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 GMS Reports Results for Fourth Quarter and Fiscal Year Ended April 30, 2016
   Tuesday, July 12, 2016 7:00:02 AM ET

--- Completes Initial Public Offering in June 2016 -

GMS Inc. (GMS ), a leading North American distributor of wallboard and suspended ceilings systems, today reported financial results for the fourth quarter and fiscal year ended April 30, 2016.

Fiscal Year 2016 Highlights Compared to Fiscal Year 2015

-- Net sales increased 18.3% to $1.86 billion; base business net sales up 7.6%

-- Wallboard unit volume grew 22.1% to 2.84 billion square feet

-- Net income improved significantly to $12.6 million, or $0.38 per share, compared to a net loss of $(11.7) million, or $(0.36) per share in fiscal 2015

-- Adjusted EBITDA increased 32.0% to $150.3 million, improving 70bps as a percentage of net sales

-- Completed seven acquisitions with a combined $208 million of trailing twelve month net sales

-- Branch locations grew to 186 from 156

Fourth Quarter 2016 Highlights Compared to Fourth Quarter 2015

-- Net sales increased 30.3% to $527.2 million; base business net sales up 16.0%

-- Wallboard unit volume grew 36.0% to 816 million square feet

-- Net income improved to $8.9 million, or $0.27 per share, compared to $2.1 million, or $0.07 per share

-- Adjusted EBITDA increased 46.8% to $43.7 million

Mike Callahan, President and CEO of GMS, stated, "Fiscal 2016 marked a record year of progress for GMS. We are extremely pleased with the consistent improvement across all of our major product categories throughout the year, resulting in significant growth in our net sales and Adjusted EBITDA. This expansion reflects our balanced business approach along with improving end market demand. Furthermore, we outpaced the market growth rate for the fifth consecutive year as we continued to capture core market share, open additional greenfield locations and complete accretive acquisitions. We also effectively managed our costs and capitalized on our national scale advantages as we delivered a 140 basis point improvement in gross margin along with growth in Adjusted EBITDA as a percentage of net sales to 7.4%."

Mr. Callahan continued, "In June 2016, we successfully completed our initial public offering, from which we used the net proceeds in combination with cash on hand to pay down $160.0 million of debt and eliminate approximately $12.4 million of annualized cash interest expense. With our strengthened balance sheet and ample capital resources, we are firmly situated to continue capitalizing on the ongoing recovery in construction end markets, which we believe remain in an extended period of expansion, and still have significant upside when compared to historical levels. With our attractive end markets and our ongoing pursuit of select accretive acquisitions, we are well-positioned to further expand our industry leading positions in wallboard and ceilings distribution throughout North America."

Fiscal Year 2016 Results

Net sales for the fiscal year ended April 30, 2016 increased 18.3% to $1.86 billion, compared to $1.57 billion for the fiscal year ended April 30, 2015. Net sales increased across all product categories driven by stronger commercial and residential construction activity, the opening of new branches and the favorable impact of acquisitions.

-- Wallboard sales of $871.0 million in fiscal 2016 increased 21.3%, compared to fiscal 2015, driven by a 22.1% increase in wallboard volume to 2.84 billion square feet. Greater end market demand, market share gains and the impact of acquisitions were the primary contributors to the increase in wallboard volume, which more than offset a slight decline in wallboard prices year-over-year.

-- Ceilings sales of $297.1 million in fiscal 2016 rose 6.6%, compared to fiscal 2015, due to improved pricing, a pickup in commercial activity and acquisitions.

-- Steel framing sales of $281.3 million in fiscal 2016 grew 15.7%, compared to fiscal 2015, attributable to greater commercial activity and acquisitions, partially offset by price declines as a result of lower industry steel prices.

-- Other product sales of $408.8 million in fiscal 2016, which include joint treatment, insulation, tools, fasteners and other complementary products, increased 23.9%, compared to fiscal 2015, due to improved pricing, retail growth initiatives and acquisitions.

Gross profit of $593.2 million in fiscal 2016 increased 23.8%, compared to $479.0 million in fiscal 2015, primarily driven by higher net sales. Gross margin of 31.9% improved by 140 basis points, compared to 30.5% in the prior year. The improvement in gross margin was attributable to better product margins and a favorable sales mix.

