GMS - Earnings call transcript Q1 2025

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Operator

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 Phelp, Vice President of Investor Relations. you. Thank

begin. may You

Carey Phelp

Turner, morning, Financial earnings you first conference I Vice by fiscal Good and Executive for Deakin, Scott quarter joining the XXXX. Senior John today joined GMS call and am and and you. Chief for Officer; Chief thank President us of President Officer. Thank for the

website Slide addition the Securities XXXX. press of the we've On to slides PowerPoint call management's to and release in morning, prepared with forward-looking the Act In answers questions accompany section as Investors at today's call, our to Private of posted in Reform defined X. may we issued www.gms.com. Starting statements this remarks Litigation this contain your

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

As expectations. forward-looking call be the quarter to definitions a contained that, discussions any With Listeners company's and call the certain X. release relate with more provided review whose this XX, in SEC, the management's first turn the and reports. Today's note The to the XXXX and the XX-K quarter JT? in July John fiscal Slide filings on the current statement periodic the presentation measures. of to discussion Factors over company are includes non-GAAP Turner, GAAP XXXX. [Operator The in a estimates on update will presentation I'll statements Risk references press of of reconciliations and measures forward-looking discussion are statements obligation the ended future. starting to slides. these to company's Instructions] the in Please the to other forward-looking no also reminder, section the represent encouraged related including assumes detailed

John Turner

all you today. you, joining thank us Good and morning, Thank for Carey.

the multifamily commercial year price result by major than in For our primarily X.X% $X.XX sales and acquisitions. Organic declined product of all of year-over-year quarter X our reported by on a quarter, deflation, net and demand. in we growth of end driven demand categories, for offset growth ago, the single-family in markets higher sales partially billion, first recent volume softening steel

of All compared income our for $X.X ago. year a slower down steel commercial points XX Wallboard at the ago, both margin due in compared and quarter, in declining year weaker price to July. Gross from end in $XXX.X also million a by million constrained than was of prior XX% interest markets $XXX.X mix XX.X% demand. Inclusive million of impacts million $XX.X a $XX.X we realization to the net deliveries. million a particularly and basis period. was price expected, year the benefit, prior tax amid were expense EBITDA multifamily year margins weakening increase were onetime to Adjusted deflation of

at Looking end markets. our

activity, of a demand by create rates incentive subsectors care, and elsewhere. health such as saw data the programs, interest those Acts financing certain [ commercial centers governmental environment continue CHIPS challenging ] Although Reduction education, and Inflation High broadly to including projects quarter. during buoyed the

considerably impacting are slowed of pockets expected, with projects do canceled, several in or postponed first as our activity during demand result, As remain we although particularly through. too, the Multifamily, commercial a regional than more July. backlogs quarter slowed activity sizable worked

double-digit levels The calendar have year-over-year builders For soft. recent back the July a exceptionally was year. year start new pulled activity ago, in than rate single-family, most higher earlier while print were a from

starts any that believe growth starts. We strong reductions. sales for confidence market lead are to somewhat widely numerous to upon But broadly, and by this that likely However, any extent term, September, all consensus permits, there demand continue any call calendar XXXX. end and the recovery current we With know then recovery and commercial post the should as that view housing, we will public calendar development. This saw the believe timing is calendar near long mixed indicative indications the temporary market a the extent rate improving trigger for for the pent-up new of sales interest new economic of one considered for forward, XXXX, home interest pace are quarter we in annualized end recovery, last low by constrained significant of that provides depend single-family eventually multifamily. We headwinds will the for More of largely time of end anticipate to our momentum reported in that believe the first medium support looking likely myriad all followed of just XXXX basis, the declining all an now the on signals, most housing start balance and we markets. term. expected the for month will single-family in will near-term week, for easing as rates of while by forecasts rates recovery of indicate of single-digit

shipped Index well Architectural time, construction respectively, in that other by and recovery, weighted in the revenue to balanced construction. customer equally as for our looking backdrop be the declining Additionally, and multifamily This the interim, roughly commercial of we with in that bottom our the and subsequent life between indicators. We'll under have into mix brings likely Dodge for a of commercial mid-XXXX backlog benefits in strength Billings wait continued Momentum residential. improvement until is market XXXX dynamic to market, base will end while units the and Index we as a

provide as diversified end evolve. foundation continue dynamics to mix along solid market flexibility, the operational us scale, Our and of customers, our capability a with with

