulation residential goes a in market our

roofing we and Canada, and sell roofing of under also single that's have Canada course We fairly family good in stress. in business, been

going move We - I of don't in to and for our of and in us. West. I that's you and thing it in most up in pricing is can moving back lumber ex-lumber we've a all lumber, seen volatility tell lumber good that have the all forward then has it price, front and stabilized business the like appears is, is And us

Steven Ramsey

go-to-market pulling outpacing adding pondering, in products you know Excellent. category, improve you about are mix back success? the And to products you looking at growing other think growth as mix products this or and are new you to

John Turner

organization in the categories. looking the successful mentioned EIFS. growth double-digit focus product to I other is Yes around particular One in both, we are most

in several at are We that places. good

not we are can upon in We that's that area places, an expand business in that well. even many so as

that division And into not exit. will one are significant then the or are terribly time, other core At looking categories, the geographic, on the us to other in and-or either even water either depending us looking some us, the that exciting water envelope really categories proofing have not or we to also and same above two exterior profitable, we're the expanding in and to below product is way. proofing really that, at and category not at exciting and grade we we're is and in a meaningful

those categories of to And we be couple that so could are a future. think the important

Steven Ramsey

nature be one-year Great. initiatives. a to longer-term impact? other thing And it I you this on that, an thing but to of one mix, significant mix won't that the ongoing about that more on ongoing as and know of Is talking bigger shifting kind levels of you and some the a or know that adjusting out you're play then, then and initiatives, is more mature is and

John Turner

Well, I and ceilings. said our outpace of time, products the been grow as other single-digits traditional our mid has which products will wallboard, over it right think commodity product should most or categories likely, high steel we

I just don't volume don't the wallboard every forever. double-digit So expect I that's quarter market. think

there. at same That that strategic getting that of the just better whatever a that better in those, places in well. such in of strategic me the going in have we're product most - there for being we're that part, focusing time category many our our we'll continue to a distribution the than market, to started. may we other to to I profitability of but And strong as really products so do think an expand part be, is other added that is business - be opportunity the

Operator

Our Nomura next question. Wood line Please proceed from your with with question Instinet. the comes Michael of

Michael Wood

to tactically would you the coronavirus-related to we here outlook, potential business, in react into slip incorrectly markets, bond to or curious any maybe hearing that? of and beginning U.S. comforting of a recession. a your your recession, to Are light here shallow correctly looming in just indicate if how disruptions favorable you were equity GMS Very

John Turner

that we're have take that of our the Boy, Company going our own our think just our situation care we all of that safe. care are prudent when open hell and people I to know in of what actions about this to it eyes on can keep people, issue, smart to and take issue. our customers, they're general coronavirus everybody keep things do comes talking to In - we to the listen the to inside be that

know mean don't I to what to it's us. going

is a business perspective chain so based supply - chain part, chain chain the for today, just the for supply Our most international most an from supply North base the U.S. we're or not supply American part, the for part. most

it on coronavirus us on supply likely won't that be the the impact won't - and the most demand side. to any down So side will whenever road, we be happens and

immediate on back our of out inventory. have for pull will go, things situations that recessionary most immediate, cash any returns don't part the as far generate As

probably trucks we'll As manage roll have was mild structure fleet and making all cost of we It that our that recession we're to have kind through, things, of we're you down go term mentioned, and would around, those move returns forward, them. through normally slow - a the we some investments will expense I do. that like off longer

Scott Deakin

Just we in as took it capital - a leverage well. downturn working

offset So there. a cash - it's a an bit standpoint, from of there flow is

Michael Wood

that are back also, begin quarter? pushed see it of to decline. give weather that able come And us X% in to demand, did out And color great. benefit you was you sales organic the on you to post and impact Okay, Canada, on any

John Turner

in is out market was for where literally Island But of year yes, a Canada business, quarters. X-week significant last into week, weather decent fairly all next had they Vancouver that appears Western and of have of as time. and should very So like it impact the Western our Vancouver Canada, the has market And over pushed snowfall unusual severe particular Island. couple on that's of it a is XX% period recovered that I there. just - appears And it to this have was like year, that going

And shut for so we an period. really were extended in of kind

Operator

you. Thank

the would like over reached our for back of have remarks. call any We the Leslie turn session. to to I Kratcoski, question-and-answer end closing

Leslie Kratcoski

A will shortly. as day. be interest Thanks of company. always, today. on And joining everyone for gms.com available this in Good us replay call the appreciate we your

Operator

Thank teleconference. This you. today's concludes

this a disconnect participation your wonderful Thank and have you time. at may your for You day. lines

GMS (GMS) 5 Mar 202020 Q3 Earnings call transcript