Net income of $12.6 million in fiscal 2016, or $0.38 per share, grew $24.3 million, compared to a net loss of $(11.7) million, or $(0.36) per share, in fiscal 2015. Adjusted net income of $47.4 million, or $1.45 per share, increased $15.7 million, compared to $31.7 million, or $0.98 per share, in the prior year. The growth in adjusted net income was primarily attributable to higher net sales and gross profit which more than offset increased selling, general and administrative expenses, including warehouse, delivery and payroll to support expanded operations.

Adjusted EBITDA of $150.3 million in fiscal 2016 million grew 32.0%, compared to $113.9 million in fiscal 2015. Adjusted EBITDA for fiscal 2016 includes $12.1 million of contributions from acquisitions from the predecessor period of acquisitions completed during fiscal 2016. Adjusted EBITDA for fiscal 2015 includes $8.1 million of contributions from acquisitions from the predecessor period of acquisitions completed during fiscal 2015. Adjusted EBITDA margin, which is calculated without consideration of the contributions from acquisitions, was 7.4% as a percentage of net sales in fiscal 2016, compared to 6.7% in fiscal 2015, representing strong overall improvement in operating performance.

Fourth Quarter 2016 Results

Net sales for the fourth quarter ended April 30, 2016 grew 30.3% to $527.2 million, compared to $404.5 million for the fourth quarter ended April 30, 2015.

-- Wallboard sales of $248.8 million in the fourth quarter 2016 increased 31.6%, compared to the fourth quarter 2015. Wallboard unit volume grew 36.0% million to 816 million square feet, helped by greater end market demand and the impact of acquisitions which more than offset a decline in wallboard prices year-over-year.

-- Ceiling sales of $78.2 million in the fourth quarter 2016 rose 12.6%, compared to the fourth quarter 2015, helped by improved pricing, a pickup in commercial activity and acquisitions.

-- Steel framing sales of $77.8 million in the fourth quarter 2016 grew 33.0%, compared to the fourth quarter 2015, due to greater commercial activity and acquisitions which more than offset price declines as industry steel prices fell year-over-year.

-- Other product sales of $122.4 million in the fourth quarter 2016 were up 39.8%, compared to the fourth quarter 2015, attributable to price gains, retail growth initiatives and acquisitions.

Gross profit of $174.2 million for the fourth quarter 2016 increased 38.0%, compared to $126.2 million in the fourth quarter 2015. Gross margin of 33.0% expanded by 180 basis points, compared to 31.2% in the fourth quarter 2015, marking steady improvement throughout fiscal 2016.

Net income of $8.9 million, or $0.27 per share, for the fourth quarter increased $6.8 million, compared to $2.1 million, or $0.07 per share, in the fourth quarter 2015. Adjusted net income of $17.4 million, or $0.53 per share, grew $8.7 million, compared to $8.7 million, or $0.27 per share, in the fourth quarter 2015.

Adjusted EBITDA of $43.7 million for the fourth quarter 2016 rose 46.8%, compared to $29.8 million in the fourth quarter 2015. Adjusted EBITDA for the fourth quarter 2016 includes $0.1 million of contributions from acquisitions from the predecessor period of acquisitions completed during the fourth quarter 2016. Adjusted EBITDA for fourth quarter 2015 includes $1.0 million of contributions from acquisitions from the predecessor period of acquisitions completed during fourth quarter 2015. Adjusted EBITDA margin, excluding the predecessor period of acquisitions, was 8.3% as a percentage of net sales for the fourth quarter 2016, compared to 7.1% in the fourth quarter 2015.

Capital Resources

At April 30, 2016, the Company had cash of $19.1 million and total debt of $644.6 million, as compared to cash of $12.3 million and total debt of $557.0 million at April 30, 2015. On a pro forma basis, after giving effect to the completion of our initial public offering on June 1, 2016, the Company had cash in the amount of $16.3 million and total debt of $484.6 million at April 30, 2016.