in of and like-for-like are the pricing, to ability terms realize improvements. wallboard encouraged our we pricing In resilience by

which synthetic market, being plants, more are wallboard. This manufacturers is other curtailed, power through a capacity demand, create upon down source are market. manufacturers While rising as dynamics, tight be natural continue be not price improvement easy are prices to relatively in modest before primary This local and shut pass must or believe turning to costs in will that the in of with wallboard distributors, ultimately to should a shipped impacting then gypsum, changed again softening And to to it capture process increases manufacturer increases. pricing kept structurally has industry we with used conditions. before demand, in resilient facilities return face coal-fired continue a single-family be along sourced we to then which and and stable, can inflationary the particularly gypsum,

program pressures near-term efficiency will annualized optimization million persist made this and market focus on simplification process challenging implement to climate, several taking actions technology reduction by the Given $XX investments possible in decisive next we likely that are over quarters, a we believe prior improvements. with and with cost

more picking reduced Specifically, routing a few yard locations, and and processes back-of-house yards, leveraging dedication that improved to customers procurement. from other the and We've loading automated centralized like located we an thank their commitment of service setting in have streamlined in GMS have efficiency better would us is our ever to changing. our fleet, environment up entire strategically our overhead, the and consolidated for operations. I our continued we team

are our of to we our their and X pillars, highlighted X. a which deliver on for value As service of through execution Slide customers outstanding continue the efforts, strategic result

our growing grew and calendar confirm we maintained the first year has areas EIFS for period over Stucco complementary the we across ago. grew Even insulation, growth a second fiscal of of manufacturer a as the X% within that X.X% and tools focus quarter, and slowed, during fasteners products: industry category and or temporarily data products. With collectively are quarter, share product our our demand X total complementary total categories same core and

servicing exteriors recent acquisition is exteriors are Elliott approximately to business. Elliott our in R.S. a serve $XX exterior growing R.S. to closed the products, related Yvon also complementary well-scaled in respected We expanding leading platform across execution markets successes. with continued Florida. and commitment customers construction to offerings. R.S. that demonstrates our XX our nicely accretive complementary that expected GMS months to EBITDA for Canada, the R.S. we existing building our announced our which which ended product distributor of highly by Florida, Elliott June are margins GMS Elliott, generated July; better and including net and EIFS be a Adding business excited cluster, million distributes and our siding, our today. our XXXX stucco, complementary and revenues of platform, to strategy, in regional of cladding supplies, to

active are Elliott footprint, M&A intend excited expanding an bring we pipeline. into product brands, We R.S. to the family and on GMS to with scale offerings and focusing of our continue

notable and technology employing we deliver strides our leveraging a customer experience. to and scale make continue driving by profitability productivity best-in-class Finally, to improved

our our in complexity subsidiary both parallel and ramp of our digital reduction. In improve business. encouraged we and to are particular, efficiency simplifying by and of continued organizational are customers reduce automation focused the with GMS complexity We the structure for tools

We months are project. completion past the XX divisional now roughly such our of first

the in nearly improved turns earlier, productivity business, from total more increasing the XX%, referenced to while down addition our areas well. In costs DSO XX%, reduced progress than this wallboard to as been working inventory has In division, meaningful with capital in turns mid-XXs as XXx. I are we

generation We are organization improving using our this value ultimately all providing while drive across additional our of of template customers. also profitability and ease greater the efficiencies, business, to to doing consolidation cash as a

will call turn the over to With that, Scott. I

Scott Deakin

primarily growth X. negative increased fiscal Starting the soft steel prior X.X% $X.XX which residential current Net in JT. sales our from year lower-than-expected Thank steel as $XX Slide volume volumes assuming to at in estimated been product part activity, an deflation, you, price were to quarter and helped across our resulted recent together offset by acquisitions, impact X.X%, major Good have roofing price with impacted complementary lumber. particularly by billion, morning, product sold driven categories, sales large Canadian prices. Organic single-family deflation, everyone. sales fourth for million down in year with

the we commercial than noted, during quarter levels multifamily slowed JT more and As activity expected.

