Tucker, Georgia-based specialty building products distributor GMS reported net sales, net income and adjusted EBIDTA results for its fiscal 2024 second-quarter that were ahead of previous expectations, thanks to commercial and multi-family wallboard, ceiling and steel framing volumes which outpaced the forecast.

“These solid levels of demand helped to offset a steeper than anticipated steel pricing decline along with single-family demand that is comparatively reduced versus the prior year, but sequentially improving,” GMS President and CEO John Turner Jr. said in a Dec. 7 earnings report.

The 2Q 2024 results showed net sales of $1.4 billion — flat compared to the last quarter and a slight decrease compared to the second quarter of last year. Organic net sales decreased 3.1%. A marked price deflation in steel framing reduced net sales by $85 million for the quarter.

Net income for the quarter was $81 million, a decrease of 21.5% compared to net income of $103.2 million in the previous year. Net income margin declined 150 basis points to 5.7%, while adjusted net income was $94.6 million, compared to $119.5 million in the previous year.

The distributor’s adjusted EBITDA of $167.6 million decreased $28.0 million year-over-year, or 14.3%, while adjusted EBITDA margin was 11.8%, compared to 13.7% a year earlier.

Year-over-year quarterly sales changes by product category:

• Wallboard sales of $585.2 million increased 0.1% (down 0.3% on an organic basis).
• Ceilings sales of $175.3 million increased 9.9% (up 7.2% on an organic basis).
• Steel Framing sales of $232.1 million decreased 16.6% (down 17.4% on an organic basis).
• Complementary Product sales of $428.3 million increased 4.8% (down 1.4% on an organic basis).

During the second quarter of fiscal 2024, GMS acquired tools and fasteners distributor AMW Construction Supply, which officials sad contributed positively to the quarter.

The company  — which made MDM’s 2023 Top Distributors List, ranking No. 9 on the Top Building Materials/Construction Distributors List — also added two new greenfield locations and one new AMES store location.

Looking Ahead

“In the near term, we anticipate the backlog in multi-family construction to drive continued growth in this end market through the end of fiscal 2024, albeit at declining year-over-year rates,” Turner said. “Despite some potential headwinds from tightened credit conditions, our commercial demand is expected to continue its current pace of activity over the next few quarters. Additionally, we are optimistic about improving single-family activity, as the very recent easing of mortgage rates, limited supply of existing homes for sale and favorable demographics seem to be setting up improved conditions, particularly as we look out to fiscal 2025.”