Recent Events

Initial Public Offering

On June 1, 2016, GMS completed the initial public offering of its common stock, raising net proceeds of approximately $157.2 million, including the full exercise of the underwriters’ option to purchase additional shares. Following completion of the offering, the Company had 40,942,905 of basic and 41,605,076 of diluted shares outstanding.

In connection with the offering, the Company used all of the net proceeds, together with cash on hand, to repay, in full, its outstanding indebtedness of $160.0 million plus accrued and unpaid interest under its 7.75% senior secured second lien term loan facility due April 2022.

Acquisition Activity

Subsequent to April 30, 2016, the Company acquired Wall & Ceiling Supply Co., Inc. (Wall & Ceiling Supply) and Rockwise, LLC (Rockwise) for a total purchase price of approximately $26.3 million. Wall & Ceiling Supply and Rockwise distribute wallboard and related building materials from four locations in Washington, Arizona and Colorado. For the twelve months ended April 30, 2016, the combined companies generated approximately $35.2 million in net sales and the earnings of these entities would have contributed approximately $4.5 million to our Adjusted EBITDA for that period, including operating synergies.

Conference Call and Webcast

The Company will host a conference call and webcast to discuss its results for the fourth quarter and fiscal year ended April 30, 2016 at 11:00 a.m. Eastern Time on July 12, 2016. Investors who wish to participate in the call should dial 877-407-0789 (domestic) or 201-689-8562 (international) at least 5 minutes prior to the start of the call. The live webcast will be available on the Investors section of the Company’s website at www.gms.com. There will be a slide presentation of the results available on that page of the website as well. Replays of the call will be available through August 12, 2016 and can be accessed at 877-870-5176 (domestic) or 858-384-5517 (international) and entering the pass code 13640153.

About GMS Inc.

Founded in 1971, GMS operates a national network of distribution centers across the United States. GMS’s extensive product offering of wallboard, suspended ceilings systems, or ceilings, and complementary interior construction products is designed to provide a comprehensive one-stop-shop for our core customer, the interior contractor who installs these products in commercial and residential buildings.

Use of Non-GAAP Financial Measures

GMS reports its financial results in accordance with GAAP. However, we present Adjusted net income, Adjusted EBITDA and Adjusted EBITDA margin, which are not recognized financial measures under GAAP, because we believe they assist investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. Management believes Adjusted EBITDA, adjusted net income and base business growth are helpful in highlighting trends in our operating results, while other measures can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which companies operate and capital investments. In addition, we utilize Adjusted EBITDA in certain calculations under our senior secured asset based revolving credit facility and our senior secured first and second lien term loan facilities.

You are encouraged to evaluate each adjustment and the reasons we consider it appropriate for supplemental analysis. In addition, in evaluating Adjusted EBITDA, you should be aware that in the future, we may incur expenses similar to the adjustments in the presentation of Adjusted EBITDA. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. In addition, Adjusted EBITDA may not be comparable to similarly titled measures used by other companies in our industry or across different industries.

Forward-Looking Statements and Information:

This press release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. You can generally identify forward-looking statements by our use of forward-looking terminology such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "might," "plan," "potential," "predict," "seek," or "should," or the negative thereof or other variations thereon or comparable terminology. In particular, statements about the markets in which we operate, including the potential for growth in the commercial, residential and repair and remodeling, or R&R, markets, statements about our expectations, beliefs, plans, strategies, objectives, prospects, assumptions or future events or performance, statements related to net sales, gross profit and capital expenditures, as well as non-GAAP financial measures such as Adjusted EBITDA, adjusted net income and base business growth and statements regarding potential acquisitions and future greenfield locations contained in this press release are forward-looking statements. We have based these forward-looking statements on our current expectations, assumptions, estimates and projections. While we believe these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control. Forward-looking statements involve risks and uncertainties, including, but not limited to, economic, competitive, governmental and technological factors outside of our control, that may cause our business, strategy or actual results to differ materially from the forward-looking statements. These risks and uncertainties may include, among other things: changes in the prices, supply, and/or demand for products which we distribute; general economic and business conditions in the United States; the activities of competitors; changes in significant operating expenses; changes in the availability of capital and interest rates; adverse weather patterns or conditions; acts of cyber intrusion; variations in the performance of the financial markets, including the credit markets; and other factors described in the "Risk Factors" section in our Annual Report on Form 10-K for the fiscal year ended April 30, 2016, and in our other periodic reports filed with the SEC. In addition, the statements in this release are made as of July 12, 2016. We undertake no obligation to update any of the forward looking statements made herein, whether as a result of new information, future events, changes in expectation or otherwise. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to July 12, 2016.