the also was prior X.X% dollars and of multifamily down dollars prior recorded compared X% its U.S. and a volume dollars compared demand. From single-family dollars second commercial were comprised to of a our expectations, and a single-family sales million with single-family product up with end benefit while up across flat first all somewhat sales over sales multifamily quarter price commercial volumes In in sector mix. X.X%. perspective, year nearly a quarter of year X.X% consecutive X.X% volumes, slight growth period in up U.S. lines, market contrast, declined X.X% relative the increase X.X% $XXX period, were declined improved same sales to year-over-year. roughly year as sales Wallboard from year-over-year While the constrained X.X%. Organically, wallboard volumes ago, last

fiscal During pricing products, our improved fourth the quarter, up for wallboard sequentially realized we quarter. from

thus average mix roughly this in resulted towards heightened board priced year-over-year a expected, as category. However, flat shift for lower construction single-family and pricing

X,XXX per less $XXX first fiscal $XXX from feet our quarter square average realized for wallboard was a and Specifically, the than fourth ago. up the up quarter, $X from price in year

the quarter month Given slowdown expectations wallboard in fourth later mix end anticipated quarter wallboard had the and average for was more over resulted for our equivalent the the we quarter. July modest than that was earnings lower on and Relative our multifamily call, in also of prices result the shift we that average $XXX, progress to provided in pricing quarter, commercial the pronounced despite product price slightly in the mix shift quarter.

for for a and $XXX.X XX.X% Ceilings, X.X% and X.X% the Ceilings price of million a X.X% mix. X.X% quarter, remodeling quarter, in and which price volume X.X% and bump sales increases seasonal acquisitions sales volume school-related in were in up strong first increase grew from For activity, and including in a in increase mix. benefited with the Organic in

First decline volume, were anticipated, Steel XX.X% with worse X.X%, X.X% were slower quarter even driving had multifamily XX.X% price largely a was deflation conditions as and the Steel the down as XX.X% volumes million in Framing sales in than acquisition markets. of end low-teen also price mix XX.X%, $XXX.X and in decline a in growth. Organically, mix Framing reflecting we a price on decline and down commercial and sales decline improved

Canada fourth products, the greater quarter building to driving a X.X% commercial XXXX. Complementary to grew predictable compared of product our less million down for the sequentially down projects this outside be recovery XX% in the are earlier X.X% market influence steel and ago fiscal quarter to demand summer, year-over-year $XXX.X of a basis, applications from year difficult declined of market were total, an there. impacted remodeling products, the true new of sales organic most heavily as end said principally until have with historically. Prices quarter for of demand some commercial lumber category, likely the sales of space, see continue for portion in steel will given to representing we volumes soft as single-family XXth growth this in activity the but than and consecutive has of our X.X% mix on they roofing be larger higher forecast a framing we been As which proven

Our insulation, which compared products, XX.X% to which in teams remain EIFS stucco, the focused year fasteners, which grew particularly on and driving X.X%. And Tools growth quarter. in for grew prior complementary the X.X% as quarter. grew and

margin expected profit XX% to and turning our million gross wallboard contributed dynamics mix Slide single-family highlights a increased price XX deliveries, to our the quarter deflation, Gross of impacts communicated the XXXX. were first pronounced million quarter. of compared us basis and X.X% which than Now continuing due $X to X, or ago, multifamily primarily as shift in points profitability which wallboard year cost below to XX.X%, for recording of outlook. to commercial margin was Gross steel all compared previously price to down and a $XXX.X of from fiscal more the

basis of primarily million leverage increases expenses price variance as expense quarter, compensation compared Costs points, of Selling, the basis Operating period. XXX and due percentage approximately quarter million a prior general and basis year-over-year inflation XX.X%. administrative approximately impacted to contributed associated steel of warehouse and XX approximately cost million for Of XX $XX activity-based points SG&A deflation were while by deleverage. points from million XX.X% leverage remainder approximately points. Adjusted the remaining the net in sales XX The activity-based in by up was to XX.X%. difference, year costs. SG&A recent $XX.X $XXX.X negatively from inflationary of XXX for employee $XXX.X of a as impacted related XX.X% the acquisitions with acquisitions. percentage to SG&A and the sales expense SG&A the basis to greenfield increased recent points net openings increased

ago, onetime and as which interest an have XXXX JT diluted As or per prior the quarter, $X.XX benefit diluted per in $XX.X the share outlook, XXXX. Adjusted million actions, net $X.X to or was share fiscal share to a per the implemented $XXX.X compared a earlier, cost diluted increase first for quarter income in of $XX prior per or are we $X.XX recently compared million of year million of diluted to XX.X% $XX.X million of quarter our $X.XX $X.XX fiscal the expected in or near-term first decreased a year to period. Adjusted decreased EBITDA with million. All to income compared XX.X%. adjusted inclusive to $XX.X XX.X% XX.X% of of result in of $XXX.X level million reduction share income and million save EBITDA margin last annualized as decreased mentioned year a XX.X% in, $XX.X tax net net compared expense or year's first quarter million

make Before a of moving to items. our note couple balance please of sheet,

for income press First, company's presentation to adjustments noncash all companies, with for to of Please transactions. net products larger for methods. acquisitions. Past the certain including of expense only to public the adjusted adjusted adjustments for appendix comparisons refer practice using financial release and depreciation purposes presentation to net our are more amortization the the both slide and make calculating consistent EPS the legacy new included now other related and building for amortization and noncash we income this morning's

Second.

XX.X% we to to has shifted our normalized our provided, was higher year, rate for for the tax rate as the While mix higher XX% the the to of a XX% of of rate remainder tick expectations the to jurisdictions. previously we expect sales range consistent quarter slightly with

$XX.X million which facilities. our X. hand million cash turning revolving of and July we our is At under Now on available highlighted on to balance Slide $XXX.X credit XX, had liquidity sheet, of

up fiscal the Yvon net of as leverage of the of end the Following X.Xx of was quarter X.Xx at quarter, in first end the XXXX. debt our of from acquisition July,

we in under aggregate As credit our previously leader cash also The funded and EIFS, earlier mentioned stucco transaction other R.S. this revolving and this of $XX was and borrowings week, price hand acquired Elliott, with million products. facility. a was on purchase exterior

to We very GMS. to pleased Elliott R.S. welcome team are the

market months multiple EBITDA Elliott to billion accretive approximately JT track by R.S. excited with below across XXth at to of GMS' expand platform mentioned, consistent our exist for is to we we The net be margin. the sales complementary and offerings $XX and believe with expected As ended acquiring multiple, record or opportunities the the of R.S. are the was generated paid June Southeast. Elliott XX

the As to $X.X Leveraging flow of distribution will of and respectively, million is favorable million. Capital expenditures quarter $X.X quarter, quarter the of now expect often XX% million flow a business and and cash $XX from flow free and $X cash be adjusted for for the of compared uncharacteristically an of markets, million, year free million $XX.X fiscal free model the full XXXX generated approximately expenditures were expect to compared case ago. of for cash cash We $XX.X fiscal by uses our operating flow to operating $XX.X fiscal approximately activities typically million use for year first with fourth cash generation quarter generation activities we strong capital that XXXX, the a full of the softening EBITDA. be year million. cash of cash

had for first we fiscal remaining our million $XXX.X million repurchase shares and at another July XXX,XXX of share of authorization XX. stock quarter, During repurchased $XX.X

we we our balance Looking critical remain buybacks opportunities. capital allocation to attractive a component M&A repurchases business and expect in those continued investment share strategy forward, of with as our

continued now JT, believe with is call on structure start solid we an of Slide maturities to priorities. With the capital the foundation strategic sheet X. effective over balance execution our will I'll for no turn who near-term Our and provides what that,

John Turner

Thank you, Scott.

well service a commercial broad are products we in with summer, they residential market customers, through demand as of positioned worsened to market occur. shifts conditions address mix and end believe expertise with Although to both as move we along the we the

by We second positive the of rate levels new and expecting visibility as beyond quarter. are mortgage in reductions higher-than-expected other fiscal certain But rate conditions choppy the given timing unknown with home XX-year such low we in external encouraged relatively our recent of and sales are uncertainties, indicators, movements to July. remain macroeconomic

down we as wallboard be Given with anticipate the let this and quarter. up fiscal Starting low our business these digits our product to expecting wallboard including we end market the flat low our of low-single volumes dynamics Multifamily for to entire to reality, prior volumes single-family proving be are digits. The wallboard single new be we down the for fiscal me and our in to volumes commercial up out Using digits. Considering be again we for double single recent in second to category, quarter, pricing resilience second realities fiscal organic XXXX U.S. consolidated total into and volumes the to all expectations industry. quarter, our wallboard saw down our see to growth. is during quarter. wallboard proxy, organic acquisitions, wallboard as wallboard digits mid-single high go fiscal year first continued our digits volumes, the compared