 
                                                                                                              GMS Inc.
                                                                                                   Consolidated Statements of Operations (Unaudited)
                                                                                     Three Months Ended April 30, 2016 and 2015 and Years Ended
                                                                                                      April 30, 2016 and 2015
                                                                                            (in thousands of dollars, except for share and per share data)
 
                                                                                     Three Months Ended                                                  Year Ended
                                                                                                             April 30,                                                                          April 30,
                                                                                     --------------------------------------------------                                ----------------------------------------------------
                                                                                          2016                  2015                                      2016                   2015
                                                                                     --------------                          ----------------                          ----------------                          ----------------
Net sales                                                                                $ 527,182                                 $ 404,499                               $ 1,858,182                               $ 1,570,085
Cost of sales (exclusive of depreciation and amortization shown                            352,979                                   278,263                                 1,265,018                                 1,091,114
separately below)
                                                                                     ------------                            --------------                            --------------                            --------------
Gross profit                                                                               174,203                                   126,236                                   593,164                                   478,971
                                                                                     --------------                          ----------------                          ----------------                          ----------------
Operating expenses:
  Selling, general and administrative                                                      133,231                                   103,311                                   470,035                                   396,155
  Depreciation and amortization                                                             16,879                                    15,997                                    64,215                                    64,165
                                                                                     --------------                          ----------------                          ----------------                          ----------------
Total operating expenses                                                                   150,110                                   119,308                                   534,250                                   460,320
                                                                                     --------------                          ----------------                          ----------------                          ----------------
Operating income                                                                            24,093                                     6,928                                    58,914                                    18,651
Other (expense) income:
  Interest expense                                                                          (9,428 )                                  (8,871 )                                 (37,418 )                                 (36,396 )
  Change in fair value of financial instruments                                                (19 )                          --                                       (19 )                                  (2,494 )
  Other income, net                                                                          2,219                                       416                                     3,671                                     1,916
                                                                                     --------------                          ----------------                          ----------------                          ----------------
Total other (expense), net                                                                  (7,228 )                                  (8,455 )                                 (33,766 )                                 (36,974 )
                                                                                     ------------                            --------------                            --------------                            --------------
Income (loss) before taxes                                                                  16,865                                    (1,527 )                                  25,148                                   (18,323 )
Provision for (benefit from) income taxes                                                    7,925                                    (3,663 )                                  12,584                                    (6,626 )
                                                                                     --------------                          ----------------                          ----------------                          ----------------
Net income (loss)                                                                        $   8,940                                 $   2,136                               $    12,564                               $   (11,697 )
                                                                                     ===== =======                           ======= =======                           ===== =========                           ===== =========
Weighted average shares outstanding:
  Basic                                                                                 32,892,905                                32,551,182                                32,799,098                                32,450,401
  Diluted                                                                               33,155,140                                32,684,348                                33,125,242                                32,450,401
Net income (loss) per share:
  Basic                                                                                  $    0.27                                 $    0.07                               $      0.38                               $     (0.36 )
  Diluted                                                                                $    0.27                                 $    0.07                               $      0.38                               $     (0.36 )
                                                                                     ===== =======                           ======= =======                           ===== =========                           ===== =========
                                                                                                                                                                                                                                  
 
                                                                                                              GMS Inc.
                                                                                                        Consolidated Balance Sheets (Unaudited)
                                                                                                      April 30, 2016 and 2015
                                                                                                     (in thousands of dollars, except share data)
 
                                                                                                                                                      April 30,                April 30,
                                                                                                                                                                           2016                                        2015
                                                                                                                                                                    ----------------                            ----------------
                                                                    Assets
Current assets:
  Cash and cash equivalents                                                                                                                                               $    19,072                                 $    12,284
  Trade accounts and notes receivable, net of allowances of $8,607 and                                                                                                        270,257                                     214,321
  $8,633, respectively
  Inventories, net                                                                                                                                                            165,766                                     147,603
  Deferred income tax assets, net                                                                                                                                              11,047                                       9,836
  Prepaid expenses and other current assets                                                                                                                                    16,548                                      42,936
                                                                                                                                                                    ------------------                          ------------------
Total current assets                                                                                                                                                          482,690                                     426,980
                                                                                                                                                                    ------------------                          ------------------
Property and equipment, net                                                                                                                                                   153,260                                     158,824
Goodwill                                                                                                                                                                      386,306                                     348,811
Intangible assets, net                                                                                                                                                        221,790                                     215,762
Other assets                                                                                                                                                                    7,815                                      10,599
                                                                                                                                                                    ------------------                          ------------------
Total assets                                                                                                                                                              $ 1,251,861                                 $ 1,160,976
                                                                                                                                                                    ======= =========                           ======= =========
                                        Liabilities and Stockholders’ Equity
Current liabilities:
  Accounts payable                                                                                                                                                        $    91,500                                 $    77,834
  Accrued compensation and employee benefits                                                                                                                                   51,680                                      48,069
  Other accrued expenses and current liabilities                                                                                                                               41,814                                      57,172
  Current portion of long-term debt                                                                                                                                             8,667                                       6,759
  Revolving credit facility                                                                                                                                                    26,914                                      16,950
                                                                                                                                                                    ------------------                          ------------------
Total current liabilities                                                                                                                                                     220,575                                     206,784
                                                                                                                                                                    ------------------                          ------------------
Non-current liabilities:
  Long-term debt, less current portion                                                                                                                                        609,029                                     533,275
  Deferred income taxes, net                                                                                                                                                   52,250                                      69,671
  Other liabilities                                                                                                                                                            33,600                                      23,222
  Liabilities to noncontrolling interest holders, less current portion                                                                                                         25,247                                      28,452
                                                                                                                                                                    ------------------                          ------------------
Total liabilities                                                                                                                                                             940,701                                     861,404
                                                                                                                                                                    ------------------                          ------------------
Commitments and contingencies
Stockholders’ equity:
                                                                                                                                                                                  329                                         328
  Common stock, $0.01 par value, authorized 500,000,000 shares;
  32,892,905 and
       32,757,905 shares issued and outstanding
  at April 30, 2016 and 2015, respectively
                                                                                                                                                                       --                              --
  Preferred stock, $0.01 par value, authorized 50,000,000 shares; 0
  shares issued and
       outstanding at April 30, 2016 and 2015
  Additional paid-in capital                                                                                                                                                  334,244                                     329,884
  Accumulated deficit                                                                                                                                                         (22,265 )                                   (30,650 )
  Accumulated other comprehensive (loss) income                                                                                                                                (1,148 )                                        10
                                                                                                                                                                    ------------------                          ------------------
Total stockholders’ equity                                                                                                                         311,160                                     299,572
                                                                                                                                                                    ------------------                          ------------------
Total liabilities and stockholders’ equity                                                                                                     $ 1,251,861                                 $ 1,160,976
                                                                                                                                                                    ======= =========                           ======= =========
                                                                                                                                                                                                                                   
 
                                                                                                                   GMS Inc.
                                                                                                        Consolidated Statements of Cash Flows (Unaudited)
                                                                                          Three Months Ended April 30, 2016 and 2015 and Years Ended
                                                                                                           April 30, 2016 and 2015
                                                                                                                    (in thousands of dollars)
 