to Ceilings, organic to mix. acquisitions, double low of Inclusive expect single up price year-over-year. and recent flat continue our expect digits just we low to total XXXX. In to to hold shift second in up like-for-like with single-digit this category pricing volumes quarter, realize slightly pricing expected be to digits the expect up second product second with quarter fiscal up quarter the improvement for low our we of be mix likely will as While compared we year-over-year

be sequentially, with up year-over-year. X% than single mid- acquisitions, prices, that our For volumes organic and digits in be year-over-year many expected single fiscal which of quarter to the in steel projects. digits expected indicates high reflective active financing softened we to low down volumes are low which prices environment Steel recent teens be will current down Framing, Including to first slowdown we expect about down more

up XX%. of Finally, our to of digits to organic compared XX.X% digits. as second quarter single for fiscal digits, continue for deflation. Gross are complementary adjusted quarter to sales price range steel anticipate second net to single to XX.X% improve as previously with as negative sequentially pass of down impact our to in on mid- All with expected with to grow wallboard $XXX EBITDA we fiscal is net anticipate margin price the continued expected million in, at our low- with announced shown the X, $XXX mid-single sales million to our EBITDA we products for year low to a fiscal second high margin ago, be Slide a to for quarter be of through range increases. All we in, approximately sales

to important few cycle, As the that questions. previous relatively note traditional creating in comparison rate in and a and well this next of to end the waters AI, for are new while value applications if reshoring This We investment us be today. confident and and that are sustained undersupplied open our exciting market line we go capable ahead. Thank bottom, for moderate is stabilize demand forward, a it cycles. joining interest are in trends model slowdown and housing remain then construction in more this the recover like positioned quarters will notion Operator, is indeed environment. infrastructure of supports the the lower to our the you we navigate are ready business to that

Operator

Trey questions the Instructions] Our [Operator come of Grooms with Stephens. line first from

Noah Merkousko

is on Trey. This Merkousko for Noah

to First, margin. talk I gross the wanted about

half. for rest your year. With that the talked clearly about around front this XX% you're range I below in the guide fiscal you the of staying think previously XQ, for

updated there's with wallboard So just the back kind differing out half you're I the moving gross and the doing shake demand pieces price. on will a of how thoughts margin the few of on know what trends in any year?

So just any help there?

John Turner

to get most a is just of lower a increases. of result result trying as us of longer them. the outlook being back taking to claw It's XX% the Yes. us than price mean I

very We are getting slowly. them

just like-for-like we pricing up the in was indicated, quarter. As

we're headwinds volume comes to when it definitely facing think us. I helping

talking QX single-family this That getting it. see at point bad seen numbers, we uncertain, rate could because numbers when that think to the release thought great on again, get really when All sales we're is starts be much we how obviously, being -- it the we'll start do much I really numbers, -- starts think said, in environment that numbers beyond So than single-family I turnaround the considering yet, haven't we sales market. starts not better keep were some -- is was. in July the we the people interest

expectation faster. we'll they're buyers lower happens, in, the able to time, I maybe the XX-plus price to kind we're maybe builders and think being back be long rates, to seeing I in get that of they're come starts. over think So see the there. our working do that we're All we'll to run, said, maybe of percent then back if react gross margin going accelerate company, And get

Noah Merkousko

Okay. Got there on that thought headwind that would again, from switching previously deflation to have steel in mix had thoughts it. deflation, some was helpful. seeing -- how here. weakness steel relief gears are got the the kind you then you've there being for shift. I that maybe SG&A I any just a And That's will But then just long commercial, guess, with thought be I here just kind by maybe my follow-up, if and on SG&A the and to that's of overshadowed of SG&A?

John Turner

about Let steel me talk first.

your offsetting course. normal what yes, would deflation answer to of kind First be steel the is is question

thing were we're commercial now is flat. right other The seeing volumes

for rollover It's there this not rolling we're gap lot multifamily slowly. And with a just is end more of it's the the mega shift the is similar we're over interest where but kind which single-family of seeing rate-sensitive slow market. there of activity, still decent So filling so a market, rapid commercial this project it's the sized projects. seeing over, backlog rolling huge out into

that the ends. But is we're near at delivery. volumes the true. So million we that a challenged. that continue as be from the commercial natural in in steel of to are in of and price masking But deflation expected reason that and moment, cost cost that term there switch That's to said, the reduction residential, is there's to total hopefully, be business, being basically a out all taking $XX will