                                                                                                 Three Months                                                      Year Ended
                                                                                                                        Ended                                                                             April 30,
                                                                                                                      April 30,
                                                                                             ----------------------------------------------------                                ----------------------------------------------------
                                                                                                   2016                   2015                                      2016                   2015
                                                                                             ----------------                          ----------------                          ----------------                          ----------------
Cash flows from operating activities:
Net income (loss)                                                                                  $   8,940                                 $   2,136                                 $  12,564                                 $ (11,697 )
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
    Depreciation and amortization of property and equipment                                            6,460                                     7,181                                    26,667                                    32,208
    Accretion and amortization of debt discount and deferred financing                                   878                                       833                                     3,438                                     3,374
    fees
    Amortization of intangible assets                                                                 10,419                                     8,798                                    37,548                                    31,957
    Provision for losses on accounts and notes receivable                                             (1,035 )                                    (408 )                                  (1,032 )                                    (233 )
    Provision for obsolescence of inventory                                                               (3 )                                       5                                        80                                     1,077
    Equity-based compensation                                                                            991                                     2,274                                     4,733                                     9,012
    (Gain) loss on sale or impairment of assets                                                         (721 )                                     250                                      (645 )                                   1,089
    Loss on fair value of financial instruments                                               --                            --                            --                                     2,494
    Deferred income tax expense                                                                      (13,842 )                                  11,740                                   (20,499 )                                 (21,664 )
    Prepaid expenses and other assets                                                                   (559 )                                   1,021                                    (4,682 )                                   1,989
    Accrued compensation and employee benefits                                                        15,383                                    10,639                                     3,454                                     8,204
    Other accrued expenses and liabilities                                                               132                                     3,735                                     5,551                                     9,170
    Liabilities to noncontrolling interest holders                                                      (743 )                                     539                                       446                                     1,862
    Income taxes                                                                                      17,998                                   (22,089 )                                   7,106                                      (905 )
                                                                                             ----------------                          ----------------                          ----------------                          ----------------
                                                                                                      44,298                                    26,654                                    74,729                                    67,937
    Changes in primary working capital components, net of acquisitions:
      Trade accounts and notes receivable                                                            (29,212 )                                  (3,395 )                                 (27,338 )                                 (11,649 )
      Inventories                                                                                       (428 )                                   7,579                                      (699 )                                  (4,610 )
      Accounts payable                                                                                15,187                                    15,985                                     1,055                                    (3,655 )
                                                                                             ----------------                          ----------------                          ----------------                          ----------------
    Cash provided by operating activities                                                             29,845                                    46,823                                    47,747                                    48,023
                                                                                             ----------------                          ----------------                          ----------------                          ----------------
Cash flows from investing activities:
    Purchases of property and equipment                                                               (3,697 )                                  (2,940 )                                  (7,692 )                                 (13,940 )
    Proceeds from sale of assets                                                                       3,084                                     1,160                                     9,847                                     3,807
    Purchase of financial instruments                                                         --                            --                            --                                    (4,638 )
    Acquisitions of businesses, net of cash acquired                                                 (29,886 )                                 (48,095 )                                (113,597 )                                 (66,695 )
                                                                                             ----------------                          ----------------                          ----------------                          ----------------
    Cash used in investing activities                                                                (30,499 )                                 (49,875 )                                (111,442 )                                 (81,466 )
                                                                                             ----------------                          ----------------                          ----------------                          ----------------
Cash flows from financing activities:
    Repayments on the revolving credit facility                                                     (252,438 )                                (100,006 )                                (697,144 )                                (303,099 )
    Borrowings from the revolving credit facility                                                    269,257                                   106,481                                   782,104                                   320,049
    Debt issuance costs                                                                                 (391 )                          --                                      (391 )                          --
    Payments of principal on long-term debt                                                             (975 )                                    (990 )                                  (3,931 )                                  (3,927 )
    Principal repayments of capital lease obligations                                                 (1,067 )                                  (1,084 )                                  (4,249 )                                  (4,327 )
    Proceeds from sales of common stock                                                       --                                     3,820                            --                                     5,370
    Payment of contingent consideration                                                               (2,043 )                                    (526 )                                  (6,598 )                                  (1,001 )
    Stock repurchases                                                                         --                            --                                    (5,827 )                          --
    Exercise of stock options                                                                 --                            --                                     6,519                            --
                                                                                             ----------------                          ----------------                          ----------------                          ----------------
    Cash provided by financing activities                                                             12,343                                     7,695                                    70,483                                    13,065
                                                                                             ----------------                          ----------------                          ----------------                          ----------------
Increase (decrease) in cash and cash equivalents                                                      11,689                                     4,643                                     6,788                                   (20,378 )
Balance, beginning of period                                                                           7,383                                     7,641                                    12,284                                    32,662
                                                                                             ----------------                          ----------------                          ----------------                          ----------------
Balance, end of period                                                                             $  19,072                                 $  12,284                                 $  19,072                                 $  12,284
                                                                                             ======= =======                           ======= =======                           ======= =======                           ======= =======
Supplemental cash flow disclosures:
  Cash paid for income taxes                                                                       $   3,817                                 $   6,658                                 $  26,067                                 $  16,111
  Cash paid for interest                                                                               9,688                                     8,134                                    34,557                                    31,720
                                                                                                                                                                                                                                            
 
                                                                                                                                     GMS Inc.
                                                                                                                               Net Sales by Product Group (Unaudited)
                                                                                                            Three Months Ended April 30, 2016 and 2015 and Years Ended
                                                                                                                             April 30, 2016 and 2015
                                                                                                                                      (in thousands of dollars)
 
                                                       Three Months Ended April 30,                                                                                       Year Ended April 30,
                                     -------------------------------------------------------------------------------------------------------                         -----------------------------------------------------------------------------------------------------------
                                         2016       % of           2015       % of                               2016        % of            2015        % of
                                                                       Total                                                           Total                                                             Total                                                             Total
                                     ----------                       -----                          ----------                       -----                          ------------                       -----                          ------------                       -----
Wallboard                              $ 248,829                       47.2 %                          $ 189,032                       46.7 %                          $   870,952                       46.9 %                          $   718,102                       45.7 %
Ceilings                                  78,159                       14.8 %                             69,414                       17.2 %                              297,110                       16.0 %                              278,749                       17.8 %
Steel framing                             77,769                       14.8 %                             58,466                       14.5 %                              281,340                       15.1 %                              243,173                       15.5 %
Other products                           122,425                       23.2 %                             87,587                       21.6 %                              408,780                       22.0 %                              330,061                       21.0 %
                                     ------------                                                    ------------                                                    --------------                                                    --------------
Total net sales                        $ 527,182                                                       $ 404,499                                                       $ 1,858,182                                                       $ 1,570,085
                                     === =======                                                     === =======                                                     === =========                                                     === =========
                                                                                                                                                                                                                                                                                 
 
                                                                                                        GMS Inc.
                                                                                          Reconciliation of Net Income (Loss) to Adjusted EBITDA
                                                                                                                (Unaudited)
                                                                               Three Months Ended April 30, 2016 and 2015 and Years Ended
                                                                                                April 30, 2016 and 2015
                                                                                                         (in thousands of dollars)
 
                                                                                           Three Months Ended                                                 Year Ended
                                                                                                                   April 30,                                                                         April 30,
                                                                                          ----------------------------------------------------                                -------------------------------------------------
                                                                                                2016                   2015                                      2016                 2015
                                                                                          ----------------                          ----------------                          ----------------                          -------------
Net income (loss)                                                                               $   8,940                                 $   2,136                                 $  12,564                              $ (11,697 )
Interest expense                                                                                    9,428                                     8,871                                    37,418                                 36,396
Interest income                                                                                      (243 )                                    (223 )                                    (928 )                               (1,010 )
Income tax expense (benefit)                                                                        7,925                                    (3,663 )                                  12,584                                 (6,626 )
Depreciation expense                                                                                6,460                                     7,199                                    26,667                                 32,208
Amortization expense                                                                               10,419                                     8,798                                    37,548                                 31,957
                                                                                          ----------------                          ----------------                          ----------------                          -------------
EBITDA                                                                                          $  42,929                                 $  23,118                                 $ 125,853                              $  81,228
                                                                                          ------- -------                           ------- -------                           ------- -------                           ---- -------
Stock appreciation rights expense                                                               $     365                                 $     763                                 $   1,988                              $   2,268
Redeemable noncontrolling interests                                                                  (292 )                                     703                                       880                                  1,859
Equity-based compensation                                                                             610                                     1,346                                     2,699                                  6,455
Acquisition related costs                                                                  --                            --                            --                                    837
Severance, other costs related to discontinued operations and closed                               (1,054 )                                     150                                       379                                    413
branches, and certain other costs
Transaction costs (acquisitions and other)                                                            939                                     1,615                                     3,751                                  1,891
(Gain) loss on disposal of assets                                                                    (720 )                                     250                                      (645 )                                1,089
Management fee to related party                                                                       563                                       563                                     2,250                                  2,250
Effects of fair value adjustments to inventory                                                        223                                       266                                     1,009                                  5,012
Interest rate swap and cap mark-to-market                                                              19                            --                                        19                                  2,494
Contributions from acquisitions                                                                       132                                     1,005                                    12,093                                  8,064
                                                                                          ----------------                          ----------------                          ----------------                          -------------
EBITDA add-backs (1)                                                                                  785                                     6,661                                    24,423                                 32,632
                                                                                          ----------------                          ----------------                          ----------------                          -------------
Adjusted EBITDA                                                                                 $  43,714                                 $  29,779                                 $ 150,276                              $ 113,860
                                                                                          ======= =======                           ======= =======                           ======= =======                           ==== =======
Adjusted EBITDA margin (2)                                                                            8.3 %                                     7.1 %                                     7.4 %                                  6.7 %