And out kind see in right take there's quarters that a to our to of we for at support indication a need until that so million $XX going an don't to cost now few business. need And grow we're more minimum. that we

that's X%. mean, I question. my Steel, down that's thought year-over-year, we down said. I or crystal again, mean a the in significantly the down more would of be I X%, They're SG&A organically, we'd So we that quarter. sequentially, thought than think was XX% wrong be it we kind We X%, almost down XX% last X%, just quarter. ball,

now very made we're X% price So pricing increase There's the some producers formers, of announced lot about maybe our increases. Certainly, been both talking decline. this the themselves, let coil trying down in sequentially of work continue around major have have There not going particularly price to a industry, in tariffs. by small tariffs in. moves to that key quarter. the there's prices announcements coils steel up there would overall coming here. around steel around the of Today, from and a in noise additional regardless that don't see on world China But new Chinese products. that comes is very be amount I it's surprised, comes of what administration in ends the if we

Canada think environment on just has see So steel tariffs XX% I announced expect around steel. a and and Chinese we'll do tariff in to

hope is the So from the but in all sequentially, hope not world, the I X% I our it's for next X% is strategy best of got best where sequential it we've guess quarter. decline

slowly hope to point I that, increase. or flattens begins that at that Beyond it

Operator

Our from is David the next of Baird. come with question Manthey line

David Manthey

past is you're on when you're the listing in areas focus million JT, tense. the question of cuts. mostly the the out speaking My cost $XX pacing

quarterly we on in a of benefit much quarter? basis? how And those see will wondering be the I'm fully here So second the realized already then reductions when will

John Turner

by third normal next it get And a what we'll quarter, about half quarter. quarter, see all. This getting by we'll of in be you'll the --

David Manthey

already go And some take does Okay. had you quarter, current you other that lap levels how actually got But if flat notice as the because price about steel little comps? I were just price made you it here increases potentially last and and you're a steel slightly there's some maintain steel worse and the said in the announced before mills it expecting, and down bit long did year-to-year of prices then said increases major channel. the comments we

John Turner

In top out mean, we of have Dave, I know to don't forecast the have it's because head. actually we know next maybe this fiscal beyond that. fiscal before year, just my I can for it but I we'll off you year, I that go... the information it you, specifically send

Operator

the from come is question of next Keith Securities. Truist with Hughes Our line

Keith Hughes

A question on steel. back

some so What's I lapping anything through? price from price to this. see now get increases year. difficult happened last never substantial we You're like pretty in in that quite it's market declines guess pushed the

John Turner

no there in increase price Well, right? is steel,

Keith Hughes

say. Or stabilization, let's

John Turner

Well, I think we at a selling you our of where is the had still we pre-pandemic kind what thought prices. might the roughly that truth. tell little in is this the really to space. bottom be, at thought double below still it's oversupplied moment It's we're -- the And reality

I XX% maybe selling the be we're today bottom at the found selling think haven't higher bottom, we thought we than we but would yet.

just So now. just all consumers steel, kind we'll they're just much just of of I moment, of supply general there's larger appliances think steel, too oversupply automotive kind and as and the the stagnant, right at

Keith Hughes

Okay.

specific weak you're and about that was in referring really I question weaker second why July? commercial to any July reason month? multifamily. it talked guess the And got that you and How weak The

John Turner

faster here X. got thought we or a think just we by I than quarter

place flat just about X us rate construction of ADI course we're been in we've months. And key if I you've think are X Again, got the the that and X% the X pocket here or matter over ever, the last seen or believe categories down commercial earlier. in quarter a volumes. about talking think air eventually you now for an developing you in put I talking about the annualized

point or X wallboard. X expectation in by in missed we So volume

degree kind that's the miss the the of the slowdown. degree So and of of

like ranges just go to feel we we for you those think and going a of this both volume-wise, downtown quarter, and of from not get and now, to see lapping guide in XX I flatten good... much an things and Keith, down we're here are increase going for seasonally, And like X as that It's commercial. forward. our next that's where multifamily just

Keith Hughes

it at down, commercial. will multifamily more that in hold has volume for the you directionally? in for than future, quarters has guide Well, quarter several Is down your commercial think the more least a trend multifamily second

John Turner

I do.

until I be would say difficult, yes, And you you pretty just hold under obviously, such there out we're going starts like starts mean look -- units at big I month 'XX. now. units going to about right eating it's completions backlog. think numbers, it's versus of is a there. construction XX,XXX if to if XXX,XXX middle Still you look but a looks it at only

slow just going middle So 'XX bleed down we recovery. range, while I of into be come that to in before think it's a get to it's going

Operator

Mike Our next Dahl come from the of questions RBC with line Capital Markets.