(1) Refer to Exhibit 99.2, GMS Inc. presentation to investors, for more information about EBITDA add-backs.

(2) Adjusted EBITDA margin, which is calculated as a percentage of net sales, excludes contributions from acquisitions for the periods presented to be consistent with our calculation of net sales for the same period

 
                                                                                                    GMS Inc.
                                                                                   Reconciliation of Income (Loss) Before Taxes to Adjusted Net
                                                                                                     Income (Loss) (Unaudited)
                                                                           Three Months Ended April 30, 2016 and 2015 and Years Ended
                                                                                            April 30, 2016 and 2015
                                                                                  (in thousands of dollars, except for share and per share data)
 
                                                                         Three Months Ended                                             Year Ended
                                                                                                 April 30,                                                                     April 30,
                                                                           ----------------------------------------------                                -----------------------------------------------
                                                                               2016                2015                                   2016                 2015
                                                                           -------------                          -------------                          -------------                          --------------
Income (loss) before taxes                                                     $ 16,865                               $ (1,527 )                             $ 25,148                               $ (18,323 )
EBITDA add-backs (1)                                                                653                                  5,656                                 12,330                                  24,568
Purchase accounting depreciation and amortization (2)                            12,492                                 11,484                                 44,099                                  50,399
                                                                           -------------                          -------------                          -------------                          --------------
Adjusted pre-tax income                                                          30,010                                 15,613                                 81,577                                  56,644
Adjusted income tax expense                                                      12,574                                  6,885                                 34,181                                  24,980
                                                                           -------------                          -------------                          -------------                          --------------
Adjusted net income                                                            $ 17,436                               $  8,728                               $ 47,396                               $  31,664
                                                                           ===== ======                           ===== ======                           ===== ======                           ===== =======
Effective tax rate (3)                                                             41.9 %                                 44.1 %                                 41.9 %                                  44.1 %
                                                                                                                                                                                                               
Weighted average shares outstanding:
  Basic                                                                      32,892,905                             32,551,182                             32,799,098                              32,450,401
  Diluted                                                                    33,155,140                             32,684,348                             33,125,242                              32,450,401
Net income (loss) per share:
  Basic                                                                        $   0.53                               $   0.27                               $   1.45                               $    0.98
  Diluted                                                                      $   0.53                               $   0.27                               $   1.43                               $    0.98
                                                                           ===== ======                           ===== ======                           ===== ======                           ===== =======

(1) EBITDA add-backs, exclusive of contributions from acquisitions, as shown on the Reconciliation of net income (loss) to adjusted EBITDA table.

(2) Depreciation, amortization and certain other adjustments related to the increase in value of certain long-term assets associated with the April 1, 2014 acquisition of the predecessor company.

(3) Normalized effective tax rate excluding the impact of purchase accounting and certain other deferred tax amounts.

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20160712005608r1&sid=cmtx6&distro=nx&lang=en

View source version on businesswire.com: http://www.businesswire.com/news/home/20160712005608/en/

SOURCE: GMS Inc.

GMS Inc. 
Investor Relations: 
ir@gms.com 
678-353-2883 
or 
Media Relations: 
marketing@gms.com 
770-723-3378


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