Christopher Kalata

Kalata It's actually Mike. Chris for on

Just a point. last follow-up on that

multifamily, do In end of headwinds market? expect basis in you to improvement timing those year-over-year terms a year-over-year expected peak for that when the on see of

John Turner

as was we of certainly Not market. always the until going the half 'XX is ramp premise start with we And single-family rate I back Yes, 'XX end that. for don't would offset the That with would hope multifamily calendar reductions. time. to that expect we seeing up pop in much to believe rate if activity a point I'd in going activity still that's very see I decline. surprised single-family better happen. by And reductions that be single-family to

Christopher Kalata

Is to your on back to expectation wallboard And pricing. on fiscal helpful. of then That's like-for-like gains year pricing in just that half you're wallboard net-net? Understood. that continue the your going see

John Turner

we've back Until absorbing, that answer everything to the been yes. we is get

the wallboard margin I is get all improvement margin in in think gross guide it's to us to really the it. indicated take this next X We price. this that gross more quarter in to quarter going quarters from guide,

I back also unless big there's meaningfully, commercial from some offset. as keep more industry is the it. I price coming recovers single-family think soon big, as think getting we'll

is think this we'll environment all I next come of year spring going in be be inflationary probably So to again.

Christopher Kalata

Got it.

barring flattening out from increases, any sequential So then increase incremental in there? XQ another and

John Turner

Yes.

Operator

Markets. come Our Stevenson the with Loop next line questions Jeff of from Capital

Jeffrey Stevenson

earlier successes you then you up with much your could the during quarters, offset question, was from quarter, it last color how the this how increases but to successful price do had on manufacturer pricing taking cost And and passing have Compared for about incremental about the to go? wallboard the following you on X year? thanks earnings talk expectations call, the more

John Turner

points point cost basis XX of was in price miss basis XX the Well, wallboard.

did longer some more quoted a way and are, and commercial we to length in a most not come resident as said, will -- commercial quoted Commercial in that time. Most that All of from negotiate the of so So little some We get. have hit of the to short-term it residential. see have the sequential expect of the as we improve, the tended did that of to to it prices nature is projects do we residential to being and Don't we we've get remodel that's space. because be bit But came taking historically of the and our those projects. expectations. improvement. just conditions would with in easier those but business projects these projects -- single-family work, they over much office

Jeffrey Stevenson

a environment? then And organic high being Wallboard expectations commercial healthy that variance while up be another between Ceilings wondered I volume volume talk down a the digits. could expected gives quarter grow wide will of said, volumes choppy low No, you little growth. Okay. about rate makes commercial if Ceilings to sense. at single more single-digit to was in you That Ceilings continue reported surprised digits, what single at that you just your And confidence a was

John Turner

I lower a expected. or we than were Sure. not, mean little actually ceilings, we in believe

They're fully which that's All in centers, good. are is grid, still market guided the is total really et centers The reason right the office, of ceiling volume ceilings, came range things like offset data we still cetera. And of projects good. and commercial go If loss the centers commercial god general issue. of right? The and have data that think for thank said, now. fantastic, going And dormitory around care, slower, a users education, you back, tiles, and for wallboard but slow; lot health are acquisitions. XX% That or are use being the it's those that little including double-digit lot X% of not that in schools, of retail, into is that's well, et a good big warehouses cetera, I data obviously the tiles a types that users of steel.

Operator

Our Steven Research the Group. will Ramsey from Thompson of line question come last with

Steven Ramsey

then then and slowing sure -- And how the wanted make projects May were the I few commercial the the describe and understood Maybe on slowness. first, broad a June those also, drop-off how projects? versus big was slowing canceled. delayed get big in good about you just to July? would I because how were and Maybe that you talked

John Turner

we commercial, this growth. general is quite was just And of would in for June we -- of July and do a frankly, couple what nothing fine thought quarter, the And kind July holiday about May points Xth really It's soft. the dramatically talking down. It say, now. malaise, been of of off hasn't August, about kind things just holiday. after that, right? We're a shut just of right through even rebounded let's

So soft. it's

large you're I dependent is that think being are seeing are pushed. rate what projects interest

delayed We a that or move usually those be canceled. Nobody talked team to about They be we push now they knows they're whole start being been them going pushed have in sometimes field canceled. and canceled when they'll by the to our to have list out whether of delayed. and/or then really that

a really that. Several of the big anybody, we be you half those EV on difficulty. kind rates. because of big had immediate lot have than quarters with a would mixed-use Dodge, at announced of at multifamily the you rates everybody seen commercial of that sensitive in 'XX, other country 'XX pushed been X projects pretty been for calendar probably lot look postponement or of concerns. will X battery projects have that's think of And talking I this Again, or of But of recently they the everybody's probably basis. in big that think in just we supports thought to a interest of You've not -- good 'XX, markets end projects the certainly, hearing demand we're less are could That's the providing pushed. some the sensitive, projects, lot multifamily plant really projects, of our be I being single-family they're I'm commercial around right, the responding, entirety FMI premise interest reality a look pushed. A pricing very more being product I the that of thought. what we good big when you And EV-related things rate rate end But about. be interest at reduced look back think reduction thinking so think

Scott Deakin

should so the space. just rate well, top positive of follows a on And single-family in that a that as follow-on commercial typically be a rebound single-family as for lead from general

John Turner

commercial, Infrastructure a mean didn't and big balance are in cetera. right, this in we that mega very CHIPS have mean forecast cycle there. I next particular, Act, manufacturing, like still think into construction I manufacturing projects be the put in still is the the of cycle out I if certainly those year strong still, place of would think, Because this for support year. et I Act, normal the

those create to continue so around projects them. And demand will

as isn't And bottom because I bad think bottom, mentioned, we have here all that of I as the so support. I felt the think as historically would

Steven Ramsey

well more the Canadian products divergence perspective. that starts key lumber in showed I talk then in step be on And products, back the the on and much but with to very markets. focus Very get geography, so other those to wanted seem you to and outperformed growth that a Maybe did within end roofing why and hear helpful those July? Yes. strong all above I complementary single-family take

John Turner

in heavy areas. I in July relatively a Florida products. our and have throughout our do markets are still complementary was business in as when Elliott We products, the those focus we across we categories. think on mean a Everything product No. that, Florida, stucco, expand similar example, of with gaining We're very siding EIFS many board a in business it really have is still acquisition, to an beyond to in lot There actually. we're infancy. that share great North those came market, the and in particular where R.S. then optionality that complementary

cetera. -- over the in some up filling Building GMS targeted I well. complementary made it investments we I is of Toronto, get across Materials we've New that, We products Nut these businesses, we think the Vancouver. other York rolled City, Jawl in mean good just we a acquire years of Blair lot and as time those may So Bolt, each products at Lumber et over have but locations. Tanner

and across the selling all their products product were in of complementary we're better GMS acquisitions okay and complementary think as an moving business. doing other knowledge capability. So is that Phoenix, job result strategy at be that of part of AMW out their to I of help a And those parts

Scott Deakin

Generally complementary commercial. bit more leads little are to

there products, we're the headwind but is them. the there little in So focus in other really putting into key same that seeing are the lines those outperformance about of product related that we're of that bit commercially a some

Steven Ramsey

gain to share and And those maybe there, Can the this you? pre-COVID you're talk in share as focus it's for great. from X who products. you gaining years add-on same couple That's a was or now as source of even prior gaining share if of the

John Turner

fasteners mean the is really distributed depending on product, a I mean same yes, it's the I people. mean, business. and I tools right? widely

is it's being getting in They of have when better another but would to us carry traditionally our lot that's And Remember, contractor. selling products gain a previously the distributed better many from types really our wallboard at is more install then the it that And themselves. comes share. at stucco just that gone to commercial we that base and a which so contract, mostly more they and is it that of the insulation EIFS don't they the with and us players tools do acquisitions in both but really focus fasteners to is contractors more it sub And insulation. of on just particular working. in installers. relying commercial for on how customer R.S. small insulation moving be moving markets. And of now, board for to businesses of across kind our really it dedicated Elliott, for. That's by shop a specialty product

has to we're that getting level us, been dedicated focus, a second for success contractor so I and think there. seeing some And

Operator

Thank you.

the end appreciate your does our teleconference. that We reached question-and-answer conclude that, today's participation. with have We of session. And

the lines Enjoy disconnect your your You time. rest may day. this at of

GMS (GMS) 29 Aug 242025 Q1 Earnings call